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 811-22077
Prospector Funds, Inc.
(Exact name of registrant as specified in charter)
370 Church St., Guilford, CT 06437
(Address of principal executive offices) (Zip code)
Prospector Partners Asset Management, LLC, 370 Church St., Guilford, CT 06437
(Name and address of agent for service)
(203) 458-1500
Registrant's telephone number, including area code
Date of fiscal year end: December 31, 2009
Date of reporting period: June 30, 2009
Item 1. Report to Stockholders.
Prospector Capital Appreciation Fund
Prospector Opportunity Fund
Semi-Annual Report
|
www.prospectorfunds.com |
June 30, 2009 |
PROSPECTOR FUNDS, INC.
July 20, 2009
To the Shareholders and Directors of Prospector Capital Appreciation Fund and Prospector Opportunity Fund:
This year’s first three months might just as well have been part of 2008 — gut wrenching investor panic and new equity market low for this cycle reached on March 6, 2009. Then, suddenly and without much in the way of visible economic improvement, the just ended June quarter was one of the best we can remember. Despite
the turnaround penning this letter wasn’t easy. Coastal Connecticut’s unending rain doesn’t help, nor the weak economic data, nor the residual fear generated by the recent lows, but there were bigger problems. As long time contrarians we find today’s exceptionally high investor cash positions a powerful investment positive. Unfortunately, it’s a lot easier to write about our fears when times are good than our hopes when times are not. Most daunting
is the unusual, runaway U.S. dollar creation. Ironically, this doubles as a bullish near term factor. The Federal Government’s continued interventions (perhaps necessary short-term) in huge sectors — housing, autos, banking and now possibly energy and healthcare — have serious long-term consequences. These interventions, unprecedented expansionary fiscal/monetary policies and the ever nearing Medicaid and Social Security expense explosion portend debt debasement, inflation
and foreign exchange turmoil. Not a pretty picture, but one where equities and related securities are likely to have better returns over time than bonds.
Prospector Capital Appreciation Fund Highlights
The Fund has seen normal activity ebb and flow. Outstanding individual positions included Lubrizol, Neenah Paper bonds, and several others that snapped back from very depressed year end prices. We are buying property/casualty insurance companies, gradually increasing positions. Electricity, gold mining and oil/gas
producers continue as major areas of emphasis. Individually, the holdings have attractive characteristics and most would be significant inflation beneficiaries. Recently we have been actively buying Automatic Data Processing (ADP). It sells at an attractive valuation relative to its history, has a stable business model driven by employment/wages and in our minds has not attracted the attention of other inflation concerned investors. Other new portfolio purchases include: the
common stocks of Campbell Soup, International Flavors and Fragrances and General Mills. These three were chosen based upon individual fundamentals, but obviously all are not leveraged to economic activity. So far that has not been part of any grand strategy, but it could be — we’ll see where stock picking takes us.
On June 30th convertibles, mostly bonds, represented about 29% of your portfolio. As always, we try to “ladder” convert positions, continually adding securities with puts or maturities typically three to five years out. These purchases are funded by ongoing cash realizations and new money. In
the not so distant past (pre-2008), plenty of these securities reached premiums over their bond values, thanks to strong underlying equity performance. It would be nice if that happens again — and recent market action suggests the potential for optimism.
Prospector Opportunity Fund Highlights
The Fund’s biggest gainer in the first half of 2009 was Schering-Plough, which agreed to merge with Merck. Other significant contributors to first half performance include energy stocks such as Nexen and Calpine, technology shares such as Novellus and NetApp, and selected financial stocks Franklin Resources and Lancashire
holdings. We continue to favor companies with solid balance sheets and strong free cash flow generation capabilities in the consumer staples and technology industries. We also have a significant bet in the metals area, specifically gold mining shares, and the energy sector as a hedge against future inflation and dollar weakness.
1
PROSPECTOR FUNDS, INC.
We remain wary of companies with highly leveraged balance sheets in consumer discretionary, financial services, and industrial sectors, despite the significant recovery in these shares since the March 2009 market lows. Our “safe and inexpensive” financial stocks, in particular, have underperformed as investors have
increased their appetite for risk by buying the more distressed, more leveraged turnaround situations. We are attracted to the technology sector: pristine balance sheets and shorter product life cycles, rather than the industrial sector, where longer, more predictable product cycles are paired with leveraged balance sheets.
Our largest purchases include shares in NVR, a large capital efficient homebuilder operating in the mid Atlantic region, MasterCard, and Platinum Underwriters, the Bermuda-based reinsurer.
Outlook
While we are hardly anticipating a booming economy, we think it bottomed in the June quarter. This assumption isn’t as heroic as it sounds. Housing starts shouldn’t fall much from the current level of about 500,000 per year — remember replacement demand is probably above one million. Light truck and
passenger car assemblies are scheduled to dramatically increase reflecting low inventories and GM’s quick bankruptcy emergence. Steel prices have rebounded and some mills will restart just to serve the auto industry. There aren’t many obvious quarter to quarter negatives. We suppose the savings rate could go higher — perhaps if home prices keep falling — but probably not by much. One can never be sure, and we’ve been generally too optimistic on the economy lately, but the worst seems
behind us.
Interest rates and credit generally look like a major positive for equity markets going into the second half of 2009. We believe the Fed is unlikely to raise rates until a recovery has clearly taken hold, perhaps hurting 2010, but not this year. Furthermore credit spreads, which reached historically wide levels have
dramatically contracted, easing corporate interest expense and liquidity problems. The yield curve is also very steep, normally a surefire economic growth predictor and a major positive for banks who generally lend long and borrow short. For confirmation of a generally positive financial environment, look no further than soaring high-yield bond funds (20%+ gains over six months) and the stellar performance high grade corporates.
Valuation, the third input to our investment overview, looks reasonable in the context of a steep recession and resultant depressed earnings. Reported earnings of the S&P 500 might well be zero for the year, but that’s after a torrent of extraordinary charges. An ongoing number a bit above $50.00 looks about
right, down over 40% from the ’07 peak. This level gives us a reasonable but not terribly cheap 18 P/E multiple on trough earnings. Other valuation metrics seem to cluster near fairly valued as well.
Longer term (we’re talking grandchildren) the huge increase in government intervention over the last twelve months is a concern. Our new President and a very liberal legislative leadership have responded exuberantly both to their newfound power and the current crisis. Hopefully they will pause and reflect. If
they don’t, we expect American common sense and an underlying recognition of financial responsibility will soon temper this trend. Regardless, stocks seem like the financial asset of choice going forward.
Thank you for entrusting us with your money.
Respectfully submitted,
|
John D. Gillespie |
Richard P. Howard |
Kevin R. O’Brien |
2
PROSPECTOR FUNDS, INC.
Performance data quoted represents past performance; past performance does not guarantee future results.
Opinions expressed are those of the Funds and are subject to change, are not guaranteed, and should not be considered a recommendation to buy or sell any security.
Mutual fund investing involves risk. Principal loss is possible. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. The Funds invest in foreign securities which involve greater volatility and
political, economic and currency risks and differences in accounting methods. The Funds invest in smaller and mid-cap companies, which involve additional risks such as limited liquidity and greater volatility. The Funds may hold restricted securities purchased through private placements. Such securities can be difficult to sell without experiencing delays or additional costs. Derivatives involve risks different from, and in certain cases, greater than the risks presented by more
traditional investments. These risks are fully disclosed in the prospectus.
The S&P 500 Index is a broad based unmanaged index of 500 stocks, which is widely recognized as representative of the equity market in general. You cannot invest directly in an index. Free cash flow measures the cash generating capability of a company by adding non-cash charges (e.g. depreciation) and interest expense to pretax income.
The Price to Earnings (P/E) Ratio is calculated by dividing current price of the stock by the company’s trailing 12 months’ earnings per share. Earnings per share (EPS) is calculated by taking the total earnings divided by the number of shares outstanding.
Fund holdings and/or security allocations are subject to change at any time and are not recommendations to buy or sell any security. Please see the Schedule of Investments section in this report for a full listing of the Funds holdings. Current and future portfolio
holdings are subject to risk.
Prospector Funds, Inc. are distributed by Quasar Distributors, LLC. (08/09)
3
PROSPECTOR FUNDS, INC.
Capital Appreciation Fund
The chart assumes an initial investment of $10,000. Performance reflects waivers of fee and operating expenses in effect. In the absence of such waivers, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value
will fluctuate, so that your shares, when redeemed may be worth more or less than their original cost. Performance assumes the reinvestment of capital gains and income distributions. The performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Average Annual Rates of Return (%)
|
One Year Ended |
Since Inception(1) to | |
|
June 30, 2009 |
June 30, 2009 | |
|
Capital Appreciation Fund |
-22.85% |
-13.38% |
|
S&P 500 Index(2) |
-26.21% |
-23.35% |
|
(1) |
September 28, 2007 |
|
(2) |
The Standard & Poor’s 500 Index (S&P 500) is an unmanaged, capitalization-weighted index generally representative of the U.S. market for large capitalization stocks. This Index cannot be invested in directly. |
4
PROSPECTOR FUNDS, INC.
