To Our Shareholders:
Volumetrics net asset value per share
increased 4.6% in the first half. This included a
1.5% advance in the second quarter. The
Volumetric Index, which measures the value of
$10,000 initial investment in the Fund on January
1, 1979, has reached $93,485, the highest ever for
a quarter end. Although the New York Stock
Exchange Composite Index advanced 9.0% in the
first half, its equivalent value of an initial $10,000
investment on 1/1/79 has reached only $60,292.
SUCCESSFUL RISK REDUCTION
With the introduction of our new and
unique "Strength and Protection" (S&P) system, we
have achieved two of our major objectives in 1996:
increased downside protection and decreased
volatility.
Increased Protection. The S&P model
greatly increased our downside protection. For
example, even though there were several minor
corrections in the stock market in the first half,
Volumetric never declined more than 3% from its
all-time high. On the other hand, the Dow, the
NYSE and the Standard & Poor indices all had at
least one 5% correction and the NASDAQ had a
10% correcion.
Decreased Volatility. The S&P model
has significantly reduced our NAV's volatility. Our
average daily volatility in the first half of 1996 was
only 0.38% as compared to the Dow's average
daily volatility of 0.67%.
PORTFOLIO REVIEW
The Fund's cash position is 10.1%. Our
portfolio contains 61 broadly diversified stocks. Our
stocks have high relative strength. All but five are
within 10% of their record highs. According to our
S&P formula, our stocks are protected and will be
sold if they drop more then 10-17% from their
record highs. Our research indicates that without
this protection our net return in the first half would
have been 2% less.
In the second quarter, we have increased
our position in well-acting oil and energy stocks.
Some of our new stocks include three oil
companies: Apache, Parker & Parsley and Vintage
Petroleum. All were selected by our Super Volume
method. They are up 13-21%. Among other stocks,
Sanifill has gained significantly as a takeover
target.
The average Volumetric stock has a net
gain of 16.5%. The following stocks had the
greatest capital appreciation as of June 30:
% GAIN DAYS HELD
1. Avery Dennison 84.0% 914
2. Sanifill 83.2 433
3. Lockheed Martin 73.5 675
4. Goodrich 69.3 468
5. Windmere 63.6 131
OTHER NEWS
At the annual meeting of our
shareholders, held on May 16, 1996, all 11
nominated directors were elected for their
respective terms, and the CPA firm of Feuer &
Orlando was approved as independent auditor of
the Fund for the year ending 1996. We are happy
to welcome our two newest directors: Richard
Friedenberg and Stephen Samitt.
On June 20, 1996, Volumetric Fund's
president, Gabriel Gibs, appeared on CNNfn's
morning television show. For the first time, we
have outlined our "Strength and Protection" model
to the viewing public.
UPDATE AND OUTLOOK
On July 5, 1996, the surprising news was
announced that unemployment has declined
sharply from 5.6% to 5.3%. Although this should be
good news, the stock and bond markets follow the
"good news is bad news" scenario and sold off
sharply. We believe, however, that this is a
temporary setback which will soon provide an
excellent buying opportunity. Indeed, your Fund's
president has further increased his stake in
Volumetric since the Annual Meeting. It should be
also noted that the stock market has not gone
down in an election year since 1960.
In the first half of 1996, we have
concentrated our attention on risk reduction. In the
second half, in addition to keeping a strong
defense, we plan to pursue a slightly more
aggressive offensive strategy to increase our total
return.
Please do not hesitate to call us if you
have any questions.
July 9, 1996
Sincerely,
/s/ Gabriel Gibs /s/ Irene Zawitkowski
Gabriel Gibs Irene Zawitkowski
President Executive Vice President
<PAGE>
VOLUMETRIC FUND, INC.
87 Violet Drive
Pearl River, New York 10965
914-623-7637
800-541-FUND
INVESTMENT ADVISER AND TRANSFER AGENT
Volumetric Advisers, Inc.
Pearl River, New York
CUSTODIAN
The Chase Manhattan Bank, N.A.
