<PAGE> 1
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[ORBITEX LOGO]
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S E M I - A N N U A L UNAUDITED
R E P O R T OCTOBER 31, 1998
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ORBITEX STRATEGIC
NATURAL RESOURCES FUND
ORBITEX INFO-TECH AND
COMMUNICATIONS FUND
ORBITEX GROWTH FUND
ORBITEX ASIAN
HIGH YIELD FUND
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<PAGE> 2
ORBITEX GROUP OF FUNDS
STRATEGIC NATURAL RESOURCES FUND
MANAGED BY ORBITEX MANAGEMENT INC.
PERFORMANCE REVIEW: The period April 30, 1998 to October 31, 1998 has been a
very challenging period for most investors including natural resource investors.
During the period the Orbitex Strategic Natural Resources Fund Class A Shares
had a total return of (23.46)%, compared to (0.41)% for the S&P 500 Index and
(24.42)% for the Lipper Natural Resources Fund Category; however, since
inception (October 23, 1997) to October 31, 1998, the Class A Shares'
performance is (15.24)% compared to 17.42% for the S&P 500 Index and (30.52)%
for the Lipper Natural Resources Fund Category. The Class B Shares' performance
is 3.44% for the period September 21, 1998 (inception) to October 31, 1998. The
Fund seeks to achieve its objective through a flexible policy of investing
primarily in common stocks of companies engaged in natural resource industries
and industries supportive to natural resource industries.
Concerns over global growth, especially from the Pacific Rim and other emerging
countries is prolonging the weakness in commodity prices. Crude oil prices
continue to trade near record low levels despite the Organization of Petroleum
Exporting Countries' ("OPEC") agreement to cut production twice in the past six
months. Additionally many natural gas and integrated oil companies have cut back
on exploration and production expenditures, negatively impacting the Fund's
holdings in oil service companies like Diamond Offshore Drilling, Petroleum GEO
Services ADR, and Schlumberger Ltd. Seasonally, November through April is a
strong demand period for some natural resources including oil, natural gas,
gold, and copper. Weather experts recently announced that La Nina is here which
may cause a cold winter, thus potentially increasing prices in heating oil and
natural gas. We believe that as a result of the recent decline in oil revenue by
OPEC countries there is tremendous pressure to increase oil prices. The gold and
other precious metals markets should stabilize as we enter the traditionally
strong demand period driven by Christmas buying, the wedding season in India and
the launch of the Chinese new year. The Fund is positioned in Barrick Gold and
Newmont Mining which we believe will benefit from improved precious metals
performance.
During the period, the depressed valuations led to an increase in corporate
stock buybacks and merger and acquisition activity. The Fund continues to place
above average emphasis on large capitalization, defensive, cash rich and cost
cutting securities within the natural resource sector. Despite the difficult
environment, noteworthy company performance spanned a diverse group of sectors.
The Fund benefited from its positions in Exxon Corporation, Stillwater Mining,
Dupont and Fort James. Despite the strong fundamentals in the natural gas
industry, Comstock Resources, EEX Corporation and Nuevo Energy were
disappointing performers.
OUTLOOK: We see an improving environment for the natural resources sector toward
the end of 1998 and into 1999 as oversupplied inventory levels improve (due to
less supply). Production for some of these commodities is slowing or stopping
due to the prolonged weakness in commodity prices. The cure for low commodity
prices is that low commodity prices tend to generate demand. Additionally, the
weaker United States dollar and lower global interest rates should stabilize
growth and put more liquidity into the system; thereby increasing demand for
natural resources. We are extremely positive on the longer term outlook for the
natural resource markets. These companies have rarely, if ever, sold at such low
valuations.
We appreciate your investment in the Orbitex Strategic Natural Resources Fund.
<PAGE> 3
ORBITEX GROUP OF FUNDS
INFO-TECH & COMMUNICATIONS FUND
MANAGED BY ORBITEX MANAGEMENT INC.
PERFORMANCE REVIEW: During the period from April 30, 1998 to October 31, 1998,
the Info-Tech & Communications Fund Class A Shares had a total return of
(0.71)%, which compares with a total return of (0.41)%, for the S&P 500 Index
and (5.12)% for the Lipper Science & Technology Index; however, since inception
(October 22,1997) to October 31, 1998, the Class A Shares' performance is 29.87%
compared to 17.42% for the S&P 500 Index and 3.33% for the Lipper Science &
Technology Category. The Class B Shares' performance is 6.69% for the period
September 16, 1998 (inception) to October 31, 1998. The Fund seeks to achieve
superior long-term capital growth through selective investment in companies
engaged in the communications, information and related technology industries.
This six-month period for the Fund was an extremely challenging and volatile
period in the stock market. The Fund showed strong relative strength against the
major indexes and its peer group from May through July, posting a peek
performance in mid-July for a year-to-date return of 54% (January 1, 1998,
through July 21, 1998). With the prospect of rising turmoil throughout the
emerging markets, the Fund moved into more conservative holdings consisting of
both domestic and international traditional telecommunications services
companies with a supporting dividend yield. However, few securities in the
market were unaffected by the Russian devaluation of the Ruble, leading stocks
lower in the period of August through the first week of October. At its low
point, the Fund declined to a year-to-date gain of 20%. The Fund repositioned
into more aggressive, attractively valued, smaller capitalization technology
stocks during the ruble crisis that increased performance in the market rally
that ensued in the latter half of October.
Some of the top performing investments for the Fund during the six-month period
included stocks in the semiconductor, software, internet, networking and
telecommunications services sectors. In the semiconductor arena, the Fund
focused on very specialized companies that design communications related
semiconductors, such as PMC Sierra and its data networking chips, Maxim with its
consumer electronics analog chips and Texas Instruments with its digital signal
processor chips (DSP's) used in cellular telephones. In the software arena, the
Fund was particularly successful with its investment in Saville Systems, a
leading vendor of telecommunications billing software. In networking,
investments in Cisco, Northern Telecom, Uniphase, Ascend, FORE and a host of
others, have played a key role in the Fund's performance since the beginning of
the year. In the telecommunications services arena, WorldCom continues to be one
of the Fund's top holdings. With the completion of the MCI merger, WorldCom's
unique, global telecommunications market position continues to be recognized by
the marketplace. Lastly, the internet has played a significant role in the
Fund's performance with investments in Inktomi, E-Bay, DoubleClick, Broadcast
Communications and Ozemail.
The Fund experienced weak performance from its holdings of international
telecommunications stocks. The Fund's investments in Telebras, Portugal Telecom,
Telecom Italia and Deutsche Telecom, intended to provide downside support, had a
negative impact on the Fund and have been eliminated. Additionally, the Fund's
investments in wireless services stocks Omnipoint and Powertel were a
disappointment. The Fund, however, continues to view these wireless services
stocks as central opportunities in the burgeoning world of wireless phone
service and continues to maintain these investments.
OUTLOOK: While it seems paradoxical to some, technology, driven by the emerging
communications boom occurring on a world-wide basis, has proven to be the flight
to safety sector during the period. A flight to safety implies a degree of
predictability. The communications industry is in its infancy. The emergence of
the strong consumer demand for internet services, corporate demand for
increasing network bandwidth and speed, and the deregulation of the world
telecommunications service providers are bringing new levels of growth and
opportunity for many of today's leading technology companies. It is these growth
opportunities that the Fund continues to focus on going forward. As new,
state-of-the-art networks are established around the world, the long-term
outlook for semiconductors, software, networking and the internet continues to
be extremely compelling. This exciting and complex era of technology securities
continues to capture investor's attention and offers many growth prospects.
We appreciate your investment in the Orbitex Info-Tech & Communications Fund.
<PAGE> 4
ORBITEX GROUP OF FUNDS
GROWTH FUND
MANAGED BY ORBITEX MANAGEMENT INC.
PERFORMANCE REVIEW: For the period April 30, 1998 to October 31, 1998, the
Orbitex Growth Fund had a total return of (7.08)% versus (0.41)% for the S&P 500
Index and (6.84)% for the Lipper Growth Fund Category; however, since inception
(October 22, 1997) to October 31, 1998, the Class A Shares' performance is
11.07% compared to 17.42% for the S&P 500 Index and 5.39% for the Lipper Growth
Fund Category. The Class B Shares' performance is 1.15% for the period September
16, 1998 (inception) to October 31, 1998. The Fund seeks to achieve its
objective of long-term growth of capital through investments in securities that
have the potential for significant appreciation.
The mood among investors has shifted significantly since reaching lows on August
31, 1998 and everyone is hoping the value created by this market downturn will
last through year-end. Despite the ongoing concerns in emerging Asian and
Japanese Markets, plus the liquidity concerns with hedge funds, the market
sentiment has turned very bullish as equity prices continue to melt-up. United
States gross domestic product remains stronger than originally expected and the
Federal Reserve has provided liquidity with three interest rate decreases. Also,
the market breadth has broadened and is no longer concentrated in the top growth
stocks. We believe this market breadth is a bullish sign for the general market.
