<PAGE>
SEMI-ANNUAL REPORT
April 30, 1996
THE TOCQUEVILLE TRUST
MUTUAL FUNDS
The Tocqueville Fund
The Tocqueville Small Cap Value Fund
The Tocqueville Asia-Pacific Fund
The Tocqueville Europe Fund
The Tocqueville Government Fund
[LOGO] Tocqueville
<PAGE>
THE TOCQUEVILLE TRUST
The Tocqueville Fund
- --------------------------------------------------------------------------------
DEAR FELLOW SHAREHOLDERS:
We are pleased to report our results for the six month period
ended April 30, 1996. Over the period The Tocqueville Fund gener-
ated a return of 20.05%. This compares with 13.76% for the S&P 500
index over the same period. While we are very gratified by the re-
sults, we would like to point out that this period of superior per-
formance relative to the S&P offsets the previous six month period
in which we underperformed on a relative basis. For the twelve
month period ended April 30, 1996, The Tocqueville Fund generated a
30.94% return compared with 30.19% for the S&P.
Putting relative comparisons aside, the absolute returns over
the period for The Tocqueville Fund (and the equity markets in gen-
eral) have been extraordinary. That we have participated as fully
as we have is somewhat surprising given our conservative approach,
which typically leads to relative underperformance during strong
bull markets. Because of fortuitous stock selection, particularly a
significant position in energy service companies, our portfolio
stayed well ahead of the market advances during the past six
months. Also benefiting results was the sharp turnaround in Kmart,
currently our largest position. As of this writing, shares of Kmart
have advanced 43% since the end of our fiscal year, and 63% since
our last purchase back in November of 1995.
OUTLOOK
After the spectacular year of 1995, we were not expecting a
continuation of the gains in 1996. In that respect we were mistak-
en. Although not as robust, the markets have continued their above-
trend performance during the early months of calendar 1996, in
spite of rising interest rates. Our view has not changed, however.
The market continues to face political uncertainties, difficult
earnings comparisons going forward, and a less conciliatory mone-
tary policy, at best. It faces these negatives from a lofty valua-
tion level, particularly when looked at from the perspective of av-
erage yield, which would suggest a seriously overvalued market.
While the market looks more reasonable from an earnings perspec-
tive, there are still ample signs of overvaluation. The speculation
in the new issues market is one such sign. The pervasive exposure
of financial news and information in the popular culture, an indi-
cation that has been troubling us for a while, is another. When mu-
tual fund managers start receiving stock tips from their cab driv-
ers on the way to work, it's time to start worrying about a market
top.
<PAGE>
- --------------------------------------------------------------------------------
Beyond that, however, are the plethora of financial news tele-
vision shows (indeed, networks), financial publications, Internet
web sites, as well as an entire industry devoted to helping clients
select mutual funds. While these may point to a level of greater
financial sophistication among the investing public, and, perhaps,
growing conviction that government social programs are likely to
fall far short of the retirement needs of most people, it is still
sobering. The changing age demographics--the aging of the baby
boomers--could easily mean that we are in the very early stages of
a long-term boom in savings. Still, the mantra that stocks can only
go up, or that all market sell-offs are buying opportunities, and
the widespread acceptance of equities as the vehicle of choice for
long-term investors, cannot fail to cause alarm in those of us old
enough to remember bear markets.
All this being said, it remains a market of stocks, not a
stock market. As stockpickers, we continue to look for and find eq-
uities that fit our disciplined valuation parameters. We are com-
fortable buying and holding shares of companies that represent
sound values at reasonable prices. Our portfolio, while certainly
vulnerable to a market setback, does not contain the wildly specu-
lative issues that have captured the attention of much of the fi-
nancial press and the public. We continue to search for value in
the more mundane and understandable industries. While this means we
will almost certainly miss the next Netscape or Microsoft, it also
means that we should avoid the losses that follow when high flying
expectations come down to earth. With so much of our personal as-
sets invested in the Fund, this is the approach that lets us sleep
best at night, particularly in these volatile times. We hope you
can enjoy a comfortable night's rest, too, knowing that these are
our guiding principles.
Robert Kleinschmidt
Francois Sicart
Portfolio Managers
2
<PAGE>
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS
<TABLE>
<S> <C>
Kmart Corp. (5.05%) With reasonable margins, the company could earn
$2.00 per share.
Citicorp (4.91%) An original "Black & Blue Chip", fundamentals
have improved as rapidly as the stock price.
Varco International Part of our oil service package, the company is
(4.15%) a technology leader in drilling equipment.
Bristol Myers Squibb Solid company selling at discount to market and
Corp. (4.10%) peer group.
International Business Still a value at less than 10 times earnings.
Machines (4.02%) Aggressive share repurchases should boost
results.
BankAmerica Corp. (3.78%) Overcapitalized, buying back stock and a safe
play on the California recovery.
RJR Nabisco Holdings Recent favorable litigation developments and a
Corp. (3.73%) probable spin-off enhance the valuation.
Baker Hughes (3.17%) Part of our oil service package, the company
should benefit from a secular uptrend in
drilling.
Sprint Corp (3.15%) Still the best positioned and most undervalued
of the long distance carriers.
Coast Savings Financial, A consolidation candidate and possible major
Inc. (3.11%) litigation beneficiary.
</TABLE>
3
<PAGE>
THE TOCQUEVILLE FUND
SELECTED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
----------------------
CLASS A CLASS B CLASS A CLASS B
------- ------- ------- -------
FOR THE SIX PERIOD FROM
PER SHARE OPERATING MONTHS ENDED YEAR ENDED OCTOBER 31, AUGUST 14, 1995
PERFORMANCE APRIL 30, ---------------------- TO
(FOR A SHARE OUTSTANDING 1996 1995 1994 1993 1992 OCTOBER 31, 1995
THROUGHOUT THE PERIOD) ---------------------- ---- ---- ---- ---- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period $ 14.07 $ 14.01 $ 13.74 $ 13.67 $ 11.83 $ 11.33 $14.68
------- ------- ------- ------- ------- ------- ------
Income from investment
operations:
Net investment income
(loss) 0.04(a) (0.02)(a) 0.15(d) 0.12 0.11 0.17 --
Net realized and
unrealized gain (loss) 2.61 2.61 1.70 0.88 2.55 1.33 (0.67)
------- ------- ------- ------- ------- ------- ------
Total from investment
operations 2.65 2.59 1.85 1.00 2.66 1.50 (0.67)
------- ------- ------- ------- ------- ------- ------
Less distributions
Dividends from net in-
vestment income (0.15) (0.15) (0.11) (0.14) (0.16) (0.36) --
Distributions from net
realized gains (1.06) (1.06) (1.41) (0.79) (0.66) (0.64) --
------- ------- ------- ------- ------- ------- ------
Total distributions (1.21) (1.21) (1.52) (0.93) (0.82) (1.00) --
------- ------- ------- ------- ------- ------- ------
Change in net asset
value for the period 1.44 1.38 0.33 0.07 1.84 0.50 (0.67)
------- ------- ------- ------- ------- ------- ------
Net asset value, end of
period $ 15.51 $ 15.39 $ 14.07 $ 13.74 $ 13.67 $ 11.83 $14.01
------- ------- ------- ------- ------- ------- ------
Total Return (b)(c) 20.1% 19.7% 16.0% 7.7% 23.7% 14.9% (4.56)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of pe-
riod (000 for Class A) $40,054 $51,088 $33,438 $29,140 $27,745 $19,496 $ 191
Ratio of average net as-
sets of:
Expenses 1.47%(a)* 1.97%(a)* 1.57%(e) 1.54% 1.56% 1.74% --
Net investment income 0.54%(a)* 0.54%(a)* 1.07%(e) 0.87% 0.96% 1.44% --
Portfolio turnover rate 33%* -- 47% 52% 54% 89% --
</TABLE>
(a)Net of fees waived amounting to 0.15% of average net assets for the period
ended April 30, 1996.
(b)Does not include maximum sales charge of 4% for Class A Shares.
(c)Does not include contingent deferred sales charge for Class B Shares. Not
annualized.
(d)Net of fees waived amounting to 0.02% of average net assets for the period
ended October 31, 1995.
* Annualized
4
<PAGE>
THE TOCQUEVILLE FUND
INVESTMENTS AS OF APRIL 30, 1996
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market % of
COMMON STOCKS--92.9% Shares Value Net Assets
- ---------------------------------------------------------------
<S> <C> <C> <C>
BASIC INDUSTRIES--4.3%
Champion International 20,000 $ 965,000 2.41%
Longview Fibre Co. of Washington 10,000 176,250 0.44%
Newmont Mining Corp. 10,000 578,750 1.44%
- ---------------------------------------------------------------
1,720,000
- ---------------------------------------------------------------
CAPITAL GOODS--5.5%
Giddings & Lewis, Inc. 25,000 464,063 1.16%
Measurex Corp. 25,000 725,000 1.81%
Newpark Res., Inc. 15,000 470,625 1.17%
Zero Corp. 30,000 540,000 1.35%
- ---------------------------------------------------------------
2,199,688
- ---------------------------------------------------------------
CONSUMER BASICS--18.5%
Archer Daniels Midland Co. 20,500 386,938 0.97%
Bristol Myers Squibb Corp. 20,000 1,645,000 4.10%
Foxmeyer Health Corp. 50,000 975,000 2.43%
Hanson PLC 30,000 453,750 1.13%
Heinz, H.J. Co. 30,000 1,016,250 2.54%
Pepsico, Inc. 15,000 952,500 2.38%
RJR Nabisco Holdings Corp. 50,000 1,493,750 3.73%
Scherer RP Corp. Del. (a) 12,500 493,750 1.23%
- ---------------------------------------------------------------
7,416,938
- ---------------------------------------------------------------
CONSUMER DURABLES--2.2%
Maytag Corp. 40,000 860,000 2.15%
- ---------------------------------------------------------------
860,000
- ---------------------------------------------------------------
CONSUMER NON-DURABLES--9.9%
Burlington Industries, Inc. (a) 100,000 1,162,500 2.90%
Kmart Corp. 200,000 2,025,000 5.05%
Melville Corp. 15,000 583,125 1.45%
Systemed, Inc. Del. (a) 70,000 199,062 0.50%
- ---------------------------------------------------------------
3,969,687
- ---------------------------------------------------------------
ENERGY--16.7%
Baker Hughes, Inc. 40,000 1,270,000 3.17%
Digicon, Inc. 75,000 1,153,125 2.88%
Murphy Oil Corp. 25,000 1,115,625 2.78%
Tesoro Petroleum Corp. (a) 100,000 1,100,000 2.74%
Varco International, Inc. (a) 100,000 1,662,500 4.15%
Western Atlas, Inc. 6,500 390,000 0.97%
- ---------------------------------------------------------------
6,691,250
- ---------------------------------------------------------------
FINANCE--14.1%
BankAmerica Corp. 20,000 1,515,000 3.78%
Citicorp 25,000 1,968,750 4.91%
- ---------------------------------------------------------------
</TABLE>
(a) Non-income producing security
See Notes to Financial Statements
<TABLE>
<CAPTION>
COMMON STOCKS Market % of
(CONTINUED) Shares Value Net Assets
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Coast Savings Financial, Inc. (a) 40,000 $ 1,245,000 3.11%
Hartford Steam Boilers Insp. & Inc. 10,000 482,500 1.20%
Zurich Reins Centre Hldgs., Inc. 15,000 451,875 1.13%
- -----------------------------------------------------------------------------
5,663,125
- -----------------------------------------------------------------------------
GENERAL BUSINESS--6.3%
De Luxe Corp. 10,000 350,000 0.87%
Miller, Herman Inc. 25,000 765,625 1.91%
National Education Corp. (a) 100,000 743,750 1.86%
Western Publishing Group, Inc. (a) 50,000 656,250 1.64%
- -----------------------------------------------------------------------------
2,515,625
- -----------------------------------------------------------------------------
MISCELLANEOUS--1.1%
Cattellus Development (a) 50,000 456,250 1.14%
- -----------------------------------------------------------------------------
456,250
- -----------------------------------------------------------------------------
TECHNOLOGY--10.6%
Adobe Systems, Inc. 15,000 645,000 1.61%
Amdahl Corp. 10,000 255,000 0.64%
Boeing International Co. 10,000 821,250 2.05%
International Business Machines 15,000 1,612,500 4.02%
Telxon Corp. 40,000 920,000 2.30%
- -----------------------------------------------------------------------------
4,253,750
- -----------------------------------------------------------------------------
UTILITIES--3.7%
360 Communications Co. 10,000 235,000 0.59%
Sprint Corp. 30,000 1,263,750 3.15%
- -----------------------------------------------------------------------------
1,498,750
- -----------------------------------------------------------------------------
Total Common Stocks
(Cost $26,227,469) 37,245,063
- -----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--7.1%
Repurchase Agreement, State Street Bank &
Trust Company, dated 4/30/96, due 5/01/96,
4.0%. Collateralized by U.S. Treasury Notes
valued at $2,915,097. Repurchase proceeds
of $2,857,317 (Cost $2,857,000) 2,857,000 2,857,000 7.13%
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $29,084,469)--100.0% 40,102,063
OTHER ASSETS & LIABILITIES 3,104
- -----------------------------------------------------------------------------
TOTAL NET ASSETS--100.0% $40,105,167
-----------
</TABLE>
5
<PAGE>
THE TOCQUEVILLE FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at values (identified cost $29,084,469) $40,102,063
Cash 443
Receivable for Fund shares sold 23,994
Dividends and interest receivable 28,217
Other assets 3,161
-----------
$40,157,878
-----------
LIABILITIES
Payable for Fund shares repurchased 20,865
Accrued investment adviser's fee 23,871
Accrued distribution fee 7,975
-----------
52,711
-----------
NET ASSETS $40,105,167
-----------
At April 30, 1996 net assets consisted of:
Capital paid in $27,553,094
Undistributed net investment income 21,675
Net accumulated undistributed realized gain 1,512,804
Net unrealized appreciation 11,017,594
-----------
$40,105,167
-----------
CLASS A
NET ASSET VALUE PER SHARE ($40,054,079/2,581,788 shares
outstanding) $15.51
------
Maximum offering price ($15.51/96%) $16.16
------
CLASS B
NET ASSET VALUE PER SHARE AND MAXIMUM OFFERING PRICE
($51,088/3,320 shares outstanding) $15.39
------
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
THE TOCQUEVILLE FUND
STATEMENT OF OPERATIONS
Six Months Ended April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends (net of $2,588 foreign taxes withheld) $ 283,789
Interest 77,464
----------
361,253
----------
EXPENSES
Investment adviser's fee (Note 2) 134,419
Custodian and fund accounting 33,670
Transfer agent and shareholder services 18,200
Professional fees 13,650
Distribution (Note 4)
Class A 44,880
Class B 42
Administration fee (Note 4) 27,028
Printing 1,820
Registration 6,370
Trustees fee 5,096
Fidelity bond 2,548
Other 3,640
----------
Total expenses 291,363
Less: Fees waived (Note 4) (27,028)
----------
Net expenses 264,335
----------
NET INVESTMENT INCOME 96,918
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 1,771,306
Net unrealized appreciation of investments during the period 4,846,267
----------
Net gain on investments 6,617,573
----------
Net increase in net assets resulting from operations $6,714,491
----------
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
THE TOCQUEVILLE FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED FOR THE YEAR
APRIL 30, 1996 ENDED
(UNAUDITED) OCTOBER 31, 1995
------------------ ----------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net investment income $ 96,918 $ 343,526
Net realized gain 1,771,306 2,506,947
Net unrealized appreciation (depreciation) 4,846,267 2,103,502
----------- -----------
Net increase resulting from operations 6,714,491 4,953,975
Distributions to shareholders from:
Net investment income
Class A (354,609) (233,851)
Class B (4) --
Net realized gain on investments
Class A (2,505,796) (2,995,036)
Class B (14) --
Fund share transactions (Note 3)
Class A 2,765,597 2,572,904
Class B 47,510 200
----------- -----------
Net Increase in net assets 6,667,175 4,298,192
NET ASSETS
Beginning of period 33,437,992 29,139,800
----------- -----------
End of period 40,105,167 33,437,992
----------- -----------
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
THE TOCQUEVILLE FUND
NOTES TO FINANCIAL STATEMENTS
(unaudited)
- --------------------------------------------------------------------------------
NOTE 1
The Tocqueville Trust (the "Trust") was organized as a Massachusetts business
trust registered under the Investment Company Act of 1940 as amended, as a di-
versified, open-end management investment company. The Trust consists of five
separate Funds: The Tocqueville Fund, The Tocqueville Asia-Pacific Fund, The
Tocqueville Small Cap Value Fund, The Tocqueville Europe Fund and The
Tocqueville Government Fund (the "Funds"). The following is a summary of sig-
nificant accounting principles followed by the Trust in the preparation of its
financial statements.
