VOLUMETRIC FUND, INC.
1995 HIGHLIGHTS
- - NET ASSET VALUE PER SHARE INCREASED 17.3%.
- - TOTAL NET ASSETS WERE A RECORD $12.5 MILLION.
- - DIVIDEND DISTRIBUTION OF $0.90 WAS DECLARED ON 12/29/95.
- - NEW, "STRENGTH AND PROTECTION," MODEL WAS INTRODUCED IN
THE LAST THIRD OF 1995.
To Our Shareholders:
During 1995 Volumetric Fund's net asset value per share appreciated
17.3%, which included a 3.1% gain in the fourth quarter. The Fund closed out the
year at $16.81, up from our opening NAV of $14.33 on January 2, 1995. The stock
market had a great year; although it had an unusually strong divergence between
large and small capitalization stocks. For example, the New York Stock Exchange
Composite Index (NYSE), which is a market value weighted index in favor of large
stocks, advanced 31.3%. At the same time, the Value Line Geometric Index, which
is unweighted, large and small stocks count equally, was up 19.3%.
As of the end of 1995, Volumetric has outperformed the New York Stock
Exchange Composite Index in 12 out the past 17 years. Our average annual return
since our inception was 14.7%, as compared to the NYSE Index that had a 11.8%
average return in the same period. On December 31, 1995, the Volumetric Index
reached a year end record high of $89,336. The Index measures the value of
$10,000 invested in Volumetric Fund, on January 1, 1979, with all dividends and
distributions reinvested.
As of December 31, 1995, the Fund had $12.5 million in net assets, a
year end record. This was invested in 56 diversified common stocks, representing
86.4% of the total, and 13.6% in cash and equivalents.
FOURTH QUARTER PORTFOLIO CHANGES
All but three of the twenty-three new stocks purchased for our
diversified portfolio in the fourth quarter were selected by our proprietary
"Super Volume" purchase method. Our new stocks are: Bearings, Becton Dickinson,
Brunswick, Calmat, Chevron, Consolidated Natural Gas, Fleetwood Enterprises,
Foster Wheeler, Hillenbrand Industries, Jacobs Engineering, La-Z-Boy, May
Department Stores, New York Times "A", Omnicom, Outboard Marine, Pall, Raymond
Corp., Sara Lee, Sotheby's, Sysco, Texaco, Texas Utilities, Worthington
Industries.
The following stocks were sold in the fourth quarter: Allergan, Anthony
Industries, Casey's General Stores, Chris-Craft, Claire's Stores, Conner
Peripheral, Datascope, Dresser Industries, Fiserv, Flowers Industries,
Honeywell, IBP, Kerr-McGee, Keystone International, Magma Copper, Paccar,
Premark, RJR Nabisco, St Paul Insurance, Sundstrand, UNC, Wal-Mart, Wendy's,
Whirlpool, Zurn Industries.
<PAGE>
DIVIDENDS AND DISTRIBUTIONS
On December 29, 1995, Volumetric Fund declared an annual distribution
of $0.90 per share -- representing $0.84 per share capital gains and $0.06
income dividend -- to shareholders of record at December 29, 1995. Reinvesting
shareholders received 5.66% more Volumetric shares on January 1, 1996. At the
same time, our NAV was reduced by $0.90 per share, from $16.81 to the
reinvestment and 1996 opening price of $15.91.
STRENGTH AND PROTECTION
One of the most significant discoveries in the Fund's history has been
the "Strength and Protection" ("S&P") model. It has been phased into the
Volumetric System during the last third of 1995. In essence, the S&P model
combines stable growth with below average risk and volatility. A review of the
model was presented in our third quarter report.
The S&P model is based on a diversified portfolio of "all-star" stocks.
We call them "R," record high, stocks. They are within less than 10% of their
52-week record highs. An indicator that measures the strength of a stock is the
price to record high ratio (P/R). The higher the ratio the stronger is the stock
relative to its own performance. Generally, these strong "R" stocks will keep on
rising and outperform the market based on their momentum. The protection feature
steps in when we sell a stock. This occurs when an "R" stock drops more than
10-15% from its continuously updated record high. Therefore, unlike the stock
market, the Fund's portfolio is always protected against major declines.
