MIDAS FUNDS
SEMI ANNUAL REPORT
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MIDAS MAGIC
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MIDAS FUND
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MIDAS INVESTORS
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MIDAS U.S. AND OVERSEAS FUND
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MIDAS SPECIAL EQUITIES FUND
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DOLLAR RESERVES
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[LOGO]
MIDAS
FUNDS
Discovering Opportunities
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CONTENTS
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Letter to Our Shareholders 1
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PORTFOLIO COMMENTS
Midas Magic 3
Midas Fund and Midas Investors 5
Midas U.S. and Overseas Fund 7
Midas Special Equities Fund 8
Dollar Reserves 10
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SCHEDULE OF INVESTMENTS
Midas Magic 12
Midas Fund 13
Midas Investors 14
Midas U.S. and Overseas Fund 15
Midas Special Equities Fund 16
Dollar Reserves 17
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Consolidated Financial Statements 18-21
Notes to Financial Statements 22-26
Financial Highlights 27-29
New Account Application 31
Additional Information Inside Back Cover
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It is with great pleasure that we submit this first combined Semi-Annual
Report for the Midas Funds, a family of funds for all your investing needs. We
also are very pleased to welcome shareholders of the Funds who have joined us
since our last Report, either by opening accounts directly, or through a
brokerage firm. During the six month period since our last Report, we note a
number of shareholders have taken advantage of current lower prices to add to
their accounts.
As we suggested six months ago, investing in the financial markets in the
year 2000 would require selectivity and patience. The market's volatility over
the last several months has been extraordinary. The Nasdaq Composite Index,
after closing above 3,000 in November 1999 and 4,000 in December, hit 5,000 in
March as investor euphoria and stock valuations reached manic levels. Then the
Nasdaq index fell 37%, and from there recovered to conclude the six months down
2.54%. Though less volatile over the period, the Dow Jones Industrial Average's
decline of 8.48% was its worst first half year performance since 1984. For
investors who thought the financial markets only went in one direction, up, it
was a rude awakening.
At Midas, we recognize that investing for long-term results requires hard
work and discipline to stay the course. There are just no easy answers or
comfortable certainties for successful investing. While statistically it is
interesting to note that in the past fifty years the market has declined only
once in the second half of an election year, in 1960, for long term results, we
are much more focused on finding the securities of the best quality companies
with the most attractive businesses. Especially in these rocky financial
markets, we remain committed to our focus on those changes in company
fundamentals, economic data, and market trends which we expect to best reward
investors over the long term. Even in the midst of extreme and unsettling market
turbulence, we will attempt to modify the Fund portfolios in an effort to
capture the investment opportunities that result from those changes.
Staying focused can also help investors in the Midas Funds plan for their
future. Most critically, investing focus means taking a long-term view of
portfolio holdings. Through the inevitable up and down cycles of the financial
markets, with a long term focus you have less risk of panic selling during a
market decline, which may turn out to be only a temporary correction. Secondly,
focusing on appropriate diversification can help investors achieve the best
levels of overall risk and moderation of portfolio volatility. Investing among
different Midas Funds can held you seek this diversification. Consider Dollar
Reserves, a money market fund, for shorter term needs, the Midas precious metals
funds for a hedge against inflation, and the Midas equity funds for longer-term
horizons.
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1
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Finally, no matter what your time horizon or portfolio diversity, a good
way to stay focused in investing is to follow a regular investment plan.
Investors should consider setting up their own or using Midas' convenient
Automatic Investing Program to regularly transfer fixed amounts from bank
accounts, salary paychecks, or U.S. Government payments for investment in one or
more Midas Funds at the same time each month or quarter. Combined with periodic
reviews of your total portfolio, regular investing offers a sensible way to
remain committed to your investment goals.
If you have any questions, please call us at 1-800-400-MIDAS (6432) and an
Investor Service Representative will, as always, be more than happy to assist
you. For 24 hour automated services, call toll-free 1-888-503-VOICE (8642) or
visit our website at www.midasfunds.com, where you can access your account
online, purchase and redeem shares, and exchange between Midas Funds.
Thank you for investing with Midas - we look forward to serving your
financial needs over the months and years ahead.
Sincerely,
/S/ THOMAS B. WINMILL
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THOMAS B. WINMILL
President
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FUND INVESTMENT OBJECTIVE
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MIDAS MAGIC Seeks its objective of long term capital
appreciation by investing primarily in equity
securities that, in the opinion of the Investment
Manager, are available at prices less than their
intrinsic value.
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MIDAS FUND Seeks primarily capital appreciation and protection
against inflation and secondarily current income.
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MIDAS Seeks long term capital appreciation in investments
INVESTORS with the potential to provide a hedge against
inflation and preserve the purchasing power of the
dollar.
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MIDAS U.S. AND Invests worldwide for the highest possible total
OVERSEAS FUND return.
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MIDAS SPECIAL Invests aggressively for maximum capital
EQUITIES FUND appreciation.
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DOLLAR A high quality money market fund investing in U.S.
RESERVES Government securities.
Income is generally free from state taxes. Free,
unlimited check writing with only a $250 minimum per
check.
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2
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MIDAS MAGIC
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COMMENTARY
We are pleased to submit our Semi-Annual Report and to welcome those
shareholders who made their investment since our last Report.
Over the first half of the year equity markets initially rose, but ended
lower. For example, the Standard & Poor's 500 Stock Index was off 2.66% in the
second quarter and closed the six month period down 0.43%; the Dow Jones
Industrial Average was off 3.99% in the second quarter to close the period down
8.48%; the Russell 2000 small company index was off 3.78% in the second quarter
and closed the six months down 3.03%; and Midas Magic was off 15.83% in the
second quarter and down 17.15% for the period - any decline by the Fund was
disappointing in light of its total return gain of +70.58% for 1999. For the
past year and a half the Fund achieved a total return gain of +41.32%, well
ahead of these broad market averages - for the period the S&P 500 had a total
return of +20.52%; the DJIA, +16.42%; and the Russell 2000, +24.94%.
In terms of strategy, the Fund continues to follow an approach that
combines investment in common stocks of selected rapidly growing companies, and
patiently adopting a defensive strategy when those securities appeared
overpriced, or vulnerable to an overall market decline.
In devising a strategy for 2000, we focused on what seemed to be the
driving factor for the financial markets: liquidity. Strong investor preference
for trading liquidity was leading to huge daily volumes, volatility, and
increasingly narrower breadth - the number of stocks moving up on a day the
indexes rose. Liquidity itself appeared to have increased by growth in the money
supply and borrowing, such as consumer, margin, and corporate debt, even as the
Federal Reserve had hiked its Fed Funds target rate numerous times in the prior
twelve months and U.S. Government debt buyback programs were under
consideration. Financial assets as a percentage of Gross National Product
continued toward record highs. Breadth continued to narrow as fewer and fewer
stocks were responsible for more and more for the gains in the stock market.
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PORTFOLIO INFORMATION
AS OF JUNE 30, 2000
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TOP 10 HOLDINGS:
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1 Telefonos de Mexico S.A. ADR
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2 Nokia Oyj ADR
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3 Oracle Corp.
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4 Motorola, Inc.
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5 The News Corporation Limited ADR
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6 Telefonaktiebolaget LM Ericsson ADR
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7 Sun Microsystems, Inc.
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8 Citigroup Inc.
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9 Corning Inc.
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10 General Electric Company
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TOP 3 SECTORS:
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1 Communications Equipment
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2 Radio Telephone Communication
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3 Services - Prepacked Software
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3
<PAGE>
Our market timing response was to reallocate the Fund's assets into those
industry leading stocks at the forefront of market breadth. Our conclusion was
that market gains, if any, would be found in that diminishing universe of stocks
and we carefully selected a blue chip blend appealing to investing proponents of
both "new economy" and "old economy" stocks. Accordingly, we bought stocks
including General Electric, Oracle and Corning, and sold other less favored
stocks such as Garden.com and Internet Capital Group. In addition, to take
advantage of market volatility we employed strategies with futures on certain
stock indexes. While we believe our conclusions were sound, our timing was off.
Market breadth continued to narrow - then abruptly collapsed in March and April
before we fully readjusted the Fund's portfolio. At the moment, we anticipate
even greater volatility as the market searches for new sector and stock
leadership. The potential for a retracement by the indexes to lower levels in
the meantime is high, and the Fund is positioned defensively.
As overall market conditions stabilize or show improvement, the Fund will
continue to seek out the common stocks of companies with a positive or improving
outlook for earnings or revenues due to changes unique to the company. In
addition to such special situations, the Fund will seek to invest in companies
whose stock is benefiting from upward price momentum.
As discussed above and in our prior letters, the Fund may aggressively use
market timing and short term trading strategies involving leverage, futures,
options, and short selling to seek its capital appreciation objective. Since
these strategies may result in more taxable distributions, we believe the Fund
is particularly appropriate for tax exempt and tax deferred plans, such as the
Midas Traditional, Roth, or Education IRAs.
We appreciate your confidence and look forward to continuing to discover
opportunities for above average capital appreciation on your behalf.
4
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MIDAS FUND & MIDAS INVESTORS
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COMMENTARY
It is a pleasure to report to shareholders of Midas Fund and Midas
Investors in this our first combined Semi-Annual Report, made possible by the
fact that they share a precious metals focus. For both Funds, we seek quality,
low cost, profitable producing companies that will provide meaningful
participation in any future gold price appreciation. Midas Fund's focus is more
broad, however, and is intended to include other natural resource companies with
the potential for superior returns as well.
Gold prices held steady during the first quarter of the year, averaging
about $290 per ounce, before falling in the second quarter to an average of $280
per ounce. Gold mining shares, in marked contrast, generally performed better in
the second quarter than in the first. Our basic investment strategy - seeking
the best performance from among the largest, lowest cost producers and avoiding
smaller companies struggling to maintain profit margins and investor interest -
was vindicated. Prices of shares of the larger diversified mining companies,
however, suffered due to investor disappointment after a sharp run-up at the end
of 1999. With their emphasis on such large global and South African based
companies, Midas Fund and Midas Investors finished the six months ended June 30,
2000 with negative returns of 29.41% and 20.00%, respectively. Interestingly,
while in the second quarter the Nasdaq Composite Index declined -13.27%, Midas
Fund and Midas Investors had total returns of -7.69% and +0.95%, respectively.
The biggest position in both Funds at December 31, 1999 and June 30, 2000,
Barrick Gold, managed a 2.83% gain.
During the first half of 2000, gold prices spiked and retreated in
moderation with gratifying consistency in the face of potential weakness in
other sectors of the financial markets. When the U.S. dollar showed weakness and
when the interest rate, inflation, and hard/soft landing debate resurfaced,
general equity markets retreated and gold shares out performed. Gold prices
recovered also during intermittent squeezes of gold short selling speculators,
such as in February and May/June. So far, however, lease rates for gold held by
central banks have remained low, hindering gold from establishing price levels
at higher plateaus. Silver prices held firm in the $5.00 per ounce range during
a relatively quiet period. Platinum and palladium prices were higher in the
first half, however, on increasing auto-catalytic converter and jewelry demand,
muted worldwide production, and rising uncertainties regarding Russian supplies.
MIDAS FUND
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PORTFOLIO INFORMATION
AS OF JUNE 30, 2000
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TOP 10 HOLDINGS:
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1 Barrick Gold Corporation
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2 Meridian Gold Inc.
