AMERITOR
INVESTMENT
FUND
(Formerly Steadman Investment Fund)
SEMI-ANNUAL
REPORT
December 31, 1998
An Ameritor NO-LOAD Mutual Fund
AMERITOR FINANCIAL CORPORATION
(Formerly Steadman Security Corporation)
[LOGO]
Investment Adviser
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AMERITOR INVESTMENT FUND
Dear Shareholder:
On September 23, 1998 the Board of Trustees voted to rename your Fund the
Ameritor Investment Fund. The Fund's investment advisor has been renamed
Ameritor Financial Corporation. In 1998, a merger with the three other Funds of
the then named Steadman Group of Funds was not accomplished for lack of quorum
necessary for this vote by the shareholders of all the Funds. Thereupon, the
Trustees voted to continue operating each Fund separately under the new name of
Ameritor.
The favorable performance of your Fund in the first half of this fiscal
year confirms that the changes enacted by the new management have been
effective. The Fund's return during this period placed it higher than 90% of
U.S. equity funds and well above the S&P 500 Index, thus making the list of best
performers in 1998.
Even after several years of having a strong, healthy economy, the U.S.
continues to experience good growth with low unemployment and interest rates.
But the pace of economic growth is expected to moderate as global economic
problems affect corporate earnings and lessen expectations of sustaining rising
stock market prices at the 1998 rate.
The Fund's portfolio is positioned to continue the good performance already
achieved this year.
We appreciate your continued confidence.
Sincerely,
/s/ Max Katcher
Max Katcher
President
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AMERITOR INVESTMENT FUND
Portfolio of Investments
December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 1)
----------- -----------
<S> <C> <C>
COMMON STOCKS -- 100%
Aeronautical Systems -- 2.0%
Raytheon Co. CI.A ............................................ 843 $ 43,573
-----------
Total Aeronautical Systems 43,573
-----------
Air Transportation -- 2.0%
Alaska Air Group, Inc. ....................................... 1,000 44,250
-----------
Total Air Transportation 44,250
-----------
Computer Peripherals -- 19.0%
Cisco Systems (a) ............................................ 4,500 417,656
-----------
Total Computer Peripherals 417,656
-----------
Computer Software -- 1.0%
Oracle Corporation (a) ....................................... 500 21,563
-----------
Total Computer Software 21,563
-----------
Computer Systems Design -- 9.7%
Sun Microsystems (a) ......................................... 2,500 214,062
-----------
Total Computer Systems Design 214,062
-----------
Electronics -- 2.7%
General Motors Class "H" ..................................... 1,500 59,531
-----------
Total Electronics 59,531
-----------
Oil and Gas Drilling -- 2.5%
Global Marine Inc. (a) ....................................... 6,000 55,125
-----------
Total Oil and Gas Drilling 55,125
-----------
Plastic & Rubber Mfg -- 4.4%
Dupont E I De Nemours & Co ................................... 1,800 95,513
-----------
Total Plastic & Rubber Mfg 95,513
-----------
</TABLE>
(a) Non-income producing security
(Continued)
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AMERITOR INVESTMENT FUND
Portfolio of Investments
December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Value
Shares (Note 1)
----------- -----------
<S> <C> <C>
Telecom Mfg -- 30.1%
Lucent Technologies .......................................... 6,000 $ 660,000
-----------
Total Telecom Mfg 660,000
-----------
Telephone Services -- 26.6%
MCI Worldcom Inc. (a) ........................................ 5,000 358,750
AT&T ......................................................... 3,000 225,750
-----------
Total Telephone Services 584,500
Total Portfolio of Investments (Cost $1,028,736) $ 2,195,773
===========
</TABLE>
(a) Non-income producing security
The accompanying notes are an integral part of the financial statements.
