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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, 1998
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. stock market has generated strong returns over the past six and
twelve month periods. The S&P 500 Index produced total returns of 15.0% and
30.6% for the six and twelve months ended May 31, 1998. The Growth Fund had
total returns of 11.9% and 27.6% for the same periods.
Returns earned by U.S. common stocks have been extraordinary over the past
31/2 years. In our opinion, returns of this magnitude are not sustainable over
long periods of time. Historical studies indicate that the average annual return
of the U.S. stock market was approximately 11% from 1926-97. Obviously, returns
have fluctuated significantly from this average over shorter time periods.
Business conditions are quite favorable in the United States and Europe.
However, economic activity appears to be contracting in Asia. Several U.S. and
European firms are experiencing significant weakness in Asian markets.
Increasingly, economic activity and financial markets are linked globally.
We are confident that investing in growing companies with fine managements
will produce satisfactory long-term results. Your fund manages risk through
fundamental analysis and broad diversification.
When measured by virtually all general standards, U.S. common stocks are
selling at the high end of historical valuation levels. We encourage a
disciplined long-term program of periodic investments in the Growth Fund. Such
an investment program allows shareholders to capture the benefits of dollar cost
averaging and to participate in any long-term appreciation of common stock
prices.
The directors have declared a semi-annual income dividend of $.33 per share
which was paid on June 15, 1998. It was used to purchase additional shares for
your account unless you have elected to receive payment directly by check.
Sincerely,
/s/ Paul N. Eckley /s/ John S. Concklin /s/ James E. Freytag
Paul N. Eckley John S. Concklin James E. Freytag
Vice President Vice President Vice President
June 22, 1998
2
<PAGE>
STATE FARM GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS
MAY 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
COMMON STOCKS (97.6%)
AGRICULTURE, FOODS & BEVERAGE (8.1%)
2,860,950 Archer-Daniels-Midland Company $ 54,000,431
92,000 Campbell Soup Company 5,014,000
573,800 The Coca-Cola Company 44,971,575
930,000 Kellogg Company 38,420,625
291,000 Pioneer Hi-Bred International, Inc. 11,076,187
104,000 Sara Lee Corporation 6,123,000
81,600 Sysco Corporation 1,902,300
140,500 Unilever N.V. 11,090,719
9,200 (a) Vlasic Foods International 199,525
-----------------
172,798,362
BANKS (11.5%)
170,000 ABN Amro Holding N.V. 4,113,380
120,825 AmSouth Bancorporation 4,644,211
391,160 Banc One Corporation 21,562,695
148,700 BankAmerica Corporation 12,295,631
145,100 First Chicago NBD Corporation 12,687,181
6,200 First Empire State Corporation 3,149,600
90,000 First Security Corporation 2,047,500
43,500 First Virginia Banks, Inc. 2,272,875
61,300 Golden West Financial Corporation 6,620,400
135,000 J.P. Morgan & Co. Incorporated 16,765,312
404,900 National Commerce Bancorporation 17,942,131
