This is what American Growth Fund has done for its investors* over
the last 41 years.
$657,984** Total value on 08/31/99 with both dividends and capital
gains reinvested.
*A conservative, long term growth mutual fund with income as a
secondary objective.
** The figures in this brochure reflect 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 forty years ended 06/30/99, the Fund's average annual total
return for Class D was 10.3%, over
fifteen years it was 10.0%, over ten years it was 10.7%, over five
years it was 8.3%, over one year
it was -5.9%. The total return figures assume the maximum sales
load (5.75%). The one year returns
for Class A (assume 5.75% sales load), -6.0%; Class B(includes 5%
contingent deferred sales
charge), -6.0% and for Class C (includes a 1% contingent deferred
sales charge), -2.1%. The one
year total return for Class A, B & C calculated without sales
charge would be -0.27%, -1.0% and -
1.1% respectively. Performance figures (not annualized) since
inception (3-1-96) for Class A
(including 5.75% sales load, 16.4%; Class B (including 4%
contingent deferred sales charge),
16.3%; Class C, 20.3%. Return figures since inception (not
annualized) calculated withour sales
charges for Class A, 23.5%; Class B, 20.3%; Class C, 20.3%. In
forty years ended 06/30/99, the
Fund's average annual total return calculated without a sales load
was 10.5%, for fifteen years it was
10.4%, for ten years it was 11.4%, for five years it was 9.6%, and
for the one year it was -0.20%.
Distributor: American Growth Fund Sponsors, Inc. 110 Sixteenth
Street, Suite 1400, Denver, CO
80202
<PAGE>
<PAGE>
To Our Investors
Dear Shareholder:
Mr. Greenspan and his policies seem to be able to keep the economy
on track. As I write this letter to you
the inflation rate is 2.1% and the rate of unemployment is 4.2%.
All indicators seem to show that the
economy is robust and stable. We have positioned your portfolio to
take advantage of this economy.
The fund in the last year has experienced a wavering in the market.
In the first six months of the year the
fund took a position that led to less than expected growth. We've
made some changes and I am happy to
report that in the period from June 30, 1999 to September 3, 1999,
our fund has substantially out-performed
the Dow Jones Industrial Average. We try to include only the
largest and most elite companies in your
portfolio in keeping with our investment philosophy of maintaining
conservative growth. Some of them are
Hewlett Packard (leading manufacturer of computer products),
General Electric (one of the world's largest
providers of financing and insurance, as well as a leading maker of
jet engines, electric utility generator and
the last original member of the Dow Jones Industrials) and Texaco
(leading international oil and natural gas
company engaged in exploration, refining and marketing operations).
We are excited about the years ahead and are optimistic that we
will continue to give you, our shareholder,
rewarding performance. The stock market has been a good one for
American Growth Fund, Inc. over the
past 41 years and you have benefitted as a result.
My staff and I are always available to discuss your account with
you. Our toll-free number is 800.525.2406.
American Growth Fund wishes you A Good Future!
Sincerely
Robert Brody
9/3/99
<PAGE>
<PAGE>
How American Growth Fund Has Its Shareowners' Money Invested
<TABLE> STATEMENT OF INVESTMENTS
<CAPTION> July 31, 1999
<S> <C>
<C>
Market
Description of Security Shares
Value
COMMON STOCKS 87.08%
Commercial Bank Industry 17.45%
City National Corp.. . . . . . . . . . . . . . . . . . . 197,800
$ 6,774,650
(Owns City National
Bank, largest independent bank in southern California.)
SouthTrust Corp. . . . . . . . . . . . . . . . . . . . . 135,000
4,961,250
(The 33rd largest
bank in the U.S.)
Royal Bank of Canada . . . . . . . . . . . . . . . . . . 70,000
3,045,000
(Canada's largest
bank.)
Bank America Corp. . . . . . . . . . . . . . . . . . . . 32,624
2,165,418
(The 3rd largest bank
in the United States.)
16,946,318
Computer & Peripherals Industry 9.20%
Hewlett Packard Company. . . . . . . . . . . . . . . . .
73,500 7,694,531
(A designer and manufacturer of precision
electronic products.)
Cisco Systems Inc.*. . . . . . . . . . . . . . . . . . .
20,000 1,242,500
(The leading supplier
of high-performance internet-working products.)
