<PAGE> 1
Ellsworth Convertible Growth and Income Fund
[logo]
2000 Semi-Annual Report
March 31, 2000
<PAGE> 2
Ellsworth Convertible Growth and Income Fund, Inc. operates as a closed-end,
diversified management investment company and invests primarily in convertible
securities, with the objectives of providing income and the potential for capi-
tal appreciation--which objectives the Company considers to be relatively equal,
over the long-term, due to the nature of the securities in which it invests.
Highlights
Performance thru 3/31/00 (with dividends reinvested)
<TABLE>
<S> <C> <C> <C> <C>
3 Months 1 Year 5 Year 10 Year
-------- ------ ------- -------
Ellsworth market value * ................. 5.50% 7.57% 119.35% 270.77%
Ellsworth net asset value # .............. 9.05 21.16 138.84 288.93
Closed-end convertible fund average # .... 14.51 36.59 119.77 278.00
S&P 500 * ................................ 2.29 17.94 227.15 460.97
Russell 2000 * ........................... 7.09 37.43 106.73+ 229.44+
Lehman Aggregate Bond Total Return Index # 2.21 1.87 41.20 116.26
</TABLE>
Performance data represent past results and do not reflect future performance.
* From Bloomberg L.P. pricing service.
# From Lipper, Inc. Closed-End Fund Performance Analysis.
+ Simple appreciation of index.
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Quarterly History of NAV and Market Price
Net Asset Values Market Prices (AMEX, symbol ECF)
Qtr Ended High Low Close High Low Close
--------- ------ ------ ------ ------ ----- -----
<S> <C> <C> <C> <C> <C> <C>
Jun 99 $11.84 $11.15 $11.69 $ 9.94 $9.19 $9.63
Sep 99 12.18 11.18 11.23 10.00 9.06 9.38
Dec 99 11.53 9.98 11.08 9.69 8.13 8.44
Mar 00 12.30 10.64 11.99 9.38 8.44 8.81
</TABLE>
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<TABLE>
<CAPTION>
Dividend Distributions (12 Months)
Record Payment Capital
Date Date Income Gains Total
-------- -------- ------ ------- ------
<S> <C> <C> <C> <C>
5/13/99 5/27/99 $0.090 $0.000 $0.090
8/16/99 8/30/99 $0.090 $0.000 $0.090
10/29/99 11/29/99 $0.058 $1.232 $1.290
2/14/00 2/28/00 $0.090 $0.000 $0.090
------ ------- ------
$0.328 $1.232 $1.560
====== ======= ======
</TABLE>
<PAGE> 3
TO OUR SHAREHOLDERS
The Federal Reserve Board appears to be trying to slow down the
American economy. For the year ended March 31, 2000 the economy was
measured as having real growth of 5% over the preceding twelve months.
Historically this is strong growth and some believe likely to lead to
inflation. To prevent this, short-term interest rates have been raised
in an effort to slow the economy, reduce inflationary pressures and,
perhaps, reduce "irrational exuberance" in the equity markets.
There are signs that these actions are being felt as the equity
markets fell in April, retail sales (less autos) were flat, and the
producer price index (a measure of inflation) fell more than expected.
If interest rates continue rising, the equity markets may fall further
and economic activity slow.
At its April 2000 Annual meeting I was elected to the executive
committee of the Closed-End Fund Association. This organization was
created by a group of closed-end funds (CEFs) with the purpose of
improving the visibility of CEFs as well as improving the availability
of information such as daily net asset values. To this end, the
association has created an extensive website at www.cefa.com as well as
a small book on Closed-End Funds. As a member of the association the
Fund has received several free copies of this book that are available
to shareholders. The Association is also working on projects including
corporate governance and independent analysis of CEFs.
In the June 2000 Mutual Funds Magazine, Ellsworth was included in
the list of 5 star (top rated) convertible funds. The magazine ranked
all convertible funds on a risk adjusted basis and the top 20% are
given 5 stars. In its most recent edition of its Principia Pro for
Closed-End Funds, Morningstar* continued to rate Ellsworth four stars
(above average). Shareholders who wish a copy of Morningstar's March
31, 2000 report or the most recent report issued by Standard and Poor's
should contact us.
At its April meeting the Board of Directors declared a dividend
of ten cents per share. This is an increase of one cent per share from
the previous dividend. It will be payable on May 30, 2000 to
shareholders of record May 16, 2000.
/s/ Thomas H. Dinsmore
Chairman of the Board
May 15, 2000
* Morningstar is an analytical and statistical reporting service that
reports on and rates most mutual funds.
See Important Factors Regarding Forward-Looking Statements on page 12
of this report.
<PAGE> 4
<TABLE>
<CAPTION>
LARGEST INVESTMENT HOLDINGS by underlying common stock
Principal
Amount Value % Total
or Shares (Note 1) Net Assets
--------- ----------- ----------
<S> <C> <C>
3,000,000 Cable and Wireless Communications PLC.................................$ 4,271,250 3.8%
An integrated telecommunications company operating
throughout the United Kingdom, as well as a provider of television
and Internet services.
