<PAGE> 1
SENTRY FUND, INC.
1800 NORTH POINT DRIVE O STEVENS POINT, WISCONSIN 54481
MESSAGE TO SHAREHOLDERS DECEMBER 7, 1995
The performance of Sentry Fund continues to be strong which mirrors the
performance of the U.S. economy. Our Fund's Investment Advisor provides the
following overview and outlook:
"The US economy accelerated in the third quarter to a 4.2% real rate of
growth. This compares to growth rates of 2.7% and 1.3%, respectively, in the
first and second quarters. We believe the economy is solid and should continue
to grow throughout 1996, albeit at a somewhat slower pace.
Inflation continues to be under control and we see no signs of any resurgence in
the rate of inflation. After tightening monetary conditions in 1994, the Federal
Reserve Board has eased in 1995 and we would expect further easing in 1996. The
long Treasury Bond has declined in yield from near 8% at the start of the year
to under 6.5% currently.
Given the benign economic outlook, controlled inflation and Federal
Reserve easing, the stock market has experienced an almost uninterrupted rise
of 1,000 points during 1995. Although a pause could certainly be expected after
a move of this magnitude, we believe the market will move higher in 1996."
In October of this year your Fund was recognized by a nationally syndicated
column listing it as one of a select group of no-load funds with reasonable
money management expenses and low initial deposit requirements for the small
investor. Needless to say, we were very pleased with this recognition.
The chart below will provide you with a graphic over view of the Fund's
performance for the past 10 years. With the exception of 1987 and 1990, all
fiscal years reported have had positive growth. This illustrates the benefits of
long-term investing in Sentry Fund.
On October 31, 1995, total net assets of Sentry Fund were $84.4 million. This is
a $4.8 million increase from the $79.6 million reported last year.
Your account with us is most appreciated. Please feel free to contact us
concerning any questions you may have regarding the Fund.
Sincerely,
DALE R. SCHUH
Dale R. Schuh
Chairman of the Board
Average Annual Total Return *Periods Ended October 31, 1995
1 year 5 year 10 year
Sentry Fund 13.0% 14.2% 12.3%
S&P "500" 26.3% 17.1% 15.4%
**"Total Return" is calculated including reinvestment of all income dividends
and capital gain distributions. Results represent past performance, and do not
indicate future results. The value of an investment in the Fund and the return
on the investment both will fluctuate, and redemption proceeds may be higher or
lower than an investor's original cost. When first organized in 1970, the Fund
applied a sales charge to each share purchase. The Fund's sales charge was
eliminated on March 1, 1991.
The S&P "500" Index is an unmanaged index generally considered to be
representative of stock market activity. This data is derived by Sentry Equity
Services, Inc. and the Total Return includes Investment of all income.
<PAGE> 2
INDEPENDENT ACCOUNTANTS' REPORT
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF SENTRY FUND, INC.:
We have audited the accompanying statement of assets and liabilities of
Sentry Fund, Inc., including the portfolio of investment securities, as of
October 31, 1995, 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
October 31, 1995 by correspondence with the custodian and brokers. 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 Sentry
Fund, Inc. as of October 31, 1995, 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.
COOPERS & LYBRAND LLP
Chicago, Illinois
November 29, 1995
1995 FEDERAL INCOME TAX INFORMATION
Long term capital gains are taxable to shareholders as long term capital gains,
regardless of how long a person has been a shareholder. In order to avoid an
excise tax on undistributed amounts, the Fund must declare by the end of the
calendar year a dividend representing 98% of its ordinary income for the
calendar year and 98% of its net capital gains for the period of November 1 of
the previous year through October 31 of the current year. Capital gains and
income distributions declared and made payable to shareholders of record before
the end of the calendar year will be "deemed" to have been received by the
shareholders on December 31 so long as the dividends are actually paid during
January of the following year.
For individual tax information, shareholders should consult their own tax
advisors.