- --------------------------------------------------------------------------------
SECURITY VALUATION
Investments in securities, including foreign securities, traded on an ex-
change or quoted on the over-the-counter market are valued at the last sale
price or, if no sale occurred during the day, at the mean between closing bid
and asked prices, as last reported by a pricing service approved by the Trust-
ees. When market quotations are not readily available, or when restricted secu-
rities or other assets are being valued, such assets are valued at fair value
as determined in good faith by or under procedures established by the Trustees.
Short-term investments are stated at cost which, together with accrued inter-
est, approximates market value.
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
It is the Trust's policy to comply with the provisions of the Internal Reve-
nue Code ("Code") applicable to regulated investment companies and to distrib-
ute all of its taxable income to its shareholders. It is also the Trust's in-
tention to distribute amounts sufficient to avoid imposition of any excise tax
under Section 4982 of the Code. Therefore, no federal income or excise tax pro-
vision is required.
- --------------------------------------------------------------------------------
OTHER
Security transactions are accounted for on the trade date, the date the order
to buy or sell is executed. Dividend income is recognized on the ex-dividend
date or at the time the Fund becomes aware, whichever is earlier. Interest in-
come is recognized on the accrual basis and market discount is accounted for on
a straight-line basis from settlement date. The Trust uses the first-in, first-
out method for determining realized gain or loss on investments sold for both
financial reporting and federal tax purposes. Distributions to shareholders are
recorded on the ex-dividend date. Expenses incurred by the Trust not specifi-
cally identified to a Fund are allocated on a basis relative to the size of
each fund's daily net asset value.
- --------------------------------------------------------------------------------
NOTE 2
Tocqueville Asset Management L.P. ("Tocqueville"), is the investment adviser
to the Trust under an Investment Advisory Agreement approved by shareholders on
February 26, 1990. For its services, Tocqueville receives a fee from the
Tocqueville Fund payable monthly, at an annual rate of .75% of the first $100
million of the
9
<PAGE>
Fund's average daily net assets, .70% of the next $400 million of average daily
net assets, and .65% of average daily net assets in excess of $500 million.
Certain states in which shares of the Trust are qualified for sale impose
limitations on the expenses of the Trust. The Advisory Agreement provides that
if, in any fiscal year, the total expenses of the Trust (excluding taxes, in-
terest, extraordinary expenses and the distribution fee but including the Ad-
viser's fee) exceed the expense limitation applicable to the Trust imposed by
the securities regulations of any state in which it is registered to sell
shares, Tocqueville will pay or reimburse the Trust for that excess up to the
amount of its fee. The most restrictive limitation currently applicable (ex-
cluding the items described above) limits a fund to 2.5% of the Trust's first
$30,000,000 of average daily net assets, 2% of the next $70,000,000, and 1.5%
of the Trust's average daily net assets over $100,000,000. No such reimburse-
ment was required for the six months ended April 30, 1996.
- --------------------------------------------------------------------------------
NOTE 3
Effective August 14, 1995 the Fund offered two classes of shares: Class A and
Class B shares. Shares of each class are identical except for the initial sales
load on Class A shares, a contingent deferred sales charge on Class B shares,
distribution fees, and voting rights on matters effecting a single class. All
Fund shares outstanding before August 14, 1995 were designated as Class A
shares. At April 30, 1996, there were an unlimited number of shares of benefi-
cial interest authorized ($0.01 par value). Transactions in the Fund's shares
were as follows:
<TABLE>
<CAPTION>
CLASS A
-------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
---------------- ----------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold 186,678 2,603,971 448,435 $ 5,664,101
Shares issued on reinvestment of
dividends 191,061 2,596,531 230,270 2,634,292
Shares redeemed (171,993) (2,434,905) (422,865) (5,725,489)
-------- ---------- -------- -----------
Net increase 205,746 2,765,597 255,840 $ 2,572,904
-------- ---------- -------- -----------
<CAPTION>
CLASS B
-------
FOR THE PERIOD FROM
AUGUST 14, 1995
SIX MONTHS ENDED THROUGH
APRIL 30, 1996 OCTOBER 31, 1995
---------------- -------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold 3,305 47,498 14 $ 200
Shares issued on reinvestment of
dividends 1 12 -- --
Shares redeemed -- -- -- --
-------- ---------- -------- -----------
Net increase 3,306 47,510 14 $ 200
-------- ---------- -------- -----------
</TABLE>
- --------------------------------------------------------------------------------
10
<PAGE>
- --------------------------------------------------------------------------------
NOTE 4
Tocqueville Securities L.P. (the "Distributor") acts as distributor for
shares of the Fund and purchases shares of the Fund at net asset value to fill
orders as received from investment dealers. For the six months ended April 30,
1996, the Distributor received net commissions of $1,662 from the sale of the
Fund's shares.
The Fund has adopted distribution plans related to the sale of Class A and
Class B shares pursuant to which the Fund may incur distribution expenses in
amounts not to exceed 0.25% and 0.75% per annum of the average daily net assets
of Class A and Class B shares, respectively. Such expenses may include, but are
not limited to, advertising, printing, and distribution of sales literature,
prospectuses and other materials, and payments to dealers and shareholders ser-
vicing agents including the Distributor. Under the distribution plans, the Dis-
tributor is permitted to carry forward expenses not reimbursed by the distribu-
tion fees to subsequent fiscal years for submission to the Fund for payment,
subject to the continuation of the Plan. The Distributor has informed the Trust
that, as of March 31, 1996, there were $67,692 in unreimbursed expenses for the
Fund.
Class B shares which are redeemed within six years of purchase are subject to
a contingent deferred sales charge at rates ranging from 5% to 0%, charged as a
percentage of the dollar amount subject thereto. There were no contingent de-
ferred sales charges paid to the Distributor for the six months ended April 30,
1996.
Commissions earned by the Distributor for services rendered as a registered
broker-dealer in securities transactions for the Fund for the six months ended
April 30, 1996 were $13,066.
Pursuant to an Administrative Services Agreement, effective September 15,
1995, the Fund pays to the Distributor a fee computed and paid monthly at an
annual rate of 0.15% of the average daily net assets of the Fund. During the
six months ended April 30, 1996, the Distributor waived administration fees of
$27,028.
- --------------------------------------------------------------------------------
11
<PAGE>
- --------------------------------------------------------------------------------
NOTE 5
Purchases and sales of investment securities (excluding short-term instru-
ments) for the six months ended April 30, 1996 were as follows:
<TABLE>
<CAPTION>
THE
TOCQUEVILLE
FUND
-----------
<S> <C>
PURCHASES
U.S. Government $ --
Other 5,893,915
----------
$5,893,915
----------
SALES
U.S. Government $2,008,438
Other 5,286,289
----------
$7,294,727
----------
</TABLE>
- --------------------------------------------------------------------------------
NOTE 6
Unrealized appreciation at April 30, 1996 based on cost of securities for
Federal tax purposes is as follows:
<TABLE>
<CAPTION>
THE
TOCQUEVILLE
FUND
-----------
<S> <C>
Gross unrealized appreciation $11,797,181
Gross unrealized depreciation (1,020,567)
-----------
Net unrealized appreciation $10,776,614
-----------
Cost of investments $29,325,449
-----------
</TABLE>
- --------------------------------------------------------------------------------
12
<PAGE>
The Tocqueville Small Cap Value Fund
- --------------------------------------------------------------------------------
DEAR FELLOW SHAREHOLDERS:
I am pleased to report that The Tocqueville Small Cap Value
Fund has continued its solid performance. For the six month period
ended April 30, 1996, your portfolio of value stocks posted a
17.11% increase in Net Asset Value to $13.08 per Class A share.
Since inception on August 1, 1994, the Fund has appreciated 42.7%.
This matches the performance of the Russell 2000 Index, which is
the most widely accepted benchmark for small cap stocks. I will try
my best to maintain that performance in the future.
CAUTIOUS OPTIMISM MAINTAINED
Overall, I remain cautiously optimistic about the long-term
economic outlook for the companies which we hold in the Fund's
portfolio. Common stocks represented 89% of assets held on April
30, 1996. U.S. Treasury Bonds and cash equivalents accounted for
the balance.
I have maintained the investment strategy which I outlined in
last year's annual report, and I expect to make few changes in the
near future. FIRST, I continued to reduce the Fund's exposure to
economically sensitive sectors. These now account for approximately
16% of all assets. Remaining holdings in these cyclical sectors in-
clude some of our most price-depressed value stocks. SECOND, I in-
creased the Fund's exposure to "sunrise industries" that have re-
cession resistant characteristics. These include providers of com-
puter software, healthcare, and specialty financial services.
To be specific, 49% of the Fund's assets are now invested in
more recession resistant sectors: Computer Software (17.24%),
Healthcare (15.9%), Communications (10.61%), Financial Services
(9.62%), and Industrial Services (5.69%).
Our next two largest sectors of exposure are fairly recent ad-
ditions to the portfolio. They contain industries which had already
suffered profound economic hardship when we initiated our pur-
chases. These two new sectors include producers of Consumer Non-Du-
rable Goods (9.68%), and leading providers of Drilling Equipment &
Services (9.12%). Purchases in the Drilling Equipment & Services
sector were extremely well timed, and these stocks have appreciated
substantially in recent months. Below is a list of our ten largest
positions, which represent 42% of assets.
13
<PAGE>
- --------------------------------------------------------------------------------
TEN LARGEST POSITIONS
<TABLE>
<S> <C>
Unifirst Corp. (5.69%) Uniform mfg., renting and cleaning
services
Owens & Minor Corp. (5.21%) Wholesaler of medical surgical
supplies
Western National Corp. (4.77%) Tax-deferred annuities & related
products
O'Sullivan Industries Hldgs. Producer of Ready-To-Assemble
(4.69%) furniture
American Travellers Corp. (3.85%) Defined benefit coverage for nursing
home care
Boston Technology, Inc. (3.81%) Voice-mail, E-mail information
processing
Compuware Corp. (3.75%) Computer software, development tools
Analysts International Corp. Contract programming services to
(3.64%) businesses
Bindley Western Ind. (3.40%) Wholesale distribution of prescription
drugs
Scientific-Atlanta Inc. (3.25%) CATV and satellite communication
hardware
</TABLE>
For the benefit of our new shareholders, I will review the ba-
sic tenets of my investment strategy.
LONG-TERM ORIENTATION
I believe that successful investing requires considerable at-
tention to "how much you pay for what you buy," considerable pa-
tience coupled with the willingness to accept some temporary dis-
comfort, and lastly, true long-term commitment. Central to my
thinking is the belief that whatever is taking place today at a
company is the result of strategies implemented many months and
possibly years ago. Consequently, most of my analytical attention
centers on long-term issues, on the theory that if I am correct in
my long-term assessment of the business prospects of an enterprise,
short-term market fluctuations are relatively less important.
In addition, I believe that successful long-term investments
are those made in "good businesses." Consequently, most of my bot-
tom-up analytical work centers on picking "good businesses" from an
entrepreneurial perspective.
14
<PAGE>
- --------------------------------------------------------------------------------
INVESTING WISELY
My concept of "Investing Wisely" means investing in "good
businesses" when they are already down significantly in price. To
that end, I follow these time-tested guidelines:
RULE #1: RESTRICT THE MAJORITY OF NEW PURCHASES TO STOCKS THAT
ARE ALREADY DOWN SUBSTANTIALLY IN PRICE. I very rarely violate that
value-oriented strategy when making new purchases. For example, 19
of the 37 stocks (or 39.5% of assets) owned on April 30, 1996 were
down an average of 28.84% and 44.75% from their last 12 months' and
prior 60 months' highs, respectively. This implies that these
stocks already had some very significant price correction before we
acquired them, and that they already went through some period of
economic hardship. Consequently, many are receiving scant coverage
from Wall Street, some are even receiving negative coverage, and
most represent good value.
RULE #2: SYSTEMATICALLY SCREEN THESE "DOWN AND OUT" STOCKS FOR
FINANCIAL STRENGTH. I believe that financial weakness is most often
indicative of poor business fundamentals. I want to avoid investing
in a poor business, no matter how inexpensive it gets. Conversely,
I have a strong affinity for self-reliant and practically debt-free
companies. My logic is that people who properly manage their fi-
nances are least likely to disappoint me. The average debt-to-capi-
talization ratio of all stocks in the Fund's portfolio is a very
conservative 21.5%, with an equally strong average quick ratio
(cash and receivables/current liabilities) of 2.23 times.
RULE #3: "INVEST TO WIN." While this is by far the most diffi-
cult task, its logic is quite appealing. Starting from a selection
of stocks that have declined substantially in price and retained
their financial strength, I attempt to single out the so-called
"good businesses" that I want to buy and hold for the long term.
What constitutes a "good business" is obviously hard to define.
However, I believe that "good businesses" should have, in addition
to strong finances, some very distinctive features, which I rank in
the following order of importance.
15
<PAGE>
- --------------------------------------------------------------------------------
PICKING GOOD BUSINESSES
. MANAGEMENT INTEGRITY, REPUTATION AND SOCIAL RESPONSIBILITY.
