UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-1800
U.S. GLOBAL INVESTORS FUNDS
7900 CALLAGHAN ROAD
SAN ANTONIO, TX 78229
(Address of principal executive offices) (Zip code)
SUSAN B. MCGEE, ESQ.
7900 CALLAGHAN ROAD
SAN ANTONIO, TX 78229
(Name and address of agent for service)
Registrant's telephone number, including area code: 210-308-1234
Date of fiscal year end: JUNE 30
Date of reporting period: JUNE 30, 2004
ITEM 1. REPORTS TO STOCKHOLDERS
U.S. GLOBAL INVESTORS FUNDS
ANNUAL REPORT
JUNE 30, 2004
TABLE OF CONTENTS
LETTER TO SHAREHOLDERS 1
MANAGEMENT TEAMS' PERSPECTIVES 9
PORTFOLIOS OF INVESTMENTS 38
NOTES TO PORTFOLIOS OF INVESTMENTS 81
STATEMENTS OF ASSETS AND LIABILITIES 86
STATEMENTS OF OPERATIONS 90
STATEMENTS OF CHANGES IN NET ASSETS 94
NOTES TO FINANCIAL STATEMENTS 100
FINANCIAL HIGHLIGHTS 109
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM 114
TRUSTEES AND OFFICERS 115
ADDITIONAL INFORMATION 118
NASDAQ SYMBOLS
U.S. TREASURY SECURITIES CASH FUND USTXX
U.S. GOVERNMENT SECURITIES SAVINGS FUND UGSXX
NEAR-TERM TAX FREE FUND NEARX
TAX FREE FUND USUTX
ALL AMERICAN EQUITY FUND GBTFX
CHINA REGION OPPORTUNITY FUND USCOX
GLOBAL RESOURCES FUND PSPFX
WORLD PRECIOUS MINERALS FUND UNWPX
GOLD SHARES FUND USERX
[USGI Logo]
P.O. Box 781234 San Antonio, Texas 78278-1234
Tel 1*800*US*FUNDS
Fax 210*308*1217
www.usfunds.com
U.S. GLOBAL INVESTORS FUNDS
DEAR SHAREHOLDER
Dear Shareholder, [Graphic: Frank Holmes photo]
The past year has seen many ups and downs in the market, but overall, it has
been a great year for the fund shareholders of U.S. Global Investors. Thanks to
the daily active management of your money, eight of the nine funds finished the
fiscal year in positive territory. Even more exciting is that, based on total
return, three of our funds were ranked #1 in their categories, according to
Lipper, Inc.
Here is the breakdown, as of June 30, 2004:
- ------------------------------------------------------------------------------
1-YEAR RANK 3-YEAR RANK 5-YEAR RANK 10-YEAR RANK
- ------------------------------------------------------------------------------
Global #1 #1 #11 #17
Resources (among 76 (among 70 (among 55 (among 20
Fund Natural Natural Natural Natural
Resources Resources Resources Resources
funds) funds) funds) funds)
- ------------------------------------------------------------------------------
World #1 #1 #15 #12
Precious (among 48 (among 39 (among 30 (among 18
Minerals Gold Gold Gold Gold Oriented
Fund Oriented Oriented Oriented funds)
funds) funds) funds)
- ------------------------------------------------------------------------------
China Region #1 #9 #16 #5
Opportunity (among 22 (among 22 (among 20 (among 5
Fund China Region China Region China Region China Region
funds) funds) funds) funds)
- ------------------------------------------------------------------------------
I apologize for the somewhat cumbersome disclosure; it appears the regulators do
not wish us to discuss relative performance in a simple manner.
The key to our success is superior, active management. In fact, a new ranking
service by fund supermarket Pershing, a subsidiary of the Bank of New York,
recently rated the Global Resources portfolio management team among their top
five fund managers. The ranking service tracks managers' performance for the
duration of their careers, rather than the performance of the individual fund,
which is how most other ranking services work. But no matter which metrics you
use, the Global Resources Fund has done very well. It is important to realize
that resources represent approximately 12 percent of the S&P 500 Index, and most
active money managers are underweight in this sector.
1
U.S. GLOBAL INVESTORS FUNDS
Another metric that has gained popularity lately is "alpha," which measures
return that is in excess of market risk. In other words, it measures how well or
how poorly a fund performed in spite of what the market happened to be doing.
Ideally, a fund will have what is known as "positive alpha," which would
indicate that it outperformed its benchmark index without taking on too much
risk in the process. If a fund posts strong returns, but achieves them only by
making a lot of risky moves, its alpha can actually be negative. For more on
alpha investing, see the chart that immediately follows this letter.
Following our chart on alpha is our longstanding favorite, "The Wisdom of
Diversification," which demonstrates the performance of various investment
categories over a 20-year period. It's important to realize that all asset
classes will fluctuate over time. Gold may rotate to the top one year, and to
the bottom the next. The same holds true for bonds, large-caps or anything else.
We continue to emphasize the importance of diversification because we know that
most investors tend to make emotion-based, performance-chasing decisions. We at
U.S. Global advocate a well- balanced portfolio, with annual rebalancing on your
birthday or in the days between Christmas and the New Year (whichever is easier
to remember). Use your age to determine what percentage of your assets to
allocate toward fixed-income investments. For example, if you are 60 years old,
allocate 60 percent toward fixed-income.
As you know, we continually strive to educate our fund shareholders about cycles
and events driving the performance of their investments. We offer free weekly
e-mail alerts (sign up at www. usfunds.com/alert) and have provided hundreds of
pages of free research over the years (available at www.usfunds.com/reports).
I feel it is also important to educate our shareholders about the fund industry
as a whole. While I do believe it is crucial to crack down on illegal and
unethical trading practices, including after- hours trading, I also think enough
is enough.
Further tightening the regulations on mutual funds may weed out a few more bad
apples in an industry that, overall, has provided exemplary service to ordinary
investors. But ultimately, new rules and regulations will incur vast expenses,
particularly to smaller fund families, which may result in increased fees
charged to fund
2
U.S. GLOBAL INVESTORS FUNDS
shareholders. Our funds' expense ratios have been improving lately, in some
cases quite dramatically, and we hope to continue this trend. But that may prove
difficult in the coming months and years, as we are forced to hire additional
legal and compliance personnel.
The burden and costs of the Sarbanes-Oxley and Patriot Acts are growing each
quarter. We have witnessed tremendous inflation in the costs of legal
representation, auditing and insurance--not just in the price of gas at the
pump! We've made great strides in lowering expenses. I hope we can continue
making strides, despite the efforts of overzealous regulators who associate
experience and active management with corruption and lack of integrity.
If you agree with me, and are opposed to the legislation mentioned above, please
call your senators and representatives and tell them so.
* The Senate switchboard: (202) 224-3121; www.senate.gov
* The House switchboard: (202) 225-3121; www.house.gov
Sincerely,
/s/ Frank Holmes
Frank E. Holmes
Chairman, Chief Investment Officer and CEO
U.S. Global Investors, Inc.
Before investing, you should consider carefully the fund's investment
objectives, risks, charges and expenses. For this and other important
information, please obtain a fund prospectus by visiting www.usfunds.com or by
calling 1-800-US-FUNDS (1-800-873- 8637). Read the prospectus carefully before
investing. Distributed by U.S. Global Brokerage, Inc.
Performance data quoted above is historical. Past performance is no guarantee of
future results. Current performance may be higher or lower than the performance
data quoted. The principal value and investment return of an investment will
fluctuate so that your shares, when redeemed, may be worth more or less than
their original cost.
3
U.S. GLOBAL INVESTORS FUNDS
You can obtain performance data current to the most recent month end by visiting
www.usfunds.com or by calling 1-800-US-FUNDS. Press option 5 to speak with an
investor representative. This information will be available no later than seven
business days following the most recent month end.
Gold funds may be susceptible to adverse economic, political or regulatory
developments due to concentrating in a single theme. The price of gold is
subject to substantial price fluctuations over short periods of time and may be
affected by unpredicted international monetary and political policies. We
suggest investing no more than 3% to 5% of your portfolio in gold or gold
stocks.
Foreign and emerging market investing involves special risks such as currency
fluctuation and less public disclosure, as well as economic and political risk.
The China Region Opportunity Fund's share price is expected to be more volatile
than those of funds only invested in domestic securities. The fund may invest in
private placements and IPOs, which may significantly affect performance. There
is no guarantee that these high-risk investments will have the same effect on
the fund's performance if they are made in the future.
The S&P 500 Index is a widely recognized capitalization-weighted index of 500
common stock prices in U.S. companies.
Diversification does not protect an investor from market risk and does not
assure a profit.
4
U.S. GLOBAL INVESTORS FUNDS
WHAT IS ALPHA?
Alpha measures return on an investment that is in excess of market risk. In
other words, performance regardless of what the market happens to be doing,
Alpha can be created through security selection, market selection and price risk
management (the process of actively managing relative volatility, or "beta").
Positive alpha is attributable to the skill of the active manager. If a mutual
fund beats its benchmark index, but the fund manager took on greater relative
risk to do it, the alpha may actually be negative. The chart below shows which
investment models performed the best each year for the past 10 years. Developed
by Credit Suisse First Boston, these portfolios were weighted toward companies
in the top 10 percent of their peers, and against those in the bottom 10
percent, based on factors such as Earnings Momentum, Relative Value, etc. It is
important to realize that all of these portfolios experienced volatility. But
the fund manager who can combine the right strategies - while keeping volatility
to a minimum - will likely achieve positive alpha (superior relative performance
over its peer group index).
[Graphics: CSFB Alpha Factor Rankings Chart]
CSFB Alpha Factor Rankings
S&P 500 (1993-2003)
BEST
PERFORMERS
^ ---------------------------------------------------------------------------------------------------------------------------------
| 1993 1994 1995 1996 1997 1998 1999
| ---------------------------------------------------------------------------------------------------------------------------------
|
| Earnings Traditional Earnings Earnings Earnings Price Earnings
| Momentum Value Momentum Momentum Momentum Reversal Momentum
| ---------------------------------------------------------------------------------------------------------------------------------
| Price Earnings Price Relative Relative Earnings Price
| Momentum Momentum Reversal Value Value Momentum Momentum
| ---------------------------------------------------------------------------------------------------------------------------------
| Traditional Price Relative Historical Traditional Relative Historical
| Value Reversal Value Value Value Value Value
| ---------------------------------------------------------------------------------------------------------------------------------
| Relative Relative Traditional Profit Price Expected Price
| Value Value Value Trends Reversal Growth Reversal
| ---------------------------------------------------------------------------------------------------------------------------------
| Price Accelerating Historical Accelerating Small Historical Price
| Reversal Sales Growth Sales Size Growth Reversal
| ---------------------------------------------------------------------------------------------------------------------------------
| Small Profit Price Expected Profit Profit Accelera
| Size Trends
| ---------------------------------------------------------------------------------------------------------------------------------
| Accelerating Historical Accelerating Price Historical Accelerating Small
| Sales Growth Sales Momentum Growth Sales Size
| ---------------------------------------------------------------------------------------------------------------------------------
| Historical Small Expected Price Price Traditional Relative
| Growth Size Growth Reversal Momentum Value Value
| ---------------------------------------------------------------------------------------------------------------------------------
| Expected Expected Small Traditional Accelerating Expected Profit
| Growth Growth Size Value Sales Growth Trends
| ---------------------------------------------------------------------------------------------------------------------------------
| Profit Price Profit Small Expected Small Traditional
| Trends Momentum Trends Size Growth Size Value
| ---------------------------------------------------------------------------------------------------------------------------------
|
|
|
| ---------------------------------------------------------------------------------------------------------------------------------
| 2000 2001 2002 2003
| ---------------------------------------------------------------------------------------------------------------------------------
| Earnings Tradit'l Profit Small
| Momentum Value Trends Size
| ---------------------------------------------------------------------------------------------------------------------------------
| Relative Relative Relative Expected
| Value Value Value Growth
| ---------------------------------------------------------------------------------------------------------------------------------
| Small Small Small Relative
| Size Size Size Value
| ---------------------------------------------------------------------------------------------------------------------------------
| Price Price Price Tradit'l
| Reversal Reversal Reversal Value
| ---------------------------------------------------------------------------------------------------------------------------------
| Historical Profit Tradit'l Accelerating
| Growth Trends Value Sales
| ---------------------------------------------------------------------------------------------------------------------------------
| Accelerating Accelerating Earnings Price
| Sales Sales Momentum Reversal
| ---------------------------------------------------------------------------------------------------------------------------------
| Traditional Earnings Price Price
| Value Momentum Momentum Momentum
| ---------------------------------------------------------------------------------------------------------------------------------
| Profit Price Accelerating Earnings
| Trends Momentum Sales Momentum
| ---------------------------------------------------------------------------------------------------------------------------------
| Price Historical Expected Historical
| Momentum Growth Growth Growth
| ---------------------------------------------------------------------------------------------------------------------------------
| Expected Expected Historical Profit
| Growth Growth Growth Trends
| ---------------------------------------------------------------------------------------------------------------------------------
WORST
PERFORMERS
Source: Credit Suisse First Boston LLC.
The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies.
5
U.S. GLOBAL INVESTORS FUNDS
THE WISDOM OF DIVERSIFICATION
Take a moment to study this chart. As you can see, not one investment category
has performed consistently over the 20-year period. For example, in 1984, the
gold sector was the worst performer. By 1987, it was the best. Fast-forward to
1999, when, at the peak of the dot-com boom, small-cap growth stocks were the
best performers. The next year they hit rock bottom. This is why you need a
well-balanced, diversified portfolio. By allocating your assets among a variety
of categories, you protect your self from unpredictable shifts in the market. In
other words, you avoid putting all your eggs in one basket.
[Graphics: The Wisdom of Diversification Table]
Ranking of Investment Categories from Best to Worst Over the Last 20 Years
BEST
PERFORMERS
^ ----------------------------------------------------------------------------------------------------------------------
| 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
| ----------------------------------------------------------------------------------------------------------------------
|
| Bond Int'l Gold Gold Small Gold Bond Small Small Gold Int'l
| Value Growth Value
| ----------------------------------------------------------------------------------------------------------------------
| Large Gold Gold Int'l Int'l Large Large Mid Large Int'l Large
| Value Growth Growth Cap Value Growth
| ----------------------------------------------------------------------------------------------------------------------
| Int'l Mid Bond Large Large Mid Mid Small Mid Small Small
| Cap Growth Value Cap Cap Value Cap Value Value
| ----------------------------------------------------------------------------------------------------------------------
| Small Large Large Large Mid Large Large Large Bond Large Large
| Value Growth Value Value Cap Value Value Growth Value Value
| ----------------------------------------------------------------------------------------------------------------------
| Mid Bond Mid Mid Small Small Small Large Small Bond Small
| Cap Cap Cap Growth Growth Growth Value Growth Growth
| ----------------------------------------------------------------------------------------------------------------------
| Large Large Large Bond Large Bond Gold Bond Large Mid Mid
| Growth Value Growth Growth Growth Cap Cap
| ----------------------------------------------------------------------------------------------------------------------
| Small Small Small Small Bond Small Small Int'l Gold Small Bond
| Growth Value Value Value Value Value Growth
| ----------------------------------------------------------------------------------------------------------------------
| Gold Small Small Small Gold Int'l Int'l Gold Int'l Large Gold
WORST Growth Growth Growth Growth
PERFORMERS ----------------------------------------------------------------------------------------------------------------------
BEST
PERFORMERS
^ --------------------------------------------------------------------------------------------
| 1995 1996 1997 1998 1999 2000 2001 2002 2003
| --------------------------------------------------------------------------------------------
| Large Large Large Large Small Small Small Gold Small
| Value Growth Value Growth Growth Value Value Growth
| --------------------------------------------------------------------------------------------
| Large Large Mid Int'l Large Bond Gold Bond Small
| Growth Value Cap Growth Value
| --------------------------------------------------------------------------------------------
| Small Small Small Mid Int'l Mid Bond Small Gold
| Growth Value Value Cap Cap Value
| --------------------------------------------------------------------------------------------
| Mid Mid Large Large Mid Large Mid Mid Int'l
| Cap Cap Growth Value Cap Value Cap Cap
| --------------------------------------------------------------------------------------------
| Bond Small Bond Bond Large Gold Large Large Mid
| Growth Value Value Value Cap
| --------------------------------------------------------------------------------------------
| Small Gold Small Small Small Int'l Small Int'l Large
| Value Growth Growth Value Growth Value
| ---------------------------------------------------------------------------------------------
| Gold Int'l Int'l Small Bond Large Large Large Large
| Value Growth Growth Growth Growth
| ---------------------------------------------------------------------------------------------
| Int'l Bond Gold Gold Gold Small Int'l Small Bond
| Growth Growth
WORST ---------------------------------------------------------------------------------------------
PERFORMERS
Source: Steele Systems, Inc. Toronto Stock Exchange and Bloomberg.
6
MONEY MARKET FUNDS
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The U.S. Treasury Securities Cash Fund seeks to obtain a high level of current
income while maintaining the highest degree of safety of principal and
liquidity. The U.S. Government Securities Savings Fund seeks to achieve a
consistently high yield with safety of principal.
PERFORMANCE
U.S. TREASURY SECURITIES CASH FUND As of June 30, 2004
7-Day Yield 0.08%
---------------------------------------------------------------
7-Day Effective Yield 0.08%
---------------------------------------------------------------
Weighted Average Days to Maturity 51
U.S. GOVERNMENT SECURITIES SAVINGS FUND As of June 30, 2004
7-Day Yield 0.70%
---------------------------------------------------------------
7-Day Effective Yield 0.70%
---------------------------------------------------------------
Weighted Average Days to Maturity 47
An investment in either the U.S. Government Securities Savings Fund or the U.S.
Treasury Securities Cash Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation (FDIC) or by any other government agency. Although
the funds seek to preserve the value of your investments at $1.00 per share, it
is possible to lose money by investing in the funds.
THE YEAR IN REVIEW - ECONOMIC AND
POLITICAL ISSUES THAT AFFECTED THE FUND
The bond markets have seen wide sentiment swings over the past year, which has
led to an unusual amount of volatility. A year ago deflation fears were at their
peak, leading to speculation of a "bond bubble." Bond yields soon reversed
direction, which led to a brutal selloff in July and August of 2003. The bond
market stabilized and yields drifted lower for the next six months, as the
economic data gained strength and inflation continued to move lower. That
changed in early April as a surprisingly strong employment report put a Fed rate
hike back in play. From April to June, the economic and inflation data were
surprisingly strong, culminating in a 25-basis-point interest rate increase from
the Fed on June 30, 2004. The yields on the three-month T-Bill rose 40 basis
points to 1.25 percent, and yields on the six-month T-Bills were up 67 basis
points to 1.61 percent.
7
MONEY MARKET FUNDS
INVESTMENT HIGHLIGHTS
For much of the period, the U.S. Government Securities Savings Fund took a
laddered approach by buying fixed-rate securities across the money market
spectrum. The fund also reduced its exposure to floating-rate securities. The
fund averaged a weighted average maturity of 64 days, which was longer than the
peer group average, but declined to less than 50 days by the end of June 2004.
Yields moved higher over this time, with one-year agency bond yields increasing
by more than 125 basis points, while very short-term maturities moved up with
the Fed funds rate. The fund took advantage of these progressively higher yields
by selectively extending its ladder out through the end of 2004 and early 2005.
The U.S. Treasury Securities Cash Fund followed a similar laddered strategy,
averaging a weighted average maturity of 58 days. The fund took advantage of the
volatility and used short-term trading opportunities to add to positions.
CURRENT OUTLOOK
The Federal Reserve (Fed) has just begun the first of what is likely several
interest rate increases. The Fed currently has a window of opportunity to raise
interest rates. Economic growth is still robust, inflation is finally on the
upswing and international growth prospects are strong. The Fed needs to increase
interest rates now, before they are backed into a corner of inflexible monetary
policy. At a 1 percent Fed funds rate, the Fed would not be able to effectively
maneuver to stimulate the economy. Even at historically low rates of 2 to 3
percent, the Fed could have difficulty stimulating a faltering economy. Current
expectations are for the Fed to raise interest rates to about 2 percent by the
end of 2004 and possibly as high as 4 percent by the end of 2005. As is always
the case, the Fed will be driven by economic data, and forecasting out 12 to 18
months is always perilous. This recent move from the Fed will be the first of
many.
8
TAX FREE FUNDS
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The Tax Free and Near-Term Tax Free Funds seek to provide a high level of
current income that is exempt from federal income taxation and to preserve
capital. The Near-Term Tax Free Fund maintains a weighted average maturity of
less than five years, while the Tax Free Fund generally maintains a longer
weighted average maturity.
PERFORMANCE
NEAR-TERM TAX FREE FUND
[Graphic: Line graph created from data points in following table.]
NEAR-TERM LEHMAN 3-YEAR
DATE TAX FREE FUND MUNICIPAL BOND INDEX
-------- --------- ------------------
6/30/1994 $ 10,000.00 $ 10,000.00
7/29/1994 $ 10,086.62 $ 10,083.11
8/31/1994 $ 10,115.58 $ 10,119.06
9/30/1994 $ 10,105.89 $ 10,093.60
10/31/1994 $ 10,086.45 $ 10,068.89
11/30/1994 $ 10,057.22 $ 10,050.92
12/30/1994 $ 10,125.70 $ 10,094.35
1/31/1995 $ 10,194.38 $ 10,178.21
2/28/1995 $ 10,253.42 $ 10,285.29
3/31/1995 $ 10,322.57 $ 10,377.39
4/28/1995 $ 10,352.32 $ 10,412.58
5/31/1995 $ 10,461.81 $ 10,572.07
6/30/1995 $ 10,501.78 $ 10,597.53
7/31/1995 $ 10,561.97 $ 10,709.10
8/31/1995 $ 10,612.26 $ 10,792.96
9/29/1995 $ 10,642.55 $ 10,823.66
10/31/1995 $ 10,683.10 $ 10,875.33
11/30/1995 $ 10,754.32 $ 10,944.96
12/29/1995 $ 10,784.96 $ 10,989.89
1/31/1996 $ 10,867.13 $ 11,076.00
2/29/1996 $ 10,867.13 $ 11,078.25
3/29/1996 $ 10,815.43 $ 11,051.29
4/30/1996 $ 10,815.43 $ 11,064.77
5/31/1996 $ 10,825.84 $ 11,074.50
6/28/1996 $ 10,888.53 $ 11,140.40
7/31/1996 $ 10,951.47 $ 11,202.55
8/30/1996 $ 10,983.07 $ 11,219.02
9/30/1996 $ 11,057.06 $ 11,287.16
10/31/1996 $ 11,131.34 $ 11,365.78
11/29/1996 $ 11,248.51 $ 11,472.11
12/31/1996 $ 11,248.51 $ 11,477.35
1/31/1997 $ 11,291.49 $ 11,527.52
2/28/1997 $ 11,354.04 $ 11,583.68
3/31/1997 $ 11,278.27 $ 11,523.77
4/30/1997 $ 11,333.69 $ 11,573.19
5/30/1997 $ 11,439.50 $ 11,667.54
6/30/1997 $ 11,525.98 $ 11,736.43
7/31/1997 $ 11,718.26 $ 11,875.70
8/29/1997 $ 11,657.63 $ 11,852.49
9/30/1997 $ 11,767.13 $ 11,937.10
10/31/1997 $ 11,818.19 $ 11,990.27
11/28/1997 $ 11,856.06 $ 12,024.71
12/31/1997 $ 11,980.10 $ 12,106.33
1/30/1998 $ 12,076.57 $ 12,186.45
2/27/1998 $ 12,070.94 $ 12,211.91
3/31/1998 $ 12,066.42 $ 12,231.37
4/30/1998 $ 12,050.56 $ 12,214.90
5/29/1998 $ 12,181.30 $ 12,327.97
6/30/1998 $ 12,220.08 $ 12,369.15
7/31/1998 $ 12,256.83 $ 12,414.08
8/31/1998 $ 12,395.19 $ 12,534.63
9/30/1998 $ 12,515.56 $ 12,614.00
10/30/1998 $ 12,509.76 $ 12,675.40
11/30/1998 $ 12,528.38 $ 12,706.10
12/31/1998 $ 12,535.38 $ 12,736.80
1/29/1999 $ 12,645.51 $ 12,852.11
2/26/1999 $ 12,614.95 $ 12,866.34
3/31/1999 $ 12,625.56 $ 12,877.57
4/30/1999 $ 12,665.79 $ 12,917.26
5/28/1999 $ 12,630.18 $ 12,898.54
6/30/1999 $ 12,507.57 $ 12,821.41
7/30/1999 $ 12,567.30 $ 12,885.06
8/31/1999 $ 12,528.93 $ 12,900.79
9/30/1999 $ 12,563.83 $ 12,949.46
10/29/1999 $ 12,540.90 $ 12,950.95
11/30/1999 $ 12,611.11 $ 13,007.86
12/31/1999 $ 12,585.60 $ 12,986.90
1/31/2000 $ 12,569.74 $ 13,010.11
2/29/2000 $ 12,611.36 $ 13,051.29
3/31/2000 $ 12,716.96 $ 13,118.68
4/28/2000 $ 12,683.69 $ 13,120.18
5/31/2000 $ 12,670.09 $ 13,133.66
6/30/2000 $ 12,838.86 $ 13,299.89
7/31/2000 $ 12,957.16 $ 13,407.67
8/31/2000 $ 13,070.87 $ 13,508.97
9/29/2000 $ 13,064.59 $ 13,512.87
10/31/2000 $ 13,148.92 $ 13,589.49
11/30/2000 $ 13,207.03 $ 13,644.03
12/29/2000 $ 13,402.22 $ 13,795.98
1/31/2001 $ 13,542.09 $ 14,005.38
2/28/2001 $ 13,571.44 $ 14,060.16
3/30/2001 $ 13,659.79 $ 14,158.99
4/30/2001 $ 13,601.96 $ 14,138.31
5/31/2001 $ 13,712.84 $ 14,267.09
6/30/2001 $ 13,764.58 $ 14,330.63
7/31/2001 $ 13,887.83 $ 14,448.11
8/31/2001 $ 14,036.21 $ 14,596.44
9/30/2001 $ 14,075.38 $ 14,670.92
10/31/2001 $ 14,174.89 $ 14,766.34
11/30/2001 $ 14,082.93 $ 14,719.18
12/31/2001 $ 14,021.01 $ 14,705.13
1/31/2002 $ 14,208.66 $ 14,891.89
2/28/2002 $ 14,327.95 $ 15,003.58
3/31/2002 $ 14,111.31 $ 14,780.03
4/30/2002 $ 14,359.39 $ 14,997.29
5/31/2002 $ 14,427.64 $ 15,084.28
6/30/2002 $ 14,541.72 $ 15,214.00
7/31/2002 $ 14,664.13 $ 15,332.67
8/31/2002 $ 14,797.69 $ 15,430.80
9/30/2002 $ 14,993.82 $ 15,552.70
10/31/2002 $ 14,855.54 $ 15,467.16
11/30/2002 $ 14,818.84 $ 15,471.80
12/31/2002 $ 15,029.96 $ 15,694.60
1/31/2003 $ 15,053.16 $ 15,744.82
2/28/2003 $ 15,191.38 $ 15,845.59
3/31/2003 $ 15,188.64 $ 15,826.57
4/30/2003 $ 15,249.12 $ 15,869.30
5/31/2003 $ 15,461.25 $ 15,991.50
6/30/2003 $ 15,410.18 $ 15,965.91
7/31/2003 $ 15,110.00 $ 15,822.22
8/31/2003 $ 15,213.96 $ 15,902.91
9/30/2003 $ 15,501.57 $ 16,141.45
10/31/2003 $ 15,427.75 $ 16,065.59
11/30/2003 $ 15,473.83 $ 16,081.66
12/31/2003 $ 15,526.99 $ 16,115.43
1/31/2004 $ 15,588.71 $ 16,171.83
2/29/2004 $ 15,732.08 $ 16,309.29
3/31/2004 $ 15,687.01 $ 16,265.26
4/30/2004 $ 15,480.87 $ 16,100.98
5/31/2004 $ 15,415.77 $ 16,038.18
6/30/2004 $ 15,441.30 $ 16,067.05
- -----------------------------------------------
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2004
One Year Five Year Ten Year
Near-Term Tax Free Fund 0.20% 4.30% 4.44%
----------------------------------------------------------------------
Lehman 3-Year Municipal Bond Index 0.63% 4.62% 4.86%
Performance data quoted represent past performance. Investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
The Lehman Brothers 3-Year Municipal Bond Index is a total return benchmark
designed for municipal assets. The index includes bonds with a minimum credit
rating of BAA3, are issued as part of a deal of at least 50 million, have an
amount outstanding of at least 5 million and have a maturity of two to four
years.
The Adviser limited the fund's total operating expenses to 0.45% for the year
ended June 30, 2004.
9
TAX FREE FUNDS
TAX FREE FUND
[Graphic: Line graph created from data points in following table.]
TAX FREE LEHMAN 10-YEAR
DATE FUND MUNICIPAL BOND INDEX
-------- --------- ------------------
6/30/1994 $ 10,000.00 $ 10,000.00
7/29/1994 $ 10,157.89 $ 10,167.97
8/31/1994 $ 10,210.75 $ 10,207.27
9/30/1994 $ 10,086.77 $ 10,070.01
10/31/1994 $ 9,891.09 $ 9,922.93
11/30/1994 $ 9,649.84 $ 9,735.31
12/30/1994 $ 9,874.46 $ 9,910.64
1/31/1995 $ 10,146.49 $ 10,167.35
2/28/1995 $ 10,365.08 $ 10,455.08
3/31/1995 $ 10,502.31 $ 10,596.33
4/28/1995 $ 10,529.87 $ 10,609.22
5/31/1995 $ 10,797.50 $ 10,945.77
6/30/1995 $ 10,751.16 $ 10,877.60
7/31/1995 $ 10,807.01 $ 11,037.28
8/31/1995 $ 10,909.76 $ 11,187.13
9/29/1995 $ 10,984.81 $ 11,258.67
10/31/1995 $ 11,116.70 $ 11,388.56
11/30/1995 $ 11,258.61 $ 11,541.48
12/29/1995 $ 11,363.12 $ 11,612.11
1/31/1996 $ 11,429.91 $ 11,729.72
2/29/1996 $ 11,372.42 $ 11,681.51
3/29/1996 $ 11,237.73 $ 11,536.26
4/30/1996 $ 11,208.76 $ 11,495.42
5/31/1996 $ 11,218.46 $ 11,463.18
6/28/1996 $ 11,315.84 $ 11,572.19
7/31/1996 $ 11,413.56 $ 11,683.04
8/30/1996 $ 11,413.56 $ 11,683.35
9/30/1996 $ 11,551.55 $ 11,803.41
10/31/1996 $ 11,650.45 $ 11,952.65
11/29/1996 $ 11,829.23 $ 12,194.62
12/31/1996 $ 11,799.31 $ 12,139.65
1/31/1997 $ 11,839.37 $ 12,187.56
2/28/1997 $ 11,937.95 $ 12,302.40
3/31/1997 $ 11,825.84 $ 12,137.50
4/30/1997 $ 11,926.25 $ 12,226.86
5/30/1997 $ 12,076.98 $ 12,400.05
6/30/1997 $ 12,212.99 $ 12,537.00
7/31/1997 $ 12,516.00 $ 12,889.21
8/29/1997 $ 12,409.81 $ 12,764.23
9/30/1997 $ 12,545.40 $ 12,926.06
10/31/1997 $ 12,604.64 $ 12,994.53
11/28/1997 $ 12,678.73 $ 13,054.72
12/31/1997 $ 12,871.37 $ 13,260.76
1/30/1998 $ 12,983.89 $ 13,407.85
2/27/1998 $ 12,967.00 $ 13,406.93
3/31/1998 $ 12,954.29 $ 13,397.72
4/30/1998 $ 12,900.04 $ 13,324.02
5/29/1998 $ 13,109.35 $ 13,550.64
6/30/1998 $ 13,154.37 $ 13,600.38
7/31/1998 $ 13,196.42 $ 13,622.18
8/31/1998 $ 13,404.27 $ 13,858.93
9/30/1998 $ 13,562.99 $ 14,064.98
10/30/1998 $ 13,517.16 $ 14,071.12
11/30/1998 $ 13,579.60 $ 14,113.18
12/31/1998 $ 13,593.90 $ 14,157.10
1/29/1999 $ 13,753.17 $ 14,373.89
2/26/1999 $ 13,662.15 $ 14,244.92
3/31/1999 $ 13,685.53 $ 14,237.55
4/30/1999 $ 13,723.55 $ 14,275.62
5/28/1999 $ 13,602.36 $ 14,175.52
6/30/1999 $ 13,336.62 $ 13,912.06
7/30/1999 $ 13,363.74 $ 14,005.40
8/31/1999 $ 13,192.44 $ 13,953.82
9/30/1999 $ 13,187.89 $ 14,000.80
10/29/1999 $ 12,975.14 $ 13,901.92
11/30/1999 $ 13,133.60 $ 14,053.92
12/31/1999 $ 12,991.77 $ 13,980.84
1/31/2000 $ 12,860.46 $ 13,923.72
2/29/2000 $ 13,041.34 $ 14,033.04
3/31/2000 $ 13,388.18 $ 14,306.02
4/28/2000 $ 13,283.47 $ 14,234.17
5/31/2000 $ 13,173.66 $ 14,149.73
6/30/2000 $ 13,545.99 $ 14,534.18
7/31/2000 $ 13,740.01 $ 14,735.80
8/31/2000 $ 13,951.49 $ 14,963.69
9/29/2000 $ 13,847.12 $ 14,895.19
10/31/2000 $ 14,025.33 $ 15,047.58
11/30/2000 $ 14,138.98 $ 15,128.67
12/29/2000 $ 14,517.64 $ 15,485.18
1/31/2001 $ 14,650.39 $ 15,685.08
2/28/2001 $ 14,674.85 $ 15,711.39
3/30/2001 $ 14,803.68 $ 15,845.35
4/30/2001 $ 14,611.56 $ 15,649.05
5/31/2001 $ 14,762.37 $ 15,819.39
6/30/2001 $ 14,875.26 $ 15,913.47
7/31/2001 $ 15,089.36 $ 16,132.76
8/31/2001 $ 15,342.93 $ 16,406.19
9/30/2001 $ 15,275.24 $ 16,384.70
10/31/2001 $ 15,457.54 $ 16,586.94
11/30/2001 $ 15,268.26 $ 16,372.24
12/31/2001 $ 15,070.76 $ 16,200.59
1/31/2002 $ 15,341.43 $ 16,506.78
2/28/2002 $ 15,540.37 $ 16,742.83
3/31/2002 $ 15,197.59 $ 16,397.93
4/30/2002 $ 15,537.74 $ 16,778.36
5/31/2002 $ 15,617.61 $ 16,857.22
6/30/2002 $ 15,794.73 $ 17,066.25
7/31/2002 $ 15,982.77 $ 17,293.23
8/31/2002 $ 16,148.06 $ 17,518.04
9/30/2002 $ 16,474.42 $ 17,936.72
10/31/2002 $ 16,203.33 $ 17,610.27
11/30/2002 $ 16,107.40 $ 17,465.87
12/31/2002 $ 16,427.71 $ 17,848.37
1/31/2003 $ 16,374.80 $ 17,753.78
2/28/2003 $ 16,584.12 $ 18,060.92
3/31/2003 $ 16,566.86 $ 18,069.95
4/30/2003 $ 16,676.06 $ 18,203.66
5/31/2003 $ 17,067.26 $ 18,724.29
6/30/2003 $ 16,977.57 $ 18,634.41
7/31/2003 $ 16,314.58 $ 17,851.77
8/31/2003 $ 16,453.22 $ 18,005.29
9/30/2003 $ 16,905.38 $ 18,612.07
10/31/2003 $ 16,803.87 $ 18,470.62
11/30/2003 $ 16,926.03 $ 18,670.10
12/31/2003 $ 17,033.52 $ 18,868.00
1/31/2004 $ 17,134.52 $ 18,947.25
2/29/2004 $ 17,380.86 $ 19,280.72
3/31/2004 $ 17,295.81 $ 19,170.82
4/30/2004 $ 16,887.15 $ 18,641.71
5/31/2004 $ 16,836.10 $ 18,652.89
6/30/2004 $ 16,765.55 $ 18,714.45
- ------------------------------------------------
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2004
One Year Five Year Ten Year
Tax Free Fund (1.25)% 4.68% 5.30%
-----------------------------------------------------------------------
Lehman 10-Year Municipal Bond Index 0.43% 6.11% 6.47%
Performance data quoted represent past performance. Investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
The Lehman Brothers 10-Year Municipal Bond Index is a total return benchmark
designed for long-term municipal assets. The index includes bonds with a
minimum credit rating of BAA3, are issued as part of a deal of at least 50
million, have an amount outstanding of at least 5 million and have a maturity
of 8 to 12 years.
The Adviser limited the fund's total operating expenses to 0.70% for the year
ended June 30, 2004.
