<PAGE> 1
GINTEL
GINTEL
GINTEL ERISA FUND
ANNUAL REPORT TO
SHAREHOLDERS
DECEMBER 31, 1995
<PAGE> 2
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*
<TABLE>
<S> <C>
1995 26.6%
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 12.5%
</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 22, 1996
Fellow Shareholders:
For the year ended December 31, 1995, Gintel ERISA Fund's net asset value per
share appreciated 26.6%, with dividends reinvested. Its performance was driven
by a few key positions that appreciated over 30% during the year, including
Capstead Mortgage, Chart Industries, Heinz, Schlumberger, and Exxon. The Fund
ended the year with a cash position of just over 10%.
In last year's Annual Report we stated that fears of stock market overvaluation
were unwarranted and that it was time to be invested. We also suggested that
inflation concerns were overblown and that further rises in interest rates were
unlikely. As it turned out, our outlook proved to be quite correct, with 1995
turning out to be a historic year in the financial markets. The Dow Jones
Industrial Average reached almost 70 new highs and gained 1,300 points during
the year, while the bond market ended the year with yields close to their lowest
levels in 15 years. The financial markets performed exceptionally well for a
number of reasons: the economy continued its solid growth; corporate profits
increased by almost 20%; wage and price inflation remained in check; the Federal
Reserve Board began lowering rates; and Congress finally started to tackle
fiscal problems and reform parts of the government that outlived their
usefulness or failed to achieve their goals.
For 1996 we expect continued economic growth of around 2.5%, with results in the
second half likely to be stronger than in the first half. For a number of
reasons, however, we are less optimistic about the growth in corporate profits.
The substantial improvement in corporate profit margins over the past few years,
stemming largely from cumulative restructuring and downsizing, is winding down,
while certain other costs, including raw materials and labor, are rising
modestly. In addition, weakness at the retail level has led to lower overall
economic activity and forced the bankruptcy of some long-established retailers.
With weaker corporate profits, this year's market may be dominated by sector
<PAGE> 4
rotation in stock groups rather than by across-the-board rises in equity prices,
as we saw in 1995. We believe that shorter-term interest rates will continue to
trend downward by 25 to 50 basis points, as the Federal Reserve Board lowers the
Fed Funds rate some time during the first half of the year. Inflation appears to
be under control, despite an upward blip that may occur during the first half of
the year due to a modest rise in energy and food prices.
In the short term, the financial markets are focused on the federal budget
talks. Whatever the outcome, we believe the November election will be
controversial and will force Americans to decide what services they want their
federal government to provide.
In summary, we are expecting the overall market averages to appreciate more
moderately than they did in 1995, although underlying stock price volatility may
increase. We are focusing on stocks for 1996 that are selling at reasonable
prices with strong balance sheets and good earnings prospects. There are still a
number of stocks to be found that are reasonably valued, despite the price
appreciation that took place in 1995.
On December 28, 1995, a $0.33 per share dividend, representing ordinary income,
was paid to Gintel ERISA Fund shareholders of record as of December 19, 1995.
For those of our shareholders who also have money market accounts with us, the
UST Master Money Fund and Government Money Fund changed their names at year-end
to Excelsior Money Fund and Excelsior Government Fund. Both Funds continue to be
managed by U. S. Trust Company of New York.
We wish all shareholders a prosperous New Year and want to express our
appreciation for your continued support.
