-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Nq8KwMtr+Gor/L1Dgcne8JZ6OMXudEUZYBLo92VmJmU4SVbZLCKA1rXu58CQvWOx X6lwsmbCui1qVOeh1qG4ig== 0000950117-99-000828.txt : 19990423 0000950117-99-000828.hdr.sgml : 19990423 ACCESSION NUMBER: 0000950117-99-000828 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990422 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BURNHAM FUND INC CENTRAL INDEX KEY: 0000030126 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133536115 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: SEC FILE NUMBER: 811-00994 FILM NUMBER: 99598783 BUSINESS ADDRESS: STREET 1: 1325 AVE. OF THE AMERICAS STREET 2: 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 212-603-7510 MAIL ADDRESS: STREET 1: 1325 AVE. OF THE AMERICAS STREET 2: 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: DREXEL BURNHAM FUND DATE OF NAME CHANGE: 19890706 FORMER COMPANY: FORMER CONFORMED NAME: DREXEL EQUITY FUND INC DATE OF NAME CHANGE: 19751208 N-30B-2 1 THE BURNHAM FUND INC. QR [LOGO] DEAR SHAREHOLDERS: April 16, 1999 We are pleased to present to you the First Quarter Report of The Burnham Fund for 1999. BURNHAM FUND FIRST QUARTER DATA - ------------------------------------------------------------- On March 31, 1999 The Burnham Fund's net asset value per share for Class A, B and C shares was $34.55, $35.49, and $34.78, which represent increases for the quarter of 6.4%, 6.2% and 6.2%, respectively. The Burnham Fund outperformed its benchmarks for the quarter: the average growth and income fund was up 2.1% according to Lipper Analytical Services, and Morningstar's Large Cap Blend Index was up 3.4%. The Burnham Fund did not declare a first quarter dividend to shareholders of record on March 31, 1999. A few comments about the dividend, and a review of our investment objective are in order at this time. In 1997 we articulated our intention to focus on the core objective of the Burnham Fund - long term capital appreciation with income as a secondary objective. The fund had in prior years maintained the majority of its assets in both growth and income producing equities, and it also owned a fixed income portfolio for yield and defensive measures. Its dividend was far above the 'peer group' of growth and income funds. The Tax Reform Act of 1997 lowered the tax rate on long term capital gains to 20%, but it kept dividend and short term capital gains rates at earned income rates of up to 40%. It became necessary for advisers to focus even more on tax efficient investment strategies. These strategies involve reducing income and short term capital gains, favoring long term over short term gains (and as in this quarter, sometimes eliminating them) reducing portfolio turnover, and other measures. The tax treatment of capital gains and income are very important issues for shareholders to consider because they have a large impact on total return. The Burnham Fund's tax efficiency ratio as measured by Morningstar, is at a 90.4% average over the last three years, which means that 90.4% of the year's total return remains with you, or is reinvested, after taxes. FIRST QUARTER MARKET REVIEW - ------------------------------------------------------------- The equity markets continued to march ahead in the first quarter of 1999. At March 31, 1999, the S & P 500 was up 5.0%, and the Dow Jones Industrial Average was up 7.0%. We attribute the strength in the quarter to positive economic trends that, for the last several years, have driven this market. Since 1998's year end, reported economic figures have been exceptionally strong: GDP for the fourth quarter was up 5.9%, housing starts have increased, weekly earnings and personal income have risen, and retail sales have been buoyant. There were concerns in January that the Federal Reserve would raise rates in the wake of strong economic indicators, but rates were left alone as inflation remains low. Aiding this rally has been the resolution of President Clinton's impeachment concerns, stabilization of Asian markets, and the probable bottoming of the South American financial crisis. The Burnham Fund's equity allocation as of the end of the quarter was 91.6%. The top performing