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 811-8546
--------
The Bramwell Funds, Inc.
745 Fifth Avenue
16th Floor
New York, NY 10151
------------------------
(Address of principal executive offices)
Dechert LLP
30 Rockefeller Plaza
New York, NY 10112
------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 698-3500
--------------
Date of fiscal year end: June 30
-------
Date of reporting period: June 30, 2005
-------------
ITEM 1. REPORTS TO STOCKHOLDERS.
The following is a copy of the report transmitted to shareholders pursuant to
Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1)
Bramwell Funds [LOGO]
Annual Report
June 30, 2005
BRAMWELL GROWTH FUND
BRAMWELL FOCUS FUND
ELIZABETH R. BRAMWELL, CFA
PRESIDENT AND
CHIEF INVESTMENT OFFICER
"FOCUSED ON THE FUTURE,
GUIDED BY THE PAST"
The Bramwell Funds, Inc.
1-800-BRAMCAP
1-800-272-6227
WWW.BRAMWELLFUNDS.COM
Bramwell Funds [LOGO]
DEAR FELLOW SHAREHOLDERS:
INVESTMENT RESULTS - QUARTER ENDED JUNE 30, 2005
In the June quarter, the Bramwell Growth Fund rose 0.15% to $19.42 net asset
value per share and the Bramwell Focus Fund rose 0.87% to $9.31 net asset value
per share while the S&P 500((R)) Stock Index rose 1.37%. Value stocks generally
continued to outperform growth stocks although financial metrics, such as
dividend yields, narrowed. For the fiscal year ended June 30, 2005, the Growth
Fund rose 1.85% and the Focus Fund declined (1.69)% while the S&P 500((R)) Stock
Index increased 6.32%. See tables on pages 5 and 8 for further historical
performance.
In July, growth stocks outperformed; the Growth Fund rose 5.66% and the Focus
Fund rose 7.30% compared to 3.72% for the S&P 500((R)) Stock Index, bringing
one-year performance to 11.94% and 13.14%, respectively, compared to 14.05% for
the S&P 500((R)) Stock Index.
The Growth Fund received a 4-Star Overall Morningstar Rating(TM) (****) in the
U.S.-domiciled Large Growth category as of June 30, 2005. The Growth Fund also
received 2 stars for the 3-year period and 4 stars for the 5- and 10-year
periods when rated against 1,074, 817 and 272 Large Growth funds, respectively.
The Focus Fund received a 3-Star Overall Morningstar RatingTM (***) in the
U.S.-domiciled Large Growth category as of June 30, 2005. The Focus Fund also
received 2 stars for the 3-year and 4 stars for the 5-year periods when rated
against 1,074 and 817 Large Growth funds, respectively.(a)
COMMENTARY
Reviewing the June 2005 fiscal year, brisk economic expansion continued
throughout the period. Corporate profits were strong and employment continued to
rise. Inflation was modest despite higher energy prices. Short-term interest
rates rose in response to higher Fed Funds rates, but long-term interest rates
were actually lower than a year ago, e.g., the 10-year Treasury note yielded
4.00% in June 2005 compared to 4.73% in June 2004. Housing was strong
throughout.
(a) For each fund with at least a three-year history, Morningstar calculates a
Morningstar Rating(TM) based on a Morningstar Risk-Adjusted Return measure
that accounts for variation in a fund's monthly performance (including the
effects of sales charges, loads, and redemption fees), placing more
emphasis on downward variations and rewarding consistent performance. The
top 10% of funds in each category receive 5 stars, the next 22.5% receive 4
stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the
bottom 10% receive 1 star. The Overall Morningstar Rating(TM) for a fund is
derived from a weighted average of the performance figures associated with
its three-, five- and ten-year (if applicable) Morningstar Rating(TM)
metrics. Morningstar ratings are proprietary and are not warranted to be
accurate, complete or timely. Neither Morningstar nor its content providers
are responsible for any damages or losses arising from any use of this
information. Past performance is no guarantee of future results. (C) 2005
Morningstar, Inc. All Rights Reserved.
Annual Report
Bramwell Funds [LOGO]
Industries that contributed most to the Growth Fund's performance over the
12-month period were energy, retailing and restaurants. Outperforming
stocks were: J.C. Penney, Walgreen, UnitedHealth, ExxonMobil, Gilead
Sciences, Chicago Mercantile Exchange and Coach. Electronics produced the
most disappointing results. Specific stocks that did poorly were 3M, Intel,
Pfizer, Martek Biosciences and Cisco.
Industries that contributed most to the Focus Fund's performance over the
12-month period were retailing and healthcare. Outperforming stocks were
Autodesk, Coach, Kyphon, Gilead Sciences and J.C. Penney. As with the
Growth Fund, electronics contributed the most disappointing performance.
Specific stocks that did poorly were Analog Devices, Martek Biosciences and
KLA Tencor.
Following three strong quarters, strong economic growth continued unabated
in the June quarter. The U.S. dollar also strengthened as French and Dutch
voters rejected the European Union's proposed constitution. The U.S. trade
deficit declined in the quarter from earlier expectations on rising exports
and the Federal deficit declined as the result of higher than projected tax
revenues. The United States continued to be a significant engine of global
growth along with emerging countries.
Industries that did particularly well in the June quarter for the Growth
Fund were healthcare, energy, financial services and retailing. Top
performing stocks were Gilead Sciences, Chicago Mercantile Exchange,
Kyphon, Coach, UnitedHealth, Bunge and Arch Coal. Underperforming stocks
were 3M, Diebold, FedEx, IBM and Illinois Tool Works.
Industries that did well for the Focus Fund in the June quarter were also
healthcare, energy and retailing. Top performing stocks were Kyphon, Gilead
Sciences, ITT Industries, Patterson-UTI Energy and Jacobs Engineering.
Underperforming stocks were 3M, Diebold and Noble Corp.
Both Funds may own the same stocks, but weightings may vary given that the
Focus Fund invests in a limited number of 20-30 stocks.
OUTLOOK
We believe that we are in the early stages of broad global expansion and
that increased global trade and rising standards of living in emerging
markets such as China, India, Eastern Europe and Brazil are key investment
themes going forward. Demand for basic materials, technology, consumer and
industrial goods and financial services should all increase for many years
to come.
Inflation is expected to stay low given continued productivity gains,
competition and increased supply. Corporate managements are expected to
hire and invest in plant and equipment at a non-inflationary pay-as-you-go
rate. The Chinese revaluation of 2% is expected to be absorbed within the
supply chain and not expected to change trade flows.
Annual Report
Bramwell Funds [LOGO]
Short-term interest rates are expected to rise somewhat further over the
next few months, but long-term rates are not expected to move proportionately
as much. We believe that Federal Reserve tightening is designed to deter
speculative activity but not to deter economic growth.
We believe that American companies with global operations, intellectual
capital and financial strength are well positioned to grow and drive growth
in expanding emerging markets. Many U.S. companies already derive more than
half of their sales outside the United States, and we expect this
percentage to rise significantly higher over time given that the U.S.
population represents only 5% of the global population and that foreign
markets are larger and less penetrated and provide potentially greater
growth opportunities. Investing in U.S. domiciled companies, many of which
are regarded as the best managed in the world, should provide investors
with geographic diversification and participation in global growth.
Areas of investment opportunity include:
o Infrastructure development to facilitate global trade. Roads, ports,
bridges, power plants and comunication stand to benefit.
o Industrial companies that will benefit from increased capital spending which
we see extending out into at least 2006-2007.
o Engineering companies.
o Basic materials, consumer goods, cars, appliances, housing and financial
products should benefit as standards of living rise in emerging markets.
o Global manufacturers.
o Consumer brands with global appeal.
o Global companies with competitive manufacturing, marketing and financial
expertise.
o Companies in front of favorable demographic trends, e.g.,
orthopedic reconstruction and housing.
o New products, e.g., continued digitalization of consumer products such as
cameras and TVs, enhanced wireless communications, and multiple
medical devices.
o Potential benefits from continued move to free markets, private ownership
and democracies around the world.