Cordially,
Robert M. Gintel Cecil A. Godman, III Edward F. Carroll
Chairman Investment Manager Investment Manager
<PAGE> 5
GINTEL ERISA FUND Statement of Net Assets As of December 31, 1995
<TABLE>
<CAPTION>
NUMBER
OF MARKET
SHARES COST** VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
MORTGAGE INVESTMENTS (14.8%)
180,000 Capstead Mortgage Corporation $1,850,958 $4,117,500
DIVERSIFIED INDUSTRIES (11.7%)
300,000 Chart Industries, Inc. 1,420,685 2,287,500
30,000 Ogden Corporation 659,700 641,250
33,000 Portec, Inc.* 388,845 317,625
COPPER PRODUCER (11.2%)
50,000 Phelps Dodge Corporation 3,025,297 3,112,500
FOOD PRODUCTS (7.7%)
37,500 H.J. Heinz Company 1,059,375 1,242,188
50,000 Northland Cranberries, Inc. 766,880 887,500
ELECTRONIC SYSTEMS & EQUIPMENT (5.9%)
30,000 Harris Corporation 1,244,371 1,638,750
ENVIRONMENTAL SERVICES (5.3%)
50,000 Browning-Ferris Industries, Inc. 1,411,036 1,475,000
TEXTILE -- APPAREL (5.3%)
225,000 Oneita Industries, Inc.+* 3,010,290 1,462,500
OILFIELD SERVICES (5.0%)
20,000 Schlumberger Limited 1,190,437 1,385,000
OIL & GAS (4.6%)
8,000 Exxon Corporation 461,000 641,000
10,000 Kerr-McGee Corporation 538,125 635,000
FOREST PRODUCTS - PAPER (4.3%)
25,000 Union Camp Corporation 1,319,375 1,190,625
INTEGRATED STEEL PRODUCER (4.1%)
20,000 Nucor Corporation 989,563 1,142,500
INSURANCE (3.4%)
20,000 Mercury General Corporation 771,938 955,000
</TABLE>
<PAGE> 6
GINTEL ERISA FUND Statement of Net Assets(continued) As of December 31, 1995
<TABLE>
<CAPTION>
NUMBER
OF MARKET
SHARES COST** VALUE
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
NATURAL GAS PRODUCING & DISTRIBUTION (2.5%)
15,000 Consolidated Natural Gas Company 667,000 680,625
TRANSPORTATION - RAILROAD (2.2%)
9,000 Union Pacific Corporation 573,000 594,000
FOOD PRODUCTS (1.4%)
12,500 Sara Lee Corporation 268,000 398,437
Miscellaneous Securities (0.3%) 91,875 90,000
- -----------------------------------------------------------------------------------------
Total Common Stocks (89.7%) 21,707,750 24,894,500
- -----------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT
- -----------------------------------------------------------------------------------------
CASH EQUIVALENTS
2,847,000 Chase Securities, Inc. Repurchase Agreement
5.35% due 1/2/96 (Collateralized by U.S.
Government Obligations) 2,847,000 2,847,000
- -----------------------------------------------------------------------------------------
Total Cash Equivalents (10.2%) 2,847,000 2,847,000
- -----------------------------------------------------------------------------------------
Total Investments (99.9%) $24,554,750 27,741,500
===========
Other assets net of liabilities (0.1%) 24,576
- -----------------------------------------------------------------------------------------
Net Assets Applicable to
Outstanding Shares (100.0%) $27,766,076
=========================================================================================
Net asset value per share-based on 977,447 shares of
beneficial interest (offering and redemption price) $28.41
=========================================================================================
</TABLE>
* 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.
<PAGE> 7
GINTEL ERISA FUND Statement of Operations Year Ended December 31, 1995
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 723,900
Interest 207,259
----------
Total investment income 931,159
EXPENSES:
Administrative services fee (Note D) $ 363,186
Investment advisory fee (Note C) 290,547
Trustees' fees 28,675
Taxes 2,000
----------
Total Expenses 684,408
----------
NET INVESTMENT INCOME 246,751
NET REALIZED GAIN ON INVESTMENTS 176,028
NET INCREASE IN UNREALIZED APPRECIATION OF INVESTMENTS 6,130,781
----------
NET GAIN ON INVESTMENTS 6,306,809
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $6,553,560
==========
</TABLE>
The accompanying notes to financial statements are an integral part hereof.
<PAGE> 8
GINTEL ERISA FUND Statements of Changes in Net Assets Year Ended December 31
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income $ 246,751 $ 587,258
Net realized gain (loss) on investments 176,028 (1,956,031)
Net increase (decrease) in unrealized appreciation
of investments 6,130,781 (8,704,711)
------------ ------------
Net increase (decrease) in net assets
from operations 6,553,560 (10,073,484)
DISTRIBUTIONS TO SHAREHOLDERS:
Investment income (320,221) (581,627)
Net realized gains from investments -- --
------------ ------------
Net decrease from distributions (320,221) (581,627)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued 276,201 1,962,228
Reinvestment of dividends 319,573 579,374
Cost of shares repurchased (9,115,210) (12,928,744)
------------ ------------
Net decrease from capital
share transactions (8,519,436) (10,387,142)
Total Decrease (2,286,097) (21,042,253)
Net Assets - Beginning of Year 30,052,173 51,094,426
------------ ------------
Net Assets - End of Year $ 27,766,076 $ 30,052,173
============ ============
NET ASSETS CONSIST OF:
Capital Stock $ 26,438,824 $ 34,958,260
Undistributed net investment income (loss) (67,839) 5,631
Undistributed net realized losses
from security transactions (1,791,659) (1,967,687)
Unrealized appreciation (depreciation) on investments 3,186,750 (2,944,031)
------------ ------------
$ 27,766,076 $ 30,052,173
============ ============
</TABLE>
The accompanying notes to financial statements are an integral part hereof.
