|
|
|
|
|
|
|
|
|
|
|
|
|
Dear Shareholder:
The Trustees and Management of the Muhlenkamp Fund are
pleased to present this Semiannual report of your fund.
As of June 30, 1998, the Net Asset Value (NAV) of your fund
was $42.59.
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
1995 32.9 37.1
1996 30.0 22.9
1997 33.3 33.4
6 mos 1998 16.5 16.8
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, 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
12/31/93 198 154
12/31/94 184 157
12/31/95 244 215
12/31/96 317 264
12/31/97 423 352
6/30/98 493 411
LETTER TO THE SHAREHOLDERS
The Second Quarter of 1998 witnessed a continuing drama, but
few real surprises. In May and June, the U. S. stock market
digested the strong upmove of February and April. As it did
so, the economic effects of the Asian problems began to be
visible in the U.S. economy. These effects are most visible
in import-export data, but are also starting to be visible
in areas such as plans for hiring and capital spending.
We are also getting a better reading on which individual
U.S. firms are most affected by the Asian problem, as well
as which may be largely immune. Individual stock prices
have begun to reflect these differences, a process which we
expect to accelerate with the current reporting of second
quarter earnings. As a result, stock prices are almost
certain to remain quite volatile and large companies, which
appear unaffected, may well receive a continuing "security
blanket" premium.
Meanwhile, you can add Russia to the list of basket-case
economies, which are now seeking help from the I.M.F. (and
ultimately, the U.S. taxpayer). Our judgement concerning
Russia is similar to the smaller southeast Asian economies.
It is obviously a negative but not sufficient to reverse the
strong economic trends in the U.S. and western Europe.
Still, the effects are cumulative and every bit hurts.
The linchpin in all of this remains Japan. Japan continues
to do very little toward solving its problems. We expect it
to continue to do very little. While our expectation
remains that all of this will slow the U.S. economy and
squeeze corporate profits, there remains the risk that an
additional problem or two could coalesce all of this into a
worldwide recession. Obviously, we will monitor this
closely.
Barring such an outcome, we expect the U.S. stock market to
remain quite volatile, with a focus on individual stocks,
some of which will do well and some of which will do poorly.
THE MUHLENKAMP FUND
(A PORTFOLIO OF THE WEXFORD TRUST)
Financial Statements for the
Six Month period Ended June 30, 1998
THE MUHLENKAMP FUND
(A PORTFOLIO OF THE WEXFORD TRUST)
THE MUHLENKAMP FUND
(A Portfolio of the Wexford Trust)
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1998
ASSETS
INVESTMENTS, AT VALUE
(Identified cost $147,630,123) $
206,483,377
RECEIVABLES:
Dividends
101,181
Interest
72,399
Subscriptions
790,334
Total receivables
963,914
PREPAID EXPENSES
78
Total assets
207,447,369
LIABILITIES
ACCOUNTS PAYABLE:
Advisor fee
7,591
Redemptions
117,833
Accrued expenses
38,991
Total liabilities
164,415
NET ASSETS $
207,282,954
NET ASSETS CONSIST OF:
CAPITAL PAID IN ON SHARES OF BENEFICIAL
INTEREST
(shares authorized-unlimited) $
148,250,400
UNDISTRIBUTED NET INVESTMENT INCOME
219,478
ACCUMULATED NET REALIZED LOSS ON INVESTMENTS
(40,178)
NET UNREALIZED APPRECIATION OF INVESTMENTS
58,853,254
NET ASSETS $
207,282,954
NUMBER OF SHARES OF BENEFICIAL INTEREST
OUTSTANDING
4,867,259
NET ASSET VALUE PER SHARE $
42.59
See notes to financial statements.