72,000 Northern Trust Corporation 5,078,254
610,000 Norwest Corporation 23,713,750
640,074 Pacific Century Financial Corporation 16,041,855
415,158 Popular, Inc. 28,801,586
345,000 Southtrust Corporation 13,994,063
74,900 Suntrust Banks, Inc. 5,917,100
62,000 TCF Financial Corporation 2,018,875
67,950 U.S. Bancorp 2,658,544
238,900 Wachovia Corporation 19,126,931
138,930 Washington Federal, Inc. 3,863,991
61,000 Wells Fargo & Company 22,051,500
-----------------
247,367,365
BUILDING MATERIALS & CONSTRUCTION (1.8%)
346,400 Vulcan Materials Company 39,316,400
3
<PAGE>
STATE FARM GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS
MAY 31, 1998
(UNAUDITED)
SHARES VALUE
CHEMICALS (7.2%)
415,000 Air Products and Chemicals, Inc. $ 36,105,000
81,000 The Dow Chemical Company 7,846,875
299,900 E.I. du Pont de Nemours and Company 23,092,300
364,300 Great Lakes Chemical Corporation 14,572,000
561,000 International Flavors & Fragrances Inc. 26,928,000
1,261,200 Sigma-Aldrich Corporation 46,033,800
-----------------
154,577,975
COMPUTER SOFTWARE & SERVICE (2.8%)
62,000 Automatic Data Processing, Inc. 3,944,750
30,800 Electronic Data Systems Corporation 1,120,350
52,700 (a) KLA-Tencor Corporation 1,785,213
567,800 (a) Microsoft Corporation 48,156,537
229,800 Oracle Corporation 5,429,025
-----------------
60,435,875
COMPUTERS (6.7%)
225,400 (a) Cisco Systems Inc. 17,045,875
322,200 Compaq Computer Corporation 8,800,087
1,437,000 Hewlett-Packard Company 89,273,625
248,200 International Business Machines Corporation 29,132,475
-----------------
144,252,062
CONSUMERS & MARKETING (6.7%)
91,900 Colgate-Palmolive Company 7,995,300
250,000 The Gillette Company 29,281,250
1,439,200 Hon Industries Inc. 46,054,400
43,728 Jostens, Inc. 1,104,132
142,200 McDonald's Corporation 9,331,875
339,400 The Procter & Gamble Company 28,488,387
589,000 Rubbermaid Incorporated 19,216,125
62,600 Steelcase Inc. 1,866,263
-----------------
143,337,732
ELECTRONIC/ELECTRICAL (5.3%)
91,900 Diebold, Inc. 2,688,075
109,400 Emerson Electric Co. 6,646,050
771,200 General Electric Company 64,298,800
483,600 Intel Corporation 34,547,175
136,600 Raychem Corporation 5,139,575
-----------------
113,319,675
4
<PAGE>
STATE FARM GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS
MAY 31, 1998
(UNAUDITED)
SHARES VALUE
ENGINEERING & CONSTRUCTION (0.2%)
14,600 ABB AB Sponsored (ADR) $ 2,357,900
14,000 ABBAG Sponsored (ADR) 2,376,527
-----------------
4,734,427
FINANCIAL SERVICES (0.7%)
36,400 The Finova Group Inc. 2,013,375
372,300 MBNA Corporation 11,797,256
-----------------
13,810,631
HEALTH CARE (15.8%)
52,800 Abbott Laboratories 3,917,100
820,000 Ballard Medical Products 18,347,500
1,550,000 Biomet, Inc. 44,756,250
29,800 (a) Boston Scientific Corporation 1,899,750
107,050 Covance Inc. 2,268,122
1,240,800 Johnson & Johnson 85,692,750
947,200 Eli Lilly and Company 58,193,600
40,000 Medtronic, Inc. 2,225,000
182,000 Merck & Co., Inc. 21,305,375
960,000 Pfizer Inc. 100,620,000
53,525 (a) Quest Diagnostics Inc. 1,160,823
-----------------
340,386,270
MACHINERY & MANUFACTURING (3.6%)
94,500 Allied Signal Inc. 4,039,875
370,000 Caterpillar Inc. 20,326,875
428,200 Corning Incorporated 16,887,138
57,800 Deere & Company 2,998,375
70,000 Illinois Tool Works Inc. 4,620,000
