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3235-0570
Expires:
September 30, 2007
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hours per
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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: 811-05807
NAIC Growth Fund, Inc.
(Exact name of registrant as specified in charter)
711 West 13 Mile Road, Madison Heights, MI 48071
(Address of principal executive offices) (zip code)
Kenneth S. Janke, Chairman and President
NAIC Growth Fund, Inc.
711 W. 13 Mile Road
Madison Heights, MI 48071
(248) 583-6242
(Name and address of agent for service)
Registrant's telephone number, including area code: (877) 275-6242
Date of fiscal year end: December 31
Date of reporting period: June 30, 2006
Item 1. Reports to Stockholders
NAIC Growth Fund, Inc.
Semi-Annual Report
June 30, 2006
www.naicgrowthfund.com
Contents
Report to Shareowners 3
Statement of Assets and Liabilities 4
Statement of Operations 5
Statements of Changes in Net Assets 6
Financial Highlights 7
Portfolio of Investments 8
Notes to Financial Statements 11
2006 Annual Shareholders Meeting 15
Director Compensation 16
NAIC Growth Fund, Inc., Board of Directors 17
Shareowner Information 17
page 2
Report to Shareowners:
June 30, 2006
With the world in an uproar and many
political uncertainties, the stock market treaded water for the
most part during the first half of the year. Oil prices
continued at a high level and interest rates were increased on
a regular basis. Even after the end of June, there were more
upheavals in the Mideast with violence erupting between
Israel and Lebanon. None of these events were positive signs
for the stock market.
Additions to the portfolio included 11,000
Biomet bringing the total to 28,000 shares; 8,000 Jack Henry
& Associates (30,000); 5,000 Johnson & Johnson (20,000);
3,000 Medtronic (17,000); 4,000 McCormick (24,000),
10,000 Sysco (30,000) and 1,000 Washington Mutual
(15,000).
Sales reduced the number of stocks in the
portfolio with Carlisle, ConAgra Foods, Diebold, Donaldson,
First Industrial Real Estate, H.J. Heinz and Merck being sold
in their entirety. There were also partial sales of 2,000
Johnson Controls and 10,000 O'Reilly Automotive, although
we continue to hold 10,000 Johnson Controls and 30,000
O'Reilly Automotive.
The result of the sales enabled the Board of
Directors to declare a 50 cent per share capital gain
distribution to shareowners that was payable on July 6, 2006.
Directors believe the shareholders should reap the benefits of
a portion of our Fund's capital gains.
We would also like to inform you that James
M. Lane has recently retired from the Board of Directors.
We greatly appreciate his many years of service to the Fund
and wish him well. Mr. Robert M. Bilkie, Jr., 45, was
appointed to serve the remainder of Mr. Lane's term on the
Board and on the audit committee. During the past twenty-
two years, Mr. Bilkie has been the President and CEO of
Sigma Investment Counselors, Inc. (provides investment
advisory services to high net worth individuals).
The Board of Directors has authorized the
repurchase on the open market of up to 100,000 of the Fund's
outstanding shares of common stock. Based on current
market prices we believe our shares are undervalued and the
repurchase program is a good investment of available funds.
The shares authorized to be repurchased are to be purchased
from time to time as market and business conditions warrant.
(signature)
Kenneth S. Janke
Chairman and President
page 3
NAIC Growth Fund, Inc.
Statement of Assets and Liabilities
As of June 30, 2006 (unaudited)
ASSETS
Investment securities
- at market value (cost $13,516,654) $ 24,033,670
Short-term investments
- at amortized cost 995,674
Cash and cash equivalents 2,199,886
Dividends and interest receivable 36,902
Prepaid insurance 2,011
27,268,143
LIABILITIES
Dividends payable 1,396,168
Accounts payable 12,757
Advisor fees payable 19,417
Accrued expenses 7,356
1,435,698
TOTAL NET ASSETS $ 25,832,445
SHAREOWNERS' EQUITY
Common stock-par value $0.001 per share;
authorized 50,000,000 shares,
outstanding 2,792,336
shares $ 2,794
Additional paid-in capital 14,783,011
Undistributed net investment income 100,881
Undistributed net realized gain on
investments 428,743
Unrealized appreciation of investments 10,517,016
SHAREOWNERS' EQUITY $ 25,832,445
NET ASSET VALUE PER SHARE $ 9.25
See notes to financial statements
page 4
NAIC Growth Fund, Inc.
