<PAGE>
MBL GROWTH FUND, INC.
Dear Shareholders and Variable Annuity Participants:
MBL Growth Fund returned 18.2% during the last six months of 1995 and 34.8% for
the full year, including reinvestment of dividends. Comparable performance for
the Standard & Poor's 500 Index, a generally accepted index of unmanaged
securities, was 14.4% for the six month period and 37.5% for the year. I am
pleased to report that the 34.8% appreciation was achieved with an average
estimated risk level equal to only 76% of the risk level of the market, as
measured by the standard deviation of the Fund's returns. In fact, the Fund was
recently listed in the January 8, 1996 issue of BARRON'S as one of the top
performing variable annuity funds in the fourth quarter of 1995.
In the letter that follows, Michael Mullarkey, the Fund's primary portfolio
manager, discusses some of the individual issues that affected performance
during the second half of the year. Perhaps the most noteworthy was CCH Inc.
(also known as Commerce Clearing House) which more than doubled in value in the
six month period.
On December 19, 1995 the Board of Directors declared a dividend from net
investment income of $.13 per share and a capital gain distribution of $.50 per
share payable to shareholders of record on December 22, 1995. Total 1995 income
and capital gains distributions were $.26 and $.68, respectively.
The Board of Directors continues to invite you to mail your comments and
suggestions to them and thanks you for your continued support and confidence in
the Fund.
Sincerely,
EUGENE J. CIARKOWSKI
PRESIDENT
February 15, 1996
<PAGE>
REPORT OF THE INVESTMENT ADVISER
Dear Shareholders and Variable Annuity Participants:
The investment returns of MBL Growth Fund noted in the President's letter
reflect performance after expenses. Long term holders will be pleased by the
fact that the MBL Growth Fund, after expenses, has beaten the Standard & Poor's
500 Index, which is unburdened by expenses, over a three, five and ten year
period. And this has been accomplished with lower risk than represented by the
S&P 500, as measured by the standard deviation of the Fund's returns.
In the paragraphs that follow, we talk about holdings that materially affected
the Growth Fund's performance during the second half of 1995.
The holdings that dominated performance during the second half of 1995 were both
the A and B shares of CCH INC. (formerly known as Commerce Clearing House). CCH
Inc. appreciated better than 100% during the second half after the family that
controlled it agreed in November 1995 to sell out to Wolters Kluwer at $55.50
per share. CCH's CEO had publicly stated in a speech in late June 1995 that he
thought the private market value of his company was materially higher than the
public market value, and that he was trying to close the gap. That speech, as
well as stock repurchases by the company and some insider buying by management,
contributed to our decision to maintain a large holding in CCH.
RITE AID, another large position, appreciated 33.7% in the second half when it
got the two largest holders and the management of REVCO to agree to a merger.
Such a merger would materially strengthen Rite Aid's share of its traditional
market, as well as lower the price at which it could buy pharmaceuticals. Rite
Aid's experience with the FTC in two previous mergers lent credibility to the
proposition that compromises would be reached with government regulators that
would allow the merger to proceed.
SHARED MEDICAL SYSTEM was another excellent performer appreciating 35.5% during
the second half. We think the main reason for the appreciation was the market's
response to a positive top management change that installed a proven
professional manager. Also helping was the market's willingness to pay a higher
multiple for the predictable earnings Shared Medical provides, in a period of
slow economic growth. The fact that President Clinton fought hard to protect
Medicare and Medicaid from Republican cutbacks may have also helped.
NATIONAL COMPUTER SYSTEMS was an underperformer during the second half. This
company continues to be in a fundamental turnaround led by a new and focused
management in whom we have confidence. We suspect the stock may have suffered
from the fact that National Computer Systems is a major subcontractor to the
Department of Education, one of the areas of government currently under attack
by the Republican majority in Congress.
Also hurting performance in the second half was the cash position held by MBL
Growth Fund. Our rationale for this defensive positioning was the robust price
level of the stock market as measured in terms of price to book value and
dividend yield.
