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: 811-04656
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BANCROFT FUND LTD.
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(Exact name of registrant as specified in charter)
65 Madison Avenue, Morristown, New Jersey 07960-7308
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(Address of principal executive offices) (Zip code)
Thomas H. Dinsmore
BANCROFT FUND LTD.
65 Madison Avenue
Morristown, New Jersey 07960-7308
(Name and address of agent for service)
Copy to:
Steven B. King, Esq.
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599
Registrant's telephone number, including area code: (973)631-1177
Date of fiscal year end: October 31
Date of reporting period: April 30, 2008
ITEM 1. REPORTS TO STOCKHOLDERS.
BANCROFT FUND LTD.
[BANCROFT LOGO APPEARS HERE]
2008 Semi-Annual Report
April 30, 2008
2008 Semi-Annual Report
April 30, 2008
Bancroft Fund Ltd. operates as a closed-end, diversified management investment
company and invests primarily in convertible securities, with the objectives of
providing income and the potential for capital appreciation ~ which objectives
the Fund considers to be relatively equal, over the long-term, due to the nature
of the securities in which it invests.
Highlights
Performance through April 30, 2008 with dividends reinvested
Calendar Annualized 10 Year
YTD 1 Year 5 Years 10 Years Volatility
---------- ---------- ---------- ---------- ----------
Bancroft market price ....................... (3.72)% 2.40% 6.03% 4.91% 9.60%
Bancroft net asset value .................... (2.40) 1.00 7.08 4.82 7.60
Merrill Lynch All Convertibles Index ........ (0.71) (1.08) 8.76 6.07 12.34
S&P 500 Index ............................... (5.03) (4.68) 10.60 3.89 14.55
Lehman Aggregate Bond Total Return Index .... 1.95 6.87 4.37 5.96 3.88
The above data is from Bloomberg L.P. pricing service, with the exception of the
Lehman Aggregate Bond Total Return Index which is from Lipper, Inc. Closed-End
Fund Performance Analysis, dated April 30, 2008.
Bancroft's performance in the table above has not been adjusted for the fiscal
2004 rights offering, or the tender offer which expired earlier this year; net
asset value dilution was 2.38% and 0.85%, respectively. Volatility is a
measure of risk based on the standard deviation of the return. The greater the
volatility, the greater the chance of a profit or risk of a loss. Performance
data represent past results and do not reflect future performance.
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QUARTERLY HISTORY OF NAV AND MARKET PRICE
Net Asset Values Market Prices (AMEX, symbol BCV)
Qtr. Ended High Low Close High Low Close
------------ ------ ------ ------- ------ ------ -------
7/31/07 $24.19 $23.24 $23.25 $21.80 $20.65 $20.95
10/31/07 24.35 22.47 24.35 21.80 18.88 21.35
1/31/08 24.17 19.95 20.53 21.52 18.12 18.85
4/30/08 20.72 19.41 20.69 18.98 17.64 18.48
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DIVIDEND DISTRIBUTIONS (12 MONTHS)
Record Payment Capital
Date Date Income Gains Total
---------- ---------- ---------- ---------- ----------
6/14/07 6/28/07 $0.210 $ -- $0.210
9/13/07 9/27/07 0.210 -- 0.210
11/29/07 12/26/07 0.166 2.009 2.175
3/14/08 3/28/08 0.210 -- 0.210
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$0.796 $2.009 $2.805
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To Our Shareholders
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May 9, 2008
The current calendar year has seen the convertible securities market, as
measured by the Merrill Lynch All Convertibles Index, outperform the major
equity market indices as well as U.S. corporate bonds, while underperforming
high yield U.S. corporate bonds. Within the convertible universe, Merrill Lynch
reports that speculative grade convertibles have outperformed investment grade
convertibles, which may be because small and midcap stocks have outperformed
large capitalization stocks.
As some alternative forms of financing have been substantially reduced by the
de-leveraging of investment banks, many issuers are turning to convertible
securities as the most viable source for raising capital. This development has
become especially true of finance companies and banks. The first five months of
2008 has seen a net increase in U.S. convertible securities outstanding of over
$20 billion, raising convertible market value to $333.5 billion from $313.1
billion, as measured by Merrill Lynch. Average yields rose as many new issues
came to market with over 7% yields. Average conversion premiums have actually
fallen slightly to approximately 42% and parity delta (a measure of the
sensitivity of the price of a convertible security to movements in the price of
the underlying common stock) is around 65%, which is historically within the
normal range of the market. These numbers, measured by Merrill Lynch, appear to
us to be indicative of a healthy convertible market. In this changing financial
environment, we believe that reasonable investment opportunities are available
in convertible issue form from many different companies and industries.
Performance in the Fund's second fiscal quarter was enhanced by its exposure to
the Minerals and Mining and Energy industries. Among the better performing
issues in the portfolio were McMoRan Exploration Co. (Energy), Oil States
International, Inc. (Energy) and Freeport-McMoRan Copper & Gold Inc. (Minerals
and Mining). Performance was held back by exposure to the Computer Software and
Telecommunications industries.
Bancroft's market return, with dividends reinvested, outperformed the Merrill
Lynch All Convertibles Index (the "Index") over the one-year period ended April
30, 2008, while underperforming over the five- and ten-year periods. The Fund's
NAV, also with dividends reinvested, after adjustment for fund expenses (the
Index includes no expenses), and for the Fund's fiscal 2004 rights offer and
the February 2008 tender offer, outperformed the Index over the one- and five-
year periods. Although the Fund's performance over the ten-year period was
comparable to that of the Index, over that time period the Fund's volatility,
as measured by the standard deviation of both market performance and NAV
performance, was substantially lower than that of the Index for that time
period. Many market professionals consider the volatility of past returns to be
a useful approximation of past levels of financial risk. A higher volatility
level is considered to equate to a higher measure of risk, and thus the Fund's
results were achieved with lower levels of risk than that implied by the Index.
This measure of historic results may not reflect future performance but we
believe that it is informative. The Fund has sought to provide total returns to
shareholders that compare favorably to those of the equity markets with less
volatility.
There are many closed-end funds that make use of leverage through the issuance
of Auction Rate Preferred Shares (ARPS). These shares are designed to have
their dividend rate set through a periodic auction, usually every 7 to 35 days.
When a successful auction occurs, holders who wish to liquidate their holdings
may do so. If the auction does not attract sufficient bids to clear
continued on the following page
Page 1
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To Our Shareholders (continued)
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the market, the remarketing agent (usually a bank) generally steps in to fill
the gap. This system functioned for twenty years with only an occasional
auction failure. During the first calendar quarter of 2008 many agents refused
to step in and so many auctions failed. Although such auction failures did not
mean that the ARPS were in danger of default, holders who wished to liquidate
their positions could not do so. The issuers have had to pay a penalty rate
until the auctions were successful or the ARPS were redeemed. At this time, 25%
of existing ARPS issued by closed-end funds have been called, with more
expected to follow. Bancroft has never issued any preferred shares and so has
not been subjected to the uncertainties created in the market by these recent
events.
