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Annual Report
August 31, 1996
THE RUSHMORE FUND, INC.
NOVA PORTFOLIO
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THE RUSHMORE FUND, INC.
NOVA PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1996
ASSETS
Mutual Funds--Fund for Government Investors
100,170 shares (Cost $100,170) (Note 1).................... $ 100,170
Interest Receivable........................................... 379
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Total Assets.......................................... 100,549
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LIABILITIES
Administration Fee Payable.................................... 60
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Total Liabilities...................................... 60
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NET ASSETS........................................................ $ 100,489
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Shares Outstanding ............................................. 10,000
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Net Asset Value Per Share ...................................... $ 10.05
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See Notes to Financial Statements.
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THE RUSHMORE FUND, INC.
NOVA PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1996
INVESTMENT INCOME
Interest (Note 1)............................................. $ 9,360
Dividends (Note 1)............................................ 1,369
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Total Investment Income................................... 10,729
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EXPENSES
Investment Advisory Fee (Note 2).............................. 1,641
Administrative Fee (Note 2)................................... 1,186
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Total Expenses............................................ 2,827
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NET INVESTMENT INCOME............................................. 7,902
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Net Realized Gain on Investments.............................. 34,335
Net Change in Unrealized Appreciation (Depreciation) of
Investments.................................................. (3,633)
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NET GAIN ON INVESTMENTS........................................... 30,702
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. $ 38,604
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See Notes to Financial Statements.
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THE RUSHMORE FUND, INC.
NOVA PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED AUGUST 31,
1996 1995
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FROM INVESTMENT ACTIVITIES
Net Investment Income . . . . . . . . . . . . $ 7,902 $ 12,760
Net Realized Gains on Investment
Transactions . . . . . . . . . . . . . . . . 34,335 38,774
Net Change in Unrealized Appreciation
(Depreciation) of Investments . . . . . . . . (3,633) 3,633
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Net Increase in Net Assets Resulting from
Operations. . . . . . . . . . . . . . . 38,604 55,167
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DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income (Note 1) . . . . . (20,173) -
From Net Realized Capital Gains . . . . . . . (73,109) -
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Total Distributions to Shareholders . . . (93,282) -
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FROM SHARE TRANSACTIONS
Net Proceeds from Sales of Shares . . . . . . 156,369 625,000
Shares Issued in Reinvestment of Dividends. . 12,407 -
Cost of Shares Redeemed . . . . . . . . . . . (693,776) -
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Net (Increase) Decrease in Net Assets
Resulting from Share Transactions. . . . (525,000) 625,000
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Total Increase (Decrease) in
Net Assets . . . . . . . . . . . . . (579,678) 680,167
NET ASSETS - Beginning of Year. . . . . . . . . . 680,167 -
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NET ASSETS - End of Year. . . . . . . . . . . . . $ 100,489 $ 680,167
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SHARES
Sold. . . . . . . . . . . . . . . . . . . . . 14,855 62,500
Issued in Reinvestment of Distributions . . . 1,123 -
Redeemed. . . . . . . . . . . . . . . . . . . (68,478) -
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Net Increase in Shares. . . . . . . . . . (52,500) 62,500
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See Notes to Financial Statements.
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THE RUSHMORE FUND, INC.
