AMT Capital Fund, Inc
_____________________
Semi-Annual Report
June 30, 1996
AMT Capital Services, Inc
600 Fifth Avenue, New York, New York 10020
Telephone (212) 332-5211 Long Distance (800) 762-4848
Facsimile (212) 332-5190
AMT Capital Fund, Inc.
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President's Letter
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August 23, 1996
Dear Shareholder:
We are pleased to present the Semi-Annual Report for the AMT Capital Fund,
Inc. for the six-month period ended June 30, 1996. The Fund's Portfolios
produced strong performance, ahead of their benchmarks and their competition.
The HLM International Equity Portfolio grew substantially since year end 1995,
with net assets now at $195 million. The Portfolio's adviser, Harding, Loevner
Management, L.P., maintains an active strategy of focusing on companies which
offer exceptional prospects for financial growth. This "bottom-up" strategy,
which can produce returns that vary considerably from index returns in the
short-run, returned 17.62% for the one-year period ending June 30, 1996, with
positive performance versus the market and against the Lipper International Fund
Index.
The Money Market Portfolio continued its record of outperforming its
benchmark, the IBC/Donoghue's Money Market Fund Average, in every month and for
the one-year period ending June 30, 1996. The Money Market Portfolio provided
a total return of 5.37%, outperforming its benchmark by 19 basis points for this
twelve-month period. Net assets were $25.2 million as of June 30, 1996.
We greatly appreciate your interest and participation in the AMT Capital
Fund, Inc. Please do not hesitate to contact us with questions or comments
regarding this report or any other matter in which we can be
of assistance.
Sincerely,
/s/ Alan M. Trager
Alan M. Trager
President
AMT Capital Fund, Inc.
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Table of Contents
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HLM International Equity Portfolio - Overview............................ 1
HLM International Equity Portfolio - Statement of Net Assets............. 2
Money Market Portfolio - Overview........................................ 6
Money Market Portfolio - Statement of Net Assets......................... 7
Statements of Operations................................................. 9
Statements of Changes in Net Asset....................................... 10
Financial Highlights..................................................... 11
Notes to Financial Statements............................................ 13
AMT Capital Fund, Inc.
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HLM International Equity Portfolio
June 30, 1996
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The HLM International Equity Portfolio provided a total return of 11.79%
for the first six months of 1996 and 17.62% for the one-year period ending June
30, 1996. Its benchmark, the MSCI World ex USA Index (net dividends
reinvested), returned 4.70% and 13.35% for the same periods, respectively.
International funds tracked by Lipper Analytical Services returned 8.46% and
16.44%, respectively. The Portfolio ended the period with net assets of $153.3
million. As of the publishing of this report, the net assets have reached $195
million. The Portfolio's objective is to seek long-term capital appreciation
through investments in companies based outside the United States.
Developments in the First Quarter
U.S. equities continued their strong performance in early 1996. Even a
sharp increase in long-term interest rates did not cool the ardour of mutual
fund investors, who poured money into equity and fixed income funds at record
rates. Among the beneficiaries of this trend were international funds, whose
inflows contributed to the worldwide rise in markets in the first part of the
year. Currency markets were stable, and, as usual, the Portfolio benefited
from that stability. A number of well-performing stocks contributed to the
Portfolio's performance during the quarter, including Bayer, a German chemical
company (up 32.9% in local currency terms), Societe Generale de Surveillance, a
Swiss inspection services company (up 19.5%), IHC Caland, a Dutch engineering
company (up 24.8%), and Nestle Malaysia, a Southeast Asian food manufacturer
(up 21%). All meet the portfolio manager's investment criteria as high quality,
well-managed companies that are leaders in their area of expertise or in the
geographical markets in which they operate.
Developments in the Second Quarter
There were a number of individual stocks that contributed to the Portfolio's
strong performance in the second quarter despite the fact that there
were very small gains in the first half for the two largest non-U.S. stock
markets, the U.K. and Japan. The gains in the Portfolio were made in the face
of consistently rising yields in the U.S. bond market --- in earlier periods a
deterrent for international equities --- and despite depreciation of the
Japanese yen and European currencies against the dollar. Several companies in
the Portfolio were beneficiaries of the rising U.S. dollar: Honda Motor,
Nippondenso, Surveillance, and Unitor. Additionally, other stocks contributed
to performance on the basis of stock selection as distinct from country
allocation: Blenheim and Rentokil, for example each rose more than 15% whereas
the U.K. market overall went up by just 3%. Finally, a number of the companies
that performed well this year, such as Surveillance, Wolters Kluwer,
Nippondenso, Bayer, and Imperial Oil, did so partly in response to steps that
their management took to improve their returns to shareholders.
