Dear Shareholder:
Our portfolio in the last six months and the last year has been
positioned to take advantage of the stock market. Your portfolio
has substantially out performed the Dow Jones Industrials in
both these time periods.
<TABLE>
<CAPTION>
<S> <C> <C>
DJIA AGF
1 Month +6.59 +16.89%
Quarter +6.58 +20.39%
1 Year: +3.56 +11.82%
</TABLE>
Fund and DJIA performance data: 8/31/00. AGF numbers listed
above are for Class D only.
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 the companies that have
done best for you in the last year are;
1. Intel Corp. Produces microcomputer components and related
products. It manufactures microprocessors, which the
company markets under the Pentium, Pentium Pro, Pentium II,
Pentium III, Xeon, and Celeron trademarks in the United
States and abroad.
2. Cisco Systems, Inc. The worldwide leader in networking for
the Internet.
3. EMC Corp. EMC Corporation designs, manufactures, markets
and supports a wide range of storage-related hardware,
software and service products for the open systems,
mainframe and network attached information storage and
retrieval system market.
4. AXA Financial, Inc. The parent holding company of the
Equitable Life Assurance Society of the U.S.
5. Amgen This leading biotechnology companys key products
are Epogen and Neupogen, genetically engineered versions of
natural hormones that stimulate production of blood
components.
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 42 years and you have benefitted as a result.
My staff and I are always available to discuss your account with
you, so please give us a call toll free at 800-525-2406.
American Growth Fund wishes you A Good Future!
Sincerely
Robert Brody
<PAGE>
How American Growth Fund Has Its Shareholders' Money Invested
AMERICAN GROWTH FUND, INC.
STATEMENT OF INVESTMENTS
July 31, 2000
<TABLE>
<CAPTION>
<S> <C> <C>
Market
Description of Security Shares Value
-----------------------------------------------------------------
COMMON STOCKS 98.55%
Computer & Peripherals Industry 25.30%
Hewlett Packard Company....................73,500 $8,025,281
(A designer and manufacturer of precision electronic
products.)
EMC Corp.*.................................80,000 6,810,000
(Designs, manufactures, markets, and supports high
performance storage products for selected mainframe and
open computing systems .)
Compaq Computer Corp. ....................159,648 4,480,122
(The second largest computer company in the world.)
19,315,403
Semiconductor Industry 22.73%
Intel Corp. ..............................120,000 8,010,000
(A leading manufacturer of integrated circuits.)
Motorola Inc. ............................105,000 3,471,563
(A leading manufacturer of electronic equipment and
components.)
Integrated Device Technology*..............60,000 3,180,000
(Produces digital integrated circuits .)
Texas Instruments, Inc. ...................46,000 2,699,625
(The leading supplier of digital signal processors and
analog devices.)
17,361,188
Biotechnology Industry 13.20%
Amgen Inc.*................................96,000 6,234,000
(Utilizes biotechnology to develop human pharmaceutical
products.)
Biogen Inc.*...............................45,000 2,385,000
(A leading biotechnology company.)
Curagen Corp.*.............................42,000 1,456,875
(An integrated genomics based drug discovery and development
company.)
10,075,875
*Non income producing security
See accompanying notes to financial statements
<PAGE>
How American Growth Fund Has Its Shareholders' Money Invested
Market
Description of Security Shares Value
-----------------------------------------------------------------
Semiconductor Capital Equipment 8.49%
Applied Materials, Inc.*...................37,000 $2,807,375
(Produces semiconductor water fabrication equipment.)
Novellus Systems, Inc.*....................40,000 2,157,500
(Designs, manufactures, markets and services equipment used
in the fabrication of integrated circuits.)
Teradyne, Inc.*............................24,000 1,521,000
(The world's largest producer of automated test equipment
for semiconductors.)
6,485,875
Computer Communications Equipment 6.85%
Cisco Systems, Inc.*.......................80,000 5,235,000
(The leading supplier of high -performance inter-networking
products.)
