-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CCq5E4kQ/bQefmNh6xNjOH9YGm/exKQ9+piCADQjlXb8s1EKaPYhDO0+aTqi0QV3 ZQ/NWImJjvyU0KJCxC/LXw== 0000912057-96-006927.txt : 19960425 0000912057-96-006927.hdr.sgml : 19960425 ACCESSION NUMBER: 0000912057-96-006927 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19960423 EFFECTIVENESS DATE: 19960423 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARTFORD CAPITAL APPRECIATION FUND INC CENTRAL INDEX KEY: 0000741565 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 222481744 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 002-89794 FILM NUMBER: 96549914 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-04005 FILM NUMBER: 96549915 BUSINESS ADDRESS: STREET 1: P O BOX 2999 CITY: HARTFORD STATE: CT ZIP: 06104-2999 BUSINESS PHONE: 2038438214 MAIL ADDRESS: STREET 1: 200 HOPMEADOW ST CITY: SIMSBURY STATE: CT ZIP: 06089 FORMER COMPANY: FORMER CONFORMED NAME: HARTFORD AGGRESSIVE GROWTH FUND INC /CT/ DATE OF NAME CHANGE: 19940428 FORMER COMPANY: FORMER CONFORMED NAME: HVA AGGRESSIVE GROWTH FUND INC/MA/ DATE OF NAME CHANGE: 19920703 485BPOS 1 485BPOS As filed with the Securities and Exchange Commission on April 23, 1996 File No. 2-89794 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X / ----- Pre-Effective Amendment No. / / ------ ----- Post-Effective Amendment No. 17 / X / ------ ----- and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X / ----- Amendment No. 17 / X / ------ ----- HARTFORD CAPITAL APPRECIATION FUND, INC. (Exact Name of Registrant as Specified in Charter) P.O. Box 2999, Hartford, Connecticut 06104-2999 (Address of Principal Executive Offices) Registrant's Telephone Number including Area Code: 203/547-3403 Michael C. O'Halloran, Esquire P.O. Box 2999, Hartford, Connecticut 06104-2999 (Name and Address of Agent for Service) Approximate Date of Proposed Public Offering: Upon this Registration Statement being declared effective. It is proposed that this filing will become effective (check appropriate box) immediately upon filing pursuant to paragraph (b) of Rule 485 ---- X on May 1, 1996 pursuant to paragraph (b) of Rule 485 ----- ----------- 60 days after filing pursuant to paragraph (a)(1) of Rule 485 ----- on May 1, 1996 pursuant to paragraph (a)(1) of Rule 485 ----- 75 days after filing pursuant to paragraph (a)(2) of Rule 485 ----- on __________________ pursuant to paragraph (a)(2) of Rule 485 ----- Pursuant to Regulation 270.24f-2 under the Investment Company Act of 1940, Registrant has previously elected to register an indefinite number of shares of its Common Stock. The Rule 24f-2 Notice for the Registrant's most recent fiscal year was filed on February 29, 1996. HARTFORD MUTUAL FUNDS CROSS REFERENCE SHEET PURSUANT TO RULE 481(A)
N-1A ITEM NO. PROSPECTUS LOCATION - ------------- ------------------- PART A 1. Cover Page Cover Page 2. Synopsis Not applicable 3. Condensed Financial Information Fund Expenses; Financial Highlights 4. General Description of Registrant The Funds; Investment Objectives and Policies of the Funds; Common Investment Policies and Risk Factors 5. Management of the Fund Management of the Funds; Administrative Services for the Funds; Expenses of the Funds 5A. Management's Discussion of Fund Annual Report to Shareholders Performance 6. Capital Stock and Other Securities Ownership and Capitalization of the Funds; Dividends; Federal Income Taxes; General Information 7. Purchase of Securities Being Net Asset Value; Purchase of Fund Offered Shares 8. Redemption or Repurchase Sale and Redemption of Shares 9. Pending Legal Proceedings General Information-Pending Legal Proceedings PART B STATEMENT OF ADDITIONAL INFORMATION LOCATION ----------------------------------- 10. Cover Page Cover Page 11. Table of Contents Table of Contents 12. General Information and History Not applicable 13. Investment Objectives and Policies Investment Objectives of the Funds; Investment Restrictions of the Funds 14. Management of the Fund Management of the Fund 15. Control Persons and Principal Control Persons and Principal Holders of Securities Holders of Securities 16. Investment Advisory and Other Management of the Fund Services 17. Brokerage Allocation and Other Portfolio Brokerage Practices 18. Capital Stock and Other Securities Ownership and Capitalization of the Funds (Prospectus) 19. Purchase, Redemption and Pricing Purchase of Fund Shares of Securities Being Offered (Prospectus) 20. Tax Status Federal Income Taxes (Prospectus) 21. Underwriters Sale and Redemption of Fund Shares (Prospectus) 22. Calculation of Performance Data Performance Comparisons 23. Financial Statements Financial Statements
PART C Information required to be set forth in PART C is set forth under the appropriate item, so numbered, in Part C of the Registration Statement. HARTFORD MUTUAL FUNDS P.O. BOX 2999 HARTFORD, CT 06104-2999 PROSPECTUS -- MAY 1, 1996 This Prospectus contains information relating to eleven mutual funds offered hereby (individually, a "Fund," collectively, the "Funds" or "Hartford Mutual Funds"), each registered as a diversified open-end management investment company with the Securities and Exchange Commission, that are made available to serve as the underlying investment vehicles for certain variable annuity and variable life insurance separate accounts of Hartford Life Insurance Company and ITT Hartford Life and Annuity Insurance Company (collectively, the "ITT Hartford Life Insurance Companies"). The Funds, which have differentinvestment objectives and policies, are: Hartford Capital Appreciation Fund, Inc., Hartford Dividend and Growth Fund, Inc., Hartford Index Fund, Inc., Hartford International Opportunities Fund, Inc., Hartford Stock Fund, Inc., Hartford Advisers Fund, Inc., Hartford International Advisers Fund, Inc., Hartford Bond Fund, Inc., Hartford Mortgage Securities Fund, Inc., HVA Money Market Fund, Inc. and Hartford U.S. Government Money Market Fund, Inc. The investment objective of each Fund is the first sentence of each of the following: STOCK FUNDS HARTFORD CAPITAL APPRECIATION FUND, INC. seeks to achieve growth of capital by investing in securities selected solely on the basis of potential for capital appreciation; income, if any, is an incidental consideration. The Capital Appreciation Fund invests primarily in equity securities and securities convertible into equity securities. HARTFORD DIVIDEND AND GROWTH FUND, INC. seeks to achieve a high level of current income consistent with growth of capital and reasonable investment risk. The Dividend and Growth Fund invests primarily in equity securities and securities convertible into equity securities that typically have above average income yield and favorable prospects for capital appreciation. HARTFORD INDEX FUND, INC. seeks to provide investment results which approximate the price and yield performance of publicly-traded common stocks in the aggregate. The Index Fund attempts to approximate the capital performance and the dividend income of the Standard & Poor's 500 Composite Stock Price Index. HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC. seeks to achieve long-term total rate of return consistent with prudent investment risk through investment primarily in equity securities issued by non-U.S. companies. HARTFORD STOCK FUND, INC. seeks to achieve long-term capital growth primarily through capital appreciation, with income a secondary consideration, by investing in primarily equity securities. Its portfolio emphasizes high-quality growth companies. ASSET ALLOCATION FUNDS HARTFORD ADVISERS FUND, INC. seeks to achieve maximum long-term total rate of return consistent with prudent investment risk by investing in common stock and other equity securities, bonds and other debt securities, and money market instruments. The Advisers Fund actively allocates its assets among these asset categories based on fundamental analysis, not on short-term market timing. HARTFORD INTERNATIONAL ADVISERS FUND, INC. seeks to achieve maximum long-term total rate of return consistent with prudent investment risk. The International Advisers Fund's assets will be diversified among at least five countries, and will be allocated among equity and debt securities and money market instruments based on fundamental analysis, not on short-term market timing. BOND FUNDS HARTFORD BOND FUND, INC. seeks to achieve maximum current income consistent with preservation of capital by investing primarily in fixed-income securities. HARTFORD MORTGAGE SECURITIES FUND, INC. seeks to achieve maximum current income consistent with safety of principal and maintenance of liquidity by investing primarily in mortgage-related securities, including securities issued by the Government National Mortgage Association. MONEY MARKET FUNDS HVA MONEY MARKET FUND, INC. seeks to achieve maximum current income consistent with liquidity and preservation of capital. This Fund invests in short-term money market instruments. HARTFORD U.S. GOVERNMENT MONEY MARKET FUND, INC. seeks to achieve maximum current income consistent with preservation of capital. This Fund invests in short-term money market instruments. - -------------------------------------------------------------------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. - -------------------------------------------------------------------------------- THIS PROSPECTUS SETS FORTH CONCISELY THE INFORMATION ABOUT A FUND THAT A PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING. PLEASE READ AND RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE. ADDITIONAL INFORMATION ABOUT THE FUNDS HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IN A STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 1996, WHICH HAS BEEN INCORPORATED BY REFERENCE INTO THIS PROSPECTUS AND WILL BE PROVIDED ON REQUEST AND WITHOUT CHARGE. WRITE "HARTFORD FAMILY OF FUNDS, C/O INDIVIDUAL ANNUITY OPERATIONS," P.O. BOX 2999, HARTFORD, CT 06104-2999. - -------------------------------------------------------------------------------- NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUNDS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER BY THE FUNDS TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL FOR THE FUNDS TO MAKE SUCH OFFER. - -------------------------------------------------------------------------------- AN INVESTMENT IN EITHER OF THE MONEY MARKET FUNDS IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT EITHER OF THE MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE. - -------------------------------------------------------------------------------- HARTFORD INTERNATIONAL ADVISERS FUND, INC. MAY INVEST UP TO 15% OF ITS ASSETS IN HIGH YIELD DEBT SECURITIES. INVESTMENTS OF THIS TYPE INVOLVE COMPARATIVELY HIGHER RISKS, INCLUDING PRICE VOLATILITY AND RISK OF DEFAULT IN THE PAYMENT OF INTEREST AND PRINCIPAL, THAN HIGHER-QUALITY DEBT SECURITIES. SEE "COMMON INVESTMENT POLICIES AND RISK FACTORS." - -------------------------------------------------------------------------------- 2 HARTFORD MUTUAL FUNDS - -------------------------------------------------------------------------------- HARTFORD MUTUAL FUNDS TABLE OF CONTENTS
PAGE ----- Glossary.............................................................. 3 Financial Highlights.................................................. 4 The Funds............................................................. 15 Investment Objectives and Policies of the Funds....................... 15 Common Investment Policies and Risk Factors........................... 22 Repurchase Agreements............................................... 22 Illiquid Securities................................................. 23 When-Issued and Delayed-Delivery Securities......................... 23 Other Investment Companies.......................................... 23 Currency Transactions............................................... 24 Options and Futures Contracts....................................... 24 Non-U.S. Securities, Including ADRs and GDRs........................ 26 Mortgage-Related Securities......................................... 26 Asset-Backed Securities............................................. 27 Swap Agreements..................................................... 28 Money Market Instruments............................................ 28 Investment Grade Securities......................................... 28 High Yield Securities............................................... 28 Other Risk Factors.................................................. 28 Management of the Funds............................................... 29 Investment Advisory and Management Services......................... 29 Investment Sub-Advisory Services.................................... 30 Portfolio Managers.................................................. 31 Administrative Services for the Funds................................. 31 Expenses of the Funds................................................. 31 Performance Related Information....................................... 32 Dividends............................................................. 32 Net Asset Value....................................................... 32 Purchase of Fund Shares............................................... 33 Sale and Redemption of Shares......................................... 33 Federal Income Taxes.................................................. 33 Ownership and Capitalization of the Funds............................. 33 Capital Stock....................................................... 33 Voting.............................................................. 34 Other Rights........................................................ 34 General Information................................................... 34 Reports to Shareholders............................................. 34 Custodian, Transfer and Dividend Disbursing Agents.................. 34 "Majority" Defined.................................................. 34 Pending Legal Proceedings........................................... 34 Requests for Information............................................ 34 Appendix -- Ratings of Bonds and Commercial Paper..................... 35
There is the possibility that an individual Fund may be held liable for a misstatement, inaccuracy or incomplete disclosure in this Prospectus concerning the other Fund(s). Additional information about the performance of each Fund, including Management's Discussion and Analysis of results, is contained in the Funds' annual report to shareholders, which may be obtained without charge by calling 1-800-862-6668. HARTFORD MUTUAL FUNDS 3 - -------------------------------------------------------------------------------- GLOSSARY ADRs: American Depository Receipts CFTC: Commodity Futures Trading Commission CMOs: Collateralized Mortgage Obligations Code: Internal Revenue Code of 1986, as amended FHLMC: Federal Home Loan Mortgage Corporation FNMA: Federal National Mortgage Association GDRs: Global Depository Receipts GNMA: Government National Mortgage Association IMF: International Monetary Fund Moody's: Moody's Investors Service, Inc. NYSE: New York Stock Exchange 1940 Act: Investment Company Act of 1940, as amended SEC: Securities and Exchange Commission S&P: Standard & Poor's Corporation World Bank: International Bank for Reconstruction and Development 4 HARTFORD CAPITAL APPRECIATION FUND, INC. (FORMERLY HARTFORD AGGRESSIVE GROWTH FUND, INC.) - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS The following information, insofar as it relates to each of the five years in the period ended December 31, 1995, has been audited by Arthur Andersen LLP, independent public accountants, whose report thereon is included in the Statement of Additional Information, which is incorporated by reference to this prospectus.
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) ---------------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86 ---------- ---------- --------- --------- --------- -------- -------- -------- -------- -------- Net asset value at beginning of period......... $ 2.860 $ 3.052 $ 2.634 $ 2.607 $ 1.709 $ 2.020 $ 1.678 $ 1.341 $ 1.482 $ 1.423 Net investment income......... 0.030 0.011 0.003 0.008 $ 0.021 $ 0.029 $ 0.023 $ 0.015 $ 0.025 $ 0.019 Net realized and unrealized gains (losses) on investments.... 0.785 0.070 0.526 0.388 0.898 (0.246) 0.376 0.337 (0.075) 0.106 ---------- ---------- --------- --------- --------- -------- -------- -------- -------- -------- Total from investment operations..... 0.815 0.081 0.529 0.396 0.919 (0.217) 0.399 0.352 (0.050) 0.125 Dividends from net investment income......... (0.030) (0.011) (0.003) (0.008) (0.021) (0.029) (0.023) (0.015) (0.025) (0.019) Distribution from net realized gains on securities..... (0.155) (0.262) (0.108) (0.361) 0.000 (0.065) (0.034) 0.000 (0.066) (0.047) Return of capital........ 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 ---------- ---------- --------- --------- --------- -------- -------- -------- -------- -------- Total from distributions... (0.185) (0.273) (0.111) (0.369) (0.021) (0.094) (0.057) (0.015) (0.091) (0.066) ---------- ---------- --------- --------- --------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets..... 0.630 (0.192) 0.418 0.027 0.898 (0.311) 0.342 0.337 (0.141) 0.059 Net asset value at end of period......... $ 3.490 $ 2.860 $ 3.052 $ 2.634 $ 2.607 $ 1.709 $ 2.020 $ 1.678 $ 1.341 $ 1.482 ---------- ---------- --------- --------- --------- -------- -------- -------- -------- -------- ---------- ---------- --------- --------- --------- -------- -------- -------- -------- -------- Total Return.... 30.25% 2.50% 20.80% 16.98% 53.99% (10.90)% 24.11% 26.37% (4.31)% 9.03% Net Assets (in thousands)..... 2,157,892 1,158,644 778,904 300,373 158,046 56,032 59,922 34,226 26,123 22,556 Ratio of operating expenses to average net assets......... 0.68% 0.72% 0.76% 0.87% 0.92% 0.96% 0.94% 0.97% 1.01% 1.12% Ratio of net investment income to average net asset.......... 0.95% 0.40% 0.12% 0.36% 0.92% 1.58% 1.25% 0.91% 1.27% 1.23% Portfolio turnover rate........... 78.6% 73.3% 91.4% 100.3% 107.2% 51.8% 35.0% 48.9% 68.7% 53.9%
HARTFORD DIVIDEND & GROWTH FUND, INC. 5 - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS The following information, has been audited by Arthur Andersen LLP, independent public accountants, whose report thereon is included in the Statement of Additional Information, which is incorporated by reference to this prospectus.
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) ----------------------- YEAR ENDED 03/08/94- 1995 12/31/94(A) --------- ----------- Net asset value at beginning of period............ $ 0.994 $ 1.000 Net investment income............................. 0.033 0.024 Net realized and unrealized gains (losses) on investments...................................... 0.317 (0.005) --------- ----------- Total from investment operations.................. 0.350 0.019 Dividends from net investment income.............. (0.033) (0.024) Distribution from net realized gains on securities....................................... 0.000 (0.001) Return of capital................................. 0.000 0.000 --------- ----------- Total from distributions.......................... (0.033) (0.025) --------- ----------- Net increase (decrease) in net assets............. 0.317 (0.006) Net asset value at end of period.................. $ 1.311 $ 0.994 --------- ----------- --------- ----------- Total Return...................................... 36.37% 1.96% Net Assets (in thousands)......................... 265,070 55,066 Ratio of operating expenses to average net assets........................................... 0.77% 0.83%* Ratio of net investment income to average net asset............................................ 2.91% 3.52%* Portfolio turnover rate........................... 41.4% 27.8%
- ------------------------ (a) The Fund was declared effective by the Securities and Exchange Commission on March 8, 1994. * Annualized 6 HARTFORD INDEX FUND, INC. - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS The following information, insofar as it relates to each of the five years in the period ended December 31, 1995, has been audited by Arthur Andersen LLP, independent public accountants, whose report thereon is included in the Statement of Additional Information, which is incorporated by reference to this prospectus.
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) ------------------------------------------------------------------------------------------------------ YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED 05/01/87- 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87(A) --------- --------- --------- -------- -------- -------- -------- -------- ----------- Net asset value at beginning of period..... $ 1.522 $ 1.546 $ 1.450 $ 1.390 $ 1.134 $ 1.220 $ 0.960 $ 0.854 $ 1.000 Net investment income.... 0.044 0.038 0.035 0.033 0.036 0.037 0.029 0.030 0.016 Net realized and unrealized gains (losses) on investments............. 0.507 (0.024) 0.096 0.060 0.294 (0.086) 0.260 0.106 (0.144) --------- --------- --------- -------- -------- -------- -------- -------- ----------- Total from investment operations.............. 0.551 0.014 0.131 0.093 0.330 (0.049) 0.289 0.136 (0.128) Dividends from net investment income....... (0.044) (0.038) (0.035) (0.033) (0.036) (0.037) (0.029) (0.030) (0.016) Distribution from net realized gains on securities.............. (0.001) 0.000 0.000 0.000 (0.038) 0.000 0.000 0.000 (0.002) Return of capital........ 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 --------- --------- --------- -------- -------- -------- -------- -------- ----------- Total from distributions........... (0.045) (0.038) (0.035) (0.033) (0.074) (0.037) (0.029) (0.030) (0.018) --------- --------- --------- -------- -------- -------- -------- -------- ----------- Net increase (decrease) in net assets........... 0.506 (0.024) 0.096 0.060 0.256 (0.086) 0.260 0.106 (0.146) Net asset value at end of period.................. $ 2.028 $ 1.522 $ 1.546 $ 1.450 $ 1.390 $ 1.134 $ 1.220 $ 0.960 $ 0.854 --------- --------- --------- -------- -------- -------- -------- -------- ----------- --------- --------- --------- -------- -------- -------- -------- -------- ----------- Total Return............. 36.55% 0.94% 9.12% 6.82% 29.53% (3.99)% 30.47% 16.35% (12.91)% Net Assets (in thousands).............. 318,253 157,660 140,396 82,335 47,770 26,641 19,456 10,050 7,212 Ratio of operating expenses to average net assets.................. 0.39% 0.45% 0.49% 0.60% 0.67% 0.91% 1.10% 1.23% 1.35%* Ratio of net investment income to average net asset................... 2.46% 2.50% 2.36% 2.48% 2.89% 3.27% 2.60% 3.29% 2.39%* Portfolio turnover rate.................... 1.5% 1.8% 0.8% 1.2% 6.7% 25.5% 12.9% 20.9% 1.9%
- ------------------------ (a) The Fund was declared effective by the Securities and Exchange Commission on May 1, 1987. * Annualized HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC. 7 - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS The following information, insofar as it relates to each of the five years in the period ended December 31, 1995, has been audited by Arthur Andersen LLP, independent public accountants, whose report thereon is included in the Statement of Additional Information, which is incorporated by reference to this prospectus.
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) --------------------------------------------------------------------- YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 07/02/90- 1995 1994 1993 1992 1991 12/31/90(A) --------- --------- --------- -------- -------- ----------- Net asset value at beginning of period.................... $ 1.176 $ 1.215 $ 0.917 $ 0.973 $ 0.871 $ 1.000 Net investment income......... 0.020 0.016 0.009 0.013 0.011 0.015 Net realized and unrealized gains (losses) on investments.................. 0.141 (0.039) 0.298 (0.056) 0.102 (0.129) --------- --------- --------- -------- -------- ----------- Total from investment operations................... 0.161 (0.023) 0.307 (0.043) 0.113 (0.114) Dividends from net investment income....................... (0.020) (0.016) (0.009) (0.013) (0.011) (0.015) Distribution from net realized gains on securities.......... (0.011) 0.000 0.000 0.000 0.000 0.000 Return of capital............. 0.000 0.000 0.000 0.000 0.000 0.000 --------- --------- --------- -------- -------- ----------- Total from distributions...... (0.031) (0.016) (0.009) (0.013) (0.011) (0.015) --------- --------- --------- -------- -------- ----------- Net increase (decrease) in net assets....................... 0.130 (0.039) 0.298 (0.056) 0.102 (0.129) Net asset value at end of period....................... $ 1.306 $ 1.176 $ 1.215 $ 0.917 $ 0.973 $ 0.871 --------- --------- --------- -------- -------- ----------- --------- --------- --------- -------- -------- ----------- Total Return.................. 13.93% (1.94)% 33.73% (4.43)% 13.00% (11.76)% Net Assets (in thousands)..... 686,475 563,765 281,608 47,560 22,854 9,352 Ratio of operating expenses to average net assets........... 0.86% 0.85% 1.00% 1.23% 1.24% 1.04%* Ratio of net investment income to average net asset......... 1.60% 1.42% 0.84% 1.40% 1.17% 2.65%* Portfolio turnover rate....... 55.6% 46.4% 31.8% 25.1% 24.7% 3.0%
- ------------------------ (a) The Fund was declared effective by the Securities and Exchange Commission on July 2, 1990. * Annualized 8 HARTFORD STOCK FUND, INC. - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS The following information, insofar as it relates to each of the five years in the period ended December 31, 1995, has been audited by Arthur Andersen LLP, independent public accountants, whose report thereon is included in the Statement of Additional Information, which is incorporated by reference to this prospectus.
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) ------------------------------------------------------------------------------------------------------------ YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86 ---------- ---------- --------- --------- --------- --------- --------- --------- --------- --------- Net asset value at beginning of period..... $ 2.801 $ 3.099 $ 2.965 $ 2.927 $ 2.452 $ 2.775 $ 2.304 $ 1.977 $ 2.177 $ 2.107 Net investment income........ 0.070 0.061 0.053 0.051 $ 0.059 $ 0.070 $ 0.065 $ 0.045 $ 0.045 $ 0.049 Net realized and unrealized gains (losses) on investments... 0.840 (0.111) 0.339 0.219 0.532 (0.179) 0.522 0.327 0.084 0.196 ---------- ---------- --------- --------- --------- --------- --------- --------- --------- --------- Total from investment operations.... 0.910 (0.050) 0.392 0.270 0.591 (0.109) 0.587 0.372 0.129 0.245 Dividends from net investment income........ (0.070) (0.061) (0.053) (0.051) (0.059) (0.070) (0.065) (0.045) (0.045) (0.049) Distribution from net realized gains on securities.... (0.114) (0.187) (0.205) (0.181) (0.057) (0.144) (0.051) 0.000 (0.284) (0.126) Return of capital....... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 ---------- ---------- --------- --------- --------- --------- --------- --------- --------- --------- Total from distributions... (0.184) (0.248) (0.258) (0.232) (0.116) (0.214) (0.116) (0.045) (0.329) (0.175) ---------- ---------- --------- --------- --------- --------- --------- --------- --------- --------- Net increase (decrease) in net assets.... 0.726 (0.298) 0.134 0.038 0.475 (0.323) 0.471 0.327 (0.200) 0.070 Net asset value at end of period........ $ 3.527 $ 2.801 $ 3.099 $ 2.965 $ 2.927 $ 2.452 $ 2.775 $ 2.304 $ 1.977 $ 2.177 ---------- ---------- --------- --------- --------- --------- --------- --------- --------- --------- ---------- ---------- --------- --------- --------- --------- --------- --------- --------- --------- Total Return... 34.10% (1.89)% 14.34% 10.04% 24.58% (3.87)% 26.02% 19.00% 5.41% 12.33% Net Assets (in thousands).... 1,876,884 1,163,158 968,425 569,903 406,489 257,553 266,756 187,511 170,319 148,126 Ratio of operating expenses to average net assets........ 0.48% 0.50% 0.53% 0.57% 0.60% 0.66% 0.64% 0.65% 0.65% 0.66% Ratio of net investment income to average net asset......... 2.23% 2.17% 1.86% 1.90% 2.14% 2.76% 2.31% 2.08% 1.83% 2.24% Portfolio turnover rate.......... 52.9% 63.8% 69.0% 69.8% 24.3% 20.2% 24.4% 22.9% 27.0% 25.7%
HARTFORD ADVISERS FUND, INC. 9 - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS The following information, insofar as it relates to each of the five years in the period ended December 31, 1995, has been audited by Arthur Andersen LLP, independent public accountants, whose report thereon is included in the Statement of Additional Information, which is incorporated by reference to this prospectus.
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) ------------------------------------------------------------------------------------------------------------ YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86 ---------- ---------- ---------- --------- --------- --------- --------- --------- --------- --------- Net asset value at beginning of period..... $ 1.600 $ 1.752 $ 1.676 $ 1.649 $ 1.436 $ 1.543 $ 1.332 $ 1.213 $ 1.227 $ 1.179 Net investment income........ 0.064 0.054 0.050 0.059 $ 0.063 $ 0.074 $ 0.062 $ 0.051 $ 0.051 $ 0.054 Net realized and unrealized gains (losses) on investments... 0.377 (0.100) 0.145 0.070 0.223 (0.059) 0.221 0.119 0.025 0.089 ---------- ---------- ---------- --------- --------- --------- --------- --------- --------- --------- Total from investment operations.... 0.441 (0.046) 0.195 0.129 0.286 0.015 0.283 0.170 0.076 0.143 Dividends from net investment income........ (0.064) (0.054) (0.050) (0.059) (0.063) (0.074) (0.062) (0.051) (0.051) (0.054) Distribution from net realized gains on securities.... (0.019) (0.052) (0.069) (0.043) (0.010) (0.048) (0.010) 0.000 (0.039) (0.041) Return of capital....... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 ---------- ---------- ---------- --------- --------- --------- --------- --------- --------- --------- Total from distributions... (0.083) (0.106) (0.119) (0.102) (0.073) (0.122) (0.072) (0.051) (0.090) (0.095) ---------- ---------- ---------- --------- --------- --------- --------- --------- --------- --------- Net increase (decrease) in net assets.... 0.358 (0.152) 0.076 0.027 0.213 (0.107) 0.211 0.119 (0.014) 0.048 Net asset value at end of period........ $ 1.958 $ 1.600 $ 1.752 $ 1.676 $ 1.649 $ 1.436 $ 1.543 $ 1.332 $ 1.213 $ 1.227 ---------- ---------- ---------- --------- --------- --------- --------- --------- --------- --------- ---------- ---------- ---------- --------- --------- --------- --------- --------- --------- --------- Total Return... 28.34% (2.74)% 12.25% 8.30% 20.33% 1.26% 21.72% 14.24% 6.08% 12.70% Net Assets (in thousands).... 4,262,769 3,034,034 2,426,550 985,747 631,424 416,839 371,917 264,750 239,704 127,214 Ratio of operating expenses to average net assets........ 0.65% 0.65% 0.69% 0.78% 0.81% 0.89% 0.89% 0.90% 0.91% 0.98% Ratio of net investment income to average net asset......... 3.57% 3.34% 3.07% 3.55% 4.13% 4.65% 4.14% 3.93% 4.00% 4.36% Portfolio turnover rate.......... 63.5% 60.0% 55.3% 72.8% 42.1% 35.7% 33.5% 30.9% 28.3% 23.3%
10 HARTFORD INTERNATIONAL ADVISERS FUND, INC. - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS The following information, has been audited by Arthur Andersen LLP, independent public accountants, whose report thereon is included in the Statement of Additional Information, which is incorporated by reference to this prospectus.
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) ---------------------- 03/01/95- 12/31/96(A) ---------------------- Net asset value at beginning of period............ $ 1.000 Net investment income............................. 0.030 Net realized and unrealized gains (losses) on investments...................................... 0.126 ------- Total from investment operations.................. 0.156 Dividends from net investment income.............. (0.030) Distribution from net realized gains on securities....................................... (0.017) Return of capital................................. 0.000 ------- Total from distributions.......................... (0.047) ------- Net increase (decrease) in net assets............. 0.109 Net asset value at end of period.................. $ 1.109 ------- ------- Total Return...................................... 15.84% Net Assets (in thousands)......................... 31,264 Ratio of operating expenses to average net assets........................................... 0.65%* Ratio of net investment income to average net asset............................................ 3.36%* Portfolio turnover rate........................... 47.2%
- ------------------------ (a) The Fund was declared effective by the Securities and Exchange Commission on March 1, 1995. * Annualized HARTFORD BOND FUND, INC. 11 - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS The following information, insofar as it relates to each of the five years in the period ended December 31, 1995, has been audited by Arthur Andersen LLP, independent public accountants, whose report thereon is included in the Statement of Additional Information, which is incorporated by reference to this prospectus.
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) ------------------------------------------------------------------------------------------------------ YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86 --------- --------- --------- --------- -------- -------- -------- -------- -------- -------- Net asset value at beginning of period.................. $ 0.926 $ 1.044 $ 1.024 $ 1.061 $ 0.979 $ 0.976 $ 0.945 $ 0.952 $ 1.033 $ 1.007 Net investment income.... 0.064 0.060 0.062 0.074 $ 0.072 $ 0.075 $ 0.079 $ 0.077 $ 0.080 $ 0.091 Net realized and unrealized gains (losses) on investments............. 0.102 (0.100) 0.039 (0.019) 0.082 0.003 0.031 (0.007) (0.081) 0.026 --------- --------- --------- --------- -------- -------- -------- -------- -------- -------- Total from investment operations.............. 0.166 (0.040) 0.101 0.055 0.154 0.078 0.110 0.070 (0.001) 0.117 Dividends from net investment income.................. (0.064) (0.060) (0.062) (0.074) (0.072) (0.075) (0.079) (0.077) (0.080) (0.091) Distribution from net realized gains on securities.............. 0.000 (0.018) (0.019) (0.018) 0.000 0.000 0.000 0.000 0.000 0.000 Return of capital........ 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 --------- --------- --------- --------- -------- -------- -------- -------- -------- -------- Total from distributions........... (0.064) (0.078) (0.081) (0.092) (0.072) (0.075) (0.079) (0.077) (0.080) (0.091) --------- --------- --------- --------- -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets........... 0.102 (0.118) 0.020 (0.037) 0.082 0.003 0.031 (0.007) (0.081) 0.026 Net asset value at end of period.................. $ 1.028 $ 0.926 $ 1.044 $ 1.024 $ 1.061 $ 0.979 $ 0.976 $ 0.945 $ 0.952 $ 1.033 --------- --------- --------- --------- -------- -------- -------- -------- -------- -------- --------- --------- --------- --------- -------- -------- -------- -------- -------- -------- Total Return............. 18.49% (3.95)% 10.24% 5.53% 16.43% 8.39% 12.10% 7.60% (0.01)% 12.19% Net Assets (in thousands).............. 342,495 247,458 239,602 128,538 97,377 70,915 61,602 54,215 50,037 57,160 Ratio of operating expenses to average net assets.................. 0.53% 0.55% 0.57% 0.64% 0.66% 0.67% 0.67% 0.69% 0.69% 0.71% Ratio of net investment income to average net asset................... 6.51% 6.23% 5.93% 7.21% 7.29% 7.82% 8.09% 8.12% 8.15% 8.93% Portfolio turnover rate.................... 215.0% 328.8% 494.3% 434.1% 337.0% 161.6% 225.0% 230.3% 53.3% 46.7% Current Yield *.......... 6.46% 7.19% 4.93% 6.48% 6.62% 8.17% 7.92% 9.15% 8.67% 8.82%
- ------------------------------ * The yield information will fluctuate and publication of yield may not provide a basis for comparison with bank deposits, other investments which are insured and/or pay a fixed yield for a stated period of time, or other investment companies. In addition, information may be of limited use for comparative purposes because it does not reflect charges imposed at the Separate Account level which, if included, would decrease the yield. 12 HARTFORD MORTGAGE SECURITIES FUND, INC. - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS The following information, insofar as it relates to each of the five years in the period ended December 31, 1995, has been audited by Arthur Andersen LLP, independent public accountants, whose report thereon is included in the Statement of Additional Information, which is incorporated by reference to this prospectus.
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) --------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86 --------- --------- --------- --------- --------- --------- -------- -------- -------- --------- Net asset value at beginning of period.... $ 0.984 $ 1.075 $ 1.079 $ 1.115 $ 1.054 $ 1.045 $ 1.006 $ 1.011 $ 1.087 $ 1.077 Net investment income... 0.068 0.068 0.071 0.086 $ 0.088 $ 0.087 $ 0.088 $ 0.087 $ 0.093 $ 0.104 Net realized and unrealized gains (losses) on investments............ 0.087 (0.086) (0.004) (0.036) 0.061 0.009 0.039 (0.005) (0.067) 0.010 --------- --------- --------- --------- --------- --------- -------- -------- -------- --------- Total from investment operations............. 0.155 (0.018) 0.067 0.050 0.149 0.096 0.127 0.082 0.026 0.114 Dividends from net investment income...... (0.068) (0.068) (0.071) (0.086) (0.088) (0.087) (0.088) (0.087) (0.093) (0.104) Distribution from net realized gains on securities............. 0.000 (0.005) 0.000 0.000 0.000 0.000 0.000 0.000 (0.009) 0.000 Return of capital....... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 --------- --------- --------- --------- --------- --------- -------- -------- -------- --------- Total from distributions.......... (0.068) (0.073) (0.071) (0.086) (0.088) (0.087) (0.088) (0.087) (0.102) (0.104) --------- --------- --------- --------- --------- --------- -------- -------- -------- --------- Net increase (decrease) in net assets.......... 0.087 (0.091) (0.004) (0.036) 0.061 0.009 0.039 (0.005) (0.076) 0.010 Net asset value at end of period.............. $ 1.071 $ 0.984 $ 1.075 $ 1.079 $ 1.115 $ 1.054 $ 1.045 $ 1.006 $ 1.011 $ 1.087 --------- --------- --------- --------- --------- --------- -------- -------- -------- --------- --------- --------- --------- --------- --------- --------- -------- -------- -------- --------- Total Return............ 16.17% (1.61)% 6.31% 4.64% 14.71% 9.70% 13.13% 8.38% 2.64% 11.13% Net Assets (in thousands)............. 327,565 304,147 365,198 258,711 162,484 105,620 85,908 85,075 84,075 100,518 Ratio of operating expenses to average net assets................. 0.47% 0.48% 0.49% 0.56% 0.58% 0.58% 0.58% 0.60% 0.61% 0.62% Ratio of net investment income to average net asset.................. 6.50% 6.65% 6.49% 7.96% 8.25% 8.42% 8.64% 8.56% 9.02% 9.57% Portfolio turnover rate................... 489.4% 365.7% 183.4% 277.2% 152.2% 85.6% 91.3% 185.0% 143.6% 103.1% Current Yield *......... 6.90% 7.84% 5.73% 7.51% 8.16% 8.21% 8.28% 9.12% 9.41% 8.90%
- ------------------------------ * The yield information will fluctuate and publication of yield may not provide a basis for comparison with bank deposits, other investments which are insured and/or pay a fixed yield for a stated period of time, or other investment companies. In addition, information may be of limited use for comparative purposes because it does not reflect charges imposed at the Separate Account level which, if included, would decrease the yield. HVA MONEY MARKET FUND, INC. 13 - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS The following information, insofar as it relates to each of the five years in the period ended December 31, 1995, has been audited by Arthur Andersen LLP, independent public accountants, whose report thereon is included in the Statement of Additional Information, which is incorporated by reference to this prospectus.
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) ----------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86 --------- --------- --------- --------- --------- --------- --------- --------- --------- -------- Net asset value at beginning of period............... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 Net investment income............... 0.056 0.039 0.029 0.036 $ 0.059 $ 0.078 $ 0.088 $ 0.071 $ 0.063 $ 0.066 Net realized and unrealized gains (losses) on investments.......... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 --------- --------- --------- --------- --------- --------- --------- --------- --------- -------- Total from investment operations........... 0.056 0.039 0.029 0.036 0.059 0.078 0.088 0.071 0.063 0.066 Dividends from net investment income.... (0.056) (0.039) (0.029) (0.036) (0.059) (0.078) (0.088) (0.071) (0.063) (0.066) Distribution from net realized gains on securities........... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Return of capital..... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 --------- --------- --------- --------- --------- --------- --------- --------- --------- -------- Total from distributions........ (0.056) (0.039) (0.029) (0.036) (0.059) (0.078) (0.088) (0.071) (0.063) (0.066) --------- --------- --------- --------- --------- --------- --------- --------- --------- -------- Net increase (decrease) in net assets............... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Net asset value at end of period............... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 --------- --------- --------- --------- --------- --------- --------- --------- --------- -------- --------- --------- --------- --------- --------- --------- --------- --------- --------- -------- Total Return.......... 5.74% 3.95% 2.94% 3.63% 6.01% 8.09% 9.10% 7.40% 6.49% 6.77% Net Assets (in thousands)........... 339,709 321,465 234,088 190,246 177,483 194,462 129,808 127,346 104,002 79,683 Ratio of operating expenses to average net assets........... 0.45% 0.47% 0.48% 0.53% 0.54% 0.57% 0.58% 0.58% 0.58% 0.58% Ratio of net investment income to average net asset.... 5.57% 3.99% 2.91% 3.60% 5.88% 7.80% 8.75% 7.19% 6.36% 6.56% Portfolio turnover rate................. -- -- -- -- -- -- -- -- -- -- Current Yield *....... 5.40% 5.43% 2.89% 3.09% 4.66% 7.73% 8.21% 8.49% 7.17% 5.45% Effective Yield *..... 5.54% 5.58% 2.93% 3.14% 4.79% 8.03% 8.55% 8.85% 7.43% 5.60%
- ------------------------------ * The yield information will fluctuate and publication of yield may not provide a basis for comparison with bank deposits, other investments which are insured and/or pay a fixed yield for a stated period of time, or other investment companies. In addition, information may be of limited use for comparative purposes because it does not reflect charges imposed at the Separate Account level which, if included, would decrease the yield. 14 HARTFORD U.S. GOVERNMENT MONEY MARKET FUND, INC. - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS The following information, insofar as it relates to each of the five years in the period ended December 31, 1995, has been audited by Arthur Andersen LLP, independent public accountants, whose report thereon is included in the Statement of Additional Information, which is incorporated by reference to this prospectus.