8,937,031
Household Products Industry 8.93%
Procter & Gamble Company . . . . . . . . . . . . . . . .
50,000 4,525,000
(#1 manufacturer of
household products in the U.S. and the world's largest advertiser.)
Colgate Palmolive Company. . . . . . . . . . . . . . . .
84,000 4,147,500
(2nd largest domestic
maker of detergents, toiletries and other household products.)
8,672,500
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
<C>
Market
Description of Security Shares
Value
Electronic Equipment Industry 6.73%
General Electric Company . . . . . . . . . . . . . . . . 60,000
$ 6,540,000
(One of the largest
and most diversified industrial companies in the world.)
Drug Industry 5.38%
Amgen Inc. . . . . . . . . . . . . . . . . . . . . . . . 68,000
5,227,500
(Utilizes
biotechnology to develop human pharmaceutical products.)
Semiconductor Industry 5.22%
Intel Corp. . . . . . . . . . . . . . . . . . . . . . . 60,000
4,140,000
(A leading
manufacturer of integrated circuits.)
Micron Technology Inc.*. . . . . . . . . . . . . . . . . 15,000
931,875
(Manufactures
semiconductor components used in the computer, telecommunications,
and office automation industries.)
5,071,875
Aluminum Industry 4.93%
Alcoa Inc. . . . . . . . . . . . . . . . . . . . . . . . 80,000
4,790,000
(The world's largest
aluminum producer.)
Petroleum (Integrated) Industry 4.63%
Texaco Inc. . . . . . . . . . . . . . . . . . . . . . . 72,200
4,498,963
(A major integrated
international oil company.)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>
<C> <C>
Market
Description of Security Shares
Value
Telecommunications Services Industry 3.74%
AT&T Corp. . . . . . . . . . . . . . . . . . . . . . . . 70,000
$ 3,635,625
(Operates in the global telecommunications and information
management industry.)
Machine Industry 3.62%
Caterpillar, Inc.. . . . . . . . . . . . . . . . . . . . 60,000
3,517,500
(The world's largest producer of earthmoving equipment.)
Insurance Industry 3.31%
Equitable Companies, Inc. (The). . . . . . . . . . . . . 50,000
3,212,500
(Parent holding company of the Equitable Life Assurance Society of
the United States.)
Financial Services Industry 2.75%
Citigroup Inc. . . . . . . . . . . . . . . . . . . . . . 60,000
2,673,750
(A diversified financial services company.)
Precision Instrument Industry 2.14%
Eastman Kodak, Co. . . . . . . . . . . . . . . . . . . . 30,000
2,073,750
(The world's largest producer of photographic products.)
Oilfield Services Industry 1.90%
Schlumberger Limited . . . . . . . . . . . . . . . . . .
30,500 1,847,156
(Operates in two segments: oilfield services, measurement &
systems.)
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
<S>
. . . . . . . <C>
<C>
Market
Description of Security
Shares/Face
Value
Steel (Integrated) Industry 1.76%
USX - U.S. Steel Group . . . . . . . . . . . . . . . . .
66,000 $ 1,711,875
(The largest U.S. steelmaker.)
Auto Industry 1.51%
General Motors Corp. . . . . . . . . . . . . . . . . . .
20,000 1,218,750
(The world's largest auto manufacturer.)
Delphi Automotive Systems Corp. . . . . . . . . . . . .
13,978 251,604
(A supplier of components, integrated systems and modules to the
automotive Industry.)
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,470,354
Telecommunications Equipment Industry 1.34%
Lucent Technologies Inc. . . . . . . . . . . . . . . . .
20,000 1,301,250
(One of the world's leading designers, developers and
manufacturers of telecommunications systems, software and
products.)
Paper & Forest Products Industry 1.13%
Fort James Corp. . . . . . . . . . . . . . . . . . . . .
30,000 1,095,000
(The second largest paper goods producer in the United States.)
Building Materials Industry 1.12%
Ameron International Inc. . . . . . . . . . . . . . .
25,500 1,085,344
(The largest supplier of high-performance marine and offshore
coatings in the U.S.)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S>
<C>
<C>
Market
Description of Security
Shares/Face
Value
Food Industry 0.29%
Fresh Del Monte Produce Inc.* . . . . . . . . . . . . . 20,000
$ 283,750
(Produces, distributes and markets fresh produce.)
