Municipal Income Fund
Investing for the Highest
Possible Income exempt
from Federal Income Taxes
that is Consistent with the
Preservation of Principal
Annual Report
December 31, 1996
Municipal Income Fund
11 Hanover Square, New York, NY 10005
1-800-847-4200
1-212-363-1100
http://www.bull-and-bear.com
<PAGE>
February 14, 1997
Dear Shareowner:
We are very pleased to submit this First Report since shareowners
voted to convert Bull & Bear Municipal Income Fund to closed-end status at their
Special Meeting on October 23, 1996. The conversion was effective November 8,
1996 and the Fund's shares are now listed and traded on the American Stock
Exchange (symbol: BBM). The Fund's Board of Directors anticipates that the
change may help reduce the Fund's operating expenses. This, together with the
greater investment flexibility now available to the Fund, is expected to enhance
the potential for a higher yield and total return as the Fund seeks to provide
the highest possible income exempt from Federal income taxes for its shareowners
that is consistent with preservation of principal, with capital appreciation as
a secondary objective.
Review and Outlook
Municipal bonds generally provided attractive yields and rates of
return in 1996. As the year progressed, the economy was characterized by
moderate growth and consistently low levels of inflation. Reflecting this, the
Federal Reserve has maintained its targeted Federal Funds rate, the amount banks
charge each other for overnight loans, at a relatively low level of 5.25% since
January 1996. This is the longest period of unchanged rates since 1993, and
confirms the modestly expanding overall economy and acceptable rates of
inflation we have enjoyed throughout this period.
Over 1.2 million new jobs were created during the last six months of 1996.
Although this was about 25% less than were created during the first half of the
year, the unemployment rate nevertheless fell to its lowest level since 1989.
Other measures of employment, such as the length of the average work week and
overtime hours also continue to confirm increased demands for labor. Tightness
in labor markets needs to be monitored closely because it creates the potential
for inflationary pressure on wages, and as personal income rises, the demand for
goods and services rises throughout the economy.
Many states and municipalities began to experience increased
revenues during the year. We believe this trend should remain intact in 1997, as
the economy continues to maintain moderate growth rates. While increased
revenues contribute to a reduction in the potential supply of municipal debt,
many issuers have also projected operating budget increases due to the reduction
or elimination of Federal programs or funding. One concern that has had a
reduced impact on municipal debt yield levels is the elimination of the threat
of radical tax reform for the foreseeable future.
Looking ahead, we see several variables that support the
continuation of last year's moderate growth and low inflation experience. While
personal income continues to grow at a rapid pace, demand pressures should be
moderated by high levels of consumer debt. Demographic trends should also
restrain consumption, particularly demand related to housing and durable goods.
Dividend Reinvestment Plan
The Bull & Bear Municipal Income Fund Dividend Reinvestment Plan
is particularly attractive because quarterly dividend distributions are
reinvested without charge at the lower of net asset value per share or
<PAGE>
market price. The market price is determined by averaging the closing
ex-dividend prices of the Fund on the American Stock Exchange for the five
trading days prior to the payment date. Reinvesting at the lower of net asset
value or market price per share can be a considerable advantage for shareowners,
and can contribute importantly to growing your investment over time.
We appreciate your support and look forward to continuing to serve your
investment needs.
Sincerely,
Robert D. Anderson Steven A. Landis
Vice Chairman Senior Vice President
Portfolio Manager
<PAGE>
Mutual Funds
Bull & Bear Dollar
Reserves
A high quality money market fund investing in U.S. Government securities. Income
is generally free from state income and intangible personalproperty taxes. Free,
unlimited check writing with only a $250 minimum per check.
Bull & Bear Gold
Investors
Seeks long term capital appreciation in investments
with the potential to provide a hedge against inflation
and preserve the purchasing power of the dollar.
Bull & Bear
Special Equities Fund
Invests aggressively for maximum capital appreciation.
Bull & Bear
U.S. and Overseas Fund
Invests worldwide for the highest possible total return.
