As filed with the Securities and Exchange Commission on June 3, 1996
Registration No. 2-75661
File No. 811-3379
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
---
Pre-Effective Amendment No.
---
Post-Effective Amendment No. 20 X
---
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
---
Amendment No. 20
(Check appropriate box or boxes.)
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
625 Second Street, Suite 102, Petaluma, California 94952
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (707) 778-1000
TERRY COXON, 625 Second Street, Suite 102, Petaluma, CA 94952
(Name and Address of Agent for Service)
--------------------
Copies to:
ROBERT B. MARTIN, JR., ESQ., 625 Second Street, Suite 102, Petaluma, CA 94952
It is proposed that this filing will become effective (check
appropriate box), and that the approximate date of commencement of proposed sale
to the public will be as soon as practicable after:
immediately upon filing pursuant to paragraph (b)
---
X on June 3, 1996 pursuant to paragraph (b)
---
60 days after filing pursuant to paragraph (a)
---
on (date) pursuant to paragraph (a) of rule 485
---
================================================================================
The Registrant has registered an indefinite amount of such securities under the
Securities Act of 1933 pursuant to Rule 24f-2, and the Notice thereunder for its
most recent fiscal year was filed with the Commission on March 26, 1996.
================================================================================
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
Cross Reference Sheet Pursuant to Rule 404
Between Items of Part A of Form N-1A and the Prospectus
<CAPTION>
Item Number and Caption of Part A of Form N-1A Caption in Prospectus
----------------------------------------------------------- -------------------------------
<C> <S> <C>
1. Cover Page........................................ Cover Page
2. Synopsis.......................................... Summary
3. Condensed Financial Information................... Financial Highlights; Reports--
Advertising
4. General Description of Registrant................. Cover Page; Objectives and
Policies; The Four Portfolios;
The Four Portfolios-- Risk
Factors and Special
Considerations
5. Management of the Fund............................ Organization and Management
5A. Management's Discussion of Fund Performance....... Financial Statements
6. Capital Stock and Other Securities................ Objectives and Policies;
Shareholder Account Services and
Privileges; Distributions and
Taxes
7. Purchase of Securities Being Offered.............. Computation of Net Asset Values;
Purchase of Shares from the
Fund; Shareholder Account
Services and Privileges
8. Redemption or Repurchase.......................... Redemption of Shares by the Fund
9. Pending Legal Proceedings......................... *
<FN>
- - - ---------------
*Omitted since answer is negative or not applicable.
</FN>
</TABLE>
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
Cross Reference Sheet Pursuant to Rule 404
Between Items of Part B of Form N-1A and the Statement of Additional Information
<CAPTION>
Caption in Statement of
Item Number and Caption of Part B of Form N-1A Additional Information
----------------------------------------------------------- -------------------------------
<C> <S> <C>
10. Cover Page........................................ Cover Page
11. Table of Contents................................. Table of Contents
12. General Information and History................... General Information
13. Investment Objectives and Policies................ Objectives and Policies
14. Management of the Fund............................ Management
15. Control Persons and Principal Holders of
Securities........................................ Management
16. Investment Advisory and Other Services............ Management; Transfer and
Dividend-Disbursing Agent;
Custodian
17. Brokerage Allocation and Other Practices.......... Portfolio Transactions and
Brokerage
18. Capital Stock and Other Securities................ General Information
19. Purchase, Redemption and Pricing of Securities
Being Offered..................................... Computation of Net Asset Values;
Purchase of Shares from the
Fund; Redemption of Shares by
the Fund
20. Tax Status........................................ Distributions and Taxes;
Redemption of Shares by the Fund
-- Tax Consequences of In-Kind
Redemptions
21. Underwriters...................................... General Information --
Organization and Capitalization
22. Calculations of Performance Data.................. General Information --
Calculations of Performance Data
23. Financial Statements.............................. Financial Statements
<FN>
- - - ----------
*Omitted since answer is negative or not applicable.
</FN>
</TABLE>
<PAGE>
PROSPECTUS June 3, 1996
The
PERMANENT
PORTFOLIO
Family of Funds
1-707-778-1000
625 Second Street - Petaluma, California 94952
Permanent Portfolio Family of Funds, Inc. (the "Fund") is a mutual fund that
contains four separate "Portfolios," each with its own separate investment
policy. Investors may invest in any one or in any combination of the Portfolios.
The Fund's four Portfolios are:
The Permanent Portfolio, which invests a fixed Target Percentage of its net
assets in gold, silver, Swiss franc assets, stocks of real estate and natural
resource companies, aggressive growth stocks, and dollar assets such as U.S.
Treasury bills and bonds. The Permanent Portfolio's objective is to preserve and
increase the purchasing power value of its shares over the long term.
The Treasury Bill Portfolio, which invests in short-term U.S. Treasury bills
and notes. The Treasury Bill Portfolio's objective is to earn high current
income for the Portfolio, consistent with safety of principal. Unlike most money
market funds, the Treasury Bill Portfolio follows a dividend policy that permits
its net asset value per share to rise. Repayment of the U.S. Treasury securities
in which the Treasury Bill Portfolio invests is guaranteed in full by the United
States Government. An investment in Treasury Bill Portfolio shares is not so
guaranteed.
The Versatile Bond Portfolio, which invests in a diversified portfolio of
short-term (remaining maturity of 24 months or less) corporate bonds rated "A"
or higher by Standard & Poor's. The Portfolio's objective is to earn high
current income for the Portfolio, while limiting risk to principal. The
Versatile Bond Portfolio, unlike most short-term bond funds, follows a dividend
policy that enables its net asset value per share to rise.
The Aggressive Growth Portfolio, which invests in stocks and stock warrants of
U.S. companies selected for high profit potential. The Aggressive Growth
Portfolio's objective is to achieve high (greater than for the stock market as a
whole), long-term appreciation in the value of its shares.
The Fund is a no-load fund. Each shareholder in the Fund pays a one-time
account start-up fee of $35 to establish a Shareholder Account (regardless of
the number of Portfolios in which he invests), and a monthly account maintenance
fee of $1.50 (regardless of the number of Portfolios in which he invests).
Investors may purchase and redeem shares in any Portfolio directly from the
Fund, without payment of commission.
The Fund intends to qualify each Portfolio as a "regulated investment company"
under the Internal Revenue Code, so that each Portfolio may pass investment
income and capital gains through to the Portfolio's shareholders without
reduction by federal corporate income tax. The Fund has adopted additional
tax-planning policies with respect to its activities, which are intended for the
further benefit of its shareholders.
This Prospectus is designed to provide you with information that you should
know before investing in any of the Fund's Portfolios. You should read this
entire document and retain it for future reference.
A Statement of Additional Information dated June 3, 1996, contains additional
information about the Fund and has been filed with the Securities and Exchange
Commission. The Statement of Additional Information is incorporated herein by
reference and is available without charge from the Investor's Information
Office, P.O. Box 5847, Austin, Texas 78763.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ADEQUACY OR ACCURACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
SUMMARY........................................................................3
FINANCIAL HIGHLIGHTS...........................................................8
OBJECTIVES AND POLICIES.......................................................16
Tax Planning.............................................................16
Dividends and Tax Planning...............................................16
THE FOUR PORTFOLIOS...........................................................16
Permanent Portfolio......................................................17
Treasury Bill Portfolio..................................................18
Versatile Bond Portfolio.................................................18
Aggressive Growth Portfolio..............................................19
Risk Factors and Special Considerations................................. 19
ORGANIZATION AND MANAGEMENT...................................................21
Investment Adviser.......................................................22
CONSULTANTS...................................................................23
DISTRIBUTIONS AND TAXES.......................................................23
COMPUTATION OF NET ASSET VALUES...............................................25
PURCHASE OF SHARES FROM THE FUND..............................................25
REDEMPTION OF SHARES BY THE FUND..............................................25
Written Redemption Requests..............................................26
Telephone Redemption Requests............................................26
Redemption Limitations...................................................26
SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES...................................27
Portfolio Switching......................................................27
Automatic Reinvestment...................................................27
Systematic Withdrawal Program............................................27
Individual Retirement Account Plan.......................................27
Check Redemptions -- Treasury Bill Portfolio and
Versatile Bond Portfolio Only............................................28
Limitations..............................................................28
SERVICE CHARGES...............................................................28
CUSTODIAN, TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT.......................29
REPORTS.......................................................................29
Advertising...............................................................29
<PAGE>
SUMMARY
This Summary describes the features of an investment in the Fund. Please read
the entire Prospectus for more complete information before you invest.
Major Features
. Four Portfolios to choose from:
1. Permanent Portfolio
2. Treasury Bill Portfolio
3. Versatile Bond Portfolio
4. Aggressive Growth Portfolio
. A separate investment policy for each Portfolio.
. Dividends and capital gain distributions (if any) paid annually.
. Tax planning with respect to the Portfolio's activities, for the benefit of
its shareholders.
. IRA Plan.
. $1,000 minimum initial investment in any Portfolio.
. $100 minimum additional investment in any Portfolio.
. No redemption or commission charge to redeem shares directly with the Fund.
Optional Services and Charges---------------------------------------------------
Telephone redemptions..................No charge; no minimum redemption
size; no limit to the number of
telephone redemptions.
Portfolio switching......................$5.00 per switch; no limit to the
number or frequency of switches.
Automatic reinvestment...................No charge.
Check redemptions.......................$1.00 per check; no minimum check size;
(Treasury Bill Portfolio and no limit to the number of check
Versatile Bond Portfolio only) redemptions.
Systematic withdrawal plan.......... ....No charge.
Assistance from the Investor's
Information Office at 1-800-531-5142.....No charge.
<PAGE>
The Fund
The Fund is a no-load, diversified management investment company; it issues
shares in its Permanent Portfolio, Treasury Bill Portfolio, Versatile Bond
Portfolio and Aggressive Growth Portfolio, and redeems those shares upon a
shareholder's request to the Fund's Transfer Agent. See "Redemption of Shares by
the Fund."
Investors may invest in any one or in any combination of the Fund's four
Portfolios. An investor who wishes to "switch" all or a portion of his
investment from one Portfolio to another may do so at any time. See "Shareholder
Account Services and Privileges -- Portfolio Switching."
Investment and Tax Planning
The Fund was designed to provide its shareholders with a flexible tool for
their investment and tax planning. In furtherance of that purpose, each of the
Fund's four Portfolios has its own particular investment policy, and each
Portfolio may be purchased through an IRA Plan sponsored by the Fund.
Each Portfolio, to the extent consistent with its investment objectives,
arranges its investments to favor opportunities for appreciation and holds
appreciated investments for at least the minimum period required for sales of
investments to qualify for long-term capital gain treatment. In addition, each
Portfolio distributes its investment income to its shareholders as per-share
dividends only once a year and only to the extent necessary for the Portfolio to
qualify for treatment as a regulated investment company under Subchapter M of
the Internal Revenue Code of 1986, as amended, and to avoid corporate federal
income tax. (If a Portfolio were to distribute less than the minimum amount
required for any year, which the Fund considers unlikely, it would become
subject to federal income tax for that year.) This dividend policy may lessen a
shareholder's tax burden by deferring recognition of taxable income and/or by
permitting a greater portion of the shareholder's total return to be recognized
as a capital gain on a redemption rather than as dividends, which are taxable as
ordinary income. In the case of shares that pass to a shareholder's estate, this
dividend policy may eliminate income tax on a portion of the shareholder's total
return. For shareholders holding their shares in a Portfolio continuously for
longer than one year, the tax advantages to be achieved from the Portfolio's
dividend policy will vary depending on the amount and timing of redemptions of
shares by the Portfolio's shareholders in general. See "Objectives and
Policies," "The Four Portfolios" and "Distributions and Taxes."
Four Portfolios
The Fund's Permanent Portfolio invests a fixed Target Percentage of its net
assets in gold, silver, Swiss franc assets, stocks of real estate and natural
resource companies, aggressive growth stocks, and dollar assets such as U.S.
Treasury bills and bonds. The Permanent Portfolio's objective is to preserve and
increase the purchasing power value of its shares over the long term. Even if
the Permanent Portfolio does achieve its objective over the long term, it may
suffer substantial short-term losses from time to time, since investment prices
generally respond to changes in the pattern of inflation with lags and delays
that are impossible to foresee.
The Fund's Treasury Bill Portfolio invests in short-term U.S. Treasury bills,
and also may invest in U.S. Treasury bonds and notes having a remaining maturity
of thirteen months or less. The Treasury Bill Portfolio's objective is to earn
high current income for the Portfolio, consistent with safety of principal. The
Treasury Bill Portfolio, unlike most money market funds (which distribute their
investment income daily and maintain a constant net asset value per share),
follows a dividend policy that allows its net asset value per share to rise.
The Fund's Versatile Bond Portfolio invests in a diversified portfolio of
corporate bonds rated "A" or higher by Standard & Poor's and having a remaining
maturity of 24 months or less. The Portfolio's objective is to earn high current
income for the Portfolio, while limiting risk to principal. The Portfolio was
designed to provide its shareholders with a versatile instrument for their
investment and tax planning. Prices of short-term corporate bonds fluctuate
somewhat in response to changes in prevailing interest rates; such price
movements generally are much smaller than fluctuations in the prices of
long-term corporate, municipal or U.S. Treasury bonds. The Versatile Bond
Portfolio, unlike most short-term bond funds, follows a dividend policy that
allows its net asset value per share to rise.
The Fund's Aggressive Growth Portfolio invests in stocks and stock warrants
of U.S. companies selected for high profit potential, such as stocks of
companies in high technology industries, companies developing or exploiting new
products or services, and companies whose shares are valued primarily for
potential growth in earnings, dividends or asset values. While such investments
are expected to appreciate more rapidly than stock market investments in
general, they also are subject to greater risk, especially during periods when
the prices of U.S. stock market investments in general are declining.
<PAGE>
There is, of course, no assurance that any Portfolio will achieve its
objective. In addition, please see "Risk Factors and Special Considerations" for
a description of investments held by each Portfolio and the risks that would
attend an isolated investment in any one of those investments.
The Fund's Board of Directors believes that these risks are reduced for the
Permanent Portfolio by combining the selected investments of that Portfolio in
accordance with its Target Percentages. Please see "The Four Portfolios --
Permanent Portfolio." The Permanent Portfolio also invests in foreign
securities; see "Risk Factors and Special Considerations -- Foreign
Investments."
Investing in the Fund
Investors may establish a Shareholder Account by sending a check ($1,000
minimum for each Portfolio in which you invest), together with a Shareholder
Account Application, to the Fund's Transfer Agent, Chase Global Funds Services
Company, P.O. Box 2798, Boston, Massachusetts 02208; please see "Purchase of
Shares from the Fund." Eligible investors may invest through the Fund's IRA
Plan. Existing shareholders may reinvest dividends and capital gain
distributions, if any, through the Fund's Automatic Reinvestment feature. See
"Shareholder Account Services and Privileges -- Automatic Reinvestment."
Redemption
A shareholder may voluntarily redeem any or all of the shares he has
purchased in a Portfolio at that Portfolio's net asset value next determined
following receipt of a properly completed redemption request by the Transfer
Agent. Redemption requests may be made in writing or by telephone. See
"Redemption of Shares by the Fund -- Telephone Redemption Requests." The cash
proceeds of a telephone redemption will be sent to the shareholder's individual
bank account by check (via first class mail), or by bank-to-bank wire if
requested. Shareholders also may redeem shares in the Treasury Bill Portfolio
and in the Versatile Bond Portfolio by writing a redemption check. In addition,
the Fund offers a Systematic Withdrawal Program whereby shareholders may receive
periodic payments of a fixed amount. The Fund reserves a limited right to redeem
shares in the Permanent Portfolio in kind; see "Risk Factors and Special
Considerations -- Target Percentages and In-Kind Redemptions."
Shareholders may redeem shares in one Portfolio and simultaneously reinvest
the proceeds in another Portfolio by means of a Portfolio Switch. See
"Shareholder Account Services and Privileges -- Portfolio Switching."
Investment Advisory Contract
World Money Managers is the Fund's Investment Adviser. Its sole business
since being organized in 1981 has been advising mutual funds. The Fund pays
World Money Managers an advisory fee at the following annual rate:
(i)for each Portfolio, 1/4 of 1% (0.250%) of the first $200 million of the
Portfolio's average daily net assets; plus
(ii)for the Fund as a whole, 7/8 of 1% (0.875%) of the first $200 million of
the Fund's average daily net assets; 13/16 of 1% (0.813%) of the next $200
million of the Fund's average daily net assets; 3/4 of 1% (0.750%) of the
next $200 million of the Fund's average daily net assets; and 11/16 of 1%
(0.688%) of the Fund's average daily net assets in excess of $600 million,
such fee for the Fund as a whole to be allocated among the Portfolios in
proportion to their net assets.
While the advisory fee is higher than the fees of most other mutual funds,
World Money Managers absorbs substantially all of the Fund's ordinary operating
and distribution expenses. In addition, the Investment Adviser has voluntarily
agreed to waive, for at least the current calendar year, portions of the
advisory fee allocable to the Treasury Bill Portfolio and to the Versatile Bond
Portfolio to the extent that either Portfolio's total advisory fee otherwise
would exceed an annual rate of 5/8 of 1% (0.625%), in the case of the Treasury
Bill Portfolio, or 3/4 of 1% (0.750%), in the case of the Versatile Bond
Portfolio, of the respective Portfolio's average daily net assets.
<PAGE>
Investors in the Fund pay a one-time account start-up fee of $35 to the
Investment Adviser and may invest in more than one Portfolio without paying
additional account start-up fees. Each investor also pays a monthly account
maintenance fee of $1.50, to offset the cost of maintaining his Shareholder
Account. The maintenance fee does not apply to the IRA Account of a shareholder
who also maintains a regular Shareholder Account with the Fund with exactly the
same name and address.
Pro-Forma Expense Table
Shareholder Transaction Expenses
One-time account start-up fee.........................................$35.00
Optional services:
Exchange fee (Portfolio switching).....................$ 5.00 per switch
Check redemptions (Treasury Bill Portfolio and
Versatile Bond Portfolio only).........................$ 1.00 per check
Bank-to-bank wire transfer........................................$ 8.00
Annual Fund Operating Expenses (shown as a percentage of average daily net
assets):
<TABLE>
<CAPTION>
Treasury Aggressive
Permanent Bill Versatile Bond Growth
Portfolio Portfolio Portfolio Portfolio
--------- --------- -------------- -----------
<S> <C> <C> <C> <C>
Management fees (after fee waiver) 1.13% .63% .75% 1.13%
Other operating expenses .22% .19% .14% .06%
Account maintenance fees .07% .07% .07% .07%
----- ---- ---- -----
Total operating expenses 1.42% .89% .96% 1.26%
===== ==== ==== =====
Example*: A $1,000 investment in each Portfolio would bear the following
expenses, assuming (i) a 5% annual return, and (ii) redemption at the end of
each time period:
<CAPTION>
Treasury Aggressive
Permanent Bill Versatile Bond Growth
Portfolio Portfolio Portfolio Portfolio
--------- --------- -------------- -----------
<S> <C> <C> <C> <C>
1 Year $ 49 $ 44 $ 45 $ 48
3 Years $ 79 $ 63 $ 65 $ 74
5 Years $110 $ 83 $ 86 $102
10 Years $200 $141 $149 $182
</TABLE>
*The pro forma examples given above are constructed and set forth in
conformity with Federal securities laws and regulations uniformly applicable to
all mutual funds. Actual expenses per $1,000 invested in the Fund are
substantially less than indicated in the pro forma examples because:
(i) An investor pays the $35 one-time account start-up fee only once, even if
he invests in all Portfolios, and even if he invests both in his own name and
through the Fund's IRA Plan;
(ii) An investor pays the $1.50 monthly account maintenance fee only once,
even if he invests in all Portfolios, and even if he invests both in his own
name and through the Fund's IRA Plan; and
(iii) The account start-up fee and the account maintenance fee do not
increase even if an investor invests much more than the $1,000 assumed in the
pro forma examples. See "Service Charges."
The purpose of the table above is to assist prospective investors to
understand the various costs and expenses that an investor in the Fund will bear
directly or indirectly. Since the Investment Adviser has agreed voluntarily to
waive a portion of its advisory fee with respect to the Treasury Bill Portfolio
and the Versatile Bond Portfolio, the investment advisory (management) fee for
those Portfolios are .63% and .75%, respectively, instead of 1.13%, and the
total operating expenses are .89% and .96%, respectively. The ratios of expenses
(including investment advisory fees) to average daily net assets for the
Permanent Portfolio, the Treasury Bill Portfolio, the Versatile Bond Portfolio
and the Aggressive Growth Portfolio for the last fiscal year were 1.35%, .82%,
.89% and 1.19%, respectively. See "Organization and Management -- Investment
Adviser." Shareholders in the Fund do not pay any front-end sales charges or
distribution fees on their investment. The examples shown should not be
considered representations of past or future expenses, and actual expenses may
be greater or lesser than those shown.
<PAGE>
Consultants
The Fund and the Investment Adviser have retained Harry Browne and Douglas
Casey as consultants. The consultants are available to the Fund's officers for
discussion on general economic conditions and other matters; they do not advise
the Fund or the Investment Adviser on the selection of specific investments.
Transfer Agent
The Fund has retained Chase Global Funds Services Company as its transfer
agent. The Fund's management believes that the Transfer Agent is well qualified
to provide shareholders with service that is timely, accurate and exceptionally
efficient. You may contact the Transfer Agent to inquire about your Shareholder
Account or about the processing of your purchase and redemption requests by
calling 1-800-341-8900 (from Massachusetts, 1-617-557-8000) or by writing to
Chase Global Funds Services Company, P.O. Box 2798, Boston, Massachusetts 02208.
Information Office
The Investor's Information Office (the "Information Office") is made
available by the Investment Adviser for the convenience of Fund shareholders. A
shareholder or other interested investor may obtain a current prospectus,
Shareholder Account Application, IRA Plan booklet and forms and other
informational material by calling the Information Office at 1-800-531-5142 or
1-512-453-7558 or by writing to the Information Office, P.O. Box 5847, Austin,
Texas 78763 (telecopier (FAX) 1-512-453-2015).
After you have read the Prospectus, please contact the Information Office if
you have any questions about the policies or objectives of any of the Fund's
Portfolios. The experienced personnel at the Information Office will welcome
your inquiry.
<PAGE>
FINANCIAL HIGHLIGHTS
Data for each share of the Permanent Portfolio outstanding for the years
ended January 31, 1987 through 1996, for each share of the Treasury Bill
Portfolio outstanding for the period ended January 31, 1988 and for the years
ended January 31, 1989 through 1996, for each share of the Versatile Bond
Portfolio outstanding for the period ended January 31, 1992 and for the years
ended January 31, 1993 through 1996, and for each share of the Aggressive Growth
Portfolio outstanding for the period ended January 31, 1991 and for the years
ended January 31, 1992 through 1996, is set forth below. This information is
derived from the financial highlights in the Fund's financial statements for the
year ended January 31, 1996. Except for periods ending prior to February 1,
1994, which were audited by other auditors whose report dated March 18, 1994,
expressed an unqualified opinion on this information, the financial statements
and financial highlights have been audited by KPMG Peat Marwick LLP, independent
auditors, whose report thereon dated March 15, 1996 is included as an exhibit to
the Fund's Post Effective Amendment No. 20 to its Registration Statement on Form
N-1A. This report is available without charge from the Investor's Information
Office.
Financial highlights for the Permanent Portfolio
For each share of capital stock outstanding throughout each fiscal year:
<TABLE>
<CAPTION>
Year ended Year ended Year ended Year ended
January 31, 1996 January 31, 1995 January 31, 1994 January 31, 1993
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $ 16.51 $ 17.55 $ 15.36 $ 15.21
--------- --------- -------- --------
Income from investment operations:
Net investment income ................ .50 .64 .44 .49
Net realized and unrealized gains
or losses on investments ........... 2.17 (1.46) 1.99 (.05)
--------- --------- -------- --------
Total income or loss from
investment operations 2.67 (.82) 2.43 .44
Less distributions from:
Net investment income ................ (.38) (.22) (.24) (.29)
Net realized gain on investments ..... - - - -
--------- --------- -------- --------
Total distributions (.38) (.22) (.24) (.29)
--------- --------- -------- --------
Net asset value, end of year $ 18.80 $ 16.51 $ 17.55 $ 15.36
========= ========= ======== ========
Total return (1) ......................... 16.20% (4.65)% 15.86% 2.93%
Ratios / supplemental data:
Net assets, end of period (in thousands) $ 76,641 $ 71,610 $ 79,043 $ 65,937
========= ========= ======== ========
Ratio of expenses to average net assets.. 1.35% 1.32% 1.21% 1.25%
Ratio of net investment income
to average net assets ................ 2.85% 2.63% 2.66% 3.20%
Portfolio turnover rate ................. 9.96% 31.24% 49.51% 70.77%
<FN>
(l) Assumes reinvestment of all dividends and distributions, and deduction of
all fees and expenses except the $35 one-time account start-up fee and the
$1.50 monthly account maintenance fee.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year ended Year ended Year ended Year ended Year ended Year ended
January 31, 1992 January 31, 1991 January 31, 1990 January 31, 1989 January 31, 1988 January 31, 1987
- - - ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<C> <C> <C> <C> <C> <C>
$ 15.10 $ 15.57 $ 15.00 $ 14.71 $ 13.66 $ 11.88
--------- --------- --------- ---------- ---------- ----------
.51 .64 .57 .46 .37 .33
.51 (.63) - (.15) .80 1.45
--------- --------- --------- ---------- ---------- ----------
1.02 .01 .57 .31 1.17 1.78
(.91) (.48) - - - -
- - - (.02) (.12) -
--------- --------- --------- ---------- ---------- ----------
(.91) (.48) - (.02) (.12) -
--------- --------- --------- ---------- ---------- ----------
$ 15.21 $ 15.10 $ 15.57 $ 15.00 $ 14.71 $ 13.66
========= ========= ========= ========== ========== ==========
7.01% .15% 3.80% 2.11% 8.58% 14.98%
$ 72,312 $ 80,542 $ 93,663 $ 97,475 $ 90,177 $ 72,523
========= ========= ========= ========== ========== ==========
1.27% 1.36% 1.17% 1.17% 1.15% 1.17%
3.29% 4.22% 3.80% 3.00% 2.53% 2.51%
8.01% 31.58% 61.44% 23.87% 21.97% 30.89%
</TABLE>
<PAGE>
<TABLE>
Financial highlights for the Treasury Bill Portfolio
For each share of capital stock outstanding throughout each fiscal period:
<CAPTION>
Year ended Year ended Year ended
January 31, 1996 January 31, 1995 January 31, 1994
---------------- ---------------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 66.40 $ 64.81 $ 64.45
---------- ---------- ----------
Income from investment operations:
Net investment income (2) ............................... 3.22 2.65 1.53
Net realized and unrealized gains or losses on investments (3) .06 (.39) (.09)
---------- ---------- ----------
Total income from investment operations 3.28 2.26 1.44
Less distributions from:
Net investment income ................................... (1.84) (.67) (1.08)
---------- ---------- ----------
Total distributions (1.84) (.67) (1.08)
---------- ---------- ----------
Net asset value, end of period $ 67.84 $ 66.40 $ 64.81
========== ========== ==========
Total return (4) ............................................. 4.95% 3.49% 2.24%
Ratios / supplemental data:
Net assets, end of period (in thousands) .................. $ 114,667 $ 121,666 $ 133,970
========== ========== ==========
Ratio of expenses to average net assets (2) ............... .82% .82% .72%
Ratio of net investment income to average net assets ...... 4.79% 3.57% 2.46%
<FN>
* Computed on an annualized basis.
(l) The Treasury Bill Portfolio commenced investment operations September 21,
1987.
(2) Due to the waiver of advisory fees and, effective January 1, 1991 through
January 31, 1994, distribution expenses, the ratio of expenses to average
net assets was reduced by .50% for the year ended January 31, 1996 and
.50%, .49%, .47%, .48%, .47%, .62%, .62% and .65% for the years ended
January 31, 1995, 1994, 1993, 1992, 1991, 1990 and 1989 and the period
ended January 31, 1988, respectively. Without this waiver, the net
investment income per share would have been $2.78 for the year ended
January 31, 1996 and $2.12, $1.04, $1.28, $2.85, $3.85, $3.96, $3.00 and
$1.33 for the years and the period then ended.
(3) Per share net realized and unrealized gains or losses on investments may
not correspond with the change in aggregate unrealized gains and losses in
the Portfolio's securities because of the timing of sales and repurchases
of the Portfolio's shares in relation to fluctuating market values for the
Portfolio.
(4) Assumes reinvestment of all dividends and distributions, and deduction of
all fees and expenses except the $35 one-time account start-up fee and the
$1.50 monthly account maintenance fee.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year ended Year ended Year ended Year ended Year ended Period ended
January 31, 1993 January 31, 1992 January 31, 1991 January 31, 1990 January 31, 1989 January 31, 1988(1)
---------------- ---------------- ---------------- ---------------- ---------------- -------------------
<C> <C> <C> <C> <C> <C>
$ 64.99 $ 63.11 $ 59.35 $ 54.91 $ 51.54 $ 50.00
---------- ---------- ---------- --------- ---------- ----------
1.68 3.26 4.20 4.36 3.38 1.55
.19 (.08) (.01) .08 .02 (.01)
---------- ---------- ---------- --------- ---------- ----------
1.87 3.18 4.19 4.44 3.40 1.54
(2.41) (1.30) (.43) - (.03) -
---------- ---------- ---------- --------- ---------- ----------
(2.41) (1.30) (.43) - (.03) -
---------- ---------- ---------- --------- ---------- ----------
$ 64.45 $ 64.99 $ 63.11 $ 59.35 $ 54.91 $ 51.54
========== ========== ========== ========= ========== ==========
2.89% 5.05% 7.06% 8.09% 6.60% 4.48%*
$ 179,888 $ 320,382 $ 207,889 $ 61,056 $ 31,370 $ 6,475
========== ========== ========== ========= ========== ==========
.73% .73% .83% .54% .54% .50%*
2.97% 4.87% 6.74% 7.87% 6.70% 5.32%*
</TABLE>
<PAGE>
<TABLE>
Financial highlights for the Versatile Bond Portfolio
For each share of capital stock outstanding throughout each fiscal period:
<CAPTION>
Year ended Year ended
January 31, 1996 January 31, 1995
---------------- ----------------
<S> <C> <C>
Net asset value, beginning of period $ 54.90 $ 54.76
-------- ---------
Income from investment operations:
Net investment income (2) ............... 2.91 2.12
Net realized and unrealized gains
or losses on investments (3) .......... 1.05 (.63)
-------- ---------
Total income from investment operations 3.96 1.49
Less distributions from:
Net investment income ................... (2.01) (1.33)
Net realized gain on investments ........ - (.02)
-------- ---------
Total distributions (2.01) (1.35)
-------- ---------
Net asset value, end of period $ 56.85 $ 54.90
======== =========
Total return (4) ............................ 7.24% 2.74%
Ratios / supplemental data:
Net assets, end of period (in thousands).... $ 20,137 $ 22,229
======== =========
Ratio of expenses to average net assets (2). .89% .86%
Ratio of net investment income
to average net assets ................... 5.21% 3.84%
Portfolio turnover rate ................... 51.64% 74.62%
<FN>
* Computed on an annualized basis.
(l) The Versatile Bond Portfolio commenced investment operations November 12,
1991.
(2) Due to the waiver of advisory fees and through January 31, 1994,
distribution expenses, the ratio of expenses to average net assets was
reduced by .37% for the year ended January 31, 1996 and .36%, .39%, .41%
and .43% for the years ended January 31, 1995, 1994, 1993 and the period
ended January 31, 1992, respectively. Without this waiver, the net
investment income per share would have been $2.65 for the year ended
January 31, 1996 and $1.84, $1.57, $1.77 and $2.13 for the years and the
period then ended.
(3) Per share net realized and unrealized gains or losses on investments may
not correspond with the change in aggregate unrealized gains and losses in
the Portfolio's securities because of the timing of sales and repurchases
of the Portfolio's shares in relation to fluctuating market values for the
Portfolio.
(4) Assumes reinvestment of all dividends and distributions, and deduction of
all fees and expenses except the $35 one-time account start-up fee and the
$1.50 monthly account maintenance fee.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year ended Year ended Period ended
January 31, 1994 January 31, 1993 January 31, 1992 (1)
---------------- ---------------- --------------------
<C> <C> <C>
$ 53.63 $ 50.58 $ 50.00
--------- ---------- ---------
1.87 2.06 2.51
(.04) 1.00 (1.93)
--------- ---------- ---------
1.83 3.06 .58
(.70) (.01) -
- - -
--------- ---------- ---------
(.70) (.01) -
--------- ---------- ---------
$ 54.76 $ 53.63 $ 50.58
========= ========== =========
3.42% 6.05% 3.33%*
$ 35,682 $ 23,217 $ 596
========= ========== =========
.89% .89% 1.07%*
3.46% 3.86% 4.00%*
75.05% 224.95% 600.99%*
</TABLE>
<PAGE>
<TABLE>
Financial highlights for the Aggressive Growth Portfolio
For each share of capital stock outstanding throughout each fiscal period:
<CAPTION>
Year ended Year ended
January 31, 1996 January 31, 1995
---------------- ----------------
<S> <C> <C>
Net asset value, beginning of period $ 31.61 $ 32.56
---------- ---------
Income from investment operations:
Net investment income (loss) ............................ (.02) (.01)
Net realized and unrealized gains
or losses on investments .............................. 10.68 (.89)
---------- ---------
Total income or loss from investment operations 10.66 (.90)
Less distributions from:
Net investment income ................................... (.11) (.03)
Net realized gain on investments ........................ (1.51) (.02)
---------- ---------
Total distributions (1.62) (.05)
---------- ---------
Net asset value, end of period $ 40.65 $ 31.61
========== =========
Total return (2) ............................................. 33.78% (2.75)%
Ratios / supplemental data:
Net assets, end of period (in thousands) .................... $ 11,067 $ 6,758
========== =========
Ratio of expenses to average net assets ...................... 1.19% 1.23%
Ratio of net investment income (loss) to average net assets... (.06)% (.04)%
Portfolio turnover rate ...................................... 18.94% 26.29%
<FN>
* Computed on an annualized basis.
(l) The Aggressive Growth Portfolio commenced investment operations May 16,
1990.
(2) Assumes reinvestment of all dividends and distributions, and deduction of
all fees and expenses except the $35 one-time account start-up fee and the
$1.50 monthly account maintenance fee.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year ended Year ended Year ended Period ended
January 31, 1994 January 31, 1993 January 31, 1992 January 31, 1991(1)
---------------- ---------------- ---------------- -------------------
<C> <C> <C> <C>
$ 26.63 $ 22.77 $ 18.35 $ 20.00
--------- --------- ---------- ---------
.01 .02 .06 .13
6.41 4.44 4.38 (1.78)
--------- --------- ---------- ---------
6.42 4.46 4.44 (1.65)
(.02) (.13) (.02) -
(.47) (.47) - -
--------- --------- ---------- ---------
(.49) (.60) (.02) -
--------- --------- ---------- ---------
$ 32.56 $ 26.63 $ 22.77 $ 18.35
========= ========= ========== =========
24.25% 19.77% 24.21% (8.25)%*
$ 7,201 $ 3,596 $ 2,577 $ 1,151
========= ========= ========== =========
1.20% 1.12% 1.18% 1.07%*
.02% .12% .23% .64%*
29.83% 25.62% 53.18% 36.88%*
</TABLE>
<PAGE>
OBJECTIVES AND POLICIES
Each of the Fund's Portfolios has its own objectives and policies, as
explained below. The Fund itself is designed to provide its shareholders with a
flexible tool for their investing and tax planning. (Investors should note that
the Fund neither intends nor attempts to engage in tax planning for individual
shareholders).
To further its shareholders' individual investment programs, the Fund
includes four separate and distinct Portfolios, each with its own investment
policy. A shareholder may select a Portfolio or Portfolios in accordance with
his own financial objectives, and he may switch all or a portion of his
investment(s) from one Portfolio to another whenever he wishes.
Tax Planning
To further its shareholders' tax-planning, the Fund sponsors an IRA Plan, and
the Fund's four Portfolios have adopted policies intended to reduce the tax
burden to their shareholders of any realized income or capital gains earned by
the Fund. There is no assurance that such policies will be successful, nor is it
possible to predict the extent to which a shareholder's tax burden would be
reduced by a successful application of the policies.
Each of the Fund's Portfolios, to the extent consistent with its investment
objectives, follows a policy of holding appreciated investments for at least the
minimum period required for sales of investments to qualify for long-term
capital gain treatment. This policy can enable a Portfolio to distribute
investment profits in the form of capital gains, which for shareholders in the
maximum federal tax bracket may be less heavily taxed than dividends. Any
Portfolio may sell investments that have declined in value for the purpose of
offsetting taxable gain on investments that have appreciated in value.
Each Portfolio also attempts, in furtherance of its objectives, to manage its
investments in order to reduce its net taxable income and to favor opportunities
for asset appreciation, which would be free of current federal income taxation
to the Portfolio or its shareholders. See "Distributions and Taxes."
Dividends and Tax Planning
In addition, each Portfolio distributes its net investment income and net
capital gains, if any, to its shareholders as per-share dividends only once a
year and only to the extent necessary for the Portfolio to qualify for treatment
as a regulated investment company under Subchapter M of the Internal Revenue
Code and to avoid corporate federal income tax. (Each Portfolio reduces the
amount of its per-share dividends to the extent its taxable net investment
income is distributed in the form of redemption proceeds.) To the extent that a
Portfolio successfully executes this policy, the tax liability of a long-term
shareholder or a shareholder who holds shares in the Portfolio on an ex-dividend
date may be lessened (to an extent which the Fund cannot predict), without
reducing the shareholder's total return (dividends plus appreciation). See
"Distributions and Taxes."
THE FOUR PORTFOLIOS
Each of the Fund's four Portfolios has its own pool of assets and each
Portfolio has adopted its own investment policy.
Investors who wish to invest all or a portion of their capital in a way that
does not depend on any particular outcome for the economy should consider
purchasing shares in the Permanent Portfolio. Investors who wish to invest all
or a portion of their capital in a way that provides a current return (which may
be in the form of dividends, increases in net asset value per share, or some
combination of the two) and stability of principal should consider purchasing
shares in the Treasury Bill Portfolio. Investors who wish to invest all or a
portion of their capital for the high current return that can be earned on
high-grade corporate bonds while limiting risk to principal should consider
purchasing shares in the Versatile Bond Portfolio. Investors who wish to invest
a portion of their capital to achieve high (greater than for the stock market as
a whole), long-term appreciation should consider purchasing shares in the
Aggressive Growth Portfolio.
Investors may switch all or a portion of their investment in the Fund from
one Portfolio to another at any time.
Solely for the purpose of holding overnight cash balances (but not for
investment purposes), the Fund may hold investments up to 7 days in short-term
U.S. Treasury securities or enter into repurchase agreements for U.S. Treasury
securities with commercial banks and securities broker-dealers, in amounts
ordinarily not to exceed 3% of the Fund's net assets, or 4% if the repurchase
agreement is entered into with the Fund's Custodian, State Street Bank and Trust
Company.
Except as indicated otherwise, the investment policies and objectives of each
Portfolio, as described below, are fundamental. A Portfolio's fundamental
investment policy or objective can be changed only by a vote of a majority of
the Portfolio's outstanding shares.
<PAGE>
Permanent Portfolio
The objective of the Permanent Portfolio is to preserve and increase the
"purchasing power" value of its shares over the long term. This goal would
require the price of shares in the Permanent Portfolio to rise at a rate equal
to or greater than the rate of general price inflation (or, in the event of a
deflation in the economy, it would require the price of shares in the Permanent
Portfolio to resist the decline in the general level of prices). If the
Permanent Portfolio succeeds in meeting its objective, the amount of goods and
services that can be purchased with an amount of money equivalent to a share in
the Permanent Portfolio will hold steady (over the long term), or rise, and will
do so regardless of the course of inflation.
Investors should note that even if the Permanent Portfolio does achieve its
objective over the long term, it may suffer substantial short-term losses from
time to time, since investment prices generally respond to changes in the
pattern of inflation with lags and delays that are impossible to foresee.
The investment policy of the Permanent Portfolio reflects the opinion of its
management that inflation rates and other economic events cannot be forecast
with a high degree of reliability and that only investors who are willing to
embrace a high degree of risk should act on such forecasts. An investment
vehicle such as the Permanent Portfolio, whose goals include the preservation of
purchasing power, should not depend on forecasts. Instead, it should acknowledge
a broad range of economic possibilities and, in order to preserve purchasing
power over the long term, should incorporate investments for each of them. For a
further discussion of the investment strategy of the Permanent Portfolio, see
"Objectives and Policies -- Investment Strategy -- Permanent Portfolio" in the
Fund's Statement of Additional Information ("SAI").
In pursuit of its objective of preserving and increasing the purchasing power
value of its shares, the Permanent Portfolio, as its fundamental investment
policy, invests a fixed "Target Percentage" of its net assets in each of the
following categories:
Permanent Portfolio Target
Investment Category Percentage
Gold 20%
Silver 5%
Swiss franc assets 10%
Stocks of U.S. and foreign real estate
and natural resource companies 15%
Aggressive growth stocks 15%
Dollar assets 35%
Total 100%
The Fund will not alter the Permanent Portfolio's Target Percentages or
change the composition of its investment categories without prior authorization
by the Portfolio's shareholders. The Permanent Portfolio ordinarily will buy or
sell investments as needed to correct any discrepancy between its actual
holdings in a given category and the Target Percentage for that category if such
a discrepancy exceeds 1/10 of the Target Percentage. The Portfolio's management
does not attempt to anticipate short-term changes in the general price level of
any investment category. Please see the SAI under "Objectives and Policies --
Investment Categories" for a discussion of how each investment category works to
achieve the Permanent Portfolio's objectives, and under "Objectives and Policies
- - - -- Strategic Portfolio Adjustments" for a discussion of those circumstances that
might occasion a delay in portfolio adjustments.
The Permanent Portfolio's "Gold" holdings consist of gold bullion and bullion
type coins such as, for example, American Eagle gold coins and Canadian Maple
Leaf gold coins.
The Permanent Portfolio's "Silver" holdings consist of silver bullion and
bullion type coins.
The Permanent Portfolio's "Swiss franc assets" consist of deposits of Swiss
francs at Swiss and non-Swiss banks and the bonds and other securities of the
federal government of Switzerland.
The Permanent Portfolio's "Stocks of U.S. and foreign real estate and natural
resource companies" consist of stocks of companies whose assets consist
primarily of real estate (such as timberland, ranching and farm land, raw land,
and land with improvements and structures) and natural resources (such as oil,
gas, coal, precious and non-precious metals).
The Permanent Portfolio's "Aggressive growth stocks" include stock warrants
and stocks of U.S. companies that are more volatile than the stock market as a
whole, and consist of the same types of investments in which the Aggressive
Growth Portfolio may invest. See "The Four Portfolios -- Aggressive Growth
Portfolio."
The Permanent Portfolio's "Dollar assets" include cash, U.S. Treasury bills
and notes, U.S. Treasury bonds, and may include other U.S. dollar-denominated
assets such as the obligations of U.S. Government agencies, high-grade
short-term corporate bonds and banker's acceptances which, in the opinion of the
Fund's management, are secure enough to escape default even under deflationary
economic conditions.
The assets in each of the Permanent Portfolio's investment categories are
subject to certain risks. See "Risk Factors and Special Considerations" below
and "Objectives and Policies -- Investment Categories" in the SAI for a
discussion of those risks.
Viewed in isolation, some of the Permanent Portfolio's assets, such as gold
and stock warrants, would be considered highly speculative. However, the Fund's
management believes that the various investments are subject to different (and,
in some cases, contrary) risks, so that the value of the Permanent Portfolio's
investments in the aggregate will be subject to less risk, over the long term,
than the risk associated with any one of the investments taken by itself.
It is the Permanent Portfolio's policy to arrange its investments, whenever
feasible in keeping within the Permanent Portfolio's Target Percentages, to
reduce the Portfolio's net taxable income and to favor opportunities for asset
appreciation. To the extent that this policy is successfully executed, the
Permanent Portfolio's net asset value per share will be greater than it would
have been otherwise (since the amount of distributions to shareholders will be
less), and the federal income tax liability incurred by shareholders will be
reduced accordingly.
The Permanent Portfolio follows the same tax planning and dividend policies
as the Fund's other Portfolios. These policies are intended to lessen a
shareholder's tax liability without reducing his total return (dividends plus
appreciation). See "Objectives and Policies" and "Distributions and Taxes."
An investment in the Permanent Portfolio should be considered for the portion
of an investor's long-term capital that the investor does not wish to expose to
the risks and uncertainties inherent in economic forecasts and investment
predictions.
Treasury Bill Portfolio
The objective of the Treasury Bill Portfolio is to earn high current income
for the Portfolio, consistent with safety and liquidity of principal.
The Treasury Bill Portfolio, as its fundamental investment policy, invests
exclusively in debt obligations of the United States Treasury. Ordinarily, at
least 80% of the Portfolio's assets will consist of U.S. Treasury bills and
notes; the balance of the assets may be invested in U.S. Treasury bonds having a
remaining maturity of thirteen months or less. The dollar weighted average
length to maturity of the Portfolio's investments will not exceed 90 days.
The Treasury Bill Portfolio distributes its net investment income and net
capital gains, if any, only to the extent necessary for the Portfolio to qualify
for treatment as a regulated investment company under Subchapter M of the
Internal Revenue Code and to avoid corporate federal income tax. The Portfolio
reduces the amount of its per-share dividends to the extent its taxable net
investment income is distributed in the form of redemption proceeds. (The
Treasury Bill Portfolio's dividend policy differs from the dividend policies of
most money market funds in this respect.) As a result of this policy, the tax
liability of a long-term shareholder or a shareholder who holds shares on an
ex-dividend date may be lessened (to an extent which the Fund cannot predict),
without reducing the shareholder's total return (dividends plus appreciation).
The Treasury Bill Portfolio's dividend policy permits the Portfolio's net asset
value per share to rise.
An investment in the Treasury Bill Portfolio should be considered for the
portion of an investor's capital for which the investor wishes to provide
stability of principal while earning a current return (which may be in the form
of dividends, increases in net asset value per share, or some combination of the
two). An investor may desire such protection because he is uncertain about the
future course of investment prices, because he expects investment prices in
general to decline, because he wishes to make greater allowance for the
possibility of economic deflation than does the Permanent Portfolio, or because
he wishes to invest temporarily in a pool of liquid, short-term securities with
an exceptionally low degree of risk.
Versatile Bond Portfolio
The objective of the Versatile Bond Portfolio is to earn high current income
for the Portfolio, while limiting risk to principal. The Portfolio was designed
to provide its shareholders with a versatile instrument for their investment and
tax planning and may be suitable for investors in a variety of circumstances.
The Versatile Bond Portfolio invests in high-grade, short-term corporate
bonds selected by the Investment Adviser for their ability to earn high current
income and for their ability to protect principal.
In order to limit risk to principal arising from defaults by corporate bond
issuers, the Versatile Bond Portfolio invests only in bonds that have earned a
rating of "A" or higher by Standard & Poor's and which in the opinion of the
Fund's management are secure enough to escape default even under deflationary
economic conditions. "AAA," "AA" and "A" are the three highest of Standard &
Poor's eleven bond rating categories and mean respectively that, in the judgment
of Standard & Poor's, a bond's capacity to pay interest and repay principal is
"extremely strong," "very strong" or "strong." The Portfolio does not invest in
so-called "junk bonds." The Portfolio further reduces risk by diversifying so
that ordinarily no more than 5% of the value of its assets is invested in the
bonds of any one issuer and no more than 25% is invested in the bonds of issuers
in any one industry.
The Portfolio purchases only bonds with remaining maturities of 24 months or
less, in order to limit risk to principal arising from changes in open-market
interest rates. Prices of such short-term bonds tend to be much more stable than
prices of long-term corporate, municipal or U.S. Treasury bonds.
The Versatile Bond Portfolio follows the same tax planning and dividend
policies as the Fund's other Portfolios. These policies are intended to lessen a
shareholder's tax liability without reducing his total return (dividends plus
appreciation). See "Objectives and Policies" and "Distributions and Taxes." Even
though the Versatile Bond Portfolio invests in short-term corporate bonds having
little potential for appreciation, the Portfolio's dividend policy permits the
Portfolio's net asset value per share to rise.
An investment in the Versatile Bond Portfolio should be considered for the
portion of an investor's capital that he wishes to protect from risk of
substantial loss while earning a high current return (which may be in the form
of dividends, increases in net asset value per share, or some combination of the
two). The Versatile Bond Portfolio may be especially suitable for an investor
who wishes to defer federal income tax liability for a portion of his return on
an investment with high current income.
Aggressive Growth Portfolio
The objective of the Aggressive Growth Portfolio is to achieve high (greater
than for the stock market as a whole), long-term appreciation in the value of
the Portfolio's shares.
The Aggressive Growth Portfolio, as its fundamental policy, invests
exclusively in stocks and stock warrants of U.S. companies selected for high
profit potential. The price volatility of such investments is expected to be
greater than the price volatility of the U.S. stock market as a whole. Such
investments may include stocks of companies in high technology industries,
companies exploiting or developing new products or services, and companies whose
stock is valued primarily for appreciation potential rather than current income.
Stocks may be selected for purchase by the Aggressive Growth Portfolio because
they have a history of high volatility or because the companies involved have
above-average growth in income, profits or sales. The Aggressive Growth
Portfolio intends that, at any one time, it will hold stocks from at least
twelve different industry groups and that within each industry group it
ordinarily will hold the stocks of both large and small companies. The
Aggressive Growth Portfolio also purchases stock warrants, which are long-term
options to purchase shares of stock at a fixed price.
Ordinarily at least 60% of the Aggressive Growth Portfolio's assets will be
invested in securities listed on the New York Stock Exchange. The remaining
portion of the Portfolio's assets will be invested in securities listed on the
American Stock Exchange or other domestic stock exchange or traded in the
over-the-counter market.
The Aggressive Growth Portfolio will remain fully invested in stock market
investments at all times, apart from incidental amounts of cash that ordinarily
do not exceed 3% of the Portfolio's net assets. Accordingly, the success of the
Portfolio's investment policy does not depend on short-term, market timing
decisions by the Investment Adviser.
The Aggressive Growth Portfolio follows the same tax planning and dividend
policies as the Fund's other Portfolios. These policies are intended to lessen a
shareholder's tax liability without reducing his total return (dividends plus
appreciation). See "Objectives and Policies" and "Distributions and Taxes."
An investment in the Aggressive Growth Portfolio should be considered for the
portion of an investor's capital for which the investor seeks high, long-term
appreciation. Investors should note that, while stocks owned by the Aggressive
Growth Portfolio are expected to appreciate in value more rapidly than stock
market investments in general, they also are subject to greater risk, especially
during periods when the prices of U.S. stock market investments in general are
declining.
Risk Factors and Special Considerations
Investors should review carefully the risks, significant features and other
special considerations associated with an investment in the Fund.
Gold. The performance of the Permanent Portfolio will be affected by changes
in the price of gold. A decline in the price of gold would tend to reduce the
net asset value of shares in the Permanent Portfolio, although in some instances
this tendency could be offset by increases in the price of other investments
held by the Permanent Portfolio.
The market for gold is worldwide. The price of gold is subject to the risk
that in any country inflation or the public's expectation of inflation will
decline. The price of gold also can be depressed by large-scale sales of the
metal by the U.S. or foreign governments, by other official bodies, or by
private parties; by adverse economic conditions in countries where gold is held
by the general public; and by governmental prohibitions or restrictions on the
private ownership of gold.
The price of gold has been subject to volatile fluctuations in the last
several years.
Silver. The performance of the Permanent Portfolio will be affected by
changes in the price of silver.
Silver is subject to risks similar to those of gold and has shown even
greater price volatility than gold. In addition, because of the substantial but
variable demand for silver by industrial users, the price of silver is likely to
decline in the event of any actual or anticipated decline in the general level
of worldwide economic activity.
Real estate and natural resource company stocks. The performance of the
Permanent Portfolio will be affected by changes in the prices of real estate and
natural resource company stocks.
The stocks of real estate and natural resource companies are particularly
subject to irregular price fluctuations due to the nature of the assets owned by
the companies. Any decline in the general level of prices of oil or real estate
would be expected to have an adverse impact on these stocks. The Fund's
management believes that the prices of such stocks are particularly vulnerable
to decline in the event of deflationary economic conditions, and that such
stocks may be particularly profitable during periods of rising inflation.
Aggressive growth stocks. The Permanent Portfolio's investments in this
category, and all of the Aggressive Growth Portfolio's investments, are selected
for high profit potential. Such issues tend to appreciate more than the stock
market as a whole during periods when stock prices in general are rising, and
tend to decline in value more than the stock market as a whole during periods
when stock prices in general are falling. In addition, those Portfolios might
invest in companies with small capitalization, which tend to rely on smaller
product lines and customer bases than larger companies. Such companies therefore
can be expected to be more affected by changes in the economy in general.
U.S. Treasury bills and bonds. The performance of the Permanent Portfolio and
the Treasury Bill Portfolio will be affected by changes in the prices and yields
of U.S. Treasury securities.
Although U.S. Treasury bonds are widely considered to be free of any risk of
default, their open-market prices are affected by changes in the general level
of interest rates. Prices of existing U.S. Treasury securities tend to rise when
interest rates are falling, and tend to fall when interest rates are rising.
Price fluctuations of long-term U.S. Treasury bonds, such as the bonds held by
the Permanent Portfolio, can be as extensive as the price fluctuations of common
stocks.
Prices of U.S. Treasury bills and other short-term U.S. Treasury securities,
including those held by the Treasury Bill Portfolio, also fluctuate in response
to changes in interest rates. However, such fluctuations ordinarily are minimal.