Opportunity Fund
The chart assumes an initial investment of $10,000. Performance reflects waivers of fee and operating expenses in effect. In the absence of such waivers, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value
will fluctuate, so that your shares, when redeemed may be worth more or less than their original cost. Performance assumes the reinvestment of capital gains and income distributions. The performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Average Annual Rates of Return (%)
|
One Year Ended |
Since Inception(1) to | |
|
June 30, 2009 |
June 30, 2009 | |
|
Opportunity Fund |
-14.89% |
-9.58% |
|
Russell 2000 Index(2) |
-25.01% |
-22.29% |
|
Russell Midcap Index(3) |
-30.36% |
-23.85% |
|
(1) |
September 28, 2007 |
|
(2) |
An unmanaged small-cap index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index. |
|
(3) |
An unmanaged mid-cap index that measures the performance of the 800 smallest companies in the Russell 1000 Index. |
5
PROSPECTOR FUNDS, INC.
Expense Example
June 30, 2009
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include but are not limited to, redemption fees, wire transfer fees, maintenance fee (IRA accounts), and exchange fees; and (2) ongoing costs, including management fees; distribution and/or service fees; and other Fund expenses. This Example is
intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2009 – June 30, 2009).
ACTUAL EXPENSES
The first line of the table below provides information about actual account values and actual expenses. Although the Fund charges no sales load or transaction fees, you will be assessed fees for outgoing wire transfers, returned checks and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Fund’s
transfer agent. The example below includes, but is not limited to, management fees, shareholder servicing fees and other Fund expenses. However, the example below does not include portfolio trading commissions and related expenses, interest expense and other extraordinary expenses as determined under generally accepted accounting principles. 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 Period” to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. 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 costs of investing in the Fund 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 or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs
of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
|
Expenses Paid |
||||||||||||
|
Beginning Account |
Ending Account |
During Period(1) |
||||||||||
|
Value (01/01/09) |
Value (06/30/09) |
(01/01/09 to 06/30/09) |
||||||||||
|
Capital Appreciation Actual(2) |
$1,000.00 | $1,062.70 | $7.67 | |||||||||
|
Capital Appreciation Hypothetical |
||||||||||||
|
(5% return before expenses) |
$1,000.00 | $1,017.36 | $7.50 | |||||||||
|
Opportunity Actual(2) |
$1,000.00 | $1,034.90 | $7.57 | |||||||||
|
Opportunity Hypothetical |
||||||||||||
|
(5% return before expenses) |
$1,000.00 | $1,017.36 | $7.50 | |||||||||
|
(1) |
Expenses are equal to the fund’s annualized expense ratio for the most recent six-month period of 1.50% and 1.50% for Capital Appreciation Fund and Opportunity Fund, respectively, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year/365 (to reflect the one-half year period). |
|
(2) |
Based on the actual returns for the six-month period ended June 30, 2009 of 6.27% and 3.49% for Capital Appreciation Fund and Opportunity Fund, respectively. |
6
PROSPECTOR FUNDS, INC.
Sector Allocation (% of net assets)
as of June 30, 2009(1)(2)
Capital Appreciation Fund
Top 10 Holdings (% of net assets)
as of June 30, 2009(1)(3)
Capital Appreciation Fund
|
CMS Energy, 2.875%, 12/01/2024 |
6.2% | |
|
Mirant |
4.2% | |
|
Nexen |
4.0% | |
|
Barrick Gold |
3.2% | |
|
E.I. Du Pont de Nemours |
3.1% | |
|
Calpine |
2.5% | |
|
Newmont Mining |
2.4% | |
|
Gold Fields – ADR |
2.3% | |
|
Unisource Energy |
2.3% | |
|
Amgen, 0.125%, 02/01/2011 |
2.3% | |
|
(1) |
Fund holdings and sector allocations are subject to change at any time and are not recommendations to buy
or sell any security. |
|
(2) |
Sector allocation includes all investment types. |
|
(3) |
AIM Short-Term Treasury Portfolio excluded from top 10 holdings. |
7
PROSPECTOR FUNDS, INC.
Sector Allocation (% of net assets)
as of June 30, 2009(1)(2)
Opportunity Fund
Top 10 Holdings (% of net assets)
as of June 30, 2009(1)(3)
Opportunity Fund
|
Newmont Mining |
3.8% | |
|
Platinum Underwriters Holdings |
3.7% | |
|
Schering-Plough |
3.1% | |
|
Franklin Resources |
2.7% | |
|
Nexen |
2.6% | |
|
Mirant |
2.3% | |
|
Hess |
2.3% | |
|
Axis Capital Holdings |
2.2% | |
|
Hugoton Royalty Trust |
2.1% | |
|
Leucadia National |
2.0% | |
|
(1) |
Fund holdings and sector allocations are subject to change at any time and are not recommendations to buy or sell any security. |
|
(2) |
Sector allocation includes all investment types. |
|
(3) |
AIM Short-Term Treasury Portfolio excluded from top 10 holdings. |
8
PROSPECTOR FUNDS, INC.
Schedule of Investments (Unaudited)
June 30, 2009
Capital Appreciation Fund
|
Description |
Shares |
Value |
||||||
|
COMMON STOCKS – 66.0% |
||||||||
|
Banks – 0.5% |
||||||||
|
Charter Financial |
6,900 | $ | 81,075 | |||||
|
Investors Bancorp* |
1,000 | 9,160 | ||||||
|
Rockville Financial |
1,400 | 15,330 | ||||||
|
Waterstone Financial* |
6,400 | 19,008 | ||||||
| 124,573 | ||||||||
|
Chemicals – 4.2% |
||||||||
|
Cabot |
2,600 | 32,708 | ||||||
|
Chemtura |
49,700 | 11,928 | ||||||
|
E.I. Du Pont de Nemours |
27,900 | 714,798 | ||||||
|
Huntsman |
22,900 | 115,187 | ||||||
|
International Flavors & Fragrances |
3,100 | 101,432 | ||||||
| 976,053 | ||||||||
|
Consumer Discretionary – 4.3% |
||||||||
|
Fortune Brands |
5,700 | 198,018 | ||||||
|
H&R Block |
16,100 | 277,403 | ||||||
|
Meredith |
16,300 | 416,465 | ||||||
|
New York Times, Class A |
9,900 | 54,549 | ||||||
|
Walt Disney |
2,200 | 51,326 | ||||||
| 997,761 | ||||||||
|
Consumer Staples – 5.1% |
||||||||
|
Campbell Soup |
2,200 | 64,724 | ||||||
|
Coca-Cola |
3,000 | 143,970 | ||||||
|
Coca-Cola Enterprises |
11,600 | 193,140 | ||||||
|
General Mills |
1,300 | 72,826 | ||||||
|
SUPERVALU |
4,900 | 63,455 | ||||||
|
Tootsie Roll Industries |
16,007 | 363,199 | ||||||
|
Viterra* |
8,600 | 74,676 | ||||||
|
Walgreen |
6,800 | 199,920 | ||||||
| 1,175,910 | ||||||||
|
Energy – 12.0% |
||||||||
|
Cimarex Energy |
11,400 | 323,076 | ||||||
|
Clayton Williams Energy* |
6,100 | 115,107 | ||||||
|
El Paso |
8,700 | 80,301 | ||||||
|
Encore Acquisition* |
1,800 | 55,530 | ||||||
|
Hess |
4,500 | 241,875 | ||||||
|
Marathon Oil |
10,400 | 313,352 | ||||||
See Notes to the Financial Statements
9
PROSPECTOR FUNDS, INC.
