BMC Fund NCSR Certified annual shareholder report (management investment company)

UNITED STATES

SECURITES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF

REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-03150

BMC FUND, INC.

(Exact name of registrant as specified in charter)

800 HICKORY BLVD. SW

LENOIR, NC 28645

(Address of principal executive offices) (Zip code)

CAROL FRYE

BMC FUND, INC.

800 HICKORY BLVD. SW

LENOIR, NC 28645

(Name and address of agent for service)

Registrant's telephone number including area code: 828-758-6100

Date of fiscal year end: October 31, 2018

Date of reporting period: October 31, 2018

Item 1. Report to Stockholders.

BMC FUND, INC.

FINANCIAL STATEMENTS AND

SUPPLEMENTARY INFORMATION

Year Ended October 31, 2018

BMC FUND, INC.

TABLE OF CONTENTS

BMC FUND, INC.

LETTER TO SHAREHOLDERS –

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Year Ended October 31, 2018

TO OUR SHAREHOLDERS: MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

For fiscal year ending October 31, 2018, BMC Fund, Inc. (the “Company”) generated investment performance of 2.6% which fell short of our absolute return objective but exceeded both the Company’s investment policy index (-0.5%) and global equity indices (0.0%). With volatility returning to global asset markets, the Company’s long-term focus on capital preservation has begun to pay dividends. During the trailing twelve months, global stock (0.0%) and hedge fund indices (-0.4%) treaded water while bond markets declined (-2.1%). In contrast, the Company’s equity (1.5%), hedge fund (4.1%), and fixed income (2.6%) allocations each generated positive returns ahead of their respective benchmarks. At fiscal year-end, the portfolio remains broadly diversified with a substantial cash reserve.

We continue to see increasing evidence of late cycle economic behavior, most notably through increasing downside volatility across asset classes. With corporate leverage at historic extremes, credit quality deteriorating, and monetary policy tightening, the risk of a financial accident has greatly increased. Prudent investors would be well served to recall that financial imbalances, which can appear to go on forever, often reverse course suddenly and with little warning. Domestic equity markets are trading near peak multiples on peak margins, and consumer confidence and household equity allocations are at record highs. At the same time, downward revisions to top-line guidance—combined with rising input costs, higher wages, and rising debt burdens—are likely to squeeze profit margins. With global central banks removing liquidity from asset prices, future returns are likely to be quite subdued even if economic growth continues.

Risks to the downside appear much more significant. But the risk of getting too cautious here is manageable, in our opinion. We are still finding pockets of value in the market today and remain comfortable aggressively deploying capital when the price is right. The benefits of a value-oriented approach, such as ours, can be difficult to distinguish in good times when a rising tide lifts all boats. In a bull market, risk can be easily confused as intelligence. It’s not until the tide turns that you can see which boats end up stuck in the sand and which captains can navigate choppy waters. While past performance is no guarantee of future returns, we believe that our relentless focus on capital preservation will be well rewarded in choppy waters. Simply put, this is our bread and butter. And we are looking forward to the opportunities that market turbulence may create. We believe the portfolio is well positioned to generate attractive returns across a variety of market climates.

BMC FUND, INC.

LETTER TO SHAREHOLDERS –

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Year Ended October 31, 2018

During the year ended October 31, 2018, the Company paid the following dividends per share:

December 11, 2017 to shareholders of record November 25, 2017	$	.25
March 10, 2018 to shareholders of record February 25, 2018		.25
June 10, 2018 to shareholders of record May 25, 2018		.25
September 10, 2018 to shareholders of record August 25, 2018		.25

Total	$	1.00

The Company paid a dividend of $0.25 per share on December 10, 2018 to shareholders of record November 25, 2018.

The attached Schedule of Investments is a listing of the entire Company’s diversified securities at October 31, 2018 with a total market value of $99,605,722.

	M. Hunt Broyhill
	Chairman and President

BMC FUND, INC.

LETTER TO SHAREHOLDERS –

GRAPHIC PRESENTATION OF PORTFOLIO HOLDINGS AND

SECTOR DIVERSIFICATION

Year Ended October 31, 2018

BMC FUND, INC.

SUPPLEMENTAL INFORMATION

Year Ended October 31, 2018

SUPPLEMENTAL INFORMATION

M. Hunt Broyhill, Chairman and President, and Christopher R. Pavese, CFA, Vice President and Chief Investment Officer, are primarily responsible for the day-to-day management of the Company’s portfolio. Mr. Hunt Broyhill has had such responsibility since 2001. He has been engaged in asset management for various institutions and high net worth individuals for more than five years. Prior to joining the Company on March 1, 2005, Mr. Pavese was a Vice President and Portfolio Manager at JP Morgan Private Bank from January 1999 until February 2005. At JP Morgan, Mr. Pavese was engaged in asset management, portfolio strategy, and asset allocation for high net worth individuals, personal trusts, endowments and foundations.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders of BMC Fund, Inc.

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedules of investments and open written option contracts, of the BMC Fund, Inc. (the “Fund”), as of October 31, 2018 and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, including the related notes, and the financial highlights for each of the ten years in the period then ended, (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2018, 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 ten years in the period then ended, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 2 to the financial statements, the financial statements include investments valued at $29,100,182 (28.40% of net assets) as of October 31, 2018, whose fair values have been estimated by management in the absence of readily determinable fair values. Management’s estimates are based upon information provided by the funds’ managers or the general partners.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We have conducted our audits in accordance with the standards of the PCAOB. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and confirmation of securities owned as of October 31, 2018, by correspondence with the custodian. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ Dixon Hughes Goodman LLP

We have served as the Fund’s auditor since 2001.

Charlotte, North Carolina

December 17, 2018

BMC FUND, INC.

SCHEDULE OF INVESTMENTS

October 31, 2018

		Coupon										Percent
		Interest			Maturity	Face				Market		of Net
Debt Issuer		Rate			Date	Amount		Cost		Value		Assets

FIXED INCOME:
CORPORATE BONDS:
COCA COLA CO			1.650	%	11/1/2018	$	1,000,000	$	1,000,000	$	1,000,000
STARBUCKS CORP			2.000	%	12/5/2018		1,000,000		1,000,614		999,481
APPLE INC			1.700	%	2/22/2019		1,000,000		1,000,912		996,694
RAYTHEON CO			4.400	%	2/15/2020		500,000		517,907		508,771
WALT DISNEY CO			1.800	%	6/5/2020		1,000,000		982,080		980,382
HERTZ CORP			5.875	%	10/15/2020		200,000		201,361		195,750
BRINKER INTL INC			3.875	%	5/15/2023		100,000		98,563		93,500
DISH DBS CORP			5.875	%	7/15/2022		100,000		96,826		94,500
INGLES MKTS INC			5.750	%	6/15/2023		200,000		200,805		199,000
DAVITA INC			5.125	%	7/15/2024		200,000		200,270		191,000
CENTURYLINK INC			7.650	%	3/15/2042		100,000		89,995		86,000
VOYA FINANCIAL INC			5.650	%	5/15/2053		150,000		150,000		147,750
LINCOLN NATL CORP IND			4.997	%	5/17/2066		125,000		94,500		114,375
FPL GROUP CAP INC			6.350	%	10/1/2066		586,000		562,604		547,910
PP&L CAP FUNDING FLT RATE			5.051	%	3/30/2067		500,000		500,000		485,000
WISCONSIN ENERGY			4.728	%	5/15/2067		250,000		241,286		230,233
JP MORGAN CHASE CAP XXIII			0.000	%	5/15/2077		250,000		232,310		214,688
AXA SA FLOATING RATE	⁴		0.000	%	1/29/1949		100,000		84,277		77,005
LEHMAN BROTHERS HLDGS NIKKEI INDEX	^1,2,3		0.000	%	9/29/2008		3,000,000		1,638,468		-
LEHMAN BROTHERS HLDGS EAFE INDEX	^1,2,3		0.000	%	11/15/2008		1,000,000		538,019		-
LEHMAN BROTHERS HLDGS MEDIUM TERM NOTE	^1,2,3		0.000	%	3/15/2011		2,500,000		1,364,212		-
							13,861,000		10,795,009		7,162,039		6.99	%

MUNICIPAL BONDS:
VIRGIN ISLANDS PUB FIN AUTH			6.625	%	10/1/2029		100,000		85,771		101,100
VIRGIN ISLANDS PUB FIN AUTH			6.750	%	10/1/2037		1,200,000		993,009		1,213,200
							1,300,000		1,078,780		1,314,300		1.28	%

TOTAL INVESTMENTS IN FIXED INCOME						$	15,161,000	$	11,873,789	$	8,476,339		8.27	%

See accompanying notes to financial statements.

