<PAGE> 1
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MESSAGE FROM THE PRESIDENT:
Dear Shareholder:
The Institutional Investors Capital Appreciation Fund, Inc. produced a total
return of 2.64% for the three months ended June 30, 2000. The Fund's total
return for the six month and one-year periods ending June 30, 2000, was -3.33%
and -2.32%, respectively. The three, five and ten year average annual returns
for the year ending June 30, 2000 were 13.89%, 18.02%, and 13.44%, respectively.
If a shareholder institution had invested $100,000 in the Fund at inception in
1953 and reinvested all capital gains and dividends in the Fund, the shareholder
institution's investment would have grown to $24,254,694 by June 30, 2000.
The tremendous progress and prosperity the United States economy has produced
over the last twenty years is the best ever, and it does not appear that the
economy will stall anytime soon. Wealth creation and capital formation have also
been superb. The Dow Jones Industrial Average, although off 8.48% for the
first-half of 2000, has not encountered a down year since 1990. Such consistent
performance, however, does produce downside risks. Increased speculation, heavy
portfolio turnover, rising market volatility, and an inordinate concentration of
investment capital in technology and technology-related stocks are all
unfortunate consequences of consistently rising equity returns.
The bifurcation of the equity market has become so extreme that many of the
popular indexes no longer give a fair picture of what is happening in the
broader stock market. Last year, for example, the New York Stock Exchange
Composite Index, the Standard and Poor's 500 Stock Index and the Nasdaq
Composite Index, all registered positive results. Yet, the majority of issues in
each index were down in price for the year. The 68 technology stocks in the S&P
500 index rose 131% while the remaining 432 equities in the index advanced less
than 2%.
Most of the volatility and speculation centers on Nasdaq. Since its formation in
1971, the Nasdaq has registered 26 days in which it rose or declined 5%, or
more. Thirteen of them occurred between January 1 and June 1 of this year. Even
more mind boggling is the speed with which investors flip stocks. The average
holding period in 1999 for the 100 largest Nasdaq capitalization issues was just
30 days.
The Institutional Investors Capital Appreciation Fund, Inc., in addition to
concluding better values lie elsewhere, has elected not to overly concentrate in
technology and technology-related issues for several fundamental reasons.
Investor euphoria has lifted equity prices to such levels and the gap between
market price and business value of many issues is so wide that the risk/reward
ratio is not acceptable. Many of these companies have short life histories,
limited pricing flexibility, and are vulnerable to technological obsolescence.
Consequently, confidence in future sales and profit forecast is weak. It will
take time before market competition determines this sector's true category
killers and consistent earnings growers.
History reveals that over time stock prices reflect the true business
fundamentals of a company and its ability to generate consistent and sustainable
earnings growth. As seen in the market today, there is also no question that
over shorter time periods, emotion, intuition and over-confidence can overshadow
business fundamentals and determine market prices. The market has bestowed hefty
price-earnings multiples on certain stocks and it has also created solid buying
opportunities for the Institutional Investors Capital Appreciation Fund, Inc.
Since more and more investors remain fully invested at all times, many value
stocks are not only out-of-favor they have become a source of funds to purchase
technology and other popular stocks. Our Fund has capitalized on this situation
by adding to current holdings, and opportunities have also developed to invest
in new stocks at reasonable prices. Whenever attractive companies sell at a
discount to their intrinsic value and can consistently grow earnings, profit
opportunities exist. Given that several of our portfolio companies have
concluded that an efficient deployment of capital is to repurchase shares of
their own company stock only adds to our conviction that the Institutional
Investors Capital Appreciation Fund is well positioned to deliver increased
shareholder value.
Sincerely,
[DOHERTY SIGNATURE]
Harry P. Doherty
President
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1
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INVESTMENT RESULTS, OUTLOOK AND STRATEGIES
INSTITUTIONAL INVESTORS CAPITAL APPRECIATION FUND, INC.
The Capital Appreciation Fund's net asset value per share on June 30, 2000 was
$179.61 versus $186.39 on December 31, 1999. Shareholders received distributions
from dividend income totaling $0.5497 per share during the first six months of
2000. The Fund's total return for the six-month period ending June 30, 2000 was
-3.33%. The six-month total return as of June 30, 2000 for the Lipper Large
Capitalization Value Funds Average(1) was -1.65%. Total return assumes the
reinvestment of all dividends and capital gains and the deduction of all
applicable fees and expenses.
