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59 WALL ST.
U.S. Equity Fund
SEMI-ANNUAL REPORT
April 30, 1996
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1996
(unaudited)
Shares Value
------ -----
COMMON STOCKS (98.9%)
AEROSPACE/DEFENSE (1.8%)
9,800 Boeing Co. ............................................ $ 804,825
-----------
AIRLINES (1.9%)
40,000 Valujet, Inc.* ........................................ 830,000
-----------
AUTO & TRUCK
MANUFACTURERS (1.5%)
12,000 General Motors Corp. .................................. 651,000
-----------
BANKING (1.2%)
7,500 SunTrust Banks, Inc. .................................. 528,750
-----------
CHEMICALS (3.1%)
8,500 FMC Corp.* ............................................ 589,687
20,000 Praxair, Inc. ......................................... 772,500
-----------
1,362,187
-----------
COMPUTER RELATED (8.1%)
13,500 Computer Associates
International, Inc. ................................. 990,562
6,000 Hewlett-Packard Co. ................................... 635,250
10,000 International Business
Machines Corp. ...................................... 1,075,000
30,000 Stratus Computer, Inc.* ............................... 843,750
-----------
3,544,562
-----------
COMPUTER SOFTWARE (5.8%)
33,000 Bay Networks, Inc.* ................................... 1,039,500
28,500 Cadence Design
Systems, Inc.* ...................................... 1,489,125
-----------
2,528,625
-----------
COSMETICS & TOILETRIES (3.4%)
8,500 Avon Products, Inc. ................................... 755,437
9,500 Colgate-Palmolive Co. ................................. 727,938
-----------
1,483,375
-----------
DIVERSIFIED (1.4%)
11,500 Tenneco, Inc. ......................................... 631,063
-----------
ELECTRICAL EQUIPMENT (3.8%)
19,000 Duracell International, Inc. .......................... 859,750
10,500 General Electric Co. .................................. 813,750
-----------
1,673,500
-----------
EXPLORATION/DRILLING (2.2%)
28,000 Noble Affiliates, Inc. ................................ 983,500
-----------
FINANCIAL SERVICES (3.5%)
26,000 Federal National
Mortgage Assoc ...................................... 796,250
17,000 PMI Group, Inc. (The) ................................. 722,500
-----------
1,518,750
-----------
FOOD & BEVERAGES (3.1%)
11,500 Campbell Soup Co. ..................................... 718,750
10,000 PepsiCo, Inc. ......................................... 635,000
-----------
1,353,750
-----------
INSURANCE (3.4%)
7,500 American International
Group, Inc. ........................................ 685,312
35,000 Prudential Reinsurance
Hldgs., Inc. ....................................... 796,250
-----------
1,481,562
-----------
MACHINERY/EQUIPMENT (3.8%)
22,700 Deere & Co. ........................................... 882,463
22,000 Sundstrand Corp. ...................................... 808,500
-----------
1,690,963
-----------
MEDIA (1.5%)
35,000 Tele-Communications, Inc. -
Class A* ........................................... 671,562
-----------
MEDICAL SUPPLIES & SERVICES (13.0%)
16,000 Bausch & Lomb, Inc. ................................... 638,000
20,000 Baxter International, Inc. ............................ 885,000
20,000 Beckman Instruments, Inc. ............................. 740,000
19,000 Guidant Corp. ......................................... 1,066,375
14,000 Medtronic, Inc. ....................................... 743,750
10,500 PacifiCare Health
Systems, Inc.* ...................................... 882,000
21,000 St. Jude Medical, Inc.* ............................... 765,188
-----------
5,720,313
-----------
METALS & MINING (3.5%)
40,000 Allegheny Ludlum Corp. ................................ 790,000
12,000 Aluminum Company
of America .......................................... 748,500
-----------
1,538,500
-----------
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1996 (continued)
(unaudited)
Shares Value
------ -----
OIL (3.5%)
6,000 Amoco Corp. ........................................... $ 438,000
5,500 Mobil Corp. ........................................... 632,500
3,400 Royal Dutch Petroleum Co. ............................. 487,050
-----------
1,557,550
-----------
PAPER/FOREST PRODUCTS (5.0%)
23,000 Bowater, Inc. ......................................... 920,000
12,000 Consolidated Papers, Inc. ............................. 657,000
10,000 Willamette Industries, Inc. ........................... 617,500
-----------
2,194,500
-----------
PHARMACEUTICALS (1.4%)
10,230 Lilly (Eli) & Co. ..................................... 603,570
-----------
PHOTO & OPTICAL (2.3%)
13,500 Eastman Kodak Co. ..................................... 1,032,750
-----------
PROFESSIONAL SERVICES (1.6%)
20,000 H&R Block, Inc. ....................................... 702,500
-----------
REAL ESTATE (2.4%)
40,000 Security Capital
Pacific Trust ...................................... 835,000
16,000 United Dominion
Realty Trust ....................................... 228,000
-----------
1,063,000
-----------
RECREATION (3.5%)
12,000 Disney (Walt) Co. ..................................... 744,000
31,250 Mattel, Inc. .......................................... 812,500
