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BLUE CHIP VALUE FUND
ANNUAL REPORT
TO STOCKHOLDERS
DECEMBER 31, 2002
PORTFOLIO MANAGER COMMENTARY
Dear Fellow Stockholders:
Once again, this has been a challenging year for the Blue Chip Value Fund.
While the Fund held its own during the difficult first half of our fiscal year,
the second half proved more frustrating. In what could be termed a tale of two
quarters, corporate malfeasance, geopolitical tensions and high-profile
bankruptcies sent the S&P 500 Index to a 17.28% decline in the third quarter,
its worst quarterly performance since the fourth quarter of 1987. Following a
bottom in early October, the market then engineered a solid relief rally before
losing steam in late December, leaving the S&P 500 up 8.44% for the fourth
quarter. In both instances, the environment was characterized by extremely high
levels of volatility, in large part due to sudden and severe swings in investor
sentiment.
Against this highly emotional backdrop, the Fund's net asset value (NAV)
declined 20.60% for the fiscal year ended December 31, 2002, modestly
outperforming the 22.09% drop of its benchmark, the S&P 500 Index. With respect
to market performance, the Fund ended the year trading at a discount to NAV
after having started the year at a premium. This resulted in a negative market
price return of 32.19%. Although no one celebrates a decline in value, this is
the third consecutive year that the Fund's NAV performance has bested its
benchmark, in a period which coincides with the well-documented downturn in the
financial markets. Nevertheless, recent losses are not the kind of results we
are accustomed to reporting.
In our view, investing is a long-term process that requires consistent
discipline and the ability to follow that discipline through various market
cycles and short-term market phenomenon. Our investment discipline is
characterized by identifying businesses where, in our opinion, strong management
teams exhibit the ability to generate improving returns on their invested
assets. When the intrinsic value of this type of business in our opinion exceeds
its current share price, we believe we have an excellent long-term investment.
2
Since we last reported at mid-year, our better performing investments were
among the consumer staples, cyclicals and energy sectors. Unusually high
valuations limited our exposure to staples, whose market basket finished down
10% for the period. However, our holdings in the sector were up on average 1.5%,
bolstered by a 23% second-half advance for food and household products leader
Sara Lee Corp. In consumer cyclicals, our defensive, valuation-sensitive
holdings, which included discount apparel retailer TJX Companies, outperformed
the market basket by 4%. Meanwhile, strong fundamentals and visible cash flows
led us to overweight energy, where our holdings outperformed the market basket
by 5%. Overall, our best performing sector for the year was communications.
Although we cut back our investments in the sector as values declined, the
Fund's holdings outpaced the market average by 16%.
The widely-covered bankruptcy filings of WorldCom and Adelphia
Communications produced two violent sell-offs during the third quarter. Although
neither company was held in the Fund, considerable damage was inflicted upon
global banking giant J.P. Morgan Chase & Co., causing us to liquidate the
position in the third quarter. Further contributing to our weaker third quarter
performance was insurance brokerage AON Corp., whose turnaround efforts
unexpectedly reversed course. The capital goods sector also came under pressure
as, it appears, investors increasingly eschewed stable businesses for higher
risk names that had fallen dramatically. Although defense contractors Raytheon
Co. and General Dynamics Corp. outperformed earlier in the year, their presence
worked against us during the second half. Even so, our holdings in the sector
were up 1.7% for the year, while the market basket closed down 20.2%.
Looking ahead, we believe our fourth quarter gains may be an indication
that the market is finally discounting an economic recovery. However, it appears
to us that war fears and credit concerns continue to have a dampening effect,
curbing the propensity of businesses to hire and invest capital. For that
reason, we remain somewhat cautious on the sustainability of gains in areas such
as technology, telecommunications, and certain consumer-related businesses,
sectors that drove the late-period advance. We are watchful for opportunities to
3
trim positions in these groups, while adding to holdings that were overlooked
but whose intrinsic value we perceive is still visibly higher than their current
market value. The strength of our investment philosophy gives us reason to
believe that the Fund will meet and, hopefully, exceed your expectations.
Consistent with this belief, your Board of Directors is engaged in the
process of reviewing the risks and rewards of raising additional capital for the
Blue Chip Value Fund through borrowing. The ultimate goal of this investment
would be to enhance your stockholder returns. What makes this opportunity worth
considering are the unusual circumstances of being able to borrow at forty-year
low interest rates, while at the same time, being able to invest in stock prices
that have been down for three years in a row. We will continue to assess the
alternatives and will keep you informed of our final decision.
Thank you for your continued investment in the Blue Chip Value Fund.
Sincerely,
/s/ Mark M. Adelmann
Mark M. Adelmann, CFA, CPA
Portfolio Manager and
Vice President
SEND US YOUR E-MAIL ADDRESS
If you would like to receive monthly portfolio composition and
characteristic updates, press releases and financial reports electronically as
soon as they are available, please send an e-mail to blu@denveria.com and
include your name and e-mail address. You will still receive paper copies of any
required communications and reports in the mail. This service is completely
voluntary and you can cancel at any time by contacting us via e-mail at
blu@denveria.com or toll-free at 1-800-624-4190.
4
SECTOR DIVERSIFICATION
IN COMPARISON TO S&P 500
AS OF DECEMBER 31, 2002*
FUND S&P 500
---- -------
Basic Materials 3.0% 2.7%
Capital Goods 9.0% 4.9%
Commercial Services 2.7% 2.3%
Communications 4.6% 6.6%
Consumer Cyclical 12.0% 12.1%
Consumer Staples 4.4% 9.6%
Energy 6.4% 6.1%
Financials 25.9% 23.1%
Medical/Healthcare 13.2% 14.6%
REITs 0.0% 0.3%
Technology 11.5% 13.3%
Transportation 2.1% 1.7%
Utilities 2.8% 2.8%
* SECTOR DIVERSIFICATION IS SUBJECT TO CHANGE AND MAY NOT BE REPRESENTATIVE
OF FUTURE INVESTMENTS.
