SEMI-ANNUAL REPORT
December 31, 1996
MESSAGE TO AMERISTOCK MUTUAL FUND SHAREHOLDERS:
It has been an exceptional 12 months for the Ameristock Fund.
During this period we have achieved a number of milestones in the
portfolio's performance, asset size, distribution network, and technological
capabilities.
PERFORMANCE
For the year ended December 31, 1996 Ameristocks total return was 27.42%
vs. 22.96% for the S&P500!. The two leading mutual fund tracking services,
Lipper Analytical Services and Moringstar have ranked Ameristock the second
best performing Equity Income Fund for the year ending August 1996 and the
fifth best Growth & Income Fund for the year ending September 1996
respectively. The fund achieved its results strictly through the
appreciation of the underlying stocks in the portfolio. No tricks
(market timiing) or gimmicks (derivatives) were used to enhance the return.
When we started out, it was not our intention to be the top rated fund.
Finishing in the top 10 of all equity-income funds for our first full year
is an exciting accomplishment. We do not anticipate such a finish again.
But we will welcome it if it does occur next year. It is our belief is
that investors are better served with consistent performance year after year
rather than volatile performance or taking on additional risk.
ASSET SIZE
At the end of 1996 the Fund's total assets under management were closing in
on $5 million, consisting of stock in 41 different companies. It is
important for assets to grow because: a) it helps to diversify the
portfolio, b) we can implement strategies to better protect our stock
positions, c) we can gain economies of scale, and d) we can add services
for you. By the year 2000 our goal for the portfolio is $20 million in
assets under management.
DISTRIBUTION NETWORK
Investors who want to own the Ameristock Mutual Fund have a number of ways
to do so. The first method is direct, by mailing the application to us.
Another is through the so called "Supermarkets". Our fund can be bought
through Jack White, Accutrade, or investment firms who clear their trades
through Pershing, DATALynx, or Fidelity's National Financial. It is our
intent that you be able to buy the Ameristock Mutual Fund however and
whenever you want to.
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TECHNOLOGY
Check out our Web page at http://www.ameristock.com. We are one of just a
handful of mutual fund companies taking advantage of the Internet. You can
look up our net asset value on a daily basis from the Fund's day one. You
can view our holdings as of the latest quarter and every quarter since the
Fund's inception, and you can view, download or order a prospectus. Soon,
you will be able to look up your account balance 24 hours a day, 7 days a
week. Eventually, you will be able to place buy and sell orders through the
internet, receive your order confirmation via e-mail and your "check"
via ACH direct deposit to your bank account within three days.
All of this should be implemented in 1997, once we have switched our
custodian bank from Union Bank of California to Fifth Third Bank of
Cincinnati. Fifth Third Bank is a leading $19 billion assets Midwest
regional bank that promises to offer the Fund exceptional service and
reduced cost.
ECONOMIC OUTLOOK
As we head into 1997, the unprecedented highs in the stock market set in
1996 will probably not be repeated. Sometime early in 1997 we anticipate
a pullback in the market by as much as 15 percent but rebounding by the
end of the year. Barring any unusual occurrences, we foresee a continuum
of low inflation, steady interest rates, and stable prices. We agree with
the Federal Reserve that control over inflation is the number one priority.
Thus, companies whose earnings are strong should be well rewarded in the
comming year.
FINAL NOTE
Our goal from the outset is (and continues to be) to outperform our
competition and consistently rank in the top half of our competition.
We hope to do this through a consistent philosophy (using a value approach
to investing) and consistent execution (keeping turnover to a minimum which
in turn leads to lower brokerage commissions and lower realized capital gains).
Thank you for investing in the Ameristock Mutual Fund, have a fun new year
and please tell your friends about us!
