BURNHAM FUND INC, N-30B-2, 1999-04-22

BURNHAM FUND INC
N-30B-2, 1999-04-22

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[LOGO]

DEAR SHAREHOLDERS: April 16, 1999

We are pleased to present to you the First Quarter Report of The Burnham
Fund for 1999.

BURNHAM FUND FIRST QUARTER DATA
- -------------------------------------------------------------

On March 31, 1999 The Burnham Fund's net asset value per share for Class A, B
and C shares was $34.55, $35.49, and $34.78, which represent increases for the
quarter of 6.4%, 6.2% and 6.2%, respectively. The Burnham Fund outperformed its
benchmarks for the quarter: the average growth and income fund was up 2.1%
according to Lipper Analytical Services, and Morningstar's Large Cap Blend Index
was up 3.4%. The Burnham Fund did not declare a first quarter dividend to
shareholders of record on March 31, 1999.

A few comments about the dividend, and a review of our investment objective are
in order at this time. In 1997 we articulated our intention to focus on the core
objective of the Burnham Fund - long term capital appreciation with income as a
secondary objective. The fund had in prior years maintained the majority of its
assets in both growth and income producing equities, and it also owned a fixed
income portfolio for yield and defensive measures. Its dividend was far above
the 'peer group' of growth and income funds. The Tax Reform Act of 1997 lowered
the tax rate on long term capital gains to 20%, but it kept dividend and short
term capital gains rates at earned income rates of up to 40%. It became
necessary for advisers to focus even more on tax efficient investment
strategies. These strategies involve reducing income and short term capital
gains, favoring long term over short term gains (and as in this quarter,
sometimes eliminating them) reducing portfolio turnover, and other measures.

The tax treatment of capital gains and income are very important issues for
shareholders to consider because they have a large impact on total return. The
Burnham Fund's tax efficiency ratio as measured by Morningstar, is at a 90.4%
average over the last three years, which means that 90.4% of the year's total
return remains with you, or is reinvested, after taxes.

FIRST QUARTER MARKET REVIEW
- -------------------------------------------------------------

The equity markets continued to march ahead in the first quarter of 1999. At
March 31, 1999, the S & P 500 was up 5.0%, and the Dow Jones Industrial Average
was up 7.0%. We attribute the strength in the quarter to positive economic
trends that, for the last several years, have driven this market. Since 1998's
year end, reported economic figures have been exceptionally strong: GDP for the
fourth quarter was up 5.9%, housing starts have increased, weekly earnings and
personal income have risen, and retail sales have been buoyant. There were
concerns in January that the Federal Reserve would raise rates in the wake of
strong economic indicators, but rates were left alone as inflation remains low.
Aiding this rally has been the resolution of President Clinton's impeachment
concerns, stabilization of Asian markets, and the probable bottoming of the
South American financial crisis.

The Burnham Fund's equity allocation as of the end of the quarter was 91.6%. The
top performing sectors of the S & P 500 for the quarter were: Financial Services
and Technology, sectors that are overweighted in The Burnham Fund. Stocks that
were exceptionally strong for the quarter include: Citigroup, Cisco Systems,
America Online, Gap Inc., Walmart, and Qwest Communications. Our weaker equities
were in the petroleum sector, but that sector of the S & P 500 was up
approximately 5.0% because energy prices worldwide have strengthened since year
end. New positions to the fund include: Sovereign Bancorp Inc., a Pennsylvania
bank holding company that is growing through acquisitions and deposits; Sun
Microsystems, the leading supplier of internet equipment; and Com21, a
telecommunications equipment manufacturer that makes modems for use in linking
home cable systems to the internet. Positions eliminated include Daimler
Chrysler and Associates First Capital.

