<PLAINTEXT>
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 811-04466
Monetta Fund, Inc.
(exact name of registrant as specified in charter)
1776-A S. Naperville Road
Suite 100
Wheaton, IL 60187-8133
(address of principal executive offices)
Arthur Don Esq.
Seyfarth Shaw LLP
55 E. Monroe Street, Suite 4200
Chicago, IL 60603
(name and address of agent for service)
Registrant's telephone number, including area code: (630) 462-9800
Date of fiscal year end: December 31
Date of reporting period: June 30, 2004
Form N-CSR is to be used by management Investment companies to file reports
with the Commission not later that 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(17CFR270.30e-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 current 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 the collection of
information under the clearance requirements of 44 U.S.C. 3507.
Item 1. Semi-Annual Report to Shareholders
The following is a copy of the report transmitted to shareholders pursuant to
Rule 30e-1 under the Investment Company Act of 1940(17CFR270.30e-1).
Monetta Fund
No-Load
1-800-MONETTA
WWW.MONETTA.COM
Semi-Annual Report
June 30, 2004
<PAGE 1>
TABLE OF CONTENTS
Performance Highlights 4
Schedule of Investments 5
Financial Statements
Statement of Assets & Liabilities 7
Statement of Operations 8
Statement of Changes in Net Assets 9
Notes to Financial Statements 10
Directors/Trustees 14
Performance data quoted represents past performance; past performance does not
guarantee future results. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. Current performance of the fund
may be lower or higher than the performance quoted. Performance data current
to the most recent month end may be obtained by calling 1-800-Monetta, or
visiting www.Monetta.com
Footnote: The Monetta Fund, at the discretion of the Portfolio Manager, may
invest in Initial Public Offerings (IPO's) which will significantly impact its
performance. Due to the speculative nature of IPO's, there can be no assurance
that IPO participation will continue and that IPO's will have a positive effect
on the fund's performance. For the six months ended June 30, 2004, the Fund
did not participate in IPO's. Historically, small company stocks and mid-cap
company stocks have been more volatile than large company stocks, including the
increased risk of price fluctuations.
References to individual securities are the views of the Adviser at the date of
this report and are subject to change. References are not a recommendation to
buy or sell any security. Fund holdings and compositions are subject to
change.
Participation in a dollar cost averaging plan does not assure a profit and does
not protect against a loss in declining markets.
Since indices are unmanaged, it is not possible to invest in them.
Sources for performance data include Lipper, Bloomberg L.P. and Frank Russell
Company.
This report must be preceded or accompanied by a Prospectus. Please refer to
the prospectus for important information about the investment company including
investment objectives, risks, charges and expenses. Read it carefully before
you invest or send money. While the fund is no-load, management fees and other
expenses still apply.
Opinions expressed are those of the fund managers and are not intended to be a
forecast of future events, a guarantee of future results, nor investment
advice.
Distributor: Quasar Distributors, LLC 08/04.
<PAGE 2>
Dear Monetta Shareholder: July 26, 2004
The stock market continued its seesaw action during the second quarter, as
leading economic indicators remained range-bound all year. Although the growth
in the economy has shown signs of improvement it has been difficult to make
money in the equity markets. For example, even though earnings are exceeding
estimates by a large amount, stocks refuse to budge. Even a low interest rate
environment with moderate inflationary pressures has not helped the stock
market. The markets appear to be in a consolidation phase, digesting the gains
of last year while feeling anxiety about the U.S. presidential election and the
situation in Iraq.
The biggest near-term risk to the financial markets appears to be the degree of
emerging inflation and the extent that it could impact corporate earnings in
2005. The market appears to be signaling concerns over the sustainability of
current economic growth. For example, although new hiring activity has picked
up, it has not been robust enough to materially impact the unemployment rate.
Also, wage growth has remained subdued in spite of significant fiscal stimulus
to propel consumer spending and corporate earnings.
The market is basically suffering from a loss of momentum. Investors are not
sure which sectors to invest in as no group other that Energy has demonstrated
leadership characteristics. If the economy slows down investors will likely
move into the health care and consumer staples groups. Conversely, if we see
continued economic strength in the second half of 2004, economically sensitive
groups such as technology and consumer discretionary should perform well.