The Fund benefited from concentrated weightings in the pharmaceutical,
financial, and technology areas while underweighting the energy and basic
industry sectors. Notable performers for the period include Schering Plough,
Mellon Bank, Gateway 2000 and General Electric. Disappointing performance for
the period included Atlantic Richfield and FPL Group.
PORTFOLIO COMPOSITION: The Fund's sector and stock weighting are a result of
bottom-up stock picking across all capitalizations. The Fund continues to have a
fairly standard approach to record high valuations achieved in the market by a
number of companies in the internet sector. On October 31, 1998, the Fund had a
12% cash position, a material but temporary cash position.
OUTLOOK: We expect the financial markets to remain volatile in the near term as
the markets struggle between lower global interest rates and earnings growth for
1999. Inflation continues to be low and we see no reason for inflation to be a
concern over the near term. Commodity prices remain depressed and there is
little, if any, pricing power. During this environment, the Fund will continue
to seek out quality, value-oriented growth stocks.
We appreciate your investment in the Orbitex Growth Fund.
<PAGE> 5
ORBITEX GROUP OF FUNDS
STRATEGIC NATURAL RESOURCES FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 92.87%
ALUMINUM - 1.75%
Alcan Aluminum, Ltd. ................................................. 2,500 $ 63,281
--------------
BUILDING CONSTRUCTION - 1.73%
J. Ray McDermott SA (a) .............................................. 2,000 62,750
--------------
CHEMICALS - 3.71%
Crompton & Knowles Corp. ............................................. 3,000 48,188
Du Pont (E.I.) de Nemours and Co. .................................... 1,500 86,250
--------------
134,438
--------------
ELECTRIC UTILITIES - 5.83%
FPL Group, Inc. ...................................................... 1,500 93,844
PG&E Corp. ........................................................... 1,750 53,265
Unicom Corp. ......................................................... 1,700 64,069
--------------
211,178
--------------
GAS EXPLORATION - 2.99%
Anderson Exploration, Ltd. (a) ....................................... 2,500 25,437
Oryx Energy Co. (a) .................................................. 2,500 35,000
Seagull Energy Corp. (a) ............................................. 4,000 47,750
--------------
108,187
--------------
GAS & PIPELINE UTILITIES - 1.03%
K N Energy, Inc. ..................................................... 750 37,266
--------------
INTERNATIONAL OIL - 15.76%
Chevron Corp. ........................................................ 1,000 81,500
Conoco, Inc., Class A (a) ............................................ 3,500 87,062
Mobil Corp. .......................................................... 1,000 75,688
Ranger Oil, Ltd. (a) ................................................. 10,000 63,750
Royal Dutch Petroleum Co., NY Shares.................................. 2,400 118,200
Texaco, Inc. ......................................................... 1,200 71,175
USX-Marathon Group ................................................... 2,250 73,547
--------------
570,922
--------------
LIFE SCIENCES - 1.63%
Monsanto Co. ......................................................... 1,450 58,906
--------------
MINING - 11.08%
Aber Resources, Ltd. (a) ............................................. 3,000 16,818
Apex Silver Mines, Ltd. (a) .......................................... 4,500 41,063
Barrick Gold Corp. ................................................... 2,500 53,437
Freeport-McMoRan Copper & Gold, Inc., Class A ........................ 3,500 41,781
Getchell Gold Corp. (a) .............................................. 3,000 52,500
Newmont Mining Corp. ................................................. 3,500 74,375
Normandy Mining, Ltd. ................................................ 20,000 17,888
Phelps Dodge Corp. ................................................... 1,000 57,625
Stillwater Mining Co. (a) ............................................ 1,000 32,375
Viceroy Resource Corp. (a) ........................................... 6,500 13,480
--------------
401,342
--------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 6
ORBITEX GROUP OF FUNDS
STRATEGIC NATURAL RESOURCES FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ -----
<S> <C> <C>
OIL - 12.26%
Atlantic Richfield Co. ............................................... 1,250 $ 86,094
Canadian 88 Energy Corp. (a) ......................................... 7,000 24,951
Exxon Corp. .......................................................... 2,500 178,125
Pennzoil Co. ......................................................... 1,000 35,875
Sun Company, Inc. .................................................... 1,000 34,312
Unocal Corp. ......................................................... 2,500 84,844
--------------
444,201
--------------
OIL & GAS DRILLING - 0.85%
Diamond Offshore Drilling, Inc. ...................................... 1,000 30,688
--------------
OIL & GAS EXPLORATION AND PRODUCTION - 21.72%
Anadarko Petroleum Corp. ............................................. 2,000 67,750
Baytex Energy, Ltd., Class A (a)...................................... 5,000 16,850
Benz Energy, Ltd. (a) ................................................ 25,000 11,342
Bonavista Petroleum Ltd. (a) ......................................... 2,500 11,909
Burlington Resources, Inc. ........................................... 2,750 113,266
Canadian Natural Resources, Ltd. (a) ................................. 2,000 34,997
Comstock Resources, Inc. (a) ......................................... 6,000 29,625
EEX Corp. (a) ........................................................ 10,000 38,750
Enron Corp. .......................................................... 2,000 105,500
Global Industries, Inc. (a) .......................................... 3,500 33,687
Gulf Canada Resources, Ltd. .......................................... 10,000 37,500
Kerr-Mcgee Corp. ..................................................... 1,200 47,850
Nuevo Energy Co. (a) ................................................. 2,500 52,969
Pacalta Resources, Ltd. (a) .......................................... 4,000 13,739
Probe Exploration, Inc. (a) .......................................... 10,000 16,202
Sharpe Resources Corp. (a) ........................................... 30,000 13,027
Snyder Oil Corp. ..................................................... 3,000 47,812
Suncor Energy Inc. ................................................... 500 15,878
Ultra Petroleum Corp. (a) ............................................ 5,000 6,092
Vastar Resources, Inc. ............................................... 1,500 71,719
--------------
786,464
--------------
OIL FIELD SERVICE - 4.34%
BJ Services Co. (a) .................................................. 2,000 40,875
Petroleum Geo-Services, ADR (a) ...................................... 1,000 21,375
Schlumberger Ltd. .................................................... 1,000 52,500
Tidewater, Inc. ...................................................... 1,500 42,468
--------------
157,218
--------------
PAPER & RELATED PRODUCTS - 4.30%
Champion International Corp. ......................................... 1,500 47,906
Fort James Corp. ..................................................... 1,500 60,469
Mead Corp. ........................................................... 1,500 47,437
--------------
155,812
--------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 7
ORBITEX GROUP OF FUNDS
STRATEGIC NATURAL RESOURCES FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ -----
<S> <C> <C>
PETROLEUM SERVICES - 2.69%
Phillips Petroleum Co. ............................................... 1,500 $ 64,875
Varco International, Inc. (a) ........................................ 3,000 32,438
--------------
97,313
--------------
RETAIL - 1.20%
Home Depot, Inc. ..................................................... 1,000 43,500
--------------
TOTAL COMMON STOCKS - (Cost $3,471,272) 3,363,466
--------------
</TABLE>
<TABLE>
<CAPTION>
SHORT TERM INVESTMENT (COST $441,000)- 12.18% PRINCIPAL
TIME DEPOSIT - 12.18% AMOUNT
- --------------------- ------
<S> <C> <C>
State Street Bank and Trust Co.,
4.750%, 11/2/1998 ...................................................$ 441,000 441,000
--------------
TOTAL INVESTMENTS (COST $3,912,272) - 105.05% 3,804,466
OTHER ASSETS AND LIABILITIES - (5.05)% (182,735)
--------------
NET ASSETS - 100.00% $ 3,621,731
==============
</TABLE>
(a) Denotes non-income producing security
ADR - American Depository Receipt
See Notes to Financial Statements.
