<PAGE> 1
ORBITEX(R)
GROUP OF FUNDS
ANNUAL REPORT
APRIL 30, 1998
[GRAPHIC OF PLANET]
ORBITEX STRATEGIC
NATURAL RESOURCES FUND
ORBITEX INFO-TECH AND
COMMUNICATIONS FUND
ORBITEX GROWTH FUND
ORBITEX ASIAN
HIGH YIELD FUND
ORBITEX ASIAN SELECT
ADVISORS FUND
<PAGE> 2
ORBITEX GROUP OF FUNDS
STRATEGIC NATURAL RESOURCES FUND
MANAGED BY ORBITEX MANAGEMENT, INC.
PERFORMANCE REVIEW: Orbitex Strategic Natural Resources Fund significantly
outperformed the Lipper Natural Resources Fund Category during the period from
October 23, 1997 (commencement of operations) to April 30, 1998. The total
return for the Fund was 10.74% versus (3.80)%(a) for the Lipper Natural
Resources Fund Category and 22.49%(a) for the S&P 500 Index. 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.
This has been a challenging period for most natural resource sectors. The
combination of a strong El Nino, the second warmest winter ever, turmoil in
emerging markets and other Asian countries and increased OPEC production in
November 1997 have prompted a sharp drop off in crude oil prices and other
resources (e.g., gold, aluminum, copper). Crude oil prices have reached the
lowest levels since 1988. OPEC will meet on June 24, 1998 to discuss production
cuts. Some oil projects may have to shut down, because it is not economical to
produce at the low oil prices. Weather experts recently announced that La Nina
is here which could bring us cold winters, hot summers and a pick-up in
hurricane activity. This along with production cuts from the OPEC countries
should stabilize prices and we expect to see a better environment by fourth
quarter 1998.
On the positive side, natural gas, paper/forest products and select chemical
companies have been strong performers. Some of these sectors are beneficiaries
of the lower oil prices. Natural gas prices have remained firm throughout the
period, as that market is looking for a return to more normal weather during the
summer and into next winter. Also, natural gas pipelines are full to capacity
and the strategic United States Reserve Base is declining.
Throughout the period, the Fund benefited from its above average emphasis on
large capitalization, defensive, value-oriented securities within the natural
resource sectors. Noteworthy company performance spanned a diverse group of
sectors. The Fund benefited from its positions in Exxon, Western Atlas, Smith
International, Cytec Industries and Phelps Dodge. Despite the strong
fundamentals in the natural gas industry, Coho Energy, Forcenergy and Seagull
Energy were weak performers.
OUTLOOK: Our bias toward large capitalization equities continues as the markets
struggle with the near term concerns of emerging markets and lower oil prices.
However, we see an improved environment toward the end of 1998 as supply/demand
excesses should come into balance with anticipated OPEC and non-OPEC production
cuts. In fact, many natural resource sectors and stocks have rarely, if ever,
sold at such low valuations. We are extremely positive on the longer term
outlook for the natural resources markets.
We appreciate your investment in Orbitex Strategic Natural Resources Fund.
<PAGE> 3
The following graph shows a comparison of a hypothetical investment of $10,000
in Strategic Natural Resources Fund (assumes reinvestment of all dividends and
distributions and a one time sales charge) versus the Lipper Natural Resources
Fund Category and the S&P 500 Index.
<TABLE>
<CAPTION>
PERIOD ENDED
APRIL 30, 1998(a)
-----------------
<S> <C>
Strategic Natural Resources Fund (inc. max. 5.75% sales charge)....... $10,434
Lipper Natural Resources Fund Category................................ $ 9,620
S&P 500 Index......................................................... $12,249
</TABLE>
CUMULATIVE TOTAL RETURN* SUMMARY
<TABLE>
<CAPTION>
PERIOD ENDED
APRIL 30, 1998(a)
-----------------
<S> <C>
Strategic Natural Resources Fund...................................... 10.74%
Strategic Natural Resources Fund (Incl. max. 5.75% sales charge....... 4.34%
Lipper Natural Resources Fund Category**.............................. (3.80)%
S&P 500 Index......................................................... 22.49%
- ----------------
</TABLE>
(a) Commencement date of operations for Strategic Natural Resources Fund is
October 23, 1997. Performance for the benchmark is not available from
commencement date of operations through April 30, 1998. For that reason,
performance for the benchmark is shown from November 1, 1997 through April 30,
1998.
* Total return is calculated assuming reinvestment of all dividends. Total
returns would have been lower had the Advisor (Orbitex Management, Inc.) and the
Administrator and Custodian (State Street Bank and Trust Company) not waived or
reimbursed a portion of their fees. Results represent past performance and do
not indicate future results. The value of an investment in the Fund and the
return on investment both will fluctuate and redemption proceeds may be higher
or lower than an investor's original cost.
** The Lipper Natural Resources Fund Category and the S&P 500 Index are
unmanaged indexes whereas the Fund is actively managed. The performance of these
indexes does not reflect any applicable sales charges or other expenses
associated with investment in the Fund; direct investment in these indexes is
not possible. Index performance is not intended to represent the future
performance of Strategic Natural Resources Fund.
<PAGE> 4
ORBITEX GROUP OF FUNDS
INFO-TECH & COMMUNICATIONS FUND
MANAGED BY ORBITEX MANAGEMENT, INC.
PERFORMANCE REVIEW: During the period from October 22, 1997 (commencement of
operations) to April 30, 1998, Info-Tech & Communications Fund had a total
return of 30.80%, compared with a total return of 22.49%(a) for the S&P 500
Index and 16.09%(a) for the Lipper Science & Technology Index. The Fund seeks to
achieve superior long-term capital growth through selective investment in
companies engaged in the communication, information and related technology
industries.
Towards the end of 1997, the Fund was conservatively positioned in holdings such
as the regional Bell operating companies, AT&T and Sprint. With a more positive
outlook toward the market emerging at the beginning of January, the Fund was
repositioned into more aggressive technology investments. Specifically, the Fund
was focused on the deployment and operation of new communications networks
around the world. With the rapid privatization of public communications services
companies around the world and the rapid consumer and business adoption of the
internet, this area, we believed, would be the most timely area into which to
focus the Fund's assets. In turn, we chose to avoid most of the traditional
personal computer hardware and software related companies, which proved to be
particularly fortuitous for the Fund.
Some of the top performing names for the Fund during this period included Nokia,
which increased over 75% from the beginning of the year. We bought Nokia because
of its attractive valuation relative to its growth prospects and its market
domination in cellular handsets over its primary competitors, Motorola and
Ericcson. Nokia continues to be a top holding in the Fund. Lucent, which has
nearly doubled in price since January, was another significant contributor to
the Fund's performance. The market recognized both its strong and predictable
earnings stream as well as its emerging market dominance as the leading supplier
of carrier-class communications equipment. On the services front, WorldCom, with
its pending merger with MCI, stands in our view to emerge as the world's
foremost telecommunications services provider with a single bundled customer
offering of long distance, local, internet and data services. We continue to
believe that following the merger, WorldCom will have tremendous long term
potential. It remains a core holding of the Fund. Lastly, in search of new ideas
to capitalize on the outlook for the internet, the Fund established a position
in OzEmail, the leading internet services provider and search engine in
Australia and New Zealand. Viewed as extremely inexpensive relative to its
U.S.-based peer group, the stock has effectively doubled since February of this
year. However, we continue to see considerable upside in this largely
under-followed stock, and it constitutes one of the Fund's largest holdings.
Weak performing sectors for the Fund were semi-conductors and our Latin American
holdings. Both Telebras, the phone company of Brazil, and CANTV, the phone
company of Venezuela, proved mildly disappointing during the period. Venezuela
was impacted by falling oil prices, and Telebras's proposed break-up was marred
when the government of Brazil suddenly determined that the break-up would be
treated as a taxable event. Neither position is currently held by the Fund,
given the overall weakness in emerging market currencies as a result of the
current Asia crisis. The Fund's semiconductor holdings including, Texas
Instruments and Maxim, have been flat to slightly down since being added to the
Fund in early February. However, since these firms operate in specialized
industries, and are not significantly impacted by the memory sector of the
semiconductor industry, we view their long term prospects as favorable. The Fund
maintained a relatively defensive posture, having 29% of its net assets in cash
equivalents as of the end of the reporting period.
OUTLOOK: We believe that many sectors within the technology arena will prove to
be under pressure in the year ahead. Clearly, there is decline in both corporate
and consumer computer hardware demand driven by the lack of adequate networks to
utilize the power of their respective technologies. Hence, we will continue to
focus our investments this year on companies across the globe that are either
providing solutions to the network bottleneck or emerging communications service
companies seeking to deploy network solutions to the corporate and consumer
market place. Many of these companies have high growth prospects and valuations,
and accordingly, are highly priced relative to the market indexes. However, we
utilize a variety of valuation techniques to derive target prices for the
securities in the Fund relative to current market benchmarks. By maintaining
this discipline, we believe we can effectively manage the risk in these often
volatile securities relative to the broad market indexes.
We appreciate your investment in Orbitex Info-Tech & Communications Fund.