We anticipate more emphasis to be placed on total return, i.e., capital
gains plus dividends, especially with favorable federal tax rates at 15% on
long-term capital gains and dividends. With corporate balance sheets flush
with cash, more stock repurchases and higher dividend payouts are expected.
Valuations appear attractive with estimated 2005 growth of 19% for the
Growth Fund and 23% for the Focus Fund and selling at 1.0 and 0.8
price/earnings ratios to growth, respectively. After having been out of
favor since the bubble year of 1999, we anticipate investment strategies to
tilt more
Annual Report
Bramwell Funds [LOGO]
towards growth going forward, given favorable metrics and the fact that
growth is in line with corporate and national strategies.
FUND INFORMATION
Further information may be had from our Web site WWW.BRAMWELLFUNDS.COM
including daily and historic performance as well as monthly portfolio
holdings and quarterly shareholder letters. Further information may also be
had by calling 1-800-BRAMCAP (1-800-272-6227). The NASDAQ symbol for the
Focus Fund is BRFOX and for the Growth Fund, BRGRX.
Equity markets are inherently volatile and investors are encouraged to
invest over time to smooth the effects of volatility. To facilitate regular
investment programs, an Automatic Investment Plan, with initial and
subsequent investment minimums of $50 per month, is available upon request.
Sincerely,
/s/ Elizabeth R. Bramwell
Elizabeth R. Bramwell, CFA
President and Chief Investment Officer
July 31, 2005
The outlook and opinions expressed above represent the views of the
investment adviser as of July 31, 2005. They are subject to change as well
as equity positions as market and economic events unfold.
Annual Report
Bramwell Funds [LOGO]
BRAMWELL GROWTH FUND
JUNE 30, 2005
The Bramwell Growth Fund is a no-load, diversified fund that generally invests
in a portfolio of 60-90 stocks of companies that the Adviser believes have
above-average growth potential.
MAJOR INDUSTRY HOLDINGS
---------------------------------------------
Industrial Products 14.8%
Retailing 14.7
Healthcare Products 13.9
Energy 11.6
Financial Services 6.2
Restaurants 4.4
Information Processing Software 4.3
Information Processing Equipment 4.2
Business Services 3.0
Food Products 2.8
-----
79.9%
MAJOR EQUITY HOLDINGS
---------------------------------------------
Walgreen 4.2%
General Electric 3.5
J.C. Penney 3.5
3M 3.1
ExxonMobil 3.0
Dell 2.7
Medtronic 2.7
Gilead 2.3
Procter & Gamble 2.3
ITT 2.1
------
29.4%
COMPARATIVE INVESTMENT June Calendar One Three Five Ten Since
RETURNS (6/30/05) Q Year to Date Year Years Years Years Inception*
- ----------------------------------------------------------------------------------------------------
BRAMWELL GROWTH FUND 0.15% (2.22)% 1.85% 1.90% (5.32)% 8.48% 9.82%
S&P 500(R) STOCK INDEX 1.37 (0.81) 6.32 8.28 (2.37) 9.94 11.08
RUSSELL 1000(R) GROWTH INDEX 2.46 (1.72) 1.68 7.26 (10.36) 7.40 9.06
[CHART]
THE BRAMWELL GROWTH FUND
Plot points for growth of $10,000 investment graph
THE BRAMWELL
GROWTH FUND S&P 500 RUSSELL 1000
------------ ------------ ------------
8/1/1994 $10,000 $10,000 $10,000
6/30/1995 12,311 12,206 12,617
6/30/1996 14,653 15,380 16,127
6/30/1997 17,906 20,717 21,180
6/30/1998 24,971 26,965 27,829
6/30/1999 29,811 33,101 35,417
6/30/2000 36,528 35,501 44,507
6/30/2001 29,820 30,236 28,407
6/30/2002 26,260 24,797 20,882
6/30/2003 24,237 24,861 21,497
6/30/2004 27,285 29,610 25,339
6/30/2005 27,789 31,483 25,766
This chart assumes an initial investment of $10,000 made on 8/1/94 (inception).
Returns shown for the Bramwell Growth Fund include the reinvestment of all
dividends and are net of expenses. The annual expense ratio is contractually
capped by the Adviser at 1.75% through December 31, 2005 which favorably
affected performance through June 30, 1997. Past performance is not predictive
of future performance. Investment returns and principal value will fluctuate, so
that shares, when redeemed, may be worth more or less than the original cost.
The total returns table and chart do not reflect the deduction of taxes that a
shareholder might pay on Fund distributions or on the redemption of Fund shares.
*From August 1, 1994. Returns for periods greater than one year are compound
average annual rates of return. The S&P 500(R) Stock Index is an unmanaged index
of 500 selected common stocks, most of which are listed on the New York Stock
Exchange. The Index is adjusted for dividends, weighted toward stocks with large
market capitalizations and represents approximately two-thirds of the total
market value of all domestic common stocks. The Russell 1000(R) Growth Index is
a market capitalization-weighted index of the 1,000 largest U.S.-domiciled
companies with higher price-to-book ratios and higher growth rates.
Annual Report
Bramwell Funds [LOGO]
BRAMWELL GROWTH FUND
PORTFOLIO OF INVESTMENTS - JUNE 30, 2005
SHARES VALUE
-------- -------
COMMON STOCKS - 96.95%
AUTOMOTIVE/HEAVY
EQUIPMENT - 2.59%
Caterpillar, Inc. 24,000 $2,287,440
Paccar, Inc. 33,000 2,244,000
------------
4,531,440
------------
BUSINESS SERVICES - 3.03%
Chicago Bridge & Iron Co., NV 45,000 1,028,700
Euronet Worldwide, Inc.* 25,000 726,750
Jacobs Engineering Group, Inc.* 32,000 1,800,320
Robert Half International, Inc. 70,000 1,747,900
------------
5,303,670
------------
CHEMICALS/METALS - 2.00%
Praxair, Inc. 75,000 3,495,000
------------
COMMUNICATIONS - 1.90%
Cisco Systems, Inc.* 135,000 2,579,850
Nokia OYJ - ADR 45,000 748,800
------------
3,328,650
------------
CONSUMER PRODUCTS - 2.26%
Procter & Gamble Co. 75,000 3,956,250
------------
ELECTRONICS - 1.70%
Intel Corp. 50,000 1,303,000
Linear Technology Corp. 15,000 550,350
Texas Instruments, Inc. 40,000 1,122,800
------------
2,976,150
------------
ENERGY - 11.65%
Arch Coal, Inc. 25,000 1,361,750
ConocoPhillips 20,000 1,149,800
Devon Energy Corp. 20,000 1,013,600
EOG Resources, Inc. 20,000 1,136,000
ExxonMobil Corp. 90,000 5,172,300
Nabors Industries Ltd.* 20,000 1,212,400
Noble Corp. 38,000 2,337,380
Patterson-UTI Energy, Inc. 65,000 1,808,950
Peabody Energy Corp. 35,000 1,821,400
SHARES VALUE
-------- -------
ENERGY - 11.65% (cont'd.)