Short-term bonds. The short-term corporate bonds in which the Versatile Bond
Portfolio and the Permanent Portfolio may invest are not guaranteed by the U.S.
government or any government agency and hence are subject to some risk of
default. The Portfolio protects against the risk of default (but does not
eliminate it entirely) by diversifying its holdings and by investing only in
bonds with remaining maturities of 24 months or less and that are rated "A,"
"AA" or "AAA" by Standard & Poor's. An "A" rating by Standard & Poor's means
that the bond has strong capacity to pay interest and principal but is not as
strongly protected against the adverse effects of changes in circumstances and
economic conditions as bonds rated "AA" or "AAA." As an additional protection,
the Portfolio invests only in bonds that in the opinion of the Fund's management
are secure enough to escape default even under deflationary economic conditions.
Open-market prices of short-term corporate bonds are affected by changes in the
general level of interest rates; such price fluctuations are small in comparison
with changes in prices of long-term corporate, municipal or U.S. Treasury bonds.
Corporate bonds also may be subject to downward changes in their ratings by
Standard & Poor's and to "call," or early repayment, at the option of the
issuer. The calling of a bond that is trading at a premium over its face value
could result in a loss of the premium to the bondholder.
Foreign investments. The Permanent Portfolio may own investments issued by
foreign banks and governments and may own stock in foreign companies or
investments held outside the United States.
Stock in foreign companies may be held in the form of American Depository
Receipts (ADRs). ADRs are certificates issued by a U.S. bank that represent the
right to receive securities of a foreign company deposited in the same bank or
in its correspondent bank. In addition, the Fund may direct its Custodian to
leave gold, silver, Swiss franc assets and other investments in the custody of
qualified foreign sub-custodians. The Fund may hold gold and silver bullion in
the form of claim accounts with foreign banks.
In many foreign markets there is less publicly available information about
securities, including independent reports and ratings, than in U.S. markets, and
accounting and auditing standards often are less strict and less reliable than
in the U.S.
Many foreign stock markets are not as developed or efficient as those in the
United States, and securities of some foreign issuers may be less liquid and
more volatile than securities of comparable United States companies. In general,
there is less overall governmental supervision and regulation of securities
exchanges, brokers, banks and listed companies than in the United States.
Tax planning. Each Portfolio of the Fund intends to pay per-share dividends
only to the extent necessary for the Portfolio to qualify for treatment as a
regulated investment company under Subchapter M of the Internal Revenue Code and
to avoid corporate federal income tax on its income. If a Portfolio were to
distribute to its shareholders less than the minimum amount required for any
year, which the Fund considers unlikely, the Portfolio would become subject to
federal income tax for that year.
Target percentages and in-kind redemptions. To avoid liability for corporate
federal income tax each year, a Portfolio must, among other things, derive at
least 90% of its gross income from interest, dividends and gains on sales of
securities. Gains on sales of gold and silver by the Permanent Portfolio do not
qualify as "gains on sales of securities." Consequently, in the event of a rapid
rise in prices of gold and silver, profitable sales of gold and silver (as might
be required for the Permanent Portfolio to adhere to its Target Percentages)
could subject the Portfolio to liability for corporate federal income tax. In
order to avoid this adverse tax result, the Fund has reserved the right to
require redeeming shareholders in the Permanent Portfolio to accept readily
tradeable gold or silver bullion or bullion coins in complete or partial payment
of redemptions. The bullion or coins would be selected by the Fund from the
Permanent Portfolio's holdings.
However, in order to reduce the possibility of inconvenience or loss to
shareholders in the Permanent Portfolio, the Fund will require a redeeming
shareholder to accept an in-kind redemption only if it has arranged a convenient
opportunity for the shareholder promptly to sell the bullion or coins through a
qualified broker or dealer at a cost not to exceed 2% of their value at the time
of the redemption. In the event that a shareholder elected not to use this
service, the Fund at its own expense would deliver the bullion or coins to the
shareholder, or, at his request, to his local bank.
For the shareholder, the tax consequences of an in-kind redemption generally
would be the same as those of a cash redemption.
Illiquid securities. The Permanent Portfolio may hold a maximum of 10%, and
the Aggressive Growth Portfolio may hold a maximum of 5%, of its net assets in
investments that have no ready market for resale and securities for which no
readily available market quotation exists. Such types of illiquid securities may
include investments in a broker-dealer subsidiary of the Fund in amounts not to
exceed in the aggregate 1% of the Permanent Portfolio's net assets and 2% of the
Aggressive Growth Portfolio's net assets. Neither the Treasury Bill Portfolio
nor the Versatile Bond Portfolio will hold illiquid securities.
Regulatory Matters. By letter dated February 9, 1994 (the "Letter"), the
Staff of the San Francisco District Office of the Securities and Exchange
Commission (the "Staff" and "Commission", respectively) advised the Fund and
certain of its directors, officers and affiliates of alleged violations of
certain provisions of federal securities laws, including those relating to the
Fund's advertising materials, transactions among the Fund's Portfolios, the
Fund's distribution expense practices and the composition of the Fund's Board of
Directors. The Staff stated in the Letter that it had decided to recommend to
the Commission that it authorize the filing of a civil action and the
institution of public administrative proceedings seeking sanctions against
certain of the Fund's officers and affiliates. Management of the Fund believes
that there have been no such violations. The Fund has received no further
communications regarding the matter from the Staff or the Commission for over
two years and as of the date hereof, no such civil action or public
administrative proceedings have been instituted. While the Fund has incurred and
will continue to incur certain expenses in connection with the allegations,
including indemnification of the Fund's directors, officers and affiliates for
their reasonable expenses related thereto, the Fund's management believes that
the matter will not have a material effect on the net assets of any Portfolio of
the Fund.
Unusual features. The Fund's Portfolios involve many unusual features,
including the objectives of providing tax advantages, and investments in a
foreign currency, foreign securities and precious metals. These features may
result in administrative, financial or tax consequences that are entirely
unforeseen.
ORGANIZATION AND MANAGEMENT
The Fund was incorporated under the laws of Maryland on December 14, 1981,
under the name "Permanent Portfolio Fund, Inc." and changed its name to
"Permanent Portfolio Family of Funds, Inc." on August 10, 1988. The Fund was
originally organized with a single portfolio which commenced operations as an
investment company on October 15, 1982. That portfolio continues, with the same
investment policy, and is now called the Fund's "Permanent Portfolio." The
Fund's Treasury Bill Portfolio commenced operations on May 26, 1987, the Fund's
Aggressive Growth Portfolio commenced operations on January 2, 1990, and the
Fund's Versatile Bond Portfolio commenced operations on September 27, 1991. The
Fund may offer additional Portfolios from time to time.
The Fund's Board of Directors has the duty and responsibility of managing the
business and affairs of the Fund. Two of the five directors are Independent
Directors, who have no financial interest in the Investment Adviser. The special
function of the Independent Directors is to assure that the Fund deals with the
Investment Adviser at arm's length and solely for the benefit of the Fund's
shareholders.
The Fund holds meetings of its shareholders as may be required by Maryland
law. Generally, each shareholder is entitled to cast one vote for each share he
owns. A separate vote is taken when a matter affects only one Portfolio.
Investment Adviser
The Fund retains World Money Managers (the "Investment Adviser") as its
adviser under an Investment Advisory Contract dated September 10, 1993 (the
"Contract"). The Investment Adviser is a limited partnership organized in August
1981 under the laws of the State of California. The Investment Adviser's general
partners are Terry Coxon, who is also a limited partner in the Investment
Adviser, and Terry Coxon, Inc., a California corporation wholly owned by Terry
Coxon. The Investment Adviser's business consists, and has always consisted,
solely of managing investment companies.
The Investment Adviser furnishes the Fund continuously with suggested
investment planning and investment advice. The Investment Adviser's
responsibilities (which are performed on its behalf by Terry Coxon and Terry
Coxon, Inc., its general partners; and by Alan Sergy and Michael J. Cuggino, its
consultants) include making recommendations concerning the selection, purchase
and sale of the Fund's investments (which are placed by the Fund's officers,
Terry Coxon, its President; Alan Sergy, its Secretary; and Michael J. Cuggino,
its Treasurer), and the day-to-day administration of the Fund's activities. All
activities undertaken by the Investment Adviser on behalf of the Fund are
subject to the general policy direction of the Fund's Board of Directors. The
following sets forth certain information regarding Mr. Coxon, Mr. Sergy and Mr.
Cuggino.
Terry Coxon has been an investment adviser and author since 1976. Mr. Coxon
has served as President and a director of the Fund since its inception in 1981,
during all of which time he has shared primary responsibility for the activities
of the Investment Adviser and the Fund described above. Mr. Coxon also has
served as President and a director of Bullion Security Corporation, the sponsor
of an investment trust, since its inception in 1987.
Alan Sergy has been a registered investment adviser since 1974 and a trustee
of Sergy Trusts since 1972. Mr. Sergy has served as Secretary and a director of
Bullion Security Corporation since its inception in 1987; and as President and a
director since its inception in 1987 and as Secretary since 1990 of World Money
Securities. Mr. Sergy has been Secretary of the Fund since 1981, since which
time he has shared primary responsibility for the activities of the Fund
described above. Mr. Sergy, who has been a director of the Fund since 1986, also
is responsible for the maintenance of all corporate records and for all
communications with the Fund's shareholders.
Michael J. Cuggino has been a Certified Public Accountant since 1988. He was
employed by the Boston office of Ernst & Young and its predecessor company,
Arthur Young & Company, in various audit and accounting capacities, including
audit manager, from August 1985 until January 1991. In January 1991 Mr. Cuggino
established an accounting practice in Petaluma, California. He served as
Assistant Treasurer of the Fund, World Money Securities and Bullion Security
Corporation from August 1991 until December 1992. Mr. Cuggino has served as
Treasurer of each of those companies since January 1993, when he began to share
primary responsibility for the activities of the Fund described above.
The Fund pays the Investment Adviser a comprehensive advisory fee monthly at
the following annual rate:
(i) for each Portfolio, 1/4 of 1% (0.250%) of the first $200 million of the
Portfolio's average daily net assets; plus
(ii) for the Fund as a whole, 7/8 of 1% (0.875%) of the first $200 million of
the Fund's average daily net assets; 13/16 of 1% (0.813%) of the next $200
million of the Fund's average daily net assets; 3/4 of 1% (0.750%) of the next
$200 million of the Fund's average daily net assets; and 11/16 of 1% (0.688%) of
the Fund's average daily net assets in excess of $600 million, such fee for the
Fund as a whole to be allocated among the Portfolios in proportion to their net
assets.
While the advisory fee is higher than the fees of other mutual funds, World
Money Managers absorbs substantially all of the Fund's ordinary operating
expenses as described below, an unusual practice that benefits the Fund by
limiting its expenses, simplifying its internal accounting and facilitating
independent audits. The Investment Adviser also bears the Fund's distribution
expenses. In addition, the Investment Adviser has voluntarily agreed to waive,
for at least the current calendar year, the portions of the advisory fee
allocable to the Treasury Bill Portfolio and to the Versatile Bond Portfolio to
the extent that either Portfolio's total advisory fee otherwise would exceed an
annual rate of 5/8 of 1% (0.625%), in the case of the Treasury Bill Portfolio,
or 3/4 or 1% (0.750%), in the case of the Versatile Bond Portfolio, of the
respective Portfolio's average daily net assets. Investors should note that the
yields of those two Portfolios are enhanced by the fee waiver.
The Fund also pays for its investment expenses (such as interest on
borrowings, taxes and brokerage commissions), the fees and expenses of the
Fund's directors who are not also officers of the Fund, and any and all
extraordinary fees, costs and expenses, including those associated with
litigation, government investigations or administrative proceedings. The
Investment Adviser bears all of the Fund's other ordinary operating expenses,
which may include charges by the Fund's transfer agent, charges by the Fund's
custodian, accounting fees, auditing and legal fees not associated with
litigation, officers' salaries and expenses, rent and occupancy, printing,
postage, and general administrative expense. The Fund does not pay for any of
the Investment Adviser's general or administrative overhead expense.
All fees and expenses payable by the Fund pursuant to the Contract and
attributable only to one Portfolio are borne entirely by that Portfolio; all
other such fees and expenses are allocated among the Fund's Portfolios in
proportion to their net assets.
The ratio of expenses to average net assets for the last fiscal year was
1.35% for the Permanent Portfolio and 1.19% for the Aggressive Growth Portfolio;
and the ratio, net of the fee waiver, was .82% for the Treasury Bill Portfolio
and .89% for the Versatile Bond Portfolio. The Fund paid brokerage commissions
of $5,199 during the last fiscal year to its subsidiary corporation, World Money
Securities, Inc., for portfolio transactions effected through the subsidiary.
The Investment Adviser has entered into an Administrative Agreement effective
February 1, 1986, with Permanent Portfolio Information, Inc. ("Information"),
which is one of its limited partners, whereby Information provides
administrative and marketing services, such as designing and coordinating
mailings and responding to inquiries from prospective Fund investors and
shareholders. The Investment Adviser reimburses Information for its expenses and
pays Information a fee of $6,000 per month. The Investment Adviser may enter
into similar arrangements with other persons.
The Investment Adviser also receives certain service charges paid by
shareholders either directly or from their Shareholder Accounts. See "Service
Charges."
CONSULTANTS
The Fund and the Investment Adviser have entered into agreements with Harry
Browne and Douglas R. Casey under which those individuals make themselves
available for consultation with the Fund and the Investment Adviser on such
matters as basic trends in domestic and international finance and on the
criteria for evaluating investments. Neither of the consultants advises either
the Investment Adviser or the Fund on the selection of specific investments for
any Portfolio.
Harry Browne is a financial author and lecturer. His books include: How You
Can Profit from the Coming Devaluation, You Can Profit from a Monetary Crisis,
Complete Guide to Swiss Banks, New Profits from the Monetary Crisis,
Inflation-Proofing Your Investments (co-authored with Terry Coxon), Investment
Rule #1, Why the Best-Laid Investment Plans Usually Go Wrong, and The Economic
Time Bomb. Mr. Browne writes an investment advisory letter, "Harry Browne's
Special Reports."
Douglas Casey is an investment author (Crisis Investing, Strategic Investing
and The International Man) and the author of an investment advisory service,
"Crisis Investing."
DISTRIBUTIONS AND TAXES
For federal income tax purposes, each Portfolio is treated as a separate
corporation.
To reduce the amount of its income that is taxable currently, each Portfolio
will, whenever practical and in accordance with its investment policy, offset
taxable gains on sales of investments that have risen in price with tax
deductions from sales of assets that have fallen in price. In addition, the
Permanent Portfolio, the Treasury Bill Portfolio and the Versatile Bond
Portfolio may purchase bonds or notes at a market discount, thereby enabling the
Portfolio to defer recognition for tax purposes of a portion of the return on
such notes or bonds.
Each Portfolio intends to continue to qualify annually for treatment as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended. This would permit the Portfolio to pass its net investment
income through to its shareholders without itself incurring corporate federal
income tax on the income. Under applicable federal income tax provisions,
"distributions" include per-share dividends and also include amounts paid to
redeeming shareholders that represent their share of a Portfolio's undistributed
income. For redeeming shareholders, however, the entire redemption proceeds
generally are treated as proceeds from the sale of shares and not as a
distribution of income or gain realized by the Fund. See "General Information"
in the SAI.
In order to reduce the current tax burden of a Portfolio's investors on their
shares of the Portfolio's income and profits, each Portfolio intends to pay
per-share dividends only in amounts judged sufficient by the Fund's Board of
Directors to enable the Portfolio to qualify for treatment under Subchapter M
and to avoid corporate federal income tax.
The amount of a Portfolio's net investment income per share that is
distributed through redemption payments rather than as per-share dividends is
reflected for financial accounting purposes in the same Portfolio's net asset
value per share. Thus, while the Fund's dividend policy may reduce a
shareholder's tax burden on his share of a Portfolio's realized income and
capital gains, it should not reduce the shareholder's total return (dividends
plus change in net asset value) on his investment.
Dividends, if any, are paid only once a year, ordinarily in December. Until
paid, amounts earmarked for dividends are retained by the Portfolio from which
they are payable and contribute to the Portfolio's net asset value and ability
to earn interest, dividends and profits. Dividend payments reduce a Portfolio's
net asset value per share.
Shareholders may benefit from the Fund's dividend policy described under
"Objectives and Policies," depending upon their personal tax circumstances.
Generally, the benefits are greater for shareholders who hold their shares for
longer periods. A shareholder who is accumulating assets over a period of years
can achieve a higher after-tax return as a result of the Fund's dividend policy,
since all of the portion of his return consisting of appreciation remains
invested in the Fund, without any reduction by current federal income tax. A
shareholder who redeems portions of his shares from time to time also may
achieve a higher after-tax return as a result of the Fund's dividend policy,
since the appreciation on his remaining shares may continue to remain invested
in the Fund free of current federal income tax. (Such a shareholder should note,
however, that his benefit is achieved by deferring, not by eliminating, the
payment of taxes; thus his overall benefit may be small if he holds his shares
for only a few years.) And, in the case of shares that pass to a shareholder's
estate or heirs, the potential federal income tax liability for previous
appreciation may be eliminated entirely through the operation of federal income
tax provisions that grant a step-up in the tax basis of property left to an
estate or heir. Other capital assets may provide similar tax advantages but be
subject to different risks than an investment in the Fund.
Dividends from net investment income and net short-term capital gains
generally will be taxable to shareholders as ordinary income, even though in
some cases the income will have been earned by the Portfolio before the investor
became a shareholder. Dividends from net long-term capital gains, if any are
paid by a Portfolio, generally will be taxable to shareholders as long-term
capital gains regardless of how briefly their shares have been held and
regardless of when the gains were earned by the Portfolio. Shareholders will be
sent a statement no later than February 28 of each year showing their total
distributions (during the preceding calendar year) from net investment income
and short-term capital gains, and from long-term capital gains.
Distributions may be automatically reinvested in additional shares of the
same Portfolio if requested.
The payor of a dividend on stock (as the Fund may be) may be required to
withhold 31% of any reportable payments (which may include dividends, capital
gains distributions, and redemptions) paid to a noncorporate shareholder if that
shareholder fails to provide the Fund with a valid taxpayer identification
number. Other withholding requirements may apply to certain foreign
shareholders. A federal excise tax of four percent is imposed on undistributed
income and capital gains, if any, of a Portfolio. Undistributed income to which
the excise tax applies would include amounts, if any, that the Fund in reliance
on the judgment of its Board of Directors has not timely distributed under
Subchapter M of the Internal Revenue Code.
New Tax Provisions. Under the provisions added to the Internal Revenue Code
in 1993, all or a portion of any gain on certain "conversion transactions" is
recharacterized as ordinary income, rather than capital gain. In the opinion of
the Fund's management and counsel, based on the provisions' statutory language
and legislative history, the provisions on conversion transactions do not apply
to investments in the Treasury Bill Portfolio or the Versatile Bond Portfolio.
However, no Treasury Regulations or Rulings have been issued interpreting these
provisions, and it is therefore uncertain whether the Internal Revenue Service
will agree with this conclusion. Accordingly, it remains uncertain whether the
gain that a shareholder recognizes upon a redemption of shares in the Treasury
Bill Portfolio or the Versatile Bond Portfolio will be taxed as ordinary income
or as capital gain.
In any event, regardless of the taxation of any recognized gains, the
provisions on conversion transactions do not, in the opinion of the Fund's
management and counsel, disturb the usefulness of the Treasury Bill Portfolio or
the Versatile Bond Portfolio for deferring recognition of income.
<PAGE>
COMPUTATION OF NET ASSET VALUES
The Fund makes a separate calculation of each Portfolio's net asset value per
share at the close of business of the New York Stock Exchange (usually 4:00 p.m.
Eastern Time) every day that the Exchange is open for trading ("business day").
All awaiting and accepted requests for purchases and redemptions of shares in
each Portfolio are executed at a price equal to the Portfolio's net asset value
per share as next computed following receipt thereof by the Transfer Agent.
Investments are valued primarily at market value on the basis of the most
recent price on the exchange on which they are principally traded, or, if not
available, by a method which the Fund's Board of Directors in good faith
believes accurately reflects fair value. If there is no trading in an investment
on a business day, the investment will be valued at the mean between its bid and
asked prices. Short-term securities are marked to market daily. Gold and silver
are valued at the closing spot price on the New York Commodity Exchange, a
regulated U.S. commodity futures exchange. Foreign securities traded on an
exchange are valued on the basis of market quotations most recently available
from that exchange. Investments for which bona fide market quotations are not
readily available will be valued in good faith by the Fund's Board of Directors.
Current net asset value information for the Fund's Portfolios may be obtained
by checking newspaper listings under the heading "Perm Port Funds" or similar
abbreviation.
PURCHASE OF SHARES FROM THE FUND
Shares in the Permanent Portfolio, the Treasury Bill Portfolio, the Versatile
Bond Portfolio and the Aggressive Growth Portfolio are offered for sale
continuously by the Fund. Investors may purchase such shares directly from the
Fund without payment of commission or sales load.
The minimum initial investment in any Portfolio is $1,000. Shareholders may
make additional investments at any time in minimum amounts of $100 per
Portfolio. All requests for purchases of shares accompanied by payment therefore
are effected at a price equal to the net asset value per share next computed
after receipt of the properly completed request by the Transfer Agent.
Initial Investment in the Fund. After reading this entire Prospectus, new
investors should complete and sign the accompanying Shareholder Account
Application. Mail the application, together with a check or money order payable
through a U.S. bank for the amount of your initial investment, to Permanent
Portfolio Family of Funds, Inc., c/o Chase Global Funds Services Company, P.O.
Box 2798, Boston, Massachusetts 02208. (If you use an overnight delivery service
other than U.S. mail, send your Application and check to Permanent Portfolio
Family of Funds, Inc., c/o Chase Global Funds Services Company, 73 Tremont
Street, Boston, Massachusetts 02108.) Please make your investment check payable
to "Permanent Portfolio Family of Funds, Inc."
Additional Investments by Mail. After your initial investment has been
accepted, you will receive a confirmation of your purchase. A form which should
be used to make additional purchases by mail will accompany the confirmation.
(It will not be necessary to fill out another Shareholder Account Application,
even if you are investing for the first time in a new Portfolio.) Please
indicate clearly the Portfolio or Portfolios in which the additional investment
is to be made.
Additional Investments by Wire. Another way to add to your investment is by
bank wire. To do so, send a bank wire to: State Street Bank and Trust Company,
Boston, Massachusetts, ABA#011000028; Attention: Permanent Portfolio Family of
Funds, Inc., Account #53839882. The bank wire must include your Shareholder
Account number and a message indicating that you wish to make a purchase in a
specific Portfolio(s) in the stated amount(s). (Your initial investment in the
Fund may not be made by bank wire.) Your bank may assess a charge for use of a
bank wire.
If a shareholder sends money to the Fund without clearly indicating how it is
to be invested, the Fund's policy is to treat the money as an investment in the
Treasury Bill Portfolio.
The Fund reserves the right to reject investments in part or in whole.
REDEMPTION OF SHARES BY THE FUND
Shareholders may redeem all or some of their shares in any Portfolio.
Subject to the limitations noted below, requests for redemption will be
accepted on any business day. The price paid to the redeeming shareholder is the
Portfolio's net asset value per share next computed after receipt by the
Transfer Agent of the properly completed redemption request.
Redemption requests must be accompanied by share certificates, if issued, and
must be sent to the Transfer Agent. Shareholders may be required to use a
redemption form provided by the Fund. The Fund may refuse redemption requests
not made in the proper manner.
<PAGE>
Written Redemption Requests
Normally the shareholder's signature on a written redemption request (and on
the share certificate, if issued) must match exactly the name on the Shareholder
Account and must be guaranteed by an eligible guarantor institution which
satisfies the Transfer Agent's written standards and procedures, a copy of which
is available upon request to the Transfer Agent. Eligible guarantor institutions
include banks, trust companies, brokers, dealers, municipal or government
securities brokers or dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies, or savings associations,
provided that they are members of STAMP (Securities Transfer Agents Medallion
Program). Signature guarantees from institutions that are not STAMP members and
notarizations from notary publics will not be accepted. (Shareholders may verify
that a guarantor institution is a member of STAMP by contacting the STAMP
administrator, Kemark Financial Services, at 1-800-348-2724, or the Transfer
Agent.) The signature guarantee must be in proper form and undated. For
protection of the shareholder and the Fund, additional documentation may be
required for redemption of shares held in corporate, partnership, trust, or
fiduciary accounts.
However, by completing the appropriate section of the Shareholder Account
Application ("Redemption by Telephone and Without Signature Guarantee," of the
Application), an investor may authorize the Fund to honor redemption requests
without signature guarantee. The lack of the signature guarantee does not render
the Fund responsible for the authenticity of the signature or of telephone
redemption requests. While the Fund will employ reasonable procedures to confirm
telephone instructions, such as verification of certain information with the
caller, the investor will bear the risk of loss from any such request that is
unauthorized. Such a redemption request would be processed as though it had been
made by telephone (see below), and the cash proceeds would be sent by check or,
if requested, by bank-to-bank wire to the shareholder's bank account.
Investors who wish to avoid the possible inconvenience and delay of obtaining
an acceptable signature guarantee should carefully consider authorizing the Fund
to accept redemption requests without signature guarantee.
Telephone Redemption Requests
A shareholder who has authorized the Fund to honor redemption requests
without signature guarantee may submit redemption requests by telephone.
Telephone requests are made by calling the Transfer Agent at 1-800-341-8900 or
1-617-557-8000. Unless applied to the purchase of shares in another Portfolio
(see "Shareholder Account Services and Privileges -- Portfolio Switching"), the
cash proceeds of redemptions requested by telephone or in writing without a
signature guarantee will be sent by check, via first-class mail. As an optional
alternative, the redeeming shareholder may request that the cash proceeds be
sent by bank-to-bank wire. Whether remitted by check or by bank wire, the
redemption proceeds will be addressed only to the shareholder's U.S. commercial
bank account (not to an account at a savings bank, savings and loan association,
credit union or other thrift institution).
If the redeeming shareholder requests a wire transfer, the Transfer Agent's
bank will charge the shareholder its customary fee for a wire transfer, which
currently is $8. The fee will be deducted from the proceeds of the redemption. A
shareholder should ascertain and verify that his bank will accept a "federal
funds" wire transfer before requesting that the proceeds of a redemption be sent
by bank wire. Failure to do so may result in delay in receiving the redemption
proceeds and in additional bank-wire fees which will be charged to the
shareholder.
No telephone requests will be honored to redeem shares for which certificates
have been issued and are outstanding.
Telephone redemptions of shares held in an IRA Plan will be accepted only if
the proceeds are to be applied to the purchase of shares in another Portfolio or
are otherwise to be reinvested within the Fund's IRA Plan. See "Shareholder
Account Services and Privileges -- Portfolio Switching."
Redemption Limitations
The Fund ordinarily will honor a valid redemption request at the Portfolio's
net asset value per share next computed after receipt by the Transfer Agent of
the properly completed redemption request, and by law must pay it within seven
calendar days following the redemption. However, the Fund may delay payment of a
request to redeem shares purchased by check until the Fund is certain that the
check has cleared, which may take up to 15 calendar days after the issuance of
the shares. A shareholder may avoid this delay by purchasing shares with a
cashier's check. Shares for which certificates have been issued may not be
redeemed until the certificates have been returned to the Transfer Agent.
Neither the Fund, the Investment Adviser, the Transfer Agent, nor any of their
agents is responsible for losses sustained by a shareholder as a result of their
acting on any authorized instruction or authorization on the shareholder's
Shareholder Account Application or otherwise in connection with redemption of
his shares in the Fund.
The right to redeem may be limited or suspended by the Fund, or the payment
date postponed, for any period during which the New York Stock Exchange is
closed or during any emergency or other period for which the Securities and
Exchange Commission has permitted or required a suspension for the protection of
shareholders.
The Fund may redeem an investor's shares in any Portfolio at any time that
the value of the shares is less than $500 other than by reason of a decline in
their net asset value. The Fund will notify such an investor at least 30 days
prior to effecting such a redemption.
SHAREHOLDER ACCOUNT SERVICES AND PRIVILEGES
When an investor makes his initial investment in one of the Fund's
Portfolios, a Shareholder Account is opened in accordance with his application.
Subsequent investments by the shareholder in any Portfolio will be added to his
same Shareholder Account. Fund shareholders will receive a confirmation
statement showing each transaction in their Shareholder Account, along with a
summary of the status of the account as of the transaction date. A shareholder
may inquire about his Shareholder Account by mail or by telephone. See
"Custodian, Transfer Agent, and Dividend-Disbursing Agent." Investors who
purchase or redeem shares in the Fund through a broker-dealer may be charged a
transaction fee by the broker-dealer, who may place such orders by telephone in
accordance with the Fund's procedures.
Certain optional services and privileges are available with a Shareholder
Account, as described below. Some of the services involve a fee; a shareholder
will incur the fee only if he uses the service. Shareholders who do not use a
particular service do not bear the cost of providing the service to other
shareholders.
Portfolio Switching
Shareholders may redeem shares in one Portfolio and simultaneously invest the
proceeds in another Portfolio. Such a transaction would constitute a taxable
event to the Shareholder. By completing the appropriate section of the
Shareholder Account application ("Portfolio Switching (Exchange)"), an investor
may authorize the Fund to accept portfolio switching instructions by telephone
and in writing without a signature guarantee. Each Portfolio Switch is subject
to a charge of $5 by the Fund's Investment Adviser. If you are unable to execute
a Portfolio Switch by telephone (such as a failure of the telephone system), you
should consider sending your Portfolio Switch request by mail.
An individual who has both a regular Shareholder Account and an IRA Plan in
exactly the same name may use a Portfolio Switch to redeem shares from his
regular account and purchase shares in his IRA Plan. An IRA contribution
effected in this manner is subject, for federal income tax purposes, to the same
conditions and limitations that apply to all IRA contributions.
Automatic Reinvestment
A shareholder may request that all dividends, including distributions of
long-term capital gains, be automatically reinvested in shares of the same
Portfolio.
A shareholder's tax liability for dividends is not reduced by reinvesting the
dividends (whether through the Automatic Reinvestment Plan or otherwise) in
additional Fund shares.
Systematic Withdrawal Program
An investor whose Shareholder Account totals at least $5,000 may establish a
Systematic Withdrawal Program under which shares with a value predesignated by
him (but at least $100) are automatically redeemed either monthly or quarterly.
Withdrawal payments ordinarily will be mailed within five business days after
the end of the withdrawal period.
Systematic Withdrawal payments are financed by the automatic redemption from
the Shareholder's Account of the necessary number of shares to pay the
shareholder the amount of cash requested. Redemptions ordinarily are made on the
3rd business day of the month. Because the prices of Fund shares fluctuate, the
number of shares redeemed to finance Systematic Withdrawal payments of a given
amount will vary from payment to payment.
If a shareholder owns shares in more than one Portfolio, he may designate the
Portfolio from which the redemptions under a Systematic Withdrawal Program will
be made.
A Systematic Withdrawal Program may be terminated or suspended at any time,
either by the shareholder or by the Fund. No separate charge is made for a
Systematic Withdrawal Program; the costs of administering the Program are borne
by the Investment Adviser.
Individual Retirement Account Plan
Eligible taxpayers may contribute up to $2,000 per year of income earned from
wages, salary and self-employment to an Individual Retirement Account ("IRA").
Such annual contributions generally are deductible by the taxpayer in computing
his adjusted gross income for federal income tax purposes, if he does not
participate in an employer sponsored retirement plan or if his adjusted gross
income does not exceed certain limits. All investment earnings in an IRA
accumulate tax free until withdrawn, usually at retirement. In addition,
deductible contributions can be made to an IRA for the non-employed spouse of a
person who is employed. With certain limitations, amounts withdrawn from an IRA
or received as a lump-sum distribution from a corporate pension or
profit-sharing plan or from a Keogh plan can be rolled over without tax into a
new IRA.
Under the terms of the Fund's IRA Plan, contributions are invested in shares
of the Portfolio(s) selected by the shareholder, and all dividends and
distributions are reinvested in additional shares of the same Portfolio(s).
State Street Bank and Trust Company, Boston, Massachusetts (which is the
Custodian of the Fund's assets) acts as custodian for each Shareholder Account
opened under an IRA Plan and charges the fees described in the IRA Plan
materials which are available upon request to the Information Office.
Shareholder services available with a regular Shareholder Account (including
Portfolio Switching, Automatic Reinvestment and Systematic Withdrawal Program)
are also available with an IRA Plan, but subject to such limitations as the Fund
or the IRA Plan custodian may impose from time to time, and subject to a
separate account maintenance fee. Shares held in an IRA Plan may not be redeemed
by means of a check redemption, nor may they be redeemed by telephone except as
part of a Portfolio Switch.
Check Redemptions -- Treasury Bill Portfolio and Versatile Bond Portfolio Only
Investors who have completed the appropriate section of the Shareholder
Account Application ("Redemption by Check") may redeem shares in the Treasury
Bill Portfolio or in the Versatile Bond Portfolio by writing a redemption check,
as explained below. Such checks may be deposited by a shareholder in his local
bank account or used to make payments to third parties.
A book of personalized checks drawn on Chase Manhattan Bank, N.A. will be
sent upon request to a shareholder maintaining a regular Shareholder Account.
The checks will be pre-printed for use with the Portfolio for which the
shareholder requests check redemption. (Shareholders wishing to write checks on
both Portfolios will be provided with two separate books of checks.) When a
check signed by the shareholder is presented for payment by Chase Manhattan
Bank, N.A., the Fund redeems a sufficient number of the shareholder's shares in
the appropriate Portfolio to pay the check. Please note that a check can be used
to redeem shares only in the Portfolio pre-printed on the face of the check.
Shares for which certificates have been issued and not returned to the
Transfer Agent may not be redeemed by check! Please do not write redemption
checks for which insufficient shares are available; such checks will be returned
unpaid, and your Shareholder Account will be charged a "bad check" fee of $25.
Neither the Fund nor its Investment Adviser or Transfer Agent bears any
responsibility in regard to the payment or non-payment of redemption checks by
Chase Manhattan Bank, N.A.
The check redemption privilege is offered by the Fund as a convenience to its
shareholders. There is no limit to the number of checks a shareholder may write,
nor is any minimum check amount required. However, check redemptions are not
intended to be used as a substitute for a bank checking account. The fee for
each check redemption is $1, which is collected by redeeming an additional
fraction of a share from the Shareholder's Account.
Shares held in an IRA Plan may not be redeemed by the check redemption
privilege.
Limitations
The Fund's management has designed the foregoing services and privileges in
accordance with its intention to provide its shareholders with a flexible tool
for their investing. However, the Fund reserves the right to limit or suspend
check redemption, portfolio switching (on 60 days' notice for a material
change), automatic reinvestment or systematic withdrawal services at any time
without notice.
SERVICE CHARGES
Each shareholder pays the Fund's Investment Adviser an account maintenance
fee of $1.50 per month, whether he invests in one or in more than one Portfolio.
No additional fee is charged for an IRA Plan Account maintained by a shareholder
who also maintains a regular Shareholder Account in exactly the same name and
address.
At the shareholder's option, the fee may be paid annually by check.
Otherwise, the fee is collected once a year, usually in December or January,
from any dividends payable to the shareholder. If the shareholder's dividends
are insufficient to pay the fee, the Fund will redeem a sufficient number of
shares to pay the remaining amount, redeeming first from the Treasury Bill
Portfolio, next from the Permanent Portfolio, next from the Versatile Bond
Portfolio, and lastly from the Aggressive Growth Portfolio. If a shareholder
invests both through a regular Shareholder Account and also through an IRA Plan
Account in exactly the same name and with the same Social Security number, and
if the shareholder does not pay the fees for the two accounts separately by
check, they will be collected first from dividends on, and/or redemption of,
shares held in the regular Shareholder Account rather than by drawing on the IRA
Plan Account.
Any accrued but unpaid account maintenance fee will be collected from the
amount owed to a shareholder who closes his Shareholder Account during the year.
The account maintenance fee offsets a portion of the recurring costs
associated with maintaining each Shareholder Account. Such costs could include
charges by the Fund's Transfer Agent for shareholder accounting and data
processing; printing of the Fund's annual and interim financial reports sent to
shareholders; printing of shareholder proxy materials and the tabulation of
shareholder proxies; postage associated with mailing reports, proxies,
shareholder statements and other materials to shareholders; and costs of
maintaining the "800" telephone lines to the Transfer Agent and the Investor's
Information Office. The Investment Adviser collected a total of $147,094 in
account maintenance fees in the last fiscal year, all of which was used by the
Investment Adviser to pay for a portion of the recurring costs referred to
above. The Investment Adviser believes that the amounts paid by it for such
costs were lower than those which the Fund might have paid to obtain comparable
services from unaffiliated parties.
All mutual funds incur similar expenses. Most funds pay them directly, a
practice which reduces their shareholders' net investment income per share
and/or net asset value per share. The Fund, however, asks each of its
shareholders to pay an account maintenance fee in order to avoid any such
reduction in net income or net asset value per share.
For an investor, account maintenance fees generally are a tax-deductible
investment expense, subject to the general limitations on the deductibility of
such expenses.
The Investment Adviser charges each investor a one-time account start-up fee
of $35. An investor pays this fee only once, even if he invests in more than one
Portfolio, and even if he maintains both an IRA Plan Account and a regular
Shareholder Account with the Fund in exactly the same name and address. This fee
is deducted from the investor's initial investment and will be deducted a second
time only if a former shareholder opens a new Shareholder Account.
The one-time account start-up fee offsets a portion of the costs associated
with establishing an account for each shareholder. The Fund's Board of Directors
considers that the amount of such fee is lower than that which the Fund might
have paid to obtain comparable services from unaffiliated parties.
A current shareholder may invest in one or more additional Portfolios without
incurring an additional account start-up fee.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT
The Fund's custodian is State Street Bank and Trust Company (the
"Custodian"), located in Boston, Massachusetts.
The Fund's transfer agent and dividend-disbursing agent is Chase Global Funds
Services Company (the "Transfer Agent"), telephone number 1-800-341-8900 or
1-617-557-8000. The Transfer Agent's primary offices are located at 73 Tremont
Street, Boston, Massachusetts 02108. Correspondence should be addressed to P.O.
Box 2798, Boston, Massachusetts 02208.
REPORTS
The Fund sends its shareholders financial statements, including a report of
each Portfolio's investment holdings, every six months. The Fund's fiscal year
ends on January 31. Further information about the performance of the Fund is
contained in the Fund's Annual Report to Shareholders for the year ended January
31, 1996. A copy of the Annual Report is available without charge from the
Investor's Information Office.
KPMG Peat Marwick LLP has been selected by the Board of Directors as the
independent auditors for the Fund for the fiscal year ending January 31, 1997.
Advertising
From time to time the Fund may advertise its yield or total return in
accordance with the following applicable federal securities regulations. Yield
for the Treasury Bill Portfolio will be calculated by determining the net change
(exclusive of capital changes) in the value of one share over a specified 7-day
period, assuming purchase of additional shares with dividends on the original
share and additional shares, deducting the account maintenance fee, and
annualizing the resulting figure. For effective yield, the result will be
compounded. Yield for the Fund's other Portfolios will be calculated by dividing
the net investment income per share earned during a specified 30-day period by
the net asset value per share on the last day of the period and annualizing the
resulting figure. Average annual total return will be calculated by determining
the percentage change in value of $1,000 invested at net asset value for
specified periods ending with the most recent calendar quarter, assuming
reinvestment of all distributions, deduction of all fees and expenses except the
one-time account start-up fee, and complete redemption of the investment at the
end of the respective periods.
No person is authorized to give any information or to make any representation
not contained in this Prospectus in connection with the matters described
herein. If given or made, such information or representation must not be relied
upon as having been authorized.
<PAGE>
INVESTMENT ADVISER THE
World Money Managers PERMANENT
Terry Coxon, General Partner PORTFOLIO
625 Second Street Family of Funds
Petaluma, California 94952
CONSULTANTS TO THE FUND
Harry Browne
Douglas Casey
TRANSFER AGENT
Chase Global Funds Services Company
P.O. Box 2798
Boston, Massachusetts 02208
(for overnight delivery services,
73 Tremont Street
Boston, Massachusetts 02108)
1-800-341-8900
In Mass. 1-617-557-8000
CUSTODIAN
State Street Bank and Trust Company
Boston, Massachusetts 02105
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
Three Embarcadero Center
San Francisco, California 94111
including
the Permanent Portfolio
(Symbol PRPFX)
the Treasury Bill Portfolio
(Symbol PRTBX)
the Versatile Bond Portfolio
(Symbol PRVBX)
and
the Aggressive Growth Portfolio
(Symbol PAGRX)
Prospectus
INVESTOR'S INFORMATION OFFICE
P.O. BOX 5847
Austin, Texas 78763
1-800-531-5142
or 1-512-453-7558 direct
or 1-512-453-2015 by telecopier (FAX)
<PAGE>
STATEMENT OF June 3, 1996
ADDITIONAL
INFORMATION
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
625 Second Street - Petaluma, California 94952
THIS STATEMENT OF ADDITIONAL INFORMATION (THE "SAI") OF PERMANENT PORTFOLIO
FAMILY OF FUNDS, INC. (THE "FUND") IS NOT A PROSPECTUS AND SHOULD BE READ IN
CONJUNCTION WITH THE FUND'S PROSPECTUS DATED June 3, 1996 (THE "PROSPECTUS").
THE PROSPECTUS AND THE FUND'S ANNUAL REPORT TO SHAREHOLDERS FOR THE YEAR ENDED
JANUARY 31, 1996 MAY BE OBTAINED WITHOUT CHARGE BY REQUEST TO THE INVESTOR'S
INFORMATION OFFICE, P.O. BOX 5847, AUSTIN, TEXAS 78763.
THE FUND'S PERMANENT PORTFOLIO RESERVES A LIMITED RIGHT TO REDEEM ITS SHARES
IN KIND IN CERTAIN CIRCUMSTANCES, AS EXPLAINED HEREIN UNDER THE HEADING
"REDEMPTION OF SHARES BY THE FUND - IN-KIND REDEMPTIONS."
<PAGE>
TABLE OF CONTENTS
OBJECTIVES AND POLICIES......................................................3
The Four Portfolios......................................................3
Investment Strategy......................................................3
Permanent Portfolio..................................................3
Treasury Bill Portfolio..............................................4
Versatile Bond Portfolio.............................................4
Aggressive Growth Portfolio..........................................4
Investment Categories....................................................5
Illiquid Investments.....................................................8
Offsetting and Indirect Investments......................................9
Strategic Portfolio Adjustments..........................................13
Investment Restrictions..................................................14
MANAGEMENT...................................................................15
Investment Adviser.......................................................15
Directors and Officers...................................................17
Compensation.............................................................17
CONSULTANTS..................................................................19
DISTRIBUTIONS AND TAXES......................................................19
Foreign Taxes............................................................19
COMPUTATION OF NET ASSET VALUES..............................................19
PURCHASE OF SHARES FROM THE FUND.............................................20
REDEMPTION OF SHARES BY THE FUND.............................................20
Redemption Limitations...................................................21
In-Kind Redemptions......................................................21
Tax Consequences of In-Kind Redemptions..................................21
PORTFOLIO TRANSACTIONS AND BROKERAGE.........................................22
TRANSFER AND DIVIDEND-DISBURSING AGENT.......................................24
CUSTODIAN....................................................................24
GENERAL INFORMATION..........................................................24
Organization and Capitalization..........................................24
Income Equalization Accounting...........................................25
Calculations of Performance Data.........................................25
FINANCIAL STATEMENTS.........................................................27
<PAGE>
OBJECTIVES AND POLICIES
The Four Portfolios
The Fund has four separate portfolios (the "Portfolios"), the Permanent
Portfolio, the Treasury Bill Portfolio, the Versatile Bond Portfolio and the
Aggressive Growth Portfolio.
The Permanent Portfolio invests a fixed Target Percentage of its net assets
in gold, silver, Swiss franc assets, stocks of real estate and natural resource
companies, aggressive growth stocks, and dollar assets such as U.S. Treasury
bills, notes and bonds. The Permanent Portfolio's objective is to preserve and
increase the purchasing power value of its shares over the long term.
The Treasury Bill Portfolio invests in short-term U.S. Treasury bills, and
may also invest in U.S. Treasury bonds and notes having a remaining maturity of
thirteen months or less. The Portfolio's objective is to earn high current
income for the Portfolio, consistent with safety of principal.
The Versatile Bond Portfolio invests in a diversified portfolio of
short-term corporate bonds rated "A" or higher by Standard & Poor's. The
Portfolio's objective is to earn high current income for the Portfolio, while
limiting risk to principal.
The Aggressive Growth Portfolio invests in U.S. stock market investments
selected for high profit potential. The Aggressive Growth Portfolio's objective
is to achieve high long-term appreciation in the value of its shares.
Investment Strategy
Permanent Portfolio
The Permanent Portfolio's investment policies reflect the opinion of the
Fund's management that it is impossible to forecast inflation rates or other
economic events with a high degree of reliability and that only investors who
are willing to embrace a high degree of risk should act on such forecasts. An
investment vehicle such as the Permanent Portfolio, whose goals include the
preservation of purchasing power, should acknowledge a broad range of economic
possibilities and, in order to preserve purchasing power over the long term,
should incorporate investments for each of them. In the opinion of the Fund's
management, economic possibilities for the future are limited to the following:
1. Rising inflation. From 1960 through 1980 the rate of inflation
generally, with intermittent pauses and reversals, rose. The inflation
rate generally fell from 1980 through 1992. The Fund's management
believes that if the pattern of rising inflation resumes, the
investments most likely to appreciate would include gold, silver, Swiss
franc assets, and interests in real estate and natural resources. Gold,
silver, real estate, and natural resources tend to be profitable during
periods of rising inflation because inflation and the fear of further
inflation add to investor demand for assets whose values are not
denominated in a fiat (non-convertible) currency. Swiss franc assets
tend to appreciate during periods of rising inflation because, although
the Swiss franc is a fiat currency, the Swiss government traditionally
has acted with a high degree of restraint in permitting the issuance of
new currency. Such restraint is generally taken to indicate that a
currency will preserve its purchasing power. If the rate of inflation
does rise, the prices of common stocks (other than those of real estate
and natural resource companies) and, more especially, of dollar assets,
are likely to decline.
2. Abruptly-slowing inflation. Most periods of extended inflation in U.S.
history have been followed by abrupt declines in the rate of inflation
and, in many cases, by deflation. The Fund's management believes that if
inflation should decline abruptly (or deteriorate into a deflation), the
investments most likely to appreciate would include previously issued
dollar assets such as U.S. Treasury securities, since interest rates on
newly issued dollar investments of these types tend to decline during
periods of declining inflation, thus increasing the value of previously
issued securities. If the rate of inflation does decline abruptly, it is
likely that gold, silver, Swiss franc assets, and most common stocks
would decline in value.
3. Gradually-slowing inflation. In the event that the rate of inflation
declines slowly (a "soft landing") and the economy escapes the trauma
that has followed most inflations, the Fund's management believes that
common stocks would be among the investments most likely to appreciate.
The results for stock market issues that tend to rise and fall to a
greater degree than the stock market as a whole (the types of issues
that the Fund's management attempts to identify and include in the
Permanent Portfolio's investment portfolio as aggressive growth stocks)
would be especially favorable. In the opinion of the Fund's management,
common stocks tend to appreciate during periods of gradually declining
inflation because the effective rate of taxation faced by most operating
businesses declines in step with the inflation rate (due to the
interaction between inflation and the depreciation allowances provided
for under the Internal Revenue Code), and because the occurrence of a
soft landing indicates that the economy will not suffer the disruption
associated with an abrupt decline in inflation. If the rate of inflation
does decline gradually, it is likely that gold, Swiss franc assets, and
the stocks of real estate and natural resource companies would decline
in value.
The Permanent Portfolio attempts to achieve its objective by maintaining a
combination of investments whose purchasing power as a whole should hold steady
or increase in the variety of economic circumstances listed above. The Fund's
management is able to make no assessment as to the current state of the economy
and has no opinion as to the occurrence of any particular economic possibility
for the future.
As indicated above, the Permanent Portfolio's investments include gold,
silver, Swiss franc assets, various stock market issues, and dollar assets. The
investment categories were selected and the Target Percentages assigned in
accordance with the Fund's management's opinion of the volatility of the
investments, and their past and anticipated future performances in varying
economic circumstances. Of course, the Fund has no control over the manner in
which particular investments respond to changes in economic conditions. For
example, even in an inflationary climate there may be large-volume sellers of
gold or silver whose actions would tend to depress the prices of those
commodities.
Treasury Bill Portfolio
The Treasury Bill Portfolio's investment policies reflect the opinion of the
Fund's management that among investors' primary goals for their cash holdings
are safety and liquidity plus, when possible, a way to reduce the tax burden on
the income that cash can earn on money market investments. The Treasury Bill
Portfolio was designed for investors who wish to avoid the risk of large price
declines that can occur in the stock and bond markets and who are concerned
about the safety of banks, savings institutions and other money market funds,
but who desire tax planning to achieve a higher after-tax return than is
possible with an ordinary money market fund and check-writing privileges. The
Treasury Bill Portfolio therefore invests only in U.S. Treasury securities and
provides those shareholder services described in the Prospectus under the
heading "Shareholder Account Services and Privileges," and follows the dividend
and tax-planning policies described in the Prospectus under "Objectives and
Policies" and "Distributions and Taxes."
Versatile Bond Portfolio
The Versatile Bond Portfolio's investment policies reflect the opinion of
the Fund's management that short-term (24 months or less), investment-grade
(Standard & Poor's ratings of "A" or higher) corporate bonds historically have
provided high returns and their price fluctuations ordinarily are mild.
Constructing a portfolio from such bonds can be a formula for achieving high
current income without bearing the serious risks of buying junk bonds or
long-term corporate, municipal or U.S. Treasury bonds. In addition, the
Versatile Bond Portfolio follows the same dividend and tax-planning policies as
the Fund's other Portfolios.
Aggressive Growth Portfolio
The Aggressive Growth Portfolio's investment policies reflect the opinion of
the Fund's management that the stock market has been the most successful
long-term investment since 1926, and that an investor seeking to construct his
own investment portfolio should include an investment whose profitability is
linked directly to the stock market. The Fund's management believes that stocks
have been the most successful long-term investment because stocks represent
ownership in the engines of wealth -- factories, mines, airlines, telephone
systems, research laboratories, publishing companies, financial service
organizations and other productive enterprises -- that turn out the goods and
services people need and want. Stock market investments have earned the best
profits because they feed capital to these engines of wealth, making them even
more productive.
Stock market investors, however, need caution. While the stock market's
total return has been high, it has not been smooth or steady. Most stocks are
riskier than bonds or money market instruments; and, unlike gold, stocks are
vulnerable to inflation. And there is no guarantee that the economic growth that
underlies long-term stock market profits will continue in the future, which is
one reason a prudent investor should carefully consider how much of his capital
to invest in stocks. Stocks are tightly linked to the real world of production
and commerce, and any shock in the economy (inflation, recession, political
turmoil, bad news of any kind) can translate into a shock for the stock market.
For an investor who holds only a limited portion of his investment portfolio in
stocks, the Fund's management believes that the stocks that the investor holds
should be volatile, the kinds of stocks whose prices move faster and farther
than the stock market as a whole. In addition, volatile stocks can reduce such
an investor's portfolio's overall risk by minimizing the share of his portfolio
that needs to be devoted to stocks. With less of his overall portfolio allocated
to stocks, the investor is less vulnerable to any single economic event -- such
as inflation, deflation, or recession -- that might be disastrous for the stock
market as a whole.
The Aggressive Growth Portfolio invests in U.S. companies whose stocks have
been selected for their high, long-term appreciation potential (higher than for
the stock market as a whole). With such a selection, when the stock market as a
whole rises, the value of shares in the Aggressive Growth Portfolio should rise
more. Of course, no selection of stocks can be guaranteed to "outrun" a rising
market. While the Aggressive Growth Portfolio's stocks involve more risk than
the average stock, especially when the stock market as a whole is declining,
they also offer greater potential reward. During bull markets in stocks,
volatile stocks can put the investor on the "fast track" to high stock market
prices because, in the opinion of the Fund's management, stocks in general
typically gain much more during periods when the stock market as a whole is
rising than they lose during periods that follow when the stock market as a
whole is declining. Therefore, the Fund's management believes that in the long
term volatile stocks should outperform other stocks and can yield large profits
from a relatively small investment.
The Aggressive Growth Portfolio is fully invested in the stock market at all
times. It does not take on the unnecessary risks that come with attempts to
switch in and out of the market. Its "fully-invested" policy assures that it
will not miss out on a bull market in stocks because it has mistakenly decided
to sit on the sidelines. And the Aggressive Growth Portfolio follows the same
dividend and tax-planning policies as the Fund's other Portfolios.
Investors in the following circumstances may find that the Aggressive Growth
Portfolio can help to achieve their objectives. An investor who has only
recently begun investing and has many earning years ahead of him may be willing
to bear short-term risks for his capital, in order to maximize long-term
appreciation. An investor whose wealth is mostly tied up in real estate,
annuities, life insurance, pension plans or trusts should use whatever cash is
available to him for a stock market investment in a way that is most effective.
An investor who owns high-yielding stocks (those that pay high taxable
dividends) may improve his after-tax return by replacing the high-yielding
issues with shares in the Aggressive Growth Portfolio. Although this may tend to
increase the short-term volatility of his stock market holdings, the Portfolio's
tax planning could permit more of his stock market profits to be retained,
instead of being lost to current taxes, so that his capital may grow faster. And
an investor who is interested in short-term stock trading may acquire shares in
the Portfolio whenever he believes the time is right to invest in stocks,
knowing that the Portfolio is always fully invested in stocks and being able to
take advantage of the fact that the Portfolio invests only in volatile stocks.
Thereby he can maintain a larger position in the stock market without risking
too much of his speculative budget.
