<PAGE>
Comstock Partners Funds, Inc.
993 Lenox Drive, Suite 106
Lawrenceville, NJ 08648
107/634/607
503/502 A 9710
COMSTOCK PARTNERS
FUNDS, INC.
------------------------------------------------
COMSTOCK PARTNERS
STRATEGY FUND
COMSTOCK PARTNERS
CAPITAL VALUE FUND
SEMI-ANNUAL REPORT
OCTOBER 31, 1997
<PAGE>
DEAR FELLOW SHAREHOLDER:
For the six months ended October 31, 1997, the Comstock Partners Strategy Fund's
Class O, A, and C shares posted total returns of -4.61%, -4.74%, and -4.99%,
respectively, and the Comstock Partners Capital Value Fund's Class A, B, C, and
R shares posted total returns of -14.85%, -15.03%, -15.16%, and -14.73%,
respectively, based upon net asset value per share*, while the Standard & Poor's
500 Composite Stock Price Index (S&P 500) rose 15.17% and the Lehman Brothers
Government/Corporate Bond Index rose 7.42%.
The main reason we substantially lagged the indexes over the last year was due
to our belief that the stock market was close to reaching a climax followed by a
sustained bear market. We continue to believe that investing in U.S. equities at
present valuation levels is very risky. In part, this conclusion is based on our
belief that the over-investment and over-capacity which is currently making
headlines in Asia is very deflationary. Historically, a circular environment of
deflation often started with over-investment followed by large debt burdens and
pricing inflexibility. This, in turn, has in the past forced countries competing
in the export market to devalue their currencies. This is called competitive
devaluation.
Although this deflationary process is initially beneficial for consumers, we
believe that the process, if it occurs, will have a negative effect on corporate
profits worldwide. Yet the strength of the current stock market, we believe, is
derived, in part, from the positive expectation of corporate profits.
Although it is impossible to predict the future, in 1997 we became more
confident that the market's rise may be very near its end and substantially
increased the Funds' short positions by buying more puts on the S&P 500 Index
and, for the Capital Value Fund, selling short S&P 500 futures. At this time the
Funds are maintaining near maximum positions in puts.
Since October 31, 1997, consistent with our belief that a deflationary
environment exists, each of the Funds has increased its position in 30-year U.S.
Treasury bonds to 20% and the gold shares position of each of the Funds has been
sharply reduced. During the six month period the gold shares actually were
stable in value, but have declined in price after October 31. In an effort to
diversify the Funds' non-dollar exposure, investments were made in a number of
foreign currencies. Presently, we have about 14% of assets of each of the Funds
in debt securities denominated in German Deutschemarks, Swiss Francs and New
Zealand dollars. In general, these investments have had little relative effect
on the Funds' returns.
In summary, the Funds' positions have currently become more focused to benefit
from a U.S. equity market decline. In general, we believe that the Funds are
also positioned to benefit if the dollar declines, gold shares rise, and
interest rates fall. Please note that, consistent with the Funds' prospectus and
our investment approach, we have the flexibility to change these positions when
we believe conditions warrant.
Sincerely,
Comstock Partners, Inc.
Investment Policy Committee
Lawrenceville, New Jersey
November 14, 1997
<PAGE>
* PERFORMANCE INFORMATION:
Total return assumes the reinvestment of dividends and excludes the effect of
sales loads.
The Lehman Brothers Government/Corporate Bond Index is a widely accepted
unmanaged index of bond market performance which includes fixed rate issues
rated investment grade or higher; all returns are market value weighted
inclusive of accrued interest. The Standard & Poor's 500 Composite Stock Price
Index is a widely accepted unmanaged index of stock market performance which
reflects the reinvestment of income dividends and, where applicable, capital
gain distributions.
Investors should note that there can be no assurance that the markets will
perform according to the investment adviser's expectations or that the
adviser's investment approach will achieve its objectives.
- --------------------------------------------------------------------------------
You may now obtain current information about Comstock Partners Strategy
Fund and Comstock Partners Capital Value Fund and our investment strategy
through the Funds' internet web site
www.comstockfunds.com
and a telephone information line 201-332-4422. Please save this
information for future reference.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Comstock Partners Funds, Inc.
Strategy Fund Schedule of Investments (Unaudited) As of October 31, 1997
<TABLE>
<CAPTION>
S&P MOODY'S SHARES HELD/ VALUE
RATING RATING FACE AMOUNT ISSUE (NOTE 1A)
<S> <C> <C> <C> <C> <C> <C>
BONDS
U.S. Government United States Treasury Notes:
Obligations --
57.2% AAA Aaa $ 11,395,000 8.875% due 11/15/1997 (a) $ 11,410,324
AAA Aaa 50,385,000 8.875% due 11/15/1998 (a) 52,022,512
------------
63,432,836
------------
United States Treasury Bonds:
AAA Aaa 14,400,000 6.375% due 8/15/2027 14,823,000
------------
Foreign Government
Obligations --
14.0% UNR Aaa DEM 5,500,000 Bundesrepublik Deutschland 9.000% due 10/20/2000 3,564,694
UNR Aa1 CHF 9,000,000 Kingdom of Denmark 4.250% due 9/30/1999 6,660,348
AAA Aaa NZD 4,400,000 New Zealand Government 8.000% due 7/15/1998 2,747,731
BBB+ UNR ZAR 33,000,000 Republic of South Africa 12.500% due 12/21/2006 6,146,151
------------
19,118,924
------------
Corporate
Convertible Bonds
- -- 3.7% UNR UNR $ 4,250,000 Ashanti Capital, Ltd. 5.500% due 3/15/2003 3,527,500
UNR UNR 2,000,000 TVX Gold, Inc. 5.000% due 3/28/2002 1,600,000
------------
5,127,500
------------
Foreign Corporate
Obligations --
2.0% UNR UNR CAD 5,500,000 William Resources, Inc. 8.000% due 1/23/2002 (b) 2,695,408
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN BONDS (cost $107,678,222) -- 76.9% 105,197,668
- ---------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS
Country Funds --
2.4% 127,000 Fleming Russia Securities Fund (c) 2,857,500
77,600 Lazard Vietnam Fund, Ltd. (c) 155,200
250,000 Vietnam Enterprise Investment Fund, Ltd.,
Class C (b) (c) 256,250
------------
3,268,950
------------
Mining -- 5.0% 20,468 Avgold Ltd., ADR l 139,438
615,668 Bema Gold Corporation (c) 1,962,442
74,900 East Rand Gold & Uranium Company, Ltd., ADR l 97,370
234,100 Free State Consolidated Gold Mines, Ltd., ADR l 1,199,763
24,000 Greenstone Resources, Ltd. (c) 192,000
182,800 Harmony Gold Mining, Ltd., ADR l(c) 651,225
206,100 Kloof Gold Mining, Ltd., ADR l 901,688
218,074 Randfontein Estates Gold Mining Company
Witwatersrand, Ltd., ADR l 392,533
265,000 Vista Gold Corp. (c) 115,937
52,100 Western Deep Levels, Ltd., ADR l 1,081,075
103,332 William Resources, Inc. 69,722
------------
6,803,193
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN COMMON STOCKS (cost $13,663,808) -- 7.4% 10,072,143
- ---------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCK
Mining -- 2.0% 55,000 Amax Gold, Inc. $3.75 convertible pfd. 2,763,750
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN PREFERRED STOCK (cost $2,758,000) -- 2.0% 2,763,750
- ---------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM
SECURITIES*
U.S. Government United States Treasury Bills:
Obligations --
2.3% AAA Aaa $ 25,000 5.000% due 11/13/1997 24,958
AAA Aaa 80,000 4.930% due 2/26/1998 78,681
AAA Aaa 3,100,000 4.950% due 2/26/1998 3,048,890
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SHORT-TERM SECURITIES (cost $3,153,805) -- 2.3% 3,152,529
- ---------------------------------------------------------------------------------------------------------------------------------
Total investments (cost $127,253,835) -- 88.6% 121,186,090
Put options purchased (cost $15,888,943) -- 9.4%+ 12,817,813
Variation margin on open futures contracts -- 0.0%++ 7,500
Unrealized appreciation on forward foreign exchange contracts -- 0.0%+++ 77,699
Other assets less liabilities -- 2.0% 2,689,486
------------
Net Assets -- 100.0% $136,778,588
------------
------------
</TABLE>
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Comstock Partners Funds, Inc. As of
Strategy Fund Schedule of Investments (Unaudited) (concluded) October 31, 1997
+ Put options purchased as of October 31, 1997 are as follows:
<TABLE>
<CAPTION>
NUMBER OF EXPIRATION DATE/ VALUE
CONTRACTS ISSUE EXERCISE PRICE (NOTE 1A)
<C> <C> <C> <C>
465 S&P 500 Index Dec. 97/600 $ 52,313
560 S&P 500 Index Dec. 97/625 66,500
910 S&P 500 Index Dec. 97/750 602,875
450 S&P 500 Index Dec. 97/800 495,000
360 S&P 500 Index Dec. 97/825 490,500
390 S&P 500 Index Mar. 98/675 282,750
300 S&P 500 Index Mar. 98/725 303,750
350 S&P 500 Index Mar. 98/950 2,275,000
425 S&P 500 Index Jun. 98/725 616,250
560 S&P 500 Index Jun. 98/800 1,512,000
450 S&P 500 Index Dec. 98/850 2,126,250
830 S&P Flex Index Dec. 97/600 72,625
50 S&P Flex Index Jun. 98/700 60,000
470 S&P Flex Index Jun. 98/800 1,222,000
880 S&P Flex Index Sep. 98/800 2,640,000
------------
Total put options purchased
(cost $15,888,943) $ 12,817,813
------------
------------
<FN>
++ Open futures contracts as of October 31, 1997 are as follows:
</TABLE>
<TABLE>
<CAPTION>
UNREALIZED
NUMBER OF VALUE APPRECIATION
CONTRACTS ISSUE EXPIRATION DATE (NOTE 1A) (DEPRECIATION)
<C> <C> <C> <C> <C> <C>
FUTURES PURCHASED: 35 S&P 500 Index Dec. 97 $ 16,170,000 $ 232,750
365 S&P 500 Index Mar. 98 170,363,750 (4,779,750)
FUTURES SOLD: 95 S&P 500 Index Dec. 97 (43,890,000) 980,000
305 S&P 500 Index Mar. 98 (142,358,750) 1,084,475
------------
$ (2,482,525)
------------
------------
<FN>
+++ Forward foreign exchange contracts as of October 31, 1997 are as follows:
</TABLE>
<TABLE>
<CAPTION>
EXPIRATION CURRENCY CURRENCY VALUE
DATE PURCHASED PROCEEDS SOLD (NOTE 1A)
<S> <C> <C> <C> <C>
November 1997 U.S. Dollar $ 6,282,328 ZAR 30,000,000 $ 6,204,629
----------- -----------
----------- -----------
<FN>
l American Depositary Receipt (ADR).
