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U.S. Equity Fund
SEMI-ANNUAL REPORT
April 30, 1998
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998
(unaudited)
Shares Value
- ------ -----------
COMMON STOCKS (98.9%)
AEROSPACE/DEFENSE (3.4%)
21,028 Boeing Co................................................. $ 1,052,714
30,000 Rockwell Intl. Corp....................................... 1,678,125
-----------
2,730,839
-----------
APPLIANCES (1.6%)
50,000 Sunbeam Corp.............................................. 1,256,250
-----------
BANKING (2.5%)
25,000 SunTrust Banks, Inc....................................... 2,035,938
-----------
COMPUTER RELATED (8.7%)
38,000 3Com Corp.*............................................... 1,302,688
15,000 Cisco Systems, Inc.*...................................... 1,099,219
30,000 Hewlett-Packard Co........................................ 2,259,374
20,000 International Business Machines Corp...................... 2,317,500
-----------
6,978,781
-----------
COMPUTER SERVICES (2.2%)
30,750 Computer Associates International, Inc.................... 1,800,797
-----------
COMPUTER SOFTWARE (6.5%)
19,000 Automatic Data Processing, Inc............................ 1,271,813
46,500 Bay Networks, Inc.* ...................................... 1,089,844
55,500 Cadence Design Systems, Inc.*............................. 2,015,343
20,000 Electric Data Systems Corp................................ 860,000
-----------
5,237,000
-----------
COSMETICS & TOILETRIES (1.7%)
17,000 Avon Products, Inc........................................ 1,397,188
-----------
ELECTRIC POWER (0.8%)
17,000 DTE Energy Co............................................. 666,188
-----------
ELECTRICAL EQUIPMENT (2.2%)
21,000 General Electric Co....................................... 1,787,625
-----------
ELECTRONIC TECHNOLOGY (2.1%)
38,000 Stratus Computer, Inc*. .................................. 1,655,375
-----------
EXPLORATION/DRILLING (3.1%)
28,000 Nobel Affiliates, Inc..................................... 1,207,500
54,000 Union Pacific Resources Group Inc. ....................... 1,289,250
-----------
2,496,750
-----------
FINANCE (2.5%)
2,369 Security Capital Group (Warrants)......................... 6,663
90,000 Security Capital Pacific Trust............................ 2,013,750
-----------
2,020,413
-----------
FINANCIAL SERVICES (7.1%)
36,000 Fannie Mae................................................ 2,155,500
21,000 PMI Group, Inc. (The)..................................... 1,706,250
30,000 Travelers Group Inc....................................... 1,835,624
-----------
5,697,374
-----------
FOOD & BEVERAGES (6.7%)
39,000 Heinz (H.J.) Co........................................... 2,125,500
38,000 PepsiCo, Inc.............................................. 1,508,125
33,000 Quaker Oats Co............................................ 1,716,000
-----------
5,349,625
-----------
INSURANCE (3.4%)
35,000 Everest Reinsurance Holdings, Inc. ....................... 1,443,750
43,000 UICI*..................................................... 1,241,625
-----------
2,685,375
-----------
MACHINERY/EQUIPMENT (3.9%)
25,200 Deere & Co................................................ 1,472,625
24,000 Sundstrand Corp........................................... 1,657,500
-----------
3,130,125
-----------
MEDIA (4.9%)
50,000 Cox Communications, Inc.*................................. 2,231,250
22,000 Time Warner Inc........................................... 1,727,000
-----------
3,958,250
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MEDICAL SUPPLIES & SERVICES (7.3%)
32,000 Bausch & Lomb Inc......................................... 1,582,000
20,000 Baxter International Inc.................................. 1,108,750
30,000 Beckman Coulter Inc....................................... 1,670,624
28,000 Medtronic, Inc............................................ 1,473,500
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5,834,874
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<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (continued)
(unaudited)
Shares Value
- ------ -----------
NATURAL GAS (3.2%)
10,000 Consolidated Natural Gas Co............................... $ 575,000
53,000 MCN Energy Group Inc...................................... 2,000,750
-----------
2,575,750
-----------
OIL (4.1%)
24,000 Amoco Corp................................................ 1,062,000
20,000 Halliburton Co............................................ 1,100,000
14,600 Mobil Corp................................................ 1,153,400
-----------
3,315,400
-----------
PAPER/FOREST PRODUCTS (3.6%)
23,000 Bowater Inc............................................... 1,286,563
13,000 Consolidated Papers, Inc.................................. 860,437
20,000 Willamette Industries, Inc................................ 776,250
-----------
2,923,250
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PHARMACEUTICALS (2.4%)
28,000 Lilly (Eli) & Co.......................................... 1,947,750
-----------
RECREATION (2.2%)
14,000 Walt Disney Co. (The)..................................... 1,740,375
-----------
RESTAURANT/LODGING (1.6%)
40,000 Hilton Hotels Corp........................................ 1,277,500
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RETAIL (9.4%)
50,000 Borders Group, Inc.*...................................... 1,606,250
47,000 Costco Companies, Inc.*................................... 2,623,188
25,000 Lowe's Companies, Inc..................................... 1,748,438
56,000 Toys "R" Us, Inc.*........................................ 1,543,500
-----------
7,521,376
-----------
TELECOMMUNICATIONS (1.8%)
33,600 WorldCom, Inc.*........................................... 1,437,450
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TOTAL INVESTMENTS (identified cost $49,584,530) (a) ... 98.9% $79,457,618
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ........ 1.1 874,740
----- -----------
NET ASSETS ........................................... 100.0% $80,332,358
===== ===========
- ----------
* Non-income producing security
(a) The aggregate cost for federal income tax purposes is $49,584,530, the
aggregate gross unrealized appreciation is $30,474,386, and the aggregate
gross unrealized depreciation is $601,298, resulting in net unrealized
appreciation of $29,873,088.
