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, 2006
Date of reporting period: June 30, 2006
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, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
The Report to Shareholders is attached herewith.
New Alternatives Fund, Inc. A SOCIALLY RESPONSIBLE MUTUAL FUND EMPHASIZING ALTERNATIVE ENERGY AND THE ENVIRONMENT |
SEMI-ANNUAL FINANCIAL REPORT
(Unaudited)
JUNE 30, 2006
This report is submitted for the general information of the shareholders of the Fund. It is not authorized for distribution unless preceded or accompanied by a prospectus for the Fund.
THE FUND→ | 150 Broadhollow Road | Melville, New York 11747 | (800) 423-8383 | (631) 423-7373 |
Shareholder’s Services (PFPC)→ | 101 Sabina Street | Pawtucket, RI 02860 | (800) 441-6580 | (610) 382-7819 |
Recycled Paper |
NEW ALTERNATIVES FUND, INC.
FINANCIAL HIGHLIGHTS
STATEMENT OF PER SHARE INCOME AND CAPITAL CHANGES
For each share of capital stock outstanding*
(Unaudited) Six Months Ended 6/30 2006 | Year End 12/31 2005 | Year End 12/31 2004 | Year End 12/31 2003 | Year End 12/31 2002 | Year End 12/31 2001 | Year End 12/31 2000 | Year End 12/31 1999 | Year End 12/31 1998 | Year End 12/31 1997 | Year End 12/31 1996 | ||||||||||||||||||||||||||||||||||
Net Asset Value at Beginning of Period | $ | 34.46 | $ | 33.48 | $ | 29.69 | $ | 24.21 | $ | 34.71 | $ | 41.29 | $ | 28.85 | $ | 28.54 | $ | 32.07 | $ | 30.87 | $ | 30.51 | ||||||||||||||||||||||
Investment income | $ | 0.46 | $ | 0.55 | $ | 0.59 | $ | 0.58 | $ | 0.62 | $ | 0.75 | $ | 0.79 | $ | 0.66 | $ | 0.52 | $ | 0.64 | $ | 0.73 | ||||||||||||||||||||||
Expenses | (0.26 | ) | (0.37 | ) | (0.42 | ) | (0.37 | ) | (0.37 | ) | (0.43 | ) | (0.42 | ) | (0.38 | ) | (0.37 | ) | (0.38 | ) | (0.39 | ) | ||||||||||||||||||||||
Net investment income | 0.20 | 0.18 | 0.17 | 0.21 | 0.25 | 0.32 | 0.37 | 0.28 | 0.15 | 0.26 | 0.34 | |||||||||||||||||||||||||||||||||
Net realized & unrealized gain (loss) on investments | 6.30 | 2.81 | 3.79 | 5.48 | (10.50 | ) | (5.45 | ) | 14.56 | 2.14 | (3.22 | ) | 3.16 | 3.72 | ||||||||||||||||||||||||||||||
Total from investment operations | 6.50 | 2.99 | 3.96 | 5.69 | (10.25 | ) | (5.13 | ) | 14.93 | 2.42 | (3.07 | ) | 3.42 | 4.06 | ||||||||||||||||||||||||||||||
Distributions from net investment income | - | (0.18 | ) | (0.17 | ) | (0.21 | ) | (0.25 | ) | (0.32 | ) | (0.37 | ) | (0.28 | ) | (0.15 | ) | (0.26 | ) | (0.34 | ) | |||||||||||||||||||||||
Distributions from net realized gain | - | (1.83 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | (1.13 | ) | (2.12 | ) | (1.83 | ) | (0.16 | ) | (1.96 | ) | (3.36 | ) | |||||||||||||||||||||||
Total distributions | - | (2.01 | ) | (0.17 | ) | (0.21 | ) | (0.25 | ) | (1.45 | ) | (2.49 | ) | (2.11 | ) | (0.31 | ) | (2.22 | ) | (3.70 | ) | |||||||||||||||||||||||
Net change in net asset value | 6.50 | 0.98 | 3.79 | 5.48 | (10.50 | ) | (6.58 | ) | 12.44 | 0.31 | (3.53 | ) | 1.20 | 0.36 | ||||||||||||||||||||||||||||||
