COMSTOCK PARTNERS FUNDS, INC.
993 Lenox Drive
Suite 106
Lawrenceville, NJ 08648
107/634/607
503/502 SA 9810
COMSTOCK PARTNERS
FUNDS, INC.
------------------------------------------------
COMSTOCK PARTNERS
STRATEGY FUND
COMSTOCK PARTNERS
CAPITAL VALUE FUND
SEMI-ANNUAL REPORT
OCTOBER 31, 1998
<PAGE>
DEAR FELLOW SHAREHOLDER:
For the six months ended October 31, 1998, the Comstock Partners Strategy
Fund's Class O, A and C shares posted total returns of 1.04%, 0.91% and 0.60%,
respectively, and the Comstock Partners Capital Value Fund's Class A, B, C and R
shares posted total returns of -0.59%, -0.80%, -0.83% and -0.59%, respectively,
based upon net asset value per share. During the same period, the Standard &
Poor's 500 Composite Stock Price Index (S&P 500) posted a total return of -0.41%
and the Lehman Brothers Government/Corporate Bond Index rose 6.40%.*
As you are aware from past shareholder correspondence, both Funds have been
positioned to benefit from a bear market in the US stock market. We believe a
bear market started in mid-July and, in our opinion, should continue at least
into 1999. The decline of the US market after July contributed significantly to
the improved results of the Funds. The Funds lagged the S&P 500 after the fiscal
first quarter ended July 31, but substantially outperformed this index in the
second fiscal quarter ended October 31.* Although the market has rebounded
substantially from the October low, we believe the bear market has not ended and
will not end until the market returns to normal valuations from what we view as
the current extremely overvalued levels.
As stated in our June letter, we believe the deflation and declining
economies throughout the globe will leave virtually no country unaffected,
including the United States. Deflation is the opposite of inflation, whereby
goods and services cost less and the pricing power of corporations declines
substantially. The process starts with overinvestment and excess debt and
produces worldwide overcapacity. In our opinion, we are presently experiencing
deflation and believe that we cannot extricate ourselves from its effects
without severe economic pain as expressed in falling corporate profits and stock
market declines.
We believe that corporate earnings, which have grown far in excess of their
potential over the past 6 years, began reverting back to more normal levels in
the third quarter of 1998. We expect that the reported annual earnings of the
S&P 500 will be approximately $38-$40 per share for 1998 and we feel that these
earnings could decline by as much as 10% by the end of 1999 due to the
deflationary forces at work. These deflationary forces are very powerful and
could even overwhelm the liquidity provided by central bank rate cuts. In fact,
we have just witnessed 43 central bank rate cuts worldwide in October and
November, while December started off with a coordinated rate cut by 11
countries. In our opinion, this easing is unprecedented in the post-war period
and reflects worldwide overcapacity and pricing pressures.
Japan is still mired in its deflation and recession in the face of
substantial easing of interest rates over the past 9 years (short-term rates
have been reduced from 7% and now yield negative rates). Likewise, we view the
Federal Reserve's easing of interest rates in November as a symptom of
deflation, not a cure. This policy helps ease the pain, but the cycle of
deflation has to run its course. Furthermore, we believe that once the process
starts it will not be over quickly.
Because of this deflationary environment, we have maintained our Funds'
negative posture by positioning the Capital Value Fund with equity shorts, put
options and S&P 500 Index futures shorts, while using put options in the less
aggressively positioned Strategy Fund. In addition, based on our observance of
deflationary forces, we continue to see attractive opportunities in the US
Treasury bond market, in which we have significant positions in both Funds.
Due to the bearish stance we have taken over the past few years, each of
the Funds has accumulated a substantial capital loss carryforward (CLCF). As of
October 31, 1998, the CLCF in the Capital Value Fund was approximately $210
million and the CLCF in the Strategy Fund was approximately $54 million. These
CLCFs may be considered as an important asset of each Fund and its respective
shareholders. Although there are certain restrictions on their use, they would
allow the Funds to shelter from tax capital gains that may be realized, up to
the amounts and subject to the expiration dates of the CLCFs. To the extent the
CLCFs are utilized by a Fund to shelter capital gains, the Fund will not be
required to pay out these gains as a taxable distribution to shareholders.
Furthermore, the amounts of any such undistributed gains would be available to
the Funds for reinvestment. (An expiration schedule with respect to the CLCFs of
each Fund is outlined in Note 3 to the Financial Statements).
<PAGE>
The monthly dividend of five cents per share, which has been paid on shares
of the Strategy Fund, was reduced at the latest Board of Directors meeting. The
new dividend per share will no longer be fixed and will reflect the actual
monthly income earned by the Fund starting in December 1998. This monthly
dividend will be approximately 3 1/2 cents per share in December. The reasons
for the cut are due to (1) our concentration on capital gains opportunities
rather than ordinary income, due to the substantial CLCF and (2) the maturation
of some of the Fund's higher yielding securities and subsequent reinvestment at
lower rates due to the aforementioned decline in interest rates.
We believe strongly that the US market is extremely overvalued. As a
result, the Funds are structured to benefit from a US stock market decline.
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.
Lawrenceville, New Jersey
December 11, 1998
* PERFORMANCE INFORMATION:
Total return assumes the reinvestment of dividends and distributions and
excludes the effect of sales loads.
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. 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.