173,200 Minnesota Mining and Manufacturing Company 16,042,650
337,500 (a) Osmonics, Inc. 4,999,219
425,000 Pall Corporation 8,420,312
-----------------
78,334,444
MEDIA & BROADCASTING (5.6%)
873,180 The Walt Disney Company 98,778,488
155,433 Reuters Holdings PLC (ADR) 10,647,160
360,181 (a) Scandinavian Broadcasting System SA 11,075,566
-----------------
120,501,214
MINING AND METALS (1.2%)
77,800 KN Energy, Inc. 4,210,925
36,700 Newmont Mining Corporation 915,206
195,000 Nucor Corporation 10,042,500
185,000 Rio Tinto PLC (ADR) 9,342,500
81,250 Steel Dynamics, Inc. 1,574,219
-----------------
26,085,350
5
<PAGE>
STATE FARM GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS
MAY 31, 1998
(UNAUDITED)
SHARES VALUE
OIL, GAS & OTHER ENERGY (7.2%)
244,000 Amoco Corporation $ 10,202,250
440,400 (a) Barrett Resources Corporation 15,331,425
530,000 Chevron Corporation 42,333,750
612,200 Exxon Corporation 43,160,100
44,100 (a) Octel Corporation 961,931
237,100 Pennzoil Company 13,707,344
516,300 Royal Dutch Petroleum Company (ADR) 28,945,069
-----------------
154,641,869
RETAILERS (1.4%)
531,600 Wal-Mart Stores, Inc. 29,337,675
TELECOMMUNICATIONS & EQUIPMENT (9.8%)
450,000 (a) ADC Telecommunications, Inc. 12,656,250
400,000 AT&T Corp. 24,350,000
86,000 (a) Airtouch Communications, Inc. 4,095,750
232,000 Ameritech Corporation 9,845,500
290,200 Deutsche Telekom (ADR) 7,926,088
575,000 LM Ericsson Telephone Company (ADR) 16,028,125
259,266 Lucent Technologies Inc. 18,391,682
823,000 MCI Communications Corporation 44,004,822
264,000 Motorola, Inc. 13,975,500
64,900 Nokia Corporation (ADR) 4,214,444
1,192,200 SBC Communications Inc. 46,346,775
173,700 Tele Danmark A.S. 8,055,337
-----------------
209,890,273
UTILITIES & ENERGY (2.0%)
58,700 AES Corporation 2,791,919
74,900 CMS Energy Corporation 3,262,831
132,000 Duke Energy Corporation 7,606,500
88,500 FPL Group, Inc. 5,437,219
390,900 Pacificorp 9,015,131
288,000 Southern Company 7,650,000
166,000 Teco Energy, Inc. 4,347,125
98,500 Texas Utilities Company (Holding Co.) 3,890,750
-----------------
44,001,475
-----------------
Total common stocks (cost: $931,683,098) 2,097,129,074
6
<PAGE>
STATE FARM GROWTH FUND, INC.
PORTFOLIO OF INVESTMENTS
MAY 31, 1998
(UNAUDITED)
PRINCIPAL
AMOUNT VALUE
SHORT-TERM INVESTMENTS (2.5%)
$12,500,000 U.S. Treasury bills, 5.03% effective yield, due June, 1998 $ 12,495,375
4,935,000 Ford Motor Credit Co., 5.54%, due June 1998 4,935,760
26,360,000 General Motors Acceptance Corp., 5.52% to 5.55%,
due June, 1998 26,385,760
10,000,000 General Electric Capital Corp., 5.53%, due June 1998 10,016,926
-----------------
Total short-term investments (cost: $53,829,607) 53,833,821
-----------------
TOTAL INVESTMENTS (100.1%) (cost: $985,512,705) 2,150,962,895
CASH AND OTHER ASSETS,
LESS LIABILITIES (-0.1%) (1,784,507)
-----------------
NET ASSETS (100.0%) $ 2,149,178,388
=================
</TABLE>
Notes: (a) Non-income producing security.
(b) At May 31, 1998, net unrealized appreciation of $1,165,450,190
consisted of gross unrealized appreciation of $1,172,901,223 and
gross unrealized depreciation of $7,451,033 based on cost of
$985,512,705 for federal income tax purposes.
See accompanying notes to financial statements.