Net asset value as of end of the period | $ | 40.96 | $ | 34.46 | $ | 33.48 | $ | 29.69 | $ | 24.21 | $ | 34.71 | $ | 41.29 | $ | 28.85 | $ | 28.54 | $ | 32.07 | $ | 30.87 | ||||||||||||||||||||||
Total return (Sales load not reflected) | 13.21 | % | 8.94 | % | 13.34 | % | 23.50 | % | -29.50 | % | -12.40 | % | 51.70 | % | 8.50 | % | -10.00 | % | 11.10 | % | 13.30 | % | ||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 91,758 | $ | 64,765 | $ | 52,615 | $ | 44,901 | $ | 36,723 | $ | 49,245 | $ | 52,773 | $ | 32,555 | $ | 33,021 | $ | 37,941 | $ | 35,549 | ||||||||||||||||||||||
Ratio of operating expense to net assets** | 1.17 | % | 1.28 | % | 1.32 | % | 1.39 | % | 1.32 | % | 1.14 | % | 1.11 | % | 1.13 | % | 1.18 | % | 1.15 | % | 1.21 | % | ||||||||||||||||||||||
Ratio of net investment income to average net assets** | 0.91 | % | 0.65 | % | 0.65 | % | 0.82 | % | 0.89 | % | 0.87 | % | 1.01 | % | 0.89 | % | 0.49 | % | 0.79 | % | 1.04 | % | ||||||||||||||||||||||
Portfolio turnover** | 51.48 | % | 52.09 | % | 50.05 | % | 32.70 | % | 32.60 | % | 29.30 | % | 59.70 | % | 87.30 | % | 32.40 | % | 53.90 | % | 51.20 | % | ||||||||||||||||||||||
Number of shares outstanding at end of period*** | 2,239,990 | 1,879,695 | 1,565,049 | 1,512,199 | 1,516,709 | 1,368,171 | 1,211,783 | 1,058,230 | 1,156,952 | 1,111,377 | 1,038,561 |
*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 |
The accompanying notes are an integral part of these financial statements.
FUND EXPENSE EXAMPLE (UNAUDITED)
As a mutual fund shareholder, you may incur two types of costs: (1) transaction costs such as sales loads and (2) ongoing costs, including management fees, and other fund expenses. The following example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the most recent six-month period and held for the entire period.
Actual Expenses: The first line of the following table (“Actual”) provides information about the actual account values and actual expenses. You may use the information in this line,together with your account balance, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes: The information on the second line of the table (“Hypothetical”) is based on hypothetical account values and expenses derived from the Fund’s actual expense ratio and an assumed 5% per year rate of return before expenses (not the Fund’s actual return). You may compare the ongoing costs of investing in the Fund with other funds by contrasting this 5% hypothetical example and the 5% hypothetical examples that appear in the shareholder reports of the other funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Note: The Fund’s Transfer Agent, PFPC Inc. charges an annual IRA maintenance fee of $12 for IRA accounts. That fee is not reflected in the accompanying tables.
You should also be aware that the expenses shown in the table highlight only your ongoing costs and do no reflect any transaction costs, such as fees or sales charges. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. To the extent a fund charges transaction costs, however, the total cost of owning that fund is higher.
NEW ALTERNATIVES FUND, INC.