I can not identify a single successful long-term investment lacking
these complementary qualities. I view the level of integrity at the
top of any organization as the single most critical ingredient re-
quired for success over the long term. Integrity directly sets the
tone for the organization's strategies, and it indirectly sets the
intensity of management's commitment to the business. Integrity de-
fuses most adversarial labor-management conflicts, and thus im-
proves productivity. Reputation allows organizations to hire and
retain the best people available, and to stay ahead of their compe-
tition. I view social responsibility as the necessary foundation of
all investment activities.
. GROWTH POTENTIAL. A good investment should offer its owner
solid prospects of long-term growth, profitability, and financial
security. It has already been well publicized that over the very
long term, the fastest growing segments of the mature US economy
may very well be the so-called service industries. This is re-
flected in the 29% mix of service businesses in the Fund's portfo-
lio. Five of our ten largest positions are service stocks: American
Travellers Life Insurance; Analysts International; Compuware Corp.;
Unifirst Corp., and Western National Corp.
. NEW PRODUCTS. Good businesses are always built around very
successful new products. At the moment, seven of our companies have
new products under development that, if successful over the long
term, could very significantly improve their earnings potential.
. PROPRIETARY STRENGTHS. Good businesses often fashion propri-
etary skills into strong competitive tools. For example, nearly all
of the emergency room supplies manufactured by Ballard Medical
Products are protected by patents or proprietary know-how.
. MARKET SHARE POSITION. Good businesses often hold high mar-
ket share positions in their industries. Current portfolio examples
are Cone Mills, which is the world's largest denim producer; Nabors
Industries, the world's largest land driller, Telxon Corp., the
leading US bar-code and wireless data capture systems integrator;
O'Sullivan Industries, the largest US producer of ready-to-assemble
furniture.
16
<PAGE>
- --------------------------------------------------------------------------------
. HIGH INSIDER OWNERSHIP. I am comfortable with high levels of
insider ownership, as long as I see little insider selling. My the-
ory is that insiders with money at risk are most likely to tend to
the business, and to truly manage the enterprise for the long term.
On average, insiders owned 22.57% of the stocks in the Fund's port-
folio, and eight of our stocks had insider ownership levels of 40%
or more.
. REPEAT SALES AND CUSTOMER BASE. Good businesses generally
have a close day-to-day working relationship with their customers.
Over the years, good businesses build up an installed base of sat-
isfied "pre-sold" customers by simply providing value-added servic-
es. Such businesses eventually benefit from a fairly steady flow of
repeat sales, as well as growing maintenance, repair and overhaul
activities. Eight of our 37 stocks have a relatively high mix of
repeat sales, and four of these are among our ten largest posi-
tions: American Travellers Corp., Analysts International, Unifirst
Corp., and Western National Corp.
In closing, I welcome questions or comments which you may
have, and I thank you for choosing The Tocqueville Small Cap Value
Fund to realize your long-term investment objectives.
Jean-Pierre Conreur
Portfolio Manager
17
<PAGE>
THE TOCQUEVILLE SMALL CAP VALUE FUND
SELECTED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
CLASS A CLASS B CLASS A CLASS B
------- ------- ------- -------
PER SHARE OPERATING FOR THE SIX PERIOD FROM PERIOD FROM
PERFORMANCE MONTHS ENDED AUGUST 1, 1994 AUGUST 14, 1995
(FOR A SHARE OUTSTANDING APRIL 30, YEAR ENDED TO TO
THROUGHOUT 1996 OCTOBER 31, 1995 OCTOBER 31, 1994 OCTOBER 31, 1995
THE PERIOD) -------------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period $ 11.91 $11.87 $10.22 $10.00 $12.35
------- ------ ------ ------ ------
Income from investment
operations:
Net investment (loss) (0.25)(a) (0.29)(b) (0.05)(e) 0.02(f) --
Net realized and
unrealized gain 2.19 2.19 1.96 0.20 (0.48)
------- ------ ------ ------ ------
Total from investment
operations 1.94 1.90 1.91 0.22 (0.48)
------- ------ ------ ------ ------
Less distributions
Dividends from net in-
vestment income -- -- (0.03) -- --
Distributions from net
realized gains (0.77) (0.77) (0.19) -- --
------- ------ ------ ------ ------
Total distributions (0.77) (0.77) (0.22) -- --
------- ------ ------ ------ ------
Change in net asset
value for the period 1.17 1.13 1.69 0.22 (0.48)
------- ------ ------ ------ ------
Net asset value, end of
period $ 13.08 $13.00 $11.91 $10.22 $11.87
------- ------ ------ ------ ------
Total Return (c)(d) 17.1% 16.8% 19.22% 2.20% (3.89)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of pe-
riod (000 for Class A) $11,400 $8,943 $9,383 $6,755 $192
Ratio of average net as-
sets of:
Expenses (a)(b) 2.17%*(a) 2.17%*(b) 2.50 %(e) 2.08%*(f) --
Net investment loss (0.84)%*(a) (0.84)%*(b) (0.53)%(e) 0.85%*(f) --
Portfolio turnover rate 91%* -- 87.91 % 9.40%
</TABLE>
- --------
(a)Net of fees waived amounting to 0.40% of average net assets for the period
ended April 30, 1996.
(b)Net of fees waived amounting to 0.90% of average net assets for the period
ended April 30, 1996.
(c)Does not include maximum sales load of 4% for Class A shares.
(d)Does not include contingent deferred sales charge on Class B shares. Not
annualized.
(e)Net of fees waived amounting to 0.33% of average net assets for the period
ended October 31, 1995.
(f)Net of fees waived amounting to 0.75% of average net assets for the period
ended October 31, 1994.
*Annualized.
18
<PAGE>
THE TOCQUEVILLE SMALL CAP VALUE FUND
INVESTMENTS AS OF APRIL 30, 1996
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market % of
COMMON STOCKS--89.1% Shares Value Net Assets
- --------------------------------------------------------------
<S> <C> <C> <C>
COMMUNICATIONS/
CONTENT PROVIDER--10.8%
Acclaim Entertainment, Inc. (a) 15,000 $ 154,688 1.36%
Boston Technology, Inc. (a) 25,000 434,375 3.81%
DMX, Inc. (a) 75,000 150,000 1.32%
Scientific-Atlanta, Inc. 20,000 370,000 3.25%
Wave Technologies Intl., Inc. (a) 24,000 126,000 1.10%
- --------------------------------------------------------------
1,235,063
- --------------------------------------------------------------
COMPUTER SOFTWARE &
SERVICES--17.2%
Alphanet Solutions (a) 10,000 100,000 0.88%
Analysts Intl. Corp. 11,000 415,250 3.64%
Compuware Corp. (a) 15,000 427,500 3.75%
Keane, Inc. (a) 7,500 295,313 2.59%
National Computer Sys., Inc. 15,000 326,250 2.86%
Platinum Technology (a) 8,000 117,000 1.03%
Symantec Corp. (a) 10,000 161,250 1.41%
Timberline Software Corp. 7,500 121,875 1.07%
- --------------------------------------------------------------
1,964,438
- --------------------------------------------------------------
CONSUMER--NON-DURABLE--9.7%
Cone Mills Corp. (a) 25,000 284,375 2.49%
Franklin Quest (a) 10,000 270,000 2.37%
Nelson Thomas 10,000 136,250 1.20%
Tasty Baking Corp. 15,000 163,125 1.43%
Ultrak Inc. (a) 20,000 250,000 2.19%
- --------------------------------------------------------------
1,103,750
- --------------------------------------------------------------
DRILLING EQUIPMENT &
SERVICES--9.1%
Global Industries, Inc. (a) 4,000 103,000 0.90%
Nabors Industries, Inc. (a) 24,000 369,000 3.24%
Oceaneering Intl., Inc. (a) 20,000 315,000 2.76%
Pool Energy Services Corp. (a) 20,000 252,500 2.21%
- --------------------------------------------------------------
1,039,500
- --------------------------------------------------------------
FINANCIAL SERVICES--9.6%
American Travellers Corp. (a) 22,500 438,750 3.85%
Life USA Hldgs., Inc. (a) 12,500 114,063 1.00%
Western National Corp. 30,000 543,750 4.77%
- --------------------------------------------------------------
1,096,563
- --------------------------------------------------------------
FURNITURE (RTA)--4.7%
O'Sullivan Industries (a) 75,000 534,375 4.69%
- --------------------------------------------------------------
534,375
- --------------------------------------------------------------
HEALTH CARE--15.9%
Ballard Medical Products 18,000 357,750 3.14%
Bindley Western, Inc. 25,000 387,500 3.40%
Novametrix Med. Sys., Inc. (a) 30,000 176,250 1.55%
</TABLE>
(a) Non-income producing securities
See Notes to Financial statements
<TABLE>
<CAPTION>
COMMON STOCKS Market % of
(CONTINUED) Shares Value Net Assets
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
HEALTH CARE (CONTINUED)
Owens & Minor, Inc. New 44,000 $ 594,000 5.21%
Staar Surgical Co. (a) 10,000 130,000 1.14%
Sullivan Dental Products 15,000 166,875 1.46%
- -------------------------------------------------------------------------------
1,812,375
- -------------------------------------------------------------------------------
INDUSTRIAL SERVICES--5.7%
Unifirst Corp. 27,000 648,000 5.69%
- -------------------------------------------------------------------------------
648,000
- -------------------------------------------------------------------------------
MANUFACTURING--3.6%
Gorman Rupp Co. 15,000 221,250 1.94%
Telxon, Corp. 8,000 184,000 1.61%
- -------------------------------------------------------------------------------
405,250
- -------------------------------------------------------------------------------
SPECIALTY CHEMICALS--2.8%
Sybron Chem, Inc. (a) 15,000 199,688 1.75%
Univar Corp. 10,000 116,250 1.02%
- -------------------------------------------------------------------------------
315,938
- -------------------------------------------------------------------------------
Total Common Stocks
(Cost $8,077,103) 10,155,252
- -------------------------------------------------------------------------------
U.S. GOVERNMENT
AGENCY BONDS--1.7%
U.S. Treasury Notes,
5.5% due 7/31/97 200,000 199,312 1.75%
- -------------------------------------------------------------------------------
Total U.S. Government
Agency Bonds
(Cost $197,344) 199,312
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--8.1%
U.S. Treasury Bills, 4.86%, 7/25/96 300,000 296,458 2.60%
U.S. Treasury Bills, 4.76%, 1/09/97 200,000 193,142 1.70%
Repurchase Agreement, State Street Bank & Trust
Company, dated 4/30/96, due 5/01/96, 2%
(Collateralized by U.S. Treasury Notes valued
at $452,781. Repurchase proceeds of $439,024
(Cost $439,000.) 439,000 439,000 3.85%
- -------------------------------------------------------------------------------
Total Short-Term Investments
(Cost $928,600) 928,600
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $9,203,047)--98.9% $11,283,164
OTHER ASSETS & LIABILITIES,
NET--1.1% 116,465
- -------------------------------------------------------------------------------
TOTAL NET ASSETS--100.0% $11,399,629
-----------
</TABLE>
19
<PAGE>
THE TOCQUEVILLE SMALL CAP VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at values (identified cost $9,203,047) $11,283,164
Cash 164
Receivable for investments sold 241,913
Receivable for Fund shares sold 10,790
Dividends and interest receivable 4,424
Deferred organization expense 20,635
Other assets 6,219
-----------
$11,567,309
-----------
LIABILITIES
Payable for investments
purchased 129,025
Accrued investment
adviser's fee 6,707
Accrued
expenses 31,948
-----------
$ 167,680
-----------
NET ASSETS $11,399,629
-----------
At April 30, 1996 net assets
consisted of:
Capital
paid in $ 8,957,394
Undistributed net investment
income (95,887)
Net accumulated undistributed
realized gain 458,005
Net unrealized
appreciation 2,080,117
-----------
$11,399,629
-----------
CLASS
A
NET ASSET VALUE PER SHARE ($11,390,558/870,877 shares
outstanding) $13.08
------
Maximum offering price
($13.08/96%) $13.63
------
CLASS
B
NET ASSET VALUE PER SHARE AND MAXIMUM OFFERING PRICE ($9,071/698 shares
outstanding) $13.00
------
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
THE TOCQUEVILLE SMALL CAP VALUE FUND
STATEMENT OF OPERATIONS
Six Months Ended April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends $ 39,600
Interest 28,374
----------
67,974
----------
EXPENSES
Investment adviser's fee (Note 2) 38,102
Custodian and fund accounting 33,670
Transfer agent and shareholder services 15,470
Professional fees 11,830
Distribution (Note 4)
Class A 25,509
Class B 11
Administration fee (Note 4) 7,653
Printing 1,820
Registration 4,550
Trustees fee 910
Fidelity bond 910
Amortization of organization costs 3,154
Other 497
----------
Total expenses 144,086
Less: Fees waived (Note 4) (33,173)
----------
Net expenses 110,913
----------
NET INVESTMENT INCOME (LOSS) (42,939)
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 410,157
Net unrealized appreciation of investments during the period 1,318,024
----------
Net gain on investments 1,728,181
----------
Net increase in net assets resulting from operations $1,685,242
----------
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
THE TOCQUEVILLE SMALL CAP VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED FOR THE YEAR
APRIL 30, 1996 ENDED
(UNAUDITED) OCTOBER 31, 1995
------------------ ----------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net investment (loss) $ (42,939) $ (41,698)
Net realized gain 410,157 646,730
Net unrealized appreciation 1,318,024 756,936
----------- ----------
Net increase resulting from operations 1,685,242 1,361,968
Distributions to shareholders from:
Net investment income
Class A -- (3,482)
Class B -- 0
Net realized gain on investments
Class A (600,693) (142,447)
Class B (12) 0
Fund share transactions (Note 3)
Class A 924,582 1,411,298
Class B 8,009 200
----------- ----------
Net increase in net assets 2,017,128 2,627,537
NET ASSETS
Beginning of period 9,382,501 6,754,964
----------- ----------
End of period $11,399,629 $9,382,501
----------- ----------
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
THE TOCQUEVILLE SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
(unaudited)
- --------------------------------------------------------------------------------
NOTE 1
The Tocqueville Trust (the "Trust") was organized as a Massachusetts business
trust registered under the Investment Company Act of 1940 as amended, as a di-
versified, open-end management investment company. The Trust consists of five
separate Funds: The Tocqueville Fund, The Tocqueville Asia-Pacific Fund, The
Tocqueville Small Cap Value Fund, The Tocqueville Europe Fund and the
Tocqueville Government Fund (the "Funds"). The following is a summary of sig-
nificant accounting principles followed by the Trust in the preparation of its
financial statements.
- --------------------------------------------------------------------------------
SECURITY VALUATION
Investments in securities, including foreign securities, traded on an ex-
change or quoted on the over-the-counter market are valued at the last sale
price or, if no sale occurred during the day, at the mean between closing bid
and asked prices, as last reported by a pricing service approved by the Trust-
ees. When market quotations are not readily available, or when restricted secu-
rities or other assets are being valued, such assets are valued at fair value
as determined in good faith by or under procedures established by the Trustees.
Short-term investments are stated at cost which, together with accrued inter-
est, approximates market value.
