<PAGE> 1
BOARD OF DIRECTORS
Thomas R. Copps
David W. Graebel
William J. Lohr
Dale R. Schuh, Chairman
Steven J. Umland
OFFICERS
James J. Weishan, President
Wallace D. Taylor, Vice 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
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
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 other
pertinent information.
SENTRY FUND, INC.
ANNUAL REPORT
OCTOBER 31, 2000
[PHOTO]
- NO SALES CHARGES -
- NO REDEMPTION FEES -
- NO 12b-1 FEES -
<PAGE> 2
SENTRY FUND, INC.
1800 North Point Drive - Stevens Point, Wisconsin 54481
MESSAGE TO SHAREHOLDERS DECEMBER 7, 2000
The stock market has experienced significant gyrations over the past 12 months.
Investors are trying to come to grips with continued high valuations in
technology stocks despite the large correction in stock prices in this sector.
Numerous technology companies have indicated earnings and revenue growth will be
less robust over the next 6 - 12 months. Economic growth also appears to be
slowing, placing more doubts in the minds of investors.
As of the end of October 2000, the NASDAQ was down 17.2% for the first 10 months
of the year and the Standard and Poors 500 declined 1.7%. Technology related
stocks have performed poorly over the last 6 months, led by Internet and
telecommunications stocks. We believe these sectors will remain weak until
revenues improve.
The U.S. Gross Domestic Product slowed somewhat in the third quarter, recording
a modest increase of 2.7%. As a result, the Federal Reserve has taken a neutral
stance with regard to interest rates. We anticipate the Fed will likely maintain
its current posture for the foreseeable future.
The market should remain in turmoil through year-end 2000. There is much
uncertainty with regard to the economic outlook and investors will continue
their cautious posture.
We appreciate your participation and support of the Sentry Fund. We look forward
to your continued participation in the future.
Sincerely,
/s/ James J. Weishan
James J. Weishan
President
[GRAPH]
Average Annual Total Return** Periods Ended October 31, 2000
<TABLE>
<CAPTION>
1 year 5 year 10 year
<S> <C> <C> <C>
Sentry Fund 0.46% 10.73% 12.45%
S&P "500" 6.20% 21.71% 19.46%
Russell 2000 17.50% 12.49% 17.16%
</TABLE>
** "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.
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 reinvestment of all
income.
<PAGE> 3
PORTFOLIO OF INVESTMENT SECURITIES -- October 31, 2000 SENTRY FUND, INC.
<TABLE>
<CAPTION>
VALUE
SHARES COMMON STOCKS (93.1%) (NOTE 1)
------ ---------------------- ----------
<S> <C> <C>
BASIC MATERIALS (1.0%)
9,964 Alcoa Inc. .................................. $ 285,842
5,300 E. I. du Pont de Nemours..................... 240,487
7,500 International Paper Co. ..................... 274,688
BUSINESS SERVICE (3.5%)
20,000+ Fiserv, Inc. ................................ 1,048,750
50,000+ Tetra Tech, Inc. ............................ 1,737,500
CAPITAL GOODS (5.1%)
8,200 Boeing Co. .................................. 556,063
7,900 Caterpillar Inc. ............................ 276,994
53,100 General Electric Co. ........................ 2,910,544
8,300+ Solectron Corp. ............................. 365,200
COMPUTER EQUIPMENT (7.3%)
2,021+ Agilent Technologies, Inc. .................. 93,598
36,600+ Cisco Systems Inc. .......................... 1,971,825
10,600+ EMC Corp. ................................... 944,062
10,600 Hewlett-Packard Co. ......................... 492,238
15,000 Int'l. Business Machines Corp. .............. 1,477,500
8,400+ Sun Microsystems Inc. ....................... 931,350
CONSUMER PRODUCTS (1.2%)
8,000 Gillette Co. ................................ 279,000
6,700 Kimberly-Clark Corp. ........................ 442,200
12,000 Newell Rubbermaid Inc. ...................... 230,250
CONSUMER SERVICES (0.3%)
7,500 Block (H & R), Inc. ......................... 267,656
DRUG & HEALTH CARE (8.6%)
6,600 American Home Products Corp. ................ 419,100
4,600+ Amgen Inc. .................................. 266,512
5,300 Baxter International Inc. ................... 435,594
13,000 Becton Dickinson & Co. ...................... 435,500
18,100+ Boston Scientific Corp. ..................... 288,469
10,600 Bristol-Myers Squibb Co. .................... 645,938
5,600 Eli Lilly and Co. ........................... 500,500
5,300+ Guidant Corp. ............................... 280,569
7,300 Johnson & Johnson............................ 672,512
12,600 Merck & Co., Inc. ........................... 1,133,212
33,350 Pfizer Inc. ................................. 1,440,303
7,800 Schering-Plough Corp. ....................... 403,163
ENERGY (14.5%)
8,900 Apache Corp. ................................ 492,281
20,000+ B J Services, Co. ........................... 1,048,750
30,000 ENSCO Int'l. Inc. ........................... 997,500
