SEC Info - BMC Fund Inc. - ‘N-CSR’ for 10/31/23

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BMC Fund Inc. – ‘N-CSR’ for 10/31/23

On: Friday, 1/5/24, at 1:18pm ET · Effective: 1/5/24 · For: 10/31/23 · Accession #: 1104659-24-1728 · File #: 811-03150

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 1/05/24  BMC Fund Inc.                     N-CSR      10/31/23    6:916K                                   Toppan Merrill/FA

Annual Certified Shareholder Report by an Investment Company — Form N-CSR — ICA’40

Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: N-CSR       Annual Certified Shareholder Report by an           HTML    742K 
                Investment Company                                               
 2: EX-99.(4)(E)(1)  Miscellaneous Exhibit                          HTML     14K 
 6: EX-99.906 CERT  Certification -- §906 - SOA'02                  HTML      7K 
 5: EX-99.CERT  Certification -- §302 - SOA'02                      HTML     14K 
 4: EX-99.CODE ETH  Code of Ethics                                  HTML     17K 
 3: EX-99.PROXYPOL  Miscellaneous Exhibit                           HTML     21K

‘N-CSR’ — Annual Certified Shareholder Report by an Investment Company

Document Table of Contents

Page	(sequential)	(alphabetic)	↑Top
		Alternative Formats (Word, et al.) Additional Information Directors and Officers Financial Highlights Graphic Presentation of Portfolio Holdings and Sector Diversification Included as a part of the report to shareholders filed under Item 1 Letter to Shareholders -- Management's Discussion of Fund Performance Management's Discussion of Fund Performance Notes to Financial Statements Report of Independent Registered Public Accounting Firm Schedule of Investments Schedule of Open Written Option Contracts Statement of Assets and Liabilities Statement of Cash Flows Statement of Operations Statements of Changes In Net Assets Supplemental Information
1	1st Page – Filing Submission
"	Letter to Shareholders -- Management's Discussion of Fund Performance
"	Graphic Presentation of Portfolio Holdings and Sector Diversification
"	Supplemental Information
"	Report of Independent Registered Public Accounting Firm
"	Schedule of Investments
"	Included as a part of the report to shareholders filed under Item 1
"	Schedule of Open Written Option Contracts
"	Statement of Assets and Liabilities
"	Statement of Operations
"	Statements of Changes In Net Assets
"	Statement of Cash Flows
"	Financial Highlights
"	Notes to Financial Statements
"	Directors and Officers
"	Additional Information

This is an HTML Document rendered as filed. [ Alternative Formats ]

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)

ALAN DEAL

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, 2023

Date of reporting period: October 31, 2023

Item 1. Report to Stockholders.

BMC FUND, INC.

FINANCIAL STATEMENTS AND

SUPPLEMENTARY INFORMATION

Year Ended October 31, 2023

BMC FUND, INC.

TABLE OF CONTENTS

		Page No.

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

Graphic Presentation of Portfolio Holdings and Sector Diversification		3

Supplemental Information		5

Report of Independent Registered Public Accounting Firm		6

Schedule of Investments		7

Schedule of Open Written Option Contracts		18

Statement of Assets and Liabilities		19

Statement of Operations		20

Statements of Changes In Net Assets		21

Statement of Cash Flows		22

Financial Highlights		23

Notes to Financial Statements		24

Directors and Officers		33

Additional Information		35

BMC FUND, INC.

LETTER TO SHAREHOLDERS –

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Year Ended October 31, 2023

TO OUR SHAREHOLDERS: MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

BMC Fund, Inc. (the “Company”) gained 7.8% during the fiscal year, well ahead of the 6.3% gain in the Fund’s Policy Index. Notably, returns remain well ahead of policy over all trailing three, five, and ten-year periods.

For the time being, Fund performance remains largely driven by alternative investments, as LPs still comprised over 60% of investable assets at fiscal year-end. The Fund’s alternative investments gained 8.7% during the fiscal year, more than double the peer group’s 2.7% return, but failed to keep pace with the powerful rebound in equity markets last year. Meanwhile, the equity portfolio continued to outperform, gaining 15.9% relative to the 11.1% return of global equity markets. Each of the Fund’s investments across stock, bond, and alternative asset classes remain ahead of their respective benchmarks over the trailing one, three, and five-year periods.

The Fund’s allocation to alternatives has continued to decline following the tender offer, and redemptions submitted subsequent to fiscal year-end will reduce that allocation further in the coming quarters. The Fund’s investment advisor believes that increasing liquidity at this point in the cycle will position it well to increase public equity exposure as opportunities present themselves in the period ahead. An increase in market volatility would be a welcome development and provide plenty of assistance in capitalizing on any such opportunity.

While risk assets celebrate the supposed end of the current rate hiking cycle, any celebration may be premature. Many investors are even calling for a new "Goldilocks Era” for stocks – one where economic growth and interest rates are not too hot, not too cold, but just right. That seems unlikely, unrealistic, and unbelievable, leaving stocks extremely vulnerable to anything other than the perfect porridge.

The consensus is interrupting falling bond yields and dovish central bank commentary as bullish and doubling down on the best trade of the past decade as a result. Many investors are stuck in yesterday’s free money, buy-and-hold passive beta era. We believe that era is over. But old habits die hard.

The transition back to a normalized cost of capital may be the most significant change in market regimes of this generation, with broad implications for long term returns and equity selection. The silver lining: traditional, fundamental investing based on discounted cash flows and actual profits should be much more enjoyable in this brave new world. Without low rates indiscriminately pushing multiples higher, stock selection should shine, as should active management. The Fund believes this plays right into its advisor’s strengths, positioning the portfolio for strong long-term returns.

Active management may seem like an unnecessary luxury when low rates push valuations into the stratosphere, all but guaranteeing double-digit returns to passive indices with outsized weights to the largest stocks. Critically, the math changes when that environment is flipped upside down. The benefits of active management have historically proven their merit during challenging periods. Last year’s rally notwithstanding, the coming years should provide plenty of opportunity to showcase those skills.

BMC FUND, INC.

LETTER TO SHAREHOLDERS –

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Year Ended October 31, 2023

During the year ended October 31, 2023, the Company paid the following dividends per share:

December 10, 2022 to shareholders of record November 25, 2022	$	1.86
March 10, 2023 to shareholders of record February 25, 2023		.20
June 10, 2023 to shareholders of record May 25, 2023		.20
September 10, 2023 to shareholders of record August 25, 2023		.20

Total	$	2.46

The Company paid a dividend of $0.20 per share on December 10, 2023 to shareholders of record November 25, 2023.

The attached Schedule of Investments is a listing of the entire Company’s diversified securities at October 31, 2023 with a total market value of $37,127,545.

	M. Hunt Broyhill
	Chairman and President

BMC FUND, INC.

LETTER TO SHAREHOLDERS –

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Year Ended October 31, 2023

BMC FUND, INC.

LETTER TO SHAREHOLDERS –

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Year Ended October 31, 2023

This chart assumes an initial gross investment of $10,000 made on 10/31/2014.

* Policy Index is calculated as 50% MSCI ACWI, 25% Barclays Aggregate Bond Index, 20% HFRI Hedge Fund Index, 5% Cash

Past performance does not guarantee future results. Performance will fluctuate with changes in market conditions. Current performance may be lower or higher than the performance data shown. Performance information does not reflect the deduction of taxes that shareholders would pay on Company distributions or the sale of the Company shares. An investment in the Company involves risk, including loss of principal.

Past performance at a glance
(unaudited)

Average annual total returns for the periods ended 10/31/2023

Net assets value returns		1 year				5 years				10 years
BMC Fund, Inc.			7.8	%			7.0	%			5.5	%

BMC Fund, Inc. pays management fees to BAM, LLC.

BMC FUND, INC.

SUPPLEMENTAL INFORMATION

Year Ended October 31, 2023

SUPPLEMENTAL INFORMATION

M. Hunt Broyhill, Chairman and President/Chief Investment Officer, is primarily responsible for the day-to-day management of the Company’s portfolio. Mr. Hunt Broyhill has been President since 2001. He has been engaged in asset management for various institutions and high net worth individuals for more than five years.

Report of Independent Registered Public Accounting Firm

To the Shareholders, Board of Directors, and Audit Committee

BMC Fund, Inc.

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of BMC Fund, Inc. (the “Company”), including the schedules of investments and open written option contracts, as of October 31, 2023, the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, the related notes, and the financial highlights for each of the years in the ten-year period then ended (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of October 31, 2023, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the ten-year period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’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 Company 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

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, 2023, 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/ FORVIS, LLP

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

Asheville, NC

January 5, 2024

BMC FUND, INC.

