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.
U.S. Equity Fund
SEMI-ANNUAL REPORT
April 30, 1999
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1999
(unaudited)
Shares Value
------ -----
COMMON STOCKS (99.0%)
BASIC MATERIALS (6.3%)
9,800 Alcoa, Inc................. $ 610,050
7,150 DuPont E.I. DeNemours & Co. 504,969
6,450 International Paper Co. .. 343,866
-----------
1,458,885
-----------
CAPITAL GOODS/DURABLES (2.2%)
3,450 United Technologies Corp... 499,819
CONSUMER GOODS (5.0%)
7,100 Ford Motor Co. ........... 453,956
6,700 General Electric Co. ..... 706,850
-----------
1,160,806
-----------
CONSUMER NON-DURABLES (9.1%)
9,250 Avon Products, Inc. ...... 502,391
8,100 BestFoods ................ 406,519
7,850 Gillette Co. ............. 409,672
7,800 Heinz (H.J.) Co. ......... 364,163
4,700 Procter & Gamble Co. ..... 440,919
-----------
2,123,664
-----------
ENERGY (5.9%)
5,700 Chevron Corp. ............ 568,575
4,300 Mobil Corp. .............. 450,425
11,200 Nobel Affiliates, Inc. ... 359,100
-----------
1,378,100
-----------
FINANCE (15.8%)
10,150 Allstate Corp. ........... 369,206
3,400 American Express Co. ..... 444,337
4,250 American International
Group .................. 499,109
9,250 Associates First Capital
Corp. .................. 409,891
5,350 Chase Manhattan Corp. .... 442,712
8,350 Citigroup, Inc. .......... 628,337
5,700 Fannie Mae ............... 404,344
12,000 Vornado Realty Trust ..... 468,000
-----------
3,665,936
-----------
HEALTH CARE (10.8%)
8,050 Abbott Laboratories ...... 389,922
7,000 Bristol Myers Squibb Co. . 444,937
5,150 Johnson & Johnson ........ 502,125
5,350 Lilly (Eli) & Co. ........ 393,894
5,950 Medtronic, Inc. .......... 428,028
7,200 Schering Plough Corp. .... 347,850
-----------
2,506,756
-----------
RETAIL (8.3%)
6,350 Costco Companies, Inc.*.... 513,755
7,100 Dayton Hudson Corp. ...... 477,919
6,850 Home Depot Inc. .......... 410,572
11,400 Wal-Mart Stores, Inc. .... 524,400
-----------
1,926,646
-----------
SERVICES (8.4%)
10,576 AT&T Corp. ............... 534,088
8,750 Carnival Corp. ........... 360,937
6,950 Clear Channel
Communications* ........ 483,025
8,120 Time Warner, Inc. ........ 568,400
-----------
1,946,450
-----------
TECHNOLOGY (23.1%)
4,250 America Online, Inc.* .... 606,687
6,450 Ascend Communications,
Inc.* ................. 622,828
13,900 Cadence Design Systems,
Inc.* .................. 188,519
5,800 Cisco Systems, Inc.* ..... 661,744
9,100 Computer Associates
International, Inc. .... 388,456
4,750 EMC Corp.* ............... 517,453
7,300 Intel Corp. .............. 446,441
2,750 International Business
Machines Corp. ......... 575,266
10,850 Microsoft Corp.* ......... 881,902
6,850 Northern Telecom, Ltd.* .. 467,084
-----------
5,356,380
-----------
UTILITIES (4.1%)
7,800 Ameritech Corp. .......... 533,812
9,450 BellSouth Corp. .......... 422,887
-----------
956,699
-----------
TOTAL COMMON STOCKS
(identified cost $19,726,765) 22,980,141
-----------
Principal
Amount
- -----------
TIME DEPOSIT (1.6%)
$364,000 State Street Bank (Cayman)
4.50%, 05/03/99
(identified cost $364,000) $ 364,000
-----------
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1999 (continued)
(unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
TOTAL INVESTMENTS (identified cost $20,090,765) (a) ........ 100.6% $23,344,141
CASH AND OTHER ASSETS LESS LIABILITIES ..................... (0.6) (144,286)
------ -----------
NET ASSETS ................................................ 100.0% $23,199,855
====== ===========
</TABLE>
- ----------
* Non-income producing security
(a) The aggregate cost for federal income tax purposes is $20,090,765, the
aggregate gross unrealized appreciation is $3,724,727, and the aggregate
gross unrealized depreciation is $471,351, resulting in net unrealized
appreciation of $3,253,376.
