Financial statements
Statement of assets and liabilities
Strategist World Technologies Fund
April 30, 1997
Assets
(Unaudited)
Investment in World Technologies Portfolio (Note 1) $ 389,026
Other receivables 7
Organizational costs (Note 1) 47
--------------
Total assets 389,080
--------------
Liabilities
Other accrued expenses 1,388
--------------
Total liabilities 1,388
--------------
Net assets applicable to outstanding capital stock $ 387,692
==============
Represented by
Capital stock-- authorized 3,000,000,000 shares per Fund of $.01
par value: outstanding 100,000 shares (Note 1) 1,000
Additional paid-in capital 499,000
Net operating loss (2,750)
Accumulated net realized loss (Note 1) (87,221)
Unrealized depreciation of investment and on translation
of assets and liabilities in foreign currencies (22,337)
==============
Total-- representing net assets applicable to outstanding
capital stock $ 387,692
==============
Net asset value per share of outstanding capital stock $ 3.88
See accompanying notes to financial statements.
<PAGE>
Financial statements
Statement of operations
Strategist World Technologies Fund
For the period from Nov. 13, 1996
(commencement of operations) to April 30, 1997
Investment income
(Unaudited)
Income:
Dividends $ 38
Interest 374
--------------
Total income 412
--------------
Expenses (Note 2):
Distribution fee 527
Transfer agency fee 9
Administrative services fees and expenses 127
Postage 92
Registration fees 742
Reports to shareholders 50
Audit fees 239
Other 855
--------------
Total feeder expenses 2,641
Expenses allocated from corresponding Portfolio 2,778
--------------
Total expenses 5,419
Less expenses reimbursed by AEFC (2,257)
--------------
Total net expenses 3,162
--------------
Investment loss -- net (2,750)
--------------
Realized and unrealized loss -- net
Net realized loss on security and foreign currency transactions (87,221)
Net change in unrealized appreciation or depreciation of investmemts
and on translation of assets and liabilities in foreign currencies (22,337)
--------------
Net loss on investments and foreign currencies (109,558)
==============
Net decrease in net assets resulting from operations $ (112,308)
==============
See accompanying notes to financial statements.
<PAGE>
Financial statements
Statement of changes in net assets
Strategist World Technologies Fund
For the period from Nov. 13, 1996
(commencement of operations) to April 30, 1997)
Operations
(Unaudited)
Investment loss-- net $ (2,750)
Net loss on investments and foreign currencies (87,221)
Net change in unrealized appreciation or depreciation of investments
and on translation of assets and liabilities in foreign currencies (22,337)
==============
Net decrease in net assets resulting from operations (112,308)
==============
Total decrease in net assets (112,308)
Net assets at beginning of period (Note 1) 500,000
==============
Net assets at end of period (including net operating loss
of $(2,750)) $ 387,692
==============
See accompanying notes to financial statements.
<PAGE>
Notes to financial statements
Strategist World Technologies Fund
(Unaudited as to April 30, 1997)
1. Summary of significant accounting policies
The Fund is a series of capital stock within Strategist World Fund, Inc. and is
registered under the Investment Company Act of 1940 (as amended) as a
diversified, open-end management investment company. On Nov. 12, 1996, American
Express Financial Corporation (AEFC) invested $500,000, which represented
100,000 shares for Strategist World Technologies Fund. Operations did not
formally commence until Nov. 13, 1996.
Investments in World Technologies Portfolio
The Fund invests all of its assets in World Technologies Portfolio (the
Portfolio), a series of World Trust, an open-end investment company that has the
same objectives as the Fund. World Technologies Portfolio invests in technology
common stocks.
The Fund records daily its share of the corresponding Portfolio's income,
expenses and realized and unrealized gains and losses. The financial statements
of the Portfolio are included elsewhere in this report and should be read in
conjunction with the Fund's financial statements. The Fund records its
investment in the Portfolio at value that is equal to the Fund's proportionate
ownership interest in the net assets of the Portfolio. As of April 30,1997, the
percentage of the Portfolio owned by World Technologies Fund was 12.48%.
