================================================================================
BOYAR VALUE FUND, INC.
----------------------
ANNUAL REPORT
December 31, 1998
FUND MANAGER
------------
LADENBURG THALMANN FUND MANAGEMENT INC.
590 Madison Avenue
New York, NY 10022
INVESTMENT ADVISER ADMINISTRATOR
------------------ -------------
BOYAR ASSET MANAGEMENT, INC. COUNTRYWIDE FUND SERVICES, INC.
35 East 21st Street 312 Walnut Street
New York, NY 10010 P.O. Box 5354
1.212.995.8300 Cincinnati, OH 45201-5354
1.800.266.5566
================================================================================
<PAGE>
[LOGO]
BOYAR
VALUE FUND
----------
February 22, 1999
Dear Shareholder:
A LOOK BACK AT 1998
- -------------------
o The fourth quarter saved the year.
o After global market turmoil from August to early October wiped out most of
the stock market's 1998 gains, stocks roared back to post one of their best
quarters of the decade, preserving an unprecedented four-year streak of
double-digit gains for the major indices.
o Indeed, one of the most striking results of the aftermath of the midyear
meltdown was that large, blue-chip growth stocks, which so many analysts
felt had reached overvalued extremes, emerged, if anything, more overvalued
than ever.
o During 1998, about 90% of diversified equity funds failed to beat the S&P
500 Index. During the prior year, 1997, mutual funds still managed to earn
a hefty 24.7% total return compared with 33.7% for the S&P 500 Index. But
in 1998, the average domestic fund managed returns slightly above 10% -
creating the largest negative performance disparity between the leading
indices and fund managers since 1994, when the average fund actually lost
money.
o 1998 also witnessed the emergence of the Internet-related stocks as market
drivers. Several, such as online bookseller Amazon.com Inc. and
online-auction service e-Bay Inc., saw their market values multiply several
times over.
o However, what investors probably will remember most about 1998 and what
they already fear most about the current year is volatility. Volatility
within the average trading day was much more pronounced in 1998 than in
most years of the century.
o According to Ned Davis research, the Dow Jones Industrial Average typically
had fewer than five swings of 5% in each year since 1946. In 1998, the
volatile industrials went through 10 such swings. Two of those swings
exceeded 15%. The last time the blue chips staged two 15% reversals of
fortune in a single year was 1987, the year of the crash. In fact, the
industrials have endured that kind of volatility only one other time since
the early 1930s - 1973.
o Throughout 1998, investors worried about every imaginable trouble. Sagging
Asian economies dragged down the earnings growth of American
multinationals. Forecasters warned of inflation that would drive up
interest rates, and then of deflation that would lead to recession.
o Neither inflation nor deflation materialized but corporate earnings staged
their worst performance in a decade, in some cases falling sharply. Russia
effectually defaulted on its debt and devalued the Ruble in the early part
of 1999. Brazil elected not to support the Real allowing it to decline
dramatically.
o For many long-term market watchers, the most worrisome aspect of the 1998
gains was that they applied to such a narrow group of stocks. Many of the
less prominent issues were left behind. Despite its own late-year gains,
the Russell 2000 Index of small stocks finished down 2.5% for the year. For
every analyst encouraged by the heady gains of the technology-denominated
NASDAQ 100, two are worried that the gains are limited to such a narrow
group of stocks.
- --------------------------------------------------------------------------------
<PAGE>
o The problem for 1999 is that many of the same worries persist, and the
Federal Reserve is signaling it may be through lowering interest rates, at
least for now. While many now expect the Dow Industrials to hit 10,000 this
year, others fear that the overextended market leaders are about to tank -
if this occurs, and the market is to continue its upward bias, the market
advance must broaden and new leadership must emerge.
o Clearly both the S&P 500 and the NASDAQ 100 stock indices are selling at
historically high price-to-earnings ratios. Both of these indices, however,
are based on the change in a company's market capitalization - the product
of the change in price and the amount of stock outstanding. The bigger a
company's market cap, the bigger its impact. Twelve stocks, according to
Merrill Lynch, accounted for more than half of 1998's move in the S&P 500.