The results of the 2008 annual meeting of shareholders are shown in the
Miscellaneous Notes section of this report. We thank you for your support.
During the past quarter the Fund conducted a successful tender offer which
concluded on February 29th with the purchase of 14.5% of the outstanding shares
of the Fund. At its May meeting, the Board of Trustees declared a dividend of
$0.21 per share. The dividend consists of undistributed net investment income
and will be payable on June 26, 2008 to shareholders of record on June 12,
2008.
/s/ Thomas H. Dinsmore
Thomas H. Dinsmore
Chairman of the Board
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Major Portfolio Changes by underlying common stock
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Six months ended April 30, 2008
ADDITIONS REDUCTIONS
ADC Telecommunications, Inc. AAR Corp.
Avery Dennison Corp. Archer Daniels Midland Company
Corning, Inc. Cameron International Corp.
The Great Atlantic & Pacific Tea Company, Inc. Corning, Inc.
Kinetic Concepts, Inc. Gannett Co., Inc.
McMoRan Exploration Co. Nabors Industries Ltd.
Mylan Inc. Newmont Mining Corp.
Nabors Industries Ltd. Sepracor Inc.
St. Jude Medical, Inc. St. Jude Medical, Inc.
The Walt Disney Company U.S. Bancorp
Washington Mutual, Inc. The Walt Disney Company
Washington Mutual, Inc.
Page 2
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Largest Investment Holdings by underlying common stock
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Value % Total
(Note 1) Net Assets
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Prudential Financial, Inc. ................................................. $ 3,875,900 3.6%
Prudential provides financial services worldwide. The company offers a
variety of products and services including life insurance, mutual funds,
annuities, asset management and real estate brokerage.
Chesapeake Energy Corp. .................................................... 3,579,250 3.3
Cheasapeake produces oil and natural gas. The company's operations are
focused on developmental drilling and producing property acquisitions in
onshore natural gas producing areas of the United States and Canada.
Freeport-McMoRan Copper & Gold, Inc. ....................................... 3,258,800 3.0
Freeport-McMoRan is involved in mineral exploration and development,
mining, and milling of copper, gold and silver. The company is also
involved in smelting and refining copper concentrates.
Companhia Vale do Rio Doce ................................................. 2,915,625 2.7
Companhia Vale do Rio Doce produces and sells iron ore, pellets,
manganese, alloys, gold, bauxite and alumina. The company is based
in Brazil, where it owns and operates railroads and maritime terminals.
New York Community Bancorp, Inc. ........................................... 2,884,976 2.7
New York Community Bancorp is a multi-bank holding company that offers
a full range of traditional and non-traditional products and services.
LSB Industries, Inc. ....................................................... 2,745,000 2.6
LSB manufactures and sells chemical products for the mining,
agricultural and industrial markets. The company also manufactures and
sells commercial and residential climate control products.
The Walt Disney Company .................................................... 2,631,338 2.4
Disney, an entertainment company, has operations that include media
networks, studio entertainment, theme parks and resorts, consumer
products, and Internet and direct marketing.
St. Jude Medical, Inc. ..................................................... 2,557,331 2.4
St. Jude Medical develops, manufactures and distributes medical devices
for the worldwide cardiovascular market. The company serves patients
and health care customers with products and services including heart
valves, cardiac rhythm management systems and cardiovascular devices.
LSI Corp. .................................................................. 2,537,500 2.4
LSI designs, develops, manufactures and markets integrated circuits and ------------ ----------
storage systems. The company offers products and services for a variety
of electronic systems applications that are marketed to original
equipment manufacturers in the telecommunications, computers and storage
industries.
Total ...................................................................... $ 26,985,720 25.1%
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Page 3
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Major Industry Exposure
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Energy 15.4%
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Pharmaceuticals 10.8%
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Insurance 8.6%
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Semiconductors 6.8%
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-----------------------------------
Telecommunications 6.5%
-----------------------------------
-------------------------------
Computer Hardware 6.0%
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Minerals and Mining 5.8%
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Health Care 5.4%
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Consumer Goods 5.1%
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Banking/Savings & Loan 4.7%
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DIVERSIFICATION OF ASSETS-------------------------------------------------------
% Total Net Assets
-----------------------------------
Value Six Months Ended Year Ended
(Note 1) April 30, 2008 October 31, 2007
------------ ---------------- ----------------
Aerospace and Defense ................. $ 3,338,750 3.1% 3.8%
Agriculture ........................... -- -- 1.4
Banking/Savings and Loan .............. 5,001,671 4.7 6.1
Chemicals ............................. 1,720,500 1.6 2.8
Computer Hardware ..................... 6,451,550 6.0 5.3
Computer Software ..................... 3,285,200 3.1 3.0
Consumer Goods ........................ 5,504,638 5.1 3.7
Energy ................................ 16,571,552 15.4 14.3
Financial Services .................... 1,630,000 1.5 2.3
Foods ................................. 3,227,000 3.0 1.7
Health Care ........................... 5,790,206 5.4 4.2
Insurance ............................. 9,475,650 8.6 7.6
Media and Entertainment ............... 3,636,338 3.4 3.6
Minerals and Mining ................... 6,174,425 5.8 5.8
Multi-Industry ........................ 3,159,375 3.0 2.9
Pharmaceuticals ....................... 11,632,495 10.8 10.2
Real Estate ........................... 996,250 0.9 0.8
Retail ................................ 1,200,000 1.1 1.9
Semiconductors ........................ 7,322,500 6.8 6.5
Telecommunications .................... 6,949,400 6.5 4.6
Transportation ........................ 1,610,000 1.5 1.4
Travel and Leisure .................... 780,000 0.7 0.8
Short-Term Securities ................. -- -- 3.7
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TOTAL INVESTMENTS ................... 105,457,500 98.2 98.4
Other Assets, Net of Liabilities ...... 1,932,952 1.8 1.6