UNR Unrated by Standard & Poor's or Moody's.
* These securities are traded on a discount basis; the interest rates shown are the discount rates paid at the time of
purchase by the Fund.
(a) Partially held by the custodian in a segregated account as collateral for open futures positions.
(b) Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold
in transactions exempt from registration, normally to qualified institutional buyers. At October 31, 1997 these securities
amounted to $2,951,658 or 2.16% of net assets.
(c) Non-income producing.
CHF Swiss Franc
DEM German Deutschemark
NZD New Zealand Dollar
ZAR South African Rand
</TABLE>
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Comstock Partners Funds, Inc.
Capital Value Fund Schedule of Investments (Unaudited) As of October 31, 1997
<TABLE>
<CAPTION>
S&P MOODY'S SHARES HELD/ VALUE
RATING RATING FACE AMOUNT ISSUE (NOTE 1A)
<S> <C> <C> <C> <C> <C> <C>
BONDS
U.S. Government U.S. Treasury Bonds:
Obligations --
10.1% AAA Aaa $ 16,125,000 6.375%, 8/15/2027 $ 16,598,672
-------------
Foreign Government
Obligations --
13.5% AAA Aaa CHF 4,100,000 Republic of Austria 4.50% due 2/12/2000 3,057,622
UNR Aa1 CHF 7,000,000 Kingdom of Denmark 4.25% due 9/30/1999 5,180,270
UNR Aaa DEM 6,000,000 Bundesrepublik Deutschland 9.00% due 10/20/2000 3,888,757
AAA Aaa NZD 4,875,000 New Zealand Government 8.00% due 7/15/1998 3,044,361
37,000,000 Lesotho Highlands Water 13.00% due 9/15/2010
UNR UNR ZAR (a) 6,886,527
-------------
22,057,537
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN BONDS (cost $38,783,775) -- 23.6% 38,656,209
- ----------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS
Country Funds --
3.3% 220,765 Fleming Russia Securities Fund (b) 4,967,212
87,000 Lazard Vietnam Fund, Ltd. (b) 174,000
250,000 Vietnam Enterprise Investment Fund, Ltd.,
Class C (b)(c) 256,250
-------------
5,397,462
-------------
Mining -- 14.4% 482,426 Ashanti Goldfields, GDR* 4,763,957
29,572 Avgold Ltd., ADRl 201,459
374,000 Bema Gold Corporation (b) 1,192,125
25,500 East Rand Gold & Uranium Company, Ltd., ADRl 33,150
277,800 Free State Consolidated Gold Mines, Ltd., ADRl 1,423,725
76,700 Getchell Gold (b) 2,761,200
29,000 Greenstone Resources, Ltd. (b) 232,000
217,600 Harmony Gold Mining Ltd., ADRl (b) 775,200
241,100 Kloof Gold Mining Ltd., ADRl 1,054,812
84,955 Newmont Mining 2,973,425
201,412 Randfontein Estates Gold Mining Company,
Witwatersrand, Ltd., ADRl 362,542
1,618,100 Royal Oak Mines (b) 3,842,988
582,200 TVX Gold (b) 2,474,350
335,000 Vista Gold Corp. (b) 146,563
63,700 Western Deep Levels, Ltd., ADRl 1,321,775
115,000 William Resources, Inc. 77,595
-------------
23,636,866
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN COMMON STOCKS (cost $42,897,718) -- 17.7% 29,034,328
- ----------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM
SECURITIES**
U.S. Government United States Treasury Bills:
Obligations --
49.4% AAA Aaa $ 141,000 4.73% due 12/4/1997 140,374
AAA Aaa 293,000 4.95% due 12/11/1997 291,412
AAA Aaa 18,354,000 4.92% due 12/18/1997 (d)(e) 18,236,534
AAA Aaa 769,000 4.94% due 1/2/1998 762,371
AAA Aaa 13,950,000 4.92% due 1/8/1998 13,816,499
AAA Aaa 15,172,000 4.91% due 1/15/1998 (d) 15,011,784
AAA Aaa 32,886,000 5.02% due 1/22/1998 32,498,274
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SHORT-TERM SECURITIES (cost $80,777,494) -- 49.4% 80,757,248
- ----------------------------------------------------------------------------------------------------------------------------------
Total investments (cost $162,458,987) -- 90.7% 148,447,785
Put options purchased (cost $14,924,725) -- 8.4%+ 13,745,563
Variation margin on open futures contracts -- (0.9%)++ (1,539,000)
Unrealized appreciation on forward foreign exchange contracts -- 0.1%+++ 85,469
Other assets less liabilities -- 1.7% 2,873,516
-------------
Net Assets -- 100.0% $163,613,333
-------------
-------------
</TABLE>
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Comstock Partners Funds, Inc. As of October
Capital Value Fund Schedule of Investments (Unaudited) (concluded) 31, 1997
+ Put options purchased as of October 31, 1997 are as follows:
<TABLE>
<CAPTION>
NUMBER OF EXPIRATION DATE/ VALUE
CONTRACTS ISSUE EXERCISE PRICE (NOTE 1A)
<C> <C> <C> <C>
525 S&P 500 Index Dec. 97/600 $ 59,063
700 S&P 500 Index Dec. 97/625 83,125
1,000 S&P 500 Index Dec. 97/750 662,500
500 S&P 500 Index Dec. 97/800 550,000
450 S&P 500 Index Mar. 98/675 326,250
350 S&P 500 Index Mar. 98/725 354,375
340 S&P 500 Index Jun. 98/725 493,000
450 S&P 500 Index Jun. 98/800 1,215,000
960 S&P 500 Index Jun. 98/825 3,072,000
500 S&P 500 Index Dec. 98/850 2,362,500
980 S&P Flex Index Dec. 97/600 85,750
570 S&P Flex Index Jun. 98/800 1,482,000
1,000 S&P Flex Index Sep. 98/800 3,000,000
-------------
Total put options purchased
(cost $14,924,725) $ 13,745,563
-------------
-------------
<FN>
++ Open futures contracts as of October 31, 1997 are as follows:
</TABLE>
<TABLE>
<CAPTION>
UNREALIZED
NUMBER OF VALUE APPRECIATION
CONTRACTS ISSUE EXPIRATION DATE (NOTE 1A) (DEPRECIATION)
<C> <C> <C> <C> <C> <C>
FUTURES
SOLD: 195 S&P 500 Index Dec. 97 $(90,090,000) $ 2,360,000
835 S&P 500 Index Mar. 98 (389,736,250) 8,654,525
FUTURES
PURCHASED: 240 S&P 500 Index Dec. 97 110,880,000 (1,195,250)
645 S&P 500 Index Mar. 98 301,053,750 (7,924,375)
------------
$ 1,894,900
------------
------------
<FN>
+++ Forward foreign exchange contracts as of October 31, 1997 are as follows:
</TABLE>
<TABLE>
<CAPTION>
EXPIRATION CURRENCY CURRENCY VALUE
DATE PURCHASED PROCEEDS SOLD (NOTE 1A)
<S> <C> <C> <C> <C>
November 1997 U.S. Dollar $ 6,910,561 ZAR 33,000,000 $ 6,825,092
----------- -----------
----------- -----------
<FN>
* Global Depositary Receipt (GDR).
** These securities are traded on a discount basis; the interest rates shown are the discount rates paid at the time of
purchase by the Fund.
l American Depositary Receipt (ADR).
