SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Registration No. 33-12703
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 _X__
Pre-Effective Amendment No. ______________________ ___
Post-Effective Amendment No. _________10____________ _X__
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 _X__
Amendment No. _______15_____________ _X__
VOLUMETRIC FUND, INC.
(Exact Name of Registrant as specified in Charter)
87 VIOLET DRIVE, PEARL RIVER, NEW YORK 10965
(Address of Principal Executive Officers)
(914) 623-7637
(Registrant's Telephone Number)
Gabriel J. Gibs
Volumetric Fund, Inc.
87 Violet Drive, Pearl River, New York 10965
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: April 30, 1997
It is proposed that this filing will become effective
_X__ immediately upon filing pursuant to paragraph (b)
____ on (date) pursuant to paragraph (b)
____ 60 days after filing pursuant to paragraph (b)
____ on (date) pursuant to paragraph (a) of rule 485
<PAGE>
VOLUMETRIC FUND, INC.
Registration Statement on Form N-1A
CROSS REFERENCE SHEET
Form N-1A
ITEM NO.
PROSPECTUS
PART A PROSPECTUS CAPTION PAGE NUMBER
1. Cover Page Cover
2. *
3. Financial Highlights 3
4. The Fund; Investment Objective; 3;3;4;6
Investment Strategy; Investment Restrictions
5. Management; Officers and Directors 9
6. (a) Capital Stock 10
(b)-(d) *
(e) Cover Page; Shareholder Services Cover;8
(f)-(g) Dividends, Distributions and Tax Statues 8
7. How to Purchase Shares; Shareholder 7;8
Services
8. How to Redeem Shares 8
9. *
SAI
PART B INFORMATION CAPTION PAGE NUMBER
10. Cover Page Cover
11. Table of Contents 2
12. History and General Information 2
13. Investment Objective and Policy; 2
Investment Restrictions 3
14. Management of the Fund 4
15. Control Persons and Principal 6
Holders of Securities
- -----------------------
* Not Applicable
<PAGE>
SAI
PART B INFORMATION CAPTION PAGE NUMBER
16. (a)-(b) Investment Advisory Services 6
(c)-(g) *
(h) See Prospectus
(I) *
17. Brokerage Allocation 7
18. See Prospectus
19. Purchase, Redemption and Pricing of 8
Securities
20. See Prospectus
21. *
22. Calculation of Performance Data 7
23. Financial Statements Annual Report
PART C INFORMATION CAPTION
Information required to be included in Part C
is set forth under the appropriate Item, so
numbered, in Part C to this Registration
Statement
<PAGE>
PROSPECTUS April 30, 1997
VOLUMETRIC FUND, INC.
87 Violet Drive, Pearl River, New York 10965
(914) 623-7637
(800) 541-3863
OBJECTIVE
Volumetric Fund's, (the "Fund") investment objective is capital growth.
INVESTMENT APPROACH
Conservative. The Fund uses a downside protection technique to minimize risk.
INVESTMENT STYLE
The Fund in a broadly diversified portfolio of large and mid-cap stocks,
primarily those of the New York Stock Exchange. The Fund may allocate a
significant portion of its assets into money market or cash equivalents under
negative stock market conditions.
HISTORY
The Fund was established in 1978 and went public in 1987. The Fund had an
average annual total return of 14.45% between January 1, 1979, and December
31, 1996.
SALES AND REDEMPTION FEES
None. The Fund is 100% No-Load.
MINIMUM INVESTMENT
To open an account: $500
Additional purchase: $200
Investors are advised to read and retain this prospectus for future
reference. A "Statement of Additional Information", dated April 30, 1997,
containing further information about the Fund has been filed with the Securities
and Exchange Commission and is hereby incorporated by reference into this
prospectus. A copy of "Statement of Additional Information" is available without
charge by calling the Fund.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
TABLE OF CONTENTS
Summary of Fund Expenses............................................2
The Fund............................................................3
Investment Objective................................................3
Financial Highlights................................................3
Performance.........................................................4
Investment Strategy.................................................4
Investment Restrictions.............................................6
How to Purchase Shares..............................................7
"No-Fee" Retirement and Other Special Accounts......................7
How to Redeem Shares................................................8
Shareholder Services................................................8
Dividends, Distributions and Tax Statues............................8
Management..........................................................9
Officers and Directors..............................................9
Capital Stock......................................................10
Custodian, Trustee and Auditor.....................................10
General Information................................................10
Application........................................................11
SUMMARY OF FUND EXPENSES
The following table has been prepared to assist the investor in
understanding the various costs and expenses that an investor in the Fund will
bear directly or indirectly. You should consider this expense information along
with other important information in this prospectus, the Fund's investment
objective and the Fund's past performance. Please refer to the "MANAGEMENT"
section of the Prospectus for a more complete description of the various costs
and expenses.
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases................................None
Maximum Sales Load Imposed on Reinvested Dividends.....................None
Deferred Sales Load....................................................None
Redemption Fees........................................................None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fee.........................................................1.97%
12b-1 Fees.............................................................None
Other Expenses.........................................................None
TOTAL FUND OPERATING EXPENSES....................................1.97%
You would pay the following expenses on a $1,000 investment assuming 5%
annual return at the end of each time period. The return of 5% and expenses
should not be considered indications of actual or expected fund performance
or expenses, both of which will vary. The expenses are incorporated
in the Fund's net asset value. You do not pay them directly.
1 Year: $20 3 Years: $61 5 Years: $112 10 Years: $254
<PAGE>
THE FUND
The Fund is a diversified, open-end management investment company,
as defined by the Investment Company Act of 1940. It is called a no-load fund
because its shares are sold without a sales charge.
Between August of 1978, its inception, and June of 1986, the Fund
was operated as a private limited partnership, under the name of The Volumetric
Investment Society, with the same investment objective, approach, restrictions
and management as described in this prospectus. Its name was changed to
Volumetric Fund, Inc. on June 15, 1986 and it was incorporated under the laws of
the State of New York on July 25, 1986. The Fund has been open to the general
public since September 3, 1987.
INVESTMENT OBJECTIVE
The Fund's primary investment objective is capital growth. Its
secondary objective is downside protection. The Fund endeavors to accomplish
its purpose through investments in a broadly diversified portfolio of large
and mid-cap stocks, principally those of the New York Stock Exchange. The
Fund may also invest in common stocks of other exchanges, NASDAQ stocks and,
for temporary defensive purposes, may allocate up to 100% of its assets in
cash equivalents and debt instruments, such as United States government
securities and corporate bonds with Standard & Poor's rating of BBB or higher.
