<PAGE>
FIRST EAGLE FUNDS
____________________________________________
Annual Report -- October 31, 2000
[LOGO]
<PAGE>
FIRST EAGLE FUNDS
ANNUAL REPORT -- OCTOBER 31, 2000
Dear Fellow Investors:
The First Eagle Funds ended their fiscal year on October 31, 2000. First
Eagle Fund of America and First Eagle International Fund performances for their
no-load Class Y Shares relative to the indices are described below.
FIRST EAGLE FUND OF AMERICA'S net asset value increased 6.05%, adjusted for
distributions for the period from November 1, 1999 through October 31, 2000,
while the unmanaged Standard & Poor's 500 Stock Index, adjusted for
distributions, increased 6.05% for the same period. Additionally, the unmanaged
Russell Midcap Value Index, adjusted for distributions, was up 11.85% for the
period from November 1, 1999 through October 31, 2000.
FIRST EAGLE INTERNATIONAL FUND'S net asset value increased 5.93%, adjusted
for distributions for the period from November 1, 1999 through October 31, 2000,
while the broad-based, unmanaged Morgan Stanley Capital International SA (MSCI)
Europe, Australia, Far East Index (EAFE), adjusted for distributions, was down
2.90% for the same period. In addition, the unmanaged MSCI World Ex-USA Index,
adjusted for distributions, was down 1.44% for the period from November 1, 1999
through October 31, 2000.
As always, we take this opportunity to review with our shareholders the
activity of the Funds and the principles which guide us in the day-to-day
business of investing the funds you have entrusted to us.
After eighteen months of central bank interest rate increases and the near
tripling in the price of crude oil, global economic growth has finally displayed
signs of weakening. In Europe, the tripling of oil prices as well as questions
regarding the availability of the supply of gasoline and fuel oil during the
approaching critical winter months ignited unrest.
FIRST EAGLE FUND OF AMERICA
The domestic economy has also clearly decelerated. The initial reaction to
the near term likelihood of no further interest rate increases was strength in
the financial sector. Prices of financial companies in First Eagle Fund of
America's portfolio including Household International, Hartford Financial
Service Group, Comerica and Mellon appreciated significantly during the last
quarter. During September, however, company after company began reporting
declines in business activity. Bell-weather technology and telecommunications
stocks faltered, with companies such as Lucent, Microsoft, Intel, AT&T, Apple
<PAGE>
and Motorola reporting disappointing earnings results and reaching new lows.
Other blue chip companies, Xerox and Kodak, stumbled badly, and the loss of
market value was devastating. The trajectory of economic growth was indisputably
altered and the 'Goldilocks' economic scenario -- 'just right, not too hot and
not too cold' -- has been abruptly and severely challenged.
The central concern now confronting markets is the degree to which the oil
price shock along with rising global interest rates will impair economic
activity. The consensus view has been that the economy will experience a 'soft
landing' and forestall the necessity for the future interest rate increases by
monetary authorities. We are inclined to share this view. The economy,
benefiting from the accumulation of many years of considerable momentum, appears
resilient and is likely to resist outright contraction. More probably, the rate
of growth will be altered. For monetary authorities, achieving a deceleration in
the rate of growth encompasses a substantial degree of risk. In its weakening
condition, the economy has become increasingly vulnerable to exogenous shocks
such as the spike in energy prices. The slowdown in profit growth along with the
economy's changed trajectory is likely to result in reduced capital spending and
slower job creation. The degree to which these forces damage consumer confidence
and constrict spending patterns will dictate the longevity and severity of the
economy's deceleration.
We believe that while the emergence of technology and telecommunications
innovations over the past few years has permanently and inexorably transformed
their industries and the economy generally, technology spending remains subject
to cyclical influences. With profits on the decline, we expect the extraordinary
rate of growth in technology spending to contract. As the spending has been a
significant underpinning to growth generally and to unprecedented productivity
gains specifically, the potential impact of such a slowdown should not be
underestimated. The 'dot-com' companies have been decimated, telecommunications
company earnings are under pressure, bidding for the next generation of wireless
spectrum has reached stratospheric heights, and the cost of capital climbs as
the stocks and bonds of these companies react. Clearly this foundation of the
economy's strength is likely to be subdued.
Nonetheless substantial benefits from technology breakthroughs will continue
to accrue. We expect the emergence of business-to-business exchanges over the
next several years to meaningfully impact the economy. These exchanges are
expected to dramatically reduce supply chain costs, which could in turn continue
to drive gains in productivity, and unleash deflationary influences throughout
the
<PAGE>
global economy. Although we may experience a cyclical decline in technology
spending, the secular influences of the extraordinary advances achieved over the
last several years should be expected to demonstrate an enduring impact. The
economy and markets could well experience a rough patch over the near-term as
the result of cyclical influences. We remain optimistic about the longer-term
financial markets' outlook as the continuation of the secular implications of
technological innovation continues to drive measurable gains in capital and
labor productivity and efficiency. The enduring impact of these technologies in
subduing inflationary pressures should not be discounted particularly for their
contributions in ameliorating the necessity for more extreme intervention of
monetary authorities during periods of cyclical economic stress.
The phenomenon we have found most confounding this year regards the abrupt
and precipitous nature by which stocks decline. What in the past might have been
a 10% price drop in reaction to a news event is now a breathtaking 25%-30%
decline. Recently, this was true of Bausch & Lomb, Six Flags and First Data. We
must be prepared to render investment judgments on stocks within an entirely
altered valuation context, and to withstand the extraordinary price volatility.
Nevertheless, our conviction in and commitment to our discipline -- of investing
in corporate change as a means of addressing the lesser efficient
market -- remains undiminished.
FIRST EAGLE INTERNATIONAL FUND
The global markets were just as volatile marked by a wave of selling that
hit markets worldwide in September. This sell-off was sparked by a number of
earnings warnings issued by some of the stocks in telecommunications, media, and
technology, which led investors to rush out of these shares despite drops of
more than 50% of market value in some cases. Following these companies' profit
warnings, industry analysts lowered their expectations for future earnings,
which in turn led to further pressure on markets. Despite our increasingly
defensive stance, First Eagle International Fund's portfolio was not immune to
the market's carnage. Poor performance in technology positions such as Philips
Electronics, Ericsson and Nokia -- all very strong performers earlier in the
year -- contributed significantly to the recent negative performance.
Strong performance by some of our holdings helped offset our exposure to the
swooning technology & telecommunications sectors. One such company in particular
was the Italian eyewear company Luxottica. A few different trends are bolstering
Luxottica's strong results: many of its newer retail outlets are just swinging
into profit; the
<PAGE>
Ray-Ban brand, which it purchased from Bausch and Lomb in May 1999, has been
restructured and made profitable; and it is selling an increasing proportion of
its own frames through LensCrafters, the retail chain it owns in the United
States. Another strong performer was MLP, Germany's largest independent
insurance broker. The company targets aspiring professionals such as doctors and
lawyers when they are still students, hoping that these clients will remain
loyal as they grow older and wealthier. This strategy has been quite successful
and the company reported a 30% increase in first-half net profit on the back of
very strong life insurance sales. Mutual fund sales were also buoyant with net
inflows rising 41% during the first half, enabling the company to beat its own
earnings expectations.
We have maintained our core positions in our Japan/Asian investments Nikko
Securities and Matsushita Electric Industrial. We have also maintained our
overall underweight allocation in Asia relative to the MSCI EAFE benchmark
index. Although the Bank of Japan has ended its zero interest rate policy in
August by raising rates 25 basis points, we are not confident that this signals
a self-sustaining economic recovery and would rather wait for further evidence.
