<PAGE>
ANNUAL REPORT
October 31, 1998
THE TOCQUEVILLE TRUST
MUTUAL FUNDS
The Tocqueville Fund
The Tocqueville Small Cap Value Fund
The Tocqueville International Value Fund
The Tocqueville Government Fund
The Tocqueville Gold Fund
<PAGE>
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This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a currently effective prospectus of The Tocqueville
Trust. Please call 1-800-697-FUND (3863) for a free prospectus. Read it care-
fully before you invest.
You are invited to visit our website @ www.tocqueville.com
1
<PAGE>
The Tocqueville Fund
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DEAR FELLOW SHAREHOLDER:
The Tocqueville Fund registered a return of -4.6% over the twelve-month pe-
riod ending October 31, 1998. The fiscal year just ended was one of the most
difficult and unusual periods in our investment career. The discipline of value
investing which has served us and our shareholders well over the long term suf-
fered its worst period of relative investment performance in at least thirty
years. (Although returns to value investing were very poor on a relative basis,
absolute returns were reasonable, coming as they did after three remarkable
years in the market.) Not only did value portfolios lag a red-hot index
throughout the first half of the fiscal year; they also did more poorly on av-
erage than the index on the way down. What happened?
Basically, the year unfolded very much as we expected when we wrote our
annual letter last year. We worried then about the profit outlook of many
companies and the impact of the Asian crisis on American companies. As we
expected, estimated earnings trended down all year. And the average stock--as
opposed to the stock averages--declined markedly during the year.
What we did not correctly foresee was the extraordinary performance of the
very largest capitalization stocks, which dominate the indices. Throughout the
year, stocks, which we considered far too expensive to purchase became more and
more expensive. These large capitalization growth stocks dominate the S&P 500
because the S&P is a market weighted index. Increasingly index funds and
"closet" index funds found they only needed to buy the top 25, 30, or 50
companies in the index to capture the returns on the index. In fact, these
larger companies more than captured the index returns. The top 50 generated an
overall return of 36% during the 12-month period ended 10/31/98, propelling an
overall return on the S&P 500 of 22%. These results were due in part to the
vast amount of dollars that poured into equity funds during the period. The
overwhelming majority of these new funds were invested in the same stocks,
pushing their valuations to--in our view--unsustainable heights.
WWW.TULIP.COM. When they were buying tulips, it is doubtful that the Dutch
thought a tulip bulb was more valuable than a house, a ship, or a plot of land
large enough to grow many more tulips. More likely, the tulips were bought for
the simple reason that their prices were going up. And, by the way, as long as
that was true, tulip bulbs were a good buy. Despite the many very fine compa-
nies represented by the top 50 capitalization names in the S&P 500, we believe
that the overwhelming majority of investors are buying these stocks, not be-
cause of the value perceived in the underlying companies, but, like the Dutch,
because the prices are going up. And, like the Dutch, these investors have had
a winning strategy. Call us old fashioned, but we prefer to buy shares on the
basis of the value we discern in the companies they represent. In the most re-
cent twelve-month period, that has not been a winning strategy. But we are nei-
ther deterred nor discouraged. History is on our side.
In the period ahead, we foresee a significant correction in the overvaluation
of the largest growth stocks. If that is correct, investing in the index will
prove most unrewarding. Stock picking, our forte, will be the key to superior
returns in this environment. Happily, we continue to find a number of companies
whose valuation parameters fit our disciplines. In particular, we find value
currently in shares of many commodity goods' producers such as those in the
energy, nonferrous metals, and agricultural products' industries which are
extremely depressed and would benefit from, among other things, a bounce in
Asian economies. We believe these stocks can be good long-term performers
regardless of moves in the overall market as represented by the indices. As
importantly, since capital preservation remains our primary goal, we believe
the risk in stocks trading at low multiples of normalized earnings, cash flow,
sales, book and underlying asset value is acceptably low.
Robert W. Kleinschmidt
Francois Sicart
Portfolio Managers
2
<PAGE>
<TABLE>
<CAPTION>
Tocqueville Fund
(Net Asset Value) Tocqueville Fund (Load) S&P 500
<S> <C> <C> <C>
10/31/88 10000 9600 10000
10/31/89 11674 11207 12640
10/31/90 11282 10830 11695
10/31/91 13279 12747 15612
10/31/92 15261 14651 17167
10/31/93 18876 18121 19732
10/31/94 20330 19517 20496
10/31/95 23585 22641 25915
10/31/96 28934 27776 32160
10/31/97 38904 37348 42487
10/31/98 37119 35634 51829
</TABLE>
This chart assumes an initial investment of $10,000 made on 10/31/88. Perfor-
mance reflects fee waivers in effect. In the absence of fee waivers, total re-
turn would be reduced. Returns shown include the reinvestment of all dividends
and other distributions. Past performance is not predictive of future perfor-
mance. Investment return and principal value will fluctuate, so that your
shares, when redeemed, may be worth more or less than their original cost.
AVERAGE ANNUAL RATE OF RETURN (%)
FOR PERIODS ENDED OCTOBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
10
1 YEAR 3 YEAR 5 YEAR YEAR
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Tocqueville Fund--Net Asset Value (4.59%) 16.32% 14.48% 14.01%
Tocqueville Fund--Load (8.40%) 14.74% 13.55% 13.55%
Standard & Poor's 500 Stock Index 21.99% 25.99% 21.30% 17.88%
</TABLE>
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3
<PAGE>
The Tocqueville Small Cap Value Fund
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DEAR FELLOW SHAREHOLDER:
While the fiscal year we just ended was a very negative environment for
small cap stocks in general, I am pleased to report that The Tocqueville Small
Cap Value Fund maintained its good overall relative performance. We managed to
give back only a small portion of the 36% gain we posted last year. We fin-
ished the year nearly even with the Russell 2000 index which we have
outperformed since inception.
For the twelve months period ended October 31, 1998, your portfolio of
value stocks declined 13.37% to $12.59 per share. Over the past three years,
your Fund has appreciated 41.06%. These performance numbers compare with a one
year decline of 11.84% and a three year gain of 32.94% for the Russell 2000
Index over the same periods. While my investment strategy is not to outperform
any index, I will certainly try my best to do so over the long term.
Our results certainly validate our strategy of buying good quality stocks
with attractive growth potential when they are down substantially in price.
The market collapse of August and September 1998 gave me more opportunities to
buy good quality stocks at bargain prices. As a result, the 38 stocks we own
were down on average 53% and 43% from their respective five year and 12 months
highs when we acquired them. Many of our stocks have low near-term earnings
expectations built into their cost, and positive surprises should work in our
favor over time. Overall, I remain cautiously optimistic and fully invested.
Looking at the portfolio in broad strategic terms, we retain substantial
exposure to "sunrise industries," and to "service industries." This should
give us an average long term earnings growth rate of about 15%. These broadly
defined higher-growth sunrise and service industries now account for about
two-thirds of the portfolio, and include computer software, telephone and CATV
communication hardware, closed circuit TV equipment, business services, dis-
tance learning and healthcare service providers.
New to the portfolio this year is a just-in-case 7% "reflation insurance"
position in precious metals stocks. I also took a 9% position in "very propri-
etary" specialty chemical businesses where solid long term prospects have been
somewhat obscured by near-term concerns over the world economy. Remaining as-
sets are spread among a mosaic of out-of-favor growth and cyclical stocks.
In closing, let me express my gratitude for your selecting The Tocqueville
Small Cap Value Fund to realize your long term investment goals.
Jean-Pierre Conreur
Portfolio Manager
4
<PAGE>
<TABLE>
<CAPTION>
Small Cap Value Fund Small Cap Value Fund
(Net Asset Value) (Load) Russell 2000
<S> <C> <C> <C>
8/1/94 10000 9600 10000
10/31/94 10220 9811 10479
10/31/95 12184 11697 12400
10/31/96 14586 14002 14458
10/31/97 19840 19046 18699
10/31/98 17187 16500 16485
</TABLE>
This chart assumes an initial investment of $10,000 made on 8/1/94 (incep-
tion). Performance reflects fee waivers in effect. In the absence of fee waiv-
ers, total return would be reduced. Returns shown include the reinvestment of
all dividends and other distributions. Past performance is not predictive of
future performance. Investment return and principal value will fluctuate, so
that your shares, when redeemed, may be worth more or less than their original
cost.
AVERAGE ANNUAL RATE OF RETURN (%) FOR PERIODS ENDED OCTOBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR 3 YEAR 8/1/94
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Tocqueville Small Cap Value Fund--Net Asset
Value (13.37%) 12.15% 13.57%
Tocqueville Small Cap Value Fund--Load (16.84%) 10.62% 12.48%
Russell 2000 Index (11.84%) 9.96% 12.47%
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</TABLE>
5
<PAGE>
The Tocqueville International Value Fund
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DEAR FELLOW SHAREHOLDER:
The recent fiscal year was, again, a difficult and volatile one for our
Fund, with two good quarters and two bad ones adding up to a negative 19.4% re-
turn for the year.
Once again, our commitment to Asia hurt the performance, as we reached our
goal of having almost two thirds of our invested assets in that region's de-
pressed markets. There are, however, encouraging signs: In recent months, the
region's currencies have stabilized, with the Indonesian rupiah actually recov-
ering from about 15,000 rupiahs per dollar to less than 8,000.
Behind the headlines, uneven but real progress is being made toward restruc-
turing financial institutions and resolving corporations' international debt
problems. Exports, initially hampered by logistics and the absence of trade fi-
nancing are being resumed. With the benefit of lower currencies, they can be
expected to rise strongly in coming months, mostly toward Europe and the United
States.
In some countries, foreign investment has begun to recover strongly, and
many more investments by Japanese and Western companies are actively being ne-
gotiated. These not only bring money into the cash-starved economies, but also
unlock business that had been crippled by the lack of working capital and trade
financing. Malaysia has imposed a one-year freeze for sales proceeds of invest-
ments. We had no intention of selling our small positions in that country, and
are still allowed to trade within Malaysian investments. This, therefore, does
not change our investment stance toward that country, nor does it affect the
Fund's overall liquidity.
