This is what American Growth Fund has done for its investors* over
the last 39 years.
$681,549** Total value on 07/31/97 with both dividends and capital
gains reinvested.
<TABLE>
<CAPTION>
<S> <C> <C>
Average Annual thru thru 07/31/97
Total Return** 07/31/97 without sales charge
1 year 27.3% 35.1%
5 years 15.5% 16.8%
10 years 10.5% 11.1%
15 years 11.0% 11.5%
39 years 11.4% 11.6%
</TABLE>
$10,000 investment on August 1, 1958
*A conservative, long-term growth mutual fund with income as a
secondary objective.
** The figures in this brochure reflects the performance of the
Fund's Class D shares. On 03/01/96, the
fund adopted a multi-class distribution arrangement to issue
additional classes of shares, designated as
Class A, Class B and Class C shares. Shares existing prior to
3/1/96 became Class D shares. Class A
and Class D shares are subject to a maximum front-end sales charge
of 5.75%, Class B shares are
subject to a maximum contingent deferred sales charge of 5% and
Class C shares are subject to a 1%
contingent deferred sales charge within the first year of purchase.
The Fund may incur 12b-1 expenses
up to an annual maximum of .30 of 1% on its average daily net
assets of its Class A shares, 1% of its
average daily net assets of its Class B shares, and 1% of its
average daily net assets of its Class C
shares. Class D shares have no 12b-1 fees. Performance figures for
Class D shares include the 5.75%
initial sales charge and assume the reinvestment of income
dividends and capital gain distributions.
Performance quoted represents past performance. The investment
return and principal value of an
investment will fluctuate so that the investor's shares, when
redeemed, may be worth more or less than
their original cost. This material must be preceded or accompanied
by a current prospectus. If you have
not received, or need a current prospectus, please feel free to
call for one. Please read the prospectus
carefully before investing.
In the thirty-eight years ended 06/30/97, the Fund's average annual
total return was 10.7%, over fifteen
years it was 12.3%, over ten years it was 9.7%, over five years it
was 13.3%, over one year it was 8.2%.
The total return figures assume the maximum sales load (5.75%). The
annual returns for the year ended
06/30/97 were: Class A; 7.8%, Class B; 8.6%, Class C; 12.6%. Annual
returns assume a front end sales
charge of 5.75% on Class A, a 5% contingent deferred sales charge
for the first year on Class B, and a
1% contingent deferred sales charge for a period of one year or
less on Class C. Class B and Class C
performance without the contingent deferred sales charge during the
first year would be 13.6% and 13.6%,
respectively. In the thirty-eight years ended 06/30/97, the Fund's
average annual total return calculated
without a sales load was 10.9%, for fifteen years it was 12.8%, for
ten years it was 10.3%, for five years
it was 14.6%, and for the one year it was 14.8%.
Distributor: American Growth Fund Sponsors, Inc. 110 Sixteenth
Street, Suite 1400, Denver, CO 80202.
<PAGE> <PAGE>
To Our Investors
Dear Shareholder:
As I write this message to you, our fund is up 35.10% for our
fiscal year ended 7/31/97. Our Fund's
portfolio has been positioned to take advantage of what we perceive
to be opportunities in the forthcoming
market. A large portion of your fund's investments have been placed
in the oil field services, commercial
bank and steel 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 39 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) 626-0600. I invite your
comments, questions and suggestions. Please feel free to call or
write me.
American Growth Fund wishes you A Good Future!
Sincerely,
Robert Brody
President & Shareholder
PAGE
<PAGE>
How American Growth Fund Has Its Shareowners' Money Invested
<TABLE> STATEMENT OF INVESTMENTS
July 31, 1997
<CAPTION>
Market
Description of Security
Shares Value
COMMON STOCKS
Oilfield Services Industry 24.22%
<S> . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<C> <C>
Schlumberger Limited. . . . . . . . . . . . . . . . . . . . .
112,000 $ 8,554,000
(The largest oilfield services company in the world; operates in
two segments: oilfield services and
measurement systems.)
Global Marine, Inc.*. . . . . . . . . . . . . . . . . . . . .
200,000 5,725,000
(The largest provider of turnkey drilling services in oilfield
services industry.)
ENSCO International, Inc.*. . . . . . . . . . . . . . . . . .
60,000 3,967,500
(The 4th largest contract drilling services in the world.)