-----------
1,556,500
-----------
RESTAURANT/LODGING (3.9%)
60,000 Host Marriott Corp.* .................................. 802,500
19,000 Marriott International, Inc. .......................... 926,250
-----------
1,728,750
-----------
RETAIL (2.2%)
50,000 Price/Costco, Inc.* ................................... 946,875
-----------
TOBACCO (2.1%)
10,000 Philip Morris Co., Inc. ............................... 901,250
-----------
UTILITIES (5.0%)
11,000 AT&T Corp. ............................................ 673,750
13,000 CINergy Corp. ......................................... 377,000
15,000 General Public Utilities
Corp. ............................................... 476,250
28,000 MCN Corp. ............................................. 689,500
-----------
2,216,500
-----------
TOTAL INVESTMENTS (identified cost $33,686,421) (a) .... 98.9% $43,500,532
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ......... 1.1 475,611
----- -----------
NET ASSETS ............................................. 100.0% $43,976,143
===== ===========
- ------
* non-income producing security.
(a) The aggregate cost for federal income tax purposes is $33,686,421, the
aggregate gross unrealized appreciation is $10,162,420, and the aggregate
gross unrealized depreciation is $348,309, resulting in net unrealized
appreciation of $9,814,111.
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1996
(unaudited)
ASSETS:
Investments in securities, at value
(identified cost $33,686,421) (Note 1) ................ $43,500,532
Cash .................................................... 496,021
Receivables for:
Dividends ............................................. 21,630
Capital stock sold .................................... 14,303
Deferred organization expenses (Note 1) ................. 5,512
-----------
Total Assets ........................................ 44,037,998
-----------
LIABILITIES:
Payables for:
Expense payment fee (Note 2) .......................... 36,539
Capital stock redeemed ................................ 20,000
Administrative fee (Note 2) ........................... 5,316
-----------
Total Liabilities ................................... 61,855
-----------
NET ASSETS .................................................... $43,976,143
===========
Net Assets Consist of:
Paid-in capital ......................................... $33,600,295
Accumulated undistributed net investment income ......... 29,688
Accumulated net realized gain ........................... 532,049
Net unrealized appreciation ............................. 9,814,111
-----------
Net Assets .................................................... $43,976,143
===========
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($43,976,143 / 1,099,723 shares) ........................ $ 39.99
=======
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 1996
(unaudited)
INVESTMENT INCOME:
Income:
Dividends ............................................... $ 312,937
----------
Expenses:
Expense payment fee (Note 2) ............................ 200,234
Administrative fee (Note 2) ............................. 28,923
Amortization of organization expenses (Note 1) .......... 2,228
----------
Total Expenses ..................................... 231,385
----------
Net Investment Income .............................. 81,552
----------
NET REALIZED AND UNREALIZED GAIN (Notes 1 and 3):
Net realized gain on investments ........................... 557,203
Net change in unrealized appreciation on investments ....... 3,633,026
----------
Net Realized and Unrealized Gain ....................... 4,190,229
----------
Net Increase in Net Assets Resulting from Operations ....... $4,271,781
==========
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
For the six For the
months ended year ended
April 30, 1996 October 31,
(unaudited) 1995
------------ -----------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ........................ $ 81,552 $ 216,218
Net realized gain on investments ............. 557,203 667,354
Net change in unrealized
appreciation on investments ............... 3,633,026 5,189,897
----------- -----------
Net increase in net assets
resulting from operations ............... 4,271,781 6,073,469
----------- -----------
Dividends and distributions declared from (Note 1):
Net investment income ........................ (113,466) (223,291)
Net realized gains ........................... (781,118) (377,049)
----------- -----------
Total dividends and distributions
declared ............................... (894,584) (600,340)
----------- -----------
Capital stock transactions (Note 4):
Net proceeds from sales of capital stock ..... 11,470,433 9,618,272
Net asset value of capital stock
issued to shareholders in reinvestment
of dividends and distributions ............ 619,593 393,829
Net cost of capital stock redeemed ........... (3,490,763) (5,609,953)
----------- -----------
Net increase in net assets resulting
from capital stock transactions ......... 8,599,263 4,402,148
----------- -----------
Total increase in net assets ............ 11,976,460 9,875,277
NET ASSETS:
Beginning of period ............................. 31,999,683 22,124,406
----------- -----------
End of period (including undistributed
net investment income of $29,688
and $61,602, respectively) .................... $43,976,143 $31,999,683
=========== ===========
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share
outstanding throughout each period
<TABLE>
<CAPTION>
For the period
For the six July 23, 1992
months ended For the years ended October 31, (commencement
April 30, 1996 ------------------------------- of operations)to
(unaudited) 1995 1994 1993 October 31, 1992
------------ ------ ------ ------ --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........ $36.46 $29.84 $28.80 $25.77 $25.00
Income from investment operations:
Net investment income................... 0.09 0.26 0.26 0.28 0.07
Net realized and unrealized gain........ 4.44 7.15 1.05 3.04 0.76
Less dividends and distributions from (Note 1):
Net investment income................... (0.13) (0.28) (0.17) (0.29) (0.06)
Net realized gains...................... (0.87) (0.51) (0.10) -- --
------ ------ ------ ------ ------
Net asset value, end of period.............. $39.99 $36.46 $29.84 $28.80 $25.77
====== ====== ====== ====== ======
Cumulative investment return**.............. 12.58% 25.50% 4.61% 12.91% 3.32%
Ratios/Supplemental Data:
Net assets, end of period (000's omitted) $43,976 $32,000 $22,124 $10,992 $2,378
Ratio of expenses to average
net assets (Note 2)**................. 1.20%* 1.20% 1.20% 1.20% 1.20%*
Ratio of net investment income to
average net assets.................... 0.42%* 0.84% 1.06% 1.07% 1.20%*
Portfolio turnover rate................. 13% 69% 61% 52% 2%
Average commission rate paid per share.. $0.08 $0.08 -- -- --
</TABLE>
- ---------------
* Annualized
** Had the expense payment agreement not been in place, the ratio of expenses
to average net assets for the six months ended April 30, 1996 and the years
ended October 31, 1995,1994 and 1993 and for the period ended October 31,
1992 would have been 1.21%, 1.28%, 1.46%, 2.09% and 5.58%, respectively.
For the same periods, the cumulative return of the Fund would have been
12.57%, 25.42%, 4.35%, 12.02% and (1.06)%, respectively. Furthermore, the
ratio of expenses to average net assets for the six months ended April 30,
1996 and the year ended October 31, 1995 reflect fees paid with brokerage
commissions and fees reduced in connection with specific agreements. Had
these arrangements not been in place, these ratios would have been 1.34%
and 1.38%, respectively.
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
(unaudited)
1. Organization and Significant Accounting Policies. The 59 Wall Street
U.S. Equity Fund (the "Fund") is a separate diversified series of The 59 Wall
Street Fund, Inc. (the "Corporation") which is registered under the Investment
Company Act of 1940, as amended. The Corporation is an open-end management
investment company organized under the laws of the State of Maryland on July 16,
1990. The Fund commenced operations on July 23, 1992.
The following is a summary of significant accounting policies for the Fund.
A. Valuation of Investments. (1) The value of investments listed on a
securities exchange is based on the last sale price on that exchange prior
to the time when assets are valued, or in the absence of recorded sales, at
the average of readily available closing bid and asked prices on such
exchange; (2) unlisted securities are valued at the average of the quoted
bid and asked prices in the over-the-counter market; (3) securities or
other assets for which market quotations are not readily available are
valued at fair value in accordance with procedures established by and under
the general supervision and responsibility of the Corporation's Board of
Directors. Such procedures include the use of independent pricing services,
which use prices based upon yields or prices of securities of comparable
quality, coupon, maturity and type; indications as to the value from
dealers; and general market conditions; (4) short-term investments which
mature in 60 days or less are valued at amortized cost if their original
maturity was 60 days or less, or by amortizing their value on the 61st day
prior to maturity, if their original maturity when acquired by the Fund was
more than 60 days, unless this is determined not to represent fair value by
the Board of Directors.
B. Accounting for Investments. Security transactions are accounted for
on the trade date. Realized gains and losses on security transactions are
determined on the identified cost method. Dividend income and other
distributions from portfolio securities are recorded on the ex-dividend
date except that, if the ex-dividend date has passed, certain dividends
from foreign securities are recorded as soon as the Fund is informed of the
ex-dividend date. Dividend income is recorded net of foreign taxes withheld
where recovery of such taxes is not assured. Interest income is accrued
daily.
C. Deferred Organization Expenses. Expenses incurred by the Fund in
connection with its organization and initial public offering of its shares
are being amortized on a straight-line basis over a five-year period.