Call our toll-free number for a prospectus containing more complete
information, including charges and expenses. Please read it carefully before you
invest.
Closed-end investment companies listed on the American Stock Exchange
Bull & Bear Global Income Fund
Investing for a high level of income from a global
portfolio of primarily investment grade fixed income securities.
Bull & Bear Municipal
Investing for the highest possible income exempt from Income Fund Federal income
tax that is consistent with preservation of principal.
Bull & Bear U.S.
Government Securities
Investing for a high level of current income, liquidity
and safety of principal.
Discount Brokerage
Services
Bull & Bear
Securities, Inc.
Receive the investment information you need and the low commissions you expect.
Plus you can earn American Airlines(R) AAdvantage(R) miles every time you trade.
And you can save an additional 10% off our already low commission rates when you
use Bull & Bear PC OnLine Investment CenterSM and/or Bull & Bear TeleQuote/
TeleTrade SM. (There is no Check writing minium for Bull & Bear Performance Plus
Accounts)
Call Toll Free1-800-VIP-4200 Total Return Performance. For the period ended
December 31, minimum for 1996, Bull & Bear Dollar Reserves' 7-day Bull & Bear
compound yield was 4.75% on a current yield of Performance 4.64%. Past
performance does not guarantee Plus(R) future results. Investment return will
accounts.) fluctuate, and there can be no assurance a net asset value of $1.00
per share will be able to be maintained.
<PAGE>
BULL & BEAR MUNICIPAL INCOME FUND, INC.
SCHEDULE OF PORTFOLIO INVESTMENTS - DECEMBER 31, 1996
<TABLE>
STANDARD
PRINCIPAL & POOR'S MARKET
AMOUNT RATING VALUE
MUNICIPAL BONDS (100.0%)
ALASKA (4.2%)
<S> <C> <C>
$450,000 Alaska Energy Authority Power Revenue Bonds,
7.25%, due 7/1/21 AAA $ 495,284
-------------
ARIZONA (7.1%)
755,000 Phoenix General Obligation Bonds, Series A,
6.25%, due 7/1/16 AA+ 837,129
COLORADO (4.3%)
480,000 Colorado Student Obligation Board Authority Revenue
Bonds, Series A3, 7.25%, due 9/1/05 A* 500,794
--------------
GEORGIA (8.5%)
800,000 Georgia State Municipal Electric Authority Power Revenue
Bonds, 8.25%, due 1/1/11 AA- 1,003,408
HAWAII (12.6%)
500,000 Hawaii County General Obligation Bonds, Series A, 5.60%,
due 5/1/13 AAA 514,725
800,000 Honolulu City & County General Obligation Bonds, Series
A, 8.75%, due 1/1/03 AA 970,352
1,485,077
LOUISIANA (4.5%)
500,000 Louisiana Public Facility Authority Revenue Bonds,
Series A2, 6.50%, due 3/1/02 AAA* 529,840
MICHIGAN (4.6%)
500,000 Monroe County Pollution Control Revenue Bonds, Series I,
7.30%, due 9/1/19 AAA 545,365
MISSISSIPPI (4.2%)
500,000 Mississippi State General Obligation Bonds, 5.10%, due AA- 493,560
--------------
11/15/11
NEVADA (4.4%)
500,000 Nevada Housing Division Single Family Revenue Bonds,
6.35%, due 10/1/12 AAA 511,660
NEW MEXICO (5.2%)
600,000 Las Cruces Revenue Bonds, 5.45%, due 12/1/08 AAA 604,470
--------------
NEW YORK (15.1%)
$315,000 City of New York General Obligation Bonds, Series D,
7.5%, due 2/1/16 BBB+ $ 348,907
500,000 New York State Dormitory Authority State University
Revenue Bonds, Series C, 7.375%, due 5/15/10 BBB+ 581,935
750,000 New York State Energy Research & Development Authority
Revenue Bonds, 7.125%, due 12/1/29 A+ 845,872
1,776,714
OKLAHOMA (4.4%)
500,000 McAlester Public Works Authority Revenue Bonds, 5.50%,
due 12/1/09 AAA 509,710
PENNSYLVANIA (2.4%)
250,000 Philadelphia Water & Waste Revenue Bonds, 6.25%, due AAA 274,837
--------------
8/1/11
TEXAS (13.6%)
500,000 Austin Independent School District General Obligation
Bonds, 5.75%, due 8/1/16 AAA 507,515
500,000 Dallas-Fort Worth International Airport Revenue Bonds,
7.25%, due 11/1/30 BAA 539,380
500,000 Port Corpus Christi Authority Revenue Bonds, 7.50%, due A+ 554,745
--------------
8/1/12
1,601,640
WISCONSIN (4.9%)
500,000 Wisconsin Clean Water Revenue Bonds, Series 1,
6.875%, due 6/1/11 AA 578,655
TOTAL INVESTMENTS (COST: $11,281,544) (100.0%) $11,748,143
===========
* Moody's rating.
