NAIC GROWTH FUND, INC.
Annual Report
December 31, 1998
Report to Shareowners:
December 31, 1998
This past year was a bit unusual as many market observers felt
another record year could not be recorded in 1998 and yet the Dow Jones
Industrial Average again scored a double-digit increase. Most of the
advances were seen in the large cap companies as medium and small cap
stocks did not perform as well. In fact, more stocks finished the year
at lower prices than those with higher prices on both the NYSE and
NASDAQ. Still, 1998 was a year that probably rewarded those who
continued to hold high quality issues rather than time sales and
purchases. That is primarily the policy followed by the Fund managers.
During the year, the Net Asset Value went from $10.99 to close on
December 31 at $12.48. When adjusted for the dividends paid in 1998,
the increase in NAV was 18.8%. The dividend payments for the year were
$0.578 and that is 24% above 1997, including regular income and capital
gains.
Two stocks were sold because they were being purchased by other
companies, Dynatech Corp. and ALLIED Group. Three other stocks were
sold because of small positions in each Nielsen Media, Solutia, Inc.
and Tricon Global Restaurants. All had been received by the Fund as a
result of spin-offs from other stocks held. It was felt that they were
not significant in the dollar amount of shares held and that they
probably would not be added to at any time in the near future. The
final sale was 2,000 shares of McDonalds. The Fund still owns 4,000
shares of the fast food chain.
Purchases during the year included 1,000 Dallas Semiconductor
bringing our total to 6,000 shares; 5,000 Diebold, a new holding; 4,000
EMC Corporation, a new holding; 5,000 Federal Signal to make a total of
10,000 shares; 3,000 Intel, a new holding; 6,000 Invacare, a new
holding; 3,313 Molex, Inc. for a combined holding of 8,000 shares;
2,000 OReilly Automotive with a new total of 6,000; 1,000 Stryker
Corp. with 7,000 now being held and 2,267 Vishay Intertechnology to
bring the total to 15,000.
A total of 85% of the dividend paying stocks held by the Fund
increased the cash dividend during the year. That is normally an
indication that the boards of directors of those companies are positive
about the future.
We feel that 1999 will be challenging as market observers again
feel earnings gains will not be as robust as in past years. At the
same time, we think we are well positioned with our portfolio. While
we have little control over market fluctuations over the short period,
we are confident that earnings progress will continue to be made by our
holdings in the long term.
Thomas E. O'Hara, Chairman Kenneth S. Janke, President
NAIC Growth Fund, Inc.
Statement of Assets and Liabilities
As of December 31, 1998
ASSETS
Investment securities
at market value (cost $7,014,993) $18,601,559
Short-term investments
at amortized cost 2,198,562
Cash and cash equivalents 743,852
Dividends and interest receivable 22,250
Prepaid insurance 9,917
21,576,140
LIABILITIES
Dividends payable 842,972
Accounts payable 31,993 874,965
TOTAL NET ASSETS $20,701,175
SHAREHOLDERS' EQUITY
Common Stock par value $0.001 per share;
authorized 50,000,000 shares,
outstanding 1,659,394 shares $ 1,659
Additional Paid-in Capital 9,101,805
Undistributed net investment income 11,145
Undistributed net realized gain
on investments 0
Unrealized appreciation of investments 11,586,566
SHAREHOLDERS' EQUITY $20,701,175
NET ASSET VALUE PER SHARE $ 12.48
See notes to financial statements
NAIC Growth Fund, Inc.
Statement of Operations
For the year ended December 31, 1998
INVESTMENT INCOME
Interest $ 111,437
Dividends 265,735
377,172
EXPENSES
Advisory fees 143,534
Transfer agent & custodian fees 39,307
Insurance 18,528
Audit fees 14,600
Directors' fees & expenses 11,779
Legal fees 9,616
Annual shareholders meeting 9,102
Printing 7,819
Mailing & postage 4,808
Other fees & expenses 8,698
Less: Advisory fees waived (107,651)
Net Expenses 160,140
Net investment income 217,032
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Realized gain on investments:
Proceeds from sale of investment securities 1,048,554
Cost of investment securities sold 297,861
Net realized gain on investments 750,693
Unrealized appreciation of investments:
Unrealized appreciation at beginning of year 9,342,727
Unrealized appreciation at end of year 11,586,566
Increase in unrealized appreciation on investments 2,243,839
Net realized and unrealized gain on investments 2,994,532
NET INCREASE FROM OPERATIONS $ 3,211,564
See notes to financial statements
NAIC Growth Fund, Inc.