OUTLOOK
- -------------------------------------------------------------

We hold to our premise stated in the annual report that the equity markets look
attractive at this time. We

[LOGO]

believe that the United States is in a unique environment of positive economic
forces. Notably:

A technology and communications revolution that tends to smooth out the
business cycle, improve corporate management and planning, and expand profit
margins and bottom line earnings. The internet is viewed be a revolutionizing
force in reshaping the distribution of goods and services, and which may add
considerable growth to this economic cycle;

Continued low inflation and stable interest rates at reasonable levels, the
result of continuous spending on technology, and the lack of pricing
flexibility in many industries;

Near elimination of the federal deficit;

The government's encouraging individual investing through lowering capital
gains taxes and liberalizing retirement programs;

Record breaking inflows of tax deferred and discretionary investment into
mutual funds from systematic investment programs and other retirement vehicles;

Increased level of corporate merger and acquisition activity as corporations
seek new distribution avenues both in the United States and abroad, taking
advantage of 'economies of scale';

A shrinking supply of common stock from accelerating corporate stock buyback
activity.

As of the end of the first quarter, the S & P 500 index stood at 25x1999
earnings estimates and had a dividend yield of 1.2%. By historical measures,
these are high valuations. We think that given the factors stated above, a
premium market valuation is warranted. We continue to favor companies with
earnings growth potential of at least 15% to 20% per year for five years. We
search for long term investments in the equities of companies that contribute to
the trend of improving corporate productivity and improving
competitiveness - and reducing price inflation. Technology, the internet,
e-commerce and telecommunications are the engines of improving productivity.
Companies in which we invest should have leading products, innovative management
with a shareholder-value orientation, superior financial underpinnings, and a
healthy dividend history (when possible). Companies whose stock is undervalued
relative to its past or future potential, or those which may benefit from
restructuring actions are of interest to the Fund. (We avoid 'low valuation'
industries where the earnings outlook is less certain, and earnings may
disappoint analysts.) We are also monitoring Year 2000 issues as they affect
our investments, and to the extent to which companies in the Fund are on track
with compliance.

Volatility in the markets will continue, but we believe that unless the
fundamentals of the markets change for the worse, investors will be rewarded. We
would be concerned if economic conditions changed so that we might anticipate an
upward change in the direction of interest rates. We are also concerned about
escalating involvement in the Balkans, and the reaction of US markets if NATO's
offensive includes the deployment of ground troops.

BURNHAM INVESTORS TRUST
- -------------------------------------------------------------

This is the final quarterly report that you will receive from the Burnham Fund
as an independent mutual fund. On or about May 3, The Burnham Fund Inc. shares
will be transferred 'tax-free' to The Burnham Fund portfolio of Burnham
Investors Trust, your new and expanded fund family. (The Burnham Fund's
investment objective, positions, and management will be unchanged in this
reorganization, which was approved by shareholders in November, 1998.) The new
products that will comprise the Trust include:

BURNHAM FUND - a growth and income fund;

BURNHAM DOW 30 FOCUSED FUND - a capital appreciation fund which pursues its
goal by investing in stocks represented by the Dow Jones Industrial Average and
DJIA equivalents.

[LOGO]

BURNHAM FINANCIAL SERVICES FUND - a growth fund that focuses on the financial
services sector;

BURNHAM MONEY MARKET FUND - an instrument to maintain current income consistent
with maintaining liquidity and preserving capital.

As a Burnham Fund shareholder, the new fund family 'Plain English' prospectus
will be mailed to you, along with information pertinent to you and your account.
We look forward to introducing these new products to you.

JON M. BURNHAM'S ENGAGEMENTS ON FINANCIAL NEWS PROGRAMS
- -------------------------------------------------------------

Portfolio Manager Jon Burnham appears as a regular guest on CNBC, CNN/FN and
Bloomberg Radio and Cable Television. Please feel free to call 1-800-874 - FUND
for his schedule, so you may hear his latest investment thoughts and ideas. We
would be happy to include you in our fax distribution of his schedule.

We look forward to serving your investment needs in the Burnham Investors Trust.

