<PAGE>
- --------------------------------------------------------------------------------
S E M I - A N N U A L R E P O R T
[LOGO]
AMERICAN
NATIONAL
FUNDS
GROUP
/ / AMERICAN NATIONAL GROWTH
FUND
/ / AMERICAN NATIONAL INCOME
FUND
/ / TRIFLEX FUND
SEMI-ANNUAL REPORT
SIX MONTHS ENDED JUNE 30, 1998
FORM 9092-S
RE-1 6/98
<PAGE>
SCHEDULE OF INVESTMENTS June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
AMERICAN NATIONAL GROWTH FUND
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
<S> <C> <C>
AUTO & TRUCK MANUFACTURERS-- 1.66%
Chrysler Corporation 13,700 $ 772,337
Ford Motor Company 24,800 1,463,200
General Motors Corporation 14,700 982,144
-----------
3,217,681
BANKS--10.23%
Banc One Corporation 38,500 2,148,781
Comerica, Incorporated 45,000 2,981,250
Dime Bancorp, Incorporated 67,000 2,005,813
First Union Corporation 68,000 3,961,000
Morgan (J.P.) & Company 20,000 2,342,500
NationsBank Corporation 40,000 3,060,000
Norwest Corporation 90,000 3,363,750
-----------
19,863,094
BEVERAGES--2.22%
Anheuser-Busch Companies,
Incorporated 37,000 1,745,938
Coca-Cola Company 30,000 2,565,000
-----------
4,310,938
BROADCASTING--1.13%
MediaOne Group, Incorporated* 50,000 2,196,875
CHEMICALS--2.11%
Cabot Corporation 30,000 969,375
Hercules, Incorporated 30,600 1,258,425
Praxair, Incorporated 40,000 1,872,500
-----------
4,100,300
COMMUNICATIONS EQUIPMENT--1.71%
Lucent Technologies, Incorporated 40,000 3,327,500
COMPUTER RELATED--5.10%
COMPAQ Computer Corporation 64,000 1,816,000
Cisco Systems, Incorporated* 25,000 2,301,562
Hewlett-Packard Company 30,000 1,796,250
Stratus Computer, Incorporated* 55,000 1,392,188
Sun Microsystems, Incorporated* 60,000 2,606,250
-----------
9,912,250
COMPUTER SOFTWARE--9.34%
BMC Software, Incorporated* 80,000 4,155,000
First Data Corporation 91,000 3,031,437
MAPICS, Incorporated* 80,000 1,575,000
Microsoft Corporation* 56,000 6,069,000
Network Associates, Incorporated* 22,500 1,077,188
Synopsys, Incorporated* 49,000 2,241,750
-----------
18,149,375
CONSTRUCTION--0.54%
Centex Corporation 27,700 1,045,675
<CAPTION>
COMMON STOCK SHARES VALUE
<S> <C> <C>
COSMETICS & TOILETRIES--2.81%
Procter & Gamble Company 60,000 $ 5,463,750
DIVERSIFIED--1.39%
AlliedSignal, Incorporated 23,000 1,020,625
Coltec Industries, Incorporated* 40,000 795,000
U.S. Industries, Incorporated 36,000 891,000
-----------
2,706,625
DRUGS--1.38%
Merck & Company, Incorporated 20,000 2,675,000
ELECTRICAL EQUIPMENT--3.85%
General Electric Company 63,000 5,733,000
York International Corporation 40,000 1,742,500
-----------
7,475,500
ELECTRONICS/INSTRUMENTS--2.71%
Analog Devices, Incorporated* 57,000 1,400,062
Avnet, Incorporated 40,000 2,187,500
Cypress Semiconductor Corporation* 202,000 1,679,125
-----------
5,266,687
ENVIRONMENTAL--1.44%
Waste Management, Incorporated 80,000 2,800,000
EXPLORATION & DRILLING--0.83%
Global Marine, Incorporated* 32,000 598,000
Tidewater, Incorporated 17,000 561,000
Union Pacific Resources Group,
Incorporated 25,408 446,228
-----------
1,605,228
FINANCIAL SERVICES--4.10%
Associates First Capital
Corporation 6,499 499,610
Countrywide Credit Industries,
Incorporated 44,000 2,233,000
Morgan Stanley, Dean Witter,
Discover and Company 30,000 2,741,250
Reliance Group Holdings,
Incorporated 142,000 2,485,000
-----------
7,958,860
FOOD PRODUCERS--4.21%
IBP, Incorporated 58,000 1,051,250
Interstate Bakeries Corporation 66,000 2,190,375
McCormick & Company, Incorporated 58,000 2,071,690
Tyson Foods, Incorporated 30,000 650,625
Universal Foods Corporation 100,000 2,218,750
-----------
8,182,690
</TABLE>
1
<PAGE>
SCHEDULE OF INVESTMENTS June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
AMERICAN NATIONAL GROWTH FUND, CONTINUED
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
FOOD RETAILERS--2.18%
<S> <C> <C>
Albertson's, Incorporated 40,000 $ 2,072,500
Safeway, Incorporated* 53,000 2,156,437
-----------
4,228,937
FURNITURE & APPLIANCES--0.53%
Whirlpool Corporation 15,000 1,031,250
INSURANCE COMPANIES--1.91%
American General Corporation 20,000 1,423,750
CIGNA Corporation 33,000 2,277,000
-----------
3,700,750
LEISURE TIME--0.73%
Brunswick Corporation 57,000 1,410,750
MACHINERY & EQUIPMENT--2.06%
Flowserve Corporation 47,000 1,157,375
General Signal Corporation 38,800 1,396,800
Pall Corporation 71,000 1,455,500
-----------
4,009,675
MEDICAL PRODUCTS & SUPPLIES--
5.62%
Abbott Laboratories 100,000 4,087,500
Bergen Brunswig Corporation (Class
A) 41,250 1,912,969
Biomet, Incorporated 82,000 2,711,125
Johnson & Johnson 30,000 2,212,500
-----------
10,924,094
MEDICAL SERVICES--4.40%
Advanced Health Corporation* 75,000 412,500
Aetna, Incorporated 23,000 1,750,875
Beckman Coulter, Incorporated 18,000 1,048,500
MedPartners, Incorporated* 50,000 400,000
PacifiCare Health Systems,
Incorporated (Class B)* 30,000 2,651,250
