AMT Capital Fund, Inc.
Annual Report
December 31, 1995
AMT Capital Services, Inc.
600 Fifth Avenue, New York, New York
Telephone (212) 332-5211 Long Distance (800) 762-4848
Facsimile (212) 332-5190
PRESIDENT'S LETTER
February 9, 1996
Dear Shareholder:
We are pleased to present the annual report for the AMT Capital Fund,
Inc. for the fiscal year ended December 31, 1995. The Fund's Portfolios
produced strong performance, finishing the year ahead of their benchmarks
and their competition. The HLM International Equity Portfolio grew
substantially, with assets now exceeding $76 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 vary considerably from index
returns in the short-run, returned 11.99% for the year, with positive
performance versus the market and against the Lipper International Fund
Index. Against its peer group, its 1995 return was in the top quartile of
funds ranked by Lipper Analytical Services.
The Money Market Portfolio outperformed its benchmark, the
IBC/Donoghue's Money Market Fund Average, in every month and for the year as
a whole. For 1995, the total return of 5.74% was 23 basis points (0.23%)
above the benchmark. More importantly, as the Portfolio began to be ranked
against other money market funds by Lipper, it consistently appeared among
the top performers, ending the year ranked 23 of 256 measured by Lipper.
Shortly, the two Portfolios in the Fund will be joined by a new
Portfolio which will be formed as the result of a merger of the Lehman
Selected Growth Stock Portfolio into the AMT Capital Fund. The Lehman
Selected Growth Stock Portfolio has $38 million invested in mid-cap U.S.
growth stocks. For the year ending December 31, 1995, the Lehman Selected
Growth Stock Portfolio ranked 9 of 106 mid-cap funds measured by Lipper.
The new Portfolio, U.S. Selected Growth, will be managed by Susan Hirsch who
has managed the Lehman Portfolio since its inception. Its addition will
bring the Fund's assets to approximately $140 million.
We greatly appreciate your interest and participation in the AMT
Capital Fund, Inc. and look forward to sending you more information on the
U.S. Selected Growth Portfolio. We welcome the opportunity to discuss the
investment approach, performance and merits of these or any funds
distributed by AMT Capital Services. Please do not hesitate to contact us
with questions or comments regarding this report or any other matter in
which we can be of assistance. Please also note our new address and phone
numbers.
Sincerely,
/s/ Alan M. Trager
Alan M. Trager
President
Table of Contents
HLM International Equity Portfolio Overview............................ 1
HLM International Equity Portfolio - Statement of Net Assets........... 3
Money Market Portfolio - Overview...................................... 7
Money Market Portfolio - Statement of Net Assets....................... 9
Statements of Operations.............................................. 11
Statements of Changes in Net Assets................................... 12
Financial Highlights.................................................. 13
Notes to Financial Statements......................................... 15
HLM INTERNATIONAL EQUITY PORTFOLIO
December 31, 1995
GRAPH: This graph is an x-y line plot. y-Value ($), x-Date 5/11/94 to 12/31/95
Comparison of change in value of $10,000 investment in HLM International
Equity Portfolio, the Msci World Ex U.S.A. Index (Net Dividends
reinvested) and the Lipper International Fund Index. The comparison is
for the period from 5/11/94 to 12/32/95. At 12/31/95, HLM International
Equity Portfolio was at a value of $10,923, while the MSCI World Ex
U.S.A. Index (net) was at $11,393, and the Lipper International Fund
Index was at $10,785.
The HLM International Equity Portfolio provided a total return of
11.99% in 1995 and 5.53% per annum since its inception on May 11,
1994. Its benchmark, the MSCI World - ex U.S.A. Index, returned
11.41% and 8.27% over the same periods, respectively. International
funds tracked by Lipper Analytical Services returned 9.28% and 4.71%,
respectively. 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
In the first quarter, returns in local markets were mainly flat
to negative, especially in Japan and Germany. While the companies in
which the Portfolio was invested continued to report strong earnings,
market valuations were considerably less robust. Some smaller markets
were hard hit by the Mexican crisis. A relatively high cash position
and limited exposure to Japan were positives but were not sufficient
to overcome low valuations. New purchases included Development Bank
of Singapore, Muenchener Rueckversicherung, Rentokil Group, Wolters
Kluwer, and Hong Kong and China Gas. Pan American Beverages and
Jardine Strategic Holdings were sold.
