UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-03287
NEW ALTERNATIVES FUND, INC.
150 BROADHOLLOW ROAD, SUITE 306
MELVILLE, NEW YORK 11747
DAVID J. SCHOENWALD, PRESIDENT
NEW ALTERNATIVES FUND, INC.
150 BROADHOLLOW ROAD, SUITE 306
MELVILLE, NEW YORK 11747
Registrant's telephone number, including area code: 631-423-7373
Date of fiscal year end: December 31, 2005
Date of reporting period: June 30, 2005
Form N-CSR is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form
N-CSR, and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
================================================================================
Item 1. Reports to Stockholders.
The Semiannual Financial Report (06/30/05) is attached herewith.
SEMIANNUAL
FINANCIAL REPORT
JUNE 30, 2005
NEW ALTERNATIVES FUND, INC.
FINANCIAL HIGHLIGHTS
STATEMENT OF PER SHARE INCOME AND CAPITAL CHANGES
For each share of capital stock outstanding*
<TABLE>
(Unaudited)
Six Months Year Year Year Year Year Year Year
Ended End End End End End End End
6/30 12/31 12/31 12/31 12/31 12/31 12/31 12/31
2005 2004 2003 2002 2001 2000 1999 1998
NET ASSET VALUE AT BEGINNING
OF PERIOD $ 33.48 $ 29.69 $24.21 $34.71 $41.29 $28.85 $28.54 $32.07
-------- -------- ------- ------- ------- ------- ------- -------
Investment income $ 0.34 $ 0.59 $0.58 $0.62 $0.75 $0.79 $0.66 $0.52
Expenses (0.20) (0.42) (0.37) (0.37) (0.43) (0.42) (0.38) (0.37)
------ ------ ------ ------ ------ ------ ------ ------
Net investment income 0.14 0.17 0.21 0.25 0.32 0.37 0.28 0.15
Net realized & unrealized
gain (loss) on investments 1.78 3.79 5.48 (10.50) (5.45) 14.56 2.14 (3.22)
----- ----- ----- ------- ------ ------ ----- ------
Total from investment operations 1.92 3.96 5.69 (10.25) (5.13) 14.93 2.42 (3.07)
Distributions from net
investment income (0.00) (0.17) (0.21) (0.25) (0.32) (0.37) (0.28) (0.15)
Distributions from net
realized gain (0.00) (0.00) (0.00) (0.00) (1.13) (2.12) (1.83) (0.16)
------ ------ ------ ------ ------ ------ ------ ------
Total distributions 0.00 (0.17) (0.21) (0.25) (1.45) (2.49) (2.11) (0.31)
Net change in net asset value 1.92 3.79 5.48 (10.50) (6.58) 12.44 0.31 (3.53)
----- ----- ----- ------- ------ ------ ----- ------
Net asset value as of end
of the period $ 35.40 $ 33.48 $29.69 $24.21 $34.71 $41.29 $28.85 $28.54
======== ======== ======= ======= ======= ======= ======= =======
Total return
(Sales load not reflected) 5.73% 13.34% 23.5% -29.5% -12.4% 51.7% 8.5% -10.0%
Net assets, end of period
(in thousands) $58,057 $52,615 $44,901 $36,723 $49,245 $52,773 $32,555 $33,021
Ratio of operating expense
to net assets** 1.18% 1.32% 1.39% 1.32% 1.14% 1.11% 1.13% 1.18%
Ratio of net investment income
to average net assets** 0.76% 0.65% 0.82% 0.89% 0.87% 1.01% 0.89% 0.49%
Portfolio turnover** 38.58% 50.05% 32.7% 32.6% 29.3% 59.7% 87.3% 32.4%
Number of shares
outstanding at end of period*** 1,640,171 1,565,049 1,512,199 1,516,709 1,368,171 1,211,783 1,058,230 1,156,952
Year Year Year Year Year Year First
End End End End End End Seven
12/31 12/31 12/31 12/31 12/31 12/31 Months
1997 1996 1995 1994 1993 1992 04/30/83
****
NET ASSET VALUE AT BEGINNING
OF PERIOD $30.87 $30.51 $28.14 $30.00 $29.95 $29.19 $12.50