18,400 Exxon Mobil Corporation...................... 1,641,050
40,000+ Global Marine Inc. .......................... 1,060,000
30,000+ Marine Drilling Cos., Inc. .................. 716,250
20,000+ Noble Drilling Corp. ........................ 831,250
40,000+ Rowan Companies Inc. ........................ 1,007,500
11,500 Royal Dutch Petroleum Co. ................... 682,813
5,900 Schlumberger Ltd. ........................... 449,138
12,000 Texaco, Inc. ................................ 708,750
24,000 USX-Marathon Group........................... 652,500
38,500+ Weatherford Int'l., Inc. .................... 1,405,250
ENTERTAINMENT (3.2%)
12,600 Carnival Corp. .............................. 312,638
17,300 Disney (Walt) Co. (The)...................... 619,556
8,900 Time Warner Inc. ............................ 675,599
13,600 Tribune Co. ................................. 504,050
8,400+ Viacom Inc. ................................. 477,750
FINANCIAL (11.1%)
14,600 American Express Co. ........................ 876,000
53,119 Associated Banc-Corp. ....................... 1,278,176
9,100 Bank of America Corp. ....................... 437,369
16,200 Bank of New York Cos. Inc. .................. 932,512
7,050 Chase Manhattan Corp. ....................... 320,775
24,000 Citigroup Inc. .............................. 1,263,000
12,600 Federal National Mortgage Assoc. ............ 970,200
14,300 First Union Corp. ........................... 433,469
36,400 Firstar Corp. ............................... 716,625
2,800 Morgan (JP) & Co. Inc. ...................... 463,400
9,700 Morgan Stanley Dean Witter & Co. ............ 779,031
10,700 Wells Fargo.................................. 495,544
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ --------
<S> <C> <C>
FOOD & BEVERAGES (3.9%)
8,800 Anheuser-Busch Cos. Inc. .................. $ 402,600
12,800 Coca-Cola Co. ............................. 772,800
15,900 ConAgra Food Inc. ......................... 339,862
7,600 Hershey Foods Corp. ....................... 412,775
16,600+ Kroger Co. ................................ 374,537
9,300 PepsiCo, Inc. ............................. 450,469
18,200 Sara Lee Corp. ............................ 392,438
INSURANCE (1.4%)
11,250 American Int'l Group, Inc. ................ 1,102,500
INTERNET(1.1%)
16,900+ America Online Inc. ....................... 852,267
MANUFACTURING (7.9%)
20,000+ APW Ltd. .................................. 923,750
20,000 Black & Decker Corp. ...................... 752,500
70,000 Manitowoc Co. ............................. 1,903,125
50,000 Oshkosh Truck Corp. ....................... 2,056,250
12,700 Snap-On Inc. .............................. 324,644
7,700 Tyco International Ltd. ................... 436,494
RESTAURANT (3.4%)
118,250+ Consolidated Products, Inc. ............... 894,265
15,000 McDonald's Corp. .......................... 465,000
100,000 Ruby Tuesday, Inc. ........................ 1,356,250
RETAIL (3.9%)
13,300+ Federated Department Stores, Inc. ......... 433,081
12,000 Home Depot Inc. ........................... 516,000
24,000 Wal-Mart Stores, Inc. ..................... 1,089,000
25,000 Walgreen Company........................... 1,140,625
SEMICONDUCTORS(4.0%)
4,800+ Applied Materials Inc. .................... 255,000
10,000+ Cypress Semiconductor Corp. ............... 374,375
35,600 Intel Corp. ............................... 1,602,000
2,500+ JDS Uniphase Corp. ........................ 203,437
5,800 Linear Technology Corp. ................... 374,462
8,600 Texas Instruments Inc. .................... 421,938
SOFTWARE & SERVICES (5.0%)
60,000 Avnet, Inc. ............................... 1,612,500
5,900+ Computer Sciences Corp. ................... 371,700
10,000+ Networks Associates, Inc. ................. 192,500
30,600+ Oracle Corp. .............................. 1,009,800
58,400 Pioneer-Standard Electronics, Inc. ........ 810,300
TELECOM (3.6%)
20,000 AT&T Corp. ................................ 463,750
10,000 Bellsouth Corp. ........................... 483,125
5,600+ Nextel Communications, Inc. ............... 215,250
14,200 Nortel Networks Corp. ..................... 646,100
18,200 SBC Communications Inc. ................... 1,049,912
TOBACCO (0.9%)
20,000 Philip Morris Cos., Inc. .................. 732,500
TRANSPORTATION (1.5%)
26,922 Ford Motor Co. ............................ 703,335
10,000 Harley-Davidson, Inc. ..................... 481,875
2,016 Visteon Corp. ............................. 35,664
UTILITIES (0.7%)
15,000 TXU Corp. ................................. 555,937
-----------
TOTAL COMMON STOCKS........................ 74,982,537
(COST $62,594,850) -----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT SHORT-TERM SECURITIES (9.2%)
------ ----------------------------
<S> <C> <C>
COMMERCIAL PAPER - DISCOUNTED
$ 845,000 Wells Fargo Financial Inc.