Outlook
Looking forward, the portfolio manager sees a continuing trend toward
management focus on creating shareholder value, on increasing financial
strength, and on global competitiveness, attributes of a number of the
Portfolio's securities.
Investment Performance (For Periods Ended June 30, 1996)
Total Return
Since
Inception*
Six Months Last 12 months (annualized)
HLM International Equity Portfolio 11.79% 17.62% 9.78%
MSCI World Ex-USA Index (net) 4.70% 13.35% 8.59%
Lipper International Fund Index 8.46% 16.44% 7.46%
* The HLM International Equity Portfolio commenced operations on May 11, 1994
AMT Capital Fund, Inc.
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HLM International Equity Portfolio - Statement of Net Assets
June 30, 1996 (unaudited)
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Shares Value
Long-Term Instruments - 95.5%
Equities - 91.7%
Argentina - 1.1%
Quilmes Industrial SA - ADR (Foods/Beverages)* 75,600 $ 774,900
Quilmes Industrial SA - (Foods/Beverages)* 92,200 945,050
Total (Cost - $2,127,534) 1,719,950
Bermuda - 1.1%
PartnerRe Holdings Ltd. (Insurance)
(Cost - $1,522,816) 55,100 1,646,113
Canada - 1.9%
Imperial Oil Ltd. (Oil/Gas)
(Cost - $2,714,704) 70,700 2,978,238
France - 2.5%
Financiere et Industrielle Gaz et
Eaux (Diversified Holdings) 7,500 3,055,286
Primagaz Cie (Oil/Gas) 7,510 831,854
Total (Cost - $3,514,919) 3,887,140
Germany - 9.2%
Bayer AG (Chemicals) 123,600 4,357,250
Deutsche Bank AG (Financial) 90,300 4,264,184
Hochtief AG (Engineering) 5,300 2,374,173
Hornbach Baumarkt AG (Retail) 33,500 1,516,036
Muenchener Rueckversicherung (Insurance) 744 1,532,209
Total (Cost - $13,443,231) 14,043,852
Hong Kong - 6.2%
Chen Hsong Holdings (Machinery) 1,300,000 696,984
Hutchison Whampoa Ltd. (Diversified Holdings) 1,015,000 6,385,957
Johnson Electric Holdings Ltd.
(Electrical Equipment) 1,091,000 2,452,478
Total (Cost - $8,721,930) 9,535,419
Indonesia - 0.7%
PT Wicaksana Overseas International
(Distribution/Wholesale)
(Cost - $1,006,731) 371,000 1,020,150
Japan - 17.7%
Atlantis Japan Growth Fund (Investment Company)* 265,000 $ 2,814,115
Atlantis Japan Growth Fund Warrants Expiring
4/30/10 (Investment Company)* 53,000 177,550
Canon Sales Co., Inc. (Distribution/Wholesale) 109,500 3,036,965
Canon, Inc. (Office Equipment) 193,000 4,001,455
Honda Motor Co., Ltd. (Automotive) 149,000 3,847,959
Ito-Yokado Co., Ltd. (Retail) 76,000 4,568,155
Mitsubishi Heavy Industries Ltd. (Aerospace) 522,000 4,523,653
Nippondenso Co., Ltd. (Electrical Equiptment) 193,000 4,176,958
Total (Cost - $24,316,572) 27,146,810
Malaysia - 5.0%
Nestle Berhad (Foods/Beverages) 270,000 2,174,104
Nylex Berhad (Chemicals) 667,000 2,565,179
Sime Darby Berhad (Diversified Holdings) 1,038,000 2,869,241
Total (Cost - $7,076,905) 7,608,524
Netherlands - 10.8%
IHC Caland NV (Transportation) 89,400 4,392,350
Randstad Holdings NV (Commercial Services) 29,100 2,144,587
Royal Dutch Petroleum Co. - ADR (Oil/Gas) 41,800 6,426,750
Wolters Kluwer NV (Publishing) 31,800 3,606,493
Total (Cost - $13,332,945) 16,570,180
Norway - 3.6%
Norsk Hydro AS - ADR (Oil/Gas) 65,233 3,188,263
Unitor Ships Service - ADR (Commercial Services) 144,000 2,327,458
Total (Cost - $5,136,855) 5,515,721
Philippines - 1.0%
Philippine Commercial International
Bank (Financial)
(Cost - $1,421,479) 121,000 1,513,077
Singapore - 6.6%
Acer Computer International Ltd. (Computers) 560,000 1,086,400
Courts Ltd. (Retail) 605,000 964,126
Development Bank of Singapore - Foreign
Registered Shares (Financial) 255,000 3,178,695
Keppel Corp. Ltd. (Transportation) 577,000 4,822,295
Total (Cost - $10,315,459) 10,051,516
South Africa - 1.2%
LibLife Strategic Investments, Ltd.
