AMERITOR
INVESTMENT
FUND
ANNUAL
REPORT
June 30, 2000
An Ameritor NO-LOAD Mutual Fund
AMERITOR FINANCIAL CORPORATION
AMERITOR
FINANCIAL
CORPORATION
Investment Adviser
<PAGE>
Dear Shareholder:
I am pleased to report that Ameritor Investment Fund had a return for this
fiscal year of 18.36%.* The fine performance of your Fund was accomplished by
maintaining a portfolio of investments that enjoyed significant appreciation and
continued efforts to reduce operating expenses. Because of its return, the Fund
fared favorably as compared to other funds in its category. In addition, while
the Fund has been closed to new investments for the past five years, we hope to
have the Fund eligible for sale in all jurisdictions shortly.
This past year has seen changes in the membership of the Board of Trustees and
the Management of the Ameritor Family of Funds. Max Katcher, Paul Wagner and
Paul Bowers have retired from the Board after many long years of service, and I
was elected President of the Funds at the April 12, 2000 meeting of the Board of
Trustees.
We are pleased to announce that the Funds' investment advisor has engaged Paul
Dietrich of Nye, Parnell and Emerson, a professional and experienced investment
advisor, as a consultant to Ameritor Financial Corporation to assist with the
selection of investments for the Funds.
Jerome Kinney, President of Ameritor Financial Corporation, has engaged North
Carolina Shareholder Services and Nottingham Fund Administrators to help
streamline transfer agency, fund accounting and administrative services for the
Funds. These changes are part of the efforts being made to reduce operating
costs for the ultimate benefit of shareholders.
We shall endeavor to keep your Fund an attractive investment and will continue
working toward enhanced appreciation of your investments, lower operating costs
and striving for a higher shareholder return in future years.
Sincerely,
/s/ Carole S. Kinney
Carole S. Kinney
President
--------
* The average annual return for the 5-year period ended June 30, 2000 was
13.49%. The average annual return for the 10-year period ended June 30,
2000 was 3.43%. Past performance is not indicative of future results. The
results achieved last year, which was an unusually favorable year in the
market in certain sectors, will not necessarily be repeated in the future.
Your shares fluctuate so that their value, when you redeem, may be more or
less than when you invested in the Fund.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Trustees
and Shareholders of
Ameritor Investment Fund
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Ameritor Investment Fund, as of June 30, 2000,
and the related statement of operations, the statement of changes in net assets
and the financial highlights for the year 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 audit. The financial statements for the year
ended June 30, 1999 and financial highlights presented for the four year period
ending June 30, 1999 were audited by other auditors whose report dated August 6,
1999 expressed an unqualified opinion on those statements.
We conducted our audit 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 June 30, 2000, 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 audit provides 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 the
Ameritor Investment Fund as of June 30, 2000, the results of its operations, the
changes in its net assets and the financial highlights for the year then ended,
in conformity with generally accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
August 2, 2000
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
AMERITOR INVESTMENT FUND
Portfolio of Investments
June 30, 2000
------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (Note 1)
------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - 100.00%
Applications Software - 2.99%
Citrix Systems, Inc. (a) ............................................................... 6,100 $ 115,519
----------
Total Applications Software ..................................... 115,519
----------
Computer Hardware & Software - 8.44%
EMC Corp. (a) .......................................................................... 1,200 92,325
Mercury Interactive Corp. (a) .......................................................... 1,260 121,905
VERITAS Software Corp. (a) ............................................................. 990 111,885
----------
Total Computer Hardware & Software .............................. 326,115
----------
Electronic Componenets - Semi Conductors - 18.19%
Applied Micro Circuits Corp. (a) ....................................................... 1,200 118,500
Broadcom Corp. (a) ..................................................................... 650 142,309
Cree, Inc. (a) ......................................................................... 750 100,125
International Rectifier Corp. (a) ...................................................... 2,160 118,800
PMC-Sierra, Inc. (a) ................................................................... 635 112,832
Rambus, Inc. (a) ....................................................................... 1,070 110,210
----------
Total Electronic Components - Semi Conductors ................... 702,776
----------
Electronic Measuring Instruments - 2.21%
Agilent Technologies, Inc. (a) ......................................................... 1,155 85,181
----------
Total Electronic Measuring Instruments .......................... 85,181
----------
Fiber Optics - 8.37%
Harmonic, Inc. (a) ..................................................................... 4,850 120,038
JDS Uniphase Corp. (a) ................................................................. 720 86,310
SDL, Inc. (a) .......................................................................... 410 116,927
----------
Total Fiber Optics .............................................. 323,275
----------
Internet Services - 3.20%
Juniper Networks, Inc. (a) ............................................................. 850 123,728
----------
Total Internet Services ......................................... 123,728
----------
Internet Software - 2.83%
BroadVision, Inc. (a) .................................................................. 2,150 109,247
----------
Total Internet Software ......................................... 109,247
----------
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C>
AMERITOR INVESTMENT FUND
Portfolio of Investments
June 30, 2000
------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (Note 1)
------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - 100.00%
Medical Equipment - 3.04%
Cytyc Corp. (a) ........................................................................ 2,200 $ 117,425
----------
Total Medical Equipment ......................................... 117,425
----------
Mulimedia - 3.82%
Gemstar-TV Guide International, Inc. (a) ............................................... 2,400 147,487
----------
Total Mulitmedia ................................................ 147,487
----------
Networking Products - 30.89%
Cisco Systems, Inc. (a) ................................................................ 17,000 1,080,562
Network Appliance, Inc. (a) ............................................................ 1,400 112,700
----------
Total Networking Products ....................................... 1,193,262
----------
Pharmaceuticals - 3.26%
MedImmune, Inc. (a) .................................................................... 1,700 125,800
----------
Total Pharmaceuticals ........................................... 125,800
----------
