<PAGE> 1
SENTRY FUND, INC.
[PHOTO]
No sales charges
--
No redemption fees
--
No 12b-1 fees
--
SEMI-ANNUAL REPORT
APRIL 30, 1998
[SENTRY FUND LOGO]
BOARD OF DIRECTORS
Thomas R. Copps
David W. Graebel
William J. Lohr
Dale R. Schuh, Chairman
Steven J. Umland
OFFICERS
Steven R. Boehlke, President
William M. O'Reilly, Secretary
William J. Lohr, Treasurer
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.
<PAGE> 2
SENTRY FUND, INC.
1800 North Point Drive o Stevens Point, Wisconsin 54481
MESSAGE TO SHAREHOLDERS JUNE 12, 1998
We are pleased to provide this Sentry Fund, Inc., semi-annual report. The
following are investment results for the time periods ended April 30, 1998:
<TABLE>
<CAPTION>
Average Annual
Total Return* Total Return*
------------- -------------
<S> <C> <C>
1 Year 41.8% 41.8%
5 Year 132.4% 18.4%
10 Year 338.6% 15.9%
</TABLE>
The domestic economy recorded further growth during the past six months. Real
GDP increased 3.7% in the fourth calendar quarter of 1997, and 4.2% in the first
quarter of 1998. While we expect the economy to continue growing throughout
1998, the pace of that growth is likely to slow.
While some recent, strong monthly economic reports have prompted predictions of
imminent action by the Federal Reserve Board to raise interest rates, monetary
policy still holds a steady course. Long-term interest rates have been stable in
early 1998, with 30-year U.S. Treasury Bond yields hovering near 6%.
Large capitalization stocks have continued to be the central focus for equity
investors, with many mid-cap and small-cap issues showing lagging performance.
The popular indices have recorded spectacular gains in the first calendar
quarter and are now experiencing historically high valuation levels. We remain
optimistic on the outlook for the stock market, based on our expectation of
continued economic growth and low inflation.
At the January 15, 1998, shareholders' meeting, Thomas R. Copps and William J.
Lohr were elected Directors of the Fund until the next annual shareholders'
meeting. There were 3,495,361 shares voted in favor and 19,298 shares
withholding votes by proxy.
We thank you for your continuing interest in Sentry Fund and look forward to
reporting our 12-month financial results in the Fund's Annual Report to be
published in December.
Sincerely,
Steven R. Bowhlke
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. Both the value of an investment in the Fund and the
return on the investment 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, 1998
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments in securities, at
market value (cost $72,565,802) $129,256,875
Cash 89,584
Dividends receivable 63,634
------------
Total assets $129,410,093
LIABILITIES:
Investment securities purchased 3,167,622
Investment advisory fees 230,564
Transfer agent fees 2,443
Custodian fees 444
Professional services 14,287
Insurance coverage 5,204
Printing charges payable 4,466
------------
Total liabilities 3,425,030
------------
NET ASSETS $125,985,063
============
ANALYSIS OF NET ASSETS:
Capital shares $ 63,000,901
Undistributed net realized gain on
sales of investments 6,035,241
Unrealized appreciation of investments 56,691,073
Undistributed net investment income 257,848
------------
Net assets applicable to outstanding shares $125,985,063
============
Capital shares outstanding 5,824,157
============
Net Asset Value and
Redemption and Offering Price per share $21.63
============
</TABLE>
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $ 646,279
Interest 167,713
----------
Total investment income $ 813,992
Expenses:
Investment advisory fees 451,063
Transfer agent fees 13,299
Professional services 9,822
Printing, stationery and postage 4,466
Licenses and fees 21,946
SEC filing fees 1,075
Directors' fees 1,500
Other expenses 7,488
----------
Total expenses 510,659
----------
Net investment income $ 303,333
----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on sales of investments 6,035,273
Increase in unrealized appreciation
of investments 2,931,051
----------
Net realized and unrealized gain
on investments 8,966,324
----------
Net increase in net assets resulting
from operations $9,269,657
==========
</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, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income $ 303,333 $ 327,267
Net realized gain on sales
of investments 6,035,273 7,694,739
Increase (Decrease) in unrealized
appreciation on investments 2,931,051 (2,252,451)
------------- -------------
Net change in net assets
resulting from operations 9,269,657 5,769,555
------------- -------------
DISTRIBUTIONS:
Dividends from net investment income (297,470) (586,286)
Distributions of net realized gains (18,839,782) (4,583,693)
------------- -------------
Total distributions to shareholders (19,137,252) (5,169,979)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 4,136,376 2,749,169
Net asset value of shares issued to
shareholders in reinvestment
of distributions 18,995,865 5,116,768
------------- -------------
23,132,241 7,865,937
Cost of shares redeemed (5,557,724) (4,328,952)
------------- -------------
Increase in net assets derived
from capital share transactions 17,574,517 3,536,985
------------- -------------
NET ASSETS:
Total increase in net assets 7,706,922 4,136,561
Beginning of year 118,278,141 97,153,526
------------- -------------
End of year (including
undistributed net investment
income of $257,848 and
$191,809 respectively $ 125,985,063 $ 101,290,087
============= =============
</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 $21,092,513 and $21,244,166,
respectively.
<PAGE> 5
PORTFOLIO OF INVESTMENT SECURITIES -- April 30, 1998 SENTRY FUND, INC.