(exchangeable from Bell Atlantic Financial 4 1/4% due 2005)
2,000,000 Time Warner, Inc...................................................... 2,617,500 2.4
A media company with operations in entertainment, cable
networks and publishing.
(exchangeable from Merrill Lynch 0.25% due 2004)
2,000,000 Costco Wholesale Corp................................................. 2,436,250 2.2
Operates wholesale membership warehouses in the United
States, Taiwan, Canada, Korea, Japan, and the United
Kingdom.
2,000,000 The Walt Disney Corp.................................................. 2,142,500 1.9
A media company with operations in entertainment, theme
parks and resorts, and consumer products.
(exchangeable from Deutsche Bank Financial 1 1/2% due 2007)
1,750,000 Nextel Communications, Inc............................................ 2,091,250 1.9
A major provider of wireless communications.
45,000 Devon Energy Corp.................................................... 2,047,500 1.8
An independent energy company involved in oil and gas
property acquisition, exploration, and production.
1,200,000 STMicroelectronics, N.V............................................... 2,010,750 1.8
Designs, develops, manufactures, and markets semiconductor
integrated circuits and discrete devices.
2,150,000 American Express Company.............................................. 1,996,813 1.8
Through its subsidiaries, provides travel-related, financial
advisory, and international banking services around the world.
(exchangeable from Exch. Certificate 0.625% due 2005)
1,500,000 General Electric Corp................................................. 1,993,750 1.8
Develops and manufactures products for the utilization of
electricity. GE also offers financial services through GE Capital
Services, Inc. and owns the National Broadcasting Company.
(exchangeable from CS First Boston 2 1/4% due 2003 and
Exch. Certificate 1 1/4% due 2004)
29,000 UnitedGlobalCom, Inc................................................. 1,932,125 1.7
A global broadband communications provider of video, voice ----------- ---------
and data services.
Total $23,539,688 21.1%
=========== =========
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
MAJOR INDUSTRY EXPOSURE
% Total
Net Assets
----------
<S> <C>
Technology.............................................................. 17.86%
Telecommunications...................................................... 13.76
Entertainment........................................................... 13.62
Energy.................................................................. 12.02
Health Care & Drugs..................................................... 6.64
Retail.................................................................. 6.26
Cable................................................................... 5.00
Banking................................................................. 4.41
Capital Goods........................................................... 4.10
Financial & Insurance................................................... 3.49
---------
Total................................................................... 87.16%
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MAJOR PORTFOLIO CHANGES by underlying common stock
Three months ended March 31, 2000
Principal
Amount
or Shares
---------
ADDITIONS
<S> <C>
American Express Company (exchangeable from Exch. Certificate Corp.)... 2,150,000
Cisco Systems, Inc. (exchangeable from CS First Boston, Inc.).......... 1,000,000
EMC Corp. (exchangeable from The Goldman Sachs Group, Inc.)............ 1,000,000
Human Genome Sciences, Inc............................................. 1,250,000
Juniper Networks, Inc.................................................. 1,000,000
Level 3 Communications, Inc............................................ 1,000,000
Merrill Lynch & Co., Inc. technology note (LU, NT & TXN)............... 1,500,000
Nextel Communications, Inc............................................. 1,750,000
Pinnacle Holdings, Inc................................................. 1,500,000
Sprint Corp. PCS (exchangeable from Liberty Media Group)............... 1,500,000
The Walt Disney Corp. (exchangeable from Deutsche Bank Financial, Inc.) 2,000,000
Young & Rubicam, Inc................................................... 1,000,000
REDUCTIONS
American Express Credit Corp........................................... 750,000
AT&T Corp. (exchangeable from UBS AG).................................. 1,250,000
BankAmerica Corp. (exchangeable from Jefferson-Pilot Corp.)............ 20,600
Bea Systems, Inc....................................................... 500,000
Human Genome Sciences, Inc............................................. 1,875,000
Level 3 Communications, Inc............................................ 2,000,000
Lucent Technologies, Inc. (exchangeable from NatWest Markets).......... 750,000
Nextel Communications, Inc............................................. 1,000,000
Siebel Systems, Inc.................................................... 500,000
Telecom Corp. of New Zealand (exch. from Bell Atlantic Financial....... 1,000,000
Vitesse Semiconductor Corp............................................. 1,000,000