AVERAGE ANNUAL TOTAL RETURNS
AS OF DECEMBER 31, 2002
RETURN 1-YEAR 3-YEAR 5-YEAR 10-YEAR
------ ------ ------ ------ -------
Blue Chip
Value Fund NAV (20.60%) (8.27%) (0.74%) 9.20%
Blue Chip Market
Value Fund Price (32.19%) (9.17%) (4.13%) 8.29%
S&P 500
Index (22.09%) (14.55%) (0.58%) 9.34%
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICES WILL FLUCTUATE,
SO THAT SHARES MAY BE WORTH MORE OR LESS THAN ITS ORIGINAL COST WHEN SOLD. TOTAL
INVESTMENT RETURN IS CALCULATED ASSUMING A PURCHASE OF COMMON STOCK ON THE
OPENING OF THE FIRST DAY AND A SALE ON THE CLOSING OF THE LAST DAY OF EACH
PERIOD REPORTED. DIVIDENDS AND DISTRIBUTIONS, IF ANY, ARE ASSUMED FOR PURPOSES
OF THIS CALCULATION TO BE REINVESTED AT PRICES OBTAINED UNDER THE FUND'S
DIVIDEND REINVESTMENT PLAN. RIGHTS OFFERINGS, IF ANY, ARE ASSUMED FOR PURPOSES
OF THIS CALCULATION TO BE FULLY SUBSCRIBED UNDER THE TERMS OF THE RIGHTS
OFFERING. GENERALLY, TOTAL INVESTMENT RETURN BASED ON NET ASSET VALUE WILL BE
HIGHER THAN TOTAL INVESTMENT RETURN BASED ON MARKET VALUE IN PERIODS WHERE THERE
IS AN INCREASE IN THE DISCOUNT OR A DECREASE IN THE PREMIUM OF THE MARKET VALUE
TO THE NET ASSET VALUE FROM THE BEGINNING TO THE END OF SUCH PERIODS.
CONVERSELY, TOTAL INVESTMENT RETURN BASED ON THE NET ASSET VALUE WILL BE LOWER
THAN TOTAL INVESTMENT RETURN BASED ON MARKET VALUE IN PERIODS WHERE THERE IS A
DECREASE IN THE DISCOUNT OR AN INCREASE IN THE PREMIUM OF THE MARKET VALUE TO
THE NET ASSET VALUE FROM THE BEGINNING TO THE END OF SUCH PERIODS.
5
MARKET PRICE PERFORMANCE HISTORY
SINCE INCEPTION (04/15/87)
Month/Year Adjusted Market Price(1) Actual Market Price(2) Annual Total Distributions(3)
---------- ------------------------ ---------------------- -----------------------------
4/87 10 10
6/87 9.5 9.5
9/87 7.8 7.75
12/87 5.58 5.5 .11
3/88 5.87 5.75
6/88 6.31 6.13
9/88 6.1 5.88
12/88 6.28 6 .19
3/89 6.73 6.25
6/89 7.62 6.88
9/89 8.54 7.5
12/89 8.2 7 .78
3/90 8.13 6.75
6/90 8.21 6.63
9/90 6.86 5.38
12/90 7.86 6 .75
3/91 9.28 6.88
6/91 9.88 7.13
9/91 10.49 7.38
12/91 11.4 7.63 .96
3/92 11.77 7.88
6/92 12.07 7.88
9/92 12.18 7.75
12/92 12.81 7.75 .77
3/93 13.64 8.25
6/93 13.78 8.13
9/93 14.51 8.25
12/93 14.57 7.88 .80
3/94 14.1 7.63
6/94 12.54 6.75
9/94 12.83 6.88
12/94 12.65 6.13 .75
3/95 13.68 6.63
6/95 14.78 7.13
9/95 15.88 7.63
12/95 17.91 7.63 1.08
3/96 19.09 8.13
6/96 20.04 8.5
9/96 21.89 9.25
12/96 24.98 9.25 1.35
3/97 22.92 8.38
6/97 27.37 9.75
9/97 31.13 10.81
12/97 35.11 10.94 1.57
3/98 38.12 11.88
6/98 37.19 11.31
9/98 30.52 9.06
12/98 35.58 9.75 1.13
3/99 35.12 9.63
6/99 37.9 10.13
9/99 35.79 9.31
12/99 37.95 8.69 1.68
3/00 36.04 8.25
6/00 37.62 8.38
9/00 38.84 8.44
12/00 36.75 7.55 .89
3/01 34.06 6.79
6/01 41.48 8.05
9/01 37.75 7.14
12/01 41.92 7.56 .74
3/02 39.16 7.02
6/02 34.89 6.1
9/02 28.26 4.8
12/02 28.43 4.59 .56
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICES WILL FLUCTUATE,
SO THAT SHARES MAY BE WORTH MORE OR LESS THAN ITS ORIGINAL COST WHEN SOLD.
(1) REFLECTS THE CUMULATIVE TOTAL RETURN OF AN INVESTMENT MADE BY A STOCKHOLDER
WHO PURCHASED ONE SHARE AT INCEPTION ($10.00 IPO) AND THEN REINVESTED ALL
ANNUAL DISTRIBUTIONS AS INDICATED, AND FULLY PARTICIPATED IN PRIMARY
SUBSCRIPTIONS OF RIGHTS OFFERINGS.
(2) REFLECTS THE ACTUAL MARKET PRICE OF ONE SHARE AS IT HAS TRADED ON THE NYSE.
(3) ANNUAL DISTRIBUTION TOTALS REPRESENT ACTUAL AMOUNTS. THE FUND CURRENTLY
PAYS 2.5% OF ITS NET ASSET VALUE QUARTERLY; HOWEVER THIS POLICY MAY BE
CHANGED AT THE DISCRETION OF THE FUND'S BOARD OF DIRECTORS.
WHY DIVIDEND REINVESTMENT IS IMPORTANT
A very important component of a stockholder's total return comes from the
reinvestment of distributions as the chart above demonstrates. Please read the
following summary of the Fund's Dividend Reinvestment and Cash Purchase Plan and
call us at (800) 624-4190 or visit www.blu.com to obtain an enrollment form or
if you have any additional questions.
