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Previous: INSURED MUNICIPALS INCOME TRUST 47TH INSURED MULT SERIES, 497J, 1997-07-30 |
Next: CONTOUR MEDICAL INC, 10-Q/A, 1997-07-30 |
A No - Load Fund
MUHLENKAMP FUND
PO Box 598, Wexford PA 15090-0598 * (412)935-5520 or
(800)860-3863
e-mail:[email protected]
Web: http://muhlenkamp.com
Semi - Annual Report
June 30, 1997
Dear Shareholder:
The Trustees and Management of the Muhlenkamp Fund are
pleased to present this semi - annual report of your fund.
Chart goes here. This is a line chart comparing the
performance of the Muhlenkamp Fund with the S&P 500 since
December 31, 1992. On December 31, 1991 the Fund and the
S&P are each assigned an index value of 100. At the end of
each subsequent year (and six month period ending June 30,
1997) 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
12/31/91 100 100
12/31/92 115 108
12/31/93 136 118
12/31/94 126 120
12/31/95 168 164
12/31/96 218 202
06/30/97 255 243
After providing the correction I asked for on March 25, 1997,
the markets went on an upward tear with
the DJIA and the S&P 500 gaining 17% for the quarter ending in
June. Several positive things
happened:
GDP growth was stronger than expected.
Inflation was less than expected.
Corporate profits were stronger than expected.
These factors allowed:
Long-term interest rates to decline and Treasury Bond
prices to gain 5%.
Investors to anticipate (correctly) that the Fed would
not raise short-term rates in July.
Stock prices to soar.
Normally, the next step is for the market to digest its recent
upward move. It can do this either by moving sideways or by
declining. The actual direction is likely to depend on
quarterly earnings which are now being reported. Individual
stock prices are likely to reflect individual company earnings.
Meanwhile, the ongoing challenge to the economic theory that
"growth causes inflation", which we've been relating to you for
over a year, remains front and center. We wrote earlier that
the two economists, whose arguments frame the opposing theories
for us, had each extended their time frames but had not yet
changed their conclusions. The first apparent change in
conclusion occurred on July 3. The chief economist at Morgan
Stanley, Steve Roach, lowered his inflation estimates for 1997
from 3.2% to 2.5% and for 1998 from 4% to 3.2%, respectively.
He also lowered his targets for long-term interest rates by 1/2%.
Mr. Roach has been adamant that GDP growth greater than a 2 1/2%
annual rate must result in higher
inflation and interest rates. This is the first time (since
his predictions in early 1996) that he has lowered
his inflation projection. He did this despite GDP growth
greater than his expectations. Since 1997 is half
over, he really had no choice. On July 7th, he explained his
rationale for the change. He believes that his inflation
projection was early. That the time lag between growth and
inflation is longer than he had expected. Hence, no
fundamental change in conclusion. The debate continues!
Where do we stand? We continue to believe that the long-term
and intermediate-term fundamentals
are quite favorable. To wit, inflation is not getting worse
and the economy is expanding. We believe that,
on average, stocks are fairly priced. Therefore, prices in the
near term are likely to be quite volatile with the market
focusing on individual companies and stocks. There is also the
possibility of a rapid 10% market move - up or down. Frankly,
since we like the long-term, we would like to see another 10%
down move similar to the one in April. But, partly because it
happened recently, we don't expect a repeat. (That would be
too easy -- No, I cannot explain this comment in rational
terms.) Our experience shows us that big moves (greater than
10%) have big reasons. We don't see a reason for a down market
move greater than 10%. We repeat - We do expect high
volatility.
We think the key to success in this market is finding good
companies at good prices. We are spending our time and effort
in this endeavor.