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Continued)

October 31, 2018

							Percent
	Shares				Market		of Net
Company Name	Held		Cost		Value		Assets

MUTUAL FUNDS:
BOND MUTUAL FUNDS:
BLACKROCK FLOAT RATE INC STRAT		1,500.00	$	19,596	$	19,455
BLACKROCK TAX MUNICIPAL SHS		10,000.00		220,813		197,400
DOUBLELINE LOW DURATION BOND I		49,603.18		500,000		492,064
DOUBLELINE ULTRA SHORT BOND I		49,850.45		500,000		500,000
DOUBLELINE TOTAL RETURN BOND I		226,010.04		2,500,000		2,323,383
GUGGENHEIM TAXABLE MUNI MG		10,000.00		213,921		201,300
INVESCO SENIOR LOAN ETF		10,000.00		233,150		230,100
LOOMIS SAYLES BOND INSTITUTIONAL		120,930.18		1,612,500		1,605,953
NUVEEN PFD & INCOME TE COM		5,000.00		116,924		109,800
OSTERWEIS STRATEGIC INCOME		19,861.83		230,000		221,459
PIMCO FDS INCOME FUND INSTL		128,944.70		1,500,000		1,524,126
PIMCO STRATEGIC INCOME FUND		5,000.00		47,590		45,300
VANGUARD SHORT TERM INVT-GRADE ADM SHS		46,772.69		500,000		486,904
VANGUARD SHORT TERM CORP BOND ADM SHS		22,967.39		500,000		485,990
TOTAL BOND MUTUAL FUNDS				8,694,494		8,443,234		8.24	%

STOCK MUTUAL FUNDS:

INTERNATIONAL EQUITIES
Foreign Large Growth
VANGUARD INTL DIVIDEND APPR ETF		3,000.00		197,873		175,980		0.17	%

SPECIALTY FUNDS
Conservative Allocation
VANGUARD WELLESLEY INCOME INV SHS		20,045.04		422,892		517,763		0.51	%

Financial
SPDR S&P REGIONAL BANKING		4,500.00		249,908		242,955		0.24	%

Technology
FIRST TRUST NASDAQ TECH DIV ETF		3,000.00		109,009		106,170		0.10	%

See accompanying notes to financial statements.

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Continued)

October 31, 2018

							Percent
	Shares				Market		of Net
Company Name	Held		Cost		Value		Assets

MUTUAL FUNDS:
Consumer Discretionary
VANGUARD CONSUMER DISCRETIONARY ETF		2,265.00		299,965		366,907		0.36	%

Industrials
VANGUARD INDUSTRIALS INDEX ADM SHARES		4,695.57		300,000		316,575		0.31	%

Large Cap Blend
COOK & BYNUM FUND		65,145.23		1,000,000		962,194
INVESCO INTL DIV ACHIEV ETF		6,600.00		99,412		97,086
PRIMECAP ODYSSEY STOCK		18,525.38		500,000		588,922
VANGUARD 500 INDEX INVESTOR SHARES		2,383.00		500,000		597,323
				2,099,412		2,245,525		2.19	%

Large Cap Growth
PARNASSUS CORE EQUITY INVESTOR		12,603.98		500,000		557,600		0.54	%

Mid Cap Blend
AKRE FOCUS FUND INSTL		10,855.41		250,000		388,081		0.38	%

Diversified Emerging Markets
ISHARES CORE MSCI EMERGING		1,630.00		99,518		77,035
PZENA EMERGING MARKETS		23,946.36		250,000		236,590
VANGUARD EMERGING MKTS SEL STOCK INV SHS		10,513.04		250,000		206,897
				599,518		520,522		0.51	%

Moderate Allocation
FPA CRESCENT PORTFOLIO		49,409.16		1,525,303		1,669,535		1.63	%

See accompanying notes to financial statements.

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Continued)

October 31, 2018

								Percent
		Shares				Market		of Net
Company Name		Held		Cost		Value		Assets

MUTUAL FUNDS:
Precious Metals
ISHARES SILVER TRUST	³		23,802.00		399,993		319,185
SPDR GOLD SHARES	³		6,000.00		608,120		690,900
VANECK VECTORS GOLD MINERS			20,832.00		637,276		394,350
					1,645,389		1,404,435		1.37	%

Utilities
REAVES UTILITY INCOME FUND			2,000.00		66,620		60,720
UTILITIES SELECT SECTOR SPDR			11,000.00		357,289		590,590
					423,909		651,310		0.64	%

TOTAL SPECIALTY FUNDS					8,425,305		8,987,378		8.77	%

TOTAL STOCK MUTUAL FUNDS					8,623,178		9,163,358		8.94	%

TOTAL INVESTMENTS IN MUTUAL FUNDS				$	17,317,672	$	17,606,592		17.18	%

See accompanying notes to financial statements.

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Continued)

October 31, 2018

						Percent
				Market		of Net
Company Name		Cost		Value		Assets

OTHER INVESTMENTS:

LIMITED PARTNERSHIPS:
ELLIOTT ASSOCIATES LP CL B	^{2, 3}	$	3,000,000	$	6,142,851
GRAHAM INSTITUTIONAL PARTNERS LP	^{2, 3}		2,365,122		2,595,961
GREENLIGHT MASTERS QUALIFIED LP	^{2, 3}		2,500,000		3,754,625
INFINITY PREMIER FUND, LP	^{2, 3}		3,500,000		4,001,726
LITESPEED PARTNERS, LP	^{2, 3}		2,500,000		3,202,047
MORROCROFT SPECIAL OPPORTUNITY FUND II, LP	^{2, 3}		-		115,267
OAKTREE ENHANCED INCOME FUND II, LP	^{2, 3}		1,850,763		2,344,532
OLD WELL EMERGING MARKETS FUND	^{2, 3}		500,000		437,941
PRIVET FUND LP	^{2, 3}		1,000,000		1,661,451
SEGRA RESOURCE ONSHORE PARTNERS, LP	^{2, 3}		250,000		291,937
STARK INVESTMENTS LP	^{2, 3}		25,521		68,977
TRIARII CAPITAL PARTNERS LP	^{2, 3}		1,000,000		912,101
VIRGO SOCIETAS III (ONSHORE) LP	^{2, 3}		1,420,772		2,009,162
WALNUT INVESTMENT PARTNERS	^{1, 2, 3}		235,567		-
WORLDWIDE OPPORTUNITY FUND (CAYMAN) LTD. CL A-A1	^{2, 3}		1,300,000		1,377,776
WORLDWIDE OPPORTUNITY FUND (CAYMAN) LTD. CL A-A34	^{2, 3}		50,000		46,821
WORLDWIDE OPPORTUNITY FUND (CAYMAN) LTD. CL A-A35	^{2, 3}		50,000		45,554
WORLDWIDE OPPORTUNITY FUND (CAYMAN) LTD. CL A-A36	^{2, 3}		50,000		45,852
WORLDWIDE OPPORTUNITY FUND (CAYMAN) LTD. CL A-A37	^{2, 3}		50,000		45,601
TOTAL LIMITED PARTNERSHIPS			21,647,745		29,100,182		28.40	%

TOTAL OTHER INVESTMENTS		$	21,647,745	$	29,100,182		28.40	%

See accompanying notes to financial statements.

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Continued)

October 31, 2018

									Percent
Sectors and	Shares						Market		of Net
Industries	Held		Company Name		Cost		Value		Assets

COMMON STOCKS:
COMMUNICATION SERVICES
Communication Services		13,000.00	AT&T CORP COM		$	404,615	$	398,840
		4,500.00	BCE INC COM			191,785		174,960
		2,000.00	SK TELECOM LTD SPONSORED A			27,904		51,820
		10,000.00	TELEFONICA BRASIL S.A.			144,120		116,000
		6,691.00	TELEFONICA S A SPONSORED ADR			110,736		54,933
		6,500.00	VODAFONE GROUP			169,802		123,045
						1,048,962		919,598		0.90	%

Media and Entertainment		1,101.00	ALPHABET INC CAP STK CL C	³		641,355		1,185,524
		50.00	BAIDU INC SPON ADR REP A	³		11,087		9,503
		6,500.00	FACEBOOK INC CL A	³		1,095,635		986,635
		4,000.00	WEIBO CORP	³		389,867		236,040
						2,137,944		2,417,702		2.36	%

TOTAL COMMUNICATION SERVICES						3,186,906		3,337,300		3.26	%

CONSUMER DISCRETIONARY
Hotels, Restaurants & Leisure		3,165.00	RADISSON HOSP AB NPV	³		12,343		12,374
		1,000.00	STARBUCKS CORPORATION			54,225		58,270
						66,568		70,644		0.07	%

Retailing		3,000.00	ALIBABA GROUP HLDG LTD SPO	³		529,143		426,840		0.42	%

TOTAL CONSUMER DISCRETIONARY						595,711		497,484		0.49	%

CONSUMER STAPLES
Discount Stores		5,000.00	DOLLAR GEN CORP COM			353,530		556,900
		10,000.00	DOLLAR TREE INC COM	³		786,251		843,000
						1,139,781		1,399,900		1.37	%

Food & Staples Retailing		10,000.00	WALGREENS BOOTS ALLIAN COM			652,690		797,700		0.78	%

Food, Beverage & Tobacco		6,000.00	ANHEUSER-BUSCH INBEV SA/NV			522,857		443,880
		5,000.00	CAMPBELL SOUP CO COM			180,368		187,050
		5,700.00	CISCO SYSTEMS INC			111,360		260,775
		1,500.00	CONSTELLATION BRANDS CL A			136,079		298,845
		6,500.00	CORNING INC COM			181,607		207,675
		500.00	GENERAL MILLS INC COM			20,240		21,900
		2,500.00	MOLSON COORS BREWING COM C			163,317		160,000
						1,315,828		1,580,125		1.54	%

See accompanying notes to financial statements.

