-----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, BqdkMRrspYVgdmzFgm33CBOuJ1IwNgV9S/RzzTox2X9cVzO1MBeDlMXcrCa/ze9g 1oW2GpOEntVL7pxpkV/wtg== 0000756976-99-000115.txt : 19990830 0000756976-99-000115.hdr.sgml : 19990830 ACCESSION NUMBER: 0000756976-99-000115 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990827 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERISTOCK MUTUAL FUND INC CENTRAL INDEX KEY: 0001000207 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 943227081 STATE OF INCORPORATION: MD FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-09090 FILM NUMBER: 99701224 BUSINESS ADDRESS: STREET 1: 1480 MORAGA RD $200 STREET 2: #2 CITY: MORAGA STATE: CA ZIP: 94556 BUSINESS PHONE: 5103763490 MAIL ADDRESS: STREET 1: 127 DEVIN STREET 2: STE 2 CITY: MORAGA STATE: CA ZIP: 94556 N-30D 1 1999 ANNUAL REPORT TO SHAREHOLDERS Ameristock Mutual Fund (AMSTX) Mutual Shareholder Services 1301 East Ninth Street- Suite 1005 Cleveland, OH 44114 (800) 394-5064 http://www.ameristock.com - -------------------------------------------------------------------------------- ANNUAL REPORT June 30, 1999 Welcome, Y2K, Ameristock Lowers Fees, In Closing The total return for the Ameristock Mutual Fund was 11.4% for the first half of year 1999. (Annualized total returns for 3 years was 29.2% and since inception was 30.2%) This marks the fourth year in a row Ameristock is ahead of over most of the other large-cap funds in our category according to Morningstar. Ameristock under performed the S&P500 by 1.0%, which was up 12.4% itself year to date. As long as growth and "dot.com" type companies continue to shine, Ameristock will lag. We promise to continue our consistent philosophy and consistent investing style no matter what. Welcome Hello, and welcome to the Ameristock Mutual Fund. Odds are, this is the first time you have ever received a report from us. You see, we know this because the last time we sent one out (December 1998), our assets were about $40 million and we had around 1,300 investors. Today we stand at $114 million in assets and over 3,600 investors! Thank you to CNBC and once again to Mutual Funds Magazine. All of this growth is nice but has stretched our operating capacity. Many people who called got busy signals or were greeted by a rude and abrupt customer service representative. We are working on both problems and promise that by the end of the year your experience with Ameristock will be better. In case you didn't realize it, I was the rude and abrupt customer service representative people have been complaining about. While I am an OK portfolio manager, I am a poor customer service rep. Our strategy going forward to improve service is to get me out of the customer service loop. When you call the (800) 394-5064 phone number, you will be greeted by a machine that gives you four choices: #1 Ameristock's Daily Net Asset Value #2 To request Prospectuses and Applications ONLY. An answering service. #3 If you have a question about your account, want to establish automatic investing, or want to redeem shares. Our transfer agent, Mutual Shareholder Services. #4 If you have a question about the Fund or have any problems. Me (for now). Y2K The year 2000 computer problem and Ameristock's position on it: We have reviewed our internal computer systems and believe they are in compliance. We have also asked about our outside vendors systems and have been given either verbal or written confirmation of compliance. We are not requesting any special Y2K audits as we believe that this is overkill and would only serve to push the cost of running the Fund up. In addition, we cannot vouch for, nor have we requested the readiness of electricity, phones, planes or any of the millions of products the companies Ameristock invests in or uses. There may be a catastrophic event next New Years Day. If you believe this event may happen, please redeem your shares now before the event. If you are like us and believe this will turn out to be a non-event, please enjoy the millenium and save your confirmation statements. Our local phone numbers are: (216) 736-8154 The Transfer Agent in Cleveland (925) 376-3490 Me Ameristock Lowers Fees Ameristock lowers expense