President's Message
December 15, 1995
Dear Shareholder,
I'm pleased to present the Semi-Annual Report for your Blanchard Precious
Metals Fund, Inc. for the six-month period ended October 31, 1995.
This report provides you with complete financial information on your Fund,
including a list of investments included in the portfolio and the financial
statements.
If you would like the most recent performance update, or have other questions,
please call Investors' Services at 1-800-829-3863.
Thank you for your confidence in the Blanchard Group of Funds as a way to put
your money to work for you.
We remain committed to delivering the highest level of personal service.
Sincerely,
Edward C. Gonzales
President
BLANCHARD PRECIOUS METALS FUND, INC.
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- ------------ ---------------------------------------------------------------------------------- -------------
EQUITIES--97.5%
- ------------------------------------------------------------------------------------------------
METALS & MINING--97.5%
- ------------------------------------------------------------------------------------------------
AUSTRALIA--6.0%
----------------------------------------------------------------------------------
600,000 Croesus Mining NL $ 164,534
----------------------------------------------------------------------------------
150,000 (a)Great Central Mines NL 306,216
----------------------------------------------------------------------------------
600,000 Newcrest Mining, Ltd. 2,468,007
----------------------------------------------------------------------------------
575,000 St. Barbara Mines, Ltd. 350,396
----------------------------------------------------------------------------------
3,194,000 (a)Valdora Minerals NL 583,912
---------------------------------------------------------------------------------- -------------
Total Australia 3,873,065
---------------------------------------------------------------------------------- -------------
CANADA--46.9%
----------------------------------------------------------------------------------
25,000 (a)BGR Precious Metals, Inc., Class A 256,568
----------------------------------------------------------------------------------
125,000 Barrick Gold Corp. 2,880,560
----------------------------------------------------------------------------------
400,000 Cambior, Inc. 3,993,133
----------------------------------------------------------------------------------
525,000 (a)Dayton Mining Corp. 1,822,100
----------------------------------------------------------------------------------
728,000 (a)Eldorado Corp., Ltd. 1,983,281
----------------------------------------------------------------------------------
58,200 (b)Franco-Nevada Mining Corp., Ltd. 3,198,220
----------------------------------------------------------------------------------
801,700 (a)Great Lakes Minerals, Inc. 209,431
----------------------------------------------------------------------------------
290,000 Placer Dome, Inc. 6,381,701
----------------------------------------------------------------------------------
120,000 (a)Prime Resources Group, Inc. 873,265
----------------------------------------------------------------------------------
1,000,000 (a)TVX Gold, Inc. 6,624,123
----------------------------------------------------------------------------------
439,000 (a)Triton Mining Corp. 1,720,219
---------------------------------------------------------------------------------- -------------
Total Canada 29,942,601
---------------------------------------------------------------------------------- -------------
SOUTH AFRICA--12.3%
----------------------------------------------------------------------------------
175,000 (a)(b)Ashanti Goldfields Co. , ADR 2,865,625
----------------------------------------------------------------------------------
200,000 East Rand Gold & Uranium Co., Ltd., ADR 570,000
----------------------------------------------------------------------------------
180,000 Free State Consolidated Gold Mines, Ltd., ADR 1,698,750
----------------------------------------------------------------------------------
</TABLE>
BLANCHARD PRECIOUS METALS FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
<C> <S> <C>
- ------------ ---------------------------------------------------------------------------------- -------------
METALS & MINING--CONTINUED
- ------------------------------------------------------------------------------------------------
SOUTH AFRICA--CONTINUED
----------------------------------------------------------------------------------
$ 477,000 Vaal Reefs Explorations & Mining Co., Ltd., ADR $ 2,712,938
---------------------------------------------------------------------------------- -------------
Total South Africa 7,847,313
---------------------------------------------------------------------------------- -------------
UNITED STATES--32.3%
----------------------------------------------------------------------------------
455,000 (a)Atlas Corp. 625,625
----------------------------------------------------------------------------------
885,000 (a)Canyon Resources Corp. 1,714,687
----------------------------------------------------------------------------------
1,468,200 (a)Greenstone Resources, Ltd. 3,578,738
----------------------------------------------------------------------------------
200,800 Homestake Mining Co. 3,087,300
----------------------------------------------------------------------------------
200,000 Kinross Gold Corp. 1,450,000
----------------------------------------------------------------------------------
146,000 Newmont Mining Corp. 5,511,500
----------------------------------------------------------------------------------
473,000 Santa Fe Pacific Gold 4,670,875
---------------------------------------------------------------------------------- -------------
Total United States 20,638,725
---------------------------------------------------------------------------------- -------------
TOTAL EQUITIES (IDENTIFIED COST $74,083,940) 62,301,704
---------------------------------------------------------------------------------- -------------
WARRANTS--0.3%
- ------------------------------------------------------------------------------------------------
227,500 Atlas Corp., Warrants (expire 12/15/1999) 19,338
----------------------------------------------------------------------------------
100,000 Bema Gold Corp., Warrants 190,327
---------------------------------------------------------------------------------- -------------
TOTAL WARRANTS (IDENTIFIED COST $310,949) 209,665
---------------------------------------------------------------------------------- -------------
(C) REPURCHASE AGREEMENT--2.1%
- ------------------------------------------------------------------------------------------------
$ 1,347,343 Merrill Lynch, Pierce, Fenner & Smith, Inc., 5.82%, dated 10/31/1995, due
11/1/1995 (at amortized cost) 1,347,343
---------------------------------------------------------------------------------- -------------
TOTAL INVESTMENTS (IDENTIFIED COST $75,742,232)(D) $ 63,858,712
---------------------------------------------------------------------------------- -------------
</TABLE>
(a) Non-income producing security.