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Continued)

October 31, 2018

								Percent
Sectors and	Shares					Market		of Net
Industries	Held		Company Name	Cost		Value		Assets

COMMON STOCKS:
Household & Personal Products		275.00	PROCTER & GAMBLE CO COM		18,418		24,387		0.02	%

TOTAL CONSUMER STAPLES					3,126,717		3,802,112		3.71	%

ENERGY
Energy		35,000.00	CAMECO CORP COM		323,282		375,200
		3,800.00	CHEVRON CORP		402,913		424,270
		4,404.00	EXXON MOBIL CORP COM		378,442		350,911
		2,000.00	NGL ENERGY PARTNERS LP COM		23,880		18,920
		4,800.00	OCCIDENTAL PETROLEUM COM		380,566		321,936
		3,500.00	PHILLIPS 66 COM		375,015		359,870
		1,500.00	ROYAL DUTCH SHELL ADR A		100,414		94,785
		9,000.00	SUNOCO INC COM		215,850		246,060
		4,500.00	VALERO ENERGY CORP COM STK		300,371		409,905
					2,500,733		2,601,857		2.54	%

Natural Resources		3,500.00	OASIS MIDSTREAM PARTNERS COM		64,813		77,035		0.08	%

Pipelines		3,000.00	BP PRUDHOE BAY ROYALTY TRU		256,047		94,920
		2,000.00	BUCKEYE PARTNERS LP COM		124,792		65,620
		3,500.00	DELEK LOGISTICS PARTNERS LP		103,142		110,600
		12,800.00	ENERGY TRANSFER PARTNERS LP		234,907		198,912
		2,000.00	GASLOG PARTNERS LP UNIT LT		49,779		49,700
		4,000.00	GOLAR LNG PARTNERS LP		87,880		56,440
		5,000.00	GREEN PLAINS PARTNERS COM		102,799		76,950
		10.00	ONEOK INC COM		520		656
		4,500.00	SPECTRA ENERGY PARTNERS LP		169,572		155,250
		6,000.00	TALLGRASS ENERGY PARTNERS COM		125,895		130,560
		5,000.00	USA COMPRESSION PARTNERS COM		86,262		73,250
					1,341,595		1,012,858		0.99	%

TOTAL ENERGY					3,907,141		3,691,750		3.60	%

FINANCIALS
Banks		30,000.00	ALLY FINANCIAL INC COM		624,038		762,300
		5,000.00	BANK OF AMERICA CORP COM		96,603		137,500
		5,000.00	BB&T CORP COM		215,613		245,800
		3,000.00	PACWEST BANCORP DEL COM		148,845		121,860
		2,500.00	WELLS FARGO & CO DEL COM		113,118		133,075
					1,198,217		1,400,535		1.37	%

See accompanying notes to financial statements.

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Continued)

October 31, 2018

									Percent
Sectors and	Shares						Market		of Net
Industries	Held		Company Name		Cost		Value		Assets

COMMON STOCKS:
Diversified Financials		7,000.00	ALLIANCE BERNSTEIN HLDG UN			153,050		202,370
		5,000.00	ANNALY CAP MGMT INC COM			82,125		49,350
		7,500.00	ARLINGTON ASSET INVT C CL			106,244		63,075
		2,500.00	BERKSHIRE HATHAWAY INC CL B	³		185,406		513,200
		10,000.00	BLACKSTONE MTG TR INC COM			315,094		337,400
		2,000.00	CAPITAL ONE FINL CORP COM			161,936		178,600
		78,455.00	CAPITALA FINANCE CORP COM			1,363,703		642,546
		8,000.00	CARLYLE GROUP LP COM			201,185		162,160
		800.00	CME GROUP			129,728		146,592
		15,000.00	GOLUB CAPITAL BDC INC COM			226,480		276,750
		1,000.00	INTERCONTINENTAL EXCHANGE COM			74,845		77,040
		200.00	LENDINGTREE INC NEW COM	³		60,866		40,338
		5,000.00	NEW YORK MTG TR INC COM PA			35,055		30,700
		28,000.00	OAKTREE CAPITAL GROUP LLC UNIT			1,224,798		1,171,240
		10,000.00	OXFORD LANE CAP CORP COM			110,256		103,600
		13,000.00	STARWOOD PPTY TR INC COM			286,829		282,360
		23,000.00	THE BLACKSTONE GROUP LP			720,527		744,280
						5,438,127		5,021,601		4.90	%

Insurance		1,500.00	AON PLC SHS CL A			121,687		234,270
		5,000.00	OLD REP INTL CORP COM			84,276		110,250
		2,500.00	TRAVELERS COMPANIES COM			203,356		312,825
		5,000.00	ZURICH INS GROUP LTD SPONS ARD			148,815		154,900
						558,134		812,245		0.79	%

TOTAL FINANCIALS						7,194,478		7,234,381		7.06	%

HEALTH CARE
Health Care Equipment & Services		2,500.00	AXOGEN INC COM	³		81,826		93,225
		2,500.00	DAVITA HEALTHCARE PART COM	³		157,625		168,350
		5,000.00	HOLOGIC INC COM	³		216,378		194,950
		3,550.00	LABORATORY CORP AMER HLDGS	³		376,591		569,953
		10,000.00	MCKESSON CORP COM			1,395,083		1,247,600
		3,000.00	QUEST DIAGNOSTICS INC COM			168,045		282,330
						2,395,548		2,556,408		2.50	%

Pharmaceuticals & Biotechnology		38.00	AMGEN INC COM			5,707		7,326
		2,500.00	ABBVIE INC			229,812		194,625
		5,000.00	ALLERGAN PLC SHS			802,434		790,050
		10,000.00	ASTRAZENECA PLC SPONSORED			235,531		387,800
		1,000.00	IQVIA HOLDINGS INC COM	³		99,090		122,930
		3,000.00	ELI LILLY & CO COM			132,159		325,320

See accompanying notes to financial statements.

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Continued)

October 31, 2018

									Percent
Sectors and	Shares						Market		of Net
Industries	Held		Company Name		Cost		Value		Assets

COMMON STOCKS:
		500.00	MERCK & CO INC COM			26,583		36,805
		500.00	PFIZER INC COM			12,068		21,530
		1,000.00	SEATTLE GENETICS INC COM	³		49,131		56,130
						1,592,515		1,942,516		1.90	%

TOTAL HEALTH CARE						3,988,063		4,498,924		4.39	%

INDUSTRIALS
Capital Goods		500.00	3M COMPANY			71,565		95,130
		4,000.00	ABB LTD SPONSORED ADR			100,795		80,240
		5,000.00	GENERAL ELECTRIC CO			68,524		50,500
						240,884		225,870		0.22	%

Commercial Services & Supplies		500.00	WASTE MGMT INC DEL COM			17,412		44,735		0.04	%

Transportation		5,000.00	USD PARTNERS LP COM UT REP			56,643		53,850		0.05	%

TOTAL INDUSTRIALS						314,939		324,455		0.32	%

INFORMATION TECHNOLOGY
Software & Services		15,000.00	CDK GLOBAL INC COM			691,038		858,600
		3,500.00	MICROSOFT CORP COM			87,413		373,835
		4,000.00	ORACLE CORP COM			110,847		195,360
		1,000.00	RED HAT INC	³		134,191		171,640
		3,000.00	TENCENT HLDGS LTD ADR			100,845		102,990
						1,124,334		1,702,425		1.66	%

Technology Hardware & Equipment		3,500.00	APPLE INC COM			349,916		766,010
		3,000.00	COMMSCOPE HLDG CO INC COM	³		106,952		72,180
		557.00	DELL TECHNOLOGIES INC COM	³		26,290		50,347
		3,500.00	INTEL CORP COM			73,338		164,080
		6,000.00	MICRON TECHNOLOGY INC COM	³		225,077		226,320
		3,000.00	SEAGATE TECHNOLOGY SHS			121,463		120,690
						903,036		1,399,627		1.37	%

TOTAL INFORMATION TECHNOLOGY						2,027,370		3,102,052		3.03	%

MATERIALS		1,580.00	DOWDUPONT INC COM			97,247		85,194
		500.00	ECOLAB INC COM			52,645		76,575
		4,000.00	LOUISIANA PACIFIC CORP			113,115		87,080
TOTAL MATERIALS						263,007		248,849		0.24	%

See accompanying notes to financial statements.

