As filed with the Securities and Exchange Commission on August 28, 2003
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 811-03115
GINTEL FUND
(Exact name of registrant as specified in charter)
6 Greenwich Office Park
Greenwich, Connecticut 06831
(Address of principal executive offices) (Zip code)
Stephen G. Stavrides
President & Treasurer
Gintel Fund
6 Greenwich Office Park
Greenwich, Connecticut 06831
(Name and address of agent for service)
(800) 243-5808
(Registrant's telephone number, including area code)
Date of fiscal year end: 12/31/02
Date of reporting period: 06/30/03
Item 1. Report to Stockholders.
GINTEL FUND
[LOGO]
SEMIANNUAL REPORT
TO SHAREHOLDERS
JUNE 30, 2003
GINTEL FUND Summary of Investment Results
The investment objective is to achieve capital appreciation through investing in
equities. The minimum initial investment in Gintel Fund is $5,000, except for
IRA accounts where the minimum initial purchase is $2,000. There is no minimum
on additional investments.
Summary of Investment Results
- --------------------------------------------------------------------------------
Gintel Fund S&P500 Russell 2000
----------- ------ ------------
2003 (6 mos.) 4.21% 11.75% 17.88%
2002 -23.93% -22.09% -20.48%
2001 -17.45% -11.88% 2.49%
2000 -34.35% -9.10% -3.02%
1999 81.52% 21.04% 21.26%
1998 -10.95% 28.58% -2.55%
1997 29.22% 33.35% 22.36%
1996 31.04% 22.94% 16.49%
1995 30.97% 37.53% 28.45%
1994 -16.46% 1.32% -1.82%
1993 2.04% 10.06% 18.88%
1992 24.68% 7.61% 18.41%
1991 15.57% 30.40% 46.04%
1990 -6.66% -3.11% -19.48%
1989 23.81% 31.63% 16.26%
1988 29.35% 16.56% 25.02%
1987 -14.25% 5.25% -8.80%
1986 20.83% 18.67% 5.68%
1985 20.02% 31.73% 31.05%
1984 -2.57% 6.27% -7.30%
1983 34.33% 22.56% 29.13%
1982 34.10% 20.55% 24.95%
1981(1) 7.64% -4.42% -11.22%
Average Annual
Total Rate of Return
- --------------------
1-Year -11.08% 0.25% -1.64%
5-Year -7.51% -1.61% 0.97%
10-Year 2.81% 10.04% 8.24%
(1) 6/10/1981-12/31/1981
Past results offer no assurance as to future performance. 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.
Investment results are net of expenses, with dividends and capital gains
reinvested. The returns shown do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund shares.
The S&P 500 and Russell 2000 are unmanaged indexes commonly used to measure
performance of U.S. stocks. You cannot invest directly in an index.
Please refer to the Statement of Net Assets for Fund holdings. Fund holdings and
sector weightings are subject to change at any time and are not recommendations
to buy or sell any security or in any sector.
The information provided herein represents the opinion of the Fund manager which
is subject to change at any time and is not intended to be a forecast of future
events, a guarantee of future results, nor investment advice.
The Fund is non-diversified, meaning it may concentrate its assets in fewer
individual holdings than a diversified fund. Therefore, the Fund is more exposed
to individual stock volatility than a diversified fund. Mutual fund investing
involves risk; loss of principal is possible.
This report must be preceded or accompanied by a prospectus. Please read it
carefully before you invest or send money.
Distributed by Quasar Distributors, LLC. 08/03
July 18, 2003
Dear Shareholders:
In the second quarter of 2003 the Fund's net asset value per share increased by
1.60%, bringing the total increase in net asset value for the six months ended
June 30, 2003, to 4.21%.(1) Our cash position at the end of the quarter was
$54,884,424, representing 88.22% of the Fund's net assets. While we outperformed
the market in the first quarter, our large cash reserves penalized our
investment performance during the strong rally in the second quarter. We
continue to invest largely in what we believe are high quality companies with
strong balance sheets and good business franchises.
We did not choose to follow the herd and plunge back into the stock market
because we did not think the underlying fundamentals warranted such optimism.
Consequently, we stayed mostly on the sidelines, taking trading profits as
opportunities arose. While with the benefit of hindsight we regret that we did
not participate more fully in the recent market rally, we now feel the rapid
market rise in recent months makes it vulnerable to negative surprises.