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, 1998
<TABLE>
<CAPTION>
S&P MOODY'S SHARES HELD/ VALUE
RATING RATING FACE AMOUNT ISSUE (NOTE 1A)
<S> <C> <C> <C> <C> <C>
BONDS
Corporate
Convertible Bonds
- -- 1.1% UNR UNR $ 750,000 Ashanti Capital, Ltd. 5.500% due 3/15/2003 $ 562,500
UNR UNR 500,000 TVX Gold, Inc. 5.000% due 3/28/2002 311,250
-----------
873,750
-----------
Foreign Government
Obligations --
2.1% UNR Aaa DEM 2,600,000 Bundesrepublik Deutschland 8.875% due 12/20/2000 1,746,477
-----------
US Government
Obligations --
65.0% AAA Aaa $ 8,950,000 United States Treasury Bond 6.375% due 8/15/2027 10,333,055
-----------
United States Treasury Notes:
AAA Aaa 8,315,000 8.875% due 11/15/1998 8,325,394
AAA Aaa 34,310,000 8.875% due 2/15/1999 34,712,070
-----------
43,037,464
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN BONDS (cost $56,171,329) -- 68.2% 55,990,746
- ---------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS
Country Funds --
0.5% 77,600 Lazard Vietnam Fund, Ltd. (a) 131,920
250,000 Vietnam Enterprise Investment Fund, Ltd., Class C
(a)(b) 253,750
-----------
385,670
-----------
Mining -- 11.2% 32,508 AngloGold Limited, ADR 812,700
100,000 Barrick Gold Corporation 2,137,500
61,500 Franco-Nevada Mining Corp., Ltd. (d) 1,182,539
42,700 Getchell Gold Corporation (a) 747,250
64,593 Gold Fields Ltd., ADR (a) 447,307
100,000 Harmony Gold Mining, Ltd., ADR (a) 518,750
133,200 Homestake Mining Company 1,581,750
84,200 Newmont Mining Corporation 1,789,250
-----------
9,217,046
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN COMMON STOCKS (cost $10,517,168)-- 11.7% 9,602,716
- ---------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS
Mining -- 0.3% 6,000 Amax Gold, Inc. $3.75 convertible pfd. 243,375
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN PREFERRED STOCKS (cost $301,920)-- 0.3% 243,375
- ---------------------------------------------------------------------------------------------------------------------------------
HORT-TERM
SECURITIES (C)
US Government United States Treasury Bills:
Obligations --
15.8% AAA Aaa $ 1,200,000 3.730% due 3/04/99 1,182,514
AAA Aaa 9,700,000 3.940% due 3/04/99 9,558,656
AAA Aaa 750,000 3.770% due 3/11/99 738,509
AAA Aaa 1,250,000 4.590% due 3/11/99 1,230,848
AAA Aaa 280,000 4.625% due 3/11/99 275,710
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SHORT-TERM SECURITIES (cost $12,998,523) -- 15.8% 12,986,237
- ---------------------------------------------------------------------------------------------------------------------------------
Total investments (cost $79,988,940) -- 96.0% 78,823,074
Put options purchased (cost $6,810,758) -- 3.3%+ 2,715,563
Variation margin on open futures contracts -- (0.1)%++ (43,575)
Other assets less liabilities -- 0.8% 607,932
-----------
Net Assets -- 100.0% $82,102,994
-----------
-----------
</TABLE>
See notes to financial statements.
<PAGE>
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Comstock Partners Funds, Inc.
Strategy Fund Schedule of Investments (Unaudited) (concluded)
As of October 31, 1998
+ Put options purchased as of October 31, 1998 are as follows:
<TABLE>
<CAPTION>
NUMBER OF EXPIRATION DATE/ VALUE
CONTRACTS ISSUE EXERCISE PRICE (NOTE 1A)
<C> <C> <S> <C>
450 S&P 500 Index Dec. 98/850 $ 129,375
191 S&P 500 Index Dec. 98/900 105,050
590 S&P 500 Index Dec. 98/950 545,750
530 S&P 500 Index Dec. 98/1025 901,000
169 S&P 500 Index Dec. 98/1050 378,138
150 S&P 500 Index Mar. 99/1025 656,250
-----------
Total put options purchased
(cost $6,810,758) $ 2,715,563
-----------
-----------
</TABLE>
++ Open futures contracts as of October 31, 1998 are as follows:
<TABLE>
<CAPTION>
UNREALIZED
NUMBER OF VALUE APPRECIATION
CONTRACTS ISSUE EXPIRATION DATE (NOTE 1A) (DEPRECIATION)
<C> <C> <S> <C> <C> <C>
FUTURES PURCHASED: 60 S&P 500 Index Dec. 98 $ 16,578,000 $ (43,575)
------------
------------
<FN>
UNR -- Unrated by Standard & Poor's or Moody's.
DEM -- German Deutschmark.
ADR -- American Depositary Receipt.
(a) Non-income producing.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31,
1998 this security amounted to $253,750, or 0.31% of net assets.
(c) 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.
(d) Canadian dollar denominated security.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Comstock Partners Funds, Inc.
Capital Value Fund Schedule of Investments (Unaudited) As of October 31, 1998
<TABLE>
<CAPTION>
S&P MOODY'S SHARES HELD/ VALUE
RATING RATING FACE AMOUNT ISSUE (NOTE 1A)
<S> <C> <C> <C> <C> <C>
BONDS
US Government U.S. Treasury Bonds,
Obligations --
12.9% AAA Aaa $12,550,000 6.375% due 8/15/2027 $ 14,489,367
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN BONDS (cost $13,232,359) -- 12.9% 14,489,367
- ----------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS
Country Funds --
0.4% 87,000 Lazard Vietnam Fund, Ltd. (a) 147,900
Vietnam Enterprise Investment Fund, Ltd., Class C
250,000 (a)(b) 253,750
-------------
401,650
-------------
Foreign -- 1.4% 84,000 Franco-Nevada Mining 1,613,455
-------------
Mining -- 10.0% 21,872 AngloGold Limited, ADR 546,800
28,926 Ashanti Goldfields, GDR 247,679
128,000 Barrick Gold Corporation 2,736,000
84,000 Getchell Gold Corporation (a) 1,470,000
114,426 Gold Fields Ltd., ADR (a) 792,400
120,000 Harmony Gold Mining, Ltd., ADR (a) 622,500
182,000 Homestake Mining Company 2,161,250
123,800 Newmont Mining Corporation 2,630,750
-------------
11,207,379
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN COMMON STOCKS (cost $16,076,503) -- 11.8% 13,222,484
- ----------------------------------------------------------------------------------------------------------------------------------
SHORT TERM
SECURITIES (C)
US Government United States Treasury Bills:
Obligations --
67.2% AAA Aaa $ 293,000 4.94% due 11/05/98 292,894
AAA Aaa 390,000 4.88% due 11/12/98 389,587
AAA Aaa 494,000 4.90% due 11/19/98 493,155
AAA Aaa 582,000 4.82% due 11/27/98 580,615
AAA Aaa 26,833,000 4.62% due 12/17/98 26,701,787
AAA Aaa 1,177,000 4.31% due 12/24/98 1,170,020
AAA Aaa 2,122,000 4.14% due 12/31/98 2,107,740
AAA Aaa 507,000 3.60% due 1/07/99 503,167
AAA Aaa 41,009,000 3.95% due 1/14/99 (d)(e) 40,662,064
AAA Aaa 1,357,000 3.77% due 1/21/99 1,343,335
AAA Aaa 1,111,000 4.07% due 1/28/99 1,099,668
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SHORT-TERM SECURITIES (cost $75,331,240) -- 67.2% 75,344,032
- ----------------------------------------------------------------------------------------------------------------------------------
Total investments (cost $104,640,102) -- 91.9% 103,055,883
Put options purchased (cost $9,294,535) -- 4.3%+ 4,878,613
Variation margin on open futures contracts -- (0.3%)++ (355,939)
Other assets less liabilities -- 4.1% 4,617,936
-------------
Net Assets -- 100.0% $112,196,493
-------------
-------------
</TABLE>
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Comstock Partners Funds, Inc.
