-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, WeCcEzwINn6Y9k3zbrL6a3kHI4e1gzlSJSShMW6awhTnS+3stpAyT9/wjy3Loc+r t39jCyJ5iPUphHaq2WPjkQ== 0000035330-94-000001.txt : 19940302 0000035330-94-000001.hdr.sgml : 19940302 ACCESSION NUMBER: 0000035330-94-000001 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940301 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIDELITY CONTRAFUND CENTRAL INDEX KEY: 0000024238 STANDARD INDUSTRIAL CLASSIFICATION: 0000 IRS NUMBER: 046056833 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: 40 SEC FILE NUMBER: 811-01400 FILM NUMBER: 94513834 BUSINESS ADDRESS: STREET 1: FIDELITY INVESTMENTS COMPANY STREET 2: 82 DEVONSHIRE STREET MAIL ZONE ZZ2 CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: (617)439-1220 MAIL ADDRESS: STREET 1: 82 DEVONSHIRE STREET STREET 2: MAILZONE ZZ2 CITY: BOSTON STATE: MA ZIP: 02109 FORMER COMPANY: FORMER CONFORMED NAME: FIDELITY CONTRAFUND INC DATE OF NAME CHANGE: 19850618 FORMER COMPANY: FORMER CONFORMED NAME: CONTRAFUND INC DATE OF NAME CHANGE: 19810203 N-30B-2 1 FIDELITY (Registered trademark) CONTRAFUND ANNUAL REPORT DECEMBER 31, 1993 CONTENTS PRESIDENT'S MESSAGE 3 Ned Johnson on minimizing taxes. PERFORMANCE 4 How the fund has done over time. FUND TALK 6 The manager's review of fund performance, strategy, and outlook. INVESTMENT CHANGES 9 A summary of major shifts in the fund's investments over the last six months. INVESTMENTS 10 A complete list of the fund's investments with their market value. FINANCIAL STATEMENTS 35 Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. NOTES 39 Footnotes to the financial statements. REPORT OF INDEPENDENT 44 The auditor's opinion. ACCOUNTANTS THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED BY THE FDIC. PRESIDENT'S MESSAGE DEAR SHAREHOLDER: Once the new year begins, many people start reviewing their finances and calculating their tax bills. No one wants to pay more taxes than they have to. But a recent survey of 500 U.S. households, conducted by Fidelity and Yankelovich Partners, showed that few people have taken steps to reduce their taxes under the new legislation. Many were not even aware that the new tax laws were retroactive to January 1993. Whether or not you're someone whose tax bill will increase as a result of these changes, it may make sense to consider ways to keep more of what you earn. First, if your employer offers a 401(k) or 403(b) retirement savings plan, consider enrolling. These plans are set up so you can make regular contributions - before taxes - to a retirement savings plan. They offer a disciplined savings strategy, the ability to accumulate earnings tax-deferred, and immediate tax savings. For example, if you earn $40,000 a year and contribute 7% of your salary to your 401(k) plan, your annual contribution is $2,800. That reduces your taxable income to $37,200 and, if you're in the 28% tax bracket, saves you $784 in federal taxes. In addition, you pay no taxes on any earnings until withdrawal. It may be a good idea to contact your benefits office as soon as possible to find out when you can enroll or increase your contribution. Most employers allow employees to make changes only a few times each year. Second, consider an IRA. Many people are eligible to make an IRA contribution (up to $2,000) that is fully tax deductible. That includes people who are not covered by company pension plans, or those within certain income brackets. Even if you don't qualify for a fully deductible contribution, any IRA earnings will grow tax-deferred until withdrawal. Third, consider adding to your tax-free investments, either municipal bonds or municipal bond funds. Often these can provide higher after-tax yields than comparable taxable investments. For example, if you're in the new 36% federal income tax bracket and invest $10,000 in a taxable investment yielding 7%, you'll pay $252 in federal taxes and receive $448 in income. That same $10,000 invested in a tax-free bond fund yielding 5.5% would allow you to keep $550 in income. These are three investment strategies that could help lower your tax bill in 1994. If you're interested in learning more, please call us at 1-800-544-8888 or visit a Fidelity Investor Center. Wishing you a prosperous new year, Edward C. Johnson 3d, Chairman PERFORMANCE: THE BOTTOM LINE There are several ways to evaluate a fund's historical performance. You can look at the total percentage of change in value, the average annual percentage change, or the growth of a hypothetical $10,000 investment. Each performance figure includes changes in a fund's share price, plus reinvestment of any dividends (or income) and capital gains (the profits the fund earns when it sells stocks that have grown in value). CUMULATIVE TOTAL RETURNS PERIODS ENDED DECEMBER 31, 1993 PAST 1 PAST 5 PAST 10 YEAR YEARS YEARS Contrafund 21.43% 224.37% 408.62% Contrafund (incl. 3% sales charge) 17.78% 214.64% 393.36% S&P 500(Registered trademark) 10.08% 97.26% 302.35% Average Growth Fund 10.61% 99.76% 234.70% CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms over a set period - in this case, one, five, or 10 years. For example, if you had invested $1,000 in a fund that had a 5% return over the past year, you would have $1,050. You can compare these figures to the performance of the Standard & Poor's 500 Composite Stock Price Index - a common proxy for the U.S. stock market. You can also compare them to the average growth fund, which reflects the performance of over 488 growth funds tracked by Lipper Analytical Services. Both benchmarks include reinvested dividends and capital gains, if any. AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDED DECEMBER 31, 1993 PAST 1 PAST 5 PAST 10 YEAR YEARS YEARS Contrafund 21.43% 26.53% 17.66% Contrafund (incl. 3% sales charge) 17.78% 25.77% 17.30% S&P 500(Registered trademark) 10.08% 14.55% 14.94% Average Growth Fund 10.61% 14.51% 12.38% AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return and show you what would have happened if the fund had performed at a constant rate each year. $10,000 OVER 10 YEARS Contrafund (022) S&P 500 12/31/83 9700.01 10000.00 01/31/84 9315.36 9944.00 02/29/84 8511.09 9593.97 03/31/84 8484.58 9759.95 04/30/84 8396.20 9852.67 05/31/84 7998.48 9306.83 06/30/84 8122.21 9508.79 07/31/84 7689.15 9390.88 08/31/84 8758.56 10428.57 09/30/84 8758.56 10430.66 10/31/84 8714.37 10471.34 11/30/84 8652.50 10354.06 12/31/84 8897.59 10627.40 01/31/85 9744.54 11455.28 02/28/85 9808.29 11596.18 03/31/85 9890.26 11604.30 04/30/85 9780.97 11593.85 05/31/85 9972.22 12263.98 06/30/85 10035.97 12456.52 07/31/85 10145.25 12437.84 08/31/85 10336.50 12332.11 09/30/85 9817.40 11946.12 10/31/85 10345.61 12498.03 11/30/85 10892.03 13355.39 12/31/85 11305.65 14001.80 01/31/86 11407.92 14080.21 02/28/86 12529.40 15133.40 03/31/86 13088.30 15977.85 04/30/86 12844.41 15797.30 05/31/86 13169.59 16637.72 06/30/86 13108.62 16918.89 07/31/86 12143.26 15973.13 08/31/86 12935.87 17158.33 09/30/86 12163.58 15739.34 10/31/86 12976.52 16647.50 11/30/86 12976.52 17052.03 12/31/86 12811.28 16617.21 01/31/87 14660.92 18855.54 02/28/87 15557.31 19600.34 03/31/87 15815.23 20166.79 04/30/87 15850.40 19987.30 05/31/87 15991.09 20161.19 06/30/87 16577.27 21179.33 07/31/87 17386.20 22253.12 08/31/87 18019.28 23083.17 09/30/87 17655.85 22577.65 10/31/87 12556.05 17714.42 11/30/87 11864.35 16254.75 12/31/87 12567.77 17491.74 01/31/88 13376.71 18228.14 02/29/88 13986.34 19077.57 03/31/88 14009.79 18488.08 04/30/88 14291.15 18693.29 05/31/88 14091.85 18855.92 06/30/88 14771.82 19721.41 07/31/88 14877.34 19646.47 08/31/88 14549.07 18978.49 09/30/88 15146.98 19786.97 10/31/88 15545.59 20337.05 11/30/88 15428.35 20046.23 12/31/88 15209.80 20397.04 01/31/89 16219.78 21890.10 02/28/89 16123.59 21345.04 03/31/89 16977.27 21842.38 04/30/89 18071.41 22976.00 05/31/89 19009.25 23906.53 06/30/89 18889.01 23770.26 07/31/89 20620.41 25916.71 08/31/89 21209.56 26424.68 09/30/89 21618.36 26316.34 10/31/89 20969.09 25705.80 11/30/89 21450.03 26230.20 12/31/89 21773.12 26859.73 01/31/90 20618.29 25057.44 02/28/90 21046.49 25380.68 03/31/90 21500.64 26053.27 04/30/90 21280.05 25401.94 05/31/90 23291.27 27878.62 06/30/90 23589.71 27689.05 07/31/90 23148.54 27600.44 08/31/90 21344.93 25105.36 09/30/90 20449.61 23882.73 10/31/90 20553.41 23780.04 11/30/90 21773.12 25316.23 12/31/90 22630.13 26022.55 01/31/91 24834.44 27157.13 02/28/91 26712.68 29098.87 03/31/91 28277.87 29803.06 04/30/91 28434.39 29874.59 05/31/91 30247.41 31165.17 06/30/91 28551.78 29737.81 07/31/91 30573.50 31123.59 08/31/91 32112.60 31861.22 09/30/91 32203.91 31329.13 10/31/91 33129.98 31748.94 11/30/91 31382.18 30469.46 12/31/91 35058.25 33955.17 01/31/92 36057.96 33323.60 02/29/92 37228.09 33756.81 03/31/92 36217.75 33098.55 04/30/92 36610.66 34071.65 05/31/92 37003.57 34238.60 06/30/92 36105.49 33728.44 07/31/92 37017.60 35107.94 08/31/92 36330.01 34388.23 09/30/92 36947.44 34794.01 10/31/92 37775.36 34915.79 11/30/92 39599.57 36106.41 12/31/92 40630.38 36550.52 01/31/93 41917.18 36857.55 02/28/93 42193.72 37358.81 03/31/93 44210.06 38147.08 04/30/93 44508.77 37223.92 05/31/93 46271.20 38221.52 