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.
Tax-Efficient Equity Fund
SEMI-ANNUAL REPORT
April 30, 1999
<PAGE>
THE 59 WALL STREET TAX-EFFICIENT EQUITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1999
(unaudited)
Shares Value
------ -----
COMMON STOCKS (98.5%)
BASIC MATERIALS (5.8%)
14,000 Monsanto Co. ............................... $ 633,500
25,924 Praxair, Inc. .............................. 1,341,567
----------
1,975,067
----------
CAPITAL GOODS (1.6%)
12,500 Deere & Co. ................................ 537,500
----------
CONSUMER DURABLES (9.4%)
11,914 General Electric Co. ....................... 1,256,927
19,277 Dover Corp. ................................ 712,044
15,582 Illinois Tool Works, Inc. .................. 1,199,814
----------
3,168,785
----------
CONSUMER NON-DURABLES (9.7%)
23,319 Avon Products, Inc. ........................ 1,266,513
10,539 Estee Lauder Companies, Inc. ............... 1,055,217
10,305 Procter & Gamble Co. ....................... 966,738
----------
3,288,468
----------
ENERGY (7.2%)
2,355 BP Amoco ADR ............................... 266,557
20,982 Royal Dutch Petroleum Co.* ................. 1,231,381
20,012 Williams Companies, Inc. ................... 945,567
----------
2,443,505
----------
FINANCE (13.3%)
11,933 American International Group ............... 1,401,382
18,506 AMSouth Bancorporation ..................... 880,192
2,223 Citigroup, Inc. ............................ 167,281
13,122 Fannie Mae ................................. 930,842
15,463 SunTrust Banks, Inc. ....................... 1,105,604
----------
4,485,301
----------
HEALTH (11.1%)
15,864 Bristol Myers Squibb Co. ................... 1,008,355
18,134 Guidant Corp. .............................. 973,569
11,126 Lilly (Eli) & Co. .......................... 819,152
13,407 Medtronic, Inc. ............................ 964,466
----------
3,765,542
----------
RETAIL (6.7%)
17,437 Dayton Hudson Corp. ........................ 1,173,728
16,229 Kohls Corp.* ............................... 1,078,214
-----------
2,251,942
-----------
SERVICES (12.2%)
15,830 CBS Corp.* ................................. 721,254
9,174 Cox Communications, Inc.* .................. 728,186
12,676 Carnival Corp. ............................. 522,885
14,031 Qwest Communications
International, Inc.* ....................... 1,198,335
13,401 Time Warner, Inc. .......................... 938,070
-----------
4,108,730
-----------
TECHNOLOGY (17.9%)
8,572 Hewlett-Packard Co. ........................ 676,117
13,992 Automatic Data Processing,
Inc. ..................................... 622,644
5,853 Perkin Elmer Corp. ......................... 632,856
43,134 Cadence Design Systems,
Inc.* .................................... 585,005
10,432 Cisco Systems, Inc.* ....................... 1,190,226
7,144 EMC Corp.* ................................. 778,249
4,170 International Business
Machines Corp. ............................. 872,312
11,738 Sun Microsystems, Inc.* .................... 702,446
-----------
6,059,855
-----------
UTILITIES (3.6%)
10,018 Duke Energy Co. ............................ 561,008
9,525 GTE Corp. .................................. 637,580
-----------
1,198,588
-----------
TOTAL COMMON STOCKS
(identified cost $27,924,620) .............. 33,283,283
-----------
Principal
Amount Value
------ -----
TIME DEPOSIT (1.5%)
516,000 State Street Bank (Cayman)
4.50%, 05/03/99
(identified cost $516,000) ............... 516,000
-----------
<PAGE>
THE 59 WALL STREET TAX-EFFICIENT EQUITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1999 (continued)
(unaudited)
TOTAL INVESTMENTS (identified cost $28,440,620) (a) ...... 100.0% $33,799,283
CASH AND OTHER ASSETS LESS LIABILITIES ................... 0.0 (10,671)
----- -----------
NET ASSETS .............................................. 100.0% $33,788,612
===== ===========
- ---------------
* Non-income producing security
(a) The aggregate cost for federal income tax purposes is $28,440,620, the
aggregate gross unrealized appreciation is $6,155,949, and the aggregate
gross unrealized depreciation is $797,286, resulting in net unrealized
appreciation of $5,358,663.