<TABLE>
<S> <C>
I.W. Burnham, II Jon M. Burnham,

I.W. Burnham, II Jon M. Burnham,
Chairman President &
Portfolio Manager
</TABLE>

CUMULATIVE PERFORMANCE COMPARISON

<TABLE>
<CAPTION>
CUMULATIVE % CHANGE AVERAGE ANNUALIZED % CHANGE
--------------------------------------------- ------------------------------
1 YR 3 YR 5 YR 10 YR 1 YR 3 YR 5 YR
------ ------- ------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
DOW JONES INDUSTRIAL AVERAGE
(W/DIVIDENDS) 13.16% 85.10% 199.80% 459.00% 13.16% 22.78% 24.56%
STANDARD & POOR'S 500 INDEX
(W/DIVIDENDS) 18.47% 110.03% 220.49% 467.76% 18.47% 28.06% 26.23%
MORNINGSTAR LARGE CAP BLEND AVERAGE 12.01% 84.44% 160.79% 350.68% 12.01% 22.64% 21.13%
MORNINGSTAR GROWTH & INCOME AVERAGE 7.42% 76.47% 152.11% 320.66% 7.42% 20.84% 20.31%
LEHMAN BROTHERS GOVERNMENT/CORPORATE
BOND INDEX 6.54% 25.08% 45.11% 138.54% 6.54% 7.75% 7.73%
3-MONTH CERTIFICATE OF DEPOSIT 5.00% 16.02% 29.09% 69.95% 5.00% 5.08% 5.24%

<CAPTION>
10 YR
------
<S> <C>
DOW JONES INDUSTRIAL AVERAGE
(W/DIVIDENDS) 18.78%
STANDARD & POOR'S 500 INDEX
(W/DIVIDENDS) 18.96%
MORNINGSTAR LARGE CAP BLEND AVERAGE 16.25%
MORNINGSTAR GROWTH & INCOME AVERAGE 15.45%
LEHMAN BROTHERS GOVERNMENT/CORPORATE
BOND INDEX 9.08%
3-MONTH CERTIFICATE OF DEPOSIT 5.45%
</TABLE>

The investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost. Average total return for Class A shares, assuming the
reinvestment of dividends and excluding the maximum sales charge for the one,
five and ten year periods ended March 31, 1999 were 16.48%, 19.62% and 13.98%,
respectively. Such performance assuming the imposition of the Class A shares'
maximum 5% sales charge for the same periods would have been 10.65%, 18.40% and
13.39%, respectively. For Class B and C shares, average total return for the one
and five year periods ended March 31, 1999 were 15.66%, 16.27% and 18.83%,
18.75%, respectively. For Class B and C shares, average life of class return for
the period October 18, 1993 (inception date) to March 31, 1999 were 15.80% and
15.91%, respectively. Class B shares bear a maximum contingent deferred sales
charge of 5% if they are redeemed within the first year of purchase. Such
performance assuming the imposition of the contingent deferred sales charge of
4% for the one and five year periods ended March 31, 1999, and life of class
were 11.66%, 18.73% and 15.60%, respectively. Class C shares bear a maximum
contingent deferred sales charge at a rate of 1% if they are redeemed within the
first year of purchase.

<PAGE>

<PAGE>
INVESTMENT PERSPECTIVE

EQUITY PORTFOLIO DISTRIBUTION
by Industry Classification
March 31, 1999
<TABLE>
<CAPTION>
% Total
Equity Portfolio
----------------
<S> <C>
Computer Products & Software.......... 26.7%
Banking............................... 11.0%
Telecommunications Network &
Services............................ 9.3%
Energy -- Oil & Gas Refining.......... 8.4%
Pharmaceuticals....................... 8.2%
Automotive............................ 3.9%
Telecommunications Equipment.......... 3.5%
Real Estate Investment Trusts......... 3.0%
Consumer Products..................... 2.9%
Other................................. 23.1%
-------
Total Equities........................ 100.00%
-------
-------
</TABLE>

TOTAL PORTFOLIO DISTRIBUTION BY ASSET CLASS
March 31, 1999

[PIE CHART]
Cash & Cash Equivalents 5%
Convertible Preferred Securities 1%
Corporate & Convertible Bonds 2%
Common Stocks 92%