</TABLE>
See accompanying notes to financial statements.
MUNICIPAL INCOME FUND
<PAGE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
ASSETS:
<S> <C>
Investments at market value (cost: $11,281,544) (note 1) $11,748,143
Interest receivable 229,089
Other assets
928
Total assets 11,978,160
------------
LIABILITIES:
Demand note payable to bank (note 5) 407,036
Accrued expenses 23,734
Accrued management fees 5,832
Other liabilities 50,268
---------------
Total liabilities 486,870
--------------
NET ASSETS: (applicable to 700,412 outstanding shares: 1,000,000,000
shares of $.01 $11,491,290
===========
par value authorized)
NET ASSET VALUE PER SHARE ($11,491,290 _ 700,412 shares outstanding) $16.41
======
At December 31, 1996, net assets consisted of:
Paid-in capital $11,536,695
Net unrealized appreciation on investments 466,599
Accumulated net realized loss on investments (512,004)
---------------
$11,491,290
</TABLE>
See accompanying notes to financial statements.
MUNICIPAL INCOME FUND
<PAGE>
STATEMENT OF OPERATIONS
Year Ended December 31, 1996
INVESTMENT INCOME:
Interest $818,933
======== --------
EXPENSES:
=========
Investment management (note 3) 84,516
============================== ======
Distribution (note 3) 43,364
===================== ======
Custodian 39,862
========= ======
Professional (note 3) 31,063
===================== ======
Transfer agent 25,725
=============== ======
Registration (note 3) 14,718
===================== ======
Interest (note 5) 6,998
================= =====
Shareholder administration (note 3) 6,539
=================================== =====
Directors 3,984
========= =====
Other 16,131
===== ----------
Total expenses 272,900
================== =======
Investment management fees waived (note 3) (36,901)
============================================== -----------
Net expenses 235,999
================ ---------
Net investment income 582,934
========================== ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 22,276
Unrealized depreciation of investments during the period (523,058)
Net realized and unrealized loss on investments (500,782)
Net increase in net assets resulting from operations $ 82,152
See accompanying notes to financial statements.
MUNICIPAL INCOME FUND
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31,
<TABLE>
1996 1995
===== -------------- =====
<S> <C> <C>
OPERATIONS:
Net investment income $ 582,934 $ 704,825
===================== ============= =============
Net realized gain on investments 22,276 732,969
================================ ====== =========
Unrealized appreciation (depreciation) of investments during the 1,080,255
================================================================ ----- ------------
period (523,058)
====== ---------
Net increase in net assets resulting from operations 82,152 2,518,049
==================================================== ====== =========
Subtraction from paid-in capital (note 6) (70,200) --
========================================= ======== ==
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income ($.70 and $.69 per
share, (596,590) (700,080)
====== ========= =========
respectively)
===============
CAPITAL SHARE TRANSACTIONS:
Decrease in net assets resulting from capital share transactions (4,144,103) (1,519,230)
================================================================ -------------- --------------
(a)
Total increase (decrease) in net assets (4,728,741) 298,739
======================================= =========== =======
NET ASSETS:
Beginning of period 16,220,031 15,921,292
=================== ------------ ------------
End of period (including accumulated net investment income of
=============================================================
$4,745 in 1995) $11,491,290 $16,220,031
================== =========== ===========
- --------------
</TABLE>
(a) Transactions in capital shares were as follows:
<TABLE>
1996 1995
------ -----
Shares Value Shares Value
<S> <C> <C> <C> <C>
Shares sold 59,832 $ 980,999 736,003 $11,827,618
=========== ====== =========== ======= ===========
Shares issued in reinvestment of
distributions 26,039 418,484 29,906 487,921
============= ====== ======= ====== ========
Shares redeemed (337,526) (857,584) (13,834,769)
=============== --------- - --------- ------------
(5,543,586)
Net decrease (251,655) $(4,144,103) (91,675) $(1,519,230)
============ ========= ============ =========== ============
</TABLE>
See accompanying notes to financial statements.