And while rising bankruptcies in Japan demonstrate the economy's ongoing
restructuring, we are concerned that they may hurt economic growth and market
sentiment in the near future.
Overall, the past year has proved to be a difficult investment environment,
with increasing uncertainties leading to heightened volatility in stock prices.
We are hopeful that some of these uncertainties will be resolved in the near
future, namely: The settlement of the U.S. presidential election may stabilize
market sentiment, particularly with regard to Nasdaq; with actual third quarter
earnings being announced, the uncertainty around some companies may be reduced
helping adjust market expectations; and the Fed will meet at least two more
times this year which should shed some light on U.S. interest-rate policy. The
major uncertainties the markets will still have to confront are the weakness of
the Euro, oil prices, and the implications of potential further conflict in the
Middle East. Despite these issues, we remain confident that the fundamental
trends of our companies remain intact, enabling them to return value to their
shareholders over time.
We thank our shareholders for their continued confidence and appreciate
their support.
Your Investment Team at
Arnhold and S. Bleichroeder, Inc.
November 2000
<PAGE>
[PERFORMANCE GRAPH]
FIRST EAGLE FUND OF AMERICA AND S&P 500 STOCK INDEX
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
APRIL 10, 1987 TO OCTOBER 31, 2000
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN (Y SHARES)*
---------------------------
<S> <C>
1 YEAR 6.05%
5 YEARS 18.72%
10 YEARS 19.06%
SINCE INCEPTION** 15.27%
</TABLE>
*After all expenses. C Shares returned 19.04%*** for the period
March 2, 1998 (inception) to October 31, 2000 and Class A shares
returned -2.58%*** for the period November 20, 1998 (inception) to
October 31, 2000
**April 4, 1994
***Not annualized
DATE FEA SPX
---- --- ---
4/10/87 $10,000 $10,000
10/31/87 $ 9,170 $ 8,777
10/31/88 $11,734 $10,085
10/31/89 $14,575 $12,737
10/31/90 $11,999 $11,782
10/31/91 $14,718 $15,730
10/31/92 $17,076 $17,295
10/31/93 $23,088 $19,870
10/31/94 $23,954 $20,631
10/31/95 $29,116 $26,077
10/31/96 $37,009 $32,256
10/31/97 $48,472 $42,736
10/31/98 $57,778 $52,125
10/31/99 $64,754 $65,492
10/31/00 $68,674 $69,458
Past performance is not predictive of future performance.
<PAGE>
[PERFORMANCE GRAPH]
FIRST EAGLE INTERNATIONAL FUND AND MSCI EAFE INDEX
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
APRIL 4, 1994 TO OCTOBER 31, 2000
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN (Y SHARES)*
---------------------------
<S> <C>
1 YEAR 5.93%
3 YEARS 7.04%
5 YEARS 9.56%
SINCE INCEPTION** 8.29%
*After all expenses, C Shares returned 8.09%*** for the period March 2,
1998 (inception) to October 31, 2000 and Class A shares returned -8.70%***
for the period March 11, 1999 (inception) to October 31, 2000
**April 4, 1994
***Not annualized
DATE FEI EAFE
---- --- ----
4/4/94 $10,000 $10,000
12/31/94 $ 9,896 $10,414
12/31/95 $11,047 $11,581
12/31/96 $12,805 $12,281
10/31/97 $13,767 $12,519
10/31/98 $14,571 $13,727
10/31/99 $15,942 $16,888
10/31/00 $16,887 $16,399
Past performance is not predictive of future performance.
<PAGE>
FIRST EAGLE FUND OF AMERICA
INVESTMENT PORTFOLIO
October 31, 2000
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK (93.24%)
CONSUMER DISCRETIONARY (22.25%)
519,296 AT&T Corp./Liberty Media
Group* $ 4,318,305 $ 9,347,328
184,500 Federal Department Stores,
Inc. 4,916,814 6,007,781
203,300 Fortune Brands Inc. 6,126,024 5,984,644
203,400 General Motors Corp. Cl `H'* 5,651,735 6,590,160
44,100 Harcourt General Inc. 1,606,761 2,471,805
324,800 Hilton Hotels, Corp. 3,373,422 3,085,600
219,200 International Game Technology* 6,152,539 8,028,200
445,500 Mandalay Resort Group* 9,285,391 9,271,969
526,200 Mattel Inc. 6,212,547 6,807,712
285,300 Reader's Digest Association
Inc. 8,404,353 10,466,944
343,900 Starwood Hotels & Resorts
Worldwide Inc. 10,855,228 10,188,038
10,200 TJX Companies, Inc. 209,460 277,950
156,000 Tricon Global Restaurants,
Inc.* 4,631,664 4,680,000
123,600 USA Networks, Inc.* 2,531,993 2,502,900
------------ ------------
74,276,236 85,711,031
FINANCIAL (12.91%)
205,300 Comerica Inc. 11,285,167 12,382,156
335,419 Fleet Boston Corp. 11,925,504 12,745,922
77,300 Hartford Financial Services
Group, Inc. 4,129,167 5,754,019
147,300 Household International Inc. 6,247,774 7,411,031
45,000 Mellon Financial Corp. 1,416,604 2,171,250
166,800 Moodys Corp. 3,529,781 4,388,925
111,000 Washington Mutual Inc. 4,397,193 4,884,000
------------ ------------
42,931,190 49,737,303
HEALTH CARE (15.37%)
79,100 Bausch & Lomb Inc. 3,882,492 3,050,294
310,600 Becton, Dickinson & Co. 8,432,851 10,405,100
133,700 Biogen Inc.*'D' 7,725,306 8,047,069
207,000 Genzyme Corp.*'D' 8,794,709 14,697,000
281,500 St. Jude Medical, Inc.*'D' 8,703,330 15,482,500
157,600 Tenet Healthcare Corp.* 4,214,122 6,195,650
120,900 Ventiv Health Inc.* 1,616,795 1,299,675
------------ ------------
43,369,605 59,177,288
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
------------------------------------------------------------------------
<S> <C> <C> <C>
INDUSTRIALS (23.43%)
187,700 American Standard Cos.* $ 7,981,994 $ 8,610,738
147,800 Cendant Corp.* 3,338,112 1,773,600
237,850 Dun & Bradstreet Corp.* 4,083,182 5,143,506
360,000 Equifax Inc. 11,176,799 12,420,000
8,200 First Data Corp. 308,485 411,025
368,800 General Dynamics Corp.'D' 21,606,593 26,392,250
498,000 Loral Space & Communications
Ltd.* 7,755,151 2,832,375
212,900 L-3 Communications*'D' 7,442,022 14,038,094
513,500 Thermo Electron Corp.* 11,509,178 14,891,500
185,300 Waste Management, Inc. 3,386,807 3,706,000
------------ ------------
78,588,323 90,219,088
INFORMATION TECHNOLOGY (17.33%)
58,800 Apple Computer Inc.* 1,092,075 1,150,275
203,300 Cabletron Systems Inc.*'D' 3,346,802 5,514,513
365,950 Ceridian Corp.'D' 6,958,429 9,148,750
576,400 Comdisco, Inc. 14,356,218 7,096,925
76,600 CommScope, Inc.* 1,849,564 1,938,937
21,400 Electronic Data Systems Corp. 981,137 1,004,462
229,200 Harris Corp. 6,242,152 7,262,775
108,900 Lexmark Intl Grp Inc. Cl `A'* 3,376,883 4,464,900
302,200 NCR Corp.* 12,058,822 13,032,375
226,200 Parametric Technology Corp.* 3,418,192 2,785,087
264,700 Storage Technology Corp.* 5,188,561 2,580,825
210,400 Sungard Data Systems Inc.*'D' 6,805,729 10,756,700
------------ ------------
65,674,564 66,736,524
MATERIALS (1.29%)
117,100 Ball Corp. 4,690,783 4,113,138
16,100 Bowater Inc. 728,543 871,412
------------ ------------
5,419,326 4,984,550
TELECOMMUNICATION SERVICES (0.66%)
66,500 Nextel Communications, Inc.* 2,126,225 2,556,094
------------ ------------
TOTAL COMMON STOCK 312,385,469 359,121,878
------------ ------------
PREFERRED STOCK (2.10%)
67,777 Assistive Technology Inc.