(b) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. These securities have been determined to be
liquid under criteria established by the Board of Trustees. At the end of
the period, these securities amounted to $6,063,845 which represents 9.5%
of net assets.
(c) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
(d) The cost of investments for federal tax purposes amounts to $75,742,232.
The net unrealized depreciation of investments on a federal tax basis
amounts to $11,883,520 which is comprised of $15,483,241 appreciation and
$3,599,721 depreciation at October 31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($63,882,780) at
October 31, 1995.
The following acronym(s) are used throughout this portfolio:
ADR--American Depository Receipt
(See Notes which are an integral part of the Financial Statements)
BLANCHARD PRECIOUS METALS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost $75,742,232) $ 63,858,712
- --------------------------------------------------------------------------------------------------
Cash 1,403,229
- --------------------------------------------------------------------------------------------------
Income receivable 4,799
- --------------------------------------------------------------------------------------------------
Receivable for investments sold 231,620
- --------------------------------------------------------------------------------------------------
Receivable for shares sold 250,180
- -------------------------------------------------------------------------------------------------- --------------
Total assets 65,748,540
- --------------------------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------------------------
Payable for investments purchased $ 1,392,793
- ------------------------------------------------------------------------------------
Payable for shares redeemed 249,754
- ------------------------------------------------------------------------------------
Accrued expenses 223,213
- ------------------------------------------------------------------------------------ ------------
Total liabilities 1,865,760
- -------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 9,601,883 shares outstanding $ 63,882,780
- -------------------------------------------------------------------------------------------------- --------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------------------------
Paid in capital $ 76,382,488
- --------------------------------------------------------------------------------------------------
Net unrealized depreciation of investments and translation of assets and liabilities in foreign
currency (11,883,520)
- --------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 45,881
- --------------------------------------------------------------------------------------------------
Distributions in excess of net investment income (662,069)
- -------------------------------------------------------------------------------------------------- --------------
Total Net Assets $ 63,882,780
- -------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- --------------------------------------------------------------------------------------------------
$63,882,780 / 9,601,883 shares outstanding $ 6.65
- -------------------------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD PRECIOUS METALS FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Dividends (net of foreign taxes withheld of $37,371) $ 303,779
- ---------------------------------------------------------------------------------------------------
Interest 173,476
- --------------------------------------------------------------------------------------------------- -------------
Total income 477,255
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------
Investment advisory fee $ 384,311
- ---------------------------------------------------------------------------------------
Administrative personnel and services fee 24,340
- ---------------------------------------------------------------------------------------
Custodian fees 13,697
- ---------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 102,775
- ---------------------------------------------------------------------------------------
Directors'/Trustees' fees 14,944
- ---------------------------------------------------------------------------------------
Auditing fees 13,489
- ---------------------------------------------------------------------------------------
Legal fees 23,494
- ---------------------------------------------------------------------------------------
Portfolio accounting fees 34,951
- ---------------------------------------------------------------------------------------
Distribution services fee 287,933
- ---------------------------------------------------------------------------------------
Share registration costs 41,741
- ---------------------------------------------------------------------------------------
Printing and postage 29,488
- ---------------------------------------------------------------------------------------
Insurance premiums 1,006
- ---------------------------------------------------------------------------------------
Miscellaneous 707
- --------------------------------------------------------------------------------------- ----------
Total expenses 972,876
- --------------------------------------------------------------------------------------------------- -------------
Net operating loss (495,621)
- --------------------------------------------------------------------------------------------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
- ---------------------------------------------------------------------------------------------------