Developments in the Second Quarter
In the second quarter, markets recovered while more stable
currency rates provided a positive tone. New purchases included
Canon, PartnerRe, IHC Caland, Imperial Oil and Astra while positions
in Makita and Hong Kong and China Gas were sold.
Developments in the Third Quarter
During the summer, a falling yen and rising Japanese stock market
dominated international market returns, but had a limited impact on
the Portfolio. Generale des Eaux was sold. Three positions were
reduced because of price appreciation. New companies added were
Kyocera in Japan, Sime Darby in Malaysia and Primagaz, a French-based
distributor of liquified petroleum gas in Europe. Positions in
Financiere et Industrielle Gaz et Eaux and Ito Yokado were increased.
Developments in the Fourth Quarter
Once again, good relative and absolute returns were associated
with stability in currency markets during the final quarter of the
year. Three companies were sold: Krones and Hanson p.l.c., reflecting
disappointment with management, and British Sky Broadcasting following
a large price rise and potential regulatory review. Honda Motor was
added.
Outlook
Looking forward, the portfolio manager sees a very positive
business environment with steady world economic growth, falling
inflation, and increasing diffusion of the tangible benefits of
technology to boost productivity. Having pursued a defensive policy
in 1995, the manager expects to become more aggressive in stock
selection and to increase portfolio exposure to smaller companies
and emerging markets.
Investment Performance (For Periods Ended December 31, 1995)
Total Return
Since
Inception*
One Year (annualized)
HLM International Equity Portfolio 11.99% 5.53%
MSCI World Ex-USA Index (net) 11.41% 8.27%
Lipper International Fund Index 9.28% 4.71%
* The HLM International Equity Portfolio commenced operations on May 11, 1994
HLM INTERNATIONAL EQUITY PORTFOLIO-STATEMENT Of NET ASSETS
Shares Value
Long-Term Instruments - 93.6%
Equities - 90.5%
Argentina - 1.2%
Quilmes Industrial SA (Foods/Beverages) 53,300 $ 831,480
(Cost - $1,079,264)
Bermuda - 1.1%
PartnerRe Holdings Ltd. (Insurance) 26,900 739,750
(Cost - $672,842)
Canada - 1.8%
Imperial Oil Ltd. (Oil/Gas) 34,000 1,228,250
(Cost - $1,273,435)
France - 7.0%
Coflexip SA- ADR (Oil/Gas) 31,900 602,113
Financiere et Industrielle Gaz et
Eaux (Diversified Holdings) 3,500 1,217,267
I.D.I.A. (Diversified Holdings) 27,830 1,137,568
Primagaz Cie (Oil/Gas) 22,350 1,778,672
Primagaz Cie Warrants
Expiring 6/30/98 (Oil/Gas)* 1,490 12,803
Total (Cost - $4,423,676) 4,748,423
Germany - 6.9%
Deutsche Bank AG (Financial) 26,550 1,261,079
Hochtief AG (Engineering) 2,560 1,094,843
Linde AG (Diversified Holdings) 2,626 1,535,962
Muenchener Rueckversicherung AG (Insurance) 349 760,922
Total (Cost - $4,877,918) 4,652,806
Hong Kong - 5.5%
Hutchison Whampoa Ltd. (Diversified Holdings) 485,000 2,954,410
Johnson Electric Holdings Ltd.
