<PAGE>
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SEMIANNUAL REPORT, September 30, 1995
AMERICAN GAS INDEX FUND, INC.
[LOGO OF RUSHMORE 4922 Fairmont Avenue, Bethesda, Maryland 20814
APPEARS HERE] (800) 622-1386 (301) 657-1510
- --------------------------------------------------------------------------------
- -----------TOP FIVE PERFORMERS-----------------
<TABLE>
<CAPTION>
(Price Change: March 31, 1995 - Sept. 30, 1995)
<S> <C>
NorAm Energy Corp. 31.00%
Public Service Co. of New Mexico 30.38%
The Columbia Gas System, Inc. 30.38%
Washington Energy Co. 28.04%
Williams Companies, Inc. 27.35%
</TABLE>
- -----------------------------------------------
- ----------BOTTOM FIVE PERFORMERS---------------
<TABLE>
<CAPTION>
(Price Change: March 31, 1995 - Sept. 30, 1995)
<S> <C>
Delta Natural Gas Co., Inc. -13.70%
Citizen's Utilities Co., Series B -12.87%
Southwestern Energy Co. - 9.17%
Energen Corp. - 4.92%
Niagara Mohawk Power Corp. - 4.55%
</TABLE>
- -----------------------------------------------
Dear Shareholders:
The total return to investors in the American Gas Index Fund, Inc. for the six
months ended September 30, 1995, was 11.1%. Net asset value increased by 8.9%
and the income yield was 2.2%. This advance was broad based, as eighty percent
of the Fund's holdings increased in value, including nine of the ten largest
holdings. The Fund's strong performance did not match the advances in the broad
based Dow Jones Industrial, S&P 500 and Dow Jones Utility Averages, which
rebounded from the 1994 sell-off of electric utility stocks.
During the six month period there were no additions to the Fund's portfolio,
but several minor holdings were eliminated. As of September 30, 1995, the mar-
ket value of diversified/integrated companies represented 30% of the Fund's
stock holdings. Distribution companies (natural gas utilities)
were 25%, and combination gas and electric utilities represented 22%. Transmis-
sion companies (pipelines) accounted for 23%.
Several developments during the period indicate that the natural gas transmis-
sion and distribution companies are well positioned to meet the increasing com-
petition in the energy markets. The Department of Energy reported an increase
in natural gas reserves. This information combined with increased
deliverability of supplies from Canada is helping to lay to rest any concerns
about shortages and price spikes. In addition, with normal weather and economic
[BAR CHART APPEARS HERE]
<TABLE>
<S> <C>
American Gas Index Fund 11.11%
DJ Industrials 16.40%
DJ Utilities 17.22%
S&P 500 14.87%
</TABLE>
<PAGE>
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activity, 1995 should be the ninth year of increased natural gas consumption.
The restructuring of the electric utility industry is providing new
opportunities for natural gas distribution and pipeline companies in mergers,
acquisitions, energy marketing and new business ventures. The Fund's healthy
performance during the past six months reflects the stock market's assessment
of these events and the optimism of many gas industry analysts.
We look forward to future growth in the value of the Fund and your continued
participation.
Sincerely,
/s/ Richard J. Garvey
Richard J. Garvey
Chairman
American Gas Index Fund, Inc.
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2
<PAGE>
- --------------------------------------------------------------------------------
AMERICAN GAS INDEX FUND, INC.