United Healthcare Corporation 36,000 2,286,000
-----------
8,549,125
METALS & MINING--0.68%
Cyprus Amax Minerals Company 40,000 530,000
Kinross Gold Corporation* 240,120 780,390
-----------
1,310,390
NATURAL GAS--1.28%
Enron Corporation 46,000 2,486,875
OIL DOMESTIC--3.74%
Amoco Corporation 50,000 2,081,250
Kerr-McGee Corporation 13,000 752,375
Murphy Oil Corporation 17,000 861,688
Unocal Corporation 100,000 3,575,000
-----------
7,270,313
<CAPTION>
COMMON STOCK SHARES VALUE
<S> <C> <C>
OIL INTERNATIONAL--3.99%
Chevron Corporation 42,000 $ 3,488,625
Societe Nationale Elf Aquitaine
ADR 60,000 4,260,000
-----------
7,748,625
PAPER/FOREST PRODUCTS--0.76%
Caraustar Industries, Incorporated 29,000 837,375
Louisiana-Pacific Corporation 35,000 638,750
-----------
1,476,125
PHOTOGRAPHY/IMAGING--1.26%
Xerox Corporation 24,000 2,439,000
PRINTING/PUBLISHING--0.92%
Banta Corporation 58,000 1,790,750
RESTAURANTS--0.38%
Applebee's International,
Incorporated 33,000 738,375
RETAIL DISCOUNT--2.19%
Toys R Us, Incorporated* 26,000 612,625
Wal-Mart Stores, Incorporated 60,000 3,645,000
-----------
4,257,625
RETAIL GENERAL--1.03%
Federated Department Stores,
Incorporated* 37,000 1,991,063
RETAIL SPECIALTY--1.11%
Officemax, Incorporated* 60,500 998,250
Tiffany & Company 24,000 1,152,000
-----------
2,150,250
SEMICONDUCTORS--1.91%
Intel Corporation 50,000 3,706,250
TELECOM--CELLULAR--1.24%
U S West, Incorporated New 51,365 2,414,155
TELEPHONE--1.62%
Alltel Corporation 47,000 2,185,500
MasTec, Incorporated* 40,000 955,000
-----------
3,140,500
TRUCKING & SHIPPING--0.52%
USFreightways Corporation 31,000 1,018,158
-----------
TOTAL COMMON STOCK--96.82%
(Cost $132,075,624) 188,051,063
-----------
</TABLE>
2
<PAGE>
SCHEDULE OF INVESTMENTS June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
AMERICAN NATIONAL GROWTH FUND, CONTINUED
<TABLE>
<CAPTION>
FACE
COMMERCIAL PAPER AMOUNT VALUE
CHEMICALS--0.94%
<S> <C> <C>
Praxair, Incorporated, 6.07%,
07/02/98 $1,821,000 $ 1,820,693
FOOD PRODUCERS--1.26%
ConAgra, Incorporated, 6.02%,
07/01/98 2,339,000 2,339,000
ConAgra, Incorporated, 6.02%,
07/08/98 108,000 107,874
-----------
2,446,874
STEEL--0.97%
Carpenter Technology, 6.00%,
07/09/98 1,892,000 1,889,475
-----------
TOTAL COMMERCIAL PAPER--3.17%
(Cost $6,157,042) 6,157,042
-----------
TOTAL INVESTMENTS--99.99%
(Cost $138,232,666) 194,208,105
CASH AND OTHER ASSETS, LESS
LIABILITIES--0.01% 28,953
-----------
NET ASSETS--100.00% $194,237,058
-----------
-----------
ABBREVIATIONS
ADR -- American Depository Receipt
* -- Non-income producing securities
</TABLE>
See notes to financial statements.
3
<PAGE>
SCHEDULE OF INVESTMENTS June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
AMERICAN NATIONAL INCOME FUND
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
<S> <C> <C>
AUTO & TRUCK MANUFACTURERS-- 5.84%
Chrysler Corporation 55,000 $ 3,100,625
Ford Motor Company 133,881 7,898,979
General Motors Corporation 28,000 1,870,750
-----------
12,870,354
BANKS--8.32%
Banc One Corporation 77,000 4,297,562
Comerica, Incorporated 34,500 2,285,625
First Union Corporation 33,400 1,945,550
Morgan (J.P.) & Company 9,500 1,112,687
NationsBank Corporation 60,000 4,590,000
Norwest Corp 110,000 4,111,250
-----------
18,342,674
BEVERAGES--0.88%
Anheuser-Busch Companies,
Incorporated 41,000 1,934,687
CHEMICALS--1.52%
Hercules, Incorporated 32,600 1,340,675
Praxair, Incorporated 43,000 2,012,937
-----------
3,353,612
COMPUTER RELATED--2.17%
Hewlett-Packard Company 80,000 4,790,000
DIVERSIFIED--0.95%
AlliedSignal, Incorporated 25,000 1,109,375
U.S. Industries, Incorporated 40,000 990,000
-----------
2,099,375
DRUGS--4.99%
Schering-Plough Corporation 120,000 10,995,000
ELECTRIC POWER--2.00%
Baltimore Gas & Electric Company 26,300 816,944
DTE Energy Company 65,000 2,624,375
OGE Energy Corporation 36,000 972,000
-----------
4,413,319
ELECTRICAL EQUIPMENT--0.85%
York International Corporation 43,000 1,873,188
ELECTRONICS/INSTRUMENTS--1.34%
Raytheon Company (Class B) 50,000 2,956,250
ENVIRONMENTAL--0.79%
Waste Management, Incorporated 50,000 1,750,000
<CAPTION>
COMMON STOCK SHARES VALUE
<S> <C> <C>
EXPLORATION & DRILLING--0.49%
Tidewater, Incorporated 19,000 $ 627,000
Union Pacific Resources Group,
Incorporated 25,408 446,228
-----------
1,073,228
FINANCIAL SERVICES--7.19%
Associates First Capital
Corporation 35,088 2,697,390
Morgan Stanley, Dean Witter,
Discover and Company 90,000 8,223,750
Omega Healthcare Investors,
Incorporated 60,000 2,107,500
Omega Worldwide, Incorporated* 19,893 150,441
Reliance Group Holdings,
Incorporated 152,000 2,660,000
-----------
15,839,081
FOODS PRODUCERS--3.24%
Interstate Bakeries Corporation 73,000 2,422,688
McCormick & Company, Incorporated 70,000 2,500,316
Universal Foods Corporation 99,600 2,209,875
-----------
7,132,879
FOODS RETAILERS--1.29%