sectors of the S & P 500 for the quarter were: Financial Services and Technology, sectors that are overweighted in The Burnham Fund. Stocks that were exceptionally strong for the quarter include: Citigroup, Cisco Systems, America Online, Gap Inc., Walmart, and Qwest Communications. Our weaker equities were in the petroleum sector, but that sector of the S & P 500 was up approximately 5.0% because energy prices worldwide have strengthened since year end. New positions to the fund include: Sovereign Bancorp Inc., a Pennsylvania bank holding company that is growing through acquisitions and deposits; Sun Microsystems, the leading supplier of internet equipment; and Com21, a telecommunications equipment manufacturer that makes modems for use in linking home cable systems to the internet. Positions eliminated include Daimler Chrysler and Associates First Capital. OUTLOOK - ------------------------------------------------------------- We hold to our premise stated in the annual report that the equity markets look attractive at this time. We [LOGO] believe that the United States is in a unique environment of positive economic forces. Notably: A technology and communications revolution that tends to smooth out the business cycle, improve corporate management and planning, and expand profit margins and bottom line earnings. The internet is viewed be a revolutionizing force in reshaping the distribution of goods and services, and which may add considerable growth to this economic cycle; Continued low inflation and stable interest rates at reasonable levels, the result of continuous spending on technology, and the lack of pricing flexibility in many industries; Near elimination of the federal deficit; The government's encouraging individual investing through lowering capital gains taxes and liberalizing retirement programs; Record breaking inflows of tax deferred and discretionary investment into mutual funds from systematic investment programs and other retirement vehicles; Increased level of corporate merger and acquisition activity as corporations seek new distribution avenues both in the United States and abroad, taking advantage of 'economies of scale'; A shrinking supply of common stock from accelerating corporate stock buyback activity. As of the end of the first quarter, the S & P 500 index stood at 25x1999 earnings estimates and had a dividend yield of 1.2%. By historical measures, these are high valuations. We think that given the factors stated above, a premium market valuation is warranted. We continue to favor companies with earnings growth potential of at least 15% to 20% per year for five years. We search for long term investments in the equities of companies that contribute to the trend of improving corporate productivity and improving competitiveness - and reducing price inflation. Technology, the internet, e-commerce and telecommunications are the engines of improving productivity. Companies in which we invest should have leading products, innovative management with a shareholder-value orientation, superior financial underpinnings, and a healthy dividend history (when possible). Companies whose stock is undervalued relative to its past or future potential, or those which may benefit from restructuring actions are of interest to the Fund. (We avoid 'low valuation' industries where the earnings outlook is less certain, and earnings may disappoint analysts.) We are also monitoring Year 2000 issues as they affect our investments, and to the extent to which companies in the Fund are on track with compliance. Volatility in the markets will continue, but we believe that unless the fundamentals of the markets change for the worse, investors will be rewarded. We would be concerned if economic conditions changed so that we might anticipate an upward change in the direction of interest rates. We are also concerned about escalating involvement in the Balkans, and the reaction of US markets if NATO's offensive includes the deployment of ground troops. BURNHAM INVESTORS TRUST - ------------------------------------------------------------- This is the final quarterly report that you will receive from the Burnham Fund as an independent mutual fund. On or about May 3, The Burnham Fund Inc. shares will be transferred 'tax-free' to The Burnham Fund portfolio of Burnham Investors Trust, your new and expanded fund family. (The Burnham Fund's investment objective, positions, and management will be unchanged in this reorganization, which was approved by shareholders in November, 1998.) The new products that will comprise the Trust include: BURNHAM FUND - a growth and income fund; BURNHAM DOW 30 FOCUSED FUND - a capital appreciation fund which pursues its goal by investing in stocks represented by the Dow Jones Industrial Average and DJIA equivalents. 