<PAGE> 1
[GINTEL LOGO]
GINTEL ERISA FUND
SEMIANNUAL REPORT TO
SHAREHOLDERS
JUNE 30. 1996
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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.
<TABLE>
<CAPTION>
SUMMARY OF INVESTMENT RESULTS*
<S> <C>
1996(6 mos.) 12.6%
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 12.9%
</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
July 12, 1996
Fellow Shareholders:
We are pleased to report that the Fund's net asset value per share increased
6.7% in the second quarter and 12.6% for the first six months of 1996. Because
of these strong financial results, our Fund ranked number 2 out of 60 growth
and income funds in its size category; number 37 out of all 553 growth and
income funds; and number 804 out of 5932 long-term taxable funds, according to
Lipper Analytical Services, Inc. These gains, along with last year's 23%
increase in net asset value per share, have more than made up the decline we
suffered in 1994.
During the quarter we took advantage of rising prices to lock in gains in Chart
Industries, Northland Cranberries, Phelps Dodge, Union Camp, Union Pacific and
Browning Ferris. We added to our holdings in Ogden Corporation and Mercury
General and took several new positions including Equitable Resources, American
Brands, and Intergraph. Our cash position increased to $7.2 million, or 25% of
the portfolio, by the end of the quarter.
Our short-term market and economic outlook is much more cautious than it has
been previously. We are very much troubled by the price volatility in certain
segments of the market and the recent emphasis on hot new issues and
speculative stocks. Historically, excesses such as these precede a market
correction.
From an economic point of view, we foresee a period of slower growth along with
inflationary pressure on profit margins because of rising labor costs and
higher commodity prices. The possibility of higher interest rates cannot be
ruled out either. We wonder, too, if the pending elections this fall won't
have a dampening effect on market psychology in the months immediately ahead.
For these and other reasons we are carrying large cash reserves until we become
more comfortable with the market environment or with the outlook for corporate
profits. We will still make selected investments when we think the price is
right and will take advantage of both short-term trading and long-term
investment opportunities as they are presented to us.
After the proliferation of mutual funds over the last five years, we are seeing
a growing trend towards consolidation in the mutual fund industry. Many
smaller management companies, such
<PAGE> 4
as ours, are merging their funds in order to more efficiently manage their
portfolios, reduce fees for their shareholders through economies of scale, and
better focus their limited marketing resources.
For these reasons, we, too, are actively considering merging the ERISA Fund
into Gintel Fund later this summer, making Gintel Fund the surviving entity.
We have already contacted a number of the larger ERISA Fund shareholders and
have received their preliminary support for the idea pending review of the
proxy material when it is completed. The merger benefits ERISA Fund
shareholders because it lowers operating expenses, provides greater portfolio
diversification, enables shareholders to track the Fund's performance in the
daily newspapers, and allows the investment staff to focus on producing the
best results for one single fund. In addition, the Gintel Fund has had a
better investment record over the years. We are preparing proxy materials for
review by the Securities and Exchange Commission and hopefully will hold a
Shareholders' Meeting in early September to discuss and approve the proposal.
For the past seven years we have been offering U.S. Trust's money market funds
as a convenience to our shareholders. In view of Chase Manhattan Bank's
purchase of U.S. Trust Company's mutual fund division, we have decided to
switch from the U.S. Trust-managed Excelsior Money Fund and Excelsior
Government Money Fund to comparable money market funds managed by Chase
Manhattan Bank. Shareholders who currently have money market accounts with us
will be receiving documentation in the next few weeks with respect to this
transfer from U.S. Trust's Excelsior Funds to either Vista Cash Management Fund
or Vista Federal Money Market Fund.
We thank you for your continued trust and confidence and look forward to seeing
those of you who can attend the special shareholder meeting.
