[TYPE] N-30D
[DESCRIPTION] SEMI-ANNUAL REPORT MAILED TO
SHAREHOLDERS
<PAGE>
<PAGE>
To Our Investors
Dear Fellow Shareholder:
Our Fund has grown an average 11% per year during the thirty-nine
year period ending January 31, 1998.
For the 5, 10 and 15 year periods, the Fund's average annual
returns are 11.5%, 11.7% and 10.6%
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 commercial banking, computer
& peripherals, and thrift industries. Our largest holding in the
portfolio is Golden West Financial which
has increased in value by 50% since we first purchased it. Golden
West Financial is a thrift focused on
traditional thrift activities of using retail savings to fund one
to four family mortgage loans. The company
ranks as the third largest thrift in the U.S. with total assets of
around thirty eight billion dollars. We at
American Growth Fund always strive to find the highest quality
investments for you.
This may be a good time to remind our shareholders that we
manage the Fund with two objectives in
mind... to make money and then 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
give your securities representative a
call. I invite your comments, questions and suggestions. Please
feel free to call or write to me.
American Growth Fund wishes you and yours A Good Future!
Sincerely,
Robert Brody
President & Shareholder
<PAGE>
How American Growth Fund Has Its Shareowners' Money Invested
STATEMENT OF INVESTMENTS
January 31, 1998
<TABLE> (unaudited)
<CAPTION>
Market
Description of Security
Shares Value
COMMON STOCKS
<S> . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<C> <C>
Commercial Bank Industry 13.11%
City National Corp. . . . . . . . . . . . . . . . . . . . .
197,800 $6,564,488
(Owns City National Bank, largest independent bank in southern
California.)
SouthTrust Corp.. . . . . . . . . . . . . . . . . . . . . .
90,000 5,082,188
(The thirty third largest bank in the United States)
Royal Bank of Canada. . . . . . . . . . . . . . . . . . . .
70,000 3,657,500
(Canada's largest bank.)
NationsBank Corp. . . . . . . . . . . . . . . . . . . . . .
32,624 1,957,440
(The third largest bank in the United States.)
17,261,616
Computer & Peripherals Industry 7.68%
International Business Machines Corp. . . . . . . . . . . .
60,000 5,921,250
(The world's largest supplier of advanced information processing
technology.)
Hewlett Packard Company . . . . . . . . . . . . . . . . . .
70,000 4,200,000
(A designer and manufacturer of precision electronic products.)
10,121,250
Thrift Industry 5.64%
Golden West Financial Corp. . . . . . . . . . . . . . . . .
88,000 7,430,500
(Third largest thrift in the United States.)
Paper and Forest Industry 3.75%
Fort James . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . .115,000
4,937,812
(The second largest paper goods producer in the United States.)
</TABLE>
PAGE
<PAGE>
<TABLE>
<CAPTION>
Market
Description of Security
Shares Value
<S> . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<C> <C>
Electronic Equipment Industry 3.53%
General Electric Company. . . . . . . . . . . . . . . . . .
60,000 $4,650,000
(One of the largest and most diversified industrial companies in
the world.)
Tobacco Industry 3.15%
Phillip Morris. . . . . . . . . . . . . . . . . . . . . . .
100,000 4,150,000
(The largest tobacco company in the United States.)
Chemical Industry 2.43%
Monsanto Co.. . . . . . . . . . . . . . . . . . . . . . . .
44,000 2,087,250
(Produces a variety of consumer products.)
Solutia, Inc. . . . . . . . . . . . . . . . . . . . . . . .
40,000 1,117,500
(The twentieth largest chemical company in the United States.)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,204,750
Insurance Industry 1.75%
Equitable Companies, Inc. (The) . . . . . . . . . . . . . .
50,000 2,300,000
(Parent holding company of the Equitable Life Assurance Society of
the United States.)
Financial Services Industry 1.50%
Travelers Group, Inc. . . . . . . . . . . . . . . . . . . .
40,000 1,980,000
(The largest non-bank financial services company.)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Market
Description of Security
Shares Value
<S> . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<C> <C>
Building Materials Industry 1.27%
Ameron International Corporation. . . . . . . . . . . . . .
