A No - Load Fund
MUHLENKAMP FUND
PO Box 598, Wexford PA 15090-0598 * (724) 935-5520 or
(800)860-3863
e-mail:[email protected]
Annual Report
December 31, 1997
Dear Shareholder:
The Trustees and Management of the Muhlenkamp Fund are
pleased to present this annual report of your fund.
As of December 31, 1997, the Net Asset Value (NAV) of your fund
was $36.55 after posting a $.13 dividend. The 1997 total return
for the fund was 33.3%.
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
1995 32.9 37.1
1996 30.0 22.9
1997 33.3 33.4
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
Another Good Year - Selectively
1997 has been a good year, it's been a very good year. This fact
alone has some people nervous.
The three sentences above are a repeat of our opening comments
one and two years ago. During 1997, the US economy continued to
grow at a healthy rate and inflation continued to decline. This
combination resulted in lower long-term interest rates and
continued gains in consumer confidence, corporate profits, and
stock prices. It has also resulted in confusion among Keynesian
economists, some of whom still maintain that it can't happen.
Domestically, we see nothing that would reverse these current
trends, although we do expect each of them to moderate. Given no
major outside influences, the U.S. economy is likely to continue
to grow, but at a slower rate. Inflation is likely to continue a
gradual decline and corporate profits are likely to continue to
grow, but at a slower rate. Each of these trends are positive
for stock prices, which are currently at fair values.
But the real difference is that the Far East has the potential to
become a major influence. Since our one page note of October 30,
1997, South Korea has joined the list of Asian countries
suffering currency devaluation and liquidity crises. The
economies of Thailand, Malaysia, Indonesia, and the Philippines
are too small to have a major impact on the world economy. But
the edition of South Korea to the list, along with the
vulnerability of Japan, creates a potential risk to
the world and American economies. The good news is that South Korea
is taking actions that are both appropriate and substantive. This
doesn't necessarily mean that they will solve their problems,
but they've made a very good start. Japan, on the other hand,
is moving very timidly, although any movement is in the right
direction.
The impact of these changes on the U.S. economy is
just beginning. 1998 will be a year in which some
companies will do well and others will do poorly.
Some may actually be helped by the problems in Asia;
others will be hurt. We are spending our time and
effort trying to separate the gainers from the losers
and will invest our money (yours & ours) accordingly.
Ronald H. Muhlenkamp
President
February 1998
Investment Custodian Auditors
Advisor
Muhlenkamp & Star Bank Deloitte & Touche LLP
Co., Inc. 2500 One PPG Place
12300 Perry 425 Walnut Pittsburgh, PA 15222-5401
Highway Street
Wexford, PA Cincinnati, OH
15090 45201-1118
(412)935-5520 (513)632-4603
Transfer Agent
American Data Services
24 West Carver
Street
Huntington, NY
11743
(516)385-9580
INDEPENDENT AUDITORS' REPORT
To the Trustees of the Wexford Trust and
Shareholders of the Muhlenkamp Fund:
We have audited the accompanying statement of assets and
liabilities, including the portfolio of investments, of the
Muhlenkamp Fund (the "Fund") (a portfolio of the Wexford Trust), as
of December 31, 1997, and the related statements of operations,
changes in net assets and selected per share data and ratios for
the year then ended. These financial statements and selected per
share data and ratios are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these
financial statements and selected per share data and ratios based
on our audit. The statement of changes for the year ended December
31, 1996 and selected per share data and ratios for the six years
ended December 31, 1996 were audited by other auditors, whose
report thereon dated January 23, 1997, expressed an unqualified
opinion.
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 the
securities owned as of December 31, 1997, by correspondence with
the custodian and brokers; where replies were not received, we
performed other auditing procedures. 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 1997 financial statements and selected per
share data and ratios referred to above present fairly, in all
material respects, the financial position of the Muhlenkamp Fund as
of December 31, 1997, the results of its operations, the changes in
its net assets and its selected per share data and ratios for the
year then ended in conformity with generally accepted accounting
principles.