THE MUHLENKAMP FUND
(A Portfolio of the Wexford Trust)
PORTFOLIO OF INVESTMENTS
June 30, 1998
Number of
Shares or
Principal
Name of Issuer and Title of Issue Amount Value
COMMON STOCK - 81.89%
Aerospace - 3.07%
* BE Aerospace, Inc. 167,000 $ 4,863,875
Lockheed Martin 14,000 1,482,250
6,346,125
Airlines - 4.44%
Air Express International Corp. 32,343 865,175
* AMR Corp. 100,000 8,325,000
9,190,175
Autos - 7.45%
Ford Motor Company 92,000 5,428,000
* National RV Holdings 135,000 6,091,875
Superior Industries 53,180 1,499,012
* Dana Corp. 45,000 2,407,500
15,426,387
Buildings - 1.8%
Armstrong World 23,000 1,549,625
* Griffon Corp. 161,000 2,062,813
* Int'l. Comfort Prod. 10,000 121,250
3,733,688
Banks - 5.25%
Chase Manhattan 24,000 1,812,000
Citicorp 20,000 2,985,000
Mellon Bank Corp. 70,000 4,873,750
National City Corp. 10,000 1,196,492
10,867,242
Brokerage - 5.53%
A.G. Edwards 18,750 800,391
Merrill Lynch 62,000 5,719,500
Southwest Securities, Inc. 218,700 4,920,750
11,440,641
Capital Goods - 6.77%
Aeroequip - Vickers Inc. 69,700 $ 4,068,738
Commercial Intertech 175,900 3,188,188
General Electric 18,000 1,638,000
Graco, Inc. 105,825 3,690,647
Idex Corp. 41,250 1,423,125
14,008,697
Diversified Operations - 1.26%
Loews Corp. 30,000 2,613,750
Electronics - 0.55%
Computer Associates Internation 15,000 833,438
Intel Corp. 4,000 296,500
1,129,938
Finance - 12.04%
Fidelity National Financial 88,529 3,524,561
* Friedman Billings Ramsey 5,000 72,188
Morgan Stanley Dean Witter Dis 81,500 7,447,063
Green Tree Financial 280,800 12,021,750
Associates First Capital - A 24,111 1,853,533
24,919,094
Healthcare - 0.5%
* Lincare Holdings, Inc. 20,000 841,250
Furniture - 4.93%
* Stanley Furniture, Inc. 285,500 7,244,563
* Winsloew Furniture 109,600 2,959,200
10,203,763
Homebuilding - 3.42%
American Woodmark 40,000 $ 1,095,000
*Crossman Communities 140,000 $ 4,252,500
* NVR, Inc. 42,000 $ 1,724,625
$ 7,072,125
Industrial Equipment - 3.48%
AGCO Corp. 149,000 3,063,813
Deere & Co. 40,000 2,115,000
JLG Industries, Inc. 100,000 2,025,000
7,203,813
Insurance - 8.36%
Conseco, Inc. 87,255 4,079,171
Frontier Insurance 108,737 2,453,383
Reliance Group Holdings Inc. 220,000 3,850,000
Sun America 82,500 4,738,594
Vesta 102,500 2,184,531
17,305,679
Metals - 2.60%
* RMI Titanium Co. 179,200 4,076,800
Matthews Int'l. Corp. 16,000 393,000
Alleghney Teledyne, Inc. 40,000 915,000
5,384,800
Oils, Natural Gas and Energy Related - 4.37%
Calpine Corp 160,000 3,230,000
* Global Marine, Inc. 130,000 2,429,375
Nabors Industries 60,000 1,188,750
Omni Energy Services 127,500 1,737,188
R&B Falcon Corp 20,000 452,500
9,037,813
Rails - 2.04%
Burlington Northern Ind., Inc. 43,000 4,222,063
Savings and Loan - 2.18%
Federal National Mortgage Asso 74,400 4,519,800
Technology - 0.60%
* Scios Inc. 140,000 1,242,500
Tobacco - 0.67%
Philip Morris 35,280 1,389,150
Transportation - 0.66%
* Coach USA 30,000 1,368,750
Total Common Stocks (cost $114,056,741) 169,467,240
BONDS AND NOTES - 12.87%
General Motors Acceptance Corp.
