N-CSR 1 fp0003217_ncsr.htm fp0003217_ncsr.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT
COMPANIES

Investment Company Act file number 811-09123
 
AMIDEX™ FUNDS, INC. 

(Exact name of registrant as specified in charter)

 970 Rittenhouse Road    Eagleville      PA   19403

(Address of principal executive offices)         (Zip code)

Matrix Capital Group, Inc.
630 Fitzwatertown Road
Building A, Second Floor
Willow Grove, PA 19090-1904

(Name and address of agent for service)

Registrant's telephone number, including area code: 215.830.8712

Date of fiscal year end:  05/31/2011

Date of reporting period: 05/31/2011
 
 
 

 
 
ITEM 1.
REPORTS TO SHAREHOLDERS
 
The Annual Report to Shareholders for the period ended May 31, 2011 pursuant to Rule 30e-1 under the Investment Company Act of 1940 (the “1940 Act”), as amended (17 CFR 270.30e-1)is filed herewith.

 
ANNUAL REPORT




May 31, 2011




AMIDEX
 M U T U A L   F U N D S



 
 
AMIDEX Funds, Inc.
c/o Matrix Capital Group, Inc.
630 Fitzwatertown Road
Building A, Second Floor
Willow Grove, PA 19090

 
 

 

AMIDEXTM Funds, Inc.
ANNUAL REPORT

Table of Contents
   
President's Letter & Management's Discussion of Fund Performance
1-2
   
Comparison of Investment
3
   
Information About Your Fund's Expenses
4-5
   
Schedule of Investments
6-8
   
Statement of Assets and Liabilities
9
   
Statement of Operations
10
   
Statements of Changes in Net Assets
11
   
Per Share Data
12-14
   
Notes to the Financial Statements
15-21
   
Report of Independent Registered Public Accounting Firm
22
   
Additional Information
23
   
Directors and Officers Information
24-25

 
 

 
 
AMIDEXTM Funds, Inc.
ANNUAL REPORT

President's Letter & Management's Discussion of Fund Performance

May 31, 2011
 
Dear AMIDEXTM Funds, Inc. Shareholder,
 
Enclosed please find the Annual Report for the AMIDEXTM Funds, Inc. for the fiscal year ended May 31, 2011.

During the last fiscal year the AMIDEX35 Israel Mutual Fund continued its recovery from the effects of the recent collapse of the financial and the real-estate markets. Tel Aviv traded shares performed well and the Israeli market continued to rebound from the lows of 2008. During our 2010 annual Index revision we noticed a shift in weight from US traded stock to Israeli traded stock due to an increase in market capitalization on the Tel Aviv Stock Exchange. The Index now is comprised of 12 U.S. traded stocks and 23 Israeli traded stocks. Among the new comers on the Israeli side are Delek Energy, Gazit Globe and HOT Telecommunication. Beginning in early 2010 Greece, Spain and Italy started showing economic weakness. In mid 2010 Greece requested and received a 3 year bailout package but worries continued over its effect on the rest of EU members. Due to Israel’s geographical and economical proximity to the EU, the TASE lost ground during the first quarter of 2011. The strengthening of the U.S. Dollar vs. the Euro and IL Shekel was a second reason for the fund’s weaker performance.  Despite the new turbulence in European markets and fear of insolvency of additional EU members our AMIDEX35TM Israel Mutual Fund benefited from the ongoing growth and development in Israel. Both the Israeli traded companies and the NY traded companies showed strength and resiliency.

Over the last year, despite continued turbulence in world markets, our AMIDEX35TM Israel Mutual Fund benefited from the ongoing growth and development in Israel. The drive, innovation and creativity of the Israeli people remains one of the most exciting stories in the world.  Israel has weathered the world economic storm well, with no government sponsored bailouts and no loss of credibility of its major financial institutions.  Due to ongoing privatization efforts, tight fiscal control, and relatively little exposure to the exotic financial products that decimated many of the world’s financial kingpins, the Israeli economy remains strong and resilient.  Despite the ongoing worldwide recession, Israel has seen growth in many sectors and continues to be a world leader in technological innovation.  In addition to the excitement and potential of the hi-tech markets, Israel’s traditional industries, such as chemicals, banking, insurance and pharmaceuticals, continue to thrive and turned in solid performance over the last year.

One of Israel’s greatest challenges is overcoming the relentless stream of biased and negative media portrayals.  Although political developments and news stories rarely have any long term effect on the performance of Israelis stocks, it remains difficult to motivate investors to look past perceptions and at reality.  Recent developments in the region have been exploited to promote campaigns aimed at delegitimizing Israel.  Those of us who believe in Israel and its people, and who strive to invest in Israeli companies for mutual benefit, must be careful to refute these anti-Israeli messages.  Although negative depictions of Israel in the press still plague us, we believe that the true story of Israel’s economic miracle will ultimately prevail.
 
We remain convinced that over the long term, Israeli entrepreneurialism coupled with Israel’s legendary investments in research and development, will lead to opportunities for portfolio growth.  We intend to stay the course and to patiently wait for US markets to gradually rebound.

For the 12-month period ending May 31, 2011, the AMIDEX35TM Israel Mutual Fund Class No-Load, Class A and Class C returned +21.93%, +21.81%* and +20.81%*, respectively.  For the same period, the S&P500 Total Return Index returned +25.95%.  For the ten year period ended May 31, 2011, the AMIDEX35TM Israel Mutual Fund Class No-Load had an annualized return of +3.19%.  For the same period, the S&P500 Index rose +2.64%.   For the ten year period ended May 31, 2011, the AMIDEX35TM Israel Mutual Fund Class A had an annualized return +3.11%*.  For the ten year period ended May 31, 2011, the AMIDEX35TM Israel Mutual Fund Class C had an annualized return of +2.35%.

* The returns stated above do not take into consideration transaction charges such as sales loads, redemption fees or CDSC fees.  If these fees were taken into consideration, the one year and since inception returns for the AMIDEX35TM Israel Mutual Fund Class A shares would be +15.11% and +2.53%, respectively and the one year returns for the AMIDEX35TM Israel Mutual Fund Class C shares would be +19.60%.  There is a maximum sales load of 5.50% on certain Class A subscriptions.  A 1% contingent deferred sales charge “CDSC fee” is imposed on redemptions of Class C shares made within thirteen months of purchase.  The Fund imposes a 2% redemption fee on AMIDEX35TM Israel Mutual Fund No-Load Class shares redeemed within one year of purchase.  See Total Return Table on the following pages for additional return information.

Portfolio Summary - The AMIDEX35™ Index tracks the largest Israeli companies traded either in Tel Aviv or New York, providing for the first time an accurate benchmark for Israel's equity universe.  The AMIDEX35TM Israel Mutual Fund’s total industry holdings as of May 31, 2011 were as follows:

Israeli traded
 
Banking & Insurance
20.67%
Diversified Holdings
12.76%
Chemicals
12.39%
Telecommunications
5.59%
Oil & Gas
3.73%
Food
3.32%
Real Estate
0.75%
Media
0.61%
Retail
0.46%
 
 
1

 
 
U.S. traded
 
Telecommunications
12.81%
Computer Hardware/Software
12.67%
Pharmaceuticals
10.50%
Defense Equipment
2.10%
Electronics
0.93%

Portfolio holdings are subject to change.  Percentages are based on net assets of the Fund at May 31, 2011.
 
Our primary investment strategies and objectives remain unchanged.  Our Fund is based on an index, and there has been no change in the underlying index or portfolio, other than routine maintenance as outlined in the prospectus.

