Bull & Bear
U.S. And Overseas Fund
Invests worldwide for the highest possible total return.
Annual Report
December 31, 1996
U.S. And Overseas Fund
11 Hanover Square, New York, NY 10005
1-800-847-4200
1-212-363-1100
http://www.bull-and-bear.com
<PAGE>
BULL & BEAR U.S. AND OVERSEAS FUND
February 21, 1997
Fellow Shareowners:
World stock markets in 1996 were characterized by an extreme divergence between
the performance of small and large capitalization issues domestically, and
between emerging and developed markets overseas. In the United States, while the
Russell 2000 Small Company Stock Index closed the year at a lower level than at
its May high, larger capitalization indexes advanced sharply in the second half,
propelled primarily by a very small number of large stocks. A similar trend
occurred overseas, with many large developed markets significantly outperforming
smaller emerging markets. With the Fund's strategy during the year of
maintaining a significant investment in smaller U.S. companies and exposure to
emerging markets abroad, several of which lagged the results of world markets in
general, performance was negatively impacted. Thus, Bull & Bear U.S. and
Overseas Fund's total return for 1996 was +5.34% versus +14.00 for the Morgan
Stanley Capital International World Index, +10.57% for the Dow Jones World Index
(+3.66% for this Index excluding the U.S.), and +16.94% for the Morningstar
World Stock Fund Average. The Fund's results in 1996 were disappointing,
particularly following its impressive total return gain of +25.11% for 1995.
U.S. stock markets were bolstered in early 1996 by generally positive corporate
earnings reports, a high level of investor purchases of stock mutual funds, low
inflation, and relatively low and stable interest rates. With prospects in the
U.S. for more of the same, and for economic recoveries in Europe, Japan and
Latin America, stock markets around the world moved higher. Particular strength
occurred in emerging markets while more moderate gains were achieved in
established markets.
As concern developed in the second quarter over maintaining non-inflationary
U.S. growth, foreign securities markets in general began to outperform U.S.
markets, with dramatic moves in a number of Eastern European, Middle Eastern and
Pacific Rim countries. Stock markets in continental Europe and several
Scandinavian countries also began to improve relative to the U.S. market, based
on what was considered more sustainable economic progress and by a weakening
dollar late in the quarter. Japanese equities surged late in the quarter, also
reflecting dollar weakness and hopes for a stronger Japanese economy. However,
other Pacific Rim markets tied to the U.S. dollar languished as the inflation
outlook and potentially restrictive fiscal measures became a concern. Political
developments in Argentina and Brazil began to have a negative impact on those
markets, whereas earlier gains had been significant.
In early July the U.S. government reported another strong employment gain
together with a significant increase in monthly wages. This news sent U.S. bond
and equity markets down sharply. Domestic markets reflected fears that wage
pressure would lead to immediate monetary tightening by the Federal Reserve,
which would make common stocks relatively unattractive. Concern arose also that
higher interest rates and subsequently lower growth would negatively affect
interest rate policies and growth around the world. U.S. market weakness was
followed closely by weakness in foreign markets. Negative investor sentiment
regarding inflation and interest rates dramatically reversed course as
subsequent economic reports pointed to a sharp slowdown in third quarter U.S.
growth. Investor sentiment improved globally as well, with most foreign markets
recording strong performances. Markets around the world again surged in November
and December following satisfactory U.S. election results and prospects for
moderate growth, low inflation and favorable interest rates spread globally.
Particularly strong performances occurred in most Scandinavian and Western
European markets and Canadian stocks advanced as well.
2
<PAGE>
Pacific Rim markets, however, were generally disappointing except for Hong Kong,
with notable declines occurring in Thailand, South Korea, and Japan. Latin
markets were disappointing as well, with global investment dominated by the same
liquidity and perceived safety considerations impacting the U.S. market.
As we begin 1997, the U.S. stock market has again set new all-time highs.
Inflation statistics remain favorable and the outlook for moderate growth
remains unchanged. On February 20, 1997, the investment decisions for the Fund
were assumed by the Investment Policy Committee of Bull & Bear Advisers, Inc.,
the Fund's Investment Manager. The Committee's outlook for the remainder of 1997
is optimistic. Corporate earnings growth and flows of new cash into the equity
markets globally continue to provide broad support for stock prices. In view of
market concerns, however, investors appear to be following a more selective
approach to investing, placing a greater emphasis on superior earnings quality
and consistency. Accordingly, the Fund's present strategy is to reallocate the
Fund's investments to the stocks of companies perceived to have these
advantages, particularly high growth areas of information technology,
professional and business services, telecommunications, some cyclicals such as
energy, and certain defensive sectors. With this domestic background, plus
improving situations in a number of developed and emerging countries around the
world, we believe substantial opportunities continue to exist for strong gains
in 1997.
