<PAGE> 1
GINTEL FUND
Annual Report to Shareholders
December 31, 1999
<PAGE> 2
GINTEL FUND Summary of Investment Results
The investment objective is to achieve capital appreciation through investing in
equities. The minimum initial investment in the Gintel Fund is $5,000, except
for IRA's and Keogh accounts where the minimum initial purchase is $2,000. There
is no minimum on additional investments.
Summary of Investment Results *
<TABLE>
<CAPTION>
Gintel Fund S&P 500 Russell 2000
----------- ------- ------------
<S> <C> <C> <C>
1999 81.52% 21.03% 21.26%
1998 -10.95% 28.57% -2.55%
1997 29.22% 33.34% 22.36%
1996 31.04% 22.99% 16.49%
1995 30.97% 37.53% 28.45%
5-Year
Compounded
Rate of Return 29.09% 28.45% 16.69%
10-Year
Compounded
Rate of Return 15.18% 18.20% 13.40%
</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.
<PAGE> 3
January 10, 2000
Fellow Shareholders:
We had an outstanding year!
Fueled by our heavily overweighted position in CheckFree, Gintel Fund's
net asset value per share rose 81.5 % in 1999. Needless to say, this result was
well ahead of all the popular indices used to measure stock market performance,
and well ahead of the results reported by practically all other mutual funds.
It boosted our Fund's five-year compounded annual rate of return at the
end of 1999 to 29.1%. It also earned us a Five-Star rating from Mutual Funds
Magazine, as noted in the attached letter, and a feature article in Investor's
Business Daily, which is also included with this report.
We believe our superior investment results over the last five years serve
to validate our nonconventional, nondiversified approach to investing in
equities, whereby one's best ideas are heavily overweighted in a portfolio.
Notwithstanding the perceived risk in this approach that gives pause to some
potential investors in our Fund, it is an investment style that has worked well
for us over a period of many years. Those who have stayed with us have been
rewarded handsomely for their patience and loyalty.
Our Fund is unique in a number of other ways, too. It does not easily fall
into any particular mold or pattern by which mutual funds are usually measured
or categorized. For example, we do not select securities by size or market
capitalization; nor do we select by market sector or by any particular
investment discipline, such as value versus growth, etc. Our willingness to look
beyond our basic value orientation and invest in several high-growth,
high-valuation technology companies, such as CheckFree, C-Cube, Evercel,
FuelCell Energy, and others, helped our performance substantially last year.
CheckFree is the kind of investment gem one dreams of finding. It is a
superbly managed company with a very bright future. We found it early;
researched it carefully; monitored it closely; and stuck with it through thick
and thin, despite several false starts. CheckFree has earned more money for our
shareholders than any other stock in which our Fund has been invested. The $117
million of both realized and unrealized profits from CheckFree at the end of
1999 has exceeded the $58.8 million earned in prior years from Federal National
Mortgage, the $33 million earned from Phelps Dodge, and the $29.1 million from
Great Atlantic & Pacific Tea Co.
Nevertheless, some of our shareholders may be relieved to know that we
have substantially reduced our position in CheckFree, as we said we would if the
stock continued to rise. In fact, we sold 1,150,000 shares of CheckFree last
year, leaving 500,000 shares remaining in the portfolio at the end of 1999.
Despite these sales, CheckFree still accounted for 23.5% of the Fund's net
assets at year-end and can be expected, therefore, to have an important impact
on the Fund's performance in the year 2000 and beyond.
As a result of having realized these and other long-term capital gains,
the Fund distributed $63,266,150, or $8.3767 per share, to shareholders after
year-end in the form of a long-term capital gain dividend, and $.006 per share
of ordinary income dividend. At year-end the Fund held approximately $45
million, or 20%, in net cash equivalents awaiting reinvestment.