Ser. E-1*'DD' 883,921 883,921
51,966 Assistive Technology Inc.
Ser. E-2*'DD' 500,000 500,000
152,100 News Corp. Ltd. 3,783,885 5,504,119
1,200 Tidewater Holdings Inc.
Ser. A Conv.*'DD' 1,200,000 1,200,000
------------ ------------
TOTAL PREFERRED STOCK 6,367,806 8,088,040
------------ ------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
------------------------------------------------------------------------
<S> <C> <C> <C>
WARRANTS (0.00%)
9,873 Assistive Technology
Inc.*'DD' $ 382 $ 382
11,177 Assistive Technology Inc.
Ser. E-1*'DD' 0 0
------------ ------------
TOTAL WARRANTS 382 382
------------ ------------
OTHER INVESTMENTS (0.39%)
16.1616 Euro Outlet Malls, L.P.'DD' 0 1,500,000
------------ ------------
TOTAL INVESTMENTS $318,753,657 $368,710,300
------------ ------------
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
---------------------------------------------------------------------
<S> <C> <C> <C>
SHORT TERM INVESTMENTS (4.74%)
5,500,000 United States Treasury Bill
due 1/04/01 5,441,333 5,439,962
7,500,000 United States Treasury Bill
due 1/25/01 7,391,359 7,390,740
5,500,000 United States Treasury Bill
due 2/01/01 5,414,121 5,412,996
------------ ------------
TOTAL SHORT TERM INVESTMENTS 18,246,813 18,243,698
------------ ------------
------------ ------------
<CAPTION>
CONTRACTS
---------------------------------------------------------------------
<S> <C> <C> <C>
COVERED CALL OPTIONS WRITTEN (-2.49%)
700 Biogen Inc. @ $60
exp. Dec. 2000 (385,000)
300 Biogen Inc. @ $65
exp. Dec. 2000 (120,000)
1,000 Cabletron Systems Inc.
@ $25 exp. Dec. 2000 (400,000)
520 Ceridian Corp. @ $30
exp. Nov. 2000 (13,000)
1,488 General Dynamics Corp. @ $65
exp. Jan. 2001 (1,357,800)
2,200 General Dynamics Corp. @ $60
exp. Jan. 2001 (2,915,000)
2,070 Genzyme Corp. @ $65
exp. Nov. 2000 (1,591,313)
274 L-3 Communications @ $60
exp. Nov. 2000 (178,100)
506 L-3 Communications @ $65
exp. Dec. 2000 (202,400)
212 L-3 Communications @ $70
exp. Dec. 2000 (42,400)
1,020 St. Jude Medical Inc. @ $55
exp. Nov. 2000 (267,750)
1,112 Sungard Data Systems Inc.
@ $40 exp. Dec. 2000 (1,306,600)
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
MARKET
CONTRACTS COST VALUE
---------------------------------------------------------------------
<S> <C> <C> <C>
992 Sungard Data Corp. @ $45
exp. Jan. 2001 $ (818,400)
------------
TOTAL COVERED CALL OPTIONS WRITTEN
(PREMIUM $9,168,586) (9,597,763)
TOTAL INVESTMENT PORTFOLIO
(97.98%) $327,831,884** 377,356,235
------------
------------
Other assets in excess of
other liabilities
(2.02%) 7,785,153
------------
NET ASSETS (100.00%) $385,141,388
------------
------------
* Non-income producing security
** At October 31, 2000 cost is substantially identical
for both book and federal income tax purposes.
'D' At October 31, 2000, a portion of this security was
segregated to cover collateral requirements for
options.
'DD' Restricted security priced at fair value by the
Board of Directors. Represents ownership interest in a
security which has not been registered with the
Securities and Exchange Commission under the
Securities Act of 1933. Information concerning
each restricted security holding on October 31,
2000 is shown below:
</TABLE>
<TABLE>
<CAPTION>
Security Acquisition Date Cost
--------------------------------------------------------------
<S> <C> <C> <C>
Assistive Technology Inc.
Ser. E-1 10/3/95 $ 883,921
Assistive Technology Inc.
Ser. E-2 12/19/96 $ 500,000
Assistive Technology Inc.
Warrants 10/21/98 $ 382
Assistive Technology Inc.
Ser. E-1 Warrants 10/21/98 --
Euro Outlet Malls, L.P. 12/30/94 --
Tidewater Holdings Inc. Ser. A
Conv. Pfd. Stock 7/9/96 $1,200,000
</TABLE>
See Notes to Financial Statements.
<PAGE>
FIRST EAGLE INTERNATIONAL FUND
INVESTMENT PORTFOLIO
October 31, 2000
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
----------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCK (95.03%)
DENMARK (4.02%)
12,700 Vestas Wind Systems AS
(electrical equipment) $ 645,607 $ 687,016
18,000 Carlsberg AS (brewery) 736,704 752,329
----------- -----------
1,382,311 1,439,345
FINLAND (1.91%)
16,640 Nokia OYJ (telecommunications) 263,557 683,942
----------- -----------
FRANCE (23.47%)
21,050 Alcatel SA (communication
equipment) 878,432 1,282,907
4,898 Altran Technologies SA (it
consulting & services) 832,362 1,000,160
8,587 AXA (insurance) 708,402 1,135,482
5,958 Coface (insurance) 582,318 535,834
7,200 Casino Guichard Perrachon SA
(supermarkets) 735,197 628,003
4,396 Pinault Printemps SA
(department stores) 937,265 783,630
22,500 Societe Television Francaise 1
(television) 1,413,137 1,226,331
6,932 Suez Lyonnaise des Eaux SA
(utility distribution) 1,185,115 1,056,482
10,450 Vivendi SA (utility
distribution) 1,029,797 750,263
----------- -----------
8,302,025 8,399,092
GERMANY (15.75%)
4,226 Allianz AG (insurance) 1,442,610 1,431,247
27,972 Bayerische Motoren Werke AG
(automobiles) 835,156 925,177
12,600 Constantin Film AG
(broadcasting) 829,320 448,467
6,400 MLP AG (insurance) 827,092 865,276
31,840 ProSieben Sat.1 Media AG Pfd.