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Continued)

October 31, 2018

								Percent
Sectors and	Shares					Market		of Net
Industries	Held		Company Name	Cost		Value		Assets

COMMON STOCKS:
REAL ESTATE		2,000.00	AMERICAN CAMPUS CMNTYS INC		77,890		79,020
		5,000.00	CARETRUST REIT INC COM		68,082		88,300
		1,500.00	CYRUSONE INC COM		94,748		79,845
		1,000.00	DIGITAL RLTY TR INC COM		58,863		103,260
		12,000.00	EASTERLY GOVT PPTYS COM		214,136		218,040
		3,500.00	GEO GROUP INC COM		83,062		77,385
		10,000.00	HANNON ARMSTRONG SUST COM		153,105		207,500
		2,000.00	IRON MTN INC NEW COM		66,726		61,220
		3,000.00	JERNIGAN CAP INC COM		58,819		58,710
		4,000.00	LTC PPTYS TR INC COM R		159,295		171,080
		15,000.00	MEDICAL PPTYS TR INC COM		185,835		222,900
		2,000.00	OMEGA HEALTHCARE INVS COM		60,291		66,700
		6,000.00	PHYSICIANS RLTY TR COM		112,435		99,480
		6,000.00	TANGER FACTORY OUTLET COM		153,014		133,560
		3,000.00	TECK RESOURCES LTD CL B		91,902		62,010
		3,000.00	VENTAS INC COM		195,931		174,120
		500.00	W P CAREY & CO LLC COM		31,927		33,005
TOTAL REAL ESTATE					1,866,061		1,936,135		1.89	%

UTILITIES		500.00	AMERICAN STS WTR CO COM		19,159		30,610
		6,500.00	DOMINION RES INC VA COM		330,756		464,230
		6,187.00	DUKE ENERGY CORP COM		473,673		511,232
		1,000.00	ENTERGY CORP NEW COM		69,388		83,950
		13,000.00	MLP AMERIGAS PARTNERS L P		581,786		463,450
		5,000.00	SOUTHERN CO COM		209,871		225,150
		2,256.00	WEC ENERGY GROUP INC COM		89,900		154,310
TOTAL UTILITIES					1,774,533		1,932,932		1.89	%

TOTAL INVESTMENTS IN COMMON STOCKS				$	28,244,926	$	30,606,374		29.87	%

See accompanying notes to financial statements.

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Continued)

October 31, 2018

								Percent
		Contracts				Market		of Net
Company Name		Held		Cost		Value		Assets


PUT OPTIONS:
INVESCO QQQ TR PUT OPTION, $160 EXP 12/21/18	³		80.00	$	18,643	$	25,040
INVESCO QQQ TR PUT OPTION, $165 EXP 12/21/18	³		100.00		47,767		44,600
SPDR S&P QT PUT OPTION, $270 EXP 9/21/18	³		40.00		17,120		21,600
TOTAL PUT OPTIONS					83,530		91,240		0.09	%

TOTAL INVESTMENTS IN OPTIONS				$	83,530	$	91,240		0.09	%

See accompanying notes to financial statements.

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Continued)

October 31, 2018

		Coupon										Percent
		Interest			Maturity	Shares				Market		of Net
Company Name		Rate			Date	Held		Cost		Value		Assets

PREFERRED STOCKS:

BAC CAP TR XIV FLOATING RATE	^4,5		4.09	%	N/A		200,000.00	$	179,500	$	163,750
BANK OF AMERICA CORP FLOATING RATE	^4,5		6.30	%	N/A		300,000.00		319,500		316,125
CITIGROUP INC FIXED-FLOATING	^4,5		5.95	%	N/A		250,000.00		247,348		254,063
COMPASS DIVERSIFIED HOLDINGS	^4,5		7.88	%	N/A		9,000.00		208,121		199,624
E TRADE FINANCIAL CORP FIXED-FLOATING	^4,5		5.88	%	N/A		250,000.00		249,688		248,750
GENERAL ELECTRIC CO PERP PFD SER B FIXED-FLOATING	^4,5		4.10	%	N/A		250,000.00		250,000		211,875
GOLDMAN SACHS CAP II FIXED-FLOATING	^4,5		4.22	%	N/A		250,000.00		229,998		200,000
JP MORGAN CHASE & CO FIXED-FLOATING	^4,5		4.91	%	10/20/67		150,000.00		148,409		138,840
MELLON CAP IV PFD CAP FIXED-FLOATING	^4,5		2.92	%	N/A		350,000.00		315,745		287,000
NEW YORK MTG TR INC PFD	⁴		7.75	%	N/A		2,000.00		49,337		46,400
PNC FINANCIAL SVCS GROUP INC FIXED-FLOATING	^4,5		4.85	%	N/A		250,000.00		257,440		241,250
SUNTRUST BANKS INC. FIXED-FLOATING	^4,5		5.05	%	N/A		250,000.00		258,750		241,650
WACHOVIA CAP TRUST III FIXED-FLOATING	^4,5		5.82	%	N/A		1,450,000.00		1,437,499		1,413,749

TOTAL INVESTMENTS IN PREFERRED STOCKS								$	4,151,335	$	3,963,076		3.87	%

See accompanying notes to financial statements.

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Concluded)

October 31, 2018

				Market		Percent of
	Company Name	Cost		Value		Net Assets

Short-term Investments	Northern Institutional Treasury Portfolio Premier Shares	$	9,761,919	$	9,761,919		9.53	%

TOTAL INVESTMENTS - MARKET VALUE					99,605,722		97.22	%

TOTAL OTHER ASSETS IN EXCESS OF LIABILITIES					2,852,218		2.78	%

TOTAL NET ASSETS				$	102,457,940		100.00	%

¹In default

²Market value determined by the Fund's Board of Directors

³Non-income producing security

⁴Perpetual security. Maturity date is not applicable.

⁵Variable rate security. The rate shown is the coupon as of the end of the reporting period.

See accompanying notes to financial statements.

BMC FUND, INC.

SCHEDULE OF OPEN WRITTEN OPTION CONTRACTS

October 31, 2018

											Percent
		Contracts						Market			of Net
Company Name		Held			Cost			Value			Assets
CALL OPTIONS:
DUKE ENERGY CO CALL OPTION, $80 EXP 1/18/19	³		(50.00	)	$	(6,436	)	$	(19,500	)
GENERAL ELECTRIC CALL OPTION, $15 EXP 1/18/19	³		(50.00	)		(3,168	)		(200	)
LENDING TREE INC CALL OPTION, $260 EXP 12/21/18	³		(2.00	)		(5,057	)		(1,300	)
PHILLIPS 66 CALL OPTION, $130 EXP 11/16/18	³		(15.00	)		(4,851	)		(75	)
TOTAL CALL OPTIONS - LIABILITIES						(19,512	)		(21,075	)		-0.02	%

PUT OPTIONS:
ALIBABA GROUP PUT OPTION $135 EXP 4/18/19	³		(15.00	)		(6,287	)		(15,675	)
ALPHABET INC PUT OPTION $1,100 EXP 3/15/19	³		(5.00	)		(24,292	)		(36,850	)
ALPHABET INC PUT OPTION $1,110 EXP 12/21/18	³		(5.00	)		(26,842	)		(26,750	)
BAIDU COM INC PUT OPTION $195 1/18/19	³		(15.00	)		(8,602	)		(22,425	)
CAMPING WORLD PUT OPTION $17.50 EXP 12/21/18	³		(250.00	)		(39,116	)		(51,250	)
CAPITAL ONE PUT OPTION $85 EXP 12/21/18	³		(25.00	)		(6,161	)		(4,600	)
DOLLAR TREE PUT OPTION $80 EXP 2/15/19	³		(100.00	)		(34,270	)		(40,000	)
GENERAL ELECTRIC PUT OPTION $12 EXP 1/18/19	³		(50.00	)		(2,523	)		(10,750	)
MORGAN STANLEY PUT OPTION $50 EXP 1/18/19	³		(30.00	)		(6,014	)		(13,650	)
PHILLIPS 66 PUT OPTION $110 EXP 11/16/18	³		(15.00	)		(5,231	)		(12,405	)
WEIBO CORPORATION PUT OPTION $70 EXP 1/18/19	³		(30.00	)		(10,154	)		(42,300	)
TOTAL PUT OPTIONS - LIABILITIES						(169,492	)		(276,655	)		-0.27	%

TOTAL CALL AND PUT OPTIONS - LIABILITIES					$	(189,004	)	$	(297,730	)		-0.29	%

See accompanying notes to financial statements.

BMC FUND, INC.

STATEMENT OF ASSETS AND LIABILITIES

October 31, 2018

ASSETS AT MARKET VALUE:
Investment securities (cost - $93,080,916)	$	99,605,722
Cash and short-term investments		3,086,366
Receivables, accrued interest and dividends		192,080
Other assets		24,107

Total assets		102,908,275

LIABILITIES:
Call and put options written, at fair value (premiums received $189,004)		297,730
Accounts payable and accrued expenses		14,322
Payable to broker		46,827
Payable to custodian		14,633
Accounts payable to affiliates		76,823

Total liabilities		450,335

NET ASSETS AT OCTOBER 31, 2018 - EQUIVALENT TO $20.77 PER SHARE ON 4,933,281 SHARES OF COMMON STOCK OUTSTANDING	$	102,457,940

SUMMARY OF SHAREHOLDERS' EQUITY:
Common stock, par value $5.00 per share - authorized 70,000,000 shares; outstanding, 4,933,281 shares	$	24,666,405
Retained earnings prior to becoming investment company		65,955,911
Undistributed net investment income		290,893
Realized loss on investments sold and foreign currency transactions		(66,063	)
Undistributed nontaxable gain		5,194,714
Unrealized appreciation of investments		6,416,080

NET ASSETS APPLICABLE TO COMMON STOCK OUTSTANDING	$	102,457,940

See accompanying notes to financial statements.

BMC FUND, INC.