As noted in prior Reports, with respect to achieving your long range financial
goals, we continue to favor building your account on a regular basis, which can
be done safely, automatically and conveniently through the Bull & Bear Bank
Transfer Plan, Bull & Bear Salary Investing Plan and Bull & Bear Government
Direct Deposit Plan. For information on any of these free services, simply give
us a call and we will help you get started.
If you have questions or would like information on any of the Bull & Bear Funds,
the Bull & Bear No-Fee IRA(R) or opening a discount brokerage account at Bull &
Bear Securities, where you can earn American Airlines(R) AAdvantage(R) miles on
every trade, we would be very pleased to hear from you. Just call
1-800-847-4200, and an Investor Service Representative will be glad to assist
you, as always, without any obligation on your part.
Sincerely,
Robert D. Anderson Thomas B. Winmill
Vice Chairman Co-President
Chart Follows:
U.S. and Overseas Fund
Results of an initial investment of $10,000 with subsequent investments of $100
a month from inception, 10/29/87, through 12/31/96 with all distributions
reinvested. Investments for the period total $21,000
Plot Points:
$10,140, $11,748, $14,886, $14,733, $19,404, $20,083, $26,836, $26,419, $24,419
$31,887, $34,811
Ending Value $34,811
Total Return Performance Graphs
Bull & Bear U.S. and Overseas Fund ("Fund")
Morgan Stanley Capital International World Index ("MSCI")
Morningstar's World Stock Fund Average ("MSFA")
MSCI is unmanaged and fully invested in common stocks. MSFA is an equal weighted
average of 198 world equity mutual funds. The fund may invest in any type of
U.S. or foreign securitiy, including Eurodollar securities, and engage in
options, futures and forward currency transactions. The Fund's inception was
October 29, 1987. Performance Graphs begin October 31, 1987 and results in each
case reflects reininvestment of dividends and distributions.
[The following table was represented as a graph with the following plot points
in the printed material.]
Plot points:
Fund: $10,000 9,947, $10,320, $11,925, $10,898, $13,371, $13,012, $16,488,
$14,323, $17,921, $18,879
MSCI: $10,000, $10,183, $12,395, $14,526, $12,126, $14,426, $13,754, $16,936,
$17,881, $21,693, $24,729
MSFA: $10,000, 10,355, $11,850, $14,623, $13,092, $16,121, $16,202, $21,093,
$20,656, $23,985, $28,048
Average
Final Total Annual
Value Return Return
Fund...........$18,879 88.79% 7.18%
MSCI...........$24,729 147.29% 10.38%
MSFA...........$28,048 180.48% 11.91%
Source: Morgan Stanley Capital International, Morngingstar, Inc.
<PAGE>
Mutual Funds
Bull & Bear Dollar
Reserves
A high quality moneymarket fund investing in U.S. Government securities. Income
is generally free from state income and intangible personalproperty taxes. Free,
unlimited check writing with only a $250 minimum per check.
Bull & Bear Gold
Investors
Seeks long term capital appreciation in investments with the potential to
provide a hedge against inflation and preserve the purchasing power of the
dollar.
Bull & Bear
Special Equities Fund
Invests aggressively for maximum capital appreciation.
Bull & Bear
U.S. and Overseas Fund
Invests worldwide for the highest possible total return.
Call our toll-free number for a prospectus containing more complete information,
including charges and expenses. Please read it carefully before you invest.
Closed-end investment companies listed on the American Stock exchange
Bull & Bear Global Income Fund
Investing for a high level of income from a global portfolio of primarily
investment grade fixed income securities.
Bull & Bear Municipal
Investing for the highest possible income exempt from Income Fund Federal income
tax that is consistent with preservation of principal.
Bull & Bear U.S. Government Securities Fund
Investing for a high level of current income, liquidity and safety of principal.
Discount Brokerage
Services
Bull & Bear
Securities, Inc.
Receive the investment information you need and the low commissions you expect.
Plus you can earn American Airlines(R) AAdvantage(R) miles every time you trade.
