<PAGE>
BULK RATE
U.S. POSTAGE
PAID
GRAND RAPIDS, MI
PERMIT 522
AMWAY MUTUAL FUND
7575 Fulton Street East
Ada, Michigan 49355-7150
FORWARDING SERVICE REQUESTED
AMWAY
MUTUAL
FUND
SEMI-ANNUAL
REPORT
1998
AMWAY
MUTUAL
FUND
Printed in U.S.A. 898356 L-2621-SAL
<PAGE>
AMWAY MUTUAL FUND
Dear Shareholders:
I am pleased to provide you with the Semi-Annual Report to Shareholders
for Amway Mutual Fund for the six months ended June 30, 1998. During the
first half of 1998, the market has maintained its upward trend, continuing
the longest running bull market in history. Your Fund continues to
participate in this bull market, with a six month return of 10.1%. Inflation
and interest rates remain low, although signs of slower earnings growth are
becoming evident.
We anticipate that volatility in the equity markets will continue during
the rest of 1998 as U.S. earnings growth and the Asian markets remain
unstable. Your Fund's strong value discipline should provide a defense to
this volatile market. We believe that a strategy of investing in reasonably
priced companies with growth potential will provide rewards over the long
term.
There have been some changes in your Fund over the last six months. The
shareholders overwhelmingly approved the Fund reorganization and 12b-1
distribution plan in April. The results of the proxy vote are in the
following pages. We are very excited about these changes. The elimination of
the 3% load should allow your Fund to be more competitive in the sales of its
shares, which may increase the Fund's assets, achieve certain economies of
scale and potentially result in a lower expense ratio. We remain committed to
continuously improving operations in order to provide superior service.
As always, your satisfaction and trust are our highest priorities. We
will continue to do our best to earn both in the future.
Sincerely,
/s/ James J. Rosloniec
James J. Rosloniec
President
<TABLE>
<CAPTION>
<S> <C> <C>
TRUSTEES AUDITORS INVESTMENT ADVISOR
Richard A. DeWitt BDO Seidman, LLP Amway Management Company
Allan D. Engel 99 Monroe Avenue, N.W. 7575 Fulton Street, East
Donald H. Johnson Grand Rapids, Michigan 49503 Ada, Michigan 49355-7150
Walter T. Jones
James J. Rosloniec LEGAL MATTERS SUB-ADVISOR
Richard E. Wayman John Dougherty Ark Asset Management Co., Inc.
Attorney at Law 125 Broad Street
TRANSFER AGENT Suite 500 12th Floor
Amway Management Company 1155 Connecticut Ave., N.W. New York, NY 10004
7575 Fulton Street, East Washington, DC 20036
Ada, Michigan 49355-7150
CUSTODIAN
Michigan National Bank
77 Monroe Center
Grand Rapids, Michigan 49501
</TABLE>
August 24, 1998
2
<PAGE>
AMWAY MUTUAL FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (CONTINUED)
<TABLE>
<CAPTION>
% OF SHARES OR MARKET
INVESTMENTS PAR VALUE VALUE
----------- --------- -----
<S> <C> <C> <C>
BANKING 5.39%
Banc One Corp 35,600 1,986,925
Chase Manhattan Corp. (New) 26,400 1,993,200
First Union Corp. 39,700 2,312,525
NationsBank Corp. 29,300 2,241,450
------------
8,534,100
------------
BUSINESS SERVICES 1.57%
Bell Atlantic Corp. 54,464 2,484,920
------------
2,484,920
------------
CHEMICALS & ALLIED PRODUCTS 2.13%
Abbott Laboratories 60,800 2,485,200
Air Products & Chemicals, Inc. 4,400 176,000
Hercules, Inc. 17,200 707,350
------------
3,368,550
------------
COMMUNICATION 4.46%
AT&T Corp. 34,000 1,942,250
Comcast Corp. CL ASPL 30,100 1,221,872
GTE Corp. 29,900 1,663,187
SBC Communications, Inc. 46,200 1,848,000
Worldcom. Inc. *8,000 386,750
