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BEACON HILL
MUTUAL FUND, INC.
A NO-LOAD FUND
Financial Report
For the Six Months Ended
December 31, 1995 (unaudited)
DEAR SHAREHOLDER:
Beacon Hill Mutual Fund posted a double digit gain during first half of the
Fund's fiscal year. The net asset value of your shares increased 13.0% during
the six months ended December 31, 1995. The stock market, which is best
represented by the S&P 500 Index, gained 14.4% during this same six month period
and the Dow Jones Industrial Average gained 13.7%. See Financial Highlights for
additional information concerning performance.
Following up on our commitment to upgrade the administration of your fund to
meet current mutual fund industry standards, we have modernized our new account
application and have added an Automatic Monthly Investment program. Automatic
Monthly Investing offers you the option of purchasing additional Beacon Hill
Mutual Fund shares by automatically transferring funds from your checking or
savings account on a monthly basis. There is no charge for this service, but you
must agree to transfer a minimum of $50 per month. We would be happy to discuss
Automatic Monthly Investing with you and to send you the appropriate application
upon request.
As I reported to you during 1995, we are working diligently to increase
shareholder value and to grow the Fund through performance and additional
funding. We are also committed to maintaining the high level of fundamental
research that has served you well for many years past. These efforts will
continue.
I am sure we will continue to enjoy a prosperous and fruitful association
together and as always we are availalble to answer any of your questions. Your
recommendation of Beacon Hill Mutual Fund to friends, relatives and other
associates is appreciated.
Sincerely,
/s/ Bernard Zimmerman
Bernard Zimmerman
President
February 20, 1996
<PAGE>
BEACON HILL MUTUAL FUND, INC.
INVESTMENT PORTFOLIO DECEMBER 31, 1995 (UNAUDITED)
NUMBER VALUE
OF SHARES (NOTE 2)
--------- --------
COMMON STOCKS
BEVERAGES (10.1%)
9,000 PepsiCo, Inc. .................... $ 502,875
----------
ELECTRICAL EQUIPMENT (4.9%)
3,000 Emerson Electric Company ......... 245,250
----------
FOOD PROCESSING (6.5%)
6,000 Heinz (H. J.) Company ............ 198,750
4,000 Sara Lee Corp. ................... 127,500
----------
326,250
----------
HOSPITAL SUPPLIES (13.6%)
8,000 Abbott Labs ...................... 334,000
4,000 Johnson & Johnson ................ 342,500
----------
676,500
----------
HOUSEHOLD PRODUCTS (10.0%)
6,000 Procter & Gamble Company ......... 498,000
----------
PHARMACEUTICALS (20.5%)
2,000 American Home Products Corp. ..... 194,000
5,000 Bristol-Myers Squibb ............. 429,375
6,000 Merck & Co. Inc. ................. 394,500
----------
1,017,875
----------
PUBLISHING AND
SPECIALTY RETAILING (8.4%)
10,000 Harcourt General Inc. ............ $ 418,750
----------
RETAIL -- DRUG (2.4%)
4,000 Walgreen Co. ..................... 119,500
----------
RETAIL -- FOOD (4.0%)
7,000 Weis Markets, Inc. ............... 197,750
----------
WHOLESALE -- FOOD (7.2%)
11,000 Sysco Corp. ...................... 357,500
----------
TOTAL INVESTMENTS IN
COMMON STOCKS (87.6%)
(identified cost, $579,150) .... 4,360,250
EXCESS OF OTHER ASSETS OVER
TOTAL LIABILITIES (12.4%) ...... 614,681
----------
NET ASSETS (100%) ............ $4,974,931
==========
See notes to financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED
1995 JUNE 30,
(UNAUDITED) 1995
--------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Investment loss -- net ............ $ (22,108) $ (41,564)
Realized gain on sale of
investments ..................... -- 235,070
Increase in unrealized appreciation
of investments .................. 584,500 828,784
---------- ----------
Net increase in net assets from
operations ...................... 562,392 1,022,290
CAPITAL GAIN DISTRIBUTION ............. -- (232,467)
CAPITAL SHARE TRANSACTIONS (Note 3) ... 118,578 (703,456)
---------- ----------
TOTAL INCREASE IN NET ASSETS .......... 680,970 86,367
NET ASSETS:
Beginning of period ............... 4,293,961 4,207,594
---------- ----------
End of period (including
accumulated net investment loss
of $467,236 and $445,128) ...... $4,974,931 $4,293,961
