<PAGE> 1
ASM FUND, INC.
Tampa, Florida
Semi Annual Financial Statements
For the Six Months Ended April 30, 1996
Table of Contents
Page
----
President's Letter ....................................................... 1
Schedule of Investments in Securities .................................... 2,3
Statement of Assets and Liabilities ...................................... 4
Statement of Operations .................................................. 5
Statements of Changes in Net Assets ...................................... 6
Selected Per Share Data and Ratios ....................................... 7
Notes to Financial Statements ............................................ 8-10
<PAGE> 2
Dear ASM Fund Shareholder,
In my last two letters to shareholders I spoke of the favorable factors
that appeared in the stock market. Conventional wisdom at the end of last year
was pessimistic. Some professionals expressed a view that in 1996 we could not
enjoy a strong year after the market's performance in 1995. We did not agree. so
far this year, the large companies in which our Fund invests are continuing to
provide impressive returns.
The Fund believes this results from several factors. These include the
continued increase in corporate earnings and the positive estimates anticipated
for such earnings through 1997. We feel that the business diversification of
the thirty companies in our portfolio has benefited from the expanding global
economy and that the United States has improved its competitive position around
the world resulting in growth opportunities for our investments.
There have been several stock splits this year. Since we hold equal shares
in the portfolio, a split reduces the exposure to the higher priced stocks.
This has the effect of making the portfolio more efficiently diversified and
conservative.
We have noted that the average dividends for the Dow companies are at a
relatively low level. Many stock market observers consider this a bad sign for
future stock prices. We disagree. For the most part the companies in which we
invest are utilizing their cash to grow and to buy back their own stock instead
of paying dividends. We welcome these actions and believe this is a reflection
of their confidence in their businesses. We share that confidence.
Relative lack of volatility is also a reward for investing in
well-established companies. The recent extreme changes in prices in certain
sectors remind us of the difference between long-term investing and
speculating. Staying to our course of investing in the thirty companies that
make up the "Dow" should continue to be rewarding.
Very truly yours,
Steven H. Adler
President
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ASM FUND, INC.
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% of Total
Net Assets Shares Value
------------ ------------ ------------
<S> <C> <C> <C> <C>
Common Stocks-- 97.2%
Aerospace 9.70%
Boeing Company 4,755 390,504
United Technologies Corp. 4,755 525,428
-----------
915,932
-----------
Auto and Truck 2.70%
General Motors Corporation 4,755 257,959
-----------
Banking 4.20%
J. P. Morgan & Co., Inc. 4,755 400,014
-----------
Beverage 4.10%
Coca-Cola Company 4,755 387,532
-----------
Chemical 6.40%
E. I. DuPont de Nemours & Co. 4,755 382,183
Union Carbide Corporation 4,755 216,352
-----------
598,535
-----------
Consumer Products 4.30%
Proctor & Gamble Company 4,755 401,798
-----------
Drugs and Hospital Supplies 3.10%
Merck & Co., Inc. 4,755 287,678
-----------
Electrical Equipment 4.90%
General Electric Corp. 4,755 368,513
Westinghouse Electric Corp. 4,755 89,751
-----------
458,264
-----------
Entertainment and Leisure 3.10%
Walt Disney Company 4,755 294,810
-----------
Financial Services 2.50%
American Express Company 4,755 230,618
-----------
Machinery 3.20%
Caterpillar, Inc. 4,755 304,320
-----------
Metals and Mining 3.10%
Aluminum Company of America 4,755 296,593
-----------
</TABLE>
page 2
<PAGE> 4
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ASM FUND, INC.