Electronics Industry 4.99%
Solectron Corp.*...........................50,000 2,015,625
(Provides electronic assembly and tumkey manufacturing
management services.)
Symbol Technologies........................45,000 1,794,375
(A leading provider of barcode driven data management
systems.)
3,810,000
Internet Industry 4.19%
America Online*............................60,000 3,198,750
(The leading provider of online information services.)
Computer Software and Services Industry 3.94%
Oracle Corp.*..............................40,000 3,007,500
(The world's largest maker of database management systems.)
*Non income producing security
See accompanying notes to financial statements
<PAGE>
How American Growth Fund Has Its Shareholders' Money Invested
Market
Description of Security Shares Value
-----------------------------------------------------------------
Insurance Industry 3.38%
AXA Financial, Inc. .......................67,500 $2,581,875
(The parent holding company of the Equitable Life Assurance
Society of the U.S.)
Wireless Networking Industry 2.26%
Network Appliance, Inc.*...................20,000 1,723,750
(The leading supplier of network attached data storage and
access devices, called filers.)
Precision Instrument Industry 1.49%
Agilent Technologies, Inc.*................28,032 1,142,304
(A global leader in designing and manufacturing
semiconductor and test solutions for optical, electrical and
wireless communications systems.)
Industrial Services 1.39%
CSG Systems International, Inc.* ..........20,000 1,063,750
(Provides customer services and billing solutions for cable
television and direct broadcast satellite providers.)
Building Materials Industry 0.34%
Ameron International Corporation............6,900 258,750
(The largest supplier of high-performance marine and
offshore coatings in the U.S.)
Total Common Stocks (cost $66,170,551) (98.55%) 75,260,020
Total Investments, at Value (cost $66,170,551) 98.55% 75,260,020
Cash and Receivables, Less Liabilities 1.45% 1,108,328
Net Assets 100.00% $76,368,348
</TABLE>
*Non income producing security
See accompanying notes to financial statements
<PAGE>
Financial Statements
AMERICAN GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES, JULY 31, 2000
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments, at value (cost $66,170,551)-see
accompanying statement...........................$75,260,020
Cash....................................................1,323,912
Receivables:
Shares of beneficial interest sold....................17,318
Dividends..............................................3,185
Total assets...........................................76,604,435
LIABILITIES:
Shares of beneficial interest redeemed....................236,087
NET ASSETS............................................$76,368,348
COMPOSITION OF NET ASSETS:
Paid-in capital.......................................$57,101,949
Accumulated net realized gain from investment
transactions......................................10,176,930
Net unrealized appreciation of investments..............9,089,469
Net assets............................................$76,368,348
NET ASSET VALUE PER SHARE:
Class A Shares:
Net asset value and redemption price per share
(based on net assets of $5,622,214 and 632,864
shares of beneficial interest outstanding)..............$8.88
Maximum offering price per share (net asset
value plus sales charge of 5.75% of offering
price)..................................................$9.42
Class B Shares:
Net asset value, redemption price and offering
price per share (based on net assets of
$7,027,199 and 808,177 shares of beneficial
interest outstanding)...................................$8.70
Class C Shares:
Net asset value, redemption price and offering
price per share (based on net assets of
$1,901,509 and 218,974 shares of beneficial
interest outstanding)...................................$8.68
Class D Shares:
Net asset value and redemption price per share
(based on net assets of $61,817,426 and
6,912,094 shares of beneficial interest
outstanding)............................................$8.94
Maximum offering price per share (net asset
value plus sales charge of 5.75% of offering
price)..................................................$9.49
See accompanying notes to financial statements
</TABLE>
<PAGE>
Financial Statements
AMERICAN GROWTH FUND, INC.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED JULY 31, 2000
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Interest...........................................$322,654
Dividends (net of $3,451 foreign withholding tax)...701,629
Total investment income................................1,024,283
EXPENSES:
Investment advisory fees (Note 5)........................755,510
Administration expenses (Note 5).........................458,682
Transfer agent, shareholder servicing and data