Since risks are inherent in all stock market investments, there is no
assurance that the investment objective of the Fund at all times be realized.
The Fund's primary investment objective may not be changed without
shareholder approval.
FINANCIAL HIGHLIGHTS
The following table sets forth the per share operating
performance data for a share of capital stock outstanding, total return, ratios
of average net assets and other supplemental data for each year indicated. It
has been audited by Feuer & Orlando, CPAs, L.L.P., independent accountants,
whose report appears in the Fund's Annual Report. The Fund will furnish a copy
of its Annual Report upon request without charge.
<TABLE>
Years Ended December 31
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992 1991 1990 1989 1988
Net Asset Value, Beginning of Period $16.81 $14.33 $16.09 $16.46 $16.13 $12.10 $14.10 $13.10 $11.04
Income from Investment Operations
Net Investment Income 0.03 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 2.44 2.45 (0.36) 0.30 1.48 4.08 (0.84) 1.84 1.94
------ ------ ------ ------ ------ ------ ------ ------ ------
Total from Investment Operations 2.47 2.48 (0.33) 0.32 1.58 4.20 (0.66) 1.94 2.18
Less Distributions:
Dividends from net investment income (0.06) 0.00 (0.03) (0.08) (0.12) (0.17) (0.10) 0.00 (0.12)
Distributions from capital gains (0.84) 0.00 (1.40) (0.63) (1.11) 0.00 (1.24) (0.69) 0.00
------ ------ ------ ------ ------ ------ ------ ------ ------
Total Distributions (0.90) 0.00 (1.43) (0.71) (1.23) (0.17) (1.34) (0.94) (0.12)
------ ------ ------ ------ ------ ------ ------ ------ ------
Net Asset Value, End of Period $18.38 $16.81 $14.33 $16.09 $16.46 $16.13 $12.10 $14.10 $13.10
====== ====== ====== ====== ====== ====== ====== ====== ======
Total Return 15.52% 17.31% - 2.23% 2.00% 10.60% 35.20% - 5.17% 15.95% 19.97%
Ratios/Supplemental Data
Net Assets, End of Period (millions) $14.286 $12.489 $11.156 $11.765 $ 9.936 $ 7.382 $ 4.521 $ 4.828 $ 3.401
Ratio of Expenses to Average Net Assets 1.99% 1.95% 1.99% 2.00% 2.01% 2.03% 2.02% 2.04% 2.09%
Ratio of Net Income to Average Net Assets 0.19% 0.21% 0.19% 0.12% 0.66% 0.90% 1.49% 0.82% 1.98%
Portfolio Turnover Rate 154% 159% 150% 177% 126% 149% 194% 188% 203%
Average Commission Rate $0.028 N/A N/A N/A N/A N/A N/A N/A N/A
(per share of security)
</TABLE>
<PAGE>
PERFORMANCE
During the period from January 1, 1979, beginning of the Fund's full year,
to December 31, 1996, $10,000 invested in Volumetric Fund grew to $103,189
when all distributions were reinvested. The Fund's average annual total return
from the beginning of 1979 until December 31, 1996 was 14.5%, as compared to
that of the New York Stock Exchange Composite ("NYSE") Index, an unmanaged
index incorporating the weighted average of all the stocks on the New York
Stock Exchange, which had a 12.1% average annual return in the same period.
The performance of Volumetric Fund is expressed as total return. Total
return is the change in value of an investment in a fund over a particular
period, assuming that all distributions have been reinvested. Thus. total
return reflects dividend income, capital gain distributions, and variations in
share prices at the beginning and end of a period. It also incorporates
deduction of expenses, such as the payment of brokerage commissions and
management fees. Please bear in mind: past performance is not necessarily
indicitive of future results. Further information about performance is
available in the Fund's annual and quarterly reports which may be obtained
free of charge.
From time to time, the Fund may advertise its performance in various ways,
including information on the Fund's average annual total return and comparing
the performance of the Fund to relevant benchmarks. In reports to shareholders
or other literature, the Fund may compare its performance to that of other
mutual funds with similar investment objectives and to stock or other relevant
indices.
INVESTMENT STRATEGY
The Fund is using the unique Volumetric Trading System(TM) to make
investment decisions. This disciplined stock trading system has been derived
from Volumetrics(TM), a proprietary method of technical analysis which measures
the flow of money into and out of stocks by their volume activity. Volumetrics
was developed in the early 1970's by the Fund's founder Gabriel J. Gibs. The
basic concepts of Volumetrics is described in Mr. Gibs' M.B.A. thesis entitled
"Forecasting Stock Trends by Volume Analysis" (Pace University, 1974).
During the last third of 1995, the Fund has introduced an enhanced version
of the Volumetric System, the so-called "Strength and Protection" ("S&P") model.
In essence, this model combines strength, a diversified group of strong stocks
for stable growth, and protection, for reduced risk and volatility. The S&P
model uses a three pronged approach to achieve the Fund's investment objective.
The three prongs are: stock selection, timing of stock sales and asset
allocation.
A) STOCK SELECTION
The stock selection strategy of the Fund involves the identification of
those stocks, mostly from the New York Stock Exchange, for which a sudden and
substantial new demand is developing and are in their early or middle stages of
an upside move. As volume typically precedes price, the Fund's timing system
often successfully identifies stocks under accumulation, takeover and
restructuring candidates and stocks that "smart money" buys. A simplified stock
screening process to achieve this is shown in the following paragraphs.
<PAGE>
THE FOLLOWING CHARTED INFORMATION WAS PRESENTED AS A LINE GRAPH IN THE
PROSPECTUS SHOWING THE COMPARISON OF CHANGE IN VALUE OF A $10,000
INVESTMENT IN VOLUMETRIC FUND AND THE NEW YORK STOCK EXCHANGE COMPOSITE
INDEX:
(All Dividends reinvested)
YEAR VOLUMETRIC NYSE Index
1978 $ 10,000 $10,000
1979 $ 11,630 $11,550
1980 $ 15,991 $14,456
1981 $ 18,712 $13,198
1982 $ 21,876 $15,046
1983 $ 26,321 $17,664
1984 $ 27,696 $17,894
1985 $ 36,524 $22,564
1986 $ 39,225 $25,723
1987 $ 38,637 $25,646
1988 $ 46,349 $28,954
1989 $ 53,743 $33,587
1990 $ 50,963 $31,068
1991 $ 68,902 $38,524
1992 $ 76,311 $40,334
1993 $ 77,839 $43,521
1994 $ 76,127 $42,128
1995 $ 89,336 $55,314
1996 $103,189 $71,160
Average Annual Total Return as of 12-31-96
1 year 5 years 10 years Since 1-1-79
15.52% 8.64% 10.77% 14.45%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
<PAGE>
1) Using a computerized data base, stocks are identified from the New
York Stock Exchange, whose price advanced during the previous day or week
on unusually heavy volume relative to their own normal volume.