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
It is the Trust's policy to comply with the provisions of the Internal Reve-
nue Code ("Code") applicable to regulated investment companies and to distrib-
ute all of its taxable income to its shareholders. It is also the Trust's in-
tention to distribute amounts sufficient to avoid imposition of any excise tax
under Section 4982 of the Code. Therefore, no federal income or excise tax pro-
vision is required.
- --------------------------------------------------------------------------------
DEFERRED ORGANIZATION EXPENSES
Expenses incurred in connection with the organization of The Tocqueville
Small Cap Value Fund (the "Fund") are being amortized on a straight-line basis
over a five-year period from the Fund's commencement of operations. In the
event any initial shares of The Tocqueville Small Cap Value Fund are redeemed
during the amortization period, the proceeds of redemption will be reduced by
the pro-rata portion of any unamortized organization expenses in the same pro-
portion as the number of shares redeemed bears to the number of initial shares
held at the time of redemption.
- --------------------------------------------------------------------------------
OTHER
Security transactions are accounted for on the trade date, the date the order
to buy or sell is executed. Dividend income is recognized on the ex-dividend
date or at the time the Fund becomes aware, whichever is earlier. Interest in-
come is recognized on the accrual basis and market discount is accounted for on
the effective interest method. The Trust uses the first-in, first-out method
for determining realized gain or loss on investments
23
<PAGE>
sold for both financial reporting and federal tax purposes. Distributions to
shareholders are recorded on the ex-dividend date. Expenses incurred by the
Trust not specifically identified to a Fund are allocated on a basis relative
to the size of each Fund's daily net asset value.
- --------------------------------------------------------------------------------
NOTE 2
Tocqueville Asset Management L.P. ("Tocqueville"), is the investment adviser
to the Trust under an Investment Advisory Agreement approved by shareholders on
February 26, 1990. For its services, Tocqueville receives a fee from The
Tocqueville Small Cap Value Fund, payable monthly, at an annual rate of .75% of
the first $100 million of the Fund's average daily net assets, .70% of the next
$400 million of average daily net assets, and .65% of average daily net assets
in excess of $500 million.
Certain states in which shares of the Trust are qualified for sale imposed
limitations on the expenses of the Trust. The Advisory Agreement provides that
if, in any fiscal year, the total expenses of the Trust (excluding taxes, in-
terest, extraordinary expenses and the distribution fee but including the Ad-
viser's fee) exceed the expense limitation applicable to the Trust imposed by
the securities regulations of any state in which it is registered to sell
shares, Tocqueville will pay or reimburse the Trust for that excess up to the
amount of its fee. The most restrictive limitation currently applicable (ex-
cluding the items described above) limits a fund to 2.5% of the Trust's first
$30,000,000 of average daily net assets, 2% of the next $70,000,000, and 1.5%
of the Trust's average daily net assets over $100,000,000. No such reimburse-
ment was required for the six months ended April 30, 1996.
- --------------------------------------------------------------------------------
24
<PAGE>
- --------------------------------------------------------------------------------
NOTE 3
Effective August 14, 1995 the Fund offered two classes of shares: Class A and
Class B shares. Shares of each class are identical except for the initial sales
load on Class A shares, a contingent deferred sales charge on Class B shares,
distribution fees, and voting rights on matters effecting a single class. All
Fund shares outstanding before August 14, 1995 were designated as Class A
shares. At April 30, 1996, there were an unlimited number of shares of benefi-
cial interest authorized ($0.01 par value). Transactions in the Fund's shares
were as follows:
<TABLE>
<CAPTION>
CLASS A
-------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
---------------- ----------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold 167,975 $1,970,920 146,814 $1,651,218
Shares issued on reinvest-
ment of dividends 45,104 523,196 13,078 125,021
Shares redeemed (129,715) (1,569,534) (33,611) (364,941)
-------- ---------- ------- ----------
Net increase 83,364 $924,582 126,281 $1,411,298
-------- ---------- ------- ----------
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-------
FOR THE
PERIOD FROM
AUGUST 14, 1995
SIX MONTHS ENDED THROUGH
APRIL 30, 1996 OCTOBER 31, 1995
---------------- ----------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold 681 $ 8,000 16 $ 200
Shares issued on reinvestment
of dividends 1 9 -- --
Shares redeemed -- -- -- --
------ --------- ------- --------
Net increase 682 $ 8,009 16 $ 200
------ --------- ------- --------
</TABLE>
25
<PAGE>
- --------------------------------------------------------------------------------
NOTE 4
Tocqueville Securities L.P. (the "Distributor") acts as distributor for
shares of the Fund and purchases shares of the Fund at net asset value to fill
orders as received from investment dealers. For the six months ended April 30,
1996, the Distributor received net commissions of $280 from the sale of the
Fund's shares.
The Fund has adopted distribution plans related to the sale of Class A and
Class B shares pursuant to which the Fund may incur distribution expenses in
amounts not to exceed 0.25% and 0.75% per annum of the average daily net assets
of Class A and Class B shares, respectively. Such expenses may include, but are
not limited to, advertising, printing, and distribution of sales literature,
prospectuses and other materials, and payments to dealers and shareholders ser-
vicing agents including the Distributor. Under the distribution plans, the Dis-
tributor is permitted to carry forward expenses not reimbursed by the distribu-
tion fees to subsequent fiscal years for submission to the Fund for payment,
subject to the continuation of the Plan. For the six months ended April 30,
1996, the Distributor has waived distribution fees of $25,509 and $11, respec-
tively for Class A and Class B shares. The Distributor has informed the Trust
that, as of March 31, 1996, there were $62,300 in unreimbursed expenses for the
Fund.
Class B shares which are redeemed within six years of purchase are subject to
a contingent deferred sales charge at rates ranging from 5% to 0%, charged as a
percentage of the dollar amount subject thereto. There were no deferred sales
charges paid to the Distributor for the six months ended April 30, 1996.
Commissions earned by the Distributor for services rendered as registered
broker-dealer in securities transactions for the Fund for the six months ended
April 30, 1996 were $15,941.
Pursuant to an Administrative Services Agreement, effective September 15,
1995, the Fund pays to the Distributor a fee computed and paid monthly at an
annual rate of 0.15% of the average daily net assets of the Fund. During the
six months ended April 30, 1996, the Distributor waived administration fees of
$7,653.
26
<PAGE>
- --------------------------------------------------------------------------------
NOTE 5
Purchases and sales of investment securities (excluding short-term instru-
ments) for the six months ended April 30, 1996 were as follows:
<TABLE>
<CAPTION>
THE
TOCQUEVILLE
SMALL CAP
VALUE FUND
-----------
<S> <C>
PURCHASES
U.S. Government $ --
Other 4,651,759
----------
$4,651,759
----------
SALES
U.S. Government $ --
Other 4,872,740
----------
$4,872,740
----------
</TABLE>
- --------------------------------------------------------------------------------
NOTE 6
Unrealized appreciation at April 30, 1996 based on cost of securities for
Federal tax purposes is as follows:
<TABLE>
<CAPTION>
THE
TOCQUEVILLE
SMALL CAP
VALUE FUND
-----------
<S> <C>
Gross unrealized appreciation $2,326,985
Gross unrealized depreciation (246,868)
----------
Net unrealized appreciation $2,080,117
----------
Cost of investments $9,203,047
----------
</TABLE>
- --------------------------------------------------------------------------------
27
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
28
<PAGE>
The Tocqueville Asia-Pacific Fund
- --------------------------------------------------------------------------------
DEAR FELLOW SHAREHOLDERS:
During the first half of our fiscal year, from November 1,
1995 to April 30, 1996, the net asset value of a Class A share of
The Tocqueville Asia-Pacific Fund increased 15.9%, vs. an increase
of 18.0% of the Morgan Stanley Pacific Index.
This performance was helped by two factors: 1) a decision to
increase our portfolio's exposure to the fast growing economies of
the Philippines and Indonesia, and 2) the good performance of sev-
eral individual stock selections.
We continue to anticipate short-term economic and financial
volatility in the region, in response to economic and financial
trends in the United States, as well as to political and trade de-
velopments in China. As a result, we plan to invest the proceeds
from recent subscriptions to the Fund slowly, taking advantage of
occasional price corrections in individual stocks or markets.
Fortunately, there is a growing number of medium-sized, good
quality companies in which to invest in the region. Very often,
these are companies in industries that would be mature and slow-
growing in Japan, Europe or the United States. Locally, however,
the early stage of development and powerful demographics are al-
lowing them to experience superior growth rates that are not always
reflected in their stock market valuations.
In addition, we believe that there are opportunities to
achieve excellent long-term growth by concentrating on a niche seg-
ment of the market between the two big classes of investors: large
international institutions whose massive purchases and sales of
large capitalization stocks can disrupt markets and move prices
without much fundamental reason, and local investors who often tend
to be mostly interested in short-term trading.
While still concerned about the possible impact of a U.S.
slowdown on the economies of the region, we have grown more confi-
dent about the long-term potential of many of our portfolio compa-
nies. As a result, we plan to add to these positions every time op-
portunities arise.
Francois Sicart
Portfolio Manager
29
<PAGE>
- --------------------------------------------------------------------------------
TOP TEN HOLDINGS
<TABLE>
<S> <C>
Woodside Petroleum
(4.11%) Strong exploration activity should boost profit growth.
Fisher & Paykel
(4.10%) Fairly valued in the decline whiteware market.
Amploex Ltd. (3.46%) Important underdeveloped reserves. Mobil should improve
the bid for a takeover.
Manhattan Card Co., Beneficiary of strong credit card and consumer finance in
(4.59%) Hong Kong.
High growth potential in China.
China Apollo Hldgs. Largest manufacturer and distributor of tonic and herbal
(3.45%) medicine
drink in China. Strong marketing should boost brand name.
Rohm Co. (3.39%) Cheap valuation at 19 times earnings compared to Japanese
market.
Double digit growth in IC sales should boost results.
DMCI Holdings (3.32%) Lead constructor in Philippines with strong balance sheet
and huge
order book.
Citra Marga Nusaphala Toll road operator with high operating and net margins at
(3.13%) 70% and
61%, respectively.
Samsung Electronics Cheap valuation at 4 times earnings. Lower DRAM
(2.90%) production should stabilize DRAM price and thus boost its
results.
House of Investment Beneficiary of high growth in consumer finance and in
(2.85%) road construction.
</TABLE>
30
<PAGE>
THE TOCQUEVILLE ASIA-PACIFIC FUND
SELECTED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
CLASS A CLASS B CLASS A CLASS B
------- ------- ------- -------
FOR THE PERIOD FROM PERIOD FROM
SIX MONTHS NOVEMBER 12, AUGUST 14,
PER SHARE OPERATING ENDED YEAR ENDED OCTOBER 31, 1991 TO 1995 TO
PERFORMANCE APRIL 30, ---------------------- OCTOBER 31, OCTOBER 31,
(FOR A SHARE OUTSTANDING 1996 1995 1994 1993 1992 1994
THROUGHOUT THE PERIOD) -------------------- ---- ---- ---- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 9.07 $ 9.03 $ 12.16 $ 11.26 $ 10.50 $10.00 $9.35
------ ------ -------- ------- ------- ------ -----
Income from investment
operations:
Net investment income
(loss) 0.03(a) 0.01(b) (0.01)(e) (0.05)(f) (0.21) (0.07)(g) 0.00
Net realized and
unrealized gain 1.41 1.41 (1.39) 1.45 1.62 0.57 (0.32)
------ ------ -------- ------- ------- ------ -----
Total from investment
operations 1.44 1.42 (1.40) 1.40 1.41 0.50 (0.32)
------ ------ -------- ------- ------- ------ -----
Less distributions
Dividends from net
investment income -- -- 0.00 0.00 0.00 0.00 --
Distributions from net
realized gains -- -- (1.69) (0.50) (0.65) (0.00) --
------ ------ -------- ------- ------- ------ -----
Total distributions -- -- (1.69) (0.50) (0.65) (0.00) --
------ ------ -------- ------- ------- ------ -----
Change in net asset
value for the period 1.44 1.42 (3.09) 0.90 0.76 0.50 --
------ ------ -------- ------- ------- ------ -----
Net asset value, end of
period $10.51 $10.45 $ 9.07 $ 12.16 $ 11.26 $10.50 $9.03
------ ------ -------- ------- ------- ------ -----
Total Return (c)(d) 15.9% 15.9% (11.63)% 12.81% 15.00% 5.00% (3.42)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year
(000 for Class A) $5,634 $ 224 $ 4,686 $ 5,187 $ 3,886 $1,898 $ 193
Ratio of average net
assets of:
Expenses 3.44%*(a) 3.44%*(b) 3.55%(e) 2.82%(f) 4.63% 4.90%(g)* --
Net investment income 0.46%*(a) 0.46%*(b) (0.26)%(e) (0.87)%(f) (2.42)% (0.73)%(g)* --
Portfolio turnover rate 107%* -- 106% 168% 216% 101% --
</TABLE>
- --------
(a) Net of fees waived amounting to 1.40% of average net assets for the period
ended April 30, 1996.
(b) Net of fees waived amounting to 1.90% of average net assets for the period
ended April 30, 1996.
(c) Does not include maximum sales charge of 4% on Class A shares.
(d) Does not include contingent deferred sales charge for Class B shares. Not
annualized.
(e) Net of fees waived amounting to 1.27% of average net assets for the year
ended October 31, 1995.
(f) Net of fees waived amounting to 1.00% of average net assets for the year
ended October 31, 1994.
(g) Net of fees waived amounting to 0.28% of average net assets for the period
ended October 31, 1992.
