[GRAPHIC OMITTED]
CLEMENTE STRATEGIC
VALUE FUND, INC.
SEMI-ANNUAL REPORT
==================
JUNE 30, 2000
<PAGE>
Clemente Strategic Value Fund, Inc.
LETTER TO SHAREHOLDERS
================================================================================
August 11, 2000
Dear Fellow Shareholders:
We are pleased to report on the investment performance and activities of the
Clemente Strategic Value Fund, Inc. (the "Fund"), for the period of January 1,
2000 through June 30, 2000. As reported earlier, the Fund's portfolio moved to a
decidedly US orientation last year and the official benchmark was changed to the
S&P 500 as of May, 2000.
The first months of 2000 were marked by volatility in US equity markets as
sentiment shifted between "new economy" and "old economy" stocks. Weakness in
many of 1999's high flyers and continued interest rate fears moved major
domestic markets into negative territory by the end of June.
The net asset value ("NAV") of the Fund increased +2.2% through the first half
of 2000, comparing favorably with both the S&P 500 which declined -1.0% and the
FT-Actuaries World Index, the Fund's former benchmark, which declined -5.4% in
$US. The market price, however, declined -8.8% over the same period and the
discount widened to 14.9%. We will continue to work toward reducing this
discount and, in the process, utilizing it to the benefit of our shareholders.
The Board is committed to using the Fund's unique advantages to enhance
long-term capital appreciation. Recent shareholder-mandated changes allow the
investment manager greater flexibility to focus the portfolio strategically into
investments both in the U.S. and around the world. The Fund share buy-back
program continues to provide extra return to long-term shareholders. Through
June 30, 2000, the Fund has repurchased 1,571,940 shares at a discount to NAV,
representing more than 27% of the shares outstanding at the start of the program
in 1998. These steps coupled with a focus on further expense reduction lead us
toward our goal of increased shareholder value.
We believe that the Clemente Strategic Value Fund is positioned to continue
producing excellent returns for the long-term investor. The Fund will pay a
spillover dividend of $4,351,786 later this year representing gains realized in
1999. Thank you for your continued support and confidence.
Sincerely,
/S/SIGNATURE
Ralph W. Bradshaw
Chairman
1
<PAGE>
Clemente Strategic Value Fund, Inc.
SCHEDULE OF INVESTMENTS (UNAUDITED) JUNE 30, 2000
================================================================================
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
---------------- -----------
COMMON STOCK - 99.4%
BASIC MATERIALS -- 1.5%
<S> <C> <C>
Pohang Iron & Steel Ltd ADR (c)................................................. 40,000 $ 960,000
-----------
960,000
-----------
CAPITAL GOODS -- 10.2%
General Electric Co............................................................. 60,000 3,060,000
Honeywell International......................................................... 29,000 976,938
Textron Inc..................................................................... 21,500 1,167,719
Tyco International Ltd.......................................................... 33,000 1,563,375
-----------
6,768,032
-----------
COMMUNICATION SERVICES -- 12.5%
Korea Telecom Corporation ADR (c)............................................... 19,600 948,150
Nippon Telegraph ADR (b)........................................................ 25,000 1,709,375
Qwest Communications*........................................................... 41,000 2,037,188
Worldcom, Inc. *................................................................ 41,500 1,903,813
Vodafone Group PLC ADR (d)...................................................... 40,000 1,657,500
-----------
8,256,026
-----------
CONSUMER CYCLICALS -- 11.2%
Carnival Cruise Lines........................................................... 26,000 507,000
Gannett, Inc.................................................................... 21,000 1,256,063
Home Depot, Inc................................................................. 41,100 2,052,431
Linens `N Things*............................................................... 21,000 569,625
Target Corp..................................................................... 9,300 539,400
Time Warner, Inc................................................................ 24,000 1,824,000
Zale Corp.*..................................................................... 18,000 657,000
-----------
7,405,519
-----------
CONSUMER STAPLES -- 4.9%
Coca Cola Co.................................................................... 25,000 1,435,938
Sysco Corp...................................................................... 42,900 1,807,163
-----------
3,243,101
-----------
ENERGY -- 5.0%
Conoco, Inc..................................................................... 57,000 1,254,000
Halliburton Co.................................................................. 43,000 2,029,063
-----------
3,283,063
-----------
FINANCE -- 10.3%
American International Group.................................................... 20,000 2,350,000
Morgan Stanley Dean Witter...................................................... 32,000 2,664,000
Citigroup, Inc.................................................................. 30,000 1,807,500
-----------
6,821,500
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
2
<PAGE>
Clemente Strategic Value Fund, Inc.