THE YEAR IN REVIEW - ECONOMIC AND
POLITICAL ISSUES THAT AFFECTED THE FUND
Municipals have maintained their momentum over the past year, with positive
returns across the yield curve. Returns varied somewhat, with the very short end
and the long-to-intermediate portion of the curve posting the best performance,
while the 5- to 10-year area lagged. During the past year, yields ended roughly
were they began. In July and August of 2003, municipal bond yields rose sharply
as investors determined deflation fears were overdone and economic activity was
picking up. Bond yields rallied last fall and early spring of this year,
undercutting yield lows last seen in June 2003. While economic data was
positive, inflation and job creation
10
TAX FREE FUNDS
were lackluster, allowing yields to fall. Municipal bonds abruptly reversed
course and experienced a brutal selloff, peaking in mid-June. This selloff was
sparked by significant improvement in employment data, which showed the economy
beginning to create a meaningful number of jobs in the second quarter of 2004.
Based on the improving economic data and early signs of an inflation uptick, the
Fed raised interest rates by 25 basis points on June 30, 2004. By a wide margin,
the best performing municipal sector over the past year has been the industrial
development sector. However, the sector--which is leveraged to volatile
tobacco-backed municipals--has been one of the weakest areas over the past six
months. The high yield portion of the municipal market, which is tied to
airline-backed bonds, also posted very strong returns over the past year.
Industrial development and hospital bonds were the best revenue bond performers,
while education and water-and-sewer issues lagged.
INVESTMENT HIGHLIGHTS
The Tax Free Fund was conservatively positioned due to the ambiguous
interest-rate outlook. On a maturity basis, the fund was underweight to its
benchmark and took less interest-rate risk. The fund lacked exposure to risky
airline- and tobacco-backed bonds, which were by far the best performing sectors
over the past 12 months. The Near-Term Tax Free Fund also maintained a
relatively conservative interest-rate risk position. Both funds followed a
similar strategy of reducing interest-rate exposure and adding to lower quality
credits with higher yields.
CURRENT OUTLOOK
The economy appears to be on solid footing, as job creation has picked up and
the much-anticipated capital spending cycle is likely to emerge. The inflation
outlook is a little more worrisome as inflation appears to have turned a corner
and is heading higher. The Fed just began the process of normalizing interest
rates, which is likely to last 12 to 18 months. The market is expecting the Fed
to raise interest rates to 2 percent by the end of 2004. The market has had
ample time to prepare for higher interest rates, and current yields reflect that
outlook. At the same time, it is likely too early in the interest-rate cycle to
aggressively buy longer maturities. The funds will look for opportunities
presented by the market as sentiment swings from one extreme to another.
11
TAX FREE FUNDS
MUNICIPAL BOND RATINGS June 30, 2004
(BASED ON TOTAL INVESTMENTS)
NEAR-TERM TAX FREE FUND
AAA 35.49%
---------------------------------------------------------------
AA 34.39%
---------------------------------------------------------------
A 19.39%
---------------------------------------------------------------
BBB 8.31%
TAX FREE FUND
AAA 47.98%
---------------------------------------------------------------
AA 32.89%
---------------------------------------------------------------
A 10.74%
---------------------------------------------------------------
BBB 5.04%
12
ALL AMERICAN EQUITY FUND
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The principal objective of the All American Equity Fund is to seek capital
appreciation by investing primarily in a broadly diversified portfolio of
domestic common stocks. The fund invests in large-capitalization stocks, while
retaining the flexibility to seek out promising small- and mid-cap stock
opportunities. The fund seeks capital appreciation and does not emphasize
income.
PERFORMANCE
ALL AMERICAN EQUITY FUND
[Graphic: Line graph created from data points in following table.]
ALL AMERICAN S&P 500
DATE EQUITY FUND INDEX
-------- ------------ --------------
6/30/1994 $ 10,000.00 $ 10,000.00
7/29/1994 $ 10,343.24 $ 10,328.37
8/31/1994 $ 10,671.11 $ 10,751.83
9/30/1994 $ 10,368.85 $ 10,488.91
10/31/1994 $ 10,466.62 $ 10,724.56
11/30/1994 $ 10,039.52 $ 10,333.91
12/30/1994 $ 10,132.14 $ 10,487.27
1/31/1995 $ 10,312.14 $ 10,759.24
2/28/1995 $ 10,602.46 $ 11,178.55
3/31/1995 $ 10,869.56 $ 11,508.39
4/28/1995 $ 11,190.79 $ 11,847.27
5/31/1995 $ 11,564.60 $ 12,320.79
6/30/1995 $ 11,798.23 $ 12,606.97
7/31/1995 $ 12,097.88 $ 13,025.05
8/31/1995 $ 12,045.00 $ 13,057.79
9/29/1995 $ 12,562.06 $ 13,608.85
10/31/1995 $ 12,597.51 $ 13,560.21
11/30/1995 $ 13,064.30 $ 14,155.49
12/29/1995 $ 13,259.29 $ 14,428.15
1/31/1996 $ 13,668.27 $ 14,919.23
2/29/1996 $ 13,816.46 $ 15,057.55
3/29/1996 $ 13,923.15 $ 15,202.49
4/30/1996 $ 14,125.45 $ 15,426.63
5/31/1996 $ 14,565.75 $ 15,824.47
6/28/1996 $ 14,666.90 $ 15,884.84
7/31/1996 $ 14,159.09 $ 15,183.04
8/30/1996 $ 14,356.24 $ 15,503.32
9/30/1996 $ 15,085.11 $ 16,375.92
10/31/1996 $ 15,397.13 $ 16,827.58
11/29/1996 $ 16,483.21 $ 18,099.52
12/31/1996 $ 16,213.19 $ 17,740.89
1/31/1997 $ 17,325.98 $ 18,849.25
2/28/1997 $ 17,344.63 $ 18,996.99
3/31/1997 $ 16,675.71 $ 18,216.76
4/30/1997 $ 17,811.13 $ 19,303.93
5/30/1997 $ 18,815.54 $ 20,479.22
6/30/1997 $ 19,607.22 $ 21,396.72
7/31/1997 $ 20,808.43 $ 23,099.21
8/29/1997 $ 19,738.60 $ 21,805.15
9/30/1997 $ 20,640.13 $ 22,999.35
10/31/1997 $ 20,006.50 $ 22,231.24
11/28/1997 $ 20,796.97 $ 23,260.37
12/31/1997 $ 21,126.34 $ 23,659.84
1/30/1998 $ 21,540.83 $ 23,921.53
2/27/1998 $ 22,886.33 $ 25,646.86
3/31/1998 $ 23,946.16 $ 26,960.21
4/30/1998 $ 24,310.53 $ 27,231.45
5/29/1998 $ 23,958.94 $ 26,763.40
6/30/1998 $ 24,961.92 $ 27,850.50
7/31/1998 $ 24,884.72 $ 27,553.94
8/31/1998 $ 21,622.94 $ 23,570.27
9/30/1998 $ 22,997.77 $ 25,080.19
10/30/1998 $ 24,448.84 $ 27,120.26
11/30/1998 $ 25,977.30 $ 28,763.96
12/31/1998 $ 27,219.27 $ 30,421.49
1/29/1999 $ 28,188.07 $ 31,693.60
2/26/1999 $ 27,338.71 $ 30,708.60
3/31/1999 $ 28,041.43 $ 31,937.20
4/30/1999 $ 28,733.48 $ 33,173.99
5/28/1999 $ 28,261.02 $ 32,390.57
6/30/1999 $ 29,826.12 $ 34,188.22
7/30/1999 $ 28,820.37 $ 33,120.71
8/31/1999 $ 28,447.38 $ 32,956.85
9/30/1999 $ 27,578.84 $ 32,053.37
10/29/1999 $ 29,239.97 $ 34,081.73
11/30/1999 $ 29,666.93 $ 34,774.55
12/31/1999 $ 31,195.98 $ 36,822.64
1/31/2000 $ 29,638.21 $ 34,972.58
2/29/2000 $ 29,001.56 $ 34,310.56
3/31/2000 $ 31,549.52 $ 37,666.95
4/28/2000 $ 30,769.94 $ 36,533.88
5/31/2000 $ 29,888.66 $ 35,784.31
6/30/2000 $ 30,638.42 $ 36,666.51
7/31/2000 $ 29,817.87 $ 36,093.26
8/31/2000 $ 31,798.04 $ 38,335.17
9/29/2000 $ 29,431.33 $ 36,311.33
10/31/2000 $ 28,359.87 $ 36,157.82
11/30/2000 $ 25,183.29 $ 33,307.15
12/29/2000 $ 25,328.63 $ 33,470.17
1/31/2001 $ 25,545.11 $ 34,657.66
2/28/2001 $ 22,436.40 $ 31,497.52
3/30/2001 $ 20,844.81 $ 29,502.13
4/30/2001 $ 22,769.75 $ 31,794.75
5/31/2001 $ 22,639.68 $ 32,007.77
6/30/2001 $ 22,071.74 $ 31,228.75
7/31/2001 $ 21,568.53 $ 30,921.33
8/31/2001 $ 19,946.12 $ 28,985.60
9/30/2001 $ 19,062.04 $ 26,644.94
10/31/2001 $ 19,287.72 $ 27,153.03
11/30/2001 $ 20,450.89 $ 29,235.84
12/31/2001 $ 20,502.97 $ 29,491.96
1/31/2002 $ 19,808.55 $ 29,061.58
2/28/2002 $ 19,322.45 $ 28,501.12
3/31/2002 $ 20,207.84 $ 29,573.03
4/30/2002 $ 19,200.92 $ 27,780.08
5/31/2002 $ 20,546.37 $ 27,575.42
6/30/2002 $ 18,402.33 $ 25,610.96
7/31/2002 $ 15,971.83 $ 23,614.72
8/31/2002 $ 16,266.96 $ 23,769.76
9/30/2002 $ 14,834.71 $ 21,186.47
10/31/2002 $ 15,572.54 $ 23,051.23
11/30/2002 $ 15,633.30 $ 24,408.00
12/31/2002 $ 15,051.72 $ 22,974.08
1/31/2003 $ 14,852.07 $ 22,372.25
2/28/2003 $ 14,609.02 $ 22,036.57
3/31/2003 $ 14,826.03 $ 22,250.53
4/30/2003 $ 15,945.79 $ 24,083.31
5/31/2003 $ 16,657.58 $ 25,352.20
6/30/2003 $ 16,622.86 $ 25,675.61
7/31/2003 $ 17,030.84 $ 26,128.31
8/31/2003 $ 17,612.42 $ 26,637.87
9/30/2003 $ 17,369.37 $ 26,354.99
10/31/2003 $ 18,671.42 $ 27,845.89
11/30/2003 $ 19,339.81 $ 28,090.89
12/31/2003 $ 19,765.14 $ 29,564.10
1/31/2004 $ 19,825.91 $ 30,106.75
2/29/2004 $ 20,086.32 $ 30,525.22
3/31/2004 $ 19,938.75 $ 30,064.70
4/30/2004 $ 18,818.99 $ 29,592.74
5/31/2004 $ 19,053.36 $ 29,998.83
6/30/2004 $ 19,556.82 $ 30,582.16
- ----------------------------------------------------
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2004
One Year Five Year Ten Year
All American Equity Fund 17.65% (8.09)% 6.93%
----------------------------------------------------------------------
S&P 500 Index 19.11% (2.20)% 11.83%
Performance data quoted represent past performance. Investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
The S&P 500 Index is a widely recognized capitalization-weighted index of 500
common stock prices in U.S. companies. The Adviser limited the fund's total
operating expenses to 1.75% for the year ended June 30, 2004.
13
ALL AMERICAN EQUITY FUND
THE YEAR IN REVIEW - ECONOMIC AND
POLITICAL ISSUES THAT AFFECTED THE FUND
The S&P 500 had a very good year, as investors focused on the strong earnings
growth delivered by the market. With the economy improving and earnings growing,
investors became more bullish on the markets. In addition, the presidential
election cycle favored a positive market environment. Slowly but surely, the
employment picture improved and there was finally evidence of wage
growth--additional bullish signs for the market overall.
It was generally acknowledged at the end of 2003 that the risk bubble basically
deflated. The spread between junk bonds and Treasury securities was cut in half
by the end of 2003, while the spread between A-rated corporate bonds and
Treasury issues fell to less than 1 percent.
Uncertainty about the outcome of the election and the continued turmoil in Iraq
led to some moderation in the market's advance. In addition, the Federal Reserve
raised the Fed funds rate by 25 basis points on June 30, 2004 and is expected to
continue a measured pace of interest rate increases in the future.
INVESTMENT HIGHLIGHTS
The first half of the fiscal year was marked by a sense of optimism about the
economy and the outlook for corporate profits. The market was particularly
strong in the fourth quarter of 2003, when the S&P 500 returned 12.2 percent.
The economically sensitive sectors were the best performers during the year,
with materials, energy, industrials and technology all returning more than 20
percent.
As we entered 2004, investors seemed to prefer stocks with a lower risk profile,
as larger names started outperforming the smaller caps. Fears about a growing
federal deficit, a more cautious consumer and the lack of solid job growth led
to a meager 1.7 percent gain in the S&P 500 in the first quarter of 2004.
The second quarter of 2004 was met with rising rates across the yield curve,
particularly at the short end. It seemed that quality was the watchword of the
quarter as the larger names continued their outperformance.
The All American Equity Fund's portfolio was consistently overweighted in the
basic material, energy and industrial sectors during the past year. The fund
team underweighted the information technology and financial
14
ALL AMERICAN EQUITY FUND
sectors entering 2004. The portfolio's basic material exposure was primarily in
the gold sector for most of the year. Studies have shown healthcare to be the
best performing sector in a rising rate environment, so we continued to
overweight that sector. Technology was less emphasized due to valuation, and
financials were less emphasized due to that sector's tendency to underperform in
a rising rate environment.
CURRENT OUTLOOK
With the markets nervous about many things, stock selection will be key to
performance over the next 12 months. While the presidential election cycle
should drive the overall market in the first half of the fiscal year, it could
work against the market in the second half. The dollar should continue to be
weak even in the face of rising rates, as the deficit continues to loom over the
strength in the dollar. As we get closer to the election, and it becomes clearer
who may win, the market's direction will likely be decided.
15
ALL AMERICAN EQUITY FUND
TOP 10 EQUITY HOLDINGS BASED ON TOTAL INVESTMENTS June 30, 2004
CITIGROUP, INC. 2.20%
FINANCIAL SERVICES
---------------------------------------------------------------
WHEATON RIVER MINERALS LTD. 2.16%
METAL & MINERAL MINING
---------------------------------------------------------------
GENERAL ELECTRIC CO. 2.10%
HOUSEHOLD APPLIANCES
---------------------------------------------------------------
ELI LILLY & CO. 1.91%
PHARMACEUTICALS
---------------------------------------------------------------
LEGG MASON, INC. 1.90%
FINANCIAL SERVICES
---------------------------------------------------------------
MICROSOFT CORP. 1.89%
DATA PROCESSING & SOFTWARE
---------------------------------------------------------------
PFIZER, INC. 1.65%
PHARMACEUTICALS
---------------------------------------------------------------
CISCO SYSTEMS, INC. 1.42%
COMPUTER & OFFICE EQUIPMENT
---------------------------------------------------------------
AMGEN, INC. 1.36%
BIOTECHNOLOGY
---------------------------------------------------------------
VCA ANTECH, INC. 1.34%
HEALTHCARE EQUIPMENT & FACILITIES
TOP 5 INDUSTRIES BASED ON TOTAL INVESTMENTS June 30, 2004
FINANCIAL SERVICES 8.13%
PHARMACEUTICALS 7.39%
INSURANCE 6.72%
RETAIL 6.56%
METAL & MINERAL MINING 6.26%
16
CHINA REGION OPPORTUNITY FUND
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The China Region Opportunity Fund seeks to achieve capital appreciation by
focusing on the economic growth in the greater China region, including China,
Hong Kong, Singapore, Korea, Taiwan and other Asian countries. The fund
emphasizes a long-term growth approach over current income.
PERFORMANCE
CHINA REGION OPPORTUNITY FUND
[Graphic: Line graph created from data points in following table.]
CHINA REGION MORGAN STANLEY CAPITAL IFC EMERGING MARKETS
DATE OPPORTUNITY FUND FAR EAST FREE ex INVESTABLE TOTAL
JAPAN INDEX CHINA INDEX
-------- ---------------- ------------------ ------------------
6/30/1994 $ 10,000.00 $10,000.00 $10,000.00
7/29/1994 $ 10,529.03 $11,265.35 $10,544.26
8/31/1994 $ 11,174.19 $12,039.56 $11,385.57
9/30/1994 $ 11,251.61 $12,343.11 $11,182.79
10/31/1994 $ 11,032.01 $12,193.04 $11,387.56
11/30/1994 $ 9,804.79 $10,362.67 $10,287.08
12/30/1994 $ 9,158.89 $ 8,893.82 $10,018.51
1/31/1995 $ 8,190.04 $ 7,557.98 $ 8,932.27
2/28/1995 $ 8,577.58 $ 8,412.92 $ 9,822.85
3/31/1995 $ 8,551.74 $ 8,550.48 $ 9,841.36
4/28/1995 $ 8,202.96 $ 7,492.04 $ 9,728.01
5/31/1995 $ 8,939.28 $ 8,614.14 $10,897.41
6/30/1995 $ 8,719.68 $ 8,390.18 $10,719.41
7/31/1995 $ 9,007.28 $ 8,776.72 $10,871.50
8/31/1995 $ 8,902.70 $ 8,367.44 $10,337.49
9/29/1995 $ 8,837.33 $ 8,185.54 $10,503.16
10/31/1995 $ 8,523.12 $ 7,730.79 $10,329.49
11/30/1995 $ 8,038.70 $ 6,991.81 $10,206.94
12/29/1995 $ 7,868.50 $ 6,628.01 $10,700.87
1/31/1996 $ 8,459.62 $ 7,537.52 $11,667.18
2/29/1996 $ 8,617.26 $ 7,753.52 $11,610.42
3/29/1996 $ 8,380.81 $ 7,344.25 $11,681.93
4/30/1996 $ 8,341.40 $ 7,253.30 $11,987.81
5/31/1996 $ 8,433.35 $ 7,446.57 $11,850.79
6/28/1996 $ 8,538.44 $ 7,423.83 $11,595.95
7/31/1996 $ 8,432.21 $ 7,219.19 $10,740.32
8/30/1996 $ 8,445.49 $ 7,514.78 $11,108.03
9/30/1996 $ 8,485.32 $ 7,480.67 $11,374.46
10/31/1996 $ 8,512.01 $ 7,412.46 $11,146.53
11/29/1996 $ 9,179.09 $ 8,105.96 $11,771.22
12/31/1996 $ 10,059.64 $ 9,331.51 $11,683.47
1/31/1997 $ 10,032.96 $ 9,249.66 $11,837.78
2/28/1997 $ 10,313.14 $ 9,507.73 $11,870.16
3/31/1997 $ 10,166.38 $ 9,205.32 $11,192.24
4/30/1997 $ 10,766.75 $10,544.57 $10,890.18
5/30/1997 $ 11,327.11 $10,401.32 $11,419.66
6/30/1997 $ 11,473.86 $10,524.10 $11,705.83
7/31/1997 $ 12,327.73 $12,152.12 $11,740.72
8/29/1997 $ 12,474.49 $14,084.81 $ 9,562.26
9/30/1997 $ 11,767.38 $11,175.53 $ 9,476.87
10/31/1997 $ 8,938.94 $ 9,164.39 $ 7,149.12
11/28/1997 $ 8,071.73 $ 7,248.75 $ 6,683.07
12/31/1997 $ 7,800.89 $ 7,103.23 $ 6,369.45
1/30/1998 $ 6,092.77 $ 5,050.02 $ 5,819.95
2/27/1998 $ 7,787.44 $ 6,946.34 $ 9,991.63
3/31/1998 $ 7,787.44 $ 6,521.15 $ 6,956.08
4/30/1998 $ 7,155.30 $ 5,717.37 $ 6,226.67
5/29/1998 $ 6,348.31 $ 5,311.51 $ 5,245.44
6/30/1998 $ 5,500.98 $ 4,723.74 $ 4,659.49
7/31/1998 $ 4,653.64 $ 3,669.85 $ 4,518.34
8/31/1998 $ 3,833.20 $ 2,851.30 $ 3,807.42
9/30/1998 $ 4,653.64 $ 3,799.45 $ 4,208.08
10/30/1998 $ 5,285.78 $ 3,773.31 $ 5,348.40
11/30/1998 $ 5,447.18 $ 3,829.01 $ 5,825.84
12/31/1998 $ 5,205.08 $ 3,487.95 $ 5,898.89
1/29/1999 $ 4,554.44 $ 3,044.57 $ 5,697.62
2/26/1999 $ 4,527.33 $ 3,070.71 $ 5,586.92
3/31/1999 $ 5,015.31 $ 3,219.65 $ 6,194.81
4/30/1999 $ 6,059.04 $ 4,138.24 $ 7,617.42
5/28/1999 $ 5,909.93 $ 4,024.56 $ 7,264.75
6/30/1999 $ 7,563.63 $ 5,508.19 $ 8,512.39
7/30/1999 $ 7,184.09 $ 5,287.63 $ 8,171.48
8/31/1999 $ 7,224.76 $ 5,367.21 $ 8,296.68
9/30/1999 $ 6,845.22 $ 5,096.64 $ 7,625.20
10/29/1999 $ 6,777.45 $ 5,088.68 $ 7,984.14
11/30/1999 $ 7,509.41 $ 6,517.74 $ 8,773.35
12/31/1999 $ 8,105.83 $ 7,158.94 $ 9,402.88
1/31/2000 $ 8,146.49 $ 7,215.78 $ 9,188.65
2/29/2000 $ 8,688.69 $ 9,048.43 $ 8,695.12
3/31/2000 $ 9,027.56 $ 9,105.28 $ 9,084.87
4/28/2000 $ 8,105.83 $ 7,753.52 $ 8,334.47
5/31/2000 $ 7,672.07 $ 7,844.48 $ 7,646.30
6/30/2000 $ 8,282.04 $ 9,038.20 $ 7,991.71
7/31/2000 $ 8,322.70 $ 8,926.79 $ 7,694.24
8/31/2000 $ 8,146.49 $ 8,749.43 $ 7,590.03
9/29/2000 $ 7,468.75 $ 7,775.13 $ 6,703.89
10/31/2000 $ 6,804.56 $ 7,413.60 $ 6,173.05
11/30/2000 $ 6,438.57 $ 6,383.58 $ 5,858.37
12/29/2000 $ 6,575.48 $ 6,507.50 $ 5,841.42
1/31/2001 $ 6,850.03 $ 7,227.15 $ 6,622.69
2/28/2001 $ 6,506.84 $ 6,808.78 $ 6,297.88
3/30/2001 $ 6,451.93 $ 6,128.92 $ 5,608.05
4/30/2001 $ 6,712.75 $ 6,906.55 $ 5,616.51
5/31/2001 $ 6,932.39 $ 7,319.24 $ 5,561.52
6/30/2001 $ 6,753.94 $ 7,446.57 $ 5,435.15
7/31/2001 $ 6,191.11 $ 6,457.48 $ 5,218.36
8/31/2001 $ 5,710.65 $ 5,185.31 $ 5,124.37
9/30/2001 $ 5,065.45 $ 4,940.88 $ 4,302.55
10/31/2001 $ 5,257.64 $ 5,013.64 $ 4,517.80
11/30/2001 $ 5,628.28 $ 5,361.53 $ 5,133.23
12/31/2001 $ 5,710.65 $ 5,343.34 $ 5,596.89
1/31/2002 $ 5,847.92 $ 4,961.35 $ 5,822.31
2/28/2002 $ 5,779.28 $ 5,052.30 $ 5,831.40
3/31/2002 $ 6,067.56 $ 5,297.86 $ 6,243.45
4/30/2002 $ 6,232.29 $ 5,442.25 $ 6,317.30
5/31/2002 $ 6,218.56 $ 5,476.35 $ 6,172.33
6/30/2002 $ 6,012.65 $ 5,341.06 $ 5,832.42
7/31/2002 $ 5,614.55 $ 5,125.06 $ 5,607.31
8/31/2002 $ 5,408.64 $ 5,027.29 $ 5,473.68
9/30/2002 $ 4,955.63 $ 4,660.07 $ 4,841.85
10/31/2002 $ 4,996.81 $ 4,621.42 $ 5,099.05
11/30/2002 $ 5,230.18 $ 4,822.65 $ 5,349.28
12/31/2002 $ 5,010.54 $ 4,672.58 $ 4,978.44
1/31/2003 $ 5,161.54 $ 4,923.83 $ 5,037.17
2/28/2003 $ 5,161.54 $ 4,819.24 $ 4,789.90
3/31/2003 $ 4,941.90 $ 4,633.92 $ 4,560.29
4/30/2003 $ 4,969.36 $ 4,649.84 $ 4,704.74
5/31/2003 $ 5,532.19 $ 5,204.64 $ 5,088.49
6/30/2003 $ 5,724.37 $ 5,543.43 $ 5,375.28
7/31/2003 $ 6,259.75 $ 6,075.49 $ 5,823.39
8/31/2003 $ 6,740.21 $ 6,457.48 $ 6,234.54
9/30/2003 $ 6,959.85 $ 6,502.96 $ 6,249.69
10/31/2003 $ 8,154.14 $ 7,455.66 $ 6,774.66
11/30/2003 $ 8,387.51 $ 7,601.18 $ 6,666.30
12/31/2003 $ 9,075.82 $ 8,595.95 $ 7,008.29
1/31/2004 $ 9,131.16 $ 8,582.31 $ 7,461.12
2/29/2004 $ 9,643.06 $ 9,115.51 $ 7,729.32
3/31/2004 $ 9,324.85 $ 8,362.89 $ 7,554.57
4/30/2004 $ 8,384.07 $ 7,212.37 $ 7,096.69
5/31/2004 $ 8,342.56 $ 7,687.59 $ 6,901.71
6/30/2004 $ 8,107.37 $ 7,679.63 $ 6,822.77
- ----------------------------------------------------------------------------
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2004
One Year Five Year Ten Year
China Region Opportunity Fund
(Inception 02/10/94) 41.63% 1.40% (2.07)%
-----------------------------------------------------------------------
Hang Seng Composite Index 36.03% n/a n/a
-----------------------------------------------------------------------
Morgan Stanley Capital Far East Free ex
Japan Index* 26.93% (4.33)% (3.75)%
-----------------------------------------------------------------------
IFC Emerging Markets Investable Total
China Index 38.54% 6.87% (2.60)%
<FN>
*These are not total returns. These returns reflect simple appreciation only
and do not reflect dividend reinvestment.
Performance data quoted represent past performance. Investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
The Hang Seng Composite Index is a market-capitalization weighted index that
comprises the top 200 companies listed on The Stock Exchange of Hong Kong,
based on average market capitalization for the twelve months. The index
commenced January 2000; it is not included in the graph as it had less than
ten years of data. The Morgan Stanley Capital Far East Free ex Japan Index is
an index in a series representing both the developed and the emerging markets
for a particular region. The IFC Emerging Markets Investable Total China Index
represents the S&P China Investable Total Return series. The term "investable"
indicates that the stocks and the weights in the S&P index represents the
amount that the foreign institutional investors might buy by the virtue of the
foreign institutional restrictions, plus factoring in minimum market
capitalization and liquidity screens.
</FN>
17
CHINA REGION OPPORTUNITY FUND
THE YEAR IN REVIEW - ECONOMIC AND
POLITICAL ISSUES THAT AFFECTED THE FUND
In general, the Asian stock markets experienced most of their gains in the first
half of the year and were weak in the second half. Excitement about the growth
opportunities in China, as well as the strong economic numbers coming out of the
country, drove performance for the first half of the period under review.
Concerns about an overheating economy and a possible "hard landing" scenario
contributed to the second-half weakness.
Critical drivers for the year include:
1. More weakness in the U.S. dollar, which was good for exports.
2. Continued terrorism in Iraq, which caused the price of oil to increase
sharply.
3. Strong investment in industries performing the build-out of China's
infrastructure, which drove the price of commodities higher.
4. Talks about a hard landing in China and the possible impact that would have
on countries that export to China.
Elections in Taiwan and the Philippines--and the possible impeachment of South
Korea's president--added moments of nervousness during the year. All is now
quiet on that front, with no real surprises.
INVESTMENT HIGHLIGHTS
The fund benefited in the first half of the year from substantial positions in
the basic materials and energy sectors. This was definitely the place to be
through December 2003. Those areas have been weaker in the second half of the
year. The fund focused primarily on China-related plays, and this contributed
strongly to the fund's performance for the year. In the third and fourth
quarters, these two sectors started to underperform the broader market, as
concerns about a slowdown or crash in China produced a lot of fear in
China-related stocks. Other markets in the region were also affected, as much of
their GDP growth comes from exports to China. As the fiscal year closed, it
appeared that the preliminary steps China took to slow down its economy started
to have the desired effect. Interest in these markets started to pick up once
again.
CURRENT OUTLOOK
As China goes, so goes the region. China should be able to avoid a hard landing
and continue to produce GDP growth in the 7 to 8 percent range. This is a level
that the government is comfortable with and would not
18
CHINA REGION OPPORTUNITY FUND
produce runaway inflation. As the consumer starts to be a bigger part of GDP,
the fund will tilt the portfolio away from production-related names and toward
consumption-related stocks.
PORTFOLIO PROFILE June 30, 2004
Country Distribution (based on domicile) % of Investments
---------------------------------------------------------------
People's Republic of China 29.97%
---------------------------------------------------------------
United States 24.68%
---------------------------------------------------------------
Hong Kong 19.42%
---------------------------------------------------------------
Canada 11.93%
---------------------------------------------------------------
Taiwan 4.05%
---------------------------------------------------------------
Other Foreign 9.95%
19
CHINA REGION OPPORTUNITY FUND
TOP 10 EQUITY HOLDINGS BASED ON TOTAL INVESTMENTS June 30, 2004
HSBC HOLDINGS PLC 2.76%
BANKING & FINANCIAL SERVICES
---------------------------------------------------------------
PHILIPPINE LONG DISTANCE TELEPHONE CO. 2.64%
TELECOMMUNICATIONS
---------------------------------------------------------------
SAMSUNG ELECTRONICS 2.61%
ELECTRONIC EQUIPMENT
---------------------------------------------------------------
LI & FUNG LTD. 2.59%
APPAREL
---------------------------------------------------------------
WING HANG BANK LTD. 2.34%
BANKING & FINANCIAL SERVICES
---------------------------------------------------------------
TECHTRONIC INDUSTRIES CO., LTD. 2.02%
ELECTRONIC EQUIPMENT
---------------------------------------------------------------
STERLING GROUP VENTURES, INC. 2.00%
NATURAL RESOURCES
---------------------------------------------------------------
BEIJING DATANG POWER GENERATION CO., LTD. 1.98%
UTILITIES
---------------------------------------------------------------
CAPITAL ALLIANCE GROUP, INC. 1.97%
EDUCATION
---------------------------------------------------------------
THE BANK OF EAST ASIA LTD. 1.94%
BANKING & FINANCIAL SERVICES
TOP 5 INDUSTRIES BASED ON TOTAL INVESTMENTS June 30, 2004
NATURAL RESOURCES 12.87%
BANKING & FINANCIAL SERVICES 9.13%
ELECTRONIC EQUIPMENT 8.74%
TELECOMMUNICATIONS 6.23%
INVESTMENT TRUSTS 5.33%
20
GLOBAL RESOURCES FUND
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The Global Resources Fund is a diversified natural resources fund with the
principal objective of achieving long-term growth of capital, while providing
protection against inflation and monetary instability. The fund invests in
companies involved in the exploration, production and processing of petroleum,
natural gas, industrial commodities, metals, minerals, paper and forest products
and can invest in any part of the world.
PERFORMANCE
GLOBAL RESOURCES FUND
[Graphic: Line graph created from data points in following table.]
GLOBAL RESOURCES S&P 500 S&P ENERGY AND
DATE FUND INDEX MATERIALS INDEX
-------- ---------------- ---------- ---------------
6/30/1994 $ 10,000.00 $ 10,000.00 $ 10,000.00
7/29/1994 $ 10,296.17 $ 10,328.37 $ 10,483.79
8/31/1994 $ 10,609.76 $ 10,751.83 $ 10,642.49
9/30/1994 $ 11,027.87 $ 10,488.91 $ 10,452.31
10/31/1994 $ 10,853.66 $ 10,724.56 $ 10,939.71
11/30/1994 $ 10,226.48 $ 10,333.91 $ 10,327.46
12/30/1994 $ 10,226.48 $ 10,487.27 $ 10,359.01
1/31/1995 $ 9,693.09 $ 10,759.24 $ 10,379.86
2/28/1995 $ 9,803.44 $ 11,178.55 $ 10,867.57
3/31/1995 $ 10,079.34 $ 11,508.39 $ 11,436.03
4/28/1995 $ 10,355.23 $ 11,847.27 $ 11,698.47
5/31/1995 $ 10,483.98 $ 12,320.79 $ 12,157.52
6/30/1995 $ 10,594.34 $ 12,606.97 $ 11,990.25
7/31/1995 $ 10,888.63 $ 13,025.05 $ 12,364.03
8/31/1995 $ 11,054.16 $ 13,057.79 $ 12,089.04
9/29/1995 $ 11,017.38 $ 13,608.85 $ 12,297.97
10/31/1995 $ 10,520.77 $ 13,560.21 $ 12,079.52
11/30/1995 $ 10,631.13 $ 14,155.49 $ 12,703.81
12/29/1995 $ 11,146.13 $ 14,428.15 $ 13,240.47
1/31/1996 $ 11,556.19 $ 14,919.23 $ 13,490.89
2/29/1996 $ 11,686.66 $ 15,057.55 $ 13,562.89
3/29/1996 $ 12,339.03 $ 15,202.49 $ 14,278.59
4/30/1996 $ 13,065.95 $ 15,426.63 $ 14,554.76
5/31/1996 $ 13,270.98 $ 15,824.47 $ 14,648.40
6/28/1996 $ 13,010.03 $ 15,884.84 $ 14,526.57
7/31/1996 $ 12,450.86 $ 15,183.04 $ 14,028.43
8/30/1996 $ 12,898.20 $ 15,503.32 $ 14,355.37
9/30/1996 $ 13,420.09 $ 16,375.92 $ 14,935.54
10/31/1996 $ 14,053.81 $ 16,827.58 $ 15,607.56
11/29/1996 $ 14,799.37 $ 18,099.52 $ 16,363.94
12/31/1996 $ 14,948.49 $ 17,740.89 $ 16,275.56
1/31/1997 $ 15,497.44 $ 18,849.25 $ 16,965.73
2/28/1997 $ 14,652.90 $ 18,996.99 $ 16,619.02
3/31/1997 $ 14,547.33 $ 18,216.76 $ 16,979.81
4/30/1997 $ 14,167.28 $ 19,303.93 $ 17,227.21
5/30/1997 $ 15,518.56 $ 20,479.22 $ 18,433.87
6/30/1997 $ 15,476.33 $ 21,396.72 $ 19,099.19
7/31/1997 $ 16,785.38 $ 23,099.21 $ 20,497.60
8/29/1997 $ 17,714.38 $ 21,805.15 $ 19,792.75
9/30/1997 $ 19,276.79 $ 22,999.35 $ 20,800.06
10/31/1997 $ 18,263.33 $ 22,231.24 $ 19,868.58
11/28/1997 $ 15,328.53 $ 23,260.37 $ 19,697.14
12/31/1997 $ 14,536.77 $ 23,659.84 $ 19,571.55
1/30/1998 $ 12,810.83 $ 23,921.53 $ 18,788.84
2/27/1998 $ 13,102.54 $ 25,646.86 $ 20,044.37
3/31/1998 $ 13,078.23 $ 26,960.21 $ 20,967.16
4/30/1998 $ 12,737.91 $ 27,231.45 $ 21,719.52
5/29/1998 $ 11,595.38 $ 26,763.40 $ 21,067.02
6/30/1998 $ 10,866.11 $ 27,850.50 $ 20,629.12
7/31/1998 $ 10,015.30 $ 27,553.94 $ 19,289.32
8/31/1998 $ 8,410.91 $ 23,570.27 $ 17,020.30
9/30/1998 $ 9,310.34 $ 25,080.19 $ 19,010.02
10/30/1998 $ 9,650.66 $ 27,120.26 $ 19,365.34
11/30/1998 $ 9,383.27 $ 28,763.96 $ 19,674.55
12/31/1998 $ 8,937.65 $ 30,421.49 $ 19,317.17
1/29/1999 $ 8,495.97 $ 31,693.60 $ 18,196.38
2/26/1999 $ 8,418.02 $ 30,708.60 $ 18,191.93
3/31/1999 $ 9,249.43 $ 31,937.20 $ 20,195.88
4/30/1999 $ 10,782.34 $ 33,173.99 $ 23,709.26
5/28/1999 $ 10,262.71 $ 32,390.57 $ 22,782.96
6/30/1999 $ 10,418.60 $ 34,188.22 $ 23,275.73
7/30/1999 $ 10,444.58 $ 33,120.71 $ 23,371.13
8/31/1999 $ 10,314.68 $ 32,956.85 $ 23,381.92
9/30/1999 $ 9,950.93 $ 32,053.37 $ 22,518.02
10/29/1999 $ 9,743.08 $ 34,081.73 $ 22,440.58
11/30/1999 $ 9,769.06 $ 34,774.55 $ 22,643.11
12/31/1999 $ 10,236.73 $ 36,822.64 $ 23,423.03
1/31/2000 $ 9,898.97 $ 34,972.58 $ 22,326.36
2/29/2000 $ 9,353.36 $ 34,310.56 $ 20,776.76
3/31/2000 $ 10,366.64 $ 37,666.95 $ 22,922.17
4/28/2000 $ 10,210.75 $ 36,533.88 $ 22,487.59
5/31/2000 $ 10,730.38 $ 35,784.31 $ 23,858.99
6/30/2000 $ 10,080.84 $ 36,666.51 $ 22,337.80
7/31/2000 $ 9,898.97 $ 36,093.26 $ 22,023.44
8/31/2000 $ 10,990.20 $ 38,335.17 $ 23,331.56
9/29/2000 $ 10,964.21 $ 36,311.33 $ 23,166.76
10/31/2000 $ 10,548.51 $ 36,157.82 $ 23,509.40
11/30/2000 $ 10,028.88 $ 33,307.15 $ 22,882.15
12/29/2000 $ 11,327.96 $ 33,470.17 $ 24,821.63
1/31/2001 $ 10,964.21 $ 34,657.66 $ 24,108.71
2/28/2001 $ 10,782.34 $ 31,497.52 $ 23,888.43
3/30/2001 $ 10,626.45 $ 29,502.13 $ 23,314.78
4/30/2001 $ 11,587.77 $ 31,794.75 $ 25,714.47
5/31/2001 $ 11,457.86 $ 32,007.77 $ 26,148.46
6/30/2001 $ 10,418.60 $ 31,228.75 $ 24,583.75
7/31/2001 $ 10,002.90 $ 30,921.33 $ 24,311.53
8/31/2001 $ 9,639.16 $ 28,985.60 $ 23,684.16
9/30/2001 $ 9,015.60 $ 26,644.94 $ 21,775.71
10/31/2001 $ 9,613.17 $ 27,153.03 $ 22,422.78
11/30/2001 $ 9,691.12 $ 29,235.84 $ 22,630.97
12/31/2001 $ 9,795.04 $ 29,491.96 $ 23,316.04
1/31/2002 $ 9,821.03 $ 29,061.58 $ 23,139.95
2/28/2002 $ 10,366.64 $ 28,501.12 $ 24,220.31
3/31/2002 $ 11,327.96 $ 29,573.03 $ 25,601.95
4/30/2002 $ 12,029.46 $ 27,780.08 $ 24,322.02
5/31/2002 $ 14,471.72 $ 27,575.42 $ 24,812.15
6/30/2002 $ 12,808.90 $ 25,610.96 $ 24,617.85
7/31/2002 $ 9,950.93 $ 23,614.72 $ 21,599.53
8/31/2002 $ 10,444.58 $ 23,769.76 $ 21,587.16
9/30/2002 $ 10,236.73 $ 21,186.47 $ 19,454.60
10/31/2002 $ 9,561.21 $ 23,051.23 $ 20,150.54
11/30/2002 $ 9,924.95 $ 24,408.00 $ 21,402.95
12/31/2002 $ 11,537.10 $ 22,974.08 $ 21,137.27
1/31/2003 $ 12,200.15 $ 22,372.25 $ 20,442.08
2/28/2003 $ 12,438.85 $ 22,036.57 $ 20,584.68
3/31/2003 $ 12,014.50 $ 22,250.53 $ 20,769.50
4/30/2003 $ 11,987.97 $ 24,083.31 $ 21,290.33
5/31/2003 $ 13,393.64 $ 25,352.20 $ 22,777.21
6/30/2003 $ 13,632.34 $ 25,675.61 $ 22,672.97
7/31/2003 $ 14,295.39 $ 26,128.31 $ 22,823.27
8/31/2003 $ 16,098.89 $ 26,637.87 $ 24,031.56
9/30/2003 $ 16,947.60 $ 26,354.99 $ 23,292.07
10/31/2003 $ 19,758.94 $ 27,845.89 $ 24,076.86
11/30/2003 $ 21,323.74 $ 28,090.89 $ 24,309.56
12/31/2003 $ 23,023.54 $ 29,564.10 $ 27,410.51
1/31/2004 $ 22,538.83 $ 30,106.75 $ 27,261.02
2/29/2004 $ 23,723.67 $ 30,525.22 $ 28,542.76
3/31/2004 $ 24,343.01 $ 30,064.70 $ 28,254.10
4/30/2004 $ 21,973.34 $ 29,592.74 $ 28,182.15
5/31/2004 $ 22,000.27 $ 29,998.83 $ 28,503.18
6/30/2004 $ 22,592.69 $ 30,582.16 $ 29,976.00
- --------------------------------------------------------------
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2004
One Year Five Year Ten Year
Global Resources Fund 65.73% 16.72% 8.48%
-----------------------------------------------------------------------
S&P 500 Index 19.11% (2.20)% 11.83%
-----------------------------------------------------------------------
S&P Energy and Materials Index 32.21% 5.19% 11.60%
Performance data quoted represent past performance. Investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
The S&P 500 Index is a widely recognized capitalization-weighted index of 500
common stock prices in U.S. companies. The S&P Energy and Materials Index is a
combination of the S&P Energy Index and the S&P Materials Index calculated on
a 70% and 30% weighting, respectively, with monthly rebalancing of weights.
