Sunstone Financial Group, Inc.
207 East Buffalo Street, Suite 400
Milwaukee, WI 53202
May 7, 1996
Via EDGAR
- ---------
Securities and Exchange Commission
Division of Investment Management
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: The Bramwell Growth Fund (the Fund);
Registration Nos.: 33-79742; 811-8546
Gentlemen:
On behalf of the Fund and pursuant to Rule 30b2-1 and Section 24(b) under the
Investment Company Act of 1940, as amended, we hereby file a Quarterly Report
to shareholders for the period ended March 31, 1996.
If you have any questions concerning this filing, please do not hesitate to
contact me.
Very Truly Yours,
/s/Mike Yanke
Mike Yanke
Sunstone Financial Group, Inc.
Client Services and Accounting Manager
MEY/jv
Encl.
THE BRAMWELL GROWTH FUND QUARTERLY REPORT - MARCH 1996
745 Fifth Avenue
New York, New York 10151
DEAR FELLOW SHAREHOLDERS:
INVESTMENT RESULTS - QUARTER ENDED MARCH 1996
THE BRAMWELL GROWTH FUND appreciated 4.5% for the quarter ended March 31, 1996
to $14.16 net asset value per share. Since inception, August 1, 1994, the
Fund's cumulative return was 42.1% resulting in a compound average annual rate
of return of 23.5% for the period. For the twelve months ended March 31, the
Fund returned 28.0%. Investment results compared to those of the S&P 500 Index
and the Lipper Growth Fund Index were:
MARCH Q ONE SINCE
COMPARATIVE INVESTMENT RETURNS 1996 YEAR INCEPTION<F1>
------------------------------ ---- ---- ---------
THE BRAMWELL GROWTH FUND 4.5% 28.0% 23.5%
S&P 500 Index<F2> 5.4 32.0 25.6
Lipper Growth Fund Index<F3> 4.5 29.3 22.3
<F1>Compound average annual return since inception 8/1/94. Cumulative return
since inception through March 31,1996 for The Bramwell Growth Fund was 42.1%
compared to 46.1% for the S&P 500 Index and 39.8% for the Lipper Growth Fund
Index. Past performance is historical and does not predict future results.
Investment returns and principal value will fluctuate, so that shares, when
redeemed may be worth more or less than original cost.
<F2>The S&P 500 Stock Index is an unmanaged index of 500 selected common stocks,
most of which are listed on the New York Stock Exchange. The Index is adjusted
for dividends, weighted towards stocks with large market capitalizations and
represents approximately two-thirds of the total market value of all domestic
common stocks.
<F3>The Lipper Growth Fund Index is an index made up of the 30 largest mutual
funds in the Lipper Analytical Services, Inc. growth objective grouping. Funds
comprising the Index are equal weighted and returns include the reinvestment of
dividends and are net of expenses.
The Fund ended March with net assets of $141.8 million and 15,200 shareholders
compared to $36.5 million and slightly over 4,000 shareholders at the end of
March 1995.
COMMENTARY
The Fund benefitted in the March quarter from gains in selected information
processing, retailing, and temporary help services and was restrained near-term
by declines in selected electronic component and equipment stocks. The Fund
ended the quarter with a median market capitalization of $2.1 billion.
Currently, we believe that there is a broad universe of mid-sized companies,
those with market capitalizations of $1 to $5 billion, that are attractively
valued relative to their future growth rates and to larger capitalization growth
stocks.
OUTLOOK
Our outlook for 1996 is for Gross Domestic Product to expand some 2%, given
slower capital expenditures from last year's high levels, and a sluggish housing
market, given the recent backup in interest rates. However, the number of
people employed is expected to continue to increase as investment capital raised
over the last few years is deployed, new products are introduced, and export
markets are developed. Consumer spending is expected to chug along despite
historically high consumer debt levels. Our outlook for global growth is 2-3%.
We assume moderate 2-3% inflation as free market competition restrains prices,
technological change drives greater productivity, the dollar strengthens, and a
prolonged winter ends. We expect interest rates to stabilize but continue to
believe that, given the historically wide spread between inflation and interest
rates, the Federal Reserve has room to reduce the Fed Funds rate from 5.25% if
the economy slows. We expect overall corporate profit gains to slow to mid-
single digits from 15% in 1995.
