[TYPE] N-30D
[DESCRIPTION] ANNUAL REPORT MAILED
TO SHAREHOLDERS
To Our Investors
Dear Fellow Shareholder:
Our Fund has increased an average 11% for the thirty-eight year
period ending July 31, 1996. For the 5,
10 and 15 year periods, the Fund's average annual returns are 13%,
10%, and 11% respectively.
Our Fund's portfolio has been positioned to take advantage of what
we perceive to be opportunities in the
forthcoming market. A large percentage of the portfolio is now
invested in petroleum, commercial banking
and thrift industries.
This may be a good time to remind our shareholders that we manage
the Fund with two objectives in
mind... to make money and not lose the money we've made. That's the
way we have managed American
Growth Fund for over 38 years and plan to in the future.
Perhaps, all things considered, this might be an appropriate time
to consider adding to your American
Growth Fund account. Our toll free number is (800) 525-2406 or
(303) 623-6137. I invite your comments,
questions and suggestions. Please feel free to call or write to me.
Sincerely,
Robert Brody
President & Shareholder
PAGE
<PAGE>
How American Growth Fund Has Its Shareowners' Money Invested
STATEMENT OF INVESTMENTS<TABLE>
July 31, 1996<CAPTION>
Market
Description of Security
Shares Value
COMMON STOCKS
<S>
<C> <C>
Petroleum Industry 14.1%
Texaco Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 70,000 $ 5,950,000
(A major integrated international oil company.)
British Petroleum Company P.L.C. . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 45,000 4,944,375
(One of the largest integrated oil enterprises in the world.)
Repsol S.A.. . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 66,000 2,202,750
(Explores/produces oil/gas in Spain, N. Sea, Africa, Latin
America, Indonesia and the Middle East.)
Ultramar Corporation . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 80,000 2,110,000
(Leading independent refiner/marketer of petroleum products in
California and Eastern Canada.)
15,207,125
Commercial Bank Industry 11.7%
PNC Bank Corp. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 145,000 4,223,125
(The nation's thirteenth largest bank holding company.)
City National Corp.. . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 200,000 3,100,000
(Owns City National Bank, sixth largest bank in California.)
SouthTrust Corp. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 90,000 2,503,125
(The 33rd largest bank in the U.S.)
First Union Corp.. . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 28,800 1,828,800
(The nation's sixth largest bank holding company.)
Boatmen's Bancshares, Inc. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 25,000 1,000,000
(Largest bank holding company based in Missouri.)
12,655,050
Thrift Industry 8.7%
Golden West Financial Corp.. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 60,000 3,330,000
(Holding company for World S&L, third-largest thrift.)
Standard Federal Bancorp . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 80,000 3,120,000
(Holding company for Standard Federal Bank, 7th largest thrift
in the U.S.)
Washington Mutual, Inc.. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 80,000 2,905,000
(Largest thrift in Washington and the fourth largest banking
company in the nation.)
9,355,000
</TABLE>
<PAGE>
<TABLE>
Market
Description of Security
Shares Value
<S>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . <C> <C>
Aerospace/Defense Industry 5.1%
Boeing Company (The) . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 62,000 $ 5,487,000
(The leading manufacturer of commercial jet aircraft.)
Insurance Industry 3.5%
American International Group, Inc. . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 28,125 2,647,266
(Ranked fourth in the U.S. based on premiums written in
domestic property & casualty insurance.)
Equitable Companies Inc. (The) . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 50,000 1,150,000
(Parent holding company of The Equitable Life Assurance Society
of the U.S.)
3,797,266
Chemical Industry 3.5%
Union Carbide Corp.. . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 90,000 3,780,000
(Producer of ethylene glycol, polyethylene, ethylene oxide,
solvents, coatings, specialty chemicals,
surfactants.)
Retail Store Industry 2.1%
Woolworth Corp.. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 120,000 2,310,000
(One of the largest U.S.-based retail store chains.)
