<PAGE>
December, 2000
Dear Shareholder:
We are pleased to submit to you our report for the year ended October 31,
2000.
From the beginning of the year, REITs have continued to perform very well,
particularly while NASDAQ and some Dow Jones stocks suffered steep declines.
"Spirit" management will continue to concentrate on paying a high dividend
yield. We believe that REITs will provide a good antidote to NASDAQ market
volatility and will continue to pay high dividends.
We also believe that REITs should continue to show strong earnings and funds
from operations growth through the remainder of this year. Fundamental
supply/demand factors remain strong, and there is little indication that there
will be a severe over-building in any one sector to reduce demand. However,
since REITs invest in real properties, their value could be negatively af-
fected due to environmental, economic, interest rate fluctuations or other
factors, which might hurt the performance of real estate.
We believe that there will be a continuing appreciation in REIT prices and
that this is an excellent time to invest in this sector of the economy.
Sincerely,
/s/ David Lerner
David Lerner
President
<PAGE>
Spirit of America Investment Fund, Inc.
Schedule of Investments October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Market Value
COMMON STOCKS -- 95.79% ------ ------------
<S> <C> <C>
Apartments (REITS) -- 16.22%
Amli Residential Properties Trust........................... 8,300 $ 191,938
Associated Estates Realty Corporation....................... 42,500 340,000
Camden Property Trust....................................... 8,500 243,313
Cornerstone Realty Income Trust, Inc. ...................... 5,000 52,500
Equity Residential Properties Trust......................... 4,300 202,369
Gables Residential Trust.................................... 12,000 306,000
Home Properties of New York, Inc. .......................... 3,300 89,719
Mid-America Apartment Communities, Inc. .................... 14,500 319,000
Summit Properties, Inc. .................................... 18,500 444,000
-----------
2,188,839
-----------
Diversified (REITS) -- 10.85%
BRE Properties, Inc., Cl A.................................. 6,300 199,238
Colonial Properties Trust................................... 8,000 196,500
Crescent Real Estate Equities Company....................... 17,300 348,163
Duke-Weeks Realty Corporation............................... 4,000 94,750
Essex Property Trust, Inc. ................................. 4,000 208,000
Frontline Cap Group*........................................ 640 9,120
Glenborough Realty Trust, Inc. ............................. 20,000 321,250
Hospitality Properties Trust................................ 4,000 86,250
Vornado Operating, Inc.*.................................... 250 1,125
-----------
1,464,396
-----------
Healthcare (REITS) -- 14.81%
Health Care Property Investors, Inc. ....................... 17,800 522,875
Healthcare Realty Trust, Inc. .............................. 12,500 249,219
Health Care REIT, Inc. ..................................... 24,300 429,806
HRPT Properties Trust....................................... 41,300 265,869
LTC Healthcare, Inc.*....................................... 400 225
LTC Properties, Inc. ....................................... 11,000 38,500
National Health Investors, Inc. ............................ 15,000 93,750
Nationwide Health Properties, Inc. ......................... 21,500 321,156
OMEGA Healthcare Investors, Inc. ........................... 9,000 51,750
Senior Housing Properties Trust............................. 2,700 25,144
-----------
1,998,294
-----------
Industrial (REITS) -- 7.26%
Bedford Property Investors, Inc. ........................... 13,000 255,937
Brandywine Realty Trust..................................... 16,000 306,000
First Industrial Realty Trust, Inc. ........................ 900 27,787
ProLogis Trust.............................................. 4,600 96,600
Spieker Properties, Inc. ................................... 5,300 293,487
-----------
979,811
-----------
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
Spirit of America Investment Fund, Inc.