Telecommunciations Equipment - 6.82%
Nortel Networks Corp. .................................................................. 1,230 84,793
QUALCOMM, Inc. (a) ..................................................................... 1,380 82,800
Tellabs, Inc. (a) ...................................................................... 1,400 95,813
----------
Total Telecommunications Equipment .............................. 263,406
----------
Wireless Equipment - 5.94%
Powerwave Technologies, Inc. (a) ....................................................... 2,670 117,480
RF Micro Devices, Inc. (a) ............................................................. 1,280 112,160
----------
Total Wireless Equipment ........................................ 229,640
----------
Total Portfolio of Investments (Cost $2,885,754) ....................................... $3,862,861
==========
(a) Non-income producing
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
AMERITOR INVESTMENT FUND
Statement of Assets and Liabilities
June 30, 2000
Assets:
Investments at value (Cost $2,885,754) (Note 1) .............................................. $ 3,862,861
Cash ......................................................................................... 16,801
Receivable - securities sold ................................................................. 1,874,813
Interest receivable .......................................................................... 71
-----------
Total assets ..................................................................... 5,754,546
-----------
Liabilities:
Accounts payable and accrued expenses ........................................................ 32,358
Investment advisory and service fees payable (Note 4) ........................................ 7,958
Payable - securities purchased ............................................................... 2,784,219
-----------
Total Liabilities ................................................................ 2,824,535
-----------
Net Assets ................................................................................................. $ 2,930,011
===========
Net assets consist of:
Accumulated net investment loss .............................................................. $(2,689,536)
Unrealized appreciation of investments ....................................................... 977,107
Accumulated net realized gains from security transactions .................................... 1,344,960
Paid-in capital .............................................................................. 3,297,480
-----------
$ 2,930,011
===========
Net asset value, offering price and redemption price per share
($2,930,011 divided by 1,528,390 shares of no par value trust shares) ................................ $ 1.92
===========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
AMERITOR INVESTMENT FUND
Statement of Operations
For the year ended June 30, 2000
Investment Income:
Dividends ................................................................... $ 5,940
Interest .................................................................... 2,512
-----------
Total income .................................................... $ 8,452
-----------
Expenses:
Salaries and employee benefits (Note 4) ..................................... 75,890
Investment advisory fee (Note 4) ............................................ 29,241
Professional fees ........................................................... 61,333
Shareholder servicing fee (Note 4) .......................................... 39,774
Rent (Note 4) ............................................................... 16,504
Custodian fees .............................................................. 1,099
Computer services (Note 4) .................................................. 21,958
Reports to shareholders ..................................................... 11,477
Trustees' fees and expenses (Note 4) ........................................ 7,991
Miscellaneous ............................................................... 10,360
-----------
Total expenses .................................................. 275,627
-----------
Net Investment loss ............................................. (267,175)
-----------
Realized and Unrealized Gain/(Loss) on Investments (Notes 1 and 3):
Net realized gain from investment transactions .............................. 1,478,875
Change in unrealized appreciation of investments ............................ (738,061)
-----------
Net gain on investments ..................................................... 740,814
-----------
Net increase in net assets resulting from operations ........................ $ 473,639
===========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
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AMERITOR INVESTMENT FUND
Statements of Changes in Net Assets
------------------------------------------------------------------------------------------------------------------------------------
For the year For the year
ended June 30, ended June 30,
2000 1999
------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from operations:
Net investment loss ......................................... $ (267,175) $ (244,622)
Net realized gain from investment transactions .............. 1,478,875 53,091
Change in unrealized appreciation
of investments .......................................... (738,061) 1,013,876
----------- -----------
Net increase in net assets resulting
from operations ........................................ 473,639 822,345
Decrease in net assets from trust share transactions (Note 2) ............. (147,602) (98,183)
----------- -----------
Increase in net assets ...................................... 326,037 724,162
Net assets at beginning of period ......................................... 2,603,974 1,879,812
----------- -----------
Net assets at end of period, including accumulated
net investment loss of $2,689,536 and $2,422,360 ................... $ 2,930,011 $ 2,603,974
=========== ===========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
AMERITOR INVESTMENT FUND
Finanacial Highlights
For the years ended
June 30
-----------------------------------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------- -------
Per Share Operating Performance:
Net asset value, beginning of
period ..................................... $1.62 $1.12 $0.85 $0.86 $1.02
------- ------- ------- ------- -------
Net investment income (loss) ................... (0.25) (0.21) (0.29) (0.03) (0.13)
Net Realized and unrealized gain
(loss) on investments .......................... 0.55 0.71 0.56 0.02 (0.03)
------- ------- ------- ------- -------
Total from Investment operations ............... 0.30 0.50 0.27 (0.01) (0.16)
Net asset value, end of period ..................... $1.92 $1.62 $1.12 $0.85 $0.86
======= ======= ======= ======= =======
Ratio/Supplemental Data:
Total Return .................................. 18.36 % 44.59 % 32.46 % (2.05)% (15.53)%
Ratio of expenses to avg. net assets .......... 9.95 % 11.97 % 14.54 % 16.47 % 10.60 %
Ratio of net investment income(loss)
to average net assets ..................... (9.88)% (11.46)% (13.52)% (15.75)% (5.23)%
Portfolio turnover ............................ 76 % 0 % 34 % 138 % 382 %
Net Assets, end of period (000's) ............. $ 2,930 $ 2,604 $ 1,880 $ 1,634 $ 1,763
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
Performance Graph
The following graph provides a comparison of the change in the value of a
$10,000 investment in the Fund and same investment in the S & P 500 Index for
each fiscal year from July 1, 1990 to June 30, 2000.