<PAGE> 8
ORBITEX GROUP OF FUNDS
INFO-TECH & COMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 70.19%
ADVERTISING - 2.97%
DoubleClick, Inc. (a) ................................................ 11,600 $ 382,800
--------------
BROADCASTING - 1.16%
Broadcast Communications PLC (a) ..................................... 3,000 149,625
--------------
COMPUTERS & BUSINESS EQUIPMENT - 8.23%
Apple Computer, Inc. (a) ............................................. 5,000 185,625
Compaq Computer Corp. ................................................ 8,000 253,000
Gateway 2000, Inc. (a) ............................................... 7,000 390,688
Sun Microsystems, Inc. (a) ........................................... 4,000 233,000
--------------
1,062,313
--------------
ELECTRONICS - 9.82%
Maxim Integrated Products, Inc. (a) .................................. 5,000 178,438
Micron Technology, Inc. (a) .......................................... 5,000 190,000
PMC-Sierra, Inc. (a) ................................................. 11,500 516,062
Texas Instruments, Inc. .............................................. 6,000 383,625
--------------
1,268,125
--------------
NETWORKING PRODUCTS - 7.26%
Cisco Systems, Inc. (a) .............................................. 5,000 315,000
FORE Systems, Inc. (a) ............................................... 22,500 351,563
Newbridge Networks Corp. (a) ......................................... 13,200 270,600
--------------
937,163
--------------
SOFTWARE - 4.98%
Concentric Network Corp. (a) ......................................... 8,000 194,000
Evolving Systems, Inc. (a) ........................................... 34,500 58,219
Ozemail, Ltd., ADR ................................................... 39,500 390,062
--------------
642,281
--------------
TELECOMMUNICATIONS SERVICES - 20.44%
GST Telecommunications, Inc. (a) ..................................... 22,600 156,787
ICG Communications, Inc. (a) ......................................... 30,000 620,625
Metronet Communications Corp., Class B (a) ........................... 2,000 46,000
Northern Telecom, Ltd. ............................................... 14,300 612,219
Omnipoint Corp. (a) .................................................. 75,200 695,600
Saville Systems PLC, ADR (a).......................................... 30,000 506,250
--------------
2,637,481
--------------
TELEPHONE - 15.33%
ALLTEL Corp. ......................................................... 9,400 440,037
AT&T Corp. ........................................................... 3,500 217,875
Intermedia Communications, Inc. (a) .................................. 28,000 518,000
MCI WorldCom, Inc. (a) ............................................... 10,331 570,788
Powertel, Inc. (a) ................................................... 15,600 232,050
--------------
1,978,750
--------------
TOTAL COMMON STOCKS - (Cost $8,602,410) 9,058,538
--------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 9
ORBITEX GROUP OF FUNDS
INFO-TECH & COMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
------ -----
<S> <C> <C>
SHORT TERM INVESTMENTS (COST $3,106,000)- 24.06%
COMMERCIAL PAPER - 24.06% Prudential Funding Corp.
5.750%, 11/2/1998 .................................................... $3,106,000 $ 3,106,000
--------------
TOTAL INVESTMENTS (COST $11,708,410) - 94.25% 12,164,538
OTHER ASSETS AND LIABILITIES- 5.75% 741,514
--------------
NET ASSETS - 100.00% $ 12,906,052
==============
</TABLE>
(a) Denotes non-income producing security
ADR - American Depository Receipt
See Notes to Financial Statements.
<PAGE> 10
ORBITEX GROUP OF FUNDS
GROWTH FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 88.29%
BANKS - 6.94%
Charter One Financial, Inc. .......................................... 850 $ 23,322
Mellon Bank Corp. .................................................... 500 30,062
Summit Bancorp. ...................................................... 550 20,866
--------------
74,250
--------------
BROADCASTING - 1.92%
Clear Channel Communications, Inc. (a) ............................... 450 20,503
--------------
COMPUTERS & BUSINESS EQUIPMENT - 7.46%
Equant NV, NY Shares (a).............................................. 500 21,875
Gateway 2000, Inc. (a) ............................................... 500 27,906
Hewlett-Packard Co. .................................................. 500 30,094
--------------
79,875
--------------
CONSUMER PRODUCTS - 1.55%
Fortune Brands, Inc. ................................................. 500 16,531
--------------
COSMETICS & TOILETRIES - 2.52%
Gillette Co. ......................................................... 600 26,962
--------------
DIVERSIFIED - 2.01%
Berkshire Hathaway, Inc., Class B (a)................................. 10 21,480
--------------
DRUGS & HEALTH CARE - 12.58%
American Home Products Corp. ......................................... 400 19,500
Schering-Plough Corp. ................................................ 300 30,862
Tenet Healthcare Corp. (a) ........................................... 900 25,144
Warner-Lambert Co. ................................................... 400 31,350
Watson Pharmaceuticals, Inc. (a) ..................................... 500 27,813
--------------
134,669
--------------
ELECTRICAL EQUIPMENT - 2.25%
General Electric Co. ................................................. 275 24,063
--------------
ELECTRIC UTILITIES - 5.39%
FPL Group, Inc. ...................................................... 500 31,281
Unicom Corp. ......................................................... 700 26,381
--------------
57,662
--------------
FINANCIAL SERVICES - 1.37%
Household International, Inc. ........................................ 400 14,625
--------------
FOOD & BEVERAGES - 2.37%
PepsiCo, Inc. ........................................................ 750 25,313
--------------
INSURANCE - 6.63%
American Bankers Insurance Group, Inc. ............................... 800 35,750
SunAmerica, Inc. ..................................................... 500 35,250
--------------
71,000
--------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 11
ORBITEX GROUP OF FUNDS
GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ -----
<S> <C> <C>
MINING - 1.51%
Stillwater Mining Co. (a) ............................................ 500 $ 16,188
--------------
NETWORKING PRODUCTS - 2.35%
Cisco Systems, Inc. (a) .............................................. 400 25,200
--------------
OIL - 3.99%
Atlantic Richfield Co. ............................................... 300 20,663
Unocal Corp. ......................................................... 650 22,059
--------------
42,722
--------------
OIL & GAS EXPLORATION AND PRODUCTION - 2.69%
Burlington Resources, Inc. ........................................... 700 28,831
--------------
OIL FIELD SERVICE - 5.82%
BJ Services Co. (a) .................................................. 1,000 20,437
BJ's Wholesale Club, Inc. (a) ........................................ 800 28,750
Schlumberger Ltd. .................................................... 250 13,125
--------------
62,312
--------------
PHOTOGRAPHY - 2.17%
Eastman Kodak Co. .................................................... 300 23,250
--------------
RETAIL - 2.03%
Home Depot, Inc. ..................................................... 500 21,750
--------------
RETAIL TRADE - 2.60%
Rite Aid Corp. ....................................................... 700 27,781
--------------
SOFTWARE - 3.49%
Electronic Arts, Inc. (a) ............................................ 550 22,619
Oracle Corp. (a) ..................................................... 500 14,781
--------------
37,400
--------------
TELEPHONE - 6.26%
AT&T Corp. ........................................................... 350 21,788
MCI WorldCom, Inc. (a) ............................................... 400 22,100
SBC Communications, Inc. ............................................. 500 23,156
--------------
67,044
--------------
TOBACCO - 2.39%
Philip Morris Companies, Inc. ........................................ 500 25,563
--------------
TOTAL COMMON STOCKS - (Cost $886,119) 944,974
--------------
TOTAL INVESTMENTS (COST $886,119) - 88.29% 944,974
OTHER ASSETS AND LIABILITIES- 11.71% 125,297
--------------
NET ASSETS - 100.00% $ 1,070,271
==============
</TABLE>
(a) Denotes non-income producing security
See Notes to Financial Statements.
<PAGE> 12
ORBITEX GROUP OF FUNDS
ASIAN HIGH YIELD FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
------ -----
<S> <C> <C>
SHORT TERM INVESTMENT (COST $903,000) - 92.40%
UNITED STATES - 92.40%
TIME DEPOSIT - 92.40%
State Street Bank and Trust Co.,
4.750% due 11/2/1998 ................................................$ 903,000 $ 903,000
--------------
TOTAL INVESTMENTS (COST $903,000) - 92.40% 903,000
OTHER ASSETS AND LIABILITIES- 7.60% 74,299
--------------
NET ASSETS - 100.00% $ 977,299
==============
</TABLE>
See Notes to Financial Statements.
