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U.S. GLOBAL INVESTORS FUNDS
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ANNUAL REPORT
JUNE 30, 2000
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U.S. GLOBAL INVESTORS FUNDS
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ANNUAL REPORT
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JUNE 30, 2000
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TABLE OF CONTENTS
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LETTER TO SHAREHOLDERS ............................... 1
MANAGEMENT TEAMS' PERSPECTIVES ....................... 5
PORTFOLIOS OF INVESTMENTS ............................ 38
STATEMENTS OF ASSETS AND LIABILITIES ................. 80
STATEMENTS OF OPERATIONS ............................. 84
STATEMENTS OF CHANGES IN NET ASSETS .................. 88
NOTES TO FINANCIAL STATEMENTS ........................ 96
FINANCIAL HIGHLIGHTS ................................. 104
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ............. 115
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[GRAPHIC: U.S. Global Investors Logo]
P.O. Box 781234
San Antonio, Texas 78278-1234
Tel 1*800*US*FUNDS
Fax 210*308*1217
www.usfunds.com
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U.S. GLOBAL INVESTORS FUNDS
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Dear Shareholder:
Looking back over historic events of the past 12 [GRAPHIC:Photo of
months--encompassing everything from the dawning Frank E. Holmes}
of a new millennium, to the peaceful transfers
of power in Mexico and Russia, to China's thaw
in relations with the West, to unlocking the key
to the genetic code with new developments in
human genome research--we embrace the good in
our world and seek solutions to the challenges.
ECONOMIC CYCLES ARE NATURAL
We have observed and tracked all these developments, relating them to the
effects they may have as their consequences ripple through society. Our
observations seem to confirm that, while our progression as a civilization is
moving forward, there is also a natural cyclical rhythm. This accounts for the
up-and-down cycles we experience in everything from the climate to the economy.
LOOK FOR BARGAINS AHEAD
After nine years of unprecedented continuous economic growth, we seem to be in a
period of prolonged market corrections. The markets' recurring conflicting
information--one day key indexes are up slightly, the next day they're down
again--highlights the ongoing need to diversify, invest regularly and stay
invested for the long haul. Savvy investors recognize that economic cycles are
natural and will always be with us. A booming economy cannot, and should not, go
unchecked forever, and we foresee a soft economic landing for the U.S. markets
in the coming six to nine months. We also anticipate the possibility of bargains
to be had in the market and an abundance of investing opportunities for those
who understand the cyclical nature of the economy.
For 2001, investors can anticipate probable belt-tightening, accompanied by
opportunities to pick up bargains in the market as uncertainty and potential
change in overall political, economic and regulatory direction replace
election-year exuberance. Any further moves by the Federal Reserve's Federal
Open Market Committee (FOMC) to tighten its grip on the economy through interest
rate hikes would also contribute to investor hesitancy and shifts from
aggressive to more conservative equities.
For this reason, we expect market volatility to continue against a backdrop of
ongoing technological innovation and somewhat subdued economic growth. The same
forces that are shaping our future are also creating ripples of volatility in
the stock market. We seem to be in a period of faster and more volatile sector
rotation, which is confusing for investors who are saving for their long-term
retirement programs yet making poor decisions driven by an emotional reaction to
the latest market events.
DIVERSITY OF INVESTMENTS IS KEY
Diversification and asset allocation should be key considerations for investors.
We suggest investors focus on the long term and select funds that invest in high
quality companies that have the strategic advantages of size, technology,
seasoned and skilled management and global experience. With those disciplines in
mind, our All American Equity(1) and Equity
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Income Funds are positioned to capture diversification by industry while seeking
out promising stock opportunities. The All American Equity Fund looks to invest
in the best of the biggest--blue chip stocks that exhibit strong growth in
revenues and earnings. The Equity Income Fund uses a contrarian value investment
strategy to locate financially sound but undervalued income-producing companies
in out-of-favor and undervalued sectors, including petroleum refining,
commercial banking and radio/television broadcasting.
In addition, our All American Equity, Equity Income, Global Resources(2) and
Gold Shares(2) and World Gold(2) Funds are changing to accommodate the new
pace and volume of volatility, and the focus is shifting toward more
earnings-driven and cash-flow performance. In particular, the All American
Equity Fund now uses models based on earnings growth and has shifted its focus
to high technology and energy-related stocks; however, any significant change in
sector earnings would lead to a change in the fund's investments. The Global
Resources Fund, in contrast, is focused on companies with strong and growing
cash flow models.
The recent performance of several key industry sectors, including paper and
forest products and aluminum, bodes well for the Global Resources Fund. The fund
is positioned to follow a value investing strategy, seeking financially sound
but under-appreciated stocks in industries including oil, electric services,
base metals, minerals, chemicals and precious metals. The June 21 meeting of the
Organization of Petroleum Exporting Countries (OPEC) led to an agreement to
increase crude oil supply by only 708,000 barrels. As a result, the dynamics for
the energy sector remain robust. Because additional production capacity is low,
any increase in demand should be met by higher prices.
Merger activity was the theme in the gold equity markets, combining to achieve
substantial gold reserves--the key valuation measure of a gold company should a
rally occur. The market and our Gold Shares and World Gold Funds viewed both
mergers as positive, not only for the companies concerned but for the precious
metals sector as a whole.
INTERNATIONAL MARKETS BLOOMING
Developments within the United States' political climate in the past year are
playing a significant role in the Far East and, particularly, in China. We
believe these changes, the most significant of which is the passage of
legislation in the U.S. House of Representatives to allow China's membership in
the World Trade Organization (WTO) and pending approval by the Senate, will have
a profound effect on the economy of the China and Southeast Asia Region.
Our analysts, including Dr. Michael Ingraham and Dr. Jerry Lu, have been to
China and Hong Kong several times this year, while Rahim Kassim-Lakha traveled
to Malaysia and Singapore to gauge investment risks and opportunities and build
investment relationships. They found that the Chinese are privatizing
manufacturing operations with newfound entrepreneurial eagerness, and other
countries in the Southeast Asia region are reaching across borders to cooperate
on attracting new capital.
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I have also joined the search for investment opportunities abroad this year,
including trips to Central Europe, Hong Kong and mainland China, in an effort to
pick up on emerging trends and attend investment conferences. Our China Region
Opportunity Fund is well positioned and has the potential to benefit from
China's WTO role and the infectious nature of an economic boom likely to spread
throughout the region. Please remember that foreign and emerging market
investing involves special risks such as currency fluctuation, less public
disclosure as well as economic and political risks.
Other favorable developments include the German government's recent move to
lower corporate taxes to 25 percent--making an immediate $25 billion
contribution to its economy--with rippling effects spreading across Eastern
Europe. Additionally, Deutsche Telekom, Germany's biggest telecommunications
company, has made a bold bid for American communications company VoiceStream
Wireless. In a case of global irony, VoiceStream Wireless lists among its
significant shareholders the Hong Kong billionaire Li Ka-shing, whose
family-owned industrial conglomerate Hutchison Whampoa--representing
approximately 6 percent of the China Region Opportunity Fund's net assets as of
June 30, 2000--should make more than $10 billion with the takeover.
SAFE HAVEN FEATURES OF MONEY MARKETS
Because the roller-coaster ride of market volatility has been particularly
hair-raising in 2000, liquidity and safety of principal are uppermost in the
minds of many shareholders. The U.S. Government Securities Savings Fund(3)
provides a safe, yet easily accessible, haven for your savings dollars. The
companion U.S. Treasury Securities Cash Fund(3) provides a vehicle for instant
liquidity with no limit on the amount or number of withdrawals using our free
check writing feature.
Another smart diversification strategy for up-and-down markets is an investment
in a tax-free fund. Our Near-Term Tax Free Fund(4) is rated five stars by
Morningstar out of 1,688, 1,688 and 1,447 municipal bond funds for the overall,
3- and 5-year periods ended June 30, 2000, respectively.(5)
AUTOMATIC INVESTING PLAN ELIMINATES GUESSWORK
To avoid the natural tendency to sit on the sidelines when the market is
dropping and rush in when prices are peaking, we suggest you establish an
automatic investing plan, such as our ABC Investment Plan(R). The ABC Investment
Plan(R) uses dollar-cost averaging to build a position in a fund or funds over
time, taking advantage of fluctuations in prices by investing a set amount on a
regular basis.(6) While no investment plan can guarantee a profit or protect
against loss in a declining market, analysts agree that automatic investing
assures that you won't be sitting out a bull market or missing the opportunity
to benefit from the dips.
Recent exciting news from Washington, D.C. indicates a desire on the part of
many Congressional leaders to encourage more retirement savings on the part of
employees and employers. We know that many people are not taking advantage of
the opportunities to invest fully today for their retirement.
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So, max out your 401(k), 403(b), SIMPLE Individual Retirement Account (IRA) or
other workplace savings program. And, if you cannot participate in a plan at
work, by all means, open a traditional, Roth or spousal IRA now. The benefits of
compounding can be put to work for your investment immediately. To estimate how
much you will need for your retirement, please visit the online retirement
planning section of our website at www.usfunds.com.
Sincerely,
/s/ Frank Holmes
Frank Holmes
Chairman & CEO
For more complete information on any of our funds including charges and ongoing
expenses, obtain a prospectus by calling 1-800-US-FUNDS (1-800-873-8637) or by
visiting our website at www.usfunds.com. Read it carefully before you invest or
send money.
(1) The adviser for the All American Equity Fund has guaranteed total fund
operating expenses (as a percentage of net assets) will not exceed 1.00%
through June 30, 2001.
(2) Foreign and emerging market investing involves special risks such as
currency fluctuation, less public disclosure, as well as economic and
political risks. The price of gold is subject to substantial price
fluctuations over short periods of time and may be affected by unpredictable
international monetary and political policies. Investing in a single sector
mutual fund may involve greater risk and potential reward than investing in
a more diversified fund. We suggest investing no more than 3% - 5% of your
portfolio in gold or gold stocks.
(3) An investment in the U.S. Treasury Securities Cash Fund or the U.S.
Government Securities Savings Fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation (FDIC) or by any other government
agency. Although the funds seek to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the funds. The
adviser for the U.S. Government Securities Savings Fund has guaranteed total
fund operating expenses (as a percentage of net assets) will not exceed
0.40% through June 30, 2001.
(4) The adviser for the Near Term Tax-Free Fund has guaranteed total fund
operating expenses (as a percentage of net assets) will not exceed 0.70%
through June 30, 2001. Tax-exempt income may subject certain investors to
the alternative minimum tax.
(5) Morningstar proprietary ratings reflect historical risk-adjusted performance
and are subject to change every month. Overall ratings are calculated from a
fund's 3-, 5- and 10-year (when available) average annual returns in excess
of 90-day Treasury bill returns with appropriate fee adjustments and a risk
factor that reflects fund performance below 90-day Treasury bill returns.
The top 10 percent of the funds in an investment category receive 5 stars.
(6) A program of regular investing doesn't assure a profit or protect against
loss in a declining market. You should evaluate your ability to continue in
such a program in view of the possibility that you may have to redeem fund
shares in periods of declining share prices as well as in periods of rising
prices.
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MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The U.S. Treasury Securities Cash Fund seeks to obtain a high level of current
income while maintaining the highest degree of safety of principal and
liquidity. The U.S. Government Securities Savings Fund seeks to achieve a
consistently high yield with safety of principal.
PERFORMANCE
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U.S. TREASURY SECURITIES CASH FUND As of June 30, 2000
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7-Day Yield 5.69%
7-Day Effective Yield 5.85%
Weighted Average Days to Maturity 42
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U.S. GOVERNMENT SECURITIES SAVINGS FUND As of June 30, 2000
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7-Day Yield 6.06%
7-Day Effective Yield 6.24%
Weighted Average Days to Maturity 60
THE YEAR IN REVIEW - ECONOMIC AND
POLITICAL ISSUES THAT AFFECTED THE FUNDS
The Federal Reserve (Fed), increased interest rates six times for a total of 175
basis points in the past year. Record unemployment levels and speculation that
productivity gains would not be enough to offset wage increases have led the Fed
to conclude that wages would drive inflation higher. Oil prices were $32 a
barrel at the end of the period, up from $19 a barrel a year ago. This has had a
major impact on the economy, as rising energy prices are pushing inflation
higher while higher gas prices are affecting the consumer's purchasing power.
After accelerating in the later part of 1999 due to Y2K concerns, money supply
has decelerated significantly, which is putting some pressure on the stock
market. With a strong correlation to the stock market, retail spending slowed
significantly in the second quarter of 2000. There is evidence that the rate
hikes are taking their toll, as the economy appears to be slowing. In addition
to weak retail sales, the housing sector is slowing with mortgage rates above 8
percent, and auto sales have also slowed dramatically.
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Stronger economic growth continues in Japan, Europe and the Pacific Rim region.
Around the world, central banks are raising interest rates in an attempt to
thwart inflation. This could lead to rising prices as demand increases.
INVESTMENT HIGHLIGHTS
The funds performed well in this rising rate environment, and yields followed
the Fed rate increases in lockstep. In particular, the U.S. Government
Securities Savings Fund had significant exposure to floating rate securities,
which benefited directly from rising rates. The fund increased its yield from
4.60 percent on June 30, 1999, to 6.06 percent on June 30, 2000.
CURRENT OUTLOOK
The economy appears to be slowing, indicating that the Fed is close to ending
this cycle of interest rate increases. The inflation concerns that surfaced seem
to be subsiding as general economic weakness becomes more evident, as seen in
slowing retail sales, slowing gross domestic product, and a weak stock market.
We still believe that the Fed is likely to raise interest rates one more time
before year end to cap, and stay vigilant against, inflation.
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TAX FREE FUNDS
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MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The Tax Free and Near-Term Tax Free Funds seek to provide a high level of
current income that is exempt from federal income taxation and to preserve
capital. The Near-Term Tax Free Fund will maintain a weighted average maturity
of less than five years, while the Tax Free Fund will generally maintain a
longer weighted average maturity.
PERFORMANCE
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NEAR-TERM TAX FREE FUND
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[GRAPHIC: Linear graph plotted from data in table shown below]
NEAR-TERM LEHMAN 3-YEAR
TAX FREE FUND MUNICIPAL BOND INDEX
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12/04/90 .................. $ 10,000.00
12/31/90 .................. $ 10,010.00 $ 10,000.00
01/31/91 .................. $ 10,040.00 $ 10,126.64
02/28/91 .................. $ 9,989.90 $ 10,217.90
03/28/91 .................. $ 9,969.78 $ 10,222.55
04/30/91 .................. $ 10,151.78 $ 10,322.19
05/31/91 .................. $ 10,233.24 $ 10,388.30
06/28/91 .................. $ 10,151.46 $ 10,397.62
07/31/91 .................. $ 10,315.85 $ 10,480.49
08/30/91 .................. $ 10,491.22 $ 10,584.78
09/30/91 .................. $ 10,615.75 $ 10,673.25
10/31/91 .................. $ 10,751.31 $ 10,749.60
11/29/91 .................. $ 10,740.83 $ 10,812.93
12/31/91 .................. $ 10,983.03 $ 11,028.96
01/31/92 .................. $ 10,961.83 $ 11,076.45
02/28/92 .................. $ 10,951.16 $ 11,080.17
03/31/92 .................. $ 10,951.16 $ 11,055.03
04/30/92 .................. $ 11,037.31 $ 11,138.84
05/29/92 .................. $ 11,199.62 $ 11,231.96
06/30/92 .................. $ 11,395.34 $ 11,368.84
07/31/92 .................. $ 11,778.10 $ 11,590.46
08/31/92 .................. $ 11,503.43 $ 11,538.32
09/30/92 .................. $ 11,558.63 $ 11,632.37
10/30/92 .................. $ 11,248.03 $ 11,586.74
11/30/92 .................. $ 11,560.17 $ 11,667.75
12/31/92 .................. $ 11,705.65 $ 11,738.52
01/29/93 .................. $ 11,829.46 $ 11,826.99
02/26/93 .................. $ 12,338.37 $ 12,011.36
03/31/93 .................. $ 12,156.59 $ 11,975.98
04/30/93 .................. $ 12,282.15 $ 12,045.81
05/28/93 .................. $ 12,270.69 $ 12,077.47
06/30/93 .................. $ 12,431.99 $ 12,155.69
07/30/93 .................. $ 12,466.72 $ 12,161.28
08/31/93 .................. $ 12,594.40 $ 12,274.89
09/30/93 .................. $ 12,687.52 $ 12,328.89
10/29/93 .................. $ 12,722.60 $ 12,354.97
11/30/93 .................. $ 12,687.39 $ 12,338.21
12/31/93 .................. $ 12,852.47 $ 12,468.57
01/31/94 .................. $ 12,936.08 $ 12,569.14
02/28/94 .................. $ 12,804.33 $ 12,451.81
03/31/94 .................. $ 12,599.94 $ 12,301.89
04/29/94 .................. $ 12,624.07 $ 12,374.52
05/31/94 .................. $ 12,672.54 $ 12,432.26
06/30/94 .................. $ 12,684.70 $ 12,435.98
07/29/94 .................. $ 12,794.57 $ 12,539.34
08/31/94 .................. $ 12,831.31 $ 12,584.04
09/30/94 .................. $ 12,819.01 $ 12,552.38
10/31/94 .................. $ 12,794.36 $ 12,521.65
11/30/94 .................. $ 12,757.28 $ 12,499.30
12/30/94 .................. $ 12,844.15 $ 12,553.31
01/31/95 .................. $ 12,931.27 $ 12,657.60
02/28/95 .................. $ 13,006.16 $ 12,790.76
03/31/95 .................. $ 13,093.87 $ 12,905.30
04/28/95 .................. $ 13,131.60 $ 12,949.06
05/31/95 .................. $ 13,270.50 $ 13,147.41
06/30/95 .................. $ 13,321.19 $ 13,179.07
07/31/95 .................. $ 13,397.53 $ 13,317.81
08/31/95 .................. $ 13,461.33 $ 13,422.11
09/29/95 .................. $ 13,499.76 $ 13,460.29
10/31/95 .................. $ 13,551.18 $ 13,524.54
11/30/95 .................. $ 13,641.53 $ 13,611.14
12/29/95 .................. $ 13,680.39 $ 13,667.01
01/31/96 .................. $ 13,784.62 $ 13,774.09
02/29/96 .................. $ 13,784.62 $ 13,776.89
03/29/96 .................. $ 13,719.04 $ 13,743.37
04/30/96 .................. $ 13,719.04 $ 13,760.13
05/31/96 .................. $ 13,732.25 $ 13,772.23
06/28/96 .................. $ 13,811.78 $ 13,854.18
07/31/96 .................. $ 13,891.61 $ 13,931.46
08/30/96 .................. $ 13,931.69 $ 13,951.95
09/30/96 .................. $ 14,025.55 $ 14,036.69
10/31/96 .................. $ 14,119.77 $ 14,134.46
11/29/96 .................. $ 14,268.40 $ 14,266.69
12/31/96 .................. $ 14,268.40 $ 14,273.21
01/31/97 .................. $ 14,322.91 $ 14,335.60
02/28/97 .................. $ 14,402.25 $ 14,405.44
03/31/97 .................. $ 14,306.15 $ 14,330.94
04/30/97 .................. $ 14,376.44 $ 14,392.40
05/30/97 .................. $ 14,510.65 $ 14,509.73
06/30/97 .................. $ 14,620.35 $ 14,595.40
07/31/97 .................. $ 14,864.26 $ 14,768.60
08/29/97 .................. $ 14,787.35 $ 14,739.73
09/30/97 .................. $ 14,926.24 $ 14,844.96
10/31/97 .................. $ 14,991.02 $ 14,911.07
11/28/97 .................. $ 15,039.06 $ 14,953.91
12/31/97 .................. $ 15,196.39 $ 15,055.40
01/30/98 .................. $ 15,318.76 $ 15,155.04
02/27/98 .................. $ 15,311.62 $ 15,186.70
03/31/98 .................. $ 15,305.89 $ 15,210.91
04/30/98 .................. $ 15,285.77 $ 15,190.43
05/29/98 .................. $ 15,451.61 $ 15,331.04
06/30/98 .................. $ 15,500.80 $ 15,382.25
07/31/98 .................. $ 15,547.42 $ 15,438.12
08/31/98 .................. $ 15,722.93 $ 15,588.04
09/30/98 .................. $ 15,875.61 $ 15,686.75
10/30/98 .................. $ 15,868.25 $ 15,763.11
11/30/98 .................. $ 15,891.87 $ 15,801.29
12/31/98 .................. $ 15,900.76 $ 15,839.46
01/29/99 .................. $ 16,040.44 $ 15,982.87
02/26/99 .................. $ 16,001.68 $ 16,000.56
03/31/99 .................. $ 16,015.14 $ 16,014.53
04/30/99 .................. $ 16,066.18 $ 16,063.88
05/28/99 .................. $ 16,021.00 $ 16,040.60
06/30/99 .................. $ 15,865.48 $ 15,944.69
07/30/99 .................. $ 15,941.24 $ 16,023.84
08/31/99 .................. $ 15,892.57 $ 16,043.39
09/30/99 .................. $ 15,936.84 $ 16,103.92
10/29/99 .................. $ 15,907.75 $ 16,105.78
11/30/99 .................. $ 15,996.81 $ 16,176.55
12/31/99 .................. $ 15,964.45 $ 16,150.48
01/31/00 .................. $ 15,944.34 $ 16,179.35
02/29/00 .................. $ 15,997.12 $ 16,230.56
03/31/00 .................. $ 16,131.08 $ 16,314.37
04/28/00 .................. $ 16,088.88 $ 16,316.23
05/31/00 .................. $ 16,071.63 $ 16,332.99
06/30/00 .................. $ 16,285.71 $ 16,539.71
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AVERAGE ANNUAL PERFORMANCE For the Periods Ended
June 30, 2000
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INCEPTION FIVE YEAR ONE YEAR
--------- --------- --------
Near-Term Tax Free Fund
(Inception 12/4/90) 5.22% 4.10% 2.65%
Lehman 3-Year Municipal Bond Index 5.44% 4.65% 3.73%
Past performance is not predictive of future results. Investment return
and principal value may fluctuate so that shares, when redeemed, may be
worth more or less than their original value. Lehman Brothers Bond
Indexes include fixed-rate debt issues rated investment grade or higher
by Moody's Investment Service, Standard & Poor's Corporation, or Fitch
Investor's Service, in that order. All issues have at least one year to
maturity and an outstanding par value of at least $100 million.
Intermediate indexes include bonds with maturities of up to ten years,
and long-term indexes include those with maturities of ten years or
longer.
7
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TAX FREE FUND
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[GRAPHIC: Linear graph plotted from data in table shown below]
LEHMAN 10-YEAR
TAX FREE FUND MUNICIPAL BOND INDEX
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06/29/90 .................. $ 10,000.00 $ 10,000.00
07/31/90 .................. $ 10,171.02 $ 10,138.84
08/31/90 .................. $ 9,845.54 $ 9,993.21
09/28/90 .................. $ 9,909.06 $ 9,995.33
10/31/90 .................. $ 10,082.27 $ 10,215.26
11/30/90 .................. $ 10,412.23 $ 10,423.73
12/31/90 .................. $ 10,430.66 $ 10,449.20
01/31/91 .................. $ 10,560.35 $ 10,621.58
02/28/91 .................. $ 10,588.24 $ 10,712.86
03/28/91 .................. $ 10,569.58 $ 10,707.34
04/30/91 .................. $ 10,728.73 $ 10,855.09
05/31/91 .................. $ 10,794.55 $ 10,937.04
06/28/91 .................. $ 10,719.00 $ 10,924.30
07/31/91 .................. $ 10,880.12 $ 11,038.51
08/30/91 .................. $ 11,003.86 $ 11,187.53
09/30/91 .................. $ 11,118.49 $ 11,359.06
10/31/91 .................. $ 11,204.83 $ 11,451.62
11/29/91 .................. $ 11,195.19 $ 11,470.73
12/31/91 .................. $ 11,465.89 $ 11,715.28
01/31/92 .................. $ 11,436.23 $ 11,739.91
02/28/92 .................. $ 11,446.17 $ 11,722.07
03/31/92 .................. $ 11,436.19 $ 11,704.24
04/30/92 .................. $ 11,526.48 $ 11,815.48
05/29/92 .................. $ 11,677.61 $ 11,953.89
06/30/92 .................. $ 11,900.43 $ 12,161.08
07/31/92 .................. $ 12,348.35 $ 12,559.76
08/31/92 .................. $ 12,103.02 $ 12,411.16
09/30/92 .................. $ 12,144.08 $ 12,514.75
10/30/92 .................. $ 11,875.81 $ 12,386.96
11/30/92 .................. $ 12,145.48 $ 12,613.25
12/31/92 .................. $ 12,291.31 $ 12,760.16
01/29/93 .................. $ 12,385.78 $ 12,974.99
02/26/93 .................. $ 12,817.96 $ 13,449.67
03/31/93 .................. $ 12,648.61 $ 13,253.51
04/30/93 .................. $ 12,818.68 $ 13,379.61
05/28/93 .................. $ 12,861.37 $ 13,426.32
06/30/93 .................. $ 13,086.44 $ 13,691.25
07/30/93 .................. $ 13,107.97 $ 13,725.64
08/31/93 .................. $ 13,378.12 $ 14,010.11
09/30/93 .................. $ 13,540.87 $ 14,182.48
10/29/93 .................. $ 13,584.48 $ 14,205.83
11/30/93 .................. $ 13,453.02 $ 14,089.50
12/31/93 .................. $ 13,739.26 $ 14,390.10
01/31/94 .................. $ 13,885.18 $ 14,566.72
02/28/94 .................. $ 13,580.88 $ 14,167.62
03/31/94 .................. $ 13,071.17 $ 13,626.71
04/29/94 .................. $ 13,116.71 $ 13,776.59
05/31/94 .................. $ 13,242.62 $ 13,886.55
06/30/94 .................. $ 13,185.09 $ 13,826.69
07/29/94 .................. $ 13,393.27 $ 14,058.93
08/31/94 .................. $ 13,462.97 $ 14,113.28
09/30/94 .................. $ 13,299.50 $ 13,923.49
10/31/94 .................. $ 13,041.49 $ 13,720.12
11/30/94 .................. $ 12,723.40 $ 13,460.71
12/30/94 .................. $ 13,019.57 $ 13,703.14
01/31/95 .................. $ 13,378.23 $ 14,058.08
02/28/95 .................. $ 13,666.46 $ 14,455.91
03/31/95 .................. $ 13,847.39 $ 14,651.21
04/28/95 .................. $ 13,883.73 $ 14,669.04
05/31/95 .................. $ 14,236.61 $ 15,134.38
06/30/95 .................. $ 14,175.50 $ 15,040.12
07/31/95 .................. $ 14,249.14 $ 15,260.90
08/31/95 .................. $ 14,384.62 $ 15,468.09
09/29/95 .................. $ 14,483.56 $ 15,567.02
10/31/95 .................. $ 14,657.47 $ 15,746.61
11/30/95 .................. $ 14,844.58 $ 15,958.05
12/29/95 .................. $ 14,982.38 $ 16,055.70
01/31/96 .................. $ 15,070.44 $ 16,218.32
02/29/96 .................. $ 14,994.64 $ 16,151.66
03/29/96 .................. $ 14,817.04 $ 15,950.83
04/30/96 .................. $ 14,778.85 $ 15,894.37
05/31/96 .................. $ 14,791.64 $ 15,849.79
06/28/96 .................. $ 14,920.04 $ 16,000.51
07/31/96 .................. $ 15,048.88 $ 16,153.78
08/30/96 .................. $ 15,048.88 $ 16,154.21
09/30/96 .................. $ 15,230.82 $ 16,320.21
10/31/96 .................. $ 15,361.22 $ 16,526.56
11/29/96 .................. $ 15,596.94 $ 16,861.12
12/31/96 .................. $ 15,557.49 $ 16,785.12
01/31/97 .................. $ 15,610.32 $ 16,851.36
02/28/97 .................. $ 15,740.29 $ 17,010.15
03/31/97 .................. $ 15,592.48 $ 16,782.15
04/30/97 .................. $ 15,724.87 $ 16,905.70
05/30/97 .................. $ 15,923.61 $ 17,145.16
06/30/97 .................. $ 16,102.93 $ 17,334.52
07/31/97 .................. $ 16,502.46 $ 17,821.51
08/29/97 .................. $ 16,362.45 $ 17,648.71
09/30/97 .................. $ 16,541.22 $ 17,872.46
10/31/97 .................. $ 16,619.34 $ 17,967.14
11/28/97 .................. $ 16,717.02 $ 18,050.36
12/31/97 .................. $ 16,971.01 $ 18,335.24
01/30/98 .................. $ 17,119.37 $ 18,538.62
02/27/98 .................. $ 17,097.10 $ 18,537.34
03/31/98 .................. $ 17,080.34 $ 18,524.60
04/30/98 .................. $ 17,008.82 $ 18,422.71
05/29/98 .................. $ 17,284.79 $ 18,736.04
06/30/98 .................. $ 17,344.15 $ 18,804.82
07/31/98 .................. $ 17,399.60 $ 18,834.97
08/31/98 .................. $ 17,673.65 $ 19,162.31
09/30/98 .................. $ 17,882.93 $ 19,447.20
10/30/98 .................. $ 17,822.50 $ 19,455.70
11/30/98 .................. $ 17,904.83 $ 19,513.86
12/31/98 .................. $ 17,923.67 $ 19,574.58
01/29/99 .................. $ 18,133.68 $ 19,874.33
02/26/99 .................. $ 18,013.67 $ 19,696.00
03/31/99 .................. $ 18,044.50 $ 19,685.82
04/30/99 .................. $ 18,094.62 $ 19,738.46
05/28/99 .................. $ 17,934.83 $ 19,600.05
06/30/99 .................. $ 17,584.45 $ 19,235.77
07/30/99 .................. $ 17,620.22 $ 19,364.84
08/31/99 .................. $ 17,394.35 $ 19,293.51
09/30/99 .................. $ 17,388.35 $ 19,358.47
10/29/99 .................. $ 17,107.84 $ 19,221.76
11/30/99 .................. $ 17,316.77 $ 19,431.92
12/31/99 .................. $ 17,129.76 $ 19,330.87
01/31/00 .................. $ 16,956.63 $ 19,251.90
02/29/00 .................. $ 17,195.13 $ 19,403.05
03/31/00 .................. $ 17,652.43 $ 19,780.50
04/28/00 .................. $ 17,514.37 $ 19,681.14
05/31/00 .................. $ 17,369.59 $ 19,564.39
06/30/00 .................. $ 17,860.50 $ 20,095.95
-----------------------------------------------------------------------
AVERAGE ANNUAL PERFORMANCE For the Periods Ended
June 30, 2000
-----------------------------------------------------------------------
TEN YEAR FIVE YEAR ONE YEAR
-------- --------- --------
Tax Free Fund 5.97% 4.73% 1.57%
Lehman 10-Year Municipal Bond Index 7.23% 5.97% 4.47%
Past performance is not predictive of future results. Investment return
and principal value may fluctuate so that shares, when redeemed, may be
worth more or less than their original value. Lehman Brothers Bond
Indexes include fixed-rate debt issues rated investment grade or higher
by Moody's Investment Service, Standard & Poor's Corporation, or Fitch
Investor's Service, in that order. All issues have at least one year to
maturity and an outstanding par value of at least $100 million.
Intermediate indexes include bonds with maturities of up to ten years,
and long-term indexes include those with maturities of ten years or
longer.
THE YEAR IN REVIEW - ECONOMIC AND
POLITICAL ISSUES THAT AFFECTED THE FUNDS
Yields ended the year close to where they began, but it was a volatile journey.
The Federal Reserve increased interest rates by 175 basis points over the past
year. That sent long-term municipal yields up approximately 100 basis points by
January. Yields dropped 70 basis points by April to approximately 6 percent,
only to shoot higher again by mid-May, reaching the 6.6 percent level. By the
end of June, yields were back to 6 percent as the market sensed an end to the
Fed's tightening cycle.
Economic weakness began to surface after the last Fed rate increase. Retail
sales weakened significantly toward the end of the period after very strong
readings in the fourth quarter of 1999. The housing market, auto sales, money
supply and a number of other indicators pointed to a slowdown, which provided
the market with a positive tone.
8
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TAX FREE FUNDS
---------------------------------------------------------------------------
Retail municipal investors drove the market over the past year. Attractive
relative yields and the ability to buy 6 percent coupon bonds with relatively
short maturities brought investors to the market. Municipal funds suffered from
net outflows and issuers were targeting individuals more than usual. The
municipal market had a flood of new issuance early in the period primarily
because of Y2K concerns, only to dry up beginning in December as issuers and
underwriters shied away from Y2K concerns and increased borrowing costs.
INVESTMENT HIGHLIGHTS
The municipal market favored current coupons, high quality and general
obligations while neglecting healthcare bonds and low coupons that fell out of
favor. In a rising interest rate environment and uncertainty surrounding Y2K, it
paid to be in well-known credits with good structure. This condition persisted
throughout the past year. Both funds benefited from this trend, as we were early
to recognize it and implement it into the funds.
CURRENT OUTLOOK
The outlook for the second half of 2000 is more positive than in previous
months. The Fed appears to be nearing the end of its tightening cycle. Inflation
expectations are higher than they were a year ago, but we believe that they are
under control. Economic growth is slowing and the prospects of more Fed rate
increases are waning. The municipal market in particular has a very positive
outlook as the supply/demand situation is favorable and the relative value to
treasuries encourages more people to enter the market.
9
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TAX FREE FUNDS
---------------------------------------------------------------------------
MUNICIPAL BOND RATINGS--BASED ON TOTAL INVESTMENTS
--------------------------------------------------
NEAR-TERM TAX FREE FUND
AAA ......................................................... 44.00%
AA .......................................................... 24.56%
A ........................................................... 17.85%
BBB ......................................................... 5.36%
TAX FREE FUND
AAA ......................................................... 52.21%
AA .......................................................... 29.06%
A ........................................................... 6.57%
BBB ......................................................... 2.65%
10
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EQUITY INCOME FUND
---------------------------------------------------------------------------
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The Equity Income Fund (formerly the Income Fund), seeks preservation of capital
and, consistent with that objective, production of current income. Long-term
capital appreciation is a secondary consideration.
