<PAGE>
ANNUAL REPORT
October 31, 1997
THE TOCQUEVILLE TRUST
MUTUAL FUNDS
The Tocqueville Fund
The Tocqueville Small Cap Value Fund
The Tocqueville International Value Fund
The Tocqueville Government Fund
[LOGO] Tocqueville
<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.
1
<PAGE>
The Tocqueville Fund
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DEAR FELLOW SHAREHOLDER:
The recently ended fiscal year was a remarkable one for The Tocqueville
Fund. Our total return of 34.5% for the fiscal year ended October 31, 1997,
coming on top of two very strong years of returns means that a shareholder's
asset value has nearly doubled over the three-year period. Our performance was
led by very strong results from Varco International, an oil service equipment
company, IBM, Bristol Myers Squibb, BankAmerica Corp., AT&T Corp., Catellus
Development Corp., a real estate development company, Measurex Corp. (which was
taken over during the year), Burlington Industries, Kmart Corp. and Financial
Security Assurance Holdings Ltd, a municipal bond insurer. Just as importantly,
we held very few stocks during the year which negatively impacted performance.
Indeed, no one stock position had more than a .75% negative impact on the
Fund's total return.
Over the same period, the domestic equity markets have been highly favora-
ble, The Standard and Poor's Stock Index registered a return of 32.1% over the
fiscal year. This extraordinary period in stock market history, as enjoyable as
it has been, also raises for us a not-so-subtle warning flag.
Much has been written about the ongoing difficulties in Asia. While we
believe equity valuations and probably, currencies, have overreacted, there is
little doubt that economic activity in that region will contract next year.
Almost certainly these countries will emphasize exports to reignite growth.
Although trade with many of these countries does not constitute a significant
portion of U.S. economic activity, the impact this is likely to have on many
companies will be greater than the mere numbers would imply. Pricing, margins
and corporate profitability will be affected.
While it is true that an imminent recession in the U.S. does not seem to be
at hand, it is also true that the outlook for corporate profits in the year
ahead is not robust. We expect, in fact, to see continued downward revisions of
earnings estimates as the year unfolds. Given the already rich valuation for
market averages, this earnings outlook is not a recipe for further strong gains
in the market. Consequently, while we are always cautious, we currently find
ourselves even more diligent than usual in our approach to equities.
Notwithstanding our view of the overall market, we will continue to focus on
neglected or out-of-favor stocks selling at significant discounts to their
longer-term intrinsic value. We expect to find opportunities in these sectors
in the future as we have in the past, regardless of market conditions. But we
will not hesitate to sell stocks that no longer meet our value discipline. As
always, with the bulk of our own personal assets invested in the Fund, our
first priority remains preservation of capital.
Robert W. Kleinschmidt
Francois Sicart
Portfolio Managers
2
<PAGE>
TOCQUEVILLE FUND
Tocqueville Fund
Tocqueville Fund (assuming a 4% front-end
(at Net Asset Value) load at Inception) S&P 500
-------------------- ------------------------ -------
10/31/87 10,000 9,600 10,000
10/31/88 12,109 11,625 11,480
10/31/89 14,136 13,571 14,511
10/31/90 13,661 13,115 13,425
10/31/91 16,079 15,436 17,923
10/31/92 18,480 17,741 19,708
10/31/93 22,858 21,943 22,652
10/31/94 24,618 23,633 23,529
10/31/95 28,559 27,416 29,750
10/31/96 35,036 33,635 36,920
10/31/97 47,109 45,225 48,775
This chart assumes an initial investment of $10,000 made on 10/31/87. 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, 1997
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<TABLE>
<CAPTION>
10
1 YEAR 3 YEAR 5 YEAR YEAR
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
Tocqueville Fund--Net Asset Value 34.46% 24.15% 20.58% 16.76%
Tocqueville Fund--Load 29.08% 22.48% 19.61% 16.29%
Standard & Poor's 500 Stock Index 32.11% 27.51% 19.87% 17.17%
</TABLE>
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3
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The Tocqueville Small Cap Value Fund
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DEAR FELLOW SHAREHOLDER:
I am pleased to report that the Tocqueville Small Cap Value Fund maintained
its excellent performance. For the twelve month period ended October 31, 1997,
your portfolio of value-stocks posted a 36.02% increase in Net Asset Value to
$16.30 per share. Since its creation on August 1, 1994, your Fund has appreci-
ated 98.39%. These performance numbers compare quite favorably with returns of
29.33% and 86.98% for the Russell 2000 Index over the same periods. The Russell
2000 Index is the most widely accepted benchmark for small cap stocks. While my
investment strategy is not to outperform any indices, I will certainly try my
best to maintain that performance in the future.
DIVIDEND DECLARED
Shareholders of the Fund on the Record Date of December 11, 1997 received
capital gains distributions of $1.73 per share, payable December 12, 1997.
CAUTIOUS OPTIMISM MAINTAINED
Your Fund has performed extremely well over the past three years. These
strong results certainly validate our strategy of buying good quality stocks
when they are down. Looking forward, the long-term economic outlook for the
stocks which we own looks either promising now, or likely to improve within a
year or so in the case of our most severely depressed holdings. As a result, I
remain cautiously optimistic, keeping in mind, however, that this could change.
Common stocks represented 91.5% of assets held on October 31, 1997. US Treasury
Bonds, Convertible Bonds and cash equivalents accounted for the balance.
Looking at the portfolio in broadly defined strategic terms, I increased my
investments in "sunrise industries" and "service industries" at very attractive
(i.e. very depressed) prices. Broadly defined sunrise industries now account
for 66% of the portfolio. Looking at the portfolio another way, 52% is invested
in service industries. Conceptually, this should give our portfolio a much
higher future growth profile than we had in the past. For example, our three
largest holdings are providers of computer technology services to corporate and
education markets. Our 17.9% investment in communications is positioning us to
eventually benefit from a renewed wave of capital spending in computer teleph-
ony integration products, as well as from renewed spending for the delivery of
advanced cable TV and electronic products directly to the home. What follows is
a listing of our ten largest positions, which represent 47% of assets.
4
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TEN LARGEST POSITIONS
<TABLE>
<CAPTION>
Unisys Corporation (7.1%) Computer software support services
<S> <C>
Systems & Computer Technology
(5.2%) Computer software support services
National Computer Systems (5.1%) Computer software and database services
O'Sullivan Industries Hldgs.
(4.7%) Producer of Ready-To-Assemble furniture
Sensormatic Electronics (4.4%) World leader in store security systems
PSC, Inc. (4.2%) Producer of bar-code, data capture systems
Franklin Electronics Publishing
(4.1%) Handheld electronic reference books
Owens & Minor Corp. (4.1%) Wholesale of medical/surgical supplies
Wave Technologies (3.8%) Technical schools for computer technology
Antec Corp. (3.8%) Distributes/manufactures CATV products
</TABLE>
For the benefit of our new shareholders, I will review the basic tenets of
my investment strategy.
LONG TERM ORIENTATION
I believe that successful investing requires considerable attention to "how
much you pay for what you buy," considerable patience coupled with the will-
ingness to accept some temporary discomfort, and lastly, true long-term com-
mitment. 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. As a matter of fact, most of my big winners usually had a
mediocre performance during the first year I owned them. Consequently, most of
my analytical attention centers on long-term strategic "vision" issues.
In addition, I believe that successful long-term investments are those made
in "good busi-nesses." Consequently, most of my bottom-up analytical work cen-
ters on selecting "good businesses" from an entrepreneurial perspective.
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 a time-
tested three step process:
STEP #1: RESTRICT ALL PURCHASES OF NEW STOCKS TO THOSE THAT ARE ALREADY
DOWN SUBSTANTIALLY IN PRICE. I very rarely violate this value precept when
making new purchases. For instance, based on cost, the 38 stocks which we
owned on October 31, 1997 were down on average of 35% and 44% from their re-
spective 12 months' and 60 months' highs. Consequently, many of these stocks
were receiving scant coverage from Wall Street when we acquired them, and
quite a few were actually receiving negative press.
5
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STEP #2: SYSTEMATICALLY SCREEN THESE "DOWN AND OUT" STOCKS FOR FINANCIAL
STRENGTH. I believe that strained finances are a clear indication of poor
business fundamentals. I shun poor businesses, no matter how inexpensive they
are. 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-capitalization
ratio of all stocks in the Fund's portfolio is a very conservative 21%, with
an equally strong average quick ratio (cash and receivables/current liabili-
ties) of 2.2 times.