<PAGE> 13
ORBITEX GROUP OF FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
STRATEGIC
NATURAL INFO-TECH & ASIAN HIGH
RESOURCES COMMUNICATIONS GROWTH YIELD
FUND FUND FUND FUND
---- ---- ---- ----
<S> <C> <C> <C> <C>
ASSETS
Investments in securities, at value (Note 2) $ 3,363,466 $ 9,058,538 $ 944,974 $ -
Short term investments (Note 2)............. 441,000 3,106,000 - 903,000
------------ ----------- ------------ -----------
Total investments......................... 3,804,466 12,164,538 944,974 903,000
Cash........................................ - 4,898 46,066 921
Foreign currency, at value (cost $ 131)..... 131 - - -
Unrealized gain on forward currency contracts 446 - - -
Receivable for securities sold.............. 133,130 476,735 95,306 238
Interest and Dividends receivable.......... 2,386 2,164 605 -
Receivable for fund shares sold............. 3,500 304,952 - 15,000
Receivable due from advisor (Note 3)........ 92,141 50,793 117,675 127,422
Deferred organizational expenses (Note 2)... 15,127 15,124 15,124 15,124
Other assets................................ 7,785 8,525 6,017 8,563
------------ ----------- ------------ -----------
TOTAL ASSETS.......................... 4,059,112 13,027,729 1,225,767 1,070,268
LIABILITIES
Payable to custodian........................ 3,512 - - -
Unrealized loss on forward currency contracts 2,606 - - -
Payable for securities purchased............ 321,219 - 69,868 -
Payable for fund shares redeemed............ 22,362 32,189 - -
Payable for trustee fees (Note 3)........... 1,586 1,578 1,578 1,564
Payable for organizational expenses (Note 2) 4,589 4,589 4,589 4,589
Accrued expenses and other liabilities...... 81,507 83,321 79,461 86,816
------------ ----------- ------------ -----------
TOTAL LIABILITIES..................... 437,381 121,677 155,496 92,969
------------ ----------- ------------ -----------
NET ASSETS............................ $ 3,621,731 $12,906,052 $ 1,070,271 $ 977,299
============ =========== ============ ===========
NET ASSETS
Paid-in capital............................. $ 4,468,122 $12,544,475 $ 998,643 $ 2,045,301
Undistributed net investment income (loss).. 117,953 (20,052) 10,942 2,780
Accumulated net realized gain (loss) on
investments and foreign currency transactions (854,378) (74,559) 1,831 (1,070,782)
Net unrealized appreciation (depreciation) on
investments and foreign currency translations (109,966) 456,188 58,855 -
------------ ----------- ------------ -----------
NET ASSETS............................ $ 3,621,731 $12,906,052 $ 1,070,271 $ 977,299
============ =========== ============ ===========
CLASS A SHARES:
Net assets..................................... $ 3,621,421 $12,060,477 $ 1,054,665 $ 977,001
============ =========== ============ = ===========
Net asset value per share (based on shares of
beneficial interest outstanding, par value
$.01 per share)........................... $ 12.66 $ 19.49 $ 16.66 $ 7.97
=========== =========== ============ ===========
Offering price per share....................... $ 13.43 $ 20.68 $ 17.68 $ 8.37
============ =========== ============ ===========
Total shares outstanding at end of period...... 286,146 618,800 63,312 122,525
============ =========== ============ ===========
CLASS B SHARES:
Net assets..................................... $ 310 $ 845,575 $ 15,606 $ 298
============ =========== ============ ===========
Net asset value and offering price per share
(based on shares of beneficial interest
outstanding, par value $.01 per share).... $ 12.61 $ 19.46 $ 16.66 $ 7.96
=========== =========== ============ ===========
Total shares outstanding at end of period...... 25 43,441 937 37
=========== =========== ============ ===========
INVESTMENTS, AT COST........................... $ 3,912,272 $11,708,410 $ 886,119 $ 903,000
=========== =========== ============ ===========
</TABLE>
See Notes to Financial Statements
<PAGE> 14
ORBITEX GROUP OF FUNDS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED OCTOBER 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
STRATEGIC
NATURAL INFO-TECH & ASIAN HIGH
RESOURCES COMMUNICATIONS GROWTH YIELD
FUND FUND FUND FUND
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest income............................. $ 12,087 $ 47,313 $ 2,641 $ 130,146
Dividend income............................. 32,281 14,886 2,854 1,283
Foreign taxes withheld...................... (430) (440) (26) -
------------ ----------- ------------ -----------
TOTAL INVESTMENT INCOME................... 43,938 61,759 5,469 131,429
EXPENSES
Custodian fee (Note 3)...................... 42,205 35,284 38,979 35,116
Administration fee (Note 3)................. 42,192 42,045 42,045 41,753
Investment advisor fee (Note 3)............. 24,467 45,251 3,350 17,019
Transfer agent fee.......................... 21,408 20,852 20,193 20,504
Professional fees........................... 19,336 19,253 19,253 19,095
Registration fees........................... 16,445 14,322 16,134 12,593
Distribution fees (Note 3):
Class A Shares............................ 7,830 14,272 1,779 4,093
Class B Shares............................ - 453 19 -
Printing expense............................ 4,929 4,906 4,906 4,860
Insurance fee............................... 2,951 2,941 2,941 2,921
Amortization of organizational expenses
(Note 2).................................... 1,763 1,758 1,758 1,747
Trustees' fee (Note 3)...................... 1,711 1,703 1,703 1,690
Interest expense (Note 11).................. - - - 11,796
Miscellaneous expense....................... 1,296 1,289 1,290 4,937
------------ ----------- ------------ -----------
Total expenses before waivers,
reimbursements and custodial credits...... 186,533 204,329 154,350 178,124
Expenses waived and reimbursed (Note 3)..... (140,275) (121,926) (146,331) (155,728)
Fees reduced by credits allowed by the
custodian................................. (1,063) (592) (418) (997)
------------ ----------- ------------ -----------
NET EXPENSES.............................. 45,195 81,811 7,601 21,399
------------ ----------- ------------ -----------
NET INVESTMENT INCOME (LOSS).............. (1,257) (20,052) (2,132) 110,030
------------ ----------- ------------ -----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized loss on:
Investments............................... (554,953) (44,275) (40,793) (893,632)
Foreign currency related transactions..... (2,013) - - -
------------ ----------- ------------ -----------
Total net realized loss................. (556,966) (44,275) (40,793) (893,632)
------------- ------------ ------------- ------------
Net change in unrealized appreciation
(depreciation) on:
Investment transactions................... (499,388) 150,085 269 14,270
Foreign currency related translations..... (2,161) - - -
------------ ----------- ------------ -----------
Total net change in unrealized
appreciation (depreciation)........... (501,549) 150,085 269 14,270
------------- ----------- ------------ -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS)........................ (1,058,515) 105,810 (40,524) (879,362)
------------ ----------- ------------ -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS................................ $ (1,059,772) $ 85,758 $ (42,656) $ (769,332)
============ =========== ============ ===========
SALES CHARGE PAID TO
FUNDS DISTRIBUTOR, INC...................... $ 34,695 $ 501,759 $ 7,609 $ 3,514
============ =========== ============ ===========
</TABLE>
See Notes to Financial Statements
<PAGE> 15
ORBITEX GROUP OF FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
STRATEGIC INFO-TECH &
NATURAL COMMUNICATIONS
RESOURCES FUND FUND
-------------- ----
SIX MONTHS SIX MONTHS
ENDED PERIOD* ENDED PERIOD*
10/31/98 ENDED 10/31/98 ENDED
(UNAUDITED) 4/30/98 (UNAUDITED) 4/30/98
----------- ------- ----------- -------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss)................... $ (1,257) $ 127,318 $ (20,052) $ (5,210)
Net realized gain (loss) on investments
and foreign currency related transactions... (556,966) (291,457) (44,275) (30,284)
Net change in unrealized appreciation
(depreciation) on investment transactions... (501,549) 391,583 150,085 306,103
------------ ----------- ------------ -----------
Net increase (decrease) in net assets
resulting from operations................... (1,059,772) 227,444 85,758 270,609
------------ ----------- ------------ -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
FROM:
Net investment income:
Class A..................................... - (7,147) - -
Class B..................................... - - - -
Distributions in excess of net realized gains.. - (6,916) - -
------------ ----------- ------------ -----------
Total dividends and distributions to shareholders - (14,063) - -
------------ ------------ ------------ -----------
FUND SHARE TRANSACTIONS (NOTE 6)............... (1,016,331) 5,464,453 10,379,952 2,149,733
------------ ----------- ------------ -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS........ (2,076,103) 5,677,834 10,465,710 2,420,342
------------ ----------- ------------ -----------
NET ASSETS:
Beginning of period ........................... 5,697,834 20,000 2,440,342 20,000
------------ ----------- ------------ -----------
End of period.................................. $ 3,621,731 $ 5,697,834 $ 12,906,052 $ 2,440,342
============ =========== ============ ===========
Undistributed net investment income (loss) at
end of period............................... $ 117,953 $ 119,210 $ (20,052) $ -
============ =========== ============ ===========
</TABLE>
* The commencement of investment operations was October 23, 1997 for Strategic
Natural Resources Fund and October 22, 1997 for Info-Tech & Communications
Fund.
See Notes to Financial Statements.
<PAGE> 16
ORBITEX GROUP OF FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
ASIAN HIGH
GROWTH YIELD
FUND FUND
SIX MONTHS SIX MONTHS
ENDED PERIOD* ENDED PERIOD*
10/31/98 ENDED 10/31/98 ENDED
(UNAUDITED) 4/30/98 (UNAUDITED) 4/30/98
----------- ------- ----------- -------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) .................. $ (2,132) $ 14,172 $ 110,030 $ 121,891
Net realized gain (loss) on investments
and foreign currency related transactions .. (40,793) 41,526 (893,632) (177,110)
Net change in unrealized appreciation
(depreciation) on investment transactions .. 269 58,586 14,270 (14,270)
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations .................. (42,656) 114,284 (769,332) (69,489)
----------- ----------- ----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
FROM:
Net investment income
Class A Shares ............................. -- -- (133,603) (95,628)
Class B Shares ............................. -- -- (11) --
Distributions in excess of net realized gains . -- -- -- --
----------- ----------- ----------- -----------
Total dividends and distributions to
shareholders ............................. -- -- (133,614) (95,628)
----------- ----------- ----------- -----------
FUND SHARE TRANSACTIONS (NOTE 6) .............. 222,287 756,356 (1,886,312) 3,911,674
----------- ----------- ----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS ....... 179,631 870,640 (2,789,258) 3,746,557
----------- ----------- ----------- -----------
NET ASSETS:
Beginning of period ........................... 890,640 20,000 3,766,557 20,000
----------- ----------- ----------- -----------
End of period ................................. $ 1,070,271 $ 890,640 $ 977,299 $ 3,766,557
=========== =========== =========== ===========
Undistributed net investment income at
end of period .............................. $ 10,942 $ 13,074 $ 2,780 $ 26,364
=========== =========== =========== ===========
</TABLE>
* The commencement of investment operations was October 22, 1997 for Growth Fund
and October 20, 1997 for Asian High Yield Fund.