Finally, we are encouraged that the region's stock markets are becoming more
selective. Individual markets now move more independently from each other, as
well as from American or European markets. Within each market, too, individual
securities are beginning to respond to their specific outlook. We take this as
signs that professional investing based on company research is resuming, and
that investors' time horizons are lengthening again.
During the year, we increased our exposure to Japan, which had been very
small, to more than 15% of the portfolio. We identified a number of companies
where idle cash (earning practically no interest) or unutilized and saleable
assets amounted to a large proportion of the stock price. In such cases, the
"adjusted" price-earning ratio on operating income is quite low and offers very
attractive value in an environment where the local economy can be expected to
recover strongly, starting some time next year. For the portfolio in general,
we continued to take profits in Europe to add to Asia, so as to achieve our
goal of more than 60% of assets in that region.
Our goal, moving forward, is to concentrate investments into fewer companies
that we know well. Trips to Asia this year have allowed us to get to know bet-
ter a number of corporate managers in whom we have developed a level of confi-
dence sufficient to allow us to do so. Many of the companies we recently vis-
ited are coping with the difficult business environment quite well, increasing
their market shares while consolidating their finances.
In Europe, where we continue to doubt that the advent of the Euro is the
panacea that has been touted in many circles, we continue to concentrate on
companies that offer both current value and good operational leverage in the
budding recovery of domestic demand.
Finally, as we started the process of concentrating the portfolio, we were
able to realize a number of capital losses, which will ensure that the fund is
not required to make any capital gain distribution for the past fiscal year.
With our sincere thanks for your continued support,
Respectfully
Francois Sicart
Portfolio Manager
6
<PAGE>
<TABLE>
<CAPTION>
International Value Fund International Value Fund Morgan Stanley
Net Asset Value (Load) EAFE Index
<S> <C> <C> <C>
8/1/94 10000 9600 10000
10/31/94 10020 9619 10244
10/31/95 10830 10396 10206
10/31/96 12570 12067 11275
10/31/97 10770 10339 11797
10/31/98 8679 8332 12935
</TABLE>
This chart assumes an initial investment of $10,000 made on 8/1/94 (incep-
tion). Performance reflects fee waivers in effect. In the absence of fee waiv-
ers, total return would be reduced. Returns shown include the reinvestment of
all dividends and other distributions. Past performance is not predictive of
future performance. Investment return and principal value will fluctuate, so
that your shares, when redeemed, may be worth more or less than their original
cost.
AVERAGE ANNUAL RATE OF RETURN (%) FOR PERIODS ENDED OCTOBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR 3 YEAR 8/1/94
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
The Tocqueville International Value Fund--Net
Asset Value (19.41)% (7.11)% (3.27)%
The Tocqueville International Value Fund--
Load (22.60)% (8.36)% (4.20)%
Morgan Stanley EAFE Index 9.65% 8.22% 6.22%
- -------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
The Tocqueville Government Fund
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DEAR FELLOW SHAREHOLDER:
For the twelve month period ended October 31, 1998, The Tocqueville Govern-
ment Fund generated a total return of 6.72%. This compares with 9.52% recorded
by the Lehman Brothers Intermediate Term Government Index. Our maturities and
durations are lower than that of the index, reflecting our more conservative
posture than bonds that make up the Index. We have structured the portfolio to
generate returns, which are attractive relative to available money market
rates, without exposing our shareholders to the vicissitudes of the bond mar-
ket. Our average maturity was only 6.6 years at the end of the fiscal year
while our duration, a measure of vulnerability to rising rates, was a mere 4.6
years.
We continue to believe that the risks associated with longer-term maturities
are too great relative to the extra return available. With the yield curve as
flat as it is, the only reason to hold longer-term maturities is a conviction
that long rates will continue to fall. We do believe that long rates could go
lower if the U.S. economy falters, but we also believe that the Fed is deter-
mined to keep the U.S. recovery going. Consequently, in the current economic
cycle, at least, the case for still lower long rates is not compelling and not
worth the risk. We will stick to our cautious posture on the bond market until
potential returns outweigh the risks. In the meanwhile, we will continue to be
content with returns, which are attractive relative to money market instru-
ments.
Robert W. Kleinschmidt
Portfolio Manager
8
<PAGE>
<TABLE>
<CAPTION>
Government Fund Lehman Brothers Intermediate
(Net Asset Value) Government Fund (Load) Government Index
<S> <C> <C> <C>
9/4/95 10000 9600 10000
10/31/95 10096 9692 10177
10/31/96 10689 10261 10754
10/31/97 11268 10817 11541
10/31/98 12025 11544 12640
</TABLE>
This chart assumes an initial investment of $10,000 made on 9/4/95 (incep-
tion). Performance reflects fee waivers in effect. In the absence of fee waiv-
ers, total return would be reduced. Returns shown include the reinvestment of
all dividends and other distributions. Past performance is not predictive of
future performance. Investment return and principal value will fluctuate, so
that your shares, when redeemed, may be worth more or less than their original
cost.
AVERAGE ANNUAL RATE OF RETURN (%)
FOR PERIODS ENDED OCTOBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 3 SINCE INCEPTION
YEAR YEAR 9/4/95
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
The Tocqueville Government Fund--Net Asset Value 6.72% 6.00% 6.00%
The Tocqueville Government Fund--Load 2.46% 4.56% 4.63%
Lehman Brothers Intermediate Government Index 9.52% 7.49% 7.68%
- -----------------------------------------------------------------------------
</TABLE>
9
<PAGE>
The Tocqueville Gold Fund
- --------------------------------------------------------------------------------
DEAR FELLOW SHAREHOLDER:
In launching the fund on June 29th, concern about the overall market outlook
was foremost in my thinking. Although my concerns proved well-founded and with
painful consequences, I am pleased that the gold sector ran counter to the mar-
ket correction this fall, as I had hoped. In the four months since the fund's
inception, The Tocqueville Gold Fund's net asset value increased 7.6%.
Stock market outlook and psychology changed dramatically in the third quar-
ter of 1998, ushering in a new market cycle and a very different landscape than
we have been accustomed to. Disinflation, high valuations and low long-term in-
terest rates appear to be on their way out. Reflationary policies are becoming
more appealing to world governments. Voters have had their fill of inflation
fighting, austerity, unemployment and deflation. There is hardly anyone left
who thinks anti-inflation policies should dominate. We expect to see a move to
lower short-term rates, rapid money supply growth, more emergency bailouts and
fiscal deficits. These changes will be good for gold, but not necessarily so
for the bond market or equity valuations.
For economic stimulus to work, Asia must begin to resume growth. In fact,
without Asian participation, the outlook would be quite negative. As Alan
Greenspan recently observed, the U.S. cannot remain an island of prosperity
while Asian and other emerging market economies falter. The best chance to
avoid a deep, prolonged world recession is for stimulus to take effect. A re-
covery in Asia would increase demand for physical commodities. It would very
likely lead to increases in commodity prices of all kinds, including gold.
In the U.S., against a backdrop of rising long-term interest rates, corpo-
rate earnings are heading lower because of deflationary price trends, declining
consumer confidence and excess capacity. We expect these trends to continue
into 1999. Among the twenty five largest market capitalizations, only five
trade at less than a multiple of twenty, based on protected 1999 earnings. Ob-
viously, these lofty valuations will be very difficult to sustain in the eco-
nomic environment I envision. There is plenty of room for stocks to move lower.
Why is this happening? We are in the midst of a world banking crisis, char-
acterized by Mr. Greenspan and others as the most serious in more than fifty
years. Throughout the 1990's, the Fed's easy money policies have led to a
buildup of questionable credit leading to investment speculation as typified by
the collapse of Long Term Credit, or the unprecedented valuations of world eq-
uity markets. The result is that financial institutions are laden with bad in-
vestments and irretrievable losses.
Unwinding these excesses with a minimum of pain, if it can happen that way
at all, can only happen slowly, over several years. For the unwinding to happen
quickly would require a market "crash". Policy makers are working feverishly to
avoid such an outcome. The most politically acceptable path is a "little bit"
of inflation. Deflation has made it all but impossible to service dollar and
other hard currency loans, thereby undermining credit and impairing bank capi-
tal. Higher price levels do the opposite, at least for a while.
Beneficiaries in this new environment are gold and other hard commodities,
assets such as real estate financed by high levels of debt, and holders of
short-term debt such as commercial banks. Of these, the most high-powered play
by far is gold and shares of gold producers.
We expect this new market cycle will last for several years. We recommend a
small (5%) exposure to gold and gold shares. Gold performs inversely to finan-
cial assets. It is a constructive way to deal with the more pessimistic invest-
ment outlook. A small exposure can preserve or increase purchasing power in a
down market.
10
<PAGE>
We are in the very early stages of these market changes. For many, our views
will be quickly dismissed. We are happy to be standing away from the crowd, but
we expect to have increasing company over time. In that vein, we welcome your
interest in The Tocqueville Gold Fund. I would be happy to respond to your
questions or comments.
John Hathaway
Portfolio Manager
11
<PAGE>
<TABLE>
<CAPTION>
Gold Fund Philadelphia Stock Exchange
(Net Asset Value) Government Fund (Load) Gold and Silver Index
<S> <C> <C> <C>
6/29/98 10000 9600 10000
10/31/98 10760 9913 10330
</TABLE>
This chart assumes an initial investment of $10,000 made on 6/29/98 (incep-
tion). Performance reflects fee waivers in effect. In the absence of fee waiv-
ers, total return would be reduced. Returns shown include the reinvestment of
all dividends and other distributions. Past performance is not predictive of
future performance. Investment return and principal value will fluctuate, so
that your shares, when redeemed, may be worth more or less than their original
cost.