</TABLE>
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<PAGE> 6
PORTFOLIO OF INVESTMENTS March 31, 2000
<TABLE>
<CAPTION>
Principal
Amount
or Shares Value
---------- ------------
<S> <C> <C>
ADVERTISING - 2.2%
$1,500,000 Interpublic Group Cos., Inc. 1.87% 2006 cv. sub. deb. 144A (Baa1) $ 1,509,375
1,000,000 Young & Rubicam, Inc. 3% 2005 cv. sub. notes 144A (NR) 937,500
------------
2,446,875
------------
AEROSPACE - 0.9%
825,000 Simula, Inc. 8% 2004 sr. cv. sub. notes (NR) 478,500
700,000 SPACEHAB, Inc. 8% 2007 cv. sub. notes 144A (NR) 518,000
------------
996,500
------------
BANKING - 4.4%
331,000 BankAtlantic Bancorp 5 5/8% 2007 cv. sub. deb. (NR) 211,013
50,000 shs CNB Capital Trust I 6% SPuRS (A1)
(exch. for CNB Bancshares, Inc. common stock) 1,625,000
40,000 shs National Australia Bank Ltd. 7 7/8% exch. capital units (A1) 947,500
25,000 shs Sovereign Capital Trust II 7 1/2% PIERS (B1)
(exch. for Sovereign Bancorp, Inc. common stock) 1,218,750
30,000 shs WBK Trust 10% STRYPES * (NR)
(exch. for Westpac Banking Corp., Ltd. common stock) 907,500
------------
4,909,763
------------
CABLE - 5.0%
1,000,000 Bell Atlantic Financial Services, Inc. 4 1/4% 2005 cv. sub. deb. 144A (A1)
(exch. for cash equiv. of Cable & Wireless Communications PLC common stock) 1,423,750
2,000,000 Bell Atlantic Financial Services, Inc. 4 1/4% 2005 euro. cv. sub. deb. (A1)
(exch. for cash equiv. of Cable & Wireless Communications PLC common stock) 2,847,500
20,000 shs Cox Communications, Inc. 7% FELINE PRIDES * (Baa2) 1,298,750
------------
5,570,000
------------
CAPITAL GOODS - 4.1%
1,050,000 Advanced Energy Industries, Inc. 5 1/4% 2006 cv. sub. notes (NR) 1,262,625
1,000,000 CS First Boston, Inc. 2 1/4 % 2003 sr. medium-term exch. notes 144A (A1)
(exch. for General Electric Corp. common stock) 1,455,000
500,000 Exchangeable Certificate Corp. 1 1/4% 2004 sr. medium-term exch. notes 144A
(AAA)(exch. for General Electric Corp. common stock) 538,750
15,000 shs Hanover Compressor Capital Trust 7 1/4% cv. pfd. TIDES 144A (B1)
(conv. into Hanover Compressor Company common stock) 1,305,000
------------
4,561,375
------------
DATA-PROCESSING SERVICES - 3.1%
2,150,000 Exchangeable Certificate Corp. 0.625% 2005 medium-term exch. notes 144A
(AAA)(exch. for American Express Company common stock) 1,996,813
1,750,000 National Data Corp. 5% 2003 cv. sub. notes (Ba3) 1,474,375
------------
3,471,188
------------
ELECTRIC UTILITIES - 0.7%
20,000 shs Texas Utilities Co. 9 1/4% FELINE PRIDES * (Baa3) 745,000
------------
ENERGY - 12.0%
30,000 shs AES Trust III trust cv. pfd. securities (Ba3)
(conv. into AES Corp. common stock) 1,914,375
40,800 shs Apache Corp. $2.015 dep. shs. repstg. series C ACES pfd. * (Baa2) 1,838,550
59,250 shs The Coastal Corp. 6 5/8% FELINE PRIDES * (Baa2) 1,618,266
1,000,000 Devon Energy Corp. 4.95% 2008 cv. sub. deb. (Baa2)
(conv. into Chevron Corp. common stock) 1,002,500
1,450,000 Diamond Offshore Drilling, Inc. 3 3/4% 2007 cv. sub. notes (Baa1) 1,649,375
70,000 Enron Corp. 7% 2002 exch. notes * (Baa1)
(conv. into EOG Resources, Inc. common stock) 1,474,375
750,000 Kerr-McGee Corp. 5 1/4% 2010 cv. sub. deb. (Baa2) 854,063
45,000 Kerr-McGee Corp. 5 1/2% 2004 DECS * (Baa1)
(exch. for Devon Energy Corp. common stock) 2,047,500
1,000,000 Swiss Life Financial Ltd. 2% 2005 GEMMS 144A (NR)
(exch. for Royal Dutch Petroleum common stock) 983,750
------------
13,382,754
------------
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS March 31, 2000 (continued)
Principal
Amount
or Shares Value
---------- ------------
<S> <C> <C>
ENTERTAINMENT - 13.6%
$2,750,000 America Online, Inc. 0% 2019 cv. sub. deb. (Ba3) $ 1,512,500
2,000,000 Clear Channel Communications, Inc. 1 1/2% 2002 sr. cv. notes (Baa3) 1,875,000
2,000,000 Deutsche Bank Financial, Inc. 1% 2007 sr. medium-term exch. notes (Aa3)
(exch. for cash value of The Walt Disney Corp. common stock) 2,142,500
1,000,000 EchoStar Communications Corp. 4 7/8% 2007 cv. sub. notes 144A (NR) 1,833,750
1,000,000 Imax Corp. 5 3/4% 2003 cv. sub. notes 144A (B1) 1,121,875
2,000,000 Merrill Lynch & Co., Inc. 0.25% 2006 series B medium-term notes (Aa3)
(exch. for Time Warner, Inc. common stock) 2,617,500
1,000,000 NTL, Inc. 5 3/4% 2009 cv. sub. notes 144A (Caa1) 1,025,000
20,000 The Seagram Co. Ltd. 7 1/2% 2002 adj. cv.-rate equity security units * (Ba2) 1,100,000
29,000 shs UnitedGlobalCom, Inc. dep. shs. repstg. 7% series D sr. cum. cv. pfd. (NR) 1,932,125
------------
15,160,250
------------
FINANCIAL & INSURANCE - 3.5%
13,000 shs American General Delaware, L.L.C. 6% cv. A MIPS (A2) 900,250
1,000,000 American International Group 2 1/4% 2004 cv. notes (Aaa) 1,565,000
625,000 Penn Treaty American Corp. 6 1/4% 2003 cv. sub. notes (BB+) 467,969
575,000 Penn Treaty American Corp. 6 1/4% 2003 cv. sub. notes 144A (BB+) 430,531
10,730 Southwest Securities Group, Inc. 5% 2004 DARTS * (NR)
(exch. for Knight/Trimark Group, Inc. Class A common stock) 520,405
------------
3,884,155
------------
HEALTH CARE & DRUGS - 6.6%
250,000 Alkermes, Inc. 3 3/4% 2007 cv. sub. notes 144A (NR) 206,875
2,000,000 The Bear Stearns Cos., Inc. 1% 2006 medium-term notes (A2)
(conv. into an index comprised of Merck & Co., Inc. and Pfizer, Inc.
