-----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, iET3kMrK2zf1bvUzw0wBOhTDERDH6f6eDK0U6ts3rnDudvfm7QOLwg1w2viIbREP QdZLUdxL1yfM254pNUQoqA== 0000354046-94-000045.txt : 19940610 0000354046-94-000045.hdr.sgml : 19940610 ACCESSION NUMBER: 0000354046-94-000045 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940607 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIDELITY CHARLES STREET TRUST CENTRAL INDEX KEY: 0000354046 STANDARD INDUSTRIAL CLASSIFICATION: 0000 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: 1940 Act SEC FILE NUMBER: 811-03221 FILM NUMBER: 94533184 BUSINESS ADDRESS: STREET 1: 82 DEVONSHIRE ST CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 2145064081 MAIL ADDRESS: STREET 1: 82 DEVONSHIRE STREET STREET 2: MAIL ZONE ZH-1 CITY: BOSTON STATE: MA ZIP: 02109 FORMER COMPANY: FORMER CONFORMED NAME: FIDELITY U S GOVERNMENT RESERVES FUND DATE OF NAME CHANGE: 19880201 FORMER COMPANY: FORMER CONFORMED NAME: FIDELITY FEDERAL RESERVES DATE OF NAME CHANGE: 19820215 FORMER COMPANY: FORMER CONFORMED NAME: FIDELITY UNITED STATES TREASURY TRUST DATE OF NAME CHANGE: 19811020 N-30B-2 1 (2_FIDELITY_LOGOS)FIDELITY ASSET MANAGER(Registered trademark) SEMIANNUAL REPORT MARCH 31, 1994 CONTENTS PRESIDENT'S MESSAGE 3 Ned Johnson on investing strategies. PERFORMANCE 4 How the fund has done over time. MARKET RECAP 6 An overview of the market's performance and the factors driving it. FUND TALK 7 The manager's review of fund performance, strategy, and outlook. INVESTMENT CHANGES 11 A summary of major shifts in the fund's investments over the last six months. INVESTMENTS 12 A complete list of the fund's investments with their market value. FINANCIAL STATEMENTS 68 Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. NOTES 72 Footnotes to the financial statements. REPORT OF INDEPENDENT 77 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: The first few months of 1994 were an unsettling time for many investors. After three years of almost consistently strong market conditions, stock and bond prices fell in March. Investors disagree about whether these declines represent only short-term corrections or signal the beginning of longer market downturns. One can collect statistics to support either opinion, but of course, nobody knows for sure what will happen in the months ahead. We do know, however, that market declines are a normal part of investing. That's why I thought this might be a good time to review three basic investment principals that have proven helpful to successful investors in every market cycle. First, take a long-term perspective. If you can afford to leave your money invested throughout the inevitable ups and downs of the markets, you'll greatly reduce your vulnerability to any single decline. Second, you can further manage risk by diversifying your investments. The Asset Manager funds are already diversified because they invest in stocks, bonds, and cash equivalents, both here and abroad. You can increase your diversification by investing in a number of different stock funds, or in different investment categories, such as bonds. But you should always keep any money you'll need in the near future in a stable investment, such as a money market fund. Finally, it makes good sense to follow a regular investment plan, investing a set amount of money at the same time each month or quarter. That way, you can avoid getting caught up in the excitement of a rapidly-rising market - and won't end up buying all your shares at market highs. This strategy won't protect you from a loss in continuously declining markets, but it should help you lower the cost of your purchases. If you have questions, please call us at 1-800-544-8888. We would be happy to send you a Fidelity FundMatch kit, which can help you determine the mix of investments that is right for you. You might also find it convenient to set up a regular investment plan using the Fidelity Automatic Account Builder. We look forward to hearing from you. Best regards, Edward C. Johnson 3d PERFORMANCE: THE BOTTOM LINE There are several ways to evaluate a fund's historical performance. You can look at the total percentage 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 MARCH 31, 1994 PAST 6 PAST 1 PAST 5 LIFE OF MONTHS YEAR YEARS FUND Asset Manager 1.98% 10.53% 92.72% 99.27% S&P 500(Registered trademark) -1.55% 1.47% 77.23% 90.46% Average Flexible Portfolio Fund -1.35% 4.00% 65.95% n/a Consumer Price Index 1.45% 2.51% 20.36% 22.16% CUMULATIVE TOTAL RETURNS reflect the fund's actual performance over a set period - in this case, six months, one year, five years or since the fund began on December 28, 1988. For example, if you invested $1,000 in a fund that had a 5% return over one year you would end up with $1,050. You can compare the fund's returns to those of the S&P 500 - a common proxy for the U.S. stock market. You can also compare them to the average flexible portfolio fund, which currently reflects the performance of 114 funds tracked by Lipper Analytical Services. Both benchmarks include reinvested dividends and capital gains, if any, and exclude the effect of sales charges. Comparing the fund's performance to the consumer price index helps show how your investment did compared to inflation. (The periods covered by the CPI numbers are the closest available match to those covered by the fund.) AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDED MARCH 31, 1994 PAST 1 PAST 5 LIFE OF YEAR YEARS FUND Asset Manager 10.53% 14.02% 14.01% S&P 500 1.47% 12.13% 13.03% Average Flexible Portfolio Fund 4.00% 10.58% n/a Consumer Price Index 2.51% 3.78% 3.88% 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 LIFE OF FUND Fidelity Asset Standard & PoorFidelity Compos 12/31/88 10000.00 10000.00 10000.00 01/31/89 10378.86 10732.00 10291.60 02/28/89 10219.34 10464.77 10200.52 03/31/89 10309.07 10708.60 10320.38 04/30/89 10578.27 11264.38 10593.04 05/31/89 10887.34 11720.59 10846.43 06/30/89 11006.98 11653.78 10999.47 07/31/89 11326.02 12706.12 11415.14 08/31/89 11355.93 12955.15 11426.55 09/30/89 11355.93 12902.04 11453.98 10/31/89 11405.78 12602.71 11519.49 11/30/89 11485.54 12859.81 11656.69 12/31/89 11527.70 13168.44 11771.16 01/31/90 11158.89 12284.84 11487.36 02/28/90 11243.19 12443.31 11560.76 03/31/90 11359.10 12773.06 11674.52 04/30/90 11169.43 12453.74 11566.76 05/31/90 11759.52 13667.97 12058.70 06/30/90 11854.35 13575.03 12133.82 07/31/90 11843.81 13531.59 12207.84 08/31/90 11443.40 12308.34 11830.25 09/30/90 11211.58 11708.92 11724.49 10/31/90 11243.19 11658.57 11808.55 11/30/90 11780.59 12411.72 12162.69 12/31/90 12147.79 12758.00 12361.92 01/31/91 12795.97 13314.25 12597.66 02/28/91 13354.75 14266.22 12913.10 03/31/91 13578.26 14611.46 13053.34 04/30/91 13790.59 14646.53 13138.97 05/31/91 14137.03 15279.26 13347.62 06/30/91 13835.29 14579.47 13174.63 07/31/91 14204.09 15258.87 13439.44 08/31/91 14528.18 15620.51 13678.66 09/30/91 14550.53 15359.65 13743.64 10/31/91 14662.28 15565.47 13865.96 11/30/91 14405.25 14938.18 13770.42 12/31/91 15019.77 16647.11 14448.89 01/31/92 15236.75 16337.47 14290.96 02/29/92 15526.05 16549.86 14382.28 03/31/92 15526.05 16227.13 14278.30 04/30/92 15743.03 16704.21 14453.92 05/31/92 15899.74 16786.06 14595.86 06/30/92 15899.74 16535.95 14602.28 07/31/92 16225.21 17212.27 14998.88 08/31/92 16152.88 16859.42 14941.28 09/30/92 16273.43 17058.36 15106.53 10/31/92 16249.32 17118.06 15046.41 11/30/92 16610.95 17701.79 15247.13 12/31/92 16934.15 17919.52 15434.06 01/31/93 17225.46 18070.05 15626.98 02/28/93 17402.78 18315.80 15844.82 03/31/93 17975.72 18702.26 16007.39 04/30/93 18052.43 18249.67 15910.07 05/31/93 18435.98 18738.76 16080.94 06/30/93 18668.09 18793.10 16251.72 07/31/93 18951.92 18717.93 16272.52 08/31/93 19493.77 19427.34 16672.83 09/30/93 19481.55 19277.75 16655.82 10/31/93 20054.16 19676.80 16827.04 11/30/93 20015.12 19489.87 16697.47 12/31/93 20877.86 19725.69 16813.02 01/31/94 21555.71 20396.37 17143.23 02/28/94 20877.86 19841.59 16817.51 03/31/94 19867.87 18976.49 16382.94 $10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity Asset Manager on December 31, 1988, shortly after the fund started. As the chart shows, by March 31, 1994, the value of your investment would have grown to $19,868 - a 98.68% 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 $18,978 - an 89.78% increase. You can also look at how the Asset Allocation Composite Index, a hypothetical combination of unmanaged indices, did over the same period. Reflecting the fund's neutral mix of 40% stocks, 40% bonds, and 20% short-term instruments, this index combines returns from the S&P 500 (89.78%), Lehman Brothers Treasury Bond Index (64.81%), and the Salomon Brothers 3-month T-Bill Total Rate of Return Index (33.42%). With dividends and interest, if any, reinvested, a $10,000 investment in the index would have grown to $16,384 - a 63.84% 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) MARKET RECAP A sharp correction in many of the world's stock and bond markets in early 1994 dampened returns for investors over the six months ended March 31, 1994. STOCKS: The Standard & Poor's 500 stock index - a broad measure of the U.S. market's overall performance - finished the six-month period with a total return of -1.55%. U.S. stocks performed well through January 1994, boosted by a strengthening economy, low interest rates, and low inflation. However, stocks tumbled in February and March after the Federal Reserve Board raised short-term interest rates for the first time in five years. Continued poor performance from consumer non-durable stocks - including those of most consumer products, retail, tobacco, and drug companies - dragged down the index. Market leaders included technology stocks and cyclicals - stocks in categories such as autos, heavy machinery, and precious metals that are especially sensitive to changes in the economy. Cyclicals boosted the Dow Jones Industrial Average, which returned 3.63%. However, the NASDAQ Composite Index - which tracks over-the-counter stocks - - - fell 2.53%. Although many foreign markets also suffered corrections in the first quarter of 1994, the Morgan Stanley EAFE (Europe, Australia, Far East) index rose 4.39% during the six months ended March 31. In most emerging markets, strong gains in late 1993 helped offset downturns in early 1994. The Morgan Stanley Emerging Markets Index was up 20.61% for the six month period. BONDS: Falling interest rates continued to push up U.S. bond prices through mid-October 1993, when the yield on the benchmark 30-year Treasury bond reached a historic low of 5.79%. Yields then moved within a narrow range until early February 1994, when the Federal Reserve Board raised the federal funds rate - the rate banks charge each other for overnight loans - from 3.00% to 3.25%. That rate hike, and another in March, ignited heavy selling in the U.S. bond market through the end of the period, as investors feared a stronger economy might lead to higher inflation. As yields rose sharply - the 30-year Treasury was yielding 7.18% by March 31 - prices fell. For the six months ended March 31, the Lehman Brothers long-term Treasury index had a total return (yield plus price change) of -7.57%. A broader measure of the U.S. bond market, the Lehman Brothers Aggregate Bond Index, returned -2.81% during the period. The negative effects of rising interest rates on high-yield bonds were somewhat offset by improvements in their credit quality due to the strengthening economy. The Salomon Brothers Composite High Yield Index rose 1.06%. Worldwide, the falling U.S. bond market helped trigger a correction in most foreign markets. In addition, heavy selling by leveraged hedge funds - aggressively managed private partnerships - helped fuel falling prices. The J.P. Morgan Emerging Market Bond Index had a total return of -7.27% for the six-month period. FUND TALK: THE MANAGER'S OVERVIEW An interview with Bob Beckwitt, Portfolio Manager of Fidelity Asset Manager Q. BOB, HOW HAS THE FUND PERFORMED RECENTLY? A. Better than its peers. That said, the investment climate was such that Asset Manager's absolute performance probably disappointed many investors. For the six months ended March 31, 1994, the fund's total return was 1.98%. This compares to a loss of 1.35% for the average flexible portfolio fund, according to Lipper Analytical Services. Over the last 12 months, Asset Manager's total return was 10.53%, compared to an average of 4.00% for all funds in that Lipper group. Q. THAT'S WELL BELOW ASSET MANAGER'S AVERAGE ANNUAL RETURN OF 14.01% OVER THE LIFE OF THE FUND. WHAT HAPPENED? A. To better understand, it may help to review Asset Manager's investment strategy. It has two parts. First, I search both inside and outside the United States for asset classes that have the potential for attractive intermediate and long-term returns. (By asset classes I mean mainly stocks, bonds and cash equivalents.) Second, once I've chosen the asset classes, I try to diversify among them. The fund's goal has two parts as well: solid returns, but with less risk than if I were to put all the fund's eggs in one basket. Until recently, the strategy helped the fund achieve both goals. Lately, though, it has failed to protect the fund against losses because neither stocks nor bonds have performed well. Q. DOES THAT MEAN THE FUND'S STRATEGY IS FLAWED? A. No, I still believe strongly in the long-term benefits of diversification. The theory is simply that when you invest in many different things, some zig while others zag, and the fund as a whole benefits. Of course, part of the strategy involves making gradual adjustments to the fund's mix as conditions change. At the end of March, for example, Asset Manager was 43% invested in stocks, compared with 51% six months ago. It was 37% in bonds, compared with 33% six months ago; and 20% in cash and short-term investments, compared with 16% six months ago. Unfortunately, no amount of tinkering would have helped much during the first quarter of 1994, when nearly every asset class in the world went in one direction, and that was down. Losses ranged from approximately 5% for the average U.S. stock to 25% for stocks traded on the Hong Kong exchange; and from 4% for U.S. bonds to 20% for emerging market bonds. Practically the only investors who didn't lose money after January were those who put everything they had in cash. Q. WHAT HURT THE FUND MOST? A. Bonds did, especially the fund's 15% stake in emerging markets. It's important to remember that on the whole, bonds issued in Latin America contributed greatly to the fund's performance over the last several years. But when U.S. interest rates shot up in early February and bond prices fell, emerging markets suffered disproportionately. That was mostly because emerging markets are smaller than the U.S. market, and tend to be more volatile. Political and economic uncertainty in Mexico contributed as well. Q. DID EUROPEAN BONDS FARE ANY BETTER? A. Just a little bit. I had thought bonds would rally in Europe, where inflation seemed less worrisome than in the United States and economic growth was not so robust. European bonds averaged 7% of the fund during the period. As it turns out, my analysis was probably correct. However, when the Federal Reserve raised short-term interest rates at home and the cost of financing went up, large investors who had borrowed heavily to finance investments in European bonds began selling, and markets plunged. Since European markets are smaller than the U.S. market, they tend to be more volatile. Q. DERIVATIVES HAVE BEEN IN THE NEWS A LOT LATELY. WHAT ARE DERIVATIVES AND WHY DOES THE FUND OWN THEM? A. There are many