N-30D 1 ameristo.txt Ameristock Mutual Funds 1301 East Ninth Street- Suite 1005 Cleveland, OH 44114 (800) 394-5064 http://www.ameristock.com -------------------------------------------------------------------------------- SEMI-ANNUAL REPORT December 31, 2000 Philosophy, 2 New Funds The total return for the Ameristock Mutual Fund was 20.4% for the year 2000. (Annualized total return for 1 year was 20.4%%, 3 years was 17.5%, 5 years was 21.6% and since inception was 23.0%). Ameristock out-performed the S&P500 by 29.5%, which was down -9.1% itself this year. The reason we lagged the general market in 1999 was because of our underweighing of technology when that group was in favor. Our overweighing in financial service companies in 2000 combined with a bear market in technology stocks was the reason for our good return this year. Philosophy The investment style and philosophy of the Ameristock Mutual Fund is to buy and hold a well diversified group of very large U.S. companies with a bias toward value. That's it, nothing complicated or fancy. Just plain old boring buy and hold blue chip stocks. We are very consistent in this investment style and philosophy, which means sometimes when gold or real estate or technology has a good year- we will lag. Conversely, in years like 2000 when technology goes down- we will outperform. We will not change our investment style and philosophy. The reason I am stating this point is that in 1999 when we under-performed the S&P500, over 35% of the assets in Ameristock were redeemed. This year, when we out-performed the major indexes we doubled our assets. Since Ameristock's investment style and philosophy has not changed, the only reason I can think of for the large fluctuations in our assets is that people chase the latest fund because of good recent performance. While there are many ways to make and lose money in the market, the surest way to lose is by investing in something just because it has had good recent performance. This is called momentum investing and it is the one thing academia and Wall Street research agrees on. Momentum investing does not work. An investment in any stock fund should be held at least 3 years, so (for our new investors) unless you are prepared to keep this Fund until 2004 and you like our investment style and philosophy, please redeem your shares today. Or, feel free to invest in our... 2 New Funds Introducing the Ameristock Large Company Growth Fund and the Ameristock Focused Value Fund. The Large Company Growth Fund will have the same investment style and philosophy as the Ameristock Mutual Fund but will overweigh those companies with high growth potential instead of value. Andy Ngim, who helps me manage this Fund, and Robert Nguyen, who I worked with at Bank of America and recently was with Charles Schwab, will be the co-portfolio managers of this fund. This fund is meant for the average investor who is willing to accept some additional risk in the hope of additional returns. The Focused Value Fund will own only a few stocks and will concentrate its investments on those companies that appear to be very undervalued. That means the small capitalization area and the automobile supply and retail sectors for now. I, along with Howard Mah will be the co-portfolio managers. This fund is meant for the long run investor who is comfortable with choppy but hopefully above average returns. If you would like more information about the two new funds, please call Andy Ngim at (510) 523-6818 to obtain a prospectus. Please read it carefully before you invest. In Summary When you call the (800) 394-5064 phone number, a machine giving you four choices will greet you: #1 Ameristock's Daily Net Asset Value. (A recording). #2 To request Prospectuses and Applications ONLY. (An answering service). #3 If you have a question about your account, want to establish automatic investing, or want to redeem shares. (Our transfer agent, Mutual Shareholder Services). #4 If you have a question about the Fund or have any problems. (The investment management company). We have recently updated our web site to include information about the 2 new funds. In addition, we publish our holdings on the web site quarterly if you ever want to see the portfolio in-between reports like this. Ameristock Mutual Fund, Inc. is a no-load, value