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[GINTEL LOGO]
GINTEL FUND
SEMIANNUAL REPORT TO
SHAREHOLDERS
JUNE 30, 1996
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GINTEL FUND
The investment objective is to achieve capital appreciation through investing
in equities. The minimum initial investment in the Gintel Fund is $5,000,
including IRA's and Keogh's. There is no minimum on additional investments.
SUMMARY OF INVESTMENT RESULTS*
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<S> <C>
1996(6 mos.) 16.7%
1995 31.0%
1994 -16.5%
1993 2.0%
1992 24.7%
1991 15.6%
1990 -6.7%
1989 23.8%
1988 29.4%
1987 -14.3%
1986 20.8%
1985 20.0%
1984 -2.6%
1983 34.3%
1982 34.1%
1981 (6/10/81-12/31/81) 7.6%
Average Annual Total
Return Since Inception 14.6%
</TABLE>
*Investment results are net of expenses, with
dividends and capital gains reinvested.
Past results offer no assurance as to future performance. 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. The Fund's prospectus contains more complete information and should be
read carefully.
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July 12, 1996
Fellow Shareholders:
Net asset value per share increased 8.4% in the second quarter of 1996 and
16.7% for the six months year-to-date. This strong investment performance was
well above the general market indices and better than the results achieved by
most other mutual funds so far this year. In fact, according to Lipper
Analytical Services, Inc., we rank as number 4 out of 103 growth funds in the
$100 million-$250 million category; number 36 out of all 705 growth funds; and
number 362 out of 5932 long-term taxable funds. Needless to say, we are
pleased to be able to report these excellent results, coming as they do on top
of the 31% gain in net asset value per share achieved in 1995. It's nice to be
up amongst the best-performing funds once again after the humbling experience
of 1994.
Our short-term outlook is somewhat more conservative than it has been in the
recent past. We hope to keep a steady hand on the tiller while charting an
investment course through potentially treacherous waters. As we enter the
second half of 1996, we see a mature, slower-growth economy facing increasing
inflationary pressures and possibly somewhat higher short- and long-term
interest rates. Long-deferred wage increases and a more militant union
leadership should result in higher labor costs and increased pressures on
profit margins. The consequence could be little or no growth in corporate
profits, except for those able to increase efficiency and productivity through
technological advances. The pending presidential and congressional elections
could be an additional market depressant until the outcome is known in early
November.
Some of the recent stock market gyrations cannot be comforting for any rational
investor. Mutual fund and other professional money managers are finding it
extremely difficult to manage carefully the ever-increasing amounts of money
pouring into their hands from the investing public. More than ever, investment
managers are forced to focus on short-term results by clients who have come to
expect large short-term gains from playing the stock market and from the army
of consultants who now rate everyone's short-term performance. The market has
been flooded with hot new issues and money is pouring into small-cap mutual
funds because that's where the action is. But, let one of these companies
hiccup and its stock price will plummet, as professional money managers dump
their shares mercilessly.
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Too many investors today buy and sell stocks not knowing and little caring
what they own and why they own it. Chartists, momentum players, and program
traders, among other short-term investors, create excessive volatility in stock
prices, aided by Wall Street Research staffs, one of whose major criteria for
a stock's valuation has to do with how closely a company may reach "the
Street's" consensus estimates of quarterly earnings. Our financial performance
in the first half of 1996 was not the result of investing in hot new issues,
speculative small growth companies, or leveraging the portfolio. We stayed
with sound, long-term investments that increased in value for the right reasons
and found new stocks that also performed well.
Gintel Fund shareholders should know that we are planning to ask Gintel ERISA
Fund shareholders to vote on merging the ERISA Fund into Gintel Fund towards
summer's end. This will create a combined $140 million fund, reduce fee costs
for the shareholders of both funds, save taxes for Gintel Fund shareholders,
and enable the investment staff to manage the Funds' assets more efficiently.