Schedule of Investments October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Market Value
COMMON STOCKS -- continued ------ ------------
<S> <C> <C>
Internet Content -- 0.01%
VelocityHSI, Inc.* ......................................... 1,260 $ 1,339
-----------
Net Lease (REITS) -- 5.91%
Commercial Net Lease Realty................................. 38,000 384,750
Franchise Finance Corporation of America.................... 4,000 81,250
Lexington Corporate Properties Trust........................ 29,100 325,556
RFS Hotel Investors, Inc. .................................. 500 6,438
-----------
797,994
-----------
Office Space (REITS) -- 5.96%
Corporate Office Properties Trust........................... 13,000 126,750
iStar Financial, Inc. ...................................... 10,000 200,000
Kilroy Realty Corporation................................... 5,000 130,312
Mack-Cali Realty Corporation................................ 8,600 233,275
Prentiss Properties Trust................................... 4,500 114,187
-----------
804,524
-----------
Regional Malls (REITS) -- 13.05%
CBL & Associates Properties, Inc. .......................... 4,000 92,500
Crown American Realty Trust................................. 6,000 34,125
Glimcher Realty Trust....................................... 30,000 390,000
Macerich Company, The....................................... 4,000 78,500
Mills Corporation........................................... 22,300 380,494
Simon Property Group, Inc. ................................. 6,000 133,875
Taubman Centers, Inc. ...................................... 2,000 21,875
United Dominion Realty Trust, Inc. ......................... 32,000 336,000
Westfield America, Inc. .................................... 21,000 294,000
-----------
1,761,369
-----------
Shopping Centers (REITS) -- 17.93%
Burnham Pacific Properties, Inc. ........................... 11,000 59,812
Center Trust, Inc. ......................................... 30,000 176,250
Excel Legacy Corporation*................................... 3,300 8,044
Federal Realty Investment Trust............................. 4,300 82,775
First Washington Realty Trust, Inc. ........................ 8,000 202,000
IRT Property Company........................................ 35,000 286,562
JDN Realty Corporation...................................... 6,000 65,625
JP Realty, Inc. ............................................ 9,500 152,000
Malan Realty Investors, Inc. ............................... 5,000 60,313
New Plan Excel Realty Trust................................. 24,660 303,626
Pan Pacific Retail Properties, Inc. ........................ 7,000 143,062
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
Spirit of America Investment Fund, Inc.
Schedule of Investments October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Market Value
COMMON STOCKS -- continued ------ ------------
<S> <C> <C>
Shopping Centers (REITS) -- continued
Realty Income Corporation................................... 14,000 $ 322,000
Saul Centers, Inc. ......................................... 27,000 413,437
Urban Shopping Centers, Inc. ............................... 3,000 143,813
-----------
2,419,319
-----------
Storage (REITS) -- 3.79%
Shurgard Storage Centers, Inc., Cl A........................ 4,000 90,750
Sovran Self Storage, Inc. .................................. 14,000 264,250
Storage USA, Inc. .......................................... 5,600 156,450
-----------
511,450
-----------
Total Investments -- 95.79%
(Cost $14,780,021**)........................................ 12,927,335
Cash and Other Assets Net of Liabilities--4.21%............. 568,275
-----------
NET ASSETS -- 100.00%....................................... $13,495,610
===========
</TABLE>
* Non-income producing security
** Cost for Federal income tax purposes is $14,780,021 and net unrealized de-
preciation consists of:
<TABLE>
<S> <C>
Gross unrealized appreciation................ 471,263
Gross unrealized depreciation................ (2,323,949)
----------
Net unrealized depreciation.................. (1,852,686)
==========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
Spirit of America Investment Fund, Inc.
