A No - Load Fund
MUHLENKAMP FUND
PO Box 598, Wexford PA 15090-0598 * (412)935-5520 or
(800)860-3863
Annual Report
December 31, 1994
Dear Shareholder:
The Trustees and Management of the Muhlenkamp Fund are
pleased to present this sixth annual report of your fund.
We had a rough year in 1994. Your Fund finished the year at
a Net Asset Value (NAV) of $16.23 after declaring a 35 cent
dividend. Our total return for the year 1994 was minus 7.3%
Year Ending Total Return (%)
12/31 Muhlenkamp Fund S&P 500
1991 45.4 30.5
1992 15.8 7.7
1993 18.1 9.9
1994 (7.3) 1.3
Chart goes here. This is a line chart comparing the
performance of the Muhlenkamp Fund with the S&P 500 since
December 31, 1990. On December 31, 1990 the Fund and the
S&P are each assigned an index value of 100. At the end of
each subsequent year this value is recalculated using the
performance figures from the above table. The results shown
below are then plotted on a line chart.
X-Axis = Date Y-Axis = Index Value
Muhlenkamp Fund S&P 500
12/31/90 100 100
12/31/91 145 131
12/31/92 168 141
12/31/93 198 155
12/31/94 184 157
Our results in 1994 were negative and disappointing. This
decline resulted from a number of factors, but the most
important, was the dramatic rise in interest rates and the
decline in the bond market. A number of the stocks we own
are still perceived by many investors to be interest rate
sensitive, even though their businesses are less so, and the
prices declined. The effects of the market's decline were
exacerbated by Mexico's devaluation of the peso and the
subsequent declines in the Mexican stock market and other
"emerging" economies. We tried to put this in context in
Memorandum #33 which we sent to you in January. Over a
three or four year period, we look pretty good; but in 1994,
we looked pretty dumb!
A year ago, many people in the investment industry claimed
that bonds, utilities and foreign investing were "safe." In
hindsight, that sentiment should have given us greater
pause, because assumed safety often causes people to do dumb
things, like risking principal for an additional one percent
in promised yield. This time many did it by using
derivatives on Treasury bonds. We were surprised by the
extent of such activity and by the degree of emotional
market response. We find this particularly ironic because
we warned our readers about the risks in the bond market and
foreign investing in late 1993 and mid-1994.
Meanwhile sales and earnings for the companies we own have
come through as expected. Cash flows of these companies are
strong and many are buying in their own stock. But fears of
higher inflation and higher interest rates have driven stock
prices lower, many to bargain levels. It appears to us that
the bond and stock markets bottomed in early December,
although we can never be certain that a new fear won't panic
the public and drive prices still lower. With the exception
of renewed weakness in the dollar, apparently in sympathy
with the Mexican peso, the markets are acting well, much as
we expected in Memorandum #33 (copies are available on
request). Thus, we expect 1995 to be a year of decent
returns and are looking for those companies and stocks which
are likely to do well.
We have continued to attract long-term investors. After the
strong positive returns of 1991-1993 and the attendant
publicity attracted numerous new shareholders, we feared the
emotional crosscurrents of 1994 might result in net
withdrawals. So far, such fears have been groundless. Each
month in 1994 witnessed contributions to the Fund and Total
Assets now exceed $16 million.
In an effort to minimize costs, the NAV for each day has
been calculated the following morning. This has resulted in
a one day delay in the NAV quote in the daily newspaper and
has resulted in some confusion among our shareholders. At
the present time, this practice continues but is under
review with the goal of changing to same day pricing. We
will keep you informed.
We appreciate your continued interest in the Muhlenkamp
Fund. We welcome your questions and comments, and we ask
that you spread the word of our Fund among your friends.