STATEMENT OF OPERATIONS

Year Ended October 31, 2018

INVESTMENT INCOME:
Income:
Interest - fixed income	$	471,741
Dividend income (net of $13,177 foreign tax)		1,943,475

Total income		2,415,216

Expenses:
Legal and professional fees		101,186
Directors' fees (Note 7)		55,500
Investment expense		87,901
Salaries and related expenses		644,454
Property and liability insurance		47,520
Depreciation expense		2,238
Rent		47,019
Office expense and supplies		31,951
Dues and subscriptions		37,314
Travel and entertainment		12,853

Total expenses		1,067,936

Investment income, net		1,347,280

REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized gain from investments sold and foreign currency transactions		1,372,419
Realized gain from expiration or closing of options contracts written		113,320
Change in unrealized appreciation of investments for the period		(1,099,059	)

Net gain on investments		386,680

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	1,733,960

See accompanying notes to financial statements.

BMC FUND, INC.

STATEMENTS OF CHANGES IN NET ASSETS

Years Ended October 31, 2018 and 2017

	2018			2017

INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income	$	1,347,280		$	1,315,213
Realized gains from investment securities sold, options and foreign currency transactions		1,485,739			2,239,801
Change in unrealized appreciation of investments for the year		(1,099,059	)		4,284,845

Net increase in net assets resulting from operations		1,733,960			7,839,859

Distributions to shareholders from:
Net realized gain on investment securities, options and foreign currency transactions		(1,814,378	)		(1,706,556	)
Net investment income		(1,581,479	)		(987,607	)
Retained earnings prior to becoming an investment company		(1,537,424	)		(2,239,118	)

TOTAL INCREASE (DECREASE) IN NET ASSETS		(3,199,321	)		2,906,578

NET ASSETS AT BEGINNING OF PERIOD		105,657,261			102,750,683

NET ASSETS AT END OF PERIOD (Including undistributed net investment income: (2018 - $290,893, 2017 - $525,092)	$	102,457,940		$	105,657,261

See accompanying notes to financial statements.

BMC FUND, INC.

FINANCIAL HIGHLIGHTS

Years Ended October 31, 2018, 2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010 and 2009

The following table presents financial information divided into three parts: per share operating performance, total investment return and ratios and supplemental data for the years ended October 31, 2018, 2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010 and 2009. The first part, per share operating performance, details the changes on a per share basis of the Company's beginning net asset value to its ending net asset value. The second part, total investment return, is based on the market price of the Company's shares of stock. Part three, ratios and supplemental data, provides additional financial information related to the Company's performance.

PER SHARE OPERATING
PERFORMANCE	2018			2017			2016			2015			2014			2013			2012			2011			2010			2009

Net asset value, beginning of period	$	21.42		$	20.83		$	21.22		$	22.62		$	22.57	��	$	22.58		$	22.11		$	22.41		$	21.20		$	20.79
Net investment income		0.27			0.27			0.22			0.35			0.42			0.46			0.35			0.49			0.46			0.48
Net gains (losses) on investments		0.08			1.32			0.39			(0.73	)		0.63			0.60			1.18			0.21			1.70			1.65
Total from investment operations		0.35			1.59			0.61			(0.38	)		1.05			1.06			1.53			0.70			2.16			2.13
Less distributions:
Dividends from net investment income		0.32			0.20			0.23			0.36			0.44			0.47			0.56			0.27			0.46			0.92
Distributions from capital gains		0.37			0.35			-			0.44			0.42			0.33			0.48			0.53			-			-
Distributions from retained earnings		0.31			0.45			0.77			0.22			0.14			0.27			0.02			0.20			0.49			0.80
Total distributions		1.00			1.00			1.00			1.02			1.00			1.07			1.06			1.00			0.95			1.72
Net asset value, end of period	$	20.77		$	21.42		$	20.83		$	21.22		$	22.62		$	22.57		$	22.58		$	22.11		$	22.41		$	21.20

Per share market value, end of period¹	$	18.00		$	18.00		$	18.00		$	18.00		$	18.00		$	18.00		$	18.00		$	18.45		$	18.00		$	16.75

TOTAL INVESTMENT RETURN²		1.95	%		8.83	%		3.39	%		(2.11	)%		5.83	%		5.89	%		8.50	%		3.79	%		11.83	%		12.72	%

RATIOS/SUPPLEMENTAL DATA

Net assets, end of period (in thousands)	$	102,458		$	105,657		$	102,751		$	104,684		$	111,568		$	111,358		$	111,379		$	109,069		$	110,576		$	104,603
Ratio of expenses to average net assets³		1.01	%		1.03	%		1.07	%		0.98	%		0.97	%		0.95	%		1.01	%		0.97	%		1.11	%		1.18	%
Ratio of net investment income to average net assets³		1.28	%		1.26	%		1.06	%		1.59	%		1.83	%		2.04	%		1.57	%		2.15	%		2.11	%		2.40	%
Portfolio turnover rate		14.18	%		24.07	%		15.09	%		17.10	%		22.02	%		33.12	%		32.90	%		60.41	%		38.08	%		69.62	%

¹Unaudited - Based on stock trades, which are very limited, during that year.

²Unaudited - Computed as follows: income from investment operations divided by per share market value.

³Average is computed on a quarterly basis.

See accompanying notes to financial statements.

BMC FUND, INC.

NOTES TO FINANCIAL STATEMENTS

Year Ended October 31, 2018

ORGANIZATION

BMC Fund, Inc. (the “Company”) is a closed-end, diversified investment company registered under the Investment Company Act of 1940, as amended. Prior to becoming a regulated investment company on April 1, 1981, BMC Fund, Inc. operated as a regular corporation. The following is a summary of significant accounting policies followed by the Company in the preparation of its financial statements.

SIGNIFICANT ACCOUNTING POLICIES

A. Investment Valuations – The investment securities are stated at fair value as determined by closing prices on national securities exchanges. Investment securities include corporate bonds, mutual funds, and common and preferred stocks.

The investments in limited partnerships, other investments and venture capital are stated at estimated fair value as determined by the management of these investments and are approved by the Company’s Valuation Committee after giving consideration to historical and projected financial results, economic conditions, financial condition of investee and other factors and events subject to change, and ratified by the Company’s Board of Directors. Because of the inherent uncertainty of those valuations, the estimated values may differ significantly from the values that would have been used had a ready market value for the investments existed, and these differences could be material.

B. Basis of Presentation - The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) as detailed in the Financial Accounting Standards Board’s Accounting Standards Codification.

C. Investment Transactions – Investment transactions are accounted for on the date the order to buy or sell is executed. Realized gains and losses on investments are determined on the basis of specific identification of issues sold or matured. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Realized gains and losses on foreign currency transactions are included with realized gains and losses on investments.

For the year ended October 31, 2018, the Company purchased and sold securities in the amount of $16,997,078 and $14,343,877 (excluding short-term investments and options), respectively.

BMC FUND, INC.

NOTES TO FINANCIAL STATEMENTS

Year Ended October 31, 2018

SIGNIFICANT ACCOUNTING POLICIES (Continued)

D. Option Writing – When the Company writes an option, an amount equal to the premium received by the Company is recorded as a liability and is subsequently adjusted to the current fair value of the option written. Premiums received from writing options that expire unexercised are treated by the Company on the expiration date as realized gains from investments. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or, if the premium is less than the amount paid for the closing purchase transaction, as a realized loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether the Company has realized a gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Company. The Company as writer of an option bears the market risk of an unfavorable change in the price of the security underlying the written option.

E. Income Taxes – No federal tax provision is required as it is the Company’s policy to comply with the provisions of Subchapter M of the Internal Revenue Code of 1954, as amended, including the distribution to its shareholders of substantially all of its income and any capital gains not offset by capital losses. Also, no state income tax provision has been provided because the states in which the Company has income recognize the tax exempt status of a regulated investment company.

The Company did not have an accrual for uncertain tax positions as deductions taken and benefits accrued are based on widely understood administrative practices and procedures, and are based on clear and unambiguous tax law. Tax returns for all years 2014 and thereafter are subject to possible future examinations by tax authorities.

F. Dividend Policy – It is the Company’s policy to pay dividends during the year in sufficient amounts to meet the requirements to maintain its status as a regulated investment company.

G. Cash and Short-Term Investments – For purposes of financial reporting, the Company considers all investments at financial institutions with original maturities of three months or less to be equivalent to cash. Short-term money market investments managed by third party investors are included in investment securities.

H. Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

BMC FUND, INC.

NOTES TO FINANCIAL STATEMENTS

Year Ended October 31, 2018

SIGNIFICANT ACCOUNTING POLICIES (Continued)

I. Fair Value Measurements – Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date.

In determining fair value, the Company uses various valuation techniques. A fair value hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs are to be used when available. Valuation techniques that are consistent with the market or income approach are used to measure fair value. The fair value hierarchy is categorized into three levels based on the inputs as follows:

Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 - Valuations based on inputs, other than quoted prices included in Level 1, that are observable either directly or indirectly.

Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Fair value is a market-based measure, based on assumptions of prices and inputs considered from the perspective of a market participant that are current as of the measurement date, rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company's own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date.

The availability of valuation techniques and observable inputs can vary from investment to investment and are affected by a wide variety of factors, including the type of investment, whether the investment is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the investments existed. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for investments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement.

BMC FUND, INC.