PORTFOLIO OF INVESTMENTS, (CONTINUED)
APRIL 30, 1996 (UNAUDITED)
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<TABLE>
<CAPTION>
% of Total
Net Assets Shares Value
------------- ------------- -----------
<S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
Office Equipment 5.40%
International Business Machines 4,755 $ 511,163
-----------
Oil-International 11.50%
Chevron Corporation 4,755 275,790
Exxon Corporation 4,755 404,175
Texaco, Inc. 4,755 406,553
-----------
1,086,518
-----------
Paper 2.00%
International Paper Company 4,755 189,606
-----------
Photography 3.90%
Eastman Kodak Co. 4,755 363,757
-----------
Restaurant 2.40%
McDonald's Corp. 4,755 227,645
-----------
Retail 3.50%
Sears, Roebuck & Company 4,755 237,156
Woolworth Corp. (A) 4,755 90,939
-----------
328,095
Steel 0.70%
Bethlehem Steel Corp. (A) 4,755 64,787
-----------
Telecommunications 3.10%
American Telephone & Telegraph Co. 4,755 291,244
-----------
Tire and Rubber 2.60%
Goodyear Tire & Rubber 4,755 247,854
-----------
Tobacco 4.50%
Philip Morris Companies, Inc. 4,755 428,544
-----------
Diversified 6.30%
Allied-Signal, Inc. 4,755 276,384
Minnesota Mining & Manufacturing Co. 4,755 312,641
-----------
589,025
-----------
Total common stocks (cost - $9,202,750) 97.20% 9,162,291
Other assets less liabilities 2.80% 260,966
------------- -----------
TOTAL NET ASSETS 100.00% $ 9,423,257
============= ===========
</TABLE>
(A) Non-income producing security
See accompanying Notes to Financial Statements. page 3
<PAGE> 5
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ASM FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
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<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at market value
(cost of $9,202,750) $ 9,162,291
Cash 5,757
Receivable for securities sold 191,443
Receivable for capital stock sold 219,906
Dividends receivable 10,722
Prepaid expense 46,834
-----------
Total Assets 9,636,953
-----------
LIABILITIES:
Payable for capital stock redeemed 213,696
-----------
Total Liabilities 213,696
-----------
NET ASSETS - Equivalent to $13.14 per share
based on 716,920 shares of $.001 par
value capital stock outstanding (authorized
capital stock - 1,000,000,000 shares) $ 9,423,257
===========
NET ASSETS CONSIST OF:
Capital paid-in $ 9,878,077
Accumulated net realized loss on investments (407,209)
Net unrealized depreciation on investments (40,459)
Distributions in excess of net investment income (7,152)
-----------
NET ASSETS $ 9,423,257
===========
</TABLE>
See acompanying Notes to Financial Statements. page 4
<PAGE> 6
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ASM FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
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<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Dividends $ 153,463
Interest 10,255
-----------
Total investment income 163,718
-----------
EXPENSES:
Investment advisory fees 41,576
Legal fees 28,934
Audit fees 14,693
Custodian fees 14,924
Printing and postage 11,252
Transfer agent and accounting fees 14,520
Registration and filing fees 17,665
Amortization of organization expense 11,607
Trustee fees 2,876
Administrative fees 3,328
Other expenses 5,224
-----------
Total expenses 166,599
Less:
Reimbursement of expenses by advisor
(43,330)
-----------
Total expenses - net 123,269
-----------
Investment income - net 40,449
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain 2,189,472
Change in unrealized depreciation of investment (494,979)
-----------
Net gain on investments 1,694,493
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,734,942
===========
</TABLE>
See accompanying Notes to Financial Statements. page 5
<PAGE> 7
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ASM FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED APRIL 30, (UNAUDITED) 1996 AND YEAR ENDED OCTOBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
APRIL 30, OCTOBER 31,
1996 * 1995
--------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 40,449 $ 2,868
Net realized gain from investment transactions 2,189,472 753,136
Net change in unrealized appreciation (depreciation)
of investments (494,979) 424,306
------------ ------------
Net increase in net assets resulting from operations 1,734,942 1,180,310
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (47,601) (23,980)
Distributions in excess of net investment income -- (66,021)
------------ ------------
Total dividends and distributions (47,601) (90,001)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from shares sold 24,379,984 29,998,335
Reinvestment of dividends 42,100 81,452
Cost of redemptions (26,390,194) (28,742,989)
------------ ------------
Net increase (decrease) in net assets
resulting from capital share transactions (1,968,110) 1,336,798
------------ ------------
Total increase (decrease) in net assets (280,769) 2,427,107
NET ASSETS:
Beginning of period 9,704,026 7,276,919
------------ ------------
End of period (including accumulated net investment
loss of $7,152 in April 1996 and $0 in October 1995) $ 9,423,257 $ 9,704,026
============ ============
CHANGES IN SHARES OUTSTANDING:
Shares sold 1,878,623 2,975,479
Shares issued in connection with
payment of dividends 3,175 7,929
Shares redeemed (2,018,594) (2,873,468)
------------ ------------
Net increase (decrease) (136,796) 109,940
============ ============
</TABLE>
* Unaudited.
