[LOGO] ASM Index 30 Fund
ASM INDEX 30 FUND, INC.
Tampa, Florida
Audited Annual Financial Statements
For the Year Ended October 31, 1997
TABLE OF CONTENTS PAGE
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Report of Independent Accountants 1
Portfolio of Investments 2, 3, 4
Statement of Assets & Liabilities 5
Statements of Operations 6
Statements of Changes in Net Assets 7
Financial Highlights 8
Notes to Financial Statements 9-12
<PAGE>
Dear ASM Index 30 Fund Shareholder, December 31, 1997
Last year I was optimistic about the 1997 stock market. The Fund was up
25.01% for fiscal year 1996. This was in contrast to the market "gurus"
pessimistically pointing out that three consecutive good stock market years is
very unlikely, especially when timed with the second term of a President. I
was more impressed with the earnings projections for the thirty companies that
make up the Dow Jones Industrial Average (the "Dow")* than the historical
analysis observations.
ASM Index 30 Fund shareholders enjoyed a total return of 25.18% for the
fiscal year ended October 31, 1997. So much for laurels. If two consecutive
good stock market years put fear in the hearts of market analysts, three years
will push the bears out of their lairs howling. Howl though they may, we
believe that the 1998 earnings forecasts for the companies that comprise the
Dow continue to look good. The consensus among analysts is that the earnings
of these thirty companies should increase about 14.6%. This is higher than
the 9.9% forecast for the economy in general as measured by the S&P 500 index.
This advantage, coupled with the superior liquidity of the Dow stocks, should
benefit our stocks during 1998.
Recent foreign currency turmoil increased the volatility of the U.S.
stock market. This is understandable. An important part of the business of
our economy is related to how well we compete around the world. The Dow
stocks have rebounded impressively from the bad news abroad. Rather than
weaken the confidence in the mega-cap companies, they continue to be viewed as
a safer investment. During the stock market decline at the end of October,
IBM and other large companies bought considerable amounts of their own stock.
During 1997, four companies were added to and deleted from the portfolio
to match the changes in the Dow. The additions were: Travelers Group,
Hewlett-Packard, Wal-Mart Stores and Johnson & Johnson. These were important
improvements in an already impressive portfolio. Since May, Travelers Group
stock price increased by 53%, Hewlett-Packard by 16.59%, Wal-Mart by 39.35%
and Johnson & Johnson by 12.8%. This is an average increase of 27.45%
compared to the 12.74% increase of the four companies which were removed from
the Dow.
The ASM Index 30 Fund has tracked the Dow closely since the Fund's
manager capped expenses at 0.18% on January 15, 1997. From January until
October the Dow gained 15.41% plus the annualized dividend of about 1.88%,
totaling 16.82% The Fund return is 16.85% for the ten months ended October
31, 1997. This is a difference of 3 basis points in favor of the Fund's
shareholders. This small gain to the Fund is caused by a pricing advantage we
enjoyed when certain stocks split and we re-balanced the portfolio.
The Fund's performance compared very favorably with the performance of
mutual funds in general. Almost 80% of the money invested in mutual funds is
invested in funds that have more than $1 billion in assets. The average total
expense of these funds, including transaction costs, is over 1.5%. The
requirement for diversification results in these funds holding many stocks
producing market-like returns. Therefore, lower expenses give our investors
an advantage.
The S&P 500 did produce about 7.5% more than the Dow this year. You may
recall that in 1996 the Dow outperformed the S&P 500 by about 6%. The long
term record still favors the Dow and, given the improved forecasts, I believe
we are positioned for another good year.
Respectfully,
Steven H. Adler, President
* "Dow Jones Industrial Average" and "Dow" are the property of Dow Jones &
Company.
The ASM Index 30 Fund is neither affiliated with, nor endorsed by Dow Jones
& Company.
<PAGE>
This line graph depicts the performance of $10,000 when invested in the ASM
Index 30 Fund (the "Fund") from March 4, 1991 (when shares of the Fund were
first sold) to October 31, 1997 as compared to the Dow Jones Industrial Average
(the "Dow") and the S&P 500, a broad-based index.