2) From this group of stocks primary consideration is given to those
which exhibit high relative strength, are in a strong industry group, have
improved earnings prospects, low debt and not yet over- appreciated in price.
This group may also include turnaround situations and stocks with some other
positive investment characteristics.
3) Stocks with the most positive overall characteristics from the
above group are then further analyzed by a proprietary mathematical model and
the stock(s) with the highest up/down volume ratio (demand/supply ratio) will be
bought.
B) TIMING OF STOCK SALES
A major goal of the Fund is to protect its portfolio against declines
during market corrections and bear markets. Therefore, all stocks in the Fund's
portfolio are under continuous daily volume/price surveillance. Typically,
stocks in the Fund's portfolio are either record high stocks ("R") or uptrend
("U") stocks. An R stock is a stock which hit a record 52-week high and
whose price ("P") is still within 10-15% from its high. Generally, at
least 75% of the Fund's portfolio consists of R stocks. To protect against a
decline, an R stock will be sold when it drops more than 10-15% from its
52-week high. The exact selling price is determined by a combination of the
Fund's proprietary volume and range analysis. A U stock will be sold when both
its volume and range analysis turn negative. This usually indicates a subsequent
decline in the price of the stock.
C) ASSET ALLOCATION
To minimize risk, the Fund allocates its assets between stocks and cash
equivalents using a proprietary asset allocation formula. The allocation ratio
between cash and stocks depends on two factors: a) the Fund's volume analysis of
the stock market; and b) the Fund's portfolio's own internal strength. Under
most stock market conditions, the cash position of the Fund would be between 3
to 15%. However, under negative stock market conditions the Fund's cash position
may increase to 15-40%, and under extremely negative conditions to over 40%.
The management does not take portfolio turnover into account in making
investment decisions. It is estimated that most stocks in the Fund's portfolio
will be held from 3 to 15 months, and the annual portfolio turnover rate of the
Fund will be between 100-250%. Generally, holding periods in bull markets are
expected to be longer than in bear markets. High turnover involves
correspondingly greater brokerage commissions which the Fund must pay. A high
turnover rate may have tax consequences for shareholders, due to the realization
of capital gains or losses by the Fund. See "Dividends, Distributions and Tax
Status".
INVESTMENT RESTRICTIONS
The Fund will not purchase securities on margin and will not sell
any security short or engage in the purchase of call, put and other options
or trading in derivatives. The Fund will not purchase or deal in commodities,
real estate or non-financial assets.
The Fund cannot borrow money except as a temporary emergency measure and
not exceeding 10% of its total assets. The Fund may not purchase additional
securities while borrowings exceed 5% of the value of its total assets.
<PAGE>
HOW TO PURCHASE SHARES
Shares of the Fund may be purchased at net asset value per share. Net
asset value per share is calculated on every business day at the close of
trading on the New York Stock Exchange. The Fund determines the net asset value
per share by subtracting the Fund's liabilities from the Fund's total assets,
dividing the remainder by the total number of shares outstanding and adjusting
the result to the nearest full cent. The minimum initial investment is $500. The
minimum for each subsequent investment is $200.
New investors who wish to purchase shares must fill out the
application form and mail it with their check or money order to the Fund. The
day after receipt, the Fund will issue an "Account Statement" acknowledging the
amount invested and the number of shares purchased. Additional shares may be
purchased by written or telephone request. Shares will be priced at the net
asset value per share next determined after the investor's check or telephone
purchase request is received. The maximum amount to be purchased by telephone is
limited to three times the market value of the shares held in the shareholder's
account. The Fund must receive payment after a telephone purchase within three
business days. If payment is not received, the Fund will redeem sufficient
additional shares from the shareholder's account to reimburse the Fund for such
loss. A confirmation of the telephone purchase is not sent until payment is
received.
Purchase of Fund shares will be made in full and fractional shares,
computed to two decimal places, unless the investor specifies full shares. Full
shares may be purchased only by telephone. The Fund reserves the right to reject
purchase orders when, in the judgment of management, such rejection is in the
best interest of the Fund.
Investors may also arrange to purchase shares of the Fund
through financial planners or broker-dealers. Such financial planners or
broker-dealers may charge investors a service fee for the service provided;
bearing in mind that the investor could have acquired the Fund's shares directly
without payment of any fee. No part of any service fee will be received by the
Fund.
"NO-FEE" RETIREMENT AND OTHER SPECIAL ACCOUNTS
Volumetric Fund offers a variety of "no-fee" retirement accounts for
individuals (IRAs), corporations (pension plans) and the self-employed (SEP,
Keogh plans).
Prototype forms of Self-Directed Individual Retirement Account (IRA) and
Simplified Employee Pension Plans (SEP) are available from the Fund or from the
brokerage firm of Ernst & Company (One Battery Park Plaza, New York, NY 10004).
To open a self-directed retirement account, you will also have to open a
brokerage account at Ernst & Co. which represents the Trustee, Delaware Charter
Guarantee and Trust Company, for your IRA transactions. To obtain an IRA
application form or more information about retirement accounts please contact
the Fund.
If you transfer to or invest in an IRA or SEP account of Volumetric Fund
the usual set-up fee ($25) and annual fee ($38) charged by the Trustee will be
partially or fully waived and paid for you by Volumetric Advisers, Inc.
according to the following schedule:
Value of Your Account Set-up Fee Annual Fee
$2,000 or more None None
Less than $2,000 None $20
<PAGE>
The Fund also offers College Investment Plan (CIP) and Beneficiary (BA)
accounts. The CIP is a long-term accumulation account with the objective to meet
a minor's projected college expenses. The Fund will provide a free payment
schedule of how much to invest in the Fund to meet the projected cost. There are
lump sum, monthly, quarterly and annual payment options. The Beneficiary Account
is similar to a revocable trust. It is the same as a regular account, except it
will be automatically transferred to the designated beneficiary, in case of
death. The beneficiary may be a person, such as a relative or friend, or a
charitable organization. Please contact the Fund for additional details on BA
and CIP accounts.
HOW TO REDEEM SHARES
Shares of the Fund may be partially or fully redeemed any time at
their net asset value next determined after a written request is received.
Telephone redemption requests will be also accepted but only after verification
of ownership and is available only to individual shareholders. Joint, custodian,
corporate, trust and institutional redemption requests must be made in writing.