common stocks) 1,586,000
250,000 CV Therapeutics 4 3/4% 2007 cv. sub. notes 144A (NR) 222,813
500,000 Cor Therapeutics 5% 2007 cv. sub. notes 144A (NR) 553,125
2,250,000 Elan Finance Corp. 0% 2018 LYON 144A (Baa3)
(exch. for ADR's representing Elan Corp., PLC common stock) 1,625,625
375,000 Human Genome Sciences, Inc. 5% 2007 cv. sub. notes 144A (NR) 334,688
1,250,000 Roche Holdings, Inc. 0% 2010 LYON 144A (NR) 711,719
625,000 Roche Holdings, Inc. 0% 2015 LYON 144A (NR)
(exch. for Genentech, Inc. common stock) 514,063
1,000,000 Sepracor, Inc. 7% 2005 cv. notes 144A (CCC+) 1,310,000
250,000 Sepracor, Inc. 7% 2005 cv. notes (CCC+) 327,500
------------
7,392,408
------------
PAPER & PAPER PRODUCTS - 1.1%
30,000 Georgia-Pacific Corp. 7 1/2% 2002 PEPS * (Baa2) 1,258,125
------------
RETAIL - 6.3%
1,000,000 Costco Wholesale Corp. 0% 2017 cv. sub. notes 144A (A3) 1,218,125
1,000,000 Costco Wholesale Corp. 0% 2017 cv. sub. notes (A3) 1,218,125
15,200 shs CVS Auto. Common Exch. Security Trust $4.23 TRACES * (NR)
(exch. for CVS Corp. common stock) 1,035,500
32,500 shs Dollar General Trust 8 1/2% STRYPES * (NR)
(conv. into Dollar General Corp. common stock) 1,218,750
750,000 E-Toys 61/4% 2004 cv. sub. notes 144A (CCC) 300,000
12,300 shs Estee Lauder Trust 6 1/4% TRACES II * (NR)
(conv. into Estee Lauder Companies, Inc. common stock) 1,144,669
1,250,000 Office Depot, Inc. 0% 2007 LYON (Baa2) 840,625
------------
6,975,794
------------
STAFFING SERVICES - 1.1%
1,500,000 Interim Services, Inc. 4 1/2% 2005 cv. sub. deb. (Ba3) 1,344,375
------------
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS March 31, 2000 (continued)
Principal
Amount
or Shares Value
---------- ------------
<S> <C> <C>
TECHNOLOGY - 17.9%
$250,000 Burr-Brown Corp. 4 1/4% 2007 cv. sub. notes. 144A (NR) $ 276,250
500,000 Citrix Systems, Inc. 0% 2019 cv. sub. deb. 144A (NR) 474,063
1,000,000 CS First Boston, Inc. 2% 2010 medium-term exch. notes 144A (A1)
(exch. for Cisco Systems, Inc. common stock) 1,325,000
1,500,000 CS First Boston, Inc. 1% 2006 medium-term exch. notes (A1)
(exch. for Microsoft Corp. common stock) 1,582,500
700,000 CS First Boston, Inc. 1% 2010 medium-term exch. notes (A1)
(exch. for Sun Microsystems, Inc. common stock) 738,500
1,000,000 Exchangeable Certificate Corp. 0.25% 2005 medium-term exch. notes 144A
(AAA)(exch. for Intel Corp. common stock) 926,250
750,000 Exodus Communications, Inc. 4 3/4% 2008 cv. sub. notes 144A (NR) 1,564,688
1,000,000 The Goldman Sachs Group, Inc. 0% 2003 medium-term notes, series B (A1)
(linked to the GSTI Internet Index) 1,003,710
1,000,000 The Goldman Sachs Group, Inc. 0.25% 2007 medium-term notes (A1)
(exch. for EMC common stock) 1,030,230
1,000,000 Hewlett-Packard Co. 0% 2017 LYON 144A (Aa3) 755,625
500,000 Internet Capital Group, Inc. 51/2% 2004 cv. sub. notes 144A (NR) 447,500
1,000,000 Juniper Networks, Inc. 4 3/4% 2007 cv. sub. notes (NR) 1,000,625
1,500,000 Merrill Lynch & Co., Inc. 0.50% 2005 notes (Aa3)
(exch. for specific technology common stocks +) 1,685,625
500,000 Rational Software 5% 2007 cv. sub. notes 144A (NR) 618,750
750,000 Redback Networks, Inc. 5% 2007 cv. sub. notes 144A (NR) 725,625
1,000,000 Sanmina Corp. 4 1/4% 2004 cv. sub. notes (B+) 1,635,625
500,000 Sci Systems, Inc. 3% 2007 cv. sub. notes (Ba1) 580,938
500,000 Siebel Systems, Inc. 5 1/2% 2006 cv. sub. notes. 144A (NR) 1,322,500