kinds of derivatives, but most of those I invested in are indexed securities, or structured notes. These types of derivatives are like customized bonds. They allow me to take advantage of potential opportunities I might otherwise miss. For example, in Europe, short-term interest rates fell much faster through January than long-term rates. Because bond prices and interest rates move in opposite directions, one way to profit from that scenario would have been to buy short-term European bonds. But short-term bonds are not very volatile, and the potential return would have been small. Instead I tried to enhance the fund's return by investing in structured notes that were as volatile as long-term bonds, but whose prices varied depending on what happened with short-term interest rates. About 8% of the fund was in structured notes on March 31, 1994. Q. ARE DERIVATIVES RISKY? A. Sure they are, especially if you don't know how to use them. However, from our perspective there are two kinds of risk associated with the fund's use of derivatives: market risk - Fidelity's market forecast could be wrong; and credit risk - the issuer could go bankrupt and fail to hold up its end of the bargain. These are basically the same risks Fidelity fund managers assume with nearly every investment they make. Q. DID DERIVATIVES HELP OR HURT THE FUND DURING THE LAST SIX MONTHS? A. Neither. The performance of most of the derivatives I used was tied to the performance of various underlying assets, allowing me to isolate specific opportunities within assets classes. As I indicated, derivatives tied to short-term interest rates in Europe were strong performers through January, and poor performers after that. On the other hand, as inflationary pressures have increased, derivatives tied to commodity prices have performed very well. The fund invested about the same amount in both kinds of derivatives, and the net effect on performance was a small negative. Q. HAS THE RECENT TURMOIL IN MEXICO CHANGED YOUR THINKING ABOUT THAT COUNTRY'S INVESTMENT POTENTIAL? A. No. I've had long-standing investments in Mexico - first, in short-term bonds denominated in pesos, then, in longer-term bonds denominated in U.S. dollars and, since the middle of last year, in stocks. Mexican investments totaled 13.9% of the fund at the end of March. I had increased the fund's stake in Mexico last summer in anticipation of passage of the North American Free Trade Agreement, and the fund benefited as a result. Unfortunately, the January revolt in Chipas and the March assassination of Mexico's leading presidential candidate upset the markets, and the fund gave back about half of its recent gains. However, I still believe in Mexico's long-term prospects for economic reform. NAFTA's passage was a seminal event, and its importance should not be underestimated. Despite the short-term uncertainty in Mexico, I believe its long-term potential remains high. Unless conditions worsen, I plan on staying invested. Q. WHAT LED YOU TO REDUCE THE FUND'S TOTAL INVESTMENTS IN STOCKS? A. Two things. First, stocks as an asset class were expensive when the period started, and became more so during the last three months of 1993 and the first month of 1994. And second, as interest rates have risen and bond prices have fallen, bonds have begun to look more attractive by comparison. Nevertheless, I've preserved large investments in stocks, concentrating domestically in the technology and finance sectors. Among the fund's largest holdings throughout the period were companies that stand to profit from increased capital investment, including Intel, Compaq and Motorola. That's a trend I've been betting on for a couple of years. Foreign stocks made up more than 13% of the fund at the end of March, led by British Petroleum, whose outlook has improved thanks to aggressive cost-cutting. Q. WHAT'S AHEAD FOR THE FUND? A. I think it depends on how far ahead you're willing to look. Over the short term - meaning the next few months or so - we could well see further drops in world markets. That shouldn't surprise anyone, given the almost uninterrupted gains we've enjoyed since 1990. But over the next one to three years, I think the picture should brighten. I still believe in the long-term potential of countries in Latin America and Southeast Asia whose economies are growing roughly twice as fast as those of the United States, Europe and Japan. That bodes well for emerging market stocks, of course, as company earnings grow; but also for bonds, as these countries improve their ability to pay off debt. European bonds remain attractive for another reason: growth on the continent is slow, unemployment is high, and therefore inflationary pressures are minimal. I still think European interest rates will fall, although perhaps not as fast as expected. Overall, in terms of asset allocation, the fund is in a neutral mode for now, with more cash and fewer stocks than at any time during the past two years. FUND FACTS GOAL: high total return with reduced risk over the long term by allocating assets among stocks, bonds, and short-term instruments anywhere in the world START DATE: December 28, 1988 SIZE: as of March 31, 1994, over $10 billion MANAGER: Robert Beckwitt, since December 1988; Fidelity Asset Manager: Growth, since 1991; Fidelity Asset Manager: Income, since 1991 (checkmark) BOB BECKWITT ON INVESTING AND RISK: "I think anyone who is worried about the recent performance of the fund should try to answer one simple question: `What is your investment horizon?' If it's less than four years, then Asset Manager may not be the right investment for you. As an alternative, you might want to consider a more conservative fund like Asset Manager: Income, or maybe even a money market fund. Asset Manager is not designed for investors unwilling to accept short-term losses." (bullet) The fund's neutral mix is 40% stocks, 40% bonds and 20% cash and short-term investments. At the end of the period, the fund was positioned very close to that mix, with 43% in stocks, 37% in bonds and 20% in cash and short-term investments. Foreign investments totaled 36%. For holdings by country, see page 67. (bullet) So-called junk bonds - those with credit ratings of BB or lower - made up 11.6% of the fund at the end of March. Over the last several months, they've proven less vulnerable to rising interest rates than domestic investment-grade bonds. INVESTMENT CHANGES TOP FIVE STOCKS AS OF MARCH 31, 1994 % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE STOCKS 6 MONTHS AGO Federal National Mortgage Association 0.9 0.8 Intel Corp. 0.9 0.4 British Petroleum PLC ADR 0.8 0.4 Compaq Computer Corp. 0.7 0.6 Philip Morris Companies, Inc. 0.6 0.0 TOP FIVE FIXED-INCOME SECURITIES AS OF MARCH 31, 1994
(BY ISSUER, EXCLUDING REPURCHASE AGREEMENTS) % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE SECURITIES 6 MONTHS AGO Mexican Government (various issues) 5.9 6.6 Danish Government (various issues) 4.3 4.2 Goldman Sachs Group L.P. (various 4.2 0.9 issues) Argentina Republic (various issues) 2.6 2.8 French Government 2.4 2.9
TOP FIVE COUNTRIES AS OF MARCH 31, 1994 (BY LOCATION OF ISSUER) % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE COUNTRIES 6 MONTHS AGO United States 63.6 52.7 Mexico 13.9 14.3 Denmark 4.3 4.3 Argentina 3.6 3.6 France 2.8 6.1 ASSET ALLOCATION AS OF MARCH 31, 1994 * AS OF SEPTEMBER 30, 1993** Row: 1, Col: 1, Value: 20.0 Row: 1, Col: 2, Value: 37.0 Row: 1, Col: 3, Value: 43.0 Row: 1, Col: 1, Value: 16.0 Row: 1, Col: 2, Value: 33.0 Row: 1, Col: 3, Value: 51.0 Stock class 43% Bond class 37% Short-term class and other 20% * FOREIGN INVESTMENTS 36% Stock class 51% Bond class 33% Short-term class and other 16% ** FOREIGN INVESTMENTS 47% ASSET ALLOCATIONS IN THE PIE CHART REFLECT THE CATEGORIZATION OF ASSETS DEFINED IN THE FUND'S PROSPECTUS. FINANCIAL STATEMENT CATEGORIZATIONS CONFORM TO ACCOUNTING STANDARDS AND WILL DIFFER FROM THE PIE CHART. INVESTMENTS MARCH 31, 1994 Showing Percentage of Total Value of Investment in Securities COMMON STOCKS - 41.2% VALUE (NOTE 1) SHARES (000S) AEROSPACE & DEFENSE - 0.4% AEROSPACE & DEFENSE - 0.2% Aviall, Inc. (a) 3,850 $ 58 05366B10 Boeing Co. 21,700 974 09702310 Flightsafety International, Inc. 164,900 6,142 33942310 Martin Marietta Corp. 76,900 3,384 57290010 McDonnell Douglas Corp. 10,100 1,087 58016910 Oerlikon-Buhrle Holding Ltd. (Reg.) (a) 28,600 3,118 67199092 Rolls Royce Ltd. Ord. 1,317,013 3,546 77577910 Samsung Aerospace Industries (a) 19,100 715 80399C22 Sundstrand Corp. 12,200 550 86732310 Thiokol Corp. 6,200 164 88410310 Wyman-Gordon Co. (a) 5,500 27 98308510 19,765 DEFENSE ELECTRONICS - 0.2% E-Systems, Inc. 32,400 1,418 26915730 Litton Industries, Inc. (a) 165,100 5,056 53802110 Loral Corp. 185,500 6,956 54385910 Raytheon Co. 146,700 9,481 75511110 Watkins-Johnson Co. 31,500 791 94248610 23,702 TOTAL AEROSPACE & DEFENSE 43,467 BASIC INDUSTRIES - 2.6% CHEMICALS & PLASTICS - 1.0% Airgas, Inc. (a) 357,000 7,631 00936310 Akzo NV Ord. 47,400 5,469 01019910 Albemarle Corp. (a) 281,800 4,156 01265310 Bayer AG 20,500 4,573 07273010 Betz Laboratories, Inc. 9,900 497 08777910 Dongsung Chemical Industry Co. (a) 25,035 688 25799V22 du Pont (E.I.) de Nemours & Co. 36,200 1,919 26353410 Ferro Corp. 60,000 1,860 31540510 GEON 65,200 1,720 37246W10 Georgia Gulf Corp. (a) 90,300 2,291 37320020 Grace (W.R.) & Co. 340,400 14,042 38388310 Great Lakes Chemical Corp. 20,000 1,410 39056810 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) BASIC INDUSTRIES - CONTINUED CHEMICALS & PLASTICS - CONTINUED Han Wha (a) 12,600 $ 167 40999B22 Hanna (M.A.) Co. 7,600 275 41052210 Hanyang Chemical Corp. (a) 18,900 198 41199E22 Hercules, Inc. 10,800 1,239 42705610 Hoechst AG Ord. 21,300 4,121 43439010 IMC Fertilizer Group, Inc. (a) 55,800 2,204 44966910 Imperial Chemical Industries PLC: ADR 72,500 3,326 45270450 Ord. 195,824 2,295 45270440 Indo Gulf Fertilizer and Chemicals GDR (g) 780,600 2,888 45577P10 Lucky Co. Ltd. (a) 267,880 5,144 54999E22 Lyondell Petrochemical Co. 96,800 2,118 55207810 Monsanto Co. 34,700 2,698 61166210 Nalco Chemical Co. 179,200 6,115 62985310 OM Group, Inc. (a) 50,000 1,044 67087210 Oriental Chemical Industry Co. (a) 93,261 2,750 68999C22 Perez Company Class B (a) 1,657,800 10,312 71399723 Potash Corp. of Saskatchewan 5,800 146 73755L10 Reliance Industries Ltd. GDR (g) 98,800 1,877 75947010 Shinetsu Chemical 156,000 2,918 82499210 Union Carbide Corp. 255,200 5,742 90558110 Vigoro Corp. 67,200 2,066 92675410 Witco Corp. 62,700 1,944 97738510 107,843 IRON & STEEL - 0.5% Allegheny Ludlum Industries, Inc. 84,100 1,556 01690010 Birmingham Steel Corp. 12,500 356 09125010 British Steel PLC: ADR 138,500 2,822 11101530 Ord. 6,850,854 14,381 11101510 Chaparral Steel Company 28,300 315 15942210 Compania Siderurgica Nacional (m) 145,200 4,770 24499523 Dongkuk Steel Mill Co. (a) 6,300 205 25799S22 Geneva Steel Co. (warrants) (a) 106,125 1,008 37225212 Hyundai Pipe Co. Ltd. (a) 88,150 1,474 42399D22 Inland Steel Industries, Inc. (a) 158,300 4,769 45747210 LTV Corp. (a) 440,600 6,609 50192110 Nucor Corp. 45,200 2,740 67034610 Oregon Steel Mills, Inc. 11,000 253 68607910 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) BASIC INDUSTRIES - CONTINUED IRON & STEEL - CONTINUED Steel of West Virginia, Inc. (a) 82,200 $ 1,017 85815410 Thyssen AG Ord. 29,200 4,639 88629110 USX-U.S. Steel Group 246,700 9,159 90337T10 56,073 METALS & MINING - 0.6% Alcan Aluminium Ltd. 532,400 11,784 01371610 Alumax, Inc. (a) 143,450 3,461 02219710 Aluminum Co. of America 34,300 2,457 02224910 Castle AM & Co. 8,000 152 14841110 Cyprus Amax Minerals Co. 26,550 767 23280910 Dae Chang Industrial Co. (a) 26,460 619 23399M22 De Beers Consolidated Mines Ltd. ADR 129,900 2,712 24025330 Hindalco Industries Ltd. GDR (a)(g) 46,500 1,081 43306410 Iljin Corp. (a) 29,560 893 45199E22 Korea Tungsten Mining Co. (a) 39,850 1,491 50599S22 Noranda, Inc. 744,300 13,448 65542210 Poong San Corp. 59,250 1,064 73299522 RTZ Corp. PLC Ord. (a) 328,258 3,998 74974K50 Reynolds Metals Co. 325,300 14,923 76176310 Sam Sun Industry (a) 15,100 138 81799G22 58,988 PACKAGING & CONTAINERS - 0.1% Carnaudmetalbox SA 44,700 1,494 20999092 Owens-Illinois, Inc. (a) 624,800 6,951 69076840 8,445 PAPER & FOREST PRODUCTS - 0.4% Boise Cascade Corp. 26,100 594 09738310 Bowater, Inc. 131,000 2,800 10218310 Champion International Corp. 85,000 2,465 15852510 Chesapeake Corp. 35,200 805 16515910 Eagon Industrial Co. Ltd. (a) 17,250 412 27099922 Georgia-Pacific Corp. 1,900 122 37329810 International Paper Co. 55,800 3,801 46014610 Kimberly Clark de Mexico Class A 874,500 15,496 49499392 Repola OY 113,600 1,928 75999A92 Stone Consolidated Corp. (a) 150,000 1,870 86158K10 Stone Container Corp. (a) 149,900 1,986 86158910 Sung Chang Enterprise Co. (a) 16,150 1,106 82699B22 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) BASIC INDUSTRIES - CONTINUED PAPER & FOREST PRODUCTS - CONTINUED Temple-Inland, Inc. 65,000 $ 2,974 87986810 Weyerhaeuser Co. 55,000 2,379 96216610 Willamette Industries, Inc. 25,000 1,188 96913310 39,926 TOTAL BASIC INDUSTRIES 271,275 CONGLOMERATES - 0.6% Alexander & Baldwin, Inc. 91,200 2,303 01448210 Allied-Signal, Inc. 35,800 1,311 01951210 Canadian Pacific Ltd. Ord. 2,122,100 33,358 13644030 Crane Co. 12,500 313 22439910 Dial Corp. (The) 131,200 5,478 25247010 ITT Corp. 25,000 2,144 45067910 Mark IV Industries, Inc. 75,311 1,384 57038710 Suncor, Inc. 329,000 7,252 86722910 Textron, Inc. 64,800 3,499 88320310 Tomkins PLC Ord. 299,300 1,083 89003010 Tyco Laboratories, Inc. 12,500 623 90212010 United Technologies Corp. 50,900 3,162 91301710 61,910 CONSTRUCTION & REAL ESTATE - 1.5% BUILDING MATERIALS - 0.9% Adience, Inc. (a) 251,838 252 00690510 Armstrong World Industries, Inc. 271,600 14,666 04247610 Cementos Apasco SA de CV Class A (a) 1,503,300 11,954 15299392 Cemex SA: Series A (Reg.) (a) 91,300 2,151 15299292 Series B 1,249,700 30,295 15299293 Chosun Refractories Co. (a) 8,480 272 28099322 Florida Rock Industries, Inc. 57,200 1,473 34114010 Holderbank Financiere AG PC (Bearer) 5,084 3,383 43479593 Lafarge Corp. 118,000 2,537 50586210 Lilly Industrial Coatings, Inc. Class A 25,000 628 53249110 Medusa Corp. 49,650 1,378 58507230 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) CONSTRUCTION & REAL ESTATE - CONTINUED BUILDING MATERIALS - CONTINUED National Gypsum Co. (a) 40,000 $ 1,840 63631710 Tecumseh Products Co. Class A 114,000 5,515 87889520 Texas Industries, Inc. 45,400 1,708 88249110 Tolmex SA (a) 1,822,300 22,956 94399492 101,008 CONSTRUCTION - 0.3% Bufete Industrial SA sponsored ADR (a) 133,600 4,542 11942H10 Centex Corp. 110,390 3,408 15231210 DR Horton, Inc. (a) 111,810 1,565 23331A10 Daelim Industrial Co. 140,040 2,516 23699F22 Dongbu Construction Co. 9,400 165 25799M22 Grupo Mexicano de Desarrollo ADR: Class B (a) 29,800 499 40048G10 Class L (a) 120,700 2,067 40048G20 Lennar Corp. 63,000 1,953 52605710 Lucky Development Co. Ltd. (a) 14,990 314 54999822 NCI Building Systems, Inc. (a) 75,000 1,256 62885210 Pulte Corp. 186,000 5,394 74586710 Samsung Construction Co. Ltd. 6,952 256 90499J22 Schuler Homes, Inc. (a) 78,600 2,103 80818810 Standard Pacific Corp. 144,300 1,209 85375C10 Toll Brothers, Inc. (a) 25,000 347 88947810 27,594 ENGINEERING - 0.1% EG&G, Inc. 117,700 1,927 26845710 Foster Wheeler Corp. 12,500 500 35024410 Glenayre Technologies, Inc. 12,500 463 37789910 Hanil Development Co. 116,122 2,288 41099822 Hyundai Engineering & Construction Co. Ltd. 44,000 1,870 41599122 Kyonghyang Construction Co. (a) 18,900 318 74799J22 Stone & Webster, Inc. 23,200 696 86157210 8,062 REAL ESTATE - 0.0% Fondo Opcion SA de CV Class 2, Series B (a) 592,600 1,477 34499892 