Net realized gain on investments and foreign currency transactions 2,448,550
- ---------------------------------------------------------------------------------------------------
Net change in unrealized depreciation of investments and translation of assets and liabilities in
foreign currency (6,430,784)
- --------------------------------------------------------------------------------------------------- -------------
Net realized and unrealized loss on investments and foreign currency (3,982,234)
- --------------------------------------------------------------------------------------------------- -------------
Change in net assets resulting from operations $ (4,477,855)
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD PRECIOUS METALS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) OCTOBER YEAR ENDED
31, 1995 APRIL 30, 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------
Net operating loss $ (495,621) $ (1,121,095)
- -----------------------------------------------------------------------
Net realized gain (loss) on investments and foreign currency
transactions ($2,448,550 and $1,633,234 net gains, respectively, as
computed for federal tax purposes) 2,448,550 254,076
- -----------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of investments and
translation of assets and liabilities in foreign currency (6,430,784) (3,793,965)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from operations (4,477,855) (4,660,984)
- ----------------------------------------------------------------------- ---------------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------------------------
Distributions from net realized gains on investments and foreign
currency transactions -- (254,076)
- -----------------------------------------------------------------------
Distributions in excess of net realized gains on investments and
foreign currency transactions -- (9,876,340)
- -----------------------------------------------------------------------
Tax return of capital -- (894,701)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from distributions to shareholders -- (11,025,117)
- ----------------------------------------------------------------------- ---------------------- ----------------
SHARE TRANSACTIONS--
- -----------------------------------------------------------------------
Proceeds from sale of shares 23,665,923 81,070,800
- -----------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared -- 10,092,477
- -----------------------------------------------------------------------
Cost of shares redeemed (30,587,149) (68,288,186)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from share transactions (6,921,226) 22,875,091
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets (11,399,081) 7,188,990
- -----------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------
Beginning of period 75,281,861 68,092,871
- ----------------------------------------------------------------------- ---------------------- ----------------
End of period 63,882,780 $ 75,281,861
- ----------------------------------------------------------------------- ---------------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD PRECIOUS METALS FUND, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
OCTOBER 31, YEAR ENDED APRIL 30,
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995 1995 1994 1993 1992 1991 1990 1989(A)
NET ASSET VALUE, BEGINNING OF
PERIOD $ 7.12 $ 8.73 $ 6.83 $ 5.04 $ 5.29 $ 6.30 $ 7.19 $ 8.00
- -----------------------------
INCOME FROM INVESTMENT
OPERATIONS
- -----------------------------
Net investment income
(loss) (0.07) (0.02) (0.11)(b) (0.08)(b) (0.09)(b) (0.08)(b) (0.03)(b) 0.02
- -----------------------------
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions (0.40) (0.41) 2.01 1.87 (0.16)(b) (0.93)(b) (0.59)(b) (0.83)
- ----------------------------- ------ --------- --------- --------- --------- --------- --------- -----------
Total from investment
operations (0.47) (0.43) 1.90 1.79 (0.25) (1.01) (0.62) (0.81)
- ----------------------------- ------ --------- --------- --------- --------- --------- --------- -----------
LESS DISTRIBUTIONS
- -----------------------------
Distributions from net
realized gain on
investments and foreign
currency transactions -- (0.03) -- -- -- -- (0.03) --
- -----------------------------
Distributions in excess of
net realized gain on
investments and foreign
currency transactions -- (1.06) -- -- -- -- (.105) --
- -----------------------------
Tax return of capital -- (0.09) -- -- -- -- (0.135) --
- ----------------------------- ------ --------- --------- --------- --------- --------- --------- -----------
Total distributions -- (1.18) -- -- -- -- (0.27) --
- ----------------------------- ------ --------- --------- --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF
PERIOD $ 6.65 $ 7.12 $ 8.73 $ 6.83 $ 5.04 $ 5.29 $ 6.30 $ 7.19
- ----------------------------- ------ --------- --------- --------- --------- --------- --------- -----------
TOTAL RETURN (C) (6.60%) (4.39%) 27.8% 35.5% (4.7% (16.0%) (10.9%) (10.2%)
- -----------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------
Expenses 2.53%* 2.49% 2.46% 3.24% 3.09% 3.05% 2.95% 3.99%*(d)(e)
- -----------------------------
Net investment income
(loss) (1.29%)* (1.48%) (1.21%) (1.46%) (1.57%) (1.28% (0.40%) 0.77%*(d)(f)
- -----------------------------
SUPPLEMENTAL DATA
- -----------------------------
Net Assets (000 omitted) $63,883 $75,282 $32,636 $20,900 $24,924 $31,539 $25,837
- -----------------------------
Portfolio turnover 75% 116% 174% 66% 62% 57% 56% 21 %
- -----------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from June 22, 1988 (commencement of the
Fund's operations) April 30, 1989.
