<PAGE>
AMWAY
MUTUAL
FUND,
INC.
ANNUAL
REPORT
1995
AMF LOGO INSERTED HERE
Printed in U.S.A. SB0606 L-6882-SAC
BULK RATE
U.S. POSTAGE
PAID
ADA, MI
PERMIT 100
AMWAY MUTUAL FUND, INC.7575 Fulton Street EastAda, Michigan 49355-7150
C-149
<PAGE>
AMWAY MUTUAL FUND, INC.
Dear Shareholders:
We are pleased to provide you with the Annual Report for Amway Mutual Fund, Inc.
for the period ended December 31, 1995.
1995 was an extraordinarily successful year for investments in stocks, with
performance results substantially above historical norms. The strength of the
market aided in a successful transition to a new Sub-Advisor for the Fund, Ark
Asset Management, which was approved by shareholders at the Fund's Annual
Meeting held during June, 1995.
We believe that Ark's highly disciplined stock selection process and sell
disciplines will lead to good relative performance as compared to the indices
during strong markets. Also, and of equal importance, these disciplines should
prove successful during volatile and down markets, thereby providing added
protection to your assets during periods of uncertainty.
Included in your Annual Report is a discussion of the factors, market conditions
and the investment strategies and techniques pursued by the Fund, which impacted
the Fund's performance during the calendar year 1995. Even though equity markets
by their very nature may continue to experience volatility, you may help to
temper the effects of market volatility on your investments and reduce the risks
of market-timing decisions through a systematic program of investing on a
regular basis. Such a program does not assure a profit and does not protect
against loss in declining markets.
We will continue our best efforts to provide you with superior performance and
service which enables your investment to grow.
Sincerely,
James J. Rosloniec Allan D. Engel
President and Treasurer Secretary and Assistant Treasurer
DIRECTORS
Richard A. DeWitt
Allan D. Engel
Donald H. Johnson
Walter T. Jones
James J. Rosloniec
INVESTMENT ADVISOR
Amway Management Company
7575 Fulton Street, East
Ada, Michigan 49355-7150
SUB-ADVISOR
Ark Asset Management Co., Inc..
One New York Plaza
New York, NY 10004
TRANSFER AGENT
Amway Stock Transfer Co.
7575 Fulton Street, East
Ada, Michigan 49355-7150
CUSTODIAN
Michigan National Bank
Grand Rapids, Michigan 49501
AUDITORS
BDO Seidman, LLP
99 Monroe Avenue, N.W.
Grand Rapids, Michigan 49503
LEGAL MATTERS
John Dougherty
Attorney At Law
1155 Connecticut Ave. NW, Suite 500
Washington, D.C. 20036
C-150
<PAGE>
AMWAY MUTUAL FUND, INC.
PERFORMANCE REVIEW
The fund is pleased to provide you with an overview of the performance of your
Fund for the year ended December 31, 1995.
Total Return Performance*
For the Year Ended Dec. 31, 1995
(not adjusted for any sales charge)
Amway Mutual Fund, Inc. 30.55%
Russell 1000-Registered Trademark- Growth Index** 37.58%
Standard & Poor's 500 Stock Index*** 38.35%
DIVIDEND REVIEW
For the fiscal year, your Fund experienced an increase of 30.55 percent. The
Fund paid a total of $.11 per share in income dividends and $1.42 per share in
long-term capital gain dividends during the fiscal year.
Following is a review of the Fund's Portfolio Investment Strategy, and
performance results presented by Ark Asset Management Co., Inc., the Fund's Sub-
Advisor.
INVESTMENT REVIEW-1995
One year ago most investors were concerned about too strong an economy, high
inflation, and high interest rates. Investors concluded that the market would
stage a modest rally after a poor 1994. As they say, the rest is history. The
reality of a weaker economy, low inflation, and low interest rates resulted in
an unexpected stock market rally of major proportions in 1995.