ratio!!! I am proud to announce that Ameristock has instituted a breakpoint at $100 million of our management fee to 75 basis point, a reduction of 25%. What this means is that the first $100 million of assets in Ameristock will be charged 1.00%, and every dollar after that will only be charged .75%. That way, as the Fund grows, the total expense ratio will naturally go down. We have found that there are economies of scale in running a mutual fund and are proud to pass them along to you. In Closing In the last Semi-Annual Report I recommended that over the course of the business cycle, your portfolio should be from 20% to 40% in large capitalization equities like the ones Ameristock invests in and that "Now is the time to be at 20%". This belief has not changed. Markets can and do go down. In a 30% bear market our NAV will be about $26. If you are not prepared to see $26 on your statement OR you think you are smart enough to recognize when the market is heading down and get out in time, Ameristock is not for you. Please redeem your shares today. Ameristock is a no-load, value based, domestic, equity-income fund that invests in large capitalization companies. Thank you for investing in the Ameristock Mutual Fund and please tell you friends about us. Nicholas D. Gerber (July 7, 1999) Past performance does not guarantee future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns reflect reinvested dividends. The Fund's portfolio may differ significantly from the securities in the Index. The Index is unmanaged and therefore does not reflect the cost of portfolio management or trading. - -------------------------------------------------------------------------------- Average Annual Total Returns - -------------------------------------------------------------------------------- Periods Ended June 30, 1999 Final Value of a 1 Year Since Inception $10,000 Investment ------ --------------- ------------------ - -------------------------------------------------------------------------------- Ameristock Mutual Fund 24.9% 29.9% $28,484 - -------------------------------------------------------------------------------- S&P500 Index 22.7% 26.9% $25,961 INDEPENDENT AUDITOR'S REPORT To The Shareholders and Board of Directors Ameristock Mutual Fund: We have audited the accompanying statement of assets and liabilities of Ameristock Mutual Fund, including the schedule of portfolio investments, as of June 30, 1999, and the related statement of operations for the year then ended, the statement of changes in net assets for the two years then ended, and financial highlights for each of the three years then ended and the period from August 1, 1995 (commencement of operations) to June 30, 1996 in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of investments and cash held by the custodian as of June 30, 1999 by correspondence with the custodian and broker. 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 Ameristock Mutual Fund as of June 30, 1999, the results of its operations for the year then ended, the changes in its net assets for the two years then ended, and the financial highlights for the three years then ended and for the period from August 1, 1995 (commencement of operations) to June 30, 1996 in the period then ended, in conformity with generally accepted accounting principles. McCurdy & Associates CPA's, Inc. Westlake, Ohio 44145 July 14, 1999 Ameristock Mutual Fund Schedule of Investments June 30, 1999 Market Industry Company Symbol Shares Value - ---------- ------- ------ ------- ----- Automotive 6.18% Ford Motor Co. F 67,410 $3,804,452 General Motors Corp. GM 49,220 $3,248,520 Broadcasting & Entertainment 0.19% Disney Co. (Walt) DIS 7,070 $217,844 Capital Goods 4.39% Boeing Co. BA 12,860 $568,251 Caterpillar CAT 66,400 $3,984,000 General Electric GE 4,100 $463,300 Chemicals & Fertilizer 4.39% Du Pont de Nemours DD 20,000 $1,366,250 & Co. Dow Chemical DOW 28,760 $3,648,925 Consumer Staples 10.66% Coca- Cola Co. KO 16,680 $1,042,500 McDonalds Corp. MCD 5,800 $239,612 Philip Morris MO 95,910 $3,854,383 Pepsico PEP 55,160 $2,134,003 Proctor & Gamble Co. PG 12,700 $1,133,475 Sara Lee Corp. SLE 165,900 $3,763,856 Diversified 2.78% Minnesota