Sincerely,
[SIGNATURE]
MICHAEL J. MULLARKEY
FOR MARKSTON INVESTMENT MANAGEMENT
February 15, 1996
2
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE MBL GROWTH FUND
AND THE STANDARD & POOR'S 500 INDEX
FOR THE TEN YEAR PERIOD ENDED DECEMBER 31, 1995
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
<S> <C> <C>
1 Year 5 Year 10 Year
34.75% 17.11% 15.04%
MBL Growth Fund S&P 500
1985 10000 10000
1986 12134 11870
1987 11870 12464
1988 15148 14532
1989 19467 19125
1990 18429 18532
1991 22614 24166
1992 25931 26002
1993 29503 28628
1994 30131 29003
1995 40601 39888
</TABLE>
THE GRAPH ABOVE DEPICTS THE PERFORMANCE OF MBL GROWTH FUND VERSUS THE STANDARD &
POOR'S 500 INDEX (AN UNMANAGED INDEX OF STOCKS CONSIDERED REPRESENTATIVE OF THE
OVERALL STOCK MARKET). IT IS IMPORTANT TO NOTE THAT MBL GROWTH FUND IS A
PROFESSIONALLY MANAGED MUTUAL FUND WHILE THE INDEX IS NOT AVAILABLE FOR
INVESTMENT, IS UNMANAGED AND IS SHOWN FOR COMPARISON ONLY.
THIS GRAPH ASSUMES AN INITIAL INVESTMENT OF $10,000 AS WELL AS REINVESTMENT OF
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. THIS FUND IS ONLY AVAILABLE FOR
PURCHASE BY INSURANCE COMPANY SEPARATE ACCOUNTS. DEDUCTIONS AND CHARGES,
INCLUDING SALES CHARGES, APPLICABLE TO THE VARIOUS INSURANCE PRODUCTS THAT
INVEST IN THE FUND, ARE NOT REFLECTED IN THIS GRAPH. PAST PERFORMANCE IS NOT A
GUARANTEE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL
FLUCTUATE SO THAT, WHEN REDEEMED, AN INVESTOR'S SHARES MAY BE WORTH MORE OR LESS
THAN WHEN ORIGINALLY PURCHASED.
3
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and
Board of Directors of
MBL Growth Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of portfolio investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of MBL Growth Fund, Inc. (the "Fund")
at December 31, 1995, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the three years in the period then ended,
in conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1995 by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provide
a reasonable basis for the opinion expressed above. The financial highlights for
each of the seven years in the period ended December 31, 1992 were audited by
other independent accountants whose report dated February 12, 1993 expressed an
unqualified opinion on those statements.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
February 13, 1996
4
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
MBL GROWTH FUND, INC.
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments -- Note E:
Common stocks (cost $21,981,680)....... $29,421,440
Preferred stocks (cost $35,171)........ 49,748
Corporate bonds (cost $479,579)........ 512,655
Short-term investments................. 9,683,775
-----------
39,667,618
Cash..................................... 89,902
Dividends and interest receivable........ 84,788
Receivable for investment securities
sold.................................... 632,574
Other assets............................. 5,541
-----------
Total Assets..................... $40,480,423
-----------
-----------
LIABILITIES
Payable for investment securities
purchased............................... $ 245,608
Payable for Fund shares redeemed......... 30,850
Accrued investment advisory fee -- Note
B....................................... 32,606
Accounts payable and accrued expenses.... 20,302
-----------
Total Liabilities................ 329,366
NET ASSETS
Capital stock -- 3,907,989 shares of
$1.00 par value capital stock
outstanding (21,000,000 shares
authorized)............................ 3,907,989
Capital paid-in.......................... 28,412,516
Accumulated undistributed net investment
income................................. 56,970
Accumulated undistributed net realized
gain from security transactions........ 286,169
Net unrealized appreciation of
investments............................. 7,487,413
-----------
Total Net Assets................. 40,151,057
-----------
Total Liabilities and Net
Assets.......................... $40,480,423
-----------
-----------
Net asset value, offering price, and
redemption price per share
($40,151,057 DIVIDED BY 3,907,989
shares of
capital stock outstanding)............. $10.27
</TABLE>
See notes to financial statements.