------------
7,062,059
------------
ELECTRIC & ELECTRONIC EQUIPMENT 8.80%
Alliedsignal, Inc. 72,500 3,217,188
AMP Inc. 58,200 2,000,625
Emerson Electric Co. 48,600 2,934,225
Motorola, Inc. 31,900 1,676,744
Nat'l Semiconductor Corp. *76,800 1,012,800
Raytheon Co. Class A 26,500 1,527,062
Raytheon Co. Class B 26,400 1,560,900
------------
13,929,544
------------
ELECTRIC, GAS, & SANITARY SERVICES 4.55%
Consolidated Edison, Inc. 14,400 663,300
Dominion Resources, Inc. 22,700 925,025
Pacificorp 61,800 1,398,225
Southern Co. 56,300 1,558,806
Texas Utilities Co. 64,000 2,664,000
------------
7,209,356
------------
FABRICATED METAL PRODUCTS 2.41%
Crown Cork & Seal Company 34,600 1,643,500
Masco Corp. 36,000 2,178,000
------------
3,821,500
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
AMWAY MUTUAL FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (CONTINUED)
<TABLE>
<CAPTION>
% OF SHARES OR MARKET
INVESTMENTS PAR VALUE VALUE
----------- --------- -----
<S> <C> <C> <C>
FOOD AND KINDRED PRODUCTS 7.23%
Anheuser-Busch Cos., Inc. 73,300 3,458,844
Archer-Daniels-Midland 157,629 3,054,062
Conagra, Inc. 85,600 2,712,450
General Mills, Inc. 32,500 2,222,187
------------
11,447,543
------------
FOOD STORES 1.17%
American Stores Co. 76,500 1,850,344
------------
FURNITURE AND FIXTURES 1.71%
Sun Microsystems, Inc. *62,400 2,712,450
------------
GENERAL MERCHANDISE STORES 5.51%
Consolidated Stores Corp. *45,500 1,649,375
Dillards, Inc. 36,500 1,512,469
Federated Department Stores *54,000 2,905,875
May Dept. Stores Co. 16,100 1,054,550
Venator Group, Inc. *83,700 1,600,762
------------
8,723,031
------------
HEALTH SERVICES 0.77
Tenet Healthcare Corp. *39,100 1,221,875
------------
HOLDING AND OTHER INVESTMENT OFFICES 0.92%
American General Corp. 20,400 1,452,225
------------
INSTRUMENTS AND RELATED PRODUCTS 2.08%
Baxter International, Inc. 61,200 3,293,325
------------
INSURANCE AGENTS, BROKERS, & SERVICE 1.68%
Cigna Corp. 38,500 2,656,500
------------
INSURANCE CARRIERS 9.92%
Aetna Inc. 40,600 3,090,675
Allstate Corp. 18,700 1,712,219
Chubb Corp 35,700 2,869,388
General RE Corporation 11,600 2,940,600
Loews Corp. 17,800 1,550,825
St. Paul Cos, Inc. 50,200 2,111,537
Unum Corp. 25,800 1,431,900
------------
15,707,144
------------
LUMBER AND WOOD PRODUCTS 0.50%
Weyerhaeuser Co. 17,000 785,188
------------
MACHINERY, EXCEPT ELECTRICAL 5.02%
Deere & Co. 34,800 1,840,050
International Business Machines 32,900 3,777,331
Seagate Technology *97,900 2,331,244
------------
7,948,625
------------
METAL MINING 0.37%
Newmont Mining Corp. 24,600 581,175
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
AMWAY MUTUAL FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (CONTINUED)
<TABLE>
<CAPTION>
% OF SHARES OR MARKET
INVESTMENTS PAR VALUE VALUE
----------- --------- -----
<S> <C> <C> <C>
MISCELLANEOUS MANUFACTURING INDUSTRIES 0.00%
Jan Bell Marketing Warrants *762 8
------------
MISCELLANEOUS RETAIL 0.67%
Toys 'R' Us, Inc. *44,800 1,055,600
------------
OIL AND GAS EXTRACTION 10.62%
Baker Hughes, Inc. 50,000 1,728,125
Burlington Resources 38,500 1,657,906
Halliburton Co. 35,300 1,573,056
Occidental Petroleum Corp. 88,900 2,400,300
Praxair, Inc. 67,100 3,141,119
Tenneco, Inc. 40,300 1,533,919
Union Pacific Resources 96,000 1,686,000
Unocal Corp. 86,800 3,103,100
------------
16,823,525
------------
PAPER & ALLIED PRODUCTS 4.74%
Champion International Corp. 25,500 1,254,281
Fort James Corp. 64,600 2,874,700
Kimberly-Clark Corp. 27,800 1,275,325