SCHEDULE OF INVESTMENTS (UNAUDITED) - CONTINUED JUNE 30, 2000
================================================================================
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
---------------- -----------
HEALTHCARE -- 12.6%
<S> <C> <C>
Bristol-Meyers Squibb Co........................................................ 12,300 $ 716,475
Guidant Corp*................................................................... 11,500 569,250
Johnson & Johnson............................................................... 9,000 916,875
Merck & Co. Inc................................................................. 25,500 1,953,938
Pfizer, Inc..................................................................... 86,325 4,143,600
-----------
8,300,138
-----------
TECHNOLOGY -- 31.2%
American Online Inc.*........................................................... 32,400 1,709,100
Analog Devices*................................................................. 44,000 3,344,000
Automatic Data Processing....................................................... 26,000 1,392,625
Cisco Systems, Inc. ............................................................ 36,000 2,288,250
Emc Corp. *..................................................................... 30,200 2,323,513
Intel Corp...................................................................... 13,000 1,737,938
Jds Uniphase Corp.*............................................................. 10,400 1,246,700
Microsoft Corp.*................................................................ 18,000 1,440,000
Nokia Corp. ADR (a)............................................................. 48,000 2,397,000
S.T. Microelectronics........................................................... 24,000 1,540,500
Tellabs, Inc.*.................................................................. 18,000 1,231,875
-----------
20,651,501
-----------
TOTAL COMMON STOCK (Cost $47,069,137)........................................... 65,688,880
-----------
TIME DEPOSIT -- 0.6%
HSBC HLDGS PLC Grand Cayman 6.00% 07/03/2000 (Cost $379,000)................... 379,000 379,000
-----------
TOTAL INVESTMENTS (Cost $47,448,137)**-- 100.00%................................ $66,067,880
-----------
-----------
<FN>
ADR American Depository Receipts
(a) Finland
(b) Japan
(c) Korea
(d) United Kingdom
* Non-Income Producing Security
** Summary Of Total Investments:
COST VALUE
----------- -----------
Common Stock ...................... $47,069,137 $65,688,880
Short-Term Instruments ............ 379,000 379,000
----------- -----------
Total Investments ................. $47,448,137 $66,067,880
----------- -----------
----------- -----------
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
3
<PAGE>
Clemente Strategic Value Fund, Inc.
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) JUNE 30, 2000
================================================================================
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments at value (Cost $47,448,137) ......................................................... $66,067,880
Cash ........................................................................................... 975
Dividends receivable............................................................................. 37,643
Other assets..................................................................................... 4,500
-----------
Total Assets................................................................................ 66,110,998
-----------
LIABILITIES
Payable for shares repurchased by Fund........................................................... 7,830
Accrued expenses ................................................................................ 93,953
-----------
Total Liabilities........................................................................... 101,783
-----------
NET ASSETS $66,009,215
-----------
-----------
Net assets consist of:
Common stock, $0.01 par (authorized 25,000,000 shares and 6,010,000
shares issued, 4,320,460 shares outstanding of common stock)................................ $ 43,205
Paid-in Capital............................................................................... 52,207,830
Cost of 1,689,540 shares held in treasury..................................................... (21,834,640)
Accumulated net investment loss............................................................... (356,749)
Accumulated net realized gain on investments.................................................. 17,330,119
Net unrealized appreciation of investments and translation
of net assets denominated in foreign currencies............................................. 18,619,450
-----------
Net Assets....................................................................................... $66,009,215
-----------
-----------
Net Asset Value Per Share
($66,009,215 / 4,320,460 shares of common stock).............................................. $ 15.28
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
Clemente Strategic Value Fund, Inc.