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AMERITOR INVESTMENT FUND
Statement of Assets and Liabilities
December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investments at value (Cost $1,028,735) (Note 1) $ 2,195,773
Cash and cash equivalents (Note 1) 43,723
Interest receivable 216
-----------
Total assets 2,239,712
-----------
Liabilities:
Accounts payable and accrued expenses 10,152
Investment advisory and service fees payable (Note 4) 5,296
Other payable to affiliate (Note 4) 8,121
-----------
Total liabilities 23,569
-----------
Net Assets $ 2,216,143
===========
Net assets consist of:
Accumulated net investment loss $(1,816,596)
Unrealized appreciation of investments 1,167,037
Accumulated net realized losses (595,013)
Capital paid in less distributions since inception 3,460,715
-----------
$ 2,216,143
===========
Net asset value, offering price and redemption price per share
($2,216,143 / 1,653,317 shares of no par value trust shares) $ 1.34
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
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AMERITOR INVESTMENT FUND
Statement of Operations
for the six months ended December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Investment Income:
Dividends $ 3,067
Interest 2,709
--------
Total income $ 5,776
---------
Expenses:
Salaries and employee benefits (Note 4) 39,919
Shareholder servicing fee (Note 4) 21,007
Professional fees 16,932
Investment advisory fee (Note 4) 9,169
Rent 7,201
Computer services 8,675
Reports to shareholders 3,091
Miscellaneous 2,974
Custodian fees 750
Trustees' fees and expenses (Note 4) 661
--------
Total expenses 110,379
---------
Net investment loss (104,603)
---------
Realized and Unrealized Gain (Loss) on Investments (Notes 1 and 3):
Net realized gain from investment transactions --0--
Change in unrealized appreciation of investments 465,745
---------
Net gain on investments 465,745
---------
Net increase in net assets resulting from operations $ 361,142
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
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AMERITOR INVESTMENT FUND
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the 6 months
ended For the year For the year
December 31, ended June 30, ended June 30,
1998 (1) 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Increase (decrease) in net assets from operations:
Net investment loss $ (104,603) $ (234,679) $ (267,719)
Net realized gain (loss) from investment transactions --0-- 387,654 (185,331)
Change in unrealized appreciation 465,745 338,651 418,153
----------- ----------- -----------
Net increase (decrease) in net assets resulting
from operations 361,142 491,626 (34,897)
Decrease in net assets from trust share transactions (Note 2) (24,811) (245,704) (94,680)
----------- ----------- -----------
Increase (decrease) in net assets 336,331 245,922 (129,577)
Net assets at beginning of period 1,879,812 1,633,890 1,763,467
----------- ----------- -----------
Net assets at end of period, including accumulated net
investment loss of $1,816,596, $2,177,738
and $1,943,059 $ 2,216,143 $ 1,879,812 $ 1,633,890
=========== =========== ===========
</TABLE>
(1) Unaudited
The accompanying notes are an integral part of the financial statements.
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AMERITOR INVESTMENT FUND
Financial Highlights
<TABLE>
<CAPTION>
For the six For the years For the period For the year
months ended ended January 1, 1995 ended
December 31(1) June 30 through June 30 December 31
-------------- --------------------------------- --------------- -----------
1998 1998 1997 1996 1995* 1994
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $1.12 $.85 $.86 $1.02 $.93 $1.42
-------- -------- -------- -------- -------- --------
Net investment loss (.06) (.29) (.03) (.13) (.02) (.08)
Net realized and unrealized
gain (loss) on investments .28 .56 .02 (.03) .11 (.41)
-------- -------- -------- -------- -------- --------
Total from investment operations .22 .27 (.01) (.16) .09 (.49)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $1.34 $1.12 $.85 $.86 $1.02 $.93
======== ======== ======== ======== ======== ========
Ratios/Supplemental Data:
Total return 39.29%** 32.46% (2.05)% (15.53)% 19.36%** (34.51)%
Ratio of expenses to average net
assets 12.05%** 14.54% 16.47% 10.60% 10.54%** 8.90%
Ratio of net investment loss to average
net assets (11.42)%** (13.52)% (15.75)% (5.23)% (4.24)%** (6.65)%
Portfolio turnover rate --0-- 34% 138% 382% 226%** 282%
Net assets, end of period (in thousands) $2,216 $1,879 $1,634 $1,763 $2,298 $2,159
</TABLE>
(1) Unaudited
*The Fund's fiscal year-end was changed to June 30.
** Annualized
The accompanying notes are an integral part of the financial statements.
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AMERITOR INVESTMENT FUND
Notes to Financial Statements
1. Organization and significant accounting policies
Ameritor Investment Fund (the Fund) is registered under the Investment
Company Act of 1940, as amended, as a non-diversified, open-end investment
company.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies consistently followed
by the Fund in the preparation of its financial statements.
Cash and cash equivalents
Management defines cash equivalents as investments that mature in three
months or less. All cash and cash equivalents are invested in a single money
market fund maintained by the investment custodian.