/S/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
February 6, 1998
THE MUHLENKAMP FUND
(A Portfolio of the Wexford Trust)
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
ASSETS
INVESTMENTS, AT VALUE
(Identified cost $89,873,991) 124,600,340
RECEIVABLES:
Dividends 99,953
Interest 57,854
Subscriptions 847,950
Total receivables 1,005,757
PREPAID EXPENSES 2,297
0
Total assets 125,608,394
LIABILITIES
ACCOUNTS PAYABLE:
Advisor fee 15,370
Accrued expenses 17,735
Payable for investments purchased 12,770
Dividends payable 15,658
Redemptions payable 86,223
Total liabilities 147,756
NET ASSETS 125,460,638
NET ASSETS CONSIST OF:
CAPITAL PAID IN ON SHARES OF BENEFICIAL INTEREST
(shares authorized-unlimited) 90,857,672
UNDISTRIBUTED NET INVESTMENT INCOME 4,231
ACCUMULATED NET REALIZED LOSS ON INVESTMENTS -127,614
NET UNREALIZED APPRECIATION OF INVESTMENTS 34,726,349
NET ASSETS 125,460,638
NUMBER OF SHARES OF BENEFICIAL INTEREST
OUTSTANDING 3,432,778
NET ASSET VALUE PER SHARE 36.55
See notes to financial statements.
THE MUHLENKAMP FUND
(A Portfolio of the Wexford Trust)
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
Number of
Shares or
Principal
Name of Issuer and Title of Issue Amount Value
COMMON STOCK - 87.0%
Aerospace - 3.2%
* BE Aerospace, Inc. 97,000 $ 2,594,750
Lockheed Martin 14,000 1,379,000
3,973,750
Airlines - 3.9%
Air Express International Corp. 32,343 986,462
* AMR Corp. 30,000 3,855,000
4,841,462
Autos - 8.1%
Ford Motor Company 82,000 3,992,375
* National RV Holdings 122,500 4,027,188
Superior Industries 53,180 1,425,881
* Dana Corp. 15,000 712,500
10,157,944
Buildings - 2.9%
Armstrong World 23,000 1,719,250
* Griffon Corp. 121,000 1,769,625
Int'l. Comfort Prod. 10,000 83,750
3,572,625
Banks - 7.2%
Chase Manhattan 12,000 1,314,000
Citicorp 20,000 2,528,750
Mellon Bank Corp. 70,000 4,243,750
National City Corp. 16,852 1,108,019
9,194,519
Brokerage - 5.7%
A.G. Edwards 18,750 745,313
Merrill Lynch 42,000 3,063,375
Southwest Securities, Inc. 130,200 3,352,650
7,161,338
Capital Goods - 8.6%
Aeroequip - Vickers Inc. 69,700 $ 3,419,656
Commercial Intertech 112,300 2,330,225
General Electric 18,000 1,320,750
Graco, Inc. 60,550 2,259,272
Idex Corp. 31,250 1,089,844
Scotsman Industries, Inc. 15,000 366,563
10,786,310
Diversified Operations - 2.5%
Loews Corp. 30,000 3,183,750
Electronics - 1.1%
Computer Associates International, Inc. 15,000 793,125
Intel Corp. 8,000 562,000
1,355,125
Finance - 6.7%
Fidelity National Financial 58,530 1,821,746
* Friedman Billings Ramsey 5,000 89,688
Morgan Stanley Dean Witter Discover & Co 36,500 2,158,063
Green Tree Financial 163,800 4,289,513
8,359,010
Healthcare - 0.5%
* Lincare Holdings, Inc. 10,000 570,000
Furniture - 3.8%
* Stanley Furniture, Inc. 115,400 3,216,775
* Winsloew Furniture 109,600 1,589,200
4,805,975
Homebuilding - 0.4%
* NVR, Inc. 22,000 $ 481,250
Industrial Equipment - 5.5%
AGCO Corp. 110,000 3,217,500
Deere & Co. 40,000 2,332,500
JLG Industries, Inc. 100,000 1,412,500
6,962,500
Insurance - 12.8%
American Bankers Insurance Group 16,000 735,000
Conseco, Inc. 87,255 3,964,649
Frontier Insurance 108,852 2,489,990
Reliance Group Holdings Inc. 155,000 2,189,375
Sun America 82,500 3,526,875