STATEMENT OF OPERATIONS (UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30,
2000
------------
INVESTMENT INCOME
<S> <C>
Dividends (net of foreign taxes withheld $5,822).............................................. $ 197,594
Interest...................................................................................... 49,585
------------
Total income................................................................................ 247,179
------------
EXPENSES
Investment advisory fee ...................................................................... 435,137
Administrative services fee................................................................... 48,689
Custodian fees and expenses................................................................... 12,533
Directors fees and expenses................................................................... 36,283
Legal fee..................................................................................... 30,140
Audit fee..................................................................................... 22,691
Printing ..................................................................................... 18,043
Registration expenses......................................................................... 7,271
Transfer agency services...................................................................... 4,418
Insurance expense............................................................................. 2,940
Miscellaneous ................................................................................ 15,425
------------
Total operating expenses...................................................................... 633,570
Fees paid indirectly.......................................................................... (29,642)
------------
Net Expenses ................................................................................. 603,928
------------
Net investment loss.............................................................................. (356,749)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions....................................................................... 12,978,332
Foreign currency transactions................................................................. (288)
Net change in unrealized appreciation (depreciation) on
Investment transactions....................................................................... (11,370,580)
------------
Net realized and unrealized gain on investments and foreign currency transactions................ 1,607,464
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................................. $ 1,250,715
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
Clemente Strategic Value Fund, Inc.
STATEMENT OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
2000 1999
----------- -----------
(UNAUDITED)
Operations:
<S> <C> <C>
Net investment loss........................................................... $ (356,749) $ (457,650)
Net realized gain (loss) on:
Investment transactions..................................................... 12,978,332 22,501,079
Foreign currency transactions............................................... (288) (341,105)
Net change in unrealized appreciation (depreciation) on:
Investment transactions..................................................... (11,370,580) (2,787,872)
Translation of other assets and liabilities
denominated in foreign currency........................................... -- 2,758
----------- -----------
Net increase in net assets resulting from operations............................. 1,250,715 18,917,210
----------- -----------
Distribution to shareholders:
Net realized gain on investments.............................................. -- (17,162,161)
Capital share transactions:
Shares repurchased............................................................ (1,445,495) (14,611,484)
----------- -----------
Total decrease in net assets..................................................... (194,780) (12,856,435)
----------- -----------
NET ASSETS:
Beginning of period........................................................... 66,203,995 79,060,430
----------- -----------
End of period................................................................. $66,009,215 $66,203,995
----------- -----------
----------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
Clemente Strategic Value Fund, Inc.
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
================================================================================
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FOR THE YEAR ENDED DECEMBER 31,
JUNE 30, ----------------------------------------------------------
2000 1999 1998 1997 1996 1995
------------ --------- -------- --------- --------- ----------
(UNAUDITED)
PER SHARE OPERATING
PERFORMANCE
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...... $ 14.95 $ 14.52 $ 11.53 $ 10.10 $ 10.65 $ 10.73
-------- -------- -------- --------- --------- ---------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income (loss) .............. (0.08) (0.19) (0.09) (0.05) (0.03) --
Net realized and unrealized gains
(losses) on investments, foreign
currency holdings and other assets
and liabilities denominated in
foreign currencies ..................... 0.36 4.39 2.96 2.36 0.41 0.42
-------- -------- -------- --------- --------- ---------
Net increase (decrease) from
investment operations .................. 0.28 4.20 2.87 2.31 0.38 0.42
-------- -------- -------- --------- --------- ---------
LESS DIVIDENDS AND
DISTRIBUTIONS
Distribution from net investment
income ............................... -- -- -- -- -- --
Distribution from net realized capital
and currency gains ................... -- (3.87) -- (0.88) (0.93) (0.50)
-------- -------- -------- --------- --------- ---------
TOTAL DIVIDENDS AND