STATEMENT OF OPERATIONS
MBL GROWTH FUND, INC.
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
Investment Income:
Dividends............................. $ 709,575
Interest.............................. 543,505
------------
1,253,080
Expenses:
Investment advisory fee -- Note B..... 130,570
Custodian............................. 64,620
Audit................................. 28,202
Transfer agent........................ 20,062
Printing.............................. 19,800
Legal................................. 18,825
Insurance expense..................... 8,830
Directors' fees....................... 7,100
Miscellaneous......................... 2,599
Registration and filing fees.......... 575
State tax............................. 250
------------
301,433
------------
Net Investment Income........... 951,647
------------
Realized and Unrealized Gain on
Investments -- Note E:
Net realized gain from security
transactions........................ 2,228,794
Increase in unrealized appreciation of
investments......................... 7,376,436
------------
Net Gain on Investments............. 9,605,230
------------
Net Increase in Net Assets Resulting
from Operations................... $ 10,556,877
------------
------------
</TABLE>
5
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
MBL GROWTH FUND, INC.
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1995 1994
-------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS
Net investment income......................................................... $ 951,647 $ 716,352
Net realized gain from security transactions ($2,228,783 and $4,039,903,
respectively, for federal income tax purposes).............................. 2,228,794 4,039,892
Increase (decrease) in unrealized appreciation of investments................. 7,376,436 (4,081,355)
-------------- --------------
Net Increase in Net Assets Resulting from Operations........................ 10,556,877 674,889
-------------- --------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income ($.26 and $.21, per share,
respectively)............................................................... (950,032) (706,594)
Distributions from net realized gain from security transactions ($.68 and
$1.18, per share, respectively)............................................. (2,494,342) (3,975,197)
-------------- --------------
Total Distributions to Shareholders......................................... (3,444,374) (4,681,791)
-------------- --------------
FROM CAPITAL SHARE TRANSACTIONS -- NOTE D
Net increase in net assets from capital share transactions.................... 1,039,015 142,022
-------------- --------------
Net Increase (Decrease) in Net Assets....................................... 8,151,518 (3,864,880)
NET ASSETS
Beginning of year............................................................. 31,999,539 35,864,419
-------------- --------------
End of year (including undistributed net investment income of $56,970 and
$55,355 respectively)....................................................... $ 40,151,057 $ 31,999,539
-------------- --------------
-------------- --------------
</TABLE>
See notes to financial statements.
6
<PAGE>
SCHEDULE OF PORTFOLIO INVESTMENTS
MBL GROWTH FUND, INC.
DECEMBER 31, 1995
<TABLE>
<CAPTION>
NUMBER
OF MARKET
SHARES VALUE
- ---------- -----------
<C> <S> <C>
COMMON STOCKS (73.28%)
AEROSPACE AND DEFENSE (3.06%)
47,900 Teledyne, Inc.................. $ 1,227,438
-----------
BANKING AND FINANCE (4.29%)
37,500 American Express Co............ 1,551,562
2,000 Northern Trust Corp............ 110,750
2,000 Wilmington Trust Corp.......... 61,500
-----------
1,723,812
-----------
BUILDING (2.24%)
5,900 Lone Star Industries, Inc...... 147,079
22,100 Morgan Products Ltd.*.......... 129,838
10,800 Vulcan Materials Co............ 622,350
-----------
899,267
-----------
CHEMICALS (0.26%)
3,800 Lubrizol Corp.................. 105,925
-----------
COMPUTERS AND COMPUTING (7.86%)
15,600 Cray Research, Inc.*........... 386,100
