<TABLE>
<CAPTION>
THE WALL STREET FUND, INC.
SCHEDULE OF INVESTMENTS
June 30, 1996 (Unaudited)
<C> <C><S> <C>
COMMON STOCKS - 89.90%
Market
Shares Value
BASIC MATERIALS - 6.96%
10,000 Barrick Gold Corp. $ 271,250
180,000+ Federation Resources 17,028
20,000+ ICC Technologies Inc. 116,875
75,000+ International Precious Metals Corp. 337,500
15,000+ Jilin Chemical Ind. 275,625
2,000 Nucor Corp. 101,250
35,800+ Paget Mining Ltd. 14,120
1,133,648
CAPITAL GOODS - 9.88%
10,000+ Checkmate Electronics Inc. 145,625
65,000+ Flow Intl. Corp. 515,938
5,000+ Kenetek Information Systems Inc. 51,875
15,000+ Micro Component Technology 53,437
2,000 Motorola Inc. 125,750
10,000+ Nematron Corp. 85,000
10,000+ Nicollet Process 44,375
6,500 Pall Corp. 156,813
3,000+ Solectron Corp. 113,625
40,000+ Stevens Graphics Series A 100,000
5,000+ Thermatrix Inc. 63,750
2,000+ Waters Corporation. 66,000
2,000+ Zygo Corp. 86,250
1,608,438
CONSUMER - CYCLICAL - 6.72%
4,000 Home Depot Inc. 216,000
1,000 McDonalds Corp. 46,750
2,000 Nordstrom Inc. 89,250
15,000+ Pixar 290,625
6,000+ Shuffle Master Inc. 89,625
3,000 Tiffany & Co. 219,000
1,500 Wal-Mart Stores Inc. 38,062
15,000+ Zomax Optical Media 104,063
1,093,375
CONSUMER-NON-CYCLICAL - 17.58%
3,500+ Alza Corp. 95,812
1,500+ Amgen Inc. 80,812
8,000 Amway Japan Ltd. ADR 199,000
1,500+ Biochem Pharm. Inc. 56,156
10,000+ Centocor Inc. 299,375
10,000 Cephalon Inc. 196,250
3,000 Columbia/HCA Healthcare Corp. 160,125
2,500+ Genzyme Corp. 125,938
4,500+ Healthcare Compare Corp. 219,094
20,000 Liposome Co. Inc. 375,000
5,000 Mariner Health Co. 92,500
4,500 Merck & Co. 290,813
1,000 Pfizer Inc. 71,375
30,000+ Ribi Immunechem Res. Inc. 142,500
15,000 Vencor Inc. 457,500
2,862,250
DIVERSIFIED - 1.35%
598,000+ International UNP Holdings Ltd. 219,346
COMMON STOCKS (continued)
Market
Shares Value
ENERGY - 3.89%
5,000 Anadarko Petroleum Corporation $290,000
4,000 Dresser Industries 118,000
2,000+ Petroleum Geo Service ADR 56,625
5,000 Unocal Corp 168,750
633,375
FINANCIAL - 1.83%
10,000 Allmerica Financial Corp. 297,500
SERVICES - 11.86%
10,750 Cai Wireless Systems Inc. 98,766
2,000 Cintas Corp. 106,250
5,000+ EIS International Inc. 126,562
49,500+ Executive Telecard Ltd 646,594
3,171 First Data Corp. 252,491
6,000+ Inference Corp. "A" 142,500
5,000 Metromedia International Group 61,250
35,000+ Qualmark Corporation 150,938
4,000+ Renaissance Solutions Inc. 113,000
10,750+ Strategic Distribution Inc. 84,320
40,000+ U-Ship Inc. 147,500
1,930,171
TECHNOLOGY - 29.28%
10,000 Adobe Systems Inc. 356,875
15,000 Amnex Inc. 55,312
4,000+ Analog Devices Inc. 102,000
10,000 Celeritek Inc. 113,750
6,000+ Data Works Corp. 108,000
10,000+ Digital Equipment Corp. 450,000
100,000+ Executone Info. Systems 268,750
5,000 Glasgal Comm Inc. 46,562
7,500+ Harbinger Corp. 207,187
2,000 Intel Corp 146,875
10,000+ Mattson Technology, Inc. 107,500
16,000+ Meta Software Inc. 272,000
8,000+ Metatools, Inc. 187,000
500+ Microsoft Corp 60,031
2,510+ Millicom Int'l. Cellular S.A. 118,754
15,000+ Mobile Telecom Tech. Corp. 218,437
1,000 Netscape Communication 62,375
10,000 Netstar Inc. 196,250
5,000+ Novadigm Inc. 74,375
5,000 Octel Communications Corp. 98,125
7,750+ Oracle Systems Corp. 305,641
5,000+ Parametric Technologies 216,562
3,000+ Platinum Software 21,563
10,142+ Radius Inc. 27,257
5,000 Rational Software Corp. 269,688
1,052+ Seagate Technology 47,340
2,000 Sun Micro Systems 117,750
3,000+ Synopsys Inc. 119,625
3,000+ UUNET Technologies Inc. 198,375
8,000+ Vitesse Semi-Conductor Corp. 192,500
4,766,459
See notes to financial statements.