Total Common Stocks (cost $63,893,510) (87.08%). . . . . . . .
84,592,041
U.S. GOVERNMENT OBLIGATIONS 0.69%
U.S. Treasury Bond, 6.00%, 02/15/26 . . . . . . . . . .
673,204
Total U.S. Government Obligations (cost $715,812). . .
. . . . 673,204
MONEY MARKET INSTRUMENTS 10.33%
LIR Government Money Fund, (cost $10,035,189). . . . . .
10,035,189
Total Money Market Instruments (cost $10,035,189) . . . . . .
10,035,189
Total Investments, at Value (cost $74,644,511). . . . . . . .
98.10% 95,300,434
Cash and Receivables, Less Liabilities . . . . . . . . . 1.90%
1,841,659
Net Assets . . . . . . . . . . . . . . . . . . . . . . .
100.00% $ 97,142,093
</TABLE>
<PAGE>
Financial Statements
<TABLE>
<CAPTION>
<S>. . . . . . . . . . . . . . . . . . . . . . . . . . .
<C>
AMERICAN GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES, JULY 31, 1999
ASSETS:
Investments, at value (cost $74,644,511)-see accompanying
statement . . . . . . . . $ 95,300,434
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,835,585
Receivables:
Shares of
beneficial interest sold . . . . . . . . . . . . .
15,783
Dividends. .
. . . . . . 100,098
Interest . . . . . . 59,473
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . .
98,311,373
LIABILITIES:
Shares of beneficial interest redeemed. . . . . . . . . . . . .
222,855
Investments Purchased . . . . . . . . . . . . . . . . . . . . .
946,425
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 97,142,093
COMPOSITION OF NET ASSETS:
Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . .
$ 72,886,825
Accumulated net realized gain from investment transactions. . . .
. . . . 3,599,345
Net unrealized appreciation of investments. . . . . . . . . . .
20,655,923
Net assets. . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 97,142,093
NET ASSET VALUE PER SHARE:
Class A Shares:
Net asset
value and redemption price per share (based on net assets
of $8,635,193
and 902,062 shares of beneficial interest outstanding) . . . . . .
. . $ 9.57
Maximum
offering price per share (net asset value plus sales charge of
5.75% of
offering price) . . . . . . . . $ 10.15
Class B Shares:
Net asset
value, redemption price and offering price per share (based
on net assets
of $11,265,053 and 1,191,841 shares of beneficial interest
outstanding). . . . . . . . $ 9.45
Class C Shares:
Net asset
value, redemption price and offering price per share (based
on net assets
of $3,131,060 and 331,804 shares of beneficial interest
outstanding) . . . . . . $ 9.44
Class D Shares:
Net asset
value and redemption price per share (based on net assets of
$74,110,787
and 7,713,320 shares of beneficial interest outstanding) . . . . .
. . . $ 9.61
Maximum
offering price per share (net asset value plus sales charge of
5.75% of offering price)
. . . . . . . . $ 10.20
</TABLE>
<PAGE>
<PAGE>
Financial Statements
<TABLE>
<CAPTION>
AMERICAN GROWTH FUND, INC.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED JULY 31, 1999
<S>. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
<C>
INVESTMENT INCOME:
Interest . .
. . . $ 971,881
Dividends
(net of $12,912 foreign withholding tax) . . . . . . .
1,000,312
Total investment income . . . . . . . . . . . . . . . . . . . .
1,972,193
EXPENSES:
Investment
advisory fees (Note 5). . . . . . . . . 918,554
Administration expenses (Note 5) . . . . . . . . .
472,411
Transfer
agent, shareholder servicing and data processing fees (Note 4). .
. . . . . . . . 216,882
Custodian
fees (Note 4). . . . . . . . . 137,358
Professional
fees. . . . . . . 30,450
Registration
and filing fees:
Class A
. . . . . . . . . 4,596
Class B
. . . . . . . . . 5,461
Class C
. . . . . . . . . 1,648
Class D
. . . . . . . . . 34,434
Shareholder
reports. . . . . . . . . . . 17,189
Distribution
and service fees:
Class A
. . . . . . . . . 28,917
Class B
. . . . . . . . . 142,192
Class C
. . . . . . . . . 44,323
Directors
fees . . . . . . . . 4,700
Other
expenses . . . . . . . . 64,825
Total expenses. . . . . . . . . . . . . . . . . . . . . . . . .