[Line graph here]:
Total Return vs S & P 500 Index
-------------------------------
-------------------------------------------------
Ameritor S & P 500
Investment Fund Index
-------------------------------------------------
06/30/90 $10,000.00 $10,000.00
06/30/91 $8,613.00 $10,735.00
06/30/92 $9,635.00 $12,175.00
06/30/93 $10,437.00 $13,833.00
06/30/94 $8,101.00 $14,025.00
06/30/95 $7,444.00 $17,680.00
06/30/96 $6,276.00 $22,262.00
06/30/97 $6,203.00 $29,991.00
06/30/98 $8,174.00 $39,027.00
06/30/99 $11,822.00 $47,913.00
06/30/00 $13,993.00 $51,383.00
AVERAGE ANNUAL TOTAL RETURN
---------------------------
1 Year 5 Year 10 Year
18.36% 13.49% 3.43%
* Past performance is not predictive of future performance.
** S & P 500 Index is adjusted to reflect the reinvestment of dividends.
<PAGE>
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 Fund has not been accepting new subscriptions for shares
since November 1996.
In preparing financial statements in conformity with generally accepted
accounting principles, management makes estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements, as well as 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.
Security valuation
Investments in securities traded on a national securities exchange are
valued at the last reported sales price on its principal exchange. 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.
<PAGE>
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:
For the year ended June 30,
2000 1999
----- ----
Shares Amount Shares Amount
Shares sold........... - 0 - $ - 0 - - 0 - $ - 0 -
Shares redeemed....... ( 76,264) (147,602) ( 70,261) ( 98,183)
------- ------- ------- -------
Net decrease.......... ( 76,264) $(147,602) ( 70,261) $( 98,183)
======= ======= ======= =======
Shares outstanding:
Beginning of period.. 1,604,654 1,674,915
--------- ---------
End of period........ 1,528,390 1,604,654
========= =========
3. Purchase and seals of securities
During the year ended June 30, 2000, purchases and proceeds from sales
of investment securities were $2,784,219 and $2,227,512, respectively. Net
unrealized appreciation of investments aggregated $977,107 which related to
gross unrealized appreciation and gross unrealized depreciation of $1,066,917
and $89,810, respectively.
4. Investment advisory and transactions with affiliates
The investment advisory agreement with Ameritor Financial Corporation
("AFC"), an affiliate, provides for a fee based on 1% of the first $35,000,000
of the average daily net assets of the 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 also 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, for rent and
for computer services. Certain officers and trustees of the Fund are "affiliated
persons" of the Investment Adviser, as defined by the Investment Company Act of
1940.
5. Federal income taxes
In the fiscal year ended June 30, 2000, the Fund did not meet the asset
diversification requirements applicable to regulated investment companies. Thus,
the Fund did not qualify as a regulated investment company under Subchapter M of
<PAGE>
AMERITOR INVESTMENT FUND
the Internal Revenue Code. However, the Fund had a net investment loss in fiscal
year ended June 30, 2000, therefore no income tax provision is required. A full
valuation allowance was provided for deferred tax assets, totaling approximately
$461,000 at June 30, 2000, which arise principally from net operating loss
carryforwards available for income tax purposes.
For income tax purposes, the fund has net operating loss carryforwards
approximating $1,356,300 which are available to offset future net operating
income in non-qualifying years, if any, which expire as follows: (2008)
$242,300; (2009) $204,000; (2010) $40,000; (2011) $112,000; (2012) $270,000,
(2013) $239,000 and (2014) $249,000.
