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[GINTEL LOGO]
GINTEL ERISA FUND
SEMIANNUAL REPORT TO
SHAREHOLDERS
JUNE 30, 1995
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GINTEL ERISA FUND
A growth and income fund exclusively for conservative, tax-exempt equity
investors including corporate pension/profit sharing plans, endowment funds,
Keogh and IRA plans. The minimum initial investment for corporate pension plans
is $10,000; for IRA's and Keogh's the minimum is $2,000. There is no minimum on
additional investments.
SUMMARY OF INVESTMENT RESULTS*
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<S> <C>
1995 (6 mos.) 15.3%
1994 -21.3%
1993 5.4%
1992 14.4%
1991 13.5%
1990 -5.1%
1989 15.5%
1988 22.0%
1987 -1.0%
1986 22.4%
1985 24.0%
1984 2.2%
1983 27.5%
1982 27.9%
Average Annual Total
Return Since Inception 12.1%
</TABLE>
*Investment results are net of expenses, with dividends and capital gains
reinvested.
Past results offer no assurance as to future performance. The investment return
and principal value of an investment will fluctuate, so that an investor's
shares when redeemed may be worth more or less than their original cost. The
Fund's prospectus contains more complete information and should be read
carefully.
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July 14, 1995
Fellow Shareholders:
The Fund's net asset value appreciated 15.3% in the first six months of 1995.
Our largest holding, Capstead Mortgage, has recovered much of the value that it
lost last year. Capstead's earnings and dividends have begun a strong recovery
and could reach an annualized rate of $4.00 per share in early 1996. The trash
collection business at Browning-Ferris continues to improve, while its recycling
and international divisions generate high growth rates. We anticipate record
profits for this year and next. Harris Corporation is experiencing improved
revenues and operating profits due to the recent growth in the electronic,
telecommunication and semiconductor markets they serve. Under the direction of
their new Chief Executive Officer, Phil Farmer, we expect further progress from
Harris. Other large holdings that have contributed to our strong first half
results are Willamette, OHM Corporation, Chart Industries, Fannie Mae and
Schlumberger. Our cash position stood at 18.1% at the end of June.
At the beginning of the year we predicted that the rise in interest rates would
subside, that economic recovery would continue both here and abroad, that
corporate earnings would show substantial growth, and that Congress would
address important structural reforms. With these predictions becoming reality,
both the stock and bond markets had broad advances. The Dow Jones Industrial
Average forged ahead into new high ground, fueled by sharply declining interest
rates which fell lower than anybody would have forecast just six months ago.
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As of July 14th, the Fund's net asset value since year-end increased further to
20.5%. Our cash position has now increased to 25% of the portfolio's assets. We
are cautious, not bearish. The market has had a sharp run-up in stock prices
which is usually followed by a period of profit-taking. Furthermore, last year's
spate of interest rate hikes had probably contributed to the recent weaknesses
which have surfaced in some sectors of the economy. We expect the economy to
perk up again in the fourth quarter, but we would prefer to lock in some gains
and have a larger cash position while we see what happens during the summer
doldrums that are upon us.
As you may have read, Chase Manhattan Bank, N.A., has purchased U.S. Trust
Company of New York's mutual fund servicing business, including Mutual Funds
Service Company in Boston. Although Chase will become the new custodian of the
Fund's assets, Mutual Funds Service Company will remain the Fund's transfer
agent and, consequently, there will be no administrative impact on our
shareholders. We will continue to offer the UST Master Fund Money Market Funds,
and all IRA accounts will be assigned to Chase as the new custodian. This
transaction is currently awaiting regulatory approval which is expected
sometime in August.
We appreciate your continued loyalty and support. Shareholders will note that
both Cecil Godman and Ed Carroll are co-managing the Fund's portfolio.