The graph illustrates that a $10,000 investment on March 4, 1991 would be
worth $20,754 for the Fund, $30,300 for the Dow, and $29,305 for the S&P 500
Index. The average total return for the Fund was 25.18%, 17.20%, and 11.59% for
the one year period ended October 31, 1997, the five year period ended October
31, 1997, and the period from March 4, 1991 (when shares of the Fund were first
sold) to October 31, 1997, respectively.
[GRAPH] The information described above was presented in the form of a line
graph.
ASM INDEX 30 FUND PORTFOLIO
American Telephone and Telegraph Co. Hewlett-Packard
Allied Signal, Inc. International Business Machines Corp.
Aluminum Company of America International Paper Co.
American Express Co. Johnson & Johnson
Boeing Co. McDonald's Corp.
Caterpillar Merck & Co.
Chevron Corp. Minnesota Mining & Manufacturing Co.
Coca-Cola Co. J.P. Morgan
Walt Disney Philip Morris Companies, Inc.
Dupont de Nemours & Co. Proctor & Gamble Co.
Eastman Kodak Co. Sears Roebuck & Co.
Exxon Corp. Travelers Group
General Electric Co. Union Carbide Corp.
General Motors Corp. United Technologies Corp.
Goodyear Tire & Rubber Co. Wal-Mart Stores, Inc.
<PAGE>
Report of Independent Accountants
To the Shareholders and Board of Directors of
ASM Index 30 Fund (the "Fund")
We have audited the accompanying statement of assets and liabilities of the
Fund, including the portfolio of investments, as of October 31, 1997, the
related statement of operations for the year then ended, and the statement of
changes in net assets and the financial highlights for the two 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. The financial highlights before restatement for the years ended October
31, 1995, 1994, and 1993 were audited by other auditors, whose report dated
December 27, 1995 expressed an unqualified opinion. We also audited the
adjustments described in Note 4 that were applied to restate the expense ratios
included in the financial highlights for the years ended October 31, 1995, 1994,
and 1993. In our opinion, such adjustments are appropriate and have been
properly applied.
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
October 31, 1997, 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 provides 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 the
Fund as of October 31, 1997, the results of its operations for the year then
ended, the changes in net assets and the financial highlights for the two years
in the period then ended, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
Tampa, Florida
December 12, 1997
<PAGE>
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ASM INDEX 30 FUND, INC.
Portfolio of Investments
October 31, 1997
- --------------------------------------------------------------------------------
% of Total
Net Assets Shares Value
---------- ------ -----
COMMON STOCKS:
AEROSPACE
Boeing Company 11,050 $ 529,019
United Technologies Corporation 11,050 773,500
----------
6.2% 1,302,519
AUTO AND TRUCK
General Motors Corporation 3.4% 11,050 709,272
BANKING
J.P. Morgan & Company, Inc. 5.7% 11,050 1,212,737
BEVERAGE
Coca Cola Company 3.0% 11,050 624,325
CHEMICAL
E.I. DuPont de Nemours & Co. 11,050 628,469
Union Carbide Corporation 11,050 504,847
----------
5.4% 1,133,316
CONSUMER PRODUCTS
Proctor & Gamble Company 11,050 751,400
Johnson & Johnson 11,050 633,994
----------
6.6% 1,385,394
DIVERSIFIED
Allied-Signal Inc. 11,050 397,800
Minnesota Mining & Manufacturing Company 11,050 1,011,075
----------
6.7% 1,408,875
DRUGS AND HOSPITAL SUPPLY
Merck & Company, Inc. 4.7% 11,050 986,213
ELECTRICAL EQUIPMENT
General Electric Corporation 3.4% 11,050 713,416
FINANCIAL SERVICES
American Express Company 4.1% 11,050 861,900
INSURANCE
Travelers Group, Inc. 3.7% 11,050 773,500
MACHINERY
Caterpillar Inc. 2.7% 11,050 566,312
The accompanying notes are an integral part of these financial statements.
<PAGE>
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ASM INDEX 30 FUND, INC.