Investment Categories
Dollar assets. The Prospectus describes the investment categories and Target
Percentages of the Fund's Permanent Portfolio. As a further elaboration on the
Dollar asset investment category, and for information regarding the holdings of
the Treasury Bill Portfolio and the Versatile Bond Portfolio, please see the box
on the following page. Any dollar asset is subject to default risk, that is, the
risk that the issuer's promise to make payment will not be kept. The Fund's
management attempts to reduce this risk to a very low level by purchasing
high-grade dollar assets, i.e., those which, in the opinion of the Fund's
management, are secure enough to escape default even under deflationary economic
conditions. Consequently, the Portfolios do not invest in certificates of
deposit or commercial paper, even though the yields on such investments may be
higher than the yields on high-grade dollar assets. Long-term dollar assets,
and, to a lesser extent, short-term dollar assets, are subject to the risk of
rising interest rates. As rates rise, as they tend to do during periods of
rising inflation, the market values of dollar assets decline. See the discussion
under "Investment Strategy - Abruptly-slowing inflation" above. The degree to
which the Permanent Portfolio through its dollar assets is exposed to the risk
of rising interest rates can be measured by the average length to maturity (the
"term structure") of the Permanent Portfolio's net dollar assets (the amount of
the Permanent Portfolio's dollar assets reduced by any outstanding borrowings).
The greater the average length to maturity, the greater the risk. The average
length to maturity of the Permanent Portfolio's net dollar assets will not
exceed 15 years. For purposes of computing the average length to maturity of the
Permanent Portfolio's dollar assets, the following method is used:
(i) multiply the value of each dollar asset by the length of time until its
maturity;
(ii) compute the sum of the results of (i);
(iii) from the result of (ii), subtract the sum of the amount of each debt
(including reverse repurchase agreements) owed by the Permanent
Portfolio multiplied by the length of time until its repayment is due;
(iv) divide the result of (iii) by the Permanent Portfolio's average net
dollar assets.
<PAGE>
HIGH-GRADE DOLLAR ASSETS
U.S. Treasury Bills. Treasury bills are short-term (52 weeks or less) loans
to the U.S. Government. Treasury bills are full-faith-and-credit obligations of
the U.S. Treasury and are generally regarded as being free of any risk of
default. Treasury bills are actively traded in the open market. Because of their
short time to maturity, their day-to-day price fluctuations are small.
U.S. Treasury Notes and Bonds. Treasury notes and bonds are long-term (as
long as 30 years) loans to the U.S. Government. Like Treasury bills, they are
full-faith-and-credit obligations of the U.S. Treasury and are generally
regarded as free of any risk of default. Treasury notes and bonds are actively
traded in the open market. Because of their long maturities, they are subject to
larger day-to-day fluctuations in price than Treasury bills.
U.S. Government Agency Securities. Short-term notes and long-term bonds are
also issued by various agencies of the U.S. Government or by enterprises
sponsored by the U.S. Government, such as the Federal National Mortgage
Association and the Government National Mortgage Association. Most such notes
and bonds are not full-faith-and-credit obligations of the U.S. Treasury and
generally do not carry a direct guaranty by the U.S. Government itself. However,
because their issuers exist to carry out government programs, these securities
are generally regarded as having negligible risk of default.
High-Grade Corporate Bonds. High-grade corporate bonds are debt obligations
of corporations with a Standard & Poor's rating of "A" or higher and a remaining
time to maturity of 24 months or less, and may include corporate notes and
debentures. Such bonds are not guaranteed by the U.S. Government and are subject
to some risk of default; however, the risk of default generally is considered to
be very low. Such bonds also are subject to price fluctuations caused by changes
in open-market interest rates; however, such fluctuations are much smaller than
for long-term bonds and are only slightly greater than for U.S. Treasury bills.
The Permanent Portfolio may invest in high-grade corporate bonds which, in the
opinion of the Fund's management, are secure enough to escape default even under
deflationary economic conditions.
Banker's Acceptances. A banker's acceptance is a post-dated check written by
a business (not necessarily a major corporation) that has been "accepted" and
guaranteed by a bank. Usually, the post-dating is for no more than nine months.
The types of acceptances which the Permanent Portfolio would acquire are those
which are actively traded in the open market.
There are two, often three, guaranties behind a banker's acceptance. First,
the acceptance is an obligation of the bank that has accepted it. Second, if the
accepting bank should default on its obligation, the business that wrote the
accepted check ordinarily would be responsible for making payment to the
investor. Third, an acceptance is often secured by a pledge of merchandise or
other property. Banker's acceptances are generally regarded as among the safest
of all privately issued, short-term dollar assets. The Fund's management
considers banker's acceptances, with their multiple backings, to be
significantly safer than certificates of deposit, which represent the obligation
of a single entity.
Repurchase Agreements. In a repurchase agreement, the Permanent Portfolio
buys an investment (the "underlying security"), such as a Treasury bond, that
the seller agrees to buy back at a later date for a stated price. Repurchase
agreements entered into by the Permanent Portfolio will generally run for seven
days or less. The Permanent Portfolio earns interest on the transactions either
in the form of an explicit payment or in the form of a differential between the
purchase price and the repurchase price.
Repurchase agreements may be considered loans to sellers of the underlying
securities, with those securities constituting the collateral for the loans. The
Permanent Portfolio would suffer a loss on a repurchase agreement if the seller
defaulted on his obligation to repurchase the underlying securities when the
value of the securities had declined to less than the agreed upon repurchase
price. In order to reduce the risk of loss from such transactions, the Permanent
Portfolio will enter into repurchase agreements whose underlying securities are
only U.S. Treasury securities, U.S. Government Agency securities, and banker's
acceptances, which in the opinion of the Fund's management present only a very
small risk of default.
The Permanent Portfolio generally will enter into repurchase agreements only
with banks. It may enter into a repurchase agreement with a broker-dealer
provided that the agreement is fully collateralized and "marked to market" daily
(which would require sufficient adjustments of cash or collateral to be made
each day so that the current value of the collateral is at least equal to the
amount of the loan including accrued interest thereon). Such collateral would be
deposited with the Fund's custodian.
<PAGE>
DOLLAR ASSETS
Attached to this SAI as Appendix A are two tables that show the historical
performance of various types of dollar assets from December 1981 to January
1996. The dollar assets and their respective sources of data are the following:
30-year U.S. Treasury bonds ("T-Bonds"), coupon-equivalent yield reported by
Bank of America; 20-year U.S. Government Agency bonds through January 1995 and
30-Year U.S. Government Agency bonds thereafter ("Agency Bonds"),
coupon-equivalent yield reported by Bank of America; short-term, high-grade
corporate bonds ("STHG Bonds"), average of coupon-equivalent yields for
corporate bonds with maturities of one to two years and rated "A" or higher by
Standard & Poor's included in the Salomon Brothers Broad Investment Grade Bond
Index; 91-day U.S. Treasury bills ("T-Bills"), bank discount rate thereon
reported by the Federal Reserve System; 3-month banker's acceptances
("Acceptances"), bank discount rate thereon reported by Bank of America; 3-month
bank certificates of deposit ("CDs"), bank discount rate thereon reported by
Bank of America; overnight repurchase agreements for U.S. Government securities
("Repos"), bank discount rate thereon reported by Bank of America.
Table 1 shows, as of the last business day of each month in the period, for
T-Bonds, Agency Bonds and STHG Bonds, the respective instrument's
coupon-equivalent yield and annual yield and the current market price of an
instrument whose market price was 100 at the end of the preceding month ("Old
Bond Price"). Table 2 shows, as of the last business day of each month in the
period, the bank discount rate, the annual yield and the market price for
T-Bills, Acceptances and CDs and the bank discount rate and annual yield for
Repos. All calculations of annual yields assume reinvestment of all interest.
For STHG Bonds, the calculation of Old Bond Price assumes a term to maturity of
18 months.
STOCKS
Attached to this SAI as Appendix B is a table that shows the Dow Jones
Industrial Average and the Standard & Poor's 500 Stock Index daily from January
2, 1990 to January 31, 1996.
<PAGE>
Repurchase agreements. The Permanent Portfolio may also hold repurchase
agreements on the dollar assets described above. (The Treasury Bill Portfolio,
the Versatile Bond Portfolio and the Aggressive Growth Portfolio may also
include repurchase agreements in their assets.) See the box on the preceding
pages. A Portfolio would suffer a loss on a repurchase agreement if the seller
defaulted on his repurchase obligation when the value of the underlying
investment had declined to less than the agreed upon repurchase price. In order
to reduce the risk of loss from such transactions, a Portfolio will enter into
repurchase agreements whose underlying investments are, in the case of the
Permanent Portfolio, the Versatile Bond Portfolio and the Aggressive Growth
Portfolio, only other Dollar assets (or, in the case of the Treasury Bill
Portfolio, Treasury securities), which in the opinion of the Fund's management
present only a very small risk of default. Less than 5% of the net assets of the
Fund during the last fiscal year were subject to repurchase agreements, and the
Fund intends that less than 5% of its net assets will be subject to repurchase
agreements during the current fiscal year.
Gold. The Permanent Portfolio will buy and sell gold only to and from banks
(both U.S. and foreign), regulated U.S. commodities exchanges, exchanges
affiliated with a regulated U.S. stock exchange, and dealers who are members of,
or affiliated with members of, a regulated U.S. commodities exchange or stock
exchange or approved by the U.S. Treasury as qualified to purchase American
Eagle coins from the U.S. Mint, or interests equivalent thereto, in accordance
with applicable investment laws. They will not purchase gold from any producer
of the metal or in any form that is not readily marketable. However, to the
extent that the Permanent Portfolio actually holds gold bullion and coins, it
may encounter higher storage and transaction costs than those normally
associated with the ownership of securities. Gold generates no interest or
dividends, offering only the potential for capital appreciation.
Silver. The Permanent Portfolio's silver holdings may include bullion type
silver coins minted by the U.S. Treasury.
Swiss franc assets. The Permanent Portfolio also holds Swiss franc assets.
The Swiss franc is subject to the risk that inflation (either actual or
expected) will decrease in the U.S. or rise in Switzerland. The price of the
Swiss franc is also subject to the imposition of exchange controls; to
manipulation by the Federal Reserve System, the Swiss National Bank, and, to a
lesser extent, by other Swiss central banks and official agencies; and to
investment controls established by the Swiss or U.S. Government. While
Switzerland has historically been a politically stable nation, there is no
assurance that the country may not become subject to the risks discussed under
"Foreign Investments" in the Prospectus.
Real estate and natural resource company stocks. Investments in the
Permanent Portfolio's real estate and natural resource company stocks category
are generally common stocks, but the Permanent Portfolio may acquire preferred
stocks, shares of beneficial interest in real estate investment trusts, and
American Depository Receipts ("ADRs") on stocks within this category. The
Permanent Portfolio will invest in a security in this category only if it is
listed on a national securities exchange in the United States, the principal
exchange of a foreign country, as determined by the Board of Directors, or is an
over-the-counter stock quoted on NASDAQ.
Aggressive growth stocks. Investments in the Permanent Portfolio's
aggressive growth stocks category, and investments in the Aggressive Growth
Portfolio, may include stock warrants. Most stock warrants are subject to
expiration, which causes their value to dwindle with the passage of time. Each
of the Permanent Portfolio's and the Aggressive Growth Portfolio's total
investments in warrants is limited to a value (at the lower of cost or market)
not to exceed 5% of the Portfolio's net assets; and warrants which are not
listed on the New York or American Stock Exchanges may not exceed 2% of the
Portfolio's net assets.
Short-term corporate bonds. Investments in the Permanent Portfolio's dollar
asset category, and investments in the Versatile Bond Portfolio, may include
short-term corporate bonds rated "A" or higher by Standard & Poor's when
acquired by the Portfolio, but whose ratings subsequently have become
downgraded. Ordinarily the Portfolio will sell any investment that has been
downgraded below Standard & Poor's "A" rating, but may retain such an investment
if, in the opinion of the Fund's management, the investment still appears secure
enough to escape default even under deflationary economic conditions and if such
investments in the aggregate do not exceed 2% of the Portfolio's net assets.
Illiquid Investments
The Permanent Portfolio may hold in the aggregate a maximum of 10%, and the
Aggressive Growth Portfolio may hold in the aggregate a maximum of 5%, of its
net assets in investments that have no ready market for resale and securities
for which no readily available market quotation exists, including repurchase
agreements maturing in more than 7 days. For this purpose, securities of U.S.
issuers are deemed to have no readily available market quotation if they are
restricted securities (securities that must be registered under the Securities
Act of 1933 before they may be offered or sold to the public); securities of
non-governmental foreign issuers are deemed to have no readily available market
quotation if they are not listed or traded on a recognized domestic or foreign
securities exchange; other assets of the Portfolio are deemed to have no ready
market for resale if, in the opinion of the Fund's Board of Directors, no bona
fide market exists for the asset at the time of its purchase or subsequent
valuation. However, no investment is counted toward the limit if its bid/asked
spread (on bona fide quotes from dealers and market-makers) normally is less
than 4%, or if it is subject to a put option exercisable in 7 days or less or a
forward contract that matures in 7 days or less.
Such illiquid investments may include investments in a broker-dealer
subsidiary of the Fund in amounts not to exceed in the aggregate 1% of the
Permanent Portfolio's net assets and 2% of the Aggressive Growth Portfolio's net
assets. The Fund has, however, ordered the liquidation of its broker-dealer
subsidiary World Money Securities, Inc., and has no present plans to hold such
investments in the future. Also, see "Investment Restrictions" below.
If through the appreciation of restricted securities and other assets for
which no readily available market quotation or ready market exists or through
the depreciation of unrestricted securities or other assets for which a ready
market does exist, more than 10% of the Permanent Portfolio's net assets, or
more than 5% of the Aggressive Growth Portfolio's net assets, should be invested
in illiquid assets, then the Fund's management would consider appropriate steps
to protect its liquidity. Less than 5% of the Permanent Portfolio's assets and
less than 5% of the Aggressive Growth Portfolio's assets during the last fiscal
year were considered to be illiquid investments, and the Permanent Portfolio and
the Aggressive Growth Portfolio each intends that less than 5% of its assets
will be considered to be illiquid investments during the current fiscal year.
Offsetting and Indirect Investments
The Permanent Portfolio, in carrying out its investment and tax planning
policies and in maintaining the Target Percentage for each investment category,
and the Aggressive Growth Portfolio, in carrying out its investment and tax
planning policies, each may write covered call options and purchase put options
on stocks that it owns, make short sales of stocks that it owns, and borrow
money and enter into reverse repurchase agreements. The Permanent Portfolio also
may buy and sell gold, silver, and Swiss francs in the forward market (including
through the purchase and sale of futures contracts). None of the Permanent
Portfolio's assets during the last fiscal year was subject to or consisted of
covered call options, put options, forward contracts, short sales, borrowed
money or reverse repurchase agreements, and the Permanent Portfolio anticipates
that none of its assets will be subject to or consist of such investments or
techniques during the current fiscal year. None of the Aggressive Growth
Portfolio's assets during the last fiscal year was subject to or consisted of
covered call options, put options, short sales, borrowed money or reverse
repurchase agreements, and the Aggressive Growth Portfolio anticipates that none
of its assets will be subject to or consist of such investments or techniques
during the current fiscal year. Although these devices are commonly associated
with speculative, short-term trading, each of the Permanent Portfolio and the
Aggressive Growth Portfolio is prohibited from using them, and will not use
them, for such purpose (or in contravention of such rules and regulations or
orders as the Securities and Exchange Commission may prescribe). The Permanent
Portfolio will use short sales, forward contracts, put and call options,
borrowings and reverse repurchase agreements only to reduce discrepancies
between the Permanent Portfolio's actual holdings and the Target Percentages in
instances where the devices appear to offer an advantage in price or yield over
a direct purchase or sale of the underlying asset, or for tax planning. The
Aggressive Growth Portfolio will use such devices only in instances where they
appear to offer an advantage in price or yield over a direct purchase or sale of
the underlying asset, or for tax planning. Each of the Permanent Portfolio and
the Aggressive Growth Portfolio expects, when it uses put and call options,
forward contracts, and short sales, actually to make or accept delivery of the
underlying asset. The Permanent Portfolio and the Aggressive Growth Portfolio
would elect not to make or accept delivery only when so electing would, in the
opinion of the Fund's management, achieve an advantage in price, yield, or tax
planning. In such instances, those Portfolios would enter into an offsetting
option transaction (selling the put and purchasing the call), or an offsetting
forward transaction (selling or purchasing a forward contract, as the case might
be), or would close out the short sale by purchasing and delivering the
underlying securities. Those Portfolios generally would incur additional
brokerage costs in doing so. The Permanent Portfolio may engage in forward
contracts and short sales outside of the United States, which might entail
additional risks. See "Foreign Investments" in the Prospectus.
Because the Permanent Portfolio is required to observe the Target
Percentages and because the Permanent Portfolio and the Aggressive Growth
Portfolio each observes other restrictions governing its activities, the Fund's
management believes that the risks commonly associated with the above investment
devices are greatly reduced or eliminated.
As an example of how the Permanent Portfolio might use these devices, if the
Permanent Portfolio's actual holdings of gold exceeded the Target Percentage of
20%, the Permanent Portfolio might enter into a forward sale for the excess
amount. The quantity of gold subject to the forward sale then would be counted
as an offset against the Permanent Portfolio's actual holdings, and the payment
receivable from the forward sale would be counted as a dollar asset.
Similarly, the Permanent Portfolio might increase its position in an
investment category by making purchases in the forward market. For example, if
the Permanent Portfolio's actual holdings of silver fell below the Target
Percentage of 5%, the Permanent Portfolio might purchase silver in the forward
market and count it as silver owned. The money payable to the seller upon
delivery of the silver to the Permanent Portfolio would be counted as an offset
against the Permanent Portfolio's holdings of dollar assets.
As a further example, the Permanent Portfolio or the Aggressive Growth
Portfolio might use put and call options to effectively reduce its holdings of a
particular stock. Those Portfolios would do so by writing (selling) call options
on the shares of stock they owned and simultaneously purchasing put options
(with the same expiration date and striking price) on the same stock. The effect
of the option transactions would be virtually to eliminate the Portfolio's
interest in the price of the stock for the duration of the options, since the
net value of the option position would (within narrow limits) change dollar for
dollar with, but in the direction opposite to, changes in the price of the
stock. The combined dollar value of the stock and the option position would be
approximately fixed, but, due to competitive factors in the option market,
normally would tend to rise gradually over the life of the options. Accordingly,
while the option position remains open, the Permanent Portfolio would count the
value of the stock together with the option position as a dollar asset.
The Permanent Portfolio may borrow money or enter into reverse repurchase
agreements in order to reduce its net holdings of dollar assets to the level
called for by the Target Percentages, but the Portfolio may not and will not
borrow for the purpose of speculative, short-term trading. The amount of any
borrowing by the Permanent Portfolio would be counted as an offset against the
Permanent Portfolio's holdings of dollar assets, and the money borrowed would be
invested to increase the Permanent Portfolio's holdings in other investment
categories to the levels called for by the Target Percentages.
Additional information regarding offsetting and indirect investments appears
below.
Put and call options. In exchange for a premium, the seller (writer) of a
call option grants to the option buyer the right, until a certain expiration
date, to purchase shares of stock at a fixed price (the striking price). For a
speculative trader, the risk assumed by selling a call option is that the market
price of the underlying stock prevailing on the expiration date may be above the
option's striking price. In that case the speculative option seller (unlike the
Permanent Portfolio and the Aggressive Growth Portfolio, which would own the
underlying stock) could be forced to purchase the stock to cover the option and
deliver it to the option buyer. The difference between the option's striking
price and the stock's price in the open market would represent a loss to the
option seller.
By paying a premium, the purchaser of a put option acquires the right, until
a certain expiration date, to sell shares of stock at a fixed striking price.
For a speculative trader, the risk of purchasing a put is that the market price
of the underlying stock prevailing on the expiration date may be above the
option's striking price. In that case the option would expire worthless and the
entire amount invested in it would be lost.
The purchase of a put option simultaneously with the sale of a call option
(on the same stock and with the same striking price and expiration date) is
considered in economic effect a short sale of the underlying stock; the net
value of the option position tends to change dollar for dollar with, but in a
direction counter to, the price of the underlying stock. The Permanent Portfolio
or the Aggressive Growth Portfolio might enter into a short sale, instead of a
combined option transaction, of a particular stock that it owned if no option
were available on the stock or if the short sale provided an advantage in price
over a combined option transaction.
The combined option transaction also involves both the payment of a premium
(for the purchase of the put option) and the receipt of a premium (from the sale
of the call option). For a speculative trader, the risk of such a combined
option transaction is that the price of the underlying stock will rise. In that
case, each one-dollar rise in the price of the stock would result in a loss of
approximately one dollar on the combined option transaction.
The only type of option transaction which the Permanent Portfolio or the
Aggressive Growth Portfolio may enter into is the combined transaction described
in the preceding paragraph. However, those Portfolios will enter into such a
transaction only if they actually own the stock to which the options apply, and
they will continue to hold the option position only while they continue to hold
the stock. Thus any loss on a permissible option transaction should be
approximately equalled by a gain on the price of the stock. Consequently those
Portfolios will not be exposed to the risks normally associated with the
speculative use of put and call options.
Each of the Permanent Portfolio and the Aggressive Growth Portfolio has
adopted the following operating policies with respect to option transactions,
which may be changed only by the Fund's Board of Directors:
o the aggregate value of the stock underlying option transactions,
determined as of the date the options are entered into, will not
ordinarily exceed 10% and may not exceed 25% of such Portfolio's net
assets. Neither of such Portfolio's net assets during the last fiscal
year were subject to option transactions, and each of such Portfolios
intends that less than 5% of its net assets will be subject to option
transactions during the current fiscal year;
o the stock underlying the options must be listed on a national securities
exchange, and the option must be issued by the Chicago Board Options
Clearing Corporation;
o the aggregate premiums paid for all put options purchased by such
Portfolio and held by such Portfolio at any one time will not exceed 2%
of such Portfolio's net assets;
o the stock underlying the options must be qualified within such
Portfolio's investment categories; and
o the maximum term of the options will not exceed nine months.
Any gain (or loss) on stocks liquidated through such an option transaction
would be recognized in the year the options are exercised. During most months of
the year, options are available that do not expire until the following year.
Thus, provided that the holder of the call option which the Permanent Portfolio
or the Aggressive Growth Portfolio has sold does not exercise it before the end
of the year in which it is written, the Portfolio could use a combined option
transaction to defer recognition of a capital gain (or loss) into the following
year. In some cases those Portfolios might want to accomplish such a deferral in
order to offset the gain (or loss) of one stock position against the loss (or
gain) from the sale of other assets. In addition, the net proceeds of a stock
liquidation through a combined option transaction may be greater, even allowing
for brokerage costs, than through a direct sale.
Forward contracts. A forward purchase obligates the purchaser to pay a fixed
price for a commodity (or currency) to be delivered at a fixed date in the
future. A forward sale is the counterpart of a forward purchase; it obligates
the seller to deliver a commodity (or currency) on a fixed date in the future in
exchange for a fixed price.
Except for futures contracts (the type of forward contract that is traded on
a U.S. futures exchange), forward contracts usually are settled in cash at the
contract's maturity date. A futures contract, on the other hand, usually
involves daily settlement, in cash, of the gain or loss on the commodity's price
each day. Commodity futures contracts traded on U.S. commodity exchanges are
subject to the regulation of the exchange and of the Commodity Futures Trading
Commission under the Commodity Exchange Act, in order to prevent price
manipulation and excessive speculation, and to promote orderly and effective
commodity futures markets. Such regulations may include trading and daily price
limits, position limits, and margin requirements. Forward contracts with a bank
or dealer generally are not secured or guaranteed by an exchange, clearing
corporation, or similar entity.
Because it is possible to enter into forward purchase and sales contracts by
making an initial payment of as little as 5% (or even less) of the value of the
commodity, forward contracts can involve a high degree of risk; even a small
decline in the price of the commodity could result in the loss of most or all of
the cash invested. The Permanent Portfolio, however, will not trade in commodity
forward contracts; it will enter into forward purchases only for amounts of
commodities (or Swiss francs) needed to meet the Target Percentages, and it will
enter into forward sales only for amounts of commodities (or Swiss francs) it
actually owns that exceed the Target Percentages. Consequently the Permanent
Portfolio will not be subject to the high degree of risk associated with the
speculative use of forward contracts, although each forward transaction, viewed
in isolation, would still appear to involve the risks normally associated with
forward contracts. Furthermore, the Permanent Portfolio has adopted the
following operating policies, which may be changed only by the Fund's Board of
Directors:
o the Permanent Portfolio will use forward contracts only to acquire and
dispose of actual commodities (or Swiss francs) within the Target
Percentages, and not for any speculative purpose;
o the Permanent Portfolio will enter into forward contracts only through a
regulated U.S. commodity exchange or dealers who are members of or
affiliated with members of a regulated U.S. commodity exchange, or with
the ten largest (in assets) U.S. banks or ten largest (in assets) Swiss
commercial banks, excluding cantonal and savings banks, as determined by
the Swiss National Bank;
o the Permanent Portfolio's net assets plus borrowings by the Permanent
Portfolio and the aggregate price of all commodity forward contracts
owned by the Permanent Portfolio (measured by multiplying the number of
units to which the contracts refer by the price per unit specified) will
equal at least 300% of the aggregate price of all commodity forward
contracts owned by the Permanent Portfolio and any borrowings. If the
300% requirement specified above is not being met at any time, the
Permanent Portfolio will take the necessary steps to restore the 300%
coverage within three business days. Sales of commodity forward
contracts in order to comply with this 300% limitation may have an
adverse impact on the Permanent Portfolio;
o the Permanent Portfolio will segregate, and maintain in a segregated
account until the commodity forward purchase contract is closed out,
cash or U.S. government securities equal in value to the purchase price
required to be paid by the Permanent Portfolio due on the settlement
date under the contract;
o the Permanent Portfolio will not invest (including the placing of
additional margin deposits) more than twice the amount of the original
margin deposit in any commodity forward contract; and
o the Permanent Portfolio will not invest in, or be contingently obligated
in connection with, commodity contracts in an amount exceeding 10% of
its assets.
The assets maintained in the segregated account referred to above will
continue to be treated as dollar assets for purposes of the Target Percentages
until the settlement date under the contract.
The Permanent Portfolio did not engage in any forward contracts during the
last fiscal year, and does not intend to engage in any forward contracts during
the current fiscal year.
Short sales. A short sale obligates the seller to deliver a security at a
later, perhaps indefinite, date. In return, the seller receives a price that is
fixed on the date of the sale. For a speculative trader, the risk of making a
short sale is that the price of the security will rise, forcing the short seller
to purchase the security at a higher price than he receives from the short sale.
In principle, the potential loss is unlimited, since there is no absolute limit
on how high an investment's price might rise.
Each of the Permanent Portfolio and the Aggressive Growth Portfolio will
enter into short sales only of stocks which it contemporaneously owns, and it
will retain such stocks so long as the short position remains open. (In other
words, those Portfolios will enter into short sales "against the box.")
Consequently those Portfolios will not be exposed to the risks associated with
the speculative use of short sales. Neither the Permanent Portfolio nor the
Aggressive Growth Portfolio entered into short sales during its last fiscal
year, nor intends to enter into short sales during its current fiscal year.
Furthermore, the Permanent Portfolio and the Aggressive Growth Portfolio each
has adopted the following operating policies with respect to short sales, which
may be changed only by the Fund's Board of Directors:
o such Portfolio will limit the dollar amount of short sales at any one
time to a value ordinarily not to exceed 10% and in no instance to
exceed 25% of its net assets; and
o the value of securities of any one issuer in which such Portfolio may be
short will not exceed the lesser of 2% of the value of such Portfolio's
net assets or 2% of the securities of that class of that issuer.
For tax purposes, a capital gain (or loss) on a short sale is recognized
when the seller makes delivery of the securities he has sold short. The gain (or
loss) is long-term only if the securities had been held for more than the
applicable minimum holding period for long-term capital gains at the time of the
short sale.
Borrowed money. The purchase of investments with borrowed money can entail a
higher degree of risk from price fluctuations than a cash purchase using one's
own funds, since the borrowings allow the buyer to purchase more of the
investment than he could using only his own cash. For example, if the buyer
finances a purchase 50% with his own cash and 50% with borrowed funds, each 1%
decline in the price of the investment would result in a 2% decline in the net
value of his position in the investment. A 50% decline in price would result in
a total loss. In addition, the buyer would incur interest expense on borrowed
funds.
Because the Permanent Portfolio will borrow money only to the extent that
its holdings of dollar assets exceed the Target Percentage for dollar assets,
and because the Permanent Portfolio may use borrowed money only to purchase
investments to meet the Target Percentages, borrowing can add to the Permanent
Portfolio's risk of loss from investment price fluctuations only to the extent
that the borrowings extend the average length to maturity of the Permanent
Portfolio's net dollar assets beyond 15 years, thereby exposing the market value
of the Permanent Portfolio's dollar assets to fluctuations in prices with
changes in interest rates and other factors. However, as indicated under
"Investment Categories" above, the average length to maturity of the Permanent
Portfolio's net dollar assets may not exceed 15 years - a term structure that
the Permanent Portfolio could achieve without the use of borrowed money.
Consequently the Permanent Portfolio's ability to borrow will not increase its
potential exposure to loss from investment price fluctuations. Furthermore, the
Permanent Portfolio, the Versatile Bond Portfolio and the Aggressive Growth
Portfolio each has adopted the following operating policies with respect to
borrowings:
o the amount of money such Portfolio may borrow will be limited by the
Investment Company Act of 1940 (the "Act") so that immediately after
such borrowing the amount borrowed may not exceed 33 1/3% of the value
of such Portfolio's assets (including the amount borrowed) less its
liabilities (not including any borrowings but including the fair market
value at the time of computation of any securities with respect to which
there are open short positions). If, due to market fluctuations or other
reasons, the value of such Portfolio's assets falls below the coverage
requirement of the Act, such Portfolio will, within three business days,
reduce its debt to the extent necessary. To do this such Portfolio may
have to sell a portion of its investments at a time when it may be
disadvantageous to do so;
o such Portfolio may borrow only from banks in accordance with the Act,
and will also be subject to applicable margin limitations imposed by
regulations adopted by the Federal Reserve Board;
o in observing these limits, such Portfolio will count the proceeds of
reverse repurchase agreements (see below) as borrowed money; and
o such Portfolio will segregate, and maintain in a segregated account
until the borrowing is repaid, cash, U.S. government securities, or
other appropriate liquid assets equal to the amount borrowed. See
"Forward contracts" above for the treatment of the segregated assets.
No Portfolio engaged in any borrowings during the last fiscal year, and no
Portfolio intends to engage in any borrowings during the current fiscal year.
Reverse repurchase agreements. A reverse repurchase agreement is a special
device for borrowing money. Under such an agreement, the borrower sells an
investment (usually a bond, money market instrument, or other dollar asset) and
agrees to repurchase it later at a fixed price. Because it is possible to borrow
nearly the entire purchase price of a bond or other dollar asset through a
reverse repurchase agreement, such agreements can be used by traders to
speculate on price changes, especially price changes associated with declines in
interest rates. Such speculation is highly risky, since an unforeseen rise in
interest rates could cause a loss that equalled or even exceeded the cash
invested.
Neither the Permanent Portfolio, the Versatile Bond Portfolio nor the
Aggressive Growth Portfolio will use reverse repurchase agreements for any
speculative purpose. Reverse repurchase agreements have virtually the same
effect on a Portfolio as borrowing. Those Portfolios might enter into a reverse
repurchase agreement, instead of a borrowing, if the reverse repurchase
agreement provides an advantage in interest rate over a borrowing. None of the
Permanent Portfolio's, the Versatile Bond Portfolio's or the Aggressive Growth
Portfolio's net assets during the last fiscal year were subject to reverse
repurchase agreements, and none of such Portfolios intends that its net assets
will be subject to reverse repurchase agreements during the current fiscal year.
The Permanent Portfolio, the Versatile Bond Portfolio and the Aggressive
Growth Portfolio will count the proceeds of a reverse repurchase agreement as
borrowed money. Consequently, as in the case of direct borrowing (discussed
above) a Portfolio's use of reverse repurchase agreements should not add to its
potential risk of loss from investment price fluctuations. Furthermore, the
Permanent Portfolio, the Versatile Bond Portfolio and the Aggressive Growth
Portfolio each has adopted the following operating policies with respect to
reverse repurchase agreements:
o such Portfolio will enter into only those reverse repurchase agreements
that have a specified repurchase price;
o such Portfolio will enter into reverse repurchase agreements only with
banks; and
o such Portfolio will segregate, and maintain in a segregated account
until the reverse repurchase agreement is closed out, cash, U.S.
government securities, or other appropriate liquid assets equal to the
repurchase price. See "Forward contracts" above for the treatment of the
segregated assets.
Default risk. Put and call options, forward purchases, short sales,
borrowings, and reverse repurchase agreements all involve contracts between a
Portfolio and a bank, broker, dealer, or clearinghouse. A default by any of them
could expose the Portfolio to serious loss. Although the risk of such a loss is
small, the Fund's management intends to reduce a Portfolio's exposure by giving
preference to banks, brokers, dealers, and clearinghouses which, in the opinion
of the Fund's management, have an especially high degree of creditworthiness and
by giving preference to transactions that require the corresponding party to
pledge or otherwise deliver or establish collateral to the benefit of such
Portfolio.
Strategic Portfolio Adjustments
Because investment prices are constantly changing, the actual composition of
the Permanent Portfolio's holdings will never exactly match the Target
Percentages. Ordinarily, whenever the Permanent Portfolio's actual holdings in
any investment category deviate from the category's Target Percentage by more
than 1/10 of the Target Percentage, the Permanent Portfolio will buy or sell
investments to correct the discrepancy (unless it is corrected by changes in
market prices) and will do so within 30 days from the initial day of such
deviation.
The Permanent Portfolio's management is authorized to delay portfolio
adjustments whenever, in its opinion, extraordinary circumstances make it
desirable to do so. In the event of such a delay, the Permanent Portfolio's
actual holdings in one or more investment categories could deviate by more than
1/10 from the Target Percentages for those categories for a period in excess of
30 days. Circumstances that might occasion a delay include:
1. A disorderly market, i.e., when the differences between the buying and
selling prices (bid and asked) quoted by market makers and investment
dealers are, in the opinion of the Fund's management, abnormally large;
2. A banking crisis or other financial emergency that compromises the
ability of brokers and dealers to consummate investment transactions;
3. The inability to make a portfolio adjustment without recognizing a large
short-term capital gain; and
4. The inability to make a portfolio adjustment without jeopardizing the
Permanent Portfolio's federal tax status as a regulated investment
company.
The Permanent Portfolio will not delay portfolio adjustments called for by
the Target Percentages in anticipation of a change in the general price level of
any investment category.
A Portfolio may acquire assets from another Portfolio that are otherwise
qualified investments for the Portfolio, so long as neither Portfolio bears any
mark-up or spread and no commission, fee or other remuneration is paid in
connection with the acquisition. Any such transaction would be a cash purchase
or sale of a security for which market quotations are readily available, at its
independent current market price, in a manner consistent with SEC Rule 17a-7
under the Investment Company Act of 1940.
Investment Restrictions
The investment policies and restrictions described in the Prospectus and
this SAI are intended to remain in force indefinitely. The investment
restrictions described below have been adopted by the Fund as operating policies
and are subject to change by the Fund's Board of Directors. However, the Fund
will not change any operating policy without notifying its shareholders in
advance. The Fund will not:
1. Purchase securities of companies for the purpose of exercising control
or management.
2. Purchase securities on margin, although the Permanent Portfolio may
enter into commodity forward contracts (but only in accordance with the
operating procedures and policies contained elsewhere in the Prospectus
and this SAI) and obtain such short-term credit as may be necessary for
the clearance of purchases and sales of portfolio investments.
3. Purchase securities of any other registered open-end investment company
except as part of a merger or consolidation.
4. Invest in straddles or spreads.
5. Purchase from or sell to any officer, director or employee of the Fund,
or its adviser, or any of its partners or employees, any securities
other than shares of any Portfolio of the Fund.
6. Purchase or retain the securities of any issuer if those officers and
directors of the Fund or partners of its adviser owning individually
more than 1/2% of a class of securities of such issuer together own more
than 5% of such securities of such issuer.
7. Retain a custodian for its assets which shall be other than a bank or
trust company having at least $2,000,000 in aggregate capital, surplus
and undivided profits and, upon the resignation or inability to serve of
the custodian, the Fund shall use its best efforts to obtain and
transfer its assets to a similarly qualified custodian or submit to its
stockholders the question whether to function without such a custodian.
8. Invest more than 5% of the value of the total assets of a Portfolio in
securities of companies which together with predecessors have a record
of less than three years' continuous operation.
9. Pledge, mortgage or hypothecate assets of any Portfolio having a market
value greater than 15% of the value of that Portfolio's gross assets
(taken at cost), except to secure permitted borrowings of that
Portfolio. Less than 5% of the value of any Portfolio's gross assets
during the last fiscal year were pledged, mortgaged or hypothecated, and
each Portfolio intends that less than 5% of the value of its gross
assets will be pledged, mortgaged or hypothecated during the current
fiscal year.
10. Use as security for borrowings of any Portfolio more than 35% of value
of that Portfolio's assets. Less than 5% of value of any Portfolio's
assets during the last fiscal year were used as security for borrowings
of that Portfolio, and each Portfolio intends that less than 5% of value
of its assets will be so used during the current fiscal year.
Under the Investment Company Act of 1940, certain policies of the Fund may
not be changed unless authorized by the vote of a majority of its outstanding
voting securities. In addition to those fundamental policies described in the
Prospectus, without shareholder approval:
1. Subject to the policy regarding a wholly-owned broker-dealer subsidiary,
the Fund will not act as a securities underwriter of other issuers
except to the extent that acting as such may be necessary to dispose of
securities acquired by the Fund. (However, in connection with the
disposition of "restricted securities" and securities for which there is
no readily available market quotation, the Fund may be deemed to be an
underwriter under certain federal securities laws.)
2. The Fund will not lend its assets to its officers, directors, adviser,
or affiliates of its adviser, nor shall such persons take long or short
positions in shares of the Fund (which prohibition shall not prevent
them from acquiring such shares for investment purposes at the current
net asset value).
3. No Portfolio will concentrate its investments in any particular industry
or group of industries (i.e., no more than 25% of the value of any
Portfolio's assets, other than securities issued by the United States
government or an agency or instrumentality thereof, will be invested in
any one industry).
4. No Portfolio will invest in the stock of any issuer, other than the
United States government or an agency or instrumentality thereof, if
immediately thereafter more than 5% of that Portfolio's total assets
(taken at market value) would be invested therein. For this purpose,
options on the stock of any corporation will be deemed to be securities
issued by that corporation.
5. Subject to the policy regarding a wholly-owned broker-dealer subsidiary,
neither the Permanent Portfolio nor the Aggressive Growth Portfolio will
invest in the stock of any issuer, other than the United States
government or an agency or instrumentality thereof, if immediately
thereafter more than 10% of the outstanding voting stock of such issuer
would be held by the respective Portfolio.
6. Neither the Treasury Bill Portfolio nor the Versatile Bond Portfolio
will invest in the stock of any issuer, other than the United States
government or an agency or instrumentality thereof, if immediately
thereafter more than 10% of the outstanding voting stock of such issuer
would be held by the respective Portfolio.
7. The Permanent Portfolio will not borrow money, issue senior securities,
purchase or sell real estate (including real estate limited
partnerships) or commodities or oil, gas or other mineral leases, or
make loans to other persons, except as follows: the amount of money the
Permanent Portfolio may borrow will be limited by the Investment Company
Act of 1940 so that immediately after such borrowing the amount borrowed
may not exceed 33 1/3% of the value of the Permanent Portfolio's assets
(including the amount borrowed) less its liabilities (not including any
borrowings but including the fair market value at the time of
computation of any securities with respect to which there are open short
positions). In observing these limits, the Permanent Portfolio will
count the proceeds of reverse repurchase agreements as borrowed money.
8. Neither the Treasury Bill Portfolio, the Versatile Bond Portfolio nor
the Aggressive Growth Portfolio will borrow money, issue senior
securities, purchase or sell real estate (including limited partnership
interests) or commodities or oil, gas or other mineral leases, make
loans or lend its assets to other persons, hold more than 5% of its net
assets in investments which are not readily marketable, engage in short
sales or write put options or uncovered call options (other than as
noted above), except as follows: the amount of money any such Portfolio
may borrow will be limited by the Investment Company Act of 1940 so that
immediately after such borrowing the amount borrowed may not exceed 33
1/3% of the value of the respective Portfolio's assets (including the
amount borrowed) less its liabilities (not including any borrowings but
including the fair market value at the time of computation of any
securities with respect to which there are open short positions).
9. Notwithstanding any other policy of the Permanent Portfolio, the
Permanent Portfolio may form a wholly-owned subsidiary for the purpose
of engaging in broker-dealer activities. The total amount of the
Permanent Portfolio's capital contributions to such subsidiary shall be
limited to an amount not to exceed, in the aggregate, 1% of the net
assets of the Permanent Portfolio as of the time that any capital
contribution is made. The Permanent Portfolio shall not make any capital
contribution to such subsidiary that would increase the then current
value of the Permanent Portfolio's investment in the subsidiary to an
amount in excess of 1% of the then net assets of the Permanent
Portfolio.
MANAGEMENT
Investment Adviser
The Fund retains World Money Managers (the "Investment Adviser") as its
adviser. The Investment Adviser is a limited partnership organized in August
1981 under the laws of the State of California. The Investment Adviser's limited
partners are Terry Coxon, Robert F. Allen, Jr., Robert F. Schaub Irrevocable
Trusts, The Schaub Corporation, Sergy Living Trust, and Permanent Portfolio
Information, Inc. The Investment Adviser's general partners are Terry Coxon and
Terry Coxon, Inc., a California corporation wholly owned by Terry Coxon. Mr.
Coxon also serves as President and a director of the Fund, and Mr. Sergy,
trustee of the Sergy Living Trust, serves as Secretary and a director of the
Fund. See "Directors and Officers" below.
The services the Investment Adviser provides to the Fund and the
compensation it receives are defined in the Investment Advisory Contract (the
"Contract") between the Fund and the Investment Adviser, dated September 10,
1993. The Investment Adviser received the following advisory fees from each
Portfolio for the last three fiscal years:
Advisory Fees Paid for
Fiscal Year Ended January 31
------------------------------------------
1996 1995 1994
----------- ----------- -----------
Permanent
Portfolio $ 837,879 $ 843,663 $ 634,363
Treasury Bill
Portfolio (1) 737,357 825,228 623,703
Versatile Bond
Portfolio (1) 164,096 213,430 163,638
Aggressive Growth
Portfolio 100,276 74,694 38,518
- - - ------------------
(1) Net of fee waiver.
Prior to the current Contract, the previous contract between the Fund and
the Investment Adviser provided that each Portfolio of the Fund could pay for
the expenses of distribution of its shares, in an amount not to exceed in any
year 1/4 of 1% of the first $200 million of the Portfolio's average daily net
assets for that year, and the Portfolio could make no such expenditures with
respect to its average daily net assets in excess of $200 million. The
Investment Adviser also contributed voluntarily to the Portfolios' distribution
expenses. Payment of such expenses was effectuated through a plan adopted
pursuant to Rule 12b-1 under the Investment Company Act of 1940 and incorporated
within the previous contract. Pursuant to such plan, which was terminated
effective February 1, 1994, each Portfolio of the Fund incurred the following
aggregate distribution expenses during the fiscal years indicated below:
Distribution Expenses Paid for
Fiscal Year Ended January 31
------------------------------------------
1996 1995 1994
----------- ----------- -----------
Permanent
Portfolio $ - $ - $ 184,918
Treasury Bill
Portfolio - - 415,944
Versatile Bond
Portfolio - - 81,752
Aggressive Growth
Portfolio - - 11,223
The Investment Adviser is required by the laws of a certain state to
reimburse or rebate to the Fund, to be reallocated to the appropriate
Portfolios, the amount by which the Fund's aggregate annual expenses (calculated
to include the advisory fee and the portion of distribution expenses described
above) for any fiscal year exceed applicable expense limitations. Such
limitation currently is 2 1/2% of the first $30 million of average net assets,
2% of the next $70 million of average net assets, and 1 1/2% of the remaining
average net assets of the Fund for any fiscal year, determined monthly.
The Contract also provides that the Investment Adviser shall not be liable
to the Fund or to any shareholder for anything done or omitted by it, including
losses sustained by the Fund in the purchase, holding, or sale of any Fund
investment, except acts or omissions involving willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties imposed upon it by the
Contract.
The Contract was most recently approved by the Board of Directors of the
Fund, including a majority of the Fund's Independent Directors, on September 10,
1993; the Contract was most recently approved by a majority of the outstanding
voting securities of each of the Permanent Portfolio, the Treasury Bill
Portfolio, the Versatile Bond Portfolio and the Aggressive Growth Portfolio on
December 16, 1993.
The Contract will continue in force and may be renewed from year to year
thereafter with respect to a Portfolio, provided that any such renewal has been
specifically approved annually by the vote of a majority of the outstanding
voting securities of the Portfolio or by the Fund's Board of Directors. In
addition, to continue in force, the Contract must be approved annually by a
majority of the Fund's Independent Directors, voting in person at a meeting
called for the purpose of considering continuation of the Contract.
The Contract may be terminated by either party without penalty on 60 days'
written notice to the other party. Such termination may be effected on behalf of
the Fund by its Board of Directors or by a vote of a majority of its outstanding
voting securities, or on behalf of a Portfolio of the Fund by a vote of a
majority of the outstanding voting securities of that Portfolio. Assignment of
the Contract to another party automatically terminates it.
Additional information regarding the Contract is set forth in the Prospectus
under "Organization and Management - Investment Adviser."
Directors and Officers
The chart on the following page is provided as of May 10, 1996 as to each
director and officer of the Fund.
As of May 10, 1996, all officers and directors of the Fund as a group owned
less than 1% of the outstanding common stock of the Fund. No officer or director
has any family relationship with another. See "Investment Adviser" above. As of
May 10, 1996, the following persons are known by the Board of Directors to own
beneficially or to hold of record 5% or more of the outstanding common stock of
any class of the Fund:
Number of Shares Percent
Name (1) Held of Record of Class
- - - ---------------------------- ---------------- --------
Versatile Bond Portfolio:
Charles Schwab & Co. 19,548.392 5.959%
Aggressive Growth Portfolio:
Charles Schwab & Co. 25,743.129 9.050%
- - - ----------------
(1) The address for each holder is c/o 625 Second Street, Suite 102, Petaluma,
California 94952. No person is known by the Board of Directors to own
beneficially or to hold of record 5% or more of the shares of the Fund as a
whole.
Compensation
The Investment Adviser pays all fees, salaries and expenses of the Fund's
officers. The Fund's officers do not receive separate compensation for serving
as directors of the Fund. Each Director who is not also an officer of the Fund
receives $4,000 per year plus $600 and out-of-pocket expenses for each Board of
Directors meeting attended. For the fiscal year ended January 31, 1996, no
person received from the Fund and its subsidiary aggregate renumeration in
excess of $60,000 for services in all capacities, although all directors and
officers of the Fund as a group received from the Fund and its subsidiary
aggregate renumeration of $83,260 for services in all capacities.
<PAGE>
Position (s) Principal Occupation(s)
Name and Address (1) Held with Fund During Past 5 Years
- - - ------------------- ------------------------ ------------------------------
* Terry Coxon President and Director Investment adviser and author
since 1976; along with Terry
Coxon, Inc., a corporation
which he wholly owns and for
which he serves as President
and director, Mr. Coxon is
the general partner of the
Investment Adviser. Mr. Coxon
also has served as President
and a director since 1987 of
Bullion Security
Corporation, the sponsor of
United States Gold Trust, an
investment trust.
David Bergland Director Attorney specializing in
business litigation,
currently a sole practitioner
in Costa Mesa, California.
Mr. Bergland is also a writer,
lecturer, publisher and
Adjunct Professor of Law at
Western State University
College of Law in Irvine,
California.
Michael J. Cuggino Treasurer Certified public accountant.
Mr. Cuggino has served as
Treasurer since 1993 of World
Money Securities, Inc., the
Fund's broker-dealer
subsidiary, and Bullion
Security Corporation, and
served as Assistant Treasurer
from 1991 through 1992 of the
Fund, World Money Securities,
Inc. and Bullion Security
Corporation. Mr. Cuggino was
employed by Ernst & Young,
the Fund's former
independent auditors, in
various audit and accounting
capacities, including audit
manager, from 1985 until 1991.
** Robert B. Martin, Jr. Director Attorney specializing in tax
matters, currently a partner
in the Pasadena, California
law firm of Martin & Hudson.
* Alan Sergy Secretary and Director Registered investment adviser
and a trustee of Sergy Trusts.
Mr. Sergy has served as
Secretary and a director
since 1987 of Bullion Security
Corporation and as President
and a director since 1989 and
Secretary since 1990 of World
Money Securities, Inc.
Mark Tier Director Marketing consultant since
1992; editor of World Money
Analyst, a financial advisory
newsletter, for more than the
preceding five years.
- - - --------------------
(1) The address for each officer and director is 625 Second Street, Suite 102,
Petaluma, California 94952.
* Interested person under the Investment Company Act of 1940 because of his
association with the Investment Adviser.
** Interested person under the Investment Company Act of 1940 because of his
association with legal counsel to the Fund and the Investment Adviser.
<PAGE>
CONSULTANTS
As discussed under "Consultants" in the Prospectus, Harry Browne and Douglas
R. Casey serve as consultants to the Fund and the Investment Adviser. Each
consulting agreement may be terminated without prior notice by either the
Investment Adviser, the Fund, or the consultant. Each agreement requires the
Investment Adviser, during the term of the agreement and for 90 days after its
termination, if any, to transmit to all Fund shareholders any written statement
that the consultant may submit regarding the Fund or the Investment Adviser. In
payment for their consulting services, the general partners of the Investment
Adviser pay Mr. Browne a minimum monthly fee of $2,000 and have agreed to assign
to Mr. Casey a portion, not to exceed 10%, of their share of the profits earned
by World Money Managers in advising the Fund.
DISTRIBUTIONS AND TAXES
Dividends from net interest and dividend income and net short-term capital
gains, if any, generally will be taxable to shareholders as ordinary income. To
the extent that such distributions consist of qualifying income from certain
domestic sources, they may be subject to the 70% dividends-received deduction
for corporations. The payor of a dividend on stock (as the Fund may be) may be
required to withhold 31% of any reportable payments (which may include
dividends, capital gains distributions, and redemptions) paid to a noncorporate
shareholder if that shareholder fails to provide the Fund with a valid taxpayer
identification number. Other withholding requirements may apply to certain
foreign shareholders.
Any dividend paid by a Portfolio has the effect of reducing the Portfolio's
net asset value. Therefore, a dividend paid shortly after a shareholder's
investment in the Portfolio would represent, in substance, a return of capital
to the shareholder. Nevertheless, the distribution would be subject to the
income taxes discussed here and in the Prospectus.
Redemption of Fund shares (including redemptions under a Systematic
Withdrawal plan) is a taxable event for redeeming shareholders. Any gain or loss
realized on a sale or redemption of Fund shares by a shareholder who is not a
dealer in securities will generally be treated as a long-term capital gain or
loss if the shares have been held more than one year and otherwise as a
short-term capital gain or loss. Any such loss, however, will be treated as a
long-term capital loss to the extent of any capital gain distribution received
by the shareholder in the year in which the loss is recognized, unless the
shares have been held less than 31 days, in which case the capital loss is
disallowed to the extent of the capital gain distribution. Also, see "Redemption
of Shares by the Fund - Tax Consequences of In-Kind Redemptions."
The Fund is required by federal law to ask each shareholder to certify on
his Shareholder Account Application that the social security or taxpayer
identification number provided is correct and that he is not subject to 31%
backup withholding for previous underreporting to the IRS. If the application is
not so certified, the Fund must withhold 31% of reportable payments (which may
include dividends, capital gains distributions, and redemptions) made to those
shareholders' accounts.
Foreign Taxes
The Permanent Portfolio expects to earn interest income in Switzerland and
possibly to earn interest and dividends in other foreign countries, principally
those listed below, which levy withholding taxes on payments made to U.S.
corporations. In many cases there are tax treaties between the U.S. and a
foreign country which may qualify the Permanent Portfolio for a reduced rate of
tax, usually provided that more than 75% of the Permanent Portfolio's shares are
owned by individuals who are residents or citizens of the United States.
Assuming that the Permanent Portfolio does qualify, it may be subject to
taxes on gross interest and dividend income, withheld by sources in Australia,
Canada, South Africa, Switzerland, and the United Kingdom.
The Permanent Portfolio may be subject to withholding taxes on income
derived from sources in other countries, but the Fund's management anticipates
that the amount of such taxes will not be significant. The Permanent Portfolio
does not expect to be able to pass through any foreign tax credits to its U.S.
shareholders. The Permanent Portfolio incurred $15,959 of foreign income taxes
deducted at the source, net of refundable taxes, during its last fiscal year.
<PAGE>
COMPUTATION OF NET ASSET VALUES
The net asset values of Fund shares are computed at the close of business of
the New York Stock Exchange (usually 1:00 p.m. Pacific Time) every day that the
Exchange is open for trading ("business day"). The Exchange is generally open
for trading every Monday through Friday, but is closed for trading on certain
customary national business holidays consisting of New Year's Day, Washington's
Birthday, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day and Christmas Day. Since the Fund has significant holdings that are
principally traded on foreign exchanges which may be open for trading on days
other than the Fund's business days, the net asset values of the Fund's shares
may be significantly affected on days when investors have no access to the Fund.
All awaiting and accepted requests for purchases and redemptions of Fund shares
are executed, at a price equal to net asset value per share, immediately
following the computation. See "Purchase of Shares from the Fund" and
"Redemption of Shares by the Fund."