PERFORMANCE
[GRAPHIC: Linear graph plotted from data in table shown below]
EQUITY INCOME FUND
--------------------------------------------------------------------
EQUITY S&P/BARRA 500 S&P
INCOME FUND VALUE INDEX 500 INDEX
------------- ------------- -------------
06/29/90 ........ $ 10,000.00 $ 10,000.00 $ 10,000.00
07/31/90 ........ $ 9,918.23 $ 10,001.00 $ 9,968.05
08/31/90 ........ $ 9,337.69 $ 9,120.92 $ 9,068.14
09/28/90 ........ $ 9,321.34 $ 8,698.62 $ 8,627.47
10/31/90 ........ $ 9,659.55 $ 8,575.10 $ 8,590.99
11/30/90 ........ $ 9,799.78 $ 9,160.77 $ 9,145.22
12/31/90 ........ $ 9,750.29 $ 9,367.81 $ 9,399.72
01/31/91 ........ $ 9,733.20 $ 9,810.91 $ 9,808.05
02/28/91 ........ $ 10,083.56 $ 10,450.58 $ 10,508.61
03/28/91 ........ $ 10,040.83 $ 10,545.69 $ 10,762.83
04/30/91 ........ $ 10,040.83 $ 10,628.98 $ 10,788.42
05/31/91 ........ $ 10,143.81 $ 11,135.99 $ 11,252.23
06/28/91 ........ $ 9,791.96 $ 10,582.52 $ 10,737.12
07/31/91 ........ $ 10,025.51 $ 11,002.65 $ 11,237.15
08/30/91 ........ $ 10,276.36 $ 11,162.19 $ 11,502.60
09/30/91 ........ $ 10,544.52 $ 11,045.01 $ 11,310.03
10/31/91 ........ $ 10,675.23 $ 11,206.25 $ 11,461.75
11/29/91 ........ $ 10,718.81 $ 10,580.95 $ 11,001.19
12/31/91 ........ $ 11,145.82 $ 11,481.39 $ 12,257.23
01/31/92 ........ $ 10,784.85 $ 11,481.39 $ 12,029.09
02/28/92 ........ $ 11,040.17 $ 11,714.46 $ 12,184.82
03/31/92 ........ $ 10,855.29 $ 11,530.55 $ 11,948.12
04/30/92 ........ $ 11,032.37 $ 12,093.22 $ 12,298.55
05/29/92 ........ $ 11,439.66 $ 12,127.09 $ 12,358.69
06/30/92 ........ $ 11,262.58 $ 12,027.65 $ 12,174.89
07/31/92 ........ $ 11,814.58 $ 12,461.84 $ 12,671.86
08/31/92 ........ $ 11,752.26 $ 12,100.44 $ 12,412.99
09/30/92 ........ $ 11,805.68 $ 12,233.56 $ 12,558.91
10/30/92 ........ $ 11,859.42 $ 12,135.20 $ 12,602.01
11/30/92 ........ $ 11,832.55 $ 12,463.81 $ 13,029.94
12/31/92 ........ $ 12,047.52 $ 12,689.79 $ 13,189.79
01/29/93 ........ $ 12,152.95 $ 13,040.27 $ 13,299.95
02/26/93 ........ $ 12,766.35 $ 13,489.52 $ 13,481.16
03/31/93 ........ $ 13,178.48 $ 13,862.24 $ 13,765.42
04/30/93 ........ $ 13,063.13 $ 13,806.24 $ 13,432.70
05/28/93 ........ $ 13,245.76 $ 14,063.99 $ 13,791.14
06/30/93 ........ $ 13,591.81 $ 14,249.91 $ 13,831.39
07/30/93 ........ $ 13,765.81 $ 14,426.91 $ 13,775.70
08/31/93 ........ $ 14,481.17 $ 14,992.16 $ 14,297.24
09/30/93 ........ $ 14,374.83 $ 14,986.66 $ 14,187.60
10/29/93 ........ $ 14,423.33 $ 15,068.07 $ 14,480.88
11/30/93 ........ $ 13,734.66 $ 14,798.48 $ 14,342.86
12/31/93 ........ $ 14,180.84 $ 15,050.40 $ 14,516.27
01/31/94 ........ $ 14,523.28 $ 15,752.01 $ 15,009.31
02/28/94 ........ $ 13,898.83 $ 15,182.16 $ 14,602.30
03/31/94 ........ $ 13,083.03 $ 14,557.74 $ 13,966.90
04/29/94 ........ $ 13,366.35 $ 14,864.36 $ 14,145.84
05/31/94 ........ $ 13,093.15 $ 15,110.32 $ 14,377.08
06/30/94 ........ $ 12,809.84 $ 14,692.43 $ 14,025.26
07/29/94 ........ $ 13,237.85 $ 15,189.47 $ 14,485.47
08/31/94 ........ $ 13,462.05 $ 15,618.88 $ 15,078.00
09/30/94 ........ $ 13,186.90 $ 15,068.72 $ 14,709.59
10/31/94 ........ $ 13,340.59 $ 15,396.73 $ 15,039.58
11/30/94 ........ $ 12,797.54 $ 14,772.87 $ 14,492.54
12/30/94 ........ $ 12,725.82 $ 14,954.30 $ 14,707.23
01/31/95 ........ $ 13,015.51 $ 15,359.29 $ 15,088.37
02/28/95 ........ $ 13,243.13 $ 15,955.38 $ 15,675.81
03/31/95 ........ $ 13,305.20 $ 16,395.30 $ 16,137.64
04/28/95 ........ $ 13,617.29 $ 16,935.08 $ 16,612.48
05/31/95 ........ $ 14,085.42 $ 17,688.55 $ 17,275.44
06/30/95 ........ $ 13,991.79 $ 17,822.84 $ 17,676.00
07/31/95 ........ $ 14,232.85 $ 18,436.76 $ 18,261.92
08/31/95 ........ $ 14,253.81 $ 18,594.24 $ 18,307.50
09/29/95 ........ $ 14,735.92 $ 19,240.98 $ 19,079.67
10/31/95 ........ $ 14,546.33 $ 18,941.37 $ 19,011.51
11/30/95 ........ $ 15,009.79 $ 19,934.16 $ 19,845.14
12/29/95 ........ $ 15,568.04 $ 20,486.65 $ 20,227.40
01/31/96 ........ $ 15,848.16 $ 21,099.99 $ 20,915.05
02/29/96 ........ $ 15,880.48 $ 21,297.81 $ 21,109.63
03/29/96 ........ $ 15,912.80 $ 21,796.36 $ 21,312.87
04/30/96 ........ $ 16,053.82 $ 22,018.26 $ 21,626.80
05/31/96 ........ $ 16,064.66 $ 22,350.13 $ 22,183.59
06/28/96 ........ $ 16,314.15 $ 22,242.24 $ 22,268.17
07/31/96 ........ $ 15,735.40 $ 21,303.88 $ 21,284.91
08/30/96 ........ $ 15,997.48 $ 21,892.03 $ 21,734.55
09/30/96 ........ $ 16,095.75 $ 22,829.66 $ 22,956.74
10/31/96 ........ $ 16,337.46 $ 23,602.48 $ 23,589.65
11/29/96 ........ $ 17,051.61 $ 25,408.05 $ 25,371.18
12/31/96 ........ $ 17,194.44 $ 24,992.27 $ 24,868.59
01/31/97 ........ $ 17,619.79 $ 26,144.16 $ 26,421.43
02/28/97 ........ $ 17,658.46 $ 26,334.30 $ 26,628.86
03/31/97 ........ $ 16,909.58 $ 25,432.66 $ 25,536.76
04/30/97 ........ $ 17,117.38 $ 26,386.18 $ 27,059.92
05/30/97 ........ $ 18,026.50 $ 28,041.22 $ 28,706.19
06/30/97 ........ $ 18,855.10 $ 29,113.19 $ 29,991.52
07/31/97 ........ $ 19,453.67 $ 31,442.33 $ 32,376.57
08/29/97 ........ $ 18,881.12 $ 30,021.38 $ 30,564.13
09/30/97 ........ $ 19,940.34 $ 31,781.49 $ 32,237.08
10/31/97 ........ $ 19,600.37 $ 30,613.61 $ 31,161.66
11/28/97 ........ $ 20,515.67 $ 31,780.56 $ 32,603.02
12/31/97 ........ $ 21,162.91 $ 32,486.16 $ 33,162.53
01/30/98 ........ $ 21,162.91 $ 32,085.69 $ 33,528.97
02/27/98 ........ $ 21,994.31 $ 34,492.40 $ 35,945.82
03/31/98 ........ $ 23,453.04 $ 36,239.48 $ 37,785.07
04/30/98 ........ $ 23,453.04 $ 36,668.42 $ 38,165.03
05/29/98 ........ $ 23,149.64 $ 36,152.58 $ 37,509.94
06/30/98 ........ $ 23,349.88 $ 36,427.11 $ 39,032.45
07/31/98 ........ $ 23,075.36 $ 35,635.89 $ 38,617.87
08/31/98 ........ $ 21,184.18 $ 29,905.74 $ 33,040.27
09/30/98 ........ $ 22,190.78 $ 31,722.72 $ 35,156.96
10/30/98 ........ $ 22,802.51 $ 34,207.60 $ 38,014.12
11/30/98 ........ $ 23,613.06 $ 35,989.45 $ 40,317.13
12/31/98 ........ $ 24,131.77 $ 37,253.50 $ 42,638.88
01/29/99 ........ $ 23,927.99 $ 38,006.02 $ 44,421.22
02/26/99 ........ $ 23,180.77 $ 37,187.77 $ 43,040.86
03/31/99 ........ $ 23,540.79 $ 38,314.78 $ 44,762.42
04/30/99 ........ $ 24,545.79 $ 41,617.92 $ 46,495.82
05/28/99 ........ $ 23,932.57 $ 40,882.52 $ 45,399.43
06/30/99 ........ $ 24,884.76 $ 42,452.72 $ 47,916.97
07/30/99 ........ $ 24,270.75 $ 41,147.42 $ 46,423.01
08/31/99 ........ $ 23,383.83 $ 40,105.07 $ 46,193.17
09/30/99 ........ $ 22,940.37 $ 38,535.89 $ 44,928.40
10/29/99 ........ $ 24,338.97 $ 40,711.34 $ 47,770.28
11/30/99 ........ $ 24,731.26 $ 40,472.71 $ 48,741.30
12/31/99 ........ $ 25,706.47 $ 41,993.42 $ 51,610.27
01/31/00 ........ $ 25,706.47 $ 40,619.34 $ 48,983.13
02/29/00 ........ $ 24,992.41 $ 37,998.41 $ 47,998.17
03/31/00 ........ $ 26,420.54 $ 41,897.14 $ 52,640.54
04/28/00 ........ $ 25,587.46 $ 41,574.60 $ 51,019.44
05/31/00 ........ $ 25,032.08 $ 41,604.17 $ 49,901.34
06/30/00 ........ $ 24,556.03 $ 39,910.98 $ 51,095.66
-----------------------------------------------------------------------
AVERAGE ANNUAL PERFORMANCE For the Periods Ended
June 30, 2000
-----------------------------------------------------------------------
TEN YEAR FIVE YEAR ONE YEAR
-------- --------- --------
Equity Income Fund 9.40% 11.91% (1.32)%
S&P 500 Index 17.72% 23.65% 6.63 %
S&P/BARRA 500 Value Index 14.84% 17.50% (5.99)%
Past performance is not predictive of future results. Investment return
and principal value may fluctuate so that shares, when redeemed, may be
worth more or less than their original value. The S&P 500 Index is an
unmanaged but commonly used measure of common stock total return
performance. The S&P/BARRA 500 Value Index is a capitalization-weighted
index of all stocks in the S&P 500 that have low price-to-book ratios.
The index is rebalanced semi-annually on January 1 and July 1. It is
designed so that approximately 50% of the S&P 500 Index market
capitalization is in the Value Index.
---------------------------------------------------------------------------
THE YEAR IN REVIEW - ECONOMIC AND
POLITICAL ISSUES THAT AFFECTED THE FUND
The first half of 2000 saw a disruption in past trends.
Long-depressed sectors of the U.S. economy rallied from their lows
on the prospects of
11
<PAGE>
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EQUITY INCOME FUND
---------------------------------------------------------------------------
more robust earnings. Inflationary fears continued to threaten the market as the
Federal Reserve hiked rates in February, March and May to bring the Fed Funds
rate to 6.5 percent. Prospects of future rate hikes still prevail, but there is
considerable agreement that Fed tightening will end in the near future. Yet,
faced with a juggernaut economy--evidenced by the robust 5.5 percent gain in
gross domestic product (GDP) in the first quarter and expectations of 3.7
percent in the second quarter--the prospects for continued economic growth are
excellent. Corporate earnings are growing strongly. With first quarter S&P
earnings posting 23.6 percent gains, and estimates for the second quarter as
high as 19.0 percent, there seems to be little to sway the market away from
these crucial fundamental earnings criteria. In addition, U.S. productivity
continues to expand, with even Federal Reserve Board Chairman Greenspan
uncharacteristically stating that new technology is driving higher productivity.
INVESTMENT HIGHLIGHTS
After building a solid base in the second half of 1999, our investment strategy
held firm through the first quarter of 2000. Turnover was extremely low in the
first quarter of 2000, as we weathered the Internet stock-led storm and
disappointments in many of the overvalued technology stocks. Despite not holding
any of these stocks in the fund, growth stocks in general were hurt in the first
and second quarters of 2000. We also raised the profile of earnings and dividend
growth in our stock selection. In the second quarter 2000, we added holdings to
energy and utilities and reduced holdings in basic materials.
The basic materials sector hurt us in the first half of the year, because the
market refused to reward companies in this sector with strong earnings
forecasts. At the end of June 2000, the fund's holdings accented financial
services and banks followed by communication services and energy. This is a
marked change from the portfolio's structure a year ago, because we acted to
reduce our positions in communication services while increasing exposure to
energy, a strategy that reflects closely our focus on benchmarking to earnings.
CURRENT OUTLOOK
The prospects for continued economic growth are excellent. Despite setbacks
driven by Fed tightening, we do not expect substantially higher rates this year.
As the election season arrives, we believe the Fed will take a back seat, having
successfully managed a soft landing for inflation and the economy in general. As
the third quarter 2000 begins, we already see that mortgage rates are falling,
long bond rates are stable and the U.S. currency is strong. Oil prices are lower
than earlier in the year, and underlying
12
<PAGE>
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EQUITY INCOME FUND
---------------------------------------------------------------------------
fundamentals for U.S. corporations are excellent going forward. Thus, despite a
recent rise in interest rates, which is normally harmful to equity markets, the
prospects for strong earnings for 2000 are excellent.
TOP 10 HOLDINGS BASED ON TOTAL INVESTMENTS
---------------------------------------------------------------------
PHILIPS ELECTRONICS N.V., ADR 5.47%
MANUFACTURING
---------------------------------------------------------------------
EXXON MOBIL CORP. 4.52%
PETROLEUM PRODUCTION & REFINING
---------------------------------------------------------------------
CITIGROUP CAPITAL/CITIGROUP, INC. 4.48%
FINANCIAL SERVICES/BANKS
---------------------------------------------------------------------
GLOBAL CROSSING LTD. 4.04%
TELECOMMUNICATIONS
---------------------------------------------------------------------
ENRON CORP. 3.71%
UTILITIES
---------------------------------------------------------------------
PHARMACIA CORP. 3.02%
CHEMICAL & PHARMACEUTICALS
---------------------------------------------------------------------
HEWLETT-PACKARD CO. 2.88%
COMPUTER & OFFICE EQUIPMENT
---------------------------------------------------------------------
VIACOM INC., CLASS B 2.70%
ENTERTAINMENT
---------------------------------------------------------------------
MORGAN STANLEY DEAN WITTER & CO. 2.49%
FINANCIAL SERVICES
---------------------------------------------------------------------
TIME-WARNER, INC. 2.45%
ENTERTAINMENT
---------------------------------------------------------------------
TOP 5 INDUSTRIES BASED ON TOTAL INVESTMENTS
---------------------------------------------------------------------
TELECOMMUNICATIONS 15.54%
FINANCIAL SERVICES 9.41%
BANKS 8.91%
MANUFACTURING 8.84%
PETROLEUM PRODUCTION & REFINING 8.11%
13
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ALL AMERICAN EQUITY FUND
---------------------------------------------------------------------------
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The principal objective of the All American Equity Fund is to seek capital
appreciation by investing primarily in a broadly diversified portfolio of
domestic common stocks. The fund invests in large- capitalization stocks, while
retaining the flexibility to seek out promising individual stock opportunities.
The fund seeks capital appreciation and does not emphasize income.
PERFORMANCE
[GRAPHIC: Linear graph plotted from data in table shown below]
ALL AMERICAN EQUITY FUND
--------------------------------------------------------------------
ALL AMERICAN
EQUITY FUND S&P 500 INDEX
------------- -------------
06/29/90 .................. $ 10,000.00 $ 10,000.00
07/31/90 .................. $ 10,111.66 $ 9,968.05
08/31/90 .................. $ 9,342.43 $ 9,068.14
09/28/90 .................. $ 9,044.67 $ 8,627.47
10/31/90 .................. $ 8,790.32 $ 8,590.99
11/30/90 .................. $ 9,255.58 $ 9,145.22
12/31/90 .................. $ 9,466.50 $ 9,399.72
01/31/91 .................. $ 9,866.14 $ 9,808.05
02/28/91 .................. $ 10,559.27 $ 10,508.61
03/28/91 .................. $ 10,802.80 $ 10,762.83
04/30/91 .................. $ 10,790.31 $ 10,788.42
05/31/91 .................. $ 11,214.93 $ 11,252.23
06/28/91 .................. $ 10,684.16 $ 10,737.12
07/31/91 .................. $ 11,152.49 $ 11,237.15
08/30/91 .................. $ 11,396.02 $ 11,502.60
09/30/91 .................. $ 11,164.98 $ 11,310.03
10/31/91 .................. $ 11,289.86 $ 11,461.75
11/29/91 .................. $ 10,827.78 $ 11,001.19
12/31/91 .................. $ 11,989.24 $ 12,257.23
01/31/92 .................. $ 11,781.88 $ 12,029.09
02/28/92 .................. $ 11,901.27 $ 12,184.82
03/31/92 .................. $ 11,649.92 $ 11,948.12
04/30/92 .................. $ 11,970.39 $ 12,298.55
05/29/92 .................. $ 12,008.09 $ 12,358.69
06/30/92 .................. $ 11,807.01 $ 12,174.89
07/31/92 .................. $ 12,253.15 $ 12,671.86
08/31/92 .................. $ 11,976.67 $ 12,412.99
09/30/92 .................. $ 12,089.78 $ 12,558.91
10/30/92 .................. $ 12,114.96 $ 12,602.01
11/30/92 .................. $ 12,511.66 $ 13,029.94
12/31/92 .................. $ 12,662.78 $ 13,189.79
01/29/93 .................. $ 12,758.08 $ 13,299.95
02/26/93 .................. $ 12,923.28 $ 13,481.16
03/31/93 .................. $ 13,190.13 $ 13,765.42
04/30/93 .................. $ 12,870.76 $ 13,432.70
05/28/93 .................. $ 13,202.91 $ 13,791.14
06/30/93 .................. $ 13,241.23 $ 13,831.39
07/30/93 .................. $ 13,176.95 $ 13,775.70
08/31/93 .................. $ 13,652.61 $ 14,297.24
09/30/93 .................. $ 13,543.34 $ 14,187.60
10/29/93 .................. $ 13,801.92 $ 14,480.88
11/30/93 .................. $ 13,633.84 $ 14,342.86
12/31/93 .................. $ 13,931.21 $ 14,516.27
01/31/94 .................. $ 14,287.24 $ 15,009.31
02/28/94 .................. $ 14,036.70 $ 14,602.30
03/31/94 .................. $ 13,351.02 $ 13,966.90
04/29/94 .................. $ 13,583.39 $ 14,145.84
05/31/94 .................. $ 13,443.97 $ 14,377.08
06/30/94 .................. $ 13,019.07 $ 14,025.26
07/29/94 .................. $ 13,465.93 $ 14,485.47
08/31/94 .................. $ 13,892.79 $ 15,078.00
09/30/94 .................. $ 13,499.28 $ 14,709.59
10/31/94 .................. $ 13,626.57 $ 15,039.58
11/30/94 .................. $ 13,070.52 $ 14,492.54
12/30/94 .................. $ 13,191.11 $ 14,707.23
01/31/95 .................. $ 13,425.45 $ 15,088.37
02/28/95 .................. $ 13,803.42 $ 15,675.81
03/31/95 .................. $ 14,151.15 $ 16,137.64
04/28/95 .................. $ 14,569.37 $ 16,612.48
05/31/95 .................. $ 15,056.03 $ 17,275.44
06/30/95 .................. $ 15,360.20 $ 17,676.00
07/31/95 .................. $ 15,750.32 $ 18,261.92
08/31/95 .................. $ 15,681.47 $ 18,307.50
09/29/95 .................. $ 16,354.63 $ 19,079.67
10/31/95 .................. $ 16,400.79 $ 19,011.51
11/30/95 .................. $ 17,008.51 $ 19,845.14
12/29/95 .................. $ 17,262.37 $ 20,227.40
01/31/96 .................. $ 17,794.82 $ 20,915.05
02/29/96 .................. $ 17,987.74 $ 21,109.63
03/29/96 .................. $ 18,126.64 $ 21,312.87
04/30/96 .................. $ 18,390.02 $ 21,626.80
05/31/96 .................. $ 18,963.26 $ 22,183.59
06/28/96 .................. $ 19,094.95 $ 22,268.17
07/31/96 .................. $ 18,433.82 $ 21,284.91
08/30/96 .................. $ 18,690.49 $ 21,734.55
09/30/96 .................. $ 19,639.40 $ 22,956.74
10/31/96 .................. $ 20,045.63 $ 23,589.65
11/29/96 .................. $ 21,459.60 $ 25,371.18
12/31/96 .................. $ 21,108.06 $ 24,868.59
01/31/97 .................. $ 22,556.81 $ 26,421.43
02/28/97 .................. $ 22,581.10 $ 26,628.86
03/31/97 .................. $ 21,710.23 $ 25,536.76
04/30/97 .................. $ 23,188.44 $ 27,059.92
05/30/97 .................. $ 24,496.09 $ 28,706.19
06/30/97 .................. $ 25,526.77 $ 29,991.52
07/31/97 .................. $ 27,090.64 $ 32,376.57
08/29/97 .................. $ 25,697.82 $ 30,564.13
09/30/97 .................. $ 26,871.53 $ 32,237.08
10/31/97 .................. $ 26,046.60 $ 31,161.66
11/28/97 .................. $ 27,075.72 $ 32,603.02
12/31/97 .................. $ 27,504.52 $ 33,162.53
01/30/98 .................. $ 28,044.15 $ 33,528.97
02/27/98 .................. $ 29,795.88 $ 35,945.82
03/31/98 .................. $ 31,175.67 $ 37,785.07
04/30/98 .................. $ 31,650.04 $ 38,165.03
05/29/98 .................. $ 31,192.31 $ 37,509.94
06/30/98 .................. $ 32,498.10 $ 39,032.45
07/31/98 .................. $ 32,397.59 $ 38,617.87
08/31/98 .................. $ 28,151.06 $ 33,040.27
09/30/98 .................. $ 29,940.96 $ 35,156.96
10/30/98 .................. $ 31,830.12 $ 38,014.12
11/30/98 .................. $ 33,820.02 $ 40,317.13
12/31/98 .................. $ 35,436.96 $ 42,638.88
01/29/99 .................. $ 36,698.25 $ 44,421.22
02/26/99 .................. $ 35,592.46 $ 43,040.86
03/31/99 .................. $ 36,507.33 $ 44,762.42
04/30/99 .................. $ 37,408.32 $ 46,495.82
05/28/99 .................. $ 36,793.22 $ 45,399.43
06/30/99 .................. $ 38,830.84 $ 47,916.97
07/30/99 .................. $ 37,521.45 $ 46,423.01
08/31/99 .................. $ 37,035.84 $ 46,193.17
09/30/99 .................. $ 35,905.08 $ 44,928.40
10/29/99 .................. $ 38,067.73 $ 47,770.28
11/30/99 .................. $ 38,623.59 $ 48,741.30
12/31/99 .................. $ 40,614.26 $ 51,610.27
01/31/00 .................. $ 38,586.19 $ 48,983.13
02/29/00 .................. $ 37,757.33 $ 47,998.17
03/31/00 .................. $ 41,074.54 $ 52,640.54
04/28/00 .................. $ 40,059.60 $ 51,019.44
05/31/00 .................. $ 38,912.26 $ 49,901.34
06/30/00 .................. $ 39,888.38 $ 51,095.66
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AVERAGE ANNUAL PERFORMANCE For the Periods Ended
June 30, 2000
-----------------------------------------------------------------------
TEN YEAR FIVE YEAR ONE YEAR
-------- --------- --------
All American Equity Fund 14.84% 21.03% 2.72%
S&P 500 Index 17.72% 23.65% 6.63%
Past performance is not predictive of future results. Investment return
and principal value may fluctuate so that shares, when redeemed, may be
worth more or less than their original value. The S&P 500 Index is an
unmanaged but commonly used measure of common stock total return
performance.
14
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ALL AMERICAN EQUITY FUND
---------------------------------------------------------------------------
THE YEAR IN REVIEW - ECONOMIC AND
POLITICAL ISSUES THAT AFFECTED THE FUND
The last 12 months have been very volatile for U.S. equity markets. U.S. gross
domestic product (GDP) grew 4.2 percent in 1999, peaking as high as 4.6 percent
in the fourth quarter of 1999. This raised concerns of accelerating inflation.
In order to attack inflationary pressures, the Federal Reserve has increased
interest rates six times since March 18, 1999. As a result of the tightening,
the U.S. economy showed early signs of a slowdown in the first half of 2000.
Analysts expect the U.S. GDP to be approximately 3 percent for 2000. We believe
inflation will remain close to 2 percent in 2000. Moreover, we expect the
Federal Reserve to complete its tightening sequence, which should provide
additional fuel for the U.S. equity markets in the second half of 2000.
INVESTMENT HIGHLIGHTS
The last two months of 1999 posted unusually healthy returns for equity
investors. From the beginning of November to the end of December 1999, the
Nasdaq appreciated more than 37 percent, followed by the S&P 500's return of 7.8
percent and the Dow Jones' gain of 7.2 percent. The rally continued into the
first two months of 2000 and ended with a market correction in March. The
correction started on March 24, sending the Nasdaq down almost 38 percent in
just two months, a drop as severe as the 1987 market crash for the New York
Stock Exchange (NYSE). Some technology issues fell as much as 60-70 percent from
their 52-week highs. The equity markets regained some strength in June,
propelled by healthcare and biotechnology stocks. Other "safe haven" sectors
that rallied in the first half of 2000 were utilities and energy.
Corporate earnings remained robust throughout the 12-month period under review.
Earnings accelerated in 2000, with the S&P posting 23.6 percent year-over-year
growth for the first quarter, the highest growth in the last six years.
Corporate profits are expected to grow close to 22 percent in the second quarter
of the year, according to First Call, a research firm that publishes earnings
analyses.
Consumer spending is backing away from its all-time high levels. There have been
indications of slowing auto sales, decreasing retail activity and slightly
deteriorating consumer confidence. We believe this trend bodes well for a
slowing U.S. economy and should be well accepted by the equity markets.
15
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ALL AMERICAN EQUITY FUND
---------------------------------------------------------------------------
CURRENT OUTLOOK
We are strong proponents of the soft landing theory for the U.S. economy. We
believe that the sequence of interest rate increases started a year ago is
slowing down an overheated U.S. economy that would otherwise be susceptible to
inflationary pressures.
Recovery in Europe and Asia continues, and we expect the flow of goods and
information from China to improve after its pending introduction into the World
Trade Organization (WTO) in 2000. We remain selectively invested in the U.S.
equity market and believe that certain sectors should outgrow the rest of the
investment universe: energy, technology, healthcare and utilities.
The fund is changing to accommodate the new pace and volume of volatility, and
the focus is shifting toward more earnings-driven performance. In particular,
the All American Equity Fund now uses models based on earnings growth and a
shift to high technology and energy-related stocks; however, any significant
change in sector earnings would lead to a change in the fund's investments.
Information technology should continue to propel world economic growth, and we
anticipate more investments in this area. Among the highest growth areas are
networking, semiconductors and semiconductor equipment and cellular technology.
Utilities attract our attention due to their exposure to technology. Old economy
caterpillars are turning into new economy butterflies through investments in
cable and fiber optics technologies. Healthcare issues should appreciate as
aging baby boomers demand newer drugs and services that should extend average
life span.
16
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ALL AMERICAN EQUITY FUND
---------------------------------------------------------------------------
TOP 10 HOLDINGS BASED ON TOTAL INVESTMENTS
---------------------------------------------------------------------
GENERAL ELECTRIC CO. 7.28%
HOUSEHOLD APPLIANCES
---------------------------------------------------------------------
INTEL CORP. 5.15%
ELECTRONICS & COMPONENTS
---------------------------------------------------------------------
ORACLE CORP. 4.10%
DATA PROCESSING & SOFTWARE
---------------------------------------------------------------------
PFIZER, INC. 3.74%
PHARMACEUTICALS
---------------------------------------------------------------------
WAL-MART STORES, INC. 3.64%
RETAIL
---------------------------------------------------------------------
CISCO SYSTEMS, INC. 3.58%
COMPUTERS & OFFICE EQUIPMENT
---------------------------------------------------------------------
AMERICAN INTERNATIONAL GROUP 2.65%
INSURANCE
---------------------------------------------------------------------
FANNIE MAE 2.59%
FINANCIAL SERVICES
---------------------------------------------------------------------
JOHNSON & JOHNSON CO. 2.30%
HEALTHCARE & EQUIPMENT
---------------------------------------------------------------------
CITIGROUP, INC. 2.22%
BANKS
---------------------------------------------------------------------
TOP 5 INDUSTRIES BASED ON TOTAL INVESTMENTS
---------------------------------------------------------------------
TELECOMMUNICATIONS .......................................... 13.26%
PHARMACEUTICALS ............................................. 11.79%
COMPUTERS & OFFICE EQUIPMENT ................................ 9.98%
ELECTRONICS & COMPONENTS .................................... 7.84%
HOUSEHOLD APPLIANCES ........................................ 7.28%
17
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REAL ESTATE FUND
---------------------------------------------------------------------------
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The Real Estate Fund seeks a total return through a combination of capital
appreciation and income. The fund predominantly invests in companies that derive
at least 50 percent of their revenues from the ownership, construction,
management or sale of residential, commercial or industrial real estate.
PERFORMANCE
[GRAPHIC: Linear graph plotted from data in table shown below]
REAL ESTATE FUND
--------------------------------------------------------------------
DOW JONES
EQUITY
REAL S&P REIT TOTAL
ESTATE FUND 500 INDEX RETURN INDEX
------------- ------------- -------------
06/29/90 ........ $ 10,000.00 $ 10,000.00 $ 10,000.00
07/31/90 ........ $ 9,629.19 $ 9,968.05 $ 9,835.64
08/31/90 ........ $ 8,708.13 $ 9,068.14 $ 9,038.99
09/28/90 ........ $ 8,074.16 $ 8,627.47 $ 8,381.51
10/31/90 ........ $ 7,727.27 $ 8,590.99 $ 8,094.31
11/30/90 ........ $ 8,205.74 $ 9,145.22 $ 8,634.16
12/31/90 ........ $ 8,672.25 $ 9,399.72 $ 8,566.07
01/31/91 ........ $ 9,241.33 $ 9,808.05 $ 9,531.04
02/28/91 ........ $ 10,181.54 $ 10,508.61 $ 9,816.92
03/28/91 ........ $ 10,861.96 $ 10,762.83 $ 10,713.58
04/30/91 ........ $ 11,220.73 $ 10,788.42 $ 10,927.57
05/31/91 ........ $ 11,369.18 $ 11,252.23 $ 11,056.93
06/28/91 ........ $ 10,923.82 $ 10,737.12 $ 10,774.23
07/31/91 ........ $ 10,948.56 $ 11,237.15 $ 10,982.51
08/30/91 ........ $ 10,923.82 $ 11,502.60 $ 10,896.61
09/30/91 ........ $ 11,431.04 $ 11,310.03 $ 11,167.86
10/31/91 ........ $ 11,344.44 $ 11,461.75 $ 10,989.68
11/29/91 ........ $ 11,233.10 $ 11,001.19 $ 10,968.46
12/31/91 ........ $ 13,472.30 $ 12,257.23 $ 11,821.26
01/31/92 ........ $ 14,554.10 $ 12,029.09 $ 12,412.18
02/28/92 ........ $ 14,453.47 $ 12,184.82 $ 12,097.84
03/31/92 ........ $ 14,076.10 $ 11,948.12 $ 11,909.46
04/30/92 ........ $ 13,572.93 $ 12,298.55 $ 11,869.67
05/29/92 ........ $ 13,648.40 $ 12,358.69 $ 12,383.11
06/30/92 ........ $ 12,981.71 $ 12,174.89 $ 12,232.97
07/31/92 ........ $ 13,619.94 $ 12,671.86 $ 12,755.50
08/31/92 ........ $ 12,483.88 $ 12,412.99 $ 12,797.24
09/30/92 ........ $ 12,726.41 $ 12,558.91 $ 13,075.75
10/30/92 ........ $ 13,147.65 $ 12,602.01 $ 13,092.03
11/30/92 ........ $ 13,505.06 $ 13,029.94 $ 13,378.84
12/31/92 ........ $ 14,105.00 $ 13,189.79 $ 13,758.21
01/29/93 ........ $ 14,467.00 $ 13,299.95 $ 14,540.94
02/26/93 ........ $ 14,324.79 $ 13,481.16 $ 15,410.62
03/31/93 ........ $ 14,829.00 $ 13,765.42 $ 16,738.07
04/30/93 ........ $ 13,924.00 $ 13,432.70 $ 16,109.29
05/28/93 ........ $ 13,743.00 $ 13,791.14 $ 15,716.97
06/30/93 ........ $ 14,208.43 $ 13,831.39 $ 16,355.11
07/30/93 ........ $ 14,143.61 $ 13,775.70 $ 16,600.85
08/31/93 ........ $ 14,506.60 $ 14,297.24 $ 16,964.47
09/30/93 ........ $ 15,465.93 $ 14,187.60 $ 17,806.58
10/29/93 ........ $ 15,167.76 $ 14,480.88 $ 17,432.52
11/30/93 ........ $ 14,039.90 $ 14,342.86 $ 16,458.48
12/31/93 ........ $ 14,130.65 $ 14,516.27 $ 16,449.80
01/31/94 ........ $ 14,580.08 $ 15,009.31 $ 16,885.25
02/28/94 ........ $ 14,791.57 $ 14,602.30 $ 17,627.65
03/31/94 ........ $ 13,601.90 $ 13,966.90 $ 16,995.56
04/29/94 ........ $ 13,813.40 $ 14,145.84 $ 17,240.80
05/31/94 ........ $ 13,641.56 $ 14,377.08 $ 17,604.54
06/30/94 ........ $ 13,112.82 $ 14,025.26 $ 17,253.71
07/29/94 ........ $ 12,953.23 $ 14,485.47 $ 17,135.96
08/31/94 ........ $ 13,166.01 $ 15,078.00 $ 17,155.97
09/30/94 ........ $ 12,806.94 $ 14,709.59 $ 16,907.80
10/31/94 ........ $ 12,235.08 $ 15,039.58 $ 16,264.79
11/30/94 ........ $ 11,663.23 $ 14,492.54 $ 15,675.71
12/30/94 ........ $ 12,487.76 $ 14,707.23 $ 17,008.37
01/31/95 ........ $ 12,070.16 $ 15,088.37 $ 16,532.97
02/28/95 ........ $ 12,541.65 $ 15,675.81 $ 16,894.43
03/31/95 ........ $ 12,393.47 $ 16,137.64 $ 16,924.44
04/28/95 ........ $ 12,474.29 $ 16,612.48 $ 16,820.03
05/31/95 ........ $ 13,026.61 $ 17,275.44 $ 17,545.10
06/30/95 ........ $ 13,255.62 $ 17,676.00 $ 17,895.84
07/31/95 ........ $ 13,499.09 $ 18,261.92 $ 18,125.08
08/31/95 ........ $ 13,877.82 $ 18,307.50 $ 18,301.41
09/29/95 ........ $ 14,121.29 $ 19,079.67 $ 18,682.29
10/31/95 ........ $ 13,810.19 $ 19,011.51 $ 18,201.56
11/30/95 ........ $ 13,986.03 $ 19,845.14 $ 18,371.96
12/29/95 ........ $ 14,851.70 $ 20,227.40 $ 19,540.61
01/31/96 ........ $ 14,920.59 $ 20,915.05 $ 19,833.45
02/29/96 ........ $ 14,906.81 $ 21,109.63 $ 20,034.38
03/29/96 ........ $ 15,072.14 $ 21,312.87 $ 20,033.24
04/30/96 ........ $ 15,209.91 $ 21,626.80 $ 20,014.88
05/31/96 ........ $ 15,499.23 $ 22,183.59 $ 20,518.48
06/28/96 ........ $ 15,554.34 $ 22,268.17 $ 20,901.53
07/31/96 ........ $ 15,497.62 $ 21,284.91 $ 20,978.11
08/30/96 ........ $ 16,149.85 $ 21,734.55 $ 21,800.85
09/30/96 ........ $ 16,617.76 $ 22,956.74 $ 22,258.16
10/31/96 ........ $ 17,057.31 $ 23,589.65 $ 22,886.73
11/29/96 ........ $ 17,752.08 $ 25,371.18 $ 23,951.55
12/31/96 ........ $ 19,538.63 $ 24,868.59 $ 26,579.24
01/31/97 ........ $ 19,767.32 $ 26,421.43 $ 26,765.40
02/28/97 ........ $ 19,753.02 $ 26,628.86 $ 26,682.13
03/31/97 ........ $ 19,810.20 $ 25,536.76 $ 26,728.77
04/30/97 ........ $ 19,081.25 $ 27,059.92 $ 25,897.72
05/30/97 ........ $ 19,595.80 $ 28,706.19 $ 26,662.23
06/30/97 ........ $ 20,600.60 $ 29,991.52 $ 28,075.32
07/31/97 ........ $ 21,498.80 $ 32,376.57 $ 28,828.94
08/29/97 ........ $ 21,339.44 $ 30,564.13 $ 28,723.96
09/30/97 ........ $ 23,411.09 $ 32,237.08 $ 31,446.68
10/31/97 ........ $ 22,657.77 $ 31,161.66 $ 30,501.23
11/28/97 ........ $ 22,990.97 $ 32,603.02 $ 31,141.46
12/31/97 ........ $ 23,305.34 $ 33,162.53 $ 31,913.52
01/30/98 ........ $ 22,930.41 $ 33,528.97 $ 31,621.09
02/27/98 ........ $ 22,660.47 $ 35,945.82 $ 31,013.32
03/31/98 ........ $ 23,200.36 $ 37,785.07 $ 31,734.77
04/30/98 ........ $ 22,225.55 $ 38,165.03 $ 30,561.69
05/29/98 ........ $ 21,775.64 $ 37,509.94 $ 30,312.65
06/30/98 ........ $ 20,887.82 $ 39,032.45 $ 30,281.17
07/31/98 ........ $ 20,139.65 $ 38,617.87 $ 28,178.09
08/31/98 ........ $ 18,139.42 $ 33,040.27 $ 25,477.79
09/30/98 ........ $ 18,734.91 $ 35,156.96 $ 27,116.81
10/30/98 ........ $ 18,658.57 $ 38,014.12 $ 26,637.97
11/30/98 ........ $ 19,223.51 $ 40,317.13 $ 27,005.73
12/31/98 ........ $ 19,030.50 $ 42,638.88 $ 26,500.46
01/29/99 ........ $ 18,849.26 $ 44,421.22 $ 25,863.74
02/26/99 ........ $ 18,144.43 $ 43,040.86 $ 25,661.31
03/31/99 ........ $ 18,124.29 $ 44,762.42 $ 25,465.20
04/30/99 ........ $ 19,755.47 $ 46,495.82 $ 28,118.95
05/28/99 ........ $ 19,836.03 $ 45,399.43 $ 28,615.54
06/30/99 ........ $ 19,125.15 $ 47,916.97 $ 28,035.66
07/30/99 ........ $ 18,038.73 $ 46,423.01 $ 27,172.16
08/31/99 ........ $ 17,608.26 $ 46,193.17 $ 26,870.62
09/30/99 ........ $ 17,177.79 $ 44,928.40 $ 25,691.88
10/29/99 ........ $ 16,583.33 $ 47,770.28 $ 25,149.96
11/30/99 ........ $ 16,111.86 $ 48,741.30 $ 24,644.94
12/31/99 ........ $ 16,870.31 $ 51,610.27 $ 25,352.39
01/31/00 ........ $ 16,583.33 $ 48,983.13 $ 25,529.52
02/29/00 ........ $ 16,132.36 $ 47,998.17 $ 25,062.45
03/31/00 ........ $ 16,788.32 $ 52,640.54 $ 25,930.16
04/28/00 ........ $ 17,505.76 $ 51,019.44 $ 27,736.23
05/31/00 ........ $ 17,628.76 $ 49,901.34 $ 27,978.72
06/30/00 ........ $ 18,245.76 $ 51,095.66 $ 28,694.61
-----------------------------------------------------------------------
AVERAGE ANNUAL PERFORMANCE For the Periods Ended
June 30, 2000
-----------------------------------------------------------------------
TEN YEAR FIVE YEAR ONE YEAR
-------- --------- --------
Real Estate Fund 6.20% 6.60% (4.60)%
S&P 500 Index 17.72% 23.65% 6.63 %
Dow Jones Equity REIT
Total Return Index 11.12% 9.90% 2.35 %
Past performance is not predictive of future results. Investment return
and principal value may fluctuate so that shares, when redeemed, may be
worth more or less than their original value. The S&P 500 Index is an
unmanaged but commonly used measure of common stock total return
performance. The Dow Jones Equity REIT Total Return Index is an index
comprised of REITs traded publicly on the New York, American and Nasdaq
Stock Exchanges. The components of the index use the equity investment
structure and also reinvest all regular cash dividends.