Portfolio of Investments, Continued
October 31, 1997
- --------------------------------------------------------------------------------
% of Total
Net Assets Shares Value
---------- ------ -----
COMMON STOCKS (continued):
METALS AND MINING
Aluminum Company of America 3.8% 11,050 $ 806,650
MULTIMEDIA
Walt Disney Company 4.3% 11,050 908,862
OFFICE EQUIPMENT
Hewlett Packard 11,050 681,647
International Business Machines 11,050 1,083,591
----------
8.4% 1,765,238
OIL-INTERNATIONAL
Chevron Corporation 11,050 916,459
Exxon Corporation 11,050 678,884
----------
7.6% 1,595,343
PAPER
International Paper 2.4% 11,050 497,250
PHOTOGRAPHIC EQUIPMENT AND SUPPLIES
Eastman Kodak Company 3.1% 11,050 661,619
RESTAURANT
McDonalds Corporation 2.3% 11,050 495,178
RETAIL
Sears, Roebuck & Company 11,050 462,719
Wal Mart Stores 11,050 388,131
----------
4.0% 850,850
TELECOMMUNICATIONS
AT&T Co. 2.6% 11,050 540,759
TIRE AND RUBBER
Goodyear Tire & Rubber 3.3% 11,050 692,006
TOBACCO
Philip Morris Companies, Inc. 2.1% 11,050 437,856
------ ----------
TOTAL COMMON STOCKS (Cost $19,156,262) 99.1%* $20,929,390
Total consists of individual percentages which have been rounded.
The accompanying notes are an integral part of these financial statements.
<PAGE>
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ASM INDEX 30 FUND, INC.
Portfolio of Investments, Continued
October 31, 1997
- --------------------------------------------------------------------------------
% of Total Principal
Net Assets Amount Value
-----------------------------------
REPURCHASE AGREEMENTS:
Star Bank $ 340,000 $ 340,000
5.00%, due 11/03/97
Collateralized by $340,000 GNMA
7.000%, 1/20/24 with market
value of $347,172
---------- -----------
TOTAL REPURCHASE AGREEMENTS 1.6% 340,000
(Cost $340,000)
---------- -----------
TOTAL INVESTMENTS 100.7% 21,269,390
(Cost $19,496,262)
LIABILITIES IN EXCESS OF OTHER ASSETS -0.7% (142,568)
---------- -----------
TOTAL NET ASSETS 100.0% $21,126,822
========== ===========
The accompanying notes are an integral part of these financial statements.
<PAGE>
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ASM INDEX 30 FUND, INC.
Statement of Assets and Liabilities
October 31, 1997
- --------------------------------------------------------------------------------
Assets:
Investments in common stocks, at market value
(cost $19,156,262) $ 20,929,390
Repurchase agreements, at cost 340,000
Cash 211
Receivable for capital shares issued 63,925
Interest receivable 177
Dividends receivable 17,861
Receivable from advisor 147,188
Prepaid expense and other assets 29,245
-------------
Total Assets 21,527,997
-------------
Liabilities:
Payable for capital shares redeemed 263,637
Accrued taxes payable 85,816
Accrued expenses 51,722
-------------
Total Liabilities 401,175
-------------
Net Assets $ 21,126,822
=============
Components of Net Assets:
Capital paid-in $ 17,800,629
Accumulated undistributed net realized gains
from investment transactions 1,553,065
Net unrealized appreciation of investments 1,773,128
-------------
Total Net Assets $ 21,126,822
=============
Capital Shares Outstanding
($0.001 par value, 1,000,000,000 shares authorized) 1,227,897
=============
Net Asset Value - Offering and Redemption Price Per Share $ 17.21
=============
The accompanying notes are an integral part of these financial statements.
<PAGE>
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ASM INDEX 30 FUND, INC.
Statement of Operations
For the Year Ended October 31, 1997
- --------------------------------------------------------------------------------
Investment Income:
Dividends $ 517,287
Interest 33,118
-------------
Total investment income 550,405
-------------
Expenses:
Audit fees 54,398
Custodian fees 51,543
Trustee fees 20,980
Legal expense 98,529
Administrative fees 15,766
Registration and filing fees 25,061
Transfer agent and accounting fees 37,025
Printing and postage 6,691
Interest expense 6,216
Tax expense (credit) (45,200)
Other expenses 29,301
-------------
Total expenses 300,310
Less: Reimbursement of expenses by advisor (180,781)
-------------
Total expenses -- net 119,529
-------------
Investment income -- net 430,876
-------------
Realized and Unrealized Gains from Investments:
Net realized gains from investment transactions 5,534,868
Change in unrealized appreciation of investments 1,680,860
-------------
Net realized and unrealized gains from investments 7,215,728
-------------
Net Increase in Net Assets Resulting from Operations $ 7,646,604
=============
The accompanying notes are an integral part of these financial statements.