SCHEDULE OF INVESTMENTS

October 31, 2023

		Coupon										Percent
		Interest			Maturity	Face				Market		of Net
Debt Issuer		Rate			Date	Amount		Cost		Value		Assets
FIXED INCOME:
CORPORATE BONDS:
FIRST CITIZENS			5.800	%	12/31/2049	$	250,000	$	252,431	$	254,314
FPL GROUP CAP INC			6.350	%	10/1/2066		586,000		562,973		500,839
PP&L CAP FUNDING FLT RATE			5.051	%	3/30/2067		250,000		250,000		224,580
TRANSCANADA PIPELINES LTD			6.350	%	5/15/2067		250,000		199,217		199,499
LEHMAN BROTHERS HLDGS NIKKEI INDEX	1,2,3		0.000	%	9/29/2008		3,000,000		1,602,029		-
LEHMAN BROTHERS HLDGS EAFE INDEX	1,2,3		0.000	%	11/15/2008		1,000,000		525,655		-
LEHMAN BROTHERS HLDGS MEDIUM TERM NOTE	1,2,3		0.000	%	3/15/2011		2,500,000		1,333,815		-
							7,836,000		4,726,120		1,179,232		3.13	%

GOVERNMENT BONDS:
US TREASURY BILL			5.497	%	1/25/2024	$	500,000	$	493,802	$	493,735
US TREASURY BILL			5.600	%	4/25/2024		500,000		487,137		486,965
US TREASURY BILL			5.600	%	4/25/2024		500,000		487,137		486,965
US TREASURY BILL			5.515	%	10/3/2024		500,000		476,239		475,755
US TREASURY BILL			5.515	%	10/3/2024		500,000		476,239		475,755
US TREASURY BILL			5.000	%	10/31/2025		500,000		499,869		499,394
US TREASURY BILL			4.625	%	10/15/2026		500,000		496,873		496,289
US TREASURY BILL			4.875	%	10/31/2028		500,000		501,979		501,054
							4,000,000		3,919,275		3,915,912		10.41	%

TOTAL INVESTMENTS IN FIXED INCOME						$	11,836,000	$	8,645,395	$	5,095,144		13.54	%

See accompanying notes to financial statements.

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Continued)

October 31, 2023

								Percent
		Shares				Market		of Net
Company Name		Held		Cost		Value		Assets
MUTUAL FUNDS:

BOND MUTUAL FUNDS:

MFC BLACKROCK TAXABLE MUNICIPAL BOND TRUST			67,278	$	1,097,854	$	1,006,479
TOTAL BOND MUTUAL FUNDS					1,097,854		1,006,479		2.67	%

STOCK MUTUAL FUNDS:

INTERNATIONAL EQUITIES
Diversified Emerging Markets
ADVISORS SER TR PZENA EMG MK INS			25,492		255,568		296,983
					255,568		296,983		0.79	%
SPECIALTY FUNDS
Precious Metals
ISHARES SILVER TRUST	3		1,252		21,040		26,267
SPDR GOLD SHARES	3		260		25,315		47,863
VANECK VECTORS GOLD MINERS			571		16,168		15,994
					62,523		90,124		0.24	%

TOTAL STOCK MUTUAL FUNDS					318,091		387,107		1.03	%

TOTAL INVESTMENTS IN MUTUAL FUNDS				$	1,415,945	$	1,393,586		3.70	%

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Continued)

October 31, 2023

				Market		Percent of
Company Name		Cost		Value		Net Assets
OTHER INVESTMENTS:

LIMITED PARTNERSHIPS:
BAM CREDIT OPPORTUNITIES FUND	2, 3, 6	$	733,155	$	878,921
ELLIOTT ASSOCIATES LP CL B	2, 3		996,415		6,196,891
GRAHAM INSTITUTIONAL PARTNERS LP	2, 3		2,365,123		3,156,476
GREENLIGHT MASTERS QUALIFIED LP	2, 3		500,000		2,868,345
INFINITY PREMIER FUND, LP	2, 3		500,000		2,201,127
LITESPEED PARTNERS, LP	2, 3		-		28,316
MUDRICK DISTRESSED OPPORTUNITY DRAWDOWN FUND II, L.P.	2, 3		2,601,074		3,856,811
OAKTREE ENHANCED INCOME FUND II, LP	2, 3		-		12,688
OLD WELL EMERGING MARKETS FUND	2, 3		1,000,000		864,294
OLD WELL EMERGING SPECIAL OPPORTUNITIES FUND	2, 3		200,000		177,448
SEGRA RESOURCE ONSHORE PARTNERS, LP	2, 3		125,000		624,107
SJC ONSHORE DIRECT LENDING FUND IV - 5 YEAR, L.P.	2, 3		2,060,792		2,100,934
TOTAL LIMITED PARTNERSHIPS			11,081,559		22,966,358		61.04	%

TOTAL OTHER INVESTMENTS		$	11,081,559	$	22,966,358		61.04	%

See accompanying notes to financial statements.

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Continued)

October 31, 2023

							Percent
Sectors and	Shares				Market		of Net
Industries	Held	Company Name	Cost		Value		Assets
COMMON STOCKS:
COMMUNICATION SERVICES
Communication Services	238	BCE INC COM	$	10,963	$	8,837
	63	SK TELECOM LTD SPONSORED A		1,262		1,277
	377	TELEFONICA S A SPONSORED A		60		1,444
				12,285		11,558		0.03	%

Media and Entertainment	740	ALPHABET INC CAP STK CL C		47,706		92,722
	514	ALPHABET INC.		46,098		63,777
	204	META PLATFORMS INC CL A		19,475		61,459
				113,279		217,958		0.58	%

Interactive Home Entertainment	32,322	NINTENDO LTD ADR		348,971		333,563
				348,971		333,563		0.89	%

TOTAL COMMUNICATION SERVICES				474,535		563,079		1.50	%

CONSUMER STAPLES

Food & Staples Retailing	131	KROGER CO COM		4,133		5,943
	76	WAL-MART STORES INC COM		10,261		12,419
				14,394		18,362		0.05	%

Food, Beverage & Tobacco	2,969	ANHEUSER-BUSCH INBEV SA/NV		163,756		168,847
	104	COCA COLA CO COM		4,970		5,875
	1,719	COCA COLA FEMSA S A B SPON		97,294		130,678
	78	CONSTELLATION BRANDS CL A		7,076		18,264
	22,726	DANONE SPONSORED ADR		261,532		271,121
	3,376	FOMENTO ECONOMICO MEXI SPO		314,554		382,872
	100	GENERAL MILLS INC COM		7,617		6,524
	8,479	PHILIP MORRIS INTL COM		802,047		755,988
				1,658,846		1,740,169		4.62	%

Household & Personal Products	126	KIMBERLY CLARK CORP COM		17,492		15,075
	11	PROCTER & GAMBLE CO COM		737		1,650
				18,229		16,725		0.04	%

TOTAL CONSUMER STAPLES				1,691,469		1,775,256		4.72	%

ENERGY
Energy	250	CHENIERE ENERGY, INC.		42,466		41,605
	1,200	CVR ENERGY, INC.		43,491		39,300
	159	CRESTWOOD EQUITY PARTNERS		3,370		4,338
	1,500	FREEHOLD ROYALTIES, LTD		19,007		15,435
	2,000	FLEX LNG LTD.		62,848		61,080
	473	SUNOCO INC COM		13,246		23,740
				184,428		185,498		0.49	%

Pipelines	181	DELEK LOGISTICS PARTNERS LP		5,334		8,366
	630	ENBRIDGE INC		18,339		20,185
				23,673		28,551		0.08	%

TOTAL ENERGY				208,101		214,049		0.57	%

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Continued)

October 31, 2023

							Percent
Sectors and	Shares				Market		of Net
Industries	Held	Company Name	Cost		Value		Assets
COMMON STOCKS:
FINANCIALS
Banks	263	BANK OF AMERICA CORP COM		6,063		6,927
	1	SVB FINANCIAL GROUP COM		340		-
				6,403		6,927		0.02	%

Diversified Financials	1,312	ALLIANCE BERNSTEIN HLDG UN		54,060		37,694
	179	BERKSHIRE HATHAWAY INC CL B		36,098		61,098
	756	BLACKSTONE GROUP LP COM		24,342		69,817
	420	CARLYLE GROUP LP COM		9,160		11,567
	36	CME GROUP		5,993		7,685
	263	COMPASS DIVERSIFIED HOLDINGS		3,600		4,518
	918	GOLUB CAPITAL BDC INC COM		-		13,219
	51	INTERNCONTINENTAL EXCHANGE COM		3,817		5,479
	52	MORGAN STANLEY COM NEW		2,956		3,683
	1,000	PAYPAL HLDGS INC COM		67,089		51,800
	1,195	THE CHARLES SCHWAB CORPORATION		66,993		62,188
				274,108		328,748		0.87	%