<PAGE> 4
We are far from sanguine about current market conditions. We are
increasingly disturbed by extreme speculation in a narrowly focused segment of
the stock market, to the exclusion of other investments. Investors are losing
interest in more mundane companies and, in many cases, are pulling money away
from value-oriented investment managers because they are underperforming the
market. Consequently, some of these managers are forced to liquidate their
holdings in fundamentally good companies to meet their capital outflows. This
causes further weakness in the price of many soundly-based investments,
discouraging further investment in these stocks. Meanwhile, the transitioned
money gravitates to where the action is, fueling the flames of short-term
speculation even further.
In many instances, older, more conservative investors are feeling pressure
from their 30-and 40-year-old children to invest more aggressively and "get with
it." After all, look at all the easy money that is being made! Stocks are going
up 10-20-30 points a day. Money is coming out of sound investments. College
students are trading from their dormitories using credit cards. People are
giving up their jobs and vocations to become day traders, and home equity loans
are being taken out to finance speculative stock purchases. These are but a few
examples of the new milieu helping fuel the present IPO.com market, the Internet
stocks, and other such aggressive investments to dizzying new heights. It is
providing instant gratification, extraordinary profits, and, perhaps, unduly
high expectations to many neophyte investors who may be unaware and ill-prepared
for the potential risks they are taking.
Such unbridled trading activity can't be healthy in the long run for
either the stock market or the economy, and history teaches us it will not last
indefinitely. Today's feverish stock market is disturbingly similar to the tulip
bulb craze in Holland in the 1600's. Here are some excerpts from the Tulipmania
chapter in Charles Mackay's Extraordinary Popular Delusions & The Madness of
Crowds:
...Every one imagined that the passion for tulips would last for ever....
Nobles, citizens, farmers, mechanics, seamen, footmen, maid-servants, even
chimney-sweeps and old clotheswomen, dabbled in tulips. People of all
grades converted their property into cash, and invested it in flowers....
At last, however, the more prudent began to see that this folly could not
last for ever... somebody must lose fearfully in the end. As this
conviction spread, prices fell, and never rose again.... Many who, for a
brief season, had emerged from the humbler walks of life, were cast back
into their original obscurity. Substantial merchants were reduced almost
to beggary, and many a representative of a noble line saw the fortunes of
his house ruined beyond redemption.
We believe this modern-day Tulipmania will continue to flourish for the
foreseeable future, as the participants find more and more stocks to exploit.
After all, the tulip bulb craze in Holland lasted approximately thirty-five
years before the bubble burst. Consequently, it's our intention to maintain a
substantial investment in CheckFree, because we think the stock should continue
to perform well in the current market environment, despite its recent price
rise. CheckFree is building a dominant share in a market that is expected to
grow significantly, and we believe its potential earning power, which has been
obscured for various reasons, will finally surface for all to see before the
year is over. We have taken a lot of our profits out of the stock and think its
valuation relative to other high-growth companies is justifiable.
In addition, we will be buying "down-and-out stocks" that we have
researched internally. We think these stocks, from which others are fleeing,
offer both substantial
<PAGE> 5
intrinsic value and limited downside market risk at current prices, as well as
worthwhile upside potential when these types of stocks come back into favor. We
are referring to such new investments as Great Atlantic and Pacific Tea Co.,
Kmart, Crown Cork & Seal, and Conseco, in which we are building a major
position.
We are still of the school that believes a stock should carry an
underlying store of value. Stock prices are a discounting mechanism that should
discount the future...they should discount the future, but not the hereafter. In
1989 John M. Templeton wrote, "Basing investment decisions on the actions of the
crowd can be a disastrous gamble. And in this case, the `crowd' may well include
money managers and analysts well-schooled in investment theory, just as it does
the amateur investor."
As your Fund managers, we are not willing to make investments fraught with
risk by following the "crowd", throwing new money into stocks we consider
substantially overvalued.