<PAGE>
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ASM INDEX 30 FUND, INC.
Statements of Changes in Net Assets
For the Years Ended October 31, 1997 and October 31, 1996
- --------------------------------------------------------------------------------
October 31, October 31,
1997 1996
------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 430,876 $ 65,051
Net realized gains from investment transactions 5,534,868 2,445,312
Change in unrealized appreciation (depreciation) 1,680,860 (362,252)
of investments ------------ -------------
Net increase in net assets resulting from 7,646,604 2,148,111
operations ------------ -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (430,876) (65,051)
In excess of net investment income (63,140) (12,633)
------------ -------------
From net realized gains (208,768) ---
------------ -------------
Net decrease in net assets resulting from (702,784) (77,684)
distributions to shareholders ------------ -------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued 77,870,255 49,671,530
Reinvestment of distributions 590,838 66,202
Cost of shares redeemed (73,593,574) (52,196,702)
-------------
Net increase (decrease) in net assets 4,867,519 (2,458,970)
resulting from capital share transactions ------------ -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 11,811,339 (388,543)
NET ASSETS:
Beginning of period 9,315,483 9,704,026
------------ -------------
End of period (including undistributed
net investment income of $0 and $89,231
for 1997 and 1996, respectively) $ 21,126,822 $ 9,315,483
============ =============
CHANGES IN SHARES OUTSTANDING:
Shares issued 4,853,861 3,734,945
Shares issued in connection with
reinvestment of distributions 36,286 4,919
Shares redeemed (4,321,722) (3,934,108)
------------ -------------
Net increase (decrease) in shares outstanding 568,425 (194,244)
============ =============
The accompanying notes are an integral part of these financial statements.
<PAGE>
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ASM INDEX 30 FUND, INC.
Financial Highlights
- --------------------------------------------------------------------------------
Years Ended October 31,
-------------------------------------------
1997 1996 1995(a) 1994(a) 1993(a)
-------------------------------------------
Net asset value, beginning of period $ 14.13 $ 11.37 $ 9.78 $ 10.07 $ 9.23
Investment operations:
Net investment income 0.18 0.08 --- 0.56 0.43
Net gains (losses) from investments
(realized and unrealized) 3.34 2.76 1.77 (0.16) 0.88
Total from investment operations 3.52 2.84 1.77 0.40 1.31
Distributions:
From net investment income (0.18) (0.07) (0.05) (0.52) (0.47)
In excess of net investment (0.11) (0.01) (0.13) --- ---
From net realized gains (0.15) --- --- --- ---
Tax return of capital --- --- --- (0.17) ---
-------------------------------------------
Total distributions (0.44) (0.08) (0.18) (0.69) (0.47)
-------------------------------------------
Net asset value, end of period $ 17.21 $ 14.13 $ 11.37 $ 9.78 $10.07
===========================================
TOTAL RETURN 25.18% 25.01% 18.10% 3.97% 14.65%
===========================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period $21,127 $ 9,315 $ 9,704 $ 7,277 $17,085
Ratio of expenses to average
net assets* 0.42% 1.86% 3.01%** 0.75% 0.75%
Ratio of net investment income to
average net assets * 1.51% 0.53% 0.04% 2.17% 3.35%
Portfolio turnover rate *** 265% 391% 340% 1193% 642%
Average commission rate **** $0.0387 $0.0800 --- --- ---
*Ratios are presented net of fees voluntarily reduced. If such voluntary fee
reductions had not occurred, the ratios would have been as follows:
Ratio of expenses to
average net assets 1.05% 2.59% 5.77% 2.94% 3.38%
Ratio of net investment income
(loss) to average net assets 0.88% (0.20%) (2.72%) (0.02%) 0.72%
As a result of certain tax adjustments necessitated by the Fund's failure to
qualify as a regulated investment company for the years ended October 31, 1995,
1994, and 1993, as well as other adjustments, the gross expense ratios
previously reported for these periods have been restated.
