Schwartz Value Fund
a series of
Schwartz Investment Trust
3707 W. Maple Road
Bloomfield Hills, Michigan 48301
(810) 644-8500
Board of Trustees
Donald J. Dawson, Jr.
Fred A. Erb
John J. McHale
Sidney F. McKenna
George P. Schwartz, CFA
Gregory J. Schwartz
Officers
Gregory J. Schwartz, Chairman of the Board
George P. Schwartz, CFA, President
Richard L. Platte, Jr., CFA, Vice President/Secretary
Cynthia M. Dickinson, Treasurer
Robert G. Dorsey, CPA, Assistant Vice President
John F. Splain, Assistant Secretary
Mark J. Seger, CPA, Assistant Treasurer
<PAGE>
Investment Adviser
SCHWARTZ INVESTMENT COUNSEL, INC.
3707 W. Maple Road
Bloomfield Hills, Michigan 48301
Distributor
GREGORY J. SCHWARTZ & CO., INC.
3707 W. Maple Road
Bloomfield Hills, Michigan 48301
Custodian
FIFTH THIRD BANK
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Administrator
MGF SERVICE CORP.
P.O. Box 5354
Cincinnati, Ohio 45201
Auditors
DELOITTE & TOUCHE LLP
1700 Courthouse Plaza Northeast
Dayton, Ohio 45402
Legal Counsel
SULLIVAN & WORCESTER
1025 Connecticut Avenue, N.W.
Suite 1000
Washington, D.C. 20036
Schwartz Value Fund is a 100% no load diversified investment company (a mutual
fund). The investment objective is long-term capital appreciation.
<PAGE>
SCHWARTZ
VALUE FUND
a series of
SCHWARTZ
INVESTMENT TRUST
ANNUAL REPORT
for the year ended
DECEMBER 31, 1995
Shareholder Accounts
c/o MGF Service Corp.
P.O. Box 5354
Cincinnati, OH 45201-5354
1-800-543-0407
Corporate Offices
3707 W. Maple Road
Bloomfield Hills, MI 48301
(810) 644-8500
Fax (810) 644-4250
Schwartz Value Fund
<PAGE>
Dear Fellow Shareowner:
The net asset value of the Schwartz Value Fund at December 31, 1995, was
$19.66 after a $1.52 per share distribution of net realized gains. For the
year, the Fund had a total return of 16.9%. It was a good year in absolute
terms, better than our 15% annual target, but disappointing relative to the
major indices which were up 20-40%. The performance of different segments of
the market varied greatly in 1995. Last year large-capitalization stocks and
growth stocks in particular, did exceptionally well. Small-capitalization
stocks, and especially small-cap value stocks, which we emphasize, languished
in comparison.
This is not particularly surprising, and I have seen it happen in the past,
where the types of stocks in which we invest do not get swept up in the
euphoria of major market advances. They tend to be overlooked by the
institutional managers who are investing the large incremental cash flows,
which major market advances precipitate. More so than other stocks, ours tend
to trade on their own news, at their own pace, and at prices which are usually
lower than intrinsic value. That's why we buy them. Happily, they also tend to
be less vulnerable on the downside. Following two years of underperformance,
smaller-capitalization value stocks remain undervalued by virtually any
historical measure. That underperformance increases our conviction that
small-cap value stocks will outperform in the future.
We strive to be contrarian investors because one can't buy stocks at bargain
prices when they're popular. Consequently, we're always looking for companies
and industries where the consensus outlook is temporarily clouded, making the
stock prices unduly depressed. Two industries meeting these standards are
consumer goods companies and specialty retailers. Much has been made of the
difficulties and bankruptcies within these industries. Most of the stocks are
depressed, many with justification. We are purchasing a few with bullet-proof
balance sheets and strong market niches. The former ensures survivability in
the short run, the latter assures profitability in the long run.