<PAGE>
THE WALL STREET FUND, INC.
SCHEDULE OF INVESTMENTS (continued)
June 30, 1996 (Unaudited)
COMMON STOCKS (continued)
Market
Shares Value
UTILITIES - 0.55%
2,000 GTE Corp $ 89,500
WARRANTS - 0.00%
875+ American Satellite Network Inc. Warrants 0
TOTAL COMMON STOCKS
(cost $12,528,342) 14,634,062
PREFERRED STOCKS - 0.63%
2,750 Liposome Convertible $1.93
(cost $44,215) 102,094
BONDS - 9.10%
Principal Market
Value Value
CONVERTIBLE SUBORDINATED BONDS - 9.10%
$200,000 Air & Water Technologies
8.00% 05/15/2015 176,000
150,000 Alza Corp.
5.00% 05/01/2006 145,875
300,000+ Bonneville Pacific Corp.
7.75% 08/15/2009 327,000
500,000 Executone Information Systems
7.50% 03/15/2011 442,500
100,000 IMC Global Inc.
6.25% 12/01/2001 125,125
300,000 VLSI Technology Inc.
8.25% 10/01/2005 265,125
TOTAL BONDS
(cost $886,003) 1,481,625
TOTAL INVESTMENTS
(cost $13,458,560) 99.63% 16,217,781
OTHER ASSETS LESS LIABILITIES 0.37% 60,372
TOTAL NET ASSETS 100.00% $16,278,163
<FN>
(1) Federal Tax Information: At June 30, 1996, the net unrealized appreciation
based on cost for Federal Income tax purposes of $13,470.543 was as
follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of
value over cost. $3,714,626
Aggregrate gross unrealized depreciation for all
investments in which there was an excess of cost
over value (967,388)
Net unrealized appreciation $2,747,238
+ Non-income producing security.
</FN>
</TABLE>
<TABLE>
<CAPTION>
THE WALL STREET FUND, INC.
SCHEDULE OF ASSETS AND LIABILITIES
June 30, 1996 (Unaudited)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $13,458,560) (Note 1) $ 16,217,781
Cash 0
Receivables:
Investment securities sold $ 272,161
Fund shares sold 50,000
Interest and dividends 31,986
354,147
Other assets 220
Total Assets 16,572,148
LIABILITIES:
Payables:
Investment securities purchased 277,120
Investment adviser fee 10,813
Other payables and accrued
expenses 6,062
Total Liabilities 293,995
Net Assets $ 16,278,153
Net Assets Consist of:
Capital stock at par value $1,758,077
Additional paid in capital 9,227,223
Unrealized appreciation on
investments 2,759,221
Accumulated net realized
gains 2,533,632
Net Assets $16,278,153
Net asset value and
redemption price per share
($16,278,153/1,758,077 shares
of capital stock outstanding)
(Note 4) $9.26
Maximum offering price per share
(100/96 of $9.26) $9.65
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE WALL STREET FUND, INC.
