<PAGE> 1
[AMF LOGO]
ASSET MANAGEMENT FUND, INC.
111 East Wacker Drive
Chicago, IL 60601
[AMF LOGO]
ASSET MANAGEMENT FUND, INC.
ANNUAL REPORT
October 31, 1995
<PAGE> 2
- - --------------------------------------------------------------------------------
December 15, 1995
Dear Shareholder:
The Directors and Officers of the Asset Management Fund, Inc. are pleased to
send the Annual Report to Shareholders for the twelve months ended October 31,
1995.
As 1995 comes to a close, it appears that the Federal Reserve has completed
their "Pre-Emptive Strike" against inflationary expectations which began in
February of 1994. Long term interest rates during 1995 have now come full circle
from the lows of October 1993 when the long bond was about 6% to the highs of
October 1994 of about 8%. At this writing, the long term Treasury Bond has just
rallied back to 6.00%. Now that the Fed seems to have achieved their goal of
orchestrating a "soft landing" for the economy, many economists are looking
forward to a decline in short term rates to complement the declines already
achieved in long term rates.
We are pleased to report that the AMF Portfolios fully participated in the
bull market rally of 1995. By extending maturities somewhat and by having only
limited exposure to callable investments, the portfolio managers were able to
capture the bulk of this rally. The rally of 1995 has almost totally reversed
the effects of the "bear" market of 1994, and the Total Rates of Return for the
combined periods are certainly back on the long term track.
The AMF Portfolios continue to fulfill their stated objectives and have
consistently ranked high within various industry comparative reports produced by
mutual fund analytical services. In its October 1995 discussion of the
performance of the AMF Adjustable Rate Mortgage (ARM) Portfolio, for example,
Morningstar stated that "The ARM Portfolio has yet to encounter a market that it
can't handle. Management . . . has done enough maneuvering to keep it ahead of
its peers in both bull and bear markets." Of course, past performance is not
necessarily an indication of future results and return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost. Morningstar is a nationally recognized mutual fund
analytic firm.
The AMF team remains committed to providing professional asset management and
will continue to manage these portfolios in a manner consistent with the
objectives of our shareholders. Thank you for investing with the Asset
Management Fund.
Sincerely,
Rodger D. Shay
President
<PAGE> 3
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ASSET MANAGEMENT FUND REVIEW
The AMF portfolios are very proud of their record and performance. Each
portfolio was designed for a specific market sector and they have been managed
to consistently meet the objectives desired by shareholders. The best
illustration of the success of these portfolios is the fact that as of 10/31/95,
each portfolio attained a 4-star ranking from the highly-respected Morningstar
Mutual Fund Service.1 These rankings point out the consistent and high-quality
management strategies that are employed in each portfolio. They also indicate a
devotion to a conservative investment philosophy that has helped AMF avoid
certain high risk securities that led to highly publicized problems at other
funds. AMF is dedicated to continuing this success and producing solid value for
our shareholders.
A short review of the past year is presented below for each portfolio.
SHORT U.S. GOVERNMENT SECURITIES PORTFOLIO produced a solid 8.94% total return
for the year ending October 31, 1995. This was accomplished by extending the
fund's duration throughout the year as interest rates continued moving lower. In
addition, by investing strictly in 1-5 year Treasury securities, the Portfolio
avoided any concerns with prepayments. Moving forward, the Portfolio will
continue its use of short-term Treasury issues to provide the safety and
liquidity desired by shareholders. This strategy provides the flexibility needed
to react to changes in the bond market as they occur.
ADJUSTABLE RATE MORTGAGE PORTFOLIO showed a total return of 8.02% for the year
ending October 31, 1995. This return continued to exhibit the ARM Portfolio's
ability to perform in all interest rate environments. Performance was further
enhanced in the past year by shifting a portion of the assets into COFI indexed
issues and slower resetting coupons, a profitable strategy especially as
interest rates declined throughout the year. Once again, continuous, active and
professional management can provide consistent performance for shareholders.
INTERMEDIATE MORTGAGE SECURITIES PORTFOLIO produced a solid double-digit
return of 10.63% for the year ending October 31, 1995. The duration of this
portfolio was extended throughout the year as interest rates continued their
trend to lower levels. Additionally, as spreads tightened on some mortgage
issues, Treasury holdings were increased to provide additional price
appreciation. This strategy is continually monitored to ensure that the
Portfolio moves between the various market sectors to enhance its performance.
U.S. GOVERNMENT MORTGAGE SECURITIES had a total return of 12.37% for the year
ending October 31, 1995, its best performance since 1991. The dramatic decline
in long-term interest rates paved the way for this performance. The Portfolio
positioned itself with lower coupons and seasoned mortgage-backed securities in
order to avoid the pitfalls of rising prepayments and capture significant price
appreciation. This active style of management has served the Portfolio well and
will continue to be fundamentally important to long-term performance.
- - ---------------
1 Morningstar ratings are calculated from a fund's 3-, 5-, and 10 year
average annual returns in excess of 90-day Treasury Bill returns, including
loads, if appropriate, and a risk factor that reflects fund performance below
3-month Treasury Bill monthly returns. 22.5% of the funds in a category receive
4 stars. The number of funds within the Taxable Fixed-Income category as of
10/31/95 is 718, 422 and 137 on a 3, 5, and 10 year basis, respectively.
Morningstar ratings are subject to change every month. Past performance is no
guarantee of future results. From time to time, the Fund's adviser has waived
its management fee, which has resulted in higher returns.
<PAGE> 4
INVESTMENT COMPARISON
Comparison of change in value of
$10,000 investment for the years
ended October 31
<TABLE>
<CAPTION>
SHORT U.S. GOVERNMENT SECURITIES PORTFOLIO
[GRAPH]
SUSGSP L-SHGOVT
<S> <C> <C>
1985 10,000 10,000
1986 11,122 11,221
1987 11,698 11,802
1988 12,592 12,703
1989 13,664 13,904
1990 14,782 15,133
1991 16,460 17,010
1992 17,895 18,394
1993 19,003 19,460
1994 19,184 19,685
1995 20,900 21,284
</TABLE>
This graph compares the performance of the Short U.S. Government Securities
Portfolio to the Lehman Short Government 1-3 Year Index, showing returns for
U.S. government and agency securities.
Short U.S. Government Securities Portfolio Average Annual Return
<TABLE>
<CAPTION>
One Five Ten
Year Year Year
- - -------------------------------------------------------
<S> <C> <C>
8.94% 7.17% 7.88%
</TABLE>
<TABLE>
<CAPTION>
ADJUSTABLE RATE MORTGAGE (ARM) PORTFOLIO
[GRAPH]
ARM L-SHGOVT L-ARM
<S> <C> <C> <C>
1990 10,000 10,000 10,000
1991 10,090 10,189 10,090
1992 10,600 10,673 10,680
1993 11,104 11,724 11,264
1994 11,330 11,956 11,292
1995 12,239 12,927 12,444
</TABLE>
This graph compares the performance of the Adjustable Rate Mortgage (ARM)
Portfolio to the Lehman Adjustable Rate Mortgage Index, showing all agency ARM
securities, and the Lehman Short Government 1-2 Year Index.