Valuation of securities held by the Portfolio is discussed in Note 1 of the
Portfolio's "Notes to financial statements," which are included elsewhere in
this report.
Organizational costs
The Fund incurred organizational expenses in connection with the start-up and
initial registration of the Fund. These costs will be amortized over 60 months
on a straight-line basis beginning with the commencement of operations. If any
or all of the shares held by AEFC representing initial capital of the Fund are
redeemed during the amortization period, the redemption proceeds will be reduced
by the pro rata portion of the unamortized organizational cost balance.
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 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 increase and decrease in net assets from operations
during the period.
Actual results could differ from those estimates.
Federal taxes
Since the Fund's policy is to comply with all sections of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to the shareholders, no provision for income or excise taxes is
required.
Net investment income (loss) and net realized gains (losses) allocated from the
Portfolio may differ for financial statement and tax purposes primarily because
of the deferral of losses on certain futures contracts, the recognition of
certain foreign currency gains (losses) as ordinary income (loss) for tax
purposes, and losses deferred due to "wash sale" transactions. The character of
distributions made during the year from net investment income or net realized
gains may differ from their ultimate characterization for federal income tax
purposes. Also, due to the timing of dividend distributions, the fiscal year in
which amounts are distributed may differ from the year that the income or
realized gains (losses) were recorded by the Fund.
Dividends to shareholders
An annual dividend declared and paid at the end of the calendar year from net
investment income, when available, is reinvested in additional shares of the
Fund at the net asset value or payable in cash. Capital gains, when available,
are distributed along with the income dividend.
Other
At April 30, 1997, AEFC owned 100,000 shares for World Technologies Fund.
2. Expenses and sales charges
In addition to the expenses allocated from the Portfolio, the Fund accrues its
own expenses as follows:
The Fund entered into agreements with AEFC for providing administrative services
and transfer agent services.
Under its Administrative Services Agreement, the Fund pays AEFC a fee for
administration and accounting services at a percentage of the Fund's average
daily net assets in reducing percentages from 0.06% to 0.035% annually. Under
this agreement, the Fund also pays taxes, audit and certain legal fees,
registration fees for shares, office expenses, consultants' fees, compensation
of board members, corporate filing fees, organizational expenses, and any other
expenses properly payable by the Fund approved by the board.
Under a separate Transfer Agency Agreement, AEFC maintains shareholder accounts
and records. The Fund pays a fee per shareholder account of $20.
Under a Plan and Agreement of Distribution, the Fund pays American Express
Service Corporation (the Distributor) a distribution fee at an annual rate of
0.25% of the Fund's average daily net assets for distribution related services.
AEFC and the Distributor have agreed to waive certain fees and to absorb certain
other of Fund expenses until Oct. 31, 1997. Under this agreement, the Fund's
total expenses will not exceed 1.50% of the Fund's average daily net assets.
3. Financial highlights
The table below shows certain important financial information for evaluating the
Fund's results.
Period ended April 30,
Per share income and capital changesa
1997b
Net asset value, $5.00
beginning of period
Income from investment
operations:
Net investment loss (.03)
Net loss (both realized (1.09)
and unrealized)
Total from investment (1.12)
operations
Net asset value, $3.88
end of period
Ratios/supplemental data:
1997b
Net assets, end of period $388
(in thousands)
Ratio of expenses to 1.50% c
average daily net assets e
Ratio of net loss (1.30)%
to average daily net assets c
Portfolio turnover rate 75%
(excluding short-term
securities
for the underlying Portfolio)
Total returnd (22.4)%
Average brokerage commission $.0430
rate for the underlying
Portfoliof
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Period from Nov. 13, 1996 (inception date) to April 30, 1997 (Unaudited).
c Adjusted to an annual basis.
d Total return does not reflect payment of a sales charge.
e The Advisor and Distributor voluntarily limited total operating expenses to
1.50% of average daily net assets. Without this agreement, the ratio of expenses
to average daily net assets would have been 2.57%.
f The Fund is required to disclose an average brokerage commission rate per
share for security trades on which commissions are charged. The comparability of
this information may be affected by the fact that commission rates per share
vary significantly among foreign countries.