06/30/93 46286.14 38332.36 07/31/93 46793.96 38179.04 08/31/93 49064.20 39626.02 09/30/93 49168.75 39320.90 10/31/93 49601.89 40134.84 11/30/93 47734.91 39753.56 12/31/93 49335.92 40234.58 $10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity Contrafund on December 31, 1983, and paid a 3% sales charge. As the chart shows, by December 31, 1993, the value of your investment would have grown to $49,336 - a 393.36% increase on your initial investment. For comparison, look at how the S&P 500 did over the same period. With dividends reinvested, the same $10,000 investment would have grown to $40,235 - a 302.35% increase. UNDERSTANDING PERFORMANCE How a fund did yesterday is no guarantee of how it will do tomorrow. The stock market, for example, has a history of growth in the long run and volatility in the short run. In turn, the share price and return of a fund that invests in stocks will vary. That means if you sell your shares during a market downturn, you might lose money. But if you can ride out the market's ups and downs, you may have a gain. (checkmark) DISTRIBUTIONS The Board of Trustees of Fidelity <FUND> voted to pay on February 7, 1994, to shareholders of record at the opening of business on February 4, 1994, a distribution of $___ derived from capital gains realized from sales of portfolio securities. INVESTMENT CHANGES TOP TEN STOCKS AS OF DECEMBER 31, 1993 % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE STOCKS 6 MONTHS AGO International Business Machines Corp. 1.8 - Citicorp 1.0 .5 British Petroleum PLC ADR 1.0 .4 United Technologies Corp. 1.0 - Philip Morris Companies, Inc. .9 - Anadarko Petroleum Corp. .9 .3 Lotus Development Corp. .9 .5 Columbia Healthcare Corp. .8 - Ford Motor Co. .8 .3 Caterpillar, Inc. .8 .5 TOP FIVE INDUSTRIES AS OF DECEMBER 31, 1993 % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE INDUSTRIES 6 MONTHS AGO Technology 11.1 16.2 Energy 10.0 16.3 Media & Leisure 8.4 6.8 Health 7.2 1.8 Basic Industries 5.6 2.4 ASSET ALLOCATION AS OF DECEMBER 31, 1993 * AS OF JUNE 30, 1993 * Row: 1, Col: 1, Value: 19.1 Row: 1, Col: 2, Value: 1.5 Row: 1, Col: 3, Value: 40.1 Row: 1, Col: 4, Value: 40.0 Row: 1, Col: 1, Value: 15.9 Row: 1, Col: 2, Value: 1.5 Row: 1, Col: 3, Value: 40.0 Row: 1, Col: 4, Value: 43.3 Stocks 80.1% Bonds 0.8% Short-term and other investments 19.1% Stocks 83.3% Bonds 0.8% Short-term and other investments 15.9% * FOREIGN INVESTMENTS 18.2% * FOREIGN INVESTMENTS 13.5% INVESTMENTS DECEMBER 31, 1993 Showing Percentage of Total Value of Investment in Securities COMMON STOCKS - 79.3% SHARES VALUE (NOTE 1) (000S) AEROSPACE & DEFENSE - 1.4% AEROSPACE & DEFENSE - 0.5% Alliant Techsystems, Inc. (a) 172,800 $ 5,119 01880410 Greenwich Air Services, Inc. (a) 1,000 8 39678110 Martin Marietta Corp. 115,000 5,118 57290010 McDonnell Douglas Corp. 18,500 1,980 58016910 Precision Castparts Corp. 32,300 937 74018910 Sturm Ruger & Co., Inc. 638,900 15,892 86415910 Thiokol Corp. 102,500 2,716 88410310 31,770 DEFENSE ELECTRONICS - 0.9% ESCO Electronics Corp. (trust receipt) (a)(e) 604,600 7,784 26903020 E-Systems, Inc. 12,600 547 26915730 Flir Systems, Inc. (a) 154,100 1,503 30244510 Loral Corp. 1,075,000 40,581 54385910 Tech-Sym Corp. (a) 242,600 5,186 87830810 Tracor, Inc. (a) 10,000 90 89234920 Trimble Navigation Ltd. (a) 12,200 108 89623910 55,799 TOTAL AEROSPACE & DEFENSE 87,569 BASIC INDUSTRIES - 5.6% CHEMICALS & PLASTICS - 1.8% Akzo NV Ord. 137,700 13,303 01019910 Cabot Corp. 206,000 11,098 12705510 Cambrex Corp. 370,200 7,404 13201110 Foamex International, Inc. (a) 355,000 6,035 34412310 GEON 223,300 5,275 37246W10 Georgia Gulf Corp. (a) 182,400 4,081 37320020 Hanna (M.A.) Co. 184,400 6,016 41052210 IMC Fertilizer Group, Inc. 30,585 1,388 44966910 Monsanto Co. 285,200 20,927 61166210 Sealed Air Corp. (a) 20,000 633 81211510 Terra Industries, Inc. (a) 458,800 3,498 88091510 Union Carbide Corp. 1,285,000 28,752 90558110 Vigoro Corp. 200,600 6,068 92675410 114,478 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) BASIC INDUSTRIES - CONTINUED IRON & STEEL - 0.9% Allegheny Ludlum Industries, Inc. 210,900 $ 5,035 01690010 Geneva Steel Class A (a) 97,100 1,651 37225210 Inland Steel Industries, Inc. (a) 255,400 8,460 45747210 Iscor Ltd. (a) 604,100 346 46499C22 LTV Corp. 492,100 7,935 50192110 Mueller Industries, Inc. (a) 350,800 12,453 62475610 Nucor Corp. 310,000 16,430 67034610 52,310 METALS & MINING - 0.4% Alcan Aluminium Ltd. 220,000 4,619 01371610 Inco Ltd. 100,000 2,686 45325840 Noranda, Inc. 235,000 4,600 65542210 Phelps Dodge Corp. 50,000 2,437 71726510 Wolverine Tube, Inc. (a) 381,000 7,525 97809310 21,867 PAPER & FOREST PRODUCTS - 2.5% Abitibi-Price Inc. 100,000 1,182 00368010 Domain Industries Ltd, Class B (non-vtg.) Series 2 300,000 4,227 25703930 Domtar Inc. (a) 1,311,100 8,307 25756110 Fletcher Challenge Canada Ltd. Class A 232,307 3,625 33932D10 Georgia-Pacific Corp. 250,000 17,187 37329810 IP Timberlands, Ltd. Class A 8,600 229 44984210 International Forest Products Class A (a) 600,400 9,766 45953E10 International Paper Co. 300,000 20,325 46014610 Longview Fibre Co. 454,300 10,279 54321310 Louisiana-Pacific Corp. 301,900 12,453 54634710 Metsa Serla B 246,000 9,889 59299992 Noranda Forest, Inc. 160,000 1,453 65542L10 Plum Creek Timber Co. LP (depositary unit) 83,900 2,192 72923710 Pope & Talbot, Inc. 97,300 2,797 73282710 Repola OY 723,200 11,242 75999A92 Riverside Forest Products 90,000 1,958 76890410 St. Joe Paper Co. 4,600 233 79016110 Scott Paper Co. 45,000 1,851 80987710 Slocan Forest Products Ltd. 353,800 8,934 83158C10 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) BASIC INDUSTRIES - CONTINUED PAPER & FOREST PRODUCTS - CONTINUED Temple-Inland, Inc. 327,500 $ 16,498 87986810 Timberwest Forest Ltd. (a)(f) 200,000 2,572 88690820 Union Camp Corp. 206,000 9,811 90553010 Willamette Industries, Inc. 26,700 1,322 96913310 158,332 TOTAL BASIC INDUSTRIES 346,987 CONGLOMERATES - 2.0% CONGLOMERATES - 2.0% Alexander & Baldwin, Inc. 10,000 268 01448210 Allied-Signal, Inc. 108,100 8,540 01951210 Canadian Pacific Ltd. Ord. 1,074,000 17,571 13644030 ITT Corp. 254,000 23,177 45067910 Litton Industries, Inc. (a) 100,000 6,438 53802110 Textron, Inc. 110,000 6,408 88320310 United Technologies Corp. 1,000,000 62,000 91301710 124,402 CONSTRUCTION & REAL ESTATE - 3.0% BUILDING MATERIALS - 0.9% Armstrong World Industries, Inc. 672,300 35,800 04247610 Lafarge Corp. 323,800 7,407 50586210 Lilly Industrial Coatings, Inc. Class A 175,400 4,210 53249110 Medusa Corp. 16,900 547 58507230 Southdown, Inc. (a) 99,600 2,440 84129710 Tecumseh Products Co. Class A 183,500 8,487 87889520 USG Corp. (a) 10,000 292 90329340 59,183 CONSTRUCTION - 1.5% Butler Manufacturing Co. (Del) (a) 15,300 415 12365510 Centex Corp. 145,100 6,094 15231210 Clayton Homes, Inc. (a) 165,875 4,022 18419010 Continental Homes Holding Corp. (e) 400,600 9,214 21148C10 Kaufman & Broad Home Corp. (a) 260,000 6,175 48616810 Oakwood Homes Corp. 395,100 10,668 67409810 Pulte Corp. 173,800 6,300 74586710 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) CONSTRUCTION & REAL ESTATE - CONTINUED CONSTRUCTION - CONTINUED Redman Industries (a) (e) 376,700 $ 7,628 75764210 Schuler Homes, Inc. (a) 856,100 23,971 80818810 Southern Energy Homes, Inc. (a) 166,000 3,133 84281410 Standard Pacific Corp. 434,300 4,832 85375C10 Toll Brothers, Inc. (a) 463,600 7,939 88947810 90,391 ENGINEERING - 0.2% CBI Industries, Inc. 215,300 6,540 12480010 Corrpro Companies, Inc. (a) 12,000 232 22031710 Insituform Mid-America, Inc. Class A 160,000 2,240 45766H10 Rust International, Inc. (a) 10,000 228 78307510 SNC Group, Inc. Class A 95,000 1,348 78460T10 10,588 REAL ESTATE - 0.0% Hovnanian Enterprises, Inc. Class A (a) 133,900 2,025 44248720 REAL ESTATE INVESTMENT TRUSTS - 0.4% Equity Residential Property Trust, shares beneficial interest 85,000 2,709 29476L10 Manufactured Home Community 122,800 5,281 56468210 McArthur/Glen Realty Corp. (a) 85,800 2,091 57918810 Nationwide Health Properties, Inc 22,900 813 63862010 Simon Properties Group, Inc. (a) 539,000 12,195 82880510 23,089 TOTAL CONSTRUCTION & REAL ESTATE 185,276 DURABLES - 5.3% AUTOS, TIRES, & ACCESSORIES - 3.2% Chrysler Corp. 650,100 34,618 17119610 Custom Chrome, Inc. (a) 116,900 2,601 23190510 Echlin, Inc. 80,000 2,660 27874910 Federal-Mogul Corp. 380,000 11,020 31354910 Ford Motor Co. 795,200 51,290 34537010 General Motors Corp. 685,000 37,589 37044210 Goodyear Tire & Rubber Co. 900,000 41,175 38255010 Jason, Inc. (a) 95,000 1,259 47117110 Smith (A.O.) Corp. Class B 96,900 3,464 83186520 Spartan Motors, Inc. 88,050 1,497 84681910 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) DURABLES - CONTINUED AUTOS, TIRES, & ACCESSORIES - CONTINUED Titan Wheel International, Inc. (a) 76,800 $ 1,958 88832810 Wabash National Corp. 266,600 9,065 92956610 198,196 CONSUMER ELECTRONICS - 0.3% Aktiebolaget Electrolux 346,000 11,778 01019810 Fedders USA Inc. (a) 223,600 1,425 31313510 Harman International Industries, Inc. (a) 163,000 4,686 41308610 Whirlpool Corp. 71,500 4,755 96332010 22,644 HOME FURNISHINGS - 0.4% Ethan Allen Interiors, Inc. (a) 119,900 3,747 29760210 Haverty Furniture Companies, Inc.