During the 8 1/2-year period beginning December 31, 1991 and ending June 30,
2000, coinciding with the tenure of the current portfolio management team, the
Capital Appreciation Fund has provided a cumulative total return of 239.34%.
This compares favorably to the 8 1/2-year cumulative total return of 204.59% for
the Lipper Growth & Income Funds Average (1992-1998) / Lipper Large
Capitalization Value Funds Average (1999-2000).(2) The Fund's average annual
total return for the 8 1/2-year period ending June 30, 2000 was 15.46% versus
14.00% for the Lipper Growth & Income / Large Capitalization Value Funds
Averages.
Our portfolio companies continue to deliver consistent earnings growth averaging
approximately 12%-14% annually. However, the performance of the Fund has not
reflected this growth over the past 18 months. Investors have shunned the type
of companies we own in favor of fast growing technology companies. The Capital
Appreciation Fund's lack of significant representation in the technology sector
is primarily driven by two factors. First, while growth rates appear high, we
question their sustainability and second, the price you pay for that growth
seems excessive, especially given the uncertainty of the business fundamentals.
Our preference is to invest in companies that demonstrate the ability to produce
sustainable earnings and cash flow growth over the long-term, accumulating
shares at reasonable prices. Over time, the stock market generally values
underlying business fundamentals appropriately. However, during certain time
periods, investor sentiment may cause these values to deviate from equilibrium.
We believe that this is the case in today's market. While times such as these
may adversely affect the Fund's relative performance in the short-term, we are
able to purchase shares at favorable prices.
Over the past six months we added one new company to the Fund, namely
Bristol-Myers Squibb. We also increased our position in a number of our existing
portfolio holdings at prices that we believe were very attractive. In addition,
we eliminated two companies from the Fund during the period, namely Hubbell due
to fundamental concerns, and Walt Disney due to valuation.
Footnote 1: Lipper Analytical Services reorganized its fund classifications
during 1999. The Growth & Income category, of which the Capital Appreciation
Fund was a member, no longer exists. The Fund is now included in the Large
Capitalization Value category.
Footnote 2: In the interest of continuity, we have added the 1999-June 2000
cumulative return for the Lipper Large Capitalization Value Funds Average to the
1992-1998 cumulative return for the Lipper Growth & Income Funds Average
reported in 1998's annual report.
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2
<PAGE> 3
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INSTITUTIONAL INVESTORS CAPITAL
APPRECIATION FUND, INC.
PERFORMANCE SUMMARY
(UNAUDITED)
AVERAGE ANNUAL TOTAL RETURN
PERIODS ENDING JUNE 30, 2000(1)
<TABLE>
<CAPTION>
YEAR ONE FIVE TEN
TO DATE YEAR YEARS YEARS
------- ---- ----- -----
<S> <C> <C> <C> <C>
INSTITUTIONAL INVESTORS
CAPITAL APPRECIATION
FUND..................... (3.33)% (2.32)% 18.02% 13.44%
Standard & Poor's 500
Composite Stock
Price Index (S&P
500)............... (0.43) 7.24 23.80 17.79
Dow Jones Industrial
Average (DJIA)..... (8.44) (3.27) 20.32 16.59
Lipper Large
Capitalization
Value Funds
Average............ (1.65) (0.93) 18.01 14.75
</TABLE>
(1) Assumes reinvestment of all dividends and distributions and the deduction of
all applicable fees and expenses. Average annual returns are stated for
periods greater than one year. Data for the S&P 500, DJIA and Lipper Large
Capitalization Value Funds Average are from Lipper, Inc. The S&P 500 and
DJIA do not include a reduction in total return for expenses.