During the first six months of 1995, the market, as measured by the S&P 500,
increased 20.2%. This was virtually a straight-up move led by technology issues.
The second half of 1995 was also a strong period for the market, but
characterized by a vicious rotation which began with technology issues doing
well and ended with a big sell-off in the technology group and other areas. This
produced a great deal of under-performance relative to the S&P 500 in the second
half of the year for many investment portfolios.
Your fund under-performed relative to the S&P 500 during the first six months
due to an underweighting relative to the S&P 500, for risk avoidance purposes,
in the most aggressive electronic technology issues and financial stocks which
were also strong, and because of the normal cash reserves that reduced the
Fund's performance. However, the second half produced better relative results
due to initial overweights relative to the S&P 500 in financial, multi-industry
and transportation issues which were complimented by strong performances in
certain consumer related issues and helped by a large underweighting in
technology issues which experienced a sharp decline in the final quarter of the
year.
C-151
<PAGE>
AMWAY MUTUAL FUND, INC..
Ark Investment Management as Sub-Advisor for the Fund, began managing the Fund's
portfolio on May 1, 1995. The portfolio was restructured and positioned so that
it reflected Ark's investment strategies for the second half of 1995. Those
strategies reflect a strong value discipline in our investment process. While
not all issues owned will pay a dividend, most do pay dividends and the yield
will generally be at or higher than that of the S&P 500. Because we have very
conservative sell targets, you will often see that the issues owned at the
beginning of the year will not be in the account at the end of the year.
Especially if an individual stock performs well relative to the market, it would
not be unusual for us to sell that issue and re-invest the proceeds in other
more undervalued stocks.
As an example, one of the reasons for stronger performance relative to the S&P
500 in the second half of 1995 was the overweighting relative to the S&P 500 in
financial assets. However, as these issues moved higher in price over the summer
and early fall we began selling them into strength, particularly the bank
stocks, so that by year end they were underweighted just as they began to under-
perform.
OUTLOOK
The final quarter of 1995 was characterized by a major market sell-off in
technology issues as well as other more economically sensitive issues such as
papers, metals, and retail stores. This sell-off was due to investors' belief
that the economy would remain weak during the first half of 1996 with consumers
paying down debt due to their overuse of credit cards. The Fund has added to
positions in the areas of weakness due to their attractive valuations. We expect
1996 to be a year where many stocks will disappoint investors' expectations for
earnings growth and where it will be far more difficult to earn an acceptable
rate of return than in 1995. With interest rates already low, there is no
guarantee that the bond market will have the positive impact on stock prices in
1996 that it had in 1995. For example, if wages begin to increase at rates above
that of the early nineties, it is possible that the CPI actually would increase
in 1996. This would not be good for interest rates or the stock market.
Offsetting this would be a slightly better economy led by consumer spending and
renewed confidence in government economic policy, assuming a budget agreement is
reached in early 1996.
We begin 1996 with a portfolio which has a lower price-earnings ratio than the
S&P 500. This should allow the Fund to be positioned to defend asset values
during any downturn. It continues to be our expectation that our stock selection
disciplines will help us in rising markets. We expect this will be a year with
increased volatility in the market. The Fund is prepared to respond immediately
to changing market circumstances and expects to have a good year relative to the
S&P 500.
C-152
<PAGE>
AMWAY MUTUAL FUND, INC..
AVERAGE ANNUAL TOTAL RETURNS****
For Periods Ended 12/31/95 (adjusted for the maximum sales charge of 3.00%)
1 5 10
Year Year Year
Amway Mutual Fund, Inc. 27.59% 14.01% 13.22%
Past performance is not predictive of future performance. Returns and net asset
value fluctuate. Shares are redeemable at current net asset value, which may be
more or less than original cost.
Growth of an assumed $10,000 investment in Amway Mutual Fund from 1/3/86 through
12/31/95.
INSERT GRAPH HERE
In comparing the Amway Mutual Fund, Inc. to the two indices, you should also
note that the Fund's performance reflects the maximum sales charge of 3.00%,
while no such charges are reflected in the performance of the indices.
