December 31, 1998
Prin. Amt.
or Shares Value (A)
----------------------------------------------------------------------------------------------------------------
Stocks and Convertible Securities — 98.2%
Basic Industries — 2.1%
Consolidated Papers, Inc...........................................................375,000 $ 10,312,500
E.I. du Pont de Nemours & Co.......................................................250,000 13,265,625
Mead Corp..........................................................................400,000 11,725,000
------------
35,303,125
------------
Capital Goods — 8.5%
Boeing Co...........................................................................50,000 1,631,250
Corning, Inc.......................................................................460,000 20,700,000
Deere & Co.........................................................................280,000 9,205,000
Dover Corp.........................................................................260,000 9,522,500
Emerson Electric Co.................................................................73,000 4,416,500
General Electric Co................................................................655,000 66,810,000
The BFGoodrich Co..................................................................110,000 3,946,250
Minnesota Mining & Manufacturing Co................................................170,000 12,091,250
Pall Corp..........................................................................600,000 15,187,500
------------
143,510,250
------------
Consumer — 14.2%
Consumer Distribution — 1.8%
American Stores Co.................................................................224,500 8,292,469
Borders Group, Inc. (B)............................................................195,000 4,862,813
Dillard Department Stores, Inc.....................................................200,000 5,675,000
Polo Ralph Lauren Corp. (B)........................................................175,000 3,357,813
Tiffany & Co.......................................................................170,000 8,818,750
------------
31,006,845
------------
Consumer Services — 3.2%
CBRL Group, Inc....................................................................340,000 7,926,250
Houston Industries Inc. 7.00% Conv. DECS due 2000..................................150,000 15,956,250
McDonald's Corp....................................................................305,000 23,427,813
MediaOne Group, Inc. (B)...........................................................150,000 7,050,000
------------
54,360,313
------------
Consumer Staples — 9.2%
Best Foods Inc.....................................................................255,000 13,578,750
Campbell Soup Co...................................................................380,000 20,900,000
Coca-Cola Co.......................................................................170,000 11,390,000
Dean Foods Co......................................................................270,000 11,019,375
Fort James Corp....................................................................450,000 18,000,000
Gillette Co........................................................................439,120 20,995,425
Interstate Bakeries Corp...........................................................138,000 3,648,375
Ivex Packaging Corp. (B)...........................................................550,000 12,787,500
PepsiCo, Inc.......................................................................295,000 12,058,125
Procter & Gamble Co................................................................230,000 21,001,875
Ralston Purina 7.00% SAILS due 2000................................................180,000 9,405,000
------------
154,784,425
------------
Energy — 5.4%
British Petroleum plc ADR..........................................................150,000 $ 13,612,500
Enron Corp.........................................................................100,000 5,706,250
Mobil Corp.........................................................................120,000 10,455,000
Petroleum & Resources Corporation (C)............................................1,145,570 35,083,081
Royal Dutch Petroleum Co...........................................................180,000 8,617,500
Schlumberger Ltd....................................................................88,400 4,099,550
Unocal Capital Trust $3.125 Conv. Pfd..............................................111,600 5,433,525
Williams Companies, Inc............................................................243,000 7,578,563
-----------
90,585,969
-----------
Financial — 18.1%
Banking — 11.1%
Associates First Capital Corp. Ser. A.............................................546,800 23,170,650
Banc One Corp......................................................................330,000 16,850,625
Federal Home Loan Mortgage Corp....................................................360,000 23,197,500
Greenpoint Financial Corp..........................................................425,000 14,928,125
Investors Financial Services Corp..................................................240,000 14,310,000
Mellon Bank Corp...................................................................210,000 14,437,500
National City Corp..................................................................80,000 5,800,000
Peoples Heritage Financial Group...................................................474,000 9,480,000
Provident Bankshares Corp..........................................................289,405 7,198,954
Southwest Bancorp. of Texas, Inc. (B)..............................................350,000 6,256,250
Wachovia Corp......................................................................190,000 16,613,125
Wells Fargo & Co...................................................................550,000 21,965,625
Wilmington Trust Corp..............................................................210,000 12,941,250
-----------
187,149,604
-----------
Insurance — 7.0%
AMBAC Financial Group, Inc.........................................................379,600 22,847,175
American International Group, Inc..................................................405,000 39,133,125
Annuity & Life Re (Holdings), Ltd..................................................700,000 18,900,000
Reinsurance Group of America, Inc..................................................299,850 20,989,500
Salomon Inc. 7.625% Exch. Notes due 1999 (D).......................................375,000 16,382,813
-----------
118,252,613
-----------
Healthcare — 14.5%
Drugs — 10.9%
ALZA Corp. (B).....................................................................500,000 26,125,000
American Home Products Corp........................................................325,000 18,321,875
Baxter International...............................................................245,000 15,756,562
Chiron Corp. (B)...................................................................435,000 11,391,562
Elan Corp., plc ADR (B)............................................................350,000 24,478,125