The foregoing information is a statement of the past performance of the Fund and
should not be construed as a representation or prediction of future results. The
investment return and principal value of an investment in the Fund will
fluctuate with changing market conditions so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
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3
<PAGE> 4
INSTITUTIONAL INVESTORS CAPITAL APPRECIATION FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS
JUNE 30, 2000
(UNAUDITED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCKS--(96.6%):
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
ADVERTISING-(3.8%)
100,000 Interpublic Group of Cos., Inc..... $ 4,300,000
BEVERAGES--NON-ALCOHOLIC-(4.0%)
80,000 Coca-Cola Co....................... 4,595,000
CHEMICALS--SPECIALTY-(2.4%)
90,000 International Flavors & Fragrances,
Inc. ............................ 2,716,875
COMMERCIAL SERVICES-(3.9%)
120,000 Cintas Corp. ...................... 4,402,500
COMPUTER SOFTWARE & SERVICES-(8.2%)
100,000 Automatic Data Processing, Inc. ... 5,356,250
50,000 Microsoft Corp.*................... 4,000,000
------------
9,356,250
DISTRIBUTOR--CONSUMER
PRODUCTS-(4.4%)
120,000 Sysco Corp. ....................... 5,055,000
ELECTRICAL EQUIPMENT-(5.3%)
100,000 Emerson Electric Co. .............. 6,037,500
ELECTRONICS & SEMICONDUCTORS-(4.1%)
35,000 Intel Corp. ....................... 4,679,063
FINANCIAL SERVICES-(7.0%)
75,000 Fannie Mae......................... 3,914,063
100,000 Freddie Mac........................ 4,050,000
------------
7,964,063
FOOD PROCESSING-(3.5%)
50,000 Wm. Wrigley Jr., Co. .............. 4,009,375
FOODS-(2.3%)
90,000 Campbell Soup Co. ................. 2,621,250
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<C> <S> <C>
HEALTH CARE--DIVERSIFIED-(5.4%)
60,000 Johnson & Johnson.................. $ 6,112,500
HEALTH CARE--DRUGS-(11.0%)
100,000 Abbott Laboratories................ 4,456,250
50,000 Bristol-Myers Squibb Co. .......... 2,912,500
65,000 Merck & Co., Inc. ................. 4,980,624
------------
12,349,374
HOUSEHOLD PRODUCTS-(4.5%)
115,000 Clorox Co. ........................ 5,153,438
OFFICE EQUIPMENT & SUPPLIES-(3.9%)
110,000 Pitney Bowes, Inc. ................ 4,400,000
PERSONAL CARE-(3.1%)
100,000 Gillette Co. ...................... 3,493,750
PUBLISHING--NEWSPAPERS-(3.7%)
70,000 Gannett Co., Inc. ................. 4,186,875
RESTAURANTS-(2.9%)
100,000 McDonald's Corp.*.................. 3,293,750
RETAIL--DRUG CHAINS-(2.8%)
100,000 Walgreen Co. ...................... 3,218,750
RETAIL--FOOD CHAINS-(2.9%)
100,000 Albertson's, Inc. ................. 3,325,000
RETAIL--GENERAL MERCHANDISE-(4.1%)
80,000 Wal-Mart Stores, Inc. ............. 4,610,000
RETAIL--SPECIALTY STORES-(3.4%)
125,000 Gap, Inc. ......................... 3,906,250
------------
Total Common Stocks
(Cost $76,029,139)............... 109,786,563
</TABLE>
--------------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
4
<PAGE> 5
INSTITUTIONAL INVESTORS CAPITAL APPRECIATION FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
JUNE 30, 2000
(UNAUDITED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMERCIAL PAPER--(3.4%):
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<C> <S> <C> <C>
FINANCIAL SERVICES-(3.4%)
$3,830,000 Household Finance Corp., 6.88%, 7/3/00...... $ 3,830,000
------------
Total Commercial Paper
(Cost $3,830,000)......................... 3,830,000
------------
Total Investments
(Cost $79,859,139)(a)............ 100.0% $113,616,563
Other assets in excess of
liabilities...................... 0.0% 47,136
------- ------------
Total Net Assets................... 100.0% $113,663,699
======= ============
</TABLE>
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation................... $39,037,471
Unrealized depreciation................... (5,280,047)
-----------
Net unrealized appreciation............... $33,757,424
===========
</TABLE>
* Non-income producing security.