STEP #3: "INVEST TO WIN." While this is by far the most difficult task, its
logic is quite compelling. Starting with a selection of stocks that have de-
clined substantially in price and retained their financial strength, I single
out the so-called "good businesses" that I want to buy and hold for the long
term. Good businesses should have very distinctive features, which I rank in
the following order of importance.
SELECTING 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 required for success over the long term. In-
tegrity directly sets the tone for the organization's strategies, and it indi-
rectly sets the intensity of management's commitment to the business. Integ-
rity defuses most adversarial labor-management conflicts, and thus improves
productivity. Integrity also fosters accountability. Reputation allows organi-
zations to hire and retain the best people available, and to stay ahead of
their competition. I view social responsibility as the necessary foundation of
all worthy investment activities.
. GROWTH POTENTIAL. A good investment should offer its owner solid pros-
pects of long-term growth, profitability and financial security. These invest-
ments are usually found in emerging or service
industries. Approximately 66% of Fund assets are invested in these sectors
which include 5 of our ten largest positions: Unisys Corp., Owens & Minor, Na-
tional Computer Systems, Systems & Computer Technology, and Wave Technologies.
. NEW PRODUCTS. Good businesses are usually built around very successful
new products. At the moment, fourteen of our 38 companies have new products
under development that, if successful over the long term, could very signifi-
cantly improve their earnings potential.
. PROPRIETARY STRENGTH. Good businesses often fashion proprietary skills
into strong competitive tools. For example, nearly all of the electronic dic-
tionaries and electronic reference books manufactured by Franklin Electronics
are protected by patents, proprietary know-how, and marketing agreements.
6
<PAGE>
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. MARKET SHARE POSITION. Good businesses often hold high market share posi-
tions in their industries. Current portfolio examples include Sensormatic Elec-
tronics, the world's largest provider of store security systems; O'Sullivan In-
dustries, the largest US producer of ready-to-assemble furniture.
. HIGH INSIDER OWNERSHIP. I am comfortable with high levels of insider own-
ership, as long as I see little insider selling. My theory 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 18% of our stocks,
and ten of our 38 stocks had insider ownership levels of more than 30%.
. REPEAT SALES OF CONSUMABLE PRODUCTS. Good businesses generally have a
close day-to-day working relationship with their customers, and often sell
products or services which are consumed rapidly. Over the years, good busi-
nesses build an installed base of satisfied "pre-sold" customers by simply pro-
viding value-added services. Such businesses eventually benefit from a fairly
steady flow of repeat sales, as well as growing maintenance, repair and over-
haul (MRO) revenues. Twelve of our 38 stocks have a relatively high mix of re-
peat sales, including Owens & Minor among our top ten holdings.
In closing, let me say that I welcome questions, comments or observations
which you may have. I am also very grateful that you chose the Tocqueville
Small Cap Value Fund to realize your long-term investment objectives.
Jean-Pierre Conreur
Portfolio Manager
7
<PAGE>
THE TOCQUEVILLE SMALL CAP VALUE FUND
Tocqueville Tocqueville Small Cap Value
Small Cap Value Fund Fund (assuming a 4% Russell 2000
(at Net Asset Value) front-end load at Inception) Index
-------------------- ---------------------------- -------------
8/1/94 10,000 9,600 10,000
10/31/94 10,220 9,811 10,479
10/31/95 12,184 11,697 12,400
10/31/96 14,586 14,002 14,458
10/31/97 19,840 19,046 18,699
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, 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR 3 YEAR 8/1/94
- -----------------------------------------------------
<S> <C> <C> <C>
Tocqueville Small Cap
Value Fund--Net Asset
Value 36.02% 24.75% 23.43%
Tocqueville Small Cap
Value Fund--Load 30.55% 23.04% 21.88%
Russell 2000 Index 29.33% 21.29% 21.22%
- -----------------------------------------------------
</TABLE>
8
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[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
The Tocqueville International Value Fund
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DEAR FELLOW SHAREHOLDER:
The recent fiscal year was an eventful one. After reporting to you, in our
May 1997 semi-annual letter, that both the European and the Asian portions of
our portfolio had performed well, the Asian currency and financial crisis got
underway in earnest.
As contrarian, value investors, there are times when we must make the deci-
sion to switch money from our winners--because they have become popular among
investors and offer less attractive value--to go bottom-fishing in other areas
of investment. During the summer, we made the decision to progressively take
profits in Europe, and to increase our exposure to Asia, where a few markets--
and within those markets specific securities--had already suffered significant
declines.
In retrospect, it is clear that this decision was early and that we underes-
timated the power of international capital flows to transform a market correc-
tion into a financial spiral. In particular, while we had anticipated currency
depreciations in the order of 15% or so, many have since declined by 40% or
more. The currency turmoil, combined with stock sell-offs typical of the late
stages of a bear market, produced some significant losses in the Asian portion
of our portfolio, even on shares that we only started accumulating at prices
more than 50% below their previous highs. As a result, the net asset value of a
share of our Fund ended the fiscal year with a loss of 14.32%, against a gain
of 4.63% for the Morgan Stanley EAFE index.
In recent months, we have reviewed all our positions in light of develop-
ments in the Asian region, and also took a trip to Asia to visit many of the
companies in which we had invested.
Our approach seldom allows for precise timing of investments: we accumulate
investments on the way down, and sell them on the way up, after they have
reached our objectives--as we did in Europe. The main difference with Asia is
that the volatility on the way down has been extraordinary. Still, I came back
from our trip convinced that the region's economies, with their proven ability
to adapt to sudden and drastic change, will recover and prosper over time. I
was also comforted in the belief that the individual companies in our portfo-
lio, with good leaders and an equally-well demonstrated ability to cope with
change, have reached panic-valuation levels that are compelling for a value in-
vestor.
In summary, we have confirmed that our current strategy, though imperfect in
timing, is consistent with our proven contrarian, value discipline. An intensi-
fied due-diligence effort on individual companies in our portfolio has con-
vinced us of their underlying values. As a result, we intend to steadily in-
crease the portfolio's exposure to attractive Asian investments, so as to reap
the full benefit of an eventual rebound in the region's markets which, when it
happens, could be just as spectacular as the recent meltdown.
Francois Sicart
Portfolio Manager
10
<PAGE>
THE TOCQUEVILLE INTERNATIONAL VALUE FUND
<TABLE>
<CAPTION>
Tocqueville Int'l
Tocqueville Value Fund
Int'l Value Fund (assuming a 4% front-end Morgan Stanley Morgan Stanley
(at Net Asset Value) load at Inception) Europe 14 Index EAFE Index
-------------------- ------------------------ --------------- --------------
<S> <C> <C> <C> <C>
8/1/94 10,000 9,600 10,000 10,000
10/31/94 10,020 9,619 10,340 10,244
10/31/95 10,830 10,393 11,706 10,206
10/31/96 12,570 12,067 13,751 11,275
10/31/97 10,770 10,339 17,323 11,797
</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, 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR 3 YEAR 8/1/94
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Tocqueville International Value Fund--Net
Asset Value (14.32)% 2.43% 2.30%
Tocqueville International Value Fund--Load (17.73)% 1.04% 1.02%
Morgan Stanley Europe 14 Index 25.98% 18.77% 18.34%
Morgan Stanley EAFE Index 4.63% 4.82% 5.20%
- ----------------------------------------------------------------------------
</TABLE>
11
<PAGE>
The Tocqueville Government Fund
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DEAR FELLOW SHAREHOLDER:
For the fiscal year ended October 31, 1997, The Tocqueville Government Fund
generated a total return of 5.42%. This compares with 7.32% for the Lehman
Brothers Intermediate Government Index for the same period.
The Fund's investment philosophy is to focus primarily on preservation of
capital and secondarily on generating competitive current income. The alterna-
tive to the fund, in our view, is government money market funds. Our objective
is to generate returns better than those available in government money market
funds while minimizing downside volatility. We believe that we accomplished
those goals in fiscal 1997.
The severe volatility in the equity markets in recent months is in stark
contrast to a steadily rising bond market. A flight to quality has benefitted
bonds on the long end. Meanwhile, the yield curve remains quite flat, providing
little incentive to lengthen maturities at this point in time.
The outlook for the foreseeable future is historically low and declining in-
terest rates as government budgets attain or remain in surplus. A weaker world-
wide economy should also contribute to this trend. As a result, returns avail-
able in intermediate government securities are likely to be modest. The poten-
tial for modest capital gains exist, but we do not see a major opportunity.