TOP 10 EQUITY HOLDINGS
March 31, 1999

<TABLE>
<CAPTION>
Number of % of
Shares Value Net Assets
--------- ----------- ----------
<S> <C> <C> <C>
Citigroup Inc. .............. 120,000 $ 7,665,000 4.61%
Microsoft Corp. ............. 80,000 $ 7,167,500 4.31%
Cisco Systems Inc. .......... 60,000 $ 6,575,625 3.95%
America Online Inc. ......... 40,000 $ 5,840,000 3.51%
The Bank of New York Co.,
Inc. ...................... 160,000 $ 5,750,000 3.46%
Siebel Systems Inc. ......... 120,000 $ 5,677,500 3.41%
Pfizer Inc. ................. 40,000 $ 5,550,000 3.34%
Lucent Technologies Inc. .... 50,000 $ 5,387,500 3.24%
Ford Motor Company........... 90,000 $ 5,107,500 3.08%
Intel Corp. ................. 40,000 $ 4,755,000 2.86%
----------- ----------
TOP 10 EQUITY HOLDINGS $59,475,625 35.77%
----------- ----------
----------- ----------
</TABLE>

CUMULATIVE RETURN
OF A HYPOTHETICAL $10,000 INVESTMENT*
FROM INCEPTION (JUNE 15, 1975)
THROUGH MARCH 31, 1999

THE BURNHAM FUND--CLASS A
Value of hypothetical investment
on March 31, 1999: $233,687

LIFE OF FUND
CUMULATIVE PERCENT RETURN:
2,236.87%
ANNUAL COMPOUND RATE OF RETURN:
14.14%

[GRAPH]

* All performance analyses shown herein represent past performance and are not
indicative of future performance. All dividends and distributions from income
and capital gains have been continually reinvested. Performance does not
include the imposition of the maximum 5% sales charge. Performance for other
classes of the Fund will be greater or less than the data shown in the graph
and tables based on differences in sales charges and fees paid by shareholders
investment in the different classes of the Fund.

AVERAGE ANNUAL TOTAL RETURN
Period ended March 31, 1999

<TABLE>
<S> <C>
- --------------------------------------
One Year...................... 16.48%
Three Years................... 22.16%
Five Years.................... 19.62%
Ten Years..................... 13.98%
Fifteen Years................. 15.16%
Twenty Years.................. 15.14%
</TABLE>

<PAGE>

<PAGE>
[LOGO]

STATEMENT OF NET ASSETS
March 31, 1999
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE(c)
- --------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 91.64%
AEROSPACE 0.91%
General Motors Corporation
Class H....................... 30,000(a) shs. $1,513,125
------------
AIR FREIGHT 1.12%
FDX Corporation. ............... 20,000(a) 1,856,250
------------
AUTOMOTIVE 3.59%
Ford Motor Company.............. 90,000 5,107,500
General Motors Corp. ........... 10,000 868,750
------------
5,976,250
------------
BANKING 10.08%
The Bank of New York Co.,
Inc. ......................... 160,000 5,750,000
Chase Manhattan Bank............ 12,000 975,750
Citigroup Inc. ................. 120,000 7,665,000
Fleet Financial Group Inc. ..... 40,000 1,505,000
Sovereign Bancorp Inc. ......... 70,000 861,875
------------
16,757,625
------------
BROADCASTING 0.99%
CBS Corp. ...................... 40,000 1,637,500
------------
COMPUTER PRODUCTS & SOFTWARE 24.45%
America Online Inc. ............ 40,000(a) 5,840,000
Cisco Systems Inc. ............. 60,000(a) 6,575,625
Dell Computer Corp. ............ 80,000(a) 3,272,500
EMC Corp. ...................... 35,000(a) 4,471,250
International Business Machines
Corp. ........................ 25,000 4,431,250
Microsoft Corp. ................ 80,000(a) 7,167,500
Siebel Systems Inc. ............ 120,000(a) 5,677,500
Sun Microsystems Inc. .......... 15,000 1,875,469
Yahoo Inc. ..................... 8,000 1,345,500
------------
40,656,594
------------
CONSUMER PRODUCTS 2.66%
General Electric Co. ........... 40,000 4,425,000
------------
DIVERSIFIED CHEMICALS 0.83%
Monsanto Co. ................... 30,000 1,378,125
------------