UNR Unrated by Standard & Poor's or Moody's.
CHF Swiss Franc
DEM German Deutschemark
NZD New Zealand Dollar
ZAR South African Rand
(a) Guaranteed by the Republic of South Africa.
(b) Non-income producing.
(c) Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold
in transactions exempt from registration, normally to qualified institutional buyers. At October 31, 1997 these securities
amounted to $256,250 or 0.16% of net assets.
(d) Partially held by the broker as collateral for open short positions.
(e) Partially held by the custodian in a segregated account as collateral for open futures positions.
</TABLE>
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Comstock Partners Funds, Inc. As of October
Capital Value Fund Statement of Securities Sold Short (Unaudited) 31, 1997
<TABLE>
<CAPTION>
VALUE
COMMON STOCKS SHARES ISSUE (NOTE 1A)
<S> <C> <C> <C>
Automotive -- 1.0% 30,500 Genuine Auto Parts $ 955,031
30,000 Pep Boys Manny Moe & Jack 755,625
-------------
1,710,656
-------------
Manufacturing --
10.4% 26,000 Advanced Micro Devices 598,000
36,200 Airgas 563,361
16,000 Amgen 788,000
10,700 Armstrong World 712,219
42,600 Cabot 1,046,362
12,000 Coca Cola 678,000
15,000 Crown Cork & Seal 675,938
12,500 Harnischfeger Industries 492,188
29,200 IMC Global 983,675
36,000 Invacare 828,000
23,500 Ionics 900,344
19,400 Kimberly-Clark 1,007,587
40,000 Komag 692,500
31,000 Micron Electronics 430,125
12,000 Micron Technology 321,750
25,700 Monsanto 1,098,675
14,500 NIKE, Cl. B 681,500
31,100 Pharmacia & UpJohn 987,425
15,200 Rockwell International 744,800
23,000 Seagate Technology 623,875
27,200 St. Jude Medical 824,500
33,400 UST 999,912
11,000 Xilinx 375,375
-------------
17,054,111
-------------
Retail -- .3% 33,400 Just For Feet 494,738
-------------
Services -- 6.1% 9,500 Altera 421,562
29,000 Andrew 672,438
18 Berkshire Hathaway 786,600
31,000 Cabletron Systems 899,000
23,500 Ceridian 917,969
31,600 Circus Circus Enterprises 703,100
26,200 Electronic Data Systems 1,013,613
27,300 Foundation Health Systems 784,875
37,000 Itron 758,500
20,800 McDonald's 932,100
35,500 Pegasystems 647,875
26,000 Vencor 702,000
31,200 Waste Management 729,300
-------------
9,968,932
-------------
Transportation & Communication --
0.4% 30,300 Molten Metal Technology 106,050
15,000 Wisconsin Central Transportation 466,875
-------------
572,925
-------------
Wholesale Trade -- 1.1% 32,000 Gateway 2000 918,000
13,800 Motorola 852,150
-------------
1,770,150
-------------
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES SOLD SHORT (proceeds $37,399,403) -- 19.3% $ 31,571,512
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Comstock Partners Funds, Inc. Statements of Assets and Liabilities
(Unaudited) As of October 31, 1997
<TABLE>
<CAPTION>
STRATEGY CAPITAL
FUND VALUE FUND
------------ ------------
<S> <C> <C>
ASSETS:
Investments at value (cost $127,253,835 and
$162,458,987, respectively) (Note 1a)............. $121,186,090 $148,447,785
Put options purchased (cost $15,888,943 and
$14,924,725, respectively) (Note 1a).............. 12,817,813 13,745,563
Cash................................................ 3,090 307,396
Receivable from brokers for proceeds on securities
sold short.......................................... -- 37,399,403
Receivables:
Interest........................................ 3,493,162 773,545
Capital stock sold.............................. 514,795 1,367,806
Securities sold................................. 755,464 286,553
Dividends....................................... 51,563 62,204
Variation margin on open futures contracts...... 7,500 --
Unrealized appreciation on foreign exchange
contracts........................................... 77,699 85,469
Other assets........................................ 20,142 45,999
------------ ------------
Total assets.................................... 138,927,318 202,521,723
------------ ------------
LIABILITIES:
Payables:
Short sales (proceeds $37,399,403).............. -- 31,571,512
Dividends to shareholders (Note 1f)............. 958,416 --
Variation margin on open futures contracts...... -- 1,539,000
Capital stock redeemed.......................... 834,512 5,238,543
Payable for forward foreign exchange contracts
-- closed..................................... 42,555 51,156
Investment advisory fees (Note 2)............... 72,614 55,432
Sub-investment advisory fees (Note 2)........... -- 48,503
Administrative fees (Note 2).................... 29,354 --
Service and Distribution Plan fees (Note 2)..... 10,425 68,885
Due to Dreyfus Transfer, Inc. (Note 2).......... 34,341 57,285
Accrued expenses and other liabilities.............. 166,513 278,074
------------ ------------
Total liabilities............................... 2,148,730 38,908,390
------------ ------------
NET ASSETS.......................................... $136,778,588 $163,613,333
------------ ------------
------------ ------------
NET ASSETS CONSIST OF:
Paid in capital................................. $194,681,439 $363,467,943
Undistributed net investment income............. 9,454,385 12,374,799
Accumulated net realized gain (loss) on foreign
currency transactions........................... (4,994,216) 445,015
Accumulated net realized loss on investments,
put options purchased, futures and short sale
transactions.................................. (50,805,100) (205,295,661)
Net unrealized appreciation on short sale
transactions.................................... -- 5,827,891
Net unrealized depreciation on investments, put
options purchased and
futures transactions.......................... (11,621,401) (13,295,465)
Net unrealized appreciation on foreign currency
transactions.................................... 63,481 88,811
------------ ------------
NET ASSETS.......................................... $136,778,588 $163,613,333
------------ ------------
------------ ------------
SHARES OF COMMON STOCK OUTSTANDING:
Class O shares:
150 million of $0.001 par value authorized.... 14,658,893 --
------------ ------------
------------ ------------
Class A shares:
200 million of $0.001 par value authorized.... 4,029,964 --
------------ ------------
------------ ------------
125 million of $0.001 par value authorized.... -- 14,947,294
------------ ------------
------------ ------------
Class B shares:
125 million of $0.001 par value authorized.... -- 5,874,507
------------ ------------
------------ ------------
Class C shares:
200 million of $0.001 par value authorized.... 520,068 --
------------ ------------
------------ ------------
125 million of $0.001 par value authorized.... -- 1,651,702
------------ ------------
------------ ------------
Class R shares:
125 million of $0.001 par value authorized.... -- 8,872
------------ ------------
------------ ------------
NET ASSET VALUE PER SHARE:
Class O shares:
$104,393,155 / 14,658,893 shares.............. $ 7.12 --
------------ ------------
------------ ------------
Class A shares:
$28,689,930 / 4,029,964 shares
and $109,760,500 / 14,947,294 shares,
respectively.................................. $ 7.12 $ 7.34
------------ ------------
------------ ------------
Class B shares:
$42,145,833 / 5,874,507 shares................ -- $ 7.17
------------ ------------
------------ ------------
Class C shares:
$3,695,503 / 520,068 shares
and $11,641,801 / 1,651,702 shares,
respectively.................................. $ 7.11 $ 7.05
------------ ------------
------------ ------------
Class R shares:
$65,199 / 8,872 shares........................ -- $ 7.35
------------ ------------
------------ ------------
</TABLE>
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Comstock Partners Funds, Inc.
