THE 59 WALL STREET SHORT/INTERMEDIATE
FIXED INCOME FUND
SEMI-ANNUAL REPORT
April 30, 1996
(unaudited)
<PAGE>
THE 59 WALL STREET SHORT/INTERMEDIATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
April 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
--------- -----------
<C> <S> <C>
U.S. TREASURY NOTES (77.3%)
$300,000 5.50%, 2/28/99 ............................................................ $294,516
425,000 5.625%, 11/30/2000 ........................................................ 412,050
1,675,000 5.875%, 3/31/99 ........................................................... 1,660,076
2,880,000 7.50%, 11/15/2001 ......................................................... 3,014,554
2,100,000 7.875%, 1/15/98 ........................................................... 2,163,000
885,000 8.50%, 7/15/97 ............................................................ 912,099
-----------
Total U.S. Treasury Notes (identified cost $8,605,179).................. $8,456,295
-----------
CORPORATE NOTES AND BONDS (8.2%)
BANKING (1.9%)
$200,000 Citicorp, 8.00%, 2/1/2003 ................................................. $209,018
-----------
BEVERAGES (2.3%)
250,000 PepsiCo, Inc., 6.80%, 5/15/2000 ........................................... 250,595
-----------
UTILITIES (4.0%)
250,000 GTE Florida, Inc., 6.31%, 12/15/2002 ...................................... 239,995
200,000 Southwestern Bell Telephone Co., 6.375%, 4/1/2001 ......................... 196,830
-----------
-----------
436,825
-----------
Total Corporate Notes and Bonds (identified cost $895,053).............. $896,438
-----------
FEDERAL HOME LOAN MORTGAGE CORPORATION (4.6%)
$305,268 7.00%, 12/1/2007 .......................................................... $303,549
200,000 7.25%, 1/15/2017 .......................................................... 203,124
-----------
Total Federal Home Loan Mortgage Corporation
(identified cost $488,421)........................................... $506,673
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (3.9%)
$390,086 6.00%, 9/1/2004 ........................................................... $378,926
43,930 Real Estate Mortgage Investment Conduit
6.50%, 4/25/2010 .......................................................... 43,779
-----------
Total Federal National Mortgage Association
(identified cost $436,810)........................................... $422,705
-----------
</TABLE>
<PAGE>
THE 59 WALL STREET SHORT/INTERMEDIATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
April 30, 1996 (continued)
(unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
- --------- -----------
<C> <S> <C>
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (2.0%)
$198,609 10.00%, 2/15/2025 (identified cost $218,160)..................... $218,470
-----------
$300,000 REPURCHASE AGREEMENTS (2.7%)
Salomon Brothers, Inc., 5.28%, 5/1/96
(Agreement dated 4/30/96 collateralized by $297,000
U.S. Treasury Notes 7.875%, due 4/15/98; $300,044
to be received upon maturity) (identified cost $300,000) .... $300,000
-----------
TOTAL INVESTMENTS (identified cost $10,943,623)(a).......................... 98.7% $10,800,581
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES.............................. 1.3 140,458
========= ===========
NET ASSETS.................................................................. 100.0% $10,941,039
========= ===========
</TABLE>
(a) The aggregate cost for federal income tax purposes is $10,943,623, the
aggregate gross unrealized appreciation is $42,694 and the aggregate gross
unrealized depreciation is $185,736, resulting in net unrealized
depreciation of $143,042.
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET SHORT/INTERMEDIATE FIXED INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1996
(unaudited)
ASSETS:
Investments in securities, at value
(identified cost $10,943,623) (Note 1) ................. $ 10,800,581
Cash ..................................................... 22,288
Receivables for:
Interest .............................................. 217,264
Capital stock sold .................................... 3,140
Deferred organization expenses (Note 1) .................. 5,476
------------
Total Assets ....................................... 11,048,749
------------
LIABILITIES:
Payables for:
Capital stock redeemed ................................ 100,600
Expense payment fee (Note 2) .......................... 5,737
Administrative fee (Note 2) ........................... 1,373
------------
Total Liabilities .................................. 107,710
------------
NET ASSETS .................................................. $ 10,941,039
============
Net Assets Consist of:
Paid-in capital .......................................... $ 11,454,561
Accumulated undistributed net investment income .......... 1,187
Accumulated net realized loss ............................ (371,667)
Net unrealized depreciation .............................. (143,042)
------------
Net Assets .................................................. $ 10,941,039
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($10,941,039 -- 1,141,669 shares) ........................ $ 9.58
============
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET SHORT/INTERMEDIATE FIXED INCOME FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 1996
(unaudited)
INVESTMENT INCOME:
Income:
Interest ..................................................... $365,611
--------
Expenses:
Expense payment fee (Note 2) ................................. 36,724
Administrative fee (Note 2) .................................. 8,343
Amortization of organization expenses (Note 1) ............... 2,213
--------
Total Expenses ............................................ 47,280
--------
Net Investment Income ..................................... 318,331
--------
NET REALIZED AND UNREALIZED GAIN (LOSS) (Notes 1 and 3)
Net realized gain on investments ............................. 61,320
Net change in unrealized appreciation on investments ......... (262,204)
---------
Net Realized and Unrealized Loss .......................... (200,884)
--------
Net Increase in Net Assets Resulting from Operations ......... $117,447
=========
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET SHORT/INTERMEDIATE FIXED INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the six
months ended For the
April 30, 1996 year ended
(unaudited) October 31, 1995
----------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ........................................ $318,331 $568,463
Net realized gain (loss) on investments ...................... 61,320 (246,469)