**Includes $50,460 of interest expense not subject to the expense
reimbursement agreement.
***The Fund continues to be as fully invested in equities as possible.
Therefore, portfolio turnover is higher than most equity mutual funds because
purchases and sales of securities are necessary for settlement of transactions
requested by Fund shareholders.
****For fiscal periods beginning on or after September 1, 1995, the Fund is
required to present the average commission paid for securities transactions on
which commissions are charged.
(a) Audited by predecessor auditor.
The accompanying notes are an integral part of these financial statements.
<PAGE>
ASM INDEX 30 FUND, INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1997
ASM Index 30 Fund, Inc. (the "Fund"), formerly ASM Fund, Inc., was incorporated
in Maryland on April 25, 1990 and is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as a no-load, diversified, open-end
management investment company. The Fund has an investment objective of providing
total return through a combination of capital appreciation and current income.
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 requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses for the
period.
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 sales of investments on the trade date. Realized gains and losses from sales
of investments are calculated on the specific identification basis. Interest
income is recognized on the accrual basis, and dividend income is recorded on
the ex-dividend date.
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Fund purchases
securities from a bank or recognized securities dealer and simultaneously
commits to resell that security to the bank or dealer at an agreed-upon date and
price reflecting a market rate of interest unrelated to the coupon rate or
maturity of the purchased security. The Fund may invest in repurchase agreements
with institutions believed by Vector Index Advisors, Inc. (the "Advisor") to
present minimum credit risk. Each repurchase agreement is recorded at cost. The
Fund requires that the securities purchased in a repurchase agreement be
transferred to the custodian in a manner sufficient to enable the Fund to obtain
those securities in the event of a counterparty default. The seller, under the
repurchase agreement, is required to maintain the value of the securities at
least equal to the repurchase price, including accrued interest.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on deposit with the custodian.
<PAGE>
ASM INDEX 30 FUND, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
OCTOBER 31, 1997
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on the ex-dividend date. On a
quarterly basis, the Fund declares and pays dividends from net investment
income, if any. On an annual basis, the Fund declares and pays net capital gain
dividends, if any.
Dividends from net investment income and net capital gain dividends are
determined in accordance with federal income tax regulations which may differ
from generally accepted accounting principles. These differences are primarily
due to deferrals of certain losses and the Fund's use of the accounting practice
of tax equalization, whereby a portion of the costs of capital shares redeemed
is attributable to distributions to shareholders. Permanent book and tax basis
differences have been reclassified among the components of net assets.
FEDERAL INCOME TAXES
The Fund intends to continue 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 its shareholders. Therefore, no
Federal income tax provision is recognized for the year ended October 31, 1997.
2. INVESTMENT ADVISORY FEES
The Fund operated under an investment management agreement (the "1992
Agreement") with the Advisor through April 15, 1995. The 1992 Agreement was not
continued after such date due to technical requirements under the 1940 Act, and
thereafter the Fund received the services called for under the 1992 Agreement
without charge. Under the 1992 Agreement, the Advisor was entitled to receive a
fee, accrued daily and payable monthly at an annual rate of 0.60% of the Fund's
average daily net assets.
On October 30, 1997 at a Special Meeting of Stockholders of the Fund, the
stockholders approved a new investment management agreement between the Fund and
the Advisor (the "New Agreement"). The terms of the New Agreement are generally
the same as the 1992 Agreement except that the New Agreement provides for
compensation to the Advisor at an annual rate of 0.08% 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, and 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 Agreements provide 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 exceeded a certain percentage of the Fund's average daily
net assets for any full fiscal year.
<PAGE>
ASM INDEX 30 FUND, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
OCTOBER 31, 1997
Commencing January 15, 1997, the Advisor voluntarily agreed to limit
expenses of the Fund to 0.18% of the Fund's average daily net assets. Prior to
January 15, 1997, the Advisor agreed to limit expenses of the Fund to 2.5% of
the first $30,000,000 of average net assets, 2.0% of the next $70,000,000 of
average net assets and 1.5% of average net assets in excess of $100,000,000.
Pursuant to commitments made to the Fund by the Advisor, the Advisor reimbursed
the Fund $180,781 for the year ended October 31, 1997.