------- ------- ------- ------- ------- ------- ------
Investment income $0.64 $0.73 $0.75 $0.72 $0.62 $0.62 $ 0.38
Expenses (0.38) (0.39) (0.40) (0.40) (0.33) (0.28) (0.20)
------ ------ ------ ------ ------ ------ ------
Net investment income 0.26 0.34 0.35 0.32 0.29 0.34 0.18
Net realized & unrealized
gain (loss) on investments 3.16 3.72 5.14 (1.43) 0.58 1.10 3.08
----- ----- ----- ------ ----- ----- ----
Total from investment operations 3.42 4.06 5.49 (1.11) 0.87 1.44 3.26
Distributions from net
investment income (0.26) (0.34) (0.35) (0.32) (0.29) (0.34) (0.18)
Distributions from net
realized gain (1.96) (3.36) (2.77) (0.43) (0.53) (0.34) (0.19)
------ ------ ------ ------ ------ ------ ------
Total distributions (2.22) (3.70) (3.12) (0.75) (0.82) (0.68) (0.37)
Net change in net asset value 1.20 0.36 2.37 (1.86) 0.05 0.76 2.89
----- ----- ----- ------ ----- ----- ----
Net asset value as of end
of the period $32.07 $30.87 $30.51 $28.14 $30.00 $29.95 $15.39
======= ======= ======= ======= ======= ======= ======
Total return
(Sales load not reflected) 11.1% 13.3% 19.5% -3.7% 2.9% 4.9% 10.4%
Net assets, end of period
(in thousands) $37,941 $35,549 $32,236 $28,368 $31,567 $28,896 $163
Ratio of operating expense
to net assets** 1.15% 1.21% 1.28% 1.30% 1.11% 1.04% 1.08%
Ratio of net investment income
to average net assets** 0.79% 1.04% 1.12% 1.04% 0.96% 1.25% 1.69%
Portfolio turnover** 53.9% 51.2% 48.72% 33.0% 18.36% 13.1% 74.5%
Number of shares
outstanding at end of period*** 1,111,377 1,038,561 965,769 984,847 1,026,460 945,006 10,592
</TABLE>
* All adjusted for two for one share split on July 26, 1985 and January 2,
1990
** Annualized (includes state taxes, does not include foreign currency
translations)
*** Shares immediately prior to dividend - Fund commenced operation on
September 3, 1982
**** At this time the Fund was on a fiscal year. Table for 1983-1990 is
available on request. Deleted to make space.
The accompanying notes are an integral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
SCHEDULE OF INVESTMENTS
JUNE 30, 2005
COMMON STOCKS: 84.49%
SHARES MARKET VALUE
ALTERNATE ENERGY AS A GROUP: 32.97%
ALTERNATE ENERGY (WIND & HYDRO POWER 3.38%
PRODUCERS & WAVES:)
***Canadian Hydro Development (Canada) 300,000 977,302
Idacorp Inc. 10,000 306,300
***Renewable Energy Holdings PLC 10,000 9,231
**Trust Power Ltd. (New Zealand) 150,000 625,178
----------
1,918,011
----------
ALTERNATE ENERGY (FUEL CELL): 1.92%
*FuelCell Energy, Inc. 100,000 1,021,000
***ITM Power PLC (United Kingdom) 30,000 52,698
*Medis Technologies Ltd. 1,000 16,600
----------
1,090,298
----------
ALTERNATE ENERGY (SOLAR CELL): 8.72%
***ATS Automation (Canada) 70,000 965,872
***Conergy AG 5,000 487,288
*Evergreen Solar 1,000 6,430
Kyocera Corp. (ADR) (Japan) 25,000 1,917,500
Sharp Corp. Ltd. (ADR) (Japan) 100,000 1,564,840
----------
4,941,930
----------
ALTERNATE ENERGY (WIND TURBINES/WIND 10.04%
PROJECTS):
**Acciona (Spain) 25,000 2,481,840
**Gamesa Corporation Techologica (Spain) 175,000 2,375,000
**Vestas Wind Systems (Denmark) 50,000 830,585
----------
5,687,425
----------
ALTERNATE ENERGY (BIOMASS): 4.10%