We continue to believe in the merits of investing in our AMIDEX35TM Israel Mutual Fund and, and we remain committed to the index methodology as the best method of holding portfolios of stocks in our specialty niche.  We encourage our investors to remain focused on the long-term prospects for the Fund, and to persevere through the uncertainties that still lie ahead.

Let's hope that the future brings comfort to those who are suffering, calm to regions too long plagued by violence, and security, both physical and economic, to all Americans.

Best regards,
 
 
Cliff Goldstein
President, AMIDEXTM Funds, Inc.

This report is intended for the Funds’ shareholders.  It may not be distributed to prospective investors unless it is preceded or accompanied by the current Fund prospectus.

The performance information quoted in this Annual Report assumes the reinvestment of all dividend and capital gain distributions, if any, and represents past performance, which is not a guarantee of future results.  The returns shown do not reflect taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares.  An investor's return and principal value will fluctuate so that an investor's shares, when redeemed, may be more or less than their original cost.  Current performance may be lower or higher than the performance data quoted.  See Total Return Table on the following pages for additional return information.

Please call 215-830-8712 or visit the Funds’ website http://www.amidex.com/fund.htm for current performance data.  We advise you to consider the fund’s objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the fund.  Please read the prospectus carefully before you invest.

The AMIDEX35™ Index is a market capitalization weighted index, consisting of the thirty five highest capitalized Israeli companies publicly traded on the TASE, NASDAQ, or NYSE.  The AMIDEX35™ Index is not an investment product available for purchase.

 
2

 

AMIDEXTM Funds, Inc.
ANNUAL REPORT

COMPARISON OF A $10,000 INVESTMENT IN THE AMIDEX35TM ISRAEL MUTUAL
FUND VERSUS THE MSCI WORLD INDEX AND THE S&P 500 TOTAL RETURN INDEX
 (Unaudited)
 


Average Annual Total Return (Unaudited)

   
Ten Years 
Five Years 
One Year 
   
ended
ended
Ended
   
May 31, 2011
May 31, 2011
May 31, 2011
No Load Class
3.19%
7.82%
21.93%
Class A
With sales charge
2.53%
6.48%
15.11%
 
Without sales charge
3.11%
7.70%
21.81%
Class C
With contingent deferred sales charge
2.35%
6.92%
19.60%
 
Without contingent deferred sales charge
2.35%
6.92%
20.81%
MSCI World Index
4.24%
3.23%
28.80%
S&P 500 Total Return
2.64%
3.32%
25.95%

The performance information quoted in this annual report assumes the reinvestment of all dividend and capital gain distributions, if any, and represents past performance, which is not a guarantee of future results. The returns shown do not reflect taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. The investment return and principal value of an investment will fluctuate and, therefore, an investor’s shares, when redeemed, may be worth more or less than their original cost.

The above graph depicts the performance of the AMIDEX35 Israel Mutual Fund versus the MSCI World Index and the S&P 500 Total Return Index. The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The S&P 500 Total Return Index by Standard and Poor’s Corp. is a capitalization-weighted index comprising 500 issues listed on various exchanges, representing the performance of the stock market generally. Please note that indices do not take into account any fees and expenses of investing in the individual securities that they track and individuals cannot invest directly in any index.

As with any fund, save an index fund, that commonly compares its performance to the MSCI World Index and the S&P 500 Total Return Index, such a comparison may be said to be inappropriate because of the dissimilarity between the Fund’s investments and the securities comprising the indices; so too with the AMIDEX35 Israel Mutual Fund, which will not invest in certain securities comprising these indices.

 
3

 

AMIDEXTM Funds, Inc.
ANNUAL REPORT

Information About Your Fund’s Expenses (Unaudited)


As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions, redemption fees and exchange fees; and (2) ongoing costs, including management fees, distribution and service (12b-1) fees; and other Fund expenses. The example below is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The table below illustrates an example investment of $1,000 at the beginning of the period (December 1, 2010) and held for the entire period of 12/01/10 through 05/31/11. Please note however that this table is unaudited. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

Actual Expenses

The first section of the table provides information about actual account values and actual expenses (relating to the example $1,000 investment made on 12/01/10). You may use the information in this row, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first row under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.



Hypothetical Example for Comparison Purposes

The second section of the table provides information about the hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. For more information on transactional costs, please refer to the Fund’s prospectus.

Expenses and Value of a $1,000 Investment for the six months ended May 31, 2011
 
Actual Fund Return (in parentheses)
Beginning
Account Value
12/01/10
Ending
Account Value
05/31/11
Expenses Paid
During Period*
Amidex35TM Israel Mutual Fund No-Load Class (+6.49%)
$1,000.00
$1,064.90
$13.54
Amidex35TM Israel Mutual Fund Class A (+6.41%)
1,000.00
1,064.10
13.53
Amidex35TM Israel Mutual Fund Class C (+6.05%)
1,000.00
1,060.50
17.41
 
 
4

 
 
AMIDEXTM Funds, Inc.
ANNUAL REPORT
 
Information About Your Fund’s Expenses (Unaudited) (continued)


Hypothetical 5% Fund Return
Beginning
Account Value
12/01/10
Ending
Account Value
05/31/11
Expenses Paid
During Period*
Amidex35TM Israel Mutual Fund No-Load Class
$1,000.00
$1,011.82
$13.19
Amidex35TM Israel Mutual Fund Class A
1,000.00
1,011.82
13.19
Amidex35TM Israel Mutual Fund Class C
1,000.00
1,008.03
16.97

*Expenses are equal to the Funds’ annualized expense ratios of 2.63%, 2.63% and 3.39% for the Amidex35TM Israel Mutual Fund No-Load Class, Class A and Class C shares, respectively, multiplied by the average account value over the period, multiplied by 182/365 to reflect the one-half year period.

Total Fund operating expense ratios as stated in the current Fund prospectus dated October 26, 2010 were as follows:
 
AMIDEX35TM Israel Mutual Fund Class No-Load
2.86%
AMIDEX35TM Israel Mutual Fund Class A
2.87%
AMIDEX35TM Israel Mutual Fund Class C
3.60%
 
Total Gross Operating Expenses (Annualized) for the year ended May 31, 2011 were 2.62% for the AMIDEX35TM Israel Mutual Fund Class No-Load shares, 2.62% for the AMIDEX35TM Israel Mutual Fund Class A shares and 3.37% for the AMIDEX35TM Israel Mutual Fund Class C shares. Please see the Information About Your Fund’s Expenses, the Financial Highlights and Notes to Financial Statements (Note 4) sections of this report for expense related disclosure during the year ended May 31, 2011.

For more information on Fund expenses, please refer to the Fund’s prospectus, which can be obtained from your investment representative or by calling 1-888-876-3566. Please read it carefully before you invest or send money.

 
5

 
 
 
AMIDEXTM Funds, Inc.
           
