Dear Shareholders,
Enclosed please find the Annual Report for your Blanchard Precious Metals
Fund for the fiscal year ending April 30, 1995. Morningstar has ranked the Fund
8th out of the 26 funds in its precious metals category, based on total
reinvested performance, for the 5 years ending 4/30/95.
Naturally, past performance is no guarantee of future performance. As with
all mutual funds, principal value and return will vary with market conditions so
that shares, when redeemed, may be worth more or less than their original cost.
The Year In Review
We started the year fully invested, but with almost one third of the
portfolio in gold and silver bullion _ an unusual asset mix for the fund. This
positioning reflected our view that a more defensive stance was warranted while
the U.S. Federal Reserve was raising interest rates. With the likelihood that
gold might be stuck in a trad ing range below $400 for some months, it seemed
quite likely that bullion would outperform gold mining shares. This proved to be
the case as gold shares grew increasingly out of favor as the year progressed.
For the past year, gold has essentially marked time by swinging back and
forth between the $370 and $400 levels. If an interest rate hike was
anticipated, gold would move lower in advance of the hike. After the rate change
occurred, gold would rally back towards the top of the trading range until
convictions grew that rates would be raised again. All in all, a difficult
environment for gold share investors.
In 1995, a new element was added to the gold market dynamics _ a rapidly
devaluing U.S. dollar. Many investors were confused and disappointed by the
failure of gold to soar during this period. This is understandable because, on
the surface, a dollar devaluation is bullish for gold. However, the linkage is
often quite weak. Clearly, this was one of those times, as the value of gold
priced in non-dollar terms fell quite sharply. The sober conclusion is that the
gold market viewed the outcome of the dollar crisis as
(over, please)
The following information was represented as a line graph
- --------------------------------------------------------------------------------
The Value of a $10,000 Investment in the
Blanchard Precious Metals Fund
from inception 6/23/88 through 4/30/95 as compared to the
Toronto Stock Exchange Gold & Silver Index for the same period
-----------------------------------
Avg. Annual Returns through 4/30/95
Blanchard Precious Metals Fund*
-----------------------------------
1 year -4.39%
-----------------------------------
5 year 5.79%
-----------------------------------
since inception 0.87%
-----------------------------------
<TABLE>
<CAPTION>
FYE 4/30/89 FYE 4/30/90 FYE 4/30/91 FYE 4/30/92 FYE 4/30/93 FYE 4/30/94 FYE 4/30/95
<S> <C> <C> <C> <C> <C> <C> <C>
RMF -10.20% -10.90% -16.00% -4.70% 35.50% 27.80% -4.39%
TSE G&S IDX -16.19% 8.65% -17.22% -11.28% 74.98% 24.82% 4.11%
$9,925 $8,913 $7,941 $6,671 $6,357 $8,614 $11,008 $10,525
$10,000 $8,381 $9,106 $7,538 $6,688 $11,702 $14,606 $15,207
</TABLE>
Blanchard Toronto Stock
Precious Metals Exchange Gold &
Fund* Silver Index (D)
*The average annual returns quoted above do not reflect the deduction of the
account opening fee and assume reinvestment of distributions. If fee was
reflected, returns would be lower. Total return includes changes in principal
value. Average annual return is total return annualized and compounded. Past
performance is no guarantee of future results.
(D)Source: The Toronto Stock Exchange Gold & Silver Index is an unmanaged index
of the stock performance of companies engaged in gold and silver mining
activities.
^Reflects the deduction of the one-time-only $75 account opening fee.
This chart is for comparative purposes only and is not intended to reflect
future performance of the index or the BPMF.
- --------------------------------------------------------------------------------
<PAGE>
deflationary. Certainly, for exporting nations like Germany and Japan, the
strong rise in their currencies is deflationary. For the U.S., dollar weakness
is another inflationary strain that could prompt the Federal Reserve to tighten
monetary policy when it otherwise wouldn't.