Mining & MMM 36,460 $3,169,741 Mfg. Electronics 8.39% Delphi Automotive DPH 34,401 $638,420 Systems Hewlett Packard Co. HWP 16,800 $1,688,400 International IBM 31,600 $4,084,300 Business Machines Intel Corp. INTC 53,280 $3,170,160 Financial Services 16.60% Allstate Corp. ALL 108,400 $3,888,850 American AIG 3,510 $410,889 International Group Associates First AFS 25,658 $1,136,970 Capital Corp. Bank of America BAC 31,677 $2,322,320 CitiGroup C 67,162 $3,190,219 Fannie Mae FNM 55,070 $3,765,411 Merrill Lynch MER 7,000 $559,562 Washington Mutual WMT 104,000 $3,679,000 Inc. Healthcare (Products) 9.10% Abbott Labs ABT 93,660 $4,261,530 American Home AHP 30,000 $1,725,000 Products Bristol Myers Squibb BMY 27,440 $1,932,805 Johnson & Johnson JNJ 6,340 $621,320 Merck & Co. MRK 20,940 $1,549,560 Pfizer Inc. PFE 2,660 $291,935 Oil & Gas 10.34% BPAmoco (ADR's) BPA 12,704 $1,378,384 Chevron CHV 36,400 $3,464,825 Exxon XON 41,300 $3,185,264 Texaco TX 60,400 $3,775,000 Retailing 4.27% Home Depot Inc. HD 7,730 $498,102 Sears Roebuck & Co. S 87,100 $3,881,394 Wal-Mart Stores WMT 10,300 $496,975 Software 0.53% Microsoft Corp.* MSFT 6,680 $602,452 Telecommunications 11.22% Ameritech Corp. AIT 58,620 $4,308,570 Bell Atlantic Corp. BEL 27,140 $1,774,278 Bellsouth Corp. BLS 22,900 $1,073,438 GTE Corp. GTE 31,270 $2,368,702 AT& T Corp. T 58,575 $3,269,217 ------------ Total Common Stocks: 89.04% (Cost $89,090,143) $101,632,364 ------------ Total Investments $101,632,364 Other Assets Less Liabilities 0.96% $12,512,509 Net Assets: 100% Equivalent to $38.89 per share on 2,934,721 Shares of Capital Stock Outstanding $114,144,873 ================ * Non-Income Producing The accompanying notes are an integral part of the financial statements Ameristock Mutual Fund Statement of Assets and Liabilities June 30, 1999 Assets: Investment Securities at Market Value (Identified Cost- $89,090,143) $101,632,364 Cash $14,532,880 Accounts Receivables Dividends $145,688 Fund Shares Sold $852,608 ----------- Total Assets: $117,163,540 Liabilities: Accounts Payable Security Purchase Payable $2,786,540 Fund Shares Redeemed $226,214 Accrued Management Fee 5,913 ----------- Total Liabilities: $3,018,667 Net Assets $ 114,144,873 Net Assets Consist of: Capital Paid In $100,123,290 Accumulated Undistributed Net Investment Income $424,487 Accumulated Undistributed Net Capital Gain $1,054,875 Accumulated Unrealized Appreciation in Value of Investments Based on Identified Cost- Net $12,542,221 ----------- NET ASSETS FOR 2,934,721 SHARES OUTSTANDING $ 114,144,873 NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE ($114,144,873/ 2,934,721) $38.89 The accompanying notes are an integral part of the financial statements Ameristock Mutual Fund Statement of Operations Year Ending June 30, 1999 Investment Income: Dividends $862,092 Interest $196,295 Other $1,546 ----------------- Total Investment Income $1,059,933 Expenses: Management Fee $470,987 Tax Expense $2,476 ----------------- Total Expenses $473,463 Less: Waiver of Management Fee $(7,022) ----------------- ----------------- Total Expenses, Net of Waiver $466,441 ----------------- Net Investment Income $593,492 Realized and Unrealized Gain on Investments Net Realized Gain (Loss) on Investments $1,089,201 Net Change in Unrealized Appreciation (Depreciation) on Investments $9,418,848 ----------------- Net Realized and Unrealized Gain (Loss) on Investments $10,508,049 ----------------- Net Increase (Decrease) in Net Assets Resulting from Operations $11,101,541 ================= The accompanying notes are an integral part of the financial statements Ameristock Mutual Fund Statement of Changes in Net Assets July 1, 1998 to July 1, 1997 to June 30, 1999 June 30, 1999 From Operations: Net Investment Income $593,492 $122,048 Net Realized Gain (Loss) $1,089,201 $194,468 Net Change in Unrealized Appreciation (Depreciation) on Investments $9,418,848 $1,871,395 ---------------------- -------------------- $11,101,541 $2,187,911 Distributions to Shareholders: Ordinary Income $(238,477) $(115,734) Capital Gains $(215,071) $(220,489) ---------------------- -------------------- $(453,548) $(336,224) From Capital Share Transactions: Proceeds from 3,513,668 