In recent years in the face of an unstable economic environment, we pursued a
disciplined and highly conservative course of action. At the end of 1999 we
called the stock market bubble for what it was, yet it has shown a remarkable
resiliency despite many shocks and unsettling events. Nevertheless, we do not
want to get frozen or locked indefinitely into a preconceived state of mind. In
the future we are prepared to become more aggressive and expect to use future
market corrections to take more meaningful positions in equities.
Once again we thank our shareholders for their continuing loyalty and patience.
As always, please call to talk if you have any questions you would like us to
answer.
Sincerely,
/s/ Robert M. Gintel /s/ Edward F. Carroll
- -------------------- ---------------------
Robert M. Gintel Edward F. Carroll
Chairman Investment Manager
(1) The returns shown do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemptions of Fund shares.
GINTEL FUND Statement of Net Assets As of June 30, 2003
(Unaudited)
Number of Shares Cost* Market Value
- --------------------------------------------------------------------------------
Common Stocks**
Financial (2.66%)
-------------------------------------
20,000 American Express Company $746,950 $836,200
30,000 SouthTrust Corporation 784,419 816,000
Innovative Science/Technology (2.34%)
-------------------------------------
35,000 E.I. du Pont de Nemours and Company 1,499,425 1,457,400
Energy (1.88%)
-------------------------------------
25,000 Exxon Mobil Corporation 878,880 897,750
10,000 ENSCO International Incorporated 270,964 269,000
Consumer Products (1.40%)
-------------------------------------
15,000 Colgate-Palmolive Company 796,146 869,250
Pharmaceuticals (1.37%)
-------------------------------------
25,000 Pfizer Inc. 775,500 853,750
Retail/Pharmacy (1.21%)
-------------------------------------
25,000 Walgreen Co. 796,652 752,500
Mail Systems/Technology (0.62%)
-------------------------------------
10,000 Pitney Bowes Inc. 335,917 384,100
Technology (0.28%)
-------------------------------------
10,000 Texas Instruments Incorporated 178,775 176,000
Medical Instruments (0.25%)
-------------------------------------
555,000*** Milestone Scientific Inc. 590,520 158,175
Imputed Brokerage Commission on
Securities Owned 37,000
- --------------------------------------------------------------------------------
Total Common Stocks (12.01%) 7,691,148 7,470,125
- --------------------------------------------------------------------------------
See notes to financial statements.
GINTEL FUND Statement of Net Assets (continued) As of June 30, 2003
(Unaudited)
Principal Amount Cost* Market Value
- --------------------------------------------------------------------------------
Short Term Obligations
$4,309,000 GE Capital Corp. Commercial Paper
1.20%, due 07/01/03 4,309,000 4,309,000
14,007,000 U.S. Treasury Bill
1.18%, due 07/03/03 14,006,315 14,006,315
14,006,000 U.S. Treasury Bill
1.22%, due 07/10/03 14,003,444 14,003,444
12,006,000 U.S. Treasury Bill
1.25%, due 07/17/03 12,001,731 12,001,731
11,026,000 U.S. Treasury Bill
1.17%, due 08/14/03 11,013,333 11,013,333
- -------------------------------------------------------------------------------
Total Short-Term Obligations (88.94%)55,333,823 55,333,823
- -------------------------------------------------------------------------------
Total Investments (100.95%) $63,024,971 62,803,948
==========
Liabilities in Excess of Other Assets (-0.95%) (591,829)
- --------------------------------------------------------------------------------
Net Assets Applicable to Outstanding Shares (100.00%) $62,212,119
================================================================================
Net Asset Value Per Share -- based on 6,983,281 shares
of beneficial interest (offering and redemption price) $8.91
================================================================================
* Cost basis for federal income tax purposes.
** Fund holdings and sector weightings are subject to change at any time and
are not recommendations to buy or sell any security or any sector.
*** Non-income producing investments.
See notes to financial statements.
GINTEL FUND Statement of Operations For the Six Months Ended June 30, 2003
(Unaudited)
Investment Income:
Interest Income $266,330
Dividend Income 78,250
Miscellaneous Income 18,187
-----------------
Total Investment Income 362,767
Expenses:
Administrative expense 361,835
Investment advisory fees 311,872
Other expenses 29,008
-----------------
Total Expenses 702,715
-----------------
Net investment (loss) (339,948)
Net realized gain on investments 3,222,257
Net increase in unrealized depreciation
of investments (300,130)
-----------------
Net gain on investments 2,922,127
-----------------
Net increase in net assets resulting from operations $2,582,179
=================
See notes to financial statements.