Statement of Operations
For the Period Ended June 30, 2006 (unaudited)
INVESTMENT INCOME
Interest $ 24,741
Dividends 263,753
288,494
EXPENSES
Advisory fees 103,518
Legal fees 32,016
Transfer agent 14,210
Insurance 12,448
Printing 5,106
Other fees and expenses 4,656
Mailing and postage 4,496
Directors' fees and expenses 4,125
Audit fees 3,950
Custodian fees 3,903
Annual shareowners' meeting 2,537
Taxes 600
Total Expenses 191,565
Net investment income 96,929
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Realized gain on investments:
Proceeds from sale of investment securities 4,454,567
Cost of investment securities sold 2,629,656
Net realized gain on investments 1,824,911
Unrealized appreciation of investments:
Unrealized appreciation at
beginning of year 11,969,788
Unrealized appreciation at end
of period 10,517,016
Net change in unrealized appreciation
on investments
(1,452,772)
Net realized and unrealized gain
on investments 372,139
NET INCREASE FROM OPERATIONS $ 469,068
See notes to financial statements
Page 5
NAIC Growth Fund, Inc.
Statements of Changes in Net Assets
June 30, 2006 year ended
(unaudited) December 31, 2005
FROM OPERATIONS:
Net investment income $ 96,929 $ 191,572
Net realized gain on investments 1,824,911 266,791
Net change in unrealized
appreciation on investments (1,452,772) (118,197)
Net increase/(decrease)
from operations 469,068 340,166
DISTRIBUTIONS TO STOCKHOLDERS FROM:
Net investment income -- 193,385
Net realized gain from
investment transactions 1,396,168 266,791
Total distributions 1,396,168 460,176
FROM CAPITAL STOCK TRANSACTIONS:
Dividend reinvestment -- --
Cash purchases -- 6,693
Net increase from capital
stock transactions -- 6,693
Net increase/(decrease) in
net assets (927,100) (113,317)
TOTAL NET ASSETS:
Beginning of year 26,759,545 $26,872,862
End of period (including
undistributed net investment
income of $100,881 and 3,952,
respectively) $25,832,445 $26,759,545
Shares:
Shares issued to common
stockholders under the dividend
reinvestment plan and cash
purchase plan -- 364,830
Shares at beginning of year 2,792,336 2,427,506
Shares at end of period 2,792,336 2,792,336
See notes to financial statements
page 6
NAIC Growth Fund, Inc.
Financial Highlights (a)
For the periods ended: June 30, 2006
(unaudited) 2005 2004 2003 2002 2001
Net asset value at
beginning of year $9.58 $9.63 $8.99 $7.90 $9.63 $10.40
Net investment income .03 .07 .01 .01 .02 .03
Net realized and unrealized
gain (loss) on investments .14 .05 .81 1.39 (1.28) (.22)
Total from investment
operations .17 .12 .82 1.40 (1.26) (.19)
Distribution from:
Net investment income (.00) (.07) (.01) (.01) (.02) (.03)
Realized gains (.50) (.10) (.17) (.30) (.45) (.55)
Total distributions (.50) (.17) (.18) (.31) (.47) (.58)
Net asset value at end
of period $9.25 $9.58 $9.63 $8.99 $7.90 $9.63
--------------------------------------------------------------------------
Per share market value,
end of period
last traded price (b) $8.00 $8.70 $7.83 $8.26 $8.65 $9.35
Total Investment Return:
Based on market value
1 year (annualized) (5.71%) 13.20% (3.31%) (1.33%) 2.10% 3.60%
5 year (.64%) 2.70% 6.65% 7.81% 1.79% 11.19%
10 year 7.49% 9.01% 13.45% 13.77% 14.28% 13.98%
from inception 8.93% 9.44% 9.18% 10.17% 11.15% 11.97%
Based on net asset value