NOTES TO FINANCIAL STATEMENTS

Year Ended October 31, 2018

SIGNIFICANT ACCOUNTING POLICIES (Continued)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following table summarizes fair value information for assets and liabilities measured on a recurring basis as of October 31, 2018.

Asset Description (1)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Fixed Income	$	8,476,339	$	-	$	-	$	8,476,339
Bond Mutual Funds		8,443,234		-		-		8,443,234
Stock Mutual Funds		9,163,358		-		-		9,163,358
Common Stocks – Publicly Traded		30,697,614		-		-		30,697,614
Preferred Stocks – Publicly Traded		3,963,076		-		-		3,963,076
Cash and Cash Equivalents		9,761,919		-		-		9,761,919
Limited Partnerships – Measured at NAV (2)		-		-		-		29,100,182
Total Investments	$	70,505,540	$	-	$	-	$	99,605,722

Liability Description (1)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Call Options	$	(21,075	)	$	-	$	-	$	(21,075	)
Put Options		(276,655	)		-		-		(276,655	)
Total Call and Put Options – Liabilities	$	(297,730	)	$	-	$	-	$	(297,730	)

(1)

There were no transfers between Level 1, Level 2, and Level 3 during the period.

(2)

Certain investments measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Schedule of Investments.

J. Investments in Limited Partnerships - As of October 31, 2018, the Company was invested in limited partnerships. Each of these investments has certain restrictions with respect to rights of withdrawal by the Company as specified in the respective agreements. Generally, the Company is required to provide notice of its intent to withdraw after the investment has been maintained for a certain period of time. The management agreements of the limited partnerships provide for compensation to the managers in the form of fees ranging from 0.5% to 2% annually of net assets and performance incentive allowances or fees ranging from 10% to 20% of net profits earned.

BMC FUND, INC.

NOTES TO FINANCIAL STATEMENTS

Year Ended October 31, 2018

SIGNIFICANT ACCOUNTING POLICIES (Continued)

The following table summarizes the Company's investments in other limited partnerships as of October 31, 2018. The Company's investments in limited partnerships have certain redemption and liquidity restrictions which are described in the below table.

Investment	Redemptions Notice Period	Redemptions Permitted	Liquidity Restrictions
Limited Partnerships
Elliott Associates, LP	60 days	Jan. 1 or July 1	See below (1) (2)
Graham Institutional Partners, LP	60 days	Annually	See below (3)
Greenlight Masters Qualified, LP	105 days	December 31	See below (4)
Infinity Premier Fund, LP	95 days	Quarterly	See below (5) (6)
Litespeed Partners, LP	45 days	Quarterly	See below (6)
Morrocroft Special Opportunity Fund II, LP	90 days	Quarterly	See below (4) (7)
Oaktree Enhanced Income Fund II, LP	N/A	N/A	See below (8)
Old Well Emerging Markets Fund, LP	60 days	Quarterly	See below (9)
Privet Fund LP	90 days	Quarterly	See below (10)
Segra Resource Onshore Partners, LP	60 days	Quarterly	See below (11)
Stark Investments LP	N/A	N/A	See below (12)
Triarii Capital Partners LP	45 days	Quarterly	See below (13)
Virgo Societas Partnership III (Onshore), LP	N/A	N/A	See below (14)
Walnut Investment Partners, LP Worldwide Opportunity Fund (Cayman), Ltd.	N/A 90 days	N/A June 30 or Dec. 31	See below (15) See below (16)

(1)

There is a gate provision if requests for redemptions would cause a decline in aggregate net asset value of 20%. In addition to the 20% withdrawal limitation, a partner may not withdraw more than 25% of the capital in its Class B capital account on any withdrawal date.

(2)

There is a capital surcharge of 1 3/4% for a partial or full withdrawal which may be waived in whole or in part.

(3)

Minimum withdrawal of $500,000 or for all of Limited Partner’s interest in the Partnership, if less. A Limited Partner may not take a partial withdrawal if it would cause the Partnership’s aggregate net asset value to be less than $5,000,000. General Partner may permit a smaller withdrawal or waive the latter requirement

(4)

There is a gate provision regarding requests for redemptions, subject to various unspecified terms.

(5)

Withdrawals of capital contributed less than 12 months preceding the withdrawal date will be subject to a reduction equal to 3% of the requested withdrawal amount.

(6)

There is a gate provision if aggregate requested withdrawal amounts exceed 25% of the aggregate partner capital of the partnership, each limited partner who has submitted a timely request will receive a pro rata portion of the requested withdrawal, and any balance will be considered a timely withdrawal request with respect to the next withdrawal date.

(7)

Minimum withdrawal is $100,000, and subsequent withdrawals may only be made in increments of $100,000. Withdrawal maximum limits: up to 1/5 of investment on initial withdrawal date, up to 1/4 of the remainder as of any subsequent withdrawal date, up to 1/3 of the remainder as of any subsequent withdrawal date, up to 1/2 of the remainder as of any subsequent withdrawal date, and up to the remainder as of any subsequent withdrawal date.

(8)

Redemptions are not permitted.

(9)

Withdrawals of capital contributions may be up to 1/4 of the balance of partner’s capital account.

(10)

Redemptions from portions of capital balance attributable to special investments are permitted only in the general partner’s discretion.

(11)

There is a gate provision regarding requests for more than 25% of its capital account.

(12)

In liquidation.

(13)

Withdrawals made during the twelve calendar months immediately following the Applicable Initial Withdrawal Date will be subject to a withdrawal charge equal to 5% of the amount permitted to be withdrawn.

(14)

Redemptions are not permitted. Unless the general partner elects an earlier date, the partnership expires April 17, 2019, which is the seventy-two month anniversary date of the initial closing of April 17, 2013, subject to a discretionary extension by the general partner of up to two consecutive additional one-year periods.

(15)

Walnut is in receivership.

(16)

Partial redemption may not reduce capital account below the lesser of $100,000 or 1% of the capital accounts of all investors.

BMC FUND, INC.

NOTES TO FINANCIAL STATEMENTS

Year Ended October 31, 2018

SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Company is subject to credit risk to the extent that the investment managers of the underlying limited partnerships are unable to fulfill their obligations according to their organizational documents. The Company, through its investments in limited partnerships, is subject to risk inherent when investing in securities and private investments. In connection with its investments, the Company is subject to the market and credit risk of those investments held or sold short by the limited partnerships. Due to the nature of the Company's investments, the above described risks are limited to the Company's investment balances and unfunded commitments to limited partnerships.

On August 28, 2018, FASB issued Accounting Standards Update 2018-13 (“ASU 2018-13”), “Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement,” which amends the fair value measurement disclosure requirements of ASC Topic 820; “Fair Value Measurement” (“ASC 820”). ASU 2018-13 includes new, eliminated, and modifided disclosure requirements of ASC 820. In addition, ASU 2018-13 clarifies that materiality is an appropriate consideration of entities when evaluating disclosure requirements. ASU 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted and the Company has early adopted ASU 2018-13 with these financial statements.

UNREALIZED APPRECIATION AND DEPRECIATION ON INVESTMENTS

(tax basis)

The amount of net unrealized appreciation (depreciation) and the cost of investment securities for tax purposes, including short-term securities as October 31, 2018, were as follows:

Gross appreciation (excess of value over tax cost)	$	14,101,308
Gross depreciation (excess of tax cost over value)		(7,576,502	)
Net unrealized appreciation	$	6,524,806
Cost of investments for income tax purposes	$	93,080,916

BMC FUND, INC.

NOTES TO FINANCIAL STATEMENTS

Year Ended October 31, 2018

OPTIONS WRITTEN

As of October 31, 2018, portfolio securities valued at $658,218 were held in escrow by the custodian as cover for call options written by the Company.

Transactions in options written during the year ended October 31, 2018 were as follows:

	Number of Contracts			Premiums Received
Options outstanding at October 31, 2017		1,535		$	329,933
Options written		2,509			746,364
Options terminated in closing purchase transactions		(1,125	)		(353,199	)
Options expired		(1,890	)		(426,845	)
Options exercised		(372	)		(107,249	)
Options outstanding at October 31, 2018		657		$	189,004

PLEDGED COLLATERAL

As of October 31, 2018, cash in the amount of $3,640,000 was pledged as collateral for put options sold by the Company.

DISTRIBUTIONS TO SHAREHOLDERS

Classifications of distributions, net investment income/(loss) and net realized gain/(loss) may differ for financial statement and tax purposes. The character of distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or realized gain was recorded by the Company.

On December 11, 2017, a distribution of $0.25 per share was paid to shareholders of record on November 25, 2017.

On March 10, 2018 a distribution of $0.25 per share was paid to shareholders of record on February 25, 2018.

On June 10, 2018, a distribution of $0.25 per share was paid to shareholders of record on May 25, 2018.

On September 10, 2018, a distribution of $0.25 per share was paid to shareholders of record on August 25, 2018.

BMC FUND, INC.

NOTES TO FINANCIAL STATEMENTS

Year Ended October 31, 2018

DISTRIBUTIONS TO SHAREHOLDERS (Continued)

The tax character of distributions paid during 2018 and 2017 was as follows:

	2018		2017
Distributions paid from:
Ordinary income	$	777,270	$	1,891,408
Long-term capital gains		2,294,295		1,233,320
Retained earnings prior to becoming an investment company		1,861,716		1,808,553
	$	4,933,281	$	4,933,281

As of October 31, 2018, there was $1,201,486 of distributable earnings on a tax basis.