Schedule of Investments (Unaudited) – Continued
June 30, 2009
Capital Appreciation Fund
|
Description |
Shares |
Value |
||||||
|
COMMON STOCKS – 66.0% (CONTINUED) |
||||||||
|
Energy – 12.0% (Continued) |
||||||||
|
McMoRan Exploration* |
23,600 | $ | 140,656 | |||||
|
Nexen |
42,700 | 924,455 | ||||||
|
OPTI – Canada* |
56,800 | 95,224 | ||||||
|
Parker Drilling* |
8,000 | 34,720 | ||||||
|
Petro – Canada |
8,600 | 330,412 | ||||||
|
Repsol YPF – ADR |
4,500 | 100,620 | ||||||
|
San Juan Basin Royalty Trust |
1,700 | 24,429 | ||||||
| 2,779,757 | ||||||||
|
Healthcare – 1.4% |
||||||||
|
Pfizer |
21,600 | 324,000 | ||||||
|
Industrials – 0.7% |
||||||||
|
Sauer-Danfoss |
1,500 | 9,195 | ||||||
|
Tyco International |
5,600 | 145,488 | ||||||
| 154,683 | ||||||||
|
Information Technology – 3.9% |
||||||||
|
Automatic Data Processing |
9,600 | 340,224 | ||||||
|
Hewlett-Packard |
6,900 | 266,685 | ||||||
|
Xerox |
43,700 | 283,176 | ||||||
| 890,085 | ||||||||
|
Insurance – 7.2% |
||||||||
|
Arthur J. Gallagher |
3,800 | 81,092 | ||||||
|
Berkshire Hathaway, Class B* |
146 | 422,776 | ||||||
|
Cincinnati Financial |
2,600 | 58,110 | ||||||
|
Donegal Group, Class A |
3,000 | 45,630 | ||||||
|
Loews |
14,100 | 386,340 | ||||||
|
Max Capital Group |
11,000 | 203,060 | ||||||
|
Mercer Insurance Group |
3,400 | 54,060 | ||||||
|
Platinum Underwriters Holdings |
4,400 | 125,796 | ||||||
|
State Auto Financial |
16,700 | 292,250 | ||||||
| 1,669,114 | ||||||||
|
Metals & Mining – 9.7% |
||||||||
|
AngloGold Ashanti – ADR |
4,200 | 153,846 | ||||||
|
Barrick Gold |
22,400 | 751,520 | ||||||
|
Gold Fields – ADR |
44,200 | 532,610 | ||||||
|
Horsehead Holding* |
21,000 | 156,450 | ||||||
|
Newmont Mining |
13,500 | 551,745 | ||||||
See Notes to the Financial Statements
10
PROSPECTOR FUNDS, INC.
Schedule of Investments (Unaudited) – Continued
June 30, 2009
Capital Appreciation Fund
|
Description |
Shares |
Value |
||||||
|
COMMON STOCKS – 66.0% (CONTINUED) |
||||||||
|
Metals & Mining – 9.7% (Continued) |
||||||||
|
Norsk Hydro – ADR* |
5,700 | $ | 29,224 | |||||
|
Northgate Minerals* |
27,000 | 57,780 | ||||||
| 2,233,175 | ||||||||
|
Paper & Forest Products – 2.4% |
||||||||
|
Domtar* |
7,450 | 123,521 | ||||||
|
Graphic Packaging* |
26,500 | 48,495 | ||||||
|
MeadWestvaco |
15,700 | 257,637 | ||||||
|
Neenah Paper |
15,300 | 134,793 | ||||||
| 564,446 | ||||||||
|
Real Estate – 3.0% |
||||||||
|
Forestar Group* |
19,200 | 228,096 | ||||||
|
Post Properties |
33,700 | 452,928 | ||||||
|
Thomas Properties Group |
9,200 | 14,444 | ||||||
| 695,468 | ||||||||
|
Utilities – 11.6% |
||||||||
|
Calpine* |
51,488 | 574,091 | ||||||
|
Calpine – Escrow Shares* |
1,075,000 | 56,438 | ||||||
|
El Paso Electric* |
3,000 | 41,880 | ||||||
|
Mirant* |
61,100 | 961,714 | ||||||
|
NV Energy |
36,000 | 388,440 | ||||||
|
TransAlta |
7,300 | 140,019 | ||||||
|
Unisource Energy |
19,700 | 522,838 | ||||||
| 2,685,420 | ||||||||
|
Total Common Stocks |
||||||||
|
(Cost $20,419,936) |
15,270,445 | |||||||
|
Par |
||||||||
|
CONVERTIBLE CORPORATE BONDS – 28.4% |
||||||||
|
Amgen, 0.125%, 02/01/2011 |
$ | 550,000 | 522,500 | |||||
|
Anixter International, 1.000%, 02/15/2013 |
400,000 | 329,500 | ||||||
|
Archer Daniels, 0.875%, 02/15/2014 |
400,000 | 364,000 | ||||||
|
Carnival |
||||||||
|
2.000%, 04/15/2021 |
100,000 | 95,750 | ||||||
|
0.500%, 04/29/2033 (a) |
125,000 | 81,563 | ||||||
|
Century Aluminum, 1.750%, 08/01/2024 |
225,000 | 162,281 | ||||||
See Notes to the Financial Statements
11
PROSPECTOR FUNDS, INC.
Schedule of Investments (Unaudited) – Continued
June 30, 2009
Capital Appreciation Fund
|
Description |
Par |
Value |
||||||
|
CONVERTIBLE CORPORATE BONDS – 28.4% (CONTINUED) |
||||||||
|
Charles River Laboratories International, 2.250%, 06/15/2013 |
$ | 50,000 | $ | 45,437 | ||||
|
CMS Energy |
||||||||
|
2.875%, 12/01/2024 |
1,400,000 | 1,433,250 | ||||||
|
5.500%, 06/15/2029 |
100,000 | 104,000 | ||||||
|
Conseco, 3.500%, 09/30/2035 |
250,000 | 128,750 | ||||||
|
Dominion Resources, Series C, 2.125%, 12/15/2023 |
125,000 | 133,437 | ||||||
|
Eastman Kodak, 3.375%, 10/15/2033 |
625,000 | 503,125 | ||||||
|
EMC, 1.750%, 12/01/2011 |
200,000 | 207,000 | ||||||
|
ERP Operating, 3.850%, 08/15/2026 |
450,000 | 427,185 | ||||||
|
Kinross Gold |
||||||||
|
1.750%, 03/15/2028 |
25,000 | 23,063 | ||||||
|
1.750%, 03/15/2028 (b) |
175,000 | 161,437 | ||||||
|
Medtronic, 1.500%, 04/15/2011 |
425,000 | 411,188 | ||||||
|
Millipore, 3.750%, 06/01/2026 |
475,000 | 469,063 | ||||||
|
Newmont Mining |
||||||||
|
3.000%, 02/15/2012 |
100,000 | 112,750 | ||||||
|
1.250%, 07/15/2014 |
150,000 | 162,563 | ||||||
|
NovaGold Resources, 5.500%, 05/01/2015 |
50,000 | 27,813 | ||||||
|
Smithfield Foods, 4.000%, 06/30/2013 |
75,000 | 66,937 | ||||||
|
TimberWest Forest, 9.000%, 02/11/2014 |
20,200 | 19,972 | ||||||
|
UAL, 5.000%, 02/01/2021 |
225,000 | 94,500 | ||||||
|
Unisource Energy, 4.500%, 03/01/2035 |
525,000 | 444,281 | ||||||
|
Wyeth, 0.965%, 01/15/2024 (a) |
50,000 | 49,905 | ||||||
|
Total Convertible Corporate Bonds |
||||||||
|
(Cost $6,750,567) |
6,581,250 | |||||||
|
CORPORATE BONDS – 0.9% |
||||||||
|
McMoRan Exploration, 11.875%, 11/15/2014 |
75,000 | 63,468 | ||||||
|
Neenah Paper, 7.375%, 11/15/2014 |
225,000 | 144,844 | ||||||
|
Total Corporate Bonds |
||||||||
|
(Cost $149,033) |
208,312 | |||||||
|
Shares |
||||||||
|
STAPLED UNIT – 0.6% |
||||||||
|
Paper & Forest Products – 0.6% |
||||||||
|
TimberWest Forest |
||||||||
|
(Cost $408,056) |
45,300 | 132,027 | ||||||
See Notes to the Financial Statements
12
PROSPECTOR FUNDS, INC.
Schedule of Investments (Unaudited) – Continued
June 30, 2009
Capital Appreciation Fund
|
Description |
Shares |
Value |
||||||
|
WARRANT – 0.3% |
||||||||
|
Utilities – 0.3% |
||||||||
|
Mirant* |
||||||||
|
(Cost $199,579) |
47,700 | $ | 81,567 | |||||
|
CONVERTIBLE PREFERRED STOCK – 0.3% |
||||||||
|
Energy – 0.3% |
||||||||
|
El Paso Energy Capital Trust |
||||||||
|
(Cost $60,343) |
2,000 | 62,800 | ||||||
|
SHORT-TERM INVESTMENT – 3.2% |
||||||||
|
AIM Short-Term Treasury Portfolio |
||||||||
|
(Cost $745,579) |
745,579 | 745,579 | ||||||
|
Total Investments – 99.7% |
||||||||
|
(Cost $28,733,093) |
23,081,980 | |||||||
|
Other Assets and Liabilities, Net – 0.3% |
62,071 | |||||||
|
Total Net Assets – 100.0% |
$ | 23,144,051 | ||||||
|
* |
Non-income producing security. |
|
(a) |
Variable rate security at June 30, 2009. |
|
(b) |
Security purchased within the terms of a private placement memorandum, exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other “qualified institutional buyers.” As of June 30, 2009, the value of these investments was $161,437 or 0.7% of total net assets. |
ADR – American Depository Receipt
See Notes to the Financial Statements
13
PROSPECTOR FUNDS, INC.