Vesta 52,500 3,117,188
16,023,077
Metals - 1.5%
* RMI Titanium Co. 79,500 1,590,000
Matthews Int'l. Corp. 8,000 352,000
1,942,000
Oils, Natural Gas and Energy Related - 1.2%
* Global Marine, Inc. 60,000 1,470,000
Rails - 1.7%
Burlington Northern Ind., Inc. 23,000 2,137,563
Savings and Loan - 3.4%
Federal National Mortgage Assoc. 74,400 4,245,450
Technology - 2.5%
Helix Corp. 140,000 $ 2,730,000
* Scios Inc. 40,000 400,000
3,130,000
Tobacco - 3.3%
Philip Morris 90,580 4,104,406
Transportation - 0.5%
* Coach USA 20,000 670,000
Total Common Stocks (cost $76,161,538) 109,128,054
BONDS AND NOTES - 8.8%
General Motors Acceptance Corp.
-0-%, due 2013 5,000,000 1,554,935
U.S. Treasury Stripped Interest
-0-%, due 2013 800,000 323,920
U.S. Treasury Stripped Interest
-0-%, due 2024 26,900,000 5,409,429
U.S. Treasury
7.25%, due 2016 3,250,000 3,700,941
Total Bonds and Notes (cost $9,229,392) 10,989,225
REGISTERED INVESTMENT COMPANY - 3.6%
Star Trust for U.S. Treasury (cost $4,483,06 4,483,061 4,483,061
Total (identified and tax cost of $89,873,991) $ 124,600,340
* Non-income producing
Investments are shown as a percentage of net assets at December 31, 1997
See notes to financial statements.
THE MUHLENKAMP FUND
(A Portfolio of the Wexford Trust)
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
INVESTMENT INCOME:
Interest $573,423
Dividends 937,021
Total investment income 1,510,444
EXPENSES:
Investment advisor 810,448
Transfer agent fees 108,422
Printing 56,570
Postage 52,277
Registrations and filing 41,799
Audit 35,005
Fund accounting 27,041
Custodian 23,100
Miscellaneous 8,711
Legal 3,173
Fidelity Bond 2,929
Total expenses 1,169,475
Fees paid indirectly (Note 7) -47,425
Reimbursed expenses -40,596
0
Net expenses 1,081,454
NET INVESTMENT INCOME 428,990
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments 33,958
Change in unrealized appreciation in value of investment 20,691,181
NET GAIN ON INVESTMENTS 20,725,139
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $21,154,129
See notes to financial statements.
THE MUHLENKAMP FUND
(A Portfolio of the Wexford Trust)
SELECTED PER SHARE DATA AND RATIOS
FOR THE YEARS ENDED DECEMBER 31, 1997 TO 1991
1997 1996 1995
NET ASSET VALUE, BEGINNING OF YEAR 27.52 21.26 16.23
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (1) 0.18 0.14 0.21
Net gains or (losses) on securities 8.98 6.23 5.14
Total from investment operations 9.16 6.37 5.35
LESS DISTRIBUTIONS:
Dividends from net investment income -0.13 -0.11 -0.21
Distributions from net realized gain on investments 0.00 0.00 -0.11
Return of capital 0.00 0.00 0.00
Total distributions -0.13 -0.11 -0.32
NET ASSET VALUE, END OF YEAR 36.55 27.52 21.26
TOTAL RETURN (2) 33.25% 29.96% 32.90%
NET ASSETS, END OF YEAR (000 omitted) 125,461 42,039 23,571
RATIO OF TOTAL EXPENSES TO AVERAGE NET ASSETS (2) 1.44% 1.56% 1.40%
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS (2) 1.33% 1.54% 1.35%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .53% 0.58% 1.10%
PORTFOLIO TURNOVER RATE 13.89% 16.90% 22.7%
AVERAGE COMMISSION RATE PAID (DOLLAR PER SHARE) 0.0205 0.0382 0.0442
(1) Computed on weighted average number of shares outstanding during the year.
