<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITES / /
ACT OF 1933
Pre-effective Amendment No. / /
Post-Effective Amendment No. 42 /x/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENTENT / /
COMPANY ACT OF 1940
Amendment No. 25 /x/
(Check appropriate box or boxes)
AMWAY MUTUAL FUND, INC.
(Exact Name of Registrant as Specified in Charter)
2905 Lucerne Dr SE, Grand Rapids, Michigan 49546-7116
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code: (616) 787-6288
James J. Rosloniec, President and Treasurer
Amway Mutual Fund, Inc.
7575 Fulton Street East
Ada, Michigan 49355-7150
(Name and Address of Agent for Service)
Registrant has registered an indefinite number of shares under the Securities
Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act of 1940.
The Rule 24f-2 Notice for Registrant's year ending December 31, 1996 will be
filed by February 28, 1997.
It is proposed that this filing will become effective (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b)
/x/ on March 21, 1997 pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a) (1)
/ / on (date) pursuant to paragraph (a) (1)
/ / 75 days after filing pursuant to paragraph (a) (2)
/ / on (date) pursuant to paragraph (a) (2) of Rule 485
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
AMWAY MUTUAL FUND, INC.
CROSS REFERENCE SHEET
PART A
Item Caption in Prospectus Page No.
---- --------------------- --------
1 Front Page 1
2 Fee Expense Table 2
3 Financial Highlights 3
4 The Fund 3
The Fund's Investment Policy 4
5 Management of the Fund 4
6 Description of Common Stock 9
Stockholder Inquiries 10
Dividend and Capital Gain Distributions to Shareholders 9
Tax Consequences 9
7 Purchase of Shares 6
Determination of Net Asset Value and Offering Price of 8
the Fund's Shares
8 How Shares are Redeemed 8
9 Not Applicable --
PART B
Item Caption in Statement of Additional Information Page No.
---- ---------------------------------------------- --------
10 Cover Page 1
11 Contents 16
12 Not Applicable --
13 Objectives, Policies and Restrictions on Fund's
Investments 3
14 Officers and Directors of the Fund 5
15 Principal Shareholders 5
16 Investment Adviser 6
Transfer Agent 9
Dividend Disbursing Agent 9
Custodian 9
Auditors 9
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AMWAY MUTUAL FUND, INC.
CROSS REFERENCE SHEET
PART B (Continued)
Item Caption in Statement of Additional Information Page No.
---- ---------------------------------------------- --------
17 Portfolio Transactions and Brokerages 4
18 Voting Rights of Common Shareholders 9
19 Purchase of Shares 9
Determination of Net Asset Value and Offering Price of
the Fund's Shares 10
How Shares are Redeemed 11
Reinvestment Privilege 11
Money Market Fund Exchange Privilege 12
20 Federal Income Tax 13
21 Distribution of Shares 8
22 Investment Performance Information 14
23 Reports to Stockholders and Annual Audit 15
<PAGE>
AMWAY MUTUAL FUND, INC.
FORM N-1A
PART A
Information Required in a Prospectus
<PAGE>
AMWAY MUTUAL FUND, INC.
7575 Fulton Street East
Ada, Michigan, 49355-7150
(616) 787-6288
(800) 346-2670
Contents Page
Fee Expense Table 2
Financial Highlights 3
The Fund 3
The Fund's Investment Policy 4
Management of the Fund 4
Purchase of Shares 6
How Shares are Redeemed 6
Exchange Privilege 8
Determination of Net Asset Value and
Offering Price of the Fund's Shares 8
Retirement Plans 9
Description of Common Stock 9
Dividend and Capital Gain Distributions
to Shareholders 9
Tax Consequences 9
Shareholder Inquiries 10
Investment Performance Information 10
AMWAY MUTUAL FUND LOGO
PROSPECTUS
The primary investment objective of the Fund is capital appreciation through
the ownership of common stock of companies in various industries which offer
growth potential. Income, while a factor in portfolio selection, is secondary to
the Fund's principal objective.
This Prospectus sets forth information regarding the Fund that a prospective
investor should know prior to investing. Investors are advised to carefully read
and retain this Prospectus for future reference. Additional information about
the Fund has been filed with the United States Securities and Exchange
Commission. Such information may be examined by any person at the Securities and
Exchange Commission in Washington, D.C. or may be obtained from the Commission
upon payment of the prescribed fee. Prospective investors may request, without
charge, the Statement of Additional Information, dated March 21, 1997, by
writing or telephoning the Fund as indicated above. The Statement of Additional
Information is incorporated into this Prospectus by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is March 21, 1997.
1
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AMWAY MUTUAL FUND, INC.
FEE EXPENSE TABLE
Shareholder Transaction Expenses
Maximum Sales Charge Imposed on Purchases 3.00%
(as a percentage of offering price)
Maximum Sales Charge Imposed on Reinvested None
Dividends (as a percentage of offering price)
Deferred Sales Charge (as a percentage of None
original purchase price or redemption proceeds, as applicable)
Redemption Fees (as a percentage of amount None
redeemed, if applicable)
Exchange Fee None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees .55%
12b-1 Fees None
Other Expenses .45%
------
Total Fund Operating Expenses 1.00%
------
Example*
1 year 3 years 5 years 10 years
An investor would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return and
(2) redemption at the end of each
time period: $40 $63 $88 $159
*This example should not be considered a representation of past or future
expenses and actual expenses may be greater or lesser than those shown.
The purpose of the fee table is to provide an investor with an understanding
of the various costs and expenses incurred by all shareholder accounts that an
investor will bear directly or indirectly. The sales charge imposed reflects the
sales charge which is discussed under "Determination of Net Asset Value and
Offering Price of the Fund's Shares" found on page 8 of this Prospectus. Annual
Fund operating expenses are based upon total expenses incurred by the Fund for
the year ended December 31, 1996 including the Fund's portfolio accounting
service expenses in the amount of $2,500 per month ($30,000 annually) which was
paid through the use of directed brokerage commissions. The example, as required
by the Securities and Exchange Commission, assumes a 5% annual return in
determining the total expenses paid on an investment. Therefore, future expenses
may be greater or lesser than those shown in the example. Expenses include only
those expenses incurred by all shareholder accounts and not those expenses
incurred for specific shareholder purposes such as bank fees for wire transfers
under $5,000 which is currently $15 (see "How Shares Are Redeemed"),
Individual Retirement Accounts, or Profit-Sharing Trusts.
2
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AMWAY MUTUAL FUND, INC.
FINANCIAL HIGHLIGHTS
The table below shows financial information for Amway Mutual Fund, Inc.
expressed in terms of one share outstanding throughout the period. The
information in the tables is covered by the report of the Fund's independent
auditors. The report is contained in the Fund's Registration Statement available
from the Fund. The financial statements are contained in the Fund's 1996 Annual
Report to Shareholders along with additional information about the performance
of the Fund which may be obtained by writing or calling the Fund.
(Selected data for each share of capital stock outstanding throughout each
period.)
<TABLE>
<CAPTION>
Year ended December 31,
1996 1995* 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $7.43 $6.88 $7.71 $7.57 $8.11 $6.82 $7.26 $6.49 $7.87 $7.82
Income from investment
operations:
Net investment income .10 .10 .03 .02 .02 .06 .08 .16 .16 .13
Net gain (loss) on securities 1.59 1.98 (.49) .78 .102 .65 (.01) 1.93 .36 .47
---- ---- ----- --- ---- --- ----- ---- --- ---
Total from investment
operations 1.69 2.08 (.46) .80 .122 .71 .072 .09 .52 .60
---- ---- ----- --- ---- --- ----- ---- --- ---
Distributions:
Dividends (from net
investment income) .09 .11 .03 .02 .02 .06 .08 .16 .15 .13
Distributions (from
capital gains) 1.41 1.42 .34 .64 .64 1.36 .43 1.16 1.75 .42
---- ---- --- --- --- ---- --- ---- ---- ---
Total distributions 1.50 1.53 .37 .66 .66 1.42 .51 1.32 1.90 .55
---- ---- --- --- --- ---- --- ---- ---- ---
Net Asset Value,
end of period $7.62 $7.43 $6.88 $7.71 $7.57 $8.11 $6.82 $7.26 $6.49 $7.87
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Total Return** 23.18% 30.55% (5.87%) 10.85% 1.77% 41.81% 1.01% 32.83% 6.89% 8.02%
Ratios/Supplemental Data
Net assets, end of period
(000's omitted) $113,327 $77,248 $58,921 $61,741 $55,342 $53,238 $38,286 $39,029 $31,274 $32,765
Ratio of expenses to
average net assets*** 1.0% 1.1% 1.1% 1.1% 1.1% 1.1% 1.2% 1.2% 1.3% 1.1%
Ratio of net income to
average net assets 1.2% 1.2% .4% .2% .3% .7% 1.1% 2.0% 1.9% 1.4%
Portfolio turnover rate 100.4% 173.3% 78.1% 91.5% 136.5% 160.4% 171.1% 14.6% 135.5% 15.3%
Average commission
rate per share $.0600 $.0598 $.0597 $.0682 $.0691 $.0697 $.0708 $.0684 $.0672 $.0669
</TABLE>
The Supplementary Information has been audited by BDO Seidman, the Independent
Certified Public Accountants for the Fund.
*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. The ratio includes fees paid with brokerage commissions for fiscal
years ending after September 1, 1995.
THE FUND
Amway Mutual Fund, Inc. was incorporated February 13, 1970, under Delaware
law by Amway Corporation. The Fund is an investment company which is classified
as an "open-end," diversified management company. This is a means by which
many persons can, by purchasing shares of the Fund, pool relatively small
amounts for a more diversified managed investment in securities than would be
possible for a single investor. As an "open-end" company, the Fund will redeem
(buy back) its shares, upon the request of a shareholder, at the net asset value
at the time of redemption (see "How Shares Are Redeemed"). As a fundamental
policy, the Fund will not invest more than 25% of the value of its assets in any
one industry.
3
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AMWAY MUTUAL FUND, INC.
THE FUND'S INVESTMENT POLICY
The primary investment objective of the Fund is capital appreciation. Income,
while a factor in portfolio selection, is secondary to the Fund's principal
objective. In pursuing this objective, it is the Fund's policy to invest a major
portion of its assets in common stocks (or securities convertible into or with
rights to purchase common stock) of companies believed by the Fund to offer good
growth potential over both the intermediate and the long-term period. However,
when current market or economic conditions make it seem advisable by the Fund to
do so, for temporary defensive reasons, the Fund may invest all or any portion
of its assets in other types of securities, including preferred stocks, high-
grade debt securities, or obligations of the United States or of any State, or
may hold its assets in cash.
In view of the Fund's investment objective of capital appreciation, with income
as a secondary objective, the Fund intends to purchase securities for long-term
or short-term profits, as appropriate. Securities will be disposed of in
situations where, in management's opinion, such potential is no longer feasible
or the risk of decline in the market price is too great. Therefore, in order to
achieve the Fund's objectives, the purchase and sale of securities will be made
without regard to the length of time the security is to be held. Portfolio
turnover rates for the years ended December 31, 1996, 1995, and 1994 were
100.4%, 173.3%, and 78.1%, respectively. The Fund's portfolio turnover rate
increased during 1995 as a result of the restructuring of the Fund's portfolio
by the new Sub-Advisor. A portfolio turnover rate greater than 100% may affect
the brokerage costs payable by the Fund and may cause the Fund to have
additional realized gains or losses which would be reportable for tax purposes.
Although care is being exercised in the selection of securities for investment
by the Fund, the Fund's investments are affected by market fluctuations and are
subject to the risks common to all security investments. Therefore, there can be
no certainty that the Fund's growth or income objective will be realized.
The Fund's investment objective and policy as described above is fundamental
and may not be changed without the approval of the lesser of (i) 67% or more of
the shares present at a meeting at which the holders of more than 50% of the
shares are present in person or represented by proxy, or (ii) more than 50% of
the outstanding shares of the Fund.
MANAGEMENT OF THE FUND
The business and affairs of the Fund are managed and under the direction of the
Board of Directors. The Certificate of Incorporation for the Fund permits,
subject to the approval of the Board of Directors, the Fund to enter into
agreements with one or more persons to manage the assets of the corporation.
The Fund has entered into an Advisory and Service Contract ("Contract") with
Amway Management Company (the "Investment Advisor"), 7575 Fulton Street East,
Ada, Michigan 49355. Under the Contract, the Fund employs the Investment Advisor
to furnish investment advice and manage on a regular basis the investment
portfolio of the Fund, subject to the direction of the Board of Directors of the
Fund, and to the provisions of the Fund's current Prospectus; to furnish for the
use of the Fund, office space and all necessary office facilities, equipment and
personnel for servicing the investments of the Fund, and (with certain specific
exceptions) administering its affairs; and to pay the salaries and fees of all
Officers and Directors of the Fund. Except when otherwise specifically directed
by the Fund, the Investment Advisor will make investment decisions on behalf of
the Fund and place all orders for the purchase and sale of portfolio securities
for the Fund's account. The Investment Advisor shall be permitted to enter into
an agreement with another advisory organization (sub-advisor), whereby the sub-
advisor will provide all or part of the investment advice and services required
to manage the Fund's investment portfolio as provided for in this agreement.
Amway Management Company has served as Investment Advisor for the Fund since
1971. In return for its Investment Advisor services, the Fund pays the
Investment Advisor quarterly, pursuant to the Contract, a fee amounting on an
annual basis to approximately .55 of 1% of the average daily net asset value of
the Fund.
4
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AMWAY MUTUAL FUND, INC.
The Investment Advisor has entered into a Sub-Advisory Agreement with Ark Asset
Management Co., Inc. ("Sub-Advisor"), One New York Plaza, New York, NY 10004.
Under the Sub-Advisory Agreement, the Advisor employs the Sub-Advisor to furnish
investment advice and manage on a regular basis the investment portfolio of the
Fund, subject to the direction of the Advisor, the Board of Directors of the
Fund, and to the provisions of the Fund's current Prospectus. Except when
otherwise specifically directed by the Fund or the Advisor, the Sub-Advisor will
make investment decisions on behalf of the Fund and place all orders for the
purchase or sale of portfolio securities for the Fund's account. The Sub-Advisor
is engaged in the management of investment funds for institutional clients in
excess of $23 billion. The Sub-Advisor and its affiliates provide investment
advice and manage investment portfolios for other corporate, pension, profit-
sharing and individual accounts. For services rendered, the Investment Advisor,
not the Fund, will pay the Sub-Advisor a fee amounting on an annual basis to
approximately .45 of 1% of the average daily net asset value of the Fund.
C. Charles Hetzel, Vice Chairman of Ark Asset Management, Inc., is the head of
the Growth at a Reasonable Price Group, which, since April 1995, has been
responsible for management of the Fund's portfolio. He has served as the head of
the Growth at a Reasonable Price Group since 1981. Mr. Hetzel has spent his
entire career at Ark Asset Management, Inc. or a predecessor firm. He received a
B.S. degree from the University of Utah and M.B.A. from the Columbia School of
Business Administration.
The Growth at a Reasonable Price Group determines overall investment strategy
for equity portfolios managed by the Sub-Advisor. The Growth at a Reasonable
Price Group, in addition to Mr. Hetzel, consists of Steven M. Steiner, John E.
Bailey, William G. Steuernagel, and James G. Pontone. The portfolio managers
work together as a team with the firm's research analysts. Equity analysts,
through research, analysis and evaluation, work to develop investment ideas
appropriate for these portfolios. These ideas are studied and debated by the
Growth at a Reasonable Price Group and decisions regarding the portfolio are
made by the Group. After investment decisions are made, equity traders execute
the portfolios transactions through various broker-dealer firms.
Amway Stock Transfer Co., 7575 Fulton Street East, Ada, Michigan 49355,
performs the Transfer Agent function for the Fund and serves as the dividend
disbursing agent.
Jay Van Andel and Richard M. DeVos are controlling persons of the Investment
Advisor and Transfer Agent, since they own, together with their spouses,
substantially all of the outstanding securities of Amway Corporation, which in
turn owns all the outstanding securities of each entity. Amway Corporation is a
Michigan manufacturer and direct selling distributor of home care and personal
care products.
The Fund's total expenses for the year ending December 31, 1996, as a percentage
of the average net assets of the Fund was 1.0%.
5
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AMWAY MUTUAL FUND, INC.
PURCHASE OF SHARES
Pursuant to a Principal Underwriter Agreement, the Investment Advisor acts as
exclusive agent for the sale of shares of the Fund. The minimum initial
investment required to establish an account is $500. An additional investment in
the minimum amount of $50 can be made in your account at any time. Investments
are made at the offering price, which includes a sales charge (see
"Determination of Net Asset Value and Offering Price of the Fund's Shares"),
next determined after the Fund receives your purchase application and
investment.
You may open a new account with the Fund by completing the enclosed
application, submitting your check made payable to Amway Management Company and
mailing the required information to Amway Management Company, 7575 Fulton Street
East, Ada, Michigan 49355-7150.
You may make additional investments to existing accounts by mail, wire, or by
the use of the pre-authorized check privilege. When making an additional
investment by check, please tear-off the stub from your statement of account, or
enclose a letter of instructions including your account number and your check
made payable to Amway Management Company. Wire transfers would normally be used
for large purchases. You may also arrange to make periodic investments through
automatic deductions from your checking account by completing the appropriate
form and providing the necessary documentation to establish this privilege.
Please contact the Fund for additional information for utilizing either of these
two options.
HOW SHARES ARE REDEEMED
The Fund will redeem your shares upon receiving a proper request. There is no
redemption charge by the Fund. However, if a shareholder uses the services of a
broker-dealer for the repurchase, there may be a charge by the broker-dealer to
the shareholder for such services. Shares can be redeemed by the mail, telephone
or telegram, or through the automatic withdrawal plan as described below.
When redeeming by mail, if no certificates have been issued, you need only send
a written request for redemption to Amway Stock Transfer Co., the Transfer
Agent, 7575 Fulton Street East, Ada, Michigan 49355-7150. This request must
state the portion of your account to be redeemed, including your account number
and the signature of each account owner, signed exactly as your name appears on
the records of the Fund. If a certificate has been issued to you for the shares
being redeemed, the certificate (endorsed or accompanied by a signed stock
power) must accompany your redemption request, with your signature guaranteed
without qualification by a national bank; a state bank; a member firm of a
principal stock exchange or other entity described in accordance with Rule 17Ad-
15 under the Securities Exchange Act of 1934. Additional documents may be
required in the event of special circumstances (described below).
You can request the telephone or telegram exchange or redemption option by so
indicating on your application. You may redeem shares under this option by
calling the Fund at the number indicated on the front of this Prospectus on any
business day before 4:00 p.m., Eastern Time. By establishing the telephone or
telegram exchange or redemption option, you authorize the Transfer Agent to
honor any telephone or telegram exchange or redemption request from any person
representing themselves to be the investor. Procedures required by the Fund to
ensure that a shareholder's requested telephone or telegram transaction is
genuine include identification by the shareholder of the account by number,
recording of the requested transaction and sending a written confirmation to
shareholders reporting the requested transaction. The Fund is not responsible
for unauthorized telephone or telegram exchanges or redemptions unless the Fund
fails to follow these procedures. Shares must be owned for 15 days before
redeeming by the telephone and telegram exchange and cannot be in certificate
form unless the certificate is tendered with the request for redemption.
Certificated shares cannot be redeemed by the telephone and telegram exchange.
