SEMIANNUAL REPORT
June 30, 1998
Dear Shareholder(s),
Enclosed are the financial statements for the SCM Portfolio Fund for the
period, January 1-June 30, 1998.
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 7.969%
One Year 13.457
Three Years 14.263
Five Years 10.020
Life of Fund 8.255
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.
As you will see in the Schedule of Investment in Securities, the Fund was
invested only 52.34% in common stocks on June 30, 1998. This percentage is
representative of the commitment to common stocks for the period. Although
the percentage of common stocks was low as compared with some other funds,
the Fund held some stocks which had excellent returns over the last 12
months. The Fund held, with their 12-month returns, Home Depot (80.5%), Air
Touch Communications (112.57%), Cisco Systems (105.7%), Intel (56.8%),
Automatic Data Processing (55.05%), and Wal-Mart (79.67%). Also, 12 other
stocks appreciated between 20% and 40% for the 12-month period; four, between
10% and 20%; and six, 1% and 10%. Six recorded losses for the 12-month
period.
Please feel free to call me, if you have questions or comments.
Sincerely,
Steve McCutcheon
June 30, 1998
<PAGE>
<TABLE>
SCM PORTFOLIO FUND INC
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
(UNAUDITED)
<CAPTION>
ASSETS
<S> <C>
ASSETS
Cash equivalents $ 497,496
Interest Receivable 4,730
Dividends Receivable 329
Fidelity Bond Reserve at Market Value 3,654
Securities at Market Values 792,061
__________
$1,298,270
==========
<CAPTION>
LIABILITIES
<S> <C>
LIABILITIES
Accounts Payable $ 4,046
Securities Payable 0
NET ASSETS (Equivalent to $14.09 per share $1,294,224
based on 91,873.216 shares outstanding) __________
TOTAL LIABILITIES AND NET ASSETS $1,298,270
==========
Net assets consist of:
Capital Stock $ 957,107
Unrealized depreciation on investments 328,153
Accumulated undistributed net investment income 8,964
Realized Gains on Securities Transactions ------
__________
$1,294,224
==========
<FN>
See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
SCM PORTFOLIO FUND, INC.
STATEMENT OF OPERATIONS
JUNE 30, 1998
(UNAUDITED)
<S> <C>
INCOME
Interest $ 15,729
Dividends 4,777
--------
Total Income 20,506
<S> <C>
EXPENSES
Administrative Fee 1,578
Custodial Fee 1,401
Registrations and Reports 125
Audit and Accounting Fee 4,651
Taxes 847
Miscellaneous 1,891
Legal Expenses 1,833
--------
Total Expense 12,326
<S> <C>
NET INVESTMENT INCOME 8,180
--------
<S> <C>
REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES
Net Realized Gain (Loss) from Securities Transactions --------
Net Increase (Decrease) in Unrealized Appreciation 87,478
--------
Net Realized and Unrealized Gain (Loss) on Securities 87,478
--------
<S> <C>
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 95,658
========
<FN>
See Notes to Financial Statements
</FN>
</TABLE>
<PAGE>
<TABLE>
SCM PORTFOLIO FUND INC
SCHEDULE OF INVESTMENTS IN SECURITIES
JUNE 30, 1998
(UNAUDITED)
<CAPTION>
<S> <C> <C>
CASH EQUIVALENTS (38.58%) $497,496
========
SECURITIES (61.42%)
GOVERNMENT SECURITIES (7.86%)
50 U.S. Treasury Notes, 6.375%, Due 1/15/1999 $ 50,250
50 U.S. Treasury Notes, 6.25%, Due 1/31/02 51,125
________
Total Government Securities $101,375
________
COMMON STOCKS 52.34%
Common Stock Investment Cost Market Value
100 Travelers 5,148 6,063
800 Abbott Laboratories 9,182 32,800
300 Air Touch Communica. 7,358 17,531
100 Amgen, Inc. 5,710 6,537
200 AMP, Inc. 7,970 6,875
200 Automatic Data Proc. 6,573 14,575