Right now, traditional investors are concerned about rising interest
rates, inflationary price pressures, shrinking corporate profits, cyberspace
stock valuations, and a long-running bull market. Some of the more aggressive
new millennium investors are probably not worrying much about anything, except
perhaps how to participate in the next hot IPO. Our major concern is that too
much of the stock market has degenerated into a speculative binge, wherein major
investment decisions are being made, not on some rational investment basis
related to cash flows and return on investments, but on a greater fool theory
that someone else will repurchase shares at higher prices, regardless of the
price paid.
Stock investing in the future should continue to be an exciting and
fascinating challenge.
Sincerely,
/s/ Robert M. Gintel /s/ Edward F. Carroll
Robert M. Gintel Edward F. Carroll
Chairman Investment Manager
P. S. In the interests of keeping costs down and maintaining a high quality of
service to our shareholders, we are changing the Fund's Custodian and Transfer
Agent to Firstar Mutual Fund Services LLC. We will let you know the conversion
schedule as soon as it is finalized. As always, we will be offering a money
market and government money market fund as a convenience to our shareholders.
<PAGE> 6
Investor's Business Daily
For People Who Choose To Succeed
- --------------------------------------------------------------------------------
Monday, December 20, 1999
================================================================================
Making Money in Mutuals
- --------------------------------------------------------------------------------
Gintel's Fortune Relies Largely On One Stock
Fund, Up 66%, In '99, Has 47% Of Assets In CheckFree
-------------------------
By Nancy Gondo
Investor's Business Daily
With so many tech stocks soaring to sky-high prices, many investors don't
have the patience to wait a year for their stocks to double. But for Gintel
Fund, patience has paid off big time.
The $200 million fund was up 66% going into Friday, far outperforming the
S&P 500's 17%. It gets a B Rating from IBD, as its return of 64% for the
36-month period ended Nov.30 beat 78% of all other funds.
[GRAPHIC OMITTED] Investment Trends
What's the secret to the fund's success? For starters, this fund has a
unique investment style. Nearly half, or 47%, of the fund's assets are invested
in one stock: CheckFree Holdings, a maker of software that lets users pay their
bills online. This heavy weighting in one stock may sound scary -- but the
stock's up more than 300% this year.
"CheckFree is a pioneer in consumer and business home banking . . . It's
become a very big thing," said Bob Gintel, 71, lead manager of the fund. "We saw
it early. We recognized it for what it was, and we sat with it for several years
through the false starts."
Gintel began buying CheckFree shares in July 1996 at 21. He held on
through its price swings, often adding to the position when the price declined.
"And now we're getting the payoff for having had the patience and the
fortitude to say with it," he said.
Though he's taken some profits this year, the fund still holds 1 million
shares of the company. The fund's second-largest holding is a 7% position in
C-Cube Microsystems, while the rest account for 5% or less per stock.
Most diversified growth funds won't let holdings in their portfolios grow
to more than 5% apiece, which tends to lower overall risk. But not Gintel Fund.
Gintel selects companies for the fund's 36-stock portfolio along with Ed
Carroll, 60, and Richard Reach, 46. If they really believe in a company, they
have no qualms about buying a large amount.
"We believe in a nondiversified approach to investing . . . in a small and
manageable number of securities, which through our internal research we think
provide an opportunity for substantial capital appreciation," Gintel said. "We
don't buy anything that we don't think we know and know well."
[PHOTO OF ROBERT M. GINTEL] GINTEL
Before buying a stock, they like to see a large stake held by management,
to make sure the company's interests are aligned with its shareholders'. Gintel
and his team practice what he preaches. Some 31% of the fund's assets are held
by the investment advisers and their families.
"I have a very big comfort factor when I see managements having a big
stake in their own companies in the same way that I think our shareholders get
great comfort in seeing that we have a big stake in our own fund," Gintel said.
For instance, CheckFree Chairman and Chief Executive Peter Kight owned
nearly 7 million shares of the company, or 13% of total shares outstanding,
according to CheckFree's most recent proxy.
Gintel Fund has 13% in cash, which may be on the high end for most funds,
but not this one. It has been buying new shares but still has $26 million in
cash.