processing fees.....................................260,068
Custodian fees (Note 4)..................................117,034
Professional fees.........................................29,151
Registration and filing fees:
Class A...............................................5,724
Class B...............................................7,541
Class C...............................................2,125
Class D..............................................56,211
Shareholder reports.......................................21,554
Distribution and service fees:
Class A..............................................17,692
Class B..............................................92,321
Class C..............................................25,302
Directors fees.............................................5,100
Other expenses............................................63,664
Total expenses....................................1,917,679
Less expenses paid indirectly (Note 4).............(112,067)
Net expenses......................................1,805,612
Net Investment Loss.....................................(781,329)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments......................12,381,829
Net decrease in unrealized appreciation on
investments.....................................(11,566,454)
Net realized and unrealized gain.........................815,375
Net increase in net assets resulting from operations.....$34,046
See accompanying notes to financial statements
</TABLE>
<PAGE>
Financial Statements
AMERICAN GROWTH FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
Year Ended Year Ended
July 31, 2000 July 31, 1999
OPERATIONS:
Net investment loss................$(781,329) $(57,538)
Net realized gain.................12,381,829 7,359,974
Net change in unrealized
appreciation or depreciation.....(11,566,454) (4,734,232)
Net increase in net assets
resulting from operations.............34,046 2,568,204
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class A....................................- (56,534)
Class B....................................- (8,505)
Class C....................................- (5,179)
Class D....................................- (474,946)
Book return of capital:
Class A....................................- (48,726)
Class B....................................- (7,296)
Class C....................................- (4,441)
Class D....................................- (409,627)
Distributions from net realized gain:
Class A.............................(427,882) -
Class B.............................(594,134) -
Class C.............................(160,199) -
Class D...........................(4,352,059) -
BENEFICIAL INTEREST TRANSACTIONS:
Net decrease in net assets resulting from beneficial
interest transactions(Note 2):
Class A...........................(2,672,807) (5,837,113)
Class B...........................(3,727,935) (4,497,280)
Class C...........................(1,091,123) (1,423,013)
Class D...........................(7,781,652) (16,293,908)
NET ASSETS:
Total decrease...................(20,773,745) (26,498,364)
Beginning of period...............97,142,093 123,640,457
End of period....................$76,368,348 $97,142,093
See accompanying notes to financial statements
</TABLE>
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Class A
Year Ended July 31,
2000 1999 1998 1997 19966
Per Share Operating Data:
Net Asset Value,
Beginning of Period $9.57 $9.49 $11.30 $8.84 $9.21
----------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income (loss)..(0.10) (0.05) 0.044 0.144 -4
Net realized and unrealized
gain (loss)....................0.01 0.21 (0.90) 2.83 (0.37)
Total income (loss) from
investment operations.........(0.09) 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..........................(0.60) - (0.89) (0.39) -
Total dividends and
distributions to
shareholders..................(0.60) (0.08) (0.95) (0.51) -
----------------------------------------------------------------
Net Asset Value, End of
Period........................$8.88 $9.57 $9.49 $11.30 $8.84
----------------------------------------------------------------
Total Return at Net Asset
Value1........................(1.6)% 2.0% (7.6)% 34.6% (4.0)%
Ratios/Supplemental Data:
Net assets, end of period
(in thousands)...............$5,622 $8,635$14,246$10,536 $3,838
----------------------------------------------------------------
Ratio to average net assets:
Net investment income
(loss) (0.97)% 0.00% 0.42% 1.28% 0.13%7
Expenses2......................2.28% 1.98% 1.77% 1.76% 2.06%7
----------------------------------------------------------------
Portfolio Turnover Rate3......106.7% 109.3% 103.5% 106.2% 163.1%
</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. 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 year ended July 31, 2000, aggregated
$87,171,940 and $97,992,466, respectively.
