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DELAFIELD
FUND, INC.
Semi-Annual Report
June 30, 1996
(Unaudited)
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<PAGE>
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DELAFIELD 600 FIFTH AVENUE, NEW YORK, N.Y. 10020
FUND, INC. (212) 830-5200
===============================================================================
Dear Shareholder:
We are pleased to present the semi-annual report of Delafield Fund, Inc. for the
period ended June 30, 1996.
The Delafield Fund's net asset value per share on June 30, 1996 was $13.88 as
compared to $12.26 at December 31, 1995. The Fund had net assets of $53,781,881
and 321 active shareholders. After adjusting for dividend payments of $0.07 per
share, the Fund registered an increase of 13.8% during the first-half year. The
Fund held 49 companies, with the top ten holdings accounting for 31% of total
net assets overall. Equity investments comprised 74% of the $53.8 million
portfolio on June 30, 1996.
We thank you for your support and look forward to serving your needs.
Sincerely,
/s/ J. Dennis Delafield /s/ Vincent Sellechia
J. Dennis Delafield Vincent Sellecchia
Chairman President
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<PAGE>
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DELAFIELD FUND, INC.
STATEMENT OF NET ASSETS
JUNE 30, 1996
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ ------
Common Stocks (73.90%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C>
Banking (2.86%)
Mellon Bank Corporation 27,000 $ 1,539,000
---------
Chemical (0.66%)
Freeport-McMoRan, Inc. 10,000 355,000
---------
Consumer Products & Services (5.10%)
Bush Industries Inc. 20,000 680,000
O'Sullivan Industries Holdings* 115,600 852,550
Polaroid Corporation 26,500 1,209,063
---------
2,741,613
---------
Energy (6.11%)
ENSERCH Corporation 46,500 1,011,375
Getty Petroleum 8,000 120,000
Louisiana Land & Exploration Company 20,000 1,152,500
McDermott International, Inc. 20,000 417,500
Union Texas Petroleum Holdings 30,000 585,000
---------
3,286,375
---------
Food and Beverage (2.94%)
Rykoff-Sexton Inc. 110,000 1,581,250
---------
Industrial Products (14.25%)
AMETEK, Inc. 62,000 1,348,500
Atchison Casting Corporation* 12,900 203,175
Corning Inc. 15,000 575,625
Elsag Bailey Process Automation, N.V.* 15,000 401,250
Federal-Mogul Corporation 110,000 2,021,250
Greif Brothers Corporation Class A 11,500 368,000
Harsco Corporation 10,500 706,125
Navistar International Corporation* 50,000 493,750
Stimsonite Corporation* 63,000 511,875
Varian Associates Inc. 20,000 1,035,000
---------
7,664,550
---------
Insurance (Life) (5.66%)
Life Partners Group, Inc. 85,000 1,933,750
Provident Companies Inc. 30,000 1,110,000
---------
3,043,750
---------
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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<TABLE>
<CAPTION>
Value
Shares (Note 1)
Common Stocks (Continued)
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<C> <C> <C>
Insurance (Property/Casualty) (5.24%)
Allmerica Financial Corporation* 20,000 $ 595,000
Citizens Corporation 25,000 468,750
Highlands Insurance Group* 20,000 375,000
Home State Holdings Inc.* 90,000 765,000
Orion Capital Corporation 12,000 612,000
----------
2,815,750
----------
Insurance (Reinsurance) (4.67%)
Risk Capital Holding Inc.* 40,000 777,500
Zurich Reinsurance Centre Holdings, Inc. 55,000 1,732,500
----------
2,510,000
----------
Metals/Mining (2.86%)
Allegheny Ludlum Corporation 55,000 1,038,125
Armco Inc.* 100,000 500,000
----------
1,538,125
----------
Office Equipment (6.00%)
BancTec, Inc.* 150,000 3,037,500
Wang Laboratories, Inc.* 10,000 190,000
----------
3,227,500
----------
Real Estate (4.03%)
Atlantic Realty Trust* 21,875 183,203
Catellus Development Corporation* 35,000 319,375
Kimco Realty Corporation 35,000 988,750
Ramco-Gershenson Properties Trust 43,750 678,125
----------
2,169,453
----------
Retail (3.17%)
Dress Barn, Inc.* 55,000 584,375
The Limited, Inc. 52,214 1,122,601
----------
1,706,976
----------
Textile/Apparel (5.89%)
Delta Woodside Industries Inc. 171,300 877,913
Farah Inc.* 126,000 929,250
Fruit of the Loom, Inc.* 45,500 1,160,250
Haggar Corporation 15,000 199,687
----------
3,167,100
----------
Miscellaneous (4.46%)
Florida East Coast Industries 13,000 1,079,000
Gilbert Associates, Inc. 74,700 971,100
White River Corporation* 7,400 346,875
----------
2,396,975
----------
Total Common Stocks (Cost $34,391,990) $39,743,417
----------
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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DELAFIELD FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
JUNE 30, 1996
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Face Value
Amount (Note 1)
------ ------
Corporate Bonds (1.78%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C>
Industrial Products (0.39%)
AMETEK, Inc. 9.750%
debentures, due 03/15/2004 200,000 $ 208,750
------------
Insurance (Life) (0.23%)
PennCorp Financial Group 9.250%, due 12/15/2003 125,000 125,625
------------
Miscellaneous (1.16%)
American Annuity Group Senior Notes, 9.500%, due 08/15/2001 600,000 627,000
------------
Total Corporate Bond (Cost $925,188) $ 961,375
------------
<CAPTION>
U.S. Government Obligations (14.82%)
