Ensign Investors Value Fund
Semiannual Report
June 30, 2000
The year 2000 has been very good for Ensign Investors, Inc. I am pleased to
announce the Fund's net asset value per share increased by 10.3% percent
through June 30, 2000 and stood at $1.31, up from $1.19 at December 31, 1999.
During this same period the Dow Jones Industrial Average was down 9.1% and the
S&P 500 Index was down 1.0%.
Even more exciting is the Fund's performance over the last 18 months. The
average annual total return for the Fund in this period was 13.90% compared
to 13.01% for the S&P 500. What this means is that $1,000 invested in the
Fund on December 31, 1998 would have grown to $1,218 by June 30, 2000 while
the same amount invested in the S&P 500 would have increased to $1,204.
At June 30, 2000 approximately 99 percent of the Fund's assets were invested
in equities.
Enclosed is the company's report for the first six months of 2000.
Market Conditions
After spectacular performances by the Dow Jones Industrial Average, the S&P
500 Index and the NASDAQ for the last three years, the equity markets have
taken a breather in 2000.
The decline is at least in part the result of interest rate tightening by the
Federal Reserve. The Fed believes rapid economic growth leads to inflation
and is attempting to slow growth without sending the economy into a
significant decline. It's still too early to declare success, but thus far
economic growth has slowed without stalling. This should be good for the
market, but we may not have the major indexes increasing by 20% to 35% a year
going forward.
For the past year or two an exceptionally high premium has been placed on
companies dealing with the Internet or using the Internet to do business.
The appeal of these companies is centered on hopes of tremendous price
appreciation over short periods of time. However, many of the Internet and
so called ".com" companies have declined significantly in value in 2000.
Reality has set in for many investors who now realize many of these new
startups will not survive.
Overall the economy continues to grow, albeit at a slower pace, the
transition in our economy and society as a result of technological advances
continues at a significant pace, and strong well-managed companies in many
sectors of the economy continue to make solid advances.
Ensign Investors Value Fund
The Fund's investment objectives exclude it from investing in market fads or
speculative high-risk ventures. The Fund's objectives guide the Fund to
invest in mid- to large-size companies that have the potential for growth and
that are valued at the lower end of their historical trading parameters.
This is a great time to be investing. We will continue to invest in well-
established companies with great prospects for the future. We believe the
rewards for long-term investing are significant.
Sincerely,
Stanley M. Wells
President
Ensign Investors Value Fund's charter establishes an investment strategy of
long-term capital appreciation through investments in mid- to large-
capitalization stocks. Dividend income is a secondary objective of the fund;
however, the payment of large dividends in relation to a company's earnings
is not a consideration. Management considers the payment of dividends by a
company as an indication that the company has reached a certain level of
maturity in its growth and as an indication of the company's confidence in
its ability to continue to generate sales and earnings.
ENSIGN INVESTORS VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES (Unaudited) At June 30, 2000
Assets
Investment securities, at value $638,040
Interest bearing money market accounts 6,205
Interest receivable 69
_______
Total assets, at value 644,314
Liabilities
Accrued management fee (Note 2) 512
Other liabilities 150
_______
Total liabilities 662
Net Assets Applicable to Outstanding Shares $643,652
Capital Shares, $0.10 par value
Authorized 500,000,000
Outstanding (rounded to the nearest share) 491,163
Net Asset Value Per Share $1.3105
Net Assets Consist of:
Capital (par value and paid-in surplus) 514,583
Undistributed net investment income -1,225
Net unrealized appreciation (depreciation) 153,490
Net realized investment gain on investments -23,196
________
$643,652
STATEMENT OF INCOME AND EXPENSES
Six months ended June 30, 2000
Investment Income:
Interest 395
Dividend 2,523
_______
Total Income 2,918
Expenses:
Management fees (note 2) 3,203
Other Expenses 940
_______
Total expenses 4,143
_______
Net investment income -1,225
_______
Realized and Unrealized Gain on Investments
Net realized gain during the period on investments -23,196
Net unrealized appreciation (depreciation) on investments 84,500
_______
Net Increase in Net Assets Resulting from Operations $60,079
_______
STATEMENT OF CHANGES IN NET ASSETS
Six months ended June 30, 2000
Increase (Decrease) in Net Assets From Operations
Net investment income $ -1,225
Net realized gain on investments -23,196
Net unrealized appreciation on investments 84,500
________
Net increase in net assets resulting from operation 60,079
