UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-1861
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Sentry Fund, Inc.
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(Exact name of registrant as specified in charter)
1800 North Point Drive, Stevens Point, WI 54481
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(Address of principal executive offices) (Zip code)
William M. O'Reilly, 1800 North Point Drive, Stevens Point, WI 54481
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(Name and address of agent for service)
Registrant's telephone number, including area code: (715)346-6000
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Date of fiscal year end: 10/31/02
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Date of reporting period: 04/30/03
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Sentry Fund, Inc.
Semi-Annual Report
No Sales Charges
No Redemption Fees
No 12b-1 Fees
April 30, 2003
SENTRY FUND, INC.
1800 North Point Drive - Stevens Point, Wisconsin 54481
MESSAGE TO SHAREHOLDERS June 5, 2003
We are pleased to provide this Sentry Fund, Inc. report covering operating
results for the six-month period ended April 30, 2003.
Average Annual
Total Return* Total Return*
1 Year (15.07%) (15.07%)
5 Year (33.86%) (7.94%)
10 Year 53.68% 4.39%
A weak economy, war in Iraq, nuclear threats from North Korea and continued
threats of terrorism combined to produce a negative environment for stock
investors. The stock market held on in the fourth quarter of 2002 but declined
again in the first quarter of 2003 as war with Iraq became imminent. Fear of a
protracted conflict was allayed as the U.S. brought a swift end to the battle.
The hostile global environment proved to be too much to overcome for the stock
market as stocks started out 2003 on the downside. The S&P 500 declined 3.2% for
the first quarter of 2003.
The swift end to the war has resulted in some renewed enthusiasm for stocks and
a more positive outlook for the economy. As we approach the second half of 2003,
confidence is improving. Corporate earnings should also improve, especially
versus a weak showing in the last half of 2002.
The wild cards are also more positive. There is a potential for a tax cut as
Congress tries to forge an agreement on a new package. The Federal Reserve has
given indications that they lean toward accommodation for the foreseeable
future. These are both potential positives for stocks.
We appreciate your participation and support of the Sentry Fund. We look forward
to your continued participation in the future.
Sincerely,
James J. Weishan
President
* "Total Return" is calculated including reinvestment of all income dividends
and capital gain distributions. Results represent past performance and do not
indicate future results. Both the value of an investment in the Fund and the
return on the investment will fluctuate, and redemption proceeds may be higher
or lower than an investorOs original cost. Further, the returns do not reflect
the deduction of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares.
SENTRY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2003
(Unaudited)
ASSETS:
Investments in securities, at
market value (cost $53,867,662) $49,821,568
Cash 203,083
Dividends receivable 31,443
Prepaid insurance 1,168
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Total assets $50,057,262
LIABILITIES:
Investment securities purchased 554,700
Investment advisory fees 87,974
Transfer agent fees 1,786
Custodian fees 860
Professional services 7,601
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Total liabilities 652,921
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NET ASSETS $49,404,341
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ANALYSIS OF NET ASSETS:
Paid in capital $59,024,023
Undistributed net investment income 47,616
Accumulated undistributed net realized loss
on sales of investments (5,621,204)
Net unrealized appreciation of investments (4,046,094)
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Net assets, for 5,757,133 shares outstanding $49,404,341
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Net asset value and
Eredemption and offering price per share $8.58
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STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2003
(Unaudited)
INVESTMENT INCOME:
Income:
Dividends $358,512
Interest 16,079
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Total investment income $374,591
Expenses:
Investment advisory fees 181,126
Transfer agent fees 11,415
Professional services 14,146
Printing, stationery and postage 3,167
Licenses and fees 15,506
Directors' fees 2,875
Bank services charges 5,194
Insurance expenses 14,170
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Total expenses 247,599
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Net investment income $126,992