<PAGE> 5
The following graph shows a comparison of a hypothetical investment of $10,000
in Info-Tech & Communications Fund (assumes reinvestment of all dividends and
distributions and a one time sales charge) versus the Lipper Science &
Technology Index and the S&P 500 Index.
PERIOD ENDED
APRIL 30, 1998(a)
------------------
Info-Tech & Communications Fund
(incl. max. 5.75% sales charge) $12,324
Lipper Science & Technology Index** $11,609
S&P 500 Index** $12,249
CUMULATIVE TOTAL RETURN* SUMMARY
PERIOD ENDED
APRIL 30, 1998(a)
-----------------
Info-Tech & Communications Fund 30.80%
Info-Tech & Communications Fund
(incl. max. 5.75% sales charge) 23.24%
Lipper Science & Technology Index** 16.09%
S&P 500 Index** 22.49%
- ------------
(a) Commencement date of operations for Info-Tech & Communications Fund is
October 22, 1997. Performance for the benchmark is not available from
commencement date of operations through April 30, 1998. For that reason,
performance for the benchmark is shown from November 1, 1997 through April 30,
1998.
* Total return is calculated assuming reinvestment of all dividends. Total
returns would have been lower had the Advisor (Orbitex Management, Inc.) and
Administrator and Custodian (State Street Bank and Trust Company) not waived or
reimbursed a portion of their fees. Results represent past performance and do
not indicate future results. The value of an investment in the Fund and the
return on investment both will fluctuate and redemption proceeds may be higher
or lower than on investor's original cost.
** The Lipper Science & Technology Index and the S&P 500 Index are unmanaged
indexes whereas the Fund is actively managed. The performance of these indexes
does not reflect any applicable sales charges or other expenses associated with
investment in the Fund; direct investment in these indexes is not possible.
Index performance is not intended to represent the future performance of
Info-Tech & Communications Fund.
<PAGE> 6
ORBITEX GROUP OF FUNDS
GROWTH FUND
MANAGED BY ORBITEX MANAGEMENT, INC.
PERFORMANCE REVIEW: From the commencement of operations of the Fund, October 22,
1997 to April 30, 1998, Orbitex Growth Fund had a return of 19.53%, versus
22.49%(a) for the S&P 500 Index. The objective of the Fund is long-term growth
of capital. The Fund seeks to achieve its objective through investment in
securities believed by Orbitex Management, Inc. to have significant appreciation
potential.
Over the same period of time, the S&P Midcap 400 Index returned 11.05% and the
small capitalization Russell 2000 Index returned only 5.38%. Throughout the
period, the Fund invested in both growth and value oriented stocks, with large,
middle and smaller capitalizations, which probably contributed to the lagging
performance relative to the large-cap, growth-oriented S&P 500 Index. At around
the mid-point of the measurement period, the Fund changed principal managers,
and this contributed to an unusually heavy turnover in shares held by the Fund.
This was done not for reasons of differing style, but for reasons of differing
preferences in terms of industry exposures. The effects of our portfolio
realignment is very difficult to measure, but we believe it had a material
negative impact upon performance.
Despite the dreadful economic collapse in emerging Asia and Japan during the
period, which added significantly to market volatility, domestically both
liquidity and economic growth remained very strong. The pressure upon prices of
commodities of all kinds kept inflation under check, and Gross Domestic Product
and the U.S. savings rates appear to have accelerated concurrently in the first
part of 1998. The capital markets have reflected this prosperity.
The Fund benefited from excellent performances in stocks among many diverse
industry groupings. Financial service companies, such as H.F. Ahmanson, Comerica
and Fleet Financial turned in healthy gains. In the high technology sectors,
companies such as HTE, Inc., Visual Networks and Symbol Technologies performed
very well.
We had notably poor performances in companies such as Medpartners, Cellegy
Pharmaceuticals and Check Point Software (modest gains were realized on partial
sales of Cellegy and Check Point, which are still held).
PORTFOLIO COMPOSITION: The Fund's sector and stock weightings are a result of
bottom-up stock picking across all capitalizations, on the basis of capital
gains potential versus risk. As a result, performance is unlikely to mimic any
one broad index. At this writing, the Fund has taken on a fairly conservative
tilt, given what we believe to be very high valuations achieved in the market by
a number of companies that would otherwise be excellent candidates for the
portfolio. Examples include consumer packaged goods companies, many large
pharmaceutical companies, and many technology companies. In their stead, the
Fund maintains a material but temporary cash position, and a higher weighting
than would be typical in the utility industries.
OUTLOOK: The capital markets are expected to remain in relatively healthy
condition in the near-term, due to very strong growth in the money supply, muted
inflation and the strong U.S. Dollar. We do anticipate an increase in
uncertainty relative to earnings prospects, however, and look for increasing
volatility in stock prices. If we are correct in this assessment, opportunities
to reestablish holdings in attractive sectors (such as those mentioned above) at
prudent prices will emerge before long and the Fund has reserves with which to
act on short order. In the contrary case, in which excessively high-valued
stocks continue upward, the Fund will most likely increase investments in more
value-oriented, lower volatility stocks.
We appreciate your investment in Orbitex Growth Fund.
<PAGE> 7
The following chart shows a comparison of a hypothetical investment of $10,000
in Growth Fund (assumes reinvestment of all dividends and distributions and a
one time sales charge) versus the S&P 500 Index.
<TABLE>
<CAPTION>
PERIOD ENDED
APRIL 30, 1998(a)
-----------------
<S> <C>
Growth Fund (incl. max. 5.75% sales charge) $11,266
S&P 500 Index $12,249
</TABLE>
CUMULATIVE TOTAL RETURN* SUMMARY
<TABLE>
<CAPTION>
PERIOD ENDED
APRIL 30, 1998(a)
-----------------
<S> <C>
Growth Fund 19.53%
Growth Fund (incl. max. 5.75% sales charge) 12.66%
S&P 500 Index** 22.49%
</TABLE>
- ------------------
(a) Commencement date of operations for Growth Fund is October 22, 1997.
Performance for the benchmark is not available from commencement date of
operations through April 30, 1998. For that reason, performance for the
benchmark is shown from November 1, 1997 through April 30, 1998.
* Total return is calculated assuming reinvestment of all dividends. Total
returns would have been lower had the Advisor (Orbitex Management, Inc.) and
Administrator and Custodian (State Street Bank and Trust Company) not waived or
reimbursed a portion of their fees. Results represent past performance and do
not indicate future results. The value of an investment in the Fund and the
return on investment both will fluctuate and redemption proceeds may be higher
or lower than an investor's original cost.
** The S&P Index is an unmanaged index whereas the Fund is actively managed.
The performance of the index does not reflect any applicable sales charges or
other expenses associated with investment in the Fund; direct investment in the
index is not possible. Index performance is not intended to represent the future
performance of Growth Fund.
<PAGE> 8
ORBITEX GROUP OF FUNDS
ASIAN HIGH YIELD FUND
MANAGED BY J.P. MORGAN INVESTMENT MANAGEMENT, INC.
PERFORMANCE REVIEW: From the commencement of operations of the Fund, October 20,
1997 to April 30, 1998, Orbitex Asian High Yield Fund had a return of (5.71)%,
versus 11.57%(a) for the Lipper Emerging Market Debt Funds Category. The
objective of the Fund is high current income. The Fund seeks to achieve this
objective by investing in primarily in lower rates and unrated debt securities
of companies, financial institutions and governments based in Asia. Capital
appreciation is a secondary objective.
MARKET OVERVIEW: The Asian High Yield Fund was launched into the worst market
that Asian fixed income assets have seen in years. Several countries, including
Thailand, the Philippines, Malaysia, Taiwan, and Korea devalued their
currencies, resulting in a significant deterioration in prices for Asian bonds
and stocks. In addition, virtually a complete evaporation of liquidity in the
region forced some of the countries (Korea, Thailand, and Indonesia) to seek
International Monetary Fund (IMF) balance of payments assistance.
The Asian debt market fell to a low in January 1998 as currencies tumbled.
However, the debt market recovered somewhat as individual governments took steps
to avoid a sovereign default. By the end of the first quarter of 1998, the Asian
market was dominated by two main themes. The first was positive, the improvement
of the liquidity crisis in Asia (except Indonesia). As a result, a fall in Asian
currencies quickly converted trade deficits into surpluses for the affected
countries. This provided the region with billions of dollars a month of inflows
which eased long term funding pressures. The return of liquidity induced rallies
in both Asian equity investments and the emerging market debt which had fallen
for fear of the crisis expanding. The second theme of lower commodity prices was
negative as the Asian economic contraction had far exceeded expectations. This
contraction led to falls in a wide range of commodity prices which faced
increased Asian supply and/or reduced Asian demand. While improved liquidity
tightened emerging market spreads across the board, falling commodity prices
constrained the rally in several markets.
FUND OVERVIEW: The Asian High Yield Fund began operations on October 20, 1997
and invested in a number of Asian countries, as well as some non-Asian
countries. Concentrations were established in Indonesia and Thailand where
attractive corporate securities could be found. As the fourth quarter of 1997
unfolded, investments in Korea became particularly compelling and some of the
corporate holdings in Indonesia were reduced to purchase sovereign securities in
Korea. At December 31, 1997, the Fund had an investment allocation of 29% in
Korea, 17% in the Philippines, and 13% in Indonesia.