And you can save an additional 10% off our already low commission rates when you
use Bull & Bear PC OnLine Investment CenterSM and/or Bull & Bear TeleQuote/
TeleTrade SM. (There is no check writing minimum for Bull & Bear Performance
Plus(R) accounts.)
Call Toll Free1-800-VIP-4200 Total Return
Performance. For the period ended December 31,
1996, Bull & Bear Dollar Reserves' 7-day
compound yield was 4.75% on a current yield of
4.64%. Past performance does not guarantee
future results. Investment return will
fluctuate, and there can be no assurance a net
asset value of $1.00 per share will be able to
be maintained.
4
<PAGE>
BULL & BEAR U.S. AND OVERSEAS FUND
SCHEDULE OF PORTFOLIO INVESTMENTS - DECEMBER 31, 1996
SHARES
MARKET VALUE
COMMON STOCKS (100.0%)
BRAZIL (2.3%)
3,000 Telecomunicacoes Brasileiras S.A. ADR 229,500
------------
CANADA (8.9%)
6,000 Newbridge Network Corp.* 169,500
4,500 Northern Telecom Ltd. 278,437
6,000 Royal Bank of Canada 210,000
18,000 Tesco Corp.* 237,695
------------
895,632
DENMARK (2.6%)
14,000 Olicom A/S* 263,375
------------
FRANCE (4.4%)
15,000 Business Objects S.A. ADR* 202,500
9,000 Coflexip S.A. ADR 236,250
------------
438,750
GERMANY (4.3%)
3,500 Daimler Benz AG ADR* 239,750
1,400 SAP A.G. Vorzug 195,314
------------
435,064
IRELAND (2.0%)
5,000 Allied Irish Banks PLC ADR 196,250
------------
ISRAEL (6.4%)
10,000 NICE-Systems Ltd.* 180,000
9,000 Tadrian Telecommunications Ltd. 201,375
10,000 Tecnomatix Technologies Ltd.* 265,000
------------
646,375
MEXICO (2.1%)
8,000 Grupo elevisa S.A. GDR* 205,000
------------
PHILIPPINES (3.1%)
600,000 International Container Terminal Services, Inc.* 313,680
------------
RUSSIA (2.1%)
9,000 Vimpel-Communications ADR* 212,625
------------
SPAIN (2.1%)
3,000 Telefonica De Espana S.A. ADR 207,750
------------
SWEDEN (3.0%)
10,000 Ericsson L.M. Telephone Co. ADR 301,875
------------
UNITED KINGDOM (2.7%)
30,000 PizzaExpress PLC 270,813
------------
UNITED STATES (54.0%)
40,000 AmeriCredit Corp.* 820,000
5,000 BMC Software, Inc.* 206,875
3,500 Computer Associates International, Inc. 174,125
46,000 Computervision Corp.* 425,500
7,500 Consolidated Stores Corp.* 240,938
7,000 EMC Corp.* 231,875
10,000 Glenayre Technologies, Inc.* 215,625
4,000 Globalstar Telecommunications Ltd.* 252,000
2,000 Intel Corp. 261,875
12,000 Interpool, Inc. 280,500
15,000 Loral Space & Communications Ltd.* 275,625
25,000 NABI Inc.* 218,750
12,000 Neoprobe Corp.* 184,500
20,000 North American Vaccine, Inc.* 485,000
4,000 Project Software & Development Inc.* 169,500
11,000 Remedy Temp Inc.* 189,750
11,000 Renters Choice, Inc.* 159,500
7,000 Sofamor Danek Group, Inc.* 213,500
15,000 Talx Corp.* 123,750
12,000 Ventritex, Inc.* 295,500
------------
5,424,688
TOTAL INVESTMENTS (COST: $8,864,171) (100.0%) $10,041,377
===========
* Indicates non-income producing security.
See accompanying notes to financial statements.
U.S. and Overseas Fund
<PAGE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
ASSETS:
<S> <C>
Investments at market value (cost: $8,864,171) (note 1) $10,041,377
======================================================= ===========
Cash 57,525
==== ======
Dividend receivable 4,638
=================== =====
Other Assets
============
842
Total assets $10,104,382
LIABILITIES:
Payables:
Demand note payable to bank (note 5) 150,468
==================================== =======
Investment securities purchased 55,906
Fund shares purchased 5,953
Accrued expenses 35,261
Accrued management and distribution fees
20,662
Total liabilities 268,250
====================== -------------
NET ASSETS: (applicable to 1,243,151 outstanding shares: 250,000,000 shares of
==============================================================================
$.01 $ 9,836,132
===== ===========
par value authorized)
=====================
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($9,836,132 _ 1,243,151) $7.91
=====
At December 31, 1996, net assets consisted of (note 6):
Paid-in capital $ 8,581,246
Accumulated net realized gain on investments 77,652
Net unrealized appreciation on investments and foreign currencies 1,177,234
------------
$ 9,836,132
</TABLE>
See accompanying notes to financial statements.