based, domestic, equity-income fund that invests in large capitalization companies. Thank you for investing in the Ameristock Mutual Fund and please tell your friends about us. Nicholas D. Gerber (January 16, 2001) (graph) Past performance does not guarantee future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. All returns reflect reinvested dividends. The Fund's portfolio may differ significantly from the securities in the Index. The Index is unmanaged and therefore does not reflect the cost of portfolio management or trading. -------------------------------------------------------------------------------- Average Annual Total Returns -------------------------------------------------------------------------------- Period Ended December 31, 2000 1 Year 5 Years Since Inception ------ ------- --------------- Ameristock Mutual Fund 20.4% 21.6% 23.0% -------------------------------------------------------------------------------- S&P500 Index -9.1% 19.0% 18.5% --------------------------------------------------------------------------------
Ameristock Mutual Fund Schedule of Investments December 31, 2000 Market Industry Company Symbol Shares Value ----------------------------------------------------------------------------------------------- Automotive 6.30% Ford Motor Co. F 243,242 $5,700,984 General Motors Corp. GM 98,220 $5,003,081 Visteon* VC 8,983 $ 103,304 Banking 12.87% Bank of America BAC 44,177 $2,026,620 CitiGroup C 57,816 $2,952,229 First Union FTU 115,000 $3,198,437 PNC Financial Services PNC 87,700 $6,407,581 Washington Mutual Inc. WM 141,000 $7,481,812 Capital Goods 4.77% Boeing Co. BA 48,860 $3,224,760 Caterpillar CAT 91,900 $4,348,018 General Electric GE 12,300 $ 589,631 Chemicals & 6.82% Dow Chemical DOW 150,280 $5,504,005 Fertilizer Du Pont de Nemours & Co. DD 128,100 $6,188,831 Consumer 13.08% Albertsons ABS 229,000 $6,068,500 Staples Coca- Cola Co. KO 8,380 $ 510,656 McDonalds Corp. MCD 173,600 $5,902,400 Pepsico PEP 36,960 $1,831,830 Proctor & Gamble Co. PG 24,600 $1,929,562 Sara Lee Corp. SLE 251,800 $6,184,837 Diversified 1.30% Minnesota Mining & Mfg. MMM 18,560 $2,236,480 Electronics 10.78% Agilent* A 12,529 $ 685,962 Dell Computer* DELL 345,000 $6,015,937 Hewlett Packard Co. HWP 5,400 $ 170,437 Intel Corp. INTC 177,360 $5,365,140 International Business Machines IBM 73,600 $6,256,000 Entertainment 0.12% Disney Co. (Walt) DIS 7,070 $ 204,588 Financial- 3.95% Fannie Mae FNM 67,170 $5,826,997 Other Merrill Lynch MER 14,000 $ 954,625 Healthcare 5.73% Abbott Labs ABT 53,560 $2,594,312 (Products) American Home Products AHP 30,000 $1,906,500 Bristol Myers Squibb BMY 27,440 $2,028,845 Johnson & Johnson JNJ 6,340 $ 666,096 Merck & Co. MRK 20,940 $1,960,507 Pfizer Inc. PFE 14,680 $ 675,280 Insurance 4.96% Allstate Corp. ALL 150,000 $6,534,375 American International Group AIG 19,953 $1,966,642 Oil & Gas 3.23% BPAmoco (ADR's) BPA 67,408 $3,227,158 Chevron CHV 13,500 $1,139,906 ExxonMobil XOM 7,600 $ 660,711 Texaco TX 8,200 $ 509,425 Retailing 4.05% Home Depot Inc. HD 11,595 $ 529,746 Sears Roebuck & Co. S 169,000 $5,872,750 Wal-Mart Stores WMT 10,300 $ 547,187 Software 1.25% Microsoft Corp.* MSFT 49,280 $2,143,680 Tele- 6.92% AT& T Corp. T 65,975 $1,142,192 communications Bellsouth Corp. BLS 47,900 $1,960,906 SBC Commuications SBC 56,143 $2,680,828 Verizon VZ 121,209 $6,075,601 ---------- Total Common Stocks: 86.13% (Cost $135,560,810) $147,695,891 ------------ Total Investments $147,695,891 Other Assets $ 23,782,166 Less Liabilities Net Assets: 100% Equivalent to $40.22 per share on 4,263,472 Shares of Capital Stock Outstanding $171,478,057
* Non-Income Producing The accompanying notes are an integral part of the financial statements Ameristock Mutual Fund Statement of Assets and Liabilities December 31, 2000 Assets: Investment Securities at Market Value (Identified Cost- $135,560,810) $ 147,695,891 Cash $ 29,476,895 Accounts Receivables Dividends $ 144,638 Fund Shares Sold $ 7,624,906 Total Assets: $ 184,942,330 Liabilities: Accounts Payable Investment Securities Purchase Payable $ 13,319,641 Fund Shares Redeemed $ 144,632 Total Liabilities: $ 13,464,273 Net Assets $ 171,478,057 Net Assets Consist of: Capital Paid In $ 159,420,911 Accumulated Undistributed Net Investment Income $ 125,859 Accumulated Undistributed Realized