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
MARKET VALUE PERCENT OF
COMMON STOCKS SHARES (NOTE 1) NET ASSETS
------------- ------- ------------ ----------
<S> <C> <C> <C>
Panhandle Eastern Corp. ........................ 360,000 $ 9,810,000 5.22%
Williams Companies, Inc. ....................... 250,000 9,750,000 5.19%
Pacific Gas and Electric Co. ................... 305,000 9,111,875 4.85%
Consolidated Natural Gas Co. ................... 220,000 8,882,500 4.73%
Enron Corp. .................................... 260,000 8,710,000 4.64%
Occidental Petroleum Corp. ..................... 385,000 8,470,000 4.51%
Tenneco, Inc. .................................. 170,000 7,862,500 4.19%
Pacific Enterprises............................. 270,000 6,783,750 3.61%
The Coastal Corp. .............................. 200,000 6,725,000 3.58%
The Columbia Gas System, Inc.*.................. 145,000 5,600,625 2.98%
Sonat, Inc. .................................... 140,000 4,480,000 2.39%
NICOR, Inc. .................................... 160,000 4,360,000 2.32%
NorAm Energy Corp. ............................. 450,000 3,543,750 1.89%
Atlanta Gas Light Co. .......................... 90,000 3,476,250 1.85%
MCN Corp. ...................................... 175,000 3,456,250 1.84%
Brooklyn Union Gas Co. ......................... 136,700 3,366,237 1.79%
El Paso Natural Gas Co. ........................ 115,000 3,162,500 1.68%
Peoples Energy Corp. ........................... 110,000 3,025,000 1.61%
Questar Corp. .................................. 90,000 2,891,250 1.54%
Washington Gas Light Co. ....................... 145,000 2,881,875 1.53%
Public Service Enterprise Group, Inc. .......... 95,000 2,826,250 1.51%
National Fuel Gas Co. .......................... 95,000 2,731,250 1.45%
Consolidated Edison Co. of New York, Inc. ...... 85,000 2,581,875 1.38%
Equitable Resources, Inc. ...................... 70,000 2,065,000 1.10%
ONEOK, Inc. .................................... 85,000 1,976,250 1.06%
CMS Energy Corp. ............................... 75,000 1,968,750 1.05%
Piedmont Natural Gas Co., Inc. ................. 97,500 1,950,000 1.04%
NIPSCO Industries, Inc. ........................ 55,000 1,918,125 1.02%
ENSERCH Corp. .................................. 105,000 1,732,500 0.92%
Indiana Energy, Inc. ........................... 80,000 1,730,000 0.92%
Public Service Co. of Colorado.................. 50,000 1,712,500 0.91%
KN Energy, Inc. ................................ 61,400 1,673,150 0.89%
WICOR, Inc. .................................... 55,000 1,663,750 0.89%
PECO Energy Co. ................................ 55,000 1,574,375 0.84%
Northwest Natural Gas Co. ...................... 50,000 1,550,000 0.83%
Eastern Enterprises............................. 45,000 1,445,625 0.77%
Utilicorp United, Inc. ......................... 50,000 1,406,250 0.75%
Baltimore Gas & Electric Co. ................... 50,000 1,293,750 0.69%
New Jersey Resources Corp. ..................... 50,000 1,293,750 0.69%
Washington Energy Co. .......................... 75,000 1,284,375 0.68%
</TABLE>
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3
<PAGE>
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AMERICAN GAS INDEX FUND, INC.
STATEMENT OF NET ASSETS--(CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE PERCENT OF
COMMON STOCKS SHARES (NOTE 1) NET ASSETS
------------- ------ ------------ ----------
<S> <C> <C> <C>
Cinergy Corp. ................................... 45,000 $ 1,254,375 0.67%
Bay State Gas Co. ............................... 50,000 1,212,500 0.65%
San Diego Gas and Electric Co. .................. 50,000 1,156,250 0.62%
Atmos Energy Corp. .............................. 57,500 1,114,062 0.59%
MDU Resources Group, Inc. ....................... 31,500 1,004,062 0.53%
Wisconsin Energy Corp. .......................... 35,000 988,750 0.53%
Public Service Co. of North Carolina............. 60,000 967,500 0.52%
Western Resources, Inc. ......................... 27,500 897,187 0.48%
SCANA Corp. ..................................... 35,000 840,000 0.45%
MidAmerican Energy Co. .......................... 53,000 814,875 0.43%
Northern States Power Co. ....................... 17,500 794,063 0.42%
Yankee Energy System, Inc. ...................... 35,000 752,500 0.40%
Southern Union Co.* ............................. 40,000 745,000 0.40%
South Jersey Industries, Inc. ................... 35,000 739,375 0.39%