Beginning Account Value | Ending Account Value | Expenses Paid During Period* | ||||||||||
1/1/06 | 6/30/06 | 1/1/06 to 6/30/06 | ||||||||||
Actual | $ | 1,000.00 | $ | 1,132.10 | $ | 6.19 | ||||||
Hypothetical (assumes 5% return before expenses) | $ | 1,000.00 | $ | 1,018.92 | $ | 5.86 |
* | Expenses are equal to the Fund’s annualized expense ratio for the six-month period (1.17%), multiplied by the average account value over the period, multiplied by the number of days (181) in the most recent fiscal half year, then divided by the days in the year (365) to reflect the half year period. A revised 12/31/05 Fund Expense Example is available on the Securities and Exchange Commission’s website at http://www.sec.gov and may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, DC. Information on the operation of the Securities and Exchange Commission’s Public Reference Room may be obtained by calling 1-800-SEC-0330. |
3
New Alternatives Fund, Inc.
Portfolio Holdings Summary
June 30, 2006 (Unaudited)
Sector Diversification | % of Net Assets | Market Value | ||||||
Alternate Energy (Biomass) | 5.16 | % | $ | 4,737,683 | ||||
Alternate Energy (Fuel Cell) | 0.41 | 374,942 | ||||||
Alternate Energy (Geothermal) | 4.62 | 4,242,120 | ||||||
Alternate Energy (Solar Cell) | 15.84 | 14,530,182 | ||||||
Alternate Energy (Wind & Hydro Power Producers & Waves) | 8.42 | 7,725,269 | ||||||
Alternate Energy (Wind Turbines/Wind Projects) | 11.94 | 10,961,103 | ||||||
Alternate Energy Related (Batteries for Hybrid Automobiles) | 5.13 | 4,707,700 | ||||||
Energy Conservation | 13.69 | 12,560,521 | ||||||
Natural Gas (Distribution) | 6.02 | 5,520,950 | ||||||
Natural Foods | 2.81 | 2,579,000 | ||||||
Other (Industrial Gases Including Hydrogen) | 0.59 | 540,000 | ||||||
Recycling | 0.77 | 709,884 | ||||||
Water | 4.29 | 3,933,392 | ||||||
Short-Term Investments | 19.57 | 17,956,580 | ||||||
Other Assets in Excess of Liabilities | 0.74 | 679,136 | ||||||
TOTAL | 100.00 | % | $ | 91,758,462 | ||||
Top Ten Common Stock Portfolio Holdings
As of June 30, 2006 (Unaudited)
Name | % of Net Assets | |||
Acciona | 4.65 | % | ||
Abengoa | 4.23 | |||
Gamesa Corporation | 4.20 | |||
Ormat Technologies | 4.16 | |||
Schneider Electric | 3.98 | |||
BrookField Asset Management | 3.54 | |||
Conergy AG | 3.27 | |||
Vestas Wind Systems | 2.98 | |||
South Jersey Industries, Inc | 2.69 | |||
Sharp Corp, Ltd. (ADR) | 2.59 | |||
Total of Top Ten | 36.29 | % | ||
4
NEW ALTERNATIVES FUND, INC.
SCHEDULE OF INVESTMENTS
June 30, 2006 (Unaudited)
COMMON STOCKS: 79.69% | ||||||||
Shares | Market Value | |||||||
Alternate Energy as a Group-51.52% | ||||||||
Alternate Energy (Wind & Hydro Power Producers & Waves)-8.42% | ||||||||
Brookfield Asset Management Inc., Class A (Canada) | 80,000 | $ | 3,249,600 | |||||
Canadian Hydro Developers, Inc. (Canada)* | 350,000 | 1,630,249 | ||||||
IDACORP, Inc. | 50,000 | 1,714,500 | ||||||
Ocean Power Technologies, Inc. (United Kingdom)* | 10,000 | 13,687 | ||||||
Renewable Energy Holdings PLC (United Kingdom)* | 50,000 | 34,217 | ||||||
TrustPower Ltd. (New Zealand) | 250,000 | 1,083,016 | ||||||
7,725,269 | ||||||||
Alternate Energy (Fuel Cell)-0.41% | ||||||||
FuelCell Energy, Inc.* | 25,000 | 239,500 | ||||||
ITM Power PLC (United Kingdom)* | 30,000 | 94,882 | ||||||
Medis Technologies Ltd.* | 2,000 | 40,560 | ||||||