For the past seven years we have been offering U.S. Trust's money market funds
as a convenience to our shareholders. In view of Chase Manhattan Bank's
purchase of U.S. Trust Company's mutual fund division, we have decided to
switch from the U.S. Trust-managed Excelsior Money Fund and Excelsior
Government Money Fund to comparable money market funds managed by Chase
Manhattan Bank. Shareholders who currently have money market accounts with us
will be receiving documentation in the next few weeks with respect to this
transfer from U.S. Trust's Excelsior Funds to either Vista Cash Management Fund
or Vista Federal Money Market Fund.
In order to better inform shareholders about our major investments, we have
enclosed synopses of the Funds' principal holdings.
We thank our shareholders once again for staying with us through thick and thin
and are delighted that at this point in time your patience and confidence has
paid off.
Cordially,
/s/ ROBERT M. GINTEL /s/ CECIL A. GODMAN, III /s/ EDWARD F. CARROLL
Robert M. Gintel Cecil A. Godman, III Edward F. Carroll
Chairman Investment Manager Investment Manager
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GINTEL FUND Statement of Net Assets As of June 30, 1996
(Unaudited)
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<CAPTION>
NUMBER
OF MARKET
SHARES COST** VALUE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
MORTGAGE BANKING (22.1%)
------------------------
750,000 Capstead Mortgage Corporation $15,985,177 $20,906,250
100,000 Federal National Mortgage Association 834,712 3,350,000
DIVERSIFIED MANUFACTURING(15.3%)
--------------------------------
700,000 Chart Industries, Inc. 3,205,420 9,887,500
50,000 Tyco International LTD 1,278,937 2,037,500
100,000 The Singer Co. N.V. 2,208,014 2,025,000
25,000 Johnson Controls, Inc. 1,195,850 1,737,500
30,000 The Black & Decker Corporation 750,260 1,158,750
PAPER -- FOREST PRODUCTS (8.7%)
-------------------------------
150,000 Union Camp Corporation 6,750,336 7,312,500
52,500 Weyerhaeuser Company 2,101,374 2,231,250
TECHNOLOGY-RELATED (7.7%)
-------------------------
300,000 Intergraph Corporation 3,954,002 3,637,500
100,000 C-Cube Microsystems Inc.* 3,055,796 3,300,000
75,000 CheckFree Corporation* 1,566,438 1,490,625
SECURITY PROTECTION SYSTEMS (6.3%)
----------------------------------
200,000 Checkpoint Systems, Inc. 758,778 6,875,000
PHARMACEUTICAL -- HEALTH CARE (5.4%)
------------------------------------
70,000 Schering-Plough Corporation 1,638,868 4,392,500
75,000 GranCare, Inc.* 1,058,736 1,490,625
SAVINGS & LOAN (3.8%)
---------------------
120,000 Charter One Financial Corporation 868,021 4,185,000
RETAIL-RELATED (3.6%)
---------------------
100,000 Price/Costco Inc.* 1,498,688 2,162,500
100,000 Mac Frugals Bargains Close-Outs Inc.* 1,262,500 1,775,000
INSURANCE (3.0%)
----------------
75,000 Mercury General Corporation 3,208,125 3,281,250
CONSTRUCTION & ENGINEERING (2.9%)
---------------------------------
48,000 Fluor Corporation 2,223,496 3,138,000
COPPER PRODUCER (2.8%)
----------------------
50,000 Phelps Dodge Corporation 2,992,527 3,118,750
TEXTILE--APPAREL (1.9%)
------------------------
665,000 Oneita Industries, Inc.+* 8,414,133 2,078,125
DIVERSIFIED CHEMICAL PRODUCER (1.8%)
------------------------------------
25,000 E. I. du Pont de Nemours and Company 1,396,470 1,978,125
</TABLE>
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GINTEL FUND Statement of Net Assets (continued) As of June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
NUMBER
OF MARKET
SHARES COST** VALUE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BROADCAST EQUIPMENT (1.7%)
--------------------------
100,000 Vertex Communications Corporation* 1,550,000 1,862,500
OILFIELD SERVICES (1.7%)
------------------------
50,000 Newpark Resources, Inc.* 779,065 1,837,500
SOFT DRINKS (1.3%)
------------------
40,000 PepsiCo. Inc. 696,562 1,415,000
AIRFREIGHT (1.2%)
-----------------
50,000 Airborne Freight Corporation 1,266,564 1,300,000
ENVIRONMENTAL SERVICES (0.6%)
-----------------------------
100,000 OHM Corporation* 693,749 700,000
Security Sold Short (-6.3%) (6,402,907) (6,875,000)
Miscellaneous Securities*** (1.8%) 1,780,486 2,008,187
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Total Common Stocks (87.3%) 68,570,177 95,797,437
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
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<S> <C> <C> <C>
CASH EQUIVALENTS
7,333,000 Chase Securities, Inc. Repurchase Agreement
5.15% due 7/1/96(Collateralized by U.S.