(Diversified Holdings)
(Cost - $1,838,851) 528,000 1,786,008
Spain - 3.2%
Banco Intercontinental Espanol (Financial)
(Cost - $4,302,777) 44,500 4,970,653
Sweden - 2.6%
Astra AB - Bearer Shares (Pharmaceuticals)
(Cost - $3,536,647) 91,700 3,989,537
Switzerland - 12.6%
ABB AG - Registered Shares (Engineering) 23,500 5,716,894
Nestle SA - ADR (Foods/Beverages) 86,700 4,943,634
SGS Societe Generale de Surveillance
Holding SA - Bearer Shares (Commercial Services) 1,975 4,715,125
SGS Societe Generale de Surveillance
Holding SA - Registered Shares (Commercial
Services) 4,400 1,929,055
Sika Finanz AG - Bearer Shares (Building
Materials) 8,030 1,952,291
Total (Cost - $17,312,131) 19,256,999
United Kingdom - 4.7%
Blenheim Group p.l.c. (Commercial Services) 489,700 3,200,647
Rentokil Group p.l.c. (Commercial Services) 645,400 4,083,347
Total (Cost - $5,361,452) 7,283,994
Total Equities - (Cost - $127,003,938) 140,523,881
Convertible Bonds - 3.8%
Face
Amount
Bangkok Bank Public Co. (Thailand),
3.250% due 3/3/04 (Financial) $ 3,920,000 4,468,800
Far East Levingston Shipbuilding (Singapore),
1.500% due 5/02/01 (Oil/Gas - Equipment
Services) 1,410,000 1,371,225
Total (Cost - $5,687,898) 5,840,025
Total Long-Term Investments -
(Cost - $132,691,836) 146,363,906
Short-Term Investments - 4.4%
Investors Bank & Trust Company Repurchase
Agreement, 5.030% due 7/1/96; Issued
6/28/96 (Collateralized by $7,012,975 par
of Federal National Mortgage Association
Pool #303703, 8.000% due 12/1/22 $ 6,736,468 $ 6,736,468
(Cost - $6,736,468)
Total Investments - 99.9% (Cost - $139,428,304) 153,100,374
Other Assets net of Liabilities - 0.1%
Foreign currency holdings (Cost - $422,977) 417,972
Other assets 593,077
Payable for securities purchased (629,493)
Payable for capital shares redeemed (168,452)
Other liabilities (56,569)
Other assets and liabilities, net 156,535
Net Assets - 100.0%
Applicable to 12,723,835 outstanding $.001
par value shares
(authorized 250,000,000 shares) $ 153,256,909
Net Asset Value Per Share $ 12.04
Components of Net Assets as of June 30, 1996 were as follows:
Capital stock at par value ($.001) $ 12,724
Capital stock in excess of par value 137,560,849
Undistributed investment income, net 1,170,265
Accumulated net realized gain on investments and
foreign currency-related transactions 849,042
Net unrealized appreciation on investments and on
assets and liabilities denominated in foreign currencies 13,664,029
$ 153,256,909
*Non-income producing securities See Notes to Financial Statements
AMT Capital Fund, Inc.
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Money Market Portfolio
June 30, 1996
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The Money Market Portfolio provided a total return of 5.37% for the one-year
period ending June 30, 1996, continuing its record of outperforming its
benchmark, the IBC/Donoghue's Money Market Fund Average, in every month since
inception, and by 19 basis points for this twelve-month period. The seven-day
yield as of June 25, 1996 was 4.96% versus the seven-day yield of the
IBC/Donoghue's Money Market Fund Average of 4.78%. The Portfolio invests in
high-quality, short-term money market instruments. Its objective is to seek
current income, liquidity and the maintenance of a stable net asset value.
Net assets were $25.2 million as of June 30, 1996.
Developments in the First Quarter
In the first three months of the year, interest rates rose materially
in response to stronger economic data. The powerful year-end bond market
rally continued in January, driven by a slight slowing in consumer and
capital spending, a sharp downturn in federal spending, and expectations for
significant cuts in future budget deficits. After a 25 basis point reduction
in the discount rate and the federal funds rate on January 31, Fed Chairman
Alan Greenspan dismissed any major concerns about downside risks to economic
growth, causing a violent readjustment of market expectations and a
staggering one-day rise in yields of nearly one quarter of one percent.
