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, 2006
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL REPORT
JUNE 30, 2006
TABLE OF CONTENTS
LETTER TO SHAREHOLDERS 1
MANAGEMENT TEAMS' PERSPECTIVES 8
EXPENSE EXAMPLE 40
PORTFOLIOS OF INVESTMENTS 42
NOTES TO PORTFOLIOS OF INVESTMENTS 88
STATEMENTS OF ASSETS AND LIABILITIES 92
STATEMENTS OF OPERATIONS 96
STATEMENTS OF CHANGES IN NET ASSETS 100
NOTES TO FINANCIAL STATEMENTS 106
FINANCIAL HIGHLIGHTS 116
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM 121
TRUSTEES AND OFFICERS 122
ADDITIONAL INFORMATION 125
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
It has been another good year for the U.S. Global [PHOTO]
Investors Funds, and we thank you for the
confidence you have placed in us. We work hard
every day to keep that confidence.
Naturally, past performance is no guarantee of
future results. We will, however, work with
passion to capture opportunities and manage risks with our matrix of
investment models.
Our goal is to keep all of our funds in the top half of their peer
group on a consistent basis. The wind continues to hit our sails,
and this is important for performance, but we have also built a
sturdy boat and have a well-trained crew. Our team-based approach,
which integrates qualitative analysis and quantitative processes,
has helped us attain our performance leadership.
Three of the five Investors Funds' equity funds are ranked by Lipper
in the nation's top 50 mutual funds in total return for the year
ended June 30, 2006. When you look at the last five years, the news
is even more dramatic - three of the Investor Funds are in the top
five, and one of those funds is also on the top-performing list for
the 10-year period.
The Gold Shares Fund (USERX) has continued its strong performance by
posting a 104.2 percent total return for the year ended June 30,
2006, making it #2 among all funds as ranked by Lipper. For the
five-year period, Gold Shares' 41.0 percent annualized return ranks
it #3 out of more than 7,300 domestic funds in the time period. The
Gold Shares Fund ranked 2 out of 54, 2 out of 48, 2 out of 39, and
23 out of 24 gold-oriented funds for total return for the one-,
three-, five- and ten-year periods ended June 30, 2006.
The World Precious Minerals Fund (UNWPX), also gold-oriented, joins
Gold Shares at the top of the charts. The fund gained 96.2 percent
for the one year ended June 30, 2006, according to Lipper, which
ranked it third among all domestic funds for that period in total
return. For the five-year period, the World Precious Minerals Fund
is the #1 overall performer with an annualized total return of 46.8
percent. The World Precious Minerals Fund ranked 3 out of 54, 1 out
of 48, 1 out of 39, and 14 out of 24 gold oriented funds for total
return for the one-, three-, five- and ten-year periods ended June
30, 2006.
These funds are not a flash in the pan, as many skeptics pronounced
when gold's rally began. Of course, the Gold Shares and World
Precious Minerals Funds have benefited from the upsurge in prices,
but the funds'
1
U.S. GLOBAL INVESTORS FUND
strategies have enabled them to significantly outperform the S&P 500
and their gold-sector peers since mid-2001.
[Five-Year Total Return Comparison as of 6/30/06 graph]
Source: Big Charts
Our Global Resources Fund (PSPFX) had another stellar year. The
fund, which invests in energy, metals and other natural resources,
was the top-performing fund in its sector for the first six months
of 2006, as well as for the five-year period ended June 30, 2006,
according to Lipper. The fund is also ranked #5 among all domestic
funds in total returns for the five-year period, and its consistent
returns have earned the Global Resources Fund a spot among the top
50 overall funds for the ten-year period. The Global Resources Fund
ranked 16 out of 101, 1 out of 74, 1 out of 69, and 12 out of 29
natural resources funds for total return for the one-, three-, five-
and ten-year periods ended June 30, 2006. Investors have recognized
the quality of the Global Resources Fund, helping the fund to grow
to more than $1.2 billion in assets at June 30, 2006.
2
U.S. GLOBAL INVESTORS FUND
TOTAL ANNUALIZED RETURN AS OF 6/30/06
- ---------------------------------------------------------------------------------------
FUND/TICKER ONE-YEAR THREE-YEAR FIVE-YEAR TEN-YEAR
Gold Shares Fund (USERX) 104.15% 44.97% 41.02% (0.85%)
World Precious Minerals 96.21% 53.18% 46.79% 6.27%
Fund (UNWPX)
Global Resources 48.91% 58.06% 38.89% 15.27%
Fund (PSPFX)
S&P 500 Index 8.63% 11.21% 2.49% 8.31%
Philadelphia Stock 56.14% 23.62% 23.59% 2.93%
Exchange Gold and
Silver Index (XAU)
- ---------------------------------------------------------------------------------------
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. Performance does not include the effect
of any fees described in the fund's prospectus (e.g. short-term trading fees)
which, if applicable, would lower your total returns. Obtain performance data
current to the most recent month-end at www.usfunds.com or 1-800-US-FUNDS,
option 5. Please keep in mind that high double-digit returns are highly unusual
and cannot be sustained. Recent returns were achieved during favorable market
conditions, especially within the gold and natural resources sectors.
The China Region Opportunity Fund (USCOX) turned in strong
performance during the past year, despite struggling in the final
quarter. The fund's 30.0 percent total return for the one year ended
June 30, 2006, placed it in the top half of China region funds
according to Lipper. This fund has an outstanding track record in
recent years. It ranks #1 in its sector for the latest three-year
period and in the top handful over five years. The China region
Opportunity Fund ranked 19 out of 38, 1 out of 22, 7 out of 22, and
3 out of 7 China region funds for total return for the one-, three-,
five- and ten-year periods ended June 30, 2006.
The All American Equity Fund (GBTFX) has done very well compared to
its peers in the large-cap sector. The fund's 15.3 percent return
for the year ended June 30, 2006, ranks it in the top 3 percent of
funds in that sector, which did not perform as well as the
commodities, energy and emerging markets sectors over that time
period. The All American Equity Fund ranked 26 out of 848, 43 out of
725, 201 out of 609, and 190 out of 241 large-cap core funds for
total return for the one-, three-, five- and ten-year periods ended
June 30, 2006.
3
U.S. GLOBAL INVESTORS FUND
TOTAL ANNUALIZED RETURN AS OF 6/30/06
- -------------------------------------------------------------------------------------------
FUND/TICKER ONE-YEAR THREE-YEAR FIVE-YEAR TEN-YEAR
China Region Opportunity 30.03% 30.21% 13.36% 4.00%
Fund (USCOX)
All American Equity 15.25% 13.76% 2.09% 5.25%
Fund (GBTFX)
- -------------------------------------------------------------------------------------------
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. Performance does not include the effect
of any fees described in the fund's prospectus (e.g. short-term trading fees)
which, if applicable, would lower your total returns. Obtain performance data
current to the most recent month-end at www.usfunds.com or 1-800-US-FUNDS,
option 5. Please keep in mind that high double-digit returns are highly unusual
and cannot be sustained. Recent returns were achieved during favorable market
conditions, especially within the China sector.
And finally, U.S. Global Investors Fund's bond and money market
funds generally fared well against their peers. The Federal Reserve
raised interest rates by 2 percent during the past year, driving up
yields for the U.S. Government Securities Savings Fund (UGSXX) and
the U.S. Treasury Securities Cash Fund (USTXX). Conditions were
tougher for our municipal bond funds, the Tax Free Fund (USUTX) and
the Near-Term Tax Free Fund (NEARX), due to higher long-term yields
spurred by rising interest rates.
TOTAL ANNUALIZED RETURN AS OF 6/30/06
- -------------------------------------------------------------------------------------------
FUND/TICKER ONE-YEAR THREE-YEAR FIVE-YEAR TEN-YEAR
U.S. Government Securities 3.69% 2.00% 1.86% 3.57%
Savings Fund (UGSXX)
U.S. Treasury Securities 3.11% 1.42% 1.26% 2.82%
Cash Fund (USTXX)
Near-Term Tax Free 0.75% 1.22% 3.03% 3.91%
Fund (NEARX)
Tax-Free Fund (USUTX) 1.30% 1.90% 3.84% 4.73%
- -------------------------------------------------------------------------------------------
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. Performance does not include the effect
of any fees described in the fund's prospectus (e.g. short-term trading fees)
which, if applicable, would lower your total returns. Obtain performance data
current to the most recent month-end at www.usfunds.com or 1-800-US-FUNDS,
option 5.
We believe we are in the middle stage of a secular bull market for
commodities, though there continue to be periods of great
volatility. We work to manage that volatility with our quantitative
models.
4
U.S. GLOBAL INVESTORS FUND
In the spring of 2006, as money flooded into the commodities sector,
we spotted the inevitable correction early and amassed large cash
positions in our resource-based funds, in some cases more than 30
percent. That helped us in two ways. Our funds dipped during the
correction, but not as much as their peers that were more fully
invested. We also had a ready supply of cash to take advantage of
buying opportunities.
Asia's rapid growth is driving this secular bull market for
commodities. Its 3 billion people now consume about 20 million
barrels of oil daily, while 300 million Americans consume 22 million
barrels per day. The difference is that Asia has been growing at 6
percent per year, twice the U.S. rate. Since 2000 there have not
been enough new discoveries of oil, gas and precious metals to meet
Asia's demand as it builds infrastructure.
Since commodities are priced in dollars, volatility for gold and
other natural resources is exaggerated by swings in the dollar's
value. As you can see from the graph below, most of the time gold
performs well when the dollar is struggling, and vice versa. In May
2006, gold was unusually strong and the dollar was unusually weak,
which according to our models indicated a high probability for the
power of mean reversion to take place. That's when overextended
prices revert back to their long-term average.
[Gold price vs. Dollar 60-day oscillator graph]
We believe that gold and natural resource markets will continue to
offer exceptional opportunities to investors. We always remind
investors, however, that it's important to diversify between various
asset classes and to rebalance portfolios at least once a year.
As optimistic as we are, I have seen some global risk issues that
can impact business. Each Monday, we track government policies for
the G-7 and the E-7 to discover new opportunities and risks. The E-7
are the largest emerging economies for which consistent data is
available: China, India, Russia, Brazil, Pakistan, Indonesia and
Mexico. We also rely on a SWOT process to analyze the strengths and
weaknesses of these policies, along with the opportunities and
threats they present.
5
U.S. GLOBAL INVESTORS FUND
We have seen several governments in developing countries begin to
change policies toward international mining companies. These changes
include harsh taxation and efforts to override previous agreements
on natural resource projects. In other countries, including Germany,
we are seeing anti-American feelings that could hurt sales of our
mighty multinational firms.
Foreign direct investment in the United States is an important component of
our economy that is threatened by the reach of regulators in Washington. The
Sarbanes-Oxley Act has now been extended to foreign companies listed on U.S.
exchanges, and we are seeing signs that this may be hurting U.S. capital
markets. A number of companies are opting to delist from the U.S. exchanges
because the cost of compliance is so onerous. Last year, 19 U.S.-based
companies went public on the London Stock Exchange, as did many others that
might have come to America if not for the regulatory burden and costs.
Trying to subject the world to American laws such as Sarbanes-Oxley
brings to mind the "Law of Unintended Consequences." Good intentions
when drafting federal policies can backfire when policymakers have
not thoroughly analyszed the complexities of the industries or
issues they are trying to address.
The potential threat for the future is growing resentment of the
U.S. government's application of our laws overseas. Such actions
could be perceived as arrogant outside America, and could hurt our
economy by closing off overseas markets to American businesses and
blocking access to natural resources.
How important are international markets to U.S. businesses?
According to figures from the ISI Group, foreign sales account for
more than half of the total sales of companies in the S&P 500's
energy and technology sectors. For the S&P 500 as a whole, foreign
sales are more than a third of total sales.
U.S. Global Investors prides itself on being a reliable source of
information for its shareholders on market cycles, global trends and
the benefits of diversification, mean reversion and rebalancing. We
are always working to educate our shareholders about the critical
drivers that influence the various asset classes. You may wish to
take a moment to visit www.usfunds.com to sign up for our Investor
Alert, a weekly SWOT analysis of key market sectors.
6
U.S. GLOBAL INVESTORS FUND
Again, thank you for investing with us.
Sincerely,
/s/ Frank Holmes
Frank E. Holmes
CEO and Chief Investment Officer
U.S. Global Investors, Inc.
Please consider carefully the fund's investment objectives, risks,
charges and expenses. For this and other important information,
obtain a fund prospectus by visiting www.usfunds.com or by calling
1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing.
Distributed by U.S. Global Brokerage, Inc. An investment in a money
market fund is neither insured nor guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the
fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund.
Foreign and emerging market investing involves special risks such as
currency fluctuation and less public disclosure, as well as economic
and political risk. 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. Diversification does not protect an investor from
market risks and does not assure a profit. The Philadelphia Stock
Exchange Gold and Silver Index (XAU) is a capitalization-weighted
index that includes the leading companies involved in the mining of
gold and silver. The S&P 500 Index is a widely recognized
capitalization-weighted index of 500 common stock prices in U.S.
companies. Tax-exempt Income is federal income tax free. A portion
of this income may be subject to state and local income taxes, and
if applicable, may subject certain investors to the Alternative
Minimum Tax as well. Bond funds are subject to interest-rate risk;
their value declines as interest rates rise. The U.S. Trade Weighted
Dollar Index provides a general indication of the international
value of the U.S. dollar.
7
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, 2006
7-Day Yield 4.14%
---------------------------------------------------------------
7-Day Effective Yield 4.23%
---------------------------------------------------------------
Weighted Average Days to Maturity 56
U.S. GOVERNMENT SECURITIES SAVINGS FUND As of June 30, 2006
7-Day Yield 4.52%
---------------------------------------------------------------
7-Day Effective Yield 4.62%
---------------------------------------------------------------
Weighted Average Days to Maturity 57
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.
PERFORMANCE COMMENTARY
The U.S. Government Securities Savings Fund outperformed the Lipper
government-only money market funds for the year ending June 30,
2006, returning 3.69 percent. The U.S. Treasury Securities Cash Fund
underperformed the Lipper treasury money market funds for the year
ending June 30, 2006, returning 3.11 percent.
THE YEAR IN REVIEW - ECONOMIC AND POLITICAL ISSUES THAT AFFECTED THE FUNDS
The economy continued to show solid economic growth even in the face
of two devastating hurricanes. Once the final revisions are
implemented, Gross Domestic Product (GDP) growth in the last twelve
months should end up in the 3.5 - 4.0 percent range, which is solid
economic growth for
8
MONEY MARKET FUNDS
the largest economy in the world. Employment gains have been less
robust but are still improving. Over the past year, the average gain
in non-farm payrolls averaged about 150,000, which is only modest
job growth in an otherwise strong economy. Inflation concerns have
increased over the past year driven predominantly by sustained
higher energy and commodity prices. The Federal Reserve (Fed)
continued its path of "normalizing" interest rates for the past
year. Over the past year, the Fed has raised interest rates eight
times, bringing the Fed Funds rate to 5.25 percent as of June 30,
2006. Since the beginning of this tightening cycle in June 2004, the
Fed has increased interest rates 17 times, and by 4.25 percent.
Short-term bond yields moved up in-line with the rate increases.
Over the past year, yields on the three-month T-Bill increased 184
basis points to 4.93 percent and yields on the six-month T-Bills
moving up 190 basis points at 5.16 percent. One-year agency discount
note yields moved up 185 basis points to 5.56 percent.
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 averaged a weighted average maturity
of 53 days, which was longer than the peer group average. This
proved beneficial as the Fed took a measured approach to rate
increases, which met market expectations. The fund took advantage of
these progressively higher yields by selectively extending its
ladder. The U.S. Treasury Securities Cash Fund followed a similar
laddered strategy, averaging a weighted average maturity of 40 days.
The fund took advantage of relatively high overnight rates, keeping
the weighted average maturity lower than the U.S. Government
Securities Savings Fund.
CURRENT OUTLOOK
The Fed is two years into this interest rate cycle and is nearing
the end of its tightening campaign. Core inflation measures have
accelerated in recent months, and concerns over slowing economic
growth are building. The housing market appears to be slowing much
faster than the Fed expected, posing a significant risk to the
health of the economy. GDP growth is likely to slow from the current
3.5 - 4.0 percent range to the 2.5 percent range by the end of 2006.
Worldwide growth has been unexpectedly strong but is also likely to
slow as we continue through the remainder of 2006. As the economy
slows, inflation is likely to slow with it, implying that the Fed's
work in normalizing interest rates has likely been completed. With
the backdrop of a slowing economy and moderating inflation, the
second half of 2006 has the potential to be friendlier to the bond
market than the first half.
9
TAX FREE FUNDS
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
Our Tax Free Fund and Near-Term Tax Free Fund 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 will maintain a
weighted average maturity of less than five years, while the Tax
Free Fund will generally maintain a longer weighted average
maturity.
PERFORMANCE GRAPHS
NEAR-TERM TAX FREE FUND
[Near-Term Tax Free Fund Graph]
Lehman 3-Year
Near-Term Municipal
Date Tax Free Fund Bond Index
06/30/96 $10,000.00 $10,000.00
07/31/96 10,057.80 10,055.79
08/30/96 10,086.82 10,070.57
09/30/96 10,154.77 10,131.74
10/31/96 10,222.99 10,202.31
11/29/96 10,330.60 10,297.76
12/31/96 10,330.60 10,302.46
01/31/97 10,370.07 10,347.49
02/28/97 10,427.52 10,397.90
03/31/97 10,357.93 10,344.13
04/30/97 10,408.82 10,388.49
05/30/97 10,506.00 10,473.18
06/30/97 10,585.42 10,535.02
07/31/97 10,762.02 10,660.04
08/29/97 10,706.33 10,639.20
09/30/97 10,806.90 10,715.15
10/31/97 10,853.79 10,762.87
11/28/97 10,888.57 10,793.79
12/31/97 11,002.49 10,867.05
01/30/98 11,091.09 10,938.97
02/27/98 11,085.92 10,961.82
03/31/98 11,081.77 10,979.30
04/30/98 11,067.20 10,964.51
05/29/98 11,187.27 11,066.00
06/30/98 11,222.89 11,102.97
07/31/98 11,256.64 11,143.30
08/31/98 11,383.71 11,251.51
09/30/98 11,494.25 11,322.76
10/30/98 11,488.93 11,377.87
11/30/98 11,506.03 11,405.43
12/31/98 11,512.46 11,432.99
01/29/99 11,613.60 11,536.50
02/26/99 11,585.54 11,549.27
03/31/99 11,595.28 11,559.35
04/30/99 11,632.23 11,594.97
05/28/99 11,599.52 11,578.17
06/30/99 11,486.92 11,508.94
07/30/99 11,541.77 11,566.07
08/31/99 11,506.53 11,580.19
09/30/99 11,538.59 11,623.87
10/29/99 11,517.53 11,625.22
11/30/99 11,582.01 11,676.30
12/31/99 11,558.58 11,657.48
01/31/00 11,544.02 11,678.32
02/29/00 11,582.23 11,715.28
03/31/00 11,679.22 11,775.78
04/28/00 11,648.67 11,777.12
05/31/00 11,636.18 11,789.22
06/30/00 11,791.17 11,938.43
07/31/00 11,899.82 12,035.18
08/31/00 12,004.25 12,126.11
09/29/00 11,998.49 12,129.61
10/31/00 12,075.93 12,198.39
11/30/00 12,129.29 12,247.35
12/31/00 12,308.56 12,383.74
01/31/01 12,437.01 12,571.71
02/28/01 12,463.98 12,620.88
03/30/01 12,545.11 12,709.60
04/30/01 12,492.00 12,691.03
05/31/01 12,593.83 12,806.63
06/30/01 12,641.36 12,863.66
07/31/01 12,754.54 12,969.11
08/31/01 12,890.82 13,102.26
09/30/01 12,926.79 13,169.12
10/31/01 13,018.18 13,254.77
11/30/01 12,933.72 13,212.44
12/31/01 12,876.86 13,199.83
01/31/02 13,049.20 13,367.47
02/28/02 13,158.75 13,467.72
03/31/02 12,959.78 13,267.06
04/30/02 13,187.62 13,462.08
05/31/02 13,250.30 13,540.16
06/30/02 13,355.07 13,656.61
07/31/02 13,467.50 13,763.13
08/31/02 13,590.15 13,851.21
09/30/02 13,770.28 13,960.64
10/31/02 13,643.29 13,883.85
11/30/02 13,609.58 13,888.02
12/31/02 13,803.47 14,088.01
01/31/03 13,824.78 14,133.09
02/28/03 13,951.72 14,223.54
03/31/03 13,949.20 14,206.47
04/30/03 14,004.74 14,244.83
05/31/03 14,199.57 14,354.51
06/30/03 14,152.66 14,331.55
07/31/03 13,876.98 14,202.56
08/31/03 13,972.46 14,275.00
09/30/03 14,236.60 14,489.12
10/31/03 14,168.80 14,421.02
11/30/03 14,211.12 14,435.44
12/31/03 14,259.95 14,465.76
01/31/04 14,316.62 14,516.39
02/29/04 14,448.30 14,639.78
03/31/04 14,406.91 14,600.25
04/30/04 14,217.58 14,452.79
05/31/04 14,157.80 14,396.42
06/30/04 14,181.25 14,422.33
07/31/04 14,279.18 14,527.62
08/31/04 14,429.70 14,680.16
09/30/04 14,461.18 14,696.31
10/31/04 14,494.05 14,737.46
11/30/04 14,434.75 14,666.72
12/31/04 14,510.03 14,723.92
01/31/05 14,529.89 14,704.77
02/28/05 14,496.72 14,660.66
03/31/05 14,396.97 14,612.28
04/30/05 14,496.95 14,686.80
05/31/05 14,537.03 14,713.24
06/30/05 14,570.53 14,788.28
07/31/05 14,536.95 14,754.26
08/31/05 14,577.33 14,802.95
09/30/05 14,611.08 14,810.35
10/31/05 14,577.26 14,788.14
11/30/05 14,617.94 14,801.45
12/31/05 14,651.93 14,853.25
01/31/06 14,624.67 14,885.93
02/28/06 14,665.68 14,897.84
03/31/06 14,638.26 14,871.02
04/30/06 14,665.75 14,896.30
05/31/06 14,713.95 14,948.44
06/30/06 14,679.41 14,921.53
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2006
One Year Five Year Ten Year
Near-Term Tax Free Fund 0.75% 3.03% 3.91%
----------------------------------------------------------------------
Lehman 3-Year Municipal Bond Index 0.88% 3.01% 4.08%
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. 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 has voluntarily agreed to limit the fund's total operating
expenses to 0.45% through November 1, 2006.
10
TAX FREE FUNDS
TAX FREE FUND
[Tax Free Fund Graph]
Lehman 10-Year
Municipal
Date Tax Free Fund Bond Index
06/30/96 $10,000.00 $10,000.00
07/31/96 10,086.36 10,095.79
08/30/96 10,086.36 10,096.06
09/30/96 10,208.30 10,199.81
10/31/96 10,295.70 10,328.77
11/29/96 10,453.69 10,537.87
12/31/96 10,427.25 10,490.37
01/31/97 10,462.65 10,531.76
02/28/97 10,549.77 10,631.00
03/31/97 10,450.70 10,488.51
04/30/97 10,539.43 10,565.73
05/30/97 10,672.63 10,715.39
06/30/97 10,792.82 10,833.73
07/31/97 11,060.60 11,138.09
08/29/97 10,966.76 11,030.09
09/30/97 11,086.58 11,169.93
10/31/97 11,138.94 11,229.10
11/28/97 11,204.41 11,281.11
12/31/97 11,374.65 11,459.16
01/30/98 11,474.08 11,586.27
02/27/98 11,459.16 11,585.47
03/31/98 11,447.92 11,577.51
04/30/98 11,399.99 11,513.83
05/29/98 11,584.95 11,709.65
06/30/98 11,624.74 11,752.64
07/31/98 11,661.90 11,771.48
08/31/98 11,845.58 11,976.07
09/30/98 11,985.84 12,154.12
10/30/98 11,945.35 12,159.42
11/30/98 12,000.52 12,195.78
12/31/98 12,013.15 12,233.72
01/29/99 12,153.91 12,421.06
02/26/99 12,073.47 12,309.61
03/31/99 12,094.14 12,303.24
04/30/99 12,127.73 12,336.15
05/28/99 12,020.64 12,249.64
06/30/99 11,785.79 12,021.97
07/30/99 11,809.77 12,102.64
08/31/99 11,658.38 12,058.06
09/30/99 11,654.36 12,098.66
10/29/99 11,466.35 12,013.22
11/30/99 11,606.38 12,144.56
12/31/99 11,481.05 12,081.41
01/31/00 11,365.00 12,032.05
02/29/00 11,524.86 12,126.52
03/31/00 11,831.36 12,362.42
04/28/00 11,738.83 12,300.32
05/31/00 11,641.79 12,227.35
06/30/00 11,970.82 12,559.57
07/31/00 12,142.28 12,733.81
08/31/00 12,329.16 12,930.73
09/29/00 12,236.93 12,871.53
10/31/00 12,394.42 13,003.22
11/30/00 12,494.86 13,073.29
12/31/00 12,829.48 13,381.37
01/31/01 12,946.80 13,554.11
02/28/01 12,968.41 13,576.85
03/30/01 13,082.27 13,692.61
04/30/01 12,912.48 13,522.98
05/31/01 13,045.75 13,670.18
06/30/01 13,145.52 13,751.48
07/31/01 13,334.72 13,940.97
08/31/01 13,558.81 14,177.26
09/30/01 13,498.99 14,158.69
10/31/01 13,660.09 14,333.45
11/30/01 13,492.82 14,147.92
12/31/01 13,318.29 13,999.59
01/31/02 13,557.48 14,264.18
02/28/02 13,733.29 14,468.16
03/31/02 13,430.36 14,170.11
04/30/02 13,730.96 14,498.86
05/31/02 13,801.55 14,567.01
06/30/02 13,958.07 14,747.64
07/31/02 14,124.24 14,943.78
08/31/02 14,270.31 15,138.05
09/30/02 14,558.72 15,499.85
10/31/02 14,319.16 15,217.75
11/30/02 14,234.38 15,092.97
12/31/02 14,517.44 15,423.50
01/31/03 14,470.69 15,341.76
02/28/03 14,655.67 15,607.17
03/31/03 14,640.41 15,614.97
04/30/03 14,736.92 15,730.52
05/31/03 15,082.63 16,180.42
06/30/03 15,003.37 16,102.75
07/31/03 14,417.47 15,426.44
08/31/03 14,539.99 15,559.10
09/30/03 14,939.57 16,083.44
10/31/03 14,849.86 15,961.21
11/30/03 14,957.82 16,133.59
12/31/03 15,052.81 16,304.61
01/31/04 15,142.06 16,373.09
02/29/04 15,359.76 16,661.25
03/31/04 15,284.60 16,566.28
04/30/04 14,923.46 16,109.05
05/31/04 14,878.35 16,118.72
06/30/04 14,816.00 16,171.91
07/31/04 14,950.91 16,393.47
08/31/04 15,163.62 16,752.48
09/30/04 15,226.49 16,841.27
10/31/04 15,330.31 16,976.00
11/30/04 15,202.66 16,784.17
12/31/04 15,374.20 16,982.23
01/31/05 15,481.43 17,126.58
02/28/05 15,403.90 17,018.68
03/31/05 15,307.31 16,868.91
04/30/05 15,516.28 17,196.17
05/31/05 15,607.18 17,311.39
06/30/05 15,671.79 17,411.79
07/31/05 15,614.59 17,263.79
08/31/05 15,754.80 17,474.41
09/30/05 15,662.73 17,317.14
10/31/05 15,585.76 17,185.53
11/30/05 15,659.12 17,292.08
12/31/05 15,801.36 17,449.44
01/31/06 15,841.58 17,505.28
02/28/06 15,965.24 17,608.56
03/31/06 15,867.25 17,427.19
04/30/06 15,869.88 17,395.82
05/31/06 15,926.46 17,514.11
06/30/06 15,876.28 17,435.30
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2006
One Year Five Year Ten Year
Tax Free Fund 1.30% 3.84% 4.73%
----------------------------------------------------------------------
Lehman 10-Year Municipal Bond Index 0.15% 4.86% 5.71%
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. 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 has voluntarily agreed to limit the fund's total operating
expenses to 0.70% through November 1, 2006.
PERFORMANCE COMMENTARY
Near-Term Tax Free posted a 0.75 percent return in the past year
compared to the Lipper Short-Intermediate Municipal Debt Funds Peer
Group return of 0.75 percent. The Tax Free Fund returned 1.30
percent for the past year compared to the Lipper General Municipal
Debt Funds Peer Group return of 0.71 percent.
THE YEAR IN REVIEW - ECONOMIC AND POLITICAL ISSUES THAT AFFECTED THE
FUNDS
Municipals generated only modest total returns over the past year,
with the very short and very long ends of the yield curve the best
performers.
11
TAX FREE FUNDS
The municipal yield curve rose across the board and flattened
considerably - yields on 1-year municipals rose about 110 basis
points, while 30-year municipal yields rose by about 30 basis
points. Bond yields were driven higher by rising inflation concerns
starting with the energy price spikes witnessed after Hurricanes
Katrina and Rita. Higher energy prices have only recently filtered
down into core inflation indicators, which have pressured bond
prices in the past several months. The economy has remained
remarkably resilient, pressuring the Fed to continue to increase
interest rates. Over the past year, the Fed has increased interest
rates by 2 percent on eight different occasions. In the municipal
market, the best performing sector was the industrial development
sector. The sector is leveraged to volatile tobacco-backed
municipals, which received favorable court rulings over the past
year. The housing and hospital sectors also posted strong relative
performance during this time. The high yield portion of the
municipal market, which is tied to airline-backed bonds, also posted
very strong returns over the past year.
INVESTMENT HIGHLIGHTS
STRENGTHS
* The Tax Free Fund maintained an overweight position in long dated
municipals, which significantly outperformed during the past year.
* The Tax Free Fund was also significantly overweight in the
medical/hospital sector which outperformed during the year.
WEAKNESSES
* In the past year, both funds were underweighted in California
municipals, which outperformed.
* The funds' lack of exposure to risky airline and tobacco-backed
bonds was detrimental to performance as these two sectors were by
far the best performers over the past twelve months.
* The funds' conservative credit profile detracted from performance
as lower rated credits generally outperformed.
CURRENT OUTLOOK
OPPORTUNITIES
* The Fed is at or near the end of its tightening cycle, which would
likely allow bonds to rally.
12
TAX FREE FUNDS
* With the strong outperformance of high yield-related securities,
odds favor a reversal, so issues with higher-quality credit may
outperform over the next year.
THREATS
* Inflation still remains a threat to the market and potential Fed
response.
* A stronger than expected global economy could pose a threat to
long dated municipals.
* If the Fed were to continue raising interest rates to 6 percent or
more, this would be negative for municipals across the board.
NEAR-TERM TAX FREE FUND
MUNICIPAL BOND RATINGS June 30, 2006
(BASED ON TOTAL MUNICIPAL BONDS)
[Near-Term Tax Free Fund Pie Graph]
AAA 51.19%
AA 39.03%
A 6.16%
BBB 3.62%
TAX FREE FUND
MUNICIPAL BOND RATINGS June 30, 2006
(BASED ON TOTAL MUNICIPAL BONDS)
[Tax Free Fund Pie Graph]
AAA 46.53%
AA 22.35%
A 28.95%
BBB 2.17%
13
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 individual stock opportunities. The fund seeks capital
appreciation and does not emphasize income.
PERFORMANCE GRAPH
ALL AMERICAN EQUITY FUND
[All American Equity Fund Graph]
All American S&P
Date Equity Fund 500 Index
06/30/96 $10,000.00 $10,000.00
07/31/96 9,653.77 9,558.18
08/30/96 9,788.19 9,759.70
09/30/96 10,285.13 10,309.11
10/31/96 10,497.87 10,593.32
11/29/96 11,238.37 11,394.09
12/31/96 11,054.27 11,168.22
01/31/97 11,812.98 11,866.02
02/28/97 11,825.69 11,959.10
03/31/97 11,369.62 11,467.85
04/30/97 12,143.76 12,152.52
05/30/97 12,828.57 12,892.06
06/30/97 13,368.34 13,469.73
07/31/97 14,187.33 14,541.46
08/29/97 13,457.92 13,726.87
09/30/97 14,072.59 14,478.67
10/31/97 13,640.57 13,995.01
11/28/97 14,179.52 14,643.04
12/31/97 14,404.09 14,894.21
01/30/98 14,686.69 15,058.86
02/27/98 15,604.06 16,145.02
03/31/98 16,326.66 16,971.84
04/30/98 16,575.09 17,142.34
05/29/98 16,335.38 16,847.60
06/30/98 17,019.21 17,531.92
07/31/98 16,966.58 17,345.26
08/31/98 14,742.67 14,837.47
09/30/98 15,680.05 15,788.03
10/30/98 16,669.39 17,072.28
11/30/98 17,711.51 18,106.93
12/31/98 18,558.30 19,150.40
01/29/99 19,218.83 19,951.22
02/26/99 18,639.73 19,331.19
03/31/99 19,118.84 20,104.50
04/30/99 19,590.69 20,882.69
05/28/99 19,268.56 20,389.68
06/30/99 20,335.66 21,521.42
07/30/99 19,649.94 20,849.36
08/31/99 19,395.63 20,746.35
09/30/99 18,803.45 20,177.51
10/29/99 19,936.02 21,454.43
11/30/99 20,227.13 21,890.49
12/31/99 21,269.64 23,179.57
01/31/00 20,207.54 22,015.05
02/29/00 19,773.47 21,598.31
03/31/00 21,510.69 23,711.30
04/28/00 20,979.16 22,998.01
05/31/00 20,378.30 22,526.19
06/30/00 20,889.50 23,081.53
07/31/00 20,330.04 22,720.74
08/31/00 21,680.13 24,131.86
09/29/00 20,066.49 22,855.54
10/31/00 19,335.96 22,758.86
11/30/00 17,170.14 20,964.22
12/31/00 17,269.24 21,066.66
01/31/01 17,416.84 21,814.12
02/28/01 15,297.30 19,825.21
03/30/01 14,212.14 18,569.19
04/30/01 15,524.58 20,012.26
05/31/01 15,435.90 20,146.36
06/30/01 15,048.67 19,656.00
07/31/01 14,705.58 19,462.23
08/31/01 13,599.41 18,243.88
09/30/01 12,996.63 16,770.60
10/31/01 13,150.51 17,090.31
11/30/01 13,943.56 18,395.33
12/31/01 13,979.07 18,556.49
01/31/02 13,505.61 18,285.71
02/28/02 13,174.18 17,933.05
03/31/02 13,777.85 18,607.44
04/30/02 13,091.33 17,479.40
05/31/02 14,008.66 17,350.49
06/30/02 12,546.84 16,122.22
07/31/02 10,889.71 14,865.43
08/31/02 11,090.93 14,963.02
09/30/02 10,114.41 13,336.85
10/31/02 10,617.47 14,510.71
11/30/02 10,658.90 15,364.80
12/31/02 10,262.37 14,462.15
01/31/03 10,126.25 14,083.30
02/28/03 9,960.53 13,871.99
03/31/03 10,108.49 14,006.67
04/30/03 10,871.95 15,160.41
05/31/03 11,357.26 15,959.17
06/30/03 11,333.58 16,162.76
07/31/03 11,611.74 16,447.73
08/31/03 12,008.27 16,768.50
09/30/03 11,842.56 16,590.43
10/31/03 12,730.31 17,528.93
11/30/03 13,186.02 17,683.17
12/31/03 13,476.02 18,610.55
01/31/04 13,517.44 18,952.15
02/29/04 13,694.99 19,215.58
03/31/04 13,594.38 18,925.68
04/30/04 12,830.92 18,628.58
05/31/04 12,990.71 18,884.22
06/30/04 13,333.98 19,251.42
07/31/04 12,576.43 18,614.26
08/31/04 12,546.84 18,689.55
09/30/04 12,937.45 18,891.97
10/31/04 13,132.75 19,180.59
11/30/04 13,925.81 19,956.67
12/31/04 14,156.62 20,635.76
01/31/05 13,819.28 20,132.77
02/28/05 14,322.34 20,556.45
03/31/05 14,085.60 20,192.43
04/30/05 13,600.30 19,809.46
05/31/05 14,150.70 20,439.78
06/30/05 14,482.13 20,468.79
07/31/05 15,044.37 21,229.99
08/31/05 15,008.86 21,036.29
09/30/05 15,648.04 21,206.67
10/31/05 15,174.57 20,853.14
11/30/05 15,819.67 21,641.85
12/31/05 15,837.31 21,649.38
01/31/06 17,319.42 22,222.61
02/28/06 16,635.83 22,282.91
03/31/06 17,476.70 22,560.28
04/30/06 17,851.76 22,863.21
05/31/06 16,774.97 22,205.18
06/30/06 16,690.28 22,235.28
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2006
One Year Five Year Ten Year
All American Equity Fund 15.25% 2.09% 5.25%
----------------------------------------------------------------------
S&P 500 Index 8.63% 2.49% 8.31%
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. 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 has
voluntarily agreed to limit the fund's total operating expenses to
1.75% through November 1, 2006.