There are very few intermediate-term government securities selling at a big
discount to par value in this interest rate environment. While bonds can move
to a premium to par, their upside potential is limited.
Risks, due to a possible sharp correction in the bond market, do not appear
great at this time, but we will remain vigilant. At year-end, our average matu-
rity was only 1.9 years, so our exposure to an unlikely backing up of interest
rates is slight.
Robert W. Kleinschmidt
Portfolio Manager
12
<PAGE>
THE TOCQUEVILLE GOVERNMENT FUND
<TABLE>
<CAPTION>
Tocqueville Government Fund
Tocqueville Government Fund (assuming a 4% front-end Lehman Brothers Intermediate
(at Net Asset Value) load at Inception) Government Index
--------------------------- --------------------------- ----------------------------
<S> <C> <C> <C>
Lehman Brothers
9/4/95 10,000 9,600 10,000
10/31/95 10,096 9,682 10,177
10/31/96 10,689 10,261 10,754
10/31/97 11,268 10,817 11,541
</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, 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 SINCE INCEPTION
YEAR 9/4/95
- --------------------------------------------------------------------
<S> <C> <C>
Tocqueville Government Fund--Net Asset Value 5.42% 5.68%
Tocqueville Government Fund--Load 1.22% 3.68%
Lehman Brothers Intermediate Government Index 7.32% 6.84%
- --------------------------------------------------------------------
</TABLE>
13
<PAGE>
THE TOCQUEVILLE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A CLASS B
------- -------
YEAR ENDED OCTOBER 31, PERIOD FROM PERIOD FROM
---------------------- NOVEMBER 1, AUGUST 14,
PER SHARE OPERATING 1995 TO 1995 TO
PERFORMANCE AUGUST 16, OCTOBER 31,
(FOR A SHARE OUTSTANDING 1997 1996 1995 1994 1993 1996 (G) 1995
THROUGHOUT THE PERIOD) ---- ---- ---- ---- ---- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period $ 15.85 $ 14.07 $ 13.74 $ 13.67 $ 11.83 $14.01 $14.68
------- ------- ------- ------- ------- ------ ------
Income from investment
operations:
Net investment income 0.06 0.07 0.15 0.12 0.11 0.12 --
Net realized and
unrealized gain (loss) 5.15 2.92 1.70 0.88 2.55 2.15 (0.67)
------- ------- ------- ------- ------- ------ ------
Total from investment
operations 5.21 2.99 1.85 1.00 2.66 2.27 (0.67)
------- ------- ------- ------- ------- ------ ------
Less distributions
Dividends from net in-
vestment income (.06) (0.15) (0.11) (0.14) (0.16) (0.15) --
Distributions from net
realized gains (.79) (1.06) (1.41) (0.79) (0.66) (1.06) --
------- ------- ------- ------- ------- ------ ------
Total distributions (.85) (1.21) (1.52) (0.93) (0.82) (1.21) --
------- ------- ------- ------- ------- ------ ------
Change in net asset
value for the period 4.36 1.78 0.33 0.07 1.84 1.06 (0.67)
------- ------- ------- ------- ------- ------ ------
Net asset value, end of
period $ 20.21 $ 15.85 $ 14.07 $ 13.74 $ 13.67 $15.07 $14.01
------- ------- ------- ------- ------- ------ ------
Total Return (b)(c) 34.5% 22.7% 16.0% 7.7% 23.7% 17.2 % (4.6)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of pe-
riod (000 for Class A) $64,998 $42,414 $33,438 $29,140 $27,745 $ 0 $ 191
Ratio to average net as-
sets:
Expenses (a)(d) 1.40% 1.49% 1.54% 1.54% 1.56% 1.98 %(f) --
Net investment income
(loss) (a)(d) .34% .44% 1.07% 0.87% 0.96% (0.21)%(f) --
Portfolio turnover rate 48% 48% 47% 52% 54% 48 % --
Average commission rate
paid (e) $ .0599 $ .0596 $.0596
</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, for Class A Shares.
(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 0.16% of average net assets for the period
ended October 31, 1996 for Class B Shares.
(e) Average per share amounts of brokerage commissions on portfolio transac-
tions. Required by regulations issued in 1995.
(f) Annualized.
(g) On August 16, 1996, all Class B Shares were converted into Class A Shares.
14
<PAGE>
THE TOCQUEVILLE SMALL CAP VALUE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A CLASS B
--------------------------------------------- -----------------------------------
YEAR ENDED
OCTOBER 31,
----------- PERIOD FROM PERIOD FROM PERIOD FROM
PER SHARE OPERATING AUGUST 1, 1994 NOVEMBER 1, 1995 AUGUST 14, 1995
PERFORMANCE TO TO TO
(FOR A SHARE OUTSTANDING 1997 1996 1995 OCTOBER 31, 1994 AUGUST 16, 1996(G) OCTOBER 31, 1995
THROUGHOUT THE PERIOD) ---- ---- ---- ---------------- ------------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 13.37 $ 11.91 $10.22 $10.00 $11.87 $12.35
------- ------- ------ ------ ------ ------
Income from investment
operations:
Net investment income
(loss) (0.05) (0.10) (0.05) 0.02 (0.07) --
Net realized and
unrealized gain (loss) 4.44 2.33 1.96 0.20 1.18 (0.48)
------- ------- ------ ------ ------ ------
Total from investment
operations 4.39 2.23 1.91 0.22 1.11 (0.48)
------- ------- ------ ------ ------ ------
Less distributions
Dividends from net
investment income -- -- (0.03) -- -- --
Distributions from net
realized gains (1.46) (0.77) (0.19) -- (0.77) --
------- ------- ------ ------ ------ ------
Total distributions (1.46) (0.77) (0.22) -- (0.77) --
------- ------- ------ ------ ------ ------
Change in net asset
value for the period 2.93 1.46 1.69 0.22 0.34 (0.48)
------- ------- ------ ------ ------ ------
Net asset value, end of
period $ 16.30 $ 13.37 $11.91 $10.22 $12.21 $11.87
------- ------- ------ ------ ------ ------
Total Return (b)(c) 36.0% 19.7 % 19.2 % 2.2% 9.7 % (3.9)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000 for Class
A) $20,587 $11,545 $9,383 $6,755 $ 0 $ 192
Ratio to average net
assets:
Expenses (a)(d) 1.75 % 2.36 % 2.50 % 2.08%(f) 2.92 %(f) --
Net investment income
(loss) (a)(d) (.81)% (1.18)% (0.53)% 0.85%(f) (1.79)%(f) --
Portfolio turnover rate 95% 107 % 88 % 9% 107 %
Average commission rate
paid(e) $ .0600 $ .0599 $.0599
</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, for Class A Shares.
(b) Does not include maximum sales charge of 4% for Class A Shares. For the pe-
riod ended October 31, 1994, not annualized.
(c) Does not include contingent deferred sales charge for Class B Shares. Not
annualized.
(d) Net of fees waived amounting to 0.37% of average net assets for the period
ended October 31, 1996 for Class B Shares.
(e) Average per share amounts of brokerage commissions on portfolio transac-
tions. Required by regulations issued in 1995.
(f) Annualized.
(g) On August 16, 1996, all Class B Shares were converted into Class A Shares.
15
<PAGE>
THE TOCQUEVILLE INTERNATIONAL VALUE FUND
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A CLASS B
-------------------------------------------- -----------------------------------
YEAR ENDED
OCTOBER 31,
-----------
PER SHARE OPERATING PERIOD FROM PERIOD FROM PERIOD FROM
PERFORMANCE AUGUST 1, 1994 NOVEMBER 1, 1995 AUGUST 14, 1995
(FOR A SHARE TO TO TO
OUTSTANDING THROUGHOUT 1997 1996 1995 OCTOBER 31, 1994 AUGUST 16, 1996(G) OCTOBER 31, 1995
THE PERIOD) ---- ---- ---- ---------------- ------------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 12.57 $ 10.83 $10.02 $10.00 $10.81 $10.93
------- ------- ------ ------ ------ ------
Income from investment
operations:
Net investment income
(loss) (.03) 0.16 (0.01) (0.04) 0.18 --
Net realized and
unrealized gain (loss) (1.67) 1.58 0.82 0.06 0.93 (0.12)
------- ------- ------ ------ ------ ------
Total from investment
operations (1.70) 1.74 0.81 0.02 1.11 (0.12)
------- ------- ------ ------ ------ ------
Less distributions
Dividends from net
investment income (.06) -- -- -- -- --
Distributions from net
realized gains (.62) -- -- -- -- --
------- ------- ------ ------ ------ ------
Total distributions (.68) -- -- -- -- --
------- ------- ------ ------ ------ ------
Change in net asset
value for the period (2.38) 1.74 0.81 0.02 1.11 (0.12)
------- ------- ------ ------ ------ ------
Net asset value, end of
period $ 10.19 $ 12.57 $10.83 $10.02 $11.92 $10.81
------- ------- ------ ------ ------ ------
Total Return (b)(c) (14.3)% 16.1% 8.1 % 0.2 % 10.3% (1.1)%
RATIOS TO SUPPLEMENTAL
DATA
Net assets, end of
period (000 for Class
A) $60,963 $23,932 $6,270 $2,516 $ 0 $ 198
Ratio to average net
assets:
Expenses (a)(d) 1.99% 1.98% 4.43 % 6.18 %(f) 1.26%(f) --
Net investment income
(loss) (a)(d) .16% 1.45% (0.53)% (2.47)%(f) 1.89%(f) --
Portfolio turnover rate 70% 135% 109 % 0 % 135% --
Average Commission rate
paid (e) $ .0052 $ .0040 $.0040
</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, for Class A Shares.