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1998
(unaudited)
ASSETS:
Investments in securities, at value (identified
cost $49,584,530) (Note 1) ............................... $79,457,618
Cash ....................................................... 2,122,264
Receivables for:
Investments sold ......................................... 117,331
Capital stock sold ....................................... 27,043
Dividends ................................................ 24,994
-----------
Total Assets ......................................... 81,749,250
-----------
LIABILITIES:
Payables for:
Capital stock redeemed ................................... 1,307,168
Investment advisory fee (Note 2) ......................... 43,731
Shareholder servicing/Eligible
institution fees (Note 2) .............................. 16,820
Administrative fee (Note 2) .............................. 10,092
Accrued expenses and other liabilities ................... 39,081
-----------
Total Liabilities .................................... 1,416,892
-----------
NET ASSETS ................................................... $80,332,358
===========
Net Assets Consist of:
Paid-in capital ............................................ $48,283,353
Accumulated undistributed net investment income ............ 12,058
Accumulated net realized gain on investments ............... 2,163,859
Net unrealized appreciation ................................ 29,873,088
-----------
Net Assets ................................................... $80,332,358
===========
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($80,332,358 / 1,420,008 shares).......................... $56.57
======
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 1998
(unaudited)
INVESTMENT INCOME:
Income:
Dividends ................................................. $ 419,667
-----------
Expenses:
Investment advisory fees (Note 2) ......................... 241,355
Administrative fee (Note 2) ............................... 55,697
Shareholder servicing/Eligible
institution fees (Note 2) ............................... 92,928
Director's fees and expenses (Note 2) ..................... 4,305
Custodian fee ............................................. 20,749
Miscellaneous expenses .................................... 31,477
-----------
Total Expenses ........................................ 446,511
Fees paid indirectly (Note 3) ....................... (20,749)
-----------
Net expenses ........................................ 425,762
-----------
Net Investment Loss ................................... (6,095)
-----------
NET REALIZED AND UNREALIZED GAIN (Notes 1 and 3):
Net realized gain on investments ............................ 2,189,244
Net change in unrealized appreciation on investments ........ 7,606,588
-----------
Net Realized and Unrealized Gain ........................ 9,795,832
-----------
Net Increase in Net Assets Resulting from Operations ........ $ 9,789,737
===========
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET U. S. EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
For the six
months ended
April 30, 1998 For the year ended
(unaudited) October 31, 1997
-------------- -----------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment (loss) income ......... $ (6,095) $ 139,682
Net realized gain on investments ..... 2,189,244 4,907,031
Net change in unrealized
appreciation on investments ........ 7,606,588 10,671,447
------------ ------------
Net increase in net assets
resulting from operations ....... 9,789,737 15,718,160
------------ ------------
Dividends and distributions declared
(Note 1):
From net investment income ........... -- (173,313)
In excess of net investment income ... -- (60,926)
From net realized gains .............. (4,159,510) (2,197,030)
------------ ------------
Total dividends and distributions
declared ....................... (4,159,510) (2,431,269)
------------ ------------
Capital stock transactions (Note 4):
Net proceeds from sales of
capital stock ..................... 12,165,550 14,116,589
Net asset value of capital stock
issued to shareholders in
reinvestment of dividends
and distributions ................. 260,055 1,586,012
Net cost of capital stock redeemed ... (6,768,058) (10,717,604)
------------ ------------
Net increase in net assets
resulting from capital
stock transactions .............. 5,657,547 4,984,997
------------ ------------
Total increase in net assets ... 11,287,774 18,271,888
NET ASSETS:
Beginning of period ...................... 69,044,584 50,772,696
------------ ------------
End of period (including undistributed
net investment income of $12,058
and $18,153, respectively) ........... $ 80,332,358 $ 69,044,584
============ ============