Government Obligations) 7,333,000 7,333,000
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Total Cash Equivalents (6.7%) 7,333,000 7,333,000
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Total Investments (94.0%) $75,903,177 103,130,437
===========
Other assets net of liabilities (6.0%) 6,641,692
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Net Assets Applicable to Outstanding Shares (100.0%) $109,772,129
====================================================================================================================
Net asset value per share--based on 6,118,707 shares of
beneficial interest (offering and redemption price) $17.94
====================================================================================================================
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* Non-income producing investments
** Cost basis for Federal income tax purposes
*** Includes 13 investments, some of which are non-income producing
investments.
+ Robert Gintel is Chairman of the Board of Oneita Industries and owns 16% of
its common stock. As a result, Oneita may be deemed to be an affiliate of
the Fund.
The accompanying notes to financial statements are an integral part hereof.
<PAGE> 7
GINTEL FUND Statement of Operations June 30, 1996
(Unaudited)
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INVESTMENT INCOME:
Dividends $1,393,990
Interest 377,629
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Total investment income 1,771,619
EXPENSES:
Administrative services fee (Note D) $579,962
Investment advisory fee (Note C) 487,743
Trustees' fees 13,921
State taxes 994
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Total expenses 1,082,620
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NET INVESTMENT INCOME 688,999
NET REALIZED GAIN ON INVESTMENTS 16,211,902
NET DECREASE IN UNREALIZED APPRECIATION OF INVESTMENTS (1,081,806)
-------------
NET GAIN ON INVESTMENTS 15,130,096
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $15,819,095
=============
</TABLE>
The accompanying notes to financial statements are an integral part hereof.
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GINTEL FUND Statements of Changes in Net Assets (Unaudited)
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<CAPTION>
Six Months Year
Ended 6/30/96 Ended 12/31/95
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<S> <C> <C>
OPERATIONS:
Net investment income (loss) $688,999 $ (60,026)
Net realized gain on investments 16,211,902 5,682,632
Net increase (decrease) in unrealized appreciation
of investments (1,081,806) 19,306,875
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Net increase in net assets from operations 15,819,095 24,929,481
DISTRIBUTIONS TO SHAREHOLDERS:
Investment income -- (51,107)
Net realized gains from investment -- (5,689,197)
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Net decrease from distributions -- (5,740,304)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued 2,052,325 1,577,646
Reinvestment of dividends -- 3,363,935
Cost of shares repurchased (4,838,148) (15,669,171)
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Net decrease from capital
share transactions (2,785,823) (10,727,590)
Total Increase (Decrease) 13,033,272 8,461,587
Net Assets - Beginning of Year 96,738,857 88,277,270
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Net Assets - End of Period $109,772,129 $96,738,857
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NET ASSETS CONSIST OF:
Capital Stock $75,529,047 $78,314,870
Undistributed net investment gains (losses) 422,707 (266,292)
Undistributed net realized gains
from security transactions 16,265,952 54,050
Unrealized appreciation on investments 17,554,423 18,636,229
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$109,772,129 $96,738,857
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The accompanying notes to financial statements are an integral part hereof.