DISTRIBUTIONS .......................... -- (3.87) -- (0.88) (0.93) (0.50)
-------- -------- -------- --------- --------- ---------
SHARES REPURCHASED
Effect of Shares Repurchased .............. 0.05 0.10 0.12 --- -- --
-------- -------- -------- --------- --------- ---------
Increase (decrease) in net asset value .... 0.33 0.43 2.99 1.43 (0.55) (0.08)
-------- -------- -------- --------- --------- ---------
Net asset value, end of period ............ $ 15.28 $ 14.95 $ 14.52 $ 11.53 $ 10.10 $ 10.65
-------- -------- -------- --------- --------- ---------
-------- -------- -------- --------- --------- ---------
PER SHARE MARKET VALUE,
END OF PERIOD .......................... $ 13.00 $ 14.25 $ 12.88 $ 9.44 $ 7.50 $ 8.38
-------- -------- -------- --------- --------- ---------
-------- -------- -------- --------- --------- ---------
TOTAL INVESTMENT RETURN* .................. (8.77)%*** 40.74% 36.42% 37.62% 0.64% 4.59%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000's) ........ $66,009 $66,204 $79,060 $67,951 $59,520 $62,781
Ratios to average net assets:
Operating expenses ..................... 1.86%**+ 1.55%+ 1.91% 1.74% 1.53% 1.58%
Net investment income (loss) ........... (1.10)%**+ (0.59)%+ (0.69)% (0.46)% (0.25)% (0.02)%
Portfolio turnover ........................ 26.74% 101.54% 50.39% 81.56% 120.66% 84.98%
<FN>
---------------------
* Total investment return is calculated assuming a purchase of common stock at
the current market price on the first day and a sale at the current market
price on the last day of each period reported. Dividends and distributions,
if any, are assumed, for purposes of this calculation, to be reinvested at
prices obtained under the Fund's dividend reinvestment plan. Total investment
return does not reflect brokerage commissions or sales charges.
** Annualized
*** Non-Annualized
+ The ratios of operating expenses and net investment loss to average net
assets before brokerage credits were 1.95% and (1.19)%, respectively, for the
six months ending June 30, 2000 and 1.64% and (0.68%), respectively, for the
period ending December 31, 1999.
</FN>
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
Clemente Strategic Value Fund, Inc.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 2000
================================================================================
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES -- Clemente Strategic
Value Fund, Inc. (the "Fund") was incorporated in Maryland on May 1, 1987, as a
closed-end, diversified management investment company. The Fund had no
operations until June 30, 1987, other than the sale of 10,000 shares of common
stock for $100,000 to Clemente Capital, Inc. (the "Investment Adviser") on June
9, 1987.
Effective May 21, 1999, the Clemente Global Growth Fund, Inc. changed its name
to the Clemente Strategic Value Fund, Inc.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements. The preparation of
financial statements in accordance with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from those estimates.
SECURITY VALUATION: Portfolio securities traded on stock exchanges or on the
NASDAQ National Market System are valued at the last sale price as of the close
of business on the primary exchange on the day the securities are being valued,
or if no sales prices are reported, at the mean between closing bid and asked
prices. Other over-the-counter portfolio securities are valued at the most
recent bid prices obtained from one or more dealers that make markets in the
securities. Short-term obligations, maturing within 60 days of the valuation
date, are to be valued at amortized cost, which approximates market value.
Securities for which market quotations are not readily available are valued at
their fair value as determined in good faith by the Board of Directors.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized gains and losses on sales of investments
are calculated on the identified cost basis. Dividend income is recorded on the
ex-dividend date. Interest income is accrued as earned. Non-U.S. withholding tax
is recorded as a reduction of income.
FOREIGN CURRENCY TRANSLATION: The books and records of the Fund are maintained
in United States dollars.
Foreign currency amounts are translated as follows into U.S. dollars on the
following basis:
(i) market value of investment securities and other assets and liabilities at
the exchange rate on the valuation date.
(ii) purchases and sales of investment securities, income and expenses at the
exchange rate prevailing on the respective date of such transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, currency gains and losses realized between
the trade and settlement dates on securities transactions, the difference
between the amounts of dividends, interest and foreign withholding taxes
recorded on the Fund's books, and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains and losses
arise from changes in the value of the assets and liabilities
8
<PAGE>
Clemente Strategic Value Fund, Inc.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED JUNE 30, 2000
================================================================================
other than investments in securities at the end of the period, resulting from
changes in the foreign exchange rate.
TAXES: No provision for Federal income tax is required since it is the policy of
the Fund to comply with the provisions of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its taxable income,
including any net realized gains, in an amount sufficient to relieve the Fund of
any Federal income tax liability. The Fund intends to comply with the
requirements of the Internal Revenue Code as long as qualification is determined
by the Board of Directors to be in the best interests of the shareholders.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Fund records dividends and
distributions to its shareholders on the ex-dividend date.
