The Rupay-Barrington Total Return Fund
Report from Fritz Bensler, Portfolio Manager
Dear Shareholders:
For the six month period ended June 30, 1999, the Rupay-Barrington Total Return
Fund increased in value by 5.7%. This compares to a gain in the S&P 500 of
12.4%. Other mutual funds similar to the Rupay-Barrington Total Return Fund that
hold both equities and fixed income securities in their portfolios and are
classified as domestic hybrid mutual funds by the mutual fund rating service
Morningstar gained on average 5.0% in the first six months of this year.
The first half of 1999 has been somewhat volatile for the financial markets.
Corporate earnings have been very good during the first two quarters of 1999.
The economy has been strong and for the most part inflation has remained in
check. However, a larger than expected rise in the Consumer Price Index (CPI) in
April spurred concerns about the prospects for higher interest rates. The
Federal Reserve confirmed investors' fears when it announced that the Federal
Open Market Committee (FOMC) had adopted a tightening bias. The combination of a
higher than expected CPI and a potential hike in interest rates sparked a broad
sell-off in equity securities. Growth stocks were especially hard hit.
Market sentiment improved in June after updated CPI data indicated that core
inflation was still under control and that the April reading was an aberration.
The Federal Reserve did, however, raise short-term interest rates at the end of
June and vows to keep a vigilant eye on inflation.
Looking forward to the second half of 1999 my investment outlook is generally
positive. The markets may continue to be volatile the rest of the year and
another Federal Reserve rate hike is a possibility. But key macroeconomic
factors including low inflation, a strong U.S. consumer, productivity
enhancements, Federal budget surpluses and signs of improvement in Asian
economies should create a favorable long-term environment for equity returns.
We appreciate your investment in the Rupay-Barrington Total Return Fund and look
forward to being part of your investment program for many years to come.
Sincerely,
Fritz Bensler, CFA
Portfolio Manager
July 30, 1999
Rupay-Barrington Total Return Fund
Schedule of Portfolio Investments
June 30, 1999
Number (Unaudited)
of Market
Shares Security Value
COMMON STOCK: 19.25%
BROADCASTING & CABLE TV: 3.56%
200 Cablevision Systems Corp.* $14,000
COMPUTERS: 2.80%
200 EMC Corp.* 11,000
FINANCIAL: 3.03%
200 BancOne 11.913
NETWORKING PRODUCTS: 3.28%
200 Cisco Systems, Inc.* 12,900
TELECOMMUNICATIONS: 6.58%
300 MCI WorldCom, Inc.* 25,874
TOTAL COMMON STOCK: 75,687
(Cost: $50,130)
Principal
Amount
- -------- CORPORATE OBLIGATIONS: 25.44%
$100,000 Fixed Income UIT 12/30/01; 9.25%***
(Cost:$100,000) 100,000
78,185 SHORT TERM INVESTMENTS: 19.89%
Firstar Treasury Fund
(Cost: $78,185) 78,185
TOTAL INVESTMENTS:
(Cost: $228,315)** 64.58% $253,872
Other assets,net 35.42% 139,243
NET ASSETS 100.00% $393,115
**Cost for Federal income tax purpose is $228,316 and net
unrealized appreciation consists of:
Gross unrealized appreciation $25,950
Gross unrealized depreciation (393)
Net unrealized appreciation $25,557
*Non-income producing security
***Illiquid security
See Notes to Financial Statements
RUPAY-BARRINGTON TOTAL RETURN FUND
Statement of Assets and Liabilities
June 30, 1999 (Unaudited)
ASSETS
Investments at value (Identified cost of $228,315)(Notes 1 & 3) $253,872
Interest receivable 8,655
Due from manager 85,229
Organizational expense 49,181
TOTAL ASSETS 396,937
LIABILITIES
Distributions payable 3,822
NET ASSETS $393,115
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE ($393,115/38,226 shares outstanding) $10.28
OFFERING PRICE ($10.28x100/94.25) $10.91
At June 30, 1999 there were 50,000,000 shares of $.01 par value stock authorized
and components of net assets are:
Paid in capital $323,537
Undistributed net investment income 2,055
Net realized gain on investments 41,966
Net unrealized gain on investments 25,557
NET ASSETS $393,115
See Notes to Financial Statements
RUPAY-BARRINGTON TOTAL RETURN FUND Statement of Operations Six months ended June
30, 1999 (Unaudited)
INVESTMENT INCOME
Income:
Interest $14,991
Dividends 307
Total income $15,298
Expenses:
Investment management
fees (Note 2) 2,187
Recordkeeping and administration
services (Note 2) 7,438
Transfer agent fees (Note 2) 6,455
Legal and audit fees 10,000
Custodian and accounting fees (Note 3) 10,721
Distribution fees 957
Registration fees 430
Amortization of organization expense 18,846
Miscellaneous 1,511
Total expenses 58,545
Expenses reimbursed or waived (52,940)
Custody fee credits (274)
Net expenses 5,331
Net investment income 9,967
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments 111,828
Net change in unrealized
appreciation on investments (87,133)
Net gain on investments 24,695
Net increase in net assets
resulting from operations $34,662
See Notes to Financial Statements