Insurance	79	AON PLC SHS CL A		6,409		24,443
	263	OLD REP INTL CORP COM		4,433		7,201
	129	TRAVELERS COMPANIES COM		10,711		21,600
	263	ZURICH INS GROUP LTD SPONS ARD		6,984		12,458
				28,537		65,702		0.17	%

TOTAL FINANCIALS				309,048		401,377		1.07	%

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Continued)

October 31, 2023

							Percent
Sectors and	Shares				Market		of Net
Industries	Held	Company Name	Cost		Value		Assets
COMMON STOCKS:
HEALTH CARE
Health Care Equipment & Services	157	DAVITA HEALTHCARE PART COM		12,098		12,125
	365	HOLOGIC INC COM		18,730		24,152
	48	LABORATORY CORP AMER HLDGS		5,942		9,587
	681	MCKESSON CORP COM		237,778		310,100
	206	QUEST DIAGNOSTICS INC COM		24,052		26,801
	24	STRYKER CORP		4,486		6,485
				303,086		389,250		1.03	%

Pharmaceuticals & Biotechnology	180	ABBVIE INC		14,611		25,412
	524	ASTRAZENECA PLC SPONSORED		13,125		33,133
	79	BRISTOL MYERS SQUIBB CO CO		4,564		4,071
	135	ELI LILLY & CO COM		5,947		74,781
	48	FORTREA HOLDINGS INC.		980		1,363
	20	IQVIA HOLDINGS INC COM		1,982		3,617
	79	MERCK & CO INC COM		5,654		8,113
	200	PFIZER INC COM		7,864		6,112
	52	SEATTLE GENETICS INC COM		2,555		11,066
				57,282		167,668		0.45	%

TOTAL HEALTH CARE				360,368		556,918		1.48	%

INDUSTRIALS
Capital Goods	208	ABB LTD SPONSORED ADR		5,057		6,970
				5,057		6,970		0.02	%

Commercial Services & Supplies	24	WASTE MGMT INC DEL COM		835		3,944
				835		3,944		0.01	%

Transportation	313	FORTRESS TRANS INFRST COM		4,997		11,772
	313	FTAI INFRASTRUCTURE INC.		-		958
				4,997		12,730		0.03	%

TOTAL INDUSTRIALS				10,889		23,644		0.06	%

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Continued)

October 31, 2023

							Percent
Sectors and	Shares				Market		of Net
Industries	Held	Company Name	Cost		Value		Assets
COMMON STOCKS:
INFORMATION TECHNOLOGY

Hardware & Equipment	535	CISCO SYSTEMS INC		20,733		27,890
	498	CORNING INC COM		10,201		13,326
				30,934		41,216		0.11	%

Software & Services	61	MICROSOFT CORP COM		8,924		20,625
	238	ORACLE CORP COM		15,727		24,609
				24,651		45,234		0.12	%

Technology Hardware & Equipment	629	APPLE INC COM		44,179		107,414
	2,470	INTEL CORP COM		101,920		90,155
	102	NETAPP INC COM		5,350		7,424
	140	SEAGATE TECHNOLOGY SHS		5,333		9,555
				156,782		214,548		0.57	%

Technology	5,184	FISERV INC COM		584,344		589,680
	2,905	FIDELITY NATIONAL INFORMATION SERVICES		150,471		142,665
				734,815		732,345		1.95	%

TOTAL INFORMATION TECHNOLOGY				947,182		1,033,343		2.75	%

MATERIALS	500	BHP GROUP LIMITED		27,434		28,530
	158	CHEMOURS CO COM		2,551		3,809
	400	CVR PARTNERS, LP		50,841		31,532
	104	DOW CHEM CO COM		5,163		5,027
	10	MITSUI & CO LTD SPONSORED		3,643		7,328
	500	RIO TINTO GROUP		30,368		32,170
	600	SOCIEDAD QUIMICA MINER SPON ADR		49,514		29,040
TOTAL MATERIALS				169,514		137,436		0.37	%

BMC FUND, INC.

SCHEDULE OF INVESTMENTS (Continued)

October 31, 2023

							Percent
Sectors and	Shares				Market		of Net
Industries	Held	Company Name	Cost		Value		Assets
COMMON STOCKS:
REAL ESTATE
Real Estate	101	DIGITAL RLTY TR INC COM		11,872		12,560
	630	EASTERLY GOVT PPTYS COM		12,410		6,779
	524	HANNON ARMSTRONG SUST COM		8,023		8,981
	840	IRON MTN INC NEW COM		34,076		49,619
	789	MEDICAL PPTYS TR INC COM		10,742		3,771
	104	OMEGA HEALTHCARE INVS COM		3,026		3,442
	22	W P CAREY & CO LLC COM		1,405		1,180
				81,554		86,332		0.23	%

TOTAL REAL ESTATE				81,554		86,332		0.23	%

UTILITIES	100	AMERICAN STS WTR CO COM		8,027		7,805
	339	DOMINION RES INC VA COM		17,456		13,668
	174	DUKE ENERGY CORP COM		15,663		15,467
	51	ENTERGY CORP NEW COM		3,539		4,875
	180	NEXTERA ENERGY INC COM		13,503		10,494
	262	SOUTHERN CO COM		11,431		17,633
	116	WEC ENERGY GROUP INC COM		4,622		9,441
TOTAL UTILITIES				74,241		79,383		0.21	%

RIGHTS ATTACHED TO COMMON STOCKS
	725	OCCIDENTAL PETROLEUM CORP COM		-		28,899
				-		28,899		0.08	%

TOTAL INVESTMENTS IN COMMON STOCKS			$	4,326,901	$	4,899,716		13.02	%

See accompanying notes to financial statements.

BMC FUND, INC.
SCHEDULE OF INVESTMENTS (Continued)
October 31, 2023

							Percent
	Contracts				Market		of Net
Company Name	Held		Cost		Value		Assets
CALL OPTIONS:
None		-	$	-	$	-		0.00	%

TOTAL INVESTMENTS IN OPTIONS			$	-	$	-		0.00	%

See accompanying notes to financial statements.

BMC FUND, INC.
SCHEDULE OF INVESTMENTS (Continued)
October 31, 2023

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

PREFERRED STOCKS:
COMPASS DIV HOLDINGS FIXED FLTG RAT CUM PFD	^{4, 5}		7.875	%		N/A		4,000	$	93,349	$	97,560

TOTAL INVESTMENTS IN PREFERRED STOCKS									$	93,349	$	97,560		0.26	%

See accompanying notes to financial statements.

BMC FUND, INC.
SCHEDULE OF INVESTMENTS (Concluded)
October 31, 2023

				Market		Percent of
	Company Name	Cost		Value		Net Assets
Short-term Investments	MFB NI Treasury Money Market Fund	$	2,675,181	$	2,675,181		7.11	%

TOTAL INVESTMENTS - MARKET VALUE					37,127,545		98.67	%

TOTAL OTHER ASSETS IN EXCESS OF LIABILITIES					500,181		1.33	%

TOTAL NET ASSETS				$	37,627,726		100.00	%

¹In default

²Market value ratified by the Fund's Board of Directors per policy.

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.

⁶Affiliate Investment

See accompanying notes to financial statements.

BMC FUND, INC.
SCHEDULE OF OPEN WRITTEN OPTION CONTRACTS
October 31, 2023

							Percent
	Contracts				Market		of Net
Company Name	Held		Cost		Value		Assets
CALL OPTIONS:
None		-	$	-	$	-
TOTAL CALL OPTIONS - LIABILITIES				-		-		0.00	%

PUT OPTIONS:
None		-		-		-
TOTAL PUT OPTIONS - LIABILITIES				-		-		0.00	%

TOTAL CALL AND PUT OPTIONS - LIABILITIES			$	-	$	-		0.00	%

See accompanying notes to financial statements.

BMC FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2023

ASSETS AT MARKET VALUE:
Affiliated Investment security (cost - $733,155)	$	878,921
Unaffiliated Investment securities (cost - $27,505,177)		36,248,624
Cash		460,424
Receivables, accrued interest and dividends		119,760
Other assets		2,146

Total assets		37,709,875

LIABILITIES:
Accounts payable and accrued expenses		8,112
Accounts payable to affiliates		74,037

Total liabilities		82,149

NET ASSETS AT OCTOBER 31, 2023 - EQUIVALENT TO $19.92 PER SHARE ON 1,888,788 SHARES OF COMMON STOCK OUTSTANDING	$	37,627,726

SUMMARY OF SHAREHOLDERS' EQUITY:
Common stock, par value $5.00 per share - authorized 70,000,000 shares; outstanding, 1,888,788 shares	$	9,443,940
Retained earnings prior to becoming an investment company		13,852,305
Undistributed net investment income		(47,447	)
Realized gain from investments sold and foreign currency transactions		295,001
Undistributed nontaxable gain		5,194,714
Net unrealized appreciation of affiliated investments and call and put options written		145,766
Net unrealized appreciation of unaffiliated investments and call and put options written		8,743,447

NET ASSETS APPLICABLE TO COMMON STOCK OUTSTANDING	$	37,627,726

See accompanying notes to financial statements.