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3 Homestake Mining Company
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4 AngloGold Limited ADR
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5 The Broken Hill Proprietary Company Limited
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6 Newmont Mining Corporation
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7 Golden Cycle Gold Corporation
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8 De Beers Consolidated Mines Ltd. ADR
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9 Franko-Nevada Mining Corporation Ltd.
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10 Gold Fields Limited ADR
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TOP 5 COUNTRIES:
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1 United States
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2 Canada
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3 South Africa
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4 United Kingdom
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5 Australia
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5
<PAGE>
Corporate merger and acquisition activity surged in the first half of the
year. Based on the compelling economies of scale in larger operations, greater
operating scope, and liquidity, we expect to see many more of these transactions
take place in the future.
Meanwhile inflation, as presaged by a long term high in the CRB Index and
energy, is being subtly powered by the growth rate in the Federal Reserve Bank's
Adjusted Monetary Base. In fact, the latest economic numbers show a sharp rise
in inflation: the Consumer Price Index jumped 0.6% in June, suggesting we may be
witnessing a reverse in the long downtrend of inflation from the mid-teens in
the 1980's to 2% last year. Perhaps a contrary indicator, the most recent Bank
of England auction of gold on July 12 resulted in the sale of 25 tons at a price
that was $3.10 below the then prevailing spot price and was only 1.3 times
oversubscribed. That auction, incidentally, is one of a bi-monthly series being
held by the Bank of England to reduce its gold reserves to 300 tons from 715
tons by 2004.
Looking ahead, we see a solid fundamental base forming for gold with
attractive potential upside. Currently, as evidenced by the recent merger
activity, few producing companies can generate investment returns at current
market prices for gold. Likewise, most development projects require higher gold
prices to ensure viability and access to capital for small gold mining companies
is virtually nonexistent. Even if gold prices were to rise to higher levels,
reactivation of existing shuttered mines would require a lengthy lead time.
Meanwhile, the other major supply uncertainty - central bank selling - has been
abated by the September 1999 agreement among European central banks to limit
sales of gold from reserves to a maximum of 2,000 tons over the next five years.
The third supply factor, producer and speculator forward and short selling is,
we believe, the wild card. Inflationary pressures arising out of the excessive
domestic money supply, accompanied by U.S. dollar weakness, together with
general equity market pricing excesses, could cause a market shock leading to
positive gold price gains. With price-dampening forward and short selling
already amounting to two to three years worth of world mine production, a major
gold rally is a real possibility for which long term gold investors would be
rewarded. Investors should remember that during the last 17 years, while the
price of gold has declined overall, huge rallies, genuine gold share bull
markets, have occurred regularly, some of which have lasted 18 months with gains
over 160% (1986 to late 1987). The 1989 to 1990 rally represented an approximate
50% move; 1992 to 1994 was over 100%; in 1995 to 1996, the rally peaked up about
50%.
In any event, even in the midst of ever changing investor sentiment,
macroeconomic developments, and market volatility, Midas Fund and Midas
Investors will continue to seek the best companies worldwide with superior
management, projects, and finances to deliver long term performance to our
investors.
MIDAS INVESTORS
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PORTFOLIO INFORMATION
AS OF JUNE 30, 2000
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TOP 10 HOLDINGS:
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1 Barrick Gold Corporation
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2 Golden Cycle Gold Corporation
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3 Dallas Gold and Silver Exchange, Inc.
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4 Franco-Nevada Mining Corporation, Ltd.
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5 AngloGold Limited ADR
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6 Goldcorp. Inc. Class A
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7 Homestake Mining Company
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8 Meridian Gold Inc.
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9 WMC Limited ADR
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10 Gold Fields Limited ADR
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TOP 5 COUNTRIES:
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1 United States
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2 Canada
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3 South Africa
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4 Australia
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5 Peru
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6
<PAGE>
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MIDAS U.S. AND OVERSEAS FUND
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COMMENTARY
It is a pleasure to welcome our new shareholders who have joined the Fund
since our last Report, having been attracted to the Fund by its objective of
seeking to obtain the highest possible total return for its shareholders from
long term growth of capital and income.
Financial markets were characterized by high levels of volatility during
the first half of the year as the Federal Reserve, in seeking to slow the
economy and reduce inflationary pressures, raised its Federal Funds rate target
to 6.50%.
Reflecting in part the Fed's tightening mode over the six months, the U.S.
dollar rose by 3.52% versus the Yen, and gained 5.34% against the Euro, in each
case inhibiting results in dollar terms from local currency investments in
Japanese and European securities. For the period the Morningstar World Stock
Fund category declined 0.49% and the Morgan Stanley Capital International World
ND index was off 2.56%. For the six months, the Fund had a negative total return
of 29.75%. While virtually all of this decline was limited to the second quarter
alone, when the Fund had a negative total return of 26.47%, results were
disappointing following last year's total return gain of +47.44%
In the United States, signs are growing that the rapid pace of economic
growth has eased substantially. It is not clear, however, that the slowdown will
continue since the rise in personal income and high levels of consumer
confidence are not consistent with a reduction in economic activity.
We are impressed with the building strength of European economies, and are
optimistic about the new Euro currency. In contrast, we view the Japanese market
with some scepticism due to the lack of progress in structural reforms. In
general, Central and South America are improving and offer selective
opportunities for capital appreciation, as do emerging markets overall, despite
liquidity and pricing concerns.
We believe the Fund is attractively positioned for the volatile but
selectively rising markets we see over the balance of the year.
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PORTFOLIO INFORMATION
AS OF JUNE 30, 2000
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TOP 10 HOLDINGS:
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1 Nokia Oyj ADR
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2 Oracle Corp.
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3 Motorola, Inc.
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4 Corning Inc.
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5 Telefonaktiebolaget LM Ericsson ADR
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6 Sun Microsystems, Inc.
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7 Telefonos de Mexico S.A. ADR
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8 China Telecom (Hong Kong) Limited ADR
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9 Cisco Systems, Inc.
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10 Texas Instruments Inc.
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TOP 5 COUNTRIES:
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1 United States
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2 Finland
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3 Sweden
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4 Mexico
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5 Hong Kong
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7
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MIDAS SPECIAL EQUITIES FUND
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COMMENTARY
It is a pleasure to submit this Semi-Annual Report for Midas Special
Equities Fund and to welcome our new shareholders who were attracted to the
Fund's aggressive investment approach and who have made their investment since
our last Report.
REVIEW AND OUTLOOK
During the first half of the year, financial markets were characterized by
high levels of volatility, with many noteworthy price trends emerging and
reversing over the period. The Federal Reserve raised its Federal Funds rate
target by one percentage point to 6.50% over the first half of the year,
continuing a trend that began in June 1998, when the rate was at 4.75%. Notably,
after their May 16 meeting, the target was increased by 0.50%, an aggressive
departure from the 0.25% increments that have characterized the tightening
moves. With the Fed raising rates and concern about the impact on corporate
earnings, equity markets, by and large, initially rose and then ended lower by
mid-year. Although the small company Russell 2000 recorded a gain for the
period, the Dow Jones Industrial Average lost 8.48%, the Standard & Poor's 500
Stock Index slipped 0.43% and the Nasdaq Composite Index dropped 2.54%. For the
six months the Fund showed a decline of 12.8%, a disappointing result following
last year's gain of 30.50%. We believe the Fund is well positioned for market
conditions over the balance of the year, and shows a gain since mid-year.
The current economic environment is characterized by strong growth, low
unemployment, low but rising inflation, a large and growing budget surplus, and
a record high trade deficit. Fed policy is driven by an attempt to raise
interest rates by enough to prevent excess demand to increase inflationary
pressures. Financial markets are highly volatile, reflecting the strong, but
conflicting influences affecting market sentiment. On the one hand, the Fed is
seeking to reduce demand by raising the Fed Funds rate; yet, this interest rate
has become a less meaningful tool for adjusting monetary conditions in recent
years - demand, reflecting the "wealth effect" of the strong stock market over
the past five years and from overseas recoveries is not directly affected by
monetary policy. Further, the budget surplus has caused a decline in longer term
yields. On the other hand, increases in productivity, new technology, U.S.
Government budget surpluses, and other factors keep inflation low, despite high
levels of growth. The possibility of a so-called "new
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PORTFOLIO INFORMATION
AS OF JUNE 30, 2000
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TOP 10 HOLDINGS:
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1 Motorola, Inc.
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2 Corning Inc.
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3 American International Group, Inc.
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4 Schering-Plough Corp.
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5 Morgan Stanley Dean Witter & Co.
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6 Philip Morris Companies Inc.
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7 Citigroup Inc.
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8 Intel Corp.
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9 Lucent Technologies Inc.
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10 Berkshire Hathaway Inc. Class B
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TOP 3 SECTORS:
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1 Fire, Marine & Casualty Insurance
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2 Semiconductors & Related Devices
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3 Communications Equipment
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8
<PAGE>
economy," where growth can persist at high levels without igniting inflation,
has been recognized by some market participants, but not embraced by the Fed.
As to the period ahead, it is tempting to conclude that the Fed's raising
of interest rates has begun to bear fruit. Recent data suggest the torrid pace
of economic growth has abated. The unemployment rate has increased from a low of
3.9% to 4.1%, weekly jobless claims have risen, retail sales have slowed, and
interest sensitive sectors, such as housing and auto sales, have softened.
Second quarter GDP growth should be around, or more than 5%, down from more than
6% over the past three quarters. It is not clear that this slowdown will
continue, or that it was due to the Fed's 1.75 percentage points tightening over
the past year. It is likely that some of the slowing is related to demand being
satiated in prior quarters, warm weather, and normal random variation. The
slowdown in retail sales this spring coincided with high income tax payments.
The rise in personal income and high levels of consumer confidence, however, are
not consistent with a slowdown. In any event, we do not believe the Fed has done
enough to cause a slowdown. Excluding the monetary easing to prevent a systemic
crisis in the fall of 1998, the Fed has only tightened by one percentage point.
The year over year rate of inflation has increased by between 2% and 4% since
then, so "real" Fed Funds are actually easier now than when the tightening
began. Moreover, recognizing the reduced role of the Fed Funds rate in
determining monetary conditions, a more comprehensive analysis suggests that
overall monetary conditions are no tighter now than they were a year ago.
Although the Fed Funds rate recently has been left unchanged, the Fed will
certainly resume interest rate hikes should economic growth re-accelerate or the
rate of inflation increase later in the year.
TECHNIQUES AND STRATEGIES
The Fund has broad flexibility built into its capital appreciation
investment policies. It may invest in special situations, reorganizations, value
companies, growth companies, in small, mid-cap or large cap companies, any of
which may be in any industry or in any country, and may have a long or limited
business history. The Fund may also make aggressive and speculative investments,
such as options, futures, and forward currency contracts and other derivatives,
leverage by borrowing money for investment purposes, and short selling. The Fund
may also take temporary defensive positions under adverse market conditions by
investing some or all of its assets in cash and cash equivalents.
We expect securities markets to continue to be volatile through the balance
of the year. The Fund has the flexibility to adapt and attempt to obtain long
term capital appreciation for its shareholders from shifting market trends. We
appreciate your support and look forward to continuing to discover opportunities
for above average capital appreciation on your behalf.