U.S. and Overseas Fund
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Year Ended December 31, 1996
INVESTMENT INCOME:
<S> <C>
Dividends (net of foreign taxes of $2,092) $ 36,872
========================================== ===========
Interest 11,208
======== -----------
48,080
EXPENSES:
Distribution (note 3) 103,179
===================== =======
Investment management (note 3) 102,565
============================== =======
Transfer agent 26,923
============== ======
Custodian 24,493
========= ======
Registration (note 3) 21,666
===================== ======
Professional (note 3) 20,222
===================== ======
Printing 13,618
======== ======
Shareholder administration (note 3) 11,899
=================================== ======
Directors 2,753
========= =====
Interest (note 5) 705
================= ===
Other 3,182
===== -----------
Total expenses 331,205
============== -----------
Net investment loss (283,125)
=================== -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN
CURRENCIES:
Net realized gain from security transactions 1,218,205
============================================ =========
Net realized loss from foreign currency transactions (825)
==================================================== =====
Unrealized depreciation of investments and foreign currencies during the period (397,162)
=============================================================================== -----------
Net realized and unrealized gain on investments and foreign currencies 820,218
====================================================================== -----------
Net increase in net assets resulting from operations $ 537,093
==================================================== ==========
</TABLE>
See accompanying notes to financial statements.
U.S. and Overseas Fund
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended December 31,
1996 1995
--------------== -----
OPERATIONS:
<S> <C> <C>
Net investment loss $ (283,125) $ (275,439)
=================== ============ ============
Net realized gain (loss) from foreign currency transactions (825) 1,302
=========================================================== ===== =====
Net realized gain from security transactions 1,218,205 823,207
============================================ ========= =======
Unrealized appreciation (depreciation) of investments and foreign
currencies during the period (397,162) 1,481,881
================================== ------------- -----------
Net change in net assets resulting from operations 537,093 2,030,951
================================================== ======= =========
DISTRIBUTIONS TO SHAREHOLDERS:
Distribution from net realized gains ($.89 and $.49 per share, (1,009,699) (574,671)
============================================================== =========== =========
respectivel )
CAPITAL SHARE TRANSACTIONS:
Increase (decrease) in net assets resulting from capital share 500,959 (102,570)
============================================================== ------------ -------------
transactions (a)
Total increase in net assets 28,353 1,353,710
============================ ====== =========
NET ASSETS:
Beginning of period 9,807,779 8,454,069
=================== ----------- -----------
End of period $9,836,132 $9,807,779
============== ========== ==========
- --------------
(a) Transactions in capital shares were as follows:
</TABLE>
<TABLE>
1996 1995
------------------------------------- ----------------------
Shares Value Shares
Value
<S> <C> <C> <C> <C>
Shares sold 321,372 $2,801,257 1,764,028 $13,899,838
=========== ======= ========== ========= ===========
Shares issued in acquisition of Fund 230,512 1,924,477 -- --
==================================== ======= ========= == ==
(note 6)
========
Shares issued in reinvestment of
================================
distributions 113,076 887,646 64,553 531,253
============= ======= ======= ====== =======
Shares redeemed (595,238) (5,112,421) (1,848,587) (14,533,661)
=============== --------- ----------- ----------- ------------
Net increase (decrease) 69,722 $ 500,959 (20,006) $ (102,570)
======================= ========= ========== ==== =============
</TABLE>
See accompanying notes to financial statements.