13,400 Digital Equipment Corp.*....... 859,275
9,200 Intel Corp..................... 522,100
74,100 National Computer Systems,
Inc.......................... 1,352,325
17,200 Summagraphics Corp.*........... 35,475
-----------
3,155,275
-----------
CONGLOMERATES (4.44%)
26,900 Minnesota Mining &
Manufacturing Co............. 1,782,125
-----------
CONSUMER GOODS AND SERVICES (5.15%)
7,200 American Greetings Corp., Class
A............................ 198,900
8,000 Hasbro, Inc.................... 248,000
9,800 Mattel, Inc.................... 301,350
29,300 National Service Industries,
Inc.......................... 948,588
3,400 Time Warner, Inc............... 128,775
5,400 Valspar Corp................... 240,975
-----------
2,066,588
-----------
<CAPTION>
NUMBER
OF MARKET
SHARES VALUE
- ---------- -----------
<C> <S> <C>
FOOD AND BEVERAGES (2.95%)
4,300 Coca-Cola Co................... $ 319,275
5,600 Quaker Oats Co................. 193,200
55,900 Showbiz Pizza Time, Inc.*...... 670,800
-----------
1,183,275
-----------
HEALTHCARE AND MEDICAL (3.51%)
10,600 Caremark International, Inc.... 192,125
27,400 Cooper Companies, Inc.......... 205,500
8,800 NextHealth, Inc.*.............. 27,500
600 Rhone-Poulenc Rorer, Inc....... 31,950
17,600 Shared Medical System Corp..... 950,400
-----------
1,407,475
-----------
INDUSTRIAL SERVICES (2.09%)
39,300 Ogden Corp..................... 840,038
-----------
INSURANCE (3.22%)
35,900 Allmerica Property & Casualty
Companies, Inc............... 969,300
9,900 Argonaut Group, Inc............ 321,750
200 USF&G Corp..................... 3,375
-----------
1,294,425
-----------
INVESTMENT COMPANIES (2.03%)
6,400 Emerging Tigers Fund, Inc.*.... 83,200
6,600 Global Government Plus Fund,
Inc.......................... 48,675
82,800 Global Total Return Fund,
Inc.......................... 683,100
-----------
814,975
-----------
OIL AND GAS (5.17%)
9,114 Apache Corp.................... 268,863
44,525 Panhandle Eastern Corp......... 1,241,134
3,000 Petroleum Helicopters, Inc.,
voting....................... 41,250
8,100 Petroleum Helicopters, Inc.,
non-voting................... 105,300
7,000 Piedmont Natural Gas, Inc...... 162,750
17,600 Quaker State Corp.............. 222,200
2,200 Western Gas Resources, Inc..... 35,475
-----------
2,076,972
-----------
</TABLE>
7
<PAGE>
SCHEDULE OF PORTFOLIO INVESTMENTS -- CONTINUED
MBL GROWTH FUND, INC.
DECEMBER 31, 1995
<TABLE>
<CAPTION>
NUMBER
OF MARKET
SHARES VALUE
- ---------- -----------
<C> <S> <C>
PRINTING AND PUBLISHING
(15.17%)
75,000 CCH, Inc., Class A............. $ 4,143,750
19,900 CCH, Inc., Class B............. 1,096,987
25,100 Times Mirror Co., Series A..... 850,263
-----------
6,091,000
-----------
REAL ESTATE INVESTMENT (2.22%)
17,168 First Union Real Estate Equity
& Mortgage Investments....... 120,176
10,700 Health Care Property Investors,
Inc.......................... 375,837
37,016 IRT Property Co................ 342,398
6,100 Reading Co., Class A*.......... 54,138
-----------
892,549
-----------
RETAIL TRADE (4.42%)
11,700 Grossman's, Inc.*.............. 13,162
41,200 Rite Aid Corp.................. 1,411,100
11,000 Smith's Food & Drug Centers,
Inc., Class B................ 277,750
15,100 Universal International,
Inc.*........................ 71,725
-----------
1,773,737
-----------
TEXTILE & APPAREL (0.15%)
3,500 Oshkosh B'Gosh, Inc., Class
A............................ 58,625
-----------
UTILITIES -- ELECTRIC AND GAS
(3.62%)
21,800 Cinergy Corp................... 667,625
6,900 Eastern Utilities Assoc........ 163,012
41,000 Noram Energy Corp.............. 363,875
8,000 Northwest Natural Gas Co....... 260,000
-----------
1,454,512
-----------
UTILITIES -- TELEPHONE (0.79%)
7,901 Sprint Corp.................... 315,052
-----------
<CAPTION>
NUMBER
OF MARKET
SHARES VALUE
- ---------- -----------
<C> <S> <C>
VOCATIONAL TRAINING (0.64%)
31,800 National Education Corp.*...... $ 258,375
-----------
Total Common Stocks............ 29,421,440