<PAGE> 9
GINTEL ERISA FUND Condensed Financial Information
(Per Share Income and Capital Changes*) Year Ended December 31
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ 22.70 $ 29.41 $ 35.38 $ 31.49 $ 29.29
Income from
Investment Operations
Net investment income .27 .45 .41 .57 1.01
Net realized and unrealized
gain (loss) on securities 5.77 (6.71) 1.42 3.96 2.94
- --------------------------------------------------------------------------------------------------------------------------------
Total from Investment Income 6.04 (6.26) 1.83 4.53 3.95
- --------------------------------------------------------------------------------------------------------------------------------
Less: Distributions
Net investment income .33 .45 .41 .57 .84
Capital gains -- -- 7.39 .07 .91
- --------------------------------------------------------------------------------------------------------------------------------
Total Distributions .33 .45 7.80 .64 1.75
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 28.41 $ 22.70 $ 29.41 $ 35.38 $ 31.49
================================================================================================================================
Total Return 26.6% -21.3% 5.4% 14.4% 13.5%
- --------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of year $ 27,766,076 $ 30,052,173 $ 51,094,426 $ 56,380,619 $ 73,190,436
Ratio of operating expenses to
average net assets (Note D) 2.5%** 2.6%** 2.2%** 1.7% 1.5%
Ratio of net investment
income to average net assets 0.9% 1.4% 1.0% 1.5% 2.4%
Portfolio turnover rate 52.7% 104.4% 99.3% 79.8% 96.8%
Shares outstanding, end of year 977,447 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.
<PAGE> 10
GINTEL ERISA FUND Notes to Financial Statements December 31, 1995
(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 shareholders.
Therefore, only a nominal Federal income tax provision is required. At December
31, 1995, the Fund had available a capital loss carryforward of approximately
$1,800,000, $1,055,000 expiring principally in 2002 and $745,000 expiring
principally in 2003.
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.
<PAGE> 11
GINTEL ERISA FUND Notes to Financial Statements -- continued December 31, 1995
(NOTE E) -- OTHER MATTERS:
<TABLE>
<S> <C>
1. Investments
Unrealized appreciation at December 31, 1995 $ 4,954,835
Unrealized depreciation at December 31, 1995 (1,768,085)
-----------
$ 3,186,750
===========
FOR THE YEAR ENDED DECEMBER 31, 1995
Purchases of securities other than short-term investments $12,694,773
Sales of securities other than short-term investments $21,560,842
</TABLE>
2. Capital Stock: (in shares)
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
----------------- -----------------
<S> <C> <C>
Shares issued 10,686 72,736
Shares reinvested 11,305 25,579
Shares repurchased (368,380) (511,766)
----------------- -----------------
Net decrease (346,389) (413,451)
================= =================
</TABLE>
<PAGE> 12
REPORT OF INDEPENDENT AUDITORS
Board of Trustees and Shareholders
Gintel ERISA Fund
Greenwich, Connecticut
We have audited the statement of net assets of the Gintel ERISA Fund as of
December 31, 1995, and the related statement of operations for the year then
ended, 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, 1995, 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 ERISA Fund as of December 31, 1995, the results of its
operations 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 22, 1996
<PAGE> 13
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 Equity 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 and Gintel ERISA 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 and is currently Chairman of the Board
of Oneita Industries, Vice Chairman of the Board of XTRA Corporation, and a
Director of Amtech Corporation. Mr. Gintel has lectured and written articles on
investments and has appeared on Wall Street Week and other television and radio
programs.
CECIL A. GODMAN, III
Mr. Godman joined the Gintel organization in 1985 after spending two
years as a securities analyst with First Tennessee Investment Management, Inc.,
a $1.8 billion asset management subsidiary of First Tennessee National
Corporation. He is a General Partner of Gintel & Co. and a director of Gintel
Equity Management, Inc. Mr. Godman received his B.A. in Business Administration
and Economics from Rhodes College in Memphis in 1982.
EDWARD F. CARROLL
Mr. Carroll joined Gintel Equity 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 35-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.
TIMOTHY J. MCSWEENEY
Mr. McSweeney joined Gintel Equity Management, Inc. in 1995 as a
securities analyst. He received his B.A. in economics from Clark University and
his M.B.A. from Northeastern University.
<PAGE> 14
GINTEL ERISA FUND TRUSTEES AND OFFICERS
- --------------------------------------------------------------------------------
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, Central Tractor Farm & Country; 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
INVESTMENT ADVISOR GINTEL GROUP
Gintel Equity Management, Inc. Chase Global Funds
Services Company
6 Greenwich Office Park P. O. Box 2798
Greenwich, CT 06831-5197 Boston, MA 02208-2798
203 622-6400 800 344-3092