Without prospects for further near term reductions in the federal funds rate,
Treasury yields rose steadily throughout the remainder of the quarter.
Developments in the Second Quarter
On the heels of February's staggeringly high employment figures and
the accompanying sell-off in the Treasury market, market participants began
the second quarter searching for clues to the relative strength of the
economy. With wage inflation fears beginning to surface and rising
expectations that the Federal Reserve might tighten monetary policy as early
as July, market participants pushed interest rates higher and produced
negative returns in intermediate and longer maturity securities. Throughout
the first half of the year short duration positions, or positions held near
the duration of the benchmark at 2-2.5 months, assisted the Portfolio in
outperforming its benchmark.
Outlook
The fixed income markets may have reached a turning point. The weaker
growth of 1995 induced lower interest rates which have helped to reignite
economic growth. The bond market has quickly reversed from one which was
anticipating excessive Federal Reserve easing to one which foresees
tightening later in 1996. The incoming economic data during the quarter
should help set the near-term course of monetary policy. The Portfolio is
currently maintaining a neutral duration position relative to the benchmark.
AMT Capital Fund, Inc.
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Money Market Portfolio - Statement of Net Assets
June 30, 1996 (unaudited)
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Face
Amount Value
Bank Obligations - 38.4%
ABN/Amro Bank Yankee CD, 5.005% due 8/9/96 $ 1,000,000 $ 1,000,005
Bank of Boston (Nassau) Time Deposit,
5.500% due 7/1/96 702,000 702,000
Bank of Nova Scotia Yankee CD, 5.370%
due 7/16/96 1,000,000 1,000,000
Bayerische Landesbank Euro CD, 5.100%
due 7/5/96 1,000,000 1,000,011
NationsBank Bankers Acceptance, 5.270%
due 8/21/96* 1,000,000 992,534
Republic National Bank NY (London) Euro
CD, 5.460% due 9/20/96 1,000,000 1,000,000
Sun Trust Bankers Acceptance, 5.280%
due 8/12/96* 1,000,000 993,840
Toronto Dominion Euro CD, 5.090%
due 8/23/96 1,000,000 1,000,000
Union Bank of Switzerland Euro CD, 5.050%
due 7/8/96 1,000,000 1,000,004
Wachovia Bank Georgia N.A. CD, 5.330%
due 7/17/96 1,000,000 999,995
Total (Cost - $9,688,389) 9,688,389
Commercial Paper - 43.4%*
Cheltenham & Glouchester p.l.c., 5.280%
due 7/2/96 1,000,000 999,854
Daimler Benz N.A.due 7/9/96, 5.265%
due 7/9/96 1,000,000 998,830
Falcon Asset Securitization, 5.330%
due 7/12/96 1,000,000 998,372
Ford Motor Credit Co., 5.285%
due 7/29/96 1,000,000 995,890
General Electric Capital Corp., 5.300%
due 8/7/96 1,000,000 994,553
Glaxo Wellcome p.l.c., 5.370%
due 8/14/96 1,000,000 993,437
Hewlett Packard Co., 5.350%
due 8/20/96 1,000,000 992,569
Ing Bank N.V., 5.270% due 7/9/96 1,000,000 998,829
McKenna Triangle Corp., 5.310% due 7/2/96 1,000,000 999,853
National Australia Funding, 5.300% due 8/6/96 1,000,000 994,700
Sandoz Corp., 5.270% due 7/29/96 1,000,000 995,900
Total (Cost - $10,962,787) 10,962,787
U.S. Government and Agency - 17.7% *
Federal Home Loan Mortgage Corp. DN,
5.260% due 8/28/96 1,000,000 991,527
Student Loan Corporation DN 5.285%
due 7/26/96 1,000,000 996,329
U.S. Treasury Bill, 5.085% due 9/19/96 2,500,000 2,471,750
Total (Cost - $4,459,606) 4,459,606
Total Investments - 99.5% (Cost - $25,110,782 ) 25,110,782
Value
Other Assets net of Liabilities - 0.5%
Receivable from Investment Adviser $ 10,428
Other assets 154,682
Distributions payable from investment income, net (7,629)
Other liabilities (20,891)
Other assets and liabilities, net 136,590
Net Assets - 100.0%
Applicable to 25,223,589 outstanding $.001
par value shares
(authorized 250,000,000 shares) $ 25,247,372
Net Asset Value Per Share $ 1.00
Components of Net Assets as of June 30, 1996 were as follows:
Capital stock at par value ($.001) $ 25,224
Capital stock in excess of par value 25,198,365
Accumulated net realized gain on investments 23,783
$ 25,247,372
* Interest rate shown represents yield to maturity at time of purchase.