BMC FUND, INC.
STATEMENT OF OPERATIONS
Year Ended October 31, 2023

INVESTMENT INCOME:
Income:
Interest - fixed income	$	118,048
Dividend income (net of $7,821 foreign tax)		707,587

Total income		825,635

Expenses:
Legal and professional fees		121,335
Directors' fees (Note 6)		15,000
Investment expense		93,419
Investment advisor's fees		248,043
Salaries and related expenses		145,282
Property and liability insurance		36,631
Depreciation expense		282
Rent (Note 7)		29,460
Office expense and supplies		28,019
Dues and subscriptions		2,954
Travel and entertainment		2,172

Total expenses		722,597

Investment income, net		103,038

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain from unaffiliated investments sold and foreign currency transactions		1,626,837

Realized gain from expiration or closing of written option contracts written on unaffiliated companies		1,224

Change in unrealized appreciation of affiliated investment and call and put options for the year		51,672
Change in unrealized appreciation of unaffiliated investments and call and put options for the year		331,463
Total change in unrealized appreciation of investments and call and put options for the year		383,135

Net income on investments		2,011,196

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	2,114,234

See accompanying notes to financial statements.

BMC FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
Years Ended October 31, 2023 and 2022

	2023			2022
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)	$	103,038		$	(49,157	)
Net realized gains from unaffiliated investment securities sold, options and foreign currency transactions		1,628,061			2,614,340
Change in unrealized appreciation of affiliated investments and call and put options written for the year		51,672			30,494
Change in unrealized appreciation of unaffiliated investments and call and put options written for the year		331,463			(4,432,286	)

Net increase (decrease) in net assets resulting from operations		2,114,234			(1,836,609	)

Distributions to shareholders from:
Net realized gains on investment securities, options and foreign currency transactions		(1,133,274	)		-
Net investment income		-			(92,269	)
Retained earnings prior to becoming an investment company		(3,519,978	)		(1,513,200	)

TOTAL DECREASE IN NET ASSETS		(2,539,018	)		(3,442,078	)

NET ASSETS AT BEGINNING OF PERIOD		40,166,744			43,608,822

NET ASSETS AT END OF PERIOD	$	37,627,726		$	40,166,744

See accompanying notes to financial statements.

BMC FUND, INC.

STATEMENT OF CASH FLOWS

Year Ended October 31, 2023

Cash flows from operating activities:

Net increase in net assets from operations	$	2,114,234
Adjustments to reconcile net increase in net assets from operations to net cash provided by operating activities:
Realized gains from investments sold and foreign currency transactions		(1,626,837	)
Proceeds from foreign currency transactions		(3	)
Realized gain from expired or closing of written option contracts		(1,224	)
Unrealized appreciation from investments and calls and puts options		(383,135	)
Increase in short-term money market investments		(192,460	)
Purchases of investments securities		(10,860,996	)
Proceeds from sales of investment securities		15,046,617
Proceeds of written open contracts		(1,224	)
Proceeds from trade error		(4,020	)
Return of capital on securities		1,074,564
Depreciation		282
Amortization of bond premiums		39
Accretion of bond discounts		(575	)
Changes in assets and liabilities
(Increase)/Decrease in assets:
Receivables, accrued interest and dividends		(80,100	)
Other assets		15,855
Increase/(Decrease) in liabilities:
Payable to affiliates		40,041
Payable to custodian		(2,162	)
Accounts payable and accrued expenses		(36,779	)
Net cash provided by operating activities		5,102,117

Cash flows from financing activities:
Cash distributions paid		(4,653,252	)
Net cash used in financing activities		(4,653,252	)

Net change in cash		448,865

Beginning cash as of October 31, 2022		11,559

Ending cash as of October 31, 2023	$	460,424

See accompanying notes to financial statements.

BMC FUND, INC.
FINANCIAL HIGHLIGHTS
Years Ended October 31, 2023, 2022, 2021, 2020, 2019, 2018, 2017, 2016, 2015 and 2014

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, 2023, 2022, 2021, 2020, 2019, 2018, 2017, 2016, 2015 and 2014. 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	2023			2022			2021			2020			2019			2018			2017			2016			2015			2014
Net asset value, beginning of period	$	21.27		$	23.09		$	19.84		$	21.16		$	20.77		$	21.42		$	20.83		$	21.22		$	22.62		$	22.57
Net investment income		0.05			(0.02	)		0.04			0.25			0.34			0.27			0.27			0.22			0.35			0.42
Net gains (losses) on investments		1.06			(0.95	)		4.21			(0.57	)		1.05			0.08			1.32			0.39			(0.73	)		0.63
Total from investment operations		1.11			(0.97	)		4.25			(0.32	)		1.39			0.35			1.59			0.61			(0.38	)		1.05
Less distributions:
Dividends from net investment income		-			0.05			0.42			0.05			0.33			0.32			0.20			0.23			0.36			0.44
Distributions from capital gains		0.60			-			0.14			0.28			0.08			0.37			0.35			-			0.44			0.42
Distributions from retained earnings		1.86			0.80			0.44			0.67			0.59			0.31			0.45			0.77			0.22			0.14
Total distributions		2.46			0.85			1.00			1.00			1.00			1.00			1.00			1.00			1.02			1.00
Net asset value, end of period	$	19.92		$	21.27		$	23.09		$	19.84		$	21.16		$	20.77		$	21.42		$	20.83		$	21.22		$	22.62

Per share market value, end of period¹	$	20.13		$	21.27		$	22.79		$	18.00		$	18.00		$	18.00		$	18.00		$	18.00		$	18.00		$	18.00

TOTAL INVESTMENT RETURN²		5.51	%		(4.57	)%		18.63	%		(1.79	)%		7.74	%		1.95	%		8.83	%		3.39	%		(2.11	)%		5.83	%

RATIOS/SUPPLEMENTAL DATA

Net assets, end of period (in thousands)	$	37,628		$	40,167		$	43,609		$	97,875		$	104,397		$	102,458		$	105,657		$	102,751		$	104,684		$	111,568
Ratio of expenses to average net assets³		1.88	%		2.17	%		1.86	%		1.12	%		1.06	%		1.01	%		1.03	%		1.07	%		0.98	%		0.97	%
Ratio of net investment income to
average net assets3		0.27	%		(0.12	)%		0.17	%		1.21	%		1.64	%		1.28	%		1.26	%		1.06	%		1.59	%		1.83	%
Portfolio turnover rate		22.38	%		17.88	%		9.79	%		20.22	%		12.94	%		14.18	%		24.07	%		15.09	%		17.10	%		22.02	%

¹Unaudited - Based on recent sales. Prior years based on stock trades, which are very limited, during those 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, 2023

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.    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 (“FASB”) Accounting Standards Codification (“ASC”). The Company also follows the accounting and reporting guidance applicable to investment companies in ASC Topic 946, Financial Services – Investment Companies.

B.    Investment Valuations – The investment securities are stated at fair value as determined by closing prices on national securities exchanges or based on inputs other than quoted 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.

Pursuant to ASC Topic 820, Fair Value Measurement, the Fund may elect to use net asset value per share or its equivalent (“NAV”) as a practical expedient to measure the Company’s interest in certain pooled investment companies at fair value, unless it is probable that the investment will be sold at a value different from its NAV. However, in order for the Company to use this methodology, the investment company must calculate NAV in a manner consistent with the measurement principles established by ASC Topic 820. The Company is using the practical expedient.

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.

BMC FUND, INC.

NOTES TO FINANCIAL STATEMENTS

Year Ended October 31, 2023

SIGNIFICANT ACCOUNTING POLICIES (Continued)

For the year ended October 31, 2023, the Company purchased and sold securities in the amount of $10,860,996 and $15,046,617, respectively.

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 2019 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 GAAP 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, 2023

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, 2023

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, 2023.

Asset Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Fixed Income	$	5,095,144	$	-	$	-	$	5,095,144
Stock Mutual Funds		387,107		-		-		387,107
Bond Mutual Funds		1,006,479		-		-		1,006,479
Common Stocks – Publicly Traded		4,899,716		-		-		4,899,716
Preferred Stocks – Publicly Traded		97,560		-		-		97,560
Temporary Cash Investments		2,675,181		-		-		2,675,181
Limited Partnerships – Measured at NAV (1)								22,966,358
Total Investments	$	14,806,059		$	$	-	$	37,127,545

(1)

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.