========== ==========
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
SIX MONTHS ENDED YEAR ENDED JUNE 30
DECEMBER 31, 1995* -------------------------------------------------------
(UNAUDITED) 1995* 1994* 1993* 1992* 1991
------------------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ......... $32.86 $27.17 $30.52 $31.83 $31.51 $30.09
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ........................ (0.16) (0.30) (0.17) (0.21) (0.32) (0.24)
Net gains (losses) on securities
(both realized and unrealized) ........... 4.43 7.88 (1.53) (0.51) 2.00 3.46
------ ------ ------ ------ ------ ------
Total from investment operations ....... 4.27 7.58 (1.70) (0.72) 1.68 3.22
LESS DISTRIBUTIONS FROM REALIZED
CAPITAL GAINS .............................. -- (1.89) (1.65) (0.59) (1.36) (1.80)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ............... $37.13 $32.86 $27.17 $30.52 $31.83 $31.51
====== ====== ====== ====== ====== ======
CUMULATIVE TOTAL RETURN ...................... 13.0% 28.2% (5.6%) (2.2)% 5.3% 10.7%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ... $4,975 $4,294 $4,208 $5,253 $5,039 $4,367
Ratio of expenses to average net assets** .. 3.5%*** 3.0% 2.7% 2.6% 2.8% 3.5%
Ratio of net loss to average net assets .... (1.0%)*** (1.0%) (0.6%) (0.7%) (1.0%) (1.2%)
Portfolio turnover rate .................... 0.0% 0.0% 0.0% 2.5% 5.5% 3.3%
*December 31, 1995 and June 30, 1995, 1994, 1993 and 1992 per share figures
are based on average shares outstanding during the period.
**For the six months ended December 31, 1995, the Fund's expenses are
calculated without reduction for fees paid indirectly.
***Computed on an annualized basis.
</TABLE>
See notes to financial statements.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995 (UNAUDITED)
ASSETS:
Investments (Note 2):
Common stocks, at value (identified cost, $579,150) ... $4,360,250
Cash .................................................... 630,918
Dividends receivable .................................... 6,190
Other assets ............................................ 410
----------
Total assets .................................... 4,997,768
----------
LIABILITIES:
Payable to affiliate -- management fees (Note 4) ........ 12,047
Accrued expenses ........................................ 10,790
----------
Total liabilities ............................... 22,837
----------
NET ASSETS -- Equivalent to $37.13 per share based on 133,986 shares of capital
stock outstanding at December 31, 1995
(Note 3) ................................................. $4,974,931
==========
NET ASSETS CONSIST OF:
Paid-in capital ......................................... $1,658,869
Accumulated net investment loss ......................... (467,236)
Undistributed net realized gain on investments .......... 2,198
Unrealized appreciation of investments .................. 3,781,100
----------
Total ........................................... $4,974,931
==========
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE ..................................................... $37.13
======
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1995 (UNAUDITED)
INVESTMENT INCOME:
Income -- dividends ................................. $ 45,970
Expenses:
Management fees (Note 4) ........... $22,818
Transfer agent fees ................ 17,800
Custodian fees ..................... 13,538
Legal fees (Note 4) ................ 10,080
Printing ........................... 6,511
Audit fees ......................... 5,796
Other expenses ..................... 3,057
-------
Total expenses ................. 79,600
Less fees paid indirectly (Note 2) ..... (11,522) 68,078
------- ----------
Investment loss -- net .................. (22,108)
INCREASE IN UNREALIZED APPRECIATION OF INVESTMENTS ...... 584,500
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .... $ 562,392
=========
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED DECEMBER 31, 1995 (UNAUDITED)
1. BUSINESS AND ORGANIZATION
Beacon Hill Mutual Fund, Inc. (the "Fund") is organized as a Massachusetts
corporation and is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end, management investment company.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements.