21
GLOBAL RESOURCES FUND
THE YEAR IN REVIEW - ECONOMIC AND
POLITICAL ISSUES THAT AFFECTED THE FUND
The global environment of the past year saw a remarkable recovery from the turn
of the millennium when economic growth was trending lower and, in some
instances, turning negative. Few things are a better reflection of economic
growth than the performance of equity markets across the globe. Largely all
developed economy equity markets experienced solid gains, with the Nikkei 225 in
Japan leading the way up 31.73 percent during the past year. Europe was not far
behind, with gains of more than 20 percent across the board. The U.S. markets
also performed well, gaining over 19 percent.
The Japanese market's gain is most intriguing following an 80 percent market
value decline that has taken place since the beginning of the past decade. A
market rally of more than 30 percent in 12 months is not uncommon for the Nikkei
225 during this time, but the overriding trend has always taken equities lower.
Although the broad Japanese index has yet to break its downtrend, it appears
census and economic trends may be turning in the island nation's favor. The
emergence of a younger Japanese generation willing to spend money Western-style,
and the spectacular growth of China, may lead Japan out of the deflationary
spiral that has gripped the country.
China's story has not changed dramatically since the summer of last year.
Industrial demand for commodities has remained ravenous, as the country is
experiencing an industrial boom not experienced across the globe since the early
half of the 20th century. The Chinese consumer continues to open his pocketbook
as piles of foreign direct investment pours into the country from the coastal
regions. The Chinese government has reacted to such powerful growth by
implementing measures to extinguish speculative building in the basic industrial
and commodity businesses. The measures include raising reserve requirements for
banks and reducing export tax rebates. To date, the measures taken by the
government appear to have slowed growth without slamming on the brakes.
Employment gains in the U.S. economy were the focus for most of the past 12
months. Economic growth without payroll gains helped improve corporate profits,
but investors were waiting for an addition of jobs to declare the U.S. economy
in full recovery. This didn't occur until the beginning of 2004 and brought with
it the possibility of a change in interest rate policy by the Federal Reserve.
Alan Greenspan met the market's expectations when he led his policy committee to
raise the Fed Funds rate 25 basis points in June.
22
GLOBAL RESOURCES FUND
INVESTMENT HIGHLIGHTS
Resources stocks were the talk of global financial markets over the past year,
and the Global Resources Fund had dramatic gains. The sector took its cue from
economic gains across the world, especially in China, which absorbed excess
commodity inventories across the globe. For several commodities, China accounted
for the entire growth in demand from the previous year. Although commodity
producers expected demand to pick up over the past 12 months, the rate of growth
was stunning. The Chinese economy experienced GDP growth in excess of 9 percent
and Industrial Production growth near 20 percent year-over-year. This strong
growth in demand, coupled with underinvestment by producers, left commodity
supply thin. The result was an amplified commodity cycle.
The confluence of China's growth in demand, developed economic pickup and
straining supply growth pushed commodity prices up. Nickel, used in making
stainless steel, was the best example. The Chinese appetite for stainless steel
used in construction left supply short and pushed prices up 85.77 percent.
Copper also enjoyed strong price performance, gaining 61 percent. The
supply-and-demand dynamic also pushed lead, zinc, platinum and palladium prices
higher. Aluminum prices rose 30 percent in spite of overinvestment in production
in China, which until recently kept inventories lofty.
Gold and silver outperformed over the last year, driven by weakness in the U.S.
dollar. Gold and the dollar have a strong inverse correlation that took gold
prices as high as $420 per ounce. The weakness in the U.S. dollar was a result
of ballooning budget deficits, stemming from tax cuts implemented over the past
two years and the costly war in Iraq. Part of the strength in gold can also be
attributed to a terrorism premium world markets have dealt with since the 9/11
attacks.
The energy commodities didn't disappoint investors either, with gains of 23
percent for crude oil and 14 percent for natural gas. The continued terrorist
attacks and disruptions to crude oil production across the world has kept
Organization for Economic Cooperation and Development (OECD) inventories tight,
while China continued to set record import levels month after month. Increasing
production has been tough for countries and companies alike, with few major
discoveries. The next big horizon for energy explorers is in deepwater areas,
where costs and risks will lead to higher selling prices.
23
GLOBAL RESOURCES FUND
CURRENT OUTLOOK
U.S. Global Investors continues to believe a robust global economy and
production difficulties will keep this commodity cycle extended. With the
Chinese in the process of slowing their economy, and a change in interest rate
policy expected across developed economies, the downside risks cannot be
ignored. High commodity prices always bring marginal mining and production
projects on stream, but we believe environmental interests and terror threats
will slow this trend. Therefore, the investment team expects this strong
commodity cycle to continue over the next year. Aside from production
bottlenecks, our thesis is driven by continued demand gains across the globe,
with a keen eye on China.
24
GLOBAL RESOURCES FUND
TOP 10 EQUITY* HOLDINGS BASED ON TOTAL INVESTMENTS June 30, 2004
NORTHERN ORION RESOURCES, INC. 4.31%
GOLD & COPPER MINING
---------------------------------------------------------------
ENERPLUS RESOURCES FUND 2.56%
OIL & GAS ROYALTY TRUSTS
---------------------------------------------------------------
BONAVISTA ENERGY TRUST 2.32%
OIL & GAS ROYALTY TRUSTS
---------------------------------------------------------------
SOUTHERN AFRICAN RESOURCES PLC 2.14%
PLATINUM GROUP METALS
---------------------------------------------------------------
FOCUS ENERGY TRUST 1.99%
OIL & GAS ROYALTY TRUSTS
---------------------------------------------------------------
VERMILLION ENERGY TRUST 1.81%
OIL & GAS ROYALTY TRUSTS
---------------------------------------------------------------
ENERGY SAVINGS INCOME FUND 1.73%
GAS DISTRIBUTION
---------------------------------------------------------------
SAN JUAN BASIN ROYALTY TRUST 1.64%
OIL & GAS ROYALTY TRUSTS
---------------------------------------------------------------
ALCOA, INC. 1.49%
ALUMINUM
---------------------------------------------------------------
SUPERIOR PLUS INCOME FUND 1.45%
PROPANE DISTRIBUTION
TOP 5 INDUSTRIES BASED ON TOTAL INVESTMENTS June 30, 2004
OIL & GAS EXPLORATION & PRODUCTION - JUNIOR 12.05%
OIL & GAS ROYALTY TRUSTS 11.26%
GOLD MINING 7.70%
GOLD & COPPER MINING 7.53%
OIL & GAS EQUIPMENT & SERVICES 5.16%
<FN>
*Includes convertible debentures.
</FN>
25
GLOBAL RESOURCES FUND
PORTFOLIO PROFILE June 30, 2004
Country Distribution (based on domicile) % of Investments
---------------------------------------------------------------
Canada 61.39%
---------------------------------------------------------------
United States 27.29%
---------------------------------------------------------------
United Kingdom 5.55%
---------------------------------------------------------------
South Africa 1.88%
---------------------------------------------------------------
Other Foreign 3.89%
26
GOLD AND PRECIOUS MINERALS FUNDS
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The World Precious Minerals and Gold Shares Funds pursue an objective of
long-term capital growth through investments in gold and precious metal
companies. The Gold Shares Fund also pursues current income as a secondary
objective and focuses on established, gold-producing mines. The World Precious
Minerals Fund focuses on equity securities of companies principally engaged in
the exploration, mining, and processing of precious minerals such as gold,
silver, platinum, and diamonds. Although the fund has greater latitude to invest
its assets in different precious minerals, it currently remains focused on the
gold sector.
PERFORMANCE
WORLD PRECIOUS MINERALS FUND
[Graphic: Line graph created from data points in following table.]
WORLD PRECIOUS TORONTO STOCK EXCHANGE
DATE MINERALS FUNDS GOLD & PRECIOUS MINERALS INDEX
-------- ---------------- ---------------
6/30/1994 $ 10,000.00 $ 10,000.00
7/29/1994 $ 10,012.80 $ 9,929.03
8/31/1994 $ 10,473.45 $ 10,486.75
9/30/1994 $ 11,100.45 $ 11,827.12
10/31/1994 $ 10,492.64 $ 10,706.37
11/30/1994 $ 9,168.27 $ 9,244.92
12/30/1994 $ 9,379.40 $ 9,917.13
1/31/1995 $ 8,392.09 $ 8,709.93
2/28/1995 $ 8,571.60 $ 9,281.14
3/31/1995 $ 9,558.91 $ 10,553.65
4/28/1995 $ 9,821.76 $ 10,598.30
5/31/1995 $ 9,802.53 $ 10,993.80
6/30/1995 $ 10,135.91 $ 11,093.96
7/31/1995 $ 10,578.27 $ 11,092.24
8/31/1995 $ 10,866.77 $ 11,262.79
9/29/1995 $ 10,860.36 $ 11,431.62
10/31/1995 $ 9,744.83 $ 10,025.00
11/30/1995 $ 10,578.27 $ 11,080.59
12/29/1995 $ 10,873.18 $ 11,068.21
1/31/1996 $ 12,629.81 $ 12,713.07
2/29/1996 $ 12,969.60 $ 13,177.10
3/29/1996 $ 13,661.99 $ 13,263.94
4/30/1996 $ 14,085.13 $ 13,143.70
5/31/1996 $ 15,521.21 $ 13,971.08
6/28/1996 $ 13,540.18 $ 11,753.95
7/31/1996 $ 13,193.99 $ 11,795.31
8/30/1996 $ 14,399.27 $ 12,432.48
9/30/1996 $ 13,976.14 $ 11,778.76
10/31/1996 $ 13,610.71 $ 11,969.14
11/29/1996 $ 13,392.73 $ 12,290.99
12/31/1996 $ 12,995.24 $ 11,964.02
1/31/1997 $ 12,269.52 $ 11,448.99
2/28/1997 $ 13,517.49 $ 12,237.67
3/31/1997 $ 11,903.26 $ 9,901.01
4/30/1997 $ 11,319.97 $ 9,132.74
5/30/1997 $ 11,930.39 $ 9,855.92
6/30/1997 $ 10,818.07 $ 8,725.35
7/31/1997 $ 10,302.60 $ 8,725.58
8/29/1997 $ 10,546.77 $ 8,567.49
9/30/1997 $ 10,994.41 $ 9,508.21
10/31/1997 $ 9,149.57 $ 7,775.57
11/28/1997 $ 7,257.26 $ 5,777.23
12/31/1997 $ 7,656.75 $ 6,467.94
1/30/1998 $ 8,315.98 $ 6,773.92
2/27/1998 $ 7,876.49 $ 6,600.31
3/31/1998 $ 8,412.12 $ 7,097.39
4/30/1998 $ 8,762.34 $ 7,583.52
5/29/1998 $ 7,519.41 $ 6,469.48
6/30/1998 $ 6,770.90 $ 6,001.83
7/31/1998 $ 6,297.07 $ 5,174.34
8/31/1998 $ 4,923.67 $ 3,910.37
9/30/1998 $ 6,798.37 $ 6,215.42
10/30/1998 $ 6,709.10 $ 6,322.07
11/30/1998 $ 6,262.74 $ 5,878.86
12/31/1998 $ 6,449.52 $ 5,586.42
1/29/1999 $ 6,174.49 $ 5,440.13
2/26/1999 $ 6,043.85 $ 5,118.77
3/31/1999 $ 5,920.08 $ 4,988.15
4/30/1999 $ 6,628.29 $ 5,880.13
5/28/1999 $ 5,418.15 $ 4,867.70
6/30/1999 $ 5,356.27 $ 5,183.39
7/30/1999 $ 5,053.73 $ 4,857.72
8/31/1999 $ 5,266.88 $ 5,021.86
9/30/1999 $ 6,635.17 $ 6,324.29
10/29/1999 $ 5,954.46 $ 5,431.85
11/30/1999 $ 5,693.18 $ 5,106.07
12/31/1999 $ 5,631.30 $ 4,886.69
1/31/2000 $ 4,998.72 $ 4,333.89
2/29/2000 $ 5,081.23 $ 4,218.61
3/31/2000 $ 4,696.19 $ 3,955.38
4/28/2000 $ 4,462.41 $ 4,119.74
5/31/2000 $ 4,324.89 $ 4,275.01
6/30/2000 $ 4,421.15 $ 4,366.66
7/31/2000 $ 3,953.60 $ 3,860.09
8/31/2000 $ 4,111.74 $ 4,022.72
9/29/2000 $ 3,692.32 $ 3,906.34
10/31/2000 $ 3,300.40 $ 3,491.67
11/30/2000 $ 3,266.02 $ 3,860.79
12/29/2000 $ 3,486.73 $ 4,191.17
1/31/2001 $ 3,452.21 $ 3,947.59
2/28/2001 $ 3,445.30 $ 4,124.57
3/30/2001 $ 3,217.46 $ 3,795.74
4/30/2001 $ 3,521.25 $ 4,377.52
5/31/2001 $ 3,659.34 $ 4,473.66
6/30/2001 $ 3,645.53 $ 4,339.56
7/31/2001 $ 3,438.40 $ 4,267.63
8/31/2001 $ 3,486.73 $ 4,519.74
9/30/2001 $ 3,686.96 $ 4,974.34
10/31/2001 $ 3,638.63 $ 4,602.02
11/30/2001 $ 3,617.91 $ 4,445.13
12/31/2001 $ 3,749.10 $ 4,622.38
1/31/2002 $ 4,405.02 $ 5,162.14
2/28/2002 $ 4,826.19 $ 5,398.09
3/31/2002 $ 5,613.29 $ 5,629.59
4/30/2002 $ 6,200.17 $ 6,013.23
5/31/2002 $ 8,727.18 $ 7,003.21
6/30/2002 $ 7,201.31 $ 6,077.13
7/31/2002 $ 5,178.31 $ 4,922.70
8/31/2002 $ 5,896.37 $ 5,582.28
9/30/2002 $ 5,937.80 $ 5,545.64
10/31/2002 $ 5,150.69 $ 5,045.84
11/30/2002 $ 5,205.93 $ 4,955.45
12/31/2002 $ 6,876.54 $ 5,893.79
1/31/2003 $ 7,138.84 $ 5,993.77
2/28/2003 $ 6,876.54 $ 5,597.18
3/31/2003 $ 6,479.54 $ 5,271.08
4/30/2003 $ 6,309.40 $ 5,203.80
5/31/2003 $ 6,770.20 $ 5,787.79
6/30/2003 $ 6,911.98 $ 5,945.58
7/31/2003 $ 7,358.60 $ 6,046.92
8/31/2003 $ 8,627.57 $ 6,982.78
9/30/2003 $ 9,293.96 $ 6,837.40
10/31/2003 $ 11,371.10 $ 7,477.24
11/30/2003 $ 13,249.74 $ 8,651.09
12/31/2003 $ 13,250.97 $ 8,413.37
1/31/2004 $ 12,296.52 $ 7,403.28
2/29/2004 $ 12,837.37
3/31/2004 $ 13,958.85
4/30/2004 $ 10,912.56
5/31/2004 $ 11,270.48
6/30/2004 $ 10,880.75
- --------------------------------------------------------
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2004
One Year Five Year Ten Year
World Precious Minerals Fund 57.42% 15.21% 0.85%
----------------------------------------------------------------------
Toronto Stock Exchange Gold & Precious
Minerals Index* n/a n/a n/a
----------------------------------------------------------------------
AMEX Gold BUGS Index* 26.42% 22.00% n/a
<FN>
*These are not total returns. These returns reflect simple appreciation only
and do not reflect dividend reinvestment.
Performance data quoted represent past performance. Investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
The Toronto Stock Exchange Gold & Precious Minerals Index is a
capitalization-weighted index designed to measure the performance of the gold
and precious minerals sector of the TSX 300 Index. This index ceased
publication in January 2004. Going forward, the AMEX Gold BUGS Index will be
used for comparison. The AMEX Gold BUGS Index is a modified equal-dollar
weighted index of companies involved in major gold mining that do not hedge
their gold production beyond 1 1/2 years. The index is not included in the
graph as it had less than ten years of data.
</FN>
27
GOLD AND PRECIOUS MINERALS FUNDS
GOLD SHARES FUND
[Graphic: Line graph created from data points in following table.]
GOLD SHARE PHILADELPHIA STOCK EXCHANGE
DATE FUNDS GOLD & SILVER INDEX
-------- ---------------- ---------------
6/30/1994 $ 10,000.00 $ 10,000.00
7/29/1994 $ 10,362.90 $ 9,697.25
8/31/1994 $ 11,491.94 $ 10,302.09
9/30/1994 $ 12,862.90 $ 11,493.80
10/31/1994 $ 12,177.42 $ 10,208.56
11/30/1994 $ 10,645.16 $ 8,956.08
12/30/1994 $ 11,169.35 $ 9,536.10
1/31/1995 $ 8,550.90 $ 8,494.66
2/28/1995 $ 9,041.86 $ 9,066.93
3/31/1995 $ 9,450.99 $ 10,658.82
4/28/1995 $ 9,000.95 $ 10,221.39
5/31/1995 $ 8,755.46 $ 10,513.40
6/30/1995 $ 8,878.21 $ 10,531.89
7/31/1995 $ 9,583.48 $ 10,406.73
8/31/1995 $ 9,542.00 $ 10,766.85
9/29/1995 $ 9,459.02 $ 10,902.03
10/31/1995 $ 8,006.98 $ 9,408.02
11/30/1995 $ 8,089.95 $ 10,657.52
12/29/1995 $ 8,172.93 $ 10,598.66
1/31/1996 $ 9,984.45 $ 12,415.26
2/29/1996 $ 9,689.55 $ 12,690.07
3/29/1996 $ 9,141.88 $ 12,677.52
4/30/1996 $ 9,184.01 $ 12,644.51
5/31/1996 $ 9,436.78 $ 13,151.11
6/28/1996 $ 7,835.90 $ 10,933.44
7/31/1996 $ 7,750.73 $ 10,991.91
8/30/1996 $ 7,708.14 $ 11,019.77
9/30/1996 $ 7,026.76 $ 10,190.74
10/31/1996 $ 6,899.00 $ 10,230.54
11/29/1996 $ 6,430.55 $ 10,655.91
12/31/1996 $ 6,089.86 $ 10,357.12
1/31/1997 $ 5,480.87 $ 9,778.08
2/28/1997 $ 6,263.85 $ 10,873.92
3/31/1997 $ 5,393.87 $ 9,251.86
4/30/1997 $ 4,958.88 $ 8,342.83
5/30/1997 $ 5,045.88 $ 9,289.31
6/30/1997 $ 4,193.30 $ 8,520.33
7/31/1997 $ 4,282.52 $ 8,735.71
8/29/1997 $ 4,327.13 $ 8,827.80
9/30/1997 $ 4,237.91 $ 9,776.92
10/31/1997 $ 3,301.11 $ 7,851.85
11/28/1997 $ 2,542.75 $ 6,343.27
12/31/1997 $ 2,596.28 $ 6,646.78
1/30/1998 $ 2,596.28 $ 6,716.66
2/27/1998 $ 2,368.53 $ 6,763.91
3/31/1998 $ 2,414.08 $ 7,325.62
4/30/1998 $ 2,550.73 $ 7,889.63
5/29/1998 $ 2,049.69 $ 6,713.21
6/30/1998 $ 1,726.30 $ 6,445.91
7/31/1998 $ 1,739.96 $ 5,659.06
8/31/1998 $ 1,339.13 $ 4,402.58
9/30/1998 $ 1,867.50 $ 6,752.89
10/30/1998 $ 1,826.50 $ 6,794.61
11/30/1998 $ 1,712.63 $ 6,405.15
12/31/1998 $ 1,739.96 $ 5,865.92
1/29/1999 $ 1,662.53 $ 5,711.53
2/26/1999 $ 1,626.09 $ 5,469.42
3/31/1999 $ 1,616.98 $ 5,405.40
4/30/1999 $ 1,799.18 $ 6,649.17
5/28/1999 $ 1,516.77 $ 5,526.26
6/30/1999 $ 1,557.77 $ 6,076.43
7/30/1999 $ 1,457.56 $ 5,707.83
8/31/1999 $ 1,534.99 $ 6,177.78
9/30/1999 $ 1,954.04 $ 7,363.06
10/29/1999 $ 1,749.07 $ 6,382.08
11/30/1999 $ 1,676.19 $ 6,162.34
12/31/1999 $ 1,694.41 $ 6,247.82
1/31/2000 $ 1,489.44 $ 5,513.39
2/29/2000 $ 1,498.55 $ 5,533.46
3/31/2000 $ 1,384.68 $ 5,236.75
4/28/2000 $ 1,275.36 $ 5,074.55
5/31/2000 $ 1,275.36 $ 5,237.34
6/30/2000 $ 1,330.02 $ 5,380.94
7/31/2000 $ 1,202.49 $ 4,733.13
8/31/2000 $ 1,275.36 $ 4,905.16
9/29/2000 $ 1,193.38 $ 4,679.41
10/31/2000 $ 1,074.95 $ 4,112.31
11/30/2000 $ 1,093.17 $ 4,431.91
12/29/2000 $ 1,188.82 $ 4,840.58
1/31/2001 $ 1,175.16 $ 4,600.48
2/28/2001 $ 1,202.49 $ 4,972.47
3/30/2001 $ 1,093.17 $ 4,506.10
4/30/2001 $ 1,238.93 $ 5,222.23
5/31/2001 $ 1,293.58 $ 5,422.76
6/30/2001 $ 1,289.03 $ 5,055.67
7/31/2001 $ 1,193.38 $ 5,037.67
8/31/2001 $ 1,225.26 $ 5,392.67
9/30/2001 $ 1,275.36 $ 5,511.17
10/31/2001 $ 1,257.15 $ 5,201.65
11/30/2001 $ 1,248.04 $ 5,026.45
12/31/2001 $ 1,320.91 $ 5,206.36
1/31/2002 $ 1,539.55 $ 5,866.36
2/28/2002 $ 1,762.74 $ 6,255.96
3/31/2002 $ 2,013.25 $ 6,809.93
4/30/2002 $ 2,213.67 $ 7,104.85
5/31/2002 $ 2,933.34 $ 8,113.32
6/30/2002 $ 2,404.97 $ 6,885.29
7/31/2002 $ 1,776.40 $ 5,833.15
8/31/2002 $ 2,054.25 $ 6,743.32
9/30/2002 $ 2,113.46 $ 6,771.35
10/31/2002 $ 1,821.95 $ 6,159.65
11/30/2002 $ 1,840.17 $ 6,153.82
12/31/2002 $ 2,395.86 $ 7,464.63
1/31/2003 $ 2,455.08 $ 7,487.97
2/28/2003 $ 2,300.21 $ 7,046.02
3/31/2003 $ 2,154.46 $ 6,555.42
4/30/2003 $ 2,058.80 $ 6,399.36
5/31/2003 $ 2,291.10 $ 7,208.64
6/30/2003 $ 2,359.42 $ 7,720.34
7/31/2003 $ 2,482.41 $ 7,964.76
8/31/2003 $ 2,887.79 $ 8,966.50
9/30/2003 $ 3,015.33 $ 8,983.63
10/31/2003 $ 3,484.48 $ 9,672.99
11/30/2003 $ 4,140.38 $ 10,823.27
12/31/2003 $ 4,002.92 $ 10,745.72
1/31/2004 $ 3,550.54 $ 9,444.84
2/29/2004 $ 3,683.06 $ 9,880.42
3/31/2004 $ 4,039.48 $ 10,398.77
4/30/2004 $ 3,102.72 $ 8,123.94
5/31/2004 $ 3,354.05 $ 8,917.01
6/30/2004 $ 3,198.68 $ 8,567.91
- ---------------------------------------------------
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2004
One Year Five Year Ten Year
Gold Shares Fund 35.57% 15.46% (10.76)%
----------------------------------------------------------------------
Philadelphia Stock Exchange Gold &
Silver Index 10.98% 7.11% (1.53)%
Performance data quoted represent past performance. Investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
The graph and table do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
The Philadelphia Stock Exchange Gold & Silver Index is a
capitalization-weighted index which includes the leading companies involved in
the mining of gold and silver.
THE YEAR IN REVIEW - ECONOMIC AND
POLITICAL ISSUES THAT AFFECTED THE FUND
Critical drivers moving gold prices higher include the following:
* The war on terrorism is proving to be very expensive. Deficit spending in the
U.S. is expected to top $500 billion, resulting in less confidence in our
fiscal policy and weaker demand for U.S. dollars abroad.
* The weak economy in the U.S. has led the Federal Reserve Bank to cut interest
rates to a 45-year low. This puts additional weight on the U.S. dollar, as it
is no longer the most preferred income-producing currency. The euro has now
emerged as one of the stronger currency plays.
* Low interest rates have effectively reined in the forward gold-selling bonanza
of the late 1990s. Gold companies and hedge funds sold gold
28
GOLD AND PRECIOUS MINERALS FUNDS
forward to capture a very attractive contango during a period of plunging gold
prices and very high real interest rates.
* Underpinning these factors, we are coming off a period of historically low
gold prices. This triggered substantial cuts in exploration spending, followed
by a phase of mergers in the gold industry that led to a rationalization of
mining assets. Both of these events set the stage for an anticipated decline
in world gold production.
* China is now a leading catalyst for the gold market. Helping support the
fundamentals of gold are China's liberalization of gold ownership by
individuals after a 50-year ban, the opening of the Shanghai Gold Exchange and
comments from the Bank of China that it would be safe and feasible to swap
some foreign exchange reserves into gold.
Sentiment towards the gold sector was very strong in the second half of 2003.
Capital-raising efforts to finance new mining ventures in 2003, ranging from
grass roots exploration to redevelopment of idle mines that had been placed on
care and maintenance when gold prices were lower, had little difficulty finding
buyers. Non-gold funds and momentum hedge funds were large purchasers of these
issues, bringing in new money from outside of the traditional gold and natural
resource funds. Midcap and microcap gold North American and European gold stocks
generated spectacular returns. However, "hedged" big cap stocks like Barrick
Gold Corp.(1) and Placer Dome, Inc.(2) lagged their peer group. Further, South
African gold companies were hurt due to the strong local currency (rand), which
appreciated more than the price of gold and wiped out most of their profits. The
significant drivers last year were strong Asian economies, a turnaround in the
U.S. economy, and a falling U.S. dollar.
Sentiment towards the gold sector began to wane in the first half of 2004 as we
witnessed a price reversal due to the modest slowdown in China's economy and a
stronger U.S. dollar. For all the money that was raised to finance new ventures,
there were no major new discoveries by a junior mining company as in previous
cycles, and many developing companies experienced delays. Investors looking for
profit growth and stronger cash flow from a higher gold price found
disappointment due to currency swings and higher energy costs. Another hurdle
for the mining industry in this cycle has been the formation of better-organized
anti-mining groups or Non-Governmental Organizations (NGOs) that have
successfully used the political process to create delays for new projects to
move forward, and this has subsequently disappointed many investors. All of
these factors have contributed to compressing the valuations of gold stocks
since January 2004. As shown in the following chart, the Net Asset Value (NAV)
29
GOLD AND PRECIOUS MINERALS FUNDS
premium for gold stocks is currently -0.4 times below the normal valuation
levels expected for the current gold price, the cheapest they have been in the
past 18 months.
Adjusted NAV Premium/Discount Over the Past 18 Months
[Graphic: Line graph created from data points in following table.]
MULTIPLE POINT
ABOVE OR BELOW NORMAL
DATE FOR GOLD PRICE
-------- ----------------
01/31/03 0.17
02/28/03 0.10
03/31/03 0.21
04/30/03 0.18
05/31/03 -0.15
06/30/03 0.04
07/31/03 0.33
08/31/03 0.44
09/30/03 -0.03
10/31/03 0.21
11/30/03 0.21
12/31/03 -0.14
01/31/04 -0.38
02/29/04 -0.11
03/31/04 -0.27
04/30/04 -0.51
05/31/04 -0.30
06/30/04 -0.44
Source: CIBC World Markets Inc.
As shown in the following chart, "Six-year Beta to Bullion Response for North
American Gold Equities," the price response of the stocks to changes in the gold
price has declined to about 1.4 over the past year from the historical average
of 2.5. In addition, for the first half of 2004, the beta of the gold stocks to
negative movements in the gold price has increased. This reverses the trend we
have observed over the prior three years where the stocks responded more
positively to rising gold price and fell less when gold pulled back.
Six-Year Beta to Bullion Response For North American Gold Equities
[Graphic: Line graph created from data points in following table.]
YEAR GOLD MOVING UP GOLD MOVING DOWN
-------- ---------------- -------------------
1998 4.65 3.24
1999 2.09 2.50
2000 1.70 2.87
2001 2.95 1.83
2002 3.71 2.95
2003 1.53 0.87
2004 1.88 2.15
Source: Bloomberg and CIBC World Markets Inc.
30
GOLD AND PRECIOUS MINERALS FUNDS
Another trend change has been the weakening of the inverse correlation between
the gold price and the value of the trade-weighted U.S. dollar. As shown in the
chart below, over the last three years the R2 (which measures the degree to
which one variable's behavior is explained by an independent variable) has run
about 0.91; however, over the past year it has dropped to 0.70.
Gold/Dollar Relationship
[Chart]
^
| Gold R2: .91 (3 yrs)
| Dollar Bloomberg
|
| R2: .70 (1yrs)
Bloomberg
^
| Gold
| Dollar
|
Greenspan's comments that the Fed will do whatever it takes to keep inflation in
check, and could aggressively raise interest rates if necessary, dampened the
outlook for the gold sector and strengthened the dollar. However, we are
doubtful that the Fed can raise interest rates dramatically without causing a
major recession. The Fed Funds rate is now 1.50 percent; however, the CPI is
3.25 percent. Thus, investors buying Treasury Bills are losing value. In
addition, the massive deficit spending will not evaporate over the next two
years.
31
GOLD AND PRECIOUS MINERALS FUNDS
INVESTMENT HIGHLIGHTS
For the year ending June 30, 2004, the World Precious Minerals Fund returned
57.42 percent and the Gold Shares Fund returned 35.57 percent. The AMEX Gold
BUGS Index, World Precious Minerals Fund's benchmark, gained 26.42 percent,
while the Philadelphia Stock Exchange Gold & Silver Index, Gold Shares Fund's
benchmark, returned 10.98 percent. Spot gold closed at $394.25, up $47.85 or
13.81 percent for the same period. In contrast, the S&P 500 Index posted a
positive return of 19.11 percent while the trade-weighted U.S. Trade-Weighted
Dollar Index(3) fell 6.26 percent over the last 12 months. Over the same period,
the yield on the 90-day Treasury Bill jumped nearly 50 percent, tacking on 41
basis points to finish at 1.27 percent.
We have made several critical investment decisions, which generated superior
relative performance:
1. We focused on mid-cap unhedged gold producers.
2. We also concentrated our investments in companies that produced two metals,
i.e., copper-gold porphyry producers like Wheaton River Minerals Ltd.,(4)
which has demonstrated over 500 percent growth in cash flow on a
year-over-year basis for the past year; Placer Dome, Inc.;(2) Northern Orion
Resources, Inc.;(5) and Bema
Gold Corp.(6)
3. We invested in companies reflecting the three critical growth drivers: (a)
increasing reserves (b) increasing production (c) increasing cash flow
4. We looked for undervalued junior gold companies with inexpensive resource
ounces in the ground.
5. We wanted to own companies wherein a rising gold price would greatly increase
their reserve base and net asset value.
6. We searched for companies that were undervalued on a relative peer group
basis for several fundamental metrics; i.e., ounce per share, production per
share, net asset value per share, cash flow multiples.
32
GOLD AND PRECIOUS MINERALS FUNDS
CURRENT OUTLOOK
The gold market in China has shown good follow-through in investor interest
after repealing their 50-year ban on gold ownership by individuals in December
of 2002. Several IPOs of local gold mining companies earlier in the year in
China were met with enthusiastic demand, as the first two issues were, on
average, more than 1,000 times oversubscribed. In October, the Hong Kong edition
of China Daily contained comments from the Bank of China's gold business expert,
saying it would be safe and feasible for China to swap some foreign exchange
reserves for gold. It was also mentioned that local consumers could pour $36
billion into gold, equivalent to 2,950 tonnes, or more than one year of supply.
