<PAGE>
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DELAFIELD
FUND,INC. 600 FIFTH AVENUE, NEW YORK, NY 10020
212-830-5200
===============================================================================
Dear Shareholder:
We are pleased to present the semi-annual report of Delafield Fund, Inc. for the
period January 1, 1997 through June 30, 1997.
The Delafield Fund's net asset value per share on June 30, 1997 was $15.25 as
compared to $13.49 at December 31, 1996. The Fund had net assets of $103,239,404
and 821 active shareholders. After adjusting for dividend payments of $0.07 per
share, the Fund registered an increase of 13.6% during the first-half year. The
Fund held 49 companies, with the top ten holdings accounting for 27% of total
net assets overall. Equity investments comprised 64% of the $103.2 million
portfolio on June 30, 1997.
We thank you for your support and look forward to serving your needs.
Sincerely,
\S\J. Dennis Delafield \s\Vincent Sellecchia
J. Dennis Delafield Vincent Sellecchia
Chairman President
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<PAGE>
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DELAFILED FUND, INC.
STATEMENT OF NET ASSETS
JUNE 30, 1997
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ --------
Common Stocks (64.41%)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Automotive/Auto Parts (3.47%)
APS Holding Corporation - Class A* 90,000 $ 787,500
Federal-Mogul Corporation 80,000 2,800,000
-------------
3,587,500
-------------
Chemicals (1.82%)
Freeport-McMoRan, Inc. 65,000 1,876,875
-------------
Consumer Products & Services (4.11%)
Bush Industries Inc. 50,000 1,187,500
O'Sullivan Industries Holdings* 28,400 470,375
Polaroid Corporation 46,500 2,580,750
-------------
4,238,625
-------------
Energy (1.08%)
ENSERCH Corporation 50,000 1,112,500
-------------
Food and Beverage (1.64%)
Rykoff-Sexton Inc. 72,700 1,694,819
-------------
Industrial Products (20.38%)
AMETEK, Inc. 90,000 2,115,000
Atchison Casting Corporation* 100,000 1,662,500
BW/IP Inc. 150,000 3,046,875
Corning Inc. 10,000 556,250
Elsag Bailey Process Automation, N.V.* 120,000 2,205,000
Furon Company 49,500 1,553,062
Greenfield Industries 160,000 4,320,000
Greif Brothers Corporation Class A 11,500 310,500
Kennametal Inc. 25,000 1,075,000
Sheldahl Inc.* 40,000 832,500
Stimsonite Corporation* 120,000 742,500
Varian Associates Inc. 35,000 1,898,750
Watts Industries Inc. Class A 30,000 720,000
-------------
21,037,937
-------------
Insurance (Brokers) (1.28%)
Gallagher (Arthur J.) & Co. 35,000 1,321,250
-------------
Insurance (Life) (1.30%)
Provident Companies Inc. 25,000 1,337,500
-------------
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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===============================================================================
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ --------
Common Stocks (Continued)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Insurance (Property/Casualty) (2.80%)
Highlands Insurance Group* 41,000 $ 825,125
Orion Capital Corporation 15,000 1,106,250
Terra Nova (Bermuda) Holding 15,000 315,000
20th Century Industries 30,700 644,700
-------------
2,891,075
-------------
Insurance (Reinsurance) (1.81%)
Risk Capital Holding Inc.* 90,000 1,867,500
-------------
Metals/Mining (3.82%)
Allegheny Teledyne Inc. 70,000 1,890,000
Armco Inc.* 130,000 503,750
Bethlehem Steel Corporation* 90,000 939,375
Cleveland Cliffs 15,000 611,250
-------------
3,944,375
-------------
Office Equipment (5.02%)
BancTec, Inc.* 200,000 5,187,500
-------------
Pharmaceuticals (0.07%)
Covance Inc.* 2,500 48,281
Quest Diagnostics, Inc.* 1,250 25,703
-------------
73,984
-------------
Real Estate (1.98%)
Kimco Realty Corporation 40,000 1,270,000
Ramco-Gershenson Properties Trust 43,750 771,094
-------------
2,041,094
-------------
Retail (6.27%)
The Limited, Inc. 52,214 1,057,334
Nine West Group, Inc.* 50,000 1,909,375
Sunglass Hut International, Inc.* 300,000 1,893,750
Waban Inc.* 50,000 1,609,375
-------------
6,469,834
-------------
Textile/Apparel (4.57%)
Burlington Industries Inc.* 90,000 1,080,000
Delta Woodside Industries Inc.* 250,000 1,687,500
Farah Inc.* 185,000 1,179,375
Fruit of the Loom, Inc.* 25,000 775,000
-------------
4,721,875
-------------
</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, 1997
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ --------
Common Stocks (Continued)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Miscellaneous (2.99%)
Albany International Corporation Class A 50,000 $ 1,125,000
Deluxe Corporation 25,000 853,125
Salient 3 Communications 47,900 574,800
White River Corporation* 7,400 539,275
-------------
3,092,200
-------------
Total Common Stocks (Cost $53,339,627) 66,496,443
-------------
<CAPTION>
Face
Amount
------
Corporate Bonds (0.95%)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Industrial Products (0.21%)
AMETEK, Inc. 9.750%
debentures, due 03/15/2004 $ 200,000 213,000
-------------
Insurance (Life) (0.13%)
PennCorp Financial Group 9.250%, due 12/15/2003 125,000 130,000
-------------
Miscellaneous (0.61%)
American Annuity Group Senior Notes, 9.500%, due 08/15/2001 600,000 630,000
-------------
Total Corporate Bond (Cost $925,169) 973,000
-------------
<CAPTION>
U.S. Government Obligations (7.75%)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury Note, 5.500%, due 07/31/97 $8,000,000 8,002,504
-------------
Total U.S. Government Obligations (Cost $7,999,870) 8,002,504
-------------
<CAPTION>
Short-Term Investments (26.57%)