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TOTAL NET ASSETS .................... $107,390,452 100.0% 100.0%
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Page 4
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Portfolio of Investments April 30, 2008 (unaudited)
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Principal Value
Amount (Note 1)
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CONVERTIBLE BONDS AND NOTES -- 58.0%
AEROSPACE AND DEFENSE -- 2.8%
$ 1,000,000 Alliant Techsystems Inc. 2.75%, due 2011 cv. sr. sub. notes (B1) ............... $ 1,292,500
1,500,000 DRS Technologies, Inc. 2%, due 2026 cv. sr. notes (B1)
(Acquired 01/30/06 - 05/16/07; Cost $1,658,682) (1,2) .......................... 1,766,250
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3,058,750
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COMPUTER HARDWARE -- 6.0%
1,000,000 C&D Technologies, Inc. 5.25%, due 2025 cv. sr. notes (NR) ...................... 980,000
2,000,000 Credit Suisse, New York Branch 12.90%, due 2008 equity-linked notes (NR)
(exchangeable for Corning Inc. common stock) ................................... 2,122,800
1,000,000 EMC Corp. 1.75%, due 2011 cv. sr. notes (BBB+) ................................. 1,193,750
1,000,000 EMC Corp. 1.75%, due 2013 cv. sr. notes (BBB+) ................................. 1,202,500
1,000,000 Richardson Electronics, Ltd. 8%, due 2011 cv. sr. sub. notes (NR) .............. 952,500
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6,451,550
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COMPUTER SOFTWARE -- 3.1%
1,000,000 Blackboard Inc. 3.25%, due 2027 cv. sr. notes (B-) ............................. 956,250
1,000,000 GSI Commerce, Inc. 2.5%, due 2027 cv. sr. notes (NR) ........................... 785,000
1,500,000 Lehman Brothers Holdings Inc. 1%, due 2009 medium-term notes (A1)
(performance linked to Microsoft Corp. common stock) (1) ....................... 1,543,950
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3,285,200
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CONSUMER GOODS -- 2.3%
1,000,000 Chattem, Inc. 1.625%, due 2014 cv. sr. notes (NR) .............................. 1,125,000
750,000 Church & Dwight Co., Inc. 5.25%, due 2033 cv. sr. deb. (Ba1) ................... 1,385,625
------------
2,510,625
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ENERGY -- 4.6%
750,000 Canadian Solar Inc. 6%, due 2017 cv. sr. notes (NR)
(Acquired 12/04/07; Cost $750,000) (2) ......................................... 1,035,000
1,500,000 Covanta Holding Corp. 1%, due 2027 sr. cv. deb. (B1) (1) ....................... 1,620,000
1,325,000 Oil States International, Inc. 2.375%, due 2025 contingent cv. sr. notes (NR) .. 2,272,375
------------
4,927,375
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FINANCIAL SERVICES -- 1.5%
2,000,000 Euronet Worldwide, Inc. 3.50%, due 2025 cv. deb. (B+) (1) ...................... 1,630,000
------------
FOODS -- 1.9%
500,000 The Great Atlantic & Pacific Tea Company, Inc. 5.125%,
due 2011 cv. sr. notes (Caa1) .................................................. 504,375
1,500,000 The Great Atlantic & Pacific Tea Company, Inc. 6.75%,
due 2012 cv. sr. notes (Caa1) .................................................. 1,498,125
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2,002,500
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HEALTH CARE -- 3.9%
1,500,000 Kinetic Concepts, Inc. 3.25%, due 2015 cv. sr. notes
(Acquired 04/16/08; Cost $1,500,000) (2) ....................................... 1,515,000
900,000 Omnicare, Inc. 3.25%, due 2035 cv. sr. deb. (B2) (1) ........................... 626,625
1,000,000 SonoSite Inc. 3.75%, due 2014 cv. sr. notes (NR) ............................... 1,091,250
1,000,000 St. Jude Medical, Inc. 1.22%, due 2008 cv. sr. deb. (BBB+) ..................... 1,005,000
------------
4,237,875
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Page 5
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Portfolio of Investments April 30, 2008 (continued)
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Principal Value
Amount (Note 1)
----------- ------------
CONVERTIBLE BONDS AND NOTES -- CONTINUED
INSURANCE -- 3.6%
$ 3,000,000 Prudential Financial, Inc. floating rate, due 2036 cv. sr. notes (A3) .......... $ 2,925,900
1,000,000 Prudential Financial, Inc. floating rate, due 2037 cv. sr. notes (A3)
(Acquired 12/07/07; Cost $988,750) (2) ......................................... 950,000
------------
3,875,900
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MEDIA AND ENTERTAINMENT -- 0.9%
1,000,000 Virgin Media Inc. 6.5%, due 2016 cv. sr. notes (NR) ............................ 1,005,000
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MULTI-INDUSTRY -- 3.0%
750,000 Diversa Corp. 5.5%, due 2027 cv. sr. notes (NR)
(exchangeable for Verenium Corp. common stock) ................................. 414,375
3,000,000 LSB Industries, Inc. 5.5%, due 2012 cv. sr. sub. deb. (NR)
(Acquired 06/28/07; Cost $3,000,000) (2) ....................................... 2,745,000
------------
3,159,375
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PHARMACEUTICALS -- 8.4%
2,000,000 Alza Corp. 0%, due 2020 cv. sub. deb. (Aa1)
(exchangeable for Johnson & Johnson common stock) .............................. 1,875,000
2,000,000 Bristol-Myers Squibb Co. floating rate, due 2023 cv. sr. deb. (A2) ............. 1,992,500
1,000,000 Mylan Inc. 1.25%, due 2012 sr. cv. notes (B-) .................................. 865,000
1,500,000 Teva Pharmaceutical Finance Co. B.V. 1.75%, due 2026 cv. sr. deb. (Baa2)
(exchangeable for Teva Pharmaceutical Industries Ltd. ADR) ..................... 1,713,750
2,500,000 Wyeth floating rate, due 2024 cv. sr. deb. (A3) ................................ 2,545,450
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8,991,700
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REAL ESTATE -- 0.9%
1,000,000 ProLogis 2.25%, due 2037 cv. sr. notes (BBB+)
(Acquired 03/20/07 - 04/16/07; Cost $982,038) (2) .............................. 996,250
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SEMICONDUCTORS -- 6.8%
2,500,000 Agere Systems Inc. 6.5%, due 2009 cv. sub. notes (BB)
(exchangeable for LSI Corp.) ................................................... 2,537,500
1,000,000 Cypress Semiconductor Corp. 1%, due 2009 cv. sr. notes (NR) .................... 1,293,750
1,500,000 Fairchild Semiconductor Corp. 5%, due 2008 cv. sr. sub. notes (B)
(exchangeable into Fairchild Semiconductor International, Inc. common stock) ... 1,496,250
2,000,000 Intel Corp. 2.95%, due 2035 jr. sub. cv. deb. (A-) (1) ......................... 1,995,000
------------
7,322,500
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TELECOMMUNICATIONS -- 6.0%
500,000 ADC Telecommunications, Inc. 3.50%, due 2015 cv. sub. notes (NR) ............... 494,375
1,000,000 ADC Telecommunications, Inc. 3.50%, due 2017 cv. sub. notes (NR) ............... 986,250
1,000,000 Anixter International Inc. 1%, due 2013 sr. cv. notes (BB-) .................... 1,087,500
2,000,000 Equinix, Inc. 2.5%, due 2012 cv. sub. notes (CCC+) ............................. 2,110,000