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GINTEL FUND Condensed Financial Information
(Per Share Income and Capital Changes*) (Unaudited)
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<CAPTION>
Year Ended December 31
Six Months -------------------------------------------------------------
Ended 6/30/96 1995 1994 1993 1992
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<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $15.37 $12.46 $15.11 $16.45 $13.48
Income from
Investment Operations
Net investment income (loss) .11 (.01) .04 (.06) .09
Net realized and unrealized
gain (loss) on securities 2.46 3.86 (2.53) .37 3.23
- ------------------------------------------------------------------------------------------------------------------------
Total from Investment Income 2.57 3.85 (2.49) .31 3.32
- ------------------------------------------------------------------------------------------------------------------------
Less: Distributions
Net investment income -- .01 .04 .10
Capital gains -- .93 .12 1.65 .25
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Total Distributions -- .94 .16 1.65 .35
- ------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $17.94 $15.37 $12.46 $15.11 $16.45
========================================================================================================================
Total Return 16.7% 31.0% -16.5% 2.0% 24.7%
- ------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period $109,772,129 $96,738,857 $88,277,270 $136,110,294 $164,620,218
Ratio of operating expenses to
average net assets (Note D) 2.1%** 2.3%** 2.4%** 2.2%** 1.7%**
Ratio of net investment
income (loss) to average net assets 1.3% (.1%) .3% (.3%) .9%
Portfolio turnover rate 75.1% 55.4% 69.6% 50.8% 56.0%
Shares outstanding, end of period 6,118,707 6,295,777 7,085,466 9,008,802 10,009,980
</TABLE>
* The above per share information is based upon a daily average of shares
outstanding, which has been restated to reflect the 5.241835/1 split on
September 25, 1992
** The Fund's expense ratio includes brokerage commissions on portfolio
transactions paid for under the Fund's Administrative Services fee, and,
therefore, may appear higher than those of other mutual funds as well as
for the Fund in prior years. Other mutual funds do not include brokerage
commissions in their operating expenses, but instead add them to the cost
of securities purchased or deduct them from the proceeds of securities
sold.
<PAGE> 10
GINTEL FUND Notes to Financial Statements June 30, 1996
(Unaudited)
(NOTE A) -- ORGANIZATION:
The Gintel Fund (the "Fund") is a Massachusetts business trust formed under the
laws of the Commonwealth of Massachusetts with authority to issue an unlimited
number of shares of beneficial interest.
(NOTE B) -- SIGNIFICANT ACCOUNTING POLICIES:
1. Security Valuation:
Investments in securities are valued at the last reported sales price on the
last business day of the period, or in the absence of a recorded sale, at the
mean of the closing bid and asked price on that date. Short-term investments
are valued at cost which approximates market value.
2. Federal Income Taxes:
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its taxable income and long-term gains to its
shareholders. Therefore, only a nominal Federal income tax provision is
required.
3. Other:
As is common in the industry, security transactions are accounted for on the
trade date. Dividend income and distributions to shareholders are recorded on
the ex-dividend date.
Realized gain or loss on security transactions is determined on the basis of
first-in, first-out or specific identification.
(NOTE C) -- INVESTMENT ADVISORY AGREEMENT:
The Fund has entered into an Investment Advisory Agreement with Gintel Equity
Management, Inc., a related party, which provides for an annual fee of 1% to be
paid quarterly, based on the daily value of the Fund's net assets during the
preceding quarter. The fee will be reduced for any fiscal year, if the Fund's
expenses, as defined, exceed certain limitations.
