THE FAIRMONT FUND
Unaudited Financial Statements
June 30, 1996
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<CAPTION>
The Fairmont Fund
Schedule of Investments
(Unaudited)
June 30, 1996
<C> <S> <C> <C>
Investments in Securities
Common Stocks (Shares) Value Percent
Aluminum Production
25,000 Kaiser Aluminum Corporation (a) $ 275,000 0.88%
Apparel Manufacturing
15,000 Oshkosh B Gosh Inc 270,000 0.87
Automobile Insurance
15,000 Integon Corporation 301,875 0.97
Automobile Parts
100,000 TBC Corporation (a) 862,500 2.76
Banking
50,000 Imperial Bancorp (a) 1,200,000
70,000 North Fork Bancorporation, Inc. 1,828,750
75,000 UST Corporation 1,115,625
4,144,375 13.28
Business Services
150,000 Butler International Inc (a) 1,171,875
300,000 Digital Solutions Inc (a) 1,481,250
2,653,125 8.50
Cable TV
45,000 American Telecasting Inc (a) 596,250
110,000 CAI Wireless Systems Inc (a) 1,017,500
30,000 Heartland Wireless Communications (a) 712,500
2,326,250 7.45
Computer Terminals
20,000 Sigma Designs Inc (a) 187,500 0.60
Electronic Components
10,000 ADFlex Solutions Inc (a) 110,000
40,000 Read Rite Corporation (a) 565,000
675,000 2.16
Gold Mining
11,000 ASA Ltd 429,000 1.38
Health Care Management
40,000 Coventry Corporation (a) 630,000
10,000 Staff Builders, Inc (a) 33,750
663,750 2.13
Hospital and Medical Service Plans
50,000 Maxicare Health Plans Inc (a) 943,750 3.02
Life Insurance
75,000 Pioneer Financial Services Inc 1,246,875 4.00
<PAGE>
The Fairmont Fund
Schedule of Investments
(Unaudited)
June 30, 1996
Investments in Securities (continued)
Common Stocks (Shares) Value Percent
Mail Order Retailers
70,000 Fingerhut Companies Inc $1,093,750 3.51%
Medical Laboratories
370,000 Meris Laboratories Inc (a) 323,750 1.04
Oil and Gas Exploration
100,000 Oryx Energy Company (a) 1,625,000 5.21
Pharmaceuticals
400,000 Pharmos Corporation (a) 787,500
18,750 Pharmos Corporation Warrants Exp.
9/15/00 (a)(b) 5,273
28,000 Sandoz Ltd ADR 1,604,750
2,397,523 7.68
Restaurants
20,000 O Charleys Inc (a) 240,000 0.77
Retail Bookstores
20,000 Barnes and Noble Inc (a) 717,500
100,000 Books A Million Inc (a) 837,500
1,555,000 4.98
Savings Institutions
25,000 Leader Financial Corporation 1,118,750
60,000 Mechanics Savings Bank (a) 690,000
1,808,750 5.80
Semiconductor and Semiconductor Manufacturing Equipment
25,000 Genus Inc (a) 240,625
20,000 Mattson Technology Inc (a) 212,500
55,000 California Micro Devices Corporation (a) 488,125
95,000 Integrated Device Technology Inc (a) 1,009,375
1,950,625 6.25
Shoes
50,000 Timberland Company (a) 1,162,500 3.73
Telephone Equipment
10,000 Intervoice Inc (a) 198,750 0.64
Water Transportation
50,000 Alexander and Baldwin Company 1,206,250 3.87
Wholesale Groceries
50,000 International Dairy Queen Inc.
Class A (a) 1,100,000 3.53
Total Common Stocks (Cost $28,225,302) 29,640,898 95.01
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The Fairmont Fund
Schedule of Investments
(Unaudited)
June 30, 1996
Investments in Securities (continued)
Bank Repurchase Agreement Value Percent
With Star Bank NA of Cincinnati, issued 6/28/96 due 7/1/96,
fully collateralized by GNMA, 6.00%
due 5/20/22 (Cost $3,487,000) 3,487,000 11.17
Total Investments (Cost $31,712,302) 33,127,898 106.18
Other Assets Less Liabilities (1,929,106) (6.18)
Net Assets $ 31,198,792 100.00%
<FN>
(a) Common stocks which have not declared a dividend in 1996.
(b) There are restrictions on these warrants which will limit the Fund's
ability to convert them to stock until September 14, 1996.
</FN>
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See accompanying notes.