* Total return and average annual total return measure net investment income
and capital gain or loss from portfolio investments, assuming reinvestment of
all dividends and, for average annual total return only, adjustment for the
maximum sales charge of 3.00%. Average annual total return reflects annualized
change while total return reflects aggregate change. During the periods noted,
securities prices fluctuated. For additional information, see the Prospectus and
Statement of Additional Information and the Financial Highlights at the end of
this report.
** The Russell 1000-Registered Trademark- Growth Index is an unmanaged index
to which the Fund has compared its performance in previous years. It is
comprised of common stocks of larger U.S. companies with greater than average
growth orientation. Since it has a growth orientation which is not as dominate
with the new sub-advisor, it will not be used by the Fund for comparison
purposes in the future.
*** The Standard & Poor's 500 Stock Index is an unmanaged index generally
representative of the U.S. stock market.
**** Includes reinvestment of dividends and adjustment for the maximum sales
charge of 3.00%.
C-153
<PAGE>
AMWAY MUTUAL FUND, INC.
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
COMMON STOCK--97.85% Market
Shares Value
------ ------
$
<S> <C> <C>
AUTO REPAIR, SERVICES,
AND GARAGES--1.20%
Ryder System, Inc. 37,500 928,125
---------
BANKING--2.94%
Chemical Banking Corp. 29,500 1,733,125
Nationsbank Corp. 7,700 536,113
---------
2,269,238
---------
BUILDING MATERIALS AND
GARDEN SUPPLIES--.30%
Lowe's Cos. 6,900 231,150
---------
BUSINESS SERVICES--3.56%
Dun & Bradstreet Corp. 9,500 615,125
Nynex Corp. 8,600 464,400
Xerox Corp. 12,200 1,671,400
---------
2,750,925
---------
CHEMICALS & ALLIED
PRODUCTS--6.34%
Bristol-Meyers Squibb Co. 16,600 1,425,525
DuPont (E.I.) De Nemours 23,400 1,635,075
Monsanto Co. 8,800 1,078,000
Pharmacia/Upjohn, Inc. 19,600 759,500
---------
4,898,100
---------
COMMUNICATION--6.14%
AT&T Corp. 18,900 1,223,775
MCI Communications Corp. 34,700 908,706
Sprint Corp. Com. 29,800 1,188,275
*Tele Communication Inc. 71,300 1,421,544
---------
4,742,300
---------
CREDIT AGENCIES OTHER
THAN BANKS--.43%
American Express Co. 8,100 335,138
---------
ELECTRIC & ELECTRONIC
EQUIPMENT--8.14%
Alliedsignal, Inc. 46,900 2,227,750
General Electric Co. 15,600 1,123,200
Raytheon Co. 10,000 472,500
Rockwell International 30,600 1,617,975
Texas Instruments, Inc. 16,400 848,700
---------
6,290,125
---------
ELECTRIC, GAS, &
SANITARY SERVICES--7.04%
Entergy Corp. (New) 14,200 415,350
General Public Utilities Corp. 11,900 404,600
Peco Energy 25,700 774,213
Pacific Gas & Electric Co. 27,900 791,662
Panhandle Eastern Corp. 48,900 1,363,088
Sonat, Inc. 5,100 181,687
WMX Technologies 50,500 1,508,688
---------
5,439,288
---------
FABRICATED METAL
PRODUCTS--.97%
Masco Corp. 23,800 746,725
---------
FOOD AND KINDRED
PRODUCTS--1.21%
Archer-Daniels-Midland 51,930 934,740
---------
GENERAL MERCHANDISE
STORES--6.88%
Dillard Department Stores 43,300 1,234,050
*Federated Department Stores 44,500 1,223,750
May Dept. Stores Co. 33,100 1,398,475
Penney, (J.C.) Inc. 30,600 1,457,325
---------
5,313,600
---------
HEALTH SERVICES--3.80%
Columbia/HCA Healthcare Corp. 30,300 1,537,725
*Tenet Healthcare 67,200 1,394,400
---------
2,932,125
---------
INSTRUMENTS & RELATED
PRODUCTS--1.08%
Eastman Kodak Co. 12,500 837,500
---------
INSURANCE CARRIERS--5.50%
Allstate Corp. 27,000 1,110,375
American International
Group, Inc. 6,700 619,750
Chubb Corp. 7,200 696,600
Loews Corp. 5,500 431,062
Unum Corp. 25,300 1,391,500
---------
4,249,287
---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
C-154
<PAGE>
AMWAY MUTUAL FUND, INC.