See Notes to Financial Statements.
<PAGE> 17
ORBITEX GROUP OF FUNDS
FINANCIAL HIGHLIGHTS
STRATEGIC NATURAL RESOURCES FUND
Selected data based on a share outstanding throughout each period indicated
<TABLE>
<CAPTION>
CLASS A SHARES CLASS A SHARES CLASS B SHARES
FOR THE SIX MONTHS FOR THE PERIOD
ENDED FOR THE PERIOD ENDED
OCTOBER 31, 1998 ENDED OCTOBER 31, 1998 (a)
(UNAUDITED) (b) APRIL 30, 1998 (a) (UNAUDITED) (b)
--------------- ------------------ ---------------
<S> <C> <C> <C>
Net asset value, beginning of period ................. $ 16.54 $ 15.00 $ 12.22
--------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income ................................ (0.00) 0.38 (e) (0.02)
Net realized and unrealized gain (loss) on investments
and foreign currency related transactions ............ (3.88) 1.22 0.41
--------- --------- ---------
Total income (loss) from investment operations ....... (3.88) 1.60 0.39
--------- --------- ---------
Less distributions from net investment income ........ -- (0.03) --
Less distributions in excess of capital gains ........ -- (0.03) --
--------- --------- ---------
Total distributions from net investment income
and net capital gains ................................ -- (0.06) --
--------- --------- ---------
NET ASSET VALUE, END OF PERIOD ....................... $ 12.66 $ 16.54 $ 12.61
========= ========= =========
TOTAL RETURN (c) ..................................... (23.46)% 10.74% 3.44%
========= ========= =========
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ................. $ 3,621 $ 5,698 $ --
Ratio of net expenses to average net assets
(including interest expense) (d) ..................... 2.32% 2.40% 2.40%
Ratio of expenses to average net assets (including
interest expense and custodial credits) (d) .......... 2.37% 2.45% 2.46%
Ratio of total expenses to average net assets before
waivers, reimbursements and custodial credits(d) ..... 9.56% 9.27% 9.26%
Ratio of net investment income (loss) to average
net assets (d) ....................................... 2.34% 6.12% (e) (1.20)%
Portfolio turnover rate .............................. 396% 519% 396%
</TABLE>
(a) The commencement of investment operations was October 23, 1997 and
September 21, 1998 for Strategic Natural Resources Fund Class A Shares and
Class B Shares, respectively.
(b) Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the period since
the use of the undistributed method did not accord with the results of
operations.
(c) Total returns are historical and assume changes in share price,
reinvestment of dividends and capital gains distributions, and assume no
sales charge. Had the Advisor, Administrator and Custodian not absorbed a
portion of the expenses, total returns would have been lower. Total Returns
for periods less than one year are not annualized.
(d) Annualized for periods less than one year.
(e) Net investment income per share and the net investment income ratio would
have been lower without a certain investment strategy followed by the
Advisor during the current fiscal year.
See Notes to Financial Statements.
<PAGE> 18
ORBITEX GROUP OF FUNDS
FINANCIAL HIGHLIGHTS
INFO-TECH & COMMUNICATIONS FUND
Selected data based on a share outstanding throughout each period indicated
<TABLE>
<CAPTION>
CLASS A SHARES CLASS A SHARES CLASS B SHARES
FOR THE SIX MONTHS FOR THE PERIOD
ENDED FOR THE PERIOD ENDED
OCTOBER 31, 1998 ENDED OCTOBER 31, 1998 (a)
(UNAUDITED) APRIL 30, 1998 (a) (UNAUDITED)
----------- ------------------ -----------
<S> <C> <C> <C>
Net asset value, beginning of period ................. $ 19.62 $ 15.00 $ 18.23
---------- ---------- ----------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income ................................ (0.03) -- (0.01)
Net realized and unrealized gain (loss) on investments
and foreign currency related transactions ............ (0.10) 4.62 1.24
---------- ---------- ----------
Total income (loss) from investment operations ....... (0.13) 4.62 1.23
---------- ---------- ----------
Less distributions from net investment income ........ -- -- --
Less distributions in excess of capital gains ........ -- -- --
---------- ---------- ----------
Total distributions from net investment income
and net capital gains ................................ -- -- --
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD ....................... $ 19.49 $ 19.62 $ 19.46
========== ========== ==========
TOTAL RETURN (b) ..................................... (0.71)% 30.80% 6.69%
========== ========== ==========
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ................. $ 12,060 $ 2,440 $ 846
Ratio of net expenses to average net assets
(including interest expense) (c) ..................... 2.26% 2.40% 2.40%
Ratio of expenses to average net assets (including
interest expense and custodial credits) (c) .......... 2.28% 2.88% 2.01%
Ratio of total expenses to average net assets before
waivers, reimbursements and custodial credits (c) .... 5.67% 39.06% 4.19%
Ratio of net investment income (loss) to average
net assets (c) ....................................... (0.55)% (1.27)% (1.21)%
Portfolio turnover rate .............................. 219% 76% 219%
</TABLE>
(a) The commencement of investment operations was October 22, 1997 and
September 16, 1998 for Info-Tech & Communications Fund Class A Shares and
Class B Shares, respectively.
(b) Total returns are historical and assume changes in share price,
reinvestment of dividends and capital gains distributions, and assume no
sales charge. Had the Advisor, Administrator and Custodian not absorbed a
portion of the expenses, total returns would have been lower. Total Returns
for periods less than one year are not annualized.
(c) Annualized for periods less than one year.
See Notes to Financial Statements.
<PAGE> 19
ORBITEX GROUP OF FUNDS
FINANCIAL HIGHLIGHTS
GROWTH FUND
Selected data based on a share outstanding throughout each period indicated
<TABLE>
<CAPTION>
CLASS A SHARES CLASS A SHARES CLASS B SHARES
-------------- --------------- --------------
FOR THE SIX FOR THE PERIOD
MONTHS ENDED FOR THE PERIOD ENDED
OCTOBER 31, 1998 ENDED OCTOBER 31, 1998(a)
(UNAUDITED) APRIL 30, 1998(a) (UNAUDITED)
----------- ----------------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period ................. $ 17.93 $ 15.00 $ 16.46
--------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) ......................... (0.09) 0.26(d) (0.01)
Net realized and unrealized gain (loss) on investments
and foreign currency related transactions ............ (1.18) 2.67 0.21
--------- --------- ---------
Total income (loss) from investment operations ....... (1.27) 2.93 0.20
--------- --------- ---------
Less distributions from net investment income ........ -- -- --
Less distributions in excess of capital gains ........ -- -- --
--------- --------- ---------
Total distributions from net investment income
and net capital gains ................................ -- -- --
--------- --------- ---------
NET ASSET VALUE, END OF PERIOD ....................... $ 16.66 $ 17.93 $ 16.66
========= ========= =========
TOTAL RETURN (b) ..................................... (7.08)% 19.53% 1.15%
========= ========= =========
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ................. $ 1,055 $ 891 $ 16
Ratio of net expenses to average net assets
(including interest expense) (c) ..................... 1.70% 1.60% 2.00%
Ratio of expenses to average net assets (including
interest expense and custodial credits) (c) .......... 1.80% 2.11% 2.07%
Ratio of total expenses to average net assets before
waivers, reimbursements and custodial credits (c) .... 34.67% 50.13% 26.98%
Ratio of net investment income (loss) to average
net assets (c) ....................................... 1.71% 4.41% (d) (0.24)%
Portfolio turnover rate .............................. 458% 448% 458%
</TABLE>
(a) The commencement of investment operations was October 22, 1997 and
September 16, 1998 for Growth Fund Class A Shares and Class B Shares,
respectively.
(b) Total returns are historical and assume changes in share price,
reinvestment of dividends and capital gains distributions, and assume no
sales charge. Had the Advisor, Administrator and Custodian not absorbed a
portion of the expenses, total returns would have been lower. Total Returns
for periods less than one year are not annualized.
(c) Annualized for periods less than one year.
(d) Net investment income per share and the net investment income ratio would
have been lower without a certain investment strategy followed by the
Advisor during the current fiscal year.
See Notes to Financial Statements.