Redemption payments are made no later than the third business day
after the effective date for redemption. Under the Investment Company Act of
1940, the Fund may suspend the right of redemption or postpone the date of
payment for more than three days when: (a) the New York Stock Exchange is
closed, (b) when trading on the New York Stock Exchange is restricted, (c) when
an emergency exists which makes it impractical for the Fund to either dispose of
securities or make a fair determination of net asset value. There is no
assurance that the net asset value received upon redemption will be greater than
that paid by a shareholder upon purchase.
SHAREHOLDER SERVICES
Shareholders receive the following services and statements from the Fund:
* Detailed account statement every time shares are purchased or redeemed.
* Quarterly reports showing the Fund's portfolio and performance.
* Annual account and tax statement, showing the value of the shareholder's
account at year end.
* Latest quotes, account or general information. Contact the Fund by
calling (914) 623-7637, or (800) 541-FUND, including evenings and
weekends. (Toll-free number is not available from area code 914).
DIVIDENDS, DISTRIBUTIONS AND TAX STATUS
The Fund intends to qualify annually as a "regulated investment
company" under the Internal Revenue Code. Qualified investment companies, such
as most mutual funds, are exempt from Federal income taxes. In order to qualify
as a "regulated investment company" the Fund will distribute annually to
its shareholders substantially all of its net investment income and net capital
gains in the form of dividends and capital gain distributions.
Whether received in shares or cash, dividends paid by the Fund from net
investment income or distributions from net capital gains are taxable to
shareholders as ordinary income. Distributions of capital gains are taxable to
shareholders as such, regardless of the length of time Fund shares have been
owned by the shareholder. The Fund declares dividends and capital gain
distributions to shareholders of record annually, in December, and pays the
dividends and distributions before January 15 of the next year. A shareholder
will be treated for tax purposes as having received the dividend in December
when it was declared and not in January when it is paid; Dividends and capital
gain distributions may be subject to state and local laws. Shareholders are
urged to consult with their own tax advisors for further information.
<PAGE>
MANAGEMENT
The Fund's investments and other activities are managed by Volumetric
Advisers, Inc., 87 Violet Drive, Pearl River, New York 10965 (the "Advisers"),
and the officers of the Fund. The Fund's Adviser and its officers are subject to
the supervision and control of the Board of Directors. The Advisers had acted as
adviser to the Fund's predecessor limited partnership.
Pursuant to an Investment Advisory Agreement entered on May 23, 1995,
the Adviser, in addition to providing investment advice, pays all expenses
of the Fund. These include: salaries of personnel, research, data processing,
printing, postage, clerical, administrative, advertising and marketing expenses.
Furthermore, the Adviser also pays the Fund's custodian fees, state registration
fees and franchise taxes, legal and auditing fees, and all other operating
expenses, such as shareholders reports and proxy statement. The Adviser also
acts as the Fund's Transfer Agent. The Adviser does not pay the Fund's
brokerage commissions. The Adviser shall not pay those expenses of the Fund
which are related to litigation against the Fund, if any; or if the Fund is
required to pay income taxes or penalties associated with those taxes.
As compensation for all the above services, the Adviser receives from
the Fund a fee, payable semi-monthly, at the annual rate of 2% of the average
daily net assets of the Fund on the first $10 million of the average daily net
assets, 1.90% of such net assets from $10 million to $25 million, 1.80% of such
net assets from $25 to $50 million, 1.70% of such net assets from $50 to $100
million, and 1.50% of such assets over $100 million. Although this fee is higher
than that paid by most mutual funds, most funds also have to pay various other
such expenses, such as custodian, registration, legal, auditing and transfer
agent fees, plus expenses of shareholder's reports and proxy, while in the
Fund's case all expenses are paid directly by the Adviser. It should also be
noted that unlike many other funds, the Fund does not have any sales and
redemption charges for shareholders or certain "hidden" charges associated with
distribution or marketing of the fund (12b-1 fees). Mr. Gabriel J. Gibs,
President of the Adviser, is considered the "controlling person" of the Adviser,
as defined by the Investment Company Act of 1940.
OFFICERS AND DIRECTORS
The officers of the Fund manage its day-to-day operations. The officers
are subject to the supervision and control of the Board of Directors. Board
members are elected at the Fund's annual meeting, usually held in May. Directors
and officers, and their principal occupations as of April 15, 1996, are listed
below.
WILLIAM P. BEHRENS, Director (since 1987)
Senior Managing Director and CEO of Ernst & Company, a member firm of New York,
American and other principal stock exchanges. Director, National Securities
Clearing Corporation.
JEFFREY J. CASTALDO, Director (since 1994)
Executive Director, Capelli Associates, a commercial real estate development and
management company.
RICHARD C. FRIEDENBERG, Director (since 1996)
President, Twenty First Century Group, direct marketing consultants.
GABRIEL J. GIBS, Founder, President, Portfolio Manager, and Chairman
(since 1978) President of Volumetric Advisers Inc., the Fund's investment
adviser.
<PAGE>
ANNA KARPATI, Director (since 1997)
Executive Secretary, Board of Education, River Vale, New Jersey
ROBERT J. McKENNA, Director (since 1994)
Retired. Prior to 1994, President and Chief Operating Officer of National Car
Rental Systems.
STEPHEN J. SAMITT, Director (since 1996)
Partner, CPA, Tait Weller & Baker, certified public accountants.
DAVID L. SEIDENBERG, Treasurer and Director (since 1983)
Vice President, Davos Chemical Company.
RAYMOND W. SHERIDAN, Director (since 1995)
Owner, Sheridan Associates, insurance and real estate brokers.
FRANK J. WUERTZ, Vice President, Director (since 1980)
Director of Communications, Lonza, Inc.
IRENE J. ZAWITKOWSKI, Executive Vice President, Secretary and Director
(since 1978) Assistant Portfolio Manager of the Fund. Vice President of
Volumetric Advisers, Inc.
CAPITAL STOCK
The Fund is authorized to issue 1,000,000 shares of Common Stock with
a par value of $.01 per share. Each share has one vote and all shares
participate equally in dividends and other distributions by the Fund. Fractional
shares have the same rights proportionately as do full shares. Shareholders are
entitled to redeem their shares as set forth under "How to Redeem Shares".
The Fund's Board of Directors may authorize the issuance of additional
shares of common stock, if demand for the Fund's shares surpasses currently
authorized shares.
CUSTODIAN, TRUSTEE AND AUDITOR
The Chase Manhattan Bank N.A., ("Chase"), 1211 Avenue of
Americas, New York, NY 10036, acts as the Custodian of the Fund's securities.
Chase does not have any part in determining the investment policies of the Fund
or which securities are to be purchased or sold.