Cordially,
/s/ Robert M. Gintel /s/ Cecil A. Godman, III /s/ Edward F. Carroll
- -------------------- ------------------------ ---------------------------
Robert M. Gintel Cecil A. Godman, III Edward F. Carroll
Chairman Chief Investment Officer Vice President --
Investment Research
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<TABLE>
<CAPTION>
GINTEL ERISA FUND Statement of Net Assets As of June 30, 1995
(Unaudited)
NUMBER
OF MARKET
SHARES COST** VALUE
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COMMON STOCKS
<S> <C> <C> <C>
MORTGAGE INVESTMENTS (15.4%)
120,000 Capstead Mortgage Corporation $1,850,958 $3,225,000
10,000 Federal National Mortgage Association 728,750 943,750
ENVIRONMENTAL SERVICES (10.3%)
50,000 Browning-Ferris Industries, Inc 1,411,036 1,806,250
82,500 OHM Corporation* 651,501 1,000,313
DIVERSIFIED INDUSTRIES (9.5%)
310,000 Chart Industries, Inc 1,558,625 1,627,500
25,000 Ogden Corporation 548,375 546,875
33,000 Portec, Inc 388,845 400,125
FOREST PRODUCTS -- PAPER (8.3%)
25,000 Willamette Industries, Inc 1,186,425 1,387,500
10,000 International Paper Company 719,375 857,500
TEXTILE -- APPAREL (7.6%)
225,000 Oneita Industries, Inc.+ 3,010,290 2,053,125
OILFIELD SERVICES (5.9%)
20,000 Schlumberger Limited 1,190,438 1,242,500
15,000 McDermott International, Inc 310,625 361,875
ELECTRONIC SYSTEMS & EQUIPMENT (5.7%)
30,000 Harris Corporation 1,244,371 1,548,750
OIL & GAS (4.1%)
8,000 Exxon Corporation 461,000 565,000
10,000 Kerr McGee 538,125 536,250
INTEGRATED STEEL PRODUCER (3.8%)
30,000 USX - US Steel Group 1,051,825 1,031,250
COPPER PRODUCER (3.3%)
15,000 Phelps Dodge Corporation 878,422 885,000
SPECIALTY CHEMICALS (3.0%)
15,000 The B.F. Goodrich Company 646,013 804,375
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<TABLE>
<CAPTION>
GINTEL ERISA FUND Statement of Net Assets (continued) As of June 30, 1995
(Unaudited)
NUMBER
OF MARKET
SHARES COST** VALUE
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<S> <C> <C> <C>
DIVERSIFIED CHEMICAL PRODUCER (2.5%)
10,000 E.I. du Pont de Nemours and Company 574,113 687,500
KITCHEN & HOUSEHOLD PRODUCTS (1.3%)
5,000 Proctor & Gamble Company 286,562 359,375
FOOD PRODUCTS (1.3%)
12,500 Sara Lee Corporation 268,000 356,250
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Total Common Stocks (82.0%) 19,503,674 22,226,063
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PRINCIPAL
AMOUNT
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CASH EQUIVALENTS
5,135,000 U.S. Trust Repurchase Agreement
5.90% due 7/3/95 (Collateralized
by U.S. Government Obligations) 5,135,000 5,135,000
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Total Cash Equivalents (18.9%) 5,135,000 5,135,000
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Total Investments (100.9%) $24,638,674 27,361,063
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Liabilities Net of Other
Assets (-0.9%) (237,776)
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Net Assets Applicable to Outstanding
Shares (100.0%) $27,123,287
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Net asset value per share-based on 1,036,527 shares of
beneficial interest (offering and redemption price) $26.17
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* Non-income producing investments
** Cost basis for Federal income tax purposes
+ Robert Gintel is Chairman of the Board of Oneita Industries and owns 16% of
its common stock. As a result, Oneita may be deemed to be an affiliate of
the Fund.
The accompanying notes to financial statements are an integral part hereof.
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<TABLE>
<CAPTION>
GINTEL ERISA FUND Statement of Operations June 30, 1995
(Unaudited)
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 345,250
Interest 89,296
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Total investment income 434,546
EXPENSES:
Administrative services fee (Note D) $ 188,721
Investment advisory fee (Note C) 150,976
Trustees' fees 13,635
Taxes 992
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Total Expenses 354,324
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NET INVESTMENT INCOME 80,222
NET REALIZED LOSS ON INVESTMENTS (1,817,078)
NET INCREASE IN UNREALIZED APPRECIATION OF INVESTMENTS 5,666,419
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NET GAIN ON INVESTMENTS 3,849,341
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,929,563
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The accompanying notes to financial statements are an integral part hereof.