*Annualized
31
<PAGE>
THE TOCQUEVILLE ASIA-PACIFIC FUND
INVESTMENTS AS OF APRIL 30, 1996
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
US $
Market % of
COMMON STOCKS--95.5% Shares Value Net Assets
- --------------------------------------------------
<S> <C> <C> <C>
AUSTRALIA--17.0%
Ampolex Ltd.(a) 60,000 $205,044 3.64%
Posgold Ltd. 50,000 135,124 2.40%
Crown Ltd.(a) 75,000 153,783 2.73%
QNI Ltd. 35,000 86,613 1.54%
Resolute Samantha 58,571 145,864 2.59%
Woodside Petroleum 40,000 231,283 4.11%
- --------------------------------------------------
957,711
- --------------------------------------------------
HONG KONG--13.3%
ASM Pacific Tech. 150,000 147,372 2.62%
China Apollo Holdings 700,000 194,558 3.45%
Manhattan Card Co. 340,000 202,185 3.59%
Guangdong Investments 220,000 135,802 2.41%
Yips Hang Cheung 500,000 66,576 1.18%
- --------------------------------------------------
746,493
- --------------------------------------------------
INDONESIA--10.2%
Astra International 100,000 147,847 2.62%
Bukaka Teknik Utam 35,000 59,996 1.06%
Citra Marga Nusaph 120,000 176,130 3.13%
Pab K Tjiwi Kimia 70,000 73,495 1.30%
Steady Safe 77,000 114,667 2.04%
- --------------------------------------------------
572,135
</TABLE>
<TABLE>
- ---------------------------------------------
<S> <C> <C> <C>
JAPAN--18.2%
Bank of Tokyo 5,250 121,468 2.16%
FCC Co. Ltd. 2,000 74,573 1.32%
H.I.S. Co. 1,000 58,894 1.05%
Honda Motor Co. 5,000 114,250 2.03%
Meitec Corp. 5,000 110,426 1.96%
Mitsui OSK Lines 33,000 119,891 2.13%
Oiles Corp. 2,000 82,604 1.47%
Paramount Bed Co. 2,200 150,390 2.67%
Rohm Co. 3,000 191,022 3.39%
- ---------------------------------------------
1,023,518
- ---------------------------------------------
MALAYSIA--7.7%
ACP Industries 25,000 122,387 2.17%
Commerce Asset Hldgs. 13,000 88,680 1.57%
Cycle & Carr Bin 15,000 94,499 1.68%
Road Builder 29,000 128,004 2.27%
- ---------------------------------------------
433,570
- ---------------------------------------------
SOUTH KOREA--2.9%
Samsung Electronic 1,200 163,444 2.90%
- ---------------------------------------------
163,444
- ---------------------------------------------
</TABLE>
See Notes to Financial Statements
(a) Non-income producing security
<TABLE>
<CAPTION>
US $
Market % of
COMMON STOCKS (CONTINUED) Shares Value Net Assets
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
NEW ZEALAND--11.9%
Carter Holt Harvey 50,000 $ 118,491 2.10%
Fisher & Paykel 70,400 231,153 4.10%
Fletcher Challenge Paper 50,000 103,036 1.83%
Fletcher Challenge Energy 25,000 53,579 0.95%
Telecom Corp. of New Zealand 25,000 106,127 1.88%
Fletcher Challenge Building 25,000 59,246 1.05%
- -------------------------------------------------------------------------------
671,632
- -------------------------------------------------------------------------------
PHILIPPINES--7.9%%
DMCI Holdings, Inc. 280,000 187,166 3.32%
House of Investments 600,000 160,428 2.85%
Steniel Manufacturing Corp. 700,000 100,267 1.78%
- -------------------------------------------------------------------------------
447,861
- -------------------------------------------------------------------------------
SINGAPORE--4.2%
Dev. Bank of Singapore 11,000 139,290 2.47%
United Overseas Bank 10,000 97,460 1.73%
- -------------------------------------------------------------------------------
236,750
- -------------------------------------------------------------------------------
THAILAND--2.2%
SCF Fin & Sec. Co. 296 786 0.01%
Siam City Bank PLC 40,000 47,931 0.85%
Siam City Credit(a) 235 1,015 0.02%
Thai Farmers Bank 6,400 73,521 1.30%
- -------------------------------------------------------------------------------
123,253
- -------------------------------------------------------------------------------
Total Common Stocks
(Cost $4,859,334) 5,376,367
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--5.1%
Repurchase Agreement, State Street Bank & Trust
Company, dated 4/30/96, due 5/01/96, 2%
(Collateralized by U.S. Treasury Notes valued
at $300,158. Repurchase proceeds of $290,016
(Cost $290,000.) 290,000 $ 290,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $5,149,334)--100.6% $5,666,367
OTHER ASSETS & LIABILITIES,
NET--(0.6)% (32,408)
- -------------------------------------------------------------------------------
TOTAL NET ASSETS--100.0% $5,633,959
----------
</TABLE>
32
<PAGE>
THE TOCQUEVILLE ASIA-PACIFIC FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at values (identified cost $5,149,334) $5,666,367
Cash 161
Dividends and interest receivable 8,749
Other assets 1,529
----------
$5,676,806
----------
LIABILITIES
Accrued expenses 42,847
----------
42,847
----------
NET ASSETS $5,633,959
----------
At April 30, 1996 net assets consisted of:
Capital paid in $5,291,139
Undistributed net investment income (loss) (168,963)
Net accumulated undistributed realized gain (loss) (5,250)
Net unrealized appreciation 517,033
----------
$5,633,959
----------
CLASS A
NET ASSET VALUE PER SHARE ($5,633,735/535,528 shares outstanding) $10.51
----------
Maximum offering price ($10.51/96%) $10.95
----------
CLASS B
NET ASSET VALUE PER SHARE AND MAXIMUM OFFERING PRICE
($224/21 shares outstanding) $10.45
----------
</TABLE>
See Notes to Financial Statements.
33
<PAGE>
THE TOCQUEVILLE ASIA-PACIFIC FUND
STATEMENT OF OPERATIONS
Six Months Ended April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends (net of $4,416 foreign taxes withheld) $ 86,364
Interest 13,145
--------
99,509
--------
EXPENSES
Investment adviser's fee (Note 2) 25,507
Custodian and fund accounting 41,860
Transfer agent and shareholder services 15,470
Professional fees 17,290
Distribution (Note 4)
Class A 6,377
Class B 1
Administration fee (Note 4) 3,826
Printing 1,820
Registration 6,370
Trustees fee 910
Fidelity bond 910
Other 3,214
--------
Total expenses 123,555
Less: Fees waived (Note 4) (35,711)
--------
Net expenses 87,844
--------
NET INVESTMENT INCOME 11,665
--------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on:
Investments 131,794
Foreign currency transactions 53,846
--------
185,640
--------
Net unrealized appreciation (depreciation) on:
Investments 555,024
Foreign currency translation (3)
--------
555,021
--------
Net gain on investments 740,661
--------
Net increase in net assets resulting from operations $752,326
--------
</TABLE>
See Notes to Financial Statements.
34
<PAGE>
THE TOCQUEVILLE ASIA-PACIFIC FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED FOR THE YEAR
APRIL 30, 1996 ENDED
(UNAUDITED) OCTOBER 31, 1995
------------------ ----------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net investment income (loss) $ 11,665 $ (12,765)
Net realized gain (loss) 185,640 (355,199)
Net unrealized appreciation
(depreciation) 555,021 (208,980)
---------- ----------
Net increase (decrease) resulting from
operations 752,326 (576,944)
Distributions to shareholders from:
Net investment income (loss)
Class A 0 0
Class B 0 0
Net realized gain (loss) on investments
Class A 0 (720,093)
Class B 0 0
Fund share transactions (Note 3)
Class A 194,940 796,982
Class B 0 200
---------- ----------
Net Increase in net assets 947,266 (499,855)
NET ASSETS
Beginning of period 4,686,693 5,186,548
---------- ----------
End of period $5,633,959 $4,686,693
---------- ----------
</TABLE>
See Notes to Financial Statements
35
<PAGE>
THE TOCQUEVILLE ASIA-PACIFIC FUND
NOTES TO FINANCIAL STATEMENTS
(unaudited)
- -------------------------------------------------------------------------------
NOTE 1
The Tocqueville Trust (the "Trust") was organized as a Massachusetts busi-
ness trust registered under the Investment Company Act of 1940 as amended, as
a diversified, open-end management investment company. The Trust consists of
five separate Funds: The Tocqueville Fund, The Tocqueville Asia-Pacific Fund,
The Tocqueville Small Cap Value Fund, The Tocqueville Europe Fund and The
Tocqueville Government Fund (the "Funds"). The following is a summary of sig-
nificant accounting principles followed by the Trust in the preparation of its
financial statements.
- -------------------------------------------------------------------------------
SECURITY VALUATION
Investments in securities, including foreign securities, traded on an ex-
change or quoted on the over-the-counter market are valued at the last sale
price or, if no sale occurred during the day, at the mean between closing bid
and asked prices, as last reported by a pricing service approved by the Trust-
ees. When market quotations are not readily available, or when restricted se-
curities or other assets are being valued, such assets are valued at fair
value as determined in good faith by or under procedures established by the
Trustees. Short-term investments are stated at cost which, together with ac-
crued interest, approximates market value.
- -------------------------------------------------------------------------------
FEDERAL INCOME TAX
It is the Trust's policy to comply with the provisions of the Internal Reve-
nue Code ("Code") applicable to regulated investment companies and to distrib-
ute all of its taxable income to its shareholders. It is also the Trust's in-
tention to distribute amounts sufficient to avoid imposition of any excise tax
under Section 4982 of the Code. Therefore, no federal income or excise tax
provision is required.
- -------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION
Investments and other assets and liabilities denominated in foreign curren-
cies are translated to U.S. dollars at the prevailing rates of exchange. The
Tocqueville Asia-Pacific Fund is engaged in transactions in securities denomi-
nated in foreign currencies and, as a result, enters into foreign exchange
contracts. The Fund is exposed to additional market risk as a result of
changes in the value of the underlying currency in relation to the U.S. dol-
lar. The value of foreign currency contracts are "marked to market" on a daily
basis, which reflects the change in the market value of the contract at the
close of each day's trading, resulting in daily unrealized gains and/or loss-
es. When the contracts are closed, the Fund recognizes a realized gain or
loss.
The Fund does not isolate that portion of the results of operations result-
ing from changes in foreign exchange rates on investments from the fluctua-
tions arising from changes in market prices of securities held. Such fluctua-
tions are included with the net realized and unrealized gain or loss from in-
vestments.
36
<PAGE>
Reported net realized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, the differences between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books, and the U.S. dollar equivalent of the amounts actually received
or paid. Net unrealized foreign exchange gains and losses arise from changes in
the value of assets and liabilities other than investments in securities at the
end of the fiscal period, resulting from changes in the exchange rates.
- --------------------------------------------------------------------------------
OTHER
Security transactions are accounted for on the trade date, the date the order
to buy or sell is executed. Dividend income is recognized on the ex-dividend
date or at the time the Fund becomes aware, whichever is earlier. Interest in-
come is recognized on the accrual basis and market discount is accounted for on
a straight-line basis from settlement date. The Trust uses the first-in, first-
out method for determining realized gain or loss on investments sold for both
financial reporting and federal tax purposes. Distributions to shareholders are
recorded on the ex-dividend date. Expenses incurred by the Trust not specifi-
cally identified to a fund are allocated on a basis relative to the size of
each fund's daily net asset value. It is the Fund's policy to take possession
of securities as collateral under repurchase agreements and to determine on a
daily basis that the value of such securities are sufficient to cover the value
of the repurchase agreements.
- --------------------------------------------------------------------------------
NOTE 2
Tocqueville Asset Management L.P. ("Tocqueville"), is the investment adviser
to the Trust under an Investment Advisory Agreement approved by shareholders on
February 26, 1990. For its services, Tocqueville receives a fee from the Fund,
payable monthly, at an annual rate of 1.00% on the first $50 million of its av-
erage daily net assets, .75% of the next $50 million of average daily net as-
sets, and .65% of average daily net assets in excess of $100 million.
Certain states in which shares of the Trust are qualified for sale impose
limitations on the expenses of the Trust. The Advisory Agreement provides that
if, in any fiscal year, the total expenses of the Trust (excluding taxes, in-
terest, extraordinary expenses and the distribution fee but including the Ad-
viser's fee) exceed the expense limitation applicable to the Trust imposed by
the securities regulations of any state in which it is registered to sell
shares, Tocqueville will pay or reimburse the Trust for that excess up to the
amount of its fee. The most restrictive limitation currently applicable (ex-
cluding the items described above) limits a fund to 2.5% of the Trust's first
$30,000,000 of average daily net assets, 2% of the next $70,000,000, and 1.5%
of the Trust's average daily net assets over $100,000,000. The Adviser waived
its management advisory fee for the year ended April 30, 1996, aggregating
$25,507, due to this limitation.
- --------------------------------------------------------------------------------
37
<PAGE>
- -------------------------------------------------------------------------------
NOTE 3
Effective August 14, 1995 the Fund offered two classes of shares: Class A
and Class B shares. Shares of each class are identical except for the initial
sales load on Class A shares, a contingent deferred sales charge on Class B
shares, distribution fees, and voting rights on matters effecting a single
class. All Fund shares outstanding before August 14, 1995 were designated as
Class A shares. At April 30, 1996, there were an unlimited number of shares of
beneficial interest authorized ($0.01 par value). Transactions in the Fund's
shares were:
<TABLE>
<CAPTION>
CLASS A
-------
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
-------------- ----------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold 30,954 303,823 140,708 $1,243,264
Shares issued on reinvestment
of distributions 0 0 50,479 461,895
Shares redeemed (11,566) (108,883) (101,157) (908,177)
------- -------- -------- ----------
Net increase 19,388 194,940 90,030 $ 786,982
------- -------- -------- ----------
</TABLE>
<TABLE>
<CAPTION>
CLASS B
-------
SIX MONTHS PERIOD FROM
ENDED AUGUST 14, 1995
APRIL 30, 1996 TO OCTOBER 31, 1995
----------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
------- ------- --------- ----------
<S> <C> <C> <C> <C>
Shares sold 0 0 21 $ 200
Shares redeemed 0 0 -- --
------- ------- --------- ----------
Net increase 0 0 21 $ 200
------- ------- --------- ----------
</TABLE>
- -------------------------------------------------------------------------------
NOTE 4
Tocqueville Securities L.P. (the "Distributor") acts as distributor for
shares of the Fund and purchases shares of the Fund at net asset value to fill
orders as received from investment dealers. For the six months ended April 30,
1996, the Distributor received no net commissions from the sale of the Fund's
shares.
The Fund has adopted distribution plans related to the sale of Class A and
Class B shares pursuant to which the Fund may incur distribution expenses in
an amount not to exceed 0.25% and 0.75% per annum of the average daily net as-
sets of Class A and Class B shares, respectively. Such expenses may include,
but are not limited to, advertising, printing, and distribution of sales lit-
erature, prospectuses and other materials, and payments to dealers and share-
holders servicing agents including the Distributor. Under the distribution
plans, the Distributor is permitted to carry forward expenses not reimbursed
by the distribution fees to subsequent fiscal years for submission to the Fund
for payment, subject to the continuation of the Plan. For the six months end-
ed. April 30, 1996, the Distributor has waived distribution fees of $6,377 and
$1, respectively, for Class A and Class B shares. The Distributor has informed
the Trust that, as of March 31, 1996 there were $65,479 in unreimbursed ex-
penses for the Fund.
38
<PAGE>
Class B shares which are redeemed within six years of purchase are subject to
a contingent deferred sales charge at rates ranging from 5% to 0%, charged as a
percentage of the dollar amount subject thereto. There were no contingent de-
ferred sales charges paid to the Distributor for the six months ended April 30,
1996.
Pursuant to an Administrative Services Agreement, effective September 15,
1995, the Fund pays to the Distributor a fee computed and paid monthly at an
annual rate of 0.15% of the average daily net assets of the Fund. During the
six months ended April 30, 1996, the Distributor waived administration fees of
$3,826.