<PAGE> 3
SENTRY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities, at
market value (cost $57,360,929) $83,910,574
Cash 116,935
Receivables:
Investment securities sold 457,500
Dividends 63,258
-----------
Total assets $84,548,267
LIABILITIES:
Investment advisory fees 162,289
Transfer agent fees 2,156
Custodian fees 1,482
Professional services 8,650
-----------
Total liabilities 174,577
-----------
NET ASSETS $84,373,690
===========
ANALYSIS OF NET ASSETS:
Capital shares $51,857,561
Undistributed net investment income 473,835
Undistributed net realized gain on
sales of investments 5,492,649
Unrealized appreciation on investments 26,549,645
-----------
Net assets applicable to outstanding shares $84,373,690
===========
Capital Shares Outstanding 5,179,457
===========
Net Asset Value and
Redemption and Offering Price per Share $16.29
======
</TABLE>
STATEMENT OF OPERATIONS
For the Year Ended October 31, 1995
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $1,389,925
Interest 257,099
----------
Total investment income $1,647,024
Expenses:
Investment advisory fees 609,977
Transfer agent fees 24,781
Professional services 12,507
Printing, stationery and postage 6,160
Licenses and fees 17,435
Directors' fees 3,000
Other expenses 22,944
----------
Total expenses 696,804
----------
Net investment income 950,220
----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on sales of investments 5,767,028
Increase in unrealized appreciation
of investments 3,352,885
----------
Net realized and unrealized gain
on investments 9,119,913
----------
Net increase in net assets resulting
from operations $10,070,133
===========
</TABLE>
See accompanying notes to financial statements
<PAGE> 4
SENTRYFUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended October 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income $ 950,220 $ 919,248
Net realized gain on sales of investments 5,767,028 3,943,899
Increase (decrease) in unrealized appreciation on investments 3,352,885 (1,189,105)
----------- -----------
Net change in net assets resulting from operations 10,070,133 3,674,042
----------- -----------
DISTRIBUTIONS:
Dividends from net investment income (891,072) (1,081,076)
Distributions of net realized gains (3,961,557) (4,984,358)
----------- -----------
Total distributions to shareholders (4,852,629) (6,065,434)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 4,714,480 6,585,067
Net asset value of shares issued to shareholders in
reinvestment of distributions 4,805,308 6,006,955
----------- -----------
9,519,788 12,592,022
Cost of shares redeemed (9,985,556) (6,893,914)
----------- -----------
(Decrease) increase in net assets derived from capital
share transactions (465,768) 5,698,108
----------- -----------
NET ASSETS:
Total increase in net assets 4,751,736 3,306,716
Beginning of year 79,621,954 76,315,238
----------- -----------
End of year (including undistributed net investment
income of $473,835 and $414,687, respectively) $84,373,690 $79,621,954
=========== ===========
</TABLE>
See accompanying notes to financial statements
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Sentry Fund, Inc. (Fund) is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The following is a
summary of significant accounting policies followed by the Fund in the
preparation of its financial statements.
a. Security Valuation -- Securities traded on any national securities
exchange or over-the-counter market are valued at the last reported sales
price; short-term securities are stated at amortized cost, which
approximates current value.
b. Federal Income and Excise Taxes -- No provision for Federal income or
excise taxes is considered necessary since the Fund intends to distribute
to its shareholders substantially all of its taxable income, and to
otherwise comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies.
c. Investment Income and Security Transactions -- Security transactions
are accounted for on the trade date. Dividend income and distributions to
shareholders are recorded on the ex-dividend date and the record date,
respectively. Interest income is recognized when earned. Realized gains
and losses from securities transactions are determined by comparing the
identified cost of the security lot sold with the net sales proceeds.
<PAGE> 5
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. CAPITAL SHARES
At October 31, 1995, there were 10,000,000 shares of $1 par value
capital stock authorized. Transactions in capital stock for the years ended
October 31, 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Shares sold 312,285 437,630
Shares issued to shareholders in reinvestment of distributions 345,286 407,772
-------- --------
657,571 845,402
Shares redeemed (652,520) (462,807)
-------- --------
Net increase in shares outstanding 5,051 382,595
======== ========
</TABLE>
3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of common stock during the year ended October 31,
1995 aggregated $20,368,130 and $29,704,280, respectively.
4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under terms of its investment advisory agreement with Sentry Investment
Management, Inc., the Fund pays an advisory fee equal to .75% of the average
daily net asset value of the Fund. However, under the terms of the agreement,
if the total annual expenses of the Fund (excluding taxes, portfolio
brokerage commissions and interest, but including investment advisory fees)
exceed 1-1/2% of the first $30,000,000 and 1% of the balance of the average
daily net asset value of the Fund in any one fiscal year, the investment
adviser will reimburse the Fund for such excess. Expenses did not exceed the
applicable limitation for the year ended October 31, 1995.
Sentry Equity Services, Inc., (SESI), as principal underwriter of the
Fund, paid $8,302 in commissions to sales representatives for the year ended
October 31, 1995. In addition, SESI also acts as transfer agent and receives
annual fees from the Fund of $8.50 per shareholder account.
As of October 31, 1995, affiliates of Sentry Insurance and the Sentry
401K Plan held 25% and 37%, respectively, of the Fund's outstanding capital
stock.
5. DISTRIBUTIONS TO SHAREHOLDERS
Net realized gains from security transactions are distributed to
shareholders in the succeeding year, unless there are capital loss carryovers
which may be applied against such realized gains. On December 21, 1994 and
June 8, 1995, the Fund distributed $3,696,206 ($.71 per share) and $265,351
($.05 per share) related to the prior fiscal year's net realized capital
gains. Undistributed realized capital gains and net investment income as of
October 31, 1995 will be paid out on December 19, 1995. On December 21, 1994,
and June 8, 1995, the Fund distributed $572,651 ($.11 per share) and $318,421
($.06 per share), respectively, from net investment income.