374,942 | ||||||||
Alternate Energy (Solar Cell)-15.84% | ||||||||
Conergy AG (Germany) | 50,000 | 3,003,567 | ||||||
Ersol Solar Energy AG (Germany)* | 5,000 | 304,768 | ||||||
Kyocera Corp. (ADR) (Japan) | 25,000 | 1,943,750 | ||||||
MEMC Electronic Materials, Inc.* | 25,000 | 937,500 | ||||||
Phoenix SonnenStrom AG (Germany)* | 10,000 | 297,416 | ||||||
Q-Cells AG (Germany)* | 25,000 | 2,102,114 | ||||||
Renewable Energy Corp. AS (Norway)* | 75,000 | 1,072,703 | ||||||
Sharp Corp. Ltd. (ADR) (Japan) | 150,000 | 2,372,385 | ||||||
Solarworld AG (Germany) | 35,000 | 2,196,031 | ||||||
Suntech Power Holdings Co., Ltd. (ADR) (China)* | 3,000 | 84,750 | ||||||
Wacker Chemie AG (Germany)* | 2,000 | 215,198 | ||||||
14,530,182 | ||||||||
Alternate Energy (Wind Turbines/Wind Projects)-11.94% | ||||||||
Acciona (Spain) | 27,500 | 4,270,558 | ||||||
Gamesa Corporation Techologica (Spain) | 180,000 | 3,857,455 | ||||||
Tower Tech Holdings, Inc.* | 60,000 | 99,000 | ||||||
Vestas Wind Systems (Denmark) | 100,000 | 2,734,090 | ||||||
10,961,103 | ||||||||
Alternate Energy (Biomass)-5.16% | ||||||||
Abengoa (Spain) | 160,000 | 3,880,982 | ||||||
GEA Group AG (Germany) | 50,000 | 856,701 | ||||||
4,737,683 | ||||||||
The accompanying notes are an integral part of these financial statements.
5
NEW ALTERNATIVES FUND, INC.
SCHEDULE OF INVESTMENTS
June 30, 2006 (Unaudited)
Shares | Market Value | |||||||
Alternate Energy (Geothermal)-4.62% | ||||||||
Ormat Technologies, Inc. | 100,000 | $ | 3,815,000 | |||||
WFI Industries Ltd. (Canada) | 25,000 | 427,120 | ||||||
4,242,120 | ||||||||
Alternate Energy Related (Batteries/ | ||||||||
Components for Hybrid Automobiles)-5.13% | ||||||||
Aisin Seiki Co., Ltd. (Japan) | 50,000 | 1,487,119 | ||||||
Denso Corp. (Japan) | 50,000 | 1,635,831 | ||||||
Matsushita Electric Industrial Co., Ltd. (ADR) (Japan) | 75,000 | 1,584,750 | ||||||
4,707,700 | ||||||||
Water-4.29% | ||||||||
Aqua America, Inc. | 15,000 | 341,850 | ||||||
Badger Meter, Inc. | 80,000 | 2,160,000 | ||||||
Companhia de Saneamento (ADR) (Brazil) | 15,000 | 353,250 | ||||||
Kelda Group PLC (United Kingdom) | 50,000 | 707,918 | ||||||
Pennon Group PLC (United Kingdom) | 15,000 | 370,374 | ||||||
3,933,392 | ||||||||
Energy Conservation-13.69% | ||||||||
Asahi Glass Co., Ltd. (ADR) (Japan) | 12,000 | 1,523,160 | ||||||
Baldor Electric Co. | 50,000 | 1,564,500 | ||||||
Color Kinetics, Inc.* | 15,000 | 283,650 | ||||||
Compagnie de Saint-Gobain (France) | 20,000 | 1,429,539 | ||||||
Cree, Inc.* | 25,000 | 594,000 | ||||||
Itron Inc.* | 25,000 | 1,481,500 | ||||||
Koninklijke Phillips Electronics N.V. | 10,000 | 311,400 | ||||||
Linear Technology Corp. | 10,000 | 334,900 | ||||||
Schneider Electric SA (France) | 35,000 | 3,647,372 | ||||||
Stantec, Inc. (Canada)* | 40,000 | 756,000 | ||||||
Telvent GIT SA (Spain)* | 50,000 | 634,500 | ||||||
12,560,521 | ||||||||
Natural Foods-2.81% | ||||||||
SunOpta, Inc. (Canada)* | 100,000 | 928,000 | ||||||
United Natural Foods, Inc.* | 50,000 | 1,651,000 | ||||||
2,579,000 | ||||||||
Recycling-0.77% | ||||||||
Commercial Metals Co. | 10,000 | 257,000 | ||||||
Kadant, Inc.* | 10,000 | 230,000 | ||||||
Sims Group Ltd. (Australia) | 15,000 | 222,884 | ||||||
709,884 | ||||||||
The accompanying notes are an integral part of these financial statements.