200 Bell Atlantic 10,103 18,250
150 Cisco Systems 4,960 13,809
1500 Flowers Industries 12,343 30,657
700 GTE Corporation 21,611 38,938
200 General Electric 8,273 18,175
200 Nike 9,451 9,738
650 H. J. Heinz 17,064 36,481
300 Hewlett Packard 12,595 17,963
750 Home Depot 22,758 62,276
300 Intel 14,308 22,238
200 Johnson & Johnson 10,354 14,800
400 Merck 16,417 53,500
100 Minn. Min. & Man. (3M) 5,497 8,218
200 Motorola 11,020 10,513
300 Norfolk Southern 6,035 8,944
425 Oracle 10,539 10,439
600 PPG Industries 25,426 41,738
300 Pall Corporation 4,723 6,150
<PAGE>
<S> <C> <C>
200 Rubbermaid 4,760 6,600
800 Sigma-Aldrich 17,765 28,100
200 Southern Company 4,235 5,538
1687.5 Synovus Financial 12,653 40,058
800 Sysco Corporation 13,682 20,500
300 TECO Energy 6,041 8,044
400 Torchmark 8,924 18,300
200 USX-US Steel 5,970 6,600
400 Wal-Mart 11,570 24,300
200 World-Com 4,635 9,688
Total Common Stocks $355,653 $674,936
-------- --------
PREFERRED STOCK 1.22%
600 General Motors Pf Ser B 9.125% 15,750
------
Total Preferred Stocks $ 15,750
______
TOTAL SECURITIES $792,061
=========
TOTAL CASH AND SECURITIES $1,289,557
=========
<FN>
See Notes to Financial Statements
</FN>
</TABLE>
<PAGE>
<TABLE>
SCM PORTFOLIO FUND INC
STATEMENT OF CHANGES IN NET ASSETS
JUNE 30, 1998
(UNAUDITED)
<CAPTION>
Six Mo. Year
Ended Ended
6/30/98 12/31/97
________ ________
<S> <C> <C>
OPERATIONS
Net Investment Income $ 8,180 $ 23,149
Realized Gain (Loss) on Investments ----- 23,786
Change in Unrealized Gain (Loss) on
Investments 87,478 112,532
------- -------
Increase (Decrease) in Net Assets
Resulting from Operations 95,658 159,467
_______ _______
CAPITAL SHARE TRANSACTIONS
Proceeds from Issuance of Shares 90,765 49,575
Reinvestment of Dividends ------ 22,686
Reinvestment of Gain Distribution ------ 23,786
Cost of Shares Redeemed (50,000) ( 6,843)
________ ________
Increase (Decrease) in Net Assets from
Capital Share Transactions 40,765 89,204
________ ________
DIVIDEND PAID
From Net Investment Income ------ (22,686)
From realized capital gains ------ (23,786)
________ ________
Decrease in Net Assets from
Dividends Paid ------ (46,472)
________ ________
TOTAL INCREASE (DECREASE) IN NET ASSETS 136,423 202,199
Balance at beginning of period 1,157,801 955,602
_______ _______
Balance at end of period $1,294,224 $1,157,801
========= =========
<FN>
See Notes to Financial Statements
</FN>
</TABLE>
<PAGE>
SCM PORTFOLIO FUND INC
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
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. Stock quotes are recorded as soon as practical after
the close of the New York Stock Exchange, allowing time for the daily
trades to be reported through the pricing arrangement purchased by the
investment advisor, SCM Associates, Inc.
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 100% distribution of 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 December 5, 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.
<PAGE>
During the period ending June 30, 1998, the adviser waived the fee during
January-June in order to control Fund expenses.
NOTE 3. ADMINISTRATIVE SERVICES CONTRACT
Pursuant to the Administrative Services Contract dated December 5, 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, 1998, purchases and sales of securi-
ties other than United States government obligations and cash equivalents
aggregated $5,148 (purchases) and no (sales). During the period,
no United States Treasury Bills, and no U.S. Treasury Notes were purchased.