See Notes to Financial Statements
AMT Capital Fund, Inc.
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Statements of Operations
For the Six Months Ended June 30, 1996 (unaudited)
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HLM International Money
Equity Portfolio Market Portfolio
----------------- ----------------
Investment Income
Interest $ 246,755 $ 705,853
Dividends (net of withholding
taxes of $251,772) 1,446,854 -
Total investment income 1,693,609 705,853
Expenses
Investment advisory fees 396,028 32,652
Administration fees 79,206 13,061
Custodian fees 81,896 11,425
Shareholder recordkeeping fees 15,780 2,026
Legal fees 3,730 3,730
Audit fees 12,432 7,956
Directors' fees and expenses 5,082 5,082
Insurance expense 7,934 3,143
Amortization of organization costs - 8,779
State registration filing fees 7,657 4,113
SEC filing fees 25,309 -
Other fees and expenses 6,966 3,560
Total operating expenses 642,020 95,527
Waiver of investment advisory and
administration fees (113,982) (43,284)
Operating expenses, net 528,038 52,243
Investment income, net 1,165,571 653,610
Realized and unrealized gain (loss)
on investments and foreign currency-
related transactions
- -----------------------------------
Net realized gain from investments 1,273,172 8,941
Net realized loss from foreign
currency-related transactions (74,595) -
Net unrealized appreciation on
investments 9,772,379 -
Net unrealized depreciation on
translation of assets and
liabilities denominated in
foreign currencies (1,049) -
Realized and unrealized gain on
investments and foreign currency-
related transactions 10,969,907 8,941
Net increase in net assets
resulting from operations $ 12,135,478 $ 662,551
See Notes to Financial Statements
AMT Capital Fund, Inc.
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Statements of Changes in Net Assets
For the Periods Ended
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HLM International
Equity Portfolio Money Market Portfolio
-----------------------------------------------------------
June 30, 1996 Dec. 31, 1995 June 30, 1996 Dec. 31, 1995
(unaudited) (unaudited)
Increase (Decrease)
in Net Assets
From Operations
Investment income,
net $ 1,165,571 $ 436,280 $ 653,610 $ 1,321,433
Net realized gain
(loss) from
investments and
foreign currency-
related
transactions 1,198,577 (324,304) 8,941 25,293
Net unrealized
appreciation on
investments and on
translation of assets
and liabilities
denominated in
foreign currencies 9,771,330 3,956,823 - -
Net increase in net
assets resulting
from operations 12,135,478 4,068,799 662,551 1,346,726
Distributions to
Shareholders From
Investment income,
net - 407,463 653,610 1,321,433
Capital Share
Transactions, Net 73,394,879 55,161,338 (631,722) 3,838,719
Total increase
(decrease) in net
assets 85,530,357 58,822,674 (622,781) 3,864,012
Net Assets
Beginning of
period 67,726,552 8,903,878 25,870,153 22,006,141
End of period $ 153,256,909 $ 67,726,552 $ 25,247,372 $ 25,870,153
Undistributed
Investment Income,
Net $ 1,170,265 $ 4,694 $ - $ -
See Notes to Financial Statements
AMT Capital Fund, Inc.
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Financial Highlights
For the Periods Ended
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HLM International
Equity Portfolio
--------------------------------------------
June 30, 1996 Dec.31, 1995 Dec.31,1994*
(unaudited)
Per Share Data
Net asset value, beginning
of period $ 10.77 $ 9.71 $ 10.00
Income From Investment
Operations
Investment income, net 0.09 0.10 0.04
Net realized and unrealized gain
(loss) on investments and
foreign currency-related
transactions 1.18 1.06 (0.29)
Net increase (decrease) from
investment operations 1.27 1.16 (0.25)
Less Distributions From
Investment income, net - 0.10 0.03
Temporary overdistribution of
net realized gain on investments
and foreign currency-related
transactions - - 0.01
Total distributions - 0.10 0.04
Net asset value, end of period $ 12.04 $ 10.77 $ 9.71
Total Return 11.79%(b) 11.99% (2.47%)(b)
Ratios/Supplemental Data
Net assets, end of period $153,256,909 $ 67,726,552 $ 8,903,878
Ratio of expenses to average
net assets 1.00%(a) 0.99% 0.95%(a)
Ratio of investment income,
net to average net assets 2.21%(a) 1.30% 1.13%(a)
Decrease in above ratios due to
waiver of investment advisory
and administration fees and
reimbursement of other
expenses 0.22%(a) 0.54% 1.33%(a)
Portfolio turnover 8%(b) 28% 27%(b)
Average Commission Rate Paid $ 0.04** N/A N/A
(a) Annualized
(b) Not Annualized
* Commencement of operations was May 11, 1994
** Represents total commissions paid on portfolio securities divided by the
total number of shares purchased or sold on which commissions were
charged. This disclosure is required by the SEC beginning in 1996.