2 [LOGO] BURNHAM FINANCIAL SERVICES FUND - a growth fund that focuses on the financial services sector; BURNHAM MONEY MARKET FUND - an instrument to maintain current income consistent with maintaining liquidity and preserving capital. As a Burnham Fund shareholder, the new fund family 'Plain English' prospectus will be mailed to you, along with information pertinent to you and your account. We look forward to introducing these new products to you. JON M. BURNHAM'S ENGAGEMENTS ON FINANCIAL NEWS PROGRAMS - ------------------------------------------------------------- Portfolio Manager Jon Burnham appears as a regular guest on CNBC, CNN/FN and Bloomberg Radio and Cable Television. Please feel free to call 1-800-874 - FUND for his schedule, so you may hear his latest investment thoughts and ideas. We would be happy to include you in our fax distribution of his schedule. We look forward to serving your investment needs in the Burnham Investors Trust. I.W. Burnham, II Jon M. Burnham, I.W. Burnham, II Jon M. Burnham, Chairman President & Portfolio Manager
CUMULATIVE PERFORMANCE COMPARISON
CUMULATIVE % CHANGE AVERAGE ANNUALIZED % CHANGE --------------------------------------------- ------------------------------ 1 YR 3 YR 5 YR 10 YR 1 YR 3 YR 5 YR ------ ------- ------- ------- ------ ------ ------ DOW JONES INDUSTRIAL AVERAGE (W/DIVIDENDS) 13.16% 85.10% 199.80% 459.00% 13.16% 22.78% 24.56% STANDARD & POOR'S 500 INDEX (W/DIVIDENDS) 18.47% 110.03% 220.49% 467.76% 18.47% 28.06% 26.23% MORNINGSTAR LARGE CAP BLEND AVERAGE 12.01% 84.44% 160.79% 350.68% 12.01% 22.64% 21.13% MORNINGSTAR GROWTH & INCOME AVERAGE 7.42% 76.47% 152.11% 320.66% 7.42% 20.84% 20.31% LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX 6.54% 25.08% 45.11% 138.54% 6.54% 7.75% 7.73% 3-MONTH CERTIFICATE OF DEPOSIT 5.00% 16.02% 29.09% 69.95% 5.00% 5.08% 5.24% 10 YR ------ DOW JONES INDUSTRIAL AVERAGE (W/DIVIDENDS) 18.78% STANDARD & POOR'S 500 INDEX (W/DIVIDENDS) 18.96% MORNINGSTAR LARGE CAP BLEND AVERAGE 16.25% MORNINGSTAR GROWTH & INCOME AVERAGE 15.45% LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX 9.08% 3-MONTH CERTIFICATE OF DEPOSIT 5.45%
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. Average total return for Class A shares, assuming the reinvestment of dividends and excluding the maximum sales charge for the one, five and ten year periods ended March 31, 1999 were 16.48%, 19.62% and 13.98%, respectively. Such performance assuming the imposition of the Class A shares' maximum 5% sales charge for the same periods would have been 10.65%, 18.40% and 13.39%, respectively. For Class B and C shares, average total return for the one and five year periods ended March 31, 1999 were 15.66%, 16.27% and 18.83%, 18.75%, respectively. For Class B and C shares, average life of class return for the period October 18, 1993 (inception date) to March 31, 1999 were 15.80% and 15.91%, respectively. Class B shares bear a maximum contingent deferred sales charge of 5% if they are redeemed within the first year of purchase. Such performance assuming the imposition of the contingent deferred sales charge of 4% for the one and five year periods ended March 31, 1999, and life of class were 11.66%, 18.73% and 15.60%, respectively. Class C shares bear a maximum contingent deferred sales charge at a rate of 1% if they are redeemed within the first year of purchase. 3 INVESTMENT PERSPECTIVE EQUITY PORTFOLIO DISTRIBUTION by Industry Classification March 31, 1999