Ronald H. Muhlenkamp
President
March 1995
Investment Advisor Custodian Auditors
Muhlenkamp & Co., PNC Bank Schneider, Downs &
Inc. Co., Inc., CPAs
12300 Perry Pittsburgh PA 1133 Penn Avenue
Highway 15265
Wexford, PA 15090 (412)762-3798 Pittsburgh, PA 15222
(412)935-5520 (412)261-3644
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1994
ASSETS
INVESTMENTS, AT VALUE (Identified Cost $16,559
$16,233,437) ,657
CASH 2,002
RECEIVABLES
Dividends 37,439
Interest 12,107
49,456
Total Assets 16,611,205
LIABILITIES
ADVISOR FEE PAYABLE 455
Total Net Assets $16,610,750
NET ASSETS
CAPITAL PAID IN ON SHARES OF BENEFICIAL INTEREST $16,277,218
(shares authorized-unlimited)(Note 4)
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME 7,313
NET UNREALIZED APPRECIATION OF INVESTMENTS AS OF 326,219
END OF YEAR (Note 6)
Total Net Assets $16,610,750
NUMBER OF SHARES OF BENEFICIAL INTEREST 1,023,378
OUTSTANDING (Note 4)
NET ASSET VALUE PER SHARE (Net assets divided by 16.23
shares outstanding at year-end)
See notes to financial statements.
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1994
Muhlenkamp
Fund
Principal Value
Amount
or Shares
COMMON STOCK - 81.0%
Aerospace - 4.0%
* BE Aerospace, Inc. 7,000 51,625
Martin Marietta Corp. 10,000 443,750
Thiokol 6,000 167,250
Airlines - 2.6%
Air Express International Corp. 21,562 431,240
Autos - 4.5%
Ford Motor Company 14,000 390,250
Superior Industries 13,180 350,918
Building - 3.9%
ABM, Inc. 10,000 232,500
* Instrument Systems 30,000 251,250
Ryland Group 8,000 120,000
* Strober Organization 10,000 35,000
Banks - 5.8%
Chemical Bank 12,000 430,500
Comerica, Inc. 2,850 69,469
Integra Financial 8,426 346,519
J.P. Morgan 2,000 112,250
Brokerage - 4.1%
A. G. Edwards 12,500 225,000
Merrill Lynch 4,000 143,000
Morgan Stanley, Inc. 2,000 118,000
Salomon, Inc. 5,000 187,500
Capital Goods - 7.6%
General Electric 9,000 459,000
* Idex Corp. 5,000 211,250
Kysor Industrial 15,000 331,875
Scotsman Industries, Inc. 15,000 256,875
Conglomerate - 1.6%
GATX Corp. 6,000 264,000
Chemicals - 1.6%
* Methanex Corp. 20,000 260,000
Consumer Durables - .4%
* Nycor, Inc. 25,000 68,750
Electronics - 1.5%
Intel Corp. 4,000 255,500
Finance - 7.2%
Ambac, Inc. 8,700 324,075
Fidelity National Financial 20,918 227,483
Green Tree Financial Corp. 21,400 650,025
Closed End Investment Funds - 2.8%
* Gemini II Capital Shares 26,000 458,250
Furniture - 3.6%
Stanley Furniture, Inc. 25,000 250,000
* Winsloew Furniture 54,600 341,250
Sub-Total $8,464,354
* Non - Income Producing
See Notes to Financial Statements
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1994
(Continued)
Muhlenkamp Fund
Principal Value
Amount
or Shares
BALANCE BROUGHT FORWARD $8,464,354
Insurance - 12.3%
American Bankers Insurance Group 8,000 192,000
Conseco, Inc. 12,000 519,000
Frontier Insurance 16,751 366,428
Integon Corp. 15,000 196,875
Providian Corp. 3,600 111,150
Sun America 10,000 362,500
Vesta 10,000 285,000
Med Services - 2.9%
* Medrad, Inc. 8,000 116,000
U.S. Healthcare 9,000 371,250
Packaging & Container - .6%
Clarcor 5,000 106,250
Rails - .9%
Burlington Northern Industries, 3,000 144,375
Inc.