"We tend to run high cash positions if we just don't have anything we feel
strongly about," Gintel explained. "We don't feel just because we sell a stock
we have to run out and buy something in the next minute."
The fund takes a contrarian approach to the market, which means it often
buys stocks that other investors don't want. These companies are usually well of
off their highs and are usually undervalued.
In addition to a low price, Gintel, Carroll and Reach want to see some
sort of catalyst they feel could improve the company's business. They scrutinize
a company's balance sheet, meet with its management and talk to its competitors.
How long do they wait for a company to turn around its situation for the
better? "Going in, we are prepared to have a three-year time horizon for the
situation to work out," Gintel said.
Great Atlantic & Pacific Tea was a recent buy for the fund. The Montvale,
N.J.-based supermarket retailer named a new CEO. Christian Haub, in May 1998.
The stock is trading at 26, near its 52-week low of 24 1/2, but Gintel thinks
Haub will be able to rebuild and strengthen the company.
Gintel Fund has done well, but investors should think twice before loading
up on a fund that relies so heavily on one stock. A key attraction of
diversified funds is that you can build a fortune over the long haul without
worrying that the collapse of one company will bring ruin.
Reprinted by permission of Investor's Business Daily, For People Who Choose to
Succeed (C) Copyright 1999.
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.
<PAGE> 7
[LETTERHEAD OF MUTUAL FINDS MAGAZINE]
December 29, 1999
President
Gintel Fund
Greenwich Office Park
Greenwich, CT 06830
Your New Five-Star Rating
I am pleased to announce that your fund's All-Star Rating from Mutual Funds
Magazine has been elevated to Five Stars. This is the highest rating for
risk-adjustment return.
Mutual Funds' All-Star Ratings are the most widely disseminated mutual fund
ratings in the country. They are cited extensively in Mututal Funds Magazine,
which now has a paid circulation of 800,000 and a total readership of more than
2 million.
For your further information, I have enclosed a copy of our All-Star Ratings
methodology and a table below showing your overall, one-year, three-year,
five-year, and ten-year All-Star Ratings where applicable.
Allow me to extend my personal congratulations on the excellent performance
achieved by your fund. It is fully deserving of our highest performance
accolade.
Sincerely,
/s/ John Curran
John Curran
Managing Editor
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Calculations as of December 24, 1999 Source: Mututal Funds Magazine
- --------------------------------------------------------------------------------
Equity Fund Category Overall 1 Year 3 Year 5 Year 10 Year
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gintel Fund ***** ***** ***** ***** *****
- --------------------------------------------------------------------------------
Number of funds considered: 2722 3207 2287 1459 755
- --------------------------------------------------------------------------------
</TABLE>
<PAGE> 8
GINTEL FUND Portfolio of Investments As of December 31, 1999
<TABLE>
<CAPTION>
Number of Shares Cost ** Market
- --------------------------------------------------------------------------------
Common Stocks
<C> <S> <C> <C>
Technology - Related (32.0%)
----------------------------
500,000 CheckFree Holdings Corporation* $7,244,781 $52,250,000
300,000 C-Cube Microsystems Inc.* 7,147,053 18,675,000
Insurance (16.3%)
-----------------
1,650,000 Conseco Inc. 29,659,000 29,493,750
300,000 Mercury General Corporation 6,445,461 6,675,000
Supermarket (5.0%)
------------------
400,000 Great Atlantic & Pacific Tea Company, Inc. 10,776,475 11,150,000
Security Protection Systems (4.2%)
----------------------------------
911,400 Checkpoint Systems, Inc. 6,811,037 9,284,887
Retail - General Merchandise ( 3.2%)