For the fourth quarter of 1997, the Fund had a negative return of (10.9)%. This
performance was significantly worse than the Salomon Smith Barney High Yield
Market Index which returned 2.38% and the Salomon Smith Barney Broad Investment
Grade Index which returned 2.95%. However, this was much better than Asian
equities which had a negative return of (30.7)% over the same period.
The Fund returned 3.52% for the first quarter 1998. At the beginning of the
quarter, the portfolio was invested in 7 countries. When spreads in Asia began
to look tight relative to similarly rated Latin American bonds, country
allocation was expanded to 13 countries during the quarter to include Malaysia,
Hong Kong, and Japan, as well as a number of Latin American or European
countries. The Fund's holdings in Indonesia were significantly cut back, as
Indonesia's threat to implement a currency board met with widespread
disapproval, including disapproval from the U.S. and IMF. The Fund, which was
most heavily invested in Korea in terms of individual exposure, was well
positioned for the spread tightening which took place over the quarter. Country
allocation in Thailand was also increased slightly but was limited somewhat by
the lack of supply.
We appreciate your investment in Orbitex Asian High Yield Fund.
<PAGE> 9
The following chart shows a comparison of a hypothetical investment of $10,000
in Asian High Yield Fund (assumes reinvestment of all dividends and
distributions and a one time sales charge) versus the Lipper Emerging Market
Debt Funds Category.
<TABLE>
<CAPTION>
PERIOD ENDED
APRIL 30, 1998(a)
-----------------
<S> <C>
Asian High Yield Fund (incl. max. 4.75% sales charge) $ 8,981
Lipper Emerging Market Debt Funds Category $11,157
</TABLE>
CUMULATIVE TOTAL RETURN* SUMMARY
<TABLE>
<CAPTION>
PERIOD ENDED
APRIL 30, 1998(a)
-----------------
<S> <C>
Asian High Yield Fund (5.71)%
Asian High Yield Fund (incl. max. 4.75% sales charge) (10.20)%
Lipper Emerging Markets Debt Funds Category** 11.57%
</TABLE>
- --------------------
(a) Commencement date of operations for Asian High Yield Fund is October 20,
1997. Performance for the benchmark is not available from commencement date of
operations through April 30, 1998. For that reason, performance for the
benchmark is shown from November 1, 1997 through April 30, 1998.
* Total return is calculated assuming reinvestment of all dividends. Total
returns would have been lower had the Advisor (Orbitex Management, Inc.) and
Administrator and Custodian (State Street Bank and Trust Company) not waived or
reimbursed a portion of their fees. Results represent past performance and do
not indicate future results. The value of an investment in the Fund and the
return on investment both will fluctuate and redemption proceeds may be higher
or lower than an investor's original cost.
** The Lipper Emerging Markets Debt Funds Category is an unmanaged index
whereas the Fund is actively managed. The performance of the index does not
reflect any applicable sales charges or other expenses associated with
investment in the Fund; direct investment in the index is not possible. Index
performance is not intended to represent the future performance of Asian High
Yield Fund.
<PAGE> 10
ORBITEX GROUP OF FUNDS
ASIAN SELECT ADVISORS FUND
MANAGED BY BANKERS TRUST COMPANY AND ASIA STRATEGIC INVESTMENT LIMITED
PERFORMANCE REVIEW AND HOLDINGS: For the period from October 31, 1997
(commencement of operations) to April 30, 1998, the Fund declined (2.93)%,
compared with (5.63)%(a) for the MSCI Asia Ex-Japan Free Index, the Fund's
benchmark. The Fund's objective is superior long-term capital growth through
selective investment in Asian companies. The Fund seeks to achieve its objective
by investing at least 65% of its total assets in equity securities of Asian
companies in normal market conditions.
From October 31, 1997 to April 30, 1998, the Asian financial crisis has taken a
huge toll on the currencies and asset value within the region. All regional
markets have undergone tremendous contractions and volatilities. Given the
abnormally poor operating conditions, the Fund was more concerned about capital
preservation and stayed unusually defensive by holding a very high level of
cash. This has caused the Fund's holdings in Asian securities to stay below the
suggested prospectus percentages for some time. The move has enhanced
performance as all the markets declined sharply during the period.
The Fund has maintained a very disciplined approach by investing only when there
is believed to be good value. Relatively large exposures were installed in the
more stable economies of Hong Kong and Singapore, and the weaker "crisis
economies" of Korea, Indonesia, Thailand and Malaysia were generally avoided.
This led to a brief period of underperformance, in the first quarter of 1998,
when the latter markets staged a strong but short lived rally. This was soon
reversed as the poor economic fundamentals re-asserted themselves, and these
markets went into sharp decline again.
As these markets corrected, the Fund has become more active over the recent
weeks in investing its cash. Decisions based on stock selection led to small
positions being placed in Korea, Thailand and Malaysia. We have participated in
the recapitalization of two Thai banks, namely, Bangkok Bank and Thai Farmers
Bank. This will be an area that we shall be keeping an eye out for
opportunities.
The portfolio's investments are generally composed of large, liquid, index
stocks. We have recently gone overweight in Hong Kong and Singapore preferring
their stronger economic fundamentals and more consistent and sensible policies,
and relatively sound financial systems. Weightings in the crisis economies are a
function of our stock selection process rather than top down considerations.
Thus, we are overweighted in Thailand and neutral in Korea. Our cautious
assessments on Indonesia and the Philippines have not changed, and no weightings
are kept in those markets. We are actively looking for purchases as value
emerges in India and Taiwan.
OUTLOOK: Given the large uncertainties and volatilities in the markets, the Fund
will remain defensive in the near term. Some cash will be kept, and we shall
continue with our disciplined investment approach. We still favor the sounder
and more matured markets of Hong Kong and Singapore, and we shall retain our
cautious approach to the smaller markets where stock selection will be the key.
We appreciate your investment in Orbitex Asian Select Advisors Fund.
<PAGE> 11
The following graph shows a comparison of a hypothetical investment of $10,000
in Asian Select Advisors Fund (assumes reinvestment of all dividends and
distributions and a one time sales charge) versus the MSCI Asia Ex-Japan Free
Index.
<TABLE>
<CAPTION>
PERIOD ENDED
APRIL 30, 1998(a)
-----------------
<S> <C>
Asian Select Advisors Fund (incl. max. 5.75% sales charge) $9,148
MSCI Asia Ex-Japan Free Index $9,437
</TABLE>
CUMULATIVE TOTAL RETURN* SUMMARY
<TABLE>
<CAPTION>
PERIOD ENDED
APRIL 30, 1998(a)
-----------------
<S> <C>
Asian Select Advisors Fund (2.93)%
Asian Select Advisors Fund (incl. max. 5.75% sales charge) (8.54)%
MSCI Asia Ex-Japan Free Index** (5.63)%
</TABLE>
- --------------------
(a) Commencement date of operations for Asian Select Advisors Fund is October
31, 1997. Performance for the benchmark is not available from commencement date
of operations through April 30, 1998. For that reason, performance for the
benchmark is shown from November 1, 1997 through April 30, 1998.
* Total return is calculated assuming reinvestment of all dividends. Total
returns would have been lower had the Advisor (Orbitex Management, Inc.) and
Administrator and Custodian (State Street Bank and Trust Company) not waived or
reimbursed a portion of their fees. Results represent past performance and do
not indicate future results. The value of an investment in the Fund and the
return on investment both will fluctuate and redemption proceeds may be higher
or lower than an investor's original cost.
** The MSCI Asia Ex-Japan Free Index is an unmanaged index whereas the Fund is
actively managed. The performance of the index does not reflect any applicable
sales charges or other expenses associated with investment in the Fund; direct
investment in the index is not possible. Index performance is not intended to
represent the future performance of Asian Select Advisors Fund.
<PAGE> 12
ORBITEX GROUP OF FUNDS
STRATEGIC NATURAL RESOURCES FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 91.21%
AGRICULTURAL MACHINERY - 2.43%
Delta & Pine Land Co. ....................... 3,000 $138,188
-------
ALUMINUM - 2.85%
Alcan Aluminum, Ltd. ........................ 5,000 162,500
-------
CHEMICALS - 4.90%
Cytec Industries, Inc. (a) .................. 2,000 109,500
Dow Chemical Co. ............................ 1,000 96,687
Du Pont (E.I.) de Nemours and Co. ........... 1,000 72,813
-------
279,000
-------
GAS EXPLORATION - 9.54%
Anderson Exploration, Ltd. (a) .............. 4,000 48,673
Coho Energy, Inc. (a) ....................... 10,000 75,625
Forcenergy, Inc. (a) ........................ 3,000 69,187
Oryx Energy Co. (a) ......................... 4,000 104,500
Seagull Energy Corp. (a) .................... 10,000 170,625
Weatherford Enterra, Inc. (a) ............... 1,500 75,094
-------
543,704
-------
GAS & PIPELINE UTILITIES - 1.66%
Williams Companies, Inc. .................... 3,000 94,875
-------
INTERNATIONAL OIL - 7.50%
Poco Petroleum, Ltd. (a) .................... 2,000 22,798
Ranger Oil, Ltd. ............................ 17,000 117,938
Santa Fe International Corp. ................ 1,500 58,781
Texaco, Inc. ................................ 2,000 123,000
YPF Sociedad Anonima, ADR ................... 3,000 104,625
-------
427,142
-------
MINING - 10.88%
Barrick Gold Corp. .......................... 4,000 89,750
Freeport-McMoRan Copper & Gold, Inc., Class A 7,000 124,686
Getchell Gold Corp. (a) ..................... 3,000 73,875
Greenstone Resources, Ltd. (a) .............. 15,000 91,875
Newmont Mining Corp. ........................ 2,500 80,468
Phelps Dodge Corp. .......................... 1,500 100,688
Placer Dome, Inc ............................ 4,000 59,000
-------
620,342
-------
</TABLE>
See Notes to Financial Statements.