Savings and Loan - 2.9%
Federal National Mortgage Assoc. 6,100 444,537
Golden West Financial 1,200 42,300
Metals - 3.5%
Cyprus Minerals 9,000 235,125
Rouge Steel 12,000 346,500
Tobacco - 3.1%
Philip Morris 8,860 509,450
Technology - .3%
* PLC Systems 10,000 49,375
Trucks - 2.7%
Cummins Engine 10,000 452,500
Transportation - .6%
Sea Containers CL A 8,000 106,000
Total Common Stocks (Cost $13,420,969
$13,225,409)
BONDS & NOTES - 5.9%
* General Motors Acceptance 2,300,000 412,850
Corporation -0%, deferred
debentures, due 2015
Treasury Bonds - 7.25% due 2016 400,000 369,625
* U.S. Treasury, stripped interest 800,000 189,500
- - 0%, due 2013
Total Bonds & Notes (Cost 971,975
$841,282)
FIXED INCOME - 12.8%
Trust for U.S. Treasury 2,120,213 2,120,213
Obligations (Cost $2,120,213)
Total Bonds & Notes and 3,092,188
Fixed Income
PREFERRED STOCK - .3%
Pioneer Financial - exchangeable 2,000 46,500
Total Preferred Stock (Cost 46,500
$46,433)
Total (Cost $16,233,437) $16,559,657
* Non - Income Producing
See notes to financial statements.
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
INVESTMENT INCOME
Interest $87,247
Dividends 260,198
Total Investment Income 347,445
EXPENSES
Investment advisor (Note 3) $156,3
40
Administrative 34,365
Registrations and filing 33,341
Custodian 17,638
Auditor 8,830
Legal 2,500
Commission Credits (Note 7) (8,830) 244,184
Net Investment Income 103,261
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain on investments 392,326
(Note 6)
Change in unrealized depreciation (1,702,528)
in value of investments for the
year (Note 6)
Net Loss on Investments (1,310,202)
Net Decrease in Net Assets ($1,206,941)
Resulting from
Operations
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
1994 1993
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net Investment Income $103,261 $58,530
Net realized gain (loss) on 392,326 (114,162)
investments (Note 6)
Unrealized (depreciation) (1,702,528) 1,161,043
appreciation in value of investments
Net (Decrease) Increase in Net (1,206,941) 1,105,411)
Assets Resulting From
Operations
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income (94,651) (58,601)
Net realized gain from investments (252,117) -------
Return of capital ------- (4,549)
-----
(346,768) (63,150)
CAPITAL SHARE TRANSACTIONS
Net proceeds from sale of 414,315 7,258,915 6,827,000
shares in 1994 and 395,172 shares
in 1993 (Note 4)
Net asset value of 21,392 shares in 346,768 63,150
1994 and 3,536 shares in
1993 issued to shareholders on
reinvestment of dividends
(Note 5)
Cost of 87,761 shares in 1994 and (1,498,829) (591,020)
33,584 shares in 1993,
redeemed (Note 4)
Net Increase in Net Assets 6,106,854 6,299,130
Resulting from Capital
Share Transactions
Total Increase in Net Assets 4,553,145 7,341,391
NET ASSETS
Beginning of year 12,057,605 4,716,214
End of year (including undistributed $16,610,750 $12,057,605
investment income of $7,313
in 1994 and undistributed net realized
losses of $141,506 in 1993)
See notes to financial statements.