Statement of Assets and Liabilities October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments in securities at value (cost $14,780,021) (Note 1)... $12,927,335
Cash............................................................. 409,961
Receivables:
Dividends and interest.......................................... 101,995
Capital stock sold.............................................. 180,902
Deferred organization costs (Note 1)............................. 54,745
-----------
TOTAL ASSETS.................................................. 13,674,938
-----------
LIABILITIES
Payables:
Capital stock redeemed.......................................... 2,518
Distributions to shareholders................................... 760
Accrued expenses................................................. 50,240
Accrued distribution expense (Note 3)............................ 4,827
Due to Advisor................................................... 120,983
-----------
TOTAL LIABILITIES............................................. 179,328
-----------
NET ASSETS........................................................ $13,495,610
===========
Class A Shares
Net assets applicable to 1,476,401 outstanding $0.001 par value
shares
(500,000,000 authorized shares)................................. $10,935,680
===========
Net asset value and redemption price per Class A Share
($10,935,680 / 1,476,401 shares)................................ $ 7.41
===========
Offering price per share ($7.41 / 0.9475)........................ $ 7.82
===========
Class B Shares
Net assets applicable to 340,102 outstanding $0.001 par value
shares
(500,000,000 authorized shares)................................. $ 2,559,930
===========
Net asset value and offering price per Class B Share ($2,559,930
/ 340,102 shares)............................................... $ 7.53
===========
Redemption price per share ($7.53 x 0.9425)...................... $ 7.09
===========
SOURCE OF NET ASSETS
At October 31, 2000, net assets consisted of:
Paid-in capital................................................. $16,111,143
Accumulated net realized loss on investments.................... (762,847)
Net unrealized depreciation on investments...................... (1,852,686)
-----------
NET ASSETS.................................................... $13,495,610
===========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
Spirit of America Investment Fund, Inc.
Statement of Operations For the Year Ended October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends............................................................ $ 931,693
Interest............................................................. 11,805
---------
TOTAL INVESTMENT INCOME............................................. 943,498
---------
EXPENSES
Investment advisory fees (Note 3).................................... 115,841
Transfer agent fees.................................................. 98,947
Administration fees.................................................. 66,973
Distribution fees -- Class A (Note 3)................................ 28,983
Distribution fees -- Class B (Note 3)................................ 22,813
Accounting fees...................................................... 34,964
Registration fees.................................................... 7,316
Legal fees........................................................... 453
Custodian fees....................................................... 14,056
Printing expense..................................................... 10,931
Amortization of organization costs (Note 1).......................... 24,479
Auditing fees........................................................ 10,358
Directors' fees...................................................... 6,908
Insurance expense.................................................... 15,022
Miscellaneous expense................................................ 911
---------
TOTAL EXPENSES...................................................... 458,955
Expenses waived and reimbursed by Advisor (Note 3).................. (209,218)
---------
NET EXPENSES........................................................ 249,737
---------
NET INVESTMENT INCOME............................................... 693,761
---------
REALIZED AND UNREALIZED GAIN / (LOSS) ON INVESTMENTS
Net realized loss from security transactions......................... (703,646)
Net change in unrealized appreciation of investments................. 708,719
---------
Net realized and unrealized loss on investments.................... (1,125)
---------
Net increase in net assets resulting from operations............... $ 698,834
=========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
Spirit of America Investment Fund, Inc.
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year For the Year
Ended Ended
October 31, 2000 October 31, 1999
---------------- ----------------
<S> <C> <C>
OPERATIONS
Net investment income........................ $ 693,761 $ 662,964
Net realized loss from security
transactions................................ (703,646) (59,201)
Net change in unrealized
appreciation/(depreciation) of investments.. 708,719 (1,794,011)
----------- -----------
Net increase/(decrease) in net assets
resulting from operations.................. 698,834 (1,190,248)
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income:
Class A..................................... (576,646) (656,695)
Class B..................................... (123,313) (87,806)
----------- -----------
Total distributions from net investment