Capital Value Fund Schedule of Investments (Unaudited) (concluded)
As of October 31, 1998
+ Put options purchased as of October 31, 1998 are as follows:
<TABLE>
<CAPTION>
NUMBER OF EXPIRATION DATE/ VALUE
CONTRACTS ISSUE EXERCISE PRICE (NOTE 1A)
<C> <C> <S> <C>
585 S&P 500 Index Dec. 98/1025 $ 994,500
406 S&P 500 Index Dec. 98/1050 908,425
500 S&P 500 Index Dec. 98/850 143,750
227 S&P 500 Index Dec. 98/900 124,850
317 S&P 500 Index Mar. 99/995 1,153,088
1,000 S&P 500 Index Futures Dec. 98/1000 1,554,000
-----------
Total Put Options Purchased
(cost $9,294,535) $ 4,878,613
-----------
-----------
</TABLE>
++ Open futures contracts as of October 31, 1998 are as follows:
<TABLE>
<CAPTION>
UNREALIZED
NUMBER OF VALUE APPRECIATION
CONTRACTS ISSUE EXPIRATION DATE (NOTE 1A) (DEPRECIATION)
<C> <C> <S> <C> <C> <C>
FUTURES SOLD: 46 S&P 500 Index Dec. 98 $(12,709,800) $ (832,550)
FUTURES PURCHASED: 35 German Deutschemark Dec. 98 2,649,500 50,750
26 Swiss Francs Dec. 98 2,416,700 145,275
------------
$ (636,525)
------------
------------
<FN>
GDR -- Global Depositary Receipt.
ADR -- American Depositary Receipt.
(a) Non-income producing.
(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, 1998 these securities amounted to $253,750, or 0.23% of net assets.
(c) 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.
(d) Partially held by broker as collateral for open short positions.
(e) Partially held by the custodian in a segregated account as collateral for
open futures positions.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Comstock Partners Funds, Inc.
Capital Value Fund Statement of Securities Sold Short (Unaudited)
As of October 31, 1998
<TABLE>
<CAPTION>
VALUE
COMMON STOCKS SHARES ISSUE (NOTE 1A)
<S> <C> <C> <C>
Finance -- 0.7% 13 Berkshire Hathaway, Cl. A $ 838,500
------------
Manufacturing --16.1% 50,000 Alcan Aluminium 1,265,625
20,400 Boeing 765,000
29,200 Compaq Computer 923,450
63,000 Cooper Tire & Rubber 1,047,375
21,800 Dell Computer 1,430,625
13,000 Dow Chemical 1,217,125
17,500 Georgia - Pacific 905,625
32,000 Gillette 1,438,000
12,500 Harnischfeger Industries 117,969
12,300 Intel 1,097,006
26,000 International Flavors & Fragrances 973,375
37,000 Itron 286,750
16,000 Kellogg 528,000
19,300 Kerr-McGee 769,587
12,000 Kimberly-Clark 579,000
34,000 Lattice Semiconductor 1,156,000
25,000 Mattel 896,875
11,500 Minnesota Mining & Manufacturing 920,000
40,900 Newbridge Networks 838,450
24,200 OEA 270,738
23,000 Seagate Technology 606,625
------------
18,033,200
------------
Retail -- 4.1% 23,000 Home Depot 1,000,500
25,000 Toys R Us 489,062
15,000 Wal-Mart Stores 1,035,000
39,000 Wendy's International 819,000
31,000 Whole Foods Market 1,241,938
------------
4,585,500
------------
Services -- 5.1% 31,000 Cabletron Systems 352,625
31,600 Circus Circus Enterprises 353,525
33,000 Disney 888,937
24,300 Hilton Hotels 487,519
10,400 Microsoft 1,101,100
16,000 Starwood Hotels & Resort 453,000
4,200 Telephone & Data Systems 167,475
14,500 Yahoo! 1,897,234
------------
5,701,415
------------
Wholesale Trade -- 1.1% 13,800 Motorola 717,600
30,000 Pep Boys Manny Moe & Jack 468,750
------------
1,186,350
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES SOLD SHORT (proceeds $34,653,640) -- 27.1% $30,344,965
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Comstock Partners Funds, Inc. Statements of Assets and Liabilities
(Unaudited) As of October 31, 1998
<TABLE>
<CAPTION>
STRATEGY CAPITAL
FUND VALUE FUND
<S> <C> <C>
------------ ------------
ASSETS:
Investments at value (cost $79,988,940 and
$104,640,102, respectively) (Note 1a)............... $ 78,823,074 $103,055,883
Put options purchased (cost $6,810,758 and
$9,294,535, respectively) (Note 1a)................. 2,715,563 4,878,613
Cash................................................ 192,934 372,636
Receivable from brokers for proceeds on securities
sold short.......................................... -- 34,653,640
Receivables:
Interest........................................ 1,235,603 213,184
Capital stock sold.............................. 425,148 41,099
Securities sold................................. 90,650 148,874
Dividends....................................... 6,660 9,100
Other assets........................................ 10,742 26,844
------------ ------------
Total assets.................................... 83,500,374 143,399,873
------------ ------------
LIABILITIES:
Payables:
Short sales (proceeds $34,653,640).............. -- 30,344,965
Dividends to shareholders (Note 1f)............. 702,106 --
Capital stock redeemed.......................... 399,506 182,663
Investment advisory fees (Note 2)............... 45,318 42,683
Sub-investment advisory fees (Note 2)........... -- 37,348
Administrative fees (Note 2).................... 18,882 --
Service and Distribution Plan fees (Note 2)..... 7,477 49,675
Due to Dreyfus Transfer, Inc. (Note 2).......... 33,015 35,675
Variation margin on open futures contracts...... 43,575 355,939
Accrued expenses and other liabilities.............. 147,501 154,432
------------ ------------
Total liabilities............................... 1,397,380 31,203,380
------------ ------------
NET ASSETS.......................................... $ 82,102,994 $112,196,493
------------ ------------
------------ ------------
NET ASSETS CONSIST OF:
Paid in capital................................. $162,625,298 $363,116,259
Undistributed net investment income............. 1,011,766 5,456,880
Accumulated net realized loss on investments,
put options purchased, futures, short sale
transactions and foreign currency
transactions.................................. (76,232,239) (254,048,655)