Hwa Sung Industrial Co. (a) 16,500 675 44899G22 Immeubles de France, Ste Des (a) 21,600 2,331 44999C22 Mundicenter Societe Imobile SA 49,700 1,460 62699592 5,943 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) CONSTRUCTION & REAL ESTATE - CONTINUED REAL ESTATE INVESTMENT TRUSTS - 0.2% Crown American Realty Trust (SBI) 134,000 $ 1,843 22818610 Developers Diversified Realty 161,000 5,011 25159110 Equity Residential Property Trust (SBI) 12,500 376 29476L10 Federal Realty Investment Trust (SBI) 50,000 1,231 31374720 General Growth Properties, Inc. 15,000 309 37002110 Health Care Property Investors, Inc. 8,500 259 42191510 Kimco Realty Corporation 50,000 1,794 49446R10 Lend Lease Corp. Ltd. 125,600 1,502 52599292 McArthur/Glen Realty Corp. (a) 50,000 1,225 57918810 Merry Land & Investment Co., Inc. 80,000 1,680 59043810 Simon Properties Group, Inc. (a) 112,500 2,883 82880510 Vornado Realty Trust 42,900 1,502 92904210 19,615 TOTAL CONSTRUCTION & REAL ESTATE 162,222 DURABLES - 2.3% AUTOS, TIRES, & ACCESSORIES - 1.3% Asia Motors Co., Inc. 70,584 1,242 04499B22 Brilliance China Auto Holding Ltd. (a) 7,500 88 10999592 Chrysler Corp. 488,004 25,193 17119610 Cooper Tire & Rubber Co. 107,200 2,734 21683110 Discount Auto Parts, Inc. 155,500 3,751 25464210 Ford Motor Co. 116,900 6,868 34537010 General Motors Corp. 716,400 38,686 37044210 General Motors Corp. Class E 38,300 1,312 37044240 Genuine Parts Company 40,000 1,400 37246010 Goodyear Tire & Rubber Co. 58,900 2,385 38255010 Heung-ah Tire & Rubber Co. (a) 8,060 186 42899D22 Hyundai Motor Service Co. (a) 5,020 310 42199422 Johnson Controls, Inc. 52,200 2,871 47836610 Kia Precision Works Co. (a) 59,374 1,258 48599K22 Lonrho Ltd. Ord. 3,251,144 7,066 54337410 Magna International, Inc. Class A 6,800 319 55922240 NACCO Industries, Inc. Class A 26,800 1,353 62957910 Pirelli Tyre Holdings NV Ord. (a) 323,600 2,359 72499092 Raymond Corp. (The) (a) 71,190 1,228 75468810 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) DURABLES - CONTINUED AUTOS, TIRES, & ACCESSORIES - CONTINUED Smith (A.O.) Corp.: Class A 3,500 $ 113 83186510 Class B 173,200 5,586 83186520 Snap-on Tools Corp. 52,500 2,100 83303410 Standard Products Co. 58,100 1,895 85383610 Suzuki Motor Corp. 519,000 6,320 86958592 Tofas Turk Otomobil ADR (g) 161,000 1,530 90011010 Toyota Motor Corporation 772,000 14,816 89399999 Vickers PLC Ord. 1,601,700 4,253 92549310 137,222 CONSUMER ELECTRONICS - 0.4% Aktiebolaget Electrolux 92,100 4,235 01019810 Fedders USA, Inc. 120,900 937 31313510 Fossil, Inc. 21,000 405 34988210 Harman International Industries, Inc. (a) 215,000 5,966 41308610 Jeewon Industrial Co. (a) 12,600 309 47299G22 Jeewon Industrial Co. (New) 3,599 80 47299G24 Matsushita Electric Industrial Co. Ltd. 862,000 14,276 57687910 Newell Co. 79,500 3,120 65119210 Sony Corp. 222,800 12,697 83569999 Universal Electronics, Inc. (a) 15,400 112 91348310 Videocon International Ltd. GDR 91,800 780 92657P93 Whirlpool Corp. 31,600 1,920 96332010 44,837 HOME FURNISHINGS - 0.2% HON Industries, Inc. 8,100 269 43809210 Heilig-Meyers Co. 10,200 316 42289310 LADD Furniture, Inc. 460,600 4,030 50573910 Leggett & Platt, Inc. 137,400 6,011 52466010 MFI Furniture Group PLC 408,200 968 55299392 Miller (Herman), Inc. 423,800 11,655 60054410 Rowe Furniture Corp. 95,000 1,378 77952810 24,627 TEXTILES & APPAREL - 0.4% Arvind Mills Ltd. GDR (g) 117,700 721 04334810 Burlington Industries, Inc. 186,100 2,815 12169310 Fruit of the Loom, Inc. Class A (a) 189,300 5,726 35941610 Hat Brands, Inc. (warrants) (a)(f) 90,345 1,039 41873092 Indian Rayon & Industries, Inc. GDR (g) 105,300 2,053 45435210 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) DURABLES - CONTINUED TEXTILES & APPAREL - CONTINUED Interface, Inc. Class A 10,000 $ 126 45866510 Jones Apparel Group, Inc. (a) 12,500 395 48007410 Justin Industries, Inc. 111,600 1,562 48217110 Korea Moolsan Co. (a) 53,420 1,119 50599P22 Liz Claiborne, Inc. 100,000 2,362 53932010 Mohawk Industries Inc. (a) 72,500 1,976 60819010 Nam Yeung Corp. (a) 2,860 351 62999D22 Nautica Enterprises, Inc. (a) 40,000 960 63908910 Phillips-Van Heusen Corp. 7,200 251 71859210 Reebok International Ltd. 13,400 459 75811010 Shaw Industries, Inc. 95,200 1,940 82028610 Shu Kwang Corp. (a) 9,875 164 82599J22 Stride Rite Corp. 141,200 2,083 86331410 Tokyo Style Co. Ltd. 278,000 4,712 88999410 Unifi, Inc. 519,700 10,979 90467710 VF Corp. 76,100 3,805 91820410 Westpoint Stevens, Inc. Class A (a) 64,900 1,071 96123810 Youngone Corp. (a) 1,872 32 99599C22 46,701 TOTAL DURABLES 253,387 ENERGY - 3.6% COAL - 0.0% MAPCO, Inc. 6,900 412 56509710 Pittston Co. Minerals Group 85,000 1,551 72570120 1,963 ENERGY SERVICES - 0.6% BJ Services Co. (a) 107,800 1,994 05548210 Baker Hughes, Inc. 107,300 1,904 05722410 Commercial Del Plata (a) 412,400 2,392 20199392 Dreco Energy Services Ltd. Class A (a) 34,500 319 26152820 Dual Drilling Co. (a) 130,000 1,154 26356410 Enterra Corp. (a) 86,900 1,695 29380510 Global Marine, Inc. (a) 631,200 2,446 37935240 Halliburton Co. 260,200 7,578 40621610 Helmerich & Payne, Inc. 23,200 603 42345210 Marine Drilling Companies, Inc. (a) 395,000 2,271 56824020 Nabors Industries, Inc. (a) 18,500 123 62956810 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) ENERGY - CONTINUED ENERGY SERVICES - CONTINUED Noble Drilling Corp. (a) 100,000 $ 675 65504210 Schlumberger Ltd. 648,450 34,287 80685710 Serv-Tech, Inc. (a) 20,000 220 81753910 Smith International, Inc. (a) 41,800 444 83211010 Tidewater, Inc. 47,000 917 88642310 Tuboscope Vetco Corp. (a) 75,000 384 89860010 Weatherford International, Inc. (a) 84,900 711 94707610 Western Co. of North America (a) 16,100 167 95804340 Wheatley TXT Corp. 30,000 293 96271810 60,577 INDEPENDENT POWER - 0.0% California Energy Co., Inc. (a) 50,000 900 13019010 Magma Power Co. (a) 4,100 132 55919410 Thermo Electron Corp. 49,600 1,928 88355610 2,960 OIL & GAS - 3.0% Amerada Hess Corp. 349,900 15,658 02355110 Ampolex Ltd. Ord. 161,800 460 03212792 Anadarko Petroleum Corp. 150,900 6,941 03251110 Anderson Exploration Ltd. (a) 19,800 490 03390110 Apache Corp. 125,400 2,900 03741110 Ashland Oil, Inc. 46,300 1,887 04454010 Atlantic Richfield Co. 54,900 5,215 04882510 British Petroleum PLC: ADR 1,417,100 86,975 11088940 Ord. 4,937,475 25,637 11088910 Burlington Resources, Inc. 433,100 18,407 12201410 Cabot Oil & Gas Corp. Class A 47,648 929 12709710 Chauvco Resources Ltd. Class A (a) 185,700 2,600 16260010 Chevron Corp. 130,000 10,952 16675110 Cosmo Oil Company Ltd. 340,000 2,703 22199092 Crown Central Petroleum Corp. Class A (a) 12,500 256 22821910 Diamond Shamrock R&M, Inc. 65,800 1,809 25274710 Enron Oil & Gas Co. 33,400 1,428 29356210 Isu Chemical Co. (a) 139,513 2,057 46599E22 Kerr-McGee Corp. 233,300 9,682 49238610 Louisiana Land & Exploration Co. 280,200 10,122 54626810 Mesa, Inc. (a) 48,100 276 59091110 Mobil Corp. 188,000 13,983 60705910 Morrison Petroleums Ltd. 563,900 3,668 61847310 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) ENERGY - CONTINUED OIL & GAS - CONTINUED Murphy Oil Corp. 210,400 $ 8,416 62671710 Newfield Exploration Co. (a) 157,600 3,349 65129010 Noble Affiliates, Inc. 99,100 2,354 65489410 Norsk Hydro AS 75,000 2,391 65653150 Oryx Energy Co. 27,100 437 68763F10 Pancanadian Petroleum Ltd. 50,000 1,454 69890020 Parker & Parsley Petroleum Co. 70,100 1,498 70101810 Petro-Canada 296,200 2,917 71644E10 Petroleum Heat & Power, Inc. Class A 65,000 561 71660030 Phillips Petroleum Co. 77,100 2,053 71850710 Poco Petroleums Ltd. (a) 389,800 2,747 73036110 Renaissance Energy Ltd. (a) 452,500 9,075 75966610 Repsol SA sponsored ADR 4,600 136 76026T20 Royal Dutch Petroleum Co. 72,800 7,235 78025770 Texaco, Inc. 47,700 3,005 88169410 Tosco Corp. 307,000 9,210 89149030 Total Compagnie Francaise des Petroles Class B 64,363 3,405 20434510 Total SA sponsored ADR 170,200 4,446 89151E10 Unocal Corp. 865,800 21,861 91528910 Western Gas Resources, Inc. 60,000 1,688 95825910 Yukong Ltd. (a) 22,600 1,053 98899K22 314,326 TOTAL ENERGY 379,826 FINANCE - 8.1% BANKS - 3.4% Akita Bank 517,000 3,611 00999692 BNP CI Ord. 10,250 458 05599996 Banacci SA de CV: Class C 2,676,200 18,172 06399893 Ord. Class L (a) 323,445 2,124 06399895 Banc One Corp. 734,660 24,244 05943810 Banco Bilbao Vizcaya SA Ord. (Reg.) 109,400 2,527 05945891 Banco de Galicia Y Buenos Aires SA sponsored ADR representing Class B shares 185,170 5,879 05953820 Banco Frances Del Rio PL (Reg.) 513,852 5,216 21199692 Banco Intercontinental Espanol 20,900 1,865 24699592 Banco Popular Espanol 8,500 923 05999110 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) FINANCE - CONTINUED BANKS - CONTINUED BankAmerica Corp. 228,300 $ 8,989 06605010 Bank International Indonesia Ord. (a) 464,600 1,466 06199B92 Bank of Boston Corp. 1,040,267 24,706 06071610 Bank of New York Co., Inc. 206,292 10,521 06405710 BanPonce Corp. 63,670 2,006 06670410 Barclays PLC Ord. 983,143 7,642 06738E10 Barnett Banks, Inc. 15,700 693 06805510 Boatmen's Bancshares, Inc. 58,700 1,739 09665010 Boram Bank (a) 125,018 1,792 09999322 C.S. Holdings (Bearer) (a) 10,390 4,590 17599792 Chase Manhattan Corp. (warrants) (a) 177 1 16161012 Chemical Banking Corp. 533,400 19,402 16372210 Cho Hing Bank Co. Ltd. 238,550 2,952 17099E22 Citicorp (a) 1,214,700 45,551 17303410 Comerica, Inc. 375,500 9,528 20034010 Deutsche Bank AG 7,700 3,638 25152592 Fidelity NY FSB Garden City 70,600 1,218 31633610 Financiere Bank de Suez Cie 20,094 1,102 31799110 First Alabama Bancshares, Inc. 40,700 1,272 31846410 First Chicago Corp. 52,300 2,510 31945510 First Fidelity Bancorporation 43,423 1,927 32019510 First Interstate Bancorp 76,900 5,633 32054810 First Union Corp. 355,679 14,805 33735810 Fleet Financial Group, Inc. 249,300 8,757 33891510 Grupo Financiero Bancomer SA de CV sponsored ADR, Series C (a)(g) 856,000 25,894 40048610 HSBC Holdings: Ord. 222,640 2,438 42199194 PLC (Reg.) 463,032 5,159 42199195 Istituto Mobiliare Italiano 658,100 5,235 45777M92 Keycorp 57,237 1,717 49326710 Kyung Nam Bank (a) 56,700 745 61499222 Kyungki Bank Ltd. (a) 88,200 1,087 61999922 Magna Group, Inc. 2,200 42 55921410 Mellon Bank Corp. 54 3 58550910 Mercantile Bancorporation, Inc. 13,800 661 58734210 Midlantic Corp. (a) 16,000 458 59780E10 Mitsui Trust and Banking 473,000 4,792 60684699 National Westminster Bank PLC Ord 846,156 5,762 63853930 NationsBank Corp. 356,200 16,296 63858510 North Fork Bancorporation, Inc. (a) 10,000 138 65942410 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) FINANCE - CONTINUED BANKS - CONTINUED Norwest Corp. 48,400 $ 1,156 66938010 Panin Bank (For.) 942,200 1,487 69899823 Peoples Heritage Financial Group, Inc. (a) 31,500 327 71114710 Safra Republic Holdings SA Ord. 5,600 515 78510099 Shawmut National Corp. 1,181,700 23,929 82048410 Signet Banking Corp. 111,527 4,405 82668110 Societe Generale Class A 9,437 1,040 83357799 Standard Chartered Bank 64,502 992 85256810 State Street Boston Corp. 32,400 1,166 85747310 Swiss Bank Corp. (Bearer) (a) 11,230 3,228 87083610 Union Planters Corp. 14,400 358 90806810 West One Bancorp 37,100 1,002 95482810 Westpac Banking Corp. 539,311 1,732 96121410 Zions Bancorporation 12,500 463 98970110 359,686 CLOSED END INVESTMENT COMPANY - 0.2% ASA Ltd. 4,000 173 00205010 Jardine Strategic Holdings Ord. 632,600 2,194 47199020 Morgan Stanley India Investment Fund (a) 1,071,000 14,057 61745C10 16,424 CREDIT & OTHER FINANCE - 1.0% Abbey National PLC Ord. 355,569 2,453 00281099 Amer Group Ltd.: Class A 68,550 1,593 02351210 (rights) (a) 68,550 77 02351293 American Express Co. 525,900 14,528 02581610 Argentaria Corp. Bancaria de Esp 30,500 1,288 21991392 Beneficial Corp. 152,000 5,567 08172110 Brierley Investments Ltd. 27,633,800 18,492 10901410 Central Invest & Finance (a) 22,000 463 15499422 Corporacion Bancaria de Espana SA sponsored ADR (a) 107,300 2,267 21991310 Credit Foncier de France 5,188 1,093 22532792 Dean Witter Discover & Co. 140,466 4,583 24240V10 GFC Financial Corp. 61,900 1,965 36160910 Granite Industries BHD 240,000 637 38799522 Green Tree Acceptance, Inc. 75,000 3,347 39350510 Grupo Carso SA de CV Class A-1 (a) 3,982,200 37,239 40099594 Grupo Financiero Serfin sponsored ADR CV 396,400 9,960 40049A10 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) FINANCE - CONTINUED CREDIT & OTHER FINANCE - CONTINUED Guangdong Investments Co. Ltd. Ord 2,208,000 $ 1,271 40199492 Household International, Inc. 45,356 1,344 44181510 Pusan Invest & Finance (a) 6,400 352 74699B22 Shin Han Securities Co. (a) 18,900 361 82499G92 108,880 FEDERAL SPONSORED CREDIT - 1.1% Federal Home Loan Mortgage Corporation 433,800 22,015 31340030 Federal National Mortgage Association 1,263,700 98,253 31358610 120,268 INSURANCE - 1.3% ACE Ltd. 186,800 4,810 00499G92 Allstate Corp. 515,800 12,379 02000210 Amer Premier Underwriters, Inc. 8,500 213 02909210 American Annuity Group, Inc. 641,578 5,614 American Bankers Insurance Group, Inc. 227,600 5,178 02445610 American International Group, Inc 35,000 2,944 02687410 Assicurazioni Generali Spa 205,100 5,413 04542910 Assurances Generales (Reg.) 24,950 2,469 04557510 Capital Holding Corp. 61,300 1,939 14018610 Conseco, Inc. 4,700 254 20846410 Corporacion Mapfre International Reas (Reg.) 80,100 3,572 16899192 Exel Ltd. 24,700 991 30161610 GAN (Groupe Des Assur Natl.) 27,830 2,312 36599792 General Re Corp. 189,100 20,305 37056310 Gryphon Holdings, Inc. (a) 12,500 188 40051510 International Nederlanden Groep CVA 66,487 2,838 46099892 John Alden Financial Corp. 97,200 3,451 47783810 Legal & General Group Ltd. Ord. (a) 132,606 899 52439810 Loews Corp. 45,200 4,057 54042410 MBIA, Inc. 58,200 3,179 55262C10 NAC Re Corp. 79,500 2,067 62890710 Penncorp. Financial Group, Inc. 10,000 162 70809410 Progressive Corp. (Ohio) 88,800 2,586 74331510 Prudential Corp. 576,236 2,607 74399992 Royale Insurance Co. Ltd. 396,917 1,590 78074910 SAFECO Corp. 215,700 11,405 78642910 St. Paul Companies, Inc. (The) 236,300 18,372 79286010 Tokio Marine & Fire Insurance Co. Ltd. (The) 145,000 1,737 88909099 Torchmark Corp. 47,500 1,912 89102710 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) FINANCE - CONTINUED INSURANCE - CONTINUED Travelers, Inc. (The) 315,466 $ 11,081 89419010 UNUM Corp. 75,500 3,983 90319210 140,507 SAVINGS & LOANS - 0.4% Ahmanson (H.F.) & Co. 611,200 10,314 00867710 Anchor Bancorp Inc. (a) 100,000 1,287 03283710 Bankatlantic Federal Savings Bank 12,500 166 06590310 Charter One Financial Corp. 145,100 2,739 16090310 Crossland Federal Savings Bank (a) 100,000 3,300 22764B10 Dime Savings Bank of New York, FSB (a) 35,000 289 25432R10 Eastern Bancorp 3,500 58 27626910 FirstFed Michigan Corp. 22,500 506 33761R10 Golden West Financial Corp. 405,000 15,542 38131710 Lakeview Savings Bank 11,300 161 51234610 North Side Savings Bank 8,000 158 66248810 Roosevelt Financial Group, Inc. 61,600 2,726 77649310 Standard Federal Bank 184,800 5,174 85338910 42,420 SECURITIES INDUSTRY - 0.7% Bear Stearns Companies, Inc. 22,900 447 07390210 Boram Securities Co. Ltd. (a) 62,370 1,198 18599622 Coryo Securities 47,080 898 22199822 Daehan Korean Blue-Chip Investment Trust (a)(g) 1,900,000 33,269 23699E22 Daiwa Securities 375,000 5,991 23499010 Franklin Resources, Inc. 14,900 605 35461310 Hyundai Securities Co. Ltd. (a) 20,400 591 42699A22 Korea First Securities Co. (a) 103,142 2,287 50099K22 Korea Investment & Finance (a) 19,665 400 50599092 Korea Investment & Finance (New) (a) 3,833 79 50599093 Merrill Lynch & Co., Inc. 700 26 59018810 Midland Walwyn Inc. (a) 65,600 587 59780110 Morgan Stanley Group, Inc. 138,800 8,883 61744610 Nomura Securities Co. Ltd. 453,000 9,488 65536130 Paine Webber Group, Inc. 83,250 1,405 69562910 Seoul Securities Co. (a) 64,198 