All redemption proceeds will be forwarded to the address or bank designated on
the account application.
6
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AMWAY MUTUAL FUND, INC.
The Transfer Agent and the Fund have reserved the right to change, modify, or
terminate the telephone or telegram exchange or redemption option at any time.
Before this option is effective for a corporation, partnership, or other
organizations, additional documents may be required. This option is not
available for Profit-Sharing Trust and Individual Retirement Accounts.
Additional documents may be required in the event of special circumstances
(described below). The Fund and the Transfer Agent disclaim responsibility for
verifying the authenticity of telephone and telegram exchange or redemption
requests which are made in accordance with the procedures approved by
shareholders.
If the value of your account is $10,000 or more, you may arrange to receive
automatic periodic cash payments. Please contact the Fund for more information.
Redemption proceeds are normally paid in cash (check form) and mailed to the
address of record within two or three business days after a proper request is
received, but in no event later than seven days. A request that redemption
proceeds be wired or mailed to your bank of record will be honored provided the
bank account registration matches exactly the Fund account registration. Wire
transfers will normally be used for large redemptions. Any bank charges charged
the Fund for wire redemptions under $5,000 (currently $15) will be deducted from
your redemption proceeds. This charge is subject to change without notice. Your
bank may charge you for receiving wires. Your bank registration information
should be provided on the account application if this option will be used.
Before redeeming shares, in special circumstances, the Transfer Agent may
request additional documents such as, but not limited to, a stock power, a trust
instrument, a certificate of death, an appointment as personal representative,
court orders, a divorce decree or property settlement, a certification of
corporate authority, and a waiver of tax required in some states when settling
estates. These procedures are for the protection of shareholders and to ensure
proper payment. An inquiry as to the proper redemption requirements should be
directed to the Transfer Agent if these circumstances are present.
When redeeming shares from an Individual Retirement Account, you will be
subject to withholding of Federal income tax, unless you elect not to have
withholding apply. When redeeming shares from a Profit-Sharing Trust, you will
generally be subject to withholding of Federal income tax. Therefore, you will
be required to complete a Distribution Election Form prior to redemption from
these accounts.
The price at which shares will be redeemed by the Fund is the net asset value
per share as next computed after a proper request is received. However, your
right to redeem might be suspended or postponed for more than seven days if the
New York Stock Exchange is closed, other than weekends or holiday closings, or
trading on the Exchange is restricted or the Securities and Exchange Commission
deems an emergency exists. The Fund will not mail redemption proceeds until
checks (including certified or cashier's checks) received for the shares
purchased have cleared. The amount you receive may be more or less than your
cost, depending on the net asset value of the shares at the time of redemption
and will result in an event reportable for tax purposes.
Shareholders who have redeemed their shares have a one-time right to invest in
shares of the Fund at the net asset value per share without payment of a sales
charge. (If the sole purpose of the redemption is to invest the proceeds at the
next determined net asset value in the Profit-Sharing Trust or Individual
Retirement Account the right is unlimited.) Reinvestment must be made within ten
days of the redemption and is limited to no more than the amount of the
redemption proceeds.
7
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AMWAY MUTUAL FUND, INC.
MONEY MARKET FUND EXCHANGE PRIVILEGE
The Underwriter for Amway Mutual Fund, Inc. ("Fund") has arranged for shares
of the three money market portfolios of Cash Equivalent Fund, an open-end money
market mutual fund ("Money Market Fund") to be available in exchange for
shares of the Fund for shareholders residing in the U.S. Also, clients of the
Underwriter can exchange shares in the Money Market Fund for shares of the Fund.
Shares of the Money Market Fund so acquired (including any reinvested dividends
thereon) may be re-exchanged for shares of the Fund without sales charge. All
other shares will be subject to the sales charge (see "Determination of Net
Asset Value and Offering Price of the Fund's shares"). The Underwriter receives
a maximum fee from Kemper Financial Services, Inc., the distributor and
administrator for the Money Market Fund, of .38 of 1% per year of the average
daily net asset value of shares of the Money Market and Government Securities
Portfolios, and of .33 of 1% per year of the average daily net asset value of
shares of Tax-Exempt Portfolio, acquired through this exchange privilege. This
exchange privilege does not constitute an offering or recommendation by the Fund
of the Money Market Fund. The Money Market Fund is separately managed.
The above described Exchange Privilege may be exercised by sending written
instruction to the Transfer Agent. See "How Shares Are Redeemed" for
applicable signatures and signature guarantee requirements. Shareholders may
authorize telephone or telegram exchanges or redemptions by making an election
on your application. Procedures required by the Fund to ensure that a
shareholder's requested telephone or telegram transaction is genuine include
identification by the shareholder of the account by number, recording of the
requested transaction and sending a written confirmation to shareholders
reporting the requested transaction. The Fund is not responsible for
unauthorized telephone or telegram exchanges unless the Fund fails to follow
these procedures. Shares must be owned for 15 days before exchanging and cannot
be in certificate form unless the certificate is tendered with the request for
exchange. An exchange requires the purchase of shares of the particular
portfolio of the Money Market Fund with a value of at least $1,000 to establish
a new account or $100 to add to an existing account. Exchanges will be accepted
only if the registration of the two accounts is identical. Exchange redemptions
and purchases are effected on the basis of the net asset value next determined
after receipt of the request in proper order by the Fund. In the case of
exchanges into the Money Market Fund, dividends generally commence on the
following business day. For federal and state income tax purposes, an exchange
is treated as a sale and may result in a capital gain or loss, although if the
shares exchanged have been held less than 91 days, the sales charge paid on such
shares is not included in the tax basis of the exchanged shares, but is carried
over and included in the tax basis of the shares acquired.
A prospectus for the Money Market Fund which contains information concerning
charges and expenses may be obtained from the Underwriter. A shareholder should
read the prospectus carefully and consider differences in objectives and
policies before making any exchange. The Fund or the Underwriter can change or
discontinue this privilege, although shareholders generally would be given 60
days advance notice of any termination or material amendment of the Fund
Exchange Privilege and shareholders who had exchanged into the Money Market Fund
generally would be permitted to reacquire shares of the Fund without sales
charge for at least 60 days after notice of termination of the Exchange
Privilege with the Money Market Fund.
DETERMINATION OF NET ASSET VALUE AND OFFERING PRICE
OF THE FUND'S SHARES
The net asset value of the Fund's shares is determined by dividing the total
current value of the assets of the Fund, less its liabilities, by the number of
shares outstanding at that time. This determination is made as of the close of
business on the New York Stock Exchange, 4:00 P.M. Eastern time, on each
business day on which that Exchange is open or on any other day in which there
is a sufficient degree
8
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AMWAY MUTUAL FUND, INC.
of trading in the Fund's portfolio, except no computation will be made on a day
in which no order to purchase or redeem shares was received.
In determining the current value of the Fund's assets, securities listed or
admitted to trading on a national securities exchange are valued at their last
reported sale price on the market where principally traded, 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 asked prices. Securities for which
market quotations are not readily available, including any restricted
securities, and other assets of the Fund are valued at fair market value as
determined in good faith by the Fund's Board of Directors.
The offering price is the net asset value per share at the next determined
value after the order is placed, as determined above, plus a sales charge.
Presently the maximum sales charge is 3% of the offering price or 3.09% of the
amount invested.
Sales charges do not apply to shares of the portfolio purchased (1) as a
reinvestment of the dividend and capital gain distribution; (2) if you are a
current or retired director, officer, employee or a spouse or minor child
thereof for the Fund's Principal Underwriter, Advisor, or Sub-Advisor; or a
director, officer or shareholder of Amway Corporation, the parent of the
Advisor; or (3) if you are a current or former director, officer or a spouse
or minor child thereof, for the Fund. In addition, sales charges are reduced
for the excess amount, when the amount invested plus the value of the account
results in a single account which falls within the ranges shown below:
Sales Charge as a Percentage Sales Charge as a Percentage
Ranges of the Offering Price of the Net Amount Invested
First $250,000 3% 3.09%
Next $250,000 2% 2.04%
Next $500,000 1% 1.01%
Excess over $1,000,000 none none
RETIREMENT PLANS
The Fund sponsors a prototype Profit-Sharing Trust and Individual Retirement
Account. Persons interested in additional information regarding these plans
should contact the Fund.
DESCRIPTION OF COMMON STOCK
The authorized capital stock of the Fund consists of 20,000,000 shares of
common stock with par value of $1 each, all of which are of one class and have
equal rights as to voting, dividends, redemption, liquidation, and other
matters. All shares issued and outstanding are fully paid and nonassessable,
have no preemptive or conversion rights, and are freely transferable.
Each share or fractional share of common stock that you own entitles you to one
vote at all meetings of shareholders, either in person or by proxy. The Fund's
shares have non-cumulative voting rights.
DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS TO SHAREHOLDERS
It is the policy of the Fund to distribute to shareholders each year as
dividends and distributions substantially all net investment income of the Fund
for the year and substantially all net capital gains received by the Fund, if
any. Such distributions, in the past, have been paid in December. Net investment
income and capital gain distributions, if any, will be paid on a basis which is
consistent with past policy. All net investment income and capital gain
distributions may be received in cash or reinvested in additional shares of the
Fund at their net asset value at the time of distribution, at no sales charge.
This election can be changed at any time by requesting a change in writing,
signed by all account owners.
9
<PAGE>
TAX CONSEQUENCES
The Fund intends to continue to comply with the provisions of Subchapter M of
the Internal Revenue Code. Therefore, the Fund intends to distribute
substantially all net investment income and realized capital gains, if any.
Dividends derived from net investment income and net short-term capital gains
are taxable to shareholders as ordinary income and long-term capital gain
dividends are taxable to shareholders as long-term capital gain regardless of
how long the shares have been held and whether received in cash or reinvested in
additional shares of the Fund. Long-term capital gain dividends received by
individual shareholders are taxed at a maximum rate of 28%. Shareholders not
subject to tax on their income will not be required to pay tax on amounts
distributed to them. Each shareholder will receive a statement annually
informing them of the amount of the income and capital gains which have been
distributed by the Fund during the calendar year.
In addition, shareholders may realize a capital gain or loss when shares are
redeemed. For most types of accounts, the Fund will report the proceeds of
redemptions to shareholders and the IRS annually. However, because the tax
treatment also depends on the purchase price and a shareholder's personal tax
position, you should also keep your regular account statements to use in
determining your tax.
On the record date for a distribution, the Fund's share value is reduced by the
amount of the distribution. If a shareholder buys shares just before the record
date ("buying a dividend"), they will pay the full price for the shares, and
then receive a portion of the price back as a taxable distribution.
The Fund is required by law to withhold 31% of taxable dividends and
redemption proceeds paid to certain shareholders who do not furnish correct tax
payer identification numbers (in the case of individuals, a social security
number) and in certain other circumstances. Trustees of qualified retirement
plans are required by law to withhold 20% of the taxable portion of any
distribution that is eligible to be "rolled over." The 20% withholding
requirement does not apply to distributions from IRA's or any part of a
distribution that is transferred directly to another qualified retirement plan,
403(b)(7) account or IRA. Shareholders should consult their tax advisor
regarding the 20% withholding requirement.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to the Fund by writing or telephoning
the Fund at the address or telephone number indicated on the cover page of the
Prospectus. Information relating to a specific account will be disclosed,
pursuant to a telephone inquiry, only if the shareholder identifies the account
by account number or by the social security number listed on the account.
10
<PAGE>
INVESTMENT PERFORMANCE INFORMATION
Following is a table illustrating the Fund's performance for annual periods
ended December 31, 1996, and its average annual total return percentages for
one, five, and ten years.
<TABLE>
<CAPTION>
Accumulative Accumulative
Value of Shares Value of Shares
Calendar Years Cost of Value of Accepted As Accepted As
Ended Initial Initial Capital Gain Ordinary Income Total
December 31 Investment Investment Distributions Dividends Value
<S> <C> <C> <C> <C> <C>
1987 $1,000 $ 978 $ 56 $ 15 $1,049
1988 806 284 31 1,122
1989 902 525 63 1,490
1990 847 583 74 1,505
1991 1,007 1,025 101 2,134
1992 940 1,130 101 2,171
1993 958 1,341 108 2,407
1994 855 1,305 106 2,266
1995 923 1,885 150 2,958
1996 947 2,506 191 3,644
Average Annual
Total Return For
Periods Ended The Period Ended
December 31, 1996 On December 31, 1996
One Year 19.64%
Five Years 12.02%
Ten Years 13.80%
</TABLE>
Total return performance for the Fund is calculated by making an initial
investment of $1,000 at the beginning of the period, in the Fund's shares at the
asking price, which price includes the maximum sales charge of 3.0% (see
"Determination of Net Asset Value and Offering Price of the Fund's Shares")
and reinvesting all ordinary income dividends and capital gain distributions
paid during the period in additional shares at net asset value per share on the
reinvestment dates. Prior to 1991 the Fund had a maximum sales charge of 6%
based upon amount of shares purchased. The illustration includes recurring
expenses incurred by all shareholder accounts and not those incurred for
specific shareholder purposes such as bank fees for wire transfers, Individual
Retirement Accounts, or Profit-Sharing Trusts. The average annual total return
for the Fund for a specific period is found by dividing the ending total value
by the cost of the initial investment for the period and taking this quotient to
the Nth root, then subtracting 1 (N represents the number of years in the
period). The average annual total return reflects the hypothetical annually
compounded return that would have produced the same cumulative total return if
the Fund's performance had been constant over the entire period. Such
calculation is with all ordinary income dividends and capital gain distributions
reinvested at net asset value and after adjustment for the sales charge. No
adjustment has been made for any income taxes payable by shareholders on
ordinary income dividends and capital gain distributions accepted in shares
which are payable by shareholders in the tax year received. Since the sales
charge is paid at the time the initial investment is made, it has the greatest
impact on the average annual total return percentage for one year. The total
return during calendar year 1996 for accounts in existence prior to January 1,
1996, including reinvestment of all ordinary income dividends and capital gain
distributions, was 23.18%.
Average annual total return percentages of the Fund will vary and the
publication of performance results is not a representation as to future
investment performance. Factors affecting the Fund's performance include general
market conditions, operating expenses and investment management. Net asset
values of the Fund will fluctuate. Additional information about the performance
of the Fund is contained in the Annual Shareholders Report which can be obtained
without charge.
11
<PAGE>
BULK RATE
U.S. POSTAGE
PAID
ADA, MI
PERMIT 100
AMWAY MUTUAL FUND, INC.
7575 Fulton Street East
Ada, Michigan 49355-7150
- ------------------------------
AMWAY
MUTUAL
FUND,
INC.
PROSPECTUS
MARCH 21, 1997
AMWAY MUTUAL FUND LOGO
- ------------------------------
12
<PAGE>
AMWAY MUTUAL FUND, INC.
FORM N-1A
PART B
Information Required in a Statement of Additional Information
<PAGE>
AMWAY MUTUAL FUND LOGO
STATEMENT OF ADDITIONAL INFORMATION
AMWAY MUTUAL FUND, INC.
7575 Fulton Street East
Ada, Michigan 49355-7150
(616) 787-6288
(800) 346-2670
This Statement of Additional Information is not a prospectus and, therefore,
should be read only in conjunction with the Prospectus, which can be requested
from the Fund by writing or telephoning as indicated above. This Statement Of
Additional Information relates to the Prospectus for the Fund dated March 21,
1997.
The date of this Statement of Additional Information is March 21, 1997.
1
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
2
<PAGE>
AMWAY MUTUAL FUND, INC.
OBJECTIVES, POLICIES AND RESTRICTIONS ON THE FUND'S INVESTMENTS
The primary investment objective of the Fund is capital appreciation, through
the ownership of common stock of companies in various industries which offer
growth potential. Income, while a factor in portfolio selection, is secondary to
the Fund's principal objective. In addition to the discussion found in the
Prospectus, following is additional information concerning the Fund's
investments.
The Fund has the right to invest up to 10% of its total assets in securities
which are not readily marketable, including "restricted securities"
(securities which have not been registered with the Securities and Exchange
Commission or which are subject to contractual restrictions on resale).
The Fund is subject to certain investment restrictions. In brief, these provide
that the Fund may not:
1. Underwrite securities of other issuers, except that it may acquire
portfolio securities under circumstances where, if sold publicly, it might
be deemed to be an underwriter for purposes of the Securities Act of 1933,
but no more than 10% of the value of the Fund's total assets will at any
time be invested in such securities.
2. Invest more than 5% of its total assets in the securities of any one
issuer other than the United States Government or purchase more than 10%
of any class of securities, including voting securities, of any one
issuer.
3. Purchase interests in real estate as an investment, other than readily
marketable securities of companies which may have interests in real
estate.
4. Engage in the purchase and sale of commodities or commodity contracts.
5. Invest in companies for the purpose of exercising control or management.
6. Make loans to others, although it may purchase a portion of an issue of
publicly distributed bonds, debentures, or other debt securities.
7. Engage in margin transactions or short sales.
8. Write, purchase, or sell puts, calls, or combinations thereof.
9. Participate in joint trading account.
10. Mortgage, pledge, hypothecate, or in any manner transfer as security for
indebtedness any securities owned or held by the Fund, except as permitted
in the following Item 11.
11. Borrow money, except that as a temporary measure and not for investment
purposes, it may borrow from banks up to 5% of the value of its total
assets taken at cost, which may be secured by up to 10% of such assets
taken at cost. (It should be noted that some states have laws which are
even more restrictive than the Fund's fundamental policy with respect to
this matter. As a result of these laws, it is the Fund's present operating
policy not to mortgage, pledge, or hypothecate its portfolio securities to
the extent that at any time the percentage of pledged securities plus the
sales load will exceed 10% of the offering price of the Fund's shares.)
12. Invest in securities of other investment companies, except in connection
with a merger with another investment company.
13. Invest more than 5% of its total assets in securities of companies having
a record of less than three years' continuous operation.
14. Retain, in the Fund's portfolio, securities of an issuer any of whose
officers, directors, or security holders is an officer or director of the
Fund or of the fund's investment advisor, if after the purchase of such
securities one or more of such officers or directors of the Fund or of the
Fund's investment advisor owns beneficially more than 1/2% of the
outstanding securities of such issuer and such officers and directors
owning beneficially more than 1/2% of such outstanding securities together
own beneficially more than 5% of such outstanding securities.
3
<PAGE>
AMWAY MUTUAL FUND, INC.
15. Invest more than 5% of its total assets in securities of a foreign issuer,
the purchase of whose securities is subject to the Federal Interest
Equalization Tax, which tax is not in effect at the date of this Statement
of Additional Information.
16. Invest in interests in oil, gas, or other mineral explorations or
development programs, other than readily marketable securities of
corporations which may have interests in such exploration or development
programs.
The Fund's investment objective, policy and restrictions as described above are
fundamental and may not be changed without shareholder approval, as indicated in
the Fund's Prospectus. The Fund is permitted to invest in foreign issuers to the
extent that the investments meet the Fund's primary investment objective. The
Fund does not currently own any warrants and does not intend to own any warrants
in excess of 5% of the Fund's net asset value.
PORTFOLIO TRANSACTIONS AND BROKERAGE
In purchasing and selling portfolio securities for the Fund, it is the policy
of the Fund to obtain the highest possible price on sales and the lowest
possible price on purchases of securities, consistent with the best execution of
portfolio transactions. Amway Management Company, the ("Investment Advisor"),
or Ark Asset Management Co., Inc. ("Sub-Advisor") will select the brokers and
resulting allocation of brokerage commission; but, the Investment Advisor's
practice is subject to review by the Board of Directors of the Fund, which has
the primary responsibility in this regard, and must be consistent with the
policies stated above.
