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U.S. Equity Fund
SEMI-ANNUAL REPORT
April 30, 1997
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1997
(unaudited)
Shares Value
-----------
COMMON STOCKS (99.8%)
AEROSPACE/DEFENSE (1.8%)
10,514 Boeing Co. ............................................. $ 1,036,943
-----------
APPLIANCES (2.8%)
50,000 Sunbeam Corp., Inc. .................................... 1,587,500
-----------
BANKING (3.7%)
16,000 BankBoston Corp. ....................................... 1,164,000
19,000 SunTrust Banks, Inc. ................................... 964,250
-----------
2,128,250
-----------
CHEMICALS (2.4%)
11,000 FMC Corp.* ............................................. 738,375
13,000 Praxair, Inc. .......................................... 671,125
-----------
1,409,500
-----------
COMPUTER RELATED (9.1%)
38,000 3Com Corp.* ............................................ 1,104,375
20,000 Cisco Systems, Inc.* ................................... 1,036,250
10,000 International Business
Machines Corp. ....................................... 1,607,500
38,000 Stratus Computer, Inc.* ................................ 1,477,250
-----------
5,225,375
-----------
COMPUTER SERVICES (2.8%)
30,500 Computer Associates
International, Inc. .................................. 1,586,000
-----------
COMPUTER SOFTWARE (5.0%)
46,500 Bay Networks, Inc.* .................................... 825,375
42,750 Cadence Design
Systems, Inc.* ....................................... 1,368,000
20,000 Electronic Data
Systems Corp. ........................................ 667,500
-----------
2,860,875
-----------
COSMETICS & TOILETRIES (1.8%)
17,000 Avon Products, Inc. .................................... 1,047,625
-----------
ELECTRICAL EQUIPMENT (3.4%)
10,500 General Electric Co. ................................... 1,164,187
12,000 Raychem Corp. .......................................... 774,000
-----------
1,938,187
-----------
ELECTRIC POWER (0.8%)
17,000 DTE Energy Co. ......................................... 454,750
-----------
EXPLORATION/DRILLING (3.3%)
28,000 Noble Affiliates, Inc. ................................. 1,001,000
34,000 Union Pacific Resouces
Group, Inc. .......................................... 922,250
-----------
1,923,250
-----------
FINANCIAL SERVICES (4.4%)
36,000 Fannie Mae ............................................. 1,480,500
21,000 PMI Group, Inc. (The) .................................. 1,073,625
-----------
2,554,125
-----------
FOOD & BEVERAGES (6.7%)
29,000 Heinz (H.J.) Co. ....................................... 1,203,500
38,000 PepsiCo, Inc. .......................................... 1,325,250
33,000 Quaker Oats Co. ........................................ 1,320,000
-----------
3,848,750
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INSURANCE (3.9%)
9,500 American International
Group, Inc. .......................................... 1,220,750
35,000 Everest Reinsurance
Holdings., Inc. ...................................... 1,006,250
-----------
2,227,000
-----------
MACHINERY/EQUIPMENT (5.6%)
10,000 Caterpillar, Inc. ...................................... 890,000
25,200 Deere & Co. ............................................ 1,159,200
24,000 Sundstrand Corp. ....................................... 1,170,000
-----------
3,219,200
-----------
MEDIA (1.7%)
50,000 Cox Communications, Inc.* .............................. 975,000
-----------
MEDICAL SUPPLIES & SERVICES (9.7%)
32,000 Bausch & Lomb, Inc. .................................... 1,292,000
20,000 Baxter International, Inc. ............................. 957,500
30,000 Beckman Instruments, Inc. . ............................ 1,260,000
16,000 Guidant Corp. ......................................... 1,092,000
14,000 Medtronic, Inc. ....................................... 969,500
-----------
5,571,000
-----------
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1997 (continued)
(unaudited)
Shares Value
NATURAL GAS (2.3%)
10,000 Consolidated Natural
Gas Co. ............................................. $ 503,750
28,000 MCN Energy Group, Inc. ................................ 801,500
-----------
1,305,250
-----------
OIL (5.5%)
12,000 Amoco Corp. .......................................... 1,003,500
17,000 Halliburton Co. ...................................... 1,200,625
7,300 Mobil Corp. .......................................... 949,000
-----------
3,153,125
-----------
PAPER/FOREST PRODUCTS (4.1%)
23,000 Bowater, Inc. ........................................ 994,750
13,000 Consolidated Papers, Inc. . ........................... 698,750
10,000 Willamette Industries, Inc. ........................... 637,500
-----------
2,331,000
-----------
PHARMACEUTICALS (2.1%)
14,000 Lilly (Eli) & Co. .................................... 1,230,250
-----------
PHOTO & OPTICAL (2.0%)
13,500 Eastman Kodak Co. .................................... 1,127,250
-----------
REAL ESTATE (1.8%)
45,000 Security Capital