4. Net investment income (loss) per share is based upon relative
daily net asset values.
5. Dividends 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. Annualized.
See accompanying notes to financial statements
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Class B
Year Ended July 31,
2000 1999 1998 1997 19966
Per Share Operating Data:
Net Asset Value,
Beginning of Period...........$9.45 $9.37 $11.18 $8.80 $9.21
----------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income (loss)..(0.19) (0.13) (0.01)4 0.074(0.01)4
Net realized and unrealized
gain (loss)....................0.04 0.22 (0.90) 2.79 (0.40)
Total income (loss) from
investment operations.........(0.15) 0.09 (0.91) 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.................(0.60) - (0.89) (0.39) -
Total dividends and
distributions to
shareholders..................(0.60) (0.01) (0.90) (0.48) -
----------------------------------------------------------------
Net Asset Value, End of
Period........................$8.70 $9.45 $9.37 $11.18 $8.80
----------------------------------------------------------------
Total Return at Net Asset
Value1.........................(2.3)% 0.9% (8.2)% 33.5% (4.5)%
Ratios/Supplemental Data:
Net assets, end of period
(in thousands)...............$7,027 $11,265$15,533$10,962 $3,417
----------------------------------------------------------------
Ratio to average net assets:
Net investment income
(loss).......................(1.73)%(0.01)%(0.32)% 0.49%(0.52)%8
Expenses2......................3.05% 2.73% 2.52% 2.46% 2.81%8
-----------------------------------------------------------------
Portfolio Turnover Rate3......106.7% 109.3% 103.5%106.2% 163.1%
</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. 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 year ended July 31, 2000, aggregated
$87,171,940 and $97,992,466, respectively.
4. Net investment income (loss) per share is based upon relative
daily net asset values.
5. Dividends 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.
8. Annualized.
See accompanying notes to financial statements
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Class C
Year Ended July 31,
2000 1999 1998 1997 19966
Per Share Operating Data:
Net Asset Value,
Beginning of Period...........$9.44 $9.37 $11.19 $8.81 $9.21
----------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income (loss)..(0.19) (0.14) (0.02)4 0.074 -4
Net realized and unrealized
gain (loss) 0.03 0.23 (0.90) 2.79 (0.40)
Total income (loss) from
investment operations.........(0.16) 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.................(0.60) - (0.89) (0.39) -
Total dividends and
distributions to
shareholders..................(0.60) (0.02) (0.90) (0.48) -
----------------------------------------------------------------
Net Asset Value, End of
Period........................$8.68 $9.44 $9.37 $11.19 $8.81
----------------------------------------------------------------
Total Return at Net Asset
Value1........................(2.4)% 0.9% (8.2)% 33.6% (4.3)%
Ratios/Supplemental Data:
Net assets, end of period
(in thousands)...............$1,902 $3,131 $4,498 $3,023 $367
----------------------------------------------------------------
Ratio to average net assets:
Net investment income
(loss)......................(1.72)% (0.01)%(0.31)% 0.55%(0.63)%7
Expenses2.....................3.04% 2.75% 2.52% 2.50% 2.97%7
----------------------------------------------------------------
Portfolio Turnover Rate3.....106.7% 109.3% 103.5%106.2% 163.1%
</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. 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 year ended July 31, 2000, aggregated
$87,171,940 and $97,992,466, respectively.
4. Net investment income (loss) per share is based upon relative
daily net asset values.