Statements of Changes in Net Assets
For the years ended:
December 31, 1998 December 31, 1997
FROM OPERATIONS:
Net investment income $217,032 $150,230
Net realized gain on investments 750,693 577,028
Net change in unrealized appreciation
on investments 2,243,839 2,816,174
Net increase from operations 3,211,564 3,543,432
DISTRIBUTIONS TO STOCKHOLDERS FROM:
Net investment income 206,409 155,619
Net realized gain from investment
Transactions 750,693 577,028
Total distributions 957,102 732,647
FROM CAPITAL STOCK TRANSACTIONS:
Dividend reinvestment 538,333 423,948
Cash purchases 573,075 612,787
Net increase from capital stock
Transactions 1,111,408 1,036,735
Net increase in net assets 3,365,870 3,847,520
TOTAL NET ASSETS:
Beginning of year $17,335,305 $13,487,785
End of year (including undistributed
net investment income of $11,145
and $522, respectively) $20,701,175 $17,335,305
Shares:
Shares issued to common stockholders under
the dividend reinvestment and cash
purchase plan 82,406 89,346
Shares at beginning of year 1,576,988 1,487,642
Shares at end of year 1,659,394 1,576,988
See notes to financial statements
NAIC Growth Fund, Inc.
Financial Highlights
For the years ended:
1998 1997 1996 1995 1994
Net asset value at beginning of year $10.99 $9.07 $7.60 $5.75 $5.62
Net investment income .14 .10 .10 .08 .05
Net realized and unrealized gain
on investments 1.93 2.29 1.75 1.91 .13
Total from investment operations 2.07 2.39 1.85 1.99 .18
Distributions from:
Net investment income (.13) (.10) (.10) (.08) (.05)
Realized gains (.45) (.37) (.28) (.06) .00
Total distributions (.58) (.47) (.38) (.14) (.05)
Net asset value at end of year $12.48 $10.99 $9.07 $7.60 $5.75
Per share market value,
end of year Ask 10 3/4 15 1/4 9 3/4 7 1/8 4 3/4
Bid 10 1/4 14 1/2 9 7/16 6 7/8 4 11/16
Total Investment Return:
based on market value
1 year (25.42%) 58.50% 42.94% 49.70% (0.54%)
from inception 11.30% 17.84% 12.59% 7.85% 0.27%
based on net asset value
1 year 18.84% 26.43% 24.46% 34.60% 3.12%
from inception 13.79% 13.69% 11.92% 9.78% 4.92%
Net Assets, end of year (mil) $20,701.2 $17,335.3 $13,487.8 $10,989.1 $8,316.6
Ratios to average net assets:
Ratio of expenses to average
net assets (a) 0.83% 0.96% 0.96% 1.19% 1.81%
Ratio of net investment
income to average net assets (a) 1.13% 0.96% 1.10% 1.16% 0.77%
Portfolio turnover rate 5.87% 6.31% 5.93% 6.90% 6.56%
(a) For all years presented, the adviser voluntarily waived its fee.
Had the adviser not done so in 1998, 1997, 1996, 1995 and 1994, the
ratio of expenses to average net assets would have been 1.39%, 1.69%,
1.68%, 1.94% and 2.00% and the ratio of net investment income to
average net assets would have been 0.57%, 0.23%, 0.38%, 0.41% and
0.58%, respectively.
See notes to financial statements
NAIC Growth Fund, Inc.