Note due 11/01/00 845,000
1,808,000 General Motors
Note due 11/02/00 1,807,673
1,621,000 Household Finance Corp.
Note due 11/09/00 1,618,654
1,071,000 American General Finance Corp.
Note due 11/14/00 1,068,487
1,266,000 Ford Motor Credit Corp.
Note due 11/16/00 1,262,572
823,000 General Motors
Note due 11/16/00 820,769
-----------
TOTAL SHORT-TERM SECURITIES 7,423,155
-----------
(Cost $7,423,155)
TOTAL INVESTMENTS (102.3%) 82,405,692
(Cost $70,018,005)
CASH AND RECEIVABLES
LESS LIABILITIES (2.3%) (1,885,505)
-----------
NET ASSETS (100%) $80,520,187
===========
</TABLE>
+Non-income producing security during the year ended October 31, 2000.
See accompanying notes to financial statements
<PAGE> 4
SENTRY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities, at
market value (cost $70,018,005) $82,405,692
Cash 297,909
Receivables:
Dividends 54,410
-----------
Total assets $82,758,011
LIABILITIES:
Investment securities purchased 2,070,452
Investment advisory fees 154,269
Transfer agent fees 2,519
Custodian fees 784
Professional services 9,800
-----------
Total liabilities 2,237,824
-----------
NET ASSETS $80,520,187
===========
ANALYSIS OF NET ASSETS:
Paid in capital $54,303,294
Undistributed net investment income 260,949
Accumulated undistributed net realized gain
on sales of investments 13,568,257
Net unrealized appreciation of investments 12,387,687
-----------
Net assets, for 5,403,474 shares outstanding $80,520,187
===========
Net asset value and
redemption and offering price per share $14.90
===========
</TABLE>
STATEMENT OF OPERATIONS
For the Year Ended October 31, 2000
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $901,075
Interest 299,207
--------
Total investment income $ 1,200,282
Expenses:
Investment advisory fees 647,988
Transfer agent fees 30,257
Professional services 15,932
Printing, stationery and postage 6,872
Licenses and fees 19,848
Directors' fees and expenses 4,916
Other expenses 38,480
--------
Total expenses 764,293
------------
Net investment income 435,989
------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on sales of investment securities 14,012,972
Decrease in unrealized appreciation
of investment securities (14,273,924)
------------
Net realized and unrealized gain
on investment securities (260,952)
------------
Net increase in net assets resulting
from operations $ 175,037
============
</TABLE>
See accompanying notes to financial statements
<PAGE> 5
SENTRY FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended October 31, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
DECREASE IN NET ASSETS
OPERATIONS:
Net investment income $ 435,989 $ 883,822
Net realized gain on sales
of investments 14,012,972 13,802,594
Decrease in unrealized
appreciation on investments (14,273,924) (14,526,417)
----------- -----------
Net change in net assets
resulting from operations 175,037 159,999
----------- -----------
DISTRIBUTIONS:
Dividends from net
investment income (694,731) (673,692)
Distributions of net realized gains (13,863,090) (11,228,402)
----------- -----------
Total distributions to shareholders (14,557,821) (11,902,094)
----------- -----------
SHARE TRANSACTIONS:
Net proceeds from sale of shares 2,299,681 3,763,233
Net asset value of shares issued to
shareholders in reinvestment
of distributions 14,322,617 11,731,012
----------- -----------
16,622,298 15,494,245
Cost of shares redeemed (17,408,422) (19,912,629)
----------- -----------
Net decrease in net assets
derived from share transactions (786,124) (4,418,384)
----------- -----------
Total decrease in net assets (15,168,908) (16,160,479)
NET ASSETS:
Beginning of year 95,689,095 111,849,574
----------- -----------
End of year $80,520,187 $ 95,689,095
=========== ============
</TABLE>
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 financial state-
ments have been prepared in conformity with accounting principles generally
accepted in the United States of America which require management to make
certain estimates and assumptions at the date of the financial statements.