At year end, 54 out of the 56 stocks were "R" stocks. They had an
average P/R ratio of 96.3%, indicating a maximum downside risk for the portfolio
of only 6-8%. It is our objective to keep at least 80% of our stocks in "R"
stocks. The rest are uptrend, "U" stocks, which are bought at low prices. These
stocks, although moving up, have not yet reached a new 52-week record high to
qualify as an "R" stock.
UPDATE AND OUTLOOK
The "Strength & Protection" system has given us significant momentum
going into 1996. The Fund's net asset value advanced 4.2% in 1996, as of
February 12. The Volumetric Index reached a record high of $93,077. As predicted
in our January 2 memo, stock prices increased and interest rates declined in
January.
Volumetric's prospects remain favorable for 1996 for several reasons:
1) Our volume and technical indicators are positive; 2) Lower interest rates
generally increase stock prices; 3) Election years are typically good for the
stock market; and 4) A January gain for stocks, as we had this year, indicates
advancing stock prices for the rest of the year.
Thank you for your confidence in Volumetric Fund. Please call us, if
you have any questions.
February 13, 1996 Sincerely,
Gabriel J. Gibs Irene J. Zawitkowski
President Executive Vice President
<PAGE>
<TABLE>
HISTORICAL RECORD
|
VOLUMETRIC FUND | % Return from Previous
| December 31
|
|
Date Value of $10,000 Net Assets | Volumetric N.Y.S.E. Inflation
Investment | Fund Index Rate
on 1/1/79* | (C.P.I.)**
__________________________________________________|______________________________________________
<S> <C> <C> <C> <C> <C>
12-31-95 $89,336 $12,488,761 | +17.3% +31.3% + 2.3%
12-31-94 76,104 11,155,177 | - 2.2 - 3.2 + 2.7
12-31-93 77,839 11,764,902 | + 2.0 + 7.9 + 2.7
12-31-92 76,311 9,936,452 | +10.6 + 4.7 + 2.9
12-31-91 68,902 7,381,723 | +35.2 +24.0 + 3.1
12-31-90 50,963 4,520,623 | - 5.2 - 7.5 + 6.1
12-31-89 53,743 4,827,545 | +16.0 +24.8 + 4.5
12-31-88 46,349 3,401,136 | +20.0 +12.9 + 4.4
12-31-87 38,637 2,541,231 | - 1.5 - 0.3 + 4.4
12-31-86 39,225 2,151,535 | + 7.4 +14.0 + 1.1
12-31-85 36,524 1,568,787 | +31.9 +26.1 + 3.7
12-31-84 27,696 989,240 | + 6.7 + 1.3 + 4.0
12-31-83 26,321 852,103 | +18.7 +17.4 + 3.8
12-31-82 21,876 505,861 | +16.9 +14.0 + 3.9
12-31-81 18,712 290,709 | +17.0 - 8.7 + 8.9
12-31-80 15,991 174,533 | +37.5 +25.7 +12.4
12-31-79 11,630 73,187 | +16.3 +15.5 +13.3
1-1-79 10,000 25,428 | - - -
__________________________________________________|______________________________________________
|
Annual Average | +14.7% +11.8% + 4.9%
__________________________________________________|______________________________________________
*Assumes reinvestment of all dividends and distributions
**Average Consumer Price Index
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
(for a share outstanding throughout each year)
Years Ended December 31
1995 1994 1993 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $14.33 $16.09 $16.48 $16.13 $12.10 $14.10 $13.10 $11.04
Income from Investment
Operations:
Net Investment Income 0.03 0.03 0.02 0.10 0.12 0.18 0.10 0.24
Net Realized and
Unrealized Gains and
Losses on Securities 2.45 (0.36) 0.30 1.48 4.08 (0.84) 1.84 1.94
------- -------- ------- ------- ------- ------- ------- -------
Total from Investment
Operations 2.48 (0.33) 0.32 1.58 4.20 (0.66) 1.94 2.18