We believe that excess capacity and improved productivity will minimize
inflation from becoming a serious problem. As the economic recovery matures
into a solid expansion phase the bull market could get another powerful leg up,
especially with an added boost from some unexpected sources i.e., China, U.S.
dollar strength, oil prices etc.
In terms of the fixed income market the Federal Reserve formally acknowledged
the economic recovery when they raised the federal funds rate up 0.25% to
1.25%. The question now becomes how quickly the Fed will raise rates to keep
inflation in check. Based on the delicate nature of this recovery we do not
expect a significant increase in interest rates.
Free Tuition Rewards<trademark> Program
In conjunction with SAGE Scholars Inc., we are pleased to offer Monetta
shareholders a new college Tuition Rewards<trademark> Program. The program
allows shareholders to receive tuition credits equal to one year's tuition or
$15,600, whichever is less at 165 participating private colleges. The program
is free. For additional information call 1-800-Monetta. You can register
through our website at www.Monetta.com. You can receive an immediate $250 in
Tuition Rewards<trademark> bonus for just enrolling. These Tuition
Rewards<trademark> are earned annually like frequent flyer miles and can be
assigned to any family members i.e. grandchildren, nieces or nephews. Please
note that Tuition Rewards<trademark> will be remitted solely as a reduction
from the college's full tuition bill, and is not awarded in cash.
Sincerely,
/S/ Robert S. Bacarella /S/ Timothy R. Detloff
Robert S. Bacarella Timothy R. Detloff,CPA
President, Founder and Portfolio Manager Vice-President and
Portfolio Manager
<PAGE 3>
Monetta Fund Period ended 06/30/04
Investment Objective: Market Capitalization: Total Net Assets:
Capital Appreciation $47.0 billion $57.5 million
PERFORMANCE:
Average Annual Total Return
1 Year 5 Year 10 Year
Monetta Fund 10.02% 0.58% 4.75%
Russell 3000 Growth* 18.82% -6.05% 9.78%
S&P 500 19.10% -2.20% 11.82%
*Source Frank Russell Company
Performance data quoted represents past performance; past performance does not
guarantee future results. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. Current performance of the fund
may be lower or higher than the performance quoted. Performance data current
to the most recent month end may be obtained by calling 1-800-Monetta /or
visiting www.Monetta.com
The hypothetical graph to the right compares the change in value of a $10,000
investment in the Monetta Fund, the Russell 3000 Growth Index and the S&P 500
Index, with dividend and capital gains reinvested. The Russell 3000 Index is
an index that measures the performance of the 3,000 large U.S. Companies within
the Russell 1000 and Russell 2000 Indices. The S&P 500 Index is the Standard &
Poor's Index of 500 stocks, a widely recognized, unmanaged index of common
stock prices. Please refer to footnote at bottom of Page 2.
Monetta Fund, Inc.
Data For Performance Graph
Russell
10 Year Monetta 3000
Date Fund Growth S & P
6/94 10,000 10,000 10,000
9/94 10,704 10,785 10,489
12/94 10,185 10,850 10,487
3/95 11,167 11,840 11,507
6/95 11,938 13,005 12,604
9/95 13,426 14,216 13,611
12/95 13,039 14,818 14,419
3/96 13,240 15,619 15,194
6/96 13,650 16,604 15,874
9/96 13,626 17,125 16,365
12/96 13,250 18,060 17,728
3/97 12,288 17,963 18,205
6/97 14,814 21,339 21,376
9/97 17,776 23,136 22,978
12/97 16,720 23,251 23,637
3/98 18,559 26,700 26,932
6/98 16,894 27,654 27,826
9/98 12,924 24,817 25,066
12/98 15,209 31,392 30,432
3/99 13,501 33,200 31,948
6/99 15,453 34,727 34,200
9/99 15,636 33,421 32,066
12/99 23,087 42,011 36,834
3/00 27,449 45,075 37,678
6/00 26,543 43,707 36,676
9/00 24,926 41,398 36,320
12/00 19,398 32,593 33,480
3/01 15,873 25,911 29,512
6/01 17,289 28,276 31,239
9/01 13,402 22,616 26,656
12/01 15,312 26,197 29,503
3/02 14,966 25,530 29,559
6/02 14,061 20,815 25,601
9/02 12,892 17,590 21,180
12/02 12,975 18,852 22,965
3/03 12,151 18,617 22,242
6/03 14,456 21,394 25,665
9/03 14,802 22,329 26,345
12/03 16,877 24,692 29,551
3/04 16,745 24,973 30,050
6/04 15,904 25,420 30,567
PORTFOLIO COMPOSITION:
Healthcare-Services 15.2%
Pharmaceuticals 8.7%
Healthcare-Products 6.7%
Commercial Services 6.3%
Oil & Gas Services 5.6%
Food 5.1%
Telecommunications 5.1%
Oil & Gas 5.0%
Software 5.0%
All Other Industries 21.4%
(A) 15.9%
(A) Short-term investments net of other assets and liabilities.