1,200,000 STMicroelectronics, N.V. 0% 2009 LYON (Baa1) 2,010,750
250,000 TriQuint Semiconductor, Inc. 4% 2007 cv. sub. notes 144A (NR) 187,500
------------
19,892,254
------------
TELECOMMUNICATIONS - 13.8%
750,000 American Tower Corp. 5% 2010 cv. sub. deb. 144A (NR) 840,000
1,000,000 Bell Atlantic Financial Services, Inc. 5 3/4% 2003 cv. sub. deb. 144A (A1)
(exch. for cash equiv. Telecom Corp. of New Zealand common stock) 1,017,500
800,000 CS First Boston, Inc. 1% 2008 medium-term exch. notes (A1)
(exch. for Motorola common stock) 792,000
1,000,000 Exchangeable Certificate Corp. 0.25% 2006 medium-term exch. notes 144A
(AAA)(exch. for specific telephone and cable common stocks **) 1,241,250
1,000,000 Level 3 Communications, Inc. 6% 2010 cv. sub. notes (Caa1) 1,001,250
1,500,000 Liberty Media Group 3 3/4% 2030 sr. exch. deb. 144A (Baa3)
(exch. for Sprint Corporation PCS common stock) 1,747,500
25,000 MediaOne Group, Inc. 7% 2002 PIES * (Baa3)
(exch. for ADR's representing Vodafone AirTouch PLC common stock) 1,307,813
1,750,000 Nextel Communications, Inc. 5 1/4% 2010 cv. sr. notes 144A (B1) 2,091,250
1,500,000 Pinnacle Holdings, Inc. 5 1/2% 2007 cv. sub. notes 144A (NR) 1,348,125
15,000 shs RSL Communications 7 1/2% cv. pfd. (Caa2) 915,000
700,000 Tekelec 3 1/4% 2004 cv. sub. discount notes 144A (NR) 1,500,625
1,000,000 Telefonos De Mexico, S.A. 4 1/4% cv. sr. deb. (BB+) 1,522,500
------------
15,324,813
------------
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS March 31, 2000 (continued)
Principal
Amount
or Shares Value
---------- ------------
<S> <C> <C>
U.S. TREASURY NOTES - 0.0%
$ 17,000 4 7/8% 3/31/01 ++ $ 16,756
------------
CORPORATE SHORT-TERM NOTES - 3.9%
4,000,000 American Express Credit Corp. (P1)
(6.10% maturing 4/5/00) 3,996,611
------------
Total Convertible Bonds and Notes - 77.8% 86,626,769
Total Convertible Preferred Stocks - 18.5% 20,564,985
Total Corporate Short-Term Notes - 3.6% 3,996,611
------------
Total Investments - 99.9% 111,188,365
------------
Other assets and liabilities, net - 0.1% 159,359
------------
Total Net Assets - 100.0% $111,347,730
============
</TABLE>
* See Note 1(e)
+ Ticker symbols: LU, NT & TXN
** Ticker symbols: CSCO, CMCSK, TWX, IBM, LMGa, & WCOM
++ Collateral for a letter of credit
<TABLE>
<S> <C>
ACES Automatically Convertible Equity Securities
ADR American Depositary Receipts
DARTS Derivative Adjustable Ratio Securities
DECS Debt Exchangeable for Common Stock
FELINE Family of Equity-Linked Income Securities
GEMMS Guaranteed Exchangeable Monetisation of Multiple Shares
LYON Liquid Yield Option Note
MIPS Monthly Income Preferred Securities
PEPS Premium Equity Participating Securities
PIERS Preferred Income Equity Redeemable Securities
PIES Premium Income Exchangeable Securities
PRIDES Preferred Redeemable Increased Dividend Equity Securities
SPuRS Shared Preference Redeemable Securities
STRYPES Structured Yield Product Exchangeable for Stock
TIDES Term Income Deferrable Equity Securities
TRACES Trust Automatic Common Exchange Securities
</TABLE>
Ratings in parentheses by Moody's Investors Service, Inc. or Standard & Poor's,
a division of McGraw-Hill Companies, Inc.
The cost of investments for federal income tax purposes is $97,925,905 resulting
in gross unrealized appreciation and depreciation of $17,043,712 and $3,781,254,
respectively, or net unrealized appreciation of $13,262,458 on a tax cost basis.