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (Unaudited)
ASSETS
INVESTMENTS, AT MARKET VALUE (Identified cost
$54,462,058) $76,562,107
RECEIVABLES
Subscriptions receivable 801,556
Dividends 67,430
Interest 35,154
77,466,247
PREPAID INSURANCE 3,400
PREPAID EXPENSES 4,968
Total Assets
77,474,615
LIABILITIES
ACCOUNTS PAYABLE
Redemptions Payable 384,047
Total Liabilities 384,047
Total Net Assets
$77,090,568
NET ASSETS
CAPITAL PAID IN ON SHARES OF BENEFICIAL INTEREST
(shares authorized - unlimited) (Note 4)
$54,047,637
ACCUMULATED UNDISTRIBUTED INVESTMENT INCOME $193,595
ACCUMULATED UNDISTRIBUTED NET CAPITAL GAIN 749,287
NET UNREALIZED APPRECIATION OF INVESTMENTS AS 22,100,049
OF JUNE 30, 1997 (Note 6)
Total Net Assets
$77,090,568
NUMBER OF SHARES OF BENEFICIAL INTEREST OUTSTANDING 2,396,794
(Note 4)
NET ASSET VALUE PER SHARE (Net assets divided by
shares
outstanding at year-end) $32.16
See notes to financial statements.
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997 (Unaudited)
Principal
Amount or Market
Shares Value
COMMON STOCK - 84.98%
Aerospace - 2.59%
* BE Aerospace, Inc. 17,000 $537,625
Lockheed Martin 14,000 1,449,875
1,987,500
Airlines - 3.54%
Air Express International Corp. 21,562 857,090
AMR 20,000 1,850,000
2,707,090
Autos - 6.29%
Ford Motor Company 62,000 2,340,500
* National RV Holdings 102,500 1,601,560
Superior Industries 13,180 879,274
4,821,334
Building Products - 3.73%
Armstrong World Industries 28,000 2,054,500
* Griffon Corp. 58,400 799,350
2,853,850
Banks - 7.22%
Chase Manhattan Corp. 12,000 1,164,750
Citicorp 10,000 1,205,625
Mellon Bank Corp. 70,000 3,158,750
5,529,125
Brokerage - 5.73%
A.G. Edwards 12,500 534,375
Merrill Lynch 32,000 1,908,000
Soutwest Sec Inc. 100,000 1,950,000
4,392,375
Capital Goods - 7.88%
Aeroquip-Vickers Inc 24,000 1,134,000
General Electric 18,000 1,176,750
Graco, Inc. 60,550 1,824,069
Idex Corp. 31,250 1,031,250
Owens Corning Co 20,000 862,500
6,028,569
Conglomerate - 0.56%
Scotsman Ind., Inc. 15,000 427,500
Diversified Operations - 3.92%
LOEWS CORP 30,000 3,003,750
Electronics - 2.02%
Intel Corp. 7,000 992,688
Computer Associates International 10,000 556,875
1,549,563
Finance - 6.51%
Fidelity National Financial 13,210 222,902
Green Tree Financial Corp. 88,800 3,163,500
National City Corp. 16,852 884,730
Morgan Stanley Dean Witter Discover, Co. 16,500 710,531
4,981,663
Furniture - 3.84%
* Roberds, Inc. 5,000 26,250
* Stanley Furniture, Inc. 83,400 1,928,625
* Winsloew Furniture 89,600 980,000
2,934,875
Homebuilding - .44%
NVR Inc. 22,000 335,500
Industruial Equipment - 6.63
Deere & Co. 20,000 1,097,500
JLG Industries 160,000 2,180,000
AGCO 50,000 1,796,875
5,074,375
Insurance - 15.93%
American Bankers Insurance Group 8,000 506,000
Conseco, Inc. 87,255 3,228,435
Frontier Insurance 29,426 1,905,334
Reliance Group Holdings Inc. 135,000 1,603,125
Sun America 55,000 2,681,250
Vesta 52,500 2,270,625
12,194,769
Metals - .38%
Matthews Int'l Corp. 8,000 292,000
Rails - 2.70%
Burlington Northern Industries, Inc. 23,000 2,067,122
Savings and Loan - 1.39%
Federal National Mortgage Assoc. 24,400 1,064,450
Technology - 0.17%
* Scios Inc. 20,000 127,500
Tobacco - 3.51%
Philip Morris 60,580 2,688,238
Total Common Stocks (Cost 65,061,148
$43,311,389)
BONDS AND NOTES - 4.63%
General Motors Acceptance Corporation - 0%, 2,300,000 642,563
deferred debentures, due 2015
U.S. Treasury, stripped interest - 0%, due 800,000 274,694
2013
U.S. Treasury, stripped interest - 0%, due 16,900,000 2,625,246
2024
Total Bonds and Notes (Cost 3,542,503
$1,580,845)
CASH AND CASH EQUIVALENTS - 10.39%
Star Treasury 7,958,456 7,958,456
Total (Cost $54,462,058) $76,562,107
* Non-Income Producing
See notes to financial statements.
