<PAGE> 1
BOARD OF DIRECTORS
Thomas R. Copps
David W. Graebel
Alfred C. Noel
Dale R. Schuh
Steven J. Umland
OFFICERS
Steven R. Boehlke, Pres.
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
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. LOGO]
- No Sales Charges
- No Redemption Fees
SENTRY FUND, INC.
SEMI-ANNUAL
REPORT
APRIL 30, 1997
<PAGE> 2
SENTRY FUND, INC.
1800 North Point Drive - Stevens Point, Wisconsin 54481
MESSAGE TO SHAREHOLDERS JUNE 12, 1997
We are pleased to provide this Sentry Fund, Inc. report covering operating
results for the six-month period ended April 30, 1997. The Fund's investment
returns for this same period were as follows:
<TABLE>
<CAPTION>
Average Annual
Total Return* Total Return*
------------- --------------
<S> <C> <C>
1 Year 12.1% 12.1%
5 Year 71.6% 11.4%
10 Year 172.3% 10.5%
</TABLE>
Economic growth strengthened during the past six months. Real GDP increased
3.8% in the fourth quarter of 1996 and 5.6% in the first quarter of 1997. We
expect the economy to continue to grow throughout 1997 but at a somewhat slower
pace.
Reacting to the stronger economy, the Federal Reserve Board increased
short-term interest rates by 1/4% in March. This reverses a two year posture of
the Federal Reserve Board on lowering rates. Long-term interest rates also
increased in early 1997, with 30 year U.S. Treasury yields rising 1/2% to near
7%.
The Stock Market continues to advance, with large capitalization issues far
outperforming small cap stocks. Volatility has increased and the Stock Market
experienced a short, but sharp, correction during March. We remain optimistic
on our outlook for the market, encouraged not only by the strong economy but
also by progress in Washington towards a balanced budget agreement and a lower
capital gains tax rate.
At the January 16, 1997 shareholders meeting, David W. Graebel and Alfred C.
Noel were elected Directors of the Fund, each for a term of 3 years. There were
4,011,399 shares voted in favor and 13,855 shares voted against this slate. At
that same meeting, Coopers & Lybrand L.L.P. was confirmed as the Fund's
independent accountants with 4,008,619 shares voted in favor and 1,316 shares
voted to reject this confirmation.
Your continued support is appreciated, and we look forward to reporting our
12-month financial results in the Fund's Annual Report published in December.
Sincerely,
/s/ Steven R. Boehlke
Steven R. Boehlke
President
* "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 performance data shown does not reflect
its deduction, and had it been reflected, the charge would reduce the
performance quoted.
<PAGE> 3
SENTRY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997
(Unaudited)
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities, at
market value (cost $65,580,561) $101,137,616
Cash 73,054
Receivables:
Investment securities sold 2,527,446
Dividends 68,743
------------
Total assets $103,806,859
LIABILITIES:
Investment securities purchased 2,299,844
Investment advisory fees 194,344
Transfer agent fees 2,063
Custodian fees 451
Professional services 13,500
Insurance coverage 6,570
------------
Total liabilities 2,516,772
------------
NET ASSETS $101,290,087
============
ANALYSIS OF NET ASSETS:
Capital shares $059,963,477
Undistributed net realized gain on
sales of investments 5,442,288
Unrealized appreciation of investments 35,557,055
Undistributed net investment income 327,267
------------
Net assets applicable to outstanding shares $101,290,087
============
Capital shares outstanding 5,531,852
============
Net Asset Value and
Redemption and Offering Price per share $18.31
============
</TABLE>
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 1997
(Unaudited)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $ 640,394
Interest 131,037
------------
Total investment income $ 771,431
Expenses:
Investment advisory fees 388,993
Transfer agent fees 12,513
Professional services 8,075
Printing, stationery and postage 4,583
Licenses and fees 13,158
SEC filing fees 6,439
Directors' fees 1,500
Other expenses 8,903
------------
Total expenses 444,164
------------
Net investment income $ 327,267
------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on sales of investments 7,694,739
Increase in unrealized appreciation