9
<PAGE>
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DOLLAR RESERVES
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COMMENTARY
It is a pleasure to report on the Fund's investment strategy for seeking
its objective of maximizing yield for shareholders, consistent with preservation
of capital and maintenance of liquidity, through U.S. Government and agency
money market securities. A sound choice for safety conscious investors, the Fund
pursues an all-weather approach of investing exclusively in short term U.S.
Government securities, a portion of the income from which is generally free from
state income and personal property taxes. We are pleased to note how many
shareholders are taking advantage of the Fund's added convenience of free,
unlimited check writing with no charge for your personalized checks.
REVIEW AND OUTLOOK
During the first half of 2000 the Federal Reserve raised its Federal Funds
rate target by one percentage point to 6.5%. The Fed's increase continued a
trend that began in June 1998, when the rate was 4.75%. Notably, after the May
16, 2000 Fed meeting, the target was increased by 0.50%, an aggressive departure
from the 0.25% increments that have characterized the Fed's tightening moves
thus far.
As we had anticipated, yields on short term government securities also rose
during this period, but with some interesting disparities. Yields on three month
U.S. Government agency securities, in which the Fund routinely invests, rose in
an orderly, linear manner from 5.8% to 6.6% over the course of the year's first
half, capturing most of the increase in the Fed Funds target rate. In contrast
three month Treasury bills rose only 0.52% over the same period, from 5.33% to
5.85%, and this smaller increase in yield was accompanied by much greater
volatility. For example, Treasury bill yields rose to as high as 6.2% and fell
to as low as 5.6% in the month of May alone.
We believe that a much smaller increase in Treasury bill yields relative to
other money market assets can be explained by the reduction of the supply of
Government securities caused by the Federal budget surplus. It is likely that
future budget surplus estimates will be increased, resulting in general in
greater premiums for Treasury securities relative to other debt assets. At this
time, the short term Government agency securities in which the Fund invests
offer a greater yield advantage over Treasuries than has typically been
available in the past. We seek to exploit these higher yields oportunistically,
since they are not due to any tangible change in current credit worthiness or
reduction in Federal Government support.
As a result, the Fund was successful in achieving a 21.72% increase in its
effective yield to 5.66% at the end of the six month period, and since June 30
has FURTHER INCREASED TO 6.11% AT THIS WRITING.
Effective Yield as of
June 30, 2000 5.66%
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Effective Yield as of
December 31, 1999 4.65%
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Percent Increase 21.72%
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Looking ahead, it is tempting to conclude that the Fed's raising of
interest rates has begun to bear fruit with recent data suggesting the torrid
pace of economic growth has abated t. For example, the unemployment rate has
increased from a low of 3.9% to 4.1%, weekly jobless claims have risen, retail
sales have slowed, and interest sensitive sectors, such as housing and auto
sales, have softened. Second quarter GDP growth should be around, or more than
5%, down from more than 6% over the past three quarters. It is not clear that
this slowdown will continue, or that it was due to the Fed's 1.75% tightening
over the past year.
10
<PAGE>
It is likely that some of the slowing is related to demand being satiated
in prior quarters, plus warm weather, and normal random variation. The slowdown
in retail sales coincides with high tax payments this spring. Other
observations, however, such as the rise in personal income, and high levels of
consumer confidence, are not consistent with a slowdown. In any event, we do not
believe the Fed has done enough to cause a slowdown. Excluding the monetary
easing to prevent a systemic crisis in the fall of 1998, the Fed has only
tightened by 1%. The year over year rate of inflation has increased by between
2% and 4% since then, so "real" Fed Funds are actually easier now than when the
tightening began. Finally, the Fed Funds rate is only one factor in determining
monetary conditions, and its significance has become reduced over time. A more
comprehensive analysis suggests that overall monetary conditions are no tighter
now than they were a year ago.
Although the Fed Funds rate was left unchanged at their most recent
meeting, the Fed will certainly resume interest rate hikes should economic
growth re-accelerate or the rate of inflation increase later in the year.
As mentioned above, increases in the budget surplus should exert some
upward pressure on bond prices. Additionally, demographics and volatility in
equity markets should increase demand for fixed income securities.
Ultimately, a resolution of the economy's slowing will require more data.
The Fund's duration was extended late in the second quarter as the likelihood of
near term, large magnitude rate increases diminished, and reversing the
extremely short, defensive posture that had been so successful over the past
year and a half. The recent increase in yields on floating rate agency
securities has prompted a small increase in exposure to those assets as well. We
will continue to mine both markets and economic data in seeking to have you
benefit from the most rewarding securities, driven by the best strategies we can
devise.
11
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<TABLE>
<CAPTION>
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MIDAS MAGIC, INC.
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SCHEDULE OF PORTFOLIO INVESTMENTS - JUNE 30, 2000 (UNAUDITED)
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SHARES COMMON STOCKS (100.00%) MARKET VALUE
-----------------------------------------------------------------------------------------------
<S> <C> <C>
COMMUNICATIONS EQUIPMENT (20.16%)
1,800 Motorola, Inc. $ 52,313
1,600 Nokia Oyj ADR 79,900
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132,213
COMPUTER COMMUNICATIONS EQUIPMENT (4.85%)
500 Cisco Systems, Inc.* 31,781
COMPUTEr & OFFICE EQUIPMENT (5.01%)
300 International Business Machines Corp. 32,869
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT (6.06%)
750 General Electric Co. 39,750
ELECTRONIC COMPUTERS (6.93%)
500 Sun Microsystems, Inc.* 45,469
GLASS, GLASSWEAR, PRESSED OR BLOWN (6.17%)
150 Corning Inc. 40,481
NATIONAL COMMERCIAL BANKS (6.43%)
700 Citigroup Inc. 42,175
NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING (7.48%)
900 The News Corporation Limited ADR 49,050
PHARMACEUTICAL PREPARATIONS (4.02%)
550 Pfizer Inc. 26,400
RADIOTELEPHONE COMMUNICATIONS (10.48%)
2,400 Telefonaktiebolaget LM Ericsson ADR 48,000
500 Vodafone AirTouch PLCADR 20,719
--------
68,719
RAILROADS, LINE-HAUL OPERATING (4.06%)
300 Kansas City Southern Industries, Inc. 26,606
SAVINGS INSTITUTION, FEDERALLY CHARTERED (.37%)
3,890 Security Investments Group, Inc.* 2,431
SERVICES-BUSINESS SERVICES (.01%)
10 Opus360 Corp.* 37
SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN (3.78%)
200 Yahoo! Inc.* 24,781
SERVICES-PREPACKAGED SOFTWARE (8.97%)
700 Oracle Corp.* 58,844
TELEPHONE COMMUNICATIONS (5.22%)
600 Telefonos de Mexico S.A. ADR 34,275
--------
Total Investments (cost: $614,128) (100.00%) $655,881
-----------------------------------------------------------------------------------------------
</TABLE>
*Indicates non-income producing security.
12
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
MIDAS FUND, INC.
-----------------------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS - JUNE 30, 2000 (UNAUDITED)
-----------------------------------------------------------------------------------------------
SHARES COMMON STOCKS AND WARRANTS (98.91%) MARKET VALUE
-----------------------------------------------------------------------------------------------
<S> <C> <C>
PRECIOUS METALS AND RESOURCES (91.66%)
12,000 Anglo American plc ADR $ 571,125
20,000 Anglo American Platinum Corporation Limited 576,401
100,000 AngloGold Limited ADR 2,056,250
500,000 Barrick Gold Corp. 9,093,750
250,000 Battle Mountain Gold Co.* 546,875
85,000 The Broken Hill Proprietary Company Limited 2,018,750
75,000 De Beers Consolidated Mines Ltd. ADR 1,821,094
150,000 Franco-Nevada Mining Corp. Ltd. 1,732,055
125,000 Freeport-McMoRan Copper &Gold, Inc. Class A* 1,140,625
150,000 Freeport-McMoRan Copper &Gold, Inc. Class B* 1,387,500
300,000 Glamis Gold Ltd.* 581,250
328,900 Golden Cycle Gold Corp.* 1,911,731
400,000 Gold Fields Limited 1,575,000
200,000 Gold Fields Limited ADR 781,250
100,000 Harmony Gold Mining Company Limited ADR 556,250
300,000 Homestake Mining Company 2,062,500
250,000 IAMGOLD Corp.* 514,890
946,000 Kinross Gold Corp.* 843,217
600,000 Lyon Lake Mines Ltd. Units* 56,722
650,000 Meridian Gold Inc.* 3,950,300
200,000 Newcrest Mining Limited* 538,335
90,000 Newmont Mining Corp. 1,946,250
804,000 Pasminco Limited 428,012
200,000 Randgold Resources Ltd.* 750,000
1,567,000 Rio Narcea Gold Mines Ltd.* 1,312,094
20,000 Rio Tinto plc ADR 1,305,000
680,000 St. Genevieve Resources Ltd.* 9,184
16,000 Stillwater Mining Company* 446,000
73,000 Teck Corp. Class B 497,873
-------------
41,010,283
PRECIOUS METALS AND RESOURCES RELATED (8.34%)
101,000 Dynasty Motorcar Corporation* 91,731
20,000 El Paso Energy Corp. 1,018,750
20,000 Enron Corp. 1,290,000
32,000 Terex Corp. 452,000
134,000 USEC Inc. 619,750
14,000 Whitehall Jewellers, Inc.* 260,750
-------------
3,732,981
-------------
Total Investments (cost: $63,269,250) (100.00%) $44,743,264
------------------------------------------------------------------------------------------------
</TABLE>
*Indicates non-income producing security.
13
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
MIDAS INVESTORS LTD.
------------------------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS - JUNE 30, 2000 (UNAUDITED)
------------------------------------------------------------------------------------------------
SHARES COMMON STOCKS (95.95%) MARKET VALUE
------------------------------------------------------------------------------------------------
<S> <C> <C>
AUSTRALIA (7.12%)
34,000 Newcrest Mining Ltd.* $ 91,517
65,000 Normandy Mining Ltd. 34,992
60,000 Pasminco Ltd. 31,941
6,600 WMCLimited ADR 118,800
-------------
277,250
NORTH AMERICA (70.42%)
10,000 Agnico-Eagle Mines Ltd. 64,375
40,000 Barrick Gold Corp. 727,500
30,000 Battle Mountain Gold Co.* 65,625
40,000 Dallas Gold and Silver Exchange, Inc.* 300,000
15,000 Franco-Nevada Mining Corp. Ltd. 173,205
12,500 Freeport-McMoRanCopper &Gold, Inc. Class B* 115,625
35,000 Glamis Gold Ltd.* 67,812
69,500 Golden Cycle Gold Corp.* 403,969
19,200 Goldcorp. Inc. Class A* 138,000
20,000 Homestake Mining Company 137,500
30,000 IAMGOLDCorp.* 61,787
80,000 Kinross Gold Corp.* 71,308
20,000 Meridian Gold Inc.* 122,500
4,000 Newmont Mining Corp. 86,500
4,800 Placer Dome Inc. 45,900
3,000 Stillwater Mining Co.* 83,625
11,000 Teck Corp. Class B 75,022
-------------
2,740,253
PERU (2.67%)
6,000 Compania de Minas Buenaventura S.A. ADR 103,875
SOUTH AFRICA (13.27%)
1,500 Anglo American Platinum Corp. 43,230
8,000 AngloGold Limited ADR 164,500
4,000 De Beers Consolidated Mines Ltd. ADR 97,125
30,000 Gold Fields Limited ADR 117,188
17,000 Harmony Gold Mining Company Ltd. ADR 94,563
-------------
516,606
UNITED KINGDOM(2.45%)
2,000 Anglo American plc ADR 95,187
-----------------------------------------------------------------------------------------------
Total Common Stocks (cost:$4,427,578) 3,733,171
PAR VALUE SHORT-TERM INVESTMENTS (4.07%)
-----------------------------------------------------------------------------------------------
$158,196 State Street Bank&Trust Repurchase Agreement, 3.50%,
June 30, 2000, due July 3, 2000 (collateralized by $165,000
U.S. Treasury Notes 5.50%, due 1/31/03, market value
$165,206, proceeds at maturity: $158,242) 158,196
-------------
Total Short Term Investments (cost: $158,196) 158,196
-------------
Total Investments (cost: $4,585,774) (100.00%) $3,891,367
-----------------------------------------------------------------------------------------------
</TABLE>
*Indicates non-income producing security.