D. Federal Income Taxes. It is the Corporation's policy to comply with
the requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Accordingly, no federal income tax provision is required. The
Fund files a tax return annually using tax accounting methods required
under provisions of the Internal Revenue Code which may differ from
generally accepted accounting principles, the basis on which these
financial statements are prepared. Accordingly, the amount of net
investment income and net realized gain reported on these financial
statements may differ from that reported on the Fund's tax return due to
certain book-to-tax timing differences such as losses deferred due to "wash
sale" transactions and utilization of capital loss carryforwards. These
timing differences may result in temporary over-distributions for financial
statement purposes and are classified as distributions in excess of
accumulated net realized gains. As such, the character of distributions to
shareholders reported in the Financial Highlights table may differ from
that reported to shareholders on Form 1099-DIV. These distributions do not
constitute a return of capital.
E. Dividends and Distributions to Shareholders. Dividends to
shareholders from net investment income are paid semi-annually and are
recorded on the ex-dividend date. Distributions from net capital gains, if
any, are paid annually and are recorded on the ex-dividend date.
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
(unaudited)
2. Transactions with Affiliates.
Investment Advisory Agreement. The Corporation has an investment advisory
agreement with Brown Brothers Harriman & Co. (the "Adviser") for which the
Adviser receives a fee from the Fund calculated daily and paid monthly at an
annual rate equivalent to 0.65% of the Fund's average daily net assets.
Administrative Fee. The Corporation has an administrative agreement with
Brown Brothers Harriman & Co. (the "Administrator") for which the Administrator
receives a fee from the Fund calculated daily and paid monthly at an annual rate
equivalent to 0.15% of the Fund's average daily net assets. The Administrator
has a subadministration services agreement with 59 Wall Street Administrators,
Inc. for which 59 Wall Street Administrators, Inc. receives such compensation as
is from time to time agreed upon, but not in excess of the amount paid to the
Administrator. For the six months ended April 30, 1996, the Fund incurred
$28,923 for administrative services.
Shareholder Servicing/Eligible Institution Agreement. The Corporation has a
shareholder servicing agreement and an eligible institution agreement with Brown
Brothers Harriman & Co. for which Brown Brothers Harriman & Co. receives a fee
from the Fund calculated daily and paid monthly at an annual rate equivalent to
0.25% of the Fund's average daily net assets.
Expense Payment Fee. 59 Wall Street Administrators, Inc. pays certain
expenses of the Fund and receives a fee from the Fund, computed and paid
monthly, such that after such fee the aggregate expenses will not exceed 1.20%
of the Fund's average daily net assets. For the six months ended April 30, 1996,
59 Wall Street Administrators, Inc. incurred approximately $203,380 in expenses,
including investment advisory fees of $125,334 and shareholder
servicing/eligible institution fees of $48,205, on behalf of the Fund. The
Fund's expense payment fee agreement will terminate on July 1, 1997.
3. Investment Transactions. For the six months ended April 30, 1996, the
cost of purchases and the proceeds of sales of investment securities other than
short-term investments were $12,538,912 and $5,098,327, respectively. For that
same period, the Fund paid brokerage commissions of $25,678 to Brown Brothers
Harriman & Co. for transactions executed on its behalf. Fees for the Fund paid
pursuant to the expense payment agreement (see Note 2) were reduced by $12,930
as a result of the Fund directing a portion of its portfolio transactions to
certain brokers. Additionally, custody fees for the Fund paid pursuant to the
expense payment agreement were reduced by $11,950 as a result of an expense
offset arrangement with the Funds' custodian.
4. Capital Stock. The Corporation is permitted to issue 2,500,000,000
shares of capital stock, par value $.001 per share, of which 25,000,000 shares
have been classified as shares of the Fund. Transactions in shares of capital
stock were as follows:
For the six For the year
months ended ended
April 30, 1996 October 31, 1995
------------ ----------------
Capital stock sold.............................. 309,846 300,861
Capital stock issued in connection with
reinvestment of dividends and distributions... 1,370 13,641
Capital stock repurchased....................... (89,091) (178,354)
------- --------
Net increase.................................... 222,125 136,148
======= ========
<PAGE>
The 59 Wall Street Fund, Inc.
Investment Adviser and
Administrator
Brown Brothers Harriman & Co.
59 Wall Street
New York, New York 10005
Distributor
59 Wall Street Distributors, Inc.
6 St. James Avenue
Boston, Massachusetts 02116
Shareholder Servicing Agent
Brown Brothers Harriman & Co.
59 Wall Street
New York, New York 10005
(800) 625-5759
This report is submitted for the general information of shareholders and is not
authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus. Nothing herein contained is to be
considered an offer of sale or a solicitation of an offer to buy shares of the
Funds. Such offering is made only by prospectus, which includes details as to
offering price and other material information.