MUNICIPAL INCOME FUND
<PAGE>
Notes to Financial Statements
(1) The Fund, a Maryland corporation, is registered under the Investment Company
Act of 1940, as amended, as a diversified closed-end management investment
company. The Fund's shares are listed on the American Stock Exchange, Inc. The
investment objective of the Fund is to provide investors with the maximum level
of income exempt from Federal income tax that is consistent with the
preservation of capital, as set forth in its prospectus. The following is a
summary of significant accounting policies consistently followed by the Fund in
the preparation of its financial statements. With respect to security valuation,
municipal securities which have remaining maturities of more than 60 days and
for which market quotations are readily available are valued at the mean between
the most recently quoted bid and asked prices. Money market securities which
have remaining maturities of more than 60 days and for which market quotations
are readily available are valued at the most recent bid price or yield
equivalent. Debt obligations with remaining maturities of 60 days or less are
valued at cost adjusted for amortization of premiums and accretion of discounts.
Securities for which quotations are not readily available or reliable and other
assets may be valued as determined in good faith by or under the direction of
the Board of Directors. Investment transactions are accounted for on the trade
date (date the order to buy or sell is executed). Interest income is recorded on
the accrual basis. Premiums and discounts are amortized in accordance with
income tax regulations. In preparing financial statements in conformity with
generally accepted accounting principles, management makes estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements, as well as the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those
estimates.
(2) The Fund intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its taxable investment income and net capital gains, if
any, after utilization of any capital loss carryforward, to its shareholders and
therefore no Federal income tax provision is required. At December 31, 1996, the
Fund had an unused capital loss carryforward of approximately $512,000 which
expires in 2002. Based on Federal
MUNICIPAL INCOME FUND
<PAGE>
income tax cost of $11,281,544, gross unrealized appreciation and gross
unrealized depreciation were $513,871 and $47,272, respectively, at December 31,
1996.
(3) The Fund retains Bull & Bear Advisers, Inc. as its Investment Manager. Under
the terms of the Investment Management Agreement, the Investment Manager
receives a management fee, payable monthly, based on the average daily net
assets of the Fund at the annual rate of 6/10 of 1% on the first $500 million
and 1/2 of 1% over $500 million. The Investment Manager has agreed to waive all
or part of its fee or reimburse the Fund monthly if and to the extent the
aggregate operating expenses of the Fund exceed the most restrictive limit
imposed by any state in which shares of the Fund are qualified for sale,
although currently the Fund is not subject to any such limits. For the year
ended December 31, 1996, $36,901 of management fees were waived. Certain
officers and directors of the Fund are officers and directors of the Investment
Manager and Investor Service Center, Inc., the Fund's former Distributor. The
Fund reimbursed the Investment Manager $7,413 for providing certain
administrative and accounting services at cost for the year ended December 31,
1996.
The Fund had a plan of distribution pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (the "12b-1 Plan"). Pursuant to the 12b-1 Plan, the Fund
reimbursed the Distributor in an amount up to one-half of one percent per annum
of the Fund's average daily net assets for expenditures which are primarily
intended to result in the sale of the Fund's shares. The Distributor had
voluntarily limited the amount of reimbursement to 0.35 of one percent per annum
of the Fund's daily net assets. Effective with the conversion of the Fund to a
closed-end management investment company, the 12b-1 Plan was terminated.