CUMULATIVE RATE OF RETURN (%)
FOR PERIOD ENDED OCTOBER 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SINCE INCEPTION
6/29/98
- ------------------------------------------------------------------
<S> <C>
Tocqueville Gold Fund--Net Asset Value 7.60%
Tocqueville Gold Fund--Load 3.26%
Philadelphia Stock Exchange Gold and Silver Index 2.17%
- ------------------------------------------------------------------
</TABLE>
12
<PAGE>
THE TOCQUEVILLE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------
PER SHARE OPERATING PERFORMANCE
(FOR A SHARE OUTSTANDING 1998 1997 1996 1995 1994
THROUGHOUT THE PERIOD) ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of pe-
riod $ 20.21 $ 15.85 $ 14.07 $ 13.74 $ 13.67
------- ------- ------- ------- -------
Income from investment opera-
tions:
Net investment income 0.06 0.06 0.07 0.15 0.12
Net realized and unrealized gain
(loss) (0.93) 5.15 2.92 1.70 0.88
------- ------- ------- ------- -------
Total from investment operations (0.87) 5.21 2.99 1.85 1.00
------- ------- ------- ------- -------
Less distributions
Dividends from net investment in-
come (0.06) (0.06) (0.15) (0.11) (0.14)
Distributions from net realized
gains (2.28) (0.79) (1.06) (1.41) (0.79)
------- ------- ------- ------- -------
Total distributions (2.34) (0.85) (1.21) (1.52) (0.93)
------- ------- ------- ------- -------
Change in net asset value for the
period (3.21) 4.36 1.78 0.33 0.07
------- ------- ------- ------- -------
Net asset value, end of period $ 17.00 $ 20.21 $ 15.85 $ 14.07 $ 13.74
------- ------- ------- ------- -------
Total Return (b) (4.6)% 34.5% 22.7% 16.0% 7.7%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $61,566 $64,998 $42,414 $33,438 $29,140
Ratio to average net assets:
Expenses (a) 1.39% 1.40% 1.49% 1.54% 1.54%
Net investment income (loss) (a) .35% .34% .44% 1.07% 0.87%
Portfolio turnover rate 35% 48% 48% 47% 52%
</TABLE>
- --------
(a) Net of fees waived amounting to 0.25%, 0.16% and 0.02% of average net as-
sets for the periods ended October 31, 1997, October 31, 1996 and October
31, 1995, respectively.
(b) Does not include maximum sales charge of 4%.
13
<PAGE>
THE TOCQUEVILLE SMALL CAP VALUE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
OCTOBER 31,
----------- PERIOD FROM
PER SHARE OPERATING AUGUST 1, 1994
PERFORMANCE TO
(FOR A SHARE OUTSTANDING 1998 1997 1996 1995 OCTOBER 31, 1994
THROUGHOUT THE PERIOD) ---- ---- ---- ---- ----------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 16.30 $ 13.37 $ 11.91 $10.22 $10.00
------- ------- ------- ------ ------
Income from investment
operations:
Net investment income
(loss) (0.15) (0.05) (0.10) (0.05) 0.02
Net realized and
unrealized gain (loss) (1.83) 4.44 2.33 1.96 0.20
------- ------- ------- ------ ------
Total from investment
operations (1.98) 4.39 2.23 1.91 0.22
------- ------- ------- ------ ------
Less distributions
Dividends from net
investment income -- -- -- (0.03) --
Distributions from net
realized gains (1.73) (1.46) (0.77) (0.19) --
------- ------- ------- ------ ------
Total distributions (1.73) (1.46) (0.77) (0.22) --
------- ------- ------- ------ ------
Change in net asset
value for the period (3.71) 2.93 1.46 1.69 0.22
------- ------- ------- ------ ------
Net asset value, end of
period $ 12.59 $ 16.30 $ 13.37 $11.91 $10.22
------- ------- ------- ------ ------
Total Return (b) (13.4)% 36.0% 19.7 % 19.2 % 2.2%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000) $21,610 $20,587 $11,545 $9,383 $6,755
Ratio to average net
assets:
Expenses (a) 1.67% 1.75 % 2.36 % 2.50 % 2.08%(c)
Net investment income
(loss) (a) (1.12)% (.81)% (1.18)% (0.53)% 0.85%(c)
Portfolio turnover rate 62% 95% 107 % 88 % 9%
</TABLE>
- --------
(a) Net of fees waived amounting to 0.35%, 0.33%, 0.33% and 0.75% of average
net assets for the periods ended October 31, 1997, October 31, 1996, Octo-
ber 31, 1995, and October 31, 1994, respectively.
(b) Does not include maximum sales charge of 4%. For the period ended October
31, 1994, not annualized.
(c) Annualized.
14
<PAGE>
THE TOCQUEVILLE INTERNATIONAL VALUE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
OCTOBER 31,
----------- PERIOD FROM
PER SHARE OPERATING AUGUST 1, 1994
PERFORMANCE TO
(FOR A SHARE OUTSTANDING 1998 1997 1996 1995 OCTOBER 31, 1994
THROUGHOUT THE PERIOD) ---- ---- ---- ---- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 10.19 $ 12.57 $ 10.83 $10.02 $10.00
------- ------- ------- ------ ------
Income from investment
operations:
Net investment income
(loss) 0.10 (.03) 0.16 (0.01) (0.04)
Net realized and
unrealized gain (loss) (2.07) (1.67) 1.58 0.82 0.06
------- ------- ------- ------ ------
Total from investment
operations (1.97) (1.70) 1.74 0.81 0.02
------- ------- ------- ------ ------
Less distributions
Dividends from net
investment income (0.11) (0.06) -- -- --
Distributions from net
realized gains -- (0.62) -- -- --
------- ------- ------- ------ ------
Total distributions (0.11) (0.68) -- -- --
------- ------- ------- ------ ------
Change in net asset
value for the period (2.08) (2.38) 1.74 0.81 0.02
------- ------- ------- ------ ------
Net asset value, end of
period $8.11 $ 10.19 $ 12.57 $10.83 $10.02
------- ------- ------- ------ ------
Total Return (b) (19.4)% (14.3)% 16.1% 8.1 % 0.2 %
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000) $68,415 $60,963 $23,932 $6,270 $2,516
Ratio to average net
assets:
Expenses (a) 2.00% 1.99% 1.98% 4.43 % 6.18 %(c)
Net investment income
(loss) (a) .64% .16% 1.45% (0.53)% (2.47)%(c)
Portfolio turnover rate 77% 70% 135% 109 % 0 %
</TABLE>
- --------
(a) Net of fees waived amounting to 0.11%, 0.55%, 1.28% and 1.00% of average
net assets for the periods ended October 31, 1997, October 31, 1996, Octo-
ber 31, 1995 and October 31, 1994, respectively.
(b) Does not include maximum sales charge of 4%. For the period ended October
31, 1994, not annualized.
(c) Annualized.
15
<PAGE>
THE TOCQUEVILLE GOVERNMENT FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED PERIOD FROM
OCTOBER 31, SEPTEMBER 4, 1995
PER SHARE OPERATING PERFORMANCE ----------- TO
(FOR A SHARE OUTSTANDING 1998 1997 1996 OCTOBER 31, 1995
THROUGHOUT THE PERIOD) ------- ------- ------ -----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period $ 10.11 $ 10.13 $10.05 $10.00
------- ------- ------ ------
Income from investment opera-
tions:
Net investment income 0.48 0.52 0.49 0.05
Net realized and unrealized
gain (loss) 0.18 0.01 0.08 0.05
------- ------- ------ ------
Total from investment opera-
tions 0.66 0.53 0.57 0.10
------- ------- ------ ------
Less distributions
Dividends from net investment
income (0.48) (0.52) (0.49) (0.05)
Distributions from net realized
gains -- (0.03) -- --
------- ------- ------ ------
Total distributions (0.48) (0.55) (0.49) (0.05)
------- ------- ------ ------
Change in net asset value for
the period 0.18 (0.02) 0.08 0.05
------- ------- ------ ------
Net asset value, end of period $ 10.29 $ 10.11 $10.13 $10.05
------- ------- ------ ------
Total Return (b) 6.7% 5.4% 5.9% 6.3%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000) $14,773 $16,808 $9,788 $6,506
Ratio to average net assets:
Expenses (a) 1.00% 1.00% 1.47% 2.74%(c)
Net investment income (a) 4.78% 5.17% 4.94% 3.08%(c)
Portfolio turnover rate 109% 339%(d) 85% 0%
</TABLE>
- --------
(a) Net of fees waived amounting to 0.44%, 0.91%, 1.25% and 0.77% of average
net assets for the periods ended October 31, 1998, October 31, 1997,
October 31, 1996 and October 31, 1995, respectively.
(b) Does not include maximum sales charge of 4%.
(c) Annualized.
(d) Portfolio turnover does not include securities acquired from Ivy Short Term
Bond Fund on November 29, 1996.
16
<PAGE>
THE TOCQUEVILLE GOLD FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM
JUNE 29, 1998
PER SHARE OPERATING PERFORMANCE TO
(FOR A SHARE OUTSTANDING THROUGHOUT THE OCTOBER 31, 1998
PERIOD) ----------------
<S> <C>
Net asset value, beginning of period $10.00
------
Income from investment operations:
Net investment income 0.00
Net realized and unrealized gain (loss) 0.76
------
Total from investment operations 0.76
------
Less distributions
Dividends from net investment income --
Distributions from net realized gains --
------
Total distributions --
------
Change in net asset value for the period 0.76
------
Net asset value, end of period $10.76
------
Total Return (b) 7.6%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) $8,229
Ratio to average net assets:
Expenses (a) 1.98%(c)
Net investment income (a) 0.06%(c)
Portfolio turnover rate 1%
</TABLE>
- --------
(a) Net of fees waived amounting to 2.25% of average net assets for the period
ended October 31, 1998.
(b) Does not include maximum sales charge of 4%.
(c) Annualized.