<PAGE>
Financial statements
<TABLE>
<CAPTION>
Statement of assets and liabilities
World Technologies Portfolio
April 30, 1997
Assets
<S> <C>
(Unaudited)
Investments in securities, at value (Note 1)
(identified cost $3,181,203) $ 3,002,053
Cash in bank on demand deposit 21,740
Dividends receivable 23
Receivable for investment securities sold 99,897
---------------
Total assets 3,123,713
---------------
Liabilities
Accrued investment management services fee 57
Other accrued expenses 6,948
---------------
Total liabilities 7,005
---------------
Net assets $ 3,116,708
===============
See accompanying notes to financial statements.
<PAGE>
Financial statements
Statement of operations
World Technologies Portfolio
For the period from Nov. 13, 1996
(commencement of operations) to April 30, 1997
Investment income
(Unaudited)
Income:
Dividends $ 302
Interest 2,996
---------------
Total income 3,298
---------------
Expenses (Note 2):
Investment management services fee 12,172
Custodian fees 7,331
Audit fees 1,428
Administrative services fees and expenses 1,338
Other 182
---------------
Total expenses 22,451
Earnings credits on cash balances (Note 2) (186)
---------------
Total net expenses 22,265
---------------
Investment loss -- net (18,967)
---------------
Realized and unrealized loss -- net
Net realized loss on security transactions (Note 3) (699,007)
Net change in unrealized appreciation or depreciation of investments (179,150)
---------------
Net loss on investments (878,157)
===============
Net decrease in net assets resulting from operations $ (897,124)
===============
See accompanying notes to financial statements.
<PAGE>
Financial statements
Statement of changes in net assets
World Technologies Portfolio
For the period from Nov. 13, 1996
(commencement of operations) to April 30, 1997
Operations
(Unaudited)
Investment loss -- net $ (18,967)
Net realized loss on investments (699,007)
Net change in unrealized appreciation or depreciation of investments (179,150)
--------------
Net decrease in net assets resulting from operations (897,124)
Net contributions 13,832
--------------
Total decrease in net assets (883,292)
Net assets at beginning of period (Note 1) 4,000,000
==============
Net assets at end of period $ 3,116,708
==============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to financial statements
World Technologies Portfolio
(Unaudited as to April 30, 1997)
1. Summary of significant accounting policies
World Technologies Portfolio (the Portfolio) is a series of World Trust (the
Trust) and is registered under the Investment Company Act of 1940 (as amended)
as a diversified, open-end management investment company. World Technologies
Portfolio invests in common stocks of companies within the information
technology sector. The Declaration of Trust permits the Trustees to issue
non-transferable interests in the Portfolio. On Nov. 12, 1996, American Express
Financial Corporation (AEFC) contributed $4,000,000 to the Portfolio. Operations
commenced on Nov. 13, 1996.
Significant accounting polices followed by the Portfolio are summarized below:
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 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 increase and decrease in net assets from operations
during the period.
Actual results could differ from those estimates.
Valuation of securities
All securities are valued at the close of each business day. Securities traded
on national securities exchanges or included in national market systems are
valued at the last quoted sales price; securities for which market quotations
are not readily available are valued at fair value according to methods selected
in good faith by the board. Determination of fair value involves, among other
things, reference to market indexes, matrixes and data from independent brokers.
Short-term securities maturing in more than 60 days from the valuation date are
valued at the market price or approximate market value based on current interest
rates; those maturing in 60 days or less are valued at amortized cost.