(television) 1,159,985 1,001,293
7,588 Siemens AG (industrial
conglomerate) 1,184,024 965,111
----------- -----------
6,278,187 5,636,571
HONG KONG (1.72%)
153,000 Citic Pacific Ltd. (industrial
conglomerate) 825,072 614,053
----------- -----------
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
----------------------------------------------------------------------
<S> <C> <C> <C>
ITALY (8.49%)
84,900 Class Editori SpA (publishing) $ 1,488,177 $ 1,194,620
69,275 Luxottica Group SpA ADR
(optical supplies) 819,396 1,000,158
64,370 Riunone Adriatica Di Sicurta
SpA (insurance) 705,360 844,088
----------- -----------
3,012,933 3,038,866
JAPAN (6.34%)
34 DDI Corp. (telecommunications) 173,171 159,434
36,000 Matsushita Electric Industrial
Co., Ltd. (electronics) 797,619 1,045,186
95,000 Nikko Securities Co. (banking) 602,397 819,608
27 Nippon Telegraph & Telephone
Corp. (telecommunications) 254,694 245,553
----------- -----------
1,827,881 2,269,781
NETHERLANDS (11.77%)
23,734 Hunter Douglas NV (household
durables) 688,028 679,989
16,280 IHC Caland NV (machinery) 823,621 717,582
13,311 ING Groep NV (diversified
financials) 915,606 913,021
11,090 Koninklijke Ahrend NV
(commercial services &
supplies) 121,188 128,315
28,088 Philips Electronics NV
(household durables) 626,718 1,102,579
13,426 Unilever NV (food products) 650,509 672,587
----------- -----------
3,825,670 4,214,073
RUSSIA (1.13%)
7,580 Lukoil Holdings ADR (oil &
gas) 426,212 404,772
----------- -----------
SPAIN (2.05%)
65,000 NH Hoteles, S.A. (hotels) 814,145 732,789
----------- -----------
SWEDEN (1.57%)
42,315 Ericsson LM Cl `B'
(telecommunications) 654,312 561,683
----------- -----------
SWITZERLAND (3.04%)
5,785 Charles Voegele Holdings
(textile & apparel) 1,032,722 1,087,451
----------- -----------
</TABLE>
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
SHARES COST VALUE
----------------------------------------------------------------------
<S> <C> <C> <C>
UNITED KINGDOM (11.89%)
27,627 Cable & Wireless Plc
(telecommunications) $ 355,629 $ 391,143
112,032 Premier Farnell Plc (internet
& catalog retail) 743,905 683,264
80,372 SmithKline Beecham Plc
(pharmaceuticals) 1,029,097 1,038,704
148,014 Vodafone Airtouch Plc
(telecommunications) 518,036 616,316
152,887 Williams Plc (security
devices) 864,661 732,625
59,030 WPP Group Plc (advertising) 288,543 792,887
----------- -----------
3,799,871 4,254,939
UNITED STATES (1.88%)
15,000 Stilwell Financial Inc.
(financial services) 701,688 672,188
----------- -----------
TOTAL COMMON STOCK 33,146,586 34,009,545
----------- -----------
<CAPTION>
PRINCIPAL
----------------------------------------------------------------------
<S> <C> <C> <C>
SHORT TERM INVESTMENTS (5.51%)
750,000 United States Treasury Bill
due 1/11/01 741,214 740,888
750,000 United States Treasury Bill
due 1/18/01 740,104 739,958
500,000 United States Treasury Bill
due 2/01/01 492,193 492,091
----------- -----------
TOTAL SHORT TERM INVESTMENTS 1,973,511 1,972,937
----------- -----------
TOTAL INVESTMENT PORTFOLIO
(100.54%) $35,120,097* 35,982,482
-----------
-----------
Liabilities in excess of
assets ( - 0.54%) (193,784)
-----------
NET ASSETS (100.00%) $35,788,698
-----------
-----------
* At October 31, 2000, cost is substantially identical
for both book and federal income tax purposes.
</TABLE>
See Notes to Financial Statements.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
<TABLE>
<CAPTION>
FIRST EAGLE FIRST EAGLE
FUND OF AMERICA INTERNATIONAL FUND
<S> <C> <C>
ASSETS:
Investments -- Cost $318,753,657 $33,146,586
Short-term investments -- Cost 18,246,813 1,973,511
Investments, at value 368,710,300 34,009,545
Short-term investments, at value 18,243,698 1,972,937
Cash 544,655 362,428
Dividends and interest receivable 153,353 60,579
Receivable for Fund shares sold 784,943 2,551
Receivable for investments sold 15,484,688 87,049
------------ -----------
TOTAL ASSETS 403,921,637 36,495,089
------------ -----------
LIABILITIES:
Options written at value** 9,597,763 --
Payable for investments purchased 8,415,246 548,561
Payable for Fund shares redeemed 199,346 18
Management fee payable 321,538 30,014
Accrued operating expenses 246,356 127,798
------------ -----------
TOTAL LIABILITIES 18,780,249 706,391
------------ -----------
NET ASSETS $385,141,388 $35,788,698
------------ -----------
------------ -----------
Net Assets were comprised of:
Par value of capital shares (note 6) 191,984 22,788
Capital paid in excess of par value
(note 6) 333,797,767 28,931,579
Net unrealized appreciation of
investments, written options and
foreign currency related transactions 49,524,351 857,487
Accumulated net realized gain on
investments, written options and
foreign currency related transactions 1,627,286 5,976,844
------------ -----------
NET ASSETS $385,141,388 $35,788,698
------------ -----------
------------ -----------
SHARES OUTSTANDING
Class Y 18,785,148 2,226,296
Class C 350,924 47,804
Class A 62,115 4,742
NET ASSET VALUE PER SHARE:
Class Y (and redemption price) $20.07 $15.71
Class C * $19.62 $15.35
Class A $19.98 $15.64
</TABLE>
* Redemption price is NAV of Class C shares reduced by a 1.00% CDSC if shares
are redeemed within the first year of purchase.
** Premiums received for First Eagle Fund of America were $9,168,586.
See Notes to Financial Statements.
<PAGE>
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
<TABLE>
<CAPTION>
FIRST EAGLE FIRST EAGLE
FUND OF AMERICA INTERNATIONAL FUND
<S> <C> <C>
INVESTMENT INCOME:
Dividend income $ 4,495,287 $ 408,325
Interest income 737,210 159,798
Miscellaneous Income 632,804 --
Less: Foreign withholding tax (5,171) (13,646)
----------- ----------
TOTAL INVESTMENT INCOME 5,860,130 554,477
----------- ----------
EXPENSES:
Management fee (note 2) 4,650,853 394,164
Services fee (note 2) 1,162,712 98,541
Transfer agent fees 312,105 45,982
Legal fees 110,423 74,612
Custodian fees (note 3) 99,139 72,376
Registration expenses 60,164 36,688
Audit fees 50,990 45,425
Accounting fees 77,829 49,198
Trustee fees 47,307 45,875
Printing expenses 14,076 1,047
Miscellaneous expenses 56,097 12,313
Distribution fees (note 2) 125,125 6,367
----------- ----------
TOTAL EXPENSES 6,766,820 882,588
----------- ----------
Less: Custody earnings credits (note
3) (3,145) (32,152)
----------- ----------
NET EXPENSES 6,763,675 850,436
----------- ----------
NET INVESTMENT LOSS (903,545) (295,959)
----------- ----------
REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS, WRITTEN OPTIONS AND FOREIGN
CURRENCY RELATED TRANSACTIONS:
Net Realized Gain/(Loss) from:
Investment transactions 3,424,499 6,277,859
Forward foreign currency contracts -- (2,691)
----------- ----------
NET REALIZED GAIN 3,424,499 6,275,168
----------- ----------
Change in Net Unrealized Appreciation of
Investments, Written Options and Foreign
Currency Related Transactions:
Beginning of year 24,984,200 4,651,494
End of year 49,524,351 857,487
----------- ----------
INCREASE/(DECREASE) IN NET UNREALIZED
APPRECIATION 24,540,151 (3,794,007)
----------- ----------
NET GAIN ON INVESTMENTS, WRITTEN OPTIONS
AND FOREIGN CURRENCY RELATED
TRANSACTIONS 27,964,650 2,481,161
----------- ----------
INCREASE IN NET ASSETS FROM OPERATIONS $27,061,105 $2,185,202
----------- ----------
----------- ----------
</TABLE>
See Notes to Financial Statements.