6
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
Blue Chip Value Fund, Inc.'s (the "Fund") Dividend Reinvestment and Cash
Purchase Plan offers stockholders the opportunity to reinvest dividends and
capital gain distributions in additional shares of the Fund. A stockholder may
also make additional cash investments under the Plan. There is no service charge
for participation.
Participating stockholders will receive additional shares issued at a price
equal to the net asset value per share as of the close of the New York Stock
Exchange on the record date ("Net Asset Value"), unless at such time the Net
Asset Value is higher than the market price of the Fund's common stock, plus
brokerage commission. In this case, the Fund will attempt, generally over the
next 10 business days (the "Trading Period"), to acquire shares of the Fund's
common stock in the open market at a price plus brokerage commission which is
less than the Net Asset Value. In the event that prior to the time such
acquisition is completed, the market price of such common stock plus commission
equals or exceeds the Net Asset Value, or in the event that such market
purchases are unable to be completed by the end of the Trading Period, then the
balance of the distribution shall be completed by issuing additional shares at
Net Asset Value.
Participating stockholders may also make additional cash investments
(minimum $50 and maximum $10,000 per month) by check or money order (or by wire
for a $10 fee) to acquire additional shares of the Fund. Please note, however,
that these additional shares will be purchased at market value plus brokerage
commission (without regard to net asset value) per share.
A stockholder owning a minimum of 50 shares may join the Plan by sending an
Enrollment Form to the Plan Agent at Mellon Investor Services, LLC, Overpeck
Centre, 85 Challenger Road, Ridgefield Park, NJ, 07660.
The automatic reinvestment of dividends and distributions will not relieve
participants of any income taxes that may be payable (or required to be
withheld) on dividends or distributions, even though the stockholder does not
receive the cash. Participants must own at least 50 shares at all times.
7
A stockholder may elect to withdraw from the Plan at any time on 15-days'
prior written notice, and receive future dividends and distributions in cash.
There is no penalty for withdrawal from the Plan and stockholders who have
withdrawn from the Plan may rejoin in the future.
The Fund may amend the Plan at any time upon 30-days prior notice to
participants.
Additional information about the Plan may be obtained from Blue Chip Value
Fund, Inc. by writing to 1225 17th Street, 26th Floor, Denver, CO 80202, by
telephone at (800) 624-4190 or by visiting us at www.blu.com.
If your shares are registered with a broker, you most likely can still
participate in the Dividend Reinvestment Plan. Please contact your broker about
how to participate and to inquire if there are any fees which may be charged by
the broker to your account.
STOCKHOLDER DISTRIBUTION INFORMATION
Certain tax information regarding Blue Chip Value Fund, Inc. is required to
be provided to stockholders based upon the Fund's income and distributions to
the stockholders for the calendar year ended December 31, 2002.
The Board of Directors of Blue Chip Value Fund, Inc. voted to pay to
stockholders of record at the opening of business on the record date, the
following distributions derived from net investment income as well as return of
capital:
RECORD PAY RETURN OF
DATE DATE DIVIDENDS CAPITAL TOTAL
---- ---- --------- ------- -----
4/17/2002 4/30/2002 $0.0107 $0.1593 $0.17
7/12/2002 7/26/2002 $0.0094 $0.1406 $0.15
10/11/2002 10/25/2002 $0.0075 $0.1125 $0.12
12/31/2002 1/15/2003 $0.0075 $0.1125 $0.12
$0.0351 $0.5249 $0.56
The Fund notified stockholders at the end of January 2003 of amounts for
use in preparing 2002 income tax returns. Please note the return of capital is
non-taxable.
ATTENTION CORPORATE STOCKHOLDERS:
To determine the amount that qualifies for the dividends-received deduction
for corporations, multiply the amount that appears in column 1 of Form 1099-DIV
by 100%.
8
INFORMATION ON THE DIRECTORS AND OFFICERS OF THE FUND
The list below provides certain information about the identity and business
experience of the directors and officers of the Fund. The Fund's Statement of
Additional Information includes additional information about the Fund's
directors, and may be obtained from the Fund free of charge by calling
1-800-624-4190.
INTERESTED DIRECTORS*
TODGER ANDERSON, CFA(1)
Age: 58
POSITION(S) HELD WITH THE FUND:
PRESIDENT AND DIRECTOR
TERM OF OFFICE(2) AND LENGTH OF TIME SERVED:
President since 1987. Director from 1988 to 1995 and since 1998. Term as
Director expires in 2004.
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS:
President and Executive Manager, Denver Investment Advisors LLC (since 1995);
prior thereto President and Director of Portfolio Management, Denver Investment
Advisors, Inc.; Portfolio Manager, Westcore MIDCO Growth Fund (since 1986);
Portfolio Co-Manager, Westcore Select Fund (since 2001).
NUMBER OF PORTFOLIOS IN FUND COMPLEX(3)
OVERSEEN BY DIRECTOR: One
OTHER DIRECTORSHIPS(4) HELD BY DIRECTOR: NONE
KENNETH V. PENLAND, CFA(1)
Age: 60
POSITION(S) HELD WITH THE FUND:
CHAIRMAN OF THE BOARD AND DIRECTOR
TERM OF OFFICE(2) AND LENGTH OF TIME SERVED:
Chairman of the Board and Director since 1987. Term as Director expires in 2003.
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS:
Retired; from 1995 until December 2001, Chairman and Executive Manager, Denver
Investment Advisors LLC; prior thereto Chairman of the Board and Director of
Research, Denver Investment Advisors, Inc.; from 1995 until August 2002,
President, Westcore Funds; Trustee, Westcore Funds (since 2001).
NUMBER OF PORTFOLIOS IN FUND COMPLEX(3)
OVERSEEN BY DIRECTOR: Twelve
OTHER DIRECTORSHIPS(4) HELD BY DIRECTOR: One
9
INDEPENDENT DIRECTORS
ROBERT J. GREENEBAUM(1)
Age: 85
POSITION(S) HELD WITH THE FUND:
DIRECTOR
TERM OF OFFICE(2) AND LENGTH OF TIME SERVED:
Director since 1988. Term expires in 2004.