Portfolio of Investments - December 31, 1998
% Common Stock Shares Cost Market
1.7 Agriculture
Monsanto 7,500 65,339 356,250
2.2 Auto Replacement
Dana Corp. 4,000 53,250 163,500
O Reilly Automotive * 6,000 140,375 283,500
8.3 Banking
Citigroup 10,000 79,167 496,875
Comerica, Inc. 3,000 58,750 204,563
Bank One Corp. 3,240 64,750 165,443
Huntington Banc. 14,527 91,086 436,718
Synovus Financial 16,875 81,125 405,000
2.5 Building Products
Clayton Homes 12,500 131,981 172,656
Johnson Controls 6,000 96,895 354,000
2.7 Chemicals
OM Group, Inc. 6,000 195,562 219,000
RPM 12,500 119,125 200,000
Sigma Aldrich 5,000 94,938 146,875
3.4 Computers
EMC Corp. * 4,000 116,000 340,000
IBM 2,000 99,387 368,750
3.2 Consumer Products
Colgate-Palmolive 4,000 98,500 371,500
Newell Co. 7,000 153,000 288,750
5.1 Electrical Equipment
CBS Corp. 5,000 102,437 164,063
Federal Signal 10,000 239,813 273,750
General Electric 4,000 56,000 408,000
Vishay Intertech. * 15,000 165,456 217,500
2.2 Electronics
Diebold 5,000 138,687 178,437
Molex, Inc. 8,000 184,478 273,750
13.3 Ethical Drugs
Amer. Home Prod. 6,000 90,510 338,250
Bristol-Myers Squibb 3,000 106,538 401,438
Eli Lilly 6,000 91,688 533,250
Johnson & Johnson 2,000 45,500 167,750
Merck & Co., Inc. 2,500 83,319 368,750
Pfizer, Inc. 4,000 58,750 500,000
Pharmicia & Upjohn 7,975 200,070 451,584
6.6 Financial Services
Household Intl. 27,266 242,847 1,080,415
State Street Boston 4,000 75,500 280,500
3.0 Food
ConAgra 6,000 78,125 189,000
Heinz, H.J. 3,000 67,250 169,875
McCormick & Co. 8,000 168,850 270,500
1.5 Grocery
Hannaford Bros. 6,000 138,562 318,000
5.1 Hospital Supplies
Biomet Corp. 7,000 122,250 281,750
IMS Health Inc. 1,500 33,236 113,156
Invacare 6,000 152,500 144,000
Stryker Corp. 7,000 160,063 385,437
St. Jude Medical* 4,500 100,125 125,437
0.6 Industrial Services
Donaldson Co. 6,000 37,588 124,500
0.6 Instruments
TSI, Inc. 15,000 48,375 131,250
4.0 Insurance
AFLAC, Inc. 7,500 51,875 329,063
Amer. Intl. Group 5,062 79,044 489,116
2.6 Machinery
Cooper Industries 3,500 129,018 166,906
Emerson Electric Co. 6,000 113,518 363,000
2.5 Multi Industry
Pentair 3,000 23,875 119,437
Teleflex 6,000 145,187 273,750
Thermo Electron * 6,750 106,687 114,328
0.8 Office Equipment
American Bus. Prod. 7,000 158,000 164,500
0.9 Paper
Mead Corp. 6,000 74,144 175,875
0.4 Petroleum
Kerr McGee 2,000 95,250 76,500
1.6 Publishing
Reuters Holdings 5,199 125,351 329,487
1.5 Restaurants
McDonald's 4,000 53,625 307,250
2.9 Semiconductor
Dallas Semiconductor 6,000 138,438 244,500
Intel 3,000 228,563 355,688
3.7 Soft Drinks
Coca Cola 4,000 82,250 268,000
PepsiCo 12,000 205,374 490,500
2.6 Telecommunications
ADC Telecom. * 9,000 21,234 312,750
Cincinnati Bell 6,000 55,250 226,875
1.3 Transportation
Sysco Corp. 10,000 142,750 274,375
2.4 Utilities
Century Telephone 7,500 140,625 506,250
0.7 Water Treatment
Ionics * 5,000 117,188 149,687
89.9 $7,014,993 $18,601,559
Short-term Investments
10.6 United States Treasury Bill,
maturing 1/7/99 2,198,562
3.6 Misc. Cash Equivalents 743,852
14.2 2,942,414
Total Investments 21,543,973
(4.1) All other assets less liabilities (842,798)
100.0% Total Net Assets $20,701,175
_ non-income producing security
NAIC Growth Fund, Inc.