1,000,000 General Cable Corp. 1%, due 2012 sr. cv. notes (B1) ............................ 1,046,250
1,000,000 SAVVIS, Inc. 3%, due 2012 cv. sr. notes (NR) ................................... 752,500
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6,476,875
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TRANSPORTATION -- 1.5%
1,750,000 ExpressJet Holdings, Inc. 4.25%, due 2023 cv. notes (NR) ....................... 1,610,000
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PAGE 6
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Portfolio of Investments April 30, 2008 (continued)
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Principal Value
Amount (Note 1)
----------- ------------
CONVERTIBLE BONDS AND NOTES -- CONTINUED
TRAVEL AND LEISURE -- 0.7%
$ 1,000,000 Morgans Hotel Group 2.375%, due 2014 sr. sub. cv notes (NR)
(Acquired 10/11/07 - 10/12/07; Cost $1,026,250) (2) ............................ $ 780,000
------------
TOTAL CONVERTIBLE BONDS AND NOTES ............................................. 62,321,475
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CORPORATE BONDS AND NOTES -- 1.1%
RETAIL -- 1.1%
1,500,000 Amerivon Holdings LLC 4%, due 2010 units (NR)
(Acquired 06/01/07; Cost $1,500,000) (2,3) ..................................... 1,200,000
------------
CONVERTIBLE PREFERRED STOCKS -- 10.3%
Shares
-----------
AEROSPACE AND DEFENSE -- 0.3%
40,000 Applied Energetics, Inc. 6.5% series A redeemable cv. pfd. (NR)
(Acquired 10/27/05; Cost $1,000,000) (2) ....................................... 280,000
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BANKING/SAVINGS AND LOAN -- 4.7%
59,179 New York Community Bancorp, Inc. 6% BONUSES units (Baa1) ....................... 2,884,976
18,000 Sovereign Capital Trust IV 4.375% PIERS (Baa1)
(exchangeable for Sovereign Bancorp, Inc. common stock) (1) .................... 513,000
500 Wachovia Corp. 7.5% series L perpetual cv. pfd (NR) ............................ 571,563
1,200 Washington Mutual, Inc. 7.75% series R non-cumulative
perpetual cv. pfd. (Ba2) ....................................................... 1,032,132
------------
5,001,671
------------
CHEMICALS -- 1.6%
30,000 Celanese Corp. 4.25% cv. perpetual pfd. (NR) ................................... 1,720,500
ENERGY -- 3.3%
27,800 Chesapeake Energy Corp. 4.5% cum. cv. pfd. (NR) ................................ 3,579,250
TELECOMMUNICATIONS -- 0.4%
100 Medis Technologies Ltd. 7.25% series A cum. cv. perpetual pfd. (NR) ............ 472,525
------------
TOTAL CONVERTIBLE PREFERRED STOCKS ............................................. 11,053,946
------------
MANDATORY CONVERTIBLE SECURITIES -- 28.8% (4)
CONSUMER GOODS -- 2.8%
30,000 Avery Dennison Corp. 7.875%, due 11/15/10 mandatory cv. pfd. (BBB-) ............ 1,466,700
1,750 The Stanley Works floating rate, due 05/17/12 equity units (A2) 1,527,313
------------
2,994,013
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PAGE 7
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Portfolio of Investments April 30, 2008 (continued)
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Value
Shares (Note 1)
----------- ------------
MANDATORY CONVERTIBLE SECURITIES -- CONTINUED
ENERGY -- 7.5%
30,000 Bristow Group Inc. 5.5%, due 09/15/09 mandatory cv. pfd. (B) ................... $ 1,972,800
10,000 McMoRan Exploration Co. 6.75%, due 11/15/10 mandatory cv. pfd. (NR) ............ 1,832,900
2,000 Merrill Lynch & Co., Inc. 5.4%, due 09/27/10 PRIDES (A+)
(linked to the performance of ConocoPhillips common stock) ..................... 1,849,780
41,135 Merrill Lynch & Co., Inc. 12%, due 06/27/08 capped appreciation notes (NR)
(linked to the performance of Tesoro Corp. common stock) ....................... 1,053,467
39,410 NATIXIS Financial Products Inc. 7.05%, due 12/05/08
mandatory trigger exchangeable notes (NR)
(exchangeable for Nabors Industries Ltd. common stock)
(Acquired 02/29/08; Cost $1,250,085) (2) ....................................... 1,355,980
------------
8,064,927
------------
FOODS -- 1.1%
50,000 Lehman Brothers Holdings Inc. 6%, due 10/12/10 PIES (A1) $
(exchangeable for General Mills, Inc. common stock) ............................ 1,224,500
------------
HEALTH CARE -- 1.4%
35,768 NATIXIS Financial Products Inc. 11%, due 01/21/09
mandatory trigger exchangeable notes (NR)
(exchangeable for St. Jude Medical, Inc. common stock)
(Acquired 04/16/08; Cost $1,559,485) (2) ....................................... 1,552,331
------------
INSURANCE -- 5.2%
4,000 Alleghany Corp. 5.75%, due 06/15/09 mandatory cv. pfd. (BB+) ................... 1,290,925
75,000 Citigroup Funding Inc. variable rate, due 09/27/08 exchangeable notes (Aa3)
(exchangeable for Genworth Financial, Inc. common stock) ....................... 1,797,750
60,000 MetLife, Inc. 6.375%, due 08/15/08 common equity units (BBB+) .................. 1,772,400
52,500 XL Capital Ltd. 7%, due 02/15/09 equity security units (Baa1) .................. 738,675
------------
5,599,750
------------
MEDIA AND ENTERTAINMENT -- 2.5%
82,500 Deutsche Bank AG 4.9%, due 04/28/09 mandatory exchangeable notes (Aa1)
(exchangeable for The Walt Disney Company common stock) ........................ 2,631,338
------------
MINERALS AND MINING -- 5.8%
20,000 Freeport-McMoRan Copper & Gold Inc. 6.75%,
due 05/01/10 mandatory cv. pfd. (B+) ........................................... 3,258,800
30,000 Vale Capital Ltd. 5.5%, due 06/15/10 mandatory convertible notes (NR)
(exchangeable for ADSs representing Companhia
Vale do Rio Doce common stock) ................................................. 2,197,500
10,000 Vale Capital Ltd. 5.5%, due 06/15/10 mandatory convertible notes (NR)
(exchangeable for ADSs representing Companhia
Vale do Rio Doce Preference A Shares) 718,125
------------
6,174,425
------------
Page 8
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Portfolio of Investments April 30, 2008 (continued)
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Value
Shares (Note 1)
----------- ------------
MANDATORY CONVERTIBLE SECURITIES -- continued
Pharmaceuticals -- 2.5%
1,000 Mylan Inc. 6.5%, due 11/15/10 mandatory cv. pfd. (B-)........................... $ 925,760
9,500 Schering-Plough Corp. 6%, due 08/13/10 mandatory cv. pfd. (Baa3)................ 1,715,035
------------
2,640,795
------------
TOTAL MANDATORY CONVERTIBLE SECURITIES (4)...................................... 30,882,079
------------
Total Convertible Bonds and Notes -- 58.0%...................................... 62,321,475
Total Corporate Bonds and Notes -- 1.1%......................................... 1,200,000
Total Convertible Preferred Stocks -- 10.3%..................................... 11,053,946
Total Mandatory Convertible Securities -- 28.8%................................. 30,882,079
------------
Total Investments -- 98.2%...................................................... 105,457,500
Other assets and liabilities, net -- 1.8%....................................... 1,932,952
------------
Total Net Assets -- 100.0%...................................................... $107,390,452
============
(1) Contingent payment debt instrument which accrues contingent interest.