U.S. and Overseas Fund
<PAGE>
Notes to Financial Statements
(1) The Fund is a non-diversified series of common stock of Bull & Bear Funds I,
Inc. (the "Company"), a Maryland Corporation registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Fund's investment objective is to seek to obtain the highest possible total
return on its assets, as set forth in its prospectus, from long term growth of
capital and from income principally through a portfolio of securities of U.S.
and overseas issuers. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its financial
statements. With respect to security valuation, investments in securities traded
on a national securities exchange, unless over-the-counter quotations for such
securities are believed to more closely reflect their fair value, and securities
traded on the Nasdaq National Market System ("NMS") are valued at the last
reported sales price on the day the valuations are made. Such securities that
are not traded on a particular day, securities traded in the over-the-counter
market that are not on NMS, and foreign securities are valued at the mean
between the current bid and asked prices. Securities of foreign issuers
denominated in foreign currencies are translated into U.S. dollars at prevailing
exchange rates. Forward contracts are marked to market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When a
contract is closed, the Fund records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed. The Fund could be exposed to risk if the
counterparties are unable to meet the terms of the contracts. Debt obligations
with remaining maturities of 60 days or less are valued at cost adjusted for
amortization of premiums and accretion of discounts. Investment transactions are
accounted for on the trade date (date the order to buy or sell is executed).
Dividend income and distributions to Shareowners are recorded on the ex-dividend
date and interest income is recorded on the accrual basis. In preparing
financial statements in conformity with generally accepted accounting
principles, management makes estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements, as
well as the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
(2) The Fund intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all its taxable investment income and net capital gains, if any,
after utilization of any capital loss carryforward, to its Shareowners and
therefore no Federal income tax provision is required. Based on Federal income
tax cost of $8,877,152, gross unrealized appreciation and gross unrealized
depreciation were $1,524,564 and $360,339 at December 31, 1996. Distributions
paid to Shareowners during the years ended December 31, 1996 and 1995 differ
from net realized gains from security transactions as determined for financial
reporting purposes principally as a result of the utilization of net operating
losses to offset short-term capital gains.
(3) The Fund retains Bull & Bear Advisers, Inc. as its Investment Manager. Under
the terms of the Investment Management Agreement, the Investment Manager
receives a management fee, payable monthly, based on the average daily net
assets of the Fund at the annual rate of 1% on the first $10 million, 7/8 of 1%
from $10 million to $30 million, 3/4 of 1% from $30 million to $150 million, 5/8
of 1% from $150 million to $500 million, and 1/2 of 1% over $500 million. The
Investment Manager has agreed to waive all or part of its fee or reimburse the
Fund monthly if and to the extent the aggregate operating expenses of the Fund
exceed the most restrictive limit imposed by any state in which shares of the
Fund are qualified for sale, although currently the Fund is not subject to any
such limits. Certain officers and directors of the Fund are officers and
directors of the Investment Manager and Investor Service Center, Inc., the
Fund's Distributor. For the year ended ended December 31, 1996, the Fund paid
$9,292 to Bull & Bear Securities, Inc., an affiliate of the Investment Manager,
as commissions for brokerage services. The Fund reimbursed the Investment
Manager $6,275 for providing certain administrative and accounting services at
cost during the year ended December 31, 1996.
The Fund has adopted a plan of distribution pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "Plan"). Pursuant to the Plan, the Fund pays
the Distributor a distribution fee in an amount of three-quarters of one percent
per annum of the Fund's average daily net assets and a service fee in an amount
of one-quarter of one percent per annum of the Fund's average daily net assets.
The fee for service activities is intended to cover personal services provided
to Shareowners in the Fund and the maintenance of shareholder accounts. The fee
for distribution activities is to cover all other activities
U.S. and Overseas Fund
<PAGE>
and expenses primarily intended to result in the sale of the Fund's shares.
Investor Service Center also received $11,899 for shareholder administration
services supplied to the Fund at cost for the year ended December 31, 1996.
(4) Purchases and sales of securities other than short term notes aggregated
$26,241,390 and $29,190,197 respectively, for the year ended December 31, 1996.
U.S. and Overseas Fund
<PAGE>
(5) The Fund has a committed bank line of credit. At December 31, 1996, there
was a balance outstanding of $150,468 and the interest rate was equal to the
Federal Reserve Funds Rate plus 1.75 percentage points. For the year ended
December 31, 1996, the weighted average interest rate was 7.10% based on the
balances outstanding during the period and the weighted average amount
outstanding was $8,535.
(6) A Special Meeting of Shareowners ("Special Meeting") of Bull & Bear Quality
Growth Fund was held on April 25, 1996 pursuant to notice given to all
Shareowners of record at the close of business on February 15, 1996. At the
Special Meeting, Shareowners approved an Agreement and Plan of Reorganization
and Termination ("Plan") providing for Bull & Bear Quality Growth Fund to merge
into and become part of Bull & Bear U.S. and Overseas Fund with 50,172.06 shares
voting in favor of the Plan, 5,118.63 shares voting against the Plan, and 662.38
shares abstaining.