BJ Services Company*. . . . . . . . . . . . . . . . . . . . .
60,000 3,900,000
(The 3rd largest oilfield services company in the world.)
Rowan Companies, Inc.*. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . .100,000
3,287,500
(Operates in three segments: drilling, manufacturing and
aircraft.)
Transocean Offshore, Inc. . . . . . . . . . . . . . . . . . .
40,000 3,267,500
(Provides contract drilling services for offshore oil and gas
wells.)
Helmerich & Payne, Inc. . . . . . . . . . . . . . . . . . . .
37,800 2,544,413
(Explores and produces oil and natural gas and provides drilling
services.)
Tidewater, Inc. . . . . . . . . . . . . . . . . . . . . . . .
40,000 2,020,000
(The largest supplier of offshore transportation services for the
worldwide offshore energy industry.)
Petroleum Geo-Services Asa*, ADR. . . . . . . . . . . . . . .
10,000 544,375
(The ninth largest oilfield services company in the world;
creates images of the geology beneath the seabed.)
33,810,288
Commercial Bank Industry 13.72%
City National Corp. . . . . . . . . . . . . . . . . . . . . .
200,000 5,750,000
(Owns City National Bank, largest independent bank in southern
California.)
SouthTrust Corp.. . . . . . . . . . . . . . . . . . . . . . .
90,000 4,238,437
(The 33rd largest bank in the U.S.)
J.P. Morgan & Company, Inc. . . . . . . . . . . . . . . . . .
30,000 3,476,250
(One of the largest trust companies in the United States.)
Royal Bank of Canada. . . . . . . . . . . . . . . . . . . . .
70,000 3,364,375
(Canada's largest bank.)
NationsBank Corp. . . . . . . . . . . . . . . . . . . . . . .
32,624 2,322,421
(The 3rd largest bank in the United States.)
19,151,483
*Non-income producing security.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Market
Description of Security
Shares Value
<S>
<C> <C>
Steel Industry 13.07%
Bethlehem Steel*. . . . . . . . . . . . . . . . . . . . . . .
600,000 $ 6,750,000
(The second largest United States integrated steel maker.)
USX-U.S. Steel Group. . . . . . . . . . . . . . . . . . . . .
175,000 6,398,438
(The largest United States steel maker.)
Nucor Corporation . . . . . . . . . . . . . . . . . . . . . .
60,000 3,723,750
(The second largest United States general steel maker.)
Inland Steel Industries, Inc. . . . . . . . . . . . . . . . .
60,000 1,376,250
(The fifth largest steel producer in the United States.)
18,248,438
Paper and Forest Industry 8.19%
International Paper Company . . . . . . . . . . . . . . . . .
105,000 5,880,000
(One of the largest manufacturers of paper products in the
world.)
James River Corp. . . . . . . . . . . . . . . . . . . . . . .
135,000 5,560,312
(The second largest paper goods producer in the United States.)
11,440,312
Computer & Peripherals Industry 8.06%
International Business Machines Corp. . . . . . . . . . . . .
60,000 6,345,000
(The world's largest supplier of advanced information processing
technology.)
Hewlett Packard Company . . . . . . . . . . . . . . . . . . .
70,000 4,904,375
(A designer and manufacturer of precision electronic products.)
11,249,375
Thrift Industry 5.30%
Golden West Financial Corp. . . . . . . . . . . . . . . . . .
88,000 7,403,000
(Third largest thrift in the United States.)
Aerospace/Defense Industry 5.22%
Boeing Company (The). . . . . . . . . . . . . . . . . . . . .
124,000 7,292,750
(The leading manufacturer of commercial jet aircraft.)
*Non-income producing security.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Market
Description of Security
Shares Value
<S>
<C> <C>
Retail Store Industry 4.31%
Sears, Roebuck and Company. . . . . . . . . . . . . . . . . .
95,000 $ 6,014,687
(World's second largest retailer.)
Electronic Equipment Industry 4.02%
General Electric Company. . . . . . . . . . . . . . . . . . .
80,000 5,615,000
(One of the largest and most diversified industrial companies in
the world.)
Machine Industry 4.01%
Caterpillar, Inc. . . . . . . . . . . . . . . . . . . . . . .
100,000 5,600,000
(The world's largest producer of earthmoving equipment.)
Chemical Industry 3.03%
Monsanto Co.. . . . . . . . . . . . . . . . . . . . . . . . .
