SEMIANNUAL REPORT
June 30, 1997
Dear Shareholder(s),
Enclosed are the financial statements for the SCM Portfolio Fund for the
period, January 1-June 30, 1997.
The Fund's total return for the six-month and one year periods and the
average annual returns for three and five years and the life of the Fund
(3/8/89) are listed below:
Six Months 10.69%
One Year 18.48
Three Years 13.14
Five Years 9.03
Life of Fund 7.65
The Fund's returns for the periods listed were below that of the Standard
& Poor's 500 Index for the periods, but the Fund was not fully invested in
stocks as was the Index, and thus the Fund was less volatile during market
downturns.
Most of the expenses of the Fund already have been paid for the year, such
as annual audit and legal expenses associated with the annual report and
filings with the Securities and Exchange Commission.
At the Annual Meeting held on March 8, the shareholders approved slight
changes in the prospectus which will clarify the Fund's asset allocation
investment strategy instead of a market-timing approach. The Board of
Directors felt that it was impractical to suggest that the Fund would ever
be 100% in any asset class or could ever avoid any negative return. Also,
the Board of Directors, at its quarterly meeting on June 6, approved filing
with the State of Alabama to sell securities in Alabama, effective July 1,
1997. Furthermore, the State of Florida approved legislation which allows
mutual funds to sell shares without limitation or filings in the Sunshine
State. Therefore, the Fund's selling boundaries have expanded.
Please study the Schedule of Investments and note the growth in all but two
common stocks. Many stocks that we have held for years have huge gains.
We sold an old favorite, Coca Cola, recently, because its price earnings
ratio was out of line, but we hope to buy it back when stocks pull back.
As usual, please call if you have questions or comments.
Sincerely,
Steve McCutcheon
July 30, 1997
<PAGE>
<TABLE>
SCM PORTFOLIO FUND INC
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
(UNAUDITED)
<CAPTION>
ASSETS
<S> <C>
ASSETS
Cash equivalents 386,517
Interest Receivable 5,572
Dividends Receivable 329
Fidelity Bond Reserve at Market Value 3,153
Securities at Market Values 689,679
__________
$1,085,250
==========
<CAPTION>
LIABILITIES
<S> <C>
LIABILITIES
Accounts Payable $ 2,530
Securities Payable 0
NET ASSETS (Equivalent to $12.94 per share $1,082,720
based on 83,646.200 shares outstanding) __________
TOTAL LIABILITIES AND NET ASSETS $1,085,250
==========
Net assets consist of:
Capital Stock $ 850,545
Unrealized depreciation on investments 198,275
Accumulated undistributed net investment income 7,340
Realized Gains on Securities Transactions 26,560
__________
$1,082,720
==========
<FN>
See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
SCM PORTFOLIO FUND INC
SCHEDULE OF INVESTMENTS IN SECURITIES
JUNE 30, 1997
(UNAUDITED)
<CAPTION>
<S> <C> <C>
CASH EQUIVALENTS (35.92%) $386,517
========
SECURITIES (64.08%)
GOVERNMENT SECURITIES (9.29%)
50 U.S. Treasury Notes, 6.375%, Due 1/15/1999 $ 50,297
50 U.S. Treasury Notes, 6.25%, Due 1/31/02 49,735
________
Total Government Securities $100,032
________
COMMON STOCKS 53.288%
Common Stock Investment Cost Market Value
600 AGL Resources 11,217 12,375
400 Abbott Laboratories 9,182 26,700
300 Air Touch Communica. 7,358 8,250
100 Amgen, Inc. 5,710 5,813
200 AMP, Inc. 7,970 8,350
200 Automatic Data Proc. 6,573 9,400
200 Bell Atlantic 10,103 15,175
100 Cisco Systems 4,960 6,713
1500 Flowers Industries 12,343 25,312
700 GTE Corporation 21,611 30,713
200 General Electric 8,273 13,000
300 Genuine Parts 7,970 10,163
650 H. J. Heinz 17,064 29,981
300 Hewlett Packard 12,595 16,800
500 Home Depot 22,758 34,500
100 Intel 5,735 14,181
200 Johnson & Johnson 10,354 12,875
400 Merck 16,417 40,925
100 Minn. Min. & Man. (3M) 5,497 10,225
200 Motorola 11,020 15,225
100 Norfolk Southern 6,035 10,075
200 Office Depot 5,637 3,888
150 Oracle 5,792 7,556
600 PPG Industries 25,426 34,875
300 Pall Corporation 4,723 6,975
<PAGE>
<S> <C> <C>
200 Readers Digest 7,769 5,750
600 Rubbermaid 16,610 17,850
800 Sigma-Aldrich 17,765 28,050
200 Southern Company 4,235 4,375
1125 Synovus Financial 8,543 31,008
400 Sysco Corporation 13,682 14,600
300 TECO Energy 6,041 7,669
200 Torchmark 8,924 14,250
200 USX-US Steel 5,970 7,000
400 Wal-Mart 11,570 13,525