While some consumers are overextended, the macro conditions for consumers, and
by extension retailers, are really quite good. Inflation is moderate,
unemployment is down, interest rates are low, and tax rates are about to be
cut. Real wages will rise in the late 90's due to slower labor force growth
and improved productivity. Because aging baby boomers are hitting their peak
earnings years and inheriting unprecedented wealth, the current problems of
excess consumer debt are probably overblown. Also, the rapid attrition which
is taking place within the retail industry is a plus for the survivors.
Consequently, over the balance of the decade, we believe there's a meaningful
opportunity for selected consumer goods companies and specialty retailers to
experience a major turnaround. Believing the best time to accumulate stocks is
when they're unloved and underowned, we've established positions in some fine
companies at attractive prices. Recent purchases of companies with strong
balance sheets and defined market niches include K-Swiss Inc., Reebok
International Ltd., Helen of Troy Limited, Windmere Corporation, The Dress
Barn, Inc., and Ellett Brothers, Inc. All of these companies enjoy above
average levels of profitability and staying power associated with their
franchises.
<PAGE>
Despite the fact that 1996 may be a bit rocky from an economic perspective,
there are many reasons to regard stocks favorably on a long-term basis. With a
competitive labor force and a cheap dollar, the U.S. is poised to capitalize
on its re-established world-class productivity in manufacturing and services.
Technologically, the U.S. has a dramatic lead over most foreign competitors,
plus a huge middle class of 80 million well educated, healthy baby boomers in
their most productive years. Over time, savings rates will rise as the boomers
age, favorably impacting the budget deficit, the balance of trade, and the
demand for stocks and bonds. However, in the near term, because the economy is
looking weaker and the bull market is getting aged, the capital markets in
1996 may hit some air pockets. If so, it will prove useful for long-term
investors trying to buy shares of excellent companies at reduced prices. We
intend to do so.
During the year Schwartz Investment Counsel, Inc., augmented its analytical
staff by hiring George Sertl from St. Louis, Missouri. George's work is
devoted exclusively to unearthing investment opportunities for the Schwartz
Value Fund. With depth of knowledge and an unusually keen understanding of
value investing, he has made an immediate contribution.
The Schwartz Value Fund annual meeting of shareowners will be held at
Bloomfield Hills Country Club on Long Lake Road, Bloomfield Hills, Michigan,
on April 25, 1996, at 10:00 A.M. I hope you'll attend and bring your best
questions.
With best regards,
SCHWARTZ VALUE FUND
George P. Schwartz, CFA
February 1, 1996 President
<PAGE>
<TABLE>
<CAPTION>
Annual Total Rates of Return
Compound Annual
Rates of Return
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 5 Year 10 Year
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SCHWARTZ
VALUE FUND (A) 16.4% -0.6% 23.1% 8.3% -5.3% 32.0% 22.7% 20.5% -6.8% 16.9% 16.4% 12.1%
RUSSELL 2000
INDEX 5.7% -8.8% 24.9% 16.2% -19.5% 46.0% 18.4% 18.9% -3.2% 26.2% 20.2% 11.0%
NASDAQ COMPOSITE (B) 7.4% -5.3% 15.4% 19.3% -17.8% 56.8% 15.5% 14.7% -3.2% 39.9% 23.0% 12.5%
VALUE LINE COMPOSITE (B) 5.0% -10.6% 15.4% 11.2% -24.3% 27.2% 7.0% 10.7% -6.0% 19.3% 11.1% 4.4%
STANDARD & POORS 500 18.7% 5.3% 16.8% 31.6% -3.2% 30.4% 7.6% 10.1% 1.3% 37.5% 16.6% 14.9%
DOW JONES INDUST. AVG. 27.2% 5.5% 16.2% 32.3% -0.6% 24.3% 7.4% 17.0% 5.0% 36.9% 17.6% 16.5%
CONSUMER
PRICE INDEX 1.1% 4.4% 4.4% 4.6% 6.1% 3.1% 2.9% 2.7% 2.7% 2.6% 2.8% 3.5%
<FN>
- ----------------
(A) Schwartz Value Fund's performance combines the performance of the Fund,
since its commencement of operations on July 20, 1993, and the performance
of RCM Partners Limited Partnership for periods prior to July 20, 1993.