The Investment Advisor and Sub-Advisor, in effecting purchases and sales of
portfolio securities for the account of the Fund, will implement the Fund's
policy of seeking best execution of orders, which includes best net prices.
Consistent with this policy, orders for portfolio transactions are placed with
broker-dealer firms giving consideration to the quality, quantity, and nature of
each firm's professional services which include execution, clearance procedures,
wire service quotations, research information, statistical, and other services
provided to the Fund, Advisor, and the Sub-Advisor. Any research benefits
derived by the Sub-Advisor are available to all clients of the Sub-Advisor.
Since research information, statistical, and other services are only
supplementary to the research efforts of the Sub-Advisor and still must be
analyzed and reviewed by its staff, the receipt of research information is not
expected to materially reduce expenses. Also, subject to the policy of seeking
best price and execution of orders, certain Fund expenses may be paid through
the use of directed brokerage commissions. While the Sub-Advisor will be
primarily responsible for the placement of the Fund's business, the policies and
practices in this regard must be consistent with the foregoing and will at all
times be subject to review by the Directors of the Fund.
The Sub-Advisor furnishes investment advice to other clients. The other
accounts may also make investments in the same investment securities and at the
same time as the Fund. When two or more of such clients are simultaneously
engaged in the purchase or sale of the same security, the transactions are
allocated as to amount and price in a manner considered equitable to each and so
that each receives to the extent practicable the average price of such
transactions, which may or may not be beneficial to the Fund. The Board of
Directors of the Fund believes that the benefits of the Sub-Advisor's
organization outweigh any limitations that may arise from simultaneous
transactions.
The Fund may acquire securities of brokers who execute the Fund's portfolio
transactions. As of December 31, 1996, the Fund owned no such securities.
During the years ended December 31, 1996, 1995, and 1994, the Fund paid total
brokerage commissions on purchase and sale of portfolio securities of $250,136,
$333,077, and $106,759, respectively. Transactions in the amount of
$162,517,052, involving commissions of $204,064, were directed to brokers
because of research services provided during 1996.
4
<PAGE>
AMWAY MUTUAL FUND, INC.
PRINCIPAL SHAREHOLDERS
Amway Corporation indirectly, as of December 31, 1996, owned 659,337 shares, or
4.4% of the outstanding shares of the Fund. Jay Van Andel owns all the
outstanding securities of JVA Properties Corporation, the General Partner for
JVA Enterprises Limited Partnership, which owns, as of December 31, 1996,
2,164,390 shares, or 14.6% of the outstanding shares of the Fund. No other
person is known by the Fund to own of record or beneficially 5% or more of the
Fund's shares.
OFFICERS AND DIRECTORS OF THE FUND
The following are the Officers and Directors of the Fund or the Advisor or both,
together with their principal occupations during the past five years:
<TABLE>
<CAPTION>
Director's
Name and Address Age Office Held Principal Occupation Compensation
<S> <C> <C> <C> <C>
James J. Rosloniec* 51 Director, President and Vice President-Audit and $3,200
7575 Fulton Street East Treasurer of the Fund; Control, Amway Corporation,
Ada, Michigan and Director, Vice- 1991 to present; Vice
49355-7150 President and Treasurer President-Finance and
of the Investment Treasurer, Amway Corporation,
Advisor; and Director, 1979 to 1991.
President and Treasurer
of the Transfer Agent.
Richard A. DeWitt 83 Director of the Fund President, DeWitt Land and $3,200
720 Goldenrod Cattle Company (investments
Holland, Michigan in land and cattle); Chairman
49423 of the Board, Maes Board; Maes
Incorporated manufacturers
(manufacturers of agricultural
equipment).
Donald H. Johnson 65 Director of the Fund Retired Vice President- $3,200
609 Second Street Treasurer, SPX Corporation
No. Muskegon, Michigan (Designs, manufactures and
49445 markets products and services
for the motor vehicle industry,
1986 to present; Vice President
and Director Owatonna Tool,
1984 to 1986 (Owatonna Tool
acquired by SPX in 1985);
Secretary-Treasurer, Director
Owatonna Tool, Director
Owatonna Tool, 1969 to 1984.
5
<PAGE>
AMWAY MUTUAL FUND, INC.
<CAPTION>
Director's
Name and Address Age Office Held Principal Occupation Compensation
<S> <C> <C> <C> <C>
Walter T. Jones 54 Director of the Fund Senior Vice President-Chief $3,200
936 Sycamore Ave. Financial Officer, Prince
Holland, Michigan Corporation (Automotive
49424 interior trim and interior
systems; automotive designer,
manufacturer and supplier;
and designer and manufacturer
of die casting machines.)
Allan D. Engel* 44 Director, Vice President, Sr. Manager, Financial $3,200
7575 Fulton Street East Secretary and Assistant Projects Amway Corporation
Ada, Michigan Treasurer of the Fund;
49355-7150 Director, President,
and Secretary of the
Investment Advisor; and
Director, Vice President,
Secretary and Assistant
Treasurer of the Transfer
Agent.
</TABLE>
*These Directors are interested persons under the Investment Company Act of
1940, as amended.
All Officers and certain Directors of the Fund and the Investment Advisor are
affiliated with Amway Corporation. The Officers serve without compensation from
the Fund. Fees paid to all Directors during the year ended December 31, 1996,
amounted to $16,000. Under the Advisory Contracts, the Investment Advisor pays
the fees of the Directors of the Fund. The Directors and Officers of the Fund
owned, as a group, less than 1% of the outstanding shares of the Fund. The
advisor also serves as the Fund's principal underwriter (see "Distribution of
Shares").
INVESTMENT ADVISOR AND OTHER SERVICES
The Fund has entered into an Advisory and Service Contract ("Contract") with
Amway Management Company (the "Investment Advisor"). Under the Contract, the
Fund employs the Investment Advisor to furnish investment advice and manage on a
regular basis the investment portfolio of the Fund, subject to the direction of
the Board of Directors of the Fund, and to provisions of the Fund's current
Prospectus; to furnish for the use of the Fund, office space and all necessary
office facilities, equipment, and personnel for servicing the investments of the
Fund; and (with certain specific exceptions) administering its affairs and to
pay the salaries and fees of all Officers and Directors of the Fund. Amway
Corporation provides the Investment Advisor with such employee services on a
contractual basis. The Investment Advisor has served the Fund in that capacity
since 1971. The Investment Advisor will, from time to time, discuss with the
Fund economic investment developments which may affect the Fund's portfolio and
furnish such information as the Investment Advisor may believe appropriate for
this purpose. The Investment Advisor will maintain such statistical and
analytical information with respect to the Fund's portfolio securities as the
Investment Advisor may believe appropriate and shall make such materials
available for inspection by the Fund as may be reasonable. Except when otherwise
specifically directed by the Fund, the Investment Advisor will make investment
decisions on behalf of the Fund and place all orders for the purchase and sale
of portfolio securities for the Fund's account.
6
<PAGE>
AMWAY MUTUAL FUND, INC.
The Investment Advisor shall be permitted to enter into an agreement with
another advisory organization (sub-advisor) whereby the sub-advisor will provide
the investment advice and services required to manage the Fund's investment
portfolio as provided for in the Contract.
Under the Contract, the Fund will pay all its expenses other than those
expressly stated to be payable by the Investment Advisor, which expenses payable
by the Fund include, without implied limitation, (i) registration of the Fund
under the Investment Company Act of 1940; (ii) commissions, fees, and other
expenses connected with the purchase or sale of securities; (iii) auditing,
accounting, and legal expenses; (iv) taxes and interest; (v) government fees;
(vi) expenses of issue, sale, repurchase, and redemption of shares; (vii)
expenses of registering and qualifying the Fund and its shares under federal and
state securities laws and of preparing and printing prospectuses for such
purposes and for distributing the same to shareholders and investors; (viii)
expenses of reports and notices to shareholders and of meetings of shareholders
and proxy solicitations therefore; (ix) fees and expenses related to the
determination of the Fund's net asset value; (x) insurance expenses; (xi)
association membership dues; (xii) fees, expenses, and disbursements of
custodians and sub-custodians for all services to the Fund (including without
limitation safekeeping of funds and securities, and keeping of books and
accounts); (xiii) fees, expenses, and disbursement of transfer agents, dividend
disbursing agents, shareholder servicing agents, and registrars for all services
to the Fund; and (xiv) such non-recurring items as may arise, including expenses
incurred in connection with litigation, proceedings and claims, and the
obligation of the Fund to indemnify its Directors and Officers with respect
thereto.
In return for its management and investment advisory services, the Fund pays
the Advisor, pursuant to the Contract, a fee amounting on an annual basis to
approximately .55 of 1% per annum of the average daily net asset value of the
Fund. The fee is computed daily on the basis of .55 of 1% per annum of the total
net assets, and paid quarterly. The advisory fees paid by the Fund to the
Investment Advisor during the years ended December 31, 1996, 1995, and 1994,
were $524,637, $378,693, and $313,910, respectively.
Jay Van Andel and Richard M. DeVos are controlling persons of the Investment
Advisor and Transfer Agent (see "Transfer Agent"), since they own, together
with their spouses, substantially all of the outstanding securities of Amway
Corporation, which in turn owns all of the outstanding securities of each
entity.
A Sub-Advisory Agreement has been entered into between the Investment Advisor
and Ark Asset Management Co., Inc., One New York Plaza, 29th Floor, New York, NY
10004 (Sub-Advisor). Under the Sub-Advisory Agreement, the Advisor employs the
Sub-Advisor to furnish investment advice and manage on a regular basis the
investment portfolio of the Fund, subject to the direction of the Advisor, the
Board of Directors of the Fund, and to the provisions of the Fund's current
Prospectus. Except when otherwise specifically directed by the Fund or the
Advisor, the Sub-Advisor will make investment decisions on behalf of the Fund
and place all orders for the purchase or sale of portfolio securities for the
Fund's account. For services rendered, the Investment Advisor, not the Fund,
will pay the Sub-Advisor a fee amounting on an annual basis to approximately .45
of 1% of the average daily net asset value of the Fund.
The Contract and Sub-Advisory Agreement continue in effect indefinitely from
year to year so long as their continuance after the initial two-year period is
specifically approved at least annually by vote of the Board of Directors, or by
vote of a majority of the outstanding shares of the Fund. In addition, and in
either event, the Contract and Sub-Advisory Agreement and their terms must be
approved at
7
<PAGE>
AMWAY MUTUAL FUND, INC.
least annually by a vote of a majority of the Directors of the Fund who are not
parties to the Contract or Sub-Advisory Agreement, or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
approval. The Contract and Sub-Advisory Agreement were approved by vote of a
majority of the outstanding shares at the Annual Meeting of Shareholders on June
13, 1996. The Contract and Sub-Advisory Agreement provide that they will
terminate automatically in the event of their assignment. In addition, the
Contract and Sub-Advisory Agreement are terminable at any time without penalty
by the Board of Directors or by vote of a majority of the Fund's outstanding
shares on 60 days' written notice to the Investment Advisor or Sub-Advisor, and
by the Investment Advisor or Sub-Advisor on 60 days' written notice to the Fund.
The Fund has entered into an agreement with DST Systems, Inc. ("DSTS")
whereby DSTS provides a portfolio accounting and information system for
portfolio management for the maintenance of records and processing of
information which is needed daily in the determination of the net asset value of
the Fund. Currently, this expense amounts to approximately $2,500 per month.
DISTRIBUTION OF SHARES
Pursuant to a Principal Underwriter Agreement, the Advisor acts as exclusive
agent for sale of shares of the Fund. This is a continuous offering.
Under the Agreement, the Investment Advisor has the exclusive right to purchase
shares from the Fund at net asset value and resell them to fill unconditional
orders received from dealers or investors, subject to acceptance by the Fund. It
is contemplated that acceptance of an application will be denied only if
acceptance might result in a violation of state or federal securities laws. As
compensation for its distribution services, the Investment Advisor receives the
sales charge described under "Purchase of Shares." During the years ended
December 31, 1996, 1995, and 1994, the Investment Advisor sold 3,924,168,
1,917,496, and 1,543,342 shares of the Fund's common stock and received
commissions of $475,319, $406,631, and $360,487. Under the Agreement, the
Investment Advisor bears the expense of printing and distributing Prospectuses,
sales literature, advertising, and for qualifying and maintaining qualification
of the Fund's shares for sale in such states as selected by the Investment
Advisor. The Investment Advisor is a registered broker-dealer and a member of
the National Association of Securities Dealers, Inc.
The Principal Underwriter Agreement continues in effect indefinitely from year
to year so long as its continuance after the initial two-year period is
specifically approved at least annually by the Board of Directors or by vote of
a majority of the outstanding shares of the Fund. In addition, and in either
event, the Agreement and its terms must be approved at least annually by a vote
of the Directors of the Fund who are not parties to the Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose of
voting on such approval. The Agreement terminates automatically if assigned. In
addition, the Agreement may be terminated by either party on six months' written
notice to the other party.
8
<PAGE>
AMWAY MUTUAL FUND, INC.
TRANSFER AGENT
Under a separate contract, the functions of the Transfer Agent and Dividend
Disbursing Agent are performed by Amway Stock Transfer Co., Ada, Michigan, which
acts as the Fund's agent for transfer of the Fund's shares and for payment of
dividends and capital gain distributions to shareholders.
In return for its services, the Fund pays the Transfer Agent, pursuant to the
contract, a fee of $1.167 per account in existence during the month, payable
monthly, less earnings in the redemption liquidity account after deducting bank
fees, if any. The fee schedule is reviewed annually by the Board of Directors.
CUSTODIAN
The portfolio securities of the Fund are held, pursuant to a Custodian
Agreement, by Michigan National Bank, 77 Monroe Avenue, Grand Rapids, Michigan,
as Custodian. The Custodian performs no managerial or policymaking functions for
the Fund.
AUDITORS
BDO Seidman, LLP, 99 Monroe Avenue, N.W., Suite 800, Grand Rapids, Michigan,
are the independent certified public accountants for the Fund. Services include
an annual audit of the Fund's financial statements, tax return preparation, and
review of certain filings with the SEC.
VOTING RIGHTS OF COMMON SHAREHOLDERS
Each share or fractional share of common stock that you own entitles you to one
vote at all meetings of shareholders, either in person or by proxy. The Fund's
shares have non-cumulative voting rights, which means that the holder of more
than 50% of the shares voting for the election of the Directors can elect 100%
of the Directors if they choose to do so, and in that case, the holders of the
remaining less than 50% of the Fund's shares voting for the election of
Directors will not be able to elect any person or persons to the Board of
Directors.
PURCHASE OF SHARES
Pursuant to a Principal Underwriter Agreement, the Investment Advisor acts as
exclusive agent for the sale of shares of the Fund. The minimum initial
investment required to establish an account is $500. An additional investment in
the minimum amount of $50 can be made in your account at any time. Investments
are made at the offering price, which includes a sales charge (see
"Determination of Net Asset Value and Offering Price of the Fund's Shares"),
next determined after the Fund receives your purchase application and
investment.
You may open a new account with the Fund by completing the enclosed
application, submitting your check made payable to Amway Management Company and
mailing the required information to Amway Management Company, 7575 Fulton Street
East, Ada, Michigan 49355-7150.
You may make additional investments to existing accounts by mail, wire, or by
the use of the pre-authorized check privilege. When making an additional
investment by check, please tear-off the stub from your statement of account, or
enclose a letter of instructions including your account number and your check
made payable to Amway Management Company. Wire transfers would normally be used
for large purchases. You may also arrange to make periodic investments through
automatic deductions from your checking account by completing the appropriate
form and providing the necessary documentation to establish this privilege.
Please contact the Fund for additional information for utilizing either of these
two options.
Shareholders who have redeemed their shares have a one-time right, except in the
case where the sole purpose of the redemption is to invest the proceeds at the
next determined net asset value in
9
<PAGE>
AMWAY MUTUAL FUND, INC.
the Profit-Sharing Trust or Individual Retirement Account where the right is
unlimited, to invest in shares of the Fund at the net asset value per share
without payment of a sales charge. Reinvestment must be made within ten days of
the redemption and is limited to no more than the amount of the redemption
proceeds. (See "Reinvestment Privilege")
When your first investment is received, the Fund will open an investment
account for you which will remain open as long as you are a shareholder. This
account offers you a simple means of purchasing shares of the Fund whenever you
choose without submitting any additional application forms. This account is also
designed to encourage you to make investments regularly towards your financial
goals, but you have no obligation to purchase any specified amount of shares and
you may terminate your account at any time. When the Investment Advisor receives
your investment, it will purchase for your account the corresponding number of
the Fund's shares, and any fraction of a share carried out to three decimal
places, at the offering price next computed after your investment is received by
the Investment Advisor.
Each time you purchase shares or sell shares, you will receive a Statement of
Account showing the number of shares then in your investment account.
Under this arrangement, stock certificates will not be delivered to you unless
you so request in writing, in which cases a certificate will promptly be
delivered to you or your bank for the number of shares, not including fractional
shares, which you own. It will generally be for your convenience not to receive
stock certificates, as you are spared the trouble and expense of safeguarding
stock certificates and the cost of a lost instrument bond in case of loss or
destruction. Since stock certificates are unnecessary except for certain
purposes, such as collateral for a loan, we recommend that you leave your shares
on deposit until you need a certificate. If certificates have been issued for
shares, they must be surrendered for redemption or transfer of those shares.
DETERMINATION OF NET ASSET VALUE AND OFFERING PRICE
OF THE FUND'S SHARES
The net asset value of the Fund's shares is determined by dividing the total
current value of the assets of the Fund, less its liabilities, by the number of
shares outstanding at that time. This determination is made as of the close of
business on the New York Stock Exchange, 4:00 P.M. Eastern time, on each
business day on which that Exchange is open or on any other day in which there
is a sufficient degree of trading in the Fund's portfolio, except no computation
will be made on a day in which no order to purchase or redeem was received.
National holidays on which the New York Stock Exchange and the Fund will be
closed are: New Year's Day, Washington's Birthday, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
In determining the current value of the Fund's assets, securities listed or
admitted to trading on a national securities exchange are valued at their last
reported sale price on the market where principally traded, 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 asked prices. Securities for which
market quotations are not readily available, including any restricted
securities, and other assets of the Fund are valued at fair market value as
determined in good faith by the Fund's Board of Directors.
The offering price is the net asset value per share, as determined above, plus
a sales charge. Presently the maximum sales charge is 3% of the offering price
or 3.09% of the amount invested.
10
<PAGE>
AMWAY MUTUAL FUND
Sales charges do not apply to shares of the portfolio purchased (1) as a
reinvestment of the dividend and capital gain distribution; (2) if you are a
current or retired director, officer, employee or a spouse or minor child
thereof, of the Fund's Principal Underwriter, Advisor, or Sub-Advisor; or a
director, officer or shareholder of Amway Corporation, the parent of the
Advisor; or (3) if you are current or former director, officer or a spouse or
minor child thereof, for the Fund. In addition, sales charges are reduced for
the excess amount, when the amount invested plus the value of the account
results in a single account which falls within the ranges shown below:
Sales Charge as a Percentage Sales Charge as a Percentage
Ranges of the Offering Price of the Net Amount Invested
First $250,000 3% 3.09%
Next $250,000 2% 2.04%
Next $500,000 1% 1.01%
Excess over $1,000,000 none none
Sales charges are waived on these sales because of the efficiencies involved in
sale of shares to these investors.