GINTEL FUND Statements of Changes in Net Assets
Six Months Ended
June 30, 2003 Year Ended
(Unaudited) December 31, 2002
----------------------------------------
Operations:
Net investment (loss) $(339,948) $(199,817)
Net realized gain (loss) on investments 3,222,257 (47,382,017)
Net increase (decrease) in unrealized appreciation/
depreciation of investments (300,130) 24,308,203
-------------- --------------
Net increase (decrease) from operations 2,582,179 (23,273,631)
Capital Share Transactions:
Proceeds from shares issued 1,344,000 1,238,318
Cost of shares repurchased (4,413,933) (16,150,648)
-------------- --------------
Net (decrease) from capital share transactions (3,069,933) (14,912,331)
Total (decrease) in net assets (487,754) (38,185,962)
Net assets - beginning of period 62,699,873 100,885,834
-------------- --------------
Net assets - end of period $62,212,119 $62,699,873
============== ==============
Net Assets Consist of:
Capital stock $113,188,990 $116,258,923
Undistributed net investment (loss) (1,927,868) (1,587,919)
Undistributed net realized (loss)
from security transactions (48,856,980) (52,079,238)
Unrealized appreciation (depreciation) on investments (192,023) 108,107
-------------- --------------
Net assets $62,212,119 $62,699,873
============== ==============
See notes to financial statements.
GINTEL FUND Financial Highlights
(Per share Income and Capital Changes)
Six Months
Ended Year Ended December 31,
6/30/03
(Unaudited) 2002 2001 2000 1999
------------------------------------------------------
Net Asset Value
Beginning of Year $8.55 $11.24 $13.65 $29.37 $16.18
Income (loss) from
Investment operations
Net investment income (loss) (0.06) (0.02) (0.03) 0.03 (0.09)
Net realized and unrealized
gain (loss) on securities 0.42 (2.67) (2.35) (7.37) 13.28
- ------------------------------------------------------------------------------------------------
Total from Investment Income (Loss) 0.36 (2.69) (2.38) (7.34) 13.19
- ------------------------------------------------------------------------------------------------
Less: Distributions
Net investment income - - (0.03) - -
Capital gains - - - (8.38) -
- ------------------------------------------------------------------------------------------------
Total Distributions - - (0.03) (8.38) -
- ------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $8.91 $8.55 $11.24 $13.65 $29.37
================================================================================================
Total Return 4.2% (23.9%) (17.5%) (34.4%) 81.5%
- ------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period
(in thousands) $62,212 $62,700 $100,886 $130,443 $221,677
Ratio of operating expenses to
average net assets 2.2% 1.9% 2.0% 1.9% 1.9%
Ratio of net investment
(loss) to average net assets (1.2%) (0.2%) (0.1%) (0.6%) (0.5%)
Portfolio turnover rate 101.7% 39.6% 32.1% 62.6% 95.3%
See notes to financial statements.
GINTEL FUND Notes to Financial Statements June 30, 2003
(Unaudited)
(Note A) - Organization:
The Gintel Fund (the "Fund") is a Massachusetts business trust formed under the
laws of the Commonwealth of Massachusetts with authority to issue an unlimited
number of shares of beneficial interest.
(Note B) - Significant Accounting Policies:
1. Security Valuation:
Investments in securities are valued at the last reported sales price on the
last business day of the period, or in the absence of a recorded sale, at the
mean of the closing bid and asked price on that date. Short-term investments are
valued at cost which approximates market value. Securities listed on the NASDAQ
National Market are valued at the NASDAQ Official Closing Price ("NOCP"). Other
securities traded on a national securities exchange are valued at the last sales
price on the exchange where primarily traded. Exchange-traded securities for
which there were no transactions and NASDAQ-traded securities for which there is
no NOCP are valued at the last bid price. Securities for which market quotations
are not readily available are valued at fair value as determined in good faith
by the Board of Directors.
2. 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 and long-term gains to its shareholders.
Therefore, only a nominal Federal income tax provision, if any, is required. The
Fund did not distribute any ordinary income for the year ended December 31,
2002.
