Ameristock Corporation, Inc.
1480 I Moraga Rd. #200
Moraga, CA 94556
August 16, 1996
Via EDGAR
Securities and Exchange Commission
Division of Investment Management
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Ameristock Mutual Fund, Inc. (the Fund);
(Registration Nos.: 33-98276; 811-9090
Gentleman:
On behalf of the Fund and pursuant to Rule 30b2-1 and Section 24(b) under
the Investment Company Act of 1940, as amended, we hereby file the Annual
Report to shareholders for the period ended June 30, 1996.
If you have any questions concerning this filing, please do not hesitate to
contact me.
Very Truly Yours,
/s/ Nicholas D. Gerber
Nicholas D. Gerber
Director
Ameristock Corporation
Encl.
<PAGE>
Ameristock Mutual Fund (AMSTX)
1480 I Moraga Rd. #200
Moraga, CA 94556
(800) 394-5064 http://www.ameristock.com/
ANNUAL REPORT
June 30, 1996
The Ameristock Mutual Fund has increased by 28.0% since the Fund
began in August 1995. The stock market, as measured by the S&P500,
rose by 20.6% over this same time period. For the first six months of
1996 your Fund is up 12.1% vs. 10.1% for the S&P500. To say the least,
we are very proud of this track record.
Since the beginning of the year we had expected the market to achieve a
total return somewhere between 7 and 12 percent. Since both the Fund
and the market are already at these levels, we predict the remainder of the
year will show increasing volatility. Expect new market highs and lows
with the market ending the year somewhere between 7-12%. In other
words, just about where we are now.
Please remember, 1) the market can go down as well as up, and 2) your
investing decision should not be influenced by historical or expected returns
but rather by your own goals, risk tolerance, and circumstances.
CHART OF AMSTX VS. S&P500 with Dividends
Growth of $10,000 August 31, 1995 to June 30, 1996.
<PAGE>
Factors that will influence the market most for the rest of1996 include
stable interest rates, a slow economy, a presidential election, and a strong
dollar.
We think that the trend of a stronger dollar that began in 1994 and continued
in 1995, has and will continue to gain momentum in 1996. What this
means (besides affordable overseas vacations) is that both the bond and
stock market do not need to be as good as they were last year for foreign
investors to make money. Our worst case scenario calls for a very strong
dollar, stable interest rates, and a declining stock market for domestic
investors. Foreign investors will still reap a positive total return
because the market won't decline as far as the dollar appreciates.
This scenario does not help Americans since our assets are already in dollars.
However, worst case scenarios don't always come true. Our most likely
scenario calls for a strengthening economy, lower unemployment, President
Clinton's re-election, interest rates to bottom out in the second quarter and
then go up, and the stock market to revert back to its historical 7-12% range.
In any case, investing in large well-known American companies is always
a good decision and we hope you will increase, or start, your investment in
the Ameristock Mutual Fund this year.
The Ameristock Mutual Fund is a no-load, value based, domestic equity-income
fund that invests in large capitalization companies.
Ameristock Top 10 Stock Holdings
June 30, 1996
Intel Corp.
Abbott Labs
Bankamerica Corp.
Citicorp.
Philip Morris
Federal Natl. Mtge. Assn.
Ford Motor Co.
Bellsouth Corp.
General Motors Corp.
Ameritech Corp.
Nicholas D. Gerber, Portfolio Manager (July 29, 1996)
<PAGE>
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, 1996, and the related
statement of operations, the statement of changes in net assets,
and financial highlights for 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, 1996 by correspon-
dence 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 Ameristock Mutual Fund as of June 30, 1996,
the results of its operations, the changes in its net assets, and
the financial highlights 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 20, 1996
<PAGE>
AMERISTOCK MUTUAL FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<S> <C> <C> <C>
Market
Industry Shares Value
Automotive - 7.75%
Ford Motor Co 2,710 $ 87,736
General Motors Corp 1,620 $ 84,848
Broadcast &
Entertainment - 1.10%
Disney Co. (Walt) 390 $ 24,521
Capital Goods - 2.65%
Boeing Co. 180 $ 15,683
General Electric 500 $ 43,375
Chemicals & Fertilizer - 7.35%
Dow Chemical 1,060 $ 80,560
Du Pont 1,050 $ 83,081
Consumer Staples -11.92%
Coca-Cola Co. 980 $ 48,020
Eastman Kodak Co. 610 $ 47,428
McDonalds Corp. 400 $ 18,650
Pepsico 560 $ 19,880
Philip Morris 870 $ 90,589
Proctor & Gamble Co. 450 $ 40,781
Diversified - 0.81%
Minnesota Mining & Mfg. 260 $ 17,940
Electronics - 7.80%
Hewlett Packard Co. 350 $ 34,869
Intel Corp. 1,420 $104,281
Intl. Bus. Machines 350 $ 34,650
Financial Services -13.32%
American Intl. Group 160 $ 15,780
Bankamerica Corp. 1,270 $ 96,203
Citicorp 1,150 $ 95,163
Fed Nat'l Mort. Assoc. 2,670 $ 89,445
Healthcare (Products )-12.24%
Abbot Labs 2,280 $ 99,180
American Home Products 900 $ 54,113
Bristol Myers Squibb 360 $ 32,400
Johnson & Johnson 340 $ 16,830
Merck & Co. 720 $ 46,530
Pfizer, Inc. 330 $ 23,554
Oil & Gas - 4.15%
Amoco Corp. 350 $ 25,327
Chevron 400 $ 23,600
Exxon 500 $ 43,438
Retailing - 3.10%
Home Depot, Inc. 410 $ 22,140
Wal-Mart Stores 1,850 $ 46,944
Software - 1.94%
Microsoft Corp.* 360 $ 43,245
Telecommunications -14.02%
Ameritech Corp. 1,410 $ 83,719
AT&T Corp. 350 $ 21,700
Bell Atlantic Corp. 1,220 $ 77,775
Bellsouth Corp. 2,040 $ 85,680
GTE Corp. 970 $ 43,408
Total Common Stocks-88.15% (Cost $1,795,169) $1,963,066
Other Assets Less Liabilities 264,212
Net Assets-Equivalent to $19.03 per share
on 117,021 shares of capital stock outstanding $2,227,278
</TABLE>
*non-income producing
The accompanying notes are an integral
part of the financial statements.