<PAGE> 20
ORBITEX GROUP OF FUNDS
FINANCIAL HIGHLIGHTS
ASIAN HIGH YIELD FUND
Selected data based on a share outstanding throughout each period indicated
<TABLE>
<CAPTION>
CLASS A SHARES CLASS A SHARES CLASS B SHARES
FOR THE SIX FOR THE PERIOD
MONTHS ENDED FOR THE PERIOD ENDED
OCTOBER 31, 1998 ENDED OCTOBER 31, 1998(a)
(UNAUDITED) APRIL 30, 1998(a) (UNAUDITED)
----------- ----------------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period ................. $ 10.93 $ 12.00 $ 8.22
--------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income ................................ 0.51 0.45 0.03
Net realized and unrealized gain (loss) on investments
and foreign currency related transactions ............ (2.90) (1.15) 0.02
--------- --------- ---------
Total income (loss) from investment operations ....... (2.39) (0.70) 0.05
--------- --------- ---------
Less distributions from net investment income ........ (0.57) (0.37) (0.31)
Less distributions in excess of capital gains ........ -- -- --
--------- --------- ---------
Total distributions from net investment income
and net capital gains ................................ (0.57) (0.37) (0.31)
--------- ========= ---------
NET ASSET VALUE, END OF PERIOD ....................... $ 7.97 $ 10.93 $ 7.96
========= ========= =========
TOTAL RETURN (b) ..................................... (22.38)% (5.71)% 0.59%
========= ========= =========
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ................. $ 977 $ 3,767 $ --
Ratio of net expenses to average net assets
(including interest expense) (c) ..................... 1.57% 0.14% 2.00%
Ratio of expenses to average net assets (including
interest expense and custodial credits) (c) .......... 1.64% 0.22% 2.20%
Ratio of total expenses to average net assets before
waivers, reimbursements and custodial credits (c) .... 13.02% 12.47% 25.35%
Ratio of net investment income to average
net assets (c) ....................................... 8.05% 8.65% 3.28%
Portfolio turnover rate .............................. 118% 173% 118%
</TABLE>
(a) The commencement of investment operations was October 20, 1997 and
September 21, 1998 for Asian High Yield Fund Class A Shares and Class B
Shares, respectively.
(b) Total returns are historical and assume changes in share price,
reinvestment of dividends and capital gains distributions, and assume no
sales charge. Had the Advisor, Administrator and Custodian not absorbed a
portion of the expenses, total returns would have been lower. Total Returns
for periods less than one year are not annualized.
(c) Annualized for periods less than one year.
See Notes to Financial Statements.
<PAGE> 21
ORBITEX GROUP OF FUNDS
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1998 (UNAUDITED)
1. ORGANIZATION
Orbitex Group of Funds (the "Trust") was incorporated in Delaware in December
1996 and is registered under the Investment Company Act of 1940 (the "1940
Act"), as amended, as an open-end management investment company. The Trust is
comprised of four funds (collectively the "Funds" and each individually a
"Fund") as follows: Strategic Natural Resources Fund, Info-Tech & Communications
Fund, Growth Fund and Asian High Yield Fund. Each Fund operates as a diversified
investment company, except Asian High Yield Fund, which operates as a
non-diversified investment company. The Funds offer both Class A and Class B
Shares. Class A Shares are offered at net asset value plus a maximum sales load
of 5.75%, except for Asian High Yield Fund, which is offered at net asset value
plus a maximum sales load of 4.75%. Class B Shares are offered subject to a
contingent deferred sales charge and will convert to Class A Shares when they
have been outstanding approximately eight years.
The Asian Select Advisors Fund was liquidated on August 31, 1998.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
SECURITY VALUATION AND TRANSLATIONS
Equity securities are valued at the last sale price on the exchange or in the
over-the-counter market in which such securities are primarily traded, as of the
close of business on the day the securities are being valued, or lacking any
sales, at the last available bid price. Long-term debt obligations are valued at
the mean of representative quoted bid and asked prices for such securities or,
if such prices are not available, at prices for securities of comparable
maturity, quality and type; however, when the Advisor or Sub-Advisor deems it
appropriate, prices obtained from an independent pricing service will be used.
Short-term debt investments with maturities less than 60 days are valued at
amortized cost or original cost plus accrued interest, each of which
approximates fair value.
Foreign securities are valued on the basis of market quotations from the primary
market in which they are traded, and are translated from the local currency into
U.S. dollars using current exchange rates.
Securities for which current market quotations are not readily available or for
which quotations are not deemed by Orbitex Management, Inc. (the "Advisor") to
be representative of market values are valued at fair value as determined in
good faith by or under the direction of the Trustees.
Investment security transactions are accounted for as of the trade date. Cost is
determined and gains and losses are based upon the specific identification
method for both financial statement and federal income tax purposes.
FOREIGN CURRENCY TRANSLATIONS
The accounting records of the Funds are maintained in U.S. dollars. Investment
securities and other assets and liabilities denominated in a foreign currency
and income receipts and expense payments are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions. Purchases
and sales of securities are translated into U.S. dollars at the contractual
currency rates established at the approximate time of the trade.
Net realized gains and losses on foreign currency transactions represent net
gains and losses from currency realized between the trade and settlement dates
on securities transactions and the difference between income accrued versus
income received. The effects of changes in foreign currency exchange rates on
investments in securities are included with the net realized and unrealized gain
or loss on investment securities.
<PAGE> 22
ORBITEX GROUP OF FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1998 (UNAUDITED)
INCOME TAXES
It is each Fund's policy to comply with all sections of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income and gains to its shareholders and therefore, no provision for
federal income tax has been made. Each Fund is treated as a separate taxpayer
for federal income tax purposes.
INVESTMENT INCOME
Corporate actions (including cash dividends) are recorded net of nonreclaimable
tax withholdings on the ex-dividend date, except for certain foreign securities
for which corporate actions are recorded as soon after ex-dividend date as such
information is available. Interest income is recorded on the accrual basis.
Market discount, original issue discount and premium are accreted and amortized
respectively, on a yield to maturity basis. The value of additional securities
received as interest or dividend payments is recorded as income and as the cost
basis of such securities.
EXPENSES
Expenses of the Trust, which are directly identifiable to a specific Fund, are
allocated to that Fund. Expenses, which are not readily identifiable to a
specific Fund, are allocated in such a manner as deemed equitable, taking into
consideration the nature and type of expense and the relative sizes of the
Funds. Each Fund's income, expenses (other than the fees mentioned above) and
realized and unrealized gains and losses are allocated proportionally each day
between the classes based upon the relative net assets of each class.
DISTRIBUTIONS TO SHAREHOLDERS
Income dividends will normally be declared and distributed quarterly for the
Asian High Yield Fund and annually for each of the other Funds. All Funds
declare and pay net realized capital gain distributions annually. The character
of income and gains to be distributed are determined in accordance with income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Funds, timing differences and
differing characterization of distributions made by each Fund as a whole.
DEFERRED ORGANIZATIONAL COSTS
Organizational expenses have been deferred and are being amortized over a period
of five years commencing with operations. The Advisor has agreed with respect to
each of the Funds that, if any of the initial shares of a Fund are redeemed
during such amortization period by the holder thereof, the redemption proceeds
will be reduced for any unamortized organization expenses in the same ratio as
the number of shares redeemed bears to the number of initial shares held at the
time of redemption.
REPURCHASE AGREEMENTS
Each Fund may enter into repurchase agreements. In a repurchase agreement, a
Fund buys a security and the seller simultaneously agrees to repurchase the
security on a specified future date at an agreed-upon price. The repurchase
price reflects an agreed-upon interest rate during the time the Fund's money is
invested in the security. Because the security constitutes collateral for the
repurchase obligation, a repurchase agreement can be considered a collateralized
loan. The Fund's risk is the ability of the seller to pay the agreed-upon price
on the maturity date. If the seller is unable to make a timely repurchase, the
Fund could experience delays in the receipt of expected proceeds, suffer a loss
in principal or current interest, or incur costs in liquidating the collateral.
The Trustees have established criteria to evaluate the creditworthiness of
parties with which the Funds may enter into repurchase agreements.
STRUCTURED NOTES
Each Fund may invest in structured notes, whose principal amount, redemption
terms or conversion terms are related to specific securities or other indices.
The prices of structured securities have historically been subject to high
volatility and their interest or dividend rates may at times be substantially
lower than prevailing market rates.
<PAGE> 23
ORBITEX GROUP OF FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1998 (UNAUDITED)
OTHER
There are certain additional risks involved when investing in foreign securities
that are not inherent in domestic securities. These risks may involve foreign
currency exchange rate fluctuations, adverse political and economic developments
and the imposition of unfavorable foreign governmental laws and restrictions.
There is significant potential for continuing economic and political turmoil in
the Pacific Basin and Southeast Asia, such turmoil could have a negative effect
on the share prices of the Funds; particularly the Asian High Yield Fund.
The Strategic Natural Resources Fund, Info-Tech & Communications Fund and Asian
High Yield Fund may focus their investments in certain industries, subjecting
them to greater risk than funds that are more diversified.