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<C> <C> <C>
U.S. Treasury Note, 5.500%, due 07/31/97 $8,000,000 7,970,000
------------
Total U.S. Government Obligations (Cost $7,998,412) $ 7,970,000
------------
<CAPTION>
Short-Term Investments (9.19%)
Repurchase Agreements (9.19%)
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<C> <C> <C>
J.P. Morgan Securities Inc., 5.42%, due 07/01/96
(Collateralized by $4,815,000
U.S. Treasury Note, 7.500%, due 11/15/01) $4,942,000 4,942,000
------------
Total Short-Term Investments (Cost $4,942,000) $ 4,942,000
------------
Total Investments (99.69%) (Cost $48,257,590+) 53,616,792
Cash and Other Assets, net of liabilities (0.31%) 165,089
------------
Net Assets (100.00%), 3,875,692 shares outstanding (Note 3) $ 53,781,881
============
Net asset value, offering and redemption price per share $ 13.88
============
* Non-income producing.
+ Aggregate cost for federal income tax purposes is $48,262,398. Aggregate
unrealized appreciation and depreciation, based on cost for Federal income
tax purposes, are $5,712,034 and $357,640, respectively.
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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DELAFIELD FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<C> <C>
Income:
Interest....................................................................... $ 360,510
Dividends...................................................................... 243,770
-------------
Total income............................................................. 604,280
-------------
Expenses: (Note 2)
Investment management fee...................................................... 194,746
Administration fee............................................................. 51,121
Shareholder servicing fee...................................................... 60,858
Custodian expenses............................................................. 6,629
Shareholder servicing and related shareholder expenses......................... 25,530
Legal, compliance and filing fees.............................................. 9,782
Audit and accounting........................................................... 23,319
Directors' fees and expenses................................................... 3,114
Amortization of organization costs............................................. 4,335
Other.......................................................................... 866
-------------
Total expenses.............................................................. 380,300
Less:
Fees waived................................................................. ( 59,141)
Expenses paid indirectly.................................................... ( 1,104)
-------------
Net expenses................................................................ 320,055
-------------
Net investment income....................................................... 284,225
-------------
<CAPTION>
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
<C> <C>
Net realized gain (loss) on investments............................................ 3,589,357
Net change in unrealized appreciation (depreciation) of investments................ 2,448,881
-------------
Net gain (loss) on investments...................................... 6,038,238
-------------
Increase (decrease) in net assets from operations.................................. $ 6,322,463
=============
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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DELAFIELD FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
(UNAUDITED)
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<TABLE>
<CAPTION>
Six Months Period from
Ended October 1, 1995 to
June 30, 1996 December 31, 1995
------------- -----------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
<C> <C> <C>
Net investment income.....................................................$ 284,225 $ 170,368
Net realized gain on investments.......................................... 3,589,357 630,148
Net change in unrealized appreciation (depreciation) ..................... 2,448,881 1,216,404
-------------- --------------
Increase (decrease) in net assets from operations....................... 6,322,463 2,016,920
Distributions from:
Net investment income.....................................................( 269,923) ( 179,845)
Net realized gain on investments.......................................... -- ( 643,645)
In excess of net realized gain............................................ -- ( 51,900)
Return of capital......................................................... -- ( 8,609)
Capital share transactions (Note 3)........................................ 1,999,307 2,280,846
-------------- --------------
Total increase (decrease)................................................ 8,051,847 3,413,767
Net Assets:
Beginning of period....................................................... 45,730,034 42,316,267
-------------- --------------
End of period (including undistributed net investment income
of $14,302 & $0, respectively..........................................$ 53,781,881 $ 45,730,034
============== ==============
</TABLE>
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See Notes to Fianacial Statements.