2,123,940
Less expenses
paid indirectly (Note 4) . . . . . . (94,209)
Net expenses. . . . . . . . . . . . . . . . . . . . . . . . . .
2,029,731
Net Investment Loss. . . . . . . . . . . . . . . . . . . . . . .
(57,538)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized
gain on investments . . . . . . . . . 7,359,974
Net change in
unrealized appreciation on investments . . . . . .
(4,734,232)
Net realized
and unrealized gain . . . . . . . . . 2,625,742
Net Increase in Net Assets Resulting From Operations . . .
. . . $ 2,568,204
</TABLE>
<PAGE>
<PAGE>
Financial Statements
<TABLE> AMERICAN GROWTH FUND, INC.
<CAPTION> STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JULY 31, 1999 AND 1998
<S> <C> <C>
1999 1998
OPERATIONS:
Net investment income (loss). . . . . . . . . . . $
(57,538) $ 637,948
Net realized gain (loss). . . . . . . . . . . . .
7,359,974 (3,209,919)
Net change in unrealized depreciation . . . . . .
(4,734,232) (8,201,493)
Net increase (decrease) in net assets resulting from operations .
. . . . . . . . 2,568,204
(10,773,464)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class A . . . . . . . . . . . . . . . . . . . . .
(56,534) (75,567)
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8,505)
(14,141)
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5,179)
(3,850)
Class D . . . . . . . . . . . . . . . . . .
. . . (474,946)
(790,735)
Book return of capital:
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(48,726)
-
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .
0(7,296)
-
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .
(4,441)
-
Class D .
. . . . . . . . . . . . . . . . . . . . (409,627)
-
Distributions from net realized gain:
Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-
(1,120,917)
Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .
-
(1,258,568)
Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .
-
(342,696)
Class D . . . . . . . . . . . . . . . . . . . . .
- (8,796,922)
BENEFICIAL INTEREST TRANSACTIONS:
Net increase (decrease) in net assets resulting from beneficial
interest transactions (Note 2):
Class A . . . . . . . . . . . . . . . . . . . . .
(5,837,113) 5,962,986
Class B . . . . . . . . . . . . . . . . . .
. . . (4,497,280) 7,163,360
Class C . . . . . . . . . . . . . . . . . . . . .
(1,423,013) 2,200,744
Class D . . . . . . . . . . . . . . . . . . . . .
(16,293,908)
(8,137,343)
NET ASSETS:. . . . . . . . . . . . . . . . . . . .
Total decrease. . . . . . . . . . . . . . . . . .
(26,498,364)
(15,987,113)
Beginning of period . . . . . . . . . . . . . . .
123,640,457 139,627,570
End of period (including undistributed net investment income of $0
and
$331,075
respectively). . . . . . . . . . . . . . $
97,142,093 $ 123,640,457
</TABLE>
<PAGE>
<PAGE>
Financial Highlights
<TABLE>
Class A
<CAPTION>
Year Ended July 31,
<S> <C>
<C> <C> <C>
1999
1998 1997 19966
Per Share Operating Data:
Net Asset Value, Beginning of Period . . . . . .
$9.49 $11.30 $ 8.84 $ 9.21
Income (loss) from investment operations:
Net investment income (loss) . . . . . . . (0.05)
0.044 0.144 -4
Net realized and unrealized gain (loss). . . . . . .
0.21 (0.90) 2.83 (0.37)
Total income (loss) from investment operations . . . . . .
0.16 (0.86) 2.97
(0.37)
Dividends and distributions to shareholders:
Dividends from net investment income . . . . . .
(0.04) (0.06)5 (0.12)5 -
Book return of capital . . . . . . . . . . (0.04)
- - -
Distributions from net realized gain . . . . . .
- (0.89) (0.39) -
Total dividends and distributions
to shareholders. . . . . . . . . . . . . . (0.08)
(0.95) (0.51) -
Net Asset Value, End of Period . . . . . . $9.57
$9.49 $11.30 $8.84
Total Return at Net Asset Value1 . . . . . . . .
2.0% (7.6)% 34.6% (4.0)%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) . . . . . .