TOP 5 EQUITY HOLDINGS:
% of Net Assets
McKesson Corp. 4.62%
AmerisourceBergen Corp. 4.16%
UnitedHealth Group, Inc. 3.99%
Anthem, Inc. 3.89%
First Data Corp. 3.64%
Total Top 5 Equity Holdings 20.30%
COMMENTARY
The Monetta Fund posted a return of negative 5.76% in the first half of 2004,
compared to the Russell 3000 Growth Index and S&P 500 Index returns of 5.68%
and 3.44%, respectively. After beating the S&P 500 Index returns in both 2002
and 2003, (-15.2% vs. -22.09% and 2.81% vs. 0.25%, respectively), we are
disappointed to be behind thus far in 2004.
After a strong performance in 2003, the market continued to move upward in
early 2004. Our strategy was to stay in the more volatile stocks that had
performed well and had been demonstrating strong fundamentals in terms of
earnings and revenue growth. Unfortunately, after a strong start in January
many of these stocks began to perform poorly. Initially, we felt that this was
a healthy pullback after strong performance in 2003. It became evident last
quarter, however, that investors were leaving economically sensitive groups and
rotating into more defensive groups.
In response to what the market is telling us we have recently moved into a more
defensive posture. We are currently overweighted in the energy group, and are
underweighted in the technology and consumer discretionary groups. At this
point we are attempting to determine whether this is a temporary rotation into
defensive groups, or if we are entering an economic slowdown.
The Monetta Fund had a number of stocks that have performed well thus far in
2004. Specifically, Peabody Energy and Valero Energy Corp. posted strong gains,
and represented 2.4% and 0.5% of net assets, respectively, on June 30, 2004.
Peabody Energy is a coal producer and Valero Energy is an oil refiner. Our
weakest sector this year has been the home building stocks. As reported in our
2003 report, home building stocks were our best performers in 2003. Despite
strong fundamentals, investors are currently leaving the group due to concerns
over higher interest rates. We have reduced our home building stocks, due to
their lack of performance.
We are concerned about the conflicting signals that we are getting about the
economy. It is difficult to ascertain whether we are entering an economic
slowdown, or if the economy is just resting for a pickup later in the year.
This will have a major impact on how we position the portfolio to best take
advantage of the economic situation.
<PAGE 4>
Schedule of Investments (Unaudited) June 30, 2004
MONETTA FUND
COMMON STOCKS - 84.1%
NUMBER OF SHARES VALUE
Aerospace/Defense - 1.5%
16,600 Lockheed Martin Corp. $864,528
Banks - 1.6%
10,000 First Horizon Nat'l Corp. 454,700
13,000 National City Corp. 455,130
909,830
Biotechnology - 2.8%
*30,000 Amgen, Inc. 1,637,100
Coal - 2.4%
24,500 Peabody Energy Corp. 1,371,755
Commercial Services - 6.3%
77,300 McKesson Corp. 2,653,709
*50,000 Parexel Int'l Corp. 990,000
3,643,709
Electric - 1.0%
*56,300 The AES Corp. 559,059
Environmental Control - 2.6%
48,500 Waste Management, Inc. 1,486,525
Food - 5.1%
25,000 Kraft Foods, Inc. - CL A 792,000
*24,000 Safeway, Inc. 608,160
*39,200 The Kroger Co. 713,440
*20,000 Unilever PLC - SP ADR 795,400
2,909,000
Healthcare-Products - 6.7%
50,000 Baxter Int'l, Inc. 1,725,500
*10,000 Haemonetics Corp. 296,500
33,000 Johnson & Johnson 1,838,100
3,860,100
NUMBER OF SHARES VALUE