In a slowly expanding economy, we believe that companies with favorable growth
prospects stemming from innovative new products and new markets are likely to be
valued upward. Change is occurring rapidly at the margin. New technologies,
e.g., advanced satellites, digital electronics, the Internet, and genetic
engineering, are creating their own markets and transcending economic cycles.
In emerging countries, a growing middle class, with the desire to live like
people in the developed world, is expanding the demand for basic consumer goods
and services as well as infrastructure. Competition continues to drive the need
for the next generation of productivity-enhancing products. Overall, we believe
that worldwide economic, social, and technological change provides many
investment opportunities at favorable valuations for our Fund.
FUND INVESTMENT
The minimum initial investment for a Regular account is $1,000 and $500 for an
IRA or Gift to Minor account. Subsequent investment minimums are $100 for
Regular and IRA accounts and $50 for a Gift to Minor account. Equity markets
are inherently volatile and investors are encouraged to invest over time. An
Automatic Investment Plan, with initial and subsequent investment minimums of
$50 per month, is available upon request to facilitate regular investment.
The Fund's net asset value is available each evening after 6:00 p.m. (EST) by
calling 1-800-BRAMCAP (1-800-272-6227). Please also call this number if you
need assistance or additional information.
Sincerely,
/s/ Elizabeth R. Bramwell
Elizabeth R. Bramwell, CFA
President and Chief Investment Officer
April 19, 1996
The outlook and opinions expressed above represent the views of the investment
adviser as of April 19, 1996 and are subject to change as market and economic
events unfold.
PORTFOLIO OF INVESTMENTS - MARCH 31, 1996 (UNAUDITED)
SHARES VALUE
------ -----
COMMON STOCKS - 95.18%
APPAREL - 1.67%
Cutter & Buck, Inc.<F4> 25,000 $ 250,000
Oakley, Inc.<F4> 23,000 868,250
Sola International, Inc.<F4> 40,000 1,245,000
------------
2,363,250
AUTOMOTIVE & HEAVY EQUIPMENT - 2.60%
Case Corporation 29,000 1,475,375
Deere & Company 38,000 1,586,500
General Motors Corporation, Class H 10,000 632,500
------------
3,694,375
COMMUNICATIONS - 2.35%
Cisco Systems, Inc.<F4> 15,000 695,625
Infinity Broadcasting Corporation<F4> 10,800 468,450
U.S. Satellite Broadcasting Co.<F4> 10,000 327,500
WorldCom, Inc.<F4> 40,000 1,840,000
------------
3,331,575
ENTERTAINMENT - 4.00%
Cinar Films, Inc., Class B<F4> 30,000 435,000
Gaylord Entertainment Company 55,750 1,505,250
Pixar, Inc.<F4> 25,500 567,375
Regal Cinemas, Inc.<F4> 85,500 3,163,500
------------
5,671,125
FINANCIAL SERVICES - 7.59%
Charles Schwab Corporation (The) 45,000 1,153,125
Collective Bancorp, Inc. 40,000 1,010,000
Dow Jones & Company, Inc. 45,000 1,732,500
J.P. Morgan & Company, Inc. 20,000 1,660,000
MSB Bancorp, Inc. 17,000 297,500
Northern Trust Company 30,000 1,620,000
Norwest Corporation 45,000 1,653,750
Washington Mutual, Inc. 55,000 1,636,250
------------
10,763,125
FOOD & BEVERAGE - 3.15%
CPC International, Inc. 40,700 2,823,562
Hershey Foods Corporation 22,000 1,639,000