Adjustable Rate Mortgage (ARM) Portfolio Average Annual Return
<TABLE>
<CAPTION>
One From
Year Inception*
- - -------------------------------
<S> <C>
8.02% 5.03%
</TABLE>
*From September 18, 1991
Past performance is not predictive of future results. Lehman indices
represent unmanaged groups of bonds that differ from the composition of each
AMF portfolio. The Lehman indices do not include a reduction in return for
expenses.
<PAGE> 5
INVESTMENT COMPARISON
Comparison of change in value of
$10,000 investment for the years
ended October 31
<TABLE>
<CAPTION>
INTERMEDIATE MORTGAGE SECURITIES PORTFOLIO
[GRAPH]
IMSP L-MORT
<S> <C> <C>
1986 10,000 10,000
1987 9,790 10,410
1988 11,251 11,839
1989 12,445 13,165
1990 12,839 14,280
1991 14,947 16,694
1992 16,402 18,054
1993 17,768 19,479
1994 17,558 19,191
1995 19,424 21,995
</TABLE>
This graph compares the performance of the Intermediate Mortgage Securities
Portfolio to the Lehman U.S. Mortgage Index, showing all agency mortgage-backed
securities.
Intermediate Mortgage Securities Portfolio Average Annual Return
<TABLE>
<CAPTION>
One Five From
Year Year Inception*
------------------------------
<S> <C> <C>
10.63% 8.63% 7.67%
</TABLE>
*From November 7, 1986
<TABLE>
<CAPTION>
U.S. GOVERNMENT MORTGAGE SECURITIES PORTFOLIO
[GRAPH]
USGMSP L-MORT
<S> <C> <C>
1985 10,000 10,000
1986 11,524 11,705
1987 11,727 12,184
1988 13,272 13,857
1989 14,645 15,409
1990 15,762 16,712
1991 18,283 19,539
1992 19,729 21,131
1993 21,254 22,798
1994 20,868 22,461
1995 23,449 25,742
</TABLE>
This graph compares the performance of the U.S. Government Mortgage Securities
Portfolio to the Lehman U.S. Mortgage Index, showing all agency mortgage-backed
securities.
U.S. Government Mortgage Securities Portfolio Average Annual Return
<TABLE>
<CAPTION>
One Five Ten
Year Year Year
- - -------------------------
<S> <C> <C>
12.37% 8.22% 8.90%
</TABLE>
Past performance is not predictive of future results. Lehman indices represent
unmanaged groups of bonds that differ from the composition of each AMF
portfolio. The Lehman indices do not include a reduction in return for
expenses.
<PAGE> 6
This page is intentionally left blank.
<PAGE> 7
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ASSET MANAGEMENT FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
OCTOBER 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE
OF NET PAR
ASSETS MATURITY (000) VALUE
<S> <C> <C> <C> <C>
- - --------------------------------------------------------------------------------------------------------
AGENCY OBLIGATIONS................................... 97.6%
Federal Home Loan Mortgage Corporation
5.82% 11/01/95 $ 21,000 $ 21,000,000
------------
Student Loan Marketing Association -- weekly reset
5.60% 11/09/95 10,000 10,000,000
5.67% 04/11/96 5,000 5,000,000
------------
15,000,000
------------
TOTAL AGENCY OBLIGATIONS
(Cost $36,000,000) 36,000,000
------------
REPURCHASE AGREEMENT................................. 2.1%
Daiwa Securities America, Inc.
5.89% (Agreement dated 10/31/95, to be
repurchased at $758,124 on 11/01/95;
collateralized by $600,000 U.S. Treasury Bonds,
8.75%, due 08/15/20. The market value of the
collateral is $780,440.)
(Cost $758,000) 11/01/95 758 758,000
------------
TOTAL INVESTMENTS IN SECURITIES...................... 99.7%
(Cost $36,758,000)* $ 36,758,000
------------
OTHER ASSETS IN EXCESS OF LIABILITIES................ 0.3% 111,370
------------
Net Assets applicable to 36,869,370 Shares of Common
Stock issued and outstanding....................... 100.0% $ 36,869,370
============
Net Asset Value, offering and redemption price per
share ($36,869,370 / 36,869,370) $1.00
======
- - --------------------------------------------------------------------------------------------------------
</TABLE>
*Aggregate cost for Federal income tax purposes.
See accompanying notes to financial statements.
1
<PAGE> 8
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ASSET MANAGEMENT FUND, INC.
SHORT U.S. GOVERNMENT SECURITIES PORTFOLIO
STATEMENT OF NET ASSETS
OCTOBER 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE
OF NET PAR
ASSETS MATURITY (000) VALUE
<S> <C> <C> <C> <C>
- - -------------------------------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS.......................... 95.5%
U.S. Treasury Notes
7.375% 05/15/96 $ 3,000 $ 3,028,125
6.875% 10/31/96 25,000 25,304,687
7.25% 11/30/96 30,000 30,501,563
7.25% 02/15/98 20,000 20,665,625
7.125% 09/30/99 15,000 15,696,094
7.75% 11/30/99 15,000 16,050,000
6.25% 05/31/00 8,000 8,140,000
6.125% 07/31/00 5,000 5,063,281
6.125% 09/30/00 35,000 35,448,438
-------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $156,485,362) 159,897,813
-------------
REPURCHASE AGREEMENT............................... 3.6%
Daiwa Securities America, Inc.
5.89% (Agreement dated 10/31/95, to be
repurchased at $5,952,974 on 11/01/95;
collateralized by $6,165,000 U.S. Treasury
Bonds, 6.25%, due 08/15/23. The market value
of the collateral is $6,100,251.)
(Cost $5,952,000) 11/01/95 5,952 5,952,000
-------------
TOTAL INVESTMENTS IN SECURITIES.................... 99.1%
(Cost $162,437,362)* $ 165,849,813
-------------
OTHER ASSETS IN EXCESS OF LIABILITIES.............. 0.9% 1,493,243
-------------
Net Assets applicable to 15,666,139 Shares of
Common Stock issued and outstanding.............. 100.0% $ 167,343,056
=============
Net Asset Value, offering and redemption price per
share ($167,343,056 / 15,666,139) $10.68
=======
- - -------------------------------------------------------------------------------------------------------
</TABLE>
* Aggregate cost for Federal income tax purposes is $162,426,946. The aggregate
gross unrealized appreciation (depreciation) for all securities is as follows:
excess of value over tax cost $3,426,030; excess of tax cost over value
($3,163).
See accompanying notes to financial statements.
2
<PAGE> 9
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ASSET MANAGEMENT FUND, INC.