14
ALL AMERICAN EQUITY FUND
PERFORMANCE COMMENTARY
The fund finished the year ending June 30, 2006 with a gain of 15.25
percent. The fund outperformed the S&P 500 Index and the Lipper
Large Cap Core Peer Group. The benchmark S&P 500 Index was up 8.63
percent for the year, while the peer group gained 7.47 percent
during the year.
THE YEAR IN REVIEW - ECONOMIC AND POLITICAL ISSUES THAT AFFECTED THE FUND
Critical drivers that drove the market higher include the following:
* The Fed increased the Fed Funds rate eight times to finish the
fiscal year at 5.25 percent.
* The price of oil moved from the mid-$50 range to the low-$70 area
as strong global economies, hurricanes and Mideast tensions all
served to drive the commodity price higher.
* Gold prices moved significantly higher and at one point crossed
the $700 threshold.
* Earnings, on a top-down basis on the S&P 500, are estimated to
grow 13 percent on a year over year basis.
The domestic equity markets performed well in the past 12 months as
a stronger than expected economy coupled with good corporate profit
growth helped drive the markets higher. Despite higher interest
rates and rising energy prices, consumer spending remained robust.
Towards the end of the period, the housing market had clearly slowed
down and the markets were dealing with a new Federal Reserve
Chairman as Alan Greenspan retired and the position was handed over
to Ben Bernanke. Consumer confidence recovered after taking a hit
from Hurricanes Katrina and Rita.
Areas of particular strength in the market included energy,
materials and industrials, which all benefited from strong U.S.
economic growth.
On the political front, President Bush's approval ratings hit new
lows. An unresolved situation in Iraq and increasing tensions in
Iran and North Korea served to weaken the President even more
politically.
INVESTMENT HIGHLIGHTS
STRENGTHS
* The energy sector was the best performing sector during the
twelve-month period. Strong worldwide economic growth and the
effects of Hurricanes Katrina and Rita helped to move crude oil
higher.
15
ALL AMERICAN EQUITY FUND
* Materials were the second best performing sector as many precious
and base metals hit new highs as inventory levels fell.
* An energy-related sector that performed well was agricultural
products as there was renewed focus on ethanol as oil prices moved
to record highs.
WEAKNESSES
* Healthcare was the worst performing sector as supply companies
suffered from a contact lens solution recall as well as continued
weakness from hospital companies.
* Homebuilding was also one of the worst performing industries as
higher interest rates served to weaken the housing markets.
* The videogame makers also performed poorly as Sony Corp.'s(1) new
game console was pushed back towards the end of 2007. Concerns
over the steep price of new game consoles also contributed to
weakness in this group.
CURRENT OUTLOOK
OPPORTUNITIES
* Stock selection will be the key to performance over the next 12
months. In an environment of slower growth, the markets tend to
favor companies that can provide strong, consistent growth.
* Our use of statistical models will allow for timely accumulation
of stock as well as opportune profit taking.
* Recent language from the Fed may indicate that the cycle of Fed
tightening may be close to an end.
THREATS
* A global slowdown could weigh on the equity markets.
* Global tensions could serve to roil the markets. The situation in
Iraq is unresolved and potential new problem areas include Iran
and North Korea.
* The weakening housing markets could dampen consumer spending,
which has propelled the U.S. economy the past few years.
(1)The fund did not hold this security as of June 30, 2006.
16
ALL AMERICAN EQUITY FUND
TOP 10 EQUITY HOLDINGS BASED ON TOTAL INVESTMENTS June 30, 2006
GOLDCORP, INC. 9.65%
GOLD MINING
---------------------------------------------------------------
CAMPBELL SOUP CO. 2.59%
FOOD
---------------------------------------------------------------
J.C. PENNEY CO., INC. 2.35%
RETAIL
---------------------------------------------------------------
KELLOGG CO. 2.25%
FOOD
---------------------------------------------------------------
LAS VEGAS SANDS CORP. 2.17%
CASINO HOTELS
---------------------------------------------------------------
MICROSOFT CORP. 2.16%
APPLICATIONS SOFTWARE
---------------------------------------------------------------
THE WALT DISNEY CO. 2.09%
MULTIMEDIA
---------------------------------------------------------------
DIAMONDS TRUST, SERIES 1 2.08%
INDEX FUND
---------------------------------------------------------------
BELLSOUTH CORP. 2.02%
TELEPHONE - INTEGRATED
---------------------------------------------------------------
CITIGROUP, INC. 2.02%
FINANCIAL SERVICES
PORTFOLIO ALLOCATION BY INDUSTRY SECTOR
BASED ON TOTAL INVESTMENTS June 30, 2006
[All American Equity Fund Pie Graph]
Cash Equivalent 13.7%
Materials 13.3%
Consumer Discretion 12.7%
Industrials 10.7%
Consumer Staples 10.7%
Information Technology 10.1%
Energy 9.2%
Health Care 6.5%
Financial Services 6.2%
Other 6.9%
17
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 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 GRAPH
CHINA REGION OPPORTUNITY FUND
[China Region Opportunity Fund Graph]
IFC Emerging
Morgan Stanley Markets
China Region Capital Far East Investable
Opportunity Free ex Total
Date Fund Japan Index* China Index
06/30/96 $10,000.00 $10,000.00 $10,000.00
07/31/96 9,875.58 9,262.13 9,724.35
08/30/96 9,891.14 9,579.23 10,122.51
09/30/96 9,937.79 9,808.99 10,076.57
10/31/96 9,969.04 9,612.43 9,984.69
11/29/96 10,750.32 10,151.15 10,918.84
12/31/96 11,781.60 10,075.47 12,569.68
01/31/97 11,750.34 10,208.54 12,459.42
02/28/97 12,078.48 10,236.47 12,807.04
03/31/97 11,906.60 9,651.85 12,399.69
04/30/97 12,609.75 9,391.37 14,203.68
05/30/97 13,266.01 9,847.97 14,010.72
06/30/97 13,437.89 10,094.75 14,176.11
07/31/97 14,437.92 10,124.84 16,369.07
08/29/97 14,609.80 8,246.20 18,972.43
09/30/97 13,781.65 8,172.57 15,053.60
10/31/97 10,469.06 6,165.19 12,344.56
11/28/97 9,453.40 5,763.28 9,764.17
12/31/97 9,136.21 5,492.82 9,568.15
01/30/98 7,135.69 5,018.95 6,802.45
02/27/98 9,120.45 6,160.42 9,356.81
03/31/98 9,120.45 5,998.72 8,784.07
04/30/98 8,380.11 5,369.70 7,701.38
05/29/98 7,434.98 4,523.51 7,154.67
06/30/98 6,442.60 4,018.20 6,362.94
07/31/98 5,450.22 3,896.48 4,943.34
08/31/98 4,489.34 3,283.40 3,840.74
09/30/98 5,450.22 3,628.92 5,117.92
10/30/98 6,190.57 4,612.30 5,082.70
11/30/98 6,379.59 5,024.03 5,157.73
12/31/98 6,096.05 5,087.03 4,698.32
01/29/99 5,334.05 4,913.46 4,101.07
02/26/99 5,302.30 4,817.99 4,136.29
03/31/99 5,873.80 5,342.21 4,336.91
04/30/99 7,096.19 6,569.04 5,574.27
05/28/99 6,921.56 6,264.91 5,421.13
06/30/99 8,858.33 7,340.83 7,419.60
07/30/99 8,413.83 7,046.84 7,122.51
08/31/99 8,461.45 7,154.81 7,229.71
09/30/99 8,016.95 6,575.74 6,865.24
10/29/99 7,937.57 6,885.28 6,854.52
11/30/99 8,794.83 7,565.88 8,779.48
12/31/99 9,493.33 8,108.76 9,643.19
01/31/00 9,540.96 7,924.02 9,719.75
02/29/00 10,175.97 7,498.41 12,188.36
03/31/00 10,572.84 7,834.52 12,264.93
04/28/00 9,493.33 7,187.40 10,444.10
05/31/00 8,985.33 6,593.94 10,566.62
06/30/00 9,699.71 6,891.81 12,174.58
07/31/00 9,747.34 6,635.28 12,024.50
08/31/00 9,540.96 6,545.41 11,785.60
09/29/00 8,747.20 5,781.23 10,473.20
10/31/00 7,969.32 5,323.45 9,986.22
11/30/00 7,540.69 5,052.08 8,598.77
12/31/00 7,701.03 5,037.47 8,765.70
01/31/01 8,022.58 5,711.21 9,735.07
02/28/01 7,620.64 5,431.10 9,171.52
03/30/01 7,556.34 4,836.22 8,255.74
04/30/01 7,861.80 4,843.51 9,303.22
05/31/01 8,119.04 4,796.09 9,859.11
06/30/01 7,910.04 4,687.11 10,030.63
07/31/01 7,250.87 4,500.16 8,698.32
08/31/01 6,688.16 4,419.11 6,984.69
09/30/01 5,932.53 3,710.39 6,655.44
10/31/01 6,157.61 3,896.02 6,753.45
11/30/01 6,591.70 4,426.74 7,222.05
12/31/01 6,688.16 4,826.59 7,197.55
01/31/02 6,848.93 5,020.99 6,683.00
02/28/02 6,768.55 5,028.82 6,805.51
03/31/02 7,106.17 5,384.16 7,136.29
04/30/02 7,299.10 5,447.85 7,330.78
05/31/02 7,283.02 5,322.84 7,376.72
06/30/02 7,041.86 5,029.71 7,194.49
07/31/02 6,575.62 4,835.58 6,903.52
08/31/02 6,334.46 4,720.34 6,771.82
09/30/02 5,803.91 4,175.47 6,277.18
10/31/02 5,852.14 4,397.27 6,225.11
11/30/02 6,125.45 4,613.06 6,496.17
12/31/02 5,868.22 4,293.26 6,294.03
01/31/03 6,045.07 4,343.90 6,632.47
02/28/03 6,045.07 4,130.67 6,491.58
03/31/03 5,787.83 3,932.66 6,241.96
04/30/03 5,819.99 4,057.23 6,263.40
05/31/03 6,479.16 4,388.16 7,010.72
06/30/03 6,704.24 4,635.48 7,467.08
07/31/03 7,331.25 5,021.92 8,183.77
08/31/03 7,893.96 5,376.48 8,698.32
09/30/03 8,151.20 5,389.54 8,759.57
10/31/03 9,549.92 5,842.27 10,042.88
11/30/03 9,823.24 5,748.81 10,238.90
12/31/03 10,629.37 6,043.74 11,578.87
01/31/04 10,694.18 6,434.25 11,560.49
02/29/04 11,293.71 6,665.54 12,278.71
03/31/04 10,921.03 6,514.83 11,264.93
04/30/04 9,819.20 6,119.97 9,715.16
05/31/04 9,770.59 5,951.83 10,355.28
06/30/04 9,495.14 5,883.75 10,344.56
07/31/04 9,397.92 5,707.68 10,451.76
08/31/04 9,478.93 5,986.00 10,442.57
09/30/04 10,127.07 6,179.46 11,240.43
10/31/04 10,143.27 6,201.86 10,888.21
11/30/04 10,791.40 6,727.85 11,923.43
12/31/04 11,076.85 6,903.92 11,650.84
01/31/05 10,712.05 6,943.78 11,425.73
02/28/05 11,690.39 7,331.99 12,309.34
03/31/05 11,325.59 6,974.07 11,669.22
04/30/05 11,126.60 6,885.60 11,704.44
05/31/05 10,977.36 7,016.46 11,791.73
06/30/05 11,391.91 7,161.17 12,277.18
07/31/05 11,806.47 7,599.67 13,108.73
08/31/05 11,740.14 7,323.00 13,162.33
09/30/05 12,386.84 7,674.36 13,889.74
10/31/05 11,640.65 7,188.97 12,393.57
11/30/05 12,171.27 7,694.21 13,218.99
12/31/05 13,146.04 8,136.93 13,603.37
01/31/06 14,523.56 8,704.73 15,627.87
02/28/06 14,353.50 8,672.58 16,168.45
03/31/06 15,356.88 8,752.59 16,825.42
04/30/06 16,394.28 9,361.82 17,624.81
05/31/06 15,305.86 8,695.59 16,848.39
06/30/06 14,812.67 8,623.21 17,327.72
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2006
One Year Five Year Ten Year
China Region Opportunity Fund 30.03% 13.36% 4.00%
-----------------------------------------------------------------------
Hang Seng Composite Index 22.84% n/a n/a
-----------------------------------------------------------------------
Morgan Stanley Capital Far East Free ex
Japan Index* 20.42% 12.95% (1.47)%
-----------------------------------------------------------------------
IFC Emerging Markets Investable Total
China Index 41.14% 11.54% 5.64%
<FN>
* These are not total returns. These returns reflect simple
appreciation only and do not reflect dividend reinvestment.
</FN>
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. 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.
18
CHINA REGION OPPORTUNITY FUND
PERFORMANCE COMMENTARY
For the twelve-month period ending June 30, 2006, the China Region
Opportunity Fund outperformed its benchmark, the Hang Seng Composite
Index, with a total return of 30.03 percent compared to a 22.84
percent return on the Hang Seng Composite Index. For the period in
review, the China Shanghai B share market(1) was the best performing
market with a 45.52 percent gain while the Taiwan market was the
worst, with an advance of 8.93 percent.
THE YEAR IN REVIEW - ECONOMIC AND POLITICAL ISSUES THAT AFFECTED THE
FUND
Critical drivers for the year include:
* A reacceleration of China's economy that led to strong inflows
into Chinese listed company shares.
* A continued challenging relationship between Taiwan and Mainland
China as Taiwan's President sought independence while it appears
that this is less of a concern to a majority of the population.
* Rising tensions in the region as North Korea talked of testing
long-range missiles.
* More pressure placed on China to revalue its currency as trade
balances seemed to hit new records every month.
The last year has been very rewarding for investors in China. The
reacceleration of the Chinese economy helped to drive the markets to
new highs. Much of the growth was driven by fixed asset investment
and exports. Despite revaluing its currency in July 2005, export
growth was unabated, and China reported record trade surpluses
almost every month. The move in July was a very small move but does
represent a first step towards a flexible currency regime.
Even with acceleration in growth, inflation remained in check as the
Consumer Price Index did not rise above 1.9 percent and ended the
period at 1.5 percent. China also unveiled its eleventh five-year
plan, and some of the features included improving the livelihood of
the rural population, a better environment and the creation of
social benefits such as healthcare.
INVESTMENT HIGHLIGHTS
STRENGTHS
* The fund benefited from its exposure to the H-share market, as
evidenced by the Hang Seng China Enterprises Index(2) being the
best performing index during the time period.
19
CHINA REGION OPPORTUNITY FUND
* The fund was overweight in the Korean market, which performed
extremely well in the last six months of 2005.
* To illustrate China's growing importance and influence in the
world economy, President Bush, Federal Reserve Chairman Alan
Greenspan and Treasury Secretary Snow visited China in the last
half of 2005. Greenspan and Snow have since been replaced in their
positions by Ben Bernanke and Henry Paulson, respectively.
* Tensions between Taiwan and the Mainland appear to be lessening
despite rhetoric by Taiwan's President, Chen Shui-bian.
* China took a small step in moving towards a flexible currency
regime when it revalued the Yuan in July 2005.
WEAKNESSES
* The fund was hurt by its underweight position in information
technology. Information technology was the best-performing sector
in the Hang Seng Composite Index.
* The Shanghai B-Share Stock Price Index(1) was the best performing
country index, but the fund had no exposure to this index as it is
extremely speculative and has very poor liquidity.
CURRENT OUTLOOK
OPPORTUNITIES
* The long-term growth outlook remains intact. A slowdown in China's
growth would be better to achieve a more sustainable economy with
less chance of overheating.
* There appears to be improved relations between Taiwan and the
Mainland. The less tension there, the better the outlook for the
Taiwan markets.
* The most recent five-year plan addresses the inequality between
the rural and urban areas and should be sufficient to maintain
social stability as we approach the Olympic Games in Beijing in
2008.
THREATS
* The political tension between the U.S. and China may only get
worse in the future, especially as China assumes a larger role in
world affairs in the future.
* A revaluation of the Chinese currency could hurt the employment
situation in China as many of the jobs there are export dependent.
A stronger currency could hurt exports.
20
CHINA REGION OPPORTUNITY FUND
* Kim Jong Il remains a threat so long as he remains the leader of
North Korea. There seldom appears to be any rationale for some of
his rhetoric or actions.
* Historically, China's boom periods have been followed by bust
periods. The reacceleration of the economy and the government's
response to such strong growth could lead to problems in later
time periods.
(1)The Shanghai B-Share Stock Price Index is a
capitalization-weighted index. The index tracks the daily price
performance of all shares listed on the Shanghai Stock Exchange
that are available for investment by foreign investors. The index
is priced in US dollars.
(2)The Hang Seng China Enterprises Index is a
capitalization-weighted index comprised of state-owned Chinese
companies (H-Shares) listed on the Hong Kong Stock Exchange and
included in HSMLCI index.
TOP 10 EQUITY HOLDINGS BASED ON TOTAL INVESTMENTS June 30, 2006
PETROCHINA CO., LTD. 3.06%
OIL & GAS - INTEGRATED
---------------------------------------------------------------
FOCUS MEDIA HOLDING LTD. 3.00%
ADVERTISING
---------------------------------------------------------------
HSBC HOLDINGS PLC 2.97%
BANKS
---------------------------------------------------------------
CTRIP.COM INTERNATIONAL LTD. 2.89%
E-COMMERCE / SERVICES
---------------------------------------------------------------
HONG KONG & CHINA GAS CO., LTD. 2.80%
GAS DISTRIBUTION
---------------------------------------------------------------
KEPPEL CORP., LTD. 2.63%
DIVERSIFIED OPERATIONS
---------------------------------------------------------------
SILVERCORP METALS, INC. 2.49%
SILVER MINING
---------------------------------------------------------------
CATHAY FINANCIAL HOLDING CO., LTD. 2.48%
FINANCIAL SERVICES
---------------------------------------------------------------
CHINA MOBILE (HONG KONG) LTD. 2.43%
CELLULAR TELECOMMUNICATIONS
---------------------------------------------------------------
HYUNDAI HEAVY INDUSTRIES CO., LTD. 2.38%
SHIPBUILDING
21
CHINA REGION OPPORTUNITY FUND
PORTFOLIO PROFILE June 30, 2006
Country Distribution* % of Investments
---------------------------------------------------------------
United States 19.74%
---------------------------------------------------------------
Hong Kong 17.95%
---------------------------------------------------------------
People's Republic of China 15.25%
---------------------------------------------------------------
Cayman Islands 12.67%
---------------------------------------------------------------
Canada 8.53%
---------------------------------------------------------------
Bermuda 7.08%
---------------------------------------------------------------
Taiwan 6.98%
---------------------------------------------------------------
Korea, Republic Of 4.61%
---------------------------------------------------------------
Singapore 3.70%
---------------------------------------------------------------
Other Foreign 3.49%
---------------------------------------------------------------
* Country distribution shown is based on domicile and not
intended to conform to the China region definition in the
prospectus.
PORTFOLIO ALLOCATION BY INDUSTRY SECTOR
BASED ON TOTAL INVESTMENTS June 30, 2006
[China Region Opportunity Fund Pie Graph]
Cash Equivalent 15.0%
Financials 12.0%
Industrials 12.0%
Consumer Discretion 11.2%
Information Technology 10.3%
Telecommunications 4.4%
Energy 8.4%
Utilities 4.8%
Consumer Staples 3.4%
Other 4.1%
22
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, transportation, and processing of
petroleum, natural gas, industrial commodities, metals, minerals,
paper and forest products and can invest in any part of the world.
PERFORMANCE GRAPH
GLOBAL RESOURCES FUND
[Global Resources Fund Graph - 10 year]
Global S&P 500 S&P Energy &
Date Resources Fund Index Materials Index
06/30/96 $10,000.00 $10,000.00 $10,000.00
07/31/96 9,570.20 9,558.18 9,657.09
08/30/96 9,914.04 9,759.70 9,882.15
09/30/96 10,315.19 10,309.11 10,281.54
10/31/96 10,802.29 10,593.32 10,744.15
11/29/96 11,375.36 11,394.09 11,264.84
12/31/96 11,489.97 11,168.22 11,204.00
01/31/97 11,911.92 11,866.02 11,679.11
02/28/97 11,262.77 11,959.10 11,440.43
03/31/97 11,181.62 11,467.85 11,688.80
04/30/97 10,889.51 12,152.52 11,859.11
05/30/97 11,928.15 12,892.06 12,689.76
06/30/97 11,895.69 13,469.73 13,147.77
07/31/97 12,901.87 14,541.46 14,110.42
08/29/97 13,615.94 13,726.87 13,625.21
09/30/97 14,816.87 14,478.67 14,318.64
10/31/97 14,037.89 13,995.01 13,677.41
11/28/97 11,782.09 14,643.04 13,559.39
12/31/97 11,173.51 14,894.21 13,472.93
01/30/98 9,846.89 15,058.86 12,934.12
02/27/98 10,071.11 16,145.02 13,798.42
03/31/98 10,052.42 16,971.84 14,433.66
04/30/98 9,790.84 17,142.34 14,951.58
05/29/98 8,912.65 16,847.60 14,502.41
06/30/98 8,352.11 17,531.92 14,200.96
07/31/98 7,698.14 17,345.26 13,278.65
08/31/98 6,464.94 14,837.47 11,716.67
09/30/98 7,156.28 15,788.03 13,086.38
10/30/98 7,417.87 17,072.28 13,330.98
11/30/98 7,212.33 18,106.93 13,543.84
12/31/98 6,869.82 19,150.40 13,297.82
01/29/99 6,530.32 19,951.22 12,526.28
02/26/99 6,470.41 19,331.19 12,523.21
03/31/99 7,109.46 20,104.50 13,902.72
04/30/99 8,287.72 20,882.69 16,321.31
05/28/99 7,888.31 20,389.68 15,683.65
06/30/99 8,008.13 21,521.42 16,022.87
07/30/99 8,028.10 20,849.36 16,088.54
08/31/99 7,928.25 20,746.35 16,095.97
09/30/99 7,648.66 20,177.51 15,501.27
10/29/99 7,488.90 21,454.43 15,447.96
11/30/99 7,508.87 21,890.49 15,587.38
12/31/99 7,868.34 23,179.57 16,124.27
01/31/00 7,608.72 22,015.05 15,369.33
02/29/00 7,189.34 21,598.31 14,302.60
03/31/00 7,968.19 23,711.30 15,779.48
04/28/00 7,848.37 22,998.01 15,480.32
05/31/00 8,247.78 22,526.19 16,424.38
06/30/00 7,748.52 23,081.53 15,377.20
07/31/00 7,608.72 22,720.74 15,160.80
08/31/00 8,447.48 24,131.86 16,061.30
09/29/00 8,427.51 22,855.54 15,947.85
10/31/00 8,107.98 22,758.86 16,183.73
11/30/00 7,708.57 20,964.22 15,751.94
12/31/00 8,707.09 21,066.66 17,087.06
01/31/01 8,427.51 21,814.12 16,596.29
02/28/01 8,287.72 19,825.21 16,444.65
03/30/01 8,167.89 18,569.19 16,049.75
04/30/01 8,906.80 20,012.26 17,701.68
05/31/01 8,806.95 20,146.36 18,000.44
06/30/01 8,008.13 19,656.00 16,923.30
07/31/01 7,688.60 19,462.23 16,735.91
08/31/01 7,409.02 18,243.88 16,304.03
09/30/01 6,929.73 16,770.60 14,990.26
10/31/01 7,389.05 17,090.31 15,435.70
11/30/01 7,448.96 18,395.33 15,579.02
12/31/01 7,528.84 18,556.49 16,050.62
01/31/02 7,548.81 18,285.71 15,929.40
02/28/02 7,968.19 17,933.05 16,673.12
03/31/02 8,707.09 18,607.44 17,624.22
04/30/02 9,246.30 17,479.40 16,743.13
05/31/02 11,123.51 17,350.49 17,080.54
06/30/02 9,845.41 16,122.22 16,946.78
07/31/02 7,648.66 14,865.43 14,868.99
08/31/02 8,028.10 14,963.02 14,860.47
09/30/02 7,868.34 13,336.85 13,392.43
10/31/02 7,349.11 14,510.71 13,871.51
11/30/02 7,628.69 15,364.80 14,733.66
12/31/02 8,867.85 14,462.15 14,550.76
01/31/03 9,377.50 14,083.30 14,072.21
02/28/03 9,560.97 13,871.99 14,170.37
03/31/03 9,234.80 14,006.67 14,297.60
04/30/03 9,214.41 15,160.41 14,656.14
05/31/03 10,294.86 15,959.17 15,679.69
06/30/03 10,478.33 16,162.76 15,607.94
07/31/03 10,987.98 16,447.73 15,711.40
08/31/03 12,374.22 16,768.50 16,543.18
09/30/03 13,026.57 16,590.43 16,034.12
10/31/03 15,187.47 17,528.93 16,574.36
11/30/03 16,390.23 17,683.17 16,734.56
12/31/03 17,696.76 18,610.55 18,869.23
01/31/04 17,324.20 18,952.15 18,766.32
02/29/04 18,234.91 19,215.58 19,648.66
03/31/04 18,710.96 18,925.68 19,449.95
04/30/04 16,889.54 18,628.58 19,400.42
05/31/04 16,910.24 18,884.22 19,621.42
06/30/04 17,365.59 19,251.42 20,635.29
07/31/04 17,448.38 18,614.26 20,990.78
08/31/04 17,489.78 18,689.55 20,965.58
09/30/04 19,994.23 18,891.97 22,444.50
10/31/04 20,594.48 19,180.59 22,500.25
11/30/04 23,181.72 19,956.67 23,990.82
12/31/04 23,078.78 20,635.76 23,760.60
01/31/05 23,232.49 20,132.77 23,995.17
02/28/05 27,843.85 20,556.45 27,700.99
03/31/05 27,514.47 20,192.43 26,784.42
04/30/05 25,406.42 19,809.46 25,227.30
05/31/05 25,691.88 20,439.78 25,474.18
06/30/05 27,821.90 20,468.79 26,375.61
07/31/05 29,666.44 21,229.99 27,867.76
08/31/05 31,642.74 21,036.29 28,589.22
09/30/05 34,299.76 21,206.67 29,866.54
10/31/05 31,335.32 20,853.14 27,958.96
11/30/05 32,433.26 21,641.85 28,919.95
12/31/05 34,380.82 21,649.38 29,285.02
01/31/06 39,986.65 22,222.61 32,540.94
02/28/06 37,508.54 22,282.91 30,593.35
03/31/06 40,347.54 22,560.28 31,840.83
04/30/06 44,221.10 22,863.21 33,324.28
05/31/06 41,526.45 22,205.18 32,262.24
06/30/06 41,430.21 22,235.28 32,749.87
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2006
One Year Five Year Ten Year
Global Resources Fund 48.91% 38.89% 15.27%
-----------------------------------------------------------------------
S&P 500 Index 8.63% 2.49% 8.31%
-----------------------------------------------------------------------
S&P Energy and Materials Index 24.17% 14.11% 12.59%
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. 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.
23
GLOBAL RESOURCES FUND
PERFORMANCE COMMENTARY
For the fiscal year ending June 30, 2006, the Global Resources Fund
returned 48.91 percent. In comparison, the S&P Energy Index and the
S&P Basic Materials Index rose by 24.57 percent and 21.62 percent,
respectively. The fund's strong relative performance was the product
of the investment team's disciplined process of analyzing global
economic conditions, monitoring commodity price trends and
identifying undervalued equities.
THE YEAR IN REVIEW - ECONOMIC AND POLITICAL ISSUES THAT AFFECTED THE
FUND
Critical drivers for the year included:
* Another year of strong economic growth, particularly from China,
pushed the demand for commodities to record levels despite
significantly higher prices.
* Pensions and hedge fund buying in the commodities market
accelerated over the past twelve months; as investors sought
higher returns, portfolio diversification and a hedge against the
inflationary effects of a depreciating U.S. Dollar.
* The inability of OPEC and non-OPEC crude oil producers to increase
global spare production capacity continues to magnify
geo-political tensions in exporting countries, which has helped
drive oil prices to new highs.
* Interest rate tightening by the world's central banks and a $175
billion reduction in the Japanese money supply effectively curbed
global money flows out of commodities and emerging markets during
the second quarter of calendar 2006.
* Populist elections in Latin America and labor strife in the mining
industry has threatened or delayed new projects and contributed to
already tight supplies.
Global economic growth over the past year has been surprisingly
strong. In April, the International Monetary Fund (IMF) reported
that 2005 global GDP growth came in at a very robust 4.8 percent,
half a percentage point higher than projected last September.
Moreover, the IMF increased its forecast for growth in 2006 by a 0.6
percent to 4.9 percent. Not surprisingly, emerging market countries
continued to fuel the global economy, as China, India and Russia
accounted for two-thirds of the revisions to global growth. In fact,
despite expectations for a decline in 2006, China's economy
increased by a very impressive 10.9 percent in the first half of the
year, driven largely by a 30 percent gain in fixed asset investment
involving roads, factory equipment and other infrastructure
projects. Looking
24
GLOBAL RESOURCES FUND
ahead, we expect the U.S. and global economy to slow moderately in 2007
mainly due to the lagged effects of global monetary tightening and higher
oil prices; however, we expect growth will be more than sufficient to drive
further demand for commodities.
One area of concern going forward is the recent acceleration in inflation
during the second half of the year. The core Consumer Price Index (excluding
food and energy) posted its fourth consecutive monthly gain of 0.3 percent
in June, its strongest pace since the first quarter of 1995. Additionally,
the overall annual rate of inflation climbed to 4.3 percent by June. These
factors raise the concern that the Fed may have to increase rates
considerably more than the current 5.25 percent. However, there are signs
that Fed Chairman Ben Bernanke may be forced to end the current rate
tightening campaign given recent weakness in housing and expectations for
slower consumer spending this fall.
INVESTMENT HIGHLIGHTS
STRENGTHS
* Precious metals hit multi-year highs with gold up 41 percent and
silver gaining 57 percent over the past 12 months. Strong
performance of the metals was the key driver for precious metals
equities - the Philadelphia Stock Exchange Gold & Silver Index(1)
gained 56 percent.
* Base metal prices hit record highs in the Spring of 2006 on strong
demand and declining global inventories. Annual price gains for
copper, nickel, and zinc were 123 percent, 46 percent and 162
percent respectively. As a result, the S&P/TSX Metals & Mining
Index(2) gained 77 percent.
* Crude oil prices gained 30 percent over the past year to $73.93 on
increasing global demand growth of 1.3 percent and rising
geo-political tensions that have curtailed or threaten to curtail
supply growth; the AMEX Major Oil Index(3) increased 30 percent.
* The fund built a significant position in oil service and equipment
equities, which gained 44 percent during the period due to a
rising rig count, higher day-rates and improving margins.
* World export steel prices climbed 49 percent over the past year as
steel consumption in China surged. The fund did not fully
participate in the strong rally for steel stocks during the
period, mainly due to rapidly growing steel capacity in China,
which could have weakened prices.
25
GLOBAL RESOURCES FUND
WEAKNESSES
* Natural gas prices in North America fell 13 percent over the past
year and declined 46 percent in the first half of 2006 on lower
demand for natural gas due to a mild winter in North America.
* New housing starts declined 11 percent year-over-year to 1.85
million units as the cost of financing homes increased.
* Poor industry fundamentals limited the fund's exposure to forest
and paper stocks, which outperformed briefly in the calendar
fourth quarter of 2005 due to merger and acquisition activity.
CURRENT OUTLOOK
OPPORTUNITIES
* In its annual regional economic outlook, the IMF provided a
bullish forecast for economic growth in 2006 and 2007 for Asia of
6.6 percent and 6.9 percent respectively.
* At the World Nuclear Fuel Cycle 2006 in Hong Kong, several
countries reviewed significant nuclear power capacity targets
including Russia's plans to supply 25 percent of its energy with
nuclear power by 2030, a 56 percent increase from 16 percent
today. China currently has 9 reactors (1.3 percent of energy) with
plans to build 30 100 megawatt reactors in the next 15 years.
* During China's eleventh five-year plan for the period 2006-2010,
total power investment is expected to reach $375 billion. As a
result, by 2010 annual copper use in the electric cable and wire
industry will likely approach 4.5 million metric tons, which is up
from the 3.64 million metric tons consumed in 2005, according to a
senior official from the state-run nonferrous metals information
service.
* According to a recent industry survey, oil and gas exploration and
production (E&P) spending growth will exceed last year's record
levels, with expenditures expected to rise by about 20 percent in
2006 vs. 2005.
THREATS
* There is a risk that the new Fed Chairman Ben Bernanke could
become overly aggressive and raise short term interest too much,
which would negatively impact U.S. housing/consumption and China's
export led economy.
* China's record 11.3 percent GDP growth in the second quarter of
2006 likely led to the Chinese central bank's recent statement
that it will raise the reserve ratio by 50 basis points to 8.5
percent starting on August 15. The central bank wants to "restrain
credit growth" and restrict the
26
GLOBAL RESOURCES FUND
circulation of capital, the statement said. The ratio was last raised
on June 16, 2006, by 0.5 basis points.
* U.S. natural gas storage inventories at 2,542 billion cubic feet,
which is 32 percent ahead of normal levels and 20 percent ahead of
last year. This could weigh on natural gas prices through the end
of the storage injection season until winter weather begins.
* The Energy Information Administration reported coal stocks at
domestic utilities rose to 133.2 million tons (up 6 percent from
125.1 in April 2006). Mild winter weather and a positive supply
response have driven the increasing stockpiles which could weigh
on coal prices.
* Rising commodity prices and higher corporate profits are garnering
more attention from labor unions and developing countries who are
demanding higher wages and stronger production sharing contracts
and increased tax rates.
(1)The Philadelphia Stock Exchange Gold & Silver Index (XAU) is a
capitalization-weighted index that includes the leading companies
involved in the mining of gold and silver.
(2)The S&P/TSX Metals & Mining Index is a modified capitalization-weighted
index, whose equity weights are capped 25 percent and index constituents
are derived from a subset stock pool of S&P/TSX Composite Index stocks.
(3)The AMEX Major Oil Index is a price-weighted index, measuring the
performance of the oil industry through changes in the sum of the
prices of component stocks.