------------------------------------
700,000 Kmart Corporation 7,380,075 7,043,750
Consumer Goods (3.1%)
---------------------
508,000 SLI, Inc.* 5,290,568 6,889,750
Entertainment (2.5%)
--------------------
200,000 Imax Corporation * 4,711,013 5,475,000
Manufacturing & Service (2.3%)
------------------------------
234,000 Ogden Corporation 2,705,250 2,793,375
600,000 Chart Industries, Inc. 1,270,134 2,400,000
Food (2.3%)
-----------
675,000 Northland Cranberries, Inc. 3,887,295 4,050,000
35,000 American Italian Pasta Company* 944,888 1,076,250
Global Telecommunications ( 2.3%)
---------------------------------
100,000 AT & T Corp. 5,179,375 5,075,000
Container (1.5%)
----------------
150,000 Crown Cork & Seal Company, Inc. 3,354,348 3,356,250
Savings & Loan (1.3%)
---------------------
152,500 Charter One Financial Corporation 2,058,205 2,916,562
</TABLE>
<PAGE> 9
GINTEL FUND Portfolio of Investments (continued) As of December 31, 1999
<TABLE>
<CAPTION>
Number of Shares Cost ** Market
- --------------------------------------------------------------------------------
Common Stocks
Steel Supplier (1.2%)
---------------------
<C> <S> <C> <C>
150,000 UCAR International, Inc.* 2,762,329 2,671,875
Battery Technology (1.2%)
100,000 Evercel, Inc.* 575,947 2,575,000
Alternative Energy (1.1%)
97,500 FuelCell Energy, Inc.* 627,565 2,443,594
Miscellaneous Securities *** (2.9%) 6,774,487 6,369,770
Imputed Brokerage Commissions on
Securities Owned 387,000
- --------------------------------------------------------------------------------
Total Common Stocks (82.4%) 115,992,286 182,664,813
- --------------------------------------------------------------------------------
<CAPTION>
Principal
Amount
- --------------------------------------------------------------------------------
Cash Equivalents
<C> <S> <C> <C>
30,000,000 US Treasury Bill
4.52% due 1/13/00 29,960,500 29,960,500
6,000,000 American Express Credit Corporation
5.94 % due 2/2/00 6,000,000 6,000,000
6,000,000 General Electric Capital Corporation
6.00% due 2/9/00 6,000,000 6,000,000
3,083,000 Chase Securities, Inc. Repurchase Agreement
2.60% due 1/3/00(Collateralized by U.S
Government Obligations) 3,083,000 3,083,000
- --------------------------------------------------------------------------------
Total Cash Equivalents (20.3%) 45,043,500 45,043,500
- --------------------------------------------------------------------------------
Total Investments (102.7%) $161,035,786 $227,708,313
================================================================================
</TABLE>
* Non-income producing investments
** Cost basis for Federal income tax purposes.
*** Includes 15 investments, some of which are non-income producing
investments.
See notes to financial statements.
<PAGE> 10
GINTEL FUND Statement of Assets and Liabilities As of December 31, 1999
<TABLE>
<CAPTION>
Assets:
<S> <C>
Investments-at market value (cost $161,035,786) $227,708,313
Dividends and interest receivable 173,002
Investment securities sold 13,908,983
Capital stock sold 60,000
Cash 967
- --------------------------------------------------------------------------------
Total Assets 241,851,265
- --------------------------------------------------------------------------------
Liabilities:
Loan payable 15,000,000
Investment securities purchased 4,781,022
Administrative service fee 187,807
Investment advisory fee 171,882
Other accrued expenses 33,364
- --------------------------------------------------------------------------------
Total Liabilities 20,174,075
- --------------------------------------------------------------------------------
Net assets applicable to outstanding shares $221,677,190
================================================================================
Net asset value per share-based on 7,547,520 shares of beneficial
interest (offering and redemption price) $29.37
================================================================================
</TABLE>
See notes to financial statements.