See accompanying notes to financial statements
<PAGE> 10
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES (unaudited)
March 31, 2000
--------------
<S> <C>
Assets:
Investments at value (cost $97,925,905) (Note 1)... $ 111,188,365
Cash............................................... 230,010
Receivable for securities sold..................... 587,604
Dividends and interest receivable.................. 511,671
Prepaid Insurance.................................. 12,237
Deposits........................................... 15,701
--------------
Total assets....................................... 112,545,588
--------------
Liabilities:
Payable for securities purchased................... 1,093,175
Accrued management fee (Note 2).................... 69,899
Accrued expenses................................... 34,784
--------------
Total liabilities..................... 1,197,858
--------------
Net Assets........................................... $ 111,347,730
==============
Net assets consist of:
Undistributed net investment income................ $ 857,470
Undistributed net realized gain from investment
transactions...................................... 11,327,013
Unrealized appreciation on investments............. 13,262,458
Capital shares (Note 3)............................ 92,866
Additional paid-in capital......................... 85,807,923
--------------
Net Assets........................................... $ 111,347,730
==============
Net asset value per share
($111,347,730 / 9,286,638 outstanding shares)....... $ 11.99
==============
</TABLE>
------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS (unaudited)
Six Months Ended March 31, 2000
<S> <C>
Investment Income (Note 1):
Interest...............................................$ 1,563,035
Dividends.............................................. 763,669
-----------
Total Income........................................ 2,326,704
-----------
Expenses (Note 2):
Management fee......................................... 366,081
Custodian.............................................. 12,288
Transfer agent......................................... 14,977
Professional fees...................................... 66,682
Directors' fees........................................ 47,250
Reports to shareholders................................ 45,791
Treasurer's office..................................... 12,500
Other.................................................. 61,156
-----------
Total Expenses...................................... 626,725
-----------
Net Investment Income.................................... 1,699,979
-----------
Realized and Unrealized Gain on Investments:
Net realized gain from investment transactions......... 11,331,65
Net increase in unrealized appreciation of investments 7,847,217
Net gain on investments................................ 19,178,87
-----------
Net Increase in Net Assets Resulting from Operations...$ 20,878,84
===========
</TABLE>
See accompanying notes to financial statements
<PAGE> 11
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended Year Ended
March 31, 2000* September 30, 1999
---------------- ------------------
<S> <C> <C>
Increase in net assets from operations:
Net investment income............................................. $ 1,699,979 $ 2,801,861
Net realized gain from investment transactions.................... 11,331,653 10,525,513
Net change in unrealized appreciation of investments.............. 7,847,217 1,575,266
---------------- ------------------
Net change in net assets resulting from operations............... 20,878,849 14,902,640
---------------- ------------------
Dividends to shareholders from:
Net investment income............................................. (1,332,707) (2,684,269)
Net realized gain on investments.................................. (10,534,568) (10,656,426)
---------------- ------------------
Total dividends.................................................. (11,867,275) (13,340,695)
---------------- ------------------
Capital share transactions (Note 3)
Value of shares issued on reinvestment of distributions........... 7,092,766 7,039,766
Cost of shares purchased.......................................... (796,631) 0
---------------- ------------------
Change in net assets resulting from capital share transactions... 6,296,135 7,039,766
---------------- ------------------
Increase in net assets.............................................. 15,307,709 8,601,711
---------------- ------------------
Net assets at beginning of period................................... 96,040,021 87,438,310
---------------- ------------------
Net assets at end of period (including undistributed net
investment income of $857,470 and $490,195, respectively).......... $111,347,730 $ 96,040,021
================ ==================
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Selected data for a share of common stock outstanding:
Six Months
Ended YEARS ENDED September 30,
Per Share Operating Performance: March 31, 2000 1999 1998 1997 1996 1995
-------------- ------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $11.23 $11.18 $13.33 $11.80 $10.76 $ 9.72
Net investment income...................... 0.18 0.33 0.35 0.40 0.43 0.48
Net realized and unrealized gain (loss).... 1.96 1.40 (0.65) 2.59 1.37 1.30
-------------- ------ ------- ------- ------- -------
Total from investment operations......... 2.14 1.73 (0.30) 2.99 1.80 1.78
Less Distributions:
Dividends from net investment income....... (0.15) (0.32) (0.37) (0.40) (0.47) (0.51)
Distributions from realized gains.......... (1.23) (1.36) (1.48) (1.06) (0.29) (0.23)
-------------- ------ ------- ------- ------- -------
Total distributions...................... (1.38) (1.68) (1.85) (1.46) (0.76) (0.74)
-------------- ------ ------- ------- ------- -------
Net asset value, end of period............. $11.99 $11.23 $11.18 $13.33 $11.80 $10.76
============== ====== ======= ======= ======= =======
Market value, end of period................ $ 8.81 $ 9.38 $10.00 $11.25 $ 9.88 $ 9.13
Net assets, end of Total Investment Return: 111,348 96,040 87,438 94,822 78,395 69,769
Based on net asset value**............. 20.47% 16.42% (2.39%) 27.77% 17.43% 19.50%
Based on market value+................. 9.26% 10.39% 5.21% 30.93% 17.13% 18.95%
Ratios/Supplemental Data:
Ratio of expenses to average net assets.... 1.3%++ 1.1% 1.1% 1.20% 1.20% 1.20%
Ratio of net investment income to
average net assets....................... 3.4%++ 3.0% 3.0% 3.40% 3.90% 5.00%
Portfolio turnover rate.................... 65% 67% 59% 71% 70% 44%
</TABLE>
* Unaudited
** Assumes valuation of the Fund's shares, and reinvestment of dividends,
at net asset values.