Albertson's, Incorporated 55,000 2,849,688
FURNITURE/APPLIANCES--1.87%
Whirlpool Corporation 60,000 4,125,000
INSURANCE--1.15%
CIGNA Corporation 36,600 2,525,400
LEISURE TIME--0.71%
Brunswick Corporation 63,200 1,564,200
MACHINERY & EQUIPMENT--2.34%
Flowserve Corporation 51,000 1,255,875
Foster Wheeler Corporation 30,000 643,125
General Signal Corporation 53,700 1,933,200
Pall Corporation 65,000 1,332,500
-----------
5,164,700
MEDICAL PRODUCTS & SUPPLIES--
3.59%
Abbott Laboratories 130,000 5,313,750
Bergen Brunswig Corporation (Class
A) 56,250 2,608,594
-----------
7,922,344
METALS & MINING--0.54%
Cyprus Amax Minerals Company 90,000 1,192,500
NATURAL GAS--1.20%
Enron Corporation 49,000 2,649,063
</TABLE>
4
<PAGE>
SCHEDULE OF INVESTMENTS June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
AMERICAN NATIONAL INCOME FUND, CONTINUED
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
OIL DOMESTIC--1.76%
<S> <C> <C>
Amoco Corporation 35,600 $ 1,481,850
Kerr-McGee Corporation 27,200 1,574,200
Murphy Oil Corporation 16,100 816,069
-----------
3,872,119
OIL INTERNATIONAL--5.50%
Chevron Corporation 23,200 1,927,050
Exxon Corporation 31,000 2,210,687
Societe Nationale Elf Aquitaine
ADR 72,000 5,112,000
Texaco, Incorporated 48,000 2,865,000
-----------
12,114,737
PAPER/FOREST PRODUCTS--1.90%
Caraustar Industries, Incorporated 30,000 866,250
Glatfelter (P.H.) Company 94,000 1,486,375
Weyerhaeuser Company 40,000 1,847,500
-----------
4,200,125
PHOTOGRAPHY/IMAGING--1.20%
Xerox Corporation 26,000 2,642,250
PRINTING & PUBLISHING--1.69%
Banta Corporation 63,000 1,945,125
Deluxe Corporation 50,000 1,790,625
-----------
3,735,750
REAL ESTATE/REITS--4.39%
CenterPoint Properties Corporation 63,000 2,082,937
Crescent Real Estate Equities
Company 65,000 2,185,625
Health & Retirement Properties
Trust 100,000 1,881,250
Hospitality Properties Trust 50,000 1,606,250
Liberty Trust Properties 75,000 1,917,188
-----------
9,673,250
RESTAURANTS--0.37%
Applebee's International,
Incorporated 36,000 805,500
TELECOM--CELLULAR--2.58%
GTE Corporation 60,000 3,337,500
US West Incorporated New 50,000 2,350,000
-----------
5,687,500
TELEPHONE UTILITY--1.08%
Alltel Corporation 51,000 2,371,500
TOBACCO--1.24%
RJR Nabisco Holdings Corporation 41,248 979,640
UST, Incorporated 65,000 1,755,000
-----------
2,734,640
<CAPTION>
COMMON STOCK SHARES VALUE
<S> <C> <C>
TRANSPORT, TRUCKING & SHIPPING--
0.51%
USFreightways Corporation 34,000 $ 1,116,689
-----------
TOTAL COMMON STOCK--75.48%
(Cost $104,978,350) 166,370,602
-----------
<CAPTION>
CONVERTIBLE PREFERRED STOCK SHARES VALUE
<S> <C> <C>
FINANCIAL SERVICES--0.67%
Security Capital Industrial Trust 47,000 1,474,625
INSURANCE COMPANIES--0.65%
St Paul Capital LLC 20,000 1,440,000
OIL DOMESTIC--1.49%
Unocal Capital Trust 61,000 3,286,375
-----------
TOTAL CONVERTIBLE PREFERRED STOCK--2.81%
(Cost $5,414,752) 6,201,000
-----------
<CAPTION>
FACE
COMMERCIAL PAPER AMOUNT
<S> <C> <C>
CONTAINERS--1.40%
Crown Cork & Seal Company,
Incorporated, 5.71%, 07/13/98 $3,085,000 3,079,084
ELECTRIC POWER--3.28%
Arizona Public Service, 6.00%,
07/02/98 3,500,000 3,499,416
Arizona Public Service, 5.72%,
07/09/98 1,850,000 1,847,641
Commonwealth Edison Company,
5.75%, 07/07/98 1,876,000 1,874,192
-----------
7,221,249
FINANCIAL SERVICES--4.81%
Case Credit, 5.90%, 07/02/98 3,203,000 3,202,475
Comdisco, Incorporated, 5.72%,
07/06/98 3,971,000 3,967,828
Comdisco, Incorporated, 5.70%,
07/15/98 3,439,000 3,431,328
-----------
10,601,631
FOODS PRODUCERS--0.91%
ConAgra, Incorporated, 6.02%,
07/08/98 1,997,000 1,994,662
FOODS RETAILERS--2.17%
Super Value, Incorporated, 6.10%,
07/07/98 4,786,000 4,781,133
FURNITURE/APPLIANCES--3.46%
Maytag Corporation, 5.75%,
07/10/98 4,068,000 4,062,139
Maytag Corporation, 6.00%,
07/20/98 3,585,000 3,573,636
-----------
7,635,775
</TABLE>
5
<PAGE>
SCHEDULE OF INVESTMENTS June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
AMERICAN NATIONAL INCOME FUND, CONTINUED
<TABLE>
<CAPTION>
FACE
COMMERCIAL PAPER AMOUNT VALUE
STEEL--1.37%
<S> <C> <C>
Carpenter Technology, 6.00%,
07/09/98 3,030,000 3,025,957
UTILITY, MISCELLANEOUS--4.24%
Illinois Power Company, 5.90%,
07/17/98 $2,320,000 $ 2,313,908
Illinois Power Company, 5.95%,
07/17/98 740,000 738,041
Mid-Atlantic Fuel Company, 5.73%,
07/08/98 2,000,000 1,997,756
Orange & Rockland Utilities,
Incorporated, 5.79%, 07/01/98 4,300,000 4,300,000
-----------
9,349,705
-----------
TOTAL COMMERCIAL PAPER--21.64%
(Cost $47,689,196) 47,689,196
-----------
TOTAL INVESTMENTS--99.93%
(Cost $158,082,298) 220,260,798
CASH AND OTHER ASSETS, LESS
LIABILITIES--0.07% 154,664
-----------
NET ASSETS--100.00% $220,415,462
-----------
-----------
ABBREVIATIONS
ADR -- American Depository Receipt
REIT -- Real Estate Investment Trust
* -- Non-income producing securities
</TABLE>
See notes to financial statements.
