THE FAIRMONT FUND
UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 1999
<PAGE>
THE FAIRMONT FUND
SCHEDULE OF INVESTMENTS
(UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
INVESTMENTS IN SECURITIES
COMMON STOCKS (SHARES) Value Percent
---------------------
<S> <C> <C> <C> <C>
AIRLINE
5,000 UAL Corporation (a) ......................... $ 325,000 1.80%
----------
BANKING
20,000 Compass Bancshares, Inc. .................... 545,000
35,000 Texas Regional Bancshares, Inc. ............. 951,563
8,000 Union Planters Corporation .................. 357,500
----------
1,854,063 10.25
----------
BROKER/DEALER
7,000 American Express Company .................... 910,875
20,000 A. G. Edwards, Inc. ......................... 645,000
----------
1,555,875 8.60
----------
BUILDING PRODUCTS
20,000 Johns Manville Corporation .................. 263,750 1.46
----------
BUSINESS SERVICES
139,400 Butler International, Inc. (a) .............. 1,864,475 10.31
----------
COMPUTER PERIPHERALS
5,000 Hauppauge Digital, Inc (a) .................. 97,500 0.54
----------
COMPUTER SOFTWARE
35,000 Software Spectrum (a) ....................... 568,750 3.14
----------
PERSONAL SERVICES
67,500 Regis Corporation ........................... 1,295,156 7.16
----------
PHARMACEUTICALS
15,000 Genzyme Corporation (a) ..................... 727,500
2,685 Genzyme Corp. Surgical Products Division (a) 11,831
7,000 Eli Lilly and Company ....................... 501,375
15,000 Novartis AG ................................. 1,102,500
8,000 Warner Lambert Company ...................... 555,000
----------
2,898,206 16.02
----------
REAL ESTATE INVESTMENT TRUSTS
35,000 Crescent Real Estate Equities Company ....... 831,250
55,000 RFS Hotel Investors, Inc. ................... 690,938
----------
1,522,188 8.41
----------
RETAIL ELECTRONICS
10,000 Circuit City Stores, Inc. ................... 930,000 5.14
----------
See accompanying notes.
-1-
<PAGE>
THE FAIRMONT FUND
SCHEDULE OF INVESTMENTS
(UNAUDITED)
JUNE 30, 1999
INVESTMENTS IN SECURITIES (CONTINUED)
COMMON STOCKS (SHARES) VALUE PERCENT
SAVINGS INSTITUTIONS
45,000 MECH Financial, Inc. .........................$1,687,500
20,000 Webster Preferred Capital Corporation ........ 542,500
----------
2,230,000 12.33%
----------
STAFFING SERVICES
30,000 Manpower, Inc. ............................... 678,750 3.75
----------
TEXTILES
42,000 Pillow Tex Corporation ....................... 685,125 3.79
----------
VEHICLE RENTAL
50,000 Budget Group, Inc. ........................... 615,625 3.40
----------
TOTAL COMMON STOCKS (Cost $15,002,165) ................17,384,463 96.10
BANK REPURCHASE AGREEMENT
With Firstar Bank, issued 6/30/99 due 7/1/99,
fully collateralized by US Treasury Notes 7.75%
due 11/30/99 (Cost $1,567,000) ..................... 1,567,000 8.65
---------- -------
TOTAL INVESTMENTS (Cost $16,569,165) ............18,951,463 104.75
OTHER ASSETS LESS LIABILITIES ................... (859,516) (4.75)
---------- -------
NET ASSETS ................................$18,091,947 100.00%
=========== =======
<FN>
(a) Common stocks which have not declared a dividend in 1999.
</FN>
</TABLE>
See accompanying notes.
-2-
<PAGE>
THE FAIRMONT FUND
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
JUNE 30, 1999
<TABLE>
<CAPTION>
ASSETS
INVESTMENTS IN SECURITIES, At Value (Note 2)
<S> <C> <C>
Common stocks (Cost $15,002,165)..................$ 17,384,463
Bank repurchase agreement ........................ 1,567,000
------------
Total investments in securities..........................$ 18,951,463
CASH ............................................................. 865
RECEIVABLES
Investment securities sold ....................... 492,606
Dividends ........................................ 19,439
Interest ......................................... 143
------------
Total receivables ....................................... 512,188
-------------
Total assets ....................................... 19,464,516
LIABILITIES
PAYABLES
Investment securities purchased...................$ 1,349,840
Management fee (Note 3) .......................... 22,157
Other ............................................ 572
------------
Total liabilities ....................................... 1,372,569
-------------
NET ASSETS .......................................................$ 18,091,947
=============
NET ASSETS CONSIST OF
Capital stock (729,163 shares outstanding) (Note 8)..........$ 16,501,827
Accumulated net realized losses on investments .............. (784,746)
Net unrealized appreciation on investments (Note 5) ......... 2,382,298
Undistributed net investment loss ........................... (7,432)
-------------
NET ASSETS .......................................................$ 18,091,947
=============
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE
($18,091,947 divided by 729,163 shares)......................$ 24,81
==============
</TABLE>
See accompanying notes.
-3-
<PAGE>
THE FAIRMONT FUND
STATEMENT OF OPERATIONS
(UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
INVESTMENT INCOME (Note 2)
<S> <C>
Dividends........................................................$ 146,173
Interest ......................................................... 12,783
Other ............................................................ 4,634
-----------
Total investment income ...................................... 163,590
EXPENSES
Management fee (Note 3) .......................................... 171,022
-----------
Net investment loss ..................................... (7,432)
-----------
NET REALIZED AND UNREALIZED LOSSES ON INVESTMENTS (Note 2)
Net realized gains from investment transactions .................. 360,169
Net change in unrealized appreciation on investments .............(1,809,347)
-----------
Net realized and unrealized losses on investments ............(1,449,178)
-----------
Net decrease in net assets resulting from operations....$(1,456,610)
===========
</TABLE>
See accompanying notes.