See Notes to Financial Statements
AMT Capital Fund, Inc.
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Financial Highlights
For the Periods Ended
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Money Market Portfolio
----------------------------------------------------------
June 30, 1996
(unaudited) Dec. 31, 1995 Dec. 31, 1994 Dec. 31,1993*
Per Share Data
Net asset value,
beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income From
Investment
Operations
Investment income,
net 0.03 0.06 0.04 0.00(b)
Net realized and
unrealized gain
on investments 0.00(b) 0.00(b) 0.00(b) -
Net increase from
investment
operations 0.03 0.06 0.04 0.00
Less Distributions
from
Investment income,
net 0.03 0.06 0.04 0.00(b)
Temporary
overdistribution
of net realized
gain on investments - - 0.00(b) -
Total distributions 0.03 0.06 0.04 0.00
Net asset value, end
of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Return 2.52%(c) 5.74% 4.13% 2.69%(a)
Ratios/Supplemental
Data
Net assets, end of
period $25,247,372 $25,870,153 $22,006,141 $2,335,633
Ratio of expenses
to average net
assets 0.40%(a) 0.40% 0.40% 0.40%(a)
Ratio of net
investment income
to average net
assets 5.00%(a) 5.58% 4.16% 2.67%(a)
Decrease in above
ratio due to waiver
of investment
advisory and
administration fees
and reimbursement of
other expenses 0.33%(a) 0.37% 0.64% 25.54%(a)
(a) Annualized
(b) Rounds to less than $0.01
(c) Not annualized
* Commencement of Operations was November 1, 1993
See Notes To Financial Statements
AMT Capital Fund, Inc.
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Notes To Financial Statements
June 30, 1996 (unaudited)
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1. Organization
AMT Capital Fund, Inc. (the "Fund") was organized as a Maryland corporation on
August 3, 1993 and is registered under the Investment Company Act of 1940, as
amended, as an open-end management investment company. The Fund currently has
three Portfolios of which this report pertains to two. The Money Market
Portfolio commenced operations on November 1, HLM 1993. The costs incurred by
the Fund in connection with the organization and initial registration are
being amortized on a straight-line basis over a sixty-month period. The
unamortized balance of organizational expenses at December 31, 1993 was
$85,337June 30, 1996 was $41,246.
2. Summary of Significant Accounting Policies
Securities
All securities transactions are recorded on a trade date basis. Interest
income and expense are recorded on the accrual basis. Dividend income is
recorded on the ex-dividend date. The Fund amortizes discount or premium on a
daily basis to interest income. The Fund uses the specific identification
method for determining gain or loss on sales of securities.
Income Tax
There is no provision for Federal income or excise tax since the Money Market
Portfolio (the "Portfolio")and will continue to elect to be taxed as a
regulated investment company ("RIC"), and, therefore, has complied with the
requirements of Subchapter M of the Internal Revenue Code applicable to RICs
and will distribute all of its taxable income.
At December 31, 1995, the HLM International Equity Portfolio had a capital
loss carryforward of $250,657 to offset future net capital gains to the extent
provided by regulations. This capital loss carryforward expires on December
31, 2003. Net realized losses attributable to security transactions after
October 31, 1995, are treated for federal income taxes as arising on the first
day of the Portfolio's next fiscal year.
Valuation
HLM Portfolio are valued daily at their market price, which results in
unrealized gains or losses. Securities traded on an exchange are valued at
their last sales price on that exchange. no sales are reported obtained from
a quotation reporting system or from established market makersDeposits and
repurchase agreements are generally valued at their cost plus accrued
interest. Securities for which market quotations are not readily available
and illiquid securities will be valued in good faith by the Board of
Directors. All investments in the Portfolio are valued daily on an amortized
cost basis, which approximates fair value and is consistent with Rule 2a-7 of
the Investment Company Act of 1940.
Dividends to Shareholders
Effective January 1, 1996, it is the policy of the HLM International Equity
Portfolio to declare dividends from net investment income annually. It is the
policy of the Money Market Portfolio to declare dividends daily on all of its
net investment income. Net investment income dividends are payable monthly.
Net short-term and long-term capital gains distributions for both Portfolios,
if any, are normally distributed on an annual basis.