1 year (annualized) 3.96% 1.34% 9.26% 17.69% (13.81%) (1.68%)
5 year 2.80% 2.00% 5.64% 5.42% 5.64% 13.85%
10 year 9.21% 8.97% 13.48% 12.83% 11.40% 14.21%
from inception 9.92% 10.12% 10.75% 10.86% 10.34% 12.73%
Net assets, end
of year (000's)$25,832.4 $26,759.5 $26,872.9 $24,501.2 $20,555.3 $23,909.2
Ratios to average net assets annualized:
Ratio of expenses to
average net assets 1.40% 1.46% 1.80% 1.79% 1.61% 1.57%
Ratio of net investment income
to average net assets 0.71% 0.72% 0.11% 0.06% 0.17% 0.32%
Portfolio turnover rate 5.93% 3.51% 6.53% 11.31% 11.19% 1.77%
Average commission rate
paid per share $0.065 $0.075 $0.095 $0.125 $0.125 $0.125
(a) All per share data for 2001-2005 has been restated to
reflect the effect of a 15% stock dividend which
was declared on April 21, 2005 and paid on May 23, 2005 to
shareholders of record on May 13, 2005.
(b) If there was no sale on the valuation date, the bid
price for each such date is shown. Price obtained from
Chicago Stock Exchange.
See notes to financial statements
page 7
NAIC Growth Fund, Inc.
Portfolio of Investments - June 30, 2006 (unaudited)
% Common Stock Shares Cost Market
3.6 Auto Replacement
O'Reilly Auto* 30,000 $189,637 $935,700
Total $935,700
13.5 Banking
Citigroup 22,000 368,635 1,061,500
Comerica, Inc. 10,000 404,669 519,900
Huntington Banc. 25,000 238,023 589,900
JP Morgan Chase 15,000 396,347 630,000
Synovus Financial 27,000 317,651 723,060
Total 3,523,960
4.0 Beverages - Soft Drinks
PepsiCo 17,000 433,218 1,020,680
Total 1,020,680
3.2 Building Products
Johnson Controls 10,000 85,823 822,200
Total 822,200
3.7 Chemicals
RPM 25,000 287,099 450,000
Sigma Aldrich 7,000 213,317 508,480
Total 958,480
3.7 Consumer Products
Colgate-Palmolive 16,000 469,850 958,400
Total 958,400
3.1 Electrical Equipment
General Electric 24,000 441,341 791,040
Total 791,040
10.6 Ethical Drugs
Abbott Laboratories 20,000 860,150 872,200
Johnson & Johnson 20,000 915,045 1,198,400
Pfizer, Inc. 28,000 606,755 657,160
Total 2,727,760
8.3 Financial Services
CIT Group 10,000 392,785 522,900
State Street Boston 16,000 436,700 929,440
Washington Mutual 15,000 609,130 683,700
Total 2,136,040
page 8
3.1 Food
McCormick & Co. 24,000 347,055 805,200
Total 805,200
3.6 Food Wholesale
Sysco 30,000 448,328 916,800
Total 916,800
11.7 Hospital Supplies
Biomet Corp. 28,000 573,428 876,120
Medtronic 17,000 850,214 797,640
Polymedica 12,000 346,237 431,520
Stryker Corp. 22,000 180,012 926,420
Total 3,031,700
3.6 Insurance
AFLAC, Inc. 20,000 143,906 927,000
Total 927,000
2.3 Information Technology
Jack Henry & Assoc. 30,000 554,299 589,800
Total 589,800
3.2 Machinery
Emerson Electric Co. 10,000 335,278 838,100
Total 838,100
5.7 Multi Industry
Pentair 18,000 280,288 615,420
Teleflex 16,000 545,608 864,320
Total 1,479,740
2.7 Office Supplies
Avery Dennison 12,000 666,064 696,720
Total 696,720
3.4 Restaurant
Wendy's 15,000 579,762 874,350
Total 874,350
page 9
93.0% Investment
Securities $13,516,654 $24,033,670
Short-term Investments
3.9 United States Treasury Bills,
Maturing 7/27/2006 $995,674
8.7 Misc. Cash Equivalents 2,238,799
------ ---------------
12.6% $3,234,473
Total Investments $27,268,143
(5.6) All other assets less liabilities (1,435,698)
------ ---------------
100% TOTAL NET ASSETS $25,832,445
NAIC Growth Fund, Inc.
