Annual Report to Shareholders
RUPAY-BARRINGTON GROWTH FUND
For the Year Ended
December 31, 1998
<PAGE>
Dear Shareholders,
The Rupay-Barrington Growth Fund made its first investment on November 17, 1998,
which we will refer to as its inception date. As of 12/31/98, the Fund had a
total of 28 stocks in the portfolio; net assets of $195,942.21; and a YTD return
of 6.48%. The top five holdings were: Gliatech; Fistar; Lason; Sun Microsystems;
and EMC Corp Mass. The Fund's focus on technology and health care reflects the
two major megatrends of today and tomorrow: the transformation of the U.S. from
an industrial to an information based economy and society; and the aging
population.
These megatrends will lead the market well into the next millennium and provide
the guidelines for discovering the super companies of the 21st century. These
are exciting times of great opportunity.
The Fund invest in U.S. companies with superior earnings and revenue growth
potential that are leaders in their industries; have top product lines and
excellent management. New companies with cutting edge technology and excellent
potential are also reviewed. The Fund looks for companies that can prosper in
the global economy.
Although 1998 was volatile, the S&P 500 finished the year with a 26.7% gain and
the NASDAQ climbed 39.6%. As we enter 1999 conditions are very much the same:
low inflation; low interest rates; low unemployment; global commodity price
deflation; and a reasonably strong U.S. economy. Global financial problems will
resurface; the Y2K problem will be upon us and speculators will see to it that
the market is periodically overbought or oversold. I am cautiously optimistic
due to secular trends that augur well for the bull market. Volatility can be
expected and panic selling should be avoided. Investors are advised to have at
least a five year time horizon in the equity market and stay on course.
Jill H. Travis, MBA, CFP
Portfolio
<PAGE>
Schedule of Portfolio Investments
December 31, 1998
Number
of Market
Shares Security Value
------ -------- -----
COMMON STOCK: 87.32%
AEROSPACE/DEFENSE: 4.03%
200 Kroll-O'Gara Co.* $7,887
------
BIOTECHNOLOGY: 7.23%
100 Agouron Pharmaceuticals Inc.* 5,875
100 Biogen Inc.* 8,300
-----
14,175
------
BANKS-MAJOR REGIONAL: 4.76%
100 Firstar Corp* 9,325
-----
COMPUTER-HARDWARE: 8.11%
100 Dell Computer Corp* 7,319
100 Sun Microsystems Inc.* 8,563
-----
15,882
------
COMPUTER-PERIPHERAL: 4.34%
100 EMC Corp* 8,500
-----
COMPUTER-SOFTWARE/SERVICES: 13.66%
150 Broadvision Inc.* 4,800
100 Compuware Corp* 7,813
300 Novell Inc.* 5,437
100 Oracle Corporation* 4,312
200 Spyglass Inc.* 4,400
-----
26,762
------
ELECTRONICS/SEMICONDUCTORS: 5.15%
250 Neomagic Corp* 5,531
100 Vitesse Semiconductor Corp* 4,563
-----
10,094
------
HEALTH CARE-DRUGS: 11.12%
150 Schering-Plough Corp. 8,287
100 Serologicals Corp* 3,000
-----
21,787
------
HEALTH CARE-MEDIACL PRODUCTS: 2.51%
100 Bindley Western Industries, Inc. 4,925
-----
INSURANCE-PROPERTY: 1.64%
100 First American Financial Corp. 3,213
-----
INVESTMENT BANKING/BROKERAGE: 2.87%
100 Charles Schwab Corp. 5,619
-----
LEISURE TIME: 2.14%
150 T-HQ Inc.* 4,200
-----
PHOTOGRAPH/IMAGING: 4.45%
150 Lason, Inc.* 8,728
-----
RETAIL-BUILDING SUPPLIES: 1.66%
100 Eagle Hardware & Garden Inc.* 3,250
-----
RETAIL-DISCOUNTERS: 2.51%
100 99 Cents Only Stores* 4,912
-----
SERVICES-DATAPROCESSING: 2.97%
100 Envoy Corp New* 5,825
-----
TELECOM-CELLULAR: 2.70%
400 Metro One Telecommunications Inc.* 5,300
-----
TELECOM-LONG DISTANCE: 5.47%
100 GO2NET Inc* 3,538
100 MCI WorldCom Inc.* 7,175
-----
10,713
------
TOTAL COMMON STOCK: 171,097
(Cost: $160,047) -------
Principal
Amount
- --------
$ 45,612 SHORT TERM INVESTMENTS: 23.28%
Star Bank Money Market Fund
(Cost: $45,612) 45,612
------
TOTAL INVESTMENTS:
(Cost: $205,659)** 110.60% 216,709
Liabilities in excess
of other assets (10.60)% (20,767)
------ -------
NET ASSETS 100.00% $195,942
======= ========