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996 (Unaudited)
<S> <C> <C>
INVESTMENT INCOME:
Income:
Dividends 29,917
Interest 67,770
Total income 97,687
Expenses:
Investment adviser fees
(Note 3) $ 57,620
Transfer agent fees and
dividend paying expenses 13,818
Custodian fees 9,000
Accounting services 24,504
Reports to shareholders 5,635
Professional fees 13,296
Directors fees and expenses 9,785
Registration fees 3,540
Miscellaneous 4,690
Total Expenses 141,888
Less:
Reimbursed expenses
(Note 3) (1,962)
Net expenses 139,926
Net investment loss (42,239)
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
(Note 1)
Net realized gains from
investment transactions 2,493,956
Net decrease in unrealized
appreciation of investments (581,848)
Net gains on investments 1,912,108
Net increase in net assets
resulting from operations $1,869,869
</TABLE>
<TABLE>
<CAPTION>
THE WALL STREET FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<S> <C> <C>
For the For the
six months ended year ended
June 30, December 31,
1996 1995
(Unaudited) (Audited)
Net investment loss $ (42,239) $ (48,766)
Net realized gains from
investment transactions 2,493,956 2,612,789
Net increase (decrease) in unrealized
appreciation of investments (581,848) 1,347,456
Net increase (decrease) in net assets
resulting from operations 1,869,869 3,911,479
Distributions to shareholders
from:
Net realized gains from
investment transactions
($1.80 and .21 per share,
respectively) 0 (2,567,131)
Net capital share transactions
(Note 4) 25,496 1,958,367
Total increase (decrease)
in net assets 1,895,365 3,302,715
NET ASSETS:
Beginning of period 14,382,788 11,080,073
End of period $ 16,278,153 $ 14,382,788
</TABLE>
<PAGE>
THE WALL STREET FUND, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1996 (Unaudited)
(1) Summary of significant accounting policies:
The Fund is registered under the Investment Company Act of 1940,
as amended, as a diversified, open-end management investment company. The
following is a summary of significant accounting policies consistently followed
by the Fund in the preparation of its financial statements. These policies are
in conformity with generally accepted accounting principles for investment
companies. The preparation of financial statements in conformity with generally
accepted accounting principles requires management o 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 revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
(A) Securities Valuations - The value of investments is based on
the published last sale prices on national securities exchanges, or, in the
absence of recorded sales, at the mean between the closing bid and asked prices
on such exchanges or over-the-counter. At June 30, 1996, the Fund held a
security for which a market quotation was not readily available and which was
valued in good faith by the Board of Directors. This security had a value of
$327,000 representing 2.01% of the Fund's net assets.
(B) Federal Income Taxes - No provision for federal income taxes has been made
in the accompanying financial statements, since the Fund intends to continue
to comply with the provisions of the Internal Revenue Code applicable to
regulated investment companies and to distribute to its shareholders
substantially all of its net investment income and net realized gains on
investments.
(C) Other - Security transactions are accounted for on the date securities are
purchased or sold. Dividend income and distributions to shareholders are
recorded on the ex-dividend date. The net realized gains and losses are
determined on the identified cost basis. The Fund may periodically make
reclassifications among certain of its capital accounts as a result of the
timing and characterization of certain income and capital gains distributions
determined annually in accordance with federal tax regulations which may differ
from generally accepted accounting principles. During the six months ended
June 30, 1996 the Fund reclassified the net investment loss of $42,239 to
additional paid-in capital.
(2) Purchases and sales securities:
Purchases and sales of investment securities, during the six months ended
June 30, 1996 aggregated $13,416,969 and $13,223,029, respectively.
(3) Investment advisory fees and other:
The advisory agreement provides for advisory fees of 1/16 of 1%
monthly (equivalent to 3/4 of 1% per annum) of the first $125,000,000 of
average net assets of the Fund. The present advisory agreement also provides
for the adviser to reimburse the Fund for any expenses (including the advisory
fee but excluding taxes, interest and brokerage fees and extraordinary expenses
incurred in connection with any matter not in the ordinary course of business
of the Fund) over 2% of the first $10,000,000, 1 1/2% of the next $20,000,000
and 1% of any balance of the average daily net asset value.
For the six months ended June 30, 1996, Wall Street Management Corporation
(WSMC) earned investment advisory fees of $57,620 and reimbursed the Fund
$1,962 for expenses.
The adviser also serves as the Fund's principal underwriter. For
the six months ended June 30, 1996, WSMC received $4,085 as its portion of the
sales charge on sales of shares of the Fund. Certain of the officers and
directors of the Fund are officers and directors of WSMC.
The Fund has arranged for American Data Services, Inc., of which the Fund's
Secretary and Treasurer is a principal, to prepare the accounting records and
perform administrative and transfer agent services for the Fund. Costs incurred
totalled $38,322 for the six months ended June 30, 1996.