6
<PAGE>
SCHEDULE OF INVESTMENTS June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
TRIFLEX FUND
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
<S> <C> <C>
AUTO & TRUCK MANUFACTURERS-- 2.01%
Chrysler Corporation 2,600 $ 146,575
Ford Motor Company 3,300 194,700
General Motors Corporation 3,000 200,438
----------
541,713
BANKS--6.28%
Banc One Corporation 3,410 190,321
Comerica, Incorporated 3,750 248,438
Dime Bancorp, Incorporated 5,400 161,663
First Union Corporation 3,200 186,400
NationsBank Corporation 5,000 382,500
Norwest Corporation 14,000 523,250
----------
1,692,572
BEVERAGES--0.53%
Anheuser-Busch Companies,
Incorporated 3,000 141,563
BROADCASTING--0.85%
MediaOne Group, Incorporated* 5,200 228,475
CHEMICALS--1.04%
Hercules, Incorporated 2,800 115,150
Praxair, Incorporated 3,500 163,844
----------
278,994
COMMUNICATIONS EQUIPMENT--1.02%
Lucent Technologies, Incorporated 3,300 274,519
COMPUTER RELATED--1.41%
Cisco Systems, Incorporated* 2,000 184,125
Sun Microsystems, Incorporated* 4,500 195,469
----------
379,594
COMPUTER SOFTWARE--3.77%
First Data Corporation 5,300 176,556
Microsoft Corporation* 4,600 498,525
Network Associates, Incorporated* 3,000 143,625
Synopsys, Incorporated* 4,300 196,725
----------
1,015,431
CONSTRUCTION--0.31%
Centex Corporation 2,200 83,050
COSMETICS & TOILETRIES--2.57%
Procter & Gamble Company 7,600 692,075
<CAPTION>
COMMON STOCK SHARES VALUE
<S> <C> <C>
DIVERSIFIED--1.37%
AlliedSignal, Incorporated 3,100 $ 137,563
Coltec Industries, Incorporated* 5,600 111,300
U.S. Industries, Incorporated 4,900 121,275
----------
370,138
DRUGS--3.09%
Warner-Lambert Company 12,000 832,500
ELECTRIC POWER--1.14%
Allegheny Power System,
Incorporated 2,100 63,263
DTE Energy Company 4,000 161,500
OGE Energy Corporation 3,000 81,000
----------
305,763
ELECTRICAL EQUIPMENT--2.39%
General Electric Company 5,400 491,400
York International Corporation 3,500 152,469
----------
643,869
ELECTRONICS/INSTRUMENTS--1.10%
Analog Devices, Incorporated* 2,400 58,950
Avnet, Incorporated 3,000 164,062
Cypress Semiconductor Corporation* 8,800 73,150
----------
296,162
ENVIRONMENTAL--1.17%
Waste Management, Incorporated 9,000 315,000
EXPLORATION & DRILLING--0.49%
Global Marine, Incorporated* 2,800 52,325
Tidewater, Incorporated 1,500 49,500
Union Pacific Resources Group,
Incorporated 1,693 29,733
----------
131,558
FINANCIAL SERVICE--2.79%
Associates First Capital
Corporation 864 66,420
Countrywide Credit Industries,
Incorporated 6,000 304,500
Morgan Stanley, Dean Witter,
Discover and Company 1,800 164,475
Reliance Group Holdings,
Incorporated 12,400 217,000
----------
752,395
FOOD PRODUCERS--2.14%
IBP, Incorporated 5,500 99,687
Interstate Bakeries Corporation 9,000 298,688
Universal Foods Corporation 8,000 177,500
----------
575,875
</TABLE>
7
<PAGE>
SCHEDULE OF INVESTMENTS June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
TRIFLEX FUND, CONTINUED
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
FOOD RETAILERS--1.70%
<S> <C> <C>
Albertson's, Incorporated 3,100 $ 160,619
Safeway, Incorporated* 7,300 297,019
----------
457,638
INSURANCE COMPANIES--1.24%
American General Corporation 1,800 128,137
CIGNA Corporation 3,000 207,000
----------
335,137
LEISURE TIME--0.46%
Brunswick Corporation 5,000 123,750
MACHINERY & EQUIPMENT--1.16%
Flowserve Corporation 4,200 103,425
Foster Wheeler Corporation 3,500 75,031
Pall Corporation 6,500 133,250
----------
311,706
MEDICAL PRODUCTS & SUPPLIES-- 4.14%
Abbott Laboratories 6,000 245,250
Bergen Brunswig Corporation (Class
A) 5,750 266,656
Biomet, Incorporated 7,100 234,744
Johnson & Johnson 5,000 368,750
----------
1,115,400
MEDICAL SERVICES--2.25%
Aetna, Incorporated 2,100 159,862
Beckman Coulter, Incorporated 1,700 99,025
MedPartners, Incorporated* 6,800 54,400
PacifiCare Health Systems,
Incorporated (Class B)* 1,000 88,375
United Healthcare Corporation 3,200 203,200
----------
604,862
METALS & MINING--0.27%
Cyprus Amax Minerals Company 5,500 72,875
NATURAL GAS--0.80%
Enron Corporation 4,000 216,250
OIL DOMESTIC--1.18%
Amoco Corporation 4,000 166,500
Kerr-McGee Corporation 1,200 69,450
Murphy Oil Corporation 1,600 81,100
----------
317,050
OIL INTERNATIONAL--2.99%
Chevron Corporation 4,400 365,475
Societe Nationale Elf Aquitaine ADR 6,200 440,200
----------
805,675
<CAPTION>
COMMON STOCK SHARES VALUE
<S> <C> <C>
PAPER/FOREST PRODUCTS--1.07%
Caraustar Industries, Incorporated 2,300 $ 66,412
Louisiana-Pacific Corporation 5,100 93,075
Weyerhaeuser Company 2,800 129,325
----------
288,812
PRINTING/PUBLISHING--0.63%
Banta Corporation 5,500 169,812
RESTAURANTS--0.24%
Applebee's International,
Incorporated 2,900 64,887
RETAIL DISCOUNT--0.26%
Toys "R" Us, Incorporated* 3,000 70,687
RETAIL GENERAL--0.60%
Federated Department Stores,
Incorporated* 3,000 161,437
RETAIL SPECIALTY--0.67%
Officemax, Incorporated* 4,900 80,850
Tiffany & Company 2,100 100,800
----------
181,650
SEMICONDUCTORS--1.10%
Intel Corporation 4,000 296,500
TELECOM--CELLULAR--1.76%
GTE Corporation 4,000 222,500
U S West, Incorporated New 5,342 251,074
----------
473,574
TELEPHONE--0.76%
Alltel Corporation 4,400 204,600
TRUCKING & SHIPPING--0.33%
USFreightways Corporation 2,700 88,678
----------
TOTAL COMMON STOCK--59.08%
(Cost $11,074,632) 15,912,226
----------
<CAPTION>
CONVERTIBLE PREFERRED STOCK
<S> <C> <C>
OIL DOMESTIC--0.70%
Unocal Capital Trust 3,500 188,563
----------
TOTAL CONVERTIBLE PREFERRED STOCK--0.70%
(Cost $185,787) 188,563
----------
</TABLE>
8
<PAGE>
SCHEDULE OF INVESTMENTS June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
TRIFLEX FUND, CONTINUED
<TABLE>
<CAPTION>
FACE
BONDS AND NOTES AMOUNT VALUE
FINANCIAL SERVICES--2.24%
<S> <C> <C>
Ford Motor Credit Company, 6.375%,
09/15/99 $ 600,000 $ 602,358
GOVERNMENT AGENCIES--22.35%
Federal Home Loan Mortgage
Corporation, 7.70%, 05/17/06 1,000,000 1,016,719
Federal Home Loan Mortgage
Corporation, 7.00%, 09/15/07 1,000,000 1,028,993
Federal Home Loan Mortgage
Corporation, Pool #284839,
8.50%, 01/01/17 49,887 52,140
Federal Home Loan Mortgage
Corporation, Pool #302886,
8.00%, 05/01/17 52,881 54,619
Federal Home Loan Mortgage