During 1998, the four largest companies on the NASDAQ 100, Microsoft,
Intel, MCI Worldcom and Cisco, represented 62% of the weighting of that
index. Eliminate the biggest companies from both of these indices and the
high P/E ratios are not nearly as problematic. The reality is that there
are many smaller companies that are currently attractively priced. It's
just a matter of time before the market recognizes them. In fact, 1999
could be the year when the leading stock market indices don't meet
investors' expectations, and good stock picking becomes more critical.
o Two other factors could positively impact stock prices during 1999:
(a) We are witnessing a technological revolution that, in terms of scope
and magnitude, significantly dwarfs the industrial revolution.
Computers are cheaper, faster and simpler to operate. Software is more
sophisticated and easier to understand. The Internet is
revolutionizing the way we engage in commerce and how we communicate.
All of this translates into a higher rate of productivity, which means
a superior rate of growth. The difference between 2 percent and 3
percent growth year in and year out can be the difference between
living standards doubling in one generation, versus taking two or
three generations to achieve the same progress.
(b) Over the last 41 years, there has been at least one thing investors
have been able to count on so far without fail: stocks will rise,
often sharply, in the calendar year before a presidential election
year.
o In a recently completed study, Fred Allvine, a management professor at
Georgia Tech, points out that since 1957, the S&P 500 Index has risen 10
times out of 10 during the third year of the four-year presidential cycle.
During that time, only five times each in the first and second years did
the S&P 500 show a gain. In the fourth year, the S&P 500 rose nine times
out of 10.
o Allvine's, 1980 study about stock market returns and the presidential cycle
does admit that such a relation is not an immutable law. It does conclude,
however, that it would be unwise for an investor to ignore the phase of the
election cycle in making market-timing decisions. The odds strongly favor
stock prices rising relative to trend over the two years prior to a
presidential election. *Condensed and edited from a January 9, 1999 Wall
Street Journal article penned by Thomas Granahan, as well as research
provided by Mark Boyar & Co., Inc.
FUND'S PERFORMANCE
- ------------------
o The Fund's total return from inception through December 31, 1998 was -2.46%
which compares favorably to its benchmark, the Russell 2000 Index, which
lost 11.74% during this period.
o A number of factors negatively impacted the Fund's performance since it
commenced operations on May 5, 1998.
(a) Large Cash Position
-------------------
It normally takes as much as a year for us to invest the cash of
a new account. Consequently, Boyar Value Fund's large cash
position was only able to garner money market returns.
<PAGE>
(b) Market Decline
--------------
As the summer progressed the stock market in general witnessed a
significant correction. Stock market pundits attributed the
downdraft to the scandal in the White House, the ongoing economic
crises in Asia and Latin America and the devaluation of Russia's
Ruble, among others.
(c) Small Cap Stocks Underperform
-----------------------------
As the market began to rally in September small-cap stocks, in
general, lagged their larger brethren. Boyar Value Fund has a
fair number of such holdings in its portfolio - these stocks
pared the Fund's overall return.
Investors would be wise to reduce their expectations when it comes to the
- --------------------------------------------------------------------------------
returns they might be anticipating from the stock market during the next few
- --------------------------------------------------------------------------------
years.
- ------
o The 20% plus returns captured by the leading stock market indices during
the past four years are clearly unsustainable. It is our expectation that
in the not too distant future these types of results will regress to the
mean of the past 65 years, which approximates 12%. In fact, it is not
inconceivable that stock market returns, as measured by the leading
indices, could even fall short of that number for a few years.
Boyar Value Fund's philosophy and goals:
- ----------------------------------------
o The Boyar Value Fund tends to buy the common shares of publicly traded
businesses that are selling in the market place at significant discounts to
our estimate of their intrinsic or private market value.
o Furthermore, most of the businesses that we invest in are either not widely
followed by the majority of Wall Street brokerage houses or may have
plummeted in value because they failed to meet analysts earnings
expectations.
o Purchasing out of favor companies may inhibit short-term performance since
it may take some time for these companies to right themselves. On the other
hand, it does create a "margin of safety" since most of these companies
have plummeted in value by such a margin that most of the downside risk has
been eliminated.
o Over an investment time horizon of three to five years, these undervalued
corporations often will be re-evaluated upward by the stock market or the
assets of the businesses may be acquired by a third party.
o By utilizing this long-term "Buy and Hold" strategy it allows capital to
compound without the return-eroding effect of commissions and capital gains
taxes. Such an orientation may sound stodgy, but we firmly believe this
approach is as important to investment success as picking the right stocks
at the right price and at the right time.
o Since Boyar Value Fund will buy equity positions in businesses regardless
of their market capitalization, it will be very difficult to compare its
performance to a particular index. Our goal is to return to investors over
a complete market cycle an absolute rate of return that is superior to the
stock market's total return over the past 60 years which approximates
10.65%.