Portfolio of Investments - June 30, 2006 (unaudited)
Top Ten Holdings - NAIC Growth Fund, 06/30/06
Company Market Value % of Portfolio
Investments
Johnson & Johnson $1,198,400 5.0
Citigroup 1,061,500 4.4
PepsiCo 1,020,680 4.2
Colgate-Palmolive 958,400 4.0
O'Reilly Auto 935,700 3.9
State Street 929,440 3.9
Aflac Incorporated 927,000 3.9
Stryker 926,420 3.9
Sysco 916,800 3.8
Biomet Corp. 876,120 3.6
Summary of Investment Position as % of Total
Investmnets 6/30/2006
(Graph)
Equities-Common Stock 88.3%
Fixed Income-U.S.
Treasury Bills 3.7%
Cash 8.1%
See notes to financial statements
*Non-income producing security
page 10
NAIC Growth Fund, Inc.
Notes to Financial Statements
(1) ORGANIZATION
The NAIC Growth Fund, Inc. (the "Fund")
was organized under Maryland law on
April 11, 1989 as a diversified closed-end investment
company under the Investment Company Act of 1940.
The Fund commenced operations on July 2, 1990.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant
accounting policies followed by the Fund not
otherwise set forth in the notes to financial
statements:
Dividends and Distributions - Dividends from
the Fund's net investment income and realized net
long- and short-term capital gains will be
declared and distributed at least annually. Shareowners
may elect to participate in the Dividend Reinvestment and
Cash Purchase Plan (see Note 4).
Investments - Investments in equity securities
are stated at market value, which is determined based on
quoted market prices or dealer quotes. If no such prices
are available on the valuation date, the Board of Directors
has determined the most recent market prices be used.
Pursuant to Rule 2a-7 of the Investment Company Act of 1940,
the Fund utilizes the amortized cost method to determine the
carrying value of short-term debt obligations. Under this
method, investment securities are valued for both financial
reporting and Federal tax purposes at amortized cost, which
approximates fair value. Any discount or premium is amortized
from the date of acquisition to maturity. Investment security
purchases and sales are accounted for on a trade date basis.
Interest income is accrued on a daily basis while dividends
are included in income on the ex-dividend date.
Use of Estimates - The preparation of financial statements in
conformity with accounting principles generally accepted
in the united states 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.
Federal Income Taxes - The Fund intends to
comply with the general qualification requirements of
the Internal Revenue Code applicable to regulated
investment companies. The Fund intends to distribute
at least 90% of its taxable income, including net long-term
capital gains, to its shareowners. In order to avoid
imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to
declare as dividends in each calendar year at least
98% of its net investment income and 98% of its net realized
capital gains plus undistributed amounts from prior years.
page 11
The following information is based upon Federal income tax
cost of portfolio investments as of June 30, 2006:
Gross unrealized appreciation $ 10,569,590
Gross unrealized depreciation (52,574)
----------
Net unrealized appreciation $ 10,517,016
Federal income tax cost $ 13,516,654
Expenses - The Fund's service contractors bear all
expenses in connection with the performance of their
services. The Fund bears all expenses incurred in connection
with its operations including, but not limited to, management
fees (as discussed in Note 3), legal and audit fees, taxes,
insurance, shareowner reporting and other related costs.