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD) -------------------------------------------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86 -------- ----------- ----------- -------- -------- -------- ----------- ----------- ----------- ----------- Net asset value at beginning of period....... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 Net investment income....... 0.054 0.036 0.027 0.032 $ 0.055 $ 0.073 $ 0.081 $ 0.067 $ 0.056 $ 0.061 Net realized and unrealized gains (losses) on investments... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 -------- ----------- ----------- -------- -------- -------- ----------- ----------- ----------- ----------- Total from investment operations... 0.054 0.036 0.027 0.032 0.055 0.073 0.081 0.067 0.056 0.061 Dividends from net investment income....... (0.054) (0.036) (0.027) (0.032) (0.055) (0.073) (0.081) (0.067) (0.056) (0.061) Distribution from net realized gains on securities... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Return of capital...... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 -------- ----------- ----------- -------- -------- -------- ----------- ----------- ----------- ----------- Total from distri butions...... (0.054) (0.036) (0.027) (0.032) (0.055) (0.073) (0.081) (0.067) (0.056) (0.061) -------- ----------- ----------- -------- -------- -------- ----------- ----------- ----------- ----------- Net increase (decrease) in net assets... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Net asset value at end of period....... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 -------- ----------- ----------- -------- -------- -------- ----------- ----------- ----------- ----------- -------- ----------- ----------- -------- -------- -------- ----------- ----------- ----------- ----------- Total Return....... 5.52% 3.67% 2.68% 3.22% 5.61% 7.52% 8.43% 6.92% 5.75% 6.29% Net Assets (in thousands)... 10,070 9,619 9,449 10,525 11,257 10,496 7,814 7,262 5,688 5,812 Ratio of operating expenses to average net assets....... 0.57% 0.58% 0.58% 0.75% 0.73% 0.73% 0.77% 0.75% 0.66% 0.60% Ratio of net investment income to average net asset........ 5.38% 3.63% 2.65% 3.19% 5.48% 7.29% 8.14% 6.76% 5.57% 6.08% Portfolio turnover rate......... -- -- -- -- -- -- -- -- -- -- Current Yield *............ 5.47% 5.14% 2.67% 2.69% 4.24% 7.59% 7.53% 8.27% 6.17% 5.26% Effective Yield *...... 5.62% 5.27% 2.71% 2.72% 4.31% 7.88% 7.82% 8.62% 6.36% 5.40%
- ------------------------------ * The yield information will fluctuate and publication of yield may not provide a basis for comparison with bank deposits, other investments which are insured and/or pay a fixed yield for a stated period of time, or other investment companies. In addition, information may be of limited use for comparative purposes because it does not reflect charges imposed at the Separate Account level which, if included, would decrease the yield. HARTFORD MUTUAL FUNDS 15 - -------------------------------------------------------------------------------- THE FUNDS The Funds are made available to serve as the underlying investment vehicles for certain variable annuity and variable life insurance separate accounts of ITT Hartford Life Insurance Companies. The Hartford Investment Management Company, Inc. ("HIMCO" or the "Adviser") serves as investment adviser to Hartford Index Fund, Inc., Hartford Bond Fund, Inc., Hartford Mortgage Securities Fund, Inc., HVA Money Market Fund, Inc. and Hartford U.S. Government Money Market Fund, Inc. and as investment manager to Hartford Capital Appreciation Fund, Inc., Hartford Dividend and Growth Fund, Inc., Hartford International Opportunities Fund, Inc., Hartford Stock Fund, Inc., Hartford Advisers Fund, Inc., and Hartford International Advisers Fund, Inc. Wellington Management Company ("WMC" or the "Sub-Adviser") serves as investment sub-adviser to Hartford Capital Appreciation Fund, Inc., Hartford Dividend and Growth Fund, Inc., Hartford International Opportunities Fund, Inc., Hartford Stock Fund, Inc., Hartford Advisers Fund, Inc., and Hartford International Advisers Fund, Inc. INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS The Funds have different investment objectives and policies, as described below. The differences in objectives and policies among the Funds can be expected to affect the return of each Fund and the degree of market and financial risk to which each Fund is subject. For more information about the investment strategies employed by the Funds, see "Common Investment Policies and Risk Factors." The investment objective of each Fund is fundamental and cannot be changed without the affirmative vote of a majority of the outstanding voting securities of the particular Fund. All other policies not specifically designated as fundamental are nonfundamental and may be changed by the Board of Directors of the particular Fund. See the Statement of Additional Information for a complete listing of investment restrictions. HARTFORD CAPITAL APPRECIATION FUND, INC. Hartford Capital Appreciation Fund, Inc. (the "Capital Appreciation Fund") was incorporated in 1983 under Maryland law. INVESTMENT OBJECTIVE. The Capital Appreciation Fund seeks to achieve growth of capital by investing in securities selected solely on the basis of potential for capital appreciation; income, if any, is an incidental consideration. INVESTMENT POLICIES. The Capital Appreciation Fund seeks to achieve its objective by investing primarily in equity securities and securities convertible into equity securities. The Sub-Adviser identifies, through fundamental analysis, companies that it believes have substantial near-term capital appreciation potential regardless of company size or industry sector. This approach is sometimes referred to as a "stock picking" approach and results in having all market capitalization sectors (i.e., small, medium, and large companies) represented in the portfolio. Small and medium companies are selected primarily on the basis of dynamic earnings growth potential. Larger companies are selected primarily based on the expectation for a catalyst event that will trigger stock price appreciation. Fundamental analysis involves the assessment of a company through such factors as its business environment, management, balance sheet, income statement, anticipated earnings, revenues, dividends, and other related measures of value. The Capital Appreciation Fund will invest primarily in securities issued by U.S. companies but may also invest in securities issued by non-U.S. companies, including those traded in U.S. markets and non-U.S. markets. Under normal circumstances, securities of non-U.S. companies will not exceed 20% of the Capital Appreciation Fund's total assets. The Capital Appreciation Fund's investments in securities of non-U.S. companies may include ADRs and GDRs. When selecting securities of non-U.S. issuers, the Sub-Adviser also will evaluate the economic and political climate and the principal securities markets of the country in which an issuer is located. The Capital Appreciation Fund will be subject to certain risks as a result of its ability to invest in the securities of non-U.S. companies. See "Common Investment Policies and Risk Factors." From time to time, the Capital Appreciation Fund may invest in debt securities. The non-convertible debt securities in which the Capital Appreciation Fund may invest include debt securities assigned within the four highest bond rating categories by Moody's or S&P, i.e., investment grade, or considered to be of comparable quality as determined by the Sub-Adviser. In addition, the Capital Appreciation Fund may invest up to 5% of total assets in high yield debt securities, commonly known as "junk bonds." Such securities are rated as low as "C" by Moody's and S&P, or if unrated, are of comparable quality as determined by the Sub-Adviser. See "Common Investment Policies and Risk Factors." Although the Capital Appreciation Fund intends to be fully invested in equity and debt securities, it may hold cash or cash equivalents and may invest any portion or all of its assets in high quality money market instruments in the following circumstances: (1) during periods when the Sub-Adviser deems it necessary for temporary defensive purposes; (2) to meet liquidity needs; or (3) in anticipation of investment of its assets. 16 HARTFORD MUTUAL FUNDS - -------------------------------------------------------------------------------- The Capital Appreciation Fund may invest up to 10% of its total assets in illiquid securities and may from time to time purchase securities on a when-issued or delayed delivery basis. In addition, the Capital Appreciation Fund may invest to a limited extent in other investment companies and may enter into certain currency transactions. Finally, the Capital Appreciation Fund may invest in options, futures, and options on futures. See "Common Investment Policies and Risk Factors." HARTFORD DIVIDEND AND GROWTH FUND, INC. Hartford Dividend and Growth Fund, Inc. (the "Dividend and Growth Fund") was incorporated in 1993 under Maryland law. INVESTMENT OBJECTIVE. The Dividend and Growth Fund seeks to achieve a high level of current income consistent with growth of capital and reasonable investment risk. INVESTMENT POLICIES. The Dividend and Growth Fund seeks to achieve its objective by investing primarily in equity securities and securities convertible into equity securities that typically have above average income yield and whose prospects for capital appreciation are considered favorable by the Sub-Adviser. The Sub-Adviser uses fundamental analysis to evaluate a security for purchase or sale by the Dividend and Growth Fund. Fundamental analysis involves the assessment of a company through such factors as its business environment, management, balance sheet, income statement, anticipated earnings, revenues, dividends, and other related measures of value. As a key component of the fundamental analysis done for the Dividend and Growth Fund, the Sub-Adviser evaluates a company's ability to sustain and potentially increase its dividend. The Dividend and Growth Fund's portfolio will be broadly diversified by industry and company; the Fund seeks to diversify its investments over a carefully selected list of securities in order to moderate the risks inherent in equity investments. The Dividend and Growth Fund will invest primarily in securities issued by U.S. companies but may also invest in securities issued by non-U.S. companies, including those traded in U.S. markets and non-U.S. markets. Under normal circumstances, securities of non-U.S. companies will not exceed 20% of the Dividend and Growth Fund's total assets. The Dividend and Growth Fund's investments in securities of non-U.S. companies may include ADRs and GDRs. When selecting securities of non-U.S. issuers, the Sub-Adviser also will evaluate the economic and political climate and the principal securities markets of the country in which an issuer is located. The Dividend and Growth Fund will be subject to certain risks as a result of its ability to invest in the securities of non-U.S. companies. See "Common Investment Policies and Risk Factors." From time to time, the Dividend and Growth Fund may invest in debt securities. The non-convertible debt securities in which the Dividend and Growth Fund may invest include debt securities assigned within the four highest bond rating categories by Moody's or S&P, i.e., investment grade, or considered to be of comparable quality as determined by the Sub-Adviser. Although the Dividend and Growth Fund intends to be fully invested in equity and debt securities, it may hold cash or cash equivalents and may invest any portion or all of its assets in high quality money market instruments in the following circumstances: (1) during periods when the Sub-Adviser deems it necessary for temporary defensive purposes; (2) to meet liquidity needs; or (3) in anticipation of investment of its assets. The Dividend and Growth Fund may invest up to 15% of its total assets in illiquid securities and may from time to time purchase securities on a when-issued or delayed delivery basis. In addition, the Dividend and Growth Fund may invest to a limited extent in other investment companies and may engage in certain currency transactions. Finally, the Dividend and Growth Fund may invest in options, futures, and options on futures. See "Common Investment Policies and Risk Factors." HARTFORD INDEX FUND, INC. Hartford Index Fund, Inc. (the "Index Fund") was incorporated in 1983 under Maryland law. INVESTMENT OBJECTIVE. The Index Fund seeks to provide investment results which approximate the price and yield performance of publicly-traded common stocks in the aggregate. INVESTMENT POLICIES. The Index Fund uses the Standard & Poor's 500 Composite Stock Price Index (the "Index") as its standard performance comparison because it represents a significant proportion of the total market value of all common stocks, is well known to investors and, in the opinion of the management of the Index Fund, is representative of the performance of publicly-traded common stocks. Therefore, the Index Fund attempts to approximate the capital performance and dividend income of the Index. The Index Fund will generally invest in no fewer than 475 stocks. The Adviser will select stocks for the Index Fund's portfolio after taking into account their individual weights in the Index. Temporary cash balances, normally not expected to exceed 2% of the Index Fund's net assets, may be invested in short-term money market instruments. The Index Fund may invest in ADRs and GDRs. The Index Fund may also from time to time enter into stock index futures contracts and options on such futures contracts to maintain optimal exposure to the Index and to hedge HARTFORD MUTUAL FUNDS 17 - -------------------------------------------------------------------------------- against changes in security prices. See "Common Investment Policies and Risk Factors." The Index is composed of 500 selected common stocks, most of which are listed on the New York Stock Exchange. S&P chooses the stocks to be included in the Index on a proprietary basis. The weightings of stocks in the Index are based on each stock's relative total market value, that is, its market price per share times the number of shares outstanding. Because of this weighting, as of December 31, 1995, approximately fifty percent of the Index was composed of the fifty-nine largest companies, the five largest being General Electric Co., AT&T Corp., Exxon Corp., Coca-Cola Company and Merck and Co. No attempt is made to "manage" the Index Fund's portfolio in the traditional sense, using economic, financial and market analysis, nor will the adverse financial situation of a company directly result in its elimination from the Index Fund's portfolio unless, of course, the company is removed from the Index. From time to time administrative adjustments may be made in the Index Fund's portfolio because of mergers, changes in the composition of the Index and similar reasons. The Index Fund's management believes that the "indexing" approach described above is an effective method of substantially duplicating percentage changes in the Index. It is a reasonable expectation that the correlation between the performance of the Index Fund (before expenses) and that of the Index will be above 98%; a figure of 100% would indicate perfect correlation. The Index Fund is regularly monitored to determine if it is meeting its targeted performance. In the event of any deviation from the targeted performance, the security holdings of the Index Fund are rebalanced to better replicate the index. At some time in the future, the Board of Directors of the Index Fund may, subject to shareholder approval, select another index if such a standard of comparison is deemed to be more representative of the performance of common stocks. The Index Fund's ability to approximate the performance of the Index will depend to some extent on the size of cash flows into and out of the Index Fund. Investment changes to accommodate these cash flows will be made to maintain the similarity of the Index Fund's portfolio to the Index, to the maximum practicable extent. "Standard & Poor's-Registered Trademark-", "S&P-Registered Trademark-", "S&P 500-Registered Trademark-", "Standard & Poor's 500", and "500" are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the Hartford Life Insurance Company. The Index Fund is not sponsored, endorsed, sold or promoted by S&P. S&P makes no representation or warranty, express or implied, to the shareholders of the Index Fund, regarding the advisability of investing in securities generally or in the Index Fund particularly or the ability of the S&P 500 Index to track general stock market performance. S&P's only relationship to Hartford Life Insurance Company is the licensing of certain trademarks and trade names of S&P and of the S&P 500 Index which is determined, composed and calculated by S&P without regard to the Index Fund or Hartford Life Insurance Company. S&P has no obligation to take the needs of the Index Fund or its shareholders or Hartford Life Insurance Company into consideration in determining, composing or calculating the S&P 500 Index. S&P is not responsible for and has not participated in the determination of the net asset value of the Index Fund or the timing of the issuance or sale of shares in the Index Fund. S&P has no obligation or liability in connection with the administration, marketing or trading of the Index Fund. In addition, S&P does not guarantee the accuracy and/ or the completeness of the S&P 500 Index or any data included therein and S&P shall have no liability for any errors, omissions, or interruptions therein. S&P makes no warranty, express or implied, as to results to be obtained by the Index Fund, its shareholders or any other person or entity from the use of the S&P 500 Index or any data included therein. S&P makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to the S&P 500 Index or any data included therein. Without limiting any of the foregoing, in no event shall S&P have any liability for any special, punitive, indirect, or consequential damages (including lost profits), even if notified of the possibility of such damages. HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC. Hartford International Opportunities Fund, Inc. (the "International Opportunities Fund") was incorporated in 1990 under Maryland law. INVESTMENT OBJECTIVE. The International Opportunities Fund seeks to achieve long-term total rate of return consistent with prudent investment risk through investment primarily in equity securities issued by non-U.S. companies. INVESTMENT POLICIES. The International Opportunities Fund seeks to achieve its investment objective by investing in a diversified portfolio of primarily equity securities which covers a broad range of countries, industries, and companies. The International Opportunities Fund anticipates that, under normal market conditions, it will diversify its investments among a minimum of five countries; the Fund will not invest more than 20% of its net assets in securities of issuers located in any one country, except that it may invest up to 35% of its net assets in securities of issuers located in any one of the following countries: Australia, Canada, France, Japan, the United Kingdom or Germany. 18 HARTFORD MUTUAL FUNDS - -------------------------------------------------------------------------------- Securities in which the International Opportunities Fund invests are denominated in both U.S. dollars and non-U.S. currencies (including the European Currency Unit) and generally are traded on non-U.S. markets. Under normal market conditions, at least 70% of the International Opportunities Fund's total assets will be invested in equity securities issued by non-U.S. companies. Equity securities in which the International Opportunities Fund invests include common stocks, preferred stocks, convertible securities, and warrants and rights to acquire such securities. The International Opportunities Fund may invest in ADRs and GDRs. See "Common Investment Policies and Risk Factors." Equity investments are selected on the basis of fundamental analysis to identify those markets and securities that provide capital appreciation potential. Fundamental analysis involves the assessment of a company through such factors as its business environment, management, balance sheet, income statement, anticipated earnings, revenues, dividends and other related measures of value. In analyzing companies for investment, the Sub-Adviser looks for, among other things, a strong balance sheet, attractive industry dynamics, strong competitive advantages, and attractive relative value within the context of a security's primary trading market. In addition to fundamental analysis of companies and industries, the Sub-Adviser evaluates the economic and political environments of the countries in which the securities are traded. The International Opportunities Fund's investments in debt securities will be substantially similar to the debt securities investments permitted for the International Advisers Fund. See "Hartford International Advisers Fund, Inc. -- Investment Policies." Although the International Opportunities Fund intends to be fully invested in equity and debt securities, it may hold cash and cash equivalents (U.S. dollars, non-U.S. currencies, multinational currency units) and may invest any portion or all of its assets in high quality money market instruments of U.S., non-U.S., or supranational issuers in the following circumstances: (1) during periods when the Sub-Adviser deems it necessary for temporary defensive purposes; (2) to meet liquidity needs; or (3) in anticipation of investment of its assets. The International Opportunities Fund may invest in non-U.S. money market funds and commingled pools offered by non-U.S. banks. The International Opportunities Fund will be subject to certain risks as a result of its ability to invest in the securities of non-U.S. companies. The International Opportunities Fund is permitted to invest up to 15% of its total assets in illiquid securities and may from time to time purchase securities on a when- issued or delayed delivery basis. In addition, the International Opportunities Fund may invest to a limited extent in other investment companies and enter into certain currency transactions. Finally, the International Opportunities Fund is permitted to invest in options, futures and options on futures. See "Common Investment Policies and Risk Factors." HARTFORD STOCK FUND, INC. Hartford Stock Fund, Inc. (the "Stock Fund") was incorporated in 1976 under Maryland law. INVESTMENT OBJECTIVE. The Stock Fund seeks to achieve long-term capital growth primarily through capital appreciation, with income a secondary consideration, by investing in primarily equity securities. INVESTMENT POLICIES. The Stock Fund seeks to achieve its objective by investing primarily in equity securities and securities convertible into equity securities, using a two-tiered investment approach. First, under what is sometimes referred to as a "top down" approach, the Sub-Adviser analyzes the macro economic and investment environment. This includes an evaluation of economic conditions, U.S. fiscal and monetary policy, demographic trends, and investor sentiment. Through top down analysis, the Sub-Adviser anticipates secular and cyclical changes and identifies industries and economic sectors that are expected to grow faster than the overall economy. Second, top down analysis is followed by what is sometimes referred to as a "bottom up" approach, which is the use of fundamental analysis to identify specific securities for purchase or sale. The Stock Fund's portfolio emphasizes high-quality growth companies. The key characteristics of high-quality growth companies include a leadership position within an industry, a strong balance sheet, a high return on equity, sustainable or increasing dividends, a strong management team, and a globally competitive position. Fundamental analysis involves the assessment of a company through such factors as its business environment, management, balance sheet, income statement, anticipated earnings, revenues, dividends, and other related measures of value. The Stock Fund will invest primarily in securities issued by U.S. companies but may also invest in securities issued by non-U.S. companies, including those traded in U.S. markets and non-U.S. markets. Under normal circumstances, securities of non-U.S. companies will not exceed 20% of the Stock Fund's total assets. The Stock Fund's investments in securities of non-U.S. companies may include ADRs and GDRs. When selecting securities of non-U.S. issuers, the Sub- Adviser also will evaluate the economic and political climate and the principal securities markets of the country in which an issuer is located. The Stock Fund will be subject to certain risks as a result of its ability to invest in the securities of non-U.S. companies. See "Common Investment Policies and Risk Factors." From time to time, the Stock Fund may invest in debt securities. The non-convertible debt securities in HARTFORD MUTUAL FUNDS 19 - -------------------------------------------------------------------------------- which the Stock Fund may invest include debt securities assigned within the four highest bond rating categories by Moody's or S&P, i.e., investment grade, or considered to be of comparable quality as determined by the Sub-Adviser. Although the Stock Fund intends to be fully invested primarily in equity securities and securities convertible into equity securities it may hold cash or cash equivalents and may invest any portion or all of its assets in high quality money market instruments in the following circumstances: (1) during periods when the Sub-Adviser deems it necessary for temporary defensive purposes; (2) to meet liquidity needs; or (3) in anticipation of investment of its assets. The Stock Fund may invest up to 10% of its total assets in illiquid securities and may from time to time purchase securities on a when-issued or delayed delivery basis. In addition, the Stock Fund may invest to a limited extent in other investment companies and may enter into certain currency transactions. Finally, the Stock Fund may invest in options, futures and options on futures. See "Common Investment Policies and Risk Factors." HARTFORD ADVISERS FUND, INC. Hartford Advisers Fund, Inc. (the "Advisers Fund") was incorporated in 1982 under Maryland law. INVESTMENT OBJECTIVE. The Advisers Fund seeks to achieve maximum long-term total rate of return consistent with prudent investment risk by investing in common stock and other equity securities, bonds and other debt securities, and money market instruments. INVESTMENT POLICIES. The Advisers Fund seeks to achieve its objective through the active allocation of its assets among the asset categories of equity and debt securities and money market instruments, based upon the Sub-Adviser's judgment of the projected investment environment for financial assets, relative fundamental values and attractiveness of each asset category, and expected future returns of each asset category. The Sub-Adviser will base its asset allocation decisions on fundamental analysis and will not attempt to make short- term market timing decisions among asset categories. As a result, shifts in asset allocation are expected to be gradual and continuous and the Advisers Fund will normally have some portion of its assets invested in each asset category. The Advisers Fund does not have percentage limitations on the amount allocated to each asset category. The Advisers Fund's investments in equity securities and securities that are convertible into equity securities will be substantially similar to the investments permitted for the Stock Fund. See "Hartford Stock Fund, Inc. -- Investment Policies." The Advisers Fund's investments in debt securities will be substantially similar to the investments permitted for the Bond Fund. See "Hartford Bond Fund, Inc. -- Investment Policies." In the event a security owned by the Advisers Fund is downgraded to a rating category below investment grade, the Advisers Fund generally will sell it within a reasonable period thereafter based on the Sub-Adviser's outlook for the issuer and the security. The Advisers Fund will invest primarily in securities issued by U.S. companies but may also invest in securities issued by non-U.S. companies, including those traded in U.S. markets and non-U.S. markets. Under normal circumstances, securities of non-U.S. companies will not exceed 20% of the Advisers Fund's total assets. The Advisers Fund's investments in securities of non-U.S. companies may include ADRs and GDRs. When selecting securities of non- U.S. issuers, the Sub-Adviser also will evaluate the economic and political climate and the principal securities markets of the country in which an issuer is located. The Advisers Fund will be subject to certain risks as a result of its ability to invest in the securities of non-U.S. companies. See "Common Investment Policies and Risk Factors." The Advisers Fund may hold cash and cash equivalents and may invest any portion or all of its assets in high quality money market instruments in the following circumstances: (1) when the Sub-Adviser expects returns on such instruments to be attractive relative to investments in equity and debt securities; (2) during periods when the Sub-Adviser deems it necessary for temporary defensive purposes; (3) to meet liquidity needs; or (4) in anticipation of investment of its assets. The Advisers Fund may invest up to 10% of its total assets in illiquid securities and may from time to time purchase securities on a when-issued or delayed delivery basis. In addition, the Advisers Fund may invest to a limited extent in other investment companies and enter into certain currency transactions. Finally, the Advisers Fund may invest in options, futures, and options on futures. See "Common Investment Policies and Risk Factors." HARTFORD INTERNATIONAL ADVISERS FUND, INC. Hartford International Advisers Fund, Inc. (the "International Advisers Fund") was incorporated in 1994 under Maryland law. INVESTMENT OBJECTIVE. The International Advisers Fund seeks to achieve maximum long-term total rate of return consistent with prudent investment risk. INVESTMENT POLICIES. The International Advisers Fund seeks to achieve its objective through the active allocation of its assets among the asset categories of equity and debt securities and money market instruments, based upon its judgment of the 20 HARTFORD MUTUAL FUNDS - -------------------------------------------------------------------------------- projected investment environment for financial assets, relative fundamental values and attractiveness of each asset category, and expected future returns of each asset category. The Sub-Adviser will base its asset allocation decisions on fundamental analysis and will not attempt to make short-term timing decisions among asset categories. As a result, shifts in asset allocation are expected to be gradual and continuous and the International Advisers Fund will normally have some portion of its assets invested in each asset category at all times. The International Advisers Fund does not have percentage limitations on the amount allocated to each asset category. The International Advisers Fund will consist of a diversified portfolio of securities covering a broad range of countries, industries, and companies. The International Advisers Fund anticipates that, under normal market conditions, it will diversify its investments among a minimum of five countries; the Fund will not invest more than 20% of its net assets in securities of issuers located in any one country, except that it may invest up to 35% of its net assets in securities of issuers located in any one of the following countries: Australia, Canada, France, Japan, the United Kingdom or Germany. Securities in which the International Advisers Fund invests are denominated in both U.S. dollars and non-U.S. currencies (including the European Currency Unit) and generally are traded on non-U.S. markets. The International Advisers Fund's investments in equity securities will be substantially similar to the equity securities investments permitted for the International Opportunities Fund. See "Hartford International Opportunities Fund, Inc. -- Investment Policies." The International Advisers Fund's investments in debt securities include, but are not limited to: (1) debt securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities; (2) debt obligations issued or guaranteed by a non-U.S. sovereign government or one of its agencies or political subdivisions, including Brady Bonds (see "Common Investment Policies and Risk Factors"); (3) debt obligations issued or guaranteed by supranational organizations such as the World Bank; (4) debt obligations of non-U.S. banks and bank holding companies; (5) non-U.S. corporate debt securities; (6) debt obligations of U.S. banks and corporations; (7) non-U.S. commercial paper; (8) asset-backed securities and mortgage-related securities, including CMOs; these debt securities will be rated investment grade by Moody's or S&P, or, if unrated, will be determined by the Sub-Adviser to be of comparable quality (see "Common Investment Policies and Risk Factors"); and (9) repurchase agreements involving any of the foregoing. The International Advisers Fund's investments in debt securities will be based on an analysis of such factors as yield, credit quality, economic policies, inflation rates, and the pace of economic growth in various markets. Debt securities in which the International Advisers Fund may invest include investment grade, non-convertible debt securities assigned within the four highest bond rating categories by Moody's or S&P, or, if unrated, which are determined by the Sub-Adviser to be of comparable quality. In addition, the International Advisers Fund may invest up to 15% of its total assets in high yield debt securities, commonly known as "junk bonds." Such securities are rated as low as "C" by Moody's and by S&P, or, if unrated, are of comparable quality as determined by the Sub-Adviser. See "Common Investment Policies and Risk Factors." The International Advisers Fund may hold cash and cash equivalents (U.S. dollars, non-U.S. currencies, multinational currency units) and may invest any portion or all of its assets in high quality money market instruments, including, but not limited to, instruments of U.S., non-U.S., or supranational issuers. These money market instruments may also include non-U.S. money market funds and commingled pools offered by non-U.S. banks. The International Advisers Fund may invest in high quality money market instruments in the following circumstances: (1) when the Sub-Adviser expects returns on such instruments to be attractive relative to investments in equity and debt securities; (2) during periods when the Sub-Adviser deems it necessary for temporary defensive purposes; (3) to meet liquidity needs; or (4) in anticipation of investment of its assets. The International Advisers Fund will be subject to certain risks as a result of its ability to invest in the securities of non-U.S. companies. The International Advisers Fund may invest up to 15% of its total assets in illiquid securities and may from time to time purchase securities on a when-issued or delayed delivery basis. In addition, the International Advisers Fund may invest to a limited extent in other investment companies and may enter into certain currency transactions. Finally, the International Advisers Fund may invest in options, futures, and options on futures. See "Common Investment Policies and Risk Factors." HARTFORD BOND FUND, INC. Hartford Bond Fund, Inc. (the "Bond Fund") was incorporated in 1982 under Maryland law. INVESTMENT OBJECTIVE. The Bond Fund seeks to achieve maximum current income consistent with preservation of capital by investing primarily in fixed-income securities. INVESTMENT POLICIES. The Bond Fund's investments in bonds and other debt securities include: (i) securities issued or guaranteed as to principal or interest by the U.S. Government, its agencies or instrumentalities; (ii) publicly-traded, non-convertible debt HARTFORD MUTUAL FUNDS 21 - -------------------------------------------------------------------------------- securities issued or guaranteed by U.S. corporations or other issuers and rated investment grade by Moody's or S&P, or if unrated, determined by the Adviser to be of comparable quality; (iii) asset-backed securities and mortgage-related securities, including CMOs, which are rated investment grade by Moody's or S&P, or, if unrated, which are determined by the Adviser to be of comparable quality (see "Common Investment Policies and Risk Factors"); (iv) securities issued or guaranteed as to principal or interest by a sovereign government or one of its agencies or political subdivisions, supranational entities such as development banks, non-U.S. corporations, banks or bank holding companies, or other non-U.S. issuers and rated investment grade by Moody's or S&P, or, if unrated, which are determined by the Adviser to be of comparable quality. Bonds and other debt securities owned by the Bond Fund will be denominated in U.S. dollars. In the event a security owned by the Bond Fund is downgraded to a rating category below investment grade, the Bond Fund generally will sell it within a reasonable period thereafter based on the Adviser's outlook for the issuer and the security. The Bond Fund will invest primarily in securities issued by U.S. companies but may also invest in securities issued by non-U.S. companies, including those traded in U.S. markets and non-U.S. markets. Under normal circumstances, securities of non-U.S. companies will not exceed 20% of the Bond Fund's total assets. The Bond Fund's investments in securities of non-U.S. companies may include ADRs and GDRs. When selecting securities of non-U.S. issuers, the Adviser also will evaluate the economic and political climate, and the principal securities markets of the country in which an issuer is located. The Bond Fund will be subject to certain risks as a result of its ability to invest in the securities of non-U.S. companies. See "Common Investment Policies and Risk Factors." The Bond Fund will invest at least 65% of its total assets in bonds and debt securities with a maturity of at least one year. The Bond Fund may invest up to 15% of its total assets in preferred stocks, convertible securities, and securities carrying warrants to purchase equity securities. The Bond Fund will not invest in common stocks directly, but may retain, for reasonable periods of time, common stocks acquired upon conversion of debt securities or upon exercise of warrants acquired with debt securities. Although the Bond Fund intends to be fully invested in equity and debt securities, it may hold cash or cash equivalents and may invest any portion or all of its assets in high quality money market instruments in the following circumstances: (1) during periods when the Adviser deems it necessary for temporary defensive purposes; (2) to meet liquidity needs; or (3) in anticipation of investment of its assets. The Bond Fund may invest up to 10% of its total assets in illiquid securities and may from time to time purchase securities on a when-issued or delayed delivery basis. In addition, the Bond Fund may invest to a limited extent in other investment companies. HARTFORD MORTGAGE SECURITIES FUND, INC. Hartford Mortgage Securities Fund, Inc. (the "Mortgage Securities Fund") was incorporated in 1984 under Maryland law. INVESTMENT OBJECTIVE. The Mortgage Securities Fund seeks maximum current income consistent with safety of principal and maintenance of liquidity by investing primarily in mortgage-related securities, including securities issued by the Government National Mortgage Association. INVESTMENT POLICIES. The Mortgage Securities Fund seeks to achieve its objective by investing, under normal circumstances, at least 65% of its total assets in high quality mortgage-related securities either (i) issued by U.S. Government agencies, instrumentalities or sponsored corporations or (ii) rated A or better by Moody's or S&P or, if not rated, which are of equivalent investment quality as determined by the Adviser. At times the Mortgage Securities Fund may invest in mortgage-related securities not meeting the foregoing investment quality standards when the Adviser deems such investments to be consistent with the Fund's investment objective; however, no such investments will be made in excess of 20% of the value of the Fund's total assets. Such investments will be considered mortgage-related securities for purposes of the policy that the Fund invest at least 65% of the value of its total assets in mortgage-related securities, including securities issued by the GNMA. See "Common Investment Policies and Risk Factors". Consistent with its objective, the Mortgage Securities Fund may seek to increase its current return by writing covered call or covered put options with respect to some or all of the securities held in its portfolio. In addition, through the writing and purchase of options and the purchase and sale of interest rate futures contracts and related options, the Mortgage Securities Fund may at times seek to reduce fluctuations in net asset value by hedging against a decline in the value of securities owned by the Fund or an increase in the price of securities which the Fund plans to purchase. The Mortgage Securities Fund may also invest up to 10% of its total assets in illiquid securities, purchase asset-backed securities, and enter into swap transactions. See "Common Investment Policies and Risk Factors." Although the Mortgage Securities Fund intends to be fully invested in debt securities, it may hold cash or cash equivalents and invest any portion or all of its assets in high 22 HARTFORD MUTUAL FUNDS - -------------------------------------------------------------------------------- quality money market instruments in the following circumstances: (1) during periods when the Sub-Adviser deems it necessary for temporary defensive purposes; (2) to meet liquidity needs; or (3) in anticipation of investment of its assets. HARTFORD U.S. GOVERNMENT MONEY MARKET FUND, INC. Hartford U.S. Government Money Market Fund, Inc. (the "U.S. Government Money Market Fund") was incorporated in 1982 under Maryland law. INVESTMENT OBJECTIVE. The U.S. Government Money Market Fund seeks to achieve maximum current income consistent with preservation of capital. INVESTMENT POLICIES. The U.S. Government Money Market Fund's portfolio will consist entirely of cash and investments permitted by Rule 2a-7 under the 1940 Act. Each has an effective maturity date of 397 days or less, computed in accordance with Rule 2a-7, from date of purchase. The average maturity of the portfolio will vary according to the Adviser's appraisal of money market conditions and will not exceed 90 days. The U.S. Government Money Market Fund seeks to achieve its objective by investing in short-term, marketable obligations issued or guaranteed by the U.S. Government or by agencies or instrumentalities of the U.S. Government, whether or not they are guaranteed by the full faith and credit of the U.S. government. HVA MONEY MARKET FUND, INC. HVA Money Market Fund, Inc. (the "Money Market Fund") was incorporated in 1982 under Maryland law. INVESTMENT OBJECTIVE. The Money Market Fund seeks to achieve maximum current income consistent with liquidity and preservation of capital. INVESTMENT POLICIES. The Money Market Fund's portfolio will consist entirely of cash and investments permitted under Rule 2a-7 of the 1940 Act. Each has an effective maturity date of 397 days or less computed in accordance with Rule 2a-7. The average maturity of the portfolio will vary according to the Adviser's appraisal of money market conditions and will not exceed 90 days. The Money Market Fund seeks to achieve its objective by investing in money market securities such as, but not limited to: (a) banker's acceptances; (b) obligations of governments (whether U.S. or non-U.S.) and their agencies and instrumentalities; (c) short-term corporate obligations, including commercial paper, notes, and bonds; (d) other short-term debt obligations; (e) obligations of U.S. banks, non-U.S. branches of U.S. banks (Eurodollars), U.S. branches and agencies of non-U.S. banks (Yankee dollars), and non-U.S. branches of non-U.S. banks; and (f) asset-backed securities. See "Common Investment Policies and Risk Factors." Under normal circumstances, foreign securities will not exceed 25% of the Money Market Fund's total assets. The Money Market Fund will make portfolio investments primarily in anticipation of or in response to changing economic and money market conditions and trends. However, it is anticipated that from time to time the Money Market Fund will take advantage of temporary disparities in the yield relationships among the different segments of the money market or among particular instruments within the same segment of the market, to make purchases and sales when the Adviser deems that such transactions will improve the yield or return of the portfolio. COMMON INVESTMENT POLICIES AND RISK FACTORS REPURCHASE AGREEMENTS The Funds may enter into repurchase agreements with respect to securities issued or guaranteed by the U.S. Government, with commercial banks having a minimum capital base of $500 million and assets in excess of $1 billion or with recognized government securities dealers with a minimum net capital base of $100 million. The Funds' Boards of Directors have established standards for evaluation of the creditworthiness of the banks and securities dealers with which the Funds will engage in repurchase agreements and monitors on a quarterly basis the Adviser's and Sub-Adviser's compliance with such standards. A repurchase agreement is an agreement by which the seller of a security agrees to repurchase the security sold at a mutually agreed upon time and price. It may also be viewed as the loan of money by a Fund to the seller. The resale price normally is in excess of the purchase price, reflecting an agreed upon market rate. The rate is effective for the period of time a Fund is invested in the agreement and is not related to the coupon rate on the underlying security. The period of these repurchase agreements will usually be short, from overnight to one week, and at no time will a Fund invest in repurchase agreements for a period of more than one year. The securities which are subject to repurchase agreements, however, may have maturity dates in excess of one year from the effective date of the repurchase agreement. A Fund will always receive as collateral securities whose market value, including accrued interest, will be at least equal to 100% of the dollar amount invested by a Fund HARTFORD MUTUAL FUNDS 23 - -------------------------------------------------------------------------------- in each agreement, and a Fund will make payment for such securities only upon physical delivery or evidence of book entry transfer. If the seller defaults, a Fund might incur a loss if the value of the collateral securing the repurchase agreement declines and may incur disposition costs in connection with liquidating the collateral. A Fund may not enter into a repurchase agreement with more than seven days to maturity if, as a result, more than 10% of the Fund's total assets would be invested in such repurchase agreements together with any other investment for which market quotations are not readily available. ILLIQUID SECURITIES Each Fund, except the Index Fund, is permitted to invest in illiquid securities. No illiquid securities will be acquired if upon the purchase more than 10% or 15% of the value of a Fund's total assets, varying by Fund (15% for the Dividend and Growth Fund, International Advisers Fund and International Opportunities Fund, 10% for the Advisers Fund, Capital Appreciation Fund, Bond Fund, Mortgage Securities Fund, Stock Fund, U.S. Government Money Market Fund and Money Market Fund ), would consist of these securities. "Illiquid securities" are securities that may not be sold or disposed of in the ordinary course of business within seven days at approximately the price used to determine a Fund's net asset value. Under current interpretations of the SEC Staff, the following securities in which a Fund may invest will be considered illiquid: (1) repurchase agreements maturing in more than seven days; (2) certain restricted securities (securities whose public resale is subject to legal or contractual restrictions); (3) options, with respect to specific securities, not traded on a national securities exchange that are not readily marketable; and (4) any other securities in which a Fund may invest that are not readily marketable. These Funds may purchase without limit, however, certain restricted securities that can be resold to qualifying institutions pursuant to a regulatory exemption under Rule 144A under the 1933 Act ("Rule 144A securities"). If a dealer or institutional trading market exists for Rule 144A securities, such securities are deemed to be liquid and thus treated as exempt from a Fund's 10% or 15% limitation on the investment in illiquid securities. Under the supervision of the Board of Directors, the Adviser or Sub-Adviser determines the liquidity of Rule 144A securities and, through reports from the Adviser or Sub-Adviser, the Board of Directors monitors trading activity in these securities. In reaching liquidity decisions, the Adviser or Sub-Adviser will consider, among other things, the following factors: (1) the frequency of trades and price quotes for the security; (2) the number of dealers willing to purchase or sell the security and the number of other potential purchasers; (3) dealer undertakings to make a market in the security; and (4) the nature of the security and the marketplace trades (e.g., the time needed to dispose of the security, the method of soliciting offers, and the procedures for transfer). Because institutional trading in Rule 144A securities is relatively new, it is difficult to predict accurately how these markets will develop. If institutional trading in Rule 144A securities declines, a Fund's liquidity could be adversely affected to the extent that a Fund is invested in such securities. WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES The Capital Appreciation Fund, the Dividend and Growth Fund, the International Opportunities Fund, the Stock Fund, the Index Fund, the Advisers Fund, the International Advisers Fund, the Bond Fund and the Mortgage Securities Fund may purchase or sell securities on a when-issued or delayed-delivery basis. When-issued or delayed-delivery transactions arise when securities are purchased or sold with payment and delivery taking place in the future in order to secure what is considered to be an advantageous price and yield at the time of entering into the transaction. While these Funds generally purchase securities on a when- issued or delayed-delivery basis with the intention of acquiring the securities, the Funds may sell the securities before the settlement date, if the Adviser or Sub-Adviser deems it advisable. At the time a Fund makes the commitment to purchase securities on a when-issued or delayed-delivery basis, the Fund will record the transaction and thereafter reflect the value, each day, of such security in determining the net asset value of the Fund. At the time of delivery of the securities, the value may be more or less than the purchase price. The Funds' custodian will maintain, in a segregated account of the Fund, cash, U.S. Government securities or other liquid, high-grade debt obligations having a value equal to or greater than the Fund's purchase commitments; the custodian will likewise segregate securities sold on a delayed-delivery basis. OTHER INVESTMENT COMPANIES The Capital Appreciation Fund, the Dividend and Growth Fund, the International Opportunities Fund, the Bond Fund, the Stock Fund, the Advisers Fund, and the International Advisers Fund are permitted to invest in other investment companies. Securities issued in certain countries are currently accessible to the Funds only through such investments. The investment in other investment companies is limited in amount by the 1940 Act, and will involve the indirect payment of a portion of the expenses, including advisory fees, of such other investment companies. No Fund may acquire more than 3% of the outstanding voting securities of any other investment company, and no Fund may have more than 5% of its total assets invested in any other investment company. See "Investment Restrictions of the Funds" in the Statement of Additional Information. 