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDING JUNE 30, 1997 (Unaudited)
INVESTMENT INCOME
Interest $225,976
Dividends 346,456
Total Investment Income 572,432
EXPENSES
Investment advisor (Note 3) $286,040
Transfer agent fees 24,234
Printing 16,591
Registrations and filing 18,060
Postage 11,625
Custodian 5,903
Audit 19,842
Fund accounting 8,772
Legal 2,705
Misc 6,133
Insurance 590
Total Expenses 400,495
Fees Paid Indirectly (Note 7) (11,360) 389,135
Net Investment Income 183,297
REALIZED AND UNREALIZED (LOSS) GAIN ON
INVESTMENTS
Net realized gain on investments (Note 6) 910,859
Change in unrealized appreciation in value of 8,064,880
investments for the six month period ending
June 30, 1997 (Note 6)
Net Gain on Investments 8,975,739
Net Increase in Net Assets Resulting $9,159,036
From Operations
See notes to financial statements.
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDING DECEMPER AND THE PERIOD
ENDING JUNE 30, 1997 (Unaudited)
June 30 1996
1997
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income 183,297 $176,766
Net realized (loss) gain on investments (Note 910,859 (161,572)
6)
Unrealized appreciation in value of 8,064,880 8,332,484
investments (Note 6)
Net Increase in Net Assets Resulting 9,159,036 8,347,678
From Operations
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income 0 (166,485)
Net realized gain from investments 0 (2,653)
(169,138)
CAPITAL SHARE TRANSACTIONS
Net proceeds from sale of 1,035,901 shares in 30,880,644 12,340,767
six month period ending 6/30/97 and 509,156 in
1996 (Note 4)
Net asset value of 0 shares in 1997 and 6,243
shares in 1996 issued to shareholders on
reinvestment
of dividends (Note 5) 0 171,811
Cost of 166,825 shares in 1997 and 96,455
shares
in 1996, redeemed (Note 4) (4,988,068)
(2,223,493)
Net Increase in Net Assets Resulting
From
Capital Share Transactions 25,892,576 10,289,085
Total Increase in Net Assets 35,051,612 18,467,625
NET ASSETS
Beginning of year 42,038,956 23,571,331
End of period (including undistributed
investment income of
$183,297 and undistributed net realized
gain of $910,859
in the six month period ending 6/30/97 and
undistributed net realized gain of $10,281 and
undistributed investment loss of $161,572 in
1996)
77,090,568
$42,038,956
See notes to financial statements.
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP
FUND)
SELECTED PER SHARE DATA AND
RATIOS
FOR THE YEARS ENDED DECEMBER
31, 1992 THROUGH SIX MONTH
PERIOD ENDING JUNE 30, 1997
Six
month
period
June 1996 1995 1994 1993 1992
30, 97
NET ASSET VALUE, BEGINNING OF $27.52 $21.26 $16.23$17.86$15.20 $13.25
YEAR
Income from Investment
Operations:
Net investment income (1) 0.10 0.14 0.21 0.11 0.12 0.20
Net gains or (losses) on 4.54 6.23 5.14 (1.39)2.63 1.89
securities
Total From 4.64 6.37 5.35 (1.28)2.75 2.09
Investment Operations
Less Distributions:
Dividends (from investment - (0.11) (0.21)(0.10)(0.08) (0.14)
income)
Distributions (from - - (0.11)(0.25)- -
capital gains)
Return of capital - - - - (0.01) -
Total Distributions 0 (0.11) (0.32)(0.35)(0.09) (0.14)
NET ASSET VALUE, END OF PERIOD $32.16 $27.52 $21.26$16.23$17.86 $15.20
Total Return 16.86% 29.96% 32.9% (7.20)%18.10% 15.80%
Net Assets, End of Period $77,091 $23,571 $12,057
($000) $42,038 $16,610 $4,716
Ratio of Total Expenses to 1.38% 1.56% 1.4% 1.57% 1.30% 1.41%
Average Net Assets
Ratio of Net Investment Income 0.64% 0.58% 1.10% 0.70% 0.70% 1.44%
to Average Net Assets
Portfolio Turnover Rate 12.50% 16.90% 22.70%25.60%14.10% 20.10%
Average Commission Rate Paid 0.0368 0.0382 .0442 .0471 .0586 .0704
(dollar per share)
(1) Computed on weighted
average number of shares
outstanding during the year.