1,233 83599P22 Sunkyong Securities Co. (a) 93,290 1,988 96199D22 69,375 TOTAL FINANCE 857,560 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) HEALTH - 2.6% DRUGS & PHARMACEUTICALS - 1.2% Allergan, Inc. 461,800 $ 9,409 01849010 American Cyanamid Co. 197,800 9,198 02532110 Amgen, Inc. (a) 116,400 4,452 03116210 Biogen, Inc. (a) 34,700 1,206 09059710 Bristol-Myers Squibb Co. 91,500 4,724 11012210 Cellpro, Inc. (a) 35,000 822 15115610 Celtrix Laboratories, Inc. (a) 60,600 447 15118610 Cephalon, Inc. (a) 25,000 341 15670810 Chiron Corp. (a) 17,600 1,157 17004010 Elan PLC ADR (a) 217,700 7,238 28413120 Elan PLC Therapeutic Systems unit (common & 1 ADR warrant) (a) 16,050 451 28413140 Forest Laboratories, Inc. (a) 64,600 2,770 34583810 Genentech, Inc. (a) 9,200 405 36871020 IVAX Corp. 48,500 1,213 46582310 Korea Green Cross Corp. (a) 12,777 822 50099J22 Mylan Laboratories, Inc. 95,000 1,663 62853010 Pfizer, Inc. 359,000 19,386 71708110 Protein Design Labs, Inc. (a) 20,000 440 74369L10 Rexall Sundown, Inc. (a) 12,500 209 76164810 Rhone Poulenc Rorer, Inc. 70,000 2,266 76242T10 Rhone Poulenc Rorer, Inc. Free shares 30,300 993 76242T92 Schering AG 8,200 5,181 80658510 Schering-Plough Corp. 389,000 21,881 80660510 Warner-Lambert Co. 422,700 26,155 93448810 122,829 MEDICAL EQUIPMENT & SUPPLIES - 0.8% Bausch & Lomb, Inc. 95,000 4,465 07170710 Baxter International, Inc. 392,400 8,878 07181310 Becton, Dickinson & Co. 50,000 1,875 07588710 Bergen Brunswig Corp. Class A 212,400 3,558 08373910 Boston Scientific Corp. (a) 147,200 1,987 10113710 Cardinal Health, Inc. 90,700 4,172 14149Y10 Cordis Corp. (a) 65,500 2,751 21852510 Johnson & Johnson 244,300 9,222 47816010 Kendall International, Inc. (a) 86,300 3,430 48875110 Lunar Corp. 12,500 156 55036210 Mallinckrodt Group, Inc. 284,000 9,088 56122610 McKesson Corp. 190,800 11,353 58155610 Medtronic, Inc. 169,300 13,544 58505510 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) HEALTH - CONTINUED MEDICAL EQUIPMENT & SUPPLIES - CONTINUED Mentor Corp. 30,600 $ 421 58718810 Owens & Minor, Inc. 143,400 3,262 69073010 Puritan Bennett Corp. 19,100 392 74629910 Sofamor/Danek Group, Inc. (a) 111,600 2,441 83400510 Spacelabs Medical, Inc. (a) 47,300 1,123 84624710 Thermedics, Inc. (a) 57,500 719 88390110 Utah Medical Products, Inc. 115,900 855 91748810 83,692 MEDICAL FACILITIES MANAGEMENT - 0.6% Columbia/HCA Healthcare Corp. 922,515 37,131 19767710 HEALTHSOUTH Rehabilitation Corp. (a) 54,300 1,575 42192410 Health Management Associates, Inc. Class A (a) 27,950 849 42193310 Homedco Group, Inc. (a) 8,500 307 43739A10 Lincare Holdings, Inc. (a) 98,540 2,143 53279110 U.S. Healthcare, Inc. 399,450 16,377 91191010 United HealthCare Corp. 137,300 5,870 91058110 64,252 TOTAL HEALTH 270,773 INDUSTRIAL MACHINERY & EQUIPMENT - 1.5% ELECTRICAL EQUIPMENT - 0.8% Alcatel Alsthom CGE 52,929 6,164 01390492 General Electric Co. 212,400 21,160 36960410 General Electric PLC Ord. 1,068,680 4,709 36963940 Grainger (W.W.), Inc. 40,000 2,540 38480210 ICOM, Inc. 66,000 1,035 44999A92 IEC Electronics Corp. (a) 12,500 159 44949L10 Il Jin Electric & Machinery (a) 12,600 295 45099G22 Itel Corp. (a) 75,600 1,890 46564210 Murata Manufacturing Co. Ord. 578,000 27,309 62699110 Philips Electronics (a) 257,800 7,011 71833799 Philips NV (a) 513,200 13,857 71833750 Scientific-Atlanta, Inc. 12,500 344 80865510 Sensormatic Electronics Corp. 9,000 328 81726510 Siebe PLC (a) 116,814 1,025 82619999 87,826 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED INDUSTRIAL MACHINERY & EQUIPMENT - 0.6% Amtrol, Inc. 100 $ 2 03234A10 Bearings, Inc. 12,500 398 07400520 Briggs & Stratton Corp. 21,300 1,789 10904310 CMI Corp. Oklahoma Class A 15,000 112 12576130 Caterpillar, Inc. 278,300 31,274 14912310 Cincinnati Milacron, Inc. 28,700 671 17217210 Daewoo Heavy Industries Ltd. (a) 31,500 468 23999492 Deere & Co. 49,300 4,141 24419910 Duriron Company, Inc. 9,300 160 26684910 Finning Ltd. 359,200 5,452 31807140 Indresco, Inc. (a) 105,000 1,418 45590510 Joy Technologies, Inc. Class A (a) 173,100 2,077 48120610 Korea Machinery Co. Ltd. (a) 63,000 827 50599H22 Manitowoc Co., Inc. 82,200 2,281 56357110 Parker-Hannifin Corp. 50,000 1,769 70109410 Regal-Beloit Corp. 109,200 2,730 75875010 SKF AB Ord. (a) 229,200 4,099 78437530 TRINOVA Corp. 152,100 5,266 89667810 Tenneco, Inc. 30,000 1,583 88037010 Thermadyne Hldgs. Corp. 2,200 29 88343510 Watts Industries, Inc. Class A 30,200 710 94274910 67,256 POLLUTION CONTROL - 0.1% American Ecology Corp. 15,000 169 02553310 Attwoods PLC: ADR 343,200 3,003 04987020 Ord. 1,250,000 2,225 04987010 Harding Associates Inc. (a) 10,000 65 41226410 OHM Corp. 15,000 244 67083910 Sanifill, Inc. (a) 20,000 430 80101810 Thermo Instrument Systems, Inc. (a) 15,000 437 88355910 United Waste Systems, Inc. (a) 15,000 277 91317410 USA Waste Services, Inc. (a) 17,000 215 90291710 Zurn Industries, Inc. 46,700 1,097 98982410 8,162 TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 163,244 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) MEDIA & LEISURE - 1.5% BROADCASTING - 0.3% BET Holdings, Inc. Class A (a) 9,500 $ 168 08658510 CBS, Inc. 700 214 12484510 Capital Cities/ABC, Inc. 7,300 4,993 13985910 Grupo Televisa GDS (a)(g) 114,400 5,834 40049J20 Home Shopping Network, Inc. (a) 257,754 3,319 43735110 TF-1 22,800 1,870 90399999 Tele-Communications, Inc. Class A (a) 758,200 15,733 87924010 Time Warner, Inc. 12,500 484 88731510 32,615 ENTERTAINMENT - 0.0% Carnival Cruise Lines, Inc. Class A 5,200 231 14365810 Cedar Fair LP (depositary units) 9,500 319 15018510 Granada Group 1,312 11 38480310 Live Entertainment, Inc.: $2.00 (warrant) (a)(f) 256,000 256 53803292 $2.72 (warrant) (a)(f) 244,706 245 53803293 Rank Organization PLC 133,026 765 75304110 Royal Carribean Cruises Ltd. 115,100 2,863 78015392 4,690 LEISURE DURABLES & TOYS - 0.1% Brunswick Corp. 137,400 2,903 11704310 Callaway Golf Co. 115,400 3,736 13119310 Fleetwood Enterprises, Inc. 33,500 682 33909910 Mattel, Inc. 62,500 1,570 57708110 Outboard Marine Corp. 221,600 4,266 69002010 Salomon SA 6,100 2,225 93099292 Samick Musical Instruments (a) 12,535 235 79599L22 15,617 LODGING & GAMING - 0.5% Bally Gaming International, Inc. (warrants) (a)(f) 149,100 857 05873194 Bally's Grand, Inc. (a) 81,947 963 05873J10 Bally's Grand, Inc. (warrants) (a) 28,618 122 05873J11 Caesars World, Inc. (a) 47,800 2,139 12769510 Four Seasons Hotels, Inc. 243,600 1,915 35100E10 Grupo Posadas SA de CV Class L (a) 593,400 565 40048992 Grupo Situr SA de CV Class B (a) 5,189,570 13,292 40049292 Hilton Hotels Corp. 55,000 3,135 43284810 Host Marriott Corp. 182,856 1,829 44107810 International Game Technology Corp. 21,500 583 45990210 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) MEDIA & LEISURE - CONTINUED LODGING & GAMING - CONTINUED Ladbroke Group PLC Ord. 1,757,660 $ 5,032 50572799 La Quinta Motor Inns, Inc. 306,450 8,695 50419510 Marriott International, Inc. 72,856 2,049 57190010 Mirage Resorts, Inc. (a) 97,600 2,050 60462E10 President Riverboat Casinos, Inc. (a) 106,800 1,789 74084810 Shangri-La Asia Ltd. (a) 200,000 295 84599M22 Station Casinos, Inc. 20,000 350 85768910 Trump Plaza Holding Associates (warrants) (a) 285 242 89817E11 Video Lottery Technologies, Inc. (a) 136,700 2,119 92656M10 48,021 PUBLISHING - 0.4% American Greetings Corp. Class A 126,300 3,331 02637510 Banta Corp. 7,100 240 06682110 Central Newspapers, Inc. Class A 70,100 1,884 15464710 Enquirer/Star Group, Inc. Class A 122,500 1,991 29355410 Gannett Co., Inc. 171,200 9,009 36473010 Houghton Mifflin Co. 17,100 701 44156010 MaClean Hunter Ltd. 159,800 1,949 55474980 McGraw-Hill, Inc. 23,800 1,556 58064510 Meredith Corp. 95,000 4,026 58943310 Mirror Group Newspaper PLC (a) 213,300 541 60499792 Pearson PLC 149,134 1,427 70509991 Scripps (E.W.) Co. Class A 75,000 1,875 81103910 Thomson Corp. 123,600 1,585 88490310 Times Mirror Co., Series A 141,100 4,392 88736010 Torstar Corp. Class B 265,400 4,651 89147420 39,158 RESTAURANTS - 0.2% Bertucci's, Inc. (a) 64,600 1,098 08606310 Cracker Barrel Old Country Store, Inc. 27,600 739 22410010 McDonald's Corp. 184,900 10,516 58013510 Morrison Restaurants, Inc. 85,000 1,923 61847710 Papa Johns International, Inc. (a) 12,500 366 69881310 Ryan's Family Steak Houses, Inc. (a) 128,900 983 78351910 Uno Restaurant Corp. (a) 10,000 91 91490010 15,716 TOTAL MEDIA & LEISURE 155,817 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) NONDURABLES - 2.2% AGRICULTURE - 0.1% Molinos Rio de La Plata (Reg.) 471,281 $ 5,585 60899C22 Pioneer Hi-Bred International, Inc. 27,500 901 72368610 6,486 BEVERAGES - 0.4% Bass PLC Ord. 399,838 3,144 06990492 Cadbury-Schweppes PLC Ord. 224,828 1,552 12720910 Canadaigua Wine Co. Class A (a) 50,000 1,375 13721920 Coca-Cola Femsa SA de CV sponsored ADR 172,900 4,733 19124110 Comp Cervecerias Unidas SA ADR 95,000 2,209 20442910 Dr. Pepper/Seven-Up Companies, Inc. (a) 67,600 1,622 25613130 Fomento Economico Mexicano SA de CV Class B 2,171,400 11,459 34441892 Gemex (Grupo Embot) CPO GDR 208,700 5,765 Panamerican Beverages, Inc. Class A 126,200 4,370 69829W10 PepsiCo, Inc. 10,800 396 71344810 Scottish & Newcastle Brewers PLC 143,732 1,107 80987810 Whitbread Class A 663,132 5,106 96341499 42,838 FOODS - 0.6% Archer-Daniels-Midland Co. 175,000 4,200 03948310 Borden, Inc. 363,700 4,865 09959910 ConAgra, Inc. 467,700 12,511 20588710 Dean Foods Co. 131,600 3,636 24236110 Dole Food, Inc. 146,900 4,627 25660510 Grand Metropolitan PLC 562,006 3,760 38559099 Grupo Ind Maseca SA de CV Class B (a) 3,402,100 5,248 57899894 Herdez SA de CV Class A (a) 4,419,800 5,212 42799F22 IBP, Inc. 651,600 15,313 44922310 Miwon Co. Ltd. 51,757 1,225 61299693 Miwon Co. Ltd. (New) (a) 13,639 282 61299695 Ralston Purina Co. 12,500 569 75127730 Samyang Foods Co. (a) 12,600 376 84699F22 Tyson Foods, Inc. 28,800 569 90249410 Viscofan Envolturas Celulo SA 113,300 2,534 92899999 Weston George Ltd. 211,100 6,370 96114850 71,297 HOUSEHOLD PRODUCTS - 0.2% Avon Products, Inc. 27,400 1,548 05430310 Hartstone Group PLC Ord. (a) 2,147,800 1,848 41722610 Neutrogena Corp. (a) 40,600 680 64124610 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) NONDURABLES - CONTINUED HOUSEHOLD PRODUCTS - CONTINUED Orkla AS Class A Free shares 50,000 $ 1,683 39299193 Premark International, Inc. 30,100 2,167 74045910 Procter & Gamble Co. 131,400 7,047 74271810 Safeskin Corp. (a) 20,000 270 78645410 Stanhome, Inc. 37,100 1,317 85442510 16,560 TOBACCO - 0.9% Empresas La Moderna SA sponsored ADR 134,800 3,168 29244910 ITC Ltd. GDR (a)(g) 45,500 899 45031810 Philip Morris Companies, Inc. 1,313,800 66,675 71815410 RJR Nabisco Holdings Corp. (a) 2,419,400 13,912 74960K10 UST, Inc. 346,000 8,563 90291110 93,217 TOTAL NONDURABLES 230,398 PRECIOUS METALS - 0.1% PRECIOUS METALS - 0.1% Free State Consolidated Gold Mines Ltd. ADR 84,500 1,088 35614220 Hecla Mining Co. (a) 26,700 381 42270410 Homestake Mining Co. 276,500 6,221 43761410 7,690 RETAIL & WHOLESALE - 2.5% APPAREL STORES - 0.3% AnnTaylor Stores Corp. (a) 50,000 1,600 03611510 Burlington Coat Factory Warehouse Corp. (a) 20,000 505 12157910 Cato Corp. Class A 20,000 325 14920510 Charming Shoppes, Inc. 166,000 2,013 16113310 Claire's Stores, Inc. 83,600 1,578 17958410 Designs, Inc. (a) 20,000 330 25057L10 Edison Brothers Stores, Inc. 8,400 247 28087510 Gap, Inc. 77,700 3,448 36476010 Lamonts Apparel, Inc. (a) 213,794 321 51362820 Limited, Inc. (The) 320,000 6,680 53271610 Ross Stores, Inc. (a) 104,100 1,587 77829610 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) RETAIL & WHOLESALE - CONTINUED APPAREL STORES - CONTINUED Sportmart, Inc. (a) 10,000 $ 125 84892210 TJX Companies, Inc. 614,900 16,218 87254010 34,977 DRUG STORES - 0.1% General Nutrition Companies, Inc. (a) 27,020 669 37047F10 Long Drug Stores, Inc. 12,500 417 54316210 Rite Aid Corporation 273,900 5,204 76775410 6,290 GENERAL MERCHANDISE STORES - 1.4% Aoyama Trading Co. Ord. 144,000 8,178 03799092 Cifra SA Class C (a) 7,682,400 19,722 17178594 Consolidated Stores Corp. (a) 200,000 3,450 21014910 Controladora Commercial Mexicana SA B-1 (a) 5,640,400 9,709 21299692 Dayton Hudson Corp. 235,800 17,213 23975310 Dillard Department Stores, Inc. Class A 115,000 3,852 25406310 Federated Department Stores, Inc. (a) 1,005,500 22,121 31410J10 Keum Kang Dev Industries Co. (a) 9,450 166 49299F22 Mac Frugals Bargains Co., Inc. (a) 28,200 469 55415210 Marks & Spencer Ltd. Ord. (a) 830,719 5,028 57069710 May Department Stores Co. (The) 62,500 2,602 57777810 Midopa Co. (a) 69,503 1,335 59899E22 Midopa Co. (New) 18,904 258 59899E23 Penney (J.C.) Co., Inc. 92,600 4,896 70816010 Proffitts, Inc. (a) 36,800 773 74292510 Sears, Roebuck & Co. 317,600 13,657 81238710 Sears Roebuck de Mexico SA 951,500 13,885 81240K92 Sears Roebuck de Mexico SA de CV ADR representing Series B-1 shares (a)(g) 160,000 4,692 81240K10 Value City Department Stores, Inc. (a) 135,700 2,036 92038710 Wal-Mart Stores, Inc. 446,100 11,543 93114210 145,585 GROCERY STORES - 0.4% American Stores Co. 50,200 2,573 03009610 Argyll 304,315 1,142 04099210 Bruno's, Inc. 393,200 3,047 11688110 Food Lion, Inc. Class A 1,575,300 8,861 34477520 Giant Food, Inc. Class A 70,000 1,575 37447810 Great Atlantic & Pacific Tea Co., Inc. 76,100 1,864 39006410 Kroger Co. (The) (a) 35,000 836 50104410 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) RETAIL & WHOLESALE - CONTINUED GROCERY STORES - CONTINUED Loblaw Companies, Ltd. 116,700 $ 2,045 53948110 Safeway, Inc. (a) 410,400 9,798 78651420 Stop & Shop Companies, Inc. (a) 189,700 4,624 86209910 Supervalu, Inc. 1,300 45 86853610 Tae Gu Department Store Co. (a) 6,489 200 90599G22 Tesco PLC Ord. (a) 958,523 3,029 88157510 Whole Foods Market, Inc. (a) 68,800 1,290 96683710 40,929 RETAIL & WHOLESALE, MISCELLANEOUS - 0.3% Barnes & Noble, Inc. 23,800 571 06777410 CML Group, Inc. 10,600 176 12582010 Duty Free International, Inc. 10,000 145 26708410 Fabri-Centers of America, Inc. (a) 200 3 30284610 Good Guys, Inc. (a) 225,700 3,724 38209110 Grupo Casa Autrey SA sponsored ADR (a) 79,800 2,035 40048P10 Hancock Fabrics, Inc. 61,100 558 40990010 Lillian Vernon Corp. 12,500 258 53243010 Little Switzerland, Inc. (a) 129,000 871 53752810 Lowe's Companies, Inc. 225,000 7,256 54866110 Micro Warehouse, Inc. (a) 20,000 920 59501B10 North West Company, Inc. 54,600 612 66329F10 Office Depot, Inc. (a) 28,100 980 67622010 Pinault Printemps SA 3,400 565 72199393 Rex Stores Corp. (a) 12,500 222 76162410 Sotheby's Holdings, Inc. Class A 298,600 5,076 83589810 Spiegel, Inc. Class A 27,500 626 84845710 Staples, Inc. 27,200 683 85503010 Toys "R" Us, Inc. (a) 92,300 3,207 89233510 Waban, Inc. (a) 10,700 197 92939410 Wickes PLC 1,445,100 2,294 96699392 30,979 TRADING COMPANIES - 0.0% Hyundai Corp. (a) 45,500 1,488 40999922 Inchcape Berhad Ord. 142,125 1,090 45325010 Nam Sung Corp. (a) 19,624 367 63299D22 Sunkyong Ltd. (a) 10,000 306 96199C22 3,251 TOTAL RETAIL & WHOLESALE 262,011 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) SERVICES - 0.5% ADVERTISING - 0.0% Omnicom Group, Inc. 28,200 $ 1,346 68191910 LEASING & RENTAL - 0.0% Hollywood Entertainment Corp. (a) 20,000 477 43614110 Orix Corp. 104,000 3,627 68616710 Thorn EMI PLC Ord. 1,002 16 88519991 4,120 PRINTING - 0.2% Cadmus Communications Corp. 20,000 285 12758710 Donnelley (R.R.) & Sons Co. 61,500 1,730 25786710 Moore Corporation Ltd. 60,500 1,131 61578510 New England Business Service, Inc. 100,000 1,900 64387210 Reynolds & Reynolds Co. Class A 295,300 6,423 76169510 Standard Register Co. 9,800 211 85388710 Wallace Computer Services, Inc. 63,800 2,121 93227010 13,801 SERVICES - 0.3% Borg Warner Securities Corp. (a) 122,400 2,066 09973310 CPI Corp. 124,000 1,953 12590210 Chemed Corp. 25,400 826 