The tax components of distributable earnings are determined in accordance with income tax regulations, which may differ from composition of net assets reported under generally accepted accounting principles. The difference for the period ended October 31, 2018 reflects $290,893 of undistributed net investment incomes under generally accepted accounting principles.

ADVISORY BOARD AND REMUNERATION OF DIRECTORS

The Company does not have an advisory board. The independent directors are paid an annual fee of $3,000 plus $1,000 for each meeting attended in person or $500 for each meeting attended by telephone. Each such independent director is paid an additional $1,000 for each day attending a committee meeting in person or $500 by telephone other than on the date of a board meeting. In addition, all directors are reimbursed for their reasonable expenses incurred in attending meetings.

RELATED PARTIES

The Company leases office space from Broyhill Investments, Inc., which is controlled by Paul H. Broyhill and M. Hunt Broyhill, both officers of BMC Fund, Inc. The expense associated with this related party lease for the year ended October 31, 2018 amounted to $47,109. Broyhill Investments, Inc. also acts as a common paymaster for payroll and other shared services. This service is provided at no cost to the Company. All amounts paid by Broyhill Investments, Inc. on behalf of the Company are reimbursed by the Company. The outstanding payable related to these transactions at October 31, 2018 was $76,823.

M. Hunt Broyhill is a director of Capitala Finance Corp., in which the Company is invested.

BMC FUND, INC.

NOTES TO FINANCIAL STATEMENTS

Year Ended October 31, 2018

IMPAIRED SECURITIES

Selected securities at the end of the year have significant investment impairment issues. These selected securities have an aggregate cost basis of $3,776,267 and have been assigned no value at October 31, 2018.

There were no impairment charges during the year. The Company received $175,731 in proceeds during the twelve months ended October 31, 2018, which was treated as a return of capital.

BMC FUND, INC.

DIRECTORS AND OFFICERS (Unaudited)

Year Ended October 31, 2018

The directors of the Fund were elected for a one-year term at the 2018 annual meeting of shareholders of the Fund.

The following table provides information about the directors and the officers of the Fund:

Directors Who Are Interested Persons

Name, Address and Age	Position(s) Held with Fund	Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Other Directorships Held by Director During at Least the Past 5 Years

James T. Broyhill (91) 1930 Virginia Road Winston-Salem, NC 27104	Director Vice Chairman	Since 1976 Since 2005	Retired; Director of Shepherd Street Equity Fund (1998-2008); Vice President of Old Clemmons School Properties, Inc. (2006-present); President of Old Clemmons School Properties, Inc. (1998-2006); former Secretary of the North Carolina Department of Commerce (1989-1991); former Chairman of the North Carolina Economic Development Board (1987-1989); former member, U. S. Senate (1986); former member, U.S. House of Representatives (1963-1986)	None
M. Hunt Broyhill (54) 1870 9^th Street Court, NW Hickory, NC 28601	Director Chairman President Vice President	Since 2008 Since 2014 Since 2007 2001-2007	Chairman of the Fund since February 2014; President of the Fund since February 2007; former Vice President of the Fund (2001-2007); Chief Executive of Broyhill Asset Management, LLC (1997-present); Director and President of Broyhill Investments, Inc. (1988-present); Director (1983-present) and President of Broyhill Family Foundation, Inc. (1988-present); Manager and Vice President of P. B. Realty, LLC (formerly P. B. Realty, Inc.) (1995-present)	Capitala Finance Corp. (Feb. 2013-present)

BMC FUND, INC.

DIRECTORS AND OFFICERS (Unaudited)

Year Ended October 31, 2018

Directors Who Are Interested Persons

Name, Address and Age	Position(s) Held with Fund	Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Other Directorships Held by Director During at Least the Past 5 Years

Paul H. Broyhill (94) 135 Claron Place, SE Lenoir, NC 28645	Director Chairman Emeritus Chief Executive Officer Chairman	Since 1976 Since 2014 2001-2014 1976-2014	Director and Chairman Emeritus; former Chairman (1976-2014) and Chief Executive Officer of the Fund (2001-2014); former President of the Fund (2001-2007); Director (1972-present) and Chairman of Broyhill Investments, Inc. (1988-present); Director (1946-present) and Chairman of Broyhill Family Foundation, Inc. (1989-present); former President of Broyhill Family Foundation, Inc. (1980-1988); Manager and President of P. B. Realty, LLC (formerly P. B. Realty, Inc.) (1983-present)	None
W. Charles Campbell (52) 3400 Sharon Road Charlotte, NC 28211	Director	Since 2011	President and Chief Executive Officer of Flagship Capital Partners, LLC, a private investment real estate firm (2005-present); Chief Executive Officer and Co-managing Partner of Flagship Healthcare Properties, LLC, (formerly Brackett Flagship Properties, LLC), a commercial real estate firm (2010-present)	None
Jan E. Gordon (67) 3075 Rolling Woods Drive Palm Harbor, FL 34683	Director	Since 2001	Retired; former election assistant, Pinellas County, FL Supervisor of Elections (1992-2005)	None
Allene B. Stevens (96) 153 Hillhaven Place SE Lenoir, NC 28645	Director	Since 1983	Private Investor	None

BMC FUND, INC.

DIRECTORS AND OFFICERS (Unaudited)

Year Ended October 31, 2018

Directors Who Are Not Interested Persons

Name, Address and Age	Position(s) Held with Fund	Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Other Directorships Held by Director During at Least the Past 5 Years

Kevin P. Boudreau (55) 117 Shannon Court Rocky Mount, NC 27804	Director	Since 2011	Vice President of Tax and Risk Management, Boddie-Noell Enterprises, Inc., a diversified company with interests in restaurant and land-development projects (2005-present)	None
Margaret M. “Peg” Broyhill (75) 1995 Cedar Rock Estates Lenoir, NC 28645	Director	Since 2015	Retired; former Resident Branch Manager (Lenoir, NC office) (1993-2017) and Senior Vice President of Wells Fargo Advisors (1995-2017)	None
R. Donald Farmer (71) 375 River Haven Drive Taylorsville, NC 28681	Director	Since 2008	President of Don Farmer, CPA, PA, an independent public accounting firm and producer of federal income tax seminars and seminar materials (1984-present)	None
Robert G. Fox, Jr. (69) 330 Lams Way Vilas, NC 28692	Director	Since 2008	President of RGF Consulting, Inc., a financial consulting services provider (2010-present); former Chief Banking Officer of NewDominion Bank (2005-2010); Executive Vice President of First Charter Bank/First Charter Corporation (1993-2005)	None
Mark E. Roberts (56) 269 River Ridge Drive Wallace, NC 28466	Director	Since 2014	Chief Investment Officer of Ironsides Asset Advisors, LLC, a registered investment advisory firm (2009-present); Chief Investment Officer of Biltmore Family Offices, LLC (May 2013-January 2017); former Director of Global Equities and Hedges Strategies, State of North Carolina Retirement System (2003-2009)	None

BMC FUND, INC.

DIRECTORS AND OFFICERS (Unaudited)

Year Ended October 31, 2018

Other Executive Officers

Name, Address and Age	Positions Held with Fund	Length of Time Served	Principal Occupation During Past 5 Years	Directorships Held by Officer During at Least the Past 5 Years

Boyd C. Wilson, Jr. (66) 646 Pleasant Hill Road Lenoir, NC 28645	Vice President and Chief Financial Officer	Since 2006	Vice President and Chief Financial Officer of the Fund since February 2006; Director (2007-present) and Executive Vice President of Broyhill Investments, Inc. (2005-present); Vice President of Broyhill Family Foundation, Inc. (2007-present); Treasurer of Broyhill Wakin General Partners, LLC (2008-present); Manager and Vice President of P. B. Realty, LLC (formerly P. B. Realty, Inc.) (2006-present); Vice President – Finance & Administration of Kincaid Furniture Company, Incorporated (1990-2005)	CommunityOne Bancorp (2011-2017); Bank of Granite Corp. (1996-2013)
Christopher R. Pavese (42) 166 Pleasant Point Drive Hickory, NC 28601	Vice President Chief Investment Officer	Since 2013 Since 2011	Vice President (2013-present) and Chief Investment Officer of the Fund since 2011; Chief Investment Officer of Broyhill Asset Management, LLC since 2008; Portfolio Manager of the Fund (2005-2011)	None

Danny A. Gilbert (52) 603 Stonecroft Ct. SE Lenoir, NC 28645	Vice President Chief Compliance Officer	Since Feb. 2018 Since June 2017	Vice President (since February 2018) and Chief Compliance Officer of the Fund since June 2017; former Assistant City manager and Finance Director, City of Lenoir, NC (2006-2016)	None

BMC FUND, INC.