AMIDEX35TM ISRAEL MUTUAL FUND
           
SCHEDULE OF INVESTMENTS
           
May 31, 2011
ANNUAL REPORT
             
   
Shares
   
Fair Value
 
ISRAEL - 60.28%
           
             
COMMON STOCK - 60.28%
           
             
Banking & Insurance - 20.67%
           
Bank Hapoalim BM *
    237,228     $ 1,220,661  
Bank Leumi Le-Israel BM *
    265,616       1,289,428  
Clal Insurance Enterprise Holdings Ltd. *
    8,756       206,668  
First International Bank of Israel Ltd.
    10,000       150,611  
Harel Insurance Investments & Financial Services Ltd.
    4,200       233,714  
Israel Discount Bank Ltd.*
    200,810       400,860  
Migdal Insurance & Financial Holdings Ltd.
    214,216       397,696  
Mizrahi Tefahot Bank Ltd.
    45,915       490,019  
              4,389,657  
                 
Chemicals - 12.39%
               
Israel Chemicals Ltd.
    132,335       2,157,569  
Makhteshim-Agan Industries Ltd.
    89,487       472,698  
              2,630,267  
                 
Diversified Holdings - 12.76%
               
Africa Israel Investments Ltd. *
    11,651       84,263  
Clal Industries and Investments
    15,000       118,088  
Delek Group Ltd.
    2,064       500,141  
Discount Investment Corp.
    17,360       308,196  
Israel Corp. Ltd. *
    1,388       1,513,631  
Koor Industries Ltd.
    9,000       184,531  
              2,708,850  
                 
Food - 3.32%
               
Osem Investments Ltd.
    23,084       374,208  
Strauss Group Ltd.
    21,600       330,789  
              704,997  
                 
Media - 0.61%
               
Hot Telecommunication System
    7,000       128,652  
                 
Oil & Gas - 3.73%
               
Delek Energy Systems Ltd.
    500       176,077  
Oil Refineries Ltd.
    413,000       299,293  
Paz Oil Co., Ltd.
    1,800       316,938  
            $ 792,308  

 
6

 

AMIDEXTM Funds, Inc.
           
AMIDEX35TM ISRAEL MUTUAL FUND
           
SCHEDULE OF INVESTMENTS
           
May 31, 2011
ANNUAL REPORT
             
   
Shares
   
Fair Value
 
ISRAEL - 60.28% (continued)
           
             
COMMON STOCK - 60.28% (continued)
           
             
Real Estate - 0.75%
           
Gazit-Globe Ltd.
    12,000     $ 160,128  
                 
Retail - 0.46%
               
Delek Automotive Systems Ltd.
    8,000       97,788  
                 
Telecommunications - 5.59%
               
Bezeq Israeli Telecomm. Corp. Ltd.
    467,390       1,187,519  
                 
TOTAL COMMON STOCK (Cost $7,404,336)
            12,800,166  
                 
TOTAL ISRAEL (Cost $7,404,336)
            12,800,166  
                 
UNITED STATES - 40.64%
               
                 
COMMON STOCK - 39.01%
               
                 
Computer Hardware/Software - 12.67%
               
Check Point Software Technologies Ltd. *
    36,695       2,015,290  
VeriFone Holdings, Inc.
    14,000       673,820  
              2,689,110  
                 
Defense Equipment - 2.10%
               
Elbit Systems Ltd.
    8,698       446,555  
                 
Electronics - 0.93%
               
Ormat Technologies, Inc.
    9,000       198,090  
                 
Pharmaceuticals - 10.50%
               
Teva Pharmaceutical Industries Ltd - ADR
    43,816       2,230,234  
                 
Telecommunications - 12.81%
               
Amdocs Ltd.*
    30,803       937,643  
Comverse Technology, Inc.
    36,367       270,207  
Cellcom Israel Ltd.
    18,500       561,290  
Nice Systems Ltd. -  ADR *
    11,000       391,600  
Partner Communications Co. Ltd. - ADR
    33,100       559,059  
              2,719,799  
                 
TOTAL COMMON STOCK (Cost $7,937,612)
          $ 8,283,788  

 
7

 
 
AMIDEXTM Funds, Inc.
           
AMIDEX35TM ISRAEL MUTUAL FUND
           
SCHEDULE OF INVESTMENTS
           
May 31, 2011
  ANNUAL REPORT
             
   
Shares
   
Fair Value
 
UNITED STATES - 40.64% (continued)
           
             
SHORT-TERM INVESTMENTS - 1.63%
           
Fidelity Institutional Money Market Fund, 0.11% ** (cost $346,679)
    346,679     $ 346,679  
                 
TOTAL UNITED STATES (Cost $8,284,291)
            8,630,467  
                 
TOTAL INVESTMENTS (Cost $15,688,627) - 100.92%
          $ 21,430,633  
LIABILITIES IN EXCESS OF OTHER ASSETS, NET - (0.92)%
            (196,040 )
NET ASSETS - 100.00%
          $ 21,234,593  
 
*
Non-income producing security.
**
Rate shown represents the rate at May 31, 2011, is subject to change and resets daily.
ADR - American Depository Receipt.
BM - Beeravon Mugbal (Limited)

The accompanying notes are an integral part of these financial statements.

 
8

 

AMIDEXTM Funds, Inc.
  ANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES - May 31, 2011
     
       
   
AMIDEX35TM
 
   
Israel Mutual Fund
 
Assets:
     
Investments, at fair value (cost: $15,688,627)
  $ 21,430,633  
Cash and cash equivalents
    2,755  
Receivables:
       
Dividends
    11,330  
Interest
    51  
Fund shares sold
    871  
Prepaid expenses
    22,469  
Total assets
    21,468,109  
         
Liabilities:
       
Payables:
       
Fund shares purchased
    155,809  
Investment advisory and administrative fees
    15,321  
Distribution fees
    22,653  
Fund accounting and transfer agency fees
    10,250  
Other liabilities and accrued expenses
    29,483  
Total liabilities
    233,516  
Net Assets
  $ 21,234,593  
         
Net Assets consist of:
       
Common stock
  $ 140  
Additional paid-in capital
    21,350,819  
Accumulated realized loss on investments
    (5,858,372 )
Net unrealized appreciation on investments
    5,742,006  
         
         
Total Net Assets (1,397,675 shares outstanding; 500,000,000 shares of $0.0001 par value authorized for the Fund)
  $ 21,234,593  
         
No-load class shares:
       
Net Assets applicable to 933,900 shares outstanding
  $ 15,820,952  
Net Asset Value and offering price per share
  $ 16.94  
         
Minimum Redemption price per share No-load class 1
  $ 16.60  
         
Class A shares:
       
Net Assets applicable to 295,071 shares outstanding
  $ 3,832,952  
Net Asset Value and redemption price per share
  $ 12.99  
         
Maximum Offering price per share Class A 2
  $ 13.75  
         
Class C shares:
       
Net Assets applicable to 168,704 shares outstanding
  $ 1,580,689  
Net Asset Value and offering price per share
  $ 9.37  
         
Minimum Redemption price per share Class C 3
  $ 9.28  
 
1
A redemption fee of 2.00% is imposed on redemptions occurring within 365 days of purchase.
2
A maximum sales charge of 5.50% is imposed on Class A shares.
3
A contingent deferred sales charge (“CDSC”) of 1.00% is imposed in the event of certain redemption transactions within thirteen months following such investments.

The accompanying notes are an integral part of these financial statements.
 
 
9

 
 
AMIDEXTM Funds, Inc.
 