(b) Does not include maximum sales charge of 4% for Class A Shares. For the
period ended October 31, 1994, not annualized.
(c) Does not include contingent deferred sales charge for Class B Shares. Not
annualized.
(d) Net of fees waived amounting to 0.63% of average net assets for the period
ended October 31, 1996 for Class B Shares.
(e) Average per share amounts of brokerage commissions on portfolio transac-
tions. Required by regulations issued in 1995.
(f) Annualized.
(g) On August 16, 1996, all Class B Shares were converted into Class A Shares.
Effective February 28, 1997, The Tocqueville Europe Fund changed its name to
The Tocqueville International Value Fund.
16
<PAGE>
THE TOCQUEVILLE GOVERNMENT FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A CLASS B
------------------------------------- ------------------------------------
YEAR ENDED PERIOD FROM PERIOD FROM PERIOD FROM
PER SHARE OPERATING OCTOBER 31, SEPTEMBER 4, 1995 NOVEMBER 1, 1995 SEPTEMBER 4, 1995
PERFORMANCE ----------- TO TO TO
(FOR A SHARE OUTSTANDING 1997 1996 OCTOBER 31, 1995 AUGUST 16, 1996(F) OCTOBER 31, 1995
THROUGHOUT THE PERIOD) ------- ------ ----------------- ------------------ -----------------
<S> <C> <C> <C> <C> <C>
Net asset value, begin-
ning of period $ 10.13 $10.05 $10.00 $10.05 $ 9.97
------- ------ ------ ------ ------
Income from investment
operations:
Net investment income 0.52 0.49 0.05 0.32 0.04
Net realized and
unrealized gain (loss) 0.01 0.08 0.05 (0.05) 0.08
------- ------ ------ ------ ------
Total from investment
operations 0.53 0.57 0.10 0.27 0.12
------- ------ ------ ------ ------
Less distributions
Dividends from net in-
vestment income (0.52) (0.49) (0.05) (0.32) (0.04)
Distributions from net
realized gains (0.03) -- -- -- --
------- ------ ------ ------ ------
Total distributions (0.55) (0.49) (0.05) (0.32) (0.04)
------- ------ ------ ------ ------
Change in net asset
value for the period (0.02) 0.08 0.05 (0.05) 0.08
------- ------ ------ ------ ------
Net asset value, end of
period $ 10.11 $10.13 $10.05 $10.00 $10.05
------- ------ ------ ------ ------
Total Return (b)(c) 5.4% 5.9% 6.3% 3.6% 8.4%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of pe-
riod (000 for Class A) $16,808 $9,788 $6,506 $ 0 $ 201
Ratio to average net as-
sets:
Expenses (a)(d) 1.00% 1.47% 2.74%(e) 0.64%(e) --
Net investment income
(a)(d) 5.17% 4.94% 3.08%(e) 5.14%(e) --
Portfolio turnover rate 339%(g) 85% 0% 85% --
</TABLE>
- --------
(a) Net of fees waived amounting to 0.91%, 1.25% and 0.77% of average net as-
sets for the periods ended October 31, 1997, October 31, 1996 and October
31, 1995, respectively, for Class A Shares.
(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.
(d) Net of fees waived amounting to 1.29% of average net assets for the period
ended October 31, 1996 for Class B Shares.
(e) Annualized.
(f) On August 16, 1996, all Class B Shares were converted into Class A Shares.
(g) Portfolio turnover does not include securities acquired from Ivy Short Term
Bond Fund on November 29, 1996.
17
<PAGE>
THE TOCQUEVILLE FUND
INVESTMENTS AS OF OCTOBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
COMMON STOCKS--80.2% Shares Value
- -------------------------------------------------------------------------
<S> <C> <C>
BASIC INDUSTRIES--6.2%
Champion International Corporation 25,000 $ 1,379,687
Newmont Mining Corporation 75,000 2,625,000
- -------------------------------------------------------------------------
4,004,687
- -------------------------------------------------------------------------
BUSINESS SERVICES--1.4%
H&R Block, Inc. 25,000 925,000
Siebel Systems, Inc.* 133 5,383
- -------------------------------------------------------------------------
930,383
- -------------------------------------------------------------------------
CAPITAL GOODS--1.2%
ZERO Corp. 30,000 806,250
- -------------------------------------------------------------------------
806,250
- -------------------------------------------------------------------------
CONGLOMERATE--1.5%
ITT Industries, Inc. 30,000 946,875
- -------------------------------------------------------------------------
946,875
- -------------------------------------------------------------------------
CONSUMER BASICS--5.6%
Bristol Myers Squibb Company 25,000 2,193,750
R.P. Scherer Corporation* 25,000 1,471,875
- -------------------------------------------------------------------------
3,665,625
- -------------------------------------------------------------------------
CONSUMER NON-DURABLES--9.2%
Burlington Industries, Inc.* 150,000 2,240,625
Kmart Corporation* 200,000 2,637,500
Polaroid Corporation 25,000 1,123,438
- -------------------------------------------------------------------------
6,001,563
- -------------------------------------------------------------------------
ENERGY--16.0%
Baker Hughes, Inc. 40,000 1,837,500
Burlington Resources, Inc. 25,000 1,223,438
Knightsbridge Tankers, Ltd. 30,000 900,000
Murphy Oil Corporation 30,000 1,738,125
Tesoro Petroleum Corporation* 100,000 1,625,000
Varco International, Inc.* 50,000 3,046,875
- -------------------------------------------------------------------------
10,370,938
- -------------------------------------------------------------------------
FINANCE--12.9%
BankAmerica Corporation 40,000 2,860,000
Citicorp 20,000 2,501,250
Financial Security Assurance Holdings Ltd. 40,000 1,740,000
Hartford Steam Boiler Inspection & Insurance Company 25,000 1,304,687
- -------------------------------------------------------------------------
8,405,937
- -------------------------------------------------------------------------
MACHINERY--1.1%
Albany International Corporation 30,000 731,250
- -------------------------------------------------------------------------
731,250
- -------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
See Notes to the Financial Statements.
<TABLE>
<CAPTION>
COMMON STOCKS Market
(CONTINUED) Shares Value
- ----------------------------------------------------------------------------
<S> <C> <C>
MEDICAL SERVICES--3.7%
Amgen, Inc.* 15,000 $ 738,750
Genzyme Corporation* 25,000 684,375
Integrated Health Services, Inc. 30,000 952,500
- ----------------------------------------------------------------------------
2,375,625
- ----------------------------------------------------------------------------
METALS & MINERALS--2.7%
Inco, Ltd. 40,000 825,000
Zeigler Coal Holding Company 51,000 911,625
- ----------------------------------------------------------------------------
1,736,625
- ----------------------------------------------------------------------------
PUBLISHING--1.7%
Readers Digest Association, Inc. 50,000 1,137,500
- ----------------------------------------------------------------------------
1,137,500
- ----------------------------------------------------------------------------
REAL ESTATE--2.6%
Cattellus Development Corporation* 100,000 1,718,750
- ----------------------------------------------------------------------------
1,718,750
- ----------------------------------------------------------------------------
TECHNOLOGY--8.2%
Adobe Systems, Inc. 40,000 1,910,000
The Boeing Company 20,000 957,500
International Business Machines Corporation 25,000 2,451,562
- ----------------------------------------------------------------------------
5,319,062
- ----------------------------------------------------------------------------
UTILITIES--6.2%
AT&T Corporation 50,000 2,446,875
Sprint Corporation 30,000 1,560,000
- ----------------------------------------------------------------------------
4,006,875
- ----------------------------------------------------------------------------
Total Common Stocks (Cost $32,622,983) 52,157,945
- ----------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--15.9% Amount
----------
U.S. Treasury Bills:
4.82% due 01/08/98 $3,000,000 2,972,279
4.90% due 01/29/98 4,500,000 4,444,862
Repurchase Agreement with Firstar Bank 4.25%, dated
10/31/97, due 11/03/97, collateralized by U.S.