24 HARTFORD MUTUAL FUNDS - -------------------------------------------------------------------------------- CURRENCY TRANSACTIONS The Capital Appreciation Fund, the Dividend and Growth Fund, the International Opportunities Fund, the Stock Fund, the Advisers Fund and the International Advisers Fund may engage in currency transactions to hedge the value of portfolio securities denominated in particular currencies against fluctuations in relative value. Currency transactions include forward currency contracts, exchange-listed and over-the-counter ("OTC") currency futures contracts and options thereon, exchange listed and OTC options on currencies, and currency swaps. These Funds may invest in forward currency contracts, which involve a privately negotiated obligation to purchase or sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. In addition, these Funds may engage in currency swaps, which are agreements to exchange cash flows based on the notional difference among two or more currencies. See "Swap Agreements." These Funds also may engage in exchange-listed and OTC currency futures contracts and options thereon, and exchange listed and OTC options on currencies. See "Options and Futures Contracts." These Funds may cross-hedge currencies by entering into transactions to purchase or sell one or more currencies that are expected to increase or decline in value relative to other currencies to which the Funds have, or in which the Funds expect to have, exposure. To reduce the effect of currency fluctuation on the value of existing or anticipated holdings of their securities, these Funds may also engage in proxy hedging. Proxy hedging is used when the currency to which a portfolio holding is exposed is difficult to hedge generally or difficult to hedge against the U.S. dollar. Proxy hedging entails entering into a forward contract to buy U.S. dollars and to sell a currency, the changes in the value of which generally are considered to be linked to the currency to which the portfolio holding is exposed. The amount of the contract would not exceed the market value of the Fund's securities denominated in the linked currency. The use of currency transactions to protect the value of a Fund's assets against a decline in the value of a currency does not eliminate fluctuations in the value of the Fund's underlying securities. Further, these Funds may enter into currency transactions only with counterparties that the Sub-Adviser deems to be creditworthy. OPTIONS AND FUTURES CONTRACTS In seeking to protect against the effect of changes in equity market values, currency exchange rates or interest rates that are adverse to the present or prospective position of the Funds, for cash flow management, and, to a lesser extent, to enhance returns, the Capital Appreciation Fund, the Dividend and Growth Fund, the Index Fund, the International Opportunities Fund, the Stock Fund, the Advisers Fund, the International Advisers Fund, the Bond Fund and the Mortgage Securities Fund may employ certain hedging, income enhancement and risk management techniques, including the purchase and sale of options, futures and options on futures involving equity and debt securities and foreign currencies, aggregates of equity and debt securities, indices of prices of equity and debt securities, and other financial indices. A Fund's ability to engage in these practices may be limited by tax considerations and certain other legal considerations. These Funds may write covered call options or purchase covered put options on portfolio securities as a partial hedge (to the extent of the premium received less transaction costs) against a decline in the value of portfolio securities and in circumstances in which the Adviser or the Sub-Adviser anticipates that the price of the underlying securities will not increase above the exercise price of the option by an amount greater than the premium received (less transaction costs incurred) by the Fund. This strategy limits potential capital appreciation in the portfolio securities subject to the put or call option. These Funds may also write covered put and call options and purchase put and call options on foreign currencies to hedge against the risk of foreign exchange fluctuations on foreign securities the particular Fund holds in its portfolio or that it intends to purchase. For example, if a Fund enters into a contract to purchase securities denominated in foreign currency, it could effectively establish the maximum U.S. dollar cost of the securities by purchasing call options on that foreign currency. Similarly, if a Fund held securities denominated in a foreign currency and anticipated a decline in the value of that currency against the U.S. dollar, the Fund could hedge against such a decline by purchasing a put option on the foreign currency involved. In addition, these Funds may purchase put and call options and write covered put and call options on aggregates of equity and debt securities, indices of prices of equity and debt securities and other financial indices, and may enter into futures contracts and options thereon for the purchase or sale of aggregates of equity and debt securities, indices of equity and debt securities and other financial indices, all for the purpose of protecting against potential changes in the market value of portfolio securities or in interest rates. Aggregates are composites of equity or debt securities that are not tied to a commonly known index. An index is a measure of the value of a group of securities or other interests. An index assigns relative values to the securities included in that index, and the index fluctuates with changes in the market value of those securities. HARTFORD MUTUAL FUNDS 25 - -------------------------------------------------------------------------------- These Funds may write covered options only. "Covered" means that, so long as a Fund is obligated as the writer of a call option, it will own either the underlying securities or currency or an option to purchase the same underlying securities or currency having an expiration date not earlier than the expiration date of the covered option and an exercise price equal to or less than the exercise price of the covered option, or will establish or maintain with its custodian for the term of the option a segregated account consisting of cash, U.S. Government securities or other liquid, high grade debt obligations having a value equal to the fluctuating market value of the optioned securities or currencies. A Fund will cover any put option it writes by maintaining a segregated account with its custodian as described above. A Fund will not write covered call options on portfolio securities representing more than 25% of the value of its total assets. To hedge against fluctuations in currency exchange rates, these Funds may purchase or sell foreign currency futures contracts, and write put and call options and purchase put and call options on such futures contracts. For example, a Fund may use foreign currency futures contracts when it anticipates a general weakening of the foreign currency exchange rate that could adversely affect the market values of the Fund's foreign securities holdings. In this case, the sale of futures contracts on the underlying currency may reduce the risk of the Fund of a reduction in market value caused by foreign currency variations and, by so doing, provide an alternative to the liquidation of securities positions in the Fund and resulting transaction costs. When the Fund anticipates a significant foreign exchange rate increase while intending to invest in a non-U.S. security, the Fund may purchase a foreign currency futures contract to hedge against a rise in foreign exchange rates pending completion of the anticipated transaction. Such a purchase of a futures contract would serve as a temporary measure to protect the Fund against any rise in the foreign exchange rate that may add additional costs to acquiring the non-U.S. security position. The Fund similarly may use futures contracts on equity and debt securities to hedge against fluctuations in the value of securities it owns or expects to acquire. These Funds also may purchase call or put options on foreign currency futures contracts to obtain a fixed foreign exchange rate at limited risk. A Fund may purchase a call option on a foreign currency futures contract to hedge against a rise in the foreign exchange rate while intending to invest in a non-U.S. security of the same currency. A Fund may purchase put options on foreign currency futures contracts to hedge against a decline in the foreign exchange rate or the value of its non-U.S. portfolio securities. A Fund may write a call option on a foreign currency futures contract as a partial hedge against the effects of declining foreign exchange rates on the value of non-U.S. securities and in circumstances in which the Fund anticipates that the foreign exchange rate will not increase above the exercise price of the option by an amount greater than the premium received (less transaction costs incurred by the Fund). This strategy will limit potential capital appreciation in the underlying currency. To the extent that a Fund enters into futures contracts, options on futures contracts and options on foreign currencies that are traded on an exchange regulated by the CFTC, in each case that are not for BONA FIDE hedging purposes (as defined by the CFTC), the aggregate initial margin and premiums required to establish those positions may not exceed 5% of the liquidation value of the Fund's portfolio, after taking into account the unrealized profits and unrealized losses on any such contracts the Fund has entered into. However, the "in-the-money" amount of such options may be excluded in computing the 5% limit. Adoption of this guideline will not limit the percentage of the Fund's assets at risk to 5%. Although any one Fund may not employ all or any of the foregoing strategies, its use of options, futures and options thereon and forward currency contracts (as described under "Currency Transactions") would involve certain investment risks and transaction costs to which it might not be subject were such strategies not employed. Such risks include: (1) dependence on a Fund's ability to predict movements in the prices of individual securities, fluctuations in the general securities markets or market sections and movements in interest rates and currency markets; (2) imperfect correlation between movements in the price of the securities or currencies hedged or used for cover; (3) the fact that skills and techniques needed to trade options, futures contracts and options thereon or to use forward currency contracts are different from those needed to select the securities in which a Fund invests; (4) lack of assurance that a liquid secondary market will exist for any particular option, futures contract, option thereon or forward contract at any particular time, which may affect a Fund's ability to establish or close out a position; (5) possible impediments to effective portfolio management or the ability to meet current obligations caused by the segregation of a large percentage of a Fund's assets to cover its obligations; and (6) the possible need to defer closing out certain options, futures contracts, options thereon and forward contracts in order to continue to qualify for the beneficial tax treatment afforded "regulated investment companies" under the Code. In the event that the anticipated change in the price of the securities or currencies that are the subject of such a strategy does not occur, it may be that a Fund would have been in a better position had it not used such a strategy at all. 26 HARTFORD MUTUAL FUNDS - -------------------------------------------------------------------------------- NON-U.S. SECURITIES, INCLUDING ADRS AND GDRS Each Fund, except the Mortgage Securities Fund and the U.S. Government Money Market Fund, is permitted to invest a portion of its assets in non-U.S. securities, including, in the case of permitted equity investments, ADRs and GDRs, as described under each Fund's investment objective and policies. ADRs are certificates issued by a U.S. bank or trust company and represent the right to receive securities of a non-U.S. issuer deposited in a domestic bank or non-U.S. branch of a U.S. bank. ADRs are traded on a U.S. securities exchange, or in an over-the-counter market, and are denominated in U.S. dollars. GDRs are certificates issued globally and evidence a similar ownership arrangement. GDRs are traded on non-U.S. securities exchanges and are denominated in non-U.S. currencies. The value of an ADR or a GDR will fluctuate with the value of the underlying security, will reflect any changes in exchange rates and otherwise will involve risks associated with investing in non-U.S. securities. The International Opportunities Fund and the International Advisers Fund are permitted to invest in Brady Bonds, which are debt securities issued under the framework of the Brady Plan, an initiative announced by former U.S. Treasury Secretary Nicholas F. Brady in 1989 as a mechanism for debtor nations to restructure their outstanding external commercial bank debt. In restructuring its external debt under the Brady Plan framework, a debtor nation negotiates with its existing bank lenders as well as multilateral institutions such as the World Bank and the IMF. The Brady Plan framework, as it has developed, contemplates the exchange of commercial bank debt for newly issued bonds ("Brady Bonds"). Brady Bonds may also be issued in respect of new money being advanced by existing lenders in connection with debt restructuring. Agreements implemented under the Brady Plan to date are designed to achieve debt and debt-service reduction through specific options negotiated by a debtor nation with its creditors. As a result, the financial packages offered by each country differ. Brady Bonds issued to date may be purchased and sold in the secondary markets through U.S. securities dealers and other financial institutions and are generally maintained through European securities depositories. See also "High Yield Securities." Investing in securities issued by non-U.S. companies involves considerations and potential risks not typically associated with investing in obligations issued by U.S. companies. Less information may be available about non-U.S. companies than about U.S. companies and non-U.S. companies generally are not subject to uniform accounting, auditing and financial reporting standards or to other regulatory practices and requirements comparable to those applicable to U.S. companies. The values of non-U.S. investments are affected by changes in currency rates or exchange control regulations, restrictions or prohibition on the repatriation of non-U.S. currencies, application of non-U.S. tax laws, including withholding taxes, changes in governmental administration or economic or monetary policy (in the U.S. or outside the U.S.) or changed circumstances in dealings between nations. Costs are also incurred in connection with conversions between various currencies. Investing in non-U.S. sovereign debt will expose a Fund to the direct or indirect consequences of political, social or economic changes in the developing and emerging countries that issue the securities. The ability and willingness of sovereign obligors in developing and emerging countries or the governmental authorities that control repayment of their external debt to pay principal and interest on such debt when due may depend on general economic and political conditions within the relevant country. Countries such as those in which the Funds may invest have historically experienced, and may continue to experience, high rates of inflation, high interest rates, exchange rate trade difficulties and unemployment. Some of these countries are also characterized by political uncertainty or instability. Additional factors which may influence the ability or willingness to service debt include, but are not limited to, a country's cash flow situation, the availability of sufficient foreign exchange on the date a payment is due, the relative size of its debt service burden to the economy as a whole, and its government's policy towards the IMF, the World Bank and other international agencies. MORTGAGE-RELATED SECURITIES The mortgage-related securities in which the International Opportunities Fund, International Advisers Fund, Advisers Fund and Bond Fund may invest, and the Mortgage Securities Fund principally invests, provide funds for mortgage loans made to residential home buyers. These include securities which represent interests in pools of mortgage loans made by lenders such as savings and loan institutions, mortgage bankers, commercial banks and others. Pools of mortgage loans are assembled for sale to investors (such as the Funds) by various governmental, government-related and private organizations. These Funds may also invest in similar mortgage-related securities which provide funds for multi-family residences or commercial real estate properties. CMOs will also be considered mortgage-related securities. Interests in pools of mortgage-related securities differ from other forms of debt securities, which normally provide for periodic payment of interest in fixed amounts with principal payments at maturity or specified call dates. Instead, these securities provide a monthly payment which consists of both interest and principal payments. In effect, these payments are a "pass-through" of the monthly payments made by the individual borrowers on their mortgage loans, HARTFORD MUTUAL FUNDS 27 - -------------------------------------------------------------------------------- net of any fees paid to the issuer, servicer, insurer or guarantor of such securities. Additional payments are caused by repayments of principal resulting from the sale of the underlying property, refinancing or foreclosure, net of fees or costs which may be incurred. Some mortgage-related securities (such as GNMA securities) are described as "modified pass-through." These securities entitle the holder to receive all interest and principal payments owed on the mortgage pool, net of certain fees, regardless of whether or not the mortgagor actually makes the payment. The principal governmental (i.e., backed by the full faith and credit of the U.S. Government) guarantor of mortgage-related securities is the GNMA. GNMA is a wholly-owned United States Government corporation within the Department of Housing and Urban Development. GNMA is authorized to guarantee, with the full faith and credit of the U.S. Government, the timely payment of principal and interest on securities known as Ginnie Maes issued by institutions approved by GNMA (such as savings and loan institutions, commercial banks and mortgage bankers) and backed by pools of FHA-insured or VA-guaranteed mortgages. Government-related (i.e., not backed by the full faith and credit of the U.S. Government) guarantors include the FNMA and the FHLMC. FNMA is a government-sponsored corporation owned entirely by private stockholders. It is subject to general regulation by the Secretary of Housing and Urban Development. FNMA purchases residential mortgages from a list of approved seller/servicers which include state and federally-chartered savings and loan associations, mutual savings banks, commercial banks and credit unions and mortgage bankers. Pass-through securities known as Fannie Maes issued by FNMA are guaranteed as to timely payment of principal and interest by FNMA but are not backed by the full faith and credit of the U.S. Government. FHLMC is a corporate instrumentality of the U.S. Government created by Congress in 1970 for the purpose of increasing the availability of mortgage credit for residential housing. Its stock is owned by the twelve Federal Home Loan Banks. FHLMC issues Participation Certificates ("PCs") known as Freddy Macs which represent interests in mortgages from portfolios created by FHLMC. FHLMC guarantees the timely payment of interest and ultimate collection of principal but PCs are not backed by the full faith and credit of the United States Government. Commercial banks, savings and loan institutions, private mortgage insurance companies, investment banks, mortgage bankers and other secondary market issuers also create pass-through pools of conventional residential mortgage loans. Such issuers may in addition be the originators of the underlying mortgage loans as well as the guarantors of the mortgage-related securities. Pools created by such non-governmental issuers generally offer a higher rate of interest than government and government-related pools because there are no direct or indirect government guarantees of payments in the former pools. However, timely payment of interest and principal in these pools is supported by various forms of insurance or guarantees, including individual loan, title, pool and hazard insurance. The insurance and guarantees are issued by government entities, private insurers and the mortgage poolers. Such insurance and guarantees and the credit worthiness of the issuers thereof will be considered in determining whether a mortgage-related security meets a Fund's investment quality standards. There can be no assurance that the private insurers can meet their obligations under the policies. These Funds may buy mortgage-related securities without insurance or guarantees if through an examination of the loan experience and practices of the poolers the Adviser or Sub-Adviser determines that the securities meet the Fund's quality standards. Although the market for such securities is becoming increasingly liquid, securities issued by certain private organizations may not be readily marketable. These Funds may invest in CMOs, which are securities collateralized by mortgages or mortgage-backed securities. CMOs are issued with a variety of classes or series, which have different maturities. These Funds expect that governmental, government-related or private entities may create mortgage loan pools offering pass-through investments in addition to those described above. The mortgages underlying these securities may be alternative mortgage instruments, that is, mortgage instruments whose principal or interest payments may vary or whose terms to maturity may differ from customary long-term fixed rate mortgages. These Funds may invest in stripped mortgage-backed securities, which security is separated into the interest and principal component of a mortgage backed security and are sold as separate securities. As new types of mortgage-related securities are developed and offered to investors, the Adviser or Sub-Adviser will, consistent with a Fund's investment objective, policies and quality standards, consider making investments in such new types of securities. ASSET-BACKED SECURITIES The International Opportunities Fund, the International Advisers Fund, the Advisers Fund, the Bond Fund, the Mortgage Securities Fund, and the Money Market Fund may invest in asset-backed securities. The securitization techniques used for asset-backed securities are similar to those used for mortgage-related securities. The collateral for these securities has included home equity loans, automobile and credit card receivables, boat loans, computer leases, airplane leases, mobile home loans, recreational vehicle loans and hospital account receivables. These Funds may invest in these and other types of asset-backed securities that may be developed in the future. 28 HARTFORD MUTUAL FUNDS - -------------------------------------------------------------------------------- SWAP AGREEMENTS Each Fund, except the Index Fund, the U.S. Government Money Market Fund and the Money Market Fund, may enter into interest rate swaps, currency swaps, and other types of swap agreements such as caps, collars, and floors. In a typical interest rate swap, one party agrees to make regular payments equal to a floating interest rate multiplied by a "notional principal amount," in return for payments equal to a fixed rate multiplied by the same amount, for a specified period of time. If a swap agreement provides for payments in different currencies, the parties might agree to exchange the notional principal amount as well. Swaps may also depend on other prices or rates, such as the value of an index or mortgage prepayment rates. In a typical cap or floor agreement, one party agrees to make payments only under specified circumstances, usually in return for payment of a fee by the other party. For example, the buyer of an interest rate cap obtains the right to receive payments to the extent that a specified interest rate exceeds an agreed-upon level, while the seller of an interest rate floor is obligated to make payments to the extent that a specified interest rate falls below an agreed-upon level. An interest rate collar combines elements of buying a cap and selling a floor. Swap agreements will tend to shift a Fund's investment exposure from one type of investment to another. For example, if a Fund agreed to exchange floating rate payments for fixed rate payments, the swap agreement would tend to decrease the Fund's exposure to rising interest rates. Caps and floors have an effect similar to buying or writing options. Depending on how they are used, swap agreements may increase or decrease the overall volatility of a Fund's investments and its share price and yield. MONEY MARKET INSTRUMENTS The Funds may invest in high quality money market instruments, including, but not limited to: (1) securities issued or guaranteed by governments, their agencies or instrumentalities; (2) commercial paper; (3) certificates of deposit; (4) bankers' acceptances and other bank obligations; and (5) repurchase agreements involving any of the foregoing. The U.S. Government Money Market Fund may only invest in high quality money market instruments, issued or guaranteed by the U.S. Government, its agencies or instrumentalities. INVESTMENT GRADE SECURITIES The U.S. Government Money Market Fund and the Money Market Fund are permitted to invest only in high-quality short-term instruments as defined by Rule 2a-7 under the 1940 Act. Each of the other Funds is permitted to invest in investment grade securities (i.e., rated as low as "Baa" by Moody's and as low as "BBB" by S&P, and unrated securities of comparable quality as determined by the Adviser or Sub-Adviser). Debt securities carrying the fourth highest rating (i.e., "Baa" by Moody's and "BBB" by S&P, and unrated securities of comparable quality as determined by the Adviser or Sub-Adviser) are viewed to have adequate capacity for payment of principal and interest, but do involve a higher degree of risk than that associated with investments in debt securities in the higher rating categories and such bonds lack outstanding investment characteristics and do have speculative characteristics. HIGH YIELD SECURITIES To the extent described in their investment policies, the Capital Appreciation Fund, the International Opportunities Fund and the International Advisers Fund are permitted to invest in high yield securities, commonly known as "junk bonds" (i.e., rated as low as "C" by Moody's and by S&P, and unrated securities of comparable quality as determined by the Sub-Adviser). Securities in the rating categories below Baa as determined by Moody's and BBB as determined by S&P are considered to be of poor standing and predominantly speculative. The rating services' descriptions of securities in the lower rating categories, including their speculative characteristics, are set forth in the Appendix to this Prospectus. These securities are considered to have extremely poor prospects of ever attaining any real investment standing, to have a current identifiable vulnerability to default, to be unlikely to have the capacity to pay interest and repay principal when due in the event of adverse business, financial or economic conditions, and/or to be in default or not current in the payment of interest or principal. These securities are considered speculative with respect to the issuer's capacity to pay interest and repay principal in accordance with the terms of the obligations. Accordingly, it is possible that these types of factors could, in certain instances, reduce the value of securities held by a Fund with a commensurate effect on the value of the Fund's shares. OTHER RISK FACTORS As mutual funds that primarily invest in equity and/or debt securities, each Fund is subject to market risk, i.e., the possibility that equity and/or debt prices in general will decline over short or even extended periods of time. The financial markets tend to be cyclical, with periods when security prices generally rise and periods when security prices generally decline. The value of the debt securities in which the Funds invest will tend to increase when interest rates are falling and to decrease when interest rates are rising. No Fund should be considered to be a complete investment program in and of itself. Each prospective purchaser HARTFORD MUTUAL FUNDS 29 - -------------------------------------------------------------------------------- should take into account his or her own investment objectives as well as his or her other investments when considering the purchase of shares of any investment company. There can be no assurance that the investment objectives of the Funds will be met. In addition, the risk inherent in investing in the Funds is common to any security -- the net asset value will fluctuate in response to changes in economic conditions, interest rates and the market's perception of the underlying portfolio securities of each Fund. HIMCO, as Adviser to certain Funds, and WMC, as Sub-Adviser to certain Funds, attempt, in pursuit of a Fund's investment objective, to select appropriate individual securities for inclusion in a Fund's portfolio. In addition, HIMCO and WMC attempt to successfully forecast market trends and increase investments in the types of securities best suited to take advantage of such trends. Thus, the investor is dependent on HIMCO's and WMC's success not only in selecting individual securities, but also in identifying attractive asset classes to determine the total mix of invested assets. MANAGEMENT OF THE FUNDS Each Fund's Board of Directors manages the business and affairs of that Fund and takes action on all matters not reserved for the shareholders, including the annual election of officers of the Fund who carry out all orders and resolutions of the Board of Directors and carry out functions relating to the day to day management of the affairs of the Fund. INVESTMENT ADVISORY AND MANAGEMENT SERVICES HIMCO serves as investment adviser or manager to each Fund pursuant to written agreements entered into between HIMCO and each Fund. HIMCO serves as investment adviser to the Bond Fund, Money Market Fund, U.S. Government Money Market Fund, Mortgage Securities Fund and the Index Fund and investment manager to the Capital Appreciation Fund, Dividend and Growth Fund, International Opportunities Fund, Stock Fund, Advisers Fund and International Advisers Fund. For 1995, the advisory and management fees for the Funds were as follows: Advisers Fund, $16,044,763; Capital Appreciation Fund, $7,715,873; Bond Fund, $906,000; Dividend and Growth Fund, $757,373; Index Fund, $447,326; International Opportunities Fund, $3,213,660; International Advisers Fund $0; Money Market Fund, $762,534; Mortgage Securities Fund, $790,058; Stock Fund, $4,134,925; and U.S. Government Money Market Fund, $24,282. Under the terms of the Investment Advisory Agreements, HIMCO has responsibility for the investment decisions with respect to the assets of the Bond Fund, the Money Market Fund, the U.S. Government Money Market Fund, the Mortgage Securities Fund and the Index Fund. HIMCO continuously provides the Funds' Board of Directors with an investment program for its consideration and, upon approval of the program by the Board, HIMCO implements the same by placing orders for the purchase or sale of securities. The investment advisory fee for the Money Market Fund, the U.S. Government Money Market Fund and the Mortgage Securities Fund is .25% annually of the value of the average daily net assets of each Fund. The investment advisory fee for the Index Fund is .20% annually of the value of the average daily net assets of the Fund. The investment advisory fee for the Bond Fund is: .325% annually of the value of the average daily net assets of the Fund up to $250,000,000; .30% annually of the value of the next $250,000,000 of the average daily net assets of the Fund; .275% annually of the value of the next $500,000,000 of the average daily net assets of the Fund; .25% annually of the value of the average daily net assets of the Fund in excess of $1,000,000,000. Under the terms of the Investment Management Agreements, HIMCO, subject to the supervision of the Funds' Board of Directors, provides investment management supervision to the Stock Fund, the Advisers Fund, the Capital Appreciation Fund, the International Opportunities Fund, the Dividend and Growth Fund and the International Advisers Fund in accordance with the Funds' investment objectives, policies and restrictions. HIMCO's responsibilities include: (1) Engaging, subject to consultation with the Funds' Board of Directors, the services of one or more firms to serve as investment sub-adviser to the Funds; (2) Reviewing from time to time the investment policies and restrictions of the Funds in light of the Funds' performance and otherwise and, after consultation with the investment sub-adviser, recommending any appropriate changes to the Funds' Board of Directors; (3) Supervising the investment program prepared for the Funds by the investment sub-adviser; (4) Monitoring on a continuing basis the performance of the Funds' portfolio securities; (5) Arranging for the provision of such economic and statistical data as HIMCO shall determine or as may be requested by the Funds' Board of Directors; (6) Providing the Funds' Board of Directors with such information concerning important economic and political developments as HIMCO shall deem 30 HARTFORD MUTUAL FUNDS - -------------------------------------------------------------------------------- appropriate or as shall be requested by the Funds' Board of Directors. For services rendered to the Funds, HIMCO charges a monthly fee based on the following annual rates as applied to the average of the calculated daily net asset value of the Funds. Advisers Fund, Capital Appreciation Fund, Dividend and Growth Fund, International Advisers Fund and International Opportunities Fund: .575% annually of the value of the average daily net assets of the Fund up to $250,000,000; .525% annually of the next $250,000,000 of the value of the average daily net assets of the Fund; .475% annually of the next $500,000,000 of the value of the average daily net assets of the Fund; .425% annually of the value of the average daily net assets of the Fund in excess of $1,000,000,000. Stock Fund: .325% annually of the value of the average daily net assets of the Fund up to $250,000,000; .300% annually of the value of the next $250,000,000 of the average daily net assets of the Fund; .275% annually of the next $500,000,000 of the value of the average daily net assets of the Fund; .250% annually of the value of the average daily net assets of the Fund in excess of $1,000,000,000. HIMCO, Hartford Plaza, Hartford, Connecticut 06115, is a wholly-owned subsidiary of Hartford Life Insurance Company ("HL") and was organized under the laws of the State of Connecticut in 1981. HIMCO also serves as investment adviser to several other HL-sponsored funds which are also registered with the SEC. HL is ultimately owned by Hartford Fire Insurance Company, one of the largest multiple lines insurance carriers in the United States. Hartford Fire Insurance Company is a subsidiary of ITT Hartford Group, Inc. Certain officers of the Funds are also officers and/or directors of HIMCO; Joseph H. Gareau is a Director and the President of HIMCO; Andrew W. Kohnke is a Managing Director and a Director of HIMCO; J. Richard Garrett is the Treasurer of HIMCO; and Charles M. O'Halloran is a Director, Secretary and General Counsel of HIMCO. INVESTMENT SUB-ADVISORY SERVICES WMC serves as sub-adviser to the Capital Appreciation Fund, Dividend and Growth Fund, International Opportunities Fund, Stock Fund, Advisers Fund and International Advisers Fund pursuant to written contracts entered into between HIMCO and WMC. In connection with its service as sub-adviser to these Funds, WMC makes all determinations with respect to the purchase and sale of portfolio securities (subject to the terms and conditions of the investment objectives, policies and restrictions of these Funds and to the general supervision of the Company's Board of Directors and HIMCO) and places, in the name of the Funds, all orders for execution of these Funds' portfolio transactions. In conjunction with such activities, WMC regularly furnishes reports to the Company's Board of Directors concerning economic forecasts, investment strategy, portfolio activity and performance of the Funds. Under the terms of the Investment Sub-Advisory Agreements, WMC provides an investment program to HIMCO for use by HIMCO in rendering services to these Funds. WMC makes all determinations with respect to the purchase and sale of portfolio securities (subject to the terms and conditions of the investment objectives, policies and restrictions of these Funds and to the supervision of the Funds' Board of Directors and HIMCO) and places, in the name of the Funds, all orders for execution of these Funds' portfolio transactions. In conjunction with such activities, WMC regularly furnishes reports to these Funds' Board of Directors concerning economic forecasts, investment strategy, portfolio activity and performance of the Funds. For services rendered to these Funds, WMC charges a quarterly fee to HIMCO. The Funds will not pay WMC's fee nor any part thereof, nor will the Funds have any obligation or responsibility to do so. WMC's quarterly fee is based upon the following annual rates as applied to the average of the calculated daily net asset value of each Fund. Advisers Fund, Stock Fund and Dividend and Growth Fund: .325% annually of the value of the average daily net assets of the Fund up to $50,000,000; .25% annually of the next $100,000,000 of the value of the average daily net assets of the Fund; .20% annually of the next $350,000,000 of the value of the average daily net assets of the Fund; .15% annually of the value of the average daily net assets of the Fund in excess of $500,000,000. Capital Appreciation Fund, International Opportunities Fund, and International Advisers Fund: .40% annually of the value of the average daily net assets of the Fund up to $50,000,000; .30% annually of the next $100,000,000 of the value of the average daily net assets of the Fund; HARTFORD MUTUAL FUNDS 31 - -------------------------------------------------------------------------------- .25% annually of the next $350,000,000 of the value of the average daily net assets of the Fund; .20% annually of the value of the average daily net assets of the Fund in excess of $500,000,000. WMC is a professional investment counseling firm which provides investment services to investment companies, employee benefit plans, endowments, foundations, and other institutions and individuals. As of December 31, 1995, WMC held discretionary management authority with respect to approximately $109 billion of client assets. WMC and its predecessor organizations have provided investment advisory services to investment companies since 1933 and to investment counseling clients since 1960. WMC, 75 State Street, Boston, MA 02109, is a Massachusetts general partnership, of which the following persons are managing partners: Robert W. Doran, Duncan M. McFarland, and John R. Ryan. PORTFOLIO MANAGERS Saul J. Pannell, Senior Vice President of WMC, serves as portfolio manager to the Capital Appreciation Fund. Mr. Pannell has been a portfolio manager with WMC since 1979. Laurie A. Gabriel, CFA and Senior Vice President of WMC, serves as portfolio manager to the Dividend and Growth Fund. Ms. Gabriel joined WMC in 1976. She has been a quantitative research analyst with WMC since 1986, and took on portfolio management responsibilities in 1987. The International Opportunities Fund is managed by WMC's Global Equity Strategy Group, headed by Trond Skramstad, Senior Vice President of WMC. The Global Equity Strategy Group is comprised of global portfolio managers and senior investment professionals. No person or persons is primarily responsible for making recommendations to or within the Global Equity Strategy Group. Prior to joining WMC in 1993, Mr. Skramstad was a global equity portfolio manager at Scudder, Stevens & Clark since 1990. Rand L. Alexander, Senior Vice President of WMC, serves as portfolio manager to the Stock Fund. Mr. Alexander has been a portfolio manager with WMC since 1990. Paul D. Kaplan, Senior Vice President of WMC, serves as portfolio manager to the Advisers Fund. Mr. Kaplan manages the fixed income component of the Advisers Fund. He has been a portfolio manager with WMC since 1982. Rand L. Alexander, who is portfolio manager to the Stock Fund, manages the equity component of the Advisers Fund. The equity component of the International Advisers Fund is managed by WMC's Global Equity Strategy Group, headed by Trond Skramstad. The debt component of the International Advisers Fund is managed by Robert Evans, Vice President of WMC. Prior to joining WMC as a portfolio manager in 1995, Mr. Evans was a Senior Global Fixed Income Portfolio Manager with Pacific Investment Management Company from 1991 through 1994, and in the Global Fixed Income Department of Lehman Brothers International in London, England and New York City, New York from 1985 through 1990. The Bond Fund is managed by Alison D. Granger. Ms. Granger, a Senior Vice President of HIMCO and Assistant Vice President of Hartford Life Insurance Company, joined ITT Hartford in 1993 as a senior corporate bond trader. She became Director of Trading in 1994 and a portfolio manager in 1995. Prior to joining ITT Hartford, Ms. Granger was a corporate bond portfolio manager at The Home Insurance Company and Axe-Houghton Management. The Mortgage Securities Fund is managed by Timothy J. Wilhide. Mr. Wilhide is a Portfolio Manager and Vice President of HIMCO. He has 17 years of experience in the fixed income markets. Prior to joining ITT Hartford in June 1994, Mr. Wilhide was vice president and fixed income manager for J.P. Morgan & Co. He received his B.A. from Gannon University and his MBA from the University of Delaware. ADMINISTRATIVE SERVICES FOR THE FUNDS An Administrative Services Agreement between each Fund and HL provides that HL will manage the business affairs and provide administrative services to each Fund. Under the terms of these Agreements, HL will provide the following: administrative personnel, services, equipment and facilities and office space for proper operation of the Funds. HL has also agreed to arrange for the provision of additional services necessary for the proper operation of the Funds, although the Funds pay for these services directly. See "Expenses of the Funds." As compensation for the services to be performed by HL, each Fund pays to HL, as promptly as possible after the last day of each month, a monthly fee equal to the annual rate of .175% of the average daily net assets of the Fund. EXPENSES OF THE FUNDS Each Fund shall assume and pay the following costs and expenses: interest; taxes; brokerage charges (which may be to affiliated broker-dealers); costs of preparing, printing and filing any amendments or supplements to the registration forms of each Fund and its securities; all federal and 32 HARTFORD MUTUAL FUNDS - -------------------------------------------------------------------------------- state registration, qualification and filing costs and fees, (except the initial costs and fees, which will be borne by HL), issuance and redemption expenses, transfer agency and dividend and distribution disbursing agency costs and expenses; custodian fees and expenses; accounting, auditing and legal expenses; fidelity bond and other insurance premiums; fees and salaries of directors, officers and employees of each Fund other than those who are also officers of HL; industry membership dues; all annual and semiannual reports and prospectuses mailed to each Fund's shareholders as well as all quarterly, annual and any other periodic report required to be filed with the SEC or with any state; any notices required by a federal or state regulatory authority, and any proxy solicitation materials directed to each Fund's shareholders as well as all printing, mailing and tabulation costs incurred in connection therewith, and any expenses incurred in connection with the holding of meetings of each Fund's shareholders and other miscellaneous expenses related directly to the Funds' operations and interest. The total expenses of each Fund including administrative and investment advisory fees for 1995 as a percentage of the Funds' average net assets were as follows: Stock Fund, .48%; Bond Fund, .53%; Money Market Fund, .45%; U.S. Government Money Market Fund, .57%; Advisers Fund, .66%; Capital Appreciation Fund, .68%; Mortgage Securities Fund, .68%; Index Fund .39%; International Opportunities Fund, .86%; Dividend and Growth Fund, .77%; International Advisers Fund, .65%. PERFORMANCE RELATED INFORMATION The Funds may advertise certain performance related information. Performance information about a Fund is based on the Fund's past performance only and is no indication of future performance. Each Fund may include its total return in advertisements or other sales material. When a Fund advertises its total return, it will usually be calculated for one year, five years, and ten years or some other relevant periods if the Fund has not been in existence for at least ten years. Total return is measured by comparing the value of an investment in the Fund at the beginning of the relevant period to the value of the investment at the end of the period (assuming immediate reinvestment of any dividends or capital gains distributions). The U.S. Government Money Market Fund and the Money Market Fund may advertise yield and effective yield. The yield of each of those Funds is based upon the income earned by the Fund over a seven-day period and then annualized, i.e. the income earned in the period is assumed to be earned every seven days over a 52-week period and stated as a percentage of the investment. Effective yield is calculated similarly but when annualized, the income earned by the investment is assumed to be reinvested in Fund shares and thus compounded in the course of a 52-week period. DIVIDENDS The shareholders of each Fund shall be entitled to receive such dividends as may be declared by each Fund's Board of Directors, from time to time based upon the investment performance of the assets making up that Fund's portfolio. The policy with respect to each Fund, except the U.S. Government Money Market Fund and the Money Market Fund, is to pay dividends from net investment income monthly and to make distributions of realized capital gains, if any, once each year. The U.S. Government Money Market Fund and the Money Market Fund declare dividends on a daily basis and pay them monthly. Such dividends and distributions will be automatically invested in additional full or fractional shares monthly on the last business day of each month at the per share net asset value on that date. Provision is also made to pay such dividends and distributions in cash if requested. Such dividends and distributions will be in cash or in full or fractional shares of the Fund at net asset value. NET ASSET VALUE The net asset value of each Fund's shares will be determined as of the close of business (currently 4:00 P.M. Eastern Time) on each day the NYSE is open for trading. Orders for the purchase of a Fund's shares received prior to the close of the NYSE on any day on which the Fund is open for business will be priced at the per-share net asset value determined as of the close of the NYSE. Orders received after the close of the NYSE or on a day on which the NYSE or a Fund are not open for business will be priced at the per-share net asset value next determined. The per-share net asset value of the shares each Fund will be determined by dividing the value of the Fund's assets, less the liabilities, by the number of outstanding shares issued by the Fund. Equity securities are valued at the last sales price as of the time when the valuation is being made. If no sales took place on such day and in the case of certain equity securities traded over-the-counter, then such securities are valued at the mean between the bid and the asked prices. Debt securities (other than short-term obligations) including mortgage-backed securities, are valued on the basis of valuations furnished by an unaffiliated pricing service which determines valuations for normal institutional size trading units of debt securities. Short-term investments with a HARTFORD MUTUAL FUNDS 33 - -------------------------------------------------------------------------------- maturity of 60 days or less when purchased are valued at cost plus interest earned (amortized cost), which approximates market value. Short-term investments with a maturity of more than 60 days when purchased are valued based on market quotations until the remaining days to maturity become less than 61 days. From such time, until maturity, the investments are valued at amortized cost using the value of the investment on the 61st day. Options are valued at the last sales price; if no sale took place on such day, then options are valued at the mean between the bid and asked prices. Assets for which market quotations are not readily available are valued at fair value as determined in good faith by or under the direction of a Fund's Board of Directors. PURCHASE OF FUND SHARES Fund shares are made available to serve as the underlying investment vehicles for variable annuity and variable life insurance separate accounts of ITT Hartford Life Insurance Companies. Shares of the Funds are sold on a no-load basis at their net asset values. See "Net Asset Value" and "Sale and Redemption of Shares." It is conceivable that in the future it may be disadvantageous for variable annuity separate accounts and variable life insurance separate accounts to invest in the Funds simultaneously. Although ITT Hartford Life Insurance Companies and the Funds do not currently foresee any such disadvantages either to variable annuity contract owners or variable life insurance policy owners, each Fund's Board of Directors intends to monitor events in order to identify any material conflicts between such contract owners and policy owners and to determine what action, if any, should be taken in response thereto. If the Board of Directors of a Fund were to conclude that separate funds should be established for variable life and variable annuity separate accounts, the variable life and variable annuity contract holders would not bear any expenses attendant to the establishment of such separate funds. SALE AND REDEMPTION OF SHARES The shares of each Fund are sold and redeemed by the Fund at their net asset value next determined after receipt of a purchase or redemption order in good order in writing at its home office, P.O. Box 2999, Hartford, CT 06104-2999. Hartford Equity Sales Company, Inc., Hartford, Connecticut, is the Fund's principal underwriter. The value of shares redeemed may be more or less than original cost, depending upon the market value of the portfolio securities at the time of redemption. Payment for shares redeemed will be made within seven days after the redemption request is received in proper form by the Funds. However, the right to redeem Fund shares may be suspended or payment therefor postponed for any period during which: (1) trading on the NYSE is closed for other than weekends and holidays; (2) an emergency exists, as determined by the SEC, as a result of which (a) disposal by a Fund of securities owned by it is not reasonably practicable, or (b) it is not reasonably practicable for a Fund to determine fairly the value of its net assets; or (3) the SEC by order so permits for the protection of stockholders of the Funds. FEDERAL INCOME TAXES Each Fund has elected and intends to qualify under Part I of Subchapter M of the Code. Each Fund intends to distribute all of its net income and gains to shareholders. Such distributions are taxable income and capital gains. Each Fund will inform shareholders of the amount and nature of such income and gains. Each Fund may be subject to a 4% nondeductible excise tax as well as an income tax measured with respect to certain undistributed amounts of income and capital gain. Each Fund expects to make such additional distributions of net investment income as are necessary to avoid the application of these taxes. For a discussion of the tax implications of a purchase or sale of the Funds' shares by the insurer, reference should be made to the section entitled "Federal Tax Considerations" in the appropriate separate account prospectus. If eligible, each Fund may make an election to pass through to its shareholders, ITT Hartford Life Insurance Companies, a credit for any foreign taxes paid during the year. If such election is made, the pass-through of the foreign tax credit will result in additional taxable income and income tax to ITT Hartford Life Insurance Companies. The amount of additional tax may be more than offset by the foreign tax credits which are passed through. These foreign tax credits may provide a benefit to ITT Hartford Life Insurance Companies. OWNERSHIP AND CAPITALIZATION OF THE FUNDS CAPITAL STOCK As of the date of this prospectus, the authorized capital stock of the Funds consisted of the following shares of a par value of $.10 per share: Advisers Fund, 3 billion; Capital Appreciation Fund, 800 million; Bond Fund, 800 million; Dividend and Growth Fund, 750 million; Index Fund, 400 million; International Opportunities Fund, 34 HARTFORD MUTUAL FUNDS - -------------------------------------------------------------------------------- 1500 million; Money Market Fund, 800 million; Mortgage Securities Fund, 800 million; Stock Fund, 800 million; U.S. Government Money Market Fund, 100 million; International Advisers Fund, 750 million. As of December 31, 1995, Hartford Life Insurance Company owned 10,000,000 shares (35.5%) of the International Advisers Fund. At December 31, 1995, certain HL group pension contracts held direct interests in shares of the Funds as follows:
SHARES % ------------ --------- Hartford Advisers Fund, Inc................ 11,995,216 .55 Hartford Capital Appreciation Fund, Inc.... 9,760,293 1.58 Hartford Index Fund, Inc................... 12,029,208 7.67 Hartford International Opportunities Fund, Inc....................................... 5,692,699 1.07 Hartford Mortgage Securities Fund, Inc..... 15,512,929 5.07 Hartford Stock Fund, Inc................... 70,084 .01
VOTING Each shareholder shall be entitled to one vote for each share of the Funds held upon all matters submitted to the shareholders generally. With respect to the Funds' shares, issued as described above under "Purchase of Fund Shares," as well as Fund shares which are not otherwise attributable to variable annuity contract owners or variable life policyholders, the ITT Hartford Life Insurance Companies shall be the shareholders of record. Each of the ITT Hartford Life Insurance Companies will vote all Fund shares, pro rata, according to the written instructions of the contract owners of the variable annuity contracts and the policyholders of the variable life contracts issued by it using the Funds as investment vehicles. This position is consistent with the policy of the SEC Staff. OTHER RIGHTS Each share of Fund stock, when issued and paid for in accordance with the terms of the offering, will be fully paid and non-assessable. Shares of Fund stock have no pre-emptive, subscription or conversion rights and are redeemable as set forth under "Sale and Redemption of Shares." There are no shareholder pre-emptive rights. Upon liquidation of a Fund, the shareholders of that Fund shall be entitled to share, pro rata, in any assets of the Fund after discharge of all liabilities and payment of the expenses of liquidation. GENERAL INFORMATION REPORTS TO SHAREHOLDERS The Funds will issue unaudited semiannual reports showing current investments in each Fund and other information and annual financial statements examined by independent auditors for the Funds. CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENTS Chase Manhattan Bank, N.A., New York, New York, serves as custodian of the Funds' assets. Hartford Life Insurance Company, P.O. Box 2999, Hartford, Connecticut 06104-2999, serves as Transfer and Dividend Disbursing Agent for the Funds. "MAJORITY" DEFINED As used in this Prospectus, the term "majority of the Fund's outstanding shares" means the vote of: (1) 67% or more of each Fund's shares present at a meeting, if the holders of more than 50% of the outstanding shares of each Fund are present or represented by proxy, or (2) more than 50% of each Fund's outstanding shares, whichever is less. PENDING LEGAL PROCEEDINGS As of the date of this Prospectus, there are no pending legal proceedings involving the Funds or the Adviser or Sub-Adviser as a party. REQUESTS FOR INFORMATION This Prospectus does not contain all the information included in the Registration Statement filed with the SEC. The Registration Statement, including the exhibits filed therewith, may be examined at the SEC's office in Washington, D.C. Statements contained in the Prospectus as to the contents of any contract or other document referred to herein are not necessarily complete, and, in each instance, reference is made to the copy of such contract or other document filed as an exhibit to the Registration Statement of which this Prospectus forms a part, each such statement being qualified, in all respects by such reference. For additional information, write to "Hartford Family of Funds", c/o Individual Annuity Operations, P.O. Box 2999, Hartford, CT 06104-2999. HARTFORD MUTUAL FUNDS 35 - -------------------------------------------------------------------------------- APPENDIX The rating information which follows describes how the rating services mentioned presently rate the described securities. No reliance is made upon the rating firms as "experts" as that term is defined for securities purposes. Rather, reliance on this information is on the basis that such ratings have become generally accepted in the investment business. RATING OF BONDS Moody's Investors Service, Inc. ("Moody's") Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa -- Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long term risks appear somewhat larger than in Aaa securities. A -- Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future. Baa -- Bonds which are rated Baa are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Ba --- Bonds which are rated Ba are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. B -- Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest. Ca -- Bonds which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings. C -- Bonds which are rated C are the lowest rated class of bonds and issues so rated can be regarded as having extremely poor prospects of ever earning any real investment standing. Standard & Poor's Corporation ("Standard & Poor's"). AAA -- Bonds rated AAA are the highest grade obligations. Capacity to pay interest and repay principal is extremely strong. AA -- Bonds rated AA have a very strong capacity to pay interest and repay principal and differ from AAA issues only in small degree. A -- Bonds rated A have a very strong capacity to pay interest and repay principal although they are somewhat more susceptible to the considerable investment strength but are not entirely free from adverse effects of changes in circumstances and economic conditions than debt in the highest rated categories. BBB -- Bonds rated BBB and regarded as having an adequate capacity to pay interest and repay principal. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category then in higher rated categories. BB, B, CCC, CC, C -- Debt rated BB, B, CCC, CC, and C is regarded, on balance, as predominantly speculative with respect to the issuer's capacity to pay interest and repay principal in accordance with the terms of the obligation. While such debt will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions. 36 HARTFORD MUTUAL FUNDS - -------------------------------------------------------------------------------- RATING OF COMMERCIAL PAPER Purchases of corporate debt securities used for short-term investment, generally called commercial paper, will be limited to the top two grades of Moody's, Standard & Poor's, Duff & Phelps, Fitch Investor Services and Thomson Bank Watch or other NRSROs (nationally recognized statistical rating organizations) rating services and will be an eligible security under Rule 2a-7. MOODY'S Issuers rated Prime-1 (or related supporting institutions) have a superior capacity for repayment of short-term promissory obligations. Prime-1 repayment capacity will normally be evidenced by the following characteristics: - Leading market positions in well-established industries. - High rates of return on funds employed. - Conservative capitalization structures with moderate reliance on debt and ample asset protection. - Broad margins in earnings coverage of fixed financial charges and high internal cash generation. - Well-established access to a range of financial markets and assured sources of alternate liquidity. Issuers rated Prime-2 (or related supporting institutions) have a strong capacity for repayment of short-term promissory obligations. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, will be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained. Issuers rated Prime-3 (or related supporting institutions) have an acceptable capacity for repayment of short-term promissory obligations. The effect of industry characteristics and market composition may be more pronounced. Variability in earnings and profitability may result in changes in the level of debt protection measurements and the requirement for relatively high financial leverage. Adequate alternate liquidity is maintained. Issuers rated Not Prime do not fall within any of the Prime rating categories. STANDARD & POOR'S The relative strength or weakness of the following factors determines whether the issuer's commercial paper is rated A-1 or A-2. - Liquidity ratios are adequate to meet cash requirements. Liquidity ratios are basically as follows, broken down by the type of issuer: Industrial Company: acid test ratio, cash flow as a percent of current liabilities, short-term debt as a percent of current liabilities, short-term debt as a percent of current assets. Utility: current liabilities as a percent of revenues, cash flow as a percent of current liabilities, short-term debt as a percent of capitalization. Finance Company: current ratio, current liabilities as a percent of net receivables, current liabilities as a percent of total liabilities. - The long-term senior debt rating is "A" or better; in some instances "BBB" credits may be allowed if other factors outweigh the "BBB". - The issuer has access to at least two additional channels of borrowing. - Basic earnings and cash flow have an upward trend with allowances made for unusual circumstances. - Typically, the issuer's industry is well established and the issuer has a strong position within its industry. - The reliability and quality of management are unquestioned. PART B STATEMENT OF ADDITIONAL INFORMATION HARTFORD CAPITAL APPRECIATION FUND, INC. HARTFORD DIVIDEND AND GROWTH FUND, INC. HARTFORD INDEX FUND, INC. HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC. HARTFORD STOCK FUND, INC. HARTFORD ADVISERS FUND, INC. HARTFORD INTERNATIONAL ADVISERS FUND, INC. HARTFORD BOND FUND, INC. HARTFORD MORTGAGE SECURITIES FUND, INC. HVA MONEY MARKET FUND, INC. HARTFORD U.S. GOVERNMENT MONEY MARKET FUND, INC. P.O. Box 2999 Hartford, CT 06104-2999 This Statement of Additional Information is not a prospectus. The information contained herein should be read in conjunction with the prospectus. To obtain a prospectus send a written request to: "Hartford Family of Funds," c/o Individual Annuity Operations, P.O. Box 2999, Hartford, Connecticut 06104-2999. Date of Prospectus: May 1, 1996 Date of Statement of Additional Information: May 1, 1996 Form HV-1743-11 TABLE OF CONTENTS PAGE INVESTMENT OBJECTIVES OF THE FUNDS . . . . . . . . . . . . INVESTMENT RESTRICTIONS OF THE FUNDS . . . . . . . . . . . PORTFOLIO TURNOVER . . . . . . . . . . . . . . . . . . . . MANAGEMENT OF THE FUND . . . . . . . . . . . . . . . . . . CUSTODIAN AND TRANSFER AGENT . . . . . . . . . . . . . . . INDEPENDENT PUBLIC ACCOUNTANTS . . . . . . . . . . . . . . PORTFOLIO BROKERAGE. . . . . . . . . . . . . . . . . . . . DETERMINATION OF YIELD . . . . . . . . . . . . . . . . . . CALCULATION OF TOTAL RETURN . . . . . . . . .. . . .. . . . PERFORMANCE COMPARISONS. . . . . . . . . . . . . . . . . . FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . 2 INVESTMENT OBJECTIVES OF THE FUNDS HARTFORD CAPITAL APPRECIATION FUND, INC.: To achieve growth of capital by investing in securities selected solely on the basis of potential for capital appreciation; income, if any, is an incidental consideration. HARTFORD DIVIDEND AND GROWTH FUND, INC.: To achieve a high level of current income consistent with growth of capital and reasonable investment risk. HARTFORD INDEX FUND, INC.: To provide investment results that approximate the price and yield performance of publicly-traded common stocks in the aggregate. HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.: To achieve long-term total return consistent with prudent investment risk through investment primarily in equity securities issued by non-U.S. companies HARTFORD STOCK FUND, INC.: To achieve long-term capital growth primarily through capital appreciation, with income a secondary consideration, by investing in primarily equity securities. HARTFORD ADVISERS FUND, INC.: To achieve maximum long term total rate of return consistent with prudent investment risk by investing in common stock and other equity securities, bonds and other debt securities, and money market instruments. HARTFORD INTERNATIONAL ADVISERS FUND, INC.: To achieve maximum long-term total rate of return consistent with prudent investment risk. HARTFORD BOND FUND, INC.: To achieve maximum current income consistent with preservation of capital by investing primarily in fixed-income securities. 3 HARTFORD MORTGAGE SECURITIES FUND, INC.: To achieve maximum current income consistent with safety of principal and maintenance of liquidity by investing primarily in mortgage-related securities, including securities issued by the Government National Mortgage Association. HVA MONEY MARKET FUND, INC.: To achieve maximum current income consistent with liquidity and preservation of capital. HARTFORD U.S. GOVERNMENT MONEY MARKET FUND, INC.: To achieve maximum current income consistent with preservation of capital. INVESTMENT RESTRICTIONS OF THE FUNDS Each of the Funds is governed by a number of investment restrictions - investment practices which are prohibited or which are only permitted to a limited extent. Under the 1940 Act, investment restrictions must be designated either "fundamental" or "nonfundamental." "Fundamental" restrictions may only be changed with the approval of a majority of the outstanding voting securities of a Fund. "Nonfundamental" restrictions may be changed with the approval of a majority of a Fund's Board of Directors. Some restrictions are common to all Funds, usually because governing law so requires. Others vary because of differences in the objectives of the Funds or for historical reasons. A. FUNDAMENTAL RESTRICTIONS 1. Issuer Concentration. At least 75% of the assets of each Fund will be represented by securities limited in respect of any one issuer (except U.S. Government securities) to an amount not greater in value than 5% of the value of the total assets of such Fund. Not more than 10% of the assets of a Fund will be invested in the securities of any one issuer (except U.S. Government securities). No Fund will acquire more than 5% of the outstanding voting securities of any one issuer. 2. Industry Concentration. No Fund will invest more than 25% of its assets in the securities of issuers primarily engaged in any one industry; however, this restriction shall not apply to investments in obligations of the U.S. Government and its agencies and instrumentalities, bank certificates of deposit, bankers' acceptances or instruments secured by these money market instruments. In addition, for the Dividend and Growth Fund only, electric utilities, natural gas utilities, water utilities and telecommunications issuers will be considered separate, distinct industries. 