2. Summary of Significant Accounting Policies (continued)
Dividends from net investment income and distributions from realized gains
from investment transactions are determined in accordance with Federal income
tax regulations, which may differ from investment income and realized gains
determined under generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are
reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassification. Dividends
and distributions which exceed net investment income and net realized capital
gains for financial reporting purposes, but not for tax purposes are reported
as dividends in excess of net investment income or distributions in excess of
net realized capital gains. To the extent they exceed net investment income
and net realized capital gains for tax purposes, they are reported as
distributions of paid-in-capital.
During the year ended December 31, 1995, the HLM International Equity
Portfolio reclassified ($27,800) to undistributed investment income from
accumulated net realized loss. This reclassification had no effect on net
investment income, net realized gains and losses, and net assets.
Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked prices of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated at the
rates of exchange prevailing when such securities were acquired or sold.
Income and expenses are translated at exchange rates prevailing when accrued.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations
are included with the net realized and unrealized gain or loss from
investments.
Net realized gains and losses from foreign currency-related transactions arise
from sales and maturities of short-term securities, sales of foreign currency,
currency gains or losses realized between the trade and settlement dates on
securities transactions, and the difference between the amounts of dividends,
interest, and foreign withholding taxes recorded on the Fund's books, and the
U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized appreciation or depreciation on translation of assets and
liabilities denominated in foreign currencies arise from changes in the value
of assets and liabilities other than investments in securities at the period
end, resulting from changes in the exchange rate. At June 30, 1996, the HLM
International Equity Portfolio balance of net unrealized depreciation related
to the changes in the exchange rate in the value of other assets and
liabilities excluding foreign currency and forward foreign currency contracts
, and investments of $3,036.
Estimates
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates.
3. Investment Advisory Agreement and Affiliated Transactions
The Fund's Board of Directors has approved Harding, Loevner Management, L.P.
("HLM") and AMT Capital Advisers, Inc. as investment advisors for the HLM
International Equity Portfolio and the Money Market Portfolio, respectively.
In addition, the Directors have approved an administration agreement between
the Fund and AMT Capital Services, Inc. which assists in managing and
supervising all aspects of the Fund other than investment advisory activities.
The advisory fee and administration fees are computed daily at an annual rate
of .75% and .15%, respectively, of the average daily net assets of the HLM
International Equity Portfolio and .25% and .10%, respectively, of the Money
Market Portfolio. The Investment Adviser of the HLM International Equity
Portfolio has voluntarily agreed to reduce their fees and reimburse other
expenses, to the extent that aggregate expenses (exclusive of brokerage
commissions, interest on borrowings, taxes and extraordinary expenses) exceed
an annual rate of 1.00%. The Investment Adviser and Administrator of the
Money Market Portfolio have voluntarily agreed to reduce their fees and
reimburse other expenses to the extent that aggregate expenses (exclusive of
interest on borrowings, taxes and extraordinary expenses) exceed an annual
rate of .40% of the average daily assets.
Directors' fees and expenses of $10,164 were paid for the six months ended
June 30, 1996 to directors who are not employees of the Investment Advisers.
4. Investment Transactions
Purchase cost and proceeds from sales of investment securities, other than
short-term investments, for the six months ended June 30, 1996 totaled
$80,226,148 and $8,348,329, respectively, for the HLM International Equity
Portfolio.
The components of net unrealized appreciation on investments at June 30, 1996
for the HLM International Equity Portfolio were as follows:
Gross Unrealized Appreciation $ 15,100,010
Gross Unrealized Depreciation (1,427,940)
$ 13,672,070
The cost of securities owned by the Portfolios at June 30, 1996 for Federal
tax purposes was substantially the same as for financial statement purposes.
5. Forward Foreign Exchange Contracts
The HLM International Equity Portfolio, on occasion, enters into forward
foreign exchange contracts in order to hedge its exposure to changes in
foreign currency exchange rates on its foreign portfolio holdings. A forward
foreign exchange contract is a commitment to purchase or sell a foreign
currency at a future date at a negotiated forward rate. The gain or loss
arising from the difference between the cost of the original contracts and the
closing of such contracts is included in net realized gains or losses on
foreign currency-related transactions. Fluctuations in the value of forward
foreign exchange contracts are recorded for book purposes as unrealized
appreciation or depreciation on assets and liabilities denominated in foreign
currencies by the Portfolio. The Portfolio's custodian will place and
maintain cash not available for investment, U.S. Government securities, or
other appropriate high-grade debt securities in a separate account of the
Portfolio having a value equal to the aggregate amount of the Fund's
commitments under certain open forward foreign exchange contracts. Risks may
arise from the potential inability of a counterparty to meet the terms of a
contract and from unanticipated movements in the value of a foreign currency
relative to the U.S. dollar. There were no forward foreign exchange contracts
open at June 30, 1996.