<PAGE> 11
GINTEL FUND Statement of Cash Flows Year Ended December 31, 1999
<TABLE>
<CAPTION>
<S> <C>
Cash flows from operating activities:
Net investment loss $(716,346)
Net change in other receivables/payables (286,744)
- --------------------------------------------------------------------------------
Net cash (used) in operating activities (1,003,090)
- --------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from sales of securities 139,108,631
Purchases of securities (121,419,887)
Net sales of short-term investments (5,168,500)
- --------------------------------------------------------------------------------
Net cash provided by investing activities 12,520,244
- --------------------------------------------------------------------------------
Cash flows from financing activities:
Sales of shares 2,490,461
Shares repurchased (29,007,575)
Temporary borrowings 15,000,000
- --------------------------------------------------------------------------------
Net cash (used) in financing activities (11,517,114)
- --------------------------------------------------------------------------------
Net increase in cash 40
Cash at beginning of year 927
- --------------------------------------------------------------------------------
Cash at end of year $967
================================================================================
</TABLE>
See notes to financial statements.
<PAGE> 12
GINTEL FUND Statement of Operations Year Ended December 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
Investment Income:
Interest $1,245,608
Dividends 836,417
Woolworth class action settlement 179,874
Miscellaneous income 7,156
------------
Total investment income 2,269,055
Expenses:
Investment advisory fee 1,560,194
Administrative expense 1,330,693
Other expenses 94,514
----------
Total Expenses 2,985,401
------------
Net investment loss (716,346)
Net realized gain on investments 63,268,281
Net increase in unrealized appreciation of investments 41,031,119
----------
Net gain on investments 104,299,400
------------
Net increase in net assets resulting from operations $103,583,054
============
</TABLE>
See notes to financial statements.
<PAGE> 13
GINTEL FUND Statements of Changes in Net Assets Year Ended December 31,
<TABLE>
<CAPTION>
1999 1998
------------- -------------
<S> <C> <C>
Operations:
Net investment income (loss) $(716,346) $924,155
Net realized gain on investments 63,268,281 23,071,911
Net increase (decrease) in unrealized appreciation
of investments 41,031,119 (44,250,703)
------------- -------------
Net increase (decrease) from operations 103,583,054 (20,254,637)
Distributions to Shareholders:
Net investment income -- (856,082)
Net realized gains on investment -- (23,063,460)
------------- -------------
Net decrease from distribution to shareholders -- (23,919,542)
Capital Share Transactions:
Proceeds from shares issued 2,550,461 11,824,016
Reinvestment of dividends -- 15,707,752
Cost of shares repurchased (28,875,820) (19,662,562)
------------- -------------
Net increase (decrease) from
capital share transactions (26,325,359) 7,869,206
Total Increase (Decrease) 77,257,695 (36,304,973)
Net Assets - Beginning of Year 144,419,495 180,724,468
------------- -------------
Net Assets - End of Year $221,677,190 $144,419,495
============= =============
Net Assets consist of:
Capital Stock $93,456,200 $119,781,559
Undistributed net investment losses (1,214,656) (498,310)
Undistributed net realized gains (losses)
from security transactions 62,683,119 (585,162)
Unrealized appreciation on investments 66,752,527 25,721,408
------------- -------------
$221,677,190 $144,419,495
============= =============
</TABLE>
See notes to financial statements.
<PAGE> 14
GINTEL FUND Condensed Financial Information Year Ended December 31,
(Per share Income and Capital Changes)
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value
Beginning of Year $16.18 $21.78 $18.10 $15.37 $12.46
Income (loss) from
Investment operations
Net investment income (loss) (.09) .12 .12 .37 (.01)
Net realized and unrealized
gain (loss) on securities 13.28 (2.71) 5.13 4.40 3.86
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Income (loss) 13.19 (2.59) 5.25 4.77 3.85
- ------------------------------------------------------------------------------------------------------------------------------------
Less: Distributions
Net investment income -- .11 .15 .35 .01
Capital gains -- 2.90 1.42 1.69 .93
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions -- 3.01 1.57 2.04 .94
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $29.37 $16.18 $21.78 $18.10 $15.37
====================================================================================================================================
Total Return 81.5% -11.0% 29.2% 31.0% 31.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of year $221,677,190 $144,419,495 $180,724,468 $147,905,695 $96,738,857
Ratio of operating expenses to
average net assets* 1.9% 1.7% 1.8% 1.8% 2.3%
Ratio of net investment
income (loss) to average net assets (.5%) .6% .8% 2.2% (.1%)
Portfolio turnover rate 95.3% 61.4% 52.0% 61.4% 55.4%
Shares outstanding, end of year 7,547,520 8,923,667 8,295,837 8,171,707 6,295,777
</TABLE>
* The Fund's expense ratio for 1995 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.