Security valuation
Investments in securities traded on a national securities exchange are
valued at the last reported sales price on the last business day of the period.
Investments for which no sale was reported on that date are valued at the mean
between the latest bid and asked prices.
Security transactions and investment income
Security transactions are recorded on the trade date. Realized gains and
losses from security transactions are reported on an identified cost basis.
Dividend income is recorded on the ex-dividend date. Interest income and
expenses are recorded on the accrual basis.
Income taxes
The Fund is subject to income taxes in years when it does not qualify as a
regulated investment company under subchapter M of the Internal Revenue Code.
The Fund accounts for income taxes using the liability method, whereby deferred
tax assets and liabilities arise from the tax effect of temporary differences
between the financial statement and tax bases of assets and liabilities,
measured using presently enacted tax rates. If it is more likely than not that
some portion or all of a deferred tax asset will not be realized, a valuation
allowance is recognized.
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AMERITOR INVESTMENT FUND
2. Trust shares
The Trust Indenture does not specify a limit to the number of shares which
may be issued. Transactions in trust shares were as follows:
<TABLE>
<CAPTION>
For the 6 months For the year For the year ended
ended December 31, 1998 ended June 30, 1998 June 30, 1997
------------------------- ------------------------- -------------------------
Share Amount Shares Amount Shares Amount
--------- ---------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Shares sold --0-- $ --0-- --0-- $ --0-- --0-- $ --0--
Shares redeemed (21,598) (24,810) (253,579) (245,704) (110,234) (94,680)
--------- ---------- --------- ---------- --------- ----------
Net decrease (21,598) $ (24,810) (253,579) $ (245,704) (110,234) $ (94,680)
========== ========== ==========
Shares outstanding:
Beginning of period 1,674,915 1,928,494 2,038,728
--------- --------- ---------
End of period 1,653,317 1,674,915 1,928,494
========= ========= =========
</TABLE>
3. Purchases and sales of securities
During the six months ended December 31, 1998, purchases and proceeds from
sales of investment securities aggregated $--0-- and $--0--, respectively.
Unrealized appreciation of investments aggregated $1,167,037 of which
$1,313,486 relates to gross unrealized appreciation where there is an excess of
value over tax cost and $146,449 relates to gross unrealized depreciation of
investments where there is an excess of tax cost over value.
4. Investment advisory fee and transactions with affiliates
Ameritor Financial Corporation (AFC), an affiliate, has provided advisory
services under an agreement which first became effective in 1972. On February
28, 1984, at the Annual Meeting of the shareholders, a new Investment Advisory
Agreement was approved. Under the new advisory agreement AFC will continue to
provide the same services it provided under the same terms and conditions of the
previous agreement. The agreement will continue in effect subject to the annual
approval by the Board of Trustees or by a majority of the outstanding voting
securities of the Fund. The fee for investment advisory services is based on 1%
of the first $35,000,000 of the average daily net assets of the
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Fund, 7/8 of 1 % on the next $35,000,000 and 3/4 of 1% on all sums in excess
thereof. In addition to the investment advisory fee, AFC received fees from the
Fund for the performance of delegated services. (dividend disbursing agent and
transfer agent) as defined in the Trust Indenture, as amended. The fee for such
services was computed on the basis of the number of shareholder accounts
calculated as of the last business day of each month at $1.35 per account. AFC
received reimbursements from the Fund for the salaries and benefits of its
employees who perform functions other than investment advisory and shareholder
service functions for the Fund.
Certain officers and trustees of the Fund are "affiliated persons" of the
Investment Adviser, as defined by the Investment Company Act of 1940.
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AMERITOR INVESTMENT FUND
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AMERITOR INVESTMENT FUND
AMERITOR INVESTMENT FUND
1730 K Street, N.W. #904
Washington, D.C. 20006
1-800-424-8570
202-223-1000 Washington, D.C. area
Transfer Agent
Ameritor Financial Corporation
1730 K Street, N.W. #904
Washington, D.C. 20006
Custodian
Crestar Bank, N.A.
1445 New York Ave., N.W.
Washington, D.C. 20005
Independent Accountants
Reznick Fedder & Silverman P.C.
4520 East West Highway
Bethesda, Maryland 20814
For more information about
Ameritor Investment Fund,
account information or daily
Net Asset Values, call:
Shareholder Services
1-800-424-8570
202-223-1000 Washington, D.C. area