Treasury Notes valued at $2,958,555. Repurchase
proceeds of $2,901,027. (Cost $2,900,000) 2,900,000 2,900,000
- ----------------------------------------------------------------------------
Total Short-Term Investments (Cost $10,315,791) 10,317,141
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS (COST $42,938,774)--96.1% 62,475,086
OTHER ASSETS & LIABILITIES--3.9% 2,523,256
- ----------------------------------------------------------------------------
TOTAL NET ASSETS--100% $64,998,342
-----------
</TABLE>
18
<PAGE>
THE TOCQUEVILLE SMALL CAP VALUE FUND
INVESTMENTS AS OF OCTOBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
COMMON STOCKS--91.5% Shares Value
- --------------------------------------------------------------
<S> <C> <C>
BUSINESS SUPPORT SERVICES--17.7%
PSC, Inc.* 85,000 $ 860,625
Sensormatic Electronics Corporation 60,000 896,250
Telxon Corporation 20,000 515,000
Ultrak, Inc.* 50,000 575,000
Wave Technologies International, Inc.* 100,000 787,500
- --------------------------------------------------------------
3,634,375
- --------------------------------------------------------------
CHEMICALS--5.2%
Asahi/America, Inc.* 40,000 290,000
A. Schulman, Inc. 20,000 450,000
Lawter International, Inc. 30,000 335,625
- --------------------------------------------------------------
1,075,625
- --------------------------------------------------------------
COMMUNICATIONS RELATED--17.9%
Active Voice Corporation* 20,000 285,000
ANTEC Corporation* 50,000 787,500
Boston Technology, Inc.* 10,000 271,250
Brite Voice Systems, Inc.* 20,000 195,000
C-COR Electronics, Inc.* 48,000 768,000
InterVoice, Inc.* 15,000 140,625
Norstran, Inc.* 12,500 281,250
Periphonics Corporation* 20,000 192,500
Scientific-Atlanta, Inc. 27,000 501,187
Teltrend, Inc.* 15,000 255,000
- --------------------------------------------------------------
3,677,312
- --------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES--20.2%
Intergraph Corporation* 25,000 268,750
National Computer Systems, Inc. 27,500 1,045,000
Systems & Computer Technology Corporation* 25,000 1,078,125
Timberline Software Corporation 21,250 313,438
Unisys Corporation* 110,000 1,464,375
- --------------------------------------------------------------
4,169,688
- --------------------------------------------------------------
CONSUMER NON-DURABLE--9.0%
Franklin Electronic Publishers, Inc.* 60,000 840,000
Galoob Toys, Inc.* 20,000 263,750
Hudson Foods, Inc. Class A 20,000 375,000
J.M. Smucker Company Class B 15,000 378,750
- --------------------------------------------------------------
1,857,500
- --------------------------------------------------------------
DRILLING EQUIPMENT & SERVICES--3.3%
Oceaneering International, Inc.* 15,000 372,188
Offshore Logistics, Inc.* 15,000 315,000
- --------------------------------------------------------------
687,188
- --------------------------------------------------------------
</TABLE>
* Non-income producing security.
See Notes to the Financial Statements.
<TABLE>
<CAPTION>
COMMON STOCKS Market
(CONTINUED) Shares Value
- ----------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL SERVICES--1.6%
Penncorp Financial Group, Inc. 10,000 $ 325,625
- ----------------------------------------------------------------------------
325,625
- ----------------------------------------------------------------------------
HEALTH CARE--7.7%
Bindley Western Industries, Inc. 9,000 253,125
Dendrite International, Inc.* 15,000 290,625
Owens & Minor, Inc. Holding Company 60,000 840,000
Utah Medical Products, Inc.* 25,000 210,937
- ----------------------------------------------------------------------------
1,594,687
- ----------------------------------------------------------------------------
MANUFACTURING & RELATED--6.4%
Gorman-Rupp Company 18,000 339,750
O'Sullivan Industries Holding, Inc.* 70,000 971,250
- ----------------------------------------------------------------------------
1,311,000
- ----------------------------------------------------------------------------
PRECIOUS METALS--2.5%
Battle Mountain Gold Company 50,000 306,250
Echo Bay Mines Ltd. 50,000 203,125
- ----------------------------------------------------------------------------
509,375
- ----------------------------------------------------------------------------
Total Common Stocks
(Cost $14,678,357) 18,842,375
- ----------------------------------------------------------------------------
Principal
CONVERTIBLE BONDS--0.5% Amount
---------
Engle Homes Inc. 7.00%, due 03/01/03 $ 100,000 116,125
- ----------------------------------------------------------------------------
Total Convertible Bonds
(Cost $97,237) 116,125
- ----------------------------------------------------------------------------
U.S. TREASURY NOTES--1.0%
6.25%, due 06/30/98
(Cost $200,142) 200,000 200,937
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS--7.2%
U.S. Treasury Bill, 4.90% due 01/29/98 500,000 493,874
Repurchase Agreement with Firstar Bank, 3.75%, dated
10/31/97, due 11/03/97, collateralized by U.S.
Treasury Notes valued at $1,007,915. Repurchase
proceeds of $985,308.
(Cost $985,000) 985,000 985,000
- ----------------------------------------------------------------------------
Total Short-Term Investments (Cost $1,478,875) 1,478,874
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS (COST $16,454,611)--100.2% 20,638,311
LIABILITIES LESS OTHER ASSETS--(0.2)% (51,447)
- ----------------------------------------------------------------------------
TOTAL NET ASSETS--100% $20,586,864
-----------
</TABLE>
19
<PAGE>
THE TOCQUEVILLE INTERNATIONAL VALUE FUND
INVESTMENTS AS OF OCTOBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS AND Market
WARRANTS--80.4% Shares Value
- ------------------------------------------------------------------------------
<S> <C> <C>
AUSTRALIA--1.0%
Normandy Mining Limited 500,000 $ 546,279
QNI Limited 35,000 30,838
- ------------------------------------------------------------------------------
577,117
- ------------------------------------------------------------------------------
BERMUDA--1.0%
Knightsbridge Tanker Ltd. 21,000 630,000
- ------------------------------------------------------------------------------
630,000
- ------------------------------------------------------------------------------
FRANCE--20.0%
Alcatel Alsthom 3,000 362,750
Chaine et Trame 21,000 612,557
Charlatte SA 15,400 93,908
Cider Sante SA 10,850 735,141
Compagnie des Alpes 17,700 409,902
Distriborg 8,000 569,836
Ducros Services Rapides SA New Shares* 50,000 692,751
Ducros Services Rapides SA* 10 89
Emin--Leydier 6,300 456,955
Etablissements Economiques du Casino Guichard-Perrachon
SA 8,000 444,750
Europe Auto Industrie SA 6,800 330,783
Europeenne d'Extincteurs 12,600 844,956
Faiveley SA 16,700 536,741
Faiveley Warrants 7/99* 700 2,457
Fraikin 6,000 338,254
GFI Industries SA 1,500 250,172
Grande Paroisse SA* 10,500 707,778
Guillin Emballages 9,000 304,897
Havas SA 3,500 231,062
Infra Plus 2,645 78,118
JAJ Distribution SA 3,243 123,950
Louis Dreyfus Citrus* 15,500 463,166
Mors* 850,000 849,108
Musee Grevin SA* 20,000 347,461
Rouleau-Guichard* 2,392 122,550
Rubis et Cie 24,540 560,630
SGS Thomson Microelectrics N.V.* 3,000 213,949
Societe Industrielle D'Aviations Latecoere SA 4,415 545,352
SPIR Communication 3,500 224,312
Sport Elec SA 2,543 26,508
Vallourec SA 5,000 329,219
Vilmorin et Compagnie 4,341 358,982
Vilmorin et Compagnie Warrants* 990 9,804
- ------------------------------------------------------------------------------
12,178,848
- ------------------------------------------------------------------------------
HONG KONG--2.1%
Elec & Eltek International Holdings Limited 3,435,000 1,266,544
- ------------------------------------------------------------------------------
1,266,544
- ------------------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements.