17
<PAGE>
THE TOCQUEVILLE FUND
INVESTMENTS AS OF OCTOBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
COMMON STOCKS--91.9% Shares Value
- -------------------------------------------------------------------------
<S> <C> <C>
BUSINESS SERVICES--4.0%
H&R Block, Inc. 25,000 $ 1,120,313
Siebel Systems, Inc.* 266 5,436
Waste Management, Inc. 30,000 1,353,750
- -------------------------------------------------------------------------
2,479,499
- -------------------------------------------------------------------------
CONSUMER NON-DURABLES--9.7%
Burlington Industries, Inc.* 200,000 1,850,000
Kmart Corporation* 200,000 2,825,000
Philip Morris Companies Inc. 25,000 1,278,125
- -------------------------------------------------------------------------
5,953,125
- -------------------------------------------------------------------------
ENERGY--12.6%
Baker Hughes, Inc. 67,000 1,478,187
Burlington Resources, Inc. 40,000 1,647,500
Murphy Oil Corporation 50,000 2,065,625
Tesoro Petroleum Corporation* 100,000 1,481,250
Varco International, Inc.* 100,000 1,081,250
- -------------------------------------------------------------------------
7,753,812
- -------------------------------------------------------------------------
FINANCE--13.1%
BankAmerica Corporation 45,264 2,599,851
The Bank of Tokyo-Mitsubishi, Ltd.--ADR 100,000 975,000
Citigroup Inc. 37,500 1,764,844
Financial Security Assurance Holdings Ltd. 30,000 1,494,375
Hartford Steam Boiler Inspection & Insurance Company 30,000 1,211,250
- -------------------------------------------------------------------------
8,045,320
- -------------------------------------------------------------------------
LUMBER AND WOOD PRODUCTS--3.9%
Deltic Timber Corporation 50,000 1,221,875
Longview Fibre Company 100,000 1,200,000
- -------------------------------------------------------------------------
2,421,875
- -------------------------------------------------------------------------
MANUFACTURING--5.5%
Aluminum Company of America 23,950 1,898,038
Tenneco Inc. 50,000 1,518,750
- -------------------------------------------------------------------------
3,416,788
- -------------------------------------------------------------------------
MEDICAL SERVICES--6.1%
Genzyme Corporation* 50,000 2,103,125
Integrated Health Services, Inc. 100,000 1,618,750
- -------------------------------------------------------------------------
3,721,875
- -------------------------------------------------------------------------
METALS & MINERALS--7.7%
ASARCO Incorporated 50,000 1,071,875
Homestake Mining Company 184,800 2,194,500
Inco, Ltd. 75,000 801,563
Stillwater Mining Company* 20,000 647,500
- -------------------------------------------------------------------------
4,715,438
- -------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
See Notes to the Financial Statements.
<TABLE>
<CAPTION>
COMMON STOCKS Market
(CONTINUED) Shares Value
- ----------------------------------------------------------------------------
<S> <C> <C>
PUBLISHING--1.8%
Readers Digest Association, Inc. 50,000 $ 1,087,500
- ----------------------------------------------------------------------------
1,087,500
- ----------------------------------------------------------------------------
REAL ESTATE--2.2%
Cattellus Development Corporation* 100,000 1,375,000
- ----------------------------------------------------------------------------
1,375,000
- ----------------------------------------------------------------------------
TECHNOLOGY--16.4%
Adobe Systems, Inc. 60,000 2,227,500
The Boeing Company 30,000 1,125,000
Electronic Data Systems Corporation 30,000 1,220,625
International Business Machines Corporation 20,000 2,968,750
Motorola, Inc. 40,000 2,080,000
UNOVA, Inc* 35,000 505,312
- ----------------------------------------------------------------------------
10,127,187
- ----------------------------------------------------------------------------
TRANSPORTATION & PUBLIC UTILITIES--8.9%
AT&T Corporation 50,000 3,112,500
Sprint Corporation 25,000 1,918,750
Union Pacific Corporation 10,000 476,250
- ----------------------------------------------------------------------------
5,507,500
- ----------------------------------------------------------------------------
Total Common Stocks (Cost $44,996,366) 56,604,919
- ----------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--8.8% Amount
----------
U.S. Treasury Bills:
4.75% due 12/03/98 $1,000,000 995,777
3.99% due 02/11/99 1,000,000 988,689
4.12% due 03/04/99 1,000,000 985,933
Repurchase Agreement with Firstar Bank 3.75%, dated
10/30/98, due 11/02/98, collateralized by U.S.
Treasury Notes valued at $2,518,599. Repurchase
proceeds of $2,470,772. (Cost $2,470,000) 2,470,000 2,470,000
- ----------------------------------------------------------------------------
Total Short-Term Investments
(Cost $5,436,849) 5,440,399
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $50,433,215)--100.7% 62,045,318
LIABILITIES LESS OTHER ASSETS--(0.7%) (479,811)
- ----------------------------------------------------------------------------
TOTAL NET ASSETS--100% $61,565,507
-----------
</TABLE>
18
<PAGE>
THE TOCQUEVILLE SMALL CAP VALUE FUND
INVESTMENTS AS OF OCTOBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
COMMON STOCKS--99.8% Shares Value
- ---------------------------------------------------------------
<S> <C> <C>
BUSINESS SUPPORT SERVICES--16.3%
Olsten Corporation 125,000 $ 1,148,437
PSC, Inc.* 110,000 1,058,750
Sensormatic Electronics Corporation* 80,000 450,000
Ultrak, Inc.* 55,000 433,125
Wave Technologies International, Inc.* 136,000 442,000
- ---------------------------------------------------------------
3,532,312
- ---------------------------------------------------------------
CABLE TELEVISION INFRASTRUCTURE--9.5%
Anixter International Inc.* 20,000 308,750
ANTEC Corporation* 40,000 665,000
C-COR Electronics, Inc.* 62,000 813,750
Scientific-Atlanta, Inc. 17,000 253,938
- ---------------------------------------------------------------
2,041,438
- ---------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES--17.1%
National Computer Systems, Inc.* 36,000 1,008,000
Systems & Computer Technology Corporation* 95,000 1,353,750
Unisys Corporation * 50,000 1,331,250
- ---------------------------------------------------------------
3,693,000
- ---------------------------------------------------------------
CONSUMER NON DURABLES--5.9%
Galoob Toys, Inc. 80,000 960,000
Sbarro, Inc.* 5,000 117,500
Seattle Filmworks, Inc.* 50,000 187,500
- ---------------------------------------------------------------
1,265,000
- ---------------------------------------------------------------
DRILLING EQUIPMENT & SERVICES--4.6%
Nabors Industries, Inc.* 30,000 555,000
Oceaneering International, Inc.* 30,000 431,250
- ---------------------------------------------------------------
986,250
- ---------------------------------------------------------------
HEALTH CARE--7.6%
Dura Pharmaceuticals, Inc.* 20,000 241,250
Owens & Minor, Inc. Holding Company 55,000 873,125
Perrigo Company* 67,500 535,781
- ---------------------------------------------------------------
1,650,156
- ---------------------------------------------------------------
MANUFACTURING & RELATED--7.3%
CLARCOR Inc. 10,000 168,750
Fedders Corporation 100,000 487,500
O'Sullivan Industries Holding, Inc.* 85,000 929,687
- ---------------------------------------------------------------
1,585,937
- ---------------------------------------------------------------
</TABLE>
* Non-income producing security.
See Notes to the Financial Statements.
<TABLE>
<CAPTION>
COMMON STOCKS Market
(CONTINUED) Shares Value
- ----------------------------------------------------------------------------
<S> <C> <C>
PRECIOUS METALS--7.0%
Battle Mountain Gold Company 160,000 $ 870,000
Echo Bay Mines Ltd.* 100,000 225,000
Homestake Mining Company 25,000 296,875
Kinross Gold Corporation* 50,000 128,125
- ----------------------------------------------------------------------------
1,520,000
- ----------------------------------------------------------------------------
SPECIALTY CHEMICALS--9.2%
Asahi/America, Inc.* 40,000 195,000
A. Schulman, Inc. 16,000 318,000
Chemfab Corporation* 5,000 105,000
Crompton & Knowles Corporation 10,000 160,625
M.A. Hanna Company 35,000 514,063
OM Group, Inc. 5,000 163,125
Osmonics, Inc.* 60,000 536,250
- ----------------------------------------------------------------------------
1,992,063
- ----------------------------------------------------------------------------
TELEPHONE INFRASTRUCTURE--15.3%
Brite Voice Systems, Inc.* 100,000 825,000
Norstran, Inc.* 50,000 856,250
Periphonics Corporation* 110,000 969,375
Teltrend, Inc.* 50,000 650,000
- ----------------------------------------------------------------------------
3,300,625
- ----------------------------------------------------------------------------
Total Common Stocks
(Cost $20,565,532) 21,566,781
- ----------------------------------------------------------------------------
<CAPTION>
Principal
Amount
SHORT-TERM INVESTMENTS--1.7% ---------
<S> <C> <C>
Repurchase Agreement with Firstar Bank, 3.25%, dated
10/30/98, due 11/02/98, collateralized by U.S.
Treasury Notes valued at $365,297. Repurchase
proceeds of $357,097.