Schedule of Investments (Unaudited)
June 30, 2009
Opportunity Fund
|
Description |
Shares |
Value |
||||||
|
COMMON STOCKS – 87.0% |
||||||||
|
Banks – 6.0% |
||||||||
|
Abington Bancorp |
11,200 | $ | 89,152 | |||||
|
AJS Bancorp |
2,000 | 29,000 | ||||||
|
Brooklyn Federal Bancorp |
6,600 | 74,250 | ||||||
|
Chicopee Bancorp* |
14,000 | 181,580 | ||||||
|
Comerica |
1,500 | 31,725 | ||||||
|
First Horizon National* |
6,704 | 80,450 | ||||||
|
Fox Chase Bancorp* |
11,600 | 111,244 | ||||||
|
Hampden Bancorp |
5,600 | 55,440 | ||||||
|
Northern Trust |
1,000 | 53,680 | ||||||
|
Ocean Shore Holding |
7,300 | 51,173 | ||||||
|
Oritani Financial* |
10,400 | 142,584 | ||||||
|
Roma Financial |
6,804 | 86,683 | ||||||
|
State Bancorp |
4,600 | 34,776 | ||||||
|
United Financial Bancorp |
3,100 | 42,842 | ||||||
|
Westfield Financial |
4,200 | 38,052 | ||||||
| 1,102,631 | ||||||||
|
Consumer Discretionary – 3.8% |
||||||||
|
AFC Enterprises* |
10,000 | 67,500 | ||||||
|
Gentex |
5,300 | 61,480 | ||||||
|
H&R Block |
6,200 | 106,826 | ||||||
|
NVR* |
690 | 346,649 | ||||||
|
Yum! Brands |
3,300 | 110,022 | ||||||
| 692,477 | ||||||||
|
Consumer Staples – 8.8% |
||||||||
|
Alberto-Culver |
13,100 | 333,133 | ||||||
|
Church & Dwight |
5,150 | 279,697 | ||||||
|
Clorox |
6,300 | 351,729 | ||||||
|
General Mills |
4,000 | 224,080 | ||||||
|
Hershey |
1,660 | 59,760 | ||||||
|
H.J. Heinz |
7,800 | 278,460 | ||||||
|
Viterra* |
10,600 | 92,043 | ||||||
| 1,618,902 | ||||||||
|
Diversified Financial Services – 7.1% |
||||||||
|
CME Group |
120 | 37,333 | ||||||
|
Cowen Group* |
10,523 | 87,867 | ||||||
|
Fifth Street Finance |
3,200 | 32,128 | ||||||
|
Franklin Resources |
6,800 | 489,668 | ||||||
See Notes to the Financial Statements
14
PROSPECTOR FUNDS, INC.
Schedule of Investments (Unaudited) – Continued
June 30, 2009
Opportunity Fund
|
Description |
Shares |
Value |
||||||
|
COMMON STOCKS – 87.0% (CONTINUED) |
||||||||
|
Diversified Financial Services – 7.1% (Continued) |
||||||||
|
Invesco |
5,400 | $ | 96,228 | |||||
|
Leucadia National* |
17,900 | 377,511 | ||||||
|
PICO Holdings* |
6,400 | 183,680 | ||||||
| 1,304,415 | ||||||||
|
Energy – 11.0% |
||||||||
|
Cimarex Energy |
9,600 | 272,064 | ||||||
|
Hess |
7,900 | 424,625 | ||||||
|
Hugoton Royalty Trust |
27,200 | 392,768 | ||||||
|
Murphy Oil |
4,500 | 244,440 | ||||||
|
Nexen |
21,800 | 471,970 | ||||||
|
San Juan Basin Royalty Trust |
16,000 | 229,920 | ||||||
| 2,035,787 | ||||||||
|
Healthcare – 4.7% |
||||||||
|
Aetna |
5,200 | 130,260 | ||||||
|
Facet Biotech* |
4,700 | 43,663 | ||||||
|
Henry Schein* |
2,500 | 119,875 | ||||||
|
Schering-Plough |
22,800 | 572,736 | ||||||
| 866,534 | ||||||||
|
Industrials – 2.6% |
||||||||
|
Armstrong World Industries* |
5,900 | 97,291 | ||||||
|
Toro |
4,700 | 140,530 | ||||||
|
Tyco International |
9,200 | 239,016 | ||||||
| 476,837 | ||||||||
|
Information Technology – 10.6% |
||||||||
|
CA |
7,500 | 130,725 | ||||||
|
CACI International* |
5,640 | 240,885 | ||||||
|
EMC* |
11,100 | 145,410 | ||||||
|
F5 Networks* |
1,500 | 51,885 | ||||||
|
MasterCard, Class A |
2,020 | 337,966 | ||||||
|
NetApp* |
12,900 | 254,388 | ||||||
|
Novellus Systems* |
8,700 | 145,290 | ||||||
|
Seagate Technology |
3,000 | 31,380 | ||||||
|
Symantec* |
16,400 | 255,184 | ||||||
|
Synopsys* |
7,300 | 142,423 | ||||||
|
Xilinx |
10,500 | 214,830 | ||||||
| 1,950,366 | ||||||||
See Notes to the Financial Statements
15
PROSPECTOR FUNDS, INC.
Schedule of Investments (Unaudited) – Continued
June 30, 2009
Opportunity Fund
|
Description |
Shares |
Value |
||||||
|
COMMON STOCKS – 87.0% (CONTINUED) |
||||||||
|
Insurance – 17.4% |
||||||||
|
Alleghany* |
122 | $ | 33,062 | |||||
|
AON |
5,700 | 215,859 | ||||||
|
Assurant |
7,800 | 187,902 | ||||||
|
Axis Capital Holdings |
15,800 | 413,644 | ||||||
|
Chubb |
6,100 | 243,268 | ||||||
|
Cincinnati Financial |
2,500 | 55,875 | ||||||
|
Hanover Insurance Group |
6,600 | 251,526 | ||||||
|
Lancashire Holdings* |
37,600 | 288,574 | ||||||
|
Max Capital Group |
10,200 | 188,292 | ||||||
|
Mercury General |
1,600 | 53,488 | ||||||
|
Platinum Underwriters Holdings |
23,900 | 683,301 | ||||||
|
Progressive* |
13,900 | 210,029 | ||||||
|
Wesco Financial Group |
427 | 124,257 | ||||||
|
Zenith National Insurance |
11,900 | 258,706 | ||||||
| 3,207,783 | ||||||||
|
Metals & Mining – 6.6% |
||||||||
|
Freeport-McMoRan Copper & Gold |
1,700 | 85,187 | ||||||
|
Horsehead Holding* |
20,970 | 156,226 | ||||||
|
IAMGOLD |
12,200 | 123,464 | ||||||
|
Kinross Gold |
6,400 | 116,160 | ||||||
|
Newmont Mining |
17,300 | 707,051 | ||||||
|
Pan American Silver* |
1,900 | 34,827 | ||||||
| 1,222,915 | ||||||||
|
Paper & Forest Products – 0.4% |
||||||||
|
Domtar* |
758 | 12,568 | ||||||
|
Neenah Paper |
4,500 | 39,645 | ||||||
|
TimberWest Forest |
6,900 | 20,110 | ||||||
| 72,323 | ||||||||
|
Real Estate – 0.3% |
||||||||
|
Forestar Group* |
3,600 | 42,768 | ||||||
|
Thomas Properties Group |
12,900 | 20,253 | ||||||
| 63,021 | ||||||||
|
Utilities – 7.7% |
||||||||
|
Allegheny Energy |
5,400 | 138,510 | ||||||
|
Calpine – Escrow Shares* |
125,000 | 6,562 | ||||||
|
CMS Energy |
21,000 | 253,680 | ||||||
See Notes to the Financial Statements
16
PROSPECTOR FUNDS, INC.