28,500 1,676,156
(The largest supplier of high-performance marine and offshore
coatings in the United States. )
Machine Industry 1.09%
Caterpillar, Inc. . . . . . . . . . . . . . . . . . . . . .
30,000 1,440,000
(The world's largest producer of earthmoving equipment.)
Aerospace/Defense Industry 0.36%
Boeing Company (The). . . . . . . . . . . . . . . . . . . .
10,000 475,625
(The leading manufacturer of commercial jet aircraft.)
Total Common Stocks (cost $40,587,288). . . . . . . . . . .
45.26% 59,627,709
LONG-TERM INVESTMENTS 19.89%
U.S. Treasury Bond, $8,320,000 par, 6.25%, 5.816% yield
due 08/15/2023, principal amount $8,797,100
(amortized cost $8,796,536) . . . . . . . . . . . . . . . .
8,719,027
U.S. Treasury Bond, $17,190,000 par, 6.00%, 5.831% yield
due 02/15/2026, principal amount $17,579,303
(amortized cost $17,579,013) . . . . . . . . . . . . . . .
17,475,870
Total Long-term Investments (cost $26,375,549). . . . . . .
26,194,897
SHORT-TERM INVESTMENTS 24.14%
U.S. Treasury Bill, 5.225% due 03/12/98, principal amount
$16,000,000
(amortized cost $15,909,433) . . . . . . . . . . . . . . .
15,909,433
U.S. Treasury Bill, 5.225% due 03/26/98, principal amount
$16,000,000
(amortized cost $15,876,922) . . . . . . . . . . . . . . .
15,876,922
Total Short-term Investments (cost $31,786,355) . . . . . .
31,786,355
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Market
Description of Security
Shares Value
<S> . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<C> <C>
MONEY MARKET INSTRUMENTS 9.87%
LIR Government Money Fund (Cost $13,000,000)
(PaineWebber Inc, 5.299%) . . . . . . . . . . . . . . . . .
13,000,000
Total Investments, at Value (cost $111,749,192) . . . . . .
99.16% $130,608,961
Cash and Receivables, Less Liabilities. . . . . . . . . . .
0.84% 1,099,855
Net Assets. . . . . . . . . . . . . . . . . . . . . . . . .
100% $131,708,816
</TABLE>
<PAGE>
Financial Statements
<TABLE>
<CAPTION>
AMERICAN GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES, JANUARY 31,
1998
(UNAUDITED)
<S> . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<C>
ASSETS:
Investments at value (cost $111,749,192)-see accompanying statement
. $130,608,961
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 483,211
Receivables:
Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 61,549
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 840,985
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 131,994,706
LIABILITIES:
Shares of beneficial interest redeemed. . . . . . . . . . . . . .
. . 285,890
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . .
. . 285,890
NET ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . $131,708,816
COMPOSITION OF NET ASSETS:
Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . .
. . $113,064,636
Overdistributed net investment income . . . . . . . . . . . . . .
. . (217,573)
Accumulated net realized gain from investment transactions. . . .
. . 1,984
Net unrealized appreciation of investments. . . . . . . . . . . .
. . 18,859,769
Net assets. . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . $131,708,816
NET ASSET VALUE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (based on net
assets
of $13,606,494 and 1,467,680 shares of beneficial interest
outstanding) $9.27
Maximum offering price per share (net asset value plus sales
charge of
5.75% of offering price.). . . . . . . . . . . . . . . . . . . .
. . $9.84
Class B Shares:
Net asset value, redemption price and offering price per share
(based
on net assets of $14,843,433 and 1,616,867 shares of beneficial
interest outstanding)$9.18
Class C Shares:
Net asset value, redemption price and offering price per share
(based
on net assets of $4,064,327 and 442,621 shares of beneficial
interest outstanding)$9.18
Class D Shares:
Net asset value, redemption price and offering price per share
(based on
net assets of $99,194,562 and 10,680,141 shares of beneficial
interest outstanding)$9.29
Maximum offering price per share (net asset value plus sales
charge of 5.75% of
offering price). . . . . . . . . . . . . . . . . . . . . . . . .