18
<PAGE>
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REAL ESTATE FUND
---------------------------------------------------------------------------
THE YEAR IN REVIEW - ECONOMIC AND
POLITICAL ISSUES THAT AFFECTED THE FUND
Real Estate Investment Trust (REIT) securities continue to be priced
inexpensively on the basis of traditional valuation parameters such as cash flow
multiples, dividend yield and net asset value, even as earnings fundamentals
have held up well. The U.S. real estate markets moved to a state of healthy
equilibrium, yet the stock market continued to place high values on technology
and other high-growth companies while undervaluing REITs.
INVESTMENT HIGHLIGHTS
The fund was overweighted in the residential sector in anticipation of an
economic slowdown precipitated by rising interest rates.
The fund was also overweighted in the office sector, focusing on companies that
are national in scale or are focused on supply-constrained markets. The fund
remained underweighted in retail as we continue to assess the impact of
e-commerce and the Internet. Earlier fears of the Internet dominating the retail
landscape appear to be abating; it appears as if the bricks and mortar retailers
will survive. Indeed they should be able to gain the upper hand over Internet
retailers, as they can offer both Internet access and a physical location for
pick-ups and returns.
Geographically, the fund was invested in the Northeast and West Coast markets in
the U.S., specifically Boston, New York, Washington and San Francisco.
CURRENT OUTLOOK
We believe the real estate sector has been overbuilt and growth prospects appear
to be more attractive in other sectors. Therefore, during August 2000 the
shareholders voted to terminate the fund.
19
<PAGE>
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REAL ESTATE FUND
---------------------------------------------------------------------------
---------------------------------------------------------------------
TOP 10 HOLDINGS BASED ON TOTAL INVESTMENTS
---------------------------------------------------------------------
POST PROPERTIES, INC. 5.35%
RESIDENTIAL PROPERTIES
---------------------------------------------------------------------
EQUITY RESIDENT PROPERTY TRUST 4.97%
RESIDENTIAL PROPERTIES
---------------------------------------------------------------------
TRIZEC HAHN CORP. 4.91%
OFFICE/INDUSTRIAL
---------------------------------------------------------------------
AVALONBAY COMMUNITIES, INC. 4.89%
RESIDENTIAL PROPERTIES
---------------------------------------------------------------------
BOSTON PROPERTIES, INC. 4.87%
OFFICE/INDUSTRIAL
---------------------------------------------------------------------
EQUITY OFFICE PROPERTIES TRUST 4.47%
OFFICE/INDUSTRIAL
---------------------------------------------------------------------
SPIEKER PROPERTIES, INC. 4.14%
OFFICE/INDUSTRIAL
---------------------------------------------------------------------
AMB PROPERTY CORP. 4.11%
OFFICE/INDUSTRIAL
---------------------------------------------------------------------
STARWOOD HOTELS & RESORTS WORLDWIDE, INC. 4.11%
HOTELS & LODGING PROPERTIES
---------------------------------------------------------------------
APARTMENT INVESTMENT & MANAGEMENT CO. 3.90%
RESIDENTIAL PROPERTIES
---------------------------------------------------------------------
TOP 5 INDUSTRIES BASED ON TOTAL INVESTMENTS
---------------------------------------------------------------------
OFFICE/INDUSTRIAL .......................................... 42.25%
RESIDENTIAL PROPERTIES ..................................... 36.28%
HOTELS & LODGING PROPERTIES ................................ 6.75%
DIVERSIFIED ................................................ 6.42%
RETAIL PROPERTIES .......................................... 4.38%
20
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REAL ESTATE FUND
---------------------------------------------------------------------------
---------------------------------------------------------------------
PORTFOLIO PROFILE June 30, 2000
---------------------------------------------------------------------
COUNTRY DISTRIBUTION % OF INVESTMENTS
U.S. 86.64%
Canada 12.62%
Other Foreign 0.74%
NUMBER OF SECURITIES 39
21
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CHINA REGION OPPORTUNITY FUND
---------------------------------------------------------------------------
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The China Region Opportunity Fund seeks capital appreciation by focusing on the
economic growth in the greater China region, including China, Hong Kong,
Singapore, Taiwan and other Asian countries. The fund emphasizes long-term
growth over current income.
PERFORMANCE
[GRAPHIC: Linear graph plotted from data in table shown below]
CHINA REGION OPPORTUNITY FUND
-----------------------------------------------------------------------
INTERNATIONAL MORGAN
CHINA REGION FINANCE STANLEY
OPPORTUNITY CORPORATION HANG SENG FAR EAST EX
FUND CHINA INDEX 100 INDEX JAPAN INDEX
---------- ---------- ---------- -----------
02/09/94 $10,000.00 $10,000.00 $10,000.00 $10,000.00
02/28/94 $ 9,465.73 $ 9,499.49 $ 9,062.60 $ 9,421.15
03/31/94 $ 8,155.24 $ 7,780.03 $ 7,860.97 $ 8,513.13
04/29/94 $ 8,094.61 $ 7,383.05 $ 7,805.39 $ 8,953.15
05/31/94 $ 8,417.99 $ 7,811.94 $ 8,316.83 $ 9,265.82
06/30/94 $ 7,852.07 $ 6,846.73 $ 7,624.61 $ 8,985.90
07/29/94 $ 8,267.47 $ 7,713.08 $ 8,255.24 $ 9,551.17
08/31/94 $ 8,774.06 $ 8,243.17 $ 8,644.01 $10,206.26
09/30/94 $ 8,834.85 $ 8,451.00 $ 8,288.69 $10,319.16
10/31/94 $ 8,662.41 $ 8,348.25 $ 8,397.52 $10,284.69
11/30/94 $ 7,698.79 $ 7,095.04 $ 7,370.28 $ 9,486.77
12/30/94 $ 7,191.63 $ 6,089.36 $ 7,130.69 $ 9,466.78
01/31/95 $ 6,430.88 $ 5,174.75 $ 6,392.13 $ 8,440.49
02/28/95 $ 6,735.18 $ 5,760.10 $ 7,249.50 $ 9,004.44
03/31/95 $ 6,714.89 $ 5,854.28 $ 7,476.02 $ 9,112.30
04/28/95 $ 6,441.02 $ 5,129.60 $ 7,278.68 $ 8,877.16
05/31/95 $ 7,019.19 $ 5,897.87 $ 8,189.57 $ 9,512.80
06/30/95 $ 6,846.75 $ 5,744.53 $ 8,014.73 $ 9,350.97
07/31/95 $ 7,072.58 $ 6,006.85 $ 8,229.65 $ 9,405.97
08/31/95 $ 6,990.46 $ 5,728.96 $ 7,991.51 $ 8,901.57
09/29/95 $ 6,939.14 $ 5,605.20 $ 8,397.60 $ 9,159.26
10/31/95 $ 6,692.41 $ 5,291.51 $ 8,516.04 $ 9,004.35
11/30/95 $ 6,312.05 $ 4,786.33 $ 8,542.98 $ 8,778.34
12/29/95 $ 6,178.40 $ 4,534.13 $ 8,769.37 $ 9,132.65
01/31/96 $ 6,642.56 $ 4,977.82 $ 9,889.16 $ 9,552.60
02/29/96 $ 6,766.33 $ 5,304.74 $ 9,685.44 $ 9,522.54
03/29/96 $ 6,580.67 $ 5,025.30 $ 9,538.77 $ 9,676.90
04/30/96 $ 6,549.73 $ 4,962.25 $ 9,545.15 $10,378.22
05/31/96 $ 6,621.93 $ 5,097.69 $ 9,806.49 $10,098.64
06/28/96 $ 6,704.44 $ 5,109.36 $ 9,594.22 $10,017.51
07/31/96 $ 6,621.03 $ 4,970.81 $ 9,298.69 $ 9,301.47
08/30/96 $ 6,631.46 $ 5,142.06 $ 9,714.46 $ 9,531.97
09/30/96 $ 6,662.74 $ 5,120.26 $10,361.63 $ 9,748.84
10/31/96 $ 6,683.69 $ 5,071.22 $10,862.31 $ 9,543.07
11/29/96 $ 7,207.49 $ 5,548.38 $11,660.06 $10,006.17
12/31/96 $ 7,898.91 $ 6,389.04 $11,710.13 $ 9,884.28
01/31/97 $ 7,877.95 $ 6,333.00 $11,597.25 $10,040.64
02/28/97 $ 8,097.95 $ 6,430.29 $11,664.23 $10,124.49
03/31/97 $ 7,982.71 $ 6,302.64 $10,911.72 $ 9,644.52
04/30/97 $ 8,454.13 $ 7,219.58 $11,232.94 $ 9,490.70
05/30/97 $ 8,894.13 $ 7,121.51 $12,847.38 $ 9,858.79
06/30/97 $ 9,009.36 $ 7,205.57 $13,229.53 $10,194.22
07/31/97 $ 9,679.83 $ 8,320.23 $14,247.13 $10,267.52
08/29/97 $ 9,795.06 $ 9,643.50 $12,305.41 $ 8,743.24
09/30/97 $ 9,239.83 $ 7,651.59 $13,101.14 $ 8,472.18
10/31/97 $ 7,018.92 $ 6,274.62 $ 9,248.51 $ 6,396.05
11/28/97 $ 6,337.98 $ 4,963.03 $ 9,164.19 $ 6,016.59
12/31/97 $ 6,125.32 $ 4,863.39 $ 9,334.68 $ 5,726.52
01/30/98 $ 4,784.09 $ 3,457.62 $ 8,054.62 $ 5,343.67
02/27/98 $ 6,114.76 $ 4,755.97 $ 9,994.49 $ 6,498.68
03/31/98 $ 6,114.76 $ 4,464.86 $10,027.56 $ 6,331.44
04/30/98 $ 5,618.40 $ 3,914.53 $ 9,039.49 $ 5,706.62
05/29/98 $ 4,984.74 $ 3,614.85 $ 7,777.96 $ 4,852.63
06/30/98 $ 4,319.41 $ 3,234.22 $ 7,437.18 $ 4,360.20
07/31/98 $ 3,654.07 $ 2,512.65 $ 6,908.84 $ 4,277.05
08/31/98 $ 3,009.85 $ 1,952.21 $ 6,333.27 $ 3,593.09
09/30/98 $ 3,654.07 $ 2,601.39 $ 6,862.93 $ 3,935.15
10/30/98 $ 4,150.43 $ 2,583.48 $ 8,840.36 $ 4,889.98
11/30/98 $ 4,277.16 $ 2,621.62 $ 9,055.72 $ 5,284.25
12/31/98 $ 4,087.07 $ 2,388.11 $ 8,747.77 $ 5,316.49
01/29/99 $ 3,576.18 $ 2,084.53 $ 8,276.21 $ 5,175.43
02/26/99 $ 3,554.90 $ 2,102.44 $ 8,582.29 $ 5,174.13
03/31/99 $ 3,938.06 $ 2,204.41 $ 9,525.71 $ 5,680.92
04/30/99 $ 4,757.60 $ 2,833.35 $11,607.19 $ 6,876.87
05/28/99 $ 4,640.52 $ 2,755.51 $10,574.65 $ 6,719.63
06/30/99 $ 5,939.02 $ 3,771.31 $11,780.37 $ 7,900.41
07/30/99 $ 5,641.00 $ 3,620.30 $11,479.79 $ 7,504.92
08/31/99 $ 5,672.93 $ 3,674.79 $11,737.40 $ 7,827.77
09/30/99 $ 5,374.92 $ 3,489.53 $11,084.89 $ 7,198.24
10/29/99 $ 5,321.70 $ 3,484.08 $11,540.81 $ 7,558.14
11/30/99 $ 5,896.44 $ 4,462.52 $13,386.58 $ 8,132.76
12/31/99 $ 6,364.75 $ 4,901.53 $14,766.32 $ 8,784.91
01/31/00 $ 6,396.68 $ 4,940.45 $13,521.64 $ 8,943.39
02/29/00 $ 6,822.42 $ 6,195.22 $14,946.82 $ 8,587.96
03/31/00 $ 7,088.51 $ 6,234.14 $15,153.23 $ 8,908.34
04/28/00 $ 6,364.75 $ 5,308.63 $13,510.29 $ 8,144.97
05/31/00 $ 6,024.17 $ 5,370.90 $12,809.12 $ 7,693.73
06/30/00 $ 6,503.12 $ 6,188.22 $14,064.38 $ 7,943.71
-----------------------------------------------------------------------
AVERAGE ANNUAL PERFORMANCE For the Periods Ended
June 30, 2000
-----------------------------------------------------------------------
INCEPTION FIVE YEAR ONE YEAR
--------- --------- --------
China Region Opportunity Fund
(Inception 2/10/94) (6.51)% (1.02)% 9.50%
Hang Seng 100 Index 5.46 % 11.90 % 19.39%
Morgan Stanley Far East ex
Japan Index (3.52)% (3.21)% 0.55%
International Finance Corporation
China Index (7.21)% 1.50 % 64.09%
Past performance is not predictive of future results. Investment return
and principal value may fluctuate so that shares, when redeemed, may be
worth more or less than their original value. The Hang Seng 100 Index
is a capitalization-weighted index. The index is comprised of the 100
highest companies in terms of market capitalization and turnover listed
on The Stock Exchange of Hong Kong Limited. The Morgan Stanley Capital
Far East ex Japan Index is one index in a series representing both the
developed and the emerging markets for a particular region. The
International Finance Corporation China Index is one global index in a
series representing a large part of the market and shows trends in the
markets from the perspective of local investors.
22
<PAGE>
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CHINA REGION OPPORTUNITY FUND
---------------------------------------------------------------------------
THE YEAR IN REVIEW - ECONOMIC AND
POLITICAL ISSUES THAT AFFECTED THE FUND
Macroeconomic conditions have improved significantly in Asia. Most Asian
countries have recovered from the financial crisis that began in 1997. In
calendar year 1999, China's economy grew by 7.1 percent. Other Asian countries
also had a good year. Korea led the group by posting a 10.7 percent gross
domestic product (GDP) growth. Hong Kong's economy recovered slower than its
peers, expanding by 2.9 percent, but its recovery accelerated in the first half
of 2000. Hong Kong's economy grew by a stunning 14.3 percent in the first
quarter of 2000. High demand from the U.S. helped to fuel the export growth in
these countries.
Taiwan's presidential election drew investors' attention. Although the new
president was believed to be in favor of the independence of Taiwan, he adopted
a pragmatic approach, promising not to declare the independence of Taiwan and to
promote more economic cooperation between mainland China and Taiwan.
The most important event of the last 12 months was China's bid to join the World
Trade Organization (WTO). After 14 years of painful negotiations, China finally
reached agreements with the U.S., Europe and many other countries. The House of
Representatives of the U.S. Congress approved permanent normal trade relations
with China, clearing the last hurdle for China to join the WTO. We believe this
will have a profoundly positive impact on China's economy.
INVESTMENT HIGHLIGHTS
Stock markets in the greater China region continued to recover from the Asian
financial crisis. The strong performance of the Nasdaq in the second half of
1999 encouraged investors to seek the same kind of return in Asia's technology
sector. Many telecommunications and technology companies have been enjoying high
growth in revenues and profits. China's huge markets helped these companies to
achieve high valuations. But this sector is also full of uncertainty and
volatility. When the Nasdaq slumped in the first half of 2000, China's
technology companies also suffered heavy losses. Most of the new stocks on Hong
Kong's GEM (Growth Enterprise Market) Board are trading below their initial
public offering (IPO) prices. Blue-chip technology and telecommunication firms
like China Telecom and Hutchison Whampoa fared better.
23
<PAGE>
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CHINA REGION OPPORTUNITY FUND
---------------------------------------------------------------------------
Interest rates were a driving factor in both the U.S. and the greater China
region. The Federal Reserve started a tightening cycle in June 1999. The rate
hikes put a lot of pressure on stocks, especially the technology and financial
stocks. Hong Kong's interest rate is tied to its U.S. counterpart due to its
currency system. Both banking and property stocks performed poorly because of
the interest rate concerns. The new Hong Kong government has been adopting
policies to lower the sky-high housing prices in Hong Kong. With the help of the
financial crisis, they successfully achieved their goal. While low property
prices will help the general economy, they are not good for the property
developers.
CURRENT OUTLOOK
The overall macroeconomic outlook is positive for the rest of 2000 and 2001.
Exports are strong. Inflation remains low. China continues to reform its economy
and open up its markets, especially with the help of the WTO. China is not the
only country that is having structural changes in its economy--Korea is another
good example. With these structural changes in place, the region's economy will
have sustainable growth. The region's stock markets will also enjoy sustainable
growth.
One near-term risk is the U.S. economy. If the U.S. economy has a so-called hard
landing, rather than a soft landing, many Asian economies will likely see their
exports decrease. Electronics are becoming an increasingly bigger part of Asia's
total exports. While this is a good indication that the Asian countries are
moving from low-end products to high-end products, it also shows that Asian
economies are more tied to worldwide technology and telecommunications sectors.
If electronic goods orders from the U.S. slow down, many Asian economies will
likely slow down as well. However, we expect any slowdown will be temporary.
We believe the technology and telecommunications sectors will continue to lead
the way. The transportation sector will benefit from the increased traffic in
and out of Asia. The banking and property sectors of Hong Kong are likely to lag
the general market unless they can find other sources of revenue. Mainland
Chinese companies are becoming a larger part of the stock market in Hong Kong.
Once China decides to open up its domestic stock markets to foreign investors,
we expect people will find more investment opportunities.
24
<PAGE>
---------------------------------------------------------------------------
CHINA REGION OPPORTUNITY FUND
---------------------------------------------------------------------------
---------------------------------------------------------------------
TOP 10 HOLDINGS BASED ON TOTAL INVESTMENTS
---------------------------------------------------------------------
LI & FUNG LTD. 12.81%
APPAREL
---------------------------------------------------------------------
CHINA TELECOM LTD. 6.74%
TELECOMMUNICATIONS
---------------------------------------------------------------------
HUTCHISON WHAMPOA LTD. 6.14%
CONGLOMERATES
---------------------------------------------------------------------
HSBC HOLDINGS LTD. 5.92%
BANKING & FINANCIAL SERVICES
---------------------------------------------------------------------
ASM PACIFIC TECHNOLOGY LTD. 5.39%
ELECTRONIC EQUIPMENT
---------------------------------------------------------------------
MERENDON INTERNATIONAL, INC. 5.16%
INTERNET
---------------------------------------------------------------------
CHEUNG KONG HOLDINGS LTD. 3.12%
REAL ESTATE DEVELOPERS
---------------------------------------------------------------------
DRAGON PHARMACEUTICALS, INC. 3.03%
PHARMACEUTICALS
---------------------------------------------------------------------
CHINA INTERNATIONAL MARINE CONTAINER 2.98%
WATER TRANSPORTATION & SERVICES
---------------------------------------------------------------------
CITIC PACIFIC LTD. 2.70%
CONGLOMERATES
---------------------------------------------------------------------
TOP 5 INDUSTRIES BASED ON TOTAL INVESTMENTS
---------------------------------------------------------------------
APPAREL .................................................... 15.46%
CONGLOMERATES .............................................. 11.71%
ELECTRONIC EQUIPMENT ....................................... 10.71%
TELECOMMUNICATIONS ......................................... 10.54%
INTERNET ................................................... 6.46%
25
<PAGE>
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CHINA REGION OPPORTUNITY FUND
---------------------------------------------------------------------------
---------------------------------------------------------------------
PORTFOLIO PROFILE June 30, 2000
---------------------------------------------------------------------
COUNTRY DISTRIBUTION % OF INVESTMENTS
Hong Kong 60.43%
U.S. 12.95%
Republic of China 10.90%
United Kingdom 5.92%
Canada 4.36%
Other Foreign 5.44%
NUMBER OF SECURITIES 66
26
<PAGE>
---------------------------------------------------------------------------
GLOBAL RESOURCES FUND
---------------------------------------------------------------------------
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The Global Resources Fund is a diversified natural resources fund with the
principal objective of achieving long-term growth of capital, while providing
protection against inflation and monetary instability. The fund invests in
companies involved in the exploration, production and processing of petroleum,
natural gas, industrial commodities, metals, minerals, paper and forest products
from around the globe.
PERFORMANCE
[GRAPHIC: Linear graph plotted from data in table shown below]
GLOBAL RESOURCES FUND
--------------------------------------------------------------------
MICROPAL US:
EQUITY
GLOBAL NATURAL
RESOURCES RESOURCES S&P
FUND FUND INDEX 500 INDEX
---------- ---------- ----------
06/29/90 ........... $10,000.00 $10,000.00 $10,000.00
07/31/90 ........... $10,776.55 $10,499.38 $ 9,968.05
08/31/90 ........... $10,618.07 $10,149.89 $ 9,068.14
09/28/90 ........... $10,459.59 $ 9,963.03 $ 8,627.47
10/31/90 ........... $ 9,524.56 $ 9,366.66 $ 8,590.99
11/30/90 ........... $ 9,540.41 $ 9,455.04 $ 9,145.22
12/31/90 ........... $ 9,857.37 $ 9,359.44 $ 9,399.72
01/31/91 ........... $ 9,207.06 $ 9,192.17 $ 9,808.05
02/28/91 ........... $ 9,634.89 $ 9,980.92 $10,508.61
03/28/91 ........... $ 9,532.21 $ 9,853.77 $10,762.83
04/30/91 ........... $ 9,634.89 $ 9,893.99 $10,788.42
05/31/91 ........... $10,148.30 $10,136.28 $11,252.23
06/28/91 ........... $ 9,857.37 $ 9,648.76 $10,737.12
07/31/91 ........... $10,285.21 $10,029.49 $11,237.15
08/30/91 ........... $10,199.64 $10,179.23 $11,502.60
09/30/91 ........... $10,182.53 $ 9,990.20 $11,310.03
10/31/91 ........... $10,473.45 $10,212.54 $11,461.75
11/29/91 ........... $10,131.19 $ 9,571.52 $11,001.19
12/31/91 ........... $10,353.66 $ 9,694.39 $12,257.23
01/31/92 ........... $10,407.03 $ 9,638.91 $12,029.09
02/28/92 ........... $10,513.77 $ 9,703.88 $12,184.82
03/31/92 ........... $10,229.13 $ 9,361.61 $11,948.12
04/30/92 ........... $10,371.45 $ 9,693.20 $12,298.55
05/29/92 ........... $10,620.51 $10,001.13 $12,358.69
06/30/92 ........... $10,282.50 $ 9,665.98 $12,174.89
07/31/92 ........... $10,407.03 $10,102.40 $12,671.86
08/31/92 ........... $10,104.60 $10,082.55 $12,412.99
09/30/92 ........... $10,086.81 $10,167.37 $12,558.91
10/30/92 ........... $ 9,962.28 $ 9,972.83 $12,602.01
11/30/92 ........... $ 9,926.71 $ 9,845.52 $13,029.94
12/31/92 ........... $10,069.02 $ 9,958.39 $13,189.79
01/29/93 ........... $ 9,854.03 $10,145.56 $13,299.95
02/26/93 ........... $10,033.19 $10,650.25 $13,481.16
03/31/93 ........... $10,481.10 $11,224.76 $13,765.42
04/30/93 ........... $10,660.27 $11,497.37 $13,432.70
05/28/93 ........... $10,803.60 $11,909.66 $13,791.14
06/30/93 ........... $10,929.01 $11,994.64 $13,831.39
07/30/93 ........... $11,054.43 $12,029.13 $13,775.70
08/31/93 ........... $11,412.75 $12,553.32 $14,297.24
09/30/93 ........... $11,359.01 $12,225.79 $14,187.60
10/29/93 ........... $11,860.66 $12,396.46 $14,480.88
11/30/93 ........... $11,323.17 $11,713.42 $14,342.86
12/31/93 ........... $11,932.33 $11,992.01 $14,516.27
01/31/94 ........... $12,501.41 $12,541.20 $15,009.31
02/28/94 ........... $12,060.83 $12,244.15 $14,602.30
03/31/94 ........... $11,363.25 $11,586.93 $13,966.90
04/29/94 ........... $11,106.25 $11,868.98 $14,145.84
05/31/94 ........... $11,106.25 $12,070.23 $14,377.08
06/30/94 ........... $10,537.17 $12,002.17 $14,025.26
07/29/94 ........... $10,849.24 $12,378.42 $14,485.47
08/31/94 ........... $11,179.68 $12,503.25 $15,078.00
09/30/94 ........... $11,620.25 $12,567.65 $14,709.59
10/31/94 ........... $11,436.68 $12,647.00 $15,039.58
11/30/94 ........... $10,775.81 $11,735.33 $14,492.54
12/30/94 ........... $10,775.81 $11,700.42 $14,707.23
01/31/95 ........... $10,213.76 $11,255.03 $15,088.37
02/28/95 ........... $10,330.05 $11,653.81 $15,675.81
03/31/95 ........... $10,620.76 $12,232.65 $16,137.64
04/28/95 ........... $10,911.48 $12,694.08 $16,612.48
05/31/95 ........... $11,047.15 $12,915.59 $17,275.44
06/30/95 ........... $11,163.43 $12,915.08 $17,676.00
07/31/95 ........... $11,473.53 $13,326.91 $18,261.92
08/31/95 ........... $11,647.96 $13,406.72 $18,307.50
09/29/95 ........... $11,609.19 $13,367.69 $19,079.67
10/31/95 ........... $11,085.91 $12,706.61 $19,011.51
11/30/95 ........... $11,202.19 $13,294.47 $19,845.14
12/29/95 ........... $11,744.86 $13,934.57 $20,227.40
01/31/96 ........... $12,176.95 $14,435.96 $20,915.05
02/29/96 ........... $12,314.43 $14,704.44 $21,109.63
03/29/96 ........... $13,001.84 $15,439.93 $21,312.87
04/30/96 ........... $13,767.80 $16,291.02 $21,626.80
05/31/96 ........... $13,983.85 $16,546.92 $22,183.59
06/28/96 ........... $13,708.88 $16,259.62 $22,268.17
07/31/96 ........... $13,119.68 $15,543.11 $21,284.91
08/30/96 ........... $13,591.04 $16,496.80 $21,734.55
09/30/96 ........... $14,140.97 $16,862.84 $22,956.74
10/31/96 ........... $14,808.74 $17,537.33 $23,589.65
11/29/96 ........... $15,594.35 $18,280.55 $25,371.18
12/31/96 ........... $15,751.47 $18,330.72 $24,868.59
01/31/97 ........... $16,329.91 $18,713.36 $26,421.43
02/28/97 ........... $15,440.00 $18,040.06 $26,628.86
03/31/97 ........... $15,328.76 $17,665.26 $25,536.76
04/30/97 ........... $14,928.30 $17,427.45 $27,059.92
05/30/97 ........... $16,352.16 $18,875.63 $28,706.19
06/30/97 ........... $16,307.66 $18,911.98 $29,991.52
07/31/97 ........... $17,687.03 $20,023.72 $32,376.57
08/29/97 ........... $18,665.93 $20,362.59 $30,564.13
09/30/97 ........... $20,312.27 $21,688.13 $32,237.08
10/31/97 ........... $19,244.38 $20,491.66 $31,161.66
11/28/97 ........... $16,151.93 $18,838.11 $32,603.02
12/31/97 ........... $15,317.64 $18,669.97 $33,162.53
01/30/98 ........... $13,498.99 $17,955.02 $33,528.97
02/27/98 ........... $13,806.36 $18,633.64 $35,945.82
03/31/98 ........... $13,780.75 $19,250.22 $37,785.07
04/30/98 ........... $13,422.14 $19,815.49 $38,165.03
05/29/98 ........... $12,218.25 $18,283.87 $37,509.94
06/30/98 ........... $11,449.80 $17,225.02 $39,032.45
07/31/98 ........... $10,553.29 $15,466.56 $38,617.87
08/31/98 ........... $ 8,862.71 $12,574.75 $33,040.27
09/30/98 ........... $ 9,810.46 $14,578.73 $35,156.96
10/30/98 ........... $10,169.07 $15,046.66 $38,014.12
11/30/98 ........... $ 9,887.30 $14,446.87 $40,317.13
12/31/98 ........... $ 9,417.75 $14,157.93 $42,638.88
01/29/99 ........... $ 8,952.34 $13,496.18 $44,421.22
02/26/99 ........... $ 8,870.21 $13,094.52 $43,040.86
03/31/99 ........... $ 9,746.28 $15,089.65 $44,762.42
04/30/99 ........... $11,361.53 $17,619.26 $46,495.82
05/28/99 ........... $10,813.99 $17,005.89 $45,399.43
06/30/99 ........... $10,978.25 $17,845.93 $47,916.97
07/30/99 ........... $11,005.63 $18,103.79 $46,423.01
08/31/99 ........... $10,868.74 $18,384.87 $46,193.17
09/30/99 ........... $10,485.46 $17,962.30 $44,928.40
10/29/99 ........... $10,266.45 $17,262.10 $47,770.28
11/30/99 ........... $10,293.82 $17,033.20 $48,741.30
12/31/99 ........... $10,786.61 $18,109.73 $51,610.27
01/31/00 ........... $10,430.71 $17,407.72 $48,983.13
02/29/00 ........... $ 9,855.79 $17,254.09 $47,998.17
03/31/00 ........... $10,923.50 $19,297.62 $52,640.54
04/28/00 ........... $10,759.24 $19,117.93 $51,019.44
05/31/00 ........... $11,306.78 $20,812.11 $49,901.34
06/30/00 ........... $10,622.35 $20,297.41 $51,095.66
-----------------------------------------------------------------------
AVERAGE ANNUAL PERFORMANCE For the Periods Ended
June 30, 2000
-----------------------------------------------------------------------
TEN YEAR FIVE YEAR ONE YEAR
-------- --------- --------
Global Resources Fund 0.61% (0.99)% (3.24)%
S&P 500 Index 17.72% 23.65 % 6.63 %
Micropal US: Equity Natural
Resources Fund Index 7.34% 9.46 % 13.74 %
Past performance is not predictive of future results. Investment return
and principal value may fluctuate so that shares, when redeemed, may be
worth more or less than their original value. The S&P 500 Index is an
unmanaged but commonly used measure of common stock total return
performance. The Micropal US: Equity Natural Resources Fund Index is
composed of funds that invest the majority of their portfolios in
equity shares of natural resource companies.
27
<PAGE>
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GLOBAL RESOURCES FUND
---------------------------------------------------------------------------
THE YEAR IN REVIEW - ECONOMIC AND
POLITICAL ISSUES THAT AFFECTED THE FUND
A positive outlook for global growth fueled a rise in basic materials in the
latter half of 1999. The strength shown by the S&P Basic Materials Index over
the early part of summer 1999 continued through August. The first interest rate
rise by the Federal Open Market Committee (FOMC) put a damper on the sector,
causing a decline in September. After a lackluster October and November,
December saw strong gains. The S&P Basic Materials Index rallied, hitting its
highs in the last few days of 1999. This rise was attributed to investors
seeking a safe haven for their money and hedging against any potential Y2K
issues.
Once the new year began, investors started taking profits in the basic materials
sector, which resulted in falling equity prices. A strong economy and the
outstanding gains being made in the technology sector grabbed the attention of
the market, resulting in capital flight from basic materials. For the first
three months of 2000, the S&P basic materials sector lost nearly 13 percent.
Interest rate hikes finally started taking effect at the end of March, signaled
by weakness in the broader market. The prognosis of a slowing economy, both
domestically and globally, exacted a heavy toll on the basic materials sector.
Not only were the losses from the first quarter not made up, but the S&P Basic
Materials Index lost another 14 percent for the second quarter.
For the period under review, commodity prices in the energy sector soared. Crude
oil prices rose from $19.36 to $32.45 per barrel, a gain of 67.6 percent, and
natural gas prices rose from $2.32 to close at $4.29 per BTU, a gain of 84.9
percent.
The staggering rise in crude and natural gas prices is a direct result of
increasing demand coupled with a tight supply environment for the commodities.
Currently the United States' crude oil and natural gas inventories are 20
percent below normal levels and are expected to remain low through the winter
season. Natural gas has been gaining momentum as the preferred fuel of choice
for utilities and industries because of governmental promotion of natural gas as
a cleaner burning fuel versus traditional fuel sources such as coal and crude
oil. Demand for crude oil continues to outpace available supply at this time.
Global demand for crude oil is expected to grow by 2.5 percent in 2000,
according to analysts. The fundamentals for high and sustainable oil and natural
gas prices remain strong.
28
<PAGE>
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GLOBAL RESOURCES FUND
---------------------------------------------------------------------------
Despite crude oil rallying 67.6 percent and natural gas prices rising 84.9
percent, energy-related stocks are trading at a discount to the market. For the
period under review, natural gas-related companies rose 28.0 percent, oil
equipment and services companies rose 20.5 percent and oil exploration and
production companies rose 9.4 percent, while major integrated oil companies and
refining and marketing companies declined by 5.3 percent.
CURRENT OUTLOOK
The fundamentals for the basic materials sector continue to improve. Although
demand is not growing as fast as it has in recent quarters, growth is still
positive. If this growth is coupled with extremely high capacity utilization and
very little new production, the fundamental outlook for the sector will be very
tight. This should result in strong commodity prices increasing the earnings of
the companies, which in turn should lead to higher equity prices.
We expect the upcoming year to be one of the strongest in the basic materials
and energy sectors in recent history. The improving economies of Asia and
Europe, along with the continued strength of the U.S., should drive commodity
consumption much higher. Analysts forecast commodity prices to remain high
despite the Organization of Petroleum Exporting Countries (OPEC) reaching a
consensus to increase oil supply by 708,000 barrels of oil per day. A tight
supply market for crude oil and natural gas for 2000 and 2001 should be
primarily responsible for higher sustainable prices for crude oil and natural
gas. This bodes well for profitability for energy-related stocks, especially
exploration and production companies.
The last few years of low demand have meant that both production capacity and
stockpiles are low and the anticipated rising demand should drive commodity
prices higher, thereby improving the earnings outlooks for all companies. The
S&P earnings outlook for 2000 is dominated by two sectors. Energy and basic
materials take the top two positions, with analysts' expectation that earnings
will grow at 74 percent and 50 percent, respectively.