income to shareholders..................... (699,959) (744,501)
----------- -----------
Return of capital:
Class A..................................... (283,889) (180,173)
Class B..................................... (42,485) (42,239)
----------- -----------
Total distributions from net return of
capital to shareholders.................... (326,374) (222,412)
----------- -----------
Total distributions to shareholders.......... (1,026,333) (966,913)
----------- -----------
CAPITAL SHARE TRANSACTIONS (Dollar Activity)
Shares sold:
Class A..................................... 4,326,530 9,272,657
Class B..................................... 1,006,684 2,718,024
Shares issued as reinvestment of
distributions:
Class A..................................... 609,497 711,072
Class B..................................... 123,820 111,087
Shares redeemed:
Class A..................................... (4,954,248) (4,271,790)
Class B..................................... (1,158,804) (473,899)
----------- -----------
Increase/(decrease) in net assets derived
from capital share transactions (a)......... (46,521) 8,067,151
----------- -----------
Total increase/(decrease) in net assets..... (374,020) 5,909,990
NET ASSETS
Beginning of year............................ 13,869,630 7,959,640
----------- -----------
End of year.................................. $13,495,610 $13,869,630
=========== ===========
(a) Transactions in capital stock were:
Shares sold:
Class A..................................... 571,898 1,096,190
Class B..................................... 131,788 320,212
Shares issued as reinvestment of dividends:
Class A..................................... 87,198 85,884
Class B..................................... 16,120 13,712
Shares redeemed:
Class A..................................... (684,140) (522,692)
Class B..................................... (159,793) (59,402)
----------- -----------
Increase/(decrease) in shares outstanding... (36,929) 933,904
=========== ===========
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
Class A Class A Class A
------------ ------------ --------------
For the Year For the Year For the Period
Ended Ended Ended
October 31, October 31, October 31,
2000 1999 1998*
------------ ------------ --------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period.......................... $ 7.48 $ 8.66 $10.00
------- ------- ------
Income from Investment
Operations:
Net investment income........... 0.45 0.49 0.20
Net realized and unrealized
gain/(loss) on investments..... 0.15 (1.02) (1.38)
------- ------- ------
Total from investment
operations................... 0.60 (0.53) (1.18)
------- ------- ------
Less Distributions:
Distributions from net
investment income.............. (0.45) (0.53) (0.16)
Distributions from return of
capital........................ (0.22) (0.12) 0.00
------- ------- ------
Total distributions........... (0.67) (0.65) (0.16)
------- ------- ------
Net Asset Value, End of Period... $ 7.41 $ 7.48 $ 8.66
======= ======= ======
Total Return..................... 8.33 %/2/ (6.38)%/2/ (11.78)%/1/
Ratios/Supplemental Data
Net assets, end of period
(000).......................... $10,936 $11,225 $7,290
Ratio of expenses to average net
assets:
Before expense
reimbursement/2/ ............ 3.73 % 3.35 % 6.33 %
After expense
reimbursement/2/ ............ 1.97 % 1.97 % 1.97 %
Ratio of net investment income
(loss) to average net assets:
Before expense
reimbursement/2/ ............ 4.29 % 4.17 % (0.62)%
After expense
reimbursement/2/ ............ 6.05 % 5.55 % 3.75 %
Portfolio turnover.............. 21.55 % 8.15 % 0.00 %
</TABLE>
*Class A Shares commenced investment operations on January 9, 1998.
/1/Calculation does not reflect sales load and is not annualized.
/2/Calculation does not reflect sales load.
See accompanying notes to financial statements.
8
<PAGE>
Financial Highlights
--------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
Class B Class B Class B
------------ ------------ --------------
For the Year For the Year For the Period
Ended Ended Ended
October 31, October 31, October 31,
2000 1999 1998*
------------ ------------ --------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period........................... $ 7.51 $ 8.64 $9.62
------ ------ -----
Income from Investment Operations:
Net investment income............ 0.40 0.40 0.15
Net realized and unrealized
gain/(loss) on investments...... 0.16 (0.99) (1.00)
------ ------ -----
Total from investment
operations..................... 0.56 (0.59) (0.85)
------ ------ -----
Less Distributions:
Distributions from net investment
income.......................... (0.40) (0.42) (0.13)
Distributions from return of
capital......................... (0.14) (0.12) 0.00
------ ------ -----
Total distributions............. (0.54) (0.54) (0.13)
------ ------ -----
Net Asset Value, End of Period.... $ 7.53 $ 7.51 $8.64
====== ====== =====
Total Return...................... 7.72 %/2/ (7.09)%/2/ (8.84)%/1/
Ratios/Supplemental Data
Net assets, end of period (000).. $2,560 $2,645 $ 669
Ratio of expenses to average net
assets:
Before expense
reimbursement/2/ .............. 4.43 % 4.05 % 7.03 %
After expense
reimbursement/2/ .............. 2.67 % 2.67 % 2.67 %
Ratio of net investment income
(loss) to average net assets:
Before expense
reimbursement/2/ .............. 3.59 % 3.47 % (1.32)%
After expense
reimbursement/2/ .............. 5.35 % 4.85 % 3.05 %
Portfolio turnover............... 21.55 % 8.15 % 0.00 %
</TABLE>
*Class B Shares commenced investment operations on March 6, 1998.