Healthcare-Services - 15.2%
8,600 Aetna, Inc. $731,000
*25,000 Anthem, Inc. 2,239,000
19,900 Health Management
Assoc.,Inc. - CL A 446,158
*23,500 Laboratory Corp. of
America Holdings 932,950
*8,900 Pediatrix Medical Group, Inc. 621,665
*17,200 Quest Diagnostics, Inc. 1,461,140
36,800 UnitedHealth Group, Inc. 2,290,800
8,722,713
Home Builders - 2.8%
30,900 Pulte Homes, Inc. 1,607,727
Lodging - 1.5%
*59,000 Caesars Entertainment, Inc. 885,000
Oil&Gas - 5.0%
16,000 Ensco Int'l, Inc. 465,600
23,000 Exxon Mobil Corp. 1,021,430
28,500 Marathon Oil Corp. 1,078,440
4,000 Valero Energy Corp. 295,040
2,860,510
Oil&Gas Services - 5.6%
*28,200 BJ Services Co. 1,292,688
15,000 Cal Dive Int'l, Inc. 454,800
*20,000 National-Oilwell, Inc. 629,800
13,000 Schlumberger Ltd. 825,630
3,202,918
Pharmaceuticals - 8.7%
40,000 AmerisourceBergen Corp. 2,391,200
*36,000 Caremark Rx, Inc. 1,185,840
20,342 D & K Healthcare
Resources, Inc. 244,104
12,000 Omnicare, Inc. 513,720
20,000 Pfizer, Inc. 685,600
5,020,464
Semiconductors - 2.5%
51,670 Intel Corp. 1,426,092
<PAGE 5>
Schedule of Investments (Unaudited)
June 30, 2004
MONETTA FUND (Cont'd)
NUMBER OF SHARES VALUE
Software - 5.0%
47,000 First Data Corp. $2,092,440
27,000 Microsoft Corp. 771,120
*16 MicroStrategy Inc. - WT07 2
2,863,562
Telecommunications - 5.1%
*12,300 China Telecom Corp.
Ltd - ADR 434,067
*68,500 Cisco Systems, Inc. 1,623,450
*10,000 Crown Castle Int'l Corp. 147,500
20,000 Verizon Communications,Inc. 723,800
2,928,817
Textiles - 1.3%
*10,400 Mohawk Industries, Inc. 762,632
Transportation - 1.4%
10,000 FedEx Corp. 816,900
Total Common Stocks 48,338,941
(Cost $46,936) (a)
VARIABLE DEMAND NOTES - 2.5%
PRINCIPAL AMOUNT
370,100 American Family Financial
Services Co.- 0.881% 370,100
1,080,500 Wisconsin Corp. Central
Credit Union - 1.030% 1,080,500
1,450,600
COMMERCIAL PAPER - 10.6%
PRINCIPAL AMOUNT
2,000,000 Hitachi Credit - 1.171%
Due 07/15/04 1,999,090
1,800,000 7-Eleven Corp. - 1.201%
Due 07/21/04 1,798,800
2,300,000 Nat'l Rural Utilities - 1.201%
Due 07/21/04 2,298,467
6,096,357
VALUE
Total Short-Term
Investments - 13.1% $7,546,957
Total Investments - 97.2% 55,885,898
(Cost $54,483,416) (a)
Other Net Assets
Less Liabilities - 2.8% 1,599,927
Net Assets - 100% $57,485,825
(a) Cost is identical for book and tax purposes; the aggregate gross unrealized
appreciation is $1,604,856 and aggregate gross unrealized depreciation is
$202,374 resulting in net unrealized appreciation of $1,402,482.
See accompanying notes to financial statements.
*Non-income producing security.
<PAGE 6>
STATEMENT OF ASSETS AND LIABILITIES June 30, 2004
(Unaudited)
Monetta Fund
Assets:
Investments at market value
(cost: $54,483,416) $ 55,885,898
Receivables:
Interest and dividends 15,861
Securities sold 7,116,371
Other assets 2,081
Total Assets 63,020,211
Liabilities:
Payables:
Cash overdraft 2,527
Investment advisory fees (Note 2) 44,778
Investments purchased 5,411,452
Accrued expenses 75,629
Total Liabilities 5,534,386
Net Assets $57,485,825
Analysis of net assets:
Paid in capital (a) $78,970,373
Accumulated undistributed net investment income (loss) (80,586)
Accumulated undistributed net realized gain (loss) (22,806,444)
Net unrealized appreciation on investments 1,402,482
Net Assets $57,485,825
Net asset value, offering price and redemption price per
share (5,952,776 shares of capital stock) $9.66
See accompanying notes to financial statements.