29
<PAGE>
---------------------------------------------------------------------------
GLOBAL RESOURCES FUND
---------------------------------------------------------------------------
---------------------------------------------------------------------------
TOP 10 HOLDINGS BASED ON TOTAL INVESTMENTS
---------------------------------------------------------------------------
EXXON MOBIL CORP. 15.05%
PETROLEUM PRODUCTION & REFINING
---------------------------------------------------------------------
ENRON CORP. 6.32%
UTILITIES
---------------------------------------------------------------------
SCHLUMBERGER LTD. 6.22%
OIL & GAS EXTRACTION
---------------------------------------------------------------------
ALCOA, INC. 4.59%
METAL & MINERAL MINING
---------------------------------------------------------------------
CHEVRON CORP. 4.28%
PETROLEUM PRODUCTION & REFINING
---------------------------------------------------------------------
TEXACO, INC. 3.45%
PETROLEUM PRODUCTION & REFINING
---------------------------------------------------------------------
BAKER HUGHES, INC. 2.56%
OIL & GAS FIELD SERVICES
---------------------------------------------------------------------
PHILLIPS PETROLEUM CO. 2.56%
OIL & GAS EXTRACTION
---------------------------------------------------------------------
HALLIBURTON CO. 2.38%
OIL & GAS INTEGRATED
---------------------------------------------------------------------
DOW CHEMICAL CO. 2.28%
CHEMICALS & ALLIED PRODUCTS
---------------------------------------------------------------------------
---------------------------------------------------------------------------
TOP 5 INDUSTRIES BASED ON TOTAL INVESTMENTS
---------------------------------------------------------------------------
PETROLEUM PRODUCTION & REFINING 29.78%
OIL & GAS EXTRACTION 24.95%
UTILITIES 9.66%
METAL & MINERAL MINING 7.95%
OIL & GAS FIELD SERVICES 6.17%
30
<PAGE>
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GLOBAL RESOURCES FUND
---------------------------------------------------------------------------
---------------------------------------------------------------------------
PORTFOLIO PROFILE June 30, 2000
---------------------------------------------------------------------------
COUNTRY DISTRIBUTION % OF INVESTMENTS
U.S. 82.54%
Canada 9.26%
Netherlands 2.22%
France 1.77%
Other Foreign 4.21%
NUMBER OF SECURITIES 73
31
<PAGE>
---------------------------------------------------------------------------
GOLD FUNDS
---------------------------------------------------------------------------
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The World Gold Fund focuses on a variety of gold and precious metals companies,
including the smaller production and exploration companies. The fund seeks
long-term growth of capital, plus protection against inflation and monetary
instability.
The Gold Shares Fund's primary objective is capital appreciation and protection
against inflation and monetary instability. It also pursues current income as a
secondary objective. The fund focuses on the larger companies producing gold and
precious metals.
PERFORMANCE
---------------------------------------------------------------------------
WORLD GOLD FUND
---------------------------------------------------------------------------
[GRAPHIC: Linear graph plotted from data in table shown below]
PHILADELPHIA
TORONTO STOCK STOCK
EXCHANGE GOLD EXCHANGE
WORLD GOLD & PRECIOUS GOLD & S&P 500
FUND MINERALS INDEX SILVER INDEX INDEX
---------- ---------- ---------- ----------
06/29/90 $10,000.00 $10,000.00 $10,000.00 $10,000.00
07/31/90 $10,648.15 $10,777.65 $10,739.28 $ 9,968.05
08/31/90 $10,462.96 $10,757.02 $10,650.57 $ 9,068.14
09/28/90 $10,370.37 $10,718.66 $10,679.15 $ 8,627.47
10/31/90 $ 8,638.89 $ 8,990.63 $ 8,849.68 $ 8,590.99
11/30/90 $ 8,601.85 $ 8,759.49 $ 8,402.17 $ 9,145.22
12/31/90 $ 9,351.85 $ 9,587.08 $ 9,565.30 $ 9,399.72
01/31/91 $ 8,064.81 $ 8,040.26 $ 7,916.21 $ 9,808.05
02/28/91 $ 8,518.52 $ 8,771.31 $ 8,477.08 $10,508.61
03/28/91 $ 8,462.96 $ 8,714.11 $ 8,308.53 $10,762.83
04/30/91 $ 8,287.04 $ 8,255.89 $ 7,941.84 $10,788.42
05/31/91 $ 8,657.41 $ 8,528.71 $ 8,114.34 $11,252.23
06/28/91 $ 9,296.30 $ 9,021.87 $ 8,887.14 $10,737.12
07/31/91 $ 9,324.07 $ 8,957.64 $ 8,669.30 $11,237.15
08/30/91 $ 8,398.15 $ 8,005.11 $ 7,482.50 $11,502.60
09/30/91 $ 8,527.78 $ 7,876.50 $ 7,770.33 $11,310.03
10/31/91 $ 9,388.89 $ 8,652.19 $ 8,171.51 $11,461.75
11/29/91 $ 9,444.44 $ 8,725.55 $ 8,292.76 $11,001.19
12/31/91 $ 9,037.04 $ 8,365.65 $ 7,963.53 $12,257.23
01/31/92 $ 9,259.26 $ 8,289.21 $ 8,233.61 $12,029.09
02/28/92 $ 9,129.63 $ 8,056.10 $ 8,023.66 $12,184.82
03/31/92 $ 8,490.74 $ 7,444.57 $ 7,101.03 $11,948.12
04/30/92 $ 7,685.19 $ 7,149.52 $ 6,893.05 $12,298.55
05/29/92 $ 8,287.04 $ 7,734.05 $ 7,394.78 $12,358.69
06/30/92 $ 8,805.56 $ 8,036.88 $ 7,739.77 $12,174.89
07/31/92 $ 9,296.30 $ 8,806.06 $ 8,144.90 $12,671.86
08/31/92 $ 9,074.07 $ 8,804.20 $ 7,774.27 $12,412.99
09/30/92 $ 9,074.07 $ 8,655.88 $ 7,930.01 $12,558.91
10/30/92 $ 8,703.70 $ 8,517.81 $ 7,452.93 $12,602.01
11/30/92 $ 8,018.52 $ 7,653.30 $ 6,486.94 $13,029.94
12/31/92 $ 8,611.11 $ 8,189.15 $ 7,028.09 $13,189.79
01/29/93 $ 8,203.70 $ 8,059.85 $ 7,050.76 $13,299.95
02/26/93 $ 8,870.37 $ 9,133.17 $ 7,489.40 $13,481.16
03/31/93 $ 9,898.15 $10,234.67 $ 8,557.91 $13,765.42
04/30/93 $11,342.59 $11,921.18 $ 9,739.77 $13,432.70
05/28/93 $12,870.37 $13,365.80 $10,952.19 $13,791.14
06/30/93 $13,509.26 $14,470.47 $11,477.58 $13,831.39
07/30/93 $16,064.81 $15,670.88 $12,705.77 $13,775.70
08/31/93 $14,787.04 $14,458.86 $11,618.53 $14,297.24
09/30/93 $12,935.19 $12,649.17 $10,262.20 $14,187.60
10/29/93 $15,064.81 $15,131.65 $12,168.56 $14,480.88
11/30/93 $14,787.04 $14,948.49 $11,701.33 $14,342.86
12/31/93 $16,342.59 $16,148.79 $13,002.46 $14,516.27
01/31/94 $16,907.41 $16,302.24 $12,995.56 $15,009.31
02/28/94 $16,027.78 $15,237.44 $12,655.50 $14,602.30
03/31/94 $16,055.56 $15,597.71 $13,178.91 $13,966.90
04/29/94 $14,768.52 $13,786.30 $11,279.45 $14,145.84
05/31/94 $15,472.22 $14,813.72 $11,860.03 $14,377.08
06/30/94 $14,472.22 $13,849.38 $11,360.28 $14,025.26
07/29/94 $14,490.74 $13,777.11 $11,015.28 $14,485.47
08/31/94 $15,157.41 $14,465.51 $11,682.60 $15,078.00
09/30/94 $16,064.81 $16,397.09 $13,034.01 $14,709.59
10/31/94 $15,185.19 $14,819.38 $11,573.19 $15,039.58
11/30/94 $13,268.52 $12,821.03 $10,123.21 $14,492.54
12/30/94 $13,574.07 $13,753.56 $10,776.74 $14,707.23
01/31/95 $12,145.22 $12,044.39 $ 9,598.82 $15,088.37
02/28/95 $12,405.02 $12,898.04 $10,234.60 $15,675.81
03/31/95 $13,833.86 $14,636.43 $12,022.67 $16,137.64
04/28/95 $14,214.27 $14,686.71 $11,525.87 $16,612.48
05/31/95 $14,186.44 $15,321.49 $11,828.49 $17,275.44
06/30/95 $14,668.91 $15,440.70 $11,847.22 $17,676.00
07/31/95 $15,309.11 $15,413.79 $11,700.34 $18,261.92
08/31/95 $15,726.63 $15,708.70 $12,090.69 $18,307.50
09/29/95 $15,717.35 $15,879.61 $12,242.48 $19,079.67
10/31/95 $14,102.93 $13,958.13 $10,564.81 $19,011.51
11/30/95 $15,309.11 $15,495.28 $11,937.90 $19,845.14
12/29/95 $15,735.91 $15,478.52 $11,869.89 $20,227.40
01/31/96 $18,278.14 $17,767.98 $13,903.40 $20,915.05
02/29/96 $18,769.89 $18,424.13 $14,200.10 $21,109.63
03/29/96 $19,771.94 $18,572.11 $14,177.43 $21,312.87
04/30/96 $20,384.31 $18,410.63 $14,137.01 $21,626.80
05/31/96 $22,462.63 $19,566.26 $14,676.20 $22,183.59
06/28/96 $19,595.66 $16,467.53 $12,199.11 $22,268.17
07/31/96 $19,094.63 $16,550.46 $12,257.27 $21,284.91
08/30/96 $20,838.94 $17,441.77 $12,276.98 $21,734.55
09/30/96 $20,226.58 $16,519.54 $11,353.38 $22,956.74
10/31/96 $19,697.72 $16,779.09 $11,394.78 $23,589.65
11/29/96 $19,382.26 $17,291.37 $11,847.22 $25,371.18
12/31/96 $18,807.00 $16,812.55 $11,508.13 $24,868.59
01/31/97 $17,756.72 $16,086.53 $10,862.49 $26,421.43
02/28/97 $19,562.82 $17,221.01 $12,070.97 $26,628.86
03/31/97 $17,226.67 $13,969.46 $10,263.18 $25,536.76
04/30/97 $16,382.51 $12,840.38 $ 9,251.85 $27,059.92
05/30/97 $17,265.93 $13,903.98 $10,281.91 $28,706.19
06/30/97 $15,656.14 $12,317.04 $ 9,423.36 $29,991.52
07/31/97 $14,910.15 $12,270.11 $ 9,652.05 $32,376.57
08/29/97 $15,263.51 $12,091.84 $ 9,745.69 $30,564.13
09/30/97 $15,911.35 $13,410.79 $10,793.49 $32,237.08
10/31/97 $13,241.47 $10,978.72 $ 8,665.35 $31,161.66
11/28/97 $10,502.87 $ 8,181.83 $ 6,980.78 $32,603.02
12/31/97 $11,081.02 $ 9,153.84 $ 7,312.96 $33,162.53
01/30/98 $12,035.08 $ 9,569.37 $ 7,389.85 $33,528.97
02/27/98 $11,399.04 $ 9,350.96 $ 7,437.16 $35,945.82
03/31/98 $12,174.21 $10,028.98 $ 8,050.27 $37,785.07
04/30/98 $12,681.06 $10,751.85 $ 8,667.32 $38,165.03
05/29/98 $10,882.25 $ 9,197.14 $ 7,364.22 $37,509.94
06/30/98 $ 9,799.00 $ 8,520.72 $ 7,069.49 $39,032.45
07/31/98 $ 9,113.27 $ 7,376.57 $ 6,202.07 $38,617.87
08/31/98 $ 7,125.64 $ 5,578.27 $ 4,819.12 $33,040.27
09/30/98 $ 9,838.75 $ 8,841.17 $ 7,391.82 $35,156.96
10/30/98 $ 9,709.55 $ 8,958.49 $ 7,431.25 $38,014.12
11/30/98 $ 9,063.58 $ 8,392.21 $ 6,994.58 $40,317.13
12/31/98 $ 9,333.89 $ 7,970.93 $ 6,404.14 $42,638.88
01/29/99 $ 8,935.86 $ 7,754.83 $ 6,235.58 $44,421.22
02/26/99 $ 8,746.79 $ 7,295.39 $ 5,969.44 $43,040.86
03/31/99 $ 8,567.68 $ 7,104.95 $ 5,890.59 $44,762.42
04/30/99 $ 9,592.62 $ 8,420.05 $ 7,237.06 $46,495.82
05/28/99 $ 7,841.27 $ 6,967.84 $ 6,000.00 $45,399.43
06/30/99 $ 7,751.71 $ 7,397.06 $ 6,597.34 $47,916.97
07/30/99 $ 7,313.87 $ 6,980.26 $ 6,197.14 $46,423.01
08/31/99 $ 7,622.35 $ 7,215.20 $ 6,637.75 $46,193.17
09/30/99 $ 9,602.57 $ 9,061.46 $ 7,911.29 $44,928.40
10/29/99 $ 8,617.43 $ 7,794.27 $ 6,855.59 $47,770.28
11/30/99 $ 8,239.30 $ 7,344.66 $ 6,608.18 $48,741.30
12/31/99 $ 8,149.74 $ 7,003.07 $ 6,699.85 $51,610.27
01/31/00 $ 7,234.26 $ 6,225.44 $ 5,912.27 $48,983.13
02/29/00 $ 7,353.67 $ 6,065.70 $ 5,890.59 $47,998.17
03/31/00 $ 6,796.43 $ 5,694.67 $ 5,569.25 $52,640.54
04/28/00 $ 6,458.10 $ 6,042.28 $ 5,396.75 $51,019.44
05/31/00 $ 6,259.08 $ 6,341.15 $ 5,547.56 $49,901.34
06/30/00 $ 6,398.39 $ 6,403.57 $ 5,698.37 $51,095.66
-----------------------------------------------------------------------
AVERAGE ANNUAL PERFORMANCE For the Periods Ended
June 30, 2000
-----------------------------------------------------------------------
TEN YEAR FIVE YEAR ONE YEAR
-------- --------- --------
World Gold Fund (4.37)% (15.29)% (17.46)%
S&P 500 Index 17.72 % 23.65 % 6.63 %
Toronto Stock Exchange Gold & Precious
Minerals Index (4.36)% (16.14)% (13.43)%
Philadelphia Stock Exchange Gold &
Silver Index (5.47)% (13.62)% (13.63)%
Past performance is not predictive of future results. Investment return
and principal value may fluctuate so that shares, when redeemed, may be
worth more or less than their original value. The S&P 500 Index is an
unmanaged but commonly used measure of common stock total return
performance. The Toronto Stock Exchange Gold & Precious Minerals Index
(TSE) is a capitalization-weighted index designed to measure the
performance of the gold and silver sector of the TSE 300 Index. The
Philadelphia Stock Exchange Gold & Silver Index (XAU) is a
capitalization-weighted index which includes the leading companies
involved in the mining of gold and silver.
32
<PAGE>
---------------------------------------------------------------------------
GOLD FUNDS
---------------------------------------------------------------------------
---------------------------------------------------------------------------
GOLD SHARES FUND
---------------------------------------------------------------------------
[GRAPHIC: Linear graph plotted from data in table shown below]
JOHANNESBURG FINANCIAL
GOLD SHARES ALL GOLD TIMES GOLD S&P 500
FUND INDEX MINES INDEX INDEX
---------- ---------- ----------- ----------
06/29/90 $10,000.00 $10,000.00 $10,000.00
07/31/90 $10,575.92 $10,583.92 $ 9,968.05
08/31/90 $10,445.03 $11,414.63 $ 9,068.14
09/28/90 $ 9,947.64 $10,897.27 $ 8,627.47
10/31/90 $ 9,267.02 $ 9,804.47 $ 8,590.99
11/30/90 $ 8,900.52 $ 8,768.68 $ 9,145.22
12/31/90 $ 8,979.06 $ 8,190.61 $ 9,399.72
01/31/91 $ 7,987.34 $ 7,469.09 $ 9,808.05
02/28/91 $ 8,657.42 $ 7,248.48 $10,508.61
03/28/91 $ 7,933.73 $ 6,212.94 $10,762.83
04/30/91 $ 8,121.36 $ 6,558.36 $10,788.42
05/31/91 $ 9,113.07 $ 7,621.02 $11,252.23
06/28/91 $ 9,622.33 $ 8,299.84 $10,737.12
07/31/91 $ 9,298.89 $ 8,065.88 $11,237.15
08/30/91 $ 7,681.69 $ 6,540.79 $11,502.60
09/30/91 $ 8,139.90 $ 7,040.35 $11,310.03
10/31/91 $ 8,409.43 $ 7,251.88 $11,461.75
11/29/91 $ 8,786.78 $ 7,680.92 $11,001.19
12/31/91 $ 7,573.88 $ 7,189.74 $12,257.23
01/31/92 $ 7,546.34 $ 7,946.48 $10,000.00 $12,029.09
02/28/92 $ 6,802.72 $ 7,540.77 $ 9,504.15 $12,184.82
03/31/92 $ 6,692.56 $ 6,875.25 $ 8,900.85 $11,948.12
04/30/92 $ 6,224.35 $ 6,124.01 $ 8,398.20 $12,298.55
05/29/92 $ 6,637.47 $ 6,725.75 $ 8,899.56 $12,358.69
06/30/92 $ 6,114.19 $ 6,894.73 $ 9,123.62 $12,174.89
07/31/92 $ 5,808.48 $ 6,739.39 $ 9,367.35 $12,671.86
08/31/92 $ 5,308.23 $ 5,953.70 $ 8,818.10 $12,412.99
09/30/92 $ 4,780.18 $ 5,568.79 $ 8,475.29 $12,558.91
10/30/92 $ 4,113.18 $ 4,810.46 $ 7,710.15 $12,602.01
11/30/92 $ 3,835.26 $ 4,969.30 $ 6,963.90 $13,029.94
12/31/92 $ 3,724.10 $ 4,562.06 $ 7,158.25 $13,189.79
01/29/93 $ 3,923.09 $ 5,118.60 $ 7,278.29 $13,299.95
02/26/93 $ 4,264.23 $ 5,393.37 $ 8,111.58 $13,481.16
03/31/93 $ 5,060.22 $ 6,617.27 $ 9,500.14 $13,765.42
04/30/93 $ 5,884.64 $ 8,056.01 $11,110.67 $13,432.70
05/28/93 $ 7,021.77 $10,111.81 $13,158.72 $13,791.14
06/30/93 $ 7,135.48 $ 9,971.15 $13,664.95 $13,831.39
07/30/93 $ 8,109.81 $10,827.74 $15,456.59 $13,775.70
08/31/93 $ 6,648.32 $ 9,013.88 $13,506.32 $14,297.24
09/30/93 $ 6,333.10 $ 7,653.75 $12,083.34 $14,187.60
10/29/93 $ 7,106.83 $ 9,114.56 $14,147.78 $14,480.88
11/30/93 $ 7,049.51 $ 9,479.80 $13,832.10 $14,342.86
12/31/93 $ 8,339.06 $11,057.14 $15,978.00 $14,516.27
01/31/94 $ 7,499.36 $ 9,874.93 $15,494.17 $15,009.31
02/28/94 $ 7,036.08 $10,022.65 $14,481.78 $14,602.30
03/31/94 $ 6,949.21 $10,087.23 $14,570.18 $13,966.90
04/29/94 $ 7,151.90 $ 9,908.57 $13,575.12 $14,145.84
05/31/94 $ 6,920.26 $ 9,209.87 $13,990.51 $14,377.08
06/30/94 $ 7,267.72 $ 9,971.06 $13,671.75 $14,025.26
07/29/94 $ 7,531.47 $10,140.45 $14,040.62 $14,485.47
08/31/94 $ 8,352.02 $11,124.64 $14,906.12 $15,078.00
09/30/94 $ 9,348.40 $11,937.52 $16,637.63 $14,709.59
10/31/94 $ 8,850.21 $11,084.30 $15,432.54 $15,039.58
11/30/94 $ 7,736.61 $ 9,691.88 $13,524.51 $14,492.54
12/30/94 $ 8,117.57 $ 9,956.92 $14,143.19 $14,707.23
01/31/95 $ 6,214.55 $ 7,441.41 $11,724.57 $15,088.37
02/28/95 $ 6,571.37 $ 7,387.00 $12,387.42 $15,675.81
03/31/95 $ 6,868.72 $ 7,166.00 $13,814.13 $16,137.64
04/28/95 $ 6,541.64 $ 7,028.48 $13,810.41 $16,612.48
05/31/95 $ 6,363.23 $ 6,574.46 $13,608.54 $17,275.44
06/30/95 $ 6,452.43 $ 6,904.18 $13,797.52 $17,676.00
07/31/95 $ 6,965.01 $ 7,249.39 $13,958.58 $18,261.92
08/31/95 $ 6,934.86 $ 7,302.55 $14,119.64 $18,307.50
09/29/95 $ 6,874.55 $ 7,230.89 $14,214.13 $19,079.67
10/31/95 $ 5,819.25 $ 6,077.07 $12,332.94 $19,011.51
11/30/95 $ 5,879.55 $ 6,177.61 $13,509.76 $19,845.14
12/29/95 $ 5,939.85 $ 6,428.05 $13,696.59 $20,227.40
01/31/96 $ 7,256.42 $ 8,114.86 $16,504.77 $20,915.05
02/29/96 $ 7,042.10 $ 8,049.79 $16,751.73 $21,109.63
03/29/96 $ 6,644.06 $ 7,807.97 $16,707.35 $21,312.87
04/30/96 $ 6,674.68 $ 7,835.28 $16,654.38 $21,626.80
05/31/96 $ 6,858.39 $ 8,054.80 $17,014.44 $22,183.59
06/28/96 $ 5,694.91 $ 6,934.66 $14,435.32 $22,268.17
07/31/96 $ 5,633.01 $ 6,852.82 $14,285.71 $21,284.91
08/30/96 $ 5,602.06 $ 6,945.58 $14,541.26 $21,734.55
09/30/96 $ 5,106.85 $ 6,355.37 $13,255.64 $22,956.74
10/31/96 $ 5,014.00 $ 6,438.17 $13,441.04 $23,589.65
11/29/96 $ 4,673.54 $ 5,771.64 $13,401.67 $25,371.18
12/31/96 $ 4,425.94 $ 5,616.43 $13,053.06 $24,868.59
01/31/97 $ 3,983.34 $ 5,155.96 $12,156.85 $26,421.43
02/28/97 $ 4,552.39 $ 6,093.60 $13,653.64 $26,628.86
03/31/97 $ 3,920.12 $ 5,135.64 $11,717.34 $25,536.76
04/30/97 $ 3,603.98 $ 4,655.71 $10,512.60 $27,059.92
05/30/97 $ 3,667.21 $ 4,582.70 $11,237.02 $28,706.19
06/30/97 $ 3,047.57 $ 3,710.98 $ 9,970.01 $29,991.52
07/31/97 $ 3,112.42 $ 3,714.11 $10,122.48 $32,376.57
08/29/97 $ 3,144.84 $ 3,777.95 $10,106.73 $30,564.13
09/30/97 $ 3,079.99 $ 3,835.88 $10,916.33 $32,237.08
10/31/97 $ 2,399.15 $ 3,249.15 $ 8,887.68 $31,161.66
11/28/97 $ 1,848.00 $ 2,612.03 $ 6,998.05 $32,603.02
12/31/97 $ 1,886.90 $ 2,873.63 $ 7,574.86 $33,162.53
01/30/98 $ 1,886.90 $ 3,112.81 $ 8,001.49 $33,528.97
02/27/98 $ 1,721.38 $ 2,760.53 $ 7,709.43 $35,945.82
03/31/98 $ 1,754.49 $ 2,817.62 $ 8,196.91 $37,785.07
04/30/98 $ 1,853.80 $ 3,724.62 $ 9,294.27 $38,165.03
05/29/98 $ 1,489.66 $ 3,159.54 $ 7,781.73 $37,509.94
06/30/98 $ 1,254.62 $ 2,583.39 $ 7,114.30 $39,032.45
07/31/98 $ 1,264.56 $ 2,598.36 $ 6,446.93 $38,617.87
08/31/98 $ 973.24 $ 2,127.15 $ 5,022.08 $33,040.27
09/30/98 $ 1,357.25 $ 3,256.38 $ 7,880.51 $35,156.96
10/30/98 $ 1,327.45 $ 3,298.49 $ 7,967.85 $38,014.12
11/30/98 $ 1,244.69 $ 3,195.62 $ 7,552.67 $40,317.13
12/31/98 $ 1,264.56 $ 2,584.03 $ 6,689.31 $42,638.88
01/29/99 $ 1,208.28 $ 2,691.84 $ 6,672.56 $44,421.22
02/26/99 $ 1,181.80 $ 2,386.28 $ 6,237.91 $43,040.86
03/31/99 $ 1,175.18 $ 2,578.03 $ 6,220.52 $44,762.42
04/30/99 $ 1,307.59 $ 2,612.16 $ 7,286.38 $46,495.82
05/28/99 $ 1,102.35 $ 2,569.86 $ 5,929.32 $45,399.43
06/30/99 $ 1,132.14 $ 2,642.47 $ 6,335.41 $47,916.97
07/30/99 $ 1,059.31 $ 2,458.63 $ 6,045.93 $46,423.01
08/31/99 $ 1,115.59 $ 2,855.32 $ 6,428.18 $46,193.17
09/30/99 $ 1,420.14 $ 3,657.45 $ 8,083.09 $44,928.40
10/29/99 $ 1,271.18 $ 3,427.61 $ 7,012.79 $47,770.28
11/30/99 $ 1,218.21 $ 3,159.63 $ 6,700.55 $48,741.30
12/31/99 $ 1,231.45 $ 3,280.30 $ 6,644.93 $51,610.27
01/31/00 $ 1,082.49 $ 3,067.55 $ 5,864.04 $48,983.13
02/29/00 $ 1,089.11 $ 3,387.05 $ 6,049.15 $47,998.17
03/31/00 $ 1,006.35 $ 3,074.46 $ 5,595.53 $52,640.54
04/28/00 $ 926.90 $ 2,664.01 $ 5,413.85 $51,019.44
05/31/00 $ 926.90 $ 2,839.58 $ 5,577.35 $49,901.34
06/30/00 $ 966.62 $ 2,914.31 $ 5,780.00 $51,095.66
-----------------------------------------------------------------------
AVERAGE ANNUAL PERFORMANCE For the Periods Ended
June 30, 2000
-----------------------------------------------------------------------
TEN YEAR FIVE YEAR ONE YEAR
-------- --------- --------
Gold Shares Fund (20.84)% (31.59)% (14.62)%
S&P 500 Index 17.72 % 23.65 % 6.63 %
Financial Times Gold Mines Index n/a (15.97)% (8.77)%
Johannesburg All Gold Index (11.60)% (15.84)% 10.29 %
Past performance is not predictive of future results. Investment return
and principal value may fluctuate so that shares, when redeemed, may be
worth more or less than their original value. The S&P 500 Index is an
unmanaged but commonly used measure of common stock total return
performance. The Financial Times Gold Mines Index is a market
capitalization-weighted total return index of the leading North
American, Australian and African gold mining companies. The
Johannesburg All Gold Index is a capitalization-weighted index of all
domestic gold stocks traded on the Johannesburg Stock Exchange.
THE YEAR IN REVIEW - ECONOMIC AND
POLITICAL ISSUES THAT AFFECTED THE FUNDS
The last half of 1999 saw the gold market being rocked by several events that
resulted in gold having a stronger fundamental position than it has had for
several years. It was a very volatile period for gold and gold equities for
three reasons: gold auctions by the Bank of England; the Washington Agreement
which limits the lending of 15 central banks governed by its covenants; and
concerns over hedge books.
Gold hit a 23-year low on August 25, 1999, closing at $252 per ounce. This was
the end of a four-month decline in the price after the first Bank of England
auction. Gold continued to trade in a very narrow range around $255 until the
second Bank of England auction in early September. The
33
<PAGE>
---------------------------------------------------------------------------
GOLD FUNDS
---------------------------------------------------------------------------
result of this auction was very positive in its outlook for the market. One of
the major gold mining companies purchased nearly half of the auctioned amount.
This purchase indicated that the economics of buying gold and then selling it
were better than those of mining the gold and then selling it at that price.
Gold rose sharply on the back of that purchase. Another major announcement came
the following week when 15 central banks announced the limitations of their
sales and lending activities. This removed the speculation about large gold
supply in the market and gold reacted immediately, gaining approximately 25
percent in a few days.
The ensuing rally in the equities markets was short-lived. Concerns over the
hedge positions of two companies spread through the sector, and the resulting
sell-off brought the price of all the gold equities down. Very light trading in
both the physical and the equity market characterized the rest of 1999, and gold
was unable to repeat the highs that it had seen in October.
After an initial price increase around the beginning of 2000, the first six
months of the year were quiet with the exception of one rally that occurred in
February. Placer Dome announced its intention to limit their hedging program in
an effort to increase their exposure to a gold price rally. This immediately
resulted in a $20 price rally in the gold market. Speculation that Barrick Gold
would follow suit further lifted the market. For most of February gold stayed
above $300 per ounce, but started to recede once the initial excitement had died
down.
A strong dollar and the initiation of gold sales by the Swiss Central Bank kept
a lid on the gold price until the last few weeks of June. Concerns over
inflation and a slowing economy served to weaken the dollar and to lift gold,
giving gold an approximate 10 percent return for the fiscal year ended June 30,
2000.
CURRENT OUTLOOK
The fundamental demand outlook for gold is very positive; however, on the supply
side the price has been dampened because of central bank sales. Once governments
stop selling bullion, the price could rise substantially. A slowing economy and
weaker dollar will be favorable for a stronger gold price over the coming
months. There have also been two mergers among the major North American precious
metals companies and a succession of mergers and acquisitions in the global
market. The corporate activity and the lack of new mine development will serve
to tighten gold supply. The weakening economic picture should also provide
additional underpinning to the gold price, improving the outlook for gold
throughout the next year.
34
<PAGE>
---------------------------------------------------------------------------
GOLD FUNDS
---------------------------------------------------------------------------
WORLD GOLD FUND
---------------------------------------------------------------------
TOP 10 HOLDINGS BASED ON TOTAL INVESTMENTS
---------------------------------------------------------------------
PLACER DOME, INC. 10.86%
SENIOR GOLD PRODUCERS
---------------------------------------------------------------------
GOLDCORP, INC. 8.87%
SENIOR GOLD PRODUCERS
---------------------------------------------------------------------
HOMESTAKE MINING 7.87%
SENIOR GOLD PRODUCERS
---------------------------------------------------------------------
NEWMONT MINING CORP. 7.65%
SENIOR GOLD PRODUCERS
---------------------------------------------------------------------
IAMGOLD CORP. 5.31%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------------
DELTA GOLD NL 5.09%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------------
FREEPORT-MCMORAN COPPER & GOLD, INC. 5.09%
SENIOR GOLD PRODUCERS
---------------------------------------------------------------------
FRANCO-NEVADA MINING CORP., LTD. 3.55%
MINING FINANCE
---------------------------------------------------------------------
RANGERS MINERALS NL 3.37%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------------
BARRICK GOLD CORP. 3.36%
SENIOR GOLD PRODUCERS
---------------------------------------------------------------------
TOP 5 INDUSTRIES BASED ON TOTAL INVESTMENTS
---------------------------------------------------------------------
SENIOR GOLD PRODUCERS ....................................... 51.37%
GOLD/MINERAL EXPLORATION & DEVELOPMENT ...................... 21.10%
INTERMEDIATE & JUNIOR GOLD PRODUCERS ........................ 16.67%
DIAMOND MINING & EXPLORATION ................................ 6.81%
MINING FINANCE .............................................. 3.55%
35
<PAGE>
---------------------------------------------------------------------------
GOLD FUNDS
---------------------------------------------------------------------------
GOLD SHARES FUND
TOP 10 HOLDINGS BASED ON TOTAL INVESTMENTS
---------------------------------------------------------------------
NEWMONT MINING CORP. 10.02%
GOLD MINING - NORTH AMERICA
---------------------------------------------------------------------
HARMONY GOLD MINING 8.07%
GOLD MINING - AFRICA
---------------------------------------------------------------------
GOLD FIELDS LTD. 8.04%
GOLD MINING - AFRICA
---------------------------------------------------------------------
PLACER DOME, INC. 7.26%
GOLD MINING - NORTH AMERICA
---------------------------------------------------------------------
GOLDCORP, INC. 6.26%
GOLD MINING - NORTH AMERICA
---------------------------------------------------------------------
FREEPORT-MCMORAN COPPER & GOLD, INC. 5.42%
GOLD MINING - NORTH AMERICA
---------------------------------------------------------------------
HOMESTAKE MINING 5.37%
GOLD MINING - NORTH AMERICA
---------------------------------------------------------------------
DE BEERS CENTENARY/ 4.75%
DE BEERS CONSOLIDATED MINES
DIAMOND MINING & EXPLORATION
---------------------------------------------------------------------
IMPALA PLATINUM HOLDINGS LTD. 4.37%
DIVERSIFIED OPERATIONS
---------------------------------------------------------------------
BARRICK GOLD CORP. 4.27%
GOLD MINING - NORTH AMERICA
TOP 5 INDUSTRIES BASED ON TOTAL INVESTMENTS
---------------------------------------------------------------------
GOLD MINING - NORTH AMERICA ................................ 47.78%
GOLD MINING - AFRICA ....................................... 23.70%
DIAMOND MINING & EXPLORATION ............................... 10.19%
DIVERSIFIED OPERATIONS ..................................... 8.44%
GOLD MINING - AUSTRALIA .................................... 7.42%
36
<PAGE>
---------------------------------------------------------------------------
GOLD FUNDS
---------------------------------------------------------------------------
WORLD GOLD FUND
---------------------------------------------------------------------
PORTFOLIO PROFILE June 30, 2000
---------------------------------------------------------------------
COUNTRY DISTRIBUTION % OF INVESTMENTS
Canada 52.37%
U.S. 29.03%
Australia 11.57%
South Africa 2.55%
Other Foreign 4.48%
NUMBER OF SECURITIES 116
GOLD SHARES FUND
---------------------------------------------------------------------
PORTFOLIO PROFILE June 30, 2000
---------------------------------------------------------------------
COUNTRY DISTRIBUTION % OF INVESTMENTS
Canada 33.11%
South Africa 32.88%
U.S. 25.20%
Australia 7.57%
Other Foreign 1.24%
NUMBER OF SECURITIES 51
---------------------------------------------------------------------------
37
<PAGE>
U.S. TREASURY SECURITIES CASH FUND
PORTFOLIO OF INVESTMENTS June 30, 2000
------------------------------------------------------------------------------
UNITED STATES
GOVERNMENT COUPON MATURITY PRINCIPAL
OBLIGATIONS 58.13% RATE DATE AMOUNT VALUE
------ -------- ------------ ------------
UNITED STATES TREASURY
BILLS 21.83%
----------------------
Yield 5.35% 07/13/00 $ 30,000,000 $ 29,946,500
UNITED STATES TREASURY
NOTES 36.30%
----------------------
5.13% 08/31/00 25,000,000 24,951,107
4.63% 11/30/00 25,000,000 24,839,934
------------
49,791,041
TOTAL UNITED STATES
GOVERNMENT OBLIGATIONS 79,737,541
---------------------- ----------
(cost $79,737,541)
REPURCHASE AGREEMENTS 41.05%
----------------------------
Joint Tri-Party Repurchase
Agreement, 06/30/00,
collateralized by U.S.
Treasury securities held
in joint tri-party
repurchase accounts:
6.55% Paine Webber, repurchase
price $23,012,554 6.55% 07/03/00 23,000,000 23,000,000
6.57% Donaldson, Lufkin &
Jenrette, repurchase price
$33,323,801 6.57% 07/03/00 33,305,566 33,305,566
TOTAL REPURCHASE AGREEMENTS 56,305,566
--------------------------- ----------
(cost $56,305,566)
TOTAL INVESTMENTS 99.18% 136,043,107
--------------------------- ----------
(cost $136,043,107)
Other assets and liabilities, net 0.82% 1,128,475
------------
NET ASSETS 100% $137,171,582
--------------- ------------
See notes to portfolios of investments and notes to financial statements.
38
<PAGE>
U.S. GOVERNMENT SECURITIES SAVINGS FUND
------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
------------------------------------------------------------------------------
UNITED STATES
GOVERNMENT AND AGENCY COUPON MATURITY PRINCIPAL
OBLIGATIONS 98.74% RATE DATE AMOUNT VALUE
------ -------- --------- -----------
FEDERAL FARM CREDIT BANK 5.41%
------------------------------
Discount Notes:
Yield 6.57% 07/03/00 $25,000,000 $ 24,990,875
Yield 5.33% 07/25/00 871,000 867,650
Yield 5.33% 07/26/00 1,263,000 1,257,955
Variable Rates:
6.53% 02/01/01 8,000,000 8,001,720
Fixed Rates:
5.40% 07/03/00 3,000,000 2,999,878
6.10% 07/24/00 100,000 100,017
5.20% 10/20/00 2,500,000 2,491,849
4.33% 10/26/00 145,000 144,222
------------
40,854,166
FEDERAL HOME LOAN BANK 69.41%
-----------------------------
Discount Notes:
Yield 6.57% 07/03/00 105,325,000 105,286,583
Yield 6.48% 07/06/00 7,764,000 7,757,012
Yield 6.39% 07/07/00 25,000,000 24,981,264
Yield 5.53% 07/11/00 206,000 205,682
Yield 6.40% 07/14/00 20,175,000 20,128,355
Yield 6.46% 07/21/00 18,526,000 18,459,512
Yield 6.42% 08/04/00 5,100,000 5,070,797
Yield 6.42% 08/11/00 25,000,000 24,825,694
Variable Rates:
6.50% 08/04/00 1,000,000 1,000,303
6.63% 09/07/00 15,000,000 14,999,080
6.51% 09/21/00 5,000,000 4,999,650
6.86% 09/22/00 12,500,000 12,500,000
6.52% 09/28/00 5,000,000 4,999,263
6.13% 10/04/00 8,500,000 8,497,256
6.72% 10/06/00 25,000,000 24,995,897
6.63% 10/10/00 2,000,000 1,999,696
6.34% 12/01/00 25,000,000 25,000,000
See notes to portfolios of investments and notes to financial statements.