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
months ended For the years ended October 31,
April 30, 1998 -------------------------------------------------------
(unaudited) 1997 1996 1995 1994 1993
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period............. $52.73 $42.30 $36.46 $29.84 $28.80 $25.77
Income from investment operations:
Net investment income.......................... (0.01) 0.21 0.16 0.26 0.26 0.28
Net realized and unrealized gain .............. 6.97 12.22 6.75 7.15 1.05 3.04
Less dividends and distributions (Note 1):
From net investment income..................... -- (0.14) (0.20) (0.28) (0.17) (0.29)
In excess of net investment income............. -- (0.05) -- -- -- --
Net realized gains ............................ (3.12) (1.81) (0.87) (0.51) (0.10) --
------ ------ ------ ------ ------ ------
Net asset value, end of period................... $56.57 $52.73 $42.30 $36.46 $29.84 $28.80
====== ====== ====== ====== ====== ======
Total Return .................................... 13.96% 30.29% 19.32% 25.50% 4.61% 12.91%
Ratios/Supplemental Data:
Net assets, end of period (000's omitted)...... $80,332 $69,045 $ 50,773 $ 32,000 $ 22,124 $10,992
Expenses as a percentage of average
net assets:
Expenses paid by Fund........................ 1.15%(1,2) 1.20%(1) 1.20%(1) 1.20%(1) 1.20%(1) 1.20%(1)
Expense offset............................... 0.05%(2) 0.02% n/a n/a n/a n/a
------ ------ ------ ------ ------ ------
Total expenses........................... 1.20%(2) 1.22% 1.20% 1.20% 1.20% 1.20%
Ratio of net investment income to
average net assets ........................ (0.02)%(2) 0.23% 0.40% 0.84% 1.06% 1.07%
Portfolio turnover rate........................ 9% 37% 42% 69% 61% 52%
Average commission rate paid
per share................................... $0.0600 $0.0731 $0.0800 $0.0800 -- --
</TABLE>
- --------------
(1) Had the expense payment agreement not been in place, the ratio of expenses
to average net assets and total return would have been as follows:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Ratio of expenses to average
net assets............................ N/A 1.16% 1.21% 1.28% 1.46% 2.09%
Total return............................. N/A 30.33% 19.31% 25.42% 4.35% 12.02%
</TABLE>
Furthermore, the ratio of expenses to average net assets for the year
ended October 31, 1997, 1996 and 1995 reflect fees paid with brokerage
commission and fees reduced in connection with specific arrangements. Had
these arrangements not been in place, the ratio would have been 1.18%,
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. Interest income is accrued daily.
C. 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 or net investment income. 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.
D. 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 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 0.65% of the Fund's average daily net assets. For the
six months ended April 30, 1998, the Fund incurred $241,355 for investment
advisory services.
Administrative Fee. The Corporation has an administrative agreement with
Brown Brothers Harriman & Co. (the "Administrator") for which it pays the
Administrator a fee 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, 1998, the Fund incurred
$55,697 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 average daily net assets of the Fund. For the six months ended
April 30, 1998, the Fund incurred $92,928 for shareholder servicing/eligible
institution services.
Board of Directors' Fees. Each Director receives an annual fee as well as
reimbursement for reasonable out-of-pocket expenses from the Fund. For the six
months ended April 30, 1998 the Fund incurred $ 4,305 for these fees.
3. Investment Transactions. For the six months ended April 30, 1998, the
cost of purchases and the proceeds of sales of investment securities other than
short-term investments were $7,427,254 and $5,531,365, respectively. For that
same period, the Fund paid brokerage commissions of $4,428 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 $20,749 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 $0.001 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 months For the year ended
ended April 30, 1998 October 31, 1997
------------------- -----------------
Capital stock sold.................... 230,073 297,331
Capital stock issued in connection
with reinvestment of dividends
and distributions................... 5,191 35,562
Capital stock repurchased............. (124,734) (223,618)
-------- --------
Net increase.......................... 110,530 109,275
======== ========
<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.
21 Milk Street
Boston, Massachusetts 02109
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.