<PAGE>
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DELAFIELD FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
===============================================================================
1. Summary of Accounting Policies
Delafield Fund, Inc. is a no-load, diversified, open-end management investment
company registered under the Investment Company Act of 1940. The investment
objectives of the Fund are to seek long-term preservation of capital and growth
of capital by investing primarily in equity securities of domestic companies.
Effective October 1, 1995 the Fund changed its fiscal year end to December 31.
Its financial statements are prepared in accordance with generally accepted
accounting principles for investment companies as follows:
a) Valuation of Securities -
Securities traded on a national securities exchange or admitted to trading on
the National Association of Securities Dealers Inc. Automated Quotations
National List are valued at the last reported sales price on the last business
day of the fiscal period. Common stocks for which no sale was reported on that
date and over-the-counter securities, are valued at the mean between the last
reported bid and asked prices. United States Government obligations and other
debt instruments having sixty days or less remaining until maturity are stated
at amortized cost. Debt instruments having a remaining maturity of more than
sixty days are valued at the highest bid price obtained from a dealer
maintaining an active market in that security or on the basis of prices obtained
from a pricing service approved as reliable by the Board of Directors. All other
investment assets, including restricted and not readily marketable securities,
are valued in such manner as the Board of Directors in good faith deems
appropriate to reflect their fair market value.
b) Federal Income Taxes -
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to its shareholders. Therefore, no provision for federal income
tax is required.
c) Use of Estimates -
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
effect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increases and decreases in net assets from operations
during the reporting period. Actual results could differ from those estimates.
d) General -
Securities transactions are recorded on the trade date basis. Interest income is
accrued as earned and dividend income is recorded on the ex-dividend date.
Realized gains and losses from securities transactions are recorded on the
identified cost basis. Dividends and capital gain distributions to shareholders,
which are determined in accordance with income tax regulations, are recorded on
the ex-dividend date. It is the Fund's policy to take possession of securities
as collateral under repurchase agreements and to determine on a daily basis that
the value of such securities plus accrued interest are sufficient to cover the
value of the repurchase agreements.
2. Investment Management Fees and Other Transactions with Affiliates
Under the Investment Management Contract, the Fund pays an investment management
fee to Reich & Tang Asset Management, L.P. (the "Manager") equal to .80% of the
Fund's average daily net assets. The Manager is required to reimburse the Fund
for its expenses (exclusive of interest, taxes, brokerage, and extraordinary
expenses) to the extent that such expenses, including the management fee, for
any fiscal year exceed 2 1/2% of the first $30 million of its average net
assets, 2% of the next $70 million of its average net assets and 1 1/2% of its
average net assets in excess of $100 million. No such reimbursement was required
for the period ended June 30, 1996.
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<PAGE>
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DELAFIELD FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
===============================================================================
2. Investment Management Fees and Other Transactions with Affiliates
Pursuant to an Administrative Services Agreement, the Fund pays to the Manager
an annual fee of .21% of the Fund's average daily net assets.
The Manager is a wholly-owned subsidiary of New England Investment Companies,
L.P. ("NEIC"). On August 16, 1995, New England Mutual Life Insurance Company
("The New England"), the owner of NEIC's general partner and a majority owner of
the limited partnership interest in NEIC, entered into an agreement to merge
with Metropolitan Life Insurance Company ("MetLife"), with MetLife to be the
survivor of the merger. The merger is subject to several conditions, including
the required approval, by shareholders of the Fund of a proposed new investment
advisory agreement, intended to take effect at the time of the merger. The new
agreement will be substantially similar to the existing agreement.
Pursuant to a Distribution Plan adopted under Securities Exchange Commission
Rule 12b-1, the Fund and Reich & Tang Distributors L.P. (the Distributor) have
entered into a Distribution Agreement and a Shareholder Servicing Agreement. For
its services under the Shareholder Servicing Agreement, the Distributor receives
from the Fund an annual fee equal to .25% of the Fund's average daily net
assets. There were no additional expenses borne by the Fund pursuant to the
Distribution Plan.
During the period ended June 30, 1996, the Distributor voluntarily waived
shareholder servicing fees of $59,141.
Brokerage commissions paid during the period to the Distributor amounted to
$21,658.