39
<PAGE>
U.S. GOVERNMENT SECURITIES SAVINGS FUND
-----------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
-----------------------------------------------------------------------------
UNITED STATES
GOVERNMENT AND AGENCY COUPON MATURITY PRINCIPAL
OBLIGATIONS RATE DATE AMOUNT VALUE
------ -------- ----------- -----------
FEDERAL HOME LOAN BANK (CONT'D)
------------------------------
Fixed Rates:
6.20% 07/07/00 $ 100,000 $ 100,005
6.23% 07/07/00 15,000 14,997
6.25% 07/10/00 60,000 59,998
5.50% 07/14/00 4,930,000 4,929,154
6.11% 07/17/00 2,000,000 2,000,452
5.89% 07/24/00 125,000 125,004
6.29% 07/28/00 100,000 100,022
5.69% 08/07/00 250,000 250,000
5.71% 08/09/00 15,000,000 14,999,295
5.62% 08/10/00 50,000 49,938
5.82% 08/11/00 1,000,000 998,984
5.57% 08/17/00 125,000 124,938
5.02% 08/18/00 850,000 848,450
5.91% 08/23/00 4,080,000 4,079,941
5.56% 08/24/00 190,000 189,855
5.60% 08/24/00 1,615,000 1,614,349
6.04% 09/01/00 5,000,000 4,999,833
5.88% 09/07/00 5,000,000 4,999,757
5.01% 09/21/00 365,000 364,108
4.95% 10/20/00 12,600,000 12,525,072
4.40% 10/23/00 600,000 597,016
5.04% 10/26/00 150,000 149,500
6.13% 10/27/00 5,000,000 4,999,929
6.13% 10/27/00 10,000,000 9,980,527
6.20% 10/27/00 5,000,000 4,999,861
4.95% 11/13/00 50,000 49,695
5.22% 11/17/00 500,000 497,949
6.16% 11/17/00 1,085,000 1,085,000
5.33% 11/24/00 500,000 498,166
5.62% 12/01/00 225,000 224,542
5.84% 12/01/00 10,000,000 9,992,430
5.97% 12/01/00 5,000,000 4,995,275
5.97% 12/01/00 12,420,000 12,411,505
5.66% 12/15/00 200,000 199,446
4.89% 12/22/00 300,000 298,423
5.18% 12/22/00 250,000 248,812
5.22% 12/22/00 5,850,000 5,825,516
5.50% 12/22/00 1,000,000 997,126
5.62% 01/12/01 2,000,000 1,993,860
6.28% 01/12/01 11,000,000 10,995,230
4.97% 01/19/01 6,920,000 6,876,156
6.00% 01/24/01 25,000 24,928
5.02% 01/26/01 1,000,000 992,325
See notes to portfolios of investments and notes to financial statements.
40
<PAGE>
U.S. GOVERNMENT SECURITIES SAVINGS FUND
-----------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
-----------------------------------------------------------------------------
UNITED STATES
GOVERNMENT AND AGENCY COUPON MATURITY PRINCIPAL
OBLIGATIONS RATE DATE AMOUNT VALUE
------ -------- ----------- -----------
FEDERAL HOME LOAN BANK (CONT'D)
------------------------------
5.15% 02/09/01 $ 250,000 $ 247,634
6.55% 02/15/01 10,000,000 9,999,517
6.60% 02/22/01 10,000,000 9,999,547
5.58% 02/23/01 5,050,000 4,999,671
5.25% 02/26/01 3,000,000 2,961,504
5.19% 03/01/01 250,000 247,462
5.30% 03/02/01 500,000 495,953
6.45% 03/16/01 12,800,000 12,785,107
6.50% 03/27/01 15,000,000 14,990,487
5.14% 05/02/01 10,000,000 9,876,301
6.97% 05/17/01 5,000,000 4,999,837
7.05% 05/17/01 5,000,000 4,999,838
7.13% 06/05/01 5,000,000 4,997,129
7.30% 06/14/01 4,530,000 4,527,393
------------
524,140,793
STUDENT LOAN MARKETING
ASSOCIATION 23.87%
----------------------
Variable Rates:
6.21% 07/20/00 5,000,000 4,999,939
6.59% 08/02/00 50,000,000 49,998,611
6.49% 08/04/00 2,000,000 2,000,693
6.54% 08/18/00 20,000,000 19,998,576
6.34% 09/01/00 4,500,000 4,500,701
5.99% 09/21/00 3,000,000 2,998,842
6.09% 10/19/00 7,000,000 6,991,518
6.90% 10/27/00 25,000,000 25,006,706
6.54% 11/09/00 5,000,000 4,999,640
6.54% 11/15/00 5,000,000 4,999,065
6.52% 11/17/00 25,000,000 25,003,431
6.10% 03/07/01 17,000,000 16,987,442
Fixed Rates:
6.05% 09/14/00 5,140,000 5,136,429
6.00% 11/01/00 4,415,000 4,413,655
5.90% 12/01/00 1,000,000 999,271
5.20% 03/02/01 1,000,000 990,300
5.79% 04/19/01 200,000 197,896
------------
180,222,715
See notes to portfolios of investments and notes to financial statements.
41
<PAGE>
U.S. GOVERNMENT SECURITIES SAVINGS FUND
-----------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
-----------------------------------------------------------------------------
UNITED STATES
GOVERNMENT AND AGENCY COUPON MATURITY PRINCIPAL
OBLIGATIONS RATE DATE AMOUNT VALUE
------ -------- ----------- -----------
TENNESSEE VALLEY POWER
AUTHORITY 0.05%
-------------------------
Tennessee Valley Power
Authority 6.00% 11/01/00 $ 385,000 $ 384,477
Series D
-------------------------
TOTAL INVESTMENTS 98.74% 745,602,151
-------------------------
(cost $745,602,151)
Other assets and liabilities,
net 1.26% 9,537,574
------------
NET ASSETS 100% $755,139,725
--------------- ------------
See notes to portfolios of investments and notes to financial statements.
42
<PAGE>
NEAR-TERM TAX FREE FUND
---------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
---------------------------------------------------------------------------
MUNICIPAL BONDS 90.01% COUPON MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
------ -------- ----------- -----------
ALABAMA 2.18%
------------------------------
Birmingham, Alabama Refunded,
Series B 6.25% 04/01/12 $ 110,000 $ 113,850
CALIFORNIA 5.77%
------------------------------
San Francisco Bay Area Transit
Financing Authority 5.00% 02/01/07 300,000 301,500
CONNECTICUT 4.04%
------------------------------
Bridgeport Series A, GO 6.00% 03/01/06 200,000 210,750
HAWAII 3.87%
------------------------------
Hawaii State GO, Unlimited Tax 5.25% 09/01/03 200,000 202,250
ILLINOIS 7.47%
------------------------------
Buffalo Grove, Illinois Park
District 5.80% 12/30/01 210,000 213,150
Chicago Water Revenue (ZCB) 0.00% 11/01/08 275,000 177,031
----------
390,181
IOWA 6.94%
------------------------------
Des Moines, Iowa Sewerage
Revenue 5.20% 06/01/01 150,000 151,176
Finance Authority Hospital
Facility Revenue 5.15% 07/01/04 210,000 211,050
----------
362,226
MASSACHUSETTS 2.39%
------------------------------
Massachusetts State Health &
Educational, Facilities
Authority Revenue 5.00% 10/01/07 135,000 124,875
NEBRASKA 5.08%
------------------------------
Nebraska Public Power District
Revenue 5.70% 01/01/05 255,000 265,200
NEVADA 9.75%
------------------------------
Nevada State Municipal Bond
Bank Project #51, Series A,
GO 5.10% 01/01/08 250,000 250,625
Washoe County Gas & Water
Facilities, Revenue 6.30% 12/01/14 250,000 258,438
----------
509,063
NEW JERSEY 6.09%
------------------------------
Jersey City, GO 6.00% 10/01/05 110,000 115,778
Washington Township Board of
Education, GO 5.10% 02/01/08 200,000 202,000
----------
317,778
See notes to portfolios of investments and notes to financial statements.
43
<PAGE>
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---------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
---------------------------------------------------------------------------
MUNICIPAL BONDS COUPON MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
------ -------- ----------- -----------
NEW YORK 6.23%
------------------------------
Hempstead Township, GO
Unlimited Tax 5.375% 11/15/10 $ 120,000 $ 122,700
New York, New York, Series F 5.25% 08/01/04 200,000 202,500
----------
325,200
PENNSYLVANIA 4.80%
------------------------------
Philadelphia Hospitals &
Higher Education Facilities
Authority Revenue 5.00% 05/15/03 250,000 250,625
PUERTO RICO 3.89%
------------------------------
Puerto Rico Municipal
Financial Agency, Series B 5.50% 08/01/02 200,000 203,250
TEXAS 4.90%
------------------------------
Comal Independent School
District 5.00% 02/01/01 255,000 255,913
UTAH 3.96%
------------------------------
State Municipal Finance COOP
Local Government Revenue 6.40% 08/01/09 200,000 206,750
VIRGIN ISLANDS 2.87%
------------------------------
Virgin Islands Public Finance
Authority Revenue 5.00% 10/01/03 150,000 149,625
WASHINGTON 5.91%
------------------------------
King County, Series A, GO
Pre-refunded 5.80% 12/01/06 40,000 41,200
King County, Series A, GO 5.80% 12/01/06 260,000 267,475
----------
308,675
WISCONSIN 3.87%
------------------------------
State Health & Educational
Facilities Revenue 5.20% 06/01/05 200,000 202,000
------------------------------
TOTAL MUNICIPAL BONDS 4,699,711
(cost $4,722,857)
See notes to portfolios of investments and notes to financial statements.
44
<PAGE>
NEAR-TERM TAX FREE FUND
---------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
---------------------------------------------------------------------------
REPURCHASE AGREEMENT 8.07% COUPON MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
------ -------- ----------- -----------
Joint Tri-Party Repurchase
Agreement, Donaldson, Lufkin
& Jenrette, 6.57%, 06/30/00,
repurchase price $421,636,
collateralized by U.S.
Treasury securities held
in a joint tri-party
repurchase account
(cost $421,405) 6.57% 07/03/00 $ 421,405 $ 421,405
TOTAL INVESTMENTS 98.08% 5,121,116
-----------------------------
(cost $5,144,262)
Other assets and liabilities,
net 1.92% 100,399
----------
NET ASSETS 100% $5,221,515
--------------- ----------
See notes to portfolios of investments and notes to financial statements.
45
<PAGE>
TAX-FREE FUND
----------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
----------------------------------------------------------------------------
MUNICIPAL BONDS 91.09% COUPON MATURITY PRINCIPAL
RATE DATE AMOUNT VALUE
------ -------- ----------- -----------
ARIZONA 1.73%
------------------------------
Salt River Project Arizona
Agricultural Impt & Power
District Electric System
Revenue 6.00% 01/01/07 $ 300,000 $ 317,625
CALIFORNIA 7.04%
------------------------------
California Educational
Facilities Authority
Revenue, Heald Colleges 5.25% 02/15/13 260,000 251,875
California State Registered,
GO Unlimited 7.00% 10/01/10 100,000 117,375
California State Registered,
GO Unlimited 7.40% 09/01/07 200,000 233,000
Foothill Eastern Corridor
Agency, Toll Road Revenue 4.75% 01/15/11 700,000 692,125
-----------
1,294,375
COLORADO 1.99%
------------------------------
Denver, Colorado City &
County School District #1 5.00% 12/01/23 410,000 365,413
FLORIDA 4.02%
------------------------------
Florida Board of Education
Capital Outlay, GO Unlimited
Tax, Refunding, Series A 6.625% 06/01/07 700,000 738,500
GEORGIA 1.38%
------------------------------
Metropolitan Atlanta Rapid
Transport Authority 5.70% 07/01/01 250,000 253,343
ILLINOIS 5.61%
------------------------------
Du Page County, Refunding 5.60% 01/01/21 490,000 482,037
Illinois Development
Financing Authority Revenue,
Series B 6.25% 09/01/17 250,000 255,000
Illinois Regional
Transportation Authority
Revenue, Series A 7.20% 11/01/20 250,000 293,437
-----------
1,030,474
INDIANA 5.55%
------------------------------
Fort Wayne Water Works
Revenue 4.75% 12/01/10 500,000 485,625
Indiana Health Facility
Finance Authority Revenue,
Series A 5.75% 08/01/08 540,000 534,600
-----------
1,020,225
IOWA 2.60%
------------------------------
Polk County Revenue Catholic
Health Initiatives, Series A 5.125% 12/01/11 500,000 477,500
See notes to portfolios of investments and notes to financial statements.
46
<PAGE>
TAX-FREE FUND
----------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
----------------------------------------------------------------------------
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
KANSAS 4.72%
------------------------------
Kansas State Development
Finance Authority Hospital
Revenue, Series Z 5.00% 12/15/12 $ 500,000 $ 470,000
Seward County School District 7.40% 09/01/03 370,000 398,213
-----------
868,213
MASSACHUSETTS 2.37%
------------------------------
Massachusetts State Authority
Revenue, Series A 5.00% 07/01/27 500,000 435,000
MICHIGAN 4.52%
------------------------------
Belding Area Schools 5.00% 05/01/18 390,000 359,287
Michigan State Hospital
Finance Authority Revenue 4.90% 05/15/13 500,000 471,875
-----------
831,162
MISSISSIPPI 2.19%
------------------------------
Vicksburg Leased Housing
Corp. Housing Revenue,
Refunding, Series A 6.125% 02/15/22 400,000 402,500
NEVADA 4.66%
------------------------------
Clark County Las Vegas
Convention & Visitors
Authority, GO Limited Tax 5.50% 07/01/17 870,000 856,950
NEW YORK 4.97%
------------------------------
New York, GO Unlimited,
Series J 5.00% 05/15/12 500,000 477,500
New York, GO Unlimited,
Series H 5.25% 03/15/14 450,000 436,500
-----------
914,000
NORTH CAROLINA 3.74%
------------------------------
North Carolina Eastern
Municipal Power Agency
Revenue, Refunding, Series A 5.60% 01/01/10 675,000 687,656
OHIO 2.61%
------------------------------
Olentangy Local School
District, GO Limited Tax,
Series A 6.25% 12/01/15 240,000 258,000
South Euclid Special
Assessment, GO Limited Tax 6.70% 12/01/14 200,000 221,750
-----------
479,750
OKLAHOMA 2.47%
------------------------------
Oklahoma Agriculture &
Mechanical Colleges Revenue 5.00% 07/01/18 500,000 454,375
See notes to portfolios of investments and notes to financial statements.
47
<PAGE>
TAX-FREE FUND
----------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
----------------------------------------------------------------------------
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
OREGON 2.47%
------------------------------
Multnomah County, GO
Unlimited 4.75% 10/01/15 $ 500,000 $ 453,125
PENNSYLVANIA 2.65%
------------------------------
Chester County Health &
Educational Facilities
Authority Revenue 5.00% 05/15/08 250,000 247,813
Philadelphia Hospital &
Higher Educational
Facilities Authority Revenue 4.95% 06/15/06 265,000 239,163
-----------
486,976
PUERTO RICO 1.64%
------------------------------
Puerto Rico Municipal Finance
Agency 5.00% 08/01/02 300,000 301,875
RHODE ISLAND 5.41%
------------------------------
North Providence, GO
Unlimited Tax, Series A 6.05% 07/01/13 500,000 529,375
Providence Public Building
Authority Revenue, Series B 7.25% 12/15/10 450,000 464,350
-----------
993,725
SOUTH CAROLINA 1.19%
------------------------------
South Carolina Jobs Economic
Development Authority
Revenue 5.00% 11/01/23 250,000 218,750
TEXAS 10.26%
------------------------------
Austin, GO 5.00% 09/01/16 565,000 523,331
Bexar County Independent
School District 5.00% 06/15/18 500,000 453,750
Clear Lake City Independent
School District 5.00% 03/01/18 500,000 454,375
San Antonio Electric & Gas 5.00% 02/01/18 500,000 454,375
-----------
1,885,831
UTAH 1.64%
------------------------------
Weber County School District 5.15% 06/15/08 300,000 302,250
VIRGINIA 2.32%
------------------------------
State Housing Development
Authority Multifamily
Revenue, Series E 5.90% 11/01/17 425,000 426,594
WASHINGTON 1.34%
------------------------------
King & Snohomish Counties'
School District 5.00% 06/15/10 250,000 246,875
See notes to portfolios of investments and notes to financial statements.
48
<PAGE>
TAX-FREE FUND
----------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
----------------------------------------------------------------------------
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
------------------------------
TOTAL MUNICIPAL BONDS $16,743,062
(cost $17,167,154)
REPURCHASE
AGREEMENT 9.57%
Joint Tri-Party Repurchase
Agreement, Donaldson,
Lufkin & Jenrette, 6.57%,
06/30/00, repurchase price
$1,760,535, collateralized
by U.S. Treasury securi-
ties held in a joint
tri-party repurchase
account (cost $1,759,572) 6.57% 07/03/00 $1,759,572 1,759,572
------------------------------
TOTAL INVESTMENTS 100.66% 18,502,634
(cost $18,926,726)
Other assets and liabilities, net (0.66)% (122,612)
-----------
------------------------------
NET ASSETS 100% $18,380,022
-----------
See notes to portfolios of investments and notes to financial statements.
49
<PAGE>
EQUITY INCOME FUND
----------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
----------------------------------------------------------------------------
COMMON STOCKS 90.78% SHARES VALUE
AIRCRAFT & AEROSPACE 0.65%
------------------------------------------
The Boeing Co. 1,300 $ 54,356
BANKS 9.18%
------------------------------------------
Bank of New York Co., Inc. 1,800 83,700
Bank of America Corp. 3,000 129,000
Chase Manhattan Corp. 3,000 138,187
Citigroup, Inc. 3,000 180,750
Fifth Third Bancorp 600 37,950
First Union Corp. 2,000 49,625
FleetBoston Financial Corp. 592 20,128
Mellon Financial Corp. 1,200 43,725
PNC Bank Corp. 700 32,812
Wells Fargo & Co. 1,500 58,125
----------
774,002
BROADCASTING 2.46%
------------------------------------------
Clear Channel Communications, Inc. 1,600 120,000(*)
Hispanic Broadcasting Corp. 1,000 33,125(*)
Infinity Broadcasting Corp., Class A 1,500 54,656(*)
----------
207,781
CHEMICAL & PHARMACEUTICALS 4.81%
------------------------------------------
Dow Chemical Co. 1,500 45,281
E.I. Du Pont De Nemours Co. 500 21,875
Merck & Co. 1,000 76,625
Pharmacia Corp. 5,070 262,056
----------
405,837
COMPUTER & OFFICE EQUIPMENT 4.18%
------------------------------------------
COMPAQ Computer Corp. 4,000 102,250
Hewlett-Packard Co. 2,000 249,750
----------
352,000
COURIER SERVICES 0.32%
------------------------------------------
FedEx Corp. 700 26,600(*)
DATA PROCESSING & SOFTWARE 1.04%
------------------------------------------
Micron Technology, Inc. 1,000 88,062(*)
See notes to portfolios of investments and notes to financial statements.
50
<PAGE>
EQUITY INCOME FUND
----------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
----------------------------------------------------------------------------
COMMON STOCKS SHARES VALUE
ELECTRONICS & COMPONENTS 1.46%
------------------------------------------
Agilent Technologies, Inc. 762 $ 56,198(*)
General Motors Corp., Class H 764 67,041(*)
----------
123,239
ENTERTAINMENT 6.00%
------------------------------------------
Seagram Company, Ltd. 1,000 58,000
Time-Warner, Inc. 2,800 212,800
Viacom Inc., Class B 3,444 234,838(*)
----------
505,638
FINANCIAL SERVICES 7.21%
------------------------------------------
Allstate Corp. 500 11,125
Fannie Mae 1,700 88,719
First Data Corp. 1,000 49,625
Household International, Inc. 1,000 41,563
J.P. Morgan & Co. 400 44,050
Merrill Lynch & Co. 900 103,500
Morgan Stanley Dean Witter & Co. 2,600 216,450
State Street Corp. 500 53,031
----------
608,063
HEALTHCARE 2.13%
------------------------------------------
Columbia/HCA Healthcare Corp. 1,000 30,375
Medtronic, Inc. 3,000 149,438
----------
179,813
INSURANCE 1.73%
------------------------------------------
American General Corp. 600 36,600
Cigna Corp. 500 46,750
Marsh & McLennan Companies, Inc. 600 62,663
----------
146,013
MANUFACTURING 9.11%
------------------------------------------
Applied Materials, Inc. 1,800 163,125(*)
Caterpillar, Inc. 200 6,775
Honeywell International, Inc. 1,300 43,794
Illinois Tool Works, Inc. 1,000 57,000
Philips Electronics N.V., ADR 10,000 475,000
PPG Industries, Inc. 500 22,156
----------
767,850
See notes to portfolios of investments and notes to financial statements.
51
<PAGE>
EQUITY INCOME FUND
----------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
----------------------------------------------------------------------------
COMMON STOCKS SHARES VALUE
MOTOR VEHICLES AND PARTS 0.75%
------------------------------------------
Delphi Automotive Systems 1,300 $ 18,931
Ford Motor Co. 1,000 43,000
Visteon Corp. 130 1,576(*)
----------
63,507
OIL & GAS EXTRACTION 5.93%
------------------------------------------
Anadarko Petroleum Corp. 2,000 98,625
Apache Corp. 2,000 117,625
Baker Hughes, Inc. 1,000 32,000
Conoco, Inc. 1,500 36,844
Halliburton Co. 1,000 47,187
Schlumberger Ltd. 1,000 74,625
Transocean Sedco Forex, Inc. 500 26,719
Unocal Corp. 2,000 66,250
----------
499,875
PETROLEUM PRODUCTION & REFINING 8.35%
------------------------------------------
Chevron Corp. 1,500 127,219
Exxon Mobil Corp. 5,000 392,500
Phillips Petroleum Co. 600 30,412
Royal Dutch Petroleum Co. 2,500 153,906
----------
704,037
PHOTOGRAPHY 0.25%
------------------------------------------
Xerox Corp. 1,000 20,750
PUBLISHING 2.18%
------------------------------------------
New York Times Co., Class A 2,000 79,000
Tribune Co. 3,000 105,000
----------
184,000
RETAIL 0.49%
------------------------------------------
Lowe's Companies, Inc. 1,000 41,063
SHIPPING 0.49%
------------------------------------------
Burlington Northern Santa Fe Corp. 1,000 22,937
Union Pacific Corp. 500 18,594
----------
41,531
STEEL 0.34%
------------------------------------------
Alcoa, Inc. 1,000 29,000
See notes to portfolios of investments and notes to financial statements.
52
<PAGE>
EQUITY INCOME FUND
----------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
----------------------------------------------------------------------------
COMMON STOCKS SHARES VALUE
TELECOMMUNICATIONS 14.96%
------------------------------------------
AT&T Corp. 3,000 $ 94,875
Bell Atlantic Corp. 3,604 183,128
Bellsouth Corp. 2,900 123,613
Global Crossing, Ltd. 10,000 263,125(*)
GTE Corp. 2,000 124,500
Motorola, Inc. 4,200 122,062
Nextel Communications, Inc., Class A 1,400 85,663(*)
Sprint Corp. 2,000 102,000
Sprint Corp., PCS Group 1,000 59,500(*)
US West, Inc. 1,200 102,900
----------
1,261,366
TOBACCO 0.32%
------------------------------------------
Philip Morris, Inc. 1,000 26,563
UTILITIES 6.44%
------------------------------------------
AES Corp. 1,500 68,437(*)
American Electric Power Co., Inc. 900 26,662
Enron Corp. 5,000 322,500
PG&E Corp. 900 22,162
Reliant Energy, Inc. 1,500 44,344
Southern Co. 1,000 23,313
TXU Corp. 500 14,750
Williams Companies, Inc. 500 20,844
----------
543,012
------------------------------------------
TOTAL COMMON STOCKS 7,653,958
(cost $6,185,513)
PREFERRED STOCKS 5.88%
BROADCASTING 0.69%
------------------------------------------
Emmis Communications Corp., 6.25%, Series A 1,000 58,000
FINANCIAL SERVICES 2.48%
------------------------------------------
Citigroup Capital VI, 6.875% 10,000 208,750
REAL ESTATE INVESTMENT TRUSTS 1.16%
------------------------------------------
Fleet Capital Trust, 7.05%, Series III 2,000 41,750
Public Storage, Inc., 8.875%, Series G 2,500 56,250
----------
98,000
See notes to portfolios of investments and notes to financial statements.
53
<PAGE>
EQUITY INCOME FUND
----------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
----------------------------------------------------------------------------
PREFERRED STOCKS SHARES VALUE
TELECOMMUNICATIONS 1.04%
------------------------------------------
Global Crossing Ltd., 6.75% 400 $ 88,000
UTILITIES 0.51%
------------------------------------------
Duke Energy Capital Trust, 7.20% 2,000 43,250
------------------------------------------
TOTAL PREFERRED STOCKS 496,000
(cost $570,638)
PRINCIPAL
REPURCHASE AGREEMENT 6.35% AMOUNT
Joint Tri-Party Repurchase Agreement,
Donaldson, Lufkin & Jenrette, 6.57%,
06/30/00, due 07/03/00, repurchase price
$535,161, collateralized by U.S. Treasury
securities held in a joint tri-party
repurchase account (cost $534,868) $ 534,868 534,868
------------------------------------------
TOTAL INVESTMENTS 103.01% 8,684,826
(cost $7,291,019)
Other assets and liabilities, net (3.01)% (253,755)
----------
------------------------------------------
NET ASSETS 100% $8,431,071
----------
See notes to portfolios of investments and notes to financial statements.
54
<PAGE>
ALL AMERICAN EQUITY FUND
---------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
---------------------------------------------------------------------------
COMMON STOCKS 93.46% SHARES VALUE
BANKS 4.30%
------------------------------------------
Bank of America Corp. 8,800 $ 378,400
Bank of New York Co., Inc. 2,000 93,000
Chase Manhattan Corp. 9,450 435,291
Citigroup, Inc. 16,350 985,087
-----------
1,891,778
BEVERAGES 2.10%
------------------------------------------
Anheuser Busch Co. 2,000 149,375
Coca-Cola Co. 13,500 775,406
-----------
924,781
BROADCAST/MEDIA 1.00%
------------------------------------------
Clear Channel Communications, Inc. 2,000 150,000(*)
Hispanic Broadcasting Corp. 2,600 86,125(*)
Viacom, Inc., Class A 3,000 205,125(*)
-----------
441,250
COMPUTER & OFFICE EQUIPMENT 9.69%
------------------------------------------
Apple Computer, Inc. 12,000 628,500(*)
Cisco Systems, Inc. 25,000 1,589,062(*)
COMPAQ Computer Corp. 11,000 281,188
Dell Computer Corp. 1,000 49,313(*)
Hewlett-Packard Co. 4,000 499,500
IBM Corp. 7,000 766,937
Sun Microsystems, Inc. 5,000 454,688(*)
-----------
4,269,188
DATA PROCESSING & SOFTWARE 6.59%
------------------------------------------
ChoicePoint, Inc. 6,000 267,000(*)
Computer Associates International, Inc. 5,000 255,937
Microsoft Corp. 7,000 560,000(*)
Oracle Corp. 21,636 1,818,776(*)
-----------
2,901,713
ELECTRONICS & COMPONENTS 7.90%
------------------------------------------
Agilent Technologies, Inc. 1,525 112,469(*)
Applied Materials, Inc. 4,700 425,938(*)
Conexant Systems, Inc. 2,000 97,250(*)
General Motors Corp., Class H 800 70,200
Intel Corp. 17,080 2,283,382
Motorola, Inc. 12,000 348,750
RadioShack Corp. 3,000 142,125
-----------
3,480,114
See notes to portfolios of investments and notes to financial statements.
55
<PAGE>
ALL AMERICAN EQUITY FUND
---------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
---------------------------------------------------------------------------
COMMON STOCKS SHARES VALUE
ENTERTAINMENT 1.36%
------------------------------------------
The Walt Disney Co. 6,000 $ 232,875
Time-Warner, Inc. 4,800 364,800
-----------
597,675
FINANCIAL SERVICES 6.33%
------------------------------------------
American Express Co. 15,510 808,459
Charles Schwab Corp. 3,000 100,875
Fannie Mae 22,000 1,148,125
Federated Investors, Inc., Class B 14,100 494,381
Freddie Mac 5,800 234,900
-----------
2,786,740
HEALTHCARE & EQUIPMENT 2.58%
------------------------------------------
Guidant Corp. 2,408 119,196(*)
Johnson & Johnson Co. 10,000 1,018,750
-----------
1,137,946
HOUSEHOLD APPLIANCES 7.33%
------------------------------------------
General Electric Co. 60,900 3,227,700
HOUSEHOLD PRODUCTS 0.26%
------------------------------------------
Proctor & Gamble Co. 2,000 114,500
INSURANCE 2.67%
------------------------------------------
American International Group 10,000 1,175,000
MACHINERY 0.57%
------------------------------------------
Cooper Cameron Corp. 1,500 99,000(*)
Weatherford International, Inc. 3,800 151,288(*)
-----------
250,288
MANUFACTURING 0.17%
------------------------------------------
Honeywell International, Inc. 2,200 74,113
MOTOR VEHICLES & PARTS 0.37%
------------------------------------------
Delphi Automotive Systems Corp. 5,000 72,812
Ford Motor Co. 2,000 86,000
Visteon Corp. 261 3,165(*)
-----------
161,977
See notes to portfolios of investments and notes to financial statements.
56
<PAGE>
ALL AMERICAN EQUITY FUND
---------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
---------------------------------------------------------------------------
COMMON STOCKS SHARES VALUE
OIL & GAS EXTRACTION 3.59%
------------------------------------------
Apache Corp. 3,200 $ 188,200(*)
Baker Hughes, Inc. 5,500 176,000
Blackrock Ventures, Inc. 340,000 222,988(*)
Conoco, Inc., Class B 3,800 93,337
ENSCO International, Inc. 4,000 143,250
EOG Resources, Inc. 5,000 167,500
Global Marine, Inc. 4,000 112,750(*)
Halliburton Co. 2,000 94,375
Schlumberger Ltd. 2,800 208,950
Unocal Corp. 5,200 172,250
-----------
1,579,600
PETROLEUM PRODUCTION & REFINING 3.29%
------------------------------------------
Chevron Corp. 2,600 220,513
Exxon Mobil Corp. 3,952 310,232
Phillips Petroleum Co. 5,100 258,506
Royal Dutch Petroleum Co. 4,100 252,406
Sunoco, Inc. 2,000 58,875
Texaco, Inc. 4,200 223,650
Tosco Corp. 4,500 127,406
-----------
1,451,588
PHARMACEUTICALS 11.87%
------------------------------------------
Abbott Laboratories 12,000 534,750
American Home Products Corp. 5,400 317,250
Biogen, Inc. 2,000 129,000(*)
Bristol-Myers Squibb Co. 7,000 407,750
Eli Lilly & Co. 8,496 848,538
Merck & Co., Inc. 10,000 766,250
Pfizer, Inc. 34,575 1,659,600
Schering-Plough Corp. 11,200 565,600
-----------
5,228,738
RESTAURANTS 0.42%
------------------------------------------
McDonald's Corp. 5,600 184,450
RETAIL 5.97%
------------------------------------------
Gap, Inc. 2,000 62,500
Gucci Group NV 1,000 94,750
Home Depot, Inc. 15,600 779,025
Intimate Brands, Inc., Class A 4,000 79,000
Wal-Mart Stores, Inc. 28,000 1,613,500
-----------
2,628,775
See notes to portfolios of investments anes to financial statements.
57
<PAGE>
ALL AMERICAN EQUITY FUND
---------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
---------------------------------------------------------------------------
COMMON STOCKS SHARES VALUE
TELECOMMUNICATIONS 13.15%
------------------------------------------
AT&T Corp. 23,912 $ 756,217
AT&T Corp., Liberty Media, Class A 4,948 119,989
Axxent Inc. 28,000 201,623(*)
Bell Atlantic Corp. 5,810 295,220
Bellsouth Corp. 9,200 392,150
Corning, Inc. 2,000 539,750
GTE Corp. 6,000 373,500(*)
Lucent Technologies, Inc. 12,000 711,000
Nokia Corp., ADR 4,000 199,750(*)
SBC Communications, Inc. 17,001 735,293
Sprint Corp. 6,300 321,300
Sprint Corp., PCS Group 4,400 261,800
US West, Inc. 1,849 158,552
Vodafone Airtouch plc, ADR 5,000 207,187
Worldcom, Inc. 11,287 517,791(*)
-----------
5,791,122
UTILITIES 1.95%
------------------------------------------
AES Corp. 4,900 223,563(*)
Coastal Corp. 1,500 91,313
Enron Corp. 6,500 419,250
Williams Companies, Inc. 3,000 125,063
-----------
859,189
------------------------------------------
TOTAL COMMON STOCKS 41,158,225
(cost $20,381,525)
PURCHASED OPTIONS 1.03% CONTRACTS
COMPUTER & OFFICE EQUIPMENT 0.36%
------------------------------------------
Sun Microsystems, Inc., Strike Price 60,
Call, Expiration Jan. 2001 (premium $95,010) 45 159,188
ELECTRICAL ENGINEERING & ELECTRONICS 0.14%
------------------------------------------
Tyco International Ltd., Strike Price 40,
Call, Expiration Jan. 2001 (premium $9,810) 10 11,125
Tyco International Ltd., Strike Price 90,
Call, Expiration Jan. 2001 (premium $51,840) 60 52,500
-----------
63,625
INTERNET 0.06%
------------------------------------------
America Online, Inc., Strike Price 60, Call,
Expiration Jan. 2001 (premium $136,400) 50 28,125
See notes to portfolios of investments and notes to financial statements.
58
<PAGE>
ALL AMERICAN EQUITY FUND
---------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
---------------------------------------------------------------------------
PURCHASED OPTIONS SHARES VALUE
OIL & GAS EXTRACTION 0.12%
------------------------------------------
Baker Hughes Inc., Strike Price 30, Call,
Expiration Jan. 2001 (premium $8,670) 15 $ 10,313
Schlumberger Ltd., Strike Price 60, Call,
Expiration Jan. 2001 (premium $25,107) 15 42,938
-----------
53,251
PAPER PRODUCTS 0.01%
------------------------------------------
International Paper Co., Strike Price 50,
Call, Expiration Jan. 2001 (premium $37,650) 50 2,500
PETROLEUM PRODUCTION & REFINING 0.13%
------------------------------------------
Exxon Mobil Corp., Strike Price 100, Call,
Expiration Jan. 2001 (premium $11,780) 10 11,563
Exxon Mobil Corp., Strike Price 80, Call,
Expiration Jan. 2001 (premium $33,303) 30 18,750
Unocal, Strike Price 40, Call, Expiration
Jan. 2001 (premium $50,300) 100 26,250
-----------
56,563
TELECOMMUNICATIONS 0.21%
------------------------------------------
Nokia Corp., Strike Price 120, Call,
Expiration Jan. 2001
(premium $29,780) 40 91,500
------------------------------------------
TOTAL PURCHASED OPTIONS 454,752
(cost $489,650)
PRINCIPAL
REPURCHASE AGREEMENT 6.25% AMOUNT
Joint Tri-Party Repurchase Agreement, $2,750,624 2,750,624
Donaldson, Lufkin & Jenrette, 6.57%,
06/30/00, due 07/03/00, repurchase price
$2,752,130, collateralized by U.S.
Treasury securities held in a joint
tri-party repurchase account (cost
$2,750,624)
------------------------------------------
TOTAL INVESTMENTS 100.74% 44,363,601
(cost $23,621,799)
Other assets and liabilities, net (0.74)% (325,521)
-----------
NET ASSETS 100% $44,038,080
-----------
See notes to portfolios of investments and notes to financial statements.