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. Beginning in 1996 the
Fund changed its accounting presentation to extract imputed brokerage
commissions from its expense ratio in order to make it easier to compare
our Fund to other funds which do not have a similar fee structure.
See notes to financial statements.
<PAGE> 15
GINTEL FUND Notes to Financial Statements December 31, 1999
(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. On January
3, 2000, the Fund distributed long-term capital gains of $63,220,867 ($8.3767
per share) and ordinary income of $45,283 ($.0060 per share) applicable to the
year ended December 31, 1999.
3. Statement of Cash Flows:
Information on financial transactions which have been settled through the
receipt and disbursement of cash is presented in the Statement of Cash Flows.
The cash amount shown in the Statement of Cash Flows represents cash on hand in
the Fund's custodian bank account and does not include any short-term
investments at December 31, 1999.
4. 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.
5. Use of Estimates:
The preparation of financial statements in accordance with generally accepted
accounting principles requires the use of estimates and assumptions that affect
the amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
(Note C) - Investment Advisory Agreement:
The Fund's Investment Advisory Agreement with Gintel Asset Management, Inc., a
related party, provides for the annual fee of 1% based on the daily value of the
Fund's net assets.
(Note D) - Administrative Services Agreement:
The Fund's Administrative Services Agreement 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 would receive an Administrative
Services Fee. The Distributor receives a fee 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.
<PAGE> 16
GINTEL FUND Notes to Financial Statements (continued) December 31, 1999
(Note E) - Imputed Commissions:
The Fund provides for imputed brokerage commissions to be extracted from the
Administrative Services Fee and to be applied to the cost of securities sold and
held. For the year ended December 31, 1999, the Fund estimated imputed brokerage
commissions to be $417,000 which decreased administrative expense, and thereby
decreased net investment loss by $417,000, decreased unrealized appreciation
by$169,000, and decreased realized gains by $248,000.
(Note F) - Line of Credit:
The Fund has a line of credit with Custodial Trust Company of up to the maximum
amount permitted under the Investment Company Act of 1940. Interest is payable
at the Fed Funds Rate plus 1%. Loans are collateralized by securities owned by
the Fund. At December 31, 1999, the Fund had a loan balance of $15,000,000
(maximum amount borrowed), which was paid in full on January 13, 2000. The
weighted average interest rate of borrowing for the year was 6.3%, the average
amount of borrowings outstanding for the year was $450,000, based upon the
eleven days the $15,000,000 loan was outstanding.
(Note G) - Other Matters:
<TABLE>
<CAPTION>
1. Investments
<S> <C>
Unrealized appreciation at December 31, 1999 $68,498,636
Unrealized depreciation at December 31, 1999 (1,439,109)
Imputed commissions on securities owned (387,000)
-----------
$66,672,527
===========
</TABLE>
<TABLE>
<CAPTION>
Year Ended
December 31, 1999
-----------------
<S> <C>
Purchases of securities other than short-term investments $124,556,389
Sales of securities other than short-term investments $152,829,164
</TABLE>
<TABLE>
<CAPTION>
2. Capital Stock (in shares) Year Ended December 31,
1999 1998
---------- ----------
<S> <C> <C>
Shares issued 126,573 670,887
Shares reinvested - 1,038,185
Shares repurchased (1,502,720) (1,081,242)
---------- ----------
Net increase (decrease) (1,376,147) 627,830
========== ==========
</TABLE>
<PAGE> 17
Report of Independent Auditors
Board of Trustees and Shareholders
Gintel Fund
Greenwich, Connecticut
We have audited the statement of assets and liabilities and the portfolio
of investments of the Gintel Fund as of December 31, 1999, and the related
statements of operations and cash flows for the year then ended, the statements
of changes in net assets for each of the years in the two-year period then
ended, and the condensed financial information for each of the years in the
five-year period then ended. These financial statements and condensed financial
information are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and condensed financial
information based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and condensed
financial information are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1999, with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and condensed financial
information enumerated above present fairly, in all material respects, the
financial position of Gintel Fund as of December 31, 1999, the results of its
operations and cash flows for the year then ended, the changes in its net assets
for each of the years in the two-year period then ended, and the condensed
financial information for each of the years in the five-year period then ended,
in conformity with generally accepted accounting principles.