<CAPTION>
NUMBER OF
SHARES VALUEC
- --------------------------------------------------------------
<S> <C> <C>
ENERGY - OIL & GAS REFINING 7.66%
BP Amoco PLC.................... 30,000 $ 3,028,125
Enron Corp. .................... 15,000 963,750
Exxon Corporation. ............. 50,000 3,528,125
Mobil Corporation. ............. 40,000 3,520,000
Texaco Inc. .................... 30,000 1,702,500
------------
12,742,500
------------
ENGINEERING/INDUSTRIAL
PRODUCTION 0.06%
Thermolyte Corp. ............... 10,000(a)(b) shs. 100,000
------------
FINANCIAL SERVICES 2.82%
American Express Co. ........... 40,000 4,700,000
------------
FOOD AND BEVERAGE PRODUCTS 2.61%
American Italian Pasta Co. ..... 100,000(a) 2,500,000
The Coca Cola Company........... 30,000 1,841,250
------------
4,341,250
------------
HEALTHCARE FACILITIES 0.68%
Rehabcare Group Inc. ........... 75,000(a) 1,129,688
------------
INSURANCE 1.78%
Allstate........................ 80,000 2,965,000
------------
OIL DRILLING 1.33%
Diamond Offshore Drilling
Inc. ......................... 70,000 2,213,750
------------
PASSENGER CRUISE LINES 0.88%
Carnival Corp................... 30,000 1,456,875
------------
PHARMACEUTICALS 7.54%
Merck & Co. .................... 50,000 4,009,375
Pfizer Inc. .................... 40,000 5,550,000
Warner Lambert Inc. ............ 45,000 2,978,437
------------
12,537,812
------------
PERSONAL CARE PRODUCTS 0.72%
Gillette Co. ................... 20,000 1,188,750
------------
PUBLISHING 0.66%
McGraw-Hill Cos., Inc. ......... 20,000 1,090,000
------------
REAL ESTATE INVESTMENT TRUSTS 2.75%
Chateau Communities Inc. ....... 40,000 1,100,000
Franchise Finance Corp. ........ 70,000 1,474,375
Golf Trust of America........... 45,000 1,006,875
National Golf Properties,
Inc. ......................... 45,000 990,000
------------
4,571,250
------------
</TABLE>

<PAGE>

[Logo]
STATEMENT OF NET ASSETS
March 31, 1999
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE(c)
- --------------------------------------------------------------
<S> <C> <C>
RETAIL STORES 2.12%
Gap, Inc. ...................... 25,000(a) shs.$ 1,682,813
Walmart Stores Inc. ............ 20,000 1,843,750
------------
3,526,563
------------
SECURITY SERVICES 0.73%
Kroll - O'Gara Co. ............. 45,000(a) 1,212,188
------------
SEMICONDUCTORS 2.86%
Intel Corp. .................... 40,000 4,755,000
------------
TELECOMMUNICATION EQUIPMENT 3.24%
Lucent Technologies Inc. ....... 50,000 5,387,500
------------
TELECOMMUNICATIONS NETWORK
AND SERVICES 8.57%
Com 21 Inc. .................... 50,000 1,314,062
ECI Telecom Ltd. ............... 60,000 2,101,875
GTE Corp. ...................... 40,000 2,420,000
Qwest Communication
International................. 50,000(a) 3,604,687
SBC Communications Inc. ........ 60,000 2,827,500
Telephone & Data Systems Inc. .. 35,000 1,973,125
------------
14,241,249
------------
TOTAL COMMON STOCKS
(cost: $77,307,509)........... 152,359,844
------------
CONVERTIBLE PREFERRED
SECURITIES 1.47%
PASSENGER CRUISE LINES 1.47%
Royal Caribbean Cruises,
Conv. Preferred Cl. `A'....... 20,000 2,447,500
------------
TOTAL CONVERTIBLE PREFERRED
SECURITIES (cost:
$1,084,100)................... 2,447,500
------------
CORPORATE CONVERTIBLE BONDS 0.74%
DATA PROCESSING 0.74%
Adaptec, Inc. 4.75% sub. deb.
Conv. 2/1/04.................. 1,000,000 828,750
Data General Corp., 6% sub. deb.
5/15/04....................... 500,000 405,625
------------
TOTAL CORPORATE CONVERTIBLE
BONDS (cost: $1,271,000)...... 1,234,375
------------