of investments (2,252,451)
------------
Net realized and unrealized gain
on investments 5,442,288
------------
Net increase in net assets resulting
from operations $ 5,769,555
============
</TABLE>
See accompanying notes to financial statements
<PAGE> 4
SENTRY FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended April 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
OPERATIONS:
Net investment income $ 327,267 $ 466,949
Net realized gain on sales
of investments 7,694,739 952,400
Increase in unrealized
appreciation on investments (2,252,451) 10,191,549
------------ -----------
Net change in net assets
resulting from operations 5,769,555 11,610,898
------------ -----------
DISTRIBUTIONS:
Dividends from net investment income (586,286) (624,265)
Distributions of net realized gains (4,583,693) (5,514,341)
------------ -----------
Total distributions to shareholders (5,169,979) (6,138,606)
------------ -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 2,749,169 18,396,004
Net asset value of shares issued to
shareholders in reinvestment
of distributions 5,116,768 6,089,561
------------ -----------
7,865,937 24,485,565
Cost of shares redeemed (4,328,952) (20,583,199)
------------ -----------
Increase in net assets derived
from capital share transactions 3,536,985 3,902,366
------------ -----------
NET ASSETS:
Total increase in net assets 4,136,561 9,374,658
Beginning of year 97,153,526 84,373,690
------------ -----------
End of year (including
undistributed net investment
income of $191,809 and
$316,521 respectively) $101,290,087 $93,748,348
============ ===========
</TABLE>
See accompanying notes to financial statements
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
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.
2. 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.
3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of common stock aggregated $22,484,604 and
$24,399,515, respectively.
<PAGE> 5
PORTFOLIO OF INVESTMENT SECURITIES - April 30, 1997 SENTRY FUND, INC.
<TABLE>
<CAPTION>
Value
Shares (Note 1)
- ------ --------
<S> <C> <C>
COMMON STOCKS (97.4%)
BUSINESS & CONSUMER SERVICES (11.5%)
100,000 Analysts Int'l Corp. ......................... $2,850,000
25,000 Deluxe Corp .................................. 765,625
110,000 Diamond Home Service. Inc..................... 1,237,500
67,500 FIServe, Inc. ................................ 2,548,125
25,000 Block (H & R) Inc. ........................... 806,250
150,000 Richardson Electronics ....................... 1,106,250
235,000 Richey Electronics Inc. ...................... 2,379,375
DRUG & HEALTH CARE (5.9%)
50,000 Bristol-Myers Squibb Co....................... 3,275,000
50,000 Dentsply International Inc.................... 2,475,000
50,000 Uromed Corp................................... 213,125
ELECTRICAL EQUIPMENT (2.8%)
25,000 General Electric Co........................... 2,771,875
ELECTRONICS (6.3%)
40,000 Int'l. Business Machines Corp................. 6,430,000
ENERGY (19.5%)
27,300 Cabot Oil & Gas Corp.......................... 457,275
83,000 Coho Energy Inc............................... 622,500
141,000 Dawson Production Service..................... 1,515,750
10,000 Gulf Island Fabrication Inc................... 210,000
30,000 Ensco International Inc....................... 1,425,000
10,000 Exxon Corporation............................. 566,250
50,000 Marine Drilling Companies..................... 787,500
70,000 Noble Drilling Corp........................... 1,216,250
35,000 Nuevo Energy Co............................... 1,203,125
80,000 Oceaneering International Inc................. 1,160,000
35,000 POGO Producing Co............................. 1,281,875
203,000 Pool Energy Services Co....................... 2,639,000
25,000 Pride Petroleum Services Inc.................. 431,250
30,000 Reading & Bates Corp.......................... 671,250
10,000 Texaco, Inc................................... 1,055,000
60,000 Tidewater Inc................................. 2,407,500
20,000 USX-Marathon Group............................ 552,500
30,000 Vintage Petroleum............................. 847,500
22,675 Weatherford Enterra, Inc...................... 719,931
FINANCIAL (13.7%)
62,500 First Financial Corp (Wisc.).................. 1,648,438