**Cost for Federal income tax purpose is $205,659 and net unrealized
appreciation consists of:
Gross unrealized appreciation $12,884
Gross unrealized depreciation (1,834)
------
Net unrealized appreciation $11,050
=======
*Non-income producing security
See Notes to Financial Statements
<PAGE>
Statement of Assets and Liabilities
December 31, 1998
- --------------------------------------------------------------------------------
ASSETS
Investments at value (Identified
cost of $160,047)(Notes 1 & 3) $171,097
Short term investments 45,612
Dividends and interest receivable 877
Due from manager 8,504
Prepaid expenses 4,717
-----
TOTAL ASSETS 230,807
-------
LIABILITIES
Investments purchased 31,748
Accrued expenses 3,117
-----
TOTAL LIABILITIES 34,865
------
NET ASSETS $195,942
========
NET ASSET VALUE OFFERING AND REDEMPTION PRICE PER
SHARE ($195,942/18,455 shares outstanding) $10.62
======
At December 31, 1998 there were 50,000,000 shares of $.01 par value stock
authorized and components of net assets are:
Paid in capital $184,892
Net unrealized gain on investments 11,050
------
Net Assets $195,942
========
See Notes to Financial Statements
<PAGE>
Statement of Operations
For the period August 14, 1998* to December 31, 1998
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Income:
Dividends $ 8
Interest 871
---
Total income $879
------
Expenses:
Investment management fees (Note 2) 288
Recordkeeping and administration services (Note 2) 3,774
Transfer agent fees (Note 2) 2,054
Shareholder servicing and reporting 775
Distribution fees 126
Accounting fees (Note 3) 2,000
Registration fees 169
Custodian fees (Note 3) 117
------
Total expenses 9,303
Expenses reimbursed or waived (8,918)
------
Net expenses 385
------
Net investment income 494
------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net unrealized appreciation on investments 11,050
-------
Net increase in net assets resulting from operations $11,544
=======
*Commencement of operations
See Notes to Financial Statements
<PAGE>
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
August 14,1998*
December 31, 1998
-----------------
OPERATIONS
Net investment income $ 494
Net change in unrealized appreciation on investments 11,050
------
Net increase in net assets resulting from operations 11,544
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income($.03 per share) (506)
CAPITAL SHARE TRANSACTIONS
Net increase in net assets
resulting from capital share transactions** 184,904
--------
Net increase in net assets 195,942
Net assets at beginning of period -0-
--------
NET ASSETS at end of period $195,942
========
**A summary of capital share transactions follows:
August 14,1998*
to
December 31, 1998
-----------------
Shares Value
------ -----
Shares sold 18,407 $184,398
Shares reinvested from distribution 48 506
Shares redeemed 0 0
------ --------
Net increase 18,455 $184,904
====== ========
*Commencement of operations
See Notes to Financial Statements
<PAGE>
Financial Highlights
For a Share Outstanding Throughout The Period
- --------------------------------------------------------------------------------
August 14, 1998* to
December 31, 1998
-----------------
Per Share Operating Performance
Net asset value, beginning of period $10.00
------
Income from investment operations-
Net investment income 0.03
Net realized and unrealized gain on investments 0.62
----
Total from investment operations 0.65
----
Less distributions-
Distributions from net investment income (0.03)
-----
Total distributions (0.03)
-----
Net asset value, end of period $10.62
======
Total Return 6.48%
====
Ratios/Supplemental Data
Net assets, end of period (000's) $196
Ratio to average net assets-(A)
Expenses before reimbursement 25.48%**
Expenses after reimbursment 1.07%**
Net investment income 1.37%**
Portfolio turnover rate 0.00%
* Commencement of operations
** Annualized
(A) Management fee waivers and reimbursements reduced the expense ratios and
increased net investment income ratios by 24.41%** for the period ended
December 31, 1998.