(Cost $357,000) $357,000 357,000
- ----------------------------------------------------------------------------
Total Short-Term Investments
(Cost $357,000) 357,000
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS (COST $20,922,532)--101.5% 21,923,781
OTHER ASSETS AND LIABILITIES--(1.5%) (313,894)
- ----------------------------------------------------------------------------
TOTAL NET ASSETS--100% $21,609,887
-----------
</TABLE>
19
<PAGE>
THE TOCQUEVILLE INTERNATIONAL VALUE FUND
INVESTMENTS AS OF OCTOBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
COMMON STOCKS AND WARRANTS--95.9% Shares Value
- -------------------------------------------------------------------
<S> <C> <C>
AUSTRALIA--1.3%
Normandy Mining Limited 1,000,000 $ 889,857
- -------------------------------------------------------------------
889,857
- -------------------------------------------------------------------
AUSTRIA--0.4%
Eybl International* 12,000 278,061
- -------------------------------------------------------------------
278,061
- -------------------------------------------------------------------
FRANCE--13.6%
Alcatel Alsthom 3,500 389,876
Banque Nationale de Paris Intercontinentale 2,500 413,900
Bull SA* 13,500 129,973
Carbone-Lorraine 6,500 374,309
Chaine et Trame 12,299 168,210
Charlatte SA* 15,400 122,077
Compagnie Internationale Andre Trigano SA 500 17,987
Credit Commercial de France 2,000 140,438
Ducros Services Rapides SA* 50,010 373,484
Eiffage 8,250 681,450
Emin--Leydier 6,300 326,513
Europeenne d'Extincteurs 8,000 416,059
Faiveley SA 16,700 477,838
Faiveley Warrants 7/99* 700 271
Grande Paroisse SA* 10,500 315,743
Guillin Emballages 4,000 108,622
Ingenico SA 8,461 240,573
La Brosse et J. Dupont 5,000 539,869
Lagardere S.C.A. 6,500 261,549
Louis Dreyfus Citrus 20,500 590,257
Manitou B.F. SA 2,400 414,188
MORS* 850,000 856,593
Musee Grevin SA* 20,000 334,719
Rubis et Cie 24,540 649,171
Titus Interactive* 4,000 577,300
Vallourec SA 8,500 394,644
- -------------------------------------------------------------------
9,315,613
- -------------------------------------------------------------------
GERMANY--3.7%
Daimler-Benz AG 5,600 434,489
Linde AG 700 380,389
Preussag AG 1,400 516,483
ProSieben Media AG 7,200 369,521
Viag AG 1,175 798,137
- -------------------------------------------------------------------
2,499,019
- -------------------------------------------------------------------
HONG KONG--8.0%
Elec & Eltek International Holdings Limited 11,120,000 2,139,069
Shanghai Industrial Holdings Limited 1,400,000 3,235,302
VTech Holdings Limited 20,000 75,008
- -------------------------------------------------------------------
5,449,379
- -------------------------------------------------------------------
</TABLE>
* Non-income producing security.
See Notes to the Financial Statements.
<TABLE>
<CAPTION>
COMMON STOCKS AND Market
WARRANTS (CONTINUED) Shares Value
- ----------------------------------------------------------------------
<S> <C> <C>
INDONESIA--7.9%
Cahaya Kalbar 8,441,250 $ 1,555,009
PT Asuransi Lippo Life* 4,000,000 65,791
PT Hanjaya Mandaha Sampoerna* 3,523,000 1,390,695
PT Indofood Sukses Makmur* 5,866,500 1,312,278
PT Komatsu Indonesia 10,039,500 528,409
PT Komatsu Indonesia--Rights 11/24/98 6,224,490 0
PT Mayora Indah 10,000,000 427,643
PT Tunas Ridean 3,425,000 146,468
- ----------------------------------------------------------------------
5,426,293
- ----------------------------------------------------------------------
ITALY--1.0%
Edison S.p.A. 42,000 370,083
Pirelli S.p.A. 110,000 315,590
- ----------------------------------------------------------------------
685,673
- ----------------------------------------------------------------------
JAPAN--16.4%
Asia Securities Printing Co., Ltd. 26,000 261,057
The Bank of Tokyo--Mitsubishi, Ltd. 132,250 1,226,865
Enix Corporation 43,000 1,077,523
Fuji Electric Co., Ltd. 142,000 249,814
H.I.S. Company Limited 300 5,664
Hitachi Koki Co., Ltd. 92,000 253,436
Horipro 30,000 172,493
INES Corporation 42,000 299,159
The Koa Fire & Marine Insurance Co., Ltd. 60,000 180,217
Kyokuto Kaihatsu Kogyo Co., Ltd. 81,000 229,390
Matsushita Seiko Co., Ltd. 56,000 185,983
Matsumoto Yushi-Seiyaku 15,000 248,441
Miroku Jyoho Service Co., Ltd. 12,000 92,683
Mitsui Marine and Fire Insurance Company, Ltd. 80,000 397,506
N.E. Chemcat 20,000 127,353
Nitto Kohki Co., Ltd. 60,000 441,788
Nippon Sanso Corporation 432,000 1,019,510
Oiles Corporation 14,400 312,032
Okumura Corporation 98,000 424,710
Paramount Bed 17,200 382,299
Shiseido Company, Limited 30,000 328,509
Sony Corporation 8,600 546,142
Tenma Corporation 24,000 222,439
Tokyo Style Co., Ltd. 80,000 799,131
Yamada Denki 27,000 486,585
The Yasuda Fire & Marine Insurance Co., Ltd. 200,000 985,184
Yokogawa Bridge Corp. 42,000 112,095
Yokogawa Construction., Ltd. 56,000 182,619
- ----------------------------------------------------------------------
11,250,627
- ----------------------------------------------------------------------
</TABLE>
20
<PAGE>
THE TOCQUEVILLE INTERNATIONAL VALUE FUND
INVESTMENTS AS OF OCTOBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS AND Market
WARRANTS (CONTINUED) Shares Value
- ---------------------------------------------------------------------
<S> <C> <C>
MALAYSIA--1.7%
Malaysia Assurance Alliance Berhad 10,000 $ 5,157
Road Builder (M) Holdings Berhad 2,034,000 839,087
YTL Corporation Berhard 532,000 315,483
- ---------------------------------------------------------------------
1,159,727
- ---------------------------------------------------------------------
NETHERLANDS--2.2%
Draka Holding N.V. 20,000 610,376
Wolters Kluwer N.V. 4,700 910,960
- ---------------------------------------------------------------------
1,521,336
- ---------------------------------------------------------------------
PHILIPPINES--6.3%
DMCI Holdings, Inc.* 37,199,000 1,456,658
Ionics Circuit, Inc. 5,676,000 1,441,902
Solid Group, Inc.* 46,873,000 999,058
Universal Robina Corp. 5,000,000 396,542
- ---------------------------------------------------------------------
4,294,160
- ---------------------------------------------------------------------
SINGAPORE--10.9%
Clipsal Industries Ltd. 2,726,000 2,562,440
Fraser & Neave Limited 878,000 2,804,078
GP Batteries International Ltd. 302,000 664,022
GPE Industries Limited 1,182,000 407,790
Robinson & Company, Limited 233,200 647,380
Sunright Limited 900,000 386,930
- ---------------------------------------------------------------------
7,472,640
- ---------------------------------------------------------------------
SOUTH KOREA--5.6%
Samsung Display Devices Company 55,044 2,064,993
Samsung Electronics Co. 21,407 876,099
Sindo Ricoh * 30,000 907,189
- ---------------------------------------------------------------------
3,848,281
- ---------------------------------------------------------------------
SPAIN--3.4%
Actividades de Construccion y Servicios, S.A. 10,000 318,533
Aldeasa, S.A. 26,000 884,380
Banco Pastor SA 10,000 533,604
Miquel y Costas & Miquel, S.A. 19,000 619,349
- ---------------------------------------------------------------------
2,355,866
- ---------------------------------------------------------------------
SRI LANKA--0.2%
John Keells Holdings, Ltd.* 37,500 106,228
- ---------------------------------------------------------------------
106,228
- ---------------------------------------------------------------------
SWITZERLAND--2.0%
Novartis (Registered Shares) 285 513,551
Novartis AG (Bearer Shares) 460 828,211
- ---------------------------------------------------------------------
1,341,762
- ---------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements.
<TABLE>
<CAPTION>
COMMON STOCKS AND Market
WARRANTS (CONTINUED) Shares Value
- -----------------------------------------------------------------------------
<S> <C> <C>
THAILAND--8.5%
Asia Credit Public Company Limited* 1,083,133 $ 294,779
Asia Credit Public Company
Limited--Foreign* 160,253 54,517
GSS Array Technology Public Company Limited--Foreign* 268,900 519,594
Krung Thai Bank Public Company Limited* 1,321,500 485,530
Krung Thai Bank Public Company
Limited--Foreign* 3,019,683 1,088,910
Siam Makro Public Company Limited 600,000 1,175,705
Thai Farmers Bank Public Company Limited* 995,000 1,035,784
Thai Farmers Bank Public Company
Limited--Foreign* 757,600 958,755
Thai Stanley Electric Public Company Limited* 271,811 88,769
Thai Stanley Electric Public Company Limited--Foreign* 119,989 32,329
Thai Rung Union Car Public Company Limited--Foreign 128,000 52,254
- -----------------------------------------------------------------------------
5,786,926
- -----------------------------------------------------------------------------
UNITED KINGDOM--0.2%
Linx Printing Technologies plc 40,000 77,039
Micro Focus Group PLC* 22,000 37,140
- -----------------------------------------------------------------------------
114,179
- -----------------------------------------------------------------------------
UNITED STATES--2.6%
ABB AB--ADR 2,700 283,500
AngloGold Limited 32,500 812,500
Inco Limited 64,500 689,344
- -----------------------------------------------------------------------------
1,785,344
- -----------------------------------------------------------------------------
Total Common Stocks and Warrants (Cost $87,398,600) 65,580,971
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS (COST $87,398,600)--95.9% 65,580,971
CASH**--2.7% 1,897,128
OTHER ASSETS & LIABILITIES--1.4% 936,820
- -----------------------------------------------------------------------------
TOTAL NET ASSETS--100.0% $68,414,919
-----------
</TABLE>
* Non-income producing security.
** Cash balance is interest earning.
21
<PAGE>
THE TOCQUEVILLE GOVERNMENT FUND
INVESTMENTS AS OF OCTOBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Market
Value Value
- ------------------------------------------------------------------------
<S> <C> <C>
U.S GOVERNMENT AGENCY--33.9%
Federal Home Loan Bank (FHLB):
6.56%, due 07/15/08 $1,000,000 $ 997,303
7.15%, due 12/28/12 1,000,000 1,003,851
6.87%, due 09/11/13 1,000,000 999,512
6.29%, due 10/08/13 1,000,000 975,560
Federal Home Loan Mortgage Corporation (FHLMC),
7.00%, due 12/04/12 1,000,000 1,031,463
- ------------------------------------------------------------------------
Total U.S. Government Agency (Cost $5,006,124) 5,007,689
- ------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS--39.1%
U.S. Treasury Notes:
5.625%, due 11/30/99 500,000 506,406
5.875%, due 11/30/01 1,000,000 1,043,751
5.875%, due 09/30/02 1,000,000 1,053,126
5.750%, due 10/31/02 1,000,000 1,049,063
5.750%, due 08/15/03 1,000,000 1,060,001
5.625%, due 02/15/06 1,000,000 1,069,688
- ------------------------------------------------------------------------
Total U.S. Treasury Obligations (Cost $5,475,092) 5,782,035
- ------------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements.