-----------
PREFERRED STOCKS (0.12%)
AEROSPACE AND DEFENSE (0.06%)
1,849 Teledyne, Inc., Series E....... 26,348
-----------
CONSUMER GOODS AND SERVICES
(0.06%)
2,600 Craig Corp., Class A*.......... 23,400
-----------
Total Preferred Stocks......... 49,748
-----------
<CAPTION>
PRINCIPAL
AMOUNT
- ----------
<C> <S> <C>
CORPORATE BONDS (1.28%)
INSURANCE (0.28%)
$ 129,000 CII Financial, Inc., 7.50%
conv. sub. deb., due
September 15, 2001........... 112,230
-----------
VOCATIONAL TRAINING (1.00%)
570,000 National Education Corp., 6.50%
conv. sub. deb., due
May 15, 2011................. 400,425
-----------
Total Corporate Bonds.......... 512,655
-----------
SHORT-TERM INVESTMENTS (24.12%)
9,725,000 U.S. Treasury Bills, 4.48% to
5.39%, due January 4 to
February 15, 1996............ 9,683,775
-----------
Total Investments (98.80%)..... $39,667,618
-----------
-----------
</TABLE>
- ---------
* Non-income producing security.
The percentage shown for each investment category is the total value of that
category expressed as a percentage of the total net assets of the Fund.
See notes to financial statements.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
MBL GROWTH FUND, INC.
NOTE A -- ACCOUNTING POLICIES
MBL Growth Fund, Inc. (the "Fund") is a diversified, open-end, management
investment company registered under the Investment Company Act of 1940, as
amended.
The Fund functions as the investment vehicle for certain variable contract
accounts of MBL Life Assurance Corporation ("MBL Life") which are unit
investment trusts ("Separate Accounts") registered under the Investment Company
Act of 1940, as amended. Significant accounting policies of the Fund are as
follows:
INVESTMENTS: Investments, except for short-term investments which are stated at
amortized cost, which approximates market value, are valued at closing prices on
national securities exchanges. Securities traded on a national securities
exchange for which there are no sales on the valuation date and securities
traded over-the-counter, are valued at closing bid prices. Investment security
transactions are recorded on the date of purchase or sale. Realized gains and
losses on investment transactions are determined on the basis of identified
cost.
FEDERAL INCOME TAXES: The Fund does not provide for federal income taxes since
it intends to continue to qualify as a "regulated investment company" under the
Internal Revenue Code and to maintain this qualification by distributing each
year substantially all of its taxable net income and net realized capital gains
to its shareholders.
DIVIDENDS: Dividends receivable on investment securities and dividends payable
to shareholders are recorded on the ex-dividend date.
ESTIMATES: The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
NOTE B -- INVESTMENT ADVISORY AND SERVICE AGREEMENTS
The Fund has an investment advisory and a service agreement with Markston
Investment Management ("Adviser"), a partnership between Markston International,
Inc. ("Markston") and MBL Sales Corporation ("MBL Sales"). Markston is a 49%
general partner of Adviser, and MBL Sales is a 51% general partner. MBL Sales is
a wholly-owned subsidiary of MBLLAC Holding Corporation, which is a wholly-owned
subsidiary of MBL Life. Under the investment advisory and service agreements,
the Fund pays Adviser a periodic fee (basic fee) at the annual rate of .50% of
the first $200,000,000 of the Fund's total net assets, .45% of the next
$100,000,000 of such value, .40% of the next $100,000,000 of such value, and
.35% of such value in excess of $400,000,000. The basic fee may be adjusted by
an amount determined according to a formula based on the Fund's performance in
relation to the Standard & Poor's 500 Index ("Index"). The formula provides for
a weekly increase or decrease in the basic fee by an amount equal to .05% per
annum for each full two percentage points that the Fund's investment
performance, over a 24-month period, is better or worse than that of the Index.