-0-%, due 2013 $ 5,990,000 1,952,740
U.S. Treasury Stripped Interest
-0-%, due 2013 800,000 349,176
U.S. Treasury Stripped Interest
-0-%, due 2024 30,000,000 7,036,290
U.S. Treasury
7.25%, due 2016 3,250,000 3,809,611
U.S. Treasury 26,900,000 6,063,179
-0-%, due 2024
U.S. Treasury 30,000,000 7,428,060
-0-%, due 2023
Total Bonds and Notes (cost $23,196,302) 26,639,056
REGISTERED INVESTMENT COMPANY - 5.01%
Star Trust for U.S. Treasury (cost $ 10,377,080 10,377,080
Total (identified and tax cost of $147,63 $ 206,483,377
* Non-income producing
Investments are shown as a percentage of net assets at June 30, 1998
See notes to financial statements.
THE MUHLENKAMP FUND
(A Portfolio of the Wexford Trust)
STATEMENT OF OPERATIONS
FOR THE SIX MONTH PERIOD ENDING JUNE 30, 1998
INVESTMENT INCOME:
Interest $
506,379
Dividends
783,151
Total investment income
1,289,530
EXPENSES:
Investment advisor
834,583
Transfer agent fees
74,944
Printing
25,581
Postage
23,651
Registrations and filing
21,383
Audit
22,873
Fund accounting
13,570
Custodian
14,165
Miscellaneous
5,358
Legal
2,017
Security & Exchange Fees
20,525
Proxy vote
26,000
Fidelity Bond
2,929
Total expenses
1,087,579
Fees paid indirectly (Note 7)
(13,300)
Net expenses
1,074,279
NET INVESTMENT INCOME
215,251
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments
87,394
Change in unrealized appreciation in value
of investments 24,126,905
NET GAIN ON INVESTMENTS
24,214,299
NET INCREASE IN NET ASSETS RESULTING FROM $
OPERATIONS 24,429,550
See notes to financial statements.
<TABLE>
THE MUHLENKAMP FUND
(A Portfolio of the Wexford Trust)
SELECTED PER SHARE DATA AND RATIOS
FOR THE YEARS ENDED DECEMBER 31,
1997 TO 1991, AND THE SIX MONTH
PERIOD ENDING JUNE 30, 1998
<C> <C> <C> <C> <C> <C> <C> <C>
6 month
period
ending 1997 1996 1995 1994 1993 1992 1991
6/30/98
NET ASSET VALUE, BEGINNING OF YEAR $ $ $ $ $ $ $ $
36.55 27.52 21.26 16.23 17.86 15.20 13.25 9.21
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (1)
D 0.04 0.18 0.14 0.21 0.11 0.12 0.20 0.13
Net gains or (losses) on
Dsecurities 6.00 8.98 6.23 5.14 (1.39) 2.63 1.89 4.05
Total from investment
D operations 6.04 9.16 6.37 5.35 (1.28) 2.75 2.09 4.18
LESS DISTRIBUTIONS:
Dividends from net investment -
D income (0.13) (0.11) (0.21) (0.10) (0.08) (0.14) (0.11)
Distributions from net realized -
gain on investments - - (0.11) (0.25) - - -
Return of capital -
- - - - (0.01) - (0.03)
Total distributions -
D (0.13) (0.11) (0.32) (0.35) (0.09) (0.14) (0.14)
NET ASSET VALUE, END OF PERIOD $ $ $ $ $ $ $ $
D 42.59 36.55 27.52 21.26 16.23 17.86 15.20 13.25
D TOTAL RETURN (2)(3) 16.53 % 33.28 % 29.96 32.90 (7.20)% 18.10 15.80 45.40
% % % % %
NET ASSETS, END OF YEAR $ $ $ $ $ $ $ $
D 207,283 125,461 42,039 23,571 16,611 12,058 4,7161,963
D RATIO OF TOTAL EXPENSES TO AVERAGE 1.30 % 1.44 % 1.56 % 1.40 % 1.57 % 1.30 1.41 1.71
NET ASSETS (2) % % %
D RATIO OF NET EXPENSES TO AVERAGE 1.28 % 1.33 % 1.54 % 1.35 % 1.52 % 1.23 1.28
NET ASSETS (2) % % -
D RATIO OF NET INVESTMENT INCOME TO 0.52 % 0.53 % 0.58 % 1.10 % 0.70 % 0.70 1.44 1.17
AVERAGE NET ASSETS (3) % % %
D PORTFOLIO TURNOVER RATE (3) 13.85 % 13.89 % 16.90 22.70 25.60 14.10 20.10 52.50
% % % % % %
AVERAGE COMMISSION RATE PAID $ $ $ $ $ $ $ $
D (DOLLAR PER SHARE) 0.0465 0.0205 0.0382 0.0442 0.0471 0.0586 0.0704 0.1304
(1) Computed on weighted average
number of shares outstanding
during the year.