The following indicates the preferred stocks held and applicable interest rates at October 31, 2023 with no maturity dates.

Compass Diversified Holdings $100,000 at 7.875% with a coupon rate of 7.880%

The following are the fixed income securities held and fixed applicable interest rates as October 31, 2023.

First Citizens Bank $250,000 at 5.8% with a maturity date of 12/31/2049

FPL Group Cap Inc. $586,000 at 6.35% with a maturity date of 10/1/2066

PPL Cap FDG Inc. $250,000 at 5.051% with a maturity date of 3/30/2067

Transcanada Pipelines LTD $250,000 at 6.35% with a maturity date of 5/15/2067

US Treasury Bill $500,000 at 5.497% with a maturity date of 1/25/2024

US Treasury Bill $1,000,000 at 5.6% with a maturity date of 4/25/2024

US Treasury Bill $1,000,000 at 5.515% with a maturity date of 10/03/2024

US Treasury Bill $500,000 at 5% with a maturity date of 10/31/2025

US Treasury Bill $500,000 at 4.625% with a maturity date of 10/15/2026

US Treasury Bill $500,000 at 4.875% with a maturity date of 10/31/2028

BMC FUND, INC.

NOTES TO FINANCIAL STATEMENTS

Year Ended October 31, 2023

SIGNIFICANT ACCOUNTING POLICIES (Continued)

J.      Investments in Limited Partnerships - As of October 31, 2023, 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, 2023

SIGNIFICANT ACCOUNTING POLICIES (Continued)

The following table summarizes the Company's investments in other limited partnerships as of October 31, 2023. 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
BAM Credit Opportunities	N/A	N/A	See below (7)
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) (10)
Mudrick Distressed Opportunity Drawdown Fund II, L.P.	N/A	N/A	See below (7)
Oaktree Enhanced Income Fund II, LP	N/A	N/A	See below (7) (10)
Old Well Emerging Markets Fund, LP	60 days	Quarterly	See below (8)
Old Well Special Opportunities Fund II, LP	N/A	N/A	See below (7)
Segra Resource Onshore Partners, LP	60 days	Quarterly	See below (9)
SJC Onshore Direct Lending Fund IV – 5 Year, L.P.	N/A	N/A	See below (7)

(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) Redemptions are not permitted.

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

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

(10) In liquidation.

BMC FUND, INC.

NOTES TO FINANCIAL STATEMENTS

Year Ended October 31, 2023

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 commitment of $425,241 to the limited partnership of SJC Onshore Direct Lending Fund and $250,000 to the BAM Credit Opportunities Fund.

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 of October 31, 2023, were as follows:

Gross appreciation (excess of value over tax cost)	$	12,887,510
Gross depreciation (excess of tax cost over value)		(3,998,297	)
Net unrealized appreciation	$	8,889,213
Cost of investments for income tax purposes	$	28,238,332

OPTIONS WRITTEN

The Company had $194 cash pledged as collateral for options at October 31, 2023.

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 10, 2022, a distribution of $1.86 per share was paid to shareholders of record on November 25, 2022.

On March 10, 2023, a distribution of $0.20 per share was paid to shareholders of record on February 25, 2023.

On June 10, 2023, a distribution of $0.20 per share was paid to shareholders of record on May 25, 2023.

On September 10, 2023, a distribution of $0.20 per share was paid to shareholders of record on August 25, 2023.

BMC FUND, INC.

NOTES TO FINANCIAL STATEMENTS

Year Ended October 31, 2023

The tax character of distributions paid during the calendar years 2023 and 2022 was as follows:

	2023		2022
Distributions paid from:
Ordinary income	$	784,318	$	1,698,978
Long-term capital gains		-		3,426,472

	$	784,318	$	5,125,450

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 tax character of distributions disclosed above will not agree to the total distributions paid due to the tax character of the payments being carried to the next year or from the prior year to meet the tax distribution requirements for a registered investment fund. As of October 31, 2023, there was $0 in distributable earnings on a tax basis.

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. 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 M. Hunt Broyhill, who is an officer of the Company. The expense associated with this related party lease for the year ended October 31, 2023 amounted to $29,460 and the lease is for a 12 month period. 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. Hunt Broyhill also has ownership in Broyhill Asset Management, LLC which serves as the financial advisor for BMC, Fund, Inc. The outstanding payable related to these transactions at October 31, 2023 was $74,037. The expense to Broyhill Asset Management, LLC for financial advisory services was $248,043 for the year ended October 31, 2023. Broyhill Investments, Inc. charges the Company a percentage of payroll for employees who are responsible for the Company’s operations. Also, allocated back to the Company is a 3% safe harbor amount of Broyhill Investment, Inc.’s 401k plan which amounted to $3,914 for the year ended October 31, 2023.

During a prior year the Company committed investing $1,000,000 in the BAM Credit Opportunities Fund which is partly managed by M. Hunt Broyhill. This is the other affiliated company in the financial statements.

BMC FUND, INC.

NOTES TO FINANCIAL STATEMENTS

Year Ended October 31, 2023

IMPAIRED SECURITIES

Selected securities at the end of the year have significant investment impairment issues. These selected securities have an aggregate cost basis of $3,461,499 and have been assigned no value at October 31, 2023.

There were no impairment charges during the year. The Company received $2,389 in proceeds related to the impaired securities during the twelve months ended October 31, 2023, which was recognized as realized gains in the Statement of Operations.

BMC FUND, INC.

DIRECTORS AND OFFICERS (Unaudited)

Year Ended October 31, 2023

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
M. Hunt Broyhill (59) 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 October 2022 and February 2014 till February 2021; 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);	Capitala Finance Corp. (Feb. 2013- 2021)

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
David Stevens (63) 422 Huntington Woods St. Lenoir, NC 28645	Director	Since 2023	President of Smith, Stevens, and Ford, CPA	None
Mark E. Roberts (61) 511 Tarrytown Center Rocky Mount, NC 27804	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, 2023

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
Danny A. Gilbert (56) 603 Stonecroft Court SE Lenoir, NC 28645	Vice President and Chief Financial Officer	Since 2018 Since 2020	Vice President (since February 2018) and Chief Financial Officer of the Fund since January 2020; Chief Compliance Officer of the Fund (June 2017-December 2019); Vice President of Broyhill Family Foundation, Inc. (2019-present); former Assistant City manager and Finance Director, City of Lenoir, NC (2006-2016)	None

Alan R. Deal (59) 5304 Grace Drive Hickory, NC 28601	Chief Compliance Officer	Since 2020	Chief Compliance Officer of the Fund since January 2020; former Controller, Protect Plus and Imagine One Companies (August 2002-April 2019)	None
Leah Geates (38) 802 Lower Creek Dr. NE Lenoir, NC 28645	Secretary	Since 2022	Secretary of the Fund since February 2022	None

BMC FUND, INC.

ADDITIONAL INFORMATION (Unaudited)

Year Ended October 31, 2023

Investment Objectives

The overall investment objective of the Fund is to provide a maximum level of income for shareholders consistent with maintaining the Fund’s long-term purchasing power. This investment objective may not be changed without shareholder approval. The specific goals of the Fund are in order of importance:

Preservation of capital

Current income

Moderate growth

Performance Objectives

A five percent return on the Fund’s assets is desired to be distributed annually for dividend income. Additional modest growth is desired to at least offset inflation risk.

Investment Horizon: The Fund’s asset allocation and investment guidelines are driven by a long-term time horizon. Accordingly, interim fluctuations should be viewed with this perspective in mind. Short-term performance shortfalls are not of critical interest unless they suggest failures in strategy execution or impact required distributions. Notwithstanding that possibility, manager and asset class performance shall be evaluated on a rolling one, three and five year basis.

Liquidity Requirements: The Fund aims to distribute five percent of the value of its assets annually to shareholders. Therefore, a minimum of five percent of the value of the Fund should be held in cash and cash equivalents or instruments that can be quickly converted to cash with no significant adverse change in value as a result of the liquidation.

Risk Tolerance: The Fund seeks to generate returns that are proportional to its risk profile, recognizing that some level of risk must be assumed to achieve the fund’s long-term investment objectives. The objectives and structure of the Fund should be implemented and measured in a manner which seeks low volatility, accepting the possibility of less than average returns in the best years but seeking preservation of capital in the bad years.

Asset Allocation Plan

The Asset Allocation Plan for the Fund is reported below. It reflects the Investment Committee’s consideration of expected returns for equity, fixed income, cash, and real asset classes in domestic and foreign markets as well as consideration of prevailing and expected levels of inflation. The Investment Committee has considered the expected correlation of asset returns and expected volatility of returns to determine an asset allocation with appropriate diversification and sufficient expected return to satisfy the investment objectives of the Fund.