Delaware Charter Guarantee & Trust Company, P.O. Box 8963, Wilmington, DE
19899, through a brokerage account at Ernst & Company, One Battery Park Plaza,
New York, NY 10004, acts as the Trustee for the Fund's self-directed IRA and SEP
accounts.
The firm of Feuer & Orlando, CPAs, L.L.P., 220 Fifth Avenue, New York, NY
10001, acts as the Fund's independent certified public accountant.
GENERAL INFORMATION
Volumetric Fund is on NASDAQ's Mutual Fund Listing with the
ticker symbol of VOLMX. The Fund's daily net asset value (NAV) is published
nationwide in the mutual fund section of major newspapers or may be accessed
through on-line services. The Fund may be contacted by E-Mail via
[email protected].
<PAGE>
PART B
STATEMENT OF ADDITIONAL INFORMATION
VOLUMETRIC FUND, INC.
This Statement of Additional Information is not a prospectus. It should
be read in conjunction with the Fund's Prospectus, a copy of which may be
obtained by writing Volumetric Fund, 87 Violet Drive, Pearl River, New York
10965 or calling
(914) 623-7637.
This Statement of Additional Information relates to the Fund's
Prospectus, dated April 30, 1997.
<PAGE>
TABLE OF CONTENTS
History and General Information........................................2
Investment Objective and Policy........................................2
Investment Restrictions................................................3
Management of the Fund.................................................4
Control Persons and Principal Holders of Securities....................6
Investment Advisory Services...........................................6
Brokerage Allocation...................................................7
Purchase, Redemption and Pricing of Securities.........................7
Calculation of Performance Data........................................7
Financial Statements...................................................8
HISTORY AND GENERAL INFORMATION
Volumetric Fund, Inc. -- formerly named The Volumetric Investment
Society -- was founded in August of 1978 by Mr. Gabriel J. Gibs, as a private
investment partnership for his friends, relatives and associates. At that time
he had worked as a chemist for Lonza, Inc., a large multinational chemical firm,
where some of his associates encouraged him to start the fund. The Fund started
its operations on September 1, 1978 with 19 charter shareholders and with net
assets of $17,712, and an initial offering price of $10.00 per share.
The Fund's name was changed from the Volumetric Investment Society to
Volumetric Fund on June 15, 1986. The Annual Meeting of shareholders approved
the reorganization of the Fund into a New York corporation on July 24, 1986.
Additional history and general information about the Fund is described
in the Prospectus.
INVESTMENT OBJECTIVE AND APPROACH
The Fund's investment objective is capital growth. The Fund's
investment approach is described in the appropriate section of the Prospectus.
In the following, some additional details of the Fund's investment approach is
provided.
The Fund's investment decisions, buying and selling of common stocks,
are made with the utilization of volume analysis, specifically the Fund's
proprietary Volumetric Timing System. This is a technical system, based on the
analysis of stocks and the market's trading volume and in which fundamental
aspects are of only minor significance.
<PAGE>
INVESTMENT RESTRICTIONS
(1) The Fund will not purchase securities on margin.
(2) The Fund will not sell any security short or engage in the
purchase of call, put or other options.
(3) The Fund will not invest more than 5% of its assets in the
securities of any one issuer (except United States government securities) or
more than 25% of its assets in any single industry.
(4) The Fund will not purchase more than 5% of any class of securities
of any one issuer or invest for the purpose of exercising control of the
issuer's management.
(5) The Fund will not invest more than 5% of its total assets in the
securities of other investment companies or purchase more than 3% of any other
investment company's securities.
(6) The Fund cannot borrow money except as a temporary emergency
measure and not exceeding 10% of its total assets. The Fund may not purchase
additional securities while borrowings exceed 5% of the value of its total
assets.
(7) The Fund will not make loans.
(8) The Fund will not underwrite securities of other issuers, except
when purchasing or selling portfolio securities.
(9) The Fund will not issue senior securities.
(10) The Fund will not invest in securities for which there exists no
readily available market or for which there are legal or contractual
restrictions on resale.
(11) The Fund will not purchase or deal in commodities, real estate or
non-financial assets.
These investment restrictions may not be changed without the approval
by a vote of a majority of the Fund's outstanding voting securities. Under the
Investment Company Act of 1940, such approval requires the affirmative vote, at
the meeting of shareholders, of the lesser of (a) more than 50% of the Fund's
outstanding shares, or (b) at least 67% of shares present or represented at the
meeting, provided that the holders of more than 50% of the Fund's outstanding
shares are present in person or represented by proxy.
<PAGE>
MANAGEMENT OF THE FUND
The everyday operation of the Fund is managed by the Fund's Adviser and
its officers. All current officers are also directors. Major policy decisions of
the Fund must be approved by the Board. The number of directors is currently set
at 11. Any change in the number of directors must be approved by the Board.
The directors and officers of the Fund, their addresses and principal
occupations are listed below.
* William P. Behrens, Director
Ernst & Co., 1 Battery Park Plaza, New York, NY 10004
Senior Managing Director and CEO, Ernst & Co., a member firm of
New York and American Stock Exchanges since 1975. American Stock
Exchange Official. Ernst & Co. and Volumetric Advisers, Inc. have a
Distribution Agreement for the Fund's shares.
Jeffrey J. Castaldo, Director
1901 Regent Drive, Mount Kisco, NY 10549
Executive Director, Capelli Associates, a commercial real estate
development and management company since 1989.
Richard C. Friedenberg, Director (effective May 16, 1996)
11 Sterling Road, Chestnut Ridge, NY 10977
President, Twenty First Century Group, direct marketing consultants.
* Gabriel J. Gibs, President, Portfolio Manager, Chairman of the Board
87 Violet Drive, Pearl River, New York 10965
President of Volumetric Advisers, Inc., the Fund's Adviser, since 1983.
Between 1974 and 1983 he was also the President of his own SEC
registered investment advisory firm, a sole proprietorship, and the
predecessor firm for Volumetric Advisers, Inc.
Anna Karpati, Director (effective May 21, 1997)
28 Summit Avenue, Hackensack, NJ 07601
<PAGE>
Robert J. McKenna, Director
193 Washington Avenue, Tappan, NY 10983
Retired. President and Chief Executive Officer of National Car Rental
Systems between 1992 and 1994. Executive Vice President of National
between 1988 and 1992.
David L. Seidenberg, Treasurer, Director
29 Shaw Road, Woodcliff Lake, NJ 07605
Vice President, Davos Chemical Company, since 1972.
Stephen J. Samitt, Director (effective May 16, 1996)
2 Ridge Drive North, Montville, NJ 07045
Partner, Tait, Weller & Baker, a full service accounting firm.