------- -------- ------- ------- ------- ------- ------- -------
Less Distributions:
Dividends from net
investment income 0.00 (0.03) (0.08) (0.12) (0.17) (0.10) (0.25) (0.12)
Distributions from
capital gains 0.00 (1.40) (0.63) (1.11) 0.00 (1.24) (0.69) 0.00
------- -------- ------- ------- ------- ------- ------- -------
Total Distributions 0.00 (1.43) (0.71) (1.23) (0.17) (1.34) (0.94) (0.12)
------- -------- ------- ------- ------- ------- ------- -------
Net Asset Value,
End of Period $16.81 $14.33 $16.09 $16.48 $16.13 $12.10 $14.10 $13.10
======= ======= ======= ======= ======= ======= ======= =======
Total Return 17.31% -2.23% 2.00% 10.60% 35.20% -5.17% 15.95% 19.97%
======= ======= ======= ======= ======= ======= ======= =======
Ratios/Supplemental
Data:
Net Assets, End of
Period (in millions) $12.489 $11.156 $11.765 $ 9.936 $ 7.382 $ 4.521 $ 4.828 $ 3.401
Ratio of Expenses
to Average Net Assets 1.95% 1.99% 2.00% 2.01% 2.03% 2.02% 2.04% 2.09%
Ratio of Net Income
to Average Net Assets 0.21% 0.19% 0.12% 0.66% 0.90% 1.49% 0.82% 1.98%
Portfolio Turnover Rate 159% 150% 177% 126% 149% 194% 188% 203%
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
</TABLE>
<PAGE>
VOLUMETRIC FUND, INC
STATEMENT OF NET ASSETS
December 31, 1995
COMMON STOCKS: 86.4%
NUMBER OF
SHARES COMPANY MARKET VALUE
AEROSPACE/DEFENSE: 3.8%
3,600 Lockheed Martin $284,400
3,600 Rockwell International 190,350
--------
474,750
--------
APPLIANCES: 1.6%
10,000 Maytag 202,500
--------
AUTO/AUTO PARTS: 1.1%
4,500 Bearings 131,625
--------
BANKING: 3.3%
4,400 Mercantile Bancorp 202,400
8,300 North Fork Bank 209,575
--------
411,975
--------
BEVERAGE: 1.7%
3,100 Anheuser-Busch 207,313
--------
BUILDING/CONSTRUCTION: 2.1%
8,000 Calmat 146,000
4,200 US Home 122,325
--------
268,325
--------
BUSINESS SERVICES: 3.2%
3,900 Flight Safety International 195,975
5,400 Omnicom 201,150
--------
397,125
--------
CHEMICALS: 7.1%
6,000 Avery Dennison 300,750
3,900 Goodrich 265,688
2,000 Great Lakes Chemical 144,000
2,300 Olin 170,775
--------
881,213
--------
COMMUNICATIONS: 0.9%
1,800 AT&T 116,550
--------
CONSUMER PRODUCTS: 4.6%
2,700 Clorox 193,388
2,400 Procter & Gamble 199,200
5,700 Sara Lee 181,688
--------
574,276
--------
DRUGS: 1.6%
2,000 Warner Lambert 194,250
--------
ELECTRICAL/ELECTRONICS: 1.7%
6,800 Tech-Sym 215,050
--------
ENGINEERING: 3.2%
4,800 Foster Wheeler 204,000
7,800 Jacobs Engineering 195,000
--------
399,000
--------
<PAGE>
ENTERTAINMENT/LEISURE: 3.8%
8,300 Brunswick 199,200
1,800 Disney, Walt 106,200
8,200 Outboard Marine 167,075
--------
472,475
--------
ENVIRONMENTAL SERVICES: 1.6%
5,900 Sanifill 196,913
--------
FINANCIAL SERVICES: 1.5%
7,600 Edwards, A.G. 181,450
--------
FOODS: 5.4%
6,100 Conagra 251,625
10,600 Interstate Bakeries 237,175
5,900 Sysco Systems 191,750
--------
680,550
--------
HOME FURNISHINGS: 0.9%
3,500 La-Z-Boy Chairs 108,063
--------
HOTEL/RESTAURANT: 1.8%
4,900 McDonalds 221,113
--------
INSURANCE: 4.0%
2,400 American International Group 222,000
7,590 Fremont General 278,933
--------
500,933
--------
MACHINERY: 2.2%
5,000 Pall Corp. 134,375
6,100 Raymond Corp. 138,775
--------
273,150
--------
MEDICAL: 3.2%
2,800 Becton Dickinson 210,000
5,600 Hillenbrand Industries 189,700
--------
399,700
--------
MISC./DIVERSIFIED: 3.4%