/1/Calculation does not reflect CDSC charges and is not annualized.
/2/Calculation does not reflect CDSC charges.
See accompanying notes to financial statements.
9
<PAGE>
Spirit of America Investment Fund, Inc.
Notes to Financial Statements October 31, 2000
-------------------------------------------------------------------------------
Note 1 -- Significant Accounting Policies
Spirit of America Investment Fund, Inc., (the "Fund"), is an open-end diversi-
fied mutual fund registered under the Investment Company Act of 1940 (the
"1940 Act"), as amended. The Fund was incorporated under the laws of Maryland
on May 15, 1997 and commenced operations on January 9, 1998. The authorized
capital stock of the Fund is one billion (1,000,000,000) shares, par value of
$0.001 per share. The Fund seeks growth of capital and current income by in-
vesting in the equity securities of companies in the real estate industry. The
Fund currently offers two classes of shares, Class A Shares and Class B
Shares. Each class of shares is sold pursuant to different sales arrangements
and bears different expenses.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The poli-
cies are in conformity with generally accepted accounting principles for in-
vestment companies.
A. Security Valuation: The offering price and net asset value per share of
Class A and the net asset value per share of Class B are calculated as of the
close of regular trading on the NYSE, currently 4:00 p.m., Eastern Time. The
Fund's securities are valued at the last reported sales price on the principal
exchange on which the security trades, or if no sales price is reported, the
mean of the latest bid and asked prices is used. Securities traded over-the-
counter are priced at the mean of the latest bid and asked prices. Short-term
investments having a maturity of 60 days or less are valued at amortized cost,
which the Board of Directors believes represents fair value.
B. Investment Income and Securities Transactions: Security transactions are
accounted for on the date the securities are purchased or sold (trade date).
Cost is determined and gains and losses are based on the identified cost basis
for both financial statement and federal income tax purposes. Dividend income
and distributions to shareholders are reported on the ex-dividend date. Inter-
est income and expenses are accrued daily.
C. Net Asset Value Per Share: The methodology and procedures for determining
net asset value are identical for each Class, but due to the specific distri-
bution expenses and other costs allocable to each Class, the net asset value
of each Class will vary. Class A Shares are purchased at the offering price
per share, while Class B shares are purchased at the net asset value per
share.
D. Organization Costs: Organization costs are being amortized on a straight-
line basis over five years from commencement of operation.
E. Federal Income Taxes: The Fund intends to comply with all requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders. There-
fore, no federal income tax provision is required.
F. Use of Estimates: In preparing financial statements in conformity with gen-
erally accepted accounting principles, management makes estimates and assump-
tions that affect the reported amounts of assets and liabilities at the date
of the financial statements, as well as the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
G. Distributions to Shareholders: The Fund intends to distribute substantially
all of its net investment income and capital gains to shareholders each year.
The Fund will distribute the return of capital it receives from the REITs in
which the Fund invests. The REITs pay distributions based on cash flow, with-
out regard to depreciation and amortization. As a result, a portion of the
distributions paid to the Fund and subsequently distributed to shareholders is
a return of capital.
10
<PAGE>
Spirit of America Investment Fund, Inc.
Notes to Financial Statements -- continued October 31, 2000
-------------------------------------------------------------------------------
Note 2 -- Purchases and Sales of Securities
Purchases and sales of securities, other than short-term investments,
aggregated $2,545,184 and $2,954,296, respectively, for the year ended October
31, 2000.