RUPAY-BARRINGTON TOTAL RETURN FUND
Statement of Changes in Net Assets
Six months ended
June 30, 1999 Year ended
(Unaudited) December 31, 1998
OPERATIONS
Net investment income $9,967 $17,841
Net realized gain (loss)
on investments 111,828 (69,862)
Net change in unrealized
appreciation of investments (87,133) 70,428
Net increase
in net assets resulting
from operations 34,662 18,407
DISTRIBUTION TO
SHAREHOLDERS FROM:
Net investment income
($ .18 and $.16 per share,
respectively) (7,912) (18,802)
CAPITAL SHARE TRANSACTIONS
Net decrease in
net assets resulting
from capital share
transactions** (422,829) (1,412,303)
Net decrease
in net assets (396,079) (1,412,698)
Net assets at
beginning of period 789,194 2,201,892
NET ASSETS at end of period
(including undistributed net investment income
of $2,055, and $-, respectively) $393,115 $789,194
**A summary of capital share transactions follows:
Six months ended
June 30, Year ended
(Unaudited) December 31, 1998
Shares Value Shares Value
Shares sold 510 $5,176 15,207 $146,510
Shares
reinvested
from distributions 386 4,064 1,888 18,318
Shares
redeemed (42,427) (432,069) (164,855) (1,577,131)
Net decrease (41,531) ($422,829) (147,760)($1,412,303)
See Notes to Financial Statements
RUPAY-BARRINGTON TOTAL RETURN FUND
Financial Highlights
For a Share Outstanding Throughout Each Period
Six months ended Aug 11, 1995*
June 30, 1999 Years ended Decembder thru
(Unaudited) 1998 1997 1996 Dec 31, 1995
Per Share Operating
Performance
Net asset value,
beginning of period $9.90 $9.68 $9.72 $9.67 $10.00
Income from investment
operations-
Net investment income 0.23 0.15 0.20 0.13 0.04
Net realized and unrealized
gain (loss) on investments 0.33 0.23 0.67 0.44 (0.33)
Total from investment
operations 0.56 0.38 0.87 0.57 (0.29)
Less distributions-
Distributions from net
investment income (0.18) (0.16) (0.21) (0.12) (0.04)
Distributions from realized
gains on investments - - (0.70) (0.40) -
Total distributions (0.18) (0.16) (0.91) (0.52) (0.04)
Net asset value, end of period $10.28 $9.90 $9.68 $9.72 $9.67
Total Return 5.66% 3.98% 8.91% 5.89% (2.89)%
Ratios/Supplemental Data
Net assets, end of period (000's) $393 $789 $2,202 $4,926 $1,126
Ratio to average net assets-(A)
Expenses before reimbursement 21.52%** 7.07% 3.82% 6.29% 5.09%**
Expenses after reimbursement (B) 2.06%** 1.99% 1.95% 1.95% 1.95%**
Expenses-net (C) 1.96%** 1.95% 1.95% 1.95% 1.95%**
Net investment income 3.66%** 1.05% 1.68% 2.06% 1.72%**
Portfolio turnover rate 48.35% 126.83%112.02% 1.14% 0.00%
*Commencement of operations
**Annualized
(A) Management fee waivers reduced the expense ratios and increased
net investment income ratios by 19.56% for the period ended June 30, 1999,
5.12% for the period ended December 31, 1998, 1.87% in 1997, 4.34% in 1996
and 3.14% in 1995.
(B) Expense ratio after reimbursment has been increased to include additional
custodian fees, which were offset by custodian fee credits.
(C) Expense ratio-net reflects the effect of the custodian fee credits the
fund received
See Notes to Financial Statements
Notes to the Financial Statements
June 30, 1999
(Unaudited)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES--The Rupay-Barrington Total Return 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 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. Deferred Organizational Expenses. Organizational expenses are being
amortized on a straight line basis over a period not exceeding 60
months beginning at the Fund's commencement of operations.
E. Distribution to Shareholders. Distributions from investment income and
realized gains, if any, are recorded on the ex-dividend date.
F. Other. Dividend income is recorded on the ex-dividend date. Interest
income is recorded on an accrual basis.
G. 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.
<PAGE>
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 six months ended June 30, 1999, a reimbursement of $52,940 was made.
As provided in the Administrative Agreement, the Fund reimbursed Commonwealth
Shareholder Services, Inc. ("CSS"), its Administrative Agent, $7,438 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 $6,455 for its services for the six months ended June 30,
1999.
Certain officers and directors of the Fund are also officers and directors of
the investment advisor.
NOTE 3-INVESTMENTS\CUSTODY--For the six months ended June 30, 1999, the Fund
made purchases and sales of securities other than short-term notes aggregated
$106,191 and $531,406, respectively. The custodian has provided credits in the
amount of $274 against custodian and accounting charges based on credits on cash
balances.
At June 30, 1999, the Fund had an investment in a Unit Investment Trust, which
is considered to be an illiquid security, and has a market value of $100,000,
representing 25.44% of the net assets.
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-related activities. No amounts were paid for the six months ended
June 30, 1999.