- -Andrew Ngim, Director
December 12, 1996
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AMERISTOCK MUTUAL FUND
SCHEDULE OF INVESTMENTS
Unaudited
December 31, 1996
Industry Name Shares Market Value
Automotive- 10.9% Chrysler 4,900 $161,700
Ford Motor Co. 5,310 $169,920
General Motors 3,420 $190,665
Broadcast & Entertainment- 0.6%
Disney Co. (Walt) 390 $27,203
Capital Goods- 1.8%
Boeing Co. 180 $19,170
General Electric 700 $69,388
Chemicals & Fertilizer- 7.7%
Dow Chemical 2,260 $177,128
Du Pont de Nemours 2,050 $192,956
Consumer Staples- 12.2%
Coca- Cola Co. 1,380 $72,623
Eastman Kodak Co. 2,310 $185,378
McDonalds Corp. 400 $18,150
Pepsico 560 $16,450
Philip Morris 1,970 $222,610
Proctor & Gamble Co. 650 $69,956
Diversified- 0.4% Minnesota Mining & Mfg 260 $21,580
Electronics- 10.4 Hewlett Packard Co. 1,100 $55,275
Intel Corp. 1,920 $251,400
IBM 1,250 $189,375
Lucent 113 $5,226
Financial Services- 16.4%
American Intl Group 160 $17,320
Bankamerica Corp. 2,070 $206,483
Citicorp. 2,050 $211,150
Federal Natl. Mtge. 5,070 $190,759
Travelers Group 3,600 $163,350
Healthcare (Products)- 9.2%
Abbott Labs 3,880 $196,910
American Home Pro 1,200 $70,350
Bristol Myers Squibb 360 $39,150
Johnson & Johnson 540 $26,865
Merck & Co. 1,020 $81,090
Pfizer Inc. 330 $27,390
Oil & Gas- 2.6% Amoco Corp. 350 $28,219
Chevron 400 $26,000
Exxon 700 $68,600
Retailing- 1.7% Home Depot Inc. 410 $20,551
Wal-Mart Stores 2,650 $60,288
Software- 1.9% Microsoft Corp.* 1,120 $92,540
Telecommunications- 13.5%
Ameritech Corp. 3,010 $182,481
AT& T Corp. 350 $15,181
Bell Atlantic Corp. 2,720 $176,120
Bellsouth Corp. 1,850 $74,694
GTE Corp. 4,370 $198,289
Total Common Stocks- 89.3% (Cost $3,722,585) $4,289,930
Other Assets Less Liabilities $516,352
Net Assets- Equivalent to $21.18 per share on 226,898 $4,806,282
shares of capital stock outstanding
* non-income producing
The accompanying notes are an integral part of the financial statements.
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AMERISTOCK MUTUAL FUND
STATEMENT OF ASSETS & LIABILITIES
Unaudited
December 31, 1996
Assets:
Investment Securities at Market Value
(Identified Cost - $3,722,585) $4,289,930
Cash 477,614
Receivables - Dividends and Interest 11,529
Receivables - Investors Purchase Shares 39,000
Total Assets 4,818,073
Liabilities:
Payables- Investors Redeem Shares 11,790
Net Assets 4,806,282
Net Assets Consist of:
Capital Paid In 4,238,937
Undistributed Net Investment Income -
Undistributed Net Capital Gain -
Unrealized Appreciation in Value of
Investments Based on Identified
Cost- Net 567,345
NET ASSETS FOR 226,898 SHARES OUTSTANDING 4,806,282
NET ASSET VALUE, REDEMPTION PRICE, AND OFFERING
PRICE PER SHARE ($4,806,282/226,898 SHARES) $21.18
The accompanying notes are an integral part of the financial statements.
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AMERISTOCK MUTUAL FUND
STATEMENT OF OPERATIONS
Unaudited
JUNE 30, 1996 to DECEMBER 31, 1996
Investment Income:
Dividends $33,955
Interest 6,638
Total Investment Income 40,593
Expenses:
Management Fee 14,355
Less Waiver of Management Fee (14,355)
Total Expenses -
Net Investment Income 40,593
Realized and Unrealized Gain on Investments
Net Realized Gain (Loss) on Investments (4,074)
Net Change in Unrealized Appreciation
(Depreciation) on Investments 399,448
Net Realized and Unrealized Gain (Loss)
on Investments 395,374
Net Increase (Decrease) in Net Assets
Resulting from Operations 435,967
The accompanying notes are an integral part of the financial statements.