(2) During the years ended
December 31, 1992 through
1996, and the sem-annual
period ending 6/30/97, the
Fund utilized commission
credits of $4,420, $5,950,
$8,830, $11,000, $5,000, and
$11,360 respectively, to pay
certain expenses of the Fund.
The total return for the Fund
would have been 15.6%, 18.0%,
(7.2)%, 32.9%, 29.9%, and
16.84% for the years ended
December 31, 1992 through the
semi-annual period ending
6/30/97, respectively, without
the credits.
See notes to financial
statements.
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. The Muhlenkamp Fund (the Fund) is a series of the
Wexford Trust and is currently the only fund in the Trust.
The Fund operates as a diversified open-end mutual fund
that continuously offers its shares for sale to the public.
The Fund will manage its assets to seek a maximum total return
to its shareholders, primarily through a combination of
interest and dividends and capital appreciation by holding a
diversified list of publicly traded stocks. The Fund may
acquire and hold fixed-income or debt investments as market
conditions warrant and when, in the opinion of its advisor, it
is deemed desirable or necessary in order to attempt to achieve
its investment objective.
The primary focus of the Fund is long-term and the
investment options diverse. This allows for greater
flexibility in the daily management of fund assets. However,
with flexibility also comes the risk that assets will be
invested in various classes of securities at the wrong time and
price.
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 and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reported
period. Actual results could differ from those estimates.
The Fund is exposed to market 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 1996
financial statements. The Fund does not hold any type of
collateral on the marketable securities. This exposure to
market 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.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 daily on the yield to maturity basis. Discounts and
premiums on securities are amortized over the life of the
respective securities. 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 & 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 $286,040 for the period
ending June 30, 1997. 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
$82,928 for the period ending June 30, 1997. An expense
reimbursement of $82,928 was requested for the period ending
June 30, 1997. The reimbursement consists of the following:
Certain affiliated persons held in the aggregate 30,971
shares with a net asset value of $996,027 in the Muhlenkamp
Fund on June 30, 1997 In addition, the Muhlenkamp & Co., Inc.
Pension & Trust Fund held 15,273 shares with a net asset value
of $491,180 on June 30, 1997.
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:
NOTE 5 - DIVIDENDS AND DISTRIBUTIONS
On December 30, 1996, the Trustees declared, recorded, and
paid a dividend of $.11 per outstanding share.
NOTE 6 - INVESTMENT TRANSACTIONS
Purchases and sales of investment securities, excluding
short-term securities, were $25,503,373 and $3,610,568,
respectively in the six month period ending June 30, 1997.
Purchases and sales of U.S. Government obligations were
$1,572,700 and -0-, respectively in 1996.
The components of the net realized gain on investments of
$910,859 recognized during the period ending June 30, 1997 are
as follows:
The components of the net unrealized appreciation in value
of the investments held at June 30, 1997 are as follows:
The unrealized appreciation of securities during the
period ending June 30, 1997 is $8,064,880.
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, such as performance measurement,
pricing information, custodian and record keeping services,
legal, accounting and other administrative costs. The
commission credits redeemed during the year were utilized by
the Fund to pay accounting fees due the Independent Accounting
Firm and administrative expenses.
NOTE 7 - DIRECTED BUSINESS ARRANGEMENT (Continued)
The following is an analysis of commissions credits
generated, utilized and available to pay future expenses of the
Fund:
The following is an analysis of fund expenses with and
without commission credits:
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