See accompanying Notes to Financial Statements. page 6
<PAGE> 8
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ASM FUND, INC.
FINANCIAL HIGHLIGHTS
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<TABLE>
<CAPTION>
SIX
MONTHS ENDED
APRIL 30, YEARS ENDED OCTOBER 31,
-------------------------------- ----------------
SELECTED PER SHARE DATA 1996 (D) 1995 1994 1993 1992 1991 (B)
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.37 $ 9.78 $ 10.07 $ 9.23 $8.93 $10.00
----------------------------------------------------------------------
Income (loss) from investment operations
Net investment income 0.03 - 0.56 0.43 0.26 0.09
Net gains or (losses) on securities
(both realized and unrealized) 1.77 1.77 (0.16) 0.88 0.20 (1.16)
----------------------------------------------------------------------
Total from investment operations 1.80 1.77 0.40 1.31 0.46 (1.07)
----------------------------------------------------------------------
Less distributions from
Net investment income (0.03) (0.05) (0.52) (0.47) (0.16) -
In excess of net investment income - (0.13) - - - -
Return of capital - - (0.17) - - -
----------------------------------------------------------------------
Total distributions (0.03) (0.18) (0.69) (0.47) (0.16) -
----------------------------------------------------------------------
Net asset value, end of period $ 13.14 $ 11.37 $ 9.78 $ 10.07 $ 9.23 $ 8.93
======================================================================
TOTAL RETURN 15.83% 18.10% 3.97% 14.65% 5.10% (17.74%)(A)
======================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) 9,423 9,704 7,277 17,085 6,583 1,325
Ratio of expenses to average
net assets* 1.77% (A) 3.01%** 0.75% 0.75% 0.75% 0.75% (A)
Ratio of net investment income to
average net assets* 0.58% (A) 0.04% 2.17% 3.35% 2.41% 0.97% (A)
Portfolio turnover rate *** 402% (A) 340% 1193% 642% 405% 1% (A)
Number of shares outstanding
at the end of period 716,920 853,716 743,776 1,696,044 713,816 148,399
Average commission rate (C) $0.0992
</TABLE>
* Net of expense reimbursement. If the expense reimbursement had not been in
effect, the ratio of expenses to average net assets would have been 2.40%,
5.94%, 2.55%, 2.86%, 3.91% and 26.09% for the six months ended April 30, 1996
and for the years ended 1995, 1994, 1993, 1992 and 1991, respectively, and the
ratio of net investment income to average net assets would have been 1.11% in
1993 and would not have been meaningful for the six months ended April 30, 1996
and for the years ended 1995, 1994, 1992 and 1991 because the Fund would have
incurred losses.
** Includes $50,460 of interest expense not subject to the expense
reimbursement agreement.
*** The ASM Fund continues to be as fully invested in equities as possible.
Therefore, almost all Fund portfolio turnover is a result of purchases and
sales of securities necessary for settlement of transactions requested by Fund
shareholders.
(A) Ratios are annualized.
(B) From February 13, 1991, inception of operations.
(C) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share for security trades on which
commissions are charged.
(D) Unaudited.
See accompanying Notes to Financial Statements. page 7
<PAGE> 9
ASM FUND, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996
(UNAUDITED)
ASM Fund, Inc. (the "Fund") was incorporated in Maryland on April 25, 1990 and
is registered under the Investment Company Act of 1940, as amended, as an
open-end diversified management investment company.
1. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles. Preparation of the
financial statements includes the use of management estimates.
SECURITY VALUATION
Portfolio securities are listed on a national securities exchange and are stated
at the last reported sales price on the day of valuation.
SECURITY TRANSACTIONS
The Fund records purchases of investments one business day after trade date and
sale of investments on the trade date. Realized gains and losses on sales of of
investments are calculated on the identified cost basis. Interest income is
recognized on the accrual basis, and dividend income is recorded on the
ex-dividend date.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on the ex-dividend date.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consists of cash on deposit with the custodian and
investments in repurchase agreements.
FEDERAL INCOME TAXES
The Fund intends to comply with the requirements of the Internal Revenue Code
that are applicable to Regulated Investment Companies and to distribute all of
its taxable income to shareholders. Therefore, no Federal income tax provision
is required. There were no accumulated undistributed net realized gains on
investment transactions at October 31, 1995.
page 8
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ASM FUND, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
APRIL 30, 1996
(UNAUDITED)
2. INVESTMENT ADVISORY FEES
The Fund has an investment and management agreement (the "Agreement")
with Vector Index Advisors, Inc. (the "Advisor"). The Advisor is entitled to
receive a fee, accrued daily and payable monthly at an annual rate of .60 of 1%
of the Fund's average daily net assets.
The Advisor provides continuous supervision of the investment portfolio
and pays the cost of compensation of the officers of the Fund, occupancy and
certain clerical and administrative costs involved in portfolio management. The
Fund bears all other costs and expenses.
Certain officers and directors of the Fund are also officers and
directors of the Advisor. The Agreement provides for an expense reimbursement
from the Advisor if the Fund's total expenses, exclusive of taxes, interest on
borrowings, dividends on securities sold short, brokerage commissions, and
extraordinary expenses, exceed a certain percentage of the Fund's average daily
net assets for any full fiscal year. Under state expense limitation applicable
to the Fund, the Advisor is required to limit expenses of the Fund to 2.5% of
average net assets for the first $30,000,000 and 2.0% of the average net assets
for the next $70,000,000. Such state law provisions exclude items such as,
taxes, interest, brokerage commissions, and extraordinary expenses from such
limitations. Although not required to do so, the Advisor voluntarily reimbursed
the Fund $43,330 for the six months ended April 30, 1996.
In November 1995, a regional office of the Securities and Exchange
Commission advised the Advisor that it intended to recommend administrative
proceedings against the Advisor, on the ground that the carrying by the Fund of
receivables owed from the Advisor, constituted an improper loan to the Advisor.
Without admitting to the allegation, the Advisor and it's president have offered
to settle the matter by paying a fine of $10,000 and agreeing to a cease and
desist order intended to prevent a repetition of the challenged activities.
There can be no assurance that the Securities and Exchange Commission will
accept the proposed settlement. Management does not expect the ultimate
disposition of this matter to have a material adverse impact on the Advisor or
the Fund.
page 9
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ASM FUND, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
APRIL 30, 1996
(UNAUDITED)
3. INVESTMENT TRANSACTIONS
For the six months ended April 30, 1996, purchases and sales of investments
securities, (excluding short-term securities) were $25,449,850 and $27,336,010,
respectively.
As of April 30, 1996, the aggregate cost of investments for financial
reporting purposes approximated the cost for Federal income tax purposes and net
unrealized appreciation (depreciation) for Federal income tax purposes was
comprised of the following:
Gross Unrealized Appreciation of Investments $ 114,374
Gross Unrealized Depreciation of Investments (154,833)
---------
Net Unrealized Depreciation of Investments $ (40,459)
=========
4. DEFERRED ORGANIZATION EXPENSES
Organization expenses in the amount of $175,320 were initially paid by the
Advisor and were reimbursed by the Fund. These costs have been deferred and are
being amortized over a sixty-month period. During the amortization period, the
proceeds of any redemption of the original shares will be reduced by a pro rata
portion of the then unamortized organizational expenses based on the ratio of
the shares redeemed to the total initial shares outstanding immediately prior to
the redemption.
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