59
<PAGE>
REAL ESTATE FUND
-----------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
-----------------------------------------------------------------------
COMMON STOCKS 96.06% SHARES VALUE
REAL ESTATE INVESTMENT TRUSTS 85.63%
DIVERSIFIED 6.42%
------------------------------------------
Canadian Real Estate Investment Trust 10,000 $ 76,065
Duke-Weeks Realty Corp. 5,000 111,875
Pacific Gulf Properties, Inc. 5,000 125,313
Summit Real Estate Investment Trust 5,800 43,137
----------
356,390
HOTELS & LODGING PROPERTIES 1.22%
------------------------------------------
FelCor Lodging Trust, Inc. 1,000 18,500
Hilton Hotels Corp. 3,000 28,125
MeriStar Hospitality Corp. 1,000 21,000
----------
67,625
OFFICE/INDUSTRIAL 37.34%
------------------------------------------
AMB Property Corp. 10,000 228,125
Arden Realty, Inc. 1,600 37,600
Boston Properties, Inc. 7,000 270,375
CarrAmerica Realty Corp. 3,000 79,500
Equity Office Properties Trust 9,000 248,062
H&R Real Estate Investment Trust 25,800 196,247
Kilroy Realty Corp. 300 7,781
Liberty Property Trust 8,000 207,500
Mack-Cali Realty Corp. 6,000 154,125
ProLogis Trust 5,000 106,563
Reckson Associates Realty Corp. 7,886 200,600
SL Green Realty Corp. 4,000 107,000
Spieker Properties, Inc. 5,000 230,000
----------
2,073,478
RESIDENTIAL PROPERTIES 36.27%
------------------------------------------
Apartment Investment & Management Co. 5,000 216,250
Archstone Communities Trust 10,000 210,625
Avalonbay Communities, Inc. 6,500 271,375
BRE Properties, Inc., Class A 4,000 115,500
Camden Property Trust 4,000 117,500
Charles E. Smith Residential Realty, Inc. 5,000 190,000
Equity Resident Property Trust 6,000 276,000
Essex Property Trust, Inc. 3,000 126,000
Manufactured Home Communities, Inc. 8,100 193,894
Post Properties, Inc. 6,750 297,000
----------
2,014,144
See notes to portfolios of investments and notes to financial statements.
60
<PAGE>
REAL ESTATE FUND
------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
------------------------------------------------------------------------
COMMON STOCKS SHARES VALUE
RETAIL PROPERTIES 4.38%
------------------------------------------
JDN Realty Corp. 5,000 $ 50,938
Pan Pacific Retail Properties, Inc. 1,000 20,125
RioCan Real Estate Investment Trust 12,000 74,645
Simon Property Group, Inc. 4,400 97,625
----------
243,333
OTHER REAL ESTATE 10.43%
HOTELS & LODGING PROPERTIES 5.53%
------------------------------------------
Intrawest Corp. 2,000 38,134
Shangri-La Asia Ltd. 35,000 41,081
Starwood Hotels & Resorts Worldwide, Inc. 7,000 227,938
----------
307,153
OFFICE/INDUSTRIAL 4.90%
------------------------------------------
Trizec Hahn Corp. 15,200 272,346
------------------------------------------
TOTAL COMMON STOCKS 5,334,469
(cost $5,030,560)
PRINCIPAL
REPURCHASE AGREEMENT 3.91% AMOUNT
Joint Tri-Party Repurchase Agreement,
Donaldson, Lufkin & Jenrette, 6.57%,
06/30/00, due 07/03/00, repurchase price
$217,476, collateralized by U.S. Treasury
securities held in a joint tri-party
repurchase account (cost $217,357) $ 217,357 217,357
------------------------------------------
TOTAL INVESTMENTS 99.97% 5,551,826
(cost $5,247,917)
Other assets and liabilities, net 0.03% 1,458
----------
------------------------------------------
NET ASSETS 100% $5,553,284
----------
See notes to portfolios of investments and notes to financial statements.
61
<PAGE>
CHINA REGION OPPORTUNITY FUND
----------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
----------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS 93.35% SHARES VALUE
AIRLINES 0.13%
---------------------------------------
Cathay Pacific Airways 15,295 $ 28,253
APPAREL 15.46%
---------------------------------------
Giordano International Ltd. 299,000 454,512
Li & Fung Ltd. 545,000 2,726,573
Yue Yuen Industrial Holdings Ltd. 49,200 108,555
-----------
3,289,640
BANKING & FINANCIAL SERVICES 7.23%
---------------------------------------
Hang Seng Bank Ltd. 8,642 81,758
HSBC Holdings plc 110,000 1,259,380
SE Global Equities (RS) 1,538,462 197,353(*)
-----------
1,538,491
CHEMICALS & ALLIED PRODUCTS 3.63%
---------------------------------------
Shanghai Petrochemical Ltd., Class H 1,452,000 197,437
Yizheng Chemical Fibre Co., Class H 1,844,000 366,647(*)
Zhenhai Refining and Chemical Co., Ltd.,
Class H 1,340,000 207,992
-----------
772,076
CLOSED END FUNDS 1.40%
---------------------------------------
Cathay Investment Fund 350,000 65,371(*)
iShares MSCI Malaysia Index Fund 37,000 231,250
-----------
296,621
COMPUTERS & OFFICE EQUIPMENT 2.17%
---------------------------------------
Acer, Inc., GDR 18,866 176,869(*)
GVC Corp., GDR, 144A 93 293(*)
Legend Holdings Ltd. 120,000 116,221
Vanda Systems & Communications
Holdings Ltd. 500,000 168,366(*)
-----------
461,749
CONGLOMERATES 11.71%
---------------------------------------
China Vanke Co., Ltd. 80,319 40,389
Citic Pacific Ltd. 109,614 575,103
First Pacific Co., Ltd. 648,387 220,412
Hutchison Whampoa Ltd. 103,970 1,307,044
Shanghai Industrial Holdings Ltd. 193,005 349,095
-----------
2,492,043
See notes to portfolios of investments and notes to financial statements.
62
<PAGE>
CHINA REGION OPPORTUNITY FUND
-----------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
-----------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS SHARES VALUE
CONSTRUCTION 0.08%
---------------------------------------
Cheung Kong Infrastructure Holdings 10,188 $ 16,728
ELECTRIC GENERATION 0.21%
---------------------------------------
CLP Holdings Ltd. 9,406 43,799
ELECTRONIC EQUIPMENT 10.72%
---------------------------------------
ASM Pacific Technology Ltd. 306,000 1,146,200
Hanny Holdings Ltd. 540,000 36,021(*)
Johnson Electric Holdings 4,149 39,385(*)
Samsung Electronics, GDR
Non-Voting Shares, 144A 3,380 308,848
Samsung Electronics, GDR 1/2 Voting,
144A 132 25,872
Taiwan Semiconductor Manufacturing
Co., Ltd. Sponsored ADR 5,120 198,400(*)
TCL International Holdings Ltd. 340,000 124,302(*)
Varitronix International Ltd. 100,000 173,818
VTech Holdings Ltd. 60,000 227,054
Yageo Corp. 1 8
-----------
2,279,908
FURNITURE 0.02%
---------------------------------------
Lamex Holdings Ltd. 300,000 4,695(*)
HOTELS 0.26%
---------------------------------------
Shangri-La Asia Ltd. 46,020 54,016
HOUSEHOLD APPLIANCES 1.45%
---------------------------------------
Guangdong Kelon Electronics Holdings 570,000 308,928
INTERNET 6.46%
---------------------------------------
Merendon International, Inc. 800,000 1,098,400(*)(+)
Pacific Century CyberWorks Ltd. 140,000 276,570(*)
-----------
1,374,970
MOTOR VEHICLES & TRANSPORTATION 0.91%
---------------------------------------
Qingling Motors Co., Ltd., Class H 1,688,000 192,716
OFFICE SUPPLIES 0.00%
---------------------------------------
China First Pencil Co., Ltd. 1 0(*)
Shanghai Hero Co., Ltd., Group B 1 0(*)
-----------
0
See notes to portfolios of investments and notes to financial statements.
63
<PAGE>
CHINA REGION OPPORTUNITY FUND
-----------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
-----------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS SHARES VALUE
PHARMACEUTICALS 3.04%
---------------------------------------
Dragon Pharmaceuticals, Inc. (RS) 100,000 $ 444,800(*)
Dragon Pharmaceuticals, Inc.,
Warrants (RS) 100,000 201,100(*)
---------
645,900
PUBLISHING 1.32%
---------------------------------------
Alpha Communications Corp. 306,800 103,719(*)(+)
Alpha Communications Corp. (RS) 750,000 177,485(*)(+)
Alpha Communications Corp., Class A
Warrants (RS) 375,000 0(*)(+)
Alpha Communications Corp., Class B
Warrants (RS) 375,000 0(*)(+)
---------
281,204
REAL ESTATE DEVELOPERS 5.94%
---------------------------------------
Cheung Kong Holdings Ltd. 60,386 664,242
Pacific Century Regional
Development Ltd. 25,000 341,534(*)
Silver Grant International Industries,
Warrants 74,000 0(*)
Sun Hung Kai Properties HK 35,852 257,548
---------
1,263,324
RETAIL 1.80%
---------------------------------------
China Everbright-IHD Pacific Ltd. 140,000 108,652
Glorious Sun Enterprises Ltd. 984,000 274,543
Shanghai Friendship & Overseas Chinese
Co., Group B 1 0(*)
---------
383,195
TELECOMMUNICATIONS 10.54%
---------------------------------------
China Telecom Ltd., ADR 5,000 889,063(*)
China Telecom Ltd., Class H 61,948 546,331(*)
China Unicom Ltd. 62,000 130,832(*)
Hong Kong Telecommunications Ltd. 142,315 314,004(*)
Shanghai Posts & Telecommunications, Group B 428,976 147,568(*)
SK Telecom Company Ltd., ADR 3,000 108,938
SmarTone Telecommunications Holdings, Ltd. 47,721 105,598
---------
2,242,334
UTILITIES 4.59%
---------------------------------------
Hong Kong & China Gas Co. 393,962 444,727
Huaneng Power International, Inc., ADR 25,000 332,813
Shandong Huaneng Power Company Ltd., ADR 47,600 199,325
---------
976,865
See notes to portfolios of investments and notes to financial statements.
64
<PAGE>
CHINA REGION OPPORTUNITY FUND
-------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
-------------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS SHARES VALUE
WATER TRANSPORTATION & SERVICES 4.28%
---------------------------------------
China International Marine Container Co.,
Group B 835,059 $ 635,225
Cosco Pacific Ltd. 350,000 276,121
-----------
911,346
---------------------------------------
TOTAL COMMON STOCKS AND WARRANTS 19,858,801
(cost $16,098,048)
PRINCIPAL
REPURCHASE AGREEMENT 6.70% AMOUNT
Joint Tri-Party Repurchase Agreement,
Donaldson, Lufkin & Jenrette, 6.57%,
06/30/00, due 07/03/00, repurchase
price $1,425,787, collateralized by
U.S. Treasury securities held in a
joint tri-party repurchase account
(cost $1,425,007) $ 1,425,007 1,425,007
---------------------------------------
TOTAL INVESTMENTS 100.05% 21,283,808
(cost $17,523,055)
Other assets and liabilities, net (0.05)% (11,184)
-----------
---------------------------------------
NET ASSETS 100% $21,272,624
-----------
See notes to portfolios of investments and notes to financial statements.
65
<PAGE>
GLOBAL RESOURCES FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
--------------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS 96.40% SHARES VALUE
CHEMICALS & ALLIED PRODUCTS 4.78%
---------------------------------------
Dow Chemical Co. 10,500 $ 316,969
Eastman Chemical Co. 2,000 95,500
Ecolab, Inc. 2,500 97,656
Methanex Corp. 10,000 33,469(*)
Rohm & Haas Co. 3,000 103,500
-----------
647,094
DIVERSIFIED MINING 1.80%
---------------------------------------
De Beers Consolidated Mines Ltd., ADR 10,000 243,125
FORESTRY 1.14%
---------------------------------------
Weyerhaeuser Co. 3,600 154,800
GOLD & SILVER MINING 1.14%
---------------------------------------
Barrick Gold Corp. 1,800 32,738
ECU Silver Mining, Inc. 100,000 5,409(*)
ECU Silver Mining, Inc., Warrants 50,000 0(*)
International Annax Ventures, Inc. 100,000 18,594(*)
Newmont Mining Corp. 4,500 97,312
-----------
154,053
METAL & MINERAL MINING 8.16%
---------------------------------------
Alcoa, Inc. 21,992 637,768
Diamondex Resources Ltd. 2,500 1,504(*)
Freeport McMoRan Copper & Gold, Inc., Class B 10,000 92,500(*)
Inco Ltd. 8,000 123,000(*)
Osmium Holdings S.A. (RS) 104 31,200(*)
WMC Ltd. 40,000 178,530
Zimasco Consolidated Enterprises Ltd. (RS) 40,000 40,000
-----------
1,104,502
OIL & GAS EXTRACTION 25.28%
---------------------------------------
Anadarko Petroleum Corp. 4,000 197,250
Anderson Exploration Ltd. 10,386 188,904(*)
Apache Corp. 3,000 176,437
Beau Canada Exploration Ltd. 90,000 98,580(*)
BlackRock Ventures, Inc. 200,000 131,170(*)
Canadian Hunter Exploration Ltd. 6,000 127,586(*)
Conoco, Inc., Class B 10,700 262,819
Hilton Petroleum Ltd. 10,000 15,348(*)
Noble Affiliates, Inc. 3,500 130,375
Phillips Petroleum Co. 7,000 354,812
See notes to portfolios of investments and notes to financial statements.
66
<PAGE>
GLOBAL RESOURCES FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
--------------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS SHARES VALUE
OIL & GAS EXTRACTION (CONT'D)
---------------------------------------
Rio Alto Exploration Ltd. 10,000 $ 183,232(*)
Rowan Companies, Inc. 3,000 91,125(*)
Schlumberger Ltd. 11,000 820,875
Talisman Energy, Inc. 3,000 99,493(*)
Tanganyika Oil Co., Ltd. 50,000 64,233(*)
Transocean Sedco Forex, Inc. 1,000 53,437
Ultra Petroleum Corp. 50,000 94,659(*)
Union Pacific Resources Group, Inc. 6,000 132,000
Unocal Corp. 6,000 198,750
-----------
3,421,085
OIL & GAS FIELD MACHINERY 0.73%
---------------------------------------
Global Marine, Inc. 3,500 98,656(*)
OIL & GAS FIELD SERVICES 6.30%
---------------------------------------
Baker Hughes, Inc. 11,000 352,000
Cooper Cameron Corp. 2,000 132,000(*)
ENSCO International, Inc. 3,000 107,438
Noble Drilling Corp. 2,000 82,375(*)
Weatherford International, Inc. 4,500 179,156(*)
-----------
852,969
OIL & GAS INTEGRATED 4.61%
---------------------------------------
Amerada Hess Corp. 2,000 123,500
EOG Resources, Inc. 2,700 90,450
Halliburton Co. 7,000 330,312
Kerr-Mcgee Corp. 1,000 58,938
Veteran Resources, Inc. 50,000 20,284(*)
-----------
623,484
PAPER PRODUCTS 2.34%
---------------------------------------
Bowater, Inc. 5,000 220,625
Willamette Industries, Inc. 3,500 95,375
-----------
316,000
PETROLEUM PRODUCTION & REFINING 30.20%
---------------------------------------
BP Amoco plc, ADR 1,640 92,763
Berkley Petroleum Corp. 1,000 6,322(*)
Canadian Occidental Petroleum Ltd. 5,000 135,734
Chevron Corp. 7,000 593,687
Exxon Mobil Corp. 26,000 2,041,000
See notes to portfolios of investments and notes to financial statements.
67
<PAGE>
GLOBAL RESOURCES FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
--------------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS SHARES VALUE
PETROLEUM PRODUCTION & REFINING (CONT'D)
---------------------------------------
Royal Dutch Petroleum Co. 5,000 $ 307,812
Sunoco, Inc. 2,000 58,875
Texaco, Inc. 9,000 479,250
Tosco Corp. 3,300 93,431
Total Fina ELF SA, Sponsored ADR 3,200 245,800
Valero Energy Corp. 1,000 31,750
-----------
4,086,424
UTILITIES 9.92%
---------------------------------------
AES Corp. 2,600 118,625(*)
Coastal Corp. 3,000 182,625
El Paso Energy Gas Co. 3,200 163,000
Enron Corp. 13,600 877,200
-----------
1,341,450
--------------------------------------------------------------------------------
TOTAL COMMON STOCKS AND WARRANTS 13,043,642
--------------------------------------------------------------------------------
(cost $12,404,940)
RIGHTS 0.00%
CHEMICALS & ALLIED PRODUCTS 0.00%
---------------------------------------
IMC Global, Inc., Rights 3,800 0
(cost $0)
PURCHASED OPTIONS 0.71% CONTRACTS VALUE
OIL & GAS EXTRACTION 0.32%
---------------------------------------
Schlumberger Ltd., Strike Price 60,
Call, Expiration Jan. 2001
(premium $25,107) 15 42,938
OIL & GAS FIELD SERVICES 0.03%
---------------------------------------
Baker Hughes, Inc., Strike Price 30, Call,
Expiration Jan. 2001 (premium $2,890) 5 3,438
See notes to portfolios of investments and notes to financial statements.
68
<PAGE>
GLOBAL RESOURCES FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
--------------------------------------------------------------------------------
PURCHASED OPTIONS CONTRACTS VALUE
PETROLEUM PRODUCTION & REFINING 0.36%
---------------------------------------
Exxon Corp., Strike Price 100, Call,
Expiration Jan. 2001 (premium $17,670) 15 $ 17,345
Exxon Corp., Strike Price 80, Call, Expiration
Jan. 2001 (premium $54,688) 50 31,250
-----------
48,595
---------------------------------------
TOTAL PURCHASED OPTIONS 94,971
(cost $100,355)
PRINCIPAL
REPURCHASE AGREEMENT 5.51% AMOUNT
Joint Tri-Party Repurchase Agreement,
Donaldson, Lufkin & Jenrette, 6.57%,
06/30/00, due 07/03/00, repurchase
price $746,556, collateralized by U.S.
Treasury securities held in a joint
tri-party repurchase account (cost
$746,147) $ 746,147 746,147
---------------------------------------
TOTAL INVESTMENTS 102.62% 13,884,760
(cost $13,251,442)
Other assets and liabilities, net (2.62)% (354,603)
-----------
---------------------------------------
NET ASSETS 100% $13,530,157
-----------
See notes to portfolios of investments and notes to financial statements.
69
<PAGE>
WORLD GOLD FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
--------------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS 96.88% SHARES VALUE
CHEMICALS & ALLIED PRODUCTS 0.18%
---------------------------------------
Methanex Corp. 30,000 $ 100,406(*)
DIAMOND MINING & EXPLORATION 6.78%
---------------------------------------
Aber Resources Ltd. 29,400 187,850(*)
Canabrava Diamond Corp. 400,000 229,885(*)
De Beers Centenary, Linked Units 39,600 962,774
De Beers Consolidated Mines Ltd., ADR 20,000 486,250
DIA Met Minerals Ltd., Class B 40,000 540,906(*)
Diamond Fields International Ltd. 150,000 125,760(*)
Namibian Minerals Corp. 80,000 289,995
Star Resources Corp. 1,817,400 1,044,483(*)(+)
-----------
3,867,903
GOLD/MINERAL EXPLORATION & DEVELOPMENT 21.01%
---------------------------------------
Adulis Minerals Corp. 390,000 47,465(*)(+)
Adulis Minerals Corp., Special Warrants (RS) 200,000 24,341(*)(+)
Adulis Minerals Corp., Warrants 390,000 0(*)(+)
AMT International Mining Corp. 1,976,350 467,696(*)(+)
Anooraq Resource Corp. 300,000 139,959(*)
Anooraq Resources Corp., Warrants 150,000 0(*)
Argosy Minerals, Inc. 823,720 116,958(*)
Augusta Resource Corp. 990,987 100,506(*)(+)
Balaclava Mines, Inc. 400,000 43,272(*)
Ballarat Goldfields NL 1,043,103 42,987(*)
Bema Gold Corp. 400,000 210,953(*)
Bitterroot Resources Ltd. 450,000 33,469(*)
Brasilca Mining Corp. 300,000 56,795(*)
Canarc Resource Corp. 750,000 139,452(*)
Centaur Mining & Exploration Ltd. 1,000,000 71,670(*)
Chilean Gold Ltd. (RS) 500,000 0(*)
Comaplex Minerals Corp. 100,000 94,659(*)
Continental Precious Minerals, Inc. 200,000 81,136(*)
Corriente Resources, Inc. 50,000 48,343(*)
Corriente Resources, Inc., Special
Warrants (RS) 150,000 149,087(*)
Dynacor Mines, Inc. 85,600 9,550(*)
ECU Silver Mining, Inc. 700,000 37,863(*)
ECU Silver Mining, Inc., Warrants 350,000 0(*)
Elkhorn Gold Mining Corp. 168,000 15,903(*)
Far West Mining Ltd. 200,000 94,659(*)
First Point Minerals Corp. Units (RS) 500,000 170,723(*)
Fischer Watt Gold, Inc. 940,600 51,733(*)
General Minerals Corp. 99,200 19,451(*)
Gitennes Exploration, Inc. 200,000 20,284(*)
Glencar Mining plc 872,438 141,853(*)
Global-Pacific Minerals, Inc. 500,000 128,465(*)
See notes to portfolios of investments and notes to financial statements.
70
<PAGE>
WORLD GOLD FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
--------------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS SHARES VALUE
GOLD/MINERAL EXPLORATION & DEVELOPMENT (CONT'D)
---------------------------------------
Golden Star Resources Ltd. 200,000 $ 187,500(*)
Golden Star Resources Ltd., Warrants 500,000 119,000(*)
Great Basin Gold Ltd. 300,000 389,452(*)
Great Basin Gold Ltd., Warrants 100,000 41,920(*)
Inca Pacific Resources, Inc. 200,000 93,306(*)
Inca Pacific Resources, Inc. Warrants 100,000 6,085(*)
International Annax Ventures, Inc. 400,000 74,375(*)
International Wayside Gold Mines Ltd. 261,100 252,450(*)
LionOre Mining International Ltd. 275,000 297,498(*)
Madison Enterprises Corp. 250,000 98,039(*)
Manhattan Minerals Corp. 300,000 649,087(*)
Miranda Mining, Inc. 1,600,000 373,225(*)
Moydow Mines International, Inc. 491,500 398,783(*)(+)
Moydow Mines International, Inc., Warrants 100,000 0(*)(+)
Mustang Minerals Corp., Special Warrants (RS) 400,000 175,794
Navigator Exploration Corp. 100,000 33,807(*)
Nevsun Resources Ltd. 1,025,000 228,702(*)
Norcal Resources Ltd. 470,000 49,256(*)
Nuinsco Resources Ltd. 100,000 28,398(*)
Opawica Explorations, Inc. 400,000 140,636(*)
Orezone Resources, Inc. 1,016,000 142,886(*)(+)
Ormonde Mining plc 3,607,143 243,968(*)(+)
Osmium Holdings S.A. (RS) 891 267,300(*)
Pacific Rim Mining Corp. 302,500 930,612(*)
Pacific Rim Mining Corp., Special Units (RS) 300,000 922,921(*)
Patrician Consolidated Gold Mines Ltd. 56,200 6,840(*)
Platinova A/S 63,300 4,922(*)
Platinova Resources Ltd., Special Shares 36,700 2,357(*)
Radius Explorations Ltd. 100,000 64,233(*)
Radius Explorations Ltd., Units (RS) 125,000 92,968(*)
Red Back Mining NL 1,000,000 89,587(*)
Romarco Minerals, Inc. 1,500,000 507,099(*)(+)
Solitario Resources Corp. 459,522 528,186(*)
Southwestern Gold Corp. 82,800 246,329(*)
Stillwater Mining Company 30,000 836,250(*)
Tenke Mining Corp. 200,000 87,897(*)
Wesdome Gold Mines Inc. 1,585 563(*)
Western Exploration & Development Ltd.,
Special Warrants (RS) 600,000 255,000(*)(+)
Yamana Resources, Inc. 330,000 73,631
Zimasco Consolidated Enterprises Ltd. (RS) 350,000 350,000
Zimbabwe Platinum Mines Ltd. 1,076,534 130,521(*)
-----------
11,980,615
See notes to portfolios of investments and notes to financial statements.
71
<PAGE>
WORLD GOLD FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
--------------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS SHARES VALUE
INTERMEDIATE & JUNIOR GOLD PRODUCERS 16.60%
---------------------------------------
Delta Gold NL 3,900,000 2,890,630
Geomaque Explorations Ltd. 200,000 40,568(*)
IAMGOLD Corp. 1,461,900 3,014,736(*)
Kinross Gold Corp. 100,000 89,200(*)
Meridian Gold, Inc. 50,000 304,260(*)
Ranger Minerals NL 1,600,000 1,911,200(*)
Resolute Ltd. 1,500,000 120,943
Vista Gold Corp. 834,300 78,974(*)
-----------
9,464,518
MINING FINANCE 3.53%
---------------------------------------
Franco-Nevada Mining Corp., Ltd. 88,625 1,024,670
Franco-Nevada Mining Corp., Ltd., Warrants
(September 2003) 200,000 787,695(*)
Franco-Nevada Mining Corp., Ltd., Warrants
(November 2003) 35,000 204,107(*)
-----------
2,016,472
OIL & GAS EXTRACTION 0.31%
---------------------------------------
Blackrock Ventures, Inc. 261,600 171,570(*)
New Zealand Oil & Gas Ltd. 36,363 4,235(*)
-----------
175,805
SENIOR GOLD PRODUCERS 48.47%
---------------------------------------
AGSM Preference Stock 203,932 234,522
Ashanti Goldfields Co., Ltd., GDR 518,200 906,850(*)
Barrick Gold Corp. 105,000 1,909,687
Eldorado Gold Corp. 500,000 256,930(*)
Freeport-McMoran Copper & Gold, Inc., Class A 5,000 45,625(*)
Freeport-McMoran Copper & Gold, Inc., Class B 307,500 2,844,375(*)
Glamis Gold Ltd. 810,000 1,533,469(*)
Goldcorp, Inc., Class A, Subordinate Voting
Shares 550,000 3,941,853(*)
Goldcorp, Inc., Warrants 350,000 1,094,490(*)
Homestake Mining Co. 650,000 4,468,750
Lihir Gold Ltd. 740,000 291,697(*)
Newmont Mining Corp. 150,000 3,243,750
Normandy Mining Ltd. 1,900,000 1,021,297
Otter Gold Mines Ltd. 400,000 100,338(*)
Otter Gold Mines Ltd., Warrants (October 2001) 50,000 657(*)
See notes to portfolios of investments and notes to financial statements.
72
<PAGE>
WORLD GOLD FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
--------------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS SHARES VALUE
SENIOR GOLD PRODUCERS (CONT'D)
---------------------------------------
Otter Gold Mines Ltd., Warrants (June 2003) 200,000 $ 4,061(*)
Placer Dome, Inc. 600,000 5,737,506
-----------
27,635,857
---------------------------------------
TOTAL COMMON STOCKS AND WARRANTS 55,241,576
(cost $81,849,450)
PURCHASED OPTION 2.68% CONTRACTS
SENIOR GOLD PRODUCERS 2.68%
---------------------------------------
Newmont Mining Corp., Strike Price 10, Call,
Expiration Jan. 2001 (premium $338,400) 300 363,750
Newmont Mining Corp., Strike Price 20, Call,
Expiration Jan. 2001 (premium $987,475) 1,450 734,135
Placer Dome, Inc., Strike Price 10, Call,
Expiration Jan. 2001 (premium $453,000) 1,000 175,000
Placer Dome, Inc., Strike Price 12.50, Call,
Expiration Jan. 2001 (premium $943,625) 2,250 253,125
---------------------------------------
TOTAL PURCHASED OPTIONS 1,526,010
(cost $2,722,500)
---------------------------------------
TOTAL INVESTMENTS 99.56% 56,767,586
(cost $84,571,950)
Other assets and liabilities, net 0.44% 251,439
-----------
---------------------------------------
NET ASSETS 100% $57,019,025
-----------
See notes to portfolios of investments and notes to financial statements.
73
<PAGE>
GOLD SHARES FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
--------------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS 94.50% SHARES VALUE
DIAMOND MINING & EXPLORATION 10.09%
---------------------------------------
Aber Resources Ltd. 57,400 $ 366,754(*)
De Beers Centenary, Linked Units 11,300 274,731
De Beers Consolidated Mines, ADR 38,700 940,894
DIA Met Minerals Ltd., Class B 60,000 811,359(*)
Star Resources Corp. 370,000 212,644(*)
-----------
2,606,382
DIVERSIFIED OPERATIONS 8.36%
---------------------------------------
Afrikander Lease Ltd. 475,000 142,325(*)
Impala Platinum Holdings Ltd. 30,000 1,116,753
Kroondal Platinum Mines Ltd. 100,000 228,782(*)
Pacific Rim Mining Corp. 100,000 307,640(*)
Pacific Rim Mining Corp., Special Units (RS) 100,000 307,640(*)
Rockwell Ventures, Inc. 200,000 56,795(*)
-----------
2,159,935
GOLD MINING - AFRICA 23.47%
---------------------------------------
Anglogold Ltd., ADR 40,000 822,500
ASA Ltd. 10,000 161,250
Ashanti Goldfields, GDR 180,800 316,400(*)
Avgold Ltd. 300,000 159,409(*)
Durban Roodepoort Deep Ltd. 135,800 144,279(*)
Durban Roodepoort Deep Ltd., ADR 66,000 70,125(*)
Gold Fields Ltd. 502,468 1,978,500(*)
Gold Fields Ltd., ADR 20,000 78,750
Harmony Gold Mining Co., Ltd. 370,934 2,063,324
Western Areas Gold Mining, ADR 63,000 146,475
Western Areas Ltd. 35,900 83,458
Zimbabwe Platinum Mines Ltd. 318,399 38,603(*)
-----------
6,063,073
GOLD MINING - AUSTRALIA 7.34%
---------------------------------------
Centaur Mining & Exploration Ltd. 300,000 21,501(*)
Delta Gold NL 1,200,000 889,425
Lihir Gold Ltd. 485,000 191,180(*)
Newcrest Mining Ltd. 80,000 215,010(*)
Normandy Mining Ltd. 665,579 357,765
Ranger Minerals Ltd. 152,713 182,416(*)
Resolute Resources Ltd. 500,000 40,314(*)
-----------
1,897,611
See notes to portfolios of investments and notes to financial statements.
74
<PAGE>
GOLD SHARES FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
--------------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS SHARES VALUE
GOLD MINING - NORTH AMERICA 45.24%
---------------------------------------
Barrick Gold Corp. 60,000 $ 1,091,250
Dayton Mining Corp. 541,800 366,262(*)
ECU Silver Mining, Inc. 200,000 10,818(*)
ECU Silver Mining Inc., Warrants 100,000 0(*)
Franco Nevada Mining Corp., Ltd. 43,675 504,965
Franco Nevada Mining Corp., Ltd., Warrants
(September 2003) 50,000 196,924(*)
Freeport-McMoRan Copper & Gold, Inc., Class B 150,000 1,387,500(*)
Goldcorp, Inc., Class A Subordinate Voting
Shares 180,000 1,290,061(*)
Goldcorp, Inc., Warrants 100,000 312,711(*)
Homestake Mining Co. 200,000 1,375,000
IAMGOLD Corp. 100,000 206,220(*)
Kinross Gold Corp 600,000 535,423(*)
Newmont Mining Corp. 100,000 2,162,500
Placer Dome, Inc. 180,000 1,721,254
Romarco Minerals, Inc. 736,000 248,817(*)
Stillwater Mining Company 10,000 278,750(*)
-----------
11,688,455
--------------------------------------------------------------------------------
TOTAL COMMON STOCKS AND WARRANTS 24,415,456
--------------------------------------------------------------------------------
(cost $31,251,678)
PURCHASED OPTIONS 2.08% CONTRACTS
GOLD MINING - NORTH AMERICA 2.08%
--------------------------------------------
Newmont Mining Corp., Strike Price 10, Call,
Expiration Jan. 2001 (premium $112,800) 100 121,250
Newmont Mining Corp., Strike Price 20, Call,
Expiration Jan. 2001 (premium $381,025) 550 278,465
Placer Dome, Inc., Strike Price 10, Call,
Expiration Jan. 2001 (premium $147,150) 300 52,500
Placer Dome, Inc., Strike Price 12.50, Call,
Expiration Jan. 2001 (premium $327,875) 750 84,375
--------------------------------------------------------------------------------
TOTAL PURCHASED OPTIONS 536,590
--------------------------------------------------------------------------------
(cost $968,850)
See notes to portfolios of investments and notes to financial statements.
75
<PAGE>
GOLD SHARES FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 2000
--------------------------------------------------------------------------------
PRINCIPAL
REPURCHASE AGREEMENT 2.44% AMOUNT VALUE
Joint Tri-Party Repurchase Agreement,
Donaldson, Lufkin & Jenrette, 6.57%,
06/30/00, due 07/03/00, repurchase
price $631,837, collateralized by U.S.
Treasury securities held in a joint
tri-party repurchase account (cost
$631,491) $ 631,491 $ 631,491
---------------------------------------
TOTAL INVESTMENTS 99.02% 25,583,537
(cost $32,852,019)
Other assets and liabilities, net 0.98% 252,017
-----------
NET ASSETS 100% $25,835,554
-----------
See notes to portfolios of investments and notes to financial statements.
76
<PAGE>
--------------------------------------------------------------------
NOTES TO PORTFOLIOS OF INVESTMENTS June 30, 2000
--------------------------------------------------------------------
LEGEND
(*) Non-income producing security GDR Global Depository Receipt
(+) Affiliated company (see following) RS Restricted Security
ADR American Depository Receipt (see following)
GO General Obligation Bond ZCB Zero Coupon Bond
GENERAL
The yields reflect the effective yield from the date of purchase.
Variable Rate Notes have periodic reset features, which effectively shorten the
maturity dates and reset the interest rates as tied to various interest-bearing
instruments. Rates shown are current rates at 06/30/00.
Securities with a 144A designation are exempt from registration under Rule 144A
of the Securities Act of 1933.
JOINT TRI-PARTY REPURCHASE AGREEMENTS (SEE ALSO NOTE 1 TO FINANCIAL
STATEMENTS.)
The terms of the repurchase agreements and the securities held as collateral in
the tri-party joint repurchase agreements at June 30, 2000 were:
Donaldson, Lufkin & Jenrette repurchase agreement, 06/30/00, 6.57%, due
07/03/00:
Total principal amount: $49,446,042; Total repurchase price: $49,473,114
$22,491,000 U.S. Treasury Bond, 0.00%, 02/15/27
$18,700,000 U.S. Treasury Bond, 7.25%, 08/15/22
$18,492,000 U.S. Treasury Bond, 0.00%, 08/15/17
$16,748,000 U.S. Treasury Bond, 0.00%, 11/15/14
$7,540,000 U.S. Treasury Note, 7.50%, 11/15/01
$6,086,000 U.S. Treasury Bond, 0.00%, 11/15/23
$3,741,000 U.S. Treasury Bond, 0.00%, 02/15/26
$2,507,000 U.S. Treasury Bond, 0.00%, 08/15/15
(total collateral market value of $49,858,037)
Paine Webber repurchase agreement, 06/30/00, 6.55%, due 07/03/00:
Total principal amount: $23,000,000; Total repurchase price: $23,012,554
$18,300,000 U.S. Treasury Note, 5.625%, 05/15/08
$5,705,000 U.S. Treasury Note, 4.875%, 03/31/01
(total collateral market value of $23,266,408)
Other mutual funds managed by U.S. Global Investors, Inc. participate in the
tri-party joint repurchase agreements. Each owns an undivided interest in the
accounts.
77
<PAGE>
--------------------------------------------------------------------
NOTES TO PORTFOLIOS OF INVESTMENTS June 30, 2000
--------------------------------------------------------------------
AFFILIATED COMPANIES - INDICATED IN PORTFOLIO OF INVESTMENTS AS "(+)"
The Investment Company Act of 1940 defines affiliates as companies in which the
Fund owns at least 5% of the outstanding voting securities. The following is a
summary of transactions with each affiliated company during the period ended
June 30, 2000.
SHARES OF AFFILIATED COMPANIES
----------------------------------------
JUNE 30, JUNE 30,
CHINA REGION OPPORTUNITY FUND 1999 ADDITIONS REDUCTIONS 2000
--------------------------------- ------- --------- ---------- --------
Alpha Communications Corp. -- 303,600 (3,200) 306,800
Alpha Communications Corp. (RS) -- 750,000 -- 750,000
Alpha Communications Corp.,
Class A Warrants (RS) -- 375,000 -- 375,000
Alpha Communications Corp.,
Class B Warrants (RS) -- 375,000 -- 375,000
Merendon International, Inc. -- 800,000 -- 800,000
At June 30, 2000, the value of investments in affiliated companies was
$1,379,604 representing 6.49% of net assets, and the total cost was $1,086,131.
Net realized gains on transactions were $2,100 and there was no income earned
for the period.