3. FEES AND COMPENSATION PAID TO AFFILIATES AND OTHER PARTIES
ADVISORY FEES
Each Fund has entered into an Investment Advisory Agreement with the Advisor. As
compensation for the services rendered, facilities furnished, and expenses borne
by the Advisor, the Funds will pay the Advisor a fee accrued daily and paid
monthly, at the annualized rate of 1.25% for the Strategic Natural Resources
Fund, 1.25% for the Info-Tech & Communications Fund, 0.75% for the Growth Fund
and 1.25% for the Asian High Yield Fund. The Advisory Agreement also provides
that the Advisor may retain Sub-Advisers at the Advisor's own cost and expense,
for the purpose of managing the investment of the assets of one or more Funds of
the Trust.
Through August 31, 1998, the Advisor had agreed to waive or limit its fees and
to pay certain operating expenses to the extent necessary to limit total fund
operating expenses net of waivers and custodial credits to an annualized rate of
2.40%, 2.40%, 1.60%, and 2.00% for Class A Shares of the Strategic Natural
Resources Fund, Info-Tech & Communications Fund, Growth Fund and Asian High
Yield Fund, respectively, subject to possible reimbursement by the Funds if such
reimbursement can be achieved within the foregoing expense limits. Effective
September 1, 1998, the Advisor has changed the expense limit on Class A Shares
of the Strategic Natural Resources Fund, Info-Tech & Communications Fund, and
Growth Fund, to 2.00 % annually of the Funds' relative average net assets.
The Advisor has agreed to waive or limit its fees and to pay certain operating
expenses to the extent necessary to limit total fund operating expenses net of
waivers and custodial credits to an annualized rate of 2.40%, 2.40%, 2.00%, and
2.00% for Class B Shares of the Strategic Natural Resources Fund, Info-Tech &
Communications Fund, Growth Fund and Asian High Yield Fund, respectively,
subject to possible reimbursement by the Funds if such reimbursement can be
achieved within the foregoing expense limits.
In addition, the Advisor has agreed to waive or limit its fees and to pay all
operating expenses, not including interest expense but including fee waivers and
custodial credits, of the Class A Shares of the Asian High Yield Fund for the
period from May 1, 1998 through June 15, 1998. This expense limit was changed to
an annualized rate of 1.00% for the period from June 16, 1998 through September
16, 1998. Effective September 17, 1998 this limit was changed to 2.00%.
The waivers for the Advisor's fee for the period ended October 31, 1998 amounted
to $24,467, $45,251, $3,350, and $8,421 for Strategic Natural Resources Fund,
Info-Tech & Communications Fund, Growth Fund and Asian High Yield Fund,
respectively. The reimbursements for the period ended October 31, 1998 amounted
to $97,422, $58,547, $124,852, and $129,360 for Strategic Natural Resources
Fund, Info-Tech & Communications Fund, Growth Fund and Asian High Yield Fund,
respectively.
<PAGE> 24
ORBITEX GROUP OF FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1998 (UNAUDITED)
SUB-ADVISORY FEES
For the period May 1, 1998 to May 31, 1998, the Asian High Yield Fund had a
Sub-Advisory relationship with J. P. Morgan Investment Management Inc. Pursuant
to a Sub-Advisory Agreement between the Sub-Advisor, the Advisor and the Trust,
the Sub-Advisor was responsible for the selection and management of portfolio
investments for the Fund, in accordance with the Fund's investment objective and
policies and under the supervision of the Advisor.
The Sub-Advisor received a sub-advisory fee, paid by the Advisor of: 0.50% on
the first $50 million average daily net assets of the Fund; 0.45% on the next
$50 million average daily net assets of the Fund; and 0.40% on the average daily
net assets over $100 million of the Fund.
Effective May 31, 1998, J. P. Morgan Investment Management Inc. resigned as the
Sub-Advisor for the Fund. The Fund is currently being managed by the Advisor.
ADMINISTRATION FEES
State Street Bank and Trust Company ("State Street") serves as the Administrator
of the Trust. For providing administrative services to the Funds, State Street
will receive from each Fund, a monthly fee at an annual rate of 0.10% of the
first $100 million of each Fund's average daily net assets, plus 0.08% of the
next $100 million of each Fund's average daily net assets, plus 0.06% of each
Fund's average daily net assets in excess of $200 million, subject to certain
minimum requirements. State Street agreed to waive certain fees for the period
ended October 31, 1998, which amounted to $18,386, $18,128, $18,129 and $17,947
for Strategic Natural Resources Fund, Info-Tech & Communications Fund, Growth
Fund and Asian High Yield Fund, respectively.
CUSTODIAN FEES
State Street also serves as the Trust's custodian, including holding all
portfolio securities and cash assets of the Trust and providing accounting
services which includes daily valuation of the shares of each Fund. For its
services State Street receives an annual custody and accounting fee which is
paid monthly.
DISTRIBUTOR
Funds Distributor, Inc. (the "Distributor") serves as the distributor of the
shares of each Fund pursuant to a Distribution Plan and Agreement, pursuant to
Rule 12b-1 under the 1940 Act, between the Distributor and the Trust. The Rule
12b-1 Plan and Agreement for Class A Shares provides for payment of a fee to the
Distributor at an annualized rate of 0.30% of the average daily net assets of
the Class A Shares of the Asian High Yield Fund and 0.40% of the average daily
net assets of the Class A Shares of the other Funds. The Rule 12b-1 Plan and
Agreement for Class B Shares provides for payment of a fee to the Distributor at
an annualized rate of 1.00% of the average daily net assets of the Class B
Shares of each Fund.
TRUSTEES FEES
The Funds pay no compensation to their Trustees who are employees of the Advisor
or Sub-Advisors. Trustees who are not Advisor or Sub-Advisor employees receive
an annual fee of $5,000.
<PAGE> 25
ORBITEX GROUP OF FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1998 (UNAUDITED)
4. AGGREGATE UNREALIZED APPRECIATION AND DEPRECIATION
The identified cost of investments in securities owned by each Fund for both
financial statement and federal income tax purposes, and their respective gross
unrealized appreciation and depreciation at October 31, 1998, were as follows:
<TABLE>
<CAPTION>
GROSS GROSS NET UNREALIZED
IDENTIFIED UNREALIZED UNREALIZED APPRECIATION
COST APPRECIATION DEPRECIATION (DEPRECIATION)
---- ------------ ------------ --------------
<S> <C> <C> <C> <C>
Strategic Natural Resources Fund....... $ 3,912,272 $ 93,428 $ 201,234 $ (107,806)
Info-Tech & Communications Fund........ 11,708,410 1,141,775 685,587 456,188
Growth Fund............................ 886,119 63,004 4,148 58,855
Asian High Yield Fund.................. 903,000 - - -
</TABLE>
5. INVESTMENT TRANSACTIONS
The cost of purchases and the proceeds from sales of investments, other than
U.S. Government obligations and short-term securities, for the period ended
October 31, 1998, were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
--------- -----
<S> <C> <C>
Strategic Natural Resources Fund....... $ 13,861,434 $ 14,640,738
Info-Tech & Communications Fund........ 19,002,988 11,846,926
Growth Fund............................ 3,452,883 3,372,833
Asian High Yield Fund.................. 1,383,092 4,452,581
</TABLE>
Purchases and sales of U.S. Government obligations aggregated $1,159,297 and
$1,272,031, respectively, for the Asian High Yield Fund.