Schlumberger Ltd. 25,000 $1,898,500
St. Mary Land & Exploration Co. 20,000 579,600
Weatherford International Ltd.* 15,000 869,700
------------
20,361,380
------------
FINANCIAL SERVICES - 6.24%
American Express Co. 30,000 1,596,900
Bear Stearns Companies, Inc. (The) 11,000 1,143,340
BlackRock, Inc. 21,000 1,689,450
Chicago Mercantile Exchange 7,000 2,068,500
Goldman Sachs Group, Inc. (The) 19,000 1,938,380
Wells Fargo & Co. 40,000 2,463,200
------------
10,899,770
------------
FOOD PRODUCTS - 2.77%
Bunge Ltd. 32,000 2,028,800
Corn Products International, Inc. 25,000 594,000
Hershey Foods Corp. 20,000 1,242,000
Kellogg Co. 10,000 444,400
PepsiCo, Inc. 10,000 539,300
------------
4,848,500
------------
HEALTHCARE PRODUCTS - 13.89%
Amgen, Inc.* 30,000 1,813,800
Gilead Sciences, Inc.* 90,000 3,959,100
Kyphon, Inc.* 61,000 2,122,190
Medtronic, Inc. 90,000 4,661,100
Novartis AG - ADR 60,000 2,846,400
Pfizer, Inc. 15,000 413,700
Roche Holding AG - ADR 27,500 1,739,375
Stryker Corp. 72,500 3,448,100
Zimmer Holdings, Inc.* 43,000 3,275,310
------------
24,279,075
------------
HEALTHCARE SERVICES - 2.09%
UnitedHealth Group, Inc. 70,000 3,649,800
------------
INDUSTRIAL PRODUCTS - 14.85%
3M 74,500 5,386,350
Donaldson Co., Inc. 40,000 1,213,200
Emerson Electric Co. 45,000 2,818,350
Annual Report
Bramwell Funds [LOGO]
PORTFOLIO OF INVESTMENTS - JUNE 30, 2005 (CONTINUED)
SHARES VALUE
-------- -------
INDUSTRIAL PRODUCTS - 14.85% (cont'd.)
General Electric Co. 175,000 $6,063,750
Illinois Tool Works, Inc. 43,000 3,426,240
Ingersoll-Rand Co., Ltd. 14,000 998,900
ITT Industries, Inc. 38,000 3,709,940
Molex, Inc., Class A 40,000 939,200
Parker-Hannifin Corp. 22,500 1,395,225
------------
25,951,155
------------
INFORMATION PROCESSING
EQUIPMENT - 4.20%
Dell Inc.* 120,000 4,741,200
EMC Corp.* 190,000 2,604,900
------------
7,346,100
------------
INFORMATION PROCESSING
SOFTWARE - 4.33%
Autodesk, Inc. 40,000 1,374,800
Microsoft Corp. 145,000 3,601,800
SAP AG - ADR 60,000 2,598,000
------------
7,574,600
------------
LEISURE TIME - 1.62%
Brunswick Corp. 40,000 1,732,800
Carnival Corp. 20,000 1,091,000
------------
2,823,800
------------
RESTAURANTS - 4.40%
Applebee's International, Inc. 50,000 1,324,500
Cheesecake Factory, Inc.* 55,000 1,910,150
Domino's Pizza, Inc. 45,000 1,001,700
McDonald's Corp. 40,000 1,110,000
Yum! Brands, Inc. 45,000 2,343,600
------------
7,689,950
------------
RETAILING - 14.66%
Best Buy Co., Inc. 5,000 342,750
Coach, Inc.* 60,000 2,014,200
Home Depot, Inc. 45,000 1,750,500
J.C. Penney Co., Inc. 115,000 6,046,700
Kohl's Corp.* 5,000 279,550
Lowe's Companies, Inc. 30,000 1,746,600
Staples, Inc. 55,000 1,172,600
Target Corp. 10,000 544,100
SHARES VALUE
-------- -------
RETAILING - 14.66% (cont'd.)
Tiffany & Co. 45,000 $1,474,200
Wal-Mart Stores, Inc. 60,000 2,892,000
Walgreen Co. 160,000 7,358,400
------------
25,621,600
------------
TRANSPORTATION - 2.77%
Canadian Pacific Railway Ltd. 50,000 1,725,500
FedEx Corp. 30,000 2,430,300
United Parcel Service, Inc. 10,000 691,600
------------
4,847,400
------------
TOTAL COMMON STOCKS
(Cost $127,328,319) 169,484,290
------------
PRINCIPAL
AMOUNT
-----------
VARIABLE RATE
DEMAND NOTE - 2.74%
U.S. Bancorp, 3.08%
(Cost $4,799,000) $4,799,000 4,799,000
------------
TOTAL INVESTMENTS - 99.69%
(Cost $132,127,319) 174,283,290
Other Assets less Liabilities - 0.31% 534,580
------------
NET ASSETS - 100.00%
(9,001,019 shares outstanding) $174,817,870
============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE $19.42
============
*Non-income producing security See notes to
financial statements.
Annual Report
Bramwell Funds [LOGO]
BRAMWELL FOCUS FUND
JUNE 30, 2005
The Bramwell Focus Fund is a no-load, non-diversified fund with a concentrated
portfolio, normally comprised of 20-30 securities, that invests primarily in
common stocks of companies that the Adviser believes have above-average growth
potential. Because of its concentration, the Focus Fund should be regarded as a
more aggressive portfolio than the Growth Fund in that the price movements of a
single stock may have a greater positive or negative effect on overall portfolio
perfomance.
MAJOR INDUSTRY HOLDINGS
---------------------------------------------
Industrial Products 16.0%
Retailing 15.2
Healthcare Products 12.5
Energy 12.2
Business Services 10.1
------
66.0%
MAJOR EQUITY HOLDINGS
---------------------------------------------
J.C. Penney 5.3%
ITT 4.9
Kyphon 4.4
Jacobs Engineering 4.3
Stryker 4.2
------
23.1%
COMPARATIVE INVESTMENT June Calendar One Three Five Since
RETURNS (6/30/05) Q Year to Date Year Years Years Inception*
- -------------------------------------------------------------------------------------------
BRAMWELL FOCUS FUND 0.87% (5.48)% (1.69)% 1.63% (5.21)% (1.12)%
S&P 500(R) STOCK INDEX 1.37 (0.81) 6.32 8.28 (2.37) (0.83)
RUSSELL 1000(R) GROWTH INDEX 2.46 (1.72) 1.68 7.26 (10.36) (6.05)
[CHART]
THE BRAMWELL FOCUS FUND
Plot points for growth of $10,000 investment graph
The Bramwell
Focus Fund S&P 500 Russell 1000
------------ ------------ ------------
11/01/1999 $10,000 $10,000 $10,000
12/31/1999 11,940 10,804 11,636
6/30/2000 12,260 10,758 12,128
12/31/2000 11,410 9,821 9,026
6/30/2001 9,969 9,163 7,741
12/31/2001 9,323 8,653 7,183
6/30/2002 8,940 7,515 5,691
12/31/2002 7,701 6,741 5,180
6/30/2003 8,154 7,534 5,858
12/31/2003 9,283 8,675 6,721
6/30/2004 9,545 8,973 6,905
12/31/2004 9,928 9,619 7,144
6/30/2005 9,384 9,541 7,021
This chart assumes an initial investment of $10,000 made on 10/31/99
(inception). Returns shown for the Bramwell Focus Fund include the reinvestment
of all dividends and are net of expenses. The annual expense ratio is
contractually capped by the Adviser at 1.75% through December 31, 2005, which
favorably affected performance since inception. Past performance is not
predictive of future performance. Investment returns and principal value will
fluctuate, so that shares, when redeemed, may be worth more or less than the
original cost.
The total returns table and chart do not reflect the deduction of taxes that a
shareholder might pay on Fund distributions or on the redemption of Fund shares.
*From October 31, 1999. Returns for periods greater than one year are compound
average annual rates of return. The S&P 500((R)) Stock Index is an unmanaged
index of 500 selected common stocks, most of which are listed on the New York
Stock Exchange. The Index is adjusted for dividends, weighted toward stocks with
large market capitalizations and represents approximately two-thirds of the
total market value of all domestic common stocks. The Russell 1000((R)) Growth
Index is a market capitalization-weighted index of the 1,000 largest
U.S.-domiciled companies with higher price-to-book ratios and higher
growth rates.