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ --------
<S> <C> <C>
COMMON STOCKS (97.8%)
BUSINESS & CONSUMER SERVICES (13.3%)
150,000 Analysts Int'l Corp........... $4,350,000
25,000 Deluxe Corp................... 837,500
40,000 Diamond Home Service, Inc..... 215,000
100,000 Ennis Business Form Inc....... 1,200,000
67,500 FIServe, Inc.................. 4,412,812
25,000 Block (H & R) Inc............. 1,125,000
196,500 Richardson Electronics........ 2,456,250
235,000 Richey Electronics Inc........ 2,232,500
DRUG & HEALTH CARE (2.1%)
15,000 Bristol-Myers Squibb Co....... 1,588,125
160,000 Endosonics Corp............... 1,040,000
ELECTRICAL EQUIPMENT (1.4%)
20,000 General Electric Co........... 1,702,500
ELECTRONICS (10.9%)
200,000 Berg Elenctronics............. 4,762,500
60,000 Int'l. Business Machines Corp. 6,952,500
190,000 Savior Technology Group....... 2,030,625
ENERGY (13.6%)
27,300 Cabot Oil & Gas Corp.......... 639,844
451,700 Coho Energy Inc............... 3,415,981
71,000 Dawson Production Service..... 931,875
10,000 Exxon Corporation............. 729,375
65,000 Marine Drilling Companies..... 1,580,312
45,800 Noble Drilling Corp........... 1,479,913
80,000 Oceaneering International Inc. 1,835,000
250,000 Petroglyph Engery Inc......... 2,031,250
50,000 Pogo Producing Co............. 1,603,125
29,500 R & B Falcon Corp............. 945,844
20,000 Texaco, Inc................... 1,230,000
20,000 USX-Marathon Group............ 716,250
FINANCIAL (12.9%)
17,500 Amsouth Bancorporation........ 1,091,562
38,632 Associated Banc-Corp.......... 2,028,180
40,000 Firstar Corp.................. 1,492,500
40,400 National City Corp............ 2,797,700
60,000 PNC Bank Corp................. 3,626,250
21,200 Regions Financial Corp........ 924,850
60,750 Southtrust Corp............... 2,593,266
59,985 Washington Federal, Inc....... 1,684,547
FOODS & RESTAURANT (12.0%)
70,000 Consolidated Products......... 1,426,250
41,000 Cooker Restaurant Corp........ 481,750
90,000 IHOP Corp..................... 3,960,000
82,500 Lancaster Colony Corp......... 3,186,562
70,000 McDonald's Corp............... 4,331,250
43,900 Morton's Restaurant Group..... 1,081,038
20,000 US Foodservice................ 706,250
</TABLE>
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ --------
<S> <C> <C>
MANUFACTURING (13.7%)
150,000 Applied Power................. 5,606,250
50,000 General Cable Corp............ 2,265,625
60,000 ITITechnologies............... 1,920,000
60,000 Manitowoc Co. Inc............. 2,797,500
54,000 Rayovac Corp.................. 1,255,500
145,000 Shaw Group Inc................ 3,407,500
RETAIL (7.3%)
9,678 Consolidated Stores Corp. ..... 387,120
195,000 Hancock Fabrics Inc. ......... 2,900,625
170,000 Walgreen Company ............. 5,865,000
TOBACCO (5.5%)
120,000 Philip Morris Cos., Inc....... 4,477,500
90,000 UST, Inc...................... 2,480,625
TRANSPORTATION (5.1%)
120,000 Harley-Davidson, Inc.......... 4,320,000
66,800 Wabash National Corp.......... 2,062,450
-----------
TOTAL COMMON STOCKS 123,201,731
(COST $66,510,658) -----------
Principal
Amount
------
SHORT-TERM SECURITIES (4.8%)
COMMERCIAL PAPER - DISCOUNTED
2,710,000 Ford Motor Credit Co.
Note due 5/4/98 2,708,753
1,296,000 General Motors Accept. Corp.
Note due 5/6/98 1,295,004
1,392,000 Household Financial Corp.
Note due 5/8/98 1,390,504
662,000 Deere & Co.
Note due 5/12/98 660,883
TOTAL SHORT-TERM SECURITIES 6,055,144
(COST $6,055,144)
TOTAL INVESTMENTS (102.6%) 129,256,875
(COST $72,565,802)
CASH AND RECEIVABLES
LESS LIABILITIES (-2.6%) (3,271,812)
------------
NET ASSETS (100%) $125,985,063)
============
</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 4-30-98 1997 1996 1995 1994 1993
-------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 23.95 $ 18.19 $ 16.29 $ 15.39 $ 15.93 $ 15.17
------- -------- -------- -------- -------- --------
Income From Investment Operations
Net Investment Income .06 .13 .17 .18 .18 .23
Net Realized and Unrealized Gains
on Investments 1.48 6.70 3.01 1.65 .53 1.12
------- -------- -------- -------- -------- --------
Total from Investment Operations 1.54 6.83 3.18 1.83 .71 1.35
Less Distributions
Dividends From Net Investment Income (.06) (.16) (.17) (.17) (.22) (.23)
Distribution From Net Realized Gains (3.80) (.91) (1.11) (.76) (1.03) (.36)
------- -------- -------- -------- -------- --------
Total Distributions (3.86) (1.07) (1.28) (.93) (1.25) (.59)
Net Asset Value End of Period $ 21.63 $ 23.95 $ 18.19 $ 16.29 $15.39 $ 15.93
======= ======== ======== ======== ======== ========
Total Return 6.08% 39.23% 20.60% 12.97% 4.86% 9.17%
Net Assets, End of Period (in Thousands) $125,985 $118,278 $97,154 $84,374 $79,622 $76,315
Ratio of Expenses to Average Net Assets .42% .83% .84% .86% .86% .87%
Ratio of Net Investment Income to
Average Net Assets .25% .61% .95% 1.17% 1.19% 1.48%
Portfolio Turnover Rate 18.20% 40.75% 28.28% 26.54% 16.31% 22.34%
</TABLE>
DIVIDEND NOTICE
On May 12, 1998, 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, 1998, to shareholders of record June 9, 1998.