HOW SHARES ARE REDEEMED
The Fund will redeem your shares upon receiving a proper request, as described
in the Prospectus.
Payment for redeemed shares is normally made in cash and mailed within seven
days thereafter. However, under the Investment Company Act of 1940, the right of
redemption may be suspended or the date of payment postponed for more than seven
days: (1) for any period during which the New York Stock Exchange is closed,
other than for customary weekend and holiday closings; (2) when trading on the
New York Stock Exchange is restricted, as determined by the SEC; (3) when an
emergency exists, as determined by the SEC, as a result of which it is not
reasonably practicable for the Fund to dispose of its securities or determine
the value of its nets assets; or (4) for such other period as the SEC may by
order permit for the protection of the shareholders. During such a period, a
shareholder may withdraw his request for redemption or receive the net asset
value next computed when regular trading resumes.
The Fund has filed with the SEC an election to pay for all redeemed shares in
cash up to a limit, as to any one shareholder during any 90-day period, of
$250,000 or 1% of the net asset value of the Fund, whichever is less. Beyond
that limit, the Fund is permitted to pay the redemption price wholly or partly
"in kind," that is, by distribution of portfolio securities held by the Fund.
This would occur only upon specific authorization by the Board of Directors
when, in their judgement, unusual circumstances make it advisable. It is
unlikely that this will ever happen, but if it does, you will incur a brokerage
charge in converting the securities received in this manner into cash. Portfolio
securities distributed "in kind" will be valued as they are valued for the
determination of the net asset value of the Fund's shares.
REINVESTMENT PRIVILEGE
Shareholders who have redeemed shares of the Fund have a one-time privilege of
reinstating their investment by investing the proceeds of the redemption at net
asset value, without a sales charge, in shares of the Fund. Elimination of the
sales charge is allowed only when (1) the repurchase does not exceed the amount
of the redemption proceeds; (2) the shareholder has not previously
11
<PAGE>
AMWAY MUTUAL FUND, INC.
exercised the reinvestment privilege with respect to any shares of the Fund,
except in the case where the sole purpose of the redemption is to invest the
proceeds at net asset value in the Profit-Sharing Trust or Individual Retirement
Account; and (3) the repurchase is effected within 10 days after such
redemption.
To exercise this reinvestment privilege, a shareholder must notify Amway
Management Company in writing within 10 days after such redemption. The
reinvestment request must be accompanied by a check for the amount to be
invested, which cannot exceed the redemption proceeds. The reinvestment purchase
will be made at the net asset value per share next determined after receipt of
the request for reinvestment. The tax status of a gain realized on a redemption
will not be affected by exercise of the reinvestment privilege, but a taxable
loss may be nullified by such exercise.
MONEY MARKET FUND EXCHANGE PRIVILEGE
The Underwriter for Amway Mutual Fund, Inc. ("Fund") has arranged for shares
of the three money market portfolios of Cash Equivalent Fund, an open-end money
market mutual fund ("Money Market Fund") to be available in exchange for
shares of the Fund for shareholders resident in the U.S. Also, clients of the
Underwriter can exchange shares in the Money Market Fund for shares of the Fund.
Shares of the Money Market Fund so acquired (including any reinvested dividends
thereon) may be re-exchanged for shares of the Fund without sales charge. All
other shares will be subject to the sales charge (see "Determination of Net
Asset Value and Offering Price of the Fund's shares"). The Underwriter receives
a maximum fee from Kemper Financial Services, Inc., the distributor and
administrator for the Money Market Fund, of .38 of 1% per year of the average
daily net asset value of shares of the Money Market and Government Securities
Portfolios, and of .33 of 1% per year of the average daily net asset value of
shares of Tax-Exempt Portfolio, acquired through this exchange privilege. This
exchange privilege does not constitute an offering or recommendation by the Fund
of the Money Market Fund. The Money Market Fund is separately managed.
The above described Exchange Privilege may be exercised by sending written
instruction to the Transfer Agent. See "How Shares Are Redeemed" for
applicable signatures and signature guarantee requirements. Shareholders may
authorize telephone or telegram exchanges or redemptions by making an election
on your application. Procedures required by the Fund to ensure that a
shareholder's requested telephone or telegram transaction is genuine include
identification by the shareholder of the account by number, recording of the
requested transaction and sending a written confirmation to shareholders
reporting the requested transaction. The Fund is not responsible for
unauthorized telephone or telegram exchanges unless the Fund fails to follow
these procedures. Shares must be owned for 15 days before exchanging and cannot
be in certificate form unless the certificate is tendered with the request for
exchange. An exchange requires the purchase of shares of the particular
portfolio of the Money Market Fund with a value of at least $1,000 to establish
a new account or $100 to add to an existing account. Exchanges will be accepted
only if the registration of the two accounts is identical. Exchange redemptions
and purchases are effected on the basis of the net asset value next determined
after receipt of the request in proper order by the Fund. In the case of
exchanges into the Money Market Fund, dividends generally commence on the
following business day. For federal and state income tax purposes, an exchange
is treated as a sale and may result in a capital gain or loss, although if the
shares exchanged have been held less than 91 days, the sales charge paid on such
shares is not included in the tax basis of the exchanged shares, but is carried
12
<PAGE>
AMWAY MUTUAL FUND, INC.
over and included in the tax basis of the shares acquired.
A prospectus for the Money Market Fund which contains information concerning
charges and expenses may be obtained from the Underwriter. A shareholder should
read the prospectus carefully and consider differences in objectives and
policies before making any exchange. The Fund or the Underwriter can change or
discontinue this privilege, although shareholders generally would be given 60
days advance notice of any termination or material amendment of the Fund
Exchange Privilege and shareholders who had exchanged into the Money Market Fund
generally would be permitted to reacquire shares of the Fund without sales
charge for at least 60 days after notice of termination of the Exchange
Privilege with the Money Market Fund.
FEDERAL INCOME TAX
The Fund intends to continue to comply with the provisions of Subchapter M of
the Internal Revenue Code applicable to investment companies. Accordingly, as
the result of paying to its shareholders as dividends and distributions
substantially all net investment income and realized capital gains, if any, the
Fund will be relieved of substantially all Federal income tax.
For Federal income tax purposes, distributions of net investment income and any
capital gains will be taxable to shareholders. Distributions of net investment
income will normally qualify for the 70% deduction for dividends received by
corporations. After the last dividend and capital gains distribution in each
year, the Fund will send you a statement of the amount of the income and capital
gains which you should report on your Federal income tax return. Dividends
derived from net investment income and net short-term capital gains are taxable
to shareholders as ordinary income and long-term capital gain dividends are
taxable to shareholders as long-term capital gain regardless of how long the
shares have been held and whether received in cash or reinvested in additional
shares of the Fund. Long-term capital gain dividends received by individual
shareholders are taxed a maximum rate of 28%.
In addition, shareholders may realize a capital gain or loss when shares are
redeemed. For most types of accounts, the Fund will report the proceeds of
redemptions to shareholders and the IRS annually. However, because the tax
treatment also depends on the purchase price and a shareholder's personal tax
position, you should also keep your regular account statements to use in
determining your tax.
On the record date for a distribution, the Fund's share value is reduced by the
amount of the distribution. If a shareholder buys shares just before the record
date ("buying a dividend"), they will pay the full price for the shares, and
then receive a portion of the price back as a taxable distribution.
Also, under the Code, a 4% excise tax is imposed on the excess of the required
distribution for a calendar year over the distributed amount for such calendar
year. The required distribution is the sum of 98% of the Fund's net investment
income for the calendar year plus 98% of its capital gain net income for the
one-year period ended December 31, plus any undistributed net investment income
from the prior calendar year, plus any undistributed capital gain net income
from the prior calendar year, minus any overdistribution in the prior calendar
year. The Fund intends to declare or distribute dividends during the appropriate
periods of an amount sufficient to prevent imposition of the 4% excise tax.
Under certain circumstances, the Fund will be required to withhold 31% of a
shareholder's distribution or redemption from the Fund. These circumstances
include failure by the shareholder to furnish the Fund with a proper taxpayer
identification number; notification of the Fund by the Secretary of the Treasury
that a taxpayer identification number is incorrect, or that withholding
13
<PAGE>
AMWAY MUTUAL FUND, INC.
should commence as a result of the shareholder's failure to report interest and
dividends; and failure of the shareholder to certify, under penalties of
perjury, that he is not subject to withholding. In this regard, failure of a
shareholder who is a foreign resident to certify that he is a nonresident alien
may result in 31% of his redemption proceeds and 31% of his capital gain
distribution being withheld. In addition, such a foreign resident may be subject
to a 30% or less, as prescribed by an applicable tax treaty, withholding tax on
ordinary income dividends distributed unless he qualifies for relief under an
applicable tax treaty.
Trustees of qualified retirement plans are required by law to withhold 20% of
the taxable portion of any distribution that is eligible to be "rolled over."
The 20% withholding requirement does not apply to distributions from IRA's or
any part of a distribution that is transferred directly to another qualified
retirement plan, 403(b)(7) account or IRA. Shareholders should consult their tax
advisor regarding the 20% withholding requirement.
Prior to purchasing shares of the Fund, the impact of any dividends or capital
gain distributions which are about to be declared should be carefully
considered. Any such dividends and capital gain distributions declared shortly
after you purchase shares will have the effect of reducing the per share net
asset value of your shares by the amount of dividends or distributions on the
ex-dividend date. All or a portion of such dividends or distributions, although
in effect a return of capital, are subject to taxes which may be at ordinary
income tax rates.
Each shareholder is advised to consult with his tax advisor regarding the
treatment of distributions to him under various state and local income tax laws.
INVESTMENT PERFORMANCE INFORMATION
Following is a table illustrating the Fund's performance for annual periods
ended December 31, 1996, and its average annual total return percentages for
one, five and ten years.
<TABLE>
<CAPTION>
Accumulative Accumulative
Value of Shares Value of Shares
Calendar Years Cost of Value of Accepted As Accepted As
Ended Initial Initial Capital Gain Ordinary Income
December 31 Investment Investment Distributions Dividends Total Value
<S> <C> <C> <C> <C> <C>
1987 $1,000 $ 978 $ 56 $ 15 $1,049
1988 806 284 31 1,112
1989 902 525 63 1,490
1990 847 583 74 1,505
1991 1,007 1,025 101 2,134
1992 940 1,130 101 2,171
1993 958 1,341 108 2,407
1994 855 1,305 106 2,266
1995 923 1,885 150 2,958
1996 947 2,506 191 3,644
Average Annual
Total Return For
Periods Ended The Period Ended
December 31, 1996 On December 31, 1996
One Year 19.64%
Five Years 12.02%
Ten Years 13.80%
</TABLE>
14
<PAGE>
AMWAY MUTUAL FUND, INC.
Total return performance for the Fund is calculated by making an initial
investment of $1,000, at the beginning of the period, in the Fund's shares at
the asking price, which price includes the maximum sales charge of 3.0% (see
"Determination of Net Asset Value and Offering Price of the Fund's Shares")
and reinvesting all ordinary income dividends and capital gain distributions
paid during the period in additional shares at net asset value per share on the
reinvestment dates. Prior to 1991 the Fund had a maximum sales charge of 6%
based upon amount of shares purchased. The illustration includes recurring
expenses incurred by all shareholder accounts and not those incurred for
specific shareholder purposes such as bank fees for wire transfers, Individual
Retirement Accounts, or Profit-Sharing Trusts. The average annual total return
for the Fund for a specific period is found by dividing the ending total value
by the cost of the initial investment for the period and taking this quotient to
the Nth root, then subtracting 1 (N represents the number of years in the
period). The average annual total return reflects the hypothetical annually
compounded return that would have produced the same cumulative total return if
the Fund's performance had been constant over the entire period. Such
calculation is with all ordinary income dividends and capital gain distributions
reinvested at net asset value and after adjustment for the sales charge. No
adjustment has been made for any income taxes payable by shareholders on
ordinary income dividends and capital gain distributions accepted in shares
which are payable by shareholders in the tax year received. Since the sales
charge is paid at the time the initial investment is made, it has the greatest
impact on the average annual total return percentage for one year. The total
return during calendar year 1996 for accounts in existence prior to January 1,
1996, including reinvestment of all ordinary income dividends and capital gain
distributions, was 23.18%.
Average annual total return percentages of the Fund will vary and the
publication of performance results is not a representation as to future
investment performance. Factors affecting the Fund's performance include general
market conditions, operating expenses and investment management. Net asset
values of the Fund will fluctuate.
REPORTS TO SHAREHOLDERS AND ANNUAL AUDIT
The Fund's year begins on January 1 and ends on December 31.
At least semiannually, the shareholders of the Fund receive reports, pursuant
to applicable laws and regulations, containing financial information. The annual
shareholders report is incorporated by reference into the Statement of
Additional Information. The cost of printing and distribution of such reports to
shareholders is borne by the Fund.
At least once during each year, the Fund is audited by independent certified
public accountants appointed by resolution of the Board and approved by the
shareholders. The fees and expenses of the auditors are paid by the Fund.
The financial statements for the Fund are contained in the Fund's 1996 Annual
Report to Shareholders along with additional information about the performance
of the Fund, which is incorporated herein by reference and may be obtained by
writing or calling the Fund.
15
<PAGE>
AMWAY MUTUAL FUND, INC.
7575 Fulton Street East
Ada, Michigan, 49355-7150
(616) 787-6288
(800) 346-2670
Contents Page
Objectives, Policies, and
Restrictions on the Fund's
Investments 3
Portfolio Transactions and
Brokerages 4
Principal Shareholders 5
Officers and Directors of the Fund 5
Investment Advisor and Other Services 6
Distribution of Shares 8
Transfer Agent 9
Custodian 9
Auditors 9
Voting Rights of Common Shareholders 9
Purchase of Shares 9
Determination of Net Asset Value
and Offering Price of the Fund's
Shares 10
How Shares are Redeemed 11
Reinvestment Privilege 11
Money Market Fund Exchange Privilege 12
Federal Income Tax 13
Investment Performance Information 14
Reports to Shareholders and
Annual Audit 15
Printed in U.S.A.
- -----------------------------------
AMWAY
MUTUAL
FUND,
INC.
Statement of
Additional Information
March 21, 1997
AMWAY MUTUAL FUND LOGO
- -----------------------------------
16
<PAGE>
AMWAY MUTUAL FUND, INC.
FORM N-1A
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
(a) Financial Statements:
The financial statements listed below are filed as part of the
registration statement:
Location in Registration Statement
----------------------------------
Part A Part B Part C
(Prospectus) (Statement of
Additional
Information)
Page No. Page No. Page No.
------------ ----------------------- --------------
Independent Auditors'
Report C-18
Assets and Liabilities
Year Ended December C-14
31, 1996
Statement of Operations
Year Ended December C-14
31, 1996
Schedule of Investments
Year Ended December C-12
31, 1996
Changes in Net Assets
Years Ended December C-15
31, 1996 and 1995
Consent of Independent Certified
Public Accountants C-19
<PAGE>
AMWAY MUTUAL FUND, INC.
FORM N-1A
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits (Continued)
(a) Exhibits:
i. CERTIFICATE OF INCORPORATION
The Certificate of Incorporation for Amway Mutual Fund,
Inc. is incorporated by reference to the Registration
Statement under the Securities Act of 1933, Post-Effective
Amendment No. 41, Part C, Page C-7 through C-41 as filed on
March 1, 1996.
ii. BY-LAWS
The By-Laws of Amway Mutual Fund, Inc. (a Delaware
corporation), including amendments, are incorporated by
reference to the Registration Statement under the Securities
Act of 1933, Post-Effective Amendment No. 41, Part C, Pages
C-47 through C-81, as filed on March 1, 1996.
iii. COMMON STOCK CERTIFICATE
The Common Stock Certificate for Amway Mutual Fund,
Inc. is incorporated by reference to the Registration
Statement under the Securities Act of 1933, Post-Effective
Amendment No. 41, Part C, Page C-82, as filed on March 1,
1996.
iv. ADVISORY AND SERVICE CONTRACT BETWEEN AMWAY MUTUAL FUND,
INC. AND AMWAY MANAGEMENT COMPANY
The Amended Advisory and Service Contract between Amway
Mutual Fund, Inc. and Amway Management Company is
incorporated by reference to the Registration Statement
under the Securities Act of 1933, Post-Effective Amendment
No. 41, Part C, Pages C-83 through C-85, as filed on March
1, 1996.
v. SUB-ADVISORY AGREEMENT
The Sub-Advisory Agreement between Amway Management
Company and ARK Asset Management Company, Inc., with
amendments, is incorporated by reference to the Registration
Statement under the Securities Act of 1933, Post-Effective
Amendment No. 41, Part C, Pages C-86 through C-90, as filed
on March 1, 1996.
<PAGE>
AMWAY MUTUAL FUND, INC.
FORM N-1A
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits (Continued)
(b) Exhibits:
vi. PRINCIPAL UNDERWRITER AGREEMENT BETWEEN AMWAY MUTUAL FUND,
INC. AND AMWAY MANAGEMENT COMPANY
The Amended Principal Underwriter Agreement between
Amway Mutual Fund, Inc. and Amway Management Company is
incorporated by reference to the Registration Statement
under the Securities Act of 1933, Post-Effective Amendment
No. 41, Part C, Pages C-91 through C-99, as filed on March
1, 1996.
vii. CUSTODIAN AGREEMENT
The Amended Custodian Agreement is incorporated by
reference to the Registration Statement under the Securities
Act of 1933, Post-Effective Amendment No. 41, Part C, Pages
100 through C-112, as filed on March 1, 1996.
viii. TRANSFER AGENCY AND DIVIDEND DISBURSING AGENCY
AGREEMENT BETWEEN AMWAY MUTUAL FUND, INC. AND AMWAY
STOCK TRANSFER CO.
The Transfer Agency and Dividend Disbursing Agency
Agreement between Amway Mutual Fund, Inc. and Amway Stock
Transfer Co. is incorporated by reference to the
Registration Statement under the Securities Act of 1933,
Post-Effective Amendment No. 41, Part C, Pages C-113 through
C-115, as filed on March 1, 1996.
ix. RECORD MAINTENANCE AGREEMENT BETWEEN AMWAY MANAGEMENT
COMPANY AND AMWAY STOCK TRANSFER CO.
The Record Maintenance Agreement between Amway
Management Company and Amway Stock Transfer Co. is
incorporated by reference to the Registration Statement
under the Securities Act of 1933, Post-Effective Amendment
No. 41, Part C-116 through C-118, as filed on March 1, 1996.
x. COMMON-RECORDS AGREEMENT AMONG AMWAY MUTUAL FUND, INC.,
AMWAY MANAGEMENT COMPANY, AND AMWAY STOCK TRANSFER CO.
The Common-Records Agreement among Amway Mutual Fund,
Inc., Amway Management Company, and Amway Stock Transfer Co.
is incorporated by reference to the Registration Statement
under the Securities Act of 1933, Post-Effective Amendment
No. 41, Part C, Page C-120 through C-121, as filed on March
1, 1996.
<PAGE>
AMWAY MUTUAL FUND, INC.