6. SHAREHOLDER'S TRANSACTIONS
Following is a summary of shareholder transactions for each Fund:
<TABLE>
<CAPTION>
Six Months Ended
October 31, 1998 Year Ended
(unaudited) April 30, 1998*
Shares Dollars Shares Dollars
------ ------- ------ -------
<S> <C> <C> <C> <C>
Strategic Natural Resources
Class A Shares
Shares sold................................. 74,864 $ 1,061,126 709,678 $10,833,321
Shares issued to shareholders in
reinvestment.............................. - - 713 12,051
Shares redeemeed........................... (133,182) (2,077,755) (367,260) (5,380,919)
--------- ------------ --------- ------------
Net increase (decrease)..................... (58,318) $(1,016,631) 343,131 $ 5,464,453
========= ============ ========= ============
</TABLE>
<PAGE> 26
ORBITEX GROUP OF FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
For the Period
September 21, 1998
to October 31, 1998
(unaudited)
Shares Dollars
------ -------
<S> <C> <C>
Strategic Natural Resources
Class B Shares
Shares sold............................. 25 $300
Shares issued to shareholders in
reinvestment.......................... - -
Shares redeemeed........................ - -
--- ----
Net increase......................... 25 $300
=== ====
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
October 31, 1998 Year Ended
(unaudited) April 30, 1998*
Shares Dollars Shares Dollars
------ ------- ------ -------
<S> <C> <C> <C> <C>
Info-Tech and Communications
Class A Shares
Shares sold............................ 618,931 $11,321,737 124,204 $2,171,752
Shares issued to shareholders in
reinvestment......................... - - - -
Shares redeemeed....................... (124,520) (1,709,182) (1,148) (22,019)
--------- ----------- ------- -----------
Net increase........................ 494,411 9,612,555 123,056 $2,149,733
======== =========== ======= ===========
</TABLE>
<TABLE>
<CAPTION>
For the Period
September 16, 1998
to October 31, 1998
(unaudited)
Shares Dollars
------ -------
<S> <C> <C>
Info-Tech and Communications
Class B Shares
Shares sold .................... 43,709 $ 771,682
Shares issued to shareholders in
reinvestment ................. -- --
Shares redeemeed ............... (267) (4,285)
--------- ---------
Net increase ................ 43,441 $ 767,397
========= =========
</TABLE>
<PAGE> 27
ORBITEX GROUP OF FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
October 31, 1998 Year Ended
(unaudited) April 30, 1998*
Shares Dollars Shares Dollars
------ ------- ------ -------
<S> <C> <C> <C> <C>
Growth
Class A Shares
Shares sold .................... 29,624 $ 477,802 48,341 $ 756,356
Shares issued to shareholders in
reinvestment ................. -- -- -- --
Shares redeemeed ............... (15,986) (270,815) -- --
--------- --------- --------- ---------
Net increase ................ 13,638 $ 206,987 48,341 $ 756,356
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
For the Period
September 16, 1998
October 31, 1998
(unaudited)
Shares Dollars
------ -------
<S> <C> <C>
Growth
Class B Shares
Shares sold .................... 937 $15,300
Shares issued to shareholders in
reinvestment ................. -- --
Shares redeemeed ............... -- --
------- -------
Net increase ................ 937 $15,300
======= =======
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
October 31, 1998 Year Ended
(unaudited) April 30, 1998*
Shares Dollars Shares Dollars
------ ------- ------ -------
<S> <C> <C> <C> <C>
Asian High Yield
Class A Shares
Shares sold .................... 12,879 $ 128,772 528,380 $ 5,998,122
Shares issued to shareholders in
reinvestment ................. 10,566 98,148 2,010 21,381
Shares redeemeed ............... (245,560) (2,113,540) (187,417) (2,107,829)
----------- ----------- ----------- -----------
Net increase (decrease) ..... (222,115) $(1,886,620) 342,973 $ 3,911,674
=========== =========== =========== ===========
</TABLE>
<PAGE> 28
ORBITEX GROUP OF FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
For the Period
September 16, 1998
October 31, 1998
(unaudited)
Shares Dollars
------ -------
<S> <C> <C>
Asian High Yield
Class B Shares
Shares sold .................... 37 $308
Shares issued to shareholders in
reinvestment ................. -- --
Shares redeemeed ............... -- --
---- ----
Net increase ................ 37 $308
==== ====
</TABLE>
* The commencement of investment operations was October 23, 1997 for Strategic
Natural Resources Fund, October 22, 1997 for Info-Tech & Communications Fund,
October 22, 1997 for Growth Fund and October 20, 1997 for Asian High Yield
Fund.
7. FORWARD CURRENCY CONTRACTS
At October 31, 1998, The Strategic Natural Resources Fund had outstanding
forward currency contracts, which contractually obligate the Fund to deliver
currency at a specified date, as follows:
<TABLE>
<CAPTION>
U.S. Cost October 31, 1998 Unrealized
on Origination U.S. $ Appreciation
Foreign Currency Purchase Contracts Date Value (Depreciation)
- ----------------------------------- ---- ----- --------------
<S> <C> <C> <C>
AUD, expiring 11/4/98, (1 contract) $ 15,438 $ 15,637 $ 199
CAD, expiring 11/5/98-11/12/98, (2 contracts) 454,464 453,659 (805)
--------
$ (606)
<CAPTION>
U.S. Cost October 31, 1998 Unrealized
on Origination U.S. $ Appreciation
Foreign Currency Sale Contracts Date Value (Depreciation)
- ------------------------------- ---- ----- --------------
<S> <C> <C> <C>
AUD, expiring 11/4/98, (1 contract) $ 15,738 $ 15,637 $ 101
CAD, expiring 11/5/98-11/12/98, (4 contracts) 452,002 453,657 (1,655)
--------
(1,554)
Net Unrealized Depreciation $(2,160)
========
</TABLE>
8. BENEFICIAL INTEREST
The following schedule shows the number of shareholders each owning 5% or more
of a Fund and the total percentage of the Fund held by such shareholders:
<TABLE>
<CAPTION>
5% OR GREATER SHAREHOLDERS
NUMBER OF SHAREHOLDERS % OF FUND HELD
CLASS A CLASS B CLASS A CLASS B
------- ------- ------- -------
<S> <C> <C> <C> <C>
Strategic Natural Resources Fund....... 1 1 24% 100%
Info-Tech & Communications Fund........ 1 5 17% 53%
Growth Fund............................ 5 1 73% 98%
Asian High Yield Fund.................. 5 3 34% 100%
</TABLE>
There were no of affiliated shareholders as of October 31, 1998.
<PAGE> 29
ORBITEX GROUP OF FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 1998 (UNAUDITED)
9. CAPITAL LOSS CARRYFORWARD
At April 30, 1998, the Info-Tech Communications Fund had available for federal
income tax purposes unused capital losses of $30,284, expiring in the Year 2006.
Under current tax law, capital losses realized after October 31, may be deferred
and treated as occurring on the first day of the following fiscal year. For the
fiscal year ended April 30, 1998, the following Funds have elected to defer
losses occurring between November 1, 1997 and April 30, 1998 under these rules,
as follows:
<TABLE>
<CAPTION>
CAPITAL CURRENCY
LOSSES LOSSES
NAME OF FUND DEFERRED DEFERRED
------------ -------- --------
<S> <C> <C>
Strategic Natural Resources Fund........... $269,461 $706
Asian High Yield Fund...................... 177,282 -
Asian Select Advisors Fund................. 1,212 -
</TABLE>
Such deferred losses will be treated as arising on the first day of the fiscal
year ending April 30, 1999.
10. INITIAL CAPITALIZATION AND OFFERING OF SHARES
During the period from May 29, 1997 to the commencement of investment operations
for each of the Funds, each Fund had no operations other than those related to
organizational matters, including the initial capital contribution of $20,000
for each Fund and the issuance of 1,333 shares for each of the Funds, with the
exception of the Asian High Yield Fund which issued 1,667 shares. There were no
additional transactions until commencement of investment operations for each of
the Funds.
11. LINE OF CREDIT
The Trust participated in a $10 million line of credit provided by Deutsche Bank
AG, New York Branch (the "Bank") under a Credit Agreement (the "Agreement")
dated February 17, 1998 . Under the Agreement, each Fund as a separate and
distinct borrower may borrow up to a designated base commitment allocation
specified in the Agreement, plus its pro rata portion of any unused commitment
allocation of the other borrowers under the agreement. Interest is payable in
respect to the unpaid principal amount depending on the type of loan designated
by the borrower. The Funds are charged an annualized commitment fee computed at
a rate equal to 0.10 of 1% on a annual basis of the daily average unutilized
credit balance. The Agreement requires, among other provisions, that the
aggregate outstanding principal amount of the loans made to each borrower under
the Agreement shall not exceed the lesser of (i) 33 1/3% of the value of the
total assets of the borrower less all liabilities and indebtedness not
represented by senior securities; and (ii) any borrower limitations described
for such borrowers in the Trust's prospectus.
During the six months ended October 31, 1998, only the Asian High Yield Fund had
borrowings under the Agreement. The Asian High Yield Fund entered into a NIBOR
based loan agreement on April 16, 1998 in the amount of $750,000, with an
interest rate of 6.15625% (NIBOR rate plus 50 basis points). The expiration date
of the loan was May 15, 1998. Effective July 24, 1998, the Trust terminated the
Agreement with the Bank.
12. SUBSEQUENT EVENTS
The Trustees have approved by unanimous vote, the liquidation of the Asian High
Yield Fund effective November 30, 1998.
<PAGE> 30
ORBITEX GROUP OF FUNDS
410 PARK AVENUE
NEW YORK, NY 10022
- --------------------------------------------------------------------------------
TRUSTEES AND OFFICERS
James L. Nelson Trustee, President
Ronald Altbach Trustee
Thomas T. Bachmann Trustee
Otto J. Felber Trustee
Stephen J. Hamrick Trustee
Kimberly Ratz Treasurer
Fyzul Khan Secretary
INVESTMENT ADVISOR
Orbitex Management, Inc.
410 Park Avenue
New York, NY 10022
ADMINISTRATOR AND CUSTODIAN
State Street Bank and Trust Company
150 Newport Avenue
North Quincy, MA 02171
TRANSFER AND DIVIDEND DISBURSING AGENT
Boston Financial Data Services, Inc.
2 Heritage Drive
North Quincy, MA 02171
Telephone: 1-888-672-4839
DISTRIBUTOR
Funds Distributor, Inc.
60 State Street
Boston, MA 02109
INDEPENDENT ACCOUNTANTS
PriceWaterhouseCoopers LLP
160 Federal Street
Boston, MA 02110
LEGAL COUNSEL
Rogers & Wells
200 Park Avenue
New York, NY 10166