Schedule of Investments (Unaudited) – Continued
June 30, 2009
Opportunity Fund
|
Description |
Shares |
Value |
||||||
|
COMMON STOCKS – 87.0% (CONTINUED) |
||||||||
|
Utilities – 7.7% (Continued) |
||||||||
|
Empire District Electric |
4,900 | $ | 80,948 | |||||
|
Mirant* |
27,100 | 426,554 | ||||||
|
NV Energy |
29,400 | 317,226 | ||||||
|
TransAlta |
8,500 | 163,036 | ||||||
|
Unisource Energy |
1,400 | 37,156 | ||||||
| 1,423,672 | ||||||||
|
Total Common Stocks |
||||||||
|
(Cost $17,487,021) |
16,037,663 | |||||||
|
Par |
||||||||
|
CONVERTIBLE CORPORATE BONDS – 4.2% |
||||||||
|
Ciena, 0.250%, 05/01/2013 |
$ | 225,000 | 147,937 | |||||
|
Kinross Gold |
||||||||
|
1.750%, 03/15/2028 |
75,000 | 69,188 | ||||||
|
1.750%, 03/15/2028 (a) |
150,000 | 138,375 | ||||||
|
Maxtor |
||||||||
|
6.800%, 04/30/2010 |
175,000 | 174,125 | ||||||
|
2.375%, 08/15/2012 |
125,000 | 107,031 | ||||||
|
Symantec, 0.750%, 06/15/2011 |
125,000 | 125,938 | ||||||
|
TimberWest Forest, 9.000%, 02/11/2014 |
4,500 | 4,449 | ||||||
|
Total Convertible Bonds |
||||||||
|
(Cost $740,845) |
767,043 | |||||||
|
CORPORATE BONDS – 2.2% |
||||||||
|
Broadridge Financial Solutions, 6.125%, 06/01/2017 |
175,000 | 147,398 | ||||||
|
Leucadia National, 7.000%, 08/15/2013 |
200,000 | 184,000 | ||||||
|
Mohawk Industries, 6.250%, 01/15/2011 |
75,000 | 72,925 | ||||||
|
Total Corporate Bonds |
||||||||
|
(Cost $383,277) |
404,323 | |||||||
See Notes to the Financial Statements
17
PROSPECTOR FUNDS, INC.
Schedule of Investments (Unaudited) – Continued
June 30, 2009
Opportunity Fund
|
Description |
Shares |
Value |
||||||
|
WARRANT – 0.0% |
||||||||
|
Utilities – 0.0% |
||||||||
|
Mirant* |
||||||||
|
(Cost $27,363) |
6,000 | $ | 10,260 | |||||
|
SHORT-TERM INVESTMENT – 6.2% |
||||||||
|
AIM Short-Term Treasury Portfolio |
||||||||
|
(Cost $1,136,027) |
1,136,027 | 1,136,027 | ||||||
|
Total Investments – 99.6% |
||||||||
|
(Cost $19,774,533) |
18,355,316 | |||||||
|
Other Assets and Liabilities, Net – 0.4% |
69,158 | |||||||
|
Total Net Assets – 100.0% |
$ | 18,424,474 | ||||||
|
* |
Non-income producing security. |
|
(a) |
Security purchased within the terms of a private placement memorandum, exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other "qualified institutional buyers." As of June 30, 2009, the value of these investments was $138,375 or 0.8% of total net assets. |
See Notes to the Financial Statements
18
PROSPECTOR FUNDS, INC.
Statements of Assets and Liabilities (Unaudited)
June 30, 2009
|
Capital Appreciation Fund |
Opportunity Fund |
|||||||
|
ASSETS: |
||||||||
|
Investments, at market value |
||||||||
|
(Cost $28,733,093 and $19,774,533 respectively) |
$ | 23,081,980 | $ | 18,355,316 | ||||
|
Cash |
288 | 1,160 | ||||||
|
Receivable for investment securities sold |
141,334 | 25,803 | ||||||
|
Receivable for dividends and interest |
65,824 | 29,307 | ||||||
|
Receivable for capital shares sold |
41,743 | 40,484 | ||||||
|
Receivable for adviser reimbursements, net |
— | 5,976 | ||||||
|
Prepaid expenses and other assets |
11,671 | 10,550 | ||||||
|
Total assets |
23,342,840 | 18,468,596 | ||||||
|
LIABILITIES: |
||||||||
|
Payable for investment securities purchased |
143,190 | — | ||||||
|
Payable to adviser, net |
4,081 | — | ||||||
|
Accrued distribution fees |
4,783 | 2,454 | ||||||
|
Accrued expenses and other liabilities |
46,735 | 41,668 | ||||||
|
Total liabilities |
198,789 | 44,122 | ||||||
|
NET ASSETS |
$ | 23,144,051 | $ | 18,424,474 | ||||
|
COMPOSITION OF NET ASSETS: |
||||||||
|
Portfolio capital |
$ | 29,398,998 | $ | 21,595,222 | ||||
|
Undistributed net investment income |
281,974 | 22,568 | ||||||
|
Accumulated net realized loss on investments |
(885,619 | ) | (1,774,035 | ) | ||||
|
Net unrealized depreciation of investments |
(5,651,302 | ) | (1,419,281 | ) | ||||
|
Total net assets |
$ | 23,144,051 | $ | 18,424,474 | ||||
|
CAPITAL STOCK, $0.0001 par value |
||||||||
|
Authorized |
500,000,000 | 500,000,000 | ||||||
|
Issued and outstanding |
2,007,796 | 1,479,062 | ||||||
|
NET ASSET VALUE, REDEMPTION PRICE, |
||||||||
|
AND OFFERING PRICE PER SHARE |
$ | 11.53 | $ | 12.46 | ||||
See Notes to the Financial Statements
19
PROSPECTOR FUNDS, INC.
Statements of Operations (Unaudited)
For the Six Months Ended June 30, 2009
|
Capital Appreciation Fund |
Opportunity Fund |
|||||||
|
INVESTMENT INCOME: |
||||||||
|
Interest income |
$ | 305,288 | $ | 35,010 | ||||
|
Dividend income |
161,810 | 116,789 | ||||||
|
Less: Foreign taxes withheld |
(2,008 | ) | (651 | ) | ||||
|
Total investment income |
465,090 | 151,148 | ||||||
|
EXPENSES: |
||||||||
|
Investment advisory fees |
115,649 | 91,389 | ||||||
|
Directors’ fees |
29,194 | 22,851 | ||||||
|
Administration fees |
21,509 | 21,167 | ||||||
|
Fund accounting fees |
20,262 | 19,093 | ||||||
|
Legal fees |
18,075 | 14,143 | ||||||
|
Transfer agent fees |
14,372 | 12,665 | ||||||
|
Audit fees |
13,537 | 13,537 | ||||||
|
Distribution fees |
10,817 | 8,094 | ||||||
|
Registration fees |
10,571 | 10,488 | ||||||
|
Other expenses |
7,298 | 5,375 | ||||||
|
Custodian fees |
6,240 | 5,197 | ||||||
|
Postage and printing fees |
2,016 | 1,478 | ||||||
|
Total expenses |
269,540 | 225,477 | ||||||
|
Less: Fee waivers |
(111,836 | ) | (91,389 | ) | ||||
|
Less: Reimbursed expenses |
— | (9,466 | ) | |||||
|
Total net expenses |
157,704 | 124,622 | ||||||
|
NET INVESTMENT INCOME |
307,386 | 26,526 | ||||||
|
REALIZED AND UNREALIZED GAINS (LOSSES): |
||||||||
|
Net realized loss on investments |
(347,947 | ) | (994,116 | ) | ||||
|
Net change in unrealized depreciation of investments |
1,273,601 | 1,461,423 | ||||||
|
Net gain on investments |
925,654 | 467,307 | ||||||
|
NET INCREASE IN NET |
||||||||
|
ASSETS RESULTING FROM OPERATIONS |
$ | 1,233,040 | $ | 493,833 | ||||
See Notes to the Financial Statements
20
PROSPECTOR FUNDS, INC.
Statements of Changes in Net Assets
|
Capital Appreciation Fund |
||||||||
|
Six Months Ended |
||||||||
|
June 30, 2009 |
Year Ended |
|||||||
|
(Unaudited) |
December 31, 2008 |
|||||||
|
OPERATIONS: |
||||||||
|
Net investment income |
$ | 307,386 | $ | 148,246 | ||||
|
Net realized loss on investments |
(347,947 | ) | (552,140 | ) | ||||
|
Net change in unrealized depreciation on investments |
1,273,601 | (6,860,410 | ) | |||||
|
Net increase (decrease) resulting from operations |
1,233,040 | (7,264,304 | ) | |||||
|
CAPITAL SHARE TRANSACTIONS: |
||||||||
|
Proceeds from shares sold |
3,634,072 | 23,743,136 | ||||||
|
Proceeds from reinvestment of distributions |
— | 182,415 | ||||||
|
Payments for shares redeemed |
(1,821,622 | ) | (4,566,416 | ) | ||||
|
Redemption fees |
7,179 | 16,988 | ||||||
|
Net increase from capital share transactions |
1,819,629 | 19,376,123 | ||||||
|
DISTRIBUTIONS PAID FROM: |
||||||||
|
Net investment income |
— | (166,867 | ) | |||||
|
Net realized gains |
— | (21,567 | ) | |||||
|
Total distributions to shareholders |
— | (188,434 | ) | |||||
|
TOTAL INCREASE IN NET ASSETS |
3,052,669 | 11,923,385 | ||||||
|
NET ASSETS: |
||||||||
|
Beginning of period |
20,091,382 | 8,167,997 | ||||||
|
End of period (including undistributed |
||||||||
|
(distributions in excess of) net investment |
||||||||
|
income of $281,974 and $(25,412), respectively) |
$ | 23,144,051 | $ | 20,091,382 | ||||
|
TRANSACTIONS IN SHARES: |
||||||||
|
Shares sold |
337,134 | 1,694,655 | ||||||
|
Shares issued in reinvestment of distributions |
— | 17,176 | ||||||
|
Shares redeemed |
(180,948 | ) | (406,802 | ) | ||||
|
Net increase |
156,186 | 1,305,029 | ||||||
See Notes to the Financial Statements
21
PROSPECTOR FUNDS, INC.