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS:
Independent Consultant; Director, United Asset Management Corp., Boston,
Massachusetts (February 1982 - May 2000); Consultant, Denver Investment Advisors
LLC, and its predecessor, Denver Investment Advisors, Inc.
NUMBER OF PORTFOLIOS IN FUND COMPLEX(3)
OVERSEEN BY DIRECTOR: One
OTHER DIRECTORSHIPS(4) HELD BY DIRECTOR: None
RICHARD C. SCHULTE(1)
Age: 58
POSITION(S) HELD WITH THE FUND:
DIRECTOR
TERM OF OFFICE(2) AND LENGTH OF TIME SERVED:
Director since 1987. Term expires in 2005.
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS:
Private Investor; from 1993 until 1996, President, Transportation Service
Systems, Inc.; Employee, Southern Pacific Lines, Denver, Colorado (since 1993);
prior thereto, Employee, Rio Grande Industries, Denver, Colorado (holding
company) (since 1991); Vice President Finance and Treasurer, Rio Grande
Holdings, Inc., Denver, Colorado (since 1990); and Vice President, Denver & Rio
Grande Western Railroad Company, Denver, Colorado (since 1990).
NUMBER OF PORTFOLIOS IN FUND COMPLEX(3)
OVERSEEN BY DIRECTOR: One
OTHER DIRECTORSHIPS(4) HELD BY DIRECTOR: None
10
ROBERTA M. WILSON, CFA(1)
Age: 59
POSITION(S) HELD WITH THE FUND:
DIRECTOR
TERM OF OFFICE(2) AND LENGTH OF TIME SERVED:
Director since 1987. Term expires in 2003.
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS:
Retired; from 1985 until July 1998, Director of Finance, Denver Board of Water
Commissioners, Denver, Colorado. Management consultant and coach (since 1998).
NUMBER OF PORTFOLIOS IN FUND COMPLEX(3)
OVERSEEN BY DIRECTOR: One
OTHER DIRECTORSHIPS(4) HELD BY DIRECTOR: None
LEE W. MATHER, JR.(1)
Age: 59
POSITION(S) HELD WITH THE FUND:
DIRECTOR
TERM OF OFFICE(2) AND LENGTH OF TIME SERVED:
Director since 2001. Term expires in 2005.
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS:
Director, American Rivers (conservation organization) (since June 2000);
Investment Banker, Merrill Lynch & Co. (January 1977 - April 2000).
NUMBER OF PORTFOLIOS IN FUND COMPLEX(3)
OVERSEEN BY DIRECTOR: One
OTHER DIRECTORSHIPS(4) HELD BY DIRECTOR: None
GARY P. MCDANIEL(1)
Age: 57
POSITION(S) HELD WITH THE FUND:
DIRECTOR
TERM OF OFFICE(2) AND LENGTH OF TIME SERVED:
Director since 2001. Term expires in 2004.
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS:
Chief Executive Officer, Chateau Communities, Inc. (REIT/ manufactured housing)
(1997-2002); prior thereto, Chief Executive Officer ROC Communities, Inc.
(1980-1997).
NUMBER OF PORTFOLIOS IN FUND COMPLEX(3)
OVERSEEN BY DIRECTOR: One
OTHER DIRECTORSHIPS(4) HELD BY DIRECTOR: None
11
OFFICERS
MARK M. ADELMANN, CFA, CPA
Age: 45
1225 Seventeenth St.
26th Floor
Denver, Colorado 80202
POSITION(S) HELD WITH THE FUND:
VICE PRESIDENT
TERM OF OFFICE(2) AND LENGTH OF TIME SERVED:
Vice President since 2002.
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS:
Vice President, Denver Investment Advisors LLC (since 1995).
W. BRUCE MCCONNEL(5)
Age: 59
One Logan Square
18th and Cherry Sts.
Philadelphia, PA 19103
POSITION(S) HELD WITH THE FUND:
SECRETARY
TERM OF OFFICE(2) AND LENGTH OF TIME SERVED:
Secretary since 1987.
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS:
Partner of the law firm of Drinker Biddle & Reath LLP, Philadelphia, PA.
12
JASPER R. FRONTZ, CPA(5)
Age: 34
1225 Seventeenth St.
26th Floor
Denver, Colorado 80202
POSITION(S) HELD WITH THE FUND:
TREASURER
TERM OF OFFICE(2) AND LENGTH OF TIME SERVED:
Treasurer since 1997.
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS:
Vice President, Denver Investment Advisors LLC (since 2000); Director of Mutual
Fund Administration, Denver Investment Advisors LLC (since 1997); prior thereto,
Fund Controller, ALPS Mutual Fund Services, Inc. (1995-1997), Registered
Representative, ALPS Distributors, Inc. (since 1995).
NOTES
* These directors each may be deemed to be an "interested director" of the
Fund within the meaning of the Investment Company Act of 1940 by virtue of
their affiliations with the Fund's investment adviser and their positions
as officers of the Fund.
1. Each director may be contacted by writing to the director, c/o Blue Chip
Value Fund, Inc., 1225 Seventeenth Street, 26th Floor, Denver, Colorado
80202, Attn: Jasper Frontz.
2. The Fund's By-Laws provide that the Board of Directors shall consist of
three classes of members. Directors are chosen for a term of three years,
and the term of one class of directors expires each year. The officers of
the Fund are elected by the Board of Directors and, subject to earlier
termination of office, each officer holds office for one year and until his
or her successor is elected and qualified.
3. Fund complex is comprised of the Fund, consisting of one portfolio and
Westcore Funds, of which there are eleven portfolios.
4. Includes only directorships of companies required to report to the
Securities and Exchange Commission under the Securities Exchange Act of
1934 (i.e., "public companies") or other investment companies registered
under the Investment Company Act of 1940.
5. Mr. McConnel and Mr. Frontz also serve as Secretary and Treasurer,
respectively, of Westcore Funds.