Repurchase Agreements (26.57%)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
J.P. Morgan Securities Inc., 5.95%, due 07/01/97
(Collateralized by $28,081,000
U.S. Treasury Note, 6.250%, due 06/30/02) $27,433,000 27,433,000
-------------
Total Short-Term Investments (Cost $27,433,000) 27,433,000
-------------
Total Investments (99.68%) (Cost $89,697,666+) 102,904,947
Cash and Other Assets, In Excess of Liabilities (0.32%) 334,457
-------------
Net Assets (100.00%), 6,771,704 shares outstanding $ 103,239,404
=============
Net asset value, offering and redemption price per share $ 15.25
=============
</TABLE>
* Non-income producing.
+ Aggregate cost for federal income tax purposes is $89,702,474. Aggregate
unrealized appreciation and depreciation, based on cost for Federal income tax
purposes, are $13,759,042 and $556,569, respectively.
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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, 1997
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest....................................................................... $ 703,967
Dividends...................................................................... 312,112
---------------
Total income............................................................. 1,016,079
---------------
Expenses: (Note 2)
Investment management fee....................................................... 313,617
Administration fee.............................................................. 82,324
Shareholder servicing fee....................................................... 98,005
Custodian expenses.............................................................. 6,028
Shareholder servicing and related shareholder expenses.......................... 31,955
Legal, compliance and filing fees............................................... 22,475
Audit and accounting............................................................ 21,437
Directors' fees and expenses.................................................... 3,750
Amortization of organization costs.............................................. 4,311
Other........................................................................... 919
---------------
Total expenses............................................................... 584,821
Less:
Fees waived.................................................................. ( 78,404)
Expenses paid indirectly..................................................... ( 1,785)
---------------
Net expenses................................................................. 504,632
---------------
Net investment income........................................................ 511,447
---------------
<CAPTION>
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments............................................ 3,826,077
Net change in unrealized appreciation (depreciation) of investments................ 5,915,974
---------------
Net gain (loss) on investments............................................ 9,742,051
---------------
Increase (decrease) in net assets from operations.................................. $ 10,253,498
===============
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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DELAFIELD FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
===============================================================================
<TABLE>
<CAPTION>
Six Months
Ended Year
June 30, 1997 Ended
(Unaudited) December 31, 1996
----------- -----------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income...................................................... $ 511,447 $ 616,554
Net realized gain on investments........................................... 3,826,077 7,345,183
Net change in unrealized appreciation (depreciation) ...................... 5,915,974 4,380,986
------------ ------------
Increase (decrease) in net assets from operations......................... 10,253,498 12,342,723
Distributions from:
Net investment income...................................................... ( 465,892) ( 616,554)
Net realized gain on investments........................................... ( -- ) ( 7,293,283)
In excess of net realized gain............................................. ( -- ) ( -- )
Return of capital.......................................................... ( -- ) ( 516)
Capital share transactions (Note 3).......................................... 32,172,366 11,117,028
------------ ------------
Total increase (decrease)................................................. 41,959,972 15,549,398
Net Assets:
Beginning of period......................................................... 61,279,432 45,730,034
------------ ------------
End of period (including undistributed net investment income
of $45,555 & $0, respectively............................................ $ 103,239,404 $ 61,279,432
============ ===========
</TABLE>
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<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.
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<PAGE>
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DELAFIELD FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
2. Investment Management Fees and Other Transactions with Affiliates (Continued)
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.
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, 1997, the Distributor voluntarily waived
shareholder servicing fees of $78,404.
Brokerage commissions paid during the period to the Distributor amounted to
$31,429.