3. Other:
As is common in the industry, security transactions are accounted for on the
trade date. Dividend income and distributions to shareholders are recorded on
the ex-dividend date.
Realized gain or loss on security transactions is determined on the basis of
first-in, first-out or specific identification.
4. Use of estimates:
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires the use of estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
(Note C) - Investment Advisory Agreement:
The Fund's Investment Advisory Agreement with Gintel Asset Management, Inc., a
related party, provides for the annual fee of 1% based on the daily value of the
Fund's net assets.
GINTEL FUND Notes to Financial Statements (continued) June 30, 2003
(Unaudited)
(Note D) - Administrative Services Agreement:
The Fund's Administrative Services Agreement provides that in consideration for
the services provided by Gintel & Co., the Fund's Administrator and a related
party, and the payment by the Administrator of substantially all of the Fund's
expenses, including but not limited to brokerage commissions and operating
expenses (but excluding the Investment Advisor's fees, the fees paid to
non-interested Trustees, certain transaction costs, interest, taxes and
extraordinary expenses), the Administrator would receive an Administrative
Services Fee. The Administrator receives a fee of 1.25% of the first $50 million
of the average daily net assets of the Fund, 1.125% of the next $50 million of
the average daily net assets and 1.0% of the average daily net assets in excess
of $100 million.
(Note E) - Imputed Commissions:
The Fund provides for imputed brokerage commissions to be extracted from the
Administrative Services Fee and to be applied to the cost of securities sold and
held. For the six months ended June 30, 2003, the Fund estimated imputed
brokerage commissions to be $20,000 which decreased administrative expense, and
thereby decreased net investment loss by $20,000, increased unrealized
appreciation by $8,000, and decreased realized gains by $12,000.
(Note F) - Other Matters:
1. Investments:
Unrealized appreciation at June 30, 2003 $341,868
Unrealized depreciation at June 30, 2003 (525,890)
Imputed commissions on securities owned (37,000)
------------------
$(221,022)
==================
Six Months Ended
June 30, 2003
------------------
Purchases of securities other than short-term investments $10,553,437
Sales of securities other than short-term investments $16,051,802
2. Capital Stock (in shares):
Six Months Ended Year Ended
June 30, 2003 December 31, 2002
------------- -----------------
Shares issued 154,542 143,733
Shares reinvested 0 0
Shares repurchased (503,869) (1,789,644)
--------- -----------
Net increase (decrease) (349,327) (1,645,911)
========= ===========
GINTEL FUND
The Fund's Statement of Additional Information includes additional information
about the Fund's officers and trustees and is available, without charge, upon
request by calling 1-800-344-3092.
Investment Advisor Gintel Group
Gintel Asset Management, Inc. U.S. Bancorp Fund Services, LLC
6 Greenwich Office Park P.O. Box 701
Greenwich, CT 06831-5197 Milwaukee, WI 53201-0701
203-622-6400 800-344-3092
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable to open-end investment companies.
Item 6. [Reserved]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable to open-end investment companies.
Item 8. [Reserved]
Item 9. Controls and Procedures.
(a) Based on their evaluation of the Registrant's Disclosure Controls and
Procedures as of a date within 90 days of the Filing Date, the Registrant's
President and Treasurer/CFO have determined that the Disclosure Controls
and Procedures (as defined in Rule 30a-2(c) under the Act) are designed to
ensure that information required to be disclosed by the Registrant is
recorded, processed, summarized and reported by the filing date, and that
information required to be disclosed in the report is communicated to the
Registrant's management, as appropriate, to allow timely decisions
regarding required disclosure.
(b) There were no significant changes in the Registrant's internal controls or
in other factors that could significantly affect these controls subsequent
to the date of their evaluation, and there were no corrective actions with
regard to significant deficiencies and material weaknesses.
Item 10. Exhibits.
(a) Not applicable for semi-annual reports.
(b) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Filed herewith.
(c) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Filed herewith.
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: Gintel Fund
Signature and Title: /s/ Stephen G. Stavrides
------------------------
Stephen G. Stavrides, President
Date: August 28, 2003
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.
Registrant: Gintel Fund
Signature and Title: /s/ Stephen G. Stavrides
-------------------------
Stephen G. Stavrides, Treasurer
Date: August 28, 2003