(e) 530,300 9,081 41959610 Haverty Furniture Companies, Inc. Class A 52,350 877 41959620 Miller (Herman), Inc. 60,100 1,841 60054410 Rhodes, Inc. (a) 449,000 7,521 76235P10 Rowe Furniture Corp. 16,200 344 77952810 23,411 TEXTILES & APPAREL - 1.4% Donnkenny, Inc. (Del.) (a) (e) 328,300 6,149 25800610 Forstmann & Co., Inc. (a) (e) 281,400 3,236 34659270 Haggar Corp. 20,000 510 40517310 Kellwood Co. 224,800 9,020 48804410 Mohawk Industries, Inc. (a) 201,400 6,898 60819010 Nantucket Industries, Inc. (a)(e) 165,000 1,072 63018310 Nine West Group, Inc. (a) 958,500 28,276 65440D10 Orbit Instrument Corp. (a) 306,100 1,416 68555910 Oshkosh B'Gosh, Inc. Class A 113,400 2,211 68822220 Stride Rite Corp. 814,000 13,329 86331410 Tandy Brands Accessories, Inc. (a) 172,300 3,403 87537810 Unifi, Inc. 309,100 8,307 90467710 Vista Resources, Inc. (a) 113,000 2,444 92838410 Westpoint Stevens, Inc. Class A (a) 10,000 188 96123810 86,459 TOTAL DURABLES 330,710 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) ENERGY - 10.0% ENERGY SERVICES - 2.0% Chiles Offshore Corp. (a) 1,234,000 $ 6,170 16888710 Energy Service, Inc. (a) 7,516,900 24,430 29271910 Global Marine, Inc. (a) 4,420,700 18,235 37935240 Halliburton Co. 200,000 6,375 40621610 Marine Drilling Companies, Inc. (a) 1,248,800 7,180 56824020 Nabors Industries, Inc. (a) 894,700 7,046 62956810 Nowsco Well Service Ltd. 361,000 5,189 67012210 Offshore Logistics, Inc. (a) 430,000 5,912 67625510 Offshore Pipelines, Inc. (a)(e) 631,100 9,940 67626910 Rowan Companies, Inc. (a) 165,900 1,493 77938210 Schlumberger Ltd. 200,000 11,825 80685710 Smith International, Inc. (a) 547,300 4,789 83211010 Tuboscope Vetco Corp. (a) 469,200 2,874 89860010 Weatherford International, Inc. (a) 787,500 8,367 94707610 Wheatley TXT Corp. 60,000 683 96271810 120,508 OIL & GAS - 8.0% Amerada Hess Corp. 390,900 17,639 02355110 Anadarko Petroleum Corp. 1,211,400 54,967 03251110 Anderson Exploration Ltd. (a) 101,000 2,207 03390110 Apache Corp. 13,000 304 03741110 Ashland Oil, Inc. 135,900 4,638 04454010 Beau Canada Exp. 1,946,300 3,461 07428010 Benton Oil & Gas Co. (a) 455,000 2,275 08328810 Blue Range Resource Corp. Class A (a) 290,500 2,143 09579K10 British Borneo Petroleum 240,800 697 11099D22 British Petroleum PLC ADR 985,900 63,098 11088940 Brown Tom, Inc. (a) (e) 883,300 9,937 11566020 Burlington Resources, Inc. 680,000 28,815 12201410 Cabot Oil & Gas Corp. Class A 307,800 6,502 12709710 Cabre Exploration Ltd. (a) 76,600 797 12690610 Canadian Natural Resources Ltd. (a) 2,446,300 33,315 13638510 Chauvco Resources Ltd. Class A (a) 500,000 6,526 16260010 Clyde Petroleum (a) 5,100,000 3,465 18958499 DEKALB Energy Corp. Class B (a) 102,500 1,409 24487410 Encal Energy Ltd. (a) 535,000 1,842 29250D10 Enron Oil & Gas Co. 155,300 6,057 29356210 Excel Energy, Inc. (a) 76,600 319 30065410 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) ENERGY - CONTINUED OIL & GAS - CONTINUED Grad & Walker Energy Corp.(e) 636,100 $ 6,016 38391010 HS Resources, Inc. (a)(e) 623,000 13,083 40429710 Horsham Corp. 1,024,000 15,010 44090710 Intensity Resources Ltd. (a) 988,700 2,020 45816E10 Inverness Petroleum Ltd. (a) 986,000 7,273 46190810 Jordan Petroleum Ltd. Class A (a) 472,800 3,219 48076110 Kerr-McGee Corp. 124,900 5,636 49238610 Louis Dreyfus Natural Gas Corp. (a) 192,900 3,086 54601110 Louisiana Land & Exploration Co. 39,800 1,597 54626810 Mitchell Energy & Development Corp. Class A 57,700 1,255 60659220 Murphy Oil Corp. 726,500 29,060 62671710 Newfield Exploration Co. (a) 70,600 1,244 65129010 Noble Affiliates, Inc. 667,300 17,683 65489410 Norsk Hydro AS ADR (a) 113,600 3,181 65653160 Northrock Resources Ltd. (a) 518,300 2,990 66679810 Northstar Energy Corp. (a) 378,000 7,436 66703R10 Nuevo Energy Corporation (a) 116,800 2,278 67050910 Paramount Resources Ltd. (a) 142,000 2,108 69932010 Parker & Parsley Petroleum Co. 380,500 9,417 70101810 Petromet Resources Ltd. Ord. (a) 668,600 3,162 71673110 Phillips Petroleum Co. 525,000 15,225 71850710 Pinnacle Resources Ltd. (a) 350,000 4,766 72348R10 Poco Petroleums Ltd. (a) 291,700 1,959 73036110 Renaissance Energy Ltd. (a) 936,600 20,018 75966610 Rio Alto Exploration Ltd. (a) 1,738,300 10,850 76689210 Sceptre Resources Ltd. 479,600 4,626 80621470 Snyder Oil Corp. 115,600 2,052 83348210 Summit Resources Ltd. 322,000 2,101 86624610 Sun Company, Inc. 49,200 1,445 86676210 Tarragon Oil & Gas Ltd. (a) 515,000 6,721 87629E20 Tri Link Resources Ltd. Class A (a) 85,000 900 89557D10 United Meridian Corp. (a) 85,300 1,162 91086510 Unocal Corp. 1,250,000 34,844 91528910 Vintage Petroleum, Inc. 390,900 7,085 92746010 500,921 TOTAL ENERGY 621,429 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) FINANCE - 2.9% BANKS - 2.2% Allied Irish Bank 3,500,000 $ 15,043 01908810 Bank International Indonesia Ord. (a) 1,000,000 4,902 06199B92 Bank of New York Co., Inc. 31,000 1,767 06405710 Bank South Corp. 268,300 4,091 06506810 Citicorp (a) 1,755,000 64,496 17303410 Dresdner Bank AG Ord. 40,000 10,655 26156110 HUBCO, Inc. 155,940 3,508 40438210 Integra Financial Corp. 247,900 10,660 45810410 Liberty Bancorporation, Inc. 12,100 339 53017510 National Westminster Bank PLC Ord. 900,000 8,242 63853930 North Fork Bancorporation, Inc. (a) 116,800 1,504 65942410 Shawmut National Corp. 102,000 2,218 82048410 Signet Banking Corp. 1,031 36 82668110 Westpac Banking Corp. 3,274,200 10,294 96121410 137,755 CLOSED END INVESTMENT COMPANY - 0.3% Free State Consolidated Gold Mines Ltd. ADR 276,800 4,706 35614220 Korea Fund, Inc. (a) 50,000 1,200 50063410 Orange Free State Investments Ltd. ADR 228,400 10,050 68486520 15,956 CREDIT & OTHER FINANCE - 0.3% Argentaria Corp. Bancaria de Esp. (a) 327,525 13,819 21991392 Gencor Ltd. (Reg.) (a) 1,700,000 3,428 36868193 Mercer International, Inc. SBI (a) 185,000 2,613 58805610 Mercury Finance Co. 13,800 264 58939510 20,124 SAVINGS & LOANS - 0.1% Crossland Federal Savings Bank, Brooklyn, NY (a) 200,000 5,600 22764B10 Progressive Bancorporation Inc. 21,200 350 74331310 Standard Federal Bank 100,000 3,000 85338910 8,950 TOTAL FINANCE 182,785 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) HEALTH - 7.2% DRUGS & PHARMACEUTICALS - 3.5% Astra A Free 1,000,000 $ 22,772 04632292 COR Therapeutics, Inc. (a) 235,400 3,560 21775310 Cellpro, Inc. (a) 453,900 15,773 15115610 Celtrix Laboratories, Inc. (a) 245,000 2,695 15118610 Chiron Corp. (a) 285,000 23,940 17004010 Cocensys, Inc. (a) 36,500 146 19126310 Collagen Corp. (a) 25,000 694 19419410 Cytotheraputics, Inc. (a) 196,300 2,405 23292310 Elan PLC ADR (a) 676,700 28,675 28413120 Genentech, Inc. (a) 346,200 17,483 36871020 Genetics Institute, Inc. (depositary share) 30,700 1,481 37185530 Magainin Pharmaceuticals, Inc. (a) 247,000 3,396 55903610 Merck & Co., Inc. 1,107,468 38,069 58933110 Nature's Bounty, Inc. (a)(e) 10,000 208 63901730 Perspective Biosystems, Inc. (a) 109,800 3,157 71527110 Pfizer, Inc. 547,900 37,805 71708110 Protein Design Labs, Inc. (a) 169,700 4,115 74369L10 Repligen Corp. (a) 150,000 1,031 75991610 Rexall Sundown, Inc. (a) 20,000 300 76164810 Schering-Plough Corp. 130,000 8,905 80660510 Sciclone Pharmaceuticals, Inc. (a) 107,600 2,475 80862K10 219,085 MEDICAL EQUIPMENT & SUPPLIES - 1.2% Cardinal Distribution, Inc. 432,300 20,534 14148710 Cordis Corp. (a) 173,300 8,557 21852510 FoxMeyer Corp. 225,600 2,566 35165410 Herbalife International, Inc. 10,000 177 42690810 Kendall International, Inc. (a) 40,000 1,840 48875110 Kirschner Medical Corp. (a) 30,000 195 49766010 Maxxim Medical, Inc. (a) 48,900 984 57777G10 McKesson Corp. 40,200 2,171 58155610 Medtronic, Inc. 310,000 25,459 58505510 Owens & Minor, Inc. 35,300 812 69073010 Patterson Dental Co. (a) 176,200 5,727 70341210 Sybron Corp. (a) 75,300 2,410 87114F10 Thermedics, Inc. (a) 55,750 843 88390110 72,275 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) HEALTH - CONTINUED MEDICAL FACILITIES MANAGEMENT - 2.5% Abbey Healthcare Group, Inc. (a) 173,200 $ 4,806 00278610 America Medical Holdings, Inc. (a) 20,000 383 02742810 Columbia Healthcare Corp. 1,584,965 52,700 19767910 HEALTHSOUTH Rehabilitation Corp. (a) 505,700 12,769 42192410 Health Management Associates, Inc. Class A (a) 940,450 27,508 42193310 Homecare Management, Inc. (a) 320,000 4,360 43738620 Lincare Holdings, Inc. (a) 200,300 4,982 53279110 Multicare Companies, Inc. (a) 80,800 1,475 62543V10 Rehabcare Corp. (a)(e) 227,000 2,554 75914810 U.S. Healthcare, Inc. 571,700 32,944 91191010 United HealthCare Corp. 200,000 15,175 91058110 Universal Health Services, Inc. Class B (a) 3,500 72 91390310 159,728 TOTAL HEALTH 451,088 INDUSTRIAL MACHINERY & EQUIPMENT - 2.3% ELECTRICAL EQUIPMENT - 0.7% BMC Industries, Inc. (a) 127,400 2,691 05560710 California Microwave Corp. (a) 1,400 34 13044210 General Electric Co. 125,000 13,109 36960410 Itel Corp. (a) 77,500 2,170 46564210 Philips NV (a) 775,000 15,985 71833750 Roper Industries, Inc. 195,600 6,357 77669610 Willcox & Gibbs, Inc. (a) 360,300 2,792 96920710 Yurtec Corp. (a) 16,650 381 97299492 43,519 INDUSTRIAL MACHINERY & EQUIPMENT - 1.2% Astec Industries, Inc. (a) 419,100 6,444 04622410 Bearings, Inc. 400 11 07400520 CMI Corp. Oklahoma Class A 785,300 5,399 12576130 Caterpillar, Inc. 550,000 48,950 14912310 Dover Corp. 36,000 2,187 26000310 FSI International, Inc. (a) 10,000 120 30263310 Indresco, Inc. (a) 304,000 4,712 45590510 JLG Industries, Inc. 15,000 371 46621010 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED Park-Ohio Industries, Inc. (a) 343,200 $ 4,419 70067710 Regal-Beloit Corp. 80,500 2,123 75875010 TRINOVA Corp. 42,600 1,337 89667810 76,073 POLLUTION CONTROL - 0.4% Allied Waste Industries, Inc. (a) 20,000 105 01958930 Envirotest Systems Corp. (a) 12,000 258 29409W10 Harding Associates, Inc. (a) 38,800 349 41226410 OHM Corp.