Forest Laboratories, Inc. (B)......................................................330,000 17,551,875
Lilly (Eli) & Co...................................................................310,000 27,551,250
Merck & Co., Inc...................................................................170,000 25,075,000
SmithKline Beecham plc ADR.........................................................260,000 18,070,000
-----------
184,321,249
-----------
Medical Supplies and Services — 3.6%
Abbott Laboratories................................................................480,000 $ 23,520,000
American Retirement Corp. 5.75% Conv. Sub. Debs. due 2002.......................$4,000,000 3,360,000
American Retirement Corp. (B)......................................................151,100 2,370,381
Integrated Health Services, Inc. 5.75% Conv. Sub. Debs. due 2001................$6,675,000 5,940,750
Integrated Health Services, Inc. (B)...............................................180,564 2,550,466
Sunrise Assisted Living, Inc. (B)..................................................440,000 22,825,000
-----------
60,566,597
-----------
Technology — 18.2%
Communication Equipment — 5.6%
Ericsson (L.M.) Telephone Co. 4.25% Conv. Sub. Debs. due 2000.....................$120,000 765,000
Ericsson (L.M.) Telephone Co. ADR (B)..............................................750,000 17,953,125
Lucent Technologies Inc............................................................105,000 11,543,438
Motorola, Inc. LYONs due 2009.....................................................$650,000 721,500
Motorola, Inc......................................................................150,000 9,159,375
Nokia Corp. Pfd. ADR...............................................................300,000 36,131,250
Northern Telecom Ltd...............................................................380,000 19,000,000
-----------
95,273,688
-----------
Computer Related — 8.1%
Affiliated Computer Services, Inc. (B)..............................................63,500 2,857,500
Cisco Systems, Inc. (B)............................................................468,750 43,505,859
DST Systems Inc. (B)...............................................................360,000 20,542,500
First Data Corp....................................................................343,980 10,964,362
Hewlett-Packard Co.................................................................275,000 18,785,938
QRS Corp. (B)......................................................................425,000 20,400,000
Sterling Commerce, Inc. (B)........................................................420,000 18,900,000
-----------
135,956,159
-----------
Electronics — 4.5%
Intel Corp.........................................................................170,000 20,155,625
Solectron Corp. (B)................................................................600,000 55,762,500
-----------
75,918,125
-----------
Transportation — 2.9%
Delta Air Lines, Inc...............................................................300,142 15,607,384
FDX Corp. (B)......................................................................260,000 23,188,750
Ryder System, Inc..................................................................400,000 10,400,000
-----------
49,196,134
-----------
Utilities — 14.3%
Electric and Gas Utilities — 6.1%
Black Hills Corp...................................................................555,000 14,638,125
CINergy Corp.......................................................................300,000 10,312,500
ENDESA, S.A. ADR...................................................................450,000 12,150,000
LG&E Energy Corp...................................................................400,000 11,325,000
New Century Energies, Inc..........................................................250,000 12,187,500
Northwestern Corp..................................................................445,000 11,764,688
TECO Energy, Inc...................................................................300,000 8,456,250
United Water Resources Inc.........................................................600,000 14,362,500
Washington Gas Light Co............................................................257,000 6,939,000
-----------
102,135,563
-----------
Telephone Utilities — 8.2%
AirTouch Communications (B)............................................... 115,000 $ 8,330,312
Ameritech Corp............................................................ 310,000 19,646,250
BellSouth Corp............................................................ 440,000 21,945,000
Frontier Corp............................................................. 101,000 3,434,000
MCI WorldCom, Inc. (B).................................................... 420,000 30,135,000
MediaOne Group, Inc. 6.25% PIES due 2001.................................. 85,000 5,652,500
NEXTEL Communications, Inc. (B)........................................... 95,000 2,244,375
Qwest Communications International, Inc. 5.75% TRENDS Pfd. due 2003 (D)... 125,000 5,812,500
Qwest Communications International, Inc. (B).............................. 411,406 20,570,300
SBC Communications Inc.................................................... 400,000 21,450,000
--------------
139,220,237
--------------
Total Stocks and Convertible Securities
(Cost $777,270,225)(E).................................................... 1,657,540,896
--------------
Short Term Investments — 1.7%
U.S. Government Obligations -- 1.2%
U.S. Treasury Bills, 4.45%, due 2/25/99................................... $20,000,000 19,864,089
--------------
Commercial Papers — 0.5%
Ford Motor Credit Corp., 5.65%, due 1/7/99................................ $4,135,000 4,131,106
General Electric Capital Corp., 5.95-6.08%, due 1/5/99-1/6/99............. $4,930,000 4,926,235
--------------
9,057,341
--------------
Total Short-Term Investments
(Cost $28,921,430)........................................................ 28,921,430
--------------
Total Investments
(Cost $806,191,655) 1,686,462,326
Cash, receivables and other assets, less liabilities................... 1,618,010
--------------
Net Assets — 100.0%.......................................................... $1,688,080,336
================================================================================================================
Notes:
(A) See note 1 to financial statements. Securities are listed on the New York
Stock Exchange, the American Stock Exchange, or the NASDAQ, except
restricted securities.
(B) Presently non-dividend paying. (C) Non-controlled affiliate.
(D) Restricted securities (Salomon Inc. 7.625% Exch. Notes due 1999, acquired
5/8/96, cost $10,017,100 and Qwest Communications International, Inc. 5.75%
TRENDS Pfd. due 2003, acquired 12/4/98, cost $5,218,750).
(E) The aggregate market value of stocks held in escrow at December 31, 1998
covering open call option contracts written was $20,631,250. In addition,
the required aggregate market value of securities segregated by the
custodian to collateralize open put option contracts written was $9,720,906.
|