A Look Ahead
Fortunately, there have recently been two important changes in the global
investment scene which underpin the bullish commodity fundamentals for gold and
which alleviate the deflationary pressure. First, the central banks of Germany
and Japan have cut domestic interest rates. Secondly, U.S. monetary policy has
shifted into neutral from the steady tightening experienced in 1994. In fact,
there are some who argue that the U.S. should now cut rates in response to an
obvious softening in the economy. We believe gold would shoot through the $400
level decisively if this pleasant scenario were to unfold. We note that gold
rose from the $381 level to the $400 level in just two days after the German
central bank cut rates in late March!
The commodity supply-demand picture for gold continues to remain quite
bullish. On the supply side, global gold production is now in decline for the
first time in twenty years. Moreover, labor productivity problems in South
Africa virtually ensure that global output will contract again in 1995. South
African gold output is now at the lowest level since 1958. Last year's
production was 584 tonnes, and we look for a further slide to about 540 tonnes
in 1995.
Demand in 1994 was steady at near-record levels, and only huge disinvestment
of about 500,000 ounces per month kept the price from rising. With physical
demand now accelerating sharply outside of North America, we estimate that net
disinvestment of about one million ounces per month is required to prevent gold
from rising. How likely is this to continue? Given the increased volatility in
currency markets and the more favorable monetary conditions, we think it much
less likely that investors will be willing to part with their gold below the
$400 level. From this perspective, the next upleg in the bull market in gold may
lie just ahead of us!
In anticipation of improving gold prices, the Fund's portfolio is once again
in an aggressive posture. A 5% weighting in silver is our only bullion position,
and cash levels are being kept near 3% while 92% of the portfolio is invested in
gold mining equities. We have also increased our exposure to junior producers,
favoring those companies which are already in production, yet have a number of
years of solid growth ahead of them.
Sincerely,
PC:ml Peter C. Cavelti
President
Cavelti Capital Management
Portfolio Manager of the Blanchard Precious Metals Fund
Distributed by Sheffield Investments, Inc. (1551) 01ARSL0695
<PAGE>
BLANCHARD PRECIOUS METALS FUND, INC.-PORTFOLIO OF INVESTMENTS
April 30, 1995
(Left Column)
Shares Value
------ -----
COMMON STOCKS (83.12%)
METAL MINING SECURITIES (83.12%)
AUSTRALIA (5.75%)
*Great Central Mines .............. 150,000 $ 316,615
Newcrest Mining Ltd. ............. 500,000 2,139,878
*Saint Barbara Mines .............. 1,575,000 1,318,318
*Valdora Minerals ................. 2,800,000 550,254
-----------
TOTAL AUSTRALIA 4,325,065
-----------
CANADA (40.47%)
Barrick Gold Corp. ............... 140,000 3,397,683
*Dayton Mining Corp. .............. 505,000 1,559,846
(DD)Franco Nevada Mining Ltd. ........ 8,000 400,074
Franco Nevada Mining Ltd. ........ 40,200 2,010,369
*Golden Knight Resources, Inc. .... 86,400 571,870
*Great Lakes Minerals, Inc. ....... 500,000 588,343
*Pegasus Gold, Inc. ............... 252,300 3,107,941
Placer Dome, Inc. ................ 190,000 4,523,810
*Prime Resources Group, Inc. ...... 494,700 3,410,783
*TVX Gold, Inc. ................... 1,500,000 10,893,547
-----------
TOTAL CANADA 30,464,266
-----------
SOUTH AFRICA (10.10%)
(D)Ashanti Goldfields (ADR) ......... 125,000 3,125,000
Deelkraal Gold Mining Co. Ltd.