Net unrealized appreciation on short sale
transactions.................................... -- 4,308,675
Net unrealized depreciation on investments, put
options purchased and
futures transactions.......................... (5,304,636) (6,636,666)
Net unrealized appreciation on foreign currency
transactions.................................... 2,805 --
------------ ------------
NET ASSETS.......................................... $ 82,102,994 $112,196,493
------------ ------------
------------ ------------
SHARES OF COMMON STOCK OUTSTANDING:
Class O shares:
150 million of $0.001 par value authorized.... 10,723,310 --
------------ ------------
------------ ------------
Class A shares:
200 million of $0.001 par value authorized.... 2,646,700 --
------------ ------------
------------ ------------
125 million of $0.001 par value authorized.... -- 15,878,249
------------ ------------
------------ ------------
Class B shares:
125 million of $0.001 par value authorized.... -- 4,652,303
------------ ------------
------------ ------------
Class C shares:
200 million of $0.001 par value authorized.... 725,281 --
------------ ------------
------------ ------------
125 million of $0.001 par value authorized.... -- 1,969,103
------------ ------------
------------ ------------
Class R shares:
125 million of $0.001 par value authorized.... -- 5,523
------------ ------------
------------ ------------
NET ASSET VALUE PER SHARE:
Class O shares:
$62,469,721 / 10,723,310 shares............... $ 5.83 --
------------ ------------
------------ ------------
Class A shares:
$15,413,268 / 2,646,700 shares and $79,808,343
/ 15,878,249 shares, respectively........... $ 5.82 $ 5.03
------------ ------------
------------ ------------
Class B shares:
$22,996,296 / 4,652,303 shares................ -- $ 4.94
------------ ------------
------------ ------------
Class C shares:
$4,220,005 / 725,281 shares and $9,364,120 /
1,969,103 shares, respectively................ $ 5.82 $ 4.76
------------ ------------
------------ ------------
Class R shares:
$27,734 / 5,523 shares........................ -- $ 5.02
------------ ------------
------------ ------------
</TABLE>
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Comstock Partners Funds, Inc. Statements of Operations for the Six Months Ended
October 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
STRATEGY CAPITAL
FUND VALUE FUND
<S> <C> <C>
------------ ------------
INVESTMENT INCOME (NOTE 1E):
Interest and discount earned........................ $ 2,990,949 $ 2,948,678
Dividends........................................... 32,017 22,916
------------ ------------
Total investment income......................... 3,022,966 2,971,594
------------ ------------
EXPENSES:
Investment advisory fees (Note 2)................... 262,075 211,231
Administrative fees (Note 2)........................ 150,000 --
Dividends on securities sold short.................. -- 604,821
Transfer agent fees (Note 2)........................ 176,557 127,361
Sub-investment advisory fees (Note 2)............... -- 184,827
Service and Distribution Plan fees (Note 2)......... 33,139 260,206
Professional fees................................... 40,323 45,979
Printing and shareholder reports.................... 8,972 14,258
Registration fees................................... 10,344 21,801
Insurance........................................... 8,341 14,771
Directors' fees and expenses........................ 15,604 20,400
Custodian fees...................................... 3,931 7,857
Other operating expenses............................ 2,731 957
------------ ------------
Total expenses.................................. 712,017 1,514,469
Waiver of administrative fees (Note 2).......... (40,802) --
------------ ------------
Net expenses.................................... 671,215 1,514,469
------------ ------------
NET INVESTMENT INCOME............................... 2,351,751 1,457,125
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.................................... (7,031,206) (13,098,555)
Net realized loss on short sale transactions........ -- (363,936)
Net realized gain (loss) on foreign currency
transactions........................................ (196,199) 232
Change in net unrealized depreciation
on investments, put options purchased and
futures transactions............................ 5,503,181 7,946,066
Change in net unrealized appreciation on short sale
transactions........................................ -- 786,131
Change in net unrealized appreciation (depreciation)
on foreign currency transactions.................... 2,890 (229)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS....................... $ 630,417 $ (3,273,166)
------------ ------------
------------ ------------
</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, 1998 YEAR ENDED OCTOBER 31, 1998 YEAR ENDED
(UNAUDITED) APRIL 30, 1998 (UNAUDITED) APRIL 30, 1998
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
OPERATIONS: Net investment income.......... $ 2,351,751 $ 8,077,426 $ 1,457,125 $ 6,544,573
Net realized loss on
investments, put options
purchased and futures
transactions................. (7,031,206) (27,577,080) (13,098,555) (62,173,921)
Net realized loss on short sale
transactions................. -- -- (363,936) (12,832,985)
Net realized gain (loss) on
foreign currency
transactions................. (196,199) (740,328) 232 527,134
Change in net unrealized
depreciation on investments,
put options purchased and
futures transactions......... 5,503,181 (1,114,320) 7,946,066 9,251,284
Change in net unrealized
appreciation on short sale