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<TABLE>
<CAPTION>
The Fairmont Fund
Statement of Assets and Liabilities
(Unaudited)
June 30, 1996
ASSETS
<S> <C> <C>
INVESTMENTS IN SECURITIES, At Value (Note 2)
Common stocks (Cost $28,225,302) $29,640,898
Bank repurchase agreement 3,487,000
Total investments in securities $33,127,898
CASH 2,796
RECEIVABLES
Investment securities sold 204,400
Dividends 13,875
Interest 1,453
Total receivables 219,728
Total assets 33,350,422
LIABILITIES
PAYABLES
Investment securities purchased $ 2,088,475
Management fee (Note 3) 42,472
Shares redeemed 20,103
Other 580
Total liabilities 2,151,630
NET ASSETS $31,198,792
NET ASSETS CONSIST OF
Capital stock (1,067,946 shares outstanding) (Note 8) $25,201,348
Accumulated net realized gains on investments 4,661,797
Net unrealized appreciation on investments (Note 5) 1,415,596
Undistributed net investment loss (79,949)
NET ASSETS $31,198,792
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE
($31,198,792 divided by 1,067,946 shares) $ 29.21
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See accompanying notes.
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<CAPTION>
The Fairmont Fund
Statement of Operations
(Unaudited)
Six Months Ended June 30, 1996
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INVESTMENT INCOME (Note 2)
Dividends $ 100,865
Interest 70,685
Total investment income 171,550
EXPENSES
Management fee (Note 3) 251,499
Net investment loss (79,949)
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS (Note 2)
Net realized gains from investment transactions 5,219,998
Net change in unrealized appreciation on investments (2,827,861)
Net realized and unrealized gains on investments 2,392,137
Net increase in net assets resulting
from operations $2,312,188
</TABLE>
See accompanying notes.
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<TABLE>
<CAPTION>
The Fairmont Fund
Statement of Changes in Net Assets
(Unaudited)
Six Months Ended June 30, 1996 and Year Ended December 31, 1995
<S> <C> <C> <C> <C>
1996 1995
FROM OPERATIONS
Net investment loss $ (79,949) $ (136,265)
Net realized gains on investments 5,219,998 3,460,455
Net change in unrealized appreciation
on investments (2,827,861) 2,774,041
Net increase in net assets
resulting from operations 2,312,188 6,098,231
DISTRIBUTIONS TO SHAREHOLDERS (Note 4)
Distributions from net investment income 0 (3,458,598)
FROM CAPITAL SHARE TRANSACTIONS (Note 8) Shares Shares
Proceeds from sale of shares 60,315 1,719,361 106,454 2,870,723
Shares issued in reinvestment
of distributions 0 0 122,781 3,317,538
Payments for shares redeemed (35,639) (1,023,758) (108,307) (2,831,640)
Net increase or decrease in net assets
from capital share transactions 24,676 695,603 120,928 3,356,621
Net increase in net assets 3,007,791 5,996,254
NET ASSETS
Beginning of year 28,191,001 22,194,747
End of period $31,198,792 $28,191,001
</TABLE>
See accompanying notes.
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<TABLE>
<CAPTION>
The Fairmont Fund
Financial Highlights
(Unaudited)
(For a Share Outstanding Throughout Each Period)
<S> <C> <C> <C> <C> <C>
Six Months Years Ended
Ended December December December December
June 30 31 31 31 31
1996 1995 1994 1993 1992
Net Asset Value, Beginning of Period $ 27.02 24.06 22.43 19.41 17.02
Income From Investment Operations
Net Investment Income (.06) (.08) (.16) (.14) (.17)
Net Gains or Losses on Securities
(both realized and unrealized) 2.25 6.80 1.79 3.16 2.56
Total From Investment Operations 2.19 6.72 1.63 3.02 2.39
Less Distributions
Dividends (from net investment income) .00 .00 .00 .00 .00
Distributions (from capital gains) .00 3.76 .00 .00 .00
Returns of Capital .00 .00 .00 .00 .00
Total Distributions .00 3.76 .00 .00 .00
Net Asset Value, End of Period $29.21 27.02 24.06 22.43 19.41
Total Return 16.21% (a) 27.92% 7.27% 15.56% 14.04%
Ratios/Supplemental Data
Net Assets, End of Period (in 000s) $ 31,199 $ 28,191 $22,195 $ 18,884 $ 16,788
Ratio of Expenses to Average Net Assets 1.64% (a) 1.70% 1.74% 1.78% 1.79%
Ratio of Net Income to Average Net Assets (.52)%(a) (.55)% (.79)% (.66)% (.85)%
Portfolio Turnover Rate 3.38 (a) 2.47 2.75 1.55 1.32
Average Commission Rate .055
<FN>
(a) Computed on an annualized basis.
</FN>
</TABLE>
See accompanying notes.
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The Fairmont Fund
Notes to Financial Statements
(Unaudited)
June 30, 1996
(1) Organization
The Fairmont Fund (The Fund) is a no-load, diversified series of The
Fairmont Fund Trust (The Trust), which is a Kentucky Business Trust and an
open-end investment company registered under the Investment Company Act of
1940. The Fund was established under a declaration of trust dated December
29, 1980 and began offering its shares publicly on September 2, 1981.