(ADR) .......................... 138,300 131,385
Free State Consolidated
Gold Mines Ltd. (ADR) ............ 120,000 1,425,000
Vaal Reef Exploration (ADR) ...... 477,000 2,921,625
-----------
TOTAL SOUTH AFRICA ........... 7,603,010
-----------
UNITED STATES (26.80%)
*Atlas Corp. (b) ................. 455,000 830,375
*Canyon Resources Corp. .......... 875,000 1,804,688
*Greenstone Resources Ltd. ....... 1,293,100 1,737,603
Homestake Mining ................ 195,800 3,304,125
*Kinross Gold Corp. .............. 600,000 3,600,000
Newmont Mining Corp. ............ 70,000 2,931,250
*Santa Fe Pacific Gold Corp. ..... 473,000 5,971,625
-----------
TOTAL UNITED STATES .......... 20,179,666
-----------
(Right Column)
Value
-----
TOTAL METAL MINING
SECURITIES ................... $62,572,007
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST
$68,453,952) ................. 62,572,007
-----------
BULLION (3.04%) Ounces
------
*Silver ............................ 400,000 2,288,800
-----------
TOTAL BULLION
(IDENTIFIED COST
$2,148,000) .................. 2,288,800
-----------
WARRANTS (1.56%) Warrants
--------
(DD)*Triton Mining Corp. Warrants
(expire 10/27/95) .......... 439,000 1,178,415
-----------
TOTAL WARRANTS
(IDENTIFIED COST
$890,006) ................... 1,178,415
-----------
Principal
---------
SHORT-TERM SECURITIES (13.23%)
GOVERNMENT OBLIGATION (12.22%)
U.S. Treasury Bill 5.75%,
5/4/95 ...................... 9,200,000 9,195,754
COMMERCIAL PAPER (1.01%)
American Express Credit Corp.
5.70%, 5/1/95 ............... 760,000 760,000
-----------
TOTAL SHORT-TERM
SECURITIES
(IDENTIFIED COST
$9,955,754) ................. 9,955,754
-----------
TOTAL INVESTMENTS
(IDENTIFIED COST
$81,447,712) (a)
(100.95%) ................... 75,994,976
LIABILITIES IN EXCESS OF
CASH AND OTHER
ASSETS
(-.95%) ..................... (713,115)
-----------
NET ASSETS (100%) ........... $75,281,861
===========
*Non-income producing.
(D)Registered under SEC rule 144a, resale restricted as to qualified
institutional buyers; represents 4.1% of net assets.
(DD)The following securities are restricted:
Security Acquisition Cost Date Acquired % of Net Assets
-------- ---------------- ------------- ---------------
Franco Nevada Mining Ltd. $ 93,586 November 1991 0.53
Triton Mining Corp. Warrants $890,007 October 1994 1.57
(a)The aggregate cost for federal income tax purposes is $81,572,091;
the gross unrealized appreciation is $3,908,323 and the gross unrealized
depreciation is $9,485,438; resulting in net unrealized depreciation of
$5,577,115. (b) Security is a unit consisting of one share of common stock
and half a warrant.
See notes to financial statements.
3
<PAGE>
BLANCHARD PRECIOUS METALS FUND, INC.
(Left Column)
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1995
Assets:
Investments in securities, at value
(Identified Cost $79,299,712) (note 1) ... $73,706,176
Investment in bullion, at value
(Identified Cost $2,148,000) ............. 2,288,800
Cash ....................................... 73,396
Receivables for:
Investments sold ......................... 1,916,605
Capital stock sold ....................... 295,703
Interest and Dividends ................... 10,151
Total assets ................ 78,290,831
Liabilities:
Payables for:
Investments purchased .................... 1,488,195
Capital stock repurchased ................ 1,397,636
Accrued expenses and other liabilities ... 123,139
Total liabilities ........... 3,008,970
Net assets .................. $75,281,861
Net assets are comprised of:
Paid in capital (unlimited authorized
shares of capital stock, $.001 par value,
10,570,288 shares outstanding) ............. $83,303,714
Accumulated distributions in excess of realized
gain-net ..................................... (2,402,669)
Accumulated investment loss-net .............. (166,448)
Unrealized net depreciation of investments ... (5,452,736)
Net assets ................................... $75,281,861
Net asset value per share .................... $7.12
(Right Column)
STATEMENT OF OPERATIONS
For the Year Ended April 30, 1995
Investment Income:
Dividends (net of w/h taxes of $25,242) ..... $ 480,104
Interest .................................... 280,575
-----------
Total income ................. 760,679
-----------
Expenses:
Investment management fee (note 2) .......... 756,766
Plan of distribution fee (note 3) ........... 567,575
Transfer agent fees ......................... 186,770
Directors' fees, retirement plan curtailment
and other expenses (note 5) ............... 91,330
Accounting fees ............................. 78,900
Professional fees ........................... 72,297
Registration fees ........................... 52,274
Custodian fees .............................. 37,000
Shareholder reports and notices ............. 34,767
Other ....................................... 4,095
-----------
Total expenses ............... 1,881,774
-----------
Investment loss-net .......... (1,121,095)
-----------
Realized and unrealized gain
(loss)-net (note 1):
Realized gain (loss) on:
Investments in securities,
net ........................ 401,623
Bullion transactions-net ......... (140,613)
Foreign exchange
transactions-net ............... (6,934) 254,076
-------
Change in unrealized appreciation or
depreciation on investments-net ........... (3,793,965)
-----------
Net realized and unrealized gain (loss) ..... (3,539,889)
-----------
Net decrease in net assets resulting from
operations ................................ $(4,660,984)
===========
See notes to financial statements.