------------
4,462,562
HEALTH CARE PRODUCTS - 7.39%
Astra AB, Class B - ADR 40,000 1,840,000
Ballard Medical Products 57,900 1,042,200
Johnson & Johnson 35,100 3,237,975
Merck & Company, Inc. 50,000 3,112,500
Roche Holding, Ltd. - ADR 15,000 1,244,850
------------
10,477,525
HOUSEHOLD PRODUCTS &
FURNISHINGS - 3.84%
Gillette Company (The) 14,000 724,500
International Flavors & Fragrances 40,100 1,919,788
Procter & Gamble Company 33,000 2,796,750
------------
5,441,038
INDUSTRIAL PRODUCTS - 11.85%
AVX Corp.<F4> 115,000 2,515,625
C.P. Clare Corporation<F4> 40,000 780,000
Emerson Electric Company 20,900 1,687,675
General Electric Company 35,000 2,725,625
Illinois Tool Works, Inc. 40,000 2,585,000
KEMET Corporation<F4> 35,000 $ 791,875
Kennametal, Inc. 35,400 1,278,825
Kent Electronics Corporation<F4> 20,000 707,500
Methode Electronics, Inc. - A 52,500 853,125
Molex Inc., Class A 75,687 2,421,984
X-Rite, Inc. 30,000 450,000
------------
16,797,234
INFORMATION PROCESSING:
OFFICE EQUIPMENT - 0.99%
Hewlett-Packard Company 15,000 1,410,000
INFORMATION PROCESSING:
SERVICES - 6.33%
Automatic Data Processing, Inc. 55,000 2,165,625
Continuum Company, Inc.<F4> 20,000 832,500
DST Systems, Inc.<F4> 18,000 551,250
First Data Corporation 25,929 1,827,995
General Motors Corp., Class E 63,000 3,591,000
------------
8,968,370
INFORMATION PROCESSING:
SOFTWARE - 1.54%
Informix Corporation<F4> 10,000 263,750
Microsoft Corporation<F4> 5,000 515,625
Oracle Corporation<F4> 10,000 471,250
SAP AG-ADR 20,000 936,400
------------
2,187,025
INSURANCE - 8.45%
Allstate Corporation 111,000 4,675,875
American International Group, Inc. 27,000 2,527,875
Berkley (W.R.) Corporation 30,000 1,387,500
Chubb Corporation 25,000 2,346,875
Horace Mann Educators Corporation 34,000 1,037,000
------------
11,975,125
LODGING - 1.94%
Micros Systems, Inc.<F4> 32,500 812,500
Red Lion Hotels, Inc.<F4> 100,000 1,937,500
------------
2,750,000
METALS - 0.65%
OM Group, Inc. 25,000 928,125
PACKAGING - 1.07%
Sealed Air Corporation<F4> 15,000 511,875
Sonoco Products Company 36,750 1,001,438
------------
1,513,313
RESTAURANTS - 1.16%
Lone Star Steakhouse & Saloon, Inc.<F4> 43,000 1,644,750
RETAILING - 14.98%
Albertsons, Inc. 55,300 2,053,012
Eckerd Corporation<F4> 115,000 5,534,375
Home Depot, Inc. (The) 30,000 1,436,250
Just For Feet, Inc.<F4> 45,000 1,873,125
Kohl's Corporation<F4> 25,000 1,584,375
Lowe's Companies, Inc. 10,000 357,500
OfficeMax, Inc.<F4> 30,000 727,500
Staples, Inc.<F4> 60,000 1,222,500
Sunglass Hut International 35,000 1,159,375
Tiffany & Co. 18,400 1,044,200
Walgreen Company 130,000 4,241,250
------------
21,233,462
SERVICES: TEMPORARY HELP - 3.39%
Interim Services, Inc.<F4> 45,000 1,721,250
On Assignment, Inc.<F4> 30,000 1,140,000
Robert Half International, Inc.<F4> 40,000 1,945,000
------------
4,806,250
TECHNOLOGY:
SEMICONDUCTORS & EQUIPMENT - 3.21%
Applied Materials, Inc.<F4> 55,000 1,918,125
Fusion Systems Corporation<F4> 30,000 757,500
Lam Research Corporation<F4> 20,000 700,000
Tencor Instruments<F4> 65,000 1,170,000
------------
4,545,625
TECHNOLOGY: OTHER - 4.28%
Loral Corporation 30,000 1,470,000