Pacific Trust ...................................... 1,023,750
-----------
RECREATION (2.0%)
14,000 Walt Disney Co. (The) ................................ 1,148,000
-----------
RESTAURANT/LODGING (1.9%)
40,000 Hilton Hotels Corp. .................................. 1,080,000
-----------
RETAIL (6.0%)
47,000 Costco Companies, Inc.* .............................. 1,360,063
25,000 Lowe's Companies, Inc. ............................... 950,000
41,000 Toys "R" Us, Inc.* ................................... 1,168,500
-----------
3,478,563
-----------
STEEL (1.8%)
40,000 Allegheny Teledyne, Inc. ............................. 1,065,000
-----------
TELECOMMUNICATIONS (1.4%)
33,600 WorldCom, Inc.* ...................................... 804,300
-----------
TOTAL INVESTMENTS (identified cost
$43,448,730)(a) ................................ 99.8% $57,339,818
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES .... 0.2 136,280
----- -----------
NET ASSETS ....................................... 100.0% $57,476,098
===== ===========
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* Non-income producing security
(a) The aggregate cost for federal income tax purposes is $43,448,730, the
aggregate gross unrealized appreciation is $14,972,526, and the aggregate
gross unrealized depreciation is $1,081,438, resulting in net unrealized
appreciation of $13,891,088.
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997
(unaudited)
ASSETS:
Investments in securities, at value (identified
cost $43,448,730) (Note 1) ............................ $ 57,339,818
Cash ..................................................... 793,943
Receivables for:
Investments sold ....................................... 103,135
Dividends .............................................. 23,305
Deferred organization expenses (Note 1) .................. 1,045
------------
Total Assets ....................................... 58,261,246
------------
LIABILITIES:
Payables for:
Capital stock redeemed ................................. 730,997
Expense payment fee (Note 2) ........................... 49,599
Administrative fee (Note 2) ............................ 4,552
------------
Total Liabilities .................................. 785,148
------------
NET ASSETS .................................................. $ 57,476,098
============
Net Assets Consist of:
Paid-in capital .......................................... $ 41,180,627
Distributions in excess of net investment income ......... (4,169)
Accumulated net realized gain ............................ 2,408,552
Net unrealized appreciation .............................. 13,891,088
------------
Net Assets .................................................. $ 57,476,098
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($57,476,098 / 1,282,630 shares) ...................... $44.81
======
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 1997
(unaudited)
INVESTMENT INCOME:
Income:
Dividends ................................................. $ 467,019
----------
Expenses:
Expense payment fee (Note 2) .............................. 280,064
Administrative fee (Note 2) ............................... 40,326
Amortization of organization expenses ..................... 2,215
----------
Total Expenses ........................................ 322,605
----------
Net Investment Income ................................. 144,414
----------
NET REALIZED AND UNREALIZED GAIN (Notes 1 and 3):
Net realized gain on investments .......................... 2,504,211
Net change in unrealized appreciation on investments ...... 2,296,035
----------
Net Realized and Unrealized Gain ...................... 4,800,246
----------
Net Increase in Net Assets Resulting from Operations .. $4,944,660
==========
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET U. S. EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
For the For the
six months ended year ended
April 30, 1997 October 31,
(unaudited) 1996
------------ -------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income .................. $ 144,414 $ 171,797
Net realized gain on investments ....... 2,504,211 1,528,243
Net change in unrealized
appreciation on investments ...... 2,296,035 5,413,968
------------ ------------
Net increase in net
assets resulting
from operations ................... 4,944,660 7,114,008
------------ ------------
Dividends and distributions
declared (Note 1):
From net investment income ............. (182,214) (199,768)
From net realized gains ................ (1,598,748) (781,118)
------------ ------------
Total dividends and
distributions declared ........... (1,780,962) (980,886)
------------ ------------
Capital stock transactions (Note 4):
Net proceeds from sales of
capital stock ...................... 7,073,169 20,795,408
Net asset value of capital stock
issued to shareholders in
reinvestment of distributions ...... 1,166,332 662,852
Net cost of capital stock redeemed ..... (4,699,797) (8,818,369)