Notes to Financial Statements
(1) ORGANIZATION
The NAIC Growth Fund, Inc. (the "Fund") was organized under Maryland
law on April 11, 1989 as a diversified closed-end investment company
under the Investment Company Act of 1940. The Fund commenced
operations on July 2, 1990.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies
followed by the Fund not otherwise set forth in the notes to financial
statements:
Dividends and Distributions Dividends from the Fund's net investment
income and realized net long- and short-term capital gains will be
declared and distributed at least annually. Shareholders may elect to
participate in the Dividend Reinvestment and Cash Purchase Plan (see
Note 4).
Investments Investments in equity securities are stated at market
value, which is determined based on quoted market prices or dealer
quotes. Pursuant to Rule 2a-7 of the Investment Company Act of 1940,
the Fund utilizes the amortized cost method to determine the carrying
value of short-term debt obligations. Under this method, investment
securities are valued for both financial reporting and Federal tax
purposes at amortized cost. Any discount or premium is amortized from
the date of acquisition to maturity. Investment security purchases
and sales are accounted for on a trade date basis.
Use of Estimates The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Federal Income Taxes The Fund intends to comply with the general
qualification requirements of the Internal Revenue Code applicable to
regulated investment companies. The Fund intends to distribute at
least 90% of its taxable income, including net long-term capital gains,
to its shareholders. In order to avoid imposition of the excise tax
applicable to regulated investment companies, it is also the Fund's
intention to declare as dividends in each calendar year at least 98% of
its net investment income and 98% of its net realized capital gains
plus undistributed amounts from prior years.
The following information is based upon Federal income tax cost of
portfolio investments as of December 31, 1998:
Gross unrealized appreciation $ 11,613,816
Gross unrealized depreciation (27,250)
Net unrealized appreciation $ 11,586,566
Federal income tax cost $ 7,014,993
Expenses The Fund's service contractors bear all expenses in
connection with the performance of their services. The Fund bears all
expenses incurred in connection with its operations including, but not
limited to, management fees (as discussed in Note 3), legal and audit
fees, taxes, insurance, shareholder reporting and other related costs.
Such expenses will be charged to expense daily as a percentage of net
assets. The Advisory Agreement provides that the Fund may not incur
annual aggregate expenses in excess of two percent (2%) of the first
Ten Million Dollars of the Funds average net assets, one and one-half
percent (1 1/2%) of the next Twenty Million Dollars of the average net
assets, and one percent (1%) of the remaining average net assets for
any fiscal year. Any excess expenses shall be the responsibility of
the Investment Adviser, and the pro rata portion of the estimated
annual excess expenses will be offset against the Investment Advisers
monthly fee. A director of the Fund is of counsel to the Fund's legal
counsel. Legal counsel has incurred $9,616 for ongoing legal services
during the year.
(3) MANAGEMENT ARRANGEMENTS
Investment Adviser National Association of Investors Corporation
(NAIC) serves as the Fund's Investment Adviser subject to the
Investment Advisory Agreement, and is responsible for the management of
the Fund's portfolio, subject to review by the board of directors of
the Fund. For the services provided under the Investment Advisory Agreement,
the Investment Adviser receives a monthly fee at an annual rate of three-
quarters of one percent (0.75%) of the average weekly net asset value
of the Fund, during the times when the average weekly net asset value
is at least $3,800,000. The Investment Adviser will not be entitled to
any compensation for a week in which the average weekly net asset value
falls below $3,800,000. The Adviser has voluntarily waived $107,651 of
its total fee of $143,534 for the year ended 1998.