Thermo Electron Corporation<F4> 58,650 3,489,675
ThermoLase Corporation<F4> 25,000 606,250
ThermoQuest Corporation<F4> 8,000 136,000
Waters Corporation<F4> 14,900 361,325
------------
6,063,250
TRANSPORTATION - 2.75%
Bombardier, Inc., Class B 90,000 1,329,480
Kansas City Southern Industries, Inc. 55,400 2,576,100
------------
3,905,580
TOTAL COMMON STOCKS
(Cost $116,550,010) 134,932,684
------------
PRINCIPAL
AMOUNT VALUE
------ -----
CONVERTIBLE BONDS - 0.39%
Starbucks Corporation
4.25%, Due 11/1/02 $ 500,000 $ 550,625
------------
TOTAL CONVERTIBLE BONDS
(Cost $483,893) 550,625
------------
VARIABLE RATE DEMAND NOTES - 3.30%
Pitney Bowes, Inc. 329,000 329,000
Sara Lee Corporation 3,223,000 3,223,000
Wisconsin Electric Power Co. 1,119,000 1,119,000
------------
TOTAL VARIABLE RATE DEMAND NOTES
(Cost $4,671,000) 4,671,000
------------
TOTAL INVESTMENTS - 98.87%
(Cost $121,704,903) 140,154,309
CASH AND OTHER ASSETS,
LESS LIABILITIES - 1.13% 1,607,214
------------
NET ASSETS - 100.00%
(10,007,875 SHARES OUTSTANDING) $141,761,523
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE $14.16
======
<F4> Non-income producing
THE BRAMWELL GROWTH FUND QUARTERLY REPORT - MARCH 1996
TOP TEN INDUSTRY SECTORS
MARCH 31, 1996
--------------
Retailing 15.0% Technology 7.5%
Industrial Products 11.9 Healthcare 7.4
Information Processing 8.9 Entertainment 4.0
Insurance 8.5 Household Products & Furnishings 3.8
Financial Services 7.6 Services & Temporary Help 3.4
TOP TEN EQUITY HOLDINGS
MARCH 31, 1996
--------------
Eckerd 3.9% Johnson & Johnson 2.3%
Allstate 3.3 Regal Cinemas 2.2
Walgreen 3.0 Merck 2.2
General Motors E 2.5 CPC International 2.0
Thermo Electron 2.5 Procter & Gamble 2.0
THE BRAMWELL GROWTH FUND
745 Fifth Avenue
New York, New York 10151
1-800-BRAMCAP
(1-800-272-6227)
BOARD OF DIRECTORS
------------------
ELIZABETH R. BRAMWELL, CFA
President, Chief Investment and Financial Officer
The Bramwell Funds, Inc.
J. SINCLAIR ARMSTRONG
Counsel
Whitman Breed Abbott & Morgan
Former Commissioner and Chairman
Securities and Exchange Commission
ISABEL H. BENHAM
President, Board of Trustees
John W. Barringer III National Railroad Library
GEORGE F. KEANE
President Emeritus and Senior Investment Adviser
The Common Fund, Inc.
JAMES C. SARGENT
Counsel
Opton, Handler, Gottlieb, Feiler, Landau & Hirsch
Former Commissioner
Securities and Exchange Commission
MARTHA R. SEGER, PH.D.
Chairman
Martha Seger & Associates
Former Governor
Federal Reserve Board
OFFICERS
--------
ELIZABETH R. BRAMWELL, CFA
President, Chief Investment and Financial Officer
MARY F. MCCOLLUM
Secretary and Treasurer
MARGARET A. BANCROFT
Assistant Secretary
INVESTMENT ADVISER
Bramwell Capital Management, Inc.
ADMINISTRATOR
Sunstone Financial Group, Inc.
COUNSEL
Dechert Price & Rhoads
INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
Coopers & Lybrand LLP
CUSTODIAN, TRANSFER AGENT
AND DIVIDEND DISBURSING AGENT
Firstar Trust Company
This financial statement is submitted for the general information of the
shareholders of The Bramwell Growth Fund. It is not authorized for distribution
to prospective investors unless preceded or accompanied by an effective
prospectus.