3. Senior Securities. No Fund will issue senior securities, but for this purpose transactions in futures contracts and options thereon shall not be deemed the issuance of senior securities. 4 4. Borrowings. Except for the Dividend and Growth Fund, the International Advisers Fund and the International Opportunities Fund, none of the Funds may borrow amounts in excess of 5% of its assets, and borrowings by each of the Funds can be only from banks or through reverse repurchase agreements and as a temporary measure for extraordinary or emergency purposes. For the Dividend and Growth Fund and the International Advisers Fund, the percentage limit on borrowing is 15% and for the International Opportunities Fund the percentage limit is 20%. In addition, the Dividend and Growth Fund will not purchase securities when its borrowings exceed 5% of its assets. 5. Underwriting. No Fund will underwrite securities of other issuers. 6. Commodities. No Fund will purchase commodities or commodity contracts, except for transactions in futures contracts and options on futures contracts. 7. Real Estate. No Fund will invest in real estate, except that each of the Advisers Fund, Bond Fund, Index Fund and Stock Fund may invest up to 10% of its assets in interests in real estate which are readily marketable, and except that the Dividend and Growth Fund, the International Opportunities Fund and the International Advisers Fund may hold up to 5% of its assets in real estate or mineral leases acquired through the ownership of securities, but such Funds will not acquire securities for the purpose of acquiring real estate or mineral leases, commodities or commodity contracts. Notwithstanding the above restriction, the Mortgage Securities Fund may invest up to 100% of its assets in mortgage- related securities. 8. Loans. No Fund will make loans, except through the acquisition of (a) publicly distributed bonds, debentures or other evidences of indebtedness of a type customarily purchased by institutional investors; (b) money market instruments as permitted in accordance with the Fund's investment policies; and (c) repurchase agreements. B. NONFUNDAMENTAL RESTRICTIONS 9. Short Sales and Margin. No Fund will purchase securities on margin or make short sales of securities, except that a Fund may obtain such short-term credit as may be necessary for the clearance of purchases and sales of securities and except for transactions in futures contracts and options thereon. 10. Illiquid Securities. No Fund will invest more than 10% of its assets in illiquid securities, except that the Dividend and Growth Fund, the International Advisers Fund, the International Opportunities Fund may each invest up to 15% of its assets in illiquid securities, and except that the Index Fund may not invest in illiquid securities at all. 11. Control. No Fund will, alone or together with any other of the Hartford Mutual Funds, make investments for the purpose of exercising control over or 5 management of any issuer. 12. Pledges. No Fund will mortgage, pledge, hypothecate, or in any manner transfer, as security for indebtedness, any securities owned or held by it, except to secure reverse repurchase agreements; however, for purposes of this restriction, collateral arrangements with respect to transactions in futures contracts and options thereon are not deemed to be a pledge of securities. 13. Other Investment Companies. The Index Fund, the Mortgage Securities Fund and the money market funds will not purchase securities of other investment companies. Each of the other Funds may not invest more than 5% of its assets in securities of other investment companies and will not acquire more than 3% of the total outstanding voting securities of any one investment company. 14. Geographic Concentration. Each of the International Advisers Fund and the International Opportunities Fund will not invest more than 20% of its assets in securities of issuers located in any one country, except that it may invest up to 35% of its assets in any one of the following countries: Australia, Canada, France, Japan, the United Kingdom or Germany. ALL FUNDS U.S. TREASURY DEPARTMENT DIVERSIFICATION REGULATIONS. The U.S. Treasury Department has issued diversification regulations under Section 817 of the Internal Revenue Code. If a mutual fund underlying a variable contract, other than a pension plan contract, is not adequately diversified within the terms of these regulations, the contract owner will have adverse income tax consequences. These regulations provide, among other things, that a mutual fund shall be considered adequately diversified if (i) no more than 55% of the value of the assets in the fund is represented by any one investment; (ii) no more than 70% of the value of the assets in the fund is represented by any two investments; (iii) no more than 80% of the value of the assets in the fund is represented by any three investments and (iv) no more than 90% of the value of the total assets of the fund is represented by any four investments. In determining whether the diversification standards are met, each United States Government Agency or instrumentality shall be treated as a separate issuer. PORTFOLIO TURNOVER The portfolio turnover rates for the Bond Fund for 1993, 1994 and 1995 were 494.3%, 328.8% and 215%, respectively. The portfolio turnover rates for the Stock Fund for 1993, 1994 and 1995 were 69.0%, 63.8% and 52.9%, respectively. The portfolio turnover rates for the Advisers Fund for 1993, 1994 and 1995 were 55.3%, 60.0% and 63.5%, respectively. 6 The portfolio turnover rates for the Capital Appreciation Fund for 1993, 1994 and 1995 were 91.4%, 73.3% and 78.6%, respectively. The portfolio turnover rates for the Mortgage Securities Fund for 1993, 1994 and 1995 were 183.4%, 365.7% and 489.4%, respectively. The portfolio turnover rates for the Index Fund for 1993, 1994 and 1995 were .8%, 1.8% and 1.5%, respectively. The portfolio turnover rates for the International Advisers Fund for the period February 28, 1995 to December 31, 1995 was 47.2 %. The portfolio turnover rate for the International Opportunities Fund for 1993, 1994 and 1995 were 31.8%, 46.4% and 55.6%, respectively. The portfolio turnover rates for the Dividend and Growth Fund for the period March 8, 1994 to December 31, 1994 was 27.8%, and for 1995 was 41.4%. Because of the short-term nature of their portfolio securities and market conditions, no meaningful or accurate prediction can be made of the portfolio turnover rate for the Money Market and U.S. Government Money Market Funds. Turnover rate is computed by determining the percentage relationship of the lesser of purchases and sales of securities to the monthly average of the value of securities owned for the fiscal year, exclusive of securities whose maturities at the time of acquisition were one year or less. A high turnover rate will result in increased brokerage expenses and the likelihood of some short term gains which may be taxable to shareholders at ordinary income tax rates (see "Federal Income Taxes" in the prospectus). MANAGEMENT OF THE FUNDS The directors and officers of the Funds and their principal business occupations for the last five years are set forth below. Those directors who are deemed to be "interested persons" of Hartford Life Insurance Company ("HL") as that term is defined in the Investment Company Act of 1940, as amended, are indicated by an asterisk next to their respective names. Pursuant to a provision of each Fund's Bylaws, an Audit Committee has been appointed for each of the Funds. This Committee is made up of those directors who are not "interested persons" of HL. The functions of the Audit Committee include, but are not limited to: (1) recommending to the Board of Directors the engagement of an independent auditor; (2) reviewing the plan and results of such auditor's engagement; and (3) reviewing the Fund's internal audit arrangements. JOSEPH ANTHONY BIERNAT (age 68) 7 Director 30 Hurdle Fence Drive Avon, CT 06001 Mr. Biernat served as Senior Vice President and Treasurer of United Technologies Corporation from 1984 until March, 1987, when he retired. He subsequently served as Executive Vice President of Boston Security Counselors, Inc., Hartford, Connecticut, and served as Vice President-Client Services of Wright Investors' Service, Bridgeport, Connecticut. Mr. Biernat presently is consulting to organizations on financial matters, with the majority of time spent with T.O. Richardson & Co., Farmington, Connecticut. WINIFRED ELLEN COLEMAN (age 63) Director 27 Buckingham Lane West Hartford, CT 06117 Ms. Coleman has served as President of Saint Joseph College, West Hartford, Connecticut since 1991. JAMES CUBANSKI (age 36) Assistant Secretary Hartford Plaza Hartford, CT 06115 Mr. Cubanski has served as Director of Tax Administration of ITT Hartford Insurance Group since July 1995. Formerly, he served as Director of Federal Tax Administration (July, 1993-July, 1995), and Manager of Federal Taxes (February, 1991 - July, 1993). PETER CUMMINS (age 58) Vice President Hartford Plaza Hartford, CT 06115 Mr. Cummins has been Vice President of sales and marketing of the Individual Life and Annuity Division of ITT Hartford Insurance Group-Life Companies since 1989. JOSEPH HARRY GAREAU (age 48)* Director and President Hartford Plaza Hartford, CT 06116 Mr. Gareau has served as the Executive Vice President and Chief Investment Officer of 8 ITT Hartford Insurance Group since April, 1993. Formerly, he served as Senior Vice President (September, 1992 - April, 1993) and Vice President (October, 1987 - - September, 1992). JAMES RICHARD GARRETT (age 50) Vice President and Treasurer Hartford Plaza Hartford, CT 06115 Mr. Garrett has served as a Vice President of ITT Hartford Insurance Group since 1989 and as Treasurer since 1983. Mr. Garrett is also the Treasurer of HIMCO. JOHN PHILIP GINNETTI (age 51) Vice President P.O. Box 2999 Hartford, CT 06104-2999 Mr. Ginnetti has served as Executive Vice President and Director of Asset Management Services, a division of ITT Hartford Insurance Group-Life Companies, since 1994. From 1988 to 1994, he served as Senior Vice President and Director of the Individual Life and Annuities Division of ITT Hartford Insurance Group-Life Companies. GEORGE RICHARD JAY (age 43) Controller P.O. Box 2999 Hartford, CT 06104-2999 Mr. Jay has served as Secretary and Director, Life and Equity Accounting and Financial Control of ITT Hartford Insurance Group-Life Companies since 1987. ANDREW WILLIAM KOHNKE (age 37) Vice President P. O. Box 2999 Hartford, CT 06104-2999 Mr. Kohnke has served as a Vice President since 1992, and as an Investment Manager since 1983, of the ITT Hartford Insurance Group-Life Companies. Mr, Kohnke is also a Director and Managing Director of HIMCO. THOMAS MICHAEL MARRA (age 37) Vice President P. O. Box 2999 Hartford, CT 06104-2999 9 Mr. Marra has served as Executive Vice President since 1996, Senior Vice President since 1994, and Director of the Individual Life and Annuity Division of ITT Hartford Insurance Group-Life Companies, since 1980. CHARLES MINER O'HALLORAN (age 49) Vice President, Secretary, and General Counsel Hartford Plaza Hartford, CT 06115 Mr. O'Halloran has served as Corporate Secretary since 1996, Vice President since 1994, and Senior Associate General Counsel since 1988, of ITT Hartford Insurance Group. WILLIAM ATCHISON O'NEILL (age 65) Director Box 360 East Hampton, CT 06424 The Honorable William A. O'Neill served as Governor of the State of Connecticut from 1980 until 1991. He is presently retired. MILLARD HANDLEY PRYOR, JR. (age 62) Director 90 State House Square Hartford, CT 06103 Mr. Pryor has served as Managing Director of Pryor & Clark Company, Hartford, Connecticut since June, 1992. He served as Chairman of the Board of Lydall, Inc. from 1985 until October, 1991 and formerly served as President and Chief Executive Officer. LOWNDES ANDREW SMITH (age 56)* Director and Chairman P.O. Box 2999 Hartford, CT 06104-2999 Mr. Smith has served as President, Chief Operating Officer, and Director of ITT Hartford Insurance Group-Life Companies and as a Director of ITT Hartford Insurance Group since November, 1989. JOHN KELLEY SPRINGER (age 64) Director 55 Farmington Avenue Hartford, CT 06105 10 Mr. Springer has served as President and Chief Executive Officer of Connecticut Health System, Inc., a hospital holding company, since 1986. Formerly, he served as the President and Chief Executive Officer of Hartford Hospital, Hartford, Connecticut. COMPENSATION OF OFFICERS AND DIRECTORS. None of the Funds pays salaries or any other compensation to any of its officers or directors who are affiliated with ITT Hartford. The officers and directors serve in the same capacity for each of the Funds and the unaffiliated directors receive compensation for serving on the Board of all of the Funds. The chart below sets forth the fees paid by the Funds to the unaffiliated directors for the fiscal year ended December 31, 1995:
JOSEPH A. WINIFRED E. WILLIAM A. MILLARD H. JOHN K. BIERNAT COLEMAN O'NEILL PRYOR SPRINGER TOTAL COMPENSATION RECEIVED FROM THE FUNDS $ 18,000 $13,500 $18,000 $ 16,000 $16,000
CUSTODIAN AND TRANSFER AGENT Chase Manhattan Bank N.A., New York, New York, serves as Custodian of the Funds' assets. The Custodian is not involved in determining investment policies of the Funds or their portfolio securities transactions. Its services do not protect shareholders against possible depreciation of their assets. The fees of Chase Manhattan Bank are paid by the Funds and thus borne by the Funds' shareholders. The Custodian maintains actual custody of the securities of the Funds. Hartford Life Insurance Company, Hartford Plaza, Hartford, Connecticut 06115, serves as Transfer and Dividend Disbursing Agent for the Funds. The Transfer Agent issues and redeems shares of the Funds and disburses any dividends declared by the Funds. INDEPENDENT PUBLIC ACCOUNTANTS The financial statements and financial highlights included in this SAI and elsewhere in the registration statement have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto, and are included herein in reliance upon the authority of said firm as experts in giving said reports. PORTFOLIO BROKERAGE 11 In accordance with the terms of the Investment Advisory Agreements and Sub-Investment Advisory Agreements, the investment adviser or sub-investment adviser (the "Adviser") places all portfolio brokerage on behalf of the Funds. The Adviser attempts to obtain, in all instances, the best price and execution on all portfolio transactions. In some instances portfolio brokerage may be through affiliated persons of the Funds. Purchases and sales of debt securities issued or guaranteed by the U.S. Government will usually be effected on a net basis with a securities dealer acting as principal. Principal transactions may involve the payment of a fee or commission. Securities transactions may also be effected directly with the issuer without the payment of a fee or commission. The Adviser may also place orders for the purchase of part of an issue of securities, on behalf of the Funds, that is being underwritten at prices which will include the payment of an underwriting fee or a commission to the members of the underwriting group from whom the securities are purchased. The Adviser has been authorized by the Boards of Directors of the Funds to pay an execution-plus-research commission rate which is higher than an execution-only commission rate in connection with portfolio securities transactions executed on behalf of the Funds. Research services may include statistical analysis and economic, market and individual security research. The Adviser has been authorized by the Funds' Board of Directors to pay higher commissions than other broker-dealers may charge for such transactions so long as the Adviser determines in good faith (in accordance with the requirements of the Securities Exchange Act of 1934, as amended) that the commissions paid are reasonable in relation to the value of the brokerage and research and statistical services provided either in terms of the particular transaction or with respect to its overall account responsibilities. Evaluation of the reasonableness of brokerage commissions is based on a broker's standard of efficiency in executing and clearing a trade, and its ability to provide information and services which help in the areas of research and portfolio selection. There is no certainty that any research services thus acquired will be beneficial to the Funds and under certain circumstances, other clients of the Adviser may benefit from research and statistical services so received. Further, by paying a higher commission to a broker-dealer under the circumstances described, the amount of brokerage commissions which the Funds pay may tend to increase. Subject to applicable laws and regulations, the Adviser may also consider the willingness of particular brokers to sell ITT Hartford's variable annuity or variable life insurance contracts as a factor in the selection of brokers for its portfolio transactions. At all times, the Adviser attempts to obtain best price and execution. The aggregate amount of brokerage commissions paid by the Stock Fund for 1993, 1994 and 1995 was $1,556,000, $1,872,000 and $1,839,000, respectively. The aggregate amount of brokerage commissions paid by the Advisers Fund in 1993, 1994 and 1995 was $2,366,000, $2,771,000 and $2,608,000, respectively. The aggregate amount of brokerage commissions paid by the Capital Appreciation Fund in 12 1993, 1994 and 1995 was $1,595,000, $2,045,000 and $3,069,000, respectively. The aggregate amount of brokerage commissions paid by the Index Fund in 1993, 1994 and 1995 was $48,000, $24,000 and $66,000, respectively. The aggregate amount of brokerage commissions paid by the International Advisers Fund in 1995 was $76,000. The International Advisers Fund commenced operations in 1995. The aggregate amount of brokerage commissions paid by the International Opportunities Fund in 1993, 1994 and 1995 was $785,000, $1,940,000 and $1,986,000, respectively. The aggregate amount of brokerage commissions paid by the Dividend and Growth Fund in 1994 and 1995 was $65,000 and $303,000, respectively. The Dividend and Growth Fund commenced operations in 1994. Changes in the amounts of brokerage commissions paid reflect changes in portfolio turnover rates. No brokerage commissions were paid in 1993, 1994 or 1995 by the Bond Fund, Money Market Fund, Mortgage Securities Fund, or U.S. Government Money Market Fund. DETERMINATION OF YIELD HVA Money Market Fund, Inc. The Fund's yield quotations as they appear in advertising and sales materials are calculated by a method prescribed by the rules of the Securities and Exchange Commission. Yield calculations of the Fund used for illustration purposes are based on the consideration of a hypothetical account having a balance of exactly one share at the beginning of a seven day period, which period will end on the date of the most recent financial statements. The yield for the fund during this seven day period will be the change in the value of the hypothetical account, including dividends declared on the original share, dividends declared on any shares purchased with dividends on that share, and any monthly account charges or sales charges that would affect an account of average size, but excluding any capital changes. The following is an example of this yield calculation for the Fund based on a seven day period ending December 31, 1995. Example: 13 Assumptions: Value of a hypothetical pre-existing account with exactly one share at the beginning of the period: $1.000000 Value of the same account* (excluding capital changes) at the end of the seven day period: $1.001035 *This value would include the value of any additional shares purchased with dividends from the original share, and all dividends declared on both the original share and any such additional shares. Calculation: Ending account value $1.001035 Less beginning account value 1.000000 --------- Net change in account value $ .001035 Base period return: (adjusted change/beginning account value) $.001035/$1.000000 = $.001035 -------- Current yield = $.001035 x (365/7) = 5.40% Effective yield = (1 + .001035) 365/7 - 1 = 5.44% The current yield and effective yield information will fluctuate, and publication of yield information may not provide a basis for comparison with bank deposits, other investments which are insured and/or pay a fixed yield for a stated period of time, or other investment companies. In addition, the current yield and effective yield information may be of limited use for comparative purposes because it does not reflect charges imposed at the Separate Account level which, if included, would decrease the yield. Hartford U.S. Government Money Market Fund, Inc. The Fund's yield quotations as they appear in advertising and sales materials are calculated by a method prescribed by the rules of the Securities and Exchange Commission. Yield calculations of the Fund used for illustrations purposes are based on the consideration of a hypothetical account having a balance of exactly one share at the beginning of a seven day period, which period will end on the date of the most recent financial statements. The yield for the Fund during this seven day period will be the change in the value of the hypothetical account, including dividends declared on the original share, dividends declared on any shares purchased with dividends on that share, and any monthly account charges or sales charges that would affect an account of average size, but excluding any capital changes. The following is an example of this yield calculation for the fund based on a seven day period ending December 31, 14 1995. Example: Assumptions: Value of a hypothetical pre-existing account with exactly one share at the beginning of the period: $1.000000000 Value of the same account* (excluding capital changes) at the end of the seven day period: $1.001049. *This value would include the value of any additional shares purchased with dividends from the original share, and all dividends declared on both the original share and any such additional shares. Calculation: Ending account value $1.001049 Less beginning account value 1.000000 --------- Net change in account value $ .001049 Base period return: (adjusted change/beginning account value) $.001049/$1.000000 = $.001049 -------- Current yield = $.001049 x (365/7) = 5.47% Effective yield = (1 + .001049) 365/7-1 = 5.62% The current yield and effective yield information will fluctuate, and publication of yield information may not provide a basis for comparison with bank deposits, other investments which are insured and/or pay a fixed yield for a stated period of time, or other investment companies. In addition, the current yield and effective yield information may be of limited use for comparative purposes because it does not reflect charges imposed at the Separate Account level which, if included, would decrease the yield. At any time in the future, yields and total return may be higher or lower than past yields and there can be no assurance that any historical results will continue. 15 CALCULATION OF TOTAL RETURN As summarized in the Prospectus under the heading "Performance Related Information", total return is a measure of the change in value of an investment in a Fund over the period covered, which assumes any dividends or capital gains distributions are reinvested in that Fund immediately rather than paid to the investor in cash. The formula for total return used herein includes four steps: (1) adding to the total number of shares purchased by a hypothetical $1,000 investment in the Fund all additional shares which would have been purchased if all dividends and distributions paid or distributed during the period had been immediately reinvested; (2) calculating the value of the hypothetical initial investment of $1,000 as of the end of the period by multiplying the total number of shares owned at the end of the period by the net asset value per share on the last trading day of the period; (3) assuming redemption at the end of the period and deducting any applicable contingent deferred sales charge and (4) dividing this account value for the hypothetical investor by the initial $1,000 investment. Total return will be calculated for one year, five years and ten years or some other relevant periods if a Fund has not been in existence for at least ten years. PERFORMANCE COMPARISONS YIELD AND TOTAL RETURN Each Fund may from time to time include its yield and/or total return in advertisements or information furnished to present or prospective shareholders. Each Fund may also from time to time include in advertisements the ranking of those performance figures as categorized by recognized rating firms such as Lipper Analytical Services and Morningstar, Inc. The total return and yield may also be used to compare the performance of the Funds against certain widely acknowledged outside standards or indices for stock and bond market performance including those described below. The Standard & Poor's 500 Stock Price Index (the "S&P 500") is a market value-weighted and unmanaged index showing the changes in the aggregate market value of 500 stocks. The S&P 500 represents about 80% of the market value of all issues traded on the New York Stock Exchange. The NASDAQ Composite OTC Price Index (the "NASDAQ Index") is a market value-weighted and unmanaged index showing the changes in the aggregate market value of approximately 3,500 stocks. The NASDAQ Index is composed entirely of common stocks of companies traded over-the-counter and often through the National Association of Securities Dealers Automated Quotations ("NASDAQ") system. Only those over-the-counter stocks having only one market maker or traded on exchanges are excluded. The Lehman Government Bond Index (the "Lehman Government Index") is a measure of 16 the market value of all public obligations of the U.S. Treasury; all publicly issued debt of all agencies of the U.S. Government and all quasi-federal corporations; and all corporate debt guaranteed by the U.S. Government. Mortgage backed securities, flower bonds and foreign targeted issues are not included in the Lehman Government Index. The Morgan Stanley Capital International EAFE Index (the "EAFE Index") is an unmanaged index, which includes over 1,000 companies representing the stock markets of Europe, Australia, New Zealand, and the Far East. The EAFE Index is weighted by market capitalization, and therefore, it has a heavy representation in countries with large stock markets, such as Japan. The Lehman Government/Corporate Bond Index (the "Lehman Government/Corporate Index") is a measure of the market value of approximately 5,300 bonds with a face value currently in excess of $1.3 trillion. To be included in the Lehman Government/Corporate Index, an issue must have amounts outstanding in excess of $1 million, have at least one year to maturity and be rated "Baa" or higher ("investment grade") by a nationally recognized rating agency. The Composite Index for Hartford Advisers Fund is comprised of the S&P 500 (55%), the Lehman Government/Corporate Bond Index (35%), both mentioned above, and 90 Day U.S. Treasury Bills (10%). The Russell 2500 Index is a market value-weighted, unmanaged index showing total return (i.e., principal changes with income) in the aggregate market value of 2,500 stocks of publicly traded companies domiciled in the United States. The Index includes stocks traded on the New York Stock Exchange and the American Stock Exchange as well as in the over-the-counter market. The Composite Index for the Capital Appreciation Fund is the Russell 2500 Index (60%)/S&P 500 Index (40%), both of which are mentioned above. The following table sets forth the average annual total return, and yield where applicable, for each Fund through December 31, 1995.
TOTAL RETURN/YIELD SEC 30 10 YEARS OR DAY FUND 1 YEAR 5 YEARS SINCE INCEPTION YIELD - ---- ------ ------- --------------- ----- Capital Appreciation 30.25% 23.77% 15.50% Dividend and Growth 36.37% ---- 19.93% Index 36.55% 15.78% 11.81% International Opportunities 13.93% 10.04% 6.75% Stock 34.10% 15.59% 13.42% Advisers 28.34% 12.80% 11.85% International Advisers ---- ---- 15.84% Bond 18.49% 9.06% 8.51% 6.46% Mortgage Securities 16.17% 7.84% 8.38% 6.90% 17 HVA Money Market 5.74% 4.45% 6.00% U. S. Government Money Market 5.52% 4.14% 5.55%
18 kc\variable\96prosai.wpd PART C OTHER INFORMATION Item 24. Financial Statements and Exhibits (a) Financial statements: Incorporated by reference to Parts A and B of this Post-Effective Amendment to the Registration Statement. (b) Exhibits: (1) Articles of Incorporation* (2) By-Laws* (3) Not Applicable (4) Share Certificate* (5) Form of Investment Management Agreement* (5.1) Form of Investment Sub-Advisory Agreement* (6) Not Applicable (7) Not Applicable (8) Form of Custodian Agreement* (8.1) Form of Custodian Agreement with Chase Manhattan Bank (9) Form of Administrative Services Agreement* (9.1) Form of Share Purchase Agreement* (10) Opinion and Consent of Counsel** (11) Consent of Independent Public Accountants (12) 1995 Annual Report to Stockholders' Financial Statements (13) Not Applicable (14) Not Applicable (15) Not Applicable (16) Schedule of Computation for Performance Quotations* (17) Not Applicable (18) Not Applicable (19) Powers of Attorney (27) Financial Data Schedule *Previously filed as exhibit to Registrant's Registration Statement and incorporated by reference herein. **Filed with Registrant's Rule 24f-2 Notice. Items 25 through 29 and Item 31 are incorporated by reference to Part C of Registrant's Registration Statement. Item 30. LOCATION OF ACCOUNTS & RECORDS The Hartford Life Insurance Company P.O. Box 2999 Hartford, CT 06104-2999 AND The Chase Manhattan Bank, N.A. Chase MetroTech Center Brooklyn, NY 11245 Item 32. UNDERTAKING The Registrant undertakes to furnish to each person to whom a prospectus has been delivered a copy of the Registrant's latest annual report to shareholders, upon request and without charge. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Registration Statement to be signed on its behalf by the undersigned thereto duly authorized, in the City of Hartford, and State of Connecticut on the 15th day of April, 1996. HARTFORD CAPITAL APPRECIATION FUND, INC. By: * -------------------------------- Joseph H. Gareau Its: President Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated. SIGNATURE TITLE DATE - --------- ----- ---- * President April 15, 1996 - ------------------------- (Chief Executive Officer Joseph H. Gareau & Director) * Controller April 15, 1996 - ------------------------- (Chief Accounting Officer) George R. Jay * Vice President & Treasurer April 15, 1996 - ------------------------- (Chief Financial Officer) J. Richard Garrett * Director April 15, 1996 - ------------------------- Joseph A. Biernat * Director April 15, 1996 - ------------------------- Winifred E. Coleman * Director April 15, 1996 - ------------------------- William A. O'Neill * Director April 15, 1996 - ------------------------- Millard H. Pryor, Jr. * Director April 15, 1996 - ------------------------- Lowndes A. Smith * Director April 15, 1996 - ------------------------- John K. Springer /s/ Michael O'Halloran April 15, 1996 - ------------------------- * By Michael O'Halloran Attorney-in-fact EXHIBIT INDEX Exhibit No. Page No. - ----------- -------- 8.1 Form of Custodian Agreement with Chase Manhattan Bank 11 Consent of Arthur Andersen LLP 12 Annual Report to Shareholders 19 Power of Attorney 27 Financial Data Schedule EX-8.1 2 GLOBAL CUSTODY AGREEMENT EXHIBIT 8.1 GLOBAL CUSTODY AGREEMENT This AGREEMENT is effective ___________________, 19___, and is between THE CHASE MANHATTAN BANK, N.A. (the "Bank") and ITT HARTFORD INSURANCE GROUP (the "Customer"). 1. CUSTOMER ACCOUNTS. The Bank agrees to establish and maintain the following accounts ("Accounts"): (a) A custody account in the name of the Customer ("Custody Account") for any and all stocks, shares, bonds, debentures, notes, mortgages or other obligations for the payment of money, bullion, coin and any certificates, receipts, warrants or other instruments representing rights to receive, purchase or subscribe for the same or evidencing or representing any other rights or interests therein and other similar property whether certificated or uncertificated as may be received by the Bank or its Subcustodian (as defined in Section 3) for the account of the Customer ("Securities"); and (b) A deposit account in the name of the Customer ("Deposit Account") for any and all cash in any currency received by the Bank or its Subcustodian for the account of the Customer, which cash shall not be subject to withdrawal by draft or check. The Customer warrants its authority to: (1) deposit the cash and Securities ("Assets") received in the Accounts and (2) give Instructions (as defined in Section 11) concerning the Accounts. The Bank may deliver securities of the same class in place of those deposited in the Custody Account. Upon written agreement between the Bank and the Customer, additional Accounts may be established and separately accounted for as additional Accounts under the terms of this Agreement. 2. MAINTENANCE OF SECURITIES AND CASH AT BANK AND SUBCUSTODIAN LOCATIONS. Unless Instructions specifically require another location acceptable to the Bank: (a) Securities will be held in the country or other jurisdiction in which the principal trading market for such Securities is located, where such Securities are to be presented for payment or where such Securities are acquired; and (b) Cash will be credited to an account in a country or other jurisdiction in which such cash may be legally deposited or is the legal currency for the payment of public or private debts. Cash may be held pursuant to Instructions in either interest or non-interest bearing accounts as may be available for the particular currency. To the extent Instructions are issued and the Bank can comply with such Instructions, the Bank is authorized to maintain cash balances on deposit for the Customer with itself or one of its affiliates at such reasonable rates of interest as may from time to time be paid on such accounts, or in non-interest bearing accounts as the Customer may direct, if acceptable to the Bank. If the Customer wishes to have any of its Assets held in the custody of an institution other than the established Subcustodians as defined in Section 3 (or their securities depositories), such arrangement must be authorized by a written agreement, signed by the Bank and the Customer. 3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES. The Bank may act under this Agreement through the subcustodians listed in Schedule A of this Agreement with which the Bank has entered into subcustodial agreements ("Subcustodians"). The Customer authorizes the Bank to hold Assets in the Accounts in accounts which the Bank has established with one or more of its branches or Subcustodians. The Bank and Subcustodians are authorized to hold any of the Securities in their account with any securities depository in which they participate. The Bank reserves the right to add new, replace or remove Subcustodians. The Customer will be given reasonable notice by the Bank of any amendment to Schedule A. Upon request by the Customer, the Bank will identify the name, address and principal place of business of any Subcustodian of the Customer's Assets and the name and address of the governmental agency or other regulatory authority that supervises or regulates such Subcustodian. 4. USE OF SUBCUSTODIAN. (a) The Bank will identify such Assets on its books as belonging to the Customer. (b) A Subcustodian will hold such Assets together with assets belonging to other customers of the Bank in accounts identified on such Subcustodian's books as special custody accounts for the exclusive benefit of customers of the Bank. (c) Any Assets in the Accounts held by a Subcustodian will be subject only to the instructions of the Bank or its agent. Any Securities held in a securities depository for the account of a Subcustodian will be subject only to the instructions of such Subcustodian. (d) Any agreement the Bank enters into with a Subcustodian for holding its customer's assets shall provide that such assets will not be subject to any right, charge, security interest, lien or claim of any kind in favor of such Subcustodian except for safe custody or administration, and that the beneficial ownership of such assets will be freely transferable without the payment of money or value other than for safe custody or administration. The foregoing shall not apply to the extent of any special agreement or arrangement made by the Customer with any particular Subcustodian. 5. DEPOSIT ACCOUNT TRANSACTIONS. (a) The Bank or its Subcustodians will make payments from the Deposit Account upon receipt of Instructions which include all information required by the Bank. (b) In the event that any payment to be made under this Section 5 exceeds the funds available in the Deposit Account, the Bank, in its discretion, may advance the Customer such excess amount which shall be deemed a loan payable on demand, bearing interest at the rate customarily charged by the Bank on similar loans. (c) If the Bank credits the Deposit Account on a payable date, or at any time prior to actual collection and reconciliation to the Deposit Account, with interest, dividends, redemptions or any other amount due, the Customer will promptly return any such amount upon oral or written notification: (i) that such amount has not been received in the ordinary course of business or (ii) that such amount was incorrectly credited. If the Customer does not promptly return any amount upon such notification, the Bank shall be entitled, upon oral or written notification to the Customer, to reverse such credit by debiting the Deposit Account for the amount previously credited. The Bank or its Subcustodian shall have no duty or obligation to institute legal proceedings, file a claim or a proof of claim in any insolvency proceeding or take any other action with respect to the collection of such amount, but may act for the Customer upon Instructions after consultation with the Customer. 6. CUSTODY ACCOUNT TRANSACTIONS. (a) Securities will be transferred, exchanged or delivered by the Bank or its Subcustodian upon receipt by the Bank of Instructions which include all information required by the Bank. Settlement and payment for Securities received for, and delivery of Securities out of, the Custody Account may be made in accordance with the customary or established securities trading or securities processing practices and procedures in the jurisdiction or market in which the transaction occurs, including, without limitation, delivery of Securities to a purchaser, dealer or their agents against a receipt with the expectation of receiving later payment and free delivery. Delivery of Securities out of the Custody Account may also be made in any manner specifically required by Instructions acceptable to the Bank. (b) The Bank, in its discretion, may credit or debit the Accounts on a contractual settlement date with cash or Securities with respect to any sale, exchange or purchase of Securities. Otherwise, such transactions will be credited or debited to the Accounts on the date cash or Securities are actually received by the Bank and reconciled to the Account. (i) The Bank may reverse credits or debits made to the Accounts in its discretion if the related transaction fails to settle within a reasonable period, determined by the Bank in its discretion, after the contractual settlement date for the related transaction. (ii) If any Securities delivered pursuant to this Section 6 are returned by the recipient thereof, the Bank may reverse the credits and debits of the particular transaction at any time. 7. ACTIONS OF THE BANK. The Bank shall follow Instructions received regarding assets held in the Accounts. However, until it receives Instructions to the contrary, the Bank will: (a) Present for payment any Securities which are called, redeemed or retired or otherwise become payable and all coupons and other income items which call for payment upon presentation, to the extent that the Bank or Subcustodian is actually aware of such opportunities. (b) Execute in the name of the Customer such ownership and other certificates as may be required to obtain payments in respect of Securities. (c) Exchange interim receipts or temporary Securities for definitive Securities. (d) Appoint brokers and agents for any transaction involving the Securities, including, without limitation, affiliates of the Bank or any Subcustodian. (e) Issue statements to the Customer, at times mutually agreed upon, identifying the Assets in the Accounts. The Bank will send the Customer an advice or notification of any transfers of Assets to or from the Accounts. Such statements, advices or notifications shall indicate the identity of the entity having custody of the Assets. Unless the Customer sends the Bank a written exception or objection to any Bank statement within sixty (60) days of receipt, the Customer shall be deemed to have approved such statement. In such event, or where the Customer has otherwise approved any such statement, the Bank shall, to the extent permitted by law, be released, relieved and discharged with respect to all matters set forth in such statement or reasonably implied therefrom as though it had been settled by the decree of a court of competent jurisdiction in an action where the Customer and all persons having or claiming an interest in the Customer or the Customer's Accounts were parties. All collections of funds or other property paid or distributed in respect of Securities in the Custody Account shall be made at the risk of the Customer. The Bank shall have no liability for any loss occasioned by delay in the actual receipt of notice by the Bank or by its Subcustodians of any payment, redemption or other transaction regarding Securities in the Custody Account in respect of which the Bank has agreed to take any action under this Agreement. 8. CORPORATE ACTIONS; PROXIES. Whenever the Bank receives information concerning the Securities which requires discretionary action by the beneficial owner of the Securities (other than a proxy), such as subscription rights, bonus issues, stock repurchase plans and rights offerings, or legal notices or other material intended to be transmitted to securities holders ("Corporate Actions"), the Bank will give the Customer notice of such Corporate Actions to the extent that the Bank's central corporate actions department has actual knowledge of a Corporate Action in time to notify its customers. When a rights entitlement or a fractional interest resulting from a rights issue, stock dividend, stock split or similar Corporate Action is received which bears an expiration date, the Bank will endeavor to obtain Instructions from the Customer or its Authorized Person, but if Instructions are not received in time for the Bank to take timely action, or actual notice of such Corporate Action was received too late to seek Instructions, the Bank is authorized to sell such rights entitlement or fractional interest and to credit the Deposit Account with the proceeds or take any other action it deems, in good faith, to be appropriate in which case it shall be held harmless for any such action. The Bank will deliver proxies to the Customer or its designated agent pursuant to special arrangements which may have been agreed to in writing. Such proxies shall be executed in the appropriate nominee name relating to Securities in the Custody Account registered in the name of such nominee but without indicating the manner in which such proxies are to be voted; and where bearer Securities are involved, proxies will be delivered in accordance with Instructions. 9. NOMINEES. Securities which are ordinarily held in registered form may be registered in a nominee name of the Bank, Subcustodian or securities depository, as the case may be. The Bank may without notice to the Customer cause any such Securities to cease to be registered in the name of any such nominee and to be registered in the name of the Customer. In the event that any Securities registered in a nominee name are called for partial redemption by the issuer, the Bank may allot the called portion to the respective beneficial holders of such class of security in any manner the Bank deems to be fair and equitable. The Customer agrees to hold the Bank, Subcustodians, and their respective nominees harmless from any liability arising directly or indirectly from their status as a mere record holder of Securities in the Custody Account. 10. AUTHORIZED PERSONS. As used in this Agreement, the term "Authorized Person" means employees or agents including investment managers as have been designated by written notice from the Customer or its designated agent to act on behalf of the Customer under this Agreement. Such persons shall continue to be Authorized Persons until such time as the Bank receives Instructions from the Customer or its designated agent that any such employee or agent is no longer an Authorized Person. 11. INSTRUCTIONS. The term "Instructions" means instructions of any Authorized Person received by the Bank, via telephone, telex, TWX, facsimile transmission, bank wire or other teleprocess or electronic instruction or trade information system acceptable to the Bank which the Bank believes in good faith to have been given by Authorized Persons or which are transmitted with proper testing or authentication pursuant to terms and conditions which the Bank may specify. Unless otherwise expressly provided, all Instructions shall continue in full force and effect until canceled or superseded. Any Instructions delivered to the Bank by telephone shall promptly thereafter be confirmed in writing by an Authorized Person (which confirmation may bear the facsimile signature of such Person), but the Customer will hold the Bank harmless for the failure of an Authorized Person to send such confirmation in writing, the failure of such confirmation to conform to the telephone instructions received or the Bank's failure to produce such confirmation at any subsequent time. The Bank may electronically record any Instructions given by telephone, and any other telephone discussions with respect to the Custody Account. The Customer shall be responsible for safeguarding any test keys, identification codes or other security devices which the Bank shall make available to the Customer or its Authorized Persons. 12. STANDARD OF CARE; LIABILITIES. (a) The Bank shall be responsible for the performance of only such duties as are set forth in this Agreement or expressly contained in Instructions which are consistent with the provisions of this Agreement as follows: (i) The Bank will use reasonable care with respect to its obligations under this Agreement and the safekeeping of Assets. The Bank shall be liable to the Customer for any loss which shall occur as the result of the failure of a Subcustodian to exercise reasonable care with respect to the safekeeping of such Assets to the same extent that the Bank would be liable to the Customer if the Bank were holding such Assets in New York. In the event of any loss to the Customer by reason of the failure of the Bank or its Subcustodian to utilize reasonable care, the Bank shall be liable to the Customer only to the extent of the Customer's direct damages, to be determined based on the market value of the property which is the subject of the loss at the date of discovery of such loss and without reference to any special conditions or circumstances. (ii) The Bank will not be responsible for any act, omission, default or for the solvency of any broker or agent which it or a Subcustodian appoints unless such appointment was made negligently or in bad faith. (iii) The Bank shall be indemnified by, and without liability to the Customer for any action taken or omitted by the Bank whether pursuant to Instructions or otherwise within the scope of this Agreement if such act or omission was in good faith, without negligence. In performing its obligations under this Agreement, the Bank may rely on the genuineness of any document which it believes in good faith to have been validly executed. (iv) The Customer agrees to pay for and hold the Bank harmless from any liability or loss resulting from the imposition or assessment of any taxes or other governmental charges, and any related expenses with respect to income from or Assets in the Accounts. (v) The Bank shall be entitled to rely, and may act, upon the advice of counsel (who may be counsel for the Customer) on all matters and shall be without liability for any action reasonably taken or omitted pursuant to such advice. (vi) The Bank need not maintain any insurance for the benefit of the Customer. (vii) Without limiting the foregoing, the Bank shall not be liable for any loss which results from: 1) the general risk of investing, or 2) investing or holding Assets in a particular country including, but not limited to, losses resulting from nationalization, expropriation or other governmental actions; regulation of the banking or securities industry; currency restrictions, devaluations or fluctuations; and market conditions which prevent the orderly execution of securities transactions or affect the value of Assets. (viii) Neither party shall be liable to the other for any loss due to forces beyond their control including, but not limited to strikes or work stoppages, acts of war or terrorism, insurrection, revolution, nuclear fusion, fission or radiation, or acts of God. (b) Consistent with and without limiting the first paragraph of this Section 12, it is specifically acknowledged that the Bank shall have no duty or responsibility to: (i) question Instructions or make any suggestions to the Customer or an Authorized Person regarding such Instructions; (ii) supervise or make recommendations with respect to investments or the retention of Securities; (iii) advise the Customer or an Authorized Person regarding any default in the payment of principal or income of any security other than as provided in Section 5(c) of this Agreement; (iv) evaluate or report to the Customer or an Authorized Person regarding the financial condition of any broker, agent or other party to which Securities are delivered or payments are made pursuant to this Agreement; (v) review or reconcile trade confirmations received from brokers. The Customer or its Authorized Persons (as defined in Section 10) issuing Instructions shall bear any responsibility to review such confirmations against Instructions issued to and statements issued by the Bank. (c) The Customer authorizes the Bank to act under this Agreement notwithstanding that the Bank or any of its divisions or affiliates may have a material interest in a transaction, or circumstances are such that the Bank may have a potential conflict of duty or interest including the fact that the Bank or any of its affiliates may provide brokerage services to other customers, act as financial advisor to the issuer of Securities, act as a lender to the issuer of Securities, act in the same transaction as agent for more than one customer, have a material interest in the issue of Securities, or earn profits from any of the activities listed herein. 13. FEES AND EXPENSES. The Customer agrees to pay the Bank for its services under this Agreement such amount as may be agreed upon in writing, together with the Bank's reasonable out-of-pocket or incidental expenses, including, but not limited to, legal fees. The Bank shall have a lien on and is authorized to charge any Accounts of the Customer for any amount owing to the Bank under any provision of this Agreement. 14. MISCELLANEOUS. (a) FOREIGN EXCHANGE TRANSACTIONS. To facilitate the administration of the Customer's trading and investment activity, the Bank is authorized to enter into spot or forward foreign exchange contracts with the Customer or an Authorized Person for the Customer and may also provide foreign exchange through its subsidiaries, affiliates or Subcustodians. Instructions, including standing instructions, may be issued with respect to such contracts but the Bank may establish rules or limitations concerning any foreign exchange facility made available. In all cases where the Bank, its subsidiaries, affiliates or Subcustodians enter into a foreign exchange contract related to Accounts, the terms and conditions of the then current foreign exchange contract of the Bank, its subsidiary, affiliate or Subcustodian and, to the extent not inconsistent, this Agreement shall apply to such transaction. (b) CERTIFICATION OF RESIDENCY, ETC. The Customer certifies that it is a resident of the United States and agrees to notify the Bank of any changes in residency. The Bank may rely upon this certification or the certification of such other facts as may be required to administer the Bank's obligations under this Agreement. The Customer will indemnify the Bank against all losses, liability, claims or demands arising directly or indirectly from any such certifications. (c) ACCESS TO RECORDS. The Bank shall allow the Customer's independent public accountant reasonable access to the records of the Bank relating to the Assets as is required in connection with their examination of books and records pertaining to the Customer's affairs. Subject to restrictions under applicable law, the Bank shall also obtain an undertaking to permit the Customer's independent public accountants reasonable access to the records of any Subcustodian which has physical possession of any Assets as may be required in connection with the examination of the Customer's books and records. (d) GOVERNING LAW; SUCCESSORS AND ASSIGNS. This Agreement shall be governed by the laws of the State of New York and shall not be assignable by either party, but shall bind the successors in interest of the Customer and the Bank. (e) ENTIRE AGREEMENT; APPLICABLE RIDERS. Customer represents that the Assets deposited in the Accounts are (Check one): Employee Benefit Plan or other assets subject to the Employee ---- Retirement Income Security Act of 1974, as amended ("ERISA"); Mutual Fund assets subject to certain Securities and Exchange ---- Commission ("SEC") rules and regulations; Neither of the above. ---- This Agreement consists exclusively of this document together with Schedule A, Exhibits I - _______ and the following Rider(s): MUTUAL FUND INSURANCE COMPANY PROVISIONS There are no other provisions of this Agreement and this Agreement supersedes any other agreements, whether written or oral, between the parties. Any amendment to this Agreement must be in writing, executed by both parties. (f) SEVERABILITY. In the event that one or more provisions of this Agreement are held invalid, illegal or unenforceable in any respect on the basis of any particular circumstances or in any jurisdiction, the validity, legality and enforceability of such provision or provisions under other circumstances or in other jurisdictions and of the remaining provisions will not in any way be affected or impaired. (g) WAIVER. Except as otherwise provided in this Agreement, no failure or delay on the part of either party in exercising any power or right under this Agreement operates as a waiver, nor does any single or partial exercise of any power or right preclude any other or further exercise, or the exercise of any other power or right. No waiver by a party of any provision of this Agreement, or waiver of any breach or default, is effective unless in writing and signed by the party against whom the waiver is to be enforced. (h) NOTICES. All notices under this Agreement shall be effective when actually received. Any notices or other communications which may be required under this Agreement are to be sent to the parties at the following addresses or such other addresses as may subsequently be given to the other party in writing: BANK: The Chase Manhattan Bank, N.A. Chase MetroTech Center Brooklyn, NY 11245 Attention: Global Custody Division or telex: ----------------------------------- CUSTOMER: -------------------------------------------- -------------------------------------------- -------------------------------------------- or telex: ---------------------------------- (i) TERMINATION. This Agreement may be terminated by the Customer or the Bank by giving sixty (60) days written notice to the other, provided that such notice to the Bank shall specify the names of the persons to whom the Bank shall deliver the Assets in the Accounts. If notice of termination is given by the Bank, the Customer shall, within sixty (60) days following receipt of the notice, deliver to the Bank Instructions specifying the names of the persons to whom the Bank shall deliver the Assets. In either case the Bank will deliver the Assets to the persons so specified, after deducting any amounts which the Bank determines in good faith to be owed to it under Section 13. If within sixty (60) days following receipt of a notice of termination by the Bank, the Bank does not receive Instructions from the Customer specifying the names of the persons to whom the Bank shall deliver the Assets, the Bank, at its election, may deliver the Assets to a bank or trust company doing business in the State of New York to be held and disposed of pursuant to the provisions of this Agreement, or to Authorized Persons, or may continue to hold the Assets until Instructions are provided to the Bank. ITT HARTFORD INSURANCE GROUP By -------------------------------- Title THE CHASE MANHATTAN BANK, N.A. By: -------------------------------- Title STATE OF ) : ss. COUNTY OF ) On this day of , 19 , before me personally came , to me known, who being by me duly sworn, did depose and say that he/she resides in at ; that he/she is of , the entity described in and which executed the foregoing instrument; that he/she knows the seal of said entity, that the seal affixed to said instrument is such seal, that it was so affixed by order of said entity, and that he/she signed his/her name thereto by like order. ------------------------------ Sworn to before me this --------------------- day of , 19 . -------------- ----- - ------------------------------------ Notary STATE OF NEW YORK ) : ss. COUNTY OF NEW YORK ) On this day of ,19 , before me personally came , to me known, who being by me duly sworn, did depose and say that he/she resides in at ,that he/she is a Vice President of THE CHASE MANHATTAN BANK, (National Association), the corporation described in and which executed the foregoing instrument; that he/she knows the seal of said corporation, that the seal affixed to said instrument is such corporate seal, that it was so affixed by order of the Board of Directors of said corporation, and that he/she signed his/her name thereto by like order. ------------------------------ Sworn to before me this ---------------------------- day of , 19 . ---------------- -------- - ------------------------------------------- Notary Mutual Fund Rider to Global Custody Agreement Between The Chase Manhattan Bank, N.A. and ITT Hartford Insurance Group, effective --------------------- Customer represents that the Assets being placed in the Bank's custody are subject to the Investment Company Act of 1940 (the Act), as the same may be amended from time to time. Except to the extent that the Bank has specifically agreed to comply with a condition of a rule, regulation, interpretation promulgated by or under the authority of the SEC or the Exemptive Order applicable to accounts of this nature issued to the Bank (Investment Company Act of 1940, Release No. 12053, November 20, 1981), as amended, or unless the Bank has otherwise specifically agreed, the Customer shall be solely responsible to assure that the maintenance of Assets under this Agreement complies with such rules, regulations, interpretations or exemptive order promulgated by or under the authority of the Securities Exchange Commission. The following modifications are made to the Agreement: Section 3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES. Add the following language to the end of Section 3: The terms Subcustodian and securities depositories as used in this Agreement shall mean a branch of a qualified U.S. bank, an eligible foreign custodian or an eligible foreign securities depository, which are further defined as follows: (a) "qualified U.S. Bank" shall mean a qualified U.S. bank as defined in Rule 17f-5 under the Investment Company Act of 1940; (b) "eligible foreign custodian" shall mean (i) a banking institution or trust company incorporated or organized under the laws of a country other than the United States that is regulated as such by that country's government or an agency thereof and that has shareholders' equity in excess of $200 million in U.S. currency (or a foreign currency equivalent thereof), (ii) a majority owned direct or indirect subsidiary of a qualified U.S. bank or bank holding company that is incorporated or organized under the laws of a country other than the United States and that has shareholders' equity in excess of $100 million in U.S. currency (or a foreign currency equivalent thereof)(iii) a banking institution or trust company incorporated or organized under the laws of a country other than the United States or a majority owned direct or indirect subsidiary of a qualified U.S. bank or bank holding company that is incorporated or organized under the laws of a country other than the United States which has such other qualifications as shall be specified in Instructions and approved by the Bank; or (iv) any other entity that shall have been so qualified by exemptive order, rule or other appropriate action of the SEC; and (c) "eligible foreign securities depository" shall mean a securities depository or clearing agency, incorporated or organized under the laws of a country other than the United States, which operates (i) the central system for handling securities or equivalent book-entries in that country, or (ii) a transnational system for the central handling of securities or equivalent book-entries. The Customer represents that its Board of Directors has approved each of the Subcustodians listed in Schedule A to this Agreement and the terms of the subcustody agreements between the Bank and each Subcustodian, which are attached as Exhibits I through_____ of Schedule A, and further represents that its Board has determined that the use of each Subcustodian and the terms of each subcustody agreement are consistent with the best interests of the Fund(s) and its (their) shareholders. The Bank will supply the Customer with any amendment to Schedule A for approval. The Customer has supplied or will supply the Bank with certified copies of its Board of Directors resolution(s) with respect to the foregoing prior to placing Assets with any Subcustodian so approved. Section 11. INSTRUCTIONS. Add the following language to the end of Section 11: Deposit Account Payments and Custody Account Transactions made pursuant to Section 5 and 6 of this Agreement may be made only for the purposes listed below. Instructions must specify the purpose for which any transaction is to be made and Customer shall be solely responsible to assure that Instructions are in accord with any limitations or restrictions applicable to the Customer by law or as may be set forth in its prospectus. (a) In connection with the purchase or sale of Securities at prices as confirmed by Instructions; (b) When Securities are called, redeemed or retired, or otherwise become payable; (c) In exchange for or upon conversion into other securities alone or other securities and cash pursuant to any plan or merger, consolidation, reorganization, recapitalization or readjustment; (d) Upon conversion of Securities pursuant to their terms into other securities; (e) Upon exercise of subscription, purchase or other similar rights represented by Securities; (f) For the payment of interest, taxes, management or supervisory fees, distributions or operating expenses; (g) In connection with any borrowings by the Customer requiring a pledge of Securities, but only against receipt of amounts borrowed; (h) In connection with any loans, but only against receipt of adequate collateral as specified in Instructions which shall reflect any restrictions applicable to the Customer; (i) For the purpose of redeeming shares of the capital stock of the Customer and the delivery to, or the crediting to the account of, the Bank, its Subcustodian or the Customer's transfer agent, such shares to be purchased or redeemed; (j) For the purpose of redeeming in kind shares of the Customer against delivery to the Bank, its Subcustodian or the Customer's transfer agent of such shares to be so redeemed; (k) For delivery in accordance with the provisions of any agreement among the Customer, the Bank and a broker-dealer registered under the Securities Exchange Act of 1934 (the "Exchange Act") and a member of The National Association of Securities Dealers, Inc. ("NASD"), relating to compliance with the rules of The Options Clearing Corporation and of any registered national securities exchange, or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by the Customer; (l) For release of Securities to designated brokers under covered call options, provided, however, that such Securities shall be released only upon payment to the Bank of monies for the premium due and a receipt for the Securities which are to be held in escrow. Upon exercise of the option, or at expiration, the Bank will receive from brokers the Securities previously deposited. The Bank will act strictly in accordance with Instructions in the delivery of Securities to be held in escrow and will have no responsibility or liability for any such Securities which are not returned promptly when due other than to make proper request for such return; (m) For spot or forward foreign exchange transactions to facilitate security trading, receipt of income from Securities or related transactions; (n) For other proper purposes as may be specified in Instructions issued by an officer of the Customer which shall include a statement of the purpose for which the delivery or payment is to be made, the amount of the payment or specific Securities to be delivered, the name of the person or persons to whom delivery or payment is to be made, and a certification that the purpose is a proper purpose under the instruments governing the Customer; and (o) Upon the termination of this Agreement as set forth in Section 14(i). Section 12. STANDARD OF CARE; LIABILITIES. Add the following subsection (d) to Section 12: (d) The Bank hereby warrants to the Customer that in its opinion, after due inquiry, the established procedures to be followed by each of its branches, each branch of a qualified U.S. bank, each eligible foreign custodian and each eligible foreign securities depository holding the Customer's Securities pursuant to this Agreement afford protection for such Securities at least equal to that afforded by the Bank's established procedures with respect to similar securities held by the Bank and its securities depositories in New York. Section 14. ACCESS TO RECORDS. ADD THE FOLLOWING LANGUAGE TO THE END OF SECTION 14(c): Upon reasonable request from the Customer, the Bank shall furnish the Customer such reports (or portions thereof) of the Bank's system of internal accounting controls applicable to the Bank's duties under this Agreement. The Bank shall endeavor to obtain and furnish the Customer with such similar reports as it may reasonably request with respect to each Subcustodian and securities depository holding the Customer's assets. GLOBAL CUSTODY AGREEMENT WITH ------------------------- DATE ------------------------- DOMESTIC SPECIAL TERMS AND CONDITIONS RIDER DOMESTIC CORPORATE ACTIONS AND PROXIES With respect to domestic U.S. and Canadian Securities (the latter if held in DTC), the following provisions will apply rather than the provisions of Section 8 of the Agreement: The Bank will send to the Customer or the Authorized Person for a Custody Account, such proxies (signed in blank, if issued in the name of the Bank's nominee or the nominee of a central depository) and communications with respect to Securities in the Custody Account as call for voting or relate to legal proceedings within a reasonable time after sufficient copies are received by the Bank for forwarding to its customers. In addition, the Bank will follow coupon payments, redemptions, exchanges or similar matters with respect to Securities in the Custody Account and advise the Customer or the Authorized Person for such Account of rights issued, tender offers or any other discretionary rights with respect to such Securities, in each case, of which the Bank has received notice from the issuer of the Securities, or as to which notice is published in publications routinely utilized by the Bank for this purpose. FEES The fees referenced in Section 13 of this Agreement cover only domestic and euro-dollar holdings. There will be no Schedule A to this Agreement, as there are no foreign assets in the Accounts. EX-11 3 EXHIBIT 11 EXHIBIT 11 ARTHUR ANDERSEN LLP CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the use of our reports (and to all references to our Firm) included in or made a part of this Registration Statement File No. 2-89794 for Hartford Capital Appreciation Fund, Inc. on Form N-1A. ARTHUR ANDERSEN LLP Hartford, CT April 4, 1996 EX-12 4 EXHIBIT 12 HARTFORD BOND FUND, INC. STATEMENT OF NET ASSETS DECEMBER 31, 1995