FORM N-1A
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits (Continued)
(b) Exhibits
xi. PORTFOLIO ACCOUNTING AND RESEARCH INFORMATION SYSTEM
The Portfolio Accounting and Research Information
System Agreement between Amway Mutual Fund, Inc. and DST
Securities, Inc. is incorporated by reference to the
Registration Statement under the Securities Act of 1933,
Post-Effective Amendment No. 41, Part C, Pages C-122 through
C-147, as filed on March 1, 1996.
xii. LEGAL OPINION
Not applicable since the Fund has registered an
indefinite amount of shares pursuant to Rule 24F-2.
xiii. FINANCIAL STATEMENT
The Annual Report for Amway Mutual Fund, Inc. is
included on Pages C-7 through C-18.
xiv. TRUST AGREEMENT ESTABLISHING THE AMWAY MUTUAL FUND MASTER
PROFIT-SHARING TRUST AND RELATED DOCUMENTS
The Trust Agreement establishing the Amway Management
Company Master Profit-Sharing Trust and related documents is
incorporated by reference to the Registration Statement
under the Securities Act of 1933, Post-Effective Amendment
No. 41, Part C, Pages C-161 through C-25, as filed on March
1, 1996
xv. TRUST AGREEMENT ESTABLISHING THE AMWAY MUTUAL FUND
INDIVIDUAL RETIREMENT ACCOUNT AND RELATED DOCUMENTS
The Trust Agreement establishing the Amway Management
Company Individual Retirement Account and related documents,
as amended, are incorporated by reference to the
Registration Statement under the Securities Act of 1933,
Post-Effective Amendment No. 41, Part C, Pages C-251 through
C-276, as filed on March 1, 1996.
xvi. APPLICATION ESTABLISHING AN AMWAY MUTUAL FUND INVESTMENT
The Application establishing an investment with Amway
Mutual Fund is included on Pages C-20 and C-21.
<PAGE>
AMWAY MUTUAL FUND, INC.
FORM N-1A
PART C
OTHER INFORMATION
ITEM 24. Financial Statement and Exhibits (Continued)
(b) Exhibits
xvii. EXHIBIT OF PERFORMANCE CALCULATIONS
The schedules for computation of each performance
quotation provided in the Registration Statement in
response to Item 22 are included on Pages C-22 through
C-26.
xviii. POWER OF ATTORNEY
The Power of Attorney authorizing the signer of the
Registration Statement to sign as Attorney-In-Fact for
certain Directors is included on Page C-27.
<PAGE>
AMWAY MUTUAL FUND, INC.
FORM N-1A
PART C
OTHER INFORMATION
Location in Registration Statement
----------------------------------
Part A Part B Part C
(Prospectus) (Statement of
Additional
Information)
Page No. Page No. Page No.
-------------- -------------- -----------
ITEM 25. Persons Controlled by
or under Common Control C-28
with Registrant
ITEM 26. Number of Holders of
Securities C-28
ITEM 27. Indemnification C-28
ITEM 28. Business and Other
Connections of C-28
Investment Adviser
ITEM 29. Principal Underwriter C-28
ITEM 30. Location of Accounts
and Records C-29
ITEM 31. Management Services C-29
ITEM 32. Undertakings C-30
<PAGE>
AMWAY
MUTUAL
FUND,
INC.
ANNUAL
REPORT
1996
Printed in U.S.A. 795058 L-6882-SAD
BULK RATE
U.S. POSTAGE
PAID
ADA, MI
PERMIT 100
AMWAY MUTUAL FUND, INC.
7575 Fulton Street East
Ada, Michigan 49355-7150
<PAGE>
AMWAY MUTUAL FUND, INC.
Dear Shareholders:
I am pleased to provide you with the Annual Report to Shareholders for Amway
Mutual Fund, Inc. (the "Fund") for the period ended December 31, 1996.
1996 was another extraordinarily successful year for investments in stocks,
with performance well surpassing historical norms for the second straight year.
Your Fund participated in that performance and exceeded the S&P 500 during 1996,
as discussed in the following pages. In addition, the net assets held in the
Fund at the end of 1996 increased to $113,327,402, a 45% growth in assets. As a
result of the increase in net assets the average account size grew from $4,812
to $6,483, an increase of almost 35%. The direct impact of this growth is
increased efficiency, and an overall reduction in the Fund's expense ratio of
more than 9%; from 1.10% to 1.00%. The financial benefit of reduced expenses is
obvious, but more importantly, the reduction was achieved without sacrificing
the customer service that is the foundation of your fund.
Please take a moment to read the following discussion of the market factors and
conditions, and investment stategies and techniques that impacted the Fund's
performance during 1996. Even though equity markets by their very nature may
continue to experience volatility over the next year, 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 a
declining market.
Thank you for your trust in Amway Mutual Fund, Inc. The Fund will continue in
its best efforts to provide you with the performance and customer service you
have come to expect.
Sincerely,
James J. Rosloniec
President
<TABLE>
<CAPTION>
<S> <C> <C>
DIRECTORS SUB-ADVISER AUDITORS
Richard A. DeWitt Ark Asset Management Co., Inc. BDO Seidman, LLP
Allan D. Engel One New York Plaza 99 Monroe Avenue, N.W.
Donald H. Johnson New York, NY 10004 Grand Rapids, Michigan 49503
Walter T. Jones
James J. Rosloniec LEGAL MATTERS
John Dougherty
INVESTMENT ADVISER TRANSFER AGENT Attorney At Law
Amway Management Company Amway Stock Transfer Co. 1155 Connecticut Ave. NW, Suite 500
7575 Fulton Street, East 7575 Fulton Street, East Washington, D.C. 20036
Ada, Michigan 49355-7150 Ada, Michigan 49355-7150
CUSTODIAN
Michigan National Bank
77 Monroe Center
Grand Rapids, Michigan 49501
</TABLE>
2
<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, 1996.
Total Return Performance*
For the Year Ended Dec. 31, 1996
(not adjusted for any sales charge)
Amway Mutual Fund, Inc. 23.18%
Standard & Poor's 500 Stock Index** 22.96%
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-1996
"The Fund is prepared to respond immediately to changing market circumstances
and expects to have a good year relative to the S&P 500." This quote from Amway
Mutual Fund's 1995 Annual Report appears to be quite prophetic as the Fund
outperformed the S&P 500 in 1996. However, what we couldn't realistically
anticipate was that the S&P 500 would have one of its best years over the last
two decades, netting a return of 22.96% for the year. The Fund's return was an
impressive 23.18%. Considering that market results in 1996 followed an even more
successful 1995, it becomes quite apparent that we are experiencing one of the
most remarkably positive periods for stock prices in the last 50 years. The
market thrived due to several factors; including relatively low and stable
interest rates, modest economic growth, low inflation rate and a stable global
environment (politically and financially).
Due to a heavy weighting relative to the S&P 500 in financial issues and in the
more economically sensitive area of the market, such as papers, metals, and
retail stores, a substantial percentage of the Fund's total return was achieved
in the first half of the year. During the second half of the year and more
specifically, the fourth quarter, the market was fueled by a surge in growth
stocks. This led to an excellent finish and an overall prosperous year for blue
chip stocks. Investments in energy, financial and basic industry issues also
helped the Fund to participate in the progressive rise in stock prices thoughout
1996.
1996 marked the first full year of management of the Fund by the Sub-
Advisor, Ark Investment Management. Ark continued to streamline the Fund and
bring it into line with Ark's investment strategies, which reflect a strong
value discipline in the investment process and the setting of conservative sell
targets on currently held stocks. The value discipline is reflected by
investments in companies that pay dividends on a regular basis, and while not
all issues held will pay a dividend, enough do so that the yield of the Fund
helps counterbalance the effects of a declining market. The result of these
investment styles was that the Fund was able to participate in the market rally
in blue chip stocks (the Fund was already invested in blue chips due to their
dividend paying characteristics) and has also been able to divest itself of
overvalued issues.
3
<PAGE>
AMWAY MUTUAL FUND, INC.
Outlook
By the end of 1996, the general consensus among investment professionals was
that the market was overvalued in most areas and that picking "winners" will be
more difficult in 1997 leading to increased volatility in the market. When
considering Ark's investment strategy of maximizing value, the Fund has
performed better than expected in the continuously rising markets of 1995 and
1996. Conversely, one of the primary objectives of the value strategy is to
position the Fund to perform well in a declining market. More specifically, we
will be looking to take advantage of any downturns in the market by acquiring
attractive long-term issues at a lower price, and on the other hand, we will be
selling any issues that appear to be overvalued during upward trends in the
market. In addition, the Fund begins 1997 with a portfolio which has a slightly
more favorable price/earnings ratio than the S&P 500. This technique puts the
Fund in a position to take advantage of growth in the market and also allows the
Fund to defend its valuation in a declining market.
The major obstacles in 1997 will involve rising interest rates, wages and
subsequently a rise in the Consumer Price Index. Historically, these
contingencies are indicators of a recessionary period and have negative effects
on stock prices. The managment of the Fund will continue to monitor all relevant
market factors and stand ready to respond in an efficient manner that is
consistent with the investment policies previously outlined.
4
<PAGE>
AMWAY MUTUAL FUND, INC.
Average Annual Total Returns***
For Periods Ended 12/31/96 (adjusted for the maximum sales charge of 3.00%)
1 5 10
Year Year Year
19.64% 12.02% 13.80%
Amway Mutual Fund, Inc.
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 12/31/86
through 12/31/96.
Amy Mutual Fund S&P 500 Stock Index
12-86 10,000 10,000
12-87 10,493 10,526
12-88 11,215 12,274
12-89 14,897 16,163
12-90 15,047 15,659
12-91 21,337 20,431
12-92 21,714 21,988
12-93 24,070 24,200
12-94 22,658 24,520
12-95 29,581 33,722
12-96 36,437 41,464
In comparing the Amway Mutual Fund, Inc. to the S&P 500, 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 S&P 500.
*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 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%.
5
<PAGE>
AMWAY MUTUAL FUND, INC.
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
COMMON STOCK-98.62% Shares or Market
Par Value Value
-------------------------------
$
BANKING-1.94%
Chase Manhattan Corp. (New) 9,100 812,175
First Chicago NBD Corp. 25,700 1,381,375
----------
2,193,550
----------
BUSINESS SERVICES-7.03%
Cognizant Corp. 19,300 636,900
ITT Corp. *37,600 1,630,900
Nynex Corp. 60,600 2,916,375
Xerox Corp. 52,900 2,783,862
----------
7,968,037
----------
CHEMICALS & ALLIED PRODUCTS-8.52%
Bristol-Meyers Squibb Co. 17,000 1,848,750
DuPont (E.I.)
De Nemours & Co. 22,400 2,114,000
Eastman Chemical Co. 29,200 1,613,300
Grace (W.R.) & Co. Del (New) 7,000 362,250
Hercules, Inc. 23,000 994,750
Pharmacia/Upjohn, Inc. 54,200 2,147,675
Union Carbide Corp. 14,200 580,425
----------
9,661,150
----------
COMMUNICATION-14.39%
AT&T Corp. 121,600 5,289,600
Fluor Corp. 11,900 746,725
Frontier Corp. 42,200 954,775
GTE Corp. 62,000 2,821,000
SBC Communications, Inc. 41,800 2,163,150
Sprint Corp. Com. 29,800 1,188,275
Tele Communication Inc. *150,000 1,959,375
US West Media Group *63,900 1,182,150
----------
16,305,050
----------
CREDIT AGENCIES OTHER THAN BANKS-0.50%
American Express Co. 10,100 570,650
----------
ELECTRIC & ELECTRONIC EQUIPMENT-5.39%
Alliedsignal, Inc. 14,300 958,100
AMP Inc. 44,600 1,711,525
Raytheon Co. 21,700 1,044,312
Rockwell International 25,900 1,576,663
Texas Instruments, Inc. 12,900 822,375
----------
6,112,975
----------
ELECTRIC, GAS, & SANITARY SERVICES-1.73%
Texas Utilities Co. 13,400 546,050
WMX Technologies 43,200 1,409,400
----------
1,955,450
----------
FABRICATED METAL PRODUCTS-1.16%
Masco Corp. 36,500 1,314,000
----------
FOOD AND KINDRED PRODUCTS-2.14%
Anheuser-Busch Cos. Inc. 13,900 556,000
Archer-Daniels-Midland 59,876 1,317,272
CPC International, Inc. 7,100 550,250
----------
2,423,522
----------
FOOD STORES-0.80%
Albertson's, Inc. 25,300 901,312
----------
GENERAL MERCHANDISE STORES-6.49%
Dillard Department Stores, Inc. 64,000 1,976,000
Federated Department Stores *65,600 2,238,600
May Dept. Stores Co. 32,700 1,528,725
Sears, Roebuck & Company 35,000 1,614,375
----------
7,357,700
----------
HEALTH SERVICES-4.99%
Columbia/HCA Healthcare Corp. 73,200 2,982,900
Humana, Inc. *63,900 1,222,087
United Healthcare Corp. 32,100 1,444,500
----------
5,649,487
----------
INSTRUMENTS & RELATED PRODUCTS-0.60%
Eastman Kodak Co. 8,500 682,125
----------
INSURANCE CARRIERS-13.02%
Aetna Inc. 36,900 2,952,000
Allstate Corp. 45,000 2,604,375
American International
Group, Inc. 6,800 736,100
Chubb Corp. 55,900 3,004,625
General RE Corporation 14,800 2,334,700
Loews Corp. 19,400 1,828,450
Unum Corp. 18,000 1,300,500
----------
14,760,750
----------
The accompanying notes are an integral part of these financial statements
6
<PAGE>
AMWAY MUTUAL FUND, INC.
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
COMMON STOCK-98.62% Shares or Market
(continued) Par Value Value
-------------------------------
$
LUMBER AND WOOD PRODUCTS-0.41%
Georgia-Pacific Corp. 6,400 460,800
----------
MACHINERY, EXCEPT ELECTRICAL-4.00%
Digital Equipment Corp. *55,300 2,011,537
International Business Machines 16,700 2,521,700
----------
4,533,237
----------
METAL MINING-1.66%
Newmont Mining Corp. 42,100 1,883,975
----------
MISCELLANEOUS MANUFACTURING
INDUSTRIES-.00%
Jan Bell Marketing Warrants *762 8
-
MOTION PICTURES-1.61%
Time Warner, Inc. 48,700 1,826,250
----------
OIL AND GAS EXTRACTION-2.82%
Occidental Petroleum Corp. 96,000 2,244,000
Union Pacific Resources 32,500 950,625
----------
3,194,625
----------
PAPER & ALLIED PRODUCTS-2.67%
Champion International Corp. 41,000 1,773,250
International Paper Co. 14,400 581,400
Kimberly-Clark Corp. 7,100 676,275
----------
3,030,925
----------
PETROLEUM & COAL PRODUCTS-4.22%
Amerada Hess Corp. 29,700 1,718,888
Amoco Corporation 13,100 1,054,550
Mobil Corp. 14,200 1,735,950
Texaco, Inc. 2,800 274,750
----------
4,784,138
----------
PRIMARY METAL INDUSTRIES-1.31%
Aluminum Co. of America 17,200 1,096,500
LTV Corp. (New) 32,900 390,688
----------
1,487,188
----------
RAILROAD TRANSPORTATION-1.64%
Burlington Northern Santa Fe 2,200 190,025
CSX Corp. 39,600 1,673,100
----------
1,863,125
----------
SECURITY & COMMODITY BROKERS &
SERVICES-2.44%
Dean Witter Discover, Inc. 41,800 2,769,250
----------
STONE, CLAY & GLASS PRODUCTS-0.91%
PPG Industries 18,400 1,032,700
----------
TRANSPORTATION BY AIR-1.84%
AMR Corp. *13,000 1,145,625
Delta Air Lines 13,200 935,550
----------
2,081,175
----------
TRANSPORTATION EQUIPMENT-4.06%
Ford Motor Co. 80,700 2,572,313
General Motors Corp. 25,000 1,393,750
McDonnell Douglas Corp. 9,900 633,600
----------
4,599,663
----------
WHOLESALE TRADE-DURABLE GOODS-0.33%
Becton Dickinson & Co. 8,400 364,350
----------
Total Common Stock-98.62% $111,767,167
Cash (Michigan National Bank
Money Market Account)-1.34% $ 1,513,983
All Other Assets Less Liabilities-.04% $ 46,252
NET ASSETS-100% $113,327,402
-----------
-----------
*Non-dividend producing as of December 31, 1996.
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
AMWAY MUTUAL FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
ASSETS:
Investments in securities, at market
(identified cost $101,853,381) (Notes 1-A and 3) $111,767,167
Cash 1,513,983
Receivables:
Dividends 220,516
Interest 5,511
Prepaid insurance 2,583
-----------
TOTAL ASSETS 113,509,760
-----------
LIABILITIES:
Accounts payable:
Advisory fee (Note 4) 153,081
Transfer agent fee (Note 4) 20,477
Accrued expenses 8,800
-----------
TOTAL LIABILITIES 182,358
-----------
NET ASSETS:
Capital stock (20,000,000 shares of $1.00 par value
authorized), amount paid in on 14,871,253
shares outstanding (Note 2) $103,477,968
Overdistributed net investment income (23,735)
Overdistributed net realized gain on investments (40,617)
Net unrealized appreciation on investments 9,913,786
------------
Net assets (equivalent to $7.62 per share) $113,327,402
------------
------------
COMPUTATION OF MAXIMUM OFFERING PRICE OF THE
FUND'S SHARES-as of December 31, 1996:
Net asset value per share ($113,327,402 DIVIDED BY
14,871,253 shares) $7.62
Offering price per share (net asset value plus sales
commission) (1000/970 x $7.62) $7.86
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
INVESTMENT INCOME:
Income:
Dividends $1,894,573
Interest 153,721
Security litigation settlement 29,428
-----------
Total income 2,077,722
Expenses:
Advisory fee (Note 4) 524,637
Transfer agent fee (Note 4) 242,992
Custodian fee 40,740
Shareholder
communications 40,382
Data processing service (Note 5) 30,749
Taxes 26,840
Audit fees 21,023
Insurance 17,340
Registration fees 10,542
Legal services 6,875
-----------
Total expenses 962,120
-----------
Fees paid indirectly (Note 5) (30,749)
-----------
Net expenses 931,371
-----------
NET INVESTMENT INCOME 1,146,351
-----------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS:
Net realized gain (Note 3) 17,657,371
Unrealized appreciation on
investments:
Beginning of year $8,130,234
End of year 9,913,786
-----------
Net change in unrealized appreciation on investments 1,783,552
-----------
NET GAIN ON INVESTMENTS 19,440,923
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $20,587,274
-----------
-----------
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
AMWAY MUTUAL FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
Year ended December 31,
-----------------------
1996 1995
---- ----
NET ASSETS FROM OPERATIONS:
Net investment income $ 1,146,351 $ 885,360
Net realized gain on investments 17,657,371 12,273,181
Net increase (decrease) in unrealized
appreciation 1,783,552 5,968,312
----------- -----------
Net increase (decrease) in net assets
resulting from operations 20,587,274 19,126,853
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (1,149,246) (909,904)
Net realized gain from investment transactions (17,613,452) (12,305,317)
----------- -----------
Total distributions to shareholders (18,762,698) (13,215,221)
----------- -----------
CAPITAL SHARE TRANSACTIONS (Notes 2 and 4):
Net proceeds from sale of shares 31,252,559 13,441,433
Net asset value of shares issued to
shareholders in reinvestments of investment
income and realized gain from security
transactions 18,195,824 12,658,471
----------- -----------
49,448,383 26,099,904
Payment for shares redeemed (15,193,852) (13,684,375)
----------- -----------
Net increase in net assets derived from
capital share transactions 34,254,531 12,415,529
----------- -----------
Net total increase 36,079,107 18,327,161)
NET ASSETS:
Beginning of year 77,248,295 58,921,134
----------- -----------
End of year (includes overdistributed
net investment income of $23,735 and
$20,841, respectively) $113,327,402 $77,248,295
----------- -----------
----------- -----------
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 is 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, 1996), 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.