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
COMMON STOCK--97.85% Market
Shares Value
------ ------
$
<S> <C> <C>
MACHINERY, EXCEPT
ELECTRICAL--5.62%
Deere & Co. 16,900 595,725
Dresser Industries, Inc. 32,800 799,500
International Business Machines 32,100 2,945,175
---------
4,340,400
---------
METAL MINING--1.63%
Newmont Mining Corp. 27,900 1,262,475
---------
MISCELLANEOUS MANUFAC-
TURING INDUSTRIES--.00%
*Jan Bell Marketing Warrants 762 8
---------
MOTION PICTURES--1.79%
Time Warner, Inc. 36,600 1,386,225
---------
OIL AND GAS
EXTRACTION--7.29%
Burlington Resources 16,000 628,000
Occidental Petroleum Corp. 64,000 1,368,000
*Oryx Energy Co. 22,400 299,600
USX-Marathon Group 70,000 1,365,000
Union Pacific Resources 19,600 497,350
Unocal Corp. 50,600 1,473,725
---------
5,631,675
---------
PAPER & ALLIED
PRODUCTS--4.21%
Champion International Co. 31,200 1,310,400
International Paper Co. 28,500 1,079,437
Kimberly-Clark Corp. 10,400 860,600
---------
3,250,437
---------
PETROLEUM & COAL
PRODUCTS--6.34%
Amerada Hess Corp. 25,300 1,340,900
Atlantic Ritchfield Company 13,100 1,450,825
British Petroleum Ltd. 12,600 1,286,775
Union Pacific Corp. 12,400 818,400
---------
4,896,900
---------
PRIMARY METAL
INDUSTRIES--1.79%
Aluminum Co. of America 18,300 967,612
*LTV Corp. (New) 30,000 412,500
---------
1,380,112
---------
RAILROAD
TRANSPORTATION--.78%
CSX Corp. 13,200 602,250
---------
RUBBER AND MISC.
PLASTICS PRODUCTS--2.35%
Goodyear Tire & Rubber Co. 40,000 1,815,000
---------
SECURITY & COMMODITY
BROKERS & SERVICES--1.99%
Dean Witter Discover, Inc. 32,700 1,536,900
---------
STONE, CLAY & GLASS
PRODUCTS--3.19%
Corning, Inc. 38,600 1,235,200
PPG Industries 26,900 1,230,675
---------
2,465,875
---------
TRANSPORTATION
BY AIR--.32%
*A M R Corp. 3,300 245,025
---------
TRANSPORTATION
EQUIPMENT--5.02%
Ford Motor Co. 59,700 1,731,300
General Dynamics Corp. 9,200 543,950
General Motors Corp. 30,300 1,602,112
---------
3,877,362
----------
Total Common Stock--97.85% 75,589,010
----------
Cash (Michigan National Bank
Money Market Account)--2.18% 1,681,137
All Other Assets Less
Liabilities--(.03%) (21,852)
----------
NET ASSETS--100% 77,248,295
----------
----------
</TABLE>
*Non-dividend producing as of December 31, 1995.
The accompanying notes are an integral part of these financial statements.
C-155
<PAGE>
AMWAY MUTUAL FUND, INC..