Net asset value per share of a Portfolio is computed by adding the current
value of all the Portfolio's assets, subtracting the amount of its liabilities
(including proper accruals of expense items), dividing the result by the total
number of outstanding shares of the Portfolio, and rounding up or down to the
nearest cent per share. The current value of Fund assets is determined as
follows: assets that are traded on one or more public exchanges (including stock
options) will be valued at their most recent price of the day on the exchange on
which they are principally traded. If there is no trading in such an asset on a
business day, the asset will be valued at the mean between its bid and ask
prices. Assets that are traded over-the-counter will be valued at the mean
between their bid and ask prices. The Fund will value gold and silver each
business day at the closing spot price on the New York Commodity Exchange, a
regulated U.S. commodity futures exchange. Deposits of Swiss francs will be
valued each business day at the 4 p.m. (Eastern Time) price (converted into U.S.
dollars) quoted by Reuters. Swiss government bonds will be valued each business
day at the closing price in Zurich, Switzerland, converted into U.S. dollars at
the 4 p.m. (Eastern Time) Swiss franc rate quoted by Reuters. Short-term
securities will be marked to market daily. Assets for which there is no public
market will be valued at the current price of substantially similar assets on
the basis of comparable marketability, maturity, quality, and type. All other
assets (including restricted securities and forward contracts with banks or
brokers) will be valued at fair value as determined in good faith by the Board
of Directors. Also, the Fund may rely upon bona fide quotations obtained from
sources other than those referred to above when doing so would, in the opinion
of the Board of Directors, better serve the fair and accurate valuation of the
Fund's assets. In the event of an extraordinary occurrence or emergency which
would affect the value of Fund assets traded on a foreign exchange, and which
the Board of Directors learns of prior to 4:00 p.m. Eastern Time, those assets
will be valued at fair value as determined in good faith by the Board of
Directors.
As of January 31, 1996 the net asset value (offering price and redemption
price) per share of Common Shares in the Permanent Portfolio was $18.80, which
was computed by dividing the Portfolio's net assets, valued as described above,
on that date ($76,640,791) by the number of its shares outstanding on that date
(4,076,533). As of that date, the net asset value per share of Common Shares in
the Treasury Bill Portfolio, the Versatile Bond Portfolio and the Aggressive
Growth Portfolio were $67.84, $56.85 and $40.65, respectively, as similarly
computed.
PURCHASE OF SHARES FROM THE FUND
Shares in each Portfolio are offered for sale continuously by the Fund.
Investors who purchase such shares directly from the Fund pay no commissions or
sales charges. The minimum initial investment in any Portfolio is $1,000.
Shareholders may make additional investments at any time in minimum amounts of
$100 per Portfolio. All requests for purchases of shares accompanied by payment
therefor are effected at a price equal to the net asset value per share, as
described under "Computation of Net Asset Values," next computed after receipt
of the properly completed request by the Fund's Transfer Agent. Please see
"Purchase of Shares from the Fund" in the Prospectus for further information.
If a shareholder sends money to the Fund without clearly indicating how it
is to be invested, the Fund's policy is to treat the money as an investment in
the Treasury Bill Portfolio.
The Fund reserves the right to reject investments in part or in whole.
Complete and detailed records for each shareholder account are maintained by
the Transfer Agent. A confirmation is sent to a shareholder at the time of each
purchase, redemption, or other transaction. Certificates for shares are issued
without charge, but only when specifically requested in writing by the investor.
Certificates are not issued for fractional interests.
Investors who purchase or redeem shares in the Fund through a broker-dealer
may be charged a transaction fee by the broker-dealer, who may place such orders
by telephone in accordance with the Fund's procedures.
<PAGE>
REDEMPTION OF SHARES BY THE FUND
Shareholders may redeem all or some of their shares in any Portfolio.
Subject to the limitations noted below, requests for redemption will be
accepted for a Portfolio on any business day. The price paid to the redeeming
shareholder is the Portfolio's net asset value per share next computed after
receipt by the Transfer Agent of the properly completed redemption request.
Redemption requests must be accompanied by certificates, if issued, and
must be sent to the Transfer Agent. Shareholders may be required to use a
redemption form provided by the Fund. The Fund may refuse redemption requests
not made in the proper manner. Please see "Redemption of Shares by the Fund" in
the Prospectus for further information.
Requests for redemption (whether in writing or by telephone) will be
processed by the Transfer Agent at the net asset value next determined after
receipt of the request. Because the net asset values per share of the Fund
fluctuate (reflecting the market value of assets owned by the Portfolios), the
amount a shareholder receives for a redemption may be more or less than the
amount of his purchase and may be more or less than the net asset value on the
date that a written redemption request is mailed. Any such redemptions are
purely voluntary on the part of the shareholder.
Redemption Limitations
The right to redeem may be limited or suspended by the Fund, or the payment
date postponed, as follows:
o for any period during which the New York Stock Exchange is closed or
trading thereon is restricted, as determined by the Securities and
Exchange Commission;
o for any period during which the Securities and Exchange Commission
determines that an emergency makes it impractical to dispose of
portfolio securities or to calculate net asset values; or
o during any period for which the Securities and Exchange Commission has
by order permitted a suspension for the protection of shareholders.
In-Kind Redemptions
Subject to the restrictions set forth below, the Fund reserves the right to
require redeeming shareholders in the Permanent Portfolio (but not shareholders
in any other Portfolio) to accept readily tradeable assets from the Permanent
Portfolio in complete or partial payment of redemptions in instances where so
doing would present an advantage to the Permanent Portfolio in pursuit of its
tax planning objectives over a sale or other disposition of the asset. Although
the Fund's management believes it is unlikely that the Fund would ever use an
asset other than gold or silver bullion or bullion coins for any such in-kind
redemption, the assets would be selected by the Fund from the Permanent
Portfolio and generally would not reflect Target Percentages. The Fund would not
require redeeming shareholders to accept any investment that is not readily
saleable.
Investors should note that an in-kind distribution might result in
inconvenience or in financial loss or gain due to price fluctuations. The risk
of financial loss would be especially great in the case of an investment subject
to high price volatility. Also, shareholders might incur high brokerage costs in
liquidating small lots of distributed investments.
In order to reduce the possibility of inconvenience or loss, the Fund has
agreed that it will not exercise its right to make an in-kind redemption unless
it has arranged, on behalf of the shareholder, a convenient opportunity to
accomplish the prompt sale of the assets through a qualified broker or dealer.
Further, the Fund will not require a shareholder to accept an asset in an
in-kind redemption if the necessary costs of selling the asset (in the form and
quantity distributed to the shareholder) exceed 2% of the asset's value at the
time of the redemption. In the event that a shareholder elected not to use the
broker or dealer provided by the Fund to sell assets distributed to him, the
Fund would deliver the assets to the shareholder or, at his request, to his
bank.
The Permanent Portfolio makes portfolio changes on the basis of investment
factors at the time and in pursuit of its investment objectives, and in order to
adhere to the Target Percentages. See "Objectives and Policies" in the
Prospectus. In accordance with these objectives, at the time the decision is
made to dispose of assets from the Permanent Portfolio, the Fund will decide
whether to sell the assets or to distribute them in satisfaction of redemption
requests.
If the Fund ever elects to dispose of assets through in-kind redemptions, it
will inform the Transfer Agent of the specific assets to be used and the order
in which to use them. The Transfer Agent thereafter would honor all redemption
requests, in the order received, by distributing the designated assets.
Generally, the Transfer Agent would continue to effect all redemption requests
with in-kind distributions until the designated assets were exhausted or until
the Fund instructed the Transfer Agent otherwise. The Fund might instruct the
Transfer Agent otherwise, for example, if the Fund no longer intended to dispose
of a designated asset or if a particular redemption request would result in a
distribution of assets that, in the estimation of the Fund's management, could
not then be sold at a cost of 2% or less of the value of the assets.
Tax Consequences of In-Kind Redemptions
Under present federal income tax laws, the tax consequences to an individual
(noncorporate) shareholder of an in-kind redemption are similar to the
consequences of a redemption for cash. See "Distribution and Taxes" in the
Prospectus. The shareholder recognizes a capital gain (or loss) equal to the
market value of the assets he receives minus the cost basis of the shares being
redeemed. (The Fund would inform a shareholder as to its determination of the
market value of any assets distributed to him.) The gain would be recognized by
the shareholder in the period when the redeemed assets became constructively
available to the shareholder (or the loss would be recognized immediately on the
day the redemption is consummated), even though the shareholder did not
subsequently sell the assets. The shareholder's cost basis in the assets
distributed in kind would equal their market value at the time of the
redemption. The federal income tax consequences of an in-kind redemption to a
corporate shareholder are complex, and corporations considering investing in the
Fund should consult their tax advisers in this regard. Generally, no capital
gain or loss would be recognized by a Portfolio upon a distribution of assets
through an in-kind redemption.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Fund's portfolio transactions are recommended by the Investment Adviser
and placed by the Fund's officers. The objective of the Fund in effecting
portfolio transactions is to obtain the best available prices, taking into
account services and the costs and promptness of executions. Some of the Fund's
purchases and sales of investments will be made directly with dealers and
market-makers, usually without brokerage commissions. In other cases the Fund
will use a broker-dealer and will pay commissions. In many foreign countries,
commission rates are fixed by governmental or exchange regulation or by industry
agreement, and may be higher or lower than those charged on comparable
transactions in the United States. There currently is no agreement or commitment
to place orders with any dealer, market-maker or broker-dealer. The Fund in the
past had directed certain portfolio transactions to World Money Securities, Inc.
("WMSI"), its wholly owned broker-dealer subsidiary. In February 1996, the Fund
ordered the liquidation of WMSI and has no current intention of having a
broker-dealer subsidiary in the future. Please see the chart below for
information on commissions paid by the Portfolios.
Neither the Fund's Board of Directors, its officers nor the Investment
Adviser intends to request research, statistical, securities pricing, or other
related services from any broker-dealer beyond what the broker-dealer provides
to its customers generally, nor will the Fund's Board of Directors, its officers
or the Investment Adviser pay any broker additional commissions on portfolio
transactions as an inducement to sell Fund shares. Nevertheless, the Fund's
officers may, in circumstances in which two or more broker-dealers are in a
position to offer comparable prices and execution, give preference to those
which have provided research, statistical, and related services to the Fund or
the Investment Adviser for the benefit of the Fund. The Investment Adviser
believes that while research and related services may be useful in varying
degrees, they are of indeterminable value and may or may not reduce the expenses
of the Investment Adviser.
The Fund's Board of Directors does not consider that it has an obligation to
obtain the lowest available commission rate with respect to portfolio
transactions to the exclusion of price, service, and qualitative considerations.
Nevertheless, the officers of the Fund and the general partners of the
Investment Adviser are authorized to negotiate payment only for brokerage
services rendered and not for research, statistical, or other services. The
Fund's Board of Directors does not authorize the payment of commissions to
brokers in recognition of their having provided such services, in excess of
commissions other qualified brokers would have charged for handling comparable
transactions.
<PAGE>
Each Portfolio paid the following commissions, including commissions paid to
WMSI, and had the following portfolio turnover rates during the last three
fiscal years:
Fiscal Year Ended January 31
----------------------------------
1996 1995 1994
-------- -------- --------
Total commissions paid
Permanent Portfolio $ 23,768 $ 19,238 $ 34,159
Treasury Bill Portfolio 0 0 0
Versatile Bond Portfolio 0 0 0
Aggressive Growth Portfolio 11,612 8,329 9,298
Commissions paid to WMSI
Permanent Portfolio 5,199 6,158 6,027
Treasury Bill Portfolio 0 0 0
Versatile Bond Portfolio 0 0 0
Aggressive Growth Portfolio 0 0 0
Percentage of commissions paid to WMSI
to total commissions paid
Permanent Portfolio 21.87% 32.01% 17.64%
Treasury Bill Portfolio 0% 0% 0%
Versatile Bond Portfolio 0% 0% 0%
Aggressive Growth Portfolio 0% 0% 0%
Percentage of aggregate dollar amount of
transactions involving the payment of
commissions effected through WMSI
Permanent Portfolio .96% .31% .14%
Treasury Bill Portfolio 0% 0% 0%
Versatile Bond Portfolio 0% 0% 0%
Aggressive Growth Portfolio 0% 0% 0%
Portfolio turnover rate
Permanent Portfolio 9.96% 31.24% 49.51%
Treasury Bill Portfolio N/A N/A N/A
Versatile Bond Portfolio 51.64% 74.62% 75.05%
Aggressive Growth Portfolio 18.94% 26.29% 29.83%
- - - -------------------------------
<PAGE>
TRANSFER AND DIVIDEND-DISBURSING AGENT
The Fund's transfer and dividend disbursing agent is Chase Global Funds
Services Company, P.O. Box 2798, Boston, Massachusetts 02208 (the "Transfer
Agent"), telephone number 1-800-341-8900 (from outside Massachusetts) or
1-617-557-8000.
The Transfer Agent maintains the records of each shareholder account,
answers shareholders' inquiries concerning their accounts, processes purchases
and redemptions of the Fund's shares, acts as dividend and disbursing agent, and
performs other related shareholder service functions. See "Redemption of Shares
from the Fund - In-Kind Redemptions."
The Investment Adviser pays all customary fees and charges of the Transfer
Agent incurred by the Fund (See "Management - Investment Adviser").
CUSTODIAN
The Fund's custodian is State Street Bank and Trust Company, P.O. Box 1713,
Boston, Massachusetts 02105 (the "Custodian"). The Custodian receives and
deposits cash, holds all securities and other evidences of investments of the
Fund, receives and delivers securities and other investments bought or sold by
the Fund, and receives and collects income from the Fund's investments. From
time to time, but only upon direction of the Fund's management, some of the
Fund's assets may be held in the London, Zurich, or other foreign offices of the
Custodian's sub-custodians or foreign custodians which are qualified to act as
such under the Investment Company Act of 1940, in accordance with Rule 17f-5
thereunder.
The custodian agreement between the Fund and the Custodian requires the
Custodian to hold the Fund's assets in strict segregation; the custodial
agreement prohibits commingling of the Fund's assets with assets owned by the
Custodian, and it requires the Custodian to receive and maintain the Fund's
assets in a form and condition that would make them readily identifiable as
customer property in an audit or in the event that the Fund appoints a successor
custodian.
In executing portfolio transactions, the Custodian acts as an agent for the
Fund but has no part in the management or investment decisions of the Fund or in
the Fund's general administration. The Custodian does not provide trusteeship
protection or protection for investors against possible depreciation of assets.
The Investment Adviser pays all customary fees and charges of the Custodian
incurred by the Fund (See "Management - Investment Adviser").
GENERAL INFORMATION
Organization and Capitalization
The Fund was incorporated under the laws of Maryland on December 14, 1981
under the name "Permanent Portfolio Fund, Inc." and changed its name to
"Permanent Portfolio Family of Funds, Inc." on August 10, 1988. The Fund's
offices are located at 625 Second Street, Suite 102, Petaluma, California 94952.
WMSI, a wholly-owned subsidiary of the Fund's Permanent Portfolio and a
registered broker-dealer, received brokerage commissions of $5,199, $6,158 and
$6,027 from the Fund during its last three fiscal years, respectively. In
February 1996, the Fund ordered the liquidation of WMSI and has no current
intention of having a broker-dealer subsidiary in the future.
The Fund's present authorized capitalization is 500,000,000 shares, $.001
par value per share, divided into two classes consisting of 150,000,000 shares
of preferred stock and 350,000,000 shares of common stock. The Fund is currently
authorized and has registered to issue an indefinite number of shares of its
common stock, in series, each corresponding to one Portfolio. Upon issuance and
sale, shares of the Fund are fully paid and nonassessable, have no preemptive
rights and are freely transferable. Shareholders may require redemption of their
shares. See "Redemption of Shares from the Fund."
Holders of shares in each Portfolio are entitled to vote separately on any
change in the Fund's investment policy, as provided in Section 13(a) of the
Investment Company Act and on all matters on which the Investment Company Act,
other applicable law or the Articles of Incorporation of the Fund require a vote
by Portfolios. Otherwise, all Fund shareholders have equal voting rights, vote
as a single class and are entitled to one vote per share.
The Fund will hold an annual meeting of its shareholders in any year in
which an annual meeting is required under Maryland law and the charter and
bylaws of the Fund. Maryland law and the Fund's bylaws provide that the Fund is
not required to hold an annual meeting in any year in which the election of
directors is not required to be acted upon under the Investment Company Act of
1940. In any year in which the election of directors is not presented to its
shareholders, the Fund will call a meeting of shareholders for the purpose of
voting upon the question of removal of any director if requested in writing so
to do by the record holders of not less than 10% of its outstanding shares and
assist with shareholder communications as required under Section 16(c) of the
Investment Company Act of 1940.
The Fund has no other securities outstanding. However, from time to time the
Board of Directors may authorize the Fund to issue additional shares of common
or preferred stock, in series, with such rights and preferences as will be
determined by the Board of Directors in authorizing any such shares. Any
offering or sale by the Fund of shares of additional series or classes to the
public would be subject to effective registration of the shares as necessary
under federal and state securities laws.
Income Equalization Accounting
The Fund follows an accounting practice known variously as "equalization" or
"income equalization." When a share in a Portfolio is purchased by an investor,
the Portfolio's undistributed income account is increased by an amount equal to
the Portfolio's undistributed income per share immediately before the purchase.
When a share is redeemed, the Portfolio's undistributed income account is
decreased by an amount equal to the Portfolio's undistributed income per share
immediately before the redemption. The effect of income equalization accounting,
and the Fund's purpose for using it, is to prevent purchases and redemptions
from influencing a Portfolio's undistributed net income per share.
Calculations of Performance Data
From time to time the Fund in accordance with applicable regulations may
advertise performance data or reprint material from the Fund's consultants or
other investment authors which contain performance data or represent that
consultant's or author's views on such matters as portfolio strategy, basic
trends in domestic and international finance and on the criteria for evaluating
and holding investments. In addition, fund performance may be compared to
statistical information and well-known indices of market performance, such as
those included in Appendices A and B hereto. Please see "Consultants" in the
Prospectus for additional information regarding the Fund's consultants and
material authored by them.
The results shown below do not represent or guarantee the gain or loss to be
realized from an investment in the Fund. The investment return and principal
value of an investment in the Fund will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
The following table shows the average annual total return for the Permanent
Portfolio, the Versatile Bond Portfolio and the Aggressive Growth Portfolio,
assuming hypothetical initial investment in shares of $1,000, reinvestment of
all dividends and distributions, deduction of all fees and expenses except the
$35 one-time account start-up fee, and complete redemption of the investment at
the end of the respective periods. Such calculations were made according to the
following formula: P(1+T)n = ERV, where P = a hypothetical initial investment in
shares of $1,000, T = average annual total return, n = number of years and ERV =
ending redeemable value at the end of the respective period of a hypothetical
$1,000 investment in shares made at the beginning of the respective period.
Permanent Portfolio:
One-year period ended January 31, 1996: 16.11%
Five-year period ended January 31, 1996: 7.10%
Ten-year period ended January 31, 1996: 6.36%
Thirteen-year, 62-day period since inception of the Portfolio
(December 1, 1982) to January 31, 1996 5.22%
Versatile Bond Portfolio:
One-year period ended January 31, 1996: 7.17%
Four-year, 127-day period since inception of the Portfolio
(September 27, 1991) to January 31, 1996: 4.66%
Aggressive Growth Portfolio:
One-year period ended January 31, 1996: 33.69%
Five-year period ended January 31, 1996: 19.10%
Six-year, 29-day period since inception of the Portfolio
(January 2, 1990) to January 31, 1996: 13.81%
The yield and effective yield for the Treasury Bill Portfolio for the
seven-day period ended January 31, 1996, were 5.39% and 5.53%, respectively,
assuming a hypothetical pre-existing account having a balance of one share at
the beginning of the period, reinvestment of all dividends and distributions
during the period, deduction of the $1.50 monthly account maintenance fees in
proportion to the length of the base period and relative to the size of the
account but not deduction of the $35 one-time account start-up fee, and dividing
the difference by the value of the account at the beginning of the base period
to obtain the base period return. For yield, that return is annualized; for
effective yield, that return is annualized and compounded.
The yield on the Versatile Bond Portfolio will be based on a 30-day (or one
month) period and will be computed by dividing the net investment income (i.e.,
dividends and interest earned during the period less expenses accrued for the
period, net of reimbursements) per share earned during the period by the net
asset value per share on the last day of the period, using the average number of
shares outstanding during the period, deducting the $1.50 monthly account
maintenance fees in proportion to the length of the base period and relative to
the size of the account but not deducting the $35 one-time account start-up fee,
and then annualizing the result. The yield on the Versatile Bond Portfolio as so
computed for the 30 days ended January 31, 1996 was 3.59%.
The following examples show how the Fund's tax-planning policies described
in the Prospectus under "Distributions and Taxes" can increase an investor's
after-tax return. The illustrations assume, hypothetically, that a Portfolio of
the Fund earns a net annual return of 8% and adds all of it to share value,
without paying any per-share dividends.
A $100,000 investment yielding 8% in the form of taxable interest or
dividends, such as CDs or a money market fund that paid out all of its daily
investment income in the form of taxable dividends, would give the investor only
$5,760 after paying 28% in tax. Suppose, instead, that the investor invests
$100,000 to purchase 2,000 shares in the Portfolio at $50 per share, with the
intention of withdrawing an amount equal to all the earnings on his investment
each year for the indefinite future. One year later the redemption value of each
share would have risen to $54, and the investment would be worth $108,000. To
collect the $8,000 gain, the investor would request a redemption on his
shareholder account in that amount, and the Portfolio would redeem 148.15 shares
from the investor's account, at $54 per share, to pay the $8,000 redemption.
Taxes payable on that redemption would be calculated as follows:
Shares redeemed 148.15
Redemption price per share $54
Gain per share $4
Gain (taxable) $593
Tax @ 28% $166
After-tax, spendable cash $7,834
Thus the Portfolio's first-year cash advantage would be $2,074 ($7,834
versus $5,760), or 36% more spendable cash than from any investment paying the
same annual return in the form of taxable interest or dividends. And the
investor would begin the second year with his $100,000 intact. First-year cash
advantages of a Portfolio over another investment paying the same annual return
in the form of taxable interest or dividends would not be materially different
over a wide range of other assumed annual returns. For example, at assumed
annual returns of 12%, 10%, 6%, 4% and 2%, a Portfolio's first-year cash
advantage would be 35%, 35%, 37%, 37%, and 38%, respectively.
Similar benefits would be achieved year after year, although not as great as
the first year. For example, continuing the same assumptions for 10 years, the
investor's total in-pocket cash advantage would exceed $15,000, or 26% more cash
over the 10-year period. And even if the Portfolio adds only half of its income
to share value (paying the other half out as a taxable dividend), the first-year
cash advantage would be $1,077, or 19% more than any investment paying the same
annual return in the form of taxable dividends. Investors should note, however,
that these benefits are achieved by deferring, not by eliminating, the payment
of taxes. Thus the overall benefit may be small if the investor holds all his
Portfolio shares for only a few years. When he redeems shares, the deferral
comes to an end and the deferred gains on those shares become taxable.
The advantage increases if the investor lets his gains accumulate. The share
value can grow year by year, compounding free of current tax, until the day he
chooses to redeem. Continuing the hypothetical illustrations and the assumed 8%
rate of return, $20,000 invested in CDs or a money market fund that paid out all
of its daily investment income in the form of taxable dividends would grow,
after 20 years of after-tax compounding, to only $61,300. But an investment in
the Portfolio (under the same assumptions as above) would grow to $93,219 in the
same period. Even if the entire Portfolio investment were liquidated after the
20th year and taxed at 28%, its after-tax value would be $72,718.
Letting gains accumulate also gives the investor greater flexibility in his
personal tax planning. If the investor is in a low tax bracket in a later year
he can redeem his appreciated Portfolio shares to take advantage of the low tax
bracket.
If the investor uses the Portfolio as an estate planning tool, the
accumulated gains may never be subject to income tax. Generally, when an
investment passes to the investor's heirs on his death, all potential liability
for capital gain tax is left behind. His heirs get a stepped-up basis and can
sell the investment without paying capital gains tax on the appreciation
accumulated during the investor's lifetime.
Of course, while the tax-planning advantages of an investment in the Fund
may be substantial, these simplified illustrations are only hypothetical. In
practice, investment yields fluctuate, and it cannot be known in advance what
portion of its income a Portfolio will add to share value each year (it is
unlikely to add all of it) and what portion the Portfolio will pay out in
ordinary dividends. Also, other investments may earn higher before-tax returns
by accepting risks that the Fund avoids.
FINANCIAL STATEMENTS
The financial statements of the Fund at January 31, 1996 and for the two
years in the period then ended are set forth below. Except for periods ending
prior to February 1, 1994, which were audited by other auditors whose report
dated March 18, 1994, expressed an unqualified opinion on those financial
statements, such financial statements have been audited by KPMG Peat Marwick
LLP, independent auditors, as set forth in their report thereon included
therein, and are included herein in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing. The Fund will
furnish, without charge, a copy of the Fund's Annual Report to Shareholders for
the year ended January 31, 1996, on request to the Investor's Information Office
listed on the front cover.
No person is authorized to give any information or to make any
representation not contained in this Statement of Additional Information or in
the Prospectus in connection with the matters described herein and therein. If
given or made, such information or representation must not be relied upon as
having been authorized.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
ANNUAL REPORT
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Permanent Portfolio Family of Funds, Inc.
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of Permanent Portfolio Family of Funds, Inc.
(comprising, respectively, the Permanent Portfolio, the Treasury Bill Portfolio,
the Versatile Bond Portfolio and the Aggressive Growth Portfolio), as of January
31, 1996, and the related statements of operations for the year then ended, and
the statements of changes in net assets and financial highlights for each of the
two years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits. All periods indicated in the accompanying financial
highlights ending prior to February 1, 1994, were audited by other auditors
whose report dated March 18, 1994, expressed an unqualified opinion on this
information.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
January 31, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting Permanent Portfolio Family of Funds,
Inc. as of January 31, 1996, the results of their operations, the changes in
their net assets and their financial highlights for the periods indicated
herein, except as noted above, in conformity with generally accepted accounting
principles.
KPMG PEAT MARWICK LLP
San Francisco, California
March 15, 1996
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
January 31, 1996
ASSETS AND LIABILITIES
ASSETS
Investments at market value (Notes 1, 2, 4 & 5):
Investments other than securities:
Gold assets ..............................................................
Silver assets ............................................................
Swiss franc deposits .....................................................
Swiss franc bonds ...........................................................
Stocks of United States and foreign real estate and natural resource companies
Aggressive growth stock investments .........................................
Investment in an affiliate ..................................................
Corporate bonds .............................................................
United States Treasury securities ...........................................
Total investments (identified cost $68,192,094; $113,118,803; $19,681,027;
and $7,726,194, respectively)
Cash ..........................................................................
Accounts receivable for shares of the portfolio sold ..........................
Accrued interest, dividends and foreign taxes receivable ......................
Total assets
LIABILITIES
Bank overdraft ................................................................
Accounts payable for shares of the portfolio redeemed .........................
Accounts payable for investments purchased ....................................
Accrued investment advisory fee ...............................................
Accrued excise tax ............................................................
Total liabilities
Net assets applicable to outstanding shares
NET ASSETS
Capital stock - par value $.001 per share:
Authorized - 100,000,000; 100,000,000; 10,000,000; and 25,000,000 shares,
respectively
Outstanding - 4,076,533; 1,690,168; 354,239; and 272,239 shares,
respectively ..............................................................
Paid-in capital ...............................................................
Undistributed net investment income (Note 1) ..................................
Accumulated net realized gain (loss) on investments ...........................
Accumulated net realized gain on foreign currency transactions ................
Net unrealized appreciation of investments .....................................
Net unrealized appreciation on translation of assets and liabilities in foreign
currencies ....................................................................
Net assets applicable to outstanding shares
Net asset value per share
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Permanent Portfolio Treasury Bill Portfolio Versatile Bond Portfolio Aggressive Growth Portfolio
------------------- ----------------------- ------------------------ ---------------------------
<C> <C> <C> <C>
$ 15,270,315 $ - $ - $ -
3,913,874 - - -
321,168 - - -
------------ ------------ ------------- ------------
19,505,357 - - -
6,655,985 - - -
11,503,851 - - -
12,033,261 - - 11,068,690
55,358 - - -
800,944 - 18,791,723 -
25,421,316 113,177,760 1,063,012 -
------------ ------------ ------------- ------------
75,976,072 113,177,760 19,854,735 11,068,690
78,626 - - 138,442
130,338 18,334 - 9,500
629,723 1,806,772 332,022 3,852
------------ ------------ ------------- ------------
76,814,759 115,002,866 20,186,757 11,220,484
- 13,701 315 -
3,000 82,144 14,035 -
- - - 142,010
64,854 53,338 10,931 7,498
106,114 186,368 24,309 4,393
------------ ------------ ------------- ------------
173,968 335,551 49,590 153,901
------------ ------------ ------------- ------------
$ 76,640,791 $114,667,315 $ 20,137,167 $ 11,066,583
============ ============ ============= ============
$ 4,077 $ 1,690 $ 354 $ 272
59,926,897 110,283,616 18,426,753 7,610,262
------------ ------------ ------------- ------------
59,930,974 110,285,306 18,427,107 7,610,534
6,927,153 4,340,131 1,672,573 97,512
1,605,027 (17,079) (136,221) 16,041
384,941 - - -
7,783,978 58,957 173,708 3,342,496
8,718 - - -
------------ ------------ ------------- ------------
$ 76,640,791 $114,667,315 $ 20,137,167 $ 11,066,583
============ ============ ============= ============
$18.80 $67.84 $56.85 $40.65
====== ====== ====== ======
</TABLE>
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
STATEMENTS OF OPERATIONS
Year ended January 31, 1996
Investment income:
Interest ....................................................................
Dividends ...................................................................
Expenses (Notes 3, 7 & 8):
Investment advisory fee .....................................................
Directors' fees and expenses ................................................
Excise tax ..................................................................
Regulatory expense ..........................................................
Commitment fee ..............................................................
Total expenses
Less waiver of investment advisory fee expense ............................
Net expenses
Net investment income (loss) before foreign income taxes deducted at source
Less foreign income taxes deducted at source, net of refundable taxes .........
Net investment income (loss)
Realized and unrealized gain (loss) on investments and foreign currency (Notes
1, 2, 4 & 5):
Net realized gain (loss) on:
Investments in unaffiliated issuers .........................................
Investments other than securities ............................................
Foreign currency transactions ...............................................
Change in unrealized appreciation (depreciation) of:
Investments .................................................................
Translation of assets and liabilities in foreign currencies .................
Net realized and unrealized gain (loss) on investments
and foreign currency
Net increase in net assets resulting
from operations
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Permanent Portfolio Treasury Bill Portfolio Versatile Bond Portfolio Aggressive Growth Portfolio
------------------- ---------------------- ------------------------ ---------------------------
<C> <C> <C> <C>
$ 2,583,525 $ 6,615,356 $ 1,325,506 $ 18,254
557,055 - - 83,894
------------ ------------ ------------- ------------
3,140,580 6,615,356 1,325,506 102,148
837,879 1,325,627 245,372 100,276
10,993 17,781 3,264 1,718
108,890 186,368 24,309 4,393
26,100 22,233 1,646 848
10,000 - - -
------------ ------------ ------------- ------------
993,862 1,552,009 274,591 107,235
- 588,270 81,276 -
------------ ------------ ------------- ------------
993,862 963,739 193,315 107,235
------------ ------------ ------------- ------------
2,146,718 5,651,617 1,132,191 (5,087)
15,959 - - -
------------ ------------ ------------- ------------
2,130,759 5,651,617 1,132,191 (5,087)
------------ ------------ ------------- ------------
1,206,285 (4,256) (1,737) 104,190
(186,696) - - -
384,941 - - -
------------ ------------ ------------- ------------
1,404,530 (4,256) (1,737) 104,190
7,555,020 68,077 397,527 2,236,677
(19,075) - - -
------------ ------------ ------------- ------------
8,940,475 63,821 395,790 2,340,867
------------ ------------ ------------- ------------
$ 11,071,234 $ 5,715,438 $ 1,527,981 $ 2,335,780
============ ============ ============= ============
</TABLE>
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Permanent Portfolio
-----------------------------------
Year ended Year ended
January 31, 1996 January 31, 1995
---------------- ----------------
<S> <C> <C>
Operations:
Net investment income (loss) .............................................. $ 2,130,759 $ 1,990,773
Net realized gain (loss) on investments ................................... 1,019,589 (209,558)
Net realized gain on foreign currency transactions ........................ 384,941 425,151
Change in unrealized appreciation (depreciation) of investments ........... 7,555,020 (5,998,661)
Change in unrealized appreciation (depreciation) on translation of
assets and liabilities in foreign currencies ........................... (19,075) 27,793
------------ ------------
Net increase (decrease) in net assets resulting from operations 11,071,234 (3,764,502)
Equalization on shares issued and redeemed: ................................. (467,059) 46,544
Distributions to shareholders from:
Net investment income ..................................................... (1,517,212) (949,685)
Net realized gain on investments .......................................... - -
Capital stock transactions exclusive of amounts allocated to undistributed
net investment income (Note 6): ........................................... (4,055,817) (2,765,425)
------------ ------------
Net increase (decrease) in net assets 5,031,146 (7,433,068)
Net assets at beginning of year 71,609,645 79,042,713
------------ ------------
Net assets at end of year (including undistributed net investment income
of $6,927,153 and $6,530,118; $4,340,131 and $4,095,285; $1,672,573 and
$2,043,196; $97,512 and $36,965, respectively) $ 76,640,791 $ 71,609,645
============ ============
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Treasury Bill Portfolio Versatile Bond Portfolio Aggressive Growth Portfolio
- - - ------------------------------------ ----------------------------------- --------------------------------------
Year ended Year ended Year ended Year ended Year ended Year ended
January 31, 1996 January 31, 1995 January 31, 1996 January 31, 1995 January 31, 1996 January 31, 1995
- - - ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<C> <C> <C> <C> <C> <C>
$ 5,651,617 $ 4,472,190 $ 1,132,191 $ 1,093,206 $ (5,087) $ (2,937)
(4,256) (12,823) (1,737) (134,484) 104,190 413,502
- - - - - -
68,077 20,468 397,527 (286,684) 2,236,677 (665,360)
- - - - - -
------------ ------------- ------------ ------------ ----------- -----------
5,715,438 4,479,835 1,527,981 672,038 2,335,780 (254,795)
(832,446) (3,116,665) (396,154) (1,606,019) 7,218 (384)
(2,879,288) (1,179,051) (680,753) (578,352) (28,111) (6,071)
- - - (4,906) (385,888) (4,047)
(9,002,323) (12,488,118) (2,543,288) (11,935,372) 2,380,042 (178,351)
------------ ------------- ------------ ------------ ----------- -----------
(6,998,619) (12,303,999) (2,092,214) (13,452,611) 4,309,041 (443,648)
121,665,934 133,969,933 22,229,381 35,681,992 6,757,542 7,201,190
------------ ------------- ------------ ------------ ----------- -----------
$114,667,315 $ 121,665,934 $ 20,137,167 $ 22,229,381 $11,066,583 $ 6,757,542
============ ============= ============ ============ =========== ===========
</TABLE>
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1996
<CAPTION>
Quantity Market Value
- - - ----------------- ------------
<C> <S> <C>
GOLD ASSETS - 19.92% of Total Net Assets
11,997 Troy Oz. Gold bullion (a) ......................................................... $ 4,866,094
24,757 Coins One-ounce gold coins (a) .................................................. 10,334,810
4,297 Units United States Gold Trust (a)(c) ........................................... 69,411
------------
Total Gold Assets (Cost $14,918,799) $ 15,270,315
------------
SILVER ASSETS - 5.11% of Total Net Assets
446,824 Troy Oz. Silver bullion (a) ........................................................ $ 2,486,574
379 Bags Silver coins (a) .......................................................... 1,427,300
------------
Total Silver Assets (Cost $4,643,504) $ 3,913,874
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Amount SWISS FRANC ASSETS - 9.10% of Total Net Assets
- - - ----------------
<C> <S> <C>
SF 389,352 Swiss francs in interest-bearing bank accounts ............................ $ 321,168
------------
SF 3,700,000 5.250% Swiss Confederation bonds, 02-11-98 ................................ 3,224,491
SF 4,000,000 4.000% Swiss Confederation bonds, 03-10-99 ................................ 3,431,494
------------
Total Swiss Confederation bonds 6,655,985
------------
Total Swiss Franc Assets (Cost $5,677,980) $ 6,977,153
------------
</TABLE>
<TABLE>
<CAPTION>
Number STOCKS OF UNITED STATES AND FOREIGN REAL ESTATE AND NATURAL
Of Shares RESOURCE COMPANIES - 15.01% of Total Net Assets
---------
<C> <S> <C>
NATURAL RESOURCES - 5.59% of Total Net Assets
14,300 Broken Hill Proprietary, Ltd. ............................................. $ 804,375
12,000 Burlington Resources ...................................................... 450,000
17,200 Cypress Amax Minerals Company ............................................ 455,800
11,600 Forest Oil Corporation (a) ................................................ 133,400
12,000 Inco, Ltd. ................................................................ 420,000
40,000 Pogo Producing Company .................................................... 1,155,000
25,600 Santa Fe Energy Resources, Inc. (a) ...................................... 246,400
60,000 Westmoreland Coal Company (a) ............................................. 157,500
10,000 Weyerhaeuser Company ..................................................... 461,250
------------
$ 4,283,725
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1996
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
REAL ESTATE - 9.42% of Total Net Assets
14,500 BRE Properties, Inc. Class A .............................................. $ 538,313
13,000 Burnham Pacific Properties, Inc. .......................................... 130,000
19,000 Federal Realty Investment Trust ........................................... 406,125
29,700 HRE Properties ............................................................ 400,950
47,000 IRT Property Company ...................................................... 446,500
34,200 MGI Properties ............................................................ 581,400
21,000 New Plan Realty Trust ..................................................... 462,000
20,100 Pennsylvania Real Estate Investment Trust ................................. 417,075
27,600 Real Estate Investment Trust of California ................................ 565,800
55,000 Security Capital Pacific Trust ............................................ 1,079,375
24,900 Texas Pacific Land Trust .................................................. 647,400
47,200 United Dominion Realty Trust, Inc. ........................................ 708,000
25,500 Washington Real Estate Investment Trust ................................... 417,563
37,300 Western Investment Real Estate Trust ...................................... 419,625
-----------
$ 7,220,126
-----------
Total Stocks of United States and Foreign Real Estate and Natural
Resource Companies (Cost $8,161,741) $11,503,851
-----------
AGGRESSIVE GROWTH STOCK INVESTMENTS, INCLUDING AN INVESTMENT
IN AN AFFILIATE - 15.77% of Total Net Assets
AGGRESSIVE GROWTH STOCK INVESTMENTS - 15.70% of Total Net Assets
CHEMICALS - .67% of Total Net Assets
6,200 Air Products and Chemicals, Inc. ......................................... $ 330,925
9,000 Wellman, Inc. ............................................................ 180,000
-----------
$ 510,925
COMPUTER SOFTWARE - .74% of Total Net Assets
7,000 Autodesk, Inc. ........................................................... $ 211,750
1 Symantec Corporation warrant (a)(e) ...................................... 353,321
-----------
$ 565,071
CONSTRUCTION - .45% of Total Net Assets
2,500 Fluor Corporation ........................................................ $ 167,500
16,900 Manville Corporation warrants (a) ........................................ 57,038
8,000 The Ryland Group, Inc. .................................................... 118,000
-----------
$ 342,538
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1996
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
DATA PROCESS1NG - .84% of Total Net Assets
3,900 Hewlett-Packard Company ................................................... $ 330,525
5,300 Seagate Technology, Inc. (a) ............................................. 314,025
----------
$ 644,550
ELECTRICAL AND ELECTRONICS - 2.21% of Total Net Assets
30,600 DSC Communications Corporation (a) ....................................... $ 891,225
10,000 Intel Corporation ........................................................ 552,344
14,500 National Semiconductor Corporation (a) .................................... 250,125
----------
$1,693,694
ENTERTAINMENT AND LEISURE - 2.23% of Total Net Assets
2,500 The Walt Disney Company .................................................. $ 160,625
4,500 Harcourt General, Inc. ................................................... 175,500
24,000 Harrah's Entertainment, Inc. (a) ......................................... 660,000
12,000 Promus Hotel Corporation (a) .............................................. 300,000
12,600 Sizzler International, Inc. .............................................. 44,100
2,100 Tribune Company .......................................................... 131,513
5,900 Viacom, Inc. Class A (a) .................................................. 236,000
----------
$1,707,738
FINANCIAL SERVICES - 1.58% of Total Net Assets
3,000 Bank of New York, Inc. warrants (a) ..................................... $ 123,000
6,525 Bank of Petaluma (a) ...................................................... 92,981
8,000 The Bear Stearns Companies, Inc. ......................................... 184,000
4,000 Morgan Stanley Group, Inc. ............................................... 190,500
17,474 The Charles Schwab Corporation ........................................... 436,850
4,000 State Street Boston Corporation .......................................... 181,500
----------
$1,208,831
MANUFACTURING - 2.84% of Total Net Assets
23,000 Collins Industries, Inc. warrants (a) .................................... $ 719
5,000 Dana Corporation ......................................................... 164,375
20,000 Harley-Davidson, Inc. ..................................................... 690,000
5,100 Harnischfeger Industries, Inc. ............................................ 172,763
3,500 Illinois Tool Works, Inc. ................................................ 214,813
8,495 Mattel, Inc. ............................................................. 273,964
2,000 Nacco Industries, Inc. Class A ........................................... 105,250
8,000 Nacco Industries, Inc. Class B ........................................... 421,000
4,000 Parker Hannifin Corporation .............................................. 136,500
----------
$2,179,384
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1996
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
OIL AND OILFIELD SERVICES - .23% of Total Net Assets
20,000 Parker Drilling Company (a) ............................................... $ 115,000
18,200 Wainoco Oil Corporation (a) ............................................... 59,150
-----------
$ 174,150
PHARMACEUTICALS - 1.26% of Total Net Assets
10,000 Abbott Laboratories ....................................................... $ 422,500
1,200 Biogen, Inc. (a) .......................................................... 84,300
1,441 Chiron Corporation (a) .................................................... 165,715
7,000 Genzyme Corporation warrants (a) .......................................... 294,000
-----------
$ 966,515
RETAIL - .39% of Total Net Assets
12,000 Price/Costco, Inc. (a) .................................................... $ 187,500
5,000 Toys "R" Us, Inc. (a) ...................................................... 110,625
-----------
$ 298,125
TRANSPORTATION - .94% of Total Net Assets
12,300 Atlantic Southeast Airlines, Inc. ......................................... $ 226,781
4,600 Kansas City Southern Industries, Inc. ..................................... 209,300
8,000 M.S. Carriers, Inc. (a) .................................................... 128,000
20,000 Mesa Airlines, Inc. (a) .................................................... 161,250
-----------
$ 725,331
MISCELLANEOUS - 1.32% of Total Net Assets
12,000 Bethlehem Steel Corporation (a) ........................................... $ 181,500
5,000 Browning-Ferris Industries, Inc. ........................................... 147,500
7,490 Lockheed Martin Corporation ............................................... 564,559
2,800 Temple-Inland, Inc. ....................................................... 122,850
-----------
$ 1,016,409
-----------
$12,033,261
-----------
INVESTMENT IN AN AFFILIATE - .07% of Total Net Assets
100 World Money Securities, Inc. (a)(b)(e) .................................... $ 55,358
-----------
$ 55,358
-----------
Total Aggressive Growth Stock Investments (Cost$6,837,692),
including an Investment in an Affiliate $12,088,619
-----------
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1996
<CAPTION>
Principal Amount Market Value
---------------- ------------
<C> <S> <C>
DOLLAR ASSETS - 34.22% of Total Net Assets
CORPORATE BONDS - 1.05% of Total Net Assets
$ 800,000 5.250% ITT Corporation, 02-15-96 .......................................... $ 800,944
------------
$ 800,944
UNITED STATES TREASURY SECURITIES - 33.17% of Total Net Assets
41,000,000 United States Stripped Principal Only Treasury bonds 6.370%, 05-15-18 (f).. $ 10,125,770
800,000 United States Treasury bonds 6.250%, 08-15-23 ............................ 814,984
1,000,000 United States Treasury notes 5.125%, 03-31-96 ............................. 1,000,220
2,000,000 United States Treasury notes 6.750%, 02-28-97 ............................. 2,037,820
1,200,000 United States Treasury notes 6.125%, 05-31-97 ............................. 1,218,252
300,000 United States Treasury notes 6.000%, 08-31-97 ............................. 304,791
3,000,000 United States Treasury notes 7.750%, 01-31-00 ............................ 3,275,190
3,145,000 United States Treasury bills 4.320%, 02-08-96 (f) ........................ 3,141,979
2,600,000 United States Treasury bills 5.310%, 07-25-96 (f) ........................ 2,532,400
1,000,000 United States Treasury bills 4.670%, 09-19-96 (f) ........................ 969,910
------------
$ 25,421,316
------------
Total Dollar Assets (Cost $27,952,378) $ 26,222,260
------------
Total Portfolio - 99.13% of total net assets (identified cost $68,192,094)(d) $ 75,976,072
Other assets, less liabilities (.87% of total net assets) 664,719
------------
Net assets applicable to outstanding shares $ 76,640,791
============
<FN>
Note:(a) Non-income producing.
(b) Restricted security.
(c) Affiliated investment trust.
(d) Aggregate cost for Federal income tax purposes was $62,212,362.
(e) Market value determined by the Board of Directors.
(f) Interest rate represents yield to maturity.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE TREASURY BILL PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1996
<CAPTION>
Principal Amount Market Value
---------------- ------------
<C> <S> <C>
UNITED STATES TREASURY SECURITIES - 98.70% of Total Net Assets
$18,000,000 United States Treasury notes 4.625%, 02-15-96 ............................. $ 17,999,100
22,000,000 United States Treasury notes 4.625%, 02-29-96 ............................. 21,994,940
22,000,000 United States Treasury notes 5.125%, 03-31-96 ............................. 22,004,840
31,000,000 United States Treasury notes 5.500%, 04-30-96 ............................. 31,037,510
7,000,000 United States Treasury notes 4.250%, 05-15-96 ............................. 6,985,860
7,000,000 United States Treasury notes 5.875%, 05-31-96 ............................. 7,019,250
6,000,000 United States Treasury notes 7.500%, 12-31-96 ............................. 6,136,260
-------------
Total Portfolio - 98.70% of total net assets (identified cost $113,118,803)(a) $ 113,177,760
Other assets, less liabilities (1.30% of total net assets) 1,489,555
-------------
Net assets applicable to outstanding shares $ 114,667,315
=============
<FN>
Note:(a) Aggregate cost for Federal income tax purposes.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE VERSATILE BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1996
<CAPTION>
Principal Amount Market Value
---------------- ------------
<C> <S> <C>
CORPORATE BONDS - 93.32% of Total Net Assets
AEROSPACE - 9.97% of Total Net Assets
$1,000,000 8.375% Boeing Company, 03-01-96 .......................................... $ 1,002,580
1,000,000 5.650% Lockheed Martin Corporation, 04-01-97 ............................. 1,004,680
------------
$ 2,007,260
BEVERAGES - 11.38% of Total Net Assets
1,275,000 7.750% Coca-Cola Company, 02-15-96 ....................................... $ 1,276,556
1,000,000 7.875% PepsiCo, Inc., 08-15-96 ............................................ 1,014,080
------------
$ 2,290,636
CHEMICALS - 5.07% of Total Net Assets
1,000,000 8.450% DuPont EI DeNemours & Company, 10-15-96 ........................... $ 1,021,860
------------
$ 1,021,860
ENVIRONMENTAL - 5.04% of Total Net Assets
1,000,000 6.375% WMX Technologies, Inc., 07-01-97 ................................... $ 1,015,130
------------
$ 1,015,130
FINANCIAL SERVICES - 15.14% of Total Net Assets
1,000,000 7.375% American General Finance Corporation, 11-15-96 .................... $ 1,016,400
1,000,000 6.875% Associates Corporation of North America, 01-15-97 ................. 1,015,470
1,000,000 7.900% International Lease Finance Company, 10-01-96 ..................... 1,017,490
------------
$ 3,049,360
INSURANCE - 10.29% of Total Net Assets
1,000,000 9.375% Saint Paul Companies, Inc., 06-15-97 .............................. $ 1,051,940
1,000,000 7.625% Travelers Group, Inc., 01-15-97 ................................... 1,020,900
------------
$ 2,072,840
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE VERSATILE BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1996
<CAPTION>
Principal Amount Market Value
---------------- ------------
<C> <S> <C>
MEDICAL EQUIPMENT - 5.01% of Total Net Assets
$1,000,000 8.375% Becton, Dickinson & Company, 06-01-96 ............................. $ 1,009,740
------------
$ 1,009,740
PHARMACEUTICALS - 10.02% of Total Net Assets
1,000,000 7.750% Merck & Company, 05-01-96 .......................................... $ 1,005,740
1,000,000 6.500% Pfizer, Inc., 02-01-97 ............................................ 1,012,470
------------
$ 2,018,210
TELECOMMUNICATIONS - 11.33% of Total Net Assets
1,000,000 7.500% Pacific Northwest Bell Telephone Company, 12-01-96 ................ $ 1,018,340
1,250,000 8.300% Southwestern Bell Telephone Company, 06-01-96 ..................... 1,262,287
------------
$ 2,280,627
TOBACCO - 5.04% of Total Net Assets
1,000,000 8.875% Philip Morris Companies, Inc., 07-01-96 ........................... $ 1,014,530
------------
$ 1,014,530
UTILITIES - 5.03% of Total Net Assets
1,000,000 6.125% Southern California Edison Company, 07-15-97 ...................... $ 1,011,530
------------
$ 1,011,530
------------
Total Corporate Bonds (Cost $18,618,904) $ 18,791,723
------------
UNITED STATES TREASURY SECURITIES - 5.28% of Total Net Assets
1,000,000 United States Treasury notes 5.625%, 01-31-98 ............................ $ 1,013,060
50,000 United States Treasury bills 4.320%, 02-08-96(b) .......................... 49,952
------------
Total United States Treasury Securities (Cost $1,062,123) $ 1,063,012
------------
Total Portfolio - 98.60% of total net assets (identified cost $19,681,027)(a) $ 19,854,735
Other assets, less liabilities (1.40% of total net assets) 282,432
------------
Net assets applicable to outstanding shares $ 20,137,167
============
<FN>
Note: (a) Aggregate cost for Federal income tax purposes.
(b) Interest rate represents yield to maturity.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE AGGRESSIVE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1996
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
AGGRESSIVE GROWTH STOCK INVESTMENTS - 100.02% of Total Net Assets
CHEMICALS - 4.34% of Total Net Assets
6,000 Air Products and Chemicals, Inc. .......................................... $ 320,250
8,000 Wellman, Inc. ............................................................. 160,000
----------
$ 480,250
COMPUTER SOFTWARE - 4.26% of Total Net Assets
6,100 Autodesk, Inc. ............................................................ $ 184,525
4,200 Computer Associates International, Inc. ................................... 287,175
----------
$ 471,700
CONSTRUCTION - 5.56% of Total Net Assets
5,200 Fluor Corporation ......................................................... $ 348,400
20,000 Manville Corporation warrants (a) ........................................ 67,500
13,500 The Ryland Group, Inc. .................................................... 199,125
----------
$ 615,025
DATA PROCESSING - 9.03% of Total Net Assets
12,827 AST Research, Inc. (a) .................................................... $ 101,013
5,500 Hewlett-Packard Company ................................................... 466,125
7,300 Seagate Technology, Inc. (a) .............................................. 432,525
----------
$ 999,663
ELECTRICAL & ELECTRONICS - 5.91% of Total Net Assets
6,200 DSC Communications Corporation (a) ........................................ $ 180,575
5,700 Intel Corporation ......................................................... 314,836
9,200 National Semiconductor Corporation (a) .................................... 158,700
----------
$ 654,111
ENTERTAINMENT AND LEISURE - 10.46% of Total Net Assets
3,700 The Walt Disney Company ................................................... $ 237,725
5,100 Harcourt General, Inc. .................................................... 198,900
34,300 Sizzler International, Inc. ............................................... 120,050
4,800 Tribune Company .......................................................... 300,600
7,500 Viacom, Inc. Class A (a) .................................................. 300,000
----------
$1,157,275
FINANCIAL SERVICES - 13.64% of Total Net Assets
2,600 Bank of New York, Inc. warrants (a) ...................................... $ 106,600
14,679 The Bear Stearns Companies, Inc. .......................................... 337,617
5,600 Morgan Stanley Group, Inc. ................................................ 266,700
21,600 The Charles Schwab Corporation ............................................ 540,000
5,700 State Street Boston Corporation ........................................... 258,638
----------
$1,509,555
MANUFACTURING - 11.17% of Total Net Assets
8,400 Dana Corporation ......................................................... $ 276,150
6,900 Harnischfeger Industries, Inc. ............................................ 233,738
4,300 Illinois Tool Works, Inc. ................................................. 263,913
7,987 Mattel, Inc. .............................................................. 257,581
6,000 Parker Hannifin Corporation ............................................... 204,750
----------
$1,236,132
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE AGGRESSIVE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 1996
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
OIL AND OILFIELD SERVICES - 2.01% of Total Net Assets
17,000 Parker Drilling Company (a) .............................................. $ 97,750
38,400 Wainoco Oil Corporation (a) ............................................... 124,800
-----------
$ 222,550
PHARMACEUTICALS - 9.26% of Total Net Assets
5,600 Amgen, Inc. (a) .......................................................... $ 336,700
6,200 Biogen, Inc. (a) ......................................................... 435,550
6,000 Genzyme Corporation warrants (a) ......................................... 252,000
-----------
$ 1,024,250
RETAIL - 4.75% of Total Net Assets
15,200 Price/Costco, Inc. (a) .................................................... $ 237,500
13,000 Toys "R" Us, Inc. (a) ..................................................... 287,625
-----------
$ 525,125
TRANSPORTATION - 9.44% of Total Net Assets
11,700 Atlantic Southeast Airlines, Inc. ......................................... $ 215,719
5,600 Kansas City Southern Industries, Inc. ..................................... 254,800
17,000 M.S. Carriers, Inc. (a) ................................................... 272,000
37,500 Mesa Airlines, Inc. (a) .................................................. 302,344
-----------
$ 1,044,863
MISCELLANEOUS - 10.19% of Total Net Assets
15,600 Bethlehem Steel Corporation (a) ........................................... $ 235,950
7,000 Browning-Ferris Industries, Inc. .......................................... 206,500
6,100 Lockheed Martin Corporation .............................................. 459,788
5,150 Temple-Inland, Inc. ....................................................... 225,953
-----------
$ 1,128,191
-----------
<CAPTION>
Total Portfolio - 100.02% of total net assets (identified cost $7,726,194)(b) $11,068,690
Liabilities, less other assets (.02% of total net assets) (2,107)
-----------
Net assets applicable to outstanding shares $11,066,583
===========
<FN>
Note:(a) Non-income producing.