Niagara Mohawk Power Corp. ...................... 55,000 721,875 0.38%
Connecticut Natural Gas Corp. ................... 32,500 719,063 0.38%
The Montana Power Co. ........................... 30,000 693,750 0.37%
Rochester Gas and Electric Corp. ................ 28,000 661,500 0.35%
Energen Corp. ................................... 30,000 652,500 0.35%
UGI Corp. ....................................... 30,000 618,750 0.33%
Illinova Corp. .................................. 22,500 610,313 0.33%
Public Service Co. of New Mexico................. 37,000 605,875 0.32%
Long Island Lighting Co. ........................ 35,000 603,750 0.32%
L G & E Energy Corp. ............................ 15,000 601,875 0.32%
Colonial Gas Co. ................................ 30,000 600,000 0.32%
Connecticut Energy Corp. ........................ 30,000 581,250 0.31%
DPL, Inc. ....................................... 25,000 578,125 0.31%
United Cities Gas Co. ........................... 35,000 577,500 0.31%
New York State Electric and Gas Corp. ........... 20,000 525,000 0.28%
Seagull Energy Corp.* ........................... 25,000 506,250 0.27%
North Carolina Natural Gas Corp. ................ 22,500 500,625 0.27%
NUI Corp. ....................................... 30,000 498,750 0.27%
Cascade Natural Gas Corp. ....................... 32,500 487,500 0.26%
Tejas Power Corp. ............................... 50,000 475,000 0.25%
Southwest Gas Corp. ............................. 30,000 468,750 0.25%
WPS Resources Corp. ............................. 15,000 455,625 0.24%
Commonwealth Energy System....................... 10,500 455,438 0.24%
Southwestern Energy Co. ......................... 30,000 408,750 0.22%
Orange & Rockland Utilities, Inc. ............... 10,000 356,250 0.19%
Fall River Gas Co. .............................. 14,500 348,000 0.19%
Delmarva Power & Light Co. ...................... 15,000 343,125 0.18%
Providence Energy Corp. ......................... 20,000 320,000 0.17%
</TABLE>
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4
<PAGE>
- --------------------------------------------------------------------------------
AMERICAN GAS INDEX FUND, INC.
STATEMENT OF NET ASSETS--(CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE PERCENT OF
COMMON STOCKS SHARES (NOTE 1) NET ASSETS
------------- ------ ------------ ----------
<S> <C> <C> <C>
WPL Holdings, Inc. ............................. 10,000 $ 292,500 0.16%
Pennsylvania Enterprises, Inc. ................. 8,000 276,000 0.15%
IES Industries, Inc. ........................... 10,000 266,250 0.14%
Amoco Corp. .................................... 4,000 256,500 0.14%
Mobile Gas Service Corp. ....................... 12,000 252,000 0.13%
Southern Indiana Gas and Electric Co. .......... 7,000 235,375 0.13%
Central Hudson Gas & Electric Corp. ............ 7,500 228,750 0.12%
EnergyNorth, Inc. .............................. 12,500 210,937 0.11%
Sierra Pacific Resources........................ 8,000 183,000 0.10%
Essex County Gas Co. ........................... 7,000 175,000 0.09%
Corning Natural Gas Corp. ...................... 7,000 173,250 0.09%
Chesapeake Utilities Corp. ..................... 12,000 168,000 0.09%
Citizens Utilities Co., Series B................ 15,000 165,000 0.09%
Valley Resources, Inc. ......................... 15,000 161,250 0.09%
Roanoke Gas Co. ................................ 10,000 150,000 0.08%
Entergy Corp. .................................. 5,000 130,625 0.07%
Delta Natural Gas Co., Inc. .................... 7,500 118,125 0.06%
Northwestern Public Service Co. ................ 4,000 102,000 0.05%
The Berkshire Gas Co. .......................... 6,500 97,500 0.05%
Chevron Corp. .................................. 2,000 97,250 0.05%
Energy West, Inc. .............................. 7,500 61,875 0.03%
Wisconsin Fuel & Light Co. ..................... 1,092 41,497 0.02%
Minnesota Power & Light Co. ................... 1,000 27,875 0.01%
Gulfside Industries*............................ 25,000 1,750 0.01%
------------ -------
Total Common Stocks (Cost $152,938,743)....... 184,854,884 98.45%
------------ -------
Repurchase Agreements
With Paine Webber at 6.15%, dated 9/29/95,
due 10/2/95, collaterized by U.S. Treasury
Notes, due 2/28/97 (Cost $2,714,500)......... 2,714,500 1.45%
------------ -------
Total Investments (Cost $155,653,243)......... 187,569,384 99.90%
Other Assets Less Liabilities................. 182,770 0.10%