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET TAX-EFFICIENT EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
(unaudited)
ASSETS:
Investments in securities, at value (identified cost
$28,440,620) (Note 1) ............................... $ 33,799,283
Cash .................................................... 267
Receivables for:
Capital stock sold .................................... 70,000
Dividends ............................................. 10,422
------------
Total Assets ...................................... 33,879,972
------------
LIABILITIES:
Payables for:
Capital stock redeemed ................................ 66,159
Expense Payment Fee (Note 2) .......................... 21,069
Administrative Fee (Note 2) ........................... 4,132
------------
Total Liabilities ................................. 91,360
------------
NET ASSETS .................................................... $ 33,788,612
============
Net Assets Consist of:
Paid-in capital ......................................... $ 28,504,435
Accumulated undistributed net investment loss ........... (38,931)
Accumulated net realized loss on investments ............ (35,555)
Net unrealized appreciation ............................. 5,358,663
------------
Net Assets .................................................... $ 33,788,612
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($33,788,612 / 2,704,370 shares) ........................ $12.49
======
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET TAX-EFFICIENT EQUITY FUND
STATEMENT OF OPERATIONS
For the period from November 2, 1998
(commencement of operations) to April 30, 1999
(unaudited)
INVESTMENT INCOME:
Income:
Dividends .............................................. $ 91,946
Interest .............................................. 14,381
----------
Total Income ....................................... 106,327
----------
Expenses:
Expense payment fee (Note 2) ........................... 119,601
Administrative fee (Note 2) ............................ 18,157
Organizational expenses ................................ 7,500
----------
Total Expenses ..................................... 145,258
----------
Net Investment Loss ................................ (38,931)
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) (Notes 1 and 3):
Net realized loss on investments ....................... (35,555)
Net change in unrealized appreciation on investments ... 5,358,663
----------
Net Realized and Unrealized Gain ................... 5,323,108
----------
Net Increase in Net Assets Resulting from Operations ... $5,284,177
==========
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET TAX-EFFICIENT EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
(unaudited)
For the period from
November 2, 1998
(commencement of
operations) to
April 30, 1999
-----------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment loss ................................... $ (38,931)
Net realized loss on investments ...................... (35,555)
Net change in unrealized appreciation on investments .. 5,358,663
-----------
Net increase (decrease) in net assets resulting
from operations .................................. 5,284,177
-----------
Capital stock transactions (Note 4):
Net proceeds from sales of capital stock .............. 31,402,624
Net cost of capital stock redeemed .................... (2,898,189)
-----------
Net increase in net assets resulting from capital
transactions ..................................... 28,504,435
-----------
Total increase in net assets .................... 33,788,612
NET ASSETS:
Beginning of period ....................................... --
-----------
End of period ............................................. $33,788,612
===========
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET TAX-EFFICIENT EQUITY FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share outstanding
throughout each period
For the period from
November 2, 1998
(commencement of
operations) to
April 30, 1999
(unaudited)
---------------
Net asset value, beginning of period .......................... $10.00
Income from investment operations:
Net investment income ...................................... (0.01)
Net realized and unrealized gain ........................... 2.50
------
Net asset value, end of period ............................. $12.49
======
Total return .................................................. 24.90%
Ratios/Supplemental data:
Net assets, end of period (000's omitted) .................. $33,789
Expenses as a percentage of average net assets1,2 .......... 1.20%
Ratio of net investment income to average net assets2 ...... (0.32%)
Portfolio turnover rate .................................... 9%
- -----------------
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:
Ratio of expenses to average net assets(2) .............. 1.29%
Total return............................................ 24.81%
2 Annualized.
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET TAX-EFFICIENT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
(unaudited)
1. Organization and Significant Accounting Policies. The 59 Wall Street
Tax-Efficient 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 November 2, 1999.
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. 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 0.65% of the Fund's average daily net assets.
<PAGE>
THE 59 WALL STREET TAX-EFFICIENT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (continued)
(unaudited)
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 period ended April 30, 1999 the Fund incurred $18,157 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.
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 period ended April 30, 1999, 59
Wall Street Administrators, Inc. incurred $156,271 in expenses, including
imvestment advisory fees of $78,682 and shareholder servicing/eligible
institution fees of $30,262, on behalf of the Fund. The Fund's expense payment
fee agreement will terminate on July 31, 2003.
3. Investment Transactions. For the period ended April 30, 1999 the cost
of purchases and the proceeds of sales of investment securities other than
short-term investments were $30,198,113 and $2,237,938, respectively. For that
same period, the Fund paid brokerage commissions of $31,541 to Brown Brothers
Harriman & Co. for transactions executed on its behalf. Custody fees for the
Fund were reduced by $43 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 period from
November 2, 1998
(commencement of
operations) to
April 30, 1999
-----------------
Capital stock sold......................................... 2,953,314
Capital stock repurchased.................................. (248,944)
---------
Net increase............................................... 2,704,370
=========