(b) Aggregate cost for Federal income tax purposes.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 1996
1. SIGNIFICANT ACCOUNTING POLICIES
Permanent Portfolio Family of Funds, Inc. (the "Fund") is registered under
the Investment Company Act of 1940 as a no-load, open-end, series
management investment company. The Fund commenced operations as the
Permanent Portfolio, the Treasury Bill Portfolio, the Versatile Bond
Portfolio and the Aggressive Growth Portfolio on January 8, 1982, May 26,
1987, September 27, 1991 and January 2, 1990, respectively. Investment
operations in the Permanent Portfolio, the Treasury Bill Portfolio, the
Versatile Bond Portfolio and the Aggressive Growth Portfolio commenced on
December 1, 1982, September 21, 1987, November 12, 1991 and May 16, 1990,
respectively.
The following significant accounting policies are consistently followed by
the Fund in the preparation of its financial statements, and such policies
are in conformity with generally accepted accounting principles for
registered investment companies. The preparation of such financial
statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses earned and incurred,
respectively, during the reporting period. Actual results could differ from
those estimates.
Valuation of investments
Investments are valued at market. Securities for which market quotations
are readily available are valued at the latest sale price. Unlisted
securities or securities for which the most active market is
over-the-counter are valued at the mean between the closing bid and asked
prices. Swiss francs are valued at the closing spot price on the
International Monetary Market. Swiss Confederation bonds are valued at the
closing price in Zurich, Switzerland, converted into U.S. dollars at 4 p.m.
(Eastern Time). Investments in gold and silver are valued based on the
closing spot prices on the New York Commodity Exchange. Short-term
securities are valued at market daily. Investments for which there is no
active market are valued at fair value as determined by the Board of
Directors. At January 31, 1996, two investments in the Permanent Portfolio
(0.53)% of total net assets) were so valued.
Investment transactions and investment income
Investment transactions are accounted for on the date of purchase, sale or
maturity. Interest income is accrued daily and includes amortization of any
premium and discount for financial and tax reporting purposes. Dividend
income is recorded on the ex-dividend date. Realized gains and losses from
securities transactions and unrealized appreciation or depreciation of
investments are recorded on an identified cost basis for financial and tax
reporting purposes.
For the year ended January 31, 1996, investment income was earned as
follows:
<TABLE>
<CAPTION>
Permanent Treasury Bill Versatile Bond Aggressive Growth
Portfolio Portfolio Portfolio Portfolio
------------ ------------- -------------- -----------------
<S> <C> <C> <C> <C>
Interest on:
Corporate bonds $ 47,920 $ - $ 1,284,978 $ -
Swiss franc assets 353,868 - - -
United States Treasury securities 2,123,141 6,534,854 16,587 154
Other investments 58,596 80,502 23,941 18,100
Dividends 557,055 - - 83,894
------------ ------------ ------------ -----------
Total $ 3,140,580 $ 6,615,356 $ 1,325,506 $ 102,148
============ ============ ============ ===========
</TABLE>
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 1996
Translation of foreign currencies
Amounts denominated in or expected to settle in foreign currencies are
translated into U.S. dollars on the following basis: (i) market value of
investment securities and other assets and liabilities are translated at
the closing rate of exchange at January 31, 1996; and (ii) purchases and
sales of investment securities, income and expenses are translated at the
rate of exchange prevailing on the respective dates of such transactions.
The Fund separately reports the portions of the results of operations
attributable to the effect of changes in foreign exchange rates on the
value of investments. Reported net realized foreign exchange gains or
losses arise from sales of foreign currencies; foreign currency gains or
losses realized between the trade and settlement dates on securities
transactions; and the difference between the amounts of dividends, interest
and foreign withholding taxes recorded on the Fund's books verses the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains arise from changes in the exchange rate applicable
to cash, receivables and liabilities denominated in foreign currencies at
January 31, 1996.
Federal income taxes
Each of the Fund's Portfolios will continue to be treated as a separate
regulated investment company and each Portfolio intends to qualify under
Subchapter M of the United States Internal Revenue Code of 1986, as amended
(the "Code"). Accordingly, no provision has been made for United States
income taxes, as each Portfolio intends to declare necessary dividend
distributions from investment company taxable income and net realized
capital gains, if any, to its shareholders prior to October 15, 1996
pursuant to the requirements of the Code.
At January 31, 1996, capital loss carryforwards available to offset future
realized gains, if any, aggregate approximately: $149,000 in the Treasury
Bill Portfolio, of which $4,000, $99,000, $41,000, and $5,000 expire on
January 31, 2001, January 31, 2002, January 31, 2003 and January 31, 2004,
respectively; and $136,000 in the Versatile Bond Portfolio, of which
$102,000 and $34,000 expire on January 31, 2003 and January 31, 2004,
respectively. There were no capital loss carryforwards in the Permanent
Portfolio or the Aggressive Growth Portfolio. Additionally, net capital
losses of approximately $3,000, in the Treasury Bill Portfolio are
attributable to investment transactions that occurred after October 31,
1995 and are recognized for Federal income tax purposes as arising on
February 1, 1996, the first day of the Portfolio's next taxable year.
Pursuant to the Code, 30.11% and 96.80% of the distributions made from
investment company taxable income in 1995 by the Permanent Portfolio and
Aggressive Growth Portfolio, respectively, qualify for the corporate
dividends received deduction.
Distributions
Distributions to shareholders from net investment income and realized gain
on investments, if any, are recorded on the ex-dividend date. The amount of
such distributions are determined in accordance with the Code which may
differ from generally accepted accounting principles. These differences
result primarily from different treatment of net investment income and
realized gains on certain investment securities held by the Fund's
Portfolios. During the year ended January 31, 1996, the Fund reclassified
from undistributed net investment income to paid-in capital, certain book
and tax basis differences relating to shareholder distributions, totaling
$174,604, $1,695,037, $425,907 and $833 for the Permanent Portfolio, the
Treasury Bill Portfolio, the Versatile Bond Portfolio and the Aggressive
Growth Portfolio, respectively. Additionally, $425,151 in the Permanent
Portfolio was reclassified from accumulated net realized gain on foreign
currency transactions to undistributed net investment income and $87,360 in
the Aggressive Growth Portfolio was reclassified from accumulated net
realized gain on investments to undistributed net investment income, due to
these differences. At January 31, 1996, undistributed net investment income
exceeds amounts distributable under the Fund's distribution policy referred
to above by approximately $5,300,000, $900,000 and $14,000 for the
Permanent Portfolio, the Versatile Bond Portfolio and the Aggressive Growth
Portfolio, respectively. Undistributed net investment income in the
Treasury Bill Portfolio at January 31, 1996, approximately equals amounts
distributable under the Fund's aforementioned distribution policy.
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 1996
Equalization
The Fund follows the accounting practice of equalization, by which a
portion of the proceeds from sales and a portion of the costs of
redemptions of shares of capital stock are allocated to undistributed net
investment income. The effect of this practice is to prevent the
calculation of net investment income per share from being affected by sales
or redemptions of shares in each Portfolio, and for periods of net
issuances of shares, allows undistributed net investment income to exceed
distributable investment company taxable income.
2. INVESTMENTS IN AFFILIATED ISSUERS
During fiscal year 1990, the Permanent Portfolio acquired from World Money
Managers ("WMM"), the Fund's investment adviser and distributor for that
Portfolio, a 100% interest in World Money Securities, Inc. ("WMS"), a
registered broker-dealer and distributor for the Fund's Treasury Bill
Portfolio, Versatile Bond Portfolio and Aggressive Growth Portfolio.
Additional investments could be made in WMS, provided that the cost of all
investments did not exceed 1% of the net assets of the Permanent Portfolio
at the date of the additional investment. During the year ended January 31,
1996, no additional investments by the Permanent Portfolio were permitted
in WMS. At January 31, 1996, the cost basis of the investment was $924,881
and the investment was valued at $55,358 (0.07% of total net assets) which
approximated fair value as determined by the Board of Directors. The
Permanent Portfolio did not receive any dividends or interest from WMS, an
illiquid, restricted security, during the year then ended. On February 17,
1996, the Fund's Board of Directors voted to discontinue the business of
WMS and directed the Board of Directors of WMS to prepare a Plan of
Liquidation (the "Plan"). The Plan provides for the realization and
satisfaction of all of WMS's remaining assets and liabilities,
respectively, and the termination of WMS's existence. Assets of WMS
remaining after completion of the Plan, if any, will be distributed to the
Permanent Portfolio as a liquidating dividend. The Fund's management
believes any such dividend will be immaterial to the Permanent Portfolio's
financial position.
The Permanent Portfolio held 4,297 units of United States Gold Trust, an
affiliated investment trust, resulting in net unrealized appreciation of
$3,465 at January 31, 1996. The Permanent Portfolio received no income from
this investment during the year ended January 31, 1996. Commissions paid to
WMS relating to purchases and sales of these units aggregated $5,199 during
the year then ended.
3. INVESTMENT ADVISORY CONTRACT
In accordance with the terms of an Investment Advisory Contract (the
"Contract"), WMM receives monthly, a comprehensive advisory fee computed at
the following annual rate: (i) for each Portfolio, 1/4 of 1% of the first
$200 million of the Portfolio's average daily net assets; plus (ii) for the
Fund as a whole: 7/8 of 1% of the first $200 million of the Fund's average
daily net assets; 13/16 of 1% of the next $200 million of the Fund's
average daily net assets; 3/4 of 1% of the next $200 million of the Fund's
average daily net assets; and 11/16 of 1% of the Fund's average daily net
assets in excess of $600 million, such fee for the Fund as a whole to be
allocated among the Portfolios in proportion to their net assets. Effective
January 1, 1996, WMM has voluntarily agreed to continue to waive for at
least the current calendar year ending December 31, 1996, portions of the
advisory fee allocable to the Treasury Bill Portfolio and to the Versatile
Bond Portfolio to the extent that either Portfolio's total advisory fee
otherwise would exceed an annual rate of 5/8 of 1%, in the case of the
Treasury Bill Portfolio, or 3/4 of 1%, in the case of the Versatile Bond
Portfolio, of the respective Portfolio's average daily net assets.
Thereafter, WMM reserves the right to revoke, reduce or change the waiver
prospectively upon five days' written notice to the Fund.
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 1996
All fees and expenses directly attributable to a Portfolio are borne
entirely by that Portfolio; all other such fees and expenses are allocated
among the Fund's Portfolios in proportion to their net assets. Except for
the comprehensive advisory fee, the fees and expenses of the Fund's
directors who are not also officers of the Fund, excise taxes and
extraordinary expenses as defined by the Contract, WMM pays or reimburses
the Fund for substantially all of the Fund's ordinary operating expenses
out of its comprehensive advisory fee.
WMM is a limited partnership of which one of the general partners is the
President and a director of the Fund and the other general partner is a
corporation wholly owned by the same individual.
4. PURCHASES AND SALES OF SECURITIES
The following is a summary of purchases and sales of securities other than
short-term securities for the year ended January 31, 1996:
<TABLE>
<CAPTION>
Permanent Treasury Bill Versatile Bond Aggressive Growth
Portfolio Portfolio Portfolio Portfolio
----------- ------------- -------------- -----------------
<S> <C> <C> <C> <C>
Purchases................................ $ 4,838,405 None $11,294,439 $ 3,443,783
Sales.................................... 6,791,631 None 14,529,474 1,442,456
</TABLE>
5. NET UNREALIZED APPRECIATION OF INVESTMENTS
<TABLE>
The following is a summary of net unrealized appreciation of investments at
January 31, 1996 for federal income tax purposes:
<CAPTION>
Permanent Treasury Bill Versatile Bond Aggressive Growth
Portfolio Portfolio Portfolio Portfolio
------------- ------------- -------------- -----------------
<S> <C> <C> <C> <C>
Aggregate gross unrealized appreciation of
investments with excess of value over tax cost:
Investments in securities of
unaffiliated issuers .................... $ 16,120,647 $ 58,957 $ 173,708 $ 3,575,831
Investments other than securities........ 430,522 - - -
------------- --------- ---------- -----------
16,551,169 58,957 173,708 3,575,831
Aggregate gross unrealized depreciation
of investments with excess of tax
cost over value:
Investments in securities of unaffiliated
issuers ................................. (1,118,557) - - (233,335)
Investments other than securities........ (799,379) - - -
Investment in an affiliated issuer....... (869,523) - - -
------------- --------- ---------- -----------
(2,787,459) - - (233,335)
------------- --------- ---------- -----------
Net unrealized appreciation
of investments $ 13,763,710 $ 58,957 $ 173,708 $ 3,342,496
============= ========= ========== ===========
</TABLE>
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 1996
6. CAPITAL STOCK TRANSACTIONS
<TABLE>
Transactions in shares of each Portfolio's capital stock exclusive of
amounts allocated to undistributed net investment income were as follows
for the the years ended January 31, 1996 and 1995:
<CAPTION>
Permanent Portfolio
---------------------------------------------------------------------------------
1996 1995
---------------------------------------- -------------------------------------
Shares Dollars Shares Dollars
---------------- -------------------- ------------------- ----------------
<S> <C> <C> <C> <C>
Shares sold...................... 361,698 $ 5,920,587 516,273 $ 7,024,021
Distributions reinvested......... 76,064 1,415,559 54,412 880,926
--------- ------------ ---------- ------------
437,762 7,336,146 570,685 7,904,947
Shares redeemed.................. (698,896) (11,391,963) (737,073) (10,670,372)
--------- ------------ ---------- ------------
Net decrease (261,134) $ (4,055,817) (166,388) $ (2,765,425)
========= ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
Treasury Bill Portfolio
---------------------------------------------------------------------------------
1996 1995
---------------------------------------- -------------------------------------
Shares Dollars Shares Dollars
---------------- -------------------- ------------------- ----------------
<S> <C> <C> <C> <C>
Shares sold...................... 675,087 $ 42,837,954 3,439,873 $186,355,664
Distributions reinvested......... 39,686 2,678,382 16,692 1,102,014
--------- ------------ ---------- ------------
714,773 45,516,336 3,456,565 187,457,678
Shares redeemed.................. (856,988) (54,518,659) (3,691,450) (199,945,796)
--------- ------------ ---------- ------------
Net decrease (142,215) $ (9,002,323) (234,885) $(12,488,118)
========= ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
Versatile Bond Portfolio
---------------------------------------------------------------------------------
1996 1995
---------------------------------------- --------------------------------------
Shares Dollars Shares Dollars
---------------- -------------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Shares sold...................... 226,619 $ 11,362,172 221,755 $ 10,683,200
Distributions reinvested......... 11,536 650,964 10,191 554,197
--------- ------------ ---------- ------------
238,155 12,013,136 231,946 11,237,397
Shares redeemed.................. (288,848) (14,556,424) (478,583) (23,172,769)
--------- ------------ ---------- ------------
Net decrease (50,693) $ (2,543,288) (246,637) $(11,935,372)
========= ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
Aggressive Growth Portfolio
---------------------------------------------------------------------------------
1996 1995
---------------------------------------- -------------------------------------
Shares Dollars Shares Dollars
---------------- -------------------- ------------------- ----------------
<S> <C> <C> <C> <C>
Shares sold...................... 121,097 $ 4,712,767 78,367 $ 2,441,932
Distributions reinvested......... 9,846 395,703 330 9,796
--------- ------------ ---------- ------------
130,943 5,108,470 78,697 2,451,728
Shares redeemed.................. (72,494) (2,728,428) (86,044) (2,630,079)
--------- ------------ ---------- ------------
Net increase (decrease) 58,449 $ 2,380,042 (7,347) $ (178,351)
========= ============ ========== ============
</TABLE>
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 1996
7. LINE OF CREDIT
On March 3, 1990, the Fund entered into a line of credit agreement with a
foreign bank whereby the Permanent Portfolio may borrow up to $2,000,000
for a period not to exceed twenty-one days, for the purpose of making
settlement for purchases of investments in the event that banks in the
United States are not able to operate according to their normal procedures.
Interest is charged at a base rate of 1.0% per annum above the offered rate
for deposits of United States Dollars on the London Interbank Market
(LIBOR) for terms substantially similar to any drawdown. The Permanent
Portfolio is obligated to pay a commitment fee of 1/2% ($10,000), payable
annually, on the entire commitment amount.
The line is collateralized by United States Treasury bills having a face
value of not less than 125% of the outstanding principal balance and a
maturity date of not more than one year. The agreement contains certain
covenants, including among other things, the Permanent Portfolio
maintaining a specified net asset value of at least $60 million. During the
year ended January 31, 1996, there were no amounts outstanding under this
agreement.
8. REGULATORY MATTERS
By letter dated February 9, 1994 (the "Letter"), the Staff of the San
Francisco District Office of the Securities and Exchange Commission (the
"Staff" and "Commission," respectively) advised the Fund and certain of its
officers and affiliates of alleged violations of certain provisions of
federal securities laws, including those relating to the Fund's advertising
materials, transactions among the Fund's Portfolios, the Fund's
distribution expense practices and the composition of the Fund's Board of
Directors. The Staff stated in the Letter that it had decided to recommend
to the Commission that it authorize the filing of a civil action and the
institution of public administrative proceedings seeking sanctions against
certain of the Fund's officers and affiliates. Management of the Fund
believes that there have been no such violations. During the year ended
January 31, 1996, the Fund received no further communications regarding the
matter from the Staff or the Commission and as of January 31, 1996, no such
civil action or public administrative proceedings have been instituted.
Pursuant to Maryland law and the Fund's bylaws, the Fund has agreed to pay
directly on behalf of certain officers, directors and affiliates, or to
reimburse them, for certain expenses incurred by them in connection with
the matter. The Fund's Permanent Portfolio, Treasury Bill Portfolio,
Versatile Bond Portfolio and Aggressive Growth Portfolio so paid or
reimbursed expenses of $26,100, $22,233, $1,646 and $848, respectively,
during the year then ended.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
<TABLE>
Financial highlights for the Permanent Portfolio
For each share of capital stock outstanding throughout each fiscal year:
<CAPTION>
Year ended Year ended Year ended Year ended
January 31, 1996 January 31, 1995 January 31, 1994 January 31, 1993
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year $ 16.51 $ 17.55 $ 15.36 $ 15.21
--------- --------- -------- --------
Income from investment operations:
Net investment income ................ .50 .64 .44 .49
Net realized and unrealized gains
or losses on investments ........... 2.17 (1.46) 1.99 (.05)
--------- --------- -------- --------
Total income or loss from
investment operations 2.67 (.82) 2.43 .44
Less distributions from:
Net investment income ................ (.38) (.22) (.24) (.29)
Net realized gain on investments ..... - - - -
--------- --------- -------- --------
Total distributions (.38) (.22) (.24) (.29)
--------- --------- -------- --------
Net asset value, end of year $ 18.80 $ 16.51 $ 17.55 $ 15.36
========= ========= ======== ========
Total return (1) ......................... 16.20% (4.65)% 15.86% 2.93%
Ratios / supplemental data:
Net assets, end of period (in thousands) $ 76,641 $ 71,610 $ 79,043 $ 65,937
========= ========= ======== ========
Ratio of expenses to average net assets.. 1.35% 1.32% 1.21% 1.25%
Ratio of net investment income
to average net assets ................ 2.85% 2.63% 2.66% 3.20%
Portfolio turnover rate ................. 9.96% 31.24% 49.51% 70.77%
<FN>
(l) Assumes reinvestment of all dividends and distributions, and deduction of
all fees and expenses except the $35 one-time account start-up fee and the
$1.50 monthly account maintenance fee.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Year ended Year ended Year ended Year ended Year ended Year ended
January 31, 1992 January 31, 1991 January 31, 1990 January 31, 1989 January 31, 1988 January 31, 1987
- - - ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<C> <C> <C> <C> <C> <C>
$ 15.10 $ 15.57 $ 15.00 $ 14.71 $ 13.66 $ 11.88
--------- --------- --------- ---------- ---------- ----------
.51 .64 .57 .46 .37 .33
.51 (.63) - (.15) .80 1.45
--------- --------- --------- ---------- ---------- ----------
1.02 .01 .57 .31 1.17 1.78
(.91) (.48) - - - -
- - - (.02) (.12) -
--------- --------- --------- ---------- ---------- ----------
(.91) (.48) - (.02) (.12) -
--------- --------- --------- ---------- ---------- ----------
$ 15.21 $ 15.10 $ 15.57 $ 15.00 $ 14.71 $ 13.66
========= ========= ========= ========== ========== ==========
7.01% .15% 3.80% 2.11% 8.58% 14.98%
$ 72,312 $ 80,542 $ 93,663 $ 97,475 $ 90,177 $ 72,523
========= ========= ========= ========== ========== ==========
1.27% 1.36% 1.17% 1.17% 1.15% 1.17%
3.29% 4.22% 3.80% 3.00% 2.53% 2.51%
8.01% 31.58% 61.44% 23.87% 21.97% 30.89%
</TABLE>
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE TREASURY BILL PORTFOLIO
<TABLE>
Financial highlights for the Treasury Bill Portfolio
For each share of capital stock outstanding throughout each fiscal period:
<CAPTION>
Year ended Year ended Year ended
January 31, 1996 January 31, 1995 January 31, 1994
---------------- ---------------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 66.40 $ 64.81 $ 64.45
---------- ---------- ----------
Income from investment operations:
Net investment income (2) ............................... 3.22 2.65 1.53
Net realized and unrealized gains or losses on investments (3) .06 (.39) (.09)
---------- ---------- ----------
Total income from investment operations 3.28 2.26 1.44
Less distributions from:
Net investment income ................................... (1.84) (.67) (1.08)
---------- ---------- ----------
Total distributions (1.84) (.67) (1.08)
---------- ---------- ----------
Net asset value, end of period $ 67.84 $ 66.40 $ 64.81
========== ========== ==========
Total return (4) ............................................. 4.95% 3.49% 2.24%
Ratios / supplemental data:
Net assets, end of period (in thousands) .................. $ 114,667 $ 121,666 $ 133,970
========== ========== ==========
Ratio of expenses to average net assets (2) ............... .82% .82% .72%
Ratio of net investment income to average net assets ...... 4.79% 3.57% 2.46%
<FN>
* Computed on an annualized basis.
(l) The Treasury Bill Portfolio commenced investment operations September 21,
1987.
(2) Due to the waiver of advisory fees and, effective January 1, 1991 through
January 31, 1994, distribution expenses, the ratio of expenses to average
net assets was reduced by .50% for the year ended January 31, 1996 and
.50%, .49%, .47%, .48%, .47%, .62%, .62% and .65% for the years ended
January 31, 1995, 1994, 1993, 1992, 1991, 1990 and 1989 and the period
ended January 31, 1988, respectively. Without this waiver, the net
investment income per share would have been $2.78 for the year ended
January 31, 1996 and $2.12, $1.04, $1.28, $2.85, $3.85, $3.96, $3.00 and
$1.33 for the years and the period then ended.
(3) Per share net realized and unrealized gains or losses on investments may
not correspond with the change in aggregate unrealized gains and losses in
the Portfolio's securities because of the timing of sales and repurchases
of the Portfolio's shares in relation to fluctuating market values for the
Portfolio.
(4) Assumes reinvestment of all dividends and distributions, and deduction of
all fees and expenses except the $35 one-time account start-up fee and the
$1.50 monthly account maintenance fee.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Year ended Year ended Year ended Year ended Year ended Period ended
January 31, 1993 January 31, 1992 January 31, 1991 January 31, 1990 January 31, 1989 January 31, 1988(1)
---------------- ---------------- ---------------- ---------------- ---------------- -------------------
<C> <C> <C> <C> <C> <C>
$ 64.99 $ 63.11 $ 59.35 $ 54.91 $ 51.54 $ 50.00
---------- ---------- ---------- --------- ---------- ----------
1.68 3.26 4.20 4.36 3.38 1.55
.19 (.08) (.01) .08 .02 (.01)
---------- ---------- ---------- --------- ---------- ----------
1.87 3.18 4.19 4.44 3.40 1.54
(2.41) (1.30) (.43) - (.03) -
---------- ---------- ---------- --------- ---------- ----------
(2.41) (1.30) (.43) - (.03) -
---------- ---------- ---------- --------- ---------- ----------
$ 64.45 $ 64.99 $ 63.11 $ 59.35 $ 54.91 $ 51.54
========== ========== ========== ========= ========== ==========
2.89% 5.05% 7.06% 8.09% 6.60% 4.48%*
$ 179,888 $ 320,382 $ 207,889 $ 61,056 $ 31,370 $ 6,475
========== ========== ========== ========= ========== ==========
.73% .73% .83% .54% .54% .50%*
2.97% 4.87% 6.74% 7.87% 6.70% 5.32%*
</TABLE>
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE VERSATILE BOND PORTFOLIO
<TABLE>
Financial highlights for the Versatile Bond Portfolio
For each share of capital stock outstanding throughout each fiscal period:
<CAPTION>
Year ended Year ended
January 31, 1996 January 31, 1995
---------------- ----------------
<S> <C> <C>
Net asset value, beginning of period $ 54.90 $ 54.76
-------- ---------
Income from investment operations:
Net investment income (2) ............... 2.91 2.12
Net realized and unrealized gains
or losses on investments (3) .......... 1.05 (.63)
-------- ---------
Total income from investment operations 3.96 1.49
Less distributions from:
Net investment income ................... (2.01) (1.33)
Net realized gain on investments ........ - (.02)
-------- ---------
Total distributions (2.01) (1.35)
-------- ---------
Net asset value, end of period $ 56.85 $ 54.90
======== =========
Total return (4) ............................ 7.24% 2.74%
Ratios / supplemental data:
Net assets, end of period (in thousands).... $ 20,137 $ 22,229
======== =========
Ratio of expenses to average net assets (2). .89% .86%
Ratio of net investment income
to average net assets ................... 5.21% 3.84%
Portfolio turnover rate ................... 51.64% 74.62%
<FN>
* Computed on an annualized basis.
(l) The Versatile Bond Portfolio commenced investment operations November 12,
1991.
(2) Due to the waiver of advisory fees and through January 31, 1994,
distribution expenses, the ratio of expenses to average net assets was
reduced by .37% for the year ended January 31, 1996 and .36%, .39%, .41%
and .43% for the years ended January 31, 1995, 1994, 1993 and the period
ended January 31, 1992, respectively. Without this waiver, the net
investment income per share would have been $2.65 for the year ended
January 31, 1996 and $1.84, $1.57, $1.77 and $2.13 for the years and the
period then ended.
(3) Per share net realized and unrealized gains or losses on investments may
not correspond with the change in aggregate unrealized gains and losses in
the Portfolio's securities because of the timing of sales and repurchases
of the Portfolio's shares in relation to fluctuating market values for the
Portfolio.
(4) Assumes reinvestment of all dividends and distributions, and deduction of
all fees and expenses except the $35 one-time account start-up fee and the
$1.50 monthly account maintenance fee.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Year ended Year ended Period ended
January 31, 1994 January 31, 1993 January 31, 1992 (1)
---------------- ---------------- --------------------
<C> <C> <C>
$ 53.63 $ 50.58 $ 50.00
--------- ---------- ---------
1.87 2.06 2.51
(.04) 1.00 (1.93)
--------- ---------- ---------
1.83 3.06 .58
(.70) (.01) -
- - -
--------- ---------- ---------
(.70) (.01) -
--------- ---------- ---------
$ 54.76 $ 53.63 $ 50.58
========= ========== =========
3.42% 6.05% 3.33%*
$ 35,682 $ 23,217 $ 596
========= ========== =========
.89% .89% 1.07%*
3.46% 3.86% 4.00%*
75.05% 224.95% 600.99%*
</TABLE>
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE AGGRESSIVE GROWTH PORTFOLIO
<TABLE>
Financial highlights for the Aggressive Growth Portfolio
For each share of capital stock outstanding throughout each fiscal period:
<CAPTION>
Year ended Year ended
January 31, 1996 January 31, 1995
---------------- ----------------
<S> <C> <C>
Net asset value, beginning of period $ 31.61 $ 32.56
---------- ---------
Income from investment operations:
Net investment income (loss) ............................ (.02) (.01)
Net realized and unrealized gains
or losses on investments ................................ 10.68 (.89)
---------- ---------
Total income or loss from investment operations 10.66 (.90)
Less distributions from:
Net investment income ................................... (.11) (.03)
Net realized gain on investments ........................ (1.51) (.02)
---------- ---------
Total distributions (1.62) (.05)
---------- ---------
Net asset value, end of period $ 40.65 $ 31.61
========== =========
Total return (2) ............................................. 33.78% (2.75)%
Ratios / supplemental data:
Net assets, end of period (in thousands) .................... $ 11,067 $ 6,758
========== =========
Ratio of expenses to average net assets ...................... 1.19% 1.23%
Ratio of net investment income (loss) to average net assets... (.06)% (.04)%
Portfolio turnover rate ...................................... 18.94% 26.29%
<FN>
* Computed on an annualized basis.
(l) The Aggressive Growth Portfolio commenced investment operations May 16,
1990.
(2) Assumes reinvestment of all dividends and distributions, and deduction of
all fees and expenses except the $35 one-time account start-up fee and the
$1.50 monthly account maintenance fee.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Year ended Year ended Year ended Period ended
January 31, 1994 January 31, 1993 January 31, 1992 January 31, 1991(1)
---------------- ---------------- ---------------- -------------------
<C> <C> <C> <C>
$ 26.63 $ 22.77 $ 18.35 $ 20.00
--------- --------- ---------- ---------
.01 .02 .06 .13
6.41 4.44 4.38 (1.78)
--------- --------- ---------- ---------
6.42 4.46 4.44 (1.65)
(.02) (.13) (.02) -
(.47) (.47) - -
--------- --------- ---------- ---------
(.49) (.60) (.02) -
--------- --------- ---------- ---------
$ 32.56 $ 26.63 $ 22.77 $ 18.35
========= ========= ========== =========
24.25% 19.77% 24.21% (8.25)%*
$ 7,201 $ 3,596 $ 2,577 $ 1,151
========= ========= ========== =========
1.20% 1.12% 1.18% 1.07%*
.02% .12% .23% .64%*
29.83% 25.62% 53.18% 36.88%*
</TABLE>
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
Permanent Portfolio (PP)
(Graph ommitted, see description on page 34)
Versatile Bond Portfolio (VBP)
(Graph ommitted, see description on page 34)
Aggressive Growth Portfolio (AGP)
(Graph ommitted, see description on page 34)
See following page for explanation of graphs.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
The graphs on the preceding page compare the initial account value and
subsequent account values at the end of each of the most recently completed ten
fiscal years of the Permanent Portfolio and each of the most recently completed
fiscal years since the commencement of investment operations for the Aggressive
Growth Portfolio and the Versatile Bond Portfolio, assuming a $10,000 investment
in the Portfolio at the beginning of the first fiscal year and reinvestment of
all dividends and distributions, to a $10,000 investment over the same periods
in the following broad-based securities market indexes: for the Permanent
Portfolio, 3-month Treasury bills from the weekly releases of Selected Interest
Rates from the Federal Reserve; for the Versatile Bond Portfolio, 180-day rates
on certificates of deposit from the Dow Jones News Retrieval Service; for the
Aggressive Growth Portfolio, the Dow Jones Industrial Average, which is an
average of the stock prices of 30 large companies and represents an unmanaged
portfolio. The tables below show each Portfolio's average annual total returns
for the periods indicated, assuming reinvestment of all dividends and
distributions and deduction of all fees and expenses except the $35 one-time
account start-up fee. Past performance is not predictive of future performance.
<TABLE>
<CAPTION>
Permanent Portfolio(1) Versatile Bond Portfolio(2) Aggressive Growth Portfolio(3)
---------------------- --------------------------- ------------------------------
<C> <C> <C>
1 year ended 1/31/96 16.11% 1 year ended 1/31/96 7.17% 1 year ended 1/31/96 33.69%
5 years ended 1/31/96 7.10% 4 years, 127 days ended 1/31/96 4.66% 5 years ended 1/31/96 19.10%
10 years ended 1/31/96 6.36% 6 years, 29 days ended 1/31/96 13.81%
13 years, 62 days ended 1/31/96 5.22%
- - - ---------------------
</TABLE>
(1) The Permanent Portfolio commenced operations on December 1, 1982.
(2) The Versatile Bond Portfolio commenced operations on September 27, 1991.
(3) The Aggressive Growth Portfolio commenced operations on January 2, 1990.
(4) The Treasury Bill Portfolio is not included in the data above because it is
a money market portfolio.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
Management's Discussion and Analysis
Permanent Portfolio
The Permanent Portfolio's investment objective is to preserve and increase
the purchasing power of its shares over the long term. The Portfolio
invests fixed target percentages of its net assets in gold, silver, Swiss
franc assets, stocks of real estate and natural resource companies,
aggressive growth stocks, and dollar assets such as United States Treasury
securities. Due to the strong performance of the stock and bond markets
throughout 1995, the Portfolio achieved a total return of 16.20% for the
year ended January 31, 1996, as compared to an inflation rate of 2.73%
during the year then ended.
Treasury Bill Portfolio
The Treasury Bill Portfolio's investment objective is to achieve high
current income, consistent with safety and liquidity of principal. It
invests in short-term United States Treasury securities. The Portfolio
achieved a total return of 4.95% and maintained an average maturity of
between 60 and 90 days throughout the year ended January 31, 1996. This
return was consistent with other money market funds that invest primarily
in short-term United States Treasury securities.
Versatile Bond Portfolio
The Versatile Bond Portfolio's investment objective is to achieve high
current income while limiting risk to principal. It invests in a
diversified portfolio of short-term corporate bonds rated "A" or higher by
Standard & Poor's. The Portfolio achieved a total return of 7.24% while
maintaining an average maturity of between 300 and 500 days throughout the
year ended January 31, 1996. This return was consistent with other mutual
funds that invest primarily in corporate bonds of similar safety, liquidity
and maturity.
Aggressive Growth Portfolio
The Aggressive Growth Portfolio's investment objective is to achieve high
long-term appreciation. It is fully invested at all times in a diversified
portfolio of domestic stocks and stock warrants selected for high profit
potential. The Portfolio achieved a total return of 33.78% for the year
ended January 31, 1996, as compared to 43.73% for the Dow Jones Industrial
Average and 35.21% for the Standard and Poor's 500 Stock Index for the year
then ended.
<PAGE>