Minnesota Mining & Mfg. Co. 25,500 2,095,781
------------
7,500,087
------------
PETROLEUM & COAL PRODUCTS 6.09%
Amerada Hess Corp. 33,300 1,808,606
Amoco Corporation 49,400 2,056,275
Atlantic Richfield Company 38,000 2,968,750
Chevron Corp. 11,300 938,606
Texaco, Inc. 31,500 1,880,157
------------
9,652,394
------------
PRIMARY METAL INDUSTRIES 0.91%
Aluminum Co. of America 21,800 1,437,437
------------
PRINTING AND PUBLISHING 1.08%
Gannett Co. 24,200 1,719,712
------------
RAILROAD TRANSPORTATION 3.71%
Burlington Northern Santa Fe 32,500 3,191,094
CSX Corp. 59,300 2,698,150
------------
5,889,244
------------
RUBBER AND MISC. PLASTICS PRODUCTS 0.75%
Goodyear Tire & Rubber Co. 18,500 1,192,094
------------
STONE, CLAY & GLASS PRODUCTS 2.05%
Corning Inc. 42,500 1,476,875
PPG Industries 25,500 1,773,844
------------
3,250,719
------------
TRANSPORTATION EQUIPMENT 3.19%
Dana Corp. 45,000 2,407,500
Lockheed Martin Corp. 25,100 2,657,462
------------
5,064,962
------------
Total Common Stock (Cost $148,987,064) 100.00% $158,375,236
------------
------------
*Non-dividend producing as of June 30, 1998
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
AMWAY MUTUAL FUND
STATEMENT OF ASSETS
AND LIABILITIES FOR
THE SIX MONTHS ENDED
JUNE 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments in securities, at market
(identified cost $148,987,064)
(Notes 1-A, and 3) $158,375,236
Cash 3,550,698
Receivables:
Securities sold 1,278,974
Dividends 261,071
Capital stock sold 255,526
Interest 4,711
Prepaid reorganization expenses 118,632
Prepaid insurance 5,309
------------
TOTAL ASSETS 163,850,157
------------
LIABILITIES:
Accounts payable:
Securities purchased 1,136,987
Advisory fee (Note 4) 219,857
12b-1 fee 78,999
Transfer agent fee (Note 4) 68,461
Capital stock redeemed 51,681
Miscellaneous 4,865
------------
TOTAL LIABILITIES 1,560,850
------------
NET ASSETS:
Capital stock (40,000,000 shares
of $1.00 par value authorized),
amount paid in on 19,078,687
shares outstanding (Note 2) $134,482,627
Undistributed net investment
income 727,862
Accumulated net realized gain on
investments 17,690,646
Net unrealized appreciation on
investments 9,388,172
------------
Net assets equivalent to $8.51
per share $162,289,307
------------
------------
COMPUTATION OF MAXIMUM OFFERING PRICE
OF THE FUND'S SHARES-as of June 30, 1998:
Net asset value per share
($162,289,307 DIVIDED BY 19,078,687) $ 8.51
Offering price per share $ 8.51
</TABLE>
AMWAY MUTUAL FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED
JUNE 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $ 1,375,297
Interest 89,185
Securities Litigation Settlement 1,385
-----------
Total income 1,465,867
EXPENSES:
Advisory fee (Note 4) $ 430,895
Transfer agent fee (Note 4) 132,050
12b-1 fee (note 4) 78,999
Custodian fee 26,435
Shareholder Communications 26,245
Data processing service (Note 5) 15,664
Corporate taxes 12,670
Audit fees 11,993
Registration fees 10,860
Insurance 6,855
Legal services 4,525
Reorganization expense 2,339
-----------
Total expenses 759,530
Fees paid indirectly (Note 5) (15,664)
-----------
Net Expenses 743,866
-----------
NET INVESTMENT INCOME 722,001
-----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain (Note 3) 17,985,817
Unrealized appreciation on
investments:
Beginning of year 12,817,017
June 30, 1998 9,388,172
-----------
Net change in unrealized
appreciation on investments: 3,428,845
-----------
NET GAIN ON INVESTMENTS 14,556,972