(b) Calculated based on average shares outstanding-prior years' amounts
restated for comparative purposes.
(c) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(d) Net of expense reimbursement.
(e) During the first year (1989), the net expense ratio to average net assets
would have been 4.03%, if a portion of the 12b-1 distribution and
management fees had not been waived by the prior distributor and prior
manager, respectively.
(f) The investment income net ratio to average net assets would have been
0.72%, if a portion of the 12b-1 distribution and management fees had not
been waived by the prior distributor and prior manager, respectively.
(See Notes which are an integral part of the Financial Statements)
BLANCHARD PRECIOUS METALS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
The Fund is registered under the the Investment Company of 1940, as amended (the
"Act"), as a non-diversified, open-end management investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Short-term securities with remaining maturities of
sixty days or less at the time of purchase may be valued at amortized cost,
which approximates fair market value. All other securities are valued at
the prices provided by an independent pricing service.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS-- Interest income and
expenses are accrued daily. Bond premium and discount, if applicable, are
amortized as required by the Internal Revenue Code, as amended (the
"Code"). Dividend income and distributions to shareholders are recorded on
the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
However, federal taxes may be imposed on the Fund upon the disposition of
certain investments in passive foreign investment companies. Withholding
taxes on foreign dividends have been provided for in accordance with the
Fund's understanding of the applicable country's tax rules and rates.
Additionally, net capital losses of approximately $2,367,627 attributable
to security transactions and foreign currency losses incurred after October
31, 1994 and treated as arising on the first day of the Fund's next taxable
year.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
CONCENTRATION OF CREDIT RISK--The Fund invests in securities of non-U.S.
issuers. The political or economic developments within a particular country
or region may have an adverse effect on the ability of domiciled issuers to
meet their obligations. Additionally, political or economic developments
may have an effect on the liquidity and volatility of portfolio securities
and currency holdings.
FOREIGN CURRENCY COMMITMENTS--The Fund may enter into foreign currency
commitments for the delayed delivery of securities or foreign currency
exchange transactions. Risks may arise upon entering these transactions
from the potential inability of counter-parts to meet the terms of their
commitments and from unanticipated movements in security prices or foreign
exchange rates. The foreign currency transactions are adjusted by the daily
exchange rate of the underlying currency and any gains or losses are
recorded for financial statement purpose as unrealized until the settlement
date.
At October 31, 1995, the Fund had no outstanding foreign currency
commitments.
FOREIGN CURRENCY TRANSLATION--The accounting records of the Fund are
maintained in U.S. dollars. All assets and liabilities denominated in
foreign currencies ("FC") are translated into U.S. dollars based on the
rate of exchange of such currencies against U.S. dollars on the date of
valuation. Purchases and sales of securities, income and expenses are
translated at the rate of exchange quoted on the respective date that such
transactions are recorded. Differences between income and expense amounts
recorded and collected or paid are adjusted when reported by the custodian
bank. The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of FCs, currency gains or losses
realized between the trade and settlement dates on securities transactions,
the difference between the amounts of dividends, interest, and foreign
withholding taxes recorded on the Fund's books, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end,
resulting from changes in the exchange rate.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. In some cases, the issuer of
restricted securities has agreed to register such securities for resale, at
the issuer's expense either upon demand by the Fund or in connection with
another registered offering of the securities. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. Such restricted securities may be determined to be liquid
under criteria established by the Board of Directors. The Fund will not
incur any registration costs upon such resales. The Fund's restricted
securities are valued at the price provided by dealers in the secondary
market or, if no market prices are available, at the fair value as
determined by the Fund's pricing committee.