This page intentionally left blank.
<PAGE>
INVESTMENT ADVISER The
World Money Managers PERMANENT
Terry Coxon, General Partner PORTFOLIO
625 Second Street Family of Funds
Petaluma, California 94952
CONSULTANTS TO THE FUND
Harry Browne
Douglas Casey
TRANSFER AGENT
Chase Global Funds Services Company
P.O. Box 2798
Boston, Massachusetts 02208
(for overnight delivery services,
73 Tremont Street
Boston, Massachusetts 02108)
1-800-341-8900
In Mass. 1-617-557-8000
CUSTODIAN
State Street Bank and Trust Company
Boston, Massachusetts 02105
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
Three Embarcadero Center
San Francisco, California 94111
INVESTOR'S INFORMATION OFFICE
P.O. BOX 5847
Austin, Texas 78763 ANNUAL REPORT
1-800-531-5142 Nationwide January 31, 1996
Local 1-512-453-7558
<PAGE>
Appendix A
<PAGE>
<TABLE>
Table 1
<CAPTION>
Date T-Bonds T-Bonds T-Bonds Agency Agency Agency STHG STHG STHG
Coupon- Annual Old Bond Bonds Bonds Bonds Old Bonds Bonds Bonds
Equivalent Yield Price Coupon- Annual Bond Coupon Annual Old Bond
Yield Equivalent Yield Price Equivalent Yield Price
Yield Yield
- - - -------- --------- -------- --------- ---------- -------- --------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/81 13.64% 14.10% 13.61% 14.08% 14.66% 15.19%
1/29/82 13.85% 14.33% 98.4880 14.37% 14.88% 95.0990 15.09% 15.66% 99.4396
2/26/82 13.81% 14.29% 100.2797 14.60% 15.13% 98.4963 15.20% 15.78% 99.8510
3/31/82 13.68% 14.14% 100.9752 14.69% 15.23% 99.3908 15.20% 15.77% 100.0096
4/30/82 13.37% 13.82% 102.2408 13.48% 13.94% 108.3184 14.76% 15.30% 100.5740
5/31/82 13.39% 13.84% 99.8484 13.37% 13.82% 100.7780 14.60% 15.14% 100.1973
6/30/82 13.88% 14.37% 96.5140 14.39% 14.91% 93.3540 15.35% 15.93% 99.0381
7/30/82 13.41% 13.85% 103.4913 13.89% 14.37% 103.3698 14.30% 14.81% 101.3696
8/31/82 12.50% 12.89% 107.0762 12.51% 12.90% 110.0373 12.73% 13.14% 102.0771
9/30/82 11.77% 12.11% 105.9954 11.80% 12.15% 105.4201 12.22% 12.59% 100.6905
10/29/82 10.97% 11.27% 106.9895 11.21% 11.52% 104.6753 10.76% 11.05% 101.9729
11/30/82 10.68% 10.97% 102.5749 11.20% 11.51% 100.0928 10.84% 11.13% 99.8929
12/31/82 10.43% 10.70% 102.3220 11.10% 11.41% 100.7527 10.38% 10.65% 100.6250
1/31/83 10.95% 11.25% 95.3908 11.42% 11.74% 97.5566 10.23% 10.49% 100.2029
2/28/83 10.49% 10.76% 104.2259 11.06% 11.36% 102.8495 10.17% 10.43% 100.0788
3/31/83 10.67% 10.96% 98.3493 11.12% 11.43% 99.5297 10.04% 10.29% 100.1774
4/29/83 10.37% 10.64% 102.7433 10.86% 11.15% 102.0921 9.66% 9.89% 100.5152
5/31/83 10.97% 11.27% 94.8001 11.33% 11.65% 96.3363 10.26% 10.52% 99.1908
6/30/83 10.99% 11.29% 99.8492 11.39% 11.72% 99.4776 10.77% 11.06% 99.3120
7/29/83 11.75% 12.09% 93.7194 12.19% 12.56% 94.0534 11.21% 11.52% 99.4024
8/31/83 11.95% 12.31% 98.3781 12.20% 12.58% 99.9142 11.59% 11.93% 99.4848
9/30/83 11.43% 11.76% 104.3780 11.69% 12.03% 103.9724 10.92% 11.21% 100.9148
10/31/83 11.79% 12.13% 97.0760 12.01% 12.37% 97.5662 10.98% 11.28% 99.9196
11/30/83 11.65% 11.99% 101.1087 11.84% 12.19% 101.2965 10.77% 11.06% 100.2728
12/30/83 11.85% 12.21% 98.3463 11.99% 12.35% 98.8889 11.32% 11.64% 99.2658
1/31/84 11.76% 12.10% 100.7857 11.84% 12.19% 101.1384 10.70% 10.99% 100.8339
2/29/84 12.15% 12.52% 96.8634 12.24% 12.61% 97.0354 11.09% 11.40% 99.4789
3/30/84 12.53% 12.92% 97.0755 12.64% 13.04% 97.1046 11.64% 11.98% 99.2647
4/30/84 12.84% 13.26% 97.6020 13.00% 13.43% 97.4215 11.97% 12.33% 99.5518
5/31/84 13.81% 14.29% 93.0929 13.97% 14.46% 93.5236 12.96% 13.38% 98.6979
6/29/84 13.63% 14.09% 101.3549 13.98% 14.46% 99.9834 13.16% 13.60% 99.7267
7/31/84 12.77% 13.18% 106.5547 13.04% 13.46% 106.6224 12.98% 13.41% 100.2376
8/31/84 12.51% 12.90% 102.0447 12.89% 13.31% 101.0210 12.90% 13.32% 100.1058
9/28/84 12.26% 12.63% 101.9579 12.43% 12.81% 103.4260 12.26% 12.63% 100.8628
10/31/84 11.62% 11.96% 105.2964 11.87% 12.22% 104.2178 11.56% 11.89% 100.9405
11/30/84 11.59% 11.92% 100.2902 11.65% 11.99% 101.6987 11.09% 11.40% 100.6227
12/31/84 11.50% 11.83% 100.7599 11.53% 11.87% 100.8873 10.50% 10.78% 100.7994
1/31/85 11.20% 11.51% 102.5863 11.24% 11.56% 102.3311 10.38% 10.65% 100.1681
2/28/85 11.89% 12.24% 94.3802 11.89% 12.25% 95.0383 10.67% 10.96% 99.6067
3/29/85 11.63% 11.97% 102.1173 11.82% 12.17% 100.5681 10.86% 11.15% 99.7473
4/30/85 11.48% 11.81% 101.2648 12.29% 12.67% 96.5398 10.65% 10.93% 100.2861
5/31/85 10.59% 10.87% 108.0550 11.42% 11.74% 106.8012 10.24% 10.50% 100.5538
6/28/85 10.46% 10.74% 101.1247 11.24% 11.55% 101.4337 10.02% 10.28% 100.2921
7/31/85 10.72% 11.00% 97.7501 11.51% 11.84% 97.8951 10.19% 10.44% 99.7822
8/30/85 10.48% 10.75% 102.1446 11.48% 11.81% 100.1996 9.86% 10.10% 100.4463
9/30/85 10.56% 10.84% 99.2741 11.62% 11.96% 98.9386 9.79% 10.03% 100.0866
10/31/85 10.28% 10.54% 102.5901 11.36% 11.69% 101.9905 9.74% 9.97% 100.0807
11/29/85 9.84% 10.08% 104.2683 10.90% 11.19% 103.7825 9.33% 9.55% 100.5534
12/31/85 9.26% 9.48% 105.7483 9.63% 9.86% 111.1317 9.02% 9.22% 100.4332
1/31/86 9.33% 9.54% 99.3855 9.68% 9.91% 99.5882 8.89% 9.08% 100.1794
2/28/86 8.27% 8.45% 111.5960 8.75% 8.94% 108.6822 8.66% 8.85% 100.3061
3/31/86 7.43% 7.57% 110.1238 7.81% 7.96% 109.4679 8.21% 8.38% 100.6274
4/30/86 7.46% 7.60% 99.6471 8.06% 8.23% 97.4738 7.99% 8.15% 100.3118
5/30/86 7.72% 7.87% 96.9063 8.58% 8.77% 95.0826 8.25% 8.42% 99.6332
6/30/86 7.24% 7.37% 105.9007 8.27% 8.44% 103.0222 7.86% 8.01% 100.5440
7/31/86 7.46% 7.60% 97.3771 8.59% 8.77% 97.0072 7.61% 7.76% 100.3422
8/29/86 7.21% 7.33% 103.1002 8.36% 8.53% 102.1940 7.76% 7.91% 99.7968
9/30/86 7.59% 7.73% 95.4710 8.77% 8.96% 96.1563 7.34% 7.48% 100.5810
10/31/86 7.61% 7.76% 99.7293 8.67% 8.86% 100.9432 7.10% 7.22% 100.3451
</TABLE>
Appendix A
Page 1
<PAGE>
<TABLE>
Table 1
<CAPTION>
Date T-Bonds T-Bonds T-Bonds Agency Agency Agency STHG STHG STHG
Coupon- Annual Old Bond Bonds Bonds Bonds Old Bonds Bonds Bonds
Equivalent Yield Price Coupon- Annual Bond Coupon Annual Old Bond
Yield Equivalent Yield Price Equivalent Yield Price
Yield Yield
- - - -------- --------- -------- --------- ---------- -------- --------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
11/28/86 7.40% 7.54% 102.5474 8.50% 8.68% 101.6236 7.05% 7.18% 100.0640
12/31/86 7.49% 7.63% 98.9564 8.37% 8.55% 101.2506 7.25% 7.38% 99.7179
1/30/87 7.48% 7.62% 100.0666 8.29% 8.46% 100.7817 7.10% 7.22% 100.2192
2/27/87 7.47% 7.61% 100.1255 8.27% 8.44% 100.2150 7.16% 7.29% 99.9138
3/31/87 7.81% 7.96% 96.1198 8.44% 8.62% 98.3230 7.46% 7.60% 99.5808
4/30/87 8.45% 8.63% 93.0407 9.14% 9.35% 93.6439 8.31% 8.48% 98.8205
5/29/87 8.64% 8.82% 98.0043 9.38% 9.60% 97.8745 8.57% 8.76% 99.6397
6/30/87 8.50% 8.68% 101.4665 9.25% 9.47% 101.1218 8.27% 8.44% 100.4202
7/31/87 8.89% 9.09% 95.9076 9.65% 9.88% 96.5486 8.35% 8.52% 99.8924
8/31/87 9.17% 9.38% 97.2095 9.87% 10.12% 98.0309 8.64% 8.82% 99.6018
9/30/87 9.77% 10.01% 94.2310 10.47% 10.74% 95.0500 9.29% 9.51% 99.1007
10/30/87 9.02% 9.22% 107.7465 9.65% 9.88% 107.2135 8.76% 8.95% 100.7365
11/30/87 9.11% 9.31% 99.0803 9.84% 10.09% 98.3064 8.76% 8.95% 99.9961
12/31/87 8.95% 9.15% 101.6556 9.64% 9.87% 101.8342 8.66% 8.84% 100.1438
1/29/88 8.41% 8.59% 105.7953 9.06% 9.27% 105.2480 8.09% 8.26% 100.7819
2/29/88 8.35% 8.52% 100.7396 8.97% 9.17% 100.8806 7.99% 8.15% 100.1400
3/31/88 8.78% 8.98% 95.3907 9.47% 9.69% 95.5634 8.19% 8.36% 99.7251
4/29/88 9.09% 9.30% 96.8608 9.78% 10.02% 97.2816 8.61% 8.79% 99.4244
5/31/88 9.29% 9.51% 97.9725 10.05% 10.30% 97.6750 8.91% 9.11% 99.5865
6/30/88 8.85% 9.05% 104.5799 9.57% 9.80% 104.2071 8.74% 8.93% 100.2293
7/29/88 9.22% 9.43% 96.2813 10.26% 10.52% 94.2503 9.02% 9.22% 99.6206
8/31/88 9.32% 9.54% 99.0211 10.25% 10.52% 100.0156 9.38% 9.60% 99.4998
9/30/88 8.98% 9.18% 103.4977 9.83% 10.07% 103.6568 9.08% 9.28% 100.4210
10/31/88 8.73% 8.92% 102.6830 9.46% 9.68% 103.3470 8.91% 9.11% 100.2296
11/30/88 9.06% 9.27% 96.5498 9.82% 10.06% 96.8502 9.41% 9.63% 99.3101
12/30/88 8.99% 9.19% 100.7340 9.69% 9.93% 101.1028 9.79% 10.03% 99.4848
1/31/89 8.83% 9.03% 101.6630 9.49% 9.72% 101.8023 9.71% 9.94% 100.1133
2/28/89 9.13% 9.34% 96.9254 9.65% 9.88% 98.6210 10.09% 10.34% 99.4842
3/31/89 9.10% 9.30% 100.3944 9.64% 9.88% 100.0236 10.48% 10.76% 99.4598
4/28/89 8.92% 9.12% 101.7912 9.41% 9.63% 102.1189 10.07% 10.33% 100.5587
5/31/89 8.60% 8.79% 103.4278 9.12% 9.33% 102.5890 9.63% 9.87% 100.6021
6/30/89 8.05% 8.21% 106.2381 8.58% 8.77% 105.1340 9.04% 9.25% 100.8134
7/31/89 7.92% 8.07% 101.5115 8.43% 8.60% 101.4964 8.67% 8.86% 100.5090
8/31/89 8.21% 8.38% 96.7600 8.58% 8.77% 98.5091 9.32% 9.54% 99.1127
9/29/89 8.24% 8.41% 99.6298 8.68% 8.86% 99.1350 9.35% 9.57% 99.9593
10/31/89 7.91% 8.07% 103.7378 8.33% 8.50% 103.3720 8.87% 9.06% 100.6658
11/30/89 7.90% 8.05% 100.2165 8.31% 8.48% 100.1388 8.71% 8.90% 100.2092
12/29/89 7.99% 8.15% 98.9240 8.44% 8.62% 98.7531 8.86% 9.05% 99.8015
1/31/90 8.46% 8.64% 94.9131 8.97% 9.17% 95.1120 9.19% 9.40% 99.5427
2/28/90 8.54% 8.72% 99.1404 9.03% 9.23% 99.5131 9.32% 9.53% 99.8288
3/30/90 8.64% 8.83% 98.9426 9.07% 9.27% 99.6378 9.39% 9.61% 99.8987
4/30/90 9.02% 9.22% 96.1069 9.47% 9.70% 96.3599 9.65% 9.88% 99.6501
5/31/90 8.58% 8.76% 104.6835 9.05% 9.26% 103.8650 9.21% 9.42% 100.5974
6/29/90 8.40% 8.57% 101.9818 8.86% 9.05% 101.8196 8.96% 9.16% 100.3442
7/31/90 8.42% 8.59% 99.7955 8.86% 9.05% 100.0147 8.70% 8.89% 100.3599
8/31/90 8.98% 9.18% 94.1903 9.87% 10.11% 91.2071 8.76% 8.95% 99.9143
9/28/90 8.94% 9.14% 100.3600 9.85% 10.09% 100.1822 8.92% 9.12% 99.7824
10/31/90 8.78% 8.97% 101.7241 9.77% 10.01% 100.7231 8.84% 9.03% 100.1155
11/30/90 8.40% 8.58% 104.1445 9.49% 9.72% 102.4382 8.68% 8.87% 100.2145
12/31/90 8.24% 8.41% 101.8195 9.47% 9.69% 100.2070 8.46% 8.64% 100.3038
1/31/91 8.20% 8.36% 100.4431 9.31% 9.52% 101.4593 8.44% 8.62% 100.0225
2/28/91 8.19% 8.36% 100.0369 9.23% 9.44% 100.7443 8.27% 8.45% 100.2347
3/29/91 8.24% 8.41% 99.4909 9.26% 9.48% 99.6669 8.11% 8.27% 100.2307
4/30/91 8.18% 8.35% 100.6179 9.24% 9.45% 100.2092 7.88% 8.03% 100.3202
5/31/91 8.26% 8.43% 99.1458 9.25% 9.46% 99.9189 7.70% 7.85% 100.2496
6/28/91 8.42% 8.60% 98.2656 9.35% 9.57% 99.1059 7.88% 8.04% 99.7466
7/31/91 8.36% 8.53% 100.6541 9.25% 9.46% 100.8802 7.72% 7.87% 100.2188
8/30/91 8.06% 8.22% 103.3743 8.98% 9.18% 102.4878 7.35% 7.49% 100.5208
9/30/91 7.81% 7.96% 102.8796 8.81% 9.00% 101.5856 7.03% 7.15% 100.4481
</TABLE>
Appendix A
Page 2
<PAGE>
<TABLE>
Table 1
<CAPTION>
Date T-Bonds T-Bonds T-Bonds Agency Agency Agency STHG STHG STHG
Coupon- Annual Old Bond Bonds Bonds Bonds Old Bonds Bonds Bonds
Equivalent Yield Price Coupon- Annual Bond Coupon Annual Old Bond
Yield Equivalent Yield Price Equivalent Yield Price
Yield Yield
- - - -------- --------- -------- --------- ---------- -------- --------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/31/91 7.90% 8.06% 98.9722 8.94% 9.14% 98.7988 6.67% 6.78% 100.5031
11/29/91 7.95% 8.11% 99.4317 8.79% 8.98% 101.4011 6.48% 6.58% 100.2717
12/31/91 7.40% 7.54% 106.5922 8.30% 8.47% 104.7428 5.98% 6.07% 100.7101
1/31/92 7.76% 7.91% 95.8335 8.50% 8.68% 98.0923 6.07% 6.16% 99.8742
2/28/92 7.83% 7.98% 99.1953 8.73% 8.92% 97.8424 6.09% 6.18% 99.9675
3/31/92 7.97% 8.13% 98.4118 8.78% 8.97% 99.4738 6.36% 6.46% 99.6195
4/30/92 8.05% 8.21% 99.0993 8.88% 9.08% 98.9570 5.95% 6.04% 100.5730
5/31/92 7.84% 7.99% 102.4119 8.58% 8.76% 103.2153 5.70% 5.79% 100.3546
6/30/92 7.79% 7.94% 100.5770 8.55% 8.73% 100.3224 5.41% 5.48% 100.4182
7/31/92 7.46% 7.60% 103.9321 8.39% 8.57% 101.7450 5.00% 5.06% 100.5898
8/31/92 7.42% 7.56% 100.4785 8.33% 8.50% 100.6580 4.76% 4.81% 100.3421
9/30/92 7.37% 7.51% 100.6011 8.23% 8.40% 101.1070 4.41% 4.46% 100.5012
10/31/92 7.63% 7.78% 96.9528 8.45% 8.63% 97.6138 5.03% 5.09% 99.1135
11/30/92 7.60% 7.74% 100.3526 8.59% 8.77% 98.5009 5.48% 5.56% 99.3561
12/31/92 7.39% 7.53% 102.5195 9.06% 9.27% 95.1759 5.25% 5.32% 100.3362
1/31/93 7.22% 7.35% 102.0741 8.81% 9.00% 102.6240 4.83% 4.89% 100.5950
2/28/93 6.89% 7.01% 104.1619 8.52% 8.70% 103.1252 4.54% 4.59% 100.4174
3/31/93 6.82% 6.94% 100.8891 8.54% 8.72% 99.7849 4.46% 4.51% 100.1134
4/30/93 6.92% 7.04% 98.7426 8.53% 8.71% 100.1077 4.35% 4.40% 100.1610
5/31/93 6.81% 6.93% 101.3986 8.54% 8.72% 99.8924 4.69% 4.74% 99.5130
6/30/93 6.63% 6.74% 102.3313 8.22% 8.39% 103.5456 4.48% 4.53% 100.3014
7/31/93 6.32% 6.42% 104.1465 8.10% 8.26% 101.3447 4.50% 4.55% 99.9727
8/31/93 6.00% 6.09% 104.4281 7.73% 7.88% 104.2947 4.33% 4.38% 100.2415
9/30/93 5.94% 6.03% 100.8356 7.66% 7.81% 100.8180 4.32% 4.36% 100.0201
10/31/93 6.21% 6.31% 96.3464 7.65% 7.80% 100.1170 4.43% 4.47% 99.8435
11/30/93 6.25% 6.35% 99.4610 8.04% 8.20% 95.6051 4.58% 4.63% 99.7835
12/31/93 6.22% 6.32% 100.4055 8.08% 8.24% 99.5509 4.53% 4.58% 100.0674
1/31/94 6.29% 6.39% 99.0607 7.88% 8.04% 102.2883 4.36% 4.40% 100.2500
2/28/94 6.68% 6.79% 95.0183 8.36% 8.53% 94.7610 4.87% 4.93% 99.2679
3/31/94 7.09% 7.22% 94.8720 8.83% 9.03% 95.0640 5.36% 5.43% 99.2984
4/29/94 7.32% 7.45% 97.2481 9.07% 9.27% 97.5673 5.88% 5.97% 99.2595
5/31/94 7.43% 7.57% 98.6520 9.21% 9.43% 98.5151 6.19% 6.28% 99.5694
6/30/94 7.62% 7.77% 97.7783 9.43% 9.65% 97.8855 6.36% 6.46% 99.7618
7/29/94 7.38% 7.52% 102.8789 9.08% 9.29% 103.5570 6.22% 6.32% 100.1891
8/31/94 7.45% 7.59% 99.1979 9.22% 9.44% 98.5361 6.34% 6.44% 99.8351
9/30/94 7.82% 7.97% 95.7421 8.21% 8.38% 111.2693 6.76% 6.88% 99.4047
10/31/94 7.96% 8.12% 98.3455 8.34% 8.51% 98.5664 6.99% 7.11% 99.6834
11/30/94 8.00% 8.16% 99.6039 8.34% 8.51% 100.0062 7.69% 7.84% 99.0217
12/30/94 7.89% 8.04% 101.2846 8.20% 8.37% 101.5408 8.02% 8.18% 99.5408
1/31/95 7.71% 7.86% 102.0481 8.06% 8.22% 101.6144 7.59% 7.74% 100.6031
2/28/95 7.46% 7.60% 102.9698 7.85% 8.00% 102.3596 7.09% 7.22% 100.6984
3/31/95 7.43% 7.57% 100.3791 7.80% 7.95% 100.5897 7.11% 7.24% 99.9706
4/28/95 7.34% 7.47% 101.1114 7.70% 7.85% 101.1540 6.91% 7.03% 100.2888
5/31/95 6.66% 6.77% 108.7546 7.02% 7.14% 108.5221 6.26% 6.35% 100.9185
6/30/95 6.58% 6.69% 101.0415 6.95% 7.07% 100.7904 6.21% 6.30% 100.0678
7/31/95 6.80% 6.92% 97.1999 7.17% 7.30% 97.2813 6.19% 6.29% 100.0254
8/31/95 6.50% 6.61% 103.9380 7.04% 7.16% 101.7039 6.14% 6.23% 100.0777
9/29/95 6.53% 6.64% 99.6074 6.96% 7.08% 100.9299 6.18% 6.27% 99.9393
10/31/95 6.32% 6.42% 102.8090 6.72% 6.83% 103.1387 5.99% 6.08% 100.2702
11/30/95 6.11% 6.20% 102.8720 6.50% 6.60% 102.8946 5.76% 5.84% 100.3289
12/29/95 5.92% 6.01% 102.6519 6.39% 6.49% 101.4632 5.54% 5.62% 100.2997
1/31/96 5.95% 6.04% 99.5826 6.35% 6.45% 100.4925 5.27% 5.34% 100.3845
</TABLE>
Appendix A
Page 3
<PAGE>
<TABLE>
Table 2
<CAPTION>
Date T-Bill T-Bill T-Bill Accep- Accep- Accep- CD's CD's CD's Repos Repos
Bank Annual Market tances tances tances Bank Annual Market Bank Annual
Discount Yield Price Bank Annual Market Discount Yield Price Discount Yield
Rate Discount Yield Price Rate Rate
Rate
- - - -------- ------- ------ ------- ------ ------ ------- ------ ------ ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/81 11.08% 12.07% 97.1992 12.40% 13.63% 96.8656 12.90% 14.22% 96.7392 11.25% 12.08%
1/29/82 12.52% 13.77% 96.8352 13.55% 15.00% 96.5749 13.95% 15.49% 96.4738 13.13% 14.24%
2/26/82 12.44% 13.67% 96.8554 13.65% 15.12% 96.5496 14.10% 15.67% 96.4358 12.50% 13.51%
3/31/82 13.26% 14.65% 96.6482 14.10% 15.67% 96.4358 14.80% 16.52% 96.2589 15.50% 17.02%
4/30/82 12.34% 13.55% 96.8807 13.75% 15.24% 96.5243 14.20% 15.79% 96.4106 12.50% 13.51%
5/31/82 11.50% 12.56% 97.0931 12.95% 14.28% 96.7265 13.40% 14.82% 96.6128 11.88% 12.80%
6/30/82 12.76% 14.05% 96.7746 14.70% 16.40% 96.2842 15.05% 16.83% 96.1957 11.88% 12.80%
7/30/82 10.17% 11.01% 97.4293 11.60% 12.68% 97.0678 12.00% 13.15% 96.9667 9.75% 10.39%
8/31/82 8.42% 9.01% 97.8716 9.90% 10.70% 97.4975 10.40% 11.28% 97.3711 8.75% 9.28%
9/30/82 7.62% 8.11% 98.0738 10.05% 10.87% 97.4596 10.50% 11.39% 97.3458 10.25% 10.95%
10/29/82 7.90% 8.43% 98.0031 8.80% 9.44% 97.7756 9.05% 9.73% 97.7124 9.13% 9.69%
11/30/82 8.28% 8.85% 97.9070 8.60% 9.22% 97.8261 8.95% 9.61% 97.7376 8.75% 9.28%
12/31/82 7.92% 8.45% 97.9980 8.55% 9.16% 97.8388 8.65% 9.27% 97.8135 12.00% 12.94%
1/31/83 8.10% 8.65% 97.9525 8.50% 9.10% 97.8514 8.65% 9.27% 97.8135 8.38% 8.86%
2/28/83 7.93% 8.46% 97.9955 8.05% 8.60% 97.9651 8.20% 8.76% 97.9272 8.25% 8.73%
3/31/83 8.64% 9.26% 97.8160 8.90% 9.56% 97.7503 9.15% 9.84% 97.6871 10.25% 10.95%
4/29/83 8.08% 8.63% 97.9576 8.25% 8.82% 97.9146 8.35% 8.93% 97.8893 8.50% 9.00%
5/31/83 8.63% 9.25% 97.8185 8.95% 9.61% 97.7376 9.05% 9.73% 97.7124 8.40% 8.89%
6/30/83 8.79% 9.43% 97.7781 9.00% 9.67% 97.7250 9.15% 9.84% 97.6871 9.38% 9.97%
7/29/83 9.22% 9.92% 97.6694 9.45% 10.18% 97.6113 9.60% 10.36% 97.5733 9.20% 9.78%
8/31/83 9.26% 9.97% 97.6593 9.55% 10.30% 97.5860 9.80% 10.58% 97.5228 9.25% 9.83%
9/30/83 8.71% 9.34% 97.7983 9.00% 9.67% 97.7250 9.25% 9.95% 97.6618 9.50% 10.11%
10/31/83 8.51% 9.11% 97.8489 9.00% 9.67% 97.7250 9.30% 10.01% 97.6492 9.13% 9.69%
11/30/83 8.88% 9.53% 97.7553 9.13% 9.81% 97.6934 9.33% 10.05% 97.6416 8.88% 9.42%
12/30/83 8.97% 9.64% 97.7326 9.45% 10.18% 97.6113 9.65% 10.41% 97.5607 10.88% 11.66%
1/31/84 8.89% 9.54% 97.7528 9.15% 9.84% 97.6871 9.37% 10.09% 97.6315 9.15% 9.72%
2/29/84 9.14% 9.83% 97.6896 9.45% 10.18% 97.6113 9.70% 10.47% 97.5481 9.00% 9.56%
3/30/84 9.72% 10.49% 97.5430 10.10% 10.93% 97.4469 10.28% 11.14% 97.4014 10.00% 10.67%
4/30/84 9.72% 10.49% 97.5430 10.32% 11.18% 97.3913 10.55% 11.45% 97.3332 10.25% 10.95%
5/31/84 9.75% 10.53% 97.5354 10.88% 11.84% 97.2498 11.45% 12.50% 97.1057 10.00% 10.67%
6/29/84 9.92% 10.72% 97.4924 11.42% 12.47% 97.1133 11.75% 12.86% 97.0299 10.15% 10.84%
7/31/84 10.40% 11.28% 97.3711 11.15% 12.15% 97.1815 11.43% 12.48% 97.1108 11.38% 12.23%
8/31/84 10.63% 11.54% 97.3130 11.24% 12.26% 97.1588 11.60% 12.68% 97.0678 11.50% 12.37%
9/28/84 10.22% 11.07% 97.4166 10.77% 11.71% 97.2776 11.23% 12.24% 97.1613 10.75% 11.52%
10/31/84 9.01% 9.68% 97.7225 9.48% 10.22% 97.6037 9.56% 10.31% 97.5834 9.80% 10.45%
11/30/84 8.44% 9.03% 97.8666 8.89% 9.54% 97.7528 8.92% 9.58% 97.7452 8.55% 9.06%
12/31/84 7.85% 8.37% 98.0157 8.20% 8.76% 97.9272 8.45% 9.05% 97.8640 8.88% 9.42%
1/31/85 8.05% 8.60% 97.9651 8.17% 8.73% 97.9348 8.30% 8.88% 97.9019 8.38% 8.86%
2/28/85 8.50% 9.10% 97.8514 8.75% 9.39% 97.7882 8.90% 9.56% 97.7503 8.50% 9.00%
3/29/85 8.18% 8.74% 97.9323 8.60% 9.22% 97.8261 8.78% 9.42% 97.7806 8.50% 9.00%
4/30/85 7.85% 8.37% 98.0157 8.15% 8.71% 97.9399 8.40% 8.99% 97.8767 8.00% 8.45%
5/31/85 7.14% 7.58% 98.1952 7.37% 7.83% 98.1370 7.43% 7.90% 98.1219 7.35% 7.74%
6/28/85 6.83% 7.24% 98.2735 7.37% 7.83% 98.1370 7.49% 7.97% 98.1067 7.55% 7.96%
7/31/85 7.28% 7.73% 98.1598 7.70% 8.20% 98.0536 7.83% 8.35% 98.0208 8.75% 9.28%
8/30/85 7.14% 7.58% 98.1952 7.67% 8.17% 98.0612 7.82% 8.34% 98.0233 7.45% 7.85%
9/30/85 7.04% 7.47% 98.2204 7.70% 8.20% 98.0536 7.84% 8.36% 98.0182 7.65% 8.07%
10/31/85 7.19% 7.63% 98.1825 7.70% 8.20% 98.0536 7.71% 8.21% 98.0511 7.70% 8.12%
11/29/85 7.16% 7.60% 98.1901 7.73% 8.24% 98.0460 7.83% 8.35% 98.0208 7.80% 8.23%
12/31/85 7.05% 7.48% 98.2179 7.55% 8.04% 98.0915 7.72% 8.23% 98.0486 7.70% 8.12%
1/31/86 6.97% 7.39% 98.2381 7.55% 8.04% 98.0915 7.69% 8.19% 98.0561 7.80% 8.23%
2/28/86 7.02% 7.45% 98.2255 7.49% 7.97% 98.1067 7.54% 8.02% 98.0941 7.65% 8.07%
3/31/86 6.34% 6.69% 98.3974 6.82% 7.22% 98.2761 7.08% 7.51% 98.2103 7.35% 7.74%
4/30/86 6.10% 6.43% 98.4581 6.43% 6.79% 98.3746 6.50% 6.87% 98.3569 6.70% 7.03%
5/30/86 6.30% 6.65% 98.4075 6.66% 7.05% 98.3165 6.80% 7.20% 98.2811 6.55% 6.87%
6/30/86 5.96% 6.28% 98.4934 6.44% 6.80% 98.3721 6.55% 6.93% 98.3443 7.38% 7.76%
7/31/86 5.79% 6.09% 98.5364 6.11% 6.44% 98.4555 6.30% 6.65% 98.4075 6.20% 6.49%
8/29/86 5.17% 5.42% 98.6931 5.31% 5.57% 98.6578 5.45% 5.72% 98.6224 5.50% 5.74%
9/30/86 5.20% 5.45% 98.6856 5.67% 5.96% 98.5668 5.82% 6.12% 98.5288 5.75% 6.00%
10/31/86 5.20% 5.45% 98.6856 5.53% 5.81% 98.6021 5.70% 5.99% 98.5592 5.65% 5.90%
11/28/86 5.39% 5.66% 98.6375 5.67% 5.96% 98.5668 5.78% 6.08% 98.5389 5.25% 5.47%
12/31/86 5.67% 5.96% 98.5668 5.95% 6.27% 98.4960 6.50% 6.87% 98.3569 17.00% 18.82%
</TABLE>
Appendix A
Page 1
<PAGE>
<TABLE>
Table 2
<CAPTION>
Date T-Bill T-Bill T-Bill Accep- Accep- Accep- CD's CD's CD's Repos Repos
Bank Annual Market tances tances tances Bank Annual Market Bank Annual
Discount Yield Price Bank Annual Market Discount Yield Price Discount Yield
Rate Discount Yield Price Rate Rate
Rate
- - - -------- ------- ------ ------- ------ ------ ------- ------ ------ ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1/30/87 5.60% 5.89% 98.5844 5.85% 6.16% 98.5213 6.10% 6.43% 98.4581 5.95% 6.22%
2/27/87 5.45% 5.72% 98.6224 5.98% 6.30% 98.4884 6.15% 6.49% 98.4454 5.80% 6.06%
3/31/87 5.61% 5.90% 98.5819 6.15% 6.49% 98.4454 6.32% 6.67% 98.4024 6.00% 6.27%
4/30/87 5.53% 5.81% 98.6021 6.71% 7.10% 98.3039 6.70% 7.09% 98.3064 6.05% 6.33%
5/29/87 5.86% 6.17% 98.5187 6.96% 7.38% 98.2407 6.97% 7.39% 98.2381 6.40% 6.70%
6/30/87 5.73% 6.03% 98.5516 6.87% 7.28% 98.2634 6.95% 7.37% 98.2432 6.50% 6.81%
7/31/87 6.07% 6.40% 98.4656 6.60% 6.98% 98.3317 6.77% 7.17% 98.2887 6.45% 6.76%
8/31/87 6.25% 6.60% 98.4201 6.83% 7.24% 98.2735 7.05% 7.48% 98.2179 6.70% 7.03%
9/30/87 6.61% 6.99% 98.3291 7.72% 8.23% 98.0486 7.98% 8.52% 97.9828 7.45% 7.85%
10/30/87 5.27% 5.53% 98.6679 7.25% 7.70% 98.1674 7.55% 8.04% 98.0915 6.65% 6.98%
11/30/87 5.21% 5.46% 98.6830 7.55% 8.04% 98.0915 7.70% 8.20% 98.0536 6.75% 7.08%
12/31/87 5.68% 5.97% 98.5642 7.08% 7.51% 98.2103 7.20% 7.65% 98.1800 6.90% 7.25%
1/29/88 5.64% 5.93% 98.5743 6.77% 7.17% 98.2887 6.68% 7.07% 98.3114 6.35% 6.65%
2/29/88 5.62% 5.91% 98.5794 6.49% 6.86% 98.3595 6.57% 6.95% 98.3393 6.30% 6.60%
3/31/88 5.71% 6.00% 98.5566 6.60% 6.98% 98.3317 6.70% 7.09% 98.3064 6.50% 6.81%
4/29/88 5.98% 6.30% 98.4884 6.94% 7.36% 98.2457 7.10% 7.53% 98.2053 6.80% 7.14%
5/31/88 6.43% 6.79% 98.3746 7.42% 7.89% 98.1244 7.60% 8.09% 98.0789 6.80% 7.14%
6/30/88 6.56% 6.94% 98.3418 7.51% 7.99% 98.1016 7.75% 8.26% 98.0410 7.30% 7.68%
7/29/88 6.95% 7.37% 98.2432 7.94% 8.47% 97.9929 7.94% 8.47% 97.9929 7.56% 7.97%
8/31/88 7.30% 7.76% 98.1547 8.26% 8.83% 97.9121 8.55% 9.16% 97.8388 7.70% 8.12%
9/30/88 7.25% 7.70% 98.1674 8.19% 8.75% 97.9298 8.45% 9.05% 97.8640 8.50% 9.00%
10/31/88 7.36% 7.82% 98.1396 8.18% 8.74% 97.9323 8.45% 9.05% 97.8640 8.10% 8.56%
11/30/88 7.83% 8.35% 98.0208 8.88% 9.53% 97.7553 9.00% 9.67% 97.7250 8.20% 8.67%
12/30/88 8.10% 8.65% 97.9525 8.83% 9.48% 97.7680 9.25% 9.95% 97.6618 9.25% 9.83%
1/31/89 8.39% 8.98% 97.8792 8.96% 9.62% 97.7351 9.20% 9.90% 97.6744 8.80% 9.33%
2/28/89 8.71% 9.34% 97.7983 9.76% 10.54% 97.5329 10.13% 10.97% 97.4394 9.50% 10.11%
3/31/89 8.90% 9.56% 97.7503 9.86% 10.65% 97.5076 10.15% 10.99% 97.4343 9.50% 10.11%
4/28/89 8.41% 9.00% 97.8741 9.50% 10.24% 97.5986 9.80% 10.58% 97.5228 9.45% 10.06%
5/31/89 8.61% 9.23% 97.8236 9.25% 9.95% 97.6618 9.40% 10.13% 97.6239 9.60% 10.22%
6/30/89 7.99% 8.53% 97.9803 8.76% 9.40% 97.7857 9.10% 9.78% 97.6997 9.40% 10.00%
7/31/89 7.80% 8.31% 98.0283 8.14% 8.70% 97.9424 8.40% 8.99% 97.8767 8.55% 9.06%
8/31/89 7.89% 8.42% 98.0056 8.56% 9.17% 97.8362 8.80% 9.44% 97.7756 8.80% 9.33%
9/29/89 7.91% 8.44% 98.0005 8.75% 9.39% 97.7882 9.00% 9.67% 97.7250 9.10% 9.67%
10/31/89 7.77% 8.28% 98.0359 8.26% 8.83% 97.9121 8.49% 9.09% 97.8539 8.80% 9.33%
11/30/89 7.59% 8.08% 98.0814 8.08% 8.63% 97.9576 8.30% 8.88% 97.9019 8.55% 9.06%
12/29/89 7.55% 8.04% 98.0915 7.89% 8.42% 98.0056 8.10% 8.65% 97.9525 9.20% 9.78%
1/31/90 7.74% 8.25% 98.0435 8.00% 8.54% 97.9778 8.27% 8.84% 97.9095 8.15% 8.62%
2/28/90 7.77% 8.28% 98.0359 7.99% 8.53% 97.9803 8.25% 8.82% 97.9146 8.13% 8.59%
3/30/90 7.80% 8.31% 98.0283 8.15% 8.71% 97.9399 8.40% 8.99% 97.8767 8.05% 8.51%
4/30/90 7.79% 8.30% 98.0309 8.29% 8.87% 97.9045 8.56% 9.17% 97.8362 7.95% 8.40%
5/31/90 7.75% 8.26% 98.0410 8.03% 8.57% 97.9702 8.28% 8.85% 97.9070 8.00% 8.45%
6/29/90 7.74% 8.25% 98.0435 7.96% 8.49% 97.9879 8.25% 8.82% 97.9146 8.20% 8.67%
7/31/90 7.49% 7.97% 98.1067 7.59% 8.08% 98.0814 7.92% 8.45% 97.9980 7.93% 8.37%
8/31/90 7.39% 7.86% 98.1320 7.70% 8.20% 98.0536 8.02% 8.56% 97.9727 7.95% 8.40%
9/28/90 7.14% 7.58% 98.1952 7.92% 8.45% 97.9980 8.19% 8.75% 97.9298 8.00% 8.45%
10/31/90 7.11% 7.55% 98.2028 7.66% 8.16% 98.0637 7.96% 8.49% 97.9879 7.75% 8.18%
11/30/90 7.02% 7.45% 98.2255 7.90% 8.43% 98.0031 8.30% 8.88% 97.9019 7.55% 7.96%
12/31/90 6.44% 6.80% 98.3721 7.17% 7.61% 98.1876 7.50% 7.98% 98.1042 6.75% 7.08%
1/31/91 6.12% 6.45% 98.4530 6.71% 7.10% 98.3039 6.97% 7.39% 98.2381 7.25% 7.63%
2/28/91 6.04% 6.37% 98.4732 6.54% 6.91% 98.3468 6.75% 7.15% 98.2938 6.85% 7.19%
3/29/91 5.74% 6.04% 98.5491 6.08% 6.41% 98.4631 6.27% 6.62% 98.4151 7.50% 7.90%
4/30/91 5.51% 5.79% 98.6072 5.75% 6.05% 98.5465 5.95% 6.27% 98.4960 5.75% 6.00%
5/31/91 5.53% 5.81% 98.6021 5.85% 6.16% 98.5213 5.95% 6.27% 98.4960 5.80% 6.06%
6/28/91 5.54% 5.82% 98.5996 5.95% 6.27% 98.4960 6.07% 6.40% 98.4656 5.85% 6.11%
7/31/91 5.53% 5.81% 98.6021 5.90% 6.21% 98.5086 5.97% 6.29% 98.4909 5.90% 6.17%
8/30/91 5.33% 5.59% 98.6527 5.55% 5.83% 98.5971 5.70% 5.99% 98.5592 5.40% 5.63%
9/30/91 5.11% 5.35% 98.7083 5.40% 5.67% 98.6350 5.55% 5.83% 98.5971 6.60% 6.92%
10/31/91 4.82% 5.04% 98.7816 5.05% 5.29% 98.7235 5.20% 5.45% 98.6856 5.00% 5.20%
11/29/91 4.35% 4.53% 98.9004 4.84% 5.06% 98.7766 4.95% 5.18% 98.7488 4.82% 5.01%
12/31/91 3.86% 4.01% 99.0243 4.05% 4.21% 98.9763 4.18% 4.35% 98.9434 5.25% 5.47%
1/31/92 3.84% 3.99% 99.0293 4.01% 4.17% 98.9864 4.15% 4.32% 98.9510 5.65% 5.90%
</TABLE>
Appendix A
Page 2
<PAGE>
<TABLE>
Table 2
<CAPTION>
Date T-Bill T-Bill T-Bill Accep- Accep- Accep- CD's CD's CD's Repos Repos
Bank Annual Market tances tances tances Bank Annual Market Bank Annual
Discount Yield Price Bank Annual Market Discount Yield Price Discount Yield
Rate Discount Yield Price Rate Rate
Rate
- - - -------- ------- ------ ------- ------ ------ ------- ------ ------ ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2/28/92 3.93% 4.09% 99.0066 4.07% 4.24% 98.9712 4.18% 4.35% 98.9434 4.05% 4.19%
3/31/92 4.05% 4.21% 98.9763 4.17% 4.34% 98.9459 4.30% 4.48% 98.9131 4.63% 4.81%
4/30/92 3.70% 3.84% 99.0647 4.00% 4.16% 98.9889 3.85% 4.00% 99.0268 3.75% 3.88%
5/31/92 3.70% 3.84% 99.0647 3.84% 3.99% 99.0293 3.95% 4.11% 99.0015 3.75% 3.88%
6/30/92 3.57% 3.70% 99.0976 3.77% 3.92% 99.0470 3.88% 4.03% 99.0192 3.70% 3.82%
7/31/92 3.18% 3.29% 99.1962 3.33% 3.45% 99.1583 3.38% 3.50% 99.1456 3.38% 3.49%
8/31/92 3.16% 3.27% 99.2012 3.30% 3.42% 99.1658 3.42% 3.54% 99.1355 3.60% 3.72%
9/30/92 2.69% 2.77% 99.3200 3.07% 3.17% 99.2240 3.15% 3.26% 99.2038 4.75% 4.93%
10/31/92 2.96% 3.06% 99.2518 3.33% 3.45% 99.1583 3.42% 3.54% 99.1355 3.05% 3.14%
11/30/92 3.27% 3.39% 99.1734 3.70% 3.84% 99.0647 3.85% 4.00% 99.0268 3.60% 3.72%
12/31/92 3.08% 3.18% 99.2214 3.31% 3.43% 99.1633 3.35% 3.47% 99.1532 3.50% 3.61%
1/31/93 2.90% 3.00% 99.2669 3.09% 3.20% 99.2189 3.12% 3.23% 99.2113 3.05% 3.14%
2/28/93 2.95% 3.05% 99.2543 3.09% 3.20% 99.2189 3.13% 3.24% 99.2088 3.25% 3.35%
3/31/93 2.89% 2.98% 99.2695 3.10% 3.21% 99.2164 3.12% 3.23% 99.2113 4.00% 4.14%
4/30/93 2.91% 3.01% 99.2644 3.04% 3.14% 99.2316 3.08% 3.18% 99.2214 3.00% 3.09%
5/31/93 3.06% 3.16% 99.2265 3.16% 3.27% 99.2012 3.22% 3.33% 99.1861 3.10% 3.19%
6/30/93 3.03% 3.13% 99.2341 3.14% 3.25% 99.2063 3.19% 3.30% 99.1936 3.80% 3.93%
7/31/93 3.03% 3.13% 99.2341 3.11% 3.22% 99.2139 3.15% 3.26% 99.2038 2.95% 3.04%
8/31/93 3.01% 3.11% 99.2391 3.09% 3.20% 99.2189 3.14% 3.25% 99.2063 3.20% 3.30%
9/30/93 2.92% 3.02% 99.2619 3.10% 3.21% 99.2164 3.25% 3.36% 99.1785 3.40% 3.51%
10/31/93 3.03% 3.13% 99.2341 3.25% 3.36% 99.1785 3.30% 3.42% 99.1658 3.00% 3.09%
11/30/93 3.14% 3.25% 99.2063 3.31% 3.43% 99.1633 3.35% 3.47% 99.1532 3.05% 3.14%
12/31/93 3.01% 3.11% 99.2391 3.19% 3.30% 99.1936 3.24% 3.35% 99.1810 3.20% 3.30%
1/31/94 2.96% 3.06% 99.2518 3.08% 3.18% 99.2214 3.13% 3.24% 99.2088 3.16% 3.26%
2/28/94 3.36% 3.48% 99.1507 3.55% 3.68% 99.1026 3.65% 3.79% 99.0774 3.50% 3.61%
3/31/94 3.48% 3.61% 99.1203 3.80% 3.95% 99.0394 3.83% 3.98% 99.0319 3.63% 3.75%
4/29/94 3.87% 4.02% 99.0218 4.15% 4.32% 98.9510 4.20% 4.37% 98.9383 3.55% 3.67%
5/31/94 4.16% 4.33% 98.9484 4.45% 4.64% 98.8751 4.52% 4.72% 98.8574 4.50% 4.67%
6/30/94 4.15% 4.32% 98.9510 4.69% 4.90% 98.8145 4.73% 4.94% 98.8044 5.25% 5.47%
7/29/94 4.27% 4.45% 98.9206 4.58% 4.78% 98.8423 4.67% 4.88% 98.8195 4.23% 4.38%
8/31/94 4.56% 4.76% 98.8473 4.82% 5.04% 98.7816 4.89% 5.12% 98.7639 4.78% 4.97%
9/30/94 4.67% 4.88% 98.8195 5.30% 5.56% 98.6603 5.41% 5.68% 98.6325 5.00% 5.20%
10/31/94 5.03% 5.27% 98.7285 5.45% 5.72% 98.6224 5.54% 5.82% 98.5996 4.71% 4.89%
11/30/94 5.56% 5.84% 98.5946 6.02% 6.34% 98.4783 6.12% 6.45% 98.4530 5.60% 5.84%
12/30/94 5.53% 5.81% 98.6021 6.25% 6.60% 98.4201 6.39% 6.75% 98.3848 5.78% 6.04%
1/31/95 5.83% 6.14% 98.5263 6.10% 6.43% 98.4581 6.23% 6.57% 98.4252 5.88% 6.14%
2/28/95 5.76% 6.06% 98.5440 6.03% 6.35% 98.4758 6.11% 6.44% 98.4555 6.23% 6.52%
3/31/95 5.70% 5.99% 98.5592 6.07% 6.40% 98.4656 6.19% 6.53% 98.4353 6.40% 6.70%
4/30/95 5.69% 5.98% 98.5617 6.01% 6.33% 98.4808 6.10% 6.43% 98.4581 6.04% 6.32%
5/31/95 5.63% 5.92% 98.5769 5.86% 6.17% 98.5187 5.96% 6.28% 98.4934 6.18% 6.46%
6/30/95 5.44% 5.71% 98.6249 5.80% 6.10% 98.5339 5.96% 6.28% 98.4934 6.33% 6.63%
7/31/95 5.42% 5.69% 98.6299 5.65% 5.94 98.5718 5.76% 6.06% 98.5440 5.90% 6.17%
8/31/95 5.29% 5.55% 98.6628 5.68% 5.97 98.5642 5.75% 6.05% 98.5465 5.88% 6.14%
9/30/95 5.24% 5.49% 98.6754 5.73% 6.03% 98.5516 5.82% 6.12% 98.5288 6.38% 6.68%
10/31/95 5.32% 5.58% 98.6552 5.67% 5.96 98.5668 5.78% 6.08% 98.5389 5.99% 6.26%
11/30/95 5.32% 5.58% 98.6552 5.59% 5.87% 98.5870 5.71% 6.00% 98.5566 6.00% 6.27%
12/31/95 4.96% 5.19% 98.7462 5.45% 5.72% 98.6224 5.48% 5.75% 98.6148 5.93% 6.19%
1/31/96 4.91% 5.14% 98.7589 5.14% 5.39 98.7007 5.24% 5.49% 98.6754 5.93% 6.20%
</TABLE>
Appendix A
Page 3
<PAGE>
Appendix B
<PAGE>
DOW JONES INDUSTRIAL AVERAGE
Dow Jones Dow Jones Dow Jones
Industrial Industrial Industrial
Date Average Date Average Date Average
- - - ------------ ---------- ------------ ---------- ------------ ---------
Jan 2, 1990 2,810.20 Mar 28, 1990 2,743.70 Jun 25, 1990 2845.05
Jan 3, 1990 2,809.72 Mar 29, 1990 2,727.70 Jun 26, 1990 2842.33
Jan 4, 1990 2,796.08 Mar 30, 1990 2,707.20 Jun 27, 1990 2862.13
Jan 5, 1990 2,773.26 Apr 2, 1990 2,700.46 Jun 28, 1990 2878.71
Jan 8, 1990 2,794.38 Apr 3, 1990 2,736.72 Jun 29, 1990 2880.69
Jan 9, 1990 2,766.00 Apr 4, 1990 2,719.38 Jul 2, 1990 2899.26
Jan 10, 1990 2,750.64 Apr 5, 1990 2,721.18 Jul 3, 1990 2911.63
Jan 11, 1990 2,760.66 Apr 6, 1990 2,717.12 Jul 5, 1990 2879.21
Jan 12, 1990 2,689.20 Apr 9, 1990 2,722.08 Jul 6, 1990 2904.95
Jan 15, 1990 2,669.36 Apr 10, 1990 2,731.08 Jul 9, 1990 2914.11
Jan 16, 1990 2,692.62 Apr 11, 1990 2,729.74 Jul 10, 1990 2890.84
Jan 17, 1990 2,659.14 Apr 12, 1990 2,751.80 Jul 11, 1990 2932.67
Jan 18, 1990 2,666.38 Apr 16, 1990 2,763.06 Jul 12, 1990 2969.80
Jan 19, 1990 2,677.90 Apr 17, 1990 2,765.78 Jul 13, 1990 2980.20
Jan 22, 1990 2,600.46 Apr 18, 1990 2,732.88 Jul 16, 1990 2999.75
Jan 23, 1990 2,615.32 Apr 19, 1990 2,711.94 Jul 17, 1990 2999.75
Jan 24, 1990 2,604.50 Apr 20, 1990 2,695.94 Jul 18, 1990 2981.68
Jan 25, 1990 2,561.00 Apr 24, 1990 2,654.50 Jul 19, 1990 2993.81
Jan 26, 1990 2,559.24 Apr 25, 1990 2,666.44 Jul 20, 1990 2961.14
Jan 29, 1990 2,553.38 Apr 26, 1990 2,676.58 Jul 23, 1990 2904.70
Jan 30, 1990 2,543.24 Apr 27, 1990 2,645.06 Jul 24, 1990 2922.52
Jan 31, 1990 2,590.54 Apr 30, 1990 2,656.80 Jul 25, 1990 2930.94
Feb 1, 1990 2,586.26 May 1, 1990 2,668.92 Jul 26, 1990 2920.79
Feb 2, 1990 2,602.70 May 2, 1990 2,689.64 Jul 27, 1990 2898.51
Feb 5, 1990 2,622.52 May 3, 1990 2,696.18 Jul 30, 1990 2917.33
Feb 6, 1990 2,606.30 May 4, 1990 2,710.36 Jul 31, 1990 2905.20
Feb 7, 1990 2,640.10 May 7, 1990 2,721.62 Aug 1, 1990 2899.25
Feb 8, 1990 2,644.36 May 8, 1990 2,733.56 Aug 2, 1990 2864.60
Feb 9, 1990 2,648.20 May 9, 1990 2,732.88 Aug 3, 1990 2809.65
Feb 12, 1990 2,619.14 May 10, 1990 2,738.52 Aug 6, 1990 2716.34
Feb 13, 1990 2,624.10 May 11, 1990 2,801.58 Aug 7, 1990 2710.64
Feb 14, 1990 2,624.32 May 14, 1990 2,821.54 Aug 8, 1990 2734.90
Feb 15, 1990 2,649.54 May 15, 1990 2,822.46 Aug 9, 1990 2758.91
Feb 16, 1990 2,635.58 May 16, 1990 2,819.68 Aug 10, 1990 2716.58
Feb 20, 1990 2,596.84 May 17, 1990 2,831.72 Aug 13, 1990 2746.78
Feb 21, 1990 2,583.56 May 18, 1990 2,819.92 Aug 14, 1990 2747.77
Feb 22, 1990 2,574.78 May 21, 1990 2,844.68 Aug 15, 1990 2748.27
Feb 23, 1990 2,564.18 May 22, 1990 2,852.24 Aug 16, 1990 2,681.44
Feb 26, 1990 2,602.48 May 23, 1990 2,856.26 Aug 17, 1990 2,644.80
Feb 27, 1990 2,617.12 May 24, 1990 2,855.56 Aug 20, 1990 2,656.44
Feb 28, 1990 2,627.26 May 25, 1990 2,820.92 Aug 21, 1990 2,603.96
Mar 1, 1990 2,635.58 May 29, 1990 2,870.50 Aug 22, 1990 2,560.15
Mar 2, 1990 2,660.36 May 30, 1990 2,878.56 Aug 23, 1990 2,483.42
Mar 5, 1990 2,649.54 May 31, 1990 2,876.66 Aug 24, 1990 2,532.92
Mar 6, 1990 2,676.80 Jun 1, 1990 2,900.98 Aug 27, 1990 2,611.63
Mar 7, 1990 2,669.60 Jun 4, 1990 2935.19 Aug 28, 1990 2,614.85
Mar 8, 1990 2,696.18 Jun 5, 1990 2925.00 Aug 29, 1990 2,632.43
Mar 9, 1990 2,683.34 Jun 6, 1990 2911.65 Aug 30, 1990 2,593.32
Mar 12, 1990 2,686.72 Jun 7, 1990 2897.33 Aug 31, 1990 2,614.36
Mar 13, 1990 2,674.54 Jun 8, 1990 2862.38 Sep 4, 1990 2,613.37
Mar 14, 1990 2,687.84 Jun 11, 1990 2892.57 Sep 5, 1990 2,628.22
Mar 15, 1990 2,695.72 Jun 12, 1990 2933.42 Sep 6, 1990 2,596.29
Mar 16, 1990 2,741.22 Jun 13, 1990 2929.95 Sep 7, 1990 2,619.55
Mar 19, 1990 2,755.64 Jun 14, 1990 2928.22 Sep 10, 1990 2,615.59
Mar 20, 1990 2,738.74 Jun 15, 1990 2935.89 Sep 11, 1990 2,612.62
Mar 21, 1990 2,727.92 Jun 18, 1990 2882.18 Sep 12, 1990 2,625.74
Mar 22, 1990 2,695.72 Jun 19, 1990 2893.56 Sep 13, 1990 2,582.67
Mar 23, 1990 2,704.28 Jun 20, 1990 2895.30 Sep 14, 1990 2,564.11
Mar 26, 1990 2,707.66 Jun 21, 1990 2901.73 Sep 17, 1990 2,567.33
Mar 27, 1990 2,736.94 Jun 22, 1990 2857.18 Sep 18, 1990 2,571.29
Appendix B
page 1
<PAGE>
DOW JONES INDUSTRIAL AVERAGE
Dow Jones Dow Jones Dow Jones
Industrial Industrial Industrial
Date Average Date Average Date Average
- - - ------------ ---------- ------------ ---------- ------------ ---------
Sep 19, 1990 2,557.43 Dec 13, 1990 2,614.36 Mar 13, 1991 2,955.20
Sep 20, 1990 2,518.32 Dec 14, 1990 2,593.81 Mar 14, 1991 2,952.23
Sep 21, 1990 2,512.38 Dec 17, 1990 2,593.32 Mar 15, 1991 2,948.27
Sep 24, 1990 2,452.97 Dec 18, 1990 2,626.73 Mar 18, 1991 2,929.95
Sep 25, 1990 2,485.64 Dec 19, 1990 2,626.73 Mar 19, 1991 2,867.82
Sep 26, 1990 2,459.65 Dec 20, 1990 2,629.46 Mar 20, 1991 2,872.03
Sep 27, 1990 2,427.48 Dec 21, 1990 2,633.66 Mar 21, 1991 2,855.45
Sep 28, 1990 2,452.48 Dec 24, 1990 2,621.29 Mar 22, 1991 2,858.91
Oct 1, 1990 2,515.84 Dec 26, 1990 2,637.13 Mar 25, 1991 2,865.84
Oct 2, 1990 2,505.20 Dec 27, 1990 2,625.50 Mar 26, 1991 2,914.85
Oct 3, 1990 2,489.36 Dec 28, 1990 2,629.21 Mar 27, 1991 2,917.57
Oct 4, 1990 2,516.83 Dec 31, 1990 2,633.66 Mar 28, 1991 2,913.86
Oct 5, 1990 2,510.64 Jan 2, 1991 2,610.64 Apr 1, 1991 2,881.19
Oct 8, 1990 2,523.76 Jan 3, 1991 2,573.51 Apr 2, 1991 2,945.05
Oct 9, 1990 2,445.54 Jan 4, 1991 2,566.09 Apr 3, 1991 2,926.73
Oct 10, 1990 2,407.92 Jan 7, 1991 2,522.77 Apr 4, 1991 2,924.50
Oct 11, 1990 2,365.10 Jan 8, 1991 2,509.41 Apr 5, 1991 2,896.78
Oct 12, 1990 2,398.02 Jan 9, 1991 2,470.30 Apr 8, 1991 2,918.56
Oct 15, 1990 2,416.34 Jan 10, 1991 2,498.76 Apr 9, 1991 2,873.02
Oct 16, 1990 2,381.19 Jan 11, 1991 2,501.49 Apr 10, 1991 2,874.50
Oct 17, 1990 2,387.87 Jan 14, 1991 2,483.91 Apr 11, 1991 2,905.45
Oct 18, 1990 2,452.72 Jan 15, 1991 2,490.59 Apr 12, 1991 2,920.79
Oct 19, 1990 2,520.79 Jan 16, 1991 2,508.91 Apr 15, 1991 2,933.17
Oct 22, 1990 2,516.09 Jan 17, 1991 2,623.51 Apr 16, 1991 2,986.88
Oct 23, 1990 2,494.06 Jan 18, 1991 2,646.78 Apr 17, 1991 3,004.46
Oct 24, 1990 2,504.21 Jan 22, 1991 2,603.22 Apr 18, 1991 2,999.26
Oct 25, 1990 2,484.16 Jan 23, 1991 2,619.06 Apr 19, 1991 2,965.59
Oct 26, 1990 2,436.14 Jan 24, 1991 2,643.07 Apr 22, 1991 2,927.72
Oct 29, 1990 2,430.20 Jan 25, 1991 2,659.41 Apr 23, 1991 2,930.45
Oct 30, 1990 2,448.02 Jan 28, 1991 2,654.46 Apr 24, 1991 2,949.50
Oct 31, 1990 2,442.33 Jan 29, 1991 2,662.62 Apr 25, 1991 2,921.04
Nov 1, 1990 2,454.95 Jan 30, 1991 2,713.12 Apr 26, 1991 2,912.38
Nov 2, 1990 2,490.84 Jan 31, 1991 2,736.39 Apr 29, 1991 2,876.98
Nov 5, 1990 2,502.23 Feb 1, 1991 2,730.69 Apr 30, 1991 2,887.87
Nov 6, 1990 2,485.15 Feb 4, 1991 2,772.28 May 1, 1991 2,930.20
Nov 7, 1990 2,441.09 Feb 5, 1991 2,788.37 May 2, 1991 2,938.61
Nov 8, 1990 2,443.81 Feb 6, 1991 2,830.94 May 3, 1991 2,938.86
Nov 9, 1990 2,488.61 Feb 7, 1991 2,810.64 May 6, 1991 2,941.64
Nov 12, 1990 2,540.35 Feb 8, 1991 2,830.69 May 7, 1991 2,917.49
Nov 13, 1990 2,535.40 Feb 11, 1991 2,902.23 May 8, 1991 2,930.90
Nov 14, 1990 2,559.65 Feb 12, 1991 2,874.75 May 9, 1991 2,971.15
Nov 15, 1990 2,545.05 Feb 13, 1991 2,909.16 May 10, 1991 2,920.17
Nov 16, 1990 2,550.25 Feb 14, 1991 2,877.23 May 13, 1991 2,924.42
Nov 19, 1990 2,565.35 Feb 15, 1991 2,934.65 May 14, 1991 2,886.85
Nov 20, 1990 2,530.20 Feb 19, 1991 2,932.18 May 15, 1991 2,865.38
Nov 21, 1990 2,539.36 Feb 20, 1991 2,899.01 May 16, 1991 2,894.01
Nov 23, 1990 2,527.23 Feb 21, 1991 2,891.83 May 17, 1991 2,886.63
Nov 26, 1990 2,533.17 Feb 22, 1991 2,889.36 May 20, 1991 2,892.22
Nov 27, 1990 2,543.81 Feb 25, 1991 2,887.87 May 21, 1991 2,906.08
Nov 28, 1990 2,535.15 Feb 26, 1991 2,864.60 May 22, 1991 2,910.33
Nov 29, 1990 2,518.81 Feb 27, 1991 2,889.11 May 23, 1991 2,900.04
Nov 30, 1990 2,559.65 Feb 28, 1991 2,882.18 May 24, 1991 2,913.91
Dec 3, 1990 2,565.59 Mar 1, 1991 2,909.90 May 28, 1991 2,958.86
Dec 4, 1990 2,579.70 Mar 4, 1991 2,914.11 May 29, 1991 2,969.59
Dec 5, 1990 2,610.40 Mar 5, 1991 2,972.52 May 30, 1991 3,000.45
Dec 6, 1990 2,602.48 Mar 6, 1991 2,973.27 May 31, 1991 3,027.50
Dec 7, 1990 2,590.10 Mar 7, 1991 2,963.37 Jun 3, 1991 3,035.33
Dec 10, 1990 2,596.78 Mar 8, 1991 2,955.20 Jun 4, 1991 3,027.95
Dec 11, 1990 2,586.14 Mar 11, 1991 2,939.36 Jun 5, 1991 3,005.37
Dec 12, 1990 2,622.28 Mar 12, 1991 2,922.52 Jun 6, 1991 2,994.86
Appendix B
page 2
<PAGE>
DOW JONES INDUSTRIAL AVERAGE
Dow Jones Dow Jones Dow Jones
Industrial Industrial Industrial
Date Average Date Average Date Average
- - - ------------ ---------- ------------ ---------- ------------ ---------
Jun 7, 1991 2,976.74 Sep 3, 1991 3,017.67 Nov 26, 1991 2,916.14