14
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
MIDAS U.S. AND OVERSEAS FUND LTD.
-----------------------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS - JUNE 30, 2000 (UNAUDITED)
-----------------------------------------------------------------------------------------------
SHARES COMMON STOCKS (100.00%) MARKET VALUE
-----------------------------------------------------------------------------------------------
<S> <C> <C>
FINLAND (13.99%)
COMMUNICATIONS EQUIPMENT
18,400 Nokia Oyj ADR $ 918,850
FRANCE (4.34%)
TELEPHONE COMMUNICATIONS
2,000 France Telecom S.A.ADR 285,000
GERMANY (3.71%)
TELEPHONE COMMUNICATIONS
4,300 Deutsche Telekom AGADR 244,025
HONG KONG (6.22%)
COMMUNICATION SERVICES
2,300 China Telecom (Hong Kong) Ltd. ADR* 408,969
MEXICO (6.26%)
TELEPHONE COMMUNICATIONS
7,200 Telefonos de Mexico S.A. ADR 411,300
SPAIN (4.19%)
TELEPHONE COMMUNICATIONS
4,300 Telefonica S.A. ADR 275,469
SWEDEN (8.04%)
RADIOTELEPHONE COMMUNICATIONS
26,400 Telefonaktiebolaget LM Ericsson ADR 528,000
UNITED KINGDOM (4.23%)
RADIOTELEPHONE COMMUNICATIONS
6,700 Vodafone AirTouch PLC ADR 277,631
UNITED STATES (49.02%)
COMMUNICATIONS EQUIPMENT (9.03%)
20,400 Motorola, Inc. 592,875
COMPUTER COMMUNICATIONS EQUIPMENT (5.61%)
5,800 Cisco Systems, Inc.* 368,662
ELECTRONIC COMPUTERS (7.34%)
5,300 Sun Microsystems, Inc.* 481,969
GLASS, GLASSWEAR, PRESSED OR BLOWN (8.22%)
2,000 Corning Inc. 539,750
RAILROADS, LINE-HAUL OPERATING (4.59%)
3,400 Kansas City Southern Industries, Inc. 301,538
SEMICONDUCTORS & Related Devices (5.02%)
4,800 Texas Instruments Inc. 329,700
SERVICES-PREPACKAGED SOFTWARE (9.21%)
7,200 Oracle Corp.* 605,250
----------
Total Investments (cost: $6,438,390) (100.00%) $6,568,988
-----------------------------------------------------------------------------------------------
</TABLE>
*Indicates non-income producing security.
15
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
MIDAS SPECIAL EQUITIES FUND, INC.
-----------------------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS - JUNE 30, 2000 (UNAUDITED)
-----------------------------------------------------------------------------------------------
SHARES COMMON STOCKS AND WARRANTS (87.75%) MARKET VALUE
-----------------------------------------------------------------------------------------------
<S> <C> <C>
AIR TRANSPORTATION, SCHEDULED (2.45%)
30,800 AMRCorp. $ 814,275
COMMUNICATIONS EQUIPMENT (8.33%)
95,400 Motorola, Inc. 2,772,563
COMPUTER & OFFICE EQUIPMENT (4.95%)
13,200 Hewlett-Packard Co. 1,648,350
FINANCE SERVICES (6.55%)
26,200 Morgan Stanley Dean Witter & Co. 2,181,150
FIRE, MARINE & CASUALTY INSURANCE (12.24%)
19,700 American International Group, Inc. 2,314,750
1,000 Berkshire Hathaway Inc. Class B* 1,760,000
-----------
4,074,750
FOOD & KINDRED PRODUCTS (6.34%)
79,400 Philip Morris Companies Inc. 2,109,063
GLASS, GLASSWEAR, PRESSED OR BLOWN (7.54%)
9,300 Corning Inc. 2,509,837
INSTRUMENTS FOR MEASURING & TESTING OF ELECTRICITY &
ELECTRICAL SIGNALS (1.12%)
5,034 Agilent Technologies, Inc.* 371,257
NATIONAL COMMERCIAL BANKS (6.19%)
34,200 Citigroup Inc. 2,060,550
NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING (2.57%)
35,000 The News Corporation Limited Preferred ADSWarrants* 853,720
PHARMACEUTICAL PREPARATIONS (6.75%)
44,500 Schering-Plough Corp. 2,247,250
RAILROADS, LINE-HAUL OPERATING (4.80%)
18,000 Kansas City Southern Industries, Inc. 1,596,375
SEMICONDUCTORS & RELATED DEVICES (10.53%)
14,700 Intel Corp. 1,965,206
22,400 Texas Instruments Inc. 1,538,600
-----------
3,503,806
SERVICES-COMPUTER PROCESSING & DATA PREPARATION (1.91%)
22,257 Sabre Holdings Corp.* 634,325
TELEPHONE COMMUNICATIONS (5.48%)
30,800 Lucent Technologies Inc. 1,824,900
-----------
Total Common Stocks and Warrants (cost: $25,008,289) 29,202,171
PAR VALUE SHORT-TERM INVESTMENTS (12.25%)
-----------------------------------------------------------------------------------------------
$4,075,004 State Street Bank & Trust Repurchase Agreement, 3.50%,
June 30, 2000, due July 3, 2000 (collateralized by $4,235,000
U.S. Treasury Notes, 5.625%, due 12/31/02, market value:
$4,160,888, proceeds at maturity $4,076,193) 4,075,004
-----------
Total Short Term Investments (cost: $4,075,004) 4,075,004
-----------
Total Investments (cost: $29,083,293) (100.00%) $33,277,175
-----------------------------------------------------------------------------------------------
</TABLE>
*Indicates non-income producing security.
16
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
DOLLAR RESERVES, INC.
-----------------------------------------------------------------------------------------------
SCHEDULE OF PORTFOLIO INVESTMENTS - JUNE 30, 2000 (UNAUDITED)
-----------------------------------------------------------------------------------------------
PAR VALUE U.S. GOVERNMENT AGENCIES (100.00%) YIELD* VALUE**
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$1,310,000 Federal Farm Credit, due 8/01/00 6.18% $ 1,309,100
500,000 Federal Farm Credit, due 10/02/00 6.25% 499,199
150,000 Federal Farm Credit, due 10/26/00 4.33% 148,775
500,000 Federal Home Loan Banks, due 7/05/00 6.00% 499,951
8,275,000 Federal Home Loan Banks, due 7/14/00 5.50% 8,272,470
3,000,000 Federal Home Loan Banks, due 7/31/00 6.23% 3,000,287
1,000,000 Federal Home Loan Banks, due 8/09/00 5.71% 998,836
1,000,000 Federal Home Loan Banks, due 9/08/00 5.20% 996,958
637,000 Federal Home Loan Banks, due 9/20/00 6.56% 627,598
300,000 Federal Home Loan Banks, due 10/13/00 5.92% 299,106
670,000 Federal Home Loan Banks, due 10/16/00 4.57% 665,626
290,000 Federal Home Loan Banks, due 11/03/00 6.05% 289,063
500,000 Federal Home Loan Banks, due 11/24/00 5.27% 496,925
200,000 Federal Home Loan Banks, due 12/01/00 5.00% 198,350
8,000,000 Federal Home Loan Banks, due 4/12/01 6.19% 8,000,000
4,000,000 Federal Home Loan Mortgage Corp., due 7/14/00 5.55% 3,998,851
1,500,000 Federal Home Loan Mortgage Corp., due 8/01/00 6.40% 1,499,290
575,000 Federal Home Loan Mortgage Corp., due 9/14/00 6.46% 567,262
280,000 Federal Home Loan Mortgage Corp., due 10/12/00 6.47% 274,817
1,071,000 Federal Home Loan Mortgage Corp., due 2/15/01 5.00% 1,058,386
3,500,000 Federal National Mortgage Assn., due 7/13/00 6.05% 3,492,942
2,440,000 Federal National Mortgage Assn., due 7/20/00 6.08% 2,432,170
4,500,000 Federal National Mortgage Assn., due 7/27/00 6.16% 4,480,034
500,000 Federal National Mortgage Assn., due 7/28/00 6.04% 497,735
100,000 Federal National Mortgage Assn., due 8/10/00 6.64% 99,280
441,000 Federal National Mortgage Assn., due 8/16/00 6.54% 437,315
875,000 Federal National Mortgage Assn., due 8/17/00 6.52% 867,552
1,500,000 Federal National Mortgage Assn., due 9/07/00 6.47% 1,481,668
500,000 Federal National Mortgage Assn., due 9/25/00 5.10% 498,015
210,000 Federal National Mortgage Assn., due 9/25/00 5.97% 209,562
120,000 Federal National Mortgage Assn., due 10/02/00 5.00% 119,433
250,000 Federal National Mortgage Assn., due 10/16/00 5.83% 249,261
234,000 Federal National Mortgage Assn., due 10/19/00 6.63% 229,353
1,000,000 Federal National Mortgage Assn., due 12/07/00 6.47% 971,424
1,000,000 Federal National Mortgage Assn., due 12/22/00 5.89% 995,124
228,000 Federal National Mortgage Assn., due 1/08/01 5.23% 225,951
260,000 Federal National Mortgage Assn., due 1/16/01 5.38% 257,780
475,000 Federal National Mortgage Assn., due 1/29/01 5.44% 470,829
3,815,000 Federal National Mortgage Assn., due 2/22/01 6.57% 3,804,772
3,000,000 Student Loan Marketing Assn., due 5/18/01 6.32% 3,002,727
-----------
Total Investments (100.00%) $58,523,777
* Represents annualized yield at date of purchase for discount
securities, or coupon for coupon-bearing securities.
** Cost of investments for financial reporting and for Federal
income tax purposes is the same as value.