(B) Excludes dividends.
</TABLE>
<PAGE>
<TABLE>
SCHWARTZ VALUE FUND
Ten Largest Equity Holdings
December 31, 1995
<CAPTION>
Market
Shares Company Value
<S> <C> <C>
200,000 Core Industries Inc. $2,575,000
90,000 Reebok International Ltd. $2,542,500
50,000 Nautica Enterprises, Inc. $2,187,500
150,000 The Horsham Corporation $2,025,000
177,100 K-Swiss Inc. $1,925,963
100,000 TriMas Corporation $1,887,500
150,000 Dravo Corporation $1,800,000
225,000 Windmere Corporation $1,603,125
100,000 Ottawa Financial Corporation $1,562,500
150,000 The Dress Barn, Inc. $1,481,250
</TABLE>
<PAGE>
<TABLE>
SCHWARTZ VALUE FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<CAPTION>
Market
Shares COMMON STOCK -- 96.4% Value
<S> <C> <C>
APPAREL & TEXTILES -- 13.0%
70,000 Dixie Yarns, Inc.* $ 271,250
177,100 K-Swiss Inc. 1,925,963
50,000 Nautica Enterprises, Inc.* 2,187,500
90,000 Reebok International Ltd. 2,542,500
6,927,213
BUILDING MATERIALS AND CONSTRUCTION -- 6.3%
90,000 ABT Building Products Corporation* 1,282,500
68,000 Gardner Denver Machinery Inc.* 1,292,000
24,000 Industrial Acoustics Company, Inc. 240,000
55,000 MLX Corp.* 550,000
3,364,500
CONSUMER PRODUCTS -- DURABLES -- 6.1%
135,000 Ameriwood Industries International Corporation* 523,125
50,000 Craftmade International, Inc. 337,500
64,600 Griffon Corporation* 581,400
51,000 HMI Industries Inc. 612,000
125,000 Orbit International Corp.* 109,375
40,000 Sturm, Ruger & Company, Inc. 1,095,000
3,258,400
CONSUMER PRODUCTS -- NONDURABLES -- 5.5%
30,000 Helen of Troy Limited* 630,000
280,000 Pentech International, Inc.* 560,000
1,250 Velcro Industries N.V. 76,563
900 Weyco Group, Inc. 33,750
225,000 Windmere Corporation 1,603,125
2,903,438
ENERGY & MINING -- 7.8%
20,000 American Oilfield Divers, Inc.* 142,500
20,000 Dawson Geophysical Company* 187,500
150,000 Dravo Corporation* 1,800,000
150,000 The Horsham Corporation 2,025,000
15,000 ONI International, Inc.* 3,750
4,158,750
<PAGE>
<CAPTION>
FINANCE -- BANKING & THRIFTS -- 16.9%
25,000 Bell Bancorp, Inc. $ 893,750
7,500 Calumet Bancorp, Inc.* 208,125
30,000 Coastal Bancorp, Inc. 525,000
15,000 Comerica Incorporated 601,875
15,000 Conestoga Bancorp, Inc. 301,875
2,460 Damen Financial Corporation* 27,983
53,000 FSB Financial Corporation* 1,219,000
20,000 Fidelity Bancorp, Inc. 307,500
27,000 FirstFed Bancshares, Inc. 573,750
20,000 Jacksonville Savings Bank 277,500
20,000 Landmark Bancshares, Inc. 270,000
15,000 Liberty Bancorp, Inc. 378,750
10,000 MFB Corp.* 147,500
2,000 Metairie Bank & Trust Company 50,000
15,000 MSB Bancorp, Inc. 277,500
15,900 NHS Financial, Inc. 159,000
100,000 Ottawa Financial Corporation 1,562,500
8,100 Peoples Bancorp 167,063