400 Waste Management 10,471 12,850
200 World-Com 4,635 6,400
Total Common Stocks $378,538 $573,372
-------- --------
PREFERRED STOCK 1.51%
600 General Motors Pf Ser B 9.125% 16,275
------
Total Preferred Stocks $ 16,275
______
TOTAL SECURITIES $ 689,679
=======
TOTAL CASH AND SECURITIES $1,076,196
=========
<FN>
See Notes to Financial Statements
</FN>
</TABLE>
<PAGE>
<TABLE>
SCM PORTFOLIO FUND INC
STATEMENT OF OPERATIONS
JUNE 30, 1997
(UNAUDITED)
<S> <C>
INCOME
Interest $ 12,399
Dividends 5,150
________
Total Income 17,549
________
EXPENSES
Administrative Fee 1,256
Custodial Fee 1,538
Registrations and Reports 465
Audit and Accounting Fee 4,000
Taxes 511
Miscellaneous 518
Legal Expense 2,242
________
Total Expense 10,530
________
NET INVESTMENT INCOME 7,019
________
REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES
Net Realized Gain (Loss) from Securities
Transactions 26,560
Net Increase (Decrease) in Unrealized Appreciation 70,132
________
Net Realized and Unrealized Gain (Loss)
on Securities 96,692
________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $103,711
========
<FN>
See Notes to Financial Statements
</FN>
</TABLE>
<PAGE>
<TABLE>
SCM PORTFOLIO FUND INC
STATEMENT OF CHANGES IN NET ASSETS
JUNE 30, 1997
(UNAUDITED)
<CAPTION>
Six Mo. Year
Ended Ended
6/30/97 12/31/96
________ ________
<S> <C> <C>
OPERATIONS
Net Investment Income $ 7,109 $ 21,580
Realized Gain (Loss) on Investments 26,560 21,445
Change in Unrealized Gain (Loss) on
Investments 70,132 58,081
------- -------
Increase (Decrease) in Net Assets
Resulting from Operations 103,711 101,106
_______ _______
CAPITAL SHARE TRANSACTIONS
Proceeds from Issuance of Shares 30,250 3,000
Reinvestment of Dividends ------ 21,545
Reinvestment of Gain Distribution ------ 21,445
Cost of Shares Redeemed (6,843) (71,452)
________ ________
Increase (Decrease) in Net Assets from
Capital Share Transactions 23,407 (25,462)
________ ________
DIVIDEND PAID
From Net Investment Income ------ (21,545)
From realized capital gains ------ (21,445)
________ ________
Decrease in Net Assets from
Dividends Paid ------ (42,990)
________ ________
TOTAL INCREASE(DECREASE) IN NET ASSETS 127,118 32,654
Balance at beginning of period 955,602 922,948
_______ _______
Balance at end of period $1,082,720 $955,602
========= =======
<FN>
See Notes to Financial Statements
</FN>
</TABLE>
<PAGE>
SCM PORTFOLIO FUND INC
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
The SCM Portfolio Fund, Inc. (the Fund) is a diversified open-end management
company. The following is a summary of significant accounting policies
followed by the Fund in the preparation of its financial statements.
A. Security Valuation
Investments in securities are stated at market values based on the latest
quoted market prices.
B. Federal Income Taxes
No provision for federal income taxes is considered necessary since the Fund
intends to distribute all of its taxable net income during the tax year,
including any realized net gains on investments and to otherwise comply with
the provisions of the Internal Revenue Code applicable to regulated investment
companies. The identified cost method of determining the cost of investments
for purposes of computing gains or losses from securities transactions is used
for tax purposes.
C. Other
As is common in the industry, security transactions are accounted for on the
date the securities are purchased or sold. Dividend income and distributions
to shareholders are recorded on the ex-dividend date. Realized gains and
losses from securities transactions and unrealized appreciation and
depreciation of investments are reported on an identified cost basis.
NOTE 2. INVESTMENT MANAGEMENT FEES
Pursuant to the Investment Advisory contract dated January 15, 1997, the
investment adviser receives a monthly fee equal to one-twelfth of seventy-
four one hundredths (.74) per cent of the daily average net assets of the
Fund during the month. Furthermore, the Contract provides that should the
management fee and other expenses exceed two (2) per cent at the end of the
fiscal year based on the Fund's average monthly assets, the adviser would
refund the sum necessary to reduce the total cost to the Fund to not more
than (2) per cent of the average monthly assets during the fiscal year.
During the period ending June 30, 1997, the adviser waived the fee during
January-June in order to control Fund expenses.