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at market
(identified cost $67,458,776)
(Notes 1-A and 3) $75,589,010
Cash 1,681,137
Receivables:
Dividends 98,369
Interest 5,169
Prepaid insurance 2,770
-----------
TOTAL ASSETS 77,376,455
-----------
LIABILITIES:
Accounts payable:
Advisory fee (Note 4) 104,288
Transfer agent fee (Note 4) 18,972
Accrued expenses 4,900
-----------
TOTAL LIABILITIES 128,160
-----------
NET ASSETS:
Capital stock (20,000,000
shares of $1.00 par value
authorized), amount
paid in on 10,399,006
shares outstanding
(Note 2) $69,223,438
Overdistributed
net investment
income (20,841)
Overdistributed
net realized gain on
investments (84,536)
Net unrealized
appreciation on
investments 8,130,234
-----------
Net assets equivalent
to $7.43 per share $77,248,295
-----------
-----------
COMPUTATION OF MAXIMUM
OFFERING PRICE OF THE
FUND'S SHARES--as of
December 31, 1995:
Net asset value per share
($77,248,295 DIVIDED BY
10,399,006 shares) $7.43
-----------
-----------
Offering price per share (net asset
value plus sales commission)
(1000/970 x $7.43) $7.66
-----------
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends $1,486,304
Interest 132,170
Security litigation settlement 17,357
----------
Total income 1,635,831
Expenses:
Advisory fee (Note 4) 378,693
Transfer agent fee (Note 4) 224,896
Shareholder communications 34,162
Data processing service (Note 5) 30,736
Custodian fee 25,613
Legal services 25,608
Audit fees 21,007
Insurance 17,688
Taxes 15,703
Registration fees 7,101
----------
Total expenses 781,207
----------
Fees paid indirectly (Note 5) (30,736)
----------
Net expenses 750,471
----------
NET INVESTMENT INCOME 885,360
----------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS:
Net realized gain (Note 3) 12,273,181
Unrealized appreciation on
investments:
Beginning of year $2,161,922
End of year 8,130,234
----------
Net change in unrealized
appreciation on investments 5,968,312
----------
NET GAIN ON INVESTMENTS 18,241,493
----------
NET INCREASE IN NET ASSETS
RESULTING FROM
OPERATIONS $19,126,853
----------
----------
</TABLE>
C-156
<PAGE>
AMWAY MUTUAL FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------------
1995 1994
----------- -----------
<S> <C> <C>
NET ASSETS FROM OPERATIONS:
Net investment income $ 885,360 $ 268,611
Net realized gain on investments 12,273,181 2,751,964
Net increase (decrease) in unrealized
appreciation 5,968,312 (6,893,752)
----------- -----------
Net increase (decrease) in net assets resulting
from operations 19,126,853 (3,873,177)
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (909,904) (244,772)
Net realized gain from investment transactions (12,305,317) (2,774,081)
----------- -----------
Total distributions to shareholders (13,215,221) (3,018,853)
----------- -----------
CAPITAL SHARE TRANSACTIONS (Notes 2 and 4):
Net proceeds from sale of shares 13,441,433 11,827,075
Net asset value of shares issued to shareholders
in reinvestments of investment income and
realized gain from security transactions 12,658,471 2,891,191
----------- -----------
26,099,904 14,718,266
Payment for shares redeemed (13,684,375) (10,645,747)
----------- -----------
Net increase in net assets derived from capital
share transactions 12,415,529 4,072,519
Net total increase (decrease) 18,327,161 (2,819,511)
NET ASSETS:
Beginning of year 58,921,134 61,740,645
----------- -----------
End of year (includes undistributed
(overdistributed) net investment
income of ($20,841) and $3,703, respectively) $77,248,295 $58,921,134
----------- -----------
----------- -----------
</TABLE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
The Company is registered under the Investment Company Act of 1940 as a
diversified, open-end management investment company.