Annual Report
Bramwell Funds [LOGO]
BRAMWELL FOCUS FUND
PORTFOLIO OF INVESTMENTS - JUNE 30, 2005
SHARES VALUE
-------- -------
COMMON STOCKS - 96.49%
AUTOMOTIVE/HEAVY
EQUIPMENT - 6.17%
Caterpillar, Inc. 3,000 $285,930
Paccar, Inc. 3,000 204,000
----------
489,930
----------
BUSINESS SERVICES - 10.12%
Euronet Worldwide, Inc.* 10,000 290,700
Jacobs Engineering Group, Inc.* 6,000 337,560
Robert Half International, Inc. 7,000 174,790
----------
803,050
----------
COMMUNICATIONS - 2.41%
Cisco Systems, Inc.* 10,000 191,100
----------
ENERGY - 12.25%
Devon Energy Corp. 5,000 253,400
Patterson-UTI Energy, Inc. 10,000 278,300
Peabody Energy Corp. 4,000 208,160
Weatherford International Ltd.* 4,000 231,920
----------
971,780
----------
FINANCIAL SERVICES - 9.52%
Bear Stearns Companies, Inc. (The) 2,000 207,880
BlackRock, Inc. 3,000 241,350
Goldman Sachs Group, Inc. (The) 3,000 306,060
----------
755,290
----------
HEALTHCARE PRODUCTS - 12.50%
Kyphon, Inc.* 10,000 347,900
Medtronic, Inc. 6,000 310,740
Stryker Corp. 7,000 332,920
----------
991,560
----------
INDUSTRIAL PRODUCTS - 16.00%
3M 4,000 289,200
Emerson Electric Co. 5,000 313,150
General Electric Co. 8,000 277,200
ITT Industries, Inc. 4,000 390,520
----------
1,270,070
----------
INFORMATION PROCESSING
EQUIPMENT - 1.49%
Dell Inc.* 3,000 118,530
----------
SHARES VALUE
-------- -------
INFORMATION PROCESSING
SOFTWARE - 3.00%
SAP AG - ADR 5,500 $238,150
----------
RESTAURANTS - 4.81%
Cheesecake Factory, Inc.* 8,000 277,840
Yum! Brands, Inc. 2,000 104,160
----------
382,000
----------
RETAILING - 15.18%
J.C. Penney Co., Inc. 8,000 420,640
Lowe's Companies, Inc. 3,000 174,660
Staples, Inc. 11,000 234,520
Wal-Mart Stores, Inc. 3,000 144,600
Walgreen Co. 5,000 229,950
----------
1,204,370
----------
TRANSPORTATION - 3.04%
Canadian Pacific Railway Ltd. 7,000 241,570
----------
TOTAL COMMON STOCKS
(Cost $7,250,604) 7,657,400
----------
PRINCIPAL
AMOUNT
-----------
VARIABLE RATE
DEMAND NOTE - 5.61%
U.S. Bancorp, 3.08%
(Cost $445,300) $445,300 445,300
----------
TOTAL INVESTMENTS - 102.10%
(Cost $7,695,904) 8,102,700
Liabilities less Other Assets - (2.10)% (166,430)
----------
NET ASSETS - 100.00%
(852,291 shares outstanding) $7,936,270
==========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE $9.31
==========
*Non-income producing security
See notes to financial statements.
Annual Report
Bramwell Funds [LOGO]
THE BRAMWELL FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2005
GROWTH FUND FOCUS FUND
------------ ------------
ASSETS:
Investments at value (cost $132,127,319 and
$7,695,904, respectively) $174,283,290 $ 8,102,700
Receivable for securities sold 2,059,974 --
Dividends and interest receivable 106,268 4,923
Prepaid and other assets 22,882 6,624
Receivable from Adviser -- 13,263
------------ ------------
Total Assets 176,472,414 8,127,510
------------ ------------
LIABILITIES:
Payable for securities purchased 1,317,631 145,630
Accrued investment advisory fees 146,007 6,658
Accrued expenses 154,404 37,288
Accrued distribution fees 36,502 1,664
------------ ------------
Total Liabilities 1,654,544 191,240
------------ ------------
NET ASSETS $174,817,870 $ 7,936,270
============ ============
NET ASSETS CONSIST OF:
Capital stock $122,672,882 $ 8,596,348
Accumulated net realized gain (loss) on investments 9,989,017 (1,066,874)
Net unrealized appreciation on investments 42,155,971 406,796
------------ ------------
NET ASSETS $174,817,870 $ 7,936,270
============ ============
CAPITAL STOCK, $.0001 par value
Authorized 200,000,000 200,000,000
Issued and outstanding 9,001,019 852,291
NET ASSET VALUE, REDEMPTION PRICE
AND OFFERING PRICE PER SHARE $ 19.42 $ 9.31
============ ============
See notes to financial statements.
Annual Report
Bramwell Funds [LOGO]
THE BRAMWELL FUNDS, INC.
STATEMENTS OF OPERATIONS
FOR THE FISCAL YEAR ENDED
JUNE 30, 2005
GROWTH FUND FOCUS FUND
------------ ------------
INVESTMENT INCOME:
Dividends $ 1,978,364 $ 81,595
Interest 118,787 8,839
------------ ---------
Total Investment Income 2,097,151 90,434
------------ ---------
EXPENSES:
Investment advisory fees 1,936,885 91,903
Distribution fees 484,221 22,976
Fund administration and accounting fees 207,766 60,000
Professional fees 196,503 21,676
Shareholder servicing fees 174,757 18,218
Reports to shareholders 65,367 3,226
Custody fees 49,444 7,144
Federal and state registration fees 38,294 14,851
CCO fees 34,844 1,648
Directors' fees 31,109 27,710
Proxy vote expenses 1,877 584
Other 52,698 5,757
------------ ---------
Total expenses before waiver 3,273,765 275,693
Waiver of expenses and fees -- (114,862)
------------ ---------
Net Expenses 3,273,765 160,831
------------ ---------
NET INVESTMENT LOSS (1,176,614) (70,397)
------------ ---------
REALIZED AND UNREALIZED
GAINS (LOSSES):
Net realized gain on investments 14,782,505 668,998
Change in net unrealized appreciation/depreciation
on investments (10,593,135) (837,148)
------------ ---------
Net Gain (Loss) on Invesments 4,189,370 (168,150)
------------ ---------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $ 3,012,756 $(238,547)
============ =========
See notes to financial statements.
Annual Report
Bramwell Funds [LOGO]
BRAMWELL GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
FISCAL YEAR FISCAL YEAR
ENDED ENDED
JUNE 30, 2005 JUNE 30, 2004
------------- --------------
OPERATIONS:
Net investment loss $ (1,176,614) $ (1,908,790)
Net realized gain on investments 14,782,505 16,388,420
Change in net unrealized appreciation/depreciation
on investments (10,593,135) 13,420,269
------------ ------------
Net increase in net assets resulting
from operations 3,012,756 27,899,899
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 12,837,430 34,124,829
Proceeds from reinvestment of dividends 3,366,716 --
Redemption of shares (57,784,326) (74,607,503)
Redemption fees 408 4,886
------------ ------------
Net decrease in net assets resulting from
capital share transactions (41,579,772) (40,477,788)
------------ ------------
DIVIDENDS PAID FROM:
Net realized gains (3,793,293) --
------------ ------------
TOTAL DECREASE IN NET ASSETS (42,360,309) (12,577,889)
NET ASSETS:
Beginning of year 217,178,179 229,756,068
------------ ------------
End of year $174,817,870 $217,178,179
============ ============
TRANSACTIONS IN SHARES:
Shares sold 672,287 1,822,712
Dividends reinvested 174,804 --
Shares redeemed (3,023,268) (3,958,597)
------------ ------------
Net decrease (2,176,177) (2,135,885)
============ ============
See notes to financial statements.