Such expenses will be charged to expense daily as a
percentage of net assets. The Advisory Agreement
provides that the Fund may not incur annual aggregate
expenses in excess of two percent (2%) of the first Ten
Million Dollars of the Fund's average net assets, one and
one-half percent (1 1/2%) of the next Twenty Million Dollars
of the average net assets, and one percent (1%) of the
remaining average net assets for any fiscal year. Any excess
expenses shall be the responsibility of the Investment
Adviser, and the pro rata portion of the estimated annual
excess expenses will be offset against the Investment
Adviser's monthly fee.
(3) MANAGEMENT ARRANGEMENTS
Investment Adviser - Growth Fund Advisor, Inc.,
serves as the Fund's Investment Adviser subject to the
Investment Advisory Agreement, and is responsible for the
management of the Fund's portfolio, subject to review by
the board of directors of the Fund. For the
services provided under the Investment Advisory Agreement,
the Investment Adviser receives a monthly fee at an annual
rate of three-quarters of one percent (0.75%) of the average
weekly net asset value of the Fund, during the times when the
average weekly net asset value is at least $3,800,000. The
Investment Adviser will not be entitled to any compensation
for a week in which the average weekly net asset value falls
below $3,800,000.
Custodian and Plan Agent - LaSalle Bank, NA (LB)
serves as the Fund's custodian pursuant to the Custodian
Agreement. As the Fund's custodian, LB receives fees and
compensation of expenses for services provided including,
but not limited to, an annual account charge, annual
security fee, security transaction fee and statement of
inventory fee. American Stock Transfer and Trust Company
serves as the Fund's transfer agent and dividend disbursing
agent pursuant to Transfer Agency and Dividend Disbursement
Agreements. American Stock Transfer and Trust Company
receives fees for services provided including, but not
limited to, account maintenance fees, activity and transaction
processing fees and reimbursement of out-of-pocket expenses
such as forms and mailing costs.
page 12
(4) DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
The Fund has a Dividend Reinvestment and
Cash Purchase Plan (the "Plan") which allows shareowners
to reinvest dividends paid and make additional contributions.
Under the Plan, cash dividends and voluntary cash payments
will be invested in shares purchased in the open market.
In the event the Plan agent is unable to complete its
acquisition of shares to be purchased on the open market
by the end of the thirtieth (30th) day following receipt of
the cash dividends from the Fund, any remaining funds will
be returned to the participants on pro rata basis. In
the event the Plan agent is unable to complete its acquisition
of shares to be purchased from additional contributions on
the open market by the end of the twentieth (20th) day
following the Investment Date, any remaining funds will
be returned to the participants on a pro rata basis.
The number of shares credited to each shareowner
participant's account will be based upon the average
purchase price for all shares purchased.
(5) DISTRIBUTIONS TO SHAREOWNERS
On June 15, 2006, a distribution of $0.50 per share
aggregating $1,396,168 was declared from realized gains.
the divideND WAS PAID ON July 6, 2006, to shareowners
of record on June 26, 2006.
The tax character of distributions paid during 2005 and 2004
was as follows:
2005 2004
Distributions paid from:
Ordinary income $193,385 $19,792
Long-term capital gain 266,791 455,020
---------- ---------
$460,176 $474,812
As of June 30, 2006, the components of distributable
earnings on a tax basis were as follows:
Undistributed ordinary income $100,881
Undistributed realized gain on investments 428,743
Unrealized appreciation 10,517,016
page 13
6) INVESTMENT TRANSACTIONS
Purchases and sales of securities, other than short-
term securities for the period ended June 30, 2006, were
$1,568,415 and $4,454,5678, respectively.
(7) FINANCIAL HIGHLIGHTS
The Financial Highlights present a per share analysis
of how the Fund's net asset value has changed during the
years presented. Additional quantitative measures
expressed in ratio form analyze important relationships
between certain items presented in the financial statements.
The Total Investment Return based on market value assumes
that shareowners bought into the Fund at the bid price and
sold out of the Fund at the bid price. In reality,
shareowners buy into the Fund at the ask price and sell out of
the Fund at the bid price. Therefore, actual returns may
differ from the amounts stated.
page 14
2006 ANNUAL SHAREHOLDERS MEETING
The 2006 annual meeting of shareholders was held on April
20, 2006 for the following purposes:
1. To elect a Board of eight (8) Directors;
2. To ratify or reject the selection of Plante & Moran,
PLLC as independent registered public accountants of the Fund
for the calendar year ending December 31, 2006.