+ Assumes valuation of the Fund's shares at market price and reinvestment
of dividends at actual reinvestment price.
++ Annualized
See accompanying notes to financial statements
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies
Ellsworth Convertible Growth and Income Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a diversified, closed-end
management investment company. The preparation of financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements, and the reported
amounts of revenue and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of
its financial statements:
(a) Security Valuation
Investments in securities traded on a national securities exchange are valued
at market using the last reported sales price. Securities traded in the
over-the-counter market and listed securities for which no sales were
reported are valued at the mean between closing reported bid and asked
prices. Where no closing prices are available, value is determined by
management, with the approval of the Board of Directors.
(b) Securities Transactions and Related Investment Income
Security transactions are accounted for on the trade date (date the order to
buy or sell is executed) with gain or loss on the sale of securities being
determined based upon identified cost. Dividend income is recorded on the ex-
dividend date and interest income is recorded on the accrual basis. Interest
of $9,995 was earned on cash balances held by the custodian of the Fund's
assets during the six months ended March 31, 2000.
(c) Federal Income Taxes
It is the policy of the Fund to distribute substantially all of its taxable
income within the prescribed time and to otherwise comply with the provisions
of the Internal Revenue Code applicable to regulated investment companies.
Therefore, no provision for federal income or excise taxes is believed
necessary.
(d) Dividends and Distributions to Shareholders
The liability for dividends and distributions payable is recorded on the ex-
dividend date.
(e) Market Risk
It is the Fund's policy to invest the majority of its assets in convertible
securities. Although convertible securities do derive part of their value
from that of the securities into which they are convertible, they are not
considered derivative financial instruments. However, certain of the Fund's
investments include features which render them more sensitive to price
changes in their underlying securities. Thus they expose the Fund to greater
downside risk than traditional convertible securities, but still less than
that of the underlying common stock. The market value of those securities was
$17,515,203 at March 31, 2000, representing 15.7% of net assets.
2. Management Fee and Other Transactions with Affiliates
The management fee is paid to the investment adviser, Davis-Dinsmore
Management Company (the "Adviser"). The contract provides for payment of a
monthly advisory fee, computed at an annual rate of 1/2 of 1% of the first
$100,000,000 and 3/4 of 1% of the excess over $100,000,000 of the Fund's net
asset value in such month. The annual fee is subject to reduction to the
extent that the ordinary expenses of the Fund (excluding taxes and interest)
exceed 1.5% of the first $100,000,000 and 1% of the excess over $100,000,000
of the average of the monthly net asset values of the Fund for the year.
The Adviser furnishes investment advice, office equipment and facilities, and
pays the salaries of all executive officers of the Fund, except that the
costs associated with personnel and certain non-personnel expenses of the
office of the Treasurer up to a maximum of $25,000 a year are reimbursed by
the Fund. Such reimbursements amounted to $12,500 for the six months ended
March 31, 2000. The officers of the Fund are also directors, officers or
employees of the Adviser, and are compensated by the Adviser.
The Fund has adopted a Director deferred compensation arrangement, which
allows the Directors to defer the receipt of all or a portion of Director
Fees payable on or after October 31, 1998. The amount of these fees will
remain an asset of the Fund. The Fund will be obligated to pay these fees,
with interest, to the Directors who have elected to defer receipt of their
fees on a future date or dates specified by the Directors, or as determined
under the terms of the arrangement.
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS (continued)
3. Portfolio Activity
At March 31, 2000 there were 9,286,638, shares of $.01 par value common stock
outstanding (20,000,000 shares authorized). During the six months ended
March 31, 2000, 828,352 shares were issued in connection with reinvestment of
dividends from net investment income and capital gains, resulting in an
increase in paid-in capital of $7,092,766. Also, 92,500 capital shares were
purchased for $796,631. The amount paid was 22% less than the net asset value
of the shares.
Purchases and sales of investments, exclusive of corporate short-term notes,
aggregated $64,156,398 and $65,473,981, respectively, for the six months
ended March 31, 2000.
A distribution of $0.10 per share from net investment income was declared on
April 19, 2000, payable May 30, 2000 to shareholders of record at the close
of business May 16, 2000.
<PAGE> 14
MISCELLANEOUS NOTES
Results of the 2000 Annual Shareholders Meeting
The results of the shareholder vote at the Annual Meeting of Shareholders
held on January 21, 2000, were:
<TABLE>
<CAPTION>
1. All directors nominated by management were elected for terms expiring in
2003.
Shares Voted for Shares withheld
---------------- ---------------
<S> <C> <C>
William A. Benton 4,872,733 304,150
George R. Lieberman 4,830,448 346,435
Jane D. O'Keeffe 4,872,721 304,162
</TABLE>
2. The selection of PricewaterhouseCoopers LLP as independent accountants was
ratified with 4,856,021 shares voted for, 179,245 shares voted against
and 141,617 shares abstaining.
