<PAGE> 1
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 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>
2000 (SIX MONTHS) -22.90% -.47% 3.04%
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%
1-YEAR
COMPOUNDED
RATE OF RETURN 29.91% 7.24% 14.32%
5-YEAR
COMPOUNDED
RATE OF RETURN 18.72% 23.81% 14.27%
10-YEAR
COMPOUNDED
RATE OF RETURN 11.81% 17.78% 13.56%
</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> 2
July 14, 2000
Dear Shareholder:
Our Fund had a poor six months. Net asset value declined by 22.9%, with
dividends reinvested, compared to a decrease of .5% in the S&P 500 Index and an
increase of 3.0% in the Russell 2000 Index. During the quarter we increased our
holdings in IMAX Corporation and sold or reduced our positions in a number of
stocks, including Horizon Pharmacies, AT&T, C-Cube Microsystems, Charter One
Financial, Evercel, Mercury General, and Ogden. At quarter-end $34.1 million, or
21.4% of the Fund's portfolio, was held in cash equivalents awaiting
reinvestment.
Several stocks contributed to the Fund's poor performance results. Our
investment in Conseco has been particularly disappointing. The company announced
a change of senior management and hired Gary Wendt as its new Chairman and Chief
Executive Officer. Mr. Wendt, the former Chief Executive Officer of GE Capital,
is highly regarded for his managerial skills and his record of accomplishment at
General Electric. We are glad he has taken over the helm, but realize that he
has a long and arduous task ahead of him and that it will take a long time for
shareholders to reap the benefits of whatever plans he formulates and executes.
Many, if not most, of the New Economy stocks declined sharply in price earlier
this year. CheckFree Holdings, though drastically reduced in size, is still one
of our largest positions and was carried down with the group.
Our Fund was also affected in the second quarter by the performance of
value/growth stocks, a sector in which we had placed greater emphasis during the
first quarter. While our investments in these severely depressed areas may take
somewhat longer to work out, we believe these holdings have strong long-term
fundamentals and should eventually prove rewarding.
Anticipated first-half earnings releases have already been factored into
individual stock prices, as well as index levels. Economic trends, corporate
profit growth, and both consumer and investor confidence will most likely be the
determinants of market movements over the balance of the year.
Perception of the economy has shifted over the past few quarters from
general satisfaction to nagging uncertainty over issues such as overheating,
inflationary pressures, and even recession. This change has been somewhat fueled
by the Federal Reserve Board's string of six interest rate increases over the
past 12 months. The Federal Reserve Board is attempting to cool off the rapid
Gross Domestic Product growth of recent years, while at the same time achieve a
soft landing for the United States economy. Most observers, however, agree that
the economy is beginning to weaken, but major doubts remain as to whether the
reduction in growth will be enough to keep inflation in check and permit
sustainable long-term economic growth or whether inflation will continue to rise
even with an economic slowdown.
Corporate profits will face much tougher obstacles through the balance of
2000 and into 2001. A slower economy would cut into what has been, in most
industries, only
<PAGE> 3
modest top-line revenue growth at best, while increased labor and raw material
costs could shrink both productivity and profitability. Interest rates are also
likely to rise relative to the second half of 1999, fueled, perhaps, by further
rate increases by the Federal Reserve Board.
Finally, both consumers and investors face major challenges over the next
six to nine months. The job market remains tight and real consumer income
continues to rise, but inflation is much higher than a year ago, with soaring
gasoline prices hitting consumers' pocketbooks. With consumer debt near record
levels it may be much more difficult for consumer confidence to remain at or
near record highs, especially if faced with 30% - 40% fuel price increases this
coming winter. Investors, too, may be somewhat stunned. After climbing sharply
for nearly eight years, their portfolio wealth is only slightly, if at all,
higher than it was at year-end 1999. While technology stocks are not being
abandoned, investors are paying much closer attention to the valuation and
profit growth prospects of these issues and becoming somewhat more interested in
the more traditional value/growth stocks.
The above scenario is significantly different from just one year ago and
is already beginning to change the investment landscape. New Economy stocks,
especially Internet-related ones, have not recovered much from the sharp price
declines experienced over the past few months, and any negative deviations from
expected sales or profit expectations have resulted in further stock price
declines. Because investors were willing to interpret corporate losses as a
prerequisite to explosive growth, the stock prices of companies without earnings
thrived over the past few years. Now, however, these same companies are
desperately looking either to show a profit or to compress their profitability
timetable, mostly by cutting advertising expenses or other expenditures that
could jeopardize rapid near-term growth expectations.
We suspect the market will continue to be volatile. The companies that
show the best relative profit growth, innovativeness, and consistency in
earnings will obtain the best valuations. There will be plenty of winners in
both categories; the real task will be to avoid those companies that may not
finish the race.
Hopefully, we can report better results in our next letter.
