WADE FUND INC.
Audited Financial Statements
Wade Fund, Inc.
Memphis, Tennessee
December 31, 1998
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WADE FUND, INC.
Suite 2224
5100 Poplar Avenue
Memphis, Tennessee 38137
February 8, 1999
TO THE STOCKHOLDERS:
Submitted, herewith, is the statement covering operations of Wade
Fund, Inc., from January 1, 1998 through December 31, 1998.
Net ordinary income for the year amounted to $456.92. Net profit from the
sale of securities was $30,156.13.
The dividend from net ordinary income was $.03 per share. The dividend from
net profit from the sale of securities was $1.67 per share.
The net asset value per share as of December 31, 1998 was $39.11. This
compares with $38.88 as of December 31, 1997.
Sincerely yours,
WADE FUND, INC.
s/ Maury Wade, Jr.
Maury Wade, Jr.
President
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Wade Fund, Inc.
Index
December 31, 1998
Independent Auditor's Report.........................................Page 3
Financial Highlghts.......................................................4
Statement of Assets and Liabilities.......................................5
Statement of Sources of Net Assets........................................5
Statement of Operations...................................................6
Statement of Realized Gain on Investments.................................6
Statement of Unrealized Appreciation on Investments.......................6
Statement of Changes in Net Assets........................................7
Schedule of Investments...................................................8
Notes to Financial Statements.............................................9
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RHEA & IVY, P.L.C.
Certified Public Accountants & Business Advisors
Suite 250 6000 Poplar Avenue Memphis, TN 38119-3971
TEL 901-761-3000 FAX 901-761-9667 WWW.RHEAIVY.COM
To the Shareholders and Board of Directors
Wade Fund, Inc.
Memphis, Tennessee
Independent Auditor's Report
We have audited the statements of assets and liabilities and sources of
net assets of Wade Fund, Inc., including the schedule of investments as
of December 31, 1998, and the related statements of operations, realized
gain on investments, unrealized appreciation on investments and changes
in net assets for the year then ended, and supplementary information
(Page 4 and Note 5) for the five years then ended. These financial
statements are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion. Securities owned as
investments at December 31, 1998, were held by the Trust Department of
the First Tennessee Bank under a custodial agreement, and were verified
by direct confirmation.
In our opinion, the financial statements and schedule referred to above
present fairly, in all material respects, the financial position of Wade
Fund, Inc., as of December 31, 1998, and the results of its operations
and the changes in its net assets for the year then ended, in conformity
with generally accepted accounting principles. Also, in our opinion, the
supplementary information (Page 4 and Note 5) for the five years ended
December 31, 1998, is fairly stated in all material respects in relation
to the financial statements taken as a whole.
/s/ Rhea & Ivy, P.L.C.
Memphis, Tennessee
January 7, 1999
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<TABLE>
Wade Fund, Inc.
Financial Highlights
For the Years Ended December 31, 1998, 1997, 1996, 1995 and 1994
December 31, December 31, December 31, December 31, December 31,
1994 1995 1996 1997 1998
------------ ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Per Share Income and Capital
Changes (for a share outstanding
throughout the year ending:)
Net asset value, beginning of year $30.73 $29.64 $33.60 $34.81 $38.88
Income from Investment Operations
Net investment income 0.08 0.12 0.09 0.05 0.03
Net realized and unrealized gains
(losses on securities) (0.50) 6.07 4.26 6.98 1.90
------------ ------------ ------------ ------------- ------------
(0.42) 6.19 4.35 7.03 1.93
------------ ------------ ------------ ------------- ------------
Less Distributions
Dividends from net income 0.06 0.15 0.10 0.05 0.03
Distributions from realized gains
on securities 0.61 2.08 3.04 2.91 1.67
------------ ------------ ------------ ------------- ------------
0.67 2.23 3.14 2.96 1.70
------------ ------------ ------------ ------------- ------------
Net asset value, end of year $29.64 $33.60 $34.81 $38.88 $39.11
============ ============ ============ ============= ============
Total return -1.31% 20.83% 12.96% 20.25% 5.16%
Supplemental Data
Net assets, end of year $506,200 $584,347 $628,809 $705,332 $729,828
Ratio of expenses to average
net assets 2.82% 2.76% 2.86% 2.72% 2.71%
Ratio of net investment income
to average net assets 0.20% 0.39% 0.30% 0.12% 0.06%
Portfolio turnover rate 0.00% 0.00% 0.00% 4.43% 0.00%
Number of shares outstanding,
end of period 17,080 17,391 18,066 18,142 18,659
Note: Complete financial statements will be found elsewhere in this report. The above
information is a condensation of certain pertinent information. See the report of the
independent public accountant and the accompanying notes to the financial statements.