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NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized loss on sales of investment securities (1,183,163)
Increase in unrealized appreciation
of investment securities 2,062,196
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Net realized and unrealized gain
on investment securities 879,033
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Net increase in net assets resulting
from operations $1,006,025
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STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended April 30, 2003 and 2002
(Unaudited)
2003 2002
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $126,992 $54,841
Net realized (loss) gain on sales
of investments (1,183,163) (382,597)
Increase (decrease)in unrealized
appreciation on investments 2,062,196 2,827,252
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Net change in net assets
resulting from operations 1,006,025 2,499,496
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DISTRIBUTIONS:
Dividends from net investment income (232,532) (371,299)
Distributions of net realized gains 0 (247,533)
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Total distributions to shareholders (232,532) (618,832)
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SHARE TRANSACTIONS:
Net proceeds from sale of shares 604,506 870,816
Net asset value of shares issued to
shareholders in reinvestment
of distributions 228,863 608,040
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833,369 1,478,856
Cost of shares redeemed (1,377,804) (3,360,231)
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Net (decrease) in net assets
derived from share transactions (544,435) (1,881,375)
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Total increase (decrease) in net assets 229,058 (711)
NET ASSETS:
Beginning of period 49,175,283 61,392,877
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End of period $49,404,341 $61,392,166
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See accompanying notes to financial statements
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Significant Accounting Policies
Sentry Fund, Inc. (Fund) is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The Fund is
affiliated with Sentry Insurance a Mutual Company. The Fund's
investment advisor, Sentry Investment Management, Inc., and the Fund's
underwriter, Sentry Equity Services, Inc., are wholly-owned
subsidiaries of Sentry Insurance a Mutual Company. The financial
statements have been prepared in conformity with accounting principles
generally accepted in the United States of America which require
mangement to make certain estimates and assumptions at the date of the
financial statements. Actual results could differ from those estimates.
The following summarizes the significant accounting policies of the Fund.
Security Valuation - Portfolio securities which are traded on a
national securities exchange are valued at the last sales price as of
the close of trading on the New York Stock Exchange or, if there has
been no sale on that day, at the last bid price. Securities traded on
the over-the-counter market are valued at the mean between the last
quoted bid and asked prices. Securities, which are purchased within 60
days of their stated maturity, are valued at amortized cost, which
approximates fair value.
Federal Income and Excise Taxes - No provision for Federal income or
excise taxes is recorded since the Fund intends to distribute to its
shareholders substantially all of its taxable income, and to otherwise
comply with the provisions of the Internal Revenue Code applicable to
regulated investment companies.
Investment Income and Security Transactions - Security transactions are
accounted for on the trade date. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Interest income is
recognized when earned. Realized gains and losses from securities
transactions are determined by comparing the identified cost of the
security lot sold with the net sales proceeds.
2. Investment Advisory Fees and Other TransactionsWith Affiliates
Under terms of its investment advisory agreement with Sentry Investment
Management, Inc., the Fund pays an advisory fee equal to .75% of the
average daily net assets of the Fund. However, if the total annual
expenses of the Fund (excluding taxes, portfolio brokerage commissions
and interest, but including investment advisory fees) exceed 1.5% of
the first $30,000,000 and 1% of the balance of the average daily net
assets of the Fund in any one fiscal year, the investment adviser will
reimburse the Fund for such excess.
3. Purchases and Sales of Securities
Purchases and sales of common stock during the six months ended April 30,
2003 aggregated $11,174,796 and $12,320,749, respectively.
PORTFOLIO OF INVESTMENT SECURITIES - April 30, 2003 SENTRY FUND, INC.