9
<PAGE>
AMWAY MUTUAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 2-CAPITAL STOCK
At December 31, 1996, there were 20,000,000 shares of $1.00 par value capital
stock authorized. Transactions in capital stock were as follows:
YEAR ENDED DECEMBER 31,
1996 1995
Shares:
Outstanding, beginning of year 10,399,006 8,566,411
------------ -----------
Sold 3,924,168 1,917,496
Issued in payment of dividends 2,435,854 1,734,037
------------ -----------
6,360,022 3,651,533
Redeemed 1,887,775 1,818,938
------------ -----------
Net increase for the year 4,472,247 1,832,595
------------ -----------
Outstanding, end of year 14,871,253 10,399,006
------------ -----------
------------ -----------
NOTE 3-INVESTMENT TRANSACTIONS
At December 31, 1996, the cost of investments owned was $101,869,174 for
federal income tax purposes. Aggregate gross unrealized gains on securities in
which there was an excess of market value over tax cost were $11,794,193.
Aggregate gross unrealized losses on securities in which there was an excess of
tax cost over market value were $1,896,200. Net unrealized gains for tax
purposes were $9,897,993 at December 31, 1996.
Realized gains from sales of investments were determined on the basis of
specific identification. For tax purposes, gains of $17,614,298 were realized on
investments.
For the year ended December 31, 1996, cost of purchases and proceeds from sales
of investments, other than corporate short-term notes, aggregated $108,722,471
and $91,985,238, 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 $524,637 in 1996. Under the
Principal Underwriter Agreement between the Fund and Amway Management Company,
the advisor receives a net commission for the distribution of the Fund's shares.
This commission paid by the shareholder upon purchase amounted to $478,319 in
1996.
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 $242,992 in 1996.
A beneficial shareholder of Amway Management Company and Amway Stock Transfer
Company is also a beneficial shareholder of approximately 20% (as of December
31, 1996) of the outstanding capital shares of the Fund.
Certain officers and directors of the Fund are affiliated with the investment
advisor and stock transfer agent.
The officers serve without compensation from the Fund. Directors' fees,
amounting to $16,000 in 1996, were paid by Amway Management Company, the Fund's
investment advisor. The director's payments consist of an annual retainer plus a
per meeting fee.
10
<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 $30,749 are paid
for through the use of directed brokerage commissions.
NOTE 6-EVENT SUBSEQUENT TO DECEMBER 31, 1996
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 9,
1997, the Corporations purchased 1,657,275 Amway Mutual Fund shares valued at
$12,777,588 (based on the net asset value of $7.71 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,
-----------------------
1996 1995* 1994 1993 1992 1991 1990 1989 1988 1987
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $7.43 $6.88 $7.71 $7.57 $8.11 $6.82 $7.26 $6.49 $7.87 $7.82
-------------------------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income .10 .10 .03 .02 .02 .06 .08 .16 .16 .13
Net gain (loss) on
securities 1.59 1.98 (.49) .78 .10 2.65 (.01) 1.93 .36 .47
--------------------------------------------------------------------------------------------------------
Total from investment
operations 1.69 2.08 (.46) .80 .12 2.71 .07 2.09 .52 .60
--------------------------------------------------------------------------------------------------------
Distributions:
Dividends (from net
investment income) .09 .11 .03 .02 .02 .06 .08 .16 .15 .13
Distributions (from
capital gains) 1.41 1.42 .34 .64 .64 1.36 .43 1.16 1.75 .42
--------------------------------------------------------------------------------------------------------
Total distributions 1.50 1.53 .37 .66 .66 1.42 .51 1.32 1.90 .55
--------------------------------------------------------------------------------------------------------
Net Asset Value,
end of period $7.62 $7.43 $6.88 $7.71 $7.57 $8.11 $6.82 $7.26 $6.49 $7.87
--------------------------------------------------------------------------------------------------------
Total Return** 23.18% 30.55% (5.87%) 10.85% 1.77% 41.81% 1.01% 32.83% 6.89% 8.02%
Ratios/Supplemental Data
Net assets, end of
period (000's omitted) $113,327 $77,248 $58,921 $61,741 $55,342 $53,238 $38,286 $39,029 $31,274 $32,765
Ratio of expenses to
average net assets*** 1.0% 1.1% 1.1% 1.1% 1.1% 1.1% 1.2% 1.2% 1.3% 1.1%
Ratio of net income to
average net assets 1.2% 1.2% .4% .2% .3% .7% 1.1% 2.0% 1.9% 1.4%
Portfolio turnover rate 100.4% 173.3% 78.1% 91.5% 136.5% 160.4% 171.1% 14.6% 135.5% 15.3%
Average commission
rate per share $.0600 $.0598 $.0597 $.0682 $.0691 $.0697 $.0708 $.0684 $.0672 $.0669
</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 includes fees paid with brokerage commissions for fiscal
years ending after September 1, 1995.
11
<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 investments, as of December 31,
1996, 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, 1996 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, 1996, 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 17, 1997
12
<PAGE>
AMWAY MUTUAL FUND, INC.
FORM N-1A
PART C
OTHER INFORMATION
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Amway Mutual Fund, Inc.
Ada, Michigan
We hereby consent to the incorporation by reference in the Statement of
Additional Information constituting a part of the Registration Statement for
SEC File #2-39663, Post-Effective Amendment No. 42 of our report dated
January 17, 1997, relating to the financial statements, schedules and
selected per share data and ratios of Amway Mutual Fund, Inc. appearing in
the Company's Annual Shareholders Report for the year ended December 31, 1996.
We also consent to the reference to us under the captions "Financial
Highlights" in the Prospectus and "Auditors" in the Statement of Additional
Information.
BDO Seidman, LLP
Grand Rapids, Michigan
March 3, 1997
<PAGE>
AMWAY MUTUAL FUND, INC. AND CASH EQUIVALENT FUND
ACCOUNT APPLICATION
Mail to: Amway Management Company
7575 Fulton Street East, Ada, Michigan 49355-7150
(616) 787-6288 or (800) 346-2670
1. INVESTMENT SELECTION
Please make my investment in the Fund(s) below.
Make check payable to: Amway Management Company
/ / Amway Mutual Fund, Inc. $__________
(MINIMUM INITIAL INVESTMENT $500)
Cash Equivalent Fund (CEF)*
(MINIMUM INITIAL INVESTMENT $1,000 PER PORTFOLIO)
/ / Money Market Portfolio $__________
/ / Government Securities Portfolio $__________
/ / Tax-Exempt Portfolio $__________
*Available for U.S. residents only.
EXCHANGE PRIVILEGE
Amway Mutual Fund shares can be exchanged in and out of the Cash Equivalent Fund
money market fund. For additional information see the prospectus for Amway
Mutual Fund, Inc.
2. ACCOUNT REGISTRATION
(Choose One Only)
/ / INDIVIDUAL OR JOINT ACCOUNT
____________________________________________________
Owner's Name: First, Middle, Last
___ ___
____________________________________________________
A.D.A. No. Soc. Sec. No. (for IRS)
____________________________________________________
Joint Owner's Name: First, Middle, Last
___ ___
____________________________________________________
Soc.Sec. No. (for IRS)
Registration will be "JOINT TENANTS WITH RIGHTS OF SURVIVORSHIP" unless
otherwise specified.
/ / GIFTS TO MINORS:
____________________________________________________
Custodian's Name: (One Name only)
____________________________________________________
Minor's State of Residence
____________________________________________________
Minor's Name: First, Middle, Last
___ ___
____________________________________________________
Minor's Social Security Number
/ / CORPORATIONS, TRUSTS, ETC. OR OTHERS IN ANY FIDUCIARY CAPACITY
____________________________________________________
Name
____________________________________________________
A.D.A. No. Tax I.D. Number
Type: / / Corporation / / Association
/ / Partnership / / Trust/Date of Trust _____
____________________________________________________
Trustee
3. MAILING ADDRESS
__________________________________________________________
Street or P.O. Box
__________________________________________________________
City, State, Zip
( )
__________________________________________________________
Daytime Phone (include Area Code)
( )
__________________________________________________________
Evening Phone (include Area Code)
4. CITIZENSHIP
/ / United States / / Resident Alien
/ / Non-Resident Alien: Indicate Country of Residence __________
5. DIVIDEND AND CAPITAL GAIN OPTIONS
(Please check ONE box for each type of distribution)
If no box is checked, all dividends and capital gain distributions will be
reinvested, increasing your shares. Reinvested shares are invested at the net
asset value per share without a sales charge.
Cash Equivalent Fund dividends / / Cash Reinvested
Amway Mutual Fund income dividends / / Cash Reinvested
Amway Mutual Fund
Capital Gain distributions / / Cash Reinvested
6. TELEPHONE OR TELEGRAM TRANSACTION OPTION
/ / Yes / / No (YES box must be checked to authorize this option).
I/We hereby authorize Amway Stock Transfer Company (ASTC) and/or Amway
Management Company (AMC) to honor any telephone or telegram transaction requests
from any person representing themselves to be the Investor and identifying the
account by its number. Telephone and Telegraph transactions will be recorded and
written confirmations will be mailed to shareholders. This option is available
only when no stock certificates have been issued. The proceeds will be mailed to
the name and address in which the Fund account is registered, or mailed or wired
to the bank account designated below (applies only if the bank account
registration matches exactly the fund account registration). It is understood
that a bank fee may be charged for each wire redemption of $5,000 or less.
Before this option is effective for a corporation, partnership, or other
organizations, additional documents may be required. This option is not
available for Profit-Sharing Trust and IRA accounts. These procedures are
established to confirm that telephone or telegraph transaction requests are
genuine. For assistance or additional information, please contact AMC. It is
understood that neither Amway Mutual Fund, ASTC, nor AMC will be responsible for
the authenticity of transaction instructions received by telephone or telegram
and will not be liable for any loss, liability, cost, or expense for acting upon
such instructions. The Investor bears the risk of loss unless the Fund, AMC and
ASTC fails to follow the procedures designed to confirm instructions as genuine.
BANK REGISTRATION (PLEASE PROVIDE DEPOSIT SLIP)
__________________________________________________________
Name of Your Bank Branch
__________________________________________________________
Bank Checking Account Number Nine Digit Bank ABA #
__________________________________________________________
Address of Bank
__________________________________________________________
__________________________________________________________
Name(s) in which bank account is registered. (Fund registration must be
identical to bank account registration).
(Please see reverse side)
<PAGE>
7. OPTIONAL CHECKWRITING PRIVILEGE
Cash Equivalent Fund Portfolios Only
/ / Yes / / No
If yes, the undersigned authorizes drafts drawn against my Cash Equivalent Fund
account to be honored and the redemption of a sufficient number of Fund shares
to pay such drafts. Minimum amount: $250.00 per draft.
JOINT ACCOUNTS
Check whether / / only one owner or / / all owners are required to sign
Redemption Checks.
INSTITUTIONAL ACCOUNTS
Indicate the number of authorized signers required to sign Redemption
Checks. / / 1 / / 2 / / 3 / / 4
INSTITUTIONAL ACCOUNTS
Please type or print names and title of authorized signers. Persons signing as
representatives for an institutional account warrant as individuals that each
person is an authorized representative, that the account and privileges selected
have been duly authorized, that all signatures hereon are genuine and that the
persons indicated hereon are authorized to sign.
A. _________________________________________________
B. _________________________________________________
C. _________________________________________________
D. _________________________________________________
SIGNATURE GUARANTEE
ALWAYS REQUIRED FOR ANY CHANGE OR MODIFICATION. REQUIRED ON ALL INSTITUTIONAL
ACCOUNTS. NOT REQUIRED WHEN ESTABLISHING AN INDIVIDUAL ACCOUNT. Signature
guarantee must be provided by a commercial bank, trust company, member of
national securities exchange, or savings and loan association.
AFFIX SIGNATURE GUARANTEE STAMP
8. REQUIRED INFORMATION AND SIGNATURES
(All shareholders must sign.)
I/We have full right, power, authority and legal capacity (if a natural person,
am/are of legal age in state of residence) to purchase shares of the Fund(s).
I/We affirm that I/we have received and read the current Prospectuses of the
Funds and agree to their terms. I/We understand the Funds' investment objectives
and program and have determined that the Fund(s) is/are a suitable investment
based upon my/our investment needs and financial situation. By signing below (a)
I/we understand that this account will have the Exchange Privilege capability
with the Amway Mutual Fund and the portfolios of the Cash Equivalent Fund and
that all information provided in the above items will apply to any fund into
which my/our shares may be exchanged and I/we understand that the Exchange
Privilege can be modified or terminated as described in the prospectus; (b) I/we
hereby ratify any instructions given on this account and any account into which
I/we exchange relating to the above items and agree that neither the Fund(s),
the transfer agency nor Amway Management Company will be liable for any loss,
cost or expense for acting upon such instructions (by telephone or writing)
believed to be genuine and in accordance with the procedures described in the
Prospectus; and (c) my/our responsibility is to read the Prospectus of any Fund
into which I/we exchange.
Under penalties or perjury, I/we (the first name and joint owner listed on a
joint account) certify (1) that the number shown in the Account Registration
(Section 2) below my/our name(s) on this application is my/our correct taxpayer
identification number and (2) that I/we am/are not subject to backup withholding
because: (a) I/we have not been notified of being subject to backup withholding
as a result of a failure to report all interest or dividends, or (b) the
Internal Revenue Service has notified me/us that I/we am/are no longer subject
to backup withholding. (Please cross out 2(a) and (b) if incorrect.)
SIGN IN BOX BELOW EXACTLY AS NAME OR NAMES APPEAR IN REGISTRATION ABOVE OR IN
THE LIST BELOW WITH BLUE OR BLACK BALLPOINT. Note especially first name and
middle initial.
A. Signature of Owner, Trustee, Custodian, or authorized Corporate Officer.
Date
B. Signature of Joint Owner, Co-Trustee, etc. (if any) Date
C. Signature of Joint Owner, Co-Trustee, etc. (if any) Date
D. Signature of Joint Owner, Co-Trustee, etc. (if any) Date
The application shall become a contract only upon acceptance by the Fund. The
purchase, sale and issuance of shares shall be governed by the laws of the State
of Michigan, and the passage of title and the delivery of shares shall be deemed
to take place in Michigan. Additional documents must be requested from the Fund
to establish a Profit-Sharing Trust or Individual Retirement Account.
FOR AMWAY MANAGEMENT COMPANY USE ONLY
Master Account Number: 70347
Dealer Number: 60063
CASH EQUIVALENT FUND ACCOUNT NUMBER:
Money Market Port. 3417 ______ ______ ______ ______ ______ ___
Gov't Sec. Port. 3413 ______ ______ ______ ______ ______ ___
Tax-Exempt Port. 3415 ______ ______ ______ ______ ______ ___
<PAGE>
EXHIBIT OF PERFORMANCE CALCULATIONS
This exhibit reflects the calculation of the performance figures that
appear under "Investment Performance Information" in Part A (information
required in a prospectus) for Amway Mutual Fund, Inc. ("Fund").
The average annual total return for the Fund for a specific period is
found by taking a hypothetical $1,000 investment ("Initial Investment") at
the beginning of the period, adjusting for the maximum sales charge (3.0% of
the offering price), reinvesting all dividends and capital gains at the net
asset value on the reinvestment dates during the period, and computing the
redeemable value at the end of the period. The redeemable value is then
divided by the initial investment, and this quotient is taken to the Nth root
(N representing the number of years in the period) and 1 is subtracted from
the result, which is then expressed as a percentage. Thus, the following
formula applies:
Average Annual Total Return =
Using the formula provided, average annual total return for the 1, 5, and
10 year periods are calculated in the following schedules which are included
on Pages C-23 through C-26.