4
<PAGE>
BLANCHARD PRECIOUS METALS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the For the
Year Ended Year Ended
April 30, 1995 April 30, 1994
-------------- --------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Investment loss-net .............................................. $(1,121,095) $(726,850)
Realized gain-net ................................................ 254,076 15,050,535
Change in unrealized appreciation (depreciation)-net ............ (3,793,965) (4,623,669)
----------- ---------
Net increase (decrease) in net assets resulting from operations .. (4,660,984) 9,700,016
----------- ---------
Dividends and distributions to shareholders from:
Realized gains-net ............................................... (254,076) -
Distribution in excess of realized gains-net ..................... (9,876,340) -
Tax return of capital ............................................ (894,701) -
----------- ---------
(11,025,117) -
----------- ---------
Transactions in capital stock-net increase (note 6) .................. 22,875,091 25,755,918
----------- ---------
Net increase in net assets ....................................... 7,188,990 35,455,934
Net assets:
Beginning of year .................................................. 68,092,871 32,636,937
----------- ---------
End of year (including accumulated investment loss-net of $166,448
and $7,356, respectively.) ....................................... $75,281,861 $68,092,871
=========== ===========
</TABLE>
See notes to financial statements.
5
<PAGE>
BLANCHARD PRECIOUS METALS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 1995
NOTE 1 - Organization and Accounting Policies:
Blanchard Precious Metals Fund, Inc. (the "Fund") is a corporation under the
laws of the State of Maryland. The Fund is a registered, open-end
non-diversified management investment company under the Investment Company Act
of 1940 (the "Act"). The Fund had no operations before June 22, 1988 other than
the sale of 12,500 shares of capital stock for $100,000 to eight parties who are
also shareholders or affiliates of shareholders of Sheffield Management Company
(the "Manager").
The following is a summary of the significant accounting policies followed
by the Fund:
A. Valuation of Investments-Portfolio securities traded on domestic or
foreign exchanges are valued at the 4 PM EST price on that date, or if no sale
is made on that day, at the closing bid price (or the mean price in cases where
a mean is reported instead of the closing bid). In cases where a security is
traded on more than one exchange, it is valued at the quotation on the exchange
determined to be the primary market for such security by the Directors or the
Manager. All other portfolio securities for which over-the-counter market
quotations are readily available are valued at the latest available bid prices.
Short-term debt securities which mature in 60 days or less are valued at
amortized cost if their original maturity was 60 days or less. Short-term debt
securities having a maturity date of more than sixty days at the time of
purchase are valued on a mark to market basis until sixty days prior to maturity
and thereafter at amortized cost based on their value on the 61st day. Bullion
investments are valued at the closing spot price based on dealer or exchange
quotations. All other securities and other assets of the Fund are valued at fair
value as determined in good faith by the Directors. Foreign currency exchange
rates are determined when such rates are made available to the Fund at times
prior to the close of the New York Stock Exchange.