Financial Services Industry 1.2%
Travelers Group Inc. . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 30,000 1,267,500
(A diversified financial services company.)
Building Materials Industry 1.0%
Ameron International Inc.. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 30,000 1,050,000
(Multinational manufacturer of protective coatings for
petroleum, marine and industrial markets.)
Apparel Industry 1.0%
Jones Apparel Group Inc.*. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 20,000 1,030,000
(Designs/markets a broad range of women's sportswear, suits and
dresses.)
</TABLE>
PAGE
<PAGE>
<TABLE>
Market
Description of Security
Shares Value
<S>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . <C> <C>
Machinery Industry 0.7%
Deere & Company. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 20,000 $ 715,000
(Largest manufacturer of farm equipment in the world.)
Total Common Stocks (cost $47,213,124) . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 52.6% 56,653,941
SHORT-TERM INVESTMENT
U.S. Treasury Bill, 5.125% due 10/24/96, principal amount
$25,000,000
(amortized cost $24,701,042) . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 22.9% 24,696,500
Total Investment Securities, at Value (cost $71,914,166) . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 75.5% 81,350,441
Cash and Receivables, Less Liabilities . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 24.5% 26,401,661
Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 100.0% $107,752,102
</TABLE>
PAGE
<PAGE>
Financial Statements
<TABLE>
<CAPTION>
<S>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . .
<C>AMERICAN GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES, JULY 31, 1996
ASSETS:
Investments at value (cost $71,914,166)-see accompanying
statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . $ 81,350,441
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 8,382,693
Receivables:
Investments sold. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 17,438,447
Shares of beneficial interest sold. . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 535,327
Dividends . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 100,220
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 9,281
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 107,816,409
LIABILITIES:
Shares of beneficial interest purchased . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 64,307
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 64,307
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . $ 107,752,102
COMPOSITION OF NET ASSETS:
Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . $ 93,087,660
Undistributed net investment income . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 86,817
Accumulated net realized gain from investment transactions. . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 5,141,350
Net unrealized appreciation of investments. . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 9,436,275
Net assets. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . $ 107,752,102
NET ASSET VALUE PER SHARE:
Class A Shares:*
Net asset value and redemption price per share (based on net
assets
of $3,837,948 and 433,973 shares of beneficial interest
outstanding). . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . $ 8.84
Maximum offering price per share (net asset value plus sales
charge of
5.75% of offering price.) . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . $ 9.38
Class B Shares:
Net asset value, redemption price and offering price per
share (based
on net assets of $3,416,453 and 388,056 shares of beneficial
interest outstanding). . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . $ 8.80
Class C Shares:
Net asset value, redemption price and offering price per
share (based
on net assets of $367,296 and 41,705 shares of beneficial
interest outstanding) . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . $ 8.81
Class D Shares:*
Net asset value and redemption price and offering price per
share (based on
net assets of $100,130,405 and 11,314,711 shares of
beneficial interest outstanding). . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . $
8.85
Maximum offering price per share (net asset value plus sales
charge of 5.75% of
offering price) . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . $ 9.39
</TABLE>
PAGE
<PAGE>
<TABLE>Financial Statements
<CAPTION>
AMERICAN GROWTH FUND, INC.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED JULY 31, 1996
<S>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . <C>
INVESTMENT INCOME:
Dividends (net of $30,323 foreign withholding tax). . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . $ 1,664,695
Interest. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 256,036
Total income. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 1,920,731
EXPENSES:
Investment advisory fees (Note 5) . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 866,681
Administration expenses (Note 5). . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 415,479
Transfer agent, shareholder servicing and data processing
fees (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . 179,849
Custodian fees (Note 4) . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 91,622
Professional fees . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 56,583
Registration and filing fees:
Class A . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 120