Sincerely,
<TABLE>
<S> <C>
/s/ Robert M. Gintel /s/ Edward F. Carroll
Robert M. Gintel Edward F. Carroll
Chairman Investment Manager
</TABLE>
<PAGE> 4
GINTEL FUND Statement of Net Assets As of June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
NUMBER OF SHARES COST ** MARKET
------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
INSURANCE (22.6%)
3,000,000 Conseco Inc. $43,193,856 $29,250,000
287,500 Mercury General Corporation 6,162,024 6,792,188
TECHNOLOGY - RELATED (16.5%)
500,000 CheckFree Holdings Corporation * 7,244,781 25,781,250
30,000 C-Cube Microsystems Inc. * 229,168 588,750
SUPERMARKET (8.3%)
800,000 Great Atlantic & Pacific Tea
Company, Inc. 18,350,351 13,300,000
ENTERTAINMENT (6.8%)
475,000 Imax Corporation * 11,361,509 10,806,250
SECURITY PROTECTION SYSTEMS (4.3%)
911,400 Checkpoint Systems, Inc. 6,811,037 6,835,500
CONSUMER GOODS (3.8%)
505,000 SLI, Inc. * 5,226,068 6,123,125
RETAIL - GENERAL MERCHANDISE ( 3.0%)
700,000 Kmart Corporation 7,380,075 4,768,750
MANUFACTURING & SERVICE (3.0%)
200,000 Ogden Corporation 2,078,750 1,800,000
600,000 Chart Industries, Inc. 1,270,134 2,925,000
FOOD (2.4%)
800,000 Northland Cranberries, Inc. 4,593,045 3,100,000
35,000 American Italian Pasta Company * 944,888 724,062
GLOBAL TELECOMMUNICATIONS ( 2.0%)
100,000 AT & T Corp. 5,179,375 3,162,500
CONTAINER (1.4%)
150,000 Crown Cork & Seal Company, Inc. 3,354,348 2,250,000
BATTERY TECHNOLOGY (0.9%)
105,000 Evercel, Inc. * 281,624 1,443,750
</TABLE>
<PAGE> 5
GINTEL FUND Statement of Net Assets (continued) As of June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
NUMBER OF SHARES COST ** MARKET
----------------------------------------------------------------------------------------
<S> <C> <C>
SAVINGS & LOAN (0.8%)
52,500 Charter One Financial Corporation 143,035 1,207,500
STEEL SUPPLIER (0.4%)
50,000 UCAR International, Inc. * 929,111 653,125
Miscellaneous Securities *** (3.2%) 4,331,073 5,094,986
Imputed Brokerage Commissions on
Securities Owned 437,000
----------------------------------------------------------------------------------------
Total Common Stocks (79.4%) 129,501,252 126,606,736
----------------------------------------------------------------------------------------
Principal
Amount
----------------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS
6,000,000 Associates Corporation of North America
6.58% due 7/26/00 6,000,000 6,000,000
6,000,000 American Express Credit Corporation
6.55% due 7/19/00 6,000,000 6,000,000
6,000,000 General Electric Capital Services
6.55% due 7/12/00 6,000,000 6,000,000
6,000,000 Chevron USA
6.49% due 7/6/00 6,000,000 6,000,000
6,000,000 General Motors Acceptance Corporation
6.59% due 8/2/00 6,000,000 6,000,000
4,169,000 General Electric Capital Corporation
6.50% due 7/3/00 4,169,000 4,169,000
----------------------------------------------------------------------------------------
Total Short-Term Obligations (21.4%) 34,169,000 34,169,000
----------------------------------------------------------------------------------------
Total Investments (100.8%) $163,670,252 $160,775,736
------------
Liabilities net of other assets (-0.8%) (1,228,856)
----------------------------------------------------------------------------------------
Net Assets Applicable to Outstanding
Shares (100%) $159,546,880
========================================================================================
Net asset value per share - based on 9,951,083 shares
of beneficial interest (offering and redemption price) $16.03
========================================================================================
</TABLE>
* Non-income producing investments
** Cost basis for Federal income tax purposes.
*** Includes 21 investments, some of which are non-income producing investments.
See notes to financial statements.