6
NEW ALTERNATIVES FUND, INC.
SCHEDULE OF INVESTMENTS
June 30, 2006 (Unaudited)
Shares | Market Value | |||||||
Natural Gas Distribution-6.02% | ||||||||
Laclede Group, Inc., (The) | 30,000 | $ | 1,030,800 | |||||
Northwest Natural Gas Co. | 35,000 | 1,296,050 | ||||||
Piedmont Natural Gas Co., Inc. | 30,000 | 729,000 | ||||||
South Jersey Industries, Inc. | 90,000 | 2,465,100 | ||||||
5,520,950 | ||||||||
Other (Industrial Gases Including Hydrogen)-0.59% | ||||||||
Praxair, Inc. | 10,000 | 540,000 | ||||||
Total Common Stock (Cost $57,851,448) | 73,122,746 | |||||||
SHORT-TERM INVESTMENTS-19.57%
CERTIFICATES OF DEPOSIT-0.55% | Par | |||||||
Socially Concerned Banks | (000’s) | |||||||
Alternatives Federal Credit Union | ||||||||
Certificate of Deposit maturity 06/30/06 1.00% | $ | 100 | 100,000 | |||||
Community Capital Bank | ||||||||
Certificate of Deposit maturity 07/01/06 2.65% | 100 | 100,000 | ||||||
Self-Help Credit Union | ||||||||
Certificate of Deposit maturity 08/10/06 4.41% | 100 | 100,000 | ||||||
South Shore Bank | ||||||||
Certificate of Deposit maturity 07/27/06 4.00% | 100 | 100,000 | ||||||
Chittenden Bank | ||||||||
Certificate of Deposit maturity 12/03/06 2.32% | 100 | 100,000 | ||||||
Total Certificates of Deposit (Cost $500,000) | 500,000 | |||||||
The accompanying notes are an integral part of these financial statements.
7
NEW ALTERNATIVES FUND, INC.
SCHEDULE OF INVESTMENTS (concluded)
June 30, 2006 (Unaudited)
Par (000’s) | Market Value | |||||||
U.S. TREASURY BILLS-19.02% | ||||||||
4.60% due 07/06/06 | $ | 3,500 | $ | 3,497,764 | ||||
4.51% due 07/06/06 | 1,000 | 999,374 | ||||||
4.56% due 07/13/06 | 3,000 | 2,995,440 | ||||||
4.58% due 07/20/06 | 4,000 | 3,990,331 | ||||||
4.59% due 07/27/06 | 1,500 | 1,495,027 | ||||||
4.55% due 08/03/06 | 1,500 | 1,493,744 | ||||||
4.53% due 08/10/06 | 3,000 | 2,984,900 | ||||||
Total U. S. Treasury Bills (cost $17,456,580) | 17,456,580 | |||||||
Total Short-Term Investments (Cost $17,956,580) | $ | 17,956,580 | ||||||
TOTAL INVESTMENTS (99.26%) (Total Cost $75,808,028)** | $ | 91,079,326 | ||||||
Other Assets in Excess of Liabilities-0.74% | 679,136 | |||||||
Net Assets | $ | 91,758,462 | ||||||
*Non-income producing security. | ||||||||
**Aggregate cost for Federal income tax purposes is $75,854,593. | ||||||||
Aggregate unrealized appreciation | $ | 16,248,055 | ||||||
Aggregate unrealized depreciation | (1,023,322) | |||||||
Net aggregate unrealized appreciation | $ | 15,224,733 | ||||||
The accompanying notes are an integral part of these financial statements.