------------ -------
Net Assets (Note 6)........................... $187,752,154 100.00%
============ =======
Net Asset Value Per Share (Based on 15,487,676
Shares Outstanding).......................... $12.12
============
</TABLE>
*Non-income producing.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
AMERICAN GAS INDEX FUND, INC.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME (Note 1)
Dividends........................................................ $ 4,472,435
Interest......................................................... 78,439
-----------
Total Investment Income........................................ 4,550,874
-----------
EXPENSES
Investment Advisory Fee (Note 2)................................. 378,729
Accounting and Administrative Service Fee (Note 2)............... 331,388
Administrative Fee (Note 2)...................................... 94,682
-----------
Total Expenses................................................. 804,799
-----------
NET INVESTMENT INCOME.............................................. 3,746,075
-----------
Net Realized Loss on Investments................................... (3,023,029)
Net Change in Unrealized Appreciation of Investments (Note 5)...... 19,155,954
-----------
NET GAIN ON INVESTMENTS............................................ 16,132,925
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... $19,879,000
===========
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
AMERICAN GAS INDEX FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED SEPTEMBER 30,
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES
Net Investment Income............................ $ 3,746,075 $ 3,818,345
Net Realized Loss on Investments................. (3,023,029) (5,073,405)
Net Change in Unrealized Appreciation of
Investments..................................... 19,155,954 1,214,567
------------ ------------
Net Increase (Decrease) in Net Assets Resulting
from Operations................................. 19,879,000 (40,493)
DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income (Note 1).............. (3,797,575) (3,788,874)
From Realized Gain on Investments................ -- --
FROM SHARE TRANSACTIONS (Note 4)................... (16,873,174) (13,121,318)
------------ ------------
Net Decrease in Net Assets....................... (791,749) (16,950,685)
NET ASSETS--Beginning of Period.................... 188,543,903 209,036,416
------------ ------------
NET ASSETS--End of Period.......................... $187,752,154 $192,085,731
============ ============
</TABLE>
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
7
<PAGE>
- --------------------------------------------------------------------------------
AMERICAN GAS INDEX FUND, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEAR ENDED MARCH 31,
SEPTEMBER 30, -----------------------------------
1995 1995 1994 1993 1992
------------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net Asset Value--Beginning
of Period................ $ 11.13 $ 11.08 $ 12.17 $ 9.45 $ 10.20
------- ------- ------- ------- -------
Net Investment Income..... 0.231 0.440 0.410 0.407 0.472
Net Realized and
Unrealized Gains (Losses)
on Securities............ 0.993 0.050 (1.031) 2.853 (0.758)
------- ------- ------- ------- -------
Net Increase (Decrease) in
Net Asset Value Resulting
from Operations.......... 1.224 0.490 (0.621) 3.260 (0.286)
Dividends to Shareholders. (0.234) (0.440) (0.406) (0.410) (0.464)
Distributions to
Shareholders from Net
Realized Capital Gain.... -- -- (0.063) (0.130) --
------- ------- ------- ------- -------
Net Increase (Decrease) in
Net Asset Value.......... 0.99 0.05 (1.09) 2.72 (0.75)
------- ------- ------- ------- -------
Net Asset Value--End of
Period................... $ 12.12 $ 11.13 $ 11.08 $ 12.17 $ 9.45
======= ======= ======= ======= =======
Total Investment ReturnA.... 11.11% 4.72% (5.37)% 35.38% (2.89)%
Ratios to Average Net
Assets:
Expenses Less
Reimbursement from
Adviser.................. 0.85%B 0.85% 0.84% 0.85% 0.85%
Expenses Before
Reimbursement from
Adviser.................. 0.85%B 0.85% 0.84% 0.85% 0.87%
Net Investment Income..... 3.96%B 4.04% 3.33% 3.82% 4.73%
Supplementary Data:
Portfolio Turnover Rate... 3.3% 8.5% 11.4% 21.5% 30.2%
Number of Shares
Outstanding at End of
Period (000's omitted)... 15,488 16,941 18,858 17,708 13,669
</TABLE>
- --------
A Total Investment Return for periods of less than one year are not annualized.
