<PAGE>
Annual Report
August 31, 1995
The Rushmore Fund, Inc.
Nova Portfolio
<PAGE>
THE RUSHMORE FUND, INC.
NOVA PORTFOLIO
STATEMENT OF NET ASSETS
August 31, 1995
<TABLE>
<CAPTION>
MARKET
VALUE
COMMON STOCKS SHARES (NOTE 1)
------------- ------ --------
<S> <C> <C>
GENERAL INDUSTRIAL 2.89%
Fleetwood Enterprises, Inc. ........... 1,000 $ 19,625
MANUFACTURING 5.16%
Baxter International ................... 900 35,100
OIL WELL SERVICES 4.98%
Halliburton, Inc. ...................... 800 33,900
OIL DRILLING 4.76%
Texaco, Inc. ........................... 500 32,375
---------
TOTAL COMMON STOCKS 17.79%
(Cost $117,367 ) ..................... 121,000
---------
MUTUAL FUNDS 81.94%
------------
Fund for Government Investors, Inc.
(Cost $557,328 ) ...................... 557,328 557,328
---------
TOTAL INVESTMENTS 99.73%
(Cost $674,695 ) ..................... 678,328
---------
Other Assets Less Liabilities 0.27% 1,839
---------
Net Assets 100.00% (Note 6) ........... $ 680,167
=========
Net Asset Value Per Share ( Based
on 62,500 Shares Outstanding) ..... $ 10.88
=========
</TABLE>
See Notes to Financial Statements.
1
<PAGE>
- --------------------------------------------------------------------------------
THE RUSHMORE FUND, INC.
NOVA PORTFOLIO
STATEMENT OF OPERATIONS
For the Year Ended August 31, 1995
<TABLE>
<S>
INVESTMENT INCOME <C>
Interest (Note 1).............................................. $ 13,803
Dividends (Note 1)............................................. 4,328
-------------
Total Investment Income.................................... 18,131
-------------
EXPENSES
Investment Advisory Fee (Note 2)............................... 3,223
Administrative Fee (Note 2).................................... 2,148
-------------
Total Expenses............................................. 5,371
-------------
NET INVESTMENT INCOME.............................................. 12,760
-------------
Net Realized Gain on Investments............................... 38,774
Net Change in Unrealized Appreciation of Investments........... 3,633
-------------
NET GAIN ON INVESTMENTS............................................ 42,407
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... $ 55,167
=============
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
THE RUSHMORE FUND, INC.
NOVA PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ended August 31,
<TABLE>
<CAPTION>
1995 1994
------------- -------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES
Net Investment Income................................................. $ 12,760 $ 1,636
Net Realized Gains on Investment Transactions......................... 38,774 -
Net Change in Unrealized Appreciation of Investments.................. 3,633 -
------------ -----------
Net Increase in Net Assets Resulting from Operations.................. 55,167 1,636
DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income (Note 1)................................... - (1,636)
From Realized Gains on Investments.................................... - -
FROM SHARE TRANSACTIONS (Note 4)
Net Proceeds from Sales of Shares..................................... 625,000 -
Cost of Shares Redeemed............................................... - (467,774)
------------ -----------
Net Increase (Decrease) in Net Assets................................. 680,167 (467,774)
NET ASSETS - Beginning of Year............................................ 0 467,774
------------- -----------
NET ASSETS - End of Year.................................................. $ 680,167 $ 0
============= ===========
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
3
<PAGE>
THE RUSHMORE FUND, INC.
NOVA PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the Year Ended August 31,
-----------------------------------------------------------
1995 1994 1993 1992 1991
-------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net Asset Value - Beginning of Year.............................. 0.00 $ 10.01 $ 9.46 $ 10.73 $ 9.61
-------- --------- ---------- ---------- ----------
Net Investment Income............................................ 0.310 0.060 0.157 0.186 0.263
Net Realized and Unrealized Gains (Losses) on Securities......... 0.570 - 0.711 (1.170) 1.007
-------- --------- ---------- ---------- ----------
Net Increase (Decrease) in Net Asset Value Resulting
from Operations.............................................. 0.880 0.060 0.868 (0.984) 1.270
Dividends to Shareholders........................................ - - (0.318) (0.286) (0.150)
Distributions to Shareholders from Net Realized Capital Gains.... - - - - -
Liquidation of Assets and Redemption of all Outstanding Shares... - (10.070) - - -
From Share Transactions*......................................... 10.000 - - - -
-------- --------- ---------- ---------- ----------
Net Increase (Decrease) in Net Asset Value....................... 10.88 (10.01) 0.55 (1.27) 1.12
-------- --------- ---------- ---------- ----------
Net Asset Value - End of Year.................................... $10.88 $ 0.00 $ 10.01 $ 9.46 $ 10.73
======== ========= ========== ========== ==========
Total Investment Return.............................................. 8.80%/b/ 0.90% 9.36% (7.79)% 13.31%
Ratios to Average Net Assets:
Expenses......................................................... 1.25%/c/ 0.90%/a/ 1.36% 1.12% 1.13%
Net Investment Income............................................ 2.97%/c/ 2.41% 1.56% 1.88% 2.59%
Supplementary Data:
Portfolio Turnover Rate.......................................... 224.4% 0.0% 1,288.9% 2,100.8% 1,088.4%
Number of Shares Outstanding at End of Year (000's omitted)...... 63 0 47 1,471 7,707
</TABLE>
* During the year ended August 31, 1995, 62,500 shares were sold at $10.00 per
share when the net asset value of the portfolio was $0.00 thereby resulting
in Money Management Associates, the Portfolio's adviser, and other affiliated
persons of the Portfolio, owning 80% of the Portfolio's shares.
a Reflects all fees paid for services provided during the period. Investment
advisory services were not provided for part of the period due to investment
activity having ceased.
b Reflects the total return for the period January 3, 1995 through August 31,
1995. January 3, 1995 represents the first date during fiscal year 1995 that
the fund had net assets and shareholders.
c Annualized.