16359610 Craig (Jenny), Inc. 74,100 472 22420610 Devry, Inc. (a) 50,000 1,419 25189310 Ecolab, Inc. 74,200 1,521 27886510 Interim Services, Inc. 21,400 532 45868P10 Jostens, Inc. 50,000 850 48108810 Kelly Services, Inc. Class A 10,800 259 48815220 Pinkertons, Inc. (a) 85,900 1,729 72342910 Pittston Company Services Group 75,500 1,680 72570110 Robert Half International, Inc. (a) 15,000 459 77032310 Service Corp. International 167,400 4,227 81756510 Supercuts, Inc. (a) 66,000 990 86805710 Town & Country Jewelry Manufacturing Corp. Class A (a) 743,292 2,137 89202710 Western Atlas, Inc. 240,100 9,904 95767410 31,024 TOTAL SERVICES 50,291 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) TECHNOLOGY - 6.0% COMMUNICATIONS EQUIPMENT - 0.7% ADC Telecommunications, Inc. (a) 6,000 $ 230 00088610 Cabletron Systems, Inc. (a) 137,900 15,066 12692010 Cisco Systems, Inc. (a) 899,400 30,804 17275R10 DSC Communications Corp. (a) 155,500 7,814 23331110 Daewoo Telecommunication 27,913 512 27999192 Ericsson (L.M.) Telephone Co. Class B ADR 35,700 1,504 29482140 Network General Corp. 88,600 1,584 64121010 Newbridge Networks Corp. (a) 14,700 803 65090110 3Com Corp. (a) 91,070 5,088 88553510 Wellfleet Communications, Inc. (a) 144,600 10,194 94949710 73,599 COMPUTER SERVICES & SOFTWARE - 0.8% Adobe Systems, Inc. 6,100 148 00724F10 CUC International, Inc. (a) 19,000 598 12654510 Ceridian Corp. (a) 67,500 1,569 15677T10 Cheyenne Software, Inc. (a) 172,650 4,446 16688810 Compuware Corp. (a) 125,000 5,266 20563810 Crosscommunications Corp. (a) 34,300 429 22757K10 Inacom Corp. (a) 50,000 775 45323G10 Informix Corp. (a) 700 14 45677910 Intelligent Electronics, Inc. 31,800 795 45815710 LEGENT Corp. (a) 25,000 637 52465R10 Lotus Development Corp. (a) 170,000 11,985 54570010 Micrografx, Inc. (a) 129,000 838 59507710 Microsoft Corp. (a) 457,300 38,756 59491810 Oracle Systems Corp. (a) 79,000 2,538 68389X10 Parametric Technology Corp. (a) 10,600 292 69917310 Recognition Equipment, Inc. (a) 7,300 88 75623110 Reuters Holdings PLC Ord. (a) 112,799 3,273 76132410 SHL Systemhouse, Inc. (a) 303,700 2,088 78424R10 Sybase, Inc. (a) 500 23 87113010 Systems Software Associates, Inc. 28,100 400 87183910 Viewlogic Systems, Inc. (a) 307,700 7,885 92672110 82,843 COMPUTERS & OFFICE EQUIPMENT - 1.9% Amdahl Corp. 504,500 3,279 02390510 Apple Computer, Inc. 4,900 163 03783310 Canon, Inc. 522,000 8,238 13780199 Casio Computer Co. Ltd. Ord. 392,000 4,850 14761893 Cherry Corp. (a) 139,000 3,684 16454110 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) TECHNOLOGY - CONTINUED COMPUTERS & OFFICE EQUIPMENT - CONTINUED Comdisco, Inc. 10,100 $ 196 20033610 Compaq Computer Corp. (a) 769,600 75,228 20449310 Conner Peripherals, Inc. (a) 12,800 194 20810810 Dell Computer Corporation (a) 8,100 204 24702510 Diebold, Inc. 155,850 5,689 25365110 EMC Corp. (a) 27,500 547 26864810 Exabyte (a) 6,400 122 30061510 Guilbert 10,974 1,013 40199792 Hewlett-Packard Co. 159,000 13,058 42823610 International Business Machines Corp. 816,200 44,483 45920010 Media Vision Technology, Inc. (a) 62,600 603 58445H10 Merisel, Inc. (a) 139,500 2,528 58984910 SCI Systems, Inc. (a) 474,900 7,598 78389010 Seagate Technology (a) 100,000 2,325 81180410 Silicon Graphics, Inc. (a) 44,500 1,062 82705610 Sun Microsystems, Inc. (a) 185,900 5,089 86681010 Symbol Technologies, Inc. (a) 10,700 206 87150810 SynOptics Communications, Inc. (a) 87,500 1,772 87160910 Tandem Computers, Inc. (a) 211,200 2,983 87537010 Tech Data Corp. (a) 37,100 1,345 87823710 Tricord Systems, Inc. (a) 128,500 1,895 89612110 Xerox Corp. 94,700 9,044 98412110 197,398 ELECTRONIC INSTRUMENTS - 0.1% Applied Materials, Inc. (a) 48,000 2,136 03822210 KLA Instruments Corp. (a) 12,500 447 48248010 Kulicke & Soffa Industries, Inc. (a) 113,300 1,246 50124210 Lam Research Corp. (a) 43,200 1,339 51280710 Measurex Corp. 11,200 205 58343210 Megatest Corp. (a) 61,100 1,115 58495810 Tektronix, Inc. 50,000 1,525 87913110 Teradyne, Inc. (a) 144,000 3,636 88077010 Varian Associates, Inc. 58,800 1,999 92220410 13,648 ELECTRONICS - 2.4% AMP, Inc. 53,300 3,211 03189710 Advanced Micro Devices, Inc. (a) 550,000 16,981 00790310 Anthem Electronics, Inc. (a) 230,600 6,860 03673210 Atmel Corp. (a) 42,500 1,796 04951310 Daewoo Electronics Components Co. (a) 20,038 355 23799E22 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) TECHNOLOGY - CONTINUED ELECTRONICS - CONTINUED Hitachi, Ltd. 1,204,000 $ 10,908 43357810 Integrated Device Technology, Inc. (a) 89,000 2,258 45811810 Intel Corp. 1,358,800 91,719 45814010 LSI Logic Corp. (a) 161,700 3,234 50216110 Linear Technology Corp. 7,700 325 53567810 Maxim Integrated Products, Inc. (a) 102,000 5,126 57772K10 Methode Electronics, Inc. Class A 79,200 1,297 59152020 Micron Technology, Inc. 91,200 7,615 59511210 Molex, Inc. 15,100 510 60855410 Molex, Inc. 150,000 4,950 60855420 Motorola, Inc. 491,800 49,795 62007610 National Semiconductor Corp. (a) 50,000 1,050 63764010 Samsung Electronics Co. Ltd. GDR (g) 106,300 4,837 79605020 Samsung Electronics Co. Ltd. GDR representing common (a)(g) 5,057 193 79605060 Solectron Corp. (a) 362,800 10,929 83418210 Texas Instruments, Inc. 379,600 29,324 88250810 Toshiba Corp. 928,000 6,663 89149310 Xilinx, Inc. (a) 5,000 250 98391910 260,186 PHOTOGRAPHIC EQUIPMENT - 0.1% Fuji Photo Film Co. Ltd. 145,000 3,235 35958610 Polaroid Corp. 162,008 5,164 73109510 8,399 TOTAL TECHNOLOGY 636,073 TRANSPORTATION - 1.3% AIR TRANSPORTATION - 0.4% AMR Corp. (a) 246,000 14,022 00176510 Atlantic Southeast Airlines, Inc. 14,500 458 04886910 Comair Holdings, Inc. 302,000 6,493 19978910 Delta Air Lines, Inc. 82,600 3,738 24736110 Korean Air (a) 100,342 2,760 52299522 Mesa Airlines, Inc. (a) 92,500 1,896 59048110 UAL Corp. (a) 129,200 16,473 90254910 45,840 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) TRANSPORTATION - CONTINUED RAILROADS - 0.8% Burlington Northern, Inc. 84,300 $ 5,016 12189710 CSX Corp. 224,800 18,434 12640810 Chicago & North Western Holdings Corp. (a) 187,200 4,540 16715510 Conrail, Inc. 37,300 2,154 20836810 Illinois Central Corp., Series A 209,600 7,074 45184110 Santa Fe Pacific Corp. 1,334,700 30,364 80218310 Southern Pacific Rail Corp. (a) 381,000 8,001 84358410 Trinity Industries, Inc. 60,600 2,303 89652210 Union Pacific Corp. 80,200 4,551 90781810 Wisconsin Central Transportation Corp. (a) 36,300 2,550 97659210 84,987 SHIPPING - 0.1% Great Eastern Shipping Co. Ltd. GDR 86,000 1,032 39099823 Han Jin Transportation Co. (a) 45,423 1,159 40999722 Ned Lloyd (a) 113,500 3,805 63983210 Overseas Shipholding Group, Inc. 52,400 1,074 69036810 Transportacion Maritima Mexicana SA de CV ADR representing L shares (a) 290,000 2,393 89386820 9,463 TRUCKING & FREIGHT - 0.0% MS Carriers, Inc. (a) 10,000 225 55353310 Roadway Services, Inc. 12,500 847 76974810 Yellow Corp. 41,200 984 98550910 2,056 TOTAL TRANSPORTATION 142,346 UTILITIES - 3.9% CELLULAR - 0.4% Cencall Communications Corp. (a) 51,100 1,201 15129710 Dial Page, Inc. 45,000 2,036 25247P10 IDB Communications Group, Inc. 50,000 819 44935510 Nextel Communications, Inc. Class A (a) 56,800 2,229 65332V10 Pactel Corp. (a) 10,000 206 69525210 Premier Page Co. (a) 93,000 872 74058E10 Rogers Cantel Mobile Communications, Inc. Class B (non-vtg.) (a) 143,400 3,537 77510210 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) UTILITIES - CONTINUED CELLULAR - CONTINUED Vodafone Group PLC (a) 940,436 $ 7,199 92857T92 Vodafone Group PLC sponsored ADR 285,700 22,106 92857T10 40,205 ELECTRIC UTILITY - 1.9% Allegheny Power System, Inc. 19,300 439 01741110 American Electric Power Co., Inc. 159,100 4,892 02553710 Baltimore Gas & Electric Co. 260,300 6,019 05916510 Carolina Power & Light Co. 163,400 4,248 14414110 Centerior Energy Corp. 342,700 3,770 15188310 Central & South West Corp. 134,500 3,329 15235710 Central Costanera SA ADR (a)(g) 102,100 3,114 15324M10 Central Louisiana Electric Co., Inc. 8,200 195 15389760 Cincinnati Gas & Electric Co. 16,900 406 17207010 Commonwealth Edison Co. 167,300 4,203 20279510 Consolidated Edison Co. of New York, Inc. 157,800 4,596 20911110 Detroit Edison Company 198,900 5,271 25084710 Dominion Resources, Inc. (Va.) 131,700 5,268 25747010 Duke Power Co. 66,700 2,410 26439910 Eastern Utilities Associates 187 5 27717310 Entergy Corp. 718,700 22,819 29364G10 FECSA Class A 139,300 1,042 35899E22 FPL Group, Inc. 115,200 3,816 30257110 General Public Utilities Corp. 144,700 4,142 37055010 Hawaiian Electric Industries, Inc. 9,200 298 41987010 Hong Kong Electric Holdings Ord. 4,200,500 11,578 43858010 Houston Industries, Inc. 137,700 4,888 44216110 Iberdrola SA 211,290 1,539 45499892 Idaho Power Co. 8,400 231 45138010 Illinois Power Co. 236,200 4,783 45209210 Kansas City Power & Light Co. 12,700 268 48513410 Korea Electric Power Corp. 373,800 11,115 50099B92 LG&E Energy Corp. 6,900 253 50191710 Long Island Lighting Co. 86,900 1,890 54267110 Montana Power Co. 15,100 370 61208510 NIPSCO Industries, Inc. 178,400 5,397 62914010 Nevada Power Co. 9,700 215 64142310 New England Electric Systems 23,500 855 64400110 New York State Electric & Gas Corp. 14,000 374 64984010 Niagara Mohawk Power Corp. 276,900 4,950 65352210 Northeast Utilities 21,500 508 66439710 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) UTILITIES - CONTINUED ELECTRIC UTILITY - CONTINUED Northern States Power Co. (Minn.) 65,500 $ 2,677 66577210 Ohio Edison Co. 130,800 2,485 67734710 Oklahoma Gas & Electric Co. 7,200 249 67885810 PSI Resources, Inc. 251,200 5,872 69363210 Pacific Gas & Electric Co. 228,000 6,640 69430810 PacifiCorp. 261,700 4,612 69511410 Peco Energy Co. 359,000 9,962 69330410 Pinnacle West Capital Corp. 16,000 320 72348410 Portland General Corp. 14,100 247 73650610 Public Service Co. of Colorado 9,600 280 74444810 Public Service Co. of New Mexico (a) 24,400 320 74449910 Public Service Enterprise Group, Inc. 189,900 5,293 74457310 Puget Sound Power & Light Co. 13,600 308 74533210 SCE Corp 262,100 4,325 78388210 Scottish Hydro-Electric PLC Ord. 120,917 688 81013395 Scottish Power PLC 269,834 1,655 81013T96 Sierra Pacific Resources 12,500 231 82642510 Southern Co. 280,000 5,355 84258710 Texas Utilities Co. 86,500 3,233 88284810 Union Electric Co. 87,200 3,074 90654810 Veba Vereinigte Elektrizetaets & Bergwerks AG Ord. 26,700 7,748 92239110 Verbund Gesellschaft 6,300 364 92299999 195,434 GAS - 0.2% Arkla, Inc. 204,900 1,383 04123710 Atlanta Gas Light Co. 5,700 197 04775310 Brooklyn Union Gas Co. (The) 8,900 211 11425910 Coastal Corp. (The) 49,200 1,501 19044110 Columbia Gas System, Inc. (The) (a) 111,400 2,910 19764810 Consolidated Natural Gas Co. 28,300 1,132 20961510 ENSERCH Corp. 65,000 861 29356710 El Paso Natural Gas Co. 5,500 201 28369587 Enron Corp. 10,000 305 29356110 Indiana Energy, Inc. 5,700 109 45470710 MCN Corp. 5,100 183 55267J10 National Fuel Gas Co. 9,300 279 63618010 Pacific Enterprises 35,000 709 69423210 Panhandle Eastern Corp. 205,000 4,305 69846210 Questar Corp. 7,500 227 74835610 Sonat, Inc. 141,600 3,929 83541510 COMMON STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) UTILITIES - CONTINUED GAS - CONTINUED Washington Gas Light Co. 4,400 $ 174 93883710 Westcoat Energy, Inc. 107,000 1,788 95751D10 Williams Companies, Inc. 175,000 4,200 96945710 24,604 TELEPHONE SERVICES - 1.4% ALC Communications Corp. (a) 50,000 1,662 00157530 Ameritech Corp. 408,000 15,555 03095410 BellSouth Corp. 96,200 5,556 07986010 British Telecommunications PLC Ord 1,850,301 10,788 11102110 Cable & Wireless PLC Ord. 664,944 4,498 12699910 Comsat Corp., Series 1 10,800 282 20564D10 LDDS Communications, Inc. (a) 79,570 1,910 50182L10 NYNEX Corp. 30,000 1,035 67076810 Pacific Telesis Group 50,000 2,631 69489010 Rochester Telephone Corp. 8,100 348 77175810 SIP Spa 5,417,700 16,111 78401792 Southwestern Bell Corp. 488,900 19,739 84533310 Sprint Corporation 356,100 12,196 85206110 Telecom Argentina Stet France 1,818,800 10,095 90899992 Telefonica Argentina Class B 986,100 6,193 87999D92 Telefonos de Mexico SA sponsored ADR representing shares Ord. Class L 706,600 42,573 87940378 151,172 WATER - 0.0% Generale des Eaux 4,572 2,079 37099210 TOTAL UTILITIES 413,494 TOTAL COMMON STOCKS (Cost $4,041,940) 4,361,784 PREFERRED STOCKS - 0.9% CONVERTIBLE PREFERRED STOCKS - 0.3% BASIC INDUSTRIES - 0.1% METALS & MINING - 0.1% Alumax, Inc., Series A. $4.00 866 96 02219720 Cyprus Amax Minerals Co., Series A, $4.00 8,533 589 23280920 PREFERRED STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) CONVERTIBLE PREFERRED STOCKS - CONTINUED BASIC INDUSTRIES - CONTINUED METALS & MINING - CONTINUED Reynolds Metals Co. $3.31 Prides 137,600 $ 6,742 76176350 7,427 DURABLES - 0.0% AUTOS, TIRES, & ACCESSORIES - 0.0% Chrysler Corp., Series A, $4.625 (g) 3,600 519 17119670 Ford Motor Co. (Del.), Series A, $4.20 25,000 2,453 34537020 2,972 ENERGY - 0.1% ENERGY SERVICES - 0.0% Chiles Offshore Corp. $1.50 (a) 109,500 2,628 16888720 OIL & GAS - 0.1% Unocal Corp. $3.50 (g) 100,000 5,200 91528920 TOTAL ENERGY 7,828 MEDIA & LEISURE - 0.0% LODGING & GAMING - 0.0% Bally Manufacturing Corp., Series D, $4.00 exchangeable (a) 1,157 47 05873220 NONDURABLES - 0.1% TOBACCO - 0.1% RJR Nabisco Holdings Corp., Series A. depositary shares representing 1/4 share 1,170,100 7,167 74960K40 TECHNOLOGY - 0.0% COMPUTER SERVICES & SOFTWARE - 0.0% Ceridian Corp. (a) 30,000 1,770 15677T40 TRANSPORTATION - 0.0% AIR TRANSPORTATION - 0.0% AMR Corp. $3.00 (a)(g) 100,200 4,359 00176588 PREFERRED STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) CONVERTIBLE PREFERRED STOCKS - CONTINUED TRANSPORTATION - CONTINUED TRUCKING & FREIGHT - 0.0% TNT Ltd. 8% 20,000 $ 32 93599293 TOTAL TRANSPORTATION 4,391 TOTAL CONVERTIBLE PREFERRED STOCKS 31,602 NONCONVERTIBLE PREFERRED STOCKS - 0.6% BASIC INDUSTRIES - 0.1% CHEMICALS & PLASTICS - 0.0% Henkel KGAA 10,000 3,769 42509392 IRON & STEEL - 0.1% Dongbu Steel Co. Ltd. (a) 44,100 1,158 25799L23 Geneva Steel Co. Series B, 14% exchangeable (a) 37,500 4,800 37225240 5,958 TOTAL BASIC INDUSTRIES 9,727 CONSTRUCTION & REAL ESTATE - 0.0% CONSTRUCTION - 0.0% Dongbu Construction (a) 3,100 45 25799M23 DURABLES - 0.0% AUTOS, TIRES, & ACCESSORIES - 0.0% Hyundai Motor Service Co. (a) 8,000 433 42199424 FINANCE - 0.1% CREDIT & OTHER FINANCE - 0.0% Tong Yang Securities (a) 107,222 2,139 93999B23 INSURANCE - 0.0% SAI N/C Risp 611,500 3,886 78399192 SAVINGS & LOANS - 0.1% California Federal Savings Bank 10 5/8%, Series B (a) 65,300 6,595 13020950 TOTAL FINANCE 12,620 PREFERRED STOCKS - CONTINUED VALUE (NOTE 1) SHARES (000S) NONCONVERTIBLE PREFERRED STOCKS - CONTINUED SERVICES - 0.0% Town & Country Corp. exchangeable (a) 156,070 $ 1,053 89202730 UTILITIES - 0.4% ELECTRIC UTILITY - 0.1% Long Island Lighting Co. $7.95 237,000 5,955 54267177 Public Service Co. of New Hampshire Series A 54,000 1,418 74448283 7,373 TELEPHONE SERVICES - 0.3% Stet Societa Finanziaria Telefonica Spa 10,925,600 33,187 85982592 TOTAL UTILITIES 40,560 TOTAL NONCONVERTIBLE PREFERRED STOCK 64,438 TOTAL PREFERRED STOCKS (Cost $78,764) 96,040 CORPORATE BONDS - 15.5% MOODY'S RATINGS (D) PRINCIPAL (UNAUDITED) AMOUNT (C) (000S) CONVERTIBLE BONDS - 0.2% BASIC INDUSTRIES - 0.0% IRON & STEEL - 0.0% Sterlite Industries euro 3 1/2%, 6/30/99 - $ 880 986 8597379A PAPER & FOREST PRODUCTS - 0.0% Stone Consolidated Corp. 8%, 12/31/03 - 2,100 1,973 86158KAA TOTAL BASIC INDUSTRIES 2,959 DURABLES - 0.1% TEXTILES & APPAREL - 0.1% Alpargatas SAIC 9%, 3/15/98 (g) - 5,000 4,600 020545AA Shinwon Corp. euro 5%, 12/31/08 - 500 565 98499DAA 5,165 CORPORATE BONDS - CONTINUED MOODY'S RATINGS (D) PRINCIPAL VALUE (NOTE 1) (UNAUDITED) AMOUNT (C) (000S) (000S) CONVERTIBLE BONDS - CONTINUED FINANCE - 0.1% CREDIT & OTHER FINANCE - 0.1% Industrial Credit & Investment Corp. 2 1/2%, 4/03/00 (g) - $ 1,910 $ 1,652 456052AA PIV Investment Cayman Ltd. 4 1/2%, 12/1/00 (g) - 1,150 943 693393AA SCICI Ltd. euro 3 1/2%, 4/1/04 (g) - 880 1,025 79599KAA 3,620 INDUSTRIAL MACHINERY & EQUIPMENT - 0.0% ELECTRICAL EQUIPMENT - 0.0% Daewoo Electric euro 5%, 12/31/07 - 1,700 2,822 23899CAB MEDIA & LEISURE - 0.0% LODGING & GAMING - 0.0% Bally Manufacturing Corp. 10%, 12/15/06 Caa 1,200 1,170 058732AB NONDURABLES - 0.0% BEVERAGES - 0.0% Jinro Ltd. euro 1/4%, 9/30/09 - 500 471 732994AA RETAIL & WHOLESALE - 0.0% TRADING COMPANIES - 0.0% Daewoo Corp. euro 1/4%, 12/31/08 - 385 439 23799BAB TECHNOLOGY - 0.0% COMMUNICATIONS EQUIPMENT - 0.0% Ericsson (L.M.) Telephone Co. 4 1/4%, 6/30/00 - 121 192 294821AA COMPUTERS & OFFICE EQUIPMENT - 0.0% Tae Il Media Co. Ltd. 1/2%, 12/31/98 - CHF 250 165 90799KAA Unisys Corp. 8 1/4%, 8/1/00 B2 2,000 2,850 909214AX 3,015 TOTAL TECHNOLOGY 3,207 TOTAL CONVERTIBLE BONDS 19,853 CORPORATE BONDS - CONTINUED MOODY'S RATINGS (D) PRINCIPAL VALUE (NOTE 1) (UNAUDITED) AMOUNT (C) (000S) (000S) NONCONVERTIBLE BONDS - 15.3% AEROSPACE & DEFENSE - 0.0% DEFENSE ELECTRONICS - 0.0% Trancor, Inc. 10 7/8%, 8/15/01 B2 $ 1,930 $ 1,949 892349AC BASIC INDUSTRIES - 1.8% CHEMICALS & PLASTICS - 0.7% Agricultural Mineral & Chemicals Corp. 10 3/4%, 9/30/03 B2 2,210 2,254 008522AA Desc (Societe De Fomento Industrial) euro: 11%, 12/15/97 - 9,263 9,865 252996AB 11%, 12/15/97 (g) - 2,290 2,439 252996AA G-I Holdings, Inc. 0%, 10/1/98 Ba3 29,890 18,233 36172FAB Harris Chemical Corp. 10 3/4%, 10/15/03 B3 1,470 1,492 413868AB IMC Fertilizer Group, Inc.: 9 1/4%, 10/1/00 B3 7,500 7,275 449669AH 10 1/8, 6/15/01 B3 9,000 9,180 449669AF Methanex Corp. 8 7/8%, 11/15/01 Ba3 2,860 2,767 59151KAA NL Industires, Inc. 11 3/4%, 10/15/03 B1 2,550 2,639 629156AE OSI Specialties, Inc. 9 1/4%, 10/1/02 B1 1,740 1,67 671042AA1 Sherritt Incorp. 