Note 3 -- Investment Management Fee and Other Transactions with Affiliates
Spirit of America Management Corp. ("Spirit Management"), has been retained to
act as the Fund's manager and investment adviser pursuant to an Investment
Advisory Agreement (the "Advisory Agreement"). Spirit Management was
incorporated in 1997 and is a registered investment adviser under the
Investment Advisers Act of 1940, as amended. Under the Advisory Agreement, the
Fund pays Spirit Management a fee at the annual rate of 0.97% of the Fund's
average daily net assets. Spirit Management has voluntarily agreed to waive
all or a portion of its fees and to reimburse expenses so that the total
operating expenses of Class A Shares and Class B Shares will not exceed 1.97%
and 2.67%, respectively, of the average daily net assets of each Class. For
the year ended October 31, 2000, advisory fees of $115,841 were waived by
Spirit Management, and Spirit Management also reimbursed the Fund $93,377.
The Fund has adopted two plans of distribution ("Class A Plan" and "Class B
Plan") pursuant to Rule 12b-1. Each Plan permits the Fund to pay SSH
Securities, Inc., the Fund's principal distributor, a monthly fee from the
assets of the respective Class. Under the Class A Plan, the Fund will pay fees
of up to 0.30% of the average daily net assets, and under the Class B Plan,
the Fund will pay a combined annual distribution and service fee of up to
1.00% of the average daily net assets. Class A shares are subject to initial
sales charges imposed at the time of purchase, in accordance with the Funds
current prospectus. For the year ended October 31, 2000, sales charges
received by SSH Securities, Inc. were $11,649. Certain redemptions of Class B
shares made within six years of purchase are subject to a contingent deferred
sales charge ("CDSC"), in accordance with the Funds current prospectus. For
the year ended October 31, 2000, CDSCs were collected in the amount of
$59,302.
Certain officers and directors of the Fund are "affiliated persons" of the
adviser or distributor, as that term is defined in the 1940 Act. There are no
directors' fees paid to affiliated directors of the Fund. All officers serve
without direct compensation from the Fund. In addition, David Lerner
Associates, Inc. received brokerage commissions of $17,905 for the year ended
October 31, 2000.
Note 4 -- Federal Income Taxes
At October 31, 2000, the Fund had available for federal tax purposes an unused
capital loss carryforward of $762,847, of which $59,201 expires in 2007 and
$703,646 expires in 2008. Capital loss carryforwards are available to offset
future realized capital gains. To the extent that these carryforwards are used
to offset future capital gains, it is probable that the amount which is offset
will not be distributed to shareholders.
11
<PAGE>
Spirit of America Investment Fund, Inc.
Report of Independent Certified Public Accountants October 31, 2000
-------------------------------------------------------------------------------
To the Shareholders of
Spirit of America Investment Fund
and the Board of Trustees of
Spirit of America Investment Fund, Inc.
We have audited the accompanying statement of assets and liabilities of Spirit
of America Investment Fund, including the schedule of investments, as of
October 31, 2000, and the related statements of operations, the statement of
changes in net assets, and the financial highlights for each of the periods
presented herein. 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 securities
owned as of October 31, 2000, 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
Spirit of America Investment Fund as of October 31, 2000, the results of its
operations, the changes in its net assets, and the financial highlights for
each of the periods presented herein, in conformity with generally accepted
accounting principles.
/s/Tait, Weller & Baker
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
November 28, 2000
12
<PAGE>
Spirit of America Investment Fund -- Class A
Illustration of $10,000 Investment
-------------------------------------------------------------------------------
The graph below compares the increase in value of a $10,000 investment in the
Spirit of America Investment Fund -- Class A with the performance of the Mor-
gan Stanley REIT Index. The values and returns for Spirit of America Invest-
ment Fund -- Class A include reinvested dividends, and the impact of the maxi-
mum sales charge placed on purchases.