Corporation, Pool #298759,
8.00%, 08/01/17 163,800 169,182
Federal National Mortgage
Association, 7.55%, 04/22/02 685,000 728,399
Federal National Mortgage
Association, 7.55%, 06/10/04 1,250,000 1,270,596
Federal National Mortgage
Association, 7.70%, 04/10/07 1,500,000 1,541,642
Federal National Mortgage
Association, Pool #041669,
8.00%, 02/01/17 34,726 36,141
Federal National Mortgage
Association, Pool #48974,
8.00%, 06/01/17 115,188 119,907
----------
6,018,338
<CAPTION>
FACE
BONDS AND NOTES AMOUNT VALUE
<S> <C> <C>
U S TREASURY SECURITIES--12.86%
U S Treasury Bond, 6.000%, 02/15/26 $2,350,000 $2,444,736
U S Treasury Note, 5.875%, 02/15/04 1,000,000 1,018,750
----------
3,463,486
----------
TOTAL BONDS AND NOTES--37.45%
(Cost $9,411,383) 10,084,182
----------
<CAPTION>
COMMERCIAL PAPER
<S> <C> <C>
CHEMICALS--1.05%
Praxair, Incorporated, 6.07%,
07/02/98 284,000 283,952
FOOD PRODUCERS--1.14%
ConAgra, Incorporated, 6.02%,
07/01/98 308,000 308,000
----------
TOTAL COMMERCIAL PAPER--2.19%
(Cost $591,952) 591,952
----------
TOTAL INVESTMENTS--99.42%
(Cost $21,263,754) 26,776,923
CASH AND OTHER ASSETS, LESS LIABILITIES--0.58% 155,870
----------
NET ASSETS--100.00% $26,932,793
----------
----------
ABBREVIATIONS
ADR -- American Depository Receipt
* -- Non-income producing securities
</TABLE>
See notes to financial statements.
9
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH INCOME TRIFLEX
<S> <C> <C> <C>
ASSETS
Investments in securities, at value $ 194,208,105 $ 220,260,798 $ 26,776,923
Cash 2,637 305 7,766
Receivable for:
Securities sold - - 8,938
Dividends 147,445 277,012 12,010
Interest - - 145,754
Other assets 125,072 102,684 28,133
-------------- -------------- ------------
TOTAL ASSETS 194,483,259 220,640,799 26,979,524
LIABILITIES
Capital stock reacquired 127,339 58,206 23,428
Accrued:
Investment advisory fee 81,352 126,033 17,477
Service fee 37,510 41,098 5,826
-------------- -------------- ------------
TOTAL LIABILITIES 246,201 225,337 46,731
-------------- -------------- ------------
NET ASSETS $ 194,237,058 $ 220,415,462 $ 26,932,793
-------------- -------------- ------------
-------------- -------------- ------------
Shares outstanding 33,635,370 7,470,057 1,381,419
-------------- -------------- ------------
-------------- -------------- ------------
Net asset value per share $ 5.77 $ 29.51 $ 19.50
-------------- -------------- ------------
-------------- -------------- ------------
Offering price per share
(Net asset value per share / 94.25%) $ 6.12 $ 31.31 $ 20.69
-------------- -------------- ------------
-------------- -------------- ------------
</TABLE>
STATEMENTS OF OPERATIONS Six Months Ended June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH INCOME TRIFLEX
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 1,155,134 $ 2,291,505 $ 133,938
Interest 436,171 1,088,321 390,862
------------ ------------ -----------
TOTAL INVESTMENT INCOME 1,591,305 3,379,826 524,800
EXPENSES
Investment advisory fee 453,842 701,547 98,042
Service fee 209,213 229,017 32,681
Insurance 24,321 26,510 3,348
Directors' fees and expenses 11,995 11,995 11,995
Custodian fees 39,010 42,504 12,691
Audit fees 6,695 6,695 4,937
Qualification fees 13,292 16,011 9,908
Shareholder reporting expenses 10,800 11,446 1,484
Legal fees 575 509 509
------------ ------------ -----------
TOTAL EXPENSES 769,743 1,046,234 175,595
LESS EXPENSES REIMBURSED - - 10,817
------------ ------------ -----------
NET EXPENSES 769,743 1,046,234 164,778
------------ ------------ -----------
INVESTMENT INCOME 821,562 2,333,592 360,022
------------ ------------ -----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 5,843,021 5,263,453 516,131
Change in unrealized appreciation of investments for the period 12,229,045 13,143,252 1,117,952
------------ ------------ -----------
NET GAIN ON INVESTMENTS 18,072,066 18,406,705 1,634,083
------------ ------------ -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 18,893,628 $ 20,740,297 $ 1,994,105
------------ ------------ -----------
------------ ------------ -----------
</TABLE>
See notes to financial statements.
10
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
AMERICAN NATIONAL GROWTH FUND
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1998 1997
-------------- --------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS
Investment income, net $ 821,562 $ 1,741,364
Net realized gain on investments 5,843,021 24,950,387
Change in unrealized appreciation 12,229,045 6,796,148
-------------- --------------
Net increase in net assets resulting from operations 18,893,628 33,487,899
DISTRIBUTIONS TO SHAREHOLDERS FROM
Investment income, net (838,593) (1,757,095)
Capital gains -- (21,864,218)
-------------- --------------
Total distributions to shareholders (838,593) (23,621,313)
CAPITAL SHARE TRANSACTIONS, NET (2,162,065) 15,719,205
-------------- --------------
TOTAL INCREASE 15,892,970 25,585,791
NET ASSETS
Beginning of period 178,344,088 152,758,297
-------------- --------------
End of period $ 194,237,058 $ 178,344,088
-------------- --------------
-------------- --------------
</TABLE>
AMERICAN NATIONAL INCOME FUND
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1998 1997
-------------- --------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS
Investment income, net $ 2,333,592 $ 4,185,807
Net realized gain on investments 5,263,453 23,033,015
Change in unrealized appreciation 13,143,252 10,366,823
-------------- --------------
Net increase in net assets resulting from operations 20,740,297 37,585,645
DISTRIBUTIONS TO SHAREHOLDERS FROM
Investment income, net (2,281,845) (4,220,053)
Capital gains -- (19,927,051)
-------------- --------------
Total distributions to shareholders (2,281,845) (24,147,104)
CAPITAL SHARE TRANSACTIONS, NET 3,270,096 19,462,475
-------------- --------------
TOTAL INCREASE 21,728,548 32,901,016
NET ASSETS
Beginning of period 198,686,914 165,785,898
-------------- --------------
End of period $ 220,415,462 $ 198,686,914
-------------- --------------
-------------- --------------
</TABLE>
See notes to financial statements.