(a) Represents $59,528 of $0.01 par value and $78,910,845 of additional paid
in capital, 100 million shares are authorized.
<PAGE 7>
STATEMENT OF OPERATIONS June 30, 2004
(Unaudited)
Monetta Fund
Investment income and expenses:
Investment income:
Interest $62,367
Dividend 265,782
Other Income 45,749
Total investment income 373,898
Expenses:
Investment advisory fee (Note 2) 289,513
Custodial fees and bank cash management fee 15,298
State registration 10,845
Transfer and shareholder servicing agent fee 138,828
Audit/Tax 27,000
Legal 10,611
Printing 19,763
Total expenses 511,858
Fees paid indirectly (Note 5) (57,374)
Expenses net of fees paid indirectly 454,484
Net investment income (loss) (80,586)
Realized and unrealized gain (loss) on investments:
Realized gain (loss) on investments:
Proceeds from sales 121,711,427
Cost of securities sold 121,033,524
Net realized gain (loss) on investments 677,903
Net unrealized appreciation (depreciation) on investment:
Beginning of period 5,598,571
End of period 1,402,482
Net change in net unrealized appreciation (depreciation)
on investments during the period (4,196,089)
Net realized and unrealized gain (loss) on investments (3,518,186)
Net increase (decrease) in net assets from operations ($3,598,772)
<PAGE 8>
STATEMENT OF CHANGES IN NET ASSETS For Six Months Ended
June 30, 2004 (Unaudited)
and Year Ended December 31, 2003
Monetta Fund
From investment activities: 2004 2003
Operations:
Net investment income (loss) $ (80,586) $ (356,241)
Net realized gain (loss) on investments 677,903 10,553,478
Net change in net unrealized appreciation
(depreciation) on investments during
the period (4,196,089) 5,928,905
Net increase (decrease) in net assets
from operations (3,598,772) 16,126,142
Distribution from net investment income 0 0
Distribution from and in excess of short-term
capital gains, net (a) 0 0
Distribution from and in excess of net
realized gains 0 0
Increase (decrease) in net assets from
investment activities (3,598,772) 16,126,142
From capital transactions (Note 3):
Proceeds from shares sold 655,621 8,261,501
Net asset value of shares issued through
dividend reinvestment 0 0
Cost of shares redeemed (3,631,749) (16,727,725)
Increase (decrease) in net assets from
capital transactions (2,976,128) (8,466,224)
Total increase (decrease) in net assets (6,574,900) 7,659,918
Net assets at beginning of period 64,060,725 56,400,872
Net assets at end of period $57,485,825 $64,060,790
Accumulated undistributed net
investment income $ 0 $ 0
See accompanying notes to financial statements.
(a) Distributions of short-term capital gains are included as ordinary income
for tax purposes.
<PAGE 9>
Notes To Financial Statements June 30, 2004
1. SIGNIFICANT ACCOUNTING POLICIES:
Monetta Fund, Inc. (Monetta Fund) is an open-end diversified management
investment company registered under the Investment Company Act of 1940, as
amended. The objective of the Monetta Fund is capital appreciation by investing
primarily in equity securities believed to have growth potential. The Fund
generally invests in companies with a market capitalization of under $3
billion. Effective January 1, 2003, the market capitalization restriction was
removed. The Fund invests primarily in growth companies of all market
capitalization ranges.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements in accordance with
generally accepted accounting principles:
(a) Securities Valuation
Investments are stated at market value based on the last reported sale price on
national securities exchanges, or the NASDAQ Market, on the last business day
of the period. Listed securities and securities traded on the over-the-counter
markets that did not trade on the last business day are valued at the mean
between the quoted bid and asked prices. Short-term securities are stated at
amortized cost, which is substantially equivalent to market value.
(b) Use of Estimates
The preparation of financial statements, in conformity with accounting
principles generally accepted in the United States of America, requires the
Fund's management to make estimates and assumptions that affect reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the results of
operations during the reporting period. Actual results could differ from those
estimates.