Class B . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 90
Class C . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 3
Class D . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 21,350
Shareholder reports . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 15,112
Distribution fees:
Class A . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 1,997
Class B . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 7,040
Class C . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 324
Class D . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . -
Directors fees. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 6,500
Other expenses. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 66,510
Total expenses. . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 1,729,260
Less expenses paid indirectly (Note 4). . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . (292,244)
Net expenses. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 1,437,016
Net Investment Income. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 483,715
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments. . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 7,083,415
Net change in unrealized appreciation or depreciation on
investments. . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . (3,074,255)
Net realized and unrealized gain. . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 4,009,160
Net Increase in Net Assets Resulting From Operations . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . $ 4,492,875
</TABLE>
<PAGE> <PAGE>
<TABLE>Financial Statements
<CAPTION>
AMERICAN GROWTH FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JULY 31, 1996 AND 1995
1996 1995
<S>
<C> <C>
OPERATIONS:
Net investment income . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
483,715 $ 1,444,321
Net realized gain . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,083,415 325,639
Net change in unrealized appreciation or depreciation . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3,074,255) 9,773,542
Net increase in net assets resulting from operations. . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,492,875 11,543,502
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class D . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,387,812) (938,292)
Distributions from net realized gain:
Class D . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,312,575) (12,215,279)
BENEFICIAL INTEREST TRANSACTIONS:
Net increase in net assets resulting from beneficial
interest transactions (Note 2):
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,048,441 -
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,603,382 -
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
383,952 -
Class D . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,385,535 23,939,198
NET ASSETS:
Total increase. . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,213,798 22,329,129
Beginning of period . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
90,538,304 68,209,175
End of period (including undistributed net investment
income of $86,817 and $990,914 respectively). . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
107,752,102 $ 90,538,304
</TABLE>
PAGE
<PAGE>
Financial Highlights
Class D
<TABLE>
<CAPTION>
Year Ended July 31,
1996 1995
1994 1993 1992
<S>
<C> <C>
<C> <C> <C>
Per Share Operating Data:
Net Asset Value,
Beginning of Period. . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . $ 8.75 $ 9.34
$ 9.39 $ 8.50 $ 8.02
Income (loss) from investment operations:
Net investment income. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . .03 .21
.03 .11 .10
Net realized and unrealized gain (loss). . . . . . . . . . . . . .
. . . . . . . . . . . .39 .88
1.00 1.51 .94
Total income (loss) from investment operations . . . . . . . . . .
. . . . . . . . . . . .42 1.09
1.03 1.62 1.04
Dividends and distributions to shareholders:
Dividends from net investment income . . . . . . . . . . . . . . .
. . . . . . . . . . . (.12) (.12)
(.05) (.08) (.06)
Distributions from net realized gain . . . . . . . . . . . . . . .
. . . . . . . . . . . (.20) (1.56)
(1.03) (.65) (.50)
Total dividends and distributions
to shareholders. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . (.32) (1.68)
(1.08) (.73) (.56)
Net Asset Value, End of Period . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . $ 8.85 $ 8.75
$ 9.34 $ 9.39 $ 8.50
Total Return at Net Asset Value1<F1> . . . . . . . . . . . . . . .
. . . . . . . . . . . 4.8% 15.2%
11.1% 20.2% 13.6%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) . . . . . . . . . . . . .
. . . . . . . . . . . $100,130 $90,538
$68,209 $62,180 $55,501
Ratios to average net assets:
Net investment income (loss) . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . 0.47% 1.91%
0.35% 0.59% 1.14%
Expenses2<F2>. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . 1.63% 1.45%
1.34% 1.44% 1.46%
Portfolio Turnover Rate3<F3> . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . 163.1% 173.0%
87.2% 48.8% 39.8%
Average Brokerage Commission Rate4<F4>
$0.0561 -
- - -
<FN>
<F1>
Assumes a hypothetical initial investment on the business day
before the first day of the fiscal period (or inception of
offering) with all dividends and distributions reinvested in
additional shares on the reinvestment date and redemption
at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in total
returns. Total returns are not annualized for periods of less than
one full year.