11
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
TRIFLEX FUND
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1998 1997
-------------- --------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS
Investment income, net $ 360,022 $ 751,773
Net realized gain on investments 516,131 2,950,385
Change in unrealized appreciation 1,117,952 277,845
-------------- --------------
Net increase in net assets resulting from operations 1,994,105 3,980,003
DISTRIBUTIONS TO SHAREHOLDERS FROM
Investment income, net (350,157) (756,610)
Capital gains -- (2,597,856)
-------------- --------------
Total distributions to shareholders (350,157) (3,354,466)
CAPITAL SHARE TRANSACTIONS, NET (549,227) 2,024,691
-------------- --------------
TOTAL INCREASE 1,094,721 2,650,228
NET ASSETS
Beginning of period 25,838,072 23,187,844
-------------- --------------
End of period $ 26,932,793 $ 25,838,072
-------------- --------------
-------------- --------------
</TABLE>
See notes to financial statements.
12
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout the period
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED JUNE -----------------------------------------------------
AMERICAN NATIONAL GROWTH FUND 30, 1998 1997 1996 1995 1994 1993
------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 5.24 $ 4.95 $ 4.39 $ 3.83 $ 4.15 $ 4.51
Investment income, net 0.03 0.06 0.05 0.08 0.06 0.06
Net realized and unrealized gain on investments
during the period 0.53 1.03 0.73 0.88 0.15 0.31
------------- --------- --------- --------- --------- ---------
Total from Investment Operations 0.56 1.09 0.78 0.96 0.21 0.37
Less distributions from
Investment income, net (0.03) (0.06) (0.05) (0.08) (0.06) (0.06)
Capital gains -- (0.74) (0.17) (0.32) (0.47) (0.67)
------------- --------- --------- --------- --------- ---------
Total distributions (0.03) (0.80) (0.22) (0.40) (0.53) (0.73)
------------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period $ 5.77 $ 5.24 $ 4.95 $ 4.39 $ 3.83 $ 4.15
------------- --------- --------- --------- --------- ---------
------------- --------- --------- --------- --------- ---------
Total return 10.60%** 22.24% 17.64% 25.20% 4.98% 8.17%
------------- --------- --------- --------- --------- ---------
------------- --------- --------- --------- --------- ---------
RATIOS (IN PERCENTAGES)/SUPPLEMENTAL DATA
Net Assets, end of period (000's omitted) $ 194,237 $ 178,344 $ 152,758 $ 134,821 $ 113,250 $ 113,135
Ratio of expenses to average net assets 0.81%* 0.96% 1.15% 0.98% 0.97% 1.00%
Ratio of net investment income to average net
assets 0.87%* 1.03% 1.02% 1.67% 1.46% 1.31%
Portfolio turnover rate 15.28% 46.79% 18.72% 37.00% 46.26% 59.67%
Average commission rate 7.00% 7.00% 7.00% -- -- --
<CAPTION>
(UNAUDITED)
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED JUNE -----------------------------------------------------
AMERICAN NATIONAL INCOME FUND 30, 1998 1997 1996 1995 1994 1993
------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 26.99 $ 25.05 $ 22.59 $ 18.90 $ 21.66 $ 22.09
Investment income, net 0.32 0.63 0.58 0.62 0.62 0.56
Net realized and unrealized gain/(loss) on
investments during the period 2.51 4.96 3.10 4.82 (0.75) 1.75
------------- --------- --------- --------- --------- ---------
Total from Investment Operations 2.83 5.59 3.68 5.44 (0.13) 2.31
Less distributions from
Investment income, net (0.31) (0.64) (0.58) (0.63) (0.61) (0.60)
Capital gains -- (3.01) (0.64) (1.12) (2.02) (2.14)
------------- --------- --------- --------- --------- ---------
Total distributions (0.31) (3.65) (1.22) (1.75) (2.63) (2.74)
------------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period $ 29.51 $ 26.99 $ 25.05 $ 22.59 $ 18.90 $ 21.66
------------- --------- --------- --------- --------- ---------
------------- --------- --------- --------- --------- ---------
Total return 10.49%** 22.72% 16.46% 29.12% (0.61)% 10.63%
------------- --------- --------- --------- --------- ---------
------------- --------- --------- --------- --------- ---------
RATIOS (IN PERCENTAGES)/SUPPLEMENTAL DATA
Net Assets, end of period (000's omitted) $ 220,415 $ 198,687 $ 165,786 $ 141,058 $ 114,231 $ 119,956
Ratio of expenses to average net assets 0.98%* 1.05% 1.10% 1.12% 1.12% 1.17%
Ratio of net investment income to average net
assets 2.19%* 2.28% 2.42% 2.89% 2.86% 2.51%
Portfolio turnover rate 6.05% 39.14% 27.07% 44.00% 52.46% 70.71%
Average commission rate 7.00% 7.00% 7.00% -- -- --
<CAPTION>
(UNAUDITED)
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED JUNE -----------------------------------------------------
TRIFLEX FUND 30, 1998 1997 1996 1995 1994 1993
------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 18.32 $ 17.90 $ 16.85 $ 14.32 $ 15.35 $ 15.81
Investment income, net 0.29 0.57 0.49 0.49 0.45 0.41
Net realized and unrealized gain/(loss) on
investments during the period 1.14 2.50 1.48 2.67 (0.22) 0.58
------------- --------- --------- --------- --------- ---------
Total from Investment Operations 1.43 3.07 1.97 3.16 0.23 0.99
Less distributions from
Investment income, net (0.25) (0.59) (0.49) (0.49) (0.45) (0.41)
Capital gains -- (2.06) (0.43) (0.14) (0.81) (1.04)
------------- --------- --------- --------- --------- ---------
Total distributions (0.25) (2.65) (0.92) (0.63) (1.26) (1.45)
------------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period $ 19.50 $ 18.32 $ 17.90 $ 16.85 $ 14.32 $ 15.35
------------- --------- --------- --------- --------- ---------
------------- --------- --------- --------- --------- ---------
Total return 7.84%** 17.46% 11.86% 22.29% 1.49% 6.31%
------------- --------- --------- --------- --------- ---------
------------- --------- --------- --------- --------- ---------
RATIOS (IN PERCENTAGES)/SUPPLEMENTAL DATA
Net Assets, end of period (000's omitted) $ 26,933 $ 25,838 $ 23,188 $ 21,757 $ 19,023 $ 20,469
Ratio of expenses to average net assets (1) 1.24%* 1.26% 1.21% 1.26% 1.25% 1.32%
Ratio of net investment income to average net
assets 2.71%* 3.02% 2.83% 2.99% 2.91% 2.49%
Portfolio turnover rate 11.76% 27.52% 23.78% 16.39% 46.95% 70.98%
Average commission rate 7.00% 7.00% 7.00% -- -- --
</TABLE>
(1) Expenses for these calculations are net of a reimbursement from Securities
Management & Research, Inc. Without these reimbursements, the ratio of
expenses to average net assets would have been 1.32%, 1.36%, 1.34%, 1.46%,
1.45%, and 1.39% for the six months ended June 30, 1998 and the years ended
1997, 1996, 1995, 1994, and 1993, respectively.