transactions................. -- -- 786,131 (2,948,168)
Change in net unrealized
appreciation (depreciation)
on foreign currency
transactions................. 2,890 3,070 (229) 33,277
------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from
operations................... 630,417 (21,351,232) (3,273,166) (61,598,806)
------------ ------------ ------------ ------------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS: Net investment income
Class O shares............... (3,355,692) (8,610,093) -- --
Class A shares............... (795,647) (2,388,760) -- (12,466,331)
Class B shares............... -- -- -- (4,682,782)
Class C shares............... (117,053) (318,865) -- (1,564,172)
Class R shares............... -- -- -- (3,942)
------------ ------------ ------------ ------------
Net decrease in net assets
resulting from dividends and
distributions................ (4,268,392) (11,317,718) -- (18,717,227)
------------ ------------ ------------ ------------
CAPITAL STOCK
TRANSACTIONS: Net proceeds from shares sold:
Class A shares............... 4,490,912 8,461,712 48,749,472 89,446,461
Class B shares............... -- -- 6,946,027 7,876,880
Class C shares............... 3,345,041 2,009,142 4,279,579 13,818,333
Class R shares............... -- -- 280 6,595
Dividends and distributions
reinvested:
Class O shares............... 636,359 1,697,713 -- --
Class A shares............... 337,354 819,637 -- 8,919,796
Class B shares............... -- -- -- 3,073,203
Class C shares............... 36,728 75,612 -- 530,907
Class R shares............... -- -- -- 3,840
Cost of shares redeemed:
Class O shares............... (7,350,226) (40,070,923) -- --
Class A shares............... (6,476,540) (27,719,716) (30,548,890) (140,910,685)
Class B shares............... -- -- (9,970,120) (28,090,811)
Class C shares............... (622,087) (12,326,541) (2,730,533) (8,437,377)
Class R shares............... -- -- -- (69,483)
------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from capital
stock transactions........... (5,602,459) (67,053,364) 16,725,815 (53,832,341)
------------ ------------ ------------ ------------
Increase (decrease) in net
assets....................... (9,240,434) (99,722,314) 13,452,649 (134,148,374)
NET ASSETS: Beginning of period............ 91,343,428 191,065,742 98,743,844 232,892,218
------------ ------------ ------------ ------------
End of period.................. $ 82,102,994 $ 91,343,428 $112,196,493 $ 98,743,844
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Undistributed net investment
income....................... $ 1,011,766 $ 2,928,407 $ 5,456,880 $ 3,999,755
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</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, 1998 YEAR ENDED OCTOBER 31, 1998 YEAR ENDED
(UNAUDITED) APRIL 30, 1998 (UNAUDITED) APRIL 30, 1998
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
CAPITAL STOCK
TRANSACTIONS: Shares sold:
Class A shares............... 737,885 1,196,510 8,955,035 13,723,148
Class B shares............... -- -- 1,306,851 1,254,106
Class C shares............... 527,490 275,260 823,437 2,123,191
Class R shares............... -- -- 56 1,138
Shares issued for dividends and
distributions reinvested:
Class O shares............... 108,171 243,622 -- --
Class A shares............... 52,171 118,404 -- 1,554,110
Class B shares............... -- -- -- 541,057
Class C shares............... 6,153 10,533 -- 95,751
Class R shares............... -- -- -- 672
Shares redeemed:
Class O shares............... (1,211,512) (5,756,722) -- --
Class A shares............... (1,091,896) (3,945,162) (5,817,127) (21,201,003)
Class B shares............... -- -- (1,910,626) (4,189,733)
Class C shares............... (102,249) (1,673,545) (525,686) (1,423,063)
Class R shares............... -- -- -- (9,912)
------------ ------------ ------------ ------------
Net increase (decrease) in
shares outstanding........... (973,787) (9,531,100) 2,831,940 (7,530,538)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</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 FOR THE YEAR
ENDED OCTOBER 31, 1998 ENDED
(UNAUDITED) APRIL 30, 1998
---------------------------------- ----------------------------------
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............................. $ 6.06 $ 6.06 $ 6.06 $ 7.77 $ 7.77 $ 7.74
-------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (1)........... 0.17 0.16 0.13 0.43 0.42 0.37
Net realized and unrealized gain
(loss) on investments, put options
purchased, futures transactions and
foreign currency transactions...... (0.10) (0.11) (0.10) (1.54) (1.55) (1.54)
-------- -------- -------- -------- -------- --------
Total from investment
operations....................... 0.07 0.05 0.03 (1.11) (1.13) (1.17)
-------- -------- -------- -------- -------- --------
LESS DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment
income............................. (0.30) (0.29) (0.27) (0.60) (0.58) (0.51)
Distributions from realized gains on
foreign currency transactions...... -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total dividends and
distributions.................... (0.30) (0.29) (0.27) (0.60) (0.58) (0.51)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD...... $ 5.83 $ 5.82 $ 5.82 $ 6.06 $ 6.06 $ 6.06
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Total investment return (2)......... (1.95)% (2.17)% (2.59)% (14.88)% (15.11)% (15.61)%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
RATIOS/SUPPLEMENTARY DATA
Net assets, end of period (000
omitted)........................... $ 62,470 $ 15,413 $ 4,220 $ 71,692 $ 17,871 $ 1,780