. . $9.86
</TABLE.
PAGE
<PAGE>
Financial Statements
</TABLE>
<TABLE>
<CAPTION>
AMERICAN GROWTH FUND, INC.
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JANUARY
31, 1998
(UNAUDITED)
<S> . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . <C>
INVESTMENT INCOME:
Dividends (net of $5,980 foreign withholding tax). . . . . . . .
. . $757,575
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 383,559
Total income. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 1,141,134
EXPENSES:
Investment advisory fees (Note 5). . . . . . . . . . . . . . . .
. . 568,521
Administration expenses (Note 5) . . . . . . . . . . . . . . . .
. . 202,121
Transfer agent, shareholder servicing and data processing fees
(Note 4) 69,437
Custodian fees (Note 4). . . . . . . . . . . . . . . . . . . . .
. . 88,101
Professional fees. . . . . . . . . . . . . . . . . . . . . . . .
. . 23,630
Registration and filing fees:
Class A. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 2,283
Class B. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 2,409
Class C. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 647
Class D. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 20,394
Shareholder reports. . . . . . . . . . . . . . . . . . . . . . .
. . 16,762
Distribution fees:
Class A. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 16,267
Class B. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 69,542
Class C. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 18,762
Class D. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . -
Directors fees . . . . . . . . . . . . . . . . . . . . . . . . .
. . 3,600
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . .
. . 38,740
Total expenses. . . . . . . . . . . . . . . . . . . . . . . . . .
. . 1,141,216
Less expenses paid indirectly (Note 4) . . . . . . . . . . . . .
. . (89,382)
Net expenses. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 1,051,834
Net Investment Income . . . . . . . . . . . . . . . . . . . . . .
. . 89,300
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized gain on investments . . . . . . . . . . . . . . . .
. . 306,083
Net change in unrealized appreciation or depreciation on
investments (14,731,879)
Net realized and unrealized loss . . . . . . . . . . . . . . . .
. . (14,425,796)
Net Decrease in Net Assets Resulting From Operations. . . . . . .
. .$(14,336,496)
</TABLE>
PAGE
<PAGE>
Financial Statements
<TABLE>
<CAPTION>
AMERICAN GROWTH FUND, INC.
STATEMENTS OF CHANGES IN NET
ASSETS
Six Months Ended Year Ended
January 31, 1998 July 31, 1997
(unaudited)
<S>
<C> <C>
OPERATIONS:
Net investment income . . . . . . . . . . . . . . . . . . . . .
. $ 89,300 $ 1,935,396
Net realized gain . . . . . . . . . . . . . . . . . . . . . . .
. 306,083 10,854,048
Net change in unrealized appreciation or depreciation . . . . .
. (14,731,879) 24,155,373
Net increase (decrease) in net assets resulting from operations
(14,336,496) 36,944,817
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. (75,567) (78,116)
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. (14,141) (60,893)
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. (3,850) (17,406)
Class D . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. (790,735) (1,288,377)
Distributions from net realized gain:
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. (1,120,917) (253,876)
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. (1,258,568) (263,868)
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. (342,696) (75,426)
Class D . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. (8,796,922) (4,187,225)
BENEFICIAL INTEREST TRANSACTIONS:
Net increase (decrease) in net assets resulting from beneficial
interest transactions (Note 2):
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 5,680,802 4,705,260
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 6,785,346 5,694,054
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 1,837,826 2,104,311
Class D . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 4,517,164 (11,347,787)
NET ASSETS:
Total increase (decrease) . . . . . . . . . . . . . . . . . . .
. (7,918,754) 31,875,468
Beginning of period . . . . . . . . . . . . . . . . . . . . . .
. 139,627,570 107,752,102
End of period (including (over)/undistributed net investment
income of $(217,573) and $577,421 respectively) . . . . . . . .