PRINCIPAL MARKET AMOUNT VALUE - ----------- ------------- LONG-TERM BONDS -- 92.8% FEDERAL AGENCIES MORTGAGE PASS-THROUGHS -- 5.6% Federal National Mortgage Association $ 4,226,243 6.000% due 08/01/08 - 10/01/09.................... $ 4,183,907 5,000,000 6.500% due 11/01/10......... 5,025,000 9,950,000 7.000% due 12/01/25......... 10,037,690 ------------- 19,246,597 ------------- FEDERAL AGENCIES -- 3.1% Federal National Mortgage Association 1,000,000 5.800% due 12/10/03......... 994,312 604,622 6.000% due 04/01/09......... 598,528 3,000,000 6.480% due 12/01/05......... 3,059,062 5,000,000 8.200% due 03/10/16......... 6,037,110 ------------- 10,689,012 ------------- U.S. GOVERNMENT SECURITIES -- 29.4% U.S. Treasury Bonds 12,400,000 8.125% due 08/15/19 - 08/15/21.................... 15,602,375 7,650,000 8.750% due 05/15/17......... 10,119,512 9,400,000 8.875% due 08/15/17......... 12,593,058 1,000,000 9.000% due 11/15/18......... 1,362,812 U.S. Treasury Notes 5,000,000 6.500% due 04/30/99 - 08/15/05.................... 5,197,185 20,550,000 6.875% due 02/28/97 - 07/31/99.................... 21,011,108 10,200,000 7.500% due 01/31/97 - 11/15/01.................... 10,601,682 8,000,000 8.750% due 10/15/97......... 8,475,000 12,000,000 10.750% due 02/15/03........ 15,660,000 ------------- 100,622,732 ------------- BANKS -- 3.1% Bank of New York 3,000,000 7.625% due 07/15/02......... 3,244,755 Chase Manhattan Corp. 3,000,000 7.750% due 11/01/99......... 3,197,640 Mellon Financial Co. 4,000,000 6.300% due 06/01/00......... 4,069,108 ------------- 10,511,503 ------------- BEVERAGES -- 1.2% Bacardi-Martini Finance 4,000,000 5.750% due 07/23/98......... 4,000,000 ------------- CONGLOMERATE -- 2.1% Tenneco Inc. 6,850,000 8.000% due 11/15/99......... 7,330,671 ------------- FINANCIAL SERVICES -- 14.1% Aristar Inc. 3,000,000 6.300% due 07/15/00......... 3,046,122 Associates Corp. 2,500,000 9.700% due 05/01/97......... 2,634,023 Donaldson Lufkin Jenrette 5,000,000 6.875% due 11/01/05......... 5,123,450 Duke Realty Investments 5,000,000 7.250% due 09/22/02......... 5,151,890 ERP Operating 2,500,000 6.625% due 12/22/97......... 2,506,202 Ford Motor Credit Company 3,000,000 7.750% due 11/15/02......... 3,272,955 General Motors Acceptance Corp. 4,000,000 5.875% due 01/12/99......... 4,013,680 FINANCIAL SERVICES -- (CONTINUED) Lehman Brothers $ 3,000,000 10.000% due 05/15/99........ $ 3,350,703 Massachusetts Mutual Life Insurance Company 5,000,000 7.625% due 11/15/23......... 5,234,750 Salomon Inc. 3,000,000 5.930% due 03/17/97......... 2,991,360 Salomon Inc. 3,000,000 6.940% due 09/15/97......... 3,035,550 Charles Schwab Medium Term Note 3,000,000 6.630% due 08/04/98......... 3,055,470 Spieker Property Real Estate Investments 5,000,000 6.650% due 12/15/00......... 4,995,400 ------------- 48,411,555 ------------- FOREIGN GOVERNMENTS -- 10.3% Abbey National First Capital 5,575,000 8.200% due 10/15/04......... 6,322,502 Ahmanson H.F. Co. 5,500,000 6.350% due 09/01/98......... 5,585,525 Banco Central Hispano 5,000,000 7.500% due 06/15/05......... 5,269,245 Bank of Montreal 3,000,000 10.000% due 09/01/98........ 3,319,080 KFW International Finance Inc. 5,000,000 7.000% due 03/01/13......... 5,346,975 Province of Manitoba Debenture 5,000,000 9.625% due 12/01/18......... 6,722,700 Skandinaviska Enskilda Banken 2,500,000 6.875% due 02/15/09......... 2,544,087 ------------- 35,110,114 ------------- HEALTH CARE -- 0.8% Columbia Healthcare 2,500,000 6.730% due 07/15/45......... 2,604,608 ------------- MEDIA -- 1.5% News America Holdings Inc. 5,000,000 7.500% due 03/01/00......... 5,245,115 ------------- OIL & GAS -- 2.7% Columbia Gas Systems Inc. 6,000,000 6.390% due 11/28/00......... 6,100,170 Union Oil Co. of California Medium Term Note 2,500,000 9.375% due 02/15/11......... 3,171,175 ------------- 9,271,345 ------------- PAPER CO. -- 0.6% Georgia-Pacific Corp. 2,000,000 9.850% due 06/15/97......... 2,111,420 ------------- TECHNOLOGY -- 2.2% ADT Operations 3,290,000 8.250% due 08/01/00......... 3,479,175 Motorola Inc. 3,100,000 8.400% due 08/15/31......... 3,912,922 ------------- 7,392,097 ------------- TELECOMMUNICATIONS -- 3.6% Cox Communications 5,000,000 6.500% due 11/15/02......... 5,089,320
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 78
PRINCIPAL MARKET AMOUNT VALUE - ----------- ------------- LONG-TERM BONDS -- (CONTINUED) TELECOMMUNICATIONS -- (CONTINUED) Tele-Communications, Inc. $ 4,500,000 8.650% due 09/15/04......... $ 5,019,782 Time Warner Entertainment 2,000,000 8.375% due 03/15/23......... 2,166,242 ------------- 12,275,344 ------------- UTILITIES -- 5.8% Bell Telephone Co. of Pennsylvania 3,000,000 8.350% due 12/15/30......... 3,802,584 Chesapeake & Potomac Telephone 1,500,000 8.300% due 08/01/31......... 1,840,581 Commonwealth Edison First Mortgage 1,450,000 5.250% due 04/01/96......... 1,446,868 Commonwealth Edison 7,000,000 6.375% due 07/15/00......... 7,103,243 GTE Corp. 5,000,000 9.100% due 06/01/03......... 5,789,280 ------------- 19,982,556 ------------- ASSET-BACKED BONDS -- 6.7% Amex 92-1A 2,000,000 6.050% due 06/15/98......... 2,017,480 Discover 93-1 3,000,000 5.300% due 10/16/01......... 2,956,890 Discover 91-E 5,000,000 7.850% due 05/21/99......... 5,138,550 Oakwood 94-A B1 4,631,230 8.400% due 02/15/15......... 4,726,772 SCC 91-3 B 5,615,000 9.250% due 09/07/98......... 6,085,257 SCC 91-6 B 2,000,000 8.350% due 01/07/00......... 2,139,340 ------------- 23,064,289 ------------- Total long-term bonds......... $ 317,868,958 ------------- ------------- SHORT-TERM SECURITIES -- 3.3% REPURCHASE AGREEMENT $11,382,000 Interest in $24,574,000 joint repurchase agreement dated 12/29/95 with Fleet Bank 5.850% due 01/02/96; maturity amount $11,389,398; (Collateralized by $24,574,000 U.S. Treasury Note 5.125% due 12/31/98)... $ 11,382,000 ------------- -------------
DIVERSIFICATION OF ASSETS: Total long-term bonds........................ 92.8 % $317,868,958 Total short-term securities.................. 3.3 11,382,000 ------ ------------ Total investment in securities *(Identified cost $313,830,896)............ 96.1 329,250,958 Excess of cash and receivables over liabilities................................ 3.9 13,243,989 ------ ------------ Net assets (Applicable to $1.02826 per share based on 333,082,054 shares outstanding)... 100.0% $342,494,947 ------ ------------ ------ ------------ SUMMARY OF SHAREHOLDERS' EQUITY: Capital stock, par value $.10 per share; authorized 800,000,000 shares; outstanding 333,082,054 shares............................................. $ 33,308,205 Capital surplus...................................... 304,781,775 Undistributed net realized (loss) on investments..... (11,015,095) Unrealized appreciation of investments............... 15,420,062 ------------ Net assets, applicable to shares outstanding......... $342,494,947 ------------ ------------
* Aggregate cost for Federal income tax purposes. 79 HARTFORD STOCK FUND, INC. STATEMENT OF NET ASSETS DECEMBER 31, 1995
MARKET SHARES VALUE - ----------- --------------- COMMON STOCKS -- 89.5% COMMUNICATIONS EQUIPMENT --2.1% *60,000 Cisco Systems Inc............. $ 4,477,500 *200,000 DSC Communications............ 7,375,000 285,000 Motorola Inc.................. 16,245,000 *250,000 3Com Corp..................... 11,656,250 --------------- 39,753,750 --------------- COMPUTERS & OFFICE EQUIPMENT -- 3.1% *100,000 Compaq Computer............... 4,800,000 320,000 International Business Machine Corp........................ 29,360,000 180,000 Xerox......................... 24,660,000 --------------- 58,820,000 --------------- CONSUMER DURABLES -- 0.9% 0.25 Chrysler Corp................. 14 200,000 Ford Motor Corp............... 5,800,000 225,000 General Motors Class E........ 11,700,000 --------------- 17,500,014 --------------- CONSUMER NON-DURABLES -- 11.0% 275,000 Anheuser Busch Cos. Inc....... 18,390,625 230,000 Colgate Palmolive Co.......... 16,157,500 150,000 Duracell International Inc.... 7,762,500 350,000 General Mills Company......... 20,212,500 250,000 Kimberly Clark Corp........... 20,687,500 92,200 Estee Lauder Co.-Class A...... 3,215,475 470,000 Pepsico Inc................... 26,261,250 450,000 Philip Morris................. 40,725,000 360,000 Proctor and Gamble............ 29,880,000 707,000 Sara Lee Corp................. 22,535,625 --------------- 205,827,975 --------------- CONSUMER SERVICES -- 0.9% *169,000 Autotote...................... 297,863 *375,000 Circus Circus Enterprises..... 10,453,125 150,000 Service Corp.................. 6,600,000 --------------- 17,350,988 --------------- ENERGY AND SERVICES -- 7.0% 375,000 Amoco Corporation............. 26,953,125 536,800 Burlington Resources.......... 21,069,400 500,000 Exxon......................... 40,062,500 79,300 Hong Kong Telecom Ltd.-Sp ADR......................... 1,407,575 300,000 Schlumberger Ltd.............. 20,775,000 383,664 Total S.A. ADR................ 13,044,576 300,000 Unocal Corp................... 8,737,500 --------------- 132,049,676 --------------- FINANCIAL SERVICES -- 14.7% 500,000 Allstate Corp................. 20,562,500 600,000 American Express Co........... 24,825,000 225,000 American International Group....................... 20,812,500 110,000 Bank of New York Co........... 5,362,500 550,000 Citicorp...................... 36,987,500 82,500 Franklin Resources Inc........ 4,155,938 300,000 Greenpoint Financial Corp..... 8,025,000 250,000 Marsh and McLennan Cos., Inc......................... 22,187,500 450,000 Merrill Lynch & Co. Inc....... 22,950,000 250,000 J.P. Morgan................... 20,062,500 260,000 Nationsbank Corp.............. 18,102,500 575,000 Salomon Inc................... 20,412,500 FINANCIAL SERVICES -- (CONTINUED) 400,000 State Street Boston Corp...... $ 18,000,000 525,000 Travelers Group Inc........... 33,009,375 --------------- 275,455,313 --------------- FOREIGN STOCKS-JAPAN -- 2.0% 200,000 Eisai Co. Ltd................. 3,499,952 200,000 Fuji Bank Ltd................. 4,408,779 300,000 Matsushita Electric Co........ 4,872,861 300,000 Nomura Securities............. 6,526,153 189,000 Sankyo........................ 4,239,389 200,000 Sanwa Bank Ltd................ 4,060,717 240,000 Takeda Chemical Industries Ltd......................... 3,944,697 300,000 Toyota Motor Corp............. 6,352,122 --------------- 37,904,670 --------------- HEALTH CARE -- 11.8% 825,000 Abbott Laboratories........... 34,443,750 *175,000 Alza Corp. Del................ 4,331,250 190,000 American Home Products Corp........................ 18,430,000 250,000 Bristol-Myers Squibb Company..................... 21,468,750 270,000 Johnson & Johnson............. 23,118,750 475,000 Pfizer, Inc................... 29,925,000 400,000 SmithKline Beecham PLC ADR Unit........................ 22,200,000 775,000 US Healthcare Inc............. 36,037,500 320,000 Warner-Lambert Company........ 31,080,000 --------------- 221,035,000 --------------- INDUSTRIAL MATERIALS -- 5.8% 240,000 Air Products & Chemical Corp........................ 12,660,000 *400,000 Crown Cork & Seal............. 16,700,000 400,000 Dow Chemical.................. 28,150,000 230,000 Dupont EI De Nemours.......... 16,071,250 450,000 International Paper Co........ 17,043,750 700,000 Louisiana Pacific Corp........ 16,975,000 --------------- 107,600,000 --------------- MANUFACTURING -- 4.4% 190,000 Boeing Company................ 14,891,250 800,000 General Electric.............. 57,600,000 305,000 Ingersoll-Rand Company........ 10,713,125 --------------- 83,204,375 --------------- MEDIA & SERVICES -- 7.6% 220,000 Capital Cities/ABC Inc........ 27,142,500 100,000 Dun & Bradstreet Corp......... 6,475,000 450,000 Gannett Co., Inc.............. 27,618,750 613,750 Gaylord Entertainment Class A........................... 17,031,562 450,000 Time Warner Inc............... 17,043,750 1,005,000 Viacom Inc-Class B............ 47,611,875 --------------- 142,923,437 --------------- REAL ESTATE -- 0.9% 400,000 General Growth Properties..... 8,300,000 350,000 Spieker Properties............ 8,793,750 --------------- 17,093,750 --------------- RETAIL -- 7.7% 450,000 Albertson's Inc............... 14,793,750 500,000 Home Depot Inc................ 23,937,500 360,000 May Department Stores Co...... 15,210,000 950,000 McDonalds Corp................ 42,868,750 *325,000 Toys R Us..................... 7,068,750
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 80
MARKET SHARES VALUE - ----------- --------------- COMMON STOCKS -- (CONTINUED) RETAIL -- (CONTINUED) 1,820,000 Wal-Mart...................... $ 40,722,500 --------------- 144,601,250 --------------- SOFTWARE & SERVICES -- 2.5% 165,000 Computer Sciences Corp........ 11,591,250 235,000 First Data Corp............... 15,715,624 *180,000 Microsoft Corp................ 15,795,000 *109,400 Sybase Inc.................... 3,938,400 --------------- 47,040,274 --------------- TRANSPORTATION -- 2.8% *250,000 AMR........................... 18,562,500 725,000 Southwest Airlines............ 16,856,250 255,000 Union Pacific Corp............ 16,830,000 --------------- 52,248,750 --------------- UTILITY -- 4.3% 680,000 AT&T Corp..................... 44,030,000 950,000 MCI Communications............ 24,818,750 52,250 Portugal Telecom S.A. ADR..... 992,750 250,000 Texas Utilities............... 10,281,250 --------------- 80,122,750 --------------- Total common stocks........... $ 1,680,531,972 --------------- --------------- PREFERRED STOCKS -- 2.8% CONSUMER NON-DURABLES -- 1.7% 5,000,000 RJR Nabisco Perferred Equity Redemptive Cumulative Stock....................... 31,875,000 --------------- ENERGY -- 0.6% 191,000 Occidental Petroleum 144A..... 10,409,500 --------------- REAL ESTATE -- 0.5% 347,500 Security Pacific Trust........ 8,513,750 --------------- Total preferred stocks........ $ 50,798,250 --------------- --------------- PRINCIPAL AMOUNT - ----------- CONVERTIBLE CORPORATE BONDS -- 0.7% BUSINESS SERVICES -- 0.3% Empresas ICA Sociedad $12,150,000 5.000% due 03/15/04......... 6,500,250 --------------- FINANCIAL SERVICES -- 0.2% MBL International Finance 3,000,000 3.000% due 11/30/02......... 3,525,000 --------------- PRIVATE PLACEMENT -- 0.2% Autotote Corporation 16,000,000 4.950% due 08/20/01......... 3,765,986 --------------- Total convertible corporate bonds....................... $ 13,791,236 --------------- --------------- SHORT-TERM SECURITIES -- 6.5% $87,770,000 Repurchase Agreement dated 12/29/95 with Aubrey Lanston 5.900% due 01/02/96; maturity amount $87,827,538; (Collateralized by $61,260,000 U.S. Treasury Notes 5.875% to 6.250% due 08/15/98 to 08/31/00 and by $26,450,000 U.S. Treasury Bill 4.980% due 05/30/96)... $ 87,770,000 35,000,000 Repurchase Agreement dated 12/29/95 with Morgan Stanley 6.200% due 01/02/96; maturity amount $35,024,111; (Collateralized by $40,490,000 Federal National Mortgage Association 9.000% due 03/01/25)............... 35,000,000 --------------- Total short-term securities... $ 122,770,000 --------------- ---------------
DIVERSIFICATION OF ASSETS: Total common stocks.......................... 89.5 % $1,680,531,972 Total preferred stocks....................... 2.8 50,798,250 Total convertible corporate bonds............ 0.7 13,791,236 Total short-term securities.................. 6.5 122,770,000 ------ -------------- Total investment in securities **(Identified cost $1,528,375,612)......... 99.5 1,867,891,458 Excess of cash and receivables over liabilities................................ 0.5 8,992,156 ------ -------------- Net assets (Applicable to $3.52702 per share based on 532,144,279 shares outstanding)... 100.0% $1,876,883,614 ------ -------------- ------ -------------- SUMMARY OF SHAREHOLDERS' EQUITY: Capital stock, par value $.10 per share; authorized 800,000,000 shares; outstanding 532,144,279 shares............................................. $ 53,214,428 Capital surplus...................................... 1,403,332,247 Undistributed net realized gain on investments....... 80,821,093 Unrealized appreciation of investments............... 339,515,846 -------------- Net assets, applicable to shares outstanding......... $1,876,883,614 -------------- --------------
* Non-income producing during period. ** Aggregate cost for Federal income tax purposes. 81 HVA MONEY MARKET FUND, INC. STATEMENT OF NET ASSETS DECEMBER 31, 1995
AMORTIZED PRINCIPAL COST AND AMOUNT VALUE - ----------- ------------- COMMERCIAL PAPER -- 78.6% Abbey National North America $ 5,000,000 5.570% due 03/06/96......... $ 4,950,489 5,000,000 5.715% due 01/02/96......... 5,000,000 Air Products & Chemicals 5,000,000 5.385% due 06/21/96......... 4,872,106 American Honda Finance 5,000,000 5.530% due 02/02/96......... 4,975,760 ANZ (Delaware) Inc. 10,000,000 5.670% due 01/05/96 - 02/13/96.................... 9,964,563 Aristar Inc 9,500,000 5.750% due 01/08/96 - 01/16/96.................... 9,485,146 Bass Finance C.I. Ltd. 5,000,000 5.680% due 02/16/96......... 4,964,500 Bausch & Lomb Inc. 5,000,000 5.700% due 01/26/96......... 4,981,000 5,000,000 5.710% due 01/19/96......... 4,986,518 Colgate-Palmolive 5,000,000 5.620% due 03/08/96......... 4,948,483 Corporate Asset Funding Company 10,000,000 5.650% due 02/16/96 - 02/23/96.................... 9,923,882 Dean Witter, Discover Card 9,000,000 5.700% due 01/08/96 - 01/31/96.................... 8,973,242 Eaton Corp. 5,000,000 5.500% due 05/30/96......... 4,886,181 Electronic Data Systems 10,000,000 5.580% due 03/15/96......... 9,886,850 Finova Capital 5,000,000 5.800% due 03/07/96......... 4,947,639 5,000,000 5.940% due 01/26/96......... 4,980,200 General Motors Acceptance Corp. 5,000,000 5.610% due 03/06/96......... 4,950,133 5,500,000 5.700% due 02/16/96......... 5,460,813 General Signal Corp. 5,000,000 5.800% due 02/22/96......... 4,958,917 Goldman Sachs Group Limited Partnership 5,000,000 5.540% due 04/04/96......... 4,928,442 Hanson Finance (UK) 5,000,000 5.640% due 02/28/96......... 4,955,350 5,000,000 5.650% due 02/21/96......... 4,960,764 Merrill Lynch & Co. 10,000,000 5.730% due 01/31/96......... 9,953,842 National Rural Utilities 5,000,000 5.640% due 02/14/96......... 4,966,317 5,000,000 5.650% due 02/20/96......... 4,961,549 NYNEX Corp. 5,000,000 5.720% due 02/07/96......... 4,971,400 5,000,000 5.810% due 02/05/96......... 4,972,564 Pacific Dunlop Holding 5,000,000 5.680% due 02/29/96......... 4,954,244 RTZ America Inc. 10,000,000 5.700% due 01/18/96 - 01/23/96.................... 9,970,708 A H Robins 5,000,000 5.470% due 04/12/96......... 4,923,268 Sharp Electronics Corp. 5,000,000 5.660% due 01/26/96......... 4,981,133 5,000,000 5.710% due 02/09/96......... 4,969,864 Sherwood Medical 5,000,000 5.700% due 02/29/96......... 4,954,083 Spintab 5,000,000 5.570% due 03/18/96......... 4,941,206 5,000,000 5.660% due 01/19/96......... 4,986,636 Svenska Handelsbanken Inc. 5,000,000 5.700% due 02/05/96......... 4,973,083 5,000,000 5.720% due 01/26/96......... 4,980,932 Tambrands Inc. $ 5,000,000 5.590% due 04/26/96......... $ 4,910,715 5,000,000 5.600% due 04/08/96......... 4,924,556 Transamerica Finance Co. 5,000,000 5.500% due 04/15/96......... 4,920,556 5,000,000 5.700% due 01/10/96......... 4,993,667 Westpac Capital Corp. 5,000,000 5.450% due 05/13/96......... 4,900,082 5,000,000 5.500% due 05/13/96......... 4,899,166 Whirlpool Corp. 10,000,000 5.760% due 01/17/96......... 9,976,000 Zeneca, Inc. D/N 10,000,000 5.720% due 01/11/96......... 9,985,700 ------------- Total commercial paper........ $ 266,912,249 ------------- ------------- U.S. TREASURY NOTES -- 1.4% U.S. Treasury Notes 5,000,000 6.250% due 08/31/96......... 5,010,394 ------------- REPURCHASE AGREEMENT -- 16.3% 55,210,000 Repurchase agreement dated 12/29/95 with Salomon Brothers 5.900% due 01/02/96; maturity amount $55,246,193; (Collateralized by $57,575,000 U.S. Treasury Bills 4.930% due 06/06/96)................... 55,210,000 ------------- Total short-term securities... $ 327,132,643 ------------- ------------- NON-CONVERTIBLE CORPORATE NOTES -- 10.6% American Honda Finance $ 5,000,000 5.875% due 03/01/96......... 5,000,000 Associate Corp. of America 5,500,000 4.940% due 04/02/96......... 5,486,295 Avery Dennison Medium Term Note 4,000,000 8.400% due 04/15/96......... 4,028,598 Bell Atlantic 5,000,000 5.500% due 06/13/96......... 4,988,740 General Electric Capital 5,000,000 5.970% due 08/21/96......... 4,999,160 Grand Metropolitan Investments 6,000,000 8.125% due 08/15/96......... 6,074,618 U.S. Leasing International Inc. 5,500,000 8.750% due 05/01/96......... 5,549,399 ------------- Total non-convertible corporate notes............. $ 36,126,810 ------------- -------------
DIVERSIFICATION OF ASSETS: Total short-term securities.................. 96.3 % $327,132,643 Total non-convertible corporate notes........ 10.6 36,126,810 ------ ------------ Total investment in securities *(Identified cost $363,259,453)............ 106.9 363,259,453 Excess of liabilities over cash and receivables................................ (6.9) (23,550,870) ------ ------------ Net assets (Applicable to $1.00 per share based on 339,708,583 shares outstanding)... 100.0% $339,708,583 ------ ------------ ------ ------------ SUMMARY OF SHAREHOLDERS' EQUITY: Capital stock, par value $.10 per share; authorized 800,000,000 shares; outstanding 339,708,583 shares......................... $ 33,970,858 Capital surplus.............................. 305,737,725 ------------ Net assets, applicable to shares outstanding......... $339,708,583 ------------ ------------
* Aggregate cost for Federal income tax purposes. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 82 HARTFORD ADVISERS FUND, INC. STATEMENT OF NET ASSETS DECEMBER 31, 1995
MARKET SHARES VALUE - ----------- -------------- COMMON STOCKS -- 58.6% COMMUNICATION EQUIPMENT -- 1.1% *70,000 Cisco Systems Inc............. $ 5,223,750 *200,000 DSC Communications............ 7,375,000 395,000 Motorola Inc.................. 22,515,000 *250,000 3 Com Corp.................... 11,656,250 -------------- 46,770,000 -------------- COMPUTERS & OFFICE EQUIPMENT -- 2.0% *125,000 Compaq Computer............... 6,000,000 440,000 International Business Machine Corp........................ 40,370,000 280,000 Xerox......................... 38,360,000 -------------- 84,730,000 -------------- CONSUMER DURABLES -- 0.6% 0.25 Chrysler Corp................. 14 500,000 Ford Motor Corp............... 14,500,017 250,000 General Motors Class E........ 13,000,000 -------------- 27,500,031 -------------- CONSUMER NON-DURABLES -- 7.3% 405,000 Anheuser Busch Cos. Inc....... 27,084,375 320,000 Colgate Palmolive Co.......... 22,480,000 250,000 Duracell International Inc.... 12,937,500 500,000 General Mills Company......... 28,875,000 400,000 Kimberly Clark Corp........... 33,100,000 109,400 Estee Lauder Co.-Class A...... 3,815,325 710,000 Pepsico Inc................... 39,671,250 650,000 Philip Morris................. 58,825,000 580,000 Proctor and Gamble............ 48,140,000 1,218,000 Sara Lee Corp................. 38,823,750 -------------- 313,752,200 -------------- CONSUMER SERVICES -- 0.7% *253,500 Autotote...................... 446,794 *700,000 Circus Circus Enterprises..... 19,512,500 200,000 Service Corp. International... 8,800,000 -------------- 28,759,294 -------------- ENERGY AND SERVICES -- 4.6% 575,000 Amoco Corporation............. 41,328,125 684,200 Burlington Resources.......... 26,854,850 765,000 Exxon......................... 61,295,625 79,400 Hong Kong Telecom Ltd......... 1,409,350 500,000 Schlumberger Ltd.............. 34,625,000 558,664 Total S.A. ADR................ 18,994,576 375,000 Unocal Corp................... 10,921,875 -------------- 195,429,401 -------------- FINANCIAL SERVICES -- 9.5% 900,000 Allstate Corp................. 37,012,500 850,000 American Express Co........... 35,168,750 300,000 American International Group....................... 27,750,000 260,000 Bank of New York Co........... 12,675,000 800,000 Citicorp...................... 53,800,000 67,500 Franklin Resources Inc........ 3,400,313 300,000 Greenpoint Financial.......... 8,025,000 400,000 Marsh and McLennan Cos., Inc......................... 35,500,000 600,000 Merrill Lynch & Co. Inc....... 30,600,000 440,000 J.P. Morgan................... 35,310,000 410,000 Nationsbank Corp.............. 28,546,250 775,000 Salomon Inc................... 27,512,500 FINANCIAL SERVICES -- (CONTINUED) 450,000 State Street Boston Corp...... $ 20,250,000 875,000 Travelers Group Inc........... 55,015,625 -------------- 410,565,938 -------------- FOREIGN STOCKS - JAPAN -- 1.3% 300,000 Eisai Co. Ltd................. 5,249,928 300,000 Fuji Bank Ltd................. 6,613,168 450,000 Matsushita Electric Co........ 7,309,291 450,000 Nomura Securities............. 9,789,230 285,000 Sankyo........................ 6,392,729 300,000 Sanwa Bank Ltd................ 6,091,076 280,000 Takeda Chem Inds Ltd.......... 4,602,147 450,000 Toyota Motor Corp............. 9,528,183 -------------- 55,575,752 -------------- HEALTH CARE -- 7.6% 1,175,000 Abbott Laboratories........... 49,056,250 *200,000 Alza Corp. Del................ 4,950,000 250,000 American Home Products Corp........................ 24,250,000 360,000 Bristol-Myers Squibb Company..................... 30,915,000 440,000 Johnson & Johnson............. 37,675,000 650,000 Pfizer, Inc................... 40,950,000 625,000 SmithKline Beecham PLC ADR Unit........................ 34,687,500 1,150,000 US Healthcare Inc............. 53,475,000 480,000 Warner-Lambert Company........ 46,620,000 -------------- 322,578,750 -------------- INDUSTRIAL MATERIALS -- 3.8% 360,000 Air Products & Chemical Corp........................ 18,990,000 *550,000 Crown Cork & Seal............. 22,962,500 590,000 Dow Chemical.................. 41,521,250 400,000 Dupont EI De Nemours.......... 27,950,000 710,000 International Paper Co........ 26,891,250 1,000,000 Louisiana Pacific Corp........ 24,250,000 -------------- 162,565,000 -------------- MANUFACTURING -- 2.9% 235,000 Boeing Company................ 18,418,125 1,200,000 General Electric.............. 86,400,000 525,000 Ingersoll-Rand Company........ 18,440,625 -------------- 123,258,750 -------------- MEDIA & SERVICES -- 5.0% 340,000 Capital Cities/ABC Inc........ 41,947,500 100,000 Dun & Bradstreet Corp......... 6,475,000 685,000 Gannett Co., Inc.............. 42,041,875 886,750 Gaylord Entertainment Class A........................... 24,607,312 700,000 Time Warner Inc............... 26,512,500 1,500,000 Viacom Inc.-Class B........... 71,062,500 -------------- 212,646,687 -------------- REAL ESTATE -- 0.6% 600,000 General Growth Properties..... 12,450,000 500,000 Spieker Properties............ 12,562,500 -------------- 25,012,500 -------------- RETAIL -- 5.2% 1,000,000 Albertson's Inc............... 32,875,000 700,000 Home Depot Inc................ 33,512,500 600,000 May Department Stores Co...... 25,350,000 1,375,000 McDonalds Corp................ 62,046,875 *400,000 Toys R Us..................... 8,700,000
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 83 HARTFORD ADVISERS FUND, INC. STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 1995
MARKET SHARES VALUE - ----------- -------------- COMMON STOCKS -- (CONTINUED) RETAIL -- (CONTINUED) 2,600,000 Wal-Mart...................... $ 58,175,000 -------------- 220,659,375 -------------- SOFTWARE & SERVICES -- 1.7% 285,000 Computer Sciences Corp........ 20,021,250 385,000 First Data Corp............... 25,746,875 *250,000 Microsoft Corp................ 21,937,500 *109,300 Sybase Inc.................... 3,934,800 -------------- 71,640,425 -------------- TRANSPORTATION -- 1.9% *390,000 AMR........................... 28,957,500 1,000,000 Southwest Airlines............ 23,250,000 445,000 Union Pacific Corp............ 29,370,000 -------------- 81,577,500 -------------- UTILITIES -- 2.8% 980,000 AT&T Corp..................... 63,455,000 1,375,000 MCI Communications............ 35,921,875 80,500 Portugal Telecom S.A.......... 1,529,500 400,000 Texas Utilities............... 16,450,000 -------------- 117,356,375 -------------- Total common stocks........... $2,500,377,978 -------------- -------------- PREFERRED STOCKS -- 1.9% CONSUMER NON-DURABLES -- 1.0% 7,000,000 RJR Nabisco Preferred Equity Redemptive Cumulative Stock....................... 44,625,000 -------------- ENERGY -- 0.5% 397,200 Occidental Petroleum 144A..... 21,647,400 -------------- REAL ESTATE -- 0.4% 591,900 Security Pacific Trust........ 14,501,550 -------------- Total preferred stocks........ $ 80,773,950 -------------- -------------- PRINCIPAL AMOUNT - ----------- U.S. TREASURIES & AGENCIES -- 28.5% U.S. TREASURY BONDS -- 6.4% $100,000,000 7.250% due 05/15/16......... 114,187,500 135,000,000 7.500% due 11/15/16......... 158,371,875 -------------- 272,559,375 -------------- U.S. TREASURY NOTES -- 19.6% 150,000,000 6.250% due 05/31/00......... 155,109,300 200,000,000 6.375% due 08/15/02......... 210,125,000 100,000,000 6.500% due 08/15/97......... 102,000,000 225,000,000 7.500% due 12/31/99 - 02/15/05.................... 249,632,725 110,000,000 7.750% due 12/31/99......... 119,418,750 -------------- 836,285,775 -------------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 2.3% 94,549,939 8.000% due 03/15/23 - 04/15/25.................... 98,485,139 -------------- FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 0.1% 572,662 6.000% due 02/01/20......... 565,685 2,445,379 8.750% due 08/25/21......... 2,565,618 U.S. TREASURIES & AGENCIES -- (CONTINUED) FEDERAL NATIONAL MORTGAGE ASSOCIATION (CONTINUED) $ 2,069,997 9.000% due 09/25/00......... $ 2,072,791 -------------- 5,204,094 -------------- Total U.S. treasuries & agencies.................... $1,212,534,383 -------------- -------------- CONVERTIBLE CORPORATE BONDS -- 0.4% BUSINESS SERVICES -- 0.2% Empresas ICA Sociedad 15,400,000 5.000% due 03/15/04......... 8,239,000 -------------- FINANCIAL SERVICES -- 0.1% MBL International Finance 4,500,000 3.000% due 11/30/02......... 5,287,500 -------------- PRIVATE PLACEMENTS -- 0.1% Autotote Corporation 24,000,000 4.950% due 08/20/01......... 5,648,978 -------------- Total convertible corporate bonds....................... $ 19,175,478 -------------- -------------- NON-CONVERTIBLE CORPORATE BONDS -- 5.9% ASSET-BACKED -- 0.1% Discover Card 92-A 2,083,333 5.500% due 05/16/98......... 2,079,417 General Motors Acceptance Corp. 92-D Grantor Trust 230,652 5.550% due 05/15/97......... 230,232 -------------- 2,309,649 -------------- FEDERAL AGENCIES -- 0.1% Resolution Trust Corp. 91-6 E 1,307,875 11.626% due 05/25/24........ 1,377,840 -------------- FINANCIAL SERVICES -- 4.3% Bank of Boston Corp. 10,000,000 6.625% due 02/01/04......... 10,167,920 CIT Group Holdings 15,000,000 6.750% due 04/30/98......... 15,394,365 Chemical Banking Corp. 10,000,000 8.500% due 02/15/02......... 11,212,490 First Interstate Bank 12,000,000 9.000% due 11/15/04......... 13,198,884 First National Bank of Boston 5,000,000 8.000% due 09/15/04......... 5,556,390 Ford Motor Credit Company 10,000,000 5.625% due 12/15/98......... 9,987,440 General Motors Acceptance Corp. 15,000,000 5.625% due 02/01/99......... 14,958,750 Great Western Financial 10,000,000 8.625% due 12/01/98......... 10,662,730 Home Savings America 15,000,000 6.000% due 11/01/00......... 14,984,550 London Insurance Group 15,000,000 6.875% due 09/15/05......... 15,512,145 Merrill Lynch Mortgage Investors 251,918 6.850% due 04/15/12......... 251,780 Mount Sinai Med MBIA 20,000,000 6.000% due 07/01/03......... 19,775,000 National Bank of Detroit 5,000,000 8.250% due 11/01/24......... 5,855,075 Society National Bank 15,000,000 6.500% due 04/25/97......... 15,189,150
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 84 PRINCIPAL MARKET AMOUNT VALUE - ----------- ------------- NON-CONVERTIBLE CORPORATE BONDS -- (CONTINUED) FINANCIAL SERVICES -- (CONTINUED) Travelers Group 144A $10,000,000 6.250% due 12/01/05......... $ 9,981,950 World Savings & Loan Association 12,000,000 7.625% due 02/18/97......... 12,278,640 -------------- 184,967,259 -------------- FOREIGN GOVERNMENT -- THAILAND -- 0.2% Thailand Kingdom 10,000,000 5.880% due 09/30/00......... 9,962,100 -------------- INDUSTRIAL -- 0.7% Hertz Corp. 10,000,000 6.000% due 02/01/01......... 9,992,340 Southern California Gas Co. 10,000,000 5.750% due 11/15/03......... 9,719,930 Zeneca Group PLC 10,000,000 6.300% due 06/15/03......... 10,162,360 -------------- 29,874,630 -------------- RETAIL -- 0.2% JC Penney 9,500,000 6.000% due 05/01/06......... 9,305,136 -------------- UTILITY -- 0.3% Pacific Gas & Electric 11,000,000 7.875% due 03/01/02......... 11,973,951 -------------- Total non-covertible corporate bonds....................... $ 249,770,565 -------------- -------------- PRINCIPAL AMOUNT - ----------- SHORT-TERM SECURITIES -- 3.9% $85,050,000 Repurchase Agreement dated 12/29/95 with Aubrey Lanston 5.875% due 01/02/96; maturity amount $85,105,519; (Collateralized by $89,345,000 U.S. Treasury Bills 4.990% due 07/25/96)................... 85,050,000 SHORT-TERM SECURITIES -- (CONTINUED) $81,000,000 Repurchase Agreement dated 12/29/95 with Morgan Stanley 6.200% due 01/02/96; maturity amount $81,055,800; (Collateralized by $91,092,000 Federal National Mortgage Association 9.000% due 03/01/25)............... $ 81,000,000 -------------- Total short-term securities... 166,050,000 -------------- --------------
DIVERSIFICATION OF ASSETS: Total common stocks.......................... 58.6% $2,500,377,978 Total preferred stocks....................... 1.9 80,773,950 Total U.S. treasuries & agencies............. 28.5 1,212,534,383 Total convertible corporate bonds............ 0.4 19,175,478 Total non-convertible corporate bonds........ 5.9 249,770,565 Total short-term securities.................. 3.9 166,050,000 ------ -------------- Total investment in securities **(Identified cost $3,637,244,031)......... 99.2 4,228,682,354 Excess cash and receivables over liabilities................................ 0.8 34,086,395 ------ -------------- Net assets (Applicable to $1.95844 per share based on 2,176,614,093 shares outstanding)............................... 100.0% $4,262,768,749 ------ -------------- ------ -------------- SUMMARY OF SHAREHOLDERS' EQUITY: Capital stock, par value $.10 per share; authorized 3,000,000,000 shares; outstanding 2,176,614,093 shares............................................. 217,661,408 Capital surplus...................................... 3,356,384,899 Undistributed net realized gain on investments....... 97,284,119 Unrealized appreciation of investments............... 591,438,323 -------------- Net assets, applicable to shares outstanding......... $4,262,768,749 -------------- --------------
* Non-income producing during period. ** Aggregate cost for Federal income tax purposes. 85 HARTFORD U.S. GOVERNMENT MONEY MARKET FUND, INC. STATEMENT OF NET ASSETS DECEMBER 31, 1995
AMORTIZED PRINCIPAL COST AND AMOUNT VALUE - ----------- ------------- U.S. GOVERNMENT & GOVERNMENT AGENCIES -- 85.5% Federal Farm Credit Bank $ 500,000 5.430% due 03/20/96......... $ 494,118 1,000,000 5.450% due 03/11/96......... 989,554 500,000 5.560% due 02/01/96......... 497,683 500,000 5.570% due 01/09/96......... 499,458 Federal Home Loan Banks 500,000 5.430% due 03/12/96......... 494,721 500,000 5.500% due 02/28/96......... 495,646 1,500,000 5.550% due 02/29/96 - 03/22/96.................... 1,483,195 500,000 5.570% due 01/25/96......... 498,221 235,000 5.600% due 01/02/96......... 235,000 Federal National Mortgage Association 500,000 5.280% due 04/04/96......... 493,180 450,000 5.580% due 02/09/96......... 447,350 1,000,000 5.670% due 01/19/96......... 997,323 U.S. Treasury Bills 1,000,000 5.250% due 05/02/96......... 982,354 ------------- 8,607,803 ------------- REPURCHASE AGREEMENT -- 12.0% 1,208,000 Interest in $24,574,000 joint repurchase agreement dated 12/29/95 with Fleet Bank 5.850% due 01/02/96; maturity amount $1,208,785; (Collateralized by $24,574,000 U.S. Treasury Note 5.125% due 12/31/98) 1,208,000 ------------- Total short-term securities... $ 9,815,803 ------------- -------------
DIVERSIFICATION OF ASSETS: Total investment in short-term securities *(Identified cost $9,815,803).............. 97.5% $ 9,815,803 Excess of cash and receivables over liabilities................................ 2.5 254,464 ------ ------------ Net assets (Applicable to $1.00 per share based on 10,070,267 shares outstanding).... 100.0% $ 10,070,267 ------ ------------ ------ ------------ SUMMARY OF SHAREHOLDERS' EQUITY: Common stock, par value $.10 per share; authorized 100,000,000 shares; outstanding 10,070,267 shares............................................. $ 1,007,027 Capital surplus...................................... 9,063,240 ------------ Net assets, applicable to shares outstanding......... $ 10,070,267 ------------ ------------
* Aggregate cost for Federal income tax purposes. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 86 HARTFORD CAPITAL APPRECIATION FUND, INC. STATEMENT OF NET ASSETS DECEMBER 31, 1995
MARKET SHARES VALUE - ----------- -------------- COMMON STOCKS -- 84.6% BUSINESS SERVICES -- 1.9% *165,000 Catalytica Inc................ $ 721,875 400,000 Ionics Inc.................... 17,400,000 200,000 Manpower Inc.................. 5,625,000 149,000 Pittston Services Group....... 4,674,875 320,300 Tetra Technologies............ 5,565,213 250,000 WMX Technologies Inc.......... 7,468,750 -------------- 41,455,713 -------------- COMMUNICATION EQUIPMENT -- 4.4% 465,000 Bay Networks.................. 19,123,125 *150,000 DSC Communications............ 5,531,250 510,000 General Instrument............ 11,921,250 240,000 Globalstar Telecom............ 9,060,000 185,000 Northern Telecom Ltd.......... 7,955,000 *500,000 Oak Industries Inc............ 9,375,000 *280,000 Picturetel Corp............... 12,075,000 *415,000 3 Com Corp.................... 19,349,375 -------------- 94,390,000 -------------- COMPUTERS & OFFICE EQUIPMENT -- 3.6% 250,000 Danka Business Systems PLC.... 9,250,000 *190,000 Digital Equipment Corp........ 12,183,750 480,600 Plaintree Systems Inc......... 2,883,600 645,000 Sensormatic Electronic........ 11,206,875 495,000 Stratus Computer.............. 17,139,375 510,000 Symbol Technologies........... 20,145,000 200,000 3d Systems Corp............... 4,750,000 -------------- 77,558,600 -------------- CONSUMER DURABLES -- 1.0% 180,570 Chrysler Corp................. 9,999,064 395,000 International Imaging Materials................... 9,973,750 230,000 Lojack Corporation............ 2,558,750 -------------- 22,531,564 -------------- CONSUMER NON-DURABLES -- 2.4% 290,800 Baesa ADR..................... 5,997,750 215,000 Duracraft Corp................ 5,401,875 570,000 Fort Howard Corp.............. 12,825,000 700,000 Interstate Bakeries........... 15,662,500 300,000 Odwalla Inc................... 4,950,000 280,000 Universal Corp................ 6,825,000 -------------- 51,662,125 -------------- ELECTRONICS -- 4.7% 360,000 Augat Inc..................... 6,165,000 *310,000 Cirrus Logic Inc.............. 6,122,500 620,000 Cognex Corp................... 21,545,000 300,000 Credence Systems Corp......... 6,862,500 *400,000 Cyrix Corp.................... 9,200,000 468,750 Molex Inc..................... 14,355,469 555,000 Philips NV ADR................ 19,910,625 220,000 Planar Systems Inc............ 4,207,500 410,000 Silicon Valley Group.......... 10,352,500 115,000 Vishay Intertechnology........ 3,622,500 -------------- 102,343,594 -------------- ENERGY & SERVICES -- 6.0% 321,124 Coflexip ADR.................. 6,061,215 799,800 Diamond Offshore.............. 26,993,250 350,000 Ensco International Inc....... 7,262,500 ENERGY & SERVICES -- (CONTINUED) $ 336,400 Energy Ventures............... $ 8,494,100 300,000 Input Output Inc.............. 17,325,000 300,000 Noble Affiliates Inc.......... 8,962,500 297,000 Pogo Producing Company........ 8,390,250 *586,000 Rowan Cos..................... 5,786,750 250,000 Seagull Energy................ 5,562,500 300,000 USX-Marathon Group............ 5,850,000 *300,000 Varco International........... 3,600,000 300,000 Vastar Resources Inc.......... 9,525,000 720,000 YPF S.A. Sponsored ADR........ 15,570,000 -------------- 129,383,065 -------------- FINANCIAL SERVICES -- 11.0% 400,000 Ace Ltd....................... 15,900,000 431,000 Allstate Corp................. 17,724,875 153,400 Ambac Inc..................... 7,190,625 255,000 Charter One Financial......... 7,809,375 150,000 Chubb Corp.................... 14,512,500 700,000 Dime Bancorp Inc.............. 8,137,500 200,000 First Bank System Inc......... 9,925,000 650,000 Greenpoint Financial Corp..... 17,387,500 392,700 Imperial Credit Industries.... 8,541,225 420,000 Legg Mason Inc................ 11,550,000 200,070 Long Island Bancorp........... 5,276,846 442,300 Morgan Stanley Group.......... 35,660,438 600,000 North American Mortgage Company..................... 12,750,000 700,000 Peoples Bank.................. 13,300,000 60,000 Pioneer Group Inc............. 1,635,000 376,100 Prepaid Legal Services........ 3,902,037 273,400 Prudential Reinsurance Hldgs....................... 6,390,725 424,400 Transatlantic Holding Inc..... 31,140,350 300,000 Washington Mutual............. 8,662,500 -------------- 237,396,496 -------------- FOREIGN SECURITIES -- 1.5% 300,000 Talisman Energy............... 6,073,653 229,050 Transocean As................. 3,955,990 209,902 Hafslund Nyco A-free.......... 5,479,303 409,300 Usinor Sacilor................ 5,349,290 700,000 Eisai Co. Ltd................. 12,249,832 -------------- 33,108,068 -------------- HEALTHCARE -- 12.5% 290,000 Alpharma Inc.--Class A........ 7,576,250 *275,000 Apria Healthcare.............. 7,768,750 750,000 Bergen Brunswig Corp. Class A........................... 18,656,250 600,000 Beverly Enterprises........... 6,375,000 *1,050,000 Biomet........................ 18,768,750 328,100 Datascope..................... 7,874,400 145,000 Genetics Institute............ 7,757,500 *348,750 Grancare Inc.................. 5,056,875 *450,000 Haemonetics................... 7,987,500 119,458 Hafslund Nycomed--Class B ADR......................... 3,135,772 390,500 Idx Systems Corp.............. 13,569,875 150,000 Immunex....................... 2,475,000 369,700 Isolyser Company Inc.......... 5,175,800 391,700 Kinetic Concepts Inc.......... 4,700,400 350,000 Loewen Group Inc.............. 8,859,375 625,000 Magellan Health Services Inc......................... 15,000,000 440,000 Medisense..................... 13,915,000 900,000 Perrigo....................... 10,687,500 799,600 Rhone-Poulenc SA.............. 17,091,450
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 87 HARTFORD CAPITAL APPRECIATION FUND, INC. STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 1995
MARKET SHARES VALUE - ----------- -------------- COMMON STOCKS -- (CONTINUED) HEALTHCARE -- (CONTINUED) 511,000 Rhone-Poulenc Rorer........... $ 27,210,750 400,000 Sola International Inc........ 10,100,000 445,000 Value Health Inc.............. 12,237,500 400,000 Vencor Inc.................... 13,000,000 *160,000 Vivus......................... 5,000,000 300,000 Zeneca Group ADR.............. 17,512,500 -------------- 267,492,197 -------------- INDUSTRIAL MATERIAL -- 7.7% 423,000 Abitibi Price Inc............. 6,133,500 500,000 Alcan Aluminum Ltd............ 15,562,500 1,400,000 Algoma Steel Inc.............. 5,250,000 305,000 Beazer Homes USA Inc.......... 6,290,625 350,000 British Steel PLC-ADR......... 8,968,750 125,900 Commonwealth Aluminum......... 1,951,450 314,100 Georgia-Pacific Corp.......... 21,555,112 270,000 Morton International.......... 9,686,250 350,000 Nova Corp..................... 2,800,000 280,000 Owens Corning Fiberglass Corp........................ 12,565,000 125,000 Phelps Dodge Corp............. 7,781,250 975,800 Precision Castparts Corp...... 38,788,050 1,480,000 Repap Enterprises............. 6,567,500 287,500 Southern Energy Homes Inc..... 5,031,250 600,000 Uniroyal Chemical............. 4,950,000 500,000 Wellman Inc................... 11,375,000 -------------- 165,256,237 -------------- MANUFACTURING -- 4.1% 265,000 Boeing Company................ 20,769,375 *137,600 MSC Industrial Direct Class A........................... 3,784,000 400,000 Measurex Corp................. 11,300,000 305,000 Northrop Grumman Corp......... 19,520,000 84,800 SPS Technologies Inc.......... 4,526,200 300,000 Wabash National Corp.......... 6,675,000 302,000 Watkins-Johnson Company....... 13,212,500 200,000 York International Corp....... 9,400,000 -------------- 89,187,075 -------------- MEDIA & SERVICES -- 4.5% 75,000 Comcast UK Cable.............. 937,500 150,000 Lodgenet Entertainment Corp........................ 1,425,000 891,700 Mobil Media Corp.............. 19,840,325 200,000 Rogers Cantel Mobile Communications.............. 5,300,000 470,000 Royal Caribbean............... 10,340,000 *201,400 SFX Broadcasting Inc Class A........................... 6,092,350 *1,120,000 Tele-Communications, Inc.--Class A............... 22,260,000 469,999 Viacom Inc--Class B........... 22,266,203 *292,500 Young Broadcasting............ 8,263,125 -------------- 96,724,503 -------------- REAL ESTATE -- 1.3% 300,000 Avalon Properties Inc......... 6,450,000 246,500 Felcor Suite Hotels Inc....... 6,840,375 200,000 Liberty Property Trust........ 4,150,000 130,000 Oasis Residential............. 2,957,500 175,000 Saul Centers Inc.............. 2,384,375 150,000 Starwood Lodging Trust........ 4,462,500 -------------- 27,244,750 -------------- RETAIL -- 7.8% 300,000 Bed & Bath Beyond Inc......... 11,643,750 655,000 Cheesecake Factory............ 14,082,500 RETAIL -- (CONTINUED) 336,900 Eckerd Corp................... $ 15,034,163 435,000 Federated Department Store.... 11,962,500 200,000 Fila Holding SPA.............. 9,100,000 355,000 The Gap, Inc.................. 14,910,000 *217,300 Good Guys Inc................. 1,955,700 505,000 Gymboree Corp................. 10,415,625 240,000 Hollywood Entertainment Corp........................ 2,010,000 671,700 Landry's Seafood Restaurants................. 11,460,881 345,000 Mercantile Stores, Inc........ 15,956,250 310,000 Petsmart Inc.................. 9,610,000 258,500 Red Lion Hotels Inc........... 4,523,750 470,000 Sotheby's Holdings--Class A... 6,697,500 510,000 Sports and Recreation......... 3,633,750 245,700 The Sports Authority Inc...... 5,006,137 536,400 Starbucks Coffee.............. 11,264,400 384,500 Urban Outfitters Inc.......... 8,939,625 -------------- 168,206,531 -------------- SOFTWARE & SERVICES -- 5.0% *600,000 Acclaim Entertainment Inc..... 7,425,000 *127,500 Avant Corp.................... 2,454,375 *525,000 BMC Software Inc.............. 22,443,750 *473,900 Compuware Corp................ 8,767,150 277,609 First Data Corp............... 18,565,102 *650,000 Intergraph Corp............... 10,237,500 *281,100 Policy Management Systems..... 13,387,388 *155,000 7th Level Inc................. 2,170,000 *466,000 Sybase Inc.................... 16,776,000 *154,400 Synopsis...................... 5,867,200 -------------- 108,093,465 -------------- TRANSPORTATION -- 4.8% *340,000 AMR........................... 25,245,000 1,000,000 America West Airlines......... 17,000,000 300,000 Landstar System Inc........... 8,025,000 *460,000 M.S. Carriers................. 9,200,000 269,000 Qantas Air ADR 144A........... 4,472,125 300,000 Railtex....................... 6,300,000 340,000 Skywest Inc................... 4,377,500 350,000 Swift Transportation.......... 5,337,500 587,700 Transportation-Marine......... 4,407,750 410,000 Werner Enterprises, Inc....... 8,302,500 375,000 Stolt Nielson................. 10,828,125 -------------- 103,495,500 -------------- UTILITIES -- 0.4% 700,000 Petersburg Long Distance Inc......................... 3,325,000 300,000 Portugal Telecom S.A. ADR..... 5,700,000 -------------- 9,025,000 -------------- Total common stocks........... $1,824,554,483 -------------- CONVERTIBLE PREFERRED STOCKS -- 2.5% BUSINESS SERVICES -- 0.3% 215,000 Technip ADS 144A.............. 7,407,911 -------------- CONSUMER DURABLE -- 0.6% 1,364,400 Noble Drilling Corp........... 12,279,600 -------------- CONSUMER NON-DURABLES -- 0.5% 1,750,000 RJR Nabisco Preferred Equity Redemptive Cumulative Stock....................... 11,156,250 --------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 88
MARKET SHARES VALUE - ----------- -------------- CONVERTIBLE PREFERRED STOCKS -- (CONTINUED) FINANCIAL SERVICES -- 0.3% 160,000 Glendale Federal.............. 7,240,000 -------------- MANUFACTURING -- 0.8% 1,100,000 Cooper Industries............. 15,125,000 -------------- Total convertible preferred stocks...................... $ 53,208,761 -------------- -------------- CONVERTIBLE CORPORATE BONDS -- 0.7% CONSUMER DURABLES -- 0.3% 3,765,000 Rohr Inc. 7.750% due 05/15/04......... 5,647,500 -------------- PRIVATE PLACEMENT -- 0.4% 8,000,000 Planet Hollywood 10.000% due 08/22/00........ 10,435,920 -------------- Total convertible corporate bonds....................... $ 16,083,420 -------------- -------------- NON-CONVERTIBLE PREFERRED STOCK -- 0.8% CONSUMER DURABLES 450,000 Nokia Preferred ADS........... $ 17,493,750 -------------- -------------- WARRANTS --0.1% *905,200 Nordic American Tanker........ $ 3,168,200 -------------- -------------- PRINCIPAL AMOUNT - ----------- SHORT-TERM SECURITIES -- 12.1% $ 6,960,000 U.S. Treasury Bill 5.390% due 12/12/96......... 6,623,498 40,000,000 Repurchase Agreement dated 12/29/95 with Morgan Stanley 6.200% due 01/02/96 maturity amount $40,027,556; (Collateralized by $15,239,000 Federal National Mortgage Association 8.000% due 06/01/07 and $39,010,000 Federal National Mortgage Assocaition 9.000% due 04/01/25)................... 40,000,000 $55,065,000 Repurchase Agreement dated 12/29/95 with J.P. Morgan 5.800% due 01/02/96 maturity amount $55,100,486; (Collateralized by $34,327,000 U.S. Treasury Bond 11.250% due 02/15/15).. $ 55,065,000 160,000,000 Repurchase Agreement dated 12/29/95 with Swiss Bank Corp 5.850% due 01/02/96 maturity amount $160,104,000; (Collateralized by $114,765,000 U.S. Treasury Bonds 7.250% to 11.250% due 02/15/15 - 05/15/16)........ 160,000,000 -------------- Total short-term securities... $ 261,688,498 -------------- --------------
DIVERSIFICATION OF ASSETS: Total common stocks.......................... 84.6% $1,824,554,483 Total convertible preferred stocks........... 2.5 53,208,761 Total convertible corporate bonds............ 0.7 16,083,420 Total non-convertible preferred stock........ 0.8 17,493,750 Total warrants............................... 0.1 3,168,200 Total short-term securities.................. 12.1 261,688,498 ------ -------------- Total investment in securities **(Identified cost $1,910,161,838)......... 100.8% 2,176,197,112 Excess of liabilities over cash and receivables................................ (0.8) (18,305,409) ------ -------------- Net assets (Applicable to $3.48966 per share based on 618,366,580 shares outstanding)... 100.0% $2,157,891,703 ------ -------------- ------ -------------- SUMMARY OF SHAREHOLDERS' EQUITY: Capital stock, par value $.10 per share; authorized 800,000,000 shares; outstanding 618,366,580 shares............................................. $ 61,836,658 Capital surplus...................................... 1,685,944,946 Undistributed net realized gain on investments....... 145,639,842 ***Unrealized (loss) on futures contracts............ (1,867,317) Unrealized appreciation of investments............... 266,035,274 Unrealized appreciation on forward currency contracts.......................................... 302,300 -------------- Net assets, applicable to shares outstanding......... $2,157,891,703 -------------- -------------- * Non-income producing during period. ** Aggregate cost for Federal income tax purposes. *** The Fund has 400 Standard & Poor's 500 March 1996 futures contracts open at December 29, 1996. These contracts have a value of $123,690,000.