The amounts of dividends from net investment income and of distributions from
net realized gains are determined in accordance with Federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the composition of net assets based on their Federal
tax-basis treatment; temporary differences do not require reclassification. At
December 31, 1999, $341,105 of net realized foreign currency loss was
reclassified to net investment loss and the total net investment loss of
$981,889 was reclassified to capital. Dividends and distributions to
shareholders which exceed net investment income and net realized gains for
financial reporting purposes but not for tax purposes are reported as dividends
in excess of net investment income or distributions in excess of net realized
gains. To the extent they exceed net investment income and net realized gains
for tax purposes, they are reported as distributions of capital.
OPTION ACCOUNTING: When the Fund purchases a call or put option, the premium
paid is recorded as an investment which is subsequently marked-to-market to
reflect the current market value. If a purchased option expires, the Fund will
realize a loss to the extent of the premium paid. If the Fund enters into a
closing sale transaction, a gain or loss is realized for the difference between
the proceeds from the sale and the cost of the option. If a put option is
exercised, the cost of the security or currency sold upon exercise will be
increased by the premium originally paid. If a call option is exercised, the
cost of the security purchased upon exercise will be increased by the premium
originally paid.
NOTE 2. INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS -- For the period
January 1, 2000 to April 30, 2000, the Fund paid to the Investment Adviser as
compensation for the services provided by the Investment Adviser under the
Investment Advisory Agreement, a monthly fee comprised of a basic fee of 1% (on
an annualized basis) of the month-end net assets of the Fund (the "Basic Fee"),
subject to adjustment as described below based on the investment performance of
the Fund in relation to the investment record of the FT-Actuaries World Index
(the "FT-Actuaries Index").
Adjustments to the Basic Fee were made by comparison of the Fund's investment
performance for the applicable performance period with the investment record of
the FT-Actuaries Index for the same period. The applicable performance period
was a rolling 36-month period whereby the most recent calendar month was
substituted for the earliest month as time passes. The Basic Fee for each month
was increased to a maximum of 1.50% (on an annualized basis) or decreased to a
minimum of 0.50% (on an annualized
9
<PAGE>
Clemente Strategic Value Fund, Inc.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED JUNE 30, 2000
================================================================================
basis) depending on the extent by which the Fund's performance varied from the
FT-Actuaries Index over the performance period as set forth below.
Until May 1, 2000, the following table illustrates the full range of permitted
increases or decreases of the Basic Fee on an annualized basis:
<TABLE>
<CAPTION>
PERCENTAGE POINT
DIFFERENCE BETWEEN
PERFORMANCE OF FUND ADJUSTMENT FEE AS
AND % CHANGE IN BASIC TO BASIC FEE ADJUSTED MONTHLY
FT-ACTUARIES INDEX FEE (ANNUALIZED) (ANNUALIZED) FEE RATE
------------------- -------- -------------- ------------ ---------------
<S> <C> <C> <C> <C>
+ 10% or greater 1% + .50% 1.50% 1/12 x 1.50%
+ 9 1 + .40 1.40 1/12 x 1.40
+ 8 1 + .30 1.30 1/12 x 1.30
+ 7 1 + .25 1.25 1/12 x 1.25
+ 6 1 + .20 1.20 1/12 x 1.20
+ 5 1 + .15 1.15 1/12 x 1.15
+ 4 1 + .10 1.10 1/12 x 1.10
+ 3 1 + .075 1.075 1/12 x 1.075
+ 2 1 + .05 1.05 1/12 x 1.05
+ 1 1 + .025 1.025 1/12 x 1.025
0 1 .00 1.00 1/12 x 1.00
- 1 1 - .025 .975 1/12 x .975
- 2 1 - .05 .95 1/12 x .95
- 3 1 - .075 .925 1/12 x .925
- 4 1 - .10 .90 1/12 x .90
- 5 1 - .15 .85 1/12 x .85
- 6 1 - .20 .80 1/12 x .80
- 7 1 - .25 .75 1/12 x .75
- 8 1 - .30 .70 1/12 x .70
- 9 1 - .40 .60 1/12 x .60
- 10 or greater 1 - .50 .50 1/12 x .50
</TABLE>
The shareholders of Clemente Strategic Value Fund approved an amendment to the
Advisory Agreement effective May 1, 2000. The Adviser will still be entitled to
a Basic Fee of 1% and that fee will also be subject to an adjustment based on
the Fund's performance compared to the performance of the S&P 500 Index.