<PAGE> 6
GINTEL FUND Condensed Financial Information (Unaudited)
(Per share Income and Capital Changes)
<TABLE>
<CAPTION>
Year Ended December 31,
Six Months Ended -------------------------------------------------------------------
6/30/2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value
Beginning of Year $ 29.37 $ 16.18 $ 21.78 $ 18.10 $ 15.37
Income (loss) from
Investment operations
Net investment income (loss) .08 (.09) .12 .12 .37
Net realized and unrealized
gain (loss) on securities (5.04) 13.28 (2.71) 5.13 4.40
-----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Income (loss) (4.96) 13.19 (2.59) 5.25 4.77
-----------------------------------------------------------------------------------------------------------------------------------
Less: Distributions
Net investment income -- -- .11 .15 .35
Capital gains 8.38 -- 2.90 1.42 1.69
-----------------------------------------------------------------------------------------------------------------------------------
Total Distributions 8.38 -- 3.01 1.57 2.04
-----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 16.03 $ 29.37 $ 16.18 $ 21.78 $ 18.10
===================================================================================================================================
Total Return -22.9% 81.5% -11.0% 29.2% 31.0%
-----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of year $159,546,880 $221,677,190 $144,419,495 $180,724,468 $147,905,695
Ratio of operating expenses to
average net assets* 1.9% 1.9% 1.7% 1.8% 1.8%
Ratio of net investment income
(loss) to average net assets (.1%) (.5%) .6% .8% 2.2%
Portfolio turnover rate 68.9% 95.3% 61.4% 52.0% 61.4%
Shares outstanding, end of year 9,951,083 7,547,520 8,923,667 8,295,837 8,171,707
</TABLE>
* 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. 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> 7
GINTEL FUND Statement of Operations June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 911,123
Dividends 873,289
Miscellaneous income 2,117
-----------
Total investment income 1,786,529
EXPENSES:
Investment advisory fee 890,725
Administrative expense 778,176
Other expenses 29,169
-----------
Total Expenses 1,698,070
-----------
NET INVESTMENT GAIN 88,459
NET REALIZED GAIN ON INVESTMENTS 19,622,145
NET DECREASE IN UNREALIZED
APPRECIATION OF INVESTMENTS (68,851,066)
-----------
NET LOSS ON INVESTMENTS (49,228,921)
-----------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS $(49,140,462)
============
</TABLE>
See notes to financial statements.
<PAGE> 8
GINTEL FUND Statements of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
Six Months Year Ended
Ended 6/30/00 12/31/99
------------- ----------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ 88,459 $ (716,346)
Net realized gain on investments 19,622,145 63,268,281
Net increase (decrease) in unrealized
appreciation of investments (68,851,066) 41,031,119
------------- -------------
Net increase (decrease) from
operations (49,140,462) 103,583,054
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (45,283) --
Net realized gains on investment (63,220,867) --
------------- -------------
Net decrease from distribution to
shareholders (63,266,150) --
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued 3,169,965 2,550,461
Reinvestment of dividends 57,928,762 --
Cost of shares repurchased (10,822,425) (28,875,820)
------------- -------------
Net increase (decrease) from
capital share transactions 50,276,302 (26,325,359)
Total Increase (Decrease) (62,130,310) 77,257,695
Net Assets - Beginning of Year 221,677,190 144,419,495
------------- -------------
Net Assets - End of Period $ 159,546,880 $ 221,677,190
============= =============
NET ASSETS CONSIST OF:
Capital Stock $ 143,732,503 $ 93,456,200
Undistributed net investment losses (409,294) (1,214,656)
Undistributed net realized gains
from security transactions 18,322,211 62,683,119
Unrealized appreciation (depreciation)
on investments (2,098,540) 66,752,527
------------- -------------
$ 159,546,880 $ 221,677,190
============= =============
</TABLE>
See notes to financial statements.
<PAGE> 9
GINTEL FUND Notes to Financial Statements June 30, 2000
(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. 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. 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.
4. 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> 10
GINTEL FUND Notes to Financial Statements (continued) June 30, 2000
(Unaudited)
(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 six months ended June 30, 2000, the Fund estimated imputed
brokerage commissions to be $206,000 which decreased administrative expense, and
thereby decreased net investment loss by $206,000, increased unrealized
appreciation by $17,000, and decreased realized gains by $223,000.
(NOTE F) - OTHER MATTERS:
1. Investments
<TABLE>
<S> <C>
Unrealized appreciation at June 30, 2000 $25,481,264
Unrealized depreciation at June 30, 2000 (27,938,780)
Imputed commissions on securities owned (437,000)
-----------
$(2,894,516)
===========
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000
-------------
<S> <C>
Purchases of securities other than short-term investments $52,359,713
Sales of securities other than short-term investments $59,394,870
</TABLE>
2. Capital Stock (in shares)
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 2000 December 31, 1999
------------- -----------------
<S> <C> <C>
Shares issued 211,608 126,573
Shares reinvested 2,850,825 -
Shares repurchased (658,870) (1,502,720)
--------- ----------
Net increase (decrease) 2,403,563 (1,376,147)
========= ==========
</TABLE>
<PAGE> 11
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. 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> 12
GINTEL FUND Trustees and Officers
<TABLE>
<S> <C>
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
</TABLE>
<TABLE>
<S> <C>
INVESTMENT ADVISOR GINTEL GROUP
Gintel Asset Management, Inc. Firstar Mutual Fund Services, LLC
6 Greenwich Office Park P.O. Box 701
Greenwich, CT 06831-5197 Milwaukee, WI 53201-0701
203-622-6400 800-344-3092
</TABLE>