30,000 St. Paul Bancorp Inc. 765,000
16,200 TF Financial Corporation 243,000
8,956,671
FINANCE -- INSURANCE -- 2.9%
20,300 CapMAC Holdings Inc.* 510,038
40,000 Integon Corporation 825,000
3,000 MBIA Inc. 225,000
1,560,038
FOOD & TOBACCO -- 2.2%
35,000 UST 1,168,125
HEALTH CARE -- 2.4%
10,000 Health Care & Retirement Corporation* 350,000
100,000 NovaCare, Inc.* 512,500
15,000 Research Medical, Inc.* 405,000
1,267,500
<PAGE>
<CAPTION>
INDUSTRIAL PRODUCTS & SERVICES -- 11.4%
200,000 Core Industries Inc. $2,575,000
19,755 Detroit & Canada Tunnel Corporation 651,915
10,055 M.H. Rhodes, Inc.* 60,330
100,000 TriMas Corporation 1,887,500
100,000 UNR Industries, Inc. 862,500
6,037,245
REAL ESTATE -- 2.7%
16,499 I. Gordon Corporation* 123,743
15 LaFourche Realty Company, Inc. 62,250
100,000 Malan Realty Investors, Inc. 1,237,500
1,423,493
RETAIL -- 5.2%
93,900 Best Products Co., Inc.* 446,025
47,500 D.I.Y. Home Warehouse, Inc.* 166,250
150,000 The Dress Barn, Inc.* (2) 1,481,250
47,000 Ellett Brothers, Inc. 376,000
70,500 Evans, Inc.* 96,938
20,000 The Good Guys, Inc.* 180,000
2,746,463
TECHNOLOGY & ELECTRONICS -- 10.9%
33,500 Astrosystems, Inc.* 188,438
50,000 Dallas Semiconductor Corporation 1,037,500
71,200 Data Research Associates, Inc.* 1,335,000
100,000 ESCO Electronics Corporation* 937,500
30,000 Perceptron, Inc.* 667,500
20,000 Rainbow Technologies, Inc.* 432,500
20,000 SPSS Inc.* 390,000
75,000 Universal Electronics Inc.* 562,500
19,000 X-Rite, Incorporated 268,375
5,819,313
MISCELLANEOUS -- .1%
12,500 Bull & Bear Group, Inc.* 20,313
465 The Detroit Legal News Company 37,200
57,513
CLOSED-END FUNDS -- 3.0%
50,000 Inefficient-Market Fund, Inc. 490,625
70,000 Royce Micro-Cap Trust, Inc. 560,000
50,000 Scudder New Europe Fund, Inc. 568,745
1,619,370
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Market
Value COMMON STOCK -- 96.4% Value
<S> <C> <C>
TOTAL COMMON STOCK (COST $46,153,744) $51,268,032
PREFERRED STOCK -- .5% (COST $198,808)
50,000 Telos Corporation, 12% Cumulative Exchangeable
Preferred 243,750
U.S. GOVERNMENT & AGENCY BONDS -- 1.9%
$1,000,000 Federal Home Loan Bank, 5.575%, 6/12/96 1,001,163
CORPORATE BONDS -- .3%
$ 200,000 Jacobson Stores Inc. Convertible Subordinated
Debentures, 6.75%, 12/15/11 143,000
TOTAL BONDS (COST $1,149,503) 1,144,163
REPURCHASE AGREEMENTS (1) -- 3.7% (COST $1,979,000)
$1,979,000 Nesbitt Government Securities, Inc., 5.45%, dated
12/29/95, due 01/02/96, repurchase proceeds
$1,980,198 1,979,000
TOTAL INVESTMENTS -- 102.8% (COST $49,481,055) 54,634,945
OTHER LIABILITIES IN EXCESS OF
OTHER ASSETS -- (2.8)% (1,498,057)
NET ASSETS -- 100% $53,136,888
<FN>
* Non-income producing securities.