13
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of
Blue Chip Value Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of
Blue Chip Value Fund, Inc. (the "Fund"), including the schedule of investments,
as of December 31, 2002, and the related statement of operations for the year
then ended, the statements of changes in net assets for each of the two years in
the period then ended, and the financial highlights for each of the three years
in the period then ended. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits. The financial highlights for the period from January 1, 1998 to
December 31, 1999 were audited by other auditors whose report, dated January 14,
2000, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 2002, 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
Blue Chip Value Fund, Inc. as of December 31, 2002, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the three years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Denver, Colorado
January 24, 2003
14
BLUE CHIP VALUE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2002
ASSETS
Investments at market value $ 131,709,131
(identified cost $144,460,402)
Dividends receivable 305,257
Interest receivable 7,412
Other assets 8,701
-------------
TOTAL ASSETS 132,030,501
-------------
LIABILITIES
Distributions payable 3,182,466
Advisory fee payable 69,393
Administration fee payable 8,088
Accrued expenses and other liabilities 57,644
-------------
TOTAL LIABILITIES 3,317,591
-------------
NET ASSETS $ 128,712,910
=============
COMPOSITION OF NET ASSETS
Capital stock, at par $ 265,206
Paid-in-capital 157,588,958
Accumulated net realized loss (16,389,983)
Net unrealized depreciation on investments (12,751,271)
-------------
$ 128,712,910
=============
SHARES OF COMMON STOCK
OUTSTANDING (100,000,000 shares
authorized at $0.01 par value) 26,520,550
=============
Net asset value per share $ 4.85
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15
BLUE CHIP VALUE FUND, INC.
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2002
INCOME
Dividends $ 2,124,125
Interest 167,155
Foreign taxes withheld (10,164)
------------
TOTAL INCOME $ 2,281,116
------------
EXPENSES
Investment advisory fee
(Note 3) 878,334
Administrative services fee
(Note 3) 95,118
Legal fees 75,000
Directors' fees 72,000
Transfer agent fees 70,000
Stockholder reporting 70,000
NYSE listing fees 36,700
Audit and tax preparation fees 24,499
Insurance and fidelity bond 10,975
Custodian fees 9,650
Other 8,500
------------
TOTAL EXPENSES 1,350,776
------------
NET INVESTMENT INCOME 930,340
------------
REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS
Net realized loss on investments (16,214,221)
Change in net unrealized appreciation/
depreciation of investments (21,320,777)
------------
NET LOSS ON INVESTMENTS (37,534,998)
------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS $(36,604,658)
============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16
BLUE CHIP VALUE FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR
ENDED DECEMBER 31,
--------------------------------
2002 2001
------------- -------------
DECREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income $ 930,340 $ 852,030
Net realized gain/(loss) from
securities investments (16,214,221) 8,769,357
Change in net unrealized
appreciation or depreciation
of investments (21,320,777) (13,542,885)
------------- -------------
(36,604,658) (3,921,498)
------------- -------------
DECREASE IN NET ASSETS
FROM DISTRIBUTIONS TO
STOCKHOLDERS FROM:
Net investment income (930,340) (857,755)
Net realized gain on
investments 0 (7,529,781)
Return of capital (13,857,137) (7,032,144)
------------- -------------
(14,787,477) (15,419,680)
------------- -------------
INCREASE IN NET ASSETS FROM
COMMON STOCK TRANSACTIONS:
Proceeds from the sale of
5,262,771 and 3,522,591 shares
respectively, net of offering
expenses (Note 4) 32,797,247 22,551,862
Net asset value of common
stock issued to stockholders
from reinvestment of
dividends (295,323 and
197,107 shares issued,
respectively) 1,790,086 1,444,420
------------- -------------
34,587,333 23,996,282
------------- -------------
NET INCREASE/(DECREASE)
IN NET ASSETS (16,804,802) 4,655,104
NET ASSETS
Beginning of period 145,517,712 140,862,608
------------- -------------
End of period $ 128,712,910 $ 145,517,712
============= =============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17
BLUE CHIP VALUE FUND, INC.
FINANCIAL HIGHLIGHTS
PER SHARE DATA
(for a share outstanding throughout each period)
Net asset value - beginning of period
INVESTMENT OPERATIONS
Net investment income
Net gain (loss) on investments
Total from investment operations
DISTRIBUTIONS
From net investment income
From net realized gains on investments
Return of capital
Total distributions
CAPITAL SHARE TRANSACTIONS
Dilutive effects of rights offerings
Offering costs charged to paid in capital
Total capital share transactions
Net asset value, end of period
Per share market value, end of period
Total investment return(1) based on:
Net Asset Value
Market Value
RATIOS/SUPPLEMENTAL DATA:
Ratios of expenses to average net assets
Ratio of net investment income to average net assets
Ratio of total distributions to average net assets