<TABLE>
<CAPTION>
COMMON STOCKS AND Market
WARRANTS (CONTINUED) Shares Value
- ---------------------------------------------------------------------
<S> <C> <C>
INDONESIA--5.4%
Astra Intl 320,000 $ 237,448
Cahaya Kalbar 800,000 488,210
Citra Marga Nusaphala Persada 1,200,000 341,192
Indofood Sukses Makmur 477,000 476,338
PT Asuransi Lippo Life-Foreign 4,800,000 632,454
PT Hanjaya Mandaha Sampoerna 130,000 226,283
PT Japfa Comfeed 2,381,500 396,366
PT Tunas Ridean 3,025,000 503,467
- ---------------------------------------------------------------------
3,301,758
- ---------------------------------------------------------------------
JAPAN--4.1%
The Bank of Tokyo--Mitsubishi, Ltd. 15,250 199,073
FCC Company Limited 17,000 268,562
H.I.S. Company Limited 3,630 118,012
Oiles Corporation 14,400 379,546
Paramount Bed 21,000 836,368
Rohm Company Ltd. 7,000 692,608
- ---------------------------------------------------------------------
2,494,169
- ---------------------------------------------------------------------
MALAYSIA--2.8%
Commerce Asset Hld Warrants* 10,000 1,612
Cycle & Carriage Bintang BHD 100,000 156,717
Malaysia Assurance Alliance 360,000 644,778
Road Builder (M) Holdings BHD 250,000 292,538
YTL Corp. 150,000 160,299
YTL Corp. Berhad 400,000 441,792
- ---------------------------------------------------------------------
1,697,736
- ---------------------------------------------------------------------
NETHERLANDS--3.2%
Draka Holding N.V. 20,000 966,650
Volker Wessels Stevin N.V. 32,600 991,073
- ---------------------------------------------------------------------
1,957,723
- ---------------------------------------------------------------------
PHILIPPINES--6.1%
Ionics Circuit Inc. 3,174,000 1,861,779
Solid Group, Inc. 16,065,000 990,012
Swift Foods Inc.* 2,087,000 57,816
Universal Rightfield Property Holdings, Inc.* 10,500,000 350,247
Universal Robina Corp. 3,000,000 381,625
Vitarich Corporation* 2,900,000 65,583
- ---------------------------------------------------------------------
3,707,062
- ---------------------------------------------------------------------
SINGAPORE--6.5%
Clipsal Industries Ltd. 402,000 1,041,180
Elec & Eltek International Company Ltd. 100,000 720,000
GP Batteries Intl Ltd. 200,000 584,862
GPE Industries Ltd. 953,000 671,865
Robinson & Co., Limited 277,200 969,217
- ---------------------------------------------------------------------
3,987,124
- ---------------------------------------------------------------------
</TABLE>
20
<PAGE>
THE TOCQUEVILLE INTERNATIONAL VALUE FUND
INVESTMENTS AS OF OCTOBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS AND Market
WARRANTS (CONTINUED) Shares Value
- ---------------------------------------------------------------------------
<S> <C> <C>
SOUTH KOREA--1.2%
Samsung Display Devices Company* 11,081 $ 338,816
Samsung Electronics Co. 9,576 376,172
- ---------------------------------------------------------------------------
714,988
- ---------------------------------------------------------------------------
SPAIN--13.7%
Abengoa SA 16,500 851,335
Azkoyen SA 6,250 688,377
Banco Pastor SA 20,100 1,500,309
Bakinter--Banco Interc Esp. 10,500 515,754
Cementos Portland SA 22,800 1,082,278
Centros Comerciales Pryca, SA 18,500 293,994
Construcciones y Auxiliar de Ferrocarriles SA 13,400 548,500
Groupo Acciona SA 6,400 981,838
Grupo Anaya SA 15,000 298,741
Prosegur CIA de Seguridad 52,500 588,711
Repsol SA 24,000 1,007,155
- ---------------------------------------------------------------------------
8,356,992
- ---------------------------------------------------------------------------
SRI LANKA--0.3%
Bogwantalawa* 6,800 5,233
John Keelis Holdings, Ltd.* 30,000 153,074
- ---------------------------------------------------------------------------
158,307
- ---------------------------------------------------------------------------
SWITZERLAND--1.7%
Ciba Specialty Chemicals-Registered Shares* 460 45,296
Novartis 460 727,363
SMH AG 450 251,685
- ---------------------------------------------------------------------------
1,024,344
- ---------------------------------------------------------------------------
THAILAND--8.0%
Asia Credit Public Company Limited 80,000 107,252
Berli Jucker Public Company Limited* 37,200 45,338
Big C Supercenter Public Company Limited 2,240,000 343,985
GSS Array Technology Public Company Limited Foreign* 108,900 220,322
Krung Thai Bank Public Company Limited 618,000 207,129
Nawarat Patanakarn Public Company Limited 500,000 65,814
Nawarat Patanakarn Public Company Limited Foreign 969,400 127,599
- ---------------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements.
<TABLE>
<CAPTION>
COMMON STOCKS AND Market
WARRANTS (CONTINUED) Shares Value
- ------------------------------------------------------------------------
<S> <C> <C>
Robinson Department Store Public Company Limited 1,152,700 $ 81,483
Siam City Bank Public Company Limited 1,592,200 337,651
Siam City Bank--Rights 495,000 0
Siam Makro Public Company Limited 600,000 775,136
Swedish Motor Public Company Limited 133,000 42,145
Thai Farmers Bank Warrants* 800 278
Thai Farmers Bank Public Company Limited 400,000 784,886
Thai Farmers Bank Public Company Limited Foreign 252,600 677,294
Thai Military Bank Public Company Limited 1,105,400 431,112
Thai Stanley Electric Public Company Limited 391,800 382,010
Thai Rung Union Car Public Company Limited 160,000 273,004
- ------------------------------------------------------------------------
4,902,438
- ------------------------------------------------------------------------
UNITED KINGDOM--2.7%
Cairn Energy plc* 38,000 284,839
Jarvis plc 150,000 817,489
Linx Printing Technologies plc 100,000 255,727
Utlitec plc 430,000 320,875
- ------------------------------------------------------------------------
1,678,930
- ------------------------------------------------------------------------
UNITED STATES--0.6%
Albany International Corporation 15,000 365,625
- ------------------------------------------------------------------------
365,625
- ------------------------------------------------------------------------
Total Common Stocks and Warrants
(Cost $62,024,304) 48,999,705
- ------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $62,024,304)--80.4% 48,999,705
CASH**--19.9% 12,122,955
OTHER ASSETS & LIABILITIES--(0.3)% (160,083)
- ------------------------------------------------------------------------
TOTAL NET ASSETS--100.0% $60,962,577
-----------
</TABLE>
* Non-income producing security.
** Cash balance is interest earning.
21
<PAGE>
THE TOCQUEVILLE GOVERNMENT FUND
INVESTMENTS AS OF OCTOBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par Market
Value Value
- ---------------------------------------------------------------------------
<S> <C> <C>
U.S GOVERNMENT AGENCY--29.8%
Federal Home Loan Bank (FHLB):
7.00%, due 06/24/02 $ 500,000 $ 500,575
7.18%, due 08/06/02 1,000,000 1,000,525
7.00%, due 11/29/02 1,000,000 1,001,153
7.18%, due 02/13/04 500,000 501,197
Federal Farm Credit Bank (FFCB),
5.70%, due 09/02/98 1,000,000 1,001,511
Federal National Mortgage Association (FNMA), Medium
Term Note,
6.85%, due 07/02/02 1,000,000 1,007,693
- ---------------------------------------------------------------------------
Total U.S. Government Agency
(Cost $5,002,950) 5,012,654
- ---------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS--32.8%
U.S. Treasury Notes:
5.375%, due 11/30/97 2,500,000 2,498,400
5.875%, due 11/30/01 1,000,000 1,004,376
5.875%, due 09/30/02 1,000,000 1,005,626
5.750%, due 08/15/03 1,000,000 997,501
- ---------------------------------------------------------------------------
Total U.S. Treasury Obligations
(Cost $5,489,923) 5,505,903
- ---------------------------------------------------------------------------
</TABLE>
See Notes to the Financial Statements.