If you have any questions do not hesitate to call (212) 995-8300.
Very truly yours,
/s/ Mark A. Boyar
Mark A. Boyar
Chief Investment Officer
<PAGE>
Comparison of the Change in Value of a $10,000 Investment in the
Boyar Value Fund, Inc., the Russell 2000 Index, the Russell 2000
Value Index and the Russell Midcap Value Index
12/98
-----
Boyar Value Fund, Inc. $9,754
Russell 2000 Index $8,826
Russell 2000 Value Index $8,591
Russell Midcap Value Index $9,597
------------------------
Boyar Value Fund, Inc.
Total Return
Since Inception* (2.46)%
------------------------
*Commencement of operations was May 5, 1998.
Past performance is not predictive of future performance.
<PAGE>
BOYAR VALUE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1998
ASSETS
Investment securities:
At acquisition cost $ 1,357,859
===========
At market value (Note 1) $ 1,344,619
Interest receivable 1,384
Dividends receivable 540
Organization expenses, net (Note 1) 77,049
Other assets 8,530
-----------
TOTAL ASSETS 1,432,122
-----------
LIABILITIES
Dividends payable 529
Payable to affiliates (Note 3) 14,507
Other accrued expenses 1,259
-----------
TOTAL LIABILITIES 16,295
-----------
NET ASSETS $ 1,415,827
===========
NET ASSETS CONSIST OF:
Paid-in capital $ 1,429,067
Net unrealized depreciation on investments (13,240)
-----------
NET ASSETS $ 1,415,827
===========
Shares of beneficial interest outstanding (1,000,000,000
shares authorized, $0.001 par value) 145,634
===========
Net asset value, offering price, and redemption
price per share (Note 1) $ 9.72
===========
See accompanying notes to financial statements.
<PAGE>
BOYAR VALUE FUND, INC.
STATEMENT OF OPERATIONS
For the Period Ended December 31, 1998 (a)
INVESTMENT INCOME
Dividends $ 18,031
--------
EXPENSES
Accounting services fees (Note 3) 16,000
Directors' fees and expenses 15,500
Amortization of organization expenses (Note 1) 11,854
Transfer agent fees (Note 3) 9,600
Registration fees 9,004
Insurance expense 8,800
Administrative services fees (Note 3) 8,000
Custodian fees 5,666
Postage and supplies 4,496
Investment advisory fees (Note 3) 3,741
Management fees (Note 3) 3,741
Distribution expenses (Note 3) 1,871
Printing and filing of shareholder reports 500
Other expenses 380
--------
TOTAL EXPENSES 99,153
Fees waived and expenses reimbursed by the
Manager and the Adviser (Note 3) (86,060)
--------
NET EXPENSES 13,093
--------
NET INVESTMENT INCOME 4,938
--------
REALIZED AND UNREALIZED LOSSES ON INVESTMENTS
Net realized gains from security transactions --
Net change in unrealized appreciation/
depreciation on investments (13,240)
--------
NET REALIZED AND UNREALIZED LOSSES ON INVESTMENTS (13,240)
--------
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (8,302)
========
(a) Represents the period from the commencement of operations (May 5, 1998)
through December 31, 1998.
See accompanying notes to financial statements.
<PAGE>
BOYAR VALUE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the Period Ended December 31, 1998 (a)
FROM OPERATIONS:
Net investment income $ 4,938
Net realized gains from security transactions --
Net change in unrealized appreciation/
depreciation on investments (13,240)
-----------
Net decrease in net assets from operations (8,302)
-----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (4,938)
-----------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 1,324,959
Net asset value of shares issued in
reinvestment of distributions to shareholders 4,409
Payments for shares redeemed (301)
-----------
Net increase in net assets from capital share transactions 1,329,067
-----------
TOTAL INCREASE IN NET ASSETS 1,315,827
NET ASSETS:
Beginning of period (Note 1) 100,000
-----------
End of period $ 1,415,827
===========
CAPITAL SHARE ACTIVITY:
Sold 135,214
Reinvested 453
Redeemed (33)
-----------
Net increase in shares outstanding 135,634
Shares outstanding, beginning of period (Note 1) 10,000
-----------
Shares outstanding, end of period 145,634
===========
(a) Represents the period from the commencement of operations (May 5, 1998)
through December 31, 1998.