-----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $15,278,973
-----------
-----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
AMWAY MUTUAL FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997
UNAUDITED) (AUDITED)
---------- ---------
<S> <C> <C>
NET ASSETS FROM OPERATIONS:
Investment income-net $ 722,001 $ 1,445,186
Realized gain on investments-net 17,985,817 22,171,305
Increase (Decrease) in unrealized appreciation-net (3,428,845) 2,903,231
------------ ------------
Net increase in net assets resulting from operations 15,278,973 26,519,722
DISTRIBUTIONS TO SHAREHOLDERS:
Investment income-net -- (1,415,589)
Realized gain from investment transactions-net -- (22,425,859)
------------ ------------
Total distributions to shareholders -- (23,841,448)
------------ ------------
CAPITAL SHARE TRANSACTIONS: (Notes 2 and 4)
Net proceeds from sale of shares 22,553,823 18,823,240
Net asset value of shares issued to shareholders in
reinvestment of investment income and realized gain
from security transactions -- 23,180,330
------------ ------------
22,553,823 42,003,570
Payment for shares redeemed (14,707,064) (18,845,671)
------------ ------------
Increase in net assets derived from capital share
transactions 7,846,759 23,157,899
Total increase 23,125,732 25,836,173
NET ASSETS:
Beginning of period 139,163,575 113,327,402
------------ ------------
End of period (includes undistributed
(overdistributed) net investment income of
$727,862 and ($5,862), respectively) $162,289,307 $139,163,575
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
AMWAY MUTUAL FUND
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
The company is registered under the Invested 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 asked prices. Securities for which
market quotations are not readily available, including any restricted
securities, (none at June 30, 1998) 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-The Fund's policy is 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.
NOTE 2-CAPITAL STOCK
At June 30, 1998, there were 40,000,000 shares of $1.00 par value capital
stock authorized. Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED DECEMBER
JUNE 30, 1998 31, 1997
------------- --------
<S> <C> <C>
Shares:
Outstanding, beginning of period 17,999,216 14,871,253
---------- ----------
Sold 2,878,723 2,394,827
Issued in payment of dividends -- 3,006,527
---------- ----------
2,878,723 5,401,354
Redeemed 1,799,252 2,273,391
---------- ----------
Net increase for the period 1,079,471 3,127,963
---------- ----------
Outstanding, end of period 19,078,687 17,999,216
---------- ----------
---------- ----------
</TABLE>
NOTE 3-INVESTMENT TRANSACTIONS
At June 30, 1998, for federal income tax purposes, the cost of investments
owned was $148,992,922. Aggregate gross unrealized gains on securities in which
there was an excess of market value over tax cost were $15,171,814. Aggregate
gross unrealized losses on securities in which there was an excess of tax cost
over market value were $5,789,499. Net unrealized gains for tax purposes were
$9,382,315 at June 30, 1998.
Realized gains from sales of investments were determined on the basis of
specific identification. For tax purposes gains of $17,757,377 were realized on
investments.
For the period ended June 30, 1998, cost of purchases and proceeds from
sales of investments, other than corporate short-term notes, aggregated
$91,001,776 and $81,277,230, respectively.