Annual Report
Bramwell Funds [LOGO]
BRAMWELL FOCUS FUND
STATEMENTS OF CHANGES IN NET ASSETS
FISCAL YEAR FISCAL YEAR
ENDED ENDED
JUNE 30, 2005 JUNE 30, 2004
------------ --------------
OPERATIONS:
Net investment loss $ (70,397) $ (103,281)
Net realized gain on investments 668,998 1,165,151
Change in net unrealized appreciation/depreciation
on investments (837,148) 610,688
----------- -----------
Net increase (decrease) in net assets resulting
from operations (238,547) 1,672,558
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 303,349 2,970,355
Redemption of shares (3,044,361) (3,007,604)
Redemption fees 244 23
----------- -----------
Net decrease in net assets resulting from
capital share transactions (2,740,768) (37,226)
----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS (2,979,315) 1,635,332
NET ASSETS:
Beginning of year 10,915,585 9,280,253
----------- -----------
End of year $ 7,936,270 $10,915,585
=========== ===========
TRANSACTIONS IN SHARES:
Shares sold 32,897 336,685
Shares redeemed (333,282) (331,485)
----------- -----------
Net increase (decrease) (300,385) 5,200
=========== ===========
See notes to financial statements.
Annual Report
Bramwell Funds [LOGO]
THE BRAMWELL FUNDS, INC.
FINANCIAL HIGHLIGHTS
GROWTH FUND FOCUS FUND
------------------------------------------------ ------------------------------------------------
FISCAL FISCAL FISCAL FISCAL FISCAL FISCAL FISCAL FISCAL FISCAL FISCAL
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
SELECTED PER SHARE DATA(1) 2005 2004 2003 2002 2001 2005 2004 2003 2002 2001
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
NET ASSET VALUE, BEGINNING
OF YEAR $19.43 $17.26 $18.70 $23.00 $30.48 $9.47 $8.09 $8.87 $9.89 $12.26
INCOME FROM INVESTMENT
OPERATIONS:
Net investment loss (0.13) (0.17) (0.15) (0.16) (0.10) (0.08) (0.09) (0.08) (0.10) (0.06)
Net realized and unrealized
gains (losses) on securities 0.49 2.34 (1.29) (2.53) (5.16) (0.08) 1.47 (0.70) (0.92) (2.22)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 0.36 2.17 (1.44) (2.69) (5.26) (0.16) 1.38 (0.78) (1.02) (2.28)
LESS DISTRIBUTIONS:
Distributions from capital gains (0.37) -- -- (1.61) (2.22) -- -- -- -- (0.09)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF YEAR $19.42 $19.43 $17.26 $18.70 $23.00 $9.31 $9.47 $8.09 $8.87 $9.89
======== ======== ======== ======== ======== ======== ======== ======== ======== ========
TOTAL RETURN 1.85% 12.57% (7.70)% (11.94)% (18.36)% (1.69)% 17.06% (8.79)% (10.31)% (18.69)%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of year (000s) $174,818 $217,178 $229,756 $191,395 $221,630 $7,936 $10,916 $9,280 $6,623 $ 7,134
Ratio of expenses to average
net assets(2) 1.69% 1.64% 1.68% 1.63% 1.53% 1.75% 1.75% 1.75% 1.75% 1.75%
Ratio of net investment
loss to average net assets(2) (0.61)% (0.81)% (1.01)% (0.84)% (0.37)% (0.77)% (0.91)% (1.25)% (1.11)% (0.57)%
Portfolio turnover rate 63% 47% 51% 66% 57% 200% 172% 154% 138% 117%
Note: The Financial Highlights table is intended to help you understand the
financial performance of the Growth Fund and the Focus Fund for the past 5
years. Certain information reflects financial results for a single Fund share.
The total returns in the table represent the rate that an investor would have
earned or lost on an investment in the Fund (assuming reinvestment of all
dividends and distributions).
(1) Information presented relates to a share of capital stock outstanding for
the entire period.
(2) Net of reimbursements and waivers for the Focus Fund. Absent reimbursements
and waivers of expenses by the Adviser, the ratio of expenses and net
investment loss to average net assets for the years ended June 30, 2005,
June 30, 2004, June 30, 2003, June 30, 2002 and June 30, 2001, would have
been 3.00% and (2.02)%, 2.58% and (1.74)%, 3.09% and (2.59)%, 3.28% and
(2.64)%, and 3.10% and (1.92)%, respectively.
See notes to financial statements.
Annual Report
Bramwell Funds [LOGO]
THE BRAMWELL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2005
1. ORGANIZATION
The Bramwell Funds, Inc. (the "Funds") was incorporated on June 3, 1994 and is
registered as an open-end, management investment company organized as a series
fund under the Investment Company Act of 1940 (the "1940 Act"), as amended. The
Funds consist of two investment portfolios: the Bramwell Growth Fund and the
Bramwell Focus Fund. The Bramwell Growth Fund, which is a separate diversified
portfolio, commenced operations on August 1, 1994. The Bramwell Focus Fund,
which is a separate non-diversified portfolio, was launched on November 1, 1999.
Bramwell Capital Management, Inc. ("BramCap") is the Funds' investment adviser.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with accounting principles generally accepted in the
United States of America ("GAAP"). The presentation of financial statements in
conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates and
assumptions.
a) Investment Valuation
A security listed or traded on a recognized stock exchange is valued at its last
sale price prior to the time when assets are valued on the principal exchange on
which the security is traded. If no sale is reported at that time, the most
current bid price will be used. Securities traded primarily on the NASDAQ Stock
Market are normally valued at the NASDAQ Official Closing Price ("NOCP"). All
other securities for which over-the-counter market quotations are readily
available are valued at the most current bid price. Debt securities which will
mature in more than 60 days, as well as equity securities, are valued at prices
furnished by a pricing service approved by the Board of Directors.
Whenever a furnished price is significantly different from the previous day's
furnished price, BramCap will review the price to determine if it is
appropriate. Debt securities which will mature in 60 days or less are valued at
amortized cost, which approximates market value. Variable rate demand notes are
valued at cost which approximates market value. These notes are unsecured and
could present credit risk to the extent the issuer defaults on its payment
obligation. The credit-worthiness of the issuer is monitored and these notes
have been determined by BramCap to present minimal credit risk. When quotations
are not readily available or are unreliable, investments are valued at fair
value according to procedures adopted by the Board of Directors.
b) Option Contracts
The Funds may write covered put or call options. Premiums received by a
Fund upon
Annual Report
Bramwell Funds [LOGO]
writing put or call options are recorded as an asset with a corresponding
liability which is subsequently adjusted to the current market value of the
option. When an option expires, is exercised, or is closed, the Fund realizes a
gain or loss, and the liability is eliminated. The Fund continues to bear the
risk of adverse movements in the price of the underlying asset during the period
in which the option is outstanding, although any potential loss during the
period would be reduced by the amount of the option premium received.
c) Short Sales
The Funds may make limited short sales of securities. A short sale is a
transaction in which a Fund sells a security it does not own in anticipation
that the market price of that security will decline. To complete such a
transaction, the Funds must borrow the security to deliver to the buyer upon the
short sale; the Funds are then obligated to replace the security borrowed by
purchasing it in the open market at some later date.
When a Fund sells a security short, an amount equal to the sales proceeds is
included in the Statement of Assets and Liabilities as an asset and an equal
amount as a liability. The amount of the liability is subsequently
marked-to-market to reflect the current value of the security sold short.
The Funds will incur a loss if the market price of the security increases
between the date of the short sale and the date on which the Funds replace the
borrowed security. The Funds will realize a gain if the security declines in
value between those dates.
All short sales must be fully collateralized. Each Fund maintains assets
consisting of cash or liquid securities equal in amount to the liability created
by the short sale. These collateralized assets are subsequently marked to market
on a daily basis.