Investor Service Center received $6,539 for shareholder administration services
it provided to the Fund at cost for the period from January 1, 1996 to November
8, 1996.
(4) Purchases and proceeds of sales of securities other than short term notes
aggregated $10,710,608 and $14,091,169, respectively, for the year ended
December 31, 1996.
(5) The Fund has a committed bank line of credit for temporary or emergency
purposes. As part of the agreement the Fund is required to pledge securities it
holds in its portfolio if there is an outstanding balance. At December 31, 1996,
there was $407,036 outstanding and the interest rate was
MUNICIPAL INCOME FUND
<PAGE>
equal to the Federal Reserve Funds Rate plus 1.75 percentage points. For the
year ended December 31, 1996, the weighted average interest rate was 7.09% based
on the balances outstanding during the period and the weighted average amount
outstanding was $98,710.
MUNICIPAL INCOME FUND
<PAGE>
(6) A Special Meeting of Shareholders ("Special Meeting") of Bull & Bear
Municipal Income Fund, a series of Bull & Bear Municipal Securities, Inc. (the
"Series Fund") was held on September 19, 1996 pursuant to notice given to all
shareholders of record at the close of business on August 8, 1996. At the
Special Meeting, insufficient votes were obtained to approve charter amendments
of Series Fund that would result in the conversion of Series Fund from open-end
to closed-end status, deletion of Series Fund's investment restrictions on
authority to borrow money, secure indebtedness and purchase securities with
conditions on resale, and amendment of Series Fund's investment restriction on
authority to issue senior securities with 368,646 shares voting in favor of the
proposal, 89,237 shares voting against the proposal, and 54,319 shares
abstaining.
A second Special Meeting of Series Fund was held on October 23, 1996 pursuant to
notice given to all shareholders of record at the close of business on September
30, 1996. At the Special Meeting, shareholders approved charter amendments of
Series Fund that would result in the conversion of Series Fund from open-end to
closed-end status, deletion of Series Fund's investment restrictions on
authority to borrow money, secure indebtedness and purchase securities with
conditions on resale, and amendment of Series Fund's investment restriction on
authority to issue senior securities with 469,818 shares voting in favor of the
proposal, 72,038 shares voting against the proposal, and 31,878 shares
abstaining.
Effective November 8, 1996, the Fund converted from an open-end management
investment company to a closed-end management investment company pursuant to the
vote of the Fund's shareholders on October 23, 1996. In connection with the
conversion, costs of approximately $70,200 have been charged against paid-in
capital. In addition, the Fund has adopted a Dividend Reinvestment Plan (the
"Plan"). Under the Plan, each dividend and capital gain distribution, if any,
declared by the Fund on outstanding shares will, unless elected otherwise by
each shareholder by notifying the Fund in writing at any time prior to the
record date for a particular dividend or distribution, be paid on the payment
date fixed by the Directors in additional shares in accordance with the
following: whenever the Market Price (as defined below) per share is equal to or
exceeds the net asset value per share at the time shares are
MUNICIPAL INCOME FUND
<PAGE>
valued for the purpose of determining the number of shares equivalent to the
cash dividend or capital gain distribution (the "Valuation Date"), participants
will be issued additional shares equal to the amount of such dividend divided by
the Fund's net asset value per share. Whenever the Market Price per share is
less than such net asset value on the Valuation Date, participants will be
issued additional shares equal to the amount of such dividend divided by the
Market Price. The Valuation Date is the dividend or distribution payment date
or, if that date is not an American Stock Exchange trading day, the next trading
day. For all purposes of the Plan: (a) the Market Price of the shares on a
particular date shall be the average closing market price on the five trading
days the shares traded ex-dividend on the Exchange prior to such date or, if no
sale occurred on the Exchange prior to such date, then the mean between the
closing bid and asked quotations for the shares on the Exchange on such date,
and (b) net asset value per share on a particular date shall be as determined by
or on behalf of the Fund.