ANNUAL REPORT
STATEMENT OF OPERATIONS
   
 
   
AMIDEX35TM
 
   
Israel Mutual Fund
 
       
   
For the Year Ended
 
 
 
May 31, 2011
 
Investment income:
     
Dividends (net of foreign withholding taxes of $130,759)
  $ 619,232  
Interest
    1,652  
Total investment income
    620,884  
         
Expenses:
       
Investment advisory fees
    170,121  
Distribution fees - No-load Class
    39,441  
Distribution fees - Class A
    10,042  
Distribution fees - Class C
    14,720  
Fund accounting and transfer agent fees
    123,000  
Registration fees
    37,513  
Legal fees
    29,709  
Custody fees
    27,749  
Administrative fees
    21,265  
Insurance fees
    18,503  
Miscellaneous
    17,312  
Networking fees
    17,251  
Audit fees
    20,197  
Out of pocket expenses
    10,942  
Trustee fees
    5,707  
Pricing fees
    4,336  
Total expenses
    567,808  
         
Net investment income
    53,076  
 
       
Realized and unrealized gain on investments and foreign currency transactions:
       
Net realized gain on investments and foreign currency transactions
    197,656  
Net change in unrealized appreciation on investments and foreign currency transactions
    3,867,981  
Net realized and unrealized gain on investments and foreign currency transactions
    4,065,637  
         
Net increase in net assets resulting from operations
  $ 4,118,713  

The accompanying notes are an integral part of these financial statements.

 
10

 

AMIDEXTM Funds, Inc.
ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS
 
   
AMIDEX35TM Israel Mutual Fund
 
             
   
For the
   
For the
 
   
Year Ended
   
Year Ended
 
   
May 31, 2011
   
May 31, 2010
 
Increase in Net Assets
           
Operations:
           
 Net investment income (loss)
  $ 53,076     $ (65,929 )
 Net realized gain (loss) on investments and foreign currency transactions
    197,656       (255,471 )
 Net change in unrealized appreciation on investments and foreign currency transactions
    3,867,981       2,474,750  
Net increase in net assets resulting from operations
    4,118,713       2,153,350  
                 
Distributions to shareholders from:
               
 Net investment income - No-load Class
    (46,186 )     -  
 Net investment income - Class A
    (18,283 )     -  
 Net investment income - Class C
    (773 )     -  
Total distributions to shareholders
    (65,242 )     -  
                 
(Decrease) increase in net assets from Fund share transactions (Note 2)
    (1,710,270 )     2,510,946  
                 
Total increase in net assets
    2,343,201       4,664,296  
                 
Net Assets:
               
 Beginning of year
    18,891,392       14,227,096  
 End of year
  $ 21,234,593     $ 18,891,392  
 Accumulated net investment loss
  $ -     $ (9,440 )

The accompanying notes are an integral part of these financial statements.

 
11

 
 
AMIDEXTM Funds, Inc.
         
ANNUAL REPORT
FINANCIAL HIGHLIGHTS
                 
Per Share Data For a Share Outstanding Throughout Each Fiscal Year  
     
 
   
AMIDEX35TM Israel Mutual Fund
   
No-Load Class
   
For the
   
For the
   
For the
   
For the
     
For the
   
   
Year Ended
   
Year Ended
   
Year Ended
   
Year Ended
     
Year Ended
   
 
 
May 31, 2011
   
May 31, 2010
   
May 31, 2009
   
May 31, 2008
     
May 31, 2007
   
                                   
Net Asset Value, Beginning of Year
  $ 13.93     $ 11.98     $ 17.80     $ 15.19       $ 11.66    
                                             
Investment Operations:
                                           
Net investment income (loss) (a)
    0.05       (0.05 )     (0.06 )     -  
(b)
    (0.01 )  
Net realized and unrealized gain (loss) on investments
    2.99       1.99       (5.78 )     2.60  
 
    3.54    
     Total from investment operations
    3.04       1.94       (5.84 )     2.60  
 
    3.53    
                                             
Distributions:
                                           
From net investment income
    (0.05 )     -       -       (0.01 )       -    
     Total distributions
    (0.05 )     -       -       (0.01 )       -    
                                             
                                             
Paid in capital from redemption fees
    0.02       0.01       0.02       0.02         -  
(c)
                                             
Net Asset Value, End of Year
  $ 16.94     $ 13.93     $ 11.98     $ 17.80       $ 15.19    
                                             
Total Return (d)
    21.93 %     16.28 %     (32.70 )%     17.24 %
 
    30.27 %  
                                             
Ratios/Supplemental Data
                               
 
       
 
Net assets, end of year (in 000's)
  $ 15,821     $ 14,432     $ 11,088     $ 16,517       $ 13,388    
Ratio of expenses to average net assets:
    2.62 %     2.84 %     3.24 %     2.94 %       3.40 %  
Ratio of net investment income (loss) to average net assets:
    0.31 %     (0.32 )%     (0.47 )%     0.02 %       (0.07 )%  
Portfolio turnover rate
    4.06 %     2.56 %     2.08 %     1.07 %
 
    6.31 %
 
 
(a)
Net investment income (loss) per share is based on average shares outstanding.
             
(b)
Net investment income per share resulted in less than $0.01 per share.
             
(c)
Redemption fees resulted in less than $0.01 per share.
                 
(d)
Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund assuming reinvestment of dividends.

The accompanying notes are an integral part of these financial statements.

 
12

 

AMIDEXTM Funds, Inc.
     
ANNUAL REPORT
FINANCIAL HIGHLIGHTS
                 
Per Share Data For a Share Outstanding Throughout Each Fiscal Year  
     
 
   
AMIDEX35TM Israel Mutual Fund
 
   
Class A
 
                                 
   
For the
   
For the
   
For the
   
For the
     
For the
 
   
Year Ended
   
Year Ended
   
Year Ended
   
Year Ended
     
Year Ended
 
 
 
May 31, 2011
   
May 31, 2010
   
May 31, 2009
   
May 31, 2008
     
May 31, 2007
 
                                 
Net Asset Value, Beginning of Year
  $ 10.71     $ 9.22     $ 13.73     $ 11.75       $ 9.02  
                                           
Investment Operations:
                                         
Net investment income (loss) (a)
    0.04       (0.04 )     (0.04 )     -  
(b)
    0.01  
Net realized and unrealized gain (loss) on investments
    2.30       1.53       (4.47 )     2.00         2.72  
     Total from investment operations
    2.34       1.49       (4.51 )     2.00         2.73  
                                           
Distributions:
                                         
From net investment income
    (0.06 )     -       -       (0.02 )       -  
     Total distributions
    (0.06 )     -       -       (0.02 )       -  
                                           
Net Asset Value, End of Year
  $ 12.99     $ 10.71     $ 9.22     $ 13.73       $ 11.75  
                                           
Total Return (c)
    21.81 %     16.16 %     (32.85 )%     17.05 %       30.27 %
                                           
Ratios/Supplemental Data
                                         
Net assets, end of year (in 000's)
  $ 3,833     $ 3,265     $ 2,393     $ 3,771       $ 2,555  
Ratio of expenses to average net assets:
    2.62 %     2.85 %     3.23 %     2.93 %       3.38 %
Ratio of net investment income (loss) to average net assets:
    0.30 %     (0.34 )%     (0.48 )%     0.00 %       0.11 %
Portfolio turnover rate
    4.06 %     2.56 %     2.08 %     1.07 %       6.31 %
 
(a)
Net investment income (loss) per share is based on average shares outstanding.
           
(b)
Net investment income per share resulted in less than $0.01 per share.
             
(c)
Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund assuming reinvestment of dividends.
 

The accompanying notes are an integral part of these financial statements.
 
 
13

 

 
AMIDEXTM Funds, Inc.
     