7
<PAGE>
STATE FARM GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
<S> <C> <C>
Investments, at value (cost $985,512,705) $ 2,150,962,895
Cash 1,630,123
Receivable for:
Dividends and interest $ 3,666,867
Shares of the Fund sold 129,450
Securities sold 1,310,240
Sundry 19,464 5,126,021
------------
Prepaid expenses 64,369
----------------
Total assets 2,157,783,408
LIABILITIES AND NET ASSETS
Payable for:
Shares of the Fund redeemed 3,023,037
Securities purchased 4,935,000
Other accounts payable (including $582,051 to Manager) 646,983
------------
Total liabilities 8,605,020
----------------
Net assets applicable to 50,444,308 shares outstanding
of $.50 par value common stock (100,000,000
shares authorized) $ 2,149,178,388
================
Net asset value, offering price and redemption
price per share $ 42.60
================
ANALYSIS OF NET ASSETS
Excess of amounts received from sales of shares
over amounts paid on redemptions of shares
on account of capital $ 960,131,072
Undistributed net realized gain on sales of investments 1,703,946
Net unrealized appreciation of investments 1,165,450,190
Undistributed net investment income 21,893,180
----------------
Net assets applicable to shares outstanding $ 2,149,178,388
================
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
STATE FARM GROWTH FUND, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED NOVEMBER 30,
MAY 31, 1998 1997
(UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of
$183,450 in 1998 and $205,192 in 1997) $ 15,386,724 23,828,520
Interest 2,186,423 5,877,994
-------------- -----------
Total investment income 17,573,147 29,706,514
EXPENSES:
Investment advisory and management fees 1,082,187 1,705,166
Audit fees 13,976 27,557
Legal fees 14,786 9,807
ICI dues 21,942 48,215
Registration fees 50,967 65,847
Fidelity bond expense 4,397 6,932
Directors' fees 8,159 9,900
Reports to shareowners 10,159 19,799
Franchise taxes 10,451 15,568
Custodian fees 11,872 23,607
Proxy and mailing expense 9,500 --
Security evaluation fees 1,647 3,391
Other -- 72
-------------- -----------
Total expenses 1,240,043 1,935,861
-------------- -----------
Net investment income 16,333,104 27,770,653
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on sales of
investments 1,297,913 52,537,716
Change in net unrealized appreciation 201,465,141 270,232,368
-------------- -----------
Net realized and unrealized gain
on investments 202,763,054 322,770,084
-------------- -----------
Net change in net assets resulting
from operations $ 219,096,158 350,540,737
============== ===========
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
STATE FARM GROWTH FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED NOVEMBER 30,
MAY 31, 1998 1997 1996
(UNAUDITED)
<S> <C> <C> <C>
From operations:
Net investment income $ 16,333,104 27,770,653 22,126,230
Net realized gain on sales of
investments 1,297,913 52,537,716 90,788,938
Change in net unrealized appreciation 201,465,141 270,232,368 111,162,700
---------------- -------------- --------------
Net change in net assets resulting
from operations 219,096,158 350,540,737 224,077,868
Undistributed net investment
income included in price of
shares issued and redeemed 554,786 1,240,326 718,903
Distributions to shareowners from:
Net investment income (per share $.31
in 1998, $.61 in 1997 and $.53 in
1996) (14,441,701) (25,616,492) (18,174,400)
Net realized gain (per share $1.13
in 1998, $2.31 in 1997 and $.12 in 1996) (52,131,683) (90,788,938) (6,015,663)
---------------- -------------- --------------
Total distributions to shareowners (66,573,384) (116,405,430) (24,190,063)
From Fund share transactions:
Proceeds from shares sold 196,911,792 252,636,657 177,516,771
Reinvestment of ordinary income dividends
and capital gain distributions 64,708,604 113,414,471 23,554,851
---------------- -------------- --------------
261,620,396 366,051,128 201,071,622
Less payments for shares redeemed 86,614,189 143,241,394 107,416,790
---------------- -------------- --------------
Net increase in net assets from Fund
share transactions 175,006,207 222,809,734 93,654,832
---------------- -------------- --------------
Total increase in net assets 328,083,767 458,185,367 294,261,540
Net assets:
Beginning of period 1,821,094,621 1,362,909,254 1,068,647,714
---------------- -------------- --------------
End of period (including undistributed
net investment income of $21,893,180
in 1998, $19,446,991 in 1997 and
$16,052,505 in 1996) $ 2,149,178,388 1,821,094,621 1,362,909,254
================ ============== ==============
</TABLE>
See accompanying notes to financial statements
10
<PAGE>
STATE FARM GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. OBJECTIVE
The investment objective of the State Farm Growth Fund, Inc. (the Fund) is
long-term growth of capital and income. The Fund seeks to achieve this objective
by investing most of its assets in income producing equity-type securities that
are believed collectively to have potential for long-term growth of capital and
income.
2. 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 at amortized cost which
approximates market value. 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 12, 1998, an ordinary income dividend of $.33 per share was
declared, payable June 15, 1998 (reinvestment date June 15, 1998) to shareowners
of record on June 12, 1998.
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.
USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
11
<PAGE>
STATE FARM GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
3. 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.
Under the terms of this agreement, the Fund incurred fees of $1,082,187,
for the six months ended May 31, 1998 and $1,705,166 for the year ended November
30, 1997. 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, 1998 or the year ended November 30, 1997,
except for directors' fees of $8,159 for the six months ended May 31, 1998 and
$9,900 for the year ended November 30, 1997 paid to the Fund's independent
directors.