(NOTE D) -- ADMINISTRATIVE SERVICES AGREEMENT:
The Fund has entered into an Administrative Services Agreement which provides
that in consideration for the services provided by Gintel & Co., the Fund's
Distributor and a related party, and the payment by the Distributor of
substantially all of the Fund's expenses, including but not limited to
brokerage commissions and operating expenses (but excluding the Investment
Advisor's fees, the fees paid to non-interested Trustees, certain transaction
costs, interest, taxes and extraordinary expenses), the Distributor will
receive a fee payable at the beginning of each quarter based on average daily
net assets during the preceding quarter, at an annual rate of 1.25% of the
first $50 million of the average daily net assets of the Fund, 1.125% of the
next $50 million of the average daily net assets and 1.0% of the average daily
net assets in excess of $100 million.
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GINTEL FUND Notes to Financial Statements -- continued June 30, 1996
(Unaudited)
(NOTE E) -- LINE OF CREDIT:
The Fund has a bank line of credit of $15,000,000. Interest is payable at
prime. Loans are collateralized by securities owned by the Fund. At June 30,
1996 the Fund had no outstanding borrowings.
(NOTE F) -- OTHER MATTERS:
1. Investments
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<S> <C>
Unrealized appreciation at June 30, 1996 $34,642,677
Unrealized depreciation at June 30, 1996 (7,415,417)
-------------
$27,227,260
=============
FOR THE SIX MONTHS ENDED JUNE 30, 1996
Purchases of securities other than short-term investments $31,572,202
Sales of securities other than short-term investments $37,980,070
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2. Capital Stock: (in shares)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
---------------- -----------------
<S> <C> <C>
Shares issued 116,410 115,098
Shares reinvested -- 220,009
Shares repurchased (293,480) (1,124,796)
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Net decrease (177,070) (789,689)
============= ==============
</TABLE>
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GINTEL FUND TRUSTEES AND OFFICERS
- --------------------------------------------------------------------------------
Robert M. Gintel Chairman, Trustee, and Chief Executive Officer
Chairman and Chief Executive Officer, Gintel
Equity Management, Inc.; Senior Partner,
Gintel & Co. Limited Partnership; Chairman
and Director, Oneita Industries; Vice
Chairman and Director, XTRA Corporation;
Chairman, Trustee and Chief Executive
Officer, Gintel ERISA Fund.
Thomas H. Lenagh Trustee
Financial Consultant; formerly Chairman and
Chief Executive Officer of Greiner
Engineering Co.; Director, Adams Express
Co., USLife Corp., ICN Biomedics, Inc., SCI
Systems, Inc., Irvine Sensors Corp., CML
Inc., Clemente Global, Rexhall Inc.;
Trustee, Gintel ERISA Fund.
Francis J. Palamara Trustee
Business Consultant; previously Director and
Executive Vice President of ARA Services,
Inc.; formerly Executive Vice President and
Chief Operating Officer of the New York
Stock Exchange, Inc.; Director, Glenmede
Fund, XTRA Corporation, Central Tractor Farm
& Country; Trustee, Gintel ERISA Fund.
Russel R. Taylor Trustee
Associate Professor of Management and
Marketing, Director of H.W. Taylor Institute
of Entrepreneurial Studies, College of New
Rochelle; Founder of Russel Taylor, Inc.;
Trustee, Gintel ERISA Fund.
Stephen G. Stavrides Trustee, President, and Treasurer
President, Gintel Equity Management, Inc.;
General Partner and Chief Operating Officer,
Gintel & Co. Limited Partnership; Trustee,
President, and Treasurer, Gintel ERISA Fund.
Donna K. Grippe Secretary and Assistant Treasurer
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INVESTMENT ADVISOR GINTEL GROUP
Gintel Equity Management, Inc. Chase Global Funds Services Company
6 Greenwich Office Park P. O. Box 2798
Greenwich, CT 06831-5197 Boston, MA 02208-2798
203 622-6400 800 344-3092
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