FORWARD CURRENCY CONTRACTS -- NOTE 2 -- OUTSTANDING AT DECEMBER 31, 1995
UNREALIZED TOTAL AGGREGATE DELIVERY APPRECIATION/ DESCRIPTION VALUE FACE VALUE DATE (DEPRECIATION) - ------------------------------ ---------- ---------- --------- ------------- Dutch Guilders (Sell) $11,697,700 $12,000,000 05/20/96 $ 302,300
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 89 HARTFORD MORTGAGE SECURITIES FUND, INC. STATEMENT OF NET ASSETS DECEMBER 31, 1995
PRINCIPAL MARKET AMOUNT VALUE - ----------- ------------- LONG-TERM BONDS -- 99.0% FEDERAL AGENCIES COLLATERALIZED MORTGAGE OBLIGATION -- 5.9% Federal Home Loan Mortgage Corporation $ 5,000,000 6.500% due 03/15/23......... $ 5,058,000 1,532,535 8.100% due 12/15/04......... 1,551,600 ------------- 6,609,600 ------------- Federal National Mortgage Association 1,054,049 7.950% due 03/25/20......... 1,066,118 5,577,430 8.500% due 03/25/19 - 06/25/19.................... 5,677,234 3,315,352 8.750% due 02/25/18......... 3,340,615 749,343 9.000% due 01/25/17 - 03/25/19.................... 748,582 669,199 9.250% due 12/25/03......... 672,679 1,194,178 11.000% due 04/01/09........ 1,311,645 ------------- 12,816,873 ------------- FEDERAL AGENCIES MORTGAGE PASS-THROUGHS -- 71.0% Federal Home Loan Mortgage Corp. 13,918,718 6.500% due 02/01/09 - 06/01/24.................... 13,851,562 22,903,536 7.000% due 12/01/10 - 12/01/25.................... 23,140,875 19,644,019 7.500% due 01/01/24 - 12/01/25.................... 20,141,394 7,709,781 8.000% due 02/01/13 - 11/01/24.................... 7,986,854 7,783,151 8.500% due 07/01/01 - 05/01/25.................... 8,086,242 7,528,796 9.000% due 10/15/01 - 10/01/06.................... 7,884,848 8,713,412 9.500% due 11/01/08......... 9,256,170 4,275,027 10.000% due 09/01/05 - 11/01/20.................... 4,671,737 ------------- 95,019,682 ------------- Federal National Mortgage Association 1,605,289 6.000% due 08/01/08 - 05/01/09.................... 1,589,289 30,630,746 6.500% due 11/10/10 - 09/01/25.................... 30,616,166 18,127,133 7.000% due 10/01/07 - 08/01/24.................... 18,417,242 10,209,623 7.500% due 11/01/10 - 03/01/24.................... 10,477,080 10,316,989 9.000% due 05/01/21 - 12/01/25.................... 10,855,421 ------------- 71,955,198 ------------- Government National Mortgage Association 2,000,000 6.500% due 12/01/25......... 1,983,750 24,016,001 7.500% due 11/15/09 - 11/01/25.................... 24,694,300 12,188,929 8.000% due 04/15/00 - 12/15/25.................... 12,687,369 12,694,693 8.500% due 05/15/17 - 07/15/25.................... 13,327,382 3,000,000 9.000% due 12/01/25......... 3,177,189 4,874,814 9.500% due 10/15/09 - 11/15/09.................... 5,267,920 2,895,774 10.000% due 11/15/09 - 05/15/13.................... 3,177,546 789,680 11.000% due 02/15/10 - 09/15/10.................... 895,828 96,693 11.250% due 01/15/01........ 104,918 118,453 12.000% due 05/15/15........ 136,589 112,997 12.500% due 06/15/14 - 08/15/15.................... 131,485 43,411 13.000% due 11/15/14........ 50,910 8,765 13.500% due 07/15/14........ 10,341 ------------- 65,645,527 ------------- ASSET BACKED -- 1.3% Corestates 94-A1 4,187,180 6.650% due 05/15/09......... 4,260,330 ------------- COLLATERALIZED MORTGAGE OBLIGATIONS -- 10.3% CMC 92-D IIL 1,150,825 7.200% due 12/25/08......... 1,154,829 COLLATERALIZED MORTGAGE OBLIGATIONS -- (CONTINUED) CWF 93-C A1 $ 3,364,995 6.500% due 01/25/24......... $ 3,357,525 Chase Mortgage 93-C2 2A3 5,720,000 8.250% due 01/25/24......... 5,827,193 CMO 52 Class A (A) 1,062,308 0.000% due 05/01/17......... 889,396 GECMS 1994-21 A 8,939,573 6.500% due 08/25/09......... 8,962,547 GE Capital Mortgage 1994-26A 9,110,711 7.020% due 07/25/09......... 9,173,347 GE 94-24 Class A1 4,527,179 7.000% due 07/25/24......... 4,565,751 ------------- 33,930,588 ------------- CONVENTIONAL MORTGAGE PASS- THROUGHS -- 0.2% Ryland Series 82 519,184 10.250% due 03/15/11........ 555,527 ------------- WHOLE LOAN PASS-THROUGHS -- 1.9% HSI 93E Class E 5,523,976 10.000% due 09/25/08........ 6,078,086 ------------- U.S. GOVERNMENT AND FEDERAL AGENCIES -- 5.8% U.S. Treasury Notes 8,000,000 7.250% due 05/15/04......... 8,900,000 2,500,000 7.500% due 05/15/02......... 2,773,438 1,600,000 10.750% due 02/15/03........ 2,088,000 ------------- 13,761,438 ------------- Federal National Mortgage Association 3,232,817 6.000% due 12/01/08 - 12/01/09.................... 3,200,431 2,000,000 6.200% due 01/01/06......... 2,006,250 ------------- 5,206,681 ------------- FINANCIAL SERVICES -- 2.6% Capital Holding Corp./Providian 3,000,000 0.000% due 02/07/97......... 3,392,325 Spieker Prop. Real Estate Investments 5,000,000 6.650% due 12/15/00......... 4,995,400 ------------- 8,387,725 ------------- Total long-term bonds......... $324,227,255 ------------- ------------- SHORT-TERM SECURITIES -- 16.9% COMMERCIAL PAPER -- 5.2% Bell Atlantic Financial Services 3,000,000 5.800% due 01/18/96......... 2,992,267 Colgate-Palmolive Co. 3,000,000 5.800% due 01/18/96......... 2,992,267 GTE North Inc. 3,000,000 5.800% due 01/18/96......... 2,992,267 Sherwood Medical 5,000,000 5.820% due 01/18/96......... 4,987,066 Virginia Electric Power 3,000,000 5.760% due 01/18/96......... 2,992,320 ------------- 16,956,187 -------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 90
PRINCIPAL MARKET AMOUNT VALUE - ----------- ------------- SHORT-TERM SECURITIES -- (CONTINUED) REPURCHASE AGREEMENTS -- 11.7% $30,000,000 Repurchase agreement dated 12/29/95 with Fleet Bank 5.850% due 01/02/96; maturity amount $30,019,500; (Collateralized by $30,000,000 U.S. Treasury Note 5.125% due 12/31/98)... $ 30,000,000 ------------- 8,463,000 Repurchase agreement dated 12/29/95 with Salomon Brothers 5.900% due 01/02/96; maturity amount $8,468,548; (Collateralized by $8,830,000 U.S. Treasury Bills 4.930% due 06/06/96)................... 8,463,000 ------------- Total short-term securities... $ 55,419,187 ------------- -------------
DIVERSIFICATION OF ASSETS: Total long-term bonds........................ 99.0% $324,227,255 Total short-term securities.................. 16.9 55,419,187 -------- ------------ Total investment in securities *(Identified cost $373,168,338)............ 115.9 379,646,442 Excess of liabilities over cash and receivables................................ (15.9) (52,081,129 ) -------- ------------ Net assets (Applicable to $1.07126 per share based on 305,774,935 shares outstanding)... 100.0% $327,565,313 -------- ------------ -------- ------------ SUMMARY OF SHAREHOLDERS' EQUITY: Capital stock, par value $.10 per share; authorized 800,000,000 shares; outstanding 305,774,935 shares......................... $ 30,577,493 Capital surplus........................................ 303,361,724 Undistributed net realized (loss) on investments........................................ (12,852,008) Unrealized appreciation of investments................. 6,478,104 -------------- Net assets, applicable to shares outstanding........... $327,565,313 -------------- --------------
* Aggregate cost for Federal income tax purposes. (A) Principal Only [cad 228] Securities created by investment bankers by separating regular bonds into their principal and coupon components and selling each piece separately. If the underlying bonds are subject to prepayment, the interest only investor is at risk for faster than anticipated prepayments and the principal only investor is at risk for slower than anticipated prepayments. These instruments are used for a very small percentage of the funds assets when they are determined they improve the portfolio's return profile. 91 HARTFORD INDEX FUND, INC. STATEMENT OF NET ASSETS DECEMBER 31, 1995
MARKET SHARES VALUE - ----------- ------------- COMMON STOCKS -- 96.2% BUSINESS SERVICES -- 1.2% 7,400 Alco Standard Corp............ $ 337,625 *2,625 Andrew Corp................... 100,406 10,300 Donnelley (RR) & Sons......... 405,562 3,500 E G & G, Inc.................. 84,875 *3,800 Federal Express Corp.......... 280,725 2,500 Fleming Companies, Inc........ 51,562 8,250 Genuine Parts Co.............. 338,250 3,400 Grainger W W Inc.............. 225,250 6,700 Moore Corp Ltd................ 124,787 3,200 National Service Industries Inc......................... 103,600 3,300 Ogden Corp.................... 70,538 2,800 Pittston Services Group....... 87,850 5,300 Ryder Systems, Inc............ 131,175 3,900 Safety Kleen Corp............. 60,938 4,600 Supervalu, Inc................ 144,900 12,200 Sysco Corp.................... 396,500 32,300 WMX Technologies Inc.......... 964,963 ------------- 3,909,506 ------------- COMMUNICATION EQUIPMENT -- 2.9% 14,492 AMP Inc....................... 556,130 *4,800 Cabletron Systems............. 388,800 *18,100 Cisco Systems Inc............. 1,350,713 *7,700 DSC Communications............ 283,938 34,100 Hewlett-Packard Co............ 2,855,875 39,400 Motorola Inc.................. 2,245,800 16,900 Northern Telecom Ltd.......... 726,700 2,800 Perkin Elmer.................. 105,700 5,100 Scientific Atlanta, Inc....... 76,500 3,700 Teledyne Inc.................. 94,812 *11,000 3 Com Corp.................... 512,875 ------------- 9,197,843 ------------- COMPUTERS & OFFICE EQUIPMENT -- 2.3% 7,800 Amdahl Corp................... 66,300 8,100 Apple Computer................ 258,188 *17,600 Compaq Computer............... 844,800 *1,700 Cray Research Inc............. 42,075 *2,500 Data General Corp............. 34,375 *9,800 Digital Equipment Corp........ 628,425 2,600 Harris Corp Del............... 142,025 38,000 International Business Machine Corp........................ 3,486,500 10,100 Pitney Bowes Inc.............. 474,700 *10,600 Silicon Graphics Inc.......... 291,500 *7,800 Tandem Computers.............. 82,875 *11,500 Unisys Corp................... 64,687 7,200 Xerox......................... 986,400 ------------- 7,402,850 ------------- CONSUMER DURABLES -- 2.9% 5,700 Black & Decker Corporation.... 200,925 2,000 Briggs & Stratton............. 86,750 6,400 Brunswick..................... 153,600 25,544 Chrysler Corp................. 1,414,499 5,600 Cooper Tire & Rubber Company..................... 137,900 6,200 Dial Corp Arizona............. 183,675 4,000 Echlin Inc.................... 146,000 3,100 Fleetwood..................... 79,825 71,700 Ford Motor Co. Del............ 2,079,300 49,900 General Motors Corp........... 2,638,462 1,700 The B.F. Goodrich Co.......... 115,813 10,200 Goodyear Tire & Rubber Company..................... 462,825 7,500 ITT Corporation............... 397,500 CONSUMER DURABLES -- (CONTINUED) 10,600 Masco Corporation............. $ 332,575 7,200 Maytag Corp................... 145,800 2,700 Snap-on-Tools................. 122,175 3,000 Stanley Works................. 154,500 4,900 Whirlpool Corp................ 260,925 ------------- 9,113,049 ------------- CONSUMER NON-DURABLES -- 12.8% 1,900 Alberto Culver Co............. 65,312 12,100 American Brands Inc........... 539,963 5,000 American Greetings Corp. Class A........................... 138,125 17,100 Anheuser Busch Cos. Inc....... 1,143,563 35,356 Archer-Daniels-Midland........ 636,408 4,600 Avon Products................. 346,725 2,000 Ball Corp..................... 55,000 4,600 Brown-Forman.................. 167,900 9,800 CPC International............. 672,525 *11,650 CUC International............. 397,556 16,700 Campbell Soup Co.............. 1,002,000 3,500 Clorox Company................ 250,688 83,800 Coca-Cola Co.................. 6,222,150 9,700 Colgate Palmolive Co.......... 681,425 15,950 Conagra Inc................... 657,938 2,600 Coors (Adolph) Class B........ 57,525 22,800 Eastman Kodak................. 1,527,600 5,100 Fruit Of The Loom Inc......... 124,313 10,600 General Mills Co.............. 612,150 4,000 Giant Food, Inc............... 126,000 29,600 Gillette Co................... 1,542,900 2,600 Great Atlantic & Pacific Tea Co.......................... 59,800 2,200 Handleman Co.................. 12,650 5,950 Hasbro, Inc................... 184,450 24,400 H.J. Heinz Company............ 808,250 5,200 Hershey Foods Corp............ 338,000 14,600 Kellogg Co.................... 1,127,850 18,586 Kimberly Clark Corp........... 1,537,991 5,000 Liz Claiborne, Inc............ 138,750 10,600 Newell Co..................... 274,275 9,500 Nike, Inc. Class B............ 661,437 52,600 Pepsico Inc................... 2,939,025 56,100 Philip Morris................. 5,077,050 3,000 Polaroid Corp................. 142,125 4,200 Premark International......... 212,625 45,900 Proctor and Gamble............ 3,809,700 9,000 Quaker Oats Co................ 310,500 7,000 Ralston Purina Group.......... 436,625 5,200 Reebok International Ltd...... 146,900 10,500 Rubbermaid, Inc............... 267,750 2,600 Russell Corp.................. 72,150 32,000 Sara Lee Corp................. 1,020,000 24,800 Seagram....................... 858,700 3,300 Stride Rite Corp.............. 24,750 13,000 UST Inc....................... 433,875 10,700 Unilever NV New York Shares... 1,506,025 4,300 V F Corp...................... 226,825 7,000 Whitman Corp.................. 162,750 10,100 Winn Dixie Stores Inc......... 372,437 7,800 Wrigley Wm. Jr. Co............ 409,500 ------------- 40,540,531 ------------- CONSUMER SERVICES -- 0.8% 33,000 Airtouch Communications....... 932,250 3,200 Bally Entertainment Corp...... 44,800
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 92
MARKET SHARES VALUE - ----------- ------------- COMMON STOCKS -- (CONTINUED) CONSUMER SERVICES -- (CONTINUED) 7,000 H & R Block, Inc.............. $ 283,500 5,500 De Luxe Corp.................. 159,500 4,900 Harcourt General Inc.......... 205,188 2,000 John H. Harland Co............ 41,750 *6,850 Harrah's Entertainment........ 166,112 3,200 Hilton Hotels Corporation..... 196,800 8,400 Marriott International Inc.... 321,300 6,900 Service Corp International.... 303,600 ------------- 2,654,800 ------------- ELECTRONICS -- 1.5% 6,900 Advanced Micro Devices Inc.... 113,850 11,800 Applied Materials............. 464,625 54,900 Intel Corp.................... 3,115,575 13,800 Micron Technology Inc......... 546,825 12,500 Texas Instruments............. 646,875 ------------- 4,887,750 ------------- ENERGY AND SERVICES -- 9.1% 6,200 Amerada Hess Corp............. 328,600 33,100 Amoco Corporation............. 2,379,063 4,200 Ashland Inc................... 147,525 10,700 Atlantic Richfield............ 1,185,025 9,400 Baker Hughes, Inc............. 229,125 23,600 Barrick Gold Corp............. 622,450 8,500 Burlington Resources.......... 333,625 43,500 Chevron Corp.................. 2,283,750 7,050 Coastal Corp.................. 262,613 12,200 Dresser Industries............ 297,375 82,900 Exxon......................... 6,642,363 5,500 Fluor Corp.................... 363,000 7,600 Halliburton Co................ 384,750 1,700 Helmerich & Payne Inc......... 50,575 3,500 Kerr McGee Corp............... 222,250 2,200 Louisiana Land & Exploration Co.......................... 94,325 3,600 Mcdermott International....... 79,200 26,400 Mobil Corp.................... 2,956,800 600 Nacco......................... 33,300 21,200 Occidential Petroleum Corp.... 453,150 6,900 Oryx Energy Company........... 92,288 10,000 Panhandle Eastern Corp........ 278,750 3,100 Pennzoil Co................... 130,975 17,500 Phillips Petroleum............ 597,187 *5,600 Rowan Cos..................... 55,300 35,800 Royal Dutch Petroleum......... 5,052,275 6,012 Santa Fe Energy Resources Corp........................ 57,865 16,100 Schlumberger Ltd.............. 1,114,925 5,500 Sun Company, Inc.............. 150,562 17,300 Texaco Inc.................... 1,358,050 19,200 USX-Marathon Group............ 374,400 16,400 Unocal Corp................... 477,650 ------------- 29,089,091 ------------- FINANCIAL SERVICES -- 12.4% 7,600 Aetna Life & Casualty Co...... 526,300 7,800 H.F. Ahmanson & Company....... 206,700 3,000 Alexander & Alexander......... 57,000 29,940 Allstate Corp................. 1,231,283 32,600 American Express Co........... 1,348,825 13,700 American General Corp......... 477,788 31,730 American International Group....................... 2,935,025 26,290 Banc One Corp................. 992,448 FINANCIAL SERVICES -- (CONTINUED) 7,500 Bank Of Boston................ $ 346,875 13,300 Bank Of New York Co........... 648,375 25,036 Bank America Corporation...... 1,621,081 5,200 Bankers Trust................. 345,800 6,500 Barnett Banks Inc............. 383,500 3,500 Beneficial Corp............... 163,188 8,400 Boatman Bancshares............ 343,350 4,800 Cigna Corporation............. 495,600 11,700 Chase Manhattan............... 709,313 16,768 Chemical Banking Corp......... 985,120 5,800 Chubb Corp.................... 561,150 28,400 Citicorp...................... 1,909,900 7,700 Comerica Inc.................. 308,963 9,300 Corestates Financial Corp..... 352,238 11,256 Dean Witter Discover & Co..... 529,032 12,100 Federal Home Loan Mortgage Corporation................. 1,010,350 18,200 Federal National Mortgage Association................. 2,259,075 8,700 First Bank System Inc......... 431,738 21,212 First Chicago Corp............ 837,874 5,400 First Fidelity Bancorp........ 407,025 5,100 First Interstate Bancorp...... 696,150 11,500 First Union Corporation....... 639,688 16,402 Fleet Financial Group Inc..... 668,393 5,500 General Re Corp............... 852,500 3,900 Golden West Financial......... 215,475 9,100 Great Western Financial Corp........................ 232,050 6,500 Household International Inc......................... 384,313 4,800 Jefferson Pilot Corp.......... 223,200 15,801 Keycorp....................... 572,786 6,900 Lincoln National Corp......... 370,875 9,900 MBNA Corp..................... 365,063 4,800 Marsh and McLennan Cos., Inc......................... 426,000 9,800 Mellon Bank Corporation....... 526,750 11,800 Merrill Lynch & Co. Inc....... 601,800 12,600 J.P. Morgan................... 1,011,150 5,100 Morgan Stanley Group.......... 411,187 9,800 National City Corp............ 324,625 18,064 Nationsbank Corp.............. 1,257,705 23,600 Norwest Corporation........... 778,800 15,300 PNC Bank Corp................. 493,424 6,400 Providian Corp................ 260,800 1,800 Pulte Corp.................... 60,524 3,700 Republic New York Corp........ 229,862 8,400 Safeco Corp................... 289,800 5,600 St Paul Cos., Inc............. 311,500 7,100 Salomon Inc................... 252,050 7,600 Sun Trust Banks, Inc.......... 520,600 4,800 Torchmark Corp................ 217,200 4,600 Transamerica Corp............. 335,224 21,291 Travelers Group Inc........... 1,338,672 4,800 Unum Corp..................... 264,000 6,650 U.S. Bancorp Oregon........... 223,606 7,500 USF&G Corporation............. 126,562 2,350 US Life Corp.................. 70,206 11,400 Wachovia Corp................. 521,550 3,200 Wells Fargo & Company......... 691,200 ------------- 39,190,206 ------------- HEALTHCARE -- 10.5% 53,000 Abbott Laboratories........... 2,212,750 4,300 Allergan Inc.................. 139,750 *5,500 Alza Corp. Del................ 136,125 20,700 American Home Products Corp........................ 2,007,900
93 HARTFORD INDEX FUND, INC. STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 1995
MARKET SHARES VALUE - ----------- ------------- COMMON STOCKS -- (CONTINUED) HEALTHCARE -- (CONTINUED) 17,700 Amgen......................... $ 1,050,938 3,700 Bard C. R. Inc................ 119,325 3,800 Bausch & Lomb Inc............. 150,575 18,500 Baxter International.......... 774,688 4,400 Becton, Dickinson............. 330,000 6,600 Beverly Enterprises........... 70,125 7,700 Biomet........................ 137,638 10,800 Boston Scientific Corp........ 529,200 33,900 Bristol-Myers Squibb Company..................... 2,911,162 29,620 Columbia/HCA Healthcare Corp........................ 1,503,215 2,900 Community Psychiatric Centers..................... 35,525 10,800 Humana Inc.................... 295,650 43,100 Johnson & Johnson............. 3,690,438 36,800 Lilly Eli & Co................ 2,070,000 5,100 Mallinckrodt Group Inc........ 185,512 4,200 Manor Care Inc................ 147,000 15,400 Medtronic, Inc................ 860,475 82,600 Merck & Co., Inc.............. 5,430,950 3,000 Millipore Corp................ 123,375 33,610 Pharmacia & Upjohn............ 1,302,387 42,200 Pfizer, Inc................... 2,658,600 5,600 Pioneer Hi-Bred International............... 311,500 4,750 St. Jude Medical Inc.......... 204,250 24,800 Schering-Plough Corp.......... 1,357,800 1,500 Shared Medical Systems Corp........................ 81,562 13,300 Tenet Healthcare Corporation................. 275,975 11,600 United Healthcare Corp........ 759,800 10,300 US Healthcare Inc............. 478,950 3,800 United States Surgical........ 81,225 9,000 Warner-Lambert Company........ 874,125 ------------- 33,298,490 ------------- INDUSTRIAL MATERIALS -- 6.3% 7,500 Air Products & Chemical Corp........................ 395,625 15,000 Alcan Aluminum Ltd............ 466,875 11,900 Aluminum Company of America... 629,213 7,100 Armco Inc..................... 41,713 2,500 Armstrong World Industries, Inc......................... 155,000 2,800 Asarco Corporation............ 89,600 3,600 Avery Dennison International............... 180,450 3,400 Bemis Co...................... 87,125 7,400 Bethlehem Steel Corp.......... 103,600 3,200 Boise Cascade Corp............ 110,800 1,900 Centex Corp................... 66,025 6,500 Champion International Corp........................ 273,000 15,400 Corning Inc................... 492,800 2,000 Crane Company................. 73,750 *6,000 Crown Cork & Seal............. 250,500 6,200 Cyprus Amax Minerals.......... 161,975 17,500 Dow Chemical.................. 1,231,563 37,100 Dupont EI De Nemours.......... 2,592,363 5,375 Eastman Chemical Co........... 336,609 8,400 Echo Bay Mines Ltd............ 87,150 4,300 Ecolab Inc.................... 129,000 9,612 Englehard Corp................ 209,061 2,400 FMC Corp...................... 162,300 3,100 Federal Paper Board Inc....... 160,813 13,600 Freeport-McMoran Copper & Gold Class B..................... 382,500 6,100 Georgia-Pacific Corp.......... 418,613 2,300 Giddings & Lewis.............. 37,950 6,300 Grace (W.R.) Company.......... 372,488 4,300 Great Lakes Chemical.......... 309,600 7,400 Hercules Inc.................. 417,175 INDUSTRIAL MATERIALS -- (CONTINUED) 9,200 Homestake Mining.............. $ 143,750 7,500 ITT Industries................ 180,000 7,900 Inco Co. Ltd.................. 262,675 3,200 Inland Steel Company.......... 80,400 7,400 International Flavors & Fragrances.................. 355,200 17,800 International Paper Co........ 674,175 5,500 James River Corp.............. 132,688 2,200 Kaufman & Broad Home Corp..... 32,725 7,200 Louisiana Pacific Corp........ 174,600 3,600 Mead Corp..................... 188,100 7,700 Monsanto Co................... 943,250 9,900 Morton International.......... 355,163 4,500 Nalco Chemical Co............. 135,562 6,344 Newmont Mining................ 287,066 5,800 Nucor Corp.................... 331,325 3,400 Owens Corning Fiberglass Corp........................ 152,575 13,100 PPG Industries, Inc........... 599,325 7,633 Pall Corp..................... 205,136 4,600 Phelps Dodge Corp............. 286,350 16,000 Placer Dome, Inc.............. 386,000 2,000 Potlatch Corp................. 80,000 9,200 Praxair....................... 309,350 4,200 Reynolds Metal Co............. 237,825 4,500 Rohm & Haas Co................ 289,687 8,807 Santa Fe Pacific Gold Corp.... 106,785 5,700 Sherwin Williams.............. 232,275 3,300 Sigma Aldrich Corp............ 163,350 1,300 Springs Industries Inc........ 53,787 6,430 Stone Container Corporation... 92,431 3,700 Temple-Inland Inc............. 163,262 5,460 USX-U.S. Steel Group.......... 167,895 4,700 Union Camp Corp............... 223,837 9,200 Union Carbide Corp............ 345,000 6,850 Westvaco Corp................. 190,087 13,600 Weyerhaeuser Company.......... 588,200 3,700 Willamette Industries......... 208,125 6,800 The Williams Companies........ 298,350 6,075 Worthington Industries........ 126,436 ------------- 20,207,983 ------------- MANUFACTURING -- 8.4% 18,900 Allied Signal Inc............. 897,750 22,900 Boeing Company................ 1,794,788 13,300 Caterpillar, Inc.............. 781,375 2,300 Cincinnati Milacron Inc....... 60,375 7,200 Cooper Industries............. 264,600 2,700 Cummins Engine................ 99,900 6,800 Dana Corporation.............. 198,900 17,400 Deere & Company............... 613,350 7,600 Dover Corp.................... 280,250 5,200 Eaton Corp.................... 278,850 15,000 Emerson Electric Co........... 1,226,250 2,700 Foster Wheeler Corp........... 114,750 4,200 General Dynamics.............. 248,325 111,600 General Electric.............. 8,035,200 3,200 General Signal Corp........... 103,600 3,200 Harnischfeger Industries Inc......................... 106,400 8,500 Honeywell Inc................. 413,313 7,800 Illinois Tool Works........... 460,200 7,100 Ingersoll-Rand Company........ 249,388 2,700 Johnson Controls, Inc......... 185,625 13,401 Lockheed Martin Corp.......... 1,058,679 11,400 Loral Corp.................... 403,275
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 94
MARKET SHARES VALUE - ----------- ------------- COMMON STOCKS -- (CONTINUED) MANUFACTURING -- (CONTINUED) 14,827 Mattel, Inc................... $ 455,930 7,500 McDonnell Douglas Corp........ 690,000 28,100 Minnesota Mining & Manufacturing Co............ 1,861,625 *8,300 National Semicondutor Corp.... 184,675 *5,030 Navistar International Corp........................ 52,815 3,300 Northrop Grumman Corp......... 211,200 1,300 Outboard Marine Corp.......... 26,488 2,595 Paccar Inc.................... 109,314 4,950 Parker-Hannifin Corp.......... 169,537 2,900 Raychem Corp.................. 164,937 16,300 Raytheon Co................... 770,175 14,500 Rockwell International Corp........................ 766,688 4,300 TRW, Inc...................... 333,250 2,200 Tektronix Inc................. 108,075 12,100 Tenneco, Inc.................. 600,462 5,700 Textron, Inc.................. 384,750 1,300 Thomas & Betts Corp........... 95,875 2,100 Timken........................ 80,325 1,900 Trinova Corporation........... 54,387 10,200 Tyco International Ltd........ 363,375 8,200 United Technologies Corp...... 777,975 *2,680 Varity Corp................... 99,495 *3,500 Western Atlas Inc............. 176,750 26,200 Westinghouse Electric Corporation................. 432,300 ------------- 26,845,546 ------------- MEDIA & SERVICES -- 3.1% 10,300 Capital Cities/ABC Inc........ 1,270,763 16,000 Comcast Corp. Class A......... 291,000 34,800 Walt Disney Company........... 2,053,200 6,500 Dow Jones & Co................ 259,188 11,300 Dun & Bradstreet Corp......... 731,675 9,400 Gannett Co., Inc.............. 576,925 5,200 Interpublic Group............. 225,550 *2,550 King World Productions, Inc......................... 99,131 3,300 Knight Ridder Inc............. 206,250 3,300 McGraw-Hill Companies, Inc.... 287,513 1,800 Meredith Corp................. 75,375 6,500 New York Times Co. Class A.... 192,562 *43,600 Tele-Communications........... 866,550 5,900 Tellabs Inc................... 218,300 25,780 Time Warner Inc............... 976,418 7,500 Times Mirror Co. Class A...... 254,062 4,300 Tribune Company............... 262,837 24,100 Viacom Inc. Class B........... 1,141,737 ------------- 9,989,036 ------------- POLLUTION CONTROL -- 0.2% 14,200 Browning Ferris Industries Inc......................... 418,900 19,700 Laidlaw Inc. Class B.......... 201,925 ------------- 620,825 ------------- RETAIL -- 5.2% 16,900 Albertson's Inc............... 555,588 9,900 American Stores Co............ 264,825 1,200 Brown Group Inc............... 17,100 6,600 Charming Shoppes Inc.......... 18,975 6,500 Circuit City Store Inc........ 179,563 10,600 Darden Restaurants............ 125,875 4,800 Dayton Hudson Corporation..... 360,000 7,600 Dillard Department Stores Class A..................... 216,600 13,500 Federated Department Store.... 371,250 RETAIL -- (CONTINUED) 9,600 The Gap, Inc.................. $ 403,200 31,773 Home Depot Inc................ 1,521,132 2,600 Jostens Inc................... 63,050 30,600 K Mart Corporation............ 221,850 *8,200 Kroger Co..................... 307,500 23,900 The Limited, Inc.............. 415,263 7,900 Loews Corporation............. 619,163 1,400 Longs Drug Store.............. 67,025 10,700 Lowe's Companies.............. 358,450 1,600 Luby's Cafeterias............. 35,600 16,600 May Department Stores Co...... 701,350 46,400 McDonalds Corp................ 2,093,800 7,000 Melville Corporation.......... 215,250 2,500 Mercantile Stores, Inc........ 115,625 5,500 Nordstrom Inc................. 222,750 15,200 J.C. Penney................... 723,900 4,100 Pep Boys-Manny, Moe, Jack..... 105,062 13,034 Price/Costco Inc.............. 198,768 5,600 Rite Aid Corp................. 191,800 *3,600 Ryan's Family Steak House..... 25,200 26,000 Sears Roebuck................. 1,014,000 *2,800 Shoney's Inc.................. 28,700 4,800 TJX Companies................. 90,600 4,449 Tandy Corp.................... 184,633 *18,400 Toys R Us..................... 400,200 153,400 Wal-Mart...................... 3,432,325 16,400 Walgreen Co................... 489,950 6,800 Wendy's International Inc..... 144,500 8,800 F.W. Woolworth Company........ 114,400 ------------- 16,614,822 ------------- SOFTWARE & SERVICES -- 2.8% 3,100 Autodesk Incorp............... 106,175 9,600 Automatic Data Processing..... 712,800 *3,000 Ceridian Corporation.......... 123,750 16,000 Computer Associates........... 910,000 3,700 Computer Sciences Corp........ 259,925 14,700 First Data Corp............... 983,063 *3,100 Intergraph Corp............... 48,825 *39,500 Microsoft Corp................ 3,466,125 *24,600 Novell Inc.................... 350,550 *28,950 Oracle Corporation............ 1,226,756 12,800 Sun Microsystems Inc.......... 584,000 ------------- 8,771,969 ------------- TECHNOLOGY -- 0.1% 8,600 LSI Logic Corp................ 281,650 ------------- TRANSPORTATION AND SERVICES -- 1.4% *5,100 AMR........................... 378,675 9,474 Burlington Northern Santa Fe.......................... 738,972 14,000 CSX Corp...................... 638,750 5,200 Consolidated Rail Corporation................. 364,000 2,900 Consolidated Freightways, Inc......................... 76,850 3,400 Delta Airlines, Inc........... 251,175 8,700 Norfolk Southern Corp......... 690,563 2,600 Roadway Services.............. 127,075 9,600 Southwest Airlines............ 223,200 13,700 Union Pacific Corp............ 904,200 4,200 USAir Group................... 55,650 1,900 Yellow Corp................... 23,512 ------------- 4,472,622 -------------
95 HARTFORD INDEX FUND, INC. STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 1995
MARKET SHARES VALUE - ----------- ------------- COMMON STOCKS -- (CONTINUED) UTILITY -- 12.3% 106,271 AT&T Corp..................... $ 6,881,047 12,600 Alltel Corp................... 371,700 12,400 American Electric Power....... 502,200 37,000 Ameritech Corp................ 2,183,000 9,800 Baltimore Gas and Electric.... 279,300 29,200 Bell Atlantic Corp............ 1,952,750 66,300 Bell South Corp............... 2,884,050 10,400 Carolina Power and Lighting... 358,800 12,800 Central & Southwest Corp...... 356,800 10,357 Cinergy Corp.................. 317,183 3,400 The Columbia Gas System, Inc......................... 149,175 15,700 Consolidated Edison NY........ 502,400 6,200 Consolidated Natural Gas Co.......................... 281,325 9,800 Detroit Edison Inc............ 338,100 11,600 Dominion Resources, Inc....... 478,500 13,700 Duke Power Co................. 649,038 1,300 Eastern Enterprises........... 45,825 16,800 Enron Corp.................... 640,500 4,600 Enserch Corp.................. 74,750 15,200 Entergy Corp.................. 444,600 12,400 Florida Power & Light Group Inc......................... 575,050 64,700 GTE Corp...................... 2,846,800 7,800 General Public Utilities...... 265,200 17,500 Houston Industries Inc........ 424,375 45,100 MCI Communications............ 1,178,238 9,600 Niagara Mohawk Power Corp..... 92,400 3,400 Nicor, Inc.................... 93,500 8,300 Noram Energy.................. 73,663 4,500 Northern States Power Company..................... 221,063 28,500 Nynex Corporation............. 1,539,000 10,200 Ohio Edison Co................ 239,700 1,800 Oneok Inc..................... 41,175 14,800 Peco Energy Company........... 445,850 10,600 PP&L Resources................ 265,000 5,600 Pacific Enterprises........... 158,200 28,400 Pacific Gas & Electric Company..................... 805,850 28,600 Pacific Telesis Group......... 961,675 19,000 Pacificorp.................... 403,750 2,300 Peoples Energy Corp........... 73,025 16,300 Public Service Enterprises.... 499,187 40,700 SBC Communications Inc........ 2,340,250 29,800 SCE Corp...................... 528,950 5,800 Sonat, Inc.................... 206,625 44,500 The Southern Co............... 1,095,812 23,300 Sprint Corp................... 929,087 15,100 Texas Utilities............... 620,987 14,300 Unicom Corp................... 468,325 UTILITY -- (CONTINUED) 6,800 Union Electric Co............. 283,900 31,400 U.S. West Communications Group....................... $ 1,122,550 31,500 U.S. West Media Group......... 598,500 ------------- 39,088,730 ------------- Total common stocks........... $ 306,177,299 ------------- ------------- PRINCIPAL AMOUNT - ---------- SHORT-TERM SECURITIES -- 3.7% U.S. TREASURY BILLS 200,000 5.290% Due 1/4/96.......... 199,941 450,00 5.300% Due 4/4/96.......... 443,839 REPURCHASE AGREEMENT 11,049,000 Interest in $24,574,000 joint repurchase agreement dated 12/29/95 with Fleet Bank 5.850% due 01/02/96; maturity amount $11,056,182; (Collateralized by $24,574,000 U.S. Treasury Note 5.125% due 12/31/98).......... 11,049,000 ------------ Total short-term securities... $11,692,780 ------------ ------------
DIVERSIFICATION OF ASSETS: Total common stocks.......................... 96.2 % $306,177,299 Total short-term securities.................. 3.7 11,692,780 ------ ------------ Total investment in securities **(Identified cost $245,919,800)........... 99.9% 317,870,079 Excess of cash and receivables over liabilities................................ 0.1 382,813 ------ ------------ Net assets (Applicable to $2.02792 per share based on 156,935,726 shares outstanding)... 100.0% $318,252,892 ------ ------------ ------ ------------ SUMMARY OF SHAREHOLDERS' EQUITY: Capital stock, par value $.10 per share; authorized 400,000,000 shares; outstanding 156,935,726 shares............................................. $ 15,693,572 Capital surplus...................................... 224,105,944 Undistributed net realized gain on investments....... 6,511,336 ***Unrealized (loss) on futures contract............. (8,239) Unrealized appreciation of investments............... 71,950,279 ------------ Net assets, applicable to shares outstanding......... $318,252,892 ------------ ------------
* Non-income producing during period. ** Aggregate cost for Federal income tax purposes. *** The Fund has 36 Standard & Poor's 500, March 1996 futures contracts open at December 31, 1995. These contracts have a value of $11,132,100. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 96 HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC. STATEMENT OF NET ASSETS DECEMBER 31, 1995
MARKET SHARES VALUE - ----------- -------------- COMMON STOCKS -- 94.1% ARGENTINA -- 0.6% 81,000 Baesa ADR..................... $ 1,670,625 50,000 Telefonica de Argentina-ADR... 1,362,500 55,000 YPF S.A. Sponsored ADR........ 1,189,375 -------------- 4,222,500 -------------- AUSTRALIA -- 5.2% 318,076 Advance Bk Australia.......... 2,546,880 1,044,035 Amcor Ltd..................... 7,367,104 1,325,000 Australia & New Zealand Banking..................... 6,210,169 714,413 Broken Hill Proprietary....... 10,082,331 397,621 National Australia Bank....... 3,573,657 105,300 Qantas Air ADR 144A........... 1,750,613 930,000 Westpac Banking Corp.......... 4,117,062 -------------- 35,647,816 -------------- AUSTRIAN -- 0.7% 33,400 EVN........................... 4,576,474 -------------- BELGIUM -- 0.3% 50,000 Delhaize Le Lion.............. 2,066,046 -------------- BRAZIL -- 0.5% 195,000 Electrobras On ADR............ 2,656,875 130,000 Usiminas Siderurg Minas-ADR... 1,056,640 -------------- 3,713,515 -------------- CANADA -- 1.8% *75,000 Canadian Pacific Foreign...... 1,359,375 622,000 Canadian Pacific Ltd.......... 11,273,750 -------------- 12,633,125 -------------- CHILE -- 0.3% 27,500 Compania de Telefon Chile..... 2,279,063 -------------- DENMARK -- 1.9% 378,000 Tele Danmark.................. 10,442,250 47,000 UniDanmark A Registered....... 2,324,055 -------------- 12,766,305 -------------- FINLAND -- 0.8% 76,000 Metsa-serla Oy B.............. 2,336,262 *1,220,000 Unitas Bank Ltd............... 3,078,617 -------------- 5,414,879 -------------- FRANCE -- 7.7% 13,100 Canal Plus SA................. 2,451,943 23,000 Euro RSCG Worldwide........... 1,875,790 20,335 Groupe Danone................. 3,350,055 111,000 National Bank of Paris 144A... 4,999,368 13,000 Peugeot SA.................... 1,712,270 132,650 Renault....................... 3,813,491 395,000 Rhone-Poulenc................. 8,448,293 *55,365 Saint Gobain.................. 6,118,303 45,107 Societe Generale.............. 5,564,168 50,000 Societe Nationale Elf Acquitaine.................. 3,678,180 47,700 Technip....................... 3,277,515 108,296 Total SA...................... 7,297,604 -------------- 52,586,980 -------------- GERMANY -- 4.9% 22,700 Bayer AG...................... 6,011,238 1,050 Beiersdorf.................... 719,228 6,100 Daimler-Benz AG............... 3,071,210 GERMANY -- (CONTINUED) 14,500 Degussa....................... $ 4,870,306 98,000 Deutsche Bank AG.............. 4,641,029 8,500 Karstadt AG................... 3,475,661 16,549 Mannesmann AG................. 5,253,559 123,000 Veba AG....................... 5,251,878 -------------- 33,294,109 -------------- HONG KONG -- 4.3% 2,116,217 Hong Kong Telecommunications.......... 3,776,760 1,440,000 Hutchison Whampoa Ltd......... 8,771,290 1,008,000 Sun Hung Kai.................. 8,245,199 1,135,000 Swire Pacific Ltd............. 8,806,984 -------------- 29,600,233 -------------- INDIA -- 0.5% 200,000 India Tobacco Co. ADS......... 1,427,600 225,000 Indo Gulf GDR................. 326,318 154,000 Reliance Industries GDS....... 1,813,104 -------------- 3,567,022 -------------- INDONESIA -- 0.5% 480,000 Jaya Real Property-Foreign.... 1,301,268 *549,000 Jaya Real Property............ 1,488,325 *189,000 Semen Gresik.................. 528,903 -------------- 3,318,496 -------------- ITALY -- 2.0% 2,780,000 Banca Comml Italiana.......... 5,936,504 2,000,000 Stet.......................... 5,656,693 1,530,000 Telecom Italia SPA............ 2,380,535 -------------- 13,973,732 -------------- JAPAN -- 25.9% 169,000 Canon Sales................... 4,493,377 782,000 Chichibu Oneda Cement C....... 4,165,929 351,000 Chugai Pharmaceutical......... 3,356,270 391,000 Dai Nippon Printing........... 6,615,585 2,000 Home Wide Corp................ 23,591 97,000 Ito-Yokado Ltd................ 5,964,614 500,000 Kajima Corp................... 4,930,871 1,200,000 Kawasaki Heavy Inds........... 5,510,974 1,195,000 Kawasaki Steel Corp........... 4,159,335 550,000 Keio Teito Electric Rai....... 3,195,881 32,000 Kyocera Corp.................. 2,373,006 9,000 Kyoritsu Air Technology....... 97,457 59,000 Mabuchi Motor................. 3,662,187 239,000 Matsushita Electric Co........ 3,882,046 513,000 Minebea Co., Ltd.............. 4,295,253 208,000 Mitsubishi Bank Ltd........... 4,886,783 615,000 Mitsubishi Corp............... 7,551,484 499,000 Mitsui Petrochemical.......... 4,076,719 97,000 Murata Manufacturing Co....... 3,563,763 69,000 Nihon Jumbo Co., Ltd.......... 2,408,295 433,000 Nippon Express................ 4,161,288 570 Nippon Telegraph & Telephone................... 4,601,663 *1,965,000 NKK Corporation............... 5,281,543 350,000 Nomura Securities............. 7,613,845 75,000 Orix Corp..................... 3,081,794 25,000 Riso Kagaku................... 2,105,289 525,000 Sakura Bank................... 6,649,425 224,000 Sankyo........................ 5,024,461 98,000 Sanwa Bank Ltd................ 1,989,752
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 97 HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC. STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 1995
MARKET SHARES VALUE - ----------- -------------- COMMON STOCKS -- (CONTINUED) JAPAN -- (CONTINUED) 37,000 Sanyo Shinpan Financial Co.... $ 3,040,704 85,000 Secom......................... 5,900,609 31,000 Sekisui Chemical Co........... 455,574 83,000 Seven Eleven.................. 5,842,019 117,000 Shimamura Co. Ltd............. 4,513,487 10,000 Shohkoh Fund.................. 1,875,665 312,000 Showa Corporation............. 2,386,078 82,000 Sony Corp..................... 4,907,473 460,000 Sumitomo Marsh & Fire......... 3,771,440 851,000 Sumitomo Realty............... 6,006,284 334,000 Sumitomo Trust & Banking...... 4,714,686 353,000 Toda Construction Co.......... 3,054,578 126,000 Tohoku Electric Power......... 3,033,356 606,000 Tokio Marine & Fire Insurance................... 7,909,697 24,000 Tsutsumi Jewelry.............. 1,199,651 -------------- 178,333,781 -------------- MALAYSIA -- 1.6% 750,000 Resort World.................. 4,016,222 2,617,400 Sime Darby Berhad............. 6,956,511 -------------- 10,972,733 -------------- MEXICO -- 1.1% 385,000 Cemex SA A.................... 1,270,825 536,000 Femsa SA B.................... 1,239,870 *285,000 Grupo Carso SA Ser A1......... 1,522,222 154,000 Kimberly Clark A.............. 2,331,514 164,900 Transportation-Maritima....... 1,236,750 -------------- 7,601,181 -------------- NETHERLANDS -- 4.5% 380,000 Elesevier..................... 5,055,642 173,515 International Nederlanden CVA......................... 11,564,071 47,000 Unilever CVA.................. 6,589,058 146,000 Vendex International.......... 4,329,624 22,400 Verenigd Bezit................ 3,067,902 -------------- 30,606,297 -------------- NEW ZEALAND -- 1.6% 557,383 Air New Zealand B............. 1,894,993 6,077,000 Brierley Investments.......... 4,807,565 1,916,000 Carter Holt................... 4,133,900 -------------- 10,836,458 -------------- NORWAY -- 4.0% 1,315,800 Christiana Bank Og............ 3,071,584 165,801 Hafslund Nyco A-Free.......... 4,328,086 154,000 Kvaerner...................... 5,441,009 141,000 Orkla AS A.................... 7,005,521 560,000 Saga Petro A Free............. 7,463,722 -------------- 27,309,922 -------------- PHILIPPINES -- 0.9% 419,000 Philippine National Bank...... 4,641,329 *1,340,000 Pilipino Telephone............ 1,356,379 -------------- 5,997,708 -------------- PORTUGAL -- 0.5% *181,800 Portugal Telecom S.A. ADR..... 3,454,200 -------------- SINGAPORE -- 3.5% 512,875 Devel Bank of Singapore....... $ 6,382,380 1,000,000 Keppel Corp................... 8,909,001 325,000 Ocbc Foreign.................. 4,067,383 515,000 United O/S Bank Foreign....... 4,952,273 -------------- 24,311,037 -------------- SPAIN -- 4.5% 27,500 Acerinox SA................... 2,773,280 245,000 Banco Bilbao Vizcaya.......... 8,799,622 94,000 Empresa Nac de Electricidad... 5,307,635 600,000 Iberdrola SA.................. 5,473,823 160,000 Repsol........................ 5,260,000 30,000 Repsol SA..................... 980,110 175,000 Telefonica de Espana.......... 2,416,372 -------------- 31,010,842 -------------- SWEDEN -- 1.9% 125,000 Astra A Free A Shares......... 4,979,855 256,500 Avesta Sheffield.............. 2,255,818 *246,800 BT Industries 144A............ 2,708,500 258,000 Stora Koppabergs.............. 3,025,347 -------------- 12,969,520 -------------- SWITZERLAND -- 3.0% 9,200 Ciba Geigy AG................. 8,096,766 7,850 Nestle SA..................... 8,685,164 7,100 Sulzer AG-Part Cert........... 3,786,092 -------------- 20,568,022 -------------- THAI BAT -- 0.7% 3,270,000 Bangkok Metro Bank............ 3,050,615 150,000 Bangkok Bank.................. 1,822,152 -------------- 4,872,767 -------------- UNITED KINGDOM -- 8.4% 252,000 Associated British Food....... 1,442,793 506,000 Bass.......................... 5,644,903 5,152,000 Bet PLC....................... 10,152,118 621,000 Body Shop International....... 1,464,577 1,650,000 British Steel PLC............. 4,166,602 782,000 British Telecom Co. PLC....... 4,295,237 897,000 Northern Foods PLC............ 2,379,938 516,234 Powergen PLC.................. 4,265,235 1,000,000 Rank Organization............. 7,230,411 780,000 Royal Insurance Holding....... 4,623,119 853,000 Tomkins PLC................... 3,732,288 2,270,000 Vodafone Group PLC............ 8,118,464 -------------- 57,515,685 -------------- Total common stocks........... $ 646,020,448 -------------- -------------- NON-CONVERTIBLE PREFERRED STOCKS -- 0.7% 118,000 Nokia Preferred ADR........... 4,587,250 -------------- --------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 98
PRINCIPAL MARKET AMOUNT VALUE - ----------- -------------- SHORT-TERM SECURITIES -- 4.9% $23,735,000 Repurchase Agreement dated 12/29/95 with Swiss Bank Corp. 5.850% due 01/02/96; maturity amount $23,750,428; (Collateralized by $15,450,000 U.S. Treasury Bond 10.625% due 08/15/15).. $ 23,735,000 10,000,000 Repurchase Agreement dated 12/29/95 with Morgan Stanley 6.200% due 01/02/96; maturity amount $10,006,889; (Collateralized by $11,568,000 Federal National Mortgage Association 9.000% due 03/01/25)............... 10,000,000 -------------- Total short-term securities... 33,735,000 -------------- --------------
DIVERSIFICATION OF ASSETS: Total common stocks.......................... 94.1 % $ 646,020,448 Total non-convertible preferred stocks....... 0.7 4,587,250 Total short term securities.................. 4.9 33,735,000 ------ -------------- Total investment in securities **(Identified cost $620,491,037)........... 99.7% 684,342,698 Excess of cash and receivables over liabilities................................ 0.3 2,132,507 ------ -------------- Net Assets (Applicable to $1.30569 per share based on 525,757,191 shares outstanding)... 100.0% $ 686,475,205 ------ -------------- ------ -------------- SUMMARY OF SHAREHOLDERS' EQUITY Capital stock, par value $.10 per share authorized 1,500,000,000 shares, outstanding 525,757,191 shares............................................. $ 52,575,719 Capital surplus...................................... 549,706,663 Undistributed net realized gain on investments....... 20,401,743 Unrealized appreciation of investments............... 63,851,658 Unrealized (depreciation) on forward currency contracts.......................................... (58,771) Unrealized (depreciation) on translation on other assets and liabilities in foreign currencies....... (1,807) -------------- Net assets, applicable to shares outstanding......... $ 686,475,205 -------------- --------------