85,000 4,234,063
(Produces a variety of consumer products.)
Financial Services Industry 2.06%
Travelers Group, Inc. . . . . . . . . . . . . . . . . . . . .
40,000 2,877,500
(The largest non-bank financial services company.)
Insurance Industry 1.41%
Equitable Companies, Inc. (The) . . . . . . . . . . . . . . .
50,000 1,968,750
(Parent holding company of the Equitable Life Assurance Society
of the United States.)
Recreation Industry 1.25%
Callaway Golf Company . . . . . . . . . . . . . . . . . . . .
50,000 1,750,000
(The largest golf company in the United States; leading designer
and manufacturer of golf clubs.)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Market
Description of Security
Shares Value
<S> <C>
<C>
Building Materials Industry 1.23%
Ameron International Corporation. . . . . . . . . . . . . . .
30,000 1,710,000
(The largest supplier of high-performance marine and offshore
coatings in the United States. )
Total Investments, at Value (cost $104,773,998) . . . . . . .
99.10% $138,365,646
Cash and Receivables, Less Liabilities. . . . . . . . . . . .
0.90% $1,261,924
Net Assets. . . . . . . . . . . . . . . . . . . . . . . . . .
100% $139,627,570
</TABLE>
<PAGE>
<PAGE>
Financial Statements
<TABLE>
<CAPTION>
AMERICAN GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES, JULY 31,
1997
<S> . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<C>
ASSETS:
Investments, at value (cost $104,773,998)-see accompanying
statement . $138,365,646
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 2,458,534
Receivables:
Shares of beneficial interest sold . . . . . . . . . . . . . .
. . . 214,307
Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 76,100
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 141,114,587
LIABILITIES:
Investments purchased. . . . . . . . . . . . . . . . . . . . . .
. . .
1,177,168
Shares of beneficial interest redeemed . . . . . . . . . . . . .
. . .
309,849
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . .
. . . 1,487,017
NET ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . $ 139,627,570
COMPOSITION OF NET ASSETS:
Paid-in capital. . . . . . . . . . . . . . . . . . . . . . . . .
. . . $94,243,498
Undistributed net investment income. . . . . . . . . . . . . . .
. . . 577,421
Accumulated net realized gain from investment transactions . . .
. . . 11,215,003
Net unrealized appreciation of investments . . . . . . . . . . .
. . .
33,591,648
Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . $139,627,570
NET ASSET VALUE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (based on net
assets
of $10,535,504 and 932,476 shares of beneficial interest
outstanding) $11.30
Maximum offering price per share (net asset value plus sales
charge of
5.75% of offering price) . . . . . . . . . . . . . . . . . . .
. . . $11.99
Class B Shares:
Net asset value, redemption price and offering price per share
(based
on net assets of $10,962,496 and 980,130 shares of beneficial
interest outstanding)$11.18
Class C Shares:
Net asset value, redemption price and offering price per share
(based
on net assets of $3,023,390 and 270,205 shares of beneficial
interest outstanding)$11.19
Class D Shares:
Net asset value and redemption price per share (based on net
assets of
$115,106,180 and 10,162,405 shares of beneficial interest
outstanding) $11.33
Maximum offering price per share (net asset value plus sales
charge of
5.75% of offering price) . . . . . . . . . . . . . . . . . . .
. . . $12.02
</TABLE>
<PAGE>Financial Statements
<TABLE>
<CAPTION> AMERICAN GROWTH FUND, INC.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED JULY 31,
1997
<S> . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . <C>
INVESTMENT INCOME:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . $2,129,649
Dividends (net of $22,602 foreign withholding tax) . . . . . .
. . . 1,382,014
Total income . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 3,511,663
EXPENSES:
Investment advisory fees (Note 5). . . . . . . . . . . . . . .
. . . 978,027
Administration expenses (Note 5) . . . . . . . . . . . . . . .
. . . 397,689
Transfer agent, shareholder servicing and data processing fees
(Note 4) 254,313
Custodian fees (Note 4). . . . . . . . . . . . . . . . . . . .
. . . 92,817
Professional fees. . . . . . . . . . . . . . . . . . . . . . .
. . . 31,570
Registration and filing fees:
Class A . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 2,928
Class B . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 2,686
Class C . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 869
Class D . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 47,907
Shareholder reports. . . . . . . . . . . . . . . . . . . . . .