</TABLE>
--------------------------------------------------------------------------------
17
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
MIDAS MIDAS
U.S. AND SPECIAL
MIDAS MIDAS MIDAS OVERSEAS EQUITIES DOLLAR
JUNE 30, 2000 (UNAUDITED) MAGIC FUND INVESTORS FUND FUND RESERVES
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at cost $614,128 $63,269,250 $4,585,774 $6,438,390 $29,083,293 $58,523,777
-----------------------------------------------------------------------------------------------------------------------------------
Investments at market value $655,881 $44,743,264 $3,891,367 $6,568,988 $33,277,175 $58,523,777
Cash 7,899 - - 1,007 7,369 1,932
Foreign currencies - - - - - -
Receivables:
Investment securities sold - 1,040,296 - - - -
Dividends - 30,796 1,540 4,091 44,040 -
Fund shares sold - 6,348 - - - 9,245
Interest - - - - - 806,192
Other assets 253 25,270 3,068 1,042 6,021 6,700
-----------------------------------------------------------------------------------------------------------------------------------
Total assets 664,033 45,845,974 3,895,975 6,575,128 33,334,605 59,347,846
===================================================================================================================================
LIABILITIES
Cash overdraft - 29,136 - - - -
Payables:
Dividends - - - - - 907
Demand notes payable to bank (note 5) 21,904 802,909 - 512,407 - -
Fund shares redeemed 996 - - - 3,336 15,059
Accrued expenses 7,812 98,071 48,946 36,575 56,033 51,617
Accrued management and distribution fees 16,879 38,699 3,304 5,262 28,197 12,397
-----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 47,591 968,815 52,250 554,244 87,566 79,980
===================================================================================================================================
NET ASSETS $616,442 $44,877,159 $3,843,725 $6,020,884 $33,247,039 $59,267,866
-----------------------------------------------------------------------------------------------------------------------------------
Shares outstanding, $0.01 par value 34,398 46,542,026 1,809,872 814,596 1,435,410 59,267,866
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE $17.92 $.96 $2.12 $7.39 $23.16 $1.00
At June 30, 2000, net assets
consisted of:
Paid-in capital $591,965 $256,730,270 $19,737,317 $4,758,877 $28,021,941 $59,264,110
Accumulated net realized gain (loss)
on investments (12,189) (192,634,449) (15,137,892) 1,244,609 1,355,681 3,756
Net unrealized appreciation (depreciation)
on investments 41,753 (18,525,986) (694,407) 130,598 4,193,882 -
Accumulated deficit in net investment income (5,087) (692,676) (61,293) (113,200) (324,465) -
-----------------------------------------------------------------------------------------------------------------------------------
$616,442 $44,877,159 $3,843,725 $6,020,884 $33,247,039 $59,267,866
===================================================================================================================================
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
MIDAS MIDAS
U.S. AND SPECIAL
MIDAS MIDAS MIDAS OVERSEAS EQUITIES DOLLAR
SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED) MAGIC FUND INVESTORS FUND FUND RESERVES
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 1,818 $ 295,998 $ 39,258 $ 20,165 $ 171,840 $ -
Foreign taxes withheld (107) (13,489) (1,773) (2,428) (1,090) -
Interest 1,619 23,206 2,874 7,876 108,836 1,924,312
-----------------------------------------------------------------------------------------------------------------------------------
Total investment income 3,330 305,715 40,359 25,613 279,586 1,924,312
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Distribution (note 3) 877 66,189 20,561 36,870 178,125 79,461
Investment management (note 3) 3,506 264,755 20,561 36,870 158,457 158,693
Interest (note 5) 878 107,117 2,969 28,013 104,055 3,604
Transfer agent 16,959 211,970 28,288 14,959 55,892 98,291
Custodian 2,496 63,186 3,232 13,881 31,422 26,306
Professional (note 3) 3,416 38,295 13,696 12,267 32,161 20,195
Registration (note 3) 5,136 59,836 13,470 10,622 20,764 21,441
Directors 180 7,778 4,715 599 5,236 5,236
Printing 5,496 22,438 4,310 4,787 2,992 9,972
Other 1,999 6,581 1,706 7,598 14,947 1,895
-----------------------------------------------------------------------------------------------------------------------------------
Total expenses 40,943 848,145 113,508 166,466 604,051 425,094
Expenses reimbursed (note 3) (32,526) - - - - -
Investment management and distribution
plan expenses waived (note 3) - - (15,420) (27,653) - (127,070)
Fee reduction (note 5) - (3,503) - - - (10,070)
-----------------------------------------------------------------------------------------------------------------------------------
Net expenses 8,417 844,642 98,088 138,813 604,051 287,954
-----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (5,087) (538,927) (57,729) (113,200) (324,465) 1,636,358
===================================================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS, FOREIGN CURRENCIES AND FUTURES
Net realized gain (loss) from
security transactions (12,189) (26,732,451) (706,665) 1,766,089 9,391,113 14,618
Net realized loss from foreign currency
and futures transactions - (5,820,544) (3,564) (846,943) (4,142,807) -
Unrealized appreciation (depreciation) of
investments during the period (122,220) 13,035,106 (219,872) (3,462,086) (10,073,510) -
-----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investments, foreign currencies
and futures (134,409) (19,517,889) (930,101) (2,542,940) (4,825,204) 14,618
===================================================================================================================================
Net increase (decrease) in net assets
resulting from operations $(139,496) $(20,056,816) $(987,830) $(2,656,140) $(5,149,669) $1,650,976
===================================================================================================================================
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
MIDAS MAGIC MIDAS FUND
--------------------------- ----------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
6/30/00 6/30/00
FOR THE YEARS ENDED (UNLESS OTHERWISE INDICATED) (UNAUDITED) 12/31/99 (UNAUDITED) 12/31/99
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income (loss) $ (5,087) $ 1,075 $ (538,927) $ (487,649)
Net realized gain (loss) from foreign currency
and futures transactions - 18,479 (5,820,544) 297,062
Net realized gain (loss) from security transactions (12,189) 77,645 (26,732,451) (103,922,952)
Unrealized appreciation (depreciation)
of investments and foreign currencies
during the period (122,220) 222,497 13,035,106 94,780,730
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations (139,496) 319,696 (20,056,816) (9,332,809)
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income - (1,300) - -
Distributions from net realized gains - (104,504) - -
Distributions in excess of net realized gains - - - -
Distributions from paid-in capital - - - -
CAPITAL SHARE TRANSACTIONS
Change in net assets resulting from capital
share transactions (a) (101,039) 94,929 (6,886,370) (6,688,244)
-----------------------------------------------------------------------------------------------------------------------------------
Total change in net assets (240,535) 308,821 (26,943,186) (16,021,053)
NET ASSETS
Beginning of period 856,977 548,156 71,820,345 87,841,398
-----------------------------------------------------------------------------------------------------------------------------------
End of period* $ 616,442 $ 856,977 $44,877,159 $ 71,820,345
===================================================================================================================================
*Includes accumulated deficit in net investment
income $ 5,087 $ - $ 692,676 $ -
===================================================================================================================================
(a) TRANSACTIONS IN CAPITAL SHARES WERE AS FOLLOWS:
VALUE
Shares sold $ 316,681 $ 580,609 $ 6,661,710 $ 31,700,935
Shares issued in reinvestment of distributions - 105,883 - -
Shares redeemed (417,720) (591,563) (13,548,080) (38,389,179)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) $(101,039) $ 94,929 $(6,886,370) $ (6,688,244)
NUMBER
Shares sold 15,832 30,673 6,094,207 22,242,244
Shares issued in reinvestment of distributions - 4,856 - -
Shares redeemed (21,054) (33,520) (12,551,495) (27,417,730)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (5,222) 2,009 (6,457,288) (5,175,486)
===================================================================================================================================
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
MIDAS INVESTORS MIDAS U.S. AND OVERSEAS FUND MIDAS SPECIAL EQUITIES FUND DOLLAR RESERVES
-------------------------- ---------------------------- -------------------------- ----------------------------
SIX MONTHS ENDED SIX MONTHS ENDED SIX MONTHS ENDED SIX MONTHS ENDED
6/30/00 6/30/00 6/30/00 6/30/00
(UNAUDITED) 12/31/99 (UNAUDITED) 12/31/99 (UNAUDITED) 12/31/99 (UNAUDITED) 12/31/99
--------------------------------------------------------------------------------------------------------------------------------
<S><C> <C> <C> <C> <C> <C> <C> <C>
$ (57,729) $(133,793) $ (113,200) $ (106,363) $ (324,465) $ (484,680) $ 1,636,358 $ 2,914,339
(3,564) 132,273 (846,943) 370,754 (4,142,807) 2,019,595 - -
(706,665) (1,964,342) 1,766,089 (20,342) 9,391,113 (1,493,400) 14,618 (5,449)
(219,872) 1,618,749 (3,462,086) 2,867,544 (10,073,510) 9,684,689 - -
--------------------------------------------------------------------------------------------------------------------------------
(987,830) (347,113) (2,656,140) 3,111,593 (5,149,669) 9,726,204 1,650,976 2,908,890
- - - - - - (1,636,358) (2,914,339)
- - - (31,369) - - - -
- - - - - - - -
- - - - - - - -
(213,547) (901,019) (1,203,899) (539,181) (3,232,213) (4,904,335) (4,997,140) (1,279,368)
--------------------------------------------------------------------------------------------------------------------------------
(1,201,377) (1,248,132) (3,860,039) 2,541,043 (8,381,882) 4,821,869 (4,982,522) (1,284,817)
5,045,102 6,293,234 9,880,923 7,339,880 41,628,921 36,807,052 64,250,388 65,535,205
--------------------------------------------------------------------------------------------------------------------------------
$ 3,843,725 $5,045,102 $ 6,020,884 $ 9,880,923 $ 33,247,039 $41,628,921 $ 59,267,866 $ 64,250,388
===================================================================================================================================
$ 61,293 $ - $ 113,200 $ - $ 324,465 $ - $ - $ -
===================================================================================================================================
$ 229,589 $ 710,909 $ 409,302 $ 967,721 $ 331,672 $ 1,609,739 $ 26,698,776 $ 60,416,438
- - - 28,577 - - 1,600,372 2,880,221
(443,136) (1,611,928) (1,613,201) (1,535,479) (3,563,885) (6,514,074) (33,296,288) (64,576,027)
--------------------------------------------------------------------------------------------------------------------------------
$ (213,547) $ (901,019) $(1,203,899) $(5,539,181) $ (3,232,213) $(4,904,335) $ (4,997,140) $ (1,279,368)
102,994 245,435 46,064 116,171 13,321 75,136 26,698,776 60,416,438
- - - 3,991 - - 1,600,372 2,880,221
(198,202) (572,749) (170,949) (205,037) (145,021) (317,290) (33,296,288) (64,576,027)
--------------------------------------------------------------------------------------------------------------------------------
(95,208) (327,314) (124,885) (84,875) (131,700) (242,154) (4,997,140) (1,279,368)
===================================================================================================================================
</TABLE>
21
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1 The Midas Funds ("Funds") are all Maryland corporations registered under
the Investment Company Act of 1940, as amended, as open-end non-diversified
management investment companies.
Midas Magic,Inc.'s investment objective is capital appreciation. The
Fund seeks capital appreciation by investing in equity securities,
securities convertible into common stocks, and preferred stocks. On March
4, 1998 the Board of Directors of the Fund approved a change in the fiscal
year end to December 31 from October 31.
Midas Fund, Inc.'s investment objectives are primarily capital
appreciation and protection against inflation and, secondarily, current
income. The Fund seeks to achieve these objectives by investing at least
65% of its total assets in (1) securities of companies primarily involved,
directly or indirectly, in the business of mining, processing, fabricating,
distributing or otherwise dealing in gold, silver, platinum or other
natural resources and (2) gold, silver and platinum bullion, as set forth
in its prospectus.