Accordingly, on April 26, 1996, the Fund acquired all of the assets and
liabilities of Bull & Bear Quality Growth Fund, in exchange for 230,512 shares
(valued at $2,136,916) of the Fund that were subsequently distributed to
Shareowners of Bull & Bear Quality Growth Fund. The exchange had no effect on
the net asset value per share of the Fund. The net assets of Bull & Bear Quality
Growth Fund as of April 26, 1996, were $2,136,916 consisting of paid-in-capital
of $1,924,477, net unrealized appreciation of investments of $260,306 and
accumulated net realized loss on investments of $47,867.
U.S. and Overseas Fund
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
Years Ended December 31,
PER SHARE DATA* 1996 1995 1994 1993 1992
=============== ------- =------= -------== -------- ===------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of $ 8.36 $ 7.08 $ 8.71 $ 7.59 $ 8.37
=============================== ------ ------ ------ -------- -------
period
Income from investment operations:
Net investment income (loss) (.24) (.23) (.13) (.20) .04
============================== ===== ===== ===== ===== ===
Net realized and unrealized gain .68 2.00 (1.01) 2.22 (.25)
================================== -------- ------- ======== --------- ==========
(loss) on investments
Total from investment operations .44 1.77 (1.14) 2.02 (.21)
==================================== -------- ------- ======== --------- ==========
Less distributions:
Distributions from net realized (.89) (.49) (.49) (.90) (.57)
================================= -------= --------= --------= ---------= ---------=
gains on investments
Net asset value at end of period $ 7.91 $ 8.36 $ 7.08 $ 8.71 $ 7.59
================================ ====== ====== ====== ======== =======
TOTAL RETURN 5.34% 25.11% (13.12)% 26.71% (2.57)%
======= ====== ====== ======== ========
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's $9,836 $9,808 $8,454 $12,250 $9,229
======== ====== ======= ======
omitted)
Ratio of expenses to average net 3.20% 3.55% 3.53% 3.55% 3.56%
======= ======= ======= ========= ========
assets (a)(b)
Ratio of net investment income (loss) (2.74%) (2.85)% (1.65)% (2.36)% .51%
======= ======= ======= ========= =========
to average net assets (c)
Portfolio turnover rate 255% 214% 212% 182% 175%
===== ====== ===== ======== ========
Average commission per share $.0536
</TABLE>
* Per share net investment income (loss) and net realized and unrealized gain
(loss) on investments have been computed using the average number of shares
outstanding.
These computations had no effect on net asset value per share.
(a)Ratio prior to reimbursement by the Investment Manager was 3.84%, 3.59%,
3.69% and 4.09% for the years ended December 31, 1995, 1994, 1993 and 1992,
respectively. (b)Ratio after the reduction of custodian fees under a custodian
agreement was 3.49% for 1995. Prior to 1995, such reductions were reflected in
the expense ratios. There were no custodian fee credits for 1996. (c)Ratio prior
to reimbursement by the Investment Manager was (3.14)%, (1.71)%, (2.50)% and
(0.02)% for the years ended December 31, 1995, 1994, 1993 and 1992,
respectively.
U.S. and Overseas Fund
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board Of Directors and Shareowners of
Bull & Bear U.S. and Overseas Fund:
We have audited the accompanying statement of assets and liabilities of
Bull & Bear U.S. and Overseas Fund, including the schedule of portfolio
investments as of December 31, 1996, and the related statement of operations for
the year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statements
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Bull & Bear U.S. and Overseas Fund as of December 31, 1996, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended, and the financial highlights
for each of the five years in the period then ended, in conformity with
generally accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
January 17, 1997
U.S. and Overseas Fund
<PAGE>
U.S,. And Overseas Fund
11 Hanover Square
New York, NY 10005
1-800-847-4200 1-212-363-1100
http://www.bull-and-bear.com Call toll-free for Fund performance, telephone
purchases, exchanges among the Bull & Bear Funds, and to obtain information
concerning your account.
1-800-847-4200
1-212-363-1100
This report and the financial statements contained herein are submitted for the
general information of the shareowners of the Fund. The report is not authorized
for distribution to prospective investors in the Fund unless preceded or
accompanied by an effective Prospectus.
U.S. and Overseas Fund
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