Actual results could differ from those estimates.
The following summarizes the significant accounting policies of the Fund.
Security Valuation -- Portfolio securities which are traded on a national
securities exchange are valued at the last price as of the close of trading
on the New York Stock Exchange or, if there has been no sale on that day,
at the last bid price. Securities traded on the over-the-counter market are
valued at the mean between the last quoted bid and asked prices. Short-term
securities are stated at amortized cost, which approximates fair value.
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.
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.
See accompanying notes to financial statements
<PAGE> 6
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. CAPITAL SHARES
At October 31, 2000, there were 10,000,000 shares of $1 par value capital
stock authorized. Transactions in capital stock for the years ended October
31, 2000 and 1999 were as follows:
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Shares sold 154,090 199,698
Shares issued to shareholders in reinvestment of distributions 987,181 638,663
---------- ----------
1,141,271 838,361
Shares redeemed (1,161,122) (1,064,164)
---------- ----------
Net decrease in shares outstanding (19,851) (225,803)
========== ==========
</TABLE>
3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of common stock during the year ended October 31, 2000
aggregated $74,783,804 and $92,776,891, 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 assets 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 1.5% of the first $30,000,000 and 1% of the balance
of the average daily net assets 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, 2000.
Sentry Equity Services, Inc., (SESI), as principal underwriter of the Fund,
paid $5,713 in commissions to sales representatives for the year ended
October 31, 2000. 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, 2000, Sentry Insurance and the Sentry 401(k) Plan held
31% and 24%, respectively, of the Fund's outstanding capital stock.
5. DISTRIBUTIONS TO SHAREHOLDERS
Net realized gains from security transactions are distributed to
shareholders by the end of the succeeding year, unless there are capital
loss carryovers which may be applied against such realized gains. On
December 16, 1999 and June 8, 2000, the Fund distributed $13,358,322 ($2.51
per share) and $504,768 ($.09 per share), respectively, related to net
realized capital gains. Undistributed realized capital gains and net
investment income as of October 31, 2000 will be paid out on December 14,
2000. On December 16, 1999, and June 8, 2000, the Fund distributed $638,645
($.12 per share) and $56,086 ($.01 per share), respectively, from net
investment income.
<PAGE> 7
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, 2000 were as
follows:
<TABLE>
<S> <C>
Gross unrealized gains $15,935,492
Gross unrealized losses (3,547,805)
-----------
Net $12,387,687
===========
</TABLE>
The aggregate investment cost for both financial statement and Federal
income tax purposes at October 31, 2000 was $70,018,005.
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,
-----------------------------------------------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.64 $ 19.80 $ 23.95 $ 18.19 $ 16.29
-------- -------- -------- -------- -------
Income from investment operations
Net investment income .08 .15 .11 .13 .17
Net realized and unrealized gains (losses)
on investments (.09) (.19) (.30) 6.70 3.01
-------- -------- -------- -------- -------
Total from investment operations (.01) (.04) (.19) 6.83 3.18
Less distributions
Dividends from net investment income (.13) (.12) (.11) (.16) (.17)
Distribution from net realized gains (2.60) (2.00) (3.85) (.91) (1.11)
-------- -------- -------- -------- -------
Total distributions (2.73) (2.12) (3.96) (1.07) (1.28)
Net asset value end of period $ 14.90 $ 17.64 $ 19.80 $ 23.95 $ 18.19
======== ======== ======== ======== =======
Total return .46% (.57%) (.76%) 39.23% 20.60%
Net assets, end of period (in thousands) $ 80,520 $95,689 $111,850 $118,278 $97,154
Ratio of expenses to average net assets .88% .84% .83% .83% .84%
Ratio of net investment income to
average net assets .50% .81% .55% .61% .95%
Portfolio turnover rate 91.38% 24.33% 29.85% 40.75% 28.28%
</TABLE>
See accompanying notes to financial statements
<PAGE> 8
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF SENTRY FUND, INC.:
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investment securities, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Sentry Fund, Inc. (the "Fund") at
October 31, 2000, and 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 accounting principles generally accepted in the United States of
America. These financial statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of the Fund's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 2000 by
correspondence with the custodian and broker, provide a reasonable basis for our
opinion.
PRICEWATERHOUSECOOPERS LLP
Milwaukee, Wisconsin
November 21, 2000
2000 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.