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
SELECTED PER SHARE DATE AND RATIOS
FOR THE YEARS ENDED DECEMBER 31,1989 THROUGH 1994
1994 1993 1992 1991 1990 1989
NET ASSET VALUE, BEGINNING $17.86 $15.20 $13.25 $9.21 $11.04 $10.04
OF PERIOD
Income from Investment
Operations:
Net Investment Income 0.11 0.12 0.20 0.13 0.19 0.39
(1)
Net gains or (losses) (1.39) 2.63 1.89 4.05 (1.83) 0.86
on securities
Total from (1.28) 2.75 2.09 4.18 (1.64) 1.25
Investment
Operations
Less Distributions:
Dividends (from (0.10) (0.08) (0.14) (0.11) (0.19) (0.25)
investment income)
Distributions (from (0.25) - - - - -
capital gains)
Return of capital ------- (0.01) ------ (0.03) ------ ------
- --- --- --
Total (0.35) (0.09) (0.14) (0.14) (0.19) (0.25
Distributions
NET ASSET VALUE, END OF $16.23 $17.86 $15.20 $13.25 $9.21 $11.04
PERIOD
Total Return (7.20)% 18.10% 15.80% 45.40% (14.80 12.50%
)%
Net Assets, End of Period $16,610 $12,057 $4,716 $1,926 $1,183 $1,104
,750 ,605 ,214 ,529 ,190 ,134
Ratio of Expenses to 1.57% 1.30% 1.41% 1.71% 1.76% 1.54%
Average Net Assets
Ratio of Net Income to 0.70% 0.70% 1.44% 1.17% 1.95% 3.05%
Average Net Assets
Portfolio Turnover Rate 25.60% 14.10% 20.10% 52.50% 47.47% 34.46%
Average Commission Rate .0471 .0586 .0704 .1304 .0163 .0834
Paid (dollar per share)
(1) Computed on weighted average number of shares
outstanding during the year.
(2) During the years ended December 31, 1992 through 1994,
the Fund utilized commission credits of $4,420, $5,590 and
$8,830, respectively, to pay certain expenses of the Fund.
The total returns for the Fund would have been 15.6%, 18.0%
and (7.2)% for the years ended December 31, 1992 through
1994, respectively, without the credits.
See notes to financial statements.
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
NOTE 1 - ORGANIZATION
The Wexford Trust (the Trust) was organized as a
Massachusetts Business Trust on September 21, 1987 and
operations commenced on November 1, 1988. The Trust is
registered under the Investment Company Act of 1940, as
amended, as a diversified open-end mutual fund. The
Muhlenkamp Fund (the Fund) is a series of the Wexford Trust
and is currently the only fund in the Trust.
The Fund is exposed to credit risk on the amount invested in
marketable securities. The maximum amount of loss the Fund
would incur is limited to the amount recorded in the 1994
financial statements. The Fund does not hold any type of
collateral on the marketable securities. This exposure to
credit risk is customary for all entities which have
invested in financial instruments.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of significant accounting policies applied by
management in the preparation of the accompanying financial
statements follows.
Investment valuations - Each stock and bond is valued at the
latest sales price thereof on the last business day of the
fiscal period as reported by the securities exchange on
which the issued is traded. If no sale is reported, the
security is valued at the last quoted bid price.
Investment transactions and related investment income -
Investment transactions are accounted for on the trade date
(date the order to buy or sell is executed). Dividend
income is recorded on the ex-dividend date. Interest income
is recorded on the accrual basis. The Fund uses the
specific identification method in computing gain or loss on
the sale of investment securities.
Federal income taxes - It is the Fund's policy to comply
with the requirements of the Internal Revenue Code that are
applicable to regulated investment companies and to
distribute substantially all of its taxable income to its
shareholders. Therefore, no federal income tax provision is
required.
Dividends and distributions to shareholders of beneficial
interest - Dividends and distributions are recorded by the
Trust on the record date.
NOTE 3 - INVESTMENT MANAGEMENT AND OTHER TRANSACTIONS WITH
AFFILIATES
Muhlenkamp and Co., Inc., an affiliate of which an officer-
stockholder is a trustee of the Trust, receives a fee for
investment management. The fee is computed and accrued
daily based on the net asset value at the close of business
and is equal to 1% per annum. The fee totaled $156,340 for
the year ended December 31, 1994. The investment advisory
agreement provides for the reimbursement of expenses
excluding auditor fees, fidelity bonding, and brokerage
commissions until the net assets of the Muhlenkamp Fund (the
Fund) equal or exceed $1,000,000. Since the Fund's net
assets exceed this amount, the advisor is permitted to
charge the fund for some or all of its routine
administration costs which totaled approximately $65,206 for
the year ended December 31, 1994. An expense reimbursement
of $65,206 was requested and paid for the year ended
December 31,1994.