Value
Shares COMMON STOCKS (95.9%) (Note 1)
BASIC MATERIALS (1.5%)
6,000 Alcoa Inc. 137,580
6,000 Dow Chemical 195,840
7,000 DuPont El Denemours & Co. 297,710
3,000 International Paper Co. 107,250
BUSINESS SERVICE (2.1%)
30,000 Fiserv Inc. 882,600
5,000 SCP Pool Corp. 165,050
CAPITAL GOODS (7.1%)
7,000 Boeing Company 190,960
2,000 General Dynamics Corp. 124,140
72,000 General Electric Co. 2,120,400
7,000 Honeywell Int'l. Inc. 165,200
10,000 Oshkosh Truck Corp. 560,000
3,500 Raytheon Company 104,755
4,200 United Technologies Corp. 259,602
COMPUTER EQUIPMENT (4.9%)
53,000 Cisco Systems Inc. 795,000
22,400 Hewlett-Packard Co. 365,120
15,000 Int'l. Business Machines Corp. 1,273,500
CONSUMER PRODUCTS (2.5%)
4,000 Colgate-Polmolive Co. 228,860
7,000 Gillette Co. 213,150
9,000 Proctor & Gamble Co. 808,650
CONSUMER SERVICES (2.7%)
20,000 Coinstar Inc. 365,800
10,000 Regis Corporation 283,300
40,000 Sylvan Learning Systems Inc. 701,600
DRUG & HEALTH CARE (11.9%)
7,800 Amgen Inc. 478,140
5,000 Baxter International Inc. 115,000
12,600 Bristol-Myers Squibb Co. 321,804
20,000 Cooper Companies Inc. (The) 558,000
3,500 HCA Inc. 112,350
20,000 Johnson & Johnson 1,127,200
8,200 Medtronic Inc. 391,468
16,000 Merck & Co., Inc. 930,880
59,590 Pfizer Inc. 1,832,393
ENERGY (11.3%)
14,700 Anadarko Petroleum Corp. 652,680
1,963 Apache Corp. 112,382
3,200 Burlington Resources Inc. 148,192
20,000 Ensco Mobil Corp. 508,000
50,000 Exxon Mobil Corporation 1,760,000
20,000 Helmerich & Payne Inc. 514,600
5,000 Nabors Industries Ltd. 196,000
20,000 Pride International Inc. 310,400
20,000 Rowan Companies Inc. 410,000
2,500 Schlumberger Ltd. 104,825
20,000 Tidewater Inc. 538,000
168,800 Trico Marine Services Inc. 335,912
ENTERTAINMENT (2.0%)
5,900 Clear Channel Communications 230,749
14,300 Disney (Walt) Co. (The) 266,838
10,800 Viacom Inc. Class B 468,828
FINANCIAL (9.8%)
5,000 Allstate Corporation 188,950
12,200 American Express Co. 461,892
10,000 Bank of America Corp. 740,500
20,000 Citigroup Inc. 785,000
10,000 Corus Bankshares Inc. 430,900
3,500 Goldman Sachs Group Inc. 265,650
3,600 Merrill Lynch Co. Inc. 147,780
18,000 Morgan (JP) Chase & Co. 528,300
6,700 Morgan Stanley 299,825
18,600 US Bancorp 411,990
11,800 Wells Fargo Co. 569,468
FOODS & BEVERAGES (2.3%)
18,000 Coca-Cola Co. 727,200
7,800 PepsiCo, Inc. 337,584
4,500 Sara Lee Corp. 75,510
Value
Shares (Note 1)
INSURANCE (3.9%)
25,000 Ace Ltd. 827,000
19,000 American Int'l Group, Inc. 1,101,050
INTERNET (0.6%)
22,850 AOL Time Warner Inc. 312,588
MANUFACTURING (2.4%)
3,000 3M Company 378,120
50,800 Tyco International Ltd. 792,480
RESTAURANT (4.4%)
10,000 CBRL Group Inc. 318,800
10,700 McDonald's Corp. 182,970
50,000 Rare Hospitality Int'l. Inc. 1,457,500
10,000 Ruby Tuesday Inc. 197,000
RETAIL (11.4%)
10,000 Abercrombie & Fitch Co. 328,800
20,000 Home Depot Inc. 562,600
10,000 KohlOs Corp. 568,000
20,000 Michaels Stores Inc. 624,800
20,000 Petco Animal Supplies Inc. 422,600
20,000 Petsmart Inc. 302,600
3,500 Sears Roebuck & Co. 99,190
10,000 Tractor Supply Company 423,200
32,000 Wal-Mart Stores, Inc. 1,802,240
30,000 West Marines 489,900
SEMICONDUCTORS (2.2%)
49,000 Intel Corp. 900,130
10,000 Texas Instruments Inc. 184,900
SOFTWARE & SERVICES (4.6%)
77,800 Microsoft Corp. 1,988,568
22,200 Oracle Corp. 263,736
TELECOMM (2.9%)
1,960 AT&T Corp. 33,418
28,000 SBC Communications Inc. 654,080
20,000 Verizon Communications 747,600
TOBACCO (1.1%)
18,000 Altria Group Inc. 553,680
TRANSPORTATION (4.3%)
4,500 Burlington Northern Santa Fe Inn 126,720
1 Ford Motor Co. 10
30,000 Harley-Davidson, Inc. 1,333,200
10,000 Harman International Industries 665,900
UTILITIES (0.0%)
2,900 El Paso Corp. 21,750
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Total Common Stocks
(cost $51,452,300) 47,406,206
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Principal
Amount SHORT-TERM SECURITIES (4.9%)
COMMERCIAL PAPER - DISCOUNTED
497,000 American Express Credit Corp.