% Total Equity Portfolio ---------------- Computer Products & Software.......... 26.7% Banking............................... 11.0% Telecommunications Network & Services............................ 9.3% Energy -- Oil & Gas Refining.......... 8.4% Pharmaceuticals....................... 8.2% Automotive............................ 3.9% Telecommunications Equipment.......... 3.5% Real Estate Investment Trusts......... 3.0% Consumer Products..................... 2.9% Other................................. 23.1% ------- Total Equities........................ 100.00% ------- -------
TOTAL PORTFOLIO DISTRIBUTION BY ASSET CLASS March 31, 1999 [PIE CHART] Cash & Cash Equivalents 5% Convertible Preferred Securities 1% Corporate & Convertible Bonds 2% Common Stocks 92% TOP 10 EQUITY HOLDINGS March 31, 1999
Number of % of Shares Value Net Assets --------- ----------- ---------- Citigroup Inc. .............. 120,000 $ 7,665,000 4.61% Microsoft Corp. ............. 80,000 $ 7,167,500 4.31% Cisco Systems Inc. .......... 60,000 $ 6,575,625 3.95% America Online Inc. ......... 40,000 $ 5,840,000 3.51% The Bank of New York Co., Inc. ...................... 160,000 $ 5,750,000 3.46% Siebel Systems Inc. ......... 120,000 $ 5,677,500 3.41% Pfizer Inc. ................. 40,000 $ 5,550,000 3.34% Lucent Technologies Inc. .... 50,000 $ 5,387,500 3.24% Ford Motor Company........... 90,000 $ 5,107,500 3.08% Intel Corp. ................. 40,000 $ 4,755,000 2.86% ----------- ---------- TOP 10 EQUITY HOLDINGS $59,475,625 35.77% ----------- ---------- ----------- ----------
CUMULATIVE RETURN OF A HYPOTHETICAL $10,000 INVESTMENT* FROM INCEPTION (JUNE 15, 1975) THROUGH MARCH 31, 1999 THE BURNHAM FUND--CLASS A Value of hypothetical investment on March 31, 1999: $233,687 6/15/75 $10,000 2/87 56,860 8/75 9,175 5/87 58,903 11/75 9,792 8/87 60,619 2/76 11,171 11/87 53,524 5/76 11,670 2/88 56,242 8/76 11,693 5/88 57,606 11/76 12,130 8/88 58,486 2/77 11,485 11/88 59,883 5/77 11,854 2/89 63,167 8/77 11,485 5/89 66,632 11/77 11,656 8/89 70,484 2/78 11,407 11/89 73,520 5/78 12,379 2/90 71,004 8/78 13,682 5/90 72,256 11/78 13,168 8/90 69,518 2/79 13,932 11/90 72,217 5/79 14,487 2/91 76,332 8/79 16,010 5/91 75,695 11/79 16,265 8/91 79,515 2/80 15,526 11/91 85,195 5/80 17,829 2/92 84,030 8/80 19,798 5/92 84,086 11/80 21,777 8/92 88,077 2/81 22,273 11/92 91,758 5/81 22,193 2/93 94,864 8/81 19,647 5/93 96,930 11/81 21,220 8/93 101,228 2/82 20,375 11/93 100,355 5/82 20,464 2/94 95,416 8/82 22,325 5/94 95,432 11/82 25,928 8/94 99,011 2/83 27,563 11/94 98,565 5/83 29,595 2/95 103,959 8/83 29,262 5/95 111,078 11/83 29,067 8/95 117,053 2/84 28,145 11/95 122,663 5/84 28,241 2/96 128,180 8/84 30,463 5/96 131,116 11/84 31,166 8/96 134,468 2/85 33,481 11/96 144,252 5/85 36,579 2/97 145,638 8/85 35,897 5/97 166,387 11/85 41,191 8/97 177,598 2/86 46,888 11/97 179,923 5/86 50,145 2/98 200,621 8/86 47,103 5/98 209,439 11/86 50,169 8/98 181,446 11/98 219,679 3/31/99 233,687
LIFE OF FUND CUMULATIVE PERCENT RETURN: 2,236.87% ANNUAL COMPOUND RATE OF RETURN: 14.14% [GRAPH] * All performance analyses shown herein represent past performance and are not indicative of future performance. All dividends and distributions from income and capital gains have been continually reinvested. Performance does not include the imposition of the maximum 5% sales charge. Performance for other classes of the Fund will be greater or less than the data shown in the graph and tables based on differences in sales charges and fees paid by shareholders investment in the different classes of the Fund. AVERAGE ANNUAL TOTAL RETURN Period ended March 31, 1999 - -------------------------------------- One Year...................... 16.48% Three Years................... 22.16% Five Years.................... 19.62% Ten Years..................... 13.98% Fifteen Years................. 15.16% Twenty Years.................. 15.14%
4 [LOGO] STATEMENT OF NET ASSETS March 31, 1999