Certain affiliated persons held in the aggregate 22,741
shares with a net asset value of $368,644 in the Muhlenkamp
Fund at December 31, 1994. In addition, the Muhlenkamp &
Co., Inc. Pension & Trust Fund held 10,751 shares with a
net asset value of $174,289 at December 31, 1994.
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
NOTE 4 - CAPITAL SHARE TRANSACTIONS
The Declaration of Trust permits the Trustees to issue an
unlimited number of full and fractional shares of beneficial
interest with a par value of $.001 per share. Transactions
in capital stock were as follows:
Shares
1994 1993
Shares outstanding, beginning of 675,34 310,2
period 2 18
Shares sold 414,31 395,1
5 72
Shares issued to shareholders in 21,392 3,536
reinvestment of dividend
Shares redeemed (87,67 (33,5
1) 84)
Shares outstanding, end of period 1,023, 675,3
378 42
NOTE 5 - DIVIDENDS AND DISTRIBUTIONS
On December 31, 1994, the Trustees declared and recorded a
distribution of $.35 per outstanding share.
NOTE 6 - INVESTMENT TRANSACTIONS
Purchases and sales of investment securities were $8,959,651
and $3,617,010, respectively in 1994.
The components of the net realized gain on investments of
$392,326 recognized during the year ended December 31, 1994
are as follows:
Proceeds from sale of $4,009,336
securities
Cost of Securities Sold (3,617,010)
Net Realized Gain $392,326
The components of the net unrealized appreciation in value
of the investments held at December 31, 1994 are as follows:
Unrealized Appreciation of $1,330,320
investments
Unrealized Depreciation of (1,004,101)
investments
Net Unrealized $326,219
Appreciation of Investments
The unrealized depreciation of securities recognized during
the year ended December 31, 1994 is $1,702,528.
NOTE 7 - DIRECTED BUSINESS ARRANGEMENT
The Fund has a directed business arrangement with Capital
Institution Services, Inc. (CIS). Upon the purchase and/or
sale of investment securities, the Fund pays a brokerage
commission to CIS. These commission payments generate
nonrefundable cumulative credits which are available to pay
certain expenses of the Fund.
The following is an analysis of commission credits
generated, utilized and available to pay future expenses of
the Fund:
Amount
Balance, January 1, 1994 $1,297
Commission Credits 10,007
generated during 1994
Commission Credits
utilized:
Professional fees (8,830)
Balance, December 31, $2,474
1994
With Without
Commiss Commiss
ion ion
Credits Credits
Annual Fund Operating Expenses (as a
percentage of average net assets)
Investment Advisor's Fee 1.0% 1.0%
12b-1 Fees ----- -----
Other Operating Expenses 0.5 0.6
Total Fund Expenses 1.5% 1.6%
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Trustees of the
Wexford Trust (Comprised of the Muhlenkamp Fund)
We have audited the accompanying statement of assets and
liabilities of the Wexford Trust (comprised of the
Muhlenkamp Fund), including the portfolio of investments as
of December 31, 1994, and the related statement of
operations for the year then ended, the statements of
changes in net assets for each of the two years in the
period then ended, and the selected per share data and
ratios for each of the six years in the period then ended.
These financial statements and selected per share data and
ratios are the responsibility of the Trustees. Our
responsibility is to express an opinion on these financial
statements and selected per share data and ratios based on
our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan
and perform the audit to obtain reasonable assurance about
whether the financial statements and selected per share data
and ratios 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, 1994 by correspondence with the custodian. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and selected per
share data and ratios referred to above present fairly, in
all material respects the financial position of the Wexford
Trust as of December 31, 1994, the results of its operations
for the year then ended, the changes in net assets for each
of the two years in the period then ended, and the selected
per share data and ratios for each of the six years in the
period then ended, in conformity with generally accepted
accounting principles.
Schneider, Downs & Co., Inc.
Pittsburgh, Pennsylvania
January 20, 1995