<PAGE>
AMERISTOCK MUTUAL FUND
STATEMENT OF ASSETS & LIABILITIES
JUNE 30, 1996
Assets:
Investment Securities at Market Value
(Identified Cost - $1,795,169) $1,963,066
Cash 259,844
Receivables - Dividends and Interest 4,368
Total Assets $2,227,278
Liabilities: 0
Net Assets $2,227,278
Net Assets Consist of:
Capital Paid In $2,029,799
Undistributed Net Investment Income 24,627
Undistributed Net Capital Gain 4,955
Unrealized Appreciation in Value of
Investments Based on Identified Cost - Net 167,897
NET ASSETS FOR 117,021 SHARES OUTSTANDING $2,227,278
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING
PRICE PER SHARE ($2,227,278/117,021 SHARES) $19.03
The accompanying notes are an integral
part of the financial statements.
<PAGE>
AMERISTOCK MUTUAL FUND
STATEMENT OF OPERATIONS
AUGUST 1, 1995* TO JUNE 30, 1996
Investment Income:
Dividends $ 21,737
Interest 4,560
Total Investment Income $ 26,297
Expenses:
Management Fee 10,000
Less Waiver of Management Fee (10,000)
Total Expenses 0
Net Investment Income 26,297
Realized and Unrealized Gain on Investments
Net Realized Gain (Loss) on Investments 4,955
Net Change in Unrealized Appreciation
(Depreciation) on Investments 167,897
Net Realized and Unrealized Gain (Loss)
on Investments $172,852
Net Increase (Decrease) in Net Assets
Resulting from Operations $199,149
* Inception of Fund
The accompanying notes are an integral
part of the financial statements
<PAGE>
AMERISTOCK MUTUAL FUND
STATEMENT OF CHANGES IN NET ASSETS
AUGUST 1, 1995* TO JUNE 30, 1996
From Operations:
Net Investment Income $ 26,297
Net Realized Gain (Loss) 4,955
Net Change in Unrealized Appreciation
(Depreciation) on Investments 167,897
199,149
From Distributions to Shareholders:
Net Investment Income (1,670)
From Capital Share Transactions:
Proceeds from 132,407 Shares Issued 2,326,584
Net Asset Value of 97 Shares Issued From
Reinvestment of Dividends 1,620
Cost of 22,151 Shares Redeemed (398,405)
1,929,799
Net Increase in Net Assets $2,127,278
Net Assets at Beginning of Period 100,000
Net Assets at End of Period (including Undistributed
Net Investment Income of $24,627) $2,227,278
*Inception of Fund
The accompanying notes are an integral
part of the financial statements
<PAGE>
AMERISTOCK MUTUAL FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
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, 1996. 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.
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 calendar year, any remaining net invest-
ment income and net realized capital gains.
2.) INVESTMENT ADVISORY AGREEMENT
The Fund has entered into an investment advisory and admini-
stration agreement with Ameristock Corporation. The Invest-
ment 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. During the Fund's initial year, the
Advisor has also agreed to pay 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. For the year ended June 30, 1996 there were no fees
paid by the fund to the Advisor.
<PAGE>
AMERISTOCK MUTUAL FUND
NOTES TO FINANCIAL STATEMENTS (CONT'D)
JUNE 30, 1996
3.) RELATED PARTY TRANSACTIONS (Cont'd)
82% of the Fund's stock is controlled by FTC & Company. FTC
& Company is an unrelated company. FTC & Company can be
deemed as a controlling person.
4.) CAPITAL STOCK AND DISTRIBUTION
At June 30, 1996, 100 million shares of capital stock ($.005
par value) were authorized, and paid-in capital amounted to
$2,029,799. Transactions in common stock were as follows:
Shares sold.................................... 132,407
Shares issued to shareholders in
reinvestment of dividends..........................97
132,504
Shares redeemed................................ (22,151)
Net increase................................... 110,353
Shares Outstanding:
Beginning of period.............................6,668
End of period................................ 117,021
5.) SECURITY TRANSACTION TIMING
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.
6.) PURCHASES AND SALES OF SECURITIES
During the year ended June 30, 1996, purchases and sales of
investment securities other than U.S. Government obligations
and short-term investments aggregated $1,858,415 and $68,201
respectively.
7.) FINANCIAL INSTRUMENTS DISCLOSURE
There are no reportable financial instruments which have any
off-balance sheet risk as of June 30, 1996.
8.) SECURITY TRANSACTIONS
For Federal income tax purposes, the cost of investments owned
at June 30, 1996 was the same as identified cost.
At June 30, 1996, 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)
$174,112 $(6,215) $167,897