Jun 10, 1991 2,975.40 Sep 4, 1991 3,008.50 Nov 27, 1991 2,900.04
Jun 11, 1991 2,985.91 Sep 5, 1991 3,008.50 Nov 29, 1991 2,894.68
Jun 12, 1991 2,961.99 Sep 6, 1991 3,011.63 Dec 2, 1991 2,935.38
Jun 13, 1991 2,965.12 Sep 9, 1991 3,007.16 Dec 3, 1991 2,929.56
Jun 14, 1991 3,000.45 Sep 10, 1991 2,982.56 Dec 4, 1991 2,911.67
Jun 17, 1991 2,993.96 Sep 11, 1991 2,987.03 Dec 5, 1991 2,889.09
Jun 18, 1991 2,986.81 Sep 12, 1991 3,007.83 Dec 6, 1991 2,886.40
Jun 19, 1991 2,955.50 Sep 13, 1991 2,985.69 Dec 9, 1991 2,871.65
Jun 20, 1991 2,953.94 Sep 16, 1991 3,015.21 Dec 10, 1991 2,863.82
Jun 21, 1991 2,965.56 Sep 17, 1991 3,013.19 Dec 11, 1991 2,865.38
Jun 24, 1991 2,913.01 Sep 18, 1991 3,017.89 Dec 12, 1991 2,895.13
Jun 25, 1991 2,910.11 Sep 19, 1991 3,024.37 Dec 13, 1991 2,914.36
Jun 26, 1991 2,913.01 Sep 20, 1991 3,019.23 Dec 16, 1991 2,919.05
Jun 27, 1991 2,934.93 Sep 23, 1991 3,010.51 Dec 17, 1991 2,902.28
Jun 28, 1991 2,906.75 Sep 24, 1991 3,029.07 Dec 18, 1991 2,908.09
Jul 1, 1991 2,958.41 Sep 25, 1991 3,021.02 Dec 19, 1991 2,914.36
Jul 2, 1991 2,972.72 Sep 26, 1991 3,017.22 Dec 20, 1991 2,934.48
Jul 3, 1991 2,934.71 Sep 27, 1991 3,006.04 Dec 23, 1991 3,022.58
Jul 5, 1991 2,932.47 Sep 30, 1991 3,016.77 Dec 24, 1991 3,050.98
Jul 8, 1991 2,961.99 Oct 1, 1991 3,018.34 Dec 26, 1991 3,082.96
Jul 9, 1991 2,947.23 Oct 2, 1991 3,012.52 Dec 27, 1991 3,101.52
Jul 10, 1991 2,944.77 Oct 3, 1991 2,984.79 Dec 30, 1991 3,163.91
Jul 11, 1991 2,959.75 Oct 4, 1991 2,961.76 Dec 31, 1991 3,168.83
Jul 12, 1991 2,980.77 Oct 7, 1991 2,942.75 Jan 2, 1992 3,172.41
Jul 15, 1991 2,990.61 Oct 8, 1991 2,963.77 Jan 3, 1992 3,201.48
Jul 16, 1991 2983.90 Oct 9, 1991 2,946.33 Jan 6, 1992 3,200.13
Jul 17, 1991 2978.76 Oct 10, 1991 2,976.52 Jan 7, 1992 3,204.83
Jul 18, 1991 3016.32 Oct 11, 1991 2,983.68 Jan 8, 1992 3,203.94
Jul 19, 1991 3016.32 Oct 14, 1991 3,019.45 Jan 9, 1992 3,209.53
Jul 22, 1991 3012.97 Oct 15, 1991 3,041.37 Jan 10, 1992 3,199.46
Jul 23, 1991 2983.23 Oct 16, 1991 3,061.72 Jan 13, 1992 3,185.60
Jul 24, 1991 2966.23 Oct 17, 1991 3,053.00 Jan 14, 1992 3,246.20
Jul 25, 1991 2980.10 Oct 18, 1991 3,077.15 Jan 15, 1992 3,258.50
Jul 26, 1991 2972.50 Oct 21, 1991 3,060.38 Jan 16, 1992 3,249.55
Jul 29, 1991 2985.24 Oct 22, 1991 3,039.80 Jan 17, 1992 3,264.98
Jul 30, 1991 3016.32 Oct 23, 1991 3,040.92 Jan 20, 1992 3,254.03
Jul 31, 1991 3024.82 Oct 24, 1991 3,016.32 Jan 21, 1992 3,223.39
Aug 1, 1991 3017.67 Oct 25, 1991 3,004.92 Jan 22, 1992 3,255.81
Aug 2, 1991 3006.26 Oct 28, 1991 3,045.62 Jan 23, 1992 3,226.74
Aug 5, 1991 2,989.04 Oct 29, 1991 3,061.94 Jan 27, 1992 3,240.61
Aug 6, 1991 3,027.28 Oct 30, 1991 3,071.78 Jan 28, 1992 3,272.14
Aug 7, 1991 3,026.61 Oct 31, 1991 3,069.10 Jan 29, 1992 3,224.96
Aug 8, 1991 3,013.86 Nov 1, 1991 3,056.35 Jan 30, 1992 3,244.86
Aug 9, 1991 2,996.20 Nov 4, 1991 3,045.62 Jan 31, 1992 3,223.39
Aug 12, 1991 3,001.34 Nov 5, 1991 3,031.31 Feb 3, 1992 3,234.12
Aug 13, 1991 3,008.72 Nov 6, 1991 3,038.46 Feb 4, 1992 3,272.81
Aug 14, 1991 3,005.37 Nov 7, 1991 3,054.11 Feb 5, 1992 3,257.60
Aug 15, 1991 2,998.43 Nov 8, 1991 3,045.62 Feb 6, 1992 3,255.59
Aug 16, 1991 2,968.02 Nov 11, 1991 3,042.26 Feb 7, 1992 3,225.40
Aug 19, 1991 2,898.03 Nov 12, 1991 3,054.11 Feb 10, 1992 3,245.08
Aug 20, 1991 2,913.69 Nov 13, 1991 3,065.30 Feb 11, 1992 3,251.57
Aug 21, 1991 3,001.79 Nov 14, 1991 3,063.51 Feb 12, 1992 3,276.83
Aug 22, 1991 3,007.38 Nov 15, 1991 2,943.20 Feb 13, 1992 3,246.65
Aug 23, 1991 3,040.25 Nov 18, 1991 2,972.72 Feb 14, 1992 3,245.97
Aug 26, 1991 3,039.36 Nov 19, 1991 2,931.57 Feb 18, 1992 3,224.73
Aug 27, 1991 3,026.16 Nov 20, 1991 2,930.01 Feb 19, 1992 3,230.32
Aug 28, 1991 3,055.23 Nov 21, 1991 2,932.69 Feb 20, 1992 3,280.64
Aug 29, 1991 3,049.64 Nov 22, 1991 2,902.73 Feb 21, 1992 3,280.19
Aug 30, 1991 3,043.60 Nov 25, 1991 2,902.06 Feb 24, 1992 3,282.42
Appendix B
page 3
<PAGE>
DOW JONES INDUSTRIAL AVERAGE
Dow Jones Dow Jones Dow Jones
Industrial Industrial Industrial
Date Average Date Average Date Average
- - - ------------ ---------- ------------ ---------- ------------ ---------
Feb 25, 1992 3,257.83 May 20, 1992 3,393.84 Aug 14, 1992 3,328.94
Feb 26, 1992 3,283.32 May 21, 1992 3,378.71 Aug 17, 1992 3,324.89
Feb 27, 1992 3,269.45 May 22, 1992 3,386.77 Aug 18, 1992 3,329.48
Feb 28, 1992 3,267.67 May 26, 1992 3,364.21 Aug 19, 1992 3,307.06
Mar 2, 1992 3,275.27 May 27, 1992 3,370.44 Aug 20, 1992 3,304.89
Mar 3, 1992 3,290.25 May 28, 1992 3,398.43 Aug 21, 1992 3,254.10
Mar 4, 1992 3,268.56 May 29, 1992 3,396.88 Aug 24, 1992 3,228.17
Mar 5, 1992 3,241.50 Jun 1, 1992 3,413.21 Aug 25, 1992 3,232.22
Mar 6, 1992 3,221.60 Jun 2, 1992 3,396.10 Aug 26, 1992 3,246.81
Mar 9, 1992 3,215.12 Jun 3, 1992 3,406.99 Aug 27, 1992 3,254.64
Mar 10, 1992 3,230.99 Jun 4, 1992 3,399.73 Aug 28, 1992 3,267.61
Mar 11, 1992 3,208.63 Jun 5, 1992 3,398.69 Aug 31, 1992 3,257.35
Mar 12, 1992 3,208.63 Jun 8, 1992 3,404.14 Sep 1, 1992 3,266.26
Mar 13, 1992 3,235.91 Jun 9, 1992 3,369.92 Sep 2, 1992 3,290.31
Mar 16, 1992 3,236.36 Jun 10, 1992 3,343.22 Sep 3, 1992 3,292.20
Mar 17, 1992 3,256.04 Jun 11, 1992 3,351.51 Sep 4, 1992 3,281.93
Mar 18, 1992 3,254.25 Jun 12, 1992 3,354.36 Sep 8, 1992 3,260.59
Mar 19, 1992 3,261.40 Jun 15, 1992 3,354.90 Sep 9, 1992 3,271.39
Mar 20, 1992 3,276.39 Jun 16, 1992 3,329.49 Sep 10, 1992 3,305.16
Mar 23, 1992 3,272.14 Jun 17, 1992 3,287.76 Sep 11, 1992 3,305.70
Mar 24, 1992 3,260.96 Jun 18, 1992 3,274.12 Sep 14, 1992 3,376.22
Mar 25, 1992 3,259.39 Jun 19, 1992 3,285.35 Sep 15, 1992 3,327.32
Mar 26, 1992 3,267.67 Jun 22, 1992 3,280.80 Sep 16, 1992 3,319.21
Mar 27, 1992 3,231.44 Jun 23, 1992 3,285.62 Sep 17, 1992 3,315.70
Mar 30, 1992 3,235.24 Jun 24, 1992 3,290.70 Sep 18, 1992 3,327.05
Mar 31, 1992 3,235.47 Jun 25, 1992 3,284.01 Sep 21, 1992 3,320.83
Apr 1, 1992 3,249.33 Jun 26, 1992 3,282.41 Sep 22, 1992 3,280.85
Apr 2, 1992 3,234.12 Jun 29, 1992 3,319.86 Sep 23, 1992 3,278.69
Apr 3, 1992 3,249.11 Jun 30, 1992 3,318.52 Sep 24, 1992 3,287.87
Apr 6, 1992 3,275.49 Jul 1, 1992 3,354.10 Sep 25, 1992 3,250.32
Apr 7, 1992 3,213.55 Jul 2, 1992 3,330.29 Sep 28, 1992 3,276.26
Apr 8, 1992 3,181.35 Jul 6, 1992 3,339.21 Sep 29, 1992 3,266.80
Apr 9, 1992 3,224.96 Jul 7, 1992 3,295.17 Sep 30, 1992 3,271.66
Apr 10, 1992 3,255.37 Jul 8, 1992 3,293.28 Oct 1, 1992 3,254.37
Apr 13, 1992 3,260.06 Jul 9, 1992 3,324.08 Oct 2, 1992 3,200.61
Apr 14, 1992 3,306.13 Jul 10, 1992 3,330.56 Oct 5, 1992 3,179.00
Apr 15, 1992 3,353.76 Jul 13, 1992 3,337.31 Oct 6, 1992 3,178.19
Apr 16, 1992 3,366.50 Jul 14, 1992 3,358.39 Oct 7, 1992 3,152.25
Apr 20, 1992 3,336.31 Jul 15, 1992 3,345.42 Oct 8, 1992 3,176.03
Apr 21, 1992 3,343.25 Jul 16, 1992 3,361.63 Oct 9, 1992 3,136.58
Apr 22, 1992 3,338.77 Jul 17, 1992 3,331.64 Oct 12, 1992 3,174.41
Apr 23, 1992 3,348.61 Jul 20, 1992 3,303.00 Oct 13, 1992 3,201.42
Apr 24, 1992 3,324.46 Jul 21, 1992 3,308.41 Oct 14, 1992 3,195.48
Apr 27, 1992 3,304.56 Jul 22, 1992 3,277.61 Oct 15, 1992 3,174.68
Apr 28, 1992 3,307.92 Jul 23, 1992 3,290.04 Oct 16, 1992 3,174.41
Apr 29, 1992 3,333.18 Jul 24, 1992 3,285.71 Oct 19, 1992 3,188.45
Apr 30, 1992 3,359.12 Jul 27, 1992 3,282.20 Oct 20, 1992 3,186.02
May 1, 1992 3,336.09 Jul 28, 1992 3,334.07 Oct 21, 1992 3,187.10
May 4, 1992 3,378.13 Jul 29, 1992 3,379.19 Oct 22, 1992 3,200.88
May 5, 1992 3,359.35 Jul 30, 1992 3,391.89 Oct 23, 1992 3,207.64
May 6, 1992 3,369.41 Jul 31, 1992 3,393.78 Oct 26, 1992 3,244.11
May 7, 1992 3,363.37 Aug 3, 1992 3,395.40 Oct 27, 1992 3,235.73
May 8, 1992 3,369.41 Aug 4, 1992 3,384.32 Oct 28, 1992 3,251.40
May 11, 1992 3,397.58 Aug 5, 1992 3,365.14 Oct 29, 1992 3,246.27
May 12, 1992 3,385.12 Aug 6, 1992 3,340.56 Oct 30, 1992 3,226.28
May 13, 1992 3,391.98 Aug 7, 1992 3,332.18 Nov 2, 1992 3,262.21
May 14, 1992 3,368.88 Aug 10, 1992 3,337.58 Nov 3, 1992 3,252.48
May 15, 1992 3,353.09 Aug 11, 1992 3,331.10 Nov 4, 1992 3,223.04
May 18, 1992 3,376.03 Aug 12, 1992 3,320.83 Nov 5, 1992 3,243.84
May 19, 1992 3,397.99 Aug 13, 1992 3,313.27 Nov 6, 1992 3,240.06
Appendix B
page 4
<PAGE>
DOW JONES INDUSTRIAL AVERAGE
Dow Jones Dow Jones Dow Jones
Industrial Industrial Industrial
Date Average Date Average Date Average
- - - ------------ ---------- ------------ ---------- ------------ ---------
Nov 9, 1992 3,240.87 Feb 4, 1993 3,416.74 May 3, 1993 3,446.46
Nov 10, 1992 3,225.47 Feb 5, 1993 3,442.14 May 4, 1993 3,446.19
Nov 11, 1992 3,240.33 Feb 8, 1993 3,437.54 May 5, 1993 3,449.10
Nov 12, 1992 3,239.79 Feb 9, 1993 3,414.58 May 6, 1993 3,441.90
Nov 13, 1992 3,233.03 Feb 10, 1993 3,412.42 May 7, 1993 3,437.19
Nov 16, 1992 3,205.74 Feb 11, 1993 3,422.69 May 10, 1993 3,443.28
Nov 17, 1992 3,193.32 Feb 12, 1993 3,392.43 May 11, 1993 3,468.75
Nov 18, 1992 3,207.37 Feb 16, 1993 3,309.49 May 12, 1993 3,482.31
Nov 19, 1992 3,209.53 Feb 17, 1993 3,312.19 May 13, 1993 3,447.99
Nov 20, 1992 3,227.36 Feb 18, 1993 3,302.19 May 14, 1993 3,443.01
Nov 23, 1992 3,223.04 Feb 19, 1993 3,322.18 May 17, 1993 3,449.93
Nov 24, 1992 3,248.70 Feb 22, 1993 3,342.99 May 18, 1993 3,444.39
Nov 25, 1992 3,266.26 Feb 23, 1993 3,323.27 May 19, 1993 3,500.03
Nov 27, 1992 3,282.20 Feb 24, 1993 3,356.50 May 20, 1993 3,523.28
Nov 30, 1992 3,305.16 Feb 25, 1993 3,365.14 May 21, 1993 3,492.83
Dec 1, 1992 3,294.36 Feb 26, 1993 3,370.81 May 24, 1993 3,507.78
Dec 2, 1992 3,286.25 Mar 1, 1993 3,355.41 May 25, 1993 3,516.63
Dec 3, 1992 3,276.53 Mar 2, 1993 3,400.53 May 26, 1993 3,540.16
Dec 4, 1992 3,288.68 Mar 3, 1993 3,404.04 May 27, 1993 3,554.83
Dec 7, 1992 3,307.33 Mar 4, 1993 3,398.91 May 28, 1993 3,527.43
Dec 8, 1992 3,322.18 Mar 5, 1993 3,404.58 Jun 1, 1993 3,552.34
Dec 9, 1992 3,323.81 Mar 8, 1993 3,469.42 Jun 2, 1993 3,553.45
Dec 10, 1992 3,312.19 Mar 9, 1993 3,472.12 Jun 3, 1993 3,544.87
Dec 11, 1992 3,304.08 Mar 10, 1993 3,478.34 Jun 4, 1993 3,545.14
Dec 14, 1992 3,292.20 Mar 11, 1993 3,457.00 Jun 7, 1993 3,532.13
Dec 15, 1992 3,284.36 Mar 12, 1993 3,427.82 Jun 8, 1993 3,510.54
Dec 16, 1992 3,255.18 Mar 15, 1993 3,442.41 Jun 9, 1993 3,511.93
Dec 17, 1992 3,269.23 Mar 16, 1993 3,442.95 Jun 10, 1993 3,491.72
Dec 18, 1992 3,313.27 Mar 17, 1993 3,426.74 Jun 11, 1993 3,505.01
Dec 21, 1992 3,312.46 Mar 18, 1993 3,465.64 Jun 14, 1993 3,514.69
Dec 22, 1992 3,321.10 Mar 19, 1993 3,471.58 Jun 15, 1993 3,492.00
Dec 23, 1992 3,313.54 Mar 22, 1993 3,463.48 Jun 16, 1993 3,511.65
Dec 24, 1992 3,326.24 Mar 23, 1993 3,461.86 Jun 17, 1993 3,521.89
Dec 28, 1992 3,333.26 Mar 24, 1993 3,445.38 Jun 18, 1993 3,494.77
Dec 29, 1992 3,310.84 Mar 25, 1993 3,461.32 Jun 21, 1993 3,510.82
Dec 30, 1992 3,321.10 Mar 26, 1993 3,439.98 Jun 22, 1993 3,497.53
Dec 31, 1992 3,301.11 Mar 29, 1993 3,455.10 Jun 23, 1993 3,466.81
Jan 4, 1993 3,309.22 Mar 30, 1993 3,457.27 Jun 24, 1993 3,490.61
Jan 5, 1993 3,307.87 Mar 31, 1993 3,435.11 Jun 25, 1993 3,490.89
Jan 6, 1993 3,305.16 Apr 1, 1993 3,439.44 Jun 28, 1993 3,530.19
Jan 7, 1993 3,268.96 Apr 2, 1993 3,370.81 Jun 29, 1993 3,518.85
Jan 8, 1993 3,251.67 Apr 5, 1993 3,379.19 Jun 30, 1993 3,516.08
Jan 11, 1993 3,262.75 Apr 6, 1993 3,377.57 Jul 1, 1993 3,510.54
Jan 12, 1993 3,264.64 Apr 7, 1993 3,397.02 Jul 2, 1993 3,483.97
Jan 13, 1993 3,263.56 Apr 8, 1993 3,396.48 Jul 6, 1993 3,449.93
Jan 14, 1993 3,267.88 Apr 12, 1993 3,428.09 Jul 7, 1993 3,475.67
Jan 15, 1993 3,271.12 Apr 13, 1993 3,444.03 Jul 8, 1993 3,514.42
Jan 18, 1993 3,274.91 Apr 14, 1993 3,455.64 Jul 9, 1993 3,521.06
Jan 19, 1993 3,255.99 Apr 15, 1993 3,455.92 Jul 12, 1993 3,524.38
Jan 20, 1993 3,241.95 Apr 16, 1993 3,478.61 Jul 13, 1993 3,515.44
Jan 21, 1993 3,253.02 Apr 19, 1993 3,466.99 Jul 14, 1993 3,542.55
Jan 22, 1993 3,256.81 Apr 20, 1993 3,443.49 Jul 15, 1993 3,550.93
Jan 25, 1993 3,292.20 Apr 21, 1993 3,439.44 Jul 16, 1993 3,528.29
Jan 26, 1993 3,298.95 Apr 22, 1993 3,429.17 Jul 19, 1993 3,535.28
Jan 27, 1993 3,291.39 Apr 23, 1993 3,413.77 Jul 20, 1993 3,544.78
Jan 28, 1993 3,306.25 Apr 26, 1993 3,398.37 Jul 21, 1993 3,555.40
Jan 29, 1993 3,310.03 Apr 27, 1993 3,415.93 Jul 22, 1993 3,525.22
Feb 1, 1993 3,332.18 Apr 28, 1993 3,413.50 Jul 23, 1993 3,546.74
Feb 2, 1993 3,328.67 Apr 29, 1993 3,425.12 Jul 26, 1993 3,567.70
Feb 3, 1993 3,373.79 Apr 30, 1993 3,427.55 Jul 27, 1993 3,565.46
Appendix B
page 5
<PAGE>
DOW JONES INDUSTRIAL AVERAGE
Dow Jones Dow Jones Dow Jones
Industrial Industrial Industrial
Date Average Date Average Date Average
- - - ------------ ---------- ------------ ---------- ------------ ---------
Jul 28, 1993 3,553.45 Oct 21, 1993 3,636.16 Jan 17, 1994 3,870.29
Jul 29, 1993 3,567.42 Oct 22, 1993 3,649.30 Jan 18, 1994 3,870.29
Jul 30, 1993 3,539.47 Oct 25, 1993 3,673.61 Jan 19, 1994 3,884.37
Aug 2, 1993 3,560.99 Oct 26, 1993 3,672.49 Jan 20, 1994 3,891.96
Aug 3, 1993 3,561.27 Oct 27, 1993 3,664.66 Jan 21, 1994 3,914.48
Aug 4, 1993 3,552.05 Oct 28, 1993 3,687.86 Jan 24, 1994 3,912.79
Aug 5, 1993 3,548.97 Oct 29, 1993 3,680.59 Jan 25, 1994 3,895.34
Aug 6, 1993 3,560.43 Nov 1, 1993 3,692.61 Jan 26, 1994 3,908.00
Aug 9, 1993 3,576.08 Nov 2, 1993 3,697.64 Jan 27, 1994 3,926.30
Aug 10, 1993 3,572.73 Nov 3, 1993 3,661.87 Jan 28, 1994 3,945.43
Aug 11, 1993 3,583.35 Nov 4, 1993 3,624.98 Jan 31, 1994 3,978.36
Aug 12, 1993 3,569.09 Nov 5, 1993 3,643.43 Feb 1, 1994 3,964.01
Aug 13, 1993 3,569.65 Nov 8, 1993 3,647.90 Feb 2, 1994 3,975.54
Aug 16, 1993 3,579.15 Nov 9, 1993 3,640.07 Feb 3, 1994 3,967.66
Aug 17, 1993 3,586.98 Nov 10, 1993 3,663.55 Feb 4, 1994 3,871.42
Aug 18, 1993 3,604.86 Nov 11, 1993 3,662.43 Feb 7, 1994 3,906.32
Aug 19, 1993 3,612.13 Nov 12, 1993 3,684.51 Feb 8, 1994 3,906.03
Aug 20, 1993 3,615.48 Nov 15, 1993 3,677.52 Feb 9, 1994 3,931.92
Aug 23, 1993 3,605.98 Nov 16, 1993 3,710.77 Feb 10, 1994 3,895.34
Aug 24, 1993 3,638.96 Nov 17, 1993 3,704.35 Feb 11, 1994 3,894.78
Aug 25, 1993 3,652.09 Nov 18, 1993 3,685.34 Feb 14, 1994 3,904.06
Aug 26, 1993 3,648.18 Nov 19, 1993 3,694.01 Feb 15, 1994 3,928.27
Aug 27, 1993 3,640.63 Nov 22, 1993 3,670.25 Feb 16, 1994 3,937.27
Aug 30, 1993 3,643.99 Nov 23, 1993 3,674.17 Feb 17, 1994 3,922.64
Aug 31, 1993 3,651.25 Nov 24, 1993 3,687.58 Feb 18, 1994 3,887.46
Sep 1, 1993 3,645.10 Nov 26, 1993 3,683.95 Feb 22, 1994 3,911.66
Sep 2, 1993 3,626.10 Nov 29, 1993 3,677.80 Feb 23, 1994 3,891.68
Sep 3, 1993 3,633.93 Nov 30, 1993 3,683.95 Feb 24, 1994 3,839.90
Sep 7, 1993 3,607.10 Dec 1, 1993 3,697.08 Feb 25, 1994 3,838.78
Sep 8, 1993 3,588.93 Dec 2, 1993 3,702.11 Feb 28, 1994 3,832.02
Sep 9, 1993 3,589.49 Dec 3, 1993 3,704.07 Mar 1, 1994 3,809.23
Sep 10, 1993 3,621.63 Dec 6, 1993 3,710.21 Mar 2, 1994 3,831.74
Sep 13, 1993 3,634.21 Dec 7, 1993 3,718.88 Mar 3, 1994 3,824.42
Sep 14, 1993 3,615.76 Dec 8, 1993 3,734.53 Mar 4, 1994 3,832.30
Sep 15, 1993 3,633.65 Dec 9, 1993 3,729.78 Mar 7, 1994 3,856.22
Sep 16, 1993 3,630.85 Dec 10, 1993 3,740.67 Mar 8, 1994 3,851.72
Sep 17, 1993 3,613.25 Dec 13, 1993 3,764.43 Mar 9, 1994 3,853.41
Sep 20, 1993 3,575.80 Dec 14, 1993 3,742.63 Mar 10, 1994 3,830.62
Sep 21, 1993 3,537.24 Dec 15, 1993 3,716.92 Mar 11, 1994 3,862.70
Sep 22, 1993 3,547.02 Dec 16, 1993 3,726.14 Mar 14, 1994 3,862.98
Sep 23, 1993 3,539.75 Dec 17, 1993 3,751.57 Mar 15, 1994 3,849.59
Sep 24, 1993 3,543.11 Dec 20, 1993 3,755.21 Mar 16, 1994 3,848.15
Sep 27, 1993 3,567.70 Dec 21, 1993 3,745.15 Mar 17, 1994 3,865.14
Sep 28, 1993 3,566.02 Dec 22, 1993 3,762.19 Mar 18, 1994 3,895.65
Sep 29, 1993 3,566.30 Dec 23, 1993 3,757.72 Mar 21, 1994 3,864.85
Sep 30, 1993 3,555.12 Dec 27, 1993 3,792.93 Mar 22, 1994 3,862.55
Oct 1, 1993 3,581.11 Dec 28, 1993 3,793.77 Mar 23, 1994 3,869.46
Oct 4, 1993 3,577.76 Dec 29, 1993 3,794.33 Mar 24, 1994 3,821.09
Oct 5, 1993 3,587.26 Dec 30, 1993 3,775.88 Mar 25, 1994 3,774.73
Oct 6, 1993 3,598.99 Dec 31, 1993 3,754.09 Mar 28, 1994 3,762.35
Oct 7, 1993 3,583.63 Jan 3, 1994 3,756.60 Mar 29, 1994 3,699.02
Oct 8, 1993 3,584.74 Jan 4, 1994 3,783.90 Mar 30, 1994 3,626.75
Oct 11, 1993 3,593.41 Jan 5, 1994 3,798.82 Mar 31, 1994 3,635.96
Oct 12, 1993 3,593.13 Jan 6, 1994 3,803.88 Apr 4, 1994 3,593.35
Oct 13, 1993 3,603.19 Jan 7, 1994 3,820.77 Apr 5, 1994 3,675.41
Oct 14, 1993 3,621.63 Jan 10, 1994 3,865.51 Apr 6, 1994 3,679.73
Oct 15, 1993 3,629.73 Jan 11, 1994 3,850.31 Apr 7, 1994 3,693.26
Oct 18, 1993 3,642.31 Jan 12, 1994 3,848.63 Apr 8, 1994 3,674.26
Oct 19, 1993 3,635.32 Jan 13, 1994 3,842.43 Apr 11, 1994 3,688.83
Oct 20, 1993 3,645.10 Jan 14, 1994 3,867.20 Apr 12, 1994 3,681.69
Appendix B
page 6
<PAGE>
DOW JONES INDUSTRIAL AVERAGE
Dow Jones Dow Jones Dow Jones
Industrial Industrial Industrial
Date Average Date Average Date Average
- - - ------------ ---------- ------------ ---------- ------------ ---------
Apr 13, 1994 3,661.47 Jul 11, 1994 3,703.00 Oct 4, 1994 3,801.13
Apr 14, 1994 3,663.25 Jul 12, 1994 3,702.66 Oct 5, 1994 3,787.34
Apr 15, 1994 3,661.47 Jul 13, 1994 3,704.28 Oct 6, 1994 3,775.56
Apr 18, 1994 3,620.42 Jul 14, 1994 3,739.26 Oct 7, 1994 3,797.43
Apr 19, 1994 3,619.82 Jul 15, 1994 3,753.82 Oct 10, 1994 3,821.32
Apr 20, 1994 3,598.71 Jul 18, 1994 3,755.44 Oct 11, 1994 3,876.83
Apr 21, 1994 3,652.54 Jul 19, 1994 3,748.31 Oct 12, 1994 3,875.15
Apr 22, 1994 3,648.68 Jul 20, 1994 3,727.27 Oct 13, 1994 3,889.95
Apr 25, 1994 3,705.78 Jul 21, 1994 3,732.45 Oct 14, 1994 3,910.47
Apr 26, 1994 3,699.54 Jul 22, 1994 3,735.04 Oct 17, 1994 3,923.93
Apr 28, 1994 3,668.31 Jul 25, 1994 3,741.84 Oct 18, 1994 3,917.54
Apr 29, 1994 3,681.69 Jul 26, 1994 3,735.68 Oct 19, 1994 3,936.04
May 2, 1994 3,701.02 Jul 27, 1994 3,720.47 Oct 20, 1994 3,911.15
May 3, 1994 3,714.41 Jul 28, 1994 3,730.83 Oct 21, 1994 3,891.30
May 4, 1994 3,697.75 Jul 29, 1994 3,764.50 Oct 24, 1994 3,855.30
May 5, 1994 3,695.97 Aug 1, 1994 3,798.17 Oct 25, 1994 3,850.59
May 6, 1994 3,669.50 Aug 2, 1994 3,796.22 Oct 26, 1994 3,848.23
May 9, 1994 3,629.04 Aug 3, 1994 3,792.66 Oct 27, 1994 3,875.15
May 10, 1994 3,656.41 Aug 4, 1994 3,765.79 Oct 28, 1994 3,930.66
May 11, 1994 3,629.04 Aug 5, 1994 3,747.02 Oct 31, 1994 3,908.12
May 12, 1994 3,652.84 Aug 8, 1994 3,753.81 Nov 1, 1994 3,863.37
May 13, 1994 3,659.68 Aug 9, 1994 3,755.76 Nov 2, 1994 3,837.13
May 16, 1994 3,671.50 Aug 10, 1994 3,766.76 Nov 3, 1994 3,845.88
May 17, 1994 3,720.61 Aug 11, 1994 3,750.90 Nov 4, 1994 3,807.52
May 18, 1994 3,732.89 Aug 12, 1994 3,768.71 Nov 7, 1994 3,808.87
May 19, 1994 3,758.98 Aug 15, 1994 3,760.29 Nov 8, 1994 3,830.74
May 20, 1994 3,766.36 Aug 16, 1994 3,784.57 Nov 9, 1994 3,831.75
May 23, 1994 3,742.40 Aug 17, 1994 3,776.48 Nov 10, 1994 3,821.99
May 24, 1994 3,745.16 Aug 18, 1994 3,755.43 Nov 11, 1994 3,801.47
May 25, 1994 3,755.30 Aug 19, 1994 3,755.11 Nov 14, 1994 3,829.73
May 26, 1994 3,753.50 Aug 22, 1994 3,751.22 Nov 15, 1994 3,826.36
May 27, 1994 3,757.10 Aug 23, 1994 3,775.83 Nov 16, 1994 3,845.20
May 31, 1994 3,758.40 Aug 24, 1994 3,846.73 Nov 17, 1994 3,828.05
Jun 1, 1994 3,760.84 Aug 25, 1994 3,829.89 Nov 18, 1994 3,815.26
Jun 2, 1994 3,759.00 Aug 26, 1994 3,881.05 Nov 21, 1994 3,769.51
Jun 3, 1994 3,772.20 Aug 29, 1994 3,898.85 Nov 22, 1994 3,677.99
Jun 6, 1994 3,768.52 Aug 30, 1994 3,917.30 Nov 23, 1994 3,674.63
Jun 7, 1994 3,755.92 Aug 31, 1994 3,913.42 Nov 25, 1994 3,708.27
Jun 8, 1994 3,749.50 Sep 1, 1994 3,901.44 Nov 28, 1994 3,739.56
Jun 9, 1994 3,753.14 Sep 2, 1994 3,885.58 Nov 29, 1994 3,738.55
Jun 10, 1994 3,773.50 Sep 6, 1994 3,898.70 Nov 30, 1994 3,739.23
Jun 13, 1994 3,783.12 Sep 7, 1994 3,886.25 Dec 1, 1994 3,700.87
Jun 14, 1994 3,814.80 Sep 8, 1994 3,908.46 Dec 2, 1994 3,745.62
Jun 15, 1994 3,790.40 Sep 9, 1994 3,874.81 Dec 5, 1994 3,741.92
Jun 16, 1994 3,811.34 Sep 12, 1994 3,860.34 Dec 6, 1994 3,745.95
Jun 17, 1994 3,776.80 Sep 13, 1994 3,879.86 Dec 7, 1994 3,735.52
Jun 20, 1994 3,741.90 Sep 14, 1994 3,895.33 Dec 8, 1994 3,685.73
Jun 21, 1994 3,707.98 Sep 15, 1994 3,953.88 Dec 9, 1994 3,691.11
Jun 22, 1994 3,724.78 Sep 16, 1994 3,933.35 Dec 12, 1994 3,718.37
Jun 23, 1994 3,699.10 Sep 19, 1994 3,936.72 Dec 13, 1994 3,715.34
Jun 24, 1994 3,636.94 Sep 20, 1994 3,869.09 Dec 14, 1994 3,746.29
Jun 27, 1994 3,685.50 Sep 21, 1994 3,851.60 Dec 15, 1994 3,765.47
Jun 28, 1994 3,669.64 Sep 22, 1994 3,837.13 Dec 16, 1994 3,807.19
Jun 29, 1994 3,667.06 Sep 23, 1994 3,831.75 Dec 19, 1994 3,790.70
Jun 30, 1994 3,624.96 Sep 26, 1994 3,849.24 Dec 20, 1994 3,767.15
Jul 1, 1994 3,646.66 Sep 27, 1994 3,863.04 Dec 21, 1994 3,801.80
Jul 5, 1994 3,652.48 Sep 28, 1994 3,878.18 Dec 22, 1994 3,814.92
Jul 6, 1994 3,674.50 Sep 29, 1994 3,854.63 Dec 23, 1994 3,833.43
Jul 7, 1994 3,688.42 Sep 30, 1994 3,843.19 Dec 27, 1994 3,861.69
Jul 8, 1994 3,709.14 Oct 3, 1994 3,846.89 Dec 28, 1994 3,839.49
Appendix B
page 7
<PAGE>
DOW JONES INDUSTRIAL AVERAGE
Dow Jones Dow Jones Dow Jones
Industrial Industrial Industrial
Date Average Date Average Date Average
- - - ------------ ---------- ------------ ---------- ------------ ---------
Dec 29, 1994 3,833.43 Mar 27, 1995 4,157.34 Jun 21, 1995 4,547.10
Dec 30, 1994 3,834.44 Mar 28, 1995 4,151.81 Jun 22, 1995 4,589.64
Jan 3, 1995 3,838.48 Mar 29, 1995 4,160.80 Jun 23, 1995 4,585.84
Jan 4, 1995 3,857.65 Mar 30, 1995 4,172.56 Jun 26, 1995 4,551.25
Jan 5, 1995 3,850.92 Mar 31, 1995 4,157.69 Jun 27, 1995 4,542.61
Jan 6, 1995 3,867.41 Apr 3, 1995 4,168.41 Jun 28, 1995 4,556.79
Jan 9, 1995 3,861.35 Apr 4, 1995 4,201.61 Jun 29, 1995 4,550.56
Jan 10, 1995 3,866.74 Apr 5, 1995 4,200.57 Jun 30, 1995 4,556.10
Jan 11, 1995 3,862.03 Apr 6, 1995 4,205.41 Jul 3, 1995 4,585.15
Jan 12, 1995 3,859.00 Apr 7, 1995 4,192.62 Jul 5, 1995 4,615.23
Jan 13, 1995 3,908.46 Apr 10, 1995 4,198.15 Jul 6, 1995 4,664.00
Jan 16, 1995 3,932.34 Apr 11, 1995 4,187.08 Jul 7, 1995 4,702.73
Jan 17, 1995 3,930.66 Apr 12, 1995 4,197.81 Jul 10, 1995 4,702.39
Jan 18, 1995 3,928.98 Apr 13, 1995 4,208.18 Jul 11, 1995 4,680.60
Jan 19, 1995 3,882.21 Apr 17, 1995 4,195.38 Jul 12, 1995 4,727.29
Jan 20, 1995 3,869.43 Apr 18, 1995 4,179.13 Jul 13, 1995 4,727.48
Jan 23, 1995 3,867.41 Apr 19, 1995 4,207.49 Jul 14, 1995 4,708.82
Jan 24, 1995 3,862.70 Apr 20, 1995 4,230.66 Jul 17, 1995 4,736.29
Jan 25, 1995 3,871.45 Apr 21, 1995 4,270.09 Jul 18, 1995 4,686.28
Jan 26, 1995 3,870.44 Apr 24, 1995 4,303.98 Jul 19, 1995 4,628.87
Jan 27, 1995 3,857.99 Apr 25, 1995 4,300.17 Jul 20, 1995 4,641.55
Jan 30, 1995 3,832.08 Apr 26, 1995 4,299.83 Jul 21, 1995 4,641.55
Jan 31, 1995 3,843.86 Apr 27, 1995 4,314.70 Jul 24, 1995 4,668.67
Feb 1, 1995 3,847.56 Apr 28, 1995 4,321.27 Jul 25, 1995 4,714.45
Feb 2, 1995 3,870.77 May 1, 1995 4,316.08 Jul 26, 1995 4,707.06
Feb 3, 1995 3,928.64 May 2, 1995 4,328.88 Jul 27, 1995 4,732.77
Feb 6, 1995 3,937.73 May 3, 1995 4,373.15 Jul 28, 1995 4,715.51
Feb 7, 1995 3,937.39 May 4, 1995 4,359.66 Jul 31, 1995 4,708.47
Feb 8, 1995 3,935.37 May 5, 1995 4,343.40 Aug 1, 1995 4,700.37
Feb 9, 1995 3,932.68 May 8, 1995 4,383.87 Aug 2, 1995 4,690.15
Feb 10, 1995 3,939.07 May 9, 1995 4,390.78 Aug 3, 1995 4,701.42
Feb 13, 1995 3,954.21 May 10, 1995 4,404.62 Aug 4, 1995 4,683.46
Feb 14, 1995 3,958.25 May 11, 1995 4,411.19 Aug 7, 1995 4,693.32
Feb 15, 1995 3,986.17 May 12, 1995 4,430.56 Aug 8, 1995 4,693.32
Feb 16, 1995 3,987.52 May 15, 1995 4,437.47 Aug 9, 1995 4,671.49
Feb 17, 1995 3,953.54 May 16, 1995 4,435.05 Aug 10, 1995 4,643.66
Feb 21, 1995 3,963.97 May 17, 1995 4,422.60 Aug 11, 1995 4,618.30
Feb 22, 1995 3,973.05 May 18, 1995 4,340.64 Aug 14, 1995 4,659.86
Feb 23, 1995 4,003.33 May 19, 1995 4,341.33 Aug 15, 1995 4,640.84
Feb 24, 1995 4,011.74 May 22, 1995 4,395.63 Aug 16, 1995 4,639.08
Feb 27, 1995 3,988.57 May 23, 1995 4,436.44 Aug 17, 1995 4,630.63
Feb 28, 1995 4,011.05 May 24, 1995 4,438.16 Aug 18, 1995 4,617.60
Mar 1, 1995 3,994.80 May 25, 1995 4,412.23 Aug 21, 1995 4,614.78
Mar 2, 1995 3,979.93 May 26, 1995 4,369.00 Aug 22, 1995 4,620.42
Mar 3, 1995 3,989.61 May 30, 1995 4,378.68 Aug 23, 1995 4,584.85
Mar 6, 1995 3,997.56 May 31, 1995 4,465.14 Aug 24, 1995 4,580.62
Mar 7, 1995 3,962.63 Jun 1, 1995 4,472.75 Aug 25, 1995 4,601.40
Mar 8, 1995 3,979.23 Jun 2, 1995 4,444.39 Aug 28, 1995 4,594.00
Mar 9, 1995 3,983.39 Jun 5, 1995 4,476.55 Aug 29, 1995 4,608.44
Mar 10, 1995 4,035.61 Jun 6, 1995 4,485.20 Aug 30, 1995 4,604.57
Mar 13, 1995 4,025.23 Jun 7, 1995 4,462.03 Aug 31, 1995 4,610.56
Mar 14, 1995 4,048.75 Jun 8, 1995 4,458.57 Sep 1, 1995 4,647.54
Mar 15, 1995 4,038.37 Jun 9, 1995 4,423.99 Sep 5, 1995 4,670.08
Mar 16, 1995 4,069.15 Jun 12, 1995 4,446.46 Sep 6, 1995 4,683.81
Mar 17, 1995 4,073.65 Jun 13, 1995 4,484.51 Sep 7, 1995 4,669.72
Mar 20, 1995 4,083.68 Jun 14, 1995 4,491.08 Sep 8, 1995 4,700.72
Mar 21, 1995 4,072.61 Jun 15, 1995 4,496.27 Sep 11, 1995 4,704.94
Mar 22, 1995 4,082.99 Jun 16, 1995 4,510.79 Sep 12, 1995 4,747.21
Mar 23, 1995 4,087.83 Jun 19, 1995 4,553.68 Sep 13, 1995 4,765.52
Mar 24, 1995 4,138.67 Jun 20, 1995 4,550.56 Sep 14, 1995 4,801.80
Appendix B
page 8
<PAGE>
DOW JONES INDUSTRIAL AVERAGE
Dow Jones Dow Jones
Industrial Industrial
Date Average Date Average
- - - ------------ ---------- ------------ ----------
Sep 15, 1995 4,797.57 Dec 11, 1995 5,184.32
Sep 18, 1995 4,780.41 Dec 12, 1995 5,174.92
Sep 19, 1995 4,767.04 Dec 13, 1995 5,216.47
Sep 20, 1995 4,792.69 Dec 14, 1995 5,182.15
Sep 21, 1995 4,767.40 Dec 15, 1995 5,176.73
Sep 22, 1995 4,764.15 Dec 18, 1995 5,075.21
Sep 25, 1995 4,769.93 Dec 19, 1995 5,109.89
Sep 26, 1995 4,765.60 Dec 20, 1995 5,059.32
Sep 27, 1995 4,762.35 Dec 21, 1995 5,096.53
Sep 28, 1995 4,787.64 Dec 22, 1995 5,097.97
Sep 29, 1995 4,789.08 Dec 26, 1995 5,110.26
Oct 2, 1995 4,761.26 Dec 27, 1995 5,105.92
Oct 3, 1995 4,749.70 Dec 28, 1995 5,095.80
Oct 4, 1995 4,740.67 Dec 29, 1995 5,117.12
Oct 5, 1995 4,762.71 Jan 2, 1996 5,177.45
Oct 6, 1995 4,769.21 Jan 3, 1996 5,194.07
Oct 9, 1995 4,726.22 Jan 4, 1996 5,173.84
Oct 10, 1995 4,720.80 Jan 5, 1996 5,181.43
Oct 11, 1995 4,735.25 Jan 8, 1996 5,197.68
Oct 12, 1995 4,764.88 Jan 9, 1996 5,130.13
Oct 13, 1995 4,793.78 Jan 10, 1996 5,032.94
Oct 16, 1995 4,784.38 Jan 11, 1996 5,065.10
Oct 17, 1995 4,795.94 Jan 12, 1996 5,061.12
Oct 18, 1995 4,777.52 Jan 15, 1996 5,043.78
Oct 19, 1995 4,802.45 Jan 16, 1996 5,088.22
Oct 20, 1995 4,794.86 Jan 17, 1996 5,066.90
Oct 23, 1995 4,755.48 Jan 18, 1996 5,124.35
Oct 24, 1995 4,783.66 Jan 19, 1996 5,184.68
Oct 25, 1995 4,753.68 Jan 22, 1996 5,219.36
Oct 26, 1995 4,703.82 Jan 23, 1996 5,192.27
Oct 27, 1995 4,741.75 Jan 24, 1996 5,242.84
Oct 30, 1995 4,756.57 Jan 25, 1996 5,216.83
Oct 31, 1995 4,755.48 Jan 26, 1996 5,271.75
Nov 1, 1995 4,766.68 Jan 29, 1996 5,304.98
Nov 2, 1995 4,808.59 Jan 30, 1996 5,381.21
Nov 3, 1995 4,825.57 Jan 31, 1996 5,395.30
Nov 6, 1995 4,814.01
Nov 7, 1995 4,797.03
Nov 8, 1995 4,852.67
Nov 9, 1995 4,864.23
Nov 10, 1995 4,870.37
Nov 13, 1995 4,872.90
Nov 14, 1995 4,871.81
Nov 15, 1995 4,922.75
Nov 16, 1995 4,969.36
Nov 17, 1995 4,989.95
Nov 20, 1995 4,983.09
Nov 21, 1995 5,023.55
Nov 22, 1995 5,041.61
Nov 24, 1995 5,048.84
Nov 27, 1995 5,070.88
Nov 28, 1995 5,078.10
Nov 29, 1995 5,105.56
Nov 30, 1995 5,074.49
Dec 1, 1995 5,087.13
Dec 4, 1995 5,139.52
Dec 5, 1995 5,177.45
Dec 6, 1995 5,199.13
Dec 7, 1995 5,159.39
Dec 8, 1995 5,156.86
Appendix B
page 9
<PAGE>
Standard Poor's 500 Stock Index
Date S&P500 Date S&P500 Date S&P500
- - - ------------ ------ ------------ ------ ------------ ------
Jan 2, 1990 359.69 Mar 29, 1990 340.79 Jun 26, 1990 352.06
Jan 3, 1990 358.76 Mar 30, 1990 339.94 Jun 27, 1990 355.14
Jan 4, 1990 355.67 Apr 2, 1990 338.70 Jun 28, 1990 357.63
Jan 5, 1990 352.20 Apr 3, 1990 343.64 Jun 29, 1990 358.02
Jan 8, 1990 353.79 Apr 4, 1990 341.09 Jul 2, 1990 359.54
Jan 9, 1990 349.62 Apr 5, 1990 340.73 Jul 3, 1990 360.16
Jan 10, 1990 347.31 Apr 6, 1990 340.08 Jul 5, 1990 355.68
Jan 11, 1990 348.53 Apr 9, 1990 341.37 Jul 6, 1990 358.42
Jan 12, 1990 339.93 Apr 10, 1990 342.07 Jul 9, 1990 359.52
Jan 15, 1990 337.00 Apr 11, 1990 341.92 Jul 10, 1990 356.49
Jan 16, 1990 340.75 Apr 12, 1990 344.34 Jul 11, 1990 361.23
Jan 17, 1990 337.40 Apr 16, 1990 344.74 Jul 12, 1990 365.44
Jan 18, 1990 338.19 Apr 17, 1990 344.68 Jul 13, 1990 367.31
Jan 19, 1990 339.15 Apr 18, 1990 340.72 Jul 16, 1990 368.95
Jan 22, 1990 330.38 Apr 19, 1990 338.09 Jul 17, 1990 367.52
Jan 23, 1990 331.61 Apr 20, 1990 335.12 Jul 18, 1990 364.22
Jan 24, 1990 330.26 Apr 23, 1990 331.05 Jul 19, 1990 365.32
Jan 25, 1990 326.08 Apr 24, 1990 330.36 Jul 20, 1990 361.61
Jan 26, 1990 325.80 Apr 25, 1990 332.03 Jul 23, 1990 355.31
Jan 29, 1990 325.20 Apr 26, 1990 332.92 Jul 24, 1990 355.79
Jan 30, 1990 322.98 Apr 27, 1990 329.11 Jul 25, 1990 357.09
Jan 31, 1990 329.08 Apr 30, 1990 330.80 Jul 26, 1990 355.91
Feb 1, 1990 328.79 May 1, 1990 332.25 Jul 27, 1990 353.44
Feb 2, 1990 330.92 May 2, 1990 334.48 Jul 30, 1990 355.55
Feb 5, 1990 331.85 May 3, 1990 335.57 Jul 31, 1990 356.15
Feb 6, 1990 329.66 May 4, 1990 338.39 Aug 1, 1990 355.52
Feb 7, 1990 333.75 May 7, 1990 340.53 Aug 2, 1990 351.48
Feb 8, 1990 332.96 May 8, 1990 342.01 Aug 3, 1990 344.86
Feb 9, 1990 333.62 May 9, 1990 347.86 Aug 6, 1990 334.43
Feb 12, 1990 330.08 May 10, 1990 343.82 Aug 7, 1990 334.83
Feb 13, 1990 331.02 May 11, 1990 352.00 Aug 8, 1990 338.35
Feb 14, 1990 332.01 May 14, 1990 354.75 Aug 9, 1990 339.94
Feb 15, 1990 334.89 May 15, 1990 354.28 Aug 10, 1990 335.52
Feb 16, 1990 332.72 May 16, 1990 354.00 Aug 13, 1990 338.84
Feb 20, 1990 327.99 May 17, 1990 354.47 Aug 14, 1990 339.39
Feb 21, 1990 327.67 May 18, 1990 354.64 Aug 15, 1990 340.06
Feb 22, 1990 325.70 May 21, 1990 358.00 Aug 16, 1990 332.39
Feb 23, 1990 324.15 May 22, 1990 358.43 Aug 17, 1990 327.83
Feb 26, 1990 328.67 May 23, 1990 359.29 Aug 20, 1990 328.51
Feb 27, 1990 330.26 May 24, 1990 358.41 Aug 21, 1990 321.86
Feb 28, 1990 331.89 May 25, 1990 354.58 Aug 22, 1990 316.55
Mar 1, 1990 332.74 May 29, 1990 360.65 Aug 23, 1990 307.06
Mar 2, 1990 335.54 May 30, 1990 360.86 Aug 24, 1990 311.51
Mar 5, 1990 333.74 May 31, 1990 361.23 Aug 27, 1990 321.44
Mar 6, 1990 337.93 Jun 1, 1990 363.16 Aug 28, 1990 321.34
Mar 7, 1990 336.95 Jun 4, 1990 367.40 Aug 29, 1990 324.19
Mar 8, 1990 340.27 Jun 5, 1990 366.64 Aug 30, 1990 318.71
Mar 9, 1990 337.93 Jun 6, 1990 364.96 Aug 31, 1990 322.56
Mar 12, 1990 338.67 Jun 7, 1990 363.15 Sep 4, 1990 323.09
Mar 13, 1990 336.00 Jun 8, 1990 358.71 Sep 5, 1990 324.39
Mar 14, 1990 336.87 Jun 11, 1990 361.63 Sep 6, 1990 320.46
Mar 15, 1990 338.07 Jun 12, 1990 366.25 Sep 7, 1990 323.40
Mar 16, 1990 341.91 Jun 13, 1990 364.90 Sep 10, 1990 321.63
Mar 19, 1990 343.53 Jun 14, 1990 362.90 Sep 11, 1990 321.04
Mar 20, 1990 341.57 Jun 15, 1990 362.91 Sep 12, 1990 322.54
Mar 21, 1990 339.74 Jun 18, 1990 356.88 Sep 13, 1990 318.65
Mar 22, 1990 335.65 Jun 19, 1990 358.97 Sep 14, 1990 316.83
Mar 23, 1990 337.22 Jun 20, 1990 359.10 Sep 17, 1990 317.77
Mar 26, 1990 337.63 Jun 21, 1990 360.47 Sep 18, 1990 318.60
Mar 27, 1990 341.50 Jun 22, 1990 355.43 Sep 19, 1990 316.60
Mar 28, 1990 342.00 Jun 25, 1990 352.31 Sep 20, 1990 311.48
Appendix B
page 1
<PAGE>
Standard Poor's 500 Stock Index
Date S&P500 Date S&P500 Date S&P500
- - - ------------ ------ ------------ ------ ------------ ------
Sep 21, 1990 311.32 Dec 18, 1990 330.05 Mar 19, 1991 366.59
Sep 24, 1990 304.59 Dec 19, 1990 330.20 Mar 20, 1991 367.92
Sep 25, 1990 308.26 Dec 20, 1990 330.12 Mar 21, 1991 366.58
Sep 26, 1990 305.06 Dec 21, 1990 331.75 Mar 26, 1991 370.30
Sep 27, 1990 300.97 Dec 24, 1990 329.90 Mar 27, 1991 375.35
Sep 28, 1990 306.05 Dec 26, 1990 330.85 Mar 28, 1991 375.22
Oct 1, 1990 314.94 Dec 27, 1990 328.29 Apr 1, 1991 371.30
Oct 2, 1990 315.21 Dec 28, 1990 328.72 Apr 2, 1991 379.30
Oct 3, 1990 311.40 Dec 31, 1990 330.22 Apr 3, 1991 378.94
Oct 4, 1990 312.69 Jan 2, 1991 326.45 Apr 4, 1991 379.77
Oct 5, 1990 311.50 Jan 3, 1991 321.91 Apr 5, 1991 375.36
Oct 8, 1990 313.48 Jan 4, 1991 321.00 Apr 8, 1991 378.66
Oct 9, 1990 305.10 Jan 7, 1991 315.44 Apr 9, 1991 373.56
Oct 10, 1990 300.39 Jan 8, 1991 314.90 Apr 10, 1991 373.15
Oct 11, 1990 295.46 Jan 9, 1991 311.49 Apr 11, 1991 377.63
Oct 12, 1990 300.03 Jan 10, 1991 314.53 Apr 12, 1991 380.40
Oct 15, 1990 303.23 Jan 11, 1991 315.23 Apr 15, 1991 381.19
Oct 16, 1990 298.92 Jan 14, 1991 312.49 Apr 16, 1991 387.62
Oct 17, 1990 298.76 Jan 15, 1991 313.73 Apr 17, 1991 390.45
Oct 18, 1990 305.74 Jan 16, 1991 316.17 Apr 18, 1991 388.46
Oct 19, 1990 312.48 Jan 17, 1991 327.97 Apr 19, 1991 384.20
Oct 22, 1990 314.76 Jan 18, 1991 332.23 Apr 22, 1991 380.95
Oct 23, 1990 312.36 Jan 22, 1991 328.31 Apr 23, 1991 381.76
Oct 24, 1990 312.60 Jan 23, 1991 330.21 Apr 24, 1991 382.76
Oct 25, 1990 310.17 Jan 24, 1991 334.78 Apr 25, 1991 379.25
Oct 26, 1990 304.71 Jan 25, 1991 336.07 Apr 26, 1991 379.02
Oct 29, 1990 301.88 Jan 28, 1991 336.03 Apr 29, 1991 373.66
Oct 30, 1990 304.06 Jan 29, 1991 335.84 Apr 30, 1991 375.35
Oct 31, 1990 304.00 Jan 30, 1991 340.91 May 1, 1991 380.29
Nov 1, 1990 307.02 Jan 31, 1991 343.93 May 2, 1991 380.52
Nov 2, 1990 311.85 Feb 1, 1991 343.35 May 3, 1991 380.80
Nov 5, 1990 314.59 Feb 4, 1991 348.34 May 6, 1991 380.08
Nov 6, 1990 311.62 Feb 5, 1991 351.26 May 7, 1991 377.32
Nov 7, 1990 306.01 Feb 6, 1991 358.07 May 8, 1991 378.51
Nov 8, 1990 307.61 Feb 7, 1991 356.52 May 9, 1991 383.25
Nov 9, 1990 313.74 Feb 8, 1991 359.35 May 10, 1991 375.74
Nov 12, 1990 319.48 Feb 11, 1991 368.58 May 13, 1991 376.76
Nov 13, 1990 317.67 Feb 12, 1991 365.50 May 14, 1991 371.62
Nov 14, 1990 320.40 Feb 13, 1991 369.02 May 15, 1991 388.57
Nov 15, 1990 317.02 Feb 14, 1991 369.00 May 16, 1991 372.19
Nov 16, 1990 317.12 Feb 15, 1991 369.06 May 17, 1991 372.39
Nov 19, 1990 319.34 Feb 19, 1991 369.39 May 20, 1991 372.28
Nov 20, 1990 315.31 Feb 20, 1991 365.14 May 21, 1991 375.35
Nov 21, 1990 316.03 Feb 21, 1991 364.97 May 22, 1991 376.19
Nov 23, 1990 315.10 Feb 22, 1991 365.65 May 23, 1991 374.97
Nov 26, 1990 316.51 Feb 25, 1991 367.26 May 24, 1991 377.49
Nov 27, 1990 318.10 Feb 26, 1991 362.81 May 27, 1991 377.49
Nov 28, 1990 317.95 Feb 27, 1991 367.74 May 28, 1991 381.94
Nov 29, 1990 316.42 Feb 28, 1991 367.07 May 29, 1991 382.79
Nov 30, 1990 322.22 Mar 1, 1991 370.47 May 30, 1991 386.96
Dec 3, 1990 324.10 Mar 4, 1991 369.33 May 31, 1991 389.83
Dec 4, 1990 326.35 Mar 5, 1991 376.72 Jun 3, 1991 388.06
Dec 5, 1990 329.92 Mar 6, 1991 376.17 Jun 4, 1991 387.74
Dec 6, 1990 329.07 Mar 7, 1991 375.91 Jun 5, 1991 385.09
Dec 7, 1990 327.75 Mar 8, 1991 374.95 Jun 6, 1991 383.63
Dec 10, 1990 328.89 Mar 11, 1991 372.96 Jun 7, 1991 379.43
Dec 11, 1990 326.44 Mar 12, 1991 370.03 Jun 10, 1991 378.57
Dec 12, 1990 330.19 Mar 13, 1991 374.57 Jun 11, 1991 381.05
Dec 13, 1990 329.34 Mar 14, 1991 373.50 Jun 12, 1991 376.65
Dec 14, 1990 326.82 Mar 15, 1991 373.59 Jun 13, 1991 377.63
Dec 17, 1990 326.02 Mar 18, 1991 372.11 Jun 14, 1991 382.29
Appendix B
page 2
<PAGE>
Standard Poor's 500 Stock Index
Date S&P500 Date S&P500 Date S&P500
- - - ------------ ------ ------------ ------ ------------ ------
Jun 17, 1991 380.13 Sep 12, 1991 387.34 Dec 9, 1991 378.26
Jun 18, 1991 378.59 Sep 13, 1991 383.59 Dec 10, 1991 377.90
Jun 19, 1991 375.09 Sep 16, 1991 385.78 Dec 11, 1991 377.70
Jun 20, 1991 375.42 Sep 17, 1991 385.50 Dec 12, 1991 381.55
Jun 21, 1991 377.75 Sep 18, 1991 386.94 Dec 13, 1991 384.47
Jun 24, 1991 370.94 Sep 19, 1991 387.56 Dec 16, 1991 384.46
Jun 25, 1991 370.65 Sep 20, 1991 387.92 Dec 17, 1991 382.74
Jun 26, 1991 371.59 Sep 23, 1991 385.92 Dec 18, 1991 383.48
Jun 27, 1991 374.40 Sep 24, 1991 387.71 Dec 19, 1991 382.52
Jun 28, 1991 371.16 Sep 25, 1991 386.88 Dec 20, 1991 387.04
Jul 1, 1991 377.92 Sep 26, 1991 386.59 Dec 23, 1991 396.82
Jul 2, 1991 377.47 Sep 27, 1991 385.90 Dec 24, 1991 399.33
Jul 3, 1991 373.33 Sep 30, 1991 387.86 Dec 26, 1991 404.84
Jul 5, 1991 374.08 Oct 1, 1991 389.20 Dec 27, 1991 406.46
Jul 8, 1991 377.94 Oct 2, 1991 388.26 Dec 30, 1991 415.14
Jul 9, 1991 376.11 Oct 3, 1991 384.47 Dec 31, 1991 417.09
Jul 10, 1991 375.74 Oct 4, 1991 381.24 Jan 2, 1992 417.26
Jul 11, 1991 376.97 Oct 7, 1991 379.50 Jan 3, 1992 419.34
Jul 12, 1991 380.25 Oct 8, 1991 380.67 Jan 6, 1992 417.96
Jul 15, 1991 382.39 Oct 9, 1991 376.80 Jan 7, 1992 417.40
Jul 16, 1991 381.54 Oct 10, 1991 380.55 Jan 8, 1992 418.10
Jul 17, 1991 381.18 Oct 11, 1991 381.45 Jan 9, 1992 417.61
Jul 18, 1991 385.37 Oct 14, 1991 386.47 Jan 10, 1992 415.10
Jul 19, 1991 384.22 Oct 15, 1991 391.01 Jan 13, 1992 414.34
Jul 22, 1991 382.88 Oct 16, 1991 392.80 Jan 14, 1992 420.44
Jul 23, 1991 379.42 Oct 17, 1991 391.92 Jan 15, 1992 420.77
Jul 24, 1991 378.64 Oct 18, 1991 392.50 Jan 16, 1992 418.21
Jul 25, 1991 380.96 Oct 21, 1991 390.02 Jan 17, 1992 418.86
Jul 26, 1991 380.93 Oct 22, 1991 387.83 Jan 20, 1992 416.36
Jul 29, 1991 383.15 Oct 23, 1991 387.94 Jan 21, 1992 412.64
Jul 30, 1991 386.69 Oct 24, 1991 385.07 Jan 22, 1992 418.13
Jul 31, 1991 387.81 Oct 25, 1991 384.20 Jan 23, 1992 414.96
Aug 1, 1991 387.12 Oct 28, 1991 389.52 Jan 24, 1992 415.48
Aug 2, 1991 387.18 Oct 29, 1991 391.48 Jan 27, 1992 414.99
Aug 5, 1991 385.06 Oct 30, 1991 392.96 Jan 28, 1992 414.96
Aug 6, 1991 390.62 Oct 31, 1991 392.46 Jan 29, 1992 410.34
Aug 7, 1991 390.56 Nov 1, 1991 391.32 Jan 30, 1992 411.63
Aug 8, 1991 389.32 Nov 4, 1991 390.28 Jan 31, 1992 408.79
Aug 9, 1991 387.12 Nov 5, 1991 388.71 Feb 3, 1992 409.53
Aug 12, 1991 388.02 Nov 6, 1991 389.97 Feb 4, 1992 413.85
Aug 13, 1991 389.62 Nov 7, 1991 393.72 Feb 5, 1992 413.84
Aug 14, 1991 389.90 Nov 8, 1991 392.89 Feb 6, 1992 413.82
Aug 15, 1991 389.33 Nov 11, 1991 393.12 Feb 7, 1992 411.09
Aug 16, 1991 385.58 Nov 12, 1991 396.74 Feb 10, 1992 413.77
Aug 19, 1991 376.47 Nov 13, 1991 397.41 Feb 11, 1992 413.76
Aug 20, 1991 379.43 Nov 14, 1991 397.15 Feb 12, 1992 417.13
Aug 21, 1991 390.59 Nov 15, 1991 382.62 Feb 13, 1992 413.69
Aug 22, 1991 391.33 Nov 18, 1991 385.24 Feb 14, 1992 412.48
Aug 23, 1991 395.17 Nov 19, 1991 379.42 Feb 18, 1992 407.38
Aug 26, 1991 393.85 Nov 20, 1991 378.53 Feb 19, 1992 408.26
Aug 27, 1991 393.06 Nov 21, 1991 380.06 Feb 20, 1992 413.90
Aug 28, 1991 396.64 Nov 22, 1991 376.14 Feb 21, 1992 411.46
Aug 29, 1991 396.47 Nov 25, 1991 375.34 Feb 24, 1992 412.27
Aug 30, 1991 395.43 Nov 26, 1991 377.96 Feb 25, 1992 410.45
Sep 3, 1991 392.15 Nov 27, 1991 376.55 Feb 26, 1992 415.35
Sep 4, 1991 389.97 Nov 29, 1991 375.22 Feb 27, 1992 413.86
Sep 5, 1991 389.14 Dec 2, 1991 381.40 Feb 28, 1992 412.70
Sep 6, 1991 389.10 Dec 3, 1991 380.96 Mar 2, 1992 412.45
Sep 9, 1991 388.77 Dec 4, 1991 380.07 Mar 3, 1992 412.85
Sep 10, 1991 384.56 Dec 5, 1991 377.39 Mar 4, 1992 409.33
Sep 11, 1991 385.09 Dec 6, 1991 379.10 Mar 5, 1992 406.51
Appendix B
page 3
<PAGE>
Standard Poor's 500 Stock Index
Date S&P500 Date S&P500 Date S&P500
- - - ------------ ------ ------------ ------ ------------ ------
Mar 6, 1992 404.44 Jun 3, 1992 414.59 Aug 28, 1992 414.84
Mar 9, 1992 405.21 Jun 4, 1992 413.26 Aug 31, 1992 414.03
Mar 10, 1992 406.89 Jun 5, 1992 413.48 Sep 1, 1992 416.07
Mar 11, 1992 404.03 Jun 8, 1992 413.36 Sep 2, 1992 417.98
Mar 12, 1992 403.89 Jun 9, 1992 410.06 Sep 3, 1992 419.98
Mar 13, 1992 405.84 Jun 10, 1992 407.25 Sep 4, 1992 417.08
Mar 16, 1992 406.39 Jun 11, 1992 409.05 Sep 8, 1992 414.44
Mar 17, 1992 409.58 Jun 12, 1992 409.76 Sep 9, 1992 416.36
Mar 18, 1992 409.15 Jun 15, 1992 410.29 Sep 10, 1992 419.95
Mar 19, 1992 409.80 Jun 16, 1992 408.32 Sep 11, 1992 419.58
Mar 20, 1992 411.30 Jun 17, 1992 402.26 Sep 14, 1992 425.27
Mar 23, 1992 409.91 Jun 18, 1992 400.96 Sep 15, 1992 419.77
Mar 24, 1992 408.88 Jun 19, 1992 403.67 Sep 16, 1992 419.92
Mar 25, 1992 407.52 Jun 22, 1992 403.40 Sep 17, 1992 419.93
Mar 26, 1992 407.86 Jun 23, 1992 404.04 Sep 18, 1992 422.93
Mar 27, 1992 403.50 Jun 24, 1992 403.83 Sep 21, 1992 422.14
Mar 30, 1992 403.00 Jun 25, 1992 403.12 Sep 22, 1992 417.14
Mar 31, 1992 403.69 Jun 26, 1992 403.45 Sep 23, 1992 417.44
Apr 1, 1992 404.23 Jun 29, 1992 408.94 Sep 24, 1992 418.47
Apr 2, 1992 400.50 Jun 30, 1992 408.14 Sep 25, 1992 414.35
Apr 3, 1992 401.55 Jul 1, 1992 412.88 Sep 28, 1992 416.62
Apr 6, 1992 405.59 Jul 2, 1992 411.77 Sep 29, 1992 416.80
Apr 7, 1992 398.06 Jul 6, 1992 413.84 Sep 30, 1992 417.80
Apr 8, 1992 394.50 Jul 7, 1992 409.16 Oct 1, 1992 416.29
Apr 9, 1992 400.64 Jul 8, 1992 410.28 Oct 2, 1992 410.47
Apr 10, 1992 404.29 Jul 9, 1992 414.23 Oct 5, 1992 407.57
Apr 13, 1992 406.08 Jul 10, 1992 414.62 Oct 6, 1992 407.18
Apr 14, 1992 412.39 Jul 13, 1992 414.87 Oct 7, 1992 404.25
Apr 15, 1992 416.28 Jul 14, 1992 417.68 Oct 8, 1992 407.75
Apr 16, 1992 416.05 Jul 15, 1992 417.10 Oct 9, 1992 402.66
Apr 20, 1992 410.16 Jul 16, 1992 417.54 Oct 12, 1992 407.44
Apr 21, 1992 410.26 Jul 17, 1992 415.62 Oct 13, 1992 409.30
Apr 22, 1992 409.81 Jul 20, 1992 413.75 Oct 14, 1992 409.37
Apr 23, 1992 411.60 Jul 21, 1992 413.76 Oct 15, 1992 409.60
Apr 24, 1992 409.02 Jul 22, 1992 410.93 Oct 16, 1992 411.73
Apr 27, 1992 408.45 Jul 23, 1992 412.08 Oct 19, 1992 414.98
Apr 28, 1992 409.11 Jul 24, 1992 411.60 Oct 20, 1992 415.48
Apr 29, 1992 412.02 Jul 27, 1992 411.54 Oct 21, 1992 415.67
Apr 30, 1992 414.95 Jul 28, 1992 417.52 Oct 22, 1992 414.90
May 1, 1992 412.53 Jul 29, 1992 422.23 Oct 23, 1992 414.10
May 4, 1992 416.91 Jul 30, 1992 423.92 Oct 26, 1992 418.16
May 5, 1992 416.84 Jul 31, 1992 424.21 Oct 27, 1992 418.49
May 6, 1992 416.79 Aug 3, 1992 425.09 Oct 28, 1992 420.13
May 7, 1992 415.85 Aug 4, 1992 424.36 Oct 29, 1992 420.86
May 8, 1992 416.05 Aug 5, 1992 422.19 Oct 30, 1992 418.68
May 11, 1992 418.49 Aug 6, 1992 420.59 Nov 2, 1992 422.75
May 12, 1992 416.29 Aug 7, 1992 418.88 Nov 3, 1992 419.92
May 13, 1992 416.45 Aug 10, 1992 419.42 Nov 4, 1992 417.11
May 14, 1992 413.14 Aug 11, 1992 418.90 Nov 5, 1992 418.34
May 15, 1992 410.09 Aug 12, 1992 417.78 Nov 6, 1992 417.58
May 18, 1992 412.81 Aug 13, 1992 417.73 Nov 9, 1992 418.59
May 19, 1992 416.37 Aug 14, 1992 419.91 Nov 10, 1992 418.62
May 20, 1992 415.39 Aug 17, 1992 420.74 Nov 11, 1992 422.20
May 21, 1992 412.60 Aug 18, 1992 421.34 Nov 12, 1992 422.87
May 22, 1992 414.02 Aug 19, 1992 418.19 Nov 13, 1992 422.43
May 26, 1992 411.41 Aug 20, 1992 418.26 Nov 16, 1992 420.68
May 27, 1992 412.17 Aug 21, 1992 414.85 Nov 17, 1992 419.27
May 28, 1992 416.74 Aug 24, 1992 410.72 Nov 18, 1992 422.85
May 29, 1992 415.35 Aug 25, 1992 411.61 Nov 19, 1992 423.61
Jun 1, 1992 417.30 Aug 26, 1992 413.51 Nov 20, 1992 426.65
Jun 2, 1992 413.50 Aug 27, 1992 413.53 Nov 23, 1992 425.12
Appendix B
page 4
<PAGE>
Standard Poor's 500 Stock Index
Date S&P500 Date S&P500 Date S&P500
- - - ------------ ------ ------------ ------ ------------ ------
Nov 24, 1992 427.59 Feb 23, 1993 434.80 May 20, 1993 450.59
Nov 25, 1992 429.19 Feb 24, 1993 440.87 May 21, 1993 445.84
Nov 27, 1992 430.16 Feb 25, 1993 442.33 May 24, 1993 448.00
Nov 30, 1992 431.35 Feb 26, 1993 443.38 May 25, 1993 448.85
Dec 1, 1992 430.78 Mar 1, 1993 442.01 May 26, 1993 453.44
Dec 2, 1992 429.89 Mar 2, 1993 447.90 May 27, 1993 452.42
Dec 3, 1992 429.91 Mar 3, 1993 449.26 May 28, 1993 450.21
Dec 4, 1992 432.06 Mar 4, 1993 447.34 Jun 1, 1993 453.83
Dec 7, 1992 435.31 Mar 5, 1993 446.11 Jun 2, 1993 453.85
Dec 8, 1992 436.99 Mar 8, 1993 454.71 Jun 3, 1993 452.49
Dec 9, 1992 435.65 Mar 9, 1993 454.40 Jun 4, 1993 450.06
Dec 10, 1992 434.64 Mar 10, 1993 456.34 Jun 7, 1993 447.69
Dec 11, 1992 433.73 Mar 11, 1993 453.72 Jun 8, 1993 444.71
Dec 14, 1992 432.84 Mar 12, 1993 449.83 Jun 9, 1993 445.78
Dec 15, 1992 432.57 Mar 15, 1993 451.43 Jun 10, 1993 445.38
Dec 16, 1992 431.52 Mar 16, 1993 451.37 Jun 11, 1993 447.30
Dec 17, 1992 435.43 Mar 17, 1993 448.31 Jun 14, 1993 447.71
Dec 18, 1992 441.28 Mar 18, 1993 451.89 Jun 15, 1993 446.27
Dec 21, 1992 440.70 Mar 19, 1993 450.18 Jun 16, 1993 447.43
Dec 22, 1992 440.31 Mar 22, 1993 448.88 Jun 17, 1993 448.54
Dec 23, 1992 439.03 Mar 23, 1993 448.76 Jun 18, 1993 443.68
Dec 24, 1992 439.77 Mar 24, 1993 448.07 Jun 21, 1993 446.22
Dec 28, 1992 439.15 Mar 25, 1993 450.88 Jun 22, 1993 445.93
Dec 29, 1992 437.98 Mar 26, 1993 447.78 Jun 23, 1993 443.19
Dec 30, 1992 438.82 Mar 29, 1993 450.77 Jun 24, 1993 446.62
Dec 31, 1992 435.71 Mar 30, 1993 451.97 Jun 25, 1993 447.60
Jan 4, 1993 435.38 Mar 31, 1993 451.67 Jun 28, 1993 451.85
Jan 5, 1993 434.34 Apr 1, 1993 450.30 Jun 29, 1993 450.69
Jan 6, 1993 434.52 Apr 2, 1993 441.39 Jun 30, 1993 450.53
Jan 7, 1993 430.73 Apr 5, 1993 442.29 Jul 1, 1993 449.02
Jan 8, 1993 429.04 Apr 6, 1993 441.16 Jul 2, 1993 445.84
Jan 11, 1993 430.95 Apr 7, 1993 442.73 Jul 6, 1993 441.43
Jan 12, 1993 431.04 Apr 8, 1993 441.84 Jul 7, 1993 442.83
Jan 13, 1993 433.03 Apr 12, 1993 448.37 Jul 8, 1993 448.64
Jan 14, 1993 435.94 Apr 13, 1993 449.22 Jul 9, 1993 448.11
Jan 15, 1993 437.15 Apr 14, 1993 448.66 Jul 12, 1993 448.98
Jan 18, 1993 436.84 Apr 15, 1993 448.40 Jul 13, 1993 448.09
Jan 19, 1993 435.13 Apr 16, 1993 448.94 Jul 14, 1993 450.08
Jan 20, 1993 433.37 Apr 19, 1993 447.46 Jul 15, 1993 449.22
Jan 21, 1993 435.49 Apr 20, 1993 445.10 Jul 16, 1993 445.75
Jan 22, 1993 436.11 Apr 21, 1993 443.63 Jul 19, 1993 446.03
Jan 25, 1993 440.01 Apr 22, 1993 439.46 Jul 20, 1993 447.31
Jan 26, 1993 439.95 Apr 23, 1993 437.03 Jul 21, 1993 447.18
Jan 27, 1993 438.11 Apr 26, 1993 433.54 Jul 22, 1993 444.51
Jan 28, 1993 438.66 Apr 27, 1993 438.01 Jul 23, 1993 447.10
Jan 29, 1993 438.78 Apr 28, 1993 438.02 Jul 26, 1993 449.09
Feb 1, 1993 442.52 Apr 29, 1993 438.89 Jul 27, 1993 448.24
Feb 2, 1993 442.55 Apr 30, 1993 440.19 Jul 28, 1993 447.19
Feb 3, 1993 447.20 May 3, 1993 442.46 Jul 29, 1993 450.24
Feb 4, 1993 449.56 May 4, 1993 444.05 Jul 30, 1993 448.13
Feb 5, 1993 448.93 May 5, 1993 444.52 Aug 2, 1993 450.15
Feb 8, 1993 447.85 May 6, 1993 443.26 Aug 3, 1993 449.27
Feb 9, 1993 445.33 May 7, 1993 442.31 Aug 4, 1993 448.54
Feb 10, 1993 446.23 May 10, 1993 442.80 Aug 5, 1993 448.13
Feb 11, 1993 447.66 May 11, 1993 444.36 Aug 6, 1993 448.68
Feb 12, 1993 444.58 May 12, 1993 444.80 Aug 9, 1993 450.74
Feb 16, 1993 433.91 May 13, 1993 439.23 Aug 10, 1993 449.45
Feb 17, 1993 433.30 May 14, 1993 439.56 Aug 11, 1993 450.46
Feb 18, 1993 431.90 May 17, 1993 440.37 Aug 12, 1993 448.96
Feb 19, 1993 434.22 May 18, 1993 440.32 Aug 13, 1993 450.14
Feb 22, 1993 435.24 May 19, 1993 447.54 Aug 16, 1993 452.38
Appendix B
page 5
<PAGE>
Standard Poor's 500 Stock Index
Date S&P500 Date S&P500 Date S&P500
- - - ------------ ------ ------------ ------ ------------ ------
Aug 17, 1993 453.13 Nov 11, 1993 462.64 Feb 8, 1994 471.06
Aug 18, 1993 456.04 Nov 12, 1993 465.39 Feb 9, 1994 472.77
Aug 19, 1993 456.43 Nov 15, 1993 463.75 Feb 10, 1994 468.93
Aug 20, 1993 456.16 Nov 16, 1993 466.74 Feb 11, 1994 470.18
Aug 23, 1993 455.23 Nov 17, 1993 464.81 Feb 14, 1994 470.23
Aug 24, 1993 459.77 Nov 18, 1993 463.62 Feb 15, 1994 472.52
Aug 25, 1993 460.13 Nov 19, 1993 462.60 Feb 16, 1994 472.79
Aug 26, 1993 461.04 Nov 22, 1993 459.13 Feb 17, 1994 470.34
Aug 27, 1993 460.54 Nov 23, 1993 461.03 Feb 18, 1994 467.69
Aug 30, 1993 461.90 Nov 24, 1993 462.36 Feb 22, 1994 471.46
Aug 31, 1993 463.56 Nov 26, 1993 463.06 Feb 23, 1994 470.69
Sep 1, 1993 463.15 Nov 29, 1993 461.90 Feb 24, 1994 464.26
Sep 2, 1993 461.30 Nov 30, 1993 461.79 Feb 25, 1994 466.07
Sep 3, 1993 461.34 Dec 1, 1993 461.89 Feb 28, 1994 467.14
Sep 7, 1993 458.52 Dec 2, 1993 463.11 Mar 1, 1994 464.44
Sep 8, 1993 456.65 Dec 3, 1993 464.89 Mar 2, 1994 464.81
Sep 9, 1993 457.50 Dec 6, 1993 466.43 Mar 3, 1994 463.01
Sep 10, 1993 461.72 Dec 7, 1993 466.76 Mar 4, 1994 464.74
Sep 13, 1993 462.06 Dec 8, 1993 466.29 Mar 7, 1994 466.91
Sep 14, 1993 459.90 Dec 9, 1993 464.18 Mar 8, 1994 465.88
Sep 15, 1993 461.60 Dec 10, 1993 463.93 Mar 9, 1994 467.06
Sep 16, 1993 459.43 Dec 13, 1993 465.70 Mar 10, 1994 463.90
Sep 17, 1993 458.83 Dec 14, 1993 463.06 Mar 11, 1994 466.44
Sep 20, 1993 455.05 Dec 15, 1993 461.84 Mar 14, 1994 467.39
Sep 21, 1993 452.95 Dec 16, 1993 463.34 Mar 15, 1994 467.01
Sep 22, 1993 456.20 Dec 17, 1993 466.38 Mar 16, 1994 469.42
Sep 23, 1993 457.74 Dec 20, 1993 465.85 Mar 17, 1994 470.90
Sep 24, 1993 457.63 Dec 21, 1993 465.30 Mar 18, 1994 471.06
Sep 27, 1993 461.80 Dec 22, 1993 467.32 Mar 21, 1994 468.54
Sep 28, 1993 461.53 Dec 23, 1993 467.38 Mar 22, 1994 468.80
Sep 29, 1993 460.11 Dec 27, 1993 470.54 Mar 23, 1994 468.54
Sep 30, 1993 458.93 Dec 28, 1993 470.94 Mar 24, 1994 464.35
Oct 1, 1993 461.28 Dec 29, 1993 470.58 Mar 25, 1994 460.58
Oct 4, 1993 461.34 Dec 30, 1993 468.64 Mar 28, 1994 460.00
Oct 5, 1993 461.20 Dec 31, 1993 466.45 Mar 29, 1994 452.48
Oct 6, 1993 460.74 Jan 3, 1994 465.44 Mar 30, 1994 445.55
Oct 7, 1993 459.18 Jan 4, 1994 466.89 Mar 31, 1994 445.77
Oct 8, 1993 460.31 Jan 5, 1994 467.55 Apr 1, 1994 445.77
Oct 11, 1993 460.88 Jan 6, 1994 467.12 Apr 4, 1994 438.92
Oct 12, 1993 461.12 Jan 7, 1994 469.9 Apr 5, 1994 448.29
Oct 13, 1993 461.49 Jan 10, 1994 475.27 Apr 6, 1994 448.05
Oct 14, 1993 466.83 Jan 11, 1994 474.13 Apr 7, 1994 450.88
Oct 15, 1993 469.50 Jan 12, 1994 474.17 Apr 8, 1994 447.10
Oct 18, 1993 468.45 Jan 13, 1994 472.47 Apr 11, 1994 449.87
Oct 19, 1993 466.21 Jan 14, 1994 474.91 Apr 12, 1994 447.57
Oct 20, 1993 466.07 Jan 17, 1994 473.3 Apr 13, 1994 446.26
Oct 21, 1993 465.36 Jan 18, 1994 474.25 Apr 14, 1994 446.38
Oct 22, 1993 463.27 Jan 19, 1994 474.3 Apr 15, 1994 446.18
Oct 25, 1993 464.20 Jan 20, 1994 474.98 Apr 18, 1994 442.46
Oct 26, 1993 464.30 Jan 21, 1994 474.73 Apr 19, 1994 442.54
Oct 27, 1993 464.61 Jan 24, 1994 471.97 Apr 20, 1994 441.96
Oct 28, 1993 467.73 Jan 25, 1994 470.92 Apr 21, 1994 448.73
Oct 29, 1993 467.83 Jan 26, 1994 473.2 Apr 22, 1994 447.63
Nov 1, 1993 469.10 Jan 27, 1994 477.05 Apr 25, 1994 452.71
Nov 2, 1993 468.44 Jan 28, 1994 478.7 Apr 26, 1994 451.87
Nov 3, 1993 463.02 Jan 31, 1994 481.61 Apr 28, 1994 449.10
Nov 4, 1993 457.49 Feb 1, 1994 479.62 Apr 29, 1994 450.91
Nov 5, 1993 459.57 Feb 2, 1994 482.00 May 2, 1994 453.02
Nov 8, 1993 460.21 Feb 3, 1994 480.71 May 3, 1994 453.03
Nov 9, 1993 460.33 Feb 4, 1994 469.81 May 4, 1994 451.72
Nov 10, 1993 463.72 Feb 7, 1994 471.76 May 5, 1994 451.38
Appendix B
page 6
<PAGE>
Standard Poor's 500 Stock Index
Date S&P500 Date S&P500 Date S&P500
- - - ------------ ------ ------------ ------ ------------ ------
May 6, 1994 447.82 Aug 2, 1994 460.56 Oct 27, 1994 465.85
May 9, 1994 442.32 Aug 3, 1994 461.46 Oct 28, 1994 473.77
May 10, 1994 446.01 Aug 4, 1994 458.40 Oct 31, 1994 472.35
May 11, 1994 441.49 Aug 5, 1994 457.09 Nov 1, 1994 468.42
May 12, 1994 443.75 Aug 8, 1994 457.89 Nov 2, 1994 466.51
May 13, 1994 444.14 Aug 9, 1994 457.92 Nov 3, 1994 467.91
May 16, 1994 444.49 Aug 10, 1994 460.30 Nov 4, 1994 462.28
May 17, 1994 449.37 Aug 11, 1994 458.88 Nov 7, 1994 463.06
May 18, 1994 453.69 Aug 12, 1994 461.95 Nov 8, 1994 465.65
May 19, 1994 456.48 Aug 15, 1994 461.23 Nov 9, 1994 465.42
May 20, 1994 454.92 Aug 16, 1994 465.01 Nov 10, 1994 464.35
May 23, 1994 453.20 Aug 17, 1994 465.17 Nov 11, 1994 462.35
May 24, 1994 454.81 Aug 18, 1994 463.17 Nov 14, 1994 466.04
May 25, 1994 456.34 Aug 19, 1994 463.68 Nov 15, 1994 465.03
May 26, 1994 457.06 Aug 22, 1994 462.31 Nov 16, 1994 465.62
May 27, 1994 457.33 Aug 23, 1994 464.51 Nov 17, 1994 463.57
May 31, 1994 456.50 Aug 24, 1994 469.03 Nov 18, 1994 461.47
Jun 1, 1994 457.63 Aug 25, 1994 468.08 Nov 21, 1994 458.29
Jun 2, 1994 457.65 Aug 26, 1994 473.80 Nov 22, 1994 450.08
Jun 3, 1994 460.13 Aug 29, 1994 474.59 Nov 23, 1994 449.93
Jun 6, 1994 458.88 Aug 30, 1994 476.09 Nov 25, 1994 452.29
Jun 7, 1994 458.21 Aug 31, 1994 475.50 Nov 28, 1994 454.16
Jun 8, 1994 457.06 Sep 1, 1994 473.17 Nov 29, 1994 455.17
Jun 9, 1994 457.86 Sep 2, 1994 470.99 Nov 30, 1994 453.69
Jun 10, 1994 458.67 Sep 6, 1994 471.86 Dec 1, 1994 448.92
Jun 13, 1994 459.10 Sep 7, 1994 470.99 Dec 2, 1994 453.30
Jun 14, 1994 462.37 Sep 8, 1994 473.14 Dec 5, 1994 453.33
Jun 15, 1994 460.61 Sep 9, 1994 468.18 Dec 6, 1994 453.11
Jun 16, 1994 461.93 Sep 12, 1994 466.21 Dec 7, 1994 451.23
Jun 17, 1994 458.45 Sep 13, 1994 467.52 Dec 8, 1994 445.45
Jun 20, 1994 455.48 Sep 14, 1994 468.80 Dec 9, 1994 446.97
Jun 21, 1994 451.34 Sep 15, 1994 474.81 Dec 12, 1994 449.47
Jun 22, 1994 453.09 Sep 16, 1994 471.19 Dec 13, 1994 450.15
Jun 23, 1994 449.63 Sep 19, 1994 470.85 Dec 14, 1994 454.97
Jun 24, 1994 442.80 Sep 20, 1994 463.36 Dec 15, 1994 455.35
Jun 27, 1994 447.31 Sep 21, 1994 461.46 Dec 16, 1994 458.80
Jun 28, 1994 446.07 Sep 22, 1994 461.27 Dec 19, 1994 457.91
Jun 29, 1994 447.63 Sep 23, 1994 459.67 Dec 20, 1994 457.10
Jun 30, 1994 444.27 Sep 26, 1994 460.82 Dec 21, 1994 459.61
Jul 1, 1994 446.20 Sep 27, 1994 462.05 Dec 22, 1994 459.68
Jul 4, 1994 446.20 Sep 28, 1994 464.81 Dec 23, 1994 459.83
Jul 5, 1994 446.37 Sep 29, 1994 462.23 Dec 27, 1994 462.47
Jul 6, 1994 446.13 Sep 30, 1994 462.71 Dec 28, 1994 460.86
Jul 7, 1994 448.38 Oct 3, 1994 461.74 Dec 29, 1994 461.17
Jul 8, 1994 449.55 Oct 4, 1994 454.59 Dec 30, 1994 459.27
Jul 11, 1994 448.06 Oct 5, 1994 453.52 Jan 3, 1995 459.11
Jul 12, 1994 447.95 Oct 6, 1994 452.36 Jan 4, 1995 460.71
Jul 13, 1994 448.73 Oct 7, 1994 455.10 Jan 5, 1995 460.34
Jul 14, 1994 453.41 Oct 10, 1994 459.04 Jan 6, 1995 460.68
Jul 15, 1994 454.16 Oct 11, 1994 465.79 Jan 9, 1995 460.83
Jul 18, 1994 455.22 Oct 12, 1994 465.47 Jan 10, 1995 461.68
Jul 19, 1994 453.86 Oct 13, 1994 467.79 Jan 11, 1995 461.67
Jul 20, 1994 451.60 Oct 14, 1994 469.10 Jan 12, 1995 461.64
Jul 21, 1994 452.61 Oct 17, 1994 468.96 Jan 13, 1995 465.97
Jul 22, 1994 453.11 Oct 18, 1994 467.66 Jan 16, 1995 469.38
Jul 25, 1994 454.25 Oct 19, 1994 470.28 Jan 17, 1995 470.05
Jul 26, 1994 453.36 Oct 20, 1994 466.85 Jan 18, 1995 469.71
Jul 27, 1994 452.57 Oct 21, 1994 464.89 Jan 19, 1995 466.95
Jul 28, 1994 454.24 Oct 24, 1994 460.83 Jan 20, 1995 464.78
Jul 29, 1994 458.25 Oct 25, 1994 461.52 Jan 23, 1995 465.82
Aug 1, 1994 461.01 Oct 26, 1994 462.61 Jan 24, 1995 465.86
Appendix B
page 7
<PAGE>
Standard Poor's 500 Stock Index
Date S&P500 Date S&P500 Date S&P500
- - - ------------ ------ ------------ ------ ------------ ------
Jan 25, 1995 467.44 Apr 24, 1995 512.89 Jul 20, 1995 553.54
Jan 26, 1995 468.32 Apr 25, 1995 512.10 Jul 21, 1995 553.62
Jan 27, 1995 470.39 Apr 26, 1995 512.66 Jul 24, 1995 556.63
Jan 30, 1995 468.51 Apr 27, 1995 513.55 Jul 25, 1995 561.10
Jan 31, 1995 470.42 Apr 28, 1995 514.71 Jul 26, 1995 561.61
Feb 1, 1995 470.40 May 1, 1995 514.26 Jul 27, 1995 565.22
Feb 2, 1995 472.79 May 2, 1995 514.86 Jul 28, 1995 562.93
Feb 3, 1995 478.65 May 3, 1995 520.48 Jul 31, 1995 562.06
Feb 6, 1995 481.14 May 4, 1995 520.54 Aug 1, 1995 559.64
Feb 7, 1995 480.81 May 5, 1995 520.12 Aug 2, 1995 558.80
Feb 8, 1995 481.19 May 8, 1995 523.96 Aug 3, 1995 558.75
Feb 9, 1995 480.19 May 9, 1995 523.56 Aug 4, 1995 558.94
Feb 10, 1995 481.46 May 10, 1995 524.36 Aug 7, 1995 560.03
Feb 13, 1995 481.65 May 11, 1995 524.37 Aug 8, 1995 560.39
Feb 14, 1995 482.55 May 12, 1995 525.55 Aug 9, 1995 559.71
Feb 15, 1995 484.54 May 15, 1995 527.74 Aug 10, 1995 557.45
Feb 16, 1995 485.22 May 16, 1995 528.19 Aug 11, 1995 555.11
Feb 17, 1995 481.97 May 17, 1995 527.07 Aug 14, 1995 559.74
Feb 21, 1995 482.72 May 18, 1995 519.58 Aug 15, 1995 558.57
Feb 22, 1995 485.07 May 19, 1995 519.19 Aug 16, 1995 559.97
Feb 23, 1995 486.91 May 22, 1995 523.65 Aug 17, 1995 559.04
Feb 24, 1995 488.26 May 23, 1995 528.59 Aug 18, 1995 559.21
Feb 27, 1995 483.96 May 24, 1995 528.61 Aug 21, 1995 558.11
Feb 28, 1995 487.39 May 25, 1995 528.59 Aug 22, 1995 559.52
Mar 1, 1995 485.65 May 26, 1995 523.65 Aug 23, 1995 557.14
Mar 2, 1995 485.13 May 30, 1995 523.58 Aug 24, 1995 557.46
Mar 3, 1995 485.42 May 31, 1995 533.40 Aug 25, 1995 560.10
Mar 6, 1995 485.63 Jun 1, 1995 533.49 Aug 28, 1995 559.05
Mar 7, 1995 482.12 Jun 2, 1995 532.51 Aug 29, 1995 560.00
Mar 8, 1995 483.14 Jun 5, 1995 535.60 Aug 30, 1995 560.92
Mar 9, 1995 483.16 Jun 6, 1995 535.55 Aug 31, 1995 561.88
Mar 10, 1995 489.57 Jun 7, 1995 533.13 Sep 1, 1995 563.84
Mar 13, 1995 490.05 Jun 8, 1995 532.35 Sep 5, 1995 569.17
Mar 14, 1995 492.89 Jun 9, 1995 527.94 Sep 6, 1995 570.17
Mar 15, 1995 491.88 Jun 12, 1995 530.88 Sep 7, 1995 570.29
Mar 16, 1995 495.41 Jun 13, 1995 536.05 Sep 8, 1995 572.68
Mar 17, 1995 495.52 Jun 14, 1995 536.47 Sep 11, 1995 573.91
Mar 20, 1995 496.14 Jun 15, 1995 537.12 Sep 12, 1995 576.51
Mar 21, 1995 495.07 Jun 16, 1995 539.83 Sep 13, 1995 578.77
Mar 22, 1995 495.67 Jun 19, 1995 545.22 Sep 14, 1995 583.61
Mar 23, 1995 495.95 Jun 20, 1995 544.98 Sep 15, 1995 583.35
Mar 24, 1995 500.97 Jun 21, 1995 543.98 Sep 18, 1995 582.77
Mar 27, 1995 503.20 Jun 22, 1995 551.07 Sep 19, 1995 584.20
Mar 28, 1995 503.90 Jun 23, 1995 549.71 Sep 20, 1995 586.77
Mar 29, 1995 503.12 Jun 26, 1995 544.13 Sep 21, 1995 583.00
Mar 30, 1995 502.22 Jun 27, 1995 542.43 Sep 22, 1995 581.73
Mar 31, 1995 500.71 Jun 28, 1995 544.73 Sep 25, 1995 581.81
Apr 3, 1995 501.85 Jun 29, 1995 543.87 Sep 26, 1995 581.41
Apr 4, 1995 505.24 Jun 30, 1995 544.75 Sep 27, 1995 581.04
Apr 5, 1995 505.57 Jul 3, 1995 547.09 Sep 28, 1995 585.87
Apr 6, 1995 506.08 Jul 5, 1995 547.26 Sep 29, 1995 584.41
Apr 7, 1995 506.42 Jul 6, 1995 553.99 Oct 2, 1995 581.72
Apr 10, 1995 507.01 Jul 7, 1995 556.37 Oct 3, 1995 582.34
Apr 11, 1995 505.53 Jul 10, 1995 557.19 Oct 4, 1995 581.47
Apr 12, 1995 507.17 Jul 11, 1995 554.78 Oct 5, 1995 582.63
Apr 13, 1995 509.23 Jul 12, 1995 560.89 Oct 6, 1995 582.49
Apr 17, 1995 506.13 Jul 13, 1995 561.00 Oct 9, 1995 578.37
Apr 18, 1995 505.37 Jul 14, 1995 559.89 Oct 10, 1995 577.52
Apr 19, 1995 504.92 Jul 17, 1995 562.72 Oct 11, 1995 579.46
Apr 20, 1995 505.29 Jul 18, 1995 558.46 Oct 12, 1995 583.10
Apr 21, 1995 508.49 Jul 19, 1995 550.98 Oct 13, 1995 584.50
Appendix B
page 8
<PAGE>
Standard Poor's 500 Stock Index
Date S&P500 Date S&P500
- - - ------------ ------ ------------ ------
Oct 16, 1995 583.03 Jan 12, 1996 601.81
Oct 17, 1995 586.78 Jan 15, 1996 599.82
Oct 18, 1995 587.44 Jan 16, 1996 608.44
Oct 19, 1995 590.65 Jan 17, 1996 606.37
Oct 20, 1995 587.46 Jan 18, 1996 608.24
Oct 23, 1995 585.06 Jan 19, 1996 611.83
Oct 24, 1995 586.56 Jan 22, 1996 613.40
Oct 25, 1995 582.47 Jan 23, 1996 612.79
Oct 26, 1995 576.72 Jan 24, 1996 619.96
Oct 27, 1995 579.70 Jan 25, 1996 617.03
Oct 30, 1995 583.25 Jan 26, 1996 621.62
Oct 31, 1995 581.50 Jan 29, 1996 624.22
Nov 1, 1995 584.22 Jan 30, 1996 630.15
Nov 2, 1995 589.72 Jan 31, 1996 636.02
Nov 3, 1995 590.57
Nov 6, 1995 588.46
Nov 7, 1995 586.32
Nov 8, 1995 591.71
Nov 9, 1995 593.26
Nov 10, 1995 592.72
Nov 13, 1995 592.30
Nov 14, 1995 589.29
Nov 15, 1995 593.96
Nov 16, 1995 597.34
Nov 17, 1995 600.07
Nov 20, 1995 596.85
Nov 21, 1995 600.24
Nov 22, 1995 598.40
Nov 24, 1995 599.97
Nov 27, 1995 601.32
Nov 28, 1995 606.45
Nov 29, 1995 607.64
Nov 30, 1995 605.37
Dec 1, 1995 606.98
Dec 4, 1995 613.68
Dec 5, 1995 617.68
Dec 6, 1995 620.18
Dec 7, 1995 616.17
Dec 8, 1995 617.48
Dec 11, 1995 619.52
Dec 12, 1995 618.78
Dec 13, 1995 621.69
Dec 14, 1995 616.92
Dec 15, 1995 616.34
Dec 18, 1995 606.81
Dec 19, 1995 611.93
Dec 20, 1995 605.94
Dec 21, 1995 610.49
Dec 22, 1995 611.95
Dec 26, 1995 614.30
Dec 27, 1995 614.53
Dec 28, 1995 614.12
Dec 29, 1995 615.93
Jan 2, 1996 620.73
Jan 3, 1996 621.32
Jan 4, 1996 617.70
Jan 5, 1996 616.72
Jan 8, 1996 618.46
Jan 9, 1996 609.45
Jan 10, 1996 598.48
Jan 11, 1996 602.69
Appendix B
page 9
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements.
Included in Part A of the Registration Statement:
For the Permanent Portfolio:
Financial Highlights for each share outstanding for the
years ended January 31, 1987 through 1996.
For the Treasury Bill Portfolio:
Financial Highlights for each share outstanding for the
period ended January 31, 1988 and for the years ended
January 31, 1989 through 1996.
For the Versatile Bond Portfolio:
Financial Highlights for each share outstanding for the
period ended January 31, 1992 and for the years ended
January 31, 1993 through 1996.
For the Aggressive Growth Portfolio:
Financial Highlights for each share outstanding for the
period ended January 31, 1991 and for the years ended
January 31, 1992 through 1996.
Included in Part B of the Registration Statement:
For the Permanent Portfolio:
Schedule of Investments at January 31, 1996.
Statement of Assets and Liabilities at January 31, 1996.
Statement of Operations for the Year Ended
January 31, 1996.
Statements of Changes in Net Assets for the Years Ended
January 31, 1995 and 1996.
For the Treasury Bill Portfolio:
Schedule of Investments at January 31, 1996.
Statement of Assets and Liabilities at January 31, 1996.
Statement of Operations for the Year Ended
January 31, 1996.
Statements of Changes in Net Assets for the Years Ended
January 31, 1995 and 1996.
For the Versatile Bond Portfolio:
Schedule of Investments at January 31, 1996.
Statement of Assets and Liabilities at January 31, 1996.
Statement of Operations for the Year Ended
January 31, 1996.
Statements of Changes in Net Assets for the Years Ended
January 31, 1995 and 1996.
<PAGE>
For the Aggressive Growth Portfolio:
Schedule of Investments at January 31, 1996.
Statement of Assets and Liabilities at January 31, 1996.
Statement of Operations for the Year Ended
January 31, 1996.
Statements of Changes in Net Assets for the Years Ended
January 31, 1995 and 1996.
For all Portfolios:
Notes to Financial Statements.
Independent Auditors' Report of KPMG Peat Marwick LLP.
Schedules Omitted:
Required schedules are included in Registrant's Reports.
(b) Exhibits.
(1.1) Copy of Articles of Incorporation of Registrant. (a)
(1.2) Copy of Amendment to Articles of Incorporation of
Registrant. (f)
(2.1) Copy of Bylaws (a) and amendments to Bylaws (d) of
Registrant.
(2.2) Copy of Amendment to Bylaws of Registrant. (j)
(2.3) Copy of Amended and Restated Bylaws of Registrant. (n)
(3) None.
(4) Specimen copy of Common Stock of Registrant. (a)
(5) Copy of Investment Advisory Contract by and between
Registrant and World Money Managers dated
September 10, 1993. (o)
(6.1) Copy of Selling Agreement between World Money Managers
and World Money Securities, Inc., as to Treasury Bill
Portfolio and Aggressive Growth Portfolio, dated
February 1, 1990. (j)
(6.2) Copy of Amendment to Selling Agreement between World
Money Managers and World Money Securities, Inc., as to
Treasury Bill Portfolio and Aggressive Growth Portfolio,
dated March 18, 1991. (k)
(6.3) Copy of Amendment No. 2 to Selling Agreement between
World Money Managers and World Money Securities,
Inc., as to Treasury Bill Portfolio, Versatile Bond
Portfolio and Aggressive Growth Portfolio, dated
January 10, 1992. (m)
(7) None.
(8.1) Copy of Custodian Agreement between Registrant and State
Street Bank and Trust Company. (c)
(8.2) Copy of Sub-Custodian Agreement between State Street
Bank and Trust Company and Bank of Delaware.(e)
<PAGE>
(8.3) Copy of Subcustody Agreement between The Chase
Manhattan Bank, N.A. and State Street Bank and Trust
Company. (e)
(8.4) Copy of Agreement between The Chase Manhattan
Bank, N.A. and Registrant. (f)
(8.5) Copy of Amendment to Custodian Contract between
Registrant and State Street Bank and Trust Company. (h)
(8.6) Copy of Amendment to Custodian Contract between
Registrant and State Street Bank and Trust Company. (p)
(9.1) Copy of Transfer Agent Agreement between Registrant and
AIM Financial Services, Inc. (f)
(9.2) Copy of Administrative Agreement between World
Money Managers and Permanent Portfolio Information, Inc.
(f)
(10) Opinion and Consent of Richard B. Rolnick, Esq., filed
with respect to the Registration Statement under the
Securities Act of 1933. (l)
(11) Consent and Report of Ernst & Young, Independent
Auditors. (o)
(11.1) Consent and Report of Ernst & Young LLP, Independent
Auditors. (p)
(11.2) Consent of KPMG Peat Marwick LLP, Independent Auditors.
(12) None.
(13) None.
(14) Copy of prototype of Individual Retirement Account
Custodial Account Agreement to be entered into by those
of Registrant's shareholders who so desire and
Registrant's Custodian. (g)
(15) None.
(16) Schedules of Calculations of Performance Data.
-----------------
(a) Filed as Exhibits (1), (2) and (4), respectively, to Registrant's
Registration Statement on Form N-1, filed with the Commission on
January 12, 1982, and incorporated herein by this reference.
(c) Filed as Exhibit (8) to Amendment No. 2 to Registrant's Registration
Statement on Form N-1, filed with the Commission on July 8, 1982, and
incorporated herein by this reference.
(d) Filed as Exhibit (2) to Amendment No. 3 to Registrant's Registration
Statement on Form N-1, filed with the Commission on October 12, 1982,
and incorporated herein by this reference.
(e) Filed as Exhibit (8) to Post-Effective Amendment No. 3 to Registrant's
Registration Statement on Form N-1A, filed with the Commission on
April 1, 1985, and incorporated herein by this reference.
<PAGE>
(f) Filed as Exhibits (1), (8) and (9), respectively, to Post-Effective
Amendment No. 4 to Registrant's Registration Statement on Form N-1A,
filed with the Commission on March 7, 1986, and incorporated herein by
this reference.
(g) Filed as an exhibit to Registrant's Annual Report on Form N-1R for the
year ended December 31, 1983 and the month ended January 31, 1984, and
incorporated herein by this reference.
(h) Filed as Exhibit (8) to Post-Effective Amendment No. 5 to Registrant's
Registration Statement on Form N-1A, filed with the Commission on
March 17, 1987, and incorporated herein by this reference.
(i) Filed as Exhibit (10) to Post-Effective Amendment No. 7 to Registrant's
Registration Statement on Form N-1A, filed with the Commission on
March 31, 1988, and incorporated herein by this reference.
(j) Filed as Exhibits (2) and (6), respectively, to Post-Effective
Amendment No. 10 to Registrant's Registration Statement on Form N-1A,
filed with the Commission on May 31, 1990 and incorporated herein by
this reference.
(k) Filed as Exhibit (6) to Post-Effective Amendment No. 11 to Registrant's
Registration Statement on Form N-1A, filed with the Commission on
April 3, 1991, and incorporated herein by this reference.
(l) Filed as Exhibit (10) to Post-Effective Amendment No. 13 to
Registrant's Registration Statement on Form N-1A, filed with the
Commission on July 29, 1991, and incorporated herein by this reference.
(m) Filed as Exhibit (6.3) to Post-Effective Amendment No. 15 to
Registrant's Registration Statement on Form N-1A, filed with the
Commission on May 29, 1992, and incorporated herein by this reference.
(n) Filed as Exhibit (2.3) to Post-Effective Amendment No. 16 to
Registrant's Registration Statement in Form N-1A, filed with the
Commission on June 1, 1993, and incorporated herein by this reference.
(o) Filed as Exhibits (5) and (11), respectively, to Post-Effective
Amendment No. 17 to Registrant's Registration Statement on Form N-1A,
filed with the Commission on April 5, 1994, and incorporated herein by
this reference.
(p) Filed as Exhibits (8.6) and (11.1), respectively, to Post-Effective
Amendment No. 19 to Registrant's Registration Statement on Form N-1A,
filed with the Commission on May 31, 1995, and incorporated herein by
this reference.
Item 25. Persons Controlled by or Under Common Control with Registrant
-------------------------------------------------------------
Permanent Portfolio Family of Funds, Inc., - Registrant
a Maryland corporation
World Money Securities, Inc., - 100% owned subsidiary
a Maryland corporation of Registrant*
-------------------
*Annual audited report of broker-dealer for the year ended December
31, 1995 was filed with the Commission on February 29, 1996 (File
No. 8-38887) and is incorporated herein by this reference.
<PAGE>
Item 26. Number of Holders of Securities
-------------------------------
The number of record holders of the only class of securities of
Registrant issued and outstanding as of May 10, 1996 was as
follows:
Title of Class Number of Record Holders
----------------------------- ------------------------
Common Stock, $.001 par value:
Permanent Portfolio 4,285
Treasury Bill Portfolio 3,499
Versatile Bond Portfolio 758
Aggressive Growth Portfolio 1,096
------
Total 9,638
======
Item 27. Indemnification
---------------
Reference is made to Part One, Paragraph (5) of the Investment
Advisory Contract filed as Exhibit (5) hereto.
Reference is made to Section 2-418 of the Maryland Corporations
and Associations Law, which generally provides for indemnification
of directors, officers, employees and agents by reason of service
in that capacity unless it is established that the act or omission
of the person was material to the matter giving rise to the
proceeding, and was committed in bad faith or was the result of
active or deliberate dishonesty, or the person actually received
an improper personal benefit in money, property or services, or,
in the case of any criminal proceeding, the person had reasonable
cause to believe that the act or omission was unlawful.
Reference is made to Article VIII of the Amended and Restated
Bylaws of the Registrant filed as Exhibit (2.3) hereto.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
controlling persons of the Registrant, pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
----------------------------------------------------
See "Organization and Management" in the Prospectus included as
Part A of this Registration Statement and "Management" in the
Statement of Additional Information included as Part B of this
Registration Statement.
<PAGE>
Item 29. Principal Underwriters
----------------------
(a) None.
(b) The following information is provided with respect to the
officers and directors of World Money Securities, Inc.:
<TABLE>
<CAPTION>
Positions and
Names and Principal Positions and Offices with Offices with
Business Address Underwriter Registrant
---------------------- -------------------------------- ----------------
<S> <C> <C>
Alan Sergy President, Secretary and Director Secretary and
625 Second Street #102 Director
Petaluma, CA 94952
John B. Chandler Vice President and Director None
207 Jefferson Square
Austin, TX 78731
Michael J. Cuggino Treasurer Treasurer
625 Second Street #102
Petaluma, CA 94952
</TABLE>
(c) None.
Item 30. Location of Accounts and Records
--------------------------------
Accounts, books and other documents required by Section 31(a) of
the Investment Company Act of 1940, as amended, and Rules 31a-1
and 31a-2 promulgated thereunder are maintained and held in the
offices of Registrant and its investment adviser, 625 Second
Street, Suite 102, Petaluma, California 94952.
Records covering shareholder accounts are maintained and kept by
Registrant's transfer agent, Chase Global Funds Services Company,
73 Tremont Street, Boston, Massachusetts 02108.
Records covering portfolio transactions are maintained and kept by
Registrant's custodian, State Street Bank and Trust Company, The
Joseph Palmer Building-North Wing, One Heritage Drive, North
Quincy, Massachusetts 02171.
Item 31. Management Services
-------------------
Inapplicable.
Item 32. Undertakings
------------
Inapplicable.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant certifies that it meets all of the
requirements for effectiveness of this Post-Effective Amendment No. 20 to
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Post-Effective Amendment No. 20 to Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Petaluma, and State of California on the 3rd day of
June, 1996.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
By TERRY COXON
-----------------------------------
Terry Coxon, President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 20 to Registration Statement has been signed below
by the following persons in the capacities indicated on June 3, 1996.
*DAVID BERGLAND Director
- - - -----------------------------
David Bergland
TERRY COXON President and Director
- - - ----------------------------- (principal executive officer)
Terry Coxon
MICHAEL J. CUGGINO Treasurer
- - - ----------------------------- (principal financial and accounting officer)
Michael J. Cuggino
*ROBERT B. MARTIN, JR. Director
- - - -----------------------------
Robert B. Martin, Jr.
ALAN SERGY Secretary and Director
- - - -----------------------------
Alan Sergy
*MARK TIER Director
- - - -----------------------------
Mark Tier
*By: TERRY COXON
------------------------------------
Terry Coxon, Attorney-in-fact
Exhibit 11.2
Independent Auditor's Consent
_____________________________
The Board of Directors and Shareholders
Permanent Portfolio Family of Funds, Inc.:
We consent to the use of our report dated March 15, 1996, on the statements
of assets and liabilities, including the schedules of investments, of Permanent
Portfolio Family of Funds, Inc. (comprising, respectively, the Permanent
Portfolio, the Treasury Bill Portfolio, the Versatile Bond Portfolio and the
Aggressive Growth Portfolio) (the "Funds") as of January 31, 1996, and the
related statements of operations for the year then ended, and the statements of
changes in net assets and financial highlights for each of the two years in the
period then ended, in the Permanent Portfolio Family of Funds Inc.
Post-Effective Amendment No. 20 to the Registration Statement Number 33-75661 on
Form N-1A under the Securities Act of 1933 and Amendment No. 20 to the
Registration Statement Number 811-3379 on Form N-1A under the Investment Company
Act of 1940.
We also consent to the references to our Firm under the headings "Financial
Highlights" and "Reports" in the Prospectus and "Financial Statements" in the
Statement of Additional Information. We also consent to the reference to our
Firm as "Experts" in the Statement of Additional Information.
/s/ KPMG Peat Marwick LLP
San Francisco, California
May 28, 1996
Exhibit 16
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
PERMANENT PORTFOLIO
SCHEDULE OF CALCULATIONS OF PERFORMANCE DATA
n
P (1+T) = ERV
P = initial investment in shares
T = average annual total return
n = number of days
ERV = ending redeemable value
Average annual total return for 1 year ended 1/31/96:
n
P (1+T) = ERV
1
1,000 (1+T) = 1,161.14
1+T = 1.16114
T = 16.11%
Average annual total return for 5 years ended 1/31/96:
n
P (1+T) = ERV
5
1,000 (1+T) = 1,408.95
1/5
1+T = 1.40895
1+T = 1.07097
T = 7.10%
Average annual total return for 10 years ended 1/31/96:
n
P (1+T) = ERV
10
1,000 (1+T) = 1,852.03
1/10
1+T = 1.85203
1+T = 1.06357
T = 6.36%
Average annual total return for 13 years, 62-days ended 1/31/96:
n
P (1+T) = ERV
13.1699
1,000 (1+T) = 1,954.00
1/13.1699
1+T = 1.95400
1+T = 1.05218
T = 5.22%
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
TREASURY BILL PORTFOLIO
SCHEDULE OF CALCULATIONS OF PERFORMANCE DATA
Yield for 7 days ended 1/31/96:
Share price at 1/24/96 (net of capital gains): $67.75
Share price at 1/31/96 (net of capital gains): $67.82
( )
( 67.82 - 67.75 ) 365
( ------------- ) * --- = 5.39%
( 67.75 ) 7
Effective yield for 7 days ended 1/31/96:
[( ) ^ 52.14 ]
[( 67.82 - 67.75 ) ]
[( 1 + ------------- ) ] - 1 = 5.53%
[( 67.75 ) ]
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
VERSATILE BOND PORTFOLIO
SCHEDULE OF CALCULATIONS OF PERFORMANCE DATA
n
P (1+T) = ERV
P = initial investment in shares
T = average annual total return
n = number of days
ERV = ending redeemable value
Average annual total return for 1 year ended 1/31/96:
n
P (1+T) = ERV
1
1,000 (1+T) = 1,071.65
1+T = 1.07165
T = 7.17%
Average annual total return for 4-years, 127-days ended 1/31/96:
n
P (1+T) = ERV
4.3479
1,000 (1+T) = 1,218.89
1/4.3479
1+T = 1.21889
1+T = 1.04658
T = 4.66%
Yield for 30 days ended 1/31/96:
[( ) 6 ]
YIELD = [( a-b + 1 ) ]
2 [( ------- ) -1 ]
[( (c)(d) ) ]
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period that were
entitled to receive dividends
d = the maximum offering price per share on the last day of the period
[( ) 6 ]
[( 89,485.59-29,474.04 + 1 ) ]
YIELD = 2 [( -------------------- ) -1 ]
[( (355,335.792)(56.85) ) ]
[( ) 6 ]
[( 60,011.55 + 1 ) ]
YIELD = 2 [( ------------- ) -1 ]
[( 20,200,839.78 ) ]
[( ) 6 ]
[( ) ]
YIELD = 2 [( 1.00297075 ) -1 ]
[( ) ]
[( ]
[( ]
YIELD = 2 [( .01795738 ]
[( ]
YIELD = 3.5915%
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
AGGRESSIVE GROWTH PORTFOLIO
SCHEDULE OF CALCULATIONS OF PERFORMANCE DATA
n
P (1+T) = ERV
P = initial payment
T = average annual total return
n = number of days
ERV = ending redeemable value
Average annual total return for 1 year ended 1/31/96:
n
P (1+T) = ERV
1
1,000 (1+T) = 1,336.90
1+T = 1.33690
T = 33.69%
Average annual total return for 5-years ended 1/31/96:
n
P (1+T) = ERV
5
1,000 (1+T) = 2,396.50
1/5
1+T = 2.39650
1+T = 1.19101
T = 19.10%
Average annual total return for 6-years, 29-days ended 1/31/96:
n
P (1+T) = ERV
6.079
1,000 (1+T) = 2,195.47
1/6.079
1+T = 2.19547
1+T = 1.13810
T = 13.81%