**Abengoa (Spain) 200,000 2,324,455
----------
2,324,455
----------
ALTERNATE ENERGY (GEOTHERMAL): 2.70%
Ormat Technologie 80,000 1,528,000
----------
1,528,000
----------
ALTERNATE ENERGY RELATED (BATTERIES FOR 2.10%
HYBRID AUTOMOBILES):
Matsushita Electric (ADR) (Japan) 70,000 1,062,600
Sanyo Electric (ADR) (Japan) 10,000 130,100
----------
1,192,700
----------
The accompanying notes are an intergral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2005
SHARES MARKET VALUE
INDUSTRIAL CATALYSTS (FUEL CELLS
& CLEAN AIR): 3.11%
Engelhard Corp. 35,000 999,250
**Johnson Matthey (United Kingdom) 40,000 765,012
----------
1,764,262
----------
WATER: 6.12%
Aqua America 10,000 297,400
Badger Meter 45,000 1,858,500
***Zenon Environmental Inc. (Canada) 65,000 1,311,888
----------
3,467,788
----------
ENERGY CONSERVATION: 10.38%
Asahi Glass Company 5,000 526,126
Baldor Electric 70,000 1,702,400
*Cree, Inc. 25,000 636,750
*Intermagnetics General Corp. 20,000 615,200
*International Rectifier 25,000 1,193,000
Linear Technology Corp. 30,000 1,100,700
***RailPower Technologies Corp. (Canada) 25,000 110,222
----------
5,884,398
----------
NATURAL FOODS: 3.25%
*SunOpta, Inc. (Canada) 100,000 568,000
*United Natural Foods 40,000 1,214,800
*Wild Oats Markets 5,000 57,250
----------
1,840,050
----------
RECYCLING: 1.30%
*Caraustar Industries 5,000 52,500
Commercial Metals 15,000 357,300
*Kadant, Inc. 15,000 328,950
----------
738,750
----------
NATURAL GAS DISTRIBUTION: 24.07%
Atmos Energy Corp. 40,000 1,152,000
Equitable Resources 20,000 1,360,000
KeySpan Corp. 50,000 2,035,000
New Jersey Resources 45,000 2,171,250
Piedmont Natural Gas 60,000 1,441,200
South Jersey Industries 35,000 2,139,200
The Laclede Group 50,000 1,588,000
Northwest Natural Gas 15,000 573,600
WGL Holdings 35,000 1,177,400
-----------
13,637,650
-----------
OTHER (INDUSTRIAL GASES INCLUDING
HYDROGEN): 3.29%
- ----------
Praxair Inc. 40,000 1,864,000
------------
TOTAL COMMON STOCK (COST $39,123,800) $ 47,879,717
============
The accompanying notes are an intergral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2005
<TABLE>
CERTIFICATES OF DEPOSITS AND
U.S. TREASURY BILLS: 15.51%
SOCIALLY CONCERNED BANKS
Alternatives Federal Credit Union
Certificate of Deposit maturity 07/31/05 0.50% $ 100,000
Chittenden Bank
Certificate of Deposit maturity 12/03/05 2.00% 100,000
Community Capital Bank
Certificate of Deposit maturity 07/01/05 1.00% 100,000
Self-Help Credit Union
Certificate of Deposit maturity 08/10/05 3.20% 100,000
South Shore Bank
Certificate of Deposit maturity 07/25/05 2.60% 100,000
U.S. Treasury Bills (at various yields maturing at various dates in
July & August, 2005 maturity value $8,300,000) (Cost $8,278,695) 8,287,171
---------
TOTAL MARKET DEPOSITS AND TREASURY BILLS $ 8,787,171
===========
Total Common Stock (84.49%) $ 47,879,717
Bank Money Market and U.S. Treasury Bills (15.51%) 8,787,171
---------
TOTAL INVESTMENTS (100%) $ 56,666,888
============
</TABLE>
* Securities for which no cash dividends were paid during the fiscal year.
** Foreign Exchange Securities traded on a foreign exchange.
*** Foreign Exchange Securities traded on a foreign exchange with no cash
dividend.