Reymond W. Sheridan, Vice President and Director
1 Parker Road, Blauvelt, NY 10913
Partner, Sheridan Associates, insurance and real estate brokers.
*Frank J. Wuertz, Vice President, Director
510 Marion Lane, Paramus, NJ 07605
Director of Communications, Lonza, Inc. and in various other capacities
since 1980.
*Irene J. Zawitkowski, Executive Vice President, Secretary, Assistant Portfolio
Portfolio Manager, Director
647 Athlone Terrace, River Vale, New Jersey 07675
Executive Vice President, Volumetric Advisers, Inc. since 1985.
*Interested person within the definition set forth in Section 2(a)(19) of the
Investment Company Act of 1940.
Directors do not receive any compensation other than a $100 fee per
board meeting which is paid by the Fund's Adviser. Officers are employees of the
Adviser and are not being paid by the Fund.
<PAGE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Gabriel Gibs, President of the Fund's Adviser is considered the
"controlling person" of the Adviser, and therefore, that of the Fund.
No shareholder owned beneficially more than 5% of the Fund's shares, as
of April 15, 1997.
INVESTMENT ADVISORY SERVICES
Volumetric Advisers, Inc., until August of 1986 named Volumetric, Inc.,
is the Investment Adviser of the Fund, ( 87 Violet Drive, Pearl River, New York,
10965), pursuant to an Investment Advisory Agreement dated May 23, 1995. It is
registered with the Securities and Exchange Commission pursuant to the
Investment Advisers Act of 1940. Gabriel J. Gibs is the controlling person of
the Adviser. Mr. Gibs has been managing discretionary investment accounts for
individuals since 1974. His sole proprietorship business was incorporated in New
York in 1983 as Volumetric, Inc.
Gabriel J. Gibs is President of both the Fund and the Adviser. Irene J.
Zawitkowski is Executive Vice President of both the Fund and the Adviser.
The fee received by the Adviser is described in detail in the
Prospectus. The Investment Adviser's fee will be reduced for any fiscal year by
any amount necessary to prevent Fund expenses (exclusive of interest, taxes,
brokerage commissions and extraordinary expenses) from exceeding the most
restrictive expense limitations imposed by the securities laws or regulations of
those states or jurisdictions in which the Fund's shares registered or qualified
for sale. Currently this expense limitation is 2%. The daily management fee is
calculated each day and deducted from total assets, as an accrued expense, to
obtain net assets. The management fee is paid out to the Adviser, semi-monthly.
The daily management fee is determined by multiplying the Fund's net assets by
0.02 (current rate) and divide the resulting number by 365.
Management fees paid by the Fund to the Adviser for the past three
years were as follows:
1996 $ 257,612
1995 $ 226,291
1994 $ 225,521
The Agreement was approved by the Board of Directors (including the
affirmative vote of all Directors who were not parties to the Agreement or
interested persons of any such party) on May 23, 1995. The Agreement may be
terminated without penalty on 60 days written notice by a vote of the majority
of the Fund's Board of Directors or by the Adviser, or by holders of a majority
of the Fund's outstanding shares. The Agreement will be submitted to the first
meeting of the Fund's shareholders, and if approved at the meeting will continue
for two years and from year-to-year thereafter provided it is approved, at least
annually, in the manner stipulated in the Investment Company Act of 1940. This
requires that the Agreement and any renewal be approved by a vote of the
majority of the Fund's directors who are not parties there to or interested
persons of any such party, cast in person at a meeting specifically called for
the purpose of voting on such approval.
<PAGE>
BROKERAGE ALLOCATION
To minimize brokerage commissions the Fund uses predominantly the
services of discount brokers and full-service brokers whose negotiated rates are
competitive with those of discount brokers. Brokers are selected based on their
fees, services, execution capability, and reputation. The Fund is not obtaining
research services from any broker. William P. Behrens, a director of the Fund,
is Senior Managing Director and CEO of Ernst & Co., a New York Stock Exchange
Member firm, which acts also as one of the brokers of the Fund.
The aggregate commissions paid by the Fund to brokers for the three
previous calendar years are indicated below:
1996. . . . . . . . . . . . . . . . . . . . . . .$43,039
1995. . . . . . . . . . . . . . . . . . . . . . .$38,728
1994. . . . . . . . . . . . . . . . . . . . . . .$47,616
PURCHASE, REDEMPTION AND PRICING OF SECURITIES
The Fund is a no-load fund. It is offering and redeeming its shares at
net asset value, as described in detail in the Prospectus.
Net asset value per share is calculated daily, except on Saturdays,
Sundays and holidays, as soon as the closing prices of the New York Stock
Exchange become available, currently at 4 P.M. On holidays, when the New York
Stock Exchange is closed, the Fund does not calculate its net asset value
per share. These days are: New Year's Day, President's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
CALCULATION OF PERFORMANCE DATA
The performance of the Fund is expressed as total return. Total return
is the change in value of an investment in a fund over a particular period,
assuming that all distributions have been reinvested. Thus, total return
reflects dividend income, capital gain distributions and variations in share
prices at the beginning and end of a period.
<PAGE>
The Fund's average annual total returns for periods of 1, 5 and 10
years, from the beginning of the Fund's first full year, January 1, 1979, are
shown below. The average annual total return is calculated by summing up annual
returns and dividing the sum by the number of years used. The SEC standardized
is a compounded return, per instruction in Item 22 (b) (1) (A).
Average Annual Total Returns, Period Ending 12/31/96
Return 1 Year 5 Year 10 Year Since 12/31/78
Average Annual Total +15.52% +8.64% +10.77% +14.45%
SEC Standardized +15.52% +8.40% +10.14% +13.84%
(compounded)
FINANCIAL STATEMENTS
The Fund's 1996 Annual Report, dated February 14, 1997, containing the
audited financial statements for year ending 1996, notes to financial
statements, and the Opinion of Feuer & Orlando, Independent Certified Public
Accountants, has been filed with the Securities and Exchange Commission and is
hereby incorporated by reference into this Statement of Additional Information.
A copy of the Fund's 1996 Annual Report is available free of charge upon
request.
<PAGE>
VOLUMETRIC FUND, INC.
ANNUAL REPORT TO SHAREHOLDERS
DECEMBER 31, 1995
<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 investments, as of December 31, 1996, 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, 1996, 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, 1996, the results of its
operations for the year then ended, and the changes 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.
New York, New York Feuer & Orlando, CPA's L.L.P.
February 7, 1997 Certified Public Accountants
220 Fifth Avenue, Suite 1400 New York, NY 10001 212-679-2220 FAX 212-684-2606
<PAGE>
VOLUMETRIC FUND, INC.