The HLM International Equity Portfolio enters into foreign currency
transactions on the spot markets in order to pay for foreign investment
purchases or to convert to dollars the proceeds from foreign investment sales
or coupon interest receipts. There were no foreign exchange contracts to buy
or sell currency on the spot markets as of June 30, 1996.
6. Capital Share Transactions
Transactions in capital stock for the HLM International Equity Portfolio were
as follows for the periods indicated:
- --------------------------------------------------------------------------------
Six Months Ended Year Ended
June 30, 1996 December 31, 1995
Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Shares sold 6,713,485 $76,635,600 5,622,926 $57,519,473
Shares issued related to
reinvestment of dividends - - 33,936 355,396
6,713,485 76,635,600 5,656,862 57,874,869
Shares redeemed 278,891 3,240,721 284,696 2,713,531
Net increase 6,434,594 $73,394,879 5,372,166 $55,161,338
Transactions in capital stock for the Money Market Portfolio were as follows
for the periods indicated:
Six Months Ended Year Ended
June 30, 1996 December 31,1995
Shares Amount Shares Amount
Shares sold 982,604 $982,604 9,334,905 $9,334,905
Shares issued related to
reinvestment of dividends 601,727 601,727 1,311,602 1,311,602
1,588,331 1,588,331 10,646,507 10,646,507
Shares redeemed 2,216,053 2,216,053 6,807,788 6,807,788
Net increase (decrease) (631,722) $ (631,722) 3,838,719 $ 3,838,719
7. Repurchase and Reverse Repurchase Agreements
Each Portfolio may enter into repurchase agreements under which a bank or
securities firm that is a primary or reporting dealer in U.S. Government
securities agrees, upon entering into a contract, to sell U.S. Government
Securities to a Portfolio and repurchase such securities from the Portfolio at
a mutually agreed upon price and date.
Each Portfolio is also permitted to enter into reverse repurchase agreements
under which a primary or reporting dealer in U.S. Government securities
purchases U.S. Government securities from a Portfolio and the Portfolio agrees
to repurchase the securities at an agreed upon price and date.
Each Portfolio may engage in repurchase and reverse repurchase transactions
with parties selected on the basis of such party's creditworthiness.
Securities purchased subject to repurchase agreements must have an aggregate
market value greater than or equal to the repurchase price plus accrued
interest at all times. If the value of the underlying securities falls below
the value of the repurchase price plus accrued interest, the Portfolio will
require the seller to deposit additional collateral by the next business day.
If the request for additional collateral is not met, or the seller defaults on
its repurchase obligation, the Portfolio maintains the right to sell the
underlying securities at market value and may claim any resulting loss against
the seller. When a Portfolio engages in reverse repurchase transactions, the
Portfolio will maintain, in a segregated account with its custodian,
securities equal in value to those subject to the agreement.
[This page intentionally left blank]
OFFICERS & DIRECTORS AND OTHER PERTINENT INFORMATION
OFFICERS AND DIRECTORS ADMINISTRATOR AND
DISTRIBUTOR
Robert B. Allardice, III
Director of the Fund AMT Capital Services, Inc
600 Fifth Avenue,
Patricia A. Gammon New York, NY 10020
Director of the Fund
CUSTODIAN AND FUND
Alan M. Trager ACCOUNTING AGENT
President and Director
of the Fund Investor Bank & Trust Compamny
P.O. Box 1537
William E. Vastardis Boston, MA 02205-1537
Secretary and Treasurer
of the Fund TRANSFER AND DIVIDEND
DISBURSING AGENT
Carla E. Dearing
Vice President and Assistant Investor Bank & Trust Company
Treasurer of the Fund P.O. Box 1537
Boston, MA 02205-1537
LEGAL COUNSEL
INVESTMENT ADVISER
(HLM INTERNATIONAL EQUITY PORTFOLIO) Dechert Price & Rhoads
1500 K Street, N.W.
Harding, Loevner Management, L.P. Washington, DC 20005-1208
50 Division Street
Somerville, NJ 08876 INDEPENDENT AUDITORS
INVESTMENT ADVISER Ernst & Young LLP
(MONEY MARKET PORTFOLIO) 787 Seventh Avenue
New York, NY 10019
AMT Capital Advisers, Inc.
600 Fifth Avenue
New York, NY 10020
SUB-ADVISER
(MONEY MARKET PORTFOLIO)
Fischer Francis Trees & Watts, Inc.
200 Park Avenue
New York, NY 10166
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