However, under the amended Advisory Agreement, the Basic Fee earned by the
Adviser may, on an annualized basis, increase from 1% to a maximum of 2% or
decrease from 1% to a minimum of 0.00% depending on the Fund's performance
compared to the S&P 500 Index. The new Advisory fee will be calculated via the
use of a rolling 60 month period. Until the Adviser and the Fund have
established performance records for at least 12 months, the Adviser will earn a
flat fee of 1% of the Fund's average weekly net assets on an annualized basis
for the period May 1, 2000 through April 30, 2001. The Adviser will begin to
receive a fee adjustment for the Fund performance in the second year of the
amended Advisory Agreement. During the second year, from May 1, 2001 through
April 30, 2002, each month's accrued advisory fee (including accrued performance
fees) will be calculated using a 12 month rolling
10
<PAGE>
Clemente Strategic Value Fund, Inc.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED JUNE 30, 2000
================================================================================
period. At the end of the second year ending April 30, 2002 and at the end of
each succeeding year of the amended Advisory Agreement, 12 months will be added
to the rolling period for purposes of calculating the performance fee until the
rolling period is eventually equal to 60 months.
Effective May 1, 2000, the following table illustrates the full range of
permitted increases or decreases of the Basic Fee on an annualized basis:
<TABLE>
<CAPTION>
PERCENTAGE POINT DIFFERENCE
BETWEEN PERFORMANCE OF FUND
AND % CHANGE IN BASIC ADJUSTMENT TO BASIC FEE FEE AS ADJUSTED
S&P 500 INDEX FEE (ANNUALIZED) (ANNUALIZED)
---------------------------- -------- ----------------------- ----------------
<S> <C> <C> <C>
+ 15% or greater 1% + 1.0% 2.00%
+ 14 1 + 0.9 1.90
+ 13 1 + 0.8 1.80
+ 12 1 + 0.7 1.70
+ 11 1 + 0.6 1.60
+ 10 1 + 0.5 1.50
+ 9 1 + 0.4 1.40
+ 8 1 + 0.3 1.30
+ 7 1 + 0.2 1.20
+ 6 1 + 0.1 1.10
+ 5 1 0.0 1.00
+ 4 1 - 0.1 0.90
+ 3 1 - 0.2 0.80
+ 2 1 - 0.3 0.70
+ 1 1 - 0.4 0.60
0 1 - 0.5 0.50
- 1 1 - 0.6 0.40
- 2 1 - 0.7 0.30
- 3 1 - 0.8 0.20
- 4 1 - 0.9 0.10
- 5 or greater 1 - 1.0 0.00
</TABLE>
In calculating the investment performance of the Fund as compared with the
investment record of the FT-Actuaries Index or the S&P 500 Index, dividends and
other distributions of the Fund and dividends and other distributions reported
with respect to component securities of the FT-Actuaries Index or the S&P 500
Index during the performance period will be treated as having been reinvested.
Also, the withholding taxes paid or accrued by the Fund are added back in
calculating the Fund's performance in order to be comparative with the
FT-Actuaries Index or the S&P 500 Index.
Pursuant to a U.S. Advisory Agreement dated May 29, 1997, as amended May 1, 2000
to be the Sub-Advisory Agreement (the "Agreement") among the Fund, the
Investment Adviser and Wilmington Trust Company, an indirect affiliate of the
Investment Adviser ("Wilmington Trust"). Wilmington Trust manages a portion of
the Fund's portfolio subject to the supervision of the Adviser and Board of
Directors. Under the terms of the Agreement, the Investment Adviser has agreed
to pay Wilmington Trust a monthly
11
<PAGE>
Clemente Strategic Value Fund, Inc.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED JUNE 30, 2000
================================================================================
fee at the rate of 25% of the net fees payable to the Investment Adviser. The
fee paid to Wilmington Trust by the Investment Adviser for the six months ended
June 30, 2000, amounted to $108,784.