Statements of Operations for the Six Months Ended October 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
STRATEGY CAPITAL
FUND VALUE FUND
------------ ------------
<S> <C> <C>
INVESTMENT INCOME (NOTE 1E):
Interest and discount earned (net of withholding tax
of $3,185 and $48,786, respectively).............. $ 6,012,883 $ 5,691,760
Dividends (net of withholding tax of $4,132 and $0,
respectively)..................................... 225,974 132,798
------------ ------------
Total investment income......................... 6,238,857 5,824,558
------------ ------------
EXPENSES:
Investment advisory fees (Note 2)................... 497,185 376,038
Administrative fees (Note 2)........................ 199,047 --
Dividends on securities sold short.................. -- 264,305
Transfer agent fees (Note 2)........................ 167,352 150,005
Sub-investment advisory fees (Note 2)............... -- 329,033
Service and Distribution Plan fees (Note 2)......... 83,211 457,799
Printing and shareholder reports.................... 7,399 86,895
Registration fees................................... 18,334 30,116
Professional fees................................... 54,319 75,956
Insurance........................................... 14,085 3,018
Directors' fees and expenses........................ 21,784 21,940
Custodian fees...................................... 23,322 26,223
Other operating expenses............................ 3,036 1,283
------------ ------------
Total expenses.................................. 1,089,074 1,822,611
------------ ------------
NET INVESTMENT INCOME............................... 5,149,783 4,001,947
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS (NOTES 1B, 1C, 1E & 3):
Net realized loss on investments, put options
purchased and futures transactions................ (10,310,846) (34,247,788)
Net realized loss on short sale transactions........ -- (11,521,599)
Net realized loss on foreign currency
transactions...................................... (313,510) (774,193)
Change in net unrealized appreciation (depreciation)
on investments, put options purchased and
futures transactions............................ (1,927,904) 10,538,553
Change in net unrealized depreciation on short sale
transactions...................................... -- (642,821)
Change in net unrealized appreciation on foreign
currency transactions............................. 66,636 121,858
------------ ------------
NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS........................................ $ (7,335,841) $(32,524,043)
------------ ------------
------------ ------------
</TABLE>
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Comstock Partners Funds, Inc. Statements of Changes in Net Assets
<TABLE>
<CAPTION>
STRATEGY FUND CAPITAL VALUE FUND
----------------------------------- -----------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE MONTHS ENDED FOR THE
OCTOBER 31, 1997 YEAR ENDED OCTOBER 31, 1997 YEAR ENDED
(UNAUDITED) APRIL 30, 1997 (UNAUDITED) APRIL 30, 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATIONS: Net investment income.......... $ 5,149,783 $ 15,958,909 $ 4,001,947 $ 16,844,056
Net realized loss on
investments, put options
purchased and futures
transactions................. (10,310,846) (16,069,197) (34,247,788) (23,936,012)
Net realized loss on short sale
transactions................. -- -- (11,521,599) (15,283,826)
Net realized gain (loss) on
foreign currency
transactions................. (313,510) (6,194,936) (774,193) 1,219,208
Change in net unrealized
appreciation (depreciation)
on investments, put options
purchased and futures
transactions................. (1,927,904) (5,330,396) 10,538,553 (26,007,617)
Change in net unrealized
appreciation (depreciation)
on short sale transactions... -- -- (642,821) 8,515,695
Change in net unrealized
appreciation (depreciation)
on foreign currency
transactions................. 66,636 (67,194) 121,858 (33,048)
------------ ------------ ------------ ------------
Net decrease in net assets
resulting from operations.... (7,335,841) (11,702,814) (32,524,043) (38,681,544)
------------ ------------ ------------ ------------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS: Investment income -- net
Class O shares............... (4,715,435) (9,509,711) -- --
Class A shares............... (1,416,507) (2,663,922) -- (11,184,613)
Class B shares............... -- -- -- (4,074,703)
Class C shares............... (219,689) (629,042) -- (351,412)
Class R shares............... -- -- -- (1,757)
Realized transaction gain --
net
Class O shares............... -- (3,149,588) -- --
Class A shares............... -- (757,462) -- --
Class C shares............... -- (133,166) -- --
------------ ------------ ------------ ------------
Net decrease in net assets
resulting from dividends and
distributions................ (6,351,631) (16,842,891) -- (15,612,485)
------------ ------------ ------------ ------------
CAPITAL STOCK
TRANSACTIONS: Net proceeds from shares sold:
Class A shares............... 5,455,157 18,898,271 46,288,389 80,556,216
Class B shares............... -- -- 3,404,218 27,051,810
Class C shares............... 1,578,182 23,119,248 8,348,238 8,482,514
Class R shares............... -- -- 2,025 124,254
Dividends and distributions
reinvested:
Class O shares............... 1,003,180 2,306,043 -- --
Class A shares............... 460,397 1,072,115 -- 7,737,035
Class B shares............... -- -- -- 2,459,697
Class C shares............... 57,759 136,605 -- 130,312
Class R shares............... -- -- -- 1,757
Cost of shares redeemed:
Class O shares............... (21,285,832) (70,907,354) -- --
Class A shares............... (17,417,105) (24,374,508) (75,011,454) (130,659,314)
Class B shares............... -- -- (17,001,834) (31,821,065)
Class C shares............... (10,451,420) (8,756,049) (2,746,957) (3,667,272)
Class R shares............... -- -- (37,467) --
------------ ------------ ------------ ------------
Net decrease in net assets
resulting from capital stock
transactions................. (40,599,682) (58,505,629) (36,754,842) (39,604,056)
------------ ------------ ------------ ------------
Decrease in net assets......... (54,287,154) (87,051,334) (69,278,885) (93,898,085)
NET ASSETS: Beginning of period............ 191,065,742 278,117,076 232,892,218 326,790,303
------------ ------------ ------------ ------------
End of period.................. $136,778,588 $191,065,742 $163,613,333 $232,892,218
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Undistributed net investment
income....................... $ 9,454,385 $ 10,656,233 $ 12,374,799 $ 8,372,853
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Comstock Partners Funds, Inc. Statements of Changes in Net Assets
(concluded)
<TABLE>
<CAPTION>
STRATEGY FUND CAPITAL VALUE FUND
---------------------------------- ----------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE MONTHS ENDED FOR THE
OCTOBER 31, 1997 YEAR ENDED OCTOBER 31, 1997 YEAR ENDED
(UNAUDITED) APRIL 30, 1997 (UNAUDITED) APRIL 30, 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
CAPITAL STOCK
TRANSACTIONS: Shares sold:
Class A shares............... 726,237 2,270,514 5,956,782 8,386,923
Class B shares............... -- -- 449,698 2,817,342
Class C shares............... 210,558 2,704,967 1,140,578 916,595
Class R shares............... -- -- 259 13,254
Shares issued for dividends and
distributions reinvested:
Class O shares............... 133,875 277,417 -- --
Class A shares............... 61,731 128,972 -- 848,331
Class B shares............... -- -- -- 274,214
Class C shares............... 7,735 16,697 -- 14,775
Class R shares............... -- -- -- 193
Shares redeemed:
Class O shares............... (2,814,733) (8,457,567) -- --
Class A shares............... (2,336,792) (2,931,757) (9,673,574) (13,484,994)
Class B shares............... -- -- (2,225,839) (3,322,387)
Class C shares............... (1,379,864) (1,076,210) (364,349) (400,566)
Class R shares............... -- -- (4,956) --
------------ ------------ ------------ ------------
Net decrease in shares
outstanding.................. (5,391,253) (7,066,967) (4,721,401) (3,936,320)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Comstock Partners Funds, Inc. Strategy Fund Financial Highlights
The following per share data and ratios have been derived from information
provided in the financial statements.
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEAR
OCTOBER 31, 1997 ENDED
(UNAUDITED) APRIL 30, 1997
-------------------------------- ----------------------------
CLASS O CLASS A CLASS C CLASS O CLASS A CLASS C
-------- ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD.............................. $ 7.77 $ 7.77 $ 7.74 $ 8.78 $ 8.78 $ 8.77
-------- ------- ------- -------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................ 0.36 0.19 0.24 0.78 0.54 0.45
Net realized and unrealized gain
(loss) on investments, put options
purchased, futures transactions and
foreign currency transactions....... (0.71) (0.55) (0.62) (1.19) (0.96) (0.95)
-------- ------- ------- -------- ------- -------
Total from investment
operations........................ (0.35) (0.36) (0.38) (0.41) (0.42) (0.50)
-------- ------- ------- -------- ------- -------
LESS DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment
income.............................. (0.30) (0.29) (0.25) (0.47) (0.46) (0.41)
Dividends from realized gains on
foreign currency transactions....... -- -- -- (0.13) (0.13) (0.12)
-------- ------- ------- -------- ------- -------
Total dividends and
distributions..................... (0.30) (0.29) (0.25) (0.60) (0.59) (0.53)
-------- ------- ------- -------- ------- -------
NET ASSET VALUE, END OF PERIOD....... $ 7.12 $ 7.12 $ 7.11 $ 7.77 $ 7.77 $ 7.74
-------- ------- ------- -------- ------- -------
-------- ------- ------- -------- ------- -------
Total investment return (1).......... (4.61)% (4.74)% (4.99)% (4.85)% (5.10)% (5.94)%
-------- ------- ------- -------- ------- -------
-------- ------- ------- -------- ------- -------
RATIOS/SUPPLEMENTARY DATA
Net assets, end of period (000
omitted)............................ $104,393 $28,690 $ 3,696 $134,719 $43,327 $13,020
-------- ------- ------- -------- ------- -------
-------- ------- ------- -------- ------- -------
Ratio of expenses to average net
assets.............................. 1.21%(4) 1.47%(4) 2.23%(4) 1.18% 1.43% 2.14%
-------- ------- ------- -------- ------- -------