$8,635 $14,246 $10,536 $3,838
Ratios to average net assets:
Net investment income (loss).. . . . . . . 0.00%
0.42% 1.28% 0.13%
Expenses2. . . . . . . . . . . . . . . . . 1.98%
1.77% 1.76% 2.06%
Portfolio turnover rate3 . . . . . . . . . 109.3%
103.5% 106.2% 163.1%
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.
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, 1999, aggregated $115,980,505 and $159,871,400,
respectively.
4. Net investment income (loss) per share is based upon relative
daily net asset values.
5. Distributions from net investment income per share are based
upon relative net asset values as of the business day following the
distribution record date.
6. For the period from March 1, 1996 (inception of offering) to
July 31, 1996.
</TABLE>
<PAGE>
Financial Highlights
<TABLE> Class B
<CAPTION>
Year Ended July 31,
<S> <C>
<C> <C> <C>
1999
1998 1997 19966
Per Share Operating Data:
Net Asset Value, Beginning of Period . . . . . .
$9.37 $11.19 $ 8.80 $9.21
Income (loss) from investment operations:
Net investment loss. . . . . . . . . . . . (0.13)
(0.02)4 0.074 (0.01)4
Net realized and unrealized gain (loss). . . . . . .
0.22 (0.90) 2.79 (0.40)
Total income (loss) from investment operations . . . . . .
0.09 (0.92) 2.86
(0.41)
Dividends and distributions to shareholders:
Dividends from net investment income . . . . . .
(0.01) (0.01)5 (0.09)5 -
Book return of capital . . . . . . . . . . -7
- - -
Distributions from net realized gain . . . . . .
- (0.89) (0.39)
-
Total dividends and distributions
to shareholders. . . . . . . . . . . . . . (0.01)
(0.90) (0.48) -
Net Asset Value, End of Period . . . . . . $9.45
$9.37 $11.18 $8.80
Total Return at Net Asset Value1 . . . . . . . .
0.9% (8.2)% 33.5% (4.5)%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) . . . . . .
$11,265 $15,533 $10,962 $3,417
Ratios to average net assets:
Net investment income (loss).. . . . . . . (0.01)%
(0.32)% 0.49% (0.52)%
Expenses2. . . . . . . . . . . . . . . . . 2.73%
2.52% 2.46% 2.81%
Portfolio turnover rate3 . . . . . . . . . 109.3%
103.5% 106.2% 163.1%
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.
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, 1999, aggregated $115,980,505 and $159,871,400,
respectively.
4. Net investment income (loss) per share is based upon relative
daily net asset values.
5. Distributions from net investment income per share are based
upon relative net asset values as of the business day following the
distribution record date.
6. For the period from March 1, 1996 (inception of offering) to
July 31, 1996.
7. Less than $0.005 per share.
</TABLE>
<PAGE>
Financial Highlights
<TABLE>
<CAPTION> Class C
Year Ended July 31,
<S> <C>
<C> <C> <C>
1999
1998 1997 19966
Per Share Operating Data:
Net Asset Value, Beginning of Period . . . . . .
$9.37 $11.19 $ 8.81 $ 9.21
Income (loss) from investment operations:
Net investment income (loss) . . . . . . . (0.14)
(0.02)4 0.074 -4
Net realized and unrealized gain (loss). . . . . . .
0.23 (0.90) 2.79 (0.40)
Total income (loss) from investment operations . . . . . .
0.09 (0.92) 2.86
(0.40)
Dividends and distributions to shareholders:
Dividends from net investment income . . . . . .
(0.01) (0.01)5 (0.09)5 -
Book return of capital . . . . . . . . . . (0.01)
- - -
Distributions from net realized gain . . . . . .
- (0.89) (0.39) -
Total dividends and distributions
to shareholders. . . . . . . . . . . . . . (0.02)
(0.90) (0.48) -
Net Asset Value, End of Period . . . . . . $9.44
$9.37 $11.19 $8.81
Total Return at Net Asset Value1 . . . . . . . .
0.9% (8.2)% 33.6% (4.3)%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) . . . . . .
$3,131 $4,498 $3,023 $367
Ratios to average net assets:
Net investment income (loss).. . . . . . . (0.01)%
(0.31)% 0.55% (0.63)%
Expenses2. . . . . . . . . . . . . . . . . 2.75%
2.52% 2.50% 2.97%
Portfolio turnover rate3 . . . . . . . . . 109.3%
103.5% 106.2% 163.1%
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.