ADJUSTABLE RATE MORTGAGE (ARM) PORTFOLIO
STATEMENT OF NET ASSETS
OCTOBER 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE
OF NET PAR
ASSETS MATURITY (000) VALUE
<S> <C> <C> <C> <C>
- - ------------------------------------------------------------------------------------------------------
ADJUSTABLE RATE MORTGAGE-
RELATED SECURITIES*.............................. 75.0%
Treasury Based ARMS................................ 25.3%
Federal Home Loan Mortgage Corporation
7.58% 05/01/23 $18,290 $ 18,650,034
Federal National Mortgage Association
8.07% 12/01/21 9,631 10,004,614
Government National Mortgage Association
5.50% 10/20/25 34,300 34,010,594
Citicorp 1992-18 CL A-1
7.75% 10/25/22 38,640 39,279,620
Fund America 1993A CL A-1
7.64% 06/25/23 23,062 23,415,010
Housing Securities, Inc. 1992 SL-1 CL A-1
8.55% 05/25/16 26,463 27,256,612
Resolution Trust Corp. Series 1993-3 CL A-7
7.99% 11/25/22 14,181 14,398,458
Resolution Trust Corp. Series 1992-1 CL A-1
7.66% 05/25/28 17,286 17,491,583
Resolution Trust Corp. Series 1995-2 CL A-3
7.1171% 05/25/29 32,356 32,618,954
Ryland Mortgage Securities Corp. 1991-10 CL A-2
7.68% 06/25/21 8,331 8,357,072
------------
(Cost $224,667,377) 225,482,551
------------
11th District Federal Home Loan Bank Cost of Funds
(COFI) Based ARMS................................ 12.4 %
Federal Home Loan Mortgage Corporation
6.60% 03/01/25 24,562 24,929,945
6.39% 06/01/30 36,238 36,113,247
Federal National Mortgage Association
5.694% 08/25/04 19,695 18,919,509
6.179% 06/25/07 11,514 11,356,001
6.43% 11/01/27 12,033 12,085,247
Residential Funding Mortgage Securities 93-S42
6.19% 10/25/08 7,703 7,378,436
------------
(Cost $108,631,759) 110,782,385
------------
- - ------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 10
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ASSET MANAGEMENT FUND, INC.
ADJUSTABLE RATE MORTGAGE (ARM) PORTFOLIO (CONTINUED)
STATEMENT OF NET ASSETS
OCTOBER 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE
OF NET PAR
ASSETS MATURITY (000) VALUE
<S> <C> <C> <C> <C>
- - ------------------------------------------------------------------------------------------------------
Six Month Certificates of Deposit Based ARMS....... 10.9%
Federal National Mortgage Association
7.50% 01/01/22 $14,450 $ 14,585,735
7.23% 10/01/22 15,108 15,206,618
7.55% 12/01/22 20,715 20,864,152
7.70% 02/01/23 10,664 10,840,118
Salomon Brothers 1992-4
7.80% 09/25/22 13,262 13,465,274
Sears Mortgage 1992-16
7.75% 10/25/22 21,737 21,981,737
------------
(Cost $96,884,204) 96,943,634
------------
London Interbank Offering Rate (LIBOR)
Based ARMS....................................... 26.4%
Federal Home Loan Mortgage Corporation
6.488% 06/15/07 15,826 15,875,900
8.14% 12/01/22 14,089 14,449,786
7.57% 09/01/24 17,483 17,936,309
Capstead 1992-14
7.50% 10/25/22 43,991 44,417,196
Donaldson, Lufkin, Jenrette Acc. Corp. 1992-6
7.85% 07/25/22 62,520 63,106,135
Donaldson, Lufkin, Jenrette Acc. Corp. 1992-9
7.15% 10/25/22 31,920 32,168,997
Ryland Mortgage Securities Corp. 1991-16 CL A-1
7.10% 09/25/21 11,607 11,614,511
Ryland Mortgage Securities Corp. 1991-15 CL A-1
7.20% 09/25/22 12,251 12,259,119
Saxon Mortgage 1993-1 CL A-1
8.60% 02/25/23 23,195 23,520,894
------------
(Cost $235,125,770) 235,348,847
------------
TOTAL ADJUSTABLE RATE
MORTGAGE-RELATED SECURITIES
(Cost $665,309,110) 668,557,417
------------
- - ------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 11
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ASSET MANAGEMENT FUND, INC.
ADJUSTABLE RATE MORTGAGE (ARM) PORTFOLIO (CONTINUED)
STATEMENT OF NET ASSETS
OCTOBER 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE
OF NET PAR
ASSETS MATURITY (000) VALUE
<S> <C> <C> <C> <C>
- - -------------------------------------------------------------------------------------------------------
FIXED RATE MORTGAGE-RELATED SECURITIES............. 10.1%
Federal Home Loan Mortgage Corporation
8.00% 06/01/14 $ 10,504 $ 10,805,992
10.50% 12/01/20 5,997 6,509,919
Federal Home Loan Mortgage Corporation Gold
6.00% 09/01/02 19,580 19,329,203
6.50% 06/01/10 19,335 19,196,153
7.50% 06/01/10 18,888 19,266,214
Residential Funding Mortgage Securities 94-S9
6.50% 03/25/24 15,032 14,985,331
-------------
TOTAL FIXED RATE MORTGAGE-
RELATED SECURITIES
(Cost $89,256,170) 90,092,812
-------------
U.S. TREASURY OBLIGATIONS.......................... 10.4%
U.S. Treasury Notes
6.875% 10/31/96 61,000 61,743,438
7.375% 11/15/97 10,000 10,326,563
6.125% 05/15/98 11,000 11,116,875
5.875% 08/15/98 10,000 10,048,437
-------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $91,869,941) 93,235,313
-------------
REPURCHASE AGREEMENT............................... 4.2%
Daiwa Securities America, Inc.
5.89% (Agreement dated 10/31/95, to be
repurchased at $37,274,097 on 11/01/95;
collateralized by $32,915,000 U.S. Treasury
Bonds, 7.50%, due 11/15/16. The market value
of the collateral is $38,138,915.)
(Cost $37,268,000) 11/01/95 37,268 37,268,000
-------------
- - -------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 12
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ASSET MANAGEMENT FUND, INC.
ADJUSTABLE RATE MORTGAGE (ARM) PORTFOLIO (CONTINUED)
STATEMENT OF NET ASSETS
OCTOBER 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE
OF NET
ASSETS VALUE
<S> <C> <C>
- - ------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES.......................................... 99.7%
(Cost $883,703,221)** $ 889,153,542
-------------
OTHER ASSETS IN EXCESS OF LIABILITIES.................................... 0.3% 2,384,655
-------------
Net Assets applicable to 89,713,434 Shares of Common Stock issued and
outstanding............................................................ 100.0% $ 891,538,197
=============
Net Asset Value, offering and redemption price per share
($891,538,197 / 89,713,434) $9.94
======
- - ------------------------------------------------------------------------------------------------------
</TABLE>
* The interest rates shown are the rates at October 31, 1995.
** Aggregate cost for Federal income tax purposes is $883,487,354. The aggregate
gross unrealized appreciation (depreciation) for all securities is as
follows: excess of value over tax cost $6,295,712; excess of tax cost over
value ($629,524).
See accompanying notes to financial statements.
6
<PAGE> 13
- - --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND, INC.