The maximum adjustment is .30%. The fee is computed and accrued daily and paid
quarterly. Based on the formula, for the 24-month period ended December 31,
1995, the Fund's investment performance was 1.82 percentage points worse than
that of the Index, resulting in no adjustment to the basic fee.
9
<PAGE>
NOTE B -- INVESTMENT ADVISORY AND SERVICE AGREEMENTS -- CONTINUED
In the event operating expenses of the Fund, exclusive of taxes and interest,
but including the investment advisory fee, exceed 1.5% of the first $30,000,000
of the Fund's average daily net asset value and 1% of the Fund's average daily
net asset value in excess of $30,000,000 for any fiscal year related thereto,
Adviser will reimburse the Fund promptly after the end of the fiscal year for
such excess. No reimbursement was required for the year ended December 31, 1995.
In addition, the Fund has a distribution agreement with First Priority
Investment Corporation ("FPIC") a wholly-owned subsidiary of MBLLAC Holding
Corporation.
The compensation of each disinterested director is paid by the Fund at the rate
of $400 per meeting attended, plus an annual retainer of $900. Aggregate fees
paid during the year to the Fund's disinterested directors amounted to $7,100.
Two of the directors of the Fund and all officers of the Fund are either
officers or employees of MBL Life. The compensation of the directors and
officers and any employees of the Fund affiliated with Adviser or FPIC is paid
by the affiliated entities.
NOTE C -- RELATED PARTY TRANSACTIONS
At December 31, 1995, MBL Life owned 65,406 Fund shares. In addition, 3,842,583
Fund shares are held by MBL Life Separate Accounts, for the benefit of variable
annuity contract holders.
On April 29, 1994, the Third Amended Plan of Rehabilitation of the Mutual
Benefit Life Insurance Company in Rehabilitation ("Mutual Benefit Life") was
implemented. Substantially all of the assets and liabilities of Mutual Benefit
Life, including Mutual Benefit Life's investment in the Fund, were transferred
to MBL Life. In addition, the assets and liabilities of the Separate Accounts
which invest in the Fund were transferred to new separate accounts of MBL Life.
In view of the terms and conditions of the Plan, applications for new contracts
and additional purchase payments under existing contracts are currently not
being accepted by the Separate Accounts, and therefore, the Fund is currently
issuing shares only with respect to reinvestment of dividends and capital gain
distributions, if any. The terms of the Plan permit redemptions from the
Separate Accounts to continue as requested.
NOTE D -- CAPITAL STOCK
A summary of capital share transactions follows:
<TABLE>
<CAPTION>
Year Ended December 31, Year Ended December 31,
1995 1994
------------------------- -------------------------
Shares Amount Shares Amount
---------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
Shares issued in reinvestment of income dividends
and capital gain distributions.................. 347,421 $ 3,444,374 548,840 $ 4,681,791
Less shares repurchased.......................... (266,102) (2,405,359) (479,247) (4,539,769)
---------- ------------- ---------- -------------
Net increase in number of shares outstanding and
net assets resulting from capital share
transactions.................................... 81,319 $ 1,039,015 69,593 $ 142,022
---------- ------------- ---------- -------------
---------- ------------- ---------- -------------
</TABLE>
10
<PAGE>
NOTE E -- PURCHASES AND SALES OF INVESTMENTS
Purchases and proceeds from sales of investments during the year ended December
31, 1995, other than short-term investments, aggregated $12,350,352 and
$14,405,273, respectively.