4,700 Allied Signal 223,250
8,500 Jostens 206,125
--------
429,375
--------
MOBIL HOMES: 1.5%
7,300 Fleetwood Enterprises 187,975
--------
OIL/OIL SERVICES: 4.9%
3,400 Chevron 178,500
4,600 Halliburton 232,875
2,600 Texaco 204,100
--------
615,475
--------
PUBLISHING: 1.5%
6,300 New York Times "A" 186,638
--------
RAILROADS: 2.8%
3,800 Illinois Central 145,825
2,500 Norfolk Southern 198,438
--------
RETAIL: 2.8%
4,100 May Department Stores 172,713
12,200 Sotheby's 173,850
--------
346,563
--------
<PAGE>
SAVINGS & LOAN: 1.5%
7,400 Great Western Financial 187,775
--------
STEEL: 1.4%
8,600 Worthington Industries 178,988
--------
TEXTILE/APPAREL: 1.8%
9,000 Warnaco 225,000
--------
UTILITIES: 4.6%
4,100 Consolidated Natural Gas 186,038
4,900 Texas Utilities 201,513
5,800 Unicom 189,950
--------
577,501
--------
TOTAL COMMON STOCKS
(Cost $9,150,328) $10,787,845
-----------
CASH EQUIVALENTS/RECEIVABLES: 13.6%
Cash $ 114,304
Chase Manhattan Premium Market Rate Acc. 1,277,611
Receivable from broker, others 291,775
Dividends & interest receivable 17,651
-----------
TOTAL CASH EQUIVALENTS/RECEIVABLES $ 1,701,341
-----------
TOTAL ASSETS $12,489,186
-----------
Taxes payable (425)
-----------
TOTAL NET ASSETS $12,488,761
===========
VOLUMETRIC SHARES OUTSTANDING 743,155.43
NET ASSET VALUE PER SHARE: $ 16.81
===========
NUMBER OF SHAREHOLDER ACCOUNTS 1,383
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
VOLUMETRIC FUND, INC.
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
INVESTMENT INCOME
Dividends $ 194,849
Interest 56,110
Other Income 1,677
----------
TOTAL INVESTMENT INCOME 252,636
----------
EXPENSES
Management Fee (NOTE 2) 226,291
Taxes and bank charges 875
----------
TOTAL EXPENSES 227,166
----------
NET INVESTMENT INCOME 25,470
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 733,212
Unrealized appreciation of investments
Beginning of period $ 501,852
End of Period 1,637,517
----------
Increase in unrealized appreciation 1,135,665
----------
NET GAIN ON INVESTMENTS 1,868,877
----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $1,894,347
==========
<PAGE>
VOLUMETRIC FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended
12-31-95 12-31-94
-------- --------
CHANGES RESULTING FROM OPERATIONS:
Net investment income $ 25,470 $ 27,063
Net realized gain (loss) on
investments 733,212 ( 103,755)
Increase in unrealized
appreciation 1,135,665 ( 193,128)
----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS 1,894,347 ( 269,820)
----------- -----------
DIVIDENDS TO SHAREHOLDERS: (NOTE 1d)
From net investment income 0 ( 21,942)
From net realized gain on investments 0 ( 1,029,653)
----------- -----------
TOTAL DIVIDENDS 0 ( 1,051,595)
----------- -----------
CAPITAL SHARE TRANSACTIONS (NOTE 3)
Net increase (decrease) from capital
share transactions ( 560,763) 711,690
----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,333,584 ( 609,725)
NET ASSETS:
BEGINNING OF YEAR 11,155,177 11,764,902
----------- -----------
$12,488,761 $11,155,177
=========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The Fund is registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended, and the Securities Act of 1933,
as amended, as a diversified, open-end management company. The Fund
incorporated on July 25, 1986 and previously operated as a limited partnership.