<TABLE>
<CAPTION>
Par Market
Value Value
- ----------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENTS--23.5%
U.S. Treasury Bills:
4.45%, due 12/17/98 $1,000,000 $ 994,314
4.35%, due 01/21/99 1,500,000 1,485,333
4.08%, due 03/18/99 1,000,000 984,491
- ----------------------------------------------------------------------
Total Short-Term Investments (Cost $3,463,816) 3,464,138
- ----------------------------------------------------------------------
TOTAL INVESTMENTS (COST $13,945,032)--96.5% 14,253,862
OTHER ASSETS & LIABILITIES,
NET--3.5% 518,894
- ----------------------------------------------------------------------
TOTAL NET ASSETS--100% $14,772,756
-----------
</TABLE>
22
<PAGE>
THE TOCQUEVILLE GOLD FUND
INVESTMENTS AS OF OCTOBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
COMMON STOCKS--92.3% Shares Value
- -------------------------------------------------------------
<S> <C> <C>
GOLD & GOLD RELATED--73.8%
Acacia Resources Limited (AU) 47,000 $ 74,580
Agnico-Eagle Mines Limited 50,000 246,875
AngloGold Limited--ADR 25,000 625,000
Ashanti Goldfields Company Ltd. 45,000 385,313
Barrick Gold Corporation 6,000 128,250
Battle Mountain Gold Company 20,000 108,750
Dayton Mining Corporation* 25,000 12,500
Delta Gold NL (AU) 47,000 76,627
Durban Roodepoort Deep Limited* 100,000 296,875
Euro-Nevada Mining Corporation (CN) 15,000 233,678
Franco-Nevada Mining Corp. Ltd. (CN) 12,500 240,384
Getchell Gold Corporation* 30,000 525,000
Gold Reserve Corporation* 25,000 31,250
Goldcorp Inc.* 40,000 195,000
Greenstone Resources Ltd.* 205,000 301,094
Harmony Gold Mining Company Limited* 75,000 389,062
Homestake Mining Company 40,000 475,000
Kinross Gold Corporation* 90,000 230,625
Meridian Gold Inc.* 80,000 415,000
Newmont Mining Corporation 15,000 318,750
Normandy Mining Limited (AU) 150,000 133,479
Placer Dome Inc. 10,000 157,500
Prime Resources Group, Inc. 25,000 215,625
Rayrock Yellowknife Resources, Inc.* (CN) 35,000 147,059
Sutton Resources Ltd.* 30,000 111,562
- -------------------------------------------------------------
6,074,838
- -------------------------------------------------------------
PRECIOUS METALS & RELATED--17.7%
Aluminum Company of America 2,000 158,500
Apex Silver Mines Limited* 20,000 182,500
Freeport-McMoran Copper & Gold, Inc. 10,000 123,125
Impala Platinum Holdings Limited 10,000 101,250
Inco Limited 7,000 74,813
Minorco SA--ADR 15,000 255,000
Phelps Dodge Corporation 2,000 115,250
Southern Peru Copper 10,000 119,375
Stillwater Mining Company* 10,000 323,750
- -------------------------------------------------------------
1,453,563
- -------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements.
<TABLE>
<CAPTION>
COMMON STOCKS Market
(CONTINUED) Shares Value
- -------------------------------------------------------------------------------
<S> <C> <C>
DIAMONDS--0.8%
De Beers Cons Mines--ADR 5,000 $ 71,875
- -------------------------------------------------------------------------------
71,875
- -------------------------------------------------------------------------------
Total Common Stocks (Cost $7,167,807) 7,600,276
- -------------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--9.0% Amount
---------
U.S. Treasury Bill 4.05% due 01/28/99 $ 500,000 495,045
Repurchase Agreement with Firstar Bank 3.25%, dated
10/30/98, due 11/02/98, collateralized by U.S. Treasury
Notes valued at $249,823. Repurchase proceeds of
$244,066.
(Cost $244,000) 244,000 244,000
- -------------------------------------------------------------------------------
Total Short Term Investments
(Cost $737,913) 739,045
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (COST $7,905,720)--101.3% 8,339,321
LIABILITIES LESS OTHER ASSETS--(1.3%) (110,593)
- -------------------------------------------------------------------------------
TOTAL NET ASSETS--100.0% $8,228,728
----------
</TABLE>
* Non-income producing security.
(AU)Australia
(CN)Canada
ADR:American Depository Receipt
23
<PAGE>
THE TOCQUEVILLE TRUST
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THE SMALL CAP INTERNATIONAL
TOCQUEVILLE VALUE VALUE GOVERNMENT GOLD
FUND FUND FUND FUND FUND
----------- ----------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at value* $62,045,318 $21,923,781 $65,580,971 $14,253,862 $8,339,321
Foreign Currencies** 0 0 761,839 0 0
Cash*** 45 156 1,897,129 265,439 2,318
Receivable for
investments sold 0 360,488 1,175,594 0 32,256
Receivable for fund
shares sold 0 0 14,000 144,000 0
Dividends, interest and
other receivables 36,079 3,154 459,004 181,457 7,203
Due from Investment
Adviser 0 0 0 0 1,003
Prepaid expense 1,539 6,601 9,256 3,475 12,271
Deferred organization
expense 0 6,213 4,635 8,638 26,780
----------- ----------- ----------- ----------- ----------
Total Assets 62,082,981 22,300,393 69,902,428 14,856,871 8,421,152
----------- ----------- ----------- ----------- ----------
LIABILITIES
Payable for investments
purchased 381,515 606,663 1,160,435 0 151,392
Payable for fund shares
repurchased 10,000 3,000 19,024 10,000 0
Payable to Investment
Adviser 36,752 12,631 50,041 9,044 0
Dividends payable 0 0 0 15,959 0
Accrued distribution fee 12,056 4,015 12,946 2,990 4,523
Accrued expenses and
other liabilities 77,151 64,197 245,063 46,122 36,509
----------- ----------- ----------- ----------- ----------
Total Liabilities 517,474 690,506 1,487,509 84,115 192,424
----------- ----------- ----------- ----------- ----------
Net Assets $61,565,507 $21,609,887 $68,414,919 $14,772,756 $8,228,728
----------- ----------- ----------- ----------- ----------
NET ASSETS CONSISTED OF:
Paid in capital $45,482,204 $20,617,745 $95,800,497 $14,477,733 $7,819,077
Undistributed net
investment income
(loss) 185,582 0 0 0 1,169
Accumulated net realized
gain (loss) 4,285,618 (9,107) (5,281,417) (13,807) (25,750)
Net unrealized
appreciation
(depreciation) 11,612,103 1,001,249 (22,104,161) 308,830 434,232
----------- ----------- ----------- ----------- ----------
Net assets $61,565,507 $21,609,887 $68,414,919 $14,772,756 $8,228,728
----------- ----------- ----------- ----------- ----------
Shares outstanding
(unlimited shares of
$0.01 par value
authorized) 3,620,930 1,716,297 8,431,119 1,436,264 764,645
Net asset value and
redemption price per
share $ 17.00 $ 12.59 $ 8.11 $ 10.29 $ 10.76
----------- ----------- ----------- ----------- ----------
Maximum offering price
per share $ 17.71 $ 13.11 $ 8.45 $ 10.72 $ 11.21
----------- ----------- ----------- ----------- ----------
*Cost of Investments $50,433,215 $20,922,532 $87,398,600 $13,945,032 $7,905,720
**Cost of Foreign
Currencies $ 0 $ 0 $ 1,048,419 $ 0 $ 0
</TABLE>
***Cash balance in International Fund is an interest earning balance.
See Notes to the Financial Statements.
24
<PAGE>
THE TOCQUEVILLE TRUST
STATEMENTS OF OPERATIONS
Year Ended October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THE SMALL CAP INTERNATIONAL
TOCQUEVILLE VALUE VALUE GOVERNMENT GOLD
FUND FUND FUND FUND FUND (1)
----------- ----------- ------------- ---------- --------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends* $ 729,065 $ 62,716 $ 1,478,611 $ 0 $ 17,124
Interest 424,768 62,712 212,845 940,330 21,216
----------- ----------- ------------ ---------- --------
1,153,833 125,428 1,691,456 940,330 38,340
----------- ----------- ------------ ---------- --------
EXPENSES:
Investment Adviser's
fee 498,857 171,076 605,315 81,416 18,773
Custodian and fund ac-
counting fees 40,394 32,065 320,663 28,260 11,193
Transfer agent and
shareholder services 34,119 14,275 17,238 13,016 5,781
Professional fees 32,635 33,229 44,171 21,393 23,493
Distribution fees 166,286 57,026 160,106 40,708 4,693
Administration fee 99,771 34,215 96,063 24,425 2,816
Printing and mailing
expense 19,090 10,110 6,246 3,389 2,091
Registration fees 14,620 6,920 13,502 5,522 5,535
Trustee fees and ex-
penses 8,572 9,035 8,666 8,666 1,968
Insurance 3,285 3,325 1,920 2,190 1,476
Amortization of organ-
ization costs 0 5,617 6,183 4,394 1,613
Other 3,794 4,104 4,129 1,825 50
----------- ----------- ------------ ---------- --------
Total expenses before
waiver 921,423 380,997 1,284,202 235,204 79,482
Less: Fees waived 0 0 0 (72,372) (42,311)
----------- ----------- ------------ ---------- --------
Net expenses 921,423 380,997 1,284,202 162,832 37,171
----------- ----------- ------------ ---------- --------
NET INVESTMENT INCOME
(LOSS) 232,410 (255,569) 407,254 777,498 1,169
----------- ----------- ------------ ---------- --------
REALIZED AND
UNREALIZED GAIN
(LOSS):
Net realized gain
(loss) on:
Investments 4,555,614 (7,237) (4,860,667) (5,562) (25,750)
Foreign currency
translation 0 0 (199,667) 0 0
Net change in
unrealized
appreciation
(depreciation) (7,924,209) (3,182,451) (9,062,388) 282,830 434,232
----------- ----------- ------------ ---------- --------
Net gain (loss) on
investments and
foreign currency (3,368,595) (3,189,688) (14,122,722) 277,268 408,482
----------- ----------- ------------ ---------- --------
NET INCREASE (DE-
CREASE) IN NET ASSETS
RESULTING FROM OPERA-
TIONS $(3,136,185) $(3,445,257) $(13,715,468) $1,054,766 $409,651
----------- ----------- ------------ ---------- --------
*Net of Foreign Taxes
Withheld 1,031 0 205,224 0 892
----------- ----------- ------------ ---------- --------
</TABLE>
(1)From 06/29/98--Date of Inception
See Notes to the Financial Statements.