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, 1999, aggregated $115,980,505 and $159,871,400,
respectively.
4. Net investment income (loss) per share is based upon relative
daily net asset values.
5. Distributions from net investment income per share are based
upon relative net asset values as of the business day following the
distribution record date.
6. For the period from March 1, 1996 (inception of offering) to
July 31, 1996.
</TABLE>
<PAGE>
Financial Highlights
<TABLE>
<CAPTION> Class D
Year Ended July 31,
<S> <C> <C>
<C> <C> <C>
1999 1998
1997 1996 1995
Per Share Operating Data:
Net Asset Value, Beginning of Period . . . . . . $9.53
$11.33 $ 8.85 $ 8.75 $ 9.34
Income from investment operations:
Net investment income. . . . . . . . . . . 0.01 0.074
0.174 0.034 0.21
Net realized and unrealized gain (loss). . . . . . . 0.17
(0.90) 2.82 0.39 0.88
Total income (loss) from investment operations . . . . . .
0.18 (0.83) 2.99 0.42
1.09
Dividends and distributions to shareholders:
Dividends from net investment income . . . . . . (0.05)
(0.08)5 (0.12)5 (0.12)5 (0.12)
Book return of capital . . . . . . . . . . (0.05) -
- - -
Distributions from net realized gain . . . . . . -
(0.89) (0.39) (0.20)
(1.56)
Total dividends and distributions
to shareholders. . . . . . . . . . . . . . (0.10) (0.97)
(0.51) (0.32) (1.68)
Net Asset Value, End of Period . . . . . . $9.61 $9.53
$11.33 $8.85 $8.75
Total Return at Net Asset Value1 . . . . . . . . 1.9%
(7.4)% 35.1% 4.8% 15.2%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) . . . . . . $74,111
$89,364 $115,106 $100,130 $90,538
Ratios to average net assets:
Net investment income. . . . . . . . . . . 0.14% 0.63%
1.71% 0.47% 1.91%
Expenses2. . . . . . . . . . . . . . . . . 1.72% 1.54%
1.55% 1.63% 1.45%
Portfolio turnover rate3 . . . . . . . . . 109.3% 103.5%
106.2% 163.1% 173.0%
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.
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, 1999, aggregated $115,980,505 and $159,871,400,
respectively.
4. Net investment income (loss) per share is based upon relative
daily net asset values.
5. Distributions from net investment income per share are based
upon relative net asset values as of the business day following the
distribution record date.
</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.
The Fund adjusts the classification of distributions to
shareholders to reflect the differences between financial statement
amounts and distributions determined in accordance with
income tax regulations. Accordingly, during the year ended July 31,
1999, amounts have been reclassified to reflect a decrease in
accumulated net investment loss of $271,627 a decrease in
accumulated net realized gain from investment transactions of
$246,660 and a decrease in paid-in capital of $24,967.
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:
<TABLE>
<CAPTION>
Year Ended July 31, 1999
Year Ended July 31, 1998
<S>
<C> <C> <C> <C>
Shares Amount
Shares
Amount
Class A:
Sold 253,536 $ 2,388,808
837,941 $ 8,739,433
Dividends and
distributions reinvested 10,544
98,900 124,601
1,193,679
Redeemed (863,218) (8,324,821)
(393,818) (3,970,124)
Net increase (decrease) (599,138)
$ (5,837,113) 568,724
$ 5,962,988
Class B:
Sold 171,341 $ 1,617,151
843,318 $ 8,810,905
Dividends and
distributions reinvested 1,577
14,680 129,536
1,231,569
Redeemed (639,257) (6,129,111)
(294,805) (2,879,114)
Net increase (decrease) (466,339)
$ (4,497,280) 678,049
$ 7,163,360
Class C:
Sold 72,340 $ 690,740
218,226 $ 2,295,012
Dividends and
distributions reinvested 780
7,253 35,910
341,141
Redeemed (221,264) (2,121,006)
(44,447) (435,409)
Net increase (decrease) (148,144)
$ (1,423,013) 209,689
$ 2,200,744
Class D:
Sold 159,048 $ 1,506,344
394,322 $ 4,226,052
Dividends and
distributions reinvested 85,582
805,335 969,644
9,308,601
Redeemed (1,913,434) (18,605,587)
(2,144,192)
(21,671,996)
Net decrease (1,668,804) $(16,293,908)
(780,226) $ (8,137,343)
</TABLE>
3. Unrealized Gains and Losses on Investments
The identified tax cost basis of investments at July
31, 1999 was $74,644,511. Net unrealized appreciation on
investments of
$20,655,923, based on identified tax cost as of July 31,
1999, was comprised of gross appreciation of $22,985,947 and gross
depreciation of $2,330,024.