5. Dividends 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. Annualized.
See accompanying notes to financial statements
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Class D
Year Ended July 31,
2000 1999 1998 1997 1996
Per Share Operating Data:
Net Asset Value,
Beginning of Period...........$9.61 $9.53 $11.33 $8.85 $8.75
----------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income (loss)..(0.08) 0.01 0.074 0.174 0.034
Net realized and unrealized
gain (loss)....................0.01 0.17 (0.90) 2.82 0.39
Total income (loss) from
investment operations.........(0.07) 0.18 (0.83) 2.99 0.42
----------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net investment
income............................- (0.05)(0.08)5(0.12)5(0.12)5
Book return of capital............- (0.05) - - -
Distributions from net realized
gain..........................(0.60) - (0.89) (0.39) (0.20)
Total dividends and
distributions to
shareholders..................(0.60) (0.10) (0.97) (0.51) (0.32)
----------------------------------------------------------------
Net Asset Value, End of
Period........................$8.94 $9.61 $9.53 $11.33 $8.85
----------------------------------------------------------------
Total Return at Net Asset
Value1........................(1.5)% 1.9% (7.4)% 35.1% 4.8%
Ratios/Supplemental Data:
Net assets, end of period
(in thousands).............$61,817$74,111$89,364$115,106$100,130
----------------------------------------------------------------
Ratio to average net assets:
Net investment income
(loss).......................(0.74)% 0.14% 0.63% 1.71% 0.47%
Expenses2......................2.01% 1.72% 1.54% 1.55% 1.63%
----------------------------------------------------------------
Portfolio Turnover Rate3......106.7% 109.3% 103.5% 106.2% 163.1%
</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. 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 year ended July 31, 2000, aggregated
$87,171,940 and $97,992,466, respectively.
4. Net investment income (loss) per share is based upon relative
daily net asset values.
5. Dividends from net investment income per share are based upon
relative net asset values as of the business day following
the distribution record date.
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.
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, 2000 amounts have been reclassified
to reflect a decrease in accumulated net investment loss of
$781,329, a decrease in accumulated net realized gain from
investment transactions of $269,970, and a decrease in
paid-in capital of $511,359.
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 accounting principles generally accepted
in the United States of America 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>
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>
<S> <C> <C> <C> <C>
Year Ended Year Ended
July 31, 2000 July 31, 1999
Shares Amount Shares Amount
-----------------------------------------------------------------
Class A:
Sold 309,440 $2,994,605 253,536 $2,388,808
Dividends and
distributions
reinvested 39,541 393,433 10,544 98,900
Redeemed (618,179) (6,060,845)(863,218) (8,324,821)
Net decrease (269,198) $(2,672,807)(599,138) $(5,837,113)
-----------------------------------------------------------------
Class B:
Sold 83,985 $787,534 171,341 $1,617,151
Dividends and
distributions
reinvested 55,896 547,221 1,577 14,680
Redeemed (523,545) (5,062,690)(639,257) (6,129,111)
Net decrease (383,664) $(3,727,935)(466,339) $(4,497,280)
-----------------------------------------------------------------
Class C:
Sold 17,565 $162,110 72,340 $690,740
Dividends and
distributions
reinvested 12,719 124,260 780 7,253
Redeemed (143,114) (1,377,493)(221,264) (2,121,006)
Net decrease (112,830) $(1,091,123)(148,144) $(1,423,013)
-----------------------------------------------------------------
Class D:
Sold 133,018 $1,290,807 159,048 $1,506,344
Dividends and
distributions
reinvested 418,490 4,184,893 85,582 805,335
Redeemed (1,352,734) (13,257,352)(1,913,434) (18,605,587)
Net decrease (801,226) $(7,781,652)(1,668,804) $(16,293,908)
</TABLE>
3. Unrealized Gains and Losses on Investments
The identified tax cost basis of investments at July 31,
2000 was $66,541,113. Net unrealized appreciation on
investments of $8,718,907, based on identified tax cost as
of July 31, 2000, was comprised of gross appreciation of
$19,195,773 and gross depreciation of $10,476,866.
4. Fund Expenses Paid Indirectly
For the year ended July 31, 2000, fees for transfer
agent/data processing services and custodian services
totaling $53,088 and $58,979, respectively, were offset by
earnings on cash balances maintained by the Fund at the
custodian financial institution.