(2) During the years ended
December 31, 1992 through the six
month period nding June 30, 1998,
the Fund utilized the commission
credits of $4,240, $5,950, $8,830,
$11,000, $5,000 and $47,425,
13,300 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 33.2%, 16.53% for the
years ended December 31, 1992
through 1997 and the six month
period ending June 30, 1998,
respectively, without the credits.
(3) Annualized except for Total
Return. If Total Return were
annualized it would be 36.13%
See notes to financial statements.
</TABLE>
THE MUHLENKAMP FUND
(A Portfolio of the Wexford Trust)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTH PERIOD ENDED JUNE 30,
1998 AND THE YEAR ENDED DECEMBER 31, 1997
Six Month
Period
Ending 1997
6/30/98
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ $
215,251 428,990
Net realized gain (loss) on investments
87,394 33,958
Unrealized appreciation in value of
investments 24,126,905 20,691,181
Net increase in net assets resulting
from operations 24,429,550 21,154,129
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income -
(435,040)
Net realized gain from investments -
-
-
(435,040)
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares
69,849,328 76,279,489
Net asset value of shares issued to
shareholders on
reinvestment of dividends -
419,401
Cost of shares redeemed
(12,456,562) (13,996,297
)
Net increase in net assets resulting
from capital share
transactions
57,392,766 62,702,593
Total increase in net assets
81,822,316 83,421,682
NET ASSETS:
Beginning of year
125,460,638 42,038,956
End of Period (including undistributed
investment income of
$219,478 for the six month period ended $ $
June 30, 1998 207,282,954 125,460,638
and $4,231 in 1997)
See notes to financial statements.
THE MUHLENKAMP FUND
(A PORTFOLIO OF THE WEXFORD TRUST)
NOTES TO FINANCIAL STATEMENTS
SIX MONTH PERIOD ENDED JUNE 30, 1998
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 portfolio 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.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of significant accounting policies applied by
management in the preparation of the accompanying financial
statements follows.
a. Investment Valuations - Stocks and Bonds are valued at the
latest sales price on the last business day of the fiscal
period as reported by the securities exchange on which the
issue is traded. If no sale is reported, the security is
valued at the last quoted bid price.
b. Investment Transactions and Related Investment Income -
Investment transactions are accounted for on the trade date.
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.
c. 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.
d. Dividends and Distributions to Shareholders of Beneficial
Interest - Dividends and distributions are recorded by the
Fund on the record date.
e. 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.
3. INVESTMENT MANAGEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Muhlenkamp & Co., Inc., an affiliate of which an officer-
stockbroker 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 advisor is permitted to charge the
Fund for some or all of its routine administration costs, which
totaled $46,742 for the six-month period ending June 30, 1998.
An expense reimbursement of $46,742 was requested for the six-
month period ending June 30, 1998. The reimbursement consists
of the following:
Printing $
15,092
Registration and filings
17,640
Postage
12,412
Legal and accounting
885
Insurance
713
Total $
46,742
Certain affiliated persons held in the aggregate 40,641 shares
with a net asset value of $1,730,900 in the Fund on June 30,
1998. In addition, the Muhlenkamp & Co., Inc. Pension & Trust
Fund held 15,675 shares with a net asset value of $667,589 at
June30, 1998.
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 for the six-month period ending June 30, 1998 and
the year ended December 31, 1997 were as follows:
June 30, 1997
1998
Shares Amount Shares Amount
Shares outstanding,
beginning of year $ $
3,432,778 90,857,672 1,527,718 28,155,079
Shares sold
1,744,691 69,849,290 2,311,675 76,279,489
Shares issued to
shareholders
in reinvestment
of dividend 11,928 419,401
Shares redeemed
(310,210) (12,456,56 (418,543) (13,996,29
2) 7)
Shares outstanding,
end of year $
4,867,259 148,250,40 3,432,778 90,857,672
0
5. CAPITAL LOSS CARRYFORWARD
As of June 30, 1998, the Fund had available for federal income
tax purposes a capital loss carryforward of approximately
$127,600, which expires December 31, 2004.