BMC FUND, INC.

ADDITIONAL INFORMATION (Unaudited)

Year Ended October 31, 2023

L. Policy Portfolio

A Policy Portfolio for the Fund has been established that reflects the analysis conducted by the Investment Committee for the Fund. The asset allocation study and resultant Policy Portfolio may be changed in the future, subject to approval by the Board. The Investment Committee is responsible for assuring that the assets of the Fund are deployed in a manner consistent with the Policy Portfolio, although this responsibility may be delegated to the Chief Investment Officer.

Asset Class	Policy Portfolio			Policy Range
Total Short Term Investments		0	%	0% - 10%
Cash & Equivalents

Total Fixed Income Investments		10	%	0% - 40%
Domestic Fixed Income
International Fixed Income

Total Equity Investments		45	%	25% - 65%
Domestic Equities
International Equities

Total Alternative Investments		45	%	25% - 65%
Hedge Funds
Absolute Return

Total Investment Assets		100	%

Risk Factors

An investment in the Fund is not guaranteed to achieve its investment objective; is not a deposit with a bank; is not insured, endorsed or guaranteed by the Federal Deposit Insurance Corporation or any other government agency; and is subject to investment risks. The value of the Fund’s investments will increase or decrease based on changes in the prices of the investments it holds. You could lose money by investing in the Fund. By itself, the Fund does not constitute a balanced investment program. You should carefully consider the following principal and non-principal risks before investing in the Fund. There may be additional risks that the Fund does not currently foresee or consider material. You may wish to consult with your legal or tax advisors, before deciding whether to invest in the Fund. This section describes the risk factors associated with investment in the Fund specifically, as well as those factors generally associated with investment in an investment company with investment objectives, investment policies, capital structure or trading markets similar to the Fund’s. Each risk summarized below is a risk of investing in the Fund and different risks may be more significant at different times depending upon market conditions or other factors.

BMC FUND, INC.

ADDITIONAL INFORMATION (Unaudited)

Year Ended October 31, 2023

The Fund may invest in securities of other investment companies (“underlying funds”). The Fund may be subject to the risks of the securities and other instruments described below through its own direct investments and indirectly through investments in the underlying funds.

Principal Risks

Closed-End Investment Company Risk. The Fund invests in the securities of other closed-end investment companies. Investing in other closed-end investment companies involves substantially the same risks as investing directly in the underlying instruments, but the total return on such investments at the investment company level may be reduced by the operating expenses and fees of such other closed-end investment companies, including advisory fees. There can be no assurance that the investment objective of any investment company in which the Fund invests will be achieved. Closed-end investment companies are subject to the risks of investing in the underlying securities. The Fund, as a holder of the securities of another closed-end investment company, will bear its pro rata portion of the closed-end investment company’s expenses, including advisory fees. These expenses are in addition to the direct expenses of the Fund’s own operations. To the extent the Fund invests a portion of its assets in investment company securities, those assets will be subject to the risks of the purchased investment company’s portfolio securities, and a shareholder in the Fund will bear not only his proportionate share of the expenses of the Fund, but also, indirectly, the expenses of the purchased investment company. The market price of a closed-end investment company fluctuates and may be either higher or lower than the NAV of such closed-end investment company. In accordance with Section 12(d)(1)(F) of the 1940 Act, the Fund will be limited by provisions of the 1940 Act that limit the amount the Fund, together with its affiliated persons, can invest in other investment companies to 3% of any other investment company’s total outstanding stock. As a result, the Fund may hold a smaller position in a closed-end investment company than if it were not subject to this restriction.

Special Purpose Acquisition Companies Risk. The Fund may invest in stock, warrants, and other securities of special purpose acquisition companies or similar special purpose entities that pool funds to seek potential acquisition opportunities (“SPACs”). Unless and until an acquisition meeting the SPAC’s requirements is completed, a SPAC generally invests its assets (less a portion retained to cover expenses) in U.S. Government securities, money market securities and cash. If an acquisition that meets the requirements for the SPAC is not completed within a pre-established period of time, the invested funds are returned to the entity’s shareholders. Because SPACs and similar entities have no operating history or ongoing business other than seeking acquisitions, the value of their securities is particularly dependent on the ability of the entity’s management to identify and complete a profitable acquisition. Some SPACs may pursue acquisitions only within certain industries or regions, which may increase the volatility of their prices. In addition, these securities, which are typically traded in the over-the-counter market, may be considered illiquid, be subject to restrictions on resale, and/or may trade at a discount.

BMC FUND, INC.

ADDITIONAL INFORMATION (Unaudited)

Year Ended October 31, 2023

Management Risk. The Fund is subject to management risk because it is an actively managed portfolio. The Fund’s successful pursuit of its investment objective depends upon the Investment Committee’s ability to find and exploit market inefficiencies with respect to undervalued securities. Such situations occur infrequently and sporadically and may be difficult to predict and may not result in a favorable pricing opportunity that allows the Investment Committee to fulfill the Fund’s investment objective. The Investment Committee’s security selections and other investment decisions might produce losses or cause the Fund to underperform when compared to other funds with similar investment goals.

Market Risk. Overall market risk may affect the value of individual instruments in which the Fund invests. The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Fund’s performance. Factors such as domestic and foreign (non-U.S.) economic growth and market conditions, real or perceived adverse economic or political conditions, inflation, changes in interest rate levels, lack of liquidity in the markets, volatility in the securities markets, adverse investor sentiment affect the securities markets and political vents affect the securities markets. Securities markets also may experience long periods of decline in value. When the value of the Fund’s investments goes down, your investment in the Fund decreases in value and you could lose money.

Local, state, regional, national or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the Fund and its investments and could result in decreases to the Fund’s net asset value. Political, geopolitical, natural and other events, including war, terrorism, trade disputes, government shutdowns, market closures, natural and environmental disasters, epidemics, pandemics and other public health crises and related events and governments’ reactions to such events have led, and in the future may lead, to economic uncertainty, decreased economic activity, increased market volatility and other disruptive effects on U.S. and global economies and markets. Such events may have significant adverse direct or indirect effects on the Fund and its investments. For example, a widespread health crisis such as a global pandemic could cause substantial market volatility, exchange trading suspensions and closures, impact the ability to complete redemptions, and affect Fund performance. A health crisis may exacerbate other pre-existing political, social and economic risks. In addition, the increasing interconnectedness of markets around the world may result in many markets being affected by events or conditions in a single country or region or events affecting a single or small number of issuers.

BMC FUND, INC.

ADDITIONAL INFORMATION (Unaudited)

Year Ended October 31, 2023

An outbreak of infectious respiratory illness caused by a novel coronavirus known as COVID-19 was first detected in China in December 2019 and has now been detected globally. On March 11, 2020, the World Health Organization announced that it had made the assessment that COVID-19 can be characterized as a pandemic. COVID-19 has resulted in travel restrictions, closed international borders, enhanced health screenings at ports of entry and elsewhere, disruption of and delays in healthcare service preparation and delivery, prolonged quarantines, cancellations, business and school closings, supply chain disruptions, and lower consumer demand, as well as general concern and uncertainty. The impact of COVID-19, and other infectious illness outbreaks that may arise in the future, could adversely affect the economies of many nations or the entire global economy, individual issuers and capital markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illnesses in emerging market countries may be greater due to generally less established healthcare systems. Public health crises caused by the COVID-19 outbreak may exacerbate other pre-existing political, social and economic risks in certain countries or globally. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty. The value of the Fund and the securities in which the Fund invests may be adversely affected by impacts caused by COVID-19 and other epidemics and pandemics that may arise in the future.