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 Investment Manager Investment Manager
<PAGE> 5
GINTEL ERISA FUND Statement of Net Assets As of June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
NUMBER
OF MARKET
SHARES COST** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
MORTGAGE BANKING (17.4%)
------------------------
180,000 Capstead Mortgage Corporation $1,850,958 $5,017,500
OIL & GAS (10.3%)
-----------------
20,000 Schlumberger Limited 1,190,437 1,685,000
8,000 Exxon Corporation 461,000 695,000
10,000 Kerr-McGee Corporation 538,125 608,750
FOOD PRODUCTS (7.4%)
--------------------
37,500 H.J. Heinz Company 1,059,375 1,139,062
20,000 Northland Cranberries, Inc. 285,000 600,000
12,500 Sara Lee Corporation 268,000 404,688
DIVERSIFIED MANUFACTURING & SERVICES (6.5%)
-------------------------------------------
75,000 Ogden Corporation 1,483,287 1,359,375
30,000 Portec, Inc.* 352,549 300,000
15,000 Chart Industries, Inc. 210,249 211,875
NATURAL GAS PRODUCING & DISTRIBUTION (6.4%)
-------------------------------------------
30,000 Consolidated Natural Gas Company 1,348,650 1,567,500
10,000 Equitable Resources, Inc. 285,000 282,500
ELECTRONIC SYSTEMS & EQUIPMENT (6.3%)
-------------------------------------
30,000 Harris Corporation 1,244,371 1,830,000
COMPUTER GRAPHIC SYSTEMS (4.2%)
-------------------------------
100,000 Intergraph Corporation 1,265,124 1,212,500
INSURANCE (3.8%)
----------------
25,000 Mercury General Corporation 994,438 1,093,750
TEXTILE -- APPAREL (2.8%)
-------------------------
225,000 Oneita Industries, Inc. + * 3,010,290 703,125
8,000 Haggar Corp. 129,000 108,000
AIRFREIGHT (2.2%)
-----------------
25,000 Airborne Freight Corporation 691,225 650,000
AUTO MANUFACTURING (2.2%)
-------------------------
20,000 Ford Motor Company 647,636 647,500
</TABLE>
<PAGE> 6
GINTEL ERISA FUND Statement of Net Assets (continued) As of June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
NUMBER
OF MARKET
SHARES COST** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CONSUMER PRODUCTS (1.6%)
------------------------
10,000 American Brands, Inc. 458,750 453,750
TECHNOLOGY (1.4%)
-----------------
25,000 Cognex Corporation* 410,112 403,125
DIVERSIFIED CHEMICAL PRODUCER (1.4%)
------------------------------------
5,000 E. I. du Pont de Nemours and Company 396,250 395,625
Miscellaneous Securities (1.1%) 312,750 312,500
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Total Common Stocks (75.0%) 18,892,576 21,681,125
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</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
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<S> <C> <C> <C>
CASH EQUIVALENTS
5,000,000 General Electric Capital Corporation
5.38% due 7/11/96 5,000,000 5,000,000
3,529,000 Chase Securities, Inc. Repurchase Agreement
5.15% due 7/1/96 (Collateralized by U.S.
Government Obligations) 3,529,000 3,529,000
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Total Cash Equivalents (29.5%) 8,529,000 8,529,000
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Total Investments (104.5%) $27,421,576 30,210,125
===========
Liabilities net of other assets (-4.5%) (1,287,210)
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Net Assets Applicable to Outstanding Shares (100.0%) $28,922,915
====================================================================================================================================
Net asset value per share-based on 904,500 shares of
beneficial interest (offering and redemption price) $31.98
====================================================================================================================================
</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 June 30, 1996
(Unaudited)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends $510,980
Interest 94,589
---------
Total investment income 605,569
EXPENSES:
Administrative services fee (Note D) $174,126
Investment advisory fee (Note C) 139,301
Trustees' fees 13,921
Taxes 994
---------
Total Expenses 328,342
----------
NET INVESTMENT INCOME 277,227
NET REALIZED GAIN ON INVESTMENTS 3,458,446
NET DECREASE IN UNREALIZED APPRECIATION OF INVESTMENTS (398,201)
---------
NET GAIN ON INVESTMENTS 3,060,245
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $3,337,472
==========
</TABLE>
The accompanying notes to financial statements are an integral part hereof.