Statements of Changes in Net Assets
|
Opportunity Fund |
||||||||
|
Six Months Ended |
||||||||
|
June 30, 2009 |
Year Ended |
|||||||
|
(Unaudited) |
December 31, 2008 |
|||||||
|
OPERATIONS: |
||||||||
|
Net investment income |
$ | 26,526 | $ | 71,163 | ||||
|
Net realized loss on investments |
(994,116 | ) | (764,416 | ) | ||||
|
Net change in unrealized depreciation on investments |
1,461,423 | (2,846,430 | ) | |||||
|
Net increase (decrease) resulting from operations |
493,833 | (3,539,683 | ) | |||||
|
CAPITAL SHARE TRANSACTIONS: |
||||||||
|
Proceeds from shares sold |
3,541,067 | 16,344,630 | ||||||
|
Proceeds from reinvestment of distributions |
— | 73,907 | ||||||
|
Payments for shares redeemed |
(1,641,848 | ) | (2,683,607 | ) | ||||
|
Redemption fees |
6,806 | 7,947 | ||||||
|
Net increase from capital share transactions |
1,906,025 | 13,742,877 | ||||||
|
DISTRIBUTIONS PAID FROM: |
||||||||
|
Net investment income |
— | (74,309 | ) | |||||
|
Net realized gains |
— | — | ||||||
|
Total distributions to shareholders |
— | (74,309 | ) | |||||
|
TOTAL INCREASE IN NET ASSETS |
2,399,858 | 10,128,885 | ||||||
|
NET ASSETS: |
||||||||
|
Beginning of period |
16,024,616 | 5,895,731 | ||||||
|
End of period (including undistributed |
||||||||
|
(distributions in excess of) net investment |
||||||||
|
income of $22,568 and $(3,958), respectively) |
$ | 18,424,474 | $ | 16,024,616 | ||||
|
TRANSACTIONS IN SHARES: |
||||||||
|
Shares sold |
298,253 | 1,152,108 | ||||||
|
Shares issued in reinvestment of distributions |
— | 6,226 | ||||||
|
Shares redeemed |
(150,397 | ) | (221,322 | ) | ||||
|
Net increase |
147,856 | 937,012 | ||||||
See Notes to the Financial Statements
22
PROSPECTOR FUNDS, INC.
Financial Highlights
|
Capital Appreciation Fund |
||||||||||||
|
Six Months Ended |
September 28, 2007(1) |
|||||||||||
|
June 30, 2009 |
Year Ended |
through |
||||||||||
|
(Unaudited) |
December 31, 2008 |
December 31, 2007 |
||||||||||
|
For a Fund share outstanding |
||||||||||||
|
throughout the period |
||||||||||||
|
NET ASSET VALUE: |
||||||||||||
|
Beginning of period |
$ | 10.85 | $ | 14.94 | $ | 15.00 | ||||||
|
OPERATIONS: |
||||||||||||
|
Net investment income |
0.15 | 0.08 | 0.01 | |||||||||
|
Net realized and unrealized |
||||||||||||
|
gain (loss) on investments |
0.53 | (4.08 | ) | (0.06 | ) | |||||||
|
Total from operations |
0.68 | (4.00 | ) | (0.05 | ) | |||||||
|
LESS DISTRIBUTIONS: |
||||||||||||
|
From net investment income |
— | (0.09 | ) | (0.01 | ) | |||||||
|
From net realized gains |
— | (0.01 | ) | — | ||||||||
|
Total distributions |
— | (0.10 | ) | (0.01 | ) | |||||||
|
Paid in capital from redemption fees |
— | 0.01 | — | |||||||||
|
NET ASSET VALUE: |
||||||||||||
|
End of period |
$ | 11.53 | $ | 10.85 | $ | 14.94 | ||||||
|
TOTAL RETURN |
6.27 | %(2) | (26.67 | )% | (0.32 | )%(2) | ||||||
|
SUPPLEMENTAL DATA AND RATIOS: |
||||||||||||
|
Net assets, end of period (in thousands) |
$ | 23,144 | $ | 20,091 | $ | 8,168 | ||||||
|
Ratio of expenses to average net assets: |
||||||||||||
|
Before expense reimbursement |
2.56 | %(3) | 3.51 | % | 11.28 | %(3) | ||||||
|
After expense reimbursement |
1.50 | %(3) | 1.50 | % | 1.50 | %(3) | ||||||
|
Ratio of net investment |
||||||||||||
|
income (loss) to average net assets: |
||||||||||||
|
Before expense reimbursement |
1.86 | %(3) | (1.07 | )% | (9.38 | )%(3) | ||||||
|
After expense reimbursement |
2.92 | %(3) | 0.94 | % | 0.40 | %(3) | ||||||
|
Portfolio turnover rate |
19 | %(2) | 21 | % | 5 | %(2) | ||||||
|
(1) |
Inception date of the fund. |
|
(2) |
Not annualized. |
|
(3) |
Annualized. |
See Notes to the Financial Statements
23
PROSPECTOR FUNDS, INC.
Financial Highlights
|
Opportunity Fund |
||||||||||||
|
Six Months Ended |
September 28, 2007(1) |
|||||||||||
|
June 30, 2009 |
Year Ended |
through |
||||||||||
|
(Unaudited) |
December 31, 2008 |
December 31, 2007 |
||||||||||
|
For a Fund share outstanding |
||||||||||||
|
throughout the period |
||||||||||||
|
NET ASSET VALUE: |
||||||||||||
|
Beginning of period |
$ | 12.04 | $ | 14.96 | $ | 15.00 | ||||||
|
OPERATIONS: |
||||||||||||
|
Net investment income |
0.02 | 0.05 | 0.02 | |||||||||
|
Net realized and unrealized |
||||||||||||
|
gain (loss) on investments |
0.40 | (2.92 | ) | (0.01 | ) | |||||||
|
Total from operations |
0.42 | (2.87 | ) | 0.01 | ||||||||
|
LESS DISTRIBUTIONS: |
||||||||||||
|
From net investment income |
— | (0.06 | ) | (0.02 | ) | |||||||
|
From net realized gains |
— | — | (0.03 | ) | ||||||||
|
Total distributions |
— | (0.06 | ) | (0.05 | ) | |||||||
|
Paid in capital from redemption fees |
— | 0.01 | — | |||||||||
|
NET ASSET VALUE: |
||||||||||||
|
End of period |
$ | 12.46 | $ | 12.04 | $ | 14.96 | ||||||
|
TOTAL RETURN |
3.49 | %(2) | (19.14 | )% | 0.11 | %(2) | ||||||
|
SUPPLEMENTAL DATA AND RATIOS: |
||||||||||||
|
Net assets, end of period (in thousands) |
$ | 18,424 | $ | 16,025 | $ | 5,896 | ||||||
|
Ratio of expenses to average net assets: |
||||||||||||
|
Before expense reimbursement |
2.71 | %(3) | 4.11 | % | 14.50 | %(3) | ||||||
|
After expense reimbursement |
1.50 | %(3) | 1.50 | % | 1.50 | %(3) | ||||||
|
Ratio of net investment |
||||||||||||
|
income (loss) to average net assets: |
||||||||||||
|
Before expense reimbursement |
(0.89 | )%(3) | (1.96 | )% | (12.27 | )%(3) | ||||||
|
After expense reimbursement |
0.32 | %(3) | 0.65 | % | 0.73 | %(3) | ||||||
|
Portfolio turnover rate |
32 | %(2) | 66 | % | 18 | %(2) | ||||||
|
(1) |
Inception date of the fund. |
|
(2) |
Not annualized. |
|
(3) |
Annualized. |
See Notes to the Financial Statements
24
PROSPECTOR FUNDS, INC.