Plan Agent Michigan National Bank (MNB) serves as the Funds
custodian pursuant to the Custodian Agreement. As the Fund's
custodian, MNB receives fees and compensation of expenses for services
provided including, but not limited to, an annual account charge,
annual security fee, security transaction fee and statement of
inventory fee. Boston EquiServe
serves as the Fund's transfer agent and dividend disbursing agent
pursuant to Transfer Agency and Dividend Disbursement Agreements.
Boston EquiServe receives fees for services provided including, but not
limited to, account maintenance fees, activity and transaction
processing fees and reimbursement of out-of-pocket expenses such as
forms and mailing costs.
(4) DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
The Fund has a Dividend Reinvestment and Cash Purchase Plan (the
"Plan") which allows shareholders to reinvest dividends paid and make
additional contributions. Under the Plan, if on the valuation date the
net asset value per share is lower than the market price at the close
of trading on that day, then the Plan Agent will elect on behalf of the
shareholders who are participants of the Plan to take the dividends in
newly issued shares of the Fund's common stock. If net asset value
exceeds the market price on the valuation date, the Plan Agent will
elect to receive cash dividends, and will promptly buy shares of the
Fund's common stock on whatever market is consistent with best price
and execution. The number of shares credited to each shareholder
participant's account will be based upon the average purchase price for
all shares purchased.
(5) DISTRIBUTIONS TO SHAREHOLDERS
On May 14, 1998, a distribution of $0.07 per share aggregating $114,130
was declared from net investment income. The dividend was paid August
3, 1998, to shareholders of record June 30, 1998. On December 3, 1998,
a distribution of $0.508 per share aggregating $842,972 was declared
from net investment income and capital gains. the dividend was paid
January 29, 1999 to shareholders of record December 31, 1998.
(6) Investment transactions
Purchases and sales of securities, other than short-term securities for
the year ended December 31, 1998, were $1,004,988 and $297,861,
respectively.
(7) FINANCIAL HIGHLIGHTS
The Financial Highlights present a per share analysis of how the Fund's
net asset value has changed during the years presented. Additional
quantitative measures expressed in ratio form analyze important
relationships between certain items presented in the financial
statements. These Financial Highlights have been derived from the
financial statements of the Fund and other information for the years
presented. The Total Investment Return based on market value assumes
that shareholders bought into the Fund at the bid price and sold out of
the Fund at the bid price. In reality, shareholders buy into the Fund
at the ask price and sell out of the Fund at the bid price. Therefore,
actual returns may differ from the amounts stated.
Report of Independent Public Accountants
To the Board of Directors and Shareholders of NAIC Growth Fund, Inc.:
We have audited the accompanying statement of assets and
liabilities of NAIC GROWTH FUND, INC. (a Maryland corporation),
including the portfolio of investments, as of December 31, 1998, 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 five
years in the period then ended. 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 December 31, 1998, 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 NAIC Growth Fund, Inc. as of December 31, 1998,
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 five years in the period then
ended in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Detroit, Michigan,
January 7, 1999.
NAIC Growth Fund, Inc.
Dividends and Distributions: Dividend Reinvestment and Cash
Purchase Plan
We invite you to join the Dividend Reinvestment and Cash Purchase
Plan (the Plan), which is provided to give you easy and economical
ways of increasing your investment in the Funds shares. THOSE
SHAREHOLDERS WHO HAVE ELECTED TO PARTICIPATE IN THE PLAN NEED NOT DO
ANYTHING FURTHER TO MAINTAIN THEIR ELECTION.
Boston EquiServe will act as the Plan Agent on behalf of
shareholders who are participants in the Plan.
All shareholders of the Fund (other than brokers and nominees of
financial institutions) who have not previously elected to participate
in the Plan or who have terminated their election may elect to become
participants in the Plan by filling in and signing the form of
authorization obtainable from Boston EquiServe, P.O. Box 8200, Boston,
Massachusetts 02266, the transfer agent for the Funds shares and the
shareholders agent for the Plan, and mailing it to Boston EquiServe.