New York, New York
- -------------------------------------------------------------------------------
BOARD OF DIRECTORS
William P. Behrens
Michael Borhegyi
Jeffery C. Castaldo
Richard C. Friedenberg
Gabriel J. Gibs, Chairman
Robert J. McKenna
Stephen J. Sammitt
David L. Seidenberg
Raymond W. Sheridan
Frank J. Wuertz
Irene J. Zawitkowski
OFFICERS
Gabriel J. Gibs, President, Portfolio Manager
Irene J. Zawitkowski, Executive Vice President, Secretary
Frank J. Wuertz, Vice President
David L. Seidenberg, Treasurer
<PAGE>
PORTFOLIO OF INVESTMENTS
June 30, 1996
(Unaudited)
COMMON STOCKS: 89.9%
MARKET
SHARES COMPANY VALUE
AEROSPACE/DEFENSE: 2.4%
3,600 Lockheed Martin $302,400
--------
AIR TRANSPORTATION: 1.1%
1,500 AMR Corp. 136,500
-------
APPLIANCES: 3.2%
10,000 Maytag 211,250
15,000 Windmere 196,875
-------
408,125
-------
BANKING: 4.3%
12,500 Hibernia Bank 134,375
4,400 Mercantile Bancorp. 195,800
8,300 North Fork Bank 216,838
-------
547,013
-------
BEVERAGE: 1.8%
3,100 Anheuser-Busch 232,500
-------
CHEMICALS: 9.0%
6,000 Avery Dennison 329,250
3,900 Betz Labs 171,113
7,800 Goodrich 291,525
2,300 Olin 205,275
4,600 Witco 158,125
-------
1,155,288
---------
COMPUTERS: 1.1%
5,300 Comdisco 141,113
-------
CONSUMER PRODUCTS: 5.4%
2,700 Clorox 239,288
5,600 Newell Co. 171,500
3,400 Premark 62,900
2,400 Procter & Gamble 217,500
-------
691,188
-------
DRUGS: 1.7%
4,000 Warner-Lambert 220,000
-------
ELECTRICAL/ELECTRONICS: 5.0%
3,200 Cooper Industries 132,800
3,300 Honeywell 179,850
5,500 Mark IV Industries 123,750
9,700 Zero Corp. 207,338
-------
643,738
-------
ENGINEERING: 1.6%
7,800 Jacobs Engineering 205,725
-------
ENTERTAINMENT/LEISURE: 1.3%
10,000 International Game Techn 168,750
-------
ENVIRONMENTAL SERVICES: 3.7%
5,900 Sanifill 290,575
5,500 WMX Technology 180,125
-------
470,700
-------
FINANCIAL SERVICES: 3.1%
3,400 Beneficial Corporation 190,825
7,400 Edwards, A.G. 200,725
-------
391,550
-------
FOODS:3.8%
10,600 Interstate Bakeries 283,550
5,900 Sysco Systems 202,075
-------
485,625
-------
GOLD/SILVER: 1.3%
12,000 Horsham Corp. 166,500
-------
HOME FURNISHINGS: 1.4%
6,100 Masco Corp. 184,525
----- -------
HOTEL/RESTAURANT: 2.4%
15,000 Aztar 172,500
6,000 Luby's Cafetarias 141,000
----- -------
313,500
-------
INSURANCE: 3.2%
8,900 Capsure Holdings 159,088
6,800 Lawyer's Title 122,400
4,000 USLIFE Corp. 131,500
----- -------
412,988
-------
MACHINERY:2.6%
4,200 Ingersoll-Rand 183,750
3,000 York International 155,250
----- -------
339,000
-------
MEDICAL: 1.6%
5,600 Hillenbrand Industries 208,600
----- -------
MISC./DIVERSIFIED: 6.1%
4,700 Allied Signal 268,488
10,000 Calgon Carbon 135,000
6,700 Dexter Corp. 199,325
7,500 Whitman Corp. 180,938
----- -------
783,750
-------
OIL/OIL SERVICES: 8.7%
5,200 Apache Corp. 170,950
6,400 Baker Hughes 210,400
3,400 Chevron 200,600
6,000 Parker & Parsley 166,500
2,600 Texaco 218,075
5,800 Vintage Petroleum 147,900
----- -------
1,114,425
---------
PUBLISHING: 2.1%
3,100 Dow Jones & Co. 129,425
2,800 Harcourt General 140,000
----- -------
269,425
-------
RAILROADS: 1.7%
2,500 Norfolk Southern 211,875
----- -------
RETAIL: 2.8%
3,600 Penney, J.C. 189,000
12,000 Sotheby's Holdings 174,000
------ -------
363,000
-------
STEEL: 1.4%
8,400 Worthington Industries 175,350
----- -------
TRUCKING: 1.5%
6,700 Ryder System 188,438
----- -------
TEXTILE/APPAREL: 1.3%
11,500 Burlington Industries 162,438
------ -------
UTILITIES: 3.3%
4,100 Consolidated Natural Gas 214,225
4,900 Texas Utilities 209,475
----- -------
423,700
-------
TOTAL COMMON STOCKS: 11,517,725
----------
(Cost: $9,891,313)
CASH EQUIVALENTS/RECEIVABLES:10.1%
Cash 49,776
Chase Manhattan Premium Market Rate 1,147,242
Receivable from brokers, others 76,352
Dividends and interest receivable 17,093
------
TOTAL CASH EQUIVALENTS/RECEIVABLES 1,290,463
---------
TOTAL ASSETS 12,808,188
Less liabilities 0
----------
NET ASSETS $12,808,188
===========
VOLUMETRIC SHARES OUTSTANDING: 770,314.35
NET ASSET VALUE PER SHARE: $16.63
==========
NUMBER OF SHAREHOLDER ACCOUNTS 1,379
-----
<PAGE>
VOLUMETRIC FUND, INC.