(c) General
Security transactions are accounted for on a trade date basis. Daily realized
gains and losses from security transactions are reported on the first-in,
first-out cost basis. Interest income is recorded daily on the accrual basis
and dividend income on the ex-dividend date.
(d) Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its taxable income to its shareholders. Accordingly, no
provision for federal income taxes is required. It is the Board's intent not
to distribute any realized gains until the capital loss carry forwards have
been offset or expired.
The Fund intends to utilize provisions of the federal income tax laws which
allow them to carry a realized loss forward for eight years following the year
of the loss and offset such losses against any future realized capital gains.
At December 31, 2003, the losses amounted to $23,646,739, which will expire
between December 31, 2009 and December 31, 2011.
Net realized gains or losses differ for financial reporting and tax purposes as
a result of losses from wash sales, post October 31 losses which are not
recognized for tax purposes until the first day of the following fiscal year,
and gains and losses from real estate investment trusts.
<PAGE 10>
Notes To Financial Statements June 30, 2004
(e) Distribution of Income and Gains
Distributions to shareholders are recorded by the Fund on the ex-dividend date.
Due to inherent differences in the characterization of short-term capital gains
under accounting principles generally accepted in the United States of America
and for federal income tax purposes, the amount of distributable net investment
income for book and federal income tax purposes may differ.
For federal income tax purposes, a net operating loss recognized in the current
year cannot be used to offset future year's net investment income. For the year
ended December 31, 2003, the Monetta Fund had net operating losses of $356,241
for tax purposes which were reclassified from accumulated undistributed net
investment income to capital.
The Fund had no distributions for the year ended December 31, 2003.
2. RELATED PARTIES:
Robert S. Bacarella is an officer and director of the Fund and also an officer,
director and majority shareholder of the investment adviser, Monetta Financial
Services, Inc. (Adviser). For the six months period ended June 30, 2004,
renumerations required to be paid to all interested directors have been
absorbed by the Adviser. Fees paid to outside Directors have been absorbed by
the Fund.
The Fund pays an investment advisory fee to the Adviser based on the Fund's
individual net assets, payable monthly at the following annual rate:
First $300 million in Next $200 million in Net assets over
net assets net assets $500 million
0.95% 0.90% 0.85%
From this fee the Adviser pays for all necessary office facilities, equipment
and personnel for managing the assets of the fund. In addition, the Adviser
pays for all expenses in determining the daily price computations, placement of
securities orders and related bookkeeping.
<PAGE 11>
Notes To Financial Statements June 30, 2004
3. CAPITAL STOCK AND SHARE UNITS:
There are 100,000,000 shares of $0.01 par value capital stock authorized
for the Monetta Fund.
2003 Beginning Shares 7,153,280
Shares sold 993,401
Shares issued upon dividend reinvestment 0
Shares redeemed (1,898,145)
Net increase (decrease) in shares outstanding (904,744)
2004 Beginning Shares 6,248,536
Shares sold 65,047
Shares issued upon dividend reinvestment 0
Shares redeemed (360,807)
Net increase (decrease) in shares outstanding (295,760)
Ending Shares 5,952,776
4. PURCHASES AND SALES OF INVESTMENT SECURITIES:
The cost of purchases and proceeds from sales of securities for the six months
period ended June 30, 2004, excluding short-term securities, were $120,059,093
and $121,711,427,respectively. The cost of purchases and proceeds from sales
of government securities included in the preceding numbers are $4,998,063 and
$5,000,000, respectively.
5. Fees Paid Indirectly:
Various Fund expenses totaling $57,374, were paid for indirectly through
directed brokerage agreements (soft dollars), such as legal, audit, tax and
printing, for the six months period ended June 30, 2004. Expenses not specific
to a fund are allocated across the funds as a percent of net assets in the Fund
family or prorated based on the respective number of shareholders (open
accounts). These expenses are reported on their respective expense line of the
Statement of Operations.