There are certain risks involved in concentrating in specific industries
such as mining that are in addition to the usual risks inherent in domestic
instruments. These risks include those resulting from future adverse political
and economic developments and possible imposition of foreign governmental laws
or restrictions.
B. Accounting for Investments-Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined on the identified cost method.
Dividend income and other distributions are recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon as
the Fund is informed after the ex-dividend date. Interest income is accrued
daily. Premiums or discounts on debt securities are amortized or accreted as
adjustments to interest income over the lives of such securities.
C. Foreign Currency Translation-The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities, forward currency contracts, and other assets and
liabilities denominated in foreign currencies are translated at the exchange
rates at the end of the period; and (2) purchases, sales, income and expenses
are translated at the rates of exchange prevailing on the respective dates of
such transactions. The Fund does not separately identify that portion of the
results of operations of the Fund that arise as a result of changes in the
exchange rates from the fluctuations that arise from changes in market prices of
equity investments during the year.
The Fund may enter into forward currency contracts to protect the U.S.
dollar value of securities and related receivables and payables against changes
in future foreign exchange rates. Forward currency contracts are valued based
upon the current forward rates. Fluctuations in the value of such contracts are
recorded as unrealized gains or losses; realized gains or losses include net
gains or losses on contracts which have settled. Risks may arise as a result of
the potential inability of the counterparties to meet the terms of their
contracts. At April 30, 1995, the Fund had no outstanding forward currency
contracts.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of domestic origin
as a result of, among other factors, the level of governmental supervision and
regulation of foreign securities markets and the possibility of political or
economic instability.
D. Federal Income Tax Status-It is the Fund's 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 its shareholders.
Accordingly, no federal income tax provision is required.
6
<PAGE>
BLANCHARD PRECIOUS METALS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
E. Dividends and Distributions to Shareholders-The Fund records dividends
and distributions to its shareholders on the record date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains or net investment income. To the extent they exceed net
investment income and net realized capital gains for tax purposes, they are
reported as distributions of paid-in capital.
F. Organizational Expenses-The Manager paid organizational expenses of the
Fund incurred prior to the public offering of its shares amounting to
approximately $179,000. The Fund has reimbursed the Manager for such expenses.
The Fund has deferred and amortized such expenses over five years from the date
of commencement of the Fund's operations.
G. Other-Certain expenses for the Blanchard Group of Funds are allocated
among the Funds based upon their relative average net assets.
NOTE 2 - Investment Management Agreement:
Pursuant to a management agreement (the "Agreement"), the Manager manages
the Fund and the investment of the Fund's assets, subject at all times to the
supervision of the Fund's Directors. In addition to providing overall business
management and administrative services, the Manager selects, monitors and
evaluates the Portfolio Adviser described below. The Manager receives from the
Fund an advisory fee payable monthly at an annual rate of 1% of the first $150
million of the Fund's average daily net assets, .875% of the Fund's average
daily net assets in excess of $150 million but not exceeding $300 million and
.75% of the Fund's average daily net assets in excess of $300 million.
Expenses of the Fund, exclusive of taxes, interest, brokerage commissions,
distribution fees, extraordinary expenses and certain other excludable expenses
for which a waiver has been obtained, are subject to the expense limitation
imposed by one of the states in which shares of the Fund are offered for sale.
For the year ended April 30, 1995, the Fund's expenses did not exceed the above
limitation.
Certain officers and/or Directors of the Fund are officers/directors of the
Manager.
The Manager has a sub-advisory agreement with Cavelti Capital Management,
Ltd. (the "Portfolio Adviser"). The
Manager has advised the Fund that the aggregate amount of fees paid to the
Portfolio Adviser was $227,033 for the year ended April 30, 1995.