The identified cost of investments owned at December 31, 1995 for federal income
tax purposes was $32,180,205. At December 31, 1995, gross unrealized
appreciation of investments was $8,301,130, and gross unrealized depreciation of
investments was $813,717 resulting in net unrealized appreciation of $7,487,413,
for federal income tax purposes.
- -------------------------------------------------------------------------------
11
<PAGE>
FINANCIAL HIGHLIGHTS
MBL GROWTH FUND, INC.
Selected data for each share of capital stock outstanding throughout the years
indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
1995 1994 1993 1992 1991 1990
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.......................... $ 8.36 $ 9.55 $ 9.36 $ 11.00 $ 15.45 $ 17.18
Net investment income....................................... 0.26 0.21 0.17 0.31 0.66 0.56
Net realized and unrealized gain (loss) on investments...... 2.59 (0.01) 1.10 1.25 2.72 (1.46)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net assets from operations....... 2.85 0.20 1.27 1.56 3.38 (0.90)
Dividends from net investment income........................ (0.26) (0.21) (0.17) (0.31) (0.66) (0.58)
Distributions from net realized gain from security
transactions.............................................. (0.68) (1.18) (0.91) (2.89) (7.17) (0.25)
--------- --------- --------- --------- --------- ---------
Total distributions......................................... (0.94) (1.39) (1.08) (3.20) (7.83) (0.83)
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Year................................ $ 10.27 $ 8.36 $ 9.55 $ 9.36 $ 11.00 $ 15.45
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Total Return................................................ 34.75% 2.13% 13.77% 14.67% 22.71% -5.33%
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Ratios/Supplemental Data:
Net Assets, End of Year (thousands)......................... $ 40,151 $ 32,000 $ 35,864 $ 33,685 $ 37,523 $ 59,108
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Ratio of Expenses to Average Net Assets..................... 0.86% 1.13% 1.20% 0.99% 0.57% 0.68%
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Ratio of Net Investment Income to Average Net Assets........ 2.73% 2.15% 1.67% 2.39% 3.26% 3.62%
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Portfolio Turnover Rate..................................... 47.49% 78.29% 47.46% 48.10% 33.74% 7.11%
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
<CAPTION>
1989 1988 1987 1986
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.......................... $ 14.06 $ 11.69 $ 14.28 $ 12.73
Net investment income....................................... 0.44 0.46 0.41 0.38
Net realized and unrealized gain (loss) on investments...... 3.57 2.735 (0.45) 2.16
--------- --------- --------- ---------
Net increase (decrease) in net assets from operations....... 4.01 3.195 (0.04) 2.54
Dividends from net investment income........................ (0.47) (0.44) (0.59) (0.38)
Distributions from net realized gain from security
transactions.............................................. (0.42) (0.385) (1.96) (0.61)
--------- --------- --------- ---------
Total distributions......................................... (0.89) (0.825) (2.55) (0.99)
--------- --------- --------- ---------
Net Asset Value, End of Year................................ $ 17.18 $ 14.06 $ 11.69 $ 14.28
--------- --------- --------- ---------
--------- --------- --------- ---------
Total Return................................................ 28.51% 27.61% -2.10% 21.34%
--------- --------- --------- ---------
--------- --------- --------- ---------
Ratios/Supplemental Data:
Net Assets, End of Year (thousands)......................... $ 56,805 $ 40,166 $ 31,506 $ 29,959
--------- --------- --------- ---------
--------- --------- --------- ---------
Ratio of Expenses to Average Net Assets..................... 1.06% 0.94% 0.73% 0.95%
--------- --------- --------- ---------
--------- --------- --------- ---------
Ratio of Net Investment Income to Average Net Assets........ 2.80% 3.39% 3.05% 2.66%
--------- --------- --------- ---------
--------- --------- --------- ---------
Portfolio Turnover Rate..................................... 14.69% 19.43% 18.81% 44.28%
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
See notes to financial statements.