ANNUAL REPORT
FINANCIAL HIGHLIGHTS
             
Per Share Data For a Share Outstanding Throughout Each Fiscal Year  
     
 
   
AMIDEX35TM Israel Mutual Fund
 
   
Class C
 
                               
   
For the
   
For the
   
For the
   
For the
   
For the
 
   
Year Ended
   
Year Ended
   
Year Ended
   
Year Ended
   
Year Ended
 
 
 
May 31, 2011
   
May 31, 2010
   
May 31, 2009
   
May 31, 2008
   
May 31, 2007
 
                               
Net Asset Value, Beginning of Year
  $ 7.76     $ 6.73     $ 10.09     $ 8.68     $ 6.71  
                                         
Investment Operations:
                                       
Net investment loss (a)
    (0.04 )     (0.08 )     (0.08 )     (0.07 )     (0.06 )
Net realized and unrealized gain (loss) on investments
    1.65       1.11       (3.28 )     1.48       2.03  
     Total from investment operations
    1.61       1.03       (3.36 )     1.41       1.97  
                                         
Net Asset Value, End of Year
  $ 9.37     $ 7.76     $ 6.73     $ 10.09     $ 8.68  
                                         
Total Return (b)
    20.81 %     15.30 %     (33.30 )%     16.24 %     29.36 %
                                         
Ratios/Supplemental Data
                                       
Net assets, end of year (in 000’s)
  $ 1,581     $ 1,195     $ 746     $ 1,279     $ 878  
Ratio of expenses to average net assets:
    3.37 %     3.58 %     3.98 %     3.69 %     4.15 %
Ratio of net investment loss to average net assets:
    (0.47 )%     (1.03 )%     (1.23 )%     (0.75 )%     (0.88 )%
Portfolio turnover rate
    4.06 %     2.56 %     2.08 %     1.07 %     6.31 %
 
(a)
Net investment loss per share is based on average shares outstanding.
             
(b)
Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund assuming reinvestment of dividends.

The accompanying notes are an integral part of these financial statements.

 
14

 

AMIDEXTM Funds, Inc.
ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS
May 31, 2011

1.  
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
 
AMIDEXTM Funds, Inc. (the "Company") was incorporated under the laws of the state of Maryland on April 27, 1999, and currently consists of one active portfolio, the AMIDEX35TM Israel Mutual Fund (the "Fund"). The Fund is a non-diversified Fund. As a non-diversified Fund, it may invest a significant portion of its assets in a small number of companies. The Company is registered as an open-end management investment company under the Investment Company Act of 1940 (the "1940 Act"). The Fund was registered to offer four classes of shares, Class A, Class B, Class C and No-load class, with only the Class A, Class C and No-load shares currently being offered in the AMIDEX35 TM Israel Mutual Fund. Each class differs as to sales and redemption charges, minimum investment amounts and ongoing fees. Income and realized/unrealized gains or losses are allocated to each class based on relative share balances. The Fund’s investment objective is long term growth of capital. The Fund became effective with the SEC on April 27, 1999 and commenced operations on June 8, 1999.
 
The following is a summary of significant accounting policies consistently followed by the Fund. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP").

a)   Investment Valuation - A portfolio security listed or traded on an exchange in domestic or international markets is valued at the last reported sale price of the primary exchange on which it trades before the time when the Fund values assets. Securities traded on more than one market are valued using the market identified as primary based on trading volume and activity. Equity securities traded on the NASDAQ National Market System are valued at the NASDAQ Official Closing Price. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in level 1 of the fair value hierarchy described below. If there are no sales that day, such securities will be valued at the last bid price, if available. Other over-the-counter securities are valued at the last sale price, if published, or the last bid price, if available. Lacking any sales on the principal exchange that day, the security is valued at the last reported bid, if available and would be categorized as level 2. Debt securities with maturities of sixty days or less at the time of purchase are valued based on amortized cost which approximates fair value and would be categorized as level 2. Money market funds are valued at their asset value of $1.00 per share and are categorized as level 1. If market quotations are not readily available, or when the portfolio management team believes that a readily available market quotation or other valuation produced by the Fund's valuation policies is not reliable, the Fund values the assets at fair value using procedures established by the Board of Directors. The Board members have delegated pricing authority to the fair valuation committee of the adviser, for certain pricing issues, as defined in the valuation procedures. Events affecting the value of securities that occur between the time prices are established and the New York Stock Exchange closes are not reflected in the calculation of net asset value unless the fair valuation committee decides that the event would materially affect the net asset value. If the event would materially affect the Fund's net asset values, the security will be fair valued by the fair valuation committee or, at its discretion, by an independent fair valuation vendor. As of and during the year ended May 31, 2011, no securities were valued as determined by the Board of Directors.
 
In accordance with the authoritative guidance on fair value measurements and disclosure under GAAP, ASC 820, the Fund discloses fair value of its investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The objective of a fair value measurement is to determine the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820 are described below:

Level 1 - Quoted prices in active markets for identical securities.
Level 2 - Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3 - Significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.

 
15

 

AMIDEXTM Funds, Inc.
ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS
May 31, 2011

1.
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

The following is a summary of the inputs used, as of May 31, 2011 in valuing the Fund’s investments carried at fair value:
 
Security Classification (a)
     
Level 1
     
     Common Stock - Israel (b)
  $ 12,800,166  
     Common Stock - United States (b)
    8,283,788  
     Short-Term Investments
    346,679  
Total Level 1
  $ 21,430,633  
         
Level 2
  $ -  
         
Level 3
  $ -  
         
Total Investments
  $ 21,430,633  
 
 
(a)
As of and during the year ended May 31, 2011, the Fund held no securities that were considered to be “Level 3” securities (those valued using significant unobservable inputs). Therefore, a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value is not applicable.  There were no significant transfers into and out of Level 1 and 2 during 2010.
 
(b)
All common stocks held in the Fund are Level 1 securities. For a detailed break-out of common stocks by major industry classification, please refer to the Schedule of Investments.

b)   Foreign Currency Translation - Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies against U.S. dollars on the date of valuation. Purchases and sales of securities and income items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date. The Fund does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments. Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest and foreign withholding taxes, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in foreign exchange rates on foreign currency denominated assets and liabilities other than investments in securities held at the end of the reporting period.

c)   Federal Income Taxes - No provision for federal income taxes has been made since the Fund has complied to date with sub-chapter M of the Internal Revenue Code applicable to regulated investment companies and intends to comply in the future and to distribute all of its net investment income and realized capital gains to its shareholders.
 
The Fund recognizes the tax benefits of uncertain tax positions only when the position is “more likely than not” to be sustained assuming examination by tax authorities. Management has reviewed the tax positions in the open tax years of 2007, 2008, 2009 and 2010 and during the year ended May 31, 2011 and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken in the above open tax years. The Fund identifies their major tax jurisdictions as U.S. Federal and Maryland. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statements of operations. During the year ended May 31, 2011, the Fund did not incur any interest or penalties.

d)   Distributions to Shareholders - Dividends from net investment income and distributions of net realized capital gains, if any, will be declared and paid at least annually. Income and capital gain distributions, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. GAAP requires that permanent financial reporting differences relating to shareholder distributions be reclassified to paid-in capital or net realized gain.
 