See notes to financial statements.
</TABLE>
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Wade Fund, Inc.
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments at closing market quotations:
Common stock (cost $135,840.93) $ 520,137.50
Money market mutual fund (cost $202,170.95) 202,170.95
Cash on demand deposit 5,206.82
Dividends receivable 1,025.50
Interest receivable 832.90
Subscription receivable 5,824.58
Prepaid bond premium 370.11
------------
Total assets 735,568.36
------------
Liabilities
Accrued expenses 4,915.25
State franchise taxes payable 825.08
------------
Total liabilities 5,740.33
------------
Net assets applicable to 18,659 shares of
outstanding capital stock $ 729,828.03
============
Net asset value per share of outstanding
capital stock $ 39.11
============
Offering and redemption price per share $ 39.11
============
Statement of Sources of Net Assets
December 31, 1998
Capital
Excess of amounts received from sale of capital
shares over amounts paid out in
redeeming shares:
Authorized 100,000 shares, no par value,
outstanding 18,659 shares $ 333,811.55
Accumulated net realized gain on investment
(computed on identified cost basis) $ 1,563,900.44
Accumulated distributions on net realized
gain 1,557,931.77 5,968.67
------------
Unrealized appreciation on investments 384,296.57
------------
Total capital 724,076.79
Undistributed net income 5,751.24
------------
Net assets applicable to 18,659 shares of
outstanding capital stock $ 729,828.03
============
See notes to financial statements.
5
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Wade Fund, Inc.
Statement of Operations
For the Year Ended December 31, 1998
Income
Dividends $ 10,153.50
Interest 9,401.42
------------
19,554.92
------------
Expenses
Advisory fee 5,300.13
Legal fee 4,800.00
Accounting fee 3,819.87
Custodial fee 1,980.00
Other expenses 2,358.00
Taxes, including federal, state
and local 840.00
------------
19,098.00
------------
Net investment income $ 456.92
============
Ratio of total expenses to total
investment income 97.66%
============
Statement of Realized Gain on Investments
For The Year Ended December 31, 1998
Realized gain from security transactions
Proceeds from sale $ 35,305.18
Cost of securities sold
(identified cost basis) 5,149.68
Net gain on investments -----------
(Gain on average cost basis $50,291.94) $ 30,156.13
===========
Statement of Unrealized Appreciation on Investments
For the Year Ended December 31, 1998
Balance at January 1, 1998 $ 379,406.89
Balance at December 31, 1998 384,296.57
------------
Increase in unrealized appreciation $ 4,889.68
============
See notes to financial statements.
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Wade Fund, Inc.
Statement of Changes in Net Assets
For the Year Ended December 31, 1998
Net Assets
Net assets at January 1, 1998, including $705,332.01
$5,832.40 in undistributed net income
Income (Expenses)
Net income per statement of income
and expenses $456.92
Net equalization credits (debits) included
in price of shares sold and repurchased 1.65
Distributions to shareholders of $.03 (539.73)
-----------
Decrease in balance of undistributed
net income (81.16)
Realized Gain or Loss on Investments
Net gain from sale of investments 30,156.13
Distribution to shareholders of $1.67 a share (30,044.97)
----------
Decrease in undistributed net
realized gain 111.16
Increase in unrealized appreciation of investments 4,889.68
Capital Stock Issued and Repurchased
(exclusive of equalization debits and credits)
Amounts received from subscriptions
to 673 shares of capital stock 25,424.78
Less amounts paid for capital stock repurchased (5,848.44)
----------
Increase in capital stock 19,576.34
----------
Net assets at December 31, 1998, including
$5,751.24 in undistributed net income $729,828.03
==========
See notes to financial statements.
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Wade Fund, Inc.