The following Directors were elected for Proposal 1:
Thomas E. O'Hara, Kenneth S. Janke, Lewis A. Rockwell,
Peggy L. Schmeltz, Carl A. Holth, Benedict J. Smith, James M. Lane,
and Luke E. Sims. For Proposal 2, shareholders ratified the
selection of Plante & Moran, PLLC as independent registered
public accountants of the Fund.
Tabulation Report
Proposal 1 - Election of Directors
For Against Abstain Withheld
Thomas E. O'Hara 1,797,676 157,689
Kenneth S. Janke 1,843,375 111,989
Lewis A. Rockwell 1,794,265 161,099
Peggy L. Schmeltz 1,841,465 113,900
Carl A. Holth 1,858,543 96,821
Benedict J. Smith 1,822,047 133,318
James M. Lane 1,857,270 98,095
Luke E. Sims 1,894,992 60,372
Proposal 2 - Selection of Plante
& Moran, PLLC 1,909,886 28,605 16,873
Total shares issued and outstanding on record date: 2,792,336
page 15
Compensation
The following table sets forth the aggregate compensation
paid to all directors through June 30, 2006. Directors also
receive reimbursement for out-of-pocket expenses relating to
attendance at meetings of the Fund. No officer of the Fund
received compensation from the Fund through June 30, 2006
in his capacity as an officer of the Fund.
Directors Who Are Interested Persons of the Fund
Kenneth S. Janke
Chaiman, President, Treasurer and Director
Aggregate Compensation from Fund*
None
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from fund and Complex Paid to Directors**
None
Thomas E. O'Hara
Director
Aggregate Compensation from Fund*
None
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from fund and Complex Paid to Directors**
None
Lewis A. Rockwell
Secretary and Director
Aggregate Compensation from Fund*
$600
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from fund and Complex Paid to Directors**
$600
Peggy Schmeltz
Director
Aggregate Compensation from Fund*
$600
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from fund and Complex Paid to Directors**
$600
Directors Who Are Not Interested Persons of the Fund
Carl A. Holth
Director
Aggregate Compensation from Fund*
$600
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from Fund and Complex Paid to Directors**
$600
Benedict M. Smith
Director
Aggregate Compensation from Fund*
$600
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from Fund and Complex Paid to Directors**
$600
Luke E. Sims
Director
Aggregate Compensation from Fund*
$600
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from Fund and Complex Paid to Directors**
$600
Robert M. Bilkie
Director
Aggregate Compensation from Fund*
$0
Pension or Retirement Benefits Accrued as Part of Fund Expenses
None
Estimated Annual Benefits Upon Retirement
None
Total Compensation from Fund and Complex Paid to Directors**
$0
*All amounts shown are for service as a director
**The Fund is not part of any fund complex.
page 16
NAIC Growth Fund, Inc.
Board of Directors
Kenneth S. Janke
Chairman and President,
Bloomfield Hills, MI
Thomas E. O'Hara
Director,
Highland Beach, FL
Lewis A. Rockwell
Secretary,
Grosse Pointe Shores, MI
Peggy L. Schmeltz
Director,
Bowling Green, OH
Carl A. Holth
Director,
Clinton Twp., MI
Benedict J. Smith
Director,
Birmingham, MI
Luke E. Sims
Director,
Milwaukee, WI
Robert M. Bilkie
Director,
Southfield, MI
Shareowner Information
The ticker symbol for the NAIC Growth Fund, Inc., on the
Chicago Stock Exchange is GRF. You may wish to visit
the Chicago Stock Exchange web site at www.chicagostockex.com.
The dividend reinvestment plan allows shareowners to
automatically reinvest dividends in Fund common stock
without paying commissions. Once enrolled, you can make
additional stock purchases through monthly cash deposits
ranging from $50 to $1,000. For more information,
request a copy of the Dividend Reinvestment Service
for Stockholders of NAIC Growth Fund, Inc., from
American Stock Transfer and Trust Company, P.O. Box 922
Wall Street Station, New York, NY 10038, Telephone 1-
800-937-5449.