. $131,708,816 $ 139,627,570
</TABLE>
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class D
Six Months EndedYear Ended July 31,
January 31, 1998
(Unaudited)
<S> <C> <C> <C>
<C> <C> <C>
1998 1997 1996
1995 1994 1993
Per Share Operating Data:
Net Asset Value,
Beginning of Period . . . . . . . . . . $ 11.33 $ 8.85 $ 8.75
$ 9.34 $ 9.39 $ 8.50
Income (loss) from investment operations:
Net investment income . . . . . . . . . . ..025 0.175 .035
.21 .03 .11
Net realized and unrealized gain (loss) .(1.09) 2.82 .39
.88 1.00 1.51
Total income (loss) from investment operations(1.07)2.99 .42
1.09 1.03 1.62
Dividends and distributions to shareholders:
Dividends from net investment income. . . (.08) (.12)6 (.12)6
(.12) (.05) (.08)
Distributions from net realized gain. . . (.89) (.39) (.20)
(1.56) (1.03) (.65)
Total dividends and distributions
to shareholders . . . . . . . . . . . . . (.97) (.51) (.32)
(1.68) (1.08) (.73)
Net Asset Value, End of Period. . . . . .$ 9.29 $ 11.33 $ 8.85
$ 8.75 $ 9.34 $ 9.39
Total Return at Net Asset Value1. . . . .(9.7)% 35.1% 4.8%
15.2% 11.1% 20.2%
Ratios/Supplemental Data:
Net assets, end of period (in thousands)$99,195$115,106 $100,130
$90,538 $68,209 $62,180
Ratios to average net assets:
Net investment income (loss)5 . . . . . . 0.27% 1.71% 0.47%
1.91% 0.35% 0.59%
Expenses2,5 . . . . . . . . . . . . . . . 1.49% 1.55% 1.63%
1.45% 1.34% 1.44%
Portfolio Turnover Rate3,5. . . . . . . .125.1% 106.2% 163.1%
173.0% 87.2% 48.8%
Average Brokerage Commission Rate4 $0.0576 0.0578 0.0576
0.0566 0.0566 0.0566
</TABLE>
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A Class B Class C
Class A Class B Class C
<S> <C> <C> <C>
<C> <C> <C>
Six Months ended January 31, 1998
Year ended July 31, 1997
(Unaudited)
1997 1997 1997
Per Share Operating Data:
Net Asset Value,
Beginning of Period . . . . . . . . . . $ 11.30 $ 11.18 $ 11.19
$ 8.84 $ 8.80 $ 8.81
Income (loss) from investment operations:
Net Investment income(loss) . . . . . . . (.00) (.02) (.02)
.146 .07 .076
Net realized and unrealized gain (loss) .(1.08) (1.09) (1.09)
2.83 2.79 2.79
Total income (loss) from investment operations(1.08)(1.11) (1.11)
2.97 2.86 2.86
Dividends and distributions to shareholders:
Dividends from net investment income. . . (.06) (.01) (.01)
(.12)7 (.09)7 (.09)7
Distributions from net realized gain. . . (.89) (.89) (.89)
(.39) (.39) (.39)
Total dividends and distributions
to shareholders . . . . . . . . . . . . . (.95) (.90) (.90)
(.51) (.48) (.48)
Net Asset Value, End of Period. . . . . . $9.27 $9.17 $9.18
$ 11.30 $ 11.18 $11.19
Total Return at Net Asset Value . . . . .(9.8)% (10.1)% (10.2)%
34.6% 33.5% 33.6%
Ratios/Supplemental Data:
Net assets, end of period (in thousands)$13,606 $14,843 $4,064
$10,536 $10,962 $3,023
Ratio to average net assets:
Net investment income6. . . . . . . . . . 0.05% (0.68)% (0.67)%
1.28% .49% .55%
Expenses1,5 . . . . . . . . . . . . . . . 1.71% 2.44% 2.46%
1.76% 2.46% 2.50%
Portfolio Turnover Rate2,5. . . . . . . .125.1% 125.1% 125.1%
106.2% 106.2% 106.2%
Average Brokerage Commission Rate3. . . $0.0576 $0.0576 $0.0576
$0.0578 $0.0578 $0.0578
</TABLE>
PAGE
<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>
Six Months Ended January
31, 1998 Year Ended July 31, 1997
(Unaudited)
Shares Amount
Shares Amount
<S> <C> <C>
<C> <C>
Class A:
Sold 533,260 $5,795,656
794,548 $ 7,631,271
Dividends and distributions reinvested 124,601 1,193,678
33,407 311,961
Redeemed (122,657) (1,308,532)
(329,452) (3,237,972)
Net increase 535,204 5,680,802
498,503 4,705,260
Class B:
Sold 607,194 6,541,036
700,555 6,739,509
Dividends and distributions reinvested129,640 1,231,569
29,453 273,621
Redeemed (100,097) (987,259)
(137,934) (1,319,076)
Net increase 636,737 6,785,346
592,074 5,694,054