(2) During the years ended December 31, 1992 through 1997, the Fund utilized
the commission credits of $4,240, $5,950, $8,830, $11,000, $5,000 and $47,425,
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%
for the years ended December 31, 1992 through 1997, respectively,
without the credits.
See notes to financial statements.
THE MUHLENKAMP FUND
(A Portfolio of the Wexford Trust)
SELECTED PER SHARE DATA AND RATIOS
FOR THE YEARS ENDED DECEMBER 31, 1997 TO 1991
1994 1993 1992 1991
NET ASSET VALUE, BEGINNING OF YEAR 17.86 15.20 13.25 9.21
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (1) 0.11 0.12 0.20 0.13
Net gains or (losses) on securities -1.39 2.63 1.89 4.05
Total from investment operations -1.28 2.75 2.09 4.18
LESS DISTRIBUTIONS:
Dividends from net investment income -0.10 -0.08 -0.14 -0.11
Distributions from net realized gain on investment-0.25 0.00
Return of capital 0.00 -0.01 0.00 -0.03
Total distributions -0.35 -0.09 -0.14 -0.14
NET ASSET VALUE, END OF YEAR 16.23 17.86 15.20 13.25
TOTAL RETURN (2) -7.20% 18.10% 15.80% 45.40%
NET ASSETS, END OF YEAR 16,611 12,051 4,716 1,963
RATIO OF TOTAL EXPENSES TO AVERAGE NET ASSETS (2) 1.57% 1.30% 1.41% 1.71%
RATIO OF NET EXPENSES TO AVERAGE NET ASSETS (2) 1.52% 1.23% 1.28% 0.00%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSET 0.70% 0.70% 1.44% 1.17%
PORTFOLIO TURNOVER RATE 25.60% 14.10% 20.10% 52.50%
AVERAGE COMMISSION RATE PAID (DOLLAR PER SHARE) 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 1997, the Fund utilized
the commission credits of $4,240, $5,950, $8,830, $11,000, $5,000 and $47,425,
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%
for the years ended December 31, 1992 through 1997, respectively,
without the credits.
See notes to financial statements.
THE MUHLENKAMP FUND
(A Portfolio of the Wexford Trust)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
1997 1996
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income 428,990 176,766
Net realized gain (loss) on investments 33,958 -161,572
Unrealized appreciation in value of investments 20,691,18 8,332,484
Net increase in net assets resulting from operation 21,154,12 8,347,678
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income -435,040 -166,485
Net realized gain from investments 0 -2,653
-435,040 -169,138
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 76,279,48 12,340,76
Net asset value of shares issued to shareholders on
reinvestment of dividends 419,401 171,811
Cost of shares redeemed -13,996,2 -2,223,49
Net increase in net assets resulting from capital share
transactions 62,702,59 10,289,08
Total increase in net assets 83,421,68 18,467,62
NET ASSETS:
Beginning of year 42,038,95 23,571,33
End of year (including undistributed investment income of
$4,231 in 1997 and $10,281 in 1996) 125,460,6 42,038,95
See notes to financial statements.