At the end of June, Beijingers became able to buy and sell gold bars at a bank,
opening a convenient and flexible new investment tool to help citizens manage
their assets. The China Merchants Bank (CMB) said it had launched the
repurchasable gold bars business in the capital city and planned to next extend
it to Shenzhen. A step-by-step national rollout is expected to follow.
With a view towards higher interest rates, CIBC World Markets urged caution in
assuming higher rates will automatically support a stronger dollar and thus
weaken gold. They noted when interest rates moved up from 3 percent to 6 percent
in the mid 1990s, the dollar declined by 15 percent during that same period
while gold did not move dramatically during the period and finished within $1 of
the start.
Merrill Lynch's gold team reported that over the 1989-2003 period, the gold
price has displayed a very strong seasonal pattern. In the first leg of this
seasonal cycle (late winter to early summer), the spot gold price historically
weakens through the late spring period due to declining fabrication demand, as
fabricators allow inventories to decline, and also due to the end of the Indian
wedding season. Following this seasonal weakness, the gold stocks listed on the
Toronto Stock Exchange on average rise more than 24 percent.
The massive liquidation of mining shares from mid-April to mid-May definitely
was an exit point for many of the speculators playing the gold market. The
stocks are now cheaper and more supported by fundamentals. For select shares
this represents a good buying opportunity.
33
GOLD AND PRECIOUS MINERALS FUNDS
Threats we are monitoring include a sustainable reversal in the U.S.
dollar, rising U.S. interest rates and a significant economic
slowdown in China and/or the U.S.
(1)This security comprised 0.54 percent of the total net assets of the World
Precious Minerals Fund and 0.81 percent of the total net assets of the Gold
Shares Fund as of June 30, 2004.
(2)This security comprised 3.96 percent of the total net assets of the World
Precious Minerals Fund and 5.86 percent of the total net assets of the Gold
Shares Fund as of June 30, 2004.
(3)The U.S. Trade-Weighted Dollar Index provides a general indication of the
international value of the U.S. dollar.
(4)This security comprised 7.08 percent of the total net assets of the World
Precious Minerals Fund and 10.13 percent of the total net assets of the Gold
Shares Fund as of June 30, 2004.
(5)This security comprised 6.91 percent of the total net assets of the World
Precious Minerals Fund and 7.81 percent of the total net assets of the Gold
Shares Fund as of June 30, 2004.
(6)This security comprised 5.12 percent of the total net assets of the World
Precious Minerals Fund and 8.55 percent of the total net assets of the Gold
Shares Fund as of June 30, 2004.
34
GOLD AND PRECIOUS MINERALS FUNDS
WORLD PRECIOUS MINERALS FUND
TOP 10 EQUITY HOLDINGS BASED ON TOTAL INVESTMENTS June 30, 2004
WHEATON RIVER MINERALS LTD. 7.56%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------
NORTHERN ORION RESOURCES, INC. 7.37%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------
BEMA GOLD CORP. 5.47%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------
PLACER DOME, INC. 4.23%
SENIOR GOLD PRODUCERS
---------------------------------------------------------------
BOLIVAR GOLD CORP. 3.59%
GOLD/MINERAL EXPLORATION & DEVELOPMENT
---------------------------------------------------------------
SOUTHERN AFRICAN RESOURCES PLC 3.27%
METAL & MINERAL MINING
---------------------------------------------------------------
IAMGOLD CORP. 3.00%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------
SOUTH ATLANTIC VENTURES LTD. 2.82%
METAL & MINERAL MINING
---------------------------------------------------------------
IVANHOE MINES LTD. 2.47%
GOLD/MINERAL EXPLORATION & DEVELOPMENT
---------------------------------------------------------------
APOLLO GOLD CORP. 2.29%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
TOP 5 INDUSTRIES BASED ON TOTAL INVESTMENTS June 30, 2004
INTERMEDIATE & JUNIOR GOLD PRODUCERS 38.81%
GOLD/MINERAL EXPLORATION & DEVELOPMENT 22.18%
METAL & MINERAL MINING 16.45%
SENIOR GOLD PRODUCERS 9.71%
DIAMOND MINING & EXPLORATION 2.08%
35
GOLD AND PRECIOUS MINERALS FUNDS
GOLD SHARES FUND
TOP 10 EQUITY HOLDINGS BASED ON TOTAL INVESTMENTS June 30, 2004
WHEATON RIVER MINERALS LTD. 10.75%
GOLD MINING
---------------------------------------------------------------
BEMA GOLD CORP. 9.07%
GOLD MINING
---------------------------------------------------------------
NORTHERN ORION RESOURCES, INC. 8.29%
GOLD MINING
---------------------------------------------------------------
ANGLOGOLD ASHANTI LTD. 6.79%
GOLD MINING
---------------------------------------------------------------
PLACER DOME, INC. 6.22%
GOLD MINING
---------------------------------------------------------------
GOLDCORP, INC. 4.71%
GOLD MINING
---------------------------------------------------------------
APOLLO GOLD CORP. 3.83%
GOLD MINING
---------------------------------------------------------------
IAMGOLD CORP. 3.58%
GOLD MINING
---------------------------------------------------------------
IVANHOE MINES LTD. 3.02%
GOLD MINING
---------------------------------------------------------------
GLAMIS GOLD LTD. 2.79%
GOLD MINING
TOP 5 INDUSTRIES BASED ON TOTAL INVESTMENTS June 30, 2004
GOLD MINING 79.95%
METAL & MINERAL MINING 7.01%
MERCHANT BANKING 1.92%
DIAMOND MINING & EXPLORATION 1.30%
FINANCIAL SERVICES 0.95%
36
GOLD AND PRECIOUS MINERALS FUNDS
WORLD PRECIOUS MINERALS FUND
PORTFOLIO PROFILE June 30, 2004
Country Distribution (based on domicile) % of Investments
---------------------------------------------------------------
Canada 76.48%
---------------------------------------------------------------
United States 10.72%
---------------------------------------------------------------
United Kingdom 6.14%
---------------------------------------------------------------
South Africa 1.91%
---------------------------------------------------------------
Other Foreign 4.75%
GOLD SHARES FUND
PORTFOLIO PROFILE June 30, 2004
Country Distribution (based on domicile) % of Investments
---------------------------------------------------------------
Canada 70.92%
---------------------------------------------------------------
United States 12.57%
---------------------------------------------------------------
South Africa 11.02%
---------------------------------------------------------------
United Kingdom 2.50%
---------------------------------------------------------------
Other Foreign 2.99%
37
U.S. TREASURY SECURITIES CASH FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
UNITED STATES
GOVERNMENT COUPON MATURITY PRINCIPAL
OBLIGATIONS 66.69% RATE DATE AMOUNT VALUE
UNITED STATES TREASURY BILLS 35.53%
- ------------------------------------------------------------------------------------
Yield 0.95% 07/01/04 $ 20,000,000 $ 20,000,000
Yield 0.99% 07/08/04 20,000,000 19,996,150
------------
39,996,150
UNITED STATES TREASURY NOTES 31.16%
- ------------------------------------------------------------------------------------
2.125% 08/31/04 10,000,000 10,015,176
2.00% 11/30/04 15,000,000 15,048,385
1.50% 02/28/05 10,000,000 10,011,864
------------
35,075,425
- ------------------------------------------------------------------------------------
TOTAL UNITED STATES GOVERNMENT OBLIGATIONS 75,071,575
- ------------------------------------------------------------------------------------
(cost $75,071,575)
REPURCHASE AGREEMENTS 49.86%
Joint Tri-Party Repurchase Agreements, 06/30/04, collateralized by U.S. Treasury
securities held in joint tri-party repurchase accounts:
1.25% Bear Sterns, repurchase
price $20,000,694 1.25% 07/01/04 20,000,000 20,000,000
1.25% Credit Suisse First
Boston, repurchase price
$20,000,694 1.25% 07/01/04 20,000,000 20,000,000
1.29% UBS Financial Services,
Inc., repurchase price
$16,133,144 1.29% 07/01/04 16,132,566 16,132,566
- ------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS 56,132,566
- ------------------------------------------------------------------------------------
(cost $56,132,566)
- ------------------------------------------------------------------------------------
TOTAL INVESTMENTS 116.55% 131,204,141
- ------------------------------------------------------------------------------------
(cost $131,204,141)
Other assets and liabilities, net (16.55)% (18,629,218)
------------
NET ASSETS 100% $112,574,923
------------
See notes to portfolios of investments and notes to financial statements.
38
U.S. GOVERNMENT SECURITIES SAVINGS FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
UNITED STATES
GOVERNMENT AND AGENCY COUPON MATURITY PRINCIPAL
OBLIGATIONS 99.02% RATE DATE AMOUNT VALUE
FEDERAL FARM CREDIT BANK 9.07%
- ----------------------------------------------------------------------------------
Discount Notes:
Yield 0.98% 07/01/04 $14,000,000 $ 14,000,000
Yield 1.03% 07/07/04 20,000,000 19,996,567
Fixed Rates:
1.13% 08/02/04 3,655,000 3,655,153
1.50% 04/21/05 2,428,000 2,428,000
------------
40,079,720
FEDERAL HOME LOAN BANK 80.12%
- ----------------------------------------------------------------------------------
Discount Notes:
Yield 1.15% 07/01/04 79,265,000 79,265,000
Yield 1.09% 07/02/04 52,954,000 52,952,395
Yield 1.03% 07/09/04 15,000,000 14,996,567
Yield 1.11% 07/14/04 30,000,000 29,988,030
Yield 1.16% 07/21/04 51,410,000 51,376,929
Yield 1.25% 07/28/04 12,954,000 12,941,856
Yield 1.09% 08/03/04 5,000,000 4,995,004
Yield 1.38% 11/05/04 10,000,000 9,951,317
Fixed Rates:
7.36% 07/01/04 925,000 924,993
1.27% 08/04/04 20,000,000 19,999,713
4.63% 08/13/04 9,650,000 9,687,971
6.25% 08/13/04 7,095,000 7,136,253
1.36% 09/03/04 5,000,000 4,999,757
6.78% 09/17/04 500,000 505,649
1.25% 09/22/04 5,000,000 5,000,000
6.25% 11/15/04 3,780,000 3,847,000
6.50% 11/15/04 2,000,000 2,037,292
3.88% 12/15/04 3,100,000 3,135,740
4.13% 01/14/05 5,000,000 5,073,056
4.38% 02/15/05 5,000,000 5,094,749
1.50% 03/01/05 5,000,000 5,000,000
1.40% 04/01/05 5,000,000 5,000,000
1.50% 05/04/05 5,000,000 5,000,000
1.55% 05/06/05 5,000,000 5,000,000
1.65% 05/17/05 5,000,000 5,000,000
1.70% 05/23/05 5,000,000 5,000,000
------------
353,909,271
See notes to portfolios of investments and notes to financial statements.
39
U.S. GOVERNMENT SECURITIES SAVINGS FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
UNITED STATES
GOVERNMENT AND COUPON MATURITY PRINCIPAL
AGENCY OBLIGATIONS RATE DATE AMOUNT VALUE
STUDENT LOAN MARKETING ASSOCIATION 5.30%
- ----------------------------------------------------------------------------------
Fixed Rate:
3.38% 07/15/04 $23,400,000 $ 23,420,139
UNITED STATES TREASURY BILL 4.53%
- ----------------------------------------------------------------------------------
Yield 0.99% 07/08/04 20,000,000 19,996,150
- ----------------------------------------------------------------------------------
TOTAL INVESTMENTS 99.02% 437,405,280
- ----------------------------------------------------------------------------------
(cost $437,405,280)
Other assets and liabilities,
net 0.98% 4,316,246
------------
NET ASSETS 100% $441,721,526
------------
See notes to portfolios of investments and notes to financial statements.
40
NEAR-TERM TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS 96.47% RATE DATE AMOUNT VALUE
ALABAMA 3.15%
- ------------------------------------------------------------------------------------
DCH Health Care Authority Facilities
Revenue 5.00% 06/01/09 $250,000 $ 264,622
University Alabama, Series A 5.00% 09/01/09 300,000 322,860
----------
587,482
ARIZONA 2.89%
- ------------------------------------------------------------------------------------
Arizona State Transportation Board,
Series A 5.00% 07/01/09 300,000 324,042
Maricopa County, Arizona Unified School
District, GO 4.85% 07/01/11 200,000 215,000
----------
539,042
ARKANSAS 2.21%
- ------------------------------------------------------------------------------------
Arkansas State Community Water System
Public Water Authority Revenue 2.40% 10/01/05 200,000 200,290
Little Rock Arkansas Health Facilities
Board Hospital Revenue 6.80% 11/01/05 200,000 212,514
----------
412,804
CALIFORNIA 7.96%
- ------------------------------------------------------------------------------------
Association of Bay Area Governments
(ABAG) Finance Authority, Series C 4.00% 03/01/08 100,000 100,401
California State, GO 6.40% 02/01/06 500,000 535,425
Chino Basin Regional Financing Authority
Revenue 7.00% 08/01/06 250,000 274,837
Modesto Irrigation District Financing
Authority Revenue Domestic Water
Project, Series C 5.75% 09/01/15 200,000 213,366
Santa Clara County Financing Authority
Revenue 4.00% 08/01/06 350,000 361,809
----------
1,485,838
COLORADO 4.01%
- ------------------------------------------------------------------------------------
Adams & Arapahoe Counties Joint School
District, Series C, GO 5.75% 12/01/07 100,000 109,168
Colorado Springs Sales & Use Tax Revenue 5.00% 12/01/11 200,000 214,294
Platte River Power Authority Revenue,
Series FF 5.00% 06/01/07 400,000 425,164
----------
748,626
CONNECTICUT 3.45%
- ------------------------------------------------------------------------------------
Bridgeport, Series A, GO 6.00% 03/01/06 200,000 212,666
Connecticut State, Series C, GO 5.00% 12/15/08 400,000 430,976
----------
643,642
See notes to portfolios of investments and notes to financial statements.
41
NEAR-TERM TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
DELAWARE 3.42%
- ------------------------------------------------------------------------------------
Delaware State, Series A, GO 4.25% 03/01/09 $400,000 $ 420,692
Delaware Transportation Authority System
Revenue 5.50% 07/01/08 200,000 218,652
----------
639,344
DISTRICT OF COLUMBIA 0.88%
- ------------------------------------------------------------------------------------
District of Columbia, Unrefunded,
Series B 5.50% 06/01/09 150,000 165,061
FLORIDA 3.74%
- ------------------------------------------------------------------------------------
Florida State Board of Education Capital
Outlay, Series B, GO 5.25% 06/01/11 175,000 188,268
Hillsborough County Industrial
Development Authority Hospital Revenue 3.50% 10/01/09 205,000 198,073
Jacksonville Transportation Authority,
GO 6.50% 07/01/07 280,000 311,178
----------
697,519
GEORGIA 5.59%
- ------------------------------------------------------------------------------------
Atlanta Development Authority Revenue,
Series A 5.25% 07/01/12 375,000 392,453
Coweta County School District, GO 4.00% 08/01/06 175,000 180,941
Georgia Municipal Electric Authority
Power Revenue, Series A 5.30% 01/01/07 100,000 106,933
Marietta Georgia Development Authority
Revenue 3.00% 09/15/08 375,000 363,923
----------
1,044,250
ILLINOIS 1.26%
- ------------------------------------------------------------------------------------
Chicago Water Revenue (ZCB) 0.00% 11/01/08 275,000 235,980
INDIANA 1.32%
- ------------------------------------------------------------------------------------
Indianapolis, Indiana Local Public
Improvement Bond Bank, Series D 6.60% 02/01/07 225,000 246,224
IOWA 1.12%
- ------------------------------------------------------------------------------------
Iowa Finance Authority Hospital Facility
Revenue, Trinity Regional Hospital
Project 5.15% 07/01/04 210,000 210,000
KENTUCKY 1.51%
- ------------------------------------------------------------------------------------
Kentucky Infrastructure Authority
Revenue, Series K 3.00% 08/01/05 280,000 282,590
LOUISIANA 1.16%
- ------------------------------------------------------------------------------------
Shreveport, Louisiana, Series A , GO 5.25% 05/01/10 200,000 216,522
See notes to portfolios of investments and notes to financial statements.
42
NEAR-TERM TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
MARYLAND 2.20%
- ------------------------------------------------------------------------------------
Baltimore County, GO Unlimited Tax 5.00% 06/01/05 $165,000 $ 170,127
Maryland State Economic Development
Corporation Student Housing Revenue,
Frostburg State University Project 3.25% 10/01/04 240,000 239,791
----------
409,918
MASSACHUSETTS 1.28%
- ------------------------------------------------------------------------------------
Massachusetts State Health & Educational
Facilities Authority Revenue, Series D 5.00% 10/01/07 135,000 133,209
Massachusetts State, Series C, GO 4.625% 10/01/08 100,000 105,840
----------
239,049
MICHIGAN 1.74%
- ------------------------------------------------------------------------------------
Detroit, Michigan Local Development
Financial Authority, Series A 5.20% 05/01/10 130,000 134,657
Michigan Municipal Board Authority
Revenue 3.00% 11/01/09 200,000 190,334
----------
324,991
MISSISSIPPI 3.16%
- ------------------------------------------------------------------------------------
Mississippi Development Bank Special
Obligation 3.25% 11/01/07 300,000 296,412
Mississippi Hospital Equipment &
Facilities Authority Revenue 3.45% 04/01/07 300,000 294,249
----------
590,661
NEVADA 2.77%
- ------------------------------------------------------------------------------------
Nevada State Municipal Bond Bank Project
#51, Series A, GO 5.10% 01/01/08 250,000 259,200
Washoe County Gas & Water Facilities,
Revenue 6.30% 12/01/14 250,000 257,610
----------
516,810
NEW JERSEY 3.22%
- ------------------------------------------------------------------------------------
Jersey City, GO 6.00% 10/01/05 110,000 115,619
New Jersey State 5.125% 05/01/10 250,000 272,133
Washington Township Board of Education,
GO 5.10% 02/01/08 200,000 213,322
----------
601,074
NEW MEXICO 0.64%
- ------------------------------------------------------------------------------------
New Mexico State Highway Commission
Revenue 3.75% 06/15/06 115,000 118,790
See notes to portfolios of investments and notes to financial statements.
43
NEAR-TERM TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
NEW YORK 10.53%
- ------------------------------------------------------------------------------------
Hempstead Township, Series B, GO
Unlimited Tax 5.375% 11/15/10 $120,000 $ 129,721
New York City Transitional Financial
Authority Revenue, Series A 5.25% 11/01/08 225,000 244,314
New York, New York, Series B 5.25% 08/01/09 200,000 215,584
New York, New York, Series C 3.50% 08/01/07 300,000 304,803
New York State, GO 5.00% 03/01/08 250,000 266,720
New York State, Local Highway & Bridge,
Series A 5.375% 04/01/10 200,000 219,418
New York State, Medical Care Facilities
Financial Agency Revenue, Series D 5.10% 02/15/06 250,000 264,483
Schenectady Metroplex Development
Authority Revenue, Series A 5.00% 12/15/12 110,000 115,478
Tobacco Settlement Financing Corp.,
Series B 4.00% 06/01/07 200,000 204,956
----------
1,965,477
NORTH CAROLINA 1.02%
- ------------------------------------------------------------------------------------
North Carolina Eastern Municipal Power
Agency Revenue, Refunding, Series A 5.60% 01/01/10 175,000 189,600
OHIO 1.12%
- ------------------------------------------------------------------------------------
Ohio State Higher Education, Series B,
GO 4.25% 11/01/07 200,000 209,774
OREGON 1.85%
- ------------------------------------------------------------------------------------
Clackamas County Hospital Facilities
Authority Revenue 5.00% 05/01/07 200,000 210,840
Oregon State Department Transportation
Highway 5.00% 11/15/09 125,000 135,453
----------
346,293
PUERTO RICO 1.10%
- ------------------------------------------------------------------------------------
Puerto Rico Commonwealth Highway &
Transportation Authority Revenue,
Series F 5.00% 07/01/05 200,000 205,850
SOUTH CAROLINA 1.15%
- ------------------------------------------------------------------------------------
Horry County Hospitality Fee Special
Obligation 5.00% 04/01/10 200,000 214,348
TENNESSEE 1.63%
- ------------------------------------------------------------------------------------
Shelby County Tennessee Health
Educational & Housing Facilities Board
Revenue 5.15% 07/01/07 300,000 304,209
TEXAS 14.26%
- ------------------------------------------------------------------------------------
Arlington Refunded, Series A 5.00% 08/15/08 200,000 214,776
Austin Utility System Revenue, Series A 5.375% 11/15/05 200,000 202,400
Bexar County Refunded, GO 5.40% 06/15/12 200,000 210,806
See notes to portfolios of investments and notes to financial statements.
44
NEAR-TERM TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
TEXAS (CONT'D)
- ------------------------------------------------------------------------------------
Gulf Coast Industrial Development
Authority Pollution Control Revenue 4.95% 07/01/07 $385,000 $ 413,586
Killeen, Texas Independent School
District System, GO 5.00% 02/15/09 400,000 424,340
San Antonio Water System Revenue 5.00% 05/15/13 100,000 105,940
Southwest Higher Education Authority 4.30% 10/01/09 300,000 306,672
Texas State Affordable Housing Corp. 4.00% 11/01/06 265,000 264,581
Texas State Water Development Board
Revenue, Series A 5.125% 07/15/09 290,000 305,115
Texas Turnpike Authority Revenue 5.00% 06/01/08 200,000 214,090
----------
2,662,306
UTAH 1.14%
- ------------------------------------------------------------------------------------
Utah Transit Authority Sales Tax &
Transportation Revenue 4.90% 12/15/09 200,000 213,192
VIRGINIA 2.56%
- ------------------------------------------------------------------------------------
Virginia Commonwealth Transportation
Board 4.00% 05/15/07 460,000 477,489
WASHINGTON 0.58%
- ------------------------------------------------------------------------------------
Clark County, Washington School
District, GO Unlimited 5.125% 12/01/11 100,000 108,890
WISCONSIN 0.85%
- ------------------------------------------------------------------------------------
Milwaukee, Wisconsin, Series L, GO 4.60% 12/15/13 150,000 159,524
- ------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS 18,013,169
- ------------------------------------------------------------------------------------
(cost $17,902,183)
See notes to portfolios of investments and notes to financial statements.
45
NEAR-TERM TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COUPON MATURITY PRINCIPAL
REPURCHASE AGREEMENT 2.39% RATE DATE AMOUNT VALUE
Joint Tri-Party Repurchase Agreement,
UBS Financial Services, Inc.,
06/30/04, 1.29%, due 07/01/04,
repurchase price $446,199,
collateralized by U.S.
Treasury securities held in a
joint tri-party repurchase account
(cost $446,183) 1.29% 07/01/04 $446,183 $ 446,183
- ------------------------------------------------------------------------------------
TOTAL INVESTMENTS 98.86% 18,459,352
- ------------------------------------------------------------------------------------
(cost $18,348,366)
Other assets and liabilities, net 1.14% 213,764
-----------
NET ASSETS 100% $18,673,116
-----------
See notes to portfolios of investments and notes to financial statements.
46
TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS 100.68% RATE DATE AMOUNT VALUE
ALABAMA 2.21%
- -------------------------------------------------------------------------------------
Alabama State, GO Unlimited, Series A 4.00% 09/01/08 $ 600,000 $ 623,406
ARIZONA 1.16%
- -------------------------------------------------------------------------------------
Salt River Project Agricultural
Improvement & Power District Electric
System Revenue 6.00% 01/01/07 300,000 325,230
ARKANSAS 3.55%
- -------------------------------------------------------------------------------------
Arkansas State Community Water System
Public Water Authority Revenue 2.40% 10/01/05 300,000 300,435
Gravette Arkansas School District, GO
Unlimited, Series B 4.00% 06/01/09 290,000 297,047
Nettleton Arkansas Special School
District, GO Limited 4.20% 06/01/14 400,000 401,272
-----------
998,754
CALIFORNIA 7.49%
- -------------------------------------------------------------------------------------
Los Angeles, California University
School District, GO Unlimited,
Series A 5.375% 07/01/18 790,000 848,097
New Haven, California University School
District, GO Unlimited 5.75% 08/01/19 1,145,000 1,261,469
-----------
2,109,566
FLORIDA 1.00%
- -------------------------------------------------------------------------------------
Florida Board of Education Capital
Outlay, GO Unlimited Tax, Refunding,
Series A 6.625% 06/01/07 270,000 282,487
GEORGIA 2.55%
- -------------------------------------------------------------------------------------
Atlanta Development Authority Revenue 5.25% 07/01/22 500,000 503,260
Georgia Municipal Electric Authority
Power Revenue, Series A 5.30% 01/01/07 200,000 213,866
-----------
717,126
ILLINOIS 5.51%
- -------------------------------------------------------------------------------------
Du Page County, Refunding 5.60% 01/01/21 490,000 535,570
Illinois Development Financing
Authority Hospital Revenue, Adventist
Health Systems 5.65% 11/15/24 435,000 434,917
Illinois Development Financing
Authority Revenue Presbyterian Home
Lake Project, Series B 6.25% 09/01/17 250,000 271,715
Illinois Regional Transportation
Authority Revenue, Series A 7.20% 11/01/20 250,000 309,410
-----------
1,551,612
See notes to portfolios of investments and notes to financial statements.
47
TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
IOWA 1.86%
- -------------------------------------------------------------------------------------
Polk County Revenue Catholic Health
Initiatives, Series A 5.125% 12/01/11 $ 500,000 $ 522,895
KANSAS 3.90%
- -------------------------------------------------------------------------------------
Kansas State Development Finance
Authority Hospital Revenue, Series Z 5.00% 12/15/12 500,000 524,700
University of Kansas Hospital Authority
Health Facilities Revenue 5.625% 09/01/27 570,000 573,905
-----------
1,098,605
MARYLAND 4.00%
- -------------------------------------------------------------------------------------
Maryland State Department of
Transportation 5.00% 11/01/10 750,000 816,750
Maryland State Health & Higher
Educational Facilities Authority
Revenue 5.75% 07/01/21 300,000 310,053
-----------
1,126,803
MICHIGAN 4.36%
- -------------------------------------------------------------------------------------
Belding Area Schools, Refunding 5.00% 05/01/18 390,000 399,773
Detroit, Michigan Local Development
Financing Authority, Refunding,
Series A 5.375% 05/01/18 300,000 300,297
Michigan State Hospital Finance
Authority Revenue 4.90% 05/15/13 500,000 527,370
-----------
1,227,440
MISSOURI 19.28%
- -------------------------------------------------------------------------------------
Missouri State Health & Educational
Facilities Authority Revenue,
Series D 1.05% 09/01/30 5,000,000 5,000,000
St. Louis Airport Development Program,
Series A 5.00% 07/01/11 400,000 429,980
-----------
5,429,980
NEW JERSEY 2.85%
- -------------------------------------------------------------------------------------
New Jersey Health Care Facilities
Financing Authority Revenue 4.375% 07/01/10 460,000 474,959
New Jersey State Transportation
Authority, Series A 5.00% 06/15/13 315,000 328,885
-----------
803,844
NEW MEXICO 0.73%
- -------------------------------------------------------------------------------------
New Mexico State Highway Commission
Revenue 3.75% 06/15/06 200,000 206,592
See notes to portfolios of investments and notes to financial statements.
48
TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
NEW YORK 4.08%
- -------------------------------------------------------------------------------------
Albany Parking Authority Revenue 5.00% 07/15/09 $ 400,000 $ 416,988
New York, GO Unlimited, Series H 5.25% 03/15/14 450,000 469,134
New York, GO Unlimited, Series J 5.00% 05/15/12 250,000 261,548
-----------
1,147,670
NORTH CAROLINA 1.92%
- -------------------------------------------------------------------------------------
North Carolina Eastern Municipal Power
Agency Revenue, Refunding, Series A 5.60% 01/01/10 500,000 541,715
OHIO 2.86%
- -------------------------------------------------------------------------------------
Ohio State Mental Health Facilities
Revenue 5.50% 06/01/15 300,000 323,331
Olentangy Local School District, GO
Limited Tax, Series A 6.25% 12/01/15 240,000 249,629
South Euclid Special Assessment, GO
Limited Tax 6.70% 12/01/14 200,000 233,430
-----------
806,390
PENNSYLVANIA 1.90%
- -------------------------------------------------------------------------------------
Chester County Health & Educational
Facilities Authority Revenue 5.00% 05/15/08 250,000 267,140
Philadelphia Hospital & Higher
Educational Facilities Authority
Revenue 4.95% 06/15/06 265,000 268,760
-----------
535,900
PUERTO RICO 1.08%
- -------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority
Revenue, Series II 5.125% 07/01/26 300,000 303,612
RHODE ISLAND 3.82%
- -------------------------------------------------------------------------------------
North Providence, GO Unlimited Tax,
Series A 6.05% 07/01/13 500,000 559,280
Rhode Island State Health & Educational
Building Corporation Revenue 6.50% 08/15/32 500,000 516,195
-----------
1,075,475
SOUTH CAROLINA 0.89%
- -------------------------------------------------------------------------------------
South Carolina Jobs Economic
Development Authority Revenue 5.00% 11/01/23 250,000 250,798
TEXAS 17.71%
- -------------------------------------------------------------------------------------
Austin Utility System Revenue, Series A 5.375% 11/15/05 300,000 303,600
Austin, Texas, GO 5.00% 09/01/16 565,000 581,865
See notes to portfolios of investments and notes to financial statements.
49
TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
TEXAS (CONT'D)
- -------------------------------------------------------------------------------------
Brownsville, Texas Utility System
Revenue, Series A 1.00% 09/01/27 $3,600,000 $ 3,600,000
Duncanville, Texas Independent School
District, GO Unlimited, Series B 5.25% 02/15/32 500,000 503,400
-----------
4,988,865
UTAH 1.13%
- -------------------------------------------------------------------------------------
Weber County School District, Series A 5.15% 06/15/08 300,000 318,375
VERMONT 0.98%
- -------------------------------------------------------------------------------------
Vermont Educational & Health Buildings
Financing Agency Revenue, Vermont Law
School Project, Series A 5.375% 01/01/23 300,000 276,441
VIRGINIA 2.90%
- -------------------------------------------------------------------------------------
Riverside Virginia Regional Jail
Authority Facilities Revenue 5.00% 07/01/11 750,000 817,275
WASHINGTON 0.96%
- -------------------------------------------------------------------------------------
King & Snohomish Counties' School
District, Series C 5.00% 06/15/10 250,000 269,995
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS 28,356,851
- -------------------------------------------------------------------------------------
(cost $27,829,400)
REPURCHASE AGREEMENT 3.49%
Joint Tri-Party Repurchase Agreement,
UBS Financial Services, Inc.,
06/30/04, 1.29%, due 07/01/04,
repurchase price $983,505,
collateralized by U.S. Treasury
securities held in a joint tri-party
repurchase account (cost $983,470) 1.29% 07/01/04 983,470 983,470
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS 104.17% 29,340,321
- -------------------------------------------------------------------------------------
(cost $28,812,870)
Other assets and liabilities, net (4.17)% (1,173,813)
-----------
NET ASSETS 100% $28,166,508
-----------
See notes to portfolios of investments and notes to financial statements.
50
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS 89.41% SHARES VALUE
AEROSPACE/DEFENSE 0.83%
- --------------------------------------------------------------------------------------
Orbital Sciences Corp. 12,000 $ 165,720*
AGRICULTURE PRODUCTS 0.54%
- --------------------------------------------------------------------------------------
Archer Daniels Midland Co. 6,400 107,392
BANKS 3.92%
- --------------------------------------------------------------------------------------
Commerce Bancorp, Inc. 4,500 247,545
First Horizon National Corp. 4,500 204,615
Mellon Financial Corp. 5,900 173,047
UCBH Holdings, Inc. 4,000 158,080
-----------
783,287
BEVERAGES 1.35%
- --------------------------------------------------------------------------------------
Anheuser-Busch Companies, Inc. 2,000 108,000
PepsiCo, Inc. 3,000 161,640
-----------
269,640
BIOTECHNOLOGY 1.37%
- --------------------------------------------------------------------------------------
Amgen, Inc. 5,000 272,850*
CHEMICALS & ALLIED PRODUCTS 2.13%
- --------------------------------------------------------------------------------------
Air Products & Chemicals, Inc. 2,500 131,125
Dow Chemical Co. 2,300 93,610
E.I. du Pont de Nemours and Co. 1,800 79,956
Hercules, Inc. 10,000 121,900*
-----------
426,591
COMPUTER & OFFICE EQUIPMENT 2.32%
- --------------------------------------------------------------------------------------
Cisco Systems, Inc. 12,000 284,400*
Dell Inc. 2,240 80,237*
Juniper Networks Inc. 4,074 100,098*
-----------
464,735
COMPUTER SERVICES 0.78%
- --------------------------------------------------------------------------------------
EarthLink, Inc. 15,000 155,250*
CONSTRUCTION 0.84%
- --------------------------------------------------------------------------------------
Dycom Industries, Inc. 6,000 168,000*
See notes to portfolios of investments and notes to financial statements.
51
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
COSMETICS 1.98%
- --------------------------------------------------------------------------------------
Avon Products, Inc. 4,000 $ 184,560
Elizabeth Arden, Inc. 10,000 210,400*
-----------
394,960
DATA PROCESSING & SOFTWARE 4.94%
- --------------------------------------------------------------------------------------
Electronic Arts, Inc. 4,000 218,200*
FileNET Corp. 7,000 220,990*
First Data Corp. 3,000 133,560
Microsoft Corp. 13,300 379,848
Stockgroup Information Systems, Inc. 110,000 34,100*
-----------
986,698
E-COMMERCE/SERVICES 1.85%
- --------------------------------------------------------------------------------------
Digital River, Inc. 8,000 261,040*
InterActiveCorp. 3,600 108,504*
-----------
369,544
ELECTRONICS & COMPONENTS 3.72%
- --------------------------------------------------------------------------------------
Analog Devices, Inc. 2,500 117,700
Broadcom Corp., Class A 4,000 187,080*
Intel Corp. 3,660 101,016
JDS Uniphase Corp. 24,000 90,960*
Novellus Systems, Inc. 4,000 125,760*
Texas Instruments, Inc. 5,000 120,900
-----------
743,416
FINANCIAL SERVICES 8.17%
- --------------------------------------------------------------------------------------
American Express Co. 4,600 236,348
Capital One Financial Corp. 1,900 129,922
Citigroup, Inc. 9,500 441,750
J.P. Morgan Chase & Co. 4,700 182,219
Legg Mason, Inc. 4,200 382,242
Lehman Brothers Holdings, Inc. 1,200 90,300
Morgan Stanley Dean Witter & Co. 3,200 168,864
-----------
1,631,645
FORESTRY 0.82%
- --------------------------------------------------------------------------------------
Aracruz Celulose S.A., ADR 5,000 163,300
GAMING 0.38%
- --------------------------------------------------------------------------------------
Scientific Games Corp., Class A 4,000 76,560*
See notes to portfolios of investments and notes to financial statements.
52
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
HEALTHCARE DISTRIBUTORS 3.25%
- --------------------------------------------------------------------------------------
AmerisourceBergen Corp., Class A 3,000 $ 179,340
Cardinal Health, Inc. 3,000 210,150
Express Scripts, Inc. 1,700 134,691*
HCA Inc. 3,000 124,770
-----------
648,951
HEALTHCARE EQUIPMENT & FACILITIES 1.35%
- --------------------------------------------------------------------------------------
VCA Antech, Inc. 6,000 268,920*
HOTELS 1.81%
- --------------------------------------------------------------------------------------
Ameristar Casinos, Inc. 4,800 161,184
Choice Hotels International, Inc. 4,000 200,640
-----------
361,824
HOUSEHOLD APPLIANCES 2.11%
- --------------------------------------------------------------------------------------
General Electric Co. 13,000 421,200
HUMAN RESOURCES 0.65%
- --------------------------------------------------------------------------------------
Labor Ready, Inc. 8,400 130,200*
INSURANCE 6.75%
- --------------------------------------------------------------------------------------
ACE Ltd. 3,000 126,840
American International Group, Inc. 3,500 249,480
Marsh & McLennan Companies, Inc. 4,500 204,210
Philadelphia Consolidated Holding Corp. 2,400 144,168*
ProAssurance Corp. 4,500 153,495*
Selective Insurance Group, Inc. 5,500 219,340
State Auto Financial Corp. 1,800 55,296
The PMI Group, Inc. 4,500 195,840
-----------
1,348,669
MANAGED HEALTH CARE 0.44%
- --------------------------------------------------------------------------------------
UnitedHealth Group, Inc. 1,400 87,150
MANUFACTURING 3.14%
- --------------------------------------------------------------------------------------
3M Co. 1,400 126,014
Illinois Tool Works, Inc. 1,400 134,246
Ingersoll-Rand Co., Class A 2,200 150,282
Oshkosh Truck Corp. 2,000 114,620
Terex Corp. 3,000 102,390*
-----------
627,552
See notes to portfolios of investments and notes to financial statements.