There were no U.S. government obliations redeemed. On June 30, 1998, the
cost basis of securities was $466,261.
NOTE 6. CAPITAL STOCK
Transactions in capital stock for the six months ending June 30, 1998, were
as follows:
<TABLE>
<S> Shares Amount
<C> <C>
Shares Sold 6,885.344 $90,765
--------- -------
Shares Acquired (3,686.157) (50,000)
--------- -------
Net Increase 3,199.187 $40,765
========= =======
<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 1989-97 has been audited by McMullan and Company, Atlanta, Georgia,
but data for the six months ending June 30, 1998, is unaudited.
</TABLE>
<TABLE>
6/30/98 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value
Beginning of Period $ 13.05 11.69 10.97 9.95 10.41 10.26
_____ _____ _____ _____ _____ _____
Income From Invest-
ment Operations
Net Investment Income .09 .28 .28 .32 .31 .31
Net Gain(Loss) on
Securities (realized
and unrealized) .95 1.61 .98 1.08 (.39) .35
_____ _____ _____ _____ _____ _____
Total from Investment
Operations 1.04 1.89 1.26 1.40 (.08) .66
_____ _____ _____ _____ _____ _____
Less Distributions
Dividends (from Net
Investment Income) ---- (.26) (.27) (.34) (.29) (.29)
Distributions (from
Capital Gains) ---- (.27) (.27) (.04) (.09) (.22)
_____ _____ _____ _____ _____ _____
Total Distributions ---- (.53) (.54) (.38) (.38) (.51)
_____ _____ _____ _____ _____ _____
Net Asset Value
End of Period $ 14.09 13.05 11.69 10.97 9.95 10.41
===== ===== ===== ===== ===== =====
Total Return 7.97* 16.41 11.53 14.19 (.76) 6.57
*Not Annualized
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
1992 1991 1990 1989
____ ____ ____ ____
Net Asset Value
Beginning of Period 10.49 9.98 9.96 10.00
_____ _____ _____ _____
Income from Invest-
ment Operations
Net Investment Income .31 .44 .59 .75
Net Gain(Loss) on
Securities (realized
and unrealized) (.08) .52 (.13) (.06)
_____ _____ _____ _____
Total from Investment
Operations .23 .96 .46 .69
Less Distributions
Dividends(from Net
Investment Income) (.30) (.44) (.44) (.73)
Distributions(from
Capital Gains) (.16) (.01) --- ---
_____ _____ _____ _____
Total Distributions (.46) (.45) (.44) (.73)
_____ _____ _____ _____
Net Asset Value
End of Period 10.26 10.49 9.98 9.96
===== ===== ===== =====
Total Return 2.25 9.78 4.57 6.90
</TABLE>
<PAGE>
<TABLE>
Ratio/Supplemental Data
(All numbers are percentages, except Net Assets)
Net Assets, End of Period
<S> <C>
6/30/98 1,294,224
1997 1,157,801
1996 955,602
1995 922,948
1994 812,629
1993 731,106
1992 655,028
1991 706,098
1990 693,383
1989 358,406
</TABLE>
<TABLE>
<C> <C> <C> <C> <C> <C>
6/30/98 1997 1996 1995 1994 1993
Ratio of Expenses
to Avg. Net Assets .97%* 1.48 1.68 1.47 1.59 1.58
Ratio of Net Income to
Average Net Assets .65%* 3.66 4.01 4.52 4.59 4.36
Portfolio Turnover
Rate 0.00% 12.70 11.43 14.84 27.17 21.00
Average Commission
Rate Paid $.3500* $.1813 $.1553
* Not Annualized
</TABLE>
<TABLE>
<C> <C> <C> <C>
1992 1991 1990 1989
Ratio of Expenses
to Average Net Assets 1.83 1.39 1.70 1.40
Ratio of Net Income to
Average Net Assets 2.91 4.22 5.75 7.20
Portfolio Turnover
Rate 28.00 35.00 45.00 0.00
Average Commission
Rate Paid
<FN>
See Notes to Financial Statements
</FN>
</TABLE>
<PAGE>
