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SIGNATURE BRENDA T. KOELEMAY
TITLE VP/TREASURER
[DESCRIPTION] REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS ON INTERNAL CONTROL STRUCTURE
The Board of Directors
American National Funds Group
Galveston, Texas
In planning and performing our audits of the financial statements of American
National Growth Fund, American National Income Fund, and Triflex Fund for the
year ended December 31, 1997, we considered their internal control structure,
including procedures for safeguarding securities, in order to determine our
auditing procedures for the purpose of expressing our opinion on the financial
statements and to comply with the requirements of Form N-SAR, not to provide
assurance on the internal control structure.
The management of the Funds is responsible for
establishing and maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgments by management are required to assess
the expected benefits and related costs of internal control structure policies
and procedures. Two of the objectives of an internal control structure are to
provide management with reasonable, but not absolute, assurance that assets
are safeguarded against loss from unauthorized use or disposition and that
the transactions are executed in accordance with management's authorization
and recorded properly to permit preparation of financial statements in
conformity with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk that it
may become inadequate because of changes in conditions or that the effectiveness
of the design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of
Certified Public Accountants. A material weakness is a condition in which
the design or operation of the specific internal control structure elements does
not reduce to a relatively low level the risk that errors or irregularities in
amounts that would be material in relation to the financial statements being
audited may occur and not be detected within a timely period by employees in
the normal course of performing their assigned functions. However, we
noted no matters involving the internal control structure, including
procedures for safeguarding securities, that we consider to be material
weaknesses as defined above as of December 31, 1997.
This report is intended solely for the use of management and the Securities
and Exchange Commission.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
January 30, 1998
[DESCRIPTION] SUB-ITEM 77K: Changes in registrant's certifying accountant
Effective November 20, 1997, the Registrant's Board of Directors selected the
accounting firm of Tait, Weller & Baker to serve as the Registrant's
independent certified public accountants for the fiscal year ended December 31,
1997 to fill a vacancy in such position in accordance with Section 32(a)(2) of
the Investment Company Act of 1940 resulting from KPMG Peat Marwick LLP's resig-
nation on November 19, 1997. KPMG Peat Marwick LLP has served as the
Registrant's independent certified public accountants for each of the
Registrant's prior two years ended December 31, 1996. KPMG Peat Marwick LLP's
reports on the financial statements of the Registrant for each of the two years
in the period ended December 31, 1996 did not contain an adverse opinion or
disclaimer of opinion or were not qualified or modified as to uncertainty, audit
scope or accounting principles. There were no disagreements with KPMG Peat
Marwick LLP on any matter of accounting principles or practices. Financial
statement disclosure, or auditing scope of procedure during each of the two
years in the period ended December 31, 1996 or the interim period from January
1, 1997 through the date of their resignation.
February 28, 1998
Securities and Exchange Commission
Washington, DC 20549
Ladies and Gentlemen:
We were previously principal accountants for American National Funds Group and,
under the date of February 7, 1997, we reported on the financial statements of
American National Funds Group as of and for the two years ended December 31,
1996. On November 19, 1997, we resigned. We have read American National Funds
Group's statements as included under Sub-Item 77K of Form N-SAR dated February
28, 1998, and we agree with such statements.
Very truly yours,
KPMG PEAT MARWICK LLP
[ARTICLE] 6
[CIK] 0000005529
[NAME] AMERICAN NATIONAL GROWTH FUND, INC.
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] DEC-31-1997
[PERIOD-END] DEC-31-1997
[INVESTMENTS-AT-COST] 134,426,054
[INVESTMENTS-AT-VALUE] 178,172,448
[RECEIVABLES] 202,862
[ASSETS-OTHER] 127,708
[OTHER-ITEMS-ASSETS] 3,660
[TOTAL-ASSETS] 178,506,678
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 162,590
[TOTAL-LIABILITIES] 162,590
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 95,622,905
[SHARES-COMMON-STOCK] 34,031,575
[SHARES-COMMON-PRIOR] 30,871,421
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 4,943,214
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 43,746,394
[NET-ASSETS] 178,344,088
[DIVIDEND-INCOME] 2,654,015
[INTEREST-INCOME] 703,446
[OTHER-INCOME] 0
[EXPENSES-NET] 1,616,097
[NET-INVESTMENT-INCOME] 1,741,364
[REALIZED-GAINS-CURRENT] 24,950,387
[APPREC-INCREASE-CURRENT] 6,796,148
[NET-CHANGE-FROM-OPS] 33,487,899
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 1,757,095
[DISTRIBUTIONS-OF-GAINS] 21,864,218
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 2,618,034
[NUMBER-OF-SHARES-REDEEMED] 3,923,677
[SHARES-REINVESTED] 4,465,797
[NET-CHANGE-IN-ASSETS] 25,585,791
[ACCUMULATED-NII-PRIOR] 685,115
[ACCUMULATED-GAINS-PRIOR] 1,839,080
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 1,011,542
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,616,097
[AVERAGE-NET-ASSETS] 168,794,677
[PER-SHARE-NAV-BEGIN] 4.95
[PER-SHARE-NII] .06
[PER-SHARE-GAIN-APPREC] 1.03
[PER-SHARE-DIVIDEND] .06
[PER-SHARE-DISTRIBUTIONS] .74
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 5.24
[EXPENSE-RATIO] 1.03
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0.0
</TABLE>