Valuation of Securities -- Investments in common stocks traded on a national
securities exchange are valued at the last reported sales price on the last
business day of the accounting period; common stocks 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.
Security Transactions and Income -- Security transactions are accounted for
on the trade date. Dividend income is recorded on the ex-dividend date. For
purposes of determining net realized gains and losses, the Fund uses the
identified-cost method of accounting for investment securities.
Federal Income Taxes -- No provision has been made for federal income taxes
as it is the Fund's policy to distribute substantially all of its taxable income
and comply with the provisions of the Internal Revenue Code applicable to
regulated investment companies. The identified cost of investments owned at
December 31, 1995 was the same for both accounting and federal income tax
purposes.
Fees Paid Indirectly -- The Fund's custodian bank calculates its fee based
on the Fund's average daily net assets. The fee is reduced according to a fee
arrangement, which provides for custody fees to be reduced based on a formula
developed to measure the value of cash deposited with the custodian by the Fund.
This amount is shown as a reduction of expenses on the statement of operations.
3. CAPITAL STOCK
At December 31, 1995, there were 1,500,000 shares of $1.00 par value capital
stock authorized. Transactions in capital stock were as follows:
SIX MONTHS ENDED
DECEMBER 31, 1995 YEAR ENDED JUNE 30,
(UNAUDITED) 1995
--------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT
------- ----------- ------- -----------
Shares sold .................. 4,999 $ 175,126 17,357 $ 514,443
Shares issued for reinvestment
of distributions ........... -- -- 7,102 222,338
Shares redeemed .............. (1,672) (56,548) (48,647) (1,440,237)
------ ----------- ------- -----------
Net increase (decrease) ...... 3,327 $ 118,578 (24,188) $ (703,456)
====== =========== ======= ===========
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund's management contract with Beacon Hill Management, Inc. (the
"Company") provides for investment advice and other services. The management fee
is computed on a quarterly basis at a rate of 0.25% of the average of the net
asset values of the Fund at the close of business on the last business day of
each month throughout the quarter, or at an approximate annual rate of 1%.
Management fees aggregated $22,818 for the six months ended December 31, 1995.
The Clerk of the Fund is an of-counsel attorney to the firm of Nutter,
McClennen & Fish, LLP, the Fund's legal counsel. During the six months ended
December 31, 1995, the Fund incurred $10,080 in legal fees payable to Nutter,
McClennen & Fish, LLP.
The President and Treasurer of the Fund also serves in that capacity for the
Company, and is a director in both organizations.
<PAGE>
5. FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost and unrealized appreciation in value of the investment securities
owned at December 31, 1995, as computed on a federal income tax basis, are as
follows:
(UNAUDITED)
---------
Aggregate cost ........................................... $ 579,150
==========
Gross and net unrealized appreciation .................... $3,781,100
==========
6. INVESTMENT TRANSACTIONS
There were no purchases or sales of investments for the six months ended
December 31, 1995.
<PAGE>
BEACON HILL MUTUAL FUND, INC.
75 FEDERAL STREET, BOSTON, MA 02110-1904
Board of Directors
EUGENE F. DEMARK FRANCIS M. TROTTA
NICHOLAS A. SICA BERNARD ZIMMERMAN
Officers
BERNARD ZIMMERMAN, President and Treasurer
IRVING J. HELMAN, Clerk
Investment Adviser
BEACON HILL MANAGEMENT, INC.
75 Federal Street
Boston, Massachusetts 02110-1904
Counsel
NUTTER, MCCLENNEN & FISH, LLP
One International Place
Boston, Massachusetts 02110-2699
Custodian, Dividend Disbursing
and Transfer Agent
STATE STREET BANK & TRUST CO.
P.O. Box 8500
Boston, Massachusetts 02266-8500
1-(800) 343-0529
Auditors
DELOITTE & TOUCHE LLP
125 Summer Street
Boston, Massachusetts 02110-1617
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the Fund. The report is not
authorized for distribution to prospective investors in the Fund unless preceded
or accompanied by an effective prospectus.