<PAGE>
FIRST EAGLE FUND OF AMERICA
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and October 31, 1999
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
OPERATIONS:
Net investment (loss)/income $ (903,545) $ 1,471,360
Net realized gain 3,424,499 82,107,831
Increase/(Decrease) in net unrealized appreciation 24,540,151 (37,261,549)
------------- ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 27,061,105 46,317,642
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- --
Net realized gain (40,736,792) (79,492,608)
------------- ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (40,736,792) (79,492,608)
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 141,679,026 256,276,010
Net asset value of shares issued for reinvestment of
capital gains 34,916,258 69,129,616
Cost of shares redeemed (335,207,899) (127,273,264)
------------- ------------
(DECREASE)/INCREASE IN NET ASSETS FROM FUND SHARE
TRANSACTIONS (158,612,615) 198,132,362
------------- ------------
(DECREASE)/INCREASE IN NET ASSETS (172,288,302) 164,957,396
NET ASSETS:
Beginning of year 557,429,690 392,472,294
------------- ------------
END OF YEAR $ 385,141,388 $557,429,690
------------- ------------
------------- ------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
FIRST EAGLE INTERNATIONAL FUND
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended October 31, 2000 and October 31, 1999
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
OPERATIONS:
Net investment loss $ (295,959) $ (288,694)
Net realized gain 6,275,168 3,513,921
(Decrease)/Increase in net unrealized appreciation (3,794,007) 4,062
------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 2,185,202 3,229,289
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- --
Net realized gain (3,094,098) (3,269,629)
------------ ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO SHAREHOLDERS (3,094,098) (3,269,629)
FUND SHARE TRANSACTIONS (NOTE 6):
Net proceeds from sale of shares 4,286,553 5,260,401
Net asset value of shares issued for reinvestment of
capital gains 2,565,949 2,737,672
Cost of shares redeemed (5,754,618) (10,888,194)
------------ ------------
INCREASE/(DECREASE) IN NET ASSETS FROM FUND SHARE
TRANSACTIONS 1,097,884 (2,890,121)
------------ ------------
INCREASE/(DECREASE) IN NET ASSETS 188,988 (2,930,461)
NET ASSETS:
Beginning of year 35,599,710 38,530,171
------------ ------------
END OF YEAR $ 35,788,698 $ 35,599,710
------------ ------------
------------ ------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
FIRST EAGLE FUNDS
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION AND ACCOUNTING POLICIES -- First Eagle Funds, a Delaware
business trust (the 'Trust'), is a non diversified open-end management
investment company registered under the Investment Company Act of 1940, as
amended. The Trust presently consists of two separate portfolios ('Series'):
First Eagle Fund of America and First Eagle International Fund (each
individually a 'Fund' or collectively the 'Funds'). Each Series has distinct
investment objectives and policies. A shareholder's interest is limited to the
Series in which she or he owns shares. Each Series offers Class Y, Class C, and
Class A shares (inception November 19, 1998). All classes of shares have
identical rights to earnings, assets, and voting privileges, except that each
class has its own distribution and/or service plan, and has exclusive voting
rights with respect to matters affecting only that class.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- Any security for which the primary market is on
an exchange is valued at the last sale price on such exchange on the day of
valuation or, if there was no sale on such day, the mean between the last bid
and asked prices quoted on such day. Equity securities listed on the NASDAQ
National Market System are valued at the last sale price or, if there was no
sale on such day, at the mean between the most recently quoted bid and asked
prices. Corporate bonds (other than convertible debt securities) and U.S.
Government Securities that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, are valued on the basis of valuations provided by a pricing
service which uses information with respect to transactions in bonds, quotations
from bond dealers, market transactions in comparable securities and various
relationships between securities in determining value. Other securities are
valued at the mean between the most recently quoted bid and asked prices. Short-
term debt instruments which mature in less than 60 days are valued at amortized
cost, unless the Board of Trustees determines that such valuation does not
represent fair value. Securities which are otherwise not readily marketable or
securities for which market quotations are not readily available are valued in
good faith at fair value in accordance with procedures adopted by the Trust's
Board of Trustees. A Valuation Committee of the Board of Trustees has been
established to determine the value of such securities after consultation with
the Trust's investment adviser.
<PAGE>
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains or losses
on security transactions are determined based on the specific identification
method. Discounts and premiums on purchases of investments are accreted and
amortized, respectively, as adjustments to interest income and cost of
securities. Dividend income is recorded on the ex-dividend date. Interest income
is recorded on the accrual basis.
OPTIONS: In order to produce incremental earnings or protect against changes in
the value of portfolio securities, a Fund may buy and sell put and call options,
write covered call options on portfolio securities and write cash-secured put
options.
A Fund generally purchases put options or writes covered call options to hedge
against adverse movements in the value of portfolio holdings. A Fund may also
use options for speculative purposes, although it does not employ options for
this purpose at the present time. A Fund will segregate assets to cover its
obligations under option contracts.
Options contracts are valued daily based upon the last sale price on the
principal exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. A Fund will realize a gain or loss upon the expiration
or closing of the option transaction. When an option is exercised, the proceeds
on the sales of a written call option, the purchase cost of a written put
option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
The risk in writing a call option is that a Fund gives up the opportunity for
profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that a Fund may incur a loss if
the market price of the security decreases and the option is exercised. The risk
of buying an option is that a Fund pays a premium whether or not the option is
exercised. A Fund also has the additional risk of not being able to enter into a
closing transaction if a liquid secondary market does not exist. A Fund may also
write over-the-counter options where the completion of the obligation is
dependent upon the credit standing of the counterparty.
FORWARD CURRENCY CONTRACTS: In connection with purchases and sales of securities
denominated in foreign currencies, a Fund may enter into forward currency
contracts. Additionally, a Fund may enter into such contracts to hedge certain
other foreign currency denominated investments. These contracts are recorded at
market value, and the related realized and unrealized foreign exchange gains and
losses
<PAGE>
are included in the statement of operations. A Fund will realize a gain or loss
upon the closing or settlement of the forward transaction. Such realized gains
or losses are included in the statement of operations. In the event that
counterparties fail to settle these currency contracts or the related foreign
security trades, a Fund could be exposed to foreign currency fluctuations.
C. FOREIGN CURRENCY TRANSLATION: The market values of securities which are not
traded in United States currency are recorded in the financial statements after
translation to U.S. dollars based on the applicable exchange rates at the end of
the period. The costs of such securities are translated at exchange rates
prevailing when acquired. Related dividends, interest and withholding taxes are
accrued at the rates of exchange prevailing on the respective dates of such
transactions.
The net assets of a Fund are presented at the foreign exchange rates and market
values at the close of the period. A Fund does not isolate that portion of gains
and losses on investments which is due to change in foreign exchange rates from
that which is due to changes in market prices of the equity securities.