25
<PAGE>
THE TOCQUEVILLE TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THE TOCQUEVILLE FUND
--------------------------
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, OCTOBER 31,
1998 1997
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ 232,410 $ 182,463
Net realized gain (loss) on investments and for-
eign currency 4,555,614 7,000,921
Net change in unrealized appreciation (deprecia-
tion) (7,924,209) 8,066,500
------------ -----------
Net increase (decrease) in net assets resulting
from operations (3,136,185) 15,249,884
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (184,680) (161,026)
Net realized gains (7,015,177) (2,120,066)
------------ -----------
Total dividends and distributions (7,199,857) (2,281,092)
CAPITAL SHARE TRANSACTIONS
Shares Sold 11,460,273 16,178,975
Shares issued to holders in reinvestment of divi-
dends 6,318,448 1,891,528
Shares issued on Merger 0 0
Shares Redeemed (10,875,514) (8,454,915)
------------ -----------
Net Increase (Decrease) 6,903,207 9,615,588
------------ -----------
Net increase (decrease) in net assets (3,432,835) 22,584,380
NET ASSETS:
Beginning of period 64,998,342 42,413,962
------------ -----------
End of period* 61,565,507 64,998,342
------------ -----------
* Including undistributed net investment income
(loss) of: $ 206,299 $ 158,569
------------ -----------
</TABLE>
- --------
(1) Commencement of Operations
See Notes to the Financial Statements.
26
<PAGE>
THE TOCQUEVILLE TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND INTERNATIONAL VALUE FUND GOVERNMENT FUND GOLD FUND
---------------------------- -------------------------- -------------------------- ----------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR JUNE 29, 1998(1)
ENDED ENDED ENDED ENDED ENDED ENDED THRU
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1998 1997 1998 1997 1998 1997 1998
------------ ------------ ------------ ------------ ------------ ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
$ (255,569) $ (125,970) $ 407,254 $ 69,772 $ 777,498 $ 778,796 $ 1,169
(7,237) 2,372,872 (5,060,334) (300,629) (5,562) 87,972 (25,750)
(3,182,451) 2,716,960 (9,062,388) (14,755,900) 282,830 (63,733) 434,232
----------- ----------- ----------- ----------- ----------- ----------- ----------
(3,445,257) 4,963,862 (13,715,468) (14,986,757) 1,054,766 803,035 409,651
0 0 (666,647) (113,921) (777,498) (778,796) 0
(2,201,644) (1,277,296) 0 (1,177,180) 0 (45,262) 0
----------- ----------- ----------- ----------- ----------- ----------- ----------
(2,201,644) (1,277,296) (666,647) (1,291,101) (777,498) (824,058) 0
6,711,422 5,334,618 25,439,613 35,347,849 2,675,919 6,556,888 7,819,077
2,059,937 1,196,250 638,631 1,280,388 573,364 700,343 0
0 0 0 18,095,391 0 5,723,220 0
(2,101,435) (1,175,595) (4,243,787) (1,415,527) (5,561,374) (5,940,079) 0
----------- ----------- ----------- ----------- ----------- ----------- ----------
6,669,924 5,355,273 21,834,457 53,308,101 (2,312,091) 7,040,372 7,819,077
----------- ----------- ----------- ----------- ----------- ----------- ----------
1,023,023 9,041,839 7,452,342 37,030,243 (2,034,823) 7,019,349 8,228,728
20,586,864 11,545,025 60,962,577 23,932,334 16,807,579 9,788,230 0
----------- ----------- ----------- ----------- ----------- ----------- ----------
21,609,887 20,586,864 68,414,919 60,962,577 14,772,756 16,807,579 8,228,728
----------- ----------- ----------- ----------- ----------- ----------- ----------
$ (255,569) $ 0 $ 0 $ 64,452 $ 0 $ 0 $ 1,169
----------- ----------- ----------- ----------- ----------- ----------- ----------
</TABLE>
See Notes to the Financial Statements.
27
<PAGE>
THE TOCQUEVILLE TRUST
THE TOCQUEVILLE FUND
THE TOCQUEVILLE SMALL CAP VALUE FUND
THE TOCQUEVILLE INTERNATIONAL VALUE FUND
THE TOCQUEVILLE GOVERNMENT FUND
THE TOCQUEVILLE GOLD FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION
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 Small Cap Value Fund, The
Tocqueville International Value Fund, The Tocqueville Government Fund and The
Tocqueville Gold Fund (the "Funds"). The objective of The Tocqueville Fund is
long-term capital appreciation, primarily through investments in securities of
United States issuers. The objective of The Tocqueville Small Cap Value Fund is
long-term capital appreciation primarily through investments in securities of
small capitalization United States issuers. The objective of The Tocqueville
International Value Fund is long-term capital appreciation primarily through
investment in securities of issuers located outside the United States. The ob-
jective of the Tocqueville Government Fund is to provide high current income
consistent with the maintenance of principal and liquidity through investments
in obligations issued or guaranteed by the U.S. Treasury or agencies of the
U.S. Government. The objective of The Tocqueville Gold Fund is to provide long-
term capital appreciation through investments in Gold and Securities or compa-
nies located throughout the world that are engaged in mining or processing
gold, and through investments in other precious metals and securities of compa-
nies located throughout the world that are engaged in mining or processing such
other precious metals. The following is a summary of significant accounting
principles followed by the Trust in the preparation of its financial state-
ments.
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES
A) 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.
- --------------------------------------------------------------------------------
B) 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.
- --------------------------------------------------------------------------------
C) DEFERRED ORGANIZATION EXPENSES
Expenses incurred in connection with the organization of The Tocqueville
Small Cap Value Fund, The Tocqueville International Value Fund, The Tocqueville
Government Fund and The Tocqueville Gold Fund are being amortized on a
straight-line basis over a five-year period from each Fund's commencement of
operations.
28
<PAGE>
- -------------------------------------------------------------------------------
D) 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 International Value Fund and The Tocqueville Gold Fund are engaged
in transactions in securities denominated in foreign currencies and, as a re-
sult, enters into foreign exchange contracts. These Funds are exposed to addi-
tional market risk as a result of changes in the value of the underlying cur-
rency in relation to the U.S. dollar. The value of foreign currency contracts
are "marked to market" on a daily basis, which reflects 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 contracts are closed, the Funds
recognize a realized gain or loss.
The Funds do 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 invest-
ments.
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.
- -------------------------------------------------------------------------------
E) USE OF ESTIMATES
The preparation of financial statements in conformity with generally ac-
cepted accounting principles requires management to make estimates and assump-
tions that effect the reported amounts of assets and liabilities and disclo-
sure of contingent assets and liabilities at the date of the financial state-
ments and the reported amounts of increases and decreases in net assets from
operations during the reporting period. Actual results could differ from those
estimates.
- -------------------------------------------------------------------------------
F) OTHER
Investment and shareowner transactions are recorded no later than the first
business day after the trade date. Dividend income is recognized on the ex-
dividend date or at the time the Fund becomes aware. Interest income is recog-
nized on the accrual basis and market discount is accounted for on a yield to
maturity basis from settlement date. The Trust uses the first-in, first-out
method for determining realized gain or loss on investments sold for both fi-
nancial 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 Trust'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.
29
<PAGE>
- --------------------------------------------------------------------------------
3. INVESTMENT ADVISORY AND OTHER AGREEMENTS
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% on the first $100
million of its 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. Tocqueville receives a fee from The Tocqueville Small Cap Value
Fund, payable monthly, at an annual rate of .75% on the first $100 million of
its 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.
Tocqueville receives a fee from The Tocqueville International Value Fund,
payable monthly, at an annual rate of 1.00% on the first $50 million of its
average daily net assets, .75% of the next $50 million of average daily net
assets, and .65% of average daily net assets in excess of $100 million.
Tocqueville receives a fee from The Tocqueville Government Fund, payable
monthly, at an annual rate of .50% on 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. With
respect to The Tocqueville Government Fund, the Adviser has agreed to waive its
fee or reimburse expenses to the extent necessary to limit total annual
expenses to 1% of the Fund's average daily net assets through November 29,
1999. Tocqueville receives a fee from the Tocqueville Gold Fund, payable
monthly at an annual rate of 1.00% on the first $500 million of the average
daily net assets or the Fund, .75% of average daily net assets in excess of
$500 million but not exceeding $1 billion, and .65% of the average daily net
assets in excess of $1 billion.
Pursuant to an Administrative Services Agreement, each Fund pays to the
Adviser a fee computed and paid monthly at an annual rate of 0.15% of the
average daily net assets of the Fund. For the year ended October 31, 1998, the
Adviser has made payments of $29,179, $17,784, $28,034, $17,784 and $6,884 to
Firstar Mutual Fund Services, LLC for services provided under a Sub-
Administration agreement for The Tocqueville Fund, The Tocqueville Small Cap
Value Fund, The Tocqueville International Value Fund, The Tocqueville
Government Fund and The Tocqueville Gold Fund, respectively.