See Notes to Financial Statements
<PAGE>
Notes to the Financial Statements
December 31, 1998
- --------------------------------------------------------------------------------
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES--The Rupay-Barrington Growth Fund is a
series of Rupay-Barrington Funds, Inc. (formerly Rupay-Barrington Total Return
Fund, Inc.) (the "Fund") is registered under The Investment Company Act of 1940,
as a diversified open-end management company. The fund commenced operations on
August 14, 1998.
The investment objective of the fund is to seek capital appreciation, current
income and preservation of capital by investing in a diversified portfolio of
equity securities and fixed income securities.
The following is a summary of significant accounting policies consistently
followed by the Fund. The policies are in conformity with generally accepted
accounting principles.
A. Security Valuation. Investments in securities listed or traded on a
nationally recognized securities exchange are valued at the last quoted
sales price on the date the valuations are made. Securities regularly
traded in the over-the-counter market are valued at the last quoted sales
price on the NASDAQ System. If no sales price is available for a listed or
NASDAQ security, or if the security is not listed on NASDAQ, such security
is valued at a price equal to the mean of the latest bid and ask prices.
B. Federal Income Taxes. The Fund intends 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
federal income tax provision is required.
C. Security Transactions. Security transactions are accounted for on the trade
date. The cost of securities sold is determined on a first-in, first-out
basis.
D. Distribution to Shareholders. Distributions from investment income and
realized gains, if any, are recorded on the ex-dividend date.
E. Other. Dividend income is recorded on the ex-dividend date. Interest income
is recorded on an accrual basis.
F. Accounting Estimates. In preparing financial statements in conformity with
generally accepted accounting principles, management makes estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements, as well as the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE 2-INVESTMENT MANAGEMENT AND DISTRIBUTION AGREEMENTS--The Fund has engaged
Rupay-Barrington Advisors, Inc. a wholly-owned subsidiary of Rupay-Barrington
Financial Group Inc., to manage its investments. The Fund pays its Advisors an
investment management fee for investment management and advisory services which
is computed at an annual rate of 0.80 of 1% of the Fund's daily net assets.
Rupay-Barrington Financial Group Inc. has agreed to reimburse the Fund for any
expenses, during the Fund's first five years of operations, which would cause
the Fund's ratio of operating expenses to exceed 1.95% of average net assets.
For the period ended December 31, 1998, a reimbursement of $8,918 was made.
As provided in the Administrative Agreement, the Fund reimbursed Commonwealth
Shareholder Services, Inc. ("CSS"), its Administrative Agent, $3,774 for
providing shareholder services, recordkeeping, administrative services and
blue-sky filings. The Fund compensates CSS for blue-sky filings and certain
shareholder servicing on an hourly rate basis. For other administrative
services, CSS receives .20% of average daily net assets.
Fund Services, Inc. ("FSI") is the Fund's Transfer and Dividend Disbursing
Agent. FSI received $2,054 for its services for the period ended December 31,
1998.
Certain officers and directors of the Fund are also officers and directors of
the investment advisor.
NOTE 3-PURCHASES AND SALES OF SECURITIES\CUSTODY--For the period ended December
31, 1998, the Fund made purchases and sales of securities other than short-term
notes aggregated $160,047 and $0, respectively.
NOTE 4-DISTRIBUTION PLAN--The Fund has adopted a Distribution Plan pursuant to
Rule 12b-1 under the Investment Company Act of 1940. Under the plan ,
Rupay-Barrington Securities Corp., a wholly-owned subsidiary of Rupay-Barrington
Financial Group Inc., was entitled to a fee at an annual rate of 0.35 of 1% of
the Fund's daily net assets. Rupay-Barrington Securities Corp. uses these fees
to pay its dealers whose clients hold portfolio shares and for other
distribution
<PAGE>
Report of Independent Certified Public Accountants
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of
Rupay-Barrington Funds, Inc.
San Francisco, California
We have audited the accompanying statement of assets and liabilities of
Rupay-Barrington Growth Fund, a series of Rupay-Barrington Funds, Inc.,
including the schedule of portfolio investments as of December 31, 1998, and the
related statement of operations, statement of changes in net assets and
financial highlights for the period August 14, 1998 (commencement of operations)
to December 31, 1998. 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
audit.
We conducted our audit 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 misstatements. 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, 1998, 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 audit provides 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 the
Rupay-Barrington Growth Fund as of December 31, 1998, the results of its
operations, the changes in its net assets and financial highlights for the
period August 14, 1998 to December 31, 1998, in conformity with generally
accepted accounting principles.
TAIT, WELLER AND BAKER
Philadelphia, Pennsylvania
January 22, 1999