(Electrical Equipment) 445,000 794,232
Total (Cost - $3,297,134) 3,748,642
Indonesia - 1.0%
PT Wicaksana Overseas International
(Distribution/Wholesale) 261,000 697,067
(Cost - $690,878)
Japan - 17.0%
Canon, Inc. (Office Equipment) 92,000 1,667,054
Canon Sales Co., Inc. (Distribution/Wholesale) 52,500 1,398,983
Honda Motor Co, Ltd. (Automotive) 71,000 1,465,407
Ito-Yokado Co., Ltd. (Retail) 37,000 2,280,233
Kyocera Corp. (Electronics) 13,000 966,182
Mitsubishi Heavy Industries Ltd. (Aerospace) 254,000 2,025,601
Nippon Denso Co., Ltd. (Electrical Equipment) 93,000 1,739,244
Total (Cost - $10,994,188) 11,542,704
Malaysia - 5.3%
Nestle Berhad (Foods/Beverages) 125,000 915,643
Nylex Berhad (Chemicals) 449,000 1,361,570
Sime Darby Berhad (Diversified Holdings) 500,000 1,329,158
Total (Cost - $3,443,254) 3,606,371
Netherlands - 10.3%
IHC Caland NV (Transportation) 42,000 1,417,057
Randstad Holdings NV (Commercial Services) 28,000 1,273,602
Royal Dutch Petroleum Co. - ADR (Oil/Gas) 20,300 2,864,838
Wolters Kluwer NV (Publishing) 15,060 1,428,371
Total (Cost - $5,963,010) 6,983,868
Norway - 3.2%
Norsk Hydro AS - ADR (Oil/Gas) 31,733 1,328,819
Unitor Ships Service - ADR (Commercial Services) 59,300 816,591
Total (Cost - $2,275,901) 2,145,410
Singapore - 5.8%
Development Bank of Singapore,
Ltd. - Foreign Registered Shares (Financial) 121,000 1,506,082
Keppel Corp. Ltd. (Transportation) 268,000 2,388,119
Total (Cost - $3,596,270) 3,894,201
South Africa - 2.2%
LibLife Strategic Investments, Ltd.
(Diversified Holdings) 373,000 1,458,430
(Cost - $1,261,530)
Spain - 3.1%
Banco Intercontinental Espanol (Financial) 21,200 2,063,175
(Cost - $1,884,845)
Sweden - 2.6%
Astra AB - Bearer Shares (Chemicals) 45,000 1,786,469
(Cost - $1,414,061)
Switzerland -12.3%
BBC Brown Boveri AG - Registered
Shares (Financial) 11,200 2,541,250
Nestle SA - ADR (Foods/Beverages) 41,200 2,284,408
SGS Societe Generale de Surveillance Holding
SA - Bearer Shares (Commercial Services) 670 1,333,826
SGS Societe Generale de Surveillance Holding
SA - Registered Shares (Commercial Services) 3,700 1,270,538
Sika Finanz AG - Bearer Shares (Building Materials) 3,770 917,674
Total (Cost - $7,758,351) 8,347,696
United Kingdom - 4.2%
Blenheim Group p.l.c. (Commercial Services) 325,000 1,270,924
Rentokil Group p.l.c. (Commercial Services) 306,400 1,592,830
Total (Cost - $2,666,617) 2,863,754
Total Equities - (Cost - $57,573,174) 61,338,496
Bonds - 3.1%
Face Amount
Bangkok Bank Public Co. Convertible
Bond (Thailand), 3.250% due 3/3/04
(Financial) $ 1,975,000 2,098,438
(Cost - $1,964,069)
Total Long-Term Investments -
(Cost - $59,537,243) 63,436,934
Short-Term Investments - 7.3%
Prudential Bache Securities Repurchase
Agreement, 5.390% due 1/2/96; Issued
12/29/95 (Collateralized by $4,121,154
par of Federal National Mortgage
Association Strip due 2/1/23, value
$1,031,106 and $3,984,936 par of
Federal Home Loan Mortgage Corp. ARM,
6.080% due 9/1/25, value $3,988,936)
Short-Term Investments - (Cost - $4,921,506) 4,921,506 4,921,506
Total Investments - 100.9% (Cost - $64,458,749) 68,358,440
Other Assets net of Liabilities - (0.9%)
Foreign currency holdings (Cost - $384,708) $ 383,888
Receivable from AMT Capital Advisers, Inc. 25,968
Other assets 222,408
Payable for securities purchased (1,101,848)
Distributions payable from investment income, net (15,711)
Payable for capital shares redeemed (6,877)
Payable to Harding, Loevner Management, L.P. (62,725)
Other liabilities (76,991)