. . . 10,825
Distribution and service fees:
Class A . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 17,911
Class B . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 67,390
Class C . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 20,433
Directors fees . . . . . . . . . . . . . . . . . . . . . . . .
. . . 8,400
Other expenses . . . . . . . . . . . . . . . . . . . . . . . .
. . . 49,569
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 1,983,334
Less expenses paid indirectly (Note 4) . . . . . . . . . . . .
. . .
(407,067)
Net expenses . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 1,576,267
Net Investment Income . . . . . . . . . . . . . . . . . . . . . .
. . . 1,935,396
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments . . . . . . . . . . . . . . .
. . . 10,854,048
Net change in unrealized appreciation or depreciation on
investments 24,155,373
Net realized and unrealized gain . . . . . . . . . . . . . . .
. . . 35,009,421
Net Increase in Net Assets Resulting From Operations. . . . . . .
. . . $36,944,817
</TABLE>
PAGE
<PAGE>
Financial Statements
<TABLE>
<CAPTION> AMERICAN GROWTH FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JULY 31, 1997 AND 1996
1997
1996
<S> <C>
<C>
OPERATIONS:
Net investment income. . . . . . . . . . . . . . . . .
$1,935,396 $ 483,715
Net realized gain. . . . . . . . . . . . . . . . . . .
10,854,048 7,083,415
Net change in unrealized appreciation or depreciation.
24,155,373 (3,074,255)
Net increase in net assets resulting from operations
36,944,817 4,492,875
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class A. . . . . . . . . . . . . . . . . . . . . . . .
(78,116) -
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .(60,893)-
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .(17,406)-
Class D. . . . . . . . . . . . . . . . . . . . . . . .
(1,288,377) (1,387,812)
Distributions from net realized gain:
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .(253,876)-
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .(263,868)-
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .(75,426)-
Class D. . . . . . . . . . . . . . . . . . . . . . . .
(4,187,225) (2,312,575)
BENEFICIAL INTEREST TRANSACTIONS:
Net increase (decrease) in net assets resulting from beneficial
interest transactions(Note 2):
Class A. . . . . . . . . . . . . . . . . . . . . . . . 4,705,260
4,048,441
Class B. . . . . . . . . . . . . . . . . . . . . . . . 5,694,054
3,603,382
Class C. . . . . . . . . . . . . . . . . . . . . . . . 2,104,311
383,952
Class D. . . . . . . . . . . . . . . . . . . . . . . .
(11,347,787) 8,385,535
NET ASSETS:
Total increase . . . . . . . . . . . . . . . . . . . .
31,875,468 17,213,798
Beginning of period. . . . . . . . . . . . . . . . . .
107,752,102 90,538,304
End of period (including undistributed net investment
income of $557,421 and $86,817 respectively) . . . . .
$139,627,570 $107,752,102
</TABLE>
PAGE
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class D
<S> <C> <C>
<C> <C>
<C>
Year Ended July 31,
1997 1996 1995
1994 1993
Per Share Operating Data:
Net Asset Value, Beginning of Period. . $8.85 $ 8.75 $ 9.34 $
9.39 $ 8.50
Income from investment operations:
Net investment income . . . . . . . . . 0.175 0.035 0.21
0.03 0.11
Net realized and unrealized gain. . . . 2.82 0.39 0.88
1.00 1.51
Total income from investment operations 2.99 0.42 1.09
1.03 1.62
Dividends and distributions to shareholders:
Dividends from net investment income. .(0.12)6 (0.12)6 (0.12)
(0.05) (0.08)
Distributions from net realized gain. .(0.39) (0.20) (1.56)
(1.03) (0.65)
Total dividends and distributions
to shareholders . . . . . . . . . . . . (0.51) (0.32) (1.68)
(1.08) (0.73)
Net Asset Value, End of Period. . . . .$11.33 $ 8.85 $ 8.75 $
9.34 $ 9.39
Total Return at Net Asset Value1. . . . 35.1% 4.8% 15.2%
11.1% 20.2%
Ratios/Supplemental Data:
Net assets, end of period (in thousands)$115,106$100,130$90,538
$68,209 $62,180
Ratios to average net assets:
Net investment income.. . . . . . . . . 1.71% 0.47% 1.91%
0.35% 0.59%
Expenses2 . . . . . . . . . . . . . . . 1.55% 1.63% 1.45%
1.34% 1.44%
Portfolio turnover rate3. . . . . . . . 106.2% 163.1% 173.0%
87.2% 48.8%
Average brokerage commission rate4 $0.0578 $0.0561 -
- -
</TABLE>
1. Assumes a hypothetical initial investment on the business day
before the first day of the fiscal period 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.