See accompanying notes to financial statements.
<PAGE>
BOYAR VALUE FUND, INC.
FINANCIAL HIGHLIGHTS
Per Share Data for a Share Outstanding Throughout the Period
Ended December 31, 1998 (a)
Net asset value at beginning of period $ 10.00
-------------
Income from investment operations:
Net investment income 0.03
Net realized and unrealized losses on investments (0.28)
-------------
Total from investment operations (0.25)
-------------
Less distributions:
From net investment income (0.03)
-------------
Net asset value at end of period $ 9.72
=============
Total return (2.46%)
=============
Net assets at end of period $ 1,415,827
=============
Ratio of net expenses to average net assets (b) 1.75%(c)
Ratio of net investment income to average net assets 0.66%(c)
Portfolio turnover rate 0%
(a) Represents the period from the commencement of operations (May 5, 1998)
through December 31, 1998.
(b) Absent fees waived and expenses reimbursed by the Manager and the Adviser,
the ratio of expenses to average net assets would have been 13.19%(c) for
the period ended December 31, 1998 (Note 3).
(c) Annualized.
See accompanying notes to financial statements.
<PAGE>
BOYAR VALUE FUND, INC.
PORTFOLIO OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
COMMON STOCKS - 71.4%
CONSUMER, CYCLICAL - 36.3%
300 CBS Corp. $ 9,825
300 Dow Jones & Company, Inc. 14,438
1,300 Hilton Hotels Corp. 24,862
100 IMS Health Inc. 7,544
7,900 Loehmann's, Inc. (a) 15,059
2,100 Midas, Inc. 65,363
3,200 Mirage Resorts, Inc. (a) 47,800
33 Nielsen Media Research, Inc. 594
5,500 Olsten Corp. 40,563
3,000 Pier 1 Imports, Inc. 29,062
1,200 Playboy Enterprises, Inc. - Class B (a) 25,125
1,100 Reader's Digest Association, Inc. (The) - Class A 27,706
6,600 Spiegel, Inc. (a) 37,950
2,000 Time Warner Inc. 124,125
2,600 Toys "R" Us, Inc. (a) 43,875
-----------
513,891
-----------
CONSUMER, NON-CYCLICAL - 10.7%
3,400 Cross (A.T.) Co. - Class A 18,275
1,900 Seagram Company Ltd. (The) 72,200
900 Tupperware Corp. 14,794
1,800 Whitman Corp. 45,675
-----------
150,944
-----------
FINANCIAL SERVICES - 10.1%
500 Chase Manhattan Corp. (The) 34,031
1,200 Citigroup Inc. 59,400
1,200 CoVest Bancshares, Inc. 14,700
800 Lehman Brothers Holdings Inc. 35,250
-----------
143,381
-----------
INDUSTRIAL - 4.8%
1,900 Diebold, Inc. 67,806
-----------
TECHNOLOGY - 8.2%
1,700 Boeing Co. (The) 55,463
1,000 Motorola, Inc. 61,062
-----------
116,525
-----------
TELECOMMUNICATIONS - 1.3%
296 ALLTEL Corp. 17,705
-----------
TOTAL COMMON STOCKS (COST $1,023,492) $ 1,010,252
-----------
<PAGE>
BOYAR VALUE FUND, INC.
PORTFOLIO OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
MONEY MARKET FUND - 23.6%
334,367 Star Treasury Fund (Cost $334,367) $ 334,367
-----------
TOTAL INVESTMENT SECURITIES - 95.0%
(COST $1,357,859) $ 1,344,619
OTHER ASSETS IN EXCESS OF LIABILITIES - 5.0% 71,208
-----------
NET ASSETS - 100.0% $ 1,415,827
===========
(a) Non-income producing security.
See accompanying notes to financial statements.
