Every open-end fund is required to state an investment objective, and most state it in a sentence that could serve a thousand other funds. The Wall Street Fund, Inc. was in this respect conventional: "The Wall Street Fund, Inc.'s primary investment objective is to produce growth of capital," pursued "principally in a diversified portfolio of common stocks considered by Wall Street Management Corporation ... to offer prospects of sustained growth in value," with the receipt of income a secondary objective. What distinguishes the 2005 prospectus is the paragraph that follows, in which the fund explains how it proposed to convert that objective into decisions.
The three practices
The prospectus states that "in practical application, the Fund attempts to attain its investment objectives by relying on three fundamental practices," and names them: careful selection of securities based on the performance and position of individual companies and their industries relative to alternative investments; broad diversification among industries and companies, described as fundamental to spreading the risk inherent in any single investment; and continuous scrutiny of investments, since realization of value depends on timing, market trends and the economy.
The triad has a long pedigree in the literature of investment counsel — selection, diversification, supervision — and its appearance here connects a small 1945 fund to the professional idiom of the mid-century trust department. The prospectus then supplies the analytical content of "selection": emphasis on pre-tax margins, return on equity and cash flow "actually or expected to be superior to those of the average company," with price-earnings ratios treated as meaningful in relation to those measures rather than as a screen in their own right. Companies were to have at least three years of operating history; capitalization could range across small, medium and large; the style was self-described as growth-oriented; and the adviser reported that it "rarely" committed more than 3% of net asset value at cost to a single security.
The method in the data
Two disclosed series test the stated method against practice. The first is turnover: 143% in 1996, 142% in 1997, 121% in 1998, 166% in 1999, 104% in 2000, 93% in 2001, 110% in 2002, 125% in 2003 and 94% in 2004. "Continuous scrutiny" was evidently an active verb. A portfolio replaced more than once a year sits at the trading-intensive end of the growth spectrum, and the prospectus's own risk section acknowledged as much by flagging turnover at or above 100% as a source of taxable distributions and transaction costs.
The second series is the record of returns. The audited financial highlights give annual total returns of 36.50% (1996), 11.45% (1997), −2.37% (1998), 31.40% (1999), 62.88% (2000), 3.41% (2001), −23.15% (2002), −36.34% (2003) and 49.90% (2004). The prospectus separately reports a best quarter of 40.83% in the fourth quarter of 1999 and a worst quarter of −27.77% in the third quarter of 2001. These are historical figures, after fees and with reinvested distributions, and they belong to the fund and its adviser of the period. What they show, for the purposes of this essay, is dispersion: a range of more than ninety-nine percentage points between the best and worst calendar years within a single decade. A method built on small and mid-capitalization growth companies, actively traded, produced results with exactly the amplitude that method predicts.
The 2005 prospectus paired the fund with the Russell 2000 Index and the Russell 2500 Growth Index, benchmarks that locate the fund in the smaller-company growth universe. The choice of comparison is itself a statement of self-understanding.
Restatement in 2019
The successor's 2019 prospectus preserved the growth-of-capital objective and asserted that the fund's "investment objectives and policies are the same in all material respects as the Predecessor Fund's" — the legal basis on which it adopted the predecessor's performance history. Portfolio management passed to a team at Evercore Wealth Management: Timothy Evnin from 2010, Charles D. Ryan from December 2011, supported by Michael Seppelt. The benchmarks became the S&P 500 and the Russell 1000, indices of large-capitalization American equities.
Conclusion
The investment philosophy of The Wall Street Fund, Inc., as the fund itself expressed it in 2005, was a compact synthesis of mid-century counsel — selection, diversification, supervision — applied to a growth-oriented, actively traded portfolio of companies of varied size. The audited record is consistent with that description in every measurable respect: high turnover, wide dispersion of annual results, and benchmarks drawn from the smaller-company universe. The 2019 restatement kept the words of the objective and changed the yardstick. For a study of how funds describe themselves across time, the two documents together are a nearly ideal specimen: one objective, two eras, and a benchmark that quietly moved.