<F2>
Beginning in fiscal 1996, the expense ratio reflects the effect of
expenses paid indirectly by the Fund. Prior year
expenses have not been adjusted.
<F3>
The lesser of purchases and sales of portfolio securities for a
period, divided by the monthly average of the market
value of securities owned during the period. Purchases and sales of
investment securities, other than U.S.
Government and short-term securities for the period ended July 31,
1996, aggregated $149,865,511 and
$180,516,815, respectively.
<F4>
Total brokerage commissions paid on applicable purchases and sales
of investment securities for the period divided
by the total number of related shares purchased and sold.
</FN>
</TABLE>
<PAGE>
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A Class B Class
C
Period Ended July 31,
19965<F5> 19965<F5>
19965<F5>
<S>
<C> <C>
<C>
Per Share Operating Data:
Net Asset Value,
Beginning of Period. . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . $ 9.21 $ 9.21
$ 9.21
Income (loss) from investment operations:
Net Investment income(loss). . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . -7 (.01)
-7
Net realized and unrealized gain (loss). . . . . . . . . . . . . .
. . . . . . . . . . . (.37) (.40)
(.40)
Total income (loss) from investment operations . . . . . . . . . .
. . . . . . . . . . . (.37) (.41)
(.40)
Dividends and distributions to shareholders:
Dividends from net investment income . . . . . . . . . . . . . . .
. . . . . . . . . . . - -
-
Distributions from net realized gain . . . . . . . . . . . . . . .
. . . . . . . . . . . - -
-
Total dividends and distributions
to shareholders. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . - -
-
Net Asset Value, End of Period . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . $ 8.84 $ 8.80
$ 8.81
Total Return at Net Asset Value1<F1> . . . . . . . . . . . . . . .
. . . . . . . . . . . (4.0)% (4.5)%
(4.3)%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) . . . . . . . . . . . . .
. . . . . . . . . . . $3,838 $3,417
$367
Ratio to average net assets:
Net investment income (loss) . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . 0.13%6 (0.52)%6
(0.63)%6
Expenses2<F2>. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . 2.06%6 2.81% 6
2.97% 6
Portfolio Turnover Rate3<F3> . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . 163.1% 163.1%
163.1%
Average Brokerage Commission Rate4<F4> . . . . . . . . . . . . . .
. . . . . . . . . . . $0.0561 $0.0561
$0.0561
<FN>
<F1>
Assumes a hypothetical initial investment on the business day
before the first day of the fiscal period (or inception of
offering) with all dividends and distributions reinvested in
additional shares on the reinvestment date and redemption
at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in total
returns. Total returns are not annualized for periods of less than
one full year.
<F2>
Beginning in fiscal 1996, the expense ratio reflects the effect of
expenses paid indirectly by the Fund. Prior year
expenses have not been adjusted.
<F3>
The lesser of purchases and sales of portfolio securities for a
period, divided by the monthly average of the market
value of securities owned during the period. Purchases and sales of
investment securities, other than U.S.
Government and short-term securities for the period ended July 31,
1996, aggregated $149,865,511 and
$180,516,815, respectively.
<F4>
Total brokerage commissions paid on applicable purchases and sales
of investment securities for the period divided
by the total number of related shares purchased and sold.
<F5>
For the period from March 1, 1996 (inception of offering) to July
31, 1996.
<F6>
Annualized.
<F7>
Less than $.005 per share.
</FN>
</TABLE>
PAGE
<PAGE>
Notes to Financial Statements
1. Summary of Significant Accounting Policies
American Growth Fund, Inc. ("Fund") is registered under the
Investment Company Act of 1940, as amended, as a diversified,
open-end management investment company. The Fund's primary
investment objective is to seek capital appreciation. The Fund
offers Class A, Class B, Class C and Class D shares. Class D
shares are available to shareholders in existence prior to
03/01/96.