<PAGE> 13
ORBITEX GROUP OF FUNDS
STRATEGIC NATURAL RESOURCES FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ -----
<S> <C> <C>
OIL - 12.48%
Atlantic Richfield Co. ................ 2,000 $156,000
Canadian 88 Energy Corp. (a) .......... 20,000 97,500
Exxon Corp. ........................... 1,000 72,937
Halliburton Co. ....................... 2,500 137,500
Pennzoil Co. .......................... 1,000 64,063
Triton Energy, Ltd. (a) ............... 1,500 60,188
Unocal Corp. .......................... 3,000 122,812
-------
711,000
-------
OIL & GAS DRILLING - 8.70%
Ensco International, Inc. ............. 5,000 141,250
Santa Fe International Corp. .......... 8,000 82,500
Smith International, Inc. (a) ......... 1,500 88,125
Ultramar Diamond Shamrock Corp. ....... 3,000 96,937
UTI Energy Corp. (a) .................. 5,000 86,875
-------
495,687
-------
OIL & GAS EXPLORATION AND PRODUCTION - 9.34%
Benz Energy, Ltd. (a) ................. 10,000 12,448
Bonavista Petroleum, Ltd. (a) ......... 13,000 53,184
Canadian Conquest Exploration, Inc. (a) 50,000 40,211
EEX Corp. (a) ......................... 10,000 96,875
Global Industries, Inc. (a) ........... 2,500 56,719
Pacalta Resources, Ltd. (a) ........... 5,000 35,666
Probe Exploration, Inc. (a) ........... 15,000 65,037
Total SA, ADR ......................... 2,000 117,500
Ultra Petroleum Corp. (a) ............. 15,000 54,023
-------
531,663
-------
PAPER & RELATED PRODUCTS - 9.39%
Asia Pulp & Paper Co., Ltd., ADR ...... 4,000 58,250
Champion International Corp. .......... 2,000 107,625
Louisiana-Pacific Corp. ............... 5,000 109,375
Tembec, Inc., Class A (a) ............. 10,000 66,086
Union Camp Corp. ...................... 1,300 78,488
Weyerhaeuser Co. ...................... 2,000 115,250
-------
535,074
-------
PETROLEUM SERVICES - 10.46%
Baker Hughes, Inc. .................... 2,500 101,250
Barrington Petroleum, Ltd. (a) ........ 15,000 46,156
Lyondell Petrochemical Co. ............ 3,000 98,625
Noble Drilling Corp. (a) .............. 2,500 80,781
Seven Seas Petroleum, Inc. (a) ........ 2,000 42,500
Veritas DGC, Inc. (a) ................. 2,000 108,375
Western Atlas, Inc. ................... 1,500 118,500
-------
596,187
-------
</TABLE>
See Notes to Financial Statements.
<PAGE> 14
ORBITEX GROUP OF FUNDS
STRATEGIC NATURAL RESOURCES FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ -----
<S> <C> <C>
SOFTWARE - 0.16%
Mobius Management Systems, Inc. (a) ..... 500 $ 9,250
----------
STEEL - 0.92%
AK Steel Holding Corp. .................. 2,500 52,500
----------
TOTAL COMMON STOCKS - (Cost $4,805,529) 5,197,112
----------
SHORT TERM INVESTMENTS (COST $181,000) - 3.18% PRINCIPAL
TIME DEPOSIT - 3.18% AMOUNT
------
State Street Bank and Trust Co.,
5.250%, 05/01/1998 ...................... $ 181,000 181,000
----------
TOTAL INVESTMENTS (COST $4,986,529) - 94.39% 5,378,112
OTHER ASSETS AND LIABILITIES - 5.61% 319,722
----------
NET ASSETS - 100.00% $5,697,834
==========
</TABLE>
(a) Denotes non-income producing security.
ADR - American Depository Receipt
See Notes to Financial Statements.
<PAGE> 15
ORBITEX GROUP OF FUNDS
INFO-TECH & COMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 71.81%
ADVERTISING - 4.78%
DoubleClick, Inc. (a) ........................ 2,800 $116,725
-------
BUSINESS SERVICES - 5.61%
At Home Corp., Series A (a) .................. 1,700 56,631
Nokia Corp., ADR ............................. 1,200 80,250
-------
136,881
-------
COMMUNICATION SERVICES - 2.36%
China Telecom Hong Kong, Ltd., ADR (a) ....... 1,000 38,625
Exodus Communications, Inc. (a) .............. 500 19,000
-------
57,625
-------
ELECTRONICS - 16.75%
Altera Corp. (a) ............................. 1,000 40,500
Applied Materials, Inc. (a) .................. 1,000 36,125
ARM Holdings Plc, ADR (a) .................... 500 20,188
Broadcom Corp. (a) ........................... 2,000 96,000
Lexmark International Group, Inc., Class A (a) 600 34,725
Maxim Integrated Products, Inc. (a) .......... 1,500 60,562
Motorola, Inc. ............................... 900 50,062
Texas Instruments, Inc. ...................... 1,100 70,469
-------
408,631
-------
NETWORKING PRODUCTS - 0.90%
Cisco Systems, Inc. (a) ...................... 300 21,975
-------
SOFTWARE - 14.33%
ISS Group, Inc. (a) .......................... 1,000 44,250
Mobius Management Systems, Inc. (a) .......... 1,500 27,750
Ozemail, Ltd., ADR ........................... 10,000 228,125
Visual Networks, Inc. (a) .................... 1,500 49,687
-------
349,812
-------
TELECOMMUNICATIONS EQUIPMENT - 8.76%
Advanced Radio Telecom Corp. (a) ............. 1,500 21,938
Ascend Communications, Inc. (a) .............. 1,600 69,700
DSC Communications Corp. (a) ................. 1,000 18,000
Lucent Technologies, Inc. .................... 400 30,450
Newbridge Networks Corp. (a) ................. 1,000 29,312
Northern Telecom, Ltd. ....................... 400 24,350
Reltec Corp. (a) ............................. 500 19,938
-------
213,688
-------
</TABLE>
See Notes to Financial Statements.
<PAGE> 16
ORBITEX GROUP OF FUNDS
INFO - TECH & COMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ -----
<S> <C> <C>
TELECOMMUNICATIONS SERVICES - 6.28%
Metronet Communications Corp., Class B (a) .......... 1,000 $ 25,000
NTL, Inc. (a) ....................................... 1,000 39,000
Omnipoint Corp. (a) ................................. 2,200 53,900
Tellabs, Inc. (a) ................................... 500 35,438
-----------
153,338
-----------
TELEPHONE - 12.04%
BCE, Inc. ........................................... 500 21,281
Compania Anonima Nacional Telefonos de Venezuela, ADR 1,200 40,200
E. Spire Communications, Inc. (a) ................... 900 17,100
ITC Deltacom, Inc. (a) .............................. 500 14,313
Nextlink Communications, Inc., Class A (a) .......... 800 24,000
Powertel, Inc. (a) .................................. 1,600 36,600
Sprint Corp. ........................................ 400 27,325
Telecomunicacoes Brasileiras, ADR ................... 400 48,725
WorldCom, Inc. ...................................... 1,500 64,172
-----------
293,716
-----------
TOTAL COMMON STOCKS - (COST $1,446,288) .................. 1,752,391
-----------
SHORT TERM INVESTMENTS (COST $706,000) - 28.93% PRINCIPAL
TIME DEPOSIT - 28.93% AMOUNT
State Street Bank and Trust Co.,
5.250%, 05/01/1998 ................................. $706,000 706,000
-----------
TOTAL INVESTMENTS (COST $2,152,288) - 100.74% 2,458,391
OTHER ASSETS AND LIABILITIES - (0.74)% (18,049)
-----------
NET ASSETS - 100.00% $ 2,440,342
===========
</TABLE>
(a) Denotes non-income producing security
ADR - American Depository Receipt
See Notes to Financial Statements.