Notes to the Financial Statements (Unaudited)
June 30, 2009
1. ORGANIZATION
Prospector Funds, Inc. (the “Corporation”) was organized as a Maryland corporation on June 6, 2007 and is registered under the Investment Company Act of 1940 (the “1940 Act”), as amended, as an open-end diversified management investment company. The Corporation issues its shares in series, each series
representing a distinct portfolio with its own investment objectives and policies. There are two series presently authorized, the Prospector Capital Appreciation Fund and the Prospector Opportunity Fund (individually a “Fund” and collectively the “Funds”). The Funds commenced operations on September 28, 2007.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by each Fund:
Security Valuation – Portfolio securities which are traded on an exchange are valued at the last sales price reported by the exchange on which the securities are primarily traded on the day of valuation. If there are no sales on a given day for securities traded on
an exchange or for securities not traded or dealt on any securities exchange for which over-the-counter market quotations are readily available, the latest bid quotation will be used. Debt securities with remaining maturities of 60 days or less may be valued on an amortized cost basis, which involves valuing an instrument at its cost and thereafter assuming a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating rates on the market value of the instrument. Any
securities or other assets for which market quotations are not readily available are valued at fair value as determined in good faith by Prospector Partners Asset Management, LLC (the “Adviser” or “Investment Manager”) pursuant to procedures established under the general supervision and responsibility of the Funds’ Board of Directors.
The Funds adopted the provisions of Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157), on January 1, 2008. FAS 157 requires the Funds to classify its securities based on a valuation method, using the following levels:
Level 1 – Quoted prices in active markets for identical securities.
Level 2 – Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3 – Significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
25
PROSPECTOR FUNDS, INC.
Notes to the Financial Statements (Unaudited) – Continued
June 30, 2009
As of June 30, 2009, each fund’s investments in securities were classified as follows:
|
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
|
Capital Appreciation Fund |
||||||||||||||||
|
Equity |
||||||||||||||||
|
Consumer Discretionary |
$ | 1,006,956 | $ | — | $ | — | $ | 1,006,956 | ||||||||
|
Consumer Staples |
1,175,910 | — | — | 1,175,910 | ||||||||||||
|
Energy |
2,842,557 | — | — | 2,842,557 | ||||||||||||
|
Financials |
2,489,155 | — | — | 2,489,155 | ||||||||||||
|
Healthcare |
324,000 | — | — | 324,000 | ||||||||||||
|
Industrials |
145,488 | — | — | 145,488 | ||||||||||||
|
Information Technology |
890,085 | — | — | 890,085 | ||||||||||||
|
Materials |
3,905,701 | — | — | 3,905,701 | ||||||||||||
|
Telecommunication Services |
— | — | — | — | ||||||||||||
|
Utilities |
2,710,549 | — | 56,438 | 2,766,987 | ||||||||||||
|
Total Equity |
15,490,401 | — | 56,438 | 15,546,839 | ||||||||||||
|
Fixed Income |
||||||||||||||||
|
Convertible Bonds |
— | 6,561,278 | 19,972 | 6,581,250 | ||||||||||||
|
Corporate Bonds |
— | 208,312 | — | 208,312 | ||||||||||||
|
Total Fixed Income |
— | 6,769,590 | 19,972 | 6,789,562 | ||||||||||||
|
Short-Term Investments |
745,579 | — | — | 745,579 | ||||||||||||
|
Total Investments |
$ | 16,235,980 | $ | 6,769,590 | $ | 76,410 | $ | 23,081,980 | ||||||||
|
Other Financial Instruments* |
$ | — | $ | — | $ | — | $ | — | ||||||||
|
Opportunity Fund |
||||||||||||||||
|
Equity |
||||||||||||||||
|
Consumer Discretionary |
$ | 692,477 | $ | — | $ | — | $ | 692,477 | ||||||||
|
Consumer Staples |
1,618,902 | — | — | 1,618,902 | ||||||||||||
|
Energy |
2,035,787 | — | — | 2,035,787 | ||||||||||||
|
Financials |
5,494,170 | — | — | 5,494,170 | ||||||||||||
|
Healthcare |
866,534 | — | — | 866,534 | ||||||||||||
|
Industrials |
660,517 | — | — | 660,517 | ||||||||||||
|
Information Technology |
1,950,366 | — | — | 1,950,366 | ||||||||||||
|
Materials |
1,295,238 | — | — | 1,295,238 | ||||||||||||
|
Telecommunication Services |
— | — | — | — | ||||||||||||
|
Utilities |
1,427,370 | — | 6,562 | 1,433,932 | ||||||||||||
|
Total Equity |
16,041,361 | — | 6,562 | 16,047,923 | ||||||||||||
|
Fixed Income |
||||||||||||||||
|
Convertible Bonds |
— | 762,594 | 4,449 | 767,043 | ||||||||||||
|
Corporate Bonds |
— | 404,323 | — | 404,323 | ||||||||||||
|
Total Fixed Income |
— | 1,166,917 | 4,449 | 1,171,366 | ||||||||||||
|
Short-Term Investments |
1,136,027 | — | — | 1,136,027 | ||||||||||||
|
Total Investments |
$ | 17,177,388 | $ | 1,166,917 | $ | 11,011 | $ | 18,355,316 | ||||||||
|
Other Financial Instruments* |
$ | — | $ | — | $ | — | $ | — | ||||||||
|
* |
Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation (depreciation) on the instrument (none held as of June 30, 2009). |
26
PROSPECTOR FUNDS, INC.
Notes to the Financial Statements (Unaudited) – Continued
June 30, 2009
The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.
|
Capital |
Opportunity |
|||||||||||||||
|
Appreciation Fund |
Fund | |||||||||||||||
|
Equity - |
Convertible |
Equity - |
Convertible |
|||||||||||||
|
Utilities |
Bonds |
Utilities |
Bonds |
|||||||||||||
|
Balance as of 12/31/2008 |
$31,000 | $ — | $5,000 | $ — | ||||||||||||
|
Accrued discounts/ premiums |
— | — | — | — | ||||||||||||
|
Realized gain (loss) |
— | — | — | — | ||||||||||||
|
Change in net unrealized appreciation (depreciation) |
14,938 | 3,455 | 1,562 | 770 | ||||||||||||
|
Net purchases (sales) |
10,500 | 16,517 | — | 3,679 | ||||||||||||
|
Transfers in and/or out of Level 3 |
— | — | — | — | ||||||||||||
|
Balance as of 6/30/2009 |
$56,438 | $19,972 | $6,562 | $4,449 | ||||||||||||
The Funds have adopted Statement of Financial Accounting Standard No. 161, “Disclosures about Derivatives Instruments and Hedging Activities” (FAS 161). FAS 161 is an amendment to Statement of Financial Accounting Standards No. 133 (FAS 133), expanding the disclosure requirements of FAS 133 regarding the Funds’
use of derivative instruments and hedging activities. As of June 30, 2009, the Funds held no derivative instruments.
Distributions to Shareholders – Dividends from net investment income and distributions of net realized capital gains, if any, will be declared and paid at least annually. The character of distributions made during the period from net investment income or net realized
gains may differ from the characterization for federal income tax purposes due to differences in the recognition of income, expense and gain items for financial statement and tax purposes. All short-term capital gains are included in ordinary income for tax purposes.
Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent 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.
Federal Income Taxes – The Funds intend to meet the requirements of subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all net taxable investment income and net realized gains to shareholders in a manner which
results in no tax cost to the Funds. Therefore, no federal income or excise tax provision is required. The Funds recognize uncertain tax positions consistent with FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes.” As of June 30, 2009, there were no such uncertainties recognized in the accompanying financial statements.
Foreign Currency Translation – The books and records relating to the Funds’ non-U.S. dollar denominated investments are maintained in U.S. dollars on the following bases: (1) market value of investment securities, assets, and liabilities are translated at the
current rate of exchange; and (2) purchases and sales of investment securities, income, and expenses are translated at the relevant rates of exchange prevailing on the respective dates of such transactions. The Funds do not isolate the portion of gains and losses on investments in equity securities that is due to changes in the foreign exchange rates from that which is due to changes in market prices of equity securities. The Funds report certain foreign currency-related transactions as
components of realized gains for financial reporting purposes, whereas such components are treated as ordinary income for federal income tax purposes.
27
PROSPECTOR FUNDS, INC.
Notes to the Financial Statements (Unaudited) – Continued
June 30, 2009
Expenses – Expenses directly attributable to a Fund are charged to that Fund, while expenses attributable to more than one Fund are allocated among the respective Funds based on relative net assets or another appropriate basis.
Other – Investment and shareholder transactions are recorded on the trade date. Each Fund determines the gain or loss realized from the investment transactions on the basis of identified cost. Dividend income is recognized on the ex-dividend date. Interest
income, including amortization of bond premium and discount, is recognized on an accrual basis.