INTERMEDIATE MORTGAGE SECURITIES PORTFOLIO
STATEMENT OF NET ASSETS
OCTOBER 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE
OF NET PAR
ASSETS MATURITY (000) VALUE
<S> <C> <C> <C> <C>
- - -------------------------------------------------------------------------------------------------------
FIXED RATE MORTGAGE-RELATED SECURITIES............. 69.0%
Collateralized Mortgage Obligations................ 22.6%
Federal Home Loan Mortgage Corporation
5.50% 12/15/13 $ 20,000 $ 19,768,750
5.50% 04/15/20 12,869 12,518,708
Merrill Lynch Trust 43 B
9.00% 03/27/07 1,532 1,540,378
Pru-Home 1994-14 CL A-2
6.40% 04/25/09 8,514 8,490,119
-------------
(Cost $42,183,434) 42,317,955
-------------
Pass Throughs...................................... 46.4%
Federal Home Loan Mortgage Corporation Gold...... 31.3%
6.50%, due 01/01/98 to 08/01/10 28,429 28,394,477
7.50%, due 01/01/07 to 01/01/10 29,652 30,244,940
-------------
58,639,417
-------------
Federal National Mortgage Association............ 15.1%
6.50% 03/01/01 10,026 10,038,055
6.50% 01/01/02 6,226 6,234,246
6.50% 05/01/08 11,939 11,841,656
-------------
28,113,957
-------------
(Cost $84,135,581) 86,753,374
-------------
TOTAL FIXED RATE MORTGAGE-RELATED SECURITIES
(Cost $126,319,015) 129,071,329
-------------
U.S. TREASURY OBLIGATIONS.......................... 27.1%
U.S. Treasury Notes
7.375% 11/15/97 15,000 15,489,844
6.875% 03/31/00 10,000 10,412,500
6.50% 08/15/05 24,000 24,855,000
-------------
TOTAL U.S. TREASURY OBLIGATIONS 50,757,344
(Cost $49,927,732) -------------
- - -------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
7
<PAGE> 14
- - --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND, INC.
INTERMEDIATE MORTGAGE SECURITIES PORTFOLIO (CONTINUED)
STATEMENT OF NET ASSETS
OCTOBER 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE
OF NET PAR
ASSETS MATURITY (000) VALUE
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REPURCHASE AGREEMENT............................... 3.6%
Daiwa Securities America, Inc.
5.89% (Agreement dated 10/31/95, to be
repurchased at $6,710,098 on 11/01/95;
collateralized by $5,925,000 U.S. Treasury
Bonds, 7.50%, due 11/15/16. The market value
of the collateral is $6,865,352.)
(Cost $6,709,000) 11/01/95 $ 6,709 $ 6,709,000
-------------
TOTAL INVESTMENTS IN SECURITIES.................... 99.7%
(Cost $182,955,747)* $ 186,537,673
-------------
OTHER ASSETS IN EXCESS OF LIABILITIES.............. 0.3% 549,606
-------------
Net Assets applicable to 19,324,048 Shares of
Common Stock issued and outstanding.............. 100.0% $ 187,087,279
=============
Net Asset Value, offering and redemption
price per share ($187,087,279 / 19,324,048) $9.68
======
- - ------------------------------------------------------------------------------------------------------------------
</TABLE>
* Aggregate cost for Federal income tax purposes. The aggregate gross unrealized
appreciation (depreciation) is as follows: excess of value over tax cost
$3,850,139; excess of tax cost over value ($268,213).
See accompanying notes to financial statements.
8
<PAGE> 15
- - --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND, INC.
U.S. GOVERNMENT MORTGAGE SECURITIES PORTFOLIO
STATEMENT OF NET ASSETS
OCTOBER 31, 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERCENTAGE
OF NET PAR
ASSETS MATURITY (000) VALUE
- - -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIXED RATE MORTGAGE-RELATED SECURITIES.............. 79.4%
Government National Mortgage Association
Obligations
10.50%, due 02/15/18 to 11/15/18 $ 1,127 $ 1,245,239
10.00%, due 03/15/19 1,550 1,692,038
9.00%, due 11/15/04 to 10/15/21 7,447 7,824,140
8.50%, due 06/15/24 4,949 5,152,067
7.50%, due 02/15/24 16,016 16,236,596
7.00%, due 08/15/23 to 09/15/24 17,370 17,261,035
------------
(Cost $46,867,805) 49,411,115
------------
U.S. TREASURY OBLIGATION............................ 8.6%
U.S. Treasury Note
6.875%
(Cost $5,358,491) 08/15/25 5,000 5,365,625
------------
AGENCY OBLIGATION................................... 9.6%
Federal Home Loan Mortgage Corporation
5.82%
(Cost $6,000,000) 11/01/95 6,000 6,000,000
------------
REPURCHASE AGREEMENT................................ 2.4%
Daiwa Securities America, Inc.
5.89% (Agreement dated 10/31/95, to be
repurchased at $1,481,242 on 11/01/95;
collateralized by $1,150,000 U.S. Treasury
Bonds, 8.75%, due 05/15/20. The market value of
the collateral is $1,521,000.)
(Cost $1,481,000) 11/01/95 1,481 1,481,000
------------
TOTAL INVESTMENTS IN SECURITIES..................... 100.0%
(Cost $59,707,296)* $ 62,257,740
------------
OTHER ASSETS IN EXCESS OF LIABILITIES............... 758
------------
Net Assets applicable to 5,828,832 Shares of Common
Stock issued and outstanding...................... 100.0% $ 62,258,498
============
Net Asset Value, offering and redemption price per
share ($62,258,498 / 5,828,832) $10.68
=======
- - -------------------------------------------------------------------------------------------------------
</TABLE>
* Aggregate cost for Federal income tax purposes is $59,699,193. The aggregate
gross unrealized appreciation (depreciation) for all securities is as follows:
excess of value over tax cost $2,560,657; excess of tax cost over value
($2,110).
See accompanying notes to financial statements.
9
<PAGE> 16
- - --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1995
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------
U.S.