Option transactions
In order to produce incremental earnings, protect gains and facilitate buying
and selling of securities for investment purposes, the Portfolio may buy or
write options traded on any U.S. or foreign exchange or in the over-the-counter
market where the completion of the obligation is dependent upon the credit
standing of the other party. The Portfolio also may buy or sell put and call
options and write covered call options on portfolio securities and may write
cash-secured put options. The risk in writing a call option is that the
Portfolio gives up the opportunity of profit if the market price of the security
increases. The risk in writing a put option is that the Portfolio may incur a
loss if the market price of the security decreases and the option is exercised.
The risk in buying an option is that the Portfolio pays a premium whether or not
the option is exercised. The Portfolio also has the additional risk of not being
able to enter into a closing transaction if a liquid secondary market does not
exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. The Portfolio
will realize a gain or loss upon expiration or closing of the option
transaction. When an option is exercised, the proceeds on sales for a written
call option, the purchase cost for a written put option or the cost of a
security for a purchased put or call option is adjusted by the amount of premium
received or paid.
Futures transactions
In order to gain exposure to or protect itself from changes in the market, the
Portfolio may buy and sell financial futures contracts traded on any U.S. or
foreign exchange. The Portfolio also may buy or write put and call options on
these futures contracts. Risks of entering into futures contracts and related
options include the possibility that there may be an illiquid market and that a
change in the value of the contract or option may not correlate with changes in
the value of the underlying securities.
Upon entering into a futures contract, the Portfolio is required to deposit
either cash or securities in an amount (initial margin) equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Portfolio each day. The variation margin payments are
equal to the daily changes in the contract value and are recorded as unrealized
gains and losses. The Portfolio recognizes a realized gain or loss when the
contract is closed or expires.
Foreign currency translations
and foreign currency contracts
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars at the closing rate of exchange. Foreign
currency amounts related to the purchase or sale of securities and income and
expenses are translated at the exchange rate on the transaction date. The effect
of changes in foreign exchange rates on realized and unrealized security gains
or losses is reflected as a component of such gains or losses. In the statement
of operations, net realized gains or losses from foreign currency transactions
may arise from sales of foreign currency, closed forward contracts, exchange
gains or losses realized between the trade date and settlement dates on
securities transactions, and other translation gains or losses on dividends,
interest income and foreign withholding taxes.
The Portfolio may enter into forward foreign currency exchange contracts for
operational purposes and to protect against adverse exchange rate fluctuation.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Portfolio and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates from an
independent pricing service. The Portfolio is subject to the credit risk that
the other party will not complete the obligations of the contract.
Federal taxes
For federal income tax purposes the Portfolio qualifies as a partnership and
each investor in the Portfolio is treated as the owner of its proportionate
share of the net assets, income, expenses and realized and unrealized gains and
losses of the Portfolio. Accordingly, as a "pass-through" entity, the Portfolio
does not pay any income dividends or capital gain distributions.
Other
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date and interest income,
including level-yield amortization of premium and discount, is accrued daily.
2. Fees and expenses
The Trust, on behalf of the Portfolio, has entered into an Investment Management
Services Agreement with AEFC for managing its portfolio. Under this agreement,
AEFC determines which securities will be purchased, held or sold. The management
fee is a percentage of the Portfolio's average daily net assets in reducing
percentages from 0.72% to 0.595% annually.
Under the agreement, the Trust also pays taxes, brokerage commissions and
nonadvisory expenses, which include custodian fees to be paid to an affiliate of
AEFC, audit and certain legal fees, fidelity bond premiums, registration fees
for units, office expenses, consultants' fees, compensation of trustees,
corporate filing fees, expenses incurred in connection with lending securities
of the Portfolio, and any other expenses properly payable by the Trust or
Portfolio, approved by the board.
During the period ended April 30, 1997, the Portfolio's custodian fees were
reduced by $186 as a result of earnings credits from overnight cash balances.
Pursuant to a Placement Agency Agreement, American Express Financial Advisors
Inc. acts as placement agent of the units of the Trust.