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
AMWAY MUTUAL FUND
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED) (CONTINUED)
NOTE 4-INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund has entered into an Advisory and Service Contract (Contract)
with Amway Management Company (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; 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 Trustees 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. In return for its
Investment Advisor services, the Fund pays the Investment Advisor quarterly,
pursuant to the contract, a fee at the annual rate of 0.55% on the first $100
million of average daily net assets of the Fund, 0.50% on the next $50
million in assets, and 0.45% on the next $50 million in assets. When the
Fund's assets reach $200 million the rate would be 0.50% on assets up to $200
million and 0.45% on assets in excess of $200 million, so long as the Fund
continued to have at least $200 million in assets. The advisory fee incurred
by the Fund amounted to $430,895 for the period ended June 30, 1998.
The Investment Advisor has entered into a Sub-Advisory Agreement with
Ark Asset Management Co., Inc. (Sub-Advisor). Under the Sub-Advisory
Agreement, the Advisor employs the Sub-Advisor to furnish investment advise
and manage on a regular basis the investment portfolio of the Fund, subject
to the direction of the Advisor, the Board of Trustees 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 the portfolio securities for the Fund's account. For
services rendered, the Investment Advisor, not the Fund, pays the Sub-Advisor
a fee at the annual rate of 0.45% on the first $100 million of average daily
net assets of the Fund, 0.40% on the next $50 million in assets, and 0.35% on
the next $50 million in assets. When the Fund's assets reach $200 million the
rate would be 0.40% on assets up to $200 million and 0.35% on assets in
excess of $200 million, so long as the Fund continued to have at least $200
million in assets.
The Investment Advisor 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 $132,050 for the period ended June
30, 1998.
A beneficial shareholder of Amway Management Company is also a
beneficial shareholder of approximately 21.9% (as of June 30, 1998) of the
outstanding capital shares of the Fund.
Certain officers and trustees of the Fund are affiliated with the
investment advisor and transfer agent.
The officers serve without compensation from the Fund. Trustees' fees,
amounting to $20,500 for the period ended June 30, 1998 were paid by Amway
Management Company, the Fund's investment advisor. The trustee's payments
consist of an annual retainer plus a per meeting fee.
The Trust has adopted a Plan and Agreement of Distribution
("Distribution Plan"). Under the Distribution Plan, which became effective on
April 22, 1998, the Investment Advisor will provide services in connection
with distributing the Fund's shares, and will be compensated at a maximum
annual rate of 0.25 of 1% of the average daily net assets of the Fund. The
12b-1 fee incurred by the Fund amounted to $78,999 for the period ended June
30,1998.
The Investment Advisor acts as the exclusive agent for sales of shares of
the Fund pursuant to a Principal Underwriting Agreement. Prior to April 1, 1998,
the Investment Advisor received a sales commission of 3% of the offering price
of the Fund's shares which amounted to $473,151 for the period ended March 31,
1998. The sales commission was eliminated when the Fund adopted the Distribution
Plan.
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
AMWAY MUTUAL FUND
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED) (CONTINUED)
NOTE 5-DATA PROCESSING SERVICE
Portfolio accounting services for the Fund in the amount of $15,664 for the
period ended June 30, 1998 are paid for through the use of directed brokerage
commissions.
NOTE 6-MATERIAL ISSUANCE OF STOCK
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 common stock shares. On January 8,
1998, the corporations purchased 1,854,165 Amway Mutual Fund shares valued at
$14,073,116 (based on the net asset value of $7.59 per share) and transferred
the shares to these distributors.
AMWAY MUTUAL FUND
SUPPLEMENTARY INFORMATION
(SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING
THROUGHOUT EACH PERIOD.)
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
FINANCIAL HIGHLIGHTS ENDED DECEMBER
-------------------- JUNE 30, 1998 31, 1997
(INTRODUCTION) (UNAUDITED) (AUDITED)
----------- ---------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 7.73 $ 7.62
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income .04 .09
Net Gain (Loss) on Securities (both
realized and unrealized) .74 1.62
------------ ------------
Total From Investment Operations .78 1.71
LESS DISTRIBUTIONS
Dividends (from net investment income) -- .10
Distributions (from capital gains) -- 1.50
Returns of Capital -- --
------------ ------------
Total Distributions -- 1.60
------------ ------------
Net Asset Value, End of Period $ 8.51 $ 7.73
------------ ------------
------------ ------------
TOTAL RETURN* 10.09% 22.47%
------------ ------------
------------ ------------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period 162,289,307 139,163,575
Ratio of Expenses to Average Net Assets .5% .9%
Ratio of Net Income to Average Net Assets .5% 1.1%
Portfolio Turnover Rate 52.5% 103.1%
Average commission rate per share $ .0545 $ .0574
*The 3% sales charge (eliminated April 1, 1998) is not reflected in the total
return and the six months ended June 30, 1998 is not annualized but an aggregate
total return for the period.