27
GLOBAL RESOURCES FUND
TOP 10 EQUITY HOLDINGS BASED ON TOTAL INVESTMENTS June 30, 2006
GOLDCORP, INC. 3.05%
GOLD MINING
---------------------------------------------------------------
PETROLEO BRASILEIRO S.A. 2.21%
OIL & GAS - INTEGRATED
---------------------------------------------------------------
VALERO ENERGY CORP. 1.96%
OIL & GAS REFINING & MARKETING
---------------------------------------------------------------
OAO GAZPROM 1.89%
OIL & GAS - INTEGRATED
---------------------------------------------------------------
SUNCOR ENERGY, INC. 1.81%
OIL & GAS - INTEGRATED
---------------------------------------------------------------
WHITE NILE LTD. 1.76%
OIL & GAS EXPLORATION & PRODUCTION - JUNIOR
---------------------------------------------------------------
ENCANA CORP. 1.69%
OIL & GAS EXPLORATION & PRODUCTION - SENIOR
---------------------------------------------------------------
SCHLUMBERGER LTD. 1.68%
OIL & GAS EQUIPMENT & SERVICES
---------------------------------------------------------------
MCDERMOTT INTERNATIONAL, INC. 1.66%
OIL & GAS EQUIPMENT & SERVICES
---------------------------------------------------------------
SILVER WHEATON CORP. 1.61%
SILVER MINING
PORTFOLIO PROFILE June 30, 2006
Country Distribution* % of Investments
---------------------------------------------------------------
Canada 48.69%
---------------------------------------------------------------
United States 29.95%
---------------------------------------------------------------
Russian Federation 3.36%
---------------------------------------------------------------
Brazil 3.03%
---------------------------------------------------------------
Bermuda 2.55%
---------------------------------------------------------------
Cayman Islands 2.15%
---------------------------------------------------------------
Other Foreign 10.27%
---------------------------------------------------------------
* Country distribution shown is based on domicile and the
locale of company operations may be different.
28
GLOBAL RESOURCES FUND
PORTFOLIO ALLOCATION BY INDUSTRY SECTOR
BASED ON TOTAL INVESTMENTS June 30, 2006
[Global Resources Fund Pie Graph]
Oil & Gas Exploration & Production 18.3%
Oil & Gas - Integrated 12.4%
Oil & Gas Equipment & Services 12.4%
Oil & Gas Royalty Trusts 7.8%
Oil & Gas Drilling 4.3%
Metals & Mining 14.8%
Gold 13.7%
General Basic Materials 5.4%
Other Sectors 6.3%
Cash Equivalent 4.6%
Energy:
Oil & Gas Exploration & Production 18.3%
Oil & Gas - Integrated (includes 12.4%
Refining and Marketing)
Oil & Gas Equipment & Services 12.4%
Oil & Gas Royalty Trusts 7.8%
Oil & Gas Drilling 4.3%
Total Energy 55.2%
Basic Materials:
Metals & Mining (includes Copper, 14.8%
Platinum Group Metals, Zinc, Nickel
and Coal)
Gold (includes Gold Mining, Silver 13.7%
Mining and Gold & Copper Mining)
General Basic Materials 5.4%
Total Basic Materials 33.9%
Other Sectors 6.3%
Cash Equivalent 4.6%
-----
Total Investments 100.0%
=====
29
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 GRAPHS
WORLD PRECIOUS MINERALS FUND
[World Precious Minerals Fund Graph]
World Precious S&P 500 AMEX Gold
Date Minerals Fund Index BUGS Index
06/30/96 $10,000.00 $10,000.00 $10,000.00
07/31/96 9,744.32 9,558.18 9,737.66
08/30/96 10,634.47 9,759.70 9,978.18
09/30/96 10,321.97 10,309.11 9,298.34
10/31/96 10,052.08 10,593.32 9,112.44
11/29/96 9,891.10 11,394.09 9,157.76
12/31/96 9,597.54 11,168.22 8,856.73
01/31/97 9,061.56 11,866.02 8,562.24
02/28/97 9,983.24 11,959.10 9,877.18
03/31/97 8,791.06 11,467.85 8,750.95
04/30/97 8,360.28 12,152.52 7,840.56
05/30/97 8,811.10 12,892.06 8,307.85
06/30/97 7,989.60 13,469.73 8,053.67
07/31/97 7,608.90 14,541.46 8,011.68
08/29/97 7,789.23 13,726.87 7,966.50
09/30/97 8,119.84 14,478.67 8,620.13
10/31/97 6,757.35 13,995.01 6,723.33
11/28/97 5,359.79 14,643.04 5,507.29
12/31/97 5,654.83 14,894.21 5,308.04
01/30/98 6,141.71 15,058.86 5,387.52
02/27/98 5,817.12 16,145.02 5,540.11
03/31/98 6,212.71 16,971.84 6,045.12
04/30/98 6,471.36 17,142.34 6,519.97
05/29/98 5,553.40 16,847.60 5,488.89
06/30/98 5,000.60 17,531.92 5,043.73
07/31/98 4,650.66 17,345.26 4,499.32
08/31/98 3,636.34 14,837.47 3,375.93
09/30/98 5,020.88 15,788.03 4,951.00
10/30/98 4,954.95 17,072.28 4,641.05
11/30/98 4,625.30 18,106.93 4,343.28
12/31/98 4,763.25 19,150.40 3,760.04
01/29/99 4,560.12 19,951.22 3,740.91
02/26/99 4,463.64 19,331.19 3,699.23
03/31/99 4,372.23 20,104.50 3,563.39
04/30/99 4,895.28 20,882.69 4,310.93
05/28/99 4,001.53 20,389.68 3,669.93
06/30/99 3,955.83 21,521.42 3,898.61
07/30/99 3,732.39 20,849.36 3,737.98
08/31/99 3,889.82 20,746.35 3,937.15
09/30/99 4,900.35 20,177.51 4,829.07
10/29/99 4,397.62 21,454.43 4,445.63
11/30/99 4,204.66 21,890.49 4,199.85
12/31/99 4,158.95 23,179.57 4,135.06
01/31/00 3,691.77 22,015.05 3,677.03
02/29/00 3,752.71 21,598.31 3,756.84
03/31/00 3,468.33 23,711.30 3,478.90
04/28/00 3,295.68 22,998.01 3,294.98
05/31/00 3,194.12 22,526.19 3,193.12
06/30/00 3,265.21 23,081.53 3,262.81
07/31/00 2,919.90 22,720.74 2,774.95
08/31/00 3,036.70 24,131.86 2,836.94
09/29/00 2,726.93 22,855.54 2,617.28
10/31/00 2,437.48 22,758.86 2,163.15
11/30/00 2,412.09 20,964.22 2,363.48
12/31/00 2,575.10 21,066.66 2,298.77
01/31/01 2,549.60 21,814.12 2,675.81
02/28/01 2,544.50 19,825.21 3,090.03
03/30/01 2,376.23 18,569.19 2,792.11
04/30/01 2,600.59 20,012.26 3,150.39
05/31/01 2,702.58 20,146.36 3,521.76
06/30/01 2,692.38 19,656.00 3,558.21
07/31/01 2,539.40 19,462.23 3,416.04
08/31/01 2,575.10 18,243.88 3,706.43
09/30/01 2,722.98 16,770.60 4,038.06
10/31/01 2,687.28 17,090.31 3,818.69
11/30/01 2,671.98 18,395.33 3,604.87
12/31/01 2,768.87 18,556.49 3,675.84
01/31/02 3,253.29 18,285.71 4,288.10
02/28/02 3,564.34 17,933.05 4,862.59
03/31/02 4,145.65 18,607.44 5,577.67
04/30/02 4,579.09 17,479.40 6,069.38
05/31/02 6,445.39 17,350.49 7,984.30
06/30/02 5,318.47 16,122.22 7,170.58
07/31/02 3,824.40 14,865.43 6,063.98
08/31/02 4,354.72 14,963.02 7,285.33
09/30/02 4,385.32 13,336.85 7,136.57
10/31/02 3,804.01 14,510.71 6,278.08
11/30/02 3,844.80 15,364.80 6,569.34
12/31/02 5,078.61 14,462.15 8,228.91
01/31/03 5,272.33 14,083.30 8,170.51
02/28/03 5,078.61 13,871.99 7,507.26
03/31/03 4,785.42 14,006.67 7,030.74
04/30/03 4,659.76 15,160.41 7,093.95
05/31/03 5,000.08 15,959.17 8,054.74
06/30/03 5,104.79 16,162.76 8,508.23
07/31/03 5,434.64 16,447.73 9,342.07
08/31/03 6,371.83 16,768.50 11,052.73
09/30/03 6,863.98 16,590.43 11,147.24
10/31/03 8,398.04 17,528.93 12,340.17
11/30/03 9,785.49 17,683.17 14,182.40
12/31/03 9,786.40 18,610.55 13,875.51
01/31/04 9,081.50 18,952.15 12,327.28
02/29/04 9,480.94 19,215.58 12,860.92
03/31/04 10,309.21 18,925.68 13,502.16
04/30/04 8,059.39 18,628.58 10,240.19
05/31/04 8,323.73 18,884.22 11,455.66
06/30/04 8,035.89 19,251.42 10,826.66
07/31/04 7,648.20 18,614.26 10,668.44
08/31/04 7,977.15 18,689.55 11,902.71
09/30/04 9,210.73 18,891.97 13,285.82
10/31/04 9,422.20 19,180.59 13,421.91
11/30/04 10,303.33 19,956.67 13,619.48
12/31/04 9,880.96 20,635.76 12,389.29
01/31/05 9,367.58 20,132.77 11,606.42
02/28/05 10,333.93 20,556.45 12,406.16
03/31/05 9,850.76 20,192.43 11,653.44
04/30/05 8,522.02 19,809.46 10,285.96
05/31/05 8,491.82 20,439.78 10,738.55
06/30/05 9,361.54 20,468.79 11,651.29
07/31/05 9,415.90 21,229.99 11,382.56
08/31/05 9,989.67 21,036.29 11,926.39
09/30/05 11,402.96 21,206.67 14,216.14
10/31/05 10,448.69 20,853.14 12,928.73
11/30/05 11,493.56 21,641.85 14,128.91
12/31/05 12,932.79 21,649.38 16,093.36
01/31/06 16,000.50 22,222.61 19,911.28
02/28/06 15,593.17 22,282.91 17,796.14
03/31/06 17,820.77 22,560.28 19,586.81
04/30/06 19,997.45 22,863.21 22,071.02
05/31/06 18,412.67 22,205.18 19,450.62
06/30/06 18,368.12 22,235.28 19,677.59
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2006
One Year Five Year Ten Year
World Precious Minerals Fund 96.21% 46.79% 6.27%
------------------------------------------------------------------------
S&P 500 Index 8.63% 2.49% 8.31%
------------------------------------------------------------------------
AMEX Gold BUGS Index 68.89% 40.73% 7.00%
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. 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 AMEX Gold BUGS Index
is a modified equal-dollar weighted index of companies involved in major
gold mining.
30
GOLD AND PRECIOUS MINERALS FUNDS
GOLD SHARES FUND
[Gold Shares Fund Graph]
Gold Shares S&P 500 Philadelphia Stock Exchange
Date Fund Index Gold & Silver Index
06/30/96 $10,000.00 $10,000.00 $10,000.00
07/31/96 9,891.30 9,558.18 10,053.48
08/30/96 9,836.96 9,759.70 10,078.96
09/30/96 8,967.39 10,309.11 9,320.71
10/31/96 8,804.35 10,593.32 9,357.11
11/29/96 8,206.52 11,394.09 9,746.16
12/31/96 7,771.74 11,168.22 9,472.88
01/31/97 6,994.57 11,866.02 8,943.28
02/28/97 7,993.79 11,959.10 9,945.56
03/31/97 6,883.54 11,467.85 8,461.98
04/30/97 6,328.42 12,152.52 7,630.56
05/30/97 6,439.44 12,892.06 8,496.24
06/30/97 5,351.40 13,469.73 7,792.91
07/31/97 5,465.26 14,541.46 7,989.90
08/29/97 5,522.19 13,726.87 8,074.13
09/30/97 5,408.33 14,478.67 8,942.22
10/31/97 4,212.80 13,995.01 7,181.50
11/28/97 3,245.00 14,643.04 5,801.72
12/31/97 3,313.31 14,894.21 6,079.31
01/30/98 3,313.31 15,058.86 6,143.23
02/27/98 3,022.67 16,145.02 6,186.44
03/31/98 3,080.80 16,971.84 6,700.20
04/30/98 3,255.18 17,142.34 7,216.05
05/29/98 2,615.77 16,847.60 6,140.07
06/30/98 2,203.06 17,531.92 5,895.59
07/31/98 2,220.50 17,345.26 5,175.91
08/31/98 1,708.97 14,837.47 4,026.71
09/30/98 2,383.26 15,788.03 6,176.37
10/30/98 2,330.94 17,072.28 6,214.52
11/30/98 2,185.62 18,106.93 5,858.31
12/31/98 2,220.50 19,150.40 5,365.11
01/29/99 2,121.68 19,951.22 5,223.90
02/26/99 2,075.18 19,331.19 5,002.47
03/31/99 2,063.55 20,104.50 4,943.91
04/30/99 2,296.07 20,882.69 6,081.49
05/28/99 1,935.67 20,389.68 5,054.45
06/30/99 1,987.99 21,521.42 5,557.65
07/30/99 1,860.11 20,849.36 5,220.53
08/31/99 1,958.92 20,746.35 5,650.35
09/30/99 2,493.70 20,177.51 6,734.44
10/29/99 2,232.13 21,454.43 5,837.21
11/30/99 2,139.12 21,890.49 5,636.23
12/31/99 2,162.37 23,179.57 5,714.42
01/31/00 1,900.79 22,015.05 5,042.69
02/29/00 1,912.42 21,598.31 5,061.04
03/31/00 1,767.10 23,711.30 4,789.66
04/28/00 1,627.59 22,998.01 4,641.31
05/31/00 1,627.59 22,526.19 4,790.20
06/30/00 1,697.35 23,081.53 4,921.54
07/31/00 1,534.59 22,720.74 4,329.04
08/31/00 1,627.59 24,131.86 4,486.38
09/29/00 1,522.96 22,855.54 4,279.91
10/31/00 1,371.83 22,758.86 3,761.22
11/30/00 1,395.08 20,964.22 4,053.54
12/31/00 1,517.15 21,066.66 4,427.31
01/31/01 1,499.71 21,814.12 4,207.71
02/28/01 1,534.59 19,825.21 4,547.95
03/30/01 1,395.08 18,569.19 4,121.39
04/30/01 1,581.09 20,012.26 4,776.38
05/31/01 1,650.84 20,146.36 4,959.79
06/30/01 1,645.03 19,656.00 4,624.05
07/31/01 1,522.96 19,462.23 4,607.58
08/31/01 1,563.65 18,243.88 4,932.28
09/30/01 1,627.59 16,770.60 5,040.66
10/31/01 1,604.34 17,090.31 4,757.56
11/30/01 1,592.71 18,395.33 4,597.31
12/31/01 1,685.72 18,556.49 4,761.87
01/31/02 1,964.74 18,285.71 5,365.52
02/28/02 2,249.56 17,933.05 5,720.83
03/31/02 2,569.27 18,607.44 6,227.41
04/30/02 2,825.03 17,479.40 6,497.10
05/31/02 3,743.46 17,350.49 7,419.31
06/30/02 3,069.17 16,122.22 6,296.32
07/31/02 2,267.00 14,865.43 5,334.18
08/31/02 2,621.59 14,963.02 6,166.50
09/30/02 2,697.15 13,336.85 6,192.13
10/31/02 2,325.13 14,510.71 5,632.76
11/30/02 2,348.38 15,364.80 5,627.43
12/31/02 3,057.55 14,462.15 6,826.11
01/31/03 3,133.11 14,083.30 6,847.45
02/28/03 2,935.48 13,871.99 6,443.31
03/31/03 2,749.47 14,006.67 5,994.67
04/30/03 2,627.40 15,160.41 5,851.96
05/31/03 2,923.85 15,959.17 6,592.01
06/30/03 3,011.05 16,162.76 7,059.95
07/31/03 3,167.99 16,447.73 7,283.46
08/31/03 3,685.33 16,768.50 8,199.51
09/30/03 3,848.09 16,590.43 8,215.18
10/31/03 4,446.81 17,528.93 8,845.57
11/30/03 5,283.86 17,683.17 9,897.46
12/31/03 5,108.44 18,610.55 9,826.53
01/31/04 4,531.12 18,952.15 8,636.93
02/29/04 4,700.23 19,215.58 9,035.25
03/31/04 5,155.10 18,925.68 9,509.27
04/30/04 3,959.63 18,628.58 7,429.02
05/31/04 4,280.36 18,884.22 8,154.25
06/30/04 4,082.09 19,251.42 7,835.02
07/31/04 3,843.00 18,614.26 7,901.50
08/31/04 4,052.93 18,689.55 8,626.40
09/30/04 4,636.09 18,891.97 9,284.32
10/31/04 4,694.40 19,180.59 9,423.82
11/30/04 5,050.13 19,956.67 9,740.36
12/31/04 4,779.61 20,635.76 9,070.51
01/31/05 4,550.89 20,132.77 8,350.37
02/28/05 4,867.58 20,556.45 9,054.95
03/31/05 4,562.62 20,192.43 8,594.10
04/30/05 3,964.44 19,809.46 7,662.50
05/31/05 4,052.40 20,439.78 7,927.99
06/30/05 4,498.11 20,468.79 8,547.71
07/31/05 4,533.30 21,229.99 8,346.54
08/31/05 4,838.25 21,036.29 8,821.42
09/30/05 5,530.27 21,206.67 10,416.81
10/31/05 5,190.13 20,853.14 9,819.07
11/30/05 5,618.24 21,641.85 10,590.97
12/31/05 6,347.24 21,649.38 11,841.69
01/31/06 7,907.36 22,222.61 14,268.30
02/28/06 7,492.12 22,282.91 12,344.22
03/31/06 8,565.81 22,560.28 13,128.17
04/30/06 9,853.05 22,863.21 14,663.76
05/31/06 9,135.28 22,205.18 13,235.87
06/30/06 9,182.74 22,235.28 13,346.23
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2006
One Year Five Year Ten Year
Gold Shares Fund 104.15% 41.02% (0.85)%
-------------------------------------------------------------------------
S&P 500 Index 8.63% 2.49% 8.31%
-------------------------------------------------------------------------
Philadelphia Stock Exchange Gold &
Silver Index 56.14% 23.59% 2.93%
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. 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 Philadelphia Stock
Exchange Gold & Silver Index is a capitalization-weighted index which
includes the leading companies involved in the mining of gold and silver.
PERFORMANCE COMMENTARY
For the year ending June 30, 2006, the World Precious Minerals Fund
returned 96.21 percent and the Gold Shares Fund returned 104.15
percent. The AMEX Gold BUGS Index, World Precious Minerals Fund's
benchmark, gained 68.89 percent, while the Philadelphia Stock
Exchange Gold & Silver Index, Gold Shares Fund's benchmark, returned
56.14 percent. Spot gold closed at $615.85, up $180.35 or 41.41
percent for the same period. In contrast, the S&P 500 Index posted a
modest gain of 8.63 percent while the U.S. Trade-Weighted Dollar
Index(1) fell 4.41 percent over the past year. Over the same period,
the yield on the 90-day Treasury
31
GOLD AND PRECIOUS MINERALS FUNDS
bill jumped almost 60 percent, tacking on 186 basis points to finish at 4.98
percent.
Our investment process is an active management style versus a more
passive indexing approach. This is what has allowed us to create
value for our shareholders. Over the past year, 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 deposits, such as
Goldcorp, Inc.;(2) Northern Orion Resources, Inc.;(3) and
Yamana Gold, Inc.(4) In addition, we believe silver deposits
will be more strategic over time and have been an early
investor in companies like Silver Wheaton Corp.(5) and
Silvercorp Metals, Inc.(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, and
cash flow multiples.
7. We used statistical models to manage the price risk of the
portfolios, looking for significant moves where the probability
of a price reversal is high, and adjusted our cash position
accordingly.
YEAR IN REVIEW - ECONOMIC AND POLITICAL ISSUES THAT AFFECTED THE
FUNDS
Critical drivers for the year include:
* Major gold producers are reporting a declining production profile.
According to the South Africa's Chamber of Mines, their gold
production fell to an 82-year low in 2005, further tightening
worldwide supply.
32
GOLD AND PRECIOUS MINERALS FUNDS
* Total production costs are climbing due to currency effects,
higher labor costs, rising general and administrative costs,
higher royalties at higher gold prices, and bigger exploration
budgets. This has contributed to lowering the profitability of the
gold industry, particularly when investors have been looking for
higher profits to be achieved.
* Resource and reserve quality has also fallen. Despite that greater
volumes of ore have been processed at the mines; the average grade
of the ore has fallen close to 20 percent over the last five
years.
* Political changes in Peru, Bolivia and ongoing Chavez style
politics in Venezuela combined with at least 12 countries going to
the polls in Latin America in 2006 may signal a change for the
worse in trying to advance new projects in the region.
* Investment demand for gold and silver has grown substantially over
the past year. For the streetTracks Gold Trust(7) ETF, assets
invested in gold have climbed by 198 percent to $7.33 billion in
the last year with physical holdings of about 12 million ounces of
gold. The iShares Silver Trust(8) ETF which started trading at the
end of April has accumulated approximately 90 million ounces of
silver purchases over its first two-months of trading.
INVESTMENT HIGHLIGHTS
STRENGTHS
* The price of gold eclipsed a 25-year high in May 2006. Gold Fields
Mineral Services (GFMS), a consulting group, forecast in its
annual survey released in April that gold prices could surge past
$800 an ounce in 2006 under the right circumstances.
* GFMS noted that sentiment within the central bank community seems
to have changed, and more recent comments reflect the importance
of gold as a reserve asset.
* At the London Bullion Market Association's Precious Metals
Conference held in November, Maria Gueguina, Head of External
Reserves Management for the Russian Central bank, made a statement
that they want to raise their gold holdings to 10 percent of their
reserves.
WEAKNESSES
* While gold was making higher highs, the majority of the gold
stocks continue to lag the price performance of gold bullion.
Interestingly, when gold had one of its biggest falls in recent
history as we closed out the year, gold-backed exchange traded
funds actually experienced an increase in their holdings in
bullion.
33
GOLD AND PRECIOUS MINERALS FUNDS
* Gold equities, as measured by the Philadelphia Stock Exchange Gold
& Silver Index, are up 12.14 percent over the last six months;
however, they have underperformed the 19.12 percent return that
gold bullion has delivered over this period.
* In a major contraction of the monetary base, Japan's central bank
slashed roughly $175 billion in reserves from the system during
the last three months. Much of this money was invested abroad via
the Euro-Yen market where cheap capital to hedge funds and
investment banks had been funneled. This triggered a rout in
commodity and emerging markets as we closed out the period.
CURRENT OUTLOOK
OPPORTUNITIES
* A recent study released by M. Murenbeeld & Associates examined the
length of gold cycles going back to 1800. It found that the
average length of a decline was just over 19 years with the most
recent decline being 21 years. The average rising period for gold
has been just over 25 years with the most recent period, 1970 to
1980, being only 10 years in length. We may only be four years
into the current cycle.
* An economic research group in China suggested that their
government should quadruple its gold reserves from 600 tonnes to
2,400 tonnes to reflect China's status as a major trading nation.
Currently, gold accounts for 1.3 percent of China's reserves while
the global average is closer to 10.5 percent.
* Fund flows into commodities have been very strong and could go
higher with pension funds entering the game. The recent note that
AIG Global Investment Group's(9) Japan unit may invest $4.4
billion or 3 percent of assets into commodity related investments
over the next five years as they seek to diversify from stocks and
bonds should help to sustain the rally in commodities as they add
to positions. Only two percent of fund managers are estimated to
have exposure to gold. Dr. Marc Faber, an investment strategist
and author specializing in Asian and commodities markets, recently
noted that dramatic commodity markets all originated after
extended bear markets and that gold prices soared more than 20-
fold and oil rose 8-fold from 1970 to 1980.
THREATS
* The European Central Bank had put a 6-month halt on it gold sales
program in March 2006. This is set to expire in September 2006,
and this may overshadow the gold market as that period expires.
34
GOLD AND PRECIOUS MINERALS FUNDS
* The gold contango has widened from about 350 basis points to
almost 560 basis points over the past 12 months, making forward
sales of gold more attractive, but we have not seen any momentum
shift to forward selling at this time.
* As we closed out the year, it became apparent that most of the
weak hands have exited the gold market and that buyers who missed
the most recent run in gold were on the sidelines waiting for just
such an opportunity to build their gold positions. However, for
the gold stocks, buying interest seemed to have been concentrated
in the senior gold stocks versus the more junior gold stocks,
perhaps indicating a lack of commitment to the sector at this
time.
(1)The U.S. Trade Weighted Dollar Index provides a general
indication of the international value of the U.S. dollar.
(2)This security comprised 17.94% of the total net assets of the
World Precious Minerals Fund and 23.56% of the total net assets of
the Gold Shares Fund as of June 30, 2006.
(3)This security comprised 5.53% of the total net assets of the
World Precious Minerals Fund and 5.53% of the total net assets of
the Gold Shares Fund as of June 30, 2006.
(4)This security comprised 3.16% of the total net assets of the
World Precious Minerals Fund and 3.94% of the total net assets of
the Gold Shares Fund as of June 30, 2006.
(5)This security comprised 3.52% of the total net assets of the
World Precious Minerals Fund and 2.26% of the total net assets of
the Gold Shares Fund as of June 30, 2006.
(6)This security comprised 1.63% of the total net assets of the
World Precious Minerals Fund and 0.00% of the total net assets of
the Gold Shares Fund as of June 30, 2006.
(7)This security comprised 0.56% of the total net assets of the
World Precious Minerals Fund and 0.05% of the total net assets of
the Gold Shares Fund as of June 30, 2006.
(8)This security comprised 0.24% of the total net assets of the
World Precious Minerals Fund and 0.00% of the total net assets of
the Gold Shares Fund as of June 30, 2006.
(9)Neither World Precious Minerals Fund nor the Gold Shares Fund
held this security as of June 30, 2006.
35
GOLD AND PRECIOUS MINERALS FUNDS
WORLD PRECIOUS MINERALS FUND
TOP 10 EQUITY HOLDINGS BASED ON TOTAL INVESTMENTS June 30, 2006
GOLDCORP, INC. 18.05%
SENIOR GOLD PRODUCERS
---------------------------------------------------------------
NORTHERN ORION RESOURCES, INC. 5.57%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------
RANDGOLD RESOURCES LTD. 4.01%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------
SILVER WHEATON CORP. 3.54%
METAL & MINERAL MINING
---------------------------------------------------------------
YAMANA GOLD, INC. 3.18%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------
MERIDIAN GOLD, INC. 2.67%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------
GOLD FIELDS LTD. 2.04%
SENIOR GOLD PRODUCERS
---------------------------------------------------------------
SILVERCORP METALS, INC. 1.64%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------
MEXGOLD RESOURCES, INC. 1.54%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------
BEMA GOLD CORP. 1.51%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
36
GOLD AND PRECIOUS MINERALS FUNDS
GOLD SHARES FUND
TOP 10 EQUITY HOLDINGS BASED ON TOTAL INVESTMENTS June 30, 2006
GOLDCORP, INC. 24.07%
GOLD MINING
---------------------------------------------------------------
NORTHERN ORION RESOURCES, INC. 5.65%
GOLD MINING
---------------------------------------------------------------
YAMANA GOLD, INC. 4.02%
GOLD MINING
---------------------------------------------------------------
RANDGOLD RESOURCES LTD. 4.00%
GOLD MINING
---------------------------------------------------------------
MERIDIAN GOLD, INC. 3.88%
GOLD MINING
---------------------------------------------------------------
GOLD FIELDS LTD. 3.60%
GOLD MINING
---------------------------------------------------------------
FREEPORT-MCMORAN COPPER & GOLD, INC. 3.20%
GOLD MINING
---------------------------------------------------------------
AGNICO-EAGLE MINES LTD. 2.99%
GOLD MINING
---------------------------------------------------------------
BEMA GOLD CORP. 2.76%
GOLD MINING
---------------------------------------------------------------
SILVER WHEATON CORP. 2.31%
METAL & MINERAL MINING
37
GOLD AND PRECIOUS MINERALS FUNDS
WORLD PRECIOUS MINERALS FUND
PORTFOLIO PROFILE June 30, 2006
Country Distribution* % of Investments
---------------------------------------------------------------
Canada 64.12%
---------------------------------------------------------------
United States 23.91%
---------------------------------------------------------------
Jersey, Channel Islands 4.01%
---------------------------------------------------------------
South Africa 2.17%
---------------------------------------------------------------
United Kingdom 1.75%
---------------------------------------------------------------
Other Foreign 4.04%
---------------------------------------------------------------
* Country distribution shown is based on domicile and the
locale of company operations may be different.
GOLD SHARES FUND
PORTFOLIO PROFILE June 30, 2006
Country Distribution* % of Investments
---------------------------------------------------------------
Canada 55.51%
---------------------------------------------------------------
United States 33.73%
---------------------------------------------------------------
South Africa 4.98%
---------------------------------------------------------------
Jersey, Channel Islands 4.00%
---------------------------------------------------------------
Other Foreign 1.78%
---------------------------------------------------------------
* Country distribution shown is based on domicile and the
locale of company operations may be different.
38
GOLD AND PRECIOUS MINERALS FUNDS
WORLD PRECIOUS MINERALS FUND
PORTFOLIO ALLOCATION BY INDUSTRY June 30, 2006
BASED ON TOTAL INVESTMENTS
[World Precious Minerals Fund Pie Graph]
Intermediate & Junior Gold Producers 29.7%
Senior Gold Producers 23.2%
Cash Equivalent 19.9%
Gold/Mineral Exploration & Development 17.7%
Metal & Mineral Mining 5.8%
Other 3.7%
GOLD SHARES FUND
PORTFOLIO ALLOCATION BY INDUSTRY June 30, 2006
BASED ON TOTAL INVESTMENTS
[Gold Shares Fund Pie Graph]
Gold Mining 68.0%
Cash Equivalent 27.8%
Metal & Mineral Mining 2.9%
Other 1.3%
39
EXPENSE EXAMPLE June 30, 2006
As a shareholder of the funds, you incur two types of costs: (1)
transaction costs, including short-term trading fees and exchange
fees; and (2) ongoing costs, including management fees and other
fund expenses. This example is intended to help you understand your
ongoing costs (in dollars) of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the
beginning of the period and held for the entire period as indicated
below.
* ACTUAL EXPENSES. The first line of the following table for each
fund provides information about actual account values and actual
expenses. You may use the information in this line, together with
the amount you invested, to estimate the expenses you paid over
the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then
multiply the result by the number in the first line under the
heading "Expenses Paid During Period" to estimate the expenses you
paid on your account during this period.
* HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The second line of
the following table for each fund provides information about
hypothetical account values and hypothetical expenses based on the
fund's actual expense ratio and an assumed rate of return of 5
percent per year before expenses, which is not the fund's actual
return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you
paid for the period. You may use this information to compare the
ongoing costs of investing in these funds and other funds. To do
so, compare this 5 percent hypothetical example with the 5 percent
hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to
highlight your ongoing costs only and do not reflect any direct or
transactional costs, such as small account, exchange or short-term
trading fees. Therefore, the second line of the table is useful in
comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if
these direct or transactional costs were included, your costs would
have been higher.
40
EXPENSE EXAMPLE June 30, 2006
- --------------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30, 2006
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING
JANUARY 1, 2006 JUNE 30, 2006 PERIOD*
- --------------------------------------------------------------------------------------
U.S. TREASURY SECURITIES CASH FUND
Based on Actual Fund Return $1,000.00 $1,018.10 $ 4.43
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,020.41 $ 4.43
- --------------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES SAVINGS
FUND
Based on Actual Fund Return $1,000.00 $1,010.30 $ 2.25
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,011.28 $ 2.26
- --------------------------------------------------------------------------------------
NEAR-TERM TAX FREE FUND
Based on Actual Fund Return $1,000.00 $1,000.95 $ 2.23
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,011.28 $ 2.26
- --------------------------------------------------------------------------------------
TAX FREE FUND
Based on Actual Fund Return $1,000.00 $1,002.35 $ 3.48
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,010.66 $ 3.51
- --------------------------------------------------------------------------------------
ALL AMERICAN EQUITY FUND
Based on Actual Fund Return $1,000.00 $1,026.95 $ 8.91
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,008.06 $ 8.75
- --------------------------------------------------------------------------------------
CHINA REGION OPPORTUNITY FUND
Based on Actual Fund Return $1,000.00 $1,063.40 $11.78
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,006.86 $11.16
- --------------------------------------------------------------------------------------
GLOBAL RESOURCES FUND
Based on Actual Fund Return $1,000.00 $1,102.50 $ 5.12
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,010.07 $ 4.69
- --------------------------------------------------------------------------------------
WORLD PRECIOUS MINERALS FUND
Based on Actual Fund Return $1,000.00 $1,210.15 $ 6.16
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,009.85 $ 5.14
- --------------------------------------------------------------------------------------
GOLD SHARES FUND
Based on Actual Fund Return $1,000.00 $1,223.35 $ 8.10
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,009.09 $ 6.68
- --------------------------------------------------------------------------------------
<FN>
*These calculations are based on expenses incurred in the most
recent fiscal half-year. The funds' annualized six-month expense
ratios for the six-month period ended June 30, 2006, were 0.88%,
0.45%, 0.45%, 0.70%, 1.75%, 2.23%, 0.94%, 1.03% and 1.34%,
respectively, for the 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 Funds. The dollar amounts shown as
"Expenses Paid" are equal to the annualized expense ratio multiplied
by the average account value over the period, multiplied by 181, the
number of days in the most recent fiscal half-year, then divided by
365 days in the current fiscal year.
</FN>
41
U.S. TREASURY SECURITIES CASH FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
UNITED STATES
GOVERNMENT COUPON MATURITY PRINCIPAL
OBLIGATIONS 54.25% RATE DATE AMOUNT VALUE
UNITED STATES TREASURY BILLS 33.43%
- -------------------------------------------------------------------------------------
Yield 4.71% 07/06/06 $10,000,000 $ 9,993,458
Yield 4.57% 07/27/06 20,000,000 19,934,169
Yield 4.91% 10/05/06 10,000,000 9,870,867
------------
39,798,494
UNITED STATES TREASURY NOTES 20.82%
- -------------------------------------------------------------------------------------
3.50% 11/15/06 10,000,000 9,954,077
3.125% 01/31/07 10,000,000 9,890,012
3.625% 04/30/07 5,000,000 4,934,679
------------
24,778,768
- -------------------------------------------------------------------------------------
TOTAL UNITED STATES GOVERNMENT OBLIGATIONS 64,577,262
- -------------------------------------------------------------------------------------
(cost $64,577,262)
REPURCHASE AGREEMENTS 45.75%
Joint Tri-Party Repurchase Agreements,
06/30/06, collateralized by U.S.
Treasury securities held in joint
tri-party repurchase accounts:
4.40% Bear Stearns, repurchase price
$25,009,167 4.40% 07/03/06 25,000,000 25,000,000
4.50% Morgan Stanley Dean Witter,
repurchase price $29,464,465 4.50% 07/03/06 29,453,420 29,453,420
- -------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS 54,453,420
- -------------------------------------------------------------------------------------
(cost $54,453,420)
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS 100.00% 119,030,682
- -------------------------------------------------------------------------------------
(cost $119,030,682)
Other assets and liabilities, net 0.00% (2,366)
------------
NET ASSETS 100% $119,028,316
------------
See notes to portfolios of investments and notes to financial statements.