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
ONE YEAR
- -----------------------------------------------------------------------------------------------------------------------------------
INITIAL DIVIDENDS CAP GAIN EXECUTION SHARES FROM VALUE OF ORDINARY INC ACC ORDINARY
DATE DESCRIPTION INVESTMENT PER SH. PER SH. PRICE NAV/SH INITIAL INV. SHARES DIVIDENDS $ INC DIV $
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/95 Purchase $1,000.00 7.650 130.719
3/31/96 Qtr. FMV 8.140 130.719 1,064.05
6/30/96 Qtr. FMV 8.320 130.719 1,087.58
9/30/96 Qtr. FMV 8.480 130.719 1,108.50
12/18/96 OID & CG 0.092 1.410 7.470 130.719 12.03 12.03
12/31/96 Qtr. FMV 7.620 130.719 996.08
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
OID ACC ACC CAP ACC CAP CAP GAIN ACC CAP ACC CAP GAIN TOTAL TOTAL AVERAGE
OID OID GAIN GAIN DIST GAIN SHARES SHARES
SHARES SHARES CURR DIST $ DIST $ SHARES DIST CURRENT FMV OWNED OWNED 12/31 ANNUAL
FMV SHARES FMV RETURN
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
130.719
130.719 1,064.05
130.719 1,087.58
130.719 1,108.50
1.610 1.610 184.31 184.31 24.674 24.674 157.003
1.610 12.27 184.31 24.674 188.01 157.003 1,196.36 19.6361%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
FIVE YEARS
- -----------------------------------------------------------------------------------------------------------------------------------
INITIAL DIVIDENDS CAP GAIN EXECUTION SHARES FROM VALUE OF ORDINARY INC ACC ORDINARY
DATE DESCRIPTION INVESTMENT PER SH. PER SH. PRICE NAV/SH INITIAL INV. SHARES DIVIDENDS $ INC DIV $
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/91 Purchase $ 1,000.00 7.850 127.389
3/31/92 Qtr. FMV 7.660 127.389 975.80
6/30/92 Qtr. FMV 7.260 127.389 924.84
9/30/92 Qtr. FMV 7.420 127.389 945.22
12/15/92 OID & CG 0.022 0.638 7.310 127.389 2.80 2.80
12/31/92 Qtr. FMV 7.570 127.389 964.33
3/31/93 Qtr. FMV 7.940 127.389 1,011.46
6/30/93 Qtr. FMV 7.870 127.389 1,002.55
9/30/93 Qtr. FMV 8.310 127.389 1,058.60
12/14/93 OID & CG 0.020 0.640 7.470 127.389 2.78 5.58
12/31/93 Qtr. FMV 7.710 127.389 982.17
3/31/94 Qtr. FMV 7.410 127.389 943.95
6/30/94 Qtr. FMV 7.020 127.389 894.27
9/30/94 Qtr. FMV 7.270 127.389 926.11
12/19/94 OID & CG 0.030 0.340 6.740 127.389 4.53 10.12
12/31/94 Qtr. FMV 6.880 127.389 876.43
3/31/95 Qtr. FMV 7.330 127.389 933.76
6/30/95 Qtr. FMV 7.820 127.389 996.18
9/30/95 Qtr. FMV 8.540 127.389 1,087.90
12/20/95 OID & CG 0.105 1.420 7.300 127.389 16.74 26.86
12/31/95 Qtr. FMV 7.430 127.389 946.50
3/31/96 Qtr. FMV 8.140 127.389 1,036.94
6/30/96 Qtr. FMV 8.320 127.389 1,059.87
9/30/96 Qtr. FMV 8.480 127.389 1,080.25
12/18/96 OID & CG 0.092 1.410 7.470 127.389 17.73 44.59
12/31/96 Qtr. FMV 7.620 127.389 970.70
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
OID ACC OID ACC CAP ACC CAP CAP GAIN ACC CAP ACC CAP TOTAL TOTAL AVERAGE
OID GAIN GAIN DIST GAIN GAIN SHARES SHARES
SHARES SHARES CURR DIST $ DIST $ SHARES DIST CURRENT OWNED OWNED ANNUAL
FMV SHARES FMV 12/31 FMV RETURN
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
127.389
127.389 975.80
127.389 924.84
127.389 945.22
0.383 0.383 81.27 81.27 11.118 11.118 138.890
0.383 2.90 81.27 11.118 84.16 138.890 1,051.40 5.1398%
0.383 3.04 81.27 11.118 88.28 138.890 1,102.79
0.383 3.02 81.27 11.118 87.50 138.890 1,093.07
0.383 3.19 81.27 11.118 92.39 138.890 1,154.18
0.372 0.755 88.89 170.16 11.900 23.018 151.162
0.755 5.82 170.16 23.018 177.47 151.162 1,165.46 7.9563%
0.755 5.60 170.16 23.018 170.56 151.162 1,120.11
0.755 5.30 170.16 23.018 161.58 151.162 1,061.15
0.755 5.49 170.16 23.018 167.34 151.162 1,098.94
0.673 1.428 51.39 221.56 7.625 30.643 159.460
1.428 9.83 221.56 30.643 210.82 159.460 1,097.08 3.1367%
1.428 10.47 221.56 30.643 224.61 159.460 1,168.84
1.428 11.17 221.56 30.643 239.63 159.460 1,246.97
1.428 12.20 221.56 30.643 261.69 159.460 1,361.79
2.294 3.722 226.43 447.99 31.018 61.661 192.771
3.722 27.65 447.99 61.661 458.14 192.771 1,432.29 9.3976%
3.722 30.29 447.99 61.661 501.92 192.771 1,569.16
3.722 30.96 447.99 61.661 513.02 192.771 1,603.86
3.722 31.56 447.99 61.661 522.89 192.771 1,634.70
2.374 6.096 271.81 719.80 36.387 98.048 231.532
6.096 46.45 719.80 98.048 747.12 231.532 1,764.28 12.0246%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
TEN YEARS
- -----------------------------------------------------------------------------------------------------------------------------------
INITIAL DIVIDENDS CAP GAIN EXECUTION SHARES FROM VALUE OF ORDINARY INC ACC ORDINARY
DATE DESCRIPTION INVESTMENT PER/ SH. PER SH. PRICE NAV/SH INITIAL INV. SHARES DIVIDENDS $ INC DIV $
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/86 Purchase $ 1,000.00 8.050 124.224
3/31/87 Qtr. FMV 9.860 124.224 1,224.84
6/15/87 OID 0.060 10.070 124.224 7.45 7.45
6/30/87 Qtr. FMV 9.920 124.224 1,232.30
9/30/87 Qtr. FMV 10.720 124.224 1,331.68
12/11/87 OID & CG 0.070 0.420 7.320 124.224 8.75 16.20
12/31/87 Qtr. FMV 7.870 124.224 977.64
3/31/88 Qtr. FMV 8.040 124.224 998.76
6/15/88 OID 0.070 8.490 124.224 9.33 25.53
6/30/88 Qtr. FMV 8.520 124.224 1,058.39
9/30/88 Qtr. FMV 8.280 124.224 1,028.57
12/16/88 OID & CG 0.085 1.745 6.410 124.224 11.43 36.96
12/31/88 Qtr. FMV 6.490 124.224 806.21
3/31/89 Qtr. FMV 6.870 124.224 853.42
6/21/89 OID 0.090 7.460 124.224 15.55 52.51
6/30/89 Qtr. FMV 7.370 124.224 915.53
9/30/89 Qtr. FMV 8.240 124.224 1,023.60
12/15/89 OID & CG 0.070 1.160 7.100 124.224 12.24 64.76
12/31/89 Qtr. FMV 7.260 124.224 901.86
3/31/90 Qtr. FMV 7.240 124.224 899.38
6/20/90 OID 0.050 7.660 124.224 10.26 75.01
6/30/90 Qtr. FMV 7.670 124.224 952.80
9/30/90 Qtr. FMV 6.550 124.224 813.66
12/14/90 OID & CG 0.030 0.430 6.740 124.224 6.20 81.21
12/31/90 Qtr. FMV 6.820 124.224 847.20
3/31/91 Qtr. FMV 8.220 124.224 1,021.12
6/14/91 OID 0.050 8.340 124.224 11.03 92.24
6/30/91 Qtr. FMV 7.980 124.224 991.30
9/30/91 Qtr. FMV 8.450 124.224 1,049.69
12/13/91 OID & CG 0.010 1.360 7.390 124.224 2.22 94.46
12/31/91 Qtr. FMV 8.110 124.224 1,007.45
3/31/92 Qtr. FMV 7.660 124.224 951.55
6/30/92 Qtr. FMV 7.260 124.224 901.86
9/30/92 Qtr. FMV 7.420 124.224 921.74
12/15/92 OID & CG 0.022 0.638 7.310 124.224 5.79 100.25
12/31/92 Qtr. FMV 7.570 124.224 940.37
3/31/93 Qtr. FMV 7.940 124.224 986.34
6/30/93 Qtr. FMV 7.870 124.224 977.64
9/30/93 Qtr. FMV 8.310 124.224 1,032.30
12/14/93 OID & CG 0.020 0.640 7.470 124.224 5.74 105.99
12/31/93 Qtr. FMV 7.710 124.224 957.76
3/31/94 Qtr. FMV 7.410 124.224 920.50
6/30/94 Qtr. FMV 7.020 124.224 872.05
9/30/94 Qtr. FMV 7.270 124.224 903.11
12/19/94 OID & CG 0.030 0.340 6.740 124.224 9.37 115.35
12/31/94 Qtr. FMV 6.880 124.224 854.66
3/31/95 Qtr. FMV 7.330 124.224 910.56
6/30/95 Qtr. FMV 7.820 124.224 971.43
9/30/95 Qtr. FMV 8.540 124.224 1,060.87
12/20/95 OID & CG 0.105 1.420 7.300 124.224 34.58 149.93
12/31/95 Qtr. FMV 7.430 124.224 922.98
3/31/96 Qtr. FMV 8.140 124.224 1,011.18
6/30/96 Qtr. FMV 8.320 124.224 1,033.54
9/30/96 Qtr. FMV 8.480 124.224 1,053.42
12/18/96 OID & CG 0.092 1.410 7.470 124.224 36.63 186.56
12/31/96 Qtr. FMV 7.620 124.224 946.58
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
OID ACC OID ACC CAP ACC CAP CAP GAIN ACC CAP ACC CAP TOTAL TOTAL AVERAGE
OID GAIN GAIN DIST GAIN GAIN SHARES SHARES
SHARES SHARES CURR DIST $ DIST $ SHARES DIST SHARES CURRENT OWNED OWNED 12/31 ANNUAL
FMV FMV FMV RETURN
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
124.224
124.224
0.740 0.740 0.00 0.00 0.000 0.000 124.964
0.740 7.34 0.00 0.000 124.964 1,239.64
0.740 7.93 0.00 0.000 124.964 1,339.61
1.195 1.935 52.48 52.48 7.170 7.170 133.329
1.935 15.23 52.48 7.170 56.43 133.329 1,049.30 4.9298%
1.935 15.56 52.48 7.170 57.65 133.329 1,071.96
1.099 3.034 0.00 52.48 0.000 7.170 134.428
3.034 25.85 52.48 7.170 61.09 134.428 1,145.33
3.034 25.13 52.48 7.170 59.37 134.428 1,113.06
1.783 4.817 234.58 287.06 36.595 43.766 172.806
4.817 31.26 287.06 43.766 284.04 172.806 1,121.51 5.9015%
4.817 33.09 287.06 43.766 300.67 172.806 1,187.18
2.085 6.902 0.00 287.06 0.000 43.766 174.891
6.902 50.87 287.06 43.766 322.55 174.891 1,288.95
6.902 56.87 287.06 43.766 360.63 174.891 1,441.10
1.724 8.626 202.87 489.94 28.574 72.339 205.189
8.626 62.63 489.94 72.339 525.18 205.189 1,489.67 14.2081%
8.626 62.45 489.94 72.339 523.74 205.189 1,485.57
1.339 9.965 0.00 489.94 0.000 72.339 206.528
9.965 76.44 489.94 72.339 554.84 206.528 1,584.07
9.965 65.27 489.94 72.339 473.82 206.528 1,352.76
0.919 10.885 88.81 578.74 13.176 85.515 220.624
10.885 74.23 578.74 85.515 583.22 220.624 1,504.65 10.7539%
10.885 89.47 578.74 85.515 702.94 220.624 1,813.53
1.323 12.207 0.00 578.74 0.000 85.515 221.946
12.207 97.42 578.74 85.515 682.41 221.946 1,771.13
12.207 103.15 578.74 85.515 722.61 221.946 1,875.45
0.300 12.508 301.85 880.59 40.845 126.361 263.092
12.508 101.44 880.59 126.361 1,024.79 263.092 2,133.68 16.3659%
12.508 95.81 880.59 126.361 967.92 263.092 2,015.29
12.508 90.81 880.59 126.361 917.38 263.092 1,910.05
12.508 92.81 880.59 126.361 937.60 263.092 1,952.14
0.792 13.300 167.85 1,048.44 22.962 149.323 286.846
13.300 100.68 1,048.44 149.323 1,130.37 286.846 2,171.42 13.7952%
13.300 105.60 1,048.44 149.323 1,185.62 286.846 2,277.56
13.300 104.67 1,048.44 149.323 1,175.17 286.846 2,257.48
13.300 110.52 1,048.44 149.323 1,240.87 286.846 2,383.69
0.768 14.068 183.58 1,232.02 24.576 173.899 312.190
14.068 108.46 1,232.02 173.899 1,340.76 312.190 2,406.98 13.3695%
14.068 104.24 1,232.02 173.899 1,288.59 312.190 2,313.33
14.068 98.75 1,232.02 173.899 1,220.77 312.190 2,191.57
14.068 102.27 1,232.02 173.899 1,264.24 312.190 2,269.62
1.390 15.457 106.14 1,338.17 15.748 189.647 329.328
15.457 106.34 1,338.17 189.647 1,304.77 329.328 2,265.78 10.7649%
15.457 113.30 1,338.17 189.647 1,390.11 329.328 2,413.97
15.457 120.87 1,338.17 189.647 1,483.04 329.328 2,575.34
15.457 132.00 1,338.17 189.647 1,619.59 329.328 2,812.46
4.737 20.194 467.65 1,805.81 64.061 253.708 398.126
20.194 150.04 1,805.81 253.708 1,885.05 398.126 2,958.07 12.8066%
20.194 164.38 1,805.81 253.708 2,065.18 398.126 3,240.74
20.194 168.01 1,805.81 253.708 2,110.85 398.126 3,312.41
20.194 171.25 1,805.81 253.708 2,151.45 398.126 3,376.11
4.903 25.097 561.36 2,367.17 75.148 328.856 478.177
25.097 191.24 2,367.17 328.856 2,505.89 478.177 3,643.71 13.8032%
</TABLE>
<PAGE>
POWER OF ATTORNEY
WHEREAS, AMWAY MUTUAL FUND, INC. (herein referred to as the Fund) files
with the Securities and Exchange Commission, under the provisions of the
Securities Act of 1933, as amended, and of the Investment Company Act of
1940, as amended, its Registration Statement, relating to the sale of shares
of Common Stock of the Fund; and
WHEREAS, each of the undersigned hold the office or offices in the fund
herein below set opposite his name, respectively;
NOW, THEREFORE, each of the undersigned hereby constitutes and appoints
JAMES J. ROSLONIEC, individually, his attorney, with the full power to act
for him and in his name, place, and stead to sign his name, in the capacity
or capacities set forth below, to the Registration Statement, relating to the
sale of shares of Common Stock of the Fund, and to any and all amendments to
such Registration Statement, and hereby ratifies and confirms all that said
attorney may or shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands this
12th day of December, 1996.
Richard A. DeWitt, Director /s/ Richard A. Dewitt
Donald H. Johnson, Director /s/ Donald H. Johnson
Walter T. Jones, Director /s/ Walter T. Jones
STATE OF MICHIGAN }
}SS.
COUNTY OF KENT }
I, Patrick J. Hays, a Notary Public in and for the County and State
aforesaid, do hereby certify that the above-named Directors, RICHARD A. DE
WITT, DONALD H. JOHNSON, and WALTER T. JONES, of AMWAY MUTUAL FUND, INC.,
known to me and to be the same persons whose names are subscribed to the
foregoing instrument, appeared before me this day in person and acknowledged
that he executed the same instrument as his free and voluntary act and deed,
for the uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereto set my hand and notarial seal this 12th
day of December, 1996.
Notarial Seal /s/ Patrick J. Hays
-------------------
Patrick J. Hays
<PAGE>
AMWAY MUTUAL FUND, INC.
FORM N-1A
PART C
OTHER INFORMATION
ITEM 25. Persons Controlled by or under Common Control with Registrant
Not Applicable.
ITEM 26. Number of Holders of Securities
Listed below is the number of Amway Mutual Fund, Inc. common stock
shareholders as of December 31, 1996. Common stock with a par value
of $1 is the only class of stock issued.
Number of Record
Title of Class Holders
-------------- ----------------
Common Stock 17,481
ITEM 27. Indemnification
Indemnification is covered in Section 9 of the Principal Underwriter
Agreement between Amway Mutual Fund, Inc. and Amway Management
Company, which is filed as an exhibit hereto. Also, a Joint Directors
and Officers Liability Insurance Policy for Amway Management Company,
Amway Stock Transfer Co., and Amway Mutual Fund, Inc. is provided by
those entities. The Twelfth Article of the Certificate of
Incorporation and Article V of the By-Laws of Amway Mutual Fund, Inc.,
which are filed as an exhibit hereto, provide for indemnification for
any person to the extent permitted by law.
ITEM 28. Business and Other Connections of Investment Adviser.
Amway Management Company acts as the investment advisor and principal
underwriter for Amway Mutual Fund, Inc. and as a servicing agent for
the Cash Equivalent Fund.
Business histories of each Director and Officer of the Investment
Adviser of the Registrant has been attached hereto on Pages C-31
through C-37.
Business histories of the Sub-Adviser for the Registrant and of each
of its Directors and Officers have been attached on Pages C-38 through
C-39.
ITEM 29. Principal Underwriter
(a) The principal underwriter, Amway Management Company, acts as such
only for Amway Mutual Fund, Inc. Listed below is the information
required pertaining to the individual Directors and Officers of the
principal underwriter. There is no other principal underwriter.
<PAGE>
AMWAY MUTUAL FUND, INC.
FORM N-1A
PART C
OTHER INFORMATION
ITEM 29. Principal Underwriter (continued)
(b) Name and Principal Positions and Office Position and Offices
Business Address With Underwriter With Registrant
------------------ -------------------- --------------------
James J. Rosloniec Vice President, Treasurer President, Treasurer
7575 Fulton Street, East and Director and Director
Ada, MI 49355-0001
Allan D. Engel President, Secretary and Secretary and Assistant
7575 Fulton Street, East Director Treasurer
Ada, MI 49355-7150
(c) Not Applicable.
ITEM 30. Location of Accounts and Records
With respect to each account, book, or other document required to be
maintained by Section 31(a) of the 1940 Act and the Rules (17 CFR
270.31a-1 to 31a-3) promulgated thereunder, all transfer agent and
shareholder records are in the custody and control of Amway Stock
Transfer Co., Ada, Michigan, pursuant to the Common Records Agreement
Among Amway Mutual Fund, Inc., Amway Management Company, and Amway
Stock Transfer Co; all portfolio securities held or in transfer are
under the control of the Custodian, Michigan National Bank, Grand
Rapids, Michigan; all portfolio security records and brokerage records
related thereto are in the custody and control of Amway Management
Company, Ada, Michigan, or Ark Asset Management Company, Inc., the
Sub-Adviser, pursuant to the Sub-Advisory Agreement; and all remaining
records are in the custody and control of Amway Mutual Fund, Inc.,
Ada, Michigan.
ITEM 31. Management Services
Amway Management Company and Amway Stock Transfer Co. have entered
into a contract with DST, Inc. which provides access to a data
processing recordkeeping system for stockholder accounting. The
system provides and supports remote terminal access to DST facilities
for the maintenance of stockholder records, processing of information,
and the generation of output with respect thereto. Pursuant to this
agreement, Amway Management Company or Amway Stock Transfer Co. have
paid to DST, including equipment costs, telephone lines, and service
fees for the three years ending August 31, 1996, the fiscal year-end,
a total of $266,986.78.
<PAGE>
AMWAY MUTUAL FUND, INC.
FORM N-1A
PART C
OTHER INFORMATION
ITEM 32. Undertakings
(a) Not applicable
(b) Not applicable
(c) Amway Mutual Fund, Inc. undertakes to furnish to each person to
whom a prospectus is delivered a copy of the Fund's latest Annual
Report to Shareholders, upon request and without charge.
<PAGE>
SCHEDULE RE EDUCATION AND BUSINESS HISTORY - ALLAN D. ENGEL
EDUCATION:
North High School, Omaha, Nebraska
Creighton University, Omaha, Nebraska, BSBA 1974
Creighton University, Omaha, Nebraska, JD 1976
POSITIONS:
November 1975 to November 1978, Elmer Fox Westheimer & Co., 7171 Mercy
Road, Omaha, Nebraska 68106, Certified Public Accountant, Tax-Staff.
November 1978 to October 1991, Amway Corporation, 7575 East Fulton Road,
Ada, Michigan 49355, Manager-Financial Projects.
December 1980 to April 18, 1988, Amway Management Company, 7575 East Fulton
Road, Ada, Michigan 49355, Secretary and Assistant Treasurer.
November 1980 to December 1980, Amway Stock Transfer Co., 7575 East Fulton
Road, Ada, Michigan 49355, Assistant Secretary and Assistant Treasurer.
November 1990 to June 1991, DeVos Foundation, 7575 East Fulton Road, Ada,
Michigan 49355, Assistant Treasurer.
December 1986 to December 1994, Amway Corporation Hourly Employees' Pension
Plan, 7575 East Fulton Road, Ada, Michigan 49355, Trustee.
January 1993 to September 1994, Eastbank Corp., 7575 East Fulton Road, Ada,
Michigan 49355, Secretary and Assistant Treasurer.
December 1991 to December 1995, Peter Island Hotel, Inc., c/o Amway
Corporation, 7575 East Fulton Road, Ada, Michigan 49355, owns and operates
Peter Island Yacht Club, Secretary and Assistant Treasurer.
December 1980 continuing, Amway Stock Transfer Co., 7575 East Fulton Road,
Ada, Michigan 49355, Secretary and Assistant Treasurer.