6. INVESTMENT TRANSACTIONS
Purchases and sales of investment securities, excluding short-
term securities were $60,479,370 and $8,873,661, respectively,
during the six-month period ending June 30, 1998.
The components of the net unrealized appreciation in the value
of the investments held June 30, 1998 for both financial
reporting and tax purposes are as follows:
Gross unrealized appreciation of $
investments 62,888,722
Gross unrealized depreciation of
investments (4,035,468
)
Net unrealized appreciation of investments $
58,853,254
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 measurements,
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 to the Independent Auditors,
transfer agent fees and fund accounting.
The following is an analysis of commissions credits generated,
utilized and available to pay future expenses of the Fund:
Balance, January 1, 1998 $
(2,452)
Commission credits generated during thesix- 33,756
month period ended 6/30/98
Commission credits utilized:
Auditor fees $
(13,300)
Balance, June 30, 1998 $
31,304
Annual fund operating expenses, as a percentage of average net
assets, were 1.30% without the commission credits. Utilizing
commission credits, operating expenses as a percentage of
average net assets were 1.28%.
SPECIAL MEETING OF SHAREHOLDERS
MUHLENKAMP FUND
HELD ON
MAY 28, 1998
On May 28, 1998 a Special meeting of the Shareholders of the
Muhlenkamp Fund (A Series of the Wexford Trust), was conducted at
The Chadwick in Ballroom C, 1 Wexford Square, Wexford, PA. All
Trustees were present at the meeting. A quorum of 2,504,282.05
shares from a total of 3,979,925 was present at the meeting for
the transaction of business.
The matters acted upon at the meeting were:
(1) Election of Trustees;
(2) One proposed change to your Fund's fundamental investment
restriction permitting it to purchase or sell options on
securities, which would not alter your Fund's investment
objectives;
(2) Any other business properly brought before the meeting.
1. ELECTION OF TRUSTEES
The nominees for trustee were Alfred E. Kraft and Terrence
McElligott. The nominees were replacing Richard R. Rice and
Edgar C. Belle who were retiring from the board after having
served it since the inception of the Fund. Ronald H. Muhlenkamp
is currently a trustee who was elected by the shareholders of the
Fund on November 18, 1988. He was not up for election.
During the meeting Mr. Kraft and Mr. McElligott were elected as
the new trustees of the Fund by a majority of the shares
outstanding. The results are tabulated below.
Shares % of % of Shares % of %
Voted Voted Total Withheld Voted Total
NOMINEE FOR FOR FOR Authority Withhel Withhe
d ld
Alfred E. 2,436,238. 97.28% 61.21% 68,044.00 2.72% 1.71%
Kraft 05
Terrence 2,442,251. 97.52% 61.36% 62,031.00 2.48% 1.56%
McElligott 05
2. CHANGE TO COMPANY'S INVESTMENT RESTRICTIONS
The Trustees recommended that the shareholders approve a change
to the Fund's fundamental investment restrictions to allow the
Fund to purchase and sell put and call options on stock or bonds.
The Trustees believe that the premiums offered on some option
contracts are attractive relative to interest rates on bonds and
other investments. This change would not alter your Fund's
investment objectives.
A majority of the shares present at the meeting voted in favor of
allowing the Fund to change it's fundamental investment
restriction and allow it to purchase and sell put and call
options on stock or bonds. The results of this vote are
tabulated below.
Shares % of
Voted Voted
For 1,804,786.05 72.07%
Against 261,324.00 10.44%
Abstain 68,711.00 2.74%
Broker Non- 369,461.00 14.75%
Vote
2,504,282.05 100.00%
3. OTHER BUSINESS
There was no other business brought before the meeting, which
required a vote.
During the Special Meeting Ronald Muhlenkamp thanked Mr. Rice and
Mr. Belle for their years of dedicated service to the
shareholders of the Muhlenkamp Fund.
Questions were entertained and then the meeting was adjourned.
* * * * * *
|
|