Class C:
Sold 141,959 1,553,158
247,873 2,292,548
Dividends and distributions reinvested 35,909 341,135
8,632 80,191
Redeemed (5,452) (56,467)
(28,005) (268,428)
Net Increase 172,416 1,837,826
228,500 2,104,311
Class D:
Sold 291,747 3,223,501
432,812 4,042,281
Dividends and distributions reinvested973,074 9,341,542
541,417 5,060,925
Redeemed (747,084) (8,047,879)
(2,117,535) (20,450,993)
Net increase (decrease) 517,737 $4,517,164
(1,152,306)$ (11,347,787)
</TABLE>
3. Unrealized Gains and Losses on Investments
The identified tax cost basis of investments at January 31, 1998
was $111,822,183. Net unrealized appreciation on
investments of $18,859,769, based on identified tax cost as of
January 31, 1998, was comprised of gross appreciation of
$19,478,599 and gross depreciation of $618,830.
4. Fund Expenses Paid Indirectly
Fees for transfer agent/data processing services and custodian
services totaling $30,816 and $58,566, 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 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
<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 six months ended January 31, 1998 commissions and sales
charges paid by investors on the purchase of Fund
shares totaled $425,866 of which $109,443 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
$220,386. For the six months ended January 31, 1998,
Sponsors received contingent deferred sales charges of $5,356
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 six months ended January 31, 1998 the Fund
paid directors' fees and expenses of $3,600.
For the six months ended January 31, 1998, under an agreement
with IRC, the Fund was charged $132,748 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 $32,416 by an affiliated company
of IRC for the rental of office space.
6. Federal Income Tax Matters
On December 16, 1997, distributions of $0.06 and $0.89
aggregating $75,567 and $1,120,917, $0.01 and $0.89 aggregating
$14,141 and $1,258,568, $0.01 and $0.89 aggregating $3,850 and
$342,696, $0.08 and $0.89 aggregating $790,735 and
$8,796,922 were declared from net investment income and realized
gains, respectively on the Fund's Class A, B, C and D
shares, respectively. The dividends were paid December 19, 1997.
For the six months ended January 31, 1998, 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 $306,083 during the six months ended January 31,
1998.
<PAGE> <PAGE>
This is what American Growth Fund* has done for its investors over
the last 39
1/2 years.
$630,914** Total value on 12/31/97 with both dividends and capital
gains
reinvested.
{MOUNTAIN CHART}
Average Annual thru Thru 12/31/97
Total Return** 12/31/97 without sales charge
1 year 6.6%
13.2%
5 years 12.0%
13.4%
10 years 12.0%
12.7%
15 years 10.5%
10.9%
39 years 10.8%
11.0%
$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 3/1/96, 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-nine years ended 12/31/97, the Fund's average annual
total
return was 10.8%, over fifteen years it was 10.5%, over ten years
it was
12.0%, over five years is was 12.0%, over one year it was 6.6%. The
total
return figures assume the maximum sales load (5.75%). The annual
returns for
the year ended 12/31/97 were: Class A, 6.6%; Class B, 7.1%; Class
C, 11.1%.
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 12.1% and 12.1%, respectively. In
the thirty-
nine years ended 12/31/97, the Fund's average annual total return
calculated
without a sales load was 10.9%, for fifteen years it was 10.9%, for
ten years
it was 12.7%, for five years it was 13.4%, and for the one year it
was 13.2%.
Distributor: American Growth Fund Sponsors, Inc. 110 Sixteenth
Street, Suite
1400, Denver, CO 80202, Phone (800) 525-2406.
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