The Fund incurred $435,137 and $803,076 in investment advisory fees for the six
months ended June 30, 2000 and the year ended December 31, 1999, respectively,
which represents a 33% and 5% increase, respectively, to the Basic Fee of 1%.
Pursuant to an Administration and Accounting Services Agreement (the
"Administration and Accounting Services Agreement") with the Fund dated January
20, 1998, PFPC Inc. ("PFPC" or "the Administrator") serves as the Fund's
administrator and accounting agent. Under the Administration and Accounting
Services Agreement, PFPC generally assists in all aspects of the Fund's
operations, other than providing investment advice, subject to the overall
authority of the Fund's Board of Directors. PFPC determines the Fund's weekly
and monthly net asset value, prepares such figures for publication, maintains
certain of the Fund's books and records that are not maintained by the
Investment Adviser, custodian or transfer agent, and assists in the preparation
of financial information for the Fund's income tax returns, proxy statements,
semi-annual and annual shareholder reports. Under the Administration Agreement,
the Fund has agreed to pay a monthly fee at the annual rate of 0.15% of the
Fund's average weekly net assets subject to a minimum fee of $65,000 per annum.
For the six months ended June 30, 2000, the Administrator earned fees in the
amount of $ 48,689.
Each director unaffiliated with the Advisor receives an annual fee of $8,000
plus $500 for every meeting attended, together with a reimbursement of out of
pocket expenses. Certain officers of the Fund are also directors and officers of
the Investment Adviser.
NOTE 3. PORTFOLIO SECURITIES -- Purchases and sales of securities, other than
short-term investments, for the six months ended June 30, 2000 were $9,003,757
and $18,562,960 , respectively.
For Federal income tax purposes, the cost of securities owned at June 30, 2000,
was $ 47,448,137 and the net unrealized appreciation of investments was
$18,619,738 . Net unrealized appreciation was composed of gross appreciation of
$21,665,068 for those investments having an excess of value over cost, and gross
depreciation of $3,045,330 for those investments having an excess of cost over
value.
The Fund has an arrangement with a broker whereby the broker paid custodian and
administrative expenses for a portion of the year on behalf of the Fund. Amounts
paid are recorded as fees paid indirectly on the face of the Statement of
Operations.
NOTE 4. CAPITAL STOCK -- There are 25 million shares of $.01 par value common
stock authorized. Of the 4,320,460 shares outstanding at June 30, 2000, the
Investment Adviser owned 10,000 shares.
12
<PAGE>
Clemente Strategic Value Fund, Inc.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED JUNE 30, 2000
================================================================================
NOTE 5. SHARE REPURCHASE PROGRAM -- On October 5, 1998, the Fund commenced a
share repurchase program for purposes of enhancing shareholder value and
reducing the discount at which the Fund's shares traded from their net asset
value. From that date through June 30, 2000, the Fund repurchased 1,571,940
shares or 26.68% of its Common Stock at an average price per share of $13.20 and
an average discount of 10.67% from net asset value per share. For the six months
ended June 30, 2000, the Fund repurchased 108,600 shares or 1.84% of its common
stock at an average price per share of $13.09 and an average discount of 12.23%
from net asset value per share. The Fund expects to continue to repurchase its
outstanding shares at such time and in such amounts as it believes will further
the accomplishment of the foregoing objectives, subject to review by the Board
of Directors.
13
<PAGE>
Clemente Strategic Value Fund, Inc.
REPORT OF THE FUND'S ANNUAL MEETING JUNE 30, 2000
================================================================================
The Fund held it's annual meeting on April 26, 2000. At the meeting, the
shareholders voted to elect seven directors for a one year term: Gary A. Bentz,
Ralph W. Bradshaw, William Clark, Thomas Lenagh, Scott B. Rogers, Andrew W.
Strauss and Glenn W. Wilcox, Sr. The shareholders voted to ratify the selection
of PricewaterhouseCoopers, LLP as the Fund's independent accountants for the
year ending December 31, 2000. The shareholders voted to approve the amendment
of the Fund's Investment Advisory Agreement with the Adviser regarding the
calculation of the management fee and to amend the U.S. Advisory Agreement among
the Fund, the Adviser and Wilmington Trust Company to a Sub-Advisory Agreement.