53
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
MEDIA 0.80%
- --------------------------------------------------------------------------------------
Time Warner, Inc. 9,100 $ 159,978*
METAL & MINERAL MINING 6.30%
- --------------------------------------------------------------------------------------
Alcoa, Inc. 3,000 99,090
Apollo Gold Corp. 78,125 106,637*
Bema Gold Corp., Warrants (October 2007) 25,000 43,820*
Inco Ltd. 5,000 172,800*
Joy Global, Inc. 2,200 65,868
Phelps Dodge Corp. 2,000 155,020*
United States Steel Corp. 3,500 122,920
Westmoreland Coal Co. 3,000 58,350*
Wheaton River Minerals Ltd., Warrants (March 2007) 125,000 199,523*
Wheaton River Minerals Ltd., Warrants (May 2007) 150,000 233,833*
-----------
1,257,861
OIL & GAS DRILLING 0.95%
- --------------------------------------------------------------------------------------
Nabors Industries, Inc. 2,000 90,440*
Patterson-UTI Energy, Inc. 3,000 100,230
-----------
190,670
OIL & GAS EXPLORATION & PRODUCTION 0.29%
- --------------------------------------------------------------------------------------
Chesapeake Energy Corp. 4,000 58,880
OIL & GAS PIPELINES 1.27%
- --------------------------------------------------------------------------------------
Georgia Gulf Corp. 4,000 143,440
Lone Star Technologies, Inc. 4,000 110,240*
-----------
253,680
OIL & GAS ROYALTY TRUSTS 1.71%
- --------------------------------------------------------------------------------------
Enerplus Resources Fund 6,000 170,760
San Juan Basin Royalty Trust 7,000 170,520
-----------
341,280
PAPER PRODUCTS 1.04%
- --------------------------------------------------------------------------------------
Sappi Ltd., Sponsored ADR 7,000 107,450
Smurfit-Stone Container Corp. 5,000 99,750*
-----------
207,200
PHARMACEUTICALS 7.43%
- --------------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 8,000 196,000
Eli Lilly & Co. 5,500 384,505
See notes to portfolios of investments and notes to financial statements.
54
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
PHARMACEUTICALS (CONT'D)
- --------------------------------------------------------------------------------------
Inveresk Research Group, Inc. 6,000 $ 185,040*
Johnson & Johnson 3,700 206,090
Pfizer, Inc. 9,675 331,659
Wyeth 5,000 180,800
-----------
1,484,094
POULTRY 1.09%
- --------------------------------------------------------------------------------------
Pilgrim's Pride Corp. 7,500 217,050
RESTAURANTS 0.98%
- --------------------------------------------------------------------------------------
McDonald's Corp. 7,500 195,000
RETAIL 6.60%
- --------------------------------------------------------------------------------------
7-Eleven, Inc. 6,400 114,240*
bebe stores, inc. 8,400 168,000*
Borders Group, Inc. 6,000 140,640
Hasbro, Inc. 5,700 108,300
Hibbett Sporting Goods, Inc. 7,600 207,860*
Starbucks Corp. 1,200 52,176*
The Children's Place Retail Stores, Inc. 4,400 103,488*
Urban Outfitters, Inc. 2,800 170,548*
Wal-Mart Stores, Inc. 4,780 252,193
-----------
1,317,445
TELECOMMUNICATIONS 1.00%
- --------------------------------------------------------------------------------------
Stream Communications Network, Inc. 190,000 199,500*
UTILITIES 1.93%
- --------------------------------------------------------------------------------------
Calpine Corp. 25,000 108,000*
El Paso Corp. 20,000 157,600
Sempra Energy 3,500 120,505
-----------
386,105
WHOLESALE & DISTRIBUTION 2.58%
- --------------------------------------------------------------------------------------
Costco Wholesale Corp. 3,000 123,210
Hughes Supply, Inc. 3,000 176,790
SYSCO Corp. 6,000 215,220
-----------
515,220
- --------------------------------------------------------------------------------------
TOTAL COMMON STOCKS AND WARRANTS 17,858,017
- --------------------------------------------------------------------------------------
(cost $15,986,363)
See notes to portfolios of investments and notes to financial statements.
55
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
PRINCIPAL
REPURCHASE AGREEMENT 11.13% AMOUNT VALUE
Joint Tri-Party Repurchase Agreement, UBS Financial
Services, Inc., 06/30/04, 1.29%, due 07/01/04,
repurchase price $2,223,587, collateralized by U.S.
Treasury securities held in a joint tri-party
repurchase account (cost $2,223,507) $2,223,507 $ 2,223,507
- --------------------------------------------------------------------------------------
TOTAL INVESTMENTS 100.54% 20,081,524
- --------------------------------------------------------------------------------------
(cost $18,209,870)
Other assets and liabilities, net (0.54)% (107,529)
-----------
NET ASSETS 100% $19,973,995
-----------
See notes to portfolios of investments and notes to financial statements.
56
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS 83.66% SHARES VALUE
APPAREL 2.62%
- ----------------------------------------------------------------------------------------
Li & Fung Ltd. 630,000 $ 920,799
AUTOMOBILE 1.65%
- ----------------------------------------------------------------------------------------
Denway Motors Ltd. 1,600,000 579,506
BANKING & FINANCIAL SERVICES 9.24%
- ----------------------------------------------------------------------------------------
CITIC International Financial Holdings Ltd. 800,000 292,317
Hong Kong Exchanges & Clearing Ltd. 40,000 82,310
HSBC Holdings plc 65,000 979,198
NETeller plc 28,000 79,682*
SE Global Equities Corp. 387,500 65,875*
Standard Chartered plc 14,000 225,264
The Bank of East Asia Ltd. 240,000 687,714
Wing Hang Bank Ltd. 140,000 831,052
-----------
3,243,412
BUILDING MATERIALS 0.79%
- ----------------------------------------------------------------------------------------
Anhui Conch Cement Company Ltd., H shares 250,000 277,253
CHEMICALS & ALLIED PRODUCTS 3.54%
- ----------------------------------------------------------------------------------------
Kingboard Chemical Holdings Ltd. 300,000 521,171
Sinopec Beijing Yanhua Petrochemical Co., Ltd.,
H shares 1,200,000 388,474
Sinopec Yizheng Chemical Fibre Co., Ltd., H shares 800,000 141,543
Sinopec Zhenhai Refining and Chemical Co., Ltd.,
H shares 200,000 192,314
-----------
1,243,502
COMPUTER & OFFICE EQUIPMENT 1.16%
- ----------------------------------------------------------------------------------------
Hon Hai Precision Industry Co., Ltd., Sponsored GDR 54,000 405,000*
CONGLOMERATES 2.40%
- ----------------------------------------------------------------------------------------
China Merchants Holdings International Company, Ltd. 479,000 644,828
Citic Pacific Ltd. 80,000 195,904
-----------
840,732
EDUCATION 1.99%
- ----------------------------------------------------------------------------------------
Capital Alliance Group, Inc. 1,673,332 698,938*+
ELECTRONIC EQUIPMENT 8.85%
- ----------------------------------------------------------------------------------------
ASM Pacific Technology Ltd. 161,000 605,834
AU Optronics Corp., Sponsored ADR 12,250 200,165
Samsung Electronics, GDR Non-Voting Shares, 144A 4,500 925,875
Skyworth Digital Holdings Ltd. 1,200,000 315,395
See notes to portfolios of investments and notes to financial statements.
57
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
ELECTRONIC EQUIPMENT (CONT'D)
- ----------------------------------------------------------------------------------------
Taiwan Semiconductor Manufacturing Co., Ltd.,
Sponsored ADR 21,490 $ 178,582
Techtronic Industries Company, Ltd. 450,000 718,292
United Microelectronics Corporation, Sponsored ADR 37,000 159,470*
Yageo Corp. 1 2*
-----------
3,103,615
FOOD 1.02%
- ----------------------------------------------------------------------------------------
COFCO International Ltd. 700,000 358,986
HOTELS 0.86%
- ----------------------------------------------------------------------------------------
The Hong Kong & Shanghai Hotels Ltd. 500,000 302,894
INTERNET 1.01%
- ----------------------------------------------------------------------------------------
Asia Broadband, Inc. 1,075,500 354,915*+
INVESTMENT TRUSTS 5.40%
- ----------------------------------------------------------------------------------------
iShares MSCI Hong Kong Index Fund 30,000 303,900
iShares MSCI Japan Index Fund 33,000 350,460
iShares MSCI Malaysia Index Fund 42,000 270,900
iShares MSCI Singapore (Free) Index Fund 25,000 156,500
iShares MSCI South Korea Index Fund 20,000 486,800
iShares MSCI Taiwan Index Fund 30,000 324,300
-----------
1,892,860
NATURAL RESOURCES 13.03%
- ----------------------------------------------------------------------------------------
Aluminum Corporation of China Ltd., H shares 400,000 214,109
Apac Minerals, Inc. 307,500 126,147*
Apac Minerals, Inc., Warrants (August 2004) 100,000 3,729*
Apac Minerals, Inc., Warrants (August 2005) 28,750 0*
Caledon Resources Corp. plc 900,000 93,802*
China Energy Ventures Corp. 1,145,350 641,396*
China NetTV Holdings, Inc. 153,750 7,841*
China NetTV Holdings, Inc. (RS) 500,000 24,480*
China NetTV Holdings, Inc., Warrants (September 2006) (RS) 500,000 0*
Entree Gold, Inc. 200,000 123,816*
Entree Gold, Inc., Warrants (October 2005) 100,000 0*
Erdene Gold, Inc. 100,000 59,670*
European Minerals Corp. 50,000 27,500*
Global Alumina Products Corp. 200,000 410,000*
Global Alumina Products Corp., Warrants (May 2006) 100,000 55,000*
Jiangxi Copper Co., Ltd. 736,000 332,626
Nu XMP Ventures Ltd. (RS) 100,000 44,641*
Nu XMP Ventures Ltd., Warrants (May 2005) (RS) 50,000 0*
See notes to portfolios of investments and notes to financial statements.
58
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
NATURAL RESOURCES (CONT'D)
- ----------------------------------------------------------------------------------------
Olympus Pacific Minerals, Inc. 340,500 $ 101,589*
Olympus Pacific Minerals, Inc., Warrants (October 2005) 250,000 0*
Silk Road Resources Ltd. 260,000 126,054*
Silk Road Resources Ltd., Warrants (June 2005) 130,000 0*
Spur Ventures, Inc. 537,950 601,868*
Sterling Group Ventures, Inc. 100,000 95,000*
Sterling Group Ventures, Inc., Units (RS) 500,000 616,000*
TVI Pacific, Inc. 1,185,714 137,082*
TVI Pacific, Inc., Warrants (November 2005) 1,185,714 66,330*
Western Canadian Coal Corp. 100,000 102,745
Western Canadian Coal Corp., Warrants (April 2005) (RS) 50,000 15,962*
Yanzhou Coal Mining Co., Ltd., H shares 500,000 544,889
-----------
4,572,276
OFFICE SUPPLIES 0.00%
- ----------------------------------------------------------------------------------------
China First Pencil Co., Ltd., B shares 1 0*
Daying Modern Agricultural Co. 1 0*
-----------
0
OIL & GAS EXTRACTION 2.77%
- ----------------------------------------------------------------------------------------
China Petroleum & Chemical Corporation, H shares 1,000,000 365,396
CNOOC Ltd., ADR 6,000 256,500
Ivanhoe Mines Ltd. 65,000 349,071*
-----------
970,967
PHARMACEUTICALS 1.60%
- ----------------------------------------------------------------------------------------
China Pharmaceutical Group Ltd. 1,800,000 501,939
Dragon Pharmaceuticals, Inc. 60,000 60,000*
-----------
561,939
PUBLISHING 0.45%
- ----------------------------------------------------------------------------------------
Lingo Media, Inc. 900,000 157,082*+
REAL ESTATE DEVELOPERS 2.62%
- ----------------------------------------------------------------------------------------
China Overseas Land & Investment Ltd. 2,400,000 415,398
New World Development Co., Ltd. 240,000 176,929
Sun Hung Kai Properties Ltd. 40,000 328,216
-----------
920,543
RETAIL 4.87%
- ----------------------------------------------------------------------------------------
Digital China Holdings Ltd. 1,800,000 490,400*
Esprit Holdings Ltd. 140,000 626,430
See notes to portfolios of investments and notes to financial statements.
59
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
RETAIL (CONT'D)
- ----------------------------------------------------------------------------------------
Sa Sa International Holdings Ltd. 1,500,000 $ 591,365
Shanghai Friendship Group, Inc., Co., B shares 1 1
-----------
1,708,196
SHIPPING & CONTAINERS 3.54%
- ----------------------------------------------------------------------------------------
China International Marine Containers (Group) Co.,
Ltd., B shares 424,141 547,595
China Shipping Development Co., Ltd., H shares 500,000 299,689
Cosco Pacific Ltd. 285,000 394,628
-----------
1,241,912
STEEL MANUFACTURING 1.34%
- ----------------------------------------------------------------------------------------
Angang New Steel Co., Ltd., H shares 400,000 141,030
Maanshan Iron & Steel Series Co., Ltd. 500,000 161,864
POSCO, ADR 5,000 167,550
-----------
470,444
TELECOMMUNICATIONS 6.31%
- ----------------------------------------------------------------------------------------
China Mobile (Hong Kong) Ltd., H shares 200,000 605,148
China Telecom Corp., Ltd. 500,000 174,685
Chunghwa Telecom Co., Ltd. 28,000 493,920
Philippine Long Distance Telephone Co., ADR 45,000 938,700*
-----------
2,212,453
TRANSPORTATION 1.62%
- ----------------------------------------------------------------------------------------
Zhejiang Expressway Co., Ltd., H shares 800,000 569,249
UTILITIES 4.98%
- ----------------------------------------------------------------------------------------
Beijing Datang Power Generation Co., Ltd. 900,000 703,869
Hong Kong & China Gas Co., Ltd. 361,693 591,248
Huaneng Power International, Inc., ADR 12,500 452,500
-----------
1,747,617
- ----------------------------------------------------------------------------------------
TOTAL COMMON STOCKS AND WARRANTS 29,355,090
- ----------------------------------------------------------------------------------------
(cost $28,513,806)
See notes to portfolios of investments and notes to financial statements.
60
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
PRINCIPAL
REPURCHASE AGREEMENT 17.57% AMOUNT VALUE
Joint Tri-Party Repurchase Agreement, UBS Financial
Services, Inc., 06/30/04, 1.29%, due 07/01/04,
repurchase price $6,165,846, collateralized by U.S.
Treasury securities held in a joint tri-party
repurchase account (cost $6,165,625) $6,165,625 $ 6,165,625
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS 101.23% 35,520,715
- ----------------------------------------------------------------------------------------
(cost $34,679,431)
Other assets and liabilities, net (1.23)% (431,149)
-----------
NET ASSETS 100% $35,089,566
-----------
See notes to portfolios of investments and notes to financial statements.
61
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS 89.40% SHARES VALUE
ALUMINUM 3.75%
- -------------------------------------------------------------------------------------------
Alcan, Inc. 30,000 $ 1,242,000
Alcoa, Inc. 60,000 1,981,800
Global Alumina Products Corp. 800,000 1,640,000*
Global Alumina Products Corp., Warrants (May 2006) 400,000 220,000*
------------
5,083,800
COAL 4.65%
- -------------------------------------------------------------------------------------------
Adobe Ventures, Inc. 1,000,000 525,845*+
Adobe Ventures, Inc. (RS) 1,100,000 549,713*+
Adobe Ventures, Inc., S/R (RS) 1,100,000 549,508*+
Adobe Ventures, Inc., Warrants (March 2006) (RS) 550,000 0*
Arch Coal, Inc. 40,000 1,463,600
Fording Canadian Coal Trust 15,000 631,573
NEMI Northern Energy & Mining, Inc. 769,230 774,566*
NEMI Northern Energy & Mining, Inc., Warrants (May 2005) 769,230 344,251*
Western Canadian Coal Corp. 20,000 21,630*
Western Canadian Coal Corp. (RS) 150,000 154,117*
Western Canadian Coal Corp., S/R (RS) 290,000 298,068*
Western Canadian Coal Corp., Warrants (April 2005) (RS) 75,000 23,943*
Westmoreland Coal Co. 50,000 972,500*
------------
6,309,314
COPPER 2.61%
- -------------------------------------------------------------------------------------------
African Copper plc, Units (RS) 1,000,000 634,410*
Amerigo Resources Ltd. 700,100 955,607*
EuroZinc Mining Corp., Special Warrants (RS) 834,000 413,672*
Jiangxi Copper Co., Ltd. 3,382,000 1,528,453
------------
3,532,142
DATA PROCESSING & SOFTWARE 0.02%
- -------------------------------------------------------------------------------------------
Stockgroup Information Systems, Inc. 110,000 34,100*
DIAMOND MINING & EXPLORATION 0.17%
- -------------------------------------------------------------------------------------------
Diagem International Resource Corp., Warrants
(July 2004) 500,000 0*
Diamond Fields International Ltd. 262,000 134,840*
Diamond Fields International Ltd., Warrants
(November 2006) 112,000 0*
Diamonds North Resources Ltd. 75,000 53,144*
Diamonds North Resources Ltd., Warrants (March 2005) 75,000 8,391*
Metalex Ventures Ltd. 30,000 30,879*
------------
227,254
See notes to portfolios of investments and notes to financial statements.
62
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
DIVERSIFIED CHEMICALS 4.62%
- -------------------------------------------------------------------------------------------
Dow Chemical Co. 17,000 $ 691,900
E.I. du Pont de Nemours and Co. 20,000 888,400
FMC Corp. 40,000 1,724,400*
Georgia Gulf Corp. 40,000 1,434,400
Imperial Chemical Industries plc, ADR 90,000 1,525,500
------------
6,264,600
ELECTRICITY GENERATION 1.12%
- -------------------------------------------------------------------------------------------
Great Lakes Hydro Income Fund 65,000 784,926
Northland Power Income Fund 85,000 729,097
------------
1,514,023
FERROCHROME 0.00%
- -------------------------------------------------------------------------------------------
Zimasco Consolidated Enterprises Ltd. (RS) 22,000 4,840
FINANCIAL SERVICES 0.14%
- -------------------------------------------------------------------------------------------
GMP Capital Corp. 15,000 192,437
GAS DISTRIBUTION 2.58%
- -------------------------------------------------------------------------------------------
El Paso Corp. 150,000 1,182,000
Energy Savings Income Fund 200,000 2,312,225
------------
3,494,225
GOLD & COPPER MINING 7.41%
- -------------------------------------------------------------------------------------------
European Minerals Corp. 488,250 268,537*
European Minerals Corp., Warrants (December 2008) 169,125 39,744*
Ivanhoe Mines Ltd. 350,000 1,879,615*
Northern Orion Resources, Inc. 2,194,700 5,025,531*
Northern Orion Resources, Inc., Warrants (March 2005) 250,000 33,005*
Northern Orion Resources, Inc., Warrants (May 2008) 615,200 688,297*
Northgate Exploration Ltd., Warrants (December 2006) 745,000 316,738*
Taseko Mines Ltd. 450,000 476,617*
Taseko Mines Ltd. (RS) 375,000 377,322*
Taseko Mines Ltd., Warrants (March 2005) (RS) 375,000 0*
Taseko Mines Ltd., Warrants (December 2005) 250,000 124,935*
Wheaton River Minerals Ltd., Warrants (March 2007) 122,450 195,452*
Wheaton River Minerals Ltd., Warrants (May 2007) 238,250 371,405*
Wheaton River Minerals Ltd., Warrants (August 2008) 225,000 250,056*
------------
10,047,254
GOLD & NICKEL MINING 0.04%
- -------------------------------------------------------------------------------------------
Rio Narcea Gold Mines Ltd., Warrants (September 2008) 112,500 56,221*
See notes to portfolios of investments and notes to financial statements.
63
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
GOLD MINING 7.46%
- -------------------------------------------------------------------------------------------
Agnico-Eagle Mines Ltd., Warrants (November 2007) 10,000 $ 28,000*
AngloGold Ashanti Ltd., ADR 34,800 1,119,168
Apac Minerals, Inc. 86,000 35,280*
Apac Minerals, Inc., Warrants (August 2004) 100,000 3,729*
Apac Minerals, Inc., Warrants (April 2005) 43,000 0*
Apollo Gold Corp. 503,125 686,745*
Bema Gold Corp. 517,500 1,405,012*
Bema Gold Corp., Warrants (October 2007) 125,000 219,102*
Bolivar Gold Corp. 750,000 799,955*
Bolivar Gold Corp., Warrants (March 2008) 180,000 116,805*
Bolivar Gold Corp., Warrants (August 2008) 250,000 110,949*
Caledon Resources Corp. plc 1,000,000 104,224*
China NetTV Holdings, Inc. 153,750 7,841*
China NetTV Holdings, Inc. (RS) 500,000 24,480*
China NetTV Holdings, Inc., Warrants (September 2005) (RS) 500,000 0*
Corona Gold Ltd. 50,000 348*
Dumont Nickel, Inc. 500,000 87,641*
Dumont Nickel, Inc., Warrants (October 2005) 250,000 0*
Entree Gold, Inc. 160,000 99,053*
Entree Gold, Inc., Warrants (October 2005) 80,000 0*
Erdene Gold, Inc. 200,000 119,341*
Glencairn Gold Corp. 800,000 358,025*
Glencairn Gold Corp. (RS) 100,000 44,750*
Glencairn Gold Corp., Warrants (February 2005) 150,000 0*
Glencairn Gold Corp., Warrants (November 2008) 250,000 42,888*
Glencairn Gold Corp., Warrants (November 2008) (RS) 50,000 8,578*
Goldcorp, Inc., Warrants (April 2007) 5,000 28,125*
High River Gold Mines Ltd. 200,000 243,157*
Jonpol Explorations Ltd. 1,000,000 193,929*
Kinross Gold Corp., Warrants (December 2007) 135,000 69,982*
Medoro Resources Ltd. 200,000 35,802*
Metallica Resources, Inc. 276,000 263,504*
Metallica Resources, Inc., Warrants (December 2008) 200,000 52,211*
Mexgold Resources, Inc. 300,000 660,103*
Mexgold Resources, Inc., Warrants (February 2006) 150,000 50,347*
Nevada Pacific Gold Ltd. 432,432 338,669*
Nevada Pacific Gold Ltd., Warrants (September 2004) 216,216 96,763*
Nevsun Resources Ltd., Warrants (May 2005) 50,000 81,674*
New Sleeper Gold Corp. 200,000 134,258*
New Sleeper Gold Corp., Warrants (December 2008) 100,000 0*
Olympus Pacific Minerals, Inc. 375,000 111,882*
Olympus Pacific Minerals, Inc., Warrants (October 2005) 250,000 0*
Pacific Rim Mining Corp. 300,000 200,940*
Placer Dome, Inc. 20,000 332,800
Planet Exploration, Inc. 160,000 89,505*
Planet Exploration, Inc., Warrants (December 2005) 160,000 0*
See notes to portfolios of investments and notes to financial statements.
64
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
GOLD MINING (CONT'D)
- -------------------------------------------------------------------------------------------
Ridge Mining plc 575,000 $ 588,868*
Silk Road Resources Ltd. 265,000 128,478*
Silk Road Resources Ltd., Warrants (June 2005) 132,500 0*
Stingray Resources, Inc. 120,000 76,975*
Stingray Resources, Inc., Warrants (December 2005) 60,000 0*
Strongbow Exploration, Inc. 50,000 26,106*
TLC Ventures Corp. (RS) 175,000 223,204*
TLC Ventures Corp., Warrants (May 2005) (RS) 87,500 18,600*
TVI Pacific, Inc. 2,371,428 274,164*
TVI Pacific, Inc., Warrants (November 2005) 2,371,428 132,660*
U.S. Gold Corp. 85,860 56,668*
UGL Enterprises Ltd. 100,000 29,089*
UGL Enterprises Ltd., Warrants (January 2006) (RS) 50,000 0*
X-Cal Resources Ltd. 200,000 90,997*
Yamana Gold, Inc. 25,000 52,957*
Yamana Gold, Inc., Warrants (July 2008) 12,500 16,130*
------------
10,120,461
INDEPENDENT POWER PRODUCERS 0.88%
- -------------------------------------------------------------------------------------------
Calpine Corp. 275,000 1,188,000*
INDUSTRIAL GASES 0.97%
- -------------------------------------------------------------------------------------------
Air Products & Chemicals, Inc. 25,000 1,311,250
IRON ORE 1.04%
- -------------------------------------------------------------------------------------------
Labrador Iron Ore Royalty Trust 110,000 1,415,305
LITHIUM 0.52%
- -------------------------------------------------------------------------------------------
Sterling Group Ventures, Inc. 100,000 95,000*
Sterling Group Ventures, Inc., Units (RS) 500,000 616,000*
------------
711,000
MERCHANT BANKING 0.43%
- -------------------------------------------------------------------------------------------
Endeavour Mining Capital Corp. 273,000 527,389
Endeavour Mining Capital Corp., Warrants (November 2008) 60,000 50,123*
------------
577,512
MINING EQUIPMENT & SERVICES 1.48%
- -------------------------------------------------------------------------------------------
Dynatec Corp. 1,370,000 1,410,159*
Joy Global, Inc. 20,000 598,800
------------
2,008,959
See notes to portfolios of investments and notes to financial statements.
65
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
NICKEL 0.62%
- -------------------------------------------------------------------------------------------
European Nickel plc, Units 350,000 $ 149,086*
Inco Ltd. 20,000 691,200*
------------
840,286
OIL & GAS DRILLING 0.99%
- -------------------------------------------------------------------------------------------
Nabors Industries, Inc. 15,000 678,300*
Patterson-UTI Energy, Inc. 20,000 668,200
------------
1,346,500
OIL & GAS EQUIPMENT & SERVICES 5.08%
- -------------------------------------------------------------------------------------------
CCS Income Trust 85,000 1,895,652
Lone Star Technologies, Inc. 40,000 1,102,400*
National Oilwell, Inc. 40,000 1,259,600*
Newalta Income Fund 40,000 560,901
Peak Energy Services Trust 215,000 1,355,076
Total Energy Services Ltd. 160,000 708,883*
------------
6,882,512
OIL & GAS EXPLORATION & PRODUCTION - INTEGRATED 0.82%
- -------------------------------------------------------------------------------------------
Sasol Ltd., Sponsored ADR 30,000 471,900
Yukos Oil Co., ADR 20,000 636,000
------------
1,107,900
OIL & GAS EXPLORATION & PRODUCTION - JUNIOR 11.81%
- -------------------------------------------------------------------------------------------
Aquest Energy Ltd. (RS) 200,000 347,207*
Bear Creek Energy Ltd. (RS) 110,000 428,694*
Chamaelo Energy, Inc. (RS) 65,000 216,473*
China Energy Ventures Corp. 2,352,000 1,317,120*+
Choice Resources Corp. 1,142,000 417,379*+
Choice Resources Corp. (RS) 1,000,000 347,207*+
Choice Resources Corp., Warrants (December 2004) 110,000 0*
Choice Resources Corp., Warrants (March 2006) (RS) 1,000,000 0*
Cinch Energy Corp., S/R (RS) 600,000 335,646*
Compton Petroleum Corp. 150,000 839,114*
Eastshore Energy Ltd., Class A 450,000 1,053,927*
Elgin Resources, Inc. 350,000 279,332*
Elgin Resources, Inc. (RS) 250,000 189,546*
Elgin Resources, Inc., Warrants (March 2006) (RS) 250,000 0*
Forte Resources, Inc. (RS) 130,000 285,560*
Galleon Energy, Inc., Class A 120,000 716,044*
Grove Energy Ltd. (RS) 600,000 199,821*
Grove Energy Ltd., Warrants (April 2006) (RS) 600,000 29,984*
Hawk Energy Corp. 100,000 238,681*
See notes to portfolios of investments and notes to financial statements.
66
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
OIL & GAS EXPLORATION & PRODUCTION - JUNIOR (CONT'D)
- -------------------------------------------------------------------------------------------
Hawk Energy Corp. (RS) 100,000 $ 226,747*
High Point Resources, Inc. 400,000 498,247*
Kensington Energy Ltd. 800,000 537,033*
Ketch Resources Ltd. 90,000 771,985*
Midnight Oil & Gas Ltd. (RS) 150,000 674,927*
Mustang Resources, Inc. 100,000 428,880*
Pacific Stratus Ventures Ltd. (RS) 3,000,000 807,787*+
Pan-Ocean Energy Corp., Ltd. 50,000 421,422
Rock Creek Resources Ltd. 548,400 899,888*+
StarPoint Energy Ltd. 400,000 1,267,994*
Tempest Energy Corp., Class A 200,000 738,420*
Tesoro Energy Ltd., Special Warrants (RS) 5,555,000 570,748*
TriLoch Resources, Inc., Class A (RS) 100,000 177,146*
West Energy Ltd. (RS) 571,500 745,972
------------
16,008,931
OIL & GAS EXPLORATION & PRODUCTION - SENIOR 3.80%
- -------------------------------------------------------------------------------------------
Chesapeake Energy Corp. 100,000 1,472,000
Novy Neft II Ltd. 60,000 645,000
Penn West Petroleum Ltd. 10,000 463,191
Progress Energy Ltd. 115,000 1,274,633*
Talisman Energy, Inc. 60,000 1,302,305
------------
5,157,129
OIL & GAS PIPELINES 0.88%
- -------------------------------------------------------------------------------------------
The Williams Companies, Inc. 100,000 1,190,000
OIL & GAS ROYALTY TRUSTS 11.08%
- -------------------------------------------------------------------------------------------
Acclaim Energy Trust 130,000 1,255,687*
Bonavista Energy Trust 180,000 3,093,309
Enerplus Resources Fund 90,000 2,561,395
Enerplus Resources Fund, S/R 30,000 850,302*
Focus Energy Trust 230,000 2,659,059
San Juan Basin Royalty Trust 90,000 2,192,400
Vermillion Energy Trust 180,000 2,409,935
------------
15,022,087
PLATINUM GROUP METALS 3.84%
- -------------------------------------------------------------------------------------------
African Minerals, Special Warrants (RS) 12,500 75,000*
Anooraq Resources Corp. 500,000 839,114*
Anooraq Resources Corp., Warrants (March 2006) 175,000 0*
Aquarius Platinum Ltd. (RS) 6,862 21,828
Osmium Holdings S.A. (RS) 104 10,400
See notes to portfolios of investments and notes to financial statements.
67
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
PLATINUM GROUP METALS (CONT'D)
- -------------------------------------------------------------------------------------------
South Atlantic Ventures Ltd. 215,000 $ 1,242,821*
South Atlantic Ventures Ltd., Warrants (December 2004) 25,000 102,558*
Southern African Resources plc 6,000,000 2,854,845*
SouthernEra Resources Ltd., Warrants (November 2008) 100,000 58,924*
------------
5,205,490
POLYMETALLIC 0.23%
- -------------------------------------------------------------------------------------------
Adastra Minerals, Inc. 100,000 108,152*
Altius Minerals Corp., Warrants (July 2005) 100,000 96,964*
Farallon Resources Ltd. 200,000 102,931*
------------
308,047
POTASH & AGRICULTURAL FERTILIZERS 0.41%
- -------------------------------------------------------------------------------------------
Spur Ventures, Inc. 500,000 559,409*
PROPANE DISTRIBUTION 1.43%
- -------------------------------------------------------------------------------------------
Superior Plus Income Fund 100,000 1,935,556
PULP & PAPER 2.41%
- -------------------------------------------------------------------------------------------
Aracruz Celulose S.A., ADR 30,000 979,800
Sappi Ltd., Sponsored ADR 60,000 921,000
Smurfit-Stone Container Corp. 30,000 598,500*
Tembec, Inc. 100,000 771,985*
------------
3,271,285
SHIPPING & CONTAINERS 0.52%
- -------------------------------------------------------------------------------------------
Golar LNG Ltd. 45,000 705,150*
SILVER MINING 0.13%
- -------------------------------------------------------------------------------------------
Pan American Silver Corp., Warrants (February 2008) 27,000 178,228*
SPECIALTY CHEMICALS 2.14%
- -------------------------------------------------------------------------------------------
Acetex Corp. 100,000 454,986*
Eastman Chemical Co. 20,000 924,600
Hercules, Inc. 125,000 1,523,750*
------------
2,903,336
STEEL 1.39%
- -------------------------------------------------------------------------------------------
Algoma Steel, Inc. 210,000 1,722,981*
Russel Metals, Inc. 19,000 155,889
------------
1,878,870
See notes to portfolios of investments and notes to financial statements.
68
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
ZINC 1.93%
- -------------------------------------------------------------------------------------------
Breakwater Resources Ltd. 800,000 $ 244,648*
Breakwater Resources Ltd. (RS) 4,000,000 1,223,242*
Breakwater Resources Ltd., Warrants (January 2009) 100,000 18,355*
Breakwater Resources Ltd., Warrants (January 2009) (RS) 2,000,000 365,400*
Noranda Income Fund 90,000 758,559
------------
2,610,204
- -------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS AND WARRANTS 121,203,617
- -------------------------------------------------------------------------------------------
(cost $108,742,901)
PURCHASED OPTIONS 0.16% CONTRACTS
COPPER 0.11%
- -------------------------------------------------------------------------------------------
Phelps Dodge Corp., Strike Price 95, Call, Expiration
Jan. 2006 (premium $240,300) 200 157,000
GOLD MINING 0.05%
- -------------------------------------------------------------------------------------------
Philadelphia Stock Exchange Gold & Silver Index, Strike
Price 100, Call, Expiration July 2004 (premium $26,780) 260 2,600
Placer Dome, Inc., Strike Price 25, Call, Expiration
Jan. 2006 (premium $60,568) 496 60,760
------------
63,360
- -------------------------------------------------------------------------------------------
TOTAL PURCHASED OPTIONS 220,360
- -------------------------------------------------------------------------------------------
(cost $327,648)
RIGHTS 0.00% SHARES
AGRICULTURAL CHEMICALS 0.00%
- -------------------------------------------------------------------------------------------
IMC Global, Inc., Rights (June 2009) 3,800 0
(cost $0)
PRINCIPAL
CONVERTIBLE DEBENTURES 0.11% AMOUNT
GOLD MINING 0.07%
- -------------------------------------------------------------------------------------------
Bolivar Gold Corp. $ 250,000 93,561
OIL & GAS EXPLORATION & PRODUCTION - JUNIOR 0.04%
- -------------------------------------------------------------------------------------------
Catalina Energy Corp. 100,000 59,670
- -------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE DEBENTURES 153,231
- -------------------------------------------------------------------------------------------
(cost $255,608)
- -------------------------------------------------------------------------------------------
TOTAL SECURITIES 121,577,208
- -------------------------------------------------------------------------------------------
See notes to portfolios of investments and notes to financial statements.
69
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
PRINCIPAL
REPURCHASE AGREEMENT 8.72% AMOUNT VALUE
Joint Tri-Party Repurchase Agreement, UBS Financial
Services, Inc., 06/30/04, 1.29%, due 07/01/04,
repurchase price $11,819,287, collateralized by
U.S. Treasury securities held in a joint tri-party
repurchase account (cost $11,818,863) $11,818,863 $ 11,818,863
- -------------------------------------------------------------------------------------------
TOTAL INVESTMENTS 98.39% 133,396,071
- -------------------------------------------------------------------------------------------
(cost $121,145,020)
Other assets and liabilities, net 1.61% 2,177,972
------------
NET ASSETS 100% $135,574,043
------------
See notes to portfolios of investments and notes to financial statements.
70
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS 87.06% SHARES VALUE
CHEMICALS & ALLIED PRODUCTS 0.79%
- -----------------------------------------------------------------------------------------
Acetex Corp. 430,000 $ 1,956,441*
DATA PROCESSING & SOFTWARE 0.12%
- -----------------------------------------------------------------------------------------
Stockgroup Information Systems, Inc. 1,000,000 310,000*+
DIAMOND MINING & EXPLORATION 1.95%
- -----------------------------------------------------------------------------------------
Aber Diamond Corp. 75,000 2,218,058*
Diagem International Resource Corp. 1,325,000 222,365*
Diagem International Resource Corp., Warrants (July 2004) 1,500,000 0*
Diamond Fields International Ltd. 1,110,000 571,269*
Diamond Fields International Ltd., Warrants
(November 2006) 512,000 0*
Diamonds North Resources Ltd. 1,800,000 1,275,453*+
Diamonds North Resources Ltd., Warrants (March 2005) 300,000 33,565*
JML Resources Ltd. 73,400 8,212*
Metalex Ventures Ltd. 70,000 72,052*
Shore Gold, Inc. 175,000 174,909*
Superior Diamonds, Inc. 60,000 12,083*
Tahera Diamond Corp. 800,000 220,780*
------------
4,808,746
DIAMONDS & GOLD RETAIL 0.34%
- -----------------------------------------------------------------------------------------
Tiffany & Co. 22,500 829,125
FINANCIAL SERVICES 0.83%
- -----------------------------------------------------------------------------------------
GMP Capital Corp. 85,000 1,090,475
NETeller plc 336,800 958,459*
------------
2,048,934
GOLD/MINERAL EXPLORATION & DEVELOPMENT 20.67%
- -----------------------------------------------------------------------------------------
Alamos Gold, Inc. 300,000 438,577*
American Gold Capital Corp. 232,500 166,480*
Amerix Precious Metals Corp. 425,000 79,250*
Amerix Precious Metals Corp., Warrants (December 2005) 212,500 0*
AMT International Mining Corp. 1,000,000 12,680*
Apac Minerals, Inc. 1,200,000 492,280*
Apac Minerals, Inc., Warrants (August 2004) 300,000 11,188*
Atikwa Minerals Corp. 1,333,333 119,341*+
Atikwa Minerals Corp., Warrants (July 2005) 1,333,333 0*
BacTech Enviromet Corp. 100,000 37,294*
Bendigo Mining NL 200,000 122,355*
Bolivar Gold Corp. 6,444,000 6,873,215*+
Bolivar Gold Corp., Warrants (March 2008) 800,000 519,132*
Bolivar Gold Corp., Warrants (August 2008) 1,410,000 625,755*
See notes to portfolios of investments and notes to financial statements.