11%, 3/31/04 BB- 3,260 2,341 824287AA Trans Resources, Inc. 14 1/2%, 9/1/96 B2 980 1,088 893320AB UCC Corp. 9%, 9/1/00 B1 13,040 12,714 90915TAA UCC Investors Holding, Inc. 10 1/2%, 5/1/02 B2 3,685 3,832 90263EAB 77,790 IRON & STEEL - 0.1% Acindar Industrial euro: 10 1/2%, 12/10/94 - 4,134 4,030 0045149A 9 1/2%, 10/23/95 - 500 487 0045149G WCI Steel, Inc. 10 1/2%, 3/1/02 B1 2,470 2,594 92923JAB 7,111 METALS & MINING - 0.1% Sifto Canada, Inc. 8 1/2%, 7/15/00 B1 7,365 7,034 826549AA PAPER & FOREST PRODUCTS - 0.9% Alto Parana (May) 12%, 3/4/95 (g) - 14,750 9,587 021999AA Container Corp. America: 14%, 12/1/01 B3 11,730 12,903 210741AG 9 3/4%, 4/1/03 B2 4,420 4,332 210741AJ CORPORATE BONDS - CONTINUED MOODY'S RATINGS (D) PRINCIPAL VALUE (NOTE 1) (UNAUDITED) AMOUNT (C) (000S) (000S) NONCONVERTIBLE BONDS - CONTINUED BASIC INDUSTRIES - CONTINUED PAPER & FOREST PRODUCTS - CONTINUED Fort Howard Paper Co.: 8 1/4%, 2/1/02 B1 $ 6,620 $ 6,090 347460AJ 9%, 2/1/06 B2 30,770 27,847 347460AK Repap Wisconsin, Inc. 9 1/4%, 2/1/02 B1 19,820 19,027 76026LAA 9 7/8%, 5/1/06 B3 3,280 3,116 76026LAB Stone Container Corp. 9 7/8%, 2/1/01 B1 CAD 11,260 10,303 861589AK Valcor, Inc. 9 5/8%, 11/1/03 B1 1,200 1,152 918884AA 94,357 TOTAL BASIC INDUSTRIES 186,292 CONGLOMERATES - 0.1% American Standard, Inc.: 9 7/8%, 6/1/01 B1 1,660 1,610 029717AH 12 3/4%, 12/31/03 B3 7,365 7,439 029717AK Sequa Corp. 9 3/8%, 12/15/03 B3 1,670 1,586 817320AG 10,635 CONSTRUCTION & REAL ESTATE - 2.6% BUILDING MATERIALS - 2.2% Adience, Inc. 11%, 6/15/02 - 3,975 3,140 006905AA Cemex SA 8 7/8%, 6/10/98 (g) Ba2 62,180 62,649 151290AG Cemex SA and Tolmex SA de CV: euro 8 7/8%, 6/10/98 Ba2 37,130 37,410 1512909F 10%, 11/5/99 Ba2 16,170 16,817 1512909D Tolmex SA de CV 8 3/8%, 11/1/03 Ba2 45,485 42,301 889557AA Triangle Pacific Corp. 10 1/2%, 8/1/03 B2 6,510 6,543 895912AC USG Corp.: Series B, 10 1/4%, 12/15/02 B2 8,460 8,608 903293AL 8%, 12/15/95 B3 10,400 10,400 903293AH 9%, 12/15/98 B3 9,471 9,471 903293AJ 9 1/4%, 9/15/01 (g) - 25,245 24,993 90399BAX 10 1/4%, 12/15/02 B2 13,033 13,228 903293AK 235,560 CORPORATE BONDS - CONTINUED MOODY'S RATINGS (D) PRINCIPAL VALUE (NOTE 1) (UNAUDITED) AMOUNT (C) (000S) (000S) NONCONVERTIBLE BONDS - CONTINUED CONSTRUCTION & REAL ESTATE - CONTINUED CONSTRUCTION - 0.4% Blount, Inc. 9%, 6/15/03 B2 $ 3,685 $ 3,704 095173AB Empresas ICA Sociedad Controladora SA de CV 9 3/4%, 2/11/98 (g) - 4,510 4,651 292448AA ICA euro 9 3/4%, 2/11/98 - 7,421 7,653 2924489A Kaufman & Broad Home Corp. 9 3/8%, 5/1/03 Ba3 1,200 1,188 486168AC MDC Holdings, Inc. 11 1/8%, 12/15/03 - 2,060 2,060 552676AH Ryland Group, Inc. 9 5/8%, 6/1/04 Ba3 3,415 3,261 783764AC US Home Corp. 9 3/4%, 6/15/03 Ba3 18,395 18,349 911920AB Webb (Del E.) 9%, 2/15/06 B2 1,980 1,812 947423AF 42,678 REAL ESTATE - 0.0% Baldwin Co. 10 3/8%, 8/1/03 - 310 282 057826AC TOTAL CONSTRUCTION & REAL ESTATE 278,520 DURABLES - 0.3% AUTOS, TIRES, & ACCESSORIES - 0.2% Grupo Dina (Consorcio): euro 10 1/2%, 11/18/97 - 2,200 2,282 210996AB 10 1/2%, 11/18/97 (g) - 7,700 7,989 210996AA Grupo Imsa SA de CV euro 8 3/4%, 7/7/98 (g) - 6,250 6,141 40048TAA Navistar Financial Corp. 8 7/8%, 11/15/98 B2 5,490 5,407 638902AH 21,819 TEXTILES & APPAREL - 0.1% Alpargatas SA euro 9%, 3/15/98 - 930 856 0205459A Hat Brands, Inc. 12 5/8%, 9/15/02 - 4,910 5,278 418730AA Westpoint Stevens Inc.: 8 3/4%, 12/15/01 B1 4,270 4,014 961238AA 9 3/8%, 12/15/05 B2 2,935 2,759 961238AB 12,907 TOTAL DURABLES 34,726 CORPORATE BONDS - CONTINUED MOODY'S RATINGS (D) PRINCIPAL VALUE (NOTE 1) (UNAUDITED) AMOUNT (C) (000S) (000S) NONCONVERTIBLE BONDS - CONTINUED ENERGY - 0.7% ENERGY SERVICES - 0.5% Baroid Corp. 8%, 4/15/03 Ba1 $ 5,500 $ 5,748 068277AA Falcon Drilling, Inc. 9.75%, 1/15/01 (g) B2 7,480 7,181 305914AA TransTexas Gas Corp. 10 1/2%, 9/1/00 B1 41,355 43,009 893895AA 55,938 INDEPENDENT POWER - 0.1% California Energy Corp. 0%, 1/15/04 (e) Ba3 8,480 6,360 130190AC Consolidated Hydro 0%, 7/15/03 (e) - 6,265 3,790 209349AC 10,150 OIL & GAS - 0.1% HS Resources, Inc. 9 7/8%, 12/1/03 B1 2,740 2,671 404297AA Mesa Capital Corp. secured 0%, 6/30/98 (e) B3 9,640 8,483 590910AF Oryx Energy Co. 9 3/4%, 9/15/98 Ba2 2,050 2,081 68763FAA 13,235 TOTAL ENERGY 79,323 FINANCE - 2.4% BANKS - 0.9% Bancomer SA: euro 8%, 7/7/98 (g) Ba2 25,815 25,428 059682AB 9%, 6/1/00 (g) - 22,500 22,500 059682AA Bancomer SNC euro 8%, 7/7/98 - 39,010 38,425 05999KAT Midlantic Corp. 9 1/4%, 9/1/99 Baa3 1,840 1,987 59780EAC 88,340 CREDIT & OTHER FINANCE - 0.4% GPA Delaware, Inc.: 8 1/2%, 3/3/97 - 4,400 3,636 3619289C 8 5/8%, 1/15/99 - 3,100 2,388 3619289B Lomas Mortgage USA, Inc. 10 1/4%, 10/1/02 Ba1 19,165 19,357 54154LAB Secured Finance, Inc. 11.18%, 12/15/04 - 17,000 18,360 81371F9A 43,741 INSURANCE - 1.0% American Annuity Group, Inc.: 9 1/2%, 8/15/01 Ba3 11,900 11,394 023840AB 11 1/8%, 2/01/03 B2 10,378 10,560 023840AA CORPORATE BONDS - CONTINUED MOODY'S RATINGS (D) PRINCIPAL VALUE (NOTE 1) (UNAUDITED) AMOUNT (C) (000S) (000S) NONCONVERTIBLE BONDS - CONTINUED FINANCE - CONTINUED INSURANCE - CONTINUED American Financial Corp. s.f.: 12%, 9/3/99 - $ 20,326 $ 20,275 026087AR 13 1/2%, 9/14/04 - 5,895 5,895 026087BB Americo Life, Inc. 9 1/4%, 6/1/05 - 7,365 7,010 03060NAB Conseco, Inc. 8 1/8%, 2/15/03 Ba1 7,375 7,286 208464AD Nacolah, Inc. 9 1/2%, 12/1/03 B1 2,840 2,698 629667AA Penncorp Financial Group, Inc. 9 1/4%, 12/15/03 B1 3,800 3,553 708094AA Reliance Financial Services: 9.273%, 11/1/00 - 7,560 7,560 759462AD 10.36%, 12/1/00 - 16,090 16,090 759462AF Reliance Group: 9%, 11/15/00 Ba3 9,005 8,285 759464AG 9 3/4%, 11/15/03 B1 8,540 7,985 759464AH 108,591 SAVINGS & LOANS - 0.1% Webster Financial Corp. 8 3/4%, 6/30/00 B1 3,685 3,777 947890AA Western Financial Savings Bank 8 1/2%, 7/1/03 Ba3 7,500 7,216 958202FK 10,993 TOTAL FINANCE 251,665 HEALTH - 0.5% MEDICAL FACILITIES MANAGEMENT - 0.5% American Medical International, Inc. 9 1/2%, 4/15/06 - 5,890 5,831 027429AZ Health South Rehabilitation Co. 9 1/2%, 4/1/01 Ba3 4,380 4,303 421924AC Healthtrust, Inc. - The Hospital Co.: 10 3/4%, 5/1/02 B1 23,756 25,182 42221HAF 8 3/4%, 3/15/05 B1 8,890 8,446 42221HAG Hospital Corp. America 8%, 4/15/96 Ba2 3,950 4,099 441065AS 47,861 CORPORATE BONDS - CONTINUED MOODY'S RATINGS (D) PRINCIPAL VALUE (NOTE 1) (UNAUDITED) AMOUNT (C) (000S) (000S) NONCONVERTIBLE BONDS - CONTINUED INDUSTRIAL MACHINERY & EQUIPMENT - 0.1% ELECTRICAL EQUIPMENT - 0.1% Panamasat LP/Panamasat Capital Corp. secured 9 3/4%, 8/1/00 Ba3 $ 1,980 $ 1,990 69830CAA Specialty Equipment Cos., Inc. 11 3/8%, 12/1/03 B3 6,845 7,016 847497AB 9,006 INDUSTRIAL MACHINERY & EQUIPMENT - 0.0% Thermadyne Holdings Corp.: 10 1/4%, 5/1/02 - 23 23 883435AA 10 3/4%, 11/1/03 - 32 33 883435AB 56 TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 9,062 MEDIA & LEISURE - 3.7% BROADCASTING - 1.1% Act III Broadcasting, Inc. 9 5/8%, 12/15/03 B3 1,510 1,450 00503KAA Continental Cablevision, Inc.: 8 5/8%, 8/15/03 Ba2 1,840 1,776 211177AF 9%, 9/1/08 Ba2 2,650 2,544 211177AG Cook Inlet Communications Corp. 10 3/4%, 9/10/98 (g) - 14,237 14,095 2161719C Great American TV & Radio 9 1/2%, 12/31/99 - 12,250 12,066 389990AA Helicon Group LP/Helicon Cap Corp. 10 3/4%, 10/15/03 Caa 5,150 4,841 423265AB Rogers Cablesystems Corp. 9.65%, 1/15/14 Ba1 CAD 3,340 2,257 775100AC SCI Television, Inc. secured: 7 1/2%, 6/30/98 (i) - 37,316 35,823 783895AK 11%, 6/30/05 - 40,890 41,094 783895AJ SPI Holding, Inc. reset pay-in-kind 11 1/2%, 12/1/02 - 5,575 5,185 78462GAF 121,131 ENTERTAINMENT - 0.1% Live Entertainment, Inc. 12%, 9/15/94 (f) - 8,000 8,000 5380329B LEISURE DURABLES & TOYS - 0.1% Coleman Holdings 0%, 5/27/98 - 10,578 6,664 193551AC CORPORATE BONDS - CONTINUED MOODY'S RATINGS (D) PRINCIPAL VALUE (NOTE 1) (UNAUDITED) AMOUNT (C) (000S) (000S) NONCONVERTIBLE BONDS - CONTINUED MEDIA & LEISURE - CONTINUED LODGING & GAMING - 1.7% Ballys Casino Holdings, 10 1/2%, 6/15/98 (g) B3 $ 36,165 $ 22,784 05873EAA Ballys Grand, Inc. 10 3/8%, 12/15/03 (g) B2 4,920 4,846 05873JAD Ballys Park Place Funding, Inc. 9 1/4%, 3/15/04 B1 13,110 12,192 058734AC California Hotel Finance Corp. gtd. 11%, 12/1/02 B2 40,660 42,795 13032RAG Embassy Suites, Inc.: gtd. 8 3/4%, 3/15/00 (g) B1 22,145 21,702 290807AH 10 7/8%, 4/15/02 B1 17,280 18,749 290807AF First Mexican Acceptance Corp. euro 10 3/4%, 9/15/96 - 1,900 1,939 321998AA Fitzgeralds Gaming Corporation unit bond (1000 bonds and 1.54 stock warrants) 13%, 3/15/96 (g) - 1,640 1,640 338270AA GNS Finance Corporation 9 1/4%, 3/15/03 B2 2,210 2,166 361916AK Grand Casino Resorts, Inc. gtd. 1st mtg. 12 1/2%, 2/1/00 - 8,840 9,636 385268AA Host Marriott Corp.: 9 1/8%, 12/1/00 B1 690 677 441080AD 10 1/2%, 5/1/06 B1 14,067 14,085 441080AH 11%, 5/1/07 B1 2,100 2,108 441080AJ Host Marriott Hospitality, Inc.: 10 5/8%, 2/1/00 B1 1,735 1,735 441080AC 11 1/4%, 7/18/05 B1 3,220 3,252 441080AG Lady Luck Gaming Finance Corp. 10 1/2%, 3/1/01 (g) B1 4,850 4,607 505903AA Ocean Showboat Financial 9 1/4%, 5/1/08 - 5,180 4,986 6750219A Red Roof Inns 9 5/8%, 12/15/03 (g) B3 11,740 11,270 757005AA Resorts International, Inc. secured pay-in-kind 15%, 4/15/94 (b) Ca 1,862 1,151 761185AH Trump Plaza Holding Assoc. pay-in- kind 12 1/2%, 6/15/03 Caa 89 82 89817EAB 182,402 PUBLISHING - 0.5% GACC Holding Co. 9 3/4%, 3/1/04 (f) - 34,240 33,726 3613549B Marvel Holdings 0%, 4/15/98 B3 3,450 2,096 573845AA News America Holdings, Inc. 8 1/2%, 2/15/05 Ba1 21,605 22,232 652478AJ 58,054 CORPORATE BONDS - CONTINUED MOODY'S RATINGS (D) PRINCIPAL VALUE (NOTE 1) (UNAUDITED) AMOUNT (C) (000S) (000S) NONCONVERTIBLE BONDS - CONTINUED MEDIA & LEISURE - CONTINUED RESTAURANTS - 0.2% American Restaurant Group, Inc. 12%, 9/15/98 B2 $ 630 $ 598 029309AB Family Restaurants, Inc. 9 3/4%, 2/1/02 B1 12,750 11,985 307054AA Flagstar Corp.: 10 7/8%, 12/1/02 B1 1,300 1,287 11 1/4%, 11/1/04 B2 4,805 4,709 338473AB 18,579 TOTAL MEDIA & LEISURE 394,830 NONDURABLES - 1.1% BEVERAGES - 0.3% Canandaigua Wine, Inc. 8 3/4%, 12/15/03 B1 4,675 4,348 137219AB Dr. Pepper/Seven-Up Companies, Inc. 0%, 11/1/02 (e) B3 3,680 2,834 256131AD Fomento Economico Mexicano SA de CV euro 9 1/2%, 7/22/97 - 7,140 7,318 3444189A Grupo Embotellador de Mexico SA de CV: euro 10 3/4%, 11/19/97 Ba2 9,870 10,462 40048J9A 10 3/4%, 11/19/97 (g) Ba2 800 848 40048JAA Heileman Acquisition Corp. 9 5/8%, 1/31/04 B3 4,350 4,089 422878AA 29,899 FOODS - 0.1% Chiquita Brands 9 1/8%, 3/1/04 B1 1,650 1,543 170032AK Doskocil Cos., Inc. 9 3/4%, 7/15/00 B2 4,195 3,985 258486AD Specialty Foods Corp. 10 1/4%, 8/15/01 B2 3,680 3,533 847499AC 9,061 HOUSEHOLD PRODUCTS - 0.5% Revlon Consumer Products Corp.: 9 1/2%, 6/1/99 B2 8,810 8,149 761519AG 9 3/8%, 4/1/01 B2 16,725 14,802 761519AF 10 1/2%, 2/15/03 B3 13,680 12,244 761519AE Revlon World Wide secured 0%, 3/15/98 B3 53,300 23,985 76154KAB 59,180 CORPORATE BONDS - CONTINUED MOODY'S RATINGS (D) PRINCIPAL VALUE (NOTE 1) (UNAUDITED) AMOUNT (C) (000S) (000S) NONCONVERTIBLE BONDS - CONTINUED NONDURABLES - CONTINUED TOBACCO - 0.2% Empresas La Moderna SA de CV: euro 10 1/4%, 11/12/97 - $ 2,400 $ 2,484 2924499B 10 1/4%, 11/12/97 (g) - 15,720 16,270 292449AA 18,754 TOTAL NONDURABLES 116,894 RETAIL & WHOLESALE - 0.8% APPAREL STORES - 0.2% AnnTaylor, Inc. 8 3/4%, 6/15/00 B1 2,950 2,861 036117AC Apparel Retailers, Inc. 12 3/4%, 8/15/05 Caa 7,820 4,536 037795AB Lamonts Apparel Corp. 10 1/4%, 11/1/99 - 12,317 11,917 513628AB 19,314 DRUG STORES - 0.0% Eckerd Jack Corp. (Del) 9 1/4%, 2/15/04 B2 1,375 1,258 278763AE GENERAL MERCHANDISE STORES - 0.4% Controladora Comercial Mexicana SA de CV: euro 8 3/4%, 4/21/98 - 12,750 12,718 212996AA 8 3/4%, 4/21/98 (g) - 250 249 21238AAA Dairy Mart 10 1/4%, 3/15/04 B3 4,920 4,736 233860AB Hills Stores Co. 10 1/4%, 9/30/03 - 6,190 6,190 431692AA Parisian, Inc. 9 7/8%, 7/15/03 B3 10,505 9,770 700147AB Service Merchandise Inc. 9%, 12/15/04 Ba3 7,375 7,006 817587AC 40,669 GROCERY STORES - 0.1% General Nutrition, Inc. 11 3/8%, 3/1/00 B3 3,219 3,501 370471AC Penn Traffic Co. 9 5/8%, 4/15/05 B2 6,410 6,282 707832AD Ralph's Grocery Co. 9%, 4/1/03 B2 2,415 2,318 751253AD 12,101 RETAIL & WHOLESALE, MISCELLANEOUS - 0.1% Color Tile, Inc. 10 3/4%, 12/15/01 B2 2,385 2,349 196267AD Finlay Fine Jewelry Corp. 10 5/8%, 5/1/03 B1 4,045 4,025 317887AA 6,374 TOTAL RETAIL & WHOLESALE 79,716 CORPORATE BONDS - CONTINUED MOODY'S RATINGS (D) PRINCIPAL VALUE (NOTE 1) (UNAUDITED) AMOUNT (C) (000S) (000S) NONCONVERTIBLE BONDS - CONTINUED SERVICES - 0.2% ADVERTISING - 0.0% Outdoor Systems, Inc. 10 3/4%, 8/15/03 B2 $ 4,195 $ 4,195 690057AA PRINTING - 0.1% Continental Graphic Corp. 11.64%, 10/31/98 (g) - 9,286 7,800 21145E9B SERVICES - 0.1% Town & Country Corp.: 11 1/2%, 9/15/97 B 2,863 2,806 892027AC 13%, 5/31/98 - 3,509 3,509 892027AB 6,315 TOTAL SERVICES 18,310 TECHNOLOGY - 0.2% COMPUTERS & OFFICE EQUIPMENT - 0.1% Unisys Corp. 9 3/4%, 9/15/96 Ba3 10,860 11,335 909214AY ELECTRONICS - 0.1% Berg Electronics 11 3/8%, 5/1/03 B3 1,865 1,921 083727AB Grupo Condumex SA de CV 7 3/8%, 7/27/98 (g) - 4,000 3,770 399904AC 5,691 TOTAL TECHNOLOGY 17,026 TRANSPORTATION - 0.2% RAILROADS - 0.1% Southern Pacific Rail Corp. 9 3/8%, 8/15/05 Ba3 12,020 11,930 843584AA Transtar Holding Corp. 0%, 12/15/03 (e)(g) - 8,200 4,100 89388QAA 16,030 SHIPPING - 0.1% Eletson Holdings, Inc. 9 1/4%, 11/15/03 Ba2 1,170 1,147 286204AA International Shipholding Corp., 9%, 7/1/03 B1 1,180 1,115 460321AA Sea Containers Ltd. 9 1/2%, 7/1/03 Ba3 5,420 5,149 811371AD 7,411 TOTAL TRANSPORTATION 23,441 CORPORATE BONDS - CONTINUED MOODY'S RATINGS (D) PRINCIPAL VALUE (NOTE 1) (UNAUDITED) AMOUNT (C) (000S) (000S) NONCONVERTIBLE BONDS - CONTINUED UTILITIES - 0.6% CELLULAR - 0.3% Cencall Communications Corp. 0%, 1/15/04 Caa $ 14,770 $ 8,714 151297AB Centennial Cell Corp. 8 7/8%, 11/1/01 - 3,320 3,088 15133VAA Nextel Communications, Inc. 0%, 8/15/04 (e) B3 23,570 14,083 65332VAB Paging Network, Inc. 8 7/8%, 2/1/06 B2 4,480 4,166 695542AB 30,051 ELECTRIC