3. INVESTMENT TRANSACTIONS
During the six months ended June 30, 2009, purchases of securities and proceeds from sales of securities, other than temporary investments in short-term securities, were as follows:
|
Purchases |
Sales |
|||||||
|
Capital Appreciation Fund |
$ | 5,591,175 | $ | 3,893,033 | ||||
|
Opportunity Fund |
6,608,493 | 4,905,241 | ||||||
There were no purchases or sales of long-term U.S. Government securities.
The aggregate gross unrealized appreciation and depreciation of securities held by the Funds and the total cost of securities for federal income tax purposes at June 30, 2009, were as follows:
|
Aggregate |
Aggregate |
Federal |
||||||||||||||
|
Gross |
Gross |
Income |
||||||||||||||
|
Appreciation |
Depreciation |
Net |
Tax Cost |
|||||||||||||
|
Capital Appreciation Fund |
$ | 1,309,787 | $ | (6,960,900 | ) | $ | (5,651,113 | ) | $ | 28,733,093 | ||||||
|
Opportunity Fund |
1,314,482 | (2,733,699 | ) | (1,419,217 | ) | 19,774,533 | ||||||||||
At December 31, 2008, the Funds’ most recently completed fiscal year-end, components of accumulated earnings (deficit) on a tax-basis were as follows:
|
Undistributed |
Other |
Total |
||||||||||||||
|
Ordinary |
Accumulated |
Unrealized |
Accumulated |
|||||||||||||
|
Income |
Losses |
Depreciation |
Earnings (Deficit) |
|||||||||||||
|
Capital Appreciation Fund |
$ | — | $ | (364,409 | ) | $ | (7,123,578 | ) | $ | (7,487,987 | ) | |||||
|
Opportunity Fund |
— | (744,630 | ) | (2,919,951 | ) | (3,664,581 | ) | |||||||||
As of December 31, 2008, Opportunity Fund had capital loss carryovers of $311,833, which if not offset by subsequent capital gains, will expire in 2016. As of December 31, 2008, Capital Appreciation Fund and Opportunity Fund had $343,957 and $416,338, respectively, of deferred, on a tax basis, post-October losses.
There were no distributions paid during the six months ended June 30, 2009.
The tax character of distributions paid during the fiscal year ended December 31, 2008 were as follows:
|
Ordinary |
Return of |
Long Term |
||||||||||||||
|
Income |
Capital |
Capital Gains |
Total |
|||||||||||||
|
Capital Appreciation Fund |
$ | 180,221 | $ | 8,213 | $ | — | $ | 188,434 | ||||||||
|
Opportunity Fund |
72,626 | 1,683 | — | 74,309 | ||||||||||||
28
PROSPECTOR FUNDS, INC.
Notes to the Financial Statements (Unaudited) – Continued
June 30, 2009
4. AGREEMENTS
The Funds have entered into an Investment Advisory Agreement with the Adviser, with whom certain directors and officers of the Corporation are affiliated, to furnish investment advisory services to the Funds. Pursuant to this Agreement, the Adviser is entitled to receive a fee, calculated daily and payable monthly, at the annual
rate of 1.10% as applied to each Fund’s daily net assets.
The Adviser has contractually agreed to waive, through September 28, 2010 its management fee and/or reimburse each Fund’s other expenses to the extent necessary to ensure that each Fund’s operating expenses do not exceed 1.50% of its average daily net assets. Any such waiver or reimbursement may be subject to later
adjustment to allow the Adviser to recoup amounts waived or reimbursed to the extent actual fees and expenses for a fiscal year are less than the respective expense cap limitations, provided, however, that the Adviser shall only be entitled to recoup such amounts for a period of three years from the date such amount was waived or reimbursed. Waived/reimbursed fees and expenses subject to potential recovery by year of expiration are as follows:
|
Expiration |
Capital Appreciation Fund |
Opportunity Fund |
||||||
|
12/31/10 |
$ | 156,132 | $ | 156,522 | ||||
|
12/31/11 |
316,194 | 287,941 | ||||||
|
12/31/12 |
111,836 | 100,855 | ||||||
|
Total |
$ | 584,162 | $ | 545,318 | ||||
As of June 30, 2009, it was possible, but not probable, those amounts would be recovered by the Adviser. At the end of each fiscal year in the future, the Funds will continue to assess the potential recovery of waived/reimbursed fees and expenses for financial reporting purposes.
Quasar Distributors, LLC (“Quasar”), a subsidiary of U.S. Bancorp, serves as distributor of the Funds’ shares pursuant to a Distribution Agreement with the Corporation. Each Fund’s shares are sold on a no-load basis and, therefore, Quasar receives no sales commission or sales load for providing services to the Funds. The
Corporation has adopted a plan pursuant to Rule 12b-1 under the 1940 Act (the “12b-1 Plan”), which authorizes the Corporation to reimburse Quasar and certain financial intermediaries who assist in distributing each Fund’s shares or who provide shareholder services to Fund shareholders a distribution and/or shareholder servicing fee of up to 0.25% of each Fund’s average daily net assets (computed on an annual basis). All or a portion of the fee may be used by the Funds or Quasar to pay
the Fund’s distribution fees and costs of printing reports and prospectuses for potential investors and the costs of other distribution and shareholder services expenses. During the six months ended June 30, 2009, Capital Appreciation Fund and Opportunity Fund incurred expenses of $10,817 and $8,094, respectively, pursuant to the 12b-1 Plan.
U.S. Bancorp Fund Services, LLC serves as transfer agent, administrator and fund accountant for the Funds. U.S. Bank, N.A. serves as custodian for the Funds.
5. INDEMNIFICATIONS
The Funds enter into contracts that contain a variety of indemnifications. The Funds’ maximum exposure under these arrangements is unknown. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.
29
PROSPECTOR FUNDS, INC.
Notes to the Financial Statements (Unaudited) – Continued
June 30, 2009
6. SUBSEQUENT EVENTS
Management has evaluated fund related events and transactions that occurred subsequent to June 30, 2009, through August 28, 2009, the date of issuance of the funds’ financial statements. There were no events or transactions that occurred during this period that materially impacted the amounts or disclosures in the funds’
financial statements.
30
PROSPECTOR FUNDS, INC.
Additional Information (Unaudited)
June 30, 2009
AVAILABILITY OF FUND PORTFOLIO INFORMATION
The Funds file complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q, which is available on the SEC’s website at www.sec.gov. The Funds’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. For information
on the Public Reference Room call 1-800-SEC-0330. In addition, the Funds’ Form N-Q is available without charge upon request by calling 1-877-PFI-STOCK or 1-877-734-7862.
AVAILABILITY OF PROXY VOTING INFORMATION
A description of the Funds’ Proxy Voting Policies and Procedures is available without charge, upon request, by calling 1-877-PFI-STOCK or 1-877-734-7862. Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12 month period ended June 30, is available (1) without charge,
upon request, by calling 1-877-PFI-STOCK or 1-877-734-7862, or (2) on the SEC’s website at www.sec.gov.
31
(This Page Intentionally Left Blank.)
DIRECTORS
John D. Gillespie
Harvey D. Hirsch
Joseph Klein III
Roy L. Nersesian
John T. Rossello, Jr.
INVESTMENT ADVISER
Prospector Partners Asset Management, LLC
370 Church Street
Guilford, CT 06437
DISTRIBUTOR
Quasar Distributors, LLC
615 East Michigan Street
Milwaukee, WI 53202
CUSTODIAN
U.S. Bank, N.A.
1555 North River Center Drive
Milwaukee, WI 53212
ADMINISTRATOR AND TRANSFER AGENT
U.S. Bancorp Fund Services, LLC
Third Floor
615 E. Michigan Street
Milwaukee, WI 53202
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
220 South Sixth Street, Suite 1400
Minneapolis, MN 55402
LEGAL COUNSEL
Seward & Kissel LLP
One Battery Plaza
New York, NY 10004
This report should be accompanied or preceded by a prospectus.
The Funds’ Statement of Additional Information contains additional information about the
Funds’ directors and is available without charge upon request by calling 1-877-PFI-STOCK.
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Note applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable to open-end investment companies.
Item 6. Schedule of Investments.
Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchases.
Not applicable to open-end investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
Not Applicable.
Item 11. Controls and Procedures.
|
(a) |
The Registrant’s President and Treasurer have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b)
under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service provider. |
|
(b) |
There were no significant changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting. |
Item 12. Exhibits.
|
(a) |
(1) Any code of ethics or amendment thereto, that is subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Not applicable for semi-annual reports. |
(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable to open-end investment companies.
|
(b) |
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Prospector Funds, Inc.
By (Signature and Title)* /s/ John D. Gillespie
John D. Gillespie, President
Date September 8, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* /s/ John D. Gillespie
John D. Gillespie, President
Date September 8, 2009
By (Signature and Title)* /s/ Peter N. Perugini, Jr.
Peter N. Perugini, Jr., Treasurer
Date September 8, 2009
* Print the name and title of each signing officer under his or her signature.