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 grounds that a delay by the Advisor in
its payment of a receivable owed from the Advisor consituted an improper loan
from the Advisor. Without admitting to the allegation, the Advisor and its
president settled the matter by paying a fine of $10,000 and agreeing to an
order intended to prevent a repetition of the challenged activities.
3. INVESTMENT TRANSACTIONS
For the year ended October 31, 1997, purchases and sales of investment
securities (excluding short-term securities) were $76,583,265 and $72,167,198,
respectively. As of October 31, 1997, the aggregate cost basis of investments
for Federal income tax purposes was $19,727,193 and net unrealized appreciation
of investments for Federal income tax purposes was comprised of the following:
Gross unrealized appreciation of investments $ 2,025,875
Gross unrealized depreciation of investments (483,678)
------------------
Net unrealized appreciation of investments $ 1,542,197
4. FINANCIAL HIGHLIGHTS RESTATEMENT
During the year ended October 31, 1996, the Fund, in consultation with its
auditors and legal counsel, determined, based on information available at the
time, that the Fund did not qualify as a regulated investment company under the
Internal Revenue Code for the years ended October 31, 1995 and 1994. As such,
the Fund would be subject to accrued Federal income taxes and interest of
approximately $85,816. The Advisor has agreed to pay these costs. Federal income
taxes and interest of $45,200 had been accrued in connection with the Fund's
failure to qualify as a regulated investment company for the year ended October
31, 1993. Amounts previously accrued for such year were reversed thereby
reducing total expenses in the statement of operations for the year ended
October 31, 1997 as the liabilities for such taxes no longer exist.
<PAGE>
ASM INDEX 30 FUND, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
OCTOBER 31, 1997
Also, advisory fees in the amount of $23,443 for the period from April 16,
1995 to October 31, 1995 should not have been accrued by the Fund nor reimbursed
by the Advisor. As a result, the expense ratios before reimbursement in the
Financial Highlights have been restated to reflect these changes. Prior to
restatement, such ratios were 5.94%, 2.55%, and 2.86% for the years ended
October 31, 1995, 1994, and 1993, respectively. All amounts discussed above as
well as amounts due under statutory and voluntary expense limitations are
reflected in the receivable from advisor on the Statement of Assets and
Liabilities.
The Board of Directors of the Fund has obtained confirmation that the
Advisor has made arrangements to assure availability of funds to discharge the
Fund's obligations. All amounts due under statutory and voluntary expense
limitations were paid by the Advisor within 30 days of determination.
5. FEDERAL INCOME TAX INFORMATION (UNAUDITED)
For the taxable year ended October 31, 1997, 100% of income dividends paid
by the Fund qualified for the dividends received deduction available to
corporations.
As of October 31, 1997, for Federal income tax purposes, the Fund had no
capital losses available to carry forward and offset future capital gains.
SPECIAL MEETING OF STOCKHOLDERS (UNAUDITED)
On October 30, 1997, the Fund held a Special Meeting of Stockholders to
consider various proposals. The stockholders approved each proposal considered
as follows (with actual vote tabulations):
IN FAVOR WITHHOLD
--------- --------
1. To elect a Board of Directors of
the Fund:
Steven H. Adler 1,141,912 4,960
W. Kieth Schilit 1,136,952 6,124
Arthur Salzfass 1,130,828 5,807
Jerome P. Felsenstein 1,125,021 2,058
Daniel Calabria 1,122,964 130
IN FAVOR AGAINST ABSTAINED
-------- ------- ---------
2. To ratify or reject the selection of 1,251,829 1,953 21,473
Coopers & Lybrand L.L.P., Certified
Public Accountants, as independent
auditors of the Fund for the current
fiscal year; and
IN FAVOR AGAINST ABSTAINED
-------- ------- ---------
3. To approve or disapprove a new 1,229,039 5,936 40,281
Investment Management Agreement
between the Fund and the Advisor.
IN FAVOR WITHHOLD
-------- --------
4. To consider and act upon any other 1,222,718 52,537
business which may legally come
before the Special Meeting of
Stockholders or any adjournment
thereof.
<PAGE>
VECTOR INDEX ADVISORS, INC.
15438 NORTH FLORIDA AVENUE
SUITE 107
TAMPA, FLORIDA 33613
[LOGO] ASM INDEX 30 FUND
