PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED JULY 31, 1999
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
July 31, 1999
(Unaudited)
ASSETS AND LIABILITIES
ASSETS
Investments at market value (Notes 1, 2, 5 & 6):
Investments other than securities:
Gold assets ..............................................................
Silver assets ............................................................
Swiss franc bonds ...........................................................
Stocks of United States and foreign real estate and natural resource companies
Aggressive growth stock investments .........................................
Corporate bonds .............................................................
United States Treasury securities ...........................................
Repurchase Agreement ........................................................
Total investments (identified cost $60,076,151; $86,092,628; $19,602,773
and $9,823,070, respectively)
Cash ..........................................................................
Accounts receivable for shares of the portfolio sold ..........................
Accounts receivable for investments sold .......................................
Accrued interest, dividends and foreign taxes receivable ......................
Total assets
LIABILITIES
Bank overdraft ................................................................
Accounts payable for shares of the portfolio redeemed .........................
Accrued investment advisory fee ...............................................
Accrued directors' and officers' fees and expenses ............................
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 - 3,310,007; 1,283,647; 332,474 and 295,093 shares,
respectively ..............................................................
Paid-in capital ...............................................................
Undistributed net investment income (loss) (Note 1) ...........................
Accumulated net realized gain (loss) on investments ...........................
Accumulated net realized loss on foreign currency transactions..................
Net unrealized appreciation (depreciation) of investments ......................
Net unrealized depreciation 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
------------------- ----------------------- ------------------------ ---------------------------
<S> <C> <C> <C> <C>
$ 11,926,544 $ - $ - $ -
3,400,082 - - -
------------ ------------ ------------- ------------
15,326,626 - - -
6,121,004 - - -
10,007,252 - - -
9,841,919 - - 22,616,487
1,121,237 - 17,194,113 -
17,767,504 86,084,102 2,266,219 -
- - 30,000 -
------------ ------------ ------------- ------------
60,185,542 86,084,102 19,490,332 22,616,487
- - 3,297 -
51,810 1,029,586 - -
238,667 - - 115,009
572,061 2,160,205 367,572 6,830
------------ ------------ ------------- ------------
61,048,080 89,273,893 19,861,201 22,738,326
327,087 346,927 - 129,968
1,931 29,677 422 -
48,970 38,671 11,960 20,401
24,832 30,485 5,761 5,242
22,282 55,648 8,463 -
------------ ------------ ------------- ------------
425,102 501,408 26,606 155,611
------------ ------------ ------------- ------------
$ 60,622,978 $ 88,772,485 $ 19,834,595 $ 22,582,715
============ ============ ============= ============
$ 3,310 $ 1,284 $ 332 $ 295
49,097,803 88,685,008 19,257,975 7,982,304
------------ ------------ ------------- ------------
49,101,113 88,686,292 19,258,307 7,982,599
7,459,284 263,584 847,524 (271,760)
4,268,349 (168,865) (158,795) 2,078,459
(297,619) - - -
109,391 (8,526) (112,441) 12,793,417
(17,540) - - -
------------ ------------ ------------- ------------
$ 60,622,978 $ 88,772,485 $ 19,834,595 $ 22,582,715
============ ============ ============= ============
$18.32 $69.16 $59.66 $76.53
====== ====== ====== ======
</TABLE>
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
STATEMENTS OF OPERATIONS
Six months ended July 31, 1999
(Unaudited)
Investment income (Note 1):
Interest ....................................................................
Dividends ...................................................................
Expenses (Notes 3 & 8):
Investment advisory fee .....................................................
Directors' fees and expenses ................................................
Officers' salary expense ....................................................
Excise tax ..................................................................
Regulatory expense ..........................................................
Total expenses
Less waiver of investment advisory fee ......................................
Net expenses
Net investment income (loss)
Realized and unrealized gain (loss)on investments and foreign currency
(Notes 1, 2, 5 & 6):
Net realized gain (loss) on:
Investments in unaffiliated issuers...........................................
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 (decrease) in net assets resulting from operations
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Permanent Portfolio Treasury Bill Portfolio Versatile Bond Portfolio Aggressive Growth Portfolio
------------------- ----------------------- ------------------------ ---------------------------
<S> <C> <C> <C> <C>
$ 923,408 $ 2,053,931 $ 584,562 $ 6,012
296,243 - - 73,041
------------ ------------ ------------- ------------
1,219,651 2,053,931 584,562 79,053
350,814 511,978 123,008 125,482
22,867 33,336 8,012 8,220
28,583 41,670 10,015 10,200
22,282 55,648 8,463 -
30,410 29,565 1,627 4,047
------------ ------------ ------------- ------------
454,956 672,197 151,125 147,949
- 227,748 40,943 -
------------ ------------ ------------- ------------
454,956 444,449 110,182 147,949
------------ ------------ ------------- ------------
764,695 1,609,482 474,380 (68,896)
------------ ------------ ------------- ------------
1,851,501 (446) (18,783) 2,103,116
(135,007) - - -
------------ ------------ ------------- ------------
1,716,494 (446) (18,783) 2,103,116
(3,832,791) (13,444) (146,886) 235,017
(14,621) - - -
------------ ------------ ------------- ------------
(2,130,918) (13,890) (165,669) 2,338,133
------------ ------------ ------------- ------------
$ (1,366,223) $ 1,595,592 $ 308,711 $ 2,269,237
============ ============ ============= ============
</TABLE>
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Permanent Portfolio
-----------------------------------
Six months ended Year ended
July 31, 1999 January 31, 1999
(Unaudited)
---------------- ----------------
<S> <C> <C>
Operations:
Net investment income (loss) .............................................. $ 764,695 $ 1,709,831
Net realized gain (loss) on investments ................................... 1,851,501 2,418,508
Net realized loss on foreign currency transactions ........................ (135,007) (162,612)
Change in unrealized appreciation (depreciation) of investments ............ (3,832,791) (2,399,261)
Change in unrealized appreciation (depreciation) on translation of
assets and liabilities in foreign currencies ............................ (14,621) 33,472
------------ ------------
Net increase (decrease) in net assets resulting from operations (1,366,223) 1,599,938
Equalization on shares issued and redeemed: ................................. (581,174) (313,988)
Distributions to shareholders from:
Net investment income ..................................................... - (691,911)
Net realized gain on investments .......................................... - (2,212,316)
Capital stock transactions exclusive of amounts allocated to undistributed
net investment income (Note 7): ........................................... (4,284,410) (2,625,499)
------------ ------------
Net increase (decrease) in net assets (6,231,807) (4,243,776)
Net assets at beginning of period 66,854,785 71,098,561
------------ ------------
Net assets at end of period (including undistributed net investment income
(loss) of $7,459,284 and $7,414,839; $263,584 and $(120,246); $847,524
and $1,372,050; $(271,760) and $(202,864), respectively) $ 60,622,978 $ 66,854,785
============ ============
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
Treasury Bill Portfolio Versatile Bond Portfolio Aggressive Growth Portfolio
- ------------------------------------ ----------------------------------- -----------------------------------
Six months ended Year ended Six months ended Year ended Six months ended Year ended
July 31, 1999 January 31, 1999 July 31, 1999 January 31, 1999 July 31, 1999 January 31, 1999
(Unaudited) (Unaudited) (Unaudited)
- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S><C> <C> <C> <C> <C> <C>
$ 1,609,482 $ 3,746,712 $ 474,380 $ 1,023,748 $ (68,896) $ (132,689)
(446) (7,146) (18,783) 3,227 2,103,116 68,336
- - - - - -
(13,444) (6,913) (146,886) (63,398) 235,017 4,132,624
- - - - - -
------------ ------------ ------------ ------------ ------------ ------------
1,595,592 3,732,653 308,711 963,577 2,269,237 4,068,271
(134,172) (329,728) (429,834) (224,680) - -
- (2,854,801) - (616,185) - -
- - - - - -
(5,784,165) (1,652,736) (4,421,649) 899,737 (1,450,767) (2,259,519)
------------ ------------ ------------ ------------ ------------ ------------
(4,322,745) (1,104,612) (4,542,772) 1,022,449 818,470 1,808,752
93,095,230 94,199,842 24,377,367 23,354,918 21,764,245 19,955,493
------------ ------------ ------------ ------------ ------------ ------------
$ 88,772,485 $ 93,095,230 $ 19,834,595 $ 24,377,367 $ 22,582,715 $ 21,764,245
============ ============ ============ ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 1999
(Unaudited)
<CAPTION>
Quantity Market Value
- ----------------- ------------
<C> <S> <C>
GOLD ASSETS - 19.67% of Total Net Assets
11,997 Troy Oz. Gold bullion (a) ......................................................... $ 3,082,093
33,383 Coins One-ounce gold coins (a) .................................................. 8,801,428
4,297 Units United States Gold Trust (a)(b) ........................................... 43,023
------------
Total Gold Assets (Cost $17,554,688) $ 11,926,544
------------
SILVER ASSETS - 5.61% of Total Net Assets
351,133 Troy Oz. Silver bullion (a) ........................................................ $ 1,910,165
379 Bags Silver coins (a) .......................................................... 1,489,917
------------
Total Silver Assets (Cost $3,126,799) $ 3,400,082
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Amount SWISS FRANC ASSETS - 10.10% of Total Net Assets
- ----------------
<C> <S> <C>
CHF 4,500,000 6.250% Swiss Confederation bonds, 01-07-03 ................................ $ 3,399,504
CHF 3,700,000 4.500% Swiss Confederation bonds, 10-07-04 ................................ 2,721,500
------------
Total Swiss Franc Assets (Cost $6,363,925) $ 6,121,004
------------
</TABLE>
<TABLE>
<CAPTION>
Number STOCKS OF UNITED STATES AND FOREIGN REAL ESTATE AND NATURAL
Of Shares RESOURCE COMPANIES - 16.51% of Total Net Assets
---------
<C> <S> <C>
NATURAL RESOURCES - 6.73% of Total Net Assets
20,000 Broken Hill Proprietary, Ltd. (c) ......................................... $ 442,500
12,000 Burlington Resources, Inc. ................................................ 530,250
20,000 Cyprus Amax Minerals Company ............................................. 262,500
30,000 Forest Oil Corporation (a) ................................................ 446,250
25,000 Inco, Ltd. ................................................................ 443,750
25,000 Pogo Producing Company .................................................... 476,563
50,000 Santa Fe Energy Resources, Inc. (a) ...................................... 462,500
8,000 Texaco, Inc. .............................................................. 498,500
8,000 Weyerhaeuser Company ..................................................... 517,500
------------
$ 4,080,313
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 1999
(Unaudited)
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
REAL ESTATE - 9.78% of Total Net Assets
22,000 Archstone Communities Trust ................................................ $ 474,375
20,000 BRE Properties, Inc. Class A ............................................... 502,500
31,000 Burnham Pacific Properties, Inc. ........................................... 391,375
20,000 Federal Realty Investment Trust ............................................ 452,500
40,000 IRT Property Company ....................................................... 390,000
18,000 MGI Properties ............................................................. 510,750
21,000 New Plan Excel Realty Trust, Inc............................................ 391,125
22,000 Pennsylvania Real Estate Investment Trust .................................. 444,125
11,000 Texas Pacific Land Trust ................................................... 567,188
40,000 United Dominion Realty Trust, Inc. ......................................... 457,500
29,000 Urstadt Biddle Properties, Inc.............................................. 221,125
29,000 Urstadt Biddle Properties, Inc. Class A..................................... 226,563
30,000 Washington Real Estate Investment Trust .................................... 506,250
35,000 Western Investment Real Estate Trust ....................................... 391,563
-----------
$ 5,926,939
-----------
Total Stocks of United States and Foreign Real Estate and Natural
Resource Companies (Cost $6,285,700) $10,007,252
-----------
AGGRESSIVE GROWTH STOCK INVESTMENTS - 16.23% of Total Net Assets
CHEMICALS - .65% of Total Net Assets
7,000 Air Products & Chemicals, Inc. ........................................... $ 234,063
10,000 Wellman, Inc. ............................................................. 161,875
-----------
$ 395,938
COMPUTER SOFTWARE - 2.10% of Total Net Assets
6,000 Autodesk, Inc. ............................................................ $ 159,000
1 Symantec Corporation warrant (a)(d) ....................................... 1,115,377
-----------
$ 1,274,377
CONSTRUCTION - .54% of Total Net Assets
5,000 Fluor Corporation ........................................................ $ 200,313
9,000 Johns Manville Corporation ................................................ 123,750
-----------
$ 324,063
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 1999
(Unaudited)
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
DATA PROCESSING - .78% of Total Net Assets
3,000 Hewlett-Packard Company ................................................... $ 314,063
6,000 Seagate Technology, Inc. (a) .............................................. 161,250
------------
$ 475,313
ELECTRICAL AND ELECTRONICS - .98% of Total Net Assets
5,000 Intel Corporation ........................................................ $ 345,000
10,000 National Semiconductor Corporation (a) .................................... 247,500
------------
$ 592,500
ENTERTAINMENT AND LEISURE - 1.60% of Total Net Assets
6,000 Disney (Walt) Company .................................................... $ 165,750
3,000 Harcourt General, Inc. ................................................... 139,313
10,000 Harrah's Entertainment, Inc. (a) ......................................... 213,125
7,000 Promus Hotel Corporation (a) .............................................. 188,563
3,000 Tribune Company .......................................................... 264,188
------------
$ 970,939
FINANCIAL SERVICES - 2.59% of Total Net Assets
8,000 Bank of New York, Inc. .................................................... $ 295,500
14,386 Bank of Petaluma ... ...................................................... 278,729
5,250 Bear Stearns Companies, Inc. ............................................. 222,141
3,000 Morgan Stanley Dean Witter & Company ..................................... 270,375
5,000 Schwab (Charles) Corporation ............................................. 220,313
4,000 State Street Corporation ................................................. 283,500
------------
$ 1,570,558
MANUFACTURING - 3.05% of Total Net Assets
3,000 Dana Corporation .......................................................... $ 125,250
4,000 Harley-Davidson, Inc. ..................................................... 221,500
4,000 Illinois Tool Works, Inc. ................................................ 297,250
8,000 Mattel, Inc. ............................................................. 188,000
2,000 NACCO Industries, Inc. Class A ........................................... 156,500
8,000 NACCO Industries, Inc. Class B ........................................... 626,000
5,000 Parker-Hannifin Corporation .............................................. 235,938
------------
$ 1,850,438
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 1999
(Unaudited)
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
OIL AND OILFIELD SERVICES - .62% of Total Net Assets
40,000 Frontier Oil Corporation (a) .............................................. $ 262,500
30,000 Parker Drilling Company (a) ............................................... 110,625
------------
$ 373,125
PHARMACEUTICALS - 1.38% of Total Net Assets
6,000 Abbott Laboratories ....................................................... $ 257,625
5,000 Biogen, Inc. (a) .......................................................... 344,063
4,000 Genzyme Corporation (General Division) (a) ................................ 226,250
756 Genzyme Corporation Molecular Oncology (a) ................................. 2,387
716 Genzyme Corporation Surgical Products (a) .................................. 3,782
1,245 Genzyme Corporation Tissue Repair (a) ..................................... 2,373
------------
$ 836,480
RETAIL - .53% of Total Net Assets
3,000 Costco Wholesale Corporation (a) .......................................... $ 224,250
6,000 Toys "R" Us, Inc. (a) ...................................................... 97,500
------------
$ 321,750
TRANSPORTATION - .71% of Total Net Assets
5,000 Kansas City Southern Industries, Inc. ..................................... $ 276,250
5,000 M. S. Carriers, Inc. (a) ................................................... 153,125
------------
$ 429,375
MISCELLANEOUS - .70% of Total Net Assets
5,000 Lockheed Martin Corporation ............................................... $ 174,063
4,000 Temple-Inland, Inc. ....................................................... 253,000
------------
$ 427,063
------------
Total Aggressive Growth Stock Investments (Cost $3,458,190) $ 9,841,919
------------
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 1999
(Unaudited)
<CAPTION>
Principal Amount Market Value
---------------- ------------
<C> <S> <C>
DOLLAR ASSETS - 31.16% of Total Net Assets
CORPORATE BONDS - 1.85% of Total Net Assets
$ 100,000 7.700% American Home Products Corporation, 02-15-00 ...................... $ 101,179
100,000 8.750% Anheuser-Busch Companies, Inc., 12-01-99 .......................... 101,080
100,000 9.250% Baxter International, Inc., 12-15-99 .............................. 101,290
100,000 8.875% Capital Cities / ABC, Inc., 12-15-00 .............................. 103,711
100,000 6.250% Dresser Industries, Inc., 06-01-00 ................................ 100,541
100,000 9.375% GTE Corporation, 12-01-00 ......................................... 104,106
100,000 5.850% Gannett Company, Inc., 05-01-00 ................................... 100,153
100,000 8.375% General Electric Capital Corporation, 03-01-01 .................... 103,242
100,000 6.375% International Business Machines Corporation, 06-15-00 ............. 100,612
100,000 9.875% May Department Stores Company, 06-15-00 ........................... 103,312
100,000 8.250% McDonnell Douglas Corporation, 07-01-00 ........................... 102,011
------------
$ 1,121,237
UNITED STATES TREASURY SECURITIES - 29.31% of Total Net Assets
41,000,000 United States Treasury bond strips (Principal only) 6.490%, 05-15-18(e) ... $ 12,325,830
800,000 United States Treasury bonds 6.250%, 08-15-23 ............................ 792,480
2,000,000 United States Treasury notes 5.250%, 01-31-01 ............................ 1,992,300
750,000 United States Treasury bills 4.860%, 08-05-99 (e).......................... 749,494
2,000,000 United States Treasury bills 4.690%, 07-22-00 (e).......................... 1,907,400
------------
$ 17,767,504
------------
Total Dollar Assets (Cost $23,286,849) $ 18,888,741
------------
Total Portfolio - 99.28% of total net assets (identified cost $60,076,151)(f) $ 60,185,542
Other assets, less liabilities (.72% of total net assets) 437,436
------------
Net assets applicable to outstanding shares $ 60,622,978
============
<FN>
Note:(a) Non-income producing.
(b) Affiliated investment trust.
(c) Sponsored ADR.
(d) Market value determined by the Board of Directors.
(e) Interest rate represents yield to maturity.
(f) Aggregate cost for Federal income tax purposes was $51,740,766.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE TREASURY BILL PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 1999
(Unaudited)
<CAPTION>
Principal Amount Market Value
---------------- ------------
<C> <S> <C>
UNITED STATES TREASURY SECURITIES - 96.97% of Total Net Assets
$20,000,000 United States Treasury notes 5.875%, 08-31-99 ............................. $ 20,022,000
20,000,000 United States Treasury notes 7.125%, 09-30-99 ............................. 20,073,800
20,000,000 United States Treasury notes 5.625%, 10-31-99 ............................. 20,032,000
20,000,000 United States Treasury notes 5.625%, 11-30-99 ............................. 20,044,800
5,000,000 United States Treasury notes 5.625%, 12-31-99 ............................. 5,012,109
900,000 United States Treasury bills 4.860%, 08-05-99 (a) ......................... 899,393
------------
Total Portfolio - 96.97% of total net assets (identified cost $86,092,628)(b) $ 86,084,102
Other assets, less liabilities (3.03% of total net assets) 2,688,383
------------
Net assets applicable to outstanding shares $ 88,772,485
============
<FN>
Note:(a) Interest rate represents yield to maturity.
(b) 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
July 31, 1999
(Unaudited)
<CAPTION>
Principal Amount Market Value
---------------- ------------
<C> <S> <C>
CORPORATE BONDS - 86.69% of Total Net Assets
AEROSPACE - 4.63% of Total Net Assets
$ 900,000 8.250% McDonnell Douglas Corporation, 07-01-00 ............................ $ 918,099
------------
$ 918,099
ALUMINUM - 5.02% of Total Net Assets
1,000,000 5.750% Aluminum Company of America, Inc., 02-01-01 ....................... $ 994,950
------------
$ 994,950
BEVERAGES - 4.59% of Total Net Assets
900,000 8.750% Anheuser-Busch Companies, Inc., 12-01-99 .......................... $ 909,720
------------
$ 909,720
BROADCASTING - 4.71% of Total Net Assets
900,000 8.875% Capital Cities / ABC, Inc., 12-15-00 ............................... $ 933,399
------------
$ 933,399
DATA PROCESSING - 4.56% of Total Net Assets
900,000 6.375% International Business Machines Corporation, 06-15-00 .............. $ 905,508
------------
$ 905,508
ELECTRIC UTILITIES - 5.21% of Total Net Assets
1,000,000 8.750% Pacific Gas & Electric Company, 01-01-01 ........................... $ 1,034,330
------------
$ 1,034,330
FINANCIAL SERVICES - 9.70% of Total Net Assets
1,000,000 5.650% Ameritech Capital Funding Corporation, 01-15-01 .................... $ 995,480
900,000 8.375% General Electric Capital Corporation, 03-01-01 .................... 929,178
------------
$ 1,924,658
OIL AND OILFIELD SERVICES - 9.78% of Total Net Assets
900,000 6.250% Dresser Industries, Inc., 06-01-00 ................................ $ 904,869
1,000,000 8.375% Mobil Corporation, 02-12-01 ....................................... 1,034,050
------------
$ 1,938,919
PHARMACEUTICALS - 14.24% of Total Net Assets
900,000 7.700% American Home Products Corporation, 02-15-00 ....................... $ 910,611
900,000 9.250% Baxter International, Inc., 12-15-99 ............................... 911,610
1,000,000 5.875% Upjohn Company, 04-15-00............................................ 1,002,050
------------
$ 2,824,271
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE VERSATILE BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 1999
(Unaudited)
<CAPTION>
Principal Amount Market Value
---------------- ------------
<C> <S> <C>
PUBLISHING - 4.54% of Total Net Assets
$ 900,000 5.850% Gannett Company, Inc., 05-01-00 ................................... $ 901,377
------------
$ 901,377
RETAIL - 9.93% of Total Net Assets
900,000 9.875% May Department Stores Company, 06-15-00 ........................... $ 929,808
1,000,000 8.625% Wal-Mart Stores, Inc., 04-01-01 ................................... 1,039,770
------------
$ 1,969,578
TELECOMMUNICATIONS - 9.78% of Total Net Assets
900,000 9.375% GTE Corporation, 12-01-00 .......................................... $ 936,954
1,000,000 6.125% Southwestern Bell Telephone Company, 03-01-00 ...................... 1,002,350
------------
$ 1,939,304
------------
Total Corporate Bonds (Cost $17,305,715) $ 17,194,113
------------
UNITED STATES TREASURY SECURITIES - 11.42% of Total Net Assets
2,300,000 United States Treasury notes 4.500%, 01-31-01.............................. $ 2,266,219
------------
Total United States Treasury securities (Cost $2,267,058) $ 2,266,219
------------
REPURCHASE AGREEMENT - .15% of Total Net Assets
30,000 State Street Bank & Trust Company Investment in a repurchase agreement,
purchased 07-30-99, 3.500%, maturing 08-02-99, maturity value 30,003 (a) .. $ 30,000
------------
Total Repurchase Agreement (Cost $30,000) $ 30,000
------------
Total Portfolio - 98.26% of total net assets
(identified cost $19,602,773)(b) $ 19,490,332
Other assets, less liabilities (1.74% of total net assets) 344,263
------------
Net assets applicable to outstanding shares $ 19,834,595
============
<FN>
Note:(a) Fully collateralized by United States Treasury securities based
on market prices plus accrued interest at July 30, 1999.
(b) Aggregate cost for Federal income tax purposes.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE AGGRESSIVE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 1999
(Unaudited)
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
AGGRESSIVE GROWTH STOCK INVESTMENTS - 100.15% of Total Net Assets
CHEMICALS - 2.85% of Total Net Assets
12,000 Air Products & Chemicals, Inc. ............................................ $ 401,250
15,000 Wellman, Inc. ............................................................. 242,813
------------
$ 644,063
COMPUTER SOFTWARE - 3.41% of Total Net Assets
10,000 Autodesk, Inc. ............................................................ $ 265,000
11,000 Computer Associates International, Inc. ................................... 504,625
------------
$ 769,625
CONSTRUCTION - 4.76% of Total Net Assets
5,000 Fluor Corporation ......................................................... $ 200,313
15,000 Johns Manville Corporation ............................................... 206,250
24,000 Ryland Group, Inc. ........................................................ 669,000
------------
$ 1,075,563
DATA PROCESSING - 5.24% of Total Net Assets
8,000 Hewlett-Packard Company ................................................... $ 837,500
4,000 SCI Systems, Inc. (a) .................................................... 211,000
5,000 Seagate Technology, Inc. (a) ............................................. 134,375
------------
$ 1,182,875
ELECTRICAL AND ELECTRONICS - 4.62% of Total Net Assets
10,800 Intel Corporation ........................................................ $ 745,200
12,000 National Semiconductor Corporation (a) .................................... 297,000
------------
$ 1,042,200
ENTERTAINMENT AND LEISURE - 10.18% of Total Net Assets
15,900 Disney (Walt) Company ..................................................... $ 439,238
9,000 Harcourt General, Inc. .................................................... 417,938
4,000 Promus Hotel Corporation (a) .............................................. 107,750
8,000 Tribune Company .......................................................... 704,500
15,000 Viacom, Inc. Class A (a) .................................................. 629,063
------------
$ 2,298,489
ENVIRONMENTAL - 3.13% of Total Net Assets
12,000 Browning-Ferris Industries, Inc. ......................................... $ 538,500
5,000 Ionics, Inc. (a) ......................................................... 169,375
------------
$ 707,875
FINANCIAL SERVICES - 17.75% of Total Net Assets
18,000 Bank of New York, Inc. .................................................... $ 664,875
14,000 Bear Stearns Companies, Inc. .............................................. 592,375
8,000 Morgan Stanley Dean Witter & Company ...................................... 721,000
30,000 Schwab (Charles) Corporation .............................................. 1,321,875
10,000 State Street Corporation .................................................. 708,750
------------
$ 4,008,875
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE AGGRESSIVE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 1999
(Unaudited)
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
MANUFACTURING - 11.10% of Total Net Assets
10,000 Dana Corporation ......................................................... $ 417,500
10,000 Harley-Davidson, Inc. ..................................................... 553,750
8,600 Illinois Tool Works, Inc. ................................................. 639,088
14,000 Mattel, Inc. .............................................................. 329,000
12,000 Parker-Hannifin Corporation ............................................... 566,250
------------
$ 2,505,588
OIL AND OILFIELD SERVICES - 3.71% of Total Net Assets
105,200 Frontier Oil Corporation (a) .............................................. $ 690,375
40,000 Parker Drilling Company (a) ............................................... 147,500
------------
$ 837,875
PHARMACEUTICALS - 15.49% of Total Net Assets
14,000 Amgen, Inc. (a) .......................................................... $ 1,076,250
20,000 Biogen, Inc. (a) .......................................................... 1,376,250
7,000 Chiron Corporation (a) .................................................... 175,438
15,000 Genzyme Corporation (General Division) (a) ................................ 848,438
1,620 Genzyme Corporation Molecular Oncology (a) ................................ 5,110
2,685 Genzyme Corporation Surgical Products (a) ................................ 14,180
1,170 Genzyme Corporation Tissue Repair (a) .................................... 2,230
------------
$ 3,497,896
RETAIL - 4.62% of Total Net Assets
12,000 Costco Wholesale Corporation (a) .......................................... $ 897,000
9,000 Toys "R" Us, Inc. (a) ..................................................... 146,250
------------
$ 1,043,250
TRANSPORTATION - 9.69% of Total Net Assets
3,000 Alaska Air Group, Inc.(a).................................................. $ 133,125
21,000 Kansas City Southern Industries, Inc. ..................................... 1,160,250
20,100 M.S. Carriers, Inc. (a) ................................................... 615,563
20,000 Mesa Air Group, Inc. (a) ................................................. 152,500
2,000 UAL Corporation (a) ...................................................... 126,875
------------
$ 2,188,313
MISCELLANEOUS - 3.60% of Total Net Assets
10,000 Lockheed Martin Corporation. .............................................. $ 348,125
7,000 Ryerson Tull, Inc. ........................................................ 149,625
5,000 Temple-Inland, Inc. ....................................................... 316,250
------------
$ 814,000
------------
Total Portfolio - 100.15% of total net assets (identified cost $9,823,070)(b) $ 22,616,487
Liabilities, less other assets (.15% of total net assets) (33,772)
------------
Net assets applicable to outstanding shares $ 22,582,715
============
<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
July 31, 1999
(Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
Permanent Portfolio Family of Funds, Inc. (the "Fund") is registered under
the Investment Company Act of 1940, as amended (the "Act" or, the "ICA"),
as a no-load, open-end, series, investment management 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 July 31, 1999, one such investment in the Permanent Portfolio
(1.84% of total net assets) was 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 six months ended July 31, 1999, 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 .................... $ 649 $ - $ 566,840 $ -
Swiss franc assets ................. 126,598 - - -
United States Treasury securities .. 792,762 2,038,653 6,051 -
Other investments .................. 3,399 15,278 11,671 6,012
Dividends ............................ 296,243 - - 73,041
------------ ------------ ------------ -----------
$ 1,219,651 $ 2,053,931 $ 584,562 $ 79,053
============ ============ ============ ===========
</TABLE>
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
July 31, 1999
(Unaudited)
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 July 31, 1999; 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 gains or losses on foreign currency
transactions 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 currency gains or losses arise from changes in the exchange rate
applicable to cash, receivables and liabilities denominated in foreign
currencies at July 31, 1999.
Federal 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, 1999,
pursuant to the requirements of the Code.
At January 31, 1999, capital loss carry forwards available to offset future
realized gains, if any, were as follows: $165,381 in the Treasury Bill
Portfolio, of which $1,752, $98,561, $41,743, $5,429, $3,632 and $14,264
expire on January 31, 2001, January 31, 2002, January 31, 2003, January 31,
2004, January 31, 2005 and January 31, 2007, respectively; $140,012 in the
Versatile Bond Portfolio, of which $86,614, $34,492 and $18,906 expire on
January 31, 2003, January 31, 2004 and January 31, 2006, respectively; and
$24,657 in the Aggressive Growth Portfolio, all of which expires on January
31, 2006. There were no capital loss carryforwards in the Permanent
Portfolio.
Pursuant to the Code, 14.49% of the distributions made from investment
company taxable income in 1998 by the Permanent Portfolio qualifies for the
corporate dividends received deduction.
During the six months ended July 31, 1999, the Fund's Permanent Portfolio,
Treasury Bill Portfolio and Versatile Bond Portfolio incurred federal
excise taxes of $22,282, $55,648 and $8,463, respectively, which was
imposed on four percent of each Portfolio's undistributed income and
capital gains, if any. Such tax reduced the Portfolio's net asset value,
however, such undistributed income and capital gains were retained by the
Portfolio to earn further interest, dividends and profit.
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 six months ended July 31, 1999, the Fund
reclassified from undistributed net investment income to paid-in capital,
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
July 31, 1999
(Unaudited)
certain book and tax basis differences relating to shareholder
distributions, totaling $139,076, $1,091,480 and $569,072 for the Permanent
Portfolio, the Treasury Bill Portfolio and the Versatile Bond Portfolio,
respectively.
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
The Permanent Portfolio held 4,297 units of United States Gold Trust, an
affiliated investment trust, resulting in net unrealized depreciation of
$22,923 at July 31, 1999. The Permanent Portfolio received no income from
this investment during the six months then ended.
3. INVESTMENT ADVISORY CONTRACT
In accordance with the terms of an Investment Advisory Contract (the
"Contract"), World Money Managers ("WMM"), the Fund's investment adviser,
receives a comprehensive advisory fee monthly (the "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.
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. Except for the Advisory Fee, the fees
and expenses of the Fund's directors, the salary expense of the Fund's
officers (including payments made by the Fund under its Long Term
Disability Plan described in Note 4), 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
Advisory Fee.
During the six months ended July 31, 1999, WMM voluntarily agreed to waive
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. WMM may continue voluntarily to waive such fees, although it is not
required to do so, and reserves the right to revoke, reduce or change the
waiver prospectively upon five days written notice to the Fund.
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.
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
July 31, 1999
(Unaudited)
4. LONG TERM DISABILITY PLAN
On March 9, 1998, the Fund's Board of Directors adopted the Permanent
Portfolio Family of Funds, Inc. Long Term Disability Plan (the "Plan"). The
Plan provides for payment by the Fund to any qualified officer of the Fund
who is totally disabled (a "Participant"), as defined by the Plan, a
disability benefit equal to 50% of the Participant's salary as of the time
the disability is determined, subject to cost-of-living adjustments, for a
period not to exceed five years. The Plan is renewable annually and may be
terminated by the Fund's Board of Directors at any time prior to each
annual renewal. On March 10, 1998, the Fund accrued an estimated liability
of $107,808 for one Participant under the Plan.
5. PURCHASES AND SALES OF SECURITIES
The following is a summary of purchases and sales of securities other than
short-term securities for the six months ended July 31, 1999:
<TABLE>
<CAPTION>
Permanent Treasury Bill Versatile Bond Aggressive Growth
Portfolio Portfolio Portfolio Portfolio
------------- ------------- -------------- -----------------
<S> <C> <C> <C> <C>
Purchases................................ $ 3,111,252 None $ 7,514,198 $ 1,559,642
Sales.................................... 6,411,822 None 12,349,057 3,079,738
</TABLE>
6. NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS
<TABLE>
The following is a summary of net unrealized appreciation (depreciation) of investments at
July 31, 1999 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 .................... $14,344,610 $ 1,343 $ 3,484 $13,066,086
Investments other than securities ....... 300,467 - - -
----------- -------- ----------- -----------
14,645,077 1,343 3,484 13,066,086
Aggregate gross unrealized depreciation
of investments with excess of tax cost
over value:
Investments in securities of unaffiliated
issuers ................................. (544,973) (9,869) (115,925) (272,669)
Investments other than securities........ (5,655,328) - - -
----------- -------- ----------- -----------
(6,200,301) (9,869) (115,925) (272,669)
----------- -------- ----------- -----------
Net unrealized appreciation (depreciation)
of investments $ 8,444,776 $ (8,526) $ (112,441) $12,793,417
=========== ======== =========== ===========
</TABLE>
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
July 31, 1999
(Unaudited)
7. 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 period and year ended:
<CAPTION>
Permanent Portfolio
---------------------------------------------------------------------------------
Six months ended July 31, 1999 Year ended January 31, 1999
---------------------------------------- -------------------------------------
Shares Dollars Shares Dollars
---------------- -------------------- ------------------- ----------------
<S> <C> <C> <C> <C>
Shares sold...................... 128,356 $ 2,072,229 325,975 $ 5,316,770
Distributions reinvested......... - - 142,118 2,651,913
------- ------------ ------- ------------
128,356 2,072,229 468,093 7,968,683
Shares redeemed.................. (391,519) (6,356,639) (620,388) (10,594,182)
------- ------------ ------- ------------
Net decrease (263,163) $ (4,284,410) (152,295) $ (2,625,499)
======= ============ ======= ============
</TABLE>
<TABLE>
<CAPTION>
Treasury Bill Portfolio
---------------------------------------------------------------------------------
Six months ended July 31, 1999 Year ended January 31, 1999
---------------------------------------- -------------------------------------
Shares Dollars Shares Dollars
---------------- -------------------- ------------------- ----------------
<S> <C> <C> <C> <C>
Shares sold...................... 300,122 $ 20,157,022 719,836 $ 47,806,798
Distributions reinvested......... - - 39,785 2,689,841
------- ------------ ------- ------------
300,122 20,157,022 759,621 50,496,639
Shares redeemed.................. (386,205) (25,941,187) (784,288) (52,149,375)
------- ------------ ------- ------------
Net decrease (86,083) $ (5,784,165) (24,667) $ (1,652,736)
======= ============ ======= ============
</TABLE>
<TABLE>
<CAPTION>
Versatile Bond Portfolio
---------------------------------------------------------------------------------
Six months ended July 31, 1999 Year ended January 31, 1999
---------------------------------------- --------------------------------------
Shares Dollars Shares Dollars
---------------- -------------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Shares sold...................... 91,487 $ 4,940,741 409,669 $ 22,138,246
Distributions reinvested......... - - 9,691 566,997
------- ------------ ------- ------------
91,487 4,940,741 419,360 22,705,243
Shares redeemed.................. (173,400) (9,362,390) (403,659) (21,805,506)
------- ------------ ------- ------------
Net increase (decrease) (81,913) $ (4,421,649) 15,701 $ 899,737
======= ============ ======= ============
</TABLE>
<TABLE>
<CAPTION>
Aggressive Growth Portfolio
---------------------------------------------------------------------------------
Six months ended July 31, 1999 Year ended January 31, 1999
---------------------------------------- -------------------------------------
Shares Dollars Shares Dollars
---------------- -------------------- ------------------- ----------------
<S> <C> <C> <C> <C>
Shares sold...................... 15,104 $ 1,116,783 58,283 $ 3,529,499
Distributions reinvested......... - - - -
------- ------------ ------- ------------
15,104 1,116,783 58,283 3,529,499
Shares redeemed.................. (34,822) (2,567,550) (98,311) (5,789,018)
------- ------------ ------- ------------
Net decrease (19,718) $ (1,450,767) (40,028) $ (2,259,519)
======= ============ ======= ============
</TABLE>
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
July 31, 1999
(Unaudited)
8. REGULATORY MATTERS
Following a routine examination of the Fund in 1991, the Securities and
Exchange Commission (the "Commission") instituted public administrative and
cease-and-desist proceedings on January 13, 1997, to determine the truth of
allegations by the Commission's Division of Enforcement (the "Division")
that WMM, Terry Coxon and Alan Sergy (the Fund's investment adviser and two
of the Fund's directors and officers, respectively, or, the "Respondents"),
breached their fiduciary duties in violation of certain provisions of
federal securities laws in fiscal years 1990 through 1996. From May 5, 1997
through May 15, 1997, an administrative hearing on these charges was held
before Chief Administrative Law Judge Brenda P. Murray (the "Hearing
Officer") in San Francisco, California. The Respondents have denied all of
the allegations of the Division and have actively contested the
proceedings. No charges have been made against the Fund, which allegedly
was subject to improper charges by the Respondents, and the Fund is not a
party to the proceedings.
In an initial decision dated April 1, 1999 (the "Initial Decision"),
the Hearing Officer ruled that the Respondents had committed certain
violations. Specifically, the Hearing Officer ruled that the Respondents
violated Section 206(2) of the Investment Advisers Act of 1940: by charging
$248,153 of transfer agent and accounting fees to the Fund's Marketing and
Distribution Plan (the "12b-1 Plan") during calendar year 1990; by causing
the excessive capitalization of a broker-dealer subsidiary of the Permanent
Portfolio (World Money Securities, Inc., or "WMS") of $850,000 and charging
it in 1990 and 1991 for printing costs related to the distribution of
shares in the Treasury Bill Portfolio, Versatile Bond Portfolio and
Aggressive Growth Portfolio in the amount of $336,571; by charging WMS
excessive rent and improper underwriting costs of $72,426; and by acquiring
a "call option" in 1990 prohibited by the Fund's fundamental investment
policies and managing the investment for the advantage of a client of an
officer of the Fund. The Hearing Officer also ruled that the Respondents
violated or aided and abetted violations of: Section 12(b) of the ICA and
Rule 12b-1 thereunder, by receiving unauthorized reimbursements in calendar
year 1990 of $214,270 under the Fund's 12b-1 Plan and by providing
insufficient information regarding the 12b-1 Plan to the Fund's Board of
Directors; Section 13(a)(3) of the ICA by acquiring the "call option;"
Section 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange
Act of 1934 and Rule 10b-5 thereunder, and Section 34(b) of the ICA by
making misleading statements in the Fund's registration materials; Section
10(b) of the ICA by using WMS as a principal underwriter for the Fund; and
Section 17(d) of the ICA and Rule 17d-1 thereunder, by causing WMS to be
excessively capitalized.
The Hearing Officer ordered that the Respondents: cease and desist from
committing further violations; be suspended from association with any
registered investment adviser or investment company for a period of three
months; disgorge $1,608,018, pay prejudgment interest of $1,236,726 and pay
civil penalties of $140,000.
The Respondents believe that the Hearing Officer's Initial Decision is
incorrect and contains reviewable errors. Accordingly, on April 22, 1999,
they filed petitions for review by the Commission. On April 21, 1999, the
Division also filed a petition for review by the Commission of certain
sanctions contained in the Initial Decision, seeking to permanently bar WMM
from acting as an investment adviser and to bar Terry Coxon from
association with any registered investment adviser or investment company
for one year with a right to reapply. Thereafter, the Commission granted
the petitions and has accepted the review of the Initial Decision.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
July 31, 1999
(Unaudited)
Under the Fund's Bylaws, the Fund is obligated to advance expenses incurred
by the Respondents in the proceedings upon their undertaking to repay the
advances, in the event it is ultimately determined that they have committed
willful misfeasance, bad faith, gross negligence or reckless disregard of
their duties. The Fund has therefore incurred, and may continue to incur,
such expenses in connection with the allegations, including amounts paid by
WMM to persons who are directors and officers of the Fund for their
litigation expenses. The Fund neither paid nor advanced such expenses
during the six months ended July 31, 1999.
The Initial Decision of the Hearing Officer does not become effective until
the Commission's decision, which could affirm, reverse or modify the
Initial Decision. WMM continues to act as investment adviser of the Fund,
and Terry Coxon continues to serve as President and a director of the Fund.
Alan Sergy retired from the Fund for medical reasons in March 1998 and,
except for payments being made under the Fund's Long Term Disability Plan
(See Note 4), is no longer associated with the Fund.
The ultimate outcome of these proceedings is unknown. The Fund's Board of
Directors intends to continue to monitor the proceedings and to take such
actions as may be appropriate to assure the availability to the Fund of
such investment advice and administrative support as may be necessary to
continuously implement the Fund's investment policies and investment
objectives.
The Fund paid or reimbursed the following legal expenses (and during the
years ended January 31, 1995 through January 31, 1999, the indemnification
expenses described above) during the six months ended July 31, 1999 and the
years ended January 31, 1992 through 1999:
Permanent Treasury Bill Versatile Bond Aggressive Growth
Portfolio Portfolio Portfolio Portfolio
------------- ------------- -------------- -----------------
1992 .... $ - $ - $ - $ -
1993 .... 52,331 63,961 - -
1994 .... - - - -
1995 .... 78,010 71,156 6,213 1,777
1996 .... 26,100 22,233 1,646 848
1997 .... 53,511 43,469 3,046 2,640
1998 .... 325,585 293,026 - 32,558
1999 .... 14,333 14,015 11,155 11,473
2000 .... 30,410 29,565 1,627 4,047
---------- ---------- ---------- ----------
$ 580,280 $ 537,425 $ 23,687 $ 53,343
========== ========== ========== ==========
On June 1, 1999, the financial information contained in the Fund's
prospectus became stale and the Fund ceased to have a current prospectus.
The Fund filed a new, updated prospectus which became effective September
24, 1999.
<PAGE>
This page intentionally left blank.
<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 period:
<CAPTION>
Six months ended Year ended Year ended Year ended Year ended Year ended
July 31, 1999 January 31, January 31, January 31, January 31, January 31,
(Unaudited) 1999 1998 1997 1996 1995
---------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 18.71 $ 19.08 $ 18.40 $ 18.80 $ 16.51 $ 17.55
--------- --------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income ................ .23 .47 .37 .52 .50 .64
Net realized and unrealized gain (loss)
on investments and foreign
currencies ........................... (.62) - 1.01 (.41) 2.17 (1.46)
--------- --------- --------- --------- --------- ---------
Total income (loss) from
investment operations (.39) .47 1.38 .11 2.67 (.82)
Less distributions from:
Net investment income ................ - (.20) (.34) (.42) (.38) (.22)
Net realized gain on investments (1)... - (.64) (.36) (.09) - -
--------- --------- --------- --------- --------- ---------
Total distributions - (.84) (.70) (.51) (.38) (.22)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period $ 18.32 $ 18.71 $ 19.08 $ 18.40 $ 18.80 $ 16.51
========= ========= ========= ========= ========= =========
Total return (2) ......................... (2.08)% 2.48% 7.57% .57% 16.20% (4.65)%
Ratios / supplemental data:
Net assets, end of period (in thousands). $ 60,623 $ 66,855 $ 71,099 $ 72,992 $ 76,641 $ 71,610
========= ========= ========= ========= ========= =========
Ratio of expenses to average net assets.. 1.46%* 1.43% 1.91% 1.49% 1.35% 1.32%
Ratio of net investment income
to average net assets ................. 2.45%* 2.48% 1.96% 2.78% 2.85% 2.63%
Portfolio turnover rate ................. 14.90%* 14.05% 7.66% 12.29% 9.96% 31.24%
<FN>
* Computed on an annualized basis.
(l) Capital gain distribution pursuant to Section 852(b)(3) of the Code.
(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>
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 period:
<CAPTION>
Six months ended Year ended Year ended Year ended Year ended Year ended
July 31, 1999 January 31, January 31, January 31, January 31, January 31,
(Unaudited) 1999 1998 1997 1996 1995
--------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 67.97 $ 67.56 $ 67.55 $ 67.84 $ 66.40 $ 64.81
----------- ---------- ---------- ---------- ---------- ---------
Income from investment operations:
Net investment income (1) ................. 1.21 2.72 2.69 2.84 3.22 2.65
Net realized and unrealized gain (loss)
on investments (2) ........................ (.02) .03 .06 .01 .06 (.39)
----------- ---------- ---------- ---------- ---------- ---------
Total income from investment operations 1.19 2.75 2.75 2.85 3.28 2.26
Less distributions from:
Net investment income ..................... - (2.34) (2.74) (3.14) (1.84) (.67)
----------- ---------- ---------- ---------- ---------- ---------
Total distributions - (2.34) (2.74) (3.14) (1.84) (.67)
----------- ---------- ---------- ---------- ---------- ---------
Net asset value, end of period $ 69.16 $ 67.97 $ 67.56 $ 67.55 $ 67.84 $ 66.40
=========== ========== ========== ========== ========== =========
Total return (3) ............................... 1.75% 4.09% 4.09% 4.23% 4.95% 3.49%
Ratios / supplemental data:
Net assets, end of period (in thousands) ..... $ 88,772 $ 93,095 $ 94,200 $ 105,342 $ 114,667 $ 121,666
=========== ========== ========== ========== ========== =========
Ratio of expenses to average net assets (1)... .98%* .96% 1.20% .90% .82% .82%
Ratio of net investment income
to average net assets ..................... 3.55%* 4.01% 3.98% 4.19% 4.79% 3.57%
<FN>
* Computed on an annualized basis.
(l) Due to the waiver of advisory fees, the ratio of expenses to average net
assets was reduced by .50% for the six months ended July 31, 1999 and .50%,
.50%, .50%, .50% and .50% for the years ended January 31,1999, 1998, 1997,
1996 and 1995, respectively. Without this waiver, the net investment income
per share would have been $.95 for the six months ended July 31, 1999 and
$2.24, $2.19, $2.37, $2.78 and $2.12 for the years then ended.
(2) 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.
(3) 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>
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 period:
<CAPTION>
Six months ended Year ended Year ended Year ended Year ended Year ended
July 31, 1999 January 31, January 31, January 31, January 31, January 31,
(Unaudited) 1999 1998 1997 1996 1995
--------------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 58.83 $ 58.58 $ 57.24 $ 56.85 $ 54.90 $ 54.76
----------- ---------- ---------- ---------- --------- ---------
Income from investment operations:
Net investment income (1) ............... 1.27 2.77 2.87 2.94 2.91 2.12
Net realized and unrealized gain (loss)
on investments (2) .................... (.44) (.08) .17 (.34) 1.05 (.63)
----------- ---------- ---------- ---------- --------- ---------
Total income from investment operations .83 2.69 3.04 2.60 3.96 1.49
Less distributions from:
Net investment income ................... - (2.44) (1.70) (2.21) (2.01) (1.33)
Net realized gain on investments (3)...... - - - - - (.02)
----------- ---------- ---------- ---------- --------- ---------
Total distributions - (2.44) (1.70) (2.21) (2.01) (1.35)
----------- ---------- ---------- ---------- --------- ---------
Net asset value, end of period $ 59.66 $ 58.83 $ 58.58 $ 57.24 $ 56.85 $ 54.90
=========== ========== ========== ========== ========== =========
Total return (4) ............................ 1.41% 4.61% 5.33% 4.58% 7.24% 2.74%
Ratios / supplemental data:
Net assets, end of period (in thousands).... $ 19,835 $ 24,377 $ 23,355 $ 21,345 $ 20,137 $ 22,229
=========== ========== ========== ========== ========== =========
Ratio of expenses to average net assets (1). 1.00%* 1.08% 1.01% .97% .89% .86%
Ratio of net investment income
to average net assets ................... 4.31%* 4.72% 4.95% 5.16% 5.21% 3.84%
Portfolio turnover rate ................... 70.74%* 68.21% 55.53% 102.29% 51.64% 74.62%
<FN>
* Computed on an annualized basis.
(1) Due to the waiver of advisory fees, the ratio of expenses to average net
assets was reduced by .37% for the six months ended July 31, 1999 and .37%,
.38%, .38%, .37% and .36% for the years ended January 31 ,1999, 1998, 1997,
1996 and 1995, respectively. Without this waiver, the net investment income
per share would have been $1.12 for the six months ended July 31, 1999 and
$2.48, $2.59, $2.66, $2.65 and $1.84 for the years then ended.
(2) 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.
(3) Capital gain distribution pursuant to Section 852(b)(3) of the Code.
(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>
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 period:
<CAPTION>
Six months ended Year ended Year ended Year ended Year ended Year ended
July 31, 1999 January 31, January 31, January 31, January 31, January 31,
(Unaudited) 1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 69.13 $ 56.24 $ 47.66 $ 40.65 $ 31.61 $ 32.56
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income (loss) .................... (.22) (.41) (.31) .26 (.02) (.01)
Net realized and unrealized gain (loss)
on investments ................................ 7.62 13.30 11.97 7.05 10.68 (.89)
---------- ---------- ---------- ---------- ---------- ----------
Total income (loss) from investment operations 7.40 12.89 11.66 7.31 10.66 (.90)
Less distributions from:
Net investment income ........................... - - (.19) (.25) (.11) (.03)
Net realized gain on investments (1).............. - - (2.89) (.05) (1.51) (.02)
---------- ---------- ---------- ---------- ---------- ----------
Total distributions - - (3.08) (.30) (1.62) (.05)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 76.53 $ 69.13 $ 56.24 $ 47.66 $ 40.65 $ 31.61
========== ========== ========== ========== ========== ==========
Total return (2) .................................... 10.70% 22.92% 24.41% 18.00% 33.78% (2.75)%
Ratios / supplemental data:
Net assets, end of period (in thousands) .......... $ 22,583 $ 21,764 $ 19,955 $ 15,417 $ 11,067 $ 6,758
========== ========== ========== ========== ========== ==========
Ratio of expenses to average net assets ............ 1.33%* 1.39% 1.46% 1.33% 1.19% 1.23%
Ratio of net investment income (loss) to
average net assets................................ (.62)%* (.65)% (.60)% .59% (.06)% (.04)%
Portfolio turnover rate ............................ 14.33%* 2.73% 2.15% 21.32% 18.94% 26.29%
<FN>
* Computed on an annualized basis.
(1) Capital gain distribution pursuant to Section 852(b)(3) of the Code.
(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>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
The tables below show each of the Fund's Portfolio's average annual total
returns for the periods indicated, assuming a hypothetical 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 period. Past performance is not
predictive of future performance and does not guarantee future gain or loss to
be realized from an investment in any Portfolio. The investment return and
principal value of an investment in a Portfolio will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost.
<TABLE>
<CAPTION>
Permanent Portfolio(1) Treasury Bill Portfolio (2)(5)
- --------------------------------------- ------------------------------------
<S><C> <C> <C>
1 year ended July 31, 1999 1.03% 1 year ended July 31, 1999 3.71%
5 years ended July 31, 1999 4.59% 5 years ended July 31, 1999 4.17%
10 years ended July 31, 1999 4.21% 10 years ended July 31, 1999 4.28%
15 years ended July 31, 1999 5.65% 12 years 66 days ended
16 years 243 days ended July 31, 1999 4.62%
July 31, 1999 4.60%
Aggressive Growth Portfolio(3) Versatile Bond Portfolio (4)(6)
- --------------------------------------- ------------------------------------
<C> <C> <C> <C>
1 year ended July 31, 1999 26.81% 1 year ended July 31, 1999 3.74%
5 years ended July 31, 1999 22.59% 5 years ended July 31, 1999 5.01%
9 years 211 days ended 7 years 308 days ended
July 31, 1999 16.66% July 31, 1999 4.59%
<FN>
- -----------------------
(1) The Permanent Portfolio commenced operations on December 1, 1982.
(2) The Treasury Bill Portfolio commenced operations on May 26, 1987.
(3) The Aggressive Growth Portfolio commenced operations on January 2, 1990.
(4) The Versatile Bond Portfolio commenced operations on September 27, 1991.
(5) Yield on the Treasury Bill Portfolio for the seven days ended July 31 ,
1999, assuming reinvestment of all dividends and distributions and
deduction of all fees and expenses except the $35 one-time account start-up
fee, was 3.77%, and effective yield was 3.84%.
(6) The 30-day SEC standardized yield for the Versatile Bond Portfolio at
July 31, 1999, calculated by dividing the net investment income per
share earned during the specified 30-day period by the net asset value per
share on the last day of the period and annualizing the resulting figure,
and assuming reinvestment of all dividends and distributions and deduction
of all fees and expenses except the $35 one-time account start-up fee, was
4.71%.
</FN>
</TABLE>
<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. The strong performance of U.S. growth and natural resource
stocks so far in 1999 has been more than offset by weakness in gold assets.
Accordingly, the Portfolio achieved a total return of (2.08%) for the six
months ended July 31, 1999, as compared to an annualized inflation rate of
1.70% during the period 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 1.75% and maintained an average maturity of
between 60 and 90 days throughout the six months ended July 31, 1999. 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 1.41% while
maintaining an average maturity of between 270 and 450 days throughout the
six months ended July 31, 1999. 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 10.70% for the six
months ended July 31, 1999, as compared to 14.73% for the Dow Jones
Industrial Average and 7.08% for the Standard and Poor's 500 Stock Index
during the period then ended.
<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)
(800) 341-8900
In Mass. (617) 557-8000
CUSTODIAN
State Street Bank and Trust Company
Boston, Massachusetts 02105
INVESTOR'S INFORMATION OFFICE
P.O. Box 5847 SEMI-ANNUAL
Austin, Texas 78763 REPORT
(800) 531-5142 Nationwide July 31, 1999
Local (512) 453-7558