--------------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
5
<PAGE> 6
INSTITUTIONAL INVESTORS CAPITAL APPRECIATION FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JUNE 30, 2000
-------------
<S> <C>
ASSETS:
Investment in securities, at value (Cost $79,859,139)....... $113,616,563
Cash........................................................ 521
Dividends and interest receivable........................... 94,582
Prepaid expenses............................................ 14,138
------------
Total assets.............................................. 113,725,804
LIABILITIES:
Accrued expenses payable.................................... 62,105
------------
NET ASSETS, applicable to 632,823 shares of $1.00 par value
stock, 2,000,000 shares authorized........................ $113,663,699
============
NET ASSETS:
Capital paid in............................................. $ 79,906,275
Net unrealized appreciation................................. 33,757,424
------------
NET ASSETS.................................................. $113,663,699
============
NET ASSET VALUE, offering and redemption price per share
($113,663,699/632,823 shares)............................. $ 179.61
============
</TABLE>
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See Accompanying Notes to Financial Statements.
6
<PAGE> 7
INSTITUTIONAL INVESTORS CAPITAL APPRECIATION FUND, INC.
STATEMENT OF OPERATIONS
(UNAUDITED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
----------------
<S> <C>
INVESTMENT INCOME:
Dividends................................................. $ 713,098
Interest.................................................. 182,741
-----------
Total investment income................................ 895,839
EXPENSES:
Investment advisory....................................... 394,409
Administration............................................ 54,146
Directors'................................................ 40,402
Transfer agent............................................ 11,977
Legal..................................................... 21,779
Printing.................................................. 3,212
Insurance................................................. 16,952
Audit..................................................... 6,053
Custodian................................................. 11,807
Miscellaneous............................................. 2,011
-----------
Total expenses......................................... 562,748
-----------
Net investment income.................................. 333,091
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gain........................................... 5,462,377
Net change in unrealized appreciation/depreciation.......... (9,481,627)
-----------
Net realized and unrealized loss............................ (4,019,250)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $(3,686,159)
===========
</TABLE>
--------------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
7
<PAGE> 8
INSTITUTIONAL INVESTORS CAPITAL APPRECIATION FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
2000 1999
---------------- ------------
(UNAUDITED)
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income..................................... $ 333,091 $ 614,935
Net realized gain on investments.......................... 5,462,377 11,408,542
Net change in unrealized appreciation/depreciation on
investments............................................ (9,481,627) (4,761,342)
------------ ------------
Net increase (decrease) in net assets resulting from
operations................................................ (3,686,159) 7,262,135
Distributions to shareholders:
From net investment income................................ (345,134) (614,935)
In excess of net investment income........................ -- (2,557)
From net realized gains on investments.................... -- (11,408,542)
------------ ------------
Total distributions to shareholders......................... (345,134) (12,026,034)
Net increase from capital share transactions (See Note 3)... 2,728,471 613,191
------------ ------------
Total decrease in net assets........................... (1,302,822) (4,150,708)
NET ASSETS:
Beginning of period....................................... 114,966,521 119,117,229
------------ ------------
End of period............................................. $113,663,699 $114,966,521
============ ============
</TABLE>
--------------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
8
<PAGE> 9
INSTITUTIONAL INVESTORS CAPITAL APPRECIATION FUND, INC.