-------- ------- ------- -------- ------- -------
Ratio of net investment income to
average net assets.................. 6.32%(4) 6.06%(4) 5.27%(4) 6.80% 6.55% 5.81%
-------- ------- ------- -------- ------- -------
-------- ------- ------- -------- ------- -------
Portfolio turnover rate.............. 130% 130% 130% 126% 126% 126%
-------- ------- ------- -------- ------- -------
-------- ------- ------- -------- ------- -------
Average commission rate paid (5)..... $ 0.0234 $0.0234 $0.0234 $ 0.0600 $0.0600 $0.0600
-------- ------- ------- -------- ------- -------
-------- ------- ------- -------- ------- -------
<CAPTION>
FOR THE YEAR
ENDED
APRIL 30, 1996
--------------------------------
CLASS O CLASS A CLASS C++
-------- ------- ---------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD.............................. $ 9.10 $ 9.10 $ 9.00
-------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................ 0.76 0.57 0.37
Net realized and unrealized gain
(loss) on investments, put options
purchased, futures transactions and
foreign currency transactions....... (0.53) (0.36) (0.22)
-------- ------- -------
Total from investment
operations........................ 0.23 0.21 0.15
-------- ------- -------
LESS DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment
income.............................. (0.55) (0.53) (0.38)
Dividends from realized gains on
foreign currency transactions....... -- -- --
-------- ------- -------
Total dividends and
distributions..................... (0.55) (0.53) (0.38)
-------- ------- -------
NET ASSET VALUE, END OF PERIOD....... $ 8.78 $ 8.78 $ 8.77
-------- ------- -------
-------- ------- -------
Total investment return (1).......... 2.66% 2.40% 1.96%(3)
-------- ------- -------
-------- ------- -------
RATIOS/SUPPLEMENTARY DATA
Net assets, end of period (000
omitted)............................ $224,148 $53,652 $ 317
-------- ------- -------
-------- ------- -------
Ratio of expenses to average net
assets.............................. 1.23% 1.48% 2.28%(4)
-------- ------- -------
-------- ------- -------
Ratio of net investment income to
average net assets.................. 6.56% 6.33% 5.79%(4)
-------- ------- -------
-------- ------- -------
Portfolio turnover rate.............. 96% 96% 96%
-------- ------- -------
-------- ------- -------
Average commission rate paid (5)..... N/A N/A N/A
-------- ------- -------
-------- ------- -------
<CAPTION>
FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED
APRIL 30, 1995 APRIL 30, 1994 APRIL 30, 1993
------------------ ------------------ -------------------
CLASS O CLASS A CLASS O CLASS A CLASS O CLASS A+
-------- ------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD.............................. $ 9.40 $ 9.41 $ 9.27 $ 9.27 $ 9.56 $ 9.55
-------- ------- -------- ------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................ 0.66 0.52 0.77 0.68 0.90 0.64
Net realized and unrealized gain
(loss) on investments, put options
purchased, futures transactions and
foreign currency transactions....... (0.44) (0.34) 0.15 0.22 (0.39) (0.28)
-------- ------- -------- ------- -------- --------
Total from investment
operations........................ 0.22 0.18 0.92 0.90 0.51 0.36
-------- ------- -------- ------- -------- --------
LESS DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment
income.............................. (0.52) (0.49) (0.77) (0.74) (0.75) (0.64)
Dividends from realized gains on
foreign currency transactions....... -- -- (0.02) (0.02) (0.05) --
-------- ------- -------- ------- -------- --------
Total dividends and
distributions..................... (0.52) (0.49) (0.79) (0.76) (0.80) (0.64)
-------- ------- -------- ------- -------- --------
NET ASSET VALUE, END OF PERIOD....... $ 9.10 $ 9.10 $ 9.40 $ 9.41 $ 9.27 $ 9.27
-------- ------- -------- ------- -------- --------
-------- ------- -------- ------- -------- --------
Total investment return (1).......... 2.39% 1.94% 10.13% 9.91% 5.70% 5.42%(2)
-------- ------- -------- ------- -------- --------
-------- ------- -------- ------- -------- --------
RATIOS/SUPPLEMENTARY DATA
Net assets, end of period (000
omitted)............................ $329,624 $65,874 $464,937 $91,454 $548,514 $ 23,492
-------- ------- -------- ------- -------- --------
-------- ------- -------- ------- -------- --------
Ratio of expenses to average net
assets.............................. 1.14% 1.46% 1.07% 1.40% 1.06% 1.41%(4)
-------- ------- -------- ------- -------- --------
-------- ------- -------- ------- -------- --------
Ratio of net investment income to
average net assets.................. 6.19% 5.83% 7.57% 6.85% 8.95% 8.74%(4)
-------- ------- -------- ------- -------- --------
-------- ------- -------- ------- -------- --------
Portfolio turnover rate.............. 100% 100% 31% 31% 56% 56%
-------- ------- -------- ------- -------- --------
-------- ------- -------- ------- -------- --------
Average commission rate paid (5)..... N/A N/A N/A N/A N/A N/A
-------- ------- -------- ------- -------- --------
-------- ------- -------- ------- -------- --------
<FN>
+ Class A shares were introduced on July 15, 1992. Except as indicated below, information is presented for the period from July
15, 1992 to April 30, 1993.
++ Class C shares were introduced on August 1, 1995. Except as indicated below, information is presented for the period from
August 1, 1995 to April 30, 1996.
(1) Total investment returns exclude the effects of sales loads and assume reinvestment of dividends and distributions. Total
investment returns for periods of less than one full year are not annualized.
(2) Total investment return is presented for the year ended April 30, 1993. For the period prior to July 15, 1992, total
investment return is based upon the total investment return for Class O Shares, and does not reflect service and
distribution fees because such fees were not paid during that period.
(3) Total investment return is presented for the year ended April 30, 1996. For the period prior to August 1, 1995, total
investment return is based upon the total investment return for Class A shares, and does not reflect the greater service and
distribution fees and certain other expenses borne by Class C shares.
(4) Annualized.
(5) For fiscal years beginning after September 1, 1995, the Fund is required to disclose its average commission rate paid per
share for purchases and sales of equity securities.
</TABLE>
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Comstock Partners Funds, Inc. Capital Value Fund Financial Highlights
The following per share data and ratios have been derived from information
provided in the financial statements.
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
OCTOBER 31, 1997
(UNAUDITED)
-----------------------------------------------
CLASS A CLASS B CLASS C CLASS R
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $ 8.62 $ 8.45 $ 8.31 $ 8.62
-------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income............... 0.13 0.15 0.11 0.34
Net realized and unrealized gain
(loss) on investments, put options
purchased, futures transactions,
short sale transactions and foreign
currency transactions.............. (1.41) (1.43) (1.37) (1.61)
-------- -------- -------- --------
Total from investment
operations....................... (1.28) (1.28) (1.26) (1.27)
-------- -------- -------- --------
LESS DIVIDENDS
Dividends from net investment
income............................. -- -- -- --
-------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD...... $ 7.34 $ 7.17 $ 7.05 $ 7.35
-------- -------- -------- --------
-------- -------- -------- --------
Total investment return (1)......... (14.85)% (15.03)% (15.16)% (14.73)%
-------- -------- -------- --------
-------- -------- -------- --------
RATIOS/SUPPLEMENTARY DATA
Net assets, end of period (000
omitted)........................... $109,760 $ 42,146 $ 11,642 $ 65
-------- -------- -------- --------
-------- -------- -------- --------
Ratio of operating expenses to
average
net assets......................... 0.72%(2) 1.10%(2) 1.10%(2) 0.59%(2)
-------- -------- -------- --------
-------- -------- -------- --------
Ratio of interest expense and
dividends on securities sold short
to average net assets.............. 0.14%(2) 0.14%(2) 0.13%(2) 0.15%(2)
-------- -------- -------- --------
-------- -------- -------- --------
Ratio of net investment income to
average net assets................. 2.27%(2) 1.89%(2) 1.85%(2) 2.39%(2)
-------- -------- -------- --------
-------- -------- -------- --------
Portfolio turnover rate............. 192%(2) 192%(2) 192%(2) 192%(2)
-------- -------- -------- --------
-------- -------- -------- --------
Average commission rate paid (3).... $ 0.0454 $ 0.0454 $ 0.0454 $ 0.0454
-------- -------- -------- --------
-------- -------- -------- --------
<CAPTION>
FOR THE YEAR ENDED
APRIL 30, 1997
-----------------------------------------------
CLASS A CLASS B CLASS C CLASS R
<S> -------- -------- -------- --------
NET ASSET VALUE, BEGINNING OF <C> <C> <C> <C>
PERIOD.............................
$ 10.54 $ 10.38 $ 10.24 $ 10.53
INCOME FROM INVESTMENT OPERATIONS -------- -------- -------- --------
Net investment income...............
Net realized and unrealized gain 0.59 0.54 0.57 0.82(4)
(loss) on investments, put options
purchased, futures transactions,
short sale transactions and foreign
currency transactions..............
(1.92) (1.93) (1.91) (2.13)(4)
Total from investment -------- -------- -------- --------
operations.......................
(1.33) (1.39) (1.34) (1.31)(4)
LESS DIVIDENDS -------- -------- -------- --------
Dividends from net investment
income.............................
(0.59) (0.54) (0.59) (0.60)
NET ASSET VALUE, END OF PERIOD...... -------- -------- -------- --------
$ 8.62 $ 8.45 $ 8.31 $ 8.62
-------- -------- -------- --------
Total investment return (1)......... -------- -------- -------- --------
(12.97)% (13.69)% (13.47)% (12.83)%
-------- -------- -------- --------
RATIOS/SUPPLEMENTARY DATA -------- -------- -------- --------
Net assets, end of period (000
omitted)...........................
$160,834 $ 64,671 $ 7,271 $ 117
-------- -------- -------- --------
Ratio of operating expenses to -------- -------- -------- --------
average
net assets.........................
1.28% 2.03% 2.07% 1.19%
-------- -------- -------- --------
Ratio of interest expense and -------- -------- -------- --------
dividends on securities sold short
to average net assets..............