Each Fund is liable for any dividends paid on securities sold short. Dividends
on short sales are included as Dividends on Short Positions in the Statements of
Operations.
d) Expenses
The Funds are charged for those expenses that are directly attributable to each
Fund, such as investment advisory and custodian fees. Expenses that are not
directly attributable to a portfolio are typically allocated among the
portfolios in proportion to their respective net assets.
e) Federal Income Taxes
The Funds' policy is to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all their taxable income to their shareholders. Therefore, no
federal income tax provision is recorded.
f) Distributions to Shareholders
Dividends, if any, from net investment income are declared and paid annually in
the December calendar quarter. Distributions of net realized capital gains, if
any, will be declared at least annually. The Funds may utilize earnings and
profits distributed to shareholders on redemption of shares as a part of the
dividends paid deduction for income tax purposes. Distributions to shareholders
are recorded on the ex-dividend date. The Funds may periodically make
reclassifications among certain of their capital accounts as a result of the
timing and characterization of certain income and capital gains
Annual Report
Bramwell Funds [LOGO]
distributions determined annually in accordance with federal tax regulations,
which may differ from accounting principles generally accepted in the United
States of America.
g) Guarantees and Indemnifications
In the normal course of business, the Funds enter into contracts with service
providers that contain general indemnification clauses. The Funds' maximum
exposure under these arrangements is unknown as this would involve future claims
that may be made against the Funds that have not yet occurred. However, based on
experience, the Funds expect the risk of loss to be remote.
h) Other
Investment transactions are accounted for on the trade date. The Funds determine
the gain or loss realized from investment transactions by comparing the cost of
the security lot sold with the net sale proceeds. Dividend income is recognized
on the ex-dividend date and interest income is recognized on an accrual basis.
3. INVESTMENT TRANSACTIONS
Purchases and sales of securities, excluding short-term investments, for the
year ended June 30, 2005 were as follows:
Growth Fund Focus Fund
- -------------------------------------------------------------------------------
Purchases $119,152,607 $17,524,017
Sales 165,153,218 20,031,275
There were no purchases or sales of long-term U.S. government securities. At
June 30, 2005, gross unrealized appreciation and depreciation of investments,
based on aggregate cost for federal income tax purposes were as follows:
Growth Fund Focus Fund
- -------------------------------------------------------------------------------
Cost $132,315,837 $7,696,557
============ ==========
Gross
unrealized
appreciation $ 43,591,763 $ 504,119
Gross
unrealized
depreciation (1,624,310) (97,976)
------------ ----------
Net unrealized
appreciation
on investments $ 41,967,453 $ 406,143
============ ==========
The difference between cost amounts for financial statement and federal income
tax purposes is due primarily to timing differences in recognizing certain gains
and losses in security transactions.
The tax components of dividends paid during the years ended June 30, 2005 and
2004 were:
Growth Fund
- -------------------------------------------------------------------------------
Year Year
Ended Ended
June 30, June 30,
2005 2004
- -------------------------------------------------------------------------------
Ordinary
income $ -- $ --
Long-term
capital gains $ 3,793,293 $ --
Focus Fund
- -------------------------------------------------------------------------------
Year Year
Ended Ended
June 30, June 30,
2005 2004
- -------------------------------------------------------------------------------
Ordinary
income $ -- $ --
Long-term
capital gains $ -- $ --
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Bramwell Funds [LOGO]
Of the gross appreciation on investments, 85% and 10% (unaudited) is
attributable to securities held greater than 12 months at June 30, 2005, for the
Growth Fund and Focus Fund, respectively.
As of June 30, 2005 the components of accumulated earnings (deficit) on a tax
basis were as follows:
Growth Fund Focus Fund
- --------------------------------------------------------------------------------
Accumulated
capital and
other losses $10,177,535 $(1,066,221)
Unrealized
appreciation
on investments 41,967,453 406,143
----------- -----------
Total accumulated
earnings (deficit) $52,144,988 $ (660,078)
=========== ===========
At June 30, 2005, the Focus Fund had total accumulated capital loss
carryforwards of $1,066,221, with $142,945 expiring in 2010 and $923,276
expiring in 2011. To the extent that the Focus Fund realizes future net capital
gains, those gains will be offset by any unused capital loss carryforwards.
The Growth Fund and Focus Fund utilized $164,306 and $656,082, respectively, of
its capital loss carryforwards during the year ended June 30, 2005.
For the year ended June 30, 2005, the Growth Fund designates $4,260,059 as
long-term capital gain distributions for purposes of the dividends paid
deduction, which included $466,766 of earnings and profits distributed to
shareholders on redemptions.
4. INVESTMENT ADVISORY AGREEMENTS
The Funds have agreements with BramCap, with whom certain officers and a
director of the Funds are affiliated, to furnish investment advisory services to
the Funds. The agreements are for one-year periods and require board approval on
an annual basis. Under the terms of the agreements, the Funds will pay BramCap a
monthly fee at the annual rate of 1.00% on average daily net assets of each
Fund. The Funds' investment adviser has voluntarily agreed to limit the total
expenses of each Fund (excluding interest, taxes, brokerage and extraordinary
expenses) to an annual rate of 1.75% of each Fund's average net assets through
December 31, 2005. After such date, the expense limitation may be terminated or
revised at any time. For the year ended June 30, 2005, the Adviser reimbursed
the Focus Fund $114,862. The expense ratio for the Growth Fund for the year
ended June 30, 2005 was 1.69%.
5. DISTRIBUTION PLANS
The Funds have adopted Service and Distribution Plans (the "Plans") pursuant to
Rule 12b-1 under the 1940 Act. The Plans authorize payments by the Funds in
connection with the distribution of their shares at an annual rate, as
determined from time to time by the Board of Directors, of up to 0.25% of each
Fund's average daily net assets.
Annual Report
Bramwell Funds [LOGO]
THE BRAMWELL FUNDS, INC.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
The Bramwell Funds, Inc.:
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Bramwell Growth Fund and The
Bramwell Focus Fund (constituting The Bramwell Funds, Inc., herein referred to
as the "Funds") at June 30, 2005, the results of each of their operations, the
changes in each of their net assets, and their financial highlights for the
periods presented, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States), which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at June 30, 2005 by correspondence with the custodian and brokers,
provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
July 22, 2005
Annual Report
Bramwell Funds [LOGO]
THE BRAMWELL FUNDS, INC.
EXPENSE EXAMPLE
FOR THE SIX MONTHS ENDED
JUNE 30, 2005 (UNAUDITED)
As a shareholder of The Bramwell Funds (the "Funds"), you incur two types of
costs: (1) ongoing costs, including management fees, distribution (12b-1) fees
and other Fund expenses; and (2) transaction costs, including redemption fees on
certain redemptions. This Example is intended to help you understand your
ongoing operational costs (in dollars) of investing in the Funds and to compare
these costs with the ongoing operational costs of investing in other mutual
funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period from January 1, 2005 to June 30, 2005 (the
"period").
ACTUAL EXPENSES
The lines marked "Actual" in the table below provide information about actual
account values and actual expenses. You may use the information in this line,
together with the amount you invested, 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 entitled "Expenses Paid During the
Period" to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The lines marked "Hypothetical" in the table below provide information about
hypothetical account values and hypothetical expenses based on the Funds' actual
expense ratios and an assumed rate of return of 5% per year before expenses,
which is not the actual return of either of the 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. You may use this information to
compare the ongoing operational costs of investing in the Funds and other funds.
To do so, compare this 5% hypothetical example with the 5% hypothetical examples
that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees. Therefore, the lines marked "Hypothetical" in the table are
useful in comparing ongoing operational costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs could have been higher.