PRINCIPAL
AMOUNT VALUEC
- --------------------------------------------------------------
<S> <C> <C>
CORPORTATE BONDS 0.81%
HOTELS 0.81%
Host Marriott Corp.,9.375% Notes
6/15/07....................... $1,265,000 $ 1,346,086
------------
TOTAL CORPORATE BONDS (cost:
$1,273,606)................... 1,346,086
------------
COMMERCIAL PAPER 5.29%
American Express Credit Corp.,
4.87% 04/07/99................ 1,600,000 1,600,000
General Electric Credit Corp.
4.70% 04/05/99................ 2,200,000 2,200,000
General Motors Acceptance Corp.
4.89% 04/06/99................ 5,000,000 5,000,000
------------
TOTAL COMMERCIAL PAPER
(cost: $8,800,000)............ 8,800,000
------------
TOTAL INVESTMENTS
(cost: $89,736,215) 99.95% 166,187,805
CASH AND OTHER ASSETS,
LESS LIABILITIES 0.05% 74,484
------ -------------
NET ASSETS 100.00% $166,262,289
====== =============
CLASS A SHARES
(Equivalent to $34.55 per share
based on 4,710,228 shares of
Capital Stock outstanding)
CLASS B SHARES
(Equivalent to $35.49 per share
based on 76,509 shares of
Capital Stock outstanding)
CLASS C SHARES
(Equivalent to $34.78 per share
based on 22,778 shares of
Capital Stock outstanding)
</TABLE>

- -------------------------------------------------------------

(a) Non-income producing security.

(b) A unit consisting of one share of common stock of Thermolyte Corporation and
one redemption right.

(c) Investments in securities traded on a national securities exchange are
valued at the last reported sales price on the primary exchange on which
they are traded on the last business day of the period. Securities traded in
the over-the-counter market (including securities listed on exchanges whose
primary market is believed to be over-the-counter) and listed securities for
which no sale is reported on that date are valued at the mean between the
last reported bid and asked price. Short-term money market instruments which
have a maturity of more than 60 days are valued at prices based on market
quotations for securities of similar type, yield and maturity. Short-term
money market instruments which have a maturity of 60 days or less are valued
at amortized cost which approximates value.

<PAGE>

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<PAGE>

OFFICERS OF THE FUND
I.W. Burnham, II Chairman
Jon M. Burnham, President
and Chief Executive Officer
Michael E. Barna, Executive Vice President
Chief Financial Officer, Treasurer and Secretary
Debra B. Hyman, Executive Vice President
Ronald M. Geffen, Vice President
Frank A. Passantino, Vice President and
Assistant Secretary
Louis S. Rosenthal, Vice President

INVESTMENT ADVISOR
Burnham Asset Management Corporation
1325 Avenue of the Americas
New York, New York 10019

DISTRIBUTOR
Burnham Securties Incorporated
1325 Avenue of the Americas
New York, New York 10019
Telephone: 1 (800) 874-FUND

CUSTODIAN
Investors Fiducuary Trust Co.
801 Pennsylvania
Kansas City, Missouri 64105

LEGAL COUNSEL
Hale & Dorr LLP
60 State Street
Boston, Massachusetts 02109

TRANSFER AGENT
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110

SERVICING AGENT
Boston Financial Data Services, Inc.
2 Heritage Drive
North Quincy, Massachusetts 02171

http://www.burnhamfunds.com

This report has been prepared for the information of
shareholders of The Burnham Fund Inc. and is not
authorized for distribution to prospective investors
unless preceded or accompanied by an effective
prospecuts that includes information regarding the
Fund's objectives, policies, management, records and
other information.

QUARTERLY REPORT

March 31, 1999

- ------------------------
CONTINUITY KNOWLEDGE

Burnham
----
Fund

GROWTH INCOME
- -------------------------

Burnham Securities Inc.
PRINCIPAL DISTRIBUTOR