0.51% 0.50% 0.47% 0.38%
-------- -------- -------- --------
Ratio of net investment income to -------- -------- -------- --------
average net assets.................
6.16% 5.52% 6.02% 8.65%
-------- -------- -------- --------
Portfolio turnover rate............. -------- -------- -------- --------
399% 399% 399% 399%
-------- -------- -------- --------
Average commission rate paid (3).... -------- -------- -------- --------
$ 0.0313 $ 0.0313 $ 0.0313 $ 0.0313
-------- -------- -------- --------
-------- -------- -------- --------
<CAPTION>
FOR THE SEVEN
MONTHS ENDED
APRIL 30, 1996
-----------------------------------------------
CLASS A CLASS B CLASS C CLASS R
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $ 10.61 $ 10.41 $ 10.41 $ 10.62
-------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income............... 0.22 0.18 0.44 0.30
Net realized and unrealized gain
(loss) on investments, put options
purchased, futures transactions,
short sale transactions and foreign
currency transactions.............. 0.17 0.16 (0.12) 0.09
-------- -------- -------- --------
Total from investment
operations....................... 0.39 0.34 0.32 0.39
-------- -------- -------- --------
LESS DIVIDENDS
Dividends from net investment
income............................. (0.46) (0.37) (0.49) (0.48)
-------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD...... $ 10.54 $ 10.38 $ 10.24 $ 10.53
-------- -------- -------- --------
-------- -------- -------- --------
Total investment return (1)......... 3.81% 3.36% 3.30% 3.97%
-------- -------- -------- --------
-------- -------- -------- --------
RATIOS/SUPPLEMENTARY DATA
Net assets, end of period (000
omitted)........................... $241,472 $ 81,786 $ 3,531 $ 1
-------- -------- -------- --------
-------- -------- -------- --------
Ratio of operating expenses to
average
net assets......................... 0.75%(2) 1.18%(2) 1.28%(2) 0.61%(2)
-------- -------- -------- --------
-------- -------- -------- --------
Ratio of interest expense and
dividends on securities sold short
to average net assets.............. 0.18%(2) 0.19%(2) 0.18%(2) 0.17%(2)
-------- -------- -------- --------
-------- -------- -------- --------
Ratio of net investment income to
average net assets................. 2.13%(2) 1.70%(2) 1.71%(2) 2.28%(2)
-------- -------- -------- --------
-------- -------- -------- --------
Portfolio turnover rate............. 56%(2) 56%(2) 56%(2) 56%(2)
-------- -------- -------- --------
-------- -------- -------- --------
Average commission rate paid (3).... $ 0.0531 $ 0.0531 $ 0.0531 $ 0.0531
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Comstock Partners Funds, Inc. Capital Value Fund
Financial Highlights (concluded)
The following per share data and ratios have been derived from information
provided in the financial statements.
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
----------------------------------------------- ---------------------
CLASS A CLASS B CLASS C+ CLASS R+ CLASS A CLASS B
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $ 11.88 $ 11.69 $ 10.64 $ 10.84 $ 11.42 $ 11.32
-------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income............... 0.36 0.31 0.02 0.04 0.24 0.23
Net realized and unrealized gain
(loss) on investments, put options
purchased, futures transactions,
short sale transactions and foreign
currency transactions.............. (1.37) (1.38) (0.25) (0.26) 0.46 0.38
-------- -------- -------- -------- -------- --------
Total from investment
operations....................... (1.01) (1.07) (0.23) (0.22) 0.70 0.61
-------- -------- -------- -------- -------- --------
LESS DIVIDENDS
Dividends from net investment
income............................. (0.26) (0.21) -- -- (0.24) (0.24)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD...... $ 10.61 $ 10.41 $ 10.41 $ 10.62 $ 11.88 $ 11.69
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Total investment return (1)......... (8.58)% (9.27)% (2.26)% (2.03)% 6.14% 5.35%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
RATIOS/SUPPLEMENTARY DATA
Net assets, end of period (000
omitted)........................... $271,052 $ 87,847 $ 1 $ 1 $402,708 $108,532
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Ratio of operating expenses to
average net assets................. 1.24% 1.99% 0.26%(2) 0.14%(2) 1.21% 1.99%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Ratio of interest expense and
dividends on securities sold short
to average net assets.............. 0.45% 0.45% 0.06%(2) 0.04%(2) 0.39% 0.40%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Ratio of net investment income to
average net assets................. 3.61% 2.86% 0.23%(2) 0.38%(2) 2.06% 1.39%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Portfolio turnover rate............. 55% 55% 55% 55% 46% 46%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Average commission rate paid (3).... N/A N/A N/A N/A N/A N/A
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
<CAPTION>
FOR THE YEAR
ENDED
SEPTEMBER 30, 1993
-------------------------
CLASS A CLASS B+
-------- ----------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $ 12.41 $ 10.58
-------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income............... 0.24 0.03
Net realized and unrealized gain
(loss) on investments, put options
purchased, futures transactions,
short sale transactions and foreign
currency transactions.............. (0.62) 0.71
-------- --------
Total from investment
operations....................... (0.38) 0.74
-------- --------
LESS DIVIDENDS
Dividends from net investment
income............................. (0.61) --
-------- --------
NET ASSET VALUE, END OF PERIOD...... $ 11.42 $ 11.32
-------- --------
-------- --------
Total investment return (1)......... (2.70)% 6.99%
-------- --------
-------- --------
RATIOS/SUPPLEMENTARY DATA
Net assets, end of period (000
omitted)........................... $412,316 $ 30,378
-------- --------
-------- --------
Ratio of operating expenses to
average net assets................. 1.23% 1.49%(2)
-------- --------
-------- --------
Ratio of interest expense and
dividends on securities sold short
to average net assets.............. 0.45% 0.31%(2)
-------- --------
-------- --------
Ratio of net investment income to
average net assets................. 1.94% 0.83%(2)
-------- --------
-------- --------
Portfolio turnover rate............. 42% 42%
-------- --------
-------- --------
Average commission rate paid (3).... N/A N/A
-------- --------
-------- --------
<FN>
(+) Class B shares were introduced on January 15, 1993; Class C shares and Class R shares were introduced on August 22, 1995.
(1) Total investment returns exclude the effects of sales loads and assume reinvestment of dividends and distributions. Total
returns for periods of less than one full year are not annualized.
(2) Not annualized.
(3) For fiscal years beginning after September 1, 1995, the Fund is required to disclose its average commission rate paid per
share for purchases and sales of equity securities.
(4) Based on average shares outstanding.
</TABLE>
See notes to financial statements.
<PAGE>
COMSTOCK PARTNERS FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS:
1. SIGNIFICANT ACCOUNTING POLICIES:
Comstock Partners Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940 (the "1940 Act") as an open-end management investment
company offering shares in two separate portfolios: Comstock Partners Strategy
Fund (the "Strategy Fund") and Comstock Partners Capital Value Fund (the
"Capital Value Fund"). The Company accounts separately for the assets,
liabilities and operations of each Fund. The Strategy Fund is a non-diversified
portfolio with an investment objective to maximize total return over the
long-term investment horizon by investing primarily in a portfolio of debt
securities. The Capital Value Fund is a diversified portfolio with an investment
objective to maximize total return, consisting of capital appreciation and
current income. The Company originally commenced operations in May of 1988 as a
closed-end investment company, with the Strategy Fund as its only portfolio. At
a special meeting of shareholders on June 14, 1991, holders of a majority of the
Company's outstanding shares voted to approve the conversion of the Company to
an open-end investment company. The Company converted to open-end status on
August 1, 1991. On July 15, 1992, a second class of shares of the Strategy Fund,
Class A, was created and, on August 1, 1995, a third class of shares of the
Strategy Fund, Class C, was created. On February 8, 1996, (i) the Company
changed its name from Comstock Partners Strategy Fund, Inc., to Comstock
Partners Funds, Inc. (ii) the Strategy Fund, the Company's existing portfolio,
became a separate portfolio of the Company and (iii) the Capital Value Fund was
organized as a new portfolio of the Company. On July 25, 1996, the Capital Value
Fund acquired all of the assets and liabilities (whether contingent or
otherwise) of the Dreyfus Capital Value Fund, Inc. in exchange for shares in the
Capital Value Fund. The Capital Value Fund offers Class A, Class B, Class C, and
Class R shares.
Premier Mutual Fund Services, Inc. (the "Distributor") acts as distributor of
the Funds' shares. Each Class O, Class A and Class C share of the Strategy Fund
and each Class A, Class B, Class C, and Class R share of the Capital Value Fund
represents an interest in the Strategy Fund or the Capital Value Fund, as the
case may be, in proportion to its net asset value, and has identical rights
except that Class A, B, and C shares of the Funds bear fees and expenses on an
ongoing basis pursuant to the Funds' Class A, Class B, and Class C Service and
Distribution Plans, respectively, and Class B and Class C shares bear additional
incremental shareholder administrative expenses resulting from deferred sales
charge arrangements. In addition, only the holders of Class A, Class B, and
Class C shares have voting rights with respect to matters pertaining to the
Class A, Class B, and Class C Service and Distribution Plans, respectively.