- -----------------------------------------------------------------------------------------------------------------
EXPENSE EXAMPLE
- -----------------------------------------------------------------------------------------------------------------
BEGINNING ENDING ACCOUNT EXPENSES PAID
ACCOUNT VALUE VALUE DURING THE PERIOD
1/1/05 6/30/05 1/1/05 - 6/30/05
- -----------------------------------------------------------------------------------------------------------------
BRAMWELL GROWTH FUND
Actual $1,000.00 $ 977.84 $8.32(a)
Hypothetical (5% return before expenses) $1,000.00 $1,016.59 $8.48(a)
BRAMWELL FOCUS FUND
Actual $1,000.00 $ 945.18 $8.44(b)
Hypothetical (5% return before expenses) $1,000.00 $1,016.32 $8.75(b)
(a) Expenses are equal to the Fund's annualized expense ratio of 1.69%,
multiplied by the average account value over the period, multiplied by
181/365 (to reflect the one-half year period).
(b) Expenses are equal to the Fund's annualized expense ratio of 1.75%,
multiplied by the average account value over the period, multiplied by
181/365 (to reflect the one-half year period).
Annual Report
Bramwell Funds [LOGO]
Basis for Approval of
Renewal of Advisory
Contracts by the Funds'
Board of Directors
At a meeting on February 15, 2005, the Funds' Board of Directors unanimously
approved the renewal of the investment advisory contracts between the Funds and
Bramwell Capital Management, Inc., the Funds' investment adviser.
The Board of Directors evaluates the performance of the adviser throughout the
year as part of the Board's oversight function, including review of the
adviser's investment performance at quarterly Board meetings. In anticipation of
the required annual formal contract renewal process, independent counsel on
behalf of the Funds' five independent directors, requested specific, detailed
information from the adviser, and the adviser provided extensive responses.
In addition, the adviser provided substantial information in response to
follow-up requests from the independent directors, and Fund counsel furnished
the independent directors with a memorandum discussing their duties and review
standards in connection with renewal of the advisory contracts. The independent
directors also retained the services of an independent consultant to assist in
their review of information supplied by the adviser and to provide comparative
data. Prior to approval of renewal of the contracts, the independent directors
discussed the information provided among themselves, with their independent
counsel and with the adviser. As part of this process, the independent directors
weighed the factors discussed below, and based on the totality of the factors
considered, the independent directors and the Board determined that the advisory
contracts, including fees, were fair and reasonable in light of the services
performed, expenses incurred and such other matters as they considered relevant
in the exercise of their reasonable judgment, and they unanimously approved
renewal of the contracts.
a) Nature, Extent and Quality of Advisory Services, Including Investment
Performance
The Board considered that the adviser manages each Fund as provided in the
Fund's investment advisory contract in accordance with the Fund's investment
objectives, policies and limitations and provides the Funds with office space
and officers. The Board reviewed the qualifications and experience of the
adviser's portfolio management, research and other personnel involved in
providing services to the Funds. The independent directors also took into
account their ongoing observations as to the adviser's integrity, its culture of
compliance and its openness to constructive dialogue with the directors.
With respect to investment performance of the Funds, the independent directors
focused on the Growth Fund's and the Focus Fund's long-term performance record
that compared favorably to their benchmarks, peer groups selected by an
independent consultant and peer groups selected by the adviser. They took note
that the Funds had achieved 4-Star Overall Morningstar RatingsTM in the
U.S.-domiciled Large Growth category, as well as 4-star ratings for the 3-year,
5-year and, in the case of the Growth Fund, 10-year periods. They also took into
account short-term performance, trading costs and the adviser's commitment to
generating superior performance for the Funds' shareholders. The independent
directors were confident in the adviser's continued dedication to enhancing Fund
performance.
Annual Report
Bramwell Funds [LOGO]
b) Advisory Fees and Expenses, Including Economies of Scale
The Board also considered the contractual advisory fee of 1.00% of average net
assets for each Fund. Their consideration included review of the fees in the
context of each Fund's overall expenses (1.68% for the Growth Fund, and 1.75%
capped for the Focus Fund for the annualized period ended December 31, 2004), as
well as comparison of the advisory fees and overall expense ratios to peer
groups selected by the independent consultant and peer groups selected by the
adviser. The Board recognized that it is difficult to compare advisory fees from
fund to fund because the expense structures vary with the size of different fund
organizations and the services provided. The Board also noted the fees charged
by the adviser to other types of accounts (i.e., non mutual fund); but this
information was of limited relevance since the services provided to those
accounts are markedly different from those provided to mutual funds.
The independent directors noted that the Growth Fund's total expenses were lower
than one of the published averages for funds in similar categories; otherwise
the Growth Fund's total expenses and the Focus Fund's total expenses (after
reimbursement) were somewhat higher than the published averages and total
expenses of the peer group selected by the independent consultant. They also
noted that the Funds' advisory fees were generally higher than the published
averages for funds in similar categories and the fees for the peer group
selected by the independent consultant. They recognized that the peer group
selected by the independent consultant included a number of funds that were part
of large fund organizations, rather than independent entities like the Funds,
and that independent funds tended to have somewhat higher advisory fees and
expense ratios. They also considered that where a fund has relatively higher
expenses, the adviser needs to furnish investment performance strong enough to
offset the higher expenses and provide shareholders with superior returns as
reflected in the fund's net asset value. In response to the independent
directors' questions about the expenses of the Funds, including economies of
scale, the adviser explained that with average net assets of the Growth and
Focus Funds, optimum economies of scale were still to be realized. On the other
hand, many of the funds in the peer groups were part of large complexes that
benefited from expenses being spread over large bases. The directors indicated
that, under current circumstances, fees and expenses continued to be acceptable
in light of the services provided and that they would continue to monitor
expense ratios closely.
c) Costs and Profitability to the Adviser
Revenues from the Funds to the adviser under the advisory contracts had not been
increasing, since revenues are based on Fund assets and Fund assets had not been
increasing recently. Nor were there any other identified benefits that accrued
to the adviser from acting as adviser to the Funds. At the same time, based on
the financial information provided by the adviser to the directors, the
adviser's costs to provide services to the Funds, including obtaining and
retaining quality personnel and complying with expanded regulatory requirements,
were rising. Under the circumstances, the independent directors deemed that the
adviser's profitability was not excessive given the services provided.
Annual Report
Bramwell Funds [LOGO]
THE BRAMWELL FUNDS, INC.
DIRECTORS AND OFFICER
NUMBER OF
PRINCIPAL PORTFOLIOS IN OTHER
POSITION(S) TERM OF OFFICE* OCCUPATION(S) COMPLEX DIRECTORSHIPS
HELD WITH AND LENGTH OF DURING OVERSEEN BY HELD BY
NAME, ADDRESS, AND AGE FUND TIME SERVED PAST 5 YEARS DIRECTORS DIRECTORS
- ----------------------------------------------------------------------------------------------------------------------------
BOARD OF DIRECTORS:
- ----------------------------------------------------------------------------------------------------------------------------
Theodore J. Coburn Director Director President, Coburn Group 2 Trustee, Nicholas-
745 Fifth Avenue since 2004 (1991-present); President, Applegate Investment
New York, NY 10151 Potomac Asset Trust (9 portfolios),
Age: 51 Management Intelecom Solutions,
(2004-2005); Senior Church Plaza, Inc.;
Vice President,The Trustee, Allianz Global
NASDAQ Stock Market, Investment Funds:
Inc. (2002-2003) Multi-Manager Series
Darlene T. DeRemer Director Director Partner, Grail Partners 2 Director, AIG Strategic
745 Fifth Avenue since 2004 LLP (2005-present); Hedge; Trustee,
New York, NY 10151 Managing Director, Nicholas-Applegate
Age: 49 Putnam Lovell NBF Investment Trust
(Jan. 2004-2005); (9 portfolios)
Director, NewRiver's
eBusiness Advisory
(2000-2004)
George F. Keane Director Director Investment Consultant 2 Director, Universal
745 Fifth Avenue since 1994 (1996-present) Stainless and Alloy
New York, NY 10151 Products, Trustee,
Age: 75 Nicholas-Applegate
Investment Trust
(9 portfolios), Universal
Bond Fund, Bermuda
James C. Sargent Director Director Counsel, Opton, 2 Director, Austin's
745 Fifth Avenue since 1994 Handler, Gottlieb, International, Sedona
New York, NY 10151 Feiler & Katz Corporation
Age: 89 (1995-2001)
Martha R. Seger, Ph.D. Director Director Lecturer and Consultant 2 Director, Massey
745 Fifth Avenue since 1994 Energy Company
New York, NY 10151
Age: 73
Annual Report
Bramwell Funds [LOGO]
NUMBER OF
PRINCIPAL PORTFOLIOS IN OTHER
POSITION(S) TERM OF OFFICE* OCCUPATION(S) COMPLEX DIRECTORSHIPS
HELD WITH AND LENGTH OF DURING OVERSEEN BY HELD BY
NAME, ADDRESS, AND AGE FUND TIME SERVED PAST 5 YEARS DIRECTORS DIRECTORS
- ----------------------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTORS:
- ----------------------------------------------------------------------------------------------------------------------------
Elizabeth R. Bramwell Director, Director, President and Chief 2 None
745 Fifth Avenue President President and Executive Officer,
New York, NY 10151 and Chief Chief Financial Bramwell Capital
Age: 64 Financial and Investment Management, Inc.,
and Officer since the investment adviser
Investment 1994 of the Bramwell
Officer Funds, Inc.**
(Feb. 1994-present)
- ----------------------------------------------------------------------------------------------------------------------------
OFFICER:
- ----------------------------------------------------------------------------------------------------------------------------
Donald G. Allison Secretary, Secretary Executive Vice President, N/A None
745 Fifth Avenue Treasurer and Bramwell Capital
New York, NY 10151 and CCO Treasurer Management (Sept.