See Note 1(f).
(2) Security not registered under the Securities Act of 1933, as amended
(i.e., the security was purchased in a Rule 144A or a Regulation D
transaction). The security may be resold only pursuant to an exemption
from registration under the Securities Act of 1933, typically to
qualified institutional buyers. The Fund generally has no rights to
demand registration of these securities. The aggregate market value of
these unregisterd securities at April 30, 2008 was $14,175,811 which
represented 13.2% of the Fund's net assets.
(3) Investment is a restricted security, valued at fair value as determined
in good faith in accordance with procedures adopted by the Board of
Trustees. It is possible that the estimated value may differ
significantly from the amount that might ultimately be realized in the
near term, and the difference could be material. The fair value of this
security represented 1.1% of the Fund's net assets.
(4) These securities are required to be converted on the dates listed; they
generally may be converted prior to these dates at the option of the
holder.
Investment Abbreviations:
ADR American Depositary Receipts.
ADS American Depositary Shares.
BONUSES Bifurcated Option Note Unit Securities.
PIES Premium Income Exchangeable Securities.
PIERS Preferred Income Equity Redeemable Securities.
PRIDES Preferred Redeemable Increased Dividend Equity Securities.
Ratings in parentheses by Moody's Investors Service, Inc. or Standard & Poor's.
NR is used whenever a rating is unavailable.
Summary of Portfolio Ratings *
% of
Portfolio
Aa 8
A 16
Baa 15
Ba 3
B 22
Caa 4
NR 31
* Excludes equity securities and cash.
See accompanying notes to financial statements
Page 9
--------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited)
--------------------------------------------------------------------------------
April 30, 2008
--------------
ASSETS:
Investments at value (cost $105,611,013) (Note 1) ......... $ 105,457,500
Cash ...................................................... 894,888
Receivable for securities sold ............................ 226,377
Dividends and interest receivable ......................... 858,573
Other assets .............................................. 40,442
--------------
Total assets ............................................ 107,477,780
--------------
LIABILITIES:
Accrued management fee (Note 2) ........................... 74,517
Accrued expenses .......................................... 12,811
--------------
Total liabilities ....................................... 87,328
--------------
NET ASSETS ................................................... $ 107,390,452
==============
NET ASSETS CONSIST OF:
Capital shares (Note 3) ................................... $ 51,899
Additional paid-in capital ................................ 108,554,901
Undistributed net investment income........................ 465,561
Accumulated net realized loss from investment
transactions ............................................ (1,528,395)
Unrealized depreciation on investments..................... (153,514)
--------------
NET ASSETS ................................................... $ 107,390,452
==============
Net asset value per share ($107,390,452 / 5,189,875
outstanding shares)......................................... $ 20.69
==============
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS---------------------------------------------------------
FOR THE SIX MONTHS ENDED APRIL 30, 2008
INVESTMENT INCOME (NOTE 1):
Interest .................................................. $ 1,758,991
Dividends ................................................. 1,298,664
--------------
Total Income ............................................ 3,057,655
--------------
EXPENSES (NOTE 2):
Management fee ............................................ 420,339
Custodian ................................................. 7,336
Transfer agent ............................................ 21,996
Audit fees ................................................ 17,925
Legal fees ................................................ 123,598
Trustees' fees ............................................ 62,750
Reports to shareholders ................................... 52,051
Administrative services fees .............................. 29,611
Other ..................................................... 51,117
--------------
Total Expenses .......................................... 786,723
--------------
NET INVESTMENT INCOME ........................................ 2,270,932
--------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized loss from investment transactions ............ (2,121,172)
Net change in unrealized appreciation of investments ...... (7,983,843)
--------------
Net loss on investments ................................. (10,105,015)
--------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ......... $ (7,834,083)
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
PAGE 10
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS----------------------------------------------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2008 (a) OCTOBER 31, 2007
------------------ ----------------
CHANGE IN NET ASSETS FROM OPERATIONS:
Net investment income ..................................... $ 2,270,932 $ 4,596,017
Net realized gain (loss) from investment transactions ..... (2,121,172) 11,500,969
Net change in unrealized appreciation of investments ...... (7,983,843) 2,263,067
------------- -------------
Net change in net assets resulting from operations ...... (7,834,083) 18,360,053
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ..................................... (2,041,556) (5,102,460)
Net realized gain on investments .......................... (11,517,629) (2,621,312)
------------- -------------
Total distributions ..................................... (13,559,185) (7,723,772)
CAPITAL SHARE TRANSACTIONS (NOTE 3)
Reinvestment of distributions ............................. 6,352,696 2,097,228
Cost of shares tendered ................................... (17,149,192) --
------------- -------------
Net increase (decrease) from capital transactions ....... (10,796,496) 2,097,228
------------- -------------
CHANGE IN NET ASSETS ......................................... (32,189,764) 12,733,509
Net assets at beginning of period ............................ 139,580,216 126,846,707
------------- -------------
NET ASSETS AT END OF PERIOD .................................. $ 107,390,452 $ 139,580,216
============= =============
Undistributed net investment income at end of period .... $ 465,561 $ 236,184
============= =============
------------------
(a) Unaudited.
--------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
--------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
(a) Organization - Bancroft Fund Ltd. (the "Fund"), is registered under the
Investment Company Act of 1940 as a diversified, closed-end management
investment company.
(b) Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, and the reported amounts
of revenue and expenses during the reporting period. Actual results could
differ from those estimates.