<PAGE>
BOYAR VALUE FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
Boyar Value Fund, Inc. (the Fund), is registered as a no-load, open-end,
diversified management investment company under the Investment Company Act of
1940 (the 1940 Act), and was incorporated on February 28, 1997 under the laws of
the State of Maryland. The Fund was capitalized on November 19, 1997, when the
initial 10,000 shares of the Fund were purchased at $10.00 per share. Except for
the initial purchase of shares, the Fund had no operations prior to the
commencement of operations on May 5, 1998.
The Fund seeks to provide long-term capital appreciation through investment in
equity securities which are believed by the Adviser to be intrinsically
undervalued.
The following is a summary of the Fund's significant accounting policies:
Securities valuation -- The Fund's portfolio securities are valued as of the
close of business of the regular session of the New York Stock Exchange
(normally 4:00 p.m., Eastern Time). Securities traded on a national stock
exchange or quoted by NASDAQ are valued at their closing sales price on the
principal exchange where the security is traded or, if not traded on a
particular day, at their closing bid price. Securities for which market
quotations are not readily available are valued at their fair value as
determined in good faith in accordance with consistently applied procedures
established by and under general supervision of the Board of Directors.
Share valuation -- The net asset value per share of the Fund is calculated daily
by dividing the total value of the Fund's assets, less liabilities, by the
number of shares outstanding. The offering price and redemption price per share
of the Fund is equal to the net asset value per share.
Investment income and distributions to shareholders -- Interest income is
accrued as earned. Dividend income is recorded on the ex-dividend date.
Dividends arising from net investment income are declared and paid annually. Net
realized short-term capital gains, if any, may be distributed throughout the
year and net realized long-term capital gains, if any, are distributed at least
once each year. Income dividends and capital gain distributions are determined
in accordance with income tax regulations.
Organization expenses -- Expenses of organization have been capitalized and are
being amortized on a straight-line basis over five years.
Security transactions -- Security transactions are accounted for on trade date.
Securities sold are valued on a specific identification basis.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
<PAGE>
BOYAR VALUE FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Fund's intention to declare as dividends in
each calendar year at least 98% of its net investment income (earned during the
calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
Based upon the federal income tax cost of portfolio investments of $1,357,859 as
of December 31, 1998, the Fund had net unrealized depreciation of $13,240,
consisting of $129,466 of gross unrealized appreciation and $142,706 of gross
unrealized depreciation.
2. INVESTMENT TRANSACTIONS
Purchases, other than short-term investments, amounted to $1,023,495 for the
period ended December 31, 1998. There were no sales or maturities of investment
securities, other than short-term investments, during the period.
3. TRANSACTIONS WITH AFFILIATES
The business and affairs of the Fund are supervised under the direction of the
Board of Directors which is responsible for the overall management of the Fund.
Ladenburg Thalmann Fund Management Inc. (the Manager) is responsible for
managing the daily business operations of the Fund. Boyar Asset Management, Inc.
(the Adviser) provides continuous advisory services to the Fund and Ladenburg
Thalmann & Co. Inc. (LTCI) acts as distributor of the Fund's shares. The Fund
has employed Countrywide Fund Services, Inc. (CFS) to provide administration,
accounting and transfer agent services. Certain Directors and officers of the
Fund are also officers of the Manager, the Adviser, LTCI or CFS.
MANAGEMENT AGREEMENT AND INVESTMENT ADVISORY AGREEMENT
Pursuant to a Management Agreement with the Fund, the Manager, under the
supervision of the Board of Directors, oversees the daily operations of the Fund
and supervises the performance of administrative and professional services
provided by others, including the Adviser. As compensation for its services and
the related expenses borne by the Manager, the Fund pays the Manager a
management fee, computed and accrued daily and paid monthly, at an annual rate
of 0.50% of its average daily net assets.
Pursuant to an Investment Advisory Agreement with the Manager and the Fund, the
Adviser agrees to furnish continuous investment advisory services to the Fund.
For these services, the Fund pays the Adviser an investment advisory fee, which
is computed and accrued daily and paid monthly, at an annual rate of 0.50% of
its average daily net assets.