1. Significant Accounting Policies
a) Valuation of Securities:
Each security, quarterly and at year end, is valued at the last
reported sales price as published in the Wall Street Journal; daily
security pricing utilizes closing security prices transmitted via
modem by Prodigy Services Corp..
b) Securities Transactions and Investment Income:
Securities are recorded on a trade date basis. Realized gain and loss
are recorded using the identified cost basis method. Dividend income
is recorded as earned on the ex-dividend date and interest income is
recognized on the accrual basis.
c) Federal Income Taxes:
The Fund as a Regulated Investment Company complies with Internal
Revenue Code Subtitle A, Chapter 1, Subchapter M, and distributes to
its shareholders net taxable income.
d) Dividends to Shareholders:
It is the Fund's policy to distribute dividends from net investment
income and from net realized gains at year end. To the extent
that net realized gains can be offset by capital loss carryovers, it
is the Fund's policy not to distribute such gain. As of January 1,
1995 the Fund had $103,755 of available capital losses to offset
capital gains in the current year. Dividends are recorded on the
ex-dividend date in the financial statements and are taxable to
shareholders in the year earned by the Fund. The Fund has declared
and paid the following dividends:
1995 1994
---- ----
Record Date: December 29, 1995 December 23, 1994
Ex-Dividend Date: January 2, 1996 December 27, 1994
Payment Date: January 5, 1996 January 6, 1995
Dividend: $ .90 per share $ .15 per share
2. Management Fee
The Fund is managed by Volumetric Advisers, Inc. whose president and
principal stockholder is the President of the Fund.
Under the Management Contract, Volumetric Advisers, Inc. manager and
investment adviser of the Fund, pays all operating expenses of the Fund,
namely: investment advisory fee, transfer agent and custodian fees,
shareholders reports and proxy statement, registration fees, auditing and
legal fees, insurance, printing, distribution and marketing expenses.
Investment expenses are paid directly by the Fund, namely: taxes,
brokerage commissions and bank charges.
The Fund pays the Adviser an annual management fee of 2.0%, based on
average net assets determined daily and paid monthly, applicable to the
first $10 million of net assets, a fee of 1.90% applies to net assets of
$10 million to $25 million, thereafter the fee declines incrementally to
1.5% for net assets exceeding $100 million.
<PAGE>
3. Capital Share Transactions
At December 31, 1995 there were 1,000,000 shares of $.01 par value
common stock authorized.
YEAR ENDED YEAR ENDED
December 31, 1995 December 31, 1994
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Shares sold 44,401 $ 696,197 65,745 $ 976,474
Dividends reinvested 0 0 69,707 1,033,149
------- ---------- ------- ----------
44,401 696,197 135,452 2,009,623
Shares redeemed (79,904) ( 1,256,959) ( 88,184) ( 1,297,933)
------- ---------- ------- ----------
Net increase
(decrease) (35,503) ($ 560,762) 47,268 $ 711,690
======= ========== ======= ==========
4. Purchases and Sales of Securities
For the year ended December 31, 1995 purchases and sales of securities
excluding U.S. Treasury obligations aggregated $18,295,803 and
$18,951,837 respectively.
At December 31, 1995, the cost of investments for Federal income tax
purposes was $9,150,328. Accumlated net unrealized appreciation on
investments was $1,637,517 consisting of $1,664,930 and $27,413 of gross
unrealized appreciation and depreciation respectively.
5. Composition of Net Assets
At December 31, 1995 Net Assets consisted of:
Capital stock at par value $ 7,432
Capital paid in 10,840,638
Net unrealized appreciation of securities 1,637,517
Undistributed net investment income 3,174
-----------
$12,488,761
===========
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and the
Board of Directors of Volumetric Fund, Inc.:
We have audited the accompanying statement of net assets of Volumetric
Fund, Inc., including the schedule of portfolio of investments, as of
December 31, 1995, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in
the periods then ended, and the financial highlights for each of the years
indicated therein. 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 this audit 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. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. Our procedures
included confirmation of the securities owned as of December 31, 1995, by
correspondence with the Fund's brokers and independent custodian. We
believe that this audit provides 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
Volumetric Fund, Inc. as of December 31, 1995, the results of its operations
for the year then ended, and the changes in in its net assets for each of the
two years in the periods then ended, and the financial highlights for each of
the years indicated therein, in conformity with generally accepted accounting
principles.
\s\ Feuer & Orlando
New York, New York Feuer & Orlando
February 19, 1996 Certified Public Accountants
<PAGE>
INVESTMENT ADVISER AND TRANSFER AGENT
Volumetric Advisers, Inc.
Pearl River, New York
CUSTODIAN
The Chase Manhattan Bank, N.A.
New York, New York
OFFICERS
Gabriel J. Gibs
President, Portfolio Manager
Irene J. Zawitkowski
Executive Vice President, Secretary
Frank J. Wuertz
Vice President
David L. Seidenberg
Treasurer