------------ ------------
Net increase in net assets
resulting from capital
stock transactions ............... 3,539,704 12,639,891
------------ ------------
Total increase in net assets ..... 6,703,402 18,773,013
NET ASSETS:
Beginning of period ........................ 50,772,696 31,999,683
------------ ------------
End of period (distribution in excess
of net investment income of $4,169
and undistributed net investment
income of $33,631) .................... $ 57,476,098 $ 50,772,696
============ ============
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 six For the period
months ended July 23, 1992
April 30, For the years ended October 31, (commencement of
1997 -------------------------------------- operations) to
(unaudited) 1996 1995 1994 1993 October 31,1992
----------- ------- ------ ------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $42.30 $36.46 $29.84 $28.80 $25.77 $25.00
Income from investment operations:
Net investment income....................... 0.12 0.16 0.26 0.26 0.28 0.07
Net realized and unrealized gain ........... 3.88 6.75 7.15 1.05 3.04 0.76
Less dividends and distributions from (Note 1):
Net investment income....................... (0.15) (0.20) (0.28) (0.17) (0.29) (0.06)
Net realized gains ......................... (1.34) (0.87) (0.51) (0.10) -- --
------ ------ ------ ------ ------ ------
Net asset value, end of period................ $44.81 $42.30 $36.46 $29.84 $28.80 $25.77
====== ====== ====== ====== ====== ======
Total Return.................................. 9.64%(1) 19.32%(1) 25.50%(1) 4.61%(1) 12.91%(1) 3.32%(1)
Ratios/Supplemental Data:
Net assets, end of period (000's omitted)... $57,476 $ 50,773 $ 32,000 $ 22,124 $10,992 $2,378
Expenses as a percentage
of average net assets...................... 1.20%(1,2) 1.20%(1) 1.20%(1) 1.20%(1) 1.20%(1) 1.20%(1,2)
Ratio of net investment income
to average net assets...................... 0.55%(2) 0.40% 0.84% 1.06% 1.07% 1.20%(2)
Portfolio turnover rate..................... 28% 42% 69% 61% 52% 2%
Average commission rate
paid per share............................. $0.08 $0.08 $0.08 -- -- --
</TABLE>
- ------------
(1) Had the expense payment agreement not been in place, the ratio of expenses
to average net assets would have been as follows:
Ratio of expenses to
average net
assets.............. 1.21%(2) 1.21% 1.28% 1.46% 2.09% 5.58%(2)
Total return......... 9.63% 19.31% 25.42% 4.35% 12.02% (1.06)%(2)
The expense payment agreement will terminate on July 1, 1997. At current
asset levels, management believes that the ratio of expenses to average net
assets would be at least 1.20%.
Furthermore, the ratio of expenses to average net assets for the year ended
October 31, 1996 and 1995 reflect fees paid with brokerage commissions and
fees reduced in connection with specific agreements. Had these arrangements
not been in place, the ratio would have been 1.30% and 1.38%, respectively.
(2) Annualized.
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 Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require management to make certain
estimates and assumptions at the date of the financial statements and are based,
in part, on the following accounting policies. Actual results could differ from
those estimates.
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. 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 differences such as losses deferred due to "wash sale"
transactions and utilization of capital loss carryforwards. These
differences may result in temporary over-distributions for financial
statement purposes. 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, 1997, the Fund incurred
$40,326 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, 1997,
59 Wall Street Administrators, Inc. incurred approximately $276,770 in expenses,
including investment advisory fees of $174,744 and shareholder
servicing/eligible institution fees of $67,209, 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, 1997, the
cost of purchases and the proceeds of sales of investment securities other than
short-term investments were $15,097,515 and $15,237,387, respectively. For that
same period, the Fund paid brokerage commissions of $16,316 to Brown Brothers
Harriman & Co. for transactions executed on its behalf. Custody fees for the
Fund paid pursuant to the expense payment agreement were reduced by $15,350 as a
result of an expense offset arrangement with the Fund's 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
months ended year ended
April 30, October 31,
1997 1996
------------ -----------
Capital stock sold................................... 161,706 528,010
Capital stock issued in connection with
reinvestment of dividends and distributions........ 27,232 17,456
Capital stock repurchased............................ (106,512) (222,860)
------- -------
Net increase......................................... 82,426 322,606
======= =======
<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.