Midas Investors Ltd.'s investment objective is long term capital
appreciation. The Fund seeks to achieve its investment objective by
investing primarily in equity securities of companies involved directly or
indirectly in mining, processing or dealing in gold or other precious
metals and in gold, platinum and silver bullion, as set forth in its
prospectus. Income is the secondary objective. On March 4, 1998, the Board
of Directors of the Fund approved a change in the fiscal year end to
December 31 from June 30.
Midas U.S. and Overseas Fund Ltd.'s investment objective is to obtain
the highest possible total return on its assets from long term growth of
capital and from income principally through a portfolio of securities of
U.S. and overseas issuers.
Midas Special Equities Fund, Inc.'s investment objective is capital
appreciation. The Fund seeks capital appreciation by investing aggressively
in equity securities, warrants, convertible securities and debt
instruments.
Dollar Reserves, Inc.'s investment objective is to provide its
shareholders maximum current income consistent with preservation of capital
and maintenance of liquidity. The Fund invests exclusively in obligations
of the U.S. Government, its agencies and instrumentalities. On March 4,
1998, the Board of Directors of the Fund approved a change in the fiscal
year end to December 31 from June 30.
The following is a summary of significant accounting policies
consistently followed by each Fund in the preparation of its financial
statements. With respect to security valuation, investments in securities
traded on a national securities exchange, unless over-the-counter
quotations for such securities are believed to more closely reflect their
fair value, and securities traded on the Nasdaq National Market System
("NMS") are valued at the last reported sales price on the day the
valuations are made. Such securities that are not traded on a particular
day, securities traded in the over-the-counter market that are not on NMS,
and foreign securities are valued at the mean between the current bid and
asked prices. Securities of foreign issuers denominated in foreign
currencies are translated into U.S. dollars at prevailing exchange rates.
Futures and forward contracts are marked to market daily and the change in
market value is recorded by the Funds as an unrealized gain or
22
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
CONTINUED
--------------------------------------------------------------------------------
loss. When a contract is closed, a realized gain or loss is recorded by the
Funds equal tothe difference between the opening and closing value of the
contract. A Fund could be exposed to risk if the counterparties are unable
to meet the terms of the contracts. Debt obligations with remaining
maturities of 60 days or less are valued at cost adjusted for amortization
of premiums and accretion of discounts. Investment transactions are
accounted for on the trade date. Dividend income and distributions to
shareholders are recorded on the ex-dividend date and interest income is
recorded on the accrual basis.
In preparing financial statements in conformity with generally
accepted accounting principles, management makes estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
the financial statements, as well as the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
2 Each Fund intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all taxable income and net capital gains, if any, after
utilization of any capital loss carryforward, to shareholders and therefore
no Federal income tax provision is required.
Distributions from net realized gains, if any, are normally declared
and paid annually. Distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
capital loss carryforwards, post-October capital losses, net operating
losses and foreign currency transactions.
At December 31,1999, Midas Fund, Inc. had an unused capital loss
carryforward of approximately $128,264,500 of which $2,587,100,
$25,267,300, $12,176,100 and $88,234,000 expires in 2004, 2005, 2006 and
2007, respectively. At December 31, 1999, Midas Investors Ltd. had an
unused capital loss carryforward of approximately $14,431,200 of which
$3,474,200, $9,124,000 and $1,833,000 expires in 2005, 2006 and 2007
respectively. At December 31, 1999, Midas Special Equities Fund, Inc. had
an unused capital loss carryforward of approximately $3,892,600 which
expires in 2007. At December 31, 1999, Dollar Reserves, Inc. had an unused
capital loss carryforward of approximately $5,600 of which $5,200, $200 and
$200 expires in 2002, 2003 and 2007, respectively.
23
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
CONTINUED
--------------------------------------------------------------------------------
3 Effective June 30, 1999, the investment management agreement between Midas
Magic, Inc. and Rockwood Advisers, Inc. and the investment management
agreements between Bull & Bear Advisers, Inc. and Midas Special Equities
Fund, Inc., Midas U.S. and Overseas Fund Ltd., Midas Investors Ltd., and
Dollar Reserves, Inc. were transferred to Midas Management Corporation (the
"Investment Manager"). The terms of the investment management agreements,
other than the name of the investment manager, did not change.
Under the investment management agreements of Midas Magic, Inc. and
Midas Fund, Inc., the Investment Manager receives a management fee, payable
monthly, based on the average daily net assets of each Fund at the annual
rate of 1% on the first $200 million, .95% from $200 million to $400
million, .90% from $400 million to $600 million, .85% from $600 million to
$800 million, .80% from $800 million to $1 billion and .75% over $1
billion. The Investment Manager has contractually agreed to reimburse Midas
Magic, Inc. certain expenses in excess of 1.90% of average net assets until
May 1, 2000. Pursuant to such contract and voluntary reimbursements, the
Investment Manager reimbursed the Fund $32,526 for the six months ended
June 30, 2000. Pursuant to the investment management agreement for Midas
Fund, Inc., the Investment Manager retained Lion Resource Management
Limited (the "Subadviser") regarding portfolio investments. Pursuant to the
Subadvisory agreement, which terminated November 30, 1999, the Subadviser
advised and consulted with the Investment Manager regarding the selection,
clearing and safekeeping of the Fund's portfolio investments and assisted
in pricing and generally monitoring such investments. The Subadviser also
provided the Investment Manager with advice as to allocating the Fund's
portfolio assets among various countries, including the United States and
among equities, bullion and other types of investments, including
recommendations of specific investments. The Investment Manager, not the
Fund, paid the Subadviser monthly a percentage of the Investment Manager's
net fees based upon the Fund's performance and net assets.
Under the terms of the investment management agreements of Midas
Special Equities Fund, Inc., Midas U.S. and Overseas Fund Ltd., and Midas
Investors Ltd., the Investment Manager receives a management fee, payable
monthly, based on the average daily net assets of the Fund at the annual
rate of 1% on the first $10 million, 7/8 of 1% from $10 million to $30
million, 3/4 of 1% from $30 million to $150 million, 5/8 of 1% from $150
million to $500 million, and 1/2 of 1% over $500 million.
Under the terms of the investment management agreement of Dollar
Reserves, Inc., the Investment Manager receives a management fee, payable
monthly, based on the average daily net assets of the Fund, at the annual
rate of .50 of 1% of the first $250 million, .45 of 1% from $250 million to
$500 million, and .40 of 1% over $500 million. The Investment Manager
voluntarily waived $79,347 of its management fee for the six months ended
June 30, 2000.
24
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
CONTINUED
--------------------------------------------------------------------------------
Pursuant to the investment management agreements with each Fund, the
Investment Manager has agreed to waive all or part of its fee or reimburse
any Fund monthly if and to the extent the aggregate operating expenses of
the Fund exceed the most restrictive limit imposed by any state in which
shares of the Funds are qualified for sale, although currently the Funds
are not subject to any such limits. Each Fund has adopted a plan of
distribution pursuant to Rule 12b-1 under the 1940 Act. Under each Plan,
each Fund pays the Fund's Distributor, Investor Service Center, Inc., an
affiliate of the Investment Manager, a fee of .25% (Midas Magic, Inc.,
Midas Fund, Inc. and Dollar Reserves, Inc.) and 1.00% (Midas U.S. and
Overseas Fund Ltd., Midas Special Equities Fund, Inc. and Midas Investors
Ltd.) for distribution and shareholder services. The shareholder service
fee is intended to cover personal services provided to the shareholders of
the Funds and the maintenance of shareholder accounts. The distribution fee
is to cover all other activities and expenses primarily intended to result
in the sale of the Funds' share. For Midas U.S. and Overseas Fund Ltd., the
Distributor has made a partial contractual fee waiver that will continue
through May 1, 2001 and has waived $27,653 in distribution expenses for the
six months ended June 30, 2000. For Midas Investors Ltd., the Distributor
has made a partial contractual fee waiver that will continue through May 1,
2001 and has waived $15,420 in distribution expenses for the six months
ended June 30, 2000. For Dollar Reserves, Inc., the Distributor has
voluntarily waived $47,723 of its distribution fee for the six months ended
June 30, 2000.
Certain officers and directors of the Fund are officers and directors
of the Investment Manager and the Fund's Distributor. The Funds reimbursed
the Investment Manager $61,323 for providing certain administrative and
accounting services at cost during the six months ended June 30, 2000. In
addition, Dollar Reserves, Inc. and Midas Fund, Inc. paid the Distributor
$43,866 and $37,389, respectively, for payments made to certain brokers for
transfer agent services.
--------------------------------------------------------------------------------
4 At June 30, 2000, aggregate cost and net unrealized appreciation
(depreciation) of securities for federal income tax purposes were as
follows:
<TABLE>
<CAPTION>
FEDERAL INCOME GROSS UNREALIZED GROSS UNREALIZED NET APPRECIATION
JUNE 30, 2000 TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Midas Magic, Inc. $ 614,128 $ 79,901 $ 38,148 $ 41,753
Midas Fund, Inc. 63,269,250 1,814,380 20,340,366 (18,525,986)
Midas Investors Ltd. 4,585,774 244,440 938,847 (694,407)
Midas U.S. and Overseas Fund Ltd. 6,438,390 766,880 636,282 130,598
Midas Special Equities Fund, Inc. 29,083,293 5,255,067 1,061,185 4,193,882
</TABLE>
25
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
CONTINUED
--------------------------------------------------------------------------------
Purchases and sales of securities other than short term notes were as follows:
FOR THE SIX MONTHS ENDED PURCHASES PROOCEEDS FROM THE
JUNE 30, 2000 OF SECURITIES SALE OF SECURITIES
--------------------------------------------------------------------------------
Midas Magic, Inc. $ 859,854 $ 1,070,975
Midas Fund, Inc. 42,549,976 58,469,750
Midas Investors Ltd. 2,945,533 3,610,455
Midas U.S. and Overseas Fund Ltd. 13,221,168 16,678,860
Midas Special Equities Fund, Inc. 66,793,116 85,325,730
--------------------------------------------------------------------------------
5 The Funds have a committed bank line of credit at an interest rate equal to
the Federal Reserve Funds Rate plus 1.00 percentage point for leveraging
and/or temporary or emergency purposes. At June 30, 2000, the outstanding
balance, and for the six months ended June 30, 2000, the weighted average
interest rate and the weighted average amount outstanding were as follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED OUTSTANDING WEIGHTED AVERAGE WEIGHTED AVERAGE
JUNE 30, 2000 BALANCE INTEREST RATE AMOUNT OUTSTANDING
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Midas Magic, Inc. $ 21,904 6.94% $ 25,448
Midas Fund, Inc. 802,909 6.49% 3,137,417
Midas Investors Ltd. - 6.40% 99,923
Midas U.S. and Overseas Fund Ltd. 512,407 6.74% 817,567
Midas Special Equities Fund, Inc. - 6.65% 3,085,934
Dollar Reserves,Inc. - 6.40% 167,999
</TABLE>
The Funds participate in repurchase agreements with the Funds'
custodian. The custodian takes possession of the underlying collateral
securities which are valued daily to ensure that the fair market value,
including accrued interest is at least equal, at all times, to the
repurchase price. In the event of default of the obligation to repurchase,
the Funds have the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. Under certain circumstances, in the
event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral may be subject to legal
proceedings.