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
(unaudited)
ASSETS:
Investments in securities, at value
(identified cost $20,090,765) (Note 1) ................. $ 23,344,141
Cash ..................................................... 769
Receivables for:
Investments sold ....................................... 267,282
Capital stock sold ..................................... 35,731
Dividends .............................................. 22,722
------------
Total Assets ....................................... 23,670,645
------------
LIABILITIES:
Payables for:
Investments purchased .................................. 413,745
Investment advisory fee (Note 2) ....................... 12,796
Shareholder servicing/eligible institution fees (Note 2) 4,922
Administrative fee (Note 2) ............................ 2,953
Accrued expenses and other liabilities ................. 36,374
------------
Total Liabilities .................................. 470,790
------------
NET ASSETS ..................................................... $ 23,199,855
============
Net Assets Consist of:
Paid-in capital .......................................... $ 11,293,525
Accumulated undistributed net investment loss ............ (4,392)
Accumulated net realized gain on investments ............. 8,657,346
Net unrealized appreciation .............................. 3,253,376
------------
Net Assets ..................................................... $ 23,199,855
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($23,199,855 / 1,343,355 shares) ......................... $17.27
======
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET U.S. EQUITY FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 1999
(unaudited)
INVESTMENT INCOME:
Income:
Dividends ............................................... $ 157,071
Interest ................................................ 34,223
-----------
Total Income ........................................ 191,294
-----------
Expenses:
Investment advisory fees (Note 2) ....................... 98,109
Administrative fee (Note 2) ............................. 22,641
Shareholder servicing/eligible institution fees (Note 2) 37,734
Director's fees and expenses (Note 2) ................... 4,013
Custodian fee ........................................... 25,446
Miscellaneous expenses .................................. 20,388
-----------
Total Expenses ...................................... 208,331
Fees paid indirectly (Note 3) ..................... (12,645)
-----------
Net expenses ...................................... 195,686
-----------
Net Investment Loss ................................. (4,392)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) (Notes 1 and 3):
Net realized gain on investments ........................ 8,929,866
Net change in unrealized appreciation on investments .... (2,279,264)
-----------
Net Realized and Unrealized Gain .................... 6,650,602
-----------
Net Increase in Net Assets Resulting from Operations .... $ 6,646,210
===========
See Notes to Financial Statements.
<PAGE>
THE 59 WALL STREET U. S. EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the six
months ended
April 30, 1999 For the year ended
(unaudited) October 31, 1998
-------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss) .......................... $ (4,392) $ 30,320
Net realized gain on investments ...................... 8,929,866 18,080,219
Net change in unrealized appreciation on investments .. (2,279,264) (16,733,860)
------------ ------------
Net increase in net assets resulting
from operations .................................. 6,646,210 1,376,679
------------ ------------
Dividends and distributions declared (Note 1):
From net realized gains ............................... (18,375,827) (4,159,510)
------------ ------------
Capital stock transactions (Note 4):
Net proceeds from sales of capital stock .............. 9,066,956 17,577,439
Net asset value of capital stock issued to shareholders
in reinvestment of dividends and distributions ..... 15,628,940 260,055
Net cost of capital stock redeemed .................... (51,820,967) (22,044,704)
------------ ------------
Net decrease in net assets resulting from capital
transactions ..................................... (27,125,071) (4,207,210)
------------ ------------
Total decrease in net assets .................... (38,854,688) (6,990,041)
NET ASSETS:
Beginning of period ....................................... 62,054,543 69,044,584
------------ ------------
End of period ............................................. $ 23,199,855 $ 62,054,543
============ ============
</TABLE>
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, 1999 --------------------------------------------------------
(unaudited) 1998 1997 1996 1995 1994
-------------- ------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period........ $50.88 $52.73 $42.30 $36.46 $29.84 $28.80
Income from investment operations:
Net investment income..................... -- (2) 0.03 0.21 0.16 0.26 0.26
Net realized and unrealized gain ......... 5.83 1.24 12.22 6.75 7.15 1.05
Less dividends and distributions (Note 1):
From net investment income................ -- -- (0.14) (0.20) (0.28) (0.17)
In excess of net investment income........ -- -- (0.05) -- -- --
Net realized gains ....................... (39.44) (3.12) (1.81) (0.87) (0.51) (0.10)
------ ------- ------ ------- ------ -------
Net asset value, end of period.............. $17.27 $50.88 $52.73 $42.30 $36.46 $ 29.84
====== ======= ====== ======== ====== =======
Total Return1 .............................. 21.16% 2.50% 30.29% 19.32% 25.50% 4.61%
Ratios/Supplemental Data:
Net assets, end of period (000's omitted). $23,200 $62,055 $69,045 $50,773 $32,000 $ 22,124
Expenses as a percentage of average
net assets:
Expenses paid by Fund(1) ............... 1.31%(3) 1.15% 1.20% 1.20% 1.20% 1.20%
Expense offset.......................... 0.08%(3) 0.06% 0.02% n/a n/a n/a
------ ------- ------ ------- ------- -------
Total expenses...................... 1.39%(3) 1.21% 1.22% 1.20% 1.20% 1.20%
Ratio of net investment income/loss to
average net assets ................... (0.03)%(3) 0.04% 0.23% 0.40% 0.84% 1.06%
Portfolio turnover rate................... 77% 104% 37% 42% 69% 61%
- ----------
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........................ N/A N/A 1.16% 1.21% 1.28% 1.46%
Total return......................... N/A N/A 30.33% 19.31% 25.42% 4.35%
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. The expense reimbursement agreement was terminated on
July 1, 1997.
2 Less than $0.01.
3 Annualized.
</TABLE>
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, 1999 the Fund incurred $98,109 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, 1999 the Fund incurred $22,641
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, 1999 the Fund incurred $37,734 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, 1999 the Fund incurred $4,013 for these fees.
3. Investment Transactions. For the six months ended April 30, 1999 the
cost of purchases and the proceeds of sales of investment securities other than
short-term investments were $24,389,699 and $70,837,804, respectively . For that
same period, the Fund paid brokerage commissions of $31,485 to Brown Brothers
Harriman & Co. for transactions executed on its behalf. Custody fees for the
Fund were reduced by $12,645 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:
<TABLE>
<CAPTION>
For the six months For the year ended
April 30, 1999 ended October 31, 1998 October 31, 1998
----------------------- ------------------
<S> <C> <C>
Capital stock sold............................................. 520,137 332,757
Capital stock issued in connection with reinvestment
of dividends and distributions............................... 1,018,172 5,191
Capital stock repurchased...................................... (1,414,690) (427,691)
--------- -------
Net increase (decrease)........................................ 123,619 (89,743)
========= =======
</TABLE>