The accompanying notes are an intergral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005
ASSETS
<TABLE>
Investment securities at fair value (cost: $39,123,800) (notes 2A and 5)........ $ 47,879,717
U.S. Treasury Bills at fair value............................................... 8,287,171
Cash, Savings and Certificates of Deposit....................................... 500,000
Cash............................................................................ 247,342
Receivables: Dividends......................................................... 103,765
Interest.......................................................... 667
Subscriptions..................................................... 86,062
Investment Security Tendered...................................... 1,155,557
Prepaid Insurance & Filing Fees................................................. 18,991
------------
TOTAL ASSETS 58,279,272
------------
LIABILITIES
Payables:
Investment securities purchased................................................. 142,850
Capital stock reacquired........................................................ 21,847
Advisory fee.................................................................... 31,613
Other accounts payable and accruals............................................. 26,446
------------
TOTAL LIABILITIES............................................................... 222,756
------------
NET ASSETS $ 58,056,516
- ---------- ============
ANALYSIS OF NET ASSETS
Net capital paid in shares of capital stock..................................... $48,681,841
------------
Undistributed net investment income............................................. 217,678
Accumulated net realized gain on investments.................................... 401,432
Net unrealized gain on investments 8,755,565
------------
Distributable earnings.......................................................... 9,374,675
------------
NET ASSETS (equivalent to $35.40 per share based on 1,640,170.880
shares of capital stock outstanding) $ 58,056,516
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDING JUNE 30, 2005
<TABLE>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $17,352)......................... $ 475,638
Interest........................................................................ 78,274
Total Income.................................................................... 553,912
-----------
EXPENSES:
Management fee (note 4)......................................................... 182,182
Custodian fees: PFPC Trust...................................................... 20,670
Other........................................................................... 58
Auditor......................................................................... 10,644
Directors....................................................................... 3,224
Filing fees..................................................................... 5,539
Postage and printing............................................................ 5,669
Bond and insurance.............................................................. 1,609
Transfer Agent-PFPC, Inc........................................................ 31,950
Accounting/Pricing-PFPC, Inc.................................................... 27,065
Shareholder service costs....................................................... 47,700
-----------
Total Expenses.................................................................. 336,310
-----------
NET INVESTMENT INCOME........................................................... 217,602
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
REALIZED GAIN ON INVESTMENTS (NOTES 2B & 5)
Proceeds from sales............................................................. 10,601,464
Cost of securities sold......................................................... (8,564,881)
Foreign currency transactions gains (loss)...................................... (9,452)
-----------
Net Realized Gain/Loss.......................................................... 2,027,131
-----------
UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS
Beginning of period............................................................. 7,866,325
End of period................................................................... 8,755,565
Foreign currency translations................................................... (352)
-----------
Total Unrealized Appreciation (Depreciation) For The Period..................... 888,888
-----------
Net Realized and Unrealized Gain (Loss) On Investments.......................... 2,916,019
-----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................ $ 3,133,621
===========
</TABLE>
The accompanying notes are an intergral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 2005
AND YEAR ENDED DECEMBER 31, 2004
2005 2004
FROM INVESTMENT ACTIVITIES:
Net investment income $ 217,602 $ 306,344
Net realized gain (loss) from security transactions
and foreign currency transactions 2,027,131 4,849,702
Unrealized appreciation of investments 888,888 975,714
-------- -------
Increase in net assets derived from
investment activities 3,133,621 6,131,760
---------- ---------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income dividends to shareholders 0 (258,444)
Distributions (capital gain) to shareholders 0 0
FROM CAPITAL SHARE TRANSACTIONS:
Net increase from
capital transactions (note 3) 2,307,661 1,840,778
---------- ---------
INCREASE IN NET ASSETS: 5,441,282 7,714,094
NET ASSETS AT:
Beginning of the period 52,615,234 44,901,140
----------- ----------
END OF THE PERIOD $ 58,056,516 $ 52,615,234
============ ============
The accompanying notes are an integral part of these financial statements.
NEW ALTERNATIVES FUND, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2005
1) ORGANIZATION - The New Alternatives Fund, Inc. is registered as an open-end
investment company under the Investment Company Act of 1940, as amended. The
Fund commenced operations September 3, 1982. The investment objective of the
Fund is to seek long-term capital gains by investing in common stocks that
provide a contribution to a clean and sustainable environment.
2) ACCOUNTING POLICIES - The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of these financial
statements. The policies are in conformity with generally accepted accounting
principles:
A. SECURITY VALUATION - Listed U.S. investments are stated at the last
reported sale price at the closing of a national securities stock
exchange and the NASD National Market System on June 30, 2005 and at
the mean between the bid and asked price on the over the counter
market if not traded on the day of valuation. Company shares traded on
foreign markets are stated at their foreign reported value at 4:00 PM
EST-as trading in some foreign markets does not coincide with trading
on U.S. markets. Portfolio securities for which there are no such
quotations or valuations are determined in good faith by or at the
direction of the Fund's Board of Directors.
B. FOREIGN CURRENCY - Investment securities and other assets and
liabilities denominated in foreign currencies are translated into U.S.
dollar amounts at the date of valuation. Purchases and sales of
investment securities and income and expense items denominated in
foreign currencies are translated into U.S. dollar amounts on the
respective dates of such transactions.