8
NEW ALTERNATIVES FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2006 (Unaudited)
ASSETS
Investment securities at fair value (cost: $57,851,448) (Notes 2A and 5) | $ | 73,122,746 | ||||||
U.S. Treasury Bills at cost | 17,456,580 | |||||||
Cash, Savings and Certificates of Deposit at cost | 500,000 | |||||||
Cash | 2,136,020 | |||||||
Receivables: | ||||||||
Capital Stock Subscribed | 865,456 | |||||||
Dividends | 133,910 | |||||||
Interest | 797 | |||||||
Prepaid Insurance & Registration Fees | 21,870 | |||||||
Total Assets | 94,237,379 | |||||||
LIABILITIES
Payables: | ||||||||
Investment securities purchased | 1,798,550 | |||||||
Capital stock reacquired | 588,070 | |||||||
Management fees | 44,254 | |||||||
Accrued expenses and other liabilities | 48,043 | |||||||
Total Liabilities | 2,478,917 | |||||||
Net Assets | $ | 91,758,462 | ||||||
ANALYSIS OF NET ASSETS
Net capital paid in shares of capital stock | $ | 72,182,177 | ||||||
Undistributed net investment income | 366,203 | |||||||
Accumulated net realized gain on investments | 3,960,670 | |||||||
Net unrealized depreciation of translation of other assets and liabilities in foreign currency | (21,886) | |||||||
Net unrealized gain on investments | 15,271,298 | |||||||
Distributable earnings | 19,576,285 | |||||||
Net Assets (equivalent to $40.96 per share based on 2,239,989.712 shares of capital stock outstanding) | $ | 91,758,462 | ||||||
The accompanying notes are an integral part of these financial statements.
9
NEW ALTERNATIVES FUND, INC.
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2006 (Unaudited)
Investment Income: | ||||||||
Dividends (net of foreign withholding taxes of $44,568) | $ | 478,033 | ||||||
Interest | 367,255 | |||||||
Total Income | 845,288 | |||||||
Expenses: | ||||||||
Management fees (Note 4) | 253,943 | |||||||
Administration and accounting fees | 70,460 | |||||||
Transfer agent fees | 69,955 | |||||||
Postage and printing fees | 28,700 | |||||||
Custodian fees | 20,996 | |||||||
Audit fees | 12,658 | |||||||
Registration fees | 8,018 | |||||||
Insurance fees | 4,976 | |||||||
Director fees | 4,098 | |||||||
Other expenses | 3,579 | |||||||
Total Expenses | 477,383 | |||||||
Net Investment Income | 367,905 | |||||||
Net Realized and Unrealized Gain from Investments: | ||||||||
Realized Gain from Investments (Notes 2B & 6): | ||||||||
Proceeds from sales | 16,307,844 | |||||||
Cost of Securities sold | (12,344,747) | |||||||
Foreign currency transactions gain (loss) | (11,350) | |||||||
Net Realized Gain | 3,951,747 | |||||||
Change in Unrealized Appreciation (Depreciation) of Investments: | ||||||||
End of period | 15,271,298 | |||||||
Less: Beginning of period | 7,508,312 | |||||||
Foreign currency translations | (21,886) | |||||||
Net Change in Unrealized Appreciation for the period | 7,741,100 | |||||||
Net Realized and Unrealized Gain (Loss) on Investments | 11,692,847 | |||||||
Net Increase in Net Assets Resulting from Operations | $ | 12,060,752 | ||||||
The accompanying notes are an integral part of these financial statements.