NOVA PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the Year Ended August 31,
--------------------------------------------------------
1996 1995 1994 1993 1992
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<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net Asset Value - Beginning of Year................................ $ 10.88 $ 0.00 $ 10.01 $ 9.46 $ 10.73
-------- ------- -------- ------- --------
Income from Investment Operations:
Net Investment Income.......................................... 0.435 0.310 0.060 0.157 0.186
Net Realized and Unrealized Gains (Losses) on Securities....... 3.529 0.570 - 0.711 (1.170)
-------- ------- -------- ------- --------
Total from Investment Operations........................... 3.964 0.880 0.060 0.868 (0.984)
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Distributions to Shareholders:
From Net Investment Income..................................... (0.590) - - (0.318) (0.286)
From Net Realized Capital Gains................................ (3.114) - - - -
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Total Distributions to Shareholders........................ (3.704) - - (0.318) (0.286)
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Liquidation of Assets and Redemption of all Outstanding Shares..... (11.090) - (10.070) - -
From Share Transactions............................................ 10.000(1) 10.000(2) - - -
----------- --------- -------- ------- --------
Net Increase (Decrease) in Net Asset Value......................... (0.83) 10.88 (10.01) 0.55 (1.27)
-------- ------- -------- ------- --------
Net Asset Value - End of Year...................................... $ 10.05 $ 10.88 $ 0.00 $ 10.01 $ 9.46
-------- ------- -------- ------- --------
-------- ------- -------- ------- --------
Total Investment Return................................................ 7.58% 8.80%(b) 0.90% 9.36% (7.79)%
Ratios to Average Net Assets:
Expenses.......................................................... 1.19%(a) 1.25%(c) 0.90%(a) 1.36% 1.12%
Net Investment Income.............................................. 3.32% 2.97%(c) 2.41% 1.56% 1.88%
Supplementary Data:
Portfolio Turnover Rate............................................ 71.2% 224.4% 0.0% 1,288.9% 2,100.8%
Net Assets at End of Year (000's omitted).......................... 100 680 0 468 13,918
Number of Shares Outstanding at End of Year (000's omitted)........ 10 63 0 47 1,471
</TABLE>
(1) During the year ended August 31, 1996, all outstanding shares were redeemed
at a net asset value of $11.09 per share, thereby resulting in the
liquidation of all net assets of the Portfolio. Subsequently, 10,000
shares were sold at $10.00 per share when net asset value of the Portfolio
was $0.00 thereby resulting in Money Management Associates, the
Portfolio's adviser, and another affiliated person of the Portfolio,
owning 100% of the Portfolio's shares.
(2) 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.
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THE RUSHMORE FUND, INC.
NOVA PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1996
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 two separate portfolios
each with its own investment objectives and policies. These financial
statements report on one of the two portfolios: the Nova Portfolio. The Nova
Portfolio ("Portfolio") is a non-diversified investment company. On August 31,
1996, there were 1,000,000,000 shares of $0.001 par value capital stock
authorized. The financial statements have been prepared in conformity with
generally accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following is a summary of significant accounting policies which the Portfolio
consistently follows:
(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 Portfolio. Long-term 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 FEES AND OTHER TRANSACTIONS WITH AFFILIATES
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. Certain Officers and Directors
of the Fund are affiliated with the Adviser.
Rushmore Trust and Savings, FSB (Trust), a majority 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.
The Portfolio invests its excess cash in Fund for Government Investors, a
money market mutual fund. Certain Officers and Trustees of Fund for
Government Investors are affiliated with the Portfolio.
5
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3. SECURITIES TRANSACTIONS
For the year ended August 31, 1996, purchases and sales (including
maturities) of securities (excluding short-term securities) were as
follows:
Purchases...................................... $33,280
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Sales.......................................... $180,497
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4. NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS
Unrealized appreciation (depreciation) as of August 31, 1996, cost for
Federal income tax purposes is as follows:
Gross Unrealized Appreciation.................. $0
Gross Unrealized Depreciation.................. 0
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Net Unrealized Appreciation.................... $0
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Cost of Investments for
Federal Income Tax purposes.................... $0
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5. NET ASSETS
At August 31, 1996, net assets consisted of the following:
Paid-in Capital................................ $100,000
Undistributed Net Investment Income............ 489
Accumulated Net Realized
Gain on Investments............................ 0
Net Unrealized Appreciation on
Investments.................................... 0
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Net Assets..................................... $100,489
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6
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INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Directors
of The Rushmore Fund, Inc.:
We have audited the statement of assets and liabilities of the Nova Portfolio
(one of the Portfolios) of The Rushmore Fund, Inc. as of August 31, 1996, 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 from 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, 1996 by correspondence with the custodian and broker. 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, 1996, the
results of its operations, the changes in its net assets and the financial
highlights for the presented periods in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE LLP
Princeton, New Jersey
October 11, 1996