(a) 1,353,500 15,734 67083910 Sanifill, Inc. (a) 127,400 2,771 80101810 TRC Companies, Inc. (a) 20,000 215 87262510 United Waste Systems, Inc. (a) 347,400 5,385 91317410 24,817 TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 144,409 MEDIA & LEISURE - 8.4% BROADCASTING - 3.7% Adelphia Communications Class A (a) 32,000 600 00684810 BET Holdings, Inc. Class A (a) 20,000 395 08658510 Broadcasting Partners, Inc. Class A (a)(e) 439,200 6,917 11131910 CBS, Inc. 60,000 17,310 12484510 Capital Cities/ABC, Inc. 60,000 37,170 13985910 Clear Channel Communications, Inc. (a) 464,000 21,344 18450210 Comcast Corp. Class A (special) 339,800 12,233 20030020 EZ Communications, Inc. (a) 294,200 4,634 26928810 Heritage Media Corp. Class A (a) 762,800 15,161 42724120 Home Shopping Network, Inc. 1,796,500 26,723 43735110 Infinity Broadcasting Corp. (a) 210,842 6,378 45662610 Jacor Communications, Inc. Class A 603,000 8,668 46985840 Liberty Media Corp. Class A (a) 125,000 3,640 53071530 Saga Communications, Inc. Class A (a) (e) 327,800 5,614 78659810 Scandinavian Broadcasting Corp. (a) 40,000 840 80699E92 TCA Cable TV, Inc. 60,000 1,710 87224110 Tele-Communications, Inc. Class A (a) 883,900 26,738 87924010 Time Warner, Inc. 775,944 34,335 88731510 230,410 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) MEDIA & LEISURE - CONTINUED ENTERTAINMENT - 0.5% Cedar Fair LP (depositary units) 60,500 $ 2,125 15018510 Disney (Walt) Co. 10,000 426 25468710 Players International, Inc. (a) 332,900 8,239 72790310 PolyGram N.V. ADR 315,000 12,403 73173310 Royal Caribbean Cruises Ltd. 440,000 11,770 78015392 34,963 LEISURE DURABLES & TOYS - 0.7% ARCTCO, Inc. 525,200 12,605 03966510 Authentic Fitness Corp. (a) 12,100 340 05266110 Fleetwood Enterprises, Inc. 160,300 3,807 33909910 Hasbro, Inc. 270,000 9,788 41805610 Mattel, Inc. 440,175 12,160 57708110 Thor Industries, Inc. 106,100 2,732 88516010 41,432 LODGING & GAMING - 2.4% Autotote Corp. Class A (a) 10,000 220 05332310 Genting BHD (ML EX) 677,000 9,424 37245210 Grand Palais Enterprises, Inc. (a)(g) 398,400 6,597 38699522 Hilton Hotels Corp. 221,400 13,450 43284810 Hong Kong & Shanghai Hotels 9,000,000 17,354 71899292 Hospitality Franchise Systems, Inc. (a) 785,300 41,719 44091210 La Quinta Motor Inns, Inc. 464,250 16,365 50419510 Lottery Enterprises, Inc. (a) 25,000 413 54569410 Marriott International, Inc. 400,000 11,600 57190010 Mirage Resorts, Inc. (a) 483,350 11,540 60462E10 Station Casinos, Inc. (a) 212,500 4,197 85768910 WMS Industries, Inc. (a) 518,900 14,918 92929710 147,797 PUBLISHING - 0.7% American Greetings Corp. Class A 95,200 3,237 02637510 Belo (A.H.) Corp. Class A 111,700 5,920 08055510 Enquirer/Star Group, Inc. Class A 283,400 5,385 29355410 Gannett Co., Inc. 250,000 14,313 36473010 Harte Hanks Communications, Inc. (a) 40,000 780 41619610 MaClean Hunter Ltd. 463,300 4,425 55474980 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) MEDIA & LEISURE - CONTINUED PUBLISHING - CONTINUED Meredith Corp. 263,600 $ 10,544 58943310 Park Communications, Inc. (a) 90,000 1,890 70025210 Score Board, Inc. (a) 25,000 459 80917320 46,953 RESTAURANTS - 0.4% Consolidated Products, Inc. (a) 224,030 2,240 20979810 Ground Round Restaurants, Inc. (a) (e) 755,200 5,947 39942710 IHOP Corp. (a) 309,500 8,976 44962310 McDonald's Corp. 50,000 2,850 58013510 Quantum Restaurant Group, Inc. (a) 153,100 1,875 74763T10 Shoney's, Inc. (a) 110,000 2,544 82503910 Uno Restaurant Corp. (a) 27,700 270 91490010 24,702 TOTAL MEDIA & LEISURE 526,257 NONDURABLES - 3.7% AGRICULTURE - 0.1% Pioneer Hi-Bred International, Inc. 119,700 4,668 72368610 BEVERAGES - 0.6% Canadaigua Wine Co. Class A (a) 406,900 12,817 13721920 Coca-Cola Bottling Co. Consolidated 10,100 369 19109810 Dr. Pepper/Seven-Up Companies, Inc. (a) 1,110,000 26,640 25613130 39,826 FOODS - 0.6% CPC International, Inc. 295,700 14,083 12614910 Chock Full-O-Nuts Corp. 498,000 3,984 17026810 Dean Foods Co. 137,800 4,496 24236110 IBP, Inc. 529,600 13,703 44922310 Michael Foods, Inc. 20,000 160 59407410 Pet, Inc. 125,400 2,195 71582510 38,621 HOUSEHOLD PRODUCTS - 1.3% DEP Corp. Class A (a) 406,000 2,132 23320220 Gillette Company 750,800 44,766 37576610 Paragon Trade Brands, Inc. (a) 332,600 9,812 69912K10 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) NONDURABLES - CONTINUED HOUSEHOLD PRODUCTS - CONTINUED Premark International, Inc. 160,000 $ 12,840 74045910 Safeskin Corp. 431,900 6,910 78645410 Stanhome, Inc. 202,100 6,846 85442510 83,306 TOBACCO - 1.1% Philip Morris Companies, Inc. 1,000,000 55,750 71815410 RJR Nabisco Holdings Corp. (a) 1,782,700 11,365 74960K10 67,115 TOTAL NONDURABLES 233,536 PRECIOUS METALS - 3.4% PRECIOUS METALS - 3.4% Agnico Eagle Mines Ltd. 167,900 2,191 00847410 American Barrick Resources Corp. 830,000 23,627 02451E10 Anglo American Corp. South Africa: (Reg.) 57,600 2,947 03486110 ADR (a) 159,400 8,349 03486130 Cambior Inc. 791,400 11,975 13201L10 Euro-Nevada Mining Corp. 511,500 18,237 29870P10 Franco Nevada Mining Corp. 276,000 19,002 35186010 Golden Star Resources, Ltd. Canada (a) 362,200 4,864 38119T10 Homestake Mining Co. 1,500,000 33,000 43761410 Newmont Mining Corp. 365,000 21,033 65163910 Placer Dome Inc. 1,015,000 25,245 72590610 St. Helena Gold Mines Ltd. Ord. 11,300 116 78967010 TVX Gold, Inc. (a) 400,000 2,648 87308K10 Vaal Reefs Exploration & Mining Co. Ltd. ADR 29,200 296 91850640 Western Deep Levels Ltd. ADR 380,000 18,430 95807720 Western Mining Corp. Holdings Ltd 3,000,000 14,342 95869410 Zapopan NL (a) 4,298,500 8,698 98999293 215,000 RETAIL & WHOLESALE - 3.6% APPAREL STORES - 0.8% AnnTaylor Stores Corp. (a) 414,800 10,266 03611510 Filene's Basement Corp. (a) 337,200 3,667 31686610 Gap, Inc. 650,000 25,594 36476010 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) RETAIL & WHOLESALE - CONTINUED APPAREL STORES - CONTINUED Merry-Go-Round Enterprises, Inc. 650,000 $ 2,194 59043610 Petrie Stores Corp. 138,500 4,034 71643410 Sportmart, Inc. (a) 35,000 621 84892210 Talbots, Inc. 1,000 26 87416110 United States Shoe Corp. 280,000 4,200 91260510 50,602 APPLIANCE STORES - 0.2% Cellstar Corp. (a) 674,500 11,298 15092510 GENERAL MERCHANDISE STORES - 0.9% Hills Stores Co. (a) 8,000 163 43169210 Hudsons Bay Co. Ord. 284,500 8,502 44420410 Kohls Corp. (a) 600 30 50025510 Neiman-Marcus Group, Inc. 397,800 7,459 64020410 Penney (J.C.) Co., Inc. 300,000 15,712 70816010 Price/Costco, Inc. 1,050,000 20,213 74143W10 Value City Department Stores, Inc. (a) 68,700 1,005 92038710 53,084 GROCERY STORES - 0.4% Food Lion, Inc. Class A 201,600 1,310 34477520 Ingles Markets, Inc. Class A 87,900 967 45703010 Pick N Pay Stores Ltd. (a) 998,000 3,024 72199422 Richfood Holdings, Inc. Class A 767,000 13,423 76340810 Ruddick Corp. 20,000 463 78125810 Rykoff-Sexton, Inc. 236,300 5,169 78375910 24,356 RETAIL & WHOLESALE, MISC - 1.3% Amway Asia Pacific Ltd. (a) 10,500 374 03299H22 50-Off Stores, Inc. (a) 477,000 3,279 31681110 Fabri-Centers of America, Inc. (a) 174,200 3,266 30284610 Fingerhut Companies, Inc. 45,500 1,280 31786710 Friedmans, Inc. Class A (a) 125,000 1,719 35843810 Futures Shops Ltd. 97,000 2,275 36091310 Good Guys, Inc. (a) 89,300 1,161 38209110 Lowe's Companies, Inc. 410,000 24,293 54866110 Luria (L.) & Son, Inc. (a) 251,900 3,778 55048410 Musicland Stores Corp. 515,000 10,686 62758B10 Office Depot, Inc. (a) 225,000 7,566 67622010 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) RETAIL & WHOLESALE - CONTINUED RETAIL & WHOLESALE, MISC - CONTINUED Toys "R" Us, Inc. (a) 500,000 $ 20,437 89233510 Wickes Lumber Co. (a) 150,000 2,681 96744610 82,795 TOTAL RETAIL & WHOLESALE 222,135 SERVICES - 2.1% ADVERTISING - 0.2% Foote Cone & Belding Communications, Inc. 13,300 639 34487210 Regal Communication Corp. (a) (e) 1,837,900 7,696 75875630 8,335 LEASING & RENTAL - 0.0% Agency Rent-A-Car, Inc. (a) 167,500 2,198 00845010 PRINTING - 0.4% Cadmus Communications Corp. 140,700 1,970 12758710 Cryk, Inc. (a) 50,000 1,150 23281710 Moore Corporation Ltd. 660,000 12,733 61578510 Reynolds & Reynolds Co. Class A 160,600 7,327 76169510 Valassis Communications, Inc. 69,400 928 91886610 Wallace Computer Services, Inc. 68,600 2,324 93227010 26,432 SERVICES - 1.5% Barefoot, Inc. (a) 225,700 7,787 06751210 Block (H&R), Inc. 60,000 2,445 09367110 CDI Corp. (a) 254,200 3,177 12507110 Catalina Marketing Corp. (a) 6,500 325 14886710 Ecolab, Inc. 164,600 7,407 27886510 Fair Issac & Company, Inc. 70,000 1,575 30325010 Franklin Quest Co. (a) 175,400 6,183 35459610 Medaphis Corp. 350,200 11,557 58402810 