<PAGE> 8
GINTEL ERISA FUND Statements of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
Six Months Year
Ended 6/30/96 Ended 12/31/95
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<S> <C> <C>
OPERATIONS:
Net investment income $277,227 $246,751
Net realized gain on investments 3,458,446 176,028
Net increase (decrease) in unrealized appreciation
of investments (398,201) 6,130,781
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Net increase in net assets from operations 3,337,472 6,553,560
DISTRIBUTIONS TO SHAREHOLDERS:
Investment income -- (320,221)
Net realized gains from investments -- --
---------- -----------
Net decrease from distributions -- (320,221)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued 234,265 276,201
Reinvestment of dividends -- 319,573
Cost of shares repurchased (2,414,898) (9,115,210)
----------- -----------
Net decrease from capital
share transactions (2,180,633) (8,519,436)
Total Increase (Decrease) 1,156,839 (2,286,097)
Net Assets - Beginning of Year 27,766,076 30,052,173
----------- -----------
Net Assets - End of Period $28,922,915 $27,766,076
=========== ===========
NET ASSETS CONSIST OF:
Capital Stock $24,258,191 $26,438,824
Undistributed net investment income (loss) 209,388 (67,839)
Undistributed net realized gains (losses)
from security transactions 1,666,787 (1,791,659)
Unrealized appreciation on investments 2,788,549 3,186,750
----------- -----------
$28,922,915 $27,766,076
=========== ===========
</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*) (Unaudited)
<TABLE>
<CAPTION>
Year Ended December 31
Six Months --------------------------------------------------------------------------
Ended 6/30/96 1995 1994 1993 1992
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $28.41 $22.70 $29.41 $35.38 $31.49
Income from
Investment Operations
Net investment income .22 .27 .45 .41 .57
Net realized and unrealized
gain (loss) on securities 3.35 5.77 (6.71) 1.42 3.96
- --------------------------------------------------------------------------------------------------------------------------------
Total from Investment Income 3.57 6.04 (6.26) 1.83 4.53
- --------------------------------------------------------------------------------------------------------------------------------
Less: Distributions
Net investment income -- .33 .45 .41 .57
Capital gains -- -- -- 7.39 .07
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Total Distributions -- .33 .45 7.80 .64
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Net Asset Value, End of Period $31.98 $28.41 $22.70 $29.41 $35.38
=================================================================================================================================
Total Return 12.6% 26.6% -21.3% 5.4% 14.4%
- --------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period $28,922,915 $27,766,076 $30,052,173 $51,094,426 $56,380,619
Ratio of operating expenses to
average net assets (Note D) 2.3%** 2.5%** 2.6%** 2.2%** 1.7%
Ratio of net investment
income to average net assets 2.0% 0.9% 1.4% 1.0% 1.5%
Portfolio turnover rate 54.1% 52.7% 104.4% 99.3% 79.8%
Shares outstanding, end of period 904,500 977,447 1,323,836 1,737,287 1,593,610
</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 June 30, 1996
(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
shareholders. Therefore, only a nominal Federal income tax provision is
required.
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 June 30, 1996
(Unaudited)
<TABLE>
<S> <C>
(NOTE E) -- OTHER MATTERS:
1. Investments
Unrealized appreciation at June 30, 1996 $5,402,522
Unrealized depreciation at June 30, 1996 (2,613,973)
-----------
$2,788,549
===========
FOR THE SIX MONTHS ENDED JUNE 30, 1996
Purchases of securities other than short-term investments $6,475,209
Sales of securities other than short-term investments $12,748,829
</TABLE>
2. Capital Stock: (in shares)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
------------- -----------------
<S> <C> <C>
Shares issued 7,876 10,686
Shares reinvested -- 11,305
Shares repurchased (80,823) (368,380)
-------- ---------
Net decrease (72,947) (346,389)
======== =========
</TABLE>
<PAGE> 12
GINTEL ERISA FUND TRUSTEES AND OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
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;
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. 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
</TABLE>