3. Securities transactions
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $6,550,299 and $2,670,089, respectively, for the period
ended April 30, 1997. For the same period, the portfolio turnover rate was 75%.
Realized gains and losses are determined on an identified cost basis.
<PAGE>
Investments in securities
World Technologies Portfolio (Percentages represent value of
April 30, 1997 (Unaudited) investments compared to net assets)
Common stocks (96.3%)
Issuer Shares Value (a)
Communications equipment & services (11.9%)
ADC Telecommunications 1,500 (b) $ 39,187
Andrew 1,200 (b) 29,700
Ascend Communications 3,700 (b) 169,275
MasTec 750 (b) 21,750
PairGain Technologies 2,700 (b) 70,200
Tellabs 1,000 (b) 39,875
Total 369,987
Computers & office equipment (53.0%)
Acxiom 1,400 (b) 18,375
Adaptec 2,600 (b) 96,200
American Business Information 2,200 (b) 41,800
Arbor Software 1,000 (b) 24,875
Cadence Design Systems 1,100 (b) 35,200
Cambridge Technology Partners 1,700 (b) 45,263
Cisco Systems 1,300 (b) 67,275
Compaq Computer 1,000 (b) 85,375
Computer Associates Intl 1,000 52,000
Computer Sciences 1,100 (b) 68,750
First Data 3,300 113,850
HNC Software 2,500 (b) 66,250
i2 Technologies 700 (b) 26,600
Ikon Office Solutions 2,400 64,500
Infinity Financial Technology 4,600 (b) 58,075
Ingram Micro 1,800 (b) 40,950
Metzler Group 900 (b) 22,950
Oracle 2,000 (b) 79,500
Parametric Technology 700 (b) 31,675
PeopleSoft 1,900 (b) 78,850
Pure Atria 4,300 (b) 41,925
Read-Rite 1,000 (b) 25,875
Renaissance Solutions 2,400 (b) 52,200
Seagate Technology 600 (b) 27,525
Sterling Commerce 4,200 (b) 108,675
Sterling Software 2,400 (b) 73,200
Technology Solutions 700 (b) 18,463
Veritas Software 3,100 (b) 104,237
VIASOFT 1,000 (b) 42,500
Whittman-Hart 2,000 (b) 38,000
Total 1,650,913
Electronics (8.2%)
Applied Materials 900 (b) 49,388
Intel 450 68,906
KLA Instruments 1,000 (b) 44,500
Maxim Intergrated Products 1,750 (b) 92,531
Total 255,325
Health care (3.2%)
Biogen 1,600 (b) 51,200
Boston Scientific 1,000 (b) 48,250
Total 99,450
Health care services (7.3%)
FPA Medical Management 4,500 (b) 73,125
HBO & Co 2,900 155,150
Total 228,275
Media (4.6%)
May & Speh 4,400 (b) 32,450
META Group 2,000 (b) 34,000
Universal Outdoor Holdings 1,500 (b) 40,875
Univision Communications 1,100 (b) 37,400
Total 144,725
Multi-industry conglomerates (1.2%)
Strayer Education 1,000 25,750
Utilities -- telephone (0.8%)
WorldCom 1,600 (b) 38,400
Miscellaneous (1.2%)
Abacus Direct 1,500 (b) 37,125
Foreign (4.9%)(c)
ASM Lithography Holding 600 (b) 47,700
BioChem Pharma 1,400 (b) 25,178
New Bridge Networks 1,200 (b) 38,100
Saville Systems ADR 1,000 (b) 41,125
Total 152,103
Total investment in securities
(Cost: $3,181,203)(d) $ 3,002,053
See accompanying notes to investments in securities.
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars.
(d) At April 30, 1997, the cost of securities for federal income tax purposes
was approximately $3,181,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $ 120,000
Unrealized depreciation (299,000)
- ------------------------------------------------------------------------
Net unrealized depreciation $ (179,000)
- ------------------------------------------------------------------------