NUMBER OF SHARES VALUE(c) - -------------------------------------------------------------- COMMON STOCKS 91.64% AEROSPACE 0.91% General Motors Corporation Class H....................... 30,000(a) shs. $1,513,125 ------------ AIR FREIGHT 1.12% FDX Corporation. ............... 20,000(a) 1,856,250 ------------ AUTOMOTIVE 3.59% Ford Motor Company.............. 90,000 5,107,500 General Motors Corp. ........... 10,000 868,750 ------------ 5,976,250 ------------ BANKING 10.08% The Bank of New York Co., Inc. ......................... 160,000 5,750,000 Chase Manhattan Bank............ 12,000 975,750 Citigroup Inc. ................. 120,000 7,665,000 Fleet Financial Group Inc. ..... 40,000 1,505,000 Sovereign Bancorp Inc. ......... 70,000 861,875 ------------ 16,757,625 ------------ BROADCASTING 0.99% CBS Corp. ...................... 40,000 1,637,500 ------------ COMPUTER PRODUCTS & SOFTWARE 24.45% America Online Inc. ............ 40,000(a) 5,840,000 Cisco Systems Inc. ............. 60,000(a) 6,575,625 Dell Computer Corp. ............ 80,000(a) 3,272,500 EMC Corp. ...................... 35,000(a) 4,471,250 International Business Machines Corp. ........................ 25,000 4,431,250 Microsoft Corp. ................ 80,000(a) 7,167,500 Siebel Systems Inc. ............ 120,000(a) 5,677,500 Sun Microsystems Inc. .......... 15,000 1,875,469 Yahoo Inc. ..................... 8,000 1,345,500 ------------ 40,656,594 ------------ CONSUMER PRODUCTS 2.66% General Electric Co. ........... 40,000 4,425,000 ------------ DIVERSIFIED CHEMICALS 0.83% Monsanto Co. ................... 30,000 1,378,125 ------------ NUMBER OF SHARES VALUEC - -------------------------------------------------------------- ENERGY - OIL & GAS REFINING 7.66% BP Amoco PLC.................... 30,000 $ 3,028,125 Enron Corp. .................... 15,000 963,750 Exxon Corporation. ............. 50,000 3,528,125 Mobil Corporation. ............. 40,000 3,520,000 Texaco Inc. .................... 30,000 1,702,500 ------------ 12,742,500 ------------ ENGINEERING/INDUSTRIAL PRODUCTION 0.06% Thermolyte Corp. ............... 10,000(a)(b) shs. 100,000 ------------ FINANCIAL SERVICES 2.82% American Express Co. ........... 40,000 4,700,000 ------------ FOOD AND BEVERAGE PRODUCTS 2.61% American Italian Pasta Co. ..... 100,000(a) 2,500,000 The Coca Cola Company........... 30,000 1,841,250 ------------ 4,341,250 ------------ HEALTHCARE FACILITIES 0.68% Rehabcare Group Inc. ........... 75,000(a) 1,129,688 ------------ INSURANCE 1.78% Allstate........................ 80,000 2,965,000 ------------ OIL DRILLING 1.33% Diamond Offshore Drilling Inc. ......................... 70,000 2,213,750 ------------ PASSENGER CRUISE LINES 0.88% Carnival Corp................... 30,000 1,456,875 ------------ PHARMACEUTICALS 7.54% Merck & Co. .................... 50,000 4,009,375 Pfizer Inc. .................... 40,000 5,550,000 Warner Lambert Inc. ............ 45,000 2,978,437 ------------ 12,537,812 ------------ PERSONAL CARE PRODUCTS 0.72% Gillette Co. ................... 20,000 1,188,750 ------------ PUBLISHING 0.66% McGraw-Hill Cos., Inc. ......... 20,000 1,090,000 ------------ REAL ESTATE INVESTMENT TRUSTS 2.75% Chateau Communities Inc. ....... 40,000 1,100,000 Franchise Finance Corp. ........ 70,000 1,474,375 Golf Trust of America........... 45,000 1,006,875 National Golf Properties, Inc. ......................... 45,000 990,000 ------------ 4,571,250 ------------
5 [Logo] STATEMENT OF NET ASSETS March 31, 1999
NUMBER OF SHARES VALUE(c) - -------------------------------------------------------------- RETAIL STORES 2.12% Gap, Inc. ...................... 25,000(a) shs.$ 1,682,813 Walmart Stores Inc. ............ 20,000 1,843,750 ------------ 3,526,563 ------------ SECURITY SERVICES 0.73% Kroll - O'Gara Co. ............. 45,000(a) 1,212,188 ------------ SEMICONDUCTORS 2.86% Intel Corp. .................... 40,000 4,755,000 ------------ TELECOMMUNICATION EQUIPMENT 3.24% Lucent Technologies Inc. ....... 50,000 5,387,500 ------------ TELECOMMUNICATIONS NETWORK AND SERVICES 8.57% Com 21 Inc. .................... 50,000 1,314,062 ECI Telecom Ltd. ............... 60,000 2,101,875 GTE Corp. ...................... 40,000 2,420,000 Qwest Communication International................. 50,000(a) 3,604,687 SBC Communications Inc. ........ 60,000 2,827,500 Telephone & Data Systems Inc. .. 35,000 1,973,125 ------------ 14,241,249 ------------ TOTAL COMMON STOCKS (cost: $77,307,509)........... 