<PAGE>
NOTE 3. ADMINISTRATIVE SERVICES CONTRACT
Pursuant to the Administrative Services Contract dated January 15, 1997,
between the Fund and SCM Associates, Inc. (Administrator), the administrator
receives a monthly fee equal to one-twelfth of twenty-five one hundredths
of one per cent per month (the equivalent of .25 of one per cent per annum)
of the daily net assets of the Fund during the month.
NOTE 4. CUSTODIAN, TRANSFER AGENT, AND FUND ACCOUNTING
Fidelity National Bank, Trust Department, Atlanta, Georgia serves as cust-
odian, holding all cash and securities. The custodial fee is $15 per trans-
action in securities and .20 of 1% for the first $2,000,000 of assets with
a $400 minimum fee annually. The Fund serves as its own transfer agent,
and SCM Associates, Inc. under the Administrative Services Contract provides
daily pricing and fund accounting. McMullan and Company, Atlanta, Georgia,
serves as independent accountant and auditor.
NOTE 5. PURCHASE AND SALES OF SECURITIES
For the six-month period ending June 30, 1997, purchases and sales of securi-
ties other than United States government obligations and cash equivalents
aggregated $109,660 (purchases) and $64,525 (sales). During the period,
$146,028 in United States Treasury Bills of six months maturities were pur-
chased, and one U.S. Treasury Note (1/31/2002) was purchased for $49,892.
There were no U. S. government obligations redeemed. On June 30, 1997, the
cost basis of securities was $493,410, and cash equivalent cost basis was an
additional $386,517.
NOTE 6. CAPITAL STOCK
Transactions in capital stock for the six months ending June 30, 1997, were
as follows:
<TABLE>
<S> Shares Amount
<C> <C>
Shares Sold 2,466.032 $30,250
--------- -------
Shares Acquired (563.648) (6,843)
--------- -------
Net Increase 1,902.384 $23,407
========= =======
<PAGE>
FINANCIAL HIGHLIGHTS
The following information provides a per share summary of investment income
and capital gains earned by the Fund and the distributions made by the Fund
in the form or dividends and capital gains to shareholders. The summary
also provides a beginning and ending net asset value (NAV) per share for
each year and the total return for each year, allowing the shareholder to
trace the value of the Fund over the years since the Fund's registration.
Data for 1989-96 has been audited by McMullan and Company, Atlanta, Georgia,
but data for the six months ending June 30, 1997, is unaudited.
</TABLE>
<TABLE>
Year Ended December 31
________________________________________
6/30/1997 1996 1995 1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value
Beginning of Period $ 11.69 10.97 9.95 10.41 10.26 10.49 9.98 9.96 10.00
_____ _____ ____ _____ _____ _____ _____ _____ _____
Income From Invest-
ment Operations
Net Investment Income .09 .28 .32 .31 .31 .31 .44 .59 .75
Net Gain(Loss) on
Securities (realized
and unrealized) 1.16 .98 1.08 (.39) .35 (.08) .52 (.13)(.06)
____ ____ _____ _____ ____ _____ ____ _____ ____
Total from Investment
Operations 1.24 1.26 1.40 (.08) .66 .23 .96 .46 .69
____ ____ ____ ____ ____ _____ ____ _____ ____
Less Distributions
Dividends (from Net
Investment Income) ---- (.27)(.34) (.29) (.29)(.30) (.44) (.44)(.73)
Distributions (from
Capital Gains) ---- (.27)(.04) (.09) (.22)(.16) (.01) --- ---
_____ ____ ____ ____ ____ ____ ___ ___
Total Distributions ---- (.54)(.38) (.38) (.51)(.46) (.45) (.44) (.73)
____ ____ ____ ____ ____ ____ ____ ____ ____
Net Asset Value
End of Period $ 12.94 11.69 10.97 9.95 10.41 10.26 10.49 9.98 9.96
===== ===== ===== ==== ===== ===== ===== ==== ====
Total Return 10.69%* 11.53 14.19 (.76) 6.57 2.25 9.78 4.57 6.90
*Not Annualized
</TABLE>
<PAGE>
Ratio/Supplemental Data
(All numbers are percentages, except Net Assets)
<TABLE>
Net Assets, End
of Period
<S> <C>
6/30/1997 1,082,720
1996 955,602
1995 922,948
1994 812,629
1993 731,106
1992 655,028
1991 706,098
1990 693,383
1989 358,406
<C> <C> <C> <C> <C> <C> <C> <C> <C>
6/30/1997 1996 1995 1994 1993 1992 1991 1990 1989
Ratio of Expenses
to Avg. Net Assets 1.04* 1.68 1.47 1.59 1.58 1.83 1.39 1.70 1.40
Ratio of Net Income to
Average Net Assets .69* 4.01 4.52 4.59 4.36 2.91 4.22 5.75 7.20
Portfolio Turnover
Rate 10.22* 11.43 14.84 27.17 21.00 28.00 35.00 45.00 0.00
Average Commission
Rate Paid .3948 .6100
* Not Annualized
</TABLE>
<PAGE>