UTILITY - 0.0% AES Corp. 9 3/4%, 6/15/00 Ba2 4,420 4,547 00130HAB TELEPHONE SERVICES - 0.3% MFS Communications 0%, 1/15/04 B3 53,730 31,567 55272TAA TOTAL UTILITIES 66,165 TOTAL NONCONVERTIBLE BONDS 1,616,415 TOTAL CORPORATE BONDS (Cost $1,686,910) 1,636,268 U.S. TREASURY OBLIGATIONS - 0.3% U.S. Treasury Bills, yields at date of purchase 2.93%-3.62%, 4/7/94-7/7/94 (h) (Cost $34,296) - 34,450 34,298 912794J8 U.S. GOVERNMENT AGENCY - COLLATERALIZED MORTGAGE OBLIGATIONS - 0.1% Federal National Mortgage Association (j): 8 1/2%, 4/1/17 Aaa 6,957 1,774 31364HBX 8 1/2%, 8/1/22 Aaa 15,754 4,214 31364HRJ TOTAL U.S. GOVERNMENT AGENCY - COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $15,991) 5,988 FOREIGN GOVERNMENT OBLIGATIONS - 17.2% MOODY'S RATINGS (D) PRINCIPAL VALUE (NOTE 1) (UNAUDITED) AMOUNT (C) (000S) (000S) Argentina Republic: BOCON 3 1/4%, 4/1/01 B1 $ 228,407 $ 158,272 039995AF Brady: euro 5%, 3/31/05 - 35,000 24,807 039995AU euro 4%, 3/31/23 B1 135,000 70,031 039995AD 5%, 3/31/05 (g)(i) - 290 205 039995AT 4%, 3/31/23 (g) - 9,399 4,876 0401149Y 4%, 3/31/23 (g) - 39,500 20,491 0401149G Brazil Republic IDU euro 8 3/4%, 1/1/01 B2 151,421 107,698 1057569E Danish Government Bullet: 8%, 5/15/03 Aa1 DKK 1,252,200 204,179 249998AG 7%, 12/15/04 Aa1 DKK 1,649,500 251,791 249998AV French Government OAT: 8 1/2%, 4/25/03 Aaa FRF 896,250 178,498 351996AQ 6 3/4%, 10/25/03 Aaa FRF 425,300 75,964 351996BC Government of New Zealand 8%, 4/15/04 Aa3 NZD 80,400 49,561 6501629K Mexican Government: Adjustabonos (l): 6.70%, 5/4/94 AA- MXN 18,900 7,716 597998RV 5.20%, 6/30/94 - MXN 90,461 36,217 597998SR 4.80%, 9/1/94 AA- MXN 18,000 7,094 597998SD Brady: 4.1875%, 12/31/19 (i) Ba3 55,800 46,105 597998QD 4.3125%, 12/31/19 (i) Ba3 40,500 33,463 597998NC 6 1/4% 12/31/19 Ba3 408,750 283,059 597998MM Brady Discount: 4.3125%, 12/31/19 (i) Ba3 135,700 112,122 597998RJ Cetes 0%, 6/16/94 - MXN 348,000 101,075 597998US Morocco Trust 4 1/2%, 1/3/09 (g)(i) - 14,500 9,171 617727AA Province of Chaco, Argentina 11 7/8%, 9/10/97 (f) - 9,700 9,724 74399JAA Province of Cordoba, Argentina 10%, 1/28/95 - 17,000 16,788 74399HAC Siderurgica Brasileiras SA inflation indexed 6%, 8/15/99 (l) - BRC 40,164 5,591 82599PAA Trinidad & Tobago 9 3/4%, 11/3/00 (g) Ba2 3,000 2,876 896292AB TOTAL FOREIGN GOVERNMENT OBLIGATIONS (Cost $1,891,176) 1,817,374 MUNICIPAL SECURITIES - 0.0% MOODY'S RATINGS (D) PRINCIPAL VALUE (NOTE 1) (UNAUDITED) AMOUNT (C) (000S) (000S) Louisiana Housing Fin. Agcy. Mtg. Rev. Taxable- Securitized Multifam. 8.61%, 8/1/96 (b) D $ 1,500 $ 975 546265PL Louisiana State Agricultural Financial Auth. Agricultural Rev. 8 1/4%, 10/1/96 (b) D 5,528 3,579 546418AB TOTAL MUNICIPAL SECURITIES (Cost $4,941) 4,554 OTHER SECURITIES - 8.4% INDEXED SECURITIES - 8.0% AIG Matched Funding Corp.: 3.5862%, 9/14/94 (coupon inversely indexed to HELIBOR and principal indexed to value of 2-year Finnish securities, both multiplied by 6) (k) 11,875 10,925 012994AK 4.4655%, 9/16/94 (coupon inversely indexed to HELIBOR and principal indexed to value of 3-year Finnish securities, both multiplied by 4) (k) 3,950 3,529 012994AJ Bankers Trust Company: (indexed to corn price) 3.1875%, 5/6/94 3,315 2,996 0669919T 13.23%, 8/31/94 (coupon inversely indexed to HELIBOR and principal indexed to value of 2-year Finnish securities, both multiplied by 6) (k) 3,450 3,419 0669918F 10.515%, 9/2/94 (coupon inversely indexed to HELIBOR and principal indexed to value of 3-year Finnish securities, both multiplied by 4) (k) 3,750 3,426 0669918H 0%, 9/26/94 (coupon inversely indexed to CAD Banker's Acceptance rate and principal indexed to value of 1-year Canadian securities, both multiplied by 13) (k) 11,900 9,738 0669918M 0%, 11/3/94 (coupon inversely indexed to ITL LIBOR and principal indexed to value of 2-year Italian securities, both multiplied by 8) (k) 6,800 5,832 0669918X 2.0186%, 11/3/94 (coupon inversely indexed to HELIBOR and principal indexed to value of 2-year Finnish securities, both multiplied by 8) (k) 6,800 6,244 0669918V 2.482%, 11/4/94 (coupon inversely indexed to HELIBOR and principal indexed to value of 2-year Finnish securities, both multiplied by 8) (k) 3,400 3,113 0669918Y 2.322%, 11/9/94 (coupon inversely indexed to HELIBOR and principal indexed to value of 2-year Finnish securities, both multiplied by 8) (k) 5,250 4,694 0669919B 1.1386%, 11/14/94 (coupon inversely indexed to HELIBOR and principal indexed to value of 2-year Finnish securities, both multiplied by 8) (k) 3,000 2,601 0669919C 4%, 11/15/94 (indexed to 7-year U.S. swap spread divided by .36%) 5,000 3,905 0669915T OTHER SECURITIES - CONTINUED PRINCIPAL AMOUNT VALUE (NOTE 1) (000S) (C) (000S) INDEXED SECURITIES - CONTINUED Bankers Trust Company - continued 0%, 11/16/94 (coupon inversely indexed to ITL LIBOR and principal indexed to value of 2-year Italian securities, both multiplied by 8.5) (k) $ 19,300 $ 17,659 0669919D 1.1125%, 11/16/94 (coupon inversely indexed to HELIBOR and principal indexed to value of 2-year Finnish securities, both multiplied by 8) (k) 9,700 8,381 0669919F 0%, 12/5/94 (coupon inversely indexed to ITL LIBOR and principal indexed to value of 2-year Italian securities, both multiplied by 8) (k) 6,800 6,650 0669919G 3.282%, 12/5/94 (coupon inversely indexed to HELIBOR and principal indexed to value of 2-year Finnish securities, both multiplied by 8) (k) 5,900 4,936 0669919H 2.17%, 12/6/94 (coupon inversely indexed to HELIBOR and principal indexed to value of 2-year Finnish securities, both multiplied by 8) (k) 3,000 2,510 0669919J 0%, 12/8/94 (coupon inversely indexed to ITL LIBOR and principal indexed to value of 2-year Italian securities, both multiplied by 8) (k) 6,700 6,750 0669919N 5.781%, 12/8/94 (coupon inversely indexed to GBP LIBOR and principal indexed to value of 2-year United Kingdom securities, both multiplied by 10) (k) 15,200 10,414 0669919Q 7.275%, 3/1/95 (coupon inversely indexed to JPY LIBOR and principal indexed to value of 2-year Japanese securities, both multiplied by 6) (k) 6,400 6,085 06699DAS 0%, 3/3/95 (coupon inversely indexed to ITL LIBOR and principal indexed to value of 2-year Italian securities, both multiplied by 8) (k) 17,900 16,010 06699DAP 6.75%, 3/3/95 (coupon inversely indexed to GBP LIBOR and principal indexed to value of 1-year United Kingdom securities, both multiplied by 10) (k) 12,100 10,469 06699DAT 10.80%, 3/3/95 (coupon inversely indexed to HELIBOR and principal indexed to value of 2-year Finnish securities, both multiplied by 8) (k) 14,100 10,789 06699DAQ Citibank Nassau: 0%, 11/3/94 (coupon inversely indexed to ITL LIBOR and principal indexed to value of 2-year Italian securities, both multiplied by 8) (k) 17,000 14,348 223991AV 0%, 11/4/94 (coupon inversely indexed to ITL LIBOR and principal indexed to value of 2-year Italian securities, both multiplied by 8) (k) 9,700 8,362 223991AW 0%, 11/15/94 (coupon inversely indexed to ITL LIBOR and principal indexed to value of 2-year Italian securities, both multiplied by 8.5) (k) 20,000 18,052 223991BA OTHER SECURITIES - CONTINUED PRINCIPAL AMOUNT VALUE (NOTE 1) (000S) (C) (000S) INDEXED SECURITIES - CONTINUED Citibank Nassau - continued 0%, 12/7/94 (coupon inversely indexed to CAD Banker's Acceptance rate and principal indexed to value of 1-year Canadian securities, both multiplied by 13) (k) $ 2,800 $ 1,767 0669919L 0%, 12/8/94 (coupon inversely indexed to CAD Banker's Acceptance rate and principal indexed to value of 1-year Canadian securities, both multiplied by 13) (k) 1,900 1,164 223991BK 0%, 12/8/94 (coupon inversely indexed to ITL LIBOR and principal indexed to value of 2-year Italian securities, both multiplied by 8) (k) 10,000 9,869 223991BJ 7.315%, 12/8/94 (coupon inversely indexed to GBP LIBOR and principal indexed to value of 2-year United Kingdom securities, both multiplied by 10) (k) 13,400 9,057 223991BL 0%, 2/3/95 (coupon inversely indexed to 1-month CAD Banker's Acceptance rate and principal indexed to value of 4-year Canadian securities, both multiplied by 9) (k) 6,500 502 223991BV 0%, 3/3/95 (coupon inversely indexed to ITL LIBOR and principal indexed to value of 2-year Italian securities, both multiplied by 8) (k) 32,600 29,822 223991CC 0%, 3/3/95 (coupon inversely indexed to STIBOR and principal indexed to 2-year Swedish securities, both multiplied by 9) (k) 9,100 6,749 223991CB 7.775%, 3/3/95 (coupon inversely indexed to JPY LIBOR and principal indexed to value of 2-year Japanese securities, both multiplied by 6) (k) 20,900 20,016 223991CE 8.055%, 3/3/95 (coupon inversely indexed to GBP LIBOR and principal indexed to value of 1-year United Kingdom securities, both multiplied by 10) (k) 24,200 21,054 223991CF 0%, 3/7/95 (coupon inversely indexed to ITL LIBOR and principal indexed to value of 2-year Italian securities, both multiplied by 8) (k) 13,600 13,274 223991CH Disney Corp. 6.9386%, 12/9/94 (inversely indexed to 6-month BP swap rate, multiplied by 10) (i) 16,700 11,460 25469HBF du Pont (E.I.) de Nemours & Co.: 0%, 3/8/95 (coupon inversely indexed to STIBOR and principal indexed to value of 2-year Swedish securities, both multiplied by 9) (k) 12,800 9,304 26353L9B 7.2192%, 3/8/95 (coupon inversely indexed to GPB LIBOR and principal indexed to value of 1-year United Kingdom securities, both multiplied by 10) (k) 12,000 10,429 26353L9C Emerson Electric Company 6.115%, 10/24/94 (coupon inversely indexed to LIBOR and principal indexed to value of 2-year United Kingdom securities, both multiplied by 10) (k) 18,900 15,095 29101LAR OTHER SECURITIES - CONTINUED PRINCIPAL AMOUNT VALUE (NOTE 1) (000S) (C) (000S) INDEXED SECURITIES - CONTINUED Finnish Export Credit 4.45%, 4/15/96 (indexed to spot minus 12-month oil futures prices, based on 30 bbl. per $100 par) $ 12,500 $ 7,126 31899HAD Goldman Sachs Group L.P.: (indexed to aluminum price) 3.299%, 8/19/94 9,700 10,831 540992BA (indexed to cattle price) 3.187% - 3.346%, 8/19/94 54,000 53,841 540992CB (indexed to cocoa price) 3.0812% - 3.1859%, 4/20/94 1,171 1,098 540992AB (indexed to coffee price) 3.18% - 3.1859%, 4/20/94 2,190 2,266 540992AN (indexed to corn price) 3.1% - 3.11%, 5/6/94 17,700 15,647 540992BD (indexed to cotton price) 3.288% - 3.346%, 8/19/94 9,820 11,158 540992BF (indexed to crude oil price) 3.11% - 3.49%, 4/27/94 52,560 50,652 540992AV (indexed to gold price) 3.2198% - 3.2235%, 8/19/94 8,400 8,428 540992AE (indexed to heating oil price) 3.028% - 3.11%, 4/27/94 37,590 39,421 540992BN (indexed to hog price) 3.215% - 3.934%, 8/19/94 27,850 27,355 540992BP (indexed to lead price) 3.2235% - 3.683%, 8/19/94 3,246 3,053 38142T9M (indexed to natural gas price) 3.028% - 3.069%, 4/27/94 - 5/25/94 47,902 49,509 540992BQ (indexed to nickel price) 3.21% - 3.543%, 8/19/94 2,220 2,213 540992BX (indexed to oil price) 3.26%, 8/18/94 5,405 5,351 540992AF (indexed to platinum price) 3.2198% - 3.2235%, 8/19/94 1,190 1,294 540992AC (indexed to silver price) 3.732% - 4.3%, 7/7/94 - 12/22/94 2,186 2,211 540992CP (indexed to soybean price) 3.21% - 3.2576%, 7/5/94 18,750 18,237 38142T9K (indexed to sugar price) 3.288%, 8/19/94 4,975 5,239 540992BK (indexed to unleaded gasoline price) 3.1% - 3.8%, 4/27/94 - 7/14/94 67,104 67,684 540992BG OTHER SECURITIES - CONTINUED PRINCIPAL AMOUNT VALUE (NOTE 1) (000S) (C) (000S) INDEXED SECURITIES - CONTINUED Goldman Sachs Group L.P. - continued: (indexed to wheat price) 3.18% - 3.61%, 7/1/94 - 8/19/94 $ 16,600 $ 15,810 540992BU (indexed to zinc price) 3.2235% - 3.5464%, 8/19/94 5,365 4,991 38142T9N 3.5%, 8/27/94 (inversely indexed to 1-month and 12-month CAD Banker's Acceptance rates, both multiplied by 11) 20,100 18,402 38142T9F 3.5%, 8/31/94 (inversely indexed to 1-month and 12-month CAD Banker's Acceptance rates, both multiplied by 11) 21,000 19,150 38142T9G 0%, 9/27/94 (coupon inversely indexed to CAD Banker's Acceptance rate and principal indexed to value of 1-year Canadian securities, both multiplied by 13) (k) 17,900 14,338 38142T9H ITT Corp. 3.66%, 6/27/94 (inversely indexed to 1-year SEK swap rate, multiplied by 10) 18,900 18,915 4506799M Morgan Guaranty Trust Co.: cert. of dep. 0%, 6/6/94 (indexed to $482 par of Westport Investments Ltd. sr., collateralized by Mexican govt. securities, per $100 par) 4,603 4,528 61799FAE cert. of dep. 0%, 2/3/95 (coupon inversely indexed to 1-month CAD Banker's Acceptance rates and principal indexed to value of 4-year Canadian securities, both multiplied by 9) (k) 6,500 1,180 61799KAH Republic National Bank of New York 12.8772%, 3/17/95 (coupon inversely indexed to HELIBOR and principal indexed to value of 2-year Finnish securities, both multiplied by 8) (k) 9,500 7,448 7609905M Sara Lee Corp. 0%, 11/4/94 inversely indexed to ITL LIBOR and principal indexed to 2-year Italian securities, both multiplied by 8) (k) 5,200 4,524 8031119V TOTAL INDEXED SECURITIES 853,299 PURCHASED BANK DEBT - 0.4% Empressa de Electricidad del Peru SA loan participation 0% (a) 5,000 2,025 28599BAA Federal Republic of Brazil loan participation under Multi-Year Deposit Facility Agreement 4.375% (i)(n) 21,750 9,951 1057569F Federal Republic of Brazil loan participation under Res. No. 4131 4.375% (i)(n) 6,750 3,156 1057569G Republic of Ecuador loan participation 0% (a) 12,500 6,250 88399HAB Republic of Ecuador loan participation thru Kidder Peabody Emerging Markets Inc. 0%, 8/15/06 (a) 12,250 6,247 88399HAA OTHER SECURITIES - CONTINUED PRINCIPAL AMOUNT VALUE (NOTE 1) (000S) (C) (000S) PURCHASED BANK DEBT - CONTINUED Republic of Panama loan participation 0% (a) $ 7,250 $ 3,806 6982999A Republic of Panama loan participation under refinancing agreement 0% (a) 3,750 1,969 6982999B Republic of Peru loan participation 0% (a) 4,500 1,980 7156389A Republic of Peru loan participation refinanced under 1983 credit agreement (a) 3,750 1,725 7156389B TOTAL PURCHASED BANK DEBT 37,109 TOTAL OTHER SECURITIES (Cost $990,768) 890,408 COMMERCIAL PAPER - 1.6% Banca Serfin SA: 0%, 4/6/94 MXN 9,589 2,849 065997BR 0%, 7/21/94 MXN 13,477 3,860 065997BV Bancomer SNC: 0%, 4/21/94 MXN 49,784 14,716 05999KBK 0%, 6/23/94 MXN 107,548 31,105 05999KBQ Banco Nacional De Mexico SA 0%, 12/8/94 MXN 221,000 60,436 0596179M Citibank Mexico: 0%, 4/27/94 MXN 80,694 23,808 17699AAH 0%, 5/12/94 MXN 15,541 4,566 17699AAK Nacional Financiera SNC: 0%, 5/4/94 MXN 64,990 19,129 66299CAQ 0%, 5/19/94 MXN 16,611 4,864 66299CAE TOTAL COMMERCIAL PAPER (Cost $175,094) 165,333 REPURCHASE AGREEMENTS - 14.8% MATURITY AMOUNT (000S) Investments in repurchase agreements, (U.S. Treasury obligations), in a joint trading account at 3.58% dated 3/31/94 due 4/4/94 $ 1,564,775 $ 1,564,153 TOTAL INVESTMENT IN SECURITIES - 100% (Cost $10,484,033) $ 10,576,200 FUTURES CONTRACTS AMOUNT IN THOUSANDS EXPIRATION UNDERLYING FACE UNREALIZED DATE AMOUNT AT VALUE GAIN/(LOSS) PURCHASED 450 Midcap 400 Stock Index Contracts June 1994 $ 38,779 $ (2,625) THE VALUE OF FUTURES CONTRACTS PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN SECURITIES - .4% FORWARD FOREIGN CURRENCY CONTRACTS AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED DATE VALUE GAIN/(LOSS) CONTRACTS TO BUY 2,266,995 BEF 4/25/94 $ 65,629 $ 4,224 (Payable amount $61,405) THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN SECURITIES --.6% CONTRACTS TO SELL 22,402,126 BEF 4/12/94 to 5/4/94 $ 648,656 $ (34,959) 1,401,026 DKK 5/10/94 to 5/31/94 212,150 (8,627) 2,305,294 FRF 4/25/94 to 6/17/94 401,685 (9,844) 13,270 GBP 5/16/94 19,647 (340) 12,080,277 JPY 4/21/94 117,778 (8,494) TOTAL CONTRACTS TO SELL (Receivable amount $1,337,652) $ 1,399,916 $ (62,264) THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN SECURITIES - 13.2% CURRENCY ABBREVIATIONS BEF - Belgian franc BRC - Brazilian cruzeiro GBP - British pound CAD - Canadian dollar DKK - Danish krone FRF - French franc JPY - Japanese yen MXN - Mexican peso NZD - New Zealand dollar CHF - Swiss franc 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. Principal amount is stated in United States dollars unless otherwise noted. 