STATEMENT OF NET ASSETS
December 31, 1996
COMMON STOCKS:
93.1%
<TABLE>
<S> <C> <C> <C> <C>
NUMBER OF MARKET FOREST PRODUCTS: 1.0%
SHARES COMPANY VALUE 8,000 Longview Fibre 147,000
--------
AEROSPACE/DEFENSE: 6.5% HOME CONSTRUCTION: 1.4%
3,600 Lockheed Martin $ 329,400 5,400 Centex 203,175
--------
4,000 Precision Castparts 198,500 INDICES: 6.7%
3,200 Rockwell International 194,800 13,000 S & P 500 Depository Receipts 959,969
---------
4,000 Teleflex 208,500 MEDICAL: 1.4%
-----------------------
931,200 10,000 Bindley-Western 193,750
----------------------- --------
AUTO/AUTO PARTS: 2.5%
5,500 Chrysler 181,500 MISC./DIVERSIFIED: 6.2%
5,500 Dana Corp. 179,436 4,700 Allied Signal 314,900
-----------------------
360,936 6,700 Dexter Corp. 213,563
-----------------------
BANKING: 3.7% 2,000 Textron 188,500
4,400 Mercantile Bancorp 226,050 5,000 Universal Corp. 160,625
--------
8,300 North Fork Bancorp 295,688 877,588
----------------------- --------
521,738 OFFICE EQUIP/SUPPLIES: 1.1%
-----------------------
BEVERAGE: 1.7% 2,900 Pitney-Bowes 158,775
--------
6,200 Anheuser-Busch 248,000 OIL/OIL SERVICES: 9.0%
-----------------------
CHEMICALS: 8.2% 3,300 Burlington Resources 166,238
12,000 Avery Dennison 424,500 3,400 Chevron 221,000
3,900 Betz Dearborn 228,150 4,000 Murphy Oil 222,500
3,900 Ecolab 146,738 6,000 Parker & Parsley 220,500
4,300 Mallinckrodt 189,737 2,600 Texaco 255,125
11,000 RPM Corp. 187,000 5,800 Vintage Petroleum 200,100
----------------------- --------
1,176,125 1,285,463
---------------------- ---------
COMPUTERS: 9.1% REAL ESTATE: 1.3%
8,000 Analog Devices 271,000 7,300 Excel Reatly Trust 185,238
----------
6,500 Dallas Semiconductor 149,500 RETAIL: 1.6%
15,500 Data General 224,750 12,000 Sotheby's Holdings 223,500
----------
5,200 EMC Corp. 172,250
2,000 Intel 261,875 SAVINGS & LOAN: 2.2%
6,500 Wallace Computer 224,250 8,600 First Republic Bancorp. 144,050
-----------------------
1,303,625 7,000 Glendale Federal 162,750
---------------------- ---------
CONSUMER PRODUCTS: 2.3% 306,800
---------
3,400 Premark 75,650 TRUCKING: 1.3%
2,400 Procter & Gamble 258,300 6,700 Ryder System 188,437
----------------------- ---------
333,950 TEXTILE/APPAREL: 1.0%
-----------------------
DRUGS: 2.1% 21,000 Tultex 147,000
--------
4,000 Warner-Lambert 300,000 UTILITIES: 4.1%
-----------------------
ELECTRICAL/ELECTRONICS: 5.7% 4,100 Consolidated Natural Gas 226,525
9,300 Baldor Electric 229,013 4,500 Questar 165,375
3,600 General Signal 153,900 4,900 Texas Utilities 199,675
--------
3,300 Honeywell 216,975 591,575
---------
2,500 Johnson Controls 207,187 TOTAL COMMON STOCKS: 13,301,369
------------------- ----------
807,075 (Cost: $10,631,245)
ENVIRONMENTAL SERVICES: 1.3% CASH EQUIVALENTS/RECEIVABLES: 6.9%
4,000 Ionics 192,000 Cash 33,766
-------------------
Chase Manhattan Premium
Market Rate Acct. 602,432
FINANCIAL SERVICES: 7.8% Receivable from brokers, others 322,517
4,000 American Express 226,000 Dividends and interest receivable 26,925
---------
3,400 Beneficial Corporation 215,475 TOTAL CASH EQUIVALENTS/RECEIVABLES 985,640
---------
5,400 Donaldson Lufkin Jenrette 194,400 TOTAL ASSETS 14,287,009
7,400 Edwards, A.G. 248,825 Taxes payable (425)
----------
8,000 Paine Webber 225,000 NET ASSETS $ 14,286,584
------------------- ===========
1,109,700 VOLUMETRIC SHARES OUTSTANDING: 777,446.11
FOODS: 3.8% NET ASSET VALUE PER SHARE: $ 18.38
===========
10,600 Interstate Bakeries 343,875 NUMBER OF SHAREHOLDER ACCOUNTS 1,385
-----------
5,500 Sara Lee 204,875
----------------------
548,750
</TABLE>
<PAGE>
VOLUMETRIC FUND, INC.
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
INVESTMENT INCOME
Dividends......................................................$.....239,943
Interest..............................................................43,593
-------------
TOTAL INVESTMENT INCOME.....................................283,536
-------------
EXPENSES
Management fee (NOTE2)...............................................257,612
Taxes and bank charges...................................................550
-------------
TOTAL EXPENSES..............................................258,162
-------------
NET INVESTMENT INCOME........................................25,374
-------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments.....................................867,188
Unrealized appreciation of investments
Beginning of period.....................$...1,637,517
End of period...............................2,670,124
-------------
Increase in unrealized appreciation.........................1,032,607
-------------
NET GAIN ON INVESTMENTS..............................................1,899,795
-------------
INCREASE IN ASSETS RESULTING FROM OPERATIONS.................. $ 1,925,169
=============
VOLUMETRIC FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended
CHANGES RESULTING FROM OPERATIONS 12/31/96 12/31/95
Net investment income......................$.....25,374.....$.......25,470
Net realized gain on investments................867,188.. 733,212
Increase in unrealized appreciation...... ..1,032,607..........1,135,665
INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS............................1,925,169..... 1,894,347
--------- ---------
DIVIDEND TO SHAREHOLDERS: (NOTE 1d)
From net investment income......................(44,589)...... 0
From net realized gain on investments..........(624,251)... 0
--------- -
TOTAL DIVIDENDS.............................(668,840).... 0
--------- -
CAPITAL SHARE TRANSACTIONS (NOTE 3)
Net increase (decrease) from capital
share transactions.............................541,494 (560,763)
-------- ---------
TOTAL INCREASE IN NET ASSETS....................1,797,823.. 1,333,584
NET ASSETS:
BEGINNING OF YEAR..........................12,488,761..... 11,155,177
END OF YEAR..............................$.14,286,584.......$.12,488,761
================= =================
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 the 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. Dividends are recorded on the ex-dividend
date in the financial statements and accordingly, the statement of
changes in net assets and financial highlight tables for 1996
contain 1995's dividend. The Board of Directors have declared and
paid the following dividends:
1996 1995
---- ----
Record Date: December 31, 1996 December 29, 1995
Ex-Dividend Date: January 2, 1997 January 2, 1996
Payment Date: January 6, 1997 January 5, 1996
Dividend: $ 1.21 per share $ 0.90 per share
e. USE OF ESTIMATES: The preparation of the 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 revenue and
expense during the reported periods.