Portfolio turnover rate(2)
Net assets - end of period (in thousands)
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
(1) TOTAL INVESTMENT RETURN IS CALCULATED ASSUMING A PURCHASE OF COMMON STOCK
ON THE OPENING OF THE FIRST DAY AND A SALE ON THE CLOSING OF THE LAST DAY
OF EACH PERIOD REPORTED. DIVIDENDS AND DISTRIBUTIONS, IF ANY, ARE ASSUMED
FOR PURPOSES OF THIS CALCULATION TO BE REINVESTED AT PRICES OBTAINED UNDER
THE FUND'S DIVIDEND REINVESTMENT PLAN. RIGHTS OFFERINGS, IF ANY, ARE
ASSUMED FOR PURPOSES OF THIS CALCULATION TO BE FULLY SUBSCRIBED UNDER THE
TERMS OF THE RIGHTS OFFERING. GENERALLY, TOTAL INVESTMENT RETURN BASED ON
NET ASSET VALUE WILL BE HIGHER THAN TOTAL INVESTMENT RETURN BASED ON MARKET
VALUE IN PERIODS WHERE THERE IS AN INCREASE IN THE DISCOUNT OR A DECREASE
IN THE PREMIUM OF THE MARKET VALUE TO THE NET ASSET VALUE FROM THE
BEGINNING TO THE END OF SUCH PERIODS. CONVERSELY, TOTAL INVESTMENT RETURN
BASED ON THE NET ASSET VALUE WILL BE LOWER THAN TOTAL INVESTMENT RETURN
18
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------
2002 2001 2000 1999 1998
---------- ---------- ---------- ---------- ----------
$ 6.94 $ 8.17 $ 9.09 $ 10.25 $ 9.76
0.04 0.04 0.05 0.03 0.05
(1.40) (0.29) (0.08) 0.49 1.62
---------- ---------- ---------- ---------- ----------
(1.36) (0.25) (0.03) 0.52 1.67
---------- ---------- ---------- ---------- ----------
(0.04) (0.04) (0.05) (0.03) (0.05)
-- (0.36) (0.84) (1.65) (1.08)
(0.52) (0.34) -- -- --
---------- ---------- ---------- ---------- ----------
(0.56) (0.74) (0.89) (1.68) (1.13)
---------- ---------- ---------- ---------- ----------
(0.16) (0.23) -- -- (0.04)
(0.01) (0.01) -- -- (0.01)
---------- ---------- ---------- ---------- ----------
(0.17) (0.24) -- -- (0.05)
---------- ---------- ---------- ---------- ----------
$ 4.85 $ 6.94 $ 8.17 $ 9.09 $ 10.25
========== ========== ========== ========== ==========
$ 4.59 $ 7.56 $ 7.55 $ 8.6875 $ 9.75
========== ========== ========== ========== ==========
(20.6%) (3.0%) 0.2% 6.2% 17.6%
(32.2%) 14.1% (3.2%) 6.7% 1.3%
0.93% 0.91% 0.88% 0.85% 0.94%
0.64% 0.56% 0.63% 0.32% 0.56%
10.15% 10.21% 10.46% 16.86% 11.62%
65.86% 73.30% 127.55% 54.24% 76.02%
$ 128,713 $ 145,517 $ 140,863 $ 153,002 $ 171,512
BASED ON MARKET VALUE IN PERIODS WHERE THERE IS A DECREASE IN THE DISCOUNT
OR AN INCREASE IN THE PREMIUM OF THE MARKET VALUE TO THE NET ASSET VALUE
FROM THE BEGINNING TO THE END OF SUCH PERIODS.
(2) A PORTFOLIO TURNOVER RATE IS THE PERCENTAGE COMPUTED BY TAKING THE LESSER
OF PURCHASES OR SALES OF PORTFOLIO SECURITIES (EXCLUDING SHORT-TERM
INVESTMENTS) FOR A YEAR AND DIVIDING IT BY THE MONTHLY AVERAGE OF THE
MARKET VALUE OF THE PORTFOLIO SECURITIES DURING THE YEAR. PURCHASES AND
SALES OF INVESTMENT SECURITIES (EXCLUDING SHORT-TERM SECURITIES) FOR THE
YEAR ENDED DECEMBER 31, 2002 WERE $113,253,127 AND $90,787,202,
RESPECTIVELY.
19
BLUE CHIP VALUE FUND, INC.
STATEMENT OF INVESTMENTS
December 31, 2002
MARKET
SHARES COST VALUE
------------ ------------ ------------
COMMON STOCKS - 97.66%
BASIC MATERIALS - 3.05%
FORESTRY & PAPER - 3.05%
Bowater Inc. 93,500 $ 4,423,466 $ 3,922,325
TOTAL BASIC MATERIALS 4,423,466 3,922,325
-------------------------------------------------------------------------------
CAPITAL GOODS - 9.00%
AEROSPACE & DEFENSE - 5.60%
General Dynamics Corp. 44,400 2,904,893 3,524,028
Raytheon Co. 119,800 4,111,505 3,683,850
------------ ------------
7,016,398 7,207,878
ELECTRICAL EQUIPMENT - 3.40%
Parker Hannifin Corp. 94,800 4,519,195 4,373,124
TOTAL CAPITAL GOODS 11,535,593 11,581,002
-------------------------------------------------------------------------------
COMMERCIAL SERVICES - 2.65%
BUSINESS PRODUCTS & SERVICES - 2.65%
Accenture Ltd.
(Bermuda)* 189,600 4,227,692 3,410,904
TOTAL COMMERCIAL SERVICES 4,227,692 3,410,904
-------------------------------------------------------------------------------
COMMUNICATIONS - 4.62%
TELECOMM SERVICE PROVIDERS - 4.62%
ALLTEL Corp. 66,100 3,347,105 3,371,100
BellSouth Corp. 99,800 3,723,365 2,581,826
------------ ------------
7,070,470 5,952,926
TOTAL COMMUNICATIONS 7,070,470 5,952,926
-------------------------------------------------------------------------------
CONSUMER CYCLICAL - 12.01%
CLOTHING & ACCESSORIES - 2.60%
TJX Companies Inc. 171,300 2,590,532 3,343,776
GENERAL MERCHANDISE - 2.17%
Target Corp. 93,300 3,209,526 2,799,000
HOTELS & GAMING - 2.69%
Starwood Hotels & Resorts Inc. 145,600 4,472,957 3,456,544
PUBLISHING & MEDIA - 4.55%
Dow Jones & Company Inc. 70,600 3,827,434 3,052,038
Viacom Inc. - Class B* 69,000 3,404,359 2,812,440
------------ ------------
7,231,793 5,864,478
TOTAL CONSUMER CYCLICAL 17,504,808 15,463,798
-------------------------------------------------------------------------------
20
MARKET
SHARES COST VALUE
------------ ------------ ------------
CONSUMER STAPLES - 4.41%
FOOD & AGRICULTURAL PRODUCTS - 4.41%
Bunge Ltd. (Bermuda) 123,800 $ 2,963,252 $ 2,978,628
Sara Lee Corp. 119,800 2,275,459 2,696,698
------------ ------------
5,238,711 5,675,326
TOTAL CONSUMER STAPLES 5,238,711 5,675,326
-------------------------------------------------------------------------------
ENERGY - 6.43%
EXPLORATION & PRODUCTION - 3.51%
Apache Corp. 34,940 1,967,240 1,991,231
Ocean Energy Inc. 126,600 2,498,932 2,528,202