Distributions to Shareholders 0
Capital Share Transactions
Proceeds from shares sold 12,275
Payments for shares redeemed 1,000
________
Net Increase in Net Asset 71,354
Net Assets
Beginning of period 572,298
End of Period 643,652
________
Undistributed net investment income -1,225
Transactions in shares of the Fund:
Sold (rounded to nearest share) 10,016
Redeemed 815
Net increase 9,201
SECURITIES PORTFOLIO
% of Assets 6/30/99
Medical/Dental Supplies: 8.9%
Biotechnology General Corp. 0.6 3,956
Medtronic, Inc. 1.5 9,963
St. Jude Medical, Inc. 1.4 9,175
Stryker Corp. 5.4 35,000
Telecommunication: 22.0%
L.M. Ericsson Telephone Co. 7.5 48,000
JDS Uniphase Corp. 3.7 23,975
Lucent Technologies, Inc. 0.9 5,925
Motorola, Inc. 3.2 20,344
Texas Instruments, Inc. 2.1 13,737
WorldCom, Inc. 4.6 29,819
Pharmaceutical: 10.7%
Bristol Meyers Squibb 1.8 11,656
Pfizer, Inc. 2.2 14,409
Schering-Plough Corp. 1.6 10,100
SmithKline Beecham 5.1 32,594
Hi-Tech: 41.3%
Applied Materials Corp. 2.8 18,125
BMC Software, Inc. 2.8 18,234
Cisco Systems, Inc. 2.0 12,712
Dell Computer Corp. 5.4 34,519
EMC Corp. 4.8 30,775
Intel Corp. 8.3 53,475
Linear Technology Corp. 2.0 12,787
LSI Logic, Corp. 1.7 10,825
Microsoft Corp. 5.0 32,000
Novell, Inc. 0.7 4,625
Oracle 2.6 16,812
Synopsys, Inc. 3.2 20,738
Financial Services: 2.3%
Charles Schwab Corp. 0.8 5,044
Comdisco, Inc. 1.0 6,694
Knight TradingCorp. 0.5 2,981
Business Information Services: 4.4%
Robert Half International 4.4 28,500
Regional Banks: 4.3%
Zions Bancorporation 4.3 27,525
Scientific and Technical Instruments: 4.3%
American Power Conversion Corp. 3.2 20,406
Food Distribution Services: 3.2%
Sysco Corp. 2.0 12,609
Temporary Investments and Cash: 1.0% 1.0 6,174
________
Total Securities Held: 100% 100.0 644,213
1. Summary of Significant Accounting Policies
Organization
The Company was incorporated on August 29, 1996 under the laws of the State
of Utah and on December 2, 1998 was registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management company. The
following is a summary of significant accounting policies followed by the
Company in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
Securities Valuation
The value of securities traded on any national exchange has been determined
at their last sales price on the month end date. Investments are stated at
value based on latest quoted market prices or at fair value as determined by
the Board of Directors.
Federal Income Taxes
The Company's intention is to be taxed under Subchapter M of the Internal
Revenue Code, which means that to the extent its income is distributed to
shareholders it pays no income tax.
Cash and Cash Equivalents
The Company considers all nongovernment debt instruments of nine months or
less to be cash or cash equivalents.
Other
As is common in the industry, security transactions are accounted for on the
date the securities are purchased or sold. Dividend income and distributions
to shareholders are recorded on the ex-dividend date. Discounts and premiums
on securities purchased are amortized over the life of the respective
security.
Concentration of Credit
The Company is a diversified open-end management company (Mutual Fund)
investing in common stocks, preferred stock, and securities convertible into
common stocks. The fund's value is subject to fluctuations based on market
conditions, interest rates, and other economic, business, and political news.
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires the plan administrator to make estimates and
assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results may differ from those estimates.
2. Management and Advisory Fees with Related Parties
The Company has contracts with Wells Investment Services, Inc. wherein Wells
Investment Services, Inc. acts as an investment advisor to the Company.
Under the Advisory and Service Contract, the Company pays the advisor a
monthly fee computed on the average daily net assets of the Fund at the
annual rate of 1.0% of the average daily net assets of the Fund up to $50
million, plus 0.75% of the next $450 million, and 0.5% of the excess over
$500 million. The fee will be calculated daily and paid at the end of each
month after services have been rendered. The Advisor has voluntarily agreed
to limit total expenses to 1.5 percent of the Company's average net assets
computed on a daily basis.
3. Financial Instruments
None of the Company's financial instruments are held for trading purposes.
The Company estimates that the fair value of all financial instruments at
June 30, 2000 does not differ materially from the aggregate carrying values
of its financial instruments recorded in the accompanying balance sheet. The
estimated fair value amounts have been determined by the Company using
available market information and appropriate valuation methodologies.
Considerable judgement is necessarily required in interpreting market data to
develop the estimates of fair value, and, accordingly, the estimates are not
necessarily indicative of the amounts that the Company could realize in a
current market exchange.