40,000 Firstar Corp.................................. 1,180,000
40,400 National City Corp............................ 1,969,500
35,000 PMI Group..................................... 1,789,375
60,000 PNC Bank Corp................................. 2,467,500
40,000 Security Capital Corp......................... 3,560,000
54,450 Washington Federal, Inc....................... 1,306,800
<CAPTION>
Value
Shares (Note 1)
- ------ --------
<S> <C> <C>
FOODS & RESTAURANT (11.1%)
46,400 Consolidated Products......................... 667,000
90,000 IHOP Corp..................................... 2,362,500
55,000 Lancaster Colony.............................. 2,261,875
80,000 McDonald's Corp............................... 4,290,000
43,900 Morton's Restaurant Group..................... 663,987
40,000 Rare Hospitality Intl......................... 465,000
125,000 Shoney's Inc.................................. 578,125
MANUFACTURING (9.0%)
75,000 Applied Power................................. 3,178,125
31,400 Belden Inc.................................... 965,550
40,000 ITI Technologies.............................. 595,000
90,000 NN Ball & Roller.............................. 956,250
40,000 Plexus Corp................................... 1,050,000
145,000 Shaw Group Inc................................ 1,957,500
14,500 Wolverine Tube................................ 377,000
RETAIL (5.0%)
110,000 Walgreen Company ............................. 5,060,000
TOBACCO (7.0%)
120,000 Philip Morris Cos., Inc....................... 4,725,000
90,000 UST, Inc...................................... 2,351,250
TRANSPORTATION (5.6%)
100,000 Custom Chrome, Inc............................ 1,175,000
75,000 Harley-Davidson, Inc.......................... 2,962,500
114,000 Starcraft Automotive Corp. ................... 370,500
66,800 Wabash National Corp.......................... 1,194,050
======== ------------
TOTAL COMMON STOCKS 98,755,406
(COST $63,198,351) ------------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<S> <C> <C>
SHORT-TERM SECURITIES (2.4%)
COMMERCIAL PAPER - DISCOUNTED
509,000 Norwest Financial Inc.
Note due 5/2/97 508,923
1,258,000 Ford Motor Credit Corp.
Note due 5/6/97 1,257,042
240,000 Deere & Co. Note
Note due 5/9/97 239,707
377,000 Norwest Financial Inc.
Note due 5/9/97 376,538
------------
TOTAL SHORT-TERM SECURITIES 2,382,210
(COST $2,382,210)
TOTAL INVESTMENTS (99.8%) 101,137,616
(COST $65,580,561)
CASH AND RECEIVABLES
LESS LIABILITIES (.2%) 152,471
------------
NET ASSETS (100%) $101,290,087
------------
</TABLE>
See accompanying notes to financial statements
<PAGE> 6
SENTRY FUND, INC.
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,
------------------------------------
FOR SIX MONTHS
ENDING 4-30-97 1996 1995 1994 1993 1992
-------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 18.19 $ 16.29 $ 15.39 $ 15.93 $ 15.17 $ 15.34
------- ------- ------- ------- ------- -------
Income From Investment Operations
- ---------------------------------
Net Investment Income 0.06 .17 0.18 .18 .23 .29
Net Realized and Unrealized Gains
(Losses) on Investments 1.03 3.01 1.65 .53 1.12 1.03
------- ------- ------- ------- ------- -------
Total from Investment Operations 1.09 3.18 1.83 .71 1.35 1.32
Less Distributions
- ------------------
Dividends From Net Investment Income (.11) (.17) (.17) (.22) (.23) (.35)
Distribution From Net Realized Gains (.86) (1.11) (.76) (1.03) (.36) (1.14)
------- ------- ------- ------- ------- -------
Total Distributions (.97) (1.28) (.93) (1.25) (.59) (1.49)
Net Asset Value End of Period $ 18.31 $ 18.19 $ 16.29 $ 15.39 $ 15.93 $ 15.17
======= ======= ======= ======= ======= =======
Total Return 6.03% 20.60% 12.97% 4.86% 9.17% 9.09%
Net Assets, End of Period (in Thousands) $101,290 $97,154 $84,374 $79,622 $76,315 $69,454
Ratio of Expenses to Average Net Assets .43% .84% .86% .86% .87% .88%
Ratio of Net Investment Income to
Average Net Assets .32% 0.95% 1.17% 1.19% 1.48% 1.95%
Portfolio Turnover Rate 22.98% 28.28% 26.54% 16.31% 22.34% 12.58%
</TABLE>
DIVIDEND NOTICE
On June 2, 1997 The Fund Directors declared a dividend from net investment
income of .05 per share and a long-term capital gain distribution of .05 per
share, payable June 11, 1997 to shareholders of record June 9, 1997.