SHARES OF AFFILIATED COMPANIES
-------------------------------------------------
JUNE 30, ADDI- REDUC- JUNE 30,
WORLD GOLD FUND 1999 TIONS TIONS 2000
---------- ------- ----------- ---------
Adulis Mineral Corp. (a) -- 390,000 -- 390,000
Adulis Mineral Corp.,
Warrants (a) -- 390,000 -- 390,000
Adulis Mineral Corp.,
Special Warrants
(RS) (a) -- 200,000 -- 200,000
AMT International Mining
Corp 2,126,350 -- (150,000) 1,976,350
Ancash Resources 800,000 -- (800,000) -- (b)
Augusta Resource Corp. 798,773 192,214 -- 990,987
Dayton Mining Corp. 31,068,000 50,000 (29,618,000)(c) 1,500,000
Gold Corp. of Africa Ltd.
(a) 195,000 -- (195,000) --
Moydow Mines Interna-
tional, Inc. 300,000 291,500 (100,000) 491,500(b)
Moydow Mines Interna-
tional, Inc.,
Units (RS) -- 200,000 (200,000) -- (b)
Moydow Mines Interna-
tional, Inc., Warrants -- 100,000 -- 100,000(b)
Orezone Resources, Inc. 466,000 550,000 -- 1,016,000
Orezone Resources, Inc.,
Special Warrants 550,000 -- (550,000) --
Ormonde Mining plc 3,607,143 -- -- 3,607,143
Romarco Minerals, Inc. -- 1,600,000 (100,000) 1,500,000
Star Resources Corp. 1,976,400 10,000 (169,000) 1,817,400
Western Exploration &
Development Ltd.,
Special Warrants (RS) 600,000 -- -- 600,000(b)
At June 30, 2000, the value of investments in affiliated companies was
$4,246,234 representing 7.45% of net assets, and the total cost was $7,617,903.
Net realized gains on transactions were $9,780 and there was no income earned
for the period.
(a) During the year ended June 30, 2000, Gold Corp. of Africa Ltd. was acquired
by Adulis Mineral Corp.
(b) At June 30, 2000, the company is no longer defined as an affiliate,
although it was an affiliated company during the year.
(c) Reduction was result of reverse stock split.
78
<PAGE>
--------------------------------------------------------------------
NOTES TO PORTFOLIOS OF INVESTMENTS June 30, 2000
--------------------------------------------------------------------
RESTRICTED SECURITIES - INDICATED IN PORTFOLIO OF INVESTMENTS AS "RS"
The following securities are subject to legal restrictions on their resale. The
issuer bears the cost of registration, if any, involved in the disposition of
these securities.
ACQUISITION COST PER
SECURITY DATE SHARE
CHINA REGION OPPORTUNITY FUND
------------------------------------------
COMMON STOCKS AND WARRANTS
Alpha Communications Corp. 03/06/00 $ 0.18
Alpha Communications Corp., Class A
Warrants 03/06/00 $ 0.12
Alpha Communications Corp., Class B
Warrants 03/06/00 $ 0.06
Dragon Pharmaceuticals, Inc. 02/17/00 $ 2.50
Dragon Pharmaceuticals, Inc., Warrants 02/17/00 $ 0.00
SE Global Equities 04/07/00 $ 0.13
At June 30, 2000, the total cost of restricted securities was $656,171 and the
total value was $1,020,738, representing 4.70% of net assets.
GLOBAL RESOURCES FUND
------------------------------------------
COMMON STOCKS AND WARRANTS
Osmium Holdings S.A 10/22/96-01/29/98 $ 987.07
Zimasco Consolidated Enterprises Ltd. 06/15/95-09/30/99 $ 2.50
At June 30, 2000, the total cost of restricted securities was $202,655, and the
total value was $71,200, representing 0.53% of net assets.
WORLD GOLD FUND
------------------------------------------
COMMON STOCKS AND WARRANTS
Chilean Gold Ltd. 01/17/97 $ 1.10
Osmium Holdings S.A. 10/22/96-01/29/98 $1,280.75
Zimasco Consolidated Enterprises Ltd. 06/15/95-09/30/99 $ 2.50
SPECIAL WARRANTS AND UNITS
Adulis Minerals Corp. 04/06/00 $ 0.06
Corriente Resources, Inc. 03/23/00 $ 0.85
First Point Mineral Corp. 06/12/00 $ 0.24
Mustang Minerals Corp. 05/16/00 $ 0.50
Pacific Rim Mining Corp. 06/12/00 $ 2.88
Radius Exploration Ltd. 05/09/00 $ 0.54
Western Exploration & Development Ltd. 08/14/97 $ 0.50
At June 30, 2000, the total cost of restricted securities was $4,610,218, and
the total value was $2,330,514, representing 4.09% of net assets.
GOLD SHARES FUND
------------------------------------------
SPECIAL WARRANTS AND UNITS
Pacific Rim Mining Corp. 06/12/00 $ 2.88
At June 30, 2000, the total cost of restricted securities was $288,018, and the
total value was $307,640, representing 1.19% of net assets.
79
<PAGE>
-------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
-------------------------------------------------------------------------
U.S. TREASURY U.S. GOVERNMENT
SECURITIES SECURITIES
CASH FUND SAVINGS FUND
----------- -----------
Investments, at identified cost $136,043,107 $745,602,151
=-========== ============
ASSETS
Investments, at value:
Securities $79,737,541 $745,602,151
Repurchase agreements 56,305,566 --
Cash -- 166,337
Receivables
Dividends -- --
Interest 526,178 7,227,319
Capital shares sold 1,285,629 3,770,177
From adviser -- 77,838
Other assets 231,800 94,256
----------- -----------
TOTAL ASSETS 138,086,714 756,938,078
----------- ------------
LIABILITIES
Payables:
Investments purchased -- --
Capital shares redeemed 789,402 1,686,931
To adviser and affiliates 40,557 --
Dividends and distributions -- --
Accounts payable and accrued
expenses 85,173 111,422
----------- -----------
TOTAL LIABILITIES 915,132 1,798,353
----------- -----------
NET ASSETS $137,171,582 $755,139,725
============ ============
NET ASSETS CONSIST OF:
Paid-in capital $137,113,877 $756,045,211
Undistributed net investment income
(loss) 75,893 722,688
Accumulated net realized gain
(loss) on investments and
foreign currencies (18,188) (1,628,174)
Net unrealized appreciation
(depreciation) of investments
and other assets and
liabilities denominated in
foreign currencies -- --
------------ ------------
Net assets applicable to capital
shares outstanding $137,171,582 $755,139,725
============ ============
Capital shares outstanding, and
unlimited number of no par
shares authorized 137,163,505 755,195,019
============ ============
NET ASSET VALUE, PER SHARE $ 1.00 $ 1.00
============ ============
See accompanying notes to financial statements
80
<PAGE>
--------------------------------------------------------------------------------
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY
NEAR-TERM TAX FREE INCOME ALL AMERICAN
TAX FREE FUND FUND FUND EQUITY FUND
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Investments, at identified cost $ 5,144,262 $ 18,926,726 $ 7,291,019 $ 23,621,799
=========== ============ =========== ============
ASSETS
Investments, at value:
Securities $ 4,699,711 $ 16,743,062 $ 8,149,958 $ 41,612,977
Repurchase agreements 421,405 1,759,572 534,868 2,750,624
Cash 8,628 -- 59,661 --
Receivables:
Dividends -- -- 9,497 85,896
Interest 83,435 262,995 100 502
Capital shares sold -- 1,907 4,225 38,695
From adviser 38,013 34,599 -- 71,153
Other assets 493 1,011 490 2,237
----------- ------------ ----------- ------------
TOTAL ASSETS 5,251,685 18,803,146 8,758,799 44,562,084
----------- ------------ ----------- ------------
LIABILITIES
Payables:
Investments purchased -- -- 287,175 401,579
Capital shares redeemed -- 378,450 11 42,641
To adviser and affiliates -- -- 8,186 --
Dividends and distributions 2,516 14,601 -- 7,081
Accounts payable and accrued
expenses 27,654 30,073 32,356 72,703
----------- ------------ ----------- ------------
TOTAL LIABILITIES 30,170 423,124 327,728 524,004
----------- ------------ ----------- ------------
NET ASSETS $ 5,221,515 $ 18,380,022 $ 8,431,071 $ 44,038,080
=========== ============ =========== ============
NET ASSETS CONSIST OF:
Paid-in capital $ 5,515,656 $ 19,401,554 $ 7,189,752 $ 21,462,392
Undistributed net investment income
(loss) 7,842 10,002 -- (1,554)
Accumulated net realized gain
(loss) on investments and
foreign currencies (278,837) (607,442) (152,488) 1,835,440
Net unrealized appreciation
(depreciation) of investments
and other assets and
liabilities denominated in
foreign currencies (23,146) (424,092) 1,393,807 20,741,802
----------- ------------ ----------- ------------
Net assets applicable to capital
shares outstanding $ 5,221,515 $ 18,380,022 $ 8,431,071 $ 44,038,080
=========== ============ =========== ============
Capital shares outstanding, and
unlimited number of no par
shares authorized 506,243 1,615,367 680,918 974,682
=========== ============ =========== ============
NET ASSET VALUE, PER SHARE $ 10.31 $ 11.38 $ 12.38 $ 45.18
=========== ============ =========== ============
</TABLE>
81
<PAGE>
-------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
-------------------------------------------------------------------------
REAL ESTATE CHINA REGION
FUND OPPORTUNITY FUND
----------- -----------
Investments, at identified cost $ 5,247,917 $17,523,055
=========== ===========
ASSETS
Investments, at value:
Securities $ 5,334,469 $19,858,801
Repurchase agreements 217,357 1,425,007
Cash -- --
Receivables:
Investments sold -- 53,439
Dividends 48,749 44,572
Interest 40 260
Capital shares sold 350 3,243
Other assets 305 7,589
----------- -----------
TOTAL ASSETS 5,601,270 21,392,911
----------- -----------
LIABILITIES
Payables:
Investments purchased -- --
Capital shares redeemed 1,005 21,283
To adviser and affiliates 6,528 31,033
Dividends and distributions 573 --
Accounts payable and accrued
expenses 39,880 67,971
Due to custodian -- --
----------- -----------
TOTAL LIABILITIES 47,986 120,287
----------- -----------
NET ASSETS $ 5,553,284 $21,272,624
=========== ===========
NET ASSETS CONSIST OF:
Paid-in capital $ 7,332,165 $32,307,104
Undistributed net investment income
(loss) 169 (84,141)
Accumulated net realized loss on
investments and
foreign currencies (2,082,961) (14,711,079)
Net unrealized appreciation
(depreciation) of investments
and other assets and liabilities
denominated in
foreign currencies 303,911 3,760,740
----------- -----------
Net assets applicable to capital
shares outstanding $ 5,553,284 $21,272,624
=========== ===========
Capital shares outstanding, and
unlimited number of
no par shares authorized 626,722 3,482,037
=========== ===========
NET ASSET VALUE, PER SHARE $ 8.86 $ 6.11
=========== ===========
See accompanying notes to financial statements
82
<PAGE>
--------------------------------------------------------------------------------
June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL RESOURCES WORLD GOLD GOLD SHARES
FUND FUND FUND
------------ ------------- -------------
<S> <C> <C> <C>
Investments, at identified cost $ 13,251,442 $ 84,571,950 $ 32,852,019
============ ============= =============
ASSETS
Investments, at value:
Securities $ 13,138,613 $ 56,767,586 $ 24,952,046
Repurchase agreements 746,147 -- 631,491
Cash -- -- --
Receivables:
Investments sold 576,724 1,788,344 706,699
Dividends 12,701 133,678 --
Interest 136 -- 115
Capital shares sold 1,057 1,834 92,429
Other assets 773 8,721 10,001
------------ ------------- -------------
TOTAL ASSETS 14,476,151 58,700,163 26,392,781
------------ ------------- -------------
LIABILITIES
Payables:
Investments purchased 830,654 959,057 365,222
Capital shares redeemed 27,454 83,090 4,629
To adviser and affiliates 24,631 81,982 71,695
Dividends and distributions -- -- --
Accounts payable and accrued
expenses 63,255 107,195 115,681
Due to custodian -- 449,814 --
------------ ------------- -------------
TOTAL LIABILITIES 945,994 1,681,138 557,227
------------ ------------- -------------
NET ASSETS $ 13,530,157 $ 57,019,025 $ 15,835,554
============ ============= =============
NET ASSETS CONSIST OF:
Paid-in capital $ 22,894,060 $ 125,682,860 $ 227,044,101
Undistributed net investment income
(loss) (23,872) (731,100) (184,300)
Accumulated net realized loss on
investments and
foreign currencies (9,973,349) (39,961,935) (193,757,455)
Net unrealized appreciation
(depreciation) of investments
and other assets and liabilities
denominated in
foreign currencies 633,318 (27,970,800) (7,266,792)
------------ ------------- -------------
Net assets applicable to capital
shares outstanding $ 13,530,157 $ 57,019,025 $ 25,835,554
============ ============= =============
Capital shares outstanding, and
unlimited number of
no par shares authorized 3,488,346 8,874,410 8,852,708
============ ============= =============
NET ASSET VALUE, PER SHARE $ 3.88 $ 6.43 $ 2.92
============ ============= =============
</TABLE>
83
<PAGE>
-------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
-------------------------------------------------------------------------
U.S. TREASURY U.S. GOVERNMENT
SECURITIES SECURITIES
CASH FUND SAVINGS FUND
---------- ------------
NET INVESTMENT INCOME
INCOME:
Dividends $ -- $ --
Foreign taxes withheld on
dividends -- --
---------- ------------
Net dividends -- --
Interest and other 7,707,613 44,349,902
Securities lending income -- --
---------- ------------
TOTAL INCOME 7,707,613 44,349,902
EXPENSES:
Management fee 717,664 3,255,565
Transfer agent fees and
expenses 335,837 756,421
Accounting service fees and
expenses 40,001 96,196
Legal and professional fees 39,714 87,502
Custodian fees 126,644 114,375
Shareholder reporting 96,734 201,410
Registration fees 50,333 57,511
Trustee fees and expenses 16,005 16,005
Interest expense 13,518 9,368
Miscellaneous 53,372 70,642
---------- ------------
Total expenses before
reductions 1,489,822 4,664,995
Short-term trading fee -- --
Expenses offset -- (24,233)
Expenses reimbursed -- (1,535,253)
---------- ------------
NET EXPENSES 1,489,822 3,105,509
---------- ------------
NET INVESTMENT INCOME (LOSS) 6,217,791 41,244,393
---------- ------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Realized gain (loss) from:
Securities -- 1,218
Foreign currency
transactions -- --
---------- ------------
NET REALIZED GAIN (LOSS) -- 1,218
---------- ------------
Net change in unrealized
appreciation (depreciation)
of:
Investments -- --
Other assets and
liabilities denominated
in foreign currencies -- --
---------- ------------
NET UNREALIZED DEPRECIATION -- --
------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS -- 1,218
---------- ------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $6,217,791 $ 41,245,611
========== ============
See accompanying notes to financial statements.
84
<PAGE>
--------------------------------------------------------------------------------
For the Year Ended June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY
NEAR-TERM TAX FREE INCOME ALL AMERICAN
TAX FREE FUND FUND FUND EQUITY FUND
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
NET INVESTMENT INCOME
INCOME:
Dividends $ -- $ -- $ 164,726 $ 457,899
Foreign taxes withheld on
dividends -- -- (1,174) (1,086)
--------- ----------- --------- -----------
Net dividends -- -- 163,552 456,813
Interest and other 318,283 1,105,214 12,839 162,242
Securities lending income 16 -- 20 246
--------- ----------- --------- -----------
TOTAL INCOME 318,299 1,105,214 176,411 619,301
EXPENSES:
Management fee 33,179 150,818 68,418 365,385
Transfer agent fees and
expenses 8,358 26,117 32,885 143,257
Accounting service fees and
expenses 40,000 40,000 40,000 40,000
Legal and professional fees 28,489 28,842 39,876 72,689
Custodian fees 13,152 15,524 16,358 25,124
Shareholder reporting 2,857 6,883 9,622 46,467
Registration fees 13,627 17,306 18,208 23,670
Trustee fees and expenses 16,005 16,005 16,005 16,005
Interest expense 29 96 26 267
Miscellaneous 6,432 6,856 6,680 10,521
--------- ----------- --------- -----------
Total expenses before
reductions 162,128 308,447 248,078 743,385
Short-term trading fee -- -- (26) (267)
Expenses offset (124) (64) (10) --
Expenses reimbursed (115,826) (167,952) -- (260,383)
--------- ----------- --------- -----------
NET EXPENSES 46,178 140,431 248,042 482,735
--------- ----------- --------- -----------
NET INVESTMENT INCOME (LOSS) 272,121 964,783 (71,631) 136,566
--------- ----------- --------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Realized gain (loss) from:
Securities (78,326) (607,442) (32,217) 2,060,336
Foreign currency
transactions -- -- 638 (1,026)
--------- ----------- --------- -----------
NET REALIZED GAIN (LOSS) (78,326) (607,442) (31,579) 2,059,310
--------- ----------- --------- -----------
Net change in unrealized
appreciation (depreciation) of:
Investments (23,961) (170,573) (13,672) (1,013,206)
Other assets and
liabilities denominated
in foreign currencies -- -- -- --
--------- ----------- --------- -----------
NET UNREALIZED DEPRECIATION (23,961) (170,573) (13,672) (1,013,206)
--------- ----------- --------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (102,287) (778,015) (45,251) 1,046,104
--------- ----------- --------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $ 169,834 $ 186,768 $(116,882) $ 1,182,670
========= =========== ========= ===========
</TABLE>
85
<PAGE>
--------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------
REAL ESTATE CHINA REGION
FUND OPPORTUNITY FUND
----------- -----------
NET INVESTMENT INCOME
INCOME:
Dividends $ 258,580 $ 527,185
Foreign taxes withheld on
dividends (5,308) (1,173)
----------- -----------
Net dividends 253,272 526,012
Interest and other 28,101 77,047
Securities lending income 18 578
----------- -----------
TOTAL INCOME 281,391 603,637
EXPENSES:
Management fee 42,280 280,540
Transfer agent fees and expenses 34,315 134,984
Accounting service fees and
expenses 40,000 40,000
Legal and professional fees 43,643 65,197
Custodian fees 24,956 87,913
Shareholder reporting 10,045 34,773
Registration fees 17,817 18,761
Trustee fees and expenses 16,005 16,005
Interest expense 69 280
Miscellaneous 8,810 16,325
----------- -----------
Total expenses before
reductions 237,940 694,778
Short-term trading fee (69) (280)
Expenses offset (431) (520)
Expenses reimbursed -- --
----------- -----------
NET EXPENSES 237,440 693,978
----------- -----------
NET INVESTMENT INCOME (LOSS) 43,951 (90,341)
----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Realized loss from:
Securities (1,480,759) (3,752,790)
Foreign currency
transactions (4,951) (235)
----------- -----------
NET REALIZED LOSS (1,485,710) (3,753,025)
----------- -----------
Net change in unrealized
appreciation (depreciation) of:
Investments 1,031,525 5,299,925
Other assets and liabilities
denominated in foreign
currencies 5 49
----------- -----------
NET UNREALIZED APPRECIATION
(DEPRECIATION) 1,031,530 5,299,974
----------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (454,180) 1,546,949
----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $ (410,229) $ 1,456,608
=========== ===========
See accompanying notes to financial statements.
86
<PAGE>
--------------------------------------------------------------------------------
For the Year Ended June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
RESOURCES WORLD GOLD GOLD SHARES
FUND FUND FUND
--------- ------------ -----------
<S> <C> <C> <C>
NET INVESTMENT INCOME
INCOME:
Dividends $ 279,508 $ 805,646 $ 502,652
Foreign taxes withheld on
dividends (1,285) (27,419) (11,984)
--------- ------------ -----------
Net dividends 278,223 778,227 490,668
Interest and other 13,773 49,183 51,574
Securities lending income 67 234 1,203
--------- ------------ -----------
TOTAL INCOME 292,063 827,644 543,445
EXPENSES:
Management fee 151,956 759,464 232,187
Transfer agent fees and expenses 153,920 496,903 813,411
Accounting service fees and
expenses 39,974 59,202 55,000
Legal and professional fees 106,080 177,280 163,296
Custodian fees 21,635 134,101 118,340
Shareholder reporting 38,662 137,103 252,937
Registration fees 31,360 30,495 22,924
Trustee fees and expenses 16,005 16,005 16,005
Interest expense 114 5,557 2,947
Miscellaneous 16,202 83,853 100,400
--------- ------------ -----------
Total expenses before
reductions 575,908 1,899,963 1,777,447
Short-term trading fee (114) (5,557) (2,947)
Expenses offset -- -- --
Expenses reimbursed -- -- --
--------- ------------ -----------
NET EXPENSES 575,794 1,894,406 1,774,500
--------- ------------ -----------
NET INVESTMENT INCOME (LOSS) (283,731) (1,066,762) (1,231,055)
--------- ------------ -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Realized loss from:
Securities (296,565) (182,386) (737,339)
Foreign currency transactions (1,367) (138,347) (35,373)
--------- ------------ -----------
NET REALIZED LOSS (297,932) (320,733) (772,712)
--------- ------------ -----------
Net change in unrealized
appreciation (depreciation) of:
Investments (46,448) (10,891,711) (2,958,146)
Other assets and liabilities
denominated in foreign
currencies -- (165,928) (11,054)
--------- ------------ -----------
NET UNREALIZED APPRECIATION
(DEPRECIATION) (46,448) (11,057,639) (2,969,200)
--------- ------------ -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (344,380) (11,378,372) (3,741,912)
--------- ------------ -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $(628,111) $(12,445,134) $(4,972,967)
========= ============ ===========
</TABLE>
87
<PAGE>
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
U.S. TREASURY SECURITIES
CASH FUND
----------------------------------
YEAR ENDED YEAR ENDED
JUNE 30, 2000 JUNE 30, 1999
------------ --------------
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income $ 6,217,791 $ 6,781,837
Net realized gain (loss) -- (10,657)
Net unrealized depreciation -- --
------------ --------------
NET INCREASE IN NET ASSETS
FROM INVESTMENT OPERATIONS 6,217,791 6,771,180
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (6,236,071) (6,734,351)
In excess of net investment income -- --
From net capital gains -- (2,912)
In excess of net capital gains -- (18,188)
------------ --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (6,236,071) (6,755,451)
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 562,395,666 2,639,284,234
Distributions reinvested 6,557,469 6,038,434
------------ --------------
568,953,135 2,645,322,668
Cost of shares redeemed (587,530,692) (2,638,992,364)
------------ --------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS (18,577,557) 6,330,304
------------ --------------
NET INCREASE (DECREASE) IN NET ASSETS (18,595,837) 6,346,033
------------ --------------
NET ASSETS
Beginning of year 155,767,419 149,421,386
------------ --------------
END OF YEAR $137,171,582 $155,767,419
------------ --------------
Undistributed net investment income, end of
year $ 75,893 $ 94,173
============ ==============
CAPITAL SHARE ACTIVITY
Shares sold 562,395,666 2,639,281,454
Shares reinvested 6,557,468 6,035,413
Shares redeemed (587,530,702) (2,638,992,374)
------------ --------------
NET SHARE ACTIVITY (18,577,568) 6,324,493
============ ==============
See accompanying notes to financial statements.
88
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. GOVERNMENT SECURITIES
SAVINGS FUND NEAR-TERM TAX FREE FUND
------------------------------ --------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2000 JUNE 30, 1999 JUNE 30, 2000 JUNE 30, 1999
------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income $ 41,244,393 $ 38,287,207 $ 272,121 $ 297,831
Net realized gain (loss) 1,218 21,754 (78,326) 9,766
Net unrealized depreciation -- -- (23,961) (129,794)
------------- ------------- ----------- -----------
NET INCREASE IN NET ASSETS
FROM INVESTMENT OPERATIONS 41,245,611 38,308,961 169,834 177,803
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (41,204,238) (38,310,800) (271,119) (296,765)
In excess of net investment income -- -- -- --
From net capital gains -- -- -- --
In excess of net capital gains -- -- -- --
------------- ------------- ----------- -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (41,204,238) (38,310,800) (271,119) (296,765)
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 718,494,685 819,242,776 1,444,522 1,655,595
Distributions reinvested 43,677,475 34,977,709 260,806 244,701
------------- ------------- ----------- -----------
762,172,160 854,220,485 1,705,328 1,900,296
Cost of shares redeemed (797,221,569) (825,588,463) (3,793,495) (2,431,826)
------------- ------------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS (35,049,409) 28,632,022 (2,088,167) (531,530)
------------- ------------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS (35,008,036) 28,630,183 (2,189,452) (650,492)
------------- ------------- ----------- -----------
NET ASSETS
Beginning of year 790,147,761 761,517,578 7,410,967 8,061,459
------------- ------------- ----------- -----------
END OF YEAR $ 755,139,725 $ 790,147,761 $ 5,221,515 $ 7,410,967
------------- ------------- ----------- -----------
Undistributed net investment income,
end of year $ 722,688 $ 682,533 $ 7,842 $ 6,840
============= ============= =========== ===========
CAPITAL SHARE ACTIVITY
Shares sold 718,494,682 819,245,215 139,038 154,848
Shares reinvested 43,677,475 34,977,710 25,194 22,872
Shares redeemed (797,221,587) (825,594,140) (366,136) (226,989)
------------- ------------- ----------- -----------
NET SHARE ACTIVITY (35,049,430) 28,628,785 (201,904) (49,269)
============= ============= =========== ===========
</TABLE>
89
<PAGE>
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
TAX FREE FUND
---------------------------
YEAR ENDED YEAR ENDED
JUNE 30, 2000 JUNE 30, 1999
----------- -----------
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income (loss) $ 964,783 $ 1,045,989
Net realized gain (loss) (607,442) 180,137
Net unrealized appreciation
(depreciation) (170,573) (1,008,256)
----------- -----------
NET INCREASE (DECREASE)
IN NET ASSETS
FROM INVESTMENT OPERATIONS 186,768 217,870
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (961,347) (1,043,518)
In excess of net investment
income -- --
From net capital gains (65,469) (47,637)
In excess of net capital
gains -- --
----------- -----------
TOTAL DISTRIBUTIONS TO
SHAREHOLDERS (1,026,816) (1,091,155)
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 4,930,670 12,183,581
Distributions reinvested 832,415 767,994
Paid-in capital portion
of short-term trading fee -- --
----------- -----------
5,763,085 12,951,575
Cost of shares redeemed (10,584,796) (9,436,152)
----------- -----------
NET INCREASE (DECREASE)
IN NET ASSETS
FROM CAPITAL SHARE
TRANSACTIONS (4,821,711) 3,515,423
----------- -----------
NET INCREASE (DECREASE)
IN NET ASSETS (5,661,759) 2,642,138
----------- -----------
NET ASSETS
Beginning of year 24,041,781 21,399,643
----------- -----------
END OF YEAR $18,380,022 $24,041,781
----------- -----------
Undistributed net investment
income (loss), end of year $ 10,002 $ 6,566
=========== ===========
CAPITAL SHARE ACTIVITY
Shares sold 434,670 988,731
Shares reinvested 73,231 64,403
Shares redeemed (930,476) (768,823)
----------- -----------
NET SHARE ACTIVITY (422,575) 284,311
=========== ===========
See accompanying notes to financial statements.
90
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY INCOME FUND ALL AMERICAN EQUITY FUND
------------------------------ ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2000 JUNE 30, 1999 JUNE 30, 2000 JUNE 30, 1999
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income (loss) $ (71,631) $ 119,666 $ 136,566 $ 290,242
Net realized gain (loss) (31,579) 1,488,145 2,059,310 1,005,069
Net unrealized appreciation
(depreciation) (13,672) (978,966) (1,013,206) 7,258,310
----------- ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS (116,882) 628,845 1,182,670 8,553,621
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income -- (117,430) (122,535) (274,031)
In excess of net investment income -- (5,289) (14,466) (14,031)
From net capital gains (1,150,941) (1,026,461) (793,897) (1,212,356)
In excess of net capital gains (151,343) -- -- --
----------- ------------ ------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (1,302,284) (1,149,180) (930,898) (1,500,418)
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 760,108 2,157,731 13,552,160 32,540,631
Distributions reinvested 1,251,547 1,090,457 904,663 1,391,632
Paid-in capital portion of short-term
trading fee 102 615 3,808 10,142
----------- ------------ ------------ ------------
2,011,757 3,248,803 14,460,631 33,942,405
Cost of shares redeemed (2,094,590) (3,932,219) (23,876,508) (22,464,397)
----------- ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS (82,833) (683,416) (9,415,877) 11,478,008
----------- ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS (1,501,999) (1,203,751) (9,164,105) 18,531,211
----------- ------------ ------------ ------------
NET ASSETS
Beginning of year 9,933,070 11,136,821 53,202,185 34,670,974
----------- ------------ ------------ ------------
END OF YEAR $ 8,431,071 $ 9,933,070 $ 44,038,080 $ 53,202,185
----------- ------------ ------------ ------------
Undistributed net investment income (loss),
end of year $ -- $ (5,289) $ (1,554) $ (14,031)
=========== ============ ============ ============
CAPITAL SHARE ACTIVITY
Shares sold 57,220 147,478 306,517 820,839
Shares reinvested 98,962 78,865 19,824 35,559
Shares redeemed (156,060) (272,413) (539,711) (561,919)
----------- ------------ ------------ ------------
NET SHARE ACTIVITY 122 (46,070) (213,370) 294,479
=========== ============ ============ ============
</TABLE>
91
<PAGE>
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
REAL ESTATE FUND
--------------------------
YEAR ENDED YEAR ENDED
JUNE 30, 2000 JUNE 30, 1999
----------- -----------
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income (loss) $ 43,951 $ 122,234
Net realized loss (1,485,710) (600,208)
Net unrealized appreciation (depreciation) 1,031,530 (528,000)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS (410,229) (1,005,974)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (25,583) (111,679)
In excess of net investment income -- (15,242)
From net capital gains -- (1,474,435)
In excess of net capital gains -- (600,208)
----------- -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (25,583) (2,201,564)
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 1,873,578 2,473,754
Distributions reinvested 147,979 2,019,625
Paid-in capital portion of short-term
trading fee 435 377
----------- -----------
2,021,992 4,493,756
Cost of shares redeemed (3,102,966) (5,584,443)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS (1,080,974) (1,090,687)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS (1,516,786) (4,298,225)
----------- -----------
NET ASSETS
Beginning of year 7,070,070 11,368,295
----------- -----------
END OF YEAR $ 5,553,284 $ 7,070,070
----------- -----------
Undistributed net investment income (loss),
end of year $ 169 $ (13,248)
=========== ===========
CAPITAL SHARE ACTIVITY
Shares sold 221,364 237,613
Shares reinvested 16,003 218,102
Shares redeemed (368,499) (528,888)
----------- -----------
NET SHARE ACTIVITY (131,132) (73,173)
=========== ===========
See accompanying notes to financial statements.
92
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CHINA REGION
OPPORTUNITY FUND GLOBAL RESOURCES FUND
------------------------------ ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2000 JUNE 30, 1999 JUNE 30, 2000 JUNE 30, 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income (loss) $ (90,341) $ (189,176) $ (283,731) $ (291,122)
Net realized loss (3,753,025) (5,972,951) (297,932) (5,093,996)
Net unrealized appreciation (depreciation) 5,299,974 12,406,604 (46,448) 4,445,370
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS 1,456,608 6,244,477 (628,111) (939,748)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income -- -- -- --
In excess of net investment income -- (121,787) -- --
From net capital gains -- -- -- --
In excess of net capital gains -- -- -- (944,679)
------------ ------------ ------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS -- (121,787) -- (944,679)
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 14,920,680 22,272,330 5,620,772 8,066,887
Distributions reinvested -- 117,943 -- 883,249
Paid-in capital portion of short-term
trading fee 167,660 138,153 8,825 12,487
------------ ------------ ------------ ------------
15,088,340 22,528,426 5,629,597 8,962,623
Cost of shares redeemed (24,428,537) (18,954,748) (8,435,080) (9,072,387)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS (9,340,197) 3,573,678 (2,805,483) (109,764)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS (7,883,589) 9,696,368 (3,433,594) (1,994,191)
------------ ------------ ------------ ------------
NET ASSETS
Beginning of year 29,156,213 19,459,845 16,963,751 18,957,942
------------ ------------ ------------ ------------
END OF YEAR $ 21,272,624 $ 29,156,213 $ 13,530,157 $ 16,963,751
------------ ------------ ------------ ------------
Undistributed net investment income (loss),
end of year $ (84,141) $ 62,826 $ (23,872) $ (6,875)
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Shares sold 2,662,842 5,390,405 1,412,383 2,135,644
Shares reinvested -- 30,715 -- 257,507
Shares redeemed (4,405,371) (4,950,301) (2,151,343) (2,406,976)
------------ ------------ ------------ ------------
NET SHARE ACTIVITY (1,742,529) 470,819 (738,960) (13,825)
============ ============ ============ ============
</TABLE>
93
<PAGE>
-------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
-------------------------------------------------------------------------------
WORLD GOLD FUND
----------------------------------
YEAR ENDED YEAR ENDED
JUNE 30, 2000 JUNE 30, 1999
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income (loss) $ (1,066,762) $ 298,687
Net realized loss (320,733) (26,240,091)
Net unrealized appreciation
(depreciation) (11,057,639) 6,443,572
--------------- ---------------
NET DECREASE IN NET ASSETS
FROM INVESTMENT OPERATIONS (12,445,134) (19,497,832)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income -- (130,356)
In excess of net investment income -- (8,874)
From net capital gains -- --
In excess of net capital gains -- --
--------------- ---------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS -- (139,230)
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 191,290,603 1,350,820,121
Distributions reinvested -- 131,031
Paid-in capital portion of short-term
trading fee 440,302 3,235,444
--------------- ---------------
191,730,905 1,354,186,596
Cost of shares redeemed (218,323,617) (1,388,251,977)
--------------- ---------------
NET DECREASE IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS (26,592,712) (34,065,381)
--------------- ---------------
NET DECREASE IN NET ASSETS (39,037,846) (53,702,443)
--------------- ---------------
NET ASSETS
Beginning of year 96,056,871 149,759,314
--------------- ---------------
END OF YEAR $ 57,019,025 $ 96,056,871
--------------- ---------------
Undistributed net investment income (loss),
end of year $ (731,100) $ 3,484,235
=============== ===============
CAPITAL SHARE ACTIVITY
Shares sold 24,283,445 147,284,153
Shares reinvested -- 13,969
Shares redeemed (27,738,964) (150,152,337)
--------------- ---------------
NET SHARE ACTIVITY (3,455,519) (2,854,215)
=============== ===============
See accompanying notes to financial statements.
94
<PAGE>
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
GOLD SHARES FUND
-----------------------------
YEAR ENDED YEAR ENDED
JUNE 30, 2000 JUNE 30, 1999
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income (loss) $ (1,231,055) $ (1,203,899)
Net realized loss (772,712) (10,568,253)
Net unrealized appreciation
(depreciation) (2,969,200) 10,563,743
------------- -------------
NET DECREASE IN NET ASSETS
FROM INVESTMENT OPERATIONS (4,972,967) (1,208,409)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income -- --
In excess of net investment income -- --
From net capital gains -- --
In excess of net capital gains -- --
------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS -- --
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 87,441,751 914,373,012
Distributions reinvested -- --
Paid-in capital portion of short-term
trading fee 196,253 2,027,603
------------- -------------
87,638,004 916,400,615
Cost of shares redeemed (95,115,129) (923,157,109)
------------- -------------
NET DECREASE IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS (7,477,125) (6,756,494)
------------- -------------
NET DECREASE IN NET ASSETS (12,450,092) (7,964,903)
------------- -------------
NET ASSETS
Beginning of year 38,285,646 46,250,549
------------- -------------
END OF YEAR $ 25,835,554 $ 38,285,646
------------- -------------
Undistributed net investment income (loss),
end of year $ (184,300) $ (263,967)
============= =============
CAPITAL SHARE ACTIVITY
Shares sold 24,733,013 241,479,468
Shares reinvested -- --
Shares redeemed (27,064,205) (242,511,961)
------------- -------------
NET SHARE ACTIVITY (2,331,192) (1,032,493)
============= =============
95
<PAGE>
----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS June 30, 2000
----------------------------------------------------------------------
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES
U.S. Global Investors Funds (Trust) is organized as a Massachusetts business
trust, consisting of eleven separate funds (funds), as follows: U.S. Treasury
Securities Cash, U.S. Government Securities Savings, Near-Term Tax Free, Tax
Free, Equity Income (formerly the Income Fund), All American Equity, Real
Estate, China Region Opportunity, Global Resources, World Gold and Gold Shares.
The Trust is an open-end management investment company registered under the
Investment Company Act of 1940, as amended. All funds are diversified with the
exception of Global Resources, World Gold and Gold Shares.
The following is a summary of significant accounting policies consistently
followed by the funds in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting principles.
A. SECURITY VALUATIONS
The funds value investments traded on national or international securities
exchanges or over-the-counter at the last sales price reported by the
security's primary exchange at the time of daily valuation. Securities for
which no sale was reported are valued at the mean between the last reported bid
and asked prices or using quotes provided by principal market makers.
Short-term investments with effective maturities of sixty days or less at the
date of purchase and investments of U.S. Treasury Securities Cash and U.S.