</TABLE>
This report is prepared for the information of shareholders. It is
authorized for distribution to prospective investors only if preceded or
accompanied by an effective Prospectus.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
AMWAY MUTUAL FUND
ANNUAL SHAREHOLDER MEETING RESULTS
At the Annual Stockholder's Meeting of the Fund, held on April 22, 1998,
in Grand Rapids, Michigan, the Advisory and Service Center Contract between
the Fund and Amway Management Company, the Sub-Advisory Agreement between
Amway Management Company and Ark Asset Management Co., Inc., and the
selection of BDO Seidman, LLP as auditors for the Fund for the calendar year
l998, were approved. An Amendment to the Fund's Certificate of Incorporation
to increase the authorized capital from 20,000,000 shares to 40,000,000
shares of common stock, the Distribution Plan and Agreement for the Fund's
shares pursuant to Rule 12b-1, and the Agreement and Plan of Reorganization
were also approved. In addition, elected as Directors for the ensuing year
were James J. Rosloniec, Allan D. Engel, Richard A. DeWitt, Donald H.
Johnson, Walter T. Jones and Richard E. Wayman. The following is a tabulation
of the proxy vote:
<TABLE>
<CAPTION>
PROPOSALS SHARES FOR SHARES AGAINST SHARES ABSTAIN
--------- ---------- -------------- --------------
<S> <C> <C> <C>
1) Election of Directors:
R.A. DeWitt 11,113,407.889 (57.46%) 0 110,820.683 (0.57%)
Allan D. Engel 11,113,000.503 (57.45%) 0 111,228.069 (0.57%)
Donald H. Johnson 11,094,414.818 (57.36%) 0 129,813.754 (0.67%)
Walter T. Jones 11,093,575.898 (57.35%) 0 130,652.674 (0.67%)
J.J. Rosloneic 11,100,788.222 (57.39%) 0 123,440.350 (0.63%)
Richard E. Wayman 11,090,412.828 (57.34%) 0 133,815.774 (0.69%)
2) Approval of the 10,981,839.270 (56.78%) 44,803.201 (0.23%) 197,586.101 (1.02%)
Investment Advisory
and Service Contract
Between the Fund and
Amway Management Co.
3) Approval of the 10,935,482.259 (56.54%) 52,451.397 (0.27%) 236,294.916 (1.22%)
Sub-Advisory Contract
Between Amway Mgt.
Co. and Ark Asset Mgt. Co.
4) Ratification of the 10,988,500.122 (56.82%) 30,547.605 (0.16%) 205,180.845 (1.06%)
Selection of BDO Seidman,
LLP as Auditors
5) Approval for an Amendment 10,858,090.751 (56.14%) 101,058,598 (0.52%) 265,079.233 (1.37%)
to the Fund's Certificate of
Incorporation to Increase the
Authorized Capital from
20,000,000 shares to
40,000,000 shares of
common stock,
$1 Par Value
6) Approval of a new 10,814,606.290 (55.92%) 142,891.969 (0.74%) 266,730.313 (1.38%)
Distribution Plan and
Agreement for the Fund's
Shares pursuant to
Rule 12b-1 Under the
Investment Company
Act of 1940
7) Approval of an 10,873,983.735 (56.22%) 102,801.162 (0.53%) 247,443.675 (1.28%)
Agreement and
Plan of Reorganization
whereby The Fund will
be reorganized as
a series of the Amway
Mutual Fund Trust
</TABLE>
Total Record date shares were 19,340,683.72, total shares voted were
11,224,228.572, representing 58.03% of the record date shares voted.
The accompanying notes are an integral part of these financial statements.
11