The authorization must be signed by the registered shareholders of an
account. Participation is voluntary and may be terminated or resumed at
any time upon written notice from the participant received by the Plan
Agent prior to the record date of the next dividend. Additional
information regarding the election may be obtained from the Fund.
Dividend payments and other distributions to be made by the Fund
to participants in the Plan either will be paid to the Plan Agent in
cash (which then must be used to purchase shares in the open market)
or, will be represented by the delivery of shares depending upon which
of the two options would be the most favorable to participants, as
hereafter determined. On each date on which the Fund determines the net
asset value of the shares (a Valuation Date), and which occurs not more
than five business days prior to a date fixed for payment of a dividend
or other distribution from the Fund, the Plan Agent will compare the
determined net asset value per share with the market price per share.
For all purposes of the Plan, market price shall be deemed to be the
highest price bid at the close of the market by any market maker on the
date which coincides with the relevant Valuation Date, or, if no bids
were made on such date, the next preceding day on which a bid was made.
The market price was $10 1/2 on December 31, 1998. If the net asset
value in any such comparison is found to be lower than said market
price, the Plan Agent will demand that the Fund satisfy its obligation
with respect to any such dividend or other distribution by issuing
additional shares to the Participants in the Plan at a price per share
equal to the greater of the determined net asset value per share or
ninety-five percent (95%) of the market price per share determined as of the
close of business on the relevant Valuation Date. However, if the net asset
value per share (as determined above) is higher than the market price
per share, then the Plan Agent will demand that the Fund satisfy its
obligation with respect to any such dividend or other distribution by a
cash payment to the Plan Agent for the account of Plan participants and
the Plan Agent then shall use such cash payment to buy additional
shares in the open market for the account of the Plan participants,
provided, however, that the Plan Agent shall not purchase shares in the
open market at a price in excess of the net asset value as of the
relevant Valuation Date. In the event the Plan Agent is unable to
complete its acquisition of shares to be purchased in the open market
by the end of the first trading day following receipt of the cash
payment from the Fund, any remaining funds shall be used by the Plan
Agent to purchase newly issued shares of the Funds common stock from
the Fund at the greater of the determined net asset value per share or
ninety-five percent (95%) of the market price per share as of the date
coinciding with or next preceding the date of the relevant Valuation
Date.
Participants in the Plan will also have the option of
making additional cash payments to the Plan Agent, on a monthly basis,
for investment in the Funds shares. Such payments may be made in any
amount from a minimum of $50.00 to a maximum of $1,000.00 per month.
The Fund may, in its discretion, waive the maximum monthly limit with
respect to any participant. At the end of each calendar month, the Plan
Agent will determine the amount of funds accumulated. Purchases made
from the accumulation of payments during any one calendar month will be
made on or about the first business day of the following month
(Investment Date). The funds will be used to purchase shares of the
Funds common stock from the Fund if the net asset value of the shares
is lower than the market price as of the Valuation Date which occurs
not more than five business days prior to the relevant Investment Date.
In such case, such shares will be newly issued shares and will be
issued at a price per share equal to the greater of the determined net
asset value per share or ninety-five percent (95%) of the market price
per share. If the net asset value per share is higher than the market
price per share, then the Plan Agent shall use such cash payments to
buy additional shares in the open market for the account of the Plan
participants, provided, however, that the Plan Agent shall not purchase
shares in the open market at a price in excess of the net asset value
as of the relevant Valuation Date. In the event the Plan Agent is
unable to complete its acquisition of shares to be purchased in the
open market by the end of the Investment Date, any remaining cash
payments shall be used by the Plan Agent to purchase newly issued
shares of the Funds common stock from the Fund at the greater of the
determined net asset value per share or ninety-five (95%) percent of
the market price per share as of the relevant Valuation Date. All cash
payments received by the Plan Agent in connection with the Plan will be
held without earning interest. To avoid unnecessary cash accumulations, and
also to allow ample time of receipt and processing by the Plan Agent,
participants that wish to make voluntary cash payments should send such
payments to the Plan Agent in such a manner that assures that the Plan
Agent will receive and collect Federal Funds by the end of the month.