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Ratio of expenses to average net
assets............................. 1.46%(4) 1.71%(4) 2.41%(4) 1.31% 1.55% 2.29%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Decrease reflected in above expense
ratios due to waiver of
administrative fees................ 0.09%(4) 0.09%(4) 0.09%(4) 0.01% 0.01% 0.01%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Ratio of net investment income to
average
net assets......................... 5.47%(4) 5.21%(4) 4.25%(4) 6.01% 5.79% 5.08%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Portfolio turnover rate............. 23% 23% 23% 227% 227% 227%
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
<CAPTION>
FOR THE YEAR
ENDED
APRIL 30, 1997
-------------------------------------
CLASS O CLASS A CLASS C
----------- -------- --------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $ 8.78 $ 8.78 $ 8.77
----------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (1)........... 0.78 0.54 0.45
Net realized and unrealized gain
(loss) on investments, put options
purchased, futures transactions and
foreign currency transactions...... (1.19) (0.96) (0.95)
----------- -------- --------
Total from investment
operations....................... (0.41) (0.42) (0.50)
----------- -------- --------
LESS DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment
income............................. (0.47) (0.46) (0.41)
Distributions from realized gains on
foreign currency transactions...... (0.13) (0.13) (0.12)
----------- -------- --------
Total dividends and
distributions.................... (0.60) (0.59) (0.53)
----------- -------- --------
NET ASSET VALUE, END OF PERIOD...... $ 7.77 $ 7.77 $ 7.74
----------- -------- --------
----------- -------- --------
Total investment return (2)......... (4.85)% (5.10)% (5.94)%
----------- -------- --------
----------- -------- --------
RATIOS/SUPPLEMENTARY DATA
Net assets, end of period (000
omitted)........................... $ 134,719 $ 43,327 $ 13,020
----------- -------- --------
----------- -------- --------
Ratio of expenses to average net
assets............................. 1.18% 1.43% 2.14%
----------- -------- --------
----------- -------- --------
Decrease reflected in above expense
ratios due to waiver of
administrative fees................ -- -- --
----------- -------- --------
----------- -------- --------
Ratio of net investment income to
average
net assets......................... 6.80% 6.55% 5.81%
----------- -------- --------
----------- -------- --------
Portfolio turnover rate............. 126% 126% 126%
----------- -------- --------
----------- -------- --------
<FN>
+ 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) Based on average shares outstanding.
(2) 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.
(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.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
Comstock Partners Funds, Inc. Strategy 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 FOR THE YEAR
ENDED ENDED ENDED
APRIL 30, 1996 APRIL 30, 1995 APRIL 30, 1994
---------------------------------- --------------------- ---------------------
CLASS O CLASS A CLASS C+ CLASS O CLASS A CLASS O CLASS A
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD......................... $ 9.10 $ 9.10 $ 9.00 $ 9.40 $ 9.41 $ 9.27 $ 9.27
-------- -------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income (1)....... 0.76 0.57 0.37 0.66 0.52 0.77 0.68
Net realized and unrealized gain
(loss) on investments, put
options purchased, futures
transactions and foreign
currency transactions.......... (0.53) (0.36) (0.22) (0.44) (0.34) 0.15 0.22
-------- -------- -------- -------- -------- -------- --------
Total from investment
operations................... 0.23 0.21 0.15 0.22 0.18 0.92 0.90
-------- -------- -------- -------- -------- -------- --------
LESS DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment
income......................... (0.55) (0.53) (0.38) (0.52) (0.49) (0.77) (0.74)
Distributions from realized
gains on foreign currency
transactions................... -- -- -- -- -- (0.02) (0.02)
-------- -------- -------- -------- -------- -------- --------
Total dividends and
distributions................ (0.55) (0.53) (0.38) (0.52) (0.49) (0.79) (0.76)
-------- -------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF
PERIOD......................... $ 8.78 $ 8.78 $ 8.77 $ 9.10 $ 9.10 $ 9.40 $ 9.41
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
Total investment return (2)..... 2.66% 2.40% 1.96%(3) 2.39% 1.94% 10.13% 9.91%
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
RATIOS/SUPPLEMENTARY DATA
Net assets, end of period (000
omitted)....................... $224,148 $ 53,652 $ 317 $329,624 $ 65,874 $464,937 $ 91,454
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
Ratio of expenses to average net
assets......................... 1.23% 1.48% 2.28%(4) 1.14% 1.46% 1.07% 1.40%
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
Decrease reflected in above
expense ratios due to waiver of
administrative fees............ -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
Ratio of net investment income
to average net assets.......... 6.56% 6.33% 5.79%(4) 6.19% 5.83% 7.57% 6.85%
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
Portfolio turnover rate......... 96% 96% 96% 100% 100% 31% 31%
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
<FN>
+ 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) Based on average shares outstanding.
(2) 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.
(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.