A shareholder proposal recommending that the Board take steps necessary to
provide shareholders with an option to receive net asset value with no
redemption penalty was disapproved.
The results of the voting were as follows:
<TABLE>
<CAPTION>
FOR AGAINST
---------- ---------
ELECTION OF DIRECTORS
----------------------------
<S> <C> <C>
Gary A. Bentz 2,214,136 13,770
Ralph W. Bradshaw 2,214,136 13,770
William Clark 2,214,136 13,770
Thomas Lenagh 2,214,136 13,770
Scott B. Rogers 2,214,136 13,770
Andrew W. Strauss 2,214,136 13,770
Glenn W. Wilcox, Sr. 2,214,136 13,770
Selection of PricewaterhouseCoopers LLP 2,218,456 3,598
Amend Advisory Agreement 2,201,697 19,467
Amend U.S. Advisory Agreement 2,208,420 11,144
Shareholder proposal 301,456 1,917,929
</TABLE>
<PAGE>
DIRECTORS AND OFFICERS
RALPH W. BRADSHAW, CHAIRMAN & DIRECTOR
LEOPOLDO M. CLEMENTE, JR., PRESIDENT
GARY A. BENTZ, DIRECTOR & TREASURER
WILLIAM CLARK, DIRECTOR & SECRETARY
THOMAS H. LENAGH, DIRECTOR
SCOTT B. ROGERS, DIRECTOR
ANDREW W. STRAUSS, DIRECTOR
GLENN W. WILCOX, SR., DIRECTOR
MARIA DISTEFANO, ASSISTANT SECRETARY
--------------------------------------------------------------------------------
EXECUTIVE OFFICES --
152 W. 57th Street, New York, NY 10019 (For latest net asset value And market
data, please call 212-765-0700 or access our web site at
http://www.clementecapital.com. For shareholder inquiries, please call
1-800-937-5449)
INVESTMENT ADVISERS --
Clemente Capital, Inc.
Wilmington Trust Company
ADMINISTRATOR -- PFPC Inc.
TRANSFER AGENT AND REGISTRAR --
American Stock Transfer & Trust Company
CUSTODIAN --
Brown Brothers Harriman & Co.
LEGAL COUNSEL --
Spitzer & Feldman P.C.
INDEPENDENT ACCOUNTANTS --
PricewaterhouseCoopers LLP
<PAGE>
SUMMARY OF GENERAL INFORMATION
================================================================================
THE FUND
Clemente Strategic Value Fund, Inc. is a closed-end investment company whose
shares trade on the New York Stock Exchange. The Fund seeks long-term capital
appreciation primarily through investment in equity securities of companies
located throughout the world. The Fund is managed by Clemente Capital, Inc. and
Wilmington Trust Company.
SHAREHOLDER INFORMATION
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transactions section of most news-papers under the
designation "ClemGlb". The Fund's New York Stock Exchange trading symbol is CLM.
Net asset value (NAV) and market price information about Clemente Strategic
Value Fund, Inc. shares are published each Monday in The Wall Street Journal,
The New York Times and other newspapers. For general information visit us at our
web site http://www.clementecapital.com. For share-holder account inquiries call
1-800-937-5449.
DIVIDEND REINVESTMENT PLAN
Through its voluntary Dividend Reinvestment Plan, shareholders of Clemente
Strategic Value Fund, Inc. may elect to receive dividends and capital gains
distributions in the form of addi-tional shares of the Fund.
--------------------------------------------------------------------------------
THIS REPORT IS TRANSMITTED TO THE SHAREHOLDERS OF CLEMENTE STRATEGIC VALUE FUND,
INC. FOR THEIR INFORMATION. THIS IS NOT A PROSPECTUS, CIRCULAR OR REPRESENTATION
INTENDED FOR USE IN THE PURCHASE OF SHARES OF THE FUND OR ANY SECURITIES
MENTIONED IN THIS REPORT. NOTICE IS HEREBY GIVEN IN ACCORDANCE WITH SECTION
23(C) OF THE INVESTMENT COMPANY ACT OF 1940 THAT THE FUND MAY PURCHASE AT MARKET
PRICES FROM TIME TO TIME SHARES OF ITS COMMON STOCK IN THE OPEN MARKET.
--------------------------------------------------------------------------------