12
<PAGE>
RECORD OF PERFORMANCE (UNAUDITED)
The primary investment objective of MBL Growth Fund, Inc. is long-term
appreciation of capital and this can only be achieved over a period of time. The
performance of the Fund should not be judged over the short-term, but should be
considered in light of its investment policies and objectives. Following is a
tabular illustration of the Fund's history since shares of the Fund were first
offered for sale on December 17, 1982.
<TABLE>
<CAPTION>
Per Share
----------------------------
<S> <C> <C> <C>
Dividends
Net asset from net Capital
value investment gains
Year ended per share income distributions
- -------------------------------------------------------------
December 31, 1982 $ 10.30 -- --
December 31, 1983 12.67 $ .15 $ .05
December 31, 1984 11.20 .51 1.11
December 31, 1985 12.73 .46 .99
December 31, 1986 14.28 .38 .61
December 31, 1987 11.69 .59 1.96
December 31, 1988 14.06 .44 .385
December 31, 1989 17.18 .47 .42
December 31, 1990 15.45 .58 .25
December 31, 1991 11.00 .66 7.17
December 31, 1992 9.36 .31 2.89
December 31, 1993 9.55 .17 .91
December 31, 1994 8.36 .21 1.18
December 31, 1995 10.27 .26 .68
- -------------------------------------------------------------
</TABLE>
PORTFOLIO CHANGES (UNAUDITED)
For the year ended December 31, 1995:
INVESTMENTS ADDED
Allmerica Property & Casualty Cos., Inc.
American Express Co.
Apache Corp.
Cinergy Corp.
Cooper Companies, Inc.
Cray Research, Inc.
Digital Equipment Corp.
Eastman Chemical Co.
Emerging Tigers Fund, Inc.
Global Government Plus Fund, Inc.
Global Income Plus Fund, Inc.
Global Total Return Fund, Inc.
GT Greater Europe Fund
Intel Corp.
Lone Star Industries, Inc.
National Education Corp.
NextHealth, Inc.
Oshkosh B'Gosh Inc., Class A
Quaker Oats Co.
Teledyne, Inc. (Series E preferred)
Times Mirror Co., Series A
INVESTMENTS ELIMINATED
Americana Hotels & Realty Corp.
Archer-Daniels-Midland Co.
Avnet, Inc.
DEKALB Energy Co., Class B
DEKALB Genetics Corp., Class B
Eastman Chemical Co.
Global Income Plus Fund, Inc.
GT Greater Europe Fund
Jundt Growth Fund, Inc.
McWhorter Technologies, Inc.
Murphy Oil Corp.
Occidental Petroleum Corp.
Pacific Enterprises
Pioneer Hi-Bred International, Inc.
Santa Cruz Operation, Inc.
Sierra Tucson Co., Inc.
State of the Art, Inc.
Sunshine Mining Co. (preferred)
United States Shoe Corp.
Waxman Industries, Inc.
Westwood One, Inc.
13
<PAGE>
MBL GROWTH FUND, INC.
520 Broad Street
Newark, New Jersey 07102-3111
1-800-559-5535
FUND DIRECTORS
Eugene J. Ciarkowski
Horace J. DePodwin
Herbert M. Groce Jr.
Kathleen M. Koerber
Jerome M. Scheckman
INVESTMENT ADVISER
Markston Investment Management
1 North Lexington Avenue
White Plains, New York 10601-1702
DISTRIBUTOR
First Priority Investment Corporation
520 Broad Street
Newark, New Jersey 07102-3111
1-800-559-5535
CUSTODIAN and TRANSFER AGENT
State Street Bank & Trust Co.
P.O. Box 8500
Boston, Massachusetts 02266-8500
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
THIS REPORT HAS BEEN PREPARED FOR THE SHAREHOLDERS OF THE FUND. IT IS NOT
AUTHORIZED FOR OTHER DISTRIBUTION UNLESS PRECEDED OR ACCOMPANIED BY A CURRENT
PROSPECTUS, WHICH INCLUDES ADDITIONAL INFORMATION ABOUT THE FUND.
FS-629 (2-96)
15152
Annual Report
December 31, 1995
MBL GROWTH FUND, INC.
Distributed by
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