(A) Security Valuation--Investments in securities listed or admitted to trading
on a national securities exchange are valued at their last reported sale
price before the time of valuation. If a security is traded only in the
over-the-counter market, or if no sales have been reported for a listed
security on that day, it will be valued at the mean between the current
closing bid and ask prices. Securities for which market quotations are not
readily available, including any restricted securities (none at December
31, 1995), and other assets of the Fund are valued at fair market value as
determined in good faith by the Fund's Board of Directors.
(B) Federal Income Taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to make distributions of income and capital gains
sufficient to relieve it from substantially all federal income taxes.
(C) Security Transactions and Related Investment Income--Security transactions
are accounted for on the trade date and dividend income is recorded on the
ex-dividend date. Interest income is recorded on the accrual basis.
Realized gains and losses from security transactions and unrealized
appreciation and depreciation of investments are reported on a specific
identification basis. Dividends and distributions to shareholders are
recorded by the Fund on the ex-dividend date.
C-157
<PAGE>
AMWAY MUTUAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 2--CAPITAL STOCK
At December 31, 1995, there were 20,000,000 shares of $1.00 par value capital
stock authorized. Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------
1995 1994
<S> <C> <C>
Shares:
Outstanding, beginning of year 8,566,411 8,007,216
---------- ----------
Sold 1,917,496 1,543,342
Issued in payment of dividends 1,734,037 428,960
---------- ----------
3,651,533 1,972,302
Redeemed 1,818,938 1,413,107
---------- ----------
Net increase for the year 1,832,595 559,195
---------- ----------
Outstanding, end of year 10,399,006 8,566,411
---------- ----------
---------- ----------
</TABLE>
NOTE 3--INVESTMENT TRANSACTIONS
At December 31, 1995, the cost of investments owned was $67,517,642 for federal
income tax purposes. Aggregate gross unrealized gains on securities in which
there was an excess of market value over tax cost were $8,729,014. Aggregate
gross unrealized losses on securities in which there was an excess of tax cost
over market value were $657,646. Net unrealized gains for tax purposes were
$8,071,368 at December 31, 1995.
Realized gains from sales of investments were determined on the basis of
specific identification. For tax purposes, gains of $12,323,900 were realized on
investments.
For the year ended December 31, 1995, cost of purchases and proceeds from sales
of investments, other than corporate short-term notes, aggregated $119,335,736
and $117,814,475, respectively.
NOTE 4--INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The investment advisory and service contract between the Fund and Amway
Management Company provides for an annual investment advisory and management
fee, computed daily and payable quarterly, of .55 of 1% of total net assets. The
advisory fees incurred by the Fund amounted to $378,693 in 1995. Under the
Principal Underwriter Agreement between the Fund and Amway Management Company,
the adviser receives a net commission for the distribution of the Fund's shares.
This commission amounted to $406,631 in 1995.
Amway Stock Transfer Co. acts as the Fund's agent for transfer of the Fund's
shares and disbursement of the Fund's distributions. The transfer agent fee
incurred by the Fund amounted to $224,896 in 1995.
Certain officers and directors of the Fund are affiliated with the investment
adviser and stock transfer agent.
The officers serve without compensation from the Fund. Directors' fees,
amounting to $13,500 in 1995, were paid by Amway Management Company, the Fund's
investment adviser. The director's payments consist of an annual retainer plus a
per meeting fee.
C-158
<PAGE>
AMWAY MUTUAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(Concluded)
NOTE 5--DATA PROCESSING SERVICE
Portfolio accounting services for the Fund in the amount of $30,736 are paid for
through the use of directed brokerage commissions.
NOTE 6--EVENT SUBSEQUENT TO DECEMBER 31, 1995
A certain class of distributors of Amway Corporation and Amway of Canada, Ltd.
(Corporations) received from each Corporation part of its distributor's profit-
sharing bonus in Amway Mutual Fund, Inc. common stock shares. On January 11,
1996, the Corporations purchased 1,702,736 Amway Mutual Fund shares valued at
$12,515,107 (based on the net asset value of $7.35 per share) and transferred
the shares to these distributors.