<PAGE> 17
ORBITEX GROUP OF FUNDS
GROWTH FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCKS - 101.66%
ADVERTISING - 1.64%
DoubleClick, Inc. (a) ...................................... 350 $14,591
-------
AIR TRAVEL - 4.82%
AMR Corp. (a) .............................................. 100 15,237
ASA Holdings, Inc. ......................................... 440 16,720
Southwest Airlines Co. ..................................... 400 10,975
-------
42,932
-------
AUTO PARTS - 3.56%
CSK Auto Corp. (a) ......................................... 700 18,900
Superior Industries International, Inc. .................... 400 12,850
-------
31,750
-------
BANKS - 1.91%
BankAmerica Corp. .......................................... 200 17,000
-------
BROADCASTING - 3.67%
Tele-Communications, Inc., Liberty Media Group, Series A (a) 500 16,594
Tele-Communications, Inc., TCI Group, Series A (a) ......... 500 16,125
-------
32,719
-------
BUSINESS SERVICES - 3.22%
Equifax, Inc. .............................................. 400 15,475
Manpower, Inc. ............................................. 300 13,219
-------
28,694
-------
CHEMICALS - 2.17%
Dow Chemical Co. ........................................... 200 19,337
-------
COMPUTERS & BUSINESS EQUIPMENT - 1.95%
Symbol Technologies, Inc. .................................. 450 17,325
-------
DIVERSIFIED MANUFACTURING- 1.91%
General Electric Co. ....................................... 200 17,025
-------
DRUGS & HEALTH CARE - 8.64%
Agouron Pharmaceuticals, Inc. (a) .......................... 500 17,000
Amgen, Inc. ................................................ 200 11,925
Biogen, Inc. (a) ........................................... 100 4,438
Bristol-Myers Squibb Co. ................................... 100 10,587
Cellegy Pharmaceuticals, Inc. (a) .......................... 1,300 7,394
Merck & Co., Inc. .......................................... 100 12,050
RLI Corp. .................................................. 250 13,562
-------
76,956
-------
ELECTRIC UTILITIES - 2.95%
Eastern Utilities Assoc .................................... 1,000 26,250
-------
</TABLE>
See Notes to Financial Statements.
<PAGE> 18
ORBITEX GROUP OF FUNDS
GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ -----
<S> <C> <C>
ELECTRONICS - 5.25%
ARM Holdings Plc, ADR (a) ......... 200 $ 8,075
Maxim Integrated Products, Inc. (a) 250 10,094
SGS-Thomson Microelectronics NV (a) 100 8,450
Texas Instruments, Inc. ........... 100 6,406
Xilinx, Inc. (a) .................. 300 13,725
-------
46,750
-------
FINANCIAL SERVICES - 2.70%
Countrywide Credit Industries, Inc. 250 12,094
Federal National Mortgage Assoc ... 200 11,975
-------
24,069
GAS & PIPELINE UTILITIES - 2.73%
Leviathan Gas Pipeline Partners ... 750 24,328
-------
HOMEBUILDERS - 0.96%
Kaufman & Broad Home Corp. ........ 290 8,584
-------
INDUSTRIAL MACHINERY - 3.46%
Magna International, Inc., Class A 200 14,912
Tokheim Corp. (a) ................. 1,000 15,875
-------
30,787
-------
INSURANCE - 0.96%
20th Century Industries ........... 300 8,550
-------
INTERNATIONAL OIL - 0.93%
Chevron Corp. ..................... 100 8,269
-------
METALS - 6.18%
Friedman Industries, Inc. ......... 5,775 42,591
Precision Castparts Corp. ......... 200 12,425
-------
55,016
-------
MINING - 3.09%
Getchell Gold Corp. (a) ........... 600 14,775
Homestake Mining Co. .............. 1,100 12,787
-------
27,562
-------
NETWORKING PRODUCTS - 2.64%
3Com Corp. (a) .................... 260 8,889
Cisco Systems, Inc. (a) ........... 200 14,650
-------
23,539
-------
PAPER - 4.37%
Pope & Talbot, Inc. ............... 2,500 38,906
-------
PETROLEUM SERVICES - 1.06%
Global Marine, Inc. (a) ........... 400 9,425
-------
</TABLE>
See Notes to Financial Statements.
<PAGE> 19
ORBITEX GROUP OF FUNDS
GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
REAL ESTATE - 2.02%
Catellus Development Corp. (a) ....................................... 300 $ 5,344
Lennar Corp. ......................................................... 450 12,655
------------
17,999
------------
RETAIL - 1.36%
Viking Office Products, Inc. (a) ..................................... 500 12,094
------------
RETAIL TRADE - 1.95%
Longs Drug Stores Corp. .............................................. 600 17,362
------------
SAVINGS AND LOAN - 3.49%
Golden West Financial Corp. .......................................... 150 15,797
H.F. Ahmanson & Co. .................................................. 200 15,250
------------
31,047
------------
SOFTWARE - 13.99%
Check Point Software Technologies, Ltd. (a) .......................... 200 5,875
Computer Associate International, Inc. ............................... 300 17,569
Electronic Arts, Inc. (a) ............................................ 300 13,875
HTE, Inc. (a) ........................................................ 500 14,000
Pegasystems, Inc. (a) ................................................ 700 13,125
Peregrine Systems, Inc. (a) .......................................... 600 14,475
Transaction Systems Architects, Inc., Class A (a) .................... 300 12,600
Visual Networks, Inc. (a) ............................................ 1,000 33,125
------------
124,644
------------
TELECOMMUNICATIONS SERVICES - 1.59%
Tellabs, Inc. (a) .................................................... 200 14,175
------------
TOBACCO - 1.86%
UST, Inc. ............................................................ 600 16,538
------------
TRANSPORTATION - 1.54%
C.H. Robinson Worldwide, Inc. ........................................ 600 13,725
------------
TRUCKING & FREIGHT FORWARDING - 3.09%
Air Express International Corp. ...................................... 400 10,500
Expeditores International ............................................ 400 17,000
------------
27,500
------------
TOTAL COMMON STOCKS - (Cost $846,862) 905,448
------------
TOTAL INVESTMENTS (COST $846,862) - 101.66% 905,448
OTHER ASSETS AND LIABILITIES - (1.66)% (14,808)
------------
NET ASSETS - 100.00% $ 890,640
============
</TABLE>
(a) Denotes non-income producing security
ADR - American Depository Receipt
See Notes to Financial Statements.
<PAGE> 20
ORBITEX GROUP OF FUNDS
ASIAN HIGH YIELD FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
BONDS AND NOTES - 106.23%
BRAZIL - 1.15%
GOVERNMENT - 1.15%
Republic of Brazil C Bond, 5.00%
with 3.00% Interest Capitalization, 04/15/2014 (a)(b)............. $ 52,279 $ 43,326
------------
CHINA - 2.46%
GOVERNMENT - 1.22%
Guangdong International Trust
& Investment Corp., 8.750%, 10/24/2016 (c) ......................... 50,000 46,000
------------
MUNICIPAL - 1.24%
Zhuhai Hwy Co., Ltd., 11.500%, 07/01/2008 (c) ........................ 50,000 46,750
------------
HONG KONG - 2.56%
INDUSTRIAL - 1.26%
Hutchison Whampoa, Ltd., 6.950%, 08/01/2007 (c)....................... 50,000 47,395
------------
REAL ESTATE - 1.30%
Cheung Kong Finance, 5.500%, 09/30/1998 .............................. 50,000 49,125
------------
INDIA - 6.19%
ENERGY - 4.93%
Tata Electric Co., 7.875%, 08/19/2007 (c)............................. 200,000 185,720
------------
INDUSTRIALS - 1.26%
Reliance Industries, Ltd., 8.125%, 09/27/2005 (c)..................... 50,000 47,500
------------
INDONESIA- 0.92%
FOOD, BEVERAGE & TOBACCO - 0.92%
Sampoerna International Financial Co., 8.375%, 06/15/2006 (c)......... 50,000 34,500
------------
JAPAN - 8.71%
BANKS - 2.61%
Tokai Preferred Capital Co. LLC, 9.980%, 12/29/2049 (c)(d)............ 100,000 98,500
------------
ELECTRIC UTILITIES - 6.10%
Tenaga Nasional Berhad, 7.625%, 04/29/2007 (c)........................ 50,000 44,875
Tenaga Nasional Berhad, 7.875%, 06/15/2004 (c)........................ 200,000 184,790
------------
229,665
------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 21
ORBITEX GROUP OF FUNDS
ASIAN HIGH YIELD FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 1998
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
KOREA - 37.61%
BANKS - 8.75%
Korea Development Bank, 7.000%, 07/15/1999 ........................... $ 100,000 $ 98,590
Korea Development Bank, 7.375%, 09/17/2004 ........................... 250,000 230,825
--------------
329,415
--------------
GOVERNMENT - 14.55%
Export-Import Bank of Korea, 6.500%, 02/10/2002 ..................... 110,000 100,937
Export-Import Bank of Korea, 6.500%, 11/15/2006 ..................... 200,000 175,000
Export-Import Bank of Korea, 7.100%, 03/15/2007 ..................... 80,000 74,800
Republic of Korea, 8.875%, 04/15/2008 ................................ 200,000 197,210
--------------
547,947
--------------
INDUSTRIALS - 4.96%
Pohang Iron & Steel, Ltd., 7.500%, 08/1/2002 ......................... 200,000 187,000
--------------
TELECOMMUNICATIONS SERVICES - 7.27%
Korea Telecom, 7.625%, 04/15/2007 .................................... 100,000 88,744
SK Telecom Co., Ltd., 7.750%, 04/29/2004 ............................. 200,000 185,250
--------------
273,994
--------------
UTILITIES - 2.08%
Korea Electric Power Corp., 6.375%, 12/01/2003 ....................... 90,000 78,300
--------------
MALAYSIA - 1.23%
INDUSTRIALS - 1.23%
Petroliam Nasional Berhad, 7.125%, 08/15/2005 (c)..................... 50,000 46,340
--------------
MEXICO - 2.75%
INDUSTRIALS - 2.75%