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Selected Data for Each Share of Capital Stock
Outstanding throughout Each Year
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, -------------------------------------------------------------
2000 1999 1998 1997 1996 1995
---------------- -------- -------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning of
period............................. $ 186.39 $ 195.75 $ 164.68 $135.64 $121.75 $112.12
INCOME FROM OPERATIONS:
Net investment income.............. 0.53 1.05 0.93 1.10 1.09 1.20
Net realized and unrealized gain on
investments...................... (6.76) 11.12 46.33 37.34 24.39 26.55
-------- -------- -------- ------- ------- -------
Total from investment
operations.................. (6.23) 12.17 47.26 38.44 25.48 27.75
-------- -------- -------- ------- ------- -------
DISTRIBUTIONS:
From net investment income......... (0.55) (1.06) (0.93) (1.09) (1.09) (1.20)
In excess of net investment
income........................... -- -- (0.01) -- -- (0.03)
From net realized gains on
investments...................... -- (20.47) (15.25) (8.31) (10.50) (16.89)
-------- -------- -------- ------- ------- -------
Total distributions............ (0.55) (21.53) (16.19) (9.40) (11.59) (18.12)
-------- -------- -------- ------- ------- -------
NET ASSET VALUE, end of period....... $ 179.61 $ 186.39 $ 195.75 $164.68 $135.64 $121.75
======== ======== ======== ======= ======= =======
Total return......................... (3.33)%(2) 6.51% 28.85% 28.64% 20.82% 24.90%
Ratio of net expenses to average net
assets............................. 1.04% (3) 1.00% 1.07% 1.16% 1.28% 1.39%
Ratio of net investment income to
average net assets................. 0.62% (3) 0.52% 0.51% 0.71% 0.82% 0.94%
Ratio of expenses to average net
assets (1)......................... 1.04% (3) 1.00% 1.07% 1.16% 1.29% 1.43%
Portfolio turnover rate.............. 9% 20% 22% 27% 48% 85%
NET ASSETS, end of period (000's).... $113,664 $114,967 $119,117 $97,487 $70,149 $55,234
</TABLE>
--------------------------------------------------------------------------------
(1) During certain periods, certain fees were voluntarily waived. If such
voluntary fee waivers had not occurred, the ratio would have been as
indicated.
(2) Not annualized.
(3) Annualized.
See Accompanying Notes to Financial Statements.
9
<PAGE> 10
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INSTITUTIONAL INVESTORS CAPITAL APPRECIATION FUND, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)
The Institutional Investors Capital Appreciation Fund, Inc. (the "Fund") is
registered under the Investment Company Act of 1940, as amended, as a
diversified open-end management investment company. The Fund was incorporated
under the laws of the State of New York on October 29, 1952. The primary
investment objective of the Fund is to achieve capital appreciation for its
shareholders. The objective of income is secondary.
NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A--Security Valuation--Securities traded on national exchanges are valued at the
closing prices or, in the case of over-the-counter securities, at the mean
between closing bid and asked prices as of 4:00 pm eastern time. Short-term
instruments maturing within 60 days of the valuation date are valued at
amortized cost.
B--Security Transactions and Related Investment Income--Security transactions
are accounted for on the trade date, dividend income is recorded on the
ex-dividend date and interest income is recorded on the accrual basis. The
specific identification method is used in the determination of realized gains
and losses on the sale of securities.
C--Dividends to Shareholders--Dividends from net investment income, if any, are
declared and paid quarterly. Net short-term and long-term capital gains, if any,
are declared and paid annually.
Distributions from net investment income and from net realized capital gains are
determined in accordance with Federal income tax regulations, which may differ
from generally accepted accounting principles. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature (i.e. reclass of market discounts,
gain/loss, paydowns and distributions) such amounts are reclassified within the
composition of net assets based on their Federal tax-basis treatment; temporary
differences do not require reclassification. Distributions to shareholders which
exceed net investment income and net realized capital gains for financial
reporting purposes but not for tax purposes are reported as distributions in
excess of net investment income or net realized gains. To the extent such
distributions exceed net investment income and net realized gains for tax
purposes, they are reported as distributions of capital.
D--Federal Income Taxes--No provision has been made for Federal income tax,
since it is the intention of the Fund to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its ordinary taxable income and net capital gains to its
shareholders.
E--Management Estimates--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of 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.
NOTE 2--FEES
Shay Assets Management, Inc. (the "Investment Adviser") is the investment
adviser to the Fund. The Investment Adviser is a wholly-owned subsidiary of Shay
Investment Services, Inc. ("SISI"), which is controlled by Rodger D. Shay, a
Vice President of the Fund.
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<PAGE> 11
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INSTITUTIONAL INVESTORS CAPITAL APPRECIATION FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000
(UNAUDITED)
The Investment Adviser receives fees from the Fund, computed at an annual rate
of 0.75% of the first $100,000,000 of the Fund's average daily net assets and
0.50% of average daily net assets in excess of $100,000,000. The fee payable to
the Investment Adviser is reduced (but not below zero) to the extent expenses
(exclusive of professional fees, such as legal and audit fees, directors' fees
and expenses, and distribution expenses, if any, payable under Rule 12b-1)
exceed 1.10% of the Fund's average daily net assets for any fiscal year during
the term of the Fund's agreement with the Investment Adviser. This limitation
did not result in any waiver of the Investment Adviser's fees during the six
months period ended June 30, 2000.