Government Securities Savings Funds are valued at amortized cost, which
approximates market value. An independent pricing service values municipal
securities and long-term U.S. Government obligations using a system based on
such factors as credit rating, maturity, coupon and type of security to
determine fair value.
B. FAIR VALUED SECURITIES
Securities for which market quotations are not readily available or which are
subject to legal restrictions are valued at their fair value as determined in
good faith under consistently applied procedures under the general supervision
of the Board of Trustees. The following factors are generally considered in
determining fair value: nature and duration of any trading restrictions,
trading volume, market values of unrestricted shares of the same or similar
class, investment management's judgment regarding the market experience of the
issuer, financial status and other operational and market factors affecting the
issuer, issuer's management, quality of the underlying property based on review
of independent geological studies, the extent of the fund's investment in the
trading securities of the issuer; and other relevant matters. The fair values
may differ from what would have been used had a broader market for these
securities existed.
C. SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on trade date. Realized gains and
losses from security transactions are determined on an identified-cost basis.
Dividend
96
<PAGE>
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NOTES TO FINANCIAL STATEMENTS June 30, 2000
----------------------------------------------------------------------
income is recorded on the ex-dividend date except that certain dividends from
foreign securities where the ex-dividend date may have passed are recorded as
soon as the funds are informed of the ex-dividend data in the exercise of
reasonable diligence. Interest income, which may include original issue
discount, is recorded on an accrual basis. Discounts and premiums on securities
purchased are accreted and amortized, respectively, on the same basis as used
for federal tax reporting.
The funds may purchase securities on a when-issued or delayed-delivery basis
and segregate the liquid assets on their books to collateralize the obligation
until trade settlement. Such investments are accounted for in the same manner
as marketable portfolio securities.
Each fund may temporarily loan securities up to 10% of its total assets to
brokers, dealers or other financial institutions in exchange for a negotiated
lender's fee. These fees are recorded as securities lending income. The loans
are collateralized by cash, U.S. government securities, high quality money
market instruments or other securities that are maintained at all times in an
amount at least equal to the current market value of the loaned securities,
plus a margin depending on the types of securities loaned. The market value of
the loaned securities is determined at the close of business of the fund and
any additional required collateral is delivered to the fund on the next
business day. In the event of default or bankruptcy by the borrower, retention
of the collateral may be subject to legal proceedings.
The market value of securities on loan and the related collateral at June 30,
2000 was:
FUND MARKET VALUE (IN 000S) COLLATERAL (IN 000S)
----------------------------- ---------------------- -------------------
All American Equity Fund $304 $315
China Region Opportunity Fund 905 926
D. REPURCHASE AGREEMENTS
The funds may enter into repurchase agreements with recognized financial
institutions or registered broker-dealers and, in all instances, hold as
collateral, underlying securities with a value exceeding the total repurchase
price, including accrued interest. The funds use joint tri-party repurchase
agreements with other funds under common management where uninvested cash is
collectively invested in repurchase agreements, and each participating fund
owns an undivided interest in the account.
E. OPTIONS
Some funds may write or purchase options on securities to manage their exposure
to stock or commodity markets as well as fluctuations in interest and currency
conversion rates. Written options include a risk of loss in excess of the
option
97
<PAGE>
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NOTES TO FINANCIAL STATEMENTS June 30, 2000
----------------------------------------------------------------------
premium. The use of options carries the risk of a change in value of the
underlying instruments, an illiquid secondary market, or that the counterparty
may fail to perform its obligations. The option premium is the basis for
recognition of unrealized or realized gain or loss on the option. The cost of
securities acquired or the proceeds from securities sold through the exercise
of the option is adjusted by the amount of the premium. There were no options
written for any of the funds during the year ended June 30, 2000.
Option transactions during the year ended June 30, 2000 were as follows:
<TABLE>
<CAPTION>
ALL AMERICAN EQUITY FUND GLOBAL RESOURCES FUND WORLD GOLD FUND
---------------------------- --------------------------- ---------------------------
NUMBER OF PREMIUMS NUMBER OF PREMIUMS NUMBER OF PREMIUMS
CONTRACTS PAID/(RECEIVED) CONTRACTS PAID/(RECEIVED) CONTRACTS PAID/(RECEIVED)
--------- --------------- --------- --------------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Options outstanding
at June 30, 1999 (20) $ (4,940) -- $ -- 14,476 $ 6,211,104
Options purchased 475 559,005 85 100,355 -- --
Options sold (50) (69,355) -- -- (3,600) (1,384,463)
Options expired 20 4,940 -- -- (5,876) (2,104,141)
------ ----------- ------ ----------- ------ -----------
Options outstanding
at June 30, 2000 425 $ 489,650 85 $ 100,355 5,000 $ 2,722,500
====== =========== ====== =========== ====== ===========
<CAPTION>
GOLD SHARES FUND
---------------------------
NUMBER OF PREMIUMS
CONTRACTS PAID/(RECEIVED)
<S> <C> <C>
Options outstanding
at June 30, 1999 6,670 $ 2,851,485
Options purchased -- --
Options sold (1,600) (604,588)
Options expired (3,370) (1,278,047)
------ -----------
Options outstanding
at June 30, 2000 1,700 $ 968,850
====== ===========
</TABLE>
F. FOREIGN CURRENCY TRANSACTIONS
Some funds may invest in securities of foreign issuers. The accounting records
of these funds are maintained in U.S. dollars. At each net asset value
determination date, the value of assets and liabilities denominated in foreign
currencies are translated into U.S. dollars using the current exchange rate.
Security transactions, income and expenses are converted to U.S. dollars at the
prevailing rate of exchange on the date of the event. The effect of changes in
foreign exchange rates on foreign denominated securities is included with the
net realized and unrealized gain or loss on securities. Other unrealized
foreign currency gains or losses are reported separately.
G. FEDERAL INCOME TAXES
The funds intend to continue to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of their taxable income to shareholders. Accordingly, no
provision for federal income taxes is required.
98
<PAGE>
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NOTES TO FINANCIAL STATEMENTS June 30, 2000
----------------------------------------------------------------------
H. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
The funds record dividends and distributions to shareholders on the ex-dividend
date. Distributions are determined in accordance with income tax regulations,
which may differ from generally accepted accounting principles. Accordingly,
periodic reclassifications are made within the funds' capital accounts to
reflect income and gains available for distribution under income tax
regulations.
The funds make distributions at least annually. The U.S. Treasury Securities
Cash and U.S. Government Securities Savings Funds accrue dividends, including
short-term gains or losses, on a daily basis with payment monthly. Tax Free and
Near-Term Tax Free pay monthly dividends. All American Equity and Equity Income
pay quarterly dividends. Real Estate pays semi-annual dividends. Dividends and
distributions payable at period end are processed for reinvestment on the
following business day.
I. EXPENSES
Each fund bears expenses incurred specifically on its behalf plus an allocation
of its share of Trust level expenses. Short-term trading fees collected from
temporary investors in the funds are applied as a reduction of expenses to the
extent of such related costs; any excess is treated as paid-in capital. Expense
offset arrangements have been made with the funds' custodian so the custodian
fees may be paid indirectly by credits earned on the funds' cash balances. Such
deposit arrangements are an alternative to overnight investments.
J. USE OF ESTIMATES IN FINANCIAL STATEMENT PREPARATION 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 and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of income and expenses during the reporting period. Actual results
could differ from those estimates.
NOTE 2: RELATED PARTY TRANSACTIONS
U.S. Global Investors, Inc. (Adviser), under an investment advisory agreement
with the Trust in effect through February 28, 2001, furnishes management and
investment advisory services and, subject to the supervision of the Trustees,
directs the investments of each fund according to its investment objectives,
policies and limitations. The Adviser also furnishes all necessary office
facilities, business equipment and personnel for administering the affairs of
the Trust. Frank E. Holmes, a trustee of the funds, is the controlling owner of
the Adviser.
99
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NOTES TO FINANCIAL STATEMENTS June 30, 2000
----------------------------------------------------------------------
For the services of the Adviser, each fund pays a management fee based upon its
net assets. Fees are accrued daily and paid monthly. The contractual management
fee for each fund is:
ANNUAL PERCENTAGE OF
FUND AVERAGE DAILY NET ASSETS
------------------------------ ------------------------------
Gold Shares, All American .75% of the first $250,000,000
Equity, Equity Income, Tax and .50% of the excess
Free and Real Estate
U.S. Treasury Securities Cash .50% of the first $250,000,000
and U.S. Government and .375% of the excess
Securities Savings
World Gold and Global 1.00% of the first $250,000,000
Resources and .50% of the excess
Near-Term Tax Free .50%
China Region Opportunity 1.25%
The Adviser has voluntarily agreed to reimburse specific funds so that their
total operating expenses will not exceed certain annual percentages of average
net assets. The expenses for the year ended June 30, 2000, were voluntarily
limited as follows: All American Equity at 1.00%, Tax Free and Near-Term Tax
Free at .70% and U.S. Government Securities Savings at .40%.
United Shareholder Services, Inc. (USSI), a wholly-owned subsidiary of the
Adviser, is the transfer agent for the funds. Each fund pays an annual fee
based on its number of shareholder accounts for transfer agency services.
Certain account fees are paid directly by shareholders to the transfer agent,
which, in turn, reduces its charge to the funds. Effective November 1, 1997,
the funds engaged Brown Brothers Harriman & Co. as the custodian, fund
accounting and administration service agent with a fee structure based on
average net assets of the funds. Additionally, the Adviser was reimbursed at
cost for in-house legal and internal administration services pertaining to each
fund during the year ended June 30, 2000, in the amounts of $232,787 and
$28,867, respectively.
During the year ended June 30, 2000, A & B Mailers, Inc., a wholly- owned
subsidiary of the Adviser, was paid $601,038 for mailing services provided to
the funds.
The five independent Trustees receive compensation for serving on the Board.
The Chairman and members of special committees receive additional compensation.
Trustees are also reimbursed for out-of-pocket expenses incurred while
attending meetings. Frank E. Holmes receives no compensation from the funds for
serving on the Board.
100
<PAGE>
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NOTES TO FINANCIAL STATEMENTS June 30, 2000
----------------------------------------------------------------------
NOTE 3: INVESTMENT ACTIVITY
Purchases and sales of long-term securities for the year ended June 30, 2000,
are summarized as follows:
FUND PURCHASES SALES
------------------------- ----------- -----------
Near-Term Tax Free $ 1,513,973 $ 3,805,374
Tax Free 3,044,709 8,991,343
Equity Income 1,259,537 2,712,482
All American Equity 9,589,145 19,448,719
Real Estate 5,681,875 6,494,638
China Region Opportunity 8,456,975 12,803,700
Global Resources 8,061,799 11,667,591
World Gold 65,458,257 76,564,553
Gold Shares 23,057,230 24,305,649
U.S. Treasury Securities Cash and U.S. Government Securities Savings held only
short-term investments. The funds neither purchased nor sold long-term U.S.
government securities during the year.
Investments in foreign issuers as a percent of total investments at June 30,
2000 were: 13.36% of Real Estate, 87.05% of China Region Opportunity, 17.46% of
Global Resources, 70.97% of World Gold and 74.50% of Gold Shares.
The following table presents the income tax basis of the securities owned at
June 30, 2000, and the tax basis components of net unrealized appreciation or
depreciation:
GROSS GROSS NET UNREALIZED
AGGREGATE UNREALIZED UNREALIZED APPRECIATION
FUND TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
--------------------- ------------ ------------ ------------ ------------
U.S. Treasury
Securities Cash $136,043,107 $ -- $ -- $ --
U.S. Government
Securities Savings 745,602,151 -- -- --
Near-Term Tax Free 5,144,262 12,008 (35,154) (23,146)
Tax Free 18,926,726 184,420 (608,512) (424,092)
Equity Income 7,291,019 1,996,380 (602,573) 1,393,807
All American Equity 23,627,956 21,249,743 (514,098) 20,735,645
Real Estate 5,267,521 380,348 (96,043) 284,305
China Region
Opportunity 17,859,573 6,774,695 (3,450,460) 3,324,235
Global Resources 13,280,410 1,534,868 (930,518) 604,350
World Gold 87,461,506 2,802,519 (33,496,440) (30,693,921)
Gold Shares 33,462,680 735,479 (8,614,623) (7,879,144)
101
<PAGE>
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NOTES TO FINANCIAL STATEMENTS June 30, 2000
----------------------------------------------------------------------
Net realized capital loss carryforwards, for federal income tax purposes, may
be used to offset current or future capital gains until expiration. The loss
carryforwards and related expiration dates for each fund, as of June 30, 2000,
are as follows:
LOSS EXPIRATION
FUND CARRYFORWARDS DATE
---------------------------------- ------------ -----------
U.S. Treasury Securities Cash $ 18,188 2007 - 2008
U.S. Government Securities Savings 1,628,174 2003 - 2005
Near-Term Tax Free 218,101 2002 - 2008
Tax Free 146,068 2008
Real Estate 1,377,652 2007 - 2008
China Region Opportunity 11,259,949 2004 - 2008
Global Resources 9,581,651 2007 - 2008
World Gold 36,070,845 2001 - 2008
Gold Shares 192,169,309 2001 - 2008
POST OCTOBER 31, 1999 POST OCTOBER 31, 1999
FUND CAPITAL LOSSES CURRENCY LOSS DEFERRAL
------------------------- --------------------- ---------------------
Near-Term Tax Free $ 60,736 $ --
Tax Free 461,374 --
Equity Income 152,488 --
All American Equity -- 27,694
Real Estate 703,745 --
China Region Opportunity 3,393,441 --
Global Resources 364,234 22,368
World Gold 1,901,601 --
Gold Shares 977,686 184,099
The amounts above, in accordance with tax rules, are deemed to have occurred
on July 1, 2000.
NOTE 4: RISKS OF CONCENTRATIONS
China Region Opportunity may be exposed to risks not typically associated with
investments in the United States, due to concentration of investments in
foreign issuers in the region. These investments present risks resulting from
disruptive political or economic conditions and the potential imposition of
adverse governmental laws or currency exchange restrictions affecting the area.
The investment policies of Gold Shares and World Gold present unique risks to
the respective portfolios' values. The prices of gold and other precious metals
may
102
<PAGE>
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NOTES TO FINANCIAL STATEMENTS June 30, 2000
----------------------------------------------------------------------
be subject to fluctuations caused by international monetary and political
developments including trade or currency restrictions, currency devaluation and
revaluation, and social and political conditions within a country. Fluctuations
in the prices of gold and other precious metals will affect the market values
of the securities held by these funds.
NOTE 5: REVOLVING DEMAND NOTES
On March 1, 2000, each of the U.S. Global Investors Funds, along with other
funds under common management, entered into revolving demand notes with Brown
Brothers Harriman & Co. as denoted below subject to the borrowing limits as set
forth in the funds' registration statement. These notes are collateralized by
any or all of the securities held by Brown Bothers Harriman & Co. as the funds'
custodian. Borrowings under these notes are charged interest at the current
overnight Federal Funds Rate plus 2%. Each U.S. Global Investors Fund has a
maximum borrowing limit of the lesser of 5% of its net asset value or $10
million.
From March 1, 1999 to February 29, 2000, the U.S. Global Investors Funds, along
with other funds under common management, participated in an $85 million
revolving credit facility (Facility) dated March 1, 1999. Commitment fees
related to the Facility were paid by the participating funds. A one-time fee
was paid March 1, 1999. Additionally, an annual fee of $75,000, and quarterly
commitment fees totaling $127,500 were paid within each annual period. These
expenses were shared by all funds under common management. The allocated fees
for each fund in the Trust for the year ended June 30, 2000 was as follows:
World Gold paid $36,000, Gold Shares paid $59,000 and all other funds in the
Trust paid $1,000 each. Interest related to this Facility was charged at the
current overnight Federal Funds Rate plus 2%.
During the year ended June 30, 2000 there were no borrowings on either
facility.
NOTE 6: SHARES OF BENEFICIAL INTEREST
At June 30, 2000, individual shareholders holding more than 5% of outstanding
shares comprised 6.11% of the Near-Term Tax Free Fund.
NOTE 7: REAL ESTATE FUND LIQUIDATION
The Board of Trustees at its May 22, 2000 meeting determined that it would be
in the best interests of shareholders of the Real Estate Fund to liquidate the
fund, and they voted unanimously to recommend that shareholders approve the
liquidation. The shareholders approved the liquidation of the fund at a
shareholder meeting during August 2000.
103
<PAGE>
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FINANCIAL HIGHLIGHTS
----------------------------------------------------------------------
U.S. TREASURY SECURITIES CASH FUND
<TABLE>
<CAPTION>
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
Investment Activities
Net investment income .04 .04 .04 .04 .04
Net realized and unrealized gain -- -- -- -- --
-------- -------- -------- -------- --------
Total from investment activities .04 .04 .04 .04 .04
-------- -------- -------- -------- --------
Distributions
From net investment income (.04) (.04) (.04) (.04) (.04)
From net realized gains -- -- -- -- --
-------- -------- -------- -------- --------
Total distributions (.04) (.04) (.04) (.04) (.04)
----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
----------------------------------------------------------------------------------------------
TOTAL RETURN (a)
(excluding account fees) 4.49% 3.92% 4.55% 4.35% 4.54%
Ratios to Average Net Assets:
Net investment income 4.33% 3.87% 4.37% 4.22% 4.42%
Total expenses 1.04% 1.01% .96% 1.04% 1.03%
Net assets, end of year (in
thousands) $137,172 $155,767 $149,421 $231,882 $188,844
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
</TABLE>
See accompanying notes to financial statements.
104
<PAGE>
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FINANCIAL HIGHLIGHTS
----------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES SAVINGS FUND
<TABLE>
<CAPTION>
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
----------------------------------------------------------------------------------------------
Investment Activities
Net investment income .05 .05 .05 .05 .05
Net realized and unrealized gain -- -- -- -- --
-------- -------- -------- -------- --------
Total from investment activities .05 .05 .05 .05 .05
-------- -------- -------- -------- --------
Distributions
From net investment income (.05) (.05) (.05) (.05) (.05)
From net realized gains -- -- -- -- --
-------- -------- -------- -------- --------
Total distributions (.05) (.05) (.05) (.05) (.05)
----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
----------------------------------------------------------------------------------------------
TOTAL RETURN (a)
(excluding account fees) 5.44% 4.90% 5.38% 5.27% 5.34%
Ratios to Average Net Assets (b):
Net investment income 5.26% 4.78% 5.25% 5.13% 5.28%
Total expenses .60% .61% .67% .70% .71%
Expenses reimbursed or offset (.20)% (.30)% (.36)% (.41)% (.45)%
Net expenses .40% .31% .31% .29% .26%
Net assets, end of year (in
thousands) $755,140 $790,148 $761,518 $691,769 $588,409
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
(b) Expenses reimbursed or offset reflect reductions to total expenses, as
discussed in the notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions not occurred.
</TABLE>
See accompanying notes to financial statements.
105
<PAGE>
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FINANCIAL HIGHLIGHTS
----------------------------------------------------------------------
NEAR-TERM TAX FREE FUND
<TABLE>
<CAPTION>
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $10.47 $10.64 $10.49 $10.38 $10.47
----------------------------------------------------------------------------------------------
Investment Activities
Net investment income .44 .42 .43 .48 .47
Net realized and unrealized gain
(loss) (.17) (.17) .19 .12 (.09)
------ ------ ------ ------ ------
Total from investment activities .27 .25 .62 .60 .38
------ ------ ------ ------ ------
Distributions
From net investment income (.43) (.42) (.47) (.49) (.47)
In excess of net investment income -- -- -- -- --
From net realized gains -- -- -- -- --
In excess of net realized gains -- -- -- -- --
------ ------ ------ ------ ------
Total distributions (.43) (.42) (.47) (.49) (.47)
----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $10.31 $10.47 $10.64 $10.49 $10.38
----------------------------------------------------------------------------------------------
TOTAL RETURN (a)
(excluding account fees) 2.65% 2.35% 6.02% 5.85% 3.68%
Ratios to Average Net Assets (b):
Net investment income 4.10% 3.93% 4.12% 4.67% 4.41%
Total expenses 2.45% 2.25% 1.83% 1.92% 1.75%
Expenses reimbursed or offset (1.75)% (1.55)% (1.13)% (1.52)% (1.23)%
Net expenses .70% .70% .70% .40% .52%
Portfolio turnover rate 24% 38% 39% 103% 83%
Net assets, end of year (in
thousands) $5,222 $7,411 $8,061 $7,360 $6,545
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
(b) Expenses reimbursed or offset reflect reductions to total expenses, as
discussed in the notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions not occurred.
</TABLE>
See accompanying notes to financial statements.
106
<PAGE>
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FINANCIAL HIGHLIGHTS
----------------------------------------------------------------------
TAX FREE FUND
<TABLE>
<CAPTION>
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $11.80 $12.20 $11.89 $11.58 $11.55
----------------------------------------------------------------------------------------------
Investment Activities
Net investment income .56 .55 .57 .59 .59
Net realized and unrealized gain
(loss) (.39) (.37) .33 .31 .01
------- ------- ------- ------- -------
Total from investment activities .17 .18 .90 .90 .60
------- ------- ------- ------- -------
Distributions
From net investment income (.55) (.55) (.59) (.59) (.57)
In excess of net investment income -- -- -- -- --
From net realized gains (.04) (.03) -- -- --
In excess of net realized gains -- -- -- -- --
------- ------- ------- ------- -------
Total distributions (.59) (.58) (.59) (.59) (.57)
----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $11.38 $11.80 $12.20 $11.89 $11.58
----------------------------------------------------------------------------------------------
TOTAL RETURN (a)
(excluding account fees) 1.57% 1.39% 7.71% 7.93% 5.25%
Ratios to Average Net Assets (b):
Net investment income 4.80% 4.54% 4.77% 5.00% 5.06%
Total expenses 1.53% 1.45% 1.45% 1.46% 1.44%
Expenses reimbursed or offset (.83)% (.75)% (.75)% (1.06)% (1.08)%
Net expenses .70% .70% .70% .40% .36%
Portfolio turnover rate 16% 42% 49% 87% 69%
Net assets, end of year (in
thousands) $18,380 $24,042 $21,400 $18,327 $19,949
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
(b) Expenses reimbursed or offset reflect reductions to total expenses, as
discussed in the notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions not occurred.
</TABLE>
See accompanying notes to financial statements.
107
<PAGE>
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FINANCIAL HIGHLIGHTS
----------------------------------------------------------------------
EQUITY INCOME FUND
<TABLE>
<CAPTION>
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $14.59 $15.32 $14.49 $14.94 $13.35
----------------------------------------------------------------------------------------------
Investment Activities
Net investment income (loss) (.10) .17 .23 .31 .35
Net realized and unrealized gain
(loss) (.05) .72 2.84 1.77 1.84
------ ------ ------- ------ ------
Total from investment activities (.15) .89 3.07 2.08 2.19
------ ------ ------- ------ ------
Distributions
From net investment income -- (.17) (.28) (.27) (.35)
In excess of net investment income -- -- -- -- --
From net realized gains (2.06) (1.45) (1.96) (2.26) (.25)
In excess of net realized gains -- -- -- -- --
------ ------ ------- ------ ------
Total distributions (2.06) (1.62) (2.24) (2.53) (.60)
----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $12.38 $14.59 $15.32 $14.49 $14.94
----------------------------------------------------------------------------------------------
TOTAL RETURN (a)
(excluding account fees) (1.32)% 6.50% 23.92% 15.58% 16.60%
Ratios to Average Net Assets (b):
Net investment income (loss) (.79)% 1.15% 1.54% 2.18% 2.45%
Total expenses 2.72% 2.56% 2.14% 2.20% 2.10%
Expenses reimbursed or offset -- -- -- (.01)% (.02)%
Net expenses 2.72% 2.56% 2.14% 2.19% 2.08%
Portfolio turnover rate 14% 101% 29% 88% 51%
Net assets, end of year (in
thousands) $8,431 $9,933 $11,137 $9,615 $9,698
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
(b) Expenses reimbursed or offset reflect reductions to total expenses, as
discussed in the notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions not occurred.
</TABLE>
See accompanying notes to financial statements.
108
<PAGE>
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FINANCIAL HIGHLIGHTS
----------------------------------------------------------------------
ALL AMERICAN EQUITY FUND
<TABLE>
<CAPTION>
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $44.78 $38.80 $31.34 $24.55 $20.08
----------------------------------------------------------------------------------------------
Investment Activities
Net investment income .33 .26 .38 .38 .41
Net realized and unrealized gain .90 7.10 8.06 7.64 4.44
------- ------- ------- ------- -------
Total from investment activities 1.23 7.36 8.44 8.02 4.85
------- ------- ------- ------- -------
Distributions
From net investment income (.33) (.25) (.37) (.43) (.38)
In excess of net investment income -- (.01) (.03) -- --
From net realized gains (.50) (1.12) (.58) (.80) --
In excess of net realized gains -- -- -- -- --
------- ------- ------- ------- -------
Total distributions (.83) (1.38) (.98) (1.23) (.38)
----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $45.18 $44.78 $38.80 $31.34 $24.55
----------------------------------------------------------------------------------------------
TOTAL RETURN (a)
(excluding account fees) 2.72% 19.49% 27.31% 33.68% 24.31%
Ratios to Average Net Assets (b):
Net investment income .28% .66% 1.03% 1.51% 1.84%
Total expenses 1.53% 1.56% 1.61% 1.81% 1.90%
Expenses reimbursed or offset (.53)% (.56)% (.64)% (1.14)% (1.22)%
Net expenses 1.00% 1.00% .97% .67% .68%
Portfolio turnover rate 21% 25% 24% 7% 16%
Net assets, end of year (in
thousands) $44,038 $53,202 $34,671 $25,478 $15,220
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
(b) Expenses reimbursed or offset reflect reductions to total expenses, as
discussed in the notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions not occurred.
</TABLE>
See accompanying notes to financial statements.
109
<PAGE>
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FINANCIAL HIGHLIGHTS
----------------------------------------------------------------------
REAL ESTATE FUND
<TABLE>
<CAPTION>
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2000(*) 1999 1998(**) 1997 1996
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $9.33 $13.68 $14.22 $10.97 $9.80
---------------------------------------------------------------------------------------------------
Investment Activities
Net investment income .07 .16 .27 .40 .42
Net realized and unrealized gain
(loss) (.50) (1.39) .03 3.15 1.27
------ ------ ------- ------- ------
Total from investment activities (.43) (1.23) .30 3.55 1.69
------ ------ ------- ------- ------
Distributions
From net investment income (.04) (.15) (.39) (.30) (.39)
In excess of net investment income -- (.02) -- -- --
From net realized gains -- (2.10) (.45) -- --
In excess of net realized gains -- (.85) -- -- --
Tax return of capital -- -- -- -- (.13)
------ ------ ------- ------- ------
Total distributions (.04) (3.12) (.84) (.30) (.52)
---------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $8.86 $9.33 $13.68 $14.22 $10.97
---------------------------------------------------------------------------------------------------
TOTAL RETURN (a)
(excluding account fees) (4.60)% (8.44)% 1.39% 32.44% 17.34%
Ratios to Average Net Assets (b):
Net investment income 0.78% 1.40% 2.05% 3.19% 3.63%
Total expenses 4.25% 3.21% 2.01% 1.82% 2.27%
Expenses reimbursed or offset (.01)% (.01)% (.04)% (.02)% (.01)%
Net expenses 4.24% 3.20% 1.97% 1.80% 2.26%
Portfolio turnover rate 111% 54% 95% 118% 108%
Net assets, end of year (in thousands) $5,553 $7,070 $11,368 $13,897 $8,220
(*) Effective June 16, 2000, the fund ceased using a sub-adviser.
(**) Effective May 1, 1998, the fund changed to a new sub-adviser, Goodman & Co.
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
(b) Expenses reimbursed or offset reflect reductions to total expenses, as
discussed in the notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions not occurred.
</TABLE>
See accompanying notes to financial statements.
110
<PAGE>
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FINANCIAL HIGHLIGHTS
----------------------------------------------------------------------
CHINA REGION OPPORTUNITY FUND
<TABLE>
<CAPTION>
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $5.58 $4.09 $8.60 $6.43 $6.67
----------------------------------------------------------------------------------------------
Investment Activities
Net investment income (loss) (.02) (.03) .03 .05 .08
Net realized and unrealized gain
(loss) .55 1.55 (4.49) 2.15 (.22)
------- ------- ------- ------- -------
Total from investment activities .53 1.52 (4.46) 2.20 (.14)
------- ------- ------- ------- -------
Distributions
From net investment income -- -- (.05) (.03) (.08)
In excess of net investment income -- (.03) -- -- (.02)
From net realized gains -- -- -- -- --
------- ------- ------- ------- -------
Total distributions -- (.03) (.05) (.03) (.10)
----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $6.11 $5.58 $4.09 $8.60 $6.43
----------------------------------------------------------------------------------------------
TOTAL RETURN (a)
(excluding account fees) 9.50% 37.50% (52.06)% 34.38% (2.07)%
Ratios to Average Net Assets (b):
Net investment income (loss) (.40)% (1.18)% .39% .87% 1.24%
Total expenses 3.10% 4.41% 2.60% 2.54% 2.60%
Expenses reimbursed or offset -- -- -- (.32)% (.45)%
Net expenses 3.10% 4.41% 2.60% 2.22% 2.15%
Portfolio turnover rate 40% 13% 17% 24% 37%
Net assets, end of year (in
thousands) $21,273 $29,156 $19,460 $42,099 $20,967
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
(b) Expenses reimbursed or offset reflect reductions to total expenses, as
discussed in the notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions not occurred.
</TABLE>
See accompanying notes to financial statements.
111
<PAGE>
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FINANCIAL HIGHLIGHTS
----------------------------------------------------------------------
GLOBAL RESOURCES FUND
<TABLE>
<CAPTION>
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $4.01 $4.47 $7.33 $6.98 $5.76
----------------------------------------------------------------------------------------------
Investment Activities
Net investment (loss) (.08) (.07) (.01) (.05) (.01)
Net realized and unrealized gain
(loss) (.05) (.15) (1.95) 1.34 1.31
------- ------- ------- ------- -------
Total from investment activities (.13) (.22) (1.96) 1.29 1.30
------- ------- ------- ------- -------
Distributions
From net investment income -- -- -- (.04) --
In excess of net investment income -- -- -- -- (.01)
From net realized gains -- -- (.04) (.90) (.07)
In excess of net realized gains -- (.24) (.86) -- --
------- ------- ------- ------- -------
Total distributions -- (.24) (.90) (.94) (.08)
----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $3.88 $4.01 $4.47 $7.33 $6.98
----------------------------------------------------------------------------------------------
TOTAL RETURN (a)
(excluding account fees) (3.24)% (4.12)% (29.79)% 18.96% 22.80%
Ratios to Average Net Assets (b):
Net investment income (loss) (1.87)% (1.83)% (1.51)% (.76)% (.13)%
Total expenses 3.79% 4.34% 2.42% 2.34% 2.58%
Expenses reimbursed or offset -- -- (.04)% (.04)% (.01)%
Net expenses 3.79% 4.34% 2.38% 2.30% 2.57%
Portfolio turnover rate 55% 153% 192% 52% 117%
Net assets, end of year (in
thousands) $13,530 $16,964 $18,958 $29,983 $24,534
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
(b) Expenses reimbursed or offset reflect reductions to total expenses, as
discussed in the notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions not occurred.
</TABLE>
See accompanying notes to financial statements.
112
<PAGE>
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FINANCIAL HIGHLIGHTS
----------------------------------------------------------------------
WORLD GOLD FUND
<TABLE>
<CAPTION>
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $7.79 $9.86 $15.95 $21.12 $15.81
----------------------------------------------------------------------------------------------
Investment Activities
Net investment income (loss) (.01) .02 (.05) (.12) (.08)
Net realized and unrealized gain
(loss) (1.35) (2.08) (5.90) (3.94) 5.39
------- ------- -------- -------- --------
Total from investment activities (1.36) (2.06) (5.95) (4.06) 5.31
------- ------- -------- -------- --------
Distributions
From net investment income -- (.01) -- (1.11) --
In excess of net investment income -- -- (.14) -- --
From net realized gains -- -- -- -- --
------- ------- -------- -------- --------
Total distributions -- (.01) (.14) (1.11) --
----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $6.43 $7.79 $9.86 $15.95 $21.12
----------------------------------------------------------------------------------------------
TOTAL RETURN (a)
(excluding account fees) (17.46)% (20.89)% (37.41)% (20.10)% 33.59%
Ratios to Average Net Assets (b):
Net investment income (loss) (1.41)% .27% (.72)% (.60)% (.40)%
Total expenses 2.50% 2.18% 1.74% 1.54% 1.53%
Expenses reimbursed or offset -- (.06)% -- (.02)% (.02)%
Net expenses 2.50% 2.12% 1.74% 1.52% 1.51%
Portfolio turnover rate 93% 252% 43% 40% 26%
Net assets, end of year (in
thousands) $57,019 $96,057 $149,759 $187,466 $248,781
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
(b) Expenses reimbursed or offset reflect reductions to total expenses, as
discussed in the notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions not occurred.
</TABLE>
See accompanying notes to financial statements.
113
<PAGE>
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FINANCIAL HIGHLIGHTS
----------------------------------------------------------------------
GOLD SHARES FUND
<TABLE>
<CAPTION>
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2000 1999 1998(*) 1997(*) 1996(*)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $3.42 $3.79 $9.40 $18.40 $21.40
------------------------------------------------------------------------------------------------
Investment Activities
Net investment income (loss) (.15) (.11) .01 .40 .50
Net realized and unrealized loss (.35) (.26) (5.50) (8.90) (3.00)
------- ------- ------- ------- --------
Total from investment activities (.50) (.37) (5.49) (8.50) (2.50)
------- ------- ------- ------- --------
Distributions
From net investment income -- -- (.11) (.50) (.50)
In excess of net investment income -- -- (.01) -- --
From net realized gains -- -- -- -- --
------- ------- ------- ------- --------
Total distributions -- -- (.12) (.50) (.50)
------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $2.92 $3.42 $3.79 $9.40 $18.40
------------------------------------------------------------------------------------------------
TOTAL RETURN (a)
(excluding account fees) (14.62)% (9.76)% (58.83)% (46.49)% (11.73)%
Ratios to Average Net Assets (b):
Net investment income (loss) (3.98)% (2.88)% .53% 2.68% 1.81%
Total expenses 5.74% 5.59% 2.67% 1.84% 1.58%
Expenses reimbursed or offset -- (.35)% (.20)% (.04)% (.04)%
Net expenses 5.74% 5.24% 2.47% 1.80% 1.54%
Portfolio turnover rate 82% 388% 220% 44% 24%
Net assets, end of year (in
thousands) $25,836 $38,286 $46,251 $79,598 $153,839
(*) The values shown above for the periods have been adjusted to reflect the
1-for-10 reverse stock split, which was effective on July 1, 1998.
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
(b) Expenses reimbursed or offset reflect reductions to total expenses, as
discussed in the notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions not occurred.
</TABLE>
See accompanying notes to financial statements.
114
<PAGE>
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------------------------------------
To the Trustees and Shareholders
of U.S. Global Investors Funds
We have audited the statements of assets and liabilities, including the
portfolios of investments, of U.S. Global Investors Funds (Trust) (comprising,
respectively, U.S. Treasuries Securities Cash Fund, U.S. Government Securities
Savings Fund, Near-Term Tax Free Fund, Tax Free Fund, Equity Income Fund, All
American Equity Fund, Real Estate Fund, China Region Opportunity Fund, Global
Resources Fund, World Gold Fund, Gold Shares Fund) as of June 30, 2000, and the
related statements of operations, the statements of changes in net assets, and
the financial highlights for the year then ended. These financial statements and
financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial statements of U.S.
Global Investors Funds as of June 30, 1999, were audited by other auditors whose
report dated August 23, 1999, expressed an unqualified opinion on those
statements.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of June 30, 2000, by correspondence with the custodian and brokers. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective funds constituting U.S. Global Investors Funds, as of June 30,
2000, the results of their operations, the changes in their net assets, and
their financial highlights for the year then ended, in conformity with
accounting principles generally accepted in the United States.
/S/ Arthur Andersen LLP
Boston, MA
August 11, 2000
115
<PAGE>
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ADDITIONAL INFORMATION
----------------------------------------------------------------------
Additional Federal Tax Information
(Unaudited)
The percentage of tax-exempt dividends paid by the Funds for the year ended
June 30, 2000, was:
Near-Term Tax Free 96.20%
Tax Free 98.29%
The percentage of ordinary income dividends paid by the Funds during the year
ended June 30, 2000, which qualify for the Dividends Received Deduction
available to corporate shareholders was:
All American Equity 100.00%
Real Estate 32.12%
The Funds hereby designate the following approximate amounts as capital gain
dividends for the purpose of the dividends paid deduction:
Tax Free $ 65,469
Equity Income 1,278,871
All American Equity 566,331
In January 2001, the Funds will report on Form 1099 the tax status of all
distributions made during the calendar year 2000. Shareholders should use the
information on Form 1099 for their income tax returns.
116
<PAGE>
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