(2) Summary of Significant Accounting Policies
(a) Valuation of Investment Securities - Purchases and sales of
securities are recorded on a trade date basis. Portfolio securities which are
traded on stock exchanges or in the over-the-counter markets are valued at the
last sale price as of 4:00 P.M. Eastern time on the day the securities are
being valued or, lacking any sales, at the mean between the closing bid and
asked prices. Fixed income securities are valued by using market quotations,
or independent pricing services which use prices provided by market makers or
estimates of market values obtained from yield data relating to instruments or
securities with similar characteristics. Securities and other assets for which
market quotations are not readily available are valued at fair value as
determined in good faith by or under the direction of the Board of Trustees.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis.
(b) Gains and Losses on Investment Securities - Gains and losses from
sales of investments are calculated on the "identified cost" method. Upon
disposition of a portion of the investment in a particular security, it is The
Fund's general practice to first select for sale those securities which
qualify for long-term capital gain or loss treatment for tax purposes.
(c) Repurchase Agreements - The Fund may acquire repurchase agreements
from banks or security dealers (the Seller) which the Board of Trustees and
the Adviser have determined creditworthy. The Seller of the repurchase
agreement is required to maintain the value of collateral at not less than the
repurchase price, including accrued interest. Securities pledged as
collateral for repurchase agreements are held by The Fund's custodian in the
Federal Reserve/Treasury book-entry system.
(d) Capital Shares - The Fund records purchases of its capital shares
at the daily net asset value next determined after receipt of a shareholder's
check or wire and application in proper form. Redemptions are recorded at the
net asset value next determined following receipt of a shareholder's written
request in proper form.
(3) Investment Advisory Agreement, Commissions and Related Party
Transactions
The Investment Advisory Agreement (the Agreement) provides that The
Sachs Company (the Adviser) will pay all of The Trust's operating expenses,
including fees to disinterested trustees, but excluding brokerage fees and
commissions, taxes, interest and extraordinary expenses. The Adviser also pays
The Fund's officers' salaries. Under the terms of the Agreement, The Fund
pays the Adviser a fee at the rate of 2% of the first $10,000,000 of average
daily net assets, 1-1/2% of the next $20,000,000, and 1% of the average daily
net assets over $30,000,000. The management fee is accrued daily and paid
monthly. The Adviser received management fees of $251,499 for the six months
ended June 30, 1996.
Morton H. Sachs, a trustee of The Fund, is the president and sole
shareholder of the Adviser. The Adviser, as a registered broker-dealer of
securities, effected substantially all of the investment portfolio
transactions for The Fund. For this service the Adviser received commissions
of $330,541 for the six months ended June 30, 1996.
Certain officers and/or Trustees of The Fund are officers of the
Adviser.
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The Fairmont Fund
Notes to Financial Statements
(Unaudited)
June 30, 1996
(4) Distributions to Shareholders
No distributions to shareholders were declared for the six months ended June
30, 1996. The following is a summary of distributions to shareholders for the
year ended December 31, 1995.
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<S> <C> <C> <C> <C> <C>
Period Paid Per Share
Ended Date Declared In Cash Reinvested Total Amount
12/31/95 December 29, 1995 $141,060 $3,317,538 $3,458,598 $3.76
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(5) Investments
For the six months ended June 30, 1996, the cost of purchases and proceeds
from sales of investments, other than temporary cash investments, were
$48,397,751 and $48,884,576, respectively.
Following is information regarding unrealized appreciation (depreciation) and
aggregate cost of securities based upon federal income tax cost at June 30,
1996:
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<S> <C>
Tax Cost
Aggregate gross unrealized appreciation for
all securities with value in excess of cost $2,663,318
Aggregate gross unrealized depreciation for
all securities with cost in excess of value (1,519,939)
Net unrealized appreciation $1,143,379
Aggregate cost of securities $28,497,520
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(6) Income Taxes
It is The Fund's policy to comply with the special provisions of the Internal
Revenue Code available to investment companies and, in the manner provided
therein, to distribute substantially all of its income to shareholders.
Therefore no tax provision is required.
(7) There are no reportable financial instruments which have any off-balance
sheet risk as of June 30, 1996.
(8) At June 30, 1996 an indefinite number of capital shares (no par value)
were authorized, and paid-in capital amounted to $25,201,348. Transactions in
capital shares were as follows:
<TABLE>
<S> <C>
Shares sold 60,315
Shares redeemed ( 35,639)
Net increase 24,676
Shares outstanding:
Beginning of period 1,043,270
Ending of period 1,067,946
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