Richard A. Eisner & Company, LLP
New York, New York
January 21, 2000
<PAGE> 18
GINTEL FUND Investment Staff
Robert M. Gintel
Robert Gintel has spent his entire business career in the investment
industry with more than 40 years of experience as a professional investor. Mr.
Gintel is Chairman and Chief Executive Officer of Gintel Asset Management, Inc.
He is also Senior Partner and founder of Gintel & Co., a member of the New York
Stock Exchange and associate member of the American Stock Exchange, and Chairman
of the Board and Chief Executive Officer of Gintel Fund. He holds a B.A. degree
from Columbia College and an M.B.A. from the Harvard Business School. Mr. Gintel
has served on the Board of Directors of several New York Stock Exchange listed
corporations. He has lectured and written articles on investments and has
appeared on Wall Street Week and other television and radio programs.
Edward F. Carroll
Mr. Carroll joined Gintel Asset Management, Inc. in 1983 and is a General
Partner of Gintel & Co. Previously, Mr. Carroll had his own consulting firm
specializing in global energy issues and was on the staff of the Ford
Foundation, where he was directly responsible for all energy-related
investments. Mr. Carroll's 40-year career includes experience as an analyst with
the Wall Street firms, Halle & Steiglitz, Henry Hentz & Company, and E.F.
Hutton. He holds a B.G.S. degree from the University of Connecticut.
R. Baxter Brown
Mr. Brown was an original partner of Robert Gintel and co-founding partner
of Gintel & Co. After an absence of seventeen years during which he was Chief
Executive Officer of Baxter Brown & Company and Brown Asset Management, he
rejoined the Gintel Group. Mr. Brown is Senior Vice President of Gintel Asset
Management Inc. and a General Partner of Gintel & Co. He began his career in
1956 with the NYSE firm of J.C. Bradford & Co. and became a general partner of
that firm. He holds a B.A. degree in Economics and Business Administration from
Vanderbilt University.
<PAGE> 19
GINTEL FUND Trustees and Officers
Robert M. Gintel Chairman, Trustee, and Chief Executive Officer
Chairman and Chief Executive Officer, Gintel Asset
Management, Inc.; Senior Partner, Gintel & Co. Limited
Partnership.
Thomas H. Lenagh Trustee
Financial Consultant; formerly Chairman and Chief Executive
Officer of Greiner Engineering Co.; Director, Adams Express
Co., Petroleum & Resources, Inc., ICN Pharmaceuticals,
Inc., Clemente Strategic Fund, ASD Group, Inrad
Corporation.
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.
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.
Stephen G. Stavrides Trustee, President, and Treasurer
President, Gintel Asset Management, Inc.; General Partner
and Chief Operating Officer, Gintel & Co. Limited
Partnership.
Donna K. Grippe Secretary and Assistant Treasurer
Investment Advisor
Gintel Asset Management, Inc.
6 Greenwich Office Park
Greenwich, CT 06831-5197
203-622-6400
Gintel Group
Chase Global Funds Services Company
P.O. Box 2798
Boston, MA 02208-2798
800-344-3092