Michael Anthony Jewelers, Inc. (a)(e) 500,000 4,187 59406010 Oroamerica, Inc. (a) 82,700 1,241 68702710 Pittston Company Services Group 1,084,100 31,303 72570110 Robert Half International, Inc. (a) 428,700 11,253 77032310 Service Corp. International 110,000 2,888 81756510 91,328 TOTAL SERVICES 128,293 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) TECHNOLOGY - 11.0% COMMUNICATIONS EQUIPMENT - 1.3% Cisco Systems, Inc. (a) 224,300 $ 14,495 17275R10 DSC Communications Corp. (a) 30,000 1,845 23331110 Harmon Industries, Inc. (a)(e) 150,500 3,461 41313610 Inter-Tel, Inc. (a) 766,900 6,710 45837210 Lo Jack Corp. (a) 120,000 825 53945110 MB Communications, Inc. (a) (e) 1,024,600 21,773 55262M10 Porta Systems Corp. (e) 433,200 4,278 73564710 3Com Corp. (a) 337,800 15,877 88553510 VMX, Inc. (a) 1,123,000 4,352 91827610 Wellfleet Communications, Inc. (a) 140,000 9,030 94949710 82,646 COMPUTER SERVICES & SOFTWARE - 2.7% ASK Computer Systems, Inc. (a) 25,000 328 00190310 Adobe Systems, Inc. 202,300 4,501 00724F10 BancTec, Inc. (a) 153,500 3,722 05978410 Computer Associates International, Inc. 239,600 9,584 20491210 CompuCom Systems, Inc. (a) 339,500 1,379 20478010 Electronic Arts (a) 30,000 900 28551210 Electronic Information Systems, Inc. (a) 277,800 3,681 28573810 Equifax Inc. 640,000 17,520 29442910 Government Technology Services, Inc. (a) 50,300 641 38375010 HBO & Co. 1,000 46 40410010 Intelligent Electronics, Inc. 62,200 1,703 45815710 KnowledgeWare, Inc. (a) 400,000 6,150 49924510 Lotus Development Corp. (a) 988,000 54,340 54570010 Micrografx, Inc. (a) 150,000 1,359 59507710 Microsoft Corp. (a) 316,700 25,534 59491810 Payco American Corp. (a) 27,500 289 70432710 SafeCard Services, Inc. 733,500 13,845 78642110 State of The Art, Inc. (a) 426,400 3,145 85730710 Sterling Software, Inc. (a) 68,800 1,952 85954710 Stratacom, Inc. (a) 457,500 7,663 86268310 Symantec Corp. (a) 35,000 639 87150310 Systems & Computer Technology Corp. 40,000 720 87187310 VMark Software, Inc. (a)(e) 455,600 6,492 92856110 Warner Insurance Services, Inc. (e) 440,950 2,205 93446710 168,338 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) TECHNOLOGY - CONTINUED COMPUTERS & OFFICE EQUIPMENT - 5.7% ADAPTEC, Inc. (a) 105,000 $ 4,174 00651F10 AST Research, Inc. (a) 850,000 19,338 00190710 Amdahl Corp. 1,509,600 9,058 02390510 Compaq Computer Corp. (a) 525,000 38,850 20449310 Creative Technologies, Corp. (a) 193,900 6,156 22599992 Dell Computer Corporation (a) 733,200 16,589 24702510 Diebold, Inc. 337,300 20,322 25365110 Digital Biometrics, Inc. (a) 206,200 2,681 25383310 Exabyte (a) 325,900 5,744 30061510 Hewlett-Packard Co. 325,700 25,730 42823610 Hutchinson Technology, Inc. (a) 15,500 453 44840710 International Business Machines Corp. 2,016,500 113,932 45920010 Itron, Inc. (a) 50,000 900 46574110 Media Vision Technology, Inc. 485,900 21,258 58445H10 Merisel, Inc. (a) 261,400 4,803 58984910 Micropolis Corp. (a) 612,300 4,286 59490710 Miltope Group, Inc. (a)(e) 384,700 1,587 60219110 NAI Technologies, Inc. (a) 260,000 1,690 62872H10 Norand Corp. (a) 12,500 341 65542110 Photonics Corp. (a) (e) 222,500 1,391 71937W10 Quantum Corp. (a) 337,000 4,760 74790610 Seagate Technology (a) 6,700 159 81180410 Sequent Computer Systems, Inc. (a) 500,000 7,625 81733810 Sun Microsystems, Inc. (a) 216,700 6,311 86681010 Symbol Technologies, Inc. (a) 290,000 5,256 87150810 Syquest Technology, Inc. (a) (e) 610,800 6,261 87166010 Tech Data Corp. (a) 110,000 3,960 87823710 Xerox Corp. 250,000 22,344 98412110 Xylogics, Inc. (a) (e) 70,000 1,155 98415210 357,114 ELECTRONIC INSTRUMENTS - 0.0% Fisher Scientific International, Inc. 50,000 1,769 33803210 ELECTRONICS - 1.3% Analog Devices, Inc. (a) 20,000 493 03265410 Dovatron International, Inc. (a)(e) 414,300 11,393 25985910 Intel Corp. 225,000 13,950 45814010 International Rectifier Corp. (a) 368,400 5,158 46025410 LSI Logic Corp. (a) 301,200 4,819 50216110 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) TECHNOLOGY - CONTINUED ELECTRONICS - CONTINUED Linear Technology Corp. 109,800 $ 4,255 53567810 Maxim Integrated Products, Inc. (a) 54,900 2,628 57772K10 Motorola, Inc. 110,000 10,161 62007610 Photronics, Inc. (a) 47,500 760 71940510 Samsung Electronics Co. Ltd. GDR (a)(f) 6,574 222 79605030 Sanmina Corp. (a) 369,600 9,887 80090710 Solectron Corp. (a) 50,000 1,419 83418210 Storage Technology Corp. (a) 55,000 1,739 86211120 Texas Instruments, Inc. 174,400 11,074 88250810 77,958 TOTAL TECHNOLOGY 687,825 TRANSPORTATION - 4.3% AIR TRANSPORTATION - 1.0% AMR Corp. (a) 245,000 16,415 00176510 Comair Holdings, Inc. 123,300 2,820 19978910 Mesa Airlines, Inc. (a) 50,000 888 59048110 Southwest Airlines Co. 20,000 750 84474110 UAL Corp. (a) 273,100 39,873 90254910 60,746 RAILROADS - 2.2% Burlington Northern, Inc. 425,000 24,597 12189710 CSX Corp. 413,200 33,469 12640810 Chicago & North Western Holdings Corp. (a) 170,000 4,250 16715510 Conrail, Inc. 344,100 23,012 20836810 Illinois Central Corp., Series A 186,500 6,690 45184110 Santa Fe Pacific Corp. 1,507,300 33,537 80218310 Southern Pacific Rail Corp. (a) 120,000 2,370 84358410 Trinity Industries, Inc. 89,850 3,875 89652210 Wisconsin Central Transportation Corp. (a) 153,100 9,148 97659210 140,948 TRUCKING & FREIGHT - 1.1% Airborne Freight Corp. 104,000 3,653 00926610 American Freightways Corp. (a) 22,500 444 02629V10 Consolidated Freightways, Inc. (a) 1,077,300 25,451 20923710 Federal Express Corp. (a) 445,000 31,539 31330910 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) TRANSPORTATION - CONTINUED TRUCKING & FREIGHT - CONTINUED Frozen Food Express Industries, Inc. 41,333 $ 754 35936010 Harper Group 57,500 1,035 41345910 Landstar System, Inc. (a) 187,100 4,140 51509810 Swift Transportation Co., Inc. (a) 22,500 484 87075610 TNT Freightways Corp. 31,950 863 87259J10 Werner Enterprises, Inc. 31,100 949 95075510 69,312 TOTAL TRANSPORTATION 271,006 UTILITIES - 3.1% CELLULAR - 0.7% BCE Mobile Communications, Inc. 200,000 6,261 05534G10 Cellular, Inc. (a) 10,000 175 15116310 LIN Broadcasting Corp. (a) 31,300 3,459 53276310 Metrocall, Inc. (a) 30,700 537 59164710 Rogers Cantel Mobile Communications, Inc. Class B (non-vtg.) (a) 438,000 11,764 77510210 Rogers Communications, Inc. Class B (a) 204,100 3,378 77510920 Vodafone Group PLC 2,450,000 21,477 92857T92 47,051 ELECTRIC UTILITY - 1.6% Baltimore Gas & Electric Co. 50,000 1,269 05916510 Central & South West Corp. 278,900 8,437 15235710 DPL, Inc. 32,400 668 23329310 DQE, Inc. 91,200 3,146 23329J10 Entergy Corp. 789,900 28,436 29364F10 General Public Utilities Corp. 40,000 1,235 37055010 Gulf States Utilities Corp. (a) 816,800 16,336 40255010 Houston Industries, Inc. 259,400 12,354 44216110 Idaho Power Co. 56,300 1,710 45138010 LG&E Energy Corp. 13,400 543 50191710 NIPSCO Industries, Inc. 63,000 2,071 62914010 Philadelphia Electric Co. 67,300 2,036 71753710 Pinnacle West Capital Corp. (a) 79,900 1,788 72348410 Public Service Co. of Colorado 84,600 2,718 74444810 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) UTILITIES - CONTINUED ELECTRIC UTILITY - CONTINUED Southern Co. 179,400 $ 7,916 84258710 Texas Utilities Co. 162,900 7,045 88284810 97,708 GAS - 0.1% British Gas PLC Ord. 400,000 2,021 11090199 Equitable Resources, Inc. 95,000 3,479 29454910 Southern Union Company (a) 112,160 2,972 84403010 8,472 TELEPHONE SERVICES - 0.7% Ameritech Corp. 220,000 16,885 03095410 BCE, Inc. 80,000 2,792 05534B10 Bell Atlantic Corp. 200,000 11,800 07785310 LDDS Communications, Inc. (a) 20,000 965 50182L10 Southern New England Telecommunications Corp. 20,000 722 84348510 Southwestern Bell Corp. 55,000 2,283 84533310 Telefonos de Mexico SA sponsored ADR representing shares Ord. Class L 105,000 7,087 87940378 42,534 TOTAL UTILITIES 195,765 TOTAL COMMON STOCKS (Cost $4,586,266) 4,954,472 PREFERRED STOCKS - 0.8% CONVERTIBLE PREFERRED STOCKS - 0.4% CONSTRUCTION & REAL ESTATE - 0.1% REAL ESTATE - 0.1% Rouse Co. Series A 100,900 5,423 77927320 TRANSPORTATION - 0.3% AIR TRANSPORTATION - 0.3% UAL, Inc. 6 1/4% (f) 175,600 19,338 90254930 PREFERRED STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) CONVERTIBLE PREFERRED STOCKS - CONTINUED TRANSPORTATION - CONTINUED TRUCKING & FREIGHT - 0.0% Consolidated Freightways, Inc. Series C, $1.54 30,000 $ 664 20923720 TOTAL TRANSPORTATION 20,002 TOTAL CONVERTIBLE PREFERRED STOCKS 25,425 NONCONVERTIBLE PREFERRED STOCKS - 0.4% UTILITIES - 0.4% TELEPHONE SERVICES - 0.4% SIP (Societa Ital Per L'Eser) Spa Di Risp N/C Ord. 5,657,200 10,299 78401796 Stet Societa Finanziaria Telefonica Spa 7,500,000 15,140 85982592 25,439 TOTAL PREFERRED STOCKS (Cost $50,439 ) 50,864 CORPORATE BONDS - 0.8% MOODY'S RATINGS PRINCIPAL (UNAUDITED) (C) AMOUNT (000S) CONVERTIBLE BONDS - 0.4% DURABLES - 0.1% TEXTILES & APPAREL - 0.1% Unifi, Inc. 6%, 3/15/02 Baa1 $ 6,500 7,215 904677AC HEALTH - 0.0% MEDICAL FACILITIES MANAGEMENT - 0.0% Abbey Healthcare Group, Inc. 6 1/2%, 12/1/02 (f) B2 290 409 002786AA RETAIL & WHOLESALE - 0.2% RETAIL & WHOLESALE, MISC - 0.2% Fabri-Centers of America, Inc. 6 1/4%, 3/1/02 B2 7,300 6,497 302846AB Intertan Inc. 9%, 8/30/00 - 5,270 4,226 461120AA 10,723 CORPORATE BONDS - CONTINUED MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1) (UNAUDITED) (C) AMOUNT (000S) (000S) CONVERTIBLE BONDS - CONTINUED TECHNOLOGY - 0.1% COMMUNICATIONS EQUIPMENT - 0.1% General Instrument Corp. 5%, 6/15/00 B1 $ 3,000 $ 4,020 370121AA Porta Systems Corp. euro 6%, 7/1/02 - 130 96 7356479A 4,116 TOTAL CONVERTIBLE BONDS 22,463 NONCONVERTIBLE BONDS - 0.4% FINANCE - 0.2% BANKS - 0.2% International Bank for Reconstruction & Development euro 5 1/4%, 3/20/02 - 1,200,000 12,212 4590569J MEDIA & LEISURE - 0.0% BROADCASTING - 0.0% Time Warner, Inc. 0%, 8/15/02 (d) Ba1 3,300 2,999 887315AG RETAIL & WHOLESALE - 0.2% GROCERY STORES - 0.2% Rykoff Sexton, Inc. 8 7/8%, 11/1/03 Ba2 12,000 12,300 783759AC TOTAL NONCONVERTIBLE BONDS 27,511 TOTAL CORPORATE BONDS (Cost $47,798) 49,974 U.S. TREASURY OBLIGATIONS - 8.0% U.S. Treasury Bills, yields at date of purchase 0%-3.13%, 2/24/94 (Cost $497,596) 500,000 497,720 99399H5H OTHER SECURITIES - 0.1% PURCHASED BANK DEBT - 0.1% Macy (R.H.) & Co., Inc.: (b) funded letter of credit 5/27/95 1,896 1,517 mortgage loan participation 5/27/94 2,500 1,988 556994BK revolver loan variable rate 5/27/95 605 484 556994CH OTHER SECURITIES - CONTINUED PRINCIPAL VALUE (NOTE 1) AMOUNT (000S) (000S) PURCHASED BANK DEBT - CONTINUED Macy (R.H.) & Co., Inc. (b) - continued special real estate capitalization 9/30/95 $ 287 $ 229 557991AA term loan variable rate note: 5/27/95 799 639 556994CG 5/27/96 304 243 556993BD 5/27/96 728 583 556993BE TOTAL OTHER SECURITIES (Cost $4,859) 5,683 REPURCHASE AGREEMENTS - 11.0% MATURITY AMOUNT (000S) Investments in repurchase agreements (U.S. Treasury obligations), in a joint trading account at 3.23% dated 12/31/93 due 1/3/94 $ 684,233 684,049 TOTAL INVESTMENT IN SECURITIES - 100% (Cost $5,871,007) $ 6,242,762 FORWARD FOREIGN CURRENCY CONTRACTS AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED DATE(S) VALUE GAIN/(LOSS) CONTRACTS TO BUY 3,723,846 JPY (Payable amount $34,829) 2/10/94 $ 33,344 $ (1,485) THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN SECURITIES - 0.5% CONTRACTS TO SELL 5,494,296 JPY (Receivable amount $50,782) 2/10/94 $ 49,196 $ 1,586 THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN SECURITIES - 0.8% LEGEND 1. Non-income producing 2. Non-income producing - issuer filed for protection under the Federal Bankruptcy Code or is in default of interest payment. 3. Standard & Poor's Corporation credit ratings are used in the absence of a rating by Moody's Investors Service, Inc. 4. Debt obligation initially issued in zero coupon form which converts to coupon form at a specified rate and date. 5. Affiliated company (see Note 6 of Notes to Financial Statements). 6. Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $22,541,000 or .4% of net assets. 7. Restricted securities - investment in securities not registered under the Securities Act of 1933 (see Note 2 of Notes to Financial Statements). Additional information on each holding is as follows: ACQUISITION ACQUISITION SECURITY DATE COST Grand Palais Enterprises, Inc. 6/11/93 $ 6,598,000 OTHER INFORMATION Distribution of investments by country, as a percentage of total value of investment in securities, is as follows: United States 86.5% Canada 6.3 United Kingdom 1.6 Others (individually less than 1%) 5.6 TOTAL 100.0% INCOME TAX INFORMATION At December 31, 1993 the aggregate cost of investment securities for income tax purposes was $5,886,032,000. Net unrealized appreciation aggregated $356,730,000, of which $462,590,000 related to appreciated investment securities and $105,860,000 related to depreciated investment securities. The fund hereby designates $68,130,000 as a capital gain dividend for the purpose of the dividend paid deduction. FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) DECEMBER 31, 1993 ASSETS Investment in securities, at value (including repurchase $ 6,242,762 agreements of $684,049) (cost $5,871,007) (Notes 1 and 2) - See accompanying schedule Long foreign currency contracts held, at value (cost 33,344 $34,829) (Note 2) Short foreign currency contracts (Note 2) $ (49,196) Contracts held, at value Receivable for contracts held 50,782 1,586 Cash 1 Receivable for investments sold 228,706 Receivable for fund shares sold 37,179 Dividends receivable 5,257 Interest receivable 752 Other receivables 173 TOTAL ASSETS 6,549,760 LIABILITIES Payable for foreign currency contracts held (Note 2) 34,829 Payable for investments purchased 168,396 Payable for fund shares redeemed 40,915 Dividends payable 7,568 Accrued management fee 3,454 Other payables and accrued expenses 3,607 Collateral on securities loaned, at value (Note 5) 83,431 TOTAL LIABILITIES 342,200 NET ASSETS $ 6,207,560 Net Assets consist of (Note1): Paid in capital $ 5,738,003 Distributions in excess of net investment income (174) Accumulated undistributed net realized gain (loss) on 97,875 investments Net unrealized appreciation (depreciation) on: Investment securities 371,755 Foreign currency contracts 101 NET ASSETS, for 201,286 shares outstanding $ 6,207,560 NET ASSET VALUE and redemption price per share $30.84 ($6,207,560 (divided by) 201,286 shares) Maximum offering price per share (100/97.00 of $30.84) $31.79
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR ENDED DECEMBER 31, 1993 INVESTMENT INCOME $ 41,707 Dividends (including $167 from affiliated issuers) (Note 6) Interest (including security lending fees of $62) (Note 5) 21,114 TOTAL INCOME 62,821 EXPENSES Management fee (Note 4) $ 25,826 Basic fee Performance adjustment 2,669 Transfer agent fees (Note 4) 12,923 Accounting fees and expenses (Note 4) 802 Non-interested trustees' compensation 25 Custodian fees and expenses 581 Registration fees 1,668 Audit 52 Legal 45 Miscellaneous 113 Total expenses before reductions 44,704 Expense reductions (Note 7) (954) 43,750 NET INVESTMENT INCOME 19,071 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3) Net realized gain (loss) on: Investment securities (including realized gain of $6,738 474,500 on sale of affiliated issuers) Foreign currency contracts 6,113 480,613 Change in net unrealized appreciation (depreciation) on: Investment securities 180,257 Foreign currency contracts 101 180,358 NET GAIN (LOSS) 660,971 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 680,042 OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS YEARS ENDED DECEMBER 31, 1993 1992 INCREASE (DECREASE) IN NET ASSETS Operations $ 19,071 $ 15,913 Net investment income Net realized gain (loss) on investments 480,613 155,091 Change in net unrealized appreciation (depreciation) 180,358 42,217 on investments NET INCREASE (DECREASE) IN NET ASSETS RESULTING 680,042 213,221 FROM OPERATIONS Distributions to shareholders: (19,956) (13,036) From net investment income In excess of net investment income (12,201) - Net realized gain (387,128) (109,733) TOTAL DISTRIBUTIONS (419,285) (122,769) Share transactions 5,259,147 1,803,211 Net proceeds from sales of shares Reinvestment of distributions from: 31,301 12,740 Net investment income Net realized gain 379,054 108,001 Cost of shares redeemed (1,709,099) (1,028,207) Net increase (decrease) in net assets resulting from 3,960,403 895,745 share transactions TOTAL INCREASE (DECREASE) IN NET ASSETS 4,221,160 986,197 NET ASSETS Beginning of period 1,986,400 1,000,203 End of period (including under (over) distribution of $ 6,207,560 $ 1,986,400 net investment income of ($174) and $22,785, respectively) OTHER INFORMATION Shares Sold 170,736 67,906 Issued in reinvestment of distributions from: 1,036 468 Net investment income Net realized gain 12,573 4,002 Redeemed (55,382) (39,126) Net increase (decrease) 128,963 33,250
FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31, 1993 1992# 1991 1990 1989 SELECTED PER-SHARE DATA Net asset value, beginning of $ 27.47 $ 25.60 $ 17.35 $ 16.78 $ 12.65 period Income from Investment Operations Net investment income (.09) .32(dagger) .22 .51 .63(double dagger) Net realized and unrealized 5.89 3.67 9.20 .15 4.82 gain (loss) on investments Total from investment 5.80 3.99 9.42 .66 5.45 operations Less Distributions From net investment income (.11) (.20) (.11) (.09) (.25) In excess of net investment (.07) - - - - income From net realized gain (2.25) (1.92) (1.06) - (1.07) Total distributions (2.43) (2.12) (1.17) (.09) (1.32) Net asset value, end of period $ 30.84 $ 27.47 $ 25.60 $ 17.35 $ 16.78 TOTAL RETURN * ** 21.43% 15.89% 54.92% 3.94% 43.15% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period $ 6,208 $ 1,986 $ 1,000 $ 332 $ 298 (in millions) Ratio of expenses to average 1.06% .87% .89% 1.06% .95% net assets (diamond) Ratio of expenses to average 1.08% .87% .89% 1.06% .95% net assets before expense (diamond) reductions Ratio of net investment income .46% 1.19% 1.01% 3.02% 4.01% to average net assets Portfolio turnover rate 255% 297% 217% 320% 266%
* TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE. ** THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIOD SHOWN. # AS OF JANUARY 1, 1992 THE FUND DISCONTINUED THE USE OF EQUALIZATION ACCOUNTING. (dagger) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. (double dagger) INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH AMOUNTED TO $.20 PER SHARE. (diamond)SEE NOTE 7 OF NOTES TO FINANCIAL STATEMENTS. NOTES TO FINANCIAL STATEMENTS For the period ended December 31, 1993 1. SIGNIFICANT ACCOUNTING POLICIES. Fidelity Contrafund (the fund) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust and is authorized to issue an unlimited number of shares. The following summarizes the significant accounting policies of the fund: SECURITY VALUATION. Securities for which exchange quotations are readily available are valued at the last sale price, or if no sale price, at the closing bid price. Securities (including restricted securities) for which exchange quotations are not readily available (and in certain cases debt securities which trade on an exchange), are valued primarily using dealer-supplied valuations or at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Short-term securities maturing within sixty days are valued at amortized cost or original cost plus accrued interest, both of which approximate current value. FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are maintained in U.S. dollars. Investment securities, other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the current exchange rate. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the exchange rate on the dates of the transactions. It is not practical to identify the portion of each amount shown in the fund's Statement of Operations under the caption "Realized and Unrealized Gain (Loss) on Investments" that arises from changes in foreign currency exchange rates. Investment income includes net realized and unrealized currency gains and losses recognized between accrual and payment dates. INCOME TAXES. As a qualified regulated investment company under Subchapter M of the Internal Revenue Code, the fund is not subject to income taxes to the extent that it distributes all of its taxable income for its fiscal year. The schedule of investments includes information regarding income taxes under the caption "Income Tax Information." INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed, are recorded as soon as the fund is informed of the ex-dividend date. Interest income is accrued as earned. Dividend and interest income is recorded net of foreign taxes where recovery of such taxes is not assured. DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences are primarily due to differing treatments for market discount, partnerships, non-taxable 1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED dividends and losses deferred due to wash sales, futures and options, excise tax regulations. The fund also utilized earnings and profits distributed to shareholders on redemption of shares as a part of the dividends paid deduction for income tax purposes. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital. SECURITY TRANSACTIONS. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective January 1, 1993, the fund adopted Statement of Position 93-2: Determination, Disclosure, and Financial Statement Presentation of Income, Capital Gain, and Return of Capital Distributions by Investment Companies. As a result, the fund changed the classification of distributions to shareholders to better disclose the differences between financial statement amounts and distributions determined in accordance with income tax regulations. Accordingly, amounts as of December 31, 1992 have been reclassified to reflect an increase in paid in capital of $88,294,000 a decrease in undistributed net investment income of $19,725,000 and a decrease in accumulated net realized gain on investments of $68,569,000. 2. OPERATING POLICIES. FORWARD FOREIGN CURRENCY CONTRACTS. The fund may enter into forward foreign currency contracts. These contracts involve market risk in excess of the amount reflected in the fund's Statement of Assets and Liabilities. The face or contract amount in U.S. dollars reflects the total exposure the fund has in that particular currency contract. The U.S. dollar value of forward foreign currency contracts is determined using forward currency exchange rates supplied by a quotation service. Losses may arise due to changes in the value of the foreign currency or if the counterparty does not perform under the contract. Purchases and sales of forward foreign currency contracts having the same settlement date and broker are offset and presented net on the Statement of Assets and Liabilities. Gain (loss) on the purchase or sale of forward foreign currency contracts having the same settlement date and broker is recognized on the date of offset, otherwise gain (loss) is recognized on settlement date. REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery of the underlying securities, whose market value is required to be at least 102% of the resale price at the time of purchase. The fund's investment adviser, Fidelity Management & Research Company (FMR), is responsible for determining that the value of these underlying securities remains at least equal to the resale price. 2. OPERATING POLICIES - CONTINUED JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission (the SEC), the fund, along with other registered investment companies having management contracts with FMR, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Federal Agency obligations. RESTRICTED SECURITIES. The fund is permitted to invest in privately placed restricted securities. These securities may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. At the end of the period, restricted securities (excluding 144A issues) amounted to $6,597,000 or .1% of net assets. 3. PURCHASES AND SALES OF INVESTMENTS. Purchases and sales of securities, other than short-term securities, aggregated $12,208,779,000 and $9,289,698,000, respectively, of which U.S. government and government agency obligations aggregated $262,056,000 and $124,000,000, respectively. 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES. MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly basic fee that is calculated on the basis of a group fee rate plus a fixed individual fund fee rate applied to the average net assets of the fund. The group fee rate is the weighted average of a series of rates ranging from .30% to .52% and is based on the monthly average net assets of all the mutual funds advised by FMR. The annual individual fund fee rate is .30%. The basic fee is subject to a performance adjustment (up to a maximum of + or - .20%) based on the fund's investment performance as compared to the appropriate index over a specified period of time. For the period, the management fee was equivalent to an annual rate of .69% of average net assets after the performance adjustment. The Board of Trustees approved a new group fee rate schedule with rates ranging from .2850% to .5200%. Effective November 1, 1993, FMR has voluntarily agreed to implement this new group fee rate schedule as it results in the same or a lower management fee. SALES LOAD. For the period, Fidelity Distributors Corporation (FDC), an affiliate of FMR and the general distributor of the fund, received sales charges of $32,505,000 on sales of shares of the fund. TRANSFER AGENT FEE. Fidelity Service Co. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives fees based on the type, size, 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED TRANSFER AGENT FEE - CONTINUED number of accounts and the number of transactions made by shareholders. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. ACCOUNTING AND SECURITY LENDING FEES. FSC maintains the fund's accounting records and administers the security lending program. The security lending fee is based on the number and duration of lending transactions. The accounting fee is based on the level of average net assets for the month plus out-of-pocket expenses. BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of FMR. The commissions paid to these affiliated firms were $6,592,000 for the period. 5. SECURITY LENDING. The fund loaned securities to certain brokers who paid the fund negotiated lenders' fees. These fees are included in interest income. The fund receives U.S. Treasury obligations and/or cash as collateral against the loaned securities, in an amount at least equal to 102% of the market value of the loaned securities at the inception of each loan. This collateral must be maintained at not less than 100% of the market value of the loaned securities during the period of the loan. At period end, the value of the securities loaned and the value of collateral amounted to $79,295,000 and $83,431,000, respectively. 