Morse, Williams & Co., Inc. (MWC), 100% owner of WSMC, performs
administrative services for the Fund. This includes costs of shared office
expenses, rent, telephone charges and supply expenses. For the six months
ended June 30, 1996, no remuneration was paid by the Fund to MWC.
(4) Capital stock:
At June 30, 1996 there were 5,000,000 shares of $1 par value
capital stock authorized. Transactions in capital stock during the six months
ended June 30, 1996 and the year ended December 31, 1995 were as follows:
<TABLE>
<S> <C> <C> <C> <C>
1996 1995
Shares Amount Shares Amount
Shares sold 37,865 $ 347,083 40,412 $ 347,329
Shares issued for
reinvestment of
distribution from
realized gains 0 0 320,091 2,432,692
Shares redeemed (36,896) (321,587) (95,787) (821,654)
Net increase 969 $ 25,496 264,716 $1,958,367
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(For a fund share outstanding throughout each year)
<S> <C> <C> <C> <C> <C> <C>
For the
six months ended For the year ended December 31,
June 30, 1996 1995 1994 1993 1992 1991
Net asset value, beginning of year $ 8.19 $7.42 $8.03 $7.60 $7.27 $5.54
Income from investment operations
Net investment income (loss) (0.02) (0.03) (0.02) (0.02) 0.01 0.03
Net realized and unrealized gains (losses)
on investments 1.09 2.60 (0.38) 1.00 0.54 2.95
Total from investment operations 1.07 2.57 (0.40) 0.98 0.55 2.98
Less distributions
Dividends from net investment income 0.00 0.00 0.00 0.00 (0.01) (0.03)
Distribution from realized gains
from security transactions 0.00 (1.80) (0.21) (0.55) (0.21) (1.21)
Return of capital distribution 0.00 0.00 0.00 0.00 0.00 (0.01)
Total distributions 0.00 (1.80) (0.21) (0.55) (0.22) (1.25)
Net asset value, end of year $ 9.26 $8.19 $7.42 $8.03 $7.60 $7.27
Total return** 26.27%* 36.50% (4.86%) 13.17% 7.61% 54.36%
Ratios/supplemental data
Net assets, end of year (in 000's) 16,278 14,383 11,080 11,561 11,202 11,032
Ratio of expenses to average net assets 1.86%* 2.02% 2.12% 2.04% 2.15% 2.10%
Ratio of expenses to average net assets,
net of reimbursement 1.83%* 1.90% 1.96% 1.96% 1.97% 1.98%
Ratio of net investment income (loss)
to average net assets (0.58%)* (0.50%) (0.47%) (0.31%) (0.08%) 0.30%
Ratio of net investment income (loss)
to average net assets,
net of reimbursement (0.55%)* (0.38%) (0.31%) (0.23%) 0.09% 0.43%
Portfolio turnover rate 85.55% 143.27% 89.01% 107.22% 112.47% 159.52%
<FN>
** Annualized
** Excluding sales charge.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
PRINCIPAL INVESTMENT CHANGES
For the six months ended June 30, 1996
NEW POSITIONS
Allmerica Financial Corp., Amnex Inc., Anadarko Petroleum Corporation., Applied
Microsystems, Celeritek Inc., Checkmate Electronics Inc., EIS International
Inc., Glasgal Comm. Inc., Kenetek Information Systems Inc., Meta Software Inc.,
Metromedia International Group, Metatools, Inc., Nematron Corp., Nordstrom Inc.,
Nicollet Process, Netscape Communication, Pixar, Qualmark Corporation, Seagate
Technology, Thermatrix Inc., U-Ship Inc., Waters Corporation, Worthington Inds.,
Zomax Optical Media. Convertible Bonds: Alza Corp. 5.00%, 05/01/2006.
ELIMINATIONS
Abbott Labs, Adaptec Inc., ADT Limited, Applied Microsystems, Aura Systems
Inc., Boeing Co., B A B Holdings, Inc., Basic Petroleum Intl. Ltd., Brio
Industries Inc., Boston Scientific Corp., BIO Technology General Corp., CCH
Inc. CL B, Cerner Corp., Datalogix International, Fluor Corp., Groupo Mexicano
Desarollo ADR, Heart Technology Inc., Hewlett Packard Co., Immulogic Pharm.