Other assets and liabilities, net (631,888)
Net Assets - 100.0%
Applicable to 6,289,241 outstanding $.001
par value shares
(authorized 250,000,000 shares) $ 67,726,552
Net Asset Value Per Share $ 10.77
Components of Net Assets as of
December 31, 1995 were as follows:
Capital stock at par value ($.001) $ 6,289
Capital stock in excess of par value 64,172,405
Undistributed investment income, net 4,694
Accumulated net realized loss on investments and
foreign currency-related transactions (349,535)
Net unrealized appreciation on investments and
assets and liabilities denominated in foreign currencies 3,892,699
$ 67,726,552
* Non Income Producing Securities
See Notes to Financial Statements
MONEY MARKET PORTFOLIO
December 31, 1995
GRAPH: This Graph is an x-y line plot. y-Value ($), x-Date 5/11/94 to 12/13/95
Comparison of change in value of $10,000 investment in Money Market
Portfolio and the IBC/Donoghue's Money Market Fund Average. The
comparison is for the period from 11/1/93 to 12/31/95. At 12/31/95, a
$10,000 investment in Money Markey Portfolio was valued at $11,058
while the IBC/Donoghue's Money Market Fund Average was at $10,994.
The Money Market Portfolio provided a total return of 5.74% outperforming its
benchmark, the IBC/Donoghue's Money Market Fund Average, in every month and for
the year as a whole, by 23 basis points. 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
$25.9 million os of December 31, 1995.
Developments in the First Quarter
The Portfolio outperformed its benchmark due to favorable yield curve and
duration exposures. Interest rates declined despite a well-anticipated
tightening by the Fed. The short-term yield curve flattened. The significant
decline in the dollar against the mark and yen had a more limited effect than
might have been expected, as domestic economic data turned decidedly weaker as
the quarter progressed.
Developments in the Second Quarter
Rates continued to decline abruptly through the second quarter. Interest rate
volatility soared and the yield curve continued to flatten. The Portfolio was
well positioned to benefit from these changes, although non-Treasury holdings
detracted a bit from performance as spreads widened.
Developments in the Third Quarter
Rates were little changed over the quarter as the economy appeared to be
recovering from its low point in the second quarter. The yield curve flattened
slightly. The Portfolio's duration was lengthened to almost three months in
early July and slowly declined through the rest of the period. As the outlook
for rates became increasingly uncertain, the portfolio manager's strategy was to
remain short and tactically oriented, with an emphasis on higher yielding
corporate securities.
Developments in the Fourth Quarter
Uncertainty persisted through a large part of the quarter, but a growing
conviction of the likelihood of rate declines led the portfolio manager to
lengthen gradually, bringing the duration up to almost three months by year-end.
This benefitted performance as short-term rates dropped sharply in mid-December.
As in the third quarter, holdings of non-Government securities enhanced returns
as investor demand kept spreads narrow.
Outlook
The Portfolio is positioned to take advantage of a continuing decline in
rates. While not as agressively long as prior to the Fed's easing in January,
the Portfolio is positioned for a trend still anticipated to be toward lower
rates. Non-Treasuries are still overweighted as yield spreads are not expected
to narrow.