6. TRANSACTIONS WITH AFFILIATED COMPANIES. An affiliated company is a company in which the fund has ownership of at least 5% of the voting securities. TRANSACTIONS WITH COMPANIES WHICH ARE OR WERE AFFILIATES ARE AS FOLLOWS: SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES DOLLAR AMOUNTS IN THOUSANDS PURCHASES SALES DIVIDEND MARKET COST COST INCOME VALUE AFFILIATES Action Industries, Inc. $ - $ 725 $ - $ - Broadcasting Partners, Inc. Class A (a) 3,016 - - 6,917 Brown Tom Inc. (a) 4,532 30 - 9,937 Cambrex Corp. 2,401 - 61 7,404 Centigram Communications Corp. 1,193 707 - - Continental Homes Holdings Corp. 129 - 20 9,214 Control Data Systems, Inc. 1,016 1,297 - - Donnkenny Inc. (a) 208 - - 6,624 Dovatron lnternational, Inc. 11,500 1,971 - 11,393 Electro Scientific Industries, Inc. 494 332 - - Esco Electronics Corp. 619 - - - Exide Electronics Group, Inc. 4,664 4,591 - - Forstmann & Co, Inc. (a) 14 - - 3,236 SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED DOLLAR AMOUNTS IN THOUSANDS PURCHASES SALES DIVIDEND MARKET COST COST INCOME VALUE AFFILIATES Grad & Walker Energy Corp. $ 334 $ - $ - $ 6,016 Grand Palais Enterprises, Inc. - - - 6,598 Ground Round Restaurants, Inc. (a) 1,505 - - 5,947 HS Resources, Inc. (a) - - - 13,083 Haverty Furniture Companies, Inc. 1,667 - 65 9,081 Harmon Industries, Inc. (a) 705 813 - 3,462 Hyde Athletic Industries, Inc. 17 95 - - Intensity Resources Ltd. (a) 6,376 5,529 - 2,020 Inter-Tel, Inc. (a) 2,399 - - 6,710 Just Toys, Inc. 1,348 1,484 - 4,530 Mb Communications, Inc. (a) 9,469 - - 21,773 Michael Anthony Jewelers, Inc. (a) - - - 4,188 Miltope Group, Inc. (a) 441 - - 1,587 Nantucket Industries, Inc. (a) 479 761 - 1,073 Natures Bounty, Inc. (a) 719 4,557 - 208 Ohm Corp. - - - 15,734 Offshore Pipelines, Inc. (a) 1,316 83 - 9,940 Orbit International Corp. - 7 - 1,416 Photonics Corp. (a) - 135 - 1,391 Porta Systems Corp. 779 - - 96 Redman Industries (a) 165 - - 7,628 Regal Communication Corp. (a) 3,795 - - 7,696 Rehabcare Corp. (a) 1,035 - - 2,554 Saga Communications, Inc. Class A (a) 1,908 - - 5,614 Southwest Bancshares, Inc. - 586 - - Syquest Technology, Inc. (a) 835 1,142 - 6,261 TETRA Technologies, Inc. 819 1,538 - 6,796 Vmark Software, Inc. (a) - 33 - 6,492 Warner Insurance Services, Inc. 2,098 2,937 21 2,205 Xylogics, Inc. (a) 1,946 1,032 - 1,155 Younkers, Inc. 5,202 1,473 - - TOTALS $ 75,143 $ 31,858 $ 167 $ 215,979 (a) NON-INCOME PRODUCING 7. EXPENSE REDUCTIONS. FMR has directed certain portfolio trades to brokers who paid a portion of the fund's expenses. For the period, the fund's expenses were reduced by $954,000 under this arrangement. REPORT OF INDEPENDENT ACCOUNTANTS To the Trustees and the Shareholders of Fidelity Contrafund: We have audited the accompanying statement of assets and liabilities of Fidelity Contrafund, including the schedule of portfolio investments, as of December 31, 1993, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1993 by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Contrafund as of December 31, 1993, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended in conformity with generally accepted accounting principles. COOPERS & LYBRAND COOPERS & LYBRAND Boston, Massachusetts February 2, 1994 TO CALL FIDELITY FOR FUND INFORMATION AND QUOTES The Fidelity Telephone Connection offers you special automated telephone services for quotes and balances. The services are easy to use, confidential and quick. All you need is a Touch Tone telephone. YOUR PERSONAL IDENTIFICATION NUMBER (PIN) The first time you call one of our automated telephone services, we'll ask you to set up your Personal Identification Number (PIN). The PIN assures that only you have automated telephone access to your account information. Please have your Customer Number (T-account #) handy when you call -- you'll need it to establish your PIN. If you would ever like to change your PIN, just choose the "Change your Personal Identification Number" option when you call. If you forget your PIN, please call a Fidelity representative at 1-800- 544-6666 for assistance. (PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES* 1-800-544-8544 Just make a selection from this record-ed menu: PRESS 1.For quotes on funds you own. 2. For an individual fund quote. 3. For the ten most frequently requested Fidelity fund quotes. 4. For quotes on Fidelity Select Portfolios.(Registered trademark) 5. To change your Personal Identification Number (PIN). 6. To speak with a Fidelity representative. (PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT BALANCES 1-800-544-7544 Just make a selection from this record- ed menu: PRESS 1. For balances on funds you own. 2. For your most recent fund activity (purchases, redemptions, and dividends). 3. To change your Personal Identification Number (PIN). 4. To speak with a Fidelity representative. * WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND RETURN WILL VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS THAT YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES. FOR MORE INFORMATION ON ANY FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY. TO VISIT FIDELITY For directions and hours, please call 1-800-544-9797. ARIZONA 7373 N. Scottsdale Road Scottsdale, AZ CALIFORNIA 851 Hamilton Avenue Campbell, CA 527 North Brand Boulevard Glendale, CA 19100 Von Karman Avenue Irvine, CA 10100 Santa Monica Blvd. Los Angeles, CA 811 Wilshire Boulevard Los Angeles, CA 251 University Avenue Palo Alto, CA 1760 Challenge Way Sacramento, CA 7676 Hazard Center Drive San Diego, CA 455 Market Street San Francisco, CA 1400 Civic Drive Walnut Creek, CA COLORADO 1625 Broadway Denver, CO CONNECTICUT 185 Asylum Street Hartford, CT 265 Church Street New Haven, CT 300 Atlantic Street Stamford, CT DELAWARE 222 Delaware Avenue Wilmington, DE FLORIDA 4400 N. Federal Highway Boca Raton, FL 2249 Galiano Street Coral Gables, FL 4090 N. Ocean Boulevard Ft. Lauderdale, FL 4001 Tamiami Trail, North Naples, FL 32 West Central Boulevard Orlando, FL 2401 PGA Boulevard Palm Beach Gardens, FL 8065 Beneva Road Sarasota, FL 2000 66th Street, North St. Petersburg, FL GEORGIA 3525 Piedmont Road, N.E. Atlanta, GA 1000 Abernathy Road Atlanta, GA HAWAII 700 Bishop Street Honolulu, HI ILLINOIS 215 East Erie Street Chicago, IL One North Franklin Chicago, IL 540 Lake Cook Road Deerfield, IL 1415 West 22nd Street Oak Brook, IL 1700 East Golf Road Schaumburg, IL LOUISIANA 201 St. Charles Avenue New Orleans, LA MAINE 3 Canal Plaza Portland, ME MARYLAND 1 West Pennsylvania Ave. Towson, MD 7401 Wisconsin Avenue Bethesda, MD MASSACHUSETTS 470 Boylston Street Boston, MA 21 Congress Street Boston, MA 25 State Street Boston, MA 300 Granite Street Braintree, MA 101 Cambridge Street Burlington, MA 416 Belmont Street Worcester, MA MICHIGAN 280 North Woodward Ave. Birmingham, MI 26955 Northwestern Hwy. Southfield, MI MINNESOTA 38 South Sixth Street Minneapolis, MN MISSOURI 700 West 47th Street Kansas City, MO 200 North Broadway St. Louis, MO NEW JERSEY 60B South Street Morristown, NJ 501 Route 17, South Paramus, NJ 505 Millburn Avenue Short Hills, NJ NEW YORK 1050 Franklin Avenue Garden City, NY 999 Walt Whitman Road Melville, L.I., NY 71 Broadway New York, NY 350 Park Avenue New York, NY 10 Bank Street White Plains, NY NORTH CAROLINA 2200 West Main Street Durham, NC OHIO 600 Vine Street Cincinnati, OH 1903 East Ninth Street Cleveland, OH 28699 Chagrin Boulevard Woodmere Village, OH OREGON 121 S.W. Morrison Street Portland, OR PENNSYLVANIA 1735 Market Street Philadelphia, PA 439 Fifth Avenue Pittsburgh, PA TENNESSEE 5100 Poplar Avenue Memphis, TN TEXAS 10000 Research Boulevard Austin, TX 7001 Preston Road Dallas, TX 1155 Dairy Ashford Houston, TX 1010 Lamar Street Houston, TX 2701 Drexel Drive Houston, TX 400 East Las Colinas Blvd. Irving, TX 14100 San Pedro San Antonio, TX UTAH 175 East 400 South Street Salt Lake City, UT VERMONT 199 Main Street Burlington, VT VIRGINIA 8300 Boone Boulevard Vienna, VA WASHINGTON 411 108th Avenue, N.E. Bellevue, WA 1001 Fourth Avenue Seattle, WA WASHINGTON, DC 1775 K Street, N.W. Washington, DC WISCONSIN 222 East Wisconsin Avenue Milwaukee, WI INVESTMENT ADVISER Fidelity Management & Research Company Boston, MA OFFICERS Edward C. Johnson 3d, President J. Gary Burkhead, Senior Vice President Will Danoff, Vice President Gary L. French, Treasurer John H. Costello, Assistant Treasurer Arthur S. Loring, Secretary Robert H. Morrison, Manager, Security Transactions BOARD OF TRUSTEES J. Gary Burkhead Ralph F. Cox* Phyllis Burke Davis* Richard J. Flynn* Edward C. Johnson 3d E. Bradley Jones* Donald J. Kirk* Peter S. Lynch Edward H. Malone* Marvin L. Mann * Gerald C. McDonough* Thomas R. Williams* GENERAL DISTRIBUTOR Fidelity Distributors Corporation Boston, MA TRANSFER AND SHAREHOLDER SERVICING AGENT Fidelity Service Co. Boston, MA CUSTODIAN Brown Brothers Harriman & Co. Boston, MA FIDELITY GROWTH FUNDS Blue Chip Growth Fund Capital Appreciation Fund Contrafund Disciplined Equity Fund Dividend Growth Fund Emerging Growth Fund Fidelity Fifty Fund Growth Company Fund Low-Priced Stock Fund Magellan(Registered trademark) Fund New Millennium Fund OTC Portfolio Retirement Growth Fund Small Cap Stock Fund Stock Selector Trend Fund Value Fund THE FIDELITY TELEPHONE CONNECTION MUTUAL FUND 24-HOUR SERVICE Account Balances 1-800-544-7544 Exchanges/Redemptions 1-800-544-7777 Mutual Fund Quotes 1-800-544-8544 Account Assistance 1-800-544-6666 Product Information 1-800-544-8888 Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.) TDD Service 1-800-544-0118 for the deaf and hearing impaired (9 a.m. - 9 p.m. Eastern time) * INDEPENDENT TRUSTEES AUTOMATED LINES FOR QUICKEST SERVICE -----END PRIVACY-ENHANCED MESSAGE-----