(1) Repurchase agreements are fully collateralized by U.S. Government
obligations.
(2) A Trustee of the Fund owns more than 5% of this security.
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
SCHWARTZ VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
<CAPTION>
<S> <C>
ASSETS
Investments, at market value (cost of $49,481,055)
(Note 1) $ 54,634,945
Cash 4,522
Dividends and interest receivable 93,773
Receivable for securities sold 216,495
Receivable for capital shares sold 17,449
Other assets 7,852
TOTAL ASSETS 54,975,036
LIABILITIES
Payable for capital shares redeemed 8,250
Distributions payable to shareholders 250,207
Payable for securities purchased 1,338,634
Accrued investment advisory fees (Note 2) 199,646
Other accrued expenses and liabilities 41,411
TOTAL LIABILITIES 1,838,148
NET ASSETS $ 53,136,888
NET ASSETS CONSIST OF:
Paid in capital $ 48,110,616
Distributions in excess of net realized gains on
investments (127,618)
Net unrealized appreciation on investments 5,153,890
NET ASSETS $ 53,136,888
Shares of beneficial interest outstanding (unlimited
number of shares authorized, no par value) 2,702,902
Net asset value, redemption price, and offering price
per share $ 19.66
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
SCHWARTZ VALUE FUND
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
<CAPTION>
<S> <C>
INVESTMENT INCOME
Interest $ 299,164
Dividends 627,148
TOTAL INVESTMENT INCOME 926,312
EXPENSES
Investment advisory fees (Note 2) 765,583
Administration, accounting, and transfer agent fees
and expenses (Note 2) 112,416
Legal and audit fees 52,003
Trustees' fees and expenses 45,397
Insurance expense 18,175
Reports to shareholders 8,667
Registration fees 7,657
Other expenses 10,868
TOTAL EXPENSES 1,020,766
NET INVESTMENT LOSS (94,454)
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains on investments 3,912,706
Net change in unrealized appreciation on
investments 3,856,574
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS 7,769,280
NET CHANGE IN NET ASSETS FROM OPERATIONS $ 7,674,826
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
SCHWARTZ VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended December 31, 1995 and 1994
<CAPTION>
<S> <C> <C>
1995 1994
FROM OPERATIONS:
Net investment loss $ (94,454) $ (159,436)
Net realized gains on investments 3,912,706 3,160,109
Net change in unrealized appreciation
(depreciation) on investments 3,856,574 (6,191,709)
Net increase (decrease) in net assets from operations 7,674,826 (3,191,036)
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gains on investments (3,830,754) (3,160,109)
In excess of net realized gains on investments -- (152,542)
Net decrease in net assets from distributions to
shareholders (3,830,754) (3,312,651)
FROM FUND SHARE TRANSACTIONS (A):
Proceeds from shares sold 5,819,563 14,433,921
Reinvestment of distributions 3,580,547 3,074,882
Payments for shares redeemed (5,203,945) (6,612,150)
Net increase in net assets from Fund share
transactions 4,196,165 10,896,653
TOTAL INCREASE IN NET ASSETS 8,040,237 4,392,966
NET ASSETS:
Beginning of year 45,096,651 40,703,685
End of year $ 53,136,888 $ 45,096,651
(A) SUMMARY OF CAPITAL SHARE ACTIVITY:
Shares sold 291,957 704,331
Shares issued in reinvestment of distributions to
shareholders 182,123 169,695
Shares redeemed (260,324) (325,821)
Net increase in shares outstanding 213,756 548,205
Shares outstanding, beginning of year 2,489,146 1,940,941
Shares outstanding, end of year 2,702,902 2,489,146
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
SCHWARTZ VALUE FUND
FINANCIAL HIGHLIGHTS
Per Share Data for a Share Outstanding
Throughout Each Period
<CAPTION>
Year Year July 20, 1993 (A)
Ended Ended To
Dec. 31, 1995 Dec. 31, 1994 Dec. 31, 1993
<S> <C> <C> <C>
Net asset value at beginning of period $18.12 $20.97 $ 19.71
Income from investment operations:
Net investment loss (0.03) (0.05) (0.06)
Net realized and unrealized gains (losses) on
investments 3.09 (1.37) 1.95
Total from investment operations 3.06 (1.42) 1.89
Less dividends and distributions:
From net realized capital gains on investments (1.52) (1.36) (0.63)
In excess of net realized gains on investments -- (0.07) --
Total dividends and distributions (1.52) (1.43) (0.63)
Net asset value at end of period $19.66 18.12 $ 20.97
Total return 16.9 % (6.8)% 9.6 % (B)
Ratio of expenses to average net assets 2.00 % 2.01 % 2.13 % (C)
Ratio of net investment loss to average net assets (0.18)% (0.36)% (0.63)% (C)
Portfolio turnover rate 70 % 78 % 65 % (C)
<FN>
- ----------------
(A) Commencement of operations.