42
U.S. GOVERNMENT SECURITIES SAVINGS FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
UNITED STATES
GOVERNMENT AND AGENCY COUPON MATURITY PRINCIPAL
OBLIGATIONS 99.76% RATE DATE AMOUNT VALUE
FEDERAL FARM CREDIT BANK 27.35%
- ------------------------------------------------------------------------------------
Discount Notes:
Yield 4.95% 07/05/06 $10,000,000 $ 9,994,500
Yield 4.99% 07/13/06 10,000,000 9,983,400
Yield 5.15% 07/21/06 14,380,000 14,338,937
Yield 5.18% 07/25/06 12,772,000 12,728,064
Yield 4.72% 11/09/06 5,000,000 4,915,577
Fixed Rates:
3.70% 07/05/06 6,900,000 6,899,227
2.13% 07/17/06 7,000,000 6,992,579
4.05% 08/11/06 3,000,000 2,999,900
2.80% 08/16/06 2,000,000 1,995,958
2.44% 09/01/06 1,000,000 995,142
2.60% 09/07/06 6,000,000 5,978,507
2.90% 09/29/06 2,500,000 2,490,759
2.38% 10/02/06 3,884,000 3,858,719
2.70% 11/24/06 5,000,000 4,961,138
4.63% 12/27/06 4,000,000 4,000,436
3.37% 12/28/06 2,000,000 1,984,199
1.88% 01/16/07 10,170,000 9,983,422
4.11% 02/02/07 5,000,000 4,964,514
Variable Rate:
4.75% 01/03/07 9,000,000 9,001,747
------------
119,066,725
FEDERAL HOME LOAN BANK 72.41%
- ------------------------------------------------------------------------------------
Discount Notes:
Yield 4.95% 07/03/06 135,175,000 135,138,032
Yield 5.00% 07/05/06 19,750,000 19,739,028
Yield 5.07% 07/06/06 24,997,000 24,979,398
Yield 5.08% 07/12/06 25,000,000 24,961,225
Yield 5.18% 07/19/06 20,000,000 19,948,350
Yield 5.21% 07/26/06 10,000,000 9,963,958
Fixed Rates:
3.25% 07/21/06 4,000,000 3,998,499
2.75% 07/28/06 4,000,000 3,996,477
2.50% 08/14/06 4,350,000 4,340,203
3.50% 08/15/06 1,000,000 998,192
2.95% 09/14/06 1,595,000 1,587,683
2.70% 09/29/06 2,000,000 1,990,278
4.67% 09/29/06 2,000,000 1,996,897
5.40% 10/25/06 1,000,000 1,001,105
3.00% 11/06/06 1,585,000 1,575,974
6.50% 11/15/06 1,400,000 1,406,976
See notes to portfolios of investments and notes to financial statements.
43
U.S. GOVERNMENT SECURITIES SAVINGS FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
UNITED STATES
GOVERNMENT AND AGENCY COUPON MATURITY PRINCIPAL
OBLIGATIONS RATE DATE AMOUNT VALUE
FEDERAL HOME LOAN BANK (CONT'D)
- ------------------------------------------------------------------------------------
3.25% 11/28/06 $ 1,000,000 $ 992,617
4.28% 11/28/06 2,000,000 1,993,966
2.75% 12/15/06 2,520,000 2,493,517
3.38% 12/15/06 1,900,000 1,887,474
2.65% 01/22/07 5,000,000 4,931,074
4.70% 01/30/07 3,000,000 3,000,000
2.80% 02/09/07 5,000,000 4,929,899
5.00% 02/09/07 3,000,000 3,000,000
2.50% 02/13/07 2,000,000 1,966,538
5.08% 02/22/07 6,250,000 6,242,315
3.75% 03/07/07 5,000,000 4,951,788
2.85% 03/08/07 2,000,000 1,967,044
4.00% 04/05/07 3,500,000 3,464,301
4.00% 04/18/07 3,000,000 2,969,837
3.17% 05/04/07 5,000,000 4,913,899
2.63% 05/15/07 2,410,000 2,349,425
3.03% 05/18/07 3,305,000 3,241,851
Step Coupons:
3.50% 11/24/06 1,400,000 1,396,100
3.00% 12/22/06 1,000,000 990,224
------------
315,304,144
- ------------------------------------------------------------------------------------
TOTAL INVESTMENTS 99.76% 434,370,869
- ------------------------------------------------------------------------------------
(cost $434,370,869)
Other assets and liabilities,
net 0.24% 1,046,370
------------
NET ASSETS 100% $435,417,239
------------
See notes to portfolios of investments and notes to financial statements.
44
NEAR-TERM TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS 92.77% RATE DATE AMOUNT VALUE
ALABAMA 2.86%
- --------------------------------------------------------------------------------------
DCH Health Care Authority Facilities
Revenue 5.00% 06/01/09 $ 250,000 $ 256,227
Mountain Brook City Board of Education
Capital Outlay 4.00% 02/15/15 200,000 196,844
-----------
453,071
ALASKA 1.85%
- --------------------------------------------------------------------------------------
Alaska Municipal Bond Bank Authority,
Series A 4.00% 02/01/16 300,000 292,533
ARIZONA 5.10%
- --------------------------------------------------------------------------------------
Arizona State Transportation Board,
Series A 5.00% 07/01/09 300,000 309,300
Maricopa County, Arizona Unified School
District, GO 4.85% 07/01/11 200,000 204,018
Pima County Unified School District, GO
Unlimited, Refunding 3.70% 07/01/12 300,000 293,838
-----------
807,156
CALIFORNIA 4.69%
- --------------------------------------------------------------------------------------
Association of Bay Area Governments
(ABAG) Finance Authority, Series C 4.00% 03/01/08 100,000 99,415
Chino Basin Regional Financing
Authority Revenue 7.00% 08/01/06 250,000 250,555
San Diego, California Community College
District, GO Unlimited (ZCB) 4.19%(1) 05/01/15 300,000 202,614
Santa Cruz County Redevelopment Agency,
Refunding 4.40% 09/01/17 190,000 189,658
-----------
742,242
COLORADO 0.65%
- --------------------------------------------------------------------------------------
Adams & Arapahoe Counties Joint School
District, Series C, GO 5.75% 12/01/07 100,000 102,797
CONNECTICUT 1.70%
- --------------------------------------------------------------------------------------
Connecticut State, Series D, GO
Unlimited 5.375% 11/15/18 250,000 268,972
DELAWARE 1.30%
- --------------------------------------------------------------------------------------
Delaware Transportation Authority
System Revenue 5.50% 07/01/08 200,000 206,174
DISTRICT OF COLUMBIA 0.99%
- --------------------------------------------------------------------------------------
District of Columbia, Unrefunded,
Series B 5.50% 06/01/09 150,000 156,436
<FN>
(1)Represents Yield
</FN>
See notes to portfolios of investments and notes to financial statements.
45
NEAR-TERM TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
FLORIDA 4.22%
- --------------------------------------------------------------------------------------
Florida State Board of Education
Capital Outlay, Series B, GO 5.25% 06/01/11 $ 175,000 $ 180,911
Hillsborough County Industrial
Development Authority Hospital
Revenue 3.50% 10/01/09 205,000 199,155
Jacksonville Transportation Authority,
GO 6.50% 07/01/07 280,000 287,356
-----------
667,422
GEORGIA 1.74%
- --------------------------------------------------------------------------------------
Coweta County School District, GO 4.00% 08/01/06 175,000 175,019
Georgia Municipal Electric Authority
Power Revenue, Series A 5.30% 01/01/07 100,000 100,758
-----------
275,777
ILLINOIS 5.97%
- --------------------------------------------------------------------------------------
Chicago Water Revenue (ZCB) 3.77%(1) 11/01/08 275,000 250,352
Illinois Finance Authority Revenue,
Refunding 5.00% 07/01/16 390,000 409,870
Western Illinois, University and
College Revenue 3.50% 04/01/13 300,000 285,768
-----------
945,990
INDIANA 3.65%
- --------------------------------------------------------------------------------------
Indiana State Finance Authority
Revenue, Refunding 4.00% 05/01/12 350,000 348,905
Indianapolis, Indiana Local Public
Improvement Bond Bank, Series D 6.60% 02/01/07 225,000 228,508
-----------
577,413
IOWA 3.20%
- --------------------------------------------------------------------------------------
Ames, Iowa Hospital Revenue, Refunding 5.00% 06/15/15 300,000 311,931
Johnston Community School District, GO
Unlimited 4.00% 06/01/16 200,000 194,276
-----------
506,207
KANSAS 1.25%
- --------------------------------------------------------------------------------------
Kansas State Development Finance
Authority Revenue 4.00% 10/01/15 200,000 197,406
MASSACHUSETTS 1.50%
- --------------------------------------------------------------------------------------
Massachusetts State Health &
Educational Facilities Authority
Revenue, Series D 5.00% 10/01/07 135,000 135,680
Massachusetts State, Series C, GO 4.625% 10/01/08 100,000 101,554
-----------
237,234
<FN>
(1)Represents Yield
</FN>
See notes to portfolios of investments and notes to financial statements.
46
NEAR-TERM TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
MICHIGAN 0.83%
- --------------------------------------------------------------------------------------
Detroit, Michigan Local Development
Financial Authority, Series A 5.20% 05/01/10 $ 130,000 $ 131,552
MISSISSIPPI 1.87%
- --------------------------------------------------------------------------------------
Mississippi Hospital Equipment &
Facilities Authority Revenue 3.45% 04/01/07 300,000 296,442
MISSOURI 1.46%
- --------------------------------------------------------------------------------------
Missouri State Health & Educational
Facilities Authority Revenue,
Series A 6.75% 05/15/13 200,000 231,264
NEVADA 2.85%
- --------------------------------------------------------------------------------------
North Las Vegas, GO Limited 4.00% 03/01/16 200,000 192,368
Washoe County Gas & Water Facilities
Revenue 6.30% 12/01/14 250,000 258,945
-----------
451,313
NEW JERSEY 6.29%
- --------------------------------------------------------------------------------------
Brigantine, New Jersey School
Improvements, GO Unlimited 3.50% 01/15/13 300,000 286,263
New Jersey State 5.125% 05/01/10 250,000 260,485
New Jersey State Transportation Trust
Fund Authority, Series D 4.00% 06/15/14 250,000 247,148
Washington Township Board of Education,
GO 5.10% 02/01/08 200,000 201,546
-----------
995,442
NEW YORK 10.34%
- --------------------------------------------------------------------------------------
Hempstead Township, Series B, GO
Unlimited Tax 5.375% 11/15/10 120,000 123,758
New York City Transitional Financial
Authority Revenue, Series A 5.25% 11/01/08 225,000 232,268
New York, New York, Series B 5.25% 08/01/09 200,000 207,090
New York, New York, Series C 3.50% 08/01/07 300,000 299,184
New York State, GO 5.00% 03/01/08 250,000 254,710
New York State, Local Highway & Bridge,
Series A 5.375% 04/01/10 200,000 207,140
Schenectady Metroplex Development
Authority Revenue, Series A 5.00% 12/15/12 110,000 112,167
Tobacco Settlement Financing Corp.,
Series B 4.00% 06/01/07 200,000 200,470
-----------
1,636,787
See notes to portfolios of investments and notes to financial statements.
47
NEAR-TERM TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
NORTH CAROLINA 1.14%
- --------------------------------------------------------------------------------------
North Carolina Eastern Municipal Power
Agency Revenue, Refunding, Series A 5.60% 01/01/10 $ 175,000 $ 179,930
OHIO 1.27%
- --------------------------------------------------------------------------------------
Ohio State Higher Education, Series B,
GO 4.25% 11/01/07 200,000 201,010
OREGON 2.09%
- --------------------------------------------------------------------------------------
Clackamas County Hospital Facilities
Authority Revenue 5.00% 05/01/07 200,000 201,714
Oregon State Department Transportation
Highway 5.00% 11/15/09 125,000 129,283
-----------
330,997
SOUTH CAROLINA 4.40%
- --------------------------------------------------------------------------------------
Horry County Hospitality Fee Special
Obligation 5.00% 04/01/10 200,000 205,536
Jasper County School District, GO
Unlimited 4.00% 03/01/15 195,000 192,744
Spartanburg County School District 3.875% 04/01/12 300,000 298,536
-----------
696,816
TENNESSEE 1.98%
- --------------------------------------------------------------------------------------
Tennessee State, GO Unlimited,
Refunding, Series A 5.00% 05/01/11 300,000 313,818
TEXAS 10.12%
- --------------------------------------------------------------------------------------
Arlington Refunding, Series A 5.00% 08/15/08 200,000 204,648
Gulf Coast Industrial Development
Authority Pollution Control Revenue 4.95% 07/01/07 385,000 389,170
Killeen, Texas Independent School
District, GO Unlimited, Prerefunded 5.00% 02/15/09 310,000 315,834
Killeen, Texas Independent School
District, GO Unlimited, Unrefunded 5.00% 02/15/09 90,000 91,624
San Antonio Water System Revenue 5.00% 05/15/13 100,000 103,834
Texas State Water Development Board
Revenue, Series A 5.125% 07/15/09 290,000 291,975
Texas Turnpike Authority Revenue 5.00% 06/01/08 200,000 204,284
-----------
1,601,369
UTAH 1.30%
- --------------------------------------------------------------------------------------
Utah Transit Authority Sales Tax &
Transportation Revenue 4.90% 12/15/09 200,000 205,204
See notes to portfolios of investments and notes to financial statements.
48
NEAR-TERM TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
VIRGINIA 2.01%
- --------------------------------------------------------------------------------------
Virginia College Building Authority,
Series A 5.00% 09/01/15 $ 300,000 $ 318,534
WASHINGTON 3.19%
- --------------------------------------------------------------------------------------
Clark County, Washington School
District, GO Unlimited 5.125% 12/01/11 100,000 105,215
Thurston County School District, GO
Unlimited, Refunding 4.00% 12/01/06 400,000 400,340
-----------
505,555
WISCONSIN 0.96%
- --------------------------------------------------------------------------------------
Milwaukee, Wisconsin, Series L, GO 4.60% 12/15/13 150,000 152,840
- --------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS 14,685,703
- --------------------------------------------------------------------------------------
(cost $14,790,789)
REPURCHASE AGREEMENT 6.43%
Joint Tri-Party Repurchase Agreement,
Morgan Stanley Dean Witter, 06/30/06,
4.50%, due 07/03/06, repurchase
price $1,018,106, collateralized by
U.S. Treasury securities held in a
joint tri-party repurchase account
(cost $1,017,724) 4.50% 07/03/06 1,017,724 1,017,724
- --------------------------------------------------------------------------------------
TOTAL INVESTMENTS 99.20% 15,703,427
- --------------------------------------------------------------------------------------
(cost $15,808,513)
Other assets and liabilities, net 0.80% 126,979
-----------
NET ASSETS 100% $15,830,406
-----------
See notes to portfolios of investments and notes to financial statements.
49
TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS 90.87% RATE DATE AMOUNT VALUE
ALABAMA 5.73%
- -------------------------------------------------------------------------------------
Alabama 21st Century Authority Tobacco
Settlement Revenue 5.75% 12/01/19 $ 275,000 $ 290,015
Alabama State, GO Unlimited, Series A 4.625% 09/01/22 375,000 376,942
Mountain Brook City Board of Education
Capital Outlay 4.00% 02/15/15 195,000 191,923
-----------
858,880
CALIFORNIA 6.15%
- -------------------------------------------------------------------------------------
California State, GO Unlimited 5.00% 02/01/25 320,000 325,840
Campbell, California Union High School
District, GO Unlimited 4.75% 08/01/34 300,000 292,719
San Diego, California Community College
District, GO Unlimited (ZCB) 4.19%(1) 05/01/15 450,000 303,921
-----------
922,480
COLORADO 1.02%
- -------------------------------------------------------------------------------------
Colorado Health Facility Authority
Revenue 5.00% 09/01/16 150,000 152,607
FLORIDA 5.82%
- -------------------------------------------------------------------------------------
Florida Board of Education Capital
Outlay, GO Unlimited Tax, Refunding,
Series A 6.625% 06/01/07 90,000 91,743
Florida Board of Education, GO
Unlimited, Refunding, Series C 4.50% 06/01/28 300,000 289,845
St. Lucie County Florida Sales Tax
Revenue 5.25% 10/01/23 465,000 491,017
-----------
872,605
GEORGIA 6.22%
- -------------------------------------------------------------------------------------
Atlanta Development Authority Revenue 5.25% 07/01/22 500,000 513,940
Chatham County Hospital Authority
Revenue, Series A 5.50% 01/01/34 405,000 419,045
-----------
932,985
ILLINOIS 10.39%
- -------------------------------------------------------------------------------------
Du Page County, Refunding 5.60% 01/01/21 490,000 537,951
Illinois Development Financing
Authority Hospital Revenue, Adventist
Health Systems 5.65% 11/15/24 435,000 460,569
Illinois Development Financing
Authority Revenue, Presbyterian
Home Lake Project, Series B 6.25% 09/01/17 250,000 255,818
Illinois Regional Transportation
Authority Revenue, Series A 7.20% 11/01/20 250,000 303,600
-----------
1,557,938
<FN>
(1)Represents Yield
</FN>
See notes to portfolios of investments and notes to financial statements.
50
TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
IOWA 1.95%
- -------------------------------------------------------------------------------------
Davenport, Iowa, GO Unlimited, Series A 4.375% 06/01/20 $ 300,000 $ 292,812
KANSAS 9.12%
- -------------------------------------------------------------------------------------
Kansas State Development Finance
Authority Hospital Revenue, Series Z 5.00% 12/15/12 500,000 521,240
Kansas State Development Finance
Authority Revenue 4.00% 10/01/15 250,000 246,758
University of Kansas Hospital Authority
Health Facilities Revenue 5.625% 09/01/27 570,000 598,472
-----------
1,366,470
MARYLAND 2.10%
- -------------------------------------------------------------------------------------
Maryland State Health & Higher
Educational Facilities Authority
Revenue 5.75% 07/01/21 300,000 314,805
MICHIGAN 4.01%
- -------------------------------------------------------------------------------------
Detroit, Michigan Local Development
Financing Authority, Refunding,
Series A 5.375% 05/01/18 300,000 302,901
Macomb County Building Authority, GO
Limited 4.50% 11/01/23 300,000 297,843
-----------
600,744
MISSOURI 2.79%
- -------------------------------------------------------------------------------------
St. Louis Airport Development Program,
Prerefunded, Series A 5.00% 07/01/11 165,000 172,770
St. Louis Airport Development Program,
Unrefunded, Series A 5.00% 07/01/11 235,000 244,879
-----------
417,649
NEW JERSEY 5.24%
- -------------------------------------------------------------------------------------
New Jersey Health Care Facilities
Financing Authority Revenue 4.375% 07/01/10 460,000 461,582
New Jersey State Transportation
Authority, Series A 5.00% 06/15/13 315,000 324,623
-----------
786,205
NEW YORK 4.85%
- -------------------------------------------------------------------------------------
New York, GO Unlimited, Prerefunded,
Series H 5.25% 03/15/14 445,000 463,961
New York, GO Unlimited, Series J 5.00% 05/15/12 250,000 258,088
New York, GO Unlimited, Unrefunded,
Series H 5.25% 03/15/14 5,000 5,163
-----------
727,212
See notes to portfolios of investments and notes to financial statements.
51
TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
OHIO 3.46%
- -------------------------------------------------------------------------------------
Ohio State Mental Health Facilities
Revenue 5.50% 06/01/15 $ 300,000 $ 316,563
South Euclid Special Assessment, GO
Limited Tax 6.70% 12/01/14 185,000 202,471
-----------
519,034
PENNSYLVANIA 1.70%
- -------------------------------------------------------------------------------------
Chester County Health & Educational
Facilities Authority Revenue 5.00% 05/15/08 250,000 254,738
PUERTO RICO 2.08%
- -------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority
Revenue, Series II 5.125% 07/01/26 300,000 311,130
RHODE ISLAND 3.77%
- -------------------------------------------------------------------------------------
Rhode Island State Health & Educational
Building Corporation Revenue 6.50% 08/15/32 500,000 565,390
SOUTH CAROLINA 1.69%
- -------------------------------------------------------------------------------------
South Carolina Jobs Economic
Development Authority Revenue 5.00% 11/01/23 250,000 253,275
TEXAS 5.53%
- -------------------------------------------------------------------------------------
Duncanville, Texas Independent School
District, GO Unlimited, Prerefunded,
Series B 5.25% 02/15/32 495,000 526,299
Duncanville, Texas Independent School
District, GO Unlimited, Unrefunded,
Series B 5.25% 02/15/32 5,000 5,181
White Settlement, Texas Independent
School District, GO Unlimited 4.125% 08/15/15 300,000 296,736
-----------
828,216
UTAH 2.03%
- -------------------------------------------------------------------------------------
Weber County School District, GO
Unlimited, Prerefunded, Series A 5.15% 06/15/08 110,000 111,450
Weber County School District, GO
Unlimited, Unrefunded, Series A 5.15% 06/15/08 190,000 192,470
-----------
303,920
VERMONT 1.97%
- -------------------------------------------------------------------------------------
Vermont Educational & Health Buildings
Financing Agency Revenue, Vermont Law
School Project, Series A 5.375% 01/01/23 300,000 295,647
See notes to portfolios of investments and notes to financial statements.
52
TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
WASHINGTON 3.25%
- -------------------------------------------------------------------------------------
King & Snohomish Counties' School
District, Series C 5.00% 06/15/10 $ 250,000 $ 257,045
Spokane County Washington School
District, GO Unlimited 5.05% 06/01/22 255,000 230,676
-----------
487,721
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS 13,622,463
- -------------------------------------------------------------------------------------
(cost $13,269,204)
REPURCHASE AGREEMENT 12.19%
Joint Tri-Party Repurchase Agreement,
Morgan Stanley Dean Witter, 06/30/06,
4.50%, due 07/03/06, repurchase
price $1,827,961, collateralized by
U.S. Treasury securities held in a
joint tri-party repurchase account
(cost $1,827,276) 4.50% 07/03/06 1,827,276 1,827,276
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS 103.06% 15,449,739
- -------------------------------------------------------------------------------------
(cost $15,096,480)
Other assets and liabilities, net (3.06)% (458,207)
-----------
NET ASSETS 100% $14,991,532
-----------
See notes to portfolios of investments and notes to financial statements.
53
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS 81.04% SHARES VALUE
ADVERTISING 1.65%
- ---------------------------------------------------------------------------------------
Omnicom Group, Inc. 4,000 $ 356,360
AEROSPACE/DEFENSE 2.69%
- ---------------------------------------------------------------------------------------
Raytheon Co. 7,500 334,275
The Boeing Co. 3,000 245,730
-----------
580,005
AGRICULTURE 0.58%
- ---------------------------------------------------------------------------------------
Archer-Daniels-Midland Co. 3,000 123,840
APPLICATIONS SOFTWARE 2.84%
- ---------------------------------------------------------------------------------------
American Reprographics Co. 4,000 145,000*
Microsoft Corp. 20,000 466,000
-----------
611,000
AUTO MANUFACTURERS 0.76%
- ---------------------------------------------------------------------------------------
PACCAR, Inc. 2,000 164,760
AUTO PARTS & EQUIPMENT 0.95%
- ---------------------------------------------------------------------------------------
Johnson Controls, Inc. 2,500 205,550
CABLE TV 0.26%
- ---------------------------------------------------------------------------------------
Stream Communications Network, Inc. 168,000 55,272*
CASINO HOTELS 2.17%
- ---------------------------------------------------------------------------------------
Las Vegas Sands Corp. 6,000 467,160*
CHEMICALS - DIVERSIFIED 2.11%
- ---------------------------------------------------------------------------------------
FMC Corp. 4,000 257,560
PPG Industries, Inc. 3,000 198,000
-----------
455,560
COAL 0.52%
- ---------------------------------------------------------------------------------------
Peabody Energy Corp. 2,000 111,500
COMMERCIAL SERVICES 0.82%
- ---------------------------------------------------------------------------------------
Alliance Data Systems Corp. 3,000 176,460*
COMMUNICATIONS SOFTWARE 0.52%
- ---------------------------------------------------------------------------------------
Smith Micro Software, Inc. 7,000 112,140*
See notes to portfolios of investments and notes to financial statements.
54
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS SHARES VALUE
COMPUTERS 0.59%
- ---------------------------------------------------------------------------------------
Hewlett-Packard Co. 4,000 $ 126,720
DATA PROCESSING 0.55%
- ---------------------------------------------------------------------------------------
MoneyGram International, Inc. 3,500 118,825
ELECTRIC - INTEGRATED 0.76%
- ---------------------------------------------------------------------------------------
FirstEnergy Corp. 3,000 162,630
ELECTRIC PRODUCTS 1.87%
- ---------------------------------------------------------------------------------------
Emerson Electric Co. 2,000 167,620
Molex, Inc. 7,000 234,990
-----------
402,610
FINANCIAL SERVICES 4.62%
- ---------------------------------------------------------------------------------------
Citigroup, Inc. 9,000 434,160
JPMorgan Chase & Co. 4,000 168,000
U.S. Bancorp 7,500 231,600
Wachovia Corp. 3,000 162,240
-----------
996,000
FOOD 4.83%
- ---------------------------------------------------------------------------------------
Campbell Soup Co. 15,000 556,650
Kellogg Co. 10,000 484,300
-----------
1,040,950
GOLD MINING 10.07%
- ---------------------------------------------------------------------------------------
Bema Gold Corp., Warrants (October 2007) 25,000 91,533*
Goldcorp, Inc. 45,250 1,367,469
Goldcorp, Inc., Warrants (June 2011) 61,230 711,012*
-----------
2,170,014
INDUSTRIAL GASES 1.04%
- ---------------------------------------------------------------------------------------
Airgas, Inc. 6,000 223,500
INSTRUMENTS 1.50%
- ---------------------------------------------------------------------------------------
Applera Corp. - Applied Biosystems Group 10,000 323,500
INSURANCE 1.53%
- ---------------------------------------------------------------------------------------
Assurant, Inc. 3,500 169,400
Loews Corp. 4,500 159,525
-----------
328,925
See notes to portfolios of investments and notes to financial statements.
55
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS SHARES VALUE
INTERNET 1.87%
- ---------------------------------------------------------------------------------------
Akamai Technologies, Inc. 9,000 $ 325,710*
Stockgroup Information Systems, Inc. 181,625 78,095*
-----------
403,805
MACHINERY 1.37%
- ---------------------------------------------------------------------------------------
Terex Corp. 3,000 296,100*
MEDICAL - DRUGS 0.63%
- ---------------------------------------------------------------------------------------
Aspreva Pharmaceuticals Corp. 5,000 135,700*
MEDICAL - HMO 1.71%
- ---------------------------------------------------------------------------------------
WellCare Health Plans, Inc. 7,500 367,875*
MEDICAL - LABORATORIES 0.72%
- ---------------------------------------------------------------------------------------
Laboratory Corp. of America Holdings 2,500 155,575*
MEDICAL - PRODUCTS 1.95%
- ---------------------------------------------------------------------------------------
Johnson & Johnson 7,000 419,440
MULTIMEDIA 3.96%
- ---------------------------------------------------------------------------------------
News Corp., Class B 20,000 403,600
The Walt Disney Co. 15,000 450,000
-----------
853,600
OIL & GAS - INTEGRATED 0.74%
- ---------------------------------------------------------------------------------------
Hess Corp. 3,000 158,550
OIL & GAS DRILLING 0.93%
- ---------------------------------------------------------------------------------------
Transocean, Inc. 2,500 200,800*
OIL & GAS FIELD SERVICES 4.70%
- ---------------------------------------------------------------------------------------
Superior Energy Services, Inc. 7,500 254,250*
TETRA Technologies, Inc. 7,500 227,175*
Universal Compression Holdings, Inc. 4,500 283,365*
Weatherford International Ltd. 5,000 248,100*
-----------
1,012,890
See notes to portfolios of investments and notes to financial statements.
56
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS SHARES VALUE
OIL & GAS REFINING & MARKETING 1.31%
- ---------------------------------------------------------------------------------------
Frontier Oil Corp. 5,000 $ 162,000
Holly Corp. 2,500 120,500
-----------
282,500
RETAIL 8.89%
- ---------------------------------------------------------------------------------------
J.C. Penney Co., Inc. 7,500 506,325
Starbucks Corp. 8,000 302,080*
The Clorox Co. 6,000 365,820
The Pantry, Inc. 2,000 115,080*
Under Armour, Inc., Class A 4,500 191,790*
Wal-Mart Stores, Inc. 9,000 433,530
-----------
1,914,625
SEMICONDUCTORS 1.81%
- ---------------------------------------------------------------------------------------
Intel Corp. 12,000 227,400
Lam Research Corp. 3,500 163,170*
-----------
390,570
TELECOMMUNICATIONS 1.11%
- ---------------------------------------------------------------------------------------
Tellabs, Inc. 18,000 239,580*
TELEPHONE - INTEGRATED 2.02%
- ---------------------------------------------------------------------------------------
BellSouth Corp. 12,000 434,400
TOBACCO 1.02%
- ---------------------------------------------------------------------------------------
Altria Group, Inc. 3,000 220,290
TRANSPORTATION 3.07%
- ---------------------------------------------------------------------------------------
Burlington Northern Santa Fe Corp. 3,500 277,375
FedEx Corp. 2,000 233,720
Frontline Ltd. 4,000 151,400
-----------
662,495
- ---------------------------------------------------------------------------------------
TOTAL COMMON STOCKS AND WARRANTS 17,462,076
- ---------------------------------------------------------------------------------------
(cost $15,924,714)
See notes to portfolios of investments and notes to financial statements.
57
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
INDEX FUNDS 5.09% SHARES VALUE
DIAMONDS Trust, Series 1 4,000 $ 447,160
iShares Lehman Aggregate Bond Fund 2,400 233,856
Oil Service HOLDRs Trust 1,500 224,130
SPDR Trust, Series 1 1,500 190,920
- ---------------------------------------------------------------------------------------
TOTAL INDEX FUNDS 1,096,066
- ---------------------------------------------------------------------------------------
(cost $1,059,788)
PURCHASED OPTION 0.11% CONTRACTS
GOLD MINING 0.11%
- ---------------------------------------------------------------------------------------
Philadelphia Stock Exchange Gold & Silver Index, Strike
Price 120, Put, Expiration Dec. 2006 (premium $50,150) 50 23,000
- ---------------------------------------------------------------------------------------
TOTAL SECURITIES 18,581,142
- ---------------------------------------------------------------------------------------
PRINCIPAL
REPURCHASE AGREEMENT 13.68% AMOUNT
Joint Tri-Party Repurchase Agreement, Morgan Stanley
Dean Witter, 06/30/06, 4.50%, due 07/03/06,
repurchase price $2,949,225, collateralized by U.S.
Treasury securities held in a joint tri-party
repurchase account (cost $2,948,119) $2,948,119 2,948,119
- ---------------------------------------------------------------------------------------
TOTAL INVESTMENTS 99.92% 21,529,261
- ---------------------------------------------------------------------------------------
(cost $19,982,771)
Other assets and liabilities, net 0.08% 18,233
-----------
NET ASSETS 100% $21,547,494
-----------
See notes to portfolios of investments and notes to financial statements.
58
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS 86.17% SHARES VALUE
ADVERTISING 3.13%
- ----------------------------------------------------------------------------------------
Focus Media Holding Ltd., ADR 32,500 $ 2,117,700*
AIRLINES 0.17%
- ----------------------------------------------------------------------------------------
China Eastern Airlines Corp., Ltd., H shares 850,000 117,102
AIRPORT OPERATIONS 0.94%
- ----------------------------------------------------------------------------------------
Beijing Capital International Airport Co., Ltd.,
H shares 1,000,000 637,332
BANKS 3.64%
- ----------------------------------------------------------------------------------------
Bank of China Ltd., H shares 800,000 363,086*
HSBC Holdings plc 120,000 2,101,265
-----------
2,464,351
BREWERY 1.12%
- ----------------------------------------------------------------------------------------
Fraser & Neave Ltd. 300,000 757,935
CELLULAR TELECOMMUNICATIONS 4.50%
- ----------------------------------------------------------------------------------------
China Mobile (Hong Kong) Ltd., H shares 300,000 1,715,003
China Unicom Ltd. 1,500,000 1,332,604
-----------
3,047,607
CHEMICALS - AGRICULTURAL 3.26%
- ----------------------------------------------------------------------------------------
Sinochem Hong Kong Holdings Ltd. 2,000,000 785,399
Spur Ventures, Inc. 500,000 426,257*
Taiwan Fertilizer Co., Ltd. 600,000 997,050
-----------
2,208,706
COAL 1.73%
- ----------------------------------------------------------------------------------------
China Shenhua Energy Co., Ltd., H Shares 500,000 917,372
Western Canadian Coal Corp. 110,000 251,716*
-----------
1,169,088
DISTRIBUTION/WHOLESALE 4.81%
- ----------------------------------------------------------------------------------------
Esprit Holdings Ltd. 200,000 1,635,176
Li & Fung Ltd. 800,000 1,622,300
-----------
3,257,476
DIVERSIFIED MINERALS 0.27%
- ----------------------------------------------------------------------------------------
Caledon Resources plc 875,000 95,098*
Erdene Gold, Inc. 100,000 82,559*
See notes to portfolios of investments and notes to financial statements.
59
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS SHARES VALUE
DIVERSIFIED MINERALS (CONT'D)
- ----------------------------------------------------------------------------------------
New Pacific Metals Corp. 6,700 $ 7,816*
-----------
185,473
DIVERSIFIED OPERATIONS 5.88%
- ----------------------------------------------------------------------------------------
First Pacific Co., Ltd. 1,600,000 623,169
Keppel Corp., Ltd. 200,000 1,856,940
Melco International Development Ltd. 600,000 1,506,422
-----------
3,986,531
E-COMMERCE/SERVICES 3.01%
- ----------------------------------------------------------------------------------------
Ctrip.com International Ltd. 40,000 2,042,000
ELECTRIC GENERATION 2.05%
- ----------------------------------------------------------------------------------------
China Power International Development Ltd. 2,000,000 733,898
China Resources Power Holdings Co., Ltd. 800,000 654,070
-----------
1,387,968
ELECTRONICS & COMPONENTS 1.82%
- ----------------------------------------------------------------------------------------
Hon Hai Precision Industry Co., Ltd. 200,000 1,235,502
Yageo Corp., Sponsored GDR 1 2*
-----------
1,235,504
FINANCIAL SERVICES 3.53%
- ----------------------------------------------------------------------------------------
Cathay Financial Holding Co., Ltd. 800,000 1,749,471
Hong Kong Exchanges & Clearing Ltd. 100,000 643,770
-----------
2,393,241
FOOD & BEVERAGES 2.38%
- ----------------------------------------------------------------------------------------
China Mengniu Dairy Co., Ltd. 800,000 1,004,281
Tingyi (Cayman Islands) Holding Corp. 1,000,000 611,581
-----------
1,615,862
GAS DISTRIBUTION 2.92%
- ----------------------------------------------------------------------------------------
Hong Kong & China Gas Co., Ltd. 900,000 1,975,730
GOLD MINING 2.02%
- ----------------------------------------------------------------------------------------
Entree Gold, Inc. 300,000 282,676*
Great China Mining, Inc. 500,000 85,000*
Olympus Pacific Minerals, Inc. 440,500 205,555*
Silk Road Resources Ltd. 235,000 313,165*
Sino Gold Ltd. 50,000 185,563*
See notes to portfolios of investments and notes to financial statements.
60
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS SHARES VALUE
GOLD MINING (CONT'D)
- ----------------------------------------------------------------------------------------
Zijin Mining Group Co., Ltd., H shares 600,000 $ 299,353
-----------
1,371,312
HEALTH & PERSONAL CARE 1.92%
- ----------------------------------------------------------------------------------------
Hengan International Group Co., Ltd. 800,000 1,302,990
HUMAN RESOURCES 0.64%
- ----------------------------------------------------------------------------------------
51job, Inc., ADR 20,000 434,600*
INSURANCE 2.95%
- ----------------------------------------------------------------------------------------
China Life Insurance Co., Ltd., H shares 500,000 788,618*
Ping An Insurance Co. of China Ltd., H shares 400,000 1,210,287
-----------
1,998,905
INTERNET 3.59%
- ----------------------------------------------------------------------------------------
Asia Broadband, Inc. 954,945 85,945*
Baidu.com, Inc. 7,500 618,975*
NetEase.com, Inc., ADR 30,000 669,900*
Tencent Holdings Ltd. 500,000 1,055,783
-----------
2,430,603
MEDIA 0.96%
- ----------------------------------------------------------------------------------------
Sun New Media, Inc. 160,000 652,800*
METAL - ALUMINUM 0.60%
- ----------------------------------------------------------------------------------------
Global Alumina Products Corp. 290,000 406,000*
METAL - COPPER 1.39%
- ----------------------------------------------------------------------------------------
Continental Minerals Corp. 190,000 289,855*
Toledo Mining Corp. plc 45,240 83,619*
Verona Development Corp. 36,500 44,874*
Verona Development Corp., Units (RS) 400,000 525,149*
-----------
943,497
NON-FERROUS METALS 0.11%
- ----------------------------------------------------------------------------------------
Sterling Group Ventures, Inc. 512,800 71,536*
OIL & GAS - INTEGRATED 3.19%
- ----------------------------------------------------------------------------------------
PetroChina Co., Ltd., ADR 20,000 2,159,400
See notes to portfolios of investments and notes to financial statements.