MONEY MARKET PORTFOLIO-STATEMENT OF NET ASSETS
December 31, 1995
Face Amount Value
Bank Obligations - 40.4%
Abbey National p.l.c. Eurodollar
CD, 5.750% due 1/2/96 $ 1,000,000 $ 999,994
Bank of America (London) Eurodollar
CD, 5.780% due 1/24/96 1,000,000 1,000,000
Bank of Boston (Nassau) Time
Deposit, 4.500% due 1/2/96 500,000 500,000
Bank of New York Bankers
Acceptance, 5.470% due 4/4/96* 1,000,000 985,717
Bayerische Hypotheken Yankee
CD, 6.430% due 4/19/96 1,000,000 1,001,483
Mellon Bank Bankers
Acceptance 5.560% due 4/1/96* 1,000,000 985,945
NationsBank Eurodollar
CD, 6.000% due 1/2/96 1,000,000 1,000,000
Seattle First National Bank
Note, 5.800% due 1/3/96 1,000,000 1,000,000
Societe Generale Yankee
CD, 5.750% due 3/8/96 1,000,000 1,000,000
Trust Company Bank of Atlanta
Bankers Acceptance, 5.480% due 5/8/96* 1,000,000 980,515
West Deutsche Bank Time
Deposit, 5.750% due 1/2/96 1,000,000 1,000,000
Total (Cost - $10,453,654) 10,453,654
Commercial Paper - 34.5%*
Bank of Scotland, 5.620%
due 4/26/96 1,000,000 981,891
Falcon Asset Securities Corp., 5.650%
due 2/7/96 1,000,000 994,193
Ford Motor Credit Corp., 5.480%
due 3/29/96 1,000,000 986,604
Koch Industries, 5.940% due 1/2/96 1,000,000 999,835
Harvard University, 6.050% due 1/2/96 1,000,000 999,832
Sandoz Corp., 5.480% due 3/27/96 1,000,000 986,909
Student Loan Corporation, 5.720% due 1/8/96 1,000,000 998,888
Sweden (Kingdom of), 5.600% due 4/4/96 1,000,000 985,378
Swedish Export Credit, 5.480% due 3/26/96 1,000,000 987,061
Total (Cost - $8,920,591) 8,920,591
U.S. Treasury Obligations - 24.5%*
U.S. Treasury Bill, 5.435% due 6/6/96 4,000,000 3,908,667
U.S. Treasury Bill, 5.338% due 6/20/96 2,500,000 2,439,707
Total (Cost - $6,348,374) 6,348,374
Total Investments - 99.4% (Cost - $25,722,619) 25,722,619
Other Assets net of Liabilities - 0.6%
Receivable from investment adviser 10,003
Other assets 178,655
Distributions payable from investment income, net (9,072)
Other liabilities (32,052)
Other assets and liabilities, net 147,534
Net Assets - 100.0%
Applicable to 25,855,311 outstanding $.001par shares
(authorized 1,000,000,000 shares) $ 25,870,153
Net Asset Value Per Share $ 1.00
Components of Net Assets as of December 31, 1995
were as follows:
Capital stock at par value ($.001) $ 25,855
Capital stock in excess of par value 25,829,456
Accumulated net realized gain on investments 25,870,153
*Interest rate shown represents yield to maturity at time of purchase
See Notes to Financial Statements
STATEMENTS OF OPERATIONS
For the Year Ended December 31, 1995
HLM International Money Market
Equity Portfolio Portfolio
Investment Income Interest $ 221,276 $ 1,416,176
Dividends (net of withholding
taxes of $79,487) 548,685 -
Total investment income 769,961 1,416,176
Expenses
Investment advisory fees 252,279 55,805
Administration fees 47,765 23,683
Custodian fees 80,360 27,028
Shareholder recordkeeping fees 21,429 4,304
Legal fees 23,182 4,378
Audit fees 28,290 21,710
Directors' fees and expenses 5,250 5,250
Insurance expense 11,822 10,818
Amortization of organization costs - 17,656
Registration fees 29,061 6,914
Other fees and expenses 16,366 4,920
Total operating expenses 515,804 182,466
Waiver of investment advisory and administration
fees and reimbursement of other expenses (182,123) (87,723)
Total expenses, net 333,681 94,743
Investment income, net 436,280 1,321,433
Realized and unrealized gain (loss) on
investments and foreign currency-
related transactions
Net realized gain (loss) from investments 304,119) 25,293
Net realized loss from foreign currency-
related transactions (20,185) -