71
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
GOLD/MINERAL EXPLORATION & DEVELOPMENT (CONT'D)
- -----------------------------------------------------------------------------------------
Caledon Resources Corp. plc 5,700,000 $ 594,080*
Candente Resource Corp. 190,000 89,282*
Candente Resource Corp., Warrants (June 2005) 95,000 0*
Central African Gold plc 4,000,000 634,410*
Chesapeake Gold Corp. 240,000 775,117*
Chilean Gold Ltd. (RS) 500,000 0*
Continental Precious Minerals, Inc. 200,000 28,343*
Corona Gold Ltd. 812,500 5,648*
Dumont Nickel, Inc. 1,500,000 262,922*
Dumont Nickel, Inc., Warrants (October 2005) 750,000 0*
Dynatec Corp. 1,300,000 1,338,107*
ECU Silver Mining, Inc. 900,000 214,813*
Erdene Gold, Inc. 400,000 238,681*
European Minerals Corp. 1,045,000 574,750*
European Minerals Corp., Warrants (December 2008) 400,000 94,000*
Farallon Resources Ltd. 2,090,000 1,075,632*
First Point Minerals Corp. 1,020,000 144,551*
Gabriel Resources Ltd. 350,000 336,764*
Gallery Gold Ltd. 900,000 168,934*
Glencairn Gold Corp. 2,400,000 1,074,066*
Glencairn Gold Corp. (RS) 250,000 111,882*
Glencairn Gold Corp., Warrants (February 2005) 600,000 0*
Glencairn Gold Corp., Warrants (November 2008) 667,500 114,511*
Glencairn Gold Corp., Warrants (November 2008) (RS) 125,000 21,444*
Gold Reserve, Inc. 200,000 611,621*
Gold Summit Corp. 200,000 29,835*
Gold Summit Corp., Warrants (January 2005) 100,000 0*
Great Basin Gold Ltd. 1,330,000 1,736,033*
Guinor Gold Corp. 1,500,000 1,185,948*
Herald Resources Ltd. 1,000,000 472,736*
High River Gold Mines Ltd. 1,000,000 1,215,783*
Inca Pacific Resources, Inc. 1,065,000 95,323*
Inca Pacific Resources, Inc., Warrants (November 2006) 900,000 0*
Ivanhoe Mines Ltd. 1,058,300 5,683,393*
Ivanhoe Mines Ltd., Warrants (December 2005) 36,300 27,075*
Laurion Gold, Inc. 10,000 783*
Laurion Gold, Inc., Special Warrants 4,000,000 313,269*
MAG Silver Corp. 25,000 22,190*
Medoro Resources Ltd. 530,000 94,876*
Meridian Gold, Inc. 50,000 648,500*
Metallic Ventures Gold, Inc. 100,000 372,940*
Metallic Ventures Gold, Inc. (RS) 100,000 372,940*
Metallic Ventures Gold, Inc., Warrants (March 2009)(RS) 50,000 21,630*
Metallica Resources, Inc. 964,000 920,355*
Metallica Resources, Inc., Warrants (December 2008) 495,000 129,224*
Mexgold Resources, Inc. 400,000 880,137*
See notes to portfolios of investments and notes to financial statements.
72
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
GOLD/MINERAL EXPLORATION & DEVELOPMENT (CONT'D)
- -----------------------------------------------------------------------------------------
Mexgold Resources, Inc., Warrants (February 2006) 200,000 $ 67,129*
Minefinders Corporation Ltd. 200,000 1,350,041*
Moss Lake Gold Mines Ltd. 2,250,000 184,605*+
Nevada Pacific Gold Ltd. 2,500,000 1,957,932*+
Nevada Pacific Gold Ltd., Warrants (September 2004) 1,135,135 508,004*
New Sleeper Gold Corp. 430,000 288,655*
New Sleeper Gold Corp., Warrants (December 2008) 150,000 0*
Odyssey Resources Ltd. 1,000,000 96,964*
Odyssey Resources Ltd., Warrants (July 2004) 1,000,000 0*
Olympus Pacific Minerals, Inc. 625,000 186,470*
Olympus Pacific Minerals, Inc., Warrants (October 2005) 500,000 0*
Orezone Resources, Inc. 1,010,000 813,605*
Pacific Rim Mining Corp. 3,935,000 2,635,719*
Planet Exploration, Inc. 300,000 167,823*
Planet Exploration, Inc., Warrants (December 2005) 300,000 0*
Platte River Gold, Special Warrants (RS) 595,000 1,190,000*
QGX Ltd. 325,000 698,143*
Radius Explorations Ltd. 600,000 496,755*
Red Back Mining, Inc. 213,523 294,635*
Red Back Mining, Inc., Special Warrants (RS) 200,000 262,251*
Ridge Mining plc 930,000 952,431*
Rio Narcea Gold Mines Ltd. 500,000 980,831*
Rio Narcea Gold Mines Ltd., Warrants (September 2008) 545,000 272,358*
Rockwell Ventures, Inc. 1,075,000 66,150*
Romarco Minerals, Inc. 2,130,000 500,448*+
Rubicon Minerals Corp. 200,000 183,486*
Rubicon Minerals Corp., Warrants (February 2005) 100,000 0*
SKN Resources Ltd. 8,500 10,271*
Solitario Resources Corp. 230,000 308,794*
Southwestern Resources Corp. 20,000 213,321*
St. Andrew Goldfields Ltd. 3,582,877 547,841*
St. Andrew Goldfields Ltd., Warrants (December 2004) 1,000,000 0*
Stingray Resource, Inc. 300,000 192,437*+
Stingray Resource, Inc., Warrants (December 2005) 150,000 0*
Stratagold Corp. 625,000 214,440*
Stratagold Corp., Warrants (November 2005) 312,500 0*
Strongbow Exploration, Inc. 794,075 414,599*
Sydney Resource Corp. (RS) 600,000 112,665*
Sydney Resource Corp., Warrants (April 2005) (RS) 300,000 0*
TLC Ventures Corp. 10,000 13,426*
TLC Ventures Corp. (RS) 500,000 637,727*
TLC Ventures Corp., Warrants (May 2005) (RS) 250,000 53,144*
TVI Pacific, Inc. 2,371,428 274,164*
TVI Pacific, Inc., Warrants (November 2005) 2,371,428 132,660*
U.S. Gold Corp. 411,740 271,748*
Verena Minerals Corp. 1,000,000 89,505*
See notes to portfolios of investments and notes to financial statements.
73
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
GOLD/MINERAL EXPLORATION & DEVELOPMENT (CONT'D)
- -----------------------------------------------------------------------------------------
Verena Minerals Corp., Warrants (May 2005) 500,000 $ 0*
Western Exploration & Development Ltd., 144A, Special
Warrants (RS) 600,000 30,000*
Western Prospector Group Ltd. 900,000 181,249*+
X-Cal Resources Ltd. 2,051,000 933,177*
------------
51,015,678
INTERMEDIATE & JUNIOR GOLD PRODUCERS 36.36%
- -----------------------------------------------------------------------------------------
Agnico-Eagle Mines Ltd. 50,000 660,500
Agnico-Eagle Mines Ltd., Warrants (November 2007) 592,500 1,659,000*
Apollo Gold Corp. 3,876,625 5,291,433*+
Apollo Gold Corp., Warrants (December 2006) 333,500 0*
Bema Gold Corp. 2,710,400 7,358,735*
Bema Gold Corp., Warrants (October 2007) 3,013,675 5,282,417*
Cambior, Inc. 615,500 1,682,234*
Cambior, Inc., Warrants (August 2008) 91,575 104,163*
Campbell Resources, Inc. 50,000 24,241*
Compania de Minas Buenaventura S.A., ADR 58,000 1,281,800
Eldorado Gold Corp. 600,000 1,552,920*
Emperor Mines Ltd. 700,000 394,178*
Frontier Pacific Mining Corp. 1,000,000 320,728*
Frontier Pacific Mining Corp. (RS) 200,000 60,938*
Frontier Pacific Mining Corp., S/R (RS) 800,000 244,052*
Frontier Pacific Mining Corp., Warrants (April 2006) (RS) 200,000 0*
Glamis Gold Ltd. 300,000 5,258,895*
Goldcorp, Inc. 122,500 1,429,577
Goldcorp, Inc., Warrants (April 2007) 131,800 741,375*
Goldcorp, Inc., Warrants (May 2009) 177,000 2,058,861*
Golden Star Resources Ltd., Warrants (July 2004) 150,000 436,339*
Golden Star Resources Ltd., Warrants (February 2007) 7,500 16,894*
Hecla Mining Co. 200,000 1,140,000*
IAMGOLD Corp. 1,245,000 6,927,481
Kinross Gold Corp., Warrants (December 2007) 2,717,000 1,408,455*
Miramar Mining Corp. 650,000 746,625*
Northern Orion Resources, Inc. 6,225,800 14,256,161*+
Northern Orion Resources, Inc., Warrants (March 2005) 2,000,000 264,041*
Northern Orion Resources, Inc., Warrants (May 2008) 2,258,950 2,527,355*
Northgate Exploration Ltd. 695,000 1,078,243*
Northgate Exploration Ltd., Warrants (December 2006) 3,433,000 1,168,203*
Queenstake Resources Ltd. 2,550,000 1,084,135*
Randgold Resources Ltd., ADR 265,000 2,337,300*
Resolute Mining Ltd. 1,000,000 862,048*
Resolute Mining Ltd., Warrants (June 2005) 278,333 89,009*
Sino Gold Ltd. 530,000 799,550*
Troy Resources NL 208,800 397,732
Wheaton River Minerals Ltd. 3,595,720 10,030,576*
See notes to portfolios of investments and notes to financial statements.
74
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
INTERMEDIATE & JUNIOR GOLD PRODUCERS (CONT'D)
- -----------------------------------------------------------------------------------------
Wheaton River Minerals Ltd., Warrants (March 2007) 1,627,350 $ 2,597,545*
Wheaton River Minerals Ltd., Warrants (May 2007) 2,112,425 3,293,032*
Wheaton River Minerals Ltd., Warrants (August 2008) 1,396,250 1,551,736*
Yamana Gold, Inc. 505,000 1,069,740*
Yamana Gold, Inc., Warrants (July 2008) 197,000 254,203*
------------
89,742,450
INVESTMENT TRUST 0.03%
- -----------------------------------------------------------------------------------------
Gold Bullion Ltd. 2,000 79,851*
MERCHANT BANKING 1.23%
- -----------------------------------------------------------------------------------------
Endeavour Mining Capital Corp. 1,434,500 2,771,205+
Endeavour Mining Capital Corp., Warrants (November 2008) 308,000 257,298*
------------
3,028,503
METAL & MINERAL MINING 15.41%
- -----------------------------------------------------------------------------------------
African Minerals, Special Warrants (RS) 112,500 675,000*
AfriOre Ltd. 1,000,000 313,269*
AfriOre Ltd., Warrants (March 2005) 500,000 0*
Algoma Steel, Inc. 110,000 902,514*
Anooraq Resources Corp. 2,277,600 3,822,332*+
Anooraq Resources Corp., Warrants (March 2006) 325,000 0*
Amarc Resources Ltd. 454,545 179,689*
Amarc Resources Ltd., Warrants (January 2005) 454,545 0*
Amerigo Resources Ltd. 760,000 1,037,369*+
Amerigo Resources Ltd., Warrants (August 2004) 500,000 607,891*
Amerigo Resources Ltd., Warrants (June 2005) 537,500 463,051*
Aquarius Platinum Ltd. 50,000 193,961
Aquarius Platinum Ltd. (RS) 60,045 191,001
Arizona Star Resource Corp. 111,000 319,579*
Breakwater Resources Ltd. 1,325,000 405,199*
Breakwater Resources Ltd., Warrants (January 2009) 815,000 148,933*
Corriente Resources, Inc. 425,000 1,061,945*
European Nickel plc, Units 400,000 170,384*
Elgin Resources, Inc. 660,000 526,740*
Elgin Resources, Inc. (RS) 500,000 379,093*
Elgin Resources, Inc., Warrants (March 2006) (RS) 500,000 0*
FNX Mining Co., Inc. 440,000 2,067,577*
International Uranium Corp. 490,000 986,798*
Jiangxi Copper Co., Ltd. 4,882,000 2,206,359
Latin America Copper plc 3,000,000 271,890+
North American Tungsten Corp., Ltd. 900,000 77,198*
Northern Dynasty Minerals Ltd. 400,000 1,581,264*
Osmium Holdings S.A. (RS) 891 89,100
See notes to portfolios of investments and notes to financial statements.
75
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
METAL & MINERAL MINING (CONT'D)
- -----------------------------------------------------------------------------------------
Pacific North West Capital Corp. 993,966 $ 444,827*
Pacific North West Capital Corp. (RS) 375,000 159,432*
Pacific North West Capital Corp., Warrants (August 2004) 333,333 0*
Pacific North West Capital Corp., Warrants (June 2005) 150,000 0*
Pacific North West Capital Corp., Warrants (October
2005) (RS) 187,500 0*
Pan American Silver Corp., Warrants (February 2008) 256,650 1,694,154*
Perilya Ltd. 100,000 60,482*
Peru Copper Corp., Convertible Shares (RS) 53,500 74,900*
Peru Copper Corp., Units (RS) 142,500 199,500*
South Atlantic Ventures Ltd. 1,075,000 6,214,105*+
South Atlantic Ventures Ltd., Warrants (December 2004) 75,000 307,675*
Southern African Resources plc 15,910,000 7,570,097*+
SouthernEra Resources Ltd., Warrants (November 2006) 100,000 58,924*
Taseko Mines Ltd. 1,800,000 1,906,467*
Taseko Mines Ltd. (RS) 500,000 503,095*
Taseko Mines Ltd., Warrants (February 2005) (RS) 500,000 0*
Toledo Copper Corp. plc 1,000,000 40,784*
Trend Mining Co. 100,000 28,000*
UGL Enterprises Ltd. 200,000 58,179*+
UGL Enterprises Ltd., Warrants (January 2006) (RS) 100,000 0*
Zimasco Consolidated Enterprises Ltd. (RS) 192,500 42,350
------------
38,041,107
OIL & GAS EXTRACTION 1.33%
- -----------------------------------------------------------------------------------------
BlackRock Ventures, Inc. 305,000 1,715,298*
Choice Resources Corp. 614,500 224,588*
Choice Resources Corp., Warrants (December 2004) 275,000 0*
China Energy Ventures Corp. 90,050 50,428*
China Energy Ventures Corp. (RS) 2,000,000 985,600*
Pacific Stratus Ventures Ltd. (RS) 1,125,000 302,920*
------------
3,278,834
SENIOR GOLD PRODUCERS 8.00%
- -----------------------------------------------------------------------------------------
AngloGold Ashanti Ltd., ADR 137,025 4,406,724
Barrick Gold Corp. 50,000 987,500
Freeport-McMoRan Copper & Gold, Inc., Class B 35,000 1,160,250
Newmont Mining Corp. 120,000 4,651,200
Placer Dome, Inc. 514,000 8,552,960
------------
19,758,634
- -----------------------------------------------------------------------------------------
TOTAL COMMON STOCKS AND WARRANTS 214,898,303
- -----------------------------------------------------------------------------------------
(cost $176,775,826)
See notes to portfolios of investments and notes to financial statements.
76
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
PRINCIPAL
CONVERTIBLE DEBENTURE 0.11% AMOUNT VALUE
GOLD/MINERAL EXPLORATION & DEVELOPMENT 0.11%
- -----------------------------------------------------------------------------------------
Bolivar Gold Corp. $ 750,000 $ 280,684
(cost $575,197)
PREFERRED STOCK 0.44% SHARES
SENIOR GOLD PRODUCERS 0.44%
- -----------------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Depositary
Shares representing 0.05 shares of Gold-Denominated
Preferred Stock (cost $953,085) 26,500 1,099,750
PURCHASED OPTIONS 0.65% CONTRACTS
SENIOR GOLD PRODUCERS 0.65%
- -----------------------------------------------------------------------------------------
Barrick Gold Corp., Strike Price 25, Call, Expiration
Jan. 2005 (premium $339,592) 2,600 130,000
Barrick Gold Corp., Strike Price 30, Call, Expiration
Jan. 2006 (premium $385,500) 2,250 225,000
Philadelphia Stock Exchange Gold & Silver Index,
Strike Price 100, Call, Expiration July 2004
(premium $182,060) 1,920 19,200
Placer Dome, Inc., Strike Price 15, Call, Expiration
Jan. 2005 (premium $539,779) 3,350 938,000
Placer Dome, Inc., Strike Price 25, Call, Expiration
Jan. 2006 (premium $280,129) 2,294 281,015
------------
1,593,215
- -----------------------------------------------------------------------------------------
TOTAL PURCHASED OPTIONS 1,593,215
- -----------------------------------------------------------------------------------------
(cost $1,727,060)
- -----------------------------------------------------------------------------------------
TOTAL SECURITIES 217,871,952
- -----------------------------------------------------------------------------------------
PRINCIPAL
REPURCHASE AGREEMENT 5.41% AMOUNT
Joint Tri-Party Repurchase Agreement, UBS Financial
Services, Inc., 06/30/04, 1.29%, due 07/01/04,
repurchase price $13,363,865, collateralized by
U.S. Treasury securities held in a joint tri-party
repurchase account (cost $13,363,386) $13,363,386 13,363,386
- -----------------------------------------------------------------------------------------
TOTAL INVESTMENTS 93.67% 231,235,338
- -----------------------------------------------------------------------------------------
(cost $193,394,554)
Other assets and liabilities, net 6.33% 15,616,164
------------
NET ASSETS 100% $246,851,502
------------
See notes to portfolios of investments and notes to financial statements.
77
GOLD SHARES FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS 84.57% SHARES VALUE
DIAMOND MINING & EXPLORATION 1.23%
- -----------------------------------------------------------------------------------------
Aber Diamond Corp. 22,000 $ 650,630*
Diamond Fields International Ltd. 326,000 167,778*
Diamond Fields International Ltd., Warrants (November 2006) 176,000 0*
-----------
818,408
DIAMONDS & GOLD RETAIL 0.41%
- -----------------------------------------------------------------------------------------
Tiffany & Co. 7,500 276,375
FINANCIAL SERVICES 0.90%
- -----------------------------------------------------------------------------------------
GMP Capital Corp. 10,000 128,291
NETeller plc 165,200 470,123*
-----------
598,414
GOLD MINING 73.56%
- -----------------------------------------------------------------------------------------
Agnico-Eagle Mines Ltd. 25,000 330,250
Agnico-Eagle Mines Ltd., Warrants (November 2007) 217,500 609,000*
AngloGold Ashanti Ltd., ADR 132,675 4,266,827
Apollo Gold Corp. 1,762,500 2,405,740*+
Apollo Gold Corp., Warrants (December 2006) 166,500 0*
Barrick Gold Corp. 20,000 395,000
Bema Gold Corp. 1,068,800 2,901,792*
Bema Gold Corp., Warrants (October 2007) 1,598,325 2,801,569*
Cambior, Inc. 308,400 842,861*
Cambior, Inc., Warrants (August 2008) 180,525 205,341*
Compania de Minas Buenaventura S.A., ADR 18,400 406,640
Durban Roodepoort Deep Ltd., ADR 100,000 254,000*
Glamis Gold Ltd. 100,000 1,752,968*
Glencairn Gold Corp. 800,000 358,022*
Glencairn Gold Corp. (RS) 100,000 44,753*
Glencairn Gold Corp., Warrants (February 2005) 250,000 0*
Glencairn Gold Corp., Warrants (November 2008) 172,500 29,592*
Glencairn Gold Corp., Warrants (November 2008) (RS) 50,000 8,578*
Gold Fields Ltd., ADR 150,000 1,576,500
Goldcorp, Inc. 107,500 1,254,527
Goldcorp, Inc., Warrants (April 2007) 80,500 452,813*
Goldcorp, Inc., Warrants (May 2009) 108,000 1,256,254*
Golden Star Resources Ltd., Warrants (February 2007) 2,500 5,631*
Guinor Gold Corp. 750,000 592,974*
Harmony Gold Mining Co. Ltd., ADR 25,000 264,750
Hecla Mining Co. 50,000 285,000*
IAMGOLD Corp. 405,000 2,253,510
Ivanhoe Mines Ltd. 352,500 1,893,041*
Ivanhoe Mines Ltd., Warrants (December 2005) 11,200 8,354*
Kinross Gold Corp., Warrants (December 2007) 1,418,000 735,071*
See notes to portfolios of investments and notes to financial statements.
78
GOLD SHARES FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
COMMON STOCKS AND WARRANTS SHARES VALUE
GOLD MINING (CONT'D)
- -----------------------------------------------------------------------------------------
Meridian Gold, Inc. 15,000 $ 194,550*
Mexgold Resources, Inc. 100,000 220,034*
Mexgold Resources, Inc., Warrants (February 2006) 50,000 16,782*
Newmont Mining Corp. 35,000 1,356,600
Northern Orion Resources, Inc. 1,850,500 4,237,372*
Northern Orion Resources, Inc., Warrants (May 2008) 871,250 974,771*
Northgate Exploration Ltd. 305,000 473,186*
Northgate Exploration Ltd., Warrants (December 2006) 1,229,500 414,030*
Pacific Rim Mining Corp. 1,025,000 686,548*
Placer Dome, Inc. 205,000 3,411,185
Queenstake Resources Ltd. 700,000 297,606*
Randgold Resources Ltd., ADR 125,000 1,102,500*
Rio Narcea Gold Mines Ltd., Warrants (September 2008) 152,500 76,210*
Sino Gold Ltd. 150,000 226,288*
Wheaton River Minerals Ltd. 775,180 2,162,432*
Wheaton River Minerals Ltd., Warrants (March 2007) 1,767,500 2,821,250*
Wheaton River Minerals Ltd., Warrants (May 2007) 791,325 1,233,586*
Wheaton River Minerals Ltd., Warrants (August 2008) 487,550 541,843*
Yamana Gold, Inc. 150,000 317,745*
Yamana Gold, Inc., Warrants (July 2008) 104,500 134,845*
-----------
49,090,721
INVESTMENT TRUST 0.06%
- -----------------------------------------------------------------------------------------
Gold Bullion Ltd. 1,000 39,925*
MERCHANT BANKING 1.81%
- -----------------------------------------------------------------------------------------
Endeavour Mining Capital Corp. 571,500 1,104,039
Endeavour Mining Capital Corp., Warrants (November 2008) 122,500 102,335*
-----------
1,206,374
METAL & MINERAL MINING 6.60%
- -----------------------------------------------------------------------------------------
Algoma Steel, Inc. 10,000 82,047*
Breakwater Resources Ltd. 275,000 84,098*
Breakwater Resources Ltd., Warrants (January 2009) 655,000 119,695*
FNX Mining Co., Inc. 235,000 1,104,274*
Impala Platinum Holdings Ltd. 7,500 567,479
Inco Ltd. 12,500 432,000*
Pan American Silver Corp., Warrants (February 2008) 116,650 770,010*
South Atlantic Ventures Ltd. 180,000 1,040,501*
South Atlantic Ventures Ltd., Warrants (December 2004) 50,000 205,117*
-----------
4,405,221
- -----------------------------------------------------------------------------------------
TOTAL COMMON STOCKS AND WARRANTS 56,435,438
- -----------------------------------------------------------------------------------------
(cost $44,848,881)
See notes to portfolios of investments and notes to financial statements.
79
GOLD SHARES FUND
PORTFOLIO OF INVESTMENTS June 30, 2004
PREFERRED STOCK 0.78% SHARES VALUE
GOLD MINING 0.78%
- -----------------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Depositary
Shares representing 0.05 shares of Gold-Denominated
Preferred Stock (cost $449,618) 12,500 $ 518,750
PURCHASED OPTIONS 0.97% CONTRACTS
GOLD MINING 0.97%
- -----------------------------------------------------------------------------------------
Barrick Gold Corp., Strike Price 25, Call, Expiration
Jan. 2005 (premium $182,857) 1,400 70,000
Barrick Gold Corp., Strike Price 30, Call, Expiration
Jan. 2006 (premium $133,500) 750 75,000
Philadelphia Stock Exchange Gold & Silver Index,
Strike Price 100, Call, Expiration July 2004
(premium $51,560) 520 5,200
Placer Dome, Inc., Strike Price 15, Call, Expiration
Jan. 2005 (premium $248,112) 1,650 462,000
Placer Dome, Inc., Strike Price 25, Call, Expiration
Jan. 2006 (premium $37,855) 310 37,975
-----------
650,175
- -----------------------------------------------------------------------------------------
TOTAL PURCHASED OPTIONS 650,175
- -----------------------------------------------------------------------------------------
(cost $653,884)
- -----------------------------------------------------------------------------------------
TOTAL SECURITIES 57,604,363
- -----------------------------------------------------------------------------------------
PRINCIPAL
REPURCHASE AGREEMENT 7.88% AMOUNT
Joint Tri-Party Repurchase Agreement, UBS Financial
Services, Inc., 06/30/04, 1.29%, due 07/01/04,
repurchase price $5,258,912, collateralized by
U.S. Treasury securities held in a joint tri-party
repurchase account (cost $5,258,724) $ 5,258,724 5,258,724
- -----------------------------------------------------------------------------------------
TOTAL INVESTMENTS 94.20% 62,863,087
- -----------------------------------------------------------------------------------------
(cost $51,211,107)
Other assets and liabilities, net 5.80% 3,868,663
-----------
NET ASSETS 100% $66,731,750
-----------
See notes to portfolios of investments and notes to financial statements.
80
NOTES TO PORTFOLIOS OF INVESTMENTS June 30, 2004
LEGEND
* Non-income producing security GO General Obligation Bond
+ Affiliated company (see following) RS Restricted Security (see following)
ADR American Depositary Receipt SPDR Standard & Poor's Depositary Receipt
GDR Global Depositary Receipt S/R Subscription Receipt
ZCB Zero Coupon Bond
GENERAL
The yields reflect the effective yield from the date of purchase.
Variable Rate Notes have periodic reset features, which effectively shorten the
maturity dates and reset the interest rates as tied to various interest-bearing
instruments. Rates shown are current rates at June 30, 2004.
Securities with a 144A designation are exempt from registration under Rule 144A
of the Securities Act of 1933.
JOINT TRI-PARTY REPURCHASE AGREEMENTS (SEE ALSO NOTE 1 TO
FINANCIAL STATEMENTS)
The terms of the joint tri-party repurchase agreements and the securities held
as collateral at June 30, 2004 were:
Bear Sterns repurchase agreement, 06/30/04, 1.25%, due 07/01/04: Total principal
amount: $20,000,000; Total repurchase price: $20,000,694 Collateral:
$20,465,000 U.S. Treasury Bill, 0.0%, 09/16/04
(total collateral market value, including accrued interest, of
$20,408,312)
Credit Suisse First Boston repurchase agreement, 06/30/04, 1.25%, due 07/01/04:
Total principal amount: $20,000,000; Total repurchase price: $20,000,694
Collateral:
$16,075,000 U.S. Treasury Bond, 14.0%, 11/15/11
(total collateral market value, including accrued interest, of
$20,400,140)
UBS Financial Services, Inc. repurchase agreement, 06/30/04, 1.29%,
due 07/01/04:
Total principal amount: $70,233,362; Total repurchase price: $70,235,878
Collateral:
$39,192,000 U.S. Treasury Bonds, interest rate range 5.375% -14.00%,
maturity date range 11/15/04 - 02/15/31
$25,814,000 U.S. Treasury Notes, interest rate range 1.625% - 7.875%,
maturity date range 08/15/04 - 05/15/14
(total collateral market value, including accrued interest,
of $71,639,902)
Other mutual funds managed by U.S. Global Investors, Inc. participate in the
tri-party joint repurchase agreements. Each owns an undivided interest in
the accounts.
81
NOTES TO PORTFOLIOS OF INVESTMENTS June 30, 2004
AFFILIATED COMPANIES - INDICATED IN PORTFOLIO OF INVESTMENTS AS "+"
The Investment Company Act of 1940 defines affiliates as companies in which the
Fund owns at least 5% of the outstanding voting securities. The following is a
summary of transactions with each affiliated company during the year ended June
30, 2004.
SHARES OF AFFILIATED COMPANIES
JUNE 30, 2003 ADDITIONS REDUCTIONS JUNE 30, 2004
CHINA REGION OPPORTUNITY FUND
- -----------------------------------------------------------------------------------------------------
Asia Broadband, Inc. 1,500,000 -- (424,500) 1,075,500(a)
Capital Alliance Group, Inc. 1,200,000 873,332 (400,000) 1,673,332
Lingo Media, Inc. 1,056,800 -- (156,800) 900,000(a)
At June 30, 2004, the value of investments in affiliated companies was $698,938,
representing 1.99% of net assets, and the total cost was $459,511. Net realized
gains on transactions were $128,884, and there was no income earned for the
period.
SHARES OF AFFILIATED COMPANIES
JUNE 30, 2003 ADDITIONS REDUCTIONS JUNE 30, 2004
GLOBAL RESOURCES FUND
- -----------------------------------------------------------------------------------------------------
Adobe Ventures, Inc. -- 3,200,000 -- 3,200,000
China Broadband Corp. -- 2,294,800 (2,294,800) --(a)(b)
China Energy Ventures Corp. -- 2,352,000 -- 2,352,000(a)(b)
Choice Resources Corp. -- 2,142,000 -- 2,142,000
Pacific Stratus Ventures -- 3,000,000 -- 3,000,000
Rock Creek Resources Ltd. -- 948,400 (400,000) 548,400
At June 30, 2004, the value of investments in affiliated companies was
$4,097,327, representing 3.02% of net assets, and the total cost was $4,994,490.
There was no net realized gains/losses on transactions and there was no income
earned for the period.
SHARES OF AFFILIATED COMPANIES
JUNE 30, 2003 ADDITIONS REDUCTIONS JUNE 30, 2004
WORLD PRECIOUS MINERALS FUND
- -----------------------------------------------------------------------------------------------------
Amerigo Resources Ltd. 1,225,000 60,000 (525,000) 760,000(a)
Anooraq Resources Corp. 1,750,000 1,460,000 (932,400) 2,277,600(a)
Apollo Gold Corp. 4,050,400 975,125 (1,148,900) 3,876,625
Atikwa Minerals Corp. -- 1,333,333 -- 1,333,333(a)(c)
Bolivar Gold Corp. 1,695,000 5,248,400 (499,400) 6,444,000
Diamonds North Resources Ltd. 1,300,000 550,000 (50,000) 1,800,000
Endeavour Mining Capital Corp. 662,000 1,321,500 (549,000) 1,434,500
First Step Ventures Corp. 1,333,333 -- (1,333,333) --(a)(c)
Latin America Copper plc -- 3,000,000 -- 3,000,000
Moss Lake Gold Mines Ltd. 2,250,000 -- -- 2,250,000
Navigator Exploration Corp. 1,554,500 -- (1,554,500) --(a)
Nevada Pacific Gold Ltd. -- 2,510,000 (10,000) 2,500,000
Northern Orion Resources, Inc. 2,460,000 3,965,800 (200,000) 6,225,800
Romarco Minerals, Inc. 2,173,500 -- (43,500) 2,130,000
South Atlantic Ventures Ltd. 300,000 838,900 (63,900) 1,075,000(a)
South African Resources plc -- 15,910,000 -- 15,910,000
Stingray Resources, Inc. -- 300,000 -- 300,000(a)
Stockgroup Information Systems, Inc. 2,000,000 -- (1,000,000) 1,000,000(a)
UGL Enterprises Ltd. -- 200,000 -- 200,000(a)
Western Prospector Group Ltd. -- 900,000 -- 900,000
At June 30, 2004, the value of investments in affiliated companies was
$41,133,688, representing 16.66% of net assets, and the total cost was
$33,447,260. Net realized gains on transactions were $4,025,253 and income
earned was $37,444 for the period.
82
NOTES TO PORTFOLIOS OF INVESTMENTS June 30, 2004
SHARES OF AFFILIATED COMPANIES
JUNE 30, 2003 ADDITIONS REDUCTIONS JUNE 30, 2004
GOLD SHARES FUND
- -------------------------------------------------------------------------------------------------
Apollo Gold Corp. 2,064,500 335,000 (637,000) 1,762,500(a)
At June 30, 2004, there were no investments in affiliated companies. Net
realized gains on transactions were $746,400, and there was no income earned for
the period.
(a) At June 30, 2004, the company is no longer defined as an affiliate, although
it was an affiliated company during the period.
(b) During the period, shares of China Broadband Corp. were converted to shares
of China Energy Ventures Corp.
(c) During the period, shares of First Step Ventures Corp. were converted to
shares of Atikwa Minerals Corp.
RESTRICTED SECURITIES - INDICATED IN PORTFOLIO OF INVESTMENTS AS "RS"
The following securities are subject to legal restrictions on their resale. The
issuer bears the cost of registration, if any, involved in the disposition of
these securities.
ACQUISITION COST PER
SECURITY DATE SHARE
CHINA REGION OPPORTUNITY FUND
- ------------------------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS
China NetTV Holdings, Inc. 10/06/03 $0.04
China NetTV Holdings, Inc., Warrants (September 2006) 10/06/03 $0.02
Nu XMP Ventures Ltd. 04/22/04 $0.63
Nu XMP Ventures Ltd., Warrants (May 2005) 04/22/04 $0.00
Sterling Group Ventures, Inc., Units 02/12/04 $0.50
Western Canada Coal Corp., Warrants (April 2005) 04/05/04 $0.26
At June 30, 2004, the total cost of restricted securities was $355,631, and the
total value was $701,083, representing 2.00% of net assets.
GLOBAL RESOURCES FUND
- ------------------------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS
Adobe Ventures, Inc. 03/15/04-03/18/04 $0.68
Adobe Ventures, Inc., S/R 03/15/04-03/18/04 $0.68
Adobe Ventures, Inc., Warrants (March 2006) 03/15/04-03/18/04 $0.00
African Copper plc, Units 04/20/04 $0.63
African Minerals, Special Warrants 07/09/03 $6.00
Aquarius Platinum Ltd. 03/05/03 $5.68
Aquest Energy Ltd. 05/28/04 $2.01
Bear Creek Energy Ltd. 03/12/04 $3.55
Breakwater Resources Ltd. 01/19/04-03/26/04 $0.52
Breakwater Resources Ltd., Warrants (January 2009) 01/9/04-04/01/04 $0.01
Chamaelo Energy, Inc. 06/14/04 $2.92
China NetTV Holdings, Inc. 10/06/03 $0.04
China NetTV Holdings, Inc., Warrants (September 2005) 10/06/03 $0.02
Choice Resources Corp. 03/03/04 $0.37
83
NOTES TO PORTFOLIOS OF INVESTMENTS June 30, 2004
ACQUISITION COST PER
SECURITY DATE SHARE
GLOBAL RESOURCES FUND (CONT'D)
- ----------------------------------------------------------------------------------------------
Choice Resources Corp., Warrants (March 2006) 03/03/04 $0.00
Cinch Energy Corp., S/R 06/08/04 $0.56
Elgin Resources, Inc. 03/05/04 $0.72
Elgin Resources, Inc., Warrants (March 2006) 03/05/04 $0.23
EuroZinc Mining Corp., Special Warrants 03/19/04 $0.45
Forte Resources, Inc. 03/10/04 $1.88
Glencairn Gold Corp. 03/01/04 $0.56
Glencairn Gold Corp., Warrants (November 2008) 03/01/04 $0.00
Grove Energy Ltd. 04/19/04 $0.18
Grove Energy Ltd., Warrants (April 2006) 04/19/04 $0.04
Hawk Energy Corp. 06/23/04 $2.06
Midnight Oil & Gas Ltd. 04/16/04 $5.39
Osmium Holdings S.A. 10/22/96-01/29/98 $987.07
Pacific Stratus Ventures Ltd. 06/22/04 $0.29
Sterling Group Ventures, Inc., Units 02/12/04 $0.50
Taseko Mines Ltd. 02/12/04 $1.30
Taseko Mines Ltd., Warrants (March 2005) 02/12/04 $0.22
Tesoro Energy Ltd., Special Warrants 05/26/04 $0.10
TLC Ventures Corp. 03/05/04 $0.86
TLC Ventures Corp., Warrants (May 2005) 03/05/04 $0.16
TriLoch Resources, Inc., Class A 06/09/04 $1.96
UGL Enterprises Ltd., Warrants (January 2006) 12/09/03 $0.02
West Energy Ltd. 03/08/04 $1.32
Western Canadian Coal Corp. 04/05/04 $0.63
Western Canadian Coal Corp., S/R 05/14/04 $0.91
Western Canadian Coal, Warrants (April 2005) 04/05/04 $0.26
Zimasco Consolidated Enterprises Ltd. 06/15/95-09/30/99 $3.73
At June 30, 2004, the total cost of restricted securities was $12,020,234, and
the total value was $11,220,540, representing 8.28% of net assets.