(B) Not annualized.
(C) Annualized.
See notes to financial statements.
</TABLE>
<PAGE>
SCHWARTZ VALUE FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
______________________________________________________________________________
1. Significant Accounting Policies
Schwartz Value Fund (the "Fund") is a series of Schwartz Investment Trust, a
diversified open-end management investment company established as an Ohio
Business Trust under a Declaration of Trust dated August 31, 1992. The Fund is
registered under the Investment Company Act of 1940 and commenced operations
on July 20, 1993. The Fund determines and makes available for publication the
net asset value of its shares on a daily basis.
The investment objective of the Fund is to seek long-term capital appreciation
through investment in basic value common stocks. This investment in common
stocks, by definition, entails the risk of loss of capital to shareholders.
See the Prospectus for more detailed information regarding the investment
objectives of the Fund.
In 1993, the Fund, prior to offering shares to the public, exchanged its
shares for partnership interests in RCM Partners Limited Partnership, whose
General Partner was Schwartz Management Company, an affiliate of Schwartz
Investment Counsel, Inc.
The following is a summary of significant accounting policies followed by the
Fund.
(a) Valuation of investments -- Securities which are traded on stock
exchanges or are quoted by NASDAQ are valued at the last reported sale
price as of the close of business on the day of valuation, or, if not
traded on a particular day, at the average of the highest current
independent bid and lowest current independent offer; securities traded
in the over-the-counter market, not quoted by NASDAQ, are valued at the
average of the highest current independent bid and lowest current
independent offer as of the close of trading on the day of valuation,
and; securities (and other assets) for which market quotations are not
readily available are valued at their fair market value as determined in
good faith pursuant to procedures established by the Board of Trustees.
Short-term securities are valued at amortized cost, which approximates
market value.
(b) Income taxes -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code ("Code") applicable to
regulated investment companies and to distribute substantially all
taxable income to the shareholders. Therefore, no provision for income
taxes is necessary.
<PAGE>
The Fund files a tax return annually using tax accounting methods
required under provisions of the Code which may differ from generally
accepted accounting principles ("GAAP"), the basis on which these
financial statements are prepared. The differences arise primarily from
the deferral of certain losses under Federal income tax regulations.
Accordingly, the amount of net investment income or loss and net
realized capital gain or loss reported in the financial statements may
differ from that reported in the Fund's tax return and, consequently,
the character of distributions to shareholders reported in the financial
highlights may differ from that reported to shareholders for Federal
income tax purposes.
(c) Security transactions and investment income -- Security transactions
are accounted for on the trade date. Dividend income is recorded on the
ex-dividend date. Interest income is recognized on the accrual basis.
Realized gains and losses on security transactions are determined on the
identified cost basis.
(d) Dividends and distributions -- Dividends from net investment income
and net capital gains are declared and paid annually in December.