 
16

 

AMIDEXTM Funds, Inc.
ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS
May 31, 2011

1.
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

e)   Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

f)   Redemption fees and sales charges (loads) - Shareholders of the No-load shares that redeem shares within 365 days of purchase will be assessed a redemption fee of 2.00% of the amount redeemed. The redemption fee is paid directly to and retained by the Fund, and is designed to deter excessive short-term trading and to offset brokerage commissions, market impact and other costs that may be associated with short-term money movement in and out of the Fund. A maximum sales charge of 5.50% is imposed on Class A shares. Shareholders of the Class C shares are imposed a contingent deferred sales charge ("CDSC") of 1.00% in the event of certain redemption transactions within thirteen months following such investments. The CDSC is paid directly to the Adviser to reimburse expenses incurred in providing distribution-related services to the Fund. For the year ended May 31, 2011, there were redemption fees of $19,558 paid to the Fund and CDSC fees of $260 paid to the Adviser.

g)   Other - Investment and shareholder transactions are recorded on trade date. The Fund determines the gain or loss realized from the investment transactions by comparing the original cost of the security lot sold with the net sales proceeds. Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund and interest income is recognized on an accrual basis. Withholding taxes on foreign dividends have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates.

2. 
CAPITAL SHARE TRANSACTIONS

Transactions in shares of capital stock for the Fund for the year ended May 31, 2011 were as follows:
 
   
No-Load
 
   
Shares
   
Amount
 
Sold
    105,908     $ 1,722,870  
Reinvest
    2,329       40,401  
Redeemed
    (210,323 )     (3,381,349 )
Net Decrease
    (102,086 )   $ (1,618,078 )

   
Class A
 
   
Shares
   
Amount
 
Sold
    120,117     $ 1,376,023  
Reinvest
    713       9,493  
Redeemed
    (130,578 )     (1,593,791 )
Net Decrease
    (9,748 )   $ (208,275 )

   
Class C
 
   
Shares
   
Amount
 
Sold
    40,321     $ 346,676  
Reinvest
    43       418  
Redeemed
    (25,696 )     (231,011 )
Net Increase
    14,668     $ 116,083  

 
17

 

AMIDEXTM Funds, Inc.
ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS
May 31, 2011

2.
CAPITAL SHARE TRANSACTIONS (continued)

Transactions in shares of capital stock for the Fund for the year ended May 31, 2010 were as follows:

   
No-Load
 
   
Shares
   
Amount
 
Sold
    232,608     $ 3,444,226  
Redeemed
    (122,289 )     (1,778,052 )
Net Increase
    110,319     $ 1,666,174  

   
Class A
 
   
Shares
   
Amount
 
Sold
    104,268     $ 1,151,459  
Redeemed
    (58,994 )     (668,091 )
Net Increase
    45,274     $ 483,368  

   
Class C
 
   
Shares
   
Amount
 
Sold
    64,658     $ 537,903  
Redeemed
    (21,563 )     (176,499 )
Net Increase
    43,095     $ 361,404  

3.
INVESTMENT TRANSACTIONS
 
For the year ended May 31, 2011, aggregate purchases and sales of investment securities (excluding short-term investments) for the Fund were as follows:

Purchases
Sales
$  821,278
$ 1,660,411

There were no government securities purchased or sold during the year.

4.  
ADVISORY FEES AND OTHER RELATED PARTY TRANSACTIONS
 
Effective October 1, 2003, the Fund has entered into an Advisory Agreement with Index Investments, LLC ("II") to provide investment management services to the Fund. II furnishes, at its own expense, office space to the Fund and all necessary office facilities, equipment and personnel for managing the assets of the Fund. II also pays all expenses of marketing shares of the Fund and related bookkeeping. Pursuant to the Advisory Agreement, II is entitled to receive a fee, calculated daily and payable monthly at the annual rate of 0.80% as applied to the Fund’s daily net assets. For the year ended May 31, 2011, the Fund incurred $170,121 of advisory fees, with $13,606 remaining payable at May 31, 2011.
 
Effective October 1, 2003, the Fund has entered into an Administrative Services Agreement ("ASA") with II to provide administrative services to the Fund. Pursuant to the ASA, II is entitled to receive a fee, calculated daily and payable monthly at the annual rate of 0.10% as applied to the Fund’s daily net assets. For the year ended May 31, 2011, the Fund incurred $21,265 of administrative fees, with $1,715 remaining payable at May 31, 2011.

One director of the Fund is also an Officer of II.
 
The Funds has entered into an Investment Company Services Agreement ("ICSA") with Matrix Capital Group, Inc. ("Matrix"). Pursuant to the ICSA, Matrix will provide day-to-day operational services to the Fund including, but not limited to, accounting, administrative, transfer agent, dividend disbursement, registrar and record keeping services. For its services, Matrix receives $10,250 per month. For the year ended May 31, 2011, Matrix earned $123,000 with $10,250 remaining payable at May 31, 2011 from the Fund.
 
 
18

 

AMIDEXTM Funds, Inc.
ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS
May 31, 2011
 
4.
ADVISORY FEES AND OTHER RELATED PARTY TRANSACTIONS (continued)

Certain Officers of the Fund are also employees of Matrix.
 
The Fund and II have entered into a Distribution Agreement with Matrix Capital Group, Inc. Pursuant to the Distribution Agreement, Matrix will provide distribution services to the Fund. Matrix serves as underwriter/distributor of the Fund. Pursuant to the Distribution Agreement, Matrix receives $20,000 per year from the Fund. Matrix also receives commissions from the sale of Class A Fund shares for which they are the broker of record. The allocated distribution fees are reduced by the amount of commissions received and the remainder is paid from the accruals pursuant to Rule 12b-1 under the Investment Company Act of 1940. For the year ended May 31, 2011, Matrix received net distribution fees of $18,824 from the Fund. For the year ended May 31, 2011, Matrix received commissions from the sale of Fund shares of $1,176 from the Class A shares.
 
A separate plan of distribution has been adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940 for each class of shares. With respect to Class A and the No-load class of shares, the plan provides that the Fund may pay a servicing or Rule 12b-1 fee of up to 0.25% annually of the Fund's average net assets attributable to each class of shares, respectively, and up to 1.00% annually of the Fund’s average net assets attributable to Class C shares to persons or institutions for performing certain servicing functions for the Fund's shareholders. The distribution plan is a compensation plan, which also allows the Fund to pay or reimburse expenditures in connection with sales, and promotional services related to distribution of the Fund's shares, including personal services provided to prospective and existing shareholders.
 
The distribution plans for the shares in the Class A, the No-load class and Class C shares took effect November 19, 1999, June 8, 1999 and May 19, 2000, respectively. For the year ended May 31, 2011, the Fund incurred $64,203 in 12b-1 fees with $22,653 remaining payable at May 31, 2011.

5.
TAX MATTERS
 
There were $65,242 of ordinary income distributions paid during the fiscal year ended May 31, 2011 (2010: $Nil) for the Fund.
 
For U.S. Federal income tax purposes, the cost of securities owned, gross unrealized appreciation, gross unrealized depreciation, and net unrealized appreciation (depreciation) of investments at May 31, 2011 were as follows:

Cost
 
Gross
Appreciation
 
Gross
Depreciation
 
Net
Appreciation
 $ 16,459,661
 
 $    8,899,190
 
 $   (3,928,218)
 
 $   4,970,972
 
The difference between book basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales for the Fund.
 
The Fund’s distributable earnings on a tax basis are determined only at the end of each fiscal year.  As of May 31, 2011, the Fund’s most recent fiscal year-end, the components of distributable earnings on a tax basis were as follows:

Unrealized Appreciation
  $ $ 4,970,972  
Capital Loss Carryforwards
    (5,087,388 )
     Total Distributable Earnings, Net
  $ $ (116,366 )
 
The carryforward losses shown above differ from corresponding accumulated net investment loss and accumulated net realized gain (loss) figures reported in the statement of asset and liabilities due to differing temporary book/tax differences due to the tax deferral of wash sales.