SHORT U.S. ADJUSTABLE INTERMEDIATE GOVERNMENT
MONEY GOVERNMENT RATE MORTGAGE MORTGAGE MORTGAGE
MARKET SECURITIES (ARM) SECURITIES SECURITIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- - --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income.............. $2,346,917 $11,310,902 $57,200,909 $ 13,336,288 $4,800,817
---------- ----------- ----------- ------------ ----------
Operating expenses:
Investment advisory fee.... 62,352 409,187 3,902,873 673,111 151,437
Distribution fee........... 62,352 245,512 2,168,263 288,476 90,862
Administration fee......... 12,578 49,639 262,936 58,231 18,556
Custodian fee.............. 10,497 38,057 185,045 42,447 32,333
Directors' fees............ 3,430 13,024 70,948 15,801 4,687
Transfer agent fee......... 5,688 12,162 35,717 5,443 3,528
Legal...................... 2,573 10,002 48,482 12,593 3,677
Audit...................... 3,272 12,434 62,490 15,547 4,488
Other...................... 501 19,220 18,333 10,480 13,391
---------- ----------- ------------ ------------ ----------
163,243 809,237 6,755,087 1,122,129 322,959
Fee waivers................ (62,352) -0- (2,601,916) (384,634) -0-
---------- ----------- ------------ ------------ ----------
Total operating
expenses.............. 100,891 809,237 4,153,171 737,495 322,959
---------- ----------- ------------ ------------ ----------
Net investment income... 2,246,026 10,501,665 53,047,738 12,598,793 4,477,858
---------- ----------- ------------ ------------ ----------
REALIZED AND UNREALIZED GAINS
(LOSSES) FROM INVESTMENT
ACTIVITIES:
Net realized loss............ -0- (476,714) (5,071,663) (1,844,362) (692,798)
Net change in unrealized
appreciation/depreciation
of investments............. -0- 3,838,561 17,505,230 8,398,746 3,311,968
---------- ----------- ------------ ------------ ----------
Net gain on
investments........... -0- 3,361,847 12,433,567 6,554,384 2,619,170
---------- ----------- ------------ ------------ ----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....... $2,246,026 $13,863,512 $65,481,305 $ 19,153,177 $7,097,028
========== =========== ============ ============ ==========
- - --------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
10
<PAGE> 17
- - --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED OCTOBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------
MONEY MARKET SHORT U.S. GOVERNMENT
PORTFOLIO SECURITIES PORTFOLIO
-------------------------------------------------------------
1995 1994 1995 1994
- - -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income............ $ 2,246,026 $ 2,002,573 $ 10,501,665 $ 10,743,734
Net gain (loss) on investments... -0- (2,394) 3,361,847 (9,008,217)
------------- ------------- ------------ -------------
Net increase (decrease) in
net assets resulting from
operations.................. 2,246,026 2,000,179 13,863,512 1,735,517
------------- ------------- ------------ -------------
Dividends paid to stockholders:
From net investment income....... (2,243,632) (2,002,573) (10,501,665) (10,743,734)
From net realized capital
gains.......................... -0- -0- -0- -0-
------------- ------------- ------------ -------------
Total dividends paid to
stockholders................ (2,243,632) (2,002,573) (10,501,665) (10,743,734)
------------- ------------- ------------ -------------
Capital share transactions:
Proceeds from sale of shares..... 389,839,779 785,801,344 31,763,091 64,361,378
Shares issued to stockholders in
reinvestment of dividends...... 1,752,434 1,826,082 5,466,387 6,420,208
Cost of shares repurchased....... (437,694,716) (812,579,510) (52,987,943) (117,739,139)
------------- ------------- ------------ -------------
Increase (decrease) from
capital share
transactions................ (46,102,503) (24,952,084) (15,758,465) (46,957,553)
------------- ------------- ------------ -------------
Total increase (decrease) in
net assets.................. (46,100,109) (24,954,478) (12,396,618) (55,965,770)
Net Assets:
Beginning of year................... 82,969,479 107,923,957 179,739,674 235,705,444
------------- ------------- ------------ -------------
End of year......................... $ 36,869,370 $ 82,969,479 $167,343,056 $ 179,739,674
============== ============== ============= ==============
- - -----------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
11
<PAGE> 18
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------------------------
ADJUSTABLE RATE INTERMEDIATE U.S. GOVERNMENT
MORTGAGE (ARM) PORTFOLIO MORTGAGE SECURITIES MORTGAGE SECURITIES
PORTFOLIO PORTFOLIO
- - ---------------------------------------------------------------------------------------------------------
1995 1994 1995 1994 1995 1994
- - ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 53,047,738 $ 59,878,208 $ 12,598,793 $ 12,759,392 $ 4,477,858 $ 5,020,990
12,433,567 (33,645,502) 6,554,384 (15,729,199) 2,619,170 (6,523,547)
-------------- -------------- ------------ ------------ ----------- ------------
65,481,305 26,232,706 19,153,177 (2,969,807) 7,097,028 (1,502,557)
-------------- -------------- ------------ ------------ ----------- ------------
(53,047,738) (59,878,208) (12,598,793) (12,759,392) (4,477,858) (5,020,990)
-0- -0- -0- -0- -0- (954,935)
-------------- -------------- ------------ ------------ ----------- ------------
(53,047,738) (59,878,208) (12,598,793) (12,759,392) (4,477,858) (5,975,925)
-------------- -------------- ------------ ------------ ----------- ------------
314,389,247 747,247,838 2,232,516 48,573,510 2,562,981 11,233,888
26,963,939 35,979,127 7,468,823 7,390,876 1,875,444 2,557,748
(508,162,846) (1,275,978,551) (42,595,593) (44,839,567) (5,411,804) (38,694,066)
-------------- -------------- ------------ ------------ ----------- ------------
(166,809,660) (492,751,586) (32,894,254) 11,124,819 (973,379) (24,902,430)
-------------- -------------- ------------ ------------ ----------- ------------
(154,376,093) (526,397,088) (26,339,870) (4,604,380) 1,645,791 (32,380,912)
1,045,914,290 1,572,311,378 213,427,149 218,031,529 60,612,707 92,993,619
-------------- -------------- ------------ ------------ ----------- ------------
$ 891,538,197 $ 1,045,914,290 $187,087,279 $213,427,149 $62,258,498 $ 60,612,707
============== ============== ============ ============ =========== ============
- - ---------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
12
<PAGE> 19
- - --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND, INC.
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------
1995 1994 1993 1992 1991
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- -------- -------- --------
Income from investment operations:
- - -------------------------------------
Net investment income.............. .0547 .0346 .0277 .0358 .0595
Net realized and unrealized gain
(loss) on investments............. -0- -0- -0- -0- -0-
------- ------- -------- -------- --------
Total from investment
operations................. .0547 .0346 .0277 .0358 .0595
------- ------- -------- -------- --------
Less distributions:
- - --------------------
Dividends paid to stockholders:
From net investment income........ (.0547) (.0346) (.0277) (.0358) (.0595)
From net realized gains........... -0- -0- -0- -0- -0-
------- ------- -------- -------- --------
Total distributions to
stockholders............... (.0547) (.0346) (.0277) (.0358) (.0595)
------- ------- -------- -------- --------
Net asset value, end of year......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======== ======== ========
Total return......................... 5.60% 3.51% 2.80% 3.64% 6.11%
Ratios/Supplemental data:
- - ------------------------------
Net assets, end of year (in
000's)............................ $36,869 $82,969 $107,924 $110,090 $131,291
Ratio of expenses to average net
assets............................ 0.24%(1) 0.40%(1) 0.40% 0.41% 0.45%
Ratio of net investment income to
average net assets................ 5.40% 3.34% 2.77% 3.54% 5.83%
- - ----------------------------------------------------------------------------------------------------
</TABLE>
(1) Without fee waivers for the Money Market Portfolio for the years ended
October 31, 1995 and 1994, the ratios of expenses to average net assets
would have been .39% and .42%, respectively.
See accompanying notes to financial statements.
13
<PAGE> 20
- - --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND, INC.
SHORT U.S. GOVERNMENT SECURITIES PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------------------------------
1995 1994 1993 1992 1991
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year............ $ 10.45 $ 10.89 $ 10.85 $ 10.71 $ 10.39
-------- -------- -------- -------- --------
Income from investment operations:
- - ------------------------------------------
Net investment income....................... .6746 .5396 .6155 .7652 .8308
Net realized and unrealized gain (loss) on
investments................................ .2300 (.4400) .0400 .1400 .3200
-------- -------- -------- -------- --------
Total from investment operations....... .9046 .0996 .6555 .9052 1.1508
-------- -------- -------- -------- --------
Less distributions:
- - --------------------
Dividends paid to stockholders:
From net investment income............... (.6746) (.5396) (.6155) (.7652) (.8308)
From net realized gains.................. -0- -0- -0- -0- -0-
-------- -------- -------- -------- --------
Total distributions to stockholders.... (.6746) (.5396) (.6155) (.7652) (.8308)
-------- -------- -------- -------- --------
Net asset value, end of year.................. $ 10.68 $ 10.45 $ 10.89 $ 10.85 $ 10.71
======== ======== ======== ======== ========
Total return.................................. 8.94% 0.95% 6.19% 8.72% 11.35%
Ratios/Supplemental data:
- - ------------------------------
Net assets, end of year (in 000's).......... $167,343 $179,740 $235,705 $213,995 $309,791
Ratio of expenses to average net assets..... 0.49% 0.47% 0.48% 0.50% 0.51%
Ratio of net investment income to average
net assets................................. 6.42% 5.04% 5.65% 7.15% 7.92%
Portfolio turnover rate..................... 112% 195% 110% 43% 18%
- - ----------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
14
<PAGE> 21
- - --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND, INC.