<PAGE 12>
Notes To Financial Statements June 30, 2004
6. FINANCIAL HIGHLIGHTS:
Financial highlights for Monetta Fund for a share of capital stock
outstanding throughout the period is presented below:
Six Months
Ended 6/30/04
Monetta Fund (Unaudited) 2003 2002 2001 2000 1999
Net asset value at beginning
of period $10.252 $7.885 $9.296 $11.779 $22.711 $14.964
Net investment income (loss) (0.013) (0.052) (0.056) (0.013) (0.021) 0.075
Net realized and unrealized
gain (loss) on investments (0.582) 2.419 (1.355) (2.470) (3.911) 7.672
Total from investment
operations: (0.595) 2.367 (1.411) (2.483) (3.932) 7.747
Less:
Distributions from net
investment income 0.000 0.000 0.000 0.000 (0.095) 0.000
Distributions from short-term
capital gains, net 0.000 0.000 0.000 0.000 (4.925) 0.000
Distributions from net
realized gains 0.000 0.000 0.000 0.000 (1.980) 0.000
Total distributions 0.000 0.000 0.000 0.000 (7.000) 0.000
Net asset value at end of
period $9.657 $10.252 $7.885 $9.296 $11.779 $22.711
Total return (5.76%) 30.08% (15.27%) (21.05%) (15.97%) 51.80%
Ratio to average net assets:
Expenses-Net 1.49% 1.60% 1.65% 1.49% 1.32% 1.45%
Expenses-Gross(a) 1.59% 1.81% 1.80% 1.55% 1.32% 1.45%
Net investment income (loss) (0.13%) (0.59%) (0.66%) (0.12%) (0.09%) 0.50%
Portfolio turnover 236.4% 427.7% 609.1% 469.5% 353.8% 210.9%
Net assets ($ thousands) $57,486 $64,061 $56,401 $74,086 $103,437 $135,659
(a) Gross Expense Ratio reflects fees paid indirectly.
The per share ratios are calculated using the weighted average number of
shares outstanding during the period, except for distributions, which are based
on shares outstanding at record date.
<PAGE 13>
Directors
Name (Year Of Birth) Principal Occupation During Past 5 Years Other Directorships and
Position(s) Held with Fund Affiliations
Independent ("disinterested") Directors
John L. Guy (1952) Executive Assistant, Wachovia Corp. (formerly Trustee Monetta Trust since
Director since 1998 First Union Nat'l Bank), Business Banking, 1993.
General Bank Group, since Nov. 1999;
President, Heller Small Business Lending
Corporation (formerly Heller First Capital Corp.),
May 1995 to Nov. 1999.
Marlene Z. Hodges (1948) CFO, Abraham Lincoln Center since Trustee Monetta Trust since
Director since 2001 March 2003; Director of Finance Sears 2001.
Roebuck & Company from 1970, retired
November 2001.
Mark F. Ogan (1942) Sr. Vice President & Chief Operating Officer, Trustee Monetta Trust since
Director since 1988 Rand McNally & Company, since July 2003; 1993.
President, DuPage Capital Management, Ltd., Director JMI-USA, Inc.
since April 1995. and Director Montini
Catholic High School.
Inside ("interested") Directors
Robert S. Bacarella (1949) Chairman, Chief Executive Officer and Trustee and President
Director and President President since April 1997; Chairman and Monetta Trust since since 1993.
Chief Executive Officer of Adviser, 1996 to Wheaton Police Pension
1997; President of the Adviser 1984 to 1996; Board, 1994 to 2001.
Director of the Adviser since 1984.
John W. Bakos (1947) Division Placement Manager, Sears Roebuck Trustee Monetta Trust since
Director since 1985 & Co., since 1969. 1996.
All of the above Directors were elected by shareholders at the December 3, 2001
Special Meeting of Monetta Fund to hold office until a successor is elected and
qualified. Each Director oversees the Monetta Fund. The address for each
director is the Adviser's office.
<PAGE 14>
Monetta Family of Mutual Funds
1776-A South Naperville Road
Suite 100
Wheaton, IL 60187-8133
PRESORTED STANDARD
U.S. Postage
PAID
Monetta
ITEM 2. CODE OF ETHICS
(a) The registrant has adopted a code of ethics applicable to the Monetta Fund's
principal executive officer and principal financial officer, regardless of
whether these individuals are employed by the Registrant or a third party.
(b) No information needs to be disclosed pursuant to this paragraph.
(c) The registrant has made no amendments to its Code of Ethics during the
period covered by the shareholder report presented in Item 1.
(d) The registrant has not granted a waiver or an implicit waiver from a
provision of its Code of Ethics during the period covered by the shareholder
report presented in Item 1.
(e) Not applicable.