Class A and Class D shares are sold with a front-end sales
charge. Class B and Class C shares may be subject to a contingent
deferred sales charge. All classes of shares have identical
rights to earnings, assets and voting privileges, except that each
class
has its own distribution and/or service plan and expenses
directly attributable to a particular class and exclusive voting
rights
with respect to matters affecting a single class. Class B
shares will automatically convert to Class A shares seven years
after
date of purchase. The following is a summary of significant
accounting policies consistently followed by the Fund.
Investment Valuation - Investment securities are valued at
the closing asked price as reported by the principal securities
exchange on which the security is traded. If no sale is
reported, or if the security is not traded on an exchange, value is
based
on the average of the latest bid and asked prices.
Short-term debt securities having a remaining maturity of 60 days
or less are
valued at amortized cost, which approximates market value.
Allocation of Income, Expenses, and Gains and Losses -
Income, expenses (other than those attributable to a specific
class) and gains and losses are allocated daily to each class
of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly
attributable to a specific class are charged against the operations
of that
class.
Federal Income Taxes - No provision for federal income or
excise taxes has been made because it is the Fund's policy to
comply with provisions of the Internal Revenue Code
applicable to regulated investment companies and to distribute all
of its
taxable income to shareholders.
Classification of Distributions to Shareholders - The
character of distributions made during the year from net investment
income or net realized gains may differ from its ultimate
characterization for federal income tax purposes.
Other - Investment transactions are accounted for on the date
the investments are purchased or sold (trade date). Dividend
income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recorded on the accrual
basis.
Realized gains and losses from investment transactions and
unrealized appreciation and depreciation of investments are
reported
on an identified cost basis which is the same basis used for
federal income tax purposes.
Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles 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 increases and
decreases
in net assets from operations during the reporting period.
Actual results could differ from those estimates.
PAGE
<PAGE>
Notes to Financial Statements
2. Shares of Beneficial Interest - The Fund has authorized an
unlimited number of no par value shares of beneficial interest
of each class. Transactions in shares of beneficial interest
were as follows:
Year Ended July 31, 19961
Year Ended July 31, 1995
<TABLE>
<CAPTION>
Shares Amount
Shares Amount
<S>
<C> <C>
<C> <C>
Class A:
Sold
437,138 $4,077,847
- $ -
Dividends and distributions reinvested
- -
- -
Redeemed
(3,165) (29,406)
- -
Net increase
433,973 4,048,441
- -
Class B:
Sold
388,712 3,609,425
- -
Dividends and distributions reinvested
- -
- -
Redeemed
(656) (6,042)
- -
Net increase
388,056 3,603,383
- -
Class C:
Sold
41,705 383,954
- -
Dividends and distributions reinvested
- -
- -
Redeemed
- (3)
- -
Net Increase
41,705 383,951
- -
Class D:
Sold
2,553,651 23,031,338
2,352,448 19,867,517
Dividends and distributions reinvested
375,550 3,300,334
1,701,369 12,454,018
Redeemed
(1,956,583) (17,946,137)
(1,017,480) (8,382,337)
Net increase
972,618 $ 8,385,535
3,036,337 $ 23,939,198
1. For the period from March 1, 1996 (inception of offering)
to July 31, 1996 for Class A, Class B and Class C shares.
</TABLE>
3. Unrealized Gains and Losses on Investments
At July 31, 1996, net unrealized appreciation on investments
of $9,436,275 was comprised of gross appreciation of $9,728,691
and gross depreciation of $292,416.
4. Fund Expenses Paid Indirectly
Fund expenses totaling $99,405 relating to certain operating
expenses were paid by broker dealers under terms of
brokerage/service arrangements. Fees for transfer agent and
data processing services and custodian services totaling $107,376
and $85,463, respectively, were offset by earnings on cash
balances maintained by the Fund at the custodian financial
institution.