See Notes to Financial Statements.
4
<PAGE>
THE RUSHMORE FUND, INC.
NOVA PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
August 31, 1995
1. SIGNIFICANT ACCOUNTING POLICIES
The Rushmore Fund, Inc. ("Fund") is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940 as an open-end,
diversified investment company. The Fund consists of four separate portfolios
which are designed to meet a variety of investment objectives. The Nova
Portfolio, which is one of the four portfolios of the Fund, is a
nondiversified investment company. The following is a summary of significant
accounting policies for the Nova Portfolio (the "Portfolio").
(a) Listed securities are valued at the last sales price. Options and futures
contracts are valued at the last sales price as of the close of trading
on the applicable exchanges. If market quotations are not readily
available, the Board of Directors will value the Portfolio's securities
in good faith.
(b) Security transactions are recorded on the trade date (the date the order
to buy or sell is executed). Interest income is accrued on a daily basis.
Dividend income is recorded on the ex-dividend date. Realized gains and
losses from securities are computed on an identified cost basis.
(c) Income dividends are declared and paid annually in the Portfolio.
Dividends are reinvested in additional shares unless shareholders request
payment in cash. Generally, short-term capital gains are distributed
annually in the Nova Portfolio. Long-term capital gains, if any, are
distributed annually.
(d) The Fund complies with the provisions of the Internal Revenue Code
applicable to regulated investment companies and distributes all net
investment income to its shareholders. Therefore, no Federal income tax
provision is required.
(e) When the Portfolio writes (sells) an option, an amount equal to the
premium received is entered in the Portfolio's accounting records as an
asset and an equivalent liability. The amount of the liability is
subsequently marked-to-market to reflect the current value of the option
written. When an option expires, or if the Portfolio enters into a
closing purchase transaction, the Portfolio realizes a gain (or loss if
the cost of a closing purchase transaction exceeds the premium received
when the option was sold).
2. INVESTMENT ADVISORY AND SHAREHOLDER SERVICES
Investment advisory and management services are provided by Money Management
Associates, ("Adviser"). Under an agreement with the Adviser, the Portfolio
pays a fee for such services at an annual rate of 0.75% of the average daily
net assets of the Portfolio.
Rushmore Trust and Savings, FSB (Trust), a wholly owned subsidiary of the
Adviser, provides transfer agency, dividend-disbursing and shareholder
services to the Portfolio. In addition, the Trust serves as custodian of the
Portfolio's assets and pays the operating expenses of the Portfolio. For
these services, the Trust receives an annual fee of 0.50% of the average net
assets of the Portfolio.
5
<PAGE>
3. SECURITIES TRANSACTIONS
For the year ended August 31, 1995, purchases and sales (including
maturities) of securities (excluding short-term securities) were as follows:
<TABLE>
<S> <C>
Purchases.................................................. $511,071
--------
Sales...................................................... $432,478
--------
</TABLE>
4. SHARES TRANSACTIONS
On August 31, 1995, there were 1,000,000,000 shares of $.001 par value
capital stock authorized of the Fund. Transactions in shares of the Portfolio
were as follows:
For the Year Ended August 31, 1995:
<TABLE>
<CAPTION>
Shares Dollars
--------- ---------
<S> <C> <C>
Shares Sold................................... 62,500 $625,000
Shares Issued in Reinvestment
of Dividends............................... 0 0
--------- ---------
62,500 625,000
Shares Redeemed............................... 0 0
--------- ---------
62,500 $625,000
========= =========
</TABLE>
5. NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS
Unrealized appreciation (depreciation) as of August 31, 1995, based on the
cost for Federal income tax purposes is as follows:
<TABLE>
<S> <C>
Gross Unrealized Appreciation.............................. $ 4,601
Gross Unrealized Depreciation.............................. (968)
--------
Net Unrealized Appreciation................................ $ 3,633
========
Cost of Investments for Federal Income Tax purposes........ $674,695
========
</TABLE>
6
<PAGE>
6. NET ASSETS
At August 31, 1995 net assets consisted of the following:
<TABLE>
<S> <C>
Paid-in Capital............................................ $625,000
Undistributed Net Investment Income........................ 12,760
Accumulated Net Realized Gain on Investments............... 38,774
Net Unrealized Appreciation on Investments................. 3,633
--------
Net Assets................................................. $680,167
========
</TABLE>
7. CAPITAL LOSS CARRYOVERS
At August 31, 1995, for Federal income tax purposes, the Portfolio had
capital loss carryovers which may be applied against future net taxable
realized gains of each succeeding year until the earlier of its utilization
or its expiration.
<TABLE>
<S> <C>
Expires August 31, 2000............. $1,966,183
==========
</TABLE>
7
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Shareholders and Board of Directors
of The Rushmore Fund, Inc.:
We have audited the statement of net assets of the NOVA Portfolio (one of the
Portfolios) of The Rushmore Fund, Inc. as of August 31, 1995, the related
statements of operations and changes in net assets and the financial highlights
for 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 at August
31, 1995 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the NOVA Portfolio
(one of the Portfolios) of The Rushmore Fund, Inc. at August 31, 1995, the
results of its operations, the changes in its net assets and the financial
highlights for the respective stated periods in conformity with generally
accepted accounting principles.
Deloitte & Touche LLP
Washington, DC
September 29, 1995