Risk Related to Fixed Income Securities, including Non-Investment Grade Securities. The Fund may invest in fixed income securities, also referred to as debt securities. Fixed income securities are subject to credit risk and market risk. Credit risk is the risk of the issuer’s inability to meet its principal and interest payment obligations. Market risk is the risk of price volatility due to such factors as interest rate sensitivity, market perception of the creditworthiness of the issuer and general market liquidity. There is no limitation on the maturities or duration of fixed income securities in which the Fund invests. Securities having longer maturities generally involve greater risk of fluctuations in value resulting from changes in interest rates. The Fund’s credit quality policy with respect to investments in fixed income securities does not require the Fund to dispose of any debt securities owned in the event that such security’s rating declines to below investment grade, commonly referred to as “junk bonds.” Although lower quality debt typically pays a higher yield, such investments involve substantial risk of loss. Junk bonds are considered predominantly speculative with respect to the issuer’s ability to pay interest and principal and are susceptible to default or decline in market value due to adverse economic and business developments. The market values for junk bonds tend to be very volatile and those securities are less liquid than investment grade debt securities. Moreover, junk bonds pose a greater risk that exercise of any of their redemption or call provisions in a declining market may result in their replacement by lower-yielding bonds. In addition, bonds in the lowest two investment grade categories, despite being of higher credit rating than junk bonds, have speculative characteristics with respect to the issuer’s ability to pay interest and principal and their susceptibility to default or decline in market value. The Fund’s investments in securities of stressed, distressed or bankrupt issuers, including securities or obligations that are in default, generally trade significantly below par and are considered speculative. There is even a potential risk of loss by the Fund of its entire investment in such securities. There are a number of significant risks inherent in the bankruptcy process. A bankruptcy filing by an issuer may adversely and permanently affect the market position and operations of the issuer. If an issuer of securities held by the Fund declares bankruptcy or otherwise fails to pay principal or interest on such securities, the Fund would experience a decrease in income and a decline in the market value of its investments.

BMC FUND, INC.

ADDITIONAL INFORMATION (Unaudited)

Year Ended October 31, 2023

Interest Rate Risk. Debt securities have varying levels of sensitivity to changes in interest rates. In general, the price of a debt security can fall when interest rates rise and can rise when interest rates fall. Securities with longer maturities and mortgage securities can be more sensitive to interest rate changes although they usually offer higher yields to compensate investors for the greater risks. The longer the maturity of the security, the greater the impact a change in interest rates could have on the security’s price. In addition, short-term and long-term interest rates do not necessarily move in the same amount or the same direction. Short-term securities tend to react to changes in short-term interest rates and long-term securities tend to react to changes in long-term interest rates.

Credit Risk. Fixed income securities rated B or below by S&Ps or Moody’s may be purchased by the Fund. These securities have speculative characteristics and changes in economic conditions or other circumstances are more likely to lead to a weakened capacity of those issuers to make principal or interest payments, as compared to issuers of more highly rated securities.

Extension Risk. The Fund is subject to the risk that an issuer will exercise its right to pay principal on an obligation held by that Fund (such as mortgage-backed securities) later than expected. This may happen when there is a rise in interest rates. These events may lengthen the duration (i.e. interest rate sensitivity) and potentially reduce the value of these securities.

Debt Security Risk. In addition to interest rate risk, call risk and extension risk, debt securities are also subject to the risk that they may also lose value if the issuer fails to make principal or interest payments when due, or the credit quality of the issuer falls.

Market Discount from Net Asset Value Risk. Shares of closed-end investment companies frequently trade at a discount from their net asset value. This characteristic is a risk separate and distinct from the risk that the Fund’s net asset value could decrease as a result of its investment activities and may be greater for investors expecting to sell their Shares in a relatively short period following completion of the Offering. The net asset value of the Shares will be reduced immediately following the Offering as a result of (i) the Subscription Price likely being lower than NAV and (ii) the payment of certain costs of the Offering. Whether investors will realize gains or losses upon the sale of the Shares will depend not upon the Fund’s net asset value but entirely upon whether the market price of the Shares at the time of sale is above or below the investor’s purchase price for the Shares. Because the market price of the Shares will be determined by factors such as relative supply of and demand for the Shares in the market, general market and economic conditions, and other factors beyond the control of the Fund, the Fund cannot predict whether the Shares will trade at, below or above net asset value.

Leverage Risk. Transactions by underlying funds may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the underlying fund to greater risk and increase its costs. The use of leverage by underlying funds may cause such funds to liquidate their portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of an underlying fund’s portfolio will be magnified when it uses leverage. Leverage, including borrowing, may cause an underlying fund to be more volatile than if such fund had not been leveraged.

BMC FUND, INC.

ADDITIONAL INFORMATION (Unaudited)

Year Ended October 31, 2023

Defensive Position Risk. During periods of adverse market or economic conditions, the Fund may temporarily invest all or a substantial portion of its net assets in cash or cash equivalents. The Fund would not be pursuing its investment objective in these circumstances and could miss favorable market developments.

Changes in Policies Risk. The Fund’s Directors may change the Fund’s investment objective, investment strategies and non-fundamental investment restrictions without shareholder approval, except as otherwise indicated.

Preferred Stock Risk. The Fund may invest in preferred stocks. Preferred stock, like common stock, represents an equity ownership in an issuer. Generally, preferred stock has a priority of claim over common stock in dividend payments and upon liquidation of the issuer. Unlike common stock, preferred stock does not usually have voting rights. Preferred stock in some instances is convertible into common stock. Although they are equity securities, preferred stocks have characteristics of both debt and common stock. Like debt, their promised income is contractually fixed. Like common stock, they do not have rights to precipitate bankruptcy proceedings or collection activities in the event of missed payments. Other equity characteristics are their subordinated position in an issuer’s capital structure and that their quality and value are heavily dependent on the profitability of the issuer rather than on any legal claims to specific assets or cash flows.

Investment in preferred stocks carries risks, including credit risk, deferral risk, redemption risk, limited voting rights, risk of subordination and lack of liquidity. Fully taxable or hybrid preferred securities typically contain provisions that allow an issuer, at its discretion, to defer distributions for up to 20 consecutive quarters. Distributions on preferred stock must be declared by the board of directors and may be subject to deferral, and thus they may not be automatically payable. Income payments on preferred stocks may be cumulative, causing dividends and distributions to accrue even if not declared by the company’s board or otherwise made payable, or they may be non-cumulative, so that skipped dividends and distributions do not continue to accrue. There is no assurance that dividends on preferred stocks in which the Fund invests will be declared or otherwise made payable. The Fund may invest in non-cumulative preferred stock, although the Fund’s Investment Committee would consider, among other factors, their non-cumulative nature in making any decision to purchase or sell such securities.

Shares of preferred stock have a liquidation value that generally equals the original purchase price at the date of issuance. The market values of preferred stock may be affected by favorable and unfavorable changes impacting the issuers’ industries or sectors, including companies in the utilities and financial services sectors, which are prominent issuers of preferred stock. They may also be affected by actual and anticipated changes or ambiguities in the tax status of the security and by actual and anticipated changes or ambiguities in tax laws, such as changes in corporate and individual income tax rates, and in the dividends received deduction for corporate taxpayers or the lower rates applicable to certain dividends.

BMC FUND, INC.

ADDITIONAL INFORMATION (Unaudited)

Year Ended October 31, 2023

Because the claim on an issuer’s earnings represented by preferred stock may become onerous when interest rates fall below the rate payable on the stock or for other reasons, the issuer may redeem preferred stock, generally after an initial period of call protection in which the stock is not redeemable. Thus, in declining interest rate environments in particular, the Fund’s holdings of higher dividend paying preferred stocks may be reduced and the Fund may be unable to acquire securities paying comparable rates with the redemption proceeds. In the event of a redemption, the Fund may not be able to reinvest the proceeds at comparable rates of return.

Convertible Securities Risk. The Fund may invest in convertible securities. Convertible securities include fixed income securities that may be exchanged or converted into a predetermined number of shares of the issuer’s underlying common stock at the option of the holder during a specified period. Convertible securities may take the form of convertible preferred stock, convertible bonds or debentures, units consisting of “usable” bonds and warrants or a combination of the features of several of these securities. The investment characteristics of each convertible security vary widely, which allows convertible securities to be employed for a variety of investment strategies. The Fund will exchange or convert convertible securities into shares of underlying common stock when, in the opinion of the Fund’s Investment Committee, the investment characteristics of the underlying common shares will assist the Fund in achieving its investment objective. The Fund may also elect to hold or trade convertible securities. In selecting convertible securities, the Fund’s Investment Committee evaluates the investment characteristics of the convertible security as a fixed income instrument, and the investment potential of the underlying equity security for capital appreciation. In evaluating these matters with respect to a particular convertible security, the Fund’s Investment Committee considers numerous factors, including the economic and political outlook, the value of the security relative to other investment alternatives, trends in the determinants of the issuer’s profits, and the issuer’s management capability and practices.

The value of a convertible security, including, for example, a warrant, is a function of its “investment value” (determined by its yield in comparison with the yields of other securities of comparable maturity and quality that do not have a conversion privilege) and its “conversion value” (the security’s worth, at market value, if converted into the underlying common stock). The investment value of a convertible security is influenced by changes in interest rates, with investment value declining as interest rates increase and increasing as interest rates decline. The credit standing of the issuer and other factors may also have an effect on the convertible security’s investment value. The conversion value of a convertible security is determined by the market price of the underlying common stock. If the conversion value is low relative to the investment value, the price of the convertible security is governed principally by its investment value. Generally, the conversion value decreases as the convertible security approaches maturity. To the extent the market price of the underlying common stock approaches or exceeds the conversion price, the price of the convertible security will be increasingly influenced by its conversion value. A convertible security generally will sell at a premium over its conversion value by the extent to which investors place value on the right to acquire the underlying common stock while holding a fixed income security. A convertible security may be subject to redemption at the option of the issuer at a price established in the convertible security’s governing instrument. If a convertible security held by the Fund is called for redemption, the Fund will be required to permit the issuer to redeem the security, convert it into the underlying common stock or sell it to a third party. Any of these actions could have an adverse effect on the Fund’s ability to achieve its investment objective.