-4-
<PAGE>
THE FAIRMONT FUND
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1999 AND YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
1999 1998
--------- ----------
FROM OPERATIONS
<S> <C> <C>
Net investment loss................................$ (7,432) $ (49,359)
Net realized gains on investments ................. 360,169 (632,722)
Net change in unrealized appreciation
on investments ................................ (1,809,347) (844,173)
----------- -----------
Net decrease in net assets
resulting from operations ..................... (1,456,610) (1,526,254)
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS (Note 4)
Distributions from net investment income .......... 0 0
----------- -----------
FROM CAPITAL SHARE TRANSACTIONS (Note 8) Shares Shares
---------- ---------
<S> <C> <C> <C> <C>
Proceeds from sale of shares ...................... 7,072 171,452 42,180 1,166,930
Shares issued in reinvestment
of distributions .............................. 0 0 0 0
Payments for shares redeemed ...................... (183,358) (4,462,109) (287,415) (7,657,202)
----------- ------------ ------------ ------------
Net decrease in net assets
from capital share transactions ............... (176,286) (4,290,657) (245,235) (6,490,272)
=========== ------------ ============ ------------
Net increase or decrease in net assets ........ (5,747,267) (8,016,526)
NET ASSETS
Beginning of year ................................. 23,839,214 31,855,740
------------ -----------
End of period......................................$18,091,947 $23,839,214
============ ===========
</TABLE>
See accompanying notes.
-5-
<PAGE>
THE FAIRMONT FUND
FINANCIAL HIGHLIGHTS
(UNAUDITED)
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED
--------------------------------------
ENDED DECEMBER DECEMBER DECEMBER DECEMBER
JUNE 30 31 31 31 31
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............$ 26.33 27.68 26.45 27.02 24.06
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income......................... ( .27) ( .27) ( .16) ( .10) ( .08)
Net Gains or Losses on Securities
(both realized and unrealized)............ ( 1.25) ( 1.08) 4.20 2.67 6.80
------ ------- ------- ------- --------
Total From Investment Operations............ ( 1.52) ( 1.35) 4.04 2.57 6.72
LESS DISTRIBUTIONS
Dividends (from net investment income)........ .00 .00 .00 .00 .00
Distributions (from capital gains)............ .00 .00 2.81 3.14 3.76
Returns of Capital............................ .00 .00 .00 .00 .00
------- -------- ------- ------- --------
Total Distributions......................... .00 .00 2.81 3.14 3.76
Net Asset Value, End of Period..................$ 24.81 26.33 27.68 26.45 27.02
======= ======== ======= ======= ========
TOTAL RETURN..................................... ( 11.54)%(a) ( 4.88)% 15.27% 9.52% 27.92%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (in 000s).............. $ 18,092 $ 23,839 $ 31,856 $ 30,731 $ 28,191
Ratio of Expenses to Average Net Assets.......... 1.72 %(a) 1.68% 1.63% 1.66% 1.70%
Ratio of Net Income to Average Net Assets........ ( .07)%(a) ( .18)% ( .57)% ( .59)% ( .55)%
Portfolio Turnover Rate.......................... 1.86 (a) 3.42 1.83 2.37 2.47
<FN>
(a) Computed on an annualized basis.
</FN>
</TABLE>
See accompanying notes.
-6-
<PAGE>
THE FAIRMONT FUND
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1999
(1) Organization
The Fairmont Fund (The Fund) is a no-load, diversified series of The
Camelot Funds, formerly 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. The Fund's objective is capital appreciation which it seeks
to achieve by investing in equity securities that its Adviser believes are
undervalued.
(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.
(e) Estimates and Assumptions - The preparation of financial statements in
conformity with generally accepted accounting principles requires The Fund to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
(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 $171,022 for the six months ended June 30, 1999.
-7-
<PAGE>
THE FAIRMONT FUND
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1999
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 $92,056 for
the six months ended June 30, 1999.
Certain officers and/or Trustees of The Fund are officers of the Adviser.
(4) Distributions to Shareholders
No distributions to shareholders were declared for the six months ended June 30,
1999 or for the year ended December 31, 1998.
(5) Investments
For the six months ended June 30, 1999, the cost of purchases and proceeds from
sales of investments, other than temporary cash investments, were $17,764,354
and $21,883,595, respectively.
Following is information regarding unrealized appreciation (depreciation) and
aggregate cost of securities based upon federal income tax cost at June 30,
1999:
Tax Cost
Aggregate gross unrealized appreciation for
all securities with value in excess of cost...........$ 3,302,498
Aggregate gross unrealized depreciation for
all securities with cost in excess of value............ (1,064,029)
-----------
Net unrealized appreciation................................$ 2,238,469
============
Aggregate cost of securities...............................$ 15,145,994
============
(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, 1999.
(8) At June 30, 1999 an indefinite number of capital shares (no par value) were
authorized, and paid-in capital amounted to $16,501,827. Transactions in capital
shares were as follows:
Shares sold..................................... 7,072
Shares redeemed................................. ( 183,358)
----------
Net decrease.................................... ( 176,286)
Shares outstanding:
Beginning of period.................... 905,449
-----------
Ending of period....................... 729,163
===========