MUNICIPAL INCOME FUND
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
Years Ended December 31,
PER SHARE DATA 1996 1995 1994 1993 1992
============== =--------======== --------======== --------======= --------========== =------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of $ 17.04 $ 15.25 $ 17.63 $ 17.06 $ 17.27
=============================== ------- -------- -------- ------- --------
period
Income from investment operations:
Net investment income .69 .70 .68 .75 .89
===================== === === === === ===
Net realized and unrealized gain (.62) 1.78 (2.38) 1.02 .11
================================ ----------= ---------- =========== -------- ---------
(loss) on investments
Total from investment operations .07 2.48 (1.70) 1.77 1.00
===================================== ---------- ---------- ============ -------- ---------
Less distributions:
===================
Distributions from net investment (.70) (.69) (.68) (.75) (.89)
================================= ===== ===== ===== ===== =====
income
======
Distributions from net realized gains -- -- -- (.45) (.32)
===================================== ----------========-----------======== ---------======== --------= --------=
on investments
==============
Total distributions (.70) (.69) (.68) (1.20) (1.21)
======================== ---------= -----------= ----------= --------= --------=
Net asset value at end of period $ 16.41 $ 17.04 $ 15.25 $ 17.63 $ 17.06
================================ ======= ======== ======== ======= ========
Per share market value at end of $ 14.38
=======
period
TOTAL RETURN .61% 16.58% (9.76)% 10.59% 6.04%
========== ========= ========== ======= ========
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's $11,491 $16,220 $15,921 $21,345 $20,781
======= ============ ======= =======
omitted)
Ratio of expenses to average net 1.68% 1.78% 1.60% 1.61% 1.60%
========= ========== ========== ======= ========
assets (a) (c)
Ratio of net investment income to 4.14% 4.31% 4.23% 4.25% 5.19%
========= ========== ========== ======= ========
average net assets (b)
Portfolio turnover rate 78% 172% 275% 74% 320%
========== ========= ========= ======= ========
- -----------------------
</TABLE>
(aRatio prior to reimbursement by the Investment Manager was 1.94%, 1.95%,
1.71%, 1.62% and 1.62% for the years ended December 31, 1996, 1995, 1994, 1993
and 1992, respectively. (bRatio prior to reimbursement by the Investment Manager
was 3.88%, 4.14%, 4.12%, 4.24% and 5.84% for the years ended December 31, 1996,
1995, 1994, 1993, and 1992, respectively. (cRatio after the reduction of
custodian fees under a custodian agreement was 1.62% for 1995. Prior to 1995,
such reductions were reflected in the expense ratios. There were no custodian
fee credits for 1996.
MUNICIPAL INCOME FUND
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors and Shareowners of Bull & Bear Municipal Income Fund,
Inc.:
We have audited the accompanying statement of assets and liabilities of
Bull & Bear Municipal Income Fund, Inc. including the schedule of portfolio
investments as of December 31, 1996, and the related statement of operations for
the year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
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 financial
highlights 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, 1996, by correspondence 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 financial highlights referred
to above present fairly, in all material respects, the financial position of
Bull & Bear Municipal
MUNICIPAL INCOME FUND
<PAGE>
Income Fund, Inc. as of December 31, 1996, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended, in conformity with generally accepted accounting
principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
January 17, 1997
MUNICIPAL INCOME FUND
<PAGE>
Municipal Income Fund
11 Hanover Square
New York, NY 10005
1-800-847-4200 1-212-363-1100 http://www.bull-and-bear.com Call toll-free for
Fund performance, telephone purchases, exchanges among the Bull & Bear Funds,
and to obtain information concerning your account.
1-800-847-4200
1-212-363-1100
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the Fund. The report is not
authorized for distribution to prospective investors in the Fund unless preceded
or accompanied by an effective Prospectus.
MUNICIPAL INCOME FUND
<PAGE>