D. FEDERAL INCOME TAX STATUS -- It is the Funds' policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to shareholders.
Accordingly, no federal income tax provision is required.
E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment
income, if any, and distribution of net realized gain from investment
transactions, if any, will be made annually. The Funds record dividends and
distributions to its shareholders on the record date.
F. ESTIMATES AND ASSUMPTIONS -- Estimates and assumptions are required to be
made regarding assets, liabilities and changes in net assets resulting from
operations when financial statements are prepared. Changes in economic
environment, financial markets and any other parameters used in determining
these estimates could cause results to differ from these amounts.
NOTE 2. INVESTMENT ADVISORY AGREEMENT AND SERVICES AGREEMENT -- Arnhold and S.
Bleichroeder Advisers, Inc. (the 'Adviser'), a wholly owned subsidiary of
Arnhold and S. Bleichroeder, Inc. ('ASB'), manages the Trust. For its services,
the Adviser receives, pursuant to an Investment Advisory Agreement between the
Trust and the Adviser (the 'Advisory Agreement') an annual advisory fee of 1.0%
of the average daily net assets of each Fund.
<PAGE>
ASB (the 'Distributor') serves as the distributor of the Trust's Class Y, Class
C, and Class A shares. The Distributor receives an annual services fee at the
annual rate of 0.25% of the Funds' average daily net assets, pursuant to a
Distribution and Services Agreement which was approved by the Board of Trustees,
to cover expenses incurred by ASB for providing shareholder liaison services,
including assistance with subscriptions, redemptions and other shareholder
questions.
Shareholders pay the distributor a contingent deferred sales charge ('CDSC') of
1.00% on Class C shares which applies if redemption occurs within the first year
of purchase. In addition, the Trust also pays a distribution fee (12b-1) with
respect to Class C shares and Class A shares calculated at the annual rate of
0.75% and 0.25% respectively, of the average daily net assets. For the year
ended October 31, 2000, total 12b-1 fees for Class C shares and Class A shares
were as follows:
<TABLE>
<CAPTION>
Class C Class A
------- -------
<S> <C> <C>
First Eagle Fund of America $122,087 $3,038
First Eagle International Fund $ 6,176 $ 191
</TABLE>
NOTE 3. CUSTODIAN FEES -- The Fund has entered into an expense offset agreement
with its custodian wherein it receives credit toward the reduction of custodian
fees whenever there are uninvested cash balances. For the year ended October 31,
2000 the portfolio's custodian fees and related offset were as follows:
<TABLE>
<CAPTION>
Custodian Fees Credits Earned
-------------- --------------
<S> <C> <C>
First Eagle Fund of America $99,139 $ 3,145
First Eagle International Fund $72,376 $32,152
</TABLE>
NOTE 4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES -- The aggregate
costs of purchases and proceeds from sales of investments (including maturities,
but excluding short-term investments), during the year ended October 31, 2000
were as follows:
<TABLE>
<CAPTION>
Purchases Sales
--------- -----
<S> <C> <C>
First Eagle Fund of America $253,830,331 $466,281,498
First Eagle International Fund $ 44,172,827 $ 42,921,423
</TABLE>
<PAGE>
For the year ended October 31, 2000, First Eagle Fund of America and First Eagle
International Fund had the following written options transactions:
<TABLE>
<CAPTION>
Number of Contracts Premium
------------------- -------
<S> <C> <C>
First Eagle Fund of America
Options outstanding at October
31, 1999 12,046 $ 5,104,916
Options written 77,032 44,576,624
Options exercised 10,686 7,370,680
Options expired/closed 65,998 33,142,274
------ -----------
Options outstanding at October
31, 2000 12,394 $ 9,168,586
------ -----------
------ -----------
First Eagle International Fund
Options outstanding at October
31, 1999 25 $ 75,235
Options written 25 137,420
Options exercised 25 137,420
Options expired/closed 25 75,235
------ -----------
Options outstanding at October
31, 2000 0 $ 0
------ -----------
------ -----------
</TABLE>
For the year ended October 31, 2000, the First Eagle Fund of America and First
Eagle International Fund paid brokerage commissions on securities transactions
of $1,426,556 and $178,598 of which $41,185 and $15,953 was paid to ASB,
respectively.
NOTE 5. FEDERAL INCOME TAXES -- During the year ended October 31, 2000, the
First Eagle Fund of America and First Eagle International Fund realized net
capital gains of $3,424,499 and $6,277,859 respectively. The United States
federal income tax basis of the Funds' investments at October 31, 2000 was
substantially the same as the basis for financial reporting purposes and
accordingly, the aggregate gross unrealized appreciation on investments was
$71,525,365 for the First Eagle Fund of America and $3,862,642 for the First
Eagle International Fund and the aggregate unrealized gross depreciation was
$22,001,014 and $3,005,155 respectively, resulting in net unrealized
appreciation for United States income tax purposes of $49,524,351 and $857,487
respectively.
NOTE 6. CAPITAL SHARES -- The Declaration of the Trust authorizes the issuance
of an unlimited number of shares of beneficial interest without par value. The
Trust has established Class Y, Class C, and Class A shares. Each share of a
class represents an identical interest in the portfolio and has the same rights,
except that each
<PAGE>
class bears certain expenses specifically related to the distribution of its
shares.
Transactions in shares of each portfolio were as follows:
<TABLE>
<CAPTION>
Year ended Year ended
October 31, 2000 October 31, 1999
---------------- ----------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
FIRST EAGLE FUND OF AMERICA CLASS Y
Shares sold 7,120,501 $ 139,620,630 10,506,742 $234,618,369
Shares redeemed (16,306,748) (319,315,046) (5,720,598) (126,601,217)
Shares issued on
reinvestment 1,764,711 33,493,785 3,223,043 67,570,333
----------- ------------- ---------- ------------
Net (Decrease)/
Increase (7,421,536) $(146,200,631) 8,009,187 $175,587,485
----------- ------------- ---------- ------------
----------- ------------- ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
Year ended Year ended
October 31, 2000 October 31, 1999
---------------- ----------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
FIRST EAGLE FUND OF AMERICA CLASS C
Shares sold 69,694 $ 1,328,071 902,526 $19,902,637
Shares redeemed (763,885) (14,674,238) (31,574) (671,996)
Shares issued on
reinvestment 73,583 1,375,169 69,078 1,476,797
-------- ------------ ------- -----------
Net (Decrease)/
Increase (620,608) $(11,970,998) 940,030 $20,707,438
-------- ------------ ------- -----------
-------- ------------ ------- -----------
</TABLE>
<TABLE>
<CAPTION>
For the period from
Year ended November 20, 1998 to
October 31, 2000 October 31, 1999
---------------- ----------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
FIRST EAGLE FUND OF AMERICA CLASS A
Shares sold 37,420 $ 730,325 77,985 $1,755,004
Shares redeemed (59,592) (1,218,615) (2) (51)
Shares issued on
reinvestment 2,498 47,304 3,809 82,486
------- ----------- ------ ----------
Net (Decrease)/Increase (19,674) $ (440,986) 81,792 $1,837,439
------- ----------- ------ ----------
------- ----------- ------ ----------
</TABLE>
<TABLE>
<CAPTION>
Year ended Year ended
October 31, 2000 October 31, 1999
---------------- ----------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
FIRST EAGLE INTERNATIONAL FUND CLASS Y
Shares sold 250,006 $ 4,180,093 301,060 $ 4,668,298
Shares redeemed (336,161) (5,639,246) (704,487) (10,755,409)
Shares issued on
reinvestment 163,961 2,544,669 175,851 2,716,066
-------- ----------- -------- -----------
Net Increase/(Decrease) 77,806 $ 1,085,516 (227,576) $(3,371,045)
-------- ----------- -------- -----------
-------- ----------- -------- -----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year ended Year ended
October 31, 2000 October 31, 1999
---------------- ----------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
FIRST EAGLE INTERNATIONAL FUND CLASS C
Shares sold 6,156 $ 101,052 34,641 $ 525,359
Shares redeemed (6,476) (114,992) (8,536) (132,763)
Shares issued on
reinvestment 1,393 21,280 1,409 21,606
------ --------- ------ ---------
Net Increase 1,073 $ 7,340 27,514 $ 414,202
------ --------- ------ ---------
------ --------- ------ ---------
</TABLE>
<TABLE>
<CAPTION>
For the period from
Year ended March 11, 1999 to
October 31, 2000 October 31, 1999
---------------- ----------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
FIRST EAGLE INTERNATIONAL FUND CLASS A
Shares sold 291 $5,408 4,475 $66,744
Shares redeemed (23) (380) (1) (22)
Shares issued on
reinvestment -- -- -- --
--- ------ ----- -------
Net Increase 268 $5,028 4,474 $66,722
--- ------ ----- -------
--- ------ ----- -------
</TABLE>
Of the 19,198,187 shares of common stock outstanding for First Eagle Fund of
America and 2,278,842 shares of common stock outstanding for First Eagle
International Fund at October 31, 2000 ASB owned 34,305 and 10,767 shares and
the ASB Profit Sharing Plan owned 514,008 and 247,348 shares respectively. The
directors and officers of the Trust owned approximately 1,130,746 shares of
First Eagle Fund of America and 355,366 shares of the First Eagle International
Fund at October 31, 2000.