10
NEW ALTERNATIVES FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended June 30, 2006 (Unaudited)
and the Year Ended December 31, 2005
2006 | 2005 | |||||||
Investment Activities: | ||||||||
Net investment income | $ | 367,905 | $ | 374,663 | ||||
Net realized gain from investments and foreign currency translations | 3,951,747 | 4,852,138 | ||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency translations | 7,741,100 | (357,985) | ||||||
Net Increase in net assets derived from Operations | 12,060,752 | 4,868,816 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Dividends from net investment income | - | (321,926) | ||||||
Distributions from net realized capital gains | - | (3,272,042) | ||||||
Total Dividends and Distributions to Shareholders | - | (3,593,968) | ||||||
Capital Share Transactions: | ||||||||
Net increase from capital transactions (Note 3) | 14,932,442 | 10,875,186 | ||||||
Total Increase in Net Assets: | 26,993,194 | 12,150,034 | ||||||
Net Assets: | ||||||||
Beginning of the period | 64,765,268 | 52,615,234 | ||||||
End of the Period* | $ | 91,758,462 | $ | 64,765,268 | ||||
*Includes undistributed net investment income of $366,203 and $(1,702) for the six months ended 06/30/06 and for the year ended 12/31/05, respectively. |
The accompanying notes are an integral part of these financial statements.
11
NEW ALTERNATIVES FUND, INC.
NOTES TO FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2006 (Unaudited)
1) ORGANIZATION – The New Alternatives Fund, Inc. (the “Fund”) was incorporated under the laws of the State of New York on January 17, 1978 and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end investment company. 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 preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund.
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3) CAPITAL STOCK – There are 8,000,000 shares of $1.00 par value capital stock authorized. On June 30, 2006, there were 2,239,989.712 shares outstanding. Aggregate paid in capital including reinvestment of dividends was $72,182,177. Transactions in capital stock were as follows:
For the Six Months Ended 6/30/06 | For the Year Ended 12/31/05 | ||||||||
Shares | Amount | Shares | Amount | ||||||
Capital stock sold | 432,021.247 | $ | 17,779,624 | 292,902.649 | $ | 10,380,779 | |||
Capital stock issued | |||||||||
Reinvestment of dividends | 33.856 | 1,203 | 88,609.613 | 3,053,491 | |||||
Redemptions | (71,760.358) | (2,848,385) | (73,471.956) | (2,559,084) | |||||
Net Increase (Decrease) | 360,294.745 | $ | 14,932,442 | 308,040.306 | $ | 10,875,186 | |||
4) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES – Pursuant to agreements, Accrued Equities, Inc. serves as investment adviser to the Fund. The Fund pays 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, 2006 was 1.17%. 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. which, as of June 30, 2006, was the princ ipal 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 $121,714 in underwriting fees for the six months ended June 30, 2006. The Fund also paid Accrued Equities, Inc. $143,714 in commissions for the six months ended June 30, 2006. Effective July1, 2006, PFPC Distributors, Inc. became the principal underwriter of the Fund and Accrued Equities, Inc. became the sub-underwriter of the Fund.
5) DIRECTORS FEES – The amount charged for the six months ended June 30, 2006 for Directors compensation was $3,250. Only non-interested Directors are compensated. A non-interested Director is not part of the management of the Fund. Each non-interested Director receives $1,000 of compensation, or $1,500 for members of the Audit Committee, and may also receive payment for travel costs and for physical attendance to additional 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.
6) PURCHASES AND SALES OF SECURITIES – For the six months ended June 30, 2006, the aggregate cost of securities purchased totaled $27,449,329. Net realized gains (loss) were computed on a first in, first out basis. The amount realized on sales of securities for the six months ended June 30, 2006 was $17,166,429.