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 caption "Shareholder servicing
and related shareholder expenses" are fees of $19,745 paid to Reich & Tang
Services, L.P. an affiliate of the Manager as servicing agent for the Fund.
Included in the Statement of Operations under the captions "Custodian expenses"
and "Shareholder servicing and related shareholder expenses" are expense offsets
of $1,785.
3. Capital Stock
At June 30, 1997, 20,000,000,000 shares of $.001 par value stock were authorized
and capital paid in amounted to $86,165,299. Transactions in capital stock were
as follows:
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
June 30, 1997 December 31, 1996
----------------------------- ---------------------------
Shares Amount Shares Amount
------------- -------------- ---------- ----------
<S> <C> <C> <C> <C>
Sold................................ 2,436,347 $35,128,551 486,042 $ 6,686,946
Issued on reinvestment of dividends. 28,904 436,388 584,374 7,889,402
Redeemed............................ ( 235,740) ( 3,392,573) ( 259,075) ( 3,459,320)
----------- ----------- ---------- -----------
Net increase (decrease)............. 2,229,511 $ 32,172,366 811,341 $ 11,117,028
=========== =========== ========== ===========
</TABLE>
4. Investment Transactions
Purchases and sales of investment securities, other than U.S. Government direct
and agency obligations and short-term investments, totaled $29,936,161 and
$17,347,844 respectively. Accumulated undistributed net realized gain at June
30, 1997 amounted to $3,821,269.
- --------------------------------------------------------------------------------
<PAGE>
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================================================================================
5. Financial Highlights.
<TABLE>
<CAPTION>
Six Months Year Period from
Ended Ended October 1, 1995 to
June 30, 1997 December 31, 1996 December 31, 1995
------------- ----------------- -----------------
<S> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period........ $ 13.49 $ 12.26 $ 11.95
---------- --------- ----------
Income from investment operations:
Net investment income................... .08 .16 .05
Net realized and unrealized
gains (losses) on investments............. 1.75 3.07 .50
---------- --------- ----------
Total from investment operations............ 1.83 3.23 .55
---------- --------- ----------
Less distributions:
Dividends from net investment income.... ( .07) ( .16) ( .05)
Distributions from net realized gains...
on investments........................ -- ( 1.84) ( .18)
In excess of net realized gain.......... -- -- ( .01)
----------- --------- ----------
Total distributions......................... ( .07) ( 2.00) ( .24)
----------- --------- ----------
Net asset value, end of period.............. $ 15.25 $ 13.49 $ 12.26
========== ========= ==========
Total Return................................ 13.57%(a) 26.35% 4.62%(a)
========== ========= ==========
Ratios/Supplemental Data
Net assets, end of period (000)............. $ 103,239 $ 61,279 $ 45,730
Ratios to average net assets:
Expenses................................ 1.29%* 1.29% 1.67%*
Net investment income................... 1.30%* 1.18% 1.57%*
Management, administration and shareholder
servicing fees waived.................. .20%* .20% .20%*
Expenses paid indirectly............... .00% .01% .07%*
Portfolio turnover rate..................... 27.70% 75.54% 20.49%
Average commission rate paid (per share)(b). $ .0327 $ .0378 $ .0343
</TABLE>
* Annualized
(a) Not Annualized
(b) Required by regulations issued in 1995.
<TABLE>
<CAPTION>
Year November 19, 1993
Ended (Inception) to
September 30, 1995 September 30, 1994
------------------ ------------------
<S> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period........ $ 10.82 $ 10.00
---------- ---------
Income from investment operations:
Net investment income................... .13 .07
Net realized and unrealized
gains (losses) on investments............. 1.99 .82
---------- ---------
Total from investment operations............ 2.12 .89
---------- ---------
Less distributions:
Dividends from net investment income.... ( .13) ( .07)
Distributions from net realized gains...
on investments........................ ( .86) --
In excess of net realized gain.......... -- --
---------- ---------
Total distributions......................... ( .99) ( .07)
---------- ---------
Net asset value, end of period.............. $ 11.95 $ 10.82
========== =========
Total Return................................ 20.05% 8.93%(a)
========== =========
Ratios/Supplemental Data
Net assets, end of period (000)............. $ 42,316 $ 9,658
Ratios to average net assets:
Expenses................................ 1.65% 1.78%*
Net investment income................... 1.35% 0.96%*
Management, administration and shareholder
servicing fess waived....... .17% 1.12%
Expenses paid indirectly -- --
Portfolio turnover rate..................... 70.36% 42.84%
Average commission rate paid (per share).... -- --
</TABLE>
* Annualized
(a) Not Annualized
(b) Required by regulations issued in 1995.
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<PAGE>
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- ----------------------------------------------------
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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<PAGE>
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DELAFIELD
FUND, INC.
Semi-Annual Report
June 30, 1997
(Unaudited)
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<PAGE>