Questions about dividend checks, statements, account
consolidation, address changes, stock certificates or transfer
procedures write American Stock Transfer and Trust
Company, P.O. Box 922 Wall Street Station, New york, NY 10038,
Telephone 1-800-937-5449.
The Fund files its complete schedule of portfolio holdings
with Securities and Exchange Commission for the first and
third quarters of each fiscal year on Form N-Q. The Fund's
Form N-Q are available on the Commission's website at
http://sec.gov, on the Fund's website at
http://www.naicgrowthfund.com under the heading "SEC
Edgar Filings" and upon request by calling 1-877-275-6242.
The Fund's Forms N-Q may be reviewed and copied at
the Commission's Public Reference Room in Washington,
D.C., and information on the operation of the Public
Reference Room may obtained by calling 1-800-SEC-0330.
page 17
A description of the policies and procedures that the Fund
uses to determine how to vote proxies relating to portfolio
securities is available (1) without charge, upon request,
by calling 877-275-6242; (2) on the Fund's website at
www.naicgrowthfund.com; and (3) on the Securities and
Exchange Commission website at www.sec.gov.
Information regarding how the Fund voted proxies
relating to portfolio securities during the most recent twelve
month period ended June 30, 2006 is available (1) without
charge, upon request by calling 1-877-275-6242 or on the
Fund's website at http://www.naicgrowthfund.com and (2)
on the Commission's website at http://www.sec.gov.
Shareowners or individuals wanting general
information or having questions, write NAIC Growth Fund, Inc.,
P.O. Box 220, Royal Oak, Michigan 48068. Telephone 877-275-6242
or visit us at our website at www.naicgrowthfund.com.
page 18
ITEM 2. CODE OF ETHICS.
Not required for the semi-annual report
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not required for the semi-annual report
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not required for the semi-annual report
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not required for the semi-annual report
ITEM 6. Schedule of Investments
The Fund's schedule of investments is included as part of the report
to shareholders filed under Item 1 of the this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED
END MANAGEMENT INVESTMENT COMPANIES.
Not required for the semi-annual report.
Item 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT
INVESTMENT COMPANIES
Not required for this semi-annual report.
ITEM 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT
INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 11. CONTROLS AND PROCEDURES.
(i) As of August 15, 2006, an evaluation of the
effectiveness of the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the
Investment Company Act of 1940) was performed under
the supervision and with the participation of the registrant's
President (Principal Executive Officer) and Accountant
(person performing the functions of the Principal Financial
Officer). Based on that evaluation, the registrant's
President and Accountant concluded that the registrant's
controls and procedures are effectively designed to insure
that information required to be disclosed by the registrant
in this Form N-CSR is recorded, processed, summarized and
reported within the time periods required by the
Commission's rules and forms, and that information
required to be disclosed in the reports that the registrant
files on Form N-CSR is accumulated and communicated to the
registrant's management, including its principal executive
and principal financial officers, or persons performing similar
functions as appropriate, to allow timely decisions regarding
required disclosure.
(ii) There has been no change in the registrants's internal
control over financial reporting (as defined in Rule 30a-3(d) under
the Investment Company Act) that occurred during the second fiscal
quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS:
(A)(1) Not applicable.
(A)(2) Separate certification of principal executive officer and
principal financial officer as required by Rule 30a-2 under
the Act.
(A)(3) Not applicable.
(B) Certification Pursuant to 18 U.S.C. Section 1350.
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.
NAIC GROWTH FUND, INC.
By: /s/ Kenneth S. Janke
----------------------
Kenneth S. Janke
Chairman and President
Date: August 29, 2006
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/ Kenneth S. Janke
----------------------
Kenneth S. Janke
Chairman and President
Date: August 29, 2006
By: /s/ Calvin George
---------------------
Calvin George
Accountant (Principal Financial Officer)
Date: August 29, 2006