<TABLE>
<CAPTION>
Par Market
Value Value
- -----------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENTS--31.9%
U.S. Treasury Bills:
4.99%, due 12/04/97 $3,900,000 $ 3,881,629
4.82%, due 01/08/98 1,000,000 990,760
4.90%, due 01/29/98 500,000 493,873
- -----------------------------------------------------
Total Short-Term Investments
(Cost $5,365,946) 5,366,262
- -----------------------------------------------------
TOTAL INVESTMENTS
(COST $15,858,819)--94.5% 15,884,819
OTHER ASSETS & LIABILITIES,
NET--5.5% 922,760
- -----------------------------------------------------
TOTAL NET ASSETS--100% $16,807,579
-----------
</TABLE>
22
<PAGE>
THE TOCQUEVILLE TRUST
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THE SMALL CAP INTERNATIONAL
TOCQUEVILLE VALUE VALUE GOVERNMENT
FUND FUND FUND FUND
----------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments, at value* $62,475,086 $20,638,311 $48,999,705 $15,884,819
Foreign currencies** 0 0 60,026 0
Cash*** 3,056,688 297,449 12,122,955 462,058
Receivable for investments
sold 477,272 0 1,747,859 0
Receivable for fund shares
sold 45,177 49,017 25,000 276,235
Dividends, interest and
other receivables 53,267 8,444 222,515 197,609
Due from Investment Adviser 0 0 0 51,403
Deferred organization
expense 0 11,830 10,818 13,032
----------- ----------- ----------- -----------
Total assets 66,107,490 21,005,051 63,188,878 16,885,156
----------- ----------- ----------- -----------
LIABILITIES
Payable for investments
purchased 872,568 349,820 2,103,810 0
Payable for fund shares
repurchased 91,000 0 0 0
Payable to Investment
Adviser 39,953 7,431 24,405 0
Dividends payable 0 0 0 15,021
Accrued distribution fee 15,085 4,664 10,603 3,208
Accrued expenses and other
liabilities 90,542 56,272 87,483 59,348
----------- ----------- ----------- -----------
Total liabilities 1,109,148 418,187 2,226,301 77,577
----------- ----------- ----------- -----------
Net Assets $64,998,342 $20,586,864 $60,962,577 $16,807,579
----------- ----------- ----------- -----------
NET ASSETS CONSISTED OF:
Paid in capital $38,578,997 $14,207,044 $74,270,214 $16,789,824
Undistributed net
investment income 158,569 0 64,452 0
Accumulated net realized
gain (loss) 6,724,464 2,196,120 (330,316) (8,245)
Net unrealized appreciation
(depreciation) 19,536,312 4,183,700 (13,041,773) 26,000
----------- ----------- ----------- -----------
Net assets $64,998,342 $20,586,864 $60,962,577 $16,807,579
----------- ----------- ----------- -----------
Shares outstanding
(unlimited shares of $0.01
par value authorized) 3,216,880 1,263,238 5,984,274 1,662,082
Net asset value and
redemption price per share $ 20.21 $ 16.30 $ 10.19 $ 10.11
----------- ----------- ----------- -----------
Maximum offering price per
share $ 21.05 $ 16.98 $ 10.61 $ 10.53
----------- ----------- ----------- -----------
*Cost of Investments $42,938,774 $16,454,611 $62,024,304 $15,858,819
**Cost of Foreign
Currencies $ 0 $ 0 $ 56,093 $ 0
</TABLE>
*** Cash balance in International Fund is an interest earning balance.
See Notes to the Financial Statements.
23
<PAGE>
THE TOCQUEVILLE TRUST
STATEMENTS OF OPERATIONS
Year Ended October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THE SMALL CAP INTERNATIONAL
TOCQUEVILLE VALUE VALUE GOVERNMENT
FUND FUND FUND FUND
----------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends* $ 697,281 $ 77,369 $ 793,013 $ 0
Interest 229,394 68,414 165,778 929,120
----------- ---------- ------------ --------
926,675 145,783 958,791 929,120
----------- ---------- ------------ --------
EXPENSES: (NOTE 3)
Investment Adviser's fee 398,685 116,466 433,289 75,162
Custodian and fund
accounting fees 39,355 29,344 107,628 31,758
Transfer agent and
shareholder services 64,643 12,609 21,405 12,333
Professional fees 104,404 65,191 131,918 59,945
Distribution fees 132,895 38,822 111,467 37,581
Administration fee 79,737 23,293 66,880 22,549
Printing and mailing
expense 16,098 6,772 9,590 9,921
Registration fees 22,648 19,624 35,808 23,642
Trustee fees and expenses 3,516 2,469 5,546 2,905
Fidelity bond 8,538 4,637 6,697 4,843
Amortization of
organization costs 0 5,616 6,182 4,394
Other 7,116 1,082 3,856 1,693
----------- ---------- ------------ --------
Total expenses before
waiver 877,635 325,925 940,266 286,726
Less: Fees waived and re-
imbursed (133,423) (54,172) (51,247) (136,402)
----------- ---------- ------------ --------
Net expenses 744,212 271,753 889,019 150,324
----------- ---------- ------------ --------
NET INVESTMENT INCOME
(LOSS) 182,463 (125,970) 69,772 778,796
----------- ---------- ------------ --------
REALIZED AND UNREALIZED
GAIN (LOSS):
Net realized gain (loss)
on:
Investments 7,000,921 2,372,872 (412,373) 87,972
Foreign currency trans-
actions 0 0 111,744 0
Net change in unrealized
appreciation
(depreciation) on:
Investments 8,066,500 2,716,960 (14,738,530) (63,733)
Foreign currency trans-
lations 0 0 (17,370) 0
----------- ---------- ------------ --------
Net gain (loss) on
investments and
foreign currency 15,067,421 5,089,832 (15,056,529) 24,239
----------- ---------- ------------ --------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS $15,249,884 $4,963,862 $(14,986,757) $803,035
----------- ---------- ------------ --------
*Net of Foreign Taxes With-
held 0 0 158,931 0
----------- ---------- ------------ --------
</TABLE>
See Notes to the Financial Statements.
24
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
25
<PAGE>
THE TOCQUEVILLE TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THE TOCQUEVILLE FUND
------------------------
FOR THE YEAR ENDED
OCTOBER 31,
------------------------
1997 1996
----------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ 182,463 $ 172,962
Net realized gain (loss) on investments and
foreign currency 7,000,921 2,100,811
Net change in unrealized appreciation (deprecia-
tion) 8,066,500 5,298,485
----------- -----------
Net increase (decrease) in net assets resulting
from operations 15,249,884 7,572,258
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class A (161,026) (354,776)
Class B -- (2)
Net realized gains
Class A (2,120,066) (2,505,796)
Class B -- (14)
FUND SHARE TRANSACTIONS
Class A 9,615,588 4,265,807
Class B -- (1,507)
----------- -----------
Net increase (decrease) in net assets 22,584,380 8,975,970
NET ASSETS:
Beginning of year 42,413,962 33,437,992
----------- -----------
End of year* 64,998,342 42,413,962
----------- -----------
* Including undistributed net investment income
(loss) of: $ 158,569 $ 137,132
----------- -----------
</TABLE>
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
- ----------------------- ------------------------- -----------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31,
- ----------------------- ------------------------- -----------------------
1997 1996 1997 1996 1997 1996
- ---------- ---------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
$ (125,970) $ (128,517) $ 69,772 $ 242,163 $ 778,796 $ 441,237
2,372,872 1,355,990 (300,629) 1,005,349 87,972 8,831
2,716,960 708,913 (14,755,900) 1,432,158 (63,733) 61,953
- ---------- ---------- ------------ ----------- ----------- ----------
4,963,862 1,936,386 (14,986,757) 2,679,670 803,035 512,021
0 0 (113,921) 0 (778,796) (441,229)
-- 0 -- 0 -- (8)
(1,277,296) (600,818) (1,177,180) 0 (45,262) 0
-- (12) -- 0 -- 0
5,355,273 827,265 53,308,101 14,983,225 7,040,372 3,211,933
-- (297) -- (218) -- (199)
- ---------- ---------- ------------ ----------- ----------- ----------
9,041,839 2,162,524 37,030,243 17,662,677 7,019,349 3,282,518
11,545,025 9,382,501 23,932,334 6,269,657 9,788,230 6,505,712
- ---------- ---------- ------------ ----------- ----------- ----------
20,586,864 11,545,025 60,962,577 23,932,334 16,807,579 9,788,230
- ---------- ---------- ------------ ----------- ----------- ----------
$ 0 $ (128,517) $ 64,452 $ 242,163 $ 0 $ 0
- ---------- ---------- ------------ ----------- ----------- ----------
</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
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 four
separate Funds: The Tocqueville Fund, The Tocqueville Small Cap Value Fund, The
Tocqueville International Value Fund (formerly The Tocqueville Europe Fund) and
The Tocqueville Government Fund (the "Funds"). The objective of The Tocqueville
Fund is long-term capital appreciation, primarily through investments in secu-
rities 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 primar-
ily through investment in securities of issuers located outside the United
States. The objective 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 following is a summary of significant ac-
counting principles followed by the Trust in the preparation of its financial
statements.