Net unrealized appreciation on investments 3,965,125 -
Net unrealized depreciation on translation
of assets and liabilities denominated in
foreign currencies (8,302) -
Net realized and unrealized gain on
investments and foreign currency-
related transactions 3,632,519 25,293
Net increase in net assets
resulting from operations $ 4,068,799 $ 1,346,726
STATEMENTS OF CHANGES IN NET ASSETS
For the Periods Ended
HLM International Money Market
Equity Portfolio Portfolio
Dec. 31,1995 Dec.31,1994* Dec.31,1995 Dec.31,1994
Increase (Decrease) in Net
Assets From Operations
Investment income, net $ 436,280 $ 30,787 $ 1,321,433 $ 839,278
Net realized gain (loss)
from investments and
foreign currency-related
transactions (324,304) (43,014) 25,293 (3,723)
Net unrealized appreciation
(depreciation) on investments
and on translation of assets
and liabilities denominated
in foreign currencies 3,956,823 (64,124) - -
Net increase (decrease) in
net assets resulting from
operations 4,068,799 (76,351) 1,346,726 835,555
Distributions to
Shareholders From
Investment income, net 407,463 27,110 1,321,433 839,278
Temporary overdistribution
of net realized gain on
investments and foreign
currency-related
transactions - 10,017 - 6,728
Total distributions 407,463 37,127 1,321,433 846,006
Capital Share
Transactions, Net 55,161,338 9,017,356 3,838,719 19,680,959
Total increase in
net assets 58,822,674 8,903,878 3,864,012 19,670,508
Net Assets
Beginning of period 8,903,878 - 22,006,141 2,335,633
End of period $ 67,726,552 $ 8,903,878 $ 25,870,153 $ 22,006,141
Undistributed Investment
Income, Net $ 4,694 $ 3,677 $ - $ -
* Commencement of Operation was May 11, 1994
See Notes to Financial Statements
FINANCIAL HIGHLIGHTS
For the Periods Ended
HLM International Equity Portfolio
Dec. 31, 1995 Dec. 31,1994*
Per Share Data
Net asset value, beginning of period $ 9.71 $ 10.00
Increases (Decreases) From
Investment Operations
Investment income, net 0.10 0.04
Net realized and unrealized gain
(loss) on investments and foreign
currency- related transactions 1.06 (0.29)
Net increase (decrease) from
investment operations 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 $ 10.77 $ 9.71
Total Return 11.99% (2.47%) (b)
Ratios/Supplemental Data
Net assets, end of period $ 67,726,552 $ 8,903,878
Ratio of expenses to average net assets 0.99% 0.95% (a)
Ratio of investment income, net to
average net assets 1.30% 1.13% (a)
Decrease reflected in above ratios
due to waiver of investment advisory
and administration fees and
reimbursement of other expenses 0.54% 1.33% (a)
Portfolio turnover 27.71% 27.49%
(a) Annualized
(b) Not Annualized
* Commencement of Operations was May 11, 1994
See Notes to Financial Statements
Money Market Portfolio
Dec. 31, 1995 Dec. 31, 1994 Dec. 31, 1993*
Per Share Data
Net asset value, beginning
of period $ 1.00 $ 1.00 $ 1.00
Increases From Investment
Operations
Investment income, net 0.06 0.04 0.00**
Net realized and unrealized
gain on investments 0.00** 0.00 (b) -
Net increase from investment
operations 0.06 0.04 0.00
Less Distributions From
Investment income, net 0.06 0.04 0.00
Temporary overdistribution
of net realized gain on
investments - 0.00** -
Total distributions 0.06 0.04 0.00
Net asset value, end
of period $ 1.00 $ 1.00 $ 1.00
Total Return 5.74% 4.13% 2.69% (a)
Ratios/Supplemental Data
Net assets, end of period $ 25,870,153 $22,006,141 $2,335,633
Ratio of expenses to
average net assets 0.40% 0.40% 0.40% (a)
Ratio of investment income,
net to average net assets 5.58% 4.16% 2.67% (a)
(a) Annualized
(b) Includes the effect of net realized gains prior to significant increases in
shares outstanding.