(a) The proposal to replace two fundamental policies which restrict the
making of loans, with one policy which prohibits personal loans or loans to
persons who control the Company or who are under common control with the
Company passed, as 3,943,100 shares voted for, 341,151 shares voted against,
214,290 shares abstaining and 678,342 shares were broker non-votes.
(b) The proposal to delete the fundamental policy that limits the Company's
investment in warrants to under 5% of its total assets and under 2% of its
assets in unlisted warrants passed, as 3,896,340 shares voted for, 389,090
shares voted against, 213,111 abstaining and 678,342 shares were broker non-
votes.
(c) The proposal to delete the clause that limits investment in securities
issued by one issuer to under 10% of its outstanding voting securities, and
retain the balance of the fundamental policy which limits the purchase of
securities of companies which have less than three years continuous
operations to 5% of total assets passed, as 3,918,653 shares voted for,
358,747 shares voted against, 221,141 abstaining and 678,342 shares were
broker non-votes.
(d) The proposal to replace the fundamental policy that prohibits the
purchase or sale of real estate and interests in real estate limited
partnerships and securities issued by real estate investment trusts with one
which, while prohibiting direct investment in real estate, allows investment
in real estate-related securities passed, as 3,906,381 shares voted for,
368,634 shares voted against, 223,526 abstaining and 678,342 shares were
broker non-votes.
(e) The proposal to change the fundamental policy that prohibits investment
in oil, gas or other mineral exploration or development programs to a non-
fundamental policy that, while prohibiting direct investment in such
programs, allows the Company to invest in issuers that engage in transactions
involving such exploration or development programs passed, as 3,927,493
shares voted for, 363,190 shares voted against, 207,858 shares abstaining and
678,342 shares were broker non-votes.
The proposal to amend the Articles of Incorporation that would give
shareholders the right to tender their shares during the current fiscal
year did not pass, as 1,509,045 shares voted for, 2,627,874 shares voted
against, 361,622 shares abstaining and 678,342 shares were broker non-votes.
-----------------------------------------------------------------------------
IMPORTANT FACTORS REGARDING FORWARD-LOOKING STATEMENTS
The letter to Shareholders contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Statements
which reflect the intent, belief or expectations of the Company, its
management and the Adviser regarding the anticipated effect of events,
circumstances and trends should be considered forward-looking statements.
These forward-looking statements are not guarantees of future performance and
there are a number of meaningful factors which could cause the Company's
results to vary materially from those indicated by any such statements.
Factors which could cause actual results to differ from expectations include,
among others, a decline in economic activity, changes in individuals' savings
rates, a decline in productivity or new products, changes in the Federal
Reserve Board's monetary policy, an increase in interest rates, inflation or
taxes, changes to foreign and domestic markets in general or changes to the
market for convertible securities.
<PAGE> 15
BOARD OF DIRECTORS
GORDON F. AHALT Petroleum Consultant
WILLIAM A. BENTON Retired Stock Exchange Specialist
ELIZABETH C. BOGAN Senior Lecturer in Economics at Princeton
University
THOMAS H. DINSMORE, C.F.A. Chairman of the Board of Ellsworth
DONALD M. HALSTED, JR. Investor
GEORGE R. LIEBERMAN Retired Advertising Executive
DUNCAN O. MCKEE Retired Attorney
JANE D. O'KEEFFE President of Ellsworth
NICOLAS W. PLATT Public Relations Executive
OFFICERS
THOMAS H. DINSMORE Chairman of the Board
JANE D. O'KEEFFE President
SIGMUND LEVINE Senior Vice President and Secretary
H. TUCKER LAKE Vice President, Trading
GERMAINE M. ORTIZ Vice President
GARY I. LEVINE Treasurer and Assistant Secretary
MERCEDES A. PIERRE Assistant Treasurer
------------------------------------------------------------------------
Investment Advisor
Davis-Dinsmore Management Company
65 Madison Avenue, Morristown, NJ 07960-7308
(973) 631-1177
http://www.bcvecf.com
email: [email protected]
Shareholder Services and Transfer Agent
The Bank of New York
Shareholder Relations Department-11E
P.O Box 11258, Church Street Station
New York, NY 10286-1258
(800) 432-8224
http://stkxfer.bankofny.com
Common Stock Listing
American Stock Exchange Symbol: ECF
-------------------------------------------------------------------------
Pursuant to Section 23 of the Investment Company Act of 1940, notice is
hereby given that the Fund may in the future purchase shares of Ellsworth
Convertible Growth and Income Fund, Inc. Common Stock from time to time,
at such times, and in such amounts, as may be deemed advantageous to the
Fund. Nothing herein shall be considered a commitment to purchase such
shares.
-------------------------------------------------------------------------
The Company is a member of the Closed-End Fund Association (CEFA)
website: www.cefa.com
<PAGE> 16
ELLSWORTH CONVERTIBLE GROWTH AND INCOME FUND, INC.
65 MADISON AVENUE
MORRISTOWN, NEW JERSEY 07960
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