Class A shares of each Fund are subject to a sales charge imposed at the time of
purchase and in certain cases, contingent deferred sales charges. Class B shares
are subject to a contingent deferred sales charge imposed at the time of
redemption on redemptions made within six years of purchase. Class C shares of
each Fund are subject to a contingent deferred sales charge imposed at the time
of redemption on redemptions made within one year of purchase. Class R shares
are sold at net asset value per share only to institutional investors. Class O
shares are no longer issued by the Company except in connection with the
reinvestment of dividends on outstanding Class O shares.
The following is a summary of significant accounting policies followed by the
Company:
Strategy Fund and Capital Value Fund:
(a) Valuation of investments--Securities listed on national securities exchanges
are valued at the last sale price as of the close of business on the day the
securities are being valued, or lacking any sales, at the mean between the
closing bid and asked prices, except for open short positions, where the asked
price is used for valuation purposes. Bid price is used when no asked price is
available.
Securities traded in the over-the-counter market are valued on the basis of the
mean between the bid and asked prices at the close of trading on such day by
dealers that make markets in such securities. Portfolio securities which are
traded both in the over-the-counter market and on a stock exchange are valued
based on prices or quotes obtained from the broadest and most representative
market.
Options purchased are valued at the last bid price in the case of
exchange-traded options or, in the case of options traded in the
over-the-counter market, the average of the last bid price as obtained from two
or more dealers. Options written are valued at the last asked price.
Futures contracts are stated at market value or otherwise at the fair value at
which it is expected they may be resold, as determined in good faith by the
Board of Directors.
Short-term debt securities having a maturity of 60 days or less from the
valuation date are valued at amortized cost which approximates market value.
(b) Derivative financial instruments--The Funds may engage in various portfolio
strategies to seek to generate income or gains or as a hedge against its
portfolio against adverse movements in the equity, debt and currency markets.
Losses may arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
Options--The Funds are authorized to write and purchase call and put options.
When a Fund writes an option, an amount equal to the premium received by the
Fund is reflected as an asset and an equivalent liability. The amount of the
liability is subsequently marked to market to reflect the current market value
of the option written.
When a security is purchased or sold through an exercise of an option, the
related premium paid (or received) is added to (or deducted from) the basis of
the security acquired or deducted from (or added to) the proceeds of the
security sold. When an option expires (or the Fund enters into a closing
transaction), the Fund realizes a gain or loss on the option to the extent of
the premiums received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
Forward foreign exchange contracts--The Funds are authorized to enter into
forward foreign exchange contracts to seek to generate income or gains or as a
hedge against either specific transactions or portfolio positions. Such
contracts are not entered on the Funds' records. However, the effect on
operations is recorded from the date the Fund enters into such contracts.
Financial futures contracts--The Funds may purchase or sell financial futures
contracts to seek to generate income or gains or as a hedge against adverse
changes in interest rates. A futures contract is an agreement between two
parties to buy or sell a security for a set price on a future date. Upon
entering into a contract, the Fund deposits and maintains as collateral such
initial margin as required by the exchange on which the transaction is effected.
Pursuant to the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in the value of the contract.
Such receipts or payments are known as variation margin and are recorded by the
Funds as unrealized gains or losses. When the contract is closed, the Fund
records a realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.
(c) Foreign currency transactions--Transactions denominated in foreign
currencies are recorded at the exchange rate prevailing when recognized. Assets
and liabilities denominated in foreign currencies are valued at the exchange
rate at the end of the period. Foreign currency transaction gains (losses) are
the result of settling (realized) or valuing (unrealized) assets or liabilities
expressed in foreign currencies into US dollars. Realized and unrealized gains
or losses from investments include the effects of foreign exchange rates on
investments.
(d) Income taxes--It is the policy of the Company to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to
shareholders. Therefore, no Federal income tax provision is required. Under the
applicable foreign tax law, a withholding tax may be imposed on interest,
dividends and capital gains at various rates.
<PAGE>
(e) Security transactions and investment income--Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Dividend income is recorded on the ex-dividend date. Interest income (including
amortization of discount) is recorded as earned. Realized gains and losses are
determined on the identified cost basis.
(f) Dividends and distributions--Dividends and distributions payable by the
Funds are accrued on the ex-dividend date.
(g) Expenses--Expenses directly attributable to each Fund are charged to that
Fund's operations; expenses which are applicable to both Funds are allocated
among them on a pro rata basis.
(h) Use of estimates--The Funds' financial statements are prepared in accordance
with generally accepted accounting principles which may require the use of
management estimates and assumptions. Actual results could differ from these
estimates.
2. INVESTMENT ADVISORY, SUB-INVESTMENT ADVISORY, AND ADMINISTRATION AGREEMENTS
AND TRANSACTIONS WITH AFFILIATES:
(a) The Company, on behalf of the Funds, has engaged Comstock Partners, Inc.
(the "Investment Adviser") to provide professional investment management for
each Fund. Under the terms of an Amended Investment Advisory Agreement between
the Company, on behalf of the Strategy Fund, and the Investment Adviser, the
Investment Adviser furnishes continuing investment supervision to the Strategy
Fund and is responsible for the management of the Strategy Fund's portfolio. It
furnishes office space, equipment and personnel to the Strategy Fund in
connection with the performance of its investment management responsibilities.
For its services, the Investment Adviser receives from the Company, on behalf of
the Strategy Fund, a monthly fee at an annual rate of .60% of the Strategy
Fund's average daily net assets.
Under the terms of an Investment Advisory Agreement between the Company, on
behalf of the Capital Value Fund, and the Investment Adviser, the Investment
Adviser has responsibility for investment decisions for, and the day-to-day
management of, that portfolio. For its services, the Investment Adviser receives
from the Company, on behalf of the Capital Value Fund, a monthly fee at the
following annual rates: .40% of the first $300 million of the Capital Value
Fund's average daily net assets, .45% of the Capital Value Fund's average daily
net assets between $300 million and $750 million, .50% of the Capital Value
Fund's average daily net assets between $750 million and $1 billion and .55% of
the Capital Value Fund's average daily net assets in excess of $1 billion.
The Investment Adviser has engaged The Dreyfus Corporation (the "Sub-Investment
Adviser") to provide sub-investment advisory services with respect to each Fund.
Under the terms of a Sub-Investment Advisory Agreement relating to the Strategy
Fund, the Sub-Investment Adviser manages the short-term cash and cash equivalent
investments of the Strategy Fund and provides investment research and other
advice regarding the Strategy Fund's portfolio. The Sub-Investment Adviser also
provides general advice regarding economic factors and trends, including
statistical and other factual information. For such services, at no cost to the
Strategy Fund, the Investment Adviser pays the Sub-Investment Adviser a monthly
fee at an annual rate of .15% of the Strategy Fund's average daily net assets.
The Dreyfus Corporation also acts as the sub-investment adviser to the Capital
Value Fund pursuant to a separate Sub-Investment Advisory and Administration
Agreement between the Company, on behalf of the Fund, and the Sub-Investment
Adviser. Under that agreement, the Sub-Investment Adviser manages the short-
term cash and cash equivalent investments of the Capital Value Fund and provides
investment research and other advice regarding the Capital Value Fund's
portfolio. In addition, the Sub-Investment Adviser provides general advice
regarding economic factors and trends and acts as administrator to the Capital
Value Fund. For its services under the Sub-Investment Advisory and
Administration Agreement relating to the Capital Value Fund, the Sub-Investment
Adviser receives an annual fee computed daily and paid monthly by the Company at
the following annual rates: .35% of the first $300 million of the Capital Value
Fund's average daily net assets, .30% of the Capital Value Fund's average daily
net assets between $300 million and $750 million, .25% of the Capital Value
Fund's average daily net assets between $750 million and $1 billion and .20% of
the Capital Value Fund's average daily net assets in excess of $1 billion.
Under the terms of an Administration Agreement between the Company, on behalf of
the Strategy Fund, and Princeton Administrators, L.P. ("Princeton"), Princeton
performs or arranges for the performance of certain administrative services
(i.e., services other than investment advice and related portfolio activities)
necessary for the operation of the Strategy Fund, including maintaining the
books and records of the Strategy Fund, preparing reports and other documents
required by United States federal, state and other applicable laws and
regulations to maintain the registration of the Strategy Fund and its shares and
providing the Strategy Fund with administrative office facilities. For the
services rendered to the Strategy Fund and the facilities furnished, the
Strategy Fund pays Princeton a monthly fee equal to the greater of (i) $300,000
per annum ($25,000 per month), or (ii) an annual rate equal to .25% of the
Strategy Fund's average daily net assets up to $100 million, .225% of the
Strategy Fund's average daily net assets on the next $100 million, .20% of the
Strategy Fund's average daily net assets on the next $400 million and .175% of
the Strategy Fund's average daily net assets in excess of $600 million.
The Company compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Sub-Investment Adviser, under a transfer agency agreement for providing
personnel and facilities to perform transfer agency services for the Funds. For
the six months ended October 31, 1997, such compensation amounted to $83,118 for
the Capital Value Fund and $59,825 for the Strategy Fund.