4. INVESTMENT TRANSACTIONS
Investment transactions (exclusive of short-term instruments) are as
follows:
SIX MONTHS ENDED YEAR ENDED NOVEMBER 30,
MAY 31, 1998 1997 1996
(UNAUDITED)
Purchases $ 270,547,186 132,033,944 255,225,023
Proceeds from sales 17,680,301 89,316,149 172,902,528
============= ============ ============
5. 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, 1998 1997 1996
(UNAUDITED)
<S> <C> <C> <C>
Shares sold 4,757,284 7,264,071 5,839,467
Shares issued in reinvestment of ordinary
income dividends and capital gain
distributions 1,645,692 3,552,864 788,486
---------- ---------- ----------
6,402,976 10,816,935 6,627,953
Less shares redeemed 2,090,908 4,136,630 3,526,507
---------- ---------- ----------
Net increase in shares
outstanding 4,312,068 6,680,305 3,101,446
========== ========== ==========
</TABLE>
12
<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, 1998 1997 1996 1995 1994 1993
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period $ 39.48 34.55 29.40 22.63 22.21 23.05
Income from Investment
----------------------
Operations
----------
Net Investment Income .33 .62 .63 .50 .44 .45
Net Gains or Losses on
Securities (both realized
and unrealized) 4.23 7.23 5.17 6.97 .43 (.60)
----------------------------------------------------------------------
Total from Investment
Operations 4.56 7.85 5.80 7.47 .87 (.15)
Less Distributions
------------------
Net investment income (.31) (.61) (.53) (.52) (.45) (.45)
Capital gains (1.13) (2.31) (.12) (.18) -- (.24)
----------------------------------------------------------------------
Total Distributions (1.44) (2.92) (.65) (.70) (.45) (.69)
Net Asset Value, End of Period $ 42.60 39.48 34.55 29.40 22.63 22.21
======================================================================
Total Return 11.86% 24.80% 20.09% 33.67% 4.02% (.65%)
- ------------
Ratios/Supplemental Data
- ------------------------
Net assets, end of period
(millions) $ 2,149.2 1,821.1 1,362.9 1,068.6 771.7 725.1
Ratio of expenses to average
net assets .12%(a) .12% .13% .14%(b) .14% .14%
Ratio of net investment income
to average net assets 1.62%(a) 1.78% 1.88% 1.95% 2.00% 2.05%
Portfolio turnover rate 2%(a) 6% 16% 3% 3% 2%
Number of shares outstanding
at end of period
(millions) 50.4 46.1 39.5 36.4 34.1 32.7
</TABLE>
(a) Determined on an annualized basis.
(b) The ratio based on net custodian expenses would have been .13% in 1995.
13
<PAGE>
(This page intentionally left blank)
14
<PAGE>
VOTING RESULTS OF THE SPECIAL MEETING OF SHAREOWNERS
At a Special Meeting of Shareowners of the Fund held on March 13, 1998, the
following actions were taken:
A. The shareowners of the Fund elected the following individuals to serve on
the Board of Directors until the next meeting of shareowners called for
this purpose and until their successors shall be elected and qualified.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Name of Director Number of Votes For Number of Votes Withheld
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Edward B. Rust, Jr. 32,281,446 29,691
Roger S. Joslin 32,403,273 17,619
Albert H. Hoopes 32,109,554 32,890
Davis U Merwin 32,334,947 22,857
James A. Shirk 32,443,148 23,287
Thomas M. Mengler 32,196,552 25,054
- -----------------------------------------------------------------------------------------
</TABLE>
B. The shareowners of the Fund approved the proposed bylaw amendment that
would permit the board of directors to adopt further amendments without
shareowner approval:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Number of Votes For Number of Votes Against Number of Votes Withheld
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
28,812,613 2,975,133 1,035,700
- -------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
SEMI-ANNUAL
REPORT
May 31, 1998
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-30-1998
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 985512705
<INVESTMENTS-AT-VALUE> 2150962895
<RECEIVABLES> 5126021
<ASSETS-OTHER> 1694492
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2157783408
<PAYABLE-FOR-SECURITIES> 4935000
<SENIOR-LONG-TERM-DEBT> 0
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