(c) Indemnification - Under the Fund's organizational documents, each trustee,
officer or other agent of the Fund (including the Fund's investment adviser) is
indemnified against certain liabilities that may arise out of performance of
their duties to the Fund. Additionally, in the normal course of business, the
Fund enters into contracts that contain a variety of indemnification clauses.
The Fund's maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Fund that have not yet
occurred. The risk of material loss as a result of such indemnification is
considered remote.
(d) Federal Income Taxes - The Fund's policy is to distribute substantially all
of its taxable income within the prescribed time and to otherwise comply with
the provisions of the Internal Revenue Code applicable to regulated investment
companies. Therefore, no provision for federal income or excise taxes is
believed necessary.
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Fund's tax return to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. The interpretation
became effective for tax years beginning after December 15, 2006. The adoption
of FIN 48 has had no impact on the Fund's financial statements.
Page 11
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
(e) Security Valuation - Investments in securities traded on a national
securities exchange are valued at market using the last reported sales price,
supplied by an independent pricing service, as of the close of regular trading.
Listed securities, for which no sales were reported, are valued at the mean
between closing reported bid and asked prices as of the close of regular
trading. Unlisted securities traded in the over-the-counter market are valued
using an evaluated quote provided by the independent pricing service, or, if an
evaluated quote is unavailable, such securities are valued using prices
received from dealers, provided that if the dealer supplies both bid and asked
prices, the price to be used is the mean of the bid and asked prices. The
independent pricing service derives an evaluated quote by obtaining dealer
quotes, analyzing the listed markets, reviewing trade execution data and
employing sensitivity analysis. Evaluated quotes may also reflect appropriate
factors such as individual characteristics of the issue, communications with
broker-dealers, and other market data. Securities for which quotations are not
readily available, restricted securities and other assets are valued at fair
value as determined in good faith pursuant to procedures approved by the Board
of Trustees. Short-term debt securities with original maturities of 60 days or
less are valued at amortized cost.
(f) Security Transactions and Related Investment Income - Security transactions
are accounted for on the trade date (date the order to buy or sell is executed)
with gain or loss on the sale of securities being determined based upon
identified cost. Dividend income is recorded on the ex-dividend date and
interest income is recorded on the accrual basis, including accretion of
discounts and amortization of non-equity premium. For certain securities, known
as "contingent payment debt instruments," Federal tax regulations require the
Fund to record non-cash, "contingent" interest income in addition to interest
income actually received. Contingent interest income amounted to 6 cents per
share for the six months ended April 30, 2008. In addition, Federal tax
regulations require the Fund to reclassify realized gains on contingent payment
debt instruments to interest income. At April 30, 2008 there were unrealized
losses of approximately 14 cents per share on contingent payment debt
instruments.
(g) Change in Method of Accounting - Effective November 1, 2004, the Fund began
amortizing discounts and premiums on all debt securities. Prior to November 1,
2004, the Fund amortized discounts on original issue discount debt securities.
The new method of amortization was adopted in accordance with the provisions of
the AICPA Audit and Accounting Guide, Audits of Investment Companies and the
financial highlights presented herein have been restated to reflect the new
method retroactive to November 1, 2001. The effect of this accounting change is
included in the financial highlights for the years ended October 30, 2003 and
2004. The cumulative effect of this accounting change had no impact on the
total net assets of the Fund or on distributions for tax purposes, but resulted
in a $103,986 increase in the cost of securities held and a corresponding
$103,986 reduction in the net unrealized gains based on the securities held on
November 1, 2001. These changes had no effect on previously reported total net
assets or total returns.
(h) Distributions to Shareholders - Distributions to shareholders from net
investment income are recorded by the Fund on the ex-dividend date.
Distributions from capital gains, if any, are recorded on the ex-dividend date
and paid annually. The amount and character of income and capital gains to be
distributed are determined in accordance with income tax regulations, which may
differ from generally accepted accounting principles. The tax character of
distributions paid during the fiscal years ended October 31, 2007 and 2006
were as follows:
2007 2006
---------- ----------
Ordinary Income $5,102,460 $4,395,566
Net Realized Gain on Investments 2,621,312 --
---------- ----------
$7,723,772 $4,395,566
========== ==========
Page 12
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
At April 30, 2008 unrealized appreciation (depreciation) of investment
securities on a tax basis were as follows:
Unrealized appreciation $ 8,861,127
Unrealized depreciation (9,148,005)
------------
Net unrealized depreciation (286,878)
Cost for federal income tax purposes $105,744,373
(i) Accounting Pronouncements - In September 2006, the Financial Accounting
Standards Board (FASB) issued Statement on Financial Accounting Standards
(SFAS) No. 157, "Fair Value Measurements." This standard establishes a single
authoritative definition of fair value, sets out a framework for measuring fair
value, and requires additional disclosures about fair value measurements.
SFAS No. 157 applies to fair value measurements already required or permitted by
existing standards. SFAS No. 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007 and interim periods within
those fiscal years. The changes to current generally accepted accounting
principles from the application of this Statement relate to the definition of
fair value, the methods used to measure fair value, and the expanded disclosures
about fair value measurements. As of April 30, 2008, the Fund does not believe
the adoption of SFAS No. 157 will impact the financial statement amounts,
however, additional disclosures may be required about the inputs used to develop
the measurements and the effect of certain of the measurements on changes in net
assets for the period.
NOTE 2 - MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund has entered into an investment advisory agreement with Davis-Dinsmore
Management Company ("Davis-Dinsmore"). Pursuant to the investment advisory
agreement, Davis-Dinsmore provides the Fund with investment advice, office space
and facilities. Under the terms of the investment advisory agreement, the Fund
pays Davis-Dinsmore on the last day of each month an advisory fee for such month
computed at an annual rate of 0.75% of the first $100,000,000 and 0.50% of the
excess over $100,000,000 of the Fund's net asset value in such month.
The Fund, pursuant to an administrative services agreement with Davis-Dinsmore,
has agreed to pay Davis-Dinsmore for certain accounting and other administrative
services provided to the Fund. Under the administrative services agreement, the
Fund pays Davis-Dinsmore on the last day of each month a fee for such month
computed at an annual rate of 0.05% of the Fund's net asset value in such month.
Certain officers and trustees of the Fund are officers and directors of Davis-
Dinsmore.
NOTE 3 - PORTFOLIO ACTIVITY
At April 30, 2008 there were 5,189,875 shares of beneficial interest
outstanding, with a par value of $0.01 per share. During the six months ended
April 30, 2008, 337,013 were issued in connection with reinvestment of dividends
from net investment income, resulting in an increase in paid-in capital of
$6,352,696.
In connection with the Fund's tender offer which expired on February 29, 2008,
the Fund purchased 880,154 shares of beneficial interest at a total cost of
$17,149,192, including expenses of $109,410.