The Funds have entered into an arrangement with its transfer agent and
custodian whereby interest earned on uninvested cash balances was used to
offset a portion of the Funds' expenses. During the period, the Funds'
transfer agent fees and custodian fees were reduced by $10,245 and $3,328,
respectively, under such arrangements.
--------------------------------------------------------------------------------
26
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS - MIDAS MAGIC, INC.
------------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS TWO
ENDED YEAR MONTHS YEARS ENDED OCTOBER 31,
6/30/00 ENDED ENDED ---------------------------------------------
(UNAUDITED) 12/31/99 12/31/98 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA*
Net asset value at beginning of period $21.63 $14.57 $15.67 $24.92 $24.24 $18.73 $16.61
------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (.14) .03 (.04) (.25) (.59) (.56) (.31)
Net realized and unrealized gain (loss)
on investments (3.57) 10.28 .98 (7.20) 6.17 6.07 2.43
------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (3.71) 10.31 .94 (7.45) 5.58 5.51 2.12
------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income - (.03) - - - - -
Distributions from net realized gain on investments - (3.22) (2.04) (1.80) (4.90) - -
------------------------------------------------------------------------------------------------------------------------------------
Total distributions - (3.25) (2.04) (1.80) (4.90) - -
------------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $17.92 $21.63 $14.57 $15.67 $24.92 $24.24 $18.73
====================================================================================================================================
Total return (17.15)% 70.58% 6.48% (31.29)% 27.55% 29.42% 12.76%
====================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted) $616 $857 $548 $613 $1,771 $1,200 $774
====================================================================================================================================
Ratio of expenses to average net assets(a)(b) 2.41%** 2.40% 2.85%** 2.09% 2.81% 2.55% 2.30%
====================================================================================================================================
Ratio of net investment loss to average net assets (1.45)%** 0.18% (1.54)%** (1.38)% (2.65%) (2.23%) (1.77%)
====================================================================================================================================
Portfolio turnover rate 120.10% 357.71% 0% 207.02% 44.00% 42.48% 30.04%
====================================================================================================================================
</TABLE>
* Per share net investment income (loss) and net realized and unrealized gain
(loss) on investments have been computed using the average number of shares
outstanding. These computations had no effect on net asset value per share.
** Annualized.
(a) Ratio prior to reimbursement by the manager was 11.70%**, 12.44%, 18.84%**,
9.27%, 10.47%, 4.44%, and 3.00% for the six months ended June 30, 2000, the
year ended December 31, 1999, the two months ended December 31, 1998 and
the years ended October 31, 1998, 1997, 1996, and 1995, respectively.
(b) Ratio after custodian fee credits was 2.13% for the year ended December 31,
1999 and 1.97% for the year ended October 31, 1998. There were no custodian
fee credits for prior years.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS - MIDAS FUND, INC.
------------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEARS ENDED DECEMBER 31,
6/30/00 -----------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA*
Net asset value at beginning of period $1.36 $1.51 $2.11 $5.15 $4.25 $3.32
------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment loss (.01) (.01) - (.03) (.05) (.06)
Net realized and unrealized gain (loss) on investments (.39) (.14) (.60) (3.01) .95 1.28
------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (.40) (.15) (.60) (3.04) .90 1.22
------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net realized gain on investments - - - - - (.29)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $.96 $1.36 $1.51 $2.11 $5.15 $4.25
====================================================================================================================================
Total Return (29.41)% (9.93)% (28.44)% (59.03)% 21.22% 36.73%
====================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted) $44,877 $71,820 $87,841 $100,793 $200,457 $15,753
====================================================================================================================================
Ratio of expenses to average net assets (a)(b) 3.21%** 2.81% 2.33% 1.90% 1.63% 2.26%
====================================================================================================================================
Ratio of net investment loss to average net assets(c) (2.04)%** (.80)% (.02)% (.72)% (.92)% (1.47)%
====================================================================================================================================
Portfolio turnover rate 78% 74% 27% 50% 23% 48%
====================================================================================================================================
</TABLE>
* Per share net investment loss and net realized and unrealized gain (loss)
on investments have been computed using the average number of shares
outstanding. These computations had no effect on net asset value per share.
** Annualized.
(a) Ratio prior to reimbursement by the Investment Manager was 2.15%, 1.83%,
and 2.52% for the years ended December 31, 1997, 1996, and 1995,
respectively.
(b) Ratio after transfer agent and custodian credits was 3.20%**, 2.73%, 2.30%,
1.88%, 1.61% and 2.25% for the six months ended June 30, 2000 and for the
years ended December 31, 1999, 1998, 1997, 1996 and 1995, respectively.
(c) Ratio prior to reimbursement by the Investment Manager was (.97)%, (1.12)%,
and (1.73)% for the years ended December 31, 1997, 1996, and 1995,
respectively.
--------------------------------------------------------------------------------
27
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS - MIDAS INVESTORS, LTD.
------------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS SIX
ENDED YEAR MONTHS YEARS ENDED OCTOBER 31,
6/30/00 ENDED ENDED ---------------------------------------------
(UNAUDITED) 12/31/99 12/31/98 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA*
Net asset value at beginning of period $2.65 $2.82 $3.67 $7.14 $14.02 $13.13 $15.71
------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment loss (.03) (.06) (.04) (.12) (.25) (.22) -
Net realized and unrealized gain (loss)
on investments (.50) (.11) (.81) (2.94) (4.36) 2.72 (1.13)
------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (.53) (.17) (.85) (3.06) (4.61) 2.50 (1.13)
------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net realized gain on investments - - - (.41) (2.27) (1.61) (1.45)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $2.12 $2.65 $2.82 $3.67 $7.14 $14.02 $13.13
====================================================================================================================================
Total return (20.00)% (6.03)% (23.16)% (43.45)% (37.81)% 21.01% (8.01)%
====================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted) $3,844 $5,045 $6,293 $8,234 $15,217 $27,485 $29,007
====================================================================================================================================
Ratio of expenses to average net assets(a) (b) (c) 4.78%** 4.05% 4.32%** 3.88% 2.94% 3.05% 2.93%
====================================================================================================================================
Ratio of net investment income (loss) to
average net assets (2.81)%** (2.29)% (2.50)%** (2.40)% (2.06%) (1.61%) .01%
====================================================================================================================================
Portfolio turnover rate 73% 52% 36% 136% 37% 61% 158%
====================================================================================================================================
</TABLE>
* Per share net investment loss and net realized and unrealized gain (loss)
on investments have been computed using the average number of shares
outstanding. These computations had no effect on net asset value per share.
** Annualized.
(a) Ratios excluding interest expense were 4.63%**, 3.92%, 3.96%**, 3.57%,
2.77%, 2.93%, and 2.82% for the six months ended June 30, 2000, the year
ended December 31, 1999, the six months ending December 31, 1998 and the
years ending June 30, 1998, 1997, 1996 and 1995, respectively.
(b) Ratio after transfer agent and custodian credits was 3.80%, 4.30%** and
3.82% for the year ended December 31, 1999, the six months ending December
31, 1998 and the year ended June 30, 1998, respectively.
(c) Ratio prior to waiver by the Distributor was 5.53%** and 4.54% for the six
months ended June 30, 2000 and the year ended December 31, 1999.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS - MIDAS U.S. AND OVERSEAS FUND LTD.
------------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEARS ENDED DECEMBER 31,
6/30/00 -----------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA*
Net asset value at beginning of period $10.52 $7.17 $7.35 $7.91 $8.36 $7.08
------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment loss (.13) (.10) (.10) (.05) (.24) (.23)
Net realized and unrealized gain on investments (3.00) 3.49 .18 .46 .68 2.00
------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (3.13) 3.39 .08 .41 .44 1.77
------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net realized gain on investments - (.04) (.26) (.97) (.89) (.49)
------------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $7.39 $10.52 $7.17 $7.35 $7.91 $8.36
====================================================================================================================================
Total return (29.75)% 47.44% 1.18% 5.64 5.34% 25.11%
====================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted) $6,021 $9,881 $7,340 $8,446 $9,836 $9,808
====================================================================================================================================
Ratio of expenses to average net assets (a)(b)(c) 3.78%** 3.19% 3.33% 3.28% 3.20% 3.55%
====================================================================================================================================
Ratio of net investment loss to average net assets 3.08%** (1.52)% (1.38)% (0.63)% (2.74)% (2.85)%
====================================================================================================================================
Portfolio turnover rate 155% 174% 69% 205% 255% 214%
====================================================================================================================================
</TABLE>
* Per share net investment loss and net realized and unrealized gain on
investments have been computed using the average number of shares
outstanding.These computations had no effect on net asset value per share.
** Annualized.
(a) Ratio prior to reimbursement by the Investment Manager was 3.84% for the
year ended December 31, 1995.
(b) Ratio after the transfer agent and custodian fee credits was 3.16%, 3.22%
and 3.49% for 1999, 1997 and 1995, respectively. There were no custodian
credits for 1998 and 1996.
(c) Ratio prior to waiver by the Distributor was 4.53%** and 3.69% for the six
months ended June 30, 2000 and for the year ended December 31, 1999.
28
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS - MIDAS SPECIAL EQUITIES FUND, INC.
------------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEARS ENDED DECEMBER 31,
6/30/00 -----------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA*
Net asset value at beginning of period $26.56 $20.34 $23.38 $22.96 $25.42 $19.11
------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment loss (.22) (.27) (.61) (.38) (.73) (.81)
Net realized and unrealized gain (loss) on investments (3.18) 6.49 (.65) 1.55 .99 8.51
------------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (3.40) 6.22 (1.26) 1.17 .26 7.70
------------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net realized gain on investments - - (1.78) (.75) (2.72) (1.39)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value (3.40) 6.22 (3.04) .42 (2.46) 6.31
------------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $23.16 $26.56 $20.34 $23.38 $22.96 $25.42
====================================================================================================================================
Total return (12.80)% 30.6% (5.0)% 5.3% 1.0% 40.5%
====================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted) $33,247 $41,629 $36,807 $44,773 $49,840 $56,340
====================================================================================================================================
Ratio of expenses to average net assets(a)(b) 3.40%** 3.13% 3.42% 2.81% 2.92% 3.67%
====================================================================================================================================
Ratio of net investment loss to average net assets (1.82)%** (1.44)% (2.57)% (1.48)% (2.81%) (2.70%)
====================================================================================================================================
Portfolio turnover rate 172% 159% 97% 260% 311% 319%
====================================================================================================================================
</TABLE>
* Per share net investment loss and net realized and unrealized gain (loss)
on investments have been computed using the average number of shares
outstanding. These computations had no effect on net asset value per share.
** Annualized.
(a) Ratio excluding interest expense was 2.81%**, 2.71%, 2.63%, 2.53%, 2.45%,
and 2.88% for the six months ended June 30, 2000 and for the years ended
December 31, 1999, 1998, 1997, 1996 and 1995, respectively.
(b) Ratio after transfer agent and custodian fee credits was 3.04%, 3.41% and
2.79% for the year ended December 31, 1999, 1998 and 1997. There were no
custodian fee credits for 1996 and 1995.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS - DOLLAR RESERVES, INC.