------------ ------------
4,466,172 4,519,433
INTEGRATED OILS - 2.92%
ConocoPhillips 77,619 4,506,234 3,755,983
TOTAL ENERGY 8,972,406 8,275,416
-------------------------------------------------------------------------------
FINANCIALS - 25.92%
INTEGRATED FINANCIAL SERVICES - 2.39%
Citigroup Inc. 87,500 3,751,033 3,079,125
LIFE & HEALTH INSURANCE - 3.40%
Nationwide Financial Services - Class A 59,500 2,527,815 1,704,675
Principal Financial Group 88,600 2,084,345 2,669,518
------------ ------------
4,612,160 4,374,193
MONEY CENTER BANKS - 1.17%
Bank of America Corp. 21,600 1,462,942 1,502,712
PROPERTY CASUALTY INSURANCE - 11.89%
Allstate Corp. 92,900 3,304,241 3,436,371
American International Group 60,500 3,911,174 3,499,925
Hartford Financial Services Group Inc. 61,400 3,666,588 2,789,402
Radian Group Inc. 97,300 3,402,595 3,614,695
Travelers Property and Casualty Corp.* 133,600 1,924,055 1,957,240
------------ ------------
16,208,653 15,297,633
REGIONAL BANKS - 2.46%
SouthTrust Corp. 127,300 2,847,465 3,163,405
SECURITIES & ASSET MANAGEMENT - 1.71%
Goldman Sachs Group Inc. 13,600 919,330 926,160
Lehman Brothers Holdings Inc. 24,000 1,379,233 1,278,960
------------ ------------
2,298,563 2,205,120
SPECIALTY FINANCE - 2.90%
Federal Home Loan
Mortgage Corp. 63,300 3,720,905 3,737,865
TOTAL FINANCIALS 34,901,721 33,360,053
-------------------------------------------------------------------------------
21
MARKET
SHARES COST VALUE
------------ ------------ ------------
MEDICAL - HEALTHCARE - 13.21%
HEALTHCARE SERVICES - 4.01%
Omnicare Inc. 216,519 $ 4,443,165 $ 5,159,648
MEDICAL TECHNOLOGY - 1.51%
Millipore Corp.* 57,300 2,238,182 1,948,200
PHARMACEUTICALS - 7.69%
Bristol-Myers Squibb Co. 86,380 3,495,709 1,999,697
Pfizer Inc. 83,300 2,646,603 2,546,481
Pharmacia Corp. 50,900 1,664,808 2,127,620
Wyeth 86,100 3,092,459 3,220,140
------------ ------------
10,899,579 9,893,938
TOTAL MEDICAL - HEALTHCARE 17,580,926 17,001,786
-------------------------------------------------------------------------------
TECHNOLOGY - 11.55%
COMPUTER SOFTWARE - 3.30%
Microsoft Corp.* 82,100 5,018,589 4,244,570
ELECTRONIC EQUIPMENT - 2.42%
American Power Conversion* 205,500 2,901,439 3,113,325
PCS & SERVERS - 2.74%
International Business
Machines Corp. 39,200 3,659,672 3,038,000
Sun Microsystems Inc.* 155,400 1,332,002 483,294
------------ ------------
4,991,674 3,521,294
SEMICONDUCTORS - 1.43%
Intel Corp. 118,600 3,851,561 1,846,602
TECHNOLOGY RESELLERS - DISTRIBUTORS - 1.66%
Avnet Inc.* 197,400 4,425,500 2,137,842
TOTAL TECHNOLOGY 21,188,763 14,863,633
-------------------------------------------------------------------------------
TRANSPORTATION - 2.05%
RAILROADS - 2.05%
Union Pacific Corp. 44,000 2,552,640 2,634,280
TOTAL TRANSPORTATION 2,552,640 2,634,280
-------------------------------------------------------------------------------
UTILITIES - 2.76%
ELECTRIC - GAS UTILITIES - 2.76%
Entergy Corp. 39,600 1,540,645 1,805,364
FPL Group Inc. 29,200 1,716,039 1,755,796
------------ ------------
3,256,684 3,561,160
TOTAL UTILITIES 3,256,684 3,561,160
-------------------------------------------------------------------------------
TOTAL COMMON STOCKS 138,453,880 125,702,609
-------------------------------------------------------------------------------
22
MARKET
SHARES COST VALUE
------------ ------------ ------------
SHORT-TERM INVESTMENTS - 4.67%
Fidelity Institutional US
Treasury, Class III 38,527 $ 38,527 $ 38,527
Goldman Sachs Financial
Square Prime Obligations Fund -
FST Shares 5,967,995 5,967,995 5,967,995
------------ ------------
6,006,522 6,006,522
TOTAL SHORT-TERM INVESTMENTS 6,006,522 6,006,522
-------------------------------------------------------------------------------
TOTAL INVESTMENTS 102.33% $144,460,402 $131,709,131
Liabilities in Excess of Other Assets (2.33%) (2,996,221)
------- ------------
NET ASSETS 100.00% $128,712,910
======= ============
*DENOTES NON-INCOME PRODUCING SECURITY.
23
BLUE CHIP VALUE FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Blue Chip Value Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as a diversified, closed-end management
investment company.
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements.
SECURITY VALUATION - Each investment security is generally valued at the last
sale price at period end reported by the principal exchange on which the issue
was traded or, if no sale is reported, at a value based on the average closing
bid and asked price. When market quotations are not readily available or when
events occur that make established valuation methods unreliable, securities of
the Fund may be valued at fair value determined in good faith by or under the
direction of the Board of Directors. Short-term securities having a remaining
maturity of 60 days or less are valued at amortized cost which approximates
market value.
FEDERAL INCOME TAXES - The Fund intends to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment companies and
to distribute all of its taxable income to its stockholders. Therefore, no
provision has been made for federal income taxes.
The Fund had available for federal income tax purposes unused capital loss
carryovers of approximately $15,485,000, which will expire in 2010.