DIRECTORS AND OFFICERS (Unaudited)

Year Ended October 31, 2018

Name,

Address and Age

Positions
Held

with Fund

Length of

Time
Served

Principal

Occupation

During Past

5 Years

Directorships Held
by Officer

During at Least

the Past 5 Years

Carol Frye (61)

1009 Frosty Lane, NE

Lenoir, NC 28645

Secretary and Treasurer

Since 2001

Secretary and Treasurer of the Fund

since 2001; Secretary and Treasurer of Broyhill Investments, Inc. (2000-present); Director (2001-present), Secretary and Treasurer of Broyhill Family Foundation, Inc. (2003-present); Secretary of Broyhill Wakin General Partners, LLC (1997-present); Secretary and Treasurer of P. B. Realty, LLC (formerly P. B. Realty, Inc.) (2001-present)

None

BMC FUND, INC.

ADDITIONAL INFORMATION (Unaudited)

Year Ended October 31, 2018

Proxy Voting - The policies and procedures that the Company uses to determine how to vote proxies relating to its portfolio securities are available without charge, upon request, by calling 828-758-6100; on the Company’s website at http://www.bmcfund.com; and on the Securities and Exchange Commission’s website at http://www.sec.gov.

Information regarding how the Company voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling 828-758-6100, and on the SEC’s website at http://www.sec.gov (see Form N-PX).

Portfolio Holdings - The Company files a complete schedule of its portfolio holdings for the first and third quarters of its fiscal year with the SEC on Form N-Q. The Company’s Form N-Q filings are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the SEC’s Public Reference Room may be obtained by calling 1-202-551-8090.

Item. 2. Code of Ethics.

On July 26, 2003, the Board of Directors of the Registrant adopted a Code of Ethics for the principal executive officer and principal financial and accounting officer. The Code was amended by the Board of Directors on February 24, 2007.

(c)-(e) N/A

(f) A copy of the Code of Ethics is attached as an exhibit.

Item 3. Audit Committee Financial Expert.

The Board of Directors of the Registrant has determined that R. Donald Farmer, a member of its Audit Committee, is an audit committee financial expert. Mr. Farmer is an independent director of the Registrant.

Item 4. Principal Accountant Fees and Services.

(a) Audit Fees: $50,600.00 for the fiscal year ended October 31, 2017; $74,250.00 for the fiscal year ended October 31, 2018.

(b) Audit-Related Fees: $647.00 for the fiscal year ended October 31, 2017; $1,426.50 for the fiscal year ended October 31, 2018. These fees were incurred for travel-related expenses.

(c) Tax Fees: $0.00 for the fiscal year ended October 31, 2017; $9,000.00 for the fiscal year ended October 31, 2018. These fees were incurred for preparation of the tax returns.

(d) All Other Fees: $0.00 for the fiscal year ended October 31, 2017; $0.00 for the fiscal year ended October 31, 2018. These fees were incurred for report production and printing.

(e)(1) A copy of the Audit Committee's pre-approval policies and procedures is attached as an exhibit.

(e)(2) One hundred percent of the services described in Items 4(b) through 4(d) were approved in accordance with the Audit Committee Pre-Approval Policy. As a result, none of such services was approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) None of the hours expended on the principal accountant's engagement to audit the Registrant's financial statements for the fiscal year ended October 31, 2018 was attributed to work performed by persons other than the principal accountant's full-time, permanent employees.

(g) N/A

(h) N/A

Item 5. Audit Committee of Listed Registrants.

N/A

Item 6. Schedule of Investments.

Included as a part of the report to shareholders filed under Item 1.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

The Board of Directors of the Registrant adopted Proxy Voting Policies and Procedures on July 26, 2003 and amended them October 30, 2003, April 5, 2004 and May 26, 2005. A copy as amended is attached as an exhibit.

Item 8. Portfolio Managers of Closed-End Investment Companies.

(a)(1) As of the date of filing of this report, M. Hunt Broyhill, Chairman and President, and Christopher R. Pavese, CFA, Vice President and Chief Investment Officer, are primarily responsible for the day-to-day management of the Company’s portfolio. Mr. Hunt Broyhill has had such responsibility since 2001. He has been engaged in asset management for various institutions and high net worth individuals for more than five years. Prior to joining the Company on March 1, 2005, Mr. Pavese was a Vice President and Portfolio Manager at JP Morgan Private Bank from January 1999 until February 2005. At JP Morgan, Mr. Pavese was engaged in asset management, portfolio strategy, and asset allocation for high net worth individuals, personal trusts, endowments and foundations.

(a)(2) The following tables provide information regarding registered investment companies other than the Registrant, other pooled investment vehicles, and other accounts over which the Registrant’s portfolio managers also have day-to-day management responsibilities. The tables provide the numbers of such accounts, the total assets in such accounts and the number of accounts and the total assets in the accounts with respect to which the fees are based on performance. The information is provided as of the Registrant’s fiscal year ended October 31, 2018.

M. Hunt Broyhill

	Other Registered Investment Companies	Other Pooled Investment Vehicles	Other Accounts
Number of Accounts Managed	None	1	13
Number of Accounts Managed with Performance-Based Advisory Fees	None	None	None
Assets Managed	$0	$325,726	$35,931,424
Assets Managed with Performance-Based Advisory Fees	$0	$0	$0

Christopher R. Pavese

	Other Registered Investment Companies	Other Pooled Investment Vehicles	Other Accounts
Number of Accounts Managed	None	None	79
Number of Accounts Managed with Performance-Based Advisory Fees	None	None	8
Assets Managed	$0	$0	$68,043,856
Assets Managed with Performance-Based Advisory Fees	$0	$0	$2,406,363

Material Conflicts of Interest

The Fund recognizes that actual or potential conflicts of interest are inherent in our business. These actual or potential conflicts may arise when a portfolio manager has day-to-day portfolio management responsibilities with respect to more than one fund or account. Certain investments may be appropriate for the Fund and also for other clients advised by the portfolio manager. Investment decisions for the Fund and other clients are made with a view to achieving their respective investment objectives and after consideration of such factors as their current holdings, availability of cash for investment and the size of their investments generally. Therein lies the possibility that a particular security could be bought or sold for the Fund and also for other clients, along with the possibility that a particular security could be bought or sold for the Fund while the opposite transaction could be occurring for other clients due to their investment strategy.

To the extent that a portfolio manager has responsibilities for managing accounts in addition to the Fund, the portfolio manager will need to divide his time and attention among relevant accounts.

The Fund also recognizes that in some cases, an actual or potential conflict may arise where a portfolio manager may have an incentive, such as a performance-based fee.

On December 13, 2014, the Board of Directors of the Registrant adopted a Conflicts of Interest Policy for Portfolio Managers.

(a)(3)

Compensation Structure of Portfolio Managers

The compensation structure for each portfolio manager is based upon a fixed salary as well as a discretionary bonus determined by the senior management of the Registrant. Salaries are determined by the senior management and are based upon an individual’s position and overall value to the Registrant. Bonuses are also determined by management and are based upon an individual’s overall contribution to the success of the Fund and the profitability of the Registrant. Salaries and bonuses for portfolio managers are not based upon criteria such as performance of the Fund or the value of assets of the Registrant. Portfolio managers also have the opportunity to participate in other employee benefits available to all of the employees of the Registrant.

(a)(4) The dollar range of the Registrant’s equity securities owned beneficially by the Registrant’s portfolio managers as of the Registrant’s fiscal year ended October 31, 2018 is set forth below:

Name of Portfolio Manager	Dollar ($) Range of Registrant’s Shares Beneficially Owned
M. Hunt Broyhill	Over $1,000,000
Christopher R. Pavese	$1-$10,000

(b) N/A

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

None

Item 10. Submission of Matters to a Vote of Security Holders.

N/A

Item 11. Controls and Procedures.

Within the 90 days prior to the date of this report, the Registrant's management carried out an evaluation, under the supervision and with the participation of Registrant's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Registrant's disclosure controls and procedures pursuant to Rule 30a-3(b) of the Investment Company Act of 1940. Based upon the evaluation, the Chief Executive Officer and Chief Financial Officer concluded as of a date within 90 days of the filing of this report that the Registrant's disclosure controls and procedures are effective in timely alerting them to material information relating to the Registrant required to be included in the Registrant's periodic SEC filings.

There were no significant changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of the period covered by the report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

None.

Item 13. Exhibits.

(a)(1) The Registrant's Code of Ethics is attached as Exhibit 13(a)(1).

(a)(2) Certifications.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BMC Fund, Inc.

By

/s/ Boyd C. Wilson, Jr.
Boyd C. Wilson, Jr.
Vice President and
Chief Financial Officer

Date: December 17, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

��

By

/s/ M. Hunt Broyhill
M. Hunt Broyhill
Chairman and President

Date: December 17, 2018

By

/s/ Boyd C. Wilson, Jr.
Boyd C. Wilson, Jr.
Vice President and
Chief Financial Officer

Date: December 17, 2018

	Page No.

Letter to Shareholders – Management’s Discussion of Fund Performance	1

Graphic Presentation of Portfolio Holdings and Sector Diversification	3

Supplemental Information	4

Report of Independent Registered Public Accounting Firm	5

Schedule of Investments	6

Schedule of Open Written Option Contracts	19

Statement of Assets and Liabilities	20

Statement of Operations	21

Statements of Changes In Net Assets	22

Financial Highlights	23

Notes to Financial Statements	24

Directors and Officers	33

Additional Information	38

BMC Fund N-CSRCertified annual shareholder report (management investment company)