AXA SA de CV, 9.000%, 08/04/2004 (c).................................. 50,000 49,125
Copamex Industrias SA De CV, 11.375%, 04/30/2004 ..................... 50,000 54,625
--------------
103,750
--------------
PHILIPPINES - 21.15%
ENERGY - 9.21%
Ce Casecnan Water & Energy, Inc.,
Senior Note, 11.450%, 11/15/2005 ................................... 100,000 105,200
Ce Casecnan Water & Energy, Inc.,
Senior Note, 11.950%, 11/15/2010 ................................... 225,000 241,603
--------------
346,803
--------------
GOVERNMENT - 9.11%
Bangko Sentral Ng Philipinas, 8.600%, 06/15/2027 ..................... 100,000 90,000
ING Bank NV, Floating Rate Note, 02/12/1999 (c)(e)(d)(f) ............. 100,000 104,250
Republic of Philippines, 8.875%, 04/15/2008 .......................... 150,000 148,875
--------------
343,125
--------------
TELEPHONE - 2.83%
Philippine Long Distance Telephone, 10.625%, 06/02/2004 .............. 100,000 106,470
--------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 22
ORBITEX GROUP OF FUNDS
ASIAN HIGH YIELD FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 1998
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
RUSSIA - 1.17%
GOVERNMENT - 1.17%
Russia Ministry of Finance, 9.250%, 11/27/2001 ....................... $ 30,000 $ 29,475
Russia Ministry of Finance, 10.000%, 06/26/2007 ...................... 15,000 14,456
--------------
43,931
--------------
THAILAND - 12.12%
BANKS - 4.58%
Bangkok Bank Public Co., Ltd., 7.250%, 09/15/2005 (c) ................ 200,000 172,340
--------------
INDUSTRIALS - 7.54%
PTTEP International, Ltd., 7.625%, 10/01/2006 (c)..................... 320,000 283,888
--------------
TURKEY - 5.37%
GOVERNMENT - 5.37%
Republic of Turkey, 10.000%, 09/19/2007 .............................. 100,000 102,500
Sultan, Ltd., Floating Rate Note, 8.750%, 06/11/1999 (d) ............. 100,000 99,760
--------------
202,260
--------------
UNITED STATES - 2.84%
GOVERNMENT - 2.84%
United States Treasury Note, 6.875%, 05/15/2006 ...................... 100,000 107,062
--------------
TOTAL BONDS AND NOTES - (Cost $4,015,710) 4,001,106
---------------
PREFERRED STOCKS (COST $49,716) - 1.32% SHARES
CHINA - 1.32% ------
INDUSTRIALS - 1.32%
Swire Pacific, Ltd., 9.33%, Series 144A(c)............................ 2,200 50,050
--------------
TOTAL LONG TERM INVESTMENTS - (Cost $4,065,426 ) 4,051,156
---------------
</TABLE>
See Notes to Financial Statements.
<PAGE> 23
ORBITEX GROUP OF FUNDS
ASIAN HIGH YIELD FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 1998
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
SHORT TERM INVESTMENTS (COST $354,755) - 9.42%
UNITED STATES - 9.42%
GOVERNMENT - 9.42%
United States Treasury Bill,
4.850% - 4.990%, 06/25/1998 - 07/09/1998(g)........................ $ 358,000 $ 354,755
--------------
TOTAL INVESTMENTS (COST $4,420,181) - 116.97% 4,405,911
OTHER ASSETS AND LIABILITIES - (16.97)% (639,354)
--------------
NET ASSETS - 100.00% $ 3,766,557
==============
</TABLE>
(a) The coupon rate shown on step-up coupon bond represents the rate as of April
30, 1998.
(b) Bond pays stated or additional interest with "payment-in-kind" (PIK) bonds.
(c) Securities purchased pursuant to Rule 144A of the Securities Act of 1933 and
may be resold in transactions exempt from registration, normally only to
qualified institutional buyers. At April 30, 1998, these securities amounted
to $1,442,023, representing 38.29% of the Fund's net assets.
(d) The coupon rate shown on floating rate note represents the rate at April 30,
1998.
(e) Illiquid security restricted as to resale, represents 2.77% (at value) of
the net assets of the Fund, with an acquisition date of 02/12/98 and
acquisition cost of $100,000.
(f) Structured Note which pays an interest amount at either the Philippines
T-Bill rate (currently at 17.7%, resets semi-annually) less 2.25% or LIBOR
plus 100 basis points, whichever is higher at the due date.
(g) The coupon rate represents the annualized yield at date of purchase.
See Notes to Financial Statements.
<PAGE> 24
ORBITEX GROUP OF FUNDS
ASIAN SELECT ADVISORS FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMON STOCKS - 41.60%
HONG KONG - 19.04%
CONGLOMERATES - 4.58%
Hutchison Whampoa .................................................... 1,000 $ 6,184
------------
REAL ESTATE - 4.65%
Citic Pacific, Ltd. .................................................. 1,000 3,072
Wharf Holdings ....................................................... 2,000 3,202
------------
6,274
------------
RETAIL - 4.22%
New World Development Co., Ltd. ...................................... 2,000 5,693
------------
TELEPHONE - 5.59%
China Telecom, Ltd. .................................................. 2,000 3,796
Hong Kong Telecomm ................................................... 2,000 3,744
------------
7,540
------------
KOREA - 4.04%
ELECTRIC UTILITIES - 4.04%
Korea Electric Power Corp. ........................................... 400 5,447
------------
SINGAPORE - 14.18%
BUILDING MATERIALS & CONSTRUCTION - 3.12%
Hong Leong Asia, Ltd. ................................................ 5,000 4,202
------------
ELECTRONICS - 3.27%
Singapore Technologies ............................................... 5,137 4,415
------------
TELEPHONE - 3.82%
Singapore Telecommunications, Ltd. ................................... 3,000 5,156
------------
TRANSPORTATION - 3.97%
Keppel Telecom & Transport ........................................... 8,000 5,359
------------
THAILAND - 4.34%
BANKS - 4.34%
Bangkok Bank ......................................................... 600 1,506
Thai Farmers Bank Public Co., Ltd. ................................... 1,900 4,350
------------
5,856
------------
TOTAL COMMON STOCKS - (Cost $57,817) 56,126
------------
TOTAL INVESTMENTS (COST $57,817) - 41.60% 56,126
OTHER ASSETS AND LIABILITIES - 58.40% 78,795
------------
NET ASSETS - 100.00% $ 134,921
============
</TABLE>
See Notes to Financial Statements.
<PAGE> 25
ORBITEX GROUP OF FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 1998
<TABLE>
<CAPTION>
STRATEGIC
NATURAL INFO-TECH & ASIAN HIGH ASIAN
RESOURCES COMMUNICATIONS GROWTH YIELD SELECT ADVISORS
FUND FUND FUND FUND FUND
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in securities, at value (Note 2) $ 5,197,112 $ 1,752,391 $ 905,448 $ 4,051,156 $ 56,126
Short term investments (Note 2) 181,000 706,000 - 354,755 -
----------- ----------- ----------- ----------- -----------
Total investments 5,378,112 2,458,391 905,448 4,405,911 56,126
Cash 855 2,760 81,923 378,422 85,944
Foreign currency, at value 35,384 - - - 1,065
Receivable for securities sold 372,880 - 18,627 - -
Interest receivable 26 103 - 77,358 -
Dividends receivable 8,430 498 4,063 1,283 83
Receivable for fund shares sold 246,116 133,455 9,413 39,035 -
Receivable due from advisor (Note 3) 6,407 14,614 17,142 28,783 22,647
Prepaid expenses 6,048 6,049 5,381 6,179 5,378
Deferred organizational expenses (Note 2) 16,891 16,881 16,881 16,871 16,974
----------- ----------- ----------- ----------- -----------
TOTAL ASSETS 6,071,149 2,632,751 1,058,878 4,953,842 188,217
LIABILITIES
Payable for securities purchased 310,203 117,894 114,432 376,771 -
Payable for fund shares redeemed - 22,019 - - -
Payable for trustee fees (Note 3) 1,000 1,000 1,000 1,000 1,000
Payable for organizational expense (Note 2) 4,589 4,589 4,589 4,589 4,589
Payable for line of credit (Note 9) - - - 750,000 -
Accrued expenses and other liabilities 57,523 46,907 48,217 54,925 47,707
----------- ----------- ----------- ----------- -----------
TOTAL LIABILITIES 373,315 192,409 168,238 1,187,285 53,296
----------- ----------- ----------- ----------- -----------
NET ASSETS $ 5,697,834 $ 2,440,342 $ 890,640 $ 3,766,557 $ 134,921
=========== =========== =========== =========== ===========
NET ASSETS
Paid-in capital $ 5,484,453 $ 2,164,523 $ 776,356 $ 3,931,613 $ 137,824
Undistributed net investment income 119,210 - 13,074 26,364 -
Accumulated net realized gain (loss) on
investments and foreign currency transactions (297,412) (30,284) 42,624 (177,150) (1,212)
Net unrealized appreciation (depreciation) on
investments and foreign currency transactions 391,583 306,103 58,586 (14,270) (1,691)
----------- ----------- ----------- ----------- -----------
NET ASSETS $ 5,697,834 $ 2,440,342 $ 890,640 $ 3,766,557 $ 134,921
=========== =========== =========== =========== ===========
NET ASSET VALUE PER SHARE
Net asset value per share (based on shares
of beneficial interest outstanding, par
value $0.01 per share) $ 16.54 $ 19.62 $ 17.93 $ 10.93 $ 14.56
=========== =========== =========== =========== ===========
Maximum sales charge (Note 1) 5.75% 5.75% 5.75% 4.75% 5.75%
Offering price per share $ 17.55 $ 20.82 $ 19.02 $ 11.48 $ 15.45
=========== =========== =========== =========== ===========
Total shares outstanding at end of period 344,464 124,389 49,674 344,640 9,265
=========== =========== =========== =========== ===========
Cost of investments $ 4,986,529 $ 2,152,288 $ 846,862 $ 4,420,181 $ 57,817
=========== =========== =========== =========== ===========
Foreign currency, at cost $ 35,384 $ - $ - $ - $ 1,065
=========== =========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements.