Net change in unrealized appreciation/depreciation
on investments ............................................ (262,204) 661,339
----------- -----------
Net increase in net assets resulting from operations ...... 117,447 983,333
----------- -----------
Dividends declared from net investment income (Note 1) ......... (316,909) (568,662)
----------- -----------
Capital stock transactions (Note 4):
Net proceeds from sales of capital stock ..................... 2,093,949 5,781,933
Net asset value of capital stock issued to shareholders
in reinvestment of dividends .............................. 191,222 277,410
Net cost of capital stock redeemed ........................... (1,974,676) (5,971,534)
----------- -----------
Net increase in net assets resulting from capital
stock transactions ..................................... 310,495 87,809
----------- -----------
Total increase in net assets ........................... 111,033 502,480
NET ASSETS:
Beginning of period ............................................ 10,830,006 10,327,526
----------- -----------
End of period (including undistributed net investment income
of $1,187 and $0, respectively) .............................. $10,941,039 $10,830,006
=========== ===========
</TABLE>
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET SHORT/INTERMEDIATE FIXED INCOME 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 .......................... $9.76 $9.37 $10.17 $9.93 $10.00
Income from investment operations:
Net investment income .................................. 0.28 0.54 0.52 0.50 0.14
Net realized and unrealized (loss) gain ................ (0.18) 0.39 (0.74) 0.26 (0.09)
Less dividends and distributions (Note 1):
From net investment income ............................. (0.28) (0.54) (0.52) (0.52) (0.12)
From net realized gains ................................ -- -- (0.05) -- --
In excess of net realized gains ........................ -- -- (0.01) -- --
----- ----- ------ ----- ------
Net asset value, end of period ................................ $9.58 $9.76 $9.37 $10.17 $9.93
===== ===== ====== ===== ======
Cumulative investment return ** ............................... 0.98% 10.26% (2.23)% 7.85% 0.49%
Ratios/Supplemental Data:
Net assets, end of period (000's omitted) .............. $10,941 $10,830 $10,328 $9,729 $1,648
Ratio of expenses to average net assets (Note 2) ** .... 0.85%* 0.85% 0.85% 0.85% 0.85%*
Ratio of net investment income to average
net assets ......................................... 5.72%* 5.66% 5.29% 5.32% 6.23%*
Portfolio turnover rate ................................ 80% 228% 129% 149% 207%
</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 1.39%, 1.40%, 1.46%, 1.46% and
6.99%, respectively. For the same periods, the cumulative return of the
Fund would have been 0.44%, 9.71%, (2.84)%, 7.24% and (5.65)%,
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 reduced in connection with specific agreements. Had
these arrangements not been in place, these ratios would have been 1.41%
and 1.43%, respectively.
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET SHORT/INTERMEDIATE FIXED INCOME FUND
NOTES TO FINANCIAL STATEMENTS
(unaudited)
1. Organization and Significant Accounting Policies. The 59 Wall
Street Short/Intermediate Fixed Income 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. Bonds and other fixed income
securities (other than short-term obligations but including listed
issues) are valued on the basis of valuations furnished by a pricing
service, use of which has been approved by the Board of Directors.
In making such valuations, the pricing service utilizes both
dealer-supplied valuations and electronic data processing techniques
which take into account appropriate factors such as
institutional-size trading in similar groups of securities, yield,
quality, coupon rate, maturity, type of issue, trading
characteristics and other market data, without exclusive reliance
upon quoted prices or exchange or over-the-counter prices, since
such valuations are believed to reflect more accurately the fair
value of such securities.
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. 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. Investment transactions are
accounted for on the trade date. Realized gains and losses, if any,
from security transactions are determined on the basis of identified
cost. Interest income is accrued daily and consists of interest
accrued, discount earned (including both original issue and market
discount) and premium amortization on the investments of the Fund.
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
<PAGE>
THE 59 WALL STREET SHORT/INTERMEDIATE FIXED INCOME FUND
NOTES TO FINANCIAL STATEMENTS (continued)
(unaudited)
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 monthly 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.
2. Transactions with Affiliates.
Investment Advisory Fee. 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 0.40% of the Fund's average daily net assets.
Administrative Fee. The Corporation has an administration 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 0.015% 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 $8,343 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 0.85%
of the Fund's average daily net assets. For the six months ended April 30, 1996,
59 Wall Street Administrators, Inc. incurred $68,500 in expenses, including
investment advisory fees of $22,249 and shareholder servicing/eligible
institution fees of $13,906, 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 $7,617,347 and $5,959,409, respectively.
Custody fees for the Fund paid pursuant to the expense payment agreement (see
Note 2) were reduced by approximately $1,200 as a result of an expense offset
arrangement with the Fund's custodian.
<PAGE>
THE 59 WALL STREET SHORT/INTERMEDIATE FIXED INCOME FUND
NOTES TO FINANCIAL STATEMENTS (continued)
(unaudited)
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
months ended year ended
April 30, 1996 October 31, 1995
---------------- ----------------
Capital stock sold ........................... 213,719 604,528
Capital stock issued in connection with
reinvestment of dividends ................. 19,619 29,043
Capital stock repurchased .................... (201,479) (625,878)
-------- --------
Net increase ................................. 31,859 7,693
======== ========
<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 or accompanied an
effective prospectus. Nothing herein contained is to
consideration 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 a other material
information.