Shares Issued $124,983,101 $9,665,215 Net Asset Value of 9,036 Shares Issued from Reinvestment of Dividends $306,145 $246,962 Cost of 993,037 Shares Redeemed $(34,545,669) $(5,654,317) ---------------------- -------------------- $90,743,577 $4,257,860 Net Increase in Net Assets $101,391,570 $6,109,548 Net Assets at Beginning of Period $12,753,303 $6,643,755 ---------------------- -------------------- Net Assets at End of Period (including Undistributed Net Investment Income of $424,487 and $69,472 respectively) $114,144,873 $12,753,303 ====================== ==================== The accompanying notes are an integral part of the financial statements Ameristock Mutual Fund Financial Highlights Selected Data for a Share of Common Stock July 1, 1998 July 1, 1997 to July 1, 1996 August 31, 1995 to Outstanding Throughout the Period to 30-Jun-99 to 30-Jun-98 to 30-Jun-97 to 30-Jun- 96 (1) ------------ ------------ ------------ ------------------- Net Asset Value at Beginning of Period $31.48 $25.06 $19.03 $15.00 Net Investment Income $0.44 $0.41 $0.52 $0.43 Net Gains (Losses) on Securities- Realized and Unrealized $7.41 $7.26 $5.94 $3.78 ------------ ------------ ------------- ------------------- Total From Investment Operations $39.33 $32.73 $25.49 $19.21 Dividend Distribution Net Investment Income $(0.22) $(0.42) $(0.39) $(0.18) Capital Gains $(0.22) $(0.83) $(0.04) $ - ------- ------- ------- --------- Total Distributions $(0.44) $(1.25) $(0.43) $(0.18) Net Asset Value at End of Period $38.89 $31.48 $25.06 $19.03 Total Return 24.94% 30.61% 33.95% 33.70%* Ratios/ Supplemental Data Net Assets End of Period (millions) $114.14 $12.75 $6.64 $2.23 Ratio of Expenses to Average Net Assets Prior to Reimbursement 0.96% 0.95% 1.06% 0.90% (1)* After Reimbursement 0.94% 0.90% 0.56% 0.00% * Ratio of Net Income to Average Net Assets Prior to Reimbursement 1.20% 1.43% 1.89% 1.47% * After Reimbursement 1.22% 1.48% 2.39% 2.90% (1)* Portfolio Turnover Rate 9.22% 11.85% 21.48% 7.43% (1) From Inception of Investment Activity (8/31/95) * Annualized The accompanying notes are an integral part of the financial statements AMERISTOCK MUTUAL FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 1.) SIGNIFICANT ACCOUNTING POLICIES The Fund is a diversified, open-end management investment company, organized as a corporation under the laws of the State of Maryland on June 15, 1995. The Fund's investment objective is to seek total return through capital appreciation and current income by investing (under normal market conditions) at least 80% of the value of its total assets in equity securities consisting of common stocks. The authorized capital stock of the Fund consists of 100 million shares of common stock, par value $.005 per share. Significant accounting policies of the Fund are presented below: SECURITY VALUATION: Investments in securities are carried at market value. The market quotation used for common stocks, including those listed on the NASDAQ National Market System, is the last sale price on the date on which the valuation is made or, in the absence of sales, at the closing bid price. Over-the-counter securities will be valued on the basis of the bid price at the close of each business day. Short-term investments are valued at amortized cost, which approximates market. The cost of securities sold is determined on the identified cost basis. Securities for which market quotations are not readily available will be valued at fair value as determined in good faith pursuant to procedures established by the Board of Directors. Security transactions are recorded on the dates transactions are entered into (the trade dates). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Interest income is recorded as earned. The Fund uses the identified cost basis in computing gain or loss on sale of investment securities. Discounts and premiums on securities purchased are amortized over the life of the respective securities. INCOME TAXES: It is the Fund's policy to distribute annually, prior to the end of the calendar year, dividends sufficient to satisfy excise tax requirements of the Internal Revenue Service. This Internal Revenue Service requirement may cause an excess of distributions over the book year-end accumulated income. In addition, it is the Fund's policy to distribute annually, after the end of the fiscal year, any remaining net investment income and net realized capital gains. ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2.) INVESTMENT ADVISORY AGREEMENT The Fund has entered into an investment advisory and administration agreement with Ameristock Corporation. The Investment Advisor receives from the Fund as compensation for its services to the Fund an annual fee of 1% of the Fund's net assets. The Investment Advisor has obligated itself to reimburse the Fund to the extent the Fund's total annual expenses excluding taxes, interest, brokerage commissions and extraordinary litigation expenses exceed 1% of its average daily net asset value. The advisor received management fees of $470,987 during the twelve months ending June 30, 1999. During the Fund's initial year, the Advisor had paid all Fund expenses. 3.) RELATED PARTY TRANSACTIONS Certain owners of Ameristock Corporation are also owners and/or directors of Ameristock Mutual Fund. These individuals may receive benefits from any management fees paid to the Advisor. 28% of the Fund's stock is controlled by DLJ-Pershing. 21% of the Fund's stock is controlled by National Financial Services Corp. 16% of the Fund's stock is controlled by FTC & Company. 11% of the Fund is controlled by National Investors Services Corp. All of the preceding companies are unrelated to the Fund or Ameristock Corp. The preceding companies can be deemed as controlling persons. AMERISTOCK MUTUAL FUND NOTES TO FINANCIAL STATEMENTS (CONT'D) JUNE 30, 1999 4.) CAPITAL STOCK AND DISTRIBUTION At June 30, 1999, 100 million shares of capital stock ($.005 par value) were authorized, and paid-in capital amounted to $100,123,290. Transactions in common stock were as follows: ---------------------------------------- ------------- Shares sold............................. 3,513,668 ---------------------------------------- ------------- ---------------------------------------- ------------- Shares issued to shareholders in ---------------------------------------- ------------- ---------------------------------------- ------------- reinvestment of dividends 9,036 ---------------------------------------- ------------- ---------------------------------------- ------------- 3,522,704 ---------------------------------------- ------------- ---------------------------------------- ------------- Shares redeemed.......... (993,037) ---------------------------------------- ------------- ---------------------------------------- ------------- Net increase.............................2,529,667 ---------------------------------------- ------------- ---------------------------------------- ------------- Shares Outstanding: ---------------------------------------- ------------- ---------------------------------------- ------------- Beginning of period................ 405,054 ---------------------------------------- ------------- ---------------------------------------- ------------- End of period........................... 2,934,721 ---------------------------------------- ------------- 5.) PURCHASES AND SALES OF SECURITIES During the twelve months ended June 30, 1999, purchases and sales of investment securities other than U.S. Government obligations and short-term investments aggregated $84,396,275 and $3,882,352 respectively. 6.) FINANCIAL INSTRUMENTS DISCLOSURE There are no reportable financial instruments that have any off-balance sheet risk as of June 30, 1999. 7.) SECURITY TRANSACTIONS For Federal income tax purposes, the cost of investments owned at June 30, 1999 was the same as identified cost. At June 30, 1999, the composition of unrealized appreciation (the excess of value over tax cost) and depreciation (the excess of tax cost over value) was as follows: Net Appreciation Appreciation (Depreciation) (Depreciation) $14,924,222 $(2,382,001) $12,542,221 8 ) DISTRIBUTIONS During the twelve months ended June 30, 1999, distributions of $140,308 were paid from net investment income and $313,240 were paid from realized short and long term capital gains. -----END PRIVACY-ENHANCED MESSAGE-----