NOTE 3 - Distribution Agreement and Plan:
Pursuant to a Distribution Agreement, Sheffield Investments, Inc. (the
"Distributor"), an affiliated company of the Manager, acts as principal
distributor of the Fund's shares. The Distributor has the exclusive right to
distribute Fund shares directly or through other broker-dealers.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Act which provides that the Fund may finance activities which are
primarily intended to result in the sale of the Fund's shares, including but not
limited to advertising, printing of prospectuses and reports for other than
existing shareholders, preparation and distribution of advertising material and
sales literature, and payments to dealer and shareholders servicing agents who
enter into agreements with the Manager or Distributor.
Pursuant to the Plan, the Fund may pay distribution fees not to exceed .75%
per annum of the Fund's average daily net assets. Payments under the Plan will
be made for expenses actually incurred by the Distributor. Provided that the
Plan continues in effect, any cumulative expenses incurred by the Distributor on
or after May 1, 1988, but not yet
7
<PAGE>
BLANCHARD PRECIOUS METALS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
reimbursed by the Fund, may be reimbursed through future distribution fees from
the Fund. The Distributor has advised the Fund that at April 30, 1995, the
unreimbursed distribution expenses amounted to $425,390. If the plan is
terminated or discontinued in accordance with its terms, the obligation of the
Fund to make payments to the Distributor pursuant to the Plan will cease and the
Fund will not be required to make any payments past the date the Plan is
terminated.
NOTE 4 - Acquisition Agreement:
Sheffield Management Company (the "Manager") and Sheffield Investments, Inc.
(the "Distributor"), have entered into an acquisition agreement (the
"Acquisition Agreement") with Signet Banking Corporation and two of its
subsidiaries ("Signet"), dated February 15, 1995, pursuant to which Sheffield
will sell to Signet the assets relating to, and the ability to succeed to
contracts with, the Blanchard Funds, including Blanchard Precious Metals Fund
(collectively, the "Funds"). The transactions contemplated by the Acquisition
Agreement which have been approved by the Board of Trustees of the Funds are
conditioned upon the approval of the shareholders of each Fund, of (1) a new
investment management agreement with Signet, (2) a new distribution agreement
with Federated Securities Corp., and (3) certain other conditions.
No material changes are contemplated in the operation of the Funds and no
management or distribution and administration fee increases are being proposed.
NOTE 5 - Security Transactions and Transactions with Affiliates:
Purchases and sales of portfolio securities for the year ended April 30,
1995, excluding short-term investments and bullion, aggregated $72,351,960 and
$74,096,773, respectively. The Distributor has advised the Fund that it received
$2,250 from shareholders as account opening fees for the year ended April 30,
1995. The Manager has advised the Fund that for the year ended April 30, 1995 it
incurred costs, which were reimbursed by the Fund, amounting to $83,948 for
performing internal accounting and transfer agency functions for the Fund.
The Funds have adopted an unfunded noncontributory pension plan (the "Plan")
covering all independent directors/trustees of the Funds who will have served as
an independent director/trustee for at least five years at the time of
retirement. Benefits under this plan are based on an annual amount equal to 75%
of the director/trustee fee at the time of retirement, plus 5% for each year of
service in excess of five years of service but not in excess of ten years of
service. Net periodic pension expense included in Directors fees and expenses in
the Statement of Operations for the year ended April 30, 1995 was $18,304. As
indicated in Note 4, the Manager has entered into an agreement which provides
for the acquisition of the Manager by Signet. Following the acquisition, the
independent directors/trustees of the Funds will not stand for re-election. As a
result, the Plan was curtailed and additional pension expense of $58,569 was
recorded to reflect the previously unrecognized prior service costs of the
independent directors/trustees. Included in accrued expenses and other
liabilities at April 30, 1995 is $76,873 of accrued pension expense.