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7) FEDERAL INCOME TAX INFORMATION – At June 30, 2006 the aggregate cost of the securities owned by the Fund for federal tax purposes was $75,808,028.
The tax character of distributions paid during 2005 and 2004 were as follows:
Distribution paid from: | 2005 | 2004 | ||||
Ordinary Income | $ | 321,926 | $ | 258,444 | ||
Long-term Capital Gain | 3,272,042 | - | ||||
$ | 3,593,968 | $ | 258,444 | |||
As of December 31, 2005, the components of distributable earnings on a tax basis were as follows:
Undistributed Ordinary Income | $ | (1,702) |
Undistributed Long-term Capital Gain | 8,923 | |
Unrealized Appreciation | 7,508,312 |
During the year ended December 31, 2005, the Fund fully utilized prior year’s capital loss carry forwards.
Other Information
(Unaudited)
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.
QUARTERLY PORTFOLIO SCHEDULES – The Fund will file a complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year (quarters ended March 31 and September 30) on Form N-Q. The Fund’s Form N-Q will be available on the Securities and Exchange Commission’s website at http://www.sec.gov and may be reviewed and copied at the Securities and Exchange Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Securities and Exchange Commission’s Public Reference Room may be obtained by calling 1-800-SEC-0330.
SHAREHOLDER MEETING INFORMATION – The Annual Meeting of Shareholders of the Fund (the “Meeting”) was held on November 15, 2005 (upon adjournment from an initial meeting date of September 23, 2005) to allow a sufficient amount of votes to be cast to represent a quorum on the proxy proposal to permit the Fund to invest in foreign companies without the existing 35% percentage of assets limitation.
The meeting included the election of directors. The directors elected were:
Maurice L. Schoenwald, David Schoenwald, Sharon Reier, John Breitenbach, Preston Pumphrey, Murray Rosenblith, Susan Hickey* and Jonathon Beard*.
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Each matter voted upon at the Meeting:
a) | To elect eight Directors to serve for the ensuing year. |
For | Withhold | |
Maurice L. Schoenwald | 1,103,133 | 7,940 |
David J. Schoenwald | 1,104,468 | 6,605 |
Sharon Reier | 1,104,901 | 6,172 |
John C. Brietenbach Jr. | 1,103,736 | 7,337 |
Preston Pumphrey | 1,104,336 | 6,737 |
Murray Rosenblith | 1,102,832 | 8,241 |
Susan Hickey | 1,103,786 | 7,287 |
Jonathan Beard | 1,103,360 | 7,713 |
b) | To consider and act upon a Proposal to Amend the Investment Restriction of Foreign Securities in the Fund’s Statement of Additional Information (a “fundamental investment policy”) which presently restricts investments to no more than 35% of assets in shares of foreign issuers. The proposed amendment would eliminate the restriction on the percentage of net assets permitted to be invested in foreign companies. |
The proposal was approved. |
Votes For: | 859,142 |
Against: | 37,414 |
Abstain: | 24,613 |
Broker Non-Vote: | 189,904 |
Total: | 1,111,073 |
c) | To consider and act upon a proposal to ratify the Directors selection of the firm of Joseph A. Don Angelo CPA as Registered Independent Certified Public Accountant of the Fund for its fiscal year ending December 31, 2006. |
The selection was ratified. |
For: | 1,054,919 |
Against: | 2,437 |
Abstain: | 53,717 |
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Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed registrants.
Not applicable.
Item 6. Schedule of Investments.
Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or this Item.
Item 11. Controls and Procedures.
(a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
(b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Exhibits.
(a)(1) | Not applicable. |
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
(a)(3) | Not applicable. |
(b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) New Alternatives Fund, Inc.
By (Signature and Title)* /s/ David J. Schoenwald
(principal executive officer)
Date August 23, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* /s/ David J. Schoenwald
(principal executive officer)
Date August 23, 2006
By (Signature and Title)* /s/ David J. Schoenwald
(principal financial officer)
Date August 23, 2006
* Print the name and title of each signing officer under his or her signature.