------------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS SIX
ENDED YEAR MONTHS YEARS ENDED JUNE 30,
6/30/00 ENDED ENDED ---------------------------------------------
(UNAUDITED) 12/31/99 12/31/98 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net asset value at beginning of period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .026 .043 .022 .048 .047 .047 .044
Less distributions:
Distributions from net investment income (.026) (.043) (.022) (.047) (.047) (.047) (.044)
Distributions from paid-in capital - - - (.001) - - -
------------------------------------------------------------------------------------------------------------------------------------
Net asset value at end of period $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
====================================================================================================================================
Total return 5.27%** 4.38% 4.46%** 4.88% 4.83% 4.81% 4.53%
====================================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (000's omitted) $59,268 $64,250 $65,535 $61,602 $62,908 $62,467 $65,278
====================================================================================================================================
Ratio of expenses to average net assets(a)(c) .94%** .94% .93%** .86% .71% .90% .89%
====================================================================================================================================
Ratio of net investment income to
average net assets(b) 5.16%** 4.30% 4.43%** 4.71% 4.73% 4.70% 4.41%
====================================================================================================================================
</TABLE>
** Annualized.
(a) Ratio prior to waiver by the Investment Manager and Distributor was
1.31%**, 1.34%, 1.30%**, 1.20%, 1.21%, 1.40%, and 1.39% for the six months
ended June 30, 2000, the year ended December 31, 1999, the six months ended
December 31, 1998 and the years ended June 30, 1998, 1997, 1996 and 1995,
respectively.
(b) Ratio prior to waiver by the Investment Manager and Distributor was
4.76%**, 3.90%, 4.06%**, 4.37%, 4.23%, 4.20%, and 3.91% for the six months
ended June 30, 2000, the year ended December 31, 1999, the six months ended
December 31, 1998 and the years ended June 30, 1998, 1997, 1996 and 1995,
respectively.
(c) Ratio after transfer agent and custodian fee credits was 0.91%** for the
six months ended June 30, 2000.
29
<PAGE>
[LOGO]
MIDAS
FUNDS
ACCOUNT
APPLICATION
Use this Account Application to open a regular Midas account.
For a Midas IRA Application, call toll-free 1-800-400-MIDAS (6432) or access our
web site at www.midasfunds.com. Return this completed Account Application in the
enclosed envelope or mail to: MIDAS FUNDS, Box 219789, Kansas City, MO
64121-9789.
================================================================================
1. REGISTRATION (PLEASE PRINT) For assistance with this Application, please call
1-800-400-MIDAS (6432) 9a.m. - 5p.m. eastern time.
INDIVIDUAL:
-----------------------------------------------------------------------------
First Name Middle Initial Last Name Social Security Number
JOINT TENANT: Note: Registration will be Joint Tenants with Right of
Survivorship, unless otherwise specified.
-----------------------------------------------------------------------------
First Name Middle Initial Last Name Social Security Number
GIFT/TRANSFER TO A MINOR:
as Custodian for
-----------------------------------------------------------------------------
Name of Custodian (only one) Name of Minor (only one)
under the Uniform Gifts/Transfers to Minors Act.
-----------------------------------------------------------------------------
Custodian's State of Residence Minor's Social Security Number
-----------------------------------------------------------------------------
Minor's Date of Birth
CORPORATIONS, PARTNERSHIPS, TRUSTS AND OTHERS:
-----------------------------------------------------------------------------
Name of Corporation, Partnership, or other Organization
-----------------------------------------------------------------------------
Name of Individual(s) Authorized to Act for the Corporation, Partnership, or
other Organization
-----------------------------------------------------------------------------
Tax I.D. Number Name of Trustee(s) Date of Trust Instrument
================================================================================
2. MAILING ADDRESS, TELEPHONE NUMBER, AND CITIZENSHIP
-----------------------------------------------------------------------------
Street City State / Zip Daytime Telephone E-mail address
Citizen of: ( )U.S. ( )Other: Citizen of: ( )U.S. ( )Other:
-----------------------------------------------------------------------------
Owner Joint Owner
================================================================================
3. FUND(S) CHOSEN AND AMOUNT INVESTED ($1,000 MINIMUM PER FUND) NOTE: The $1,000
initial investment minimum is waived if you elect to invest $100 or more each
month through the Midas Automatic Investment Program (see Section 6).
-----------------------------------------------------------------------------
MIDAS FUND $______________
MIDAS INVESTORS $______________
MIDAS MAGIC $______________
MIDAS SPECIAL EQUITIES FUND $______________
MIDAS U.S. AND OVERSEAS FUND $______________
DOLLAR RESERVES $______________
TOTAL $_________________
BY CHECK: Please draw your check to the order of MIDAS FUNDS and enclose with
this Application. THIRD PARTY CHECKS WILL NOT BE ACCEPTED.
BY WIRE: Please call 1-800-400-MIDAS (6432) 9a.m. - 5p.m. eastern time to be
assigned an account number before making an initial investment by wire.
Please indicate the assigned account number ________________________________
and the date the wire was sent ______________________________________________
================================================================================
4. DISTRIBUTIONS If no circle is checked, the Automatic Compounding Option will
be assigned to increase the shares you own.
o AUTOMATIC COMPOUNDING OPTION Dividends and distributions reinvested
in additional shares.
o PAYMENT OPTION o Dividends in cash, distributions reinvested.
o Dividends and distributions in cash.
================================================================================
5. CHECK WRITING PRIVILEGE FOR DOLLAR RESERVES - SIGNATURE CARD
I am investing in Dollar Reserves and would like free check writing (minimum
$250 per check). Please send free personalized checks. I have read and agree
to the Check Writing Account Agreement on the reverse of this Signature Card.
Please permit a single signature on checks drawn on joint accounts,
corporations, trusts, etc., unless the following circle is checked t.
-----------------------------------------------------------------------------
Signature Signature of Joint Owner (if any)
-----------------------------------------------------------------------------
Print Name Print Name of Joint Owner (if any)
(please continue on back)
<PAGE>
================================================================================
6. MIDAS FUNDS AUTOMATIC INVESTMENT PROGRAM
o BANK TRANSFER PLAN Automatically purchase shares each month by
transferring the dollar amount you specify from your regular checking
account, NOW account or bank money market account. PLEASE ATTACH A VOIDED
BANK ACCOUNT CHECK.
FUND NAME:__________________________________________________________________
AMOUNT ($100 MINIMUM): $______________ Day of month: o 10th o 15th o 20th
o SALARY INVESTING PLAN The enrollment form will be sent to the address in
Section 2 or call toll-free 1-800-400-MIDAS (6432) to have the form sent
to your place of employment.
o GOVERNMENT DIRECT DEPOSIT PLAN Your request will be processed and you will
receive the enrollment form.
================================================================================
7 INVESTMENTS AND REDEMPTIONS BY TELEPHONE
Shareholders automatically enjoy the privilege of calling toll-free
1-888-503-VOICE (8642) or accessing their Midas Funds account on the web at
www.midasfunds.com to purchase additional shares of a Fund or to expedite a
redemption and have the proceeds sent directly to their address or to their
bank account, unless declined by checking the following circle o. The link
with your bank offers flexible access to your money. Transfers occur only
when you initiate them and may be made by either bank wire or bank
clearinghouse transfer with the Midas Electronic Funds Transfer service.
TO ESTABLISH THE LINK TO YOUR BANK, PLEASE ATTACH A VOIDED CHECK FROM YOUR
BANK ACCOUNT. One common name must appear on your Midas Funds account and
bank account.
================================================================================
8. SIGNATURE AND CERTIFICATION TO AVOID BACKUP WITHHOLDING
"I certify that I have received and read the prospectus for the Midas Funds,
agree to its terms, and have the legal capacity to purchase their shares. I
understand telephone conversations with Investor Service Center, Inc. ("ISC")
Representatives are recorded and hereby consent to such recording. I agree
that neither the Funds nor ISC will be liable for acting on instructions
believed genuine and under reasonable procedures designed to prevent
unauthorized transactions. I CERTIFY (1) THE SOCIAL SECURITY OR TAXPAYER
IDENTIFICATION NUMBER PROVIDED ABOVE IS CORRECT, AND (2) I AM NOT SUBJECT TO
BACKUP WITHHOLDING BECAUSE (A) I AM EXEMPT FROM BACKUP WITHHOLDING, OR (B) I
HAVE NOT BEEN NOTIFIED BY THE IRS THAT I AM SUBJECT TO BACKUP WITHHOLDING, OR
(C) I HAVE BEEN NOTIFIED BY THE IRS THAT I AM NO LONGER SUBJECT TO BACKUP
WITHHOLDING." (PLEASE CROSS OUT ITEM 2 IF IT DOES NOT APPLY TO YOU.) THE
INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF
THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP
WITHHOLDING.
-----------------------------------------------------------------------------
Signature of o Owner o Trustee o Custodian Date
-----------------------------------------------------------------------------
Signature of Joint Owner (if any) Date
MF-SAR-6/00
--------------------------------------------------------------------------------
CHECK WRITING ACCOUNT AGREEMENT
The payment of money is authorized by the signature(s) appearing on the reverse
side. Each signatory guarantees the genuineness of the other signatures.
UMB Bank Warsaw (the "Bank") is hereby appointed agent by the person(s) signing
this card (the "Depositor(s)") and, as agent, is authorized and directed, upon
presentment of checks to the Bank to transmit such checks to the applicable
Midas mutual fund or its transfer agent as requests to redeem shares registered
in the name of the Depositor(s) in the amounts of such checks for deposit in
this checking account.
This checking arrangement is subject to the applicable terms and restrictions,
including charges, set forth in the current Prospectus for each Midas mutual
fund as to which the Depositor(s) has arranged to redeem shares by check
writing. The Bank is further authorized to effect redemptions to defray the
Bank's charges relating to this checking arrangement. The Depositor(s) agrees to
be subject to the rules and regulations of the Bank pertaining to this checking
arrangement as amended from time to time; that the Bank, Investor Service
Center, and Midas have the right to change, modify or terminate this check
writing service at any time; and that the Bank shall be liable for its own
negligence.
<PAGE>
SHAREHOLDER SERVICES
o Electronic Funds Transfers
o Automatic Investment Program
o Retirement Plans:
Traditional Deductible IRA
Roth IRA
SEP-IRA
Simple IRA
403(b)
o Education IRA
MINIMUM INVESTMENTS
o Regular Accounts: $1,000
o Retirement Plans, including Traditional Deductible IRA, Roth IRA,
SEP-IRA, Simple IRA, and 403(b): $1,000
o Education IRA: $500
o Automatic Investment Program: $100
o Subsequent Investments: $100
MIDAS FUNDS
P.O. Box 219789
Kansas City, MO 64121
1-800-400-MIDAS (6432) for Investment Information
1-888-503-VOICE (8642) for Shareholder Services
Call toll-free for Fund performance, telephone purchases and to obtain
information concerning your account. Or access Midas Funds on the Worldwide Web
at www.midasfunds.com.
Past performance does not guarantee future results. Investment return will
fluctuate, so shares when redeemed may be worth more or less than their cost.
Dollar cost averaging does not assure a profit or protect against loss in a
declining market and investors should consider their ability to make purchases
when prices are low.
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the Midas Funds. The report is not
authorized for distribution to prospective investors in the Funds unless
preceded or accompanied by an effective Prospectus. Investor Service Center,
Inc., Distributor.
<PAGE>
[LOGO]
MIDAS
FUNDS
Dicovering Opportunities
MIDAS FUNDS
P.O. Box 219789
Kansas City, MO 64121
Change Service Requested
514290 MF-SAR-6/00