Purchases and sales of investments, exclusive of corporate short-term notes,
aggregated $26,977,517 and $44,085,689, respectively, for the six months ended
April 30, 2008.
A distribution of $0.21 per share, derived from net investment income was
declared on May 13, 2008, payable June 26, 2008 to shareholders of record at the
close of business June 12, 2008.
Page 13
---------------------------------------------------------------------------------------------------
Financial Highlights Selected data for a share of beneficial interest outstanding:
---------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended October 31,
April 30, -----------------------------------------------------------------
2008(a) 2007 2006 2005 2004 2003
----------------------------------------------------------------------------
Operating Performance:
Net asset value, beginning of period... $ 24.35 $ 22.55 $ 21.05 $ 20.40 $ 20.84 $ 18.55
----------------------------------------------------------------------------
Net investment income.................. 0.44 0.80 0.80 0.64 0.70(b) 0.71(b)
Adjustment for change in
amortization policy.................. -- --- -- -- (0.02) (0.02)
----------------------------------------------------------------------------
Net investment income, as adjusted 0.44 0.80 0.80 0.64 0.68 0.69
----------------------------------------------------------------------------
Net realized and unrealized gain (loss) (1.88) 2.37 1.48 0.71 0.08(b) 2.31(b)
Adjustment for change in
amortization policy.................... --- -- -- -- 0.02 0.02
----------------------------------------------------------------------------
Net realized and unrealized
gain (loss), as adjusted............. (1.88) 2.37 1.48 0.71 0.10 2.33
----------------------------------------------------------------------------
Total from investment operations....... (1.44) 3.17 2.28 1.35 0.78 3.02
----------------------------------------------------------------------------
Less Distributions:
Dividends from net investment income... (0.38) (0.90) (0.78) (0.70) (0.72) (0.73)
Distributions from realized gains...... (2.01) (0.47) --- -- --- --
----------------------------------------------------------------------------
Total distributions.................... (2.39) (1.37) (0.78) (0.70) (0.72) (0.73)
----------------------------------------------------------------------------
Capital Share Transactions:
Anti-dilutive effect of tender offer.. 0.17 -- --- --- --- ---
Effect of rights offer................ --- -- --- --- (0.50) ---
----------------------------------------------------------------------------
Total capital share transactions...... 0.17 -- --- --- (0.50) ---
----------------------------------------------------------------------------
Net asset value, end of period........ $ 20.69 $ 24.35 $ 22.55 $ 21.05 $ 20.40 $ 20.84
============================================================================
Market value, end of period........... $ 18.48 $ 21.35 $ 19.30 $ 17.77 $ 18.23 $ 19.70
Total Net Asset Value Return (%) (c).. (4.0) 14.5 11.1 6.7 1.3 16.7
Total Investment Return (%)(d)........ (3.4) 18.3 13.3 1.3 (3.8) 16.7
Ratios/Supplemental Data:
Net assets, end of period
(in thousands)...................... $107,390 $139,580 $126,847 $117,622 $113,373 $ 98,486
Ratio of expenses to
average net assets (%).............. 1.3(e) 1.1 1.1 1.2 1.1 1.2
Ratio of net investment income to
average net assets (%)................ 3.6(e) 3.5 3.7 3.1 3.3(f) 3.6(f)
Portfolio turnover rate (%)........... 24 80 58 86 66 87
___________________
(a) Unaudited.
(b) As previously reported. See Note 1(g).
(c) Assumes valuation of the Fund's shares, and reinvestment of dividends, at
net asset values.
(d) Assumes valuation of the Fund's shares at market price and reinvestment of
dividends at actual reinvestment price.
(e) Annualized.
(f) Ratios for 2004 and 2003 reflect ratios adjusted for change in amortization
policy. Ratios previously reported for 2004 and 2003 were 3.4% and 3.6%,
respectively.
See accompanying notes to financial statements
Page 14
--------------------------------------------------------------------------------
MISCELLANEOUS NOTES
--------------------------------------------------------------------------------
Results of the 2008 Annual Shareholders Meeting
The Annual Meeting of Shareholders of the Fund was held on February 11, 2008.
The results of the shareholder vote were:
1. All persons nominated were elected.
Terms expiring in 2011 Shares voted for Shares withheld
---------------------- ---------------- ---------------
Thomas H. Dinsmore 4,835,846 239,221
Daniel D. Harding 4,870,075 204,992
Trustees whose term of office continued after the 2008 Annual
Shareholders Meeting are listed on the inside back cover of this Semi-
Annual Report.
2. The Audit Committee's appointment of Tait, Weller & Baker LLP as
independent accountants was ratified, as 4,955,304 shares voted for,
35,275 shares voted against and 84,488 shares abstained.
--------------------------------------------------------------------------------
Notice of Privacy Policy
The Fund has adopted a privacy policy in order to protect the confidentiality of
nonpublic personal information that we have about you. We receive personal
information, such as your name, address and account balances, when transactions
occur in Fund shares registered in your name.
We may disclose this information to companies that perform services for the
Fund, such as the Fund's transfer agent or proxy solicitors. These companies may
only use this information in connection with the services they provide to the
Fund, and not for any other purpose. We will not otherwise disclose any
nonpublic personal information about our shareholders or former shareholders to
anyone else, except as required by law.
Access to nonpublic information about you is restricted to our employees and
service providers who need that information in order to provide services to you.
We maintain physical, electronic and procedural safeguards that comply with
federal standards to guard your nonpublic personal information.
--------------------------------------------------------------------------------
For More Information About Portfolio Holdings
In addition to the semi-annual and annual reports that Bancroft delivers to
shareholders and makes available through the Fund's public website, the Fund
files a complete schedule of portfolio holdings with the Securities and Exchange
Commission (SEC) for the Fund's first and third fiscal quarters on Form N-Q.
Bancroft does not deliver the schedule of portfolio holdings for the first and
third fiscal quarters to shareholders, however the schedule is posted to the
Fund's public website, www.bancroftfund.com. You may obtain the Form N-Q
filings by accessing the SEC's website at www.sec.gov. You may also review and
copy them at the SEC's Public Reference Room in Washington, DC. Information on
the operation of the SEC's Public Reference Room may be obtained by calling the
SEC at (800) SEC-0330.
--------------------------------------------------------------------------------
Proxy Voting Policies and Procedures / Proxy Voting Record
The Fund's policies and procedures with respect to the voting of proxies
relating to the Fund's portfolio securities is available without charge, upon
request, by calling (973) 631-1177, or at our website at www.bancroftfund.com.
This information is also available on the SEC's website at www.sec.gov. In
addition, information on how the Fund voted such proxies relating to portfolio
securities during the most recent twelve-month period ended June 30, is
available without charge at the above sources.