December 1980 continuing, Amway Mutual Fund, Inc., 7575 East Fulton Road,
Ada, Michigan 49355, Secretary and Assistant Treasurer.
March 1984 continuing, Amway Mutual Fund, Inc. 7575 East Fulton Road, Ada,
Michigan 49355, Director.
April 18, 1988 continuing, Amway Management Company, 7575 East Fulton Road,
Ada, Michigan 49355, President, Secretary and Director.
October 1991 continuing, Amway Corporation, 7575 East Fulton Road, Ada,
Michigan 49355, Senior Manager-Investments & Real Estate.
December 1991 continuing, Amway Capital Corp., 7575 East Fulton Road, Ada,
Michgian 49355, Secretary and Assistant Treasurer.
<PAGE>
SCHEDULE RE BUSINESS AND EDUCATION HISTORY - ALLAN D. ENGEL
-2-
December 1991 continuing, Amway Grand Plaza Association, c/o Amway
Corporation, 7575 East Fulton Road, Ada, Michigan 49355, Secretary and
Assistant Treasurer.
December 1991 continuing, Amway Hotel Corporation, 7575 East Fulton Road,
Ada, Michigan 49355, Secretary and Assistant Treasurer.
December 1991 continuing, Amway Properties Corporation, 7575 East Fulton
Road, Ada, Michigan 49355, Ada, Michigan 49355, Secretary and Assistant
Treasurer.
December 1991 continuing, H.I., Inc., c/o Amway Corporation, 7575 East
Fulton Road, Ada, Michigan 49355, Secretary and Assistant Treasurer.
December 1991 continuing, Ja-Ri Corporation, 7575 East Fulton Road, Ada,
Michigan 49355, Secretary and Assistant Treasurer.
December 1991 continuing, Peter Island Estate Ltd., c/o Amway Corporation,
7575 East Fulton Road, Ada, Michigan 49355, owns and operates Peter Island
Yacht Club, Secretary and Assistant Treasurer.
December 1991 continuing, Ultimate Marketing Corp., c/o Amway Corporation,
7575 East Fulton Road, Ada, Michigan 49355, Secretary and Assistant
Treasurer.
December 1991 continuing, Amway Stock Transfer Co., 7575 East Fulton Road,
Ada, Michigan 49355, Director.
November 1992 continuing, Amway Export VA, Co., 7575 East Fulton Road, Ada,
Michigan 49355, Secretary and Assistant Treasurer.
November 1992 continuing, Amway Real Estate Corp., 7575 East Fulton Road,
Ada, Michigan 49355, Secretary and Assistant Treasurer.
December 1992 continuing, Jay and Betty Van Andel Foundation, c/o Amway
Corporation, 7575 East Fulton Road, Ada, Michigan 49355, Secretary and
Assistant Treasurer.
January 1993 continuing, Meadowbrooke Corp., 7575 East Fulton Road, Ada,
Michigan 49355, Secretary and Assistant Treasurer.
January 1993 continuing, Auric Corp., 7575 East Fulton Road, Ada, Michigan
49355, Secretary and Assistant Treasurer.
April 1993 continuing, Emerald Maritime Service, Inc., c/o Amway
Corporation, 7575 East Fulton Road, Ada, Michigan 49355, Secretary and
Assistant Treasurer.
April 1993 continuing, Enterprise Inc., c/o Amway Corporation, 7575 East
Fulton Road, Ada, Michigan 49355, Secretary and Assistant Treasurer.
September 1994 continuing, Plaza Towers Corp., 7575 East Fulton Road, Ada,
Michigan 49355, Vice President, Secretary, and Director.
<PAGE>
SCHEDULE RE BUSINESS AND EDUCATION HISTORY - ALLAN D. ENGEL
-3-
May 1995 continuing, Aviation, Inc., 7575 East Fulton Road, Ada, Michigan
49355, Secretary, Assistant Treasurer and Director.
May 1995 continuing, Magic Carpet Aviation, 7575 East Fulton Road, Ada,
Michigan 49355, Secretary, Assistant Treasurer and Director.
September 1995 continuing, Amway Grand Plaza Association, c/o Amway
Corporation, 7575 East Fulton Road, Ada, Michigan 49355, Vice President and
Director.
September 1995 continuing, Amway Properties Corporation, 7575 East Fulton
Road, Ada, Michigan 49355, Vice President and Director.
September 1995 continuing, Amway Real Estate Corp., 7575 East Fulton Road,
Ada, Michigan 49355, Vice President and Director.
September 1995 continuing, Auric Corp., 7575 East Fulton Road, Ada,
Michigan 49355, Vice President and Director.
September 1995 continuing, Aviation, Inc., 7575 East Fulton Road, Ada,
Michigan 49355, Vice President.
September 1995 continuing, Emerald Maritime Service, Inc., c/o Amway
Corporation, 7575 East Fulton Road, Ada, Michigan 49355, Vice President and
Director.
September 1995 continuing, Enterprise, Inc., c/o Amway Corporation, 7575
East Fulton Road, Ada, Michigan 49355, Vice President and Director..
September 1995 continuing, Magic Carpet Aviation, 7575 East Fulton Road,
Ada, Michigan 49355, Vice President.
September 1995 continuing, Meadowbrooke Corp., 7575 East Fulton Road, Ada,
Michigan 49355, Vice President and Director.
September 1995 continuing, Peter Island Estate Ltd., c/o Amway Corporation,
7575 East Fulton Road, Ada, Michigan 49355, owns and operates Peter Island
Yacht Club, Vice President and Director.
September 1995 continuing, Ultimate Marketing Corp., c/o Amway Corporation,
7575 East Fulton Road, Ada, Michigan 49355, Vice President and Director.
September 1996, continuing, Amway Mutual Fund, Inc., 7575 East Fulton Road,
Ada, Michigan 49355, Vice-President, Secretary and Assistant Treasurer.
<PAGE>
SCHEDULE RE BUSINESS AND EDUCATION HISTORY - JAMES J. ROSLONIEC
EDUCATION:
Catholic Central High School, Grand Rapids, Michigan
Davenport College, Grand Rapids, Michigan, AS Degree 1965
Central Michigan University, Mt. Pleasant, Michigan, BS Degree 1968
POSITIONS:
1968-1970 Staff Member of C.H. Vannatter, CPA, Grand Rapids, Michigan
1970-1972 Senior Internal Auditor of Gulf & Western Industries, Inc.,
Grand Rapids, Michigan
1972-1974 Controller of Furniture City Manufacturing (a Gulf & Western
subsidiary), Grand Rapids, Michigan
1974-1979 Manager of Internal Audit of Amway Corporation, Ada, Michigan
1979-1991 Vice President-Finance and Treasurer of Amway Corporation,
Ada, Michigan
1991-Present Vice President-Audit and Control of Amway Corporation, Ada,
Michigan
December 8, 1980 to March 22, 1984, Amway Management Company, 7575 East
Fulton Road, Ada, Michigan 49355, Vice President and Treasurer.
December 8, 1980 to March 22, 1984, Amway Stock Transfer Co., 7575 East
Fulton Road, Ada, Michigan 49355, Vice President and Treasurer.
December 8, 1980 to March 22, 1984, Amway Mutual Fund, Inc., 7575 East
Fulton Road, Ada, Michigan 49355, open-end investment company, President
and Treasurer.
January 13, 1993 to September 28, 1994, Eastbank Corp., c/o Amway
Corporation 7575 East Fulton Road, Ada, Michigan 49355, Vice President and
Treasurer.
March 23, 1984 to April 18, 1988, Amway Management Company, 7575 East
Fulton Road, Ada, Michigan 49355, President, Treasurer, and Director.
June 9, 1978 continuing, Amway Stock Transfer Co, 7575 East Fulton Road,
Ada, Michigan 49355, President, Treasurer, and Director.
November 16, 1979 continuing, Amway Hotel Corporation, 7575 East Fulton
Road, Ada, Michigan 49355, owns all issued and outstanding stock of
Pantlind Hotel Company, Vice President and Treasurer.
November 16, 1979 continuing, Amway Properties Corporation, 7575 East
Fulton Road, Ada, Michigan 49355, Vice President and Treasurer.
<PAGE>
SCHEDULE RE BUSINESS AND EDUCATION HISTORY - JAMES J. ROSLONIEC
-2-
November 16, 1979 continuing, Ja-Ri Corporation, 7575 East Fulton Road,
Ada, Michigan 49355, sale of food supplements and real estate holding
company, Treasurer.
November 16, 1979 continuing, Peter Island Estate Ltd., c/o Amway
Corporation, 7575 East Fulton Road, Ada, Michigan 49355, owns and operates
Peter Island Yacht Club, Vice President and Treasurer.
November 16, 1979 continuing, Peter Island Hotel, Inc., c/o Amway
Corporation, 7575 East Fulton Road, Ada, Michigan 49355, Vice President and
Treasurer.
June 2, 1980 continuing, Enterprise, Inc., c/o Amway Corporation, 7575 East
Fulton Road, Ada, Michigan 49355, Vice President and Treasurer.
June 5, 1980 continuing, Emerald Maritime Service, Inc., c/o Amway
Corporation, 7575 East Fulton Road, Ada, Michigan 49355, Vice President and
Treasurer.
September 18, 1980 continuing, Amway Grand Plaza Association, c/o Amway
Corporation, 7575 East Fulton Road, Ada, Michigan 49355, Vice President and
Treasurer.
March 22, 1984 continuing, Amway Mutual Fund, Inc., 7575 East Fulton Road,
Ada, Michigan 49355, open-end investment company, President, Treasurer, and
Director.
January 27, 1986 continuing, Ultimate Marketing Corp., c/o Amway
Corporation, 7575 East Fulton Road, Ada, Michigan 49355, Vice President and
Treasurer.
January 18, 1988 continuing, Amway Capital Corporation, c/o Amway
Corporation, 7575 East Fulton Road, Ada, Michigan 49355, Vice President and
Treasurer.
September 18, 1989 continuing, H.I., Inc., c/o Amway Corporation, 7575 East
Fulton Road, Ada, Michgian 49355, Vice President and Treasurer.
May 15, 1990 continuing, Amway Environmental Foundation, c/o Amway
Corporation, 7575 East Fulton Road, Ada, Michigan 49355, Treasurer.
December 13, 1991 continuing, Ja-Ri Corporation, c/o Amway Corporation,
7575 East Fulton Road, Ada, Michigan 49355, Vice President
August 31, 1992 continuing, Amway Export DV, Co., c/o Amway Corporation,
7575 East Fulton Road, Ada, Michgian 49355, Treasurer.
November 12, 1992 continuing, Amway Export VA, Co., c/o Amway Corporation,
7575 East Fulton Road, Ada, Michigan 49355, Vice President, Treasurer and
Director.
November 23, 1992 continuing, Amway Real Estate Corp., 7575 East Fulton
Road, Ada, Michigan 49355, Vice President and Treasurer.
December 11, 1992 continuing, Jay and Betty Van Andel Foundation, c/o Amway
Corporation, 7575 East Fulton Road, Ada, Michigan 49355, Treasurer.
<PAGE>
SCHEDULE RE BUSINESS AND EDUCATION HISTORY - JAMES J. ROSLONIEC
-3-
January 13, 1993 continuing, Auric Corp., c/o Amway Corporation, 7575 East
Fulton Road, Ada, Michigan 49355, Vice President and Treasurer.
January 13, 1993 continuing, Meadowbrooke Corp., c/o Amway Corporation,
7575 East Fulton Road, Ada, Michigan, Vice President and Treasurer.
September 28, 1994 continuing, Eastbank Corp., c/o Amway Corporation, 7575
East Fulton Road, Ada, Michigan 49355, President, Treasurer, and Director.
May 2, 1995 continuing, Aviation, Inc., 7575 East Fulton Road, Ada,
Michigan 49355, Treasurer.
May 2, 1995 continuing, Magic Carpet Aviation, Inc., 7575 East Fulton Road,
Ada, Michigan 49355, Treasurer.
September 1, 1995 continuing, Amway Grand Plaza Association, c/o Amway
Corporation, 7575 East Fulton Road, Ada, Michigan 49355, President and
Director.
September 1, 1995 continuing, Amway Hotel Corporation, 7575 East Fulton
Road, Ada, Michigan 49355, Director.
September 1, 1995 continuing, Amway Properties Corporation, 7575 East
Fulton Road, Ada, Michigan 49355, President.
September 1, 1995 continuing, Amway Real Estate Corp., 7575 East Fulton
Road, Ada, Michigan 49355, President and Director.
September 1, 1995 continuing, Auric Corp., c/o Amway Corporation, 7575 East
Fulton Road, Ada, Michigan 49355, President and Director.
September 1, 1995 continuing, Aviation, Inc., 7575 East Fulton Road, Ada,
Michigan 49355, President and Director.
September 1, 1995 continuing, Emerald Maritime Service, Inc., c/o Amway
Corporation, 7575 East Fulton Road, Ada, Michigan 49355, President and
Director.
September 1, 1995 continuing, Enterprise, Inc., c/o Amway Corporation, 7575
East Fulton Road, Ada, Michigan 49355, President and Director.
September 1, 1995 continuing, Magic Carpet Aviation, Inc., 7575 East Fulton
Road, Ada, Michigan 49355, President and Director.
September 1, 1995 continuing, Meadowbrooke Corp., c/o Amway Corporation,
7575 East Fulton Road, Ada, Michigan 49355, President and Director.
September 1, 1995 continuing, Peter Island Estate Ltd., c/o Amway
Corporation, 7575 East Fulton Road, Ada, Michigan 49355, President and
Director.
September 1, 1995 continuing, Ultimate Marketing Corp., c/o Amway
Corporation, 7575 East Fulton Road, Ada, Michigan 49355, President and
Director.
<PAGE>
SCHEDULE RE BUSINESS AND EDUCATION HISTORY - JAMES J. ROSLONIEC
-4-
PROFESSIONAL ACTIVITIES:
Member of Advisory Board to the Dean of Business Administration, Central
Michigan University
Board of Directors of the American Cancer Society, Kent County Unit
Chairman of Development Task Force with American Cancer Society - Michigan
Division
Member of Advisory Board to the Accounting School, Grand Valley State
University
Board of Directors of the Protection Mutual Insurance Co.
Member of Board at Blythefield Country Club.
<PAGE>
ARK ASSET MANAGEMENT CO., INC.
GROWTH-AT-A-REASONABLE PRICE (GARP) TEAM BIOGRAPHIES
CLIENT COMMUNICATIONS
Joseph P. Scanlon, Jr., Managing Director
B.S., M.B.A., Graduate Assistant-Economics, St John's University (1973)
Managing Director, Equity Portfolio Management Services, Ark Asset management
Co., Inc. (1989-Present)
Senior Vice President, Lehman management Co., Inc. (1983-1989)
Vice President, Director of New Business/Client Servicing, Institutional
Investment Division, Citibank (1978-1982)
Vice President, Director of Marketing, Asset Management Division, Loeb Rhoades &
Co., Inc. (1974-1978)
PORTFOLIO MANAGERS
C. Charles Hetzel, CFA, Vice-Chairman
B.S., University of Utah (1963)
M.B.A., Columbia Graduate School of Business Admin. (1965)
Vice-Chairman, Ark Asset Management Co., Inc. (1989-Present)
Vice-Chairman, Lehman Management Co., Inc. (1985-1989)
President, The Lehman Corporation
Vice-Chairman, The Lehman Investors Fund, Inc. (1984-1985)
Executive Vice President & Director, Lehman Management Co., Inc. (1974-1984)
Managing Director, Lehman Brothers, Executive Vice President & Director, The One
William Street Fund (1973-1984)
Vice President & Director of Research, The Lehman Corporation (1970-1973)
Security Analyst, The Lehman Corporation (1965-1970)
John E. Bailey, CFA, Managing Director
B.A., University of Pennsylvania (1973-1976)
M.B.A., Harvard Business School (1978-1980)
Managing Director, Ark Asset Asset Management Co., Inc. (1993-Present)
Equity Portfolio Manager, Managing Partner (Pasadena Office), Loomis, Sayles
(1984-1993)
Equity Portfolio Manager, First Pacific Advisors (1980-1983)
Lending Representative, National Bank of North America (1976-1978)
<PAGE>
ARK ASSET MANAGEMENT CO., INC.
GROWTH-AT-A-REASONABLE PRICE (GARP) TEAM BIOGRAPHIES
-2-
PORTFOLIO MANAGERS
Steven M. Steiner, Managing Director
B.S., Pennsylvania State University (1965)
M.B.A., Northwestern Graduate School of Management (1966)
Managing Director, Ark Asset Management Co., Inc. (1990-Present)
Managing Director, Equitable Capital management Corp. (1986-1990)
Managing Director, Equitable Investment Management Corp. (1981-1986)
Portfolio Manager, Neuberger & Berman (1981)
Vice President, Equitable Life (1969-1980)
1st Lieutenant, U.S. Army (1966-1968)
William G. Steuernagel, CFA, Managing Director
B.S., M.B.A., Boston University (1972)
Managing Director, Ark Asset Management Co., Inc. (1993-Present)
Senior Manager & Portfolio Manager, Ark Asset Management Co., Inc. (1989-1993)
First Vice President & Analyst/Portfolio Manager, Lehman Management Co., Inc.
(1988-1989)
Vice President & Analyst/Portfolio Manager, Butler Capital (1987-1988)
First Vice President & Security Analyst, Lehman Management Co., Inc. (1983-1987)
Senior Investment Officer, Mellon Bank East (1972-1983)
James G. Pontone, Senior Manager
B.A., Skidmore College (1982)
M.B.A., New York University, Stern School of Business (1989)
Portfolio Manager, Ark Asset Management Co., Inc. (1995-Present)
Portfolio Manager/Analyst, Mitchell Hutchins Institutional Investors (1994)
Vice President, Mitchell Hutchins Institutional Investors (1992-1994)
Associate, Morgan Stanley Asset Management (1991-1992)
Assistant Trader, Spear, Leeds & Kellogg, Inc. (1986-1987)
Investment Executive, Paine Webber, Inc. (1985-1986)
Registered Representative, Merrill Lynch & Co. (1983-1985)
<PAGE>
AMWAY MUTUAL FUND, INC.
FORM N-1A
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, the Registrant certifies that it
meets all of the requirements for effectiveness of this Registration
Statement pursuant to Rule 485(b) Under the Securities Act of 1933, and has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized in the Township of Ada,
and State of Michigan, on the day of March 5, 1997.
________________________________________________________________________________
AMWAY MUTUAL FUND, INC.
________________________________________________________________________________
By /s/ James J. Rosloniec
----------------------
JAMES J. ROSLONIEC
President
________________________________________________________________________________
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, this Amendment to the Registration
Statement has been signed below by the following persons in the capacities
and on the date indicated:
________________________________________________________________________________
Signature Title and Capacity Date
________________________________________________________________________________
/s/ James J. Rosloniec Principal Executive and March 5, 1997
------------------ Financial Officer and
JAMES J. ROSLONIEC Director
/s/ Allan D. Engel Principal Accounting March 5, 1997
------------------ Officer and Director
ALLAN D. ENGEL
RICHARD A. DEWITT Director
DONALD H. JOHNSON Director
WALTER T. JONES Director
By /s/ James J. Rosloniec March 5, 1997
----------------------
JAMES J. ROSLONIEC
(Attorney-in-Fact)