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Previous: CENTENNIAL GOVERNMENT TRUST /CO/, 24F-2NT, 2000-09-29 |
Next: SYMPHONY TELECOM INTERNATIONAL INC, 8-K, 2000-09-29 |
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
SEMI-ANNUAL REPORT FOR THE SIX MONTHS ENDED JULY 31, 2000
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
July 31, 2000
(Unaudited)
ASSETS AND LIABILITIES
Treasury Versatile Aggressive
Permanent Bill Bond Growth
Portfolio Portfolio Portfolio Portfolio
------------ ------------ ------------ ------------
ASSETS
Investments at market value (Notes 1, 2, 5 and 6):
Investments other than securities:
Gold assets ............................................ $ 11,249,386 $ -- $ -- $ --
Silver assets .......................................... 2,904,124 -- -- --
------------ ------------ ------------ ------------
14,153,510 -- -- --
Swiss franc bonds ......................................... 5,099,790 -- -- --
Stocks of United States and foreign real estate and
natural resource companies ............................. 8,856,440 -- -- --
Aggressive growth stock investments ....................... 8,855,875 -- -- 24,216,253
Corporate bonds ........................................... 2,445,229 -- 14,585,195 --
United States Treasury securities ......................... 15,914,198 79,771,552 1,090,540 --
------------ ------------ ------------ ------------
Total investments (identified cost $53,638,649;
$79,793,517; $15,747,980 and $8,008,623, respectively) 55,325,042 79,771,552 15,675,735 24,216,253
Cash ........................................................ 206,227 -- -- 38,093
Accounts receivable for shares of the portfolio sold ........ 38,530 236,133 -- 5,364
Accrued interest, dividends and foreign taxes receivable .... 542,367 1,114,038 306,705 5,160
Due from investment adviser ................................. -- -- 2,278 --
------------ ------------ ------------ ------------
Total assets 56,112,166 81,121,723 15,984,718 24,264,870
LIABILITIES
Bank overdraft .............................................. -- 9,003 21,793 --
Accounts payable for shares of the portfolio redeemed ....... 55,065 43,909 -- 150,978
Accrued investment advisory fee ............................. 29,961 19,232 -- 10,023
Accrued directors' and officers' fees and expenses .......... 15,015 22,029 3,991 8,222
Accrued excise tax .......................................... 14,959 57,841 8,816 --
------------ ------------ ------------ ------------
Total liabilities 115,000 152,014 34,600 169,223
------------ ------------ ------------ ------------
Net assets applicable to outstanding shares $ 55,997,166 $ 80,969,709 $ 15,950,118 $ 24,095,647
============ ============ ============ ============
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 - 3,080,428; 1,165,296; 265,941 and
274,442 shares, respectively ................ $ 3,080 $ 1,165 $ 266 $ 274
Paid-in capital ............................................. 44,987,234 80,059,030 15,819,831 5,992,778
------------ ------------ ------------ ------------
44,990,314 80,060,195 15,820,097 5,993,052
Undistributed net investment income (loss) (Note 1) ......... 7,445,642 1,108,056 404,172 (212,738)
Accumulated net realized gain (loss) on investments ......... 1,913,372 (176,577) (201,906) 2,107,703
Accumulated net realized gain on foreign currency
transactions ........................................... 110 -- -- --
Net unrealized appreciation (depreciation) of
investments ............................................ 1,686,393 (21,965) (72,245) 16,207,630
Net unrealized depreciation on translation of assets
and liabilities in foreign currencies .................. (38,665) -- -- --
------------ ------------ ------------ ------------
Net assets applicable to outstanding shares $ 55,997,166 $ 80,969,709 $ 15,950,118 $ 24,095,647
============ ============ ============ ============
Net asset value per share $18.18 $69.48 $59.98 $87.80
====== ====== ====== ======
See accompanying notes.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
STATEMENTS OF OPERATIONS
Six months ended July 31, 2000
(Unaudited)
Treasury Versatile Aggressive
Permanent Bill Bond Growth
Portfolio Portfolio Portfolio Portfolio
----------- ----------- ----------- -----------
Investment income (Note 1):
Interest ........................................................ $ 927,645 $ 2,295,998 $ 475,500 $ 18
Dividends ....................................................... 269,298 -- -- 66,576
----------- ----------- ----------- -----------
1,196,943 2,295,998 475,500 66,594
Expenses (Notes 3 and 8):
Investment advisory fee ......................................... 320,478 459,753 93,090 137,859
Directors' fees and expenses .................................... 18,612 29,048 6,734 9,479
Officers' salary expense ........................................ 28,844 41,333 8,418 12,406
Excise tax ...................................................... 14,959 57,841 8,816 --
Regulatory expense .............................................. 4,718 4,247 -- 472
----------- ----------- ----------- -----------
Total expenses 387,611 592,222 117,058 160,216
Less waiver of investment advisory fee .......................... -- 204,633 31,085 --
----------- ----------- ----------- -----------
Net expenses 387,611 387,589 85,973 160,216
----------- ----------- ----------- -----------
Net investment income (loss) 809,332 1,908,409 389,527 (93,622)
----------- ----------- ----------- -----------
Realized and unrealized gain on investments
and foreign currency (Notes 1, 2, 5 and 6):
Net realized gain (loss) on:
Investments in unaffiliated issuers ............................. 490,593 (4,585) (18,822) 15,779
Foreign currency transactions ................................... 110 -- -- --
----------- ----------- ----------- -----------
490,703 (4,585) (18,822) 15,779
Change in unrealized appreciation (depreciation) of:
Investments ..................................................... 1,080,068 7,184 78,257 1,263,485
Translation of assets and liabilities in foreign currencies ..... 1,726 -- -- --
----------- ----------- ----------- -----------
Net realized and unrealized gain on investments
and foreign currency 1,572,497 2,599 59,435 1,279,264
Net increase in net assets resulting ----------- ----------- ----------- -----------
from operations $ 2,381,829 $ 1,911,008 $ 448,962 $ 1,185,642
=========== =========== =========== ===========
See accompanying notes.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
Permanent Portfolio Treasury Bill Portfolio
---------------------------- ---------------------------
Six Six
months ended Year ended months ended Year ended
July 31, January 31, July 31, January 31,
2000 2000 2000 2000
(Unaudited) (Unaudited)
------------ ------------ ------------ ------------
Operations:
Net investment income (loss) ...................................... $ 809,332 $ 1,467,209 $ 1,908,409 $ 3,247,205
Net realized gain (loss) on investments ........................... 490,593 1,460,678 (4,585) (3,573)
Net realized gain (loss) on foreign currency transactions ......... 110 (268,067) -- --
Change in unrealized appreciation (depreciation) of investments ... 1,080,068 (3,335,857) 7,184 (34,067)
Change in unrealized appreciation (depreciation) on translation
of assets and liabilities in foreign currencies ................ 1,726 (37,472) -- --
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting from operations 2,381,829 (713,509) 1,911,008 3,209,565
Equalization on shares issued and redeemed: ......................... (403,882) (732,742) (36,390) (455,251)
Distributions to shareholders from:
Net investment income ............................................. -- (924,178) -- (2,832,534)
Net realized gain on investments .................................. -- (2,454,747) -- --
Capital stock transactions exclusive of amounts allocated to
undistributed net investment income (Note 7): ..................... (2,753,439) (5,256,951) (1,964,274) (11,957,645)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets (775,492) (10,082,127) (89,656) (12,035,865)
Net assets at beginning of period 56,772,658 66,854,785 81,059,365 93,095,230
------------ ------------ ------------ ------------
Net assets at end of period (including undistributed net
investment income (loss) of $7,445,642 and $7,437,661;
$1,108,056 and $6,209; $404,172 and $615,981; $(212,738)
and $(200,014), respectively) $ 55,997,166 $ 56,772,658 $ 80,969,709 $ 81,059,365
============ ============ ============ ============
Continued on following page.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
(continued from previous page)
Versatile Bond Portfolio Aggressive Growth Portfolio
---------------------------- ----------------------------
Six Six
months ended Year ended months ended Year ended
July 31, January 31, July 31, January 31,
2000 2000 2000 2000
(Unaudited) (Unaudited)
------------ ------------ ------------ ------------
Operations:
Net investment income (loss) ...................................... $ 389,527 $ 852,941 $ (93,622) $ (229,379)
Net realized gain (loss) on investments ........................... (18,822) (43,072) 15,779 2,116,581
Net realized gain (loss) on foreign currency transactions ......... -- -- -- --
Change in unrealized appreciation (depreciation) of investments ... 78,257 (184,947) 1,263,485 2,385,745
Change in unrealized appreciation (depreciation) on translation
of assets and liabilities in foreign currencies ................ -- -- -- --
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting from operations 448,962 624,922 1,185,642 4,272,947
Equalization on shares issued and redeemed: ......................... (168,670) (702,166) -- --
Distributions to shareholders from:
Net investment income ............................................. -- (481,767) -- --
Net realized gain on investments .................................. -- -- -- --
Capital stock transactions exclusive of amounts allocated to
undistributed net investment income (Note 7): ..................... (2,394,783) (5,753,747) (1,027,500) (2,099,687)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets ............................... (2,114,491) (6,312,758) 158,142 2,173,260
Net assets at beginning of period ................................... 18,064,609 24,377,367 23,937,505 21,764,245
------------ ------------ ------------ ------------
Net assets at end of period (including undistributed net
investment income (loss) of $7,445,642 and $7,437,661;
$1,108,056 and $6,209; $404,172 and $615,981; $(212,738)
and $(200,014), respectively) $ 15,950,118 $ 18,064,609 $ 24,095,647 $ 23,937,505
============ ============ ============ ============
See accompanying notes.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 2000
(Unaudited)
Quantity Market Value
---------------- ------------
GOLD ASSETS - 20.09% of Total Net Assets
11,613 Troy Oz. Gold bullion (a) ......................................................... $ 3,214,387
27,883 Coins One-ounce gold coins (a) .................................................. 7,988,480
4,297 Units United States Gold Trust (a)(b) ........................................... 46,519
------------
Total Gold Assets (Cost $14,043,295) $ 11,249,386
------------
SILVER ASSETS - 5.19% of Total Net Assets
321,246 Troy Oz. Silver bullion (a) ........................................................ $ 1,607,834
379 Bags Silver coins (a) .......................................................... 1,296,290
------------
Total Silver Assets (Cost $2,994,572) $ 2,904,124
------------
Principal Amount SWISS FRANC ASSETS - 9.11% of Total Net Assets
----------------
CHF 3,900,000 6.500% Swiss Confederation bonds, 04-10-04 ................................ $ 2,543,895
CHF 4,000,000 5.500% Swiss Confederation bonds, 01-06-05 ................................ 2,555,895
------------
Total Swiss Franc Assets (Cost $5,830,906) $ 5,099,790
------------
Number STOCKS OF UNITED STATES AND FOREIGN REAL ESTATE AND NATURAL
Of Shares RESOURCE COMPANIES - 15.82% of Total Net Assets
---------
NATURAL RESOURCES - 6.52% of Total Net Assets
20,000 Broken Hill Proprietary, Ltd. (c) ......................................... $ 421,250
12,000 Burlington Resources, Inc. ................................................ 391,500
30,000 Forest Oil Corporation (a) ................................................ 386,250
25,000 Inco, Ltd.(a) ............................................................. 367,188
8,000 Phelps Dodge Corporation .................................................. 325,500
25,000 Pogo Producing Company .................................................... 496,875
50,000 Santa Fe Snyder Corporation (a) ........................................... 500,000
8,000 Texaco, Inc. .............................................................. 395,500
8,000 Weyerhaeuser Company ...................................................... 365,500
------------
$ 3,649,563
Continued on following page.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 2000
(Unaudited)
Number
Of Shares Market Value
--------- ------------
REAL ESTATE - 9.30% of Total Net Assets
22,000 Archstone Communities Trust ................................................ $ 570,625
20,000 BRE Properties, Inc. Class A ............................................... 648,750
31,000 Burnham Pacific Properties, Inc. ........................................... 217,000
20,000 Federal Realty Investment Trust ............................................ 427,500
35,000 IRT Property Company ....................................................... 312,813
18,000 MGI Properties ............................................................. 40,500
21,000 New Plan Excel Realty Trust, Inc. .......................................... 324,188
22,000 Pennsylvania Real Estate Investment Trust .................................. 387,750
11,000 Texas Pacific Land Trust ................................................... 437,250
40,000 United Dominion Realty Trust, Inc. ......................................... 460,000
29,000 Urstadt Biddle Properties, Inc. ............................................ 201,188
29,000 Urstadt Biddle Properties, Inc. Class A .................................... 219,313
30,000 Washington Real Estate Investment Trust .................................... 592,500
30,000 Western Properties Trust ................................................... 367,500
-----------
$ 5,206,877
-----------
Total Stocks of United States and Foreign Real Estate and Natural
Resource Companies (Cost $6,044,755) $ 8,856,440
-----------
AGGRESSIVE GROWTH STOCK INVESTMENTS - 15.81% of Total Net Assets
CHEMICALS - .68% of Total Net Assets
7,000 Air Products and Chemicals, Inc. ........................................... $ 233,625
10,000 Wellman, Inc. ............................................................... 146,250
-----------
$ 379,875
COMPUTER SOFTWARE - 3.75% of Total Net Assets
6,000 Autodesk, Inc. .............................................................. $ 129,750
1 Symantec Corporation warrant (a)(d) ......................................... 1,972,145
-----------
$ 2,101,895
CONSTRUCTION - .20% of Total Net Assets
9,000 Johns Manville Corporation .................................................. $ 115,875
-----------
$ 115,875
Continued on following page.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 2000
(Unaudited)
Number
Of Shares Market Value
--------- ------------
DATA PROCESSING - .90% of Total Net Assets
762 Agilent Technologies, Inc. (a) ............................................ $ 31,052
2,000 Hewlett-Packard Company ................................................... 218,375
5,000 Seagate Technology, Inc. (a) .............................................. 253,438
-----------
$ 502,865
ELECTRICAL AND ELECTRONICS - .80% of Total Net Assets
4,000 Intel Corporation ......................................................... $ 267,000
5,000 National Semiconductor Corporation (a) .................................... 180,938
-----------
$ 447,938
ENTERTAINMENT AND LEISURE - 1.45% of Total Net Assets
6,000 Disney (Walt) Company ..................................................... $ 232,125
3,000 Harcourt General, Inc ..................................................... 165,563
10,000 Harrah's Entertainment, Inc. (a) .......................................... 250,625
5,000 Tribune Company ........................................................... 162,500
-----------
$ 810,813
FINANCIAL SERVICES - 3.58% of Total Net Assets
5,000 Bank of New York, Inc. .................................................... $ 234,063
14,386 Bank of Petaluma .......................................................... 435,177
5,000 Bear Stearns Companies, Inc. .............................................. 269,375
3,000 Morgan Stanley Dean Witter and Company .................................... 273,750
7,500 Schwab (Charles) Corporation .............................................. 270,938
3,000 State Street Corporation .................................................. 301,125
5,000 Stilwell Financial, Inc ................................................... 220,313
-----------
$ 2,004,741
MANUFACTURING - 1.86% of Total Net Assets
6,000 Harley-Davidson, Inc. ..................................................... $ 269,250
4,000 Illinois Tool Works, Inc. ................................................. 229,000
2,000 NACCO Industries, Inc. Class A ............................................ 72,625
8,000 NACCO Industries, Inc. Class B ............................................ 290,500
5,000 Parker-Hannifin Corporation ............................................... 177,813
-----------
$ 1,039,188
Continued on following page.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 2000
(Unaudited)
Number
Of Shares Market Value
--------- ------------
OIL AND OILFIELD SERVICES - .80% of Total Net Assets
40,000 Frontier Oil Corporation (a) .............................................. $ 280,000
30,000 Parker Drilling Company (a) ............................................... 166,875
-----------
$ 446,875
PHARMACEUTICALS - .72% of Total Net Assets
2,000 Biogen, Inc. (a) .......................................................... $ 106,000
4,000 Genzyme Corporation (General Division) (a) ................................ 277,750
756 Genzyme Corporation Molecular Oncology (a) ................................. 6,804
716 Genzyme Corporation Surgical Products (a) .................................. 6,936
1,245 Genzyme Corporation Tissue Repair (a) ..................................... 6,225
-----------
$ 403,715
RETAIL - .23% of Total Net Assets
4,000 Costco Wholesale Corporation (a) .......................................... $ 130,250
-----------
$ 130,250
TRANSPORTATION - .36% of Total Net Assets
14,500 Kansas City Southern Industries, Inc. ..................................... $ 100,594
5,000 M. S. Carriers, Inc. (a) ................................................... 100,313
-----------
$ 200,907
MISCELLANEOUS - .48% of Total Net Assets
5,000 Lockheed Martin Corporation ............................................... $ 140,625
3,000 Temple-Inland, Inc. ....................................................... 130,313
-----------
$ 270,938
-----------
Total Aggressive Growth Stock Investments (Cost $2,476,969) $ 8,855,875
-----------
Continued on following page.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 2000
(Unaudited)
Principal Amount Market Value
---------------- ------------
DOLLAR ASSETS - 32.78% of Total Net Assets
CORPORATE BONDS - 4.37% of Total Net Assets
$ 200,000 5.750% Aluminum Company of America, Inc., 02-01-01 ......................... $ 198,676
200,000 5.650% Ameritech Capital Funding Corporation, 01-15-01 ..................... 198,536
250,000 8.875% Capital Cities / ABC, Inc., 12-15-00 ................................ 251,525
250,000 9.375% GTE Corporation, 12-01-00 ........................................... 251,555
250,000 8.375% General Electric Capital Corporation, 03-01-01 ...................... 251,805
200,000 6.750% Honeywell, Inc., 03-15-02 ........................................... 198,600
200,000 5.625% International Lease Finance Company, 05-01-02 ....................... 194,272
250,000 8.375% Mobil Corporation, 02-12-01 ......................................... 251,790
250,000 8.750% Pacific Gas and Electric Company, 01-01-01 .......................... 251,643
200,000 7.250% Philip Morris Companies, Inc., 09-15-01 ............................. 198,124
200,000 6.650% Times Mirror Company, 10-15-01 ...................................... 198,703
------------
$ 2,445,229
------------
UNITED STATES TREASURY SECURITIES - 28.41% of Total Net Assets
41,000,000 United States Treasury bond strips (Principal only) 6.090%, 05-15-18(e) .... $ 14,099,080
800,000 United States Treasury bonds 6.250%, 08-15-23 ............................. 816,848
1,000,000 United States Treasury notes 6.250%, 08-31-02 ............................. 998,270
------------
$ 15,914,198
------------
Total Dollar Assets (Cost $22,248,152) $ 18,359,427
------------
Total Portfolio - 98.80% of total net assets (identified cost $53,638,649)(f) $ 55,325,042
Other assets, less liabilities (1.20% of total net assets) 672,124
------------
Net assets applicable to outstanding shares $ 55,997,166
============
79,793,517 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 $44,752,229.
See accompanying notes.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE TREASURY BILL PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 2000
(Unaudited)
Principal Amount Market Value
---------------- ------------
UNITED STATES TREASURY SECURITIES - 98.52% of Total Net Assets
$20,000,000 United States Treasury notes 5.125%, 08-31-00 ............................. $ 19,987,200
20,000,000 United States Treasury notes 4.500%, 09-30-00 ............................. 19,939,000
19,000,000 United States Treasury notes 4.000%, 10-31-00 ............................. 18,896,830
20,000,000 United States Treasury notes 5.625%, 11-30-00 ............................. 19,950,000
1,000,000 United States Treasury bills 5.418%, 08-10-00 (a) ......................... 998,522
------------
Total Portfolio - 98.52% of total net assets (identified cost $79,793,517)(b) $ 79,771,552
Other assets, less liabilities (1.48% of total net assets) 1,198,157
------------
Net assets applicable to outstanding shares $ 80,969,709
============
Note: (a) Interest rate represents yield to maturity.
(b) Aggregate cost for federal income tax purposes.
See accompanying notes.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE VERSATILE BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 2000
(Unaudited)
Principal Amount Market Value
---------------- ------------
CORPORATE BONDS - 91.44% of Total Net Assets
ALUMINUM - 4.98% of Total Net Assets
$ 800,000 5.750% Aluminum Company of America, Inc., 02-01-01 ............................ $ 794,704
------------
$ 794,704
BROADCASTING - 11.19% of Total Net Assets
750,000 8.875% Capital Cities / ABC, Inc., 12-15-00 ................................... $ 754,575
1,000,000 9.250% Tele-Communications, Inc., 04-15-02 .................................... 1,030,970
------------
$ 1,785,545
ELECTRICAL AND ELECTRONICS - 4.98% of Total Net Assets
800,000 6.750% Honeywell, Inc. 03-15-02 ............................................... $ 794,400
------------
$ 794,400
ELECTRIC UTILITIES - 4.73% of Total Net Assets
750,000 8.750% Pacific Gas and Electric Company, 01-01-01 ............................. $ 754,928
------------
$ 754,928
FINANCIAL SERVICES - 14.58% of Total Net Assets
800,000 5.650% Ameritech Capital Funding Corporation, 01-15-01 ........................ $ 794,144
750,000 8.375% General Electric Capital Corporation, 03-01-01 ......................... 755,415
800,000 5.625% International Lease Finance Company, 05-01-02 .......................... 777,088
------------
$ 2,326,647
HOUSEHOLD PRODUCTS - 6.34% of Total Net Assets
1,000,000 8.625% Kimberly-Clark Corporation, 05-01-01 ................................... $ 1,011,590
------------
$ 1,011,590
INSURANCE - 6.30% of Total Net Assets
1,000,000 7.450% CitiGroup, Inc., 06-06-02 .............................................. $ 1,004,080
------------
$ 1,004,080
MANUFACTURING - 12.58% of Total Net Assets
1,000,000 9.125% General Motors Corporation, 07-15-01 ................................... $ 1,016,620
1,000,000 6.500% Sherwin-Williams Company, 02-01-02 ..................................... 989,300
------------
$ 2,005,920
OIL AND OILFIELD SERVICES - 4.74% of Total Net Assets
750,000 8.375% Mobil Corporation, 02-12-01 ........................................... $ 755,370
------------
$ 755,370
Continued on following page.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE VERSATILE BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 2000
(Unaudited)
Principal Amount Market Value
---------------- ------------
PUBLISHING - 4.98% of Total Net Assets
$ 800,000 6.650% Times Mirror Company, 10-15-01 ......................................... $ 794,040
------------
$ 794,040
RETAIL - 6.34% of Total Net Assets
1,000,000 8.625% Wal-Mart Stores, Inc., 04-01-01 ........................................ $ 1,010,810
------------
$ 1,010,810
TELECOMMUNICATIONS - 4.73% of Total Net Assets
750,000 9.375% GTE Corporation, 12-01-00 .............................................. $ 754,665
------------
$ 754,665
TOBACCO - 4.97% of Total Net Assets
800,000 7.250% Philip Morris Companies, Inc., 09-15-01 ................................ $ 792,496
------------
$ 792,496
------------
Total Corporate Bonds (Cost $14,657,605) $ 14,585,195
------------
UNITED STATES TREASURY SECURITIES - 6.84% of Total Net Assets
1,100,000 United States Treasury notes 5.500%, 07-31-01 ................................. $ 1,090,540
------------
Total United States Treasury securities (Cost $1,090,375) $ 1,090,540
------------
Total Portfolio - 98.28% of total net assets (identified cost $15,747,980)(a) $ 15,675,735
Other assets, less liabilities (1.72% of total net assets) 274,383
------------
Net assets applicable to outstanding shares $ 15,950,118
============
Note:(a) Aggregate cost for federal income tax purposes.
See accompanying notes.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE AGGRESSIVE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 2000
(Unaudited)
Number
Of Shares Market Value
--------- ------------
AGGRESSIVE GROWTH STOCK INVESTMENTS - 100.50% of Total Net Assets
CHEMICALS - 2.57% of Total Net Assets
12,000 Air Products and Chemicals, Inc. .......................................... $ 400,500
15,000 Wellman, Inc. ............................................................. 219,375
------------
$ 619,875
COMPUTER SOFTWARE - 1.13% of Total Net Assets
11,000 Computer Associates International, Inc. ................................... $ 272,938
------------
$ 272,938
CONSTRUCTION - 3.41% of Total Net Assets
5,000 Fluor Corporation ......................................................... $ 149,063
15,000 Johns Manville Corporation ............................................... 193,125
24,000 Ryland Group, Inc. ........................................................ 480,000
------------
$ 822,188
DATA PROCESSING - 6.75% of Total Net Assets
2,000 Agilent Technologies, Inc. (a) ............................................ $ 81,500
8,000 Hewlett-Packard Company ................................................... 873,500
8,000 SCI Systems, Inc. (a) ..................................................... 367,000
6,000 Seagate Technology, Inc. (a) .............................................. 304,125
------------
$ 1,626,125
ELECTRICAL AND ELECTRONICS - 7.34% of Total Net Assets
20,000 Intel Corporation ........................................................ $ 1,335,000
12,000 National Semiconductor Corporation (a) .................................... 434,250
------------
$ 1,769,250
ENTERTAINMENT AND LEISURE - 10.09% of Total Net Assets
15,000 Disney (Walt) Company ..................................................... $ 580,313
6,000 Harcourt General, Inc. .................................................... 331,125
16,000 Tribune Company .......................................................... 520,000
15,000 Viacom, Inc. Class A (a) .................................................. 1,000,313
------------
$ 2,431,751
FINANCIAL SERVICES - 30.91% of Total Net Assets
18,000 Bank of New York, Inc. .................................................... $ 842,625
14,000 Bear Stearns Companies, Inc. .............................................. 754,250
16,000 Morgan Stanley Dean Witter and Company .................................... 1,460,000
45,000 Schwab (Charles) Corporation .............................................. 1,625,625
10,000 State Street Corporation .................................................. 1,003,750
40,000 Stilwell Financial, Inc. .................................................. 1,762,500
------------
$ 7,448,750
MANUFACTURING - 8.57% of Total Net Assets
6,000 Dana Corporation ......................................................... $ 137,625
20,000 Harley-Davidson, Inc. ..................................................... 897,500
8,600 Illinois Tool Works, Inc. ................................................. 492,350
10,000 Mattel, Inc. .............................................................. 110,625
12,000 Parker-Hannifin Corporation ............................................... 426,750
------------
$ 2,064,850
Continued on following page.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE AGGRESSIVE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
July 31, 2000
(Unaudited)
Number
Of Shares Market Value
--------- ------------
OIL AND OILFIELD SERVICES - 3.98% of Total Net Assets
105,200 Frontier Oil Corporation (a) .............................................. $ 736,400
40,000 Parker Drilling Company (a) ............................................... 222,500
------------
$ 958,900
PHARMACEUTICALS - 16.87% of Total Net Assets
25,000 Amgen, Inc. (a) .......................................................... $ 1,623,438
20,000 Biogen, Inc. (a) .......................................................... 1,060,000
7,000 Chiron Corporation (a) .................................................... 293,125
15,000 Genzyme Corporation (General Division) (a) ................................ 1,041,563
1,620 Genzyme Corporation Molecular Oncology (a) ................................ 14,580
2,685 Genzyme Corporation Surgical Products (a) ................................. 26,006
1,170 Genzyme Corporation Tissue Repair (a) .................................... 5,850
------------
$ 4,064,562
RETAIL - 3.90% of Total Net Assets
24,000 Costco Wholesale Corporation (a) .......................................... $ 781,500
5,000 Neiman Marcus Group, Inc. Class B (a) ..................................... 157,813
------------
$ 939,313
TRANSPORTATION - 2.27% of Total Net Assets
18,000 Kansas City Southern Industries, Inc. ..................................... $ 124,875
21,000 M.S. Carriers, Inc. (a) ................................................... 421,313
------------
$ 546,188
MISCELLANEOUS - 2.71% of Total Net Assets
5,000 Ionics, Inc. (a) .......................................................... $ 153,125
10,000 Lockheed Martin Corporation .............................................. 281,250
5,000 Temple-Inland, Inc. ....................................................... 217,188
------------
$ 651,563
------------
Total Portfolio - 100.50% of total net assets (identified cost $8,008,623)(b) $ 24,216,253
Liabilities, less other assets (.50% of total net assets) (120,606)
------------
Net assets applicable to outstanding shares $ 24,095,647
============
Note:(a) Non-income producing.
(b) Aggregate cost for federal income tax purposes.
See accompanying notes.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
July 31, 2000
(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, 2000, one such investment in the Permanent Portfolio (3.52% 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, 2000, investment income was earned as follows: |
Permanent Treasury Bill Versatile Bond Aggressive Growth
Portfolio Portfolio Portfolio Portfolio
------------ ------------- -------------- -----------------
Interest on:
Corporate bonds .................... $ 69,872 $ -- $ 453,208 $ --
Swiss franc assets ................. 147,684 -- -- --
United States Treasury securities .. 701,726 2,279,732 3,858 18
Other investments .................. 8,363 16,266 18,434 --
Dividends ............................ 269,298 -- -- 66,576
------------ ------------ ------------ -----------
$ 1,196,943 $ 2,295,998 $ 475,500 $ 66,594
============ ============ ============ ===========
Continued on following page.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
July 31, 2000
(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, 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 July 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 six months ended July 31, 2000, the Fund’s Permanent Portfolio, Treasury Bill Portfolio and Versatile Bond Portfolio incurred federal excise taxes of $14,959, $57,841 and $8,816, 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 six months ended July 31, 2000, the Fund’s Permanent |
Continued on following page.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
July 31, 2000
(Unaudited)
| Portfolio, Treasury Bill Portfolio and Versatile Bond Portfolio reclassified $129,402, $770,172 and $432,666, respectively, from undistributed net investment income to paid-in capital and the Fund’s Aggressive Growth Portfolio reclassified $80,898 from paid-in capital to undistributed net investment loss to reflect such book and tax basis differences relating to shareholder distributions and excise taxes paid. Additionally, the Permanent Portfolio reclassified $268,067 from undistributed net investment income to accumulated net realized gain on foreign currency transactions, 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 $19,427 at July 31, 2000. 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, 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.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
July 31, 2000
(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, 2000: |
Permanent Treasury Bill Versatile Bond Aggressive Growth
Portfolio Portfolio Portfolio Portfolio
------------- ------------- -------------- -----------------
Purchases................................ $ 1,883,422 None $ 7,073,321 $ 190,190
Sales.................................... 1,980,770 None 9,071,935 1,271,733
| 6. | NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS |
| The following is a summary of net unrealized appreciation (depreciation) of investments at July 31, 2000 for federal income tax purposes: |
Permanent Treasury Bill Versatile Bond Aggressive Growth
Portfolio Portfolio Portfolio Portfolio
------------- ------------- -------------- -----------------
Aggregate gross unrealized appreciation of
investments with excess of value over
tax cost:
Investments in securities of unaffiliated
issuers ............................... $14,456,245 $ 2,953 $ 2,134 $16,331,872
Investments other than securities ....... 130,363 -- -- --
----------- -------- ----------- -----------
14,586,608 2,953 2,134 16,331,872
Aggregate gross unrealized depreciation
of investments with excess of tax cost
over value:
Investments in securities of unaffiliated
issuers ............................... (999,075) (24,918) (74,379) (124,242)
Investments other than securities........ (3,014,720) -- -- --
----------- -------- ----------- -----------
(4,013,795) (24,918) (74,379) (124,242)
----------- -------- ----------- -----------
Net unrealized appreciation (depreciation)
of investments $10,572,813 $(21,965) $ (72,245) $16,207,630
=========== ======== =========== ===========
Continued on following page.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
July 31, 2000
(Unaudited)
| 7. | CAPITAL STOCK TRANSACTIONS |
| 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: |
Permanent Portfolio
-----------------------------------------------------------------------------------
Six months ended July 31, 2000 January 31, 2000
--------------------------------------- --------------------------------------
Shares Dollars Shares Dollars
---------------- ------------------- --------------- -------------------
Shares sold..................... 108,947 $ 1,721,034 173,595 $ 2,587,458
Distributions reinvested........ -- -- 179,410 3,123,527
------- ------------ ------- ------------
108,947 1,721,034 353,005 5,710,985
Shares redeemed................. (282,964) (4,474,473) (671,730) (10,967,936)
------- ------------ ------- ------------
Net decrease (174,017) $ (2,753,439) (318,725) $ (5,256,951)
======= ============ ======= ============
Treasury Bill Portfolio
-----------------------------------------------------------------------------------
Six months ended July 31, 2000 January 31, 2000
--------------------------------------- --------------------------------------
Shares Dollars Shares Dollars
---------------- ------------------- --------------- -------------------
Shares sold..................... 217,689 $ 14,808,599 546,400 $ 36,808,338
Distributions reinvested........ -- -- 39,589 2,670,274
------- ------------ ------- ------------
217,689 14,808,599 585,989 39,478,612
Shares redeemed................. (246,548) (16,772,873) (761,564) (51,436,257)
------- ------------ ------- ------------
Net decrease (28,859) $ (1,964,274) (175,575) $(11,957,645)
======= ============ ======= ============
Versatile Bond Portfolio
-----------------------------------------------------------------------------------
Six months ended July 31, 2000 January 31, 2000
--------------------------------------- --------------------------------------
Shares Dollars Shares Dollars
---------------- ------------------- --------------- -------------------
Shares sold..................... 28,958 $ 1,595,173 277,049 $ 15,163,613
Distributions reinvested........ -- -- 7,656 445,184
------- ------------ ------- ------------
28,958 1,595,173 284,705 15,608,797
Shares redeemed................. (72,446) (3,989,956) (389,663) (21,362,544)
------- ------------ ------- ------------
Net decrease (43,488) $ (2,394,783) (104,958) $ (5,753,747)
======= ============ ======= ============
Aggressive Growth Portfolio
-----------------------------------------------------------------------------------
Six months ended July 31, 2000 January 31, 2000
--------------------------------------- --------------------------------------
Shares Dollars Shares Dollars
---------------- ------------------- --------------- -------------------
Shares sold..................... 11,522 $ 1,012,144 30,159 $ 2,324,643
Distributions reinvested........ -- -- -- --
------- ------------ ------- ------------
11,522 1,012,144 30,159 2,324,643
Shares redeemed................. (23,375) (2,039,644) (58,675) (4,424,330)
------- ------------ ------- ------------
Net decrease (11,853) $ (1,027,500) (28,516) $ (2,099,687)
======= ============ ======= ============
Continued on following page.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
July 31, 2000
(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 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.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
July 31, 2000
(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, 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 six months ended July 31, 2000 and 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
2001..... 4,718 4,247 -- 472
---------- ---------- ---------- ----------
$ 623,630 $ 576,442 $ 23,687 $ 57,678
========== ========== ========== ==========
This page intentionally left blank.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE PERMANENT PORTFOLIO
Financial highlights for
the Permanent Portfolio
For each share of capital stock outstanding throughout
each period:
Six months ended Year ended Year ended Year ended Year ended Year ended
July 31, 2000 January 31, January 31, January 31, January 31, January 31,
(Unaudited) 2000 1999 1998 1997 1996
------------ ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $ 17.44 $ 18.71 $ 19.08 $ 18.40 $ 18.80 $ 16.51
--------- --------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income (1)................. .25 .43 .47 .37 .52 .50
Net realized and unrealized gain (loss)
on investments and foreign
currencies .............................. .49 (.64) - 1.01 (.41) 2.17
--------- --------- --------- --------- --------- ---------
Total income (loss) from
investment operations .74 (.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 period $ 18.18 $ 17.44 $ 18.71 $ 19.08 $ 18.40 $ 18.80
========= ========= ========= ========= ========= =========
Total return (3) ............................ 4.24% (1.11)% 2.48% 7.57% .57% 16.20%
Ratios / supplemental data:
Net assets, end of period (in thousands).... $ 55,997 $ 56,773 $ 66,855 $ 71,099 $ 72,992 $ 76,641
========= ========= ========= ========= ========= =========
Ratio of expenses to average net assets.. 1.37%* 1.47% 1.43% 1.91% 1.49% 1.35%
Ratio of net investment income
to average net assets .................... 2.86%* 2.39% 2.48% 1.96% 2.78% 2.85%
Portfolio turnover rate .................... 9.82%* 23.75% 14.05% 7.66% 12.29% 9.96%
| * | Computed on an annualized basis. |
| (1) | Net investment income is based on average net assets per share outstanding during the period. |
| (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. |
See accompanying notes.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE TREASURY BILL PORTFOLIO
Financial highlights for
the Treasury Bill Portfolio
For each share of capital stock outstanding
throughout each period:
Six months ended Year ended Year ended Year ended Year ended Year ended
July 31, 2000 January 31, January 31, January 31, January 31, January 31,
(Unaudited) 2000 1999 1998 1997 1996
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $ 67.88 $ 67.97 $ 67.56 $ 67.55 $ 67.84 $ 66.40
--------- --------- --------- --------- --------- ---------
Income from investment operations:
Net investment income (1)(2).............. 1.61 2.51 2.72 2.69 2.84 3.22
Net realized and unrealized gain (loss)
on investments (3) ...................... (.01) (.01) .03 .06 .01 .06
--------- --------- --------- --------- --------- ---------
Total income from investment operations 1.60 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 period $ 69.48 $ 67.88 $ 67.97 $ 67.56 $ 67.55 $ 67.84
========= ========= ========= ========= ========= =========
Total return (4) ............................. 2.36% 3.70% 4.09% 4.09% 4.23% 4.95%
Ratios / supplemental data:
Net assets, end of period (in thousands).... $ 80,970 $ 81,059 $ 93,095 $ 94,200 $ 105,342 $ 114,667
========= ========= ========= ========= ========= =========
Ratio of expenses to average net assets (2) .95%* 1.02% .96% 1.20% .90% .82%
Ratio of net investment income
to average net assets ................... 4.70%* 3.70% 4.01% 3.98% 4.19% 4.79%
| * | Computed on an annualized basis. |
| (1) | Net investment income is based on average net assets per share outstanding during the period. |
| (2) | Due to the waiver of advisory fees, the ratio of expenses to average net assets was reduced by .51% for the six months ended July 31, 2000 and .50%, .50%, .50%, .50% and .50% for the years ended January 31, 2000, 1999, 1998, 1997 and 1996, respectively. Without this waiver, the net investment income per share would have been $1.38 for the six months ended July 31, 2000 and $2.01, $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. |
See accompanying notes.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE VERSATILE BOND PORTFOLIO
Financial highlights for
the Versatile Bond Portfolio
For each share of capital stock outstanding
throughout each period:
Six months ended Year ended Year ended Year ended Year ended Year ended
July 31, 2000 January 31, January 31, January 31, January 31, January 31,
(Unaudited) 2000 1999 1998 1997 1996
------------ ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $ 58.38 $ 58.83 $ 58.58 $ 57.24 $ 56.85 $ 54.90
--------- --------- --------- --------- --------- ---------
Income from investment operations:
Net investment income (1)(2) ............ 1.38 2.44 2.77 2.87 2.94 2.91
Net realized and unrealized gain (loss)
on investments (3) .................... .22 (.58) (.08) .17 (.34) 1.05
--------- --------- --------- --------- --------- ---------
Total income from investment operations 1.60 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 period $ 59.98 $ 58.38 $ 58.83 $ 58.58 $ 57.24 $ 56.85
========= ========= ========= ========= ========= =========
Total return (4) ............................ 2.74% 3.18% 4.61% 5.33% 4.58% 7.24%
Ratios / supplemental data:
Net assets, end of period (in thousands).... $ 15,950 $ 18,065 $ 24,377 $ 23,355 $ 21,345 $ 20,137
========= ========= ========= ========= ========= =========
Ratio of expenses to average net assets (2) 1.03%* 1.01% 1.08% 1.01% .97% .89%
Ratio of net investment income
to average net assets ................... 4.67%* 4.16% 4.72% 4.95% 5.16% 5.21%
Portfolio turnover rate ................... 90.18%* 59.52% 68.21% 55.53% 102.29% 51.64%
| * | Computed on an annualized basis. |
| (1) | Net investment income is based on average net assets per share outstanding during the period. |
| (2) | 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, 2000 and .37%, .37%, .38%, .38% and .37% for the years ended January 31 , 2000, 1999, 1998, 1997 and 1996, respectively. Without this waiver, the net investment income per share would have been $1.23 for the six months ended July 31, 2000 and $2.14, $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. |
See accompanying notes.
PERMANENT PORTFOLIO FAMILY OF FUNDS, INC.
THE AGGRESSIVE GROWTH PORTFOLIO
Financial highlights for
the Aggressive Growth Portfolio
For each share of capital stock outstanding
throughout each period:
Six months ended Year ended Year ended Year ended Year ended Year ended
July 31, 2000 January 31, January 31, January 31, January 31, January 31,
(Unaudited) 2000 1999 1998 1997 1996
------------ ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $ 83.61 $ 69.13 $ 56.24 $ 47.66 $ 40.65 $ 31.61
--------- --------- --------- --------- --------- ---------
Income from investment operations:
Net investment income (loss)(1)........... (.33) (.78) (.41) (.31) .26 (.02)
Net realized and unrealized gain
on investments ........................ 4.52 15.26 13.30 11.97 7.05 10.68
--------- --------- --------- --------- --------- ---------
Total income from investment operations 4.19 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 period $ 87.80 $ 83.61 $ 69.13 $ 56.24 $ 47.66 $ 40.65
========= ========= ========= ========= ========= =========
Total return (3) ............................ 5.01% 20.95% 22.92% 24.41% 18.00% 33.78%
Ratios / supplemental data:
Net assets, end of period (in thousands).... $ 24,096 $ 23,938 $ 21,764 $ 19,955 $ 15,417 $ 11,067
========= ========= ========= ========= ========= =========
Ratio of expenses to average net assets .... 1.32%* 1.73% 1.39% 1.46% 1.33% 1.19%
Ratio of net investment income (loss) to
average net assets......................... (.77)%* (1.02)% (.65)% (.60)% .59% (.06)%
Portfolio turnover rate .................... 1.56%* 9.38% 2.73% 2.15% 21.32% 18.94%
| * | Computed on an annualized basis. |
| (1) | Net investment income (loss) is based on average net assets per share outstanding during the period. |
| (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. |
See accompanying notes.
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.
Permanent Portfolio(1) Treasury Bill Portfolio (2)(5)
--------------------------------------- -------------------------------------
1 year ended July 31, 2000 5.23% 1 year ended July 31, 2000 4.27%
5 years ended July 31, 2000 3.41% 5 years ended July 31, 2000 4.10%
10 years ended July 31, 2000 4.69% 10 years ended July 31, 2000 3.98%
15 years ended July 31, 2000 5.54% 13 years 66 days ended
17 years 243 days ended July 31, 2000 4.60%
July 31, 2000 4.64%
Aggressive Growth Portfolio(3) Versatile Bond Portfolio (4)(6)
--------------------------------------- -------------------------------------
1 year ended July 31, 2000 14.67% 1 year ended July 31, 2000 4.48%
5 years ended July 31, 2000 18.05% 5 years ended July 31, 2000 4.65%
10 years ended July 31, 2000 18.31% 8 years 308 days ended
10 years 211 days ended July 31, 2000 4.57%
July 31, 2000 16.48%
| (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 31,2000, assuming reinvestment of all dividends and distributions and deduction of all fees and expenses except the $35 one-time account start-up fee, was 5.26%, and effective yield was 5.39%. |
| (6) | The 30-day SEC standardized yield for the Versatile Bond Portfolio at July 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 5.32%. |
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 long-term United States Treasury securities, coupled with higher yields earned on short and intermediate-term debt issues, have more than offset the weakness in gold and silver prices, U.S. growth and natural resource stocks, real estate investment trusts and the relative value of the Swiss franc so far in 2000. Accordingly, the Portfolio achieved a total return of 4.24% for the six months ended July 31, 2000, as compared to an annualized inflation rate of 4.60% during the same period. |
| 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 2.36% and maintained an average maturity of between 60 and 90 days throughout the six months ended July 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 2.74% while maintaining an average maturity of between 270 and 450 days throughout the six months ended July 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 5.01% for the six months ended July 31, 2000, as compared to (3.09%) for the Dow Jones Industrial Average and 3.19% for the Standard and Poor’s 500 Stock Index during the same period. |
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| INVESTMENT ADVISER | |
|
| World Money Managers Terry Coxon, General Partner 625 Second Street Petaluma, California 94952 |
||
| CONSULTANTS TO THE FUND | ||
| Harry Browne Douglas Casey |
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| 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 |
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| CUSTODIAN | ||
| State Street Bank and Trust Company Boston, Massachusetts 02105 |
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| INDEPENDENT AUDITORS | ||
| Tait, Weller and Baker Eight Penn Center Plaza Philadelphia, Pennsylvania 19103 |
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| INVESTOR’S INFORMATION OFFICE | SEMI-ANNUAL REPORT July 31, 2000 |
|
| P.O. Box 5847 Austin, Texas 78763 (800) 531-5142 Nationwide Local (512) 453-7558 |
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