B Annualized.
See Notes to Financial Statements.
- --------------------------------------------------------------------------------
8
<PAGE>
- -------------------------------------------------------------------------------
AMERICAN GAS INDEX FUND, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
1. SIGNIFICANT ACCOUNTING POLICIES
American Gas Index 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 following is a summary of significant
accounting policies which the Fund follows.
(a) Securities listed on stock exchanges are valued at the last sales
price of the applicable exchange. Over-the- Counter securities are valued
at the last sales price. If market quotations are not readily available,
the Board of Directors will value the Fund'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 transactions are computed on an identified cost
basis.
(c) Net investment income is computed, and dividends are declared
quarterly. Dividends are reinvested in additional shares unless
shareholders request payment in cash. Generally short-term capital gains
are distributed quarterly and 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.
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
Fund pays a fee for such services at an annual rate of 0.40% of the average
daily net assets of the Fund.
Rushmore Trust and Savings, FSB ("Trust"), a majority owned subsidiary of
the Adviser, provides transfer agency, dividend-disbursing and shareholder
services to the Fund. In addition, the Trust serves as custodian of the Fund's
assets and pays the operating expenses of the Fund. For these services the
Trust receives an annual fee of 0.35% of the average daily net assets of the
Fund.
The American Gas Association, (A.G.A.), serves as administrator for the
Fund. As administrator, A.G.A. calculates and maintains the Index and provides
the Fund with information concerning the natural gas industry. For these
services the Fund pays a fee at an annual rate of 0.10% of the average daily
net assets of the Fund.
3. SECURITIES TRANSACTIONS
For the six months ended September 30, 1995, purchases of securities were
$6,096,733, and sales of securities were $20,200,268. These totals exclude
short-term securities.
- -------------------------------------------------------------------------------
9
<PAGE>
- -------------------------------------------------------------------------------
AMERICAN GAS INDEX FUND, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
4. SHARE TRANSACTIONS
On September 30, 1995, there were 1,000,000,000 shares of $0.001 par value
capital stock authorized. Transactions in shares of the Fund for the six
months ended September 30, 1995 were as follows:
<TABLE>
<CAPTION>
Shares Dollars
---------- ------------
<S> <C> <C>
Shares Sold.......................................... 818,487 $ 9,538,177
Shares Issued in Reinvestment of Dividends........... 271,409 3,224,128
---------- ------------
1,089,896 12,762,305
Shares Redeemed...................................... (2,543,470) (29,635,479)
---------- ------------
(1,453,574) $(16,873,174)
========== ============
</TABLE>
5. NET UNREALIZED APPRECIATION OF INVESTMENTS
As of September 30, 1995, net unrealized appreciation of investments for
Federal income tax purposes was $29,513,912 of which $35,102,470 related to
appreciated investments and $5,588,558 related to depreciated investments. At
September 30, 1995 the cost of the Fund's securities for Federal income tax
purposes was $158,055,472.
6. NET ASSETS
At September 30, 1995 net assets consisted of the following:
<TABLE>
<S> <C>
Paid-in Capital................................................... $170,583,279
Net Unrealized Appreciation of Investments........................ 31,916,141
Accumulated Realized Loss on Investments.......................... (14,839,696)
Undistributed Net Investment Income............................... 92,430
------------
NET ASSETS........................................................ $187,752,154
============
</TABLE>
7. CAPITAL LOSS CARRYOVERS
At March 31, 1995, for Federal income tax purposes, the Fund 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>
<CAPTION>
Expires March 31,
- -----------------
<S> <C>
2001.............................................................. $ 2,568,466
2002.............................................................. $ 1,036,137
2003.............................................................. $ 8,212,064
-----------
Total........................................................... $11,816,667
===========
</TABLE>
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10
<PAGE>
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<PAGE>
AMERICAN
GAS
INDEX
FUND
- --------------------------------------------------------------------------------
SEMIANNUAL REPORT
SEPTEMBER 30, 1995
[RECYCLED PAPER LOGO APPEARS HERE]
[LOGO OF RUSHMORE APPEARS HERE]
[PRINTED WITH SOY INK LOGO APPEARS HERE]