The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from
the fluctuations arising from changes in market prices of securities
held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from
sales of foreign currencies, currency gains or losses realized between
the trade and settlement dates on securities transactions, and the
difference between the amounts of dividends, interest, and foreign
withholding taxes recorded on the Fund's books and the U.S. dollar
equivalent of the amounts actually received or paid.
C. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security
transactions are accounted for on the trade date (date order to buy or
sell is executed). Realized gains and losses from security
transactions are reported on a first in, first out basis if not traded
on the day of valuation. Short-term notes are stated at amortized cost
which approximates fair value.
D. INVESTMENT INCOME AND EXPENSE RECOGNITION - Dividend income is
recorded as of the ex-dividend date. Certificates of Deposit interest
income is accrued daily. Expenses are accrued on a daily basis.
E. FEDERAL INCOME TAXES - No provision for federal income tax is
believed necessary since the Fund distributes all of its taxable
income to comply with the provisions of the Internal Revenue Code
applicable to investment companies. The aggregate cost of the
securities (common stocks) owned by the Fund on June 30, 2005 for
federal tax purposes is $39,123,800.
NEW ALTERNATIVES FUND, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2005
F. USE OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect 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.
3) CAPITAL STOCK - There are 8,000,000 shares of $1.00 par value capital stock
authorized. On June 30, 2005, there were 1,640,170.880 shares outstanding.
Aggregate paid in capital including reinvestment of dividends was $48,681,841.
Transactions in capital stock were as follows:
<TABLE>
Six Months Ending 06/30/05 Year End 12/31/04
-------------------------- -----------------
Shares Amount Shares Amount
Capital stock sold 108,431.350 $3,648,196 128,552.699 $3,961,831
Capital stock issued - - - -
Reinvestment of dividends 4.169 140 6,524.850 218,451
Redemptions (39,910.960) (1,340,675) (75,622.199) (2,339,504)
----------- ---------- ----------- ----------
Net Increase (Decrease) 68,524.559 $2,307,661 59,455.350 $1,840,778)
========== ========== =========== ==========
</TABLE>
4) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES - Pursuant to
agreements, Accrued Equities, Inc. serves as investment advisor to the Fund. The
Fund pays to Accrued Equities, Inc. an annual management fee of 1.00% of the
first $10 million of average net assets; 0.75% of the next $20 million; 0.50% of
net assets over $30 million and 0.45% of assets over $100 million. If the net
annual expenses of the Fund (other than interest, taxes, brokerage commissions,
extraordinary expenses) exceed the most restrictive limitation imposed by any
state in which the Fund has registered its securities for sale, Accrued
Equities, Inc. reduces its management fee by the amount of such excess expenses.
The annualized expense ratio for the six months ended June 30, 2005 was 1.18%.
The Fund pays no remuneration to its officers, David Schoenwald and Maurice
Schoenwald, who are also Directors. They are also officers of Accrued Equities,
Inc. Accrued Equities, Inc. is the principal underwriter for the Fund. There is
a commission of 4.75% on most new sales. The commission is shared with other
brokers who actually sell new shares. Their share of the commission may vary.
The Fund paid Accrued Equities, Inc. a total of $26,575 in underwriting fees for
the six months ended June 30, 2005. The Fund also paid Accrued Equities, Inc.
$57,189 in commissions for the six months ended June 30, 2005.
5) PURCHASES AND SALES OF SECURITIES - For the six month period ended June 30,
2005, the aggregate cost of securities purchased totaled $8,961,646. Net
realized gains (loss) were computed on a first in, first out basis. The amount
realized on sales of securities for the six months ending June 30, 2005 was
$10,601,464.
6) DIRECTORS FEES - The amount charged (accrued) for the six months period
ending June 30, 2005 for Directors compensation was $3,896. Only non-interested
Directors are compensated. A non-interested Director is not part of the
management of the Fund. Each non-interested Director receives $500 of
compensation, or $1,000 for members of the Audit Committee, and may also receive
payment for travel costs to Directors meetings. There was no additional
compensation paid to any Director for board service other than that stated. See
Note 4 for compensation regarding interested Directors.
7) PROXY VOTING - The Fund has proxy voting policies which are available,
without charge, upon request by calling the Fund at 800-423-8383. Proxy votes of
the Fund are available by calling the Fund.