WORLD PRECIOUS MINERALS FUND
- ----------------------------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS
African Minerals, Special Warrants 07/09/03 $6.00
Aquarius Platinum Ltd. 03/05/03 $5.68
Chilean Gold Ltd. 01/17/97 $1.10
China Energy Ventures Corp. 05/07/04 $0.50
Elgin Resources, Inc. 03/05/04 $0.72
Elgin Resources, Inc., Warrants (March 2006) 03/05/04 $0.23
Frontier Pacific Mining Corp. 03/23/04 $0.38
Frontier Pacific Mining Corp., S/R 03/23/04 $0.38
Frontier Pacific Mining Corp., Warrants (April 2006) 03/23/04 $0.00
Glencairn Gold Corp. 03/01/04 $0.49
Glencairn Gold Corp., Warrants (November 2008) 03/01/04 $0.02
Metallic Ventures Gold Ltd. 02/24/04 $3.37
Metallic Ventures Gold Ltd., Warrants (March 2009) 02/24/04 $0.00
Osmium Holdings S.A. 10/22/96-01/29/98 $1,280.75
84
NOTES TO PORTFOLIOS OF INVESTMENTS June 30, 2004
ACQUISITION COST PER
SECURITY DATE SHARE
WORLD PRECIOUS MINERALS FUND (CONT'D)
- ----------------------------------------------------------------------------------------------
Pacific North West Capital Corp. 04/19/04 $0.59
Pacific North West Capital Corp., Warrants (October 2005) 04/19/04 $0.00
Pacific Stratus Ventures Ltd. 06/22/04 $0.29
Peru Copper Corp., Convertible Shares 03/22/04 $1.40
Peru Copper Corp., Units 03/22/04 $1.40
Platte River Gold, Special Warrants 03/01/04-06/07/04 $1.50
Red Back Mining, Inc., Special Warrants 05/28/04 $1.46
Sydney Resource Corp. 04/19/04 $0.37
Sydney Resource Corp., Warrants (April 2005) 04/19/04 $0.00
Taseko Mines Ltd. 02/12/04 $1.30
Taseko Mines Ltd., Warrants (February 2005) 02/12/04 $0.22
TLC Ventures Corp. 03/08/04 $0.86
TLC Ventures Corp., Warrants (May 2005) 03/08/04 $0.16
UGL Enterprises Ltd., Warrants (January 2006) 12/09/03 $0.02
Western Exploration & Development Ltd., 144A,
Special Warrants 08/14/97 $0.50
Zimasco Consolidated Enterprises Ltd. 06/15/95-09/30/99 $3.73
At June 30, 2004, the total cost of restricted securities was $9,503,763, and
the total value was $6,720,664, representing 2.72% of net assets.
GOLD SHARES FUND
- ----------------------------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS
Glencairn Gold Corp. 03/01/04 $0.45
Glencairn Gold Corp., Warrants (November 2008) 03/01/04 $0.02
At June 30, 2004, the total cost of restricted securities was $45,818, and the
total value was $53,330, representing 0.08% of net assets.
85
STATEMENTS OF ASSETS AND LIABILITIES
U.S. TREASURY
SECURITIES
CASH FUND
Investments, at identified cost $131,204,141
============
ASSETS
- ---------------------------------------------------------------------------
Investments, at value:
Securities $ 75,071,575
Repurchase agreements 56,132,566
Cash 1
Receivables:
Interest 148,538
Capital shares sold 1,514,762
From adviser --
Other assets 35,624
- ---------------------------------------------------------------------------
TOTAL ASSETS 132,903,066
- ---------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------
Payables:
Investments purchased --
Capital shares redeemed 20,190,718
Adviser and affiliates 62,604
Dividends and distributions 441
Accounts payable and accrued expenses 74,380
- ---------------------------------------------------------------------------
TOTAL LIABILITIES 20,328,143
- ---------------------------------------------------------------------------
NET ASSETS $112,574,923
============
NET ASSETS CONSIST OF:
- ---------------------------------------------------------------------------
Paid-in capital $112,593,835
Accumulated undistributed net investment income
(distributions in excess of net investment income) (441)
Accumulated net realized loss on investments and
foreign currencies (18,471)
Net unrealized appreciation of investments
and other assets and liabilities denominated in
foreign currencies --
------------
Net assets applicable to capital shares outstanding $112,574,923
============
Capital shares outstanding, an unlimited number of no
par shares authorized 112,648,632
============
NET ASSET VALUE, PUBLIC OFFERING PRICE, REDEMPTION PRICE,
PER SHARE $ 1.00
============
See accompanying notes to financial statements.
86
June 30, 2004
U.S. GOVERNMENT
SECURITIES NEAR-TERM TAX FREE
SAVINGS FUND TAX FREE FUND FUND
Investments, at identified cost $437,405,280 $18,348,366 $28,812,870
============ =========== ===========
ASSETS
- -------------------------------------------------------------------------------------------------------------------
Investments, at value:
Securities $437,405,280 $18,013,169 $28,356,851
Repurchase agreements -- 446,183 983,470
Cash 1,002 1 869,077
Receivables:
Interest 1,255,736 246,150 287,401
Capital shares sold 3,611,327 60 34,773
From adviser -- 3,904 --
Other assets 48,571 2,578 4,815
- -------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 442,321,916 18,712,045 30,536,387
- -------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------------------
Payables:
Investments purchased -- -- 2,309,357
Capital shares redeemed 376,254 9 6,336
Adviser and affiliates 116,505 -- 13,168
Dividends and distributions 2,769 5,132 6,961
Accounts payable and accrued expenses 104,862 33,788 34,057
- -------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 600,390 38,929 2,369,879
- -------------------------------------------------------------------------------------------------------------------
NET ASSETS $441,721,526 $18,673,116 $28,166,508
============ =========== ===========
NET ASSETS CONSIST OF:
- -------------------------------------------------------------------------------------------------------------------
Paid-in capital $441,745,226 $18,702,297 $28,619,333
Accumulated undistributed net investment income
(distributions in excess of net investment income) 398,955 12,022 24,169
Accumulated net realized loss on investments and
foreign currencies (422,655) (152,189) (1,004,445)
Net unrealized appreciation of investments
and other assets and liabilities denominated in
foreign currencies -- 110,986 527,451
------------ ----------- -----------
Net assets applicable to capital shares outstanding $441,721,526 $18,673,116 $28,166,508
============ =========== ===========
Capital shares outstanding, an unlimited number of no
par shares authorized 441,973,692 1,719,713 2,331,713
============ =========== ===========
NET ASSET VALUE, PUBLIC OFFERING PRICE, REDEMPTION PRICE,
PER SHARE $ 1.00 $ 10.86 $ 12.08
============ =========== ===========
87
STATEMENTS OF ASSETS AND LIABILITIES
ALL AMERICAN CHINA REGION
EQUITY FUND OPPORTUNITY FUND
Investments, at identified cost $18,209,870 $ 34,679,431
=========== ============
ASSETS
- ----------------------------------------------------------------------------------
Investments, at value:
Securities of unaffiliated issuers $17,858,017 $ 28,656,152
Securities of affiliated issuers -- 698,938
Repurchase agreements 2,223,507 6,165,625
Cash -- 130,894
Foreign currencies (cost $0, $133,184,
$26,169, $1,381,413, and $104,744) -- 136,217
Receivables:
Investments sold 256,448 --
Dividends 14,993 118,924
Interest 80 221
Capital shares sold 5,715 14,980
Other assets 8,741 9,093
- ----------------------------------------------------------------------------------
TOTAL ASSETS 20,367,501 35,931,044
- ----------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------
Payables:
Investments purchased 315,585 720,268
Capital shares redeemed 27,053 19,423
Adviser and affiliates 9,316 44,591
Accounts payable and accrued expenses 41,552 57,196
Due to custodian -- --
- ----------------------------------------------------------------------------------
TOTAL LIABILITIES 393,506 841,478
- ----------------------------------------------------------------------------------
NET ASSETS $19,973,995 $ 35,089,566
=========== ============
NET ASSETS CONSIST OF:
- ----------------------------------------------------------------------------------
Paid-in capital $19,774,015 $ 45,331,829
Distributions in excess of net investment
income (5,021) (264,108)
Accumulated net realized gain (loss) on
investments and foreign currencies (1,666,653) (10,821,702)
Net unrealized appreciation of investments
and other assets and liabilities
denominated in foreign currencies 1,871,654 843,547
----------- ------------
Net assets applicable to capital shares
outstanding $19,973,995 $ 35,089,566
=========== ============
Capital shares outstanding, an
unlimited number of no par shares
authorized 886,472 5,984,733
=========== ============
NET ASSET VALUE, PUBLIC OFFERING PRICE,
REDEMPTION PRICE, PER SHARE $ 22.53 $ 5.86
=========== ============
See accompanying notes to financial statements.
88
June 30, 2004
GLOBAL RESOURCES WORLD PRECIOUS GOLD SHARES
FUND MINERALS FUND FUND
Investments, at identified cost $121,145,020 $193,394,554 $ 51,211,107
============ ============ =============
ASSETS
- ---------------------------------------------------------------------------------------------------------
Investments, at value:
Securities of unaffiliated issuers $117,479,881 $176,738,264 $ 57,604,363
Securities of affiliated issuers 4,097,327 41,133,688 --
Repurchase agreements 11,818,863 13,363,386 5,258,724
Cash -- -- --
Foreign currencies (cost $0, $133,184,
$26,169, $1,381,413, and $104,744) 30,645 1,381,726 104,744
Receivables:
Investments sold 5,259,658 2,316,499 519,912
Dividends 247,017 3,207 1,742
Interest 6,857 19,778 188
Capital shares sold 299,169 16,428,097 4,325,116
Other assets 13,572 37,837 25,589
- ---------------------------------------------------------------------------------------------------------
TOTAL ASSETS 139,252,989 251,422,482 67,840,378
- ---------------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------------
Payables:
Investments purchased 3,269,971 3,649,253 693,099
Capital shares redeemed 176,452 475,031 269,388
Adviser and affiliates 140,245 233,326 42,516
Accounts payable and accrued expenses 72,998 124,200 91,575
Due to custodian 19,280 89,170 12,050
- ---------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 3,678,946 4,570,980 1,108,628
- ---------------------------------------------------------------------------------------------------------
NET ASSETS $135,574,043 $246,851,502 $ 66,731,750
============ ============ =============
NET ASSETS CONSIST OF:
- ---------------------------------------------------------------------------------------------------------
Paid-in capital $121,648,444 $258,652,783 $ 174,612,697
Distributions in excess of net investment
income (1,275,308) (25,264,531) (875,224)
Accumulated net realized gain (loss) on
investments and foreign currencies 2,919,706 (24,365,168) (118,656,322)
Net unrealized appreciation of investments
and other assets and liabilities
denominated in foreign currencies 12,281,201 37,828,418 11,650,599
------------ ------------ -------------
Net assets applicable to capital shares
outstanding $135,574,043 $246,851,502 $ 66,731,750
============ ============ =============
Capital shares outstanding, an
unlimited number of no par shares
authorized 16,154,826 18,042,440 9,527,682
============ ============ =============
NET ASSET VALUE, PUBLIC OFFERING PRICE,
REDEMPTION PRICE, PER SHARE $ 8.39 $ 13.68 $ 7.00
============ ============ =============
89
STATEMENTS OF OPERATIONS
U.S. TREASURY
SECURITIES
CASH FUND
NET INVESTMENT INCOME
INCOME:
- ---------------------------------------------------------------------------
Interest and other $1,297,929
----------
TOTAL INCOME 1,297,929
EXPENSES:
- ---------------------------------------------------------------------------
Management fee 628,472
Transfer agent fees and expenses 231,171
Accounting service fees and expenses 40,000
Professional fees 44,962
Custodian fees 118,037
Shareholder reporting 85,461
Registration fees 29,255
Trustee fees and expenses 17,168
Miscellaneous 57,332
----------
Total expenses before reductions 1,251,858
Expenses offset - Note 1 J (1,161)
Expenses reimbursed - Note 2 (45,136)
----------
NET EXPENSES 1,205,561
- ---------------------------------------------------------------------------
NET INVESTMENT INCOME 92,368
- ---------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) from securities 1
Net change in unrealized appreciation of investments --
- ---------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS 1
- ---------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 92,369
==========
See accompanying notes to financial statements.
90
For the Year Ended June 30, 2004
U.S. GOVERNMENT
SECURITIES NEAR-TERM TAX FREE
SAVINGS FUND TAX FREE FUND FUND
NET INVESTMENT INCOME
INCOME:
- -----------------------------------------------------------------------------------------------------------------
Interest and other $5,105,618 $ 656,491 $ 1,850,197
---------- --------- -----------
TOTAL INCOME 5,105,618 656,491 1,850,197
EXPENSES:
- -----------------------------------------------------------------------------------------------------------------
Management fee 2,126,110 103,078 354,253
Transfer agent fees and expenses 485,011 19,293 19,986
Accounting service fees and expenses 59,468 40,000 40,000
Professional fees 51,281 33,263 33,763
Custodian fees 86,802 14,766 18,463
Shareholder reporting 146,801 7,716 7,758
Registration fees 48,926 17,299 15,429
Trustee fees and expenses 17,168 17,168 17,168
Miscellaneous 120,815 5,412 9,376
---------- --------- -----------
Total expenses before reductions 3,142,382 257,995 516,196
Expenses offset - Note 1 J -- (16) (214)
Expenses reimbursed - Note 2 (966,050) (165,209) (185,348)
---------- --------- -----------
NET EXPENSES 2,176,332 92,770 330,634
- -----------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 2,929,286 563,721 1,519,563
- -----------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) from securities (2,815) (75,145) (666,186)
Net change in unrealized appreciation of investments -- (519,740) (1,643,946)
- -----------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (2,815) (594,885) (2,310,132)
- -----------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $2,926,471 $ (31,164) $ (790,569)
========== ========= ===========
91
STATEMENTS OF OPERATIONS
ALL AMERICAN CHINA REGION
EQUITY FUND OPPORTUNITY FUND
NET INVESTMENT INCOME
INCOME:
- ----------------------------------------------------------------------------------
Dividends from unaffiliated issuers $ 239,332 $ 867,834
Dividends from affiliated issuers -- --
Foreign taxes withheld on dividends (5,989) (7,913)
---------- ----------
Net dividends 233,343 859,921
Interest and other (net of foreign taxes
withheld $0, $789, $289, $0, $0) 14,434 52,837
---------- ----------
TOTAL INCOME 247,777 912,758
EXPENSES:
- ----------------------------------------------------------------------------------
Management fee 147,636 496,816
Transfer agent fees and expenses 101,723 102,377
Accounting service fees and expenses 40,000 51,300
Professional fees 57,312 47,648
Custodian fees 23,231 109,910
Shareholder reporting 32,738 28,302
Registration fees 14,045 20,942
Trustee fees and expenses 17,168 17,168
Miscellaneous 20,138 19,383
---------- ----------
Total expenses before reductions 453,991 893,846
Expenses offset - Note 1 J (98) (446)
Expenses reimbursed - Note 2 (109,408) --
---------- ----------
NET EXPENSES 344,485 893,400
- ----------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (96,708) 19,358
- ----------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Realized gain (loss) from:
Securities of unaffiliated issuers 2,013,472 3,701,415
Securities of affiliated issuers -- 128,884
Foreign currency transactions (410) (12,560)
---------- ----------
NET REALIZED GAIN 2,013,062 3,817,739
---------- ----------
Net change in unrealized appreciation of:
Investments 1,211,376 1,800,505
Other assets and liabilities
denominated in foreign currencies 1 2,261
---------- ----------
NET UNREALIZED APPRECIATION 1,211,377 1,802,766
- ----------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 3,224,439 5,620,505
- ----------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $3,127,731 $5,639,863
========== ==========
See accompanying notes to financial statements.
92
For the Year Ended June 30, 2004
GLOBAL RESOURCES WORLD PRECIOUS GOLD SHARES
FUND MINERALS FUND FUND
NET INVESTMENT INCOME
INCOME:
- ------------------------------------------------------------------------------------------------------------------
Dividends from unaffiliated issuers $ 3,142,336 $ 415,745 $ 260,828
Dividends from affiliated issuers -- 37,444 --
Foreign taxes withheld on dividends (353,656) (22,818) (12,486)
----------- ----------- -----------
Net dividends 2,788,680 430,371 248,342
Interest and other (net of foreign taxes
withheld $0, $789, $289, $0, $0) 132,213 294,606 81,051
----------- ----------- -----------
TOTAL INCOME 2,920,893 724,977 329,393
EXPENSES:
- ------------------------------------------------------------------------------------------------------------------
Management fee 1,283,912 2,168,354 511,887
Transfer agent fees and expenses 238,219 426,299 362,611
Accounting service fees and expenses 84,305 146,420 55,000
Professional fees 83,068 127,336 92,999
Custodian fees 157,812 203,509 82,035
Shareholder reporting 43,952 100,309 130,787
Registration fees 39,202 42,229 15,907
Trustee fees and expenses 17,168 17,168 17,168
Miscellaneous 26,929 71,428 52,290
----------- ----------- -----------
Total expenses before reductions 1,974,567 3,303,052 1,320,684
Expenses offset - Note 1 J (1,192) (1,018) (421)
Expenses reimbursed - Note 2 -- -- --
----------- ----------- -----------
NET EXPENSES 1,973,375 3,302,034 1,320,263
- ------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 947,518 (2,577,057) (990,870)
- ------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Realized gain (loss) from:
Securities of unaffiliated issuers 13,470,251 26,208,014 13,031,548
Securities of affiliated issuers -- 4,025,253 746,400
Foreign currency transactions (493,095) (333,324) (21,097)
----------- ----------- -----------
NET REALIZED GAIN 12,977,156 29,899,943 13,756,851
----------- ----------- -----------
Net change in unrealized appreciation of:
Investments 8,810,543 28,824,570 2,231,061
Other assets and liabilities
denominated in foreign currencies 31,094 (11,665) (1,944)
----------- ----------- -----------
NET UNREALIZED APPRECIATION 8,841,637 28,812,905 2,229,117
- ------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 21,818,793 58,712,848 15,985,968
- ------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $22,766,311 $56,135,791 $14,995,098
=========== =========== ===========
93
STATEMENTS OF CHANGES IN NET ASSETS
U.S. TREASURY
SECURITIES
CASH FUND
------------------------------------
YEAR ENDED YEAR ENDED
JUNE 30, 2004 JUNE 30, 2003
INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS:
- --------------------------------------------------------------------------------------------
Net investment income $ 92,368 $ 680,359
Net realized gain (loss) 1 (285)
Net unrealized appreciation (depreciation) -- --
--------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 92,369 680,074
DISTRIBUTIONS TO SHAREHOLDERS:
- --------------------------------------------------------------------------------------------
From net investment income (101,002) (751,704)
--------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (101,002) (751,704)
FROM CAPITAL SHARE TRANSACTIONS:
- --------------------------------------------------------------------------------------------
Proceeds from shares sold 1,025,094,191 863,618,552
Distributions reinvested 94,987 710,363
--------------- -------------
1,025,189,178 864,328,915
Cost of shares redeemed (1,036,484,900) (875,308,077)
--------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS (11,295,722) (10,979,162)
- --------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS (11,304,355) (11,050,792)
- --------------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 123,879,278 134,930,070
- --------------------------------------------------------------------------------------------
END OF YEAR $ 112,574,923 $ 123,879,278
- --------------------------------------------------------------------------------------------
Accumulated undistributed net investment income
(distributions in excess of net investment income),
end of year $ (441) $ 2,944
=============== =============
CAPITAL SHARE ACTIVITY
- --------------------------------------------------------------------------------------------
Shares sold 1,025,094,191 863,618,552
Shares reinvested 94,987 710,363
Shares redeemed (1,036,484,900) (875,308,077)
--------------- -------------
NET SHARE ACTIVITY (11,295,722) (10,979,162)
=============== =============
See accompanying notes to financial statements.
94
U.S. GOVERNMENT
SECURITIES
SAVINGS FUND NEAR-TERM TAX FREE FUND
----------------------------------- ----------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2004 JUNE 30, 2003 JUNE 30, 2004 JUNE 30, 2003
INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS:
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 2,929,286 $ 6,615,154 $ 563,721 $ 476,265
Net realized gain (loss) (2,815) (9,319) (75,145) 35,407
Net unrealized appreciation (depreciation) -- -- (519,740) 395,074
------------- ------------- ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 2,926,471 6,605,835 (31,164) 906,746
DISTRIBUTIONS TO SHAREHOLDERS:
- ----------------------------------------------------------------------------------------------------------------------------------
From net investment income (3,011,129) (6,815,829) (562,094) (478,091)
------------- ------------- ------------ -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (3,011,129) (6,815,829) (562,094) (478,091)
FROM CAPITAL SHARE TRANSACTIONS:
- ----------------------------------------------------------------------------------------------------------------------------------
Proceeds from shares sold 305,815,073 335,896,920 9,190,367 17,450,837
Distributions reinvested 2,951,497 6,670,375 509,716 441,277
------------- ------------- ------------ -----------
308,766,570 342,567,295 9,700,083 17,892,114
Cost of shares redeemed (396,789,633) (504,370,898) (12,412,496) (6,093,639)
------------- ------------- ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS (88,023,063) (161,803,603) (2,712,413) 11,798,475
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS (88,107,721) (162,013,597) (3,305,671) 12,227,130
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 529,829,247 691,842,844 21,978,787 9,751,657
- ----------------------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 441,721,526 $ 529,829,247 $ 18,673,116 $21,978,787
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net investment income
(distributions in excess of net investment income),
end of year $ 398,955 $ 480,798 $ 12,022 $ 10,394
============= ============= ============ ===========
CAPITAL SHARE ACTIVITY
- ----------------------------------------------------------------------------------------------------------------------------------
Shares sold 305,815,073 335,896,920 830,096 1,581,563
Shares reinvested 2,951,497 6,670,375 46,269 40,016
Shares redeemed (396,789,633) (504,370,898) (1,129,078) (551,304)
------------- ------------- ------------ -----------
NET SHARE ACTIVITY (88,023,063) (161,803,603) (252,713) 1,070,275
============= ============= ============ ===========
95
STATEMENTS OF CHANGES IN NET ASSETS
TAX FREE FUND
-----------------------------------
YEAR ENDED YEAR ENDED
JUNE 30, 2004 JUNE 30, 2003
INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS:
- -----------------------------------------------------------------------------------------
Net investment income (loss) $ 1,519,563 $ 1,213,285
Net realized gain (loss) (666,186) 152,900
Net unrealized appreciation (depreciation) (1,643,946) 1,440,495
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (790,569) 2,806,680
DISTRIBUTIONS TO SHAREHOLDERS:
- -----------------------------------------------------------------------------------------
From net investment income (1,516,384) (1,213,917)
------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (1,516,384) (1,213,917)
FROM CAPITAL SHARE TRANSACTIONS:
- -----------------------------------------------------------------------------------------
Proceeds from shares sold 19,801,674 49,605,702
Distributions reinvested 1,421,180 1,098,784
Proceeds from short-term trading fees -- --
------------ ------------
21,222,854 50,704,486
Cost of shares redeemed (46,032,083) (18,712,637)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS (24,809,229) 31,991,849
- -----------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS (27,116,182) 33,584,612
- -----------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 55,282,690 21,698,078
- -----------------------------------------------------------------------------------------
END OF YEAR $ 28,166,508 $ 55,282,690
- -----------------------------------------------------------------------------------------
Accumulated undistributed net investment income
(distributions in excess of net investment
income), end of year $ 24,169 $ 20,990
============ ============
CAPITAL SHARE ACTIVITY
- -----------------------------------------------------------------------------------------
Shares sold 1,592,976 4,005,999
Shares reinvested 114,947 88,017
Shares redeemed (3,746,613) (1,505,744)
------------ ------------
NET SHARE ACTIVITY (2,038,690) 2,588,272
============ ============
See accompanying notes to financial statements.
96
CHINA REGION
ALL AMERICAN EQUITY FUND OPPORTUNITY FUND
----------------------------------- -----------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2004 JUNE 30, 2003 JUNE 30, 2004 JUNE 30, 2003
INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS:
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ (96,708) $ (21,087) $ 19,358 $ (62,507)
Net realized gain (loss) 2,013,062 (1,452,818) 3,817,739 (992,220)
Net unrealized appreciation (depreciation) 1,211,377 (487,063) 1,802,766 413,867
----------- ----------- ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 3,127,731 (1,960,968) 5,639,863 (640,860)
DISTRIBUTIONS TO SHAREHOLDERS:
- ----------------------------------------------------------------------------------------------------------------------------------
From net investment income -- -- (389,832) --
----------- ----------- ------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS -- -- (389,832) --
FROM CAPITAL SHARE TRANSACTIONS:
- ----------------------------------------------------------------------------------------------------------------------------------
Proceeds from shares sold 5,303,241 4,900,381 83,398,128 12,455,142
Distributions reinvested -- -- 375,803 --
Proceeds from short-term trading fees 1,540 1,748 346,504 31,567
----------- ----------- ------------ ------------
5,304,781 4,902,129 84,120,435 12,486,709
Cost of shares redeemed (6,792,391) (5,320,669) (67,095,545) (11,033,754)
----------- ----------- ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS (1,487,610) (418,540) 17,024,890 1,452,955
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 1,640,121 (2,379,508) 22,274,921 812,095
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 18,333,874 20,713,382 12,814,645 12,002,550
- ----------------------------------------------------------------------------------------------------------------------------------
END OF YEAR $19,973,995 $18,333,874 $ 35,089,566 $ 12,814,645
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net investment income
(distributions in excess of net investment
income), end of year $ (5,021) $ -- $ (264,108) $ (3,196)
=========== =========== ============ ============
CAPITAL SHARE ACTIVITY
- ----------------------------------------------------------------------------------------------------------------------------------
Shares sold 248,317 276,632 13,569,142 3,269,404
Shares reinvested -- -- 58,903 --
Shares redeemed (319,266) (296,261) (10,715,843) (2,939,535)
----------- ----------- ------------ ------------
NET SHARE ACTIVITY (70,949) (19,629) 2,912,202 329,869
=========== =========== ============ ============
97
STATEMENTS OF CHANGES IN NET ASSETS
GLOBAL RESOURCES FUND
----------------------------------
YEAR ENDED YEAR ENDED
JUNE 30, 2004 JUNE 30, 2003
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
- -----------------------------------------------------------------------------------------
Net investment income (loss) $ 947,518 $ (145,113)
Net realized gain (loss) 12,977,156 21,597
Net unrealized appreciation (depreciation) 8,841,637 707,173
------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 22,766,311 583,657
DISTRIBUTIONS TO SHAREHOLDERS:
- -----------------------------------------------------------------------------------------
From net investment income (2,895,600) (230,003)
------------- ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (2,895,600) (230,003)
FROM CAPITAL SHARE TRANSACTIONS:
- -----------------------------------------------------------------------------------------
Proceeds from shares sold 348,432,901 9,565,719
Distributions reinvested 2,804,886 216,460
Proceeds from short-term trading fee 77,336 9,913
------------- ------------
351,315,123 9,792,092
Cost of shares redeemed (250,495,998) (10,161,261)
------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS 100,819,125 (369,169)
- -----------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 120,689,836 (15,515)
- -----------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 14,884,207 14,899,722
- -----------------------------------------------------------------------------------------
END OF YEAR $ 135,574,043 $ 14,884,207
- -----------------------------------------------------------------------------------------
Distributions in excess of net investment income,
end of year $ (1,275,308) $ (418,159)
============= ============
CAPITAL SHARE ACTIVITY
- -----------------------------------------------------------------------------------------
Shares sold 42,999,711 2,089,242
Shares reinvested 340,812 51,172
Shares redeemed (30,079,698) (2,270,820)
------------- ------------
NET SHARE ACTIVITY 13,260,825 (130,406)
============= ============
See accompanying notes to financial statements.
98
WORLD PRECIOUS
MINERALS FUND GOLD SHARES FUND
--------------------------------- ---------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2004 JUNE 30, 2003 JUNE 30, 2004 JUNE 30, 2003
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ (2,577,057) $ (1,000,567) $ (990,870) $ (877,419)
Net realized gain (loss) 29,899,943 4,176,697 13,756,851 (1,333,628)
Net unrealized appreciation (depreciation) 28,812,905 (6,590,466) 2,229,117 134,090
-------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 56,135,791 (3,414,336) 14,995,098 (2,076,957)
DISTRIBUTIONS TO SHAREHOLDERS:
- -----------------------------------------------------------------------------------------------------------------------------
From net investment income (28,079,322) (2,305,012) (247,150) --
-------------- ------------- ------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (28,079,322) (2,305,012) (247,150) --
FROM CAPITAL SHARE TRANSACTIONS:
- -----------------------------------------------------------------------------------------------------------------------------
Proceeds from shares sold 991,344,370 617,471,740 217,107,819 108,006,550
Distributions reinvested 26,655,112 2,200,668 232,435 --
Proceeds from short-term trading fee 1,698,299 1,402,876 412,525 207,077
-------------- ------------- ------------- -------------
1,019,697,781 621,075,284 217,752,779 108,213,627
Cost of shares redeemed (908,115,092) (605,187,869) (211,488,529) (113,328,412)
-------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS 111,582,689 15,887,415 6,264,250 (5,114,785)
- -----------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 139,639,158 10,168,067 21,012,198 (7,191,742)
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 107,212,344 97,044,277 45,719,552 52,911,294
- -----------------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 246,851,502 $ 107,212,344 $66,731,750 $45,719,552
- -----------------------------------------------------------------------------------------------------------------------------
Distributions in excess of net investment income,
end of year $ (25,264,531) $ (3,481,051) $ (875,224) $ (29,098)
============== ============= ============= =============
CAPITAL SHARE ACTIVITY
- -----------------------------------------------------------------------------------------------------------------------------
Shares sold 67,498,565 68,090,367 29,745,969 22,960,311
Shares reinvested 1,746,731 231,893 28,802 --
Shares redeemed (62,198,481) (66,629,273) (29,073,888) (24,159,232)
-------------- ------------- ------------- -------------
NET SHARE ACTIVITY 7,046,815 1,692,987 700,883 (1,198,921)
============== ============= ============= =============
99
NOTES TO FINANCIAL STATEMENTS June 30, 2004
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES
U.S. Global Investors Funds (Trust) is organized as a Massachusetts business
trust, consisting of nine separate funds (funds), as follows: U.S. Treasury
Securities Cash, U.S. Government Securities Savings, Near-Term Tax Free, Tax
Free, All American Equity, China Region Opportunity, Global Resources, World
Precious Minerals and Gold Shares. The Trust is an open-end management
investment company registered under the Investment Company Act of 1940, as
amended. All funds are diversified with the exception of China Region
Opportunity, Global Resources, World Precious Minerals and Gold Shares.
The following is a summary of significant accounting policies consistently
followed by the funds in the preparation of their financial statements. The
policies are in conformity with accounting principles generally accepted in the
United States.
A. SECURITY VALUATIONS
The funds value investments traded on national or international securities
exchanges or over-the-counter at the last sales price reported by the
security's primary exchange at the time of daily valuation. Securities for
which no sale was reported are valued at the mean between the last reported bid
and asked prices or using quotes provided by principal market makers.
Short-term investments with effective maturities of sixty days or less at the
date of purchase and investments of U.S. Treasury Securities Cash and U.S.
Government Securities Savings Funds are valued at amortized cost, which
approximates market value. An independent pricing service values municipal
securities and long-term U.S. Government obligations using a system based on
such factors as credit rating, maturity, coupon and type of security to
determine fair value.
B. FAIR VALUED SECURITIES
Securities for which market quotations are not readily available or which are
subject to legal restrictions are valued at their fair value as determined in
good faith under consistently applied procedures under the general supervision
of the Board of Trustees. The following factors are generally considered in
determining fair value: nature and duration of any trading restrictions,
trading volume, market values of unrestricted shares of the same or similar
class, investment management's judgment regarding the market experience of the
issuer, financial status and other operational and market factors affecting the
issuer, issuer's management, quality of the underlying property based on review
of independent geological studies, the extent of the fund's investment in the
trading securities of the issuer; and other relevant matters. The fair values
may differ from what would have been used had a broader market for these
securities existed.
For securities traded on international exchanges, if events which may
materially affect the value of the fund's securities occur after the close of
the primary
100
NOTES TO FINANCIAL STATEMENTS June 30, 2004
exchange and before the fund's net asset value is next determined then those
securities will be valued at their fair value as determined in good faith under
the supervision of the Board of Trustees.
C. SECURITY TRANSACTIONS AND INVESTMENT INCOME Security transactions are
accounted for on trade date. Realized gains and losses from security
transactions are determined on an identified-cost basis. Dividend income is
recorded on the ex-dividend date, except that certain dividends from foreign
securities where the ex-dividend date may have passed are recorded as soon as
the funds are informed of the ex-dividend data in the exercise of reasonable
diligence. Interest income, which may include original issue discount, is
recorded on an accrual basis. Discounts and premiums on securities purchased
are accreted and amortized, respectively, on a yield-to-maturity basis as
adjustments to interest income.
The funds may purchase securities on a when-issued or delayed-delivery basis
and segregate the liquid assets on their books to collateralize the obligation
until trade settlement. Such investments are accounted for in the same manner
as marketable portfolio securities.
The equity funds may invest in private placements and initial public offerings
(IPOs), the volatility of which may significantly affect performance. There is
no guarantee that these high-risk investments will affect a fund's performance
in the same way in the future.
D. REPURCHASE AGREEMENTS
The funds may enter into repurchase agreements with recognized financial
institutions or registered broker-dealers and, in all instances, hold as
collateral, underlying securities with a value exceeding the total repurchase
price, including accrued interest. The funds use joint tri-party repurchase
agreements with other funds under common management where uninvested cash is
collectively invested in repurchase agreements, and each participating fund
owns an undivided interest in the account.
E. OPTIONS
Some funds may write or purchase options on securities to manage their exposure
to stock or commodity markets as well as fluctuations in interest and currency
conversion rates. Written options include a risk of loss in excess of the
option premium. The use of options carries the risk of a change in value of the
underlying instruments, an illiquid secondary market, or that the counterparty
may fail to perform its obligations. The option premium is the basis for
recognition of unrealized or realized gain or loss on the option. The cost of
securities acquired or the proceeds from securities sold through the exercise
of the option is adjusted by the amount of the premium. There were no written
options open at June 30, 2004.
101
NOTES TO FINANCIAL STATEMENTS June 30, 2004
Purchase option transactions during the year ended June 30, 2004 were as
follows:
WORLD PRECIOUS
GLOBAL RESOURCES FUND MINERALS FUND GOLD SHARES FUND
---------------------------------------------------------------------------------------
NUMBER OF PREMIUMS NUMBER OF PREMIUMS NUMBER OF PREMIUMS
CONTRACTS PAID/(RECEIVED) CONTRACTS PAID/(RECEIVED) CONTRACTS PAID/(RECEIVED)
Options outstanding
at June 30, 2003 200 $ 38,583 21,550 $ 2,514,891 11,650 $ 1,460,779
Options purchased 2,346 435,818 20,694 2,779,809 7,060 632,965
Options sold (1,590) (146,753) (29,080) (3,467,890) (13,830) (1,406,610)
Options expired -- -- (750) (99,750) (250) (33,250)
------ --------- ------- ----------- ------- -----------
Options outstanding
at June 30, 2004 956 $ 327,648 12,414 $ 1,727,060 4,630 $ 653,884
====== ========= ======= =========== ======= ===========
F. FOREIGN CURRENCY TRANSACTIONS
Some funds may invest in securities of foreign issuers. The accounting records
of these funds are maintained in U.S. dollars. At each net asset value
determination date, the value of assets and liabilities denominated in foreign
currencies are translated into U.S. dollars using the current exchange rate.
Security transactions, income and expenses are converted to U.S. dollars at the
prevailing rate of exchange on the date of the event. The effect of changes in
foreign exchange rates on foreign denominated securities is included with the
net realized and unrealized gain or loss on securities. Other unrealized
foreign currency gains or losses are reported separately.
G. FORWARD FOREIGN CURRENCY CONTRACTS
The funds may enter into forward foreign currency contracts to lock in the U.S.
dollar cost of purchase and sale transactions. A forward foreign currency
contract is a commitment to purchase or sell a foreign currency at a future
date at a negotiated rate. These contracts are valued daily, and the fund's net
equity therein, representing unrealized gain or loss on the contracts as
measured by the difference between the forward foreign exchange rates at the
dates of entry into the contracts and the forward rates at the reporting, is
included in the statement of assets and liabilities. Realized and unrealized
gains and losses are included in the statement of operations. Risks may arise
upon entering into these contracts from the potential inability of
counterparties to meet the terms of the contract and from unanticipated
movements in the value of foreign currencies relative to the U.S. dollar. There
were no open forward foreign currency contracts at June 30, 2004.
H. FEDERAL INCOME TAXES
The funds intend to continue to comply with the requirements of Subchapter M of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of their taxable income to shareholders.
Accordingly, no provision for federal income taxes is required.