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT EACH YEAR
FUND OF AMERICA CLASS Y SHARES
<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31,
----------------------------------------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $20.46 $21.53 $20.59 $17.97 $16.28
INCOME FROM INVESTMENT OPERATION
Net investment (loss)/income (0.03) 0.07 (0.08) (0.06) (0.04)
Net realized and unrealized gain 1.18 2.45 3.62 5.31 4.08
------ ------ ------ ------ ------
Total from investment operations 1.15 2.52 3.54 5.25 4.04
------ ------ ------ ------ ------
LESS DISTRIBUTIONS FROM:
Net investment income -- -- -- -- --
Net realized gain (1.54) (3.59) (2.60) (2.63) (2.35)
------ ------ ------ ------ ------
Total distributions (1.54) (3.59) (2.60) (2.63) (2.35)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR $20.07 $20.46 $21.53 $20.59 $17.97
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total Return 6.1 % 12.1 % 19.2 % 31.0 % 27.1 %
Net assets, end of year $377,015,833 $536,157,945 $391,797,350 $254,438,325 $163,402,847
RATIOS TO AVERAGE NET ASSETS:
Expenses(1) 1.4 % 1.4 % 1.5 % 1.7 % 1.8 %
Net investment (loss)/income (0.2)% 0.3 % (0.4)% (0.3)% (0.2)%
Portfolio turnover rate 55 % 89 % 83 % 98 % 93 %
</TABLE>
(1) For the years ended October 31, 2000 and 1999, the ratio of expenses to
average net assets without the effect of earnings credits are 1.4% and 1.4%,
respectively.
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT EACH YEAR
FUND OF AMERICA CLASS C SHARES
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
OCTOBER 31, MARCH 2, 1998*
---------------------- THROUGH OCT. 31,
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $20.18 $21.43 $21.07
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.17) (0.20) (0.16)
Net realized and unrealized gain 1.15 2.54 0.52
------ ------ ------
Total from investment operations 0.98 2.34 0.36
------ ------ ------
LESS DISTRIBUTIONS FROM:
Net investment income -- -- --
Net realized gain (1.54) (3.59) --
------ ------ ------
Total distributions (1.54) (3.59) --
------ ------ ------
NET ASSET VALUE, END OF YEAR $19.62 $20.18 $21.43
------ ------ ------
------ ------ ------
Total Return 5.2 % 11.2 % 1.7 % 'DD'
Net assets, end of year $6,884,260 $19,601,461 $674,944
RATIOS TO AVERAGE NET ASSETS:
Expenses(1) 2.2 % 2.1 % 2.2 %'D'
Net investment loss (0.9) (0.9) (1.1)%'D'
Portfolio turnover rate 55 % 89 % 83 %
</TABLE>
* Commencement of investment operations
'D' Annualized
'DD' Total return not annualized
(1) For the years ended October 31, 2000 and 1999, the ratio of expenses to
average net assets without the effect of earnings credits are 2.2% and
2.1%, respectively.
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT EACH YEAR:
FUND OF AMERICA CLASS A SHARES
<TABLE>
<CAPTION>
FOR THE YEAR ENDED NOVEMBER 20,1998*
OCTOBER 31, THROUGH OCTOBER 31,
2000 1999
---- ----
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ 20.42 $ 20.33
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.08) (0.09)
Net realized and unrealized gain 1.18 1.93
----------- ----------
Total from investment operations 1.10 1.84
----------- ----------
LESS DISTRIBUTIONS FROM:
Net investment income -- --
Net realized gain (1.54) (1.75)
----------- ----------
Total distributions (1.54) (1.75)
----------- ----------
NET ASSET VALUE, END OF YEAR $ 19.98 $ 20.42
----------- ----------
----------- ----------
Total Return 5.8% 8.6 %'DD'
Net assets, end of year $ 1,241,295 $1,670,284
RATIOS TO AVERAGE NET ASSETS:
Expenses(1) 1.7% 1.6 %'D'
Net investment loss (0.4) (0.4)%'D'
Portfolio turnover rate 55% 89 %
</TABLE>
* Commencement of investment operations
'D' Annualized
'DD' Total return not annualized
(1) For the years ended October 31, 2000 and the period ended 1999, the
ratio of expenses to average net assets without the effect of earnings
credits are 1.7% and 1.6%'D', respectively.
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT EACH YEAR:
INTERNATIONAL FUND CLASS Y
<TABLE>
<CAPTION>
FOR THE
PERIOD
FROM
JANUARY 1, FOR THE YEAR
FOR THE YEAR ENDED OCTOBER 31, THRU ENDED
--------------------------------- OCTOBER 31, DECEMBER 31,
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $16.18 $16.09 $16.17 $15.04 $13.38
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.13) (0.17) (0.06) (0.12) (0.16)
Net realized and unrealized gain 1.07 1.60 0.95 1.25 2.29
------ ------ ------ ------ ------
Total from investment operations 0.94 1.43 0.89 1.13 2.13
------ ------ ------ ------ ------
LESS DISTRIBUTIONS FROM:
Net investment income -- -- -- -- --
Net realized gain (1.41) (1.34) (0.97) -- (0.47)
------ ------ ------ ------ ------
Total distributions (1.41) (1.34) (0.97) -- (0.47)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR $15.71 $16.18 $16.09 $16.17 $15.04
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total Return 5.9 % 9.4 % 5.8 % 7.5 %'DD' 15.9 %
Net assets, end of year $34,980,660 $34,781,555 $38,222,433 $36,320,210 $32,105,280
RATIOS TO AVERAGE NET ASSETS:
Expenses(1) 2.1 % 2.4 % 2.4 % 2.3 %'D' 2.9 %
Net investment loss (0.7)% (1.1)% (0.5)% (1.0)%'D' (1.1)%
Portfolio turnover rate 120 % 87 % 85 % 54 % 101 %
</TABLE>
'D' Annualized
'DD' Total return not annualized
(1) For the years ended October 31, 2000 and 1999, the ratio of expenses to
average net assets without the effect of earnings credits are 2.2% and
2.4%, respectively.