 
19

 

AMIDEXTM Funds, Inc.
ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS
May 31, 2011

5.
TAX MATTERS (continued)

Under current tax law, net capital losses realized after October 31st may be deferred and treated as occurring on the first day of the following fiscal year.  As of May 31, 2011, the Fund has elected to defer net capital losses as indicated in the chart below.
 
Post-October Losses
Deferred
   
Utilized
$ -     $ 255,178


As of May 31, 2011 the Fund has capital loss carryforwards available for federal income tax purposes as follows:
 
Expiring in:
2012
  $ (1,246,393 )
 
2013
    (323,400 )
 
2014
    (1,409,903 )
 
2015
    (1,009,874 )
 
2016
    (652,905 )
 
2017
    (393,230 )
 
2018
    (51,633 )
      $ (5,087,338 )
 
At May 31, 2011, the Fund had available for federal income tax purposes unused capital loss carryforwards of $5,087,338, which are available for offset against future capital gains, the use of a portion of which is limited by IRS regulations. To the extent this loss carryforward is used to offset future capital gains, it is probable that the amount offset will not be distributed to shareholders. Capital loss carryforwards in the amount of $100,824 expired during the year ended May 31, 2011.

6.
RECLASS OF CAPITAL ACCOUNTS
 
In accordance with accounting pronouncements, the Fund has recorded reclassifications in the capital accounts. These reclassifications have no impact on the net asset value of the Fund and are designed generally to present accumulated undistributed net investment income and accumulated realized gains/(losses) on a tax basis which is considered to be more informative to the shareholder. As of May 31, 2011, the Fund recorded reclassifications to increase (decrease) the capital accounts as follows:
 
Net
Investment Loss
Paid-in Capital
Accumulated
Capital Losses
$              18,055
$         (118,879)
$           100,824

7. 
CONCENTRATION OF RISK

The Fund invests exclusively in common stock of Israeli companies.  Investing in companies from one geographic region may pose additional risks inherent to a region's economical and political situation.

A large portion of investments held by Fund are considered investments in the technology sector of the market.  Investing in a single market sector may be riskier than investing in a variety of market sectors.
 
 
20

 

AMIDEXTM Funds, Inc.
ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS
May 31, 2011

8. 
BENEFICIAL OWNERSHIP
 
The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a fund creates a presumption of control of the fund, under Section 2(a)(9) of the Investment Company Act of 1940. As of May 31, 2011, Merrill Lynch Pierce, Fenner & Smith, Inc. and AMERITRADE, Inc. held 38.24% and 27.45% respectively, of the Fund’s Class A shares in omnibus accounts for the sole benefit of their customers. As of May 31, 2011, Merrill Lynch Pierce, Fenner & Smith, Inc. held 40.67% of the Fund’s Class C shares in an omnibus account for the sole benefit of their customers.

9.
COMMITMENTS AND CONTINGENCIES
 
In the normal course of business, the Company may enter into contracts that may contain a variety of representations and warranties and provide general indemnifications. The Company’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated; however, management considers the risk of loss from such claims to be remote.

10.
THE REGULATED INVESTMENT COMPANY MODERNIZATION ACT
 
On December 22, 2010, The Regulated Investment Company Modernization Act of 2010 (the “Modernization Act”) was signed by the President. The Modernization Act is the first major piece of legislation affecting Regulated Investment Companies (“RICs”) since 1986 and it modernizes several of the federal income and excise tax provisions related to RICs. Some highlights of the enacted provisions are as follows:
 
Capital losses incurred after December 31, 2010, may now be carried forward indefinitely, and retain the character of the original loss. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital, irrespective of the character of the original loss.
 
The Modernization Act contains simplification provisions, which are aimed at preventing disqualification of a RIC for “inadvertent” failures of the asset diversification and/or qualifying income tests. Additionally, the Modernization Act exempts RICs from the preferential dividend rule, and repealed the 60-day designation requirement for certain types of pay-through income and gains.

Finally, the Modernization Act contains several provisions aimed at preserving the character of distributions made by a fiscal year RIC during the portion of its taxable year ending after October 31 or December 31, reducing the circumstances under which a RIC might be required to file amended Forms 1099 to restate previously reported distributions.
 
Except for the simplification provisions related to RIC qualification, the Modernization Act is effective for taxable years beginning after December 22, 2010. The provisions related to RIC qualification are effective for taxable years for which the extended due date of the tax return is after December 22, 2010.

 
21

 
 

 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Shareholders and Board of Directors of
AMIDEXTM Funds, Inc.

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of AMIDEXTM Funds, Inc. (the “Fund”) comprising the AMIDEX35TM Israel Mutual Fund as of May 31, 2011, 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 five years in the period then ended.  These financial statements and financial highlights are the responsibility of Fund 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 the standards of the Public Company Accounting Oversight Board (United States).  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 May 31, 2011 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  AMIDEX35TM Israel Mutual Fund as of May 31, 2011, 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 five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.




COHEN FUND AUDIT SERVICES, LTD.
Westlake, Ohio
July 26, 2011
 

 
 
22

 

AMIDEXTM Funds, Inc.
ANNUAL REPORT

Additional Information (Unaudited)

 
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (the "Commission") for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q is available on the Commission’s website at http://www.sec.gov. The Fund’s Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC. Information on the operation of the Commission’s Public Reference Room may be obtained by calling 1-800-SEC-0330.
 
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-888-876-3566; and on the Commission’s website at http://www.sec.gov.
 
Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30th is available without charge, upon request, by calling 1-888-876-3566; and on the Commission’s website at http://www.sec.gov.
 
Shareholder Tax Information - The Fund is required to advise you within 60 days of the Fund’s fiscal year end regarding the federal tax status of distributions received by shareholders during the fiscal year. During the fiscal year ended
May 31, 2011, the following dividends and distributions per share were paid by the Fund:

Fund
 
Ordinary Income
 
AMIDEX35TM Israel Mutual Fund No Load Class
  $ 0.046574  
AMIDEX35TM Israel Mutual Fund Class A
    0.057181  
AMIDEX35TM Israel Mutual Fund Class C
    0.004737  
 
Tax information is reported from the Fund’s fiscal year and not calendar year, therefore, shareholders should refer to their Form 1099-DIV or other tax information which will be mailed in 2012 to determine the calendar year amounts to be included on their 2011 tax returns.  Shareholders should consult their own tax advisors.
 
 
23

 
 
DIRECTORS AND OFFICERS INFORMATION (Unaudited)

Management InformationFollowing are the Directors and Officers of the Company, their age and address, their present position with the Company or the Portfolios, and their principal occupation during the past five years. In case a vacancy or an anticipated vacancy on the Board of Directors shall for any reason exist, the vacancy shall be filled by the affirmative vote of a majority of the remaining Directors, subject to certain restrictions under the 1940 Act. Those Directors and Officers, who are "interested persons" (as defined in the 1940 Act) by virtue of their affiliation with either the Company or the Adviser, are indicated in the table. The Company’s Statement of Additional Information includes additional information about the Directors and Officers and is available, without charge, upon request by calling 1-888-876-3566.

