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, 2000, and the related statements of operations and changes in net assets and
financial highlights for the year 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. For all periods ending prior to
February 1, 1999, the statements of changes in net assets, financial highlights
and capital stock transactions included in Note 7 were audited by other auditors
whose report dated March 12, 1999, expressed an unqualified opinion on this
information and whose report contained an explanatory paragraph that stated that
the Securities and Exchange Commission is involved in public administrative and
cease-and-desist proceedings against the Fund's investment adviser and two of
the Fund's directors and officers.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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, 2000, 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, 2000, the results of their operations, the changes in
their net assets and their financial highlights for the year then ended, in
conformity with generally accepted accounting principles.
As discussed in Note 8 to the financial statements, the Securities and Exchange
Commission is involved in public administrative and cease-and-desist proceedings
against the Fund's investment adviser and one (formerly two) of the Fund's
directors and officers.
Tait, Weller & Baker
Philadelphia, Pennsylvania
February 25, 2000
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
January 31, 2000
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 ...........................................
Total investments (identified cost $56,266,373; $80,057,149; $17,895,873
and $9,125,226, 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 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 - 3,254,445; 1,194,155; 309,429 and 286,295 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>
$ 11,473,875 $ - $ - $ -
3,058,788 - - -
------------ ------------ ------------- ------------
14,532,663 - - -
5,343,551 - - -
8,584,126 - - -
9,106,930 - - 24,019,386
2,614,380 - 16,510,460 -
16,691,048 80,028,000 1,234,911 49,985
------------ ------------ ------------- ------------
56,872,698 80,028,000 17,745,371 24,069,371
636,801 - 21,233 18,064
2,496 131,324 - 64,000
473,696 1,372,324 331,800 5,390
------------ ------------ ------------- ------------
57,985,691 81,531,648 18,098,404 24,156,825
- 257,880 - -
100,265 25,582 105 108,256
1,003,573 - - -
53,419 42,588 11,298 20,420
31,413 39,925 7,905 8,644
24,363 106,308 14,487 82,000
------------ ------------ ------------- ------------
1,213,033 472,283 33,795 219,320
------------ ------------ ------------- ------------
$ 56,772,658 $ 81,059,365 $ 18,064,609 $ 23,937,505
============ ============ ============= ============
$ 3,254 $ 1,194 $ 309 $ 286
47,611,097 81,253,103 17,781,905 7,101,164
------------ ------------ ------------- ------------
47,614,351 81,254,297 17,782,214 7,101,450
7,437,661 6,209 615,981 (200,014)
1,422,779 (171,992) (183,084) 2,091,924
(268,067) - - -
606,325 (29,149) (150,502) 14,944,145
(40,391) - - -
------------ ------------ ------------- ------------
$ 56,772,658 $ 81,059,365 $ 18,064,609 $ 23,937,505
============ ============ ============= ============
$17.44 $67.88 $58.38 $83.61
====== ====== ====== ======
</TABLE>
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
STATEMENTS OF OPERATIONS
Year ended January 31, 2000
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...........................................
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 (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>
$ 1,875,377 $ 4,143,429 $ 1,059,670 $ 13,111
494,741 - - 147,084
------------ ------------ ------------- ------------
2,370,118 4,143,429 1,059,670 160,195
687,246 986,608 226,329 251,511
64,215 92,398 21,030 26,732
58,043 83,498 19,007 21,421
24,363 106,308 14,487 82,000
69,042 64,335 1,627 7,910
------------ ------------ ------------- ------------
902,909 1,333,147 282,480 389,574
- 436,923 75,751 -
------------ ------------ ------------- ------------
902,909 896,224 206,729 389,574
------------ ------------ ------------- ------------
1,467,209 3,247,205 852,941 (229,379)
------------ ------------ ------------- ------------
3,074,982 (3,573) (43,072) 2,116,581
(1,614,304) - - -
(268,067) - - -
------------ ------------ ------------- ------------
1,192,611 (3,573) (43,072) 2,116,581
(3,335,857) (34,067) (184,947) 2,385,745
(37,472) - - -
------------ ------------ ------------- ------------
(2,180,718) (37,640) (228,019) 4,502,326
------------ ------------ ------------- ------------
$ (713,509) $ 3,209,565 $ 624,922 $ 4,272,947
============ ============ ============= ============
</TABLE>
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Permanent Portfolio
-----------------------------------
Year ended Year ended
January 31, 2000 January 31, 1999
---------------- ----------------
<S> <C> <C>
Operations:
Net investment income (loss) .............................................. $ 1,467,209 $ 1,709,831
Net realized gain (loss) on investments ................................... 1,460,678 2,418,508
Net realized loss on foreign currency transactions ........................ (268,067) (162,612)
Change in unrealized appreciation (depreciation) of investments ............ (3,335,857) (2,399,261)
Change in unrealized appreciation (depreciation) on translation of
assets and liabilities in foreign currencies ........................... (37,472) 33,472
------------ ------------
Net increase (decease) in net assets resulting from operations (713,509) 1,599,938
Equalization on shares issued and redeemed: ................................. (732,742) (313,988)
Distributions to shareholders from:
Net investment income ..................................................... (924,178) (691,911)
Net realized gain on investments .......................................... (2,454,747) (2,212,316)
Capital stock transactions exclusive of amounts allocated to undistributed
net investment income (Note 7): ........................................... (5,256,951) (2,625,499)
------------ ------------
Net increase (decrease) in net assets (10,082,127) (4,243,776)
Net assets at beginning of year 66,854,785 71,098,561
------------ ------------
Net assets at end of year (including undistributed net investment income
(loss) of $7,437,661 and $7,414,839; $6,209 and $(120,246); $615,981
and $1,372,050; $(200,014) and $(202,864), respectively) $ 56,772,658 $ 66,854,785
============ ============
</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, 2000 January 31, 1999 January 31, 2000 January 31, 1999 January 31, 2000 January 31, 1999
- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S><C> <C> <C> <C> <C> <C>
$ 3,247,205 $ 3,746,712 $ 852,941 $ 1,023,748 $ (229,379) $ (132,689)
(3,573) (7,146) (43,072) 3,227 2,116,581 68,336
- - - - - -
(34,067) (6,913) (184,947) (63,398) 2,385,745 4,132,624
- - - - - -
------------ ------------ ------------ ------------ ------------ ------------
3,209,565 3,732,653 624,922 963,577 4,272,947 4,068,271
(455,251) (329,728) (702,166) (224,680) - -
(2,832,534) (2,854,801) (481,767) (616,185) - -
- - - - - -
(11,957,645) (1,652,736) (5,753,747) 899,737 (2,099,687) (2,259,519)
------------ ------------ ------------ ------------ ------------ ------------
(12,035,865) (1,104,612) (6,312,758) 1,022,449 2,173,260 1,808,752
93,095,230 94,199,842 24,377,367 23,354,918 21,764,245 19,955,493
------------ ------------ ------------ ------------ ------------ ------------
$ 81,059,365 $ 93,095,230 $ 18,064,609 $ 24,377,367 $ 23,937,505 $ 21,764,245
============ ============ ============ ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 2000
<CAPTION>
Quantity Market Value
- ----------------- ------------
<C> <S> <C>
GOLD ASSETS - 20.21% of Total Net Assets
11,613 Troy Oz. Gold bullion (a) ......................................................... $ 3,288,710
27,883 Coins One-ounce gold coins (a) .................................................. 8,137,654
4,297 Units United States Gold Trust (a)(b) ........................................... 47,511
------------
Total Gold Assets (Cost $14,043,295) $ 11,473,875
------------
SILVER ASSETS - 5.39% of Total Net Assets
321,246 Troy Oz. Silver bullion (a) ........................................................ $ 1,697,783
379 Bags Silver coins (a) .......................................................... 1,361,005
------------
Total Silver Assets (Cost $2,994,572) $ 3,058,788
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Amount SWISS FRANC ASSETS - 9.41% of Total Net Assets
- ----------------
<C> <S> <C>
CHF 3,900,000 6.500% Swiss Confederation bonds, 04-10-04 ................................ $ 2,671,184
CHF 4,000,000 5.500% Swiss Confederation bonds, 01-06-05 ................................ 2,672,367
------------
Total Swiss Franc Assets (Cost $5,830,906) $ 5,343,551
------------
</TABLE>
<TABLE>
<CAPTION>
Number STOCKS OF UNITED STATES AND FOREIGN REAL ESTATE AND NATURAL
Of Shares RESOURCE COMPANIES - 15.12% of Total Net Assets
---------
<C> <S> <C>
NATURAL RESOURCES - 6.89% of Total Net Assets
20,000 Broken Hill Proprietary, Ltd. (c) ......................................... $ 473,750
12,000 Burlington Resources, Inc. ................................................ 384,750
30,000 Forest Oil Corporation (a) ................................................ 300,000
25,000 Inco, Ltd.(a).............................................................. 475,000
8,000 Phelps Dodge Corporation .................................................. 465,000
25,000 Pogo Producing Company .................................................... 564,063
50,000 Santa Fe Energy Resources, Inc. (a) ...................................... 365,625
8,000 Texaco, Inc. .............................................................. 423,000
8,000 Weyerhaeuser Company ..................................................... 459,000
------------
$ 3,910,188
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 2000
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
REAL ESTATE - 8.23% of Total Net Assets
22,000 Archstone Communities Trust ................................................ $ 441,375
20,000 BRE Properties, Inc. Class A ............................................... 440,000
31,000 Burnham Pacific Properties, Inc. ........................................... 279,000
20,000 Federal Realty Investment Trust ............................................ 398,750
35,000 IRT Property Company ....................................................... 288,750
18,000 MGI Properties ............................................................. 92,250
21,000 New Plan Excel Realty Trust, Inc............................................ 343,875
22,000 Pennsylvania Real Estate Investment Trust .................................. 374,000
11,000 Texas Pacific Land Trust ................................................... 448,938
40,000 United Dominion Realty Trust, Inc. ......................................... 385,000
29,000 Urstadt Biddle Properties, Inc.............................................. 203,000
29,000 Urstadt Biddle Properties, Inc. Class A..................................... 210,250
30,000 Washington Real Estate Investment Trust .................................... 465,000
30,000 Western Investment Real Estate Trust ....................................... 303,750
-----------
$ 4,673,938
-----------
Total Stocks of United States and Foreign Real Estate and Natural
Resource Companies (Cost $6,044,755) $ 8,584,126
-----------
AGGRESSIVE GROWTH STOCK INVESTMENTS - 16.04% of Total Net Assets
CHEMICALS - .67% of Total Net Assets
7,000 Air Products & Chemicals, Inc. ........................................... $ 207,375
10,000 Wellman, Inc. ............................................................. 173,750
-----------
$ 381,125
COMPUTER SOFTWARE - 3.78% of Total Net Assets
6,000 Autodesk, Inc. ............................................................ $ 183,375
1 Symantec Corporation warrant (a)(d) ....................................... 1,962,342
-----------
$ 2,145,717
CONSTRUCTION - .18% of Total Net Assets
9,000 Johns Manville Corporation ................................................ $ 100,688
-----------
$ 100,688
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 2000
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
DATA PROCESSING - .73% of Total Net Assets
2,000 Hewlett-Packard Company ................................................... $ 216,500
5,000 Seagate Technology, Inc. (a) .............................................. 200,313
-----------
$ 416,813
ELECTRICAL AND ELECTRONICS - .81% of Total Net Assets
2,000 Intel Corporation ........................................................ $ 197,875
5,000 National Semiconductor Corporation (a) .................................... 262,500
-----------
$ 460,375
ENTERTAINMENT AND LEISURE - 1.62% of Total Net Assets
6,000 Disney (Walt) Company .................................................... $ 217,875
3,000 Harcourt General, Inc. ................................................... 120,000
10,000 Harrah's Entertainment, Inc. (a) ......................................... 199,375
20,000 Hilton Hotels Corporation (a) ............................................. 168,750
5,000 Tribune Company .......................................................... 210,938
-----------
$ 916,938
FINANCIAL SERVICES - 2.52% of Total Net Assets
6,000 Bank of New York, Inc. .................................................... $ 243,750
14,386 Bank of Petaluma ... ...................................................... 359,650
5,000 Bear Stearns Companies, Inc. ............................................. 206,250
3,000 Morgan Stanley Dean Witter & Company ..................................... 198,750
5,000 Schwab (Charles) Corporation ............................................. 180,313
3,000 State Street Corporation ................................................. 240,563
-----------
$ 1,429,276
MANUFACTURING - 2.33% of Total Net Assets
3,000 Harley-Davidson, Inc. ..................................................... $ 210,563
4,000 Illinois Tool Works, Inc. ................................................ 234,000
15,000 Mattel, Inc. ............................................................. 156,563
2,000 NACCO Industries, Inc. Class A ........................................... 101,500
8,000 NACCO Industries, Inc. Class B ........................................... 406,000
5,000 Parker-Hannifin Corporation .............................................. 216,250
-----------
$ 1,324,876
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 2000
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
OIL AND OILFIELD SERVICES - .72% of Total Net Assets
40,000 Frontier Oil Corporation (a) .............................................. $ 305,000
30,000 Parker Drilling Company (a) ............................................... 105,000
-----------
$ 410,000
PHARMACEUTICALS - 1.05% of Total Net Assets
6,000 Abbott Laboratories ....................................................... $ 195,750
2,000 Biogen, Inc. (a) .......................................................... 172,500
4,000 Genzyme Corporation (General Division) (a) ................................ 208,000
756 Genzyme Corporation Molecular Oncology (a) ................................. 5,578
716 Genzyme Corporation Surgical Products (a) .................................. 7,250
1,245 Genzyme Corporation Tissue Repair (a) ..................................... 4,980
-----------
$ 594,058
RETAIL - .62% of Total Net Assets
4,000 Costco Wholesale Corporation (a) .......................................... $ 195,750
15,000 Toys "R" Us, Inc. (a) ...................................................... 154,688
-----------
$ 350,438
TRANSPORTATION - .55% of Total Net Assets
3,000 Kansas City Southern Industries, Inc. ..................................... $ 207,563
5,000 M. S. Carriers, Inc. (a) ................................................... 107,500
-----------
$ 315,063
MISCELLANEOUS - .46% of Total Net Assets
5,000 Lockheed Martin Corporation ............................................... $ 93,750
3,000 Temple-Inland, Inc. ....................................................... 167,813
-----------
$ 261,563
-----------
Total Aggressive Growth Stock Investments (Cost $2,867,076) $ 9,106,930
-----------
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 2000
<CAPTION>
Principal Amount Market Value
- ---------------- ------------
<C> <S> <C>
DOLLAR ASSETS - 34.01% of Total Net Assets
CORPORATE BONDS - 4.61% of Total Assets
$ 200,000 7.700% American Home Products Corporation, 02-15-00 ........................ $ 200,214
200,000 5.750% Aluminum Company of America, Inc., 02-01-01 ......................... 197,638
200,000 5.650% Ameritech Capital Funding Corporation, 01-15-01 ..................... 197,664
200,000 8.875% Capital Cities / ABC, Inc., 12-15-00 ................................ 203,036
200,000 6.250% Dresser Industries, Inc., 06-01-00 .................................. 199,968
200,000 9.375% GTE Corporation, 12-01-00 ........................................... 203,532
200,000 5.850% Gannett Company, Inc., 05-01-00 ..................................... 199,848
200,000 8.375% General Electric Capital Corporation, 03-01-01 ...................... 202,874
200,000 6.375% International Business Machines Corporation, 06-15-00 ............... 200,110
200,000 9.875% May Department Stores Company, 06-15-00 ............................. 202,442
200,000 8.250% McDonnell Douglas Corporation, 07-01-00 ............................. 201,396
200,000 8.375% Mobil Corporation, 02-12-01 ......................................... 202,656
200,000 8.750% Pacific Gas & Electric Company, 01-01-01 ............................ 203,002
------------
$ 2,614,380
------------
UNITED STATES TREASURY SECURITIES - 29.40% of Total Net Assets
41,000,000 United States Treasury bond strips (Principal only) 6.727%, 05-15-18(e) ... $ 12,226,610
800,000 United States Treasury bonds 6.250%, 08-15-23 ............................ 763,504
1,000,000 United States Treasury notes 6.375%, 01-31-02 ............................ 995,625
750,000 United States Treasury bills 3.336%, 02-03-00 (e).......................... 749,792
2,000,000 United States Treasury bills 4.682%, 07-20-00 (e).......................... 1,955,517
------------
$ 16,691,048
------------
Total Dollar Assets (Cost $24,485,769) $ 19,305,428
------------
Total Portfolio - 100.18% of total net assets (identified cost $56,266,373)(f) $ 56,872,698
Liabilities, less other assets (.18% of total net assets) (100,040)
------------
Net assets applicable to outstanding shares $ 56,772,658
============
<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 $47,644,132.
</FN>
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE TREASURY BILL PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 2000
<CAPTION>
Principal Amount Market Value
- ---------------- ------------
<C> <S> <C>
UNITED STATES TREASURY SECURITIES - 98.73% of Total Net Assets
$20,000,000 United States Treasury notes 5.500%, 02-29-00 ............................. $ 20,000,000
20,000,000 United States Treasury notes 5.500%, 03-31-00 ............................. 20,000,200
20,000,000 United States Treasury notes 6.750%, 04-30-00 ............................. 20,046,000
20,000,000 United States Treasury notes 5.500%, 05-31-00 ............................. 19,981,800
------------
Total Portfolio - 98.73% of total net assets (identified cost $80,057,149)(a) $ 80,028,000
Other assets, less liabilities (1.27% of total net assets) 1,031,365
------------
Net assets applicable to outstanding shares $ 81,059,365
============
<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, 2000
<CAPTION>
Principal Amount Market Value
- ---------------- ------------
<C> <S> <C>
CORPORATE BONDS - 91.39% of Total Net Assets
AEROSPACE - 4.46% of Total Net Assets
$ 800,000 8.250% McDonnell Douglas Corporation, 07-01-00 ................................ $ 805,584
------------
$ 805,584
800,000 ALUMINUM - 4.38% of Total Net Assets
5.750% Aluminum Company of America, Inc., 02-01-01 ............................ $ 790,552
------------
$ 790,552
BROADCASTING - 4.50% of Total Net Assets
800,000 8.875% Capital Cities / ABC, Inc., 12-15-00 ................................... $ 812,144
------------
$ 812,144
DATA PROCESSING - 4.43% of Total Net Assets
800,000 6.375% International Business Machines Corporation, 06-15-00 .................. $ 800,440
------------
$ 800,440
ELECTRIC UTILITIES - 4.49% of Total Net Assets
800,000 8.750% Pacific Gas & Electric Company, 01-01-01 ............................... $ 812,008
------------
$ 812,008
FINANCIAL SERVICES - 8.87% of Total Net Assets
800,000 5.650% Ameritech Capital Funding Corporation, 01-15-01 ........................ $ 790,656
800,000 8.375% General Electric Capital Corporation, 03-01-01 ......................... 811,496
------------
$ 1,602,152
HOUSEHOLD PRODUCTS - 5.65% of Total Net Assets
1,000,000 8.625% Kimberly-Clark Corporation, 05-01-01 ................................... $ 1,019,830
------------
$ 1,019,830
MANUFACTURING - 5.68% of Total Net Assets
1,000,000 9.125% General Motors Corporation, 07-15-01.................................... $ 1,025,280
------------
$ 1,025,280
OIL AND OILFIELD SERVICES - 8.91% of Total Net Assets
800,000 6.250% Dresser Industries, Inc., 06-01-00 ..................................... $ 799,872
800,000 8.375% Mobil Corporation, 02-12-01 ........................................... 810,624
------------
$ 1,610,496
PHARMACEUTICALS - 9.97% of Total Net Assets
800,000 7.700% American Home Products Corporation, 02-15-00 ........................... $ 800,856
1,000,000 5.875% Upjohn Company, 04-15-00................................................ 999,470
------------
$ 1,800,326
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE VERSATILE BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 2000
<CAPTION>
Principal Amount Market Value
- ---------------- ------------
<C> <S> <C>
PUBLISHING - 4.42% of Total Net Assets
$ 800,000 5.850% Gannett Company, Inc., 05-01-00 ....................................... $ 799,392
------------
$ 799,392
RETAIL - 10.12% of Total Net Assets
800,000 9.875% May Department Stores Company, 06-15-00 ............................... $ 809,768
1,000,000 8.625% Wal-Mart Stores, Inc., 04-01-01 ........................................ 1,018,960
------------
$ 1,828,728
TELECOMMUNICATIONS - 10.04% of Total Net Assets
800,000 9.375% GTE Corporation, 12-01-00 .............................................. $ 814,128
1,000,000 6.125% Southwestern Bell Telephone Company, 03-01-00 .......................... 1,000,300
------------
$ 1,814,428
TOBACCO - 5.47% of Total Net Assets
1,000,000 7.250% Philip Morris Companies, Inc., 09-15-01 ................................ $ 989,100
------------
$ 989,100
------------
Total Corporate bonds (Cost $16,649,988) $ 16,510,460
------------
UNITED STATES TREASURY SECURITIES - 6.84% of Total Net Assets
1,000,000 United States Treasury notes 5.625%, 09-30-01.................................. $ 984,980
250,000 United States Treasury bills 3.336%, 02-03-00 (a) ............................. 249,931
------------
Total United States Treasury securities (Cost $1,245,885) $ 1,234,911
------------
Total Portfolio - 98.23% of total net assets (identified cost $17,895,873)(b) $ 17,745,371
Other assets, less liabilities (1.77% of total net assets) 319,238
------------
Net assets applicable to outstanding shares $ 18,064,609
============
<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 AGGRESSIVE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 2000
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
AGGRESSIVE GROWTH STOCK INVESTMENTS - 100.34% of Total Net Assets
CHEMICALS - 2.57% of Total Net Assets
12,000 Air Products & Chemicals, Inc. ............................................ $ 355,500
15,000 Wellman, Inc. ............................................................. 260,625
------------
$ 616,125
COMPUTER SOFTWARE - 3.16% of Total Net Assets
11,000 Computer Associates International, Inc. ................................... $ 755,563
------------
$ 755,563
CONSTRUCTION - 4.02% of Total Net Assets
10,000 Fluor Corporation ......................................................... $ 399,375
15,000 Johns Manville Corporation ............................................... 167,813
24,000 Ryland Group, Inc. ........................................................ 394,500
------------
$ 961,688
DATA PROCESSING - 5.82% of Total Net Assets
8,000 Hewlett-Packard Company ................................................... $ 866,000
4,000 SCI Systems, Inc. (a) ..................................................... 288,000
6,000 Seagate Technology, Inc. (a) .............................................. 240,375
------------
$ 1,394,375
ELECTRICAL AND ELECTRONICS - 7.09% of Total Net Assets
10,800 Intel Corporation ........................................................ $ 1,068,525
12,000 National Semiconductor Corporation (a) .................................... 630,000
------------
$ 1,698,525
ENTERTAINMENT AND LEISURE - 10.39% of Total Net Assets
15,900 Disney (Walt) Company ..................................................... $ 577,369
9,000 Harcourt General, Inc. .................................................... 360,000
4,532 Hilton Hotels Corporation (a) ............................................. 38,239
16,000 Tribune Company .......................................................... 675,000
15,000 Viacom, Inc. Class A (a) .................................................. 837,188
------------
$ 2,487,796
FINANCIAL SERVICES - 17.76% of Total Net Assets
18,000 Bank of New York, Inc. .................................................... $ 731,250
14,000 Bear Stearns Companies, Inc. .............................................. 577,500
16,000 Morgan Stanley Dean Witter & Company ...................................... 1,060,000
30,000 Schwab (Charles) Corporation .............................................. 1,081,875
10,000 State Street Corporation .................................................. 801,875
------------
$ 4,252,500
MANUFACTURING - 8.48% of Total Net Assets
13,000 Dana Corporation ......................................................... $ 305,500
10,000 Harley-Davidson, Inc. ..................................................... 701,875
8,600 Illinois Tool Works, Inc. ................................................. 503,100
12,000 Parker-Hannifin Corporation ............................................... 519,000
------------
$ 2,029,475
</TABLE>
Continued on following page.
<PAGE>
<TABLE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE AGGRESSIVE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
January 31, 2000
<CAPTION>
Number
Of Shares Market Value
--------- ------------
<C> <S> <C>
OIL AND OILFIELD SERVICES - 3.94% of Total Net Assets
105,200 Frontier Oil Corporation (a) .............................................. $ 802,150
40,000 Parker Drilling Company (a) ............................................... 140,000
------------
$ 942,150
PHARMACEUTICALS - 19.40% of Total Net Assets
28,000 Amgen, Inc. (a) .......................................................... $ 1,783,250
20,000 Biogen, Inc. (a) .......................................................... 1,725,000
7,000 Chiron Corporation (a) .................................................... 310,625
15,000 Genzyme Corporation (General Division) (a) ................................ 780,000
1,620 Genzyme Corporation Molecular Oncology (a) ................................ 11,948
2,685 Genzyme Corporation Surgical Products (a) ................................. 27,185
1,170 Genzyme Corporation Tissue Repair (a) .................................... 4,680
------------
$ 4,642,688
RETAIL - 5.37% of Total Net Assets
24,000 Costco Wholesale Corporation (a) .......................................... $ 1,174,500
5,000 Neiman Marcus Group, Inc. Class B (a) ..................................... 111,875
------------
$ 1,286,375
TRANSPORTATION - 8.97% of Total Net Assets
4,000 Alaska Air Group, Inc. (a)................................................. $ 127,500
21,000 Kansas City Southern Industries, Inc. ..................................... 1,452,938
21,000 M.S. Carriers, Inc. (a) ................................................... 451,500
2,000 UAL Corporation (a) ...................................................... 114,250
------------
$ 2,146,188
MISCELLANEOUS - 3.37% of Total Net Assets
5,000 Ionics, Inc. (a)........................................................... $ 148,125
10,000 Lockheed Martin Corporation .............................................. 187,500
10,000 Ryerson Tull, Inc. ........................................................ 190,625
5,000 Temple-Inland, Inc. ....................................................... 279,688
------------
$ 805,938
------------
Total Aggressive Growth Stock Investments (Cost $9,075,241) $ 24,019,386
------------
Principal Amount
- ----------------
UNITED STATES TREASURY SECURITIES - .21% of Total Net Assets
$ 50,000 United States Treasury bills 3.336%, 02-03-00 (b) ......................... $ 49,985
------------
Total United States Treasury securities (Cost $49,985) $ 49,985
------------
Total Portfolio - 100.55% of total net assets (identified cost $9,125,226)(c) $ 24,069,371
Liabilities, less other assets (.55% of total net assets) (131,866)
------------
Net assets applicable to outstanding shares $ 23,937,505
============
<FN>
Note:(a) Non-income producing.
(b) Interest rate represents yield to maturity.
(c) 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, 2000
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 January 31, 2000, one such investment in the Permanent
Portfolio (3.46% 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 year ended January 31, 2000, 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 .................... $ 50,899 $ - $ 1,001,193 $ -
Swiss franc assets ................. 259,177 - - -
United States Treasury securities .. 1,555,823 4,108,074 34,268 7
Other investments .................. 9,478 35,355 24,209 13,104
Dividends ............................ 494,741 - - 147,084
------------ ------------ ------------ -----------
$ 2,370,118 $ 4,143,429 $ 1,059,670 $ 160,195
============ ============ ============ ===========
</TABLE>
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 2000
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, 2000; 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 January 31, 2000.
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, 2000,
pursuant to the requirements of the Code.
At January 31, 2000, capital loss carryforwards available to offset future
realized gains, if any, were as follows: $169,011 in the Treasury Bill
Portfolio, of which $1,752, $98,561, $41,743, $5,429, $3,632, $14,264 and
$3,630 expire on January 31, 2001, January 31, 2002, January 31, 2003,
January 31, 2004, January 31, 2005, January 31, 2007 and January 31, 2008,
respectively; and $173,734 in the Versatile Bond Portfolio, of which
$86,614, $34,492, $18,906 and $33,722 expire on January 31, 2003, January
31, 2004, January 31, 2006 and January 31, 2008, respectively. There were
no capital loss carryforwards in the Permanent Portfolio or the Aggressive
Growth Portfolio. Additionally, net capital losses of $2,981 and $9,350 in
the Treasury Bill Portfolio and the Versatile Bond Portfolio, respectively,
are attributable to investment transactions that occurred after October 31,
1999 and are recognized for federal income tax purposes as arising on
February 1, 2000, the first day of each Portfolio's next taxable year.
Pursuant to the Code, 14.60% of the distributions made from investment
company taxable income in 1999 by the Permanent Portfolio qualifies for the
corporate dividends received deduction.
During the year ended January 31, 2000, the Fund's Permanent Portfolio,
Treasury Bill Portfolio, Versatile Bond Portfolio and Aggressive Growth
Portfolio incurred federal excise taxes of $24,363, $106,308, $14,487 and
$82,000, respectively, which was imposed on four percent of each
Portfolio's undistributed income and capital gains, if any. Such tax
reduced each Portfolio's net asset value, however, such undistributed
income and capital gains were retained by each Portfolio to earn further
interest, dividends and profits.
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, 2000, the Fund's Permanent
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 2000
Portfolio and Treasury Bill Portfolio reclassified $375,145 and $167,035,
respectively, from paid-in capital to undistributed net investment income
and the Fund's Versatile Bond Portfolio reclassified $425,077 from
undistributed net investment income to paid-in capital to reflect such book
and tax basis differences relating to shareholder distributions.
Additionally, the Permanent Portfolio reclassified $162,612 from
undistributed net investment income to accumulated net realized loss on
foreign currency transactions and the Aggressive Growth Portfolio
reclassified $232,229 from paid-in capital to undistributed net investment
loss, also due to these differences.
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
$18,435 at January 31, 2000. The Permanent Portfolio received no income
from this investment during the year 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 year ended January 31, 2000, 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
January 31, 2000
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 year ended January 31, 2000:
<TABLE>
<CAPTION>
Permanent Treasury Bill Versatile Bond Aggressive Growth
Portfolio Portfolio Portfolio Portfolio
------------- ------------- -------------- -----------------
<S> <C> <C> <C> <C>
Purchases................................ $ 9,769,538 None $11,562,414 $ 2,082,105
Sales.................................... 17,056,075 None 18,129,962 4,355,124
</TABLE>
6. NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS
The following is a summary of net unrealized appreciation (depreciation) of
investments at January 31, 2000 for federal income tax purposes:
<TABLE>
<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 ............................... $12,642,786 $ - $ 168 $15,253,159
Investments other than securities ....... 220,312 - - -
----------- -------- ----------- -----------
12,863,098 - 168 15,253,159
Aggregate gross unrealized depreciation
of investments with excess of tax cost
over value:
Investments in securities of unaffiliated
issuers ............................... (909,016) (29,149) (150,670) (309,014)
Investments other than securities........ (2,725,516) - - -
----------- -------- ----------- -----------
(3,634,532) (29,149) (150,670) (309,014)
----------- -------- ----------- -----------
Net unrealized appreciation (depreciation)
of investments $ 9,228,566 $(29,149) $ (150,502) $14,944,145
=========== ======== =========== ===========
</TABLE>
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 2000
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 years ended January 31, 2000 and 1999:
<CAPTION>
Permanent Portfolio
-----------------------------------------------------------------------------------
January 31, 2000 January 31, 1999
--------------------------------------- --------------------------------------
Shares Dollars Shares Dollars
---------------- ------------------- --------------- -------------------
<S> <C> <C> <C> <C>
Shares sold...................... 173,595 $ 2,587,458 325,975 $ 5,316,770
Distributions reinvested......... 179,410 3,123,527 142,118 2,651,913
------- ------------ ------- ------------
353,005 5,710,985 468,093 7,968,683
Shares redeemed.................. (671,730) (10,967,936) (620,388) (10,594,182)
------- ------------ ------- ------------
Net decrease (318,725) $ (5,256,951) (152,295) $ (2,625,499)
======= ============ ======= ============
</TABLE>
<TABLE>
<CAPTION>
Treasury Bill Portfolio
-----------------------------------------------------------------------------------
January 31, 2000 January 31, 1999
--------------------------------------- --------------------------------------
Shares Dollars Shares Dollars
---------------- ------------------- --------------- -------------------
<S> <C> <C> <C> <C>
Shares sold...................... 546,400 $ 36,808,338 719,836 $ 47,806,798
Distributions reinvested......... 39,589 2,670,274 39,785 2,689,841
------- ------------ ------- ------------
585,989 39,478,612 759,621 50,496,639
Shares redeemed.................. (761,564) (51,436,257) (784,288) (52,149,375)
------- ------------ ------- ------------
Net decrease (175,575) $(11,957,645) (24,667) $ (1,652,736)
======= ============ ======= ============
</TABLE>
<TABLE>
<CAPTION>
Versatile Bond Portfolio
-----------------------------------------------------------------------------------
January 31, 2000 January 31, 1999
--------------------------------------- ---------------------------------------
Shares Dollars Shares Dollars
---------------- ------------------- ---------------- --------------------
<S> <C> <C> <C> <C>
Shares sold...................... 277,049 $ 15,163,613 409,669 $ 22,138,246
Distributions reinvested......... 7,656 445,184 9,691 566,997
------- ------------ ------- ------------
284,705 15,608,797 419,360 22,705,243
Shares redeemed.................. (389,663) (21,362,544) (403,659) (21,805,506)
------- ------------ ------- ------------
Net increase (decrease) (104,958) $ (5,753,747) 15,701 $ 899,737
======= ============ ======= ============
</TABLE>
<TABLE>
<CAPTION>
Aggressive Growth Portfolio
-----------------------------------------------------------------------------------
January 31, 2000 January 31, 1999
--------------------------------------- ---------------------------------------
Shares Dollars Shares Dollars
---------------- ------------------- ---------------- --------------------
<S> <C> <C> <C> <C>
Shares sold...................... 30,159 $ 2,324,643 58,283 $ 3,529,499
Distributions reinvested......... - - - -
------- ------------ ------- ------------
30,159 2,324,643 58,283 3,529,499
Shares redeemed.................. (58,675) (4,424,330) (98,311) (5,789,018)
------- ------------ ------- ------------
Net decrease (28,516) $ (2,099,687) (40,028) $ (2,259,519)
======= ============ ======= ============
</TABLE>
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 2000
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 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.
Continued on following page.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 2000
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 year ended January 31, 2000.
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 Pan
(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 years ended January 31, 1992 through
2000:
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 .... 69,042 64,335 1,627 7,910
---------- ---------- ---------- ----------
$ 618,912 $ 572,195 $ 23,687 $ 57,206
========== ========== ========== ==========
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>
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<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 year:
<CAPTION>
Year ended Year ended Year ended Year ended Year ended
January 31, January 31, January 31, January 31, January 31,
2000 1999 1998 1997 1996
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 18.71 $ 19.08 $ 18.40 $ 18.80 $ 16.51
--------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income (1).............. .43 .47 .37 .52 .50
Net realized and unrealized gain (loss)
on investments and foreign
currencies ........................... (.64) - 1.01 (.41) 2.17
--------- --------- --------- --------- ---------
Total income (loss) from
investment operations (.21) .47 1.38 .11 2.67
Less distributions from:
Net investment income ................ (.29) (.20) (.34) (.42) (.38)
Net realized gain on investments (2)... (.77) (.64) (.36) (.09) -
--------- --------- --------- --------- ---------
Total distributions (1.06) (.84) (.70) (.51) (.38)
--------- --------- --------- --------- ---------
Net asset value, end of year $ 17.44 $ 18.71 $ 19.08 $ 18.40 $ 18.80
========= ========= ========= ========= =========
Total return (3) ......................... (1.11)% 2.48% 7.57% .57% 16.20%
Ratios / supplemental data:
Net assets, end of year (in thousands)... $ 56,773 $ 66,855 $ 71,099 $ 72,992 $ 76,641
========= ========= ========= ========= =========
Ratio of expenses to average net assets.. 1.47% 1.43% 1.91% 1.49% 1.35%
Ratio of net investment income
to average net assets ................. 2.39% 2.48% 1.96% 2.78% 2.85%
Portfolio turnover rate ................. 23,75% 14.05% 7.66% 12.29% 9.96%
<FN>
(l) Net investment income is based on average net assets per share outstanding
during the year.
(2) Capital gain distribution pursuant to Section 852(b)(3) of the Code.
(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 TREASURY BILL PORTFOLIO
<TABLE>
Financial highlights for the Treasury Bill Portfolio
For each share of capital stock outstanding throughout each year:
<CAPTION>
Year ended Year ended Year ended Year ended Year ended
January 31, January 31, January 31, January 31, January 31,
2000 1999 1998 1997 1996
----------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 67.97 $ 67.56 $ 67.55 $ 67.84 $ 66.40
--------- --------- ---------- ---------- ----------
Income from investment operations:
Net investment income (1)(2)................ 2.51 2.72 2.69 2.84 3.22
Net realized and unrealized gain (loss)
on investments (3) ........................ (.01) .03 .06 .01 .06
--------- --------- ---------- ---------- ----------
Total income from investment operations 2.50 2.75 2.75 2.85 3.28
Less distributions from:
Net investment income ..................... (2.59) (2.34) (2.74) (3.14) (1.84)
--------- --------- ---------- ---------- ----------
Total distributions (2.59) (2.34) (2.74) (3.14) (1.84)
--------- --------- ---------- ---------- ----------
Net asset value, end of year $ 67.88 $ 67.97 $ 67.56 $ 67.55 $ 67.84
========= ========= ========== ========== ==========
Total return (4) ............................... 3.70% 4.09% 4.09% 4.23% 4.95%
Ratios / supplemental data:
Net assets, end of year (in thousands) ...... $ 81,059 $ 93,095 $ 94,200 $ 105,342 $ 114,667
========= ========= ========== ========== ==========
Ratio of expenses to average net assets (2) .. 1.02% .96% 1.20% .90% .82%
Ratio of net investment income
to average net assets ..................... 3.70% 4.01% 3.98% 4.19% 4.79%
<FN>
(1) Net investment income is based on average net assets per share outstanding
during the year.
(2) Due to the waiver of advisory fees, the ratio of expenses to average net
assets was reduced by .50% for the year ended January 31, 2000 and .50%,
.50%, .50% and .50% for the years ended January 31,1999, 1998, 1997 and
1996, respectively. Without this waiver, the net investment income per
share would have been $2.01 for the year ended January 31, 2000 and $2.24,
$2.19, $2.37 and $2.78 for the years 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>
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 year:
<CAPTION>
Year ended Year ended Year ended Year ended Year ended
January 31, January 31, January 31, January 31, January 31,
2000 1999 1998 1997 1996
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 58.83 $ 58.58 $ 57.24 $ 56.85 $ 54.90
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income (1)(2) ............ 2.44 2.77 2.87 2.94 2.91
Net realized and unrealized gain (loss)
on investments (3) .................... (.58) (.08) .17 (.34) 1.05
--------- --------- --------- --------- ---------
Total income from investment operations 1.86 2.69 3.04 2.60 3.96
Less distributions from:
Net investment income ................... (2.31) (2.44) (1.70) (2.21) (2.01)
--------- --------- --------- --------- ---------
Total distributions (2.31) (2.44) (1.70) (2.21) (2.01)
--------- --------- --------- --------- ---------
Net asset value, end of year $ 58.38 $ 58.83 $ 58.58 $ 57.24 $ 56.85
========= ========= ========= ========= =========
Total return (4) ............................ 3.18% 4.61% 5.33% 4.58% 7.24%
Ratios / supplemental data:
Net assets, end of year (in thousands)...... $ 18,065 $ 24,377 $ 23,355 $ 21,345 $ 20,137
========= ========= ========= ========= =========
Ratio of expenses to average net assets (2). 1.01% 1.08% 1.01% .97% .89%
Ratio of net investment income
to average net assets ................... 4.16% 4.72% 4.95% 5.16% 5.21%
Portfolio turnover rate ................... 59.52% 68.21% 55.53% 102.29% 51.64%
<FN>
(1) Net investment income is based on average net assets per share outstanding
during the year.
(2) Due to the waiver of advisory fees, the ratio of expenses to average net
assets was reduced by .37% for the year ended January 31, 2000 and .37%,
.38%, .38% and .37% for the years ended January 31 ,1999, 1998, 1997 and
1996, respectively. Without this waiver, the net investment income per
share would have been $2.14 for the year ended January 31, 2000 and $2.48,
$2.59, $2.66 and $2.65 for the years 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>
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 year:
<CAPTION>
Year ended Year ended Year ended Year ended Year ended
January 31, January 31, January 31, January 31, January 31,
2000 1999 1998 1997 1996
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 69.13 $ 56.24 $ 47.66 $ 40.65 $ 31.61
---------- ---------- ---------- ---------- ---------
Income (loss) from investment operations:
Net investment income (loss)(1).................... (.78) (.41) (.31) .26 (.02)
Net realized and unrealized gain (loss)
on investments ................................. 15.26 13.30 11.97 7.05 10.68
---------- ---------- ---------- ---------- ---------
Total income from investment operations 14.48 12.89 11.66 7.31 10.66
Less distributions from:
Net investment income ............................ - - (.19) (.25) (.11)
Net realized gain on investments (2)............... - - (2.89) (.05) (1.51)
---------- ---------- ---------- ---------- ---------
Total distributions - - (3.08) (.30) (1.62)
---------- ---------- ---------- ---------- ---------
Net asset value, end of year $ 83.61 $ 69.13 $ 56.24 $ 47.66 $ 40.65
========== ========== ========== ========== =========
Total return (3) ..................................... 20.95% 22.92% 24.41% 18.00% 33.78%
Ratios / supplemental data:
Net assets, end of year (in thousands) ............. $ 23,938 $ 21,764 $ 19,955 $ 15,417 $ 11,067
========== ========== ========== ========== =========
Ratio of expenses to average net assets ............. 1.73% 1.39% 1.46% 1.33% 1.19%
Ratio of net investment income (loss) to average net
assets.............................................. (1.02)% (.65)% (.60)% .59% (.06)%
Portfolio turnover rate ............................. 9.38% 2.73% 2.15% 21.32% 18.94%
<FN>
(1) Net investment income (loss) is based on average net assets per share
outstanding during the year.
(2) Capital gain distribution pursuant to Section 852(b)(3) of the Code.
(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.
PERMANENT PORTFOLIO
(Graph omitted, see description on page 33)
--- Permanent Portfolio
... United States Treasury bills*
* Three-month United States Treasury bills are short-term loans to
the United States Government with a maturity of three months.
Treasury bills are full-faith-and-credit obligations of the
United States Treasury and are generally regarded as being free
of any risk of default.
See page 33 for explanation of graphs.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
VERSATILE BOND PORTFOLIO
(Graph omitted, see description on page 33)
--- Versatile Bond Portfolio
... Salomon Smith Barney AAA/AA 1-3 Year Corporate Index*
* The Salomon Smith Barney AAA/AA 1-3 Year Corporate Index is a
component of the Salomon Smith Barney Broad Investment-Grade
(BIG) Bond Index. It is market-capitalization weighted and
includes bonds rated AAA or AA by Standard & Poor's or Moody's
with maturities of one to three years and a minimum amount
outstanding of $100 million.
See page 33 for explanation of graphs.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
Aggressive Growth Portfolio
(Graph omitted, see description on page 33)
--- Aggressive Growth Portfolio
... Dow Jones Industrial Average*
* The Dow Jones Industrial Average is an average of the stock
prices of 30 large companies and represents a widely recognized
unmanaged portfolio of common stocks.
See following page for explanation of graphs.
<PAGE>
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
The graphs on pages 30 through 32 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 the Aggressive Growth Portfolio, and
of the most recently completed fiscal years since the commencement of investment
operations for 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
comparable broad-based securities market indicies. A graph is not provided for
the Treasury Bill Portfolio because it is a money market portfolio. 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> <C>
1 year ended January 31, 2000 (1.16)% 1 year ended January 31, 2000 3.65%
5 years ended January 31, 2000 4.90% 5 years ended January 31, 2000 4.15%
10 years ended January 31, 2000 4.42% 10 years ended January 31, 2000 4.10%
15 years ended January 31, 2000 5.46% 12 years 250 days ended
17 years 62 days ended January 31, 2000 4.59%
January 31, 2000 4.52%
Aggressive Growth Portfolio(3) Versatile Bond Portfolio (4)(6)
- --------------------------------------- -------------------------------------
<C> <C> <C> <C>
1 year ended January 31, 2000 20.89% 1 year ended January 31, 2000 3.13%
5 years ended January 31, 2000 23.83% 5 years ended January 31, 2000 4.92%
10 years ended January 31, 2000 16.94% 8 years 127 days ended
10 years 29 days ended January 31, 2000 4.52%
January 31, 2000 16.79%
</TABLE>
- -----------------------
(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 January 31,
2000, assuming reinvestment of all dividends and distributions and
deduction of all fees and expenses except the $35 one-time account start-up
fee, was 3.07%, and effective yield was 3.12%.
(6) The 30-day SEC standardized yield for the Versatile Bond Portfolio at
January 31, 2000, 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
4.47%.
<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 throughout 1999 was more than offset by weakness in gold assets, the
stocks of real estate investment trusts, United States Treasury securities
and the relative value of the Swiss franc. Accordingly, the Portfolio
achieved a total return of (1.11%) for the year ended January 31, 2000, as
compared to an annualized inflation rate of 2.70% 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 3.70% and maintained an average maturity of
between 60 and 90 days throughout the year ended January 31, 2000. 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 3.18% while
maintaining an average maturity of between 270 and 450 days throughout the
year ended January 31, 2000. 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 20.95% for the year
ended January 31, 2000, as compared to 18.67% for the Dow Jones Industrial
Average and 10.33% the Standard and Poor's 500 Stock Index during 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
Tait, Weller & Baker
Eight Penn Center Plaza
Philadelphia, Pennsylvania 19103
INVESTOR'S INFORMATION OFFICE
P.O. Box 5847 ANNUAL REPORT
Austin, Texas 78763 January 31, 2000
1 (800)531-5142 Nationwide
Local 1 (512)453-7558