<PAGE> 6
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. INCOME TAX INFORMATION
Unrealized gains and losses on investment securities for both financial
statement and Federal income tax purposes at October 31, 1995 were as
follows:
<TABLE>
<CAPTION>
1995
-----------
<S> <C>
Gross unrealized gains $30,959,524
Gross unrealized losses 4,409,879
-----------
Net $26,549,645
===========
</TABLE>
The aggregate investment cost for both financial statement and Federal
income tax purposes at October 31, 1995 was $57,360,929.
FINANCIAL HIGHLIGHTS
The following presents information relating to a share of capital stock of
the Fund outstanding for the entire period:
<TABLE>
<CAPTION>
YEAR ENDED
OCTOBER 31,
---------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 15.39 $ 15.93 $ 15.17 $ 15.34 $ 12.04
------- ------- ------- ------- -------
Income From Investment Operations
Net Investment Income .18 .18 .23 .29 .36
Net Realized and Unrealized Gains
on Investments 1.65 .53 1.12 1.03 3.95
------- ------- ------- ------- -------
Total from Investment Operations 1.83 .71 1.35 1.32 4.31
Less Distributions
Dividends From Net Investment Income (.17) (.22) (.23) (.35) (.36)
Distribution From Net Realized Gains (.76) (1.03) (.36) (1.14) (.65)
------- ------- ------- ------- -------
Total Distributions (.93) (1.25) (.59) (1.49) (1.01)
Net Asset Value End of Period $ 16.29 $ 15.39 $ 15.93 $ 15.17 $ 15.34
======= ======= ======= ======= =======
Total Return 12.97% 4.86% 9.17% 9.09% 37.59%
Net Assets, End of Period (in Thousands) $84,374 $79,622 $76,315 $69,454 $60,931
Ratio of Expenses to Average Net Assets .86% .86% .87% .88% .84%
Ratio of Net Investment Income to
Average Net Assets 1.17% 1.19% 1.48% 1.95% 2.56%
Portfolio Turnover Rate 26.54% 16.31% 22.34% 12.58% 2.53%
</TABLE>
<PAGE> 7
PORTFOLIO OF INVESTMENT SECURITIES - October 31, 1995 SENTRY FUND, INC.
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- --------- --------
<S> <C> <C>
COMMON STOCKS (90.8%)
BUSINESS & CONSUMER SERVICES (11.8%)
25,000 American Greetings Corp. .............................. $ 787,500
74,250 Analysts Int'l Corp. .................................. 2,199,656
25,000 Deluxe Corp. .......................................... 671,875
67,500 + FIServe, Inc. ......................................... 1,738,125
25,000 Block (H & R), Inc. ................................... 1,031,250
75,000 + Jaco Electronics, Inc. ................................ 993,750
239,500 + Richey Electronics, Inc. .............................. 2,035,750
39,500 Technalysis Corporation ............................... 478,938
DRUG & HEALTH CARE (4.0%)
41,200 Bristol-Myers Squibb Co. .............................. 3,141,500
25,000 + Uromed Corp. .......................................... 265,625
ELECTRICAL EQUIPMENT (2.5%)
33,600 General Electric Co. .................................. 2,125,200
ELECTRONICS (7.5%)
40,000 Int'l. Business Machines Corp. ........................ 3,890,000
110,000 + Recoton Corp. ......................................... 2,447,500
ENERGY (7.2%)
30,700 + Belden & Blake Corp. .................................. 445,629
27,300 Cabot Oil & Gas Corp. ................................. 365,137
113,000 + Coho Energy, Inc. ..................................... 579,125
38,000 + Dual Drilling Co. ..................................... 370,500
5,000 Exxon Corporation ..................................... 381,875
15,000 + Newpark Resources, Inc. ............................... 238,125
60,000 + Oceaneering International, Inc. ....................... 570,000
190,000 + Pool Energy Services Co. .............................. 1,757,500
10,000 Texaco, Inc. .......................................... 681,250
20,000 USX-Marathon Group .................................... 355,000
12,675 + Weatherford Enterra, Inc. ............................. 305,784
FINANCIAL (13.0%)
20,000 Boatmen's Bancshares, Inc. ............................ 760,000
50,000 First Financial Corp. (Wisc)........................... 1,068,750
20,000 Firstar Corp. ......................................... 707,500
40,400 National City Corp. ................................... 1,247,350
110,000 PNC Bank Corp. ........................................ 2,887,500