<PAGE>
BOYAR VALUE FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
The Manager currently intends to waive its management fees and the Adviser
currently intends to waive its investment advisory fees to the extent necessary
to limit the total operating expenses of the Fund to 1.75% of average daily net
assets. In accordance with the above limitation, the Manager voluntarily waived
its management fees of $3,741 and reimbursed the Fund for $78,578 of other
operating expenses, and the Adviser voluntarily waived its investment advisory
fees of $3,741 for the period ended December 31, 1998.
Certain organization expenses of the Fund were paid directly by the Manager
prior to the Fund's initial public offering. As of December 31, 1998, $8,793
remains due to the Manager for reimbursement of such expenses.
ADMINISTRATION AGREEMENT
Under the terms of the Administration Agreement between the Fund and CFS, CFS
supplies non-investment related statistical and research data, internal
regulatory compliance services and executive and administrative services for the
Fund. CFS supervises the preparation of tax returns, reports to shareholders of
the Fund, reports to and filings with the Securities and Exchange Commission and
state securities commissions, and materials for meetings of the Board of
Directors. For these services, CFS receives a monthly fee at an annual rate of
0.15% of the Fund's average daily net assets up to $50 million; 0.125% of such
assets from $50 million to $100 million; and 0.10% of such assets in excess of
$100 million, subject to a monthly minimum fee of $1,000.
TRANSFER AGENT AGREEMENT
Under the terms of the Transfer Agent, Dividend Disbursing, Shareholder Service
and Plan Agency Agreement between the Fund and CFS, CFS maintains the records of
each shareholder's account, answers shareholders' inquiries concerning their
accounts, processes purchases and redemptions of the Fund's shares, acts as
dividend and distribution disbursing agent and performs other shareholder
service functions. For these services, CFS receives a monthly fee at an annual
rate of $18 per shareholder account, subject to a monthly minimum fee of $1,200.
In addition, the Fund pays out-of-pocket expenses including, but not limited to,
postage and supplies.
ACCOUNTING SERVICES AGREEMENT
Under the terms of the Accounting Services Agreement between the Fund and CFS,
CFS calculates the daily net asset value per share and maintains the financial
books and records of the Fund. For these services, CFS receives a monthly fee,
based on current net assets, of $2,000 from the Fund. In addition, the Fund pays
certain out-of-pocket expenses incurred by CFS in obtaining valuations of the
Fund's portfolio securities.
SHAREHOLDER SERVICING AND DISTRIBUTION PLAN
The Fund has adopted a Shareholder Servicing and Distribution Plan (the Plan)
pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that a monthly
service fee is calculated by the Fund at an annual rate of 0.25% of its average
daily net assets and is paid to LTCI, as distributor, to provide compensation
for ongoing services and/or maintenance of the Fund's shareholder accounts, not
otherwise required to be provided by the Adviser or CFS. For the period ended
December 31, 1998, the Fund incurred $1,871 of distribution expenses under the
Plan.
<PAGE>
Report of Independent Auditors
To the Shareholders and Board of Directors of
Boyar Value Fund, Inc.
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Boyar Value Fund, Inc. as of December 31, 1998,
and the related statements of operations and changes in net assets and the
financial highlights for the period from May 5, 1998 (commencement of
operations) to December 31, 1998. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
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 and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1998, by
correspondence with the custodian. 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.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Boyar
Value Fund, Inc. as of December 31, 1998, the results of its operations, the
changes in its net assets and the financial highlights for the period from May
5, 1998 (commencement of operations) to December 31, 1998, in conformity with
generally accepted accounting principles.
/s/ Ernst & Young LLP
Cincinnati, Ohio
January 29, 1999
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0001041003
<NAME> BOYAR VALUE FUND, INC.
<S> <C>
<PERIOD-TYPE> 8-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> MAY-05-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 1,357,859
<INVESTMENTS-AT-VALUE> 1,344,619
<RECEIVABLES> 1,924
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 85,579
<TOTAL-ASSETS> 1,432,122
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 16,295
<TOTAL-LIABILITIES> 16,295
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,429,067
<SHARES-COMMON-STOCK> 145,634
<SHARES-COMMON-PRIOR> 10,000
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
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<OVERDISTRIBUTION-GAINS> 0
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<DIVIDEND-INCOME> 18,031
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<APPREC-INCREASE-CURRENT> (13,240)
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</TABLE>