This procedure will avoid unnecessary accumulations of cash and will
enable participants to realize lower brokerage commissions and to avoid
additional transaction charges. If a voluntary cash payment is not
received in time to purchase shares in any calendar month, such payment
shall be invested on the next Investment Date. A participant may
withdraw a voluntary cash payment by written notice to the Plan Agent
if the notice is received by the Plan Agent at least forty-eight hours
before such payment is to be invested by the Plan Agent.
Boston EquiServe as the Plan Agent will perform bookkeeping and
other administrative functions, such as maintaining all shareholder
accounts in the Plan and furnishing written confirmation of all
transactions in the account, including information needed by
shareholders for personal and tax records. Shares in the account of
each Plan participant will be held by the Plan Agent in noncertificated
form in the name of the participant, and each shareholders proxy will
include those shares purchased pursuant to the Plan and of record as of
the record date for determining those shareholders who are entitled to
vote on any matter involving the Fund. In case of shareholders such as
banks, brokers or nominees, which hold shares for others who are the
beneficial owners, the Plan Agent will administer the Plan on the basis
of the number of shares certified from time to time by such
shareholders as representing and limited to the total number of shares
registered in the shareholders name and held for the account of
beneficial owners who have elected to participate in the Plan.
There are no special fees or charges to participants other than
reasonable transaction fees and a termination fee of up to one ($1.00)
dollar.
With respect to purchases from voluntary cash payments, the Plan
Agent will charge a pro rata share of the brokerage commissions, if
any. Brokerage charges for purchasing small blocks of stock for
individual accounts through the Plan are expected to be less than the
usual brokerage charges for such transactions, as the Plan Agent will
be purchasing shares for all participants in larger blocks and
prorating the lower commission rate thus applied.
The automatic reinvestment of dividends and distributions will
not relieve participants of any income tax liability associated
therewith.
Contents
Report to Shareowners 2
Statement of Assets and Liabilities 3
Statement of Operations 4
Statements of Changes in Net Assets 5
Financial Highlights 6
Portfolio of Investments 7
Notes to Financial Statements 10
Auditors Report 13
Dividends and Distributions 14
NAIC Growth Fund, Inc., Board of Directors 18
Shareholder Information 18
NAIC Growth Fund, Inc.
Board of Directors
Thomas E. O'Hara
Chairman,
Bloomfield Hills, MI
Lewis A. Rockwell
Secretary,
Grosse Pointe Shores, MI
Carl A. Holth
Director,
Clinton Twp., MI
Kenneth S. Janke
President,
Bloomfield Hills, MI
Benedict J. Smith
Director,
Birmingham, MI
James M. Lane
Director,
Grosse Pointe Farms, MI
Peggy L. Schmeltz
Director,
Bowling Green, OH
Cynthia P. Charles
Director,
Ambler, PA
Shareholder Information
The ticker symbol for the NAIC Growth Fund, Inc., on the Chicago Stock
Exchange is GRF.
The dividend reinvestment plan allows shareholders to automatically
reinvest dividends in Fund common stock without paying commission.
Once enrolled, you can make additional stock purchases through monthly
cash deposits ranging from $50 to $1,000. For more information,
request a copy of the Dividend Reinvestment Service for Stockholders of
NAIC Growth Fund, Inc., from Boston EquiServe, P.O. Box 8200, Boston,
Massachusetts 02266. Telephone 1-800-257-1770.
Questions about dividend checks, statements, account consolidation,
address changes, stock certificates or transfer procedures write Boston
EquiServe, P.O. Box 8200, Boston, Massachusetts 02266. Telephone 1-
800-257-1770.
Shareholders or individuals wanting general information or having
questions, write NAIC, P.O. Box 220, Royal Oak, Michigan 48068.
Telephone 248-583-6242 Ext. 322.