Net Capital Gain $ (203,794) Accumulated Unrealized Appreciation in Value of Investments Based on Identified Cost- Net $ 12,135,081 NET ASSETS FOR 4,263,472 SHARES OUTSTANDING $ 171,478,057 NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE ($171,478,057/4,263,472) $ 40.22 The accompanying notes are an integral part of the financial statements Ameristock Mutual Fund Statement of Operations 6 Months Ending December 31, 2000 Investment Income: Dividends $ 1,157,788 Interest $ 237,215 Other $ 2,260 Total Investment Income $ 1,397,263 Expenses: Management Fee $ 510,438 Directors Fee $ 665 Total Expenses $ 511,103 Net Investment Income $ 886,160 Realized and Unrealized Gain on Investments Net Realized Gain (Loss) on Investments $ 1,196,335 Net Change in Unrealized Appreciation (Depreciation) on Investments $ 17,544,500 Net Realized and Unrealized Gain (Loss) on Investments $ 18,740,835 Net Increase (Decrease) in Net Assets Resulting from Operations $ 19,626,995 The accompanying notes are an integral part of the financial statements Ameristock Mutual Fund Statement of Changes in Net Assets July 1, 2000 July 1, 1999 to to Dec 31, 2000 June 30, 2000 From Operations: Net Investment Income $ 886,160 $ 1,514,360 Net Realized Gain (Loss) $ 1,196,335 $ 4,021,324 Net Change in Unrealized Appreciation (Depreciation) on Investments $ 17,544,500 $ (17,951,640) $ 19,626,995 $ (12,415,956) Distributions to Shareholders: Ordinary Income $ (1,527,654) $ (1,171,494) Capital Gains $ (5,528,805) $ (947,523) $ (7,056,459) $ (2,119,017) From Capital Share Transactions: Proceeds from 2,226,845 Shares Issued $ 89,847,368 $ 94,364,171 Net Asset Value of 169,867 Shares Issued from Reinvestment of Dividends $ 6,592,550 $ 1,466,911 Cost of 625,852 Shares Redeemed $(24,192,298) $(108,781,081) $ 72,247,620 $ (12,949,999) Net Increase/Decrease in Net Assets $ 84,818,156 $ (27,484,972) Net Assets at Beginning of Period $ 86,659,901 $ 114,144,873 Net Assets at End of Period (including Undistributed Net Investment Income of $125,859 and $767,353 respectively) $ 171,478,057 $ 86,659,901
The accompanying notes are an integral part of the financial statements
Ameristock Mutual Fund Financial Highlights Selected Data for a Share of Common Stock Jul 1, 00 Jul 1, 99 Jul 1, 98 Jul 1, 97 Jul 1, 96 Outstanding Throughout the Period to to to to to 31-Dec-00 30-Jun-00 30-Jun-99 30-Jun-98 30-Jun-97 Net Asset Value at Beginning of Period $ 34.76 $ 38.89 $ 31.84 $ 25.06 $ 19.03 Net Investment Income $ 0.31 $ 0.55 $ 0.44 $ 0.41 $ 0.52 Net Gains (Losses) on Securities- Realized and Unrealized $ 5.91 $ (3.92) $ 7.41 $ 7.26 $ 5.94 Total From Investment Operations $ 6.22 $ (3.37) $ 7.85 $ 7.67 $ 6.46 Dividend Distribution Net Investment Income $ (0.42) $ (0.42) $ (0.22) $ (0.42) $ (0.39) Capital Gains $ (0.34) $ (0.34) $ (0.22) $ (0.83) $ (0.04) Total Distributions $ (0.76) $ (0.76) $ (0.44) $ (1.25) $ (0.43) Net Asset Value at End of Period $ 40.22 $ 34.76 $ 38.89 $ 31.48 $ 25.06 Total Return 17.89% -8.67% 24.94% 30.61% 33.95% Ratios/ Supplemental Data Net Assets End of Period (millions) $ 171.48 $ 86.66 $ 114.14 $ 12.75 $ 6.64 Ratio of Expenses to Average Net Assets Prior to Reimbursement 0.92% 0.99% 0.96% 0.95% 1.06% After Reimbursement 0.92% 0.99% 0.94% 0.90% 0.56% Ratio of Net Income to Average Net Assets Prior to Reimbursement 1.65% 1.51% 1.20% 1.43% 1.89% After Reimbursement 1.64% 1.51% 1.22% 1.48% 2.39% Portfolio Turnover Rate 13.26% 31.13% 9.22% 11.85% 21.48%
* Annualized The accompanying notes are an integral part of the financial AMERISTOCK MUTUAL FUND NOTES TO FINANCIAL STATEMENTS December 31, 2000 1.) SIGNIFICANT ACCOUNTING POLICIES The Fund is a diversified, open-end management investment company, organized as a corporation under the laws of the State of Maryland on June 15, 1995. The Fund's investment objective is to seek total return through capital appreciation and current income by investing (under normal market conditions) at least 80% of the value of its total assets in equity securities consisting of common stocks. The authorized capital stock of the Fund consists of 100 million shares of common stock, par value $.005 per share. Significant accounting policies of the Fund are presented below: SECURITY VALUATION: Investments in securities are carried at market value. The market