ADJUSTABLE RATE MORTGAGE (ARM) PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------------------------------------
1995 1994 1993 1992 1991*
<S> <C> <C> <C> <C> <C>
- - ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 9.78 $ 10.02 $ 9.98 $ 10.01 $ 10.00
-------- ---------- ---------- ---------- --------
Income from investment operations:
- - ----------------------------------
Net investment income................. .6035 .4396 .4267 .5235 .0783
Net realized and unrealized gain
(loss) on investments................ .1600 (.2400) .0386 (.0295) .0118
-------- ---------- ---------- ---------- --------
Total from investment operations... .7635 .1996 .4653 .4940 .0901
-------- ---------- ---------- ---------- --------
Less distributions:
- - -------------------
Dividends paid to stockholders:
From net investment income........... (.6035) (.4396) (.4253) (.5240) (.0801)
From net realized gains.............. -0- -0- -0- -0- -0-
-------- ---------- ---------- ---------- --------
Total distributions to
stockholders..................... (.6035) (.4396) (.4253) (.5240) (.0801)
-------- ---------- ---------- ---------- --------
Net asset value, end of period.......... $ 9.94 $ 9.78 $ 10.02 $ 9.98 $ 10.01
======== ========== ========== ========== ========
Total return............................ 8.02% 2.04% 4.76% 5.05% 7.73%(2)
Ratios/Supplemental data:
- - -------------------------
Net assets, end of period (in
000's)............................... $891,538 $1,045,914 $1,572,311 $1,189,309 $220,858
Ratio of expenses to average net
assets............................... 0.48%(1) 0.47%(1) 0.46%(1) 0.44%(1) 0.20%(1)(2)
Ratio of net investment income to
average net assets................... 6.12% 4.40% 4.34% 5.14% 6.47%(2)
Portfolio turnover rate............... 68% 65% 30% 43% 0%
- - ---------------------------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from September 18, 1991 (commencement of
operations) through October 31, 1991.
(1) Without fee waivers for the Adjustable Rate Mortgage (ARM) Portfolio for the
years ended October 31, 1995, 1994, 1993, and 1992 and the period ended
October 31, 1991, the ratios of expenses to average net assets would have
been .78%, .76%, .76%, .80%, and .79% (annualized), respectively.
(2) Annualized.
See accompanying notes to financial statements.
15
<PAGE> 22
- - --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND, INC.
INTERMEDIATE MORTGAGE SECURITIES PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
- - -------------------------------------------------------------------------------------------------------
Net asset value, beginning of year.......... $ 9.34 $ 10.00 $ 9.80 $ 9.61 $ 9.00
-------- -------- -------- -------- --------
Income from investment operations:
- - ----------------------------------
Net investment income..................... .6211 .5407 .5982 .7161 .8071
Net realized and unrealized gain
(loss) on investments.................... .3400 (.6600) .1987 .1909 .6100
-------- -------- -------- -------- --------
Total from investment operations....... .9611 (.1193) .7969 .9070 1.4171
-------- -------- -------- -------- --------
Less distributions:
- - -------------------
Dividends paid to stockholders:
From net investment income............... (.6211) (.5407) (.5969) (.7170) (.8071)
From net realized gains.................. -0- -0- -0- -0- -0-
-------- -------- -------- -------- --------
Total distributions to stockholders.... (.6211) (.5407) (.5969) (.7170) (.8071)
-------- -------- -------- -------- --------
Net asset value, end of year................ $ 9.68 $ 9.34 $ 10.00 $ 9.80 $ 9.61
======== ======== ======== ======== ========
Total return................................ 10.63% (1.18%) 8.33% 9.74% 16.41%
Ratios/Supplemental data:
- - -------------------------
Net assets, end of year (in 000's)........ $187,087 $213,427 $218,032 $116,458 $ 59,298
Ratio of expenses to average net assets... 0.38%(1) 0.39%(1) 0.37%(1) 0.43%(1) 0.63%
Ratio of net investment income to average
net assets............................... 6.55% 5.61% 5.94% 7.14% 8.71%
Portfolio turnover rate................... 133% 358% 106% 226% 39%
- - -------------------------------------------------------------------------------------------------------
</TABLE>
(1) Without fee waivers for the Intermediate Mortgage Securities Portfolio for
the years ended October 31, 1995, 1994, 1993, and 1992, the ratios of
expenses to average net assets would have been .58%, .59%, .57%, and .61%,
respectively.
See accompanying notes to financial statements.
16
<PAGE> 23
- - --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND, INC.
U.S. GOVERNMENT MORTGAGE SECURITIES PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-----------------------------------------------
1995 1994 1993 1992 1991
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year................. $ 10.23 $ 11.28 $ 11.26 $ 11.29 $ 10.61
------- ------- ------- ------- -------
Income from investment operations:
- - ----------------------------------
Net investment income............................ .7703 .7296 .8306 .8924 .9504
Net realized and unrealized gain (loss) on
investments..................................... .4500 (.9300) .0195 (.0297) .6800
------- ------- ------- ------- -------
Total from investment operations.............. 1.2203 (.2004) .8501 .8627 1.6304
------- ------- ------- ------- -------
Less distributions:
- - -------------------
Dividends paid to stockholders:
From net investment income...................... (.7703) (.7296) (.8301) (.8927) (.9504)
From net realized gains......................... -0- (.1200) -0- -0- -0-
------- ------- ------- ------- -------
Total distributions to stockholders........... (.7703) (.8496) (.8301) (.8927) (.9504)
------- ------- ------- ------- -------
Net asset value, end of year....................... $ 10.68 $ 10.23 $ 11.28 $ 11.26 $ 11.29
======= ======= ======= ======= =======
Total return....................................... 12.37% (1.82%) 7.76% 7.91% 16.00%
Ratios/Supplemental data:
- - -------------------------
Net assets, end of year (in 000's)............... $62,258 $60,613 $92,994 $72,505 $82,849
Ratio of expenses to average net assets.......... 0.53% 0.51% 0.51% 0.53% 0.54%
Ratio of net investment income to average net
assets.......................................... 7.39% 6.81% 7.32% 7.91% 8.75%
Portfolio turnover rate.......................... 177% 376% 187% 64% 43%
- - ----------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
17
<PAGE> 24
- - --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS
- - --------------------------------------------------------------------------------
Asset Management Fund, Inc. (the "Fund") consists of five separate portfolios,
the Money Market Portfolio, the Short U.S. Government Securities Portfolio, the
Adjustable Rate Mortgage (ARM) Portfolio, the Intermediate Mortgage Securities
Portfolio and the U.S. Government Mortgage Securities Portfolio.