152,359,844 ------------ CONVERTIBLE PREFERRED SECURITIES 1.47% PASSENGER CRUISE LINES 1.47% Royal Caribbean Cruises, Conv. Preferred Cl. `A'....... 20,000 2,447,500 ------------ TOTAL CONVERTIBLE PREFERRED SECURITIES (cost: $1,084,100)................... 2,447,500 ------------ CORPORATE CONVERTIBLE BONDS 0.74% DATA PROCESSING 0.74% Adaptec, Inc. 4.75% sub. deb. Conv. 2/1/04.................. 1,000,000 828,750 Data General Corp., 6% sub. deb. 5/15/04....................... 500,000 405,625 ------------ TOTAL CORPORATE CONVERTIBLE BONDS (cost: $1,271,000)...... 1,234,375 ------------ PRINCIPAL AMOUNT VALUEC - -------------------------------------------------------------- CORPORTATE BONDS 0.81% HOTELS 0.81% Host Marriott Corp.,9.375% Notes 6/15/07....................... $1,265,000 $ 1,346,086 ------------ TOTAL CORPORATE BONDS (cost: $1,273,606)................... 1,346,086 ------------ COMMERCIAL PAPER 5.29% American Express Credit Corp., 4.87% 04/07/99................ 1,600,000 1,600,000 General Electric Credit Corp. 4.70% 04/05/99................ 2,200,000 2,200,000 General Motors Acceptance Corp. 4.89% 04/06/99................ 5,000,000 5,000,000 ------------ TOTAL COMMERCIAL PAPER (cost: $8,800,000)............ 8,800,000 ------------ TOTAL INVESTMENTS (cost: $89,736,215) 99.95% 166,187,805 CASH AND OTHER ASSETS, LESS LIABILITIES 0.05% 74,484 ------ ------------- NET ASSETS 100.00% $166,262,289 ====== ============= CLASS A SHARES (Equivalent to $34.55 per share based on 4,710,228 shares of Capital Stock outstanding) CLASS B SHARES (Equivalent to $35.49 per share based on 76,509 shares of Capital Stock outstanding) CLASS C SHARES (Equivalent to $34.78 per share based on 22,778 shares of Capital Stock outstanding)
- ------------------------------------------------------------- (a) Non-income producing security. (b) A unit consisting of one share of common stock of Thermolyte Corporation and one redemption right. (c) Investments in securities traded on a national securities exchange are valued at the last reported sales price on the primary exchange on which they are traded on the last business day of the period. Securities traded in the over-the-counter market (including securities listed on exchanges whose primary market is believed to be over-the-counter) and listed securities for which no sale is reported on that date are valued at the mean between the last reported bid and asked price. Short-term money market instruments which have a maturity of more than 60 days are valued at prices based on market quotations for securities of similar type, yield and maturity. Short-term money market instruments which have a maturity of 60 days or less are valued at amortized cost which approximates value. 6 [Logo] This page left blank intentionally OFFICERS OF THE FUND I.W. Burnham, II Chairman Jon M. Burnham, President and Chief Executive Officer Michael E. Barna, Executive Vice President Chief Financial Officer, Treasurer and Secretary Debra B. Hyman, Executive Vice President Ronald M. Geffen, Vice President Frank A. Passantino, Vice President and Assistant Secretary Louis S. Rosenthal, Vice President INVESTMENT ADVISOR Burnham Asset Management Corporation 1325 Avenue of the Americas New York, New York 10019 DISTRIBUTOR Burnham Securties Incorporated 1325 Avenue of the Americas New York, New York 10019 Telephone: 1 (800) 874-FUND CUSTODIAN Investors Fiducuary Trust Co. 801 Pennsylvania Kansas City, Missouri 64105 LEGAL COUNSEL Hale & Dorr LLP 60 State Street Boston, Massachusetts 02109 TRANSFER AGENT State Street Bank and Trust Company 225 Franklin Street Boston, Massachusetts 02110 SERVICING AGENT Boston Financial Data Services, Inc. 2 Heritage Drive North Quincy, Massachusetts 02171 http://www.burnhamfunds.com This report has been prepared for the information of shareholders of The Burnham Fund Inc. and is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospecuts that includes information regarding the Fund's objectives, policies, management, records and other information. QUARTERLY REPORT March 31, 1999 - ------------------------ CONTINUITY KNOWLEDGE Burnham ---- Fund GROWTH INCOME - ------------------------- Burnham Securities Inc. PRINCIPAL DISTRIBUTOR -----END PRIVACY-ENHANCED MESSAGE-----