STATEMENT OF OPERATIONS
For Six Months Ended June 30, 1996
(Unaudited)
INVESTMENT INCOME
Dividends $115,606
Interest 25,684
------
TOTAL INVESTMENT INCOME 141,290
-------
EXPENSES
Management Fee 126,269
Taxes 395
---
TOTAL EXPENSES 126,664
-------
NET INVESTMENT INCOME 14,626
------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain on investments 556,571
Unrealized appreciation of investments
Beginning of period 1,637,517
End of period 1,626,412
---------
Decrease in unrealized appreciation (11,105)
-------
NET GAIN ON INVESTMENTS 545,466
-------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $560,092
========
VOLUMETRIC FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For Six Months Ended June 30, 1996
(Unaudited)
CHANGES RESULTING FROM OPERATIONS
Net investment income $ 14,626
Net realized gain on investments 556,571
Decrease in unrealized appreciation (11,105)
-------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 560,092
-------
DIVIDENDS TO SHAREHOLDERS
From 1995 net investment income
($0.06 per share) (44,589)
From 1995 net realized gain on
investments ($0.84 per share) (624,251)
------ --------
Total distributions: (668,840)
--------
CAPITAL SHARE TRANSACTIONS
From shares sold 511,214
From shares reinvested 655,886
From shares redeemed (738,925)
--------
Net increase from capital share
transactions 428,175
-------
NET INCREASE IN NET ASSETS 319,427
NET ASSETS:
December 31, 1995 12,488,761
--- ---- ----------
June 30, 1996 $12,808,188
=== ==== ===========
FINANCIAL HIGHLIGHTS
For Six Months Ended June 30, 1996
(Unaudited)
PER SHARE DATA
NET ASSET VALUE, 12/31/95 $16.81*
Income from investment operations:
Net investment income 0.02
Net realized and unrealized gain on
investments 0.70
----
Total from investment operations 0.72
----
Less distributions:
Dividends from net investment income (0.06)
Distributions from realized gains (0.84)
-----
Total distributions (0.90)
-----
NET ASSET VALUE, 6/30/96 $16.63
======
TOTAL RETURN 4.59%
Ratios/Supplemental Data:
Net assets, 6/30/96 (in thousands) $12,808
Ratio of expenses to average net assets 1.98%**
Ratio of net income to average net assets 0.22%**
Portfolio turnover rate 77.12%
*Adjusted to $15.91 on 1/1/96 for distributions
**Annualized
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000792394
<NAME> Volumetric Fund, Inc.
<SERIES>
<NUMBER> 001
<NAME> Volumetric Fund
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1.000
<INVESTMENTS-AT-COST> 9,891,313
<INVESTMENTS-AT-VALUE> 11,517,725
<RECEIVABLES> 93,445
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 1,197,018
<TOTAL-ASSETS> 12,808,188
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11,159,447
<SHARES-COMMON-STOCK> 770,314
<SHARES-COMMON-PRIOR> 743,155
<ACCUMULATED-NII-CURRENT> 14,626
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,626,412
<NET-ASSETS> 12,808,188
<DIVIDEND-INCOME> 115,606
<INTEREST-INCOME> 25,684
<OTHER-INCOME> 0
<EXPENSES-NET> 126,664
<NET-INVESTMENT-INCOME> 14,626
<REALIZED-GAINS-CURRENT> 556,571
<APPREC-INCREASE-CURRENT> (11,105)
<NET-CHANGE-FROM-OPS> 560,092
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 31,243
<NUMBER-OF-SHARES-REDEEMED> 37,113
<SHARES-REINVESTED> 41,853
<NET-CHANGE-IN-ASSETS> (319,427)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 126,269
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 126,664
<AVERAGE-NET-ASSETS> 12,803,000
<PER-SHARE-NAV-BEGIN> 16.81
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 2.45
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 16.63
<EXPENSE-RATIO> 1.98
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