Fees are paid to Directors who are unaffiliated with the Manager on the basis of
$1,500 per annum plus $250 per meeting attended.
Included in the Statement of Operations under the captions "Custodian expenses"
and "Shareholder servicing and related shareholder expenses" are expense offsets
of $1,104.
3. Capital Stock
At June 30, 1996, 20,000,000,000 shares of $.001 par value stock were authorized
and capital paid in amounted to $44,875,728. Transactions in capital stock were
as follows:
<TABLE>
<CAPTION>
Six Months
Ended Period Ended
June 30, 1996 December 31, 1995
----------------------------- -----------------------------
Shares Amount Shares Amount
----------- ----------- ----------- -----------
<C> <C> <C> <C> <C>
Sold........................................ 279,625 $ 3,713,816 221,341 $ 2,650,363
Issued on reinvestment of dividends......... 19,367 267,462 71,878 881,282
Redeemed.................................... ( 154,152) ( 1,981,971) ( 103,911) ( 1,250,799)
----------- ----------- ----------- -----------
Net increase (decrease)..................... 144,840 $ 1,999,307 189,308 $ 2,280,846
=========== =========== =========== ===========
</TABLE>
4. Investment Transactions
Purchases and sales of investment securities, other than U.S. Government direct
and agency obligations and short-term investments, totaled $19,186,175 and
$19,583,785 respectively. Accumulated undistributed net realized gain at June
30, 1996 amounted to $3,532,649.
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<PAGE>
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===============================================================================
5. Selected Financial Information
<TABLE>
<CAPTION>
Six Months Period from Year November 19, 1993
Ended October 1, 1995 to Ended (Inception) to
June 30, 1996 December 31, 1995 September 30, 1995 September 30, 1994
------------- ----------------- ------------------ ------------------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<C> <C> <C> <C> <C>
Net asset value, beginning of period.......................$ 12.26 $ 11.95 $ 10.82 $ 10.00
---------- ---------- ---------- ---------
Income from investment operations:
Net investment income................................... .07 .05 .13 .07
Net realized and unrealized
gains (losses) on investments........................... 1.62 .50 1.99 .82
---------- ---------- ---------- ---------
Total from investment operations.......................... 1.69 .55 2.12 .89
---------- ---------- ---------- ---------
Less distributions:
Dividends from net investment income....................( .07) ( .05) ( .13) ( .07)
Distributions from net realized gains on investments.... -- ( .18) ( .86) --
In excess of net realized gain.......................... -- ( .01) -- --
---------- --------- --------- --------
Total distributions........................................( .07) ( .24) ( .99) ( .07)
---------- --------- --------- --------
Net asset value, end of period............................$ 13.88 $ 12.26 $ 11.95 $ 10.82
========== ========= ========= ========
Total Return.............................................. 13.79%(a) 4.62%(a) 20.05% 8.93%(a)
========== ========= ========= ========
Ratios/Supplemental Data
Net assets, end of period(000)............................$ 53,782 $ 45,730 $ 42,316 $ 9,658
Ratios to average net assets:
Expenses............................................... 1.32%*(b)(d) 1.67%*(b)(d) 1.65%(b) 1.78%*(b)
Net investment income.................................. 1.17%*(b) 1.57%*(b) 1.35%(b) 0.96%*(b)
Portfolio turnover rate.................................... 45.10 20.49 70.36 42.84
Average commission rate paid (per share)................... $.0259(c) $.0226(c) -- --
</TABLE>
* Annualized
(a) Not Annualized
(b) Net of investment management, administration and shareholder servicing fees
waived equivalent to .24%, .20%, .71% and 1.12%, respectively, of average
net assets.
(c) Required by regulations issued in 1995.
(d) Includes expenses paid indirectly.
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<PAGE>
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[This Page Intentionally Left Blank.]
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<PAGE>
- ----------------------------------------------------
This report is submitted for the general
information of the shareholders of the Fund. It is
not authorized for distribution to prospective
investors in the Fund unless preceded or
accompanied by an effective prospectus, which
includes information regarding the Fund's
objectives and policies, experience of its
management, marketability of shares, and other
information.
- -----------------------------------------------------
Delafield Fund, Inc.
600 Fifth Avenue
New York, New York 10020
Manager
Reich & Tang Asset Management, L.P.
600 Fifth Avenue
New York, New York 10020
Custodian
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
Transfer Agent
Reich & Tang Services L.P.
600 Fifth Avenue
New York, New York 10020
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