- --------------------------------------------------------------------------------
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 and The
Tocqueville Government 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 is engaged in transactions in securities
denominated in foreign currencies and, as a result, enters into foreign ex-
change contracts. The Tocqueville International Value Fund is 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 Fund
recognizes 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.
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, 1997, the
Adviser has made payments of $17,820, $12,153, $16,456 and $10,028 to Firstar
Trust Company for services provided under a Sub-Administration agreement for
The Tocqueville Fund, The Tocqueville Small Cap Value Fund, The Tocqueville
International Value Fund and The Tocqueville Government Fund, respectively.
FOR THE PERIOD ENDED OCTOBER 31, 1997, THE ADVISER WAIVED THE FOLLOWING FEES BY
FUND:
<TABLE>
<CAPTION>
TOCQUEVILLE SMALL CAP INTERNATIONAL GOVERNMENT
FUND VALUE FUND VALUE FUND FUND
----------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Advisory Fees waived $133,423 $54,172 $51,247 $75,162
Administration Fees waived $ 0 $ 0 $ 0 $22,549
Reimbursement by Advisor $ 0 $ 0 $ 0 $38,691
</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,
1997, the Distributor received net commissions of $24,680 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, 1997, there were $156,715, $81,751, $72,512
and $33,063 in unreimbursed expenses for The Tocqueville Fund, The Tocqueville
Small Cap Value Fund, The Tocqueville International Value Fund, and The
Tocqueville Government 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 and
The Tocqueville Government Fund for the year ended October 31, 1997, were
$62,053, $67,534, $4,177 and $64,827, respectively.
31
<PAGE>
- --------------------------------------------------------------------------------
4. FUND SHARE TRANSACTIONS
The Fund currently offers only one class of shares of beneficial interest. On
August 16, 1996, all previously existing shares of Class B shares of each Fund
were converted at net asset value without the imposition of a deferred sales
charge, into Class A shares of an equivalent value. Transactions in Fund shares
were as follows:
<TABLE>
<CAPTION>
TOCQUEVILLE
FUND
---------------------
AMOUNT SHARES
----------- --------
<S> <C> <C>
YEAR ENDED OCTOBER 31, 1997
Class A Shares:
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
----------- --------
YEAR ENDED OCTOBER 31, 1996
Class A Shares:
Shares sold $ 7,400,012 497,009
Shares issued to owners in reinvestment of dividends 2,596,698 191,069
Shares redeemed (5,743,803) (388,402)
Shares issued from conversion of Class B 12,900 848
----------- --------
Net Increase $ 4,265,807 300,524
----------- --------
PERIOD FROM NOVEMBER 1, 1995 TO AUGUST 16, 1996:
Class B Shares:
Shares sold $ 72,498 4,899
Shares issued to owners in reinvestment of dividends 12 1
Shares redeemed (61,117) (4,058)
Conversion to Class A (12,900) (856)
----------- --------
Net increase (decrease) $ (1,507) (14)
----------- --------
</TABLE>
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 TOCQUEVILLE TOCQUEVILLE
VALUE INTERNATIONAL VALUE GOVERNMENT
FUND FUND FUND
- ----------------------- ------------------------- -----------------------
AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
- ----------- -------- ----------- --------- ---------- --------
<S> <C> <C> <C> <C> <C>
$ 5,334,618 383,306 35,347,849 2,753,233 $6,556,888 651,940
1,196,250 94,790 1,280,388 107,056 700,343 69,492
0 0 18,095,391 1,333,485 5,723,220 563,864
(1,175,595) (78,096) (1,415,527) (113,492) (5,940,079) (589,453)
- ----------- -------- ----------- --------- ---------- --------
$ 5,355,273 400,000 $53,308,101 4,080,282 $7,040,372 695,843
- ----------- -------- ----------- --------- ---------- --------
$ 2,925,368 240,431 $15,071,859 1,332,335 $6,770,116 672,706
523,199 45,103 0 0 342,832 34,393
(2,632,401) (210,711) (88,634) (7,382) (3,901,015) (388,010)
11,099 902 0 0 0 0
- ----------- -------- ----------- --------- ---------- --------
$ 827,265 75,725 $14,983,225 1,324,953 $3,211,933 319,089
- ----------- -------- ----------- --------- ---------- --------
$ 11,000 909 $ 0 0 $ 0 0
9 1 0 0 7 1
(207) (17) (218) (18) (206) (21)
(11,099) (909) 0 0 0 0
- ----------- -------- ----------- --------- ---------- --------
$ (297) (16) $ (218) (18) $ (199) (20)
- ----------- -------- ----------- --------- ---------- --------
</TABLE>
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 fee 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, 1997 were as follows:
<TABLE>
<CAPTION>
THE SMALL CAP INTERNATIONAL
TOCQUEVILLE VALUE VALUE GOVERNMENT
FUND FUND FUND FUND
----------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
PURCHASES
U.S. Government $ 0 $ 0 $ 0 $26,085,243
Other 22,969,817 16,457,899 56,534,076 0
----------- ----------- ------------ -----------
$22,969,817 $16,457,899 $ 56,534,076 $26,085,243
----------- ----------- ------------ -----------
SALES
U.S. Government $ 0 $ 0 $ 0 $28,857,000
Other 25,080,359 13,886,229 27,038,593 0
----------- ----------- ------------ -----------
$25,080,359 $13,886,229 $ 27,038,593 $28,857,000
----------- ----------- ------------ -----------
Unrealized appreciation (depreciation) at October 31, 1997 based on cost of
securities for Federal tax purposes is as follows:
<CAPTION>
THE SMALL CAP INTERNATIONAL
TOCQUEVILLE VALUE VALUE GOVERNMENT
FUND FUND FUND FUND
----------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
Gross unrealized appre-
ciation $19,989,818 $ 4,421,369 $ 5,508,198 $ 26,705
Gross unrealized depre-
ciation (694,486) (239,539) (18,693,090) (705)
----------- ----------- ------------ -----------
Net unrealized
appreciation
(depreciation) $19,295,332 $ 4,181,830 $(13,184,892) $ 26,000
----------- ----------- ------------ -----------
Cost of investments $43,179,754 $16,456,481 $ 62,184,597 $15,858,819
----------- ----------- ------------ -----------
</TABLE>
At October 31, 1997, Tocqueville Government Fund had tax basis capital losses
of $658,000 which arose from the merger with Ivy Short Term Bond Fund described
in Note 4. Such losses may be carried over to offset future capital gains
through 2003.
At October 31, 1997, Tocqueville International Value Fund had tax basis capi-
tal losses of 477,000 which may be carried over to offset future capital gains.
Of this amount $213,000 arose from the merger with Tocqueville Asia Pacific
Fund described in Note 4. Such losses may be carried over to offset future cap-
ital gains through 2005.
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 and The Tocqueville Government Fund, as of October 31,
1997, and the related statements of operations, the statements of changes in
net assets, and the financial highlights for the periods indicated in the ac-
companying financial statements. These financial statements and financial high-
lights are the responsibility of the Trust's management. 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, 1997, 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 Inter-
national Value Fund, and The Tocqueville Government Fund series of The
Tocqueville Trust as of October 31, 1997, 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.
/s/ McGladrey & Pullen, LLP
New York, New York
November 25, 1997
35
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Investment Adviser
Tocqueville Asset Management L.P.
1675 Broadway
New York, NY 10019
Phone: (212) 698-0800
Distributor
Tocqueville Securities L.P.
1675 Broadway
New York, NY 10019
Phone: (212) 698-0800
Shareholders' Servicing,
Custodian and Transfer Agent
Firstar Trust Company
Mutual Fund Services
P.O. Box 701
Milwaukee, WI 53201-0701
Toll Free Phone: (800) 697-3863
Board of Trustees
Francois Sicart - Chairman
Bernard F. Combemale
James B. Flaherty
Inge Heckel
Robert W. Kleinschmidt
Francois Letaconnoux