Additional information on each restricted security held at October 31, 1995
is as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
<S> <C> <C>
Franco-Nevada Mining Corp., Ltd. 11/13/1991-9/27/1995 $ 2,998,118
Ashanti Goldfields Co., ADR 4/19/1994-9/13/1995 3,653,708
</TABLE>
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At October 31, 1995, there is an unlimited number of par value shares ($0.001
per share) authorized: Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
Shares sold 3,164,355 9,822,619
- -------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 0 1,474,694
- -------------------------------------------------------------------------
Shares redeemed (4,132,760) (8,527,815)
- ------------------------------------------------------------------------- -------------------- ----------------
Net change resulting from share transactions (968,405) 2,769,498
- ------------------------------------------------------------------------- -------------------- ----------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Virtus Capital Management,Inc., the Fund's investment
adviser, (the "Adviser"), receives for its services an annual investment
advisory fee equal to 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.
Virtus Capital Management became the Fund's investment adviser on July 12, 1995.
Prior to July 12, 1995, Sheffield Management Company served as the Fund's
investment adviser and received for its services an annual investment advisory
fee equal to .75 of 1% of the Fund's average daily net assets. For the period
ended October 31, 1995, the adviser(s) earned fees as follows:
<TABLE>
<CAPTION>
ADVISER NAME AMOUNT OF FEE EARNED
<S> <C>
Sheffield Management Company $ 165,642
Virtus Capital Management 218,669
</TABLE>
The Adviser may voluntarily choose to waive any portion of its fee and/or
reimburse certain operating expenses of the Fund. The Adviser can modify or
terminate this voluntary waiver and/or reimbursement at any time at its sole
discretion.
Under the terms of a sub-advisory agreement between the Adviser and Cavelti
Capital Management, Ltd., Cavelti Capital Management, Ltd. receives an annual
fee from the Adviser equal to .30% of the average daily net assets of the Fund
on the first $150 million, plus .2625% of the Fund's average net assets in
excess of $150 million but less than $300 million, plus .225 % of the Fund's
average net assets in excess of $300 million. In addition, Cavelti Capital
Management, Ltd. may voluntarily choose to reduce its compensation.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. This fee is based on the
level of average aggregate net assets of the Corporation for the period.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
reimburse Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's shares. The Plan provides that the Fund may incur distribution
expenses up to .75 of 1% of the average daily net assets of the Fund shares,
annually, to reimburse FSC.
FSC became the Fund's principal distributor on July 12, 1995. Prior to July 12,
1995, Sheffield Investments, Inc. served as the Fund's principal distributor and
received for its services an annual distribution fee equal to .75 of 1% of the
Fund's average daily net assets.
For the period ended October 31, 1995, the distributor earned fees as follows:
<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF
DISTRIBUTOR NAME FEE EARNED FEE WAIVED
<S> <C> <C>
Sheffield Investments, Inc. $ 114,517 $ 0
- ----------------------------------------------------------------------------------
Federated Securities Corp. $ 173,416 0
- ----------------------------------------------------------------------------------
</TABLE>
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES AND PORTFOLIO
ACCOUNTING FEES-- Federated Services Company ("FServ") serves as transfer and
dividend disbursing agent for the Fund. This fee is based on the size, type, and
number of accounts and transactions made by shareholders.
FServ also maintains the Fund's accounting records for which it receives a fee.
The fee is based on the level of the Fund's average daily net assets for the
period, plus out of pocket expenses.
CUSTODIAN FEES--Signet Trust Co. is the Fund's custodian. The fee is based on
the level of the Fund's average daily net assets for the period, plus out of
pocket expenses.
GENERAL--Certain of the Officers and Directors of the Corporation are Officers
and Directors of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended October 31, 1995, were as follows:
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------
PURCHASES $ 49,447,835
- --------------------------------------------------------------------------------------------------- -------------
SALES $ 49,659,615
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
THIS PAGE INTENTIONALLY LEFT BLANK
THIS PAGE INTENTIONALLY LEFT BLANK
Blanchard
Precious Metals
Fund, Inc.
Semi-Annual
Report
October 31, 1995
Managed by: Virtus Capital Management
Portfolio Advisers
Cavelti Capital
Management, Ltd.
Blanchard
Precious Metals
Fund, Inc.(R)
The Blanchard Group of Funds are available through Signet Financial Services,
Inc., and are advised by Virtus Capital Management, Inc., an affiliate of
Signet Financial Services, Inc.
Products offered through Signet Financial Services, Inc., are not deposits,
obligations of, or guaranteed by Signet Financial Services, Inc., any bank or
other financial institution, and are not insured by the FDIC or any Federal
Agency. In addition, they involve risk, including possible loss of principal
invested.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
CUSIP 093254100