Actual results could differ from those estimates.
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, shareholder 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. Based on
average net assets determined daily and paid monthly, the Fund pays the
Adviser an annual management fee of 2.0%, 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.
3. CAPITAL SHARE TRANSACTIONS
At December 31, 1996. there were 1,000,000 shares of $0.01 par value
common stock authorized.
<TABLE>
<S> <C> <C>
YEAR ENDED YEAR ENDED
December 31, 1996 December 31, 1995
SHARES AMOUNT SHARES AMOUNT
------ ------ ------
Shares sold 62,518 $1,040,539 44,401 $ 696,197
Dividends reinvested 41,225 655,886 0 0
------ ------- -------- ---------
103,743 1,696,425 44,401 696,197
Shares redeemed (69,452) (1,154,931) (79,904) (1,256,959)
--------- --------- -------- ---------
Net increase (decrease) 34,291 541,494 (35,503) $ (560,762)
------- --------- ------- ----------
</TABLE>
<PAGE>
4. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 1996, purchases and sales of securities
aggregated respectively 20,928,037 and $20,314,301. At December 31, 1996, the
cost of investments for Federal income tax purposes was $10,631,245.
Accumulated net unrealized appreciation on investments was $2,670,124
consisting of $2,684,322 and $14,198 of gross unrealized appreciation and
depreciation respectively.
5. COMPOSITION OF NET ASSETS
At December 31, 1996 Net Assets consisted of
Capital stock at par value.................................... $ 7,775
Capital paid in (including reinvested dividends).............. 11,608,685
Net unrealized appreciation of securities......................... 2,670,124
Undistributed net investment income.............................. 0
Undistributed net realized gains................................. 0
----------
$14,286,584
==========
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
In Prospectus: Financial Highlights
In SAI: Other financial statements have been incorporated by
reference into the Fund's 1996 Annual Report
(b) Exhibits (exhibits are attached are numbered to correspond to
items below:
*(1) Certificate of Incorporation of Volumetric Fund, Inc.
*(2) By-Laws of Volumetric Fund, Inc.
(3) None
*(4) Specimen certificate for shares of Common Stock of
Registrant *(5) Amended Investment Advisory Agreement between
Registrant and
Volumetric Advisers, Inc.
(6) None
(7) None
*(8) Custodian Agreement between Registrant and Chase Manhattan
Bank, N.A.
(9) None
(10) None
(11) Consent of independent accountants for the Registrant.
(12) None
(13) None
(14) None
(15) None
* Previously filed
<PAGE>
Item 25 PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None
Item 26 NUMBER OF HOLDERS OF SECURITIES
Title of Class Number of Record Holders
Common, $0.01 par value 1389 (as of March 31)
>
Item 27 INDEMNIFICATION
Insofar as indemnification for liability arising under
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the registrant for
expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
Item 28 BUSINESS AND OTHER CONNECTION OF INVESTMENT ADVISER
None
Item 29 PRINCIPAL UNDERWRITERS
None
Item 30 LOCATION OF ACCOUNTS AND RECORDS
Volumetric Advisers, Inc. maintains all records at the office of
the Registrant at 87 Violet Drive, Pearl River, NY 10965.
Item 31 MANAGEMENT SERVICES
None
Item 32 UNDERTAKINGS
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant certifies that it meets all of the
requirements for the effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereto
fully authorized, in the Town of Orangetown, and State of New York on 29th day
of April 1996.
VOLUMETRIC FUND, INC.
Registrant
By:___/s/ Gabriel J. Gibs___
Gabriel J. Gibs, President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
/s/ Gabriel J. Gibs
- ----------------------------
Gabriel J. Gibs President, Chairman of the Board 4/24/96
/s/ Irene J. Zawitkowski
- ----------------------------
Irene J. Zawitkowski Executive Vice President, Director 4/24/96
- ----------------------------
William P. Behrens Director
- ----------------------------
Jeffrey J. Castaldo Director
/s/ Robert S. Dines
- ----------------------------
Robert S. Dines Director 4/29/96
- ----------------------------
Alan S. Goldschlager Director
/s/ Robert J. McKenna
- ----------------------------
Robert J. McKenna Director 4/25/96
- ----------------------------
David L. Seidenberg Treasurer, Director
/s/ Raymond W. Sheridan
- ----------------------------
Raymond W. Sheridan Director 4/29/96
- ----------------------------
Frank J. Wuertz Vice President, Director
<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> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1.000
<INVESTMENTS-AT-COST> 10,631,245
<INVESTMENTS-AT-VALUE> 13,301,369
<RECEIVABLES> 349,442
<ASSETS-OTHER> 636,198
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 14,287,009
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 425
<TOTAL-LIABILITIES> 425
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11,608,685
<SHARES-COMMON-STOCK> 777,446
<SHARES-COMMON-PRIOR> 770,314
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,670,124
<NET-ASSETS> 14,286,584
<DIVIDEND-INCOME> 239,943
<INTEREST-INCOME> 43,593
<OTHER-INCOME> 0
<EXPENSES-NET> 258,162
<NET-INVESTMENT-INCOME> 25,374
<REALIZED-GAINS-CURRENT> 867,188
<APPREC-INCREASE-CURRENT> 1,032,607
<NET-CHANGE-FROM-OPS> 1,925,169
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 62,518
<NUMBER-OF-SHARES-REDEEMED> 69,452
<SHARES-REINVESTED> 41,225
<NET-CHANGE-IN-ASSETS> 1,797,823
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 257,612
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 258,162
<AVERAGE-NET-ASSETS> 13,299,774
<PER-SHARE-NAV-BEGIN> 16.81
<PER-SHARE-NII> 0.35
<PER-SHARE-GAIN-APPREC> 1.22
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 18.38
<EXPENSE-RATIO> 1.99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