4. Fund Expenses Paid Indirectly
For the year ended July 31, 1999, fees for transfer
agent/data processing services and custodian services totaling
$28,377 and
$65,832, 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 and 0.75% of such
assets
in
<PAGE>
<PAGE>
Notes to Financial Statements
excess of $30 million. The Fund pays its own operating
expenses.
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, 1999 commissions and sales
charges paid by investors on the purchase of Fund shares totaled
$181,649 of which $45,545 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 $72,264. For the year
ended July 31, 1999, Sponsors received contingent deferred sales
charges of $37,273 upon redemption of Class B and C shares,
as reimbursement for sales commissions advanced by Sponsors
upon the sale of such shares.
The Fund paid $260,228 to Sponsors for brokerage commission
on securities transactions.
Certain officers of the Fund are also officers of
Sponsors and IRC. For the year ended July 31, 1999 the Fund paid
directors' fees
and expenses of $4,700.
For the year ended July 31, 1999, under an agreement
with IRC, the Fund was charged $310,686 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
$76,932 by an affiliated company of IRC for the rental of
office space.
6. Federal Income Tax Matters (unaudited)
On December 2, 1998, per share dividends from net
investment income and in excess of net investment income were
declared
as follows: Class A: $0.08, Class B: $0.01, Class C: $0.02
and Class D: $0.10 respectively. The dividends were paid December
18,
1998. For the Fund's year ended July 31, 1999, all ordinary
income dividends have been determined to qualify for the dividends
received deduction for corporate shareholders.
<PAGE>
<PAGE>
Independent Auditors' Report
To The Board of Directors and Shareholders
of American Growth Fund, Inc.:
We have audited the accompanying statement of assets and
liabilities of American Growth Fund, Inc., including the
statement of investments, as of July 31, 1999, and the related
statement of operations for the year then ended, the
statement of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights
for each of the years in the four-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 the year ended July 31,1995 were audited by other
auditors, whose report dated August 18, 1995 expressed an
unqualified opinion on those financial highlights.
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, 1999,
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,
1999, the results of its operations for the year then
ended, the changes in its net assets for each of the years in the
two-year period then ended, and the financial highlights
for each of the years in the four-year period then ended, in
conformity with generally accepted accounting principles.
KPMG LLP
Denver, Colorado
August 27, 1999
<PAGE>
TRANSFER AGENT: Boston Financial Data Services, Inc., Two Heritage
Drive, North Quincy, MA 02171
CUSTODIAN: State Street Bank & Trust Company, Two Heritage Drive,
North Quincy, MA 02171
RETIREMENT PLAN CUSTODIAN: State Street Bank & Trust Company, Two
Heritage Drive, North Quincy, MA 02171
INDEPENDENT AUDITORS: KPMG LLP, 707 Seventeenth Street, Suite 2300,
Denver, CO 80202
UNDERWRITER/DISTRIBUTOR: American Growth Fund Sponsors, Inc., 110
Sixteenth Street, Suite 1400, Denver, CO 80202
AMERICAN GROWTH FUND, INC. BOARD OF ADVISORS:
William D. Farr
President and Director of Farr Farms Co.
Chairman of the Board of Northern Colorado Water Conservancy
Past President of the National Cattleman's Association
Board Member of the Greeley Water Board
OFFICERS AND DIRECTORS INVESTMENT ADVISOR
Robert Brody President and Director Investment
Research Corporation
Timothy E. Taggart Exectutive Vice President 110
Sixteenth Street, Suite 1400
D. Leann Baird Secretary Denver, CO 80202
Michael J. Baum Director OFFICERS AND DIRECTORS
Eddie R. Bush Director Robert Brody
President, Treasurer, and Director
Harold Rosen Director Timothy E. Taggart
Executive Vice President and Director
D. Leann Baird Secretary
and Director