* Ratios annualized
** Returns are not annualized
See notes to financial statements.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
AMERICAN NATIONAL FUNDS GROUP
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
The American National Funds Group (the "Funds") are diversified open-end
management investment companies registered under the Investment Company Act of
1940, as amended. The Funds are comprised of the American National Growth Fund,
Inc., American National Income Fund, Inc. and the Triflex Fund, Inc. The
following is a summary of significant accounting policies consistently followed
by the Funds in the preparation of its financial statements. 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 at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
INVESTMENT VALUATION:
Investments listed on national exchanges are valued at the last sales price of
the day, or if there were no sales, then at the last bid price. Debt obligations
that are issued or guaranteed by the U.S. Government, its agencies, authorities,
and instrumentalities are valued on the basis of prices provided by an
independent pricing service. Prices provided by the pricing service may be
determined without exclusive reliance on quoted prices, and may reflect
appropriate factors such as yield, type of issue, coupon rate, maturity and
seasoning differential. Securities for which market quotations are not readily
available are valued at fair value as determined by the Board of Directors.
Commercial paper is stated at amortized cost, which is equivalent to fair value.
INVESTMENT TRANSACTIONS AND RELATED INVESTMENT INCOME:
Investment transactions are accounted for on the trade date (date order to buy
or sell is executed). Dividend income is recognized on the ex-dividend date, and
interest income is recognized on an accrual basis. Realized gains and losses
from security transactions are reported on the basis of specific identification
for financial reporting and federal income tax purposes.
FEDERAL INCOME TAXES:
For federal income tax purposes, each fund is treated as a separate entity. The
Funds intend to comply with requirements of the Internal Revenue Code relating
to regulated investment companies and intend to distribute substantially all of
its taxable income to its shareholders. Therefore, no provision for federal
income taxes is recorded in the accompanying financial statements.
CAPITAL STOCK TRANSACTIONS AND DISTRIBUTIONS TO SHAREHOLDERS:
Fund shares are sold in a continuous public offering at net asset value plus a
sales charge. The Funds repurchase shares at net asset value. Dividends and
other distributions are recorded by the Fund on the ex-dividend date and may be
reinvested at the net asset value.
EXPENSES:
Operating expenses not directly attributable to a Fund's operations are prorated
among the Funds based on the relative net assets or shareholders of each Fund.
NOTE 2--INVESTMENT ADVISORY AND SERVICE FEES AND OTHER TRANSACTIONS WITH
AFFILIATES
Securities Management and Research, Inc. ("SM&R") is the investment advisor and
principal underwriter for the Funds. Investment advisory fees paid to SM&R are
computed as a percentage of the average daily net assets as follows:
<TABLE>
<CAPTION>
INVESTMENT
ADVISORY
FEE SERVICE FEE
<S> <C> <C>
Net Assets
Not exceeding $100,000,000 0.750% 0.250%
Exceeding $100,000,000 but not exceeding $200,000,000 0.625% 0.200%
Exceeding $200,000,000 but not exceeding $300,000,000 0.500% 0.150%
Exceeding $300,000,000 0.400% 0.100%
</TABLE>
The investment advisory agreement for the Growth Fund provides for incentive
fees that will increase or decrease the basic investment advisory fee, based on
the performance of the fund in relation to a specified industry index for the
funds with similar objectives over a rolling 36-month period. For the period
ended June 30, 1998 the investment advisory fee was decreased by approximately
$184,400.
SM&R has agreed to reimburse the Funds for all expenses, other than taxes,
interest, and expenses directly related to the purchase and sale of investment
securities, in excess of 1.25% per annum of the average daily net assets.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS CONTINUED
- --------------------------------------------------------------------------------
AMERICAN NATIONAL FUNDS GROUP
During the period ended June 30, 1998, SM&R, as principal underwriter, received
as sales charges on sale of shares of capital stock of the Funds and made
reallowances to dealers as follows:
<TABLE>
<CAPTION>
SALES CHARGES
SALES CHARGES REALLOWED TO
RECEIVED BY SM&R DEALERS
<S> <C> <C>
Growth $ 243,746 $ 2,831
Income 464,578 6,596
Triflex 30,112 193
</TABLE>
SM&R is a wholly-owned subsidiary of American National Insurance Company
("American National"). As of June 30, 1998, SM&R and American National had the
following ownership in the Funds:
<TABLE>
<CAPTION>
AMERICAN NATIONAL
SM&R ----------------------------
------------------------------ PERCENT OF
PERCENT OF SHARES
SHARES SHARES OUTSTANDING SHARES OUTSTANDING
<S> <C> <C> <C> <C>
Growth 328,552 0.98% 1,163,208 3.46%
Income 16,289 0.22% -- --
Triflex 121,506 8.80% 203,311 14.72%
</TABLE>
NOTE 3--COST, PURCHASES, AND SALES OF INVESTMENT SECURITIES
Investments have the same cost for tax and financial statement purposes.