The Fund could have invested the assets maintained at the
institution in income-producing assets if it had not agreed to a
reduction in fees.
5. Underwriting, Investment Advisory Contracts and Service Fees
Under the investment advisory contract with Investment
Research Corporation ("IRC"), the advisor receives annual
compensation
for investment advice, computed and paid monthly, equal to 1%
of the first $30 million of average annual net assets of the Fund
<PAGE>Notes to Financial Statements
and 0.75% of such assets above $30 million. The Fund pays
its own operating expenses. The advisor has agreed to reimburse
the Fund if total expenses exceed the most restrictive
limitation prescribed by any state in which the shares of the Fund
are sold.
Class B and Class C shares are subject to service and
distribution fees of 0.25% and 0.75% of average daily net assets,
respectively. Class A shares are subject to service and
distribution fees of 0.25% and 0.05% of average daily net assets,
respectively.
For the year ended July 31, 1996 commissions and sales
charges paid by investors on the purchase of Fund shares totalled
$1,439,562 of which $275,651 was retained by American Growth
Fund Sponsors, Inc. ("Sponsors"), an affiliated broker/dealer
which serves as the underwriter and distributor of the Fund.
Sales charges advanced to broker/dealers by Sponsors on sales
of the Fund's Class B and C shares totaled $142,171.
Certain officers of the Fund are also officers of Sponsors
and IRC. For the year ended July 31, 1996 the Fund paid directors'
fees and expenses of $6,500.
For the year ended July 31, 1996, under an agreement with
IRC, the Fund was charged $354,309 for the costs and expenses
related to employees of IRC who provided administrative,
clerical and accounting services to the Fund. In addition, the
Fund
was charged $61,170 by an affiliated company of IRC for the
cost of office space under terms of a month-to-month lease
agreement.
6. Federal Income Tax Matters
On December 22, 1995, distributions of $0.12 and $0.20
aggregating $1,387,812 and $2,312,575 were declared from net
investment income and realized gains, respectively. The
dividends were paid December 29, 1995. For the Fund's fiscal year
ended July 31, 1996, ordinary income dividends in the amount
of $1,370,412 have been determined to qualify for the dividend
received deduction for corporate shareholders.
For federal income tax purposes, the Fund realized net
capital gains of $7,083,415 during the fiscal year ended July 31,
1996.
<PAGE> <PAGE>
Independent Auditors' Report
To The Board of Directors and Shareholders
of American Growth Fund, Inc.:
We have audited the accompanying statements of investments and
assets and liabilities of American Growth Fund,
Inc. as of July 31, 1996, and the related statement of operations,
the statement of changes in net assets and the
financial highlights for the year 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 audit. The statement of changes in net
assets for the year ended July 31, 1995 and the
financial highlights for the four years then ended were audited by
other auditors whose report dated August 18, 1995
expressed an unqualified opinion on those statements.
We conducted our audit 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 July 31, 1996, by correspondence with the custodian and brokers;
and where confirmations were not received from
brokers, we performed alternative procedures. 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 audit provides 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 American Growth Fund, Inc. as
of July 31, 1996, and the results of its operations,
the changes in its net assets and the financial highlights for the
year then ended, in conformity with generally
accepted accounting principles.
Denver, Colorado
KPMG Peat Marwick LLP
August 30, 1996
<PAGE>
<PAGE>
This is what American Growth Fund* has done for its investors over
the last 38 years.
$504,605** Total value on 07/31/96 with both dividends and capital
gains reinvested.
[MOUNTAIN CHART]
Average Annual thru thru
06/30/96
Total Return** 06/30/96 without
sales charge
1 year 7.9% 14.5%
5 years 13.6% 15.0%
10 years 9.7% 10.4%
15 years 10.9% 11.3%
38 years 10.6% 10.8%
$10,000 investment
on 08/01/58
<PAGE>