2. Beginning in fiscal 1996, the expense ratio reflects the
effect of expenses paid indirectly by the Fund. Prior year expenses
have not been adjusted.
3. 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. Securities with a maturity or expiration date
at the time of acquisition of one year or less are excluded from
the calculation. Purchases and
sales of investment
securities (other than short-term securities) for the period
ended July 31, 1997, aggregated $132,035,122 and $85,312,030,
respectively.
4. 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.
5. Net investment income per share is based upon relative daily
net asset values.
6. Distributions from net investment income per share are based
upon relative net asset values as of the business day following the
distribution record date.
<PAGE>
See accompanying notes to financial statements.<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
<S> <C> <C> <C>
<C> <C> <C>
Class A Class A
Class B Class B Class C Class C
Period Ended July 31,
1997 19961 1997 19961
1997 19961
Per Share Operating Data:
Net Asset Value,
Beginning of Period . . . . . . . . . . .$8.84 $9.21 $8.80 $ 9.21$
8.81 $ 9.21
Income (loss) from investment operations:
Net investment income(loss) . . . . . . .0.147 -7 0.077(0.01)7
0.077 -7
Net realized and unrealized gain (loss) .2.83 (0.37) 2.79 (0.40)
2.79 (0.40)
Total income (loss) from investment operations2.97(0.37)2.86(0.41)
2.86 (0.40)
Dividends and distributions to shareholders:
Dividends from net investment income. .(0.12)8 -(0.09)8
- -(0.09)8 -
Distributions from net realized gain. .(0.39) -(0.39)
- -(0.39) -
Total dividends and distributions
to shareholders . . . . . . . . . . . .(0.51) -(0.48)
- -(0.48) -
Net Asset Value, End of Period. . . . .$11.30 $ 8.84 $11.18 $
8.80$11.19 $ 8.81
Total Return at Net Asset Value2. . . . .34.6%(4.0)% 33.5% (4.5)%
33.6% (4.3)%
Ratios/Supplemental Data:
Net assets, end of period (in
thousands)$10,536$3,838$10,962$3,417$3,023 $367
Ratio to average net assets:
Net investment income (loss). . . . . . .1.28%0.13%6
0.49%(0.52)%60.55%(0.63)%6
Expenses3 . . . . . . . . . . . . . . . .1.76%2.06%6 2.46% 2.81%6
2.50%2.97%6
Portfolio turnover rate4. . . . . . . . 106.2%163.1% 106.2%
163.1%106.2% 163.1%
Average brokerage commission rate5 .
.$0.0578$0.0561$0.0578$0.0561$0.0578$0.0561
</TABLE>
1. For the period from March 1, 1996 (inception of offering) to
July 31, 1996.
2. 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.
3. Beginning in fiscal 1996, the expense ratio reflects the
effect of expenses paid indirectly by the Fund. Prior year expenses
have not been adjusted.
4. 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. Securities with a maturity or expiration date
at the time of acquisition of one year or less are excluded from
the calculation. Purchases and
sales of investment
securities (other than short-term securities) for the period
ended July 31, 1997, aggregated $132,035,122 and $85,312,030,
respectively.
5. 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.
6. Annualized.
7. Net investment income per share is based upon relative daily
net asset values.
8. Distributions from net investment income per share are based
upon relative net asset values as of the business day following the
distribution record date.
<PAGE>
See accompanying notes to financial statements.<PAGE>
Notes to Financial Statements
1.Summary of Significant Accounting Policies
American Growth Fund, Inc. (the "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's investment advisor is Investment
Research Corporation (IRC). The Fund offers Class A, Class B,
Class C and Class D shares. Class D shares are available to
shareholders in existence prior to 3/1/96. 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 that class and exclusive voting rights with respect
to matters affecting that 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, Gains and Losses - Income,
expenses (other than those attributable to a specific
class), 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 the Fund intends 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. Also,
due to timing of dividend distributions, the fiscal year in which
amounts are distributed may differ from the fiscal year in
which the income or realized gain was recorded by the Fund.