* Commencement of Operations was November 1, 1993
** Rounds to less than $0.01
See Notes to Financial Statements
NOTES TO FINANCIAL STATEMANTS
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 Money Market
Portfolio commenced operations on November 1, 1993 and the HLM 1993
International Equity Portfolio commenced operations on May 11, 1994. The
Fund currently has twowo Portfolios. The costs incurred by the Fund in
connection with the organization and initial registration are being amortized
in the Money Market Portfolio on a straight-line basis over a sixty-month
period. The unamortized balance of organizational expenses at December 31, 1993
was $85,337 December 31, 1995 was $50,025.
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")each Portfolio has elected and will continue to
elect to be taxed as a regulated investment company ("RIC") and therefore has
compliedcomplies 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
All investments in the HLM International Equity 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.
Securities for which no sales are reported are valued at the latest bid price
obtained from a quotation reporting system or from established market makers.
Deposits 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 Money Market 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.
Expenses
Expenses directly attributed to each Portfolio in the Fund are charged to that
Portfolio's operations; expenses which are applicable to all Portfolios are
allocated among them based on average daily net assets.
Dividends to Shareholders
During 1995, it was the policy of the HLM International Equity Portfolio to
declare dividends from substantially all of its net investment income on a
quarterly basis. 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 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 December 31, 1995, the 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 other than investments was ($6,084).
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 and the Administrator of the HLM
International Equity Portfolio have voluntarily agreed to reduce their fees and
reimburse other expenses, from inception, through June 12, 1995 to the extent
that aggregate expenses (exclusive of brokerage commissions, interest on
borrowings, taxes and extraordinary expenses) exceed an annual rate of .95%;
thereafter, the Investment Adviser has voluntarily agreed to reduce its fees
and reimburse other expenses to the extent that aggregate expenses exceed
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 exceed an annual rate of .40% of the average
daily net assets.
3. Investment Advisory Agreement and Affiliated Transactions (continued)
Directors' fees and expenses of $10,500 were paid for the year ended December
31, 1995 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 year ended December 31, 1995 totaled
$61,374,000 and $8,705,093, respectively, for the HLM International
Equity Portfolio.
The components of net unrealized appreciation on investments at December
31, 1995 for the HLM International Equity Portfolio were as follows:
Gross Unrealized Appreciation $ 5,569,554
Gross Unrealized Depreciation (1,669,863)
$ 3,899,691
The cost of securities owned by the Portfolios at December 31, 1995 for
Federal tax purposes were 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 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.
At December 31, 1995, the HLM International Equity Portfolio had the
following outstanding forward foreign exchange contracts:
Unrealized
Contract Appreciation
Amount Cost Value (Depreciation)
Forward Foreign Exchange Buy Contracts
20,422 Great British Pounds closing 1/3/96 $ 31,634 $ 31,687 $ 53
210,283 Malaysian Ringgit closing 1/2/96 82,935 82,810 (125)
69,353 Malaysian Ringgit closimg 1/5/96 27,326 27,310 (16)
$ (88)
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 December 31, 1995.