Aggregate purchases and sales of investment in securities, other than commercial
paper and corporate short-term bonds and notes, were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
<S> <C> <C>
Growth $37,713,130 $26,574,464
Income 10,541,908 26,338,180
Triflex 3,487,469 2,945,366
</TABLE>
Gross unrealized appreciation and depreciation as of June 30, 1998, were as
follows:
<TABLE>
<CAPTION>
APPRECIATION DEPRECIATION
<S> <C> <C>
Growth 6$2,750,225 $6,774,786
Income 65,953,987 3,775,487
Triflex 6,038,706 525,537
</TABLE>
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS CONTINUED
- --------------------------------------------------------------------------------
AMERICAN NATIONAL FUNDS GROUP
NOTE 4--CAPITAL STOCK
AMERICAN NATIONAL GROWTH FUND
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sale of capital shares 1,638,909 $ 9,216,055 2,618,034 $14,523,030
Investment income dividends reinvested 144,112 817,081 319,910 1,712,682
Distributions made from net realized gains reinvested -- -- 4,145,887 21,351,396
--------- ----------- --------- -----------
Subtotals 1,783,021 10,033,136 7,083,831 37,587,108
Redemptions of capital shares (2,179,226) (12,195,201) (3,923,677) (21,867,903)
--------- ----------- --------- -----------
Net increase (decrease) in capital shares outstanding (396,205) $(2,162,065) 3,160,154 $15,719,205
----------- -----------
----------- -----------
Shares outstanding at beginning of period 34,031,575 30,871,421
--------- ---------
Shares outstanding at end of period 33,635,370 34,031,575
--------- ---------
--------- ---------
The components of net assets at June 30, 1998, are as
follows:
Capital Stock--33,635,370 shares of $1.00 par value
outstanding (75,000,000 authorized) (par and additional
paid-in capital) $127,492,415
Undistributed net investment income 934
Accumulated net realized gain on investments 10,768,270
Net unrealized appreciation of investments 55,975,439
-----------
Net assets $194,237,058
-----------
-----------
</TABLE>
AMERICAN NATIONAL INCOME FUND
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sale of capital shares 572,638 $16,614,859 767,255 $20,997,880
Investment income dividends reinvested 74,915 2,205,700 149,320 4,073,432
Distributions made from net realized gains reinvested -- -- 729,218 19,360,438
--------- ----------- --------- -----------
Subtotals 647,553 18,820,559 1,645,793 44,431,750
Redemptions of capital shares (537,948) (15,550,463) (903,658) (24,969,275)
--------- ----------- --------- -----------
Net increase in capital shares outstanding 109,605 $ 3,270,096 742,135 $19,462,475
----------- -----------
----------- -----------
Shares outstanding at beginning of period 7,360,452 6,618,317
--------- ---------
Shares outstanding at end of period 7,470,057 7,360,452
--------- ---------
--------- ---------
The components of net assets at June 30, 1998, are as
follows:
Capital Stock--7,470,057 shares of $1.00 par value
outstanding (50,000,000 authorized) (par and additional
paid-in capital) $149,270,416
Undistributed net investment income 79,431
Accumulated net realized gain on investments 8,887,115
Net unrealized appreciation of investments 62,178,500
-----------
Net assets $220,415,462
-----------
-----------
</TABLE>
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS CONTINUED
- --------------------------------------------------------------------------------
AMERICAN NATIONAL FUNDS GROUP
TRIFLEX FUND
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997
--------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT
--------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Sale of capital shares 86,835 $1,640,711 96,421 $1,864,777
Investment income dividends reinvested 18,231 351,753 38,357 728,301
Distributions made from net realized gains reinvested -- -- 139,275 2,529,231
--------- ---------- --------- ----------
Subtotals 105,066 1,992,464 274,053 5,122,309
Redemptions of capital shares (133,907) (2,541,691) (159,550) (3,097,618)
--------- ---------- --------- ----------
Net increase (decrease) in capital shares outstanding (28,841) $ (549,227) 114,503 $2,024,691
---------- ----------
---------- ----------
Shares outstanding at beginning of period 1,410,260 1,295,757
--------- ---------
Shares outstanding at end of period 1,381,419 1,410,260
--------- ---------
--------- ---------
The components of net assets at June 30, 1998, are as
follows:
Capital Stock--1,381,419 shares of $1.00 par value
outstanding (50,000,000 authorized) (par and additional
paid-in capital) $20,473,075
Undistributed net investment income 9,793
Accumulated net realized gain on investments 936,756
Net unrealized appreciation of investments 5,513,169
----------
Net assets $26,932,793
----------
----------
</TABLE>
17
<PAGE>
AMERICAN NATIONAL FUNDS GROUP One Moody Plaza, Galveston, Texas 77550
- --------------------------------------------------------------------------------
DIRECTORS
Ralph S. Clifford
Paul D. Cummings
Jack T. Currie
Michael W. McCroskey
Ira W. Painton
Donald P. Stevens
Steven H. Stubbs
OFFICERS
Michael W. McCroskey, President
Gordon D. Dixon, Vice President and
Portfolio Manager
William R. Berger, Vice President and
Portfolio Manager
Brenda T. Koelemay, Vice President and Treasurer
Emerson V. Unger, Vice President
Teresa E. Axelson, Vice President and Secretary
INVESTMENT ADVISOR AND MANAGER
Securities Management and Research, Inc.
One Moody Plaza
Galveston, Texas 77550
CUSTODIAN
Securities Management and Research, Inc.
One Moody Plaza
Galveston, Texas 77550
LEGAL COUNSEL
Greer, Herz & Adams, L.L.P.
One Moody Plaza
Galveston, Texas 77550
UNDERWRITER AND REDEMPTION AGENT
Securities Management and Research, Inc.
One Moody Plaza
Galveston, Texas 77550
TRANSFER AGENT, REGISTRAR AND DIVIDEND PAYING AGENT
Securities Management and Research, Inc.
One Moody Plaza
Galveston, Texas 77550
INDEPENDENT AUDITORS
Tait, Weller & Baker
8 Penn Center
Philadelphia, Pennsylvania 19103
18
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000005533
<NAME> AMERICAN NATIONAL INCOME FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-01-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 158,082,298
<INVESTMENTS-AT-VALUE> 220,260,798
<RECEIVABLES> 277,012
<ASSETS-OTHER> 102,684
<OTHER-ITEMS-ASSETS> 305
<TOTAL-ASSETS> 220,640,799
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 225,337
<TOTAL-LIABILITIES> 225,337
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<PAID-IN-CAPITAL-COMMON> 141,800,359
<SHARES-COMMON-STOCK> 7,470,057
<SHARES-COMMON-PRIOR> 7,360,452
<ACCUMULATED-NII-CURRENT> 79,431
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<NET-ASSETS> 220,415,462
<DIVIDEND-INCOME> 2,291,505
<INTEREST-INCOME> 1,088,321
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<EXPENSES-NET> 1,046,234
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<REALIZED-GAINS-CURRENT> 5,263,453
<APPREC-INCREASE-CURRENT> 13,143,252
<NET-CHANGE-FROM-OPS> 20,740,297
<EQUALIZATION> 0
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<NUMBER-OF-SHARES-SOLD> 572,638
<NUMBER-OF-SHARES-REDEEMED> (537,948)
<SHARES-REINVESTED> 74,915
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<PER-SHARE-NAV-BEGIN> 26.99
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