NOTE 6 - Capital Stock:
<TABLE>
<CAPTION>
For the Year Ended For the Year Ended
April 30, 1995 April 30, 1994
----------------------------- ------------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold ......................................... 9,822,619 $81,070,800 12,811,047 $109,869,217
Reinvestment of Dividends .................... 1,474,694 10,092,477 - -
---------- ----------- ---------- ------------
11,297,313 91,163,277 12,811,047 109,869,217
---------- ----------- ---------- ------------
Repurchased .................................. (8,527,815) (68,288,186) (9,789,580) (84,113,299)
---------- ----------- ---------- ------------
Net increase ................................. 2,769,498 $22,875,091 3,021,467 $ 25,755,918
========== =========== ========== ============
</TABLE>
8
<PAGE>
BLANCHARD PRECIOUS METALS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 7 - Federal Income Taxes:
Capital losses incurred after October 31 ("post-October losses") within the
taxable year are deemed to arise on the first business day of the Fund's next
taxable year. The Fund incurred and will elect to defer net capital losses of
approximately $2,368,000 during fiscal 1995.
As of April 30, 1995, the Fund had temporary book/tax differences primarily
attributable to post-October loss deferrals and non-deductible expenses. The
Fund had permanent book/tax differences primarily attributable to a tax basis
return of capital and net operating losses. To reflect reclassifications arising
from permanent book/tax differences for the year ended April 30, 1995,
paid-in-capital was charged $1,073,701, accumulated realized gain-net was
credited $119,054 and accumulated investment loss-net was credited $954,647.
NOTE 8 - Financial Highlights:
Selected ratios and per share data for a share of capital stock outstanding:
<TABLE>
<CAPTION>
For the Year Ended April 30,
--------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year $ 8.73 $ 6.83 $ 5.04 $ 5.29 $ 6.30
------ ------ ------ ------ ------
Income from investment operations:
Net investment loss (.02) (.11)(D) (.08)(D) (.09)(D) (.08)(D)
Net gains or losses on investments
(both realized and unrealized) (.41) 2.01(D) 1.87(D) (.16)(D) (.93)(D)
------ ------ ------ ------ ------
Net income (loss) from investment
operations (.43) 1.90 1.79 (.25) (1.01)
------ ------ ------ ------ ------
Less dividends and distributions:
Distributions from realized gains-net (.03) - - - -
Distributions in excess of realized gains-net (1.06) - - - -
Tax return of capital (.09) - - - -
------ ------ ------ ------ ------
Change in net asset value (1.61) 1.90 1.79 (.25) (1.01)
------ ------ ------ ------ ------
Net asset value, end of year $ 7.12 $ 8.73 $ 6.83 $ 5.04 $ 5.29
====== ====== ====== ====== ======
Total return (4.39%) 27.8% 35.5% (4.7%) (16%)
Ratio/Supplemental Data:
Net assets, end of year ($ Million) $75 $68 $33 $21 $25
Ratio of expenses to average
net assets 2.49% 2.46% 3.24% 3.09% 3.05%
Ratio of net investment loss to average
net assets (1.48%) (1.21%) (1.46%) (1.57%) (1.28%)
Portfolio turnover 116% 174% 66% 62% 57%
</TABLE>
- -------------
(D) Calculated based on average shares outstanding.
9
<PAGE>
BLANCHARD PRECIOUS METALS FUND, INC.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Blanchard Precious Metals Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statement of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Blanchard Precious Metals Fund,
Inc. (the "Fund") at April 30, 1995, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities and
bullion at April 30, 1995 by correspondence with custodians and brokers, provide
a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
June 20, 1995
10
<PAGE>
(Left Column)
Portfolio Advisers
Shufro, Rose and Ehrman
U.S. Equity Securities
Fiduciary Trust International, Inc.
Foreign Equity Securities
Cavelti Capital Management, Ltd.
Precious Metals Securities and Bullion
Investment Advisers, Inc.
U.S. Fixed Income
Fiduciary Trust International, Inc.
Foreign Fixed Income
Martin Currie Inc.
Emerging Markets
Custodian and Transfer Agent
United States Trust Company
of New York
Independent Accountants
Price Waterhouse LLP
Legal Counsel
Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
Blanchard Global
Growth Fund
41 Madison Ave., 24th Floor
New York, NY 10010-2267
(Right Column)
Blanchard
Global
Growth Fund
Annual Report
April 30, 1995
Managed by: Sheffield Management Company
41 Madison Ave., 24th Floor
New York, NY 10010-2267
1-800-922-7771