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<TABLE>
<CAPTION>
GINTEL ERISA FUND Statement of Changes in Net Assets (Unaudited)
SIX MONTHS YEAR
ENDED 6/30/95 ENDED 12/31/94
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<S> <C> <C>
OPERATIONS:
Net investment income $ 80,222 $ 587,258
Net realized loss on investments (1,817,078) (1,956,031)
Net increase (decrease) in unrealized appreciation
of investments 5,666,419 (8,704,711)
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Net increase (decrease) in net assets from operations 3,929,563 (10,073,484)
DISTRIBUTIONS TO SHAREHOLDERS:
Investment income -- (581,627)
Net realized gains from investments -- --
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Net decrease from distributions -- (581,627)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued 168,280 1,962,228
Reinvestment of dividends -- 579,374
Cost of shares repurchased (7,026,729) (12,928,744)
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Net decrease from capital
share transactions (6,858,449) (10,387,142)
Total Decrease (2,928,886) (21,042,253)
Net Assets -- Beginning of Year 30,052,173 51,094,426
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Net Assets -- End of Period $ 27,123,287 $ 30,052,173
============ ============
NET ASSETS CONSIST OF:
Capital Stock $ 28,099,811 $ 34,958,260
Undisributed net investment income 85,853 5,631
Undistributed net realized losses
from security transactions (3,784,765) (1,967,687)
Unrealized appreciation (depreciation)on investments 2,722,388 (2,944,031)
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$ 27,123,287 $ 30,052,173
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The accompanying notes to financial statements are an integral part hereof.
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<TABLE>
<CAPTION>
GINTEL ERISA FUND Condensed Financial Information (Per Share Income and Capital Changes*) (Unaudited)
Year Ended December 31
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Six Months
Ended 6/30/95 1994 1993 1992 1991
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<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 22.70 $ 29.41 $ 35.38 $ 31.49 $ 29.29
Income from
Investment Operations
Net investment income .07 .45 .41 .57 1.01
Net realized and unrealized
gain (loss) on securities 3.40 (6.71) 1.42 3.96 2.94
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Total from Investment Income 3.47 (6.26) 1.83 4.53 3.95
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Less: Distributions
Net investment income - .45 .41 .57 .84
Capital gains - - 7.39 .07 .91
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Total Distributions - .45 7.80 .64 1.75
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Net Asset Value, End of Period $ 26.17 $ 22.70 $ 29.41 $ 35.38 $ 31.49
====================================================================================================================================
Total Return 15.3% -21.3% 5.4% 14.4% 13.5%
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Ratios/Supplemental Data
Net assets, end of period $27,123,287 $30,052,173 $51,094,426 $56,380,619 $73,190,436
Ratio of operating expenses to
average net assets (Note D) 2.6%** 2.6%** 2.2%** 1.7% 1.5%
Ratio of net investment
income to average net assets 0.6% 1.4% 1.0% 1.5% 2.4%
Portfolio turnover rate 17.7% 104.4% 99.3% 79.8% 96.8%
Shares outstanding, end of period 1,036,527 1,323,836 1,737,287 1,593,610 2,324,490
</TABLE>
* The above per share information is based upon a daily average of shares
outstanding.
** The Fund's expense ratio includes brokerage commissions on portfolio
transactions paid for under the Fund's Administrative Services fee, and,
therefore, may appear higher than those of other mutual funds as well as
for the Fund in prior years. Other mutual funds do not include brokerage
commissions in their operating expenses, but instead add them to the cost
of securities purchased or deduct them from the proceeds of securities
sold.
The accompanying notes to financial statements are an integral part hereof.
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GINTEL ERISA FUND Notes to Financial Statements June 30, 1995
(Unaudited)
(NOTE A) -- ORGANIZATION:
The Gintel ERISA 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 stockholders.
Therefore, only a nominal Federal income tax provision is required. At June
30, 1995, the Fund had available a capital loss carry-forward of approximately
$1,950,000 expiring principal in 2002.
3. Other:
As is common in the industry, security transactions are accounted for on the
trade date. Dividend income and distributions to shareholders are recorded on
the ex-dividend date.