(f) (1) Information required for this item is only required in an annual report
of FORM N-CSR.
(2) Not applicable.
(3) The registrant undertakes to provide a copy of such code of ethics to
any person upon request, without charge, by calling 1-800-666-3882.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
Information required for this item is only required in an annual report of
FORM N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information required for this item is only required in an annual report of
FORM N-CSR.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Information required for this item is only required in an annual report
of FORM N-CSR.
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable - the Schedule of Investments is included with the
registrant's Semi-Annual Report to Shareholders presented in Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not applicable to open-end investment management companies.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT
INVESTMENT COMPANY AND AFFILIATED PURCHASERS
Not applicable to open-end management investment companies.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors during the period
covered by the report to shareholders presented in Item 1.
Item 10. CONTROLS AND PROCEDURES
(a) Based in their evaluation of registrant's disclosure controls and
Procedures (as defined in Rule 30a-3(c) under the Investment Company Act
of 1940 (17CFR270.30a-3(c)), as of a date within 90 days prior to the filing
of this report, the registrant's principal executive officer and principal
financial officer have determined that the registrant's disclosure controls
and procedures are appropriately designed to ensure that information required
to be disclosed by the registrant in the reports that it files under the
Securities Exchange Act of 1934 (a) is accumulated and communicated to
registrant's management, including the registrant's principal executive
officer and principal financial officer, to allow timely decisions regarding
required disclosure, and (b) is recorded, processed, summarized and reported,
within the time periods specified in the rules and forms adopted by the U.S.
Securities and Exchange Commission.
(b) There has been no change in the registrant's internal control over
Financial reporting (as defined in Rule 30a-3(d) under the Investment Company
Act of 1940 (17CFR270.30a-3(d)) during the registrant's first fiscal half-year
that has materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting.
Item 11. EXHIBITS
Exhibit (a)(1) Code of Ethics
Not applicable.
Exhibit (a)(2) Certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2(a)
under the Act (17CFR270.30a-2(a)), exactly as set forth below:
I, Robert S. Bacarella, certify that:
1. I have reviewed this report on Form N-CSR of the Monetta Fund;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations, changes in net assets, and cash
flows (if the financial statements are required to include a statement of cash
flows) of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940) and internal control
over financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940 for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;
b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external reporting purposes in accordance with
generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures, and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
a date within 90 days prior to the filing date of this report based
on such evaluation; and
d) Disclosed in this report any change in the registrant's internal
Control over financial reporting that occurred during the first fiscal
half-year of the period covered by this report that has materially
affected, or is reasonable likely to materially affect, the registrant's
internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent functions):
a) All significant deficiencies in the design or operation of internal
controls which are reasonably likely to adversely affect the
registrant's ability to record, process, summarize, and report
financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls over financial reporting.
Date: September 02, 2004
/s/ Robert S. Bacarella
---------------------------
Principal Executive Officer
Exhibit(a)(2)
I, Maria C. DeNicolo, certify that:
1. I have reviewed this report on Form N-CSR of the Monetta Fund;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations, changes in net assets, and cash
flows (if the financial statements are required to include a statement of cash
flows) of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940) and internal control
over financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940 for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;
b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external reporting purposes in accordance with
generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures, and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
a date within 90 days prior to the filing date of this report based
on such evaluation; and
d) Disclosed in this report any change in the registrant's internal
Control over financial reporting that occurred during the first fiscal
half-year of the period covered by this report that has materially
affected, or is reasonable likely to materially affect, the registrant's
internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent functions):
a) All significant deficiencies in the design or operation of internal
controls which are reasonably likely to adversely affect the
registrant's ability to record, process, summarize, and report
financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls over financial reporting.
Date: September 02, 2004
/s/ Maria C. DeNicolo
---------------------------
Principal Financial Officer
Exhibit(b)
Pursuant to the requirements of the Securities Exchange Act of 1934 and
Investment Company of 1940, the registrant has duly caused this report to
be signed in its behalf by the undersigned, thereunto duly authorized.
REGISTRANT Monetta Fund
BY /s/ Robert S. Bacarella, Principal Executive Officer
DATE September 02, 2004
REGISTRANT Monetta Fund
BY /s/Maria C. DeNicolo, Principal Financial Officer
DATE September 02, 2004