* Non-income producing during period. ** Aggregate cost for Federal income tax purposes. FORWARD CURRENCY CONTRACTS -- NOTE 2 -- OUTSTANDING AT DECEMBER 31, 1995
TOTAL AGGREGATE DELIVERY UNREALIZED DESCRIPTION VALUE FACE VALUE DATE APPREC./(DEPREC.) - ------------------------------ ---------- ---------- --------- ----------------- Swiss Franc (Sell) $7,540,586 $7,500,000 03/27/96 $ (40,586) French Frank (Sell) 12,503,298 12,500,000 05/10/96 (3,298) Dutch Guilder (Sell) 5,014,887 5,000,000 03/27/96 (14,887) -------- $ (58,771) -------- --------
99 HARTFORD DIVIDEND AND GROWTH FUND, INC. STATEMENT OF NET ASSETS DECEMBER 31, 1995
SHARES MARKET VALUE - ----------- -------------- COMMON STOCKS -- 95.5% COMPUTER & OFFICE EQUIPMENT -- 1.5% 28,400 Xerox......................... $ 3,890,800 -------------- CONSUMER DURABLES -- 1.5% 136,200 Ford Motor Co................. 3,949,800 -------------- CONSUMER NON-DURABLES -- 9.7% 37,400 Avon Products................. 2,819,025 26,700 Colgate Palmolive Co.......... 1,875,675 29,100 Eastman Kodak................. 1,949,700 129,150 Flowers Industries, Inc....... 1,565,944 114,500 Interstate Bakeries........... 2,561,937 42,700 Kimberly Clark Corp........... 3,533,425 94,900 Philip Morris................. 8,588,450 88,800 RJR Nabisco Holdings.......... 2,741,700 4,270 Schweitzer Mauduit International............... 98,744 4,000 Universal Corp................ 97,500 -------------- 25,832,100 -------------- ENERGY AND SERVICES -- 12.0% 89,400 Amoco Corporation............. 6,425,625 73,400 Exxon......................... 5,881,175 78,400 Pennzoil Co................... 3,312,400 92,100 Phillips Petroleum............ 3,142,912 82,300 Texaco Inc.................... 6,460,550 188,300 USX-Marathon Group............ 3,671,850 102,800 Unocal Corp................... 2,994,050 -------------- 31,888,562 -------------- FINANCIAL SERVICES -- 15.7% 93,600 Allstate Corp................. 3,849,300 77,200 American Express Co........... 3,194,150 70,000 Citicorp...................... 4,707,500 191,200 First Bank System Inc......... 9,488,300 143,700 First Union Corporation....... 7,993,313 125,600 Nationsbank Corp.............. 8,744,900 39,500 Patriot American Hospitality................. 1,017,125 76,000 Safeco Corp................... 2,622,000 -------------- 41,616,588 -------------- HEALTH CARE -- 16.7% 71,100 American Home Products Corp........................ 6,896,700 81,100 C R Bard Inc.................. 2,615,475 94,500 Baxter International.......... 3,957,187 70,500 Bristol-Myers Squibb Company..................... 6,054,188 137,600 Merck & Co., Inc.............. 9,047,200 124,000 Pfizer, Inc................... 7,812,000 84,300 Warner-Lambert Company........ 8,187,638 -------------- 44,570,388 -------------- INDUSTRIAL MATERIALS -- 6.6% 55,400 Albemarle Corp................ 1,073,375 34,000 Dow Chemical.................. 2,392,750 37,400 Dupont EI De Nemours.......... 2,613,325 97,400 International Paper Co........ 3,689,025 63,200 Nalco Chemical Co............. 1,903,900 36,400 PPG Industries, Inc........... 1,665,300 57,900 Weyerhaeuser Company.......... 2,504,175 INDUSTRIAL MATERIALS -- (CONTINUED) 52,000 Witco Chemical Corp........... $ 1,521,000 -------------- 17,362,850 -------------- MANUFACTURING -- 8.3% 16,000 Cooper Industries............. 588,000 7,200 Eaton Corp.................... 386,100 87,630 General Electric.............. 6,309,360 53,200 Minnesota Mining & Manufacturing Co............ 3,524,500 78,500 Northrop Grumman Corp......... 5,024,000 29,800 Sundstrand Corp............... 2,097,175 22,600 TRW, Inc...................... 1,751,500 46,400 Tenneco, Inc.................. 2,302,600 -------------- 21,983,235 -------------- MEDIA & SERVICES -- 1.5% 19,700 Dun & Bradstreet Corp......... 1,275,575 43,500 Gannett Co., Inc.............. 2,669,813 -------------- 3,945,388 -------------- REAL ESTATE -- 0.1% 9,600 Starwood Lodging Trust........ 285,600 -------------- RETAIL -- 3.3% 92,500 May Department Stores Co...... 3,908,125 102,400 Mercantile Stores, Inc........ 4,736,000 -------------- 8,644,125 -------------- UTILITY -- 18.6% 50,800 AT&T Corp..................... 3,289,300 24,800 Bell Atlantic Corp............ 1,658,500 63,000 Bell South Corp............... 2,740,500 29,100 CMS Energy Corp............... 869,362 64,700 Carolina Power And Lighting... 2,232,150 51,900 Cincinnati Bell Inc........... 1,803,525 61,500 Cinergy Corp.................. 1,883,438 23,400 Comsat Corp................... 435,825 71,300 DPL Inc....................... 1,764,675 54,250 DQE Inc....................... 1,668,188 31,100 Equitable Resources........... 971,875 54,000 Florida Power & Light Group Inc......................... 2,504,250 47,500 Frontier Corp................. 1,425,000 39,700 GTE Corp...................... 1,746,800 43,000 N E Electric System........... 1,703,875 53,600 NYNEX Corporation............. 2,894,400 30,800 Pacific Gas & Electric Company..................... 873,950 118,800 Pinnacle West Cap............. 3,415,500 45,600 Public Service Co. Of Colorado.................... 1,613,100 14,400 Questar Corp.................. 482,400 69,300 SBC Communications Inc........ 3,984,750 32,600 Sierra Pacific Res............ 762,025 35,000 Sprint Corp................... 1,395,625 114,900 Texas Utilities............... 4,725,262 24,500 Union Electric Co............. 1,022,875 89,900 Westcoast Energy Inc.......... 1,314,787 -------------- 49,181,937 -------------- Total common stocks........... $ 253,151,373 -------------- --------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 100
PRINCIPAL MARKET AMOUNT VALUE - ----------- -------------- CONVERTIBLE CORPORATE BONDS -- 0.8% TRANSPORTATION AMR Corp. $ 2,090,000 6.125% due 11/01/24......... $ 2,163,150 -------------- -------------- SHORT-TERM SECURITIES -- 6.8% 13,055,000 Repurchase Agreement dated 12/29/95 with Aubrey Lanston 5.900% due 01/02/96; maturity amount $13,063,558; (Collateralized by $13,055,000 U.S. Treasury Note 5.125% due 12/31/98)... 13,055,000 5,000,000 Repurchase Agreement dated 12/29/95 with Morgan Stanley 6.200% due 01/02/96; maturity amount $5,003,444; (Collateralized by $5,784,000 Federal National Mortgage Association 9.000% due 03/1/25)................ 5,000,000 -------------- Total short-term securities... $ 18,055,000 -------------- --------------
DIVERSIFICATION OF ASSETS: Total common stocks 95.5% $253,151,373 Total convertible corporate bonds............ 0.8 2,163,150 Total short-term securities.................. 6.8 18,055,000 ------ ------------ Total investment in securities **(Identified cost $243,108,084)........... 103.1% 273,369,523 Excess of liabilities over cash and receivables................................ (3.1) (8,299,056) ------ ------------ Net assets (Applicable to $1.31702 per share based on 201,265,170 shares outstanding)... 100.0% $265,070,467 ------ ------------ ------ ------------ SUMMARY OF SHAREHOLDERS' EQUITY: Capital stock, par value $.10 per share; authorized 750,000,000 shares; outstanding 201,265,170 shares............................................. $ 20,126,517 Capital surplus...................................... 208,122,925 Undistributed net realized gain on investments....... 6,559,586 Unrealized appreciation of investments............... 30,261,439 ------------ Net assets, applicable to shares outstanding......... $265,070,467 ------------ ------------
* Non-income producing during period. ** Aggregate cost for Federal income tax purposes. 101 HARTFORD INTERNATIONAL ADVISERS FUND, INC. STATEMENT OF NET ASSETS DECEMBER 31, 1995
MARKET SHARES VALUE - -------------- ------------- COMMON STOCKS -- 63.3% ARGENTINA -- 0.6% 4,750 Baesa ADR..................... $ 97,969 2,000 Telefonica De Argentina-ADR... 54,500 2,000 YPF S.A. Sponsored ADR........ 43,250 ------------- 195,719 ------------- AUSTRALIA -- 3.3% 7,422 Advance BK Australia.......... 59,427 28,750 Amcor Ltd..................... 202,871 39,608 Australia & New Zealand Banking..................... 185,639 20,549 Broken Hill Proprietary....... 290,005 5,369 National Australia Bank....... 48,257 4,500 Qantas Air ADR 144A........... 74,813 36,000 Westpac Banking Corp.......... 159,370 ------------- 1,020,382 ------------- AUSTRIAN -- 0.6% 1,400 EVN........................... 191,828 ------------- BELGIUM -- 0.3% 2,250 Delhaize Le Lion.............. 92,972 ------------- BRAZIL -- 0.4% 7,250 Electrobras On ADR............ 98,781 4,000 Usiminas Siderurg Minas-ADR... 32,512 ------------- 131,293 ------------- CANADA -- 1.0% 17,500 Canadian Pacific Ltd.......... 317,188 ------------- CHILE -- 0.3% 1,000 Compania de Telefon Chile-ADR................... 82,875 ------------- DENMARK -- 1.3% 8,000 Tele Danmark.................. 221,000 3,500 UniDanmark A Registered....... 173,068 ------------- 394,068 ------------- FINLAND -- 0.7% *3,000 Metsa-Serla Oy B.............. 92,221 55,000 Unitas Bank Ltd............... 138,790 ------------- 231,011 ------------- FRANCE -- 5.3% 3,500 Bank National Paris 144A...... 157,638 1,000 Canal Plus SA................. 187,171 450 Euro RSCG Worldwide........... 33,030 403 Groupe Danone................. 66,392 700 Peugeot SA.................... 92,199 3,600 Renault....................... 103,495 13,000 Rhone-Poulenc................. 278,045 *1,482 Saint Gobain.................. 163,774 1,337 Societe Generale.............. 164,868 1,700 Societe Nationale Elf Acquitaine.................. 125,058 1,000 Technip....................... 68,711 3,293 Total SA...................... 221,901 ------------- 1,662,282 ------------- GERMANY -- 3.8% 700 Bayer AG...................... 185,369 150 Beiersdorf.................... 102,747 245 Daimler-Benz AG Dem........... 123,352 580 Degussa....................... 194,812 3,250 Deutsche Bank AG Dem.......... 153,912 280 Karstadt AG................... 114,492 450 Mannesmann AG................. 142,855 4,000 Veba.......................... 170,792 ------------- 1,188,331 ------------- HONG KONG -- 2.7% 6,000 China Light Power............. $ 27,624 56,759 Hong Kong Telecommunica....... 101,297 40,000 Hutchison Whampoa Ltd......... 243,647 28,000 Sun Hung Kai.................. 229,033 31,000 Swire Pacific Ltd............. 240,543 ------------- 842,144 ------------- INDIA -- 0.1% 10,000 Indo Gulf GDR................. 14,503 2,000 Reliance Inds GDS............. 23,547 ------------- 38,050 ------------- INDONESIA -- 0.4% 19,000 Jaya Real Property............ 51,509 10,000 Jaya Real Property-Foreign.... 27,110 12,000 Semen Gresik.................. 33,581 ------------- 112,200 ------------- ITALY -- 1.5% 100,000 Banca Comml Italiana.......... 213,543 58,500 Stet.......................... 165,458 62,000 Telecom Italia SPA............ 96,466 ------------- 475,467 ------------- JAPAN -- 17.3% 7,000 Canon Sales................... 186,116 15,000 Chichibu Oneda Cement......... 79,909 24,000 Chugai Pharmaceutical......... 229,489 11,000 Dai Nippon Printing........... 186,116 10 East Japan Railway............ 48,535 6,000 Home Wide Corp................ 70,773 3,000 Ito-Yokado Ltd................ 184,473 11,000 Kajima Corp................... 108,479 34,000 Kawasaki Heavy Industries..... 156,144 33,000 Kawasaki Steel Corp........... 114,860 27,000 Keio Teito Electric Rai....... 156,889 2,000 Kyoritsu Air Tech............. 21,657 2,000 Mabuchi Motor................. 124,142 9,000 Matsushita Electric Co........ 146,186 10,000 Minebea Co., Ltd.............. 83,728 6,000 Mitsubishi Bank Ltd........... 140,965 18,000 Mitsubishi Corp............... 221,019 3,000 Mitsui Petrochemical.......... 24,509 2,000 Murata Manufacturing Co....... 73,480 3,000 Nihon Jumbo Co., Ltd.......... 104,709 12,000 Nippon Express................ 115,324 20 Nippon Telegraph & Telephone................... 161,462 *59,000 NKK Corporation............... 158,581 10,000 Nomura Securities............. 217,538 2,000 Orix Corp..................... 82,181 700 Riso Kagaku................... 58,948 15,000 Sakura Bank................... 189,984 8,000 Sankyo........................ 179,445 7,000 Sanwa Bank Ltd................ 142,125 2,000 Sanyo Shinpan Financial Co.... 164,362 3,000 Secom......................... 208,257 2,000 Seven Eleven.................. 140,772 3,000 Shimamura Co. Ltd............. 115,730 100 Shohkoh Fund.................. 18,757 4,000 Showa Corporation............. 30,591 2,000 Sony Corp..................... 119,694 17,000 Sumitomo Marsh & Fire......... 139,379 22,000 Sumitomo Realty............... 155,274 11,000 Sumitomo Trust & Banking...... 155,274 11,000 Toda Construction Co.......... 95,185 4,000 Tohoku Electric Power......... 96,297 17,000 Tokio Marine & Fire Insurance................... 221,889 100 Tsutsumi Jewelry.............. 4,999 ------------- 5,434,226 -------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 102
MARKET SHARES VALUE - -------------- ------------- COMMON STOCKS -- (CONTINUED) MALAYSIA -- 1.0% 21,000 Resort World.................. $ 112,454 74,000 Sime Darby Berhad............. 196,677 ------------- 309,131 ------------- MEXICO -- 0.6% 3,000 Cemex SA...................... 42,911 20,000 Femsa SA...................... 46,263 *9,000 Grupo Carso SA................ 48,070 7,650 Transportation-Maritima....... 57,377 ------------- 194,621 ------------- NETHERLANDS -- 2.7% 7,500 Elesevier..................... 99,782 5,325 International Nederlanden..... 354,890 3,000 Vendex International.......... 88,965 1,350 Unilever...................... 189,260 700 Verenigd Bezit................ 95,872 ------------- 828,769 ------------- NEW ZEALAND -- 1.2% 31,000 Air New Zealand Class B....... 105,394 268,000 Brierley Investments.......... 212,017 28,000 Carter Holt................... 60,411 ------------- 377,822 ------------- NORWAY -- 2.5% 33,200 Christiana Bank............... 77,501 5,344 Hafslund Nyco................. 139,500 4,500 Kvaerner...................... 158,991 3,650 Orkla A/S A................... 181,349 17,500 Saga Petro.................... 233,241 ------------- 790,582 ------------- PHILIPPINES -- 0.7% 12,000 Philippine National........... 132,926 *80,000 Pilipino Telephone............ 80,978 ------------- 213,904 ------------- PORTUGAL -- 0.2% *3,000 Portugal Telecom S.A. ADR..... 57,000 ------------- SINGAPORE -- 2.4% 8,000 Development Bank of Singapore................... 99,555 34,000 Keppel Corp................... 302,906 14,000 OCBC Foreign.................. 175,210 19,000 United Overseas Bank.......... 182,705 ------------- 760,376 ------------- SPAIN -- 3.5% 7,850 Repsol........................ 258,069 3,150 Empresa Nacional De........... 180,338 1,750 Acerinox SA................... 176,481 6,100 Banco Bilbao Vizcaya.......... 219,093 1,000 Empresa Nac de Elec........... 56,464 10,000 Iberdrola SA.................. 91,230 8,000 Telefonica de Espana.......... 110,464 ------------- 1,092,139 ------------- SWEDEN -- 1.1% 2,500 Astra A Free.................. 99,597 7,700 Avesta Sheffield.............. 67,719 *8,000 BT Industries 144A............ 87,796 *7,000 Stora Koppabergs A............ 82,083 ------------- 337,195 ------------- SWITZERLAND -- 1.9% 195 Ciba Geigy AG................. 171,616 225 Nestle SA..................... 248,938 315 Sulzer AG-Part - CERT......... 167,975 ------------- 588,529 ------------- THAI-BAT -- 0.6% 75,000 Bangkok Metro Bank............ $ 69,968 3,000 Bangkok Bank.................. 36,443 5,000 Siam Commerical............... 65,899 ------------- 172,310 ------------- UNITED KINGDOM -- 5.3% 18,000 Bass.......................... 200,807 14,400 Body Shop International....... 33,961 153,000 Bet PLC....................... 301,490 11,000 British Telecom Co. PLC....... 60,419 70,000 British Steel PLC............. 176,765 4,000 Associated Brit Food.......... 22,901 24,000 Northern Foods PLC............ 63,677 12,147 Powergen PLC.................. 100,358 80,000 Vodafone Group PLC............ 286,113 25,000 Rank Organization............. 180,760 25,500 Royal Insurance Holding....... 151,141 20,000 Tomkins PLC................... 87,510 ------------- 1,665,902 ------------- Total Common Stocks........... $ 19,798,316 ------------- ------------- NON-CONVERTIBLE PREFERRED STOCK -- 0.5% CONSUMER DURABLES 4,000 Nokia PFD ADS................. 155,500 ------------- ------------- PRINCIPAL AMOUNT - -------------- FOREIGN GOVERNMENT BONDS -- 27.7% AUSTRALIA -- 1.1% $ 415,000 Australian Commonwealth 9.750% due 03/15/02..... 337,345 ------------- AUSTRIA -- 0.5% Austria Republic 1,500,000 6.875% due 06/20/05..... 152,849 ------------- BELGIUM -- 1.3% Belgium Government 5,000,000 7.000% due 05/15/06..... 171,617 3,500,000 7.250% due 04/29/04..... 123,949 3,050,000 9.000% due 06/27/01..... 118,746 ------------- 414,312 ------------- CANADA -- 2.1% Canada Government 340,000 6.500% due 06/01/04..... 240,783 100,000 8.000% due 06/01/23..... 76,805 225,000 9.000% due 12/01/04..... 185,780 200,000 9.750% due 06/01/01..... 166,825 ------------- 670,193 ------------- DENMARK -- 1.2% 910,000 8.000% due 06/15/03 - 03/15/06............... 173,087 1,015,000 9.000% due 11/15/98..... 198,806 ------------- 371,893 ------------- FINLAND -- 0.9% Finnish Government 1,000,000 10.000% due 09/15/01.... 266,493 ------------- FRANCE -- 2.6% France O.A.T. 926,000 5.500% due 04/25/04..... 176,493 2,166,000 8.500% due 11/25/02..... 494,489 626,000 9.500% due 01/25/01..... 147,227 ------------- 818,209 ------------- GERMANY -- 3.1% German Government 325,000 6.250% DUE 01/04/24..... 210,527
103 HARTFORD INTERNATIONAL ADVISERS FUND, INC. STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 1995
PRINCIPAL MARKET AMOUNT VALUE - ----------- ------------- FOREIGN GOVERNMENT BONDS -- (CONTINUED) GERMANY -- (CONTINUED) 300,000 7.500% due 11/11/04..... 229,777 German Federal Unity 675,000 8.500% due 02/20/01..... $ 538,263 ----------- 978,567 ----------- ITALY -- 2.8% 425,000,000 9.000% due 10/01/03....... 246,299 1,055,000,000 8.500% due 01/01/99 - 08/01/99................ 635,049 ------------ 881,348 ------------ JAPAN -- 5.9% European Investment Bank 4,000,000 6.625% due 03/15/00...... 46,166 Japan 145 Government National 146,000,000 5.500% due 03/20/02...... 1,652,822 Japan - 20 12,000,000 5.600% due 09/20/12...... 143,610 ------------ 1,842,598 ------------ NETHERLANDS -- 0.8% Netherlands Government 100,000 5.750% due 01/15/04....... 61,797 80,000 7.000% due 06/15/05....... 53,192 175,000 9.000% due 05/15/00....... 125,802 ------------ 240,791 ------------ NEW ZEALAND -- 0.6% New Zealand Government 265,000 8.000% due 07/15/98...... 174,151 ------------ SPAIN -- 1.2% Spanish Government 13,700,000 10.000% due 02/28/05...... 114,177 28,500,000 12.250% due 03/25/00...... 256,074 ------------ 370,251 ------------ SWEDEN -- 1.1% Swedish Government 2,200,000 10.250% due 05/05/00..... 354,997 ------------ UNITED KINGDOM -- 2.5% United Kingdom Treasury Gilt 180,000 7.000% due 11/06/01...... 279,635 305,000 8.000% due 06/10/03...... 494,679 ------------ 774,314 ------------ Total foreign government bonds.................... $8,648,311 ------------ ------------ SHORT-TERM SECURITIES -- 9.7% $ 2,030,000 Repurchase Agreement dated 12/29/95 with Swiss Bank Corp. 5.850% due 01/02/96; maturity $2,031,320; (Collateralized by $1,755,000 US Treasury Bond 7.500% due 11/15/16). $2,030,000 1,000,000 Repurchase Agreement dated 12/29/95 with Morgan Stanley 6.200% due 01/02/96; maturity $1,000,689; (Collateralized by $1,125,000 Federal National Mortgage Association 9.000% due 03/01/25)................ 1,000,000 ------------ Total short-term securities.............. $3,030,000 ------------ ------------
DIVERSIFICATION OF ASSETS: Total Common Stocks.......................... 63.3 % $ 19,798,316 Total Non-Convertible Preferred Stock........ 0.5 155,500 Total Foreign Government Bonds............... 27.7 8,648,311 Total Short Term Securities.................. 9.7 3,030,000 ------ -------------- Total investment in securities **(Identified cost $30,132,432)............ 101.2% 31,632,127 Excess of liabilities over cash and receivables................................ (1.2) (367,962 ) ------ -------------- Net Assets (Applicable to $1.10903 per share based on 28,190,650 shares outstanding).... 100.0% $ 31,264,165 ------ -------------- ------ -------------- SUMMARY OF SHAREHOLDERS' EQUITY: Capital stock, par value $.10 per share authorized 750,000,000 shares, 28,190,650 outstanding shares............................................. $ 2,819,065 Capital surplus...................................... 26,945,184 Undistributed net realized (loss) on investments..... (3,983 ) Unrealized appreciation of investments............... 1,499,263 Unrealized appreciation on forward currency contracts.......................................... 5,374 Unrealized depreciation on translation on other assets and liabilities in foreign currencies....... (738 ) -------------- Net assets, applicable to shares outstanding......... $ 31,264,165 -------------- --------------
* Non-income producing during period. ** Aggregate cost for Federal income tax purposes. FORWARD CURRENCY CONTRACTS -- NOTE 2 -- OUTSTANDING AT DECEMBER 31, 1995
UNREALIZED AGGREGATE DELIVERY APPRECIATION/ TOTAL VALUE FACE VALUE DATE (DEPRECIATION) ----------- ----------- --------- ------------- German Deutschemarks (Buy) $ 116,580 $ 115,807 01/08/96 773 Austrian Schilling (Sell) 152,506 152,778 01/10/96 272 Australian Dollars (Sell) 333,572 334,459 01/10/96 887 Belgian Francs (Sell) 413,893 417,579 01/10/96 3,686 Canadian Dollars (Sell) 662,563 662,787 01/10/96 224 German Deutschemarks (Sell) 977,927 974,489 03/19/96 (3,438) Danish Krone (Sell) 368,858 366,995 01/10/96 (1,862) Spanish Pesetas (Sell) 362,957 358,014 01/10/96 (4,944) Finnish Markkas (Sell) 265,983 264,642 01/17/96 (1,341) French Francs (Sell) 817,572 807,349 01/10/96 (10,223) British Pounds (Sell) 767,500 756,360 01/10/96 (11,140) Italian Lira (Sell) 867,129 857,241 01/10/96 (9,888) Japanese Yen (Sell) 1,872,364 1,911,948 01/10/96 39,583 Dutch Guilders (Sell) 241,652 240,450 03/19/96 (1,201) Swedish Kronas (Sell) 351,622 355,607 01/10/96 3,985 ------------- 5,374 ------------- -------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 104 HARTFORD MUTUAL FUNDS STATEMENT OF OPERATIONS, STATEMENT OF CHANGES IN NET ASSETS, NOTES TO FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS HARTFORD MUTUAL FUNDS STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995
HARTFORD HARTFORD HVA HARTFORD BOND STOCK MONEY MARKET ADVISERS FUND, INC. FUND, INC. FUND, INC. FUND, INC. -------------- ------------- ------------ ------------- INVESTMENT INCOME: Dividends.............. $ -- $ 34,303,856 $ -- $ 52,931,923 Interest............... 19,767,803 5,642,049 18,669,552 97,454,258 Less: Foreign tax withheld.............. -- (36,960) -- (42,320) -------------- ------------- ------------ ------------- Total income......... 19,767,803 39,908,945 18,669,552 150,343,861 -------------- ------------- ------------ ------------- EXPENSES: Investment advisory services.............. 906,000 4,134,925 762,534 16,044,763 Administrative services.............. 491,868 2,586,517 542,895 6,244,398 Accounting services.... 26,732 124,381 34,341 325,104 Custodian fees......... 11,621 20,897 4,563 14,335 Board of directors..... 2,648 12,370 3,423 32,334 Other.................. 37,458 143,590 35,764 374,525 -------------- ------------- ------------ ------------- Total expenses....... 1,476,327 7,022,680 1,383,520 23,035,459 -------------- ------------- ------------ ------------- Net investment income................ 18,291,476 32,886,265 17,286,032 127,308,402 -------------- ------------- ------------ ------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on security transactions.......... 6,010,729 80,821,093 -- 97,284,118 Net realized gain (loss) on futures contracts............. -- -- -- -- Net realized gain (loss) on options contracts............. -- -- -- -- Net unrealized appreciation (depreciation) of investments during the period................ 22,790,429 308,861,831 -- 649,451,880 -------------- ------------- ------------ ------------- Net gain (loss) on investments........... 28,801,158 389,682,924 -- 746,735,998 -------------- ------------- ------------ ------------- Net increase (decrease) in net assets resulting from operations............ $ 47,092,634 $ 422,569,189 $17,286,032 $874,044,400 -------------- ------------- ------------ ------------- -------------- ------------- ------------ -------------
* From inception, March 1, 1995, to December 31, 1995. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 106
HARTFORD U.S. HARTFORD HARTFORD HARTFORD HARTFORD GOVERNMENT CAPITAL MORTGAGE HARTFORD INTERNATIONAL DIVIDEND MONEY MARKET APPRECIATION SECURITIES INDEX OPPORTUNITIES AND GROWTH FUND, INC. FUND, INC. FUND, INC. FUND, INC. FUND, INC. FUND, INC. ------------ ------------- ------------- ----------- ------------------ ----------- INVESTMENT INCOME: Dividends.............. $ -- $ 15,430,064 $ -- $ 6,340,261 $13,859,003 $4,362,923 Interest............... 577,594 11,141,268 22,005,900 59,787 3,048,459 494,730 Less: Foreign tax withheld.............. -- (387,564) -- (31,097) (2,185,709) (6,663) ------------ ------------- ------------- ----------- ------------------ ----------- Total income......... 577,594 26,183,768 22,005,900 6,368,951 14,721,753 4,850,990 ------------ ------------- ------------- ----------- ------------------ ----------- EXPENSES: Investment advisory services.............. 24,282 7,715,873 790,058 447,326 3,213,660 757,373 Administrative services.............. 16,998 2,814,856 553,041 391,411 1,045,064 230,541 Accounting services.... 1,036 123,003 33,072 16,914 59,753 5,583 Custodian fees......... 10,947 60,354 23,581 (8,132) 727,012 13,009 Board of directors..... 104 12,272 3,264 1,679 5,977 566 Other.................. 1,591 145,960 68,954 21,863 85,826 11,107 ------------ ------------- ------------- ----------- ------------------ ----------- Total expenses....... 54,958 10,872,318 1,471,970 871,061 5,137,292 1,018,179 ------------ ------------- ------------- ----------- ------------------ ----------- Net investment income................ 522,636 15,311,450 20,533,930 5,497,890 9,584,461 3,832,811 ------------ ------------- ------------- ----------- ------------------ ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on security transactions.......... -- 127,384,090 5,901,957 461,701 21,336,447 6,559,586 Net realized gain (loss) on futures contracts............. -- 18,046,253 39,780 6,181,218 -- -- Net realized gain (loss) on options contracts............. -- -- 30,406 -- -- -- Net unrealized appreciation (depreciation) of investments during the period................ -- 236,498,480 20,383,033 55,250,626 48,716,467 31,161,907 ------------ ------------- ------------- ----------- ------------------ ----------- Net gain (loss) on investments........... -- 381,928,823 26,355,176 61,893,545 70,052,914 37,721,493 ------------ ------------- ------------- ----------- ------------------ ----------- Net increase (decrease) in net assets resulting from operations............ $522,636 $397,240,273 $ 46,889,106 $67,391,435 $79,637,375 $41,554,304 ------------ ------------- ------------- ----------- ------------------ ----------- ------------ ------------- ------------- ----------- ------------------ ----------- HARTFORD INTERNATIONAL ADVISERS FUND, INC.* ------------- INVESTMENT INCOME: Dividends.............. $ 227,008 Interest............... 372,698 Less: Foreign tax withheld.............. (30,384) ------------- Total income......... 569,322 ------------- EXPENSES: Investment advisory services.............. -- Administrative services.............. 24,683 Accounting services.... 809 Custodian fees......... 55,080 Board of directors..... 100 Other.................. 14,872 ------------- Total expenses....... 95,544 ------------- Net investment income................ 473,778 ------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on security transactions.......... 473,990 Net realized gain (loss) on futures contracts............. -- Net realized gain (loss) on options contracts............. -- Net unrealized appreciation (depreciation) of investments during the period................ 1,503,899 ------------- Net gain (loss) on investments........... 1,977,889 ------------- Net increase (decrease) in net assets resulting from operations............ $2,451,667 ------------- -------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 107 HARTFORD MUTUAL FUNDS STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 1995
HVA HARTFORD HARTFORD MONEY HARTFORD BOND STOCK MARKET ADVISERS FUND, INC. FUND, INC. FUND, INC. FUND, INC. -------------- ------------- ----------- ------------- OPERATIONS: Net investment income................ $ 18,291,476 $ 32,886,265 $17,286,032 $127,308,402 Net realized gain (loss) on security transactions.......... 6,010,729 80,821,093 -- 97,284,118 Net realized gain (loss) on futures contracts............. -- -- -- -- Net unrealized appreciation (depreciation) of investments during the period................ 22,790,429 308,861,831 -- 649,451,880 -------------- ------------- ----------- ------------- Net increase (decrease) in net assets resulting from operations..... 47,092,634 422,569,189 17,286,032 874,044,400 DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income................ (18,291,476) (32,886,265) (17,286,032) (127,308,402) Net realized gain on security transactions.......... -- (47,489,646) -- (36,509,652) CAPITAL SHARE TRANSACTIONS: Proceeds from Fund shares sold........... 227,913,447 668,241,451 1,501,677,031 462,346,769 Net asset value of Fund shares issued upon reinvestment of dividends and capital gains................. 18,291,476 80,375,915 17,286,033 163,818,063 Cost of Fund shares redeemed.............. (179,969,221) (377,085,012) (1,500,719,153) (107,656,490) -------------- ------------- ----------- ------------- Net increase (decrease) in net assets resulting from capital share transactions.... 66,235,702 371,532,354 18,243,911 518,508,342 -------------- ------------- ----------- ------------- Total increase (decrease) in net assets.............. 95,036,860 713,725,632 18,243,911 1,228,734,688 NET ASSETS: Beginning of period.... 247,458,087 1,163,157,982 321,464,672 3,034,034,061 -------------- ------------- ----------- ------------- End of period.......... $342,494,947 $1,876,883,614 $339,708,583 4$,262,768,749 -------------- ------------- ----------- ------------- -------------- ------------- ----------- ------------- CHANGE IN CAPITAL SHARES OUTSTANDING: Shares sold............ 230,010,396 209,187,665 1,501,677,031 249,891,294 Shares issued upon reinvestment of dividends and capital gains................. 18,548,321 27,804,998 17,286,033 93,801,847 Shares redeemed........ (182,704,340) (120,045,047) (1,500,719,153) (62,784,455) -------------- ------------- ----------- ------------- Net increase (decrease) in shares outstanding........... 65,854,377 116,947,616 18,243,911 280,908,686 -------------- ------------- ----------- ------------- -------------- ------------- ----------- -------------
* From inception, March 1, 1995, to December 31, 1995. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 108
HARTFORD U.S. HARTFORD HARTFORD HARTFORD HARTFORD GOVERNMENT CAPITAL MORTGAGE HARTFORD INTERNATIONAL DIVIDEND MONEY MARKET APPRECIATION SECURITIES INDEX OPPORTUNITIES AND GROWTH FUND, INC. FUND, INC. FUND, INC. FUND, INC. FUND, INC. FUND, INC. -------------------- ------------- ------------- ----------- ------------------ ----------- OPERATIONS: Net investment income................ $522,636 $ 15,311,450 $ 20,533,930 $ 5,497,890 $ 9,584,461 $3,832,811 Net realized gain (loss) on security transactions.......... -- 127,384,090 5,901,957 461,701 21,336,447 6,559,586 Net realized gain (loss) on futures contracts............. -- 18,046,253 70,186 6,181,218 -- -- Net unrealized appreciation (depreciation) of investments during the period................ -- 236,498,480 20,383,033 55,250,626 48,716,467 31,161,907 ----------- ------------- ------------- ----------- ------------------ ----------- Net increase (decrease) in net assets resulting from operations..... 522,636 397,240,273 46,889,106 67,391,435 79,637,375 41,554,304 DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income................ (522,636) (15,311,450) (20,533,930) (5,497,890) (9,584,461) (3,832,811) Net realized gain on security transactions.......... -- (63,784,485) -- (65,176) (5,087,710) -- CAPITAL SHARE TRANSACTIONS: Proceeds from Fund shares sold........... 3,856,273 1,268,592,773 26,917,379 473,229,846 97,286,805 174,323,932 Net asset value of Fund shares issued upon reinvestment of dividends and capital gains................. 522,636 79,095,935 20,533,929 5,563,067 14,672,173 3,757,111 Cost of Fund shares redeemed.............. (3,927,941) (666,584,981) (50,387,738) (380,028,762) (54,214,080) (5,797,586) ----------- ------------- ------------- ----------- ------------------ ----------- Net increase (decrease) in net assets resulting from capital share transactions.... 450,968 681,103,727 (2,936,430) 98,764,151 57,744,898 172,283,457 ----------- ------------- ------------- ----------- ------------------ ----------- Total increase (decrease) in net assets.............. 450,968 999,248,065 23,418,746 160,592,520 122,710,102 210,004,950 NET ASSETS: Beginning of period.... 9,619,299 1,158,643,638 304,146,567 157,660,372 563,765,103 55,065,517 ----------- ------------- ------------- ----------- ------------------ ----------- End of period.......... 10,$070,267 $2,157,891,703 $327,565,313 $318,252,892 $686,475,205 $265,070,467 ----------- ------------- ------------- ----------- ------------------ ----------- ----------- ------------- ------------- ----------- ------------------ ----------- CHANGE IN CAPITAL SHARES OUTSTANDING: Shares sold............ 3,856,273 393,716,534 25,766,526 251,812,101 70,597,149 147,459,686 Shares issued upon reinvestment of dividends and capital gains................. 522,636 28,381,165 19,717,253 3,055,911 12,477,963 3,182,667 Shares redeemed........ (3,927,941) (208,868,838) (48,682,017) (201,506,805) (45,827,064) (4,769,969) ----------- ------------- ------------- ----------- ------------------ ----------- Net increase (decrease) in shares outstanding........... 450,968 213,228,861 (3,198,238) 53,361,207 46,248,048 145,872,384 ----------- ------------- ------------- ----------- ------------------ ----------- ----------- ------------- ------------- ----------- ------------------ ----------- HARTFORD INTERNATIONAL ADVISERS FUND, INC.* ------------- OPERATIONS: Net investment income................ $473,778 Net realized gain (loss) on security transactions.......... 473,990 Net realized gain (loss) on futures contracts............. -- Net unrealized appreciation (depreciation) of investments during the period................ 1,503,899 ------------- Net increase (decrease) in net assets resulting from operations..... 2,451,667 DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income................ (473,778) Net realized gain on security transactions.......... (477,974) CAPITAL SHARE TRANSACTIONS: Proceeds from Fund shares sold........... 30,838,557 Net asset value of Fund shares issued upon reinvestment of dividends and capital gains................. 478,342 Cost of Fund shares redeemed.............. (1,552,649) ------------- Net increase (decrease) in net assets resulting from capital share transactions.... 29,764,250 ------------- Total increase (decrease) in net assets.............. 31,264,165 NET ASSETS: Beginning of period.... -- ------------- End of period.......... 31,$264,165 ------------- ------------- CHANGE IN CAPITAL SHARES OUTSTANDING: Shares sold............ 29,196,317 Shares issued upon reinvestment of dividends and capital gains................. 434,386 Shares redeemed........ (1,440,053) ------------- Net increase (decrease) in shares outstanding........... 28,190,650 ------------- -------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 109 HARTFORD MUTUAL FUNDS STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31, 1994
HARTFORD HARTFORD HVA BOND STOCK MONEY MARKET FUND, INC. FUND, INC. FUND, INC. ---------------- --------------- --------------- OPERATIONS: Net investment income................ $ 15,499,377 $ 23,456,619 $ 11,242,769 Net realized gain (loss) on security transactions.......... (15,502,624) 47,489,646 -- Net realized gain (loss) on futures contracts............. (1,484,713) -- -- Net realized gain (loss) on options contracts............. -- -- -- Net unrealized appreciation (depreciation) of investments during the period................ (8,713,699) (91,880,275) -- ---------------- --------------- --------------- Net increase (decrease) in net assets resulting from operations............ (10,201,659) (20,934,010) 11,242,769 DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income................ (15,499,377) (23,456,619) (11,242,769) Net realized gain on security transactions.......... (4,467,655) (59,838,405) -- CAPITAL SHARE TRANSACTIONS: Proceeds from Fund shares sold........... 321,606,810 491,044,914 1,169,307,801 Net asset value of Fund shares issued upon reinvestment of dividends and capital gains................. 19,967,032 83,295,024 11,242,769 Cost of Fund shares redeemed.............. (303,548,769) (275,377,788) (1,093,173,662) ---------------- --------------- --------------- Net increase (decrease) in net assets resulting from capital share transactions.... 38,025,073 298,962,150 87,376,908 ---------------- --------------- --------------- Total increase (decrease) in net assets.............. 7,856,382 194,733,116 87,376,908 NET ASSETS: Beginning of period.... 239,601,705 968,424,866 234,087,764 ---------------- --------------- --------------- End of period.......... $ 247,458,087 $ 1,163,157,982 $ 321,464,672 ---------------- --------------- --------------- ---------------- --------------- --------------- CHANGE IN CAPITAL SHARES OUTSTANDING: Shares sold............ 324,129,384 170,123,593 1,169,307,801 Shares issued upon reinvestment of dividends and capital gains................. 20,471,697 28,261,576 11,242,769 Shares redeemed........ (306,837,163) (95,662,565) (1,093,173,662) ---------------- --------------- --------------- Net increase (decrease) in shares outstanding........... 37,763,918 102,722,604 87,376,908 ---------------- --------------- --------------- ---------------- --------------- ---------------
* From inception, March 8, 1994, to December 31, 1994. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 110
HARTFORD U.S. HARTFORD HARTFORD HARTFORD HARTFORD GOVERNMENT CAPITAL MORTGAGE HARTFORD INTERNATIONAL ADVISERS MONEY MARKET APPRECIATION SECURITIES INDEX OPPORTUNITIES FUND, INC. FUND, INC. FUND, INC. FUND, INC. FUND, INC. FUND, INC. ---------------- ------------ --------------- -------------- ------------- ------------- OPERATIONS: Net investment income................ $ 95,563,451 $ 343,046 $ 3,956,139 $ 22,008,530 $ 3,760,674 $ 6,563,325 Net realized gain (loss) on security transactions.......... 36,509,652 -- 65,960,774 (18,809,782) 303,039 8,495,707 Net realized gain (loss) on futures contracts............. -- -- (2,071,865) (40,932) 60,051 -- Net realized gain (loss) on options contracts............. -- -- -- 26,563 -- -- Net unrealized appreciation (depreciation) of investments during the period................ (211,113,159) -- (40,815,773) (9,086,028) (2,407,858) (25,853,182) ---------------- ------------ --------------- -------------- ------------- ------------- Net increase (decrease) in net assets resulting from operations............ (79,040,056) 343,046 27,029,275 (5,901,649) 1,715,906 (10,794,150) DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income................ (95,563,451) (343,046) (3,956,139) (22,008,530) (3,760,674) (6,563,325) Net realized gain on security transactions.......... (75,830,481) -- (71,271,919) (1,593,324) -- -- CAPITAL SHARE TRANSACTIONS: Proceeds from Fund shares sold........... 753,833,772 3,263,991 882,948,421 19,488,680 94,987,497 311,466,613 Net asset value of Fund shares issued upon reinvestment of dividends and capital gains................. 171,393,932 343,046 75,228,058 23,601,854 3,638,667 6,509,276 Cost of Fund shares redeemed.............. (67,309,913) (3,437,141) (530,237,732) (74,638,761) (79,317,298) (18,461,122) ---------------- ------------ --------------- -------------- ------------- ------------- Net increase (decrease) in net assets resulting from capital share transactions.... 857,917,791 169,896 427,938,747 (31,548,227) 19,308,866 299,514,767 ---------------- ------------ --------------- -------------- ------------- ------------- Total increase (decrease) in net assets.............. 607,483,803 169,896 379,739,964 (61,051,730) 17,264,098 282,157,292 NET ASSETS: Beginning of period.... 2,426,550,258 9,449,403 778,903,674 365,198,297 140,396,274 281,607,811 ---------------- ------------ --------------- -------------- ------------- ------------- End of period.......... $ 3,034,034,061 $ 9,619,299 $ 1,158,643,638 $ 304,146,567 $ 157,660,372 $563,765,103 ---------------- ------------ --------------- -------------- ------------- ------------- ---------------- ------------ --------------- -------------- ------------- ------------- CHANGE IN CAPITAL SHARES OUTSTANDING: Shares sold............ 449,571,900 3,263,991 310,435,654 18,922,336 61,853,526 257,732,430 Shares issued upon reinvestment of dividends and capital gains................. 102,233,951 343,046 25,754,762 23,146,211 2,385,383 5,455,472 Shares redeemed........ (41,310,436) (3,437,141) (186,291,460) (72,966,325) (51,476,702) (15,397,114) ---------------- ------------ --------------- -------------- ------------- ------------- Net increase (decrease) in shares outstanding........... 510,495,415 169,896 149,898,956 (30,897,778) 12,762,207 247,790,788 ---------------- ------------ --------------- -------------- ------------- ------------- ---------------- ------------ --------------- -------------- ------------- ------------- HARTFORD DIVIDEND AND GROWTH FUND, INC.* ------------------- OPERATIONS: Net investment income................ $ 709,451 Net realized gain (loss) on security transactions.......... 68,307 Net realized gain (loss) on futures contracts............. -- Net realized gain (loss) on options contracts............. -- Net unrealized appreciation (depreciation) of investments during the period................ (900,465) ------------------- Net increase (decrease) in net assets resulting from operations............ (122,707) DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income................ (709,451) Net realized gain on security transactions.......... (68,307) CAPITAL SHARE TRANSACTIONS: Proceeds from Fund shares sold........... 55,786,553 Net asset value of Fund shares issued upon reinvestment of dividends and capital gains................. 701,056 Cost of Fund shares redeemed.............. (521,627) ------------------- Net increase (decrease) in net assets resulting from capital share transactions.... 55,965,982 ------------------- Total increase (decrease) in net assets.............. 55,065,517 NET ASSETS: Beginning of period.... -- ------------------- End of period.......... $ 55,065,517 ------------------- ------------------- CHANGE IN CAPITAL SHARES OUTSTANDING: Shares sold............ 55,208,333 Shares issued upon reinvestment of dividends and capital gains................. 696,988 Shares redeemed........ (512,536) ------------------- Net increase (decrease) in shares outstanding........... 55,392,785 ------------------- -------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 111 HARTFORD MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1995 1. ORGANIZATION: Hartford Bond Fund, Inc., Hartford Stock Fund, Inc., HVA Money Market Fund, Inc., Hartford Advisers Fund, Inc., Hartford U.S. Government Money Market Fund, Inc., Hartford Capital Appreciation Fund, Inc. (formerly Hartford Aggressive Growth Fund, Inc.), Hartford Mortgage Securities Fund, Inc., Hartford Index Fund, Inc., Hartford International Opportunities Fund, Inc., Hartford Dividend and Growth Fund, Inc., and Hartford International Advisers Fund, Inc. (the Funds) are organized under the laws of the State of Maryland and are registered with the Securities and Exchange Commission (SEC) under the Investment Company Act of 1940, as amended, as diversified open-ended management investment companies. Fund shares are made available to serve as the underlying investment media of the variable annuity, variable life insurance and group pension contracts issued by the affiliated life insurance company Separate Accounts of the ITT Hartford Life Insurance Companies (Hartford Life Insurance Company and ITT Hartford Life and Annuity Insurance Company). The Fund's objectives are as follows: Hartford Bond Fund, Inc. Seeks a high level of current income while preserving capital through investing in high-grade government and corporate bonds and other debt securities. Hartford Stock Fund, Inc. Seeks long-term capital growth through a diversified portfolio of equity securities. HVA Money Market Fund, Inc. Seeks a high level of current income consistent with liquidity and the need for preservation of capital through high-quality money-market securities. Hartford Advisers Fund, Inc. Seeks a high, long-term total rate of return (capital growth and current income) through a varying mix of stocks, bonds and money market instruments. Hartford U.S. Government Seeks a high level of current income consistent with preservation of Money Market Fund, Inc. capital through short-term securities issued or guaranteed by the U.S. Government and its Agencies. Hartford Capital Appreciation Seeks growth of capital through investment in equity securities of Fund, Inc. companies with high growth potential, including small emerging companies. Hartford Mortgage Securities Seeks a high level of current income by investing primarily in Fund, Inc. mortgage-backed securities, including securities issued by Government National Mortgage Association. Hartford Index Fund, Inc. Seeks to approximate the price and yield performance represented by the Standard & Poor's 500 Composite Stock Price Index through investment in common stocks. Hartford International Seeks a long-term total return consistent with that of international Opportunities Fund, Inc. equity markets through investment primarily in foreign equity securities issues. Hartford Dividend and Growth Seeks a high level of current income consistent with growth of capital Fund, Inc. and moderate investment risk. Primary investments are equity securities and securities covertible into equity securities that typically have above average yield. Hartford International Seeks a long-term total rate of return consistent with moderate risk. Advisers Fund, Inc. Investments include a mix of debt, equity and money market instruments primarily with foreign issuers.
2. SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of significant accounting policies of the Funds, which are in accordance with generally accepted accounting principles in the investment company industry: a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade date (date the order to buy or sell is executed). Security gains and losses are determined on the basis of identified cost. b) SECURITY VALUATION--Debt securities (other than short-term obligations) are valued on the basis of valuations furnished by an unaffiliated pricing service which determines valuations for normal institutional size trading units of debt securities. Mortgage securities are valued at the bid price. Short-term securities held in HVA Money Market Fund, Inc. and Hartford U.S. Government Money Market Fund, Inc. are valued at amortized cost or original cost plus accrued 112 interest receivable, both of which approximate market value. In Hartford Advisers Fund, Inc., Hartford Capital Appreciation Fund, Inc., Hartford Index Fund, Inc., Hartford Stock Fund, Inc., Hartford Bond Fund, Inc., Hartford Mortgage Securities Fund, Inc., Hartford International Opportunities Fund, Inc., Hartford Dividend and Growth Fund, Inc., and Hartford International Advisers Fund, Inc., short-term investments with a maturity of 60 days or less when purchased are valued at amortized cost, which approximates market value. Short-term investments with a maturity of more than 60 days when purchased are valued based on market quotations until the remaining days to maturity become less than 61 days. From such time until maturity, the investments are valued at amortized cost. Equity securities are valued at the last sales price reported on principal securities exchanges (domestic or foreign). If no sale took place on such day and in the case of certain equity securities traded over-the-counter, then such securities are valued at the mean between the bid and asked prices. Securities quoted in foreign currencies are translated into U.S. dollars at the exchange rate at the end of the reporting period. Options are valued at the last sales price; if no sale took place on such day, then options are valued at the mean between the bid and asked prices. Securities for which market quotations are not readily available and all other assets are valued in good faith at fair value by a person designated by the Funds' Board of Directors. c) FOREIGN CURRENCY TRANSACTIONS--The accounting records of the Funds are maintained in U.S. dollars. All assets and liabilities initially expressed in foreign currencies are converted into U.S. dollars at prevailing exchange rates. Purchases and sales of investment securities, dividend and interest income, and certain expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. The Funds do not isolate that portion of the results of operations resulting from changes in the foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments. Net realized foreign exchange gains or losses arise from sales of portfolio securities, sales of foreign currencies, and the difference between asset and liability amounts initially stated in foreign currencies and the U.S. dollar value of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of portfolio securities and other assets and liabilities at the end of the reporting period, resulting from changes in the exchange rates. d) REPURCHASE TRANSACTIONS--A repurchase agreement is an agreement by which the seller of a security agrees to repurchase the security sold at a mutually agreed upon time and price. At the time the Funds enter into a repurchase agreement, the value of the underlying collateral security(ies), including accrued interest, will be equal to or exceed the value of the repurchase agreement and, in the case of repurchase agreements exceeding one day, the value of the underlying security(ies), including accrued interest, is required during the term of the agreement to be equal to or exceed the value of the repurchase agreement. Securities which serve to collateralize the repurchase agreement are held by each Fund's custodian in book entry or physical form in the custodial account of the Fund. Repurchase agreements are valued at cost plus accrued interest receivable. e) JOINT TRADING ACCOUNT--Pursuant to an exemptive order issued by the Securities and Exchange Commission, the Funds may transfer uninvested cash balances into a joint trading account managed by Hartford Investment Management Company (HIMCO). These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. f) FUTURES, OPTIONS ON FUTURES AND OPTIONS ACCOUNTING PRINCIPLES--The Funds enter into futures contracts to retain their cash balance and yet be exposed to the market thereby providing the liquidity necessary to accommodate redemptions while at the same time providing shareholders the investment return of a fully invested portfolio. A futures contract is an agreement between two parties to buy and sell a security for a set price on a future date. When the funds enter into such contracts, they are required to deposit with their custodian an amount of "initial margin" of cash or U.S. Treasury bills. Subsequent payments, called maintenance margin, to and from the broker, are made on a daily basis as the price of the underlying debt security fluctuates, making the long and short positions in the futures contract more or less valuable 113 HARTFORD MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 1995 (i.e., mark-to-market), which results in an unrealized gain or loss to the Funds. The market value of a traded futures contract is the last sale price or, in the absence of a last sale price, the last offering price or, in the absence of either of these prices, fair value is determined according to procedures established by the Funds' Board of Directors. At any time prior to expiration of the futures contract, the Funds may close the position by taking an opposite position which would operate to terminate the position in the futures contract. A final determination of maintenance margin is then made, additional cash is required to be paid by or released to the Funds and the Funds realize a gain or loss. The premium paid by the Fund for the purchase of a call or put option is included in the Fund's Statement of Net Assets as an investment and subsequently "marked to market" to reflect the current market value of the option purchased as of the end of the reporting period. If an option which the Fund has purchased expires on its stipulated expiration date, the Fund realizes a loss in the amount of the cost of the option. If the Fund enters into a closing transaction, it realizes a gain or loss, depending on whether the proceeds from the sale are greater or less than the cost of the option. If the Fund exercises a put option, it realizes a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. If the Fund exercises a call option, the cost of the security which the Fund purchases upon exercise will be increased by the premium originally paid. The Funds had no options contracts outstanding at December 31, 1995. g) FEDERAL INCOME TAXES--For Federal income tax purposes, the Funds intend to continue to qualify as regulated investment companies under Subchapter M of the Internal Revenue Code by distributing substantially all of their taxable income to their shareholders or otherwise complying with the requirements for regulated investment companies. Accordingly, no provision for Federal income taxes has been made. h) FUND SHARE VALUATION AND DIVIDEND DISTRIBUTIONS TO SHAREHOLDERS--Orders for the Fund's shares are executed in accordance with the investment instructions of the contract owners. Dividend income is accrued as of the ex-dividend date. Interest income and expenses are accrued on a daily basis. The net asset value of the Fund's shares is determined as of the close of each business day of the New York Stock Exchange (the Exchange). Orders for the purchase of the Funds' shares received prior to the close of the Exchange on any day on which the fund is open for business are priced at the per-share net asset value determined as of the close of the Exchange. Orders received after the close of the Exchange, or on a day on which the Exchange and/or the Fund is not open for business, are priced at the per-share net asset value next determined. Dividends are declared by the Funds' Board of Directors based upon the investment performance of the respective Funds. The policy with respect to Hartford Bond Fund, Inc., Hartford Stock Fund, Inc., Hartford Advisers Fund, Inc., Hartford Capital Appreciation Fund, Inc., Hartford Mortgage Securities Fund, Inc., Hartford Index Fund, Inc., Hartford International Opportunities Fund, Inc., Hartford Dividend and Growth Fund, Inc., and Hartford International Advisers Fund, Inc. is to distribute dividends from net investment income monthly and distribute realized capital gains, if any, annually. HVA Money Market Fund, Inc. and Hartford U.S. Government Money Market Fund, Inc. seek to maintain a stable net asset value per share of $1.00 by declaring a daily dividend from net investment income, including net short-term capital gains and losses, and by valuing their investments using the amortized cost method. Dividends are distributed monthly. i) RESTRICTED SECURITIES--The following securities are restricted for sale to qualified institutional investors.
% OF PAR ACQUISITION MARKET NET ASSETS FUND SECURITY VALUE DATE COST VALUE OF FUND - ----------------------- ------------------------------ ------------- ---------- ------------- ------------- ---------- Stock Autotote Corp. 4.950% due 8/20/01.......... $ 16,000,000 8/13/93 $ 16,000,000 $ 3,765,986 0.2% Advisers Autotote Corp. 4.950% due 8/20/01.......... $ 24,000,000 8/13/93 $ 24,000,000 $ 5,648,978 0.1% Capital Appreciation Planet Hollywood 10.000% due 8/22/00......... $ 8,000,000 8/22/95 $ 8,000,000 $ 10,435,920 0.5%
114 j) FOREIGN CURRENCY CONTRACTS--As of December 31, 1995, Hartford International Opportunities Fund, Inc., Hartford Capital Appreciation Fund, Inc. and Hartford International Advisers Fund, Inc. have entered into forward foreign currency exchange contracts that obligate the Funds to repurchase currencies at specified future dates. The Funds enter into forward foreign currency contracts to manage currency exchange rate risk. Forward contracts involve elements of market risk in excess of the amount reflected in the Statement of Net Assets. The Fund bears the risk of an unfavorable change in the foreign exchange rate underlying the forward contract. k) USE OF ESTIMATES--The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the period. Operating results in the future could vary from the amounts derived from management's estimates. 3. EXPENSES: a) INVESTMENT MANAGEMENT AND ADVISORY AGREEMENTS--HIMCO, a wholly-owned subsidiary of Hartford Life Insurance Company (HL) provides investment management and supervision for Hartford Stock Fund, Inc., Hartford Advisers Fund, Inc., Hartford Capital Appreciation Fund, Inc., Hartford International Opportunities Fund, Inc., Hartford Dividend and Growth Fund, Inc., and Hartford International Advisers, Fund, Inc., pursuant to an Investment Management Agreement, which was approved by each Fund's Board of Directors and shareholders. HIMCO also serves as investment adviser to Hartford Bond Fund, Inc., HVA Money Market Fund, Inc., Hartford U.S. Government Money Market Fund, Inc., Hartford Mortgage Securities Fund, Inc., and Hartford Index Fund, Inc. pursuant to an Agreement, which was approved by the Fund's Board of Directors and shareholders. The annual fees paid to HIMCO are .25% of the average daily net assets for HVA Money Market Fund, Inc., Hartford U.S. Government Money Market Fund, Inc. and Hartford Mortgage Securities Fund, Inc., and .20% of the average daily net assets for Hartford Index Fund, Inc. The schedule below reflects the rates of compensation paid to HIMCO for services rendered:
HARTFORD BOND FUND, INC. AND HARTFORD STOCK FUND, INC. AVERAGE DAILY NET ASSETS ANNUAL FEE - ------------------------------------ ------------ On first $250 million .325% On next $250 million .300 On next $500 million .275 Over $1 billion .250 HARTFORD ADVISERS FUND, INC., HARTFORD CAPITAL APPRECIATION FUND, INC., HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC., HARTFORD DIVIDEND AND GROWTH FUND, INC. AND HARTFORD INTERNATIONAL ADVISERS FUND, INC. AVERAGE DAILY NET ASSETS ANNUAL FEE - ------------------------------------ ------------ On first $250 million .575% On next $250 million .525 On next $500 million .475 Over $1 billion .425
For Hartford International Advisers Fund, Inc., HIMCO has agreed to waive the Fund's fees until the Fund's assets (excluding assets contributed by companies affiliated with HIMCO) reach $20 million. Wellington Management Company (Wellington), under a Sub-Investment Advisory Agreement with HIMCO, furnishes an investment program to HIMCO, for utilization by HIMCO in rendering services to Hartford Stock Fund, Inc., Hartford Advisers Fund, Inc., Hartford Capital Appreciation Fund, Inc., Hartford International Opportunities 115 HARTFORD MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 1995 Fund, Inc., Hartford Dividend and Growth Fund, Inc. and Hartford International Advisers Fund, Inc. Wellington determines the purchase and sale of portfolio securities and places such orders for execution, in the name of the respective Fund. In conjunction with such activities, Wellington regularly furnishes reports to the Fund's Board of Directors concerning economic forecasts, investment strategy, portfolio activity and performance of the Funds. b) ADMINISTRATIVE SERVICES AGREEMENT--Under the Administrative Services Agreement between HL and each of the Funds, HL provides administrative services to the Funds and receives monthly compensation at the annual rate of .175% of each Fund's average daily net assets. The Funds assume and pay certain other expenses (including, but not limited to, shareholder accounting, state taxes and directors' fees). Directors' fees represent remuneration paid or accrued to directors not affiliated with HL or any other related company. c) OPERATING EXPENSES--Allocable expenses of the Funds are charged to each fund based on the ratio of the net assets of each Fund to the combined net assets of the Funds. Nonallocable expenses are charged to each fund based on specific identification. 4. UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS: The aggregate gross unrealized appreciation on all investments where there was an excess of value over tax cost, the aggregate gross unrealized depreciation of investments where there was an excess of tax cost over value and the net unrealized appreciation (depreciation) of investments as of December 31, 1995, were as follows:
AGGREGATE GROSS AGGREGATE GROSS NET UNREALIZED UNREALIZED UNREALIZED APPRECIATION APPRECIATION (DEPRECIATION) (DEPRECIATION) --------------- --------------- -------------- Hartford Bond Fund, Inc. $ 15,437,349 $ (17,287) $ 15,420,062 Hartford Stock Fund, Inc. 368,585,087 (29,069,241) 339,515,846 Hartford Advisers Fund, Inc. 637,232,582 (45,794,259) 591,438,323 Hartford Capital Appreciation Fund, Inc. 341,163,936 (75,128,662) 226,035,274 Hartford Mortgage Securities Fund, Inc. 7,095,079 (616,975) 6,478,104 Hartford Index Fund, Inc. 74,889,886 (2,949,607) 71,950,279 Hartford International Opportunities Fund, Inc. 78,460,910 (14,609,252) 63,851,658 Hartford Dividend and Growth Fund, Inc. 31,270,627 (1,009,188) 30,261,439 Hartford International Advisers Fund, Inc. 1,861,476 (362,213) 1,449,263
5. EQUITY OF AFFILIATES: a) HARTFORD DIVIDEND AND GROWTH FUND, INC.--Hartford Accident & Indemnity Insurance Company, an affiliate of the Funds, redeemed ownership of 3,000,000 shares of Hartford Dividend and Growth Fund, Inc. on October 20, 1995, realizing a gain of $749,520. b) HARTFORD INTERNATIONAL ADVISERS FUND, INC.--HL has ownership of 10,000,000 shares of Hartford International Advisers Fund, Inc., representing 35.5% of the total outstanding shares of the Fund as of December 31, 1995. c) As of December 31, 1995, certain HL group pension contracts held direct interest in shares as follows:
PERCENT OF TOTAL SHARES SHARES ------------ ----------- Hartford Stock Fund, Inc.......................................................................... 70,084 0.01% Hartford Advisers Fund, Inc....................................................................... 11,995,216 0.55 Hartford Capital Appreciation Fund, Inc........................................................... 9,760,293 1.58 Hartford Mortgage Securities Fund, Inc............................................................ 15,512,929 5.07 Hartford Index Fund, Inc.......................................................................... 12,029,208 7.67 Hartford International Opportunities Fund, Inc.................................................... 5,629,699 1.07
116 6. CAPITAL GAINS DISTRIBUTION: The Board of Directors declared a distribution from capital gains as follows in the respective Funds:
RECORD DATE PAYABLE DATE PER SHARE AMOUNT ----------------------- ----------------------- ----------------- Hartford International Advisers Fund, Inc. December 28, 1995 December 31, 1995 $ 0.017363 Hartford Stock Fund, Inc. January 30, 1996 January 31, 1996 0.147531 Hartford Advisers Fund, Inc. January 30, 1996 January 31, 1996 0.043900 Hartford Capital Appreciation Fund, Inc. January 30, 1996 January 31, 1996 0.227840 Hartford Index Fund, Inc. January 30, 1996 January 31, 1996 0.038716 Hartford International Opportunities Fund, Inc. January 30, 1996 January 31, 1996 0.037233 Hartford Dividend and Growth Fund, Inc. January 30, 1996 January 31, 1996 0.028296
7. INVESTMENT TRANSACTIONS: For the year ended Decemebr 31, 1995, investment transactions (excluding short-term investments) were as follows:
PURCHASES AT SALES AT COST PROCEEDS ---------------- ---------------- Hartford Bond Fund, Inc................................................................. $ 641,603,789 $ 574,279,913 Hartford Stock Fund, Inc................................................................ 1,001,207,257 741,738,505 Hartford Advisers Fund, Inc............................................................. 2,513,812,815 2,175,113,143 Hartford Capital Appreciation Fund, Inc................................................. 1,582,122,689 1,135,013,592 Hartford Mortgage Securities Fund, Inc.................................................. 1,501,622,577 1,492,472,675 Hartford Index Fund, Inc................................................................ 107,541,576 2,961,201 Hartford International Opportunities Fund, Inc.......................................... 375,268,287 306,915,718 Hartford Dividend and Growth Fund, Inc.................................................. 217,546,619 52,955,393 Hartford International Advisers Fund, Inc............................................... 34,393,152 7,684,577
117 HARTFORD MUTUAL FUNDS FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
NET REALIZED AND NET ASSET UNREALIZED VALUE AT NET GAINS OR TOTAL FROM BEGINNING INVESTMENT (LOSSES) ON INVESTMENT OF PERIOD INCOME INVESTMENTS OPERATIONS ----------- ------------- ------------ ----------- HARTFORD BOND FUND, INC. For the Year Ended December 31, 1995..... $ 0.926 $ 0.064 $ 0.102 0.166 1994................... 1.044 0.060 (0.100) (0.040) 1993................... 1.024 0.062 0.039 0.101 1992................... 1.061 0.074 (0.019) 0.055 1991................... 0.979 0.072 0.082 0.154 1990................... 0.976 0.075 0.003 0.078 HARTFORD STOCK FUND, INC. For the Year Ended December 31, 1995..... 2.801 0.070 0.840 0.910 1994................... 3.099 0.061 (0.111) (0.050) 1993................... 2.965 0.053 0.339 0.392 1992................... 2.927 0.051 0.219 0.270 1991................... 2.452 0.059 0.532 0.591 1990................... 2.775 0.070 (0.179) (0.109) HVA MONEY MARKET FUND, INC. For the Year Ended December 31, 1995..... 1.000 0.056 -- 0.056 1994................... 1.000 0.039 -- 0.039 1993................... 1.000 0.029 -- 0.029 1992................... 1.000 0.036 -- 0.036 1991................... 1.000 0.059 -- 0.059 1990................... 1.000 0.078 -- 0.078 HARTFORD ADVISERS FUND, INC. For the Year Ended December 31, 1995...... 1.600 0.064 0.377 0.441 1994................... 1.752 0.054 (0.100) (0.046) 1993................... 1.676 0.050 0.145 0.195 1992................... 1.649 0.059 0.070 0.129 1991................... 1.436 0.063 0.223 0.286 1990................... 1.543 0.074 (0.059) 0.015 HARTFORD U.S. GOVERNMENT MONEY MARKET FUND, INC. For the Year Ended December 31, 1995..... 1.000 0.054 -- 0.054 1994................... 1.000 0.036 -- 0.036 1993................... 1.000 0.027 -- 0.027 1992................... 1.000 0.032 -- 0.032 1991................... 1.000 0.055 -- 0.055 1990................... 1.000 0.073 -- 0.073 HARTFORD CAPITAL APPRECIATION FUND, INC. For the Year Ended December 31, 1995..... 2.860 0.030 0.785 0.815 1994................... 3.052 0.011 0.070 0.081 1993................... 2.634 0.003 0.526 0.529 1992................... 2.607 0.008 0.388 0.396 1991................... 1.709 0.021 0.898 0.919 1990................... 2.020 0.029 (0.246) (0.217) HARTFORD MORTGAGE SECURITIES FUND, INC. For the Year Ended December 31, 1995..... 0.984 0.068 0.087 0.155 1994................... 1.075 0.068 (0.086) (0.018) 1993................... 1.079 0.071 (0.004) 0.067 1992................... 1.115 0.086 (0.036) 0.050 1991................... 1.054 0.088 0.061 0.149 1990................... 1.045 0.087 0.009 0.096 HARTFORD INDEX FUND, INC. For the Year Ended December 31, 1995..... 1.522 0.044 0.507 0.551 1994................... 1.546 0.038 (0.024) 0.014 1993................... 1.450 0.035 0.096 0.131 1992................... 1.390 0.033 0.060 0.093 1991................... 1.134 0.036 0.294 0.330 1990................... 1.220 0.037 (0.086) (0.049) HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC. For the Year Ended December 31, 1995..... 1.176 0.020 0.141 0.161 1994................... 1.215 0.016 (0.039) (0.023) 1993................... 0.917 0.009 0.298 0.307 1992................... 0.973 0.013 (0.056) (0.043) 1991................... 0.871 0.011 0.102 0.113 1990(1)................ 1.000 0.015 (0.129) (0.114) HARTFORD DIVIDEND AND GROWTH FUND, INC. For the Year Ended December 31, 1995..... 1.000 0.033 0.317 0.350 From inception, March 8, 1994, through December 31, 1994..... 1.000 0.024 (0.005) 0.019 HARTFORD INTERNATIONAL ADVISERS FUND, INC. From inception, March 1, 1995, through December 31, 1995..... 1.000 0.030 0.126 0.156
(1) From Effective Date (July 2, 1990) to December 31, 1990. (2) Management fees have been waived until assets (excluding assets contributed by companies affiliated with HIMCO) reach $20 million. The ratio of operating expenses to average net assets would have been higher if management fees were not waived. The ratio of net investment income to average net assets would have been lower if management fees were not waived. (3) Annualized. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 118
NET ASSETS RATIO OF DIVIDENDS NET INCREASE NET ASSET AT END OF OPERATING FROM NET DISTRIBUTIONS (DECREASE) VALUE AT PERIOD EXPENSES INVESTMENT FROM REALIZED IN END TOTAL (IN TO AVERAGE INCOME CAPITAL GAINS NET ASSETS OF PERIOD RETURN THOUSANDS) NET ASSETS ---------- ------------- ------------ ----------- --------- ------------- ----------------- HARTFORD BOND FUND, INC. For the Year Ended December 31, 1995..... $ (0.064) $ -- 0.102 $ 1.028 18.49% $ 342,495 0.53 % 1994................... (0.060) (0.018) (0.118) 0.926 (3.95) 247,458 0.55 1993................... (0.062) (0.019) 0.020 1.044 10.24 239,602 0.57 1992................... (0.074) (0.018) (0.037) 1.024 5.53 128,538 0.64 1991................... (0.072) -- 0.082 1.061 16.43 97,377 0.66 1990................... (0.075) -- 0.003 0.979 8.39 70,915 0.67 HARTFORD STOCK FUND, INC. For the Year Ended December 31, 1995..... (0.070) (0.114) 0.726 3.527 34.10 1,876,884 0.48 1994................... (0.061) (0.187) (0.298) 2.801 (1.89) 1,163,158 0.50 1993................... (0.053) (0.205) 0.134 3.099 14.34 968,425 0.53 1992................... (0.051) (0.181) 0.038 2.965 10.04 569,903 0.57 1991................... (0.059) (0.057) 0.475 2.927 24.58 406,489 0.60 1990................... (0.070) (0.144) (0.323) 2.452 (3.87) 257,553 0.66 HVA MONEY MARKET FUND, INC. For the Year Ended December 31, 1995..... (0.056) -- -- 1.000 5.74 339,709 0.45 1994................... (0.039) -- -- 1.000 3.95 321,465 0.47 1993................... (0.029) -- -- 1.000 2.94 234,088 0.48 1992................... (0.036) -- -- 1.000 3.63 190,246 0.53 1991................... (0.059) -- -- 1.000 6.01 177,483 0.54 1990................... (0.078) -- -- 1.000 8.09 194,462 0.57 HARTFORD ADVISERS FUND, INC. For the Year Ended December 31, 1995...... (0.064) (0.019) 0.358 1.958 28.34 4,262,769 0.65 1994................... (0.054) (0.052) (0.152) 1.600 (2.74) 3,034,034 0.65 1993................... (0.050) (0.069) 0.076 1.752 12.25 2,426,550 0.69 1992................... (0.059) (0.043) 0.027 1.676 8.30 985,747 0.78 1991................... (0.063) (0.010) 0.213 1.649 20.33 631,424 0.81 1990................... (0.074) (0.048) (0.107) 1.436 1.26 416,839 0.89 HARTFORD U.S. GOVERNMENT MONEY MARKET FUND, INC. For the Year Ended December 31, 1995..... (0.054) -- -- 1.000 5.52 10,070 0.57 1994................... (0.036) -- -- 1.000 3.67 9,619 0.58 1993................... (0.027) -- -- 1.000 2.68 9,449 0.58 1992................... (0.032) -- -- 1.000 3.22 10,525 0.75 1991................... (0.055) -- -- 1.000 5.61 11,257 0.73 1990................... (0.073) -- -- 1.000 7.52 10,496 0.73 HARTFORD CAPITAL APPRECIATION FUND, INC. For the Year Ended December 31, 1995..... (0.030) (0.155) 0.630 3.490 30.25 2,157,892 0.68 1994................... (0.011) (0.262) (0.192) 2.860 2.50 1,158,644 0.72 1993................... (0.003) (0.108) 0.418 3.052 20.80 778,904 0.76 1992................... (0.008) (0.361) 0.027 2.634 16.98 300,373 0.87 1991................... (0.021) -- 0.898 2.607 53.99 158,046 0.92 1990................... (0.029) (0.065) (0.311) 1.709 (10.90) 56,032 0.96 HARTFORD MORTGAGE SECURITIES FUND, INC. For the Year Ended December 31, 1995..... (0.068) -- 0.087 1.071 16.17 327,565 0.47 1994................... (0.068) (0.005) (0.091) 0.984 (1.61) 304,147 0.48 1993................... (0.071) -- (0.004) 1.075 6.31 365,198 0.49 1992................... (0.086) -- (0.036) 1.079 4.64 258,711 0.56 1991................... (0.088) -- 0.061 1.115 14.71 162,484 0.58 1990................... (0.087) -- 0.009 1.054 9.70 105,620 0.58 HARTFORD INDEX FUND, INC. For the Year Ended December 31, 1995..... (0.044) (0.001) 0.506 2.028 36.55 318,253 0.39 1994................... (0.038) -- (0.024) 1.522 0.94 157,660 0.45 1993................... (0.035) -- 0.096 1.546 9.12 140,396 0.49 1992................... (0.033) -- 0.060 1.450 6.82 82,335 0.60 1991................... (0.036) (0.038) 0.256 1.390 29.53 47,770 0.67 1990................... (0.037) -- (0.086) 1.134 (3.99) 26,641 0.91 HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC. For the Year Ended December 31, 1995..... (0.020) (0.011) 0.130 1.306 13.93 686,475 0.86 1994................... (0.016) -- (0.039) 1.176 (1.94) 563,765 0.85 1993................... (0.009) -- 0.298 1.215 33.73 281,608 1.00 1992................... (0.013) -- (0.056) 0.917 (4.43) 47,560 1.23 1991................... (0.011) -- 0.102 0.973 13.00 22,854 1.24 1990(1)................ (0.015) -- (0.129) 0.871 (11.76) 9,352 1.04 (3) HARTFORD DIVIDEND AND GROWTH FUND, INC. For the Year Ended December 31, 1995..... (0.033) -- 0.317 1.317 36.37 265,070 0.77 From inception, March 8, 1994, through December 31, 1994..... (0.024) (0.001) (0.006) 0.994 1.96 55,066 0.83 (3) HARTFORD INTERNATIONAL ADVISERS FUND, INC. From inception, March 1, 1995, through December 31, 1995..... (0.030) (0.017) 0.109 0.109 15.84 31,264 0.65 (2)(3) RATIO OF NET INVESTMENT INCOME PORTFOLIO TO AVERAGE TURNOVER NET ASSETS RATE ----------------- ------------ HARTFORD BOND FUND, INC. For the Year Ended December 31, 1995..... 6.51 % 215.0 % 1994................... 6.23 328.8 1993................... 5.93 494.3 1992................... 7.21 434.1 1991................... 7.29 337.0 1990................... 7.82 161.6 HARTFORD STOCK FUND, INC. For the Year Ended December 31, 1995..... 2.23 52.9 1994................... 2.17 63.8 1993................... 1.86 69.0 1992................... 1.90 69.8 1991................... 2.14 24.3 1990................... 2.76 20.2 HVA MONEY MARKET FUND, INC. For the Year Ended December 31, 1995..... 5.57 -- 1994................... 3.99 -- 1993................... 2.91 -- 1992................... 3.60 -- 1991................... 5.88 -- 1990................... 7.80 -- HARTFORD ADVISERS FUND, INC. For the Year Ended December 31, 1995...... 3.57 63.5 1994................... 3.34 60.0 1993................... 3.07 55.3 1992................... 3.55 72.8 1991................... 4.13 42.1 1990................... 4.65 35.7 HARTFORD U.S. GOVERNMENT MONEY MARKET FUND, INC. For the Year Ended December 31, 1995..... 5.38 -- 1994................... 3.63 -- 1993................... 2.65 -- 1992................... 3.19 -- 1991................... 5.48 -- 1990................... 7.29 -- HARTFORD CAPITAL APPRECIATION FUND, INC. For the Year Ended December 31, 1995..... 0.95 78.6 1994................... 0.40 73.3 1993................... 0.12 91.4 1992................... 0.36 100.3 1991................... 0.92 107.2 1990................... 1.58 51.8 HARTFORD MORTGAGE SECURITIES FUND, INC. For the Year Ended December 31, 1995..... 6.50 489.4 1994................... 6.65 365.7 1993................... 6.49 183.4 1992................... 7.96 277.2 1991................... 8.25 152.2 1990................... 8.42 85.6 HARTFORD INDEX FUND, INC. For the Year Ended December 31, 1995..... 2.46 1.5 1994................... 2.50 1.8 1993................... 2.36 0.8 1992................... 2.48 1.2 1991................... 2.89 6.7 1990................... 3.27 25.5 HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC. For the Year Ended December 31, 1995..... 1.60 55.6 1994................... 1.42 46.4 1993................... 0.84 31.8 1992................... 1.40 25.1 1991................... 1.17 24.7 1990(1)................ 2.65 (3) 3.0 HARTFORD DIVIDEND AND GROWTH FUND, INC. For the Year Ended December 31, 1995..... 2.91 41.4 From inception, March 8, 1994, through December 31, 1994..... 3.52 27.8 HARTFORD INTERNATIONAL ADVISERS FUND, INC. From inception, March 1, 1995, through December 31, 1995..... 3.36 (3) 47.2
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 119 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF: HARTFORD BOND FUND, INC., HARTFORD STOCK FUND, INC., HVA MONEY MARKET FUND, INC., HARTFORD ADVISERS FUND, INC., HARTFORD U.S. GOVERNMENT MONEY MARKET FUND, INC., HARTFORD CAPITAL APPRECIATION FUND, INC. (FORMERLY HARTFORD AGGRESSIVE GROWTH FUND, INC.), HARTFORD MORTGAGE SECURITIES FUND, INC., HARTFORD INDEX FUND, INC., HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC., HARTFORD DIVIDEND AND GROWTH FUND, INC., AND HARTFORD INTERNATIONAL ADVISERS FUND, INC. We have audited the accompanying statements of net assets of Hartford Bond Fund, Inc., Hartford Stock Fund, Inc., HVA Money Market Fund, Inc., Hartford Advisers Fund, Inc., Hartford U.S. Government Money Market Fund, Inc., Hartford Capital Appreciation Fund, Inc. (formerly Hartford Aggressive Growth Fund, Inc.), Hartford Mortgage Securities Fund, Inc., Hartford Index Fund, Inc., Hartford International Opportunities Fund, Inc., Hartford Dividend and Growth Fund, Inc., and Hartford International Advisers Fund, Inc. (all Maryland corporations) (the Funds) as of December 31, 1995, and the related statements of operations for the year then ended (except for Hartford International Advisers Fund Inc., which reflects the period since inception, March 1, 1995, to December 31, 1995), the statements of changes in net assets for each of the two years in the period then ended (except for Hartford Dividend and Growth Fund, Inc., which reflects the year then ended and the period since inception, March 8, 1994, to December 31, 1994 and Hartford International Advisers Fund, Inc., which reflects the period since inception, March 1, 1995, to December 31, 1995) and the financial highlights for each of the five years in the period then ended (except for Hartford Dividend and Growth Fund, Inc., which reflects the year then ended and from the period since inception, March 8, 1994, to December 31, 1994, and Hartford International Advisers Fund, Inc., which reflects the period since inception, March 1, 1995, to December 31, 1995). These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1995, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Hartford Bond Fund, Inc., Hartford Stock Fund, Inc., HVA Money Market Fund, Inc., Hartford Advisers Fund, Inc., Hartford U.S. Government Money Market Fund, Inc., Hartford Capital Appreciation Fund, Inc. (formerly Hartford Aggressive Growth Fund, Inc.), Hartford Mortgage Securities Fund, Inc., Hartford Index Fund, Inc., Hartford International Opportunities Fund, Inc., Hartford Dividend and Growth Fund, Inc., and Hartford International Advisers Fund, Inc., as of December 31, 1995, the results of their operations for the year then ended (except for Hartford International Advisers Fund Inc., which reflects the period since inception March 1, 1995, to December 31, 1995), the changes in their net assets for each of the two years in the period then ended (except for Hartford Dividend and Growth Fund, Inc., which reflects the year then ended and the period since inception, March 8, 1994, to December 31, 1994, and Hartford International Advisers Fund, Inc., which reflects the period since inception, March 1, 1995, to December 31, 1995) and the financial highlights for each of the five years in the period then ended (except for Hartford Dividend and Growth Fund, Inc., which reflects the year then ended and the period since inception, March 8, 1994, to December 31, 1994, and Hartford International Advisers Fund, Inc., which reflects the period since inception, March 1, 1995, to December 31, 1995), in conformity with generally accepted accounting principles. Hartford, Connecticut February 19, 1996 Arthur Andersen LLP 120 EX-19 5 EXHIBIT 19-POWER OF ATTORNEY EXHIBIT 19 ---------- HARTFORD INDEX FUND, INC. HARTFORD MONEY MARKET FUND, INC. HARTFORD CAPITAL APPRECIATION FUND, INC. HARTFORD BOND FUND, INC. HARTFORD STOCK FUND, INC. HVA MONEY MARKET FUND, INC. HARTFORD ADVISERS FUND, INC. HARTFORD U.S. GOVERNMENT MONEY MARKET FUND, INC. HARTFORD MORTGAGE SECURITIES FUND, INC. HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC. HARTFORD DIVIDEND AND GROWTH FUND, INC. HARTFORD INTERNATIONAL ADVISERS FUND, INC. HARTFORD SMALL COMPANY FUND, INC. POWER OF ATTORNEY ----------------- Joseph A. Biernat Charles M. O'Halloran Winifred E. Coleman William A. O'Neill Joseph H. Gareau Millard H. Pryor, Jr. J. Richard Garrett Lowndes A. Smith George R. Jay John K. Springer do hereby jointly and severally authorize Lynda Godkin, Allison MacInnis, Kevin J. Carr, Charles M. O'Halloran or Scott K. Richardson, to sign as their agent any Securities Act of 1933 and/or Investment Company Act of 1940 Registration Statement, pre-effective amendment or post-effective amendment and any Application for Exemption Relief or other filings with the Securities and Exchange Commission relating to any Mutual Fund named above. IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for the purpose herein set forth. Dated: 1-24-96 /S/ Joseph A. Biernat - --------------------- Joseph A. Biernat Dated: 1-24-96 /S/ Winifred E. Coleman - ----------------------- Winifred E. Coleman Dated: 1-24-96 /S/ Joseph A. Gareau - -------------------- Joseph A. Gareau Dated: 1-24-96 /S/ J. Richard Garrett - ---------------------- J. Richard Garrett Dated: 1-24-96 /S/ George R. Jay - ----------------- George R. Jay Dated: 1-24-96 /S/ Charles M. O'Halloran - ------------------------- Charles M. O'Halloran Dated: 1-24-96 /S/ William A. O'Neill - ---------------------- William A. O'Neill Dated: 1-24-96 /S/ Millard H. Pryor, Jr. - ------------------------- Millard H. Pryor, Jr. Dated: 1-24-96 /S/ Lowndes A. Smith - -------------------- Lowndes A. Smith Dated: 1-24-96 /S/ John K. Springer - -------------------- John K. Springer EX-27 6 EXHIBIT 27
6 0000741565 HARTFORD CAPITAL APPRECIATION FUND, INC. 12-MOS DEC-31-1995 JAN-01-1995 DEC-31-1995 1,910,161,838 2,176,197,112 27,905,368 2,883 0 2,204,105,364 42,834,575 0 3,379,087 46,213,661 0 61,836,658 616,366,580 405,137,719 0 0 145,639,842 0 264,470,256 2,157,891,703 15,042,500 11,141,268 0 10,872,318 15,311,450 145,430,343 236,498,480 397,240,273 0 15,311,450 63,784,485 0 393,716,534 208,868,838 28,381,165 999,248,065 0 63,993,984 0 0 7,716,873 0 10,872,318 1,608,489,000 2.860 0.030 0.785 0.030 0.155 0 3.490 .007 0 0
-----END PRIVACY-ENHANCED MESSAGE-----