Dividends and distributions to shareholders are recorded on the
ex-dividend date.
2. Investment Advisory Agreement and Transactions with Related Parties The
President of the Fund is also the President and Chief Investment Officer of
Schwartz Investment Counsel, Inc. (the "Adviser"). The Chairman of the Board
of the Fund is also the President and CEO of Gregory J. Schwartz & Co., Inc.
(the "Distributor"), the exclusive agent for the distribution of the Fund's
shares. Certain other trustees and officers of the Fund are officers of the
Adviser or of MGF Service Corp. ("MGF"), the administrative, accounting, and
transfer agent for the Fund.
Pursuant to an Investment Advisory Agreement between the Fund and the Adviser,
the Adviser is responsible for the management of the Fund and provides
investment advice along with the necessary personnel, facilities, equipment,
and certain other services necessary to the operations of the Fund. For such
services, the Fund pays the Adviser a quarterly fee equal to the annual rate
of 1.5% of the average daily net assets up to $75 million; 1.25% of such
assets from $75 million to $100 million; and 1% of such assets in excess of
$100 million.
The Distributor is the exclusive agent for the distribution of the Fund and
receives fees from the Adviser, not the Fund or its shareholders.
Pursuant to an Administration, Accounting, and Transfer Agency Agreement
between MGF and the Fund, MGF supplies regulatory and compliance services,
calculates the daily net asset value per share, maintains the financial books
and records of the Fund, maintains the records of each shareholder's account,
and processes purchases and redemptions of the Fund's shares. For the
performance of these services, the Fund pays MGF a fee, payable monthly, at an
annual rate of .22% of average daily net assets up to $25 million; .20% of
such assets from $25 million to $100 million; and .15% of such assets in
excess of $100 million.
<PAGE>
3. Investment Transactions
Purchases and proceeds from sales and maturities of investments other than
short-term investments, for the year ended December 31, 1995 were $34,456,836
and $32,549,681, respectively. As of December 31, 1995, net unrealized
appreciation of securities was $5,025,838 for Federal income tax purposes of
which $9,084,223 related to appreciated securities and $4,058,385 related to
depreciated securities. The aggregate cost of investments at December 31,
1995, for Federal income tax purposes was $49,609,107.
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS AND TRUSTEES
SCHWARTZ VALUE FUND
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of Schwartz Value Fund (the "Fund") as
of December 31, 1995, the related statement of operations for the year then
ended, the statements of changes in net assets, and the financial highlights
for each of the periods presented. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1995, by correspondence with the Fund's custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights present
fairly, in all material respects, the financial position of Schwartz Value
Fund at December 31, 1995, the results of its operations, the changes in its
net assets, and the financial highlights for the respective stated periods, in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Dayton, Ohio
JANUARY 18, 1996
<PAGE>
Schwartz Value Fund
INVESTMENT PHILOSOPHY
Schwartz Value Fund ("SVF") seeks superior, long-term performance
through value investing -- purchasing shares of strong, growing companies at
reasonable prices. Because small and medium size companies offer vast reward
opportunities, fundamental analysis is used to identify emerging companies
with outstanding business characteristics. Sometimes the best values are
issues not followed by Wall Street analysts.
Most value investors buy fair companies at an excellent price. SVF buys
excellent companies at a fair price. This is the essence of value investing.
SVF attempts to find companies with great business characteristics like an
unassailable franchise which by its nature, offers a margin of safety. A truly
fine business requires few assets to produce a consistently expanding stream
of income. SVF also purchases shares which are temporarily out-of-favor and
selling below intrinsic value.
A common thread in SVF investments is that the market price is below
what a corporate or entrepreneurial buyer might be willing to pay for the
entire business. The auction nature and the inefficiencies of the stock market
are such that SVF can often buy a minority interest in a fine company at a
small fraction of the price per share necessary to acquire the entire company.
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<NAME> SCHWARTZ INVESTMENT TRUST - SCHWARTZ VALUE FUND
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