<PAGE> 26
ORBITEX GROUP OF FUNDS
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED APRIL 30, 1998 *
<TABLE>
<CAPTION>
STRATEGIC
NATURAL INFO-TECH & ASIAN HIGH ASIAN
RESOURCES COMMUNICATIONS GROWTH YIELD SELECT ADVISORS
FUND FUND FUND FUND FUND
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest income $ 19,752 $ 2,943 $ 502 $ 122,532 $ 80
Dividend income 157,738 1,726 18,839 1,283 310
Foreign taxes withheld (369) (62) (7) -- --
--------- --------- --------- --------- ---------
TOTAL INVESTMENT INCOME 177,121 4,607 19,334 123,815 390
EXPENSES
Custodian fee (Note 3) 45,074 40,820 45,605 36,946 51,513
Administration fee (Note 3) 43,750 43,750 43,750 43,750 43,750
Investment advisor fee (Note 3) 25,989 5,113 2,423 17,612 953
Professional fees 24,000 24,000 24,000 24,000 24,000
Transfer agent fee 14,860 15,028 14,893 14,971 14,129
Registration fees 17,000 15,510 15,219 16,404 15,100
Distribution fee (Note 3) 8,316 1,635 1,291 4,227 254
Printing expense 7,000 7,000 7,000 7,000 7,000
Insurance fee 2,917 2,917 2,917 2,917 2,917
Trustees' fee (Note 3) 2,000 2,000 2,000 2,000 2,000
Miscellaneous expense 30 28 28 2,001 58
Amortization of organizational expense (Note 2) 1,963 1,973 1,973 1,983 1,880
Interest expense (Note 9) -- -- -- 1,924 --
--------- --------- --------- --------- ---------
Total expenses before waivers,
reimbursements and custodial credits 192,899 159,774 161,099 175,735 163,554
Expenses waived and reimbursed (Note 3) (142,005) (148,028) (154,315) (172,701) (160,290)
Fees reduced by credits allowed by the
custodian Note 3) (1,091) (1,929) (1,622) (1,110) (1,677)
--------- --------- --------- --------- ---------
NET EXPENSES 49,803 9,817 5,162 1,924 1,587
--------- --------- --------- --------- ---------
NET INVESTMENT INCOME (LOSS) 127,318 (5,210) 14,172 121,891 (1,197)
--------- --------- --------- --------- ---------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investments (290,842) (30,284) 41,526 (177,110) (1,212)
Foreign currency related transactions (615) -- -- -- 44
--------- --------- --------- --------- ---------
Total net realized gain (loss) (291,457) (30,284) 41,526 (177,110) (1,168)
Net change in unrealized appreciation
(depreciation) on investment transactions 391,583 306,103 58,586 (14,270) (1,691)
--------- --------- --------- --------- ---------
NET REALIZED AND UNREALIZED
GAIN (LOSS) 100,126 275,819 100,112 (191,380) (2,859)
--------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS $ 227,444 $ 270,609 $ 114,284 $ (69,489) $ (4,056)
========= ========= ========= ========= =========
SALES CHARGE PAID TO
FUNDS DISTRIBUTOR, INC $ 38,790 $ 47,510 $ 5,248 $ 55,389 $ 1,100
========= ========= ========= ========= =========
</TABLE>
* The commencement of investment operations was October 23, 1997 for Strategic
Natural Resources Fund, October 22, 1997 for Info-Tech & Communications Fund
and Growth Fund, October 20, 1997 for Asian High Yield Fund, and October 31,
1997 for Asian Select Advisors Fund.
See Notes to Financial Statements.
<PAGE> 27
ORBITEX GROUP OF FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED APRIL 30, 1998 *
<TABLE>
<CAPTION>
STRATEGIC
NATURAL INFO-TECH & ASIAN HIGH ASIAN
RESOURCES COMMUNICATIONS GROWTH YIELD SELECT ADVISORS
FUND FUND FUND FUND FUND
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) $ 127,318 $ (5,210) $ 14,172 $ 121,891 $ (1,197)
Net realized gain (loss) on investments and
foreign currency related transactions (291,457) (30,284) 41,526 (177,110) (1,168)
Net change in unrealized appreciation
(depreciation) on investment transactions 391,583 306,103 58,586 (14,270) (1,691)
------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations 227,444 270,609 114,284 (69,489) (4,056)
------------ ------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
FROM:
Net investment income (7,147) -- -- (95,628) --
Distributions in excess of net realized gains (6,916) -- -- -- --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions to
shareholders (14,063) -- -- (95,628) --
------------ ------------ ------------ ------------ ------------
FUND SHARE TRANSACTIONS:
Proceeds from fund shares sold 10,833,321 2,171,752 756,356 5,998,122 118,977
Proceeds from reinvestment of dividends 12,051 -- -- 21,381 --
Cost of fund shares redeemed (5,380,919) (22,019) -- (2,107,829) --
------------ ------------ ------------ ------------ ------------
Net increase from fund share transactions 5,464,453 2,149,733 756,356 3,911,674 118,977
TOTAL INCREASE IN NET ASSETS 5,677,834 2,420,342 870,640 3,746,557 114,921
------------ ------------ ------------ ------------ ------------
NET ASSETS:
Beginning of period (Note 8) 20,000 20,000 20,000 20,000 20,000
------------ ------------ ------------ ------------ ------------
End of period $ 5,697,834 $ 2,440,342 $ 890,640 $ 3,766,557 $ 134,921
============ ============ ============ ============ ============
NUMBER OF FUND SHARES:
Shares outstanding at beginning of period (Note 8) 1,333 1,333 1,333 1,667 1,333
Shares sold 709,678 124,204 48,341 528,380 7,932
Shares reinvested 713 -- -- 2,010 --
Shares redeemed (367,260) (1,148) -- (187,417) --
------------ ------------ ------------ ------------ ------------
Net increase in shares outstanding 343,131 123,056 48,341 342,973 7,932
------------ ------------ ------------ ------------ ------------
Total shares outstanding at end of period 344,464 124,389 49,674 344,640 9,265
============ ============ ============ ============ ============
Undistributed net investment income at
end of period $ 119,210 $ -- $ 13,074 $ 26,364 $ --
============ ============ ============ ============ ============
</TABLE>
* The commencement of investment operations was October 23, 1997 for Strategic
Natural Resources Fund, October 22, 1997 for Info-Tech & Communications Fund
and Growth Fund, October 20, 1997 for Asian High Yield Fund, and October 31,
1997 for Asian Select Advisors Fund.
See Notes to Financial Statements.
<PAGE> 28
ORBITEX GROUP OF FUNDS
FINANCIAL HIGHLIGHTS
FOR THE PERIOD ENDED APRIL 30, 1998 (a)
Selected data based on a share outstanding throughout the period indicated
<TABLE>
<CAPTION>
STRATEGIC ASIAN
NATURAL INFO-TECH & ASIAN SELECT
RESOURCES COMMUNICATIONS GROWTH HIGH YIELD ADVISORS
FUND FUND FUND FUND FUND
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 15.00 $ 15.00 $ 15.00 $ 12.00 $ 15.00
--------- --------- --------- --------- ---------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.38(d) 0.00 0.26(d) 0.45 0.00
Net realized and unrealized gain (loss) on investments
and foreign currency related transactions 1.22 4.62 2.67 (1.15) (0.44)
--------- --------- --------- --------- ---------
Total income (loss) from investment operations 1.60 4.62 2.93 (0.70) (0.44)
--------- --------- --------- --------- ---------
Less distributions from net investment income (0.03) - - (0.37) -
Less distributions in excess of capital gains (0.03) - - - -
--------- --------- --------- --------- ---------
Total distributions from net investment income
and net capital gains (0.06) - - (0.37) -
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 16.54 $ 19.62 $ 17.93 $ 10.93 $ 14.56
========= ========= ========= ========= =========
TOTAL RETURN (b) 10.74% 30.80% 19.53% (5.71)% (2.93)%
========= ========= ========= ========= =========
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 5,698 $ 2,440 $ 891 $ 3,767 $ 135
Ratio of expenses to average net assets
(including interest expense) (c) 2.40% 2.40% 1.60% 0.14% 2.50%
Ratio of expenses to average net assets (including
interest expense and custodial credits) (c) 2.45% 2.88% 2.11% 0.22% 5.14%
Ratio of expenses to average net assets without expenses
waived, reimbursed and/or reduced by custodial credits (c) 9.27% 39.06% 50.13% 12.47% 257.54%
Ratio of net investment income (loss) to average
net assets (c) 6.12%(d) (1.27)% 4.41% 8.65%(d) (1.89)%
Portfolio turnover rate 519% 76% 448% 173% 5%
</TABLE>
(a) The commencement of investment operations was October 23, 1997 for
Strategic Natural Resources Fund, October 22, 1997 for Info-Tech &
Communications Fund and Growth Fund, October 20, 1997 for Asian High Yield
Fund, and October 31, 1997 for Asian Select Advisors Fund.