60,000 + Security Capital Corp. ................................ 3,285,000
45,000 Washington Federal, Inc. .............................. 1,029,375
FOOD & RESTAURANT (12.9%)
90,000 + Ihop Corp. ............................................ 1,935,000
45,000 + Int'l Dairy Queen Class A ............................. 956,250
65,000 Lancaster Colony Corp. ................................ 2,161,250
100,000 McDonald's Corp. ...................................... 4,100,000
70,000 Richfood Holdings, Inc. ............................... 1,750,000
HOUSING (1.4%)
75,000 + American Homestar Corp. ............................... 1,200,000
LEISURE (0.3%)
25,000 Arctco, Inc. .......................................... 281,250
MANUFACTURING (1.9%)
25,000 + Baldwin Piano & Organ Co. ............................. 321,875
53,900 + Medar, Inc. ........................................... 458,150
50,000 + Plexus Corp. .......................................... 787,500
RETAIL (9.2%)
70,000 Baker (J), Inc. ....................................... 402,500
80,000 + Best Buy Co., Inc. .................................... 1,660,000
20,000 CPI Corp. ............................................. 365,000
20,000 + Dress Barn, Inc. ...................................... 195,000
27,600 K Mart Corp. .......................................... 224,250
50,000 + Mac Frugal's Bargain-Clothing, Inc. ................... 593,750
150,000 Walgreen Company ...................................... 4,275,000
TOBACCO (9.2%)
60,000 Philip Morris Cos., Inc. .............................. 5,070,000
90,000 UST, Inc. ............................................. 2,700,000
TRANSPORTATION (9.9%)
27,000 + Cherry Corp. The Class A .............................. 337,500
10,000 + Cherry Corp. The Class B .............................. 135,000
50,000 + Custom Chrome, Inc. ................................... 1,256,250
36,000 Excel Industries, Inc. ................................ 432,000
120,000 Harley-Davidson, Inc. ................................. 3,210,000
50,000 + HI-LO Automotive, Inc. ................................ 293,750
10,000 Smith (A O) Corp. ..................................... 207,500
114,000 + Starcraft Automotive Corp. ............................ 741,000
66,800 Wabash National Corp. ................................. 1,695,050
-----------
TOTAL COMMON STOCKS 76,586,894
(Cost $50,037,249) -----------
<CAPTION>
Principal
Amount
- ---------
<S> <C> <C>
SHORT-TERM SECURITIES (8.7%)
COMMERCIAL PAPER - DISCOUNTED
848,000 IBM Credit Corp.
Note due 11/03/95 847,730
991,000 Household Finance
Note due 11/07/95 990,054
1,485,000 Household Finance
Note due 11/10/95 1,482,872
305,000 Norwest Financial, Inc.
Note due 11/14/95 304,369
726,000 General Electric Capital Corp.
Note due 11/14/95 724,503
847,000 Ford Motor Credit Corp.
Note due 11/17/95 844,843
1,207,000 IBM Credit Corp.
Note due 11/21/95 1,203,164
930,000 Ford Motor Credit Corp.
Note due 11/27/95 926,145
-----------
TOTAL SHORT-TERM SECURITIES 7,323,680
(Cost $7,323,680) -----------
TOTAL INVESTMENTS (99.5%) 83,910,574
(Cost $57,360,929)
CASH AND RECEIVABLES
LESS LIABILITIES (0.5%) 463,116
-----------
NET ASSETS (100%) $84,373,690
===========
</TABLE>
+ Non-income producing security during the year ended October 31, 1995.
See accompanying notes to financial statements
<PAGE> 8
[SENTRY FUND, INC. LOGO]
BOARD OF DIRECTORS
Wayne R. Ashenberg
Thomas R. Copps
David W. Graebel
Dale R. Schuh
Steven J. Umland
OFFICERS
Dale R. Schuh, Chairman of the Board
John A. Stenger, V.P.
William M. O'Reilly, Secy.
Thomas H. Weingarten, Treas.
INVESTMENT ADVISOR
Sentry Investment Management, Inc.
Stevens Point, Wisconsin
UNDERWRITER
Sentry Equity Services, Inc.
Stevens Point, Wisconsin
CUSTODIAN
Citibank, N.A.
New York, New York
LEGAL COUNSEL
Godfrey & Kahn
Milwaukee, Wisconsin
INDEPENDENT AUDITORS
Coopers & Lybrand L.L.P.
Chicago, Illinois
This report has been prepared for the general information of shareholders of the
Fund and is not authorized for distribution to prospective investors unless
preceded or accompanied by an effective Prospectus which contains details
concerning sales charges and other pertinent information.
SENTRY FUND, INC.
ANNUAL
REPORT
- NO SALES CHARGES
- NO REDEMPTION FEES
OCTOBER 31, 1995