(b) Service and Distribution Plan -- Class A Shares
Under the Class A Service and Distribution Plan, the Company, at the expense of
the Class A shares of each Fund, (a) reimburses the Distributor for payments to
certain Service Agents (a securities dealer, financial institution or other
industry professional) for distributing such Fund's Class A shares and servicing
shareholder accounts, and (b) pays the Sub-Investment Adviser, Dreyfus Service
Corporation and any affiliate of either of them (collectively, "Dreyfus") for
advertising and marketing relating to the Class A shares of such Fund and for
shareholder servicing activities, at an aggregate annual rate of .25 of 1% of
the value of the average daily net assets of Class A of such Fund. During the
six months ended October 31, 1997, $160,623 and $47,459 were charged to the
Class A shares of Capital Value Fund and Strategy Fund, respectively.
Service and Distribution Plans -- Class B Shares and Class C Shares
Under the Class B and Class C Service and Distribution Plans, the Company, at
the expense of the Class B shares of the Capital Value Fund and Class C shares
of each Fund, as the case may be, (a) pays the Distributor for distributing the
Capital Value Fund's Class B shares and each Fund's Class C shares at an annual
rate of .75 of 1% of the value of the average daily net assets of Class B or
Class C of the applicable Fund and (b) pays the Distributor for the provision of
certain services to the holders of Class B shares and Class C shares, as the
case may be, a fee at the annual rate of .25 of 1% of the value of the average
daily net assets of Class B or Class C of such Fund. During the six months ended
October 31, 1997, $191,569 and $31,313 were charged for distributing Capital
Value Fund's Class B and Class C shares, respectively, and $63,856 and $10,438
were charged for shareholder servicing for Capital Value Fund's Class B and
Class C shares, respectively. For the same period, $26,814 and $8,938 were
charged for distributing and shareholder servicing, respectively, for Strategy
Fund's Class C shares.
(c) Certain officers and/or directors of the Company are officers and/or
directors of the Investment Adviser. Each director who is not an "affiliated
person" as defined in the 1940 Act receives from the Company an annual fee of
$20,000 per year.
<PAGE>
3. PURCHASES AND SALES OF INVESTMENTS:
Purchases and sales of investments, excluding short-term and U.S. Government
securities, for the six months ended October 31, 1997 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
-------------- --------------
<S> <C> <C>
Strategy Fund:...................................... $ 48,359,112 $ 74,146,033
------------ ------------
------------ ------------
Capital Value Fund:
Long transactions................................. $122,517,327 $140,203,316
Short sale transactions........................... 96,959,152 59,433,472
------------ ------------
$219,476,479 $199,636,788
------------ ------------
------------ ------------
</TABLE>
The Capital Value Fund engages in short-selling which obligates the Fund to
replace the security borrowed by purchasing the security at current market
value. The Fund would incur a loss if the price of the security increases
between the date of the short sale and the date on which the Fund replaces the
borrowed security. The Fund would realize a gain if the price of the security
declines between those dates. Until the Fund replaces the borrowed security, the
Fund will maintain daily, a segregated account with a broker and/or custodian,
of cash and/or U.S. Government securities sufficient to cover its short
position. Securities sold short at October 31, 1997 and their related market
values and proceeds are set forth in the Statement of Securities Sold Short.
Realized and unrealized gains (losses) as of October 31, 1997 were as follows:
Strategy Fund:
<TABLE>
<CAPTION>
REALIZED UNREALIZED
GAINS (LOSSES) GAINS (LOSSES)
-------------- --------------
<S> <C> <C>
Long-term investments............................... $ 259,019 $ (6,066,469)
Short-term investments.............................. 2,783 (1,277)
Put options purchased............................... (14,567,848) (3,071,130)
Financial futures contracts......................... 3,995,200 (2,482,525)
Foreign currency transactions....................... (313,510) 63,481
------------ ------------
$(10,624,356) $(11,557,920)
------------ ------------
------------ ------------
</TABLE>
Capital Value Fund:
<TABLE>
<CAPTION>
REALIZED UNREALIZED
LOSSES GAINS (LOSSES)
-------------- --------------
<S> <C> <C>
Long-term investments............................... $ (1,327,729) $(13,990,955)
Short sale transactions............................. (11,521,599) 5,827,891
Short-term investments.............................. (963,731) (20,247)
Put options purchased............................... (13,908,855) (1,179,162)
Financial futures contracts......................... (18,047,473) 1,894,900
Foreign currency transactions....................... (774,193) 88,811
------------ ------------
$(46,543,580) $ (7,378,762)
------------ ------------
------------ ------------
</TABLE>
As of October 31, 1997, the cost of investments of each Fund for Federal income
tax purposes was substantially the same as the cost for financial reporting
purposes. The following summarizes the net unrealized appreciation
(depreciation) on investments, put options purchased, futures transactions and
short sale transactions for each Fund at October 31, 1997:
<TABLE>
<CAPTION>
GROSS GROSS
APPRECIATION DEPRECIATION NET
------------ ------------ ------------
<S> <C> <C> <C>
Strategy Fund............................ $ 5,417,188 $(14,556,064) $ (9,138,876)
Capital Value Fund....................... $30,039,563 $(37,507,136) $ (7,467,573)
</TABLE>
The following summarizes the capital loss carry forwards of each Fund at October
31, 1997:
<TABLE>
<CAPTION>
EXPIRING IN FISCAL YEAR STRATEGY FUND CAPITAL VALUE FUND
- ------------------------- ------------- ------------------
<S> <C> <C>
1999 -- $ 9,100,000
2000 $ 3,400,000 29,800,000
2001 8,800,000 17,800,000
2002 -- 56,700,000
2003 -- 9,200,000
2004 12,500,000 15,800,000
2005 14,900,000 14,200,000
----------- ------------
Total $39,600,000 $152,600,000
----------- ------------
----------- ------------
</TABLE>
4. DIVIDENDS:
In November and December 1997 the Company's Board of Directors declared ordinary
income dividends for the Strategy Fund as follows:
<TABLE>
<CAPTION>
AMOUNT PER SHARE
- ----------------------------------
<C> <C> <C> <C> <C>
CLASS O CLASS A CLASS C PAYABLE DATE RECORD DATE
- -------- --------- --------- ------------------ ------------------
$0.0500 $0.04837 $0.04263 November 28, 1997 November 19, 1997
$0.0500 $0.04842 $0.04232 December 29, 1997 December 18, 1997
</TABLE>
<PAGE>
COMSTOCK PARTNERS FUNDS, INC.
COMSTOCK PARTNERS STRATEGY FUND
COMSTOCK PARTNERS CAPITAL VALUE FUND
993 Lenox Drive, Suite 106
Lawrenceville, NJ 08648
INVESTMENT ADVISER
COMSTOCK PARTNERS, INC.
993 Lenox Drive, Suite 106
Lawrenceville, NJ 08648
SUB-INVESTMENT ADVISER (STRATEGY FUND)
THE DREYFUS CORPORATION
200 Park Avenue
New York, NY 10166
SUB-INVESTMENT ADVISER AND
ADMINISTRATOR (CAPITAL VALUE FUND)
THE DREYFUS CORPORATION
200 Park Avenue
New York, NY 10166
CUSTODIAN--DOMESTIC
THE BANK OF NEW YORK
90 Washington Street
New York, NY 10286
CUSTODIANS--INTERNATIONAL
BROWN BROTHERS HARRIMAN & CO. (STRATEGY FUND)
40 Water Street
Boston, MA 02109
THE BANK OF NEW YORK (CAPITAL VALUE FUND)
90 Washington Street
New York, NY 10286
ADMINISTRATOR (STRATEGY FUND)
PRINCETON ADMINISTRATORS, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
DISTRIBUTOR
PREMIER MUTUAL FUND SERVICES, INC.
60 State Street, Suite 1300
Boston, MA 02109
Tel. 1-800-221-7930, 1-617-557-3400
TRANSFER AGENT AND DIVIDEND
DISBURSING AGENT
DREYFUS TRANSFER, INC.
P.O. Box 9671
Providence, RI 02940-9671
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
787 Seventh Avenue
New York, NY 10019
LEGAL COUNSEL
SIMPSON THACHER & BARTLETT
(a partnership which includes
professional corporations)
425 Lexington Avenue
New York, NY 10017-3909
OFFICERS & DIRECTORS
Charles L. Minter,
Chief Executive Officer and
Chairman of the Board
M. Bruce Adelberg, Director
Sven B. Karlen, Jr., Director
E. W. Kelley, Director
Robert M. Smith, Director
W. Troy Hottenstein, Secretary
Robert C. Ringstad, Vice President,
Treasurer, Chief Financial Officer
and Assistant Secretary
- --------------------------------------------------------------------------------
General information regarding a Fund's portfolio, updated semi-monthly, is
available by calling the Fund's Distributor (see above).
This report is not authorized for use in connection with an offer of sale or a
solicitation of an offer to buy shares of a
Fund unless accompanied or preceded by a Fund's current prospectus. Past
performance results shown in this report
should not be considered a representation of future performance. Investment
return and principal value of shares will
fluctuate so that shares, when redeemed, may be worth more or less than their
original cost.
SHAREHOLDER INQUIRIES TEL. 1-800-554-4611