4. Standard & Poor's Corporation credit ratings are used in the absence of a rating by Moody's Investors Service, Inc. 5. Debt obligation initially issued in zero coupon form which converts to coupon form at a specified rate and date. 6. 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 Bally Gaming International, Inc. (warrants) 3/3/94 $ 1,044 GACC Holding Co. 2/3/94 - 9 3/4%, 3/1/04 3/9/94 33,652 Hat Brands, Inc. 9/2/92 - (warrants) 2/23/94 - Live Entertainment, Inc.: $2.00 warrant 3/23/93 241 $2.72 warrant 3/23/93 230 12%, 9/15/94 3/23/93 8,000 Province of Chaco, Argentina 11 7/8%, 9/10/97 3/9/94 9,965 7. 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 $432,338,000 or 4.1% of net assets. 8. A portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $34,225,000. 9. The coupon rate shown on floating or adjustable rate securities represents the rate at period end. 10. Interest Only Strips represent the right to receive the monthly interest payments on an underlying pool of mortgage loans. These securities are subject to the risk of accelerated principal paydowns. The principal amount represents the notional amount on which current interest is calculated. 11. Inverse floating rate security is a security where the coupon is inversely indexed to a floating interest rate multiplied by a specified factor. If the floating rate is high enough, the coupon rate may be zero or be a negative amount that is carried forward to reduce future interest and/or principal payments. The price may be considerably more volatile than the price of a comparable fixed rate security. 12. Principal amount shown is original face amount and does not reflect the inflation adjustments. 13. Share amount in thousands. 14. Partial interest payment received on the last interest payment date. OTHER INFORMATION The composition of long-term debt holdings as a percentage of total value of investment in securities, is as follows (ratings are unaudited): MOODY'S RATINGS S&P RATINGS Aaa, Aa, A 7.2% AAA, AA, A 7.4% Baa 0.0% BBB 0.6% Ba 8.2% BB 6.0% B 9.9% B 5.6% Caa 0.2% CCC 0.0% Ca, C 0.0% CC, C 0.0% D 0.0% For some foreign government obligations, FMR has assigned the ratings of the sovereign credit of the issuing government. The percentage not rated by either S&P or Moody's amounted to 6.8% including long-term debt categorized as other securities. FMR has determined that unrated debt securities that are lower quality account for 4% of the total value of investment in securities. Distribution of investments by country, as a percentage of total value of investment in securities, is as follows: United States 63.6% Mexico 13.9 Denmark 4.3 Argentina 3.6 France 2.8 United Kingdom 2.6 Japan 1.5 Brazil 1.3 Canada 1.3 Korea 1.1 Others (individually less than 1%) 4.0 TOTAL 100.0% INCOME TAX INFORMATION At March 31, 1994, the aggregate cost of investment securities for income tax purposes was $10,485,464,000. Net unrealized appreciation aggregated $90,736,000, of which $669,573,000 related to appreciated investment securities and $578,837,000 related to depreciated investment securities. FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) MARCH 31, 1994 ASSETS Investment in securities, at value (including repurchase $ 10,576,200 agreements of $1,564,153) (cost $10,484,033) (Notes 1 and 2) - See accompanying schedule Long foreign currency contracts held, at value (cost 65,629 $61,405) (Note 2) Short foreign currency contracts (Note 2) $ (1,399,916) Contracts held, at value Receivable for contracts held 1,337,652 (62,264) Receivable for investments sold 250,996 Receivable for fund shares sold 56,651 Dividends receivable 12,522 Interest receivable 96,097 Other receivables 1,121 TOTAL ASSETS 10,996,952 LIABILITIES Payable to custodian bank 4,787 Payable for foreign currency contracts held (Note 2) 61,405 Payable for investments purchased 135,587 Payable for fund shares redeemed 170,833 Accrued management fee 6,312 Payable for daily variation on futures contracts 335 Other payables and accrued expenses 4,835 Collateral on securities loaned, at value (Note 5) 14,777 TOTAL LIABILITIES 398,871 NET ASSETS $ 10,598,081 Net Assets consist of (Note 1): Paid in capital $ 10,344,904 Distributions in excess of net investment income (6,094) Accumulated undistributed net realized gain (loss) on 227,769 investments Net unrealized appreciation (depreciation) on: Investment securities 92,167 Foreign currency contracts (58,040) Futures contracts (2,625) NET ASSETS, for 729,487 shares outstanding $ 10,598,081 NET ASSET VALUE, offering price and redemption price per $14.53 share ($10,598,081 (divided by) 729,487 shares)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MARCH 31, 1994 INVESTMENT INCOME $ 35,532 Dividends Interest (including security lending fees of $206) (Note 5) 174,964 TOTAL INCOME 210,496 EXPENSES Management fee (Note 4) $ 33,572 Transfer agent fees (Note 4) 11,306 Accounting and security lending fees (Note 4) 428 Non-interested trustees' compensation 27 Custodian fees and expenses 1,887 Registration fees 1,705 Audit 164 Legal 45 Reports to shareholders 4 Miscellaneous 54 Total expenses before reductions 49,192 Expense reductions (Note 6) (220) 48,972 NET INVESTMENT INCOME 161,524 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1, 2 AND 3) Net realized gain (loss) on: Investment securities 339,624 Foreign currency contracts (18,411) Futures contracts (6,538) 314,675 Change in net unrealized appreciation (depreciation) on: Investment securities (459,269) Foreign currency contracts (20,926) Futures contracts (3,076) (483,271) NET GAIN (LOSS) (168,596) NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ (7,072) OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED ENDED SEPTEMBER 30, MARCH 31, 1993 1994 INCREASE (DECREASE) IN NET ASSETS Operations $ 161,524 $ 201,274 Net investment income Net realized gain (loss) on investments 314,675 187,839 Change in net unrealized appreciation (depreciation) (483,271) 463,784 on investments NET INCREASE (DECREASE) IN NET ASSETS RESULTING (7,072) 852,897 FROM OPERATIONS Distributions to shareholders (182,464) (262,058) From net investment income In excess of net investment income (19,634) - From net realized gain (233,668) (44,263) TOTAL DISTRIBUTIONS (435,766) (306,321) Share transactions 5,516,902 4,913,591 Net proceeds from sales of shares Reinvestment of distributions 425,453 298,916 Cost of shares redeemed (2,167,534) (1,255,413) Net increase (decrease) in net assets resulting from 3,774,821 3,957,094 share transactions TOTAL INCREASE (DECREASE) IN NET ASSETS 3,331,983 4,503,670 NET ASSETS Beginning of period 7,266,098 2,762,428 End of period (including under (over) distribution of net $ 10,598,081 $ 7,266,098 investment income of $(6,094) and $17,685, respectively) OTHER INFORMATION Shares Sold 358,577 347,641 Issued in reinvestment of distributions 28,186 21,714 Redeemed (142,510) (88,748) Net increase (decrease) 244,253 280,607
FINANCIAL HIGHLIGHTS
SIX MONTHS YEARS ENDED SEPTEMBER 30, DECEMBER 28, ENDED 1988 MARCH 31, (COMMENCEMEN T OF OPERATIONS) TO SEPTEMBER 30,
1994 1993 1992 1991 1990 1989 SELECTED PER-SHARE DATA Net asset value, $ 14.97 $ 13.50 $ 13.02 $ 10.64 $ 11.39 $ 10.00 beginning of period Income from Investment Operations Net investment income .25 .52 .46 .55 .58 .27 Net realized and .07# 2.01 .97 2.48 (.71) 1.12 unrealized gain (loss) on investments Total from investment .32 2.53 1.43 3.03 (.13) 1.39 operations Less Distributions From net investment (.30) (.87) (.45) (.65) (.38) - income In excess of net (.03) - - - - - investment income From net realized gain (.43) (.19) (.50) - (.24) - Total distributions (.76) (1.06) (.95) (.65) (.62) - Net asset value, end of $ 14.53 $ 14.97 $ 13.50 $ 13.02 $ 10.64 $ 11.39 period TOTAL RETURN (dagger) (dagger)(dagger) 1.98% 19.71 11.84 29.78 (1.27) 13.90% % % % % RATIOS AND SUPPLEMENTAL DATA Net assets, end of period $ $ $ $ $ $ (in millions) 10,598 7,266 2,762 743 346 245 Ratio of expenses to 1.05%*(diamond) 1.09 1.17 1.17 1.17% 1.58%* average net assets % % % Ratio of expenses to 1.06%*(diamond) 1.09 1.17 1.17 1.17% 1.58%* average net assets % % % before expense reductions Ratio of net investment 3.47%* 4.28 5.58 5.74 5.89% 5.88%* income to average net % % % assets Portfolio turnover rate 107%* 98 134 134 105% 167%* % % %
* ANNUALIZED (dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. (dagger)(dagger) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIOD SHOWN. (diamond) SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS. # THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE AGGREGATE NET (LOSS) ON INVESTMENTS FOR THE PERIOD ENDED DUE TO THE TIMING OF SALES AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF THE INVESTMENTS OF THE FUND. NOTES TO FINANCIAL STATEMENTS For the period ended March 31, 1994 1. SIGNIFICANT ACCOUNTING POLICIES. Fidelity Asset Manager (the fund) is a fund of Fidelity Charles Street Trust (the trust) and is authorized to issue an unlimited number of shares. The trust 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. 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 and 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, which includes accretion of original issue discount, is accrued as earned. Investment income is recorded net of foreign taxes where recovery of such taxes is not assured. 1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED EXPENSES. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned between the funds in the trust. 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 paydown gains/losses on certain securities, futures and options transactions, foreign currency transactions, market discount, partnerships, non-taxable dividends and losses deferred due to wash sales. 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. Undistributed net investment income may include temporary book and tax basis differences which will reverse in a subsequent period. Any taxable income or gain remaining at fiscal year end is distributed in the following year. 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 October 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 September 30, 1993 have been reclassified to reflect an increase in paid in capital of $14,586,000, an increase in undistributed net investment income of $16,795,000 and a decrease in accumulated net realized gain on investments of $31,381,000. 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 2. OPERATING POLICIES - CONTINUED 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. JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, 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. FUTURES CONTRACTS AND OPTIONS. The fund may invest in futures contracts and write options. These investments involve to varying degrees, elements of market risk and risks in excess of the amount recognized in the Statement of Assets and Liabilities. The face or contract amounts reflect the extent of the involvement the fund has in the particular classes of instruments. Risks may be caused by an imperfect correlation between movements in the price of the instruments and the price of the underlying securities and interest rates. Risks also may arise if there is an illiquid secondary market for the instruments, or due to the inability of counterparties to perform. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded. Options traded on an exchange are valued using the last sale price or, in the absence of a sale, the last offering price. Options traded over-the-counter are valued using dealer-supplied valuations. INDEXED SECURITIES. The fund may invest in indexed securities whose value is linked either directly or inversely to changes in foreign currencies, interest rates, commodities, indices, or other reference instruments. Indexed securities may be more volatile than the reference instrument itself, but any loss is limited to the amount of the original investment. 2. OPERATING POLICIES - CONTINUED 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 $53,847,000 or .5% of net assets. 3. PURCHASES AND SALES OF INVESTMENTS. Purchases and sales of securities, other than short-term securities, aggregated $6,127,412,000 and $4,172,911,000, respectively, of which U.S. government and government agency obligations aggregated $2,369,000 and $21,262,000, respectively. The market value of futures contracts opened and closed amounted to $1,550,534,000 and $1,527,084,000, respectively. 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES. MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly 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 .31% 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 .40%. For the period, the management fee was equivalent to an annualized rate of .72% of average net assets. 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. 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, 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 $1,122,000 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 $14,181,000 and $14,777,000, respectively. 6. 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 $220,000 under this arrangement. 7. CREDIT RISK The fund's relatively large investment in countries with limited or developing capital markets may involve greater risks than investments in more developed markets and the prices of such investments may be volatile. The yields of emerging market debt obligations reflect, among other things, perceived credit risk. The consequences of political, social or economic changes in these markets may have disruptive effects on the market prices of the fund's investments and the income they generate. REPORT OF INDEPENDENT ACCOUNTANTS To the Trustees of Fidelity Charles Street Trust and the shareholders of Fidelity Asset Manager: In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments (except for Moody's and Standard & Poor's ratings), and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Asset Manager (a fund of Fidelity Charles Street Trust) at March 31, 1994, the results of its operations, the changes in its net assets and the financial highlights for the periods indicated in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as `` financial statements") are the responsibility of the Fidelity Asset Manager's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities owned at March 31, 1994 by correspondence with the custodian and brokers and the application of alternative auditing procedures where confirmations from brokers were not received, provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE Boston, Massachusetts May 9, 1994 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 1907 West State Road 434 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 8180 Greensboro Drive McLean, 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 Robert Beckwitt, 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* Richard J. Flynn* Edward C. Johnson 3d E. Bradley Jones* Donald J. Kirk* Peter S. Lynch Edward H. Malone* Gerald C. McDonough* Thomas R. Williams* GENERAL DISTRIBUTOR Fidelity Distributors Corporation Boston, MA TRANSFER AND SHAREHOLDER SERVICING AGENT Fidelity Service Co. Boston, MA CUSTODIAN The Chase Manhattan Bank, N.A. New York, NY FIDELITY'S ASSET ALLOCATION FUNDS Asset Manager Asset Manager: Growth Asset Manager: Income 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-----