A. The Fund is registered under the Investment Company Act of 1940, as amended,
as a diversified, open-end management company. Significant accounting policies
are as follows:
SECURITY VALUATION
Money Market Portfolio:
Portfolio securities are valued under the amortized cost method, which
approximates current market value. Under this method, securities are valued at
cost when purchased and thereafter a constant proportionate amortization of any
discount or premium is recorded until maturity of the security. The Fund seeks
to maintain net asset value per share at $1.00.
Short U.S. Government Securities Portfolio, Adjustable Rate Mortgage (ARM)
Portfolio, Intermediate Mortgage Securities Portfolio, and U.S. Government
Mortgage Securities Portfolio:
Portfolio securities are valued at the mean between the most recent bid and
asked prices, which may be furnished by a pricing service or at prices provided
directly by market makers. Portfolio securities for which market quotations are
not readily available are valued at fair value using methods determined in good
faith by the Board of Directors and may include matrix pricing methods.
Short-term instruments maturing within 60 days of the valuation date are valued
based upon their amortized cost.
REPURCHASE AGREEMENTS
Eligible portfolio investments may be purchased from financial institutions,
such as banks and non-bank dealers, subject to the seller's agreement to
repurchase them at an agreed upon date and price. The seller will be required on
a daily basis to maintain the value of the securities subject to the agreements
at not less than the repurchase price. Repurchase agreements are conditioned
upon the collateral being deposited under the Federal Reserve book-entry system
or with the Fund's custodian.
DIVIDENDS TO SHAREHOLDERS
Dividends are declared daily and paid monthly. Dividends payable are recorded
on the dividend record date.
FEDERAL TAXES
No provision is made for Federal taxes as it is each Portfolio's intention to
continue to qualify as a regulated investment company and to make the requisite
distributions to the stockholders, which will be sufficient to relieve it from
all or substantially all Federal income and excise taxes.
OTHER
Investment transactions are accounted for on the trade date and the cost of
investments sold is determined by use of the specific identification method for
both financial reporting and income tax purposes.
B. Shay Assets Management Co. (Adviser), which is equally owned by two general
partners, Shay Assets Management, Inc. and ACB Assets Management, Inc. (formerly
SCBA Assets Management, Inc.), serves as the Fund's investment adviser. Shay
Assets Management, Inc. is controlled by Rodger D. Shay, the President of the
Fund. The other half interest in the Adviser is held by ACB Assets Management,
Inc., an indirect wholly-owned subsidiary of America's Community Bankers (ACB)
(formerly Savings & Community Bankers of America).
As compensation for the Advisor's services, the Fund pays an investment
advisory fee monthly
18
<PAGE> 25
- - --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- - --------------------------------------------------------------------------------
based upon an annual percentage of the average daily net assets of each
Portfolio as follows:
The fee rate for the Money Market Portfolio is .15% of the first $500 million,
.125% of the next $500 million, and .10% of such net assets in excess of $1
billion. The Adviser voluntarily waived 100% of its fee for the year ended
October 31, 1995. The waiver amounted to $62,352.
The fee rate for each of the Short U.S. Government Securities Portfolio and
the U.S. Government Mortgage Securities Portfolio, computed separately, is .25%
of the first $500 million, .175% of the next $500 million, .125% of the next
$500 million, and .10% of such net assets in excess of $1.5 billion.
The fee rate for the Adjustable Rate Mortgage (ARM) Portfolio is .45% of the
first $3 billion, .35% of the next $2 billion, and .25% in excess of $5 billion.
The Adviser voluntarily waived approximately 44% of its fee for the year ended
October 31, 1995. The waiver amounted to $1,734,611.
The fee rate for the Intermediate Mortgage Securities Portfolio is .35% of the
first $500 million, .275% of the next $500 million, .20% of the next $500
million, and .10% of such net assets in excess of $1.5 billion. The Adviser
voluntarily waived approximately 57% of its fee for the year ended October 31,
1995. The waiver amounted to $384,634.
The Adviser has agreed to reduce or waive (but not below zero) its advisory
fees charged to each Portfolio, except the Adjustable Rate Mortgage (ARM)
Portfolio, to the extent that the daily ratio of operating expenses to average
daily net assets of each Portfolio exceeds .75%.
Shay Financial Services Co. (Sponsor), which is equally owned by two general
partners, Shay Financial Services, Inc. and ACB Securities, Inc. (formerly SCBA
Securities, Inc.), serves as the Fund's sponsor. Shay Financial Services, Inc.
is controlled by Rodger D. Shay, the President of the Fund. The other half
interest in the Sponsor is held by ACB Securities, Inc., an indirect
wholly-owned subsidiary of ACB.
As compensation for the Sponsor's distribution services, the Fund pays the
Sponsor a distribution fee monthly based upon an annual percentage of the
average daily net assets of each portfolio as follows:
The fee rate for each of the Money Market Portfolio and Short U.S. Government
Securities Portfolio is based upon an annual percentage of the combined average
daily net assets of both portfolios and is as follows: .15% of the first $500
million, .125% of the next $500 million, .10% of the next $1 billion and .075%
of such combined net assets in excess of $2 billion.
The fee rate for the Adjustable Rate Mortgage (ARM) Portfolio is .25% of
average daily net assets. The Sponsor voluntarily waived approximately 40% of
its fee for the year ended October 31, 1995. The waiver amounted to $867,305.
The fee rate for each of the Intermediate Mortgage Securities Portfolio and
the U.S. Government Mortgage Securities Portfolio, computed separately, is as
follows: .15% of the first $500 million, .125% of the next $500 million, .10% of
the next $500 million and .075% of such net assets in excess of $1.5 billion.
19
<PAGE> 26
- - --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- - --------------------------------------------------------------------------------
C. The Fund is authorized to issue 6 billion shares of common stock, par value
$.001 per share, of which 4 billion shares are of the Money Market Portfolio and
500 million shares are of each of the other four Portfolios.