The Fund intends to elect to defer to its fiscal year ending December 31, 2003,
approximately $468,000 of losses recognized during the period November 1, 2002
to December 31, 2002, which will expire in 2011 if unutilized.
INVESTMENT TRANSACTIONS - Investment transactions are accounted for on the date
the investments are purchased or sold (trade date). Realized gains and losses
from investment transactions and unrealized appreciation and depreciation of
investments are determined on the first-in, first-out basis for both financial
statement and federal income tax purposes. Dividend income is recorded on the
ex-dividend date. Interest income, which includes interest earned on money
market funds, is accrued and recorded daily.
24
DISTRIBUTIONS TO STOCKHOLDERS - Distributions to stockholders are recorded on
the ex-dividend date. Distributions are classified to conform to the tax
reporting requirements of the Internal Revenue Code. If the Fund's total
distributions for the year (exclusive of long-term capital gains dividends)
exceed its net investment income and short-term capital gains for such year, a
portion of such distributions may constitute a non-taxable return of capital.
The Fund distributes at least 2.5% of its net asset value quarterly to its
stockholders.
CLASSIFICATION OF DISTRIBUTIONS TO STOCKHOLDERS - The Fund adjusts
classifications of distributions to stockholders to reflect the differences
between financial statement amounts and distributions determined in accordance
with income tax regulations. Accordingly, during the year ended December 31,
2002, amounts have been reclassified to reflect a decrease in paid in capital of
$13,857,137 and a decrease in overdistributed net investment income of
$13,857,137. Net assets of the Fund were unaffected by the reclassifications.
The tax character of the distributions paid during the years December 31,
2002 and December 31, 2001 was as follows:
YEAR ENDED DECEMBER 31,
-----------------------------
2002 2001
------------ ------------
Distributions paid from:
Ordinary income $ 930,340 $ 857,755
Long-term capital gain -- 7,529,781
Return of capital 13,857,137 7,032,144
------------ ------------
Total $ 14,787,477 $ 15,419,680
============ ============
As of December 31, 2002, the components of distributable earnings on a tax
basis were as follows:
Accumulated net realized loss $(15,952,429)
Net unrealized depreciation (13,188,825)
------------
Total $(29,141,254)
============
USE OF ESTIMATES - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and disclosures made in the accompanying
notes to the financial statements. Actual results could differ from those
estimates.
25
2. UNREALIZED APPRECIATION AND DEPRECIATION OF INVESTMENTS (TAX BASIS)
AS OF DECEMBER 31, 2002:
Gross appreciation (excess of value over tax cost) $ 6,060,201
Gross depreciation (excess of tax cost over value) (19,249,026)
Net unrealized depreciation $(13,188,825)
------------
Cost of investments for income tax purposes $144,897,956
============
3. INVESTMENT ADVISORY AND ADMINISTRATION SERVICES
The Fund has an Investment Advisory Agreement with Denver Investment
Advisors LLC ("DIA"), whereby a management fee is paid to DIA based on an annual
rate of 0.65% of the Fund's average weekly net assets up to $100,000,000 and
0.50% of the Fund's average weekly net assets in excess of $100,000,000. The
management fee is paid monthly based on the average of the net assets of the
Fund computed as of the last business day the New York Stock Exchange is open
each week. Certain officers and directors of the Fund are also officers of DIA.
Effective September 1, 1999, ALPS Mutual Funds Services, Inc. ("ALPS") and
DIA entered into an Administrative Agreement to serve as the Fund's
co-administrators. The Administrative Agreement includes the Fund's
administrative and fund accounting services. The administrative services fee is
based on an annual rate for ALPS and DIA, respectively, of 0.08% and 0.01% of
the Fund's average daily net assets up to $75,000,000, 0.04% and 0.005% of the
Fund's average daily net assets between $75,000,000 and $125,000,000, and 0.02%
and 0.005% of the Fund's average daily net assets in excess of $125,000,000. The
administrative services fee is paid monthly.
26
4. CAPITAL TRANSACTIONS
In 2002, the Fund completed a rights offering to existing stockholders. The
Fund issued one right to purchase an additional share of the Fund for each five
shares owned as of February 19, 2002. The subscription period began February 22,
2002 and extended through March 21, 2002. The price of the shares issued was
$6.26, which represented 95% of $6.5886, the average of the Volume Weighted
Average Price on the New York Stock Exchange for March 22, 2002, the pricing
day, and the four preceding trading days. The Fund's net asset value on March
22, 2002 was $7.06. There were 5,262,771 shares issued in the rights offering
for proceeds, net of offering expenses, of $32,797,247.
27
BOARD OF DIRECTORS
Kenneth V. Penland, CHAIRMAN
Todger Anderson, DIRECTOR
Robert J. Greenebaum, DIRECTOR
Lee W. Mather, Jr, DIRECTOR
Gary P. McDaniel, DIRECTOR
Richard C. Schulte, DIRECTOR
Roberta M. Wilson, DIRECTOR
OFFICERS
Kenneth V. Penland, CHAIRMAN
Todger Anderson, PRESIDENT
Mark M. Adelmann, VICE PRESIDENT
W. Bruce McConnel, SECRETARY
Jasper R. Frontz, TREASURER
INVESTMENT ADVISER/CO-ADMINISTRATOR
Denver Investment Advisors LLC
1225 17th Street, 26th Floor
Denver, CO 80202
(303) 312-5100
STOCKHOLDER RELATIONS
Margaret R. Jurado
(800) 624-4190 (303) 312-5100
e-mail: blu@denveria.com
CUSTODIAN
Bank of New York
One Wall Street
New York, NY 10286
CO-ADMINISTRATOR
ALPS Mutual Funds Services, Inc.
1625 Broadway, Suite 2200
Denver, CO 80202
TRANSFER AGENT
DIVIDEND REINVESTMENT PLAN AGENT
(QUESTIONS REGARDING YOUR ACCOUNT)
Mellon Investor Services, LLC
Overpeck Centre
85 Challenger Road
Ridgefield Park, NJ 07660
(800) 288-9541
www.melloninvestor.com
NYSE Symbol--BLU
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BLUE CHIP VALUE FUND
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