Note due 05/06/03 496,915
555,000 American General Finance Corp.
Note due 05/01/03 555,000
453,000 American General Finance Corp.
Note due 05/16/03 452,766
411,000 Household Finance Corp.
Note due 05/09/03 410,855
500,000 Schering-Plough Corp.
Note due 05/13/03 499,796
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Total Short-Term Securities
(Cost $2,415,362) 2,415,362
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TOTAL INVESTMENTS (100.8%)
(Cost $53,867,662) 49,821,568
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CASH AND RECEIVABLES
LESS LIABILITIES (-0.8%) (417,227)
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NET ASSETS (100%) $49,404,341
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See accompanying notes to financial statements
FINANCIAL HIGHLIGHTS
The following presents information relating to a share of capital stock of the
Fund outstanding for the entire period:
Year Ended October 31,
For Six Months
Ending 4-30-03 2002 2001 2000 1999 1998
Net asset value, beginning of period $ 8.44 $ 9.86 $14.90 $17.64 $19.80 $23.95
Income from investment operations
Net investment income .02 .03 .06 .08 .15 .11
Net realized and unrealized gains (losses)
on investments .16 (1.35) (2.41) (.09) (.19) (.30)
--- ----- ----- ---- ---- ----
Total from investment operations .18 (1.32) (2.35) (.01) (.04) (.19)
Less distributions
Dividends from net investment income (.04) (.06) (.08) (.13) (.12) (.11)
Distribution from net realized gains (.00) (.04) (2.61) (2.60) (2.00) (3.85)
---- ---- ----- ----- ----- -----
Total distributions (.04) (.10) (2.69) (2.73) (2.12) (3.96)
Net asset value end of period $8.58 $8.44 $9.86 $14.90 $17.64 $19.80
===== ===== ===== ====== ====== ======
Total return 2.14%* (13.58%) (18.47%) .46% (.57%) (.76%)
Net assets, end of period (in thousands) $49,404 $49,175 $61,393 $80,520 $95,689 $111,850
Ratio of expenses to average net assets .99%** .96% .91% .88% .84% .83%
Ratio of net investment income to
Eaverage net assets .53%** .32% .54% .50% .81% .55%
Portfolio turnover rate 24.28% 37.95% 63.22% 91.38% 24.33% 29.85%
* The Total Return for the twelve months ended April 30, 2003 was (15.07%). The
return does not reflect the deduction of taxes that a shareholder would pay on
fund distributions or the redemption of fund shares.
** The ratios of expensesand net investment income to average net assets are
annualized.
Board of Directors
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Thomas R. Copps
David W. Graebel
William J. Lohr
Dale R. Schuh, Chairman
Steven J. Umland
Officers
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James J. Weishan, President
Wallace D. Taylor, Vice President
William M. OOReilly, Secretary
William J. Lohr, Treasurer
Investment Adviser
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Sentry Investment Management, Inc.
Stevens Point, Wisconsin
Underwriter
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Sentry Equity Services, Inc.
Stevens Point, Wisconsin
Custodian
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Citibank, N.A.
New York, New York
Legal Counsel
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Kirkland & Ellis
Chicago, Illinois
This report has been prepared for the general information of shareholders of the
Fund and is not authorized for distribution to prospective investors unless
preceded or accompanied by an effective Prospectus which contains other
pertinent information.
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.
Sentry Fund, Inc., Registrant
BY: s/James J. Weishan
--------------------------------------
James J. Weishan, President
Date: June 4, 2003
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/ James J. Weishan June 4, 2003
--------------------------------------
James J. Weishan, President
By: s/William J. Lohr June 4, 2003
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William J. Lohr, Treasurer
By: s/William M. O'Reilly June 4, 2003
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William M. O'Reilly, Secretary