SELECTED PER SHARE DATA AND RATIOS
(Selected data for each share of capital stock outstanding throughout each
period.)
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------
1995* 1994 1993 1992 1991 1990 1989 1988 1987 1986
----- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $6.88 $7.71 $7.57 $8.11 $6.82 $7.26 $6.49 $7.87 $7.82 $6.84
Income from investment
operations:
Net investment income .10 .03 .02 .02 .06 .08 .16 .16 .13 .12
Net gain (loss) on securities 1.98 (.49) .78 .10 2.65 (.01) 1.93 .36 .47 .98
----- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total from investment
operations 2.08 (.46) .80 .12 2.71 .07 2.09 .52 .60 1.10
----- ---- ---- ---- ---- ---- ---- ---- ---- ----
Distributions:
Dividends (from net
investment income) .11 .03 .02 .02 .06 .08 .16 .15 .13 .12
Distributions (from
capital gains) 1.42 .34 .64 .64 1.36 .43 1.16 1.75 .42 --
----- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total distributions 1.53 .37 .66 .66 1.42 .51 1.32 1.90 .55 .12
----- ---- ---- ---- ---- ---- ---- ---- ---- ----
Net Asset Value,
end of period $7.43 $6.88 $7.71 $7.57 $8.11 $6.82 $7.26 $6.49 $7.87 $7.82
Total Return** 30.55% (5.87%) 10.85% 1.77% 41.81% 1.01% 32.83% 6.89% 8.02% 16.03%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $77,248 $58,921 $61,741 $55,342 $53,238 $38,286 $39,029 $31,274 $32,765 $34,788
Ratio of expenses to
average net assets*** 1.1% 1.1% 1.1% 1.1% 1.1% 1.2% 1.2% 1.3% 1.1% 1.2%
Ratio of net income to
average net assets 1.2% .4% .2% .3% .7% 1.1% 2.0% 1.9% 1.4% 1.4%
Portfolio turnover rate 173.3% 78.1% 91.5% 136.5% 160.4% 171.1% 14.6% 135.5% 15.3% 21.6%
Average commission
rate per share $.0598 $.0597 $.0682 $.0691 $.0697 $.0708 $.0684 $.0672 $.0669 $.0787
</TABLE>
*Effective May 1, 1995 Ark Asset Management Co., Inc. entered into a Sub-
Advisory Agreement with the Fund. Kemper Financial Services previously
served as the Fund's sub-advisor.
** Total return does not reflect the effect of the sales charge.
*** The Fund's portfolio accounting services expense in the amount of $2,500
per month ($30,000 annual base fee) was paid through the use of directed
brokerage commissions. Ratio reflects fees paid with brokerage commissions
only for calendar years ended December 31, 1995.
C-159
<PAGE>
AMWAY MUTUAL FUND, INC.
INDEPENDENT AUDITORS' REPORT
To the Shareholders and
Board of Directors
Amway Mutual Fund, Inc.
Ada, Michigan
We have audited the accompanying statement of assets and liabilities of Amway
Mutual Fund, Inc., including the schedule of portfolio investments, as of
December 31, 1995, the related statement of operations for the year then ended,
the statement of changes in net assets for each of the two years in the period
then ended and the selected per share data and ratios for each of the ten years
in the period then ended. These financial statements and per share data and
ratios are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements and per share data and
ratios based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and per share data
and ratios are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and selected per share data and ratios. Our procedures included
confirmation of securities owned as of December 31, 1995 by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement and selected per share data and
ratios presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and selected per share data and ratios
referred to above present fairly, in all material respects, the financial
position of Amway Mutual Fund, Inc. as of December 31, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the selected per share data and
ratios for each of the ten years in the period then ended in conformity with
generally accepted accounting principles.
BDO SEIDMAN, LLP
Certified Public Accountants
Grand Rapids, Michigan
January 5, 1996
C-160