Age: 55 since 2002; 2001-present); Managing
CCO since Director, Global Arbitrage
2004 Asset Management, Inc.
(1997-2001)
* Term of office is indefinite, until a successor is duly elected and qualified.
**Ms. Bramwell is an interested Director by reason of her service as an officer
of Bramwell Capital Management, Inc. Additional information about the
Directors is contained in the Statement of Additional Information which is
available without charge by calling The Bramwell Funds at (800) 272-6227.
Annual Report
Bramwell Funds [LOGO]
1-800-BRAMCAP (1-800-272-6227)
WWW.BRAMWELLFUNDS.COM
BOARD OF DIRECTORS
ELIZABETH R. BRAMWELL, CFA
President, Chief Investment
and Financial Officer
The Bramwell Funds, Inc.
THEODORE J. COBURN
President
Coburn Group
DARLENE T. DEREMER
Partner,
Grail Partners LLP
GEORGE F. KEANE
President Emeritus
The Common Fund
JAMES C. SARGENT
Former Commissioner
Securities & Exchange Commission
MARTHA R. SEGER, PH.D.
Former Governor
Federal Reserve Board
OFFICERS
ELIZABETH R. BRAMWELL, CFA
President, Chief Investment
and Financial Officer
DONALD G. ALLISON
Chief Compliance Officer,
Secretary and Treasurer
MARGARET A. BANCROFT
Assistant Secretary
INVESTMENT ADVISER
Bramwell Capital Management, Inc.
ADMINISTRATOR
UMB Fund Services, Inc.
COUNSEL
Dechert LLP
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
CUSTODIAN
U.S. Bank Trust Services
TRANSFER AGENT
AND DIVIDEND
DISBURSING AGENT
U.S. Bancorp Fund Services, LLC
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Funds use to determine how
to vote proxies relating to portfolio securities is available (i) without
charge, upon request, by calling the Bramwell Funds at (800) 272-6227; and (ii)
on the Securities and Exchange Commission's website at www.sec.gov.
Information regarding how the Funds voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30 is available (i)
without charge, upon request, by calling The Bramwell Funds at (800) 272-6227,
and (ii) on the SEC's website at www.sec.gov.
QUARTERLY FILING OF PORTFOLIO HOLDINGS
The Funds file their complete schedule of investments with the SEC for the first
and third quarters of each fiscal year on Form N-Q. The Funds' Form N-Q is
available on the SEC's website at www.sec.gov and is also available for review
and copying at the SEC's Public Reference Room in Washington, D.C., and
information about the operations of which may be obtained by calling
800-SEC-0330.
BR-408-0805
This financial statement is submitted for the general information of the
shareholders of The Bramwell Funds. It is not authorized for distribution to
prospective investors unless preceded or accompanied by an effective prospectus.
ITEM 2. CODE OF ETHICS.
(a) The Registrant has adopted a code of ethics (the "Code of Ethics") that
applies to its principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, 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 hereto.
(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 hereto.
(e) Not applicable.
(f)
(1) The Registrant's Code of Ethics is attached hereto as Exhibit 11(a).
(2) Not applicable.
(3) Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
For the period covered by this report, the Registrant's Board of Directors
determined that it had two "audit committee financial experts" serving on its
audit committee, each of whom are "independent" Directors: James C. Sargent and
George F. Keane. Under applicable securities laws, a person who is determined to
be an audit committee financial expert will not be deemed an "expert" for any
purpose, including without limitation for the purposes of Section 11 of the
Securities Act of 1933, as a result of being designated or identified as an
audit committee financial expert. The designation or identification of a person
as an audit committee financial expert does not impose on such person any
duties, obligations, or liabilities that are greater than the duties,
obligations, and liabilities imposed on such person as a member of the audit
committee and Board of Directors in the absence of such designation or
identification.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
a) Audit Fees.
Aggregate fees billed for professional services rendered by the principal
accountant for the audit of the Registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements.
Fiscal year ended June 30, 2005 $ 34,500
Fiscal year ended June 30, 2004 $ 32,500
(b) Audit-Related Fees.
Aggregate fees billed for assurance and related services by the principal
accountant that are reasonably related to the performance of the audit of the
Registrant's financial statements and are not reported under "Audit Fees" above.
None.
(c) Tax Fees.
Aggregate fees billed for professional services rendered by the principal
accountant for review of tax filings and tax advice.
Fiscal year ended June 30, 2005 $ 6,700
Fiscal year ended June 30, 2004 $ 6,300
(d) All Other Fees.
None.
(e)
(1) The Registrant's audit committee has adopted an Audit Committee
Charter that requires that the audit committee review the scope and plan of the
independent public accountants' annual and interim examinations, approve the
services (other than the annual audit) to be performed for the Registrant by the
independent public accountants and approve the fees and other compensation
payable to the independent accountants.
(2) During FY 2005, all of the non-audit services provided by the
Registrant's principal accountant were pre-approved by the audit committee.
(f) Not applicable.
(g) Not applicable.
(h) Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
The schedule of investments in securities in unaffiliated issuers is included as
part of the report to shareholders filed under Item 1.
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.
Not applicable.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The Principal Executive and Principal Financial Officer concluded that the
Registrant's Disclosure Controls and Procedures are effective based on
their evaluation of the Disclosure Controls and Procedures as of a date
within 90 days of the filing date of this report.
(b) There were no significant changes in the Registrant's internal controls
over financial reporting or in other factors that could significantly
affect these controls subsequent to the date of their evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
ITEM 12. EXHIBITS
(a) The Code of Ethics for the Principal Executive and Principal Financial
Officer is attached hereto.
(b) Certifications, as required by Rule 30a-2(a) under the Investment Company
Act of 1940, for the Principal Executive Officer and Principal Financial
Officer are 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.
The Bramwell Funds, Inc.
/s/Elizabeth R. Bramwell
- ---------------------------------
Elizabeth R. Bramwell
Principal Executive Officer and Principal Financial Officer
August 18, 2005
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.
/s/Elizabeth R. Bramwell
- ---------------------------------
Elizabeth R. Bramwell
Principal Executive Officer and Principal Financial Officer
August 18, 2005