5. Underwriting, Investment Advisory Contracts and Service Fees
Under the investment advisory contract with Investment
Research Corporation ("IRC"), the advisor receives annual
compensation for investment advice, computed and paid
monthly, equal to 1% of the first $30 million of the Fund's
average annual net assets and 0.75% of such assets in excess
of $30 million. The Fund pays its own operating expenses.
During the year ended July 31, 2000, the Fund's investment
advisory fees approximated 0.85% of average annual net
assets.
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.
<PAGE>
Notes to Financial Statement
For the year ended July 31, 2000, commissions and sales
charges paid by investors on the purchase of Fund shares
totaled $139,024 of which $47,305 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 $32,892. For the year ended July 31,
2000, Sponsors received contingent deferred sales charges of
$47,791 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 $216,533 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, 2000 the Fund paid directors' fees and expenses of
$5,100.
For the year ended July 31, 2000, under an agreement with
IRC, the Fund was charged $308,125 for the costs and
expenses related to employees of IRC who provided
administrative, clerical and accounting services to the
Fund. In addition, the Fund was charged $71,689 by an
affiliated company of IRC for the rental of office space.
6. Federal Income Tax Matters (unaudited)
On December 9, 1999, per share distributions from the
capital gains were declared as follows: Class A: $0.60,
Class B: $0.60, Class C: $0.60 and Class D: $0.60
respectively. The capital gains were paid December 20,
1999. In early 2001, shareholders will receive information
regarding all dividends and distributions paid to them by
the Fund during calendar 2000. Regulations of the U.S.
Treasury Department require the Fund to report this
information to the Internal Revenue Service.
<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, 2000, 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 five-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.
We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. 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, 2000, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of American Growth Fund, Inc.
as of July 31, 2000, 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 five-year period then
ended, in conformity with accounting principles generally
accepted in the United States of America.
KPMG LLP
Denver, Colorado
September 1, 2000
<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 ADVISOR:
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
Robert Brody President and Director
Timothy E. Taggart Treasurer
D. Leann Baird Secretary
Michael J. Baum Director
Eddie R. Bush Director
Harold Rosen Director
INVESTMENT ADVISOR
Investment Research Corporation
110 Sixteenth Street, Suite 1400
Denver, CO 80202
OFFICERS AND DIRECTORS
Robert Brody President, Treasurer, and Director
Timothy E. Taggart Executive Vice President and
Director
D. Leann Baird Secretary and Director
<PAGE>
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<PAGE>
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<PAGE>
This is what American Growth Fund has done for its investors*
over the last 42 years.
*A conservative, long-term growth mutual fund with income as a
secondary objective.
**The figures in this brochure reflects the performance of the
Funds 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 investors 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.
Period ending 06/30/00.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class DClass D1Class AClass AClass BClass BClassCClassC
withoutwith withoutwith withoutwith withoutwith
load load load load load load load load
1 year 3.3% -2.6% 3.1% -2.8%2 2.4% -2.6%3 2.3% 1.3%4
5 yrs 7.9% 6.6%
10 yrs10.5% 9.8%
15 yrs 9.6% 9.1%
41 yrs10.3% 10.1%
Inception Date: 3/1/96 (not annualized)
27.3% 20.0%2 23.1% 19.1%5 23.0% 23.0%
</TABLE>
The performance figures:
1 Includes a 5.75% sales charge.
2 Includes a 5.75% initial sales charge at the time of purchase.
3 Includes a 5% contingent deferred sales charge at the time of
redemption.
4 Includes a 1% contingent defered sales charge at the time of
redemption.
5 Includes a 4% contingent deferred sales charge at the time of
redemption.
Distributor: American Growth Fund Sponsors, Inc. 110 Sixteenth
Street, Suite 1400, Denver, CO 80202. Phone (800) 525-2406.
9/2000