</FN>
</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, 1998
(UNAUDITED)
-----------------------------------------------
CLASS A CLASS B CLASS C CLASS R
------- ------- ------- --------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $ 5.06 $ 4.99 $ 4.80 $ 5.05
------- ------- ------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)........ 0.26 (0.03) 0.17 0.08
Net realized and unrealized gain
(loss) on investments, put options
purchased, futures transactions,
short sale transactions and foreign
currency transactions.............. (0.29) (0.02) (0.21) (0.11)
------- ------- ------- --------
Total from investment
operations....................... (0.03) (0.05) (0.04) (0.03)
------- ------- ------- --------
LESS DIVIDENDS
Dividends from net investment
income............................. -- -- -- --
------- ------- ------- --------
NET ASSET VALUE, END OF PERIOD...... $ 5.03 $ 4.94 $ 4.76 $ 5.02
------- ------- ------- --------
------- ------- ------- --------
Total investment return (2)......... (.59)% (.80)% (.83)% (.59)%
------- ------- ------- --------
------- ------- ------- --------
RATIOS/SUPPLEMENTARY DATA
Net assets, end of period (000
omitted)........................... $79,808 $22,996 $ 9,364 $ 28
------- ------- ------- --------
------- ------- ------- --------
Ratio of operating expenses to
average
net assets......................... 0.75%(3) 1.12%(3) 1.13%(3) 0.62%(3)
------- ------- ------- --------
------- ------- ------- --------
Ratio of interest expense and
dividends on securities sold short
to average net assets.............. 0.56%(3) 0.62%(3) 0.57%(3) 0.59%(3)
------- ------- ------- --------
------- ------- ------- --------
Ratio of net investment income to
average net assets................. 1.53%(3) 1.10%(3) 1.13%(3) 1.63%(3)
------- ------- ------- --------
------- ------- ------- --------
Portfolio turnover rate............. 128%(3) 128%(3) 128%(3) 128%(3)
------- ------- ------- --------
------- ------- ------- --------
<CAPTION>
FOR THE YEAR ENDED
APRIL 30, 1998
---------------------------------------------------
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 (loss)........ 0.31(1) 0.25(1) 0.23(1) 0.33(1)
Net realized and unrealized gain
(loss) on investments, put options
purchased, futures transactions,
short sale transactions and foreign
currency transactions.............. (2.91) (2.85) (2.78) (2.91)
----------- ------- -------- -------
Total from investment
operations....................... (2.60) (2.60) (2.55) (2.58)
----------- ------- -------- -------
LESS DIVIDENDS
Dividends from net investment
income............................. (0.96) (0.86) (0.96) (0.99)
----------- ------- -------- -------
NET ASSET VALUE, END OF PERIOD...... $ 5.06 $ 4.99 $ 4.80 $ 5.05
----------- ------- -------- -------
----------- ------- -------- -------
Total investment return (2)......... (31.48)% (32.01)% (32.10)% (31.28)%
----------- ------- -------- -------
----------- ------- -------- -------
RATIOS/SUPPLEMENTARY DATA
Net assets, end of period (000
omitted)........................... $ 64,452 $26,235 $ 8,029 $ 28
----------- ------- -------- -------
----------- ------- -------- -------
Ratio of operating expenses to
average
net assets......................... 1.35% 2.10% 2.08% 1.11%
----------- ------- -------- -------
----------- ------- -------- -------
Ratio of interest expense and
dividends on securities sold short
to average net assets.............. 0.24% 0.24% 0.21% 0.26%
----------- ------- -------- -------
----------- ------- -------- -------
Ratio of net investment income to
average net assets................. 4.49% 3.74% 3.70% 4.73%
----------- ------- -------- -------
----------- ------- -------- -------
Portfolio turnover rate............. 359% 359% 359% 359%
----------- ------- -------- -------
----------- ------- -------- -------
<CAPTION>
FOR THE YEAR ENDED
APRIL 30, 1997
---------------------------------------------------
CLASS A CLASS B CLASS C CLASS R
----------- -------- ------- -------
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $ 10.54 $ 10.38 $ 10.24 $ 10.53
----------- -------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)........ 0.59 0.54 0.57 0.82(1)
Net realized and unrealized gain
(loss) on investments, put options
purchased, futures transactions,
short sale transactions and foreign
currency transactions.............. (1.92) (1.93) (1.91) (2.13)
----------- -------- ------- -------
Total from investment
operations....................... (1.33) (1.39) (1.34) (1.31)
----------- -------- ------- -------
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 (2)......... (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%
----------- -------- ------- -------
----------- -------- ------- -------
</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 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 (2).... 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%(3) 1.18%(3) 1.28%(3) 0.61%(3)
-------- ------- ------- -------
-------- ------- ------- -------
Ratio of interest expense and
dividends on securities sold
short to average net assets... 0.18%(3) 0.19%(3) 0.18%(3) 0.17%(3)
-------- ------- ------- -------
-------- ------- ------- -------
Ratio of net investment income
to average net assets......... 2.13%(3) 1.70%(3) 1.71%(3) 2.28%(3)
-------- ------- ------- -------
-------- ------- ------- -------
Portfolio turnover rate........ 56%(3) 56%(3) 56%(3) 56%(3)
-------- ------- ------- -------
-------- ------- ------- -------
<CAPTION>
FOR THE YEAR
ENDED
SEPTEMBER 30, 1995
----------------------------------------------------
CLASS A CLASS B CLASS C+ CLASS R+
----------- ------- -------- --------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD........................ $ 11.88 $ 11.69 $ 10.64 $ 10.84
----------- ------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income.......... 0.36 0.31 0.02 0.04
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)
----------- ------- -------- --------
Total from investment
operations.................. (1.01) (1.07) (0.23 ) (0.22)
----------- ------- -------- --------
LESS DIVIDENDS
Dividends from net investment
income........................ (0.26) (0.21) -- --
----------- ------- -------- --------
NET ASSET VALUE, END OF
PERIOD........................ $ 10.61 $ 10.41 $ 10.41 $ 10.62
----------- ------- -------- --------
----------- ------- -------- --------
Total investment return (2).... (8.58)% (9.27)% (2.26 )% (2.03)%
----------- ------- -------- --------
----------- ------- -------- --------
RATIOS/SUPPLEMENTARY DATA
Net assets, end of period (000
omitted)...................... $ 271,052 $87,847 $ 1 $ 1
----------- ------- -------- --------
----------- ------- -------- --------
Ratio of operating expenses to
average net assets............ 1.24% 1.99% 0.26 %(3) 0.14%(3)
----------- ------- -------- --------
----------- ------- -------- --------
Ratio of interest expense and
dividends on securities sold
short to average net assets... 0.45% 0.45% 0.06 %(3) 0.04%(3)
----------- ------- -------- --------
----------- ------- -------- --------
Ratio of net investment income