quotation used for common stocks, including those listed on the NASDAQ National Market System, is the last sale price on the date on which the valuation is made or, in the absence of sales, at the closing bid price. Over-the-counter securities will be valued on the basis of the bid price at the close of each business day. Short-term investments are valued at amortized cost, which approximates market. The cost of securities sold is determined on the identified cost basis. Securities for which market quotations are not readily available will be valued at fair value as determined in good faith pursuant to procedures established by the Board of Directors. Security transactions are recorded on the dates transactions are entered into (the trade dates). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Interest income is recorded as earned. The Fund uses the identified cost basis in computing gain or loss on sale of investment securities. Discounts and premiums on securities purchased are amortized over the life of the respective securities. INCOME TAXES: It is the Fund's policy to distribute annually, prior to the end of the calendar year, dividends sufficient to satisfy excise tax requirements of the Internal Revenue Service. This Internal Revenue Service requirement may cause an excess of distributions over the book year-end accumulated income. In addition, it is the Fund's policy to distribute annually, after the end of the fiscal year, any remaining net investment income and net realized capital gains. ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2.) INVESTMENT ADVISORY AGREEMENT The Fund has entered into an investment advisory and administration agreement with Ameristock Corporation. The Investment Advisor receives from the Fund as compensation for its services to the Fund an annual fee of 1% of the Fund's net assets for the first $100 million of net assets and .75% of net assets thereafter. The Investment Advisor pays all operating expenses of the Fund except for taxes, interest, brokerage commissions and extraordinary litigation expenses. The advisor received management fees of $510,438 during the 6 months ending December 31, 2000. During the Fund's initial year, the Advisor had paid all Fund expenses. 3.) RELATED PARTY TRANSACTIONS Certain owners of Ameristock Corporation are also owners and/or directors of Ameristock Mutual Fund. These individuals may receive benefits from any management fees paid to the Advisor. 24.6% of the Fund's stock is controlled by National Financial Services Corp. 26.6% of the Fund's stock is controlled by Charles Schwab & Co. All of the preceding companies are unrelated to the Fund or Ameristock Corp. The preceding companies may be deemed as controlling persons. AMERISTOCK MUTUAL FUND NOTES TO FINANCIAL STATEMENTS (CONT'D) December 31, 2000 4.) CAPITAL STOCK AND DISTRIBUTION At June 30, 2000, 100 million shares of capital stock ($.005 par value) were authorized, and paid-in capital amounted to $159,420,911. Transactions in common stock were as follows: Shares sold.............. 2,226,845 Shares issued to shareholders in reinvestment of dividends 169,867 2,396,712 Shares redeemed.......... (625,852) Net increase............. 1,770,860 Shares Outstanding: Beginning of period.... 2,492,612 End of period.......... 4,263,472 5.) PURCHASES AND SALES OF SECURITIES During the six months ended December 31, 2000, purchases and sales of investment securities other than U.S. Government obligations and short-term investments aggregated $59,757,025 and $13,332,204 respectively. 6.) FINANCIAL INSTRUMENTS DISCLOSURE There are no reportable financial instruments that have any off-balance sheet risk as of December 31, 2000. 7.) SECURITY TRANSACTIONS For Federal income tax purposes, the cost of investments owned at December 31, 2000 was the same as identified cost. At December 31, 2000, the composition of unrealized appreciation (the excess of value over tax cost) and depreciation (the excess of tax cost over value) was as follows: Net Appreciation Appreciation (Depreciation) (Depreciation) $20,414,016 $(8,278,935) $12,135,081 8 ) DISTRIBUTIONS During the 6 months ended December 31, 2000, distributions of $1,527,837 was paid from net investment income and $5,528,805 was paid from realized short and long-term capital gains.