Page 15
--------------------------------------------------------------------------------
MISCELLANEOUS NOTES (continued)
--------------------------------------------------------------------------------
Tender Offer
On January 31, 2008 the Fund commenced a tender offer for up to 758,754 of its
shares of beneficial interest, representing approximately 12.5% of its issued
and outstanding shares of beneficial interest, par value $.01 per share, at a
price per share equal to 95% of the net asset value per share as of the close
of regular trading on the American Stock Exchange on February 29, 2008. The
Fund conducted the Offer pursuant to an Agreement dated January 11, 2008
between the Fund and certain Fund shareholders.
The tender offer expired on February 29, 2008. The Fund accepted 880,154
properly tendered shares at a price per Fund share equal to $19.36, which was
95% of the net asset value per Fund share as of 5:00 p.m. Eastern Standard Time
on February 29, 2008.
Approximately 2,294,566 shares of beneficial interest, 38% of the Fund's issued
and outstanding shares of beneficial interest, were validly tendered. Because
more than 758,754 shares had been validly tendered, the Fund elected to take up
and pay for 121,400 additional shares for a total of 880,154 total shares to be
taken up and paid for pursuant to the Offer. Shares were accepted for payment
on a pro rata basis. Accordingly, approximately 38.36% (880,154 shares
accepted for payment divided by 2,294,566 shares validly tendered) of the
validly tendered shares of each shareholder were accepted for payment. These
accepted shares represented approximately 14.5% of the total shares of
beneficial interest outstanding prior to the commencement of the tender offer.
--------------------------------------------------------------------------------
The Fund is a member of the Closed-End Fund Association, a non-profit national
trade association (www.cefa.com). Thomas H. Dinsmore is on the Executive Board
and is president of the association. The association is solely responsible
for the content of its website.
--------------------------------------------------------------------------------
Pursuant to Section 23 of the Investment Company Act of 1940, notice is hereby
given that the Fund may in the future purchase its own shares from time to time,
at such times, and in such amounts, as may be deemed advantageous to the Fund.
Nothing herein shall be considered a commitment to purchase such shares.
Page 16
Board of Trustees Internet
GORDON F. AHALT www.bancroftfund.com
KINCHEN C. BIZZELL email: [email protected]
ELIZABETH C. BOGAN, Ph.D.
THOMAS H. DINSMORE, C.F.A. Investment Adviser
DANIEL D. HARDING Davis-Dinsmore Management Company
JANE D. O'KEEFFE 65 Madison Avenue, Suite 550
NICOLAS W. PLATT Morristown, NJ 07960-7308
(973) 631-1177
Officers
Shareholder Services and Transfer Agent
THOMAS H. DINSMORE, C.F.A. American Stock Transfer & Trust Company
Chairman of the Board 59 Maiden Lane
and Chief Executive Officer New York, NY 10038
(800) 937-5449
JANE D. O'KEEFFE www.amstock.com
President
Beneficial Share Listing
GARY I. LEVINE American Stock Exchange Symbol: BCV
Executive Vice President,
Chief Financial Officer and Legal Counsel
Secretary Ballard Spahr Andrews & Ingersoll, LLP
H. TUCKER LAKE, JR. Independent Accountants
Vice President Tait, Weller & Baker LLP
GERMAINE M. ORTIZ
Vice President
MERCEDES A. PIERRE
Vice President and Chief Compliance Officer
JAMES A. DINSMORE
Assistant Vice President
JOANN VENEZIA
Assistant Vice President and
Assistant Secretary
BANCROFT FUND LTD.
65 MADISON AVENUE, SUITE 550
MORRISTOWN, NEW JERSEY 07960
www.bancroftfund.com
[LOGO]
AMERICAN
STOCK EXCHANGE
--------------
LISTED
--------------
BCV(TM)
ITEM 2. CODE OF ETHICS.
Not applicable to this semi-annual report.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to this semi-annual report.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to this semi-annual report.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to this semi-annual report.
ITEM 6. SCHEDULE OF INVESTMENTS.
The Schedule of Investments in securities of unaffiliated issuers 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 this semi-annual report.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to this semi-annual report.
ITEM 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
During the period covered by this report, there were no purchases made by or
on behalf of Bancroft Fund Ltd. (the "Registrant") or any "affiliated
purchaser," as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of
1934 (the "Exchange Act")(17 CFR 240.10b-18(a)(3)), of shares or other units of
any class of the Registrant's equity securities that is registered by the
Registrant pursuant to Section 12 of the Exchange Act (15 U.S.C. 781).
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders
may recommend nominees to the Registrant's board of trustees since those
procedures were last disclosed in response to the requirements of
Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101), or this Item 10 of
Form N-CSR.
ITEM 11. CONTROLS AND PROCEDURES.
Conclusions of principal officers concerning controls and procedures
(a) As of June 5, 2008 an evaluation was performed under the supervision
and with the participation of the officers of the Registrant, including the
Principal Executive Officer ("PEO") and Principal Financial Officer ("PFO"), to
assess the effectiveness of the Registrant's disclosure controls and procedures,
as that term is defined in Rule 30a-3(c) under the Investment Company Act of
1940 (the "Act"), as amended. Based on that evaluation, as required by
Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or
15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)), the
Registrant's officers, including the PEO and PFO, concluded
that, as of June 5, 2008, the Registrant's disclosure controls and
procedures were reasonably designed so as to ensure: (1) that information
required to be disclosed by the Registrant on Form N-CSR is recorded, processed,
summarized and reported within the time periods specified by the rules and forms
of the Securities and Exchange Commission; and (2) that material information
relating to the Registrant is made known to the PEO and PFO as appropriate to
allow timely decisions regarding required disclosure.
(b) There have been no changes in the Registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act
(17 CFR 270.30a-3(d)) 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) The code of ethics disclosure required by Item 2 is not applicable to
this semi-annual report.
(a)(2) Certifications of the principal executive officer and the principal
financial officer pursuant to Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)),
are attached hereto.
(a)(3) There were no written solicitations to purchase securities under Rule
23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered
by the report by or on behalf of the Registrant to ten or more persons.
(b) Certifications of the principal executive officer and the principal
financial officer, as required by Rule 30a-2(b) under the Act
(17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act
(17 CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of
Title 18 of the United States Code (18 U.S.C. 1350) are attached hereto.
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.
Bancroft Fund Ltd.
By: /s/Thomas H. Dinsmore
Thomas H. Dinsmore
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
Date: July 9,2008
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: /s/Thomas H. Dinsmore
Thomas H. Dinsmore
Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
Date: July 9,2008
By: /s/Gary I. Levine
Gary I. Levine
Chief Financial Officer
(Principal Financial Officer)
Date: July 9,2008