Realized gain or loss on security transactions is determined on the basis of
first-in, first-out or specific identification.
(NOTE C) -- INVESTMENT ADVISORY AGREEMENT:
The Fund has entered into an Investment Advisory Agreement with Gintel Equity
Management, Inc., a related party, which provides for an annual fee of 1% to be
paid quarterly, based on the daily value of the Fund's net assets during the
preceding quarter. The fee will be reduced for any fiscal year, if the Fund's
expenses, as defined, exceed certain limitations.
(NOTE D) -- ADMINISTRATIVE SERVICES AGREEMENT:
The Fund entered into an Administrative Services Agreement dated April 1, 1993,
which provides that in consideration for the services provided by Gintel & Co.,
the Fund's Distributor and a related party, and the payment by the Distributor
of substantially all of the Fund's expenses previously paid by the Fund
directly, including but not limited to brokerage commissions and operating
expenses (but excluding the Investment Advisor's fees, the fees paid to
non-interested Trustees, certain transaction costs, interest, taxes and
extraordinary expenses), the Distributor will receive a fee payable at the
beginning of each quarter based on average daily net assets during the preceding
quarter, at an annual rate of 1.25% of the first $50 million of the average
daily net assets of the Fund, 1.125% of the next $50 million of the average
daily net assets and 1.0% of the average daily net assets in excess of $100
million.
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GINTEL ERISA FUND Notes to Financial Statements -- continued June 30,1995
(Unaudited)
(NOTE E) -- OTHER MATTERS:
1. Investments
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<S> <C>
Unrealized appreciation at June 30, 1995 $ 3,703,504
Unrealized depreciation at June 30, 1995 (981,115)
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$ 2,722,389
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FOR THE SIX MONTHS ENDED JUNE 30, 1995
Purchases of securities other than short-term investments $ 2,140,251
Sales of securities other than short-term investments $ 11,293,029
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2. Capital Stock: (in shares)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31, 1994
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<S> <C> <C>
Shares issued 6,903 72,736
Shares reinvested - 25,579
Shares repurchased (294,212) (511,766)
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Net decrease (287,309) (413,451)
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</TABLE>
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GINTEL ERISA FUND TRUSTEES AND OFFICERS
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Robert M. Gintel Chairman, Trustee, and Chief Executive Officer
Chairman and Chief Executive Officer, Gintel Equity
Management, Inc.; Senior Partner, Gintel & Co. Limited
Partnership; Chairman and Director, Oneita Industries;
Vice Chairman and Director, XTRA Corporation;
Director, Amtech Corporation; Chairman, Trustee, and
Chief Executive Officer, Gintel Fund.
Thomas H. Lenagh Trustee
Financial Consultant; formerly Chairman and Chief
Executive Officer of Greiner Engineering Co.; Director,
Adams Express Co., USLife Corp., ICN Biomedics, Inc.,
SCI Systems, Inc., Irvine Sensors Corp., CML Inc.,
Clemente Global, Rexhall Inc.; Trustee, Gintel Fund.
Francis J. Palamara Trustee
Business Consultant; previously Director and Executive
Vice President of ARA Services, Inc.: formerly
Executive Vice President and Chief Operating Officer of
the New York Stock Exchange, Inc.; Director, Glenmede
Fund, XTRA Corporation; Trustee, Gintel Fund.
Russel R. Taylor Trustee
Associate Professor of Management and Marketing,
Director of H.W. Taylor Institute of Entrepreneurial
Studies, College of New Rochelle; Founder of Russel
Taylor, Inc.; Trustee, Gintel Fund.
Stephen G. Stavrides Trustee, President, and Treasurer
President, Gintel Equity Management, Inc.; General
Partner and Chief Operating Officer, Gintel & Co.
Limited Partnership; Trustee, President, and Treasurer
Gintel Fund.
Donna K. Grippe Secretary and Assistant Treasurer
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<CAPTION>
INVESTMENT ADVISOR GINTEL GROUP
<S> <C>
Gintel Equity Management, Inc. c/o Mutual Funds Service Company
6 Greenwich Office Park P. O. Box 2798
Greenwich, CT 06831-5197 Boston, MA 02208-2798
203 622-6400 800 344-3092
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