102
NOTES TO FINANCIAL STATEMENTS June 30, 2004
I. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
The funds record dividends and distributions to shareholders on the ex-dividend
date. Distributions are determined in accordance with income tax regulations,
which may differ from accounting principles generally accepted in the United
States. Accordingly, periodic reclassifications are made within the funds'
capital accounts to reflect income and gains available for distribution under
income tax regulations.
The funds generally make distributions at least annually. The U.S. Treasury
Securities Cash and U.S. Government Securities Savings Funds accrue dividends,
on a daily basis with payment monthly. Tax Free and Near-Term Tax Free pay
monthly dividends. Dividends and distributions payable at period end are
processed for reinvestment on the following business day.
J. EXPENSES
Each fund bears expenses incurred specifically on its behalf plus an allocation
of its share of Trust level expenses. Expense offset arrangements have been
made with the funds' custodian so the custodian fees may be paid indirectly by
credits earned on the funds' cash balances. Such deposit arrangements are an
alternative to overnight investments.
K. SHORT-TERM TRADING (REDEMPTION) FEES
Shares held in the All American Equity Fund less than 30 days are subject to a
short-term trading fee equal to 0.10% of the proceeds of the redeemed shares.
Shares held in the China Region Opportunity Fund less than 180 days are subject
to a short-term trading fee equal to 1.00% of the proceeds of the redeemed
shares. Shares held in the Global Resources, World Precious Minerals and Gold
Shares Funds held less than 30 days are subject to a short-term trading fee
equal to 0.25% of the proceeds of the redeemed shares. These fees, which are
retained by the funds, are accounted for as an addition to paid-in capital.
L. USE OF ESTIMATES IN FINANCIAL STATEMENT PREPARATION The preparation of
financial statements in conformity with accounting principles generally
accepted in the United States requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
NOTE 2: RELATED PARTY TRANSACTIONS
U.S. Global Investors, Inc. (Adviser), under an investment advisory agreement
with the Trust in effect through February 28, 2005, furnishes management and
investment advisory services and, subject to the supervision of the Trustees,
directs the investments of each fund according to its investment objectives,
policies and
103
NOTES TO FINANCIAL STATEMENTS June 30, 2004
limitations. The Adviser also furnishes all necessary office facilities,
business equipment and personnel for administering the affairs of the Trust.
Frank E. Holmes, a trustee of the funds, is the controlling owner of the
Adviser.
For the services of the Adviser, each fund pays a management fee based upon its
net assets. Fees are accrued daily and paid monthly. The contractual management
fee for each fund is:
ANNUAL PERCENTAGE OF
FUND AVERAGE DAILY NET ASSETS
----------------------------------------------------------------------------
Gold Shares, All American Equity and .75% of the first $250,000,000 and
Tax Free .50% of the excess
U.S. Treasury Securities Cash and .50% of the first $250,000,000 and U.S.
Government Securities Savings .375% of the excess
World Precious Minerals and 1.00% of the first $250,000,000 and
Global Resources .50% of the excess
Near-Term Tax Free 0.50%
China Region Opportunity 1.25%
The Adviser has agreed to reimburse specific funds so that their total
operating expenses will not exceed certain annual percentages of average net
assets. The expenses for the year ended June 30, 2004 were voluntarily limited
as follows: U.S. Government Securities Savings at 0.45%, Near-Term Tax Free at
0.45%, Tax Free at 0.70% and All American Equity at 1.75%. The Adviser has
extended these same limitations through June 30, 2005, and until such later
date as the Adviser determines.
The Adviser has also voluntarily agreed to waive fees and/or reimburse U.S.
Treasury Securities Cash Fund and U.S. Government Securities Savings Fund to
the extend necessary to maintain the fund's yield at a certain level as
determined by the Adviser (Minimum Yield). The Adviser may recapture any fees
waived and/or expenses reimbursed within three years after the end of the
fiscal year of such waiver and/or reimbursement to the extent that such
recapture would not cause the fund's yield to fall below the Minimum Yield. For
the year ended June 30, 2004, fees waived and/or expenses reimbursed as a
result of this agreement were $45,136 and $0 for the U.S. Treasury Securities
Cash Fund and the U.S. Government Securities Savings Fund, respectively. These
amounts are recoverable by the Adviser through June 30, 2007.
United Shareholder Services, Inc. (USSI), a wholly-owned subsidiary of the
Adviser, is the transfer agent for the funds. Each fund pays an annual fee
based on its number of shareholder accounts for transfer agency services.
Certain account fees are paid directly by shareholders to the transfer agent,
which, in turn, reduces its charge to the funds. Brown Brothers Harriman & Co.
serves as the custodian,
104
NOTES TO FINANCIAL STATEMENTS June 30, 2004
fund accounting and administration service agent with a fee structure based
primarily on average net assets of the funds. Additionally, the Adviser was
reimbursed for in-house legal and internal administration services pertaining
to each fund during the year ended June 30, 2004, in the amounts of $232,967
and $32,702, respectively.
During the year ended June 30, 2004, A & B Mailers, Inc., a wholly-owned
subsidiary of the Adviser, was paid $349,501 for mailing services provided to
the funds.
The five independent Trustees receive compensation for serving on the Board.
The Chairman and members of special committees receive additional compensation.
Trustees are also reimbursed for out-of-pocket expenses incurred while
attending meetings. Frank E. Holmes receives no compensation from the funds for
serving on the Board.
NOTE 3: INVESTMENTS
Cost of purchases and proceeds from sales of long-term securities for the year
ended June 30, 2004, are summarized as follows:
FUND PURCHASES SALES
-----------------------------------------------------------------------
Near-Term Tax Free $ 4,102,807 $ 5,936,810
Tax Free 23,772,738 44,360,406
All American Equity 17,649,718 20,099,864
China Region Opportunity 54,874,186 42,405,050
Global Resources 243,068,047 157,915,375
World Precious Minerals 194,072,283 126,785,936
Gold Shares 49,765,244 50,784,733
U.S. Treasury Securities Cash and U.S. Government Securities Savings held only
short-term investments. The funds neither purchased nor sold long-term U.S.
government securities during the period.
Fair valued securities, which were primarily composed of restricted securities,
as a percentage of total investments at June 30, 2004, were 2.61% of China
Region Opportunity, 9.04% of Global Resources, 3.71% of World Precious Minerals
and 0.41% of Gold Shares.
Investments in foreign issuers as a percentage of total investments at June 30,
2004, were 75.32% of China Region Opportunity, 72.71% of Global Resources,
89.28% of World Precious Minerals and 87.43% of Gold Shares.
105
NOTES TO FINANCIAL STATEMENTS June 30, 2004
NOTE 4: TAX INFORMATION
The following table presents the income tax basis of the securities owned at
June 30, 2004, and the tax basis components of net unrealized appreciation or
depreciation:
GROSS GROSS NET UNREALIZED
AGGREGATE UNREALIZED UNREALIZED APPRECIATION
FUND TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
-----------------------------------------------------------------------------------------
U.S. Treasury Securities Cash $131,204,141 $ -- $ -- $ --
U.S. Government Securities
Savings 437,405,280 -- -- --
Near-Term Tax Free 18,348,366 231,474 (120,488) 110,986
Tax Free 28,812,870 557,881 (30,430) 527,451
All American Equity 18,253,605 2,417,797 (594,898) 1,822,899
China Region Opportunity 35,401,062 3,356,450 (3,236,797) 119,653
Global Resources 127,058,223 18,132,289 (11,794,441) 6,337,848
World Precious Minerals 218,833,106 57,321,139 (44,918,907) 12,402,232
Gold Shares 52,562,869 14,823,536 (4,523,318) 10,300,218
As of June 30, 2004, the components of distributable earnings on a tax basis
were as follows:
UNDISTRIBUTED UNDISTRIBUTED NET UNREALIZED
ORDINARY LONG-TERM APPRECIATION
FUND INCOME CAPITAL GAINS (DEPRECIATION)
----------------------------------------------------------------------------------------
U.S. Treasury Securities Cash $ -- $ -- $ --
U.S. Government Securities Savings 401,724 -- --
Near-Term Tax Free 17,154 -- 110,986
Tax Free 31,130 -- 527,451
All American Equity -- -- 1,822,898
China Region Opportunity 454,394 -- (153,764)
Global Resources 4,486,544 3,071,057 6,367,998
World Precious Minerals -- -- 11,133,072
Gold Shares 422,994 -- 10,298,837
All distributions paid during the year ended June 30, 2004, as shown on the
Statements of Changes in Net Assets, are taxable as ordinary income to
shareholders.
106
NOTES TO FINANCIAL STATEMENTS June 30, 2004
Net realized capital loss carryforwards, for federal income tax purposes, may
be used to offset current or future capital gains until expiration. The funds'
tax-basis capital gains and losses are determined only at the end of each
fiscal year. The loss carryforwards and related expiration dates for each fund,
as of June 30, 2004, are as follows:
EXPIRATION DATE
FUND 2005 2006 2007 2008
-------------------------------------------------------------------------------------
U.S. Treasury Securities Cash $ -- $ -- $ 7,529 $ 10,657
U.S. Government Securities
Savings 410,187 -- -- --
Near-Term Tax Free -- -- -- 17,590
Tax Free -- -- -- --
All American Equity -- -- -- --
China Region Opportunity 75,143 -- 2,188,607 4,657,144
Global Resources -- -- -- --
World Precious Minerals -- -- -- 4,745,337
Gold Shares 11,087,367 49,313,088 50,050,196 2,931,501
EXPIRATION DATE
FUND 2009 2010 2011 2012 TOTAL
-------------------------------------------------------------------------------------
U.S. Treasury
Securities Cash $ -- $ -- $ 285 $ -- $ 18,471
U.S. Government
Securities Savings -- -- -- 12,079 422,266
Near-Term Tax Free 59,454 -- -- 46,218 123,262
Tax Free 338,259 -- -- 90,567 428,826
All American Equity -- 347,177 1,275,741 -- 1,622,918
China Region
Opportunity 3,347,272 193,867 80,860 -- 10,542,893
Global Resources -- -- -- -- --
World Precious
Minerals 8,548,676 9,640,340 -- -- 22,934,353
Gold Shares 4,098,335 -- 1,122,291 -- 118,602,778
POST OCTOBER 31, 2003 POST OCTOBER 31, 2003
FUND CAPITAL LOSSES CURRENCY LOSS DEFERRAL
---------------------------------------------------------------------------------------
U.S. Government Securities Savings $ 389 $ --
Near-Term Tax Free 28,927 --
Tax Free 575,619 --
All American Equity -- 5,021
China Region Opportunity -- 275,680
World Precious Minerals -- 1,256,795
The amounts above, in accordance with tax rules, are deemed to have occurred on
July 1, 2004.
NOTE 5: RISKS OF CONCENTRATIONS
China Region Opportunity may be exposed to risks not typically associated with
investments in the United States, due to concentration of investments in
foreign issuers in the region. These investments present risks resulting from
disruptive
107
NOTES TO FINANCIAL STATEMENTS June 30, 2004
political or economic conditions and the potential imposition of adverse
governmental laws or currency exchange restrictions affecting the area.
The investment policies of Gold Shares and World Precious Minerals present
unique risks to their respective portfolios' values. The prices of gold and
other precious metals may be subject to fluctuations caused by international
monetary and political developments including trade or currency restrictions,
currency devaluation and revaluation, and social and political conditions
within a country. Fluctuations in the prices of gold and other precious metals
will affect the market values of the securities held by these funds.
NOTE 6: CREDIT ARRANGEMENTS
Each of the U.S. Global Investors Funds, along with other funds under common
management, has a revolving credit facility with Brown Brothers Harriman & Co.
(BBH). Borrowings of each fund are collateralized by any or all of the
securities held by BBH as the fund's custodian. Interest on borrowings is
charged at the current overnight Federal Funds Rate plus 2%. Each fund has a
maximum borrowing limit of 10% of qualified assets. The aggregate borrowings by
all the funds under the agreement cannot exceed $10,000,000 at any one time.
There were no borrowings under the revolving credit facility at June 30, 2004.
NOTE 7: SHARES OF BENEFICIAL INTEREST
At June 30, 2004, individual shareholders holding more than 5% of outstanding
shares comprised 6.60% of the Near-Term Tax Free Fund and 35.97% of the Tax
Free Fund.
108
FINANCIAL HIGHLIGHTS
U.S. TREASURY SECURITIES CASH FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2004 2003 2002 2001 2000
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
- ----------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income --(a) .01 .01 .05 .04
Net realized and unrealized gain -- -- -- -- --
-------- -------- -------- -------- --------
Total from investment activities --(a) .01 .01 .05 .04
-------- -------- -------- -------- --------
Distributions from net investment income --(a) (.01) (.01) (.05) (.04)
- ----------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (b) .08% .57% 1.43% 4.59% 4.49%
Ratios to Average Net Assets (c):
Net investment income .07% .52% 1.43% 4.62% 4.33%
Total expenses 1.00% .97% 1.00% 1.06% 1.04%
Expenses reimbursed or offset (.04)% -- -- -- --
Net expenses .96% .97% 1.00% 1.06% 1.04%
Net assets, end of year (in thousands) $112,575 $123,879 $134,930 $130,832 $137,172
U.S. GOVERNMENT SECURITIES SAVINGS FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2004 2003 2002 2001 2000
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
- ----------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income .01 .01 .02 .05 .05
Net realized and unrealized gain -- -- -- -- --
-------- -------- -------- -------- --------
Total from investment activities .01 .01 .02 .05 .05
-------- -------- -------- -------- --------
Distributions from net investment income (.01) (.01) (.02) (.05) (.05)
- ----------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (b) .63% 1.09% 2.20% 5.42% 5.44%
Ratios to Average Net Assets (c):
Net investment income .61% 1.08% 2.20% 5.41% 5.26%
Total expenses .65% .61% .59% .60% .60%
Expenses reimbursed or offset (.20)% (.16)% (.14)% (.20)% (.20)%
Net expenses .45% .45% .45% .40% .40%
Net assets, end of year (in thousands) $441,722 $529,829 $691,843 $782,242 $755,140
<FN>
(a) The per share amount does not round to a full penny.
(b) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
(c) Expenses reimbursed or offset reflect reductions to total expenses, as
discussed in the notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions not occurred.
See accompanying notes to financial statements.
</FN>
109
FINANCIAL HIGHLIGHTS
NEAR-TERM TAX FREE FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2004 2003 2002 2001 2000
NET ASSET VALUE, BEGINNING OF YEAR $11.14 $10.81 $10.61 $10.31 $10.47
- ------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income .31 .32 .40 .43 .44
Net realized and unrealized gain (loss) (.29) .32 .19 .30 (.17)
------- ------- ------ ------ ------
Total from investment activities .02 .64 .59 .73 .27
------- ------- ------ ------ ------
Distributions from net investment income (.30) (.31) (.39) (.43) (.43)
- ------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $10.86 $11.14 $10.81 $10.61 $10.31
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (a) .20% 5.97% 5.65% 7.21% 2.65%
Ratios to Average Net Assets (b):
Net investment income 2.73% 2.83% 3.73% 4.15% 4.10%
Total expenses 1.25% 1.44% 2.63% 2.72% 2.45%
Expenses reimbursed or offset (.80)% (.94)% (2.01)% (2.02)% (1.75)%
Net expenses .45% .50% .62% .70% .70%
Portfolio turnover rate 21% 20% 19% 23% 24%
Net assets, end of year (in thousands) $18,673 $21,979 $9,752 $6,035 $5,222
TAX FREE FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2004 2003 2002 2001 2000
NET ASSET VALUE, BEGINNING OF YEAR $12.65 $12.18 $11.95 $11.38 $11.80
- -----------------------------------------------------------------------------------------------------
Investment Activities
Net investment income .43 .42 .50 .53 .56
Net realized and unrealized gain (loss) (.58) .48 .23 .57 (.39)
------- ------- ------- ------- -------
Total from investment activities (.15) .90 .73 1.10 .17
------- ------- ------- ------- -------
Distributions
From net investment income (.42) (.43) (.50) (.53) (.55)
From net realized gains -- -- -- -- (.04)
------- ------- ------- ------- -------
Total distributions (.42) (.43) (.50) (.53) (.59)
- -----------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $12.08 $12.65 $12.18 $11.95 $11.38
- -----------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (a) (1.25)% 7.49% 6.18% 9.81% 1.57%
Ratios to Average Net Assets (b):
Net investment income 3.22% 3.34% 4.13% 4.50% 4.80%
Total expenses 1.09% 1.22% 1.56% 1.53% 1.53%
Expenses reimbursed or offset (.39)% (.52)% (.86)% (.83)% (.83)%
Net expenses .70% .70% .70% .70% .70%
Portfolio turnover rate 54% 26% 22% 19% 16%
Net assets, end of year (in thousands) $28,167 $55,283 $21,698 $20,248 $18,380
<FN>
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
(b) Expenses reimbursed or offset reflect reductions to total expenses, as
discussed in the notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions not occurred.
See accompanying notes to financial statements.
</FN>
110
FINANCIAL HIGHLIGHTS
ALL AMERICAN EQUITY FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2004 2003 2002 2001 2000
NET ASSET VALUE, BEGINNING OF YEAR $19.15 $21.20 $25.44 $45.18 $44.78
- -----------------------------------------------------------------------------------------------------
Investment Activities
Net investment income (loss) (.11) (.03) (.03) .08 .33
Net realized and unrealized gain (loss) 3.49 (2.02) (4.20) (11.42) .90
------- ------- ------- ------- -------
Total from investment activities 3.38 (2.05) (4.23) (11.34) 1.23
------- ------- ------- ------- -------
Distributions
From net investment income -- -- (.01) (.08) (.33)
From net realized gains -- -- -- (8.32) (.50)
------- ------- ------- ------- -------
Total distributions -- -- (.01) (8.40) (.83)
- -----------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $22.53 $19.15 $21.20 $25.44 $45.18
- -----------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (a) 17.65% (9.67)% (16.62)% (27.96)% 2.72%
Ratios to Average Net Assets (b):
Net investment income (loss) (.49)% (.12)% (.12)% .25% .28%
Total expenses 2.31% 2.56% 2.19% 1.69% 1.53%
Expenses reimbursed or offset (.56)% (1.06)% (.73)% (.69)% (.53)%
Net expenses 1.75% 1.50% 1.46% 1.00% 1.00%
Portfolio turnover rate 96% 119% 75% 85% 21%
Net assets, end of year (in thousands) $19,974 $18,334 $20,713 $26,942 $44,038
CHINA REGION OPPORTUNITY FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2004 2003 2002 2001 2000
NET ASSET VALUE, BEGINNING OF YEAR $4.17 $4.38 $4.92 $6.11 $5.58
- -----------------------------------------------------------------------------------------------------
Investment Activities
Net investment income (loss) --* (.02) (.04) (.04) (.02)
Net realized and unrealized gain (loss) 1.74 (.19) (.50) (1.09) .55
------- ------- ------- ------- -------
Total from investment activities 1.74 (.21) (.54) (1.13) .53
------- ------- ------- ------- -------
Distributions
From net investment income (.05) -- -- (.06) --
------- ------- ------- ------- -------
Total distributions (.05) -- -- (.06) --
- -----------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $5.86 $4.17 $4.38 $4.92 $6.11
- -----------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (a) 41.63% (4.79)% (10.98)% (18.45)% 9.50%
Ratios to Average Net Assets (b):
Net investment income (loss) .05% (.60)% (.83)% (.56)% (.40)%
Total expenses 2.25% 3.91% 3.54% 3.04% 3.10%
Expenses reimbursed or offset (c) -- -- -- -- --
Net expenses 2.25% 3.91% 3.54% 3.04% 3.10%
Portfolio turnover rate 126% 44% 29% 4% 40%
Net assets, end of year (in thousands) $35,090 $12,815 $12,003 $15,123 $21,273
<FN>
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
(b) Expenses reimbursed or offset reflect reductions to total expenses, as
discussed in the notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions not occurred.
(c) Ratio does not round to 0.01%.
* Based on average monthly shares outstanding.
See accompanying notes to financial statements.
</FN>
111
FINANCIAL HIGHLIGHTS
GLOBAL RESOURCES FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2004 2003 2002 2001 2000
NET ASSET VALUE, BEGINNING OF YEAR $5.14 $4.93 $4.01 $3.88 $4.01
- -----------------------------------------------------------------------------------------------------
Investment Activities
Net investment income (loss) .12 (.05) (.06) (.06) (.08)
Net realized and unrealized gain (loss) 3.26 .35 .98 .19 (.05)
-------- ------- ------- ------- -------
Total from investment activities 3.38 .30 .92 .13 (.13)
-------- ------- ------- ------- -------
Distributions
From net investment income (.13) (.09) -- -- --
From net realized gains -- -- -- -- --
-------- ------- ------- ------- -------
Total distributions (.13) (.09) -- -- --
- -----------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $8.39 $5.14 $4.93 $4.01 $3.88
- -----------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (a) 65.73% 6.43% 22.94% 3.35% (3.24)%
Ratios to Average Net Assets (b):
Net investment income (loss) .74% (1.38)% (1.57)% (1.47)% (1.87)%
Total expenses 1.54% 3.75% 3.83% 3.61% 3.79%
Expenses reimbursed or offset (c) -- -- -- -- --
Net expenses 1.54% 3.75% 3.83% 3.61% 3.79%
Portfolio turnover rate 140% 101% 96% 65% 55%
Net assets, end of year (in thousands) $135,574 $14,884 $14,900 $11,887 $13,530
WORLD PRECIOUS MINERALS FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2004 2003 2002 2001 2000
NET ASSET VALUE, BEGINNING OF YEAR $9.75 $10.43 $5.28 $6.43 $7.79
- ------------------------------------------------------------------------------------------------------
Investment Activities
Net investment loss (.17)* (.05) (.07) (.10) (.01)
Net realized and unrealized gain (loss) 5.96 (.38) 5.22 (1.03) (1.35)
-------- -------- ------- ------- --------
Total from investment activities 5.79 (.43) 5.15 (1.13) (1.36)
-------- -------- ------- ------- --------
Distributions
From net investment income (1.86) (.25) -- (.02) --
-------- -------- ------- ------- --------
Total distributions (1.86) (.25) -- (.02) --
- ------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $13.68 $9.75 $10.43 $5.28 $6.43
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (a) 57.42% (4.02)% 97.54% (17.54)% (17.46)%
Ratios to Average Net Assets (b):
Net investment loss (1.15)% (1.36)% (1.32)% (1.51)% (1.41)%
Total expenses 1.47% 1.92% 2.27% 2.86% 2.50%
Expenses reimbursed or offset (c) -- -- -- -- --
Net expenses 1.47% 1.92% 2.27% 2.86% 2.50%
Portfolio turnover rate 65% 141% 104% 68% 93%
Net assets, end of year (in thousands) $246,852 $107,212 $97,044 $42,455 $57,019
<FN>
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
(b) Expenses reimbursed or offset reflect reductions to total expenses, as
discussed in the notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions not occurred.
(c) Ratio does not round to 0.01%.
* Based on average monthly shares outstanding.
See accompanying notes to financial statements.
</FN>
112
FINANCIAL HIGHLIGHTS
GOLD SHARES FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2004 2003 2002 2001 2000
NET ASSET VALUE, BEGINNING OF YEAR $5.18 $5.28 $2.83 $2.92 $3.42
- ------------------------------------------------------------------------------------------------------
Investment Activities
Net investment loss (.10) (.10) (.06) (.09) (.15)
Net realized and unrealized gain (loss) 1.95 -- 2.51 -- (.35)
------- ------- ------- ------- -------
Total from investment activities 1.85 (.10) 2.45 (.09) (.50)
------- ------- ------- ------- -------
Distributions
From net investment income (.03) -- -- -- --
------- ------- ------- ------- -------
Total distributions (.03) -- -- -- --
- ------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $7.00 $5.18 $5.28 $2.83 $2.92
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (a) 35.57% (1.89)% 86.57% (3.08)% (14.62)%
Ratios to Average Net Assets (b):
Net investment loss (1.45)% (1.98)% (1.99)% (2.93)% (3.98)%
Total expenses 1.93% 2.64% 3.57% 5.79% 5.74%
Expenses reimbursed or offset (c) -- -- -- -- --
Net expenses 1.93% 2.64% 3.57% 5.79% 5.74%
Portfolio turnover rate 85% 138% 164% 95% 82%
Net assets, end of year (in thousands) $66,732 $45,720 $52,911 $22,231 $25,836
<FN>
(a) Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
(b) Expenses reimbursed or offset reflect reductions to total expenses, as
discussed in the notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions not occurred.
(c) Ratio does not round to 0.01%.
See accompanying notes to financial statements.
</FN>
113
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Trustees and Shareholders
of U.S. Global Investors Funds:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the U.S. Treasury Securities Cash Fund, U.S.
Government Securities Savings Fund, Near-Term Tax Free Fund, Tax Free Fund, All
American Equity Fund, China Region Opportunity Fund, Global Resources Fund,
World Precious Minerals Fund and Gold Shares Fund (collectively, the "Funds"),
each a portfolio of U.S. Global Investors Funds (Trust) as of June 30, 2004, and
the related statements of operations for the year then ended, and the statements
of changes in net assets for the two-year period then ended and financial
highlights for each of the years in the three-year period then ended. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for each of the years in the two-year period ended June 30, 2001 were
audited by other auditors whose report dated August 16, 2001 expressed an
unqualified opinion.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and 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 June 30, 2004, by correspondence with the custodian and
brokers or by other appropriate auditing procedures where replies from brokers
were not received. 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 financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective funds constituting U.S. Global Investors Funds, as of June 30,
2004, and the results of their operations, the changes in their net assets and
financial highlights for the periods described above, in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
Boston, Massachusetts
August 19, 2004
114
TRUSTEES AND OFFICERS (UNAUDITED) June 30, 2004
The following table presents information about the Trustees as of June 30, 2004,
together with a brief description of their principal occupations during the last
five years. The Trustees do not serve a specified term of office. Each Trustee
will hold office until the termination of the Trust or his earlier death,
resignation, retirement, incapacity or removal. The retirement age for Trustees
ranges from 65 to 70. If you would like more information about the Trustees, you
may call 1-800-US-FUNDS (1-800-873-8637) to request a free copy of the Statement
of Additional Information.
NON-INTERESTED TRUSTEES
NAME (AGE)
ADDRESS
POSITIONS HELD WITH TRUST
LENGTH OF TIME SERVED
NUMBER OF PORTFOLIOS IN FUND PRINCIPAL OCCUPATION(S) AND PREVIOUS POSITIONS
COMPLEX OVERSEEN BY TRUSTEE DURING PAST 5 YEARS AND OTHER DIRECTORSHIPS HELD
- ---------------------------------------------------------------------------------
James F. Gaertner (61) PRINCIPAL OCCUPATION: President of Sam Houston
7900 Callaghan Road State University from August 2001 to present.
San Antonio, TX 78229 Chairman of the Board of Directors of Tandy
Trustee Brands Accessories, Inc. from October 1997 to
November 2002 to present present. Dean and Professor of Accounting,
Nine portfolios College of Business, University of Texas at San
Antonio from September 1987 to June 2000.
- ---------------------------------------------------------------------------------
E. Douglas Hodo (69) PRINCIPAL OCCUPATION: Chief Executive Officer of 7900
Callaghan Road Houston Baptist University from 1987 to
San Antonio, TX 78229 present.
Trustee OTHER DIRECTORSHIPS HELD: Director of Stewart
1981 to present Information Services, Inc. from 1989 to present.
Nine portfolios
- ---------------------------------------------------------------------------------
Clark R. Mandigo (61) PRINCIPAL OCCUPATION: Restaurant operator,
7900 Callaghan Road business consultant from 1991 to present.
San Antonio, TX 78229 OTHER DIRECTORSHIPS HELD: Director of Lone Star
Trustee Steakhouse & Saloon, Inc. from 1992 to present
1998 to present and Horizon Organic Holding Corporation from
Twelve portfolios 1996 to January 2004.
- ---------------------------------------------------------------------------------
Walter W. McAllister, III (62) OTHER DIRECTORSHIPS HELD: Director, Texas
7900 Callaghan Road Capital Banc Shares, Inc. from 1999 to present.
San Antonio, TX 78229 Chairman of the Board of Directors of Texas
Trustee Insurance Agency, Inc. from 1981 to 2000.
1998 to present Chairman of the Board of Directors of Bomac
Nine portfolios Sports Limited d.b.a. SA Sports Unlimited from
December 1995 to 2000.
- ---------------------------------------------------------------------------------
Willem C.J. van Rensburg (65) PRINCIPAL OCCUPATION: Professor of Geological
7900 Callaghan Road Science and Petroleum Engineering, University of
San Antonio, TX 78229 Texas at Austin from September 1981 to present.
Trustee
1978 to present
Nine portfolios
- ---------------------------------------------------------------------------------
115
TRUSTEES AND OFFICERS (UNAUDITED) June 30, 2004
INTERESTED TRUSTEE
NAME (AGE)
ADDRESS
POSITIONS HELD WITH TRUST
LENGTH OF TIME SERVED
NUMBER OF PORTFOLIOS IN FUND PRINCIPAL OCCUPATION(S) AND PREVIOUS POSITIONS
COMPLEX OVERSEEN BY TRUSTEE DURING PAST 5 YEARS AND OTHER DIRECTORSHIPS HELD
- ---------------------------------------------------------------------------------
Frank Holmes* (49) PRINCIPAL OCCUPATION: Chairman of the Board of
7900 Callaghan Road Directors, Chief Executive Officer, and Chief
San Antonio, TX 78229 Investment Officer of the Adviser. Since October
Trustee, Chief Executive 1989, Mr. Holmes has served and continues to
Officer, Chief Investment serve in various positions with the Adviser, its
Officer, President subsidiaries, and the investment companies it
1989 to present sponsors.
Twelve portfolios OTHER DIRECTORSHIPS HELD: Director of 71316
Ontario, Inc. from April 1987 to present and of
F. E. Holmes Organization, Inc. from July 1978
to present. Director of Franc-Or Resources Corp.
from November 1994 to November 1996 and from
June 2000 to November 2003. Chairman of the
Board of Directors of Consolidated Fortress
Resources, Inc. from November 2000 to November
2003. Director of Broadband Collaborative
Solutions from May 2000 to June 2002.
- ---------------------------------------------------------------------------------
<FN>
*Mr. Holmes is an "interested person" of the Trust by virtue of his positions
with U.S. Global Investors, Inc.
</FN>
116
TRUSTEES AND OFFICERS (UNAUDITED) June 30, 2004
The following table presents information about each Officer of the Trust as of
June 30, 2004, together with a brief description of their principal occupations
during the last five years. Each holds office until his or her successor is duly
elected and qualified.
OFFICERS
NAME (AGE)
ADDRESS
POSITIONS HELD WITH TRUST
LENGTH OF TIME SERVED PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
================================================================================
Frank Holmes (49) Chairman of the Board of Directors, Chief
7900 Callaghan Road Executive Officer, and Chief Investment Officer
San Antonio, TX 78229 of the Adviser. Since October 1989, Mr. Holmes
Trustee, Chief Executive has served and continues to serve in various
Officer, Chief Investment positions with the Adviser, its subsidiaries,
Officer, President and the investment companies it sponsors.
1989 to present
- --------------------------------------------------------------------------------
Susan McGee (45) President and General Counsel of the Adviser.
7900 Callaghan Road Since September 1992, Ms. McGee has served and
San Antonio, TX 78229 continues to serve in various positions with
Executive Vice President, the Adviser, its subsidiaries, and the
Secretary, General Counsel investment companies it sponsors.
1997 to present
- --------------------------------------------------------------------------------
Tracy C. Peterson (32) Chief Financial Officer of the Adviser. From
7900 Callaghan Road 1996 to July 2004, Mr. Peterson served in
San Antonio, TX 78229 various positions with the Adviser, its
Treasurer subsidiaries, and the investment companies it
1998 to July 2004 sponsors.
================================================================================
117
ADDITIONAL INFORMATION (UNAUDITED)
ADDITIONAL FEDERAL TAX INFORMATION
The percentage of tax-exempt dividends paid by the funds for the year ended
June 30, 2004, was:
Near-Term Tax Free 96.59%
Tax Free 96.94%
The percentage of ordinary income dividends paid by the funds during the year
ended June 30, 2004, which qualify for the Dividends Received Deduction
available to corporate shareholders was:
China Region Opportunity .29%
Global Resources 14.64%
World Precious Minerals .47%
Gold Shares 23.29%
In January 2005, the funds will report on Form 1099-DIV the tax status of all
distributions made during the calendar year 2004. The funds intend to
distribute the maximum amount of qualified dividend income allowable. The
amount of qualified dividend income distributed by each fund will be reported
to shareholders on their Form 1099-DIV. Shareholders should use the information
on Form 1099-DIV for their income tax returns.
PROXY VOTING
A description of the policies and procedures that the funds use to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling 1-800-US-FUNDS (1-800-873-8637). It also
appears in the funds' Statement of Additional Information (Form 485B), which
can be found on the SEC's website at www.sec.gov.
Information regarding how the funds voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30 is available
without charge, upon request, by calling 1-800-US-FUNDS (1-800-873-8637) or
accessing the funds Form N-PX, after August 31, 2004, on the SEC's website at
www.sec.gov.
118
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ITEM 2. CODE OF ETHICS.
As of the end of the period covered on this report, the registrant has adopted a
code of ethics that applies to its principal executive officer and principal
financial officer. A copy of the registrant's code of ethics is filed herewith
as Exhibit 11(a)(1).
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Trustees has determined that the registrant has at
least four "audit committee financial experts" serving on its audit committee:
Dr. James F. Gaertner, Dr. E. Douglas Hodo, Mr. Clark R. Mandigo, and Mr. Walter
W. McAllister, III are "independent" (as defined in Item 3 of Form N-CSR.)
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(A) AUDIT FEES
The aggregate fees billed to the registrant for professional services rendered
by the registrant's principal accountant for the audit of the registrant's
annual financial statements or for services that are normally provided by the
accountant in connection with statutory or regulatory filings or engagements
were $154,000 and $147,000 for the fiscal years ended June 30, 2004 and 2003,
respectively.
(B) AUDIT-RELATED FEES
The aggregate fees billed for assurance and related services by the registrant's
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under paragraph
(a) of this Item were $36,368 and $30,751 for the fiscal years ended June 30,
2004 and 2003, respectively. These fees related to the issuance of a report on
internal controls.
(C) TAX FEES
The aggregate fees billed for professional services rendered by the registrant's
principal accountant for tax compliance, tax advice and tax planning were
$25,450 and $21,900 for the fiscal years ended June 30, 2004 and 2003,
respectively. The nature of the services comprising the tax fees included the
review of the registrant's income and excise tax returns and distribution
requirements.
(D) ALL OTHER FEES
There were no other fees during the fiscal years ended June 30, 2004 and 2003
billed to the registrant.
(E)(1) The registrant's audit committee is directly responsible for approving
the services to be provided by the auditors, including approval in advance
of audit and non-audit services at regularly scheduled audit committee
meetings. If non-audit services are required between regularly scheduled
audit committee meetings, approval may be authorized by the chairman of the
audit committee with prompt notification of other audit committee members
and ratification at the next scheduled audit committee meeting, provided
the fees for such services amount to no more than 5 percent of the annual
audit fees for the registrant. Waiver of pre-approval for audit or
non-audit services requiring fees of a de minimis amount is not permitted.
(2) No services included in (b) - (d) above were approved pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(F) Less than 50 percent of the hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year were attributed to work performed by persons other than
the principal accountant's full-time, permanent employees.
(G) The aggregate fees billed by the registrant's principal accountant for
non-audit services rendered to the registrant, its investment adviser, and
any entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant were
$75,150 and $54,900 for the fiscal years ended June 30, 2004 and 2003,
respectively.
(H) All non-audit services rendered in (g) above were considered by the
registrant's audit committee in maintaining the principal accountant's
independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable. The complete schedule of investments is included in Item 1 of
this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 10. CONTROLS AND PROCEDURES.
1. The registrant's president and treasurer have determined that the
registrant's disclosure controls and procedures are effective based on
their evaluation of the disclosure controls and procedures as of a date
within 90 days of the filing date of this report.
2. There was no change in the registrant's internal control over financial
reporting that occurred in the registrant's second fiscal half-year that
has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 11. EXHIBITS.
(a)(1) Code of ethics that is subject to the disclosure of Item 2 hereof
(a)(2) Certifications of principal executive officer and principal financial
officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(a)(3) Not applicable
(b) Certifications of principal executive officer and principal financial
officer of the registrant as required by Rule 30a-2 under the Investment
Company Act of 1940
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
U.S. GLOBAL INVESTORS FUNDS
By:/s/Frank E. Holmes
------------------
Frank E. Holmes
President, Chief Executive Officer
Date: September 2, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By:/s/Frank E. Holmes
------------------
Frank E. Holmes
President, Chief Executive Officer
Date: September 2, 2004
By:/s/Catherine A. Rademacher
--------------------------
Catherine A. Rademacher
Chief Financial Officer
Date: September 2, 2004
EXHIBIT INDEX
(a)(1) Code of ethics that is subject to the disclosure of Item 2 hereof
(a)(2) Certifications of principal executive officer and principal financial
officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(a)(3) Not applicable
(b) Certifications of principal executive officer and principal financial
officer of the registrant as required by Rule 30a-2 under the Investment
Company Act of 1940