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 reportedon 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:
<TABLE>
<CAPTION>
Year Ended July 31, 1997
Year Ended July 31, 19961
<S> <C> <C>
<C> <C>
Shares Amount
SharesAmount
Class A:
Sold 794,548 $7,631,271 437,138
$4,077,847
Dividends and distributions reinvested33,407311,961
- - -
Redeemed (329,452)(3,237,972)
(3,165) (29,406)
Net increase 498,503 4,705,260 433,973
4,048,441
Class B:
Sold 700,555 6,739,509
388,712 3,609,424
Dividends and distributions reinvested 29,453 273,621
- - -
Redeemed (137,934)(1,319,076)
(656) (6,042)
Net increase 592,074 5,694,054 388,056
3,603,382
Class C:
Sold 247,873 2,292,548 41,705
383,955
Dividends and distributions reinvested8,63280,191
- - -
Redeemed (28,005) (268,428)
- - (3)
Net increase 228,500 2,104,311 41,705
383,952
Class D:
Sold 423,812 4,042,281
2,553,651 23,031,338
Dividends and distributions reinvested541,4175,060,925
375,550 3,300,334
Redeemed (2,117,535) (20,450,993)
(1,956,583)(17,946,137)
Net increase (decrease) (1,152,306)$ (11,347,787)
972,618$ 8,385,535
</TABLE>
1. For the period from March 1, 1996 (inception of offering) to
July 31, 1996 for Class A, Class B and Class C shares.
3.Unrealized Gains and Losses on Investments
The identified tax cost basis of investments at July 31, 1997 was
$105,324,757. Net unrealized appreciation on investments
of $33,040,889, based on identified tax cost as of July 31, 1997,
was comprised of gross appreciation of $33,246,961 and
gross depreciation of $206,072.
4.Fund Expenses Paid Indirectly
Fund expenses totaling $279,885 relating to certain operating
expenses were paid by broker/dealers under terms of
brokerage/service arrangements. Fees for transfer agent/data
processing services and custodian services totaling
$61,380 and $65,802, 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 notagreed to a reduction in fees.
5.Underwriting, Investment Advisory Contracts and Service Fees
<PAGE>
Under the investment advisory contract with IRC, the advisor
receives annual compensation for investment advice,
computed and paid monthly, equal to 1% of the first $30 million
of the Fund's average annual net assets of the Fund <PAGE>
Notes to Financial
Statements
and 0.75% of such assets in excess of $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 annual service and
distribution fees of 0.25% and 0.75% of average daily net assets,
respectively. Class A shares are subject to annual service and
distribution fees of 0.25% and 0.05% of average daily net assets,
respectively.
For the year ended July 31, 1997 commissions and sales charges
paid by investors on the purchase of Fund shares totaled
$472,212 of which $140,586 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 $206,299. For the year
ended July 31, 1997, Sponsors received contingent deferred
sales charges of $11,306 upon redemption of Class B and C shares,
as reimbursement for sales commissions advanced by
Sponsors upon the sale of such shares.
Certain officers of the Fund are also officers of Sponsors and
IRC. For the year ended July 31, 1997 the Fund paid directors'
fees and expenses of $8,400.
For the year ended July 31, 1997, under an agreement with IRC,
the Fund was charged $327,911 for the costs and expenses
related to employees of IRC who provide administrative, clerical
and accounting services to the Fund. In addition, the Fund was
charged $61,170 by an affiliated company of IRC for the rental of
office space.
6.Federal Income Tax Matters
On December 19, 1996, per share distributions were declared as
follows: Class A: $0.12, Class B: $0.09, Class C: $0.09 and
Class D: $0.12 from net investment income, respectively, and
$0.39 for each share class from realized gains. The dividends were
paid December 31, 1996. For the Fund's year ended July 31, 1997,
all ordinary income dividends 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 $10,854,048 during the year ended July 31, 1997.
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, 1997, and the related statement of operations
for the year then ended, and the statement of changes
in net assets and the financial highlights for each of the years in
the two-year 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. The financial highlights for
each of the years in the three-year period ended July 31,1995 were
audited by other auditors.
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 July 31, 1997, by correspondence with the custodian and brokers;
and where confirmations were not received from
brokers, we performed other auditing 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 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 American Growth Fund, Inc. as
of July 31, 1997, the results of its operations for
the year then ended, and the changes in its net assets and the
financial highlights for each of the years in the two-year
period then ended, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Denver, Colorado
August 29, 1997
<PAGE>