Transactions in shares of the Fund for the years ended October 31, 1995 and 1994
were as follows:
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------
MONEY MARKET SHORT U.S. GOVERNMENT
PORTFOLIO SECURITIES PORTFOLIO
--------------------------------------------------------
1995 1994 1995 1994
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sale of shares............................ 389,839,779 785,801,344 2,982,085 5,977,808
Shares issued to stockholders in
reinvestment of dividends............... 1,752,434 1,826,082 520,236 602,153
Shares repurchased........................ (437,694,716) (812,579,510) (5,044,075) (11,018,078)
------------ ------------ ---------- -----------
Net decrease.............................. (46,102,503) (24,952,084) (1,541,754) (4,438,117)
Shares outstanding:
Beginning of year....................... 82,971,873 107,923,957 17,207,893 21,646,010
------------ ------------ ---------- -----------
End of year............................. 36,869,370 82,971,873 15,666,139 17,207,893
============= ============= ========== ============
- - ----------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
ADJUSTABLE RATE MORTGAGE INTERMEDIATE MORTGAGE
(ARM) PORTFOLIO SECURITIES PORTFOLIO
--------------------------------------------------------
1995 1994 1995 1994
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sale of shares............................ 31,767,897 74,943,848 235,385 4,891,825
Shares issued to stockholders in
reinvestment of dividends............... 2,735,804 3,629,741 789,781 767,850
Shares repurchased........................ (51,689,731) (128,547,313) (4,541,737) (4,629,250)
------------ ------------ ---------- -----------
Net increase (decrease)................... (17,186,030) (49,973,724) (3,516,571) 1,030,425
Shares outstanding:
Beginning of year....................... 106,899,464 156,873,188 22,840,619 21,810,194
------------ ------------ ---------- -----------
End of year............................. 89,713,434 106,899,464 19,324,048 22,840,619
============= ============= ========== ============
- - ----------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------------------
U.S. GOVERNMENT
MORTGAGE
SECURITIES PORTFOLIO
-----------------------
1995 1994
- - ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Sale of shares............................................................ 243,512 1,027,504
Shares issued to stockholders in reinvestment of dividends................ 180,463 237,833
Shares repurchased........................................................ (520,356) (3,581,490)
--------- ----------
Net decrease.............................................................. (96,381) (2,316,153)
Shares outstanding:
Beginning of year....................................................... 5,925,213 8,241,366
--------- ----------
End of year............................................................. 5,828,832 5,925,213
========= ==========
- - ---------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE> 27
- - --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- - --------------------------------------------------------------------------------
D. At October 31, 1995, NET ASSETS consisted of the following:
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------------------------
SHORT U.S. INTERMEDIATE U.S. GOVERNMENT
GOVERNMENT ADJUSTABLE RATE MORTGAGE MORTGAGE
MONEY MARKET SECURITIES MORTGAGE SECURITIES SECURITIES
PORTFOLIO PORTFOLIO (ARM) PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
- - ---------------------------------------------------------------------------------------------------------
Capital paid in........ $ 36,869,370 $181,861,100 $ 910,580,228 $202,103,985 $63,755,818
Accumulated net
realized losses...... -0- (17,930,495) (24,492,352) (18,598,632) (4,047,764)
Undistributed net
investment income.... -0- -0- -0- -0- -0-
Net unrealized
appreciation of
investments.......... -0- 3,412,451 5,450,321 3,581,926 2,550,444
----------- ------------ ------------ ------------ -----------
$ 36,869,370 $167,343,056 $ 891,538,197 $187,087,279 $62,258,498
=========== ============ ============ ============ ===========
- - ---------------------------------------------------------------------------------------------------------
</TABLE>
E. For tax purposes at October 31, 1995, the Short U.S. Government Securities
Portfolio had a capital loss carryforward of $17,920,079, of which $87,032
expires in 1996, $8,161,004 expires in 1997, $4,590,496 expires in 1998,
$4,615,249 expires in 2002, and $466,298 expires in 2003. The Adjustable Rate
Mortgage (ARM) Portfolio had a capital loss carryforward of $19,682,479, of
which $1,067,764 expires in 2000, $5,932,937 expires in 2001, $8,006,883 expires
in 2002, and $4,674,895 expires in 2003. The Intermediate Mortgage Securities
Portfolio had a capital loss carryforward of $18,276,565, of which $2,703,680
expires in 1996, $2,760,938 expires in 1997, $1,415,174 expires in 1998,
$9,464,083 expires in 2002, and $1,932,690 expires in 2003. The U.S. Government
Mortgage Securities Portfolio had a capital loss carryforward of $4,084,681, of
which $3,353,457 expires in 2002 and $731,224 expires in 2003. All losses are
available to offset future realized capital gains, if any.
- - --------------------------------------------------------------------------------
21
<PAGE> 28
- - --------------------------------------------------------------------------------
ASSET MANAGEMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- - --------------------------------------------------------------------------------
F. For the year ended October 31, 1995, purchases and proceeds from
sales/maturities of securities, other than short-term investments, were as
follows:
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------
ADJUSTABLE U.S.
SHORT U.S. RATE INTERMEDIATE GOVERNMENT
GOVERNMENT MORTGAGE MORTGAGE MORTGAGE
SECURITIES (ARM) SECURITIES SECURITIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- - ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases:
U.S. Government obligations.......... $178,533,438 $475,194,933 $245,053,262 $ 99,627,807
Other securities..................... -0- 139,837,666 -0- -0-
------------ ------------ ------------ ------------
Total purchases................... $178,533,438 $615,032,599 $245,053,262 $ 99,627,807
============= ============= ============= =============
Sales and maturities:
U.S. Government obligations.......... $183,434,688 $392,647,936 $216,425,125 $102,628,337
Other securities..................... -0- 269,282,949 32,557,095 -0-
------------ ------------ ------------ ------------
Total sales and maturities........ $183,434,688 $661,930,885 $248,982,220 $102,628,337
============= ============= ============= =============
- - -------------------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE> 29
- - --------------------------------------------------------------------------------
To the Shareholders and Directors
of Asset Management Fund, Inc.
We have audited the accompanying statements of net assets of Asset Management
Fund, Inc. (comprising, respectively, the Money Market, Short U.S. Government
Securities, Adjustable Rate Mortgage (ARM), Intermediate Mortgage Securities,
and U.S. Government Mortgage Securities Portfolios) as of October 31, 1995, and
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 financial highlights for each of the periods presented. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights 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 financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios comprising Asset Management Fund, Inc. as of
October 31, 1995, and the results of their operations for the year then ended,
the changes in their net assets for each of the two years in the period then
ended, and their financial highlights for each of the periods presented, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
November 29, 1995
<PAGE> 30
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
GENERAL INFORMATION
- - --------------------------------------------------------------------------------
For general information about any of the Portfolios offered by Asset Management
Fund, Inc., including fees and expenses, please send for a prospectus and read
it carefully before you invest.
SHAY FINANCIAL SERVICES CO.
111 East Wacker Drive/Chicago, IL 60601
800-527-3713
9200 South Dadeland Boulevard/Miami, FL 33156
800-327-6190
725 Church Street/Lynchburg, VA 24505
800-955-7429
315 Post Road West/Westport, CT 06880
800-456-8232
5605 North MacArthur Blvd./Irving, TX 75038
800-442-9825
101 Bradford Road/Wexford, PA 15090
800-224-5177
580 California Street/San Francisco, CA 94104
800-227-5566
350 Springfield Avenue/Summit, NJ 07091
800-553-6159
- - --------------------------------------------------------------------------------
ACCOUNT INFORMATION
- - --------------------------------------------------------------------------------
To obtain performance data and place purchase orders, call toll free
800-527-3713.
<PAGE> 31
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
SPONSOR
Shay Financial Services Co.
111 East Wacker Drive
Chicago, IL 60601
INVESTMENT ADVISER
Shay Assets Management Co.
111 East Wacker Drive
Chicago, IL 60601
ADMINISTRATOR AND TRANSFER AGENT
AND SHAREHOLDER SERVICE AGENT
PFPC Inc.
103 Bellevue Parkway
Wilmington, DE 19809
LEGAL COUNSEL
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Chicago, IL 60601
CUSTODIAN
PNC Bank
17th & Chestnut Streets
Philadelphia, PA 19101
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103
DIRECTORS AND OFFICERS
Arthur G. De Russo
Director
Wendell L. Evans, Jr.
Director
David F. Holland
Director
Leon T. Kendall
Director and Chairman
Gerald J. Levy
Director
Rodger D. Shay
President and Director
Edward E. Sammons, Jr.
Vice President, Treasurer and Secretary
Doris J. Pavel
Assistant Secretary