Name, Address and Age1
Position(s)
Held with
The
Company
Term of
Office and
Length of
Time
Served2
Principal Occupation(s)
During Past 5 Years
Number of
Portfolios in
Fund
Complex
Overseen
by Director3
Other Directorships
Held by Director4
INDEPENDENT DIRECTORS
       
Eli Gabay, Esq.
Age 51
Director
 
October 2003
Attorney, Solomon Sherman & Gabay, Philadelphia, PA
1
None
Erica Levi
Age 32
Director
 
October 2003
Editor, Philadelphia Magazine; Editor Marion Publications
 
1
 
None
OFFICERS
         
Clifford A. Goldstein5
Age 51
President and Director
1999
President, Index Investments, LLC, November 2002 to present; President, TransNations Investments, LLC, Executive Consultant and Attorney with The Chartwell Law Offices since 2002.
1
None
Larry E. Beaver, Jr.6
630-A Fitzwatertown Road
Willow Grove, PA 19090
Age 41
Chief Accounting Officer
 
May 2003
Director of Fund Administration, Matrix Capital Group, February 2005 to present; Fund Accounting Manager, InCap Service Co., May 2003 to January 2005.
N/A
N/A

1
Each Director may be contacted by writing to the Director, c/o AMIDEXTM Funds, Inc., 970 Rittenhouse Road, Eagleville, PA 19403.
2
Each Director holds office until he resigns, is removed or dies.  The President and Chief Accounting Officer shall hold office for a one year term and until their respective successors are chosen and qualified, or until such officer dies or resigns.
3
The Fund Complex consists of the Company.  The Company has one portfolio, the AMIDEX35 TM   Israel Mutual Fund.
4
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 1940 Act.
5
Indicates an "interested person" as defined in the Investment Company Act of 1940.
6
The Company entered into an agreement related to its Distribution Plan with Matrix Capital Group.  Larry E. Beaver, Jr. is Director of Fund Administration at Matrix.

 
24

 
 
DIRECTORS AND OFFICERS INFORMATION (Unaudited) (continued)

Remuneration Paid to Directors and Officers—Officers of the Company and Directors who are "interested persons" of the Company or the Adviser will receive no salary or fees from the Company.  Each Director who is not an "interested person" receives a fee of $500 per meeting attended. The Company reimburses each Director and officer for his or her travel and other expenses relating to attendance at such meetings.
 
Name of Director1
Aggregate
Compensation
From the Company2
Pension or Retirement
Benefits Accrued As Part of
Portfolio Expenses
Estimated Annual
Benefits Upon
Retirement
Total Compensation From the
Company Paid to Directors2
Independent Directors
Eli Gabay, Esq.
$2,540
None
None
$2,540
Erica Levi
$2,500
None
None
$2,500
Interested Officers
Clifford A. Goldstein
None
Not Applicable
Not Applicable
None
Larry E. Beaver, Jr.
None
Not Applicable
Not Applicable
None

1
Each of the Directors and Officers serves as a Director or Officer to the one portfolio of the Company.
 
2
Figures are for the fiscal year ended May 31, 2011.
 
 
25

 


FOR MORE INFORMATION
 
Visit Our Website:
www.amidex.com
 
Email:
info@amidex.com
 
Call Us Toll Free:
1-888-876 3566

 
 

 
 
ITEM 2.
CODE OF ETHICS.

 
a.
The registrant has, as of the end of the period covered by this report, adopted a Code of Ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.

 
b.
During the period covered by this report, there were no amendments to any provision of the Code of Ethics

 
c.
During the period covered by this report, there were no waivers or implicit waivers of a provision of the Code of Ethics.

 
d.
The registrant’s Code of Ethics is filed herewith.

ITEM 3.
AUDIT COMMITTEE FINANCIAL EXPERT.

The registrant’s Board of Directors has determined that it does not have an audit committee financial expert serving on its audit committee.  At this time, the registrant believes that the experience provided by each member of the audit committee together offer the registrant adequate oversight for the registrant’s level of financial complexity.

ITEM 4.
PRINCIPAL ACCOUNTANT FEES AND SERVICES

 
a.
Audit Fees

The aggregate fees billed for each of the last two fiscal years for professional services rendered by a principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory filings or engagements for those fiscal years were $16,300 for 2011 and $14,650.00 for 2010.

 
b.
Audit related fees

There were no fees billed in each of the last two fiscal years for assurances and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this item.

 
c.
Tax Fees

Set forth below are the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning were $2,000 for 2011 and $4,250 for 2010.

The fees were for preparation of IRS Form 1120-RIC and Form 8613 (exercise tax).  No tax services were provided to the registrant’s investment adviser.
 
 
 

 
 
 
d.
All other fees

During the last two fiscal year end for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) billings for 2011 were $1,100 for the auditor’s consent and $700 for the auditor’s consent and $900 for the auditor’s review of the semi-annual financial statements for 2010.

 
e(1)
Audit Committee’s Pre-Approval Policies

Registrant has adopted an audit committee charter to provide the Audit Committee with guidance.  The audit committee consists of two independent members of the board of directors.  The charter calls for receipt and review of the principal accountant’s written statement concerning independence,; dialogue concerning relationships or services to others (which involved all service providers including registrant’s custodian, investment adviser, transfer agent, fund accountants and administrator); and, prior to the board of directors selecting registrant’s auditor, review and assess services provided, fees charged and to be charged, and other relevant data.  The audit committee charter contains, among other things, express provisions for selecting registrant’s auditor and for pre-approving all permitted non-audit services.  With respect to auditor selection, the charter expressly states that the audit committee is to consider.

 
(a)
the audit scope and plan to assure completeness and effectiveness of resources;

 
(b)
the auditor’s formal written statement delineating relationship with registrant;

 
(c)
the auditor’s relationship or service to others, which may impact objectivity or independence;

 
(d)
rotations of audit partners; and

 
(e)
fees or other compensation paid to the auditor

 
e(2)
Percentage of services approved by the audit committee

 
Registrant
Adviser
Audit related Fees
100%
not applicable
Tax fees
100%
not applicable
All other fees
100%
not applicable
 
 
f.
All work is performed by Cohen Fund Audit Services, Ltd.

 
g.
There were no non-audit fees billed by the registrant’s accountant for services rendered to the registrant and rendered to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the adviser, that provides ongoing services to the registrant during the last two fiscal years.
 
 
h.
There were no non-audit services rendered to the registrant’s investment adviser.

 
 

 

ITEM 5.
AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable.

ITEM 6.
SCHEDULE OF INVESTMENT

Included in annual report to shareholders filed under item 1 of this form.
 
ITEM 7.
DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END   MANAGEMENT INVESTMENT COMPANIES.

Not applicable Fund is an open-end management investment company
 
ITEM 8.
PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not applicable Fund is an open-end management investment company
 
ITEM 9.
PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable Fund is an open-end management investment company.
 
ITEM 10.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 11.
CONTROLS AND PROCEDURES.

 
(a)
The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the 1940 Act, are effective, as of a date within 90 days of the filing date of this report, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended.

 
(b)
There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.
 
ITEM 12.
EXHIBITS

 
(1)
Code of Ethics for Principal Executive Officers of the AMIDEX™ Funds is filed herewith.

 
(2)
Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are filed herewith.

 
(3)
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are filed herewith.

 
 

 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) AMIDEX™ Funds, Inc.

By /s/ Clifford A. Goldstein
Clifford A. Goldstein, President   
 
Date:  July 27, 2011
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the Following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
By /s/ Clifford A. Goldstein
Clifford A. Goldstein, President   

Date: July 27, 2011

By /s/ Larry E. Beaver, Jr.
Larry E. Beaver, Jr., Treasurer

Date:  July 27, 2011