Shay Financial Services, Inc. (the "Distributor") is the distributor for the
Fund. The Distributor is also a wholly-owned subsidiary of SISI. The Distributor
receives no compensation for its distribution services.
BISYS Fund Services Ohio, Inc. is a subsidiary of The BISYS Group, Inc., and
serves the Fund as Administrator and Transfer Agent. As compensation for its
administrative services, the Fund pays the Administrator a fee computed at an
annual rate of 0.10% on the first $200,000,000 of the Fund's average daily net
assets, 0.075% of the next $200,000,000, 0.05% of the next $200,000,000, and
0.03% of average daily net assets in excess of $600,000,000 (exclusive of
out-of-pocket expenses). As compensation for its services as transfer agent, the
Fund pays the Transfer Agent a minimum monthly fee of $1,500 (exclusive of
out-of-pocket expenses).
NOTE 3--CAPITAL STOCK
At June 30, 2000, there were 2,000,000 shares of $1.00 par value capital stock
authorized. Transactions in capital stock for the six months ended June 30, 2000
and the year ended December 31, 1999, were as follows:
<TABLE>
<CAPTION>
SHARES AMOUNT
----------------- --------------------------
2000 1999 2000 1999
------ ------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold............................................. 14,242 39,953 $2,418,950 $ 7,927,605
Shares issued in reinvestment of dividends.............. 1,776 61,102 309,521 11,141,362
------ ------- ---------- ------------
16,018 101,055 2,728,471 19,068,967
Shares redeemed......................................... -- (92,781) -- (18,455,776)
------ ------- ---------- ------------
Net increase............................................ 16,018 8,274 $2,728,471 $ 613,191
====== ======= ========== ============
</TABLE>
NOTE 4--PURCHASES AND SALES OF SECURITIES
The cost of purchases and the proceeds from sales of investments, exclusive of
short-term investments, for the six months ended June 30, 2000, were $13,411,432
and $9,482,277, respectively.
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<PAGE> 12
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INSTITUTIONAL INVESTORS
CAPITAL APPRECIATION FUND, INC.
OFFICERS
HARRY P. DOHERTY
President
MICHAEL R. KALLET
Vice President
EDWARD E. SAMMONS, JR.
Vice President and
Secretary
MARK F. TRAUTMAN
Vice President
JOSEPH L. MANCINO
Executive Vice President
RODGER D. SHAY
Vice President and
Assistant Secretary
JOHN J. MCCABE
Vice President
STEVEN D. PIERCE
Treasurer
ALAINA V. METZ
Assistant Secretary
BOARD OF DIRECTORS
RALPH F. BROUTY
ROBERT P. CAPONE
TIMOTHY A. DEMPSEY
HARRY P. DOHERTY
JOSEPH R. FICALORA
CHRIS C. GAGAS
MICHAEL R. KALLET
STEPHEN J. KELLY
CLIFFORD E. KELSEY, JR.
ROBERT E. KERNAN, JR.
JOSEPH L. MANCINO
WILLIAM A. MCKENNA, JR.
CLIFFORD M. MILLER
VINCENT F. PALAGIANO
CHARLES M. SPROCK
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12
<PAGE> 13
INVESTMENT ADVISER
Shay Assets Management, Inc.
200 Park Avenue
45th Floor
New York, New York 10166
DISTRIBUTOR
Shay Financial Services, Inc.
230 West Monroe Street
Chicago, Illinois 60606
ADMINISTRATOR, TRANSFER AGENT,
REGISTRAR AND DIVIDEND PAYING AGENT
BISYS Fund Services Ohio, Inc.
3435 Stelzer Road
Columbus, Ohio 43219
CUSTODIAN
The Bank of New York
100 Church Street
New York, New York 10286
LEGAL COUNSEL
Hughes Hubbard & Reed LLP
One Battery Park Plaza
New York, New York 10004
INDEPENDENT ACCOUNTANTS
Arthur Andersen LLP
425 Walnut Street
Cincinnati, Ohio 45202
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