Corp., Intersolv Inc., Medimmune Inc., Measurex Corp., New Plan Realty Trust,
Northwest Pipe Co., Office Depot Inc., Orphan Med. Inc., Picturetel Corp.,
Parker & Parsley Petroleum Co., PDT Inc., Read-Rite Corp., Repap Enterprises
Inc. Common, Singer Co., Sheldahl Inc., Shiva Corp., Tipperary Corp., United
Meridian, Ventritex Inc., Video Sentry Corp., Worthington Inds., Youth Services
Intl. Inc. Convertible Bonds: Browning Ferris Industries 6.25% 08/15/2012,
Centocor 7.25% 02/01/2001, Seagate Conv. 6.75% 05/01/2012.
This report is not to be construed as an offering for the sale of The Wall
Street Fund, Inc., or as a solicitation of an offer to buy any such shares,
unless accompanied by an effective prospectus setting forth details of the Fund
including the sales charge and other material information.
<PAGE>
Dear Fellow Shareholders:
The first half of the year saw a continued rise in equity prices as shown by the
S&P 500 total return of +10.0% and the Russell 2000 growth index total return of
+10.4%. Your fund had a good first half enjoying an appreciation of +13.1% in
net asset value per share.
The equity market benefited from a record inflow of an estimated $123 billion
into stock mutual funds during the first six months of the year. The bond
market's decline seems to have been triggered by a fear of future price
inflation on the part of investors and speculators. While a rising tide lifts
all ships, the equity market may have to rest a bit to digest its price gains.
Stock selection appears to be the key to the balance of the year. While equity
markets are likely to be volatile during the next quarter we expect a solid
finish in the fourth quarter. It is somewhat questionable whether the massive
inflow of money into equity mutual funds will continue at the same pace of over
$20 billion every month.
On the fixed income side, we believe markets have swung enough on the downside
to be attractive investments in the near future. We do not see a large
resurgence in price inflation. Real GDP growth in the US rebounded from +2.2% in
1Q96 to an estimate of slightly over 3% in 2Q96. We continue to anticipate
steady growth with moderate inflation. History is replete with long cycles of
low price inflation such as we have now without big quarterly fluctuations. More
and more countries continue to add productive capacity which increases the
impact of technology on the global economy without adding to wage inflation.
While the outlook overall is positive, there are signs of concern regarding
subpar real growth due to weak consumer spending. In real terms, personal
disposable income is only growing at about 2% - a clear sign the U.S. economy is
not overheating. Nevertheless this leads to a widening disparity between the
well-to-do and those in the middle and lower income strata. The U.S. consumer is
not in the best financial shape: consumer borrowing and debt delinquency are at
all time highs and personal bankruptcy filings have risen.
This being an election year, the party that goes for growth is likely to be the
next one in power. Fundamentals do not justify Federal Reserve tightening nor do
election year politics. To the extent that efforts to foster above average
growth come from non-inflationary tax cuts the future economic outlook remains
very positive; to the extent there is an over reliance on monetary policy,
markets will likely be more volatile.
Your fund is positioned in a well diversified set of investments with strong
future earnings growth potential. We anticipate continued improvement in the net
asset value by year end as well as a meaningful capital gain distribution in
December.
Should you have any questions please do not hesitate to call me or E-mail me
through out new internet site at our Universal Resource Locator
"http://www.thewallstreetfund.com".
Sincerely,
/s/ Robert P. Morse
Robert P. Morse
President
July 31, 1996
<PAGE>
DIRECTORS
John F. Carr, Emeritus
Clifton H.W. Maloney
Robert P. Morse, Chairman
Sharon A. Queeney
Harlan K. Ullman
OFFICERS
Robert P. Morse, President
Michael R. Linburn, Vice President
Allen C. Post, Vice President
Michael Miola, Secretary, Treasurer
INVESTMENT ADVISER
WALL STREET MANAGEMENT CORPORATION
230 Park Avenue
New York, New York 10169
CUSTODIAN
THE BANK OF NEW YORK
90 Washington Street, 11th Floor
New York, New York 10286
TRANSFER AGENT
AMERICAN DATA SERVICES
24 West Carver Street
Huntington, New York 11743
INDEPENDENT ACCOUNTANTS
COOPERS & LYBRAND L.L.P.
1301 Avenue of the Americas
New York, New York 10019
THE WALL STREET FUND INC.
SEMI-ANNUAL REPORT
June 30, 1996
(Unaudited)