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AMERISTOCK MUTUAL FUND
STATEMENT OF CHANGES IN NET ASSETS
Unaudited
JUNE 30, 1996 to DECEMBER 31, 1996
From Operations:
Net Investment Income $40,593
Net Realized Gain (Loss) (4,074)
Net Change in Unrealized Appreciation
(Depreciation) on Investments 395,374
431,893
From Distributions to Shareholders:
Net Investment Income (40,593)
From Capital Share Transactions:
Proceeds from 174,339 Shares Issued 3,477,581
Cost of 64,461 Shares Redeemed (1,289,876)
2,187,705
Net Increase in Net Assets 2,579,004
Net Assets at Beginning of Period 2,227,278
Net Assets at End of Period 4,806,282
The accompanying notes are an integral part of the financial statements.
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AMERISTOCK MUTUAL FUND
FINANCIAL HIGHLIGHTS
Unaudited
JUNE 30, 1996 to DECEMBER 31, 1996
Selected Date For a Share of Common Stock Outstanding Throughout the Period
Net Asset Value at Beginning of Period $19.03
Net Investment Income 0.23
Net Gains (losses) on Securities-
Realized and Unrealized 2.10
Total From Investment Operations 21.36
Dividend Distribution- Net Investment Income (0.18)
Net Asset Value at End of Period 21.18
Total Return (1) 24.5%
Ratios/Supplemental Data
Net Assets End of Period (thousands) 4,806
Ratio of Expenses to Average Net Assets (2) 0%
Ratio of Net Income to Average Net Assets (1) 2.3%
Portfolio Turnover Rate (1) 4.2%
Average Commission Paid Per Share $0.0304
(1) Annualized
(2) Ratio Without Management Fee Waiver 0.4%
The accompanying notes are an integral part of the financial statements.
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AMERISTOCK MUTUAL FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. ORGANIZATION
The Ameristock Mutual Fund, Inc. (The "Fund") was incorporated on
June 15, 1995 and is registered as an open-end, management investment
company under the Investment Company Act of 1940 (the "1940 Act").
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
A) Investment Valuation- Securities traded over-the-counter or on a
national securities exchange are valued on the basis of market value in
their principal and most representative market. Securities where the
principal and most representative market is a national securities exchange
are valued at the latest reported sale reported for the valuation date,
then such securities are valued at the latest reported bid price on such
exchange. Any securities for which market quotations are not readily
available are valued in good faith by the Board of Directors.
B) Federal Income Tax- No provision for federal income tax has been made
since the Fund has complied to date with the provisions of the Internal
Revenue Code available to regulated investment companies and intends to
continue to so comply in future years.
C) Distributions to Shareholders- Dividends from net investment income are
declared and paid semiannually in June and December. Distributions of net
realized capital gains, if any, will be declared at least annually.
Distributions are recorded on the ex-dividend date.
D) Other- Investment transactions are accounted for on the trade date.
The Fund determines the gain and loss realized from the investment
transactions by comparing the original cost of the security lot sold with
the net sale proceeds. Dividend income is recognized on an accrual basis.
3. INVESTMENT ADVISORY AGREEMENT
The Fund has an agreement with the Ameristock Corporation, with whom certain
officers and directors of the Fund are affiliated, to furnish investment
advisory services to the Fund. Under the terms of the agreement, the Fund
will pay Ameristock Corporation a monthly fee at an annual rate of 1.00% on
average daily net assets. The Fund's investment advisor has voluntarily
agreed to waive the management fee until January 1, 1997.
4. RELATED PARTY TRANSACTIONS
Certain owners of the Ameristock Corporation are also owners and/or directors
of the Ameristock Mutual Fund. These individuals may receive benefits from
any management fees paid to the Advisor. For the year ended December 31,
1996, there were no fees paid by the Fund to the Advisor. 60.8% of the
Fund's stock is controlled by FTC & Company. FTC & Company is an unrelated
company and can be deemed as a controlling person.
5. PURCHASES AND SALES OF SECURITIES
For the six months ended December 31, 1996, the cost of purchases and the
proceeds from securities, excluding short-term securities, were $2,003,161
and $71,495 respectively.
Investment Advisor: Ameristock Corporation, San Francisco, California
Custodian: Union Bank of California, San Francisco, California
Transfer Agent: Ameristock Corporation, San Francisco, California
Legal Council: Wyatt, Gerber, Burke & Badie, New York, New York
Independent Auditor: McCurdy & Associates CPA's, Inc., Westlake, Ohio
This report is submitted for the general information of the shareholders of
the Ameristock Mutual Fund. It is not authorized for distribution to
prospective investors unless preceded or accompanied by a current prospectus.