6. Capital Share Transactions
Transactions in capital stock for the HLM International Equity Portfolio
were as follows for the periods indicated:
Year Ended Period from May 11, 1994*
December 31, 1995 to December 31, 1994
Shares Amount Shares Amount
Shares sold 5,622,926 $ 57,519,473 924,387 $ 9,088,508
Shares issued related
to reinvestment of
dividends 33,936 355,396 2,971 28,848
5,656,862 57,874,869 927,358 9,117,356
Shares redeemed 284,696 2,713,531 10,283 100,000
Net Increase 5,372,166 $ 55,161,338 917,075 $ 9,017,356
* Commencement of Operations
Transactions in capital stock for the Money Market Portfolio were as
follows for the periods indicated:
Year Ended Year Ended
December 31,1995 December 31,1994
Shares Amount Shares Amount
Shares sold 9,334,905 $ 9,334,905 20,414,473 $ 20,414,473
Shares issued related
to reinvestment of
dividends 1,311,602 1,311,602 796,922 796,922
10,646,507 10,646,507 21,211,395 21,211,395
Shares redeemed 6,807,788 6,807,788 1,530,436 1,530,436
Net increase 3,838,719 $ 3,838,719 19,680,959 $ 19,680,959
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.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Shareholders and Board of Directors
AMT Capital Fund, Inc.
We have audited the accompanying statements of net assets of AMT
Capital Fund, Inc. (comprising, respectively, the HLM
International Equity Portfolio and Money Market Portfolio) as of
December 31, 1995, and the related statements of operations for
the year then ended, the statements of changes in net assets for
each of the two years in the period then ended and the financial
highlights for each of the periods indicated therein. 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 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
referred to above present fairly, in all material respects, the
financial position of each of the respective Portfolios
constituting AMT Capital Fund, Inc. at December 31, 1995, the
results of their operations for the year then ended, the changes
in their net assets for each of the two years in the period then
ended and the financial highlights for each of the indicated
periods, in conformity with generally accepted accounting
principles.
New York, New York
February 9, 1995
/s/ Ernst & Young LLP
Ernst & Young LLP
SPECIAL MEETING OF SHAREHOLDERS
December 31, 1995
In accordance with Rule 30d-1 under the Investment Company
Act of 1940, the Fund is required to furnish certain
information regarding any matters submitted to a vote of the
Fund's shareholders. Shareholders of record on February 22,
1995 were notified that a Special Meeting of Shareholders
(the "Meeting") would be held at the offices of the Fund
on May 17, 1995. Shareholders of the HLM International
Equity Portfolio voted on approval of the investment
advisory agreement with Harding, Loevner Management, L.P.
("HLM") and a monthly advisory fee calculated at an
annualized rate of 0.75% of the average daily net assets of
the Portfolio. These matters were approved by the
shareholders at the Meeting. A summary of the shareholder
votes cast is set forth below:
Vote Number of Votes Percent of Total
Shares Outstanding
For 763,118 64.28%
Against - -
Abstained - -
OFFICERS & DIRECTORS AND OTHER PERTINENT INFORMATION
OFFICERS AND DIRECTORS ADMINISTRATOR AND DISTRIBUTOR
Robert B. Allardice AMT Capital Services, Inc.
Director of the Fund 600 Fifth Avenue
New York, NY 10020
Patricia A. Gammon
Director of the Fund
Alan M. Trager
President and Director CUSTODIAN AND FUND
of the Fund ACCOUNTING AGENT
William E. Vastardis Investors Bank & Trust Company
Secretary & Treasurer P.O. Box 1537
of the Fund Boston, MA 02205-1537
Carla E. Dearing
Vice President and Assistant TRANSFER AND DIVIDEND
Treasurer of the Fund DISBURSING AGENT
Investment Adviser Investors Bank & Trust Company
(HLM INTERNATIONAL EQUITY PORTFOLIO) P.O. Box 1537
Boston, MA 02205-1537
Harding, Loevner Management, L.P.
50 Division Street
Somerville, NJ 08876 LEGAL COUNSEL
INVESTMENT ADVISER Dechert Price & Rhoads
(MONEY MARKET PORTFOLIO) 1500 K Street, N.W.
Washington, DC 20005-1208
AMT Capital Advisers, Inc.
600 Fifth Avenue
New York, NY 10020
INDEPENDENT AUDITORS
SUB-ADVISER
(MONEY MARKET PORTFOLIO) Ernst & Young LLP
787 Seventh Avenue
New York, NY 10019
Fischer Francis Trees & Watts, Inc.
200 Park Avenue
New York, NY 10166