Schedule of Investments
December 31, 1998
Number of Market
Shares Cost Value
--------- ------------ -----------
Common stocks - 71.27%
Aluminum - 7.15%
Aluminum Co. of America
Alcoa, Inc. 700 $ 6,456.75 $ 52,193.75
------------ -----------
Automobile - 3.61%
Autozone (B) 800 $ 23,132.00 $ 26,350.00
------------ -----------
Bank and Finance - 18.67%
J. P. Morgan and Co. Inc. 500 1,833.19 52,531.25
First Tennessee National
Corporation 2,200 20,881.67 83,737.50
------------ -----------
22,714.86 136,268.75
------------ -----------
Electronics - 9.39%
Texas Instruments, Inc. 800 1,072.95 68,500.00
------------ -----------
Insurance - 5.29%
Safeco Corporation 900 1,080.71 38,643.75
------------ -----------
Metals - 3.49%
Phelps Dodge Corp. 500 23,634.00 25,437.50
------------ -----------
Paper Products - 6.14%
International Paper, Inc. 1,000 24,828.25 44,812.50
------------ -----------
Petroleum Services - 3.81%
Schlumberger, Ltd. 600 11,084.10 27,825.00
------------ -----------
Pharmaceutical - 9.17%
Bristol Myers Squibb 500 14,928.13 66,906.25
------------ -----------
Railroads - 4.55%
CSX Corporation 800 6,909.18 33,200.00
------------ -----------
Total common stocks - 71.27% 135,840.93 520,137.50
------------ -----------
Money Market Mutual Funds - 27.70%
First Funds U.S.
Government Portfolio 202,170.95 202,170.95 202,170.95
------------ -----------
Total money market funds 202,170.95 202,170.95
------------ -----------
Total investments (A) $ 338,011.88 722,308.45
============
Other assets less liabilities - 1.03% 7,519.58
-----------
Net assets - 100% $ 729,828.03
============
(A) Represents the aggregate cost of investments for federal income tax
purposes
(B) Non-income producing
See notes to financial statements.
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WADE FUND, INC.
Notes to Financial Statements
December 31, 1998
1. Significant Accounting Policies
Income Taxes
Since it is the policy of the Fund to qualify each year as a regulated
investment company under Section 851 of the Internal Revenue Code and to
distribute all, or substantially all, of its taxable income, including realized
net gain on investments, it is not expected that federal income tax will
ordinarily constitute a major item of expense. Therefore, no provision is made
for such tax on unrealized appreciation on investments. However, on the accrual
basis of accounting, provision for federal income tax and state franchise and
excise tax on net income and on net realized gain on investments is made when
applicable.
Equalization
The Company follows the accounting practice known as equalization by which a
portion of the proceeds from sales and costs of repurchases of capital shares
equivalent, on a per share basis, to the amount of distributable net investment
income on the date of the transaction is credited or charged to undistributed
net income. As a result, undistributed investment income per share is
unaffected by sales or redemptions of fund shares.
Investments
Investments in securities traded on a national securities exchange are valued at
the last reported sales price on the last business day of the period; securities
traded in the over-the-counter market and listed securities for which no sale
was reported on that date are valued at the last reported bid price. During the
year ended December 31, 1998, proceeds of securities sold were $35,305.81.
Estimates
The preparation of financial statements in confmity with generally accepted
accounting principles 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.
2. Capital Stock
The Fund is registered under the Investment Company Act of 1940, as amended, as
an open-end, nondiversified management company with 100,000 shares of no par
value common capital stock authorized.
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3. Dividends and Distributions
On December 10, 1998, the Board of Directors declared a dividend distribution
from net realized gains from security transaction of $1.67 per share and from
net income of $.03 per share. The dividends were paid December 18, 1998 to
stockholders of record December 10, 1998.
4. Investment Advisory Fee
Advisory service fee is paid at the annual rate of three-fourths of one percent
on the net value of investment assets and is paid at the end of each quarter at
the rate of three-sixteenths of one percent of the net value of such assets on
the last day of the quarter on which the New York Stock Exchange is open. Maury
Wade, Jr., who is president and director of the Fund, received $5300.13 for his
services as investment advisor.
5. Supplementary Information
Net asset values and dividends declared per share, for the five years ended
December 31, 1998 are as follows:
Dividends Declared
------------------
From
Net From Realized
Year Ended Asset Net Capital
December 31, Value Income Gains
------------ ----- ------ -------
1994 29.64 .06 .61
1995 33.60 .15 2.08
1996 34.81 .10 3.04
1997 38.88 .05 2.91
1998 39.11 .03 1.67
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