THE MUHLENKAMP FUND
(A PORTFOLIO OF THE WEXFORD TRUST)
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1997
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 $174,485 for the year ended December 31, 1997. An
expense reimbursement of $174,485 was requested for the year
ended December 31, 1997. The reimbursement consists of the
following:
Printing 58,463
Registration and filing 52,342
Postage 56,548
Legal and accounting 3,172
Insurance 3,960
Total 174,485
Certain affiliated persons held in the aggregate 35,456 shares
with a net asset value of $1,295,923 in the Fund at December 31,
1997. In addition, the Muhlenkamp & Co., Inc. Pension & Trust
Fund held 15,675 shares with a net asset value of $572,913 at
December 31, 1997.
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 years ended December 31, 1997 and 1996
were as follows:
1997 1996
Shares Amount Shares Amount
Shares outstanding,
beginning of year 1,527,718 28,155,079 1,108,774 17,865,994
Shares sold 2,311,675 76,279,489 509,156 12,340,767
Shares issued to shareholders
in reinvestment of divi 11,928 419,401 6,243 171,811
Shares redeemed -418,543 -13,996,297 -96,455 -2,223,493
Shares outstanding,
end of year 3,432,778 90,857,672 1,527,718 28,155,079
5. CAPITAL LOSS CARRYFORWARD
As of December 31, 1997, 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 $73,468,213 and $10,175,295, respectively,
in 1997.
The components of the net unrealized appreciation in the value
of the investments held at December 31, 1997 for both financial
reporting and tax purposes are as follows:
Gross unrealized appreciation of investments 36,226,386
Gross unrealized depreciation of investments -1,500,037
Net unrealized appreciation of investments 34,726,349
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, 1997 3,138
Commission credits generated in 1997 41,835
Commission credits utilized:
Auditor fees -11,360
Transfer agent fees -29,147
Fund accounting -6,918 -47,425
Balance, December 31, 1997 -2,452
Annual fund operating expenses, as a percentage of average net
assets, were 1.44% without the commission credits. Utilizing
commission credits, operating expenses as a percentage of
average net assets were 1.40%.
Net expenses, after reimbursement of duplicate management fees
and utilization of commission credits, as a percentage of
average net assets were 1.33%.
* * * * * *
INDEPENDENT AUDITORS' REPORT
To the Trustees of the Wexford Trust and
Shareholders of the Muhlenkamp Fund:
In planning and performing our audit of the financial statements of
the Muhlenkamp Fund (the "Fund") for the year ended December 31,
1997 (on which we have issued our report dated February 6, 1998),
we considered its internal control, including control activities
for safeguarding securities, in order to determine our auditing
procedures for the purpose of expressing our opinion on the
financial statements and to comply with the requirements of Form N-
SAR, not to provide assurance on the Fund's internal control.
The management of the Fund is responsible for establishing and
maintaining internal control. In fulfilling this responsibility,
estimates and judgments by management are required to assess the
expected benefits and related costs of controls. Generally,
controls that are relevant to an audit pertain to the entity's
objective of preparing financial statements for external purposes
that are fairly presented in conformity with generally accepted
accounting principles. Those controls include the safeguarding of
assets against unauthorized acquisition, use, or disposition.
Because of inherent limitations in any internal control, errors or
fraud may occur and not be detected. Also, projection of any
evaluation of internal control to future periods is subject to the
risk that it may become inadequate because of changes in conditions
or that the effectiveness of the design and operation may
deteriorate.
Our consideration of the Fund's internal control would not
necessarily disclose all matters in the internal control that might
be material weaknesses under standards established by the American
Institute of Certified Public Accountants. A material weakness is
a condition in which the design or operation of the specific
internal control element does not reduce to a relatively low level
of risk that errors or fraud in amounts that would be material in
relation to the financial statements being audited may occur and
not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted
no matters involving the Fund's internal control and its operation,
including controls for safeguarding securities, that we consider to
be material weaknesses as defined above as of December 31, 1997.
This report is intended solely for the information and use of
management, the Trustees of the Wexford Trust and the Securities
and Exchange Commission.
/S/ Deloitte & Touche LLP
February 6, 1998