BMC FUND, INC.

ADDITIONAL INFORMATION (Unaudited)

Year Ended October 31, 2023

Issuer Specific Changes Risk. Changes in the financial condition of an issuer, changes in the specific economic or political conditions that affect a particular type of security or issuer, and changes in general economic or political conditions can affect the credit quality or value of an issuer’s securities. Lower-quality debt securities tend to be more sensitive to these changes than higher-quality debt securities.

Non-Principal Risks

In addition to the principal risks set forth above, the following additional risks may apply to an investment in the Fund.

Anti-Takeover Provisions Risk. The Fund’s Charter and Bylaws include provisions that could limit the ability of other persons or entities to acquire control of the Fund or to cause it to engage in certain transactions or to modify its structure.

Common Stock Risk. The Fund invests in common stocks. Common stocks represent an ownership interest in a company. The Fund may also invest in securities that can be exercised for or converted into common stocks (such as convertible preferred stock). Common stocks and similar equity securities are more volatile and riskier than some other forms of investment. Therefore, the value of your investment in the Fund may sometimes decrease instead of increase. Common stock prices fluctuate for many reasons, including adverse events such as unfavorable earnings reports, changes in investors’ perceptions of the financial condition of an issuer, the general condition of the relevant stock market or when political or economic events affecting the issuers occur. In addition, common stock prices may be sensitive to rising interest rates, as the costs of capital rise and borrowing costs increase for issuers. Because convertible securities can be converted into equity securities, their values will normally increase or decrease as the values of the underlying equity securities increase or decrease. The common stocks in which the Fund invests are structurally subordinated to preferred securities, bonds and other debt instruments in a company’s capital structure in terms of priority to corporate income and assets and, therefore, will be subject to greater risk than the preferred securities or debt instruments of such issuers.

BMC FUND, INC.

ADDITIONAL INFORMATION (Unaudited)

Year Ended October 31, 2023

Exchange Traded Funds Risk. The Fund may invest in exchange-traded funds, which are investment companies that, in some cases, aim to track or replicate a desired index, such as a sector, market or global segment. ETFs are passively or, to a lesser extent, actively managed and their shares are traded on a national exchange. ETFs do not sell individual shares directly to investors and only issue their shares in large blocks known as “creation units.” The investor purchasing a creation unit may sell the individual shares on a secondary market. Therefore, the liquidity of ETFs depends on the adequacy of the secondary market. There can be no assurance that an ETF’s investment objective will be achieved, as ETFs based on an index may not replicate and maintain exactly the composition and relative weightings of securities in the index. ETFs are subject to the risks of investing in the underlying securities. The Fund, as a holder of the securities of the ETF, will bear its pro rata portion of the ETF’s expenses, including advisory fees. These expenses are in addition to the direct expenses of the Fund’s own operations.

Illiquid Securities Risk. The Fund may invest up to 10% of its net assets in illiquid securities. Illiquid securities may offer a higher yield than securities which are more readily marketable, but they may not always be marketable on advantageous terms. The sale of illiquid securities often requires more time and results in higher brokerage charges or dealer discounts than does the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. A security traded in the U.S. that is not registered under the Securities Act will not be considered illiquid if Fund management determines that an adequate investment trading market exists for that security. However, there can be no assurance that a liquid market will exist for any security at a particular time.

Portfolio Turnover Risk. The Fund cannot predict its securities portfolio turnover rate with certain accuracy. Higher portfolio turnover rates could result in corresponding increases in brokerage commissions and may generate short-term capital gains taxable as ordinary income.

Small and Medium Cap Company Risk. Compared to investment companies that focus only on large capitalization companies, the Fund’s share price may be more volatile because it also invests in small and medium capitalization companies. Compared to large companies, small and medium capitalization companies are more likely to have (i) more limited product lines or markets and less mature businesses, (ii) fewer capital resources, (iii) more limited management depth and (iv) shorter operating histories. Further, compared to large cap stocks, the securities of small and medium capitalization companies are more likely to experience sharper swings in market values, be harder to sell at times and at prices that the Fund’s Investment Committee believes appropriate, and offer greater potential for gains and losses.

BMC FUND, INC.

ADDITIONAL INFORMATION (Unaudited)

Year Ended October 31, 2023

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-Port. The Company’s Form N-Port 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 David F. Stevens, a member of its Audit Committee, is an audit committee financial expert. Mr. Stevens is an independent director of the Registrant.

Item 4. Principal Accountant Fees and Services.

(a) Audit Fees: $64,000.00 for the fiscal year ended October 31, 2022; $110,000.00 for the fiscal year ended October 31, 2023.

(b) Audit-Related Fees: $2,700.00 for the fiscal year ended October 31, 2022; $8,102.58 for the fiscal year ended October 31, 2023. These fees were incurred for travel-related expenses.

(c) Tax Fees: $11,000.00 for the fiscal year ended October 31, 2022; $13,000.00 for the fiscal year ended October 31, 2023. These fees were incurred for preparation of the tax returns.

(d) All Other Fees: $4,200.00 for the fiscal year ended October 31, 2022; $0.00 for the fiscal year ended October 31, 2023. These fees were incurred for report production and printing and consulting services.

(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, 2023 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 is primarily responsible for the day-to-day management of BMC Fund, Inc. (the Fund). 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.

(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, 2023.

M. Hunt Broyhill

	Other Registered Investment Companies	Other Pooled Investment Vehicles	Other Accounts
Number of Accounts Managed	None	2	56
Number of Accounts Managed with Performance-Based Advisory Fees	None	2	None
Assets Managed	$0	$19,720,501	$92,299,988
Assets Managed with Performance-Based Advisory Fees	$0	$14,909,691	$0

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, 2023 is set forth below:

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

(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.

(a)	Evaluation of Disclosure Controls and Procedures.

BMC Fund, Inc. (the “Registrant” or the “Fund”) maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Investment Company Act of 1940, as amended (the “1940 Act”), is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”). Such information is accumulated and communicated to the Registrant’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Within 90 days prior to the filing date of this report on Form N-CSR, management, including the Registrant’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the 1940 Act). Based upon that evaluation and subject to the foregoing, the Registrant’s Chief Executive Officer and Chief Financial Officer concluded that the Registrant’s disclosure controls and procedures were effective as of October 31, 2023.

(b)	Changes in Internal Controls.

There have been no changes in the Registrant’s internal controls or in other factors that could materially affect the internal controls over financial reporting subsequent to the date of their evaluation in connection with the preparation of this Form N-CSR.

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/ *Danny A. Gilbert*
Danny A. Gilbert
Vice President and
Chief Financial Officer

Date: January 5, 2024

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: January 5, 2024

By

/s/ *Danny A. Gilbert*
Danny A. Gilbert
Vice President and Chief Financial Officer

Date: January 5, 2024

Dates Referenced Herein and Documents Incorporated by Reference

This ‘N-CSR’ Filing	Date	Other Filings

Filed on / Effective on:	1/5/24	40-17F2
	12/10/23
	11/25/23
For Period end:	10/31/23	NPORT-P, NPORT-P/A
	9/10/23
	8/25/23
	6/10/23
	5/25/23
	3/10/23
	2/25/23
	12/10/22
	11/25/22
	10/31/22	N-CEN, N-CSR, NPORT-P
	10/31/21	N-CEN, N-CSR, N-CSR/A, NPORT-P
	10/31/20	N-CEN, N-CSR, N-CSR/A, NPORT-P
	3/11/20
	10/31/19	N-CEN, N-CSR
	10/31/18	N-CEN, N-CSR
	10/31/17	N-CSR, NSAR-B, NSAR-B/A
	10/31/16	N-CSR, NSAR-B
	10/31/15	N-CSR, NSAR-B
	12/13/14
	10/31/14	N-CSR, NSAR-B
	2/24/07	DEF 14A
	7/26/03	DEF 14A
		List all Filings

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Filing Submission 0001104659-24-001728 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

BMC Fund Inc. – ‘N-CSR’ for 10/31/23

On: Friday, 1/5/24, at 1:18pm ET · Effective: 1/5/24 · For: 10/31/23 · Accession #: 1104659-24-1728 · File #: 811-03150

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