61
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS SHARES VALUE
OIL & GAS EXPLORATION & PRODUCTION 3.69%
- ----------------------------------------------------------------------------------------
Big Sky Energy Corp. 1,000,000 $ 1,180,000*
Big Sky Energy Corp. (RS) 100,000 112,100*
CNOOC Ltd., ADR 15,000 1,205,700
-----------
2,497,800
PAPER PRODUCTS 1.21%
- ----------------------------------------------------------------------------------------
Nine Dragons Paper Holdings Ltd. 1,000,000 817,588*
PRECIOUS METALS 0.61%
- ----------------------------------------------------------------------------------------
Golden China Resources Corp. 267,000 59,900*
TVI Pacific, Inc. 2,265,714 355,813*
-----------
415,713
PUBLIC THOROUGHFARES 0.50%
- ----------------------------------------------------------------------------------------
Jiangsu Expressway Co., Ltd., H shares 600,000 337,979
PUBLISHING 0.15%
- ----------------------------------------------------------------------------------------
Lingo Media, Inc. 775,000 104,321*
REAL ESTATE COMPANIES 2.38%
- ----------------------------------------------------------------------------------------
Cheung Kong Holdings Ltd. 120,000 1,300,930
Daying Modern Agricultural Co. 1 0*
Sun Hung Kai Properties Ltd. 30,000 305,919
United Overseas Land Ltd. 1,500 2,710
-----------
1,609,559
RENTAL - AUTO & EQUIPMENT 0.49%
- ----------------------------------------------------------------------------------------
Cosco Pacific Ltd. 150,000 332,185
RETAIL 2.59%
- ----------------------------------------------------------------------------------------
China First Pencil Co., Ltd., B shares 1 0*
Parkson Retail Group Ltd. 200,000 567,805
Shanghai Friendship Group, Inc., Co., B shares 2 1
Shinsegae Co., Ltd. 1,000 500,659
Wumart Stores, Inc., H shares 200,000 688,834
-----------
1,757,299
SCHOOLS 1.35%
- ----------------------------------------------------------------------------------------
Capital Alliance Group, Inc. 1,213,332 914,613*
See notes to portfolios of investments and notes to financial statements.
62
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS SHARES VALUE
SEMICONDUCTORS 1.40%
- ----------------------------------------------------------------------------------------
Taiwan Semiconductor Manufacturing Co., Ltd., Sponsored
ADR 102,999 $ 945,531
SHIPBUILDING 2.48%
- ----------------------------------------------------------------------------------------
Hyundai Heavy Industries Co., Ltd. 15,000 1,683,795
SILVER MINING 2.59%
- ----------------------------------------------------------------------------------------
Silvercorp Metals, Inc. 136,000 1,757,437*
STEEL 3.26%
- ----------------------------------------------------------------------------------------
Angang New Steel Co., Ltd., H shares 1,200,000 1,135,610
POSCO 4,000 1,072,991
-----------
2,208,601
TELECOMMUNICATIONS 0.94%
- ----------------------------------------------------------------------------------------
Foxconn International Holdings Ltd. 300,000 639,264*
- ----------------------------------------------------------------------------------------
TOTAL COMMON STOCKS 58,392,934
- ----------------------------------------------------------------------------------------
(cost $53,602,770)
INDEX FUNDS 2.39%
iShares FTSE/Xinhua A50 China Tracker 60,000 490,553
iShares MSCI Japan Index Fund 15,000 204,600
iShares MSCI Singapore Index Fund 30,000 264,000
iShares MSCI South Korea Index Fund 7,500 339,375
iShares MSCI Taiwan Index Fund 25,000 320,500
- ----------------------------------------------------------------------------------------
TOTAL INDEX FUNDS 1,619,028
- ----------------------------------------------------------------------------------------
(cost $1,474,446)
RIGHTS 0.00%
CELLULAR TELECOMMUNICATIONS 0.00%
- ----------------------------------------------------------------------------------------
3 Italia SpA, Rights
(cost $0) 20 0*
- ----------------------------------------------------------------------------------------
TOTAL SECURITIES 60,011,962
- ----------------------------------------------------------------------------------------
See notes to portfolios of investments and notes to financial statements.
63
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
PRINCIPAL
REPURCHASE AGREEMENT 15.69% AMOUNT VALUE
Joint Tri-Party Repurchase Agreement, Morgan Stanley
Dean Witter, 06/30/06, 4.50%, due 07/03/06,
repurchase price $10,632,351, collateralized by U.S.
Treasury securities held in a joint tri-party
repurchase account (cost $10,628,365) $10,628,365 $10,628,365
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS 104.25% 70,640,327
- ----------------------------------------------------------------------------------------
(cost $65,705,581)
Other assets and liabilities, net (4.25)% (2,879,184)
-----------
NET ASSETS 100% $67,761,143
-----------
See notes to portfolios of investments and notes to financial statements.
64
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS 92.79% SHARES VALUE
AGRICULTURE 0.53%
- ----------------------------------------------------------------------------------------------
Archer-Daniels-Midland Co. 165,000 $ 6,811,200
ALUMINUM 1.34%
- ----------------------------------------------------------------------------------------------
Alcan, Inc. 300,000 14,082,000
Global Alumina Products Corp. 2,200,000 3,080,000*
--------------
17,162,000
BUILDING MATERIALS 2.18%
- ----------------------------------------------------------------------------------------------
Cemex S.A. de C.V., Sponsored ADR 7,084 403,575
Eagle Materials, Inc. 245,000 11,637,500
Martin Marietta Materials, Inc. 130,000 11,849,500
Polaris Minerals Corp. 929,100 4,002,047*
--------------
27,892,622
COAL 1.50%
- ----------------------------------------------------------------------------------------------
Bounty Industries Ltd. 9,500,000 1,762,844*
Coalcorp Mining, Inc. 12,288,625 7,939,884*
Coalcorp Mining, Inc., Warrants (September 2007) 500,000 53,843*
Coalcorp Mining, Inc., Warrants (February 2011) 6,916,000 1,986,019*
CONSOL Energy, Inc. 100,000 4,672,000
NEMI Northern Energy & Mining, Inc. 1,514,460 1,494,958*
Western Canadian Coal Corp. 555,000 1,270,023*
--------------
19,179,571
DATA PROCESSING & SOFTWARE 0.01%
- ----------------------------------------------------------------------------------------------
Stockgroup Information Systems, Inc. 179,000 76,970*
DIAMOND MINING & EXPLORATION 0.03%
- ----------------------------------------------------------------------------------------------
Diamond Fields International Ltd. 112,000 14,071*
Diamond Fields International Ltd., Warrants (November
2006) 112,000 0*
Diamonds North Resources Ltd. 178,000 127,787*
Metalex Ventures Ltd. 30,000 14,268*
Vaaldiam Resources Ltd. 252,000 192,220*
Verena Minerals Corp. 459,000 67,963*
--------------
416,309
FINANCIAL SERVICES 2.97%
- ----------------------------------------------------------------------------------------------
CI Financial, Inc. 666,300 17,662,765*
GMP Capital Trust 886,900 18,727,291
Jovian Capital Corp. 2,010,600 1,714,066*
--------------
38,104,122
See notes to portfolios of investments and notes to financial statements.
65
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS SHARES VALUE
GAS & PROPANE DISTRIBUTION 0.28%
- ----------------------------------------------------------------------------------------------
Energy Savings Income Fund 220,000 $ 3,652,353
GENERAL METAL & MINERAL MINING 8.99%
- ----------------------------------------------------------------------------------------------
African Copper plc 1,530,000 1,852,324*
Altius Minerals Corp. 100,000 574,326*
Amarc Resources Ltd. 184,000 66,460*
Amerigo Resources Ltd. 685,600 1,408,915
Atacama Minerals Corp. 500,000 610,221*
Baja Mining Corp. 56,350 76,357*
Baja Mining Corp. (RS) 2,111,000 2,860,511*
Baja Mining Corp., Warrants (April 2008) (RS) 1,055,500 246,269*
Baja Mining Corp., Warrants (April 2009) 19,720 21,236*
Breakwater Resources Ltd. 270,000 300,444*
Breakwater Resources Ltd., Warrants (January 2009) 3,215,500 1,991,022*
Central African Mining & Exploration Co., plc 10,011,667 11,565,665*
Consolidated Thompson-Lundmark Gold Mines Ltd. 900,000 2,164,491*+
Constellation Copper Corp. 2,925,000 6,667,115*
Dumont Nickel, Inc. 290,500 43,014*
European Nickel plc 770,000 494,572*
EuroZinc Mining Corp. 663,500 1,601,665*
Farallon Resources Ltd. 54,700 37,797*
FNX Mining Co., Inc. 120,000 1,141,473*
Gabriel Resources Ltd. 245,600 636,949*
International Molybdenum plc 1,981,670 265,554*
International Molybdenum plc, Warrants (July 2010) 958,335 53,140*
JNR Resources, Inc. 1,525,300 1,574,097*
JSC MMC Norilsk Nickel, ADR 120,000 15,600,000
Katanga Mining Ltd. 552,000 3,120,743*
Labrador Iron Ore Royalty Trust 150,000 3,207,700
LionOre Mining International Ltd. 782,000 4,252,632*
Lundin Mining Corp. 88,125 2,598,634*
Minefinders Corp., Ltd. 468,500 3,821,658*
North American Tungsten Corp., Ltd. 155,000 157,177*
Northern Peru Copper Corp. 502,000 1,419,034*
Pacifica Resources Ltd. (RS) 500,000 323,956*
Pacifica Resources Ltd., Warrants (March 2008) (RS) 125,000 0*
Precious Metals Australia Ltd. 1,000,000 1,298,938*
Red Dragon Resources Corp. 76,000 54,561*
Red Dragon Resources Corp., Units (RS) 3,720,000 2,537,084*
Revett Minerals, Inc. 4,645,300 5,169,087*+
Sherritt International Corp. 1,020,000 10,224,256
Skye Resources, Inc. 400,000 3,248,531*
Southwestern Resources Corp. 5,000 43,164*
Sterling Group Ventures, Inc. 525,700 73,335*
Teck Cominco Ltd., Class B 215,000 12,922,960
Tenke Mining Corp. 607,000 6,808,902*
See notes to portfolios of investments and notes to financial statements.
66
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS SHARES VALUE
GENERAL METAL & MINERAL MINING (CONT'D)
- ----------------------------------------------------------------------------------------------
Titanium Resources Group Ltd. 1,000,000 $ 1,367,779*
Toledo Mining Corp. plc 381,000 704,221*
Victoria Resources Corp. 29,000 13,533*
Zimasco Consolidated Enterprises Ltd. (RS) 22,000 4,840*
--------------
115,226,342
GOLD & COPPER MINING 3.30%
- ----------------------------------------------------------------------------------------------
Continental Minerals Corp. 233,500 356,217*
Corriente Resources, Inc. 3,000 13,542*
European Minerals Corp. 1,540,750 1,313,512*
European Minerals Corp., Warrants (December 2008) 219,125 88,488*
European Minerals Corp., Warrants (April 2010) 1,001,000 386,261*
European Minerals Corp., Warrants (March 2011) 665,000 274,510*
Fortress Minerals Corp. 700,000 716,113*
Ivanhoe Mines Ltd. 1,745,000 11,838,471*
Northern Dynasty Minerals Ltd. 775,000 6,822,587*
Northern Dynasty Minerals Ltd., Warrants (September
2006) 400,000 1,726,567*
Northern Orion Resources, Inc. 2,011,620 9,892,473*
Northern Orion Resources, Inc., Warrants (May 2008) 1,433,900 4,954,023*
Northern Orion Resources, Inc., Warrants (February
2010) 571,550 1,256,605*
Northgate Minerals Corp. 115,500 424,190*
Northgate Minerals Corp., Warrants (December 2006) 1,006,900 1,238,600*
Taseko Mines Ltd. 165,000 420,514*
Taseko Mines Ltd., Warrants (September 2006) 500,000 529,457*
--------------
42,252,130
GOLD MINING 8.04%
- ----------------------------------------------------------------------------------------------
Agnico-Eagle Mines Ltd., Warrants (November 2007) 17,000 277,950*
American Gold Capital Corp. 663,300 1,154,756*
Arizona Star Resource Corp. 15,300 175,057*
Bema Gold Corp., Warrants (October 2007) 730,800 2,675,698*
Caledon Resources plc 5,970,000 648,837*
Cambior, Inc., Warrants (August 2008) 354,000 276,376*
Century Mining Corp. 258,896 281,118*
Century Mining Corp., Warrants (March 2007) 500,000 345,493*
Corona Gold Ltd. 50,000 371*
Crowflight Minerals, Inc. 1,160,000 281,061*
Crystallex International Corp. 254,500 732,960*
Entree Gold, Inc. 495,000 466,415*
Gammon Lake Resources, Inc. 66,000 906,771*
Glencairn Gold Corp. 700,000 471,127*
Glencairn Gold Corp., Warrants (November 2008) 345,000 105,263*
Gold Fields Ltd. 265,000 5,997,904
Gold Fields Ltd., Sponsored ADR 60,000 1,374,000
Goldcorp, Inc. 826,268 24,970,059
See notes to portfolios of investments and notes to financial statements.
67
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS SHARES VALUE
GOLD MINING (CONT'D)
- ------------------------------------------------------------------------------------------
Goldcorp, Inc., Warrants (June 2011) 1,249,908 $ 14,514,109*
Great Basin Gold Ltd. 49,000 84,564*
Great China Mining, Inc. 649,750 110,458*
Harmony Gold Mining Co., Ltd., Sponsored ADR 250,000 4,072,500*
IAMGOLD Corp. 280,000 2,492,574
International Royalty Corp. 480,000 1,929,735*
Kinross Gold Corp. 265,000 2,894,109*
Kinross Gold Corp., Warrants (December 2007) 1,170,300 997,698*
Medoro Resources Ltd. 837,713 526,225*
Meridian Gold, Inc. 32,000 1,013,760*
Metallic Ventures Gold, Inc. 10,000 17,858*
Metallica Resources, Inc. 276,000 844,582*
Metallica Resources, Inc., Warrants (December 2008) 200,000 240,499*
Mexgold Resources, Inc. 461,000 2,974,460*
Moto Goldmines Ltd. 200,000 915,332*
Nevada Pacific Gold Ltd. 371,648 480,256*
Olympus Pacific Minerals, Inc. 485,000 226,320*
Pacific Ridge Exploration Ltd. 125,000 28,043*
Pacific Rim Mining Corp. 105,000 80,850*
Planet Exploration, Inc. 160,000 61,740*
Polyus Gold Co., ADR 20,000 860,000*
Polyus Gold Co., Class S 60,000 2,580,000*
QGX Ltd. 389,800 692,605*
Radius Gold, Inc. 9,600 5,427*
Randgold Resources Ltd., ADR 152,000 3,192,000*
Red Back Mining, Inc. 770,000 2,411,540*
Red Back Mining, Inc., Warrants (July 2007) 150,000 200,565*
Reunion Gold Corp. 200,000 116,660*
Reunion Gold Corp., Warrants (December 2008) 100,000 0*
Ridge Mining plc 575,000 401,207*
Rio Narcea Gold Mines Ltd., Warrants (September 2008) 217,500 61,482*
Royal Roads Corp. 1,520,000 238,704*
Silk Road Resources Ltd. 265,000 353,143*
St. Andrew Goldfields Ltd. 15,500 26,428*
Stingray Resources, Inc. 125,000 94,225*
TLC Ventures Corp. 432,600 291,156*
TVI Pacific, Inc. 5,867,428 921,434*
Vedron Gold, Inc. 10,991 3,353*
Virginia Gold Mines, Inc. 320,100 1,163,373*
Wolfden Resources, Inc. 746,800 1,976,991*
X-Cal Resources Ltd. 412,500 133,262*
Yamana Gold, Inc. 15,000 147,530*
Yamana Gold, Inc., Warrants (November 2008) 2,561,900 11,495,042*
--------------
103,013,015
See notes to portfolios of investments and notes to financial statements.
68
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS SHARES VALUE
MINING EQUIPMENT & SERVICES 1.34%
- ----------------------------------------------------------------------------------------------
Dynatec Corp. 3,405,700 $ 4,125,899*
Joy Global, Inc. 250,000 13,022,500
--------------
17,148,399
OIL & GAS - INTEGRATED 8.17%
- ----------------------------------------------------------------------------------------------
ConocoPhillips 100,000 6,553,000
Novy Neft II Limited 60,000 2,799,900*
Oao Gazprom, Sponsored ADR 580,000 24,389,000
Petro-Canada 270,000 12,806,473
PetroChina Co., Ltd., ADR 80,000 8,637,600
Petroleo Brasileiro S.A., ADR 357,000 28,502,880
Suncor Energy, Inc. 260,000 21,062,600
--------------
104,751,453
OIL & GAS DRILLING 4.11%
- ----------------------------------------------------------------------------------------------
ENSCO International, Inc. 175,000 8,053,500
Global Santa Fe Corp. 200,000 11,550,000
Leader Energy Services Ltd. 1,377,000 4,077,803*
Nabors Industries, Ltd. 100,000 3,379,000*
Rowan Companies, Inc. 128,200 4,562,638
Savanna Energy Services Corp. 220,000 4,515,098*
Transocean, Inc. 150,000 12,048,000*
Xtreme Coil Drilling Corp. 450,000 4,442,051*
--------------
52,628,090
OIL & GAS EQUIPMENT & SERVICES 11.49%
- ----------------------------------------------------------------------------------------------
Bristow Group, Inc. 112,400 4,046,400*
Calfrac Well Services Ltd. 204,500 4,404,361
Cameron International Corp. 150,000 7,165,500*
Canadian Sub-Surface Energy Services Corp. (RS) 80,000 443,308*
Divestco, Inc. 1,000,000 4,083,098*
Grant Prideco, Inc. 255,000 11,411,250*
Halliburton Co. 185,000 13,728,850
Horizon North Logistics, Inc. (RS) 65,229 0*
Horizon North Logistics, Inc., Warrants (August 2006)
(RS) 45,900 0*
Hyduke Energy Services, Inc. 525,000 1,220,218*
Hyduke Energy Services, Inc., Warrants (June 2007) 262,500 0*
McDermott International, Inc. 472,500 21,484,575*
Mullen Group Income Fund 226,644 5,877,876
Oil States International, Inc. 285,000 9,769,800*
Pure Energy Services Ltd. 45,000 819,760*
Saxon Energy Services, Inc. 1,110,000 4,203,527*
Saxon Energy Services, Inc., Warrants (November 2006) 180,000 0*
Schlumberger Ltd. 305,000 19,858,550
See notes to portfolios of investments and notes to financial statements.
69
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS SHARES VALUE
OIL & GAS EQUIPMENT & SERVICES (CONT'D)
- ------------------------------------------------------------------------------------------
Trican Well Service Ltd. 531,500 $ 10,636,200
Veritas DGC, Inc. 110,000 5,673,800*
Weatherford International Ltd. 248,000 12,305,760*
W-H Energy Services, Inc. 200,000 10,166,000*
--------------
147,298,833
OIL & GAS EXPLORATION & PRODUCTION - JUNIOR 11.31%
- ----------------------------------------------------------------------------------------------
Aberdeen International, Inc. 250,250 175,165*
Anderson Energy Ltd., S/R 50,000 228,833*
Bankers Petroleum Ltd. 2,600,000 1,749,899*
Bankers Petroleum Ltd., Warrants (November 2009) 2,565,500 874,851*
Big Sky Energy Corp. 3,866,100 4,561,998*
Big Sky Energy Corp. (RS) 1,400,000 1,569,400*
Birchcliff Energy Ltd. 200,000 960,201*
Choice Resources Corp. 1,831,500 1,397,025*
Dune Energy, Inc. (RS) 377,358 1,090,414*
Energy XXI Acquisition Corp. 419,000 2,157,850*
Energy XXI Acquisition Corp., Warrants (October 2009) 790,000 900,600*
Exile Resources, Inc. 78,675 42,361*+
Exile Resources, Inc. (RS) 2,100,000 1,074,169*+
Exile Resources, Inc., Warrants (May 2008) (RS) 1,050,000 0*
Exploration Company of Delaware 860,000 9,167,600*
Gastar Exploration Ltd. 702,000 1,669,404*
Geopark Holdings Ltd., 144A 780,000 3,957,502*
Goodrich Petroleum Corp. 339,600 9,641,244*
Gran Tierra Energy, Inc. 265,350 875,655*
Gran Tierra Energy, Inc., Units (RS) 3,100,000 12,000,100*
Grove Energy Ltd. 1,600,000 1,033,787
Ivanhoe Energy, Inc. 300,000 732,265*
Ivory Energy, Inc., Units 1,666,500 1,099,186*
Kereco Energy Ltd. 200,000 1,920,402*
Legacy Energy LLC, 144A (RS) 263,158 5,000,000*
Mission Oil & Gas, Inc. 990,800 12,661,185*
Orleans Energy Ltd. 40,500 212,613*
Pacific Stratus Energy Ltd. 747,000 2,145,107*+
Pacific Stratus Energy Ltd., Warrants (August 2006) 150,000 0*
Pacific Stratus Energy Ltd., Warrants (July 2007) 160,000 28,716*
Pan-Ocean Energy Corp., Ltd. 252,000 9,945,672*
Pearl Exploration and Production Ltd. 109,000 513,528*
Petrobank Energy & Resources Ltd. 494,500 6,753,973*
PetroWorld Corp. 2,000,000 897,384*+
PetroWorld Corp., Warrants (July 2010) 1,000,000 0*
Salinas Energy Ltd. 1,075,000 406,939*
Signal Energy, Inc. 1,124,800 1,231,441*
Sound Oil plc 14,005,500 1,617,942*
See notes to portfolios of investments and notes to financial statements.
70
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS SHARES VALUE
OIL & GAS EXPLORATION & PRODUCTION - JUNIOR (CONT'D)
- ----------------------------------------------------------------------------------------------
Tanganyika Oil Co., Ltd. 199,600 $ 1,979,252*
Trident Resources Corp., Units (RS) 80,000 5,000,000
Tyner Resources Ltd. 890,000 391,349*
Tyner Resources Ltd., Warrants (May 2007) 425,000 0*
Valkyries Petroleum Corp. 382,300 4,463,340*
Verona Development Corp. 407,300 500,741*
Warren Resources, Inc. 670,000 9,621,200*
White Nile Ltd. 12,219,000 22,697,914*
--------------
144,948,207
OIL & GAS EXPLORATION & PRODUCTION - SENIOR 6.44%
- ----------------------------------------------------------------------------------------------
Duvernay Oil Corp. 60,000 2,110,109*
EnCana Corp. 415,000 21,860,753
Galleon Energy, Inc., Class A 275,600 5,361,877*
Newfield Exploration Co. 200,000 9,788,000*
Nexen, Inc. 360,000 20,320,366
Niko Resources Ltd. 100,000 5,657,110
OPTI Canada, Inc. 510,000 10,457,666*
Southwestern Energy Co. 225,000 7,011,000*
--------------
82,566,881
OIL & GAS REFINING & MARKETING 3.64%
- ----------------------------------------------------------------------------------------------
Frontier Oil Corp. 430,000 13,932,000
Tesoro Corp. 100,000 7,436,000
Valero Energy Corp. 380,000 25,277,600
--------------
46,645,600
OIL & GAS ROYALTY TRUSTS 7.88%
- ----------------------------------------------------------------------------------------------
ARC Energy Trust 165,000 4,145,915
Baytex Energy Trust 520,000 11,292,682
Bonavista Energy Trust 300,000 9,422,533
Canadian Oil Sands Trust 525,000 16,960,560
Crescent Point Energy Trust 453,100 8,876,182
Daylight Energy Trust 375,000 3,701,710
Enerplus Resources Fund 140,000 7,873,598
Harvest Energy Trust 350,000 10,430,744
Penn West Energy Trust 310,000 12,490,690
San Juan Basin Royalty Trust 100,000 3,895,000
Sequoia Oil & Gas Trust 295,000 4,307,130
Vermilion Energy Trust 245,000 7,596,132
--------------
100,992,876
See notes to portfolios of investments and notes to financial statements.
71
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS SHARES VALUE
PLATINUM GROUP METALS 0.69%
- ----------------------------------------------------------------------------------------------
African Minerals, Special Warrants (RS) 12,500 $ 41,250*
African Platinum plc 6,485,000 3,955,561*
Anooraq Resources Corp. 750,000 625,925*
Aquarius Platinum Ltd. 6,862 100,593
Beartooth Platinum Corp. 2,480,000 300,444*
Eastern Platinum Ltd. 904,000 1,095,168*
Eastern Platinum Ltd. (RS) 1,800,000 2,072,419*
Eastern Platinum Ltd., Warrants (April 2008) 200,500 210,513*
Eastern Platinum Ltd., Warrants (March 2009) (RS) 900,000 0*
Osmium Holdings S.A. (RS) 104 10,400*
Pacific North West Capital Corp. 6,000 2,100*
Platinum Group Metals Ltd. 242,700 413,811*
SouthernEra Diamonds, Inc., Warrants (November 2008) 100,000 5,833*
--------------
8,834,017
POTASH & AGRICULTURAL FERTILIZERS 0.03%
- ----------------------------------------------------------------------------------------------
Spur Ventures, Inc. 435,000 370,844*
POWER TECHNOLOGY 0.34%
- ----------------------------------------------------------------------------------------------
Dynex Power, Inc. 660,000 71,073*
Dynex Power, Inc., Warrants (August 2006) 330,000 0*
Gamesa Corporacion Tecnologica, S.A. 200,000 4,284,024
--------------
4,355,097
SILVER MINING 2.24%
- ----------------------------------------------------------------------------------------------
Pan American Silver Corp., Warrants (February 2008) 42,400 361,466*
Silver Wheaton Corp. 50,000 471,127*
Silver Wheaton Corp., Warrants (August 2009) 6,905,770 9,047,807*
Silver Wheaton Corp., Warrants (November 2009) 4,275,720 5,179,900*
Silver Wheaton Corp., Warrants (December 2010) 1,348,440 6,110,847*
Silvercorp Metals, Inc. 445,000 5,750,437*
Silvercorp Metals, Inc., Warrants (September 2006) 200,000 1,758,873*
--------------
28,680,457
STEEL 3.20%
- ----------------------------------------------------------------------------------------------
Chaparral Steel Co. 50,000 3,626,500*
Nucor Corp. 210,000 11,392,500
Russel Metals, Inc. 562,400 13,071,441
United States Steel Corp. 185,000 12,972,200
--------------
41,062,641
See notes to portfolios of investments and notes to financial statements.
72
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS SHARES VALUE
SUGAR/ETHANOL 1.16%
- ----------------------------------------------------------------------------------------------
Cosan S.A. Industria e Comercio 165,000 $ 10,636,553*
Infinity Bio-Energy Ltd. 687,400 3,608,850*
Infinity Bio-Energy Ltd., Warrants (May 2010) 1,374,800 659,904*
--------------
14,905,307
TRANSPORTATION 1.02%
- ----------------------------------------------------------------------------------------------
Burlington Northern Santa Fe Corp. 165,000 13,076,250
URANIUM 0.56%
- ----------------------------------------------------------------------------------------------
Khan Resources Inc., Special Warrants (RS) 400,000 358,954*
UMC Energy plc 1,000,000 425,121*+
UMC Energy plc, Warrants (January 2007) 500,000 0*
UrAsia Energy Ltd. 1,635,850 4,110,360*
Western Prospector Group Ltd. 1,143,000 2,287,333*
--------------
7,181,768
- ----------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS AND WARRANTS 1,189,233,354
- ----------------------------------------------------------------------------------------------
(cost $1,002,502,644)
PRINCIPAL
CONVERTIBLE DEBENTURES 0.13% AMOUNT
OIL & GAS EXPLORATION & PRODUCTION - JUNIOR 0.13%
- ---------------------------------------------------------------------------------------------
Gastar Exploration Ltd., 9.75%, maturity 11/12/09 $ 1,500,000 816,300
Ivory Energy, Inc., 10.00%, maturity 12/15/07 CAD 1,000,000 897,384
--------------
1,713,684
- ---------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE DEBENTURES 1,713,684
- ---------------------------------------------------------------------------------------------
(cost $2,327,472)
NOTE UNIT 0.52%
OIL & GAS EXPLORATION & PRODUCTION - JUNIOR 0.52%
- ---------------------------------------------------------------------------------------------
Pacific Stratus Energy Ltd., 13.00%, maturity
6/14/11(RS)
(cost $6,785,196) CAD 7,480,000 6,712,434
See notes to portfolios of investments and notes to financial statements.
73
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
PURCHASED OPTIONS 2.82% CONTRACTS VALUE
ALUMINUM 0.05%
- --------------------------------------------------------------------------------------------
Alcan, Inc., Strike Price 40, Call, Expiration Jan.
2008 (premium $901,500) 500 $ 665,000
CHEMICALS - DIVERSIFIED 0.01%
- --------------------------------------------------------------------------------------------
Lyondell Chemical Co., Strike Price 30, Call,
Expiration Jan. 2007 (premium $470,482) 1,500 52,500
The Dow Chemical Co., Strike Price 45, Call,
Expiration Jan. 2007 (premium $216,490) 500 42,500
--------------
95,000
COAL 0.41%
- --------------------------------------------------------------------------------------------
CONSOL Energy, Inc., Strike Price 35, Call,
Expiration Jan. 2007 (premium $766,400) 800 1,120,000
Peabody Energy Corp., Strike Price 35, Call,
Expiration Jan. 2007 (premium $1,252,114) 1,100 2,519,000
Peabody Energy Corp., Strike Price 45, Call,
Expiration Jan. 2007 (premium $990,650) 1,050 1,575,000
--------------
5,214,000
GENERAL METAL & MINERAL MINING 0.01%
- --------------------------------------------------------------------------------------------
Teck Cominco Ltd., Strike Price 70, Call, Expiration
Jan. 2007 (premium $106,004) 200 124,736
GOLD MINING 0.25%
- --------------------------------------------------------------------------------------------
Barrick Gold Corp., Strike Price 20, Call,
Expiration Jan. 2007 (premium $287,550) 200 255,000
Barrick Gold Corp., Strike Price 20, Call,
Expiration Jan. 2008 (premium $327,798) 225 263,250
Barrick Gold Corp., Strike Price 20, Call,
Expiration Jan. 2009 (premium $63,650) 50 51,000
Barrick Gold Corp., Strike Price 25, Call,
Expiration Jan. 2007 (premium $200,600) 200 120,000
Barrick Gold Corp., Strike Price 25, Call,
Expiration Jan. 2008 (premium $244,671) 225 186,750
Barrick Gold Corp., Strike Price 25, Call,
Expiration Jan. 2009 (premium $48,650) 50 50,000
Philadelphia Stock Exchange Gold & Silver Index,
Strike Price 110, Put, Expiration Dec. 2006
(premium $2,251,760) 3,100 837,000
Philadelphia Stock Exchange Gold & Silver Index,
Strike Price 120, Put, Expiration Dec. 2006
(premium $3,501,240) 3,100 1,426,000
--------------
3,189,000
See notes to portfolios of investments and notes to financial statements.
74
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
PURCHASED OPTIONS CONTRACTS VALUE
INDEX FUND 1.42%
- --------------------------------------------------------------------------------------------
Energy Select Sector SPDR Fund, Strike Price 48,
Call, Expiration Jan. 2007 (premium $1,511,000) 2,000 $ 2,160,000
Energy Select Sector SPDR Fund, Strike Price 52,
Call, Expiration Sept. 2006 (premium $87,000) 250 162,500
Energy Select Sector SPDR Fund, Strike Price 55,
Call, Expiration Sept. 2006 (premium $3,130,900) 10,750 4,515,000
Oil Service HOLDRS Trust, Strike Price 130, Call,
Expiration Jan. 2007 (premium $5,711,390) 2,425 6,959,750
Oil Service HOLDRS Trust, Strike Price 140, Call,
Expiration Oct. 2006 (premium $2,696,222) 1,825 3,339,750
Oil Service HOLDRS Trust, Strike Price 150, Call,
Expiration Jan. 2007 (premium $1,066,000) 675 1,086,750
--------------
18,223,750
OIL & GAS - INTEGRATED 0.18%
- --------------------------------------------------------------------------------------------
Suncor Energy, Inc., Strike Price 75, Call,
Expiration Jan. 2008 (premium $1,200,430) 600 1,251,000
Suncor Energy, Inc., Strike Price 80, Call,
Expiration Jan. 2008 (premium $1,071,300) 600 1,122,000
--------------
2,373,000
OIL & GAS DRILLING 0.26%
- --------------------------------------------------------------------------------------------
Global Santa Fe Corp., Strike Price 50, Call,
Expiration Jan. 2007 (premium $668,100) 700 791,000
Transocean, Inc., Strike Price 60, Call, Expiration
Jan. 2008 (premium $1,358,592) 900 2,520,000
--------------
3,311,000
OIL & GAS EQUIPMENT & SERVICES 0.15%
- --------------------------------------------------------------------------------------------
Schlumberger Ltd., Strike Price 50, Call, Expiration
Jan. 2007 (premium $1,369,890) 1,100 1,903,000
OIL & GAS EXPLORATION & PRODUCTION - SENIOR 0.00%
- --------------------------------------------------------------------------------------------
EnCana Corp., Strike Price 40, Put, Expiration July
2006 (premium $174,731) 662 3,310
OIL & GAS REFINING & MARKETING 0.01%
- --------------------------------------------------------------------------------------------
Frontier Oil Corp., Strike Price 30, Call,
Expiration Jan. 2007 (premium $76,600) 200 106,000
See notes to portfolios of investments and notes to financial statements.
75
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
PURCHASED OPTIONS CONTRACTS VALUE
SILVER MINING 0.00%
- --------------------------------------------------------------------------------------------
Silver Wheaton Corp., Strike Price 7.50, Put,
Expiration Sept. 2006 (premium $95,688) 1,000 $ 35,000
TRANSPORTATION 0.07%
- --------------------------------------------------------------------------------------------
Burlington Northern Santa Fe Corp., Strike Price 65,
Call, Expiration Jan. 2007 (premium $606,500) 500 882,500
- --------------------------------------------------------------------------------------------
TOTAL PURCHASED OPTIONS 36,125,296
- --------------------------------------------------------------------------------------------
(cost $32,453,902)
- --------------------------------------------------------------------------------------------
TOTAL SECURITIES 1,233,784,768
- --------------------------------------------------------------------------------------------
PRINCIPAL
REPURCHASE AGREEMENT 4.59% AMOUNT
Joint Tri-Party Repurchase Agreement, Morgan Stanley
Dean Witter, 06/30/06, 4.50%, due 07/03/06,
repurchase price $58,840,967, collateralized by
U.S. Treasury securities held in a joint tri-party
repurchase account (cost $58,818,910) $58,818,910 58,818,910
- --------------------------------------------------------------------------------------------
TOTAL INVESTMENTS 100.85% 1,292,603,678
- --------------------------------------------------------------------------------------------
(cost $1,102,888,124)
Other assets and liabilities, net (0.85)% (10,939,197)
--------------
NET ASSETS 100% $1,281,664,481
--------------
See notes to portfolios of investments and notes to financial statements.
76
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS 78.76% SHARES VALUE
DATA PROCESSING & SOFTWARE 0.05%
- ---------------------------------------------------------------------------------------------
Stockgroup Information Systems, Inc. 1,050,000 $ 451,500*
DIAMOND MINING & EXPLORATION 0.86%
- ---------------------------------------------------------------------------------------------
Aber Diamond Corp. 87,000 2,670,857
Diagem International Resource Corp. 1,008,000 117,593*
Diamond Fields International Ltd. 1,715,000 215,462*
Diamond Fields International Ltd., Warrants (November
2006) 512,000 0*
Diamonds North Resources Ltd. 2,650,400 1,902,742*+
Kimberley Diamond Co. NL 500,000 460,195*
Metalex Ventures Ltd. 101,000 48,037*
Shore Gold, Inc. 348,000 1,552,080*
SouthernEra Diamonds, Inc., Warrants (November 2008) 100,000 5,833*
Tahera Diamond Corp. 161,600 334,990*
Vaaldiam Resources Ltd. 758,000 578,185*
------------
7,885,974
FINANCIAL SERVICES 0.81%
- ---------------------------------------------------------------------------------------------
GMP Capital Trust 272,800 5,760,294
Jovian Capital Corp. 1,988,100 1,694,885*
------------
7,455,179
GOLD ROYALTY COMPANY 0.23%
- ---------------------------------------------------------------------------------------------
Aberdeen International, Inc. 2,207,500 1,545,161*+
Aberdeen International, Inc., Warrants (December 2007) 1,000,000 0*
International Royalty Corp. 135,000 542,738*
------------
2,087,899
GOLD/MINERAL EXPLORATION & DEVELOPMENT 17.57%
- ---------------------------------------------------------------------------------------------
African Minerals, Special Warrants (RS) 112,500 371,250*
African Platinum plc 11,681,967 7,125,480*
AfriOre Ltd. 1,963,900 9,076,219*
Alamos Gold, Inc. 902,100 7,285,772*
Amarc Resources Ltd. 597,545 215,832*
American Gold Capital Corp. 1,641,900 2,858,425*+
Amerix Precious Metals Corp. 510,300 425,880*
Andina Minerals, Inc. 187,000 251,716*
Anooraq Resources Corp. 3,394,900 2,828,349*
Arizona Star Resource Corp. 379,600 4,343,249*
Atikwa Minerals Corp. 2,288,333 133,478*+
Atlas Cromwell Ltd. 667,500 778,705*
Atlas Cromwell Ltd., 144A, Units (RS) 400,000 536,995*
AuEx Ventures, Inc. 63,700 105,752*
Aurizon Mines Ltd. 180,000 500,740*
See notes to portfolios of investments and notes to financial statements.
77
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS SHARES VALUE
GOLD/MINERAL EXPLORATION & DEVELOPMENT (CONT'D)
- ---------------------------------------------------------------------------------------------
Baja Mining Corp. 116,900 $ 158,405*
Baja Mining Corp. (RS) 1,055,500 1,430,255*
Baja Mining Corp., Warrants (April 2008) (RS) 527,750 123,135*
Baja Mining Corp., Warrants (April 2009) 496,040 534,166*
Beartooth Platinum Corp. 3,534,500 428,194*
Bendigo Mining NL 1,201,000 1,533,281*
Bolnisi Gold NL 1,000,000 1,840,780
Caledon Resources plc 20,290,000 2,205,178*+
Candente Resource Corp. 260,000 226,320*
Central African Gold plc 4,825,000 1,360,039*
Central African Mining & Exploration Co., plc 2,510,000 2,899,599*
Coalcorp Mining, Inc. 517,500 334,365*
Coalcorp Mining, Inc., Warrants (February 2011) 204,000 58,581*
Continental Minerals Corp. 641,500 978,642*
Continental Precious Minerals, Inc. 256,000 578,921*
Coral Gold Resources Ltd. 54,200 198,930*
Corona Gold Ltd. 812,500 6,031*
Corriente Resources, Inc. 494,300 2,231,192*
Crown Resources Corp. 161,500 524,875*
Dumont Nickel, Inc. 1,855,500 274,741*
Eastern Platinum Ltd. 3,796,425 4,599,250*
Eastern Platinum Ltd., Warrants (April 2008) 799,000 838,902*
ECU Silver Mining, Inc. 987,000 2,612,869*
Erdene Gold, Inc. 524,900 433,354*
European Minerals Corp. 1,579,800 1,346,803*
European Minerals Corp., Warrants (December 2008) 1,904,200 768,959*
European Minerals Corp., Warrants (April 2010) 1,893,500 730,655*
European Minerals Corp., Warrants (March 2011) 2,374,000 979,979*
European Nickel plc 400,000 256,921*
EXMIN Resources, Inc. 1,504,000 276,681*
EXMIN Resources, Inc., Warrants (February 2007) 500,000 0*
Farallon Resources Ltd. 2,447,500 1,691,188*
First Point Minerals Corp. 1,761,500 308,245*
Fortress Minerals Corp. 441,000 451,151*
Frontier Pacific Mining Corp. 1,538,000 579,674*
Gabriel Resources Ltd. 1,321,300 3,426,712*
GBS Gold International, Inc. 739,100 1,160,699*
Gold Reserve, Inc. 272,600 1,567,992*
Gold Summit Corp. 329,000 59,048*
Golden China Resources Corp. 1,793,000 402,252*
Golden Odyssey Mining, Inc. 1,473,500 350,408*
Grandview Gold, Inc. 584,000 581,720*+
Grandview Gold, Inc. (RS) 700,000 662,718*+
Grandview Gold, Inc., Warrants (August 2006) 200,000 0*
Grandview Gold, Inc., Warrants (July 2009) (RS) 350,000 0*
Great Basin Gold Ltd. 1,456,300 2,509,172*
See notes to portfolios of investments and notes to financial statements.
78
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS SHARES VALUE
GOLD/MINERAL EXPLORATION & DEVELOPMENT (CONT'D)
- ---------------------------------------------------------------------------------------------
Guyana Goldfields, Inc. 87,000 $ 628,483*
Inca Pacific Resources, Inc. 198,000 142,146*
Inca Pacific Resources, Inc., Warrants (November 2006) 900,000 0*
International Molybdenum plc 1,105,000 148,076*
Ivanhoe Mines Ltd. 1,134,500 7,696,685*
Katanga Mining Ltd. 15,200 85,934*
Kings Minerals NL 8,376,266 1,709,753*
Lake Shore Gold Corp. 559,000 902,948*
Latitude Resources plc 3,000,000 304,978*
Laurion Gold, Inc. 175,000 23,556*
Laurion Gold, Inc., Special Warrants 1,500,000 67,304*
Linear Gold Corp. 1,033,600 4,628,406*
Medoro Resources Ltd. 267,857 168,259*
Medoro Resources Ltd., 144A 188,285 118,275*
Metallic Ventures Gold, Inc. 1,267,200 2,262,959*
Metallic Ventures Gold, Inc., Warrants (March 2009) 304,500 87,441*
Metallica Resources, Inc. 350,000 1,071,028*
Metallica Resources, Inc., Warrants (December 2008) 1,165,300 1,401,267*
Minefinders Corp., Ltd. 1,033,800 8,432,936*
Mirasol Resources Ltd. 115,000 65,015*
Moss Lake Gold Mines Ltd. 2,698,500 702,261*+
Moto Goldmines Ltd. 1,041,700 4,767,506*
Moto Goldmines Ltd., Warrants (August 2007) 137,500 228,272*
Moydow Mines International, Inc. 178,000 38,336*
Northern Dynasty Minerals Ltd. 597,700 5,261,755*
Northern Dynasty Minerals Ltd., Warrants (September
2006) 100,000 431,642*
NovaGold Resources, Inc. 110,000 1,412,572*
NovaGold Resources, Inc., Warrants (January 2008) 4,100 19,500*
NovaGold Resources, Inc., Warrants (October 2008) 25,400 194,885*
Odyssey Resources Ltd. 1,774,000 238,794*
Olympus Pacific Minerals, Inc. 1,415,000 660,295*
Osmium Holdings S.A. (RS) 891 89,100*
Oxus Gold plc 250,000 242,596*
Pacific North West Capital Corp. 1,664,466 582,529*
Pacific Rim Mining Corp. 5,099,600 3,926,481*
Peru Copper Corp. 351,975 1,809,859*
Planet Exploration, Inc. 654,000 252,362*
Platinum Group Metals Ltd. 465,200 793,180*
Platte River Gold U.S., Inc. (RS) 773,500 1,547,000*
Platte River Gold U.S., Inc., Warrants (March 2009)
(RS) 195,000 0*
QGX Ltd. 943,900 1,677,141*
Radius Gold, Inc. 1,413,700 799,238*
Red Hill Energy, Inc. 171,900 117,238*
Reunion Gold Corp. 1,253,000 730,875*
Reunion Gold Corp., Warrants (December 2008) 150,000 0*
Ridge Mining plc 1,185,000 826,836*
See notes to portfolios of investments and notes to financial statements.
79
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS SHARES VALUE
GOLD/MINERAL EXPLORATION & DEVELOPMENT (CONT'D)
- ---------------------------------------------------------------------------------------------
Romarco Minerals, Inc. 7,980,853 $ 1,503,997*+
Romarco Minerals, Inc., Warrants (September 2007) 5,682,353 0*
Rubicon Minerals Corp. 207,900 259,327*
Solitario Resources Corp. 539,300 1,379,284*
Southwestern Resources Corp. 27,000 233,087*
St. Andrew Goldfields Ltd. 802,150 1,367,690*
Stingray Resources, Inc. 375,000 282,676*
Stratagold Corp. 1,351,100 1,600,442*
Strongbow Exploration, Inc. 775,000 396,419*
Sydney Resource Corp. 676,000 236,586*
Tenke Mining Corp. 261,000 2,927,716*
TLC Ventures Corp. 1,763,700 1,187,037*
Tone Resources Ltd. 148,500 230,542*
Vedron Gold, Inc. 5,829,501 1,778,643*+
Vedron Gold, Inc., Warrants (December 2006) 425,000 0*
Verena Minerals Corp. 1,747,000 258,675*
Viceroy Exploration Ltd. 48,000 361,825*
Victoria Resources Corp. 174,000 81,195*
Virginia Gold Mines, Inc. 513,800 1,867,358*
Wesdome Gold Mines Ltd. 311,600 559,250*
Western Exploration & Development Ltd., 144A, Special
Warrants (RS) 600,000 30,000*
White Knight Resource Ltd. 1,754,900 3,559,092*
Wolfden Resources, Inc. 703,200 1,861,570*
X-Cal Resources Ltd. 3,456,000 1,116,489*
Yilgarn Mining Ltd. 19,026 2,895*
------------
161,736,321
INTERMEDIATE & JUNIOR GOLD PRODUCERS 29.52%
- ---------------------------------------------------------------------------------------------
Agnico-Eagle Mines Ltd., Warrants (November 2007) 834,900 13,651,683*
Apollo Gold Corp., Warrants (December 2006) 333,500 0*
Avnel Gold Mining Ltd. 1,900 1,790*
Avnel Gold Mining Ltd., Warrants (June 2010) 10,000 5,609*
Bema Gold Corp., Warrants (October 2007) 3,762,580 13,776,037*
Cambior, Inc. 1,119,000 3,037,556*
Cambior, Inc., Warrants (October 2006) 760,300 136,456*
Cambior, Inc., Warrants (August 2008) 1,776,025 1,386,586*
Century Mining Corp. 2,856,725 3,101,931*
Century Mining Corp., Warrants (March 2007) 500,000 345,493*
Crystallex International Corp. 628,000 1,808,640*
Dynatec Corp. 2,565,200 3,107,659*
Eldorado Gold Corp. 264,000 1,284,049*
Emperor Mines Ltd. 1,030,000 286,694*
Gammon Lake Resources, Inc. 55,000 755,642*
Glamis Gold Ltd. 125,400 4,753,438*
Glencairn Gold Corp. 3,183,000 2,142,280*
See notes to portfolios of investments and notes to financial statements.
80
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS SHARES VALUE
INTERMEDIATE & JUNIOR GOLD PRODUCERS (CONT'D)
- ---------------------------------------------------------------------------------------------
Glencairn Gold Corp., Warrants (November 2008) 1,471,500 $ 448,970*
Golden Star Resources Ltd., Warrants (February 2007) 358,500 209,113*
Harmony Gold Mining Co., Ltd., Sponsored ADR 78,000 1,270,620*
Hecla Mining Co. 400,000 2,100,000*
Herald Resources Ltd. 1,000,000 957,503*
High River Gold Mines Ltd. 1,702,500 3,513,932*
IAMGOLD Corp. 470,909 4,191,972
Jaguar Mining, Inc. 318,100 1,313,106*
Jaguar Mining, Warrants (December 2007) 8,000 9,512*
Kingsgate Consolidated Ltd. 319,459 1,218,789
Kinross Gold Corp. 231,000 2,522,789*
Kinross Gold Corp., Warrants (December 2007) 3,604,400 3,072,805*
Leviathan Resources Ltd. 311,110 144,326*
LionOre Mining International Ltd. 454,700 2,472,726*
Meridian Gold, Inc. 770,500 24,402,768*
Mexgold Resources, Inc. 2,188,700 14,121,912*
Nevada Pacific Gold Ltd. 3,010,335 3,890,055*
Nevsun Resources Ltd. 95,000 273,657*
Nevsun Resources Ltd., Warrants (June 2008) 140,460 161,340*
Nevsun Resources Ltd., Warrants (October 2008) 21,200 25,493*
Northern Orion Resources, Inc. 6,329,110 31,124,512*
Northern Orion Resources, Inc., Warrants (May 2008) 4,394,790 15,183,687*
Northern Orion Resources, Inc., Warrants (February
2010) 2,089,068 4,593,006*
Northgate Minerals Corp. 196,500 720,478*
Northgate Minerals Corp., Warrants (December 2006) 5,793,180 6,961,221*
Randgold Resources Ltd., ADR 1,747,334 36,694,014*
Red Back Mining, Inc. 1,653,000 5,176,982*
Red Back Mining, Inc., Warrants (July 2007) 150,000 200,565*
Resolute Mining Ltd. 1,360,000 1,766,555*
Revett Minerals, Inc. 2,242,900 2,495,801*
Rio Narcea Gold Mines Ltd., Warrants (September 2008) 1,240,250 350,589*
SEMAFO, Inc. 317,700 632,920*
Silvercorp Metals, Inc. 1,159,800 14,987,320*
Sino Gold Ltd. 1,000,000 3,711,250*
Troy Resources NL 250,000 473,184
TVI Pacific, Inc. 10,658,856 1,673,890*
Yamana Gold, Inc. 562,806 5,535,383*
Yamana Gold, Inc., Warrants (November 2008) 5,240,380 23,513,169*
------------
271,697,457
INVESTMENT TRUSTS 0.80%
- ---------------------------------------------------------------------------------------------
iShares Silver Trust 20,000 2,227,800*
streetTRACKS Gold Trust 84,000 5,143,320*
------------
7,371,120
See notes to portfolios of investments and notes to financial statements.
81
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS SHARES VALUE
METAL & MINERAL MINING 5.79%
- ---------------------------------------------------------------------------------------------
Amerigo Resources Ltd. 1,925,200 $ 3,956,305
AMT International Mining Corp. 1,000,000 15,256*
Aquarius Platinum Ltd. 110,045 1,613,198
Breakwater Resources Ltd. 495,000 550,814*
Breakwater Resources Ltd., Warrants (January 2009) 1,334,000 826,006*
Constellation Copper Corp. 270,000 615,426*
FNX Mining Co., Inc. 80,000 760,982*
HudBay Minerals, Inc. 50,000 637,143*
Impact Silver Corp. 19,500 20,824*
JNR Resources, Inc. 505,900 522,085*
Linear Metals Corp. 807,120 0*
Linear Metals Corp., Warrants (July 2006) 100,890 0*
Lundin Mining Corp. 178,045 5,250,199*
New Pacific Metals Corp. 10,000 11,666*
North American Tungsten Corp., Ltd. 1,183,000 1,199,614*
Northern Peru Copper Corp. 50,000 141,338*
Pan American Silver Corp. 10,000 179,900*
Pan American Silver Corp., Warrants (February 2008) 112,370 957,971*
Silver Wheaton Corp. 260,000 2,449,859*
Silver Wheaton Corp., Warrants (August 2009) 11,132,050 14,584,998*
Silver Wheaton Corp., Warrants (November 2009) 5,342,520 6,472,295*
Silver Wheaton Corp., Warrants (December 2010) 1,958,620 8,876,054*
Taseko Mines Ltd. 410,000 1,044,914*
Toledo Mining Corp. plc 330,200 610,325*
UrAsia Energy Ltd. 40,000 100,507*
Valhalla Uranium Ltd. 172,344 138,156*
Western Copper Corp. 50,000 50,702*
Western Prospector Group Ltd. 830,000 1,660,968*
Zimasco Consolidated Enterprises Ltd. (RS) 192,500 42,350*
------------
53,289,855
OIL & GAS EXPLORATION & PRODUCTION - JUNIOR 0.39%
- ---------------------------------------------------------------------------------------------
Bankers Petroleum Ltd., Warrants (November 2009) 33,000 11,253*
Big Sky Energy Corp. 2,528,750 2,983,925*
Big Sky Energy Corp. (RS) 500,000 560,500*
------------
3,555,678
OIL & GAS EXTRACTION 0.17%
- ---------------------------------------------------------------------------------------------
Choice Resources Corp. 613,500 467,963*
Pacific Stratus Energy Ltd. 367,500 1,055,324*
Pacific Stratus Energy Ltd., Warrants (August 2006) 56,250 0*
Pacific Stratus Energy Ltd., Warrants (July 2007) 85,000 15,256*
------------
1,538,543
See notes to portfolios of investments and notes to financial statements.
82
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS SHARES VALUE
OIL & GAS ROYALTY TRUSTS 0.18%
- ---------------------------------------------------------------------------------------------
ARC Energy Trust 5,000 $ 125,634
Bonavista Energy Trust 5,000 157,042
Harvest Energy Trust 45,233 1,348,040
------------
1,630,716
SENIOR GOLD PRODUCERS 22.39%
- ---------------------------------------------------------------------------------------------
Barrick Gold Corp. 94,574 2,799,390
Freeport-McMoRan Copper & Gold, Inc., Class B 120,000 6,649,200
Gold Fields Ltd. 240,000 5,432,064
Gold Fields Ltd., Sponsored ADR 571,000 13,075,900
Goldcorp, Inc. 4,002,409 120,953,911
Goldcorp, Inc., Warrants (April 2007) 100 3,722*
Goldcorp, Inc., Warrants (June 2011) 3,798,506 44,108,707*
Lihir Gold Ltd. 850,000 1,817,028*
Newmont Mining Corp. 100,000 5,293,000
Polyus Gold Co., ADR 20,000 860,000*
Polyus Gold Co., Class S 117,500 5,052,500*
------------
206,045,422
- ---------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS AND WARRANTS 724,745,664
- ---------------------------------------------------------------------------------------------
(cost $519,237,449)
INDEX FUND 0.20%
Market Vectors Gold Miners Exchange Traded Fund (ETF)
(cost $1,890,601) 49,000 1,896,300*
See notes to portfolios of investments and notes to financial statements.
83
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
PURCHASED OPTIONS 0.64% CONTRACTS VALUE
SENIOR GOLD PRODUCERS 0.64%
- ---------------------------------------------------------------------------------------------
Barrick Gold Corp., Strike Price 17.50, Call,
Expiration Jan. 2007 (premium $29,600) 200 $ 153,000
Barrick Gold Corp., Strike Price 20, Call, Expiration
Jan. 2007 (premium $234,806) 164 209,100
Barrick Gold Corp., Strike Price 20, Call, Expiration
Jan. 2008 (premium $243,874) 159 186,030
Barrick Gold Corp., Strike Price 25, Call, Expiration
Jan. 2007 (premium $164,126) 164 98,400
Barrick Gold Corp., Strike Price 25, Call, Expiration
Jan. 2008 (premium $184,087) 159 131,970
Freeport-McMoRan Copper & Gold, Inc., Strike Price 40,
Put, Expiration Nov. 2006 (premium $525,708) 1,200 144,000
Gold Fields Ltd., Strike Price 30, Call, Expiration
Jan. 2007 (premium $170,400) 800 108,000
Newmont Mining Corp., Strike Price 50, Call,
Expiration Jan. 2008 (premium $231,600) 200 242,000
Newmont Mining Corp., Strike Price 60, Call,
Expiration Jan. 2008 (premium $151,600) 200 152,000
Philadelphia Stock Exchange Gold & Silver Index,
Strike Price 110, Put, Expiration Dec. 2006 (premium
$3,828,578) 5,592 1,509,840
Philadelphia Stock Exchange Gold & Silver Index,
Strike Price 120, Put, Expiration Dec. 2006 (premium
$6,862,842) 6,392 2,940,320
------------
5,874,660
- ---------------------------------------------------------------------------------------------
TOTAL PURCHASED OPTIONS 5,874,660
- ---------------------------------------------------------------------------------------------
(cost $12,627,221)
- ---------------------------------------------------------------------------------------------
TOTAL SECURITIES 732,516,624
- ---------------------------------------------------------------------------------------------
PRINCIPAL
REPURCHASE AGREEMENT 19.77% AMOUNT
Joint Tri-Party Repurchase Agreement, Morgan Stanley
Dean Witter, 06/30/06, 4.50%, due 07/03/06,
repurchase price $181,995,448, collateralized by
U.S. Treasury securities held in a joint tri-party
repurchase account (cost $181,927,225) $181,927,225 181,927,225
- ---------------------------------------------------------------------------------------------
TOTAL INVESTMENTS 99.37% 914,443,849
- ---------------------------------------------------------------------------------------------
(cost $715,682,496)
Other assets and liabilities, net 0.63% 5,804,942
------------
NET ASSETS 100% $920,248,791
------------
See notes to portfolios of investments and notes to financial statements.
84
GOLD SHARES FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS 69.55% SHARES VALUE
DIAMOND MINING & EXPLORATION 0.33%
- ----------------------------------------------------------------------------------------
Aber Diamond Corp. 22,000 $ 675,389
Diamond Fields International Ltd. 108,000 13,568*
Diamond Fields International Ltd., Warrants (November
2006) 176,000 0*
-----------
688,957
FINANCIAL SERVICES 0.50%
- ----------------------------------------------------------------------------------------
GMP Capital Trust 49,200 1,038,880
GOLD MINING 65.68%
- ----------------------------------------------------------------------------------------
Agnico-Eagle Mines Ltd. 50,000 1,660,609
Agnico-Eagle Mines Ltd., Warrants (November 2007) 270,400 4,421,040*
Alamos Gold, Inc. 77,500 625,925*
Apollo Gold Corp., Warrants (December 2006) 166,500 0*
Barrick Gold Corp. 27,429 811,800
Bema Gold Corp., Warrants (October 2007) 1,536,020 5,623,872*
Cambior, Inc. 407,400 1,104,250*
Cambior, Inc., Warrants (October 2006) 112,500 20,191*
Cambior, Inc., Warrants (August 2008) 344,875 269,252*
Century Mining Corp. 559,069 607,057*
Crystallex International Corp. 119,400 343,872*
DRDGOLD Ltd., Sponsored ADR 100,000 137,000
Eldorado Gold Corp. 70,000 340,468*
Freeport-McMoRan Copper & Gold, Inc., Class B 115,000 6,372,150
GBS Gold International, Inc. 107,600 168,977*
Glamis Gold Ltd. 64,000 2,425,972*
Glencairn Gold Corp. 177,000 119,128*
Glencairn Gold Corp., Warrants (November 2008) 88,500 27,002*
Gold Fields Ltd. 95,000 2,150,192
Gold Fields Ltd., Sponsored ADR 225,000 5,152,500
Goldcorp, Inc. 1,195,133 36,117,249
Goldcorp, Inc., Warrants (June 2011) 1,110,633 12,896,797*
Golden Star Resources Ltd., Warrants (February 2007) 5,000 2,917*
Harmony Gold Mining Co., Ltd., Sponsored ADR 152,000 2,476,080*
Hecla Mining Co. 150,000 787,500*
High River Gold Mines Ltd. 1,000,000 2,063,984*
IAMGOLD Corp. 100,000 890,205
Ivanhoe Mines Ltd. 265,500 1,801,212*
Kinross Gold Corp. 99,000 1,081,195*
Kinross Gold Corp., Warrants (December 2007) 1,385,800 1,181,415*
Lihir Gold Ltd. 500,000 1,068,840*
Meridian Gold, Inc. 249,500 7,901,714*
Nevsun Resources Ltd., Warrants (June 2008) 20,140 23,134*
Newmont Mining Corp. 55,000 2,911,150
Northern Orion Resources, Inc. 1,552,370 7,634,073*
Northern Orion Resources, Inc., Warrants (May 2008) 998,160 3,448,572*
See notes to portfolios of investments and notes to financial statements.
85
GOLD SHARES FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
COMMON STOCKS AND WARRANTS SHARES VALUE
GOLD MINING (CONT'D)
- ---------------------------------------------------------------------------------------------
Northern Orion Resources, Inc., Warrants (February 2010) 193,792 $ 426,069*
Northgate Minerals Corp. 156,900 574,871*
Northgate Minerals Corp., Warrants (December 2006) 1,644,920 1,973,478*
Polyus Gold Co., ADR 10,000 430,000*
Polyus Gold Co., Class S 32,500 1,397,500*
Randgold Resources Ltd., ADR 388,000 8,148,000*
Rio Narcea Gold Mines Ltd., Warrants (September 2008) 251,750 71,164*
Sino Gold Ltd. 200,000 742,250*
Yamana Gold, Inc. 318,432 3,131,884*
Yamana Gold, Inc., Warrants (November 2008) 1,128,340 5,062,772*
-----------
136,625,282
GOLD/MINERAL EXPLORATION & DEVELOPMENT 0.05%
- ----------------------------------------------------------------------------------------
Virginia Gold Mines, Inc. 29,500 107,215*
INVESTMENT TRUST 0.05%
- ----------------------------------------------------------------------------------------
streetTRACKS Gold Trust 1,600 97,968*
METAL & MINERAL MINING 2.80%
- ----------------------------------------------------------------------------------------
Gammon Lake Resources, Inc. 11,000 151,128*
Lundin Mining Corp. 15,430 455,001*
Pan American Silver Corp., Warrants (February 2008) 61,130 521,142*
Silver Wheaton Corp. 25,550 240,746*
Silver Wheaton Corp., Warrants (August 2009) 1,737,480 2,276,413*
Silver Wheaton Corp., Warrants (November 2009) 691,660 837,924*
Silver Wheaton Corp., Warrants (December 2010) 296,540 1,343,857*
-----------
5,826,211
OIL & GAS EXPLORATION & PRODUCTION 0.00%
- ----------------------------------------------------------------------------------------
Aberdeen International, Inc. 2,250 1,575*
OIL & GAS ROYALTY TRUSTS 0.14%
- ----------------------------------------------------------------------------------------
ARC Energy Trust 2,500 62,817
Bonavista Energy Trust 2,500 78,521
Harvest Energy Trust 5,000 149,011
-----------
290,349
- ----------------------------------------------------------------------------------------
TOTAL COMMON STOCKS AND WARRANTS 144,676,437
- ----------------------------------------------------------------------------------------
(cost $88,616,494)
INDEX FUND 0.20%
Market Vectors Gold Miners ETF (cost $424,421) 11,000 425,700*
See notes to portfolios of investments and notes to financial statements.
86
GOLD SHARES FUND
PORTFOLIO OF INVESTMENTS June 30, 2006
PURCHASED OPTIONS 0.89% CONTRACTS VALUE
GOLD MINING 0.89%
- ----------------------------------------------------------------------------------------
Barrick Gold Corp., Strike Price 20, Call, Expiration
Jan. 2007 (premium $58,702) 41 $ 52,275
Barrick Gold Corp., Strike Price 20, Call, Expiration
Jan. 2008 (premium $108,197) 71 83,070
Barrick Gold Corp., Strike Price 25, Call, Expiration
Jan. 2007 (premium $41,032) 41 24,600
Barrick Gold Corp., Strike Price 25, Call, Expiration
Jan. 2008 (premium $81,739) 71 58,930
Freeport-McMoRan Copper & Gold, Inc., Strike Price 40,
Put, Expiration Nov. 2006 (premium $503,803) 1,150 138,000
Gold Fields Ltd., Strike Price 30, Call, Expiration Jan.
2007 (premium $42,600) 200 27,000
Harmony Gold Mining Co., Ltd., Strike Price 17.50, Call,
Expiration Jan. 2008 (premium $127,770) 500 192,500
Newmont Mining Corp., Strike Price 50, Call, Expiration
Jan. 2008 (premium $57,900) 50 60,500
Newmont Mining Corp., Strike Price 60, Call, Expiration
Jan. 2008 (premium $37,900) 50 38,000
Philadelphia Stock Exchange Gold & Silver Index, Strike
Price 110, Put, Expiration Dec. 2006 (premium
$1,043,519) 1,523 411,210
Philadelphia Stock Exchange Gold & Silver Index, Strike
Price 120, Put, Expiration Dec. 2006 (premium
$1,802,185) 1,673 769,580
-----------
1,855,665
- ----------------------------------------------------------------------------------------
TOTAL PURCHASED OPTIONS 1,855,665
- ----------------------------------------------------------------------------------------
(cost $3,905,347)
- ----------------------------------------------------------------------------------------
TOTAL SECURITIES 146,957,802
- ----------------------------------------------------------------------------------------
PRINCIPAL
REPURCHASE AGREEMENTS 27.24% AMOUNT
Joint Tri-Party Repurchase Agreements, 06/30/06,
collateralized by U.S. Treasury securities held in
joint tri-party repurchase accounts:
4.40% Bear Stearns, repurchase price $7,002,567 $7,000,000 7,000,000
4.50% Morgan Stanley Dean Witter, repurchase price
$49,677,961 49,659,339 49,659,339
- ----------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS 56,659,339
- ----------------------------------------------------------------------------------------
(cost $56,659,339)
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS 97.88% 203,617,141
- ----------------------------------------------------------------------------------------
(cost $149,605,601)
Other assets and liabilities, net 2.12% 4,410,209
-----------
NET ASSETS 100% $208,027,350
------------
See notes to portfolios of investments and notes to financial statements.
87
NOTES TO PORTFOLIOS OF INVESTMENTS June 30, 2006
LEGEND
* Non-income producing security GO General Obligation Bond
+ Affiliated company (see following) RS Restricted Security (see following)
ADR American Depositary Receipt S/R Subscription Receipt
GDR Global Depositary Receipt ZCB Zero Coupon Bond
CAD Canadian Dollar
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, 2006.
Securities with a 144A designation are exempt from registration
under Rule 144A of the Securities Act of 1933.
JOINT TRI-PARTY REPURCHASE AGREEMENTS
The terms of the joint tri-party repurchase agreements and the
securities held as collateral at June 30, 2006 were:
Morgan Stanley Dean Witter repurchase agreement, 06/30/06, 4.50%, due 07/03/06:
Total principal amount: $417,707,258; Total repurchase price: $417,863,898
Collateral:
$329,198,000 U.S. Treasury Note, 3.375%, 01/15/07
(total collateral market value, including accrued interest, of
$426,061,979)
Bear Stearns repurchase agreement, 06/30/06, 4.40%, due 07/03/06:
Total principal amount: $32,000,000; Total repurchase price: $32,011,733
Collateral:
$18,090,000 U.S. Treasury Note, 2.50%, 09/30/06
$15,000,000 U.S. Treasury Note, 3.875%, 07/15/10
(total collateral market value, including accrued interest, of
$32,656,193)
Other mutual funds managed by U.S. Global Investors, Inc.
participate in the joint tri-party repurchase agreements. Each owns
an undivided interest in the accounts.
88
NOTES TO PORTFOLIOS OF INVESTMENTS June 30, 2006
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, 2006.
SHARES OF AFFILIATED COMPANIES
JUNE 30, 2005 ADDITIONS REDUCTIONS JUNE 30, 2006
GLOBAL RESOURCES FUND
- -------------------------------------------------------------------------------------------------
Coalcorp Mining, Inc. (formerly Adobe
Ventures, Inc.) 2,140,000 19,385,625 (9,237,000) 12,288,625(a)
Consolidated Thompson-Lundmark Gold
Mines Ltd. -- 900,000 -- 900,000
Exile Resources, Inc. -- 4,278,675 (2,100,000) 2,178,675
Pacific Stratus Energy Ltd. 3,000,000 4,282,800 (6,535,800) 747,000(b)
PetroWorld Corp. -- 2,000,000 -- 2,000,000
Revett Minerals, Inc. -- 4,792,300 (147,000) 4,645,300
UMC Energy plc (formerly Uranium
Mining Corp. plc) -- 1,000,000 -- 1,000,000
White Nile Ltd. 12,772,000 748,000 (1,301,000) 12,219,000(a)
At June 30, 2006, the value of investments in affiliated companies
was $11,917,720, representing 0.93% of net assets, and the total
cost was $10,539,671. Net realized gains on transactions were
$511,658, and there was no income earned for the period.
SHARES OF AFFILIATED COMPANIES
JUNE 30, 2005 ADDITIONS REDUCTIONS JUNE 30, 2006
WORLD PRECIOUS MINERALS FUND
- ------------------------------------------------------------------------------------------------
Aberdeen International, Inc. -- 3,207,500 (1,000,000) 2,207,500
American Gold Capital Corp. 200,000 1,441,900 -- 1,641,900
Atikwa Minerals Corp. 1,545,333 743,000 -- 2,288,333
Caledon Resources plc 18,175,000 2,190,000 (75,000) 20,290,000
Corona Gold Ltd. 812,500 -- -- 812,500(a)
Diamonds North Resources Ltd. 2,207,000 607,400 (164,000) 2,650,400
Endeavour Mining Capital Corp. 1,484,100 -- (1,484,100) --(a)
Golden Odyssey Mining, Inc. -- 1,533,500 (60,000) 1,473,500(a)
Grandview Gold, Inc. -- 1,754,000 (470,000) 1,284,000
Laurion Gold, Inc. 3,438,000 3,242,000 (6,505,000) 175,000(a)
Moss Lake Gold Mines Ltd. 2,318,000 435,500 (55,000) 2,698,500
Nevada Pacific Gold Ltd. 3,892,335 608,900 (1,490,900) 3,010,335(a)
Northern Orion Resources, Inc. 7,336,900 351,100 (1,358,890) 6,329,110(a)
Pacific Rim Mining Corp. 5,049,500 239,600 (189,500) 5,099,600(a)
Romarco Minerals, Inc. 2,251,000 5,752,353 (22,500) 7,980,853
Vedron Gold, Inc. 2,578,500 7,532,259 (4,281,258) 5,829,501
At June 30, 2006, the value of investments in affiliated companies
was $13,874,323 representing 1.51% of net assets, and the total cost
was $12,733,499. Net realized gains on transactions were $7,959,478,
and there was $43,480 of income earned for the period.
(a) At June 30, 2006, the company is no longer defined as an
affiliate, although it was an affiliated company during the
period.
(b) During the period, security was subject to a 1-for-10 stock
split.
89
NOTES TO PORTFOLIOS OF INVESTMENTS June 30, 2006
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
Big Sky Energy Corp. 03/01/05 $0.50
Verona Development Corp., Units 04/21/06 $0.79
At June 30, 2006, the total cost of restricted securities was
$366,525, and the total value was $637,249, representing 0.94% of
net assets.
ACQUISITION COST PER
DATE SHARE
GLOBAL RESOURCES FUND
- ------------------------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS
African Minerals, Special Warrants 07/09/03 $6.00
Baja Mining Corp. 03/29/06 $0.77
Baja Mining Corp., Warrants (April 2008) 03/29/06 $0.00
Big Sky Energy Corp. 03/01/05-08/15/05 $0.64
Canadian Sub-Surface Energy Services Corp. 05/23/06 $6.68
Dune Energy, Inc. 01/27/06 $2.65
Eastern Plantinum Ltd. 03/23/06 $1.07
Eastern Plantinum Ltd., Warrants (March 2009) 03/23/06 $0.00
Exile Resources, Inc. 05/12/06 $0.45
Exile Resources, Inc., Warrants (May 2008) 05/12/06 $0.00
Gran Tierra Energy, Inc., Units 05/31/06 $1.50
Horizon North Logistics, Inc. 06/05/06 $12.59
Horizon North Logistics, Inc., Warrants (August 2006) 06/05/06 $12.59
Khan Resources Inc., Special Warrants 03/24/05 $0.82
Legacy Energy LLC, 144A 02/27/06 $19.00
Osmium Holdings S.A. 10/22/96-01/29/98 $987.07
Pacifica Resources Ltd. 03/15/06 $0.61
Pacifica Resources Ltd., Warrants (March 2008) 03/15/06 $0.00
Red Dragon Resources Corp., Units 06/12/06 $0.68
Trident Resources Corp., Units 06/09/06 $62.50
Zimasco Consolidated Enterprises Ltd. 06/15/95-09/30/99 $3.73
NOTE UNIT
Pacific Stratus Energy Ltd. 05/31/06 $0.91
At June 30, 2006, the total cost of restricted securities was
$33,597,250, and the total value was $41,345,508, representing 3.23%
of net assets.
90
NOTES TO PORTFOLIOS OF INVESTMENTS June 30, 2006
ACQUISITION COST PER
SECURITY DATE SHARE
WORLD PRECIOUS MINERALS FUND
- ------------------------------------------------------------------------------------------
COMMON STOCKS AND WARRANTS
African Minerals, Special Warrants 07/09/03 $6.00
Atlas Cromwell Ltd., 144A, Units 05/03/06 $0.34
Baja Mining Corp. 03/29/06 $0.77
Baja Mining Corp., Warrants (April 2008) 03/29/06 $0.00
Big Sky Energy Corp. 03/01/05 $0.50
Grandview Gold, Inc. 02/27/06 $0.96
Grandview Gold, Inc., Warrants (July 2009) 02/27/06 $0.00
Osmium Holdings S.A. 10/22/96-01/29/98 $1,280.75
Platte River Gold U.S., Inc. 03/01/04-06/07/04 $1.15
Platte River Gold U.S., Inc., Warrants (March 2009) 03/01/04 $0.00
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, 2006, the total cost of restricted securities was
$5,595,466, and the total value was $5,393,303, representing 0.59%
of net assets.
91
STATEMENTS OF ASSETS AND LIABILITIES
U.S. TREASURY
SECURITIES
CASH FUND
Investments, at identified cost $119,030,682
============
ASSETS
- ---------------------------------------------------------------------------
Investments, at value:
Securities $ 64,577,262
Repurchase Agreements 54,453,420
Cash --
Receivables:
Interest 212,326
Capital shares sold 1,090,501
From adviser --
Other assets 16,630
- ---------------------------------------------------------------------------
TOTAL ASSETS 120,350,139
- ---------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------
Payables:
Investments purchased --
Capital shares redeemed 1,192,597
Adviser and affiliates 62,244
Dividends and distributions 7,393
Accounts payable and accrued expenses 57,805
Due to custodian 1,784
- ---------------------------------------------------------------------------
TOTAL LIABILITIES 1,321,823
- ---------------------------------------------------------------------------
NET ASSETS $119,028,316
============
NET ASSETS CONSIST OF:
- ---------------------------------------------------------------------------
Paid-in capital $119,045,345
Accumulated undistributed net investment income 1,442
Accumulated net realized loss on investments and foreign
currencies (18,471)
Net unrealized appreciation (depreciation) of investments
and other assets and liabilities denominated in
foreign currencies --
------------
Net assets applicable to capital shares outstanding $119,028,316
============
Capital shares outstanding, an unlimited number of no
par shares authorized 119,100,142
============
NET ASSET VALUE, PUBLIC OFFERING PRICE, REDEMPTION PRICE,
PER SHARE $ 1.00
============
See accompanying notes to financial statements.
92
June 30, 2006
U.S. GOVERNMENT
SECURITIES NEAR-TERM TAX FREE
SAVINGS FUND TAX FREE FUND FUND
Investments, at identified cost $434,370,869 $15,808,513 $15,096,480
============ =========== ===========
ASSETS
- -------------------------------------------------------------------------------------------------------------------
Investments, at value:
Securities $434,370,869 $14,685,703 $13,622,463
Repurchase Agreements -- 1,017,724 1,827,276
Cash 1,216 -- --
Receivables:
Interest 1,422,998 191,931 185,706
Capital shares sold 2,842,685 60 635
From adviser -- 5,899 2,917
Other assets 20,379 1,569 2,418
- -------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 438,658,147 15,902,886 15,641,415
- -------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------------------
Payables:
Investments purchased -- -- 301,954
Capital shares redeemed 2,998,393 20,566 295,600
Adviser and affiliates 132,204 -- --
Dividends and distributions 26,600 8,172 8,395
Accounts payable and accrued expenses 83,711 43,742 43,934
Due to custodian -- -- --
- -------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 3,240,908 72,480 649,883
- -------------------------------------------------------------------------------------------------------------------
NET ASSETS $435,417,239 $15,830,406 $14,991,532
============ =========== ===========
NET ASSETS CONSIST OF:
- -------------------------------------------------------------------------------------------------------------------
Paid-in capital $435,022,427 $16,273,852 $15,373,763
Accumulated undistributed net investment income 406,891 17,411 28,467
Accumulated net realized loss on investments and foreign
currencies (12,079) (355,771) (763,957)
Net unrealized appreciation (depreciation) of investments
and other assets and liabilities denominated in
foreign currencies -- (105,086) 353,259
------------ ----------- -----------
Net assets applicable to capital shares outstanding $435,417,239 $15,830,406 $14,991,532
============ =========== ===========
Capital shares outstanding, an unlimited number of no
par shares authorized 435,651,428 7,470,527 1,251,240
============ =========== ===========
NET ASSET VALUE, PUBLIC OFFERING PRICE, REDEMPTION PRICE,
PER SHARE $ 1.00 $ 2.12 $ 11.98
============ =========== ===========
93
STATEMENTS OF ASSETS AND LIABILITIES
ALL AMERICAN CHINA REGION
EQUITY FUND OPPORTUNITY FUND
Investments, at identified cost $19,982,771 $65,705,581
=========== ===========
ASSETS
- ----------------------------------------------------------------------------------
Investments, at value:
Securities of unaffiliated issuers $18,581,142 $60,011,962
Securities of affiliated issuers -- --
Repurchase Agreements 2,948,119 10,628,365
Cash -- --
Foreign currencies (cost $216,946, $3,009,
$9,245,927, $1,809,141 and $1,841,824) 217,885 3,009
Receivables:
Investments sold 594,626 --
Dividends 10,929 111,651
Interest 369 1,329
Capital shares sold 8,890 607,968
Other assets 5,515 8,219
- ----------------------------------------------------------------------------------
TOTAL ASSETS 22,367,475 71,372,503
- ----------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------
Payables:
Investments purchased 682,688 3,404,631
Capital shares redeemed 76,826 31,767
Adviser and affiliates 9,959 84,631
Accounts payable and accrued expenses 50,508 90,331
- ----------------------------------------------------------------------------------
TOTAL LIABILITIES 819,981 3,611,360
- ----------------------------------------------------------------------------------
NET ASSETS $21,547,494 $67,761,143
=========== ===========
NET ASSETS CONSIST OF:
- ----------------------------------------------------------------------------------
Paid-in capital $17,337,549 $65,647,325
Accumulated undistributed net investment
income (distributions in excess of net
investment income) -- (1,317,209)
Accumulated net realized gain (loss) on
investments and foreign currencies 2,660,052 (1,497,142)
Net unrealized appreciation of investments
and other assets and liabilities
denominated in foreign currencies 1,549,893 4,928,169
----------- -----------
Net assets applicable to capital shares
outstanding $21,547,494 $67,761,143
=========== ===========
Capital shares outstanding, an
unlimited number of no par shares
authorized 781,031 7,783,021
=========== ===========
NET ASSET VALUE, PUBLIC OFFERING PRICE,
REDEMPTION PRICE, PER SHARE $ 27.59 $ 8.71
=========== ===========
See accompanying notes to financial statements.
94
June 30, 2006
GLOBAL RESOURCES WORLD PRECIOUS GOLD SHARES
FUND MINERALS FUND FUND
Investments, at identified cost $1,102,888,124 $715,682,496 $149,605,601
============== ============ ============
ASSETS
- ------------------------------------------------------------------------------------------------------------
Investments, at value:
Securities of unaffiliated issuers $1,221,867,048 $718,642,301 $146,957,802
Securities of affiliated issuers 11,917,720 13,874,323 --
Repurchase Agreements 58,818,910 181,927,225 56,659,339
Cash 2,765,776 438,328 11,182
Foreign currencies (cost $216,946, $3,009,
$9,245,927, $1,809,141 and $1,841,824) 9,322,315 2,210,834 1,940,241
Receivables:
Investments sold 5,857,137 5,571,265 1,973,831
Dividends 1,537,530 110,916 27,768
Interest 74,711 22,717 7,063
Capital shares sold 8,392,316 8,806,987 3,624,877
Other assets 33,381 32,516 20,613
- ------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 1,320,586,844 931,637,412 211,222,716
- ------------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------------
Payables:
Investments purchased 37,233,124 9,723,693 2,595,121
Capital shares redeemed 560,813 823,661 365,711
Adviser and affiliates 806,091 580,418 134,422
Accounts payable and accrued expenses 322,335 260,849 100,112
- ------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 38,922,363 11,388,621 3,195,366
- ------------------------------------------------------------------------------------------------------------
NET ASSETS $1,281,664,481 $920,248,791 $208,027,350
============== ============ ============
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------------------
Paid-in capital $ 970,449,324 $669,352,426 $212,522,737
Accumulated undistributed net investment
income (distributions in excess of net
investment income) 3,230,685 (5,176,414) (183,285)
Accumulated net realized gain (loss) on
investments and foreign currencies 118,252,132 56,963,666 (58,429,844)
Net unrealized appreciation of investments
and other assets and liabilities
denominated in foreign currencies 189,732,340 199,109,113 54,117,742
-------------- ------------ ------------
Net assets applicable to capital shares
outstanding $1,281,664,481 $920,248,791 $208,027,350
============== ============ ============
Capital shares outstanding, an
unlimited number of no par shares
authorized 74,418,065 31,889,787 13,435,888
============== ============ ============
NET ASSET VALUE, PUBLIC OFFERING PRICE,
REDEMPTION PRICE, PER SHARE $ 17.22 $ 28.86 $ 15.48
============== ============ ============
95
STATEMENTS OF OPERATIONS
U.S. TREASURY
SECURITIES
CASH FUND
NET INVESTMENT INCOME
INCOME:
- ---------------------------------------------------------------------------
Interest and other $4,617,516
EXPENSES:
- ---------------------------------------------------------------------------
Management fee 575,002
Transfer agent fees and expenses 177,725
Accounting service fees and expenses 23,881
Professional fees 60,067
Custodian fees 54,967
Shareholder reporting 70,526
Registration fees 32,276
Trustee fees and expenses 22,831
Miscellaneous 38,077
----------
Total expenses before reductions 1,055,352
Expenses offset - Note 1 J (2,359)
Expenses reimbursed - Note 2 --
Net recouped fees - Note 2 45,136
----------
NET EXPENSES 1,098,129
- ---------------------------------------------------------------------------
NET INVESTMENT INCOME 3,519,387
- ---------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS
ON INVESTMENTS
Realized gain (loss) from securities --
Net change in unrealized depreciation of investments --
- ---------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS
ON INVESTMENTS --
- ---------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $3,519,387
==========
See accompanying notes to financial statements.
96
For the Year Ended June 30, 2006
U.S. GOVERNMENT
SECURITIES NEAR-TERM TAX FREE
SAVINGS FUND TAX FREE FUND FUND
NET INVESTMENT INCOME
INCOME:
- ---------------------------------------------------------------------------------------------------------------
Interest and other $16,818,230 $ 592,304 $ 879,002
EXPENSES:
- ---------------------------------------------------------------------------------------------------------------
Management fee 1,853,916 83,785 139,880
Transfer agent fees and expenses 353,547 13,571 14,940
Accounting service fees and expenses 75,039 40,072 36,993
Professional fees 69,653 59,607 59,666
Custodian fees 61,738 13,306 13,824
Shareholder reporting 110,297 4,345 5,411
Registration fees 37,762 14,064 13,343
Trustee fees and expenses 22,832 22,831 22,831
Miscellaneous 51,794 6,751 9,135
----------- --------- ---------
Total expenses before reductions 2,636,578 258,332 316,023
Expenses offset - Note 1 J -- (159) (204)
Expenses reimbursed - Note 2 (786,878) (182,766) (185,264)
Net recouped fees - Note 2 -- -- --
----------- --------- ---------
NET EXPENSES 1,849,700 75,407 130,555
- ---------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 14,968,530 516,897 748,447
- ---------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS
ON INVESTMENTS
Realized gain (loss) from securities -- (198,526) 86,123
Net change in unrealized depreciation of investments -- (189,289) (662,607)
- ---------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED LOSS
ON INVESTMENTS -- (387,815) (576,484)
- ---------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $14,968,530 $ 129,082 $ 171,963
=========== ========= =========
97
STATEMENTS OF OPERATIONS
ALL AMERICAN CHINA REGION
EQUITY FUND OPPORTUNITY FUND
NET INVESTMENT INCOME
INCOME:
- ----------------------------------------------------------------------------------
Dividends from unaffiliated issuers $ 138,547 $ 813,243
Dividends from affiliated issuers -- --
Foreign taxes withheld on dividends (3,080) (26,024)
---------- ----------
Net dividends 135,467 787,219
Interest and other 90,196 220,643
---------- ----------
TOTAL INCOME 225,663 1,007,862
EXPENSES:
- ----------------------------------------------------------------------------------
Management fee 156,986 565,352
Transfer agent fees and expenses 82,269 119,779
Accounting service fees and expenses 27,120 58,446
Professional fees 77,829 75,485
Custodian fees 32,179 135,443
Shareholder reporting 26,858 25,844
Registration fees 15,442 19,913
Trustee fees and expenses 22,832 22,831
Miscellaneous 18,170 22,193
---------- ----------
Total expenses before reductions 459,685 1,045,286
Expenses offset - Note 1 J (2,360) (2,963)
Expenses reimbursed - Note 2 (91,074) --
---------- ----------
NET EXPENSES 366,251 1,042,323
- ----------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (140,588) (34,461)
- ----------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Realized gain (loss) from:
Securities of unaffiliated issuers 3,410,558 8,768,712
Securities of affiliated issuers -- --
Foreign currency transactions 80 (157,549)
Written Options -- 38,349
---------- ----------
NET REALIZED GAIN 3,410,638 8,649,512
---------- ----------
Net change in unrealized appreciation
(depreciation) of:
Investments (399,058) (403,144)
Other assets and liabilities
denominated in foreign currencies 3,402 1,637
---------- ----------
NET UNREALIZED APPRECIATION
(DEPRECIATION) (395,656) (401,507)
- ----------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 3,014,982 8,248,005
- ----------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $2,874,394 $8,213,544
========== ==========
See accompanying notes to financial statements.
98
For the Year Ended June 30, 2006
GLOBAL RESOURCES WORLD PRECIOUS GOLD SHARES
FUND MINERALS FUND FUND
NET INVESTMENT INCOME
INCOME:
- ------------------------------------------------------------------------------------------------------------
Dividends from unaffiliated issuers $ 14,908,804 $ 1,323,979 $ 606,403
Dividends from affiliated issuers -- 43,480 --
Foreign taxes withheld on dividends (1,708,173) (110,845) (19,493)
------------ ------------ -----------
Net dividends 13,200,631 1,256,614 586,910
Interest and other 5,228,400 4,581,683 1,063,715
------------ ------------ -----------
TOTAL INCOME 18,429,031 5,838,297 1,650,625
EXPENSES:
- ------------------------------------------------------------------------------------------------------------
Management fee 5,819,998 3,737,516 878,795
Transfer agent fees and expenses 1,453,247 676,923 321,201
Accounting service fees and expenses 480,213 305,903 103,002
Professional fees 135,816 146,552 101,183
Custodian fees 400,935 450,599 91,545
Shareholder reporting 191,685 105,747 107,586
Registration fees 162,996 105,731 37,507
Trustee fees and expenses 22,831 22,831 22,831
Miscellaneous 68,888 81,211 59,590
------------ ------------ -----------
Total expenses before reductions 8,736,609 5,633,013 1,723,240
Expenses offset - Note 1 J (52,670) (22,869) (3,221)
Expenses reimbursed - Note 2 -- -- --
------------ ------------ -----------
NET EXPENSES 8,683,939 5,610,144 1,720,019
- ------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 9,745,092 228,153 (69,394)
- ------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Realized gain (loss) from:
Securities of unaffiliated issuers 153,716,907 81,779,987 26,541,398
Securities of affiliated issuers 511,658 7,959,478 --
Foreign currency transactions (1,193,214) (598,100) (103,505)
Written Options 222,000 -- 59,616
------------ ------------ -----------
NET REALIZED GAIN 153,257,351 89,141,365 26,497,509
------------ ------------ -----------
Net change in unrealized appreciation
(depreciation) of:
Investments 118,482,734 163,103,704 42,793,639
Other assets and liabilities
denominated in foreign currencies 10,439 332,111 106,039
------------ ------------ -----------
NET UNREALIZED APPRECIATION
(DEPRECIATION) 118,493,173 163,435,815 42,899,678
- ------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 271,750,524 252,577,180 69,397,187
- ------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $281,495,616 $252,805,333 $69,327,793
============ ============ ===========
99
STATEMENTS OF CHANGES IN NET ASSETS
U.S. TREASURY SECURITIES
CASH FUND
---------------------------------
YEAR ENDED YEAR ENDED
JUNE 30, 2006 JUNE 30, 2005
INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS:
- ----------------------------------------------------------------------------------------
Net investment income $ 3,519,387 $ 1,286,744
Net realized gain (loss) -- --
Net unrealized depreciation -- --
------------ ------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS 3,519,387 1,286,744
DISTRIBUTIONS TO SHAREHOLDERS:
- ----------------------------------------------------------------------------------------
From net investment income (3,519,445) (1,284,803)
------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (3,519,445) (1,284,803)
FROM CAPITAL SHARE TRANSACTIONS:
- ----------------------------------------------------------------------------------------
Proceeds from shares sold 623,320,464 885,364,783
Distributions reinvested 3,408,560 1,241,293
------------ ------------
626,729,024 886,606,076
Cost of shares redeemed (631,758,750) (875,124,840)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS (5,029,726) 11,481,236
- ----------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS (5,029,784) 11,483,177
- ----------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 124,058,100 112,574,923
- ----------------------------------------------------------------------------------------
END OF YEAR $119,028,316 $124,058,100
- ----------------------------------------------------------------------------------------
Accumulated undistributed net investment income,
end of year $ 1,442 $ 1,500
============ ============
CAPITAL SHARE ACTIVITY
- ----------------------------------------------------------------------------------------
Shares sold 623,320,464 885,364,783
Shares reinvested 3,408,560 1,241,293
Shares redeemed (631,758,750) (875,124,840)
------------ ------------
NET SHARE ACTIVITY (5,029,726) 11,481,236
============ ============
See accompanying notes to financial statements.
100
U.S. GOVERNMENT SECURITIES
SAVINGS FUND NEAR-TERM TAX FREE FUND
----------------------------------- -----------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2006 JUNE 30, 2005 JUNE 30, 2006 JUNE 30, 2005
INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS:
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 14,968,530 $ 7,220,102 $ 516,897 $ 525,000
Net realized gain (loss) -- 10,041 (198,526) (5,056)
Net unrealized depreciation -- -- (189,289) (26,783)
------------ ------------ ----------- -----------
NET INCREASE IN NET ASSETS FROM
OPERATIONS 14,968,530 7,230,143 129,082 493,161
DISTRIBUTIONS TO SHAREHOLDERS:
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment income (14,951,407) (7,229,289) (511,420) (525,088)
------------ ------------ ----------- -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (14,951,407) (7,229,289) (511,420) (525,088)
FROM CAPITAL SHARE TRANSACTIONS:
- -----------------------------------------------------------------------------------------------------------------------------------
Proceeds from shares sold 352,226,702 282,004,726 4,784,222 5,862,192
Distributions reinvested 14,689,650 7,102,469 418,555 462,629
------------ ------------ ----------- -----------
366,916,352 289,107,195 5,202,777 6,324,821
Cost of shares redeemed (343,494,954) (318,850,857) (7,695,821) (6,260,222)
------------ ------------ ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS 23,421,398 (29,743,662) (2,493,044) 64,599
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 23,438,521 (29,742,808) (2,875,382) 32,672
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 411,978,718 441,721,526 18,705,788 18,673,116
- -----------------------------------------------------------------------------------------------------------------------------------
END OF YEAR $435,417,239 $411,978,718 $15,830,406 $18,705,788
- -----------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net investment income,
end of year $ 406,891 $ 389,768 $ 17,411 $ 11,934
============ ============ =========== ===========
CAPITAL SHARE ACTIVITY
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold 352,226,702 282,004,726 2,232,847 2,682,173
Shares reinvested 14,689,650 7,102,469 195,229 211,912
Shares redeemed (343,494,954) (318,850,857) (3,585,124) (2,865,075)
------------ ------------ ----------- -----------
NET SHARE ACTIVITY 23,421,398 (29,743,662) (1,157,048) 29,010
============ ============ =========== ===========
101
STATEMENTS OF CHANGES IN NET ASSETS
TAX FREE FUND
-----------------------------------
YEAR ENDED YEAR ENDED
JUNE 30, 2006 JUNE 30, 2005
INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS:
- ------------------------------------------------------------------------------------------
Net investment income (loss) $ 748,447 $ 940,910
Net realized gain 86,123 154,365
Net unrealized appreciation (depreciation) (662,607) 488,415
----------- -----------
NET INCREASE IN NET ASSETS FROM
OPERATIONS 171,963 1,583,690
DISTRIBUTIONS TO SHAREHOLDERS:
- ------------------------------------------------------------------------------------------
From net investment income (746,191) (938,868)
From net capital gains -- --
----------- -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (746,191) (938,868)
FROM CAPITAL SHARE TRANSACTIONS:
- ------------------------------------------------------------------------------------------
Proceeds from shares sold 7,108,359 4,959,533
Distributions reinvested 667,681 867,531
Proceeds from short-term trading fees -- --
----------- -----------
7,776,040 5,827,064
Cost of shares redeemed (14,643,249) (12,205,425)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS (6,867,209) (6,378,361)
- ------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS (7,441,437) (5,733,539)
- ------------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 22,432,969 28,166,508
- ------------------------------------------------------------------------------------------
END OF YEAR $14,991,532 $22,432,969
- ------------------------------------------------------------------------------------------
Accumulated undistributed net investment income
(distributions in excess of net investment income),
end of year $ 28,467 $ 26,211
=========== ===========
CAPITAL SHARE ACTIVITY
- ------------------------------------------------------------------------------------------
Shares sold 583,280 403,159
Shares reinvested 54,925 70,591
Shares redeemed (1,205,634) (986,794)
----------- -----------
NET SHARE ACTIVITY (567,429) (513,044)
=========== ===========
See accompanying notes to financial statements.
102
CHINA REGION
ALL AMERICAN EQUITY FUND OPPORTUNITY FUND
----------------------------------- -----------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2006 JUNE 30, 2005 JUNE 30, 2006 JUNE 30, 2005
INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS:
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ (140,588) $ (17,399) $ (34,461) $ (174,051)
Net realized gain 3,410,638 1,502,686 8,649,512 1,467,778
Net unrealized appreciation (depreciation) (395,656) 73,894 (401,507) 4,486,129
----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS FROM
OPERATIONS 2,874,394 1,559,181 8,213,544 5,779,856
DISTRIBUTIONS TO SHAREHOLDERS:
- -----------------------------------------------------------------------------------------------------------------------------------
From net investment income -- -- (909,532) (727,576)
From net capital gains (455,916) -- -- --
----------- ----------- ----------- -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (455,916) -- (909,532) (727,576)
FROM CAPITAL SHARE TRANSACTIONS:
- -----------------------------------------------------------------------------------------------------------------------------------
Proceeds from shares sold 4,213,480 3,408,040 48,877,918 9,341,110
Distributions reinvested 446,686 -- 876,930 697,792
Proceeds from short-term trading fees 1,015 1,380 99,066 60,238
----------- ----------- ----------- -----------
4,661,181 3,409,420 49,853,914 10,099,140
Cost of shares redeemed (4,785,228) (5,689,533) (19,907,492) (19,730,277)
----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS (124,047) (2,280,113) 29,946,422 (9,631,137)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 2,294,431 (720,932) 37,250,434 (4,578,857)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 19,253,063 19,973,995 30,510,709 35,089,566
- -----------------------------------------------------------------------------------------------------------------------------------
END OF YEAR $21,547,494 $19,253,063 $67,761,143 $30,510,709
- -----------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net investment income
(distributions in excess of net investment income),
end of year $ -- $ -- $(1,317,209) $ (818,834)
=========== =========== =========== ===========
CAPITAL SHARE ACTIVITY
- -----------------------------------------------------------------------------------------------------------------------------------
Shares sold 153,852 149,151 5,590,725 1,423,522
Shares reinvested 16,768 -- 115,690 105,248
Shares redeemed (176,376) (248,836) (2,366,044) (3,070,853)
----------- ----------- ----------- -----------
NET SHARE ACTIVITY (5,756) (99,685) 3,340,371 (1,542,083)
=========== =========== =========== ===========
103
STATEMENTS OF CHANGES IN NET ASSETS
GLOBAL RESOURCES FUND
----------------------------------
YEAR ENDED YEAR ENDED
JUNE 30, 2006 JUNE 30, 2005
INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS:
- ---------------------------------------------------------------------------------------
Net investment income (loss) $ 9,745,092 $ 2,595,704
Net realized gain 153,257,351 38,599,722
Net unrealized appreciation (depreciation) 118,493,173 58,957,966
-------------- ------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS 281,495,616 100,153,392
DISTRIBUTIONS TO SHAREHOLDERS:
- ---------------------------------------------------------------------------------------
From net investment income (16,043,181) (7,961,606)
From net capital gains (53,477,271) (6,887,607)
-------------- ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (69,520,452) (14,849,213)
FROM CAPITAL SHARE TRANSACTIONS:
- ---------------------------------------------------------------------------------------
Proceeds from shares sold 1,156,093,363 584,409,388
Distributions reinvested 65,860,313 14,127,634
Proceeds from short-term trading fees 203,807 78,875
-------------- ------------
1,222,157,483 598,615,897
Cost of shares redeemed (640,651,603) (331,310,682)
-------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS 581,505,880 267,305,215
- ---------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 793,481,044 352,609,394
- ---------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 488,183,437 135,574,043
- ---------------------------------------------------------------------------------------
END OF YEAR $1,281,664,481 $488,183,437
- ---------------------------------------------------------------------------------------
Accumulated undistributed net investment income
(distributions in excess of net investment
income), end of year $ 3,230,685 $ (4,225,286)
============== ============
CAPITAL SHARE ACTIVITY
- ---------------------------------------------------------------------------------------
Shares sold 72,318,323 50,711,235
Shares reinvested 4,615,299 1,353,225
Shares redeemed (41,039,967) (29,694,876)
-------------- ------------
NET SHARE ACTIVITY 35,893,655 22,369,584
============== ============
See accompanying notes to financial statements.
104
WORLD PRECIOUS
MINERALS FUND GOLD SHARES FUND
---------------------------------- ---------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2006 JUNE 30, 2005 JUNE 30, 2006 JUNE 30, 2005
INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS:
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ 228,153 $ (2,705,134) $ (69,394) $ (776,404)
Net realized gain 89,141,365 40,347,602 26,497,509 7,821,039
Net unrealized appreciation (depreciation) 163,435,815 (2,155,120) 42,899,678 (432,535)
-------------- ------------ ------------ -----------
NET INCREASE IN NET ASSETS FROM
OPERATIONS 252,805,333 35,487,348 69,327,793 6,612,100
DISTRIBUTIONS TO SHAREHOLDERS:
- ------------------------------------------------------------------------------------------------------------------------------
From net investment income (11,327,580) (7,944,295) (1,018,347) (428,417)
From net capital gains (6,323,156) -- -- --
-------------- ------------ ------------ -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (17,650,736) (7,944,295) (1,018,347) (428,417)
FROM CAPITAL SHARE TRANSACTIONS:
- ------------------------------------------------------------------------------------------------------------------------------
Proceeds from shares sold 1,079,149,474 678,942,013 337,422,942 188,220,324
Distributions reinvested 16,536,899 7,470,390 941,813 393,191
Proceeds from short-term trading fees 1,229,616 1,362,092 606,882 397,737
-------------- ------------ ------------ -----------
1,096,915,989 687,774,495 338,971,637 189,011,252
Cost of shares redeemed (680,134,237) (693,856,608) (263,069,829) (198,110,589)
-------------- ------------ ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS 416,781,752 (6,082,113) 75,901,808 (9,099,337)
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 651,936,349 21,460,940 144,211,254 (2,915,654)
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 268,312,442 246,851,502 63,816,096 66,731,750
- ------------------------------------------------------------------------------------------------------------------------------
END OF YEAR $ 920,248,791 $268,312,442 $208,027,350 $63,816,096
- ------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net investment income
(distributions in excess of net investment
income), end of year $ (5,176,414) $(15,149,750) $ (183,285) $ 251,659
============== ============ ============ ===========
CAPITAL SHARE ACTIVITY
- ------------------------------------------------------------------------------------------------------------------------------
Shares sold 44,379,941 44,715,320 28,690,541 24,910,192
Shares reinvested 851,979 460,566 91,795 48,363
Shares redeemed (30,654,630) (45,905,829) (23,670,309) (26,162,376)
------------ ------------ ------------ -----------
NET SHARE ACTIVITY 14,577,290 (729,943) 5,112,027 (1,203,821)
============ ============ ============ ===========
105
NOTES TO FINANCIAL STATEMENTS June 30, 2006
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 a 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 a Fund's securities occur after
the close of the primary exchange
106
NOTES TO FINANCIAL STATEMENTS June 30, 2006
and before a 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. The Funds may use a
systematic fair value model provided by an independent third party to value
international securities.
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 a fund is 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 principal amount of the repurchase obligation. The
Funds use joint tri-party repurchase agreement accounts 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 failure of
the counterparty 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
107
NOTES TO FINANCIAL STATEMENTS June 30, 2006
amount of the premium. Transactions in written call options during
the year ended June 30, 2006, were as follows:
CHINA REGION GLOBAL
OPPORTUNITY FUND RESOURCES FUND GOLD SHARES FUND
-------------------------------------------------------------------
NUMBER OF PREMIUMS NUMBER OF PREMIUMS NUMBER OF PREMIUMS
CONTRACTS RECEIVED CONTRACTS RECEIVED CONTRACTS RECEIVED
Options outstanding at
June 30, 2005 -- $ -- -- $ -- -- $ --
Options written 190 38,349 1,600 222,000 225 59,616
Options terminated in
closing purchase
options (80) (19,059) (1,600) (222,000) (225) (59,616)
Options expired -- -- -- -- -- --
Options exercised (110) (19,290) -- -- -- --
----- -------- ------- -------- ----- --------
Options outstanding at
June 30, 2006 -- $ -- -- $ -- -- $ --
===== ======== ======= ======== ===== ========
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 prevailing exchange rate. Security
transactions, income and expenses are converted at the prevailing
rate of exchange on the respective dates of the transaction. 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 or to
defend the portfolio against currency fluctuations. 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, 2006.
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
108
NOTES TO FINANCIAL STATEMENTS June 30, 2006
distribute substantially all of their taxable income to shareholders.
Accordingly, no provision for federal income taxes is required.
In June 2006, the Financial Accounting Standards Board issued
Interpretation No. 48, Accounting for Uncertainty in Income Taxes
(FIN 48). FIN 48 sets forth a recognition threshold and measurement
method for the financial statement recognition and measurement of a tax
position taken or expected to be taken on a tax return. FIN 48 will be
effective for the Funds' fiscal year ending June 30, 2008, and will be
applied to all open tax years as of the effective date. No
determination has been made whether the adoption of FIN 48 will impact
the Funds' net assets or have any other effect on the Funds' financial
statements.
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 Fund held less than 30 days are subject to
a short-term trading fee equal to 0.25% of the proceeds of the
redeemed shares. Shares held in the World Precious Minerals and
Gold Shares Funds less than 30 days are subject to a short-term
trading fee equal to 0.50% 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.
109
NOTES TO FINANCIAL STATEMENTS June 30, 2006
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, 2007,
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
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 .75% of the first $250,000,000 and
Equity and Tax Free .50% of the excess
U.S. Treasury Securities Cash .50% of the first $250,000,000 and
and U.S. Government Securities .375% of the excess
Savings
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 voluntarily 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, 2006, 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%. In addition, the Adviser
has contractually limited total fund operating expenses to not
exceed 0.45% for the U.S. Government Securities Savings Fund, 0.45%
for the Near-Term Tax Free Fund, 0.70% for the Tax Free Fund and
1.75% for the All American Equity Fund on an annualized basis
through November 01, 2006, and until such later date as the Adviser
determines.
110
NOTES TO FINANCIAL STATEMENTS June 30, 2006
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 extent 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 were recoverable by the
Adviser through June 30, 2007. The U.S. Treasury Securities Cash Fund
reimbursed the Adviser the previously waived amount of $45,136 during
the year ended June 30, 2006. As of June 30, 2006, there were no
amounts recoverable by the Adviser under this agreement.
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, 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 the Funds during the
year ended June 30, 2006, in the amounts of $232,967 and $33,533,
respectively.
During the year ended June 30, 2006, A & B Mailers, Inc., a
wholly-owned subsidiary of the Adviser, was paid $347,423 for
mailing services provided to the Funds.
The 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.
111
NOTES TO FINANCIAL STATEMENTS June 30, 2006
NOTE 3: INVESTMENT ACTIVITY
Cost of purchases and proceeds from sales of long-term securities
for the year ended June 30, 2006, are summarized as follows:
FUND PURCHASES SALES
-----------------------------------------------------------------------
Near-Term Tax Free $ 5,097,439 $ 7,744,741
Tax Free 3,192,121 10,537,236
All American Equity 69,671,284 71,967,087
China Region Opportunity 143,762,838 120,264,048
Global Resources 1,795,671,400 1,269,336,193
World Precious Minerals 495,734,702 270,985,975
Gold Shares 88,144,001 74,508,948
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 net assets at June 30, 2006, were
0.94% of China Region Opportunity, 3.81% of Global Resources, and
0.73% of World Precious Minerals.
Investments in foreign issuers as a percent of total investments at
June 30, 2006, were: 80.26% of China Region Opportunity, 70.05% of
Global Resources, 76.09% of World Precious Minerals and 66.27% of
Gold Shares.