- --------------------------------------------------------------------------------
NOTE 5
Purchases and sales of investment securities (excluding short-term instru-
ments) for the six months ended April 30, 1996 were as follows:
<TABLE>
<CAPTION>
THE
TOCQUEVILLE
ASIA-
PACIFIC
FUND
-----------
<S> <C>
PURCHASES
U.S. Government $ --
Other 3,580,639
----------
$3,580,639
----------
SALES
U.S. Government $ --
Other 2,736,127
----------
$2,736,127
----------
</TABLE>
- --------------------------------------------------------------------------------
39
<PAGE>
- --------------------------------------------------------------------------------
NOTE 6
Unrealized depreciation at April 30, 1996 based on cost of securities for
Federal tax purposes is as follows:
<TABLE>
<CAPTION>
THE
TOCQUEVILLE
ASIA-
PACIFIC
FUND
-----------
<S> <C>
Gross unrealized appreciation $ 712,780
Gross unrealized depreciation (195,747)
----------
Net unrealized appreciation $ 517,033
----------
Cost of investments $5,149,334
----------
</TABLE>
At April 30, 1996, the Fund had tax basis capital losses of $347,699 avail-
able to offset future gains through October 31, 2003.
- --------------------------------------------------------------------------------
40
<PAGE>
The Tocqueville Europe Fund
- --------------------------------------------------------------------------------
DEAR FELLOW SHAREHOLDERS:
During the first half of our Fund's fiscal year, from November
1, 1995 to April 30, 1996, the Net Asset Value of a Class A share
of The Tocqueville Europe Fund increased 10.8% vs. 8.5% for the
Morgan Stanley Europe Index.
This performance was helped by our decision, last winter, to
significantly increase our exposure to the French market in the
midst of massive strikes that were crippling the country. The end
of the strikes, as well as a stronger tone of the French Franc
against the D-Mark, have allowed for a significant easing of mone-
tary policy which, in turn, has produced a strong rally in the
French stock market.
While there may well be a pause in this rally in the next few
months, we are impressed by the operating progress made by many me-
dium-sized companies. This is reflected in good sales growth in
spite of a stagnant domestic economy, as many small companies have
developed significant export markets over the last couple of years.
We believe that any recovery in domestic demand will be accompanied
by a strong expansion of operating margins, and that this will al-
low for a powerful second leg of the bull market at some point.
To some extent, similar observations can be made for other
markets in southern Europe, such as Italy and Spain. With their
currencies stabilizing (under a less powerful D-Mark), these coun-
tries seem capable of recovering from both economic recession and
political instability. Since many medium-sized companies in these
markets sell at valuations which seem compelling, we are in the
process of increasing our exposure to Italian and Spanish stocks,
while reducing positions in Germany--a country only now discovering
its deep-rooted problems.
However, in Europe as in the United States, stock selection is
more important than market timing. As a result, much of our effort
centers on identifying companies with superior long-term potential
at attractive valuations.
Francois Sicart
Portfolio Manager
41
<PAGE>
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
Lagardere Groupe (4.00%) Defense, transportation and communications are the main
activities. The company participates to redefine the
concept of defense for the European frontier. Improving
debt structure should boost earnings.
<C> <S>
Carbonne Lorraine (3.71%) World's leading company in graphite and in elaborated
carbon for brakes, electrical engines, nuclear
air/watertightness, basic chemical. Carbonne Lorraine
enjoys economic expansion in North America and in Asia.
UGC Droits Audio Visual (3.61%) The company has the largest movie collection in France.
European TV operators might be looking for a takeover to
acquire this collection.
Royal Dutch Petroleum (3.42%) The world's largest private petroleum and gas company by
turnover and by reserves. Good management, high
profitability (the best in the sector) and high yield to
investors deserves a hold for this company.
SEMA Group (3.27%) One of the leading European groups in information
technology. Its know-how in consulting engineering,
integrated systems, softwares, outsourcing, its networks
in Europe and Asia, and its past track-record are the
best arms for its future development.
Rubis et Cie (3.17%) Positioned itself between public petroleum company and
public/private distribution companies, Rubis should
benefit from this arbiter position to strengthen itself
as the first independent French petroleum storage company
and as the first French gas storage and distribution
company.
Emin Leydier (2.98%) The last family group engaged in the production of
corrugated paper and paper-box. With its new machineries,
and low cost structure, the group is attempting to
develop in the Spanish and Asian markets.
Faiveley (2.98%) Faiveley is the world's leading manufacturer of doors,
pantographs, air conditioning for rail vehicles, and
event recorders. By acquiring its German competitor
Hagenuk, Faiveley strengthens its leading positions in
Europe, Brazil, Japan and China. The group is a
beneficiary of lower steel prices and high-value order
books.
Getronics NV (2.70%) Largest independent Dutch brand supplier of computer
services, Getronics engages in information technology and
telecommunications. Turnover will reach 2082 million
florins in 1997 (vs 1410 million in 1994) and net profit
137.5 million florins (vs. 80.2).
Chargeurs S.A. (2.59%) The forthcoming separation into 2 listed companies should
allow Chargeurs to get better financing conditions for
its development. Communication (Pathe), movies (B-Sky-B)
and textile (Chargeurs Laine).
</TABLE>
42
<PAGE>
THE TOCQUEVILLE EUROPE FUND
SELECTED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
CLASS A CLASS B CLASS A CLASS B
------- ------- ------- -------
FOR THE
PER SHARE OPERATING SIX MONTHS PERIOD FROM PERIOD FROM
PERFORMANCE ENDED YEAR ENDED AUGUST 1, 1994 AUGUST 14, 1995
(FOR A SHARE OUTSTANDING APRIL 30, OCTOBER 31, TO TO
THROUGHOUT 1996 1995 OCTOBER 31, 1994 OCTOBER 31, 1995
THE PERIOD) --------------------- ----------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 10.83 $10.81 $10.02 $10.00 $10.93
------- ------ ------ ------ ------
Income from investment
operations:
Net investment income
(loss) (0.04)(a) (0.05)(b) (0.01)(e) (0.04)(f) --
Net realized and
unrealized gain (loss) 1.21 1.21 0.82 0.06 (0.12)
------- ------ ------ ------ ------
Total from investment
operations 1.17 1.16 0.81 0.02 (0.12)
------- ------ ------ ------ ------
Less distributions
Dividends from net
investment income -- -- -- -- --
Distributions from net
realized gains -- -- -- -- --
------- ------ ------ ------ ------
Total distributions -- -- -- -- --
------- ------ ------ ------ ------
Change in net asset
value for the period 1.17 1.16 0.81 0.02 (0.12)
------- ------ ------ ------ ------
Net asset value, end of
period $ 12.00 $11.97 $10.83 $10.02 $10.81
------- ------ ------ ------ ------
Total Return (c)(d) 10.8% 10.8% 8.08% 0.20% (1.10)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000 for Class
A) $15,410 $ 219 $6,270 $2,516 $ 198
Ratio of average net
assets of:
Expenses 1.52%*(a) 1.52%*(b) 4.43%(e) 6.18%*(f) --
Net investment income (0.14)%*(a) (0.14)%*(b) (0.53)%(e) (2.47)%*(f) --
Portfolio turnover rate 112% -- 109.48% 0.00% --
</TABLE>
- --------
(a) Net of fees waived amounting to 1.40% of average net assets for the period
ended April 30, 1996.
(b) Net of fees waived amounting to 1.90% of average net assets for the period
ended April 30, 1996.
(c) Does not include maximum sales charge of 4% for Class A shares.
(d) Does not include contingent deferred sales charge for Class B shares. Not
annualized.
(e) Net of fees waived amounting to 1.28% of average net assets for the year
ended October 31, 1995.
(f) Net of fees waived amounting to 1.00% of average net assets for the year
ended October 31, 1994.
* Annualized.
43
<PAGE>
THE TOCQUEVILLE EUROPE FUND
INVESTMENTS AS OF APRIL 30, 1996
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
US $
COMMON STOCKS AND Market % of
WARRANTS--96.0% Shares Value Net Assets
- ------------------------------------------------------
<S> <C> <C> <C>
FRANCE--54.8%
ADA 3,600 $ 229,774 1.49%
APEM 4,000 177,939 1.15%
Carbone Lorraine 4,000 571,727 3.71%
Eaux (Cie Generale) 2,000 217,396 1.41%
Casino Guichard Perr 9,000 338,568 2.20%
Charlatte 7,800 157,047 1.02%
Chargeurs SA 1,500 398,913 2.59%
Chaine et Trame 7,000 224,745 1.46%
Devernois 2,250 244,570 1.59%
Emin Leydier 5,400 458,503 2.98%
Europeene du Propulsion 3,000 360,327 2.34%
UGC Droits Audio Visual 10,000 556,447 3.61%
GFI Industries 1,500 221,651 1.44%
Faiveley warrants 7/99(a) 700 6,756 0.04%
Faiveley 7,700 458,697 2.98%
Infopoint 4,000 102,122 0.66%
Fraikin 8,000 382,183 2.48%
CET 2,000 127,652 0.83%
Int. Metal Service 1,330 181,353 1.18%
Lagardere Groupe 23,000 617,005 4.00%
Mediascience 1,900 251,726 1.63%
Musee Grevin 20,000 301,529 1.96%
Rubis et Cie 13,000 487,786 3.17%
Robertet SA 1,130 310,131 2.01%
Rougier SA 2,000 187,610 1.22%
Rouleau Guichard 480 41,220 0.27%
Sidergie 500 113,920 0.74%
Thermador Holding 4,000 301,723 1.96%
Usinor Sacilor 21,000 324,730 2.11%
Vilmorin et Cie 1,000 91,097 0.59%
- ------------------------------------------------------
8,444,847
- ------------------------------------------------------
ITALY--1.0%
Marzotto & Figli 13,000 92,401 0.60%
Tecnost SPA 38,000 65,942 0.43%
- ------------------------------------------------------
158,343
- ------------------------------------------------------
NETHERLAND--16.0%
Akzo Nobel NV 1,625 188,722 1.22%
Elsevier NV 20,000 301,138 1.95%
Getronics NV 6,000 416,691 2.70%
IHC Caland NV 2,500 98,191 0.64%
KLM 2,500 83,893 0.54%
KNP BT (Kon) NV 7,300 174,246 1.13%
Kon PTT Nederland 5,000 187,628 1.22%
Royal Dutch Petroleum 3,700 527,091 3.42%
Stork NV 8,600 241,914 1.57%
Volker Stevin 3,650 248,162 1.61%
- ------------------------------------------------------
2,467,676
- ------------------------------------------------------
SPAIN--13.5%
Centros Com Pryca 8,220 189,647 1.23%
Const. Y Aux Ferr 5,500 193,906 1.26%
Conserv Campofrio 6,400 236,452 1.53%
Elec. Reun Zaragoza 8,477 216,567 1.41%
- ------------------------------------------------------
</TABLE>
(a) Non-income producing security
See Notes to Financial Statements
<TABLE>
<CAPTION>
US $
Market % of
COMMON STOCKS AND WARRANTS (CONTINUED) Shares Value Net Assets
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
SPAIN (CONTINUED)
Fab Autom Renault 8,700 184,650 1.20%
Grupo Anaya SA 9,557 196,453 1.28%
Hidroel Cantabrico 3,000 100,225 0.65%
OMSA Alimentacion 32,500 111,643 0.72%
Radiotronica SA 30,000 334,869 2.17%
Repsol SA 3,000 110,012 0.71%
Energia E Ind. Arag 45,000 210,119 1.36%
- ----------------------------------------------------------------------------
2,084,543
- ----------------------------------------------------------------------------
UNITED STATES--1.5%
Luxxotica Group SPA 2,900 233,450 %
- ----------------------------------------------------------------------------
233,450
- ----------------------------------------------------------------------------
UNITED KINGDOM--9.2%
British Gas 20,000 71,031 0.46%
British Telecom 3,100 170,045 1.10%
Cable & Wireless 30,500 239,364 1.55%
SEMA Group 50,000 504,138 3.27%
Hardy Oil & Gas 80,000 310,008 2.01%
Hays 10,000 64,560 0.42%
RTZ Corp. 4,000 62,965 0.41%
- ----------------------------------------------------------------------------
1,422,111
- ----------------------------------------------------------------------------
Total Common Stocks and Warrants (Cost
$13,156,465) 14,810,970
- ----------------------------------------------------------------------------
<CAPTION>
FOREIGN CURRENCY Number of
OPTIONS--0.6% Contracts
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Put 250 French Franc
June 96 19.00 2,750 2,255 0.01%
Put 625 German Mark
June 96 64.00 9,375 3,000 0.02%
Put 625 German Mark
Sept. 96 64.00 8,750 7,438 0.05%
Put 250 French Franc
June 96 19.50 8,000 16,800 0.11%
Put 625 German Mark
June 96 65.00 8,750 5,863 0.04%
Put 625 German Mark
Dec. 96 67 13,750 29,150 0.19%
Put 250 French Franc
Dec. 96 18.50 2,500 3,400 0.02%
Put 250 French Franc
Sept. 96 19.00 8,000 15,200 0.10%
- ----------------------------------------------------------------------------
Total Foreign Currency Options
(Cost $123,678) 83,106
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--3.4%
Repurchase Agreement, State Street Bank &
Trust Company, dated 4/30/96, 2.0%
(Collateralized by U.S. Treasury Notes
valued at $529,093. Repurchase proceeds
of $516,029
(Cost $516,000.) 516,000 516,000
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $13,796,143)--100.0% $15,410,076
OTHER ASSETS & LIABILITIES 108
- ----------------------------------------------------------------------------
TOTAL NET ASSETS--100.0% $15,410,184
-----------
</TABLE>
44
<PAGE>
THE TOCQUEVILLE EUROPE FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at values (identified cost $13,796,143) $15,410,076
Cash 400
Cash, foreign currency 25,469
Receivable for investments sold 267,745
Dividends and interest receivable 54,967
Other assets 24,914
-----------
$15,783,571
-----------
LIABILITIES
Payable for investments repurchased 329,305
Accrued expenses 44,082
-----------
373,387
-----------
NET ASSETS $15,410,184
-----------
At April 30, 1996 net assets consisted of:
Capital paid in $13,551,923
Undistributed net investment income (loss) (115,040)
Net accumulated undistributed realized gain 359,368
Net unrealized appreciation 1,613,933
-----------
$15,410,184
-----------
CLASS A
NET ASSET VALUE PER SHARE ($15,409,965/1,284,326 shares
outstanding) $12.00
-----------
Maximum offering price ($12.00/96%) $12.50
-----------
CLASS B
NET ASSET VALUE PER SHARE AND MAXIMUM OFFERING PRICE ($219/18
shares outstanding) $11.97
-----------
</TABLE>
See Notes to Financial Statements.
45
<PAGE>
THE TOCQUEVILLE EUROPE FUND
STATEMENT OF OPERATIONS
Six Months Ended April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends (net of $8,924 foreign taxes withheld) $ 51,850
Interest 25,567
-----------
77,417
-----------
EXPENSES
Investment adviser's fee (Note 2) 56,256
Custodian and fund accounting 39,130
Transfer agent and shareholder services 15,470
Professional fees 17,290
Distribution (Note 4)
Class A 19,307
Class B 1
Administration fee (Note 4) 8,438
Printing 1,820
Registration 6,370
Trustees fee 910
Fidelity bond 910
Other 3,640
-----------
Total expenses 169,542
Less: Fees waived (Note 4) (84,002)
-----------
Net expenses 85,540
-----------
NET INVESTMENT (LOSS) (8,123)
-----------
NET REALIZED AND UNREALIZED GAIN
Net realized gain (loss) on:
Investments 398,957
Foreign currency transactions (134,379)
-----------
264,578
-----------
Net unrealized appreciation (depreciation) on:
Investments 1,331,966
Foreign currency translation (1,504)
-----------
1,330,462
-----------
Net gain on investments 1,595,040
-----------
Net increase in net assets resulting from operations $ 1,586,917
-----------
</TABLE>
See Notes to Financial Statements.
46
<PAGE>
THE TOCQUEVILLE EUROPE FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED FOR THE YEAR
APRIL 30, 1996 ENDED
(UNAUDITED) OCTOBER 31, 1995
--- ------------------ ----------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
Operations
Net investment income
(loss) $(8,123) $ (18,930)
Net realized gain 264,578 20,664
Net unrealized
appreciation 1,330,462 258,755
--- ----------- ----------
Net increase resulting
from operations 1,586,917 260,489
Distributions to
shareholders from:
Net investment income
Class A 0 0
Class B 0 0
Net realized gain on
investments
Class A 0 0
Class B 0 0
Fund share transactions
(Note 3)
Class A 7,553,610 3,492,707
Class B 0 200
--- ----------- ----------
Net increase in net
assets 9,140,527 3,753,396
NET ASSETS
Beginning of period 6,269,657 2,516,261
--- ----------- ----------
End of period $15,410,184 $6,269,657
--- ----------- ----------
</TABLE>
See Notes to Financial Statements.
47
<PAGE>
THE TOCQUEVILLE EUROPE FUND
NOTES TO FINANCIAL STATEMENTS
(unaudited)
- --------------------------------------------------------------------------------
NOTE 1
The Tocqueville Trust (the "Trust") was organized as a Massachusetts business
trust registered under the Investment Company Act of 1940 as amended, as a di-
versified, open-end management investment company. The Trust consists of five
separate Funds: The Tocqueville Fund, The Tocqueville Asia-Pacific Fund, The
Tocqueville Small Cap Value Fund, The Tocqueville Europe Fund and The
Tocqueville Government Fund (the "Funds"). The following is a summary of sig-
nificant accounting principles followed by the Trust in the preparation of its
financial statements.
- --------------------------------------------------------------------------------
SECURITY VALUATION
Investments in securities, including foreign securities, traded on an ex-
change or quoted on the over-the-counter market are valued at the last sale
price or, if no sale occurred during the day, at the mean between closing bid
and asked prices, as last reported by a pricing service approved by the Trust-
ees. When market quotations are not readily available, or when restricted secu-
rities or other assets are being valued, such assets are valued at fair value
as determined in good faith by or under procedures established by the Trustees.
Short-term investments are stated at cost which, together with accrued inter-
est, approximates market value.
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
It is the Trust's policy to comply with the provisions of the Internal Reve-
nue Code ("Code") applicable to regulated investment companies and to distrib-
ute all of its taxable income to its shareholders. It is also the Trust's in-
tention to distribute amounts sufficient to avoid imposition of any excise tax
under Section 4982 of the Code. Therefore, no federal income or excise tax pro-
vision is required.
- --------------------------------------------------------------------------------
DEFERRED ORGANIZATION EXPENSES
Expenses incurred in connection with the organization of The Tocqueville Eu-
rope Fund (the "Fund") are being amortized on a straight-line basis over a
five-year period from the Fund's commencement of operations. In the event any
initial shares of The Tocqueville Europe Fund are redeemed during the amortiza-
tion period, the proceeds of redemption will be reduced by the pro-rata portion
of any unamortized organization expenses in the same proportion as the number
of shares redeemed bears to the number of initial shares held at the time of
redemption.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION
Investments and other assets and liabilities denominated in foreign curren-
cies are translated to U.S. dollars at the prevailing rates of exchange. The
Tocqueville Europe Fund is engaged in transactions in securities denominated in
foreign currencies and, as a result, enters into foreign exchange contracts.
The Fund is exposed to additional market risk as a result of changes in the
value of the underlying currency in relation to the U.S. dollar. The value of
foreign currency contracts are "marked to market" on a daily basis, which re-
flects the changes in the market value of the contract at the close of each
day's trading, resulting in daily unrealized gains and/or losses. When the con-
tracts are closed, the Fund recognizes a realized gain or loss.
48
<PAGE>
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, the differences between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books, and the U.S. dollar equivalent of the amounts actually received
or paid. Net unrealized foreign exchange gains and losses arise from changes in
the value of assets and liabilities other than investments in securities at the
end of the fiscal period, resulting from changes in the exchange rates.
- --------------------------------------------------------------------------------
OTHER
Security transactions are accounted for on the trade date, the date the order
to buy or sell is executed. Dividend income is recognized on the ex-dividend
date or at the time the Fund becomes aware, whichever is earlier. Interest in-
come is recognized on the accrual basis and market discount is accounted for on
a straight-line basis from settlement date. The Trust used the first-in, first-
out method for determining realized gain or loss on investments sold for both
financial reporting and federal tax purposes. Distributions to shareholders are
recorded on the ex-dividend date. Expenses incurred by the Trust not specifi-
cally identified to a fund are allocated on a basis relative to the size of
each fund's daily net asset value. It is the Fund's policy to take possession
of securities as collateral under repurchase agreements and to determine on a
daily basis that the value of such securities are sufficient to cover the value
of the repurchase agreements.
- --------------------------------------------------------------------------------
NOTE 2
Tocqueville Asset Management L.P. ("Tocqueville"), is the investment adviser
to the Trust under an Investment Advisory Agreement approved by shareholders on
February 26, 1990. For its services, Tocqueville receives a fee from the Fund,
payable monthly, at an annual rate of 1.00% on the first $50 million of its av-
erage daily net assets, .75% of the next $50 million of average daily net as-
sets, and .65% of average daily net assets in excess of $100 million.
Certain states in which shares of the Trust are qualified for sale impose
limitations on the expenses of the Trust. The Advisory Agreement provides that
if, in any fiscal year, the total expenses of the Trust (excluding taxes, in-
terest, extraordinary expenses and the distribution fee but including the Ad-
viser's fee) exceed the expense limitation applicable to the Trust imposed by
the securities regulations of any state in which it is registered to sell
shares, Tocqueville will pay or reimburse the Trust for that excess up to the
amount of its fee. The most restrictive limitation currently applicable (ex-
cluding the items described above) limits a fund to 2.5% of the Trust's first
$30,000,000 of average daily net assets, 2% of the next $70,000,000, and 1.5%
of the Trust's average daily net assets over $100,000,000. For the six months
ended April 30, 1996, the Adviser has waived its advisory fee of $56,256, due
to the expense limitation referred to above.
49
<PAGE>
- --------------------------------------------------------------------------------
NOTE 3
Effective August 14, 1995 the Fund offered two classes of shares: Class A and
Class B shares. Shares of each class are identical except for the initial sales
load on Class A shares, a contingent deferred sales charge on Class B shares,
distribution fees, and voting rights on matters effecting a single class. All
Fund shares outstanding before August 14, 1995 were designated as Class A
shares. At April 30, 1996, there were an unlimited number of shares of benefi-
cial interest authorized ($0.01 par value). Transactions in the Fund's shares
were as follows:
<TABLE>
<CAPTION>
CLASS A
-------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 OCTOBER 31, 1995
------------------- ----------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold 705,470 $7,555,515 346,755 $3,693,929
Shares redeemed (183) (1,905) (18,942) (201,222)
------- ---------- -------- -----------
Net increase 705,287 $7,553,610 327,813 $3,492,707
------- ---------- -------- -----------
<CAPTION>
CLASS B
-------
FOR THE PERIOD FROM
AUGUST 14, 1995
SIX MONTHS ENDED TO
APRIL 30, 1996 OCTOBER 31, 1995
---------------- -------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold -- -- 18 $ 200
Shares redeemed -- -- -- --
------- ---------- -------- -----------
Net increase -- -- 18 $ 200
------- ---------- -------- -----------
</TABLE>
50
<PAGE>
- --------------------------------------------------------------------------------
NOTE 4
Tocqueville Securities L.P. (the "Distributor") acts as distributor for
shares of the Fund and purchases shares of the Fund at net asset value to fill
orders as received from investment dealers. For the six months ended April 30,
1996, the Distributor received no commissions from the sale of the Fund's
shares. The Fund has adopted distribution plans related to the sale of Class A
and Class B shares pursuant to which the Fund may incur distribution expenses
in amounts not to exceed 0.25% and 0.75% per annum of the average daily net as-
sets of Class A and Class B shares, respectively. Such expenses may include,
but are not limited to, advertising, printing, and distribution of sales liter-
ature, prospectuses and other materials, and payments to dealers and sharehold-
ers servicing agents including the Distributor. Under the distribution plans,
the Distributor is permitted to carry forward expenses not reimbursed by the
distribution fees to subsequent fiscal years for submission to the Fund for
payment, subject to the continuation of the Plan. For the six months ended
April 30, 1996, the Distributor has waived distribution fees of $19,307 and $1,
respectively for Class A and Class B shares. The Distributor has informed the
Trust that, as of March 31, 1996, there were $66,599 in unreimbursed expenses
for the Fund.
Class B shares which are redeemed within six years of purchase are subject to
a contingent deferred sales charge at rates ranging from 5% to 0%, charged as a
percentage of the dollar amount subject thereto. There were no contingent de-
ferred sales charges paid to the Distributor for the six months ended April 30,
1996.
Pursuant to an Administrative Services Agreement, effective September 15,
1995, the Fund pays to the Distributor a fee computed and paid monthly at an
annual rate of 0.15% of the average daily net assets of the Fund. During the
six months ended April 30, 1996, the Distributor waived administration fees of
$8,438.
51
<PAGE>
- --------------------------------------------------------------------------------
NOTE 5
Purchases and sales of investment securities (excluding short-term instru-
ments) for the six months ended April 30, 1996 were as follows:
<TABLE>
<CAPTION>
THE
TOCQUEVILLE
EUROPE FUND
-----------
<S> <C>
PURCHASES
U.S. Government $ --
Other 15,673,490
-----------
$15,673,490
-----------
SALES
U.S. Government $ --
Other 6,302,384
-----------
$ 6,302,384
-----------
</TABLE>
- --------------------------------------------------------------------------------
NOTE 6
Unrealized appreciation at April 30, 1996 based on cost of securities for
Federal tax purposes is as follows:
<TABLE>
<CAPTION>
THE
TOCQUEVILLE
EUROPE FUND
-----------
<S> <C>
Gross unrealized appreciation $ 1,815,699
Gross unrealized depreciation (201,766)
-----------
Net unrealized appreciation $ 1,613,933
-----------
Cost of investments $13,796,143
-----------
</TABLE>
- --------------------------------------------------------------------------------
52
<PAGE>
The Tocqueville Government Fund
- --------------------------------------------------------------------------------
DEAR FELLOW SHAREHOLDERS:
We are pleased to report returns for the first six months of
our fiscal year. As of April 30, 1996, The Tocqueville Government
Fund, Class A, generated a return of 1.25%. Over the same period,
the average Intermediate Government Fund as compiled by Lipper Ana-
lytical Fund generated a 0.36% return.
We attribute the Fund's superior performance relative to its
peer group to our cautious approach. Unlike most government bond
funds, The Tocqueville Government Fund is a capital preservation
vehicle. Our primary goal is to preserve the capital of our share-
holders against the vagaries of the financial markets, the insidi-
ous ravages of inflation, and the burden of taxes.
In this respect, The Tocqueville Government Fund shares the
philosophy of the equity funds in The Tocqueville Trust family.
Over the long term, we recognize that equities are the best vehicle
for preserving capital. Still, liquidity needs and valuation con-
siderations require a fixed income option. The Tocqueville Govern-
ment Fund provides that option. Since its mission is to preserve
capital and reduce equity exposure, the Fund will not speculate on
interest rate swings in an effort to generate superior capital ap-
preciation. Rather, we will prudently "lean against the wind" of
prevailing expectations in order to avoid the damage to capital
that can occur when the consensus view is wrong.
The first six months of the current fiscal year provide an ex-
cellent case in point. Six months ago, the prevailing view was that
interest rates were bound to go lower. Further Fed easing was a
forgone conclusion. Our thinking was different. While we did not
forecast the higher interest rates that were eventually obtained,
we did not see the rationale for investing alongside the consensus.
The potential gain to be made from still lower rates did not seem
large to us, even if the consensus were correct. In addition, at
that time, with long rates at 6.0%, we felt just as comfortable
with a 7.0% long rate as a 5.0% rate. As a result, we kept our du-
ration to approximately two years, leaving us with very limited ex-
posure to rising rates.
53
<PAGE>
- --------------------------------------------------------------------------------
OUTLOOK
With long rates currently above 7.0%, we are more comfortable
with a neutral weighting in our portfolio, which to us means ap-
proximately a five-year duration. Our position does not forecast a
decline in rates and recession, nor does it anticipate a robust
economy that would drive inflationary expectations and interest
rates higher. Rather, we feel that the bond markets appear fairly
priced at present, given the state of economic affairs.
What could change? A global expansion could increase the
worldwide demand for capital, causing upward pressure on rates.
Most foreign developed economies have lagged the economic cycle in
the U.S., allowing the domestic economy to grow without a signifi-
cant rise in rates. The developing economies have expanded at less
than their trend line rates during this period, and some, notably
Mexico, have actually declined. A return to robust growth would ex-
acerbate the capital shortage that might occur in a global expan-
sion. Balanced against these potentials is the likelihood of an
eventual slowdown in the U.S. economy, which could well begin in
the latter half of 1996 and extend into 1997. We view this as a
greater possibility than a resurgence of inflation in the U.S. Our
neutral posture reflects the balancing of these cross currents, but
we will remain vigilant for developments which would cause us to
change our thinking.
Robert Kleinschmidt
Christopher Culp
Portfolio Managers
54
<PAGE>
THE TOCQUEVILLE GOVERNMENT FUND
SELECTED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
CLASS A CLASS B CLASS A CLASS B
------- ------- -------- --------
FOR THE PERIOD FROM
PER SHARE OPERATING SIX MONTHS AUGUST 4, 1995
PERFORMANCE ENDED TO
(FOR A SHARE OUTSTANDING APRIL 30, 1996 OCTOBER 31, 1995
THROUGHOUT THE PERIOD) -------------------- -----------------------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period $10.05 $10.05 $ 10.00 $ 9.97
------ ------ -------- --------
Income form investment op-
erations:
Net investment income
(loss)(a)(b) 0.25(a) 0.23(b) 0.05(e) 0.04
Net realized and
unrealized gain (0.12) (0.12) 0.05 0.08
------ ------ -------- --------
Total from investment op-
erations 0.13 0.11 0.10 0.12
------ ------ -------- --------
Less distributions
Dividends from net invest-
ment income (0.22) (0.19) (0.05) (0.04)
Distributions from net re-
alized gains -- -- -- --
------ ------ -------- --------
Total distributions (0.22) (0.19) (0.05) (0.04)
------ ------ -------- --------
Change in net asset value
for the period (0.09) (0.08) 0.05 0.08
------ ------ -------- --------
Net asset value, end of
period $ 9.96 $ 9.97 $ 10.05 $ 10.05
------ ------ -------- --------
Total Return (c)(d) 1.25%(a) 1.08%(b) 6.26%* 8.42%*
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000 for Class A) $9,194 $205 $ 6,506 $ 201
Ratio of average net as-
sets of:
Expenses 1.53%*(a) 1.53%*(b) 2.74%*(e) --
Net investment income 4.27%*(a) 4.27%*(b) 3.08%*(e) --
Portfolio turnover rate 141%* -- % 0.00% --
</TABLE>
- --------
(a) Net of fees waived amounting to 0.90% of average net assets for the period
ended April 30, 1996.
(b) Net of fees waived amounting to 1.40% of average net assets for the period
ended April 30, 1996.
(c) Does not include maximum sales charge of 4% for Class A shares.
(d) Does not include contingent deferred sales charge for Class B shares. Not
annualized.
(e) Net of fees waived amounting to 0.77% of average net assets for the period
ended October 31, 1995.
* Annualized.
55
<PAGE>
THE TOCQUEVILLE GOVERNMENT FUND
INVESTMENTS AS OF APRIL 30, 1996
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Market % of
Value Value Net Assets
- --------------------------------------------------------------
<S> <C> <C> <C>
MORTGAGE RELATED--32.3%
Federal Home Loan
Mortgage Corp.
7.085%, 3/21/2001 $1,500,000 $1,482,991 16.13%
7.13%, 10/02/2001 750,000 746,370 8.12%
6.38%, 10/24/2009 750,000 739,102 8.04%
- --------------------------------------------------------------
2,968,463
- --------------------------------------------------------------
U.S. TREASURY NOTES--41.4%
5.50%, 4/15/2001 1,000,000 971,250 10.56%
5.875%, 6/30/2000 1,000,000 981,875 10.68%
5.625%, 2/15/2006 2,000,000 1,854,372 20.17%
- --------------------------------------------------------------
3,807,497
- --------------------------------------------------------------
U.S. TREASURY STRIPS--16.5%
.010, 5/15/2006 3,000,000 1,518,360 16.51%
- --------------------------------------------------------------
1,518,360
- --------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
<TABLE>
<CAPTION>
Par Market % of
Value Value Net Assets
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS--6.9%
U.S. T-Bill, 5.220%, 10/24/96 $633,889 6.89%
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--1.8%%
Repurchase Agreement, State Street Bank & Trust
Company, dated 4/30/96, 2.0% (Collateralized
by U.S. Treasury Notes valued at $172,973.
Repurchase proceeds of $168,009 (Cost
$168,000.) 168,000 $ 168,000 1.83%
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $9,185,144)--98.9% $9,096,209
OTHER ASSETS & LIABILITIES,
NET--1.1% 98,074
- --------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $9,194,283
----------
</TABLE>
56
<PAGE>
THE TOCQUEVILLE GOVERNMENT FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at values (identified cost $9,185,144) $ 9,096,209
Cash 390
Receivable for Fund shares sold 82,324
Interest receivable 60,762
Other assets 23,883
-----------
$ 9,263,568
-----------
LIABILITIES
Payable for Fund shares repurchased 25,000
Accrued expenses 44,285
-----------
69,285
-----------
NET ASSETS $ 9,194,283
-----------
At April 30, 1996 net assets consisted of:
Capital paid in $ 9,269,592
Undistributed net investment income 0
Net accumulated undistributed realized gain 13,626
Net unrealized depreciation (88,935)
-----------
$ 9,194,283
-----------
CLASS A
NET ASSET VALUE PER SHARE ($9,194,078/922,924 shares outstanding) $ 9.96
-----------
Maximum offering price ($9.96/96%) $10.38
-----------
CLASS B
NET ASSET VALUE PER SHARE AND MAXIMUM OFFERING PRICE
($205/21 shares outstanding) $ 9.97
-----------
</TABLE>
See Notes to Financial Statements.
57
<PAGE>
THE TOCQUEVILLE GOVERMENT FUND
STATEMENT OF OPERATIONS
Six Months Ended April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest $237,090
--------
EXPENSES
Investment adviser's fee (Note 2) 20,443
Custodian and fund accounting 27,300
Transfer agent and shareholder services 15,470
Professional fees 11,830
Distribution (Note 4)
Class A 10,221
Class B 1
Administration fee (Note 4) 6,133
Printing 910
Registration 2,184
Trustees fee 910
Fidelity bond 910
Other 3,088
--------
Total expenses 99,400
Less: Fees waived (Note 4) (36,798)
--------
Net expenses 62,602
--------
NET INVESTMENT INCOME 174,488
--------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS
Net realized gain on investments 14,456
Net unrealized depreciation of investments during the period (116,714)
--------
Net (loss) on investments (102,258)
--------
Net increase in net assets resulting from operations $ 72,230
--------
</TABLE>
See Notes to Financial Statements.
58
<PAGE>
THE TOCQUEVILLE GOVERNMENT FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED FOR THE YEAR
APRIL 30, 1996 ENDED
(UNAUDITED) OCTOBER 31, 1995
------------------ ----------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations
Net investment income $ 174,488 $ 21,145
Net realized gain (loss) 14,456 (830)
Net unrealized appreciation (depreciation) (116,714) 27,780
---------- ----------
Net increase resulting from operations 72,230 48,095
Distributions to shareholders from:
Net investment income
Class A (174,483) (21,144)
Class B (5) (1)
Net realized gain on investments
Class A 0 0
Class B 0 0
Fund share transactions (Note 3)
Class A 2,790,825 6,478,561
Class B 4 201
---------- ----------
Net Increase in net assets 2,688,571 6,505,712
NET ASSETS
Beginning of period 6,505,712 0
---------- ----------
End of period $9,194,283 $6,505,712
---------- ----------
</TABLE>
See Notes to Financial Statements.
59
<PAGE>
THE TOCQUEVILLE GOVERNMENT FUND
NOTES TO FINANCIAL STATEMENTS
(unaudited)
- --------------------------------------------------------------------------------
NOTE 1
The Tocqueville Trust (the "Trust") was organized as a Massachusetts business
trust registered under the Investment Company Act of 1940 as amended, as a di-
versified, open-end management investment company. The Trust consists of five
separate Funds: The Tocqueville Fund, The Tocqueville Asia-Pacific Fund, The
Tocqueville Small Cap Value Fund, The Tocqueville Europe Fund and the
Tocqueville Government Fund (the "Funds"). The following is a summary of sig-
nificant accounting principles followed by the Trust in the preparation of its
financial statements.
- --------------------------------------------------------------------------------
SECURITY VALUATION
Investments in securities, including foreign securities, traded on an ex-
change or quoted on the over-the-counter market are valued at the last sale
price or, if no sale occurred during the day, at the mean between closing bid
and asked prices, as last reported by a pricing service approved by the Trust-
ees. When market quotations are not readily available, or when restricted secu-
rities or other assets are being valued, such assets are valued at fair value
as determined in good faith by or under procedures established by the Trustees.
Short-term investments are stated at cost which, together with accrued inter-
est, approximates market value.
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
It is the Trust's policy to comply with the provisions of the Internal Reve-
nue Code ("Code") applicable to regulated investment companies and to distrib-
ute all of its taxable income to its shareholders. It is also the Trust's in-
tention to distribute amounts sufficient to avoid imposition of any excise tax
under Section 4982 of the Code. Therefore, no federal income or excise tax pro-
vision is required.
- --------------------------------------------------------------------------------
DEFERRED ORGANIZATION EXPENSES
Expenses incurred in connection with the organization of The Tocqueville Gov-
ernment Fund (the "Fund") are being amortized on a straight-line basis over a
five-year period from the Fund's commencement of operations. In the event any
initial shares of The Tocqueville Government Fund are redeemed during the amor-
tization period, the proceeds of redemption will be reduced by the pro-rata
portion of any unamortized organization expenses in the same proportion as the
number of shares redeemed bears to the number of initial shares held at the
time of redemption.
- --------------------------------------------------------------------------------
OTHER
Security transactions are accounted for on the trade date, the date the order
to buy or sell is executed. Interest income is recognized on the accrual basis
and market discount is accounted for using the effective interest method. The
Trust uses the first-in, first-out method for determining realized gain or loss
on investments sold for both financial reporting and federal tax purposes. Dis-
tributions to shareholders are recorded on the ex-dividend date. Expenses in-
curred by the Trust not specifically identified to a Fund are allocated on a
basis relative to the size of each Fund's daily net asset value.
- --------------------------------------------------------------------------------
60
<PAGE>
- --------------------------------------------------------------------------------
NOTE 2
Tocqueville Asset Management L.P. ("Tocqueville"), is the investment adviser
to the Trust under an Investment Advisory Agreement approved by shareholders on
February 26, 1990. For its services, Tocqueville receives a fee from The
Tocqueville Government Fund, payable monthly, at an annual rate of .50% of the
first $500 million of the Fund's average daily net assets, .40% of the next
$500 million of average daily net assets, and .30% of average daily net assets
in excess of $1 billion.
Certain states in which shares of the Trust are qualified for sale impose
limitations on the expenses of the Trust. The Advisory Agreement provides that
if, in any fiscal year, the total expenses of the Trust (excluding taxes, in-
terest, extraordinary expenses and the distribution fee but including the Ad-
viser's fee) exceed the expense limitation applicable to the Trust imposed by
the securities regulations of any state in which it is registered to sell
shares, Tocqueville will pay or reimburse the Trust for that excess up to the
amount of its fee. The most restrictive limitation currently applicable (ex-
cluding the items described above) limits a fund to 2.5% of the Trust's first
$30,000,000 of average daily net assets, 2% of the next $70,000,000, and 1.5%
of the Trust's average daily net assets over $100,000,000. For the six months
ended April 30, 1996, the Adviser has waived its advisory fee of $20,443 due to
the expense limitation referred to above. In addition, the Adviser has agreed
to waive its fee until the Fund's average daily net assets exceed $10 million.
- --------------------------------------------------------------------------------
61
<PAGE>
- --------------------------------------------------------------------------------
NOTE 3
The Fund offers two classes of shares: Class A and Class B shares. Shares of
each class are identical except for the initial sales load on Class A shares, a
contingent deferred sales charge on Class B shares, distribution fees and vot-
ing rights on matters effecting a single class. At April 30, 1996, there were
an unlimited number of shares of beneficial interest authorized ($0.01 par val-
ue). Transactions in the Fund's shares were as follows:
<TABLE>
<CAPTION>
CLASS A
-------
FOR THE PERIOD FROM
SIX MONTHS AUGUST 14, 1995
ENDED TO
APRIL 30, 1996 OCTOBER 31, 1995
-------------- -------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold 556,672 $ 5,619,956 645,088 $6,457,875
Shares issued on
reinvestment of dividends 15,983 161,927 2,062 20,687
Shares redeemed (296,882) (2,991,058) -- --
-------- ----------- -------- -----------
Net increase 275,773 $ 2,790,825 647,150 $6,478,561
-------- ----------- -------- -----------
<CAPTION>
CLASS B
-------
FOR THE PERIOD FROM
SIX MONTHS AUGUST 14, 1995
ENDED TO
APRIL 30, 1996 OCTOBER 31, 1995
-------------- -------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold -- -- 20 $ 200
Shares issued on
reinvestment of dividends 1 4 -- 1
Shares redeemed -- -- -- --
-------- ----------- -------- -----------
Net increase 1 4 20 $ 201
-------- ----------- -------- -----------
</TABLE>
62
<PAGE>
- --------------------------------------------------------------------------------
NOTE 4
Tocqueville Securities L.P. (the "Distributor") acts as distributor for
shares of the Fund and purchases shares of the Fund at net asset value to fill
orders as received from investment dealers. For the six months ended April 30,
1996, the Distributor received no net commissions from the sale of the Fund's
shares.
The Fund has adopted distribution plans related to the sale of Class A and
Class B shares pursuant to which the Fund may incur distribution expenses in
amounts not to exceed 0.25% and 0.75% per annum of the average daily net assets
of Class A and Class B shares, respectively. Such expenses may include, but are
not limited to, advertising, printing, and distribution of sales literature,
prospectuses and other materials, and payments to dealers and shareholders ser-
vicing agents including the Distributor. Under the distribution plans, the Dis-
tributor is permitted to carry forward expenses not reimbursed by the distribu-
tion fees to subsequent fiscal years for submission to the Fund for payment,
subject to the continuation of the Plan. For the six months ended April 30,
1996, the Distributor has waived distribution fees of $10,221 and $1, respec-
tively for Class A and Class B shares. The Distributor has informed the Trust
that, as of March 31, 1996, there were $18,879 in unreimbursed expenses for the
Fund.
Class B shares which are redeemed within six years of purchase are subject to
a contingent deferred sales charge at rates ranging from 5% to 0%, charged as a
percentage of the dollar amount subject thereto. There were no contingent de-
ferred sales charges paid to the Distributor for the six months ended April 30,
1996.
Commissions earned by the Distributor for services rendered as registered
broker-dealer in securities transactions for the Fund for the six months ended
April 30, 1996 were $6,913.
Pursuant to an Administrative Services Agreement, effective September 15,
1995, the Fund pays to the Distributor a fee computed and paid monthly at an
annual rate of 0.15% of the average daily net assets of the Fund. During the
six months ended April 30, 1996, the Distributor waived administration fees of
$6,133.
63
<PAGE>
- --------------------------------------------------------------------------------
NOTE 5
Purchases and sales of investment securities (excluding short-term instru-
ments) for the six months ended April 30, 1996 were as follows:
<TABLE>
<CAPTION>
THE
TOCQUEVILLE
GOVERNMENT
FUND
-----------
<S> <C>
PURCHASES $7,913,498
----------
SALES $5,778,914
----------
</TABLE>
- --------------------------------------------------------------------------------
NOTE 6
Unrealized depreciation at April 30, 1996 based on cost of securities for
Federal tax purposes is as follows:
<TABLE>
<CAPTION>
THE
TOCQUEVILLE
GOVERNMENT
FUND
-----------
<S> <C>
Gross unrealized appreciation $ 0
Gross unrealized depreciation (88,935)
----------
Net unrealized depreciation $ (88,935)
----------
Cost of investments $9,185,144
----------
</TABLE>
- --------------------------------------------------------------------------------
64
<PAGE>
Investment Advisor
Tocqueville Asset Management L.P.
1675 Broadway
New York, NY 10019
Phone: (212) 698-0800
Fax: (212) 262-0154
Distributor
Tocqueville Securities L.P.
1675 Broadway
New York, NY 10019
Phone: (800) 697-3863
Fax: (212) 262-0154
Shareholders' Servicing,
Custodian and Transfer Agent
State Street Bank & Trust Company
P.O. Box 8507
Boston, MA 02266-8507
Toll Free Phone: (800) 626-9402
Board of Trustees
Francois Sicart - Chairman
Bernard F. Combemale
James B. Flaherty
Inge Heckel
Robert W. Kleinschmidt
Francois Letaconnoux