to average net assets......... 3.61% 2.86% 0.23 %(3) 0.38%(3)
----------- ------- -------- --------
----------- ------- -------- --------
Portfolio turnover rate........ 55% 55% 55 % 55%
----------- ------- -------- --------
----------- ------- -------- --------
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
SEPTEMBER 30, 1994 SEPTEMBER 30, 1993
------------------------- ----------------------
CLASS A CLASS B CLASS A CLASS B+
----------- -------- -------- --------
NET ASSET VALUE, BEGINNING OF
PERIOD........................ $ 11.42 $ 11.32 $ 12.41 $ 10.58
----------- -------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income.......... 0.24 0.23 0.24 0.03
Net realized and unrealized
gain (loss) on investments,
put options purchased, futures
transactions, short sale
transactions and foreign
currency transactions......... 0.46 0.38 (0.62) 0.71
----------- -------- -------- --------
Total from investment
operations.................. 0.70 0.61 (0.38) 0.74
----------- -------- -------- --------
LESS DIVIDENDS
Dividends from net investment
income........................ (0.24) (0.24) (0.61) --
----------- -------- -------- --------
NET ASSET VALUE, END OF
PERIOD........................ $ 11.88 $ 11.69 $ 11.42 $ 11.32
----------- -------- -------- --------
----------- -------- -------- --------
Total investment return (2).... 6.14% 5.35% (2.70)% 6.99 %
----------- -------- -------- --------
----------- -------- -------- --------
RATIOS/SUPPLEMENTARY DATA
Net assets, end of period (000
omitted)...................... $ 402,708 $108,532 $412,316 $30,378
----------- -------- -------- --------
----------- -------- -------- --------
Ratio of operating expenses to
average net assets............ 1.21% 1.99% 1.23% 1.49 %(3)
----------- -------- -------- --------
----------- -------- -------- --------
Ratio of interest expense and
dividends on securities sold
short to average net assets... 0.39% 0.40% 0.45% 0.31 %(3)
----------- -------- -------- --------
----------- -------- -------- --------
Ratio of net investment income
to average net assets......... 2.06% 1.39% 1.94% 0.83 %(3)
----------- -------- -------- --------
----------- -------- -------- --------
Portfolio turnover rate........ 46% 46% 42% 42 %
----------- -------- -------- --------
----------- -------- -------- --------
<FN>
+ Class B shares were introduced on January 15, 1993; Class C shares and
Class R shares were introduced on August 22, 1995.
(1) Based on average shares outstanding.
(2) 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.
(3) Not annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
COMSTOCK PARTNERS FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS:
(UNAUDITED)
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 and distributions 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 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
estimates and assumptions. Actual results could differ from these estimates.
2. INVESTMENT ADVISORY, SUB-INVESTMENT ADVISORY, 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.
Effective November 20, 1997, Princeton agreed to voluntarily reduce through
December 31, 1998 the minimum fee to $125,000 per annum.
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, 1998, such compensation amounted to $82,043 for
the Capital Value Fund and $56,405 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, 1998, $89,242 and $20,755 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, 1998, $94,380 and $33,843 were charged for distributing Capital
Value Fund's Class B and Class C shares, respectively, and $31,460 and $11,281
were charged for shareholder servicing for Capital Value Fund's Class B and
Class C shares, respectively. For the same period, $9,288 and $3,096 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, 1998 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
------------- --------------
<S> <C> <C>
Strategy Fund:...................................... $ 8,522,509 $ 2,734,963
------------- -------------
------------- -------------
Capital Value Fund:
Long transactions................................. $ 9,165,645 $ 11,181,517
Short sale transactions........................... 27,565,268 42,607,303
------------- -------------
$ 36,730,913 $ 53,788,820
------------- -------------
------------- -------------
</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, 1998 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, 1998 were as follows:
Strategy Fund:
<TABLE>
<CAPTION>
REALIZED UNREALIZED
(LOSSES) GAINS (LOSSES)
-------------- --------------
<S> <C> <C>
Long-term investments............................... $ (3,120,423) $ (1,153,580)
Short-term investments.............................. (229) (12,286)
Put options purchased............................... (3,850,104) (4,095,195)
Financial futures contracts......................... (60,450) (43,575)
Foreign currency transactions....................... (196,199) 2,805
-------------- --------------
$ (7,227,405) $ (5,301,831)
-------------- --------------
-------------- --------------
</TABLE>
Capital Value Fund:
<TABLE>
<CAPTION>
REALIZED UNREALIZED
GAINS (LOSSES) GAINS (LOSSES)
-------------- --------------
<S> <C> <C>
Long-term investments............................... $ (3,537,555) $ (1,597,011)
Short sale transactions............................. (363,936) 4,308,675
Short-term investments.............................. 13,119 12,792
Put options purchased............................... (8,271,380) (4,415,922)
Financial futures contracts......................... (1,302,739) (636,525)
Foreign currency transactions....................... 232 --
-------------- --------------
$(13,462,259) $ (2,327,991)
-------------- --------------
-------------- --------------
</TABLE>
As of October 31, 1998, 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, 1998:
<TABLE>
<CAPTION>
GROSS GROSS
APPRECIATION DEPRECIATION NET
------------ ------------ ------------
<S> <C> <C> <C>
Strategy Fund............................ $ 1,454,857 $(6,759,493 ) $ (5,304,636)
Capital Value Fund....................... $ 8,739,980 $(11,067,971) $ (2,327,991)
</TABLE>
The following summarizes the capital loss carry forwards of each Fund at October
31, 1998:
EXPIRING IN FISCAL YEAR STRATEGY FUND CAPITAL VALUE FUND
- ------------------------- ---------------- ------------------
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
2006 14,100,000 57,400,000
------------- ------------
Total $ 53,700,000 $210,000,000
------------- ------------
------------- ------------
4. SUBSEQUENT EVENTS:
For November 1998 the Company's Board of Directors declared ordinary income
dividends for the Strategy Fund as follows:
AMOUNT PER SHARE
- -------------------------------------
CLASS O CLASS A CLASS C PAYABLE DATE RECORD DATE
- --------- ---------- ---------- ------------------ -----------------
$0.0500 $0.04847 $0.04126 November 30, 1998 November 24, 1998
<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
Robert M. Smith, Director
Robert C. Ringstad, Vice President,
Treasurer, Chief Financial Officer
and 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. 1-800-645-6561