FOR THE PERIOD ENDED OCTOBER 31, 1998, THE ADVISER WAIVED THE FOLLOWING FEES:
<TABLE>
<CAPTION>
GOVERNMENT GOLD
FUND FUND
---------- -------
<S> <C> <C>
Advisory Fees waived $72,372 $18,773
Administration Fees waived $ 0 $ 2,816
Reimbursement by Advisor $ 0 $20,722
</TABLE>
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 year ended October 31,
1998, the Distributor received net commissions of $19,471 from the sale of the
Trust's shares.
30
<PAGE>
- --------------------------------------------------------------------------------
The Fund has adopted distribution plans related to the sale of shares
pursuant to which the Fund may incur distribution expenses in amounts not to
exceed 0.25% per annum of the average daily net assets. 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 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. The distributor has informed
the trust that, as of October 31, 1998, there were $194,956, $85,011, $62,006,
$42,752 and $11,644 in unreimbursed expenses for The Tocqueville Fund, The
Tocqueville Small Cap Value Fund, The Tocqueville International Value Fund, The
Tocqueville Government Fund and The Tocqueville Gold Fund, respectively.
Commissions earned by the Distributor for services rendered as a registered
broker-dealer in securities transactions for The Tocqueville Fund, The
Tocqueville Small Cap Value Fund, The Tocqueville International Value Fund, The
Tocqueville Government Fund and The Tocqueville Gold Fund for the year ended
October 31, 1998, were $30,907, $108,144, $37,427, $21,238 and $180,
respectively.
31
<PAGE>
- --------------------------------------------------------------------------------
4. FUND SHARE TRANSACTIONS
The Fund currently offers only one class of shares of beneficial interest.
<TABLE>
<CAPTION>
TOCQUEVILLE
FUND
---------------------
AMOUNT SHARES
----------- --------
<S> <C> <C>
YEAR ENDED OCTOBER 31, 1998
Shares sold $11,460,273 628,666
Shares issued to owners in reinvestment of dividends 6,318,448 362,508
Shares redeemed (10,875,514) (587,124)
----------- --------
Net Increase/(Decrease) $ 6,903,207 404,050
----------- --------
YEAR ENDED OCTOBER 31, 1997
Shares sold $16,178,975 876,867
Shares issued to owners in reinvestment of dividends 1,891,528 121,330
Shares issued on Merger 0 0
Shares redeemed (8,454,915) (457,883)
----------- --------
Net Increase $ 9,615,588 540,314
----------- --------
</TABLE>
- --------
* For the period June 29, 1998 through October 31, 1998
On November 29, 1996, The Tocqueville Government Fund acquired all of the net
assets of Ivy Short Term Bond Fund pursuant to a plan of reorganization
approved by Ivy Short Term Bond shareholders on November 15, 1996. The
acquisition was accomplished by a tax free exchange of shares of The
Tocqueville Government Fund for the net assets of Ivy Short Term Bond Fund
which aggregated $5,723,220 including unrealized appreciation of $28,973. The
combined net assets of The Tocqueville Government Fund immediately after the
merger were $15,699,438.
32
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP
VALUE INTERNATIONAL VALUE GOVERNMENT
FUND FUND FUND GOLD FUND*
- --------------------- ---------------------- ---------------------- -------------------
AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
- ---------- -------- ----------- --------- ----------- --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$6,711,422 456,425 $25,439,613 2,880,164 $ 2,675,919 263,551 $7,819,077 764,645
2,059,937 144,685 638,631 73,406 573,364 56,439 0 0
(2,101,435) (148,051) (4,243,787) (506,725) (5,561,374) (545,808) 0 0
- ---------- -------- ----------- --------- ----------- --------- ---------- --------
$6,669,924 453,059 $21,834,457 2,446,845 ($2,312,091) ($225,818) $7,819,077 $764,645
- ---------- -------- ----------- --------- ----------- --------- ---------- --------
$5,334,618 383,306 $35,347,849 2,753,233 $ 6,556,888 651,940 $ 0 0
1,196,250 94,790 1,280,388 107,056 700,343 69,492 0 0
0 0 18,095,391 1,333,485 5,723,220 563,864 0 0
(1,175,595) (78,096) (1,415,527) (113,492) (5,940,079) (589,453) 0 0
- ---------- -------- ----------- --------- ----------- --------- ---------- --------
$5,355,273 400,000 $53,308,101 4,080,282 $ 7,040,372 695,843 $ 0 0
- ---------- -------- ----------- --------- ----------- --------- ---------- --------
</TABLE>
* For the period June 29, 1998 through October 31, 1998
On May 1, 1997, pursuant to a Plan of Reorganization and Liquidation approved
by shareholders on April 29, 1997, the assets of The Tocqueville Asia-Pacific
Fund were transferred to The Tocqueville International Value Fund. The
reorganization was accomplished by a tax free exchange of shares of The
Tocqueville International Value Fund for the net assets of The Tocqueville
Asia-Pacific Fund which aggregated $18,095,391 including $1,674,266 of
unrealized depreciation. The combined net assets of The Tocqueville
International Value Fund immediately after the merger were $54,615,666.
33
<PAGE>
- --------------------------------------------------------------------------------
5. INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term instru-
ments) for the year ended October 31, 1998 were as follows:
<TABLE>
<CAPTION>
THE SMALL CAP INTERNATIONAL
TOCQUEVILLE VALUE VALUE GOVERNMENT GOLD
FUND FUND FUND FUND FUND
----------- ----------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
PURCHASES
U.S. Government $ 0 $ 0 $ 0 $12,745,535 $ 0
Other 27,666,572 18,872,884 76,106,191 0 7,244,888
----------- ----------- ------------ ----------- ----------
Total $27,666,572 $18,872,884 $ 76,106,191 $12,745,535 $7,244,888
----------- ----------- ------------ ----------- ----------
SALES
U.S. Government $ 0 $ 200,000 $ 0 $11,753,105 $ 0
Other 19,848,298 12,996,794 45,704,878 0 50,366
----------- ----------- ------------ ----------- ----------
Total $19,848,298 $13,196,794 $ 45,704,878 $11,753,105 $ 50,366
----------- ----------- ------------ ----------- ----------
Unrealized appreciation (depreciation) at October 31, 1998 based on cost of
securities for Federal tax purposes is as follows:
<CAPTION>
THE SMALL CAP INTERNATIONAL
TOCQUEVILLE VALUE VALUE GOVERNMENT GOLD
FUND FUND FUND FUND FUND
----------- ----------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Gross unrealized appre-
ciation $15,056,671 $ 3,505,669 $ 7,712,006 $ 341,824 $ 765,012
Gross unrealized depre-
ciation (3,685,548) (2,506,292) (30,148,436) (32,994) (352,620)
----------- ----------- ------------ ----------- ----------
Net unrealized
appreciation
(depreciation) $11,371,123 $ 999,377 $(22,436,430) $ 308,830 $ 412,392
----------- ----------- ------------ ----------- ----------
Cost of investments $50,674,195 $20,924,404 $ 88,779,240 $13,945,032 $7,926,929
----------- ----------- ------------ ----------- ----------
</TABLE>
At October 31, 1998, The Tocqueville Government Fund had tax basis capital
losses of $664,000 of which $658,000 arose from the merger with Ivy Short Term
Bond Fund described in Note 4. The latter losses may be carried over to offset
future capital gains through 2003. The balance of $6,000 expires in 2006.
At October 31, 1998, The Tocqueville International Value Fund had tax basis
capital losses of $5,166,000 which may be carried over to offset future capital
gains. Of this amount $213,000 arose from the merger with Tocqueville Asia Pa-
cific Fund described in Note 4. Such losses may be carried over to offset fu-
ture capital gains through 2006.
At October 31, 1998, The Tocqueville Small Cap Value Fund and The Tocqueville
Gold Fund had tax basis capital losses of $7,200 and $4,500, respectively,
which may be carried over to offset future capital gains through October 31,
2006. Net realized capital losses differ for financial statement and tax pur-
poses primarily due to differing treatments of wash sales.
34
<PAGE>
THE TOCQUEVILLE TRUST
- --------------------------------------------------------------------------------
INDEPENDENT AUDITOR'S REPORT
To the Board of Trustees and Shareholders
The Tocqueville Trust
We have audited the accompanying statements of assets and liabilities, includ-
ing the investment portfolios, of The Tocqueville Trust, including The
Tocqueville Fund, The Tocqueville Small Cap Value Fund, The Tocqueville Inter-
national Value Fund, The Tocqueville Government Fund and The Tocqueville Gold
Fund as of October 31, 1998, and the related statements of operations, the
statements of changes in net assets, and the financial highlights for the peri-
ods indicated in the accompanying financial statements. These financial state-
ments and financial highlights are the responsibility of the Trust's manage-
ment. Our responsibility is to express an opinion on these financial statements
and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial high-
lights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of Oc-
tober 31, 1998, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement pre-
sentation. We believe that our audits provide a reasonable basis for our opin-
ion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Tocqueville Fund, The Tocqueville Small Cap Value Fund, The Tocqueville
International Value Fund, The Tocqueville Government Fund and The Tocqueville
Gold Fund series of The Tocqueville Trust as of October 31, 1998, the results
of their operations, the changes in their net assets, and their financial
highlights, for the periods indicated, in conformity with generally accepted
accounting principles.
New York, New York
December 4, 1998
35
<PAGE>
INVESTMENT ADVISER
Tocqueville Asset Management L.P.
1675 Broadway
New York, NY 10019
(212) 698-0800
www.tocqueville.com
DISTRIBUTOR
Tocqueville Securities L.P.
1675 Broadway
New York, NY 10019
(212) 698-0800
SHAREHOLDERS' SERVICING,
CUSTODIAN AND TRANSFER AGENT
Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, WI 53201-0701
(800) 697-3863
BOARD OF TRUSTEES
Francois Sicart - Chairman
Lucille G. Bono
Bernard F. Combemale
James B. Flaherty
Inge Heckel
Robert W. Kleinschmidt
Francois Letaconnoux
Larry M. Senderhauf