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT EACH YEAR:
INTERNATIONAL FUND CLASS C
<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31, MARCH 2, 1998
-------------------------------- THROUGH OCTOBER 31,
2000 1999 1998*
---- ---- -----
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ 15.95 $ 16.01 $ 16.90
INCOME FROM INVESTMENT OPERATIONS
Net investment (loss)/income (0.25) (0.29) 0.84
Net realized and unrealized
gain/(loss) 1.06 1.57 (1.73)
-------- -------- --------
Total from investment operations 0.81 1.28 (0.89)
-------- -------- --------
LESS DISTRIBUTIONS FROM:
Net investment income -- -- --
Net realized gain (1.41) (1.34) --
-------- -------- --------
Total distributions (1.41) (1.34) --
-------- -------- --------
NET ASSET VALUE, END OF YEAR $ 15.35 $ 15.95 $ 16.01
-------- -------- --------
-------- -------- --------
Total Return 5.1 % 8.4 % (5.3)'DD'
Net assets, end of year $733,877 $745,850 $307,738
RATIOS TO AVERAGE NET ASSETS:
Expenses (1) 2.9 % 3.2 % 2.9 %'D'
Net investment (loss)/income (1.5)% (1.9)% 7.0 %'D'
Portfolio turnover rate 120 % 87 % 85 %
</TABLE>
* Commencement of investment operations
'D' Annualized
'DD' Total return not annualized
(1) For the years ended October 31, 2000 and 1999, the ratio of expenses to
average net assets without the effect of earnings credits are 3.0% and
3.1%, respectively.
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT EACH YEAR:
INTERNATIONAL FUND CLASS A
<TABLE>
<CAPTION>
FOR THE MARCH 11, 1999
YEAR ENDED THROUGH
OCTOBER 31, OCTOBER 31,
2000 1999*
---- -----
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ 16.15 $ 15.06
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.17) (0.15)
Net realized and unrealized gain 1.07 1.24
-------- --------
Total from investment operations 0.90 1.09
-------- --------
LESS DISTRIBUTIONS FROM:
Net investment income -- --
Net realized gain (1.41) --
-------- --------
Total distributions (1.41) --
-------- --------
NET ASSET VALUE, END OF YEAR $ 15.64 $ 16.15
-------- --------
-------- --------
Total Return 5.7 % 7.2 %'DD'
Net assets, end of year $ 74,161 $ 72,305
RATIOS TO AVERAGE NET ASSETS:
Expenses (1) 2.4 % 2.7 %'D'
Net investment loss (1.0)% (1.6)'D'
Portfolio turnover rate 120 % 87 %
</TABLE>
* Commencement of investment operations.
'D' Annualized.
'DD' Total return not annualized.
(1) For the years ended October 31, 2000 and the period ended 1999, the
ratio of expenses to average net assets without the effect of earnings
credits are 2.5% and 2.7%'D', respectively.
<PAGE>
The Shareholders and Board of Trustees of
First Eagle Funds:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of First Eagle Fund of America and First Eagle
International Fund as of October 31, 2000, the related statements of operations
for the year then ended, the statements of changes in net assets for each of the
years in the two year period then ended, and the financial highlights for each
of the years in the five year period then ended with respect to First Eagle Fund
of America and for each of the years in the three year period then ended, the
period from January 1, 1997 to October 31, 1997 and the year then ended
December 31, 1996 with respect to First Eagle International Fund. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2000, by correspondence with the custodian.
As to securities purchased or sold but not yet received or delivered we
performed other alternative auditing procedures. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material aspects, the financial positions of
First Eagle Fund of America, and First Eagle International Fund as of
October 31, 2000, the results of their operations for the year then ended, the
changes in their net assets for each of the years in the two year period then
ended and the financial highlights for each of the years in the five year period
then ended with respect to First Eagle Fund of America, and for each of the
years in the three year period then ended, the period from January 1, 1997 to
October 31, 1997 and the year ended December 31, 1996 with respect to First
Eagle International Fund, in conformity with accounting principles generally
accepted in the United States of America.
KPMG LLP
New York, New York
December 19, 2000
<PAGE>
FIRST EAGLE FUNDS
TAX INFORMATION
FISCAL YEAR ENDED OCTOBER 31, 2000
(Unaudited)
The following tax information represents the designation of various tax
attributes relating to the fiscal year ended October 31, 2000:
CAPITAL GAINS DISTRIBUTIONS
Capital gains distributions paid to shareholders by the Funds during the fiscal
year ended October 31, 2000, whether taken in shares or in cash, were designated
as follows:
<TABLE>
<S> <C>
First Eagle Fund of America 40,586,046
First Eagle International Fund $ 3,062,018
</TABLE>
The above figures may differ from those cited elsewhere in the report due to
differences in the calculations of income and capital gains for Securities and
Exchange Commission (financial reporting) purposes and Internal Revenue Service
(tax) purposes.
<PAGE>
FIRST EAGLE FUNDS
1345 AVENUE OF THE AMERICAS
NEW YORK, NY 10105-4300
TOLL FREE (800) 451-3623
TRANSFER AGENT FAX: (614) 470-8702
WEBSITE: WWW.FIRSTEAGLEFUNDS.COM
TRUSTEES
JOHN P. ARNHOLD
CANDACE K. BEINECKE
EDWIN J. EHRLICH
K. GEORG GABRIEL
ROBERT J. GELLERT
JAMES E. JORDAN
MICHAEL M. KELLEN, Vice Chairman of the Board
WILLIAM M. KELLY
STANFORD S. WARSHAWSKY, Chairman of the Board
OFFICERS
JOHN P. ARNHOLD, Co-President
HAROLD J. LEVY, Co-President
DAVID L. COHEN, Senior Vice President
ARTHUR F. LERNER, Senior Vice President
ROBERT MILLER, Treasurer
ROBERT BRUNO, Vice President and Secretary
TRACY LA POINTE SALTWICK, Vice President
EDWIN OLSEN, Vice President
ANDREW DeCURTIS, Vice President
CARI LEVINE, Asst. Treasurer
STEFANIE SPRITZLER, Asst. Treasurer
SUZAN J. AFIFI, Asst. Secretary
INVESTMENT ADVISER
ARNHOLD AND S. BLEICHROEDER ADVISERS, INC.
1345 Avenue of the Americas
New York, NY 10105
CUSTODIAN
THE BANK OF NEW YORK
48 Wall Street
New York, NY 10005
TRANSFER AGENT
BISYS FUND SERVICES, INC.
3435 Stelzer Road
Columbus, OH 43219
LEGAL COUNSEL
SHEARMAN & STERLING
599 Lexington Avenue
New York, NY 10022
INDEPENDENT AUDITORS
KPMG LLP
757 Third Avenue
New York, NY 10017
This report is not authorized for distribution to prospective investors unless
accompanied by a current prospectus and the most recent calendar quarter
standardized performance information.
STATEMENT OF DIFFERENCES
The dagger symbol shall be expressed as.....................................'D'
The double dagger symbol shall be expressed as.............................'DD'