(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. 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.
<PAGE> 29
ORBITEX GROUP OF FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998
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 five funds (collectively the "Funds" and individually the "Fund")
as follows: Strategic Natural Resources Fund, Info-Tech & Communications Fund,
Growth Fund, Asian High Yield Fund and Asian Select Advisors Fund. Each Fund
operates as a diversified investment company except Asian High Yield Fund which
operates as a non-diversified investment company. The commencement date of
operations for Strategic Natural Resources Fund, Info-Tech & Communications
Fund, Growth Fund, Asian High Yield Fund and Asian Select Advisors Fund was
October 23, 1997, October 22, 1997, October 22, 1997, October 20, 1997 and
October 31, 1997, respectively. All Funds 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%.
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 TRANSACTIONS
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 TRANSLATION
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> 30
ORBITEX GROUP OF FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 1998
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 at their fair value 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.
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. The Advisor has paid a majority of the organizational costs
of the Funds and was reimbursed by the Funds.
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.
<PAGE> 31
ORBITEX GROUP OF FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1998
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.
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 and the
Asian Select Advisors 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,
1.25% for the Asian High Yield Fund, and 1.50% for the Asian Select Advisors
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.
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%, 1.60%,
2.00%, and 2.50% for the Strategic Natural Resources Fund, Info-Tech &
Communications Fund, Growth Fund, Asian High Yield Fund and Asian Select
Advisors Fund, respectively, subject to possible reimbursement by the Asian High
Yield Fund in future years if such reimbursement can be achieved within the
foregoing expense limit. 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 Asian High Yield Fund for the first 150
days of the Fund's operation and in 60 day intervals thereafter. The waivers for
the advisor's fee for the period ended April 30, 1998 amounted to $25,989,
$5,113, $2,423, $17,612 and $953 for Strategic Natural Resources Fund, Info-Tech
& Communications Fund, Growth Fund, Asian High Yield Fund and Asian Select
Advisors Fund, respectively. The reimbursements for the period ended April
30,1998 amounted to $55,295, $74,137, $80,890, $96,111 and $82,263 for Strategic
Natural Resources Fund, Info-Tech & Communications Fund, Growth Fund, Asian High
Yield Fund and Asian Select Advisors Fund, respectively.
SUB-ADVISORY FEES
Asian High Yield Fund and Asian Select Advisors Fund both have Sub-Advisory
relationships. Pursuant to separate Sub-Advisory Agreements among each
Sub-Advisor, the Advisor and the Trust, each Sub-Advisor is responsible for the
selection and management of portfolio investments for a Fund, or for its segment
of a particular Fund, in accordance with the Fund's investment objective and
policies and under the supervision of the Advisor.
<PAGE> 32
ORBITEX GROUP OF FUNDS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998
On a monthly basis, each Sub-Advisor receives a sub-advisory fee, paid by the
Advisor, based on the applicable Fund's average daily net assets as follows:
<TABLE>
<CAPTION>
- ---------------------------- -------------------------------- ------------------------------- -------------------------------
Asia Strategic Investment J.P. Morgan Investment
Bankers Trust Company Management Limited Management, Inc.
- ---------------------------- -------------------------------- ------------------------------- -------------------------------
<S> <C> <C> <C>
Asian High Yield Fund - - 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
- ---------------------------- -------------------------------- ------------------------------- -------------------------------
Asian Select Advisors Fund 0.70% of the average daily net 0.50% of the average daily -
assets of the Fund advised by net assets of the Fund
Bankers Trust Company. advised by Asia Strategic
Investment Management Limited
- ---------------------------- -------------------------------- ------------------------------- -------------------------------
</TABLE>
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 April 30, 1998 which amounted to $40,014, $41,403, $41,412, $40,544, and
$41,610 for Strategic Natural Resources Fund, Info-Tech & Communications Fund,
Growth Fund, Asian High Yield Fund and Asian Select Advisors Fund, respectively.
CUSTODIAN FEES
State Street serves as the Trust's custodian, including holding all portfolio
securities and cash assets of the Trust and providing accounting services
including daily valuation of the shares of each Fund, for which it receives an
annual custody and accounting fee. State Street agreed to waive certain fees for
the period ended April 30, 1998 which amounted to $20,707, $27,375, $29,590,
$18,434 and $35,464 for Strategic Natural Resources Fund, Info-Tech &
Communications Fund, Growth Fund, Asian High Yield Fund and Asian Select
Advisors Fund, respectively.
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 provides for payment of a fee to the Distributor at an
annualized rate of 0.30% of the average daily net assets of the Asian High Yield
Fund and 0.40% of the average daily net assets of each of the other Funds.
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> 33
ORBITEX GROUP OF FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1998
4. AGGREGATE UNREALIZED APPRECIATION AND DEPRECIATION
The identified cost of investments in securities owned by each Fund for federal
income tax purposes and their respective gross unrealized appreciation and
depreciation at April 30, 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....... $ 5,014,480 $ 429,886 $ 66,254 $ 363,632
Info-Tech & Communications Fund........ 2,152,288 329,395 23,292 306,103
Growth Fund............................ 847,500 77,002 19,054 57,948
Asian High Yield Fund.................. 4,420,181 42,108 56,378 (14,270)
Asian Select Advisors Fund............. 57,817 2,219 3,910 (1,691)
</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
April 30, 1998, were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Strategic Natural Resources Fund....... $ 22,061,773 $ 16,965,402
Info-Tech & Communications Fund........ 1,950,955 474,383
Growth Fund............................ 3,178,134 2,372,798
Asian High Yield Fund.................. 6,461,606 2,333,508
Asian Select Advisors Fund............. 61,126 2,097
</TABLE>
Purchases and sales of U.S. Government obligations aggregated $2,105,657 and
$1,997,957, respectively, for the Asian High Yield Fund.
6. 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 FUND HELD
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Strategic Natural Resources Fund....... 2 48%
Info-Tech & Communications Fund........ 1 36%
Growth Fund............................ 4 87%
Asian High Yield Fund.................. 4 70%
Asian Select Advisors Fund............. 3 93%
</TABLE>
The following schedule shows the number of affiliates each owning 5% or more of
a Fund and the total percentage of the Fund held by such affiliates:
<TABLE>
<CAPTION>
5% OR GREATER AFFILIATES
-----------------------------------------------------
FUND NAME % OF FUND HELD
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Growth Fund............................ James Nelson 6%
Asian Select Advisors Fund............. Konrad Krill 72%
Asian Select Advisors Fund............. Orbitex Management Inc. 14%
</TABLE>
<PAGE> 34
ORBITEX GROUP OF FUNDS.....
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1998
7. 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.
8. 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.
9. LINE OF CREDIT
The Trust participates 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 fiscal year ending April 30, 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 is May 15, 1998.
<PAGE> 35
ORBITEX GROUP OF FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1998
10. SUBSEQUENT EVENTS (UNAUDITED)
At the May 27, 1998 Board Meeting, the Trustees voted to accept the resignation
of J.P. Morgan Investment Management, Inc. as the Sub-Advisor on the Asian High
Yield Fund, which will be effective July 1998. The Fund will be managed by its
current investment advisor, Orbitex Management Inc.
Additionally, the Trustees have approved, by unanimous vote, the addition of a
new fund to the series, Orbitex West Coast Fund, and the addition of two new
classes of shares. Class I shares will be an institutional class of shares
offered to qualified institutions and certain fee-based investment and financial
advisors. Class I shares will be offered at net asset value and subject to a
shareholder servicing fee at an annual rate of 0.25% of the average daily net
asset value of the Class I shares beneficially owned by the clients receiving
the service. Class B shares will also be offered at net asset value, without any
initial sales charge. However, there will be a contingent deferred sales charge
on Class B shares which are sold within six years of their purchase date. Class
B shares will also be subject to a distribution fee of 0.75% of the average
daily net assets attributable to Class B shares of the Fund.
<PAGE> 36
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of Orbitex Group of Funds,
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of each of the five funds (each a
"Fund") comprising Orbitex Group of Funds (the "Trust") at April 30, 1998, and
the results of each Fund's operations, the changes in each Fund's net assets and
the financial highlights for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Trust's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at April 30, 1998 by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmation from brokers were not received, provide a
reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
June 12, 1998