[CHART OF SPIRIT OF AMERICA INVESTMENT FUND-CLASS A]
--------------------------------------------
Total Return for the period ending 10/31/99:
Since Inception.............(12.68%)*
1 Year......................(11.30%)
--------------------------------------------
Label A B
-----------------------------------------------------------
Label Spirit of America Morgan Stanley
-----------------------------------------------------------
1 1/9/98 9475 10000
-----------------------------------------------------------
2 1/31/98 9428 9857
-----------------------------------------------------------
3 4/30/98 9105 9646
-----------------------------------------------------------
4 7/31/98 8587 9299
-----------------------------------------------------------
5 10/31/98 8359 9811
-----------------------------------------------------------
6 1/31/99 8115 9731
-----------------------------------------------------------
7 4/30/99 8549 10967
-----------------------------------------------------------
8 7/31/99 8484 9685
-----------------------------------------------------------
9 10/31/99 7825 9772
-----------------------------------------------------------
10 1/31/00 7658 10062
-----------------------------------------------------------
11 4/30/00 8030 10672
-----------------------------------------------------------
12 7/31/00 8861 10907
-----------------------------------------------------------
13 10/31/00 8477 9525
-----------------------------------------------------------
Past performance is not indicative of future results.
* Fund commenced operations January 9, 1998.
13
<PAGE>
Spirit of America Investment Fund -- Class B
Illustrations of $10,000 Investment
-------------------------------------------------------------------------------
The graph below compares the increase in value of a $10,000 investment in the
Spirit of America Investment Fund -- Class B with the performance of the
Morgan Stanley REIT Index. The values and returns for Spirit of America
Investment Fund -- Class B include reinvested dividends, and the impact of the
contingent deferred sales charge at redemption.
[CHART OF SPIRIT OF AMERICA INVESTMENT FUND--CLASS B]
Total Return for the period ending 10/31/99:
Since Inception...............(23.21%)*
1 Year........................(12.43%)
Label A B
----------------------------------------------------------
Label Spirit of America Morgan Stanley
----------------------------------------------------------
1 1/9/98 10000 10000
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2 1/31/98 9950 9857
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3 3/6/98 9620 10051
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4 3/31/98 10020 10237
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5 4/30/98 9600 9646
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6 7/31/98 9042 9299
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7 10/31/98 8769 9811
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8 1/31/99 8500 9731
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9 4/30/99 8942 10967
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10 7/31/99 8852 9685
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11 10/31/99 8757 9772
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12 1/31/00 7967 10062
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13 4/30/00 8343 10672
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14 7/31/00 9188 10907
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15 10/31/00 8272 9525
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Past performance is not indicative of future results.
* Effective March 6, 1998, the Fund began offering Class B shares. For periods
prior to March 6, 1998, total return reflects the Class A performance,
excluding the Fund's Class A maximum initial sales charge, but including the
effect of Class A expenses, including Rule 12b-1 fees. For periods after
March 6, 1998, figures reflect actual Class B performance including the
deduction of all charges and fees applicable only to that class. Since March
6, 1998 (commencement of sales), the cumulative total return of Class B
shares was (14.51%).
14
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Investment Adviser
Spirit of America Management, Inc.
477 Jericho Turnpike
Syosset, NY 11791
Distributor
SSH Securities, Inc.
477 Jericho Turnpike
Syosset, NY 11791
Shareholder Services
PFPC, Inc.
211 South Gulph Road
King of Prussia, PA 19406
Custodian
The Bank of New York
48 Wall Street
New York, NY 10286
Auditors
Tait Weller & Baker
8 Penn Center Plaza, Suite 800
Philadelphia, PA 19103
For Additional Information about
Spirit of America Investment Fund, Inc.
Call (800) 452-4892 or (610) 239-4600
This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors in the
Fund unless preceded or accompanied by an effective Prospectus which includes
details regarding the Fund's objectives, policies, expenses and other informa-
tion.
[LOGO OF SPIRIT OF AMERICA INVESTMENT FUND APPEARS HERE]
Annual Report
October 31, 2000