NOTE 4: TAX INFORMATION
The following table presents the income tax basis of the securities
owned at June 30, 2006, 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 $ 119,030,682 $ -- $ -- $ --
U.S. Government Securities Savings 434,370,869 -- -- --
Near-Term Tax Free 15,808,513 51,378 (156,464) (105,086)
Tax Free 15,096,480 394,684 (41,425) 353,259
All American Equity 20,009,767 1,912,178 (392,684) 1,519,494
China Region Opportunity 69,116,493 3,252,938 (1,729,104) 1,523,834
Global Resources 1,160,048,730 170,610,652 (38,055,704) 132,554,948
World Precious Minerals 774,947,089 163,467,583 (23,970,823) 139,496,760
Gold Shares 149,955,826 57,126,603 (3,465,288) 53,661,315
112
NOTES TO FINANCIAL STATEMENTS June 30, 2006
As of June 30, 2006, the components of distributable earnings on a
tax basis were as follows:
UNDISTRIBUTED UNDISTRIBUTED UNDISTRIBUTED NET UNREALIZED
TAX EXEMPT ORDINARY LONG-TERM APPRECIATION
FUND INCOME INCOME CAPITAL GAINS (DEPRECIATION)
--------------------------------------------------------------------------------------------------
U.S. Treasury Securities Cash $ -- $ 8,835 $ -- $ --
U.S. Government Securities Savings -- 433,491 -- --
Near-Term Tax Free -- 25,583 -- (105,086)
Tax Free -- 36,862 -- 353,259
All American Equity -- 2,478,347 208,701 1,522,897
China Region Opportunity -- 1,331,121 -- 1,517,257
Global Resources -- 142,212,918 36,435,112 132,567,127
World Precious Minerals -- 77,614,502 33,437,343 139,844,520
Gold Shares -- -- -- 53,768,080
The differences between book-basis and tax-basis unrealized
appreciation (depreciation) for All American Equity, China Region
Opportunity, Global Resources, World Precious Minerals and Gold
Shares are attributable primarily to the tax deferral of losses on
wash sales, investment in passive foreign investment companies
(PFIC), forwards marked to market and unreversed return of capital
in Canadian Trusts.
The tax character of distributions paid during the year ended June
30, 2006, were as follows:
TAX-EXEMPT ORDINARY LONG-TERM
FUND INCOME INCOME CAPITAL GAINS TOTAL
------------------------------------------------------------------------------------------
U.S. Treasury Securities Cash $ -- $3,519,445 $ -- $ 3,519,445
U.S. Government Securities Savings -- 14,951,407 -- 14,951,407
Near-Term Tax Free 458,132 53,288 -- 511,420
Tax Free 705,578 40,613 -- 746,191
All American Equity -- -- 455,916 455,916
China Region Opportunity -- 909,532 -- 909,532
Global Resources -- 59,079,652 10,440,800 69,520,452
World Precious Minerals -- 12,189,828 5,460,908 17,650,736
Gold Shares -- 1,018,347 -- 1,018,347
113
NOTES TO FINANCIAL STATEMENTS June 30, 2006
The tax character of distributions paid during the fiscal year
ended June 30, 2005, were as follows:
TAX-EXEMPT ORDINARY LONG-TERM
FUND INCOME INCOME CAPITAL GAINS TOTAL
------------------------------------------------------------------------------------------
U.S. Treasury Securities Cash $ -- $1,284,803 $ -- $ 1,284,803
U.S. Government Securities Savings -- 7,229,289 -- 7,229,289
Near-Term Tax Free 490,494 34,594 -- 525,088
Tax Free 893,128 45,740 -- 938,868
All American Equity -- -- -- --
China Region Opportunity -- 727,576 -- 727,576
Global Resources -- 9,712,693 5,136,520 14,849,213
World Precious Minerals -- 7,944,295 -- 7,944,295
Gold Shares -- 428,417 -- 428,417
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, 2006, are as follows:
EXPIRATION DATE
FUND 2007 2008 2009 2010
--------------------------------------------------------------------------------------
U.S. Treasury Securities Cash $ 7,529 $ 10,657 $ -- $ --
U.S. Government Securities Savings -- -- -- --
Near-Term Tax Free -- 17,590 59,454 --
Tax Free -- -- 252,154 --
All American Equity -- -- -- --
China Region Opportunity -- -- 459,833 193,867
Global Resources -- -- -- --
World Precious Minerals -- -- -- --
Gold Shares 50,050,196 2,931,501 4,098,335 --
EXPIRATION DATE
FUND 2011 2012 2013 2014 TOTAL
-------------------------------------------------------------------------------------------
U.S. Treasury Securities Cash $ 285 $ -- $ -- $ -- $ 18,471
U.S. Government Securities Savings -- 12,079 -- -- 12,079
Near-Term Tax Free -- 46,218 33,686 2,760 159,708
Tax Free -- 90,567 421,236 -- 763,957
All American Equity -- -- -- -- --
China Region Opportunity 80,860 -- -- -- 734,560
Global Resources -- -- -- -- --
World Precious Minerals -- -- -- -- --
Gold Shares 1,122,291 -- -- -- 58,202,323
114
NOTES TO FINANCIAL STATEMENTS June 30, 2006
POST OCTOBER 31, 2005 POST OCTOBER 31, 2005
FUND CAPITAL LOSS DEFERRAL CURRENCY LOSS DEFERRAL
--------------------------------------------------------------------------------
Near-Term Tax Free $196,063 $ --
Gold Shares -- 61,144
The amounts above, in accordance with tax rules, are deemed to have
occurred on July 1, 2006.
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 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, 2006.
NOTE 7: SHARES OF BENEFICIAL INTEREST
At June 30, 2006, individual shareholders holding more than 5% of
outstanding shares comprised 5.00% and 8.21% of the Near-Term Tax
Free Fund and the Tax Free Fund, respectively. In addition, the
Adviser held 8.19% of the Near-Term Tax Free Fund.
NOTE 8: NEAR-TERM TAX FREE FUND STOCK SPLIT
Effective as of the close of business on January 3, 2005, Near-Term
Tax Free Fund instituted a 5-for-1 stock split. All capital share
activity and per share data for Near-Term Tax Free Fund for the
previous periods presented in these financial statements has been
adjusted to reflect the stock split.
115
FINANCIAL HIGHLIGHTS
U.S. TREASURY SECURITIES CASH FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2006 2005 2004 2003 2002
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income .03 .01 --(a) .01 .01
Net realized and unrealized gain -- -- -- -- --
-------- -------- -------- -------- --------
Total from investment activities .03 .01 --(a) .01 .01
-------- -------- -------- -------- --------
Distributions from net investment income (.03) (.01) --(a) (.01) (.01)
- ---------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (b) 3.11% 1.12% .08% .57% 1.43%
Ratios to Average Net Assets (c):
Net investment income 3.06% 1.11% .07% .52% 1.43%
Total expenses .92% .97% 1.00% .97% 1.00%
Expenses reimbursed or offset --(d) --(d) (.04)% --(d) --(d)
Net recouped fees .03% -- -- -- --
Net expenses .95% .97% .96% .97% 1.00%
NET ASSETS, END OF YEAR (IN THOUSANDS) $119,028 $124,058 $112,575 $123,879 $134,930
U.S. GOVERNMENT SECURITIES SAVINGS FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2006 2005 2004 2003 2002
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income .04 .02 .01 .01 .02
Net realized and unrealized gain -- -- -- -- --
-------- -------- -------- -------- --------
Total from investment activities .04 .02 .01 .01 .02
-------- -------- -------- -------- --------
Distributions from net investment income (.04) (.02) (.01) (.01) (.02)
- ---------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (b) 3.69% 1.70% .63% 1.09% 2.20%
Ratios to Average Net Assets (c):
Net investment income 3.64% 1.67% .61% 1.08% 2.20%
Total expenses .64% .65% .65% .61% .59%
Expenses reimbursed or offset (.19)% (.20)% (.20)% (.16)% (.14)%
Net expenses .45% .45% .45% .45% .45%
NET ASSETS, END OF YEAR (IN THOUSANDS) $435,417 $411,979 $441,722 $529,829 $691,843
<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.
(d) Ratio does not round to 0.01%.
</FN>
See accompanying notes to financial statements.
116
FINANCIAL HIGHLIGHTS
NEAR-TERM TAX FREE FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2006 2005* 2004* 2003* 2002*
NET ASSET VALUE, BEGINNING OF YEAR $2.17 $2.17 $2.23 $2.16 $2.12
- ---------------------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income .07 .07 .06 .06 .08
Net realized and unrealized gain (loss) (.05) (.01) (.06) .07 .04
------- ------- ------- ------- ------
Total from investment activities .02 .06 .00 .13 .12
------- ------- ------- ------- ------
Distributions from net investment income (.07) (.06) (.06) (.06) (.08)
- ---------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $2.12 $2.17 $2.17 $2.23 $2.16
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (a) .75% 2.75% .20% 5.97% 5.65%
Ratios to Average Net Assets (b):
Net investment income 3.08% 2.79% 2.73% 2.83% 3.73%
Total expenses 1.54% 1.49% 1.25% 1.44% 2.63%
Expenses reimbursed or offset (1.09)% (1.04)% (.80)% (.94)% (2.01)%
Net expenses .45% .45% .45% .50% .62%
Portfolio turnover rate 33% 5% 21% 20% 19%
NET ASSETS, END OF YEAR (IN THOUSANDS) $15,830 $18,706 $18,673 $21,979 $9,752
TAX FREE FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2006 2005 2004 2003 2002
NET ASSET VALUE, BEGINNING OF YEAR $12.33 $12.08 $12.65 $12.18 $11.95
- ---------------------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income .52 .44 .43 .42 .50
Net realized and unrealized gain (loss) (.36) .25 (.58) .48 .23
------- ------- ------- ------- -------
Total from investment activities .16 .69 (.15) .90 .73
------- ------- ------- ------- -------
Distributions from net investment income (.51) (.44) (.42) (.43) (.50)
- ---------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $11.98 $12.33 $12.08 $12.65 $12.18
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (a) 1.30% 5.78% (1.25)% 7.49% 6.18%
Ratios to Average Net Assets (b):
Net investment income 4.01% 3.50% 3.22% 3.34% 4.13%
Total expenses 1.69% 1.47% 1.09% 1.22% 1.56%
Expenses reimbursed or offset (.99)% (.77)% (.39)% (.52)% (.86)%
Net expenses .70% .70% .70% .70% .70%
Portfolio turnover rate 19% 40% 54% 26% 22%
NET ASSETS, END OF YEAR (IN THOUSANDS) $14,992 $22,433 $28,167 $55,283 $21,698
<FN>
* The values shown for Near-Term Tax Free Fund prior periods
have been adjusted to reflect the 5-for-1 stock split, which
was effective on January 3, 2005.
(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.
</FN>
See accompanying notes to financial statements.
117
FINANCIAL HIGHLIGHTS
ALL AMERICAN EQUITY FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2006 2005 2004 2003 2002
NET ASSET VALUE, BEGINNING OF YEAR $24.47 $22.53 $19.15 $21.20 $25.44
- ---------------------------------------------------------------------------------------------------------------------
Investment Activities
Net investment loss (.18) (.02) (.11) (.03) (.03)
Net realized and unrealized gain (loss) 3.89 1.96 3.49 (2.02) (4.20)
------- ------- ------- ------- -------
Total from investment activities 3.71 1.94 3.38 (2.05) (4.23)
------- ------- ------- ------- -------
Distributions
From net investment income -- -- -- -- (.01)
From net realized gains (.59) -- -- -- --
------- ------- ------- ------- -------
Total distributions (.59) -- -- -- (.01)
Short-Term Trading Fees* (a) -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $27.59 $24.47 $22.53 $19.15 $21.20
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (b) 15.25% 8.61% 17.65% (9.67)% (16.62)%
Ratios to Average Net Assets (c):
Net investment loss (.67)% (.09)% (.49)% (.12)% (.12)%
Total expenses 2.20% 2.44% 2.31% 2.56% 2.19%
Expenses reimbursed or offset (.45)% (.69)% (.56)% (1.06)% (.73)%
Net expenses 1.75% 1.75% 1.75% 1.50% 1.46%
Portfolio turnover rate 369% 262% 96% 119% 75%
NET ASSETS, END OF YEAR (IN THOUSANDS) $21,547 $19,253 $19,974 $18,334 $20,713
CHINA REGION OPPORTUNITY FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2006 2005 2004 2003 2002
NET ASSET VALUE, BEGINNING OF YEAR $6.87 $5.86 $4.17 $4.38 $4.92
- ---------------------------------------------------------------------------------------------------------------------
Investment Activities
Net investment loss (.01)* (.06) --* (.02) (.04)
Net realized and unrealized gain (loss) 2.02 1.22 1.69 (.20) (.51)
------- ------- ------- ------- -------
Total from investment activities 2.01 1.16 1.69 (.22) (.55)
------- ------- ------- ------- -------
Distributions from net investment income (.19) (.16) (.05) -- --
Short-Term Trading Fees* .02 .01 .05 .01 .01
- ---------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $8.71 $6.87 $5.86 $4.17 $4.38
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (b) 30.03% 19.98% 41.63% (4.79)% (10.98)%
Ratios to Average Net Assets (c):
Net investment income (loss) (.08)% (.54)% .05% (.60)% (.83)%
Total expenses 2.31% 2.56% 2.25% 3.91% 3.54%
Expenses reimbursed or offset (.01)% --(d) --(d) --(d) --(d)
Net expenses 2.30% 2.56% 2.25% 3.91% 3.54%
Portfolio turnover rate 292% 136% 126% 44% 29%
NET ASSETS, END OF YEAR (IN THOUSANDS) $67,761 $30,511 $35,090 $12,815 $12,003
<FN>
* Based on average monthly shares outstanding.
(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 increase the net investment
loss ratio had such reductions not occurred.
(d) Ratio does not round to 0.01%.
</FN>
See accompanying notes to financial statements.
118
FINANCIAL HIGHLIGHTS
GLOBAL RESOURCES FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2006 2005 2004 2003 2002
NET ASSET VALUE, BEGINNING OF YEAR $12.67 $8.39 $5.14 $4.93 $4.01
- ---------------------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income (loss) .29 .25 .12 (.05) (.06)
Net realized and unrealized gain 5.63 4.67 3.26 .35 .98
---------- -------- -------- ------- -------
Total from investment activities 5.92 4.92 3.38 .30 .92
---------- -------- -------- ------- -------
Distributions
From net investment income (.32) (.34) (.13) (.09) --
From net realized gains (1.05) (.30) -- -- --
---------- -------- -------- ------- -------
Total distributions (1.37) (.64) (.13) (.09) --
Short-Term Trading Fees* (a) -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $17.22 $12.67 $8.39 $5.14 $4.93
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (b) 48.91% 60.21% 65.73% 6.43% 22.94%
Ratios to Average Net Assets (c):
Net investment income (loss) 1.07% .91% .74% (1.38)% (1.57)%
Total expenses .96% 1.30% 1.54% 3.75% 3.83%
Expenses reimbursed or offset (.01)% --(d) --(d) --(d) --(d)
Net expenses .95% 1.30% 1.54% 3.75% 3.83%
Portfolio turnover rate 157% 116% 140% 101% 96%
NET ASSETS, END OF YEAR (IN THOUSANDS) $1,281,664 $488,183 $135,574 $14,884 $14,900
WORLD PRECIOUS MINERALS FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2006 2005 2004 2003 2002
NET ASSET VALUE, BEGINNING OF YEAR $15.50 $13.68 $9.75 $10.43 $5.28
- ---------------------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income (loss) .72 (.22) (.17)* (.05) (.07)
Net realized and unrealized gain (loss) 13.62 2.42 5.85 (.52) 5.18
-------- -------- -------- -------- -------
Total from investment activities 14.34 2.20 5.68 (.57) 5.11
-------- -------- -------- -------- -------
Distributions
From net investment income (.67) (.46) (1.86) (.25) --
From net realized gains (.37) -- -- -- --
-------- -------- -------- -------- -------
Total distributions (1.04) (.46) (1.86) (.25) --
Short-Term Trading Fees* .06 .08 .11 .14 .04
- ---------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $28.86 $15.50 $13.68 $9.75 $10.43
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (b) 96.21% 16.50% 57.42% (4.02)% 97.54%
Ratios to Average Net Assets (c):
Net investment income (loss) .05% (1.01)% (1.15)% (1.36)% (1.32)%
Total expenses 1.13% 1.48% 1.47% 1.92% 2.27%
Expenses reimbursed or offset (d) -- -- -- -- --
Net expenses 1.13% 1.48% 1.47% 1.92% 2.27%
Portfolio turnover rate 66% 55% 65% 141% 104%
NET ASSETS, END OF YEAR (IN THOUSANDS) $920,249 $268,312 $246,852 $107,212 $97,044
<FN>
* Based on average monthly shares outstanding.
(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.
(d) Ratio does not round to 0.01%.
</FN>
See accompanying notes to financial statements.
119
FINANCIAL HIGHLIGHTS
GOLD SHARES FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2006 2005 2004 2003 2002
NET ASSET VALUE, BEGINNING OF YEAR $7.67 $7.00 $5.18 $5.28 $2.83
- ---------------------------------------------------------------------------------------------------------------------
Investment Activities
Net investment loss (.01)* (.11) (.10) (.10) (.06)
Net realized and unrealized gain 7.88 .79 1.91 (.02) 2.48
-------- ------- ------- ------- -------
Total from investment activities 7.87 .68 1.81 (.12) 2.42
-------- ------- ------- ------- -------
Distributions from net investment income (.12) (.05) (.03) -- --
Short-Term Trading Fees* .06 .04 .04 .02 .03
- ---------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $15.48 $7.67 $7.00 $5.18 $5.28
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (a) 104.15% 10.19% 35.57% (1.89)% 86.57%
Ratios to Average Net Assets (b):
Net investment loss (.06)% (1.13)% (1.45)% (1.98)% (1.99)%
Total expenses 1.47% 1.97% 1.93% 2.64% 3.57%
Expenses reimbursed or offset (c) -- -- -- -- --
Net expenses 1.47% 1.97% 1.93% 2.64% 3.57%
Portfolio turnover rate 78% 66% 85% 138% 164%
NET ASSETS, END OF YEAR (IN THOUSANDS) $208,027 $63,816 $66,732 $45,720 $52,911
<FN>
* Based on average monthly shares outstanding.
(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 increase the net investment
loss ratio had such reductions not occurred.
(c) Ratio does not round to 0.01%.
</FN>
See accompanying notes to financial statements.
120
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, 2006, and the related statements of operations for the
year then ended, and the statements of changes in net assets for each of
the two years in the period then ended and financial highlights for
each of the years in the five-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.
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, 2006, 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, 2006, and the results of
their operations, the changes in their net assets and financial
highlights for the periods described above, in conformity with U.S.
generally accepted accounting principles.
/s/ KPMG LLP
Boston, Massachusetts
August 22, 2006
121
TRUSTEES AND OFFICERS (UNAUDITED) June 30, 2006
The following table presents information about the Trustees as of
June 30, 2006, 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
is 72 years of age. 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
- ---------------------------------------------------------------------------------
Mr. J. Michael Belz (53) PRINCIPAL OCCUPATION: President and Chief
7900 Callaghan Road Executive Officer of Catholic Life Insurance
San Antonio, TX 78229 since 1984.
Trustee OTHER DIRECTORSHIPS HELD: Director of Broadway
November 2005 to present National Bank from October 2003 to present.
Thirteen portfolios
- ---------------------------------------------------------------------------------
James F. Gaertner (63) PRINCIPAL OCCUPATION: President of Sam Houston
7900 Callaghan Road State University from August 2001 to present.
San Antonio, TX 78229 OTHER DIRECTORSHIPS HELD: Chairman of the Board
Trustee of Directors of Tandy Brands Accessories, Inc.
November 2002 to present from October 1997 to present.
Nine portfolios
- ---------------------------------------------------------------------------------
Clark R. Mandigo (63) 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
Thirteen portfolios 1996 to January 2004.
- ---------------------------------------------------------------------------------
Walter W. McAllister III (64) OTHER DIRECTORSHIPS HELD: Director, Texas
7900 Callaghan Road Capital Banc Shares, Inc. from 1999 to present.
San Antonio, TX 78229
Trustee
1998 to present
Nine portfolios
- ---------------------------------------------------------------------------------
Willem C.J. van Rensburg (67) PRINCIPAL OCCUPATION: Retired. Professor of
7900 Callaghan Road Geological Science and Petroleum Engineering,
San Antonio, TX 78229 University of Texas at Austin from September
Trustee 1981 to May 2006.
1978 to present
Nine portfolios
- ---------------------------------------------------------------------------------
122
TRUSTEES AND OFFICERS (UNAUDITED) June 30, 2006
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 * (51) PRINCIPAL OCCUPATION: Director, Chief Executive
7900 Callaghan Road Officer, and Chief Investment Officer of the
San Antonio, TX 78229 Adviser. Since October 1989, Mr. Holmes has
Trustee, Chief Executive 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 OTHER DIRECTORSHIPS HELD: Chairman of the Board
Thirteen portfolios of Directors of Endeavour Mining Capital Corp.
from November 2005 to present. 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>
123
TRUSTEES AND OFFICERS (UNAUDITED) June 30, 2006
The following table presents information about each Officer of the
Trust as of June 30, 2006, 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 (51) Director, Chief Executive Officer, and Chief
7900 Callaghan Road Investment Officer of the Adviser. Since
San Antonio, TX 78229 October 1989, Mr. Holmes has served and
Trustee, Chief Executive continues to serve in various positions with
Officer, Chief Investment the Adviser, its subsidiaries, and the
Officer, President investment companies it sponsors.
1989 to present
- --------------------------------------------------------------------------------
Susan McGee (47) 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
- --------------------------------------------------------------------------------
Catherine Rademacher (46) Treasurer of the Trust and Chief Financial
7900 Callaghan Road Officer of the Adviser. Since April 2004, Ms.
San Antonio, TX 78229 Rademacher has served in various positions with
Treasurer the Adviser, its subsidiaries, and the
August 2004 to present investment companies it sponsors. Associate
with Resources Connection from July 2003 to
February 2004. Recruiting Manager with Robert
Half International from November 2002 to June
2003. Controller of Luby's Inc. from June 2000
to October 2002.
- --------------------------------------------------------------------------------
124
ADDITIONAL INFORMATION (UNAUDITED)
ADDITIONAL FEDERAL TAX INFORMATION
The percentage of tax-exempt dividends paid by the Funds for the
year ended June 30, 2006, was:
Near-Term Tax Free 89.58%
Tax Free 94.56%
The percentage of ordinary income dividends paid by the Funds
during the year ended June 30, 2006, which qualify for the
Dividends Received Deduction available to corporate shareholders
was:
Global Resources 1.59%
World Precious Minerals 0.73%
Gold Shares 13.57%
The Funds hereby designate the following approximate amounts as
capital gain dividends for the purpose of the dividends paid
deduction:
All American Equity $ 455,916
Global Resources 10,440,800
World Precious Minerals 5,460,908
The amounts which represent foreign source income and foreign taxes
paid during the year ended June 30, 2006 are as follows:
FOREIGN FOREIGN
SOURCE TAX
INCOME CREDIT
------- -------
China Region Opportunity $ 785,056 $ 23,633
Global Resources 12,602,619 1,707,076
World Precious Minerals 1,008,304 110,836
Gold Shares 195,231 19,469
In January 2007, the Funds will report on Form 1099-DIV the tax
status of all distributions made during the calendar year 2006. 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.
125
ADDITIONAL INFORMATION (UNAUDITED)
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 on
the SEC's website at www.sec.gov.
AVAILABILITY OF QUARTERLY PORTFOLIO SCHEDULES
The Funds provide complete lists of holdings four times in each
fiscal year, at the quarter-ends. For the second and fourth
quarters, the lists appear in the Funds' semi-annual and annual
reports to shareholders. For the first and third quarters, the Funds
file the lists with the SEC on Form N-Q. Shareholders can look up
the Funds' Forms N-Q on the SEC's website at www.sec.gov. You may
also visit or call the SEC's Public Room in Washington, D.C.
(1-202-942-8090) or send a request plus a duplicating fee to the
SEC, Public Reference Section, Washington, DC 20549-0102 or by
electronic request at the following e-mail address:
publicinfo@sec.gov.
APPROVAL OF THE ADVISORY AGREEMENT FOR EACH FUND
On February 13, 2006, the Board of Trustees, including all of the
Trustees who are not "interested persons" of the Trust (the
"Independent Trustees"), approved continuation of the advisory
agreement with the Adviser for each Fund for an additional one-year
term. In considering approval of the agreement, the Trustees
reviewed a variety of materials relating to each Fund and the
Adviser, including: (i) comparative performance, fee and expense
information versus a peer group of similar mutual funds provided by
Lipper Inc. (each, a "Peer Group"), performance information versus a
broader array of comparative mutual funds provided by Lipper Inc.
(each, a "Peer Universe") and performance information versus a
benchmark index (each, a "Fund Benchmark"), (ii) information
regarding the nature, extent and quality of the services provided by
the Adviser, (iii) the costs of services provided and estimated
profits realized by the Adviser and its affiliates, (iv) the extent
to which economies of scale are realized as the Funds grow, (v)
whether fee levels reflect any possible economies of scale for the
benefit of Fund shareholders, (vi) comparisons of services rendered
and amounts paid to other registered investment companies managed by
the Adviser and other accounts managed by the Adviser, and (vii)
benefits realized by the Adviser (and its affiliates) from its
relationship with the Funds.
The Independent Trustees began their process of reviewing
information and considering approval of the agreement in November
2005 and were represented by independent legal counsel throughout
the process. After a November 11, 2005 meeting, at the direction of
the Independent
126
ADDITIONAL INFORMATION (UNAUDITED)
Trustees, independent legal counsel requested additional information
from the Adviser to be provided to the Independent Trustees in advance
of their February 13, 2006 meeting. As a result, the Independent
Trustees received information from the Adviser describing the
foregoing information. In addition, the Independent Trustees received
materials from their independent legal counsel discussing the legal
standards applicable to their consideration of the agreement. After
their review of the information received, the Independent Trustees
presented their findings and recommendations to the full Board.
In considering the nature, extent and quality of the services
provided by the Adviser, the Board reviewed information relating to
the Adviser's operations and personnel. Among other things, the
Adviser provided biographical information on its professional staff
and descriptions of its organizational and management structure. In
the course of its deliberations the Board evaluated, among other
things, information relating to the investment philosophy,
strategies and techniques used in managing each Fund, the
qualifications and experience of the Adviser's investment personnel,
the Adviser's brokerage practices, including the extent to which the
Adviser obtains research through "soft dollar" arrangements with the
Funds' brokerage, and the financial and non-financial resources
available to provide services required under the advisory agreement.
In considering the reasonableness of the fee payable to the Adviser
for managing each Fund, the Board reviewed, among other things,
financial statements of the Adviser and an analysis of the
profitability to the Adviser and its affiliates of their
relationship with each Fund over various time periods, which
analysis identified revenues and other benefits received by the
Adviser and its affiliates from managing each Fund, the costs
associated with providing such services and the resulting
profitability to the Adviser and its affiliates from these
relationships on a Fund-by-Fund basis and as a group of Funds. The
Board also compared each Fund's management fee to the fees charged
by the Adviser to other registered investment companies and to other
clients managed by the Adviser. (However, the Board noted that those
other investment companies have different investment policies than
the Funds and that the Adviser does not manage other investment
companies similar to the Funds. The Board also noted that, although
certain clients may have investment objectives and policies that are
similar to some of the Funds, the contractual fees payable to the
Adviser for managing those client assets are the same or higher than
the management fees of the similar Funds.) The Board considered the
current and anticipated asset levels of each Fund and the historical
willingness of the Adviser to waive fees and pay expenses of the
Funds from time to time to limit the total expenses of the Funds.
The Board also considered that the management fee for all of the
Funds except for the Near-Term Tax Free Fund and the China Region
Opportunity Fund include a breakpoint. The Board also noted that the
Adviser did not believe, with respect to administration and
investment advisory services provided, that it was realizing
significant economies of scale and that the current fees represent
an appropriate sharing of economies of scale. The Board concluded
that the profitability to the Adviser and its affiliates from their
relationship with the Funds is not excessive and that the Adviser is
not realizing material benefits from economies of scale that would
warrant adjustments to the fees for any Fund at this time. The Board
concluded that, in light of the nature, extent and quality of the
services provided by the Adviser and the levels of profitability
associated with providing these services, the fees charged by the
Adviser under the Advisory Agreement to each Fund are reasonable.
127
ADDITIONAL INFORMATION (UNAUDITED)
In addition to the foregoing, the Board considered the specific
factors and reached the related conclusions set forth below with
respect to each Fund:
U.S. Government Securities Savings Fund
- ---------------------------------------
The Board noted that the U.S. Government Securities Saving Fund has
been among the top performing funds of its Peer Group and Peer
Universe and has substantially outperformed its Fund Benchmark for
the one, two, three, four, five and ten year periods ending August
31, 2005. Accordingly, the Board concluded that the Fund's
performance has been satisfactory. In determining that the fees
charged by the Adviser are reasonable, the Board also noted that,
over various time periods, the Adviser has waived fees and paid
expenses of the Fund and that the Fund's management fee and total
expenses, net of contractual waivers and expense reimbursements, are
below the median for its Peer Group.
U.S. Treasury Securities Cash Fund
- ----------------------------------
The Board noted that the U.S. Treasury Securities Cash Fund has
underperformed its Peer Group, Peer Universe and Fund Benchmark for
the one, two, three, four, five and ten year periods ending August
31, 2005. The Independent Trustees also requested and reviewed the
Fund's gross performance, which indicated that the Fund's
performance was competitive on a gross basis and that the Fund's net
relative underperformance is primarily attributable to the Fund's
high relative expenses. As a result, the Board concluded that the
Fund's performance has been consistent with reasonable expectations
in light of the nature, quality and extent of the services provided
to shareholders. In this regard, the Board noted that the Fund is
designed to be used by shareholders as a substitute for a
traditional checking account, that the Fund's high relative expenses
are explained, in part, by the unlimited free checkwriting and
related shareholder services offered by the Fund, and that the
Fund's relative underperformance is attributable primarily to high
expenses incurred by the Fund in making these services available to
shareholders. In determining that the fees charged by the Adviser
are reasonable, the Board noted that the Fund's management fee is
competitive with that of its Peer Group.
Tax Free Fund
- -------------
The Board noted that the Tax Free Fund has underperformed its Peer
Group, Peer Universe and Fund Benchmark for the one, two, three,
four, five and ten year periods ending August 31, 2005, although the
recent performance of the Fund has improved slightly over the past
year. The Board also noted the small size of the Fund and that the
Fund's performance was adversely affected by the Fund's conservative
risk profile. In light of the above, the Board concluded that
performance was satisfactory. In determining that the fees charged
by the Adviser are reasonable, the Board noted that while the Fund's
contractual management fee and total expenses are above the median
for its Peer Group, over various time periods, the Adviser has
waived fees and expenses of the Fund and the Fund's management fee,
net of contractual waivers, is below the median for its Peer Group.
128
ADDITIONAL INFORMATION (UNAUDITED)
Near-Term Tax Free Fund
- -----------------------
The Board noted that the Near-Term Tax Free Fund has performed at or
above the median of its Peer Group for the one, two and three-year
periods ending August 31, 2005, although the Fund has performed
slightly below its Fund Benchmark for these same time periods.
Accordingly, the Board concluded that the Fund's overall performance
has been satisfactory. In determining that the fees charged by the
Adviser are reasonable, the Board noted that the Fund is among the
smallest funds in its Peer Group, that over various time periods the
Adviser has waived fees and paid expenses of the Fund, and that the
Fund's management fee and total expenses, net of contractual waivers
and expense reimbursements, are below the median for its Peer Group.
All American Equity Fund
- ------------------------
The Board noted that the All American Equity Fund has performed well
relative to its Peer Group and Peer Universe for the one, two, three
and four year periods ending August 31, 2005. The All American
Equity Fund has also outperformed its Fund Benchmark for the one,
two and three year periods ending August 31, 2005. Accordingly, the
Board concluded that the overall performance of the Fund has been
satisfactory. In determining that the fees charged by the Adviser
are reasonable, the Board noted that, over various time periods, the
Adviser has waived fees and paid expenses of the Fund and that the
Fund's management fee, net of contractual waivers, is below the
median of the Peer Group. The Board also noted that total expenses
of the Fund are high due to the high non-management related expenses
relative to its Peer Group. The Board concluded that this is
consistent with reasonable expectations in light of the small size
of the Fund and the small average account size of the Fund relative
to its Peer Group.
China Region Opportunity Fund
- -----------------------------
The Board noted that the China Region Opportunity Fund has
outperformed its Peer Group and Peer Universe for the one, two,
three and four-year periods ending August 31, 2005. Accordingly, the
Board concluded that the overall performance of the Fund has been
satisfactory. In determining that the fees charged by the Adviser
are reasonable, the Board noted that, although the Fund's management
fee and total expenses are high compared to its Peer Group, such
fees and expenses are consistent with reasonable expectations in
light of the size of the Fund and the nature, quality and extent of
the services provided by the Adviser. In this regard, the Board
noted that the Adviser has committed substantial resources to
monitor frequent purchases and redemptions of shares of the Fund.
Global Resources Fund
- ---------------------
The Board noted that the Global Resources Fund has been among the
top performing funds in its Peer Group and Peer Universe for the
one, two, three, four and five-year periods ending August 31, 2005
and has substantially outperformed its Fund Benchmark for all such
periods. Accordingly, the Board concluded that the Fund's
performance has been satisfactory. In determining that the fees
charged by the Adviser are reasonable, the Board noted that the
Fund's management fee is close to the median for its Peer Group and
that the Fund's management fee and total expenses, net of
contractual waivers and expense reimbursements, are below the median
for its Peer Group. In
129
ADDITIONAL INFORMATION (UNAUDITED)
this regard, the Board noted that the Adviser has committed
substantial resources to monitor frequent purchases and redemptions of
shares of the Fund.
World Precious Minerals Fund
- ----------------------------
The Board noted that the World Precious Minerals Fund has been among
the top performing funds in its Peer Group and Peer Universe for the
one, two, three and four-year periods ending August 31, 2005 and has
substantially outperformed its Fund Benchmark for all such periods.
Accordingly, the Board concluded that the Fund's performance has been
satisfactory. In determining that the fees charged by the Adviser are
reasonable, the Board noted that although the Fund's management fee
and total expenses are slightly above the median for its Peer Group,
such fees are consistent with reasonable expectations in light of the
size of the Fund and the nature, quality and extent of the services
provided by the Adviser. In this regard, the Board noted that the
Adviser has committed substantial resources to monitor frequent
purchases and redemptions of shares of the Fund.
Gold Shares Fund
- ----------------
The Board noted that the Gold Shares Fund has outperformed its Peer
Group, Peer Universe and its Fund Benchmark for the one, two, three,
four and five-year periods ending August 31, 2005. Accordingly, the
Board concluded that the Fund's performance has been satisfactory.
In determining that the fees charged by the Adviser are reasonable,
the Board noted that the Fund's management fee is below the median
for its Peer Group. In addition, the Board noted that the Adviser
has committed substantial resources to monitor frequent purchases
and redemptions of shares of the Fund. The Board also noted that the
Fund's total expenses are among the highest of its Peer Group, with
a large portion of expenses devoted to non-management expenses. The
Board concluded that such expenses are consistent with reasonable
expectations in light of the small size of the Fund and the small
average account size of the Fund relative to its Peer Group. In this
regard, the Board noted that the Adviser has committed substantial
resources to monitor frequent purchases and redemptions of shares of
the Fund.
* * * * * *
Based on all of the above-mentioned factors and related conclusions,
with no single factor or conclusion being determinative and with
each Trustee not necessarily attributing the same weight to each
factor, the Board of Trustees, including the Independent Trustees,
concluded that approval of the advisory agreement would be in the
interests of each Fund. Accordingly, on February 13, 2006, the Board
of Trustees, including the Independent Trustees, voted to approve
continuation of the advisory agreement with respect to each Fund.
130
ITEM 2. CODE OF ETHICS.
(a) The registrant has adopted a code of ethics that applies to its principal
executive officer and principal financial officer.
(b) During the period covered by this report, no material amendments were made
to the provisions of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, no implicit or explicit waivers
to the provisions of the code of ethics adopted in 2(a) above were granted.
(d) Not applicable.
(e) Not applicable.
(f) The registrant has posted such code of ethics on its Internet website at
www.usfunds.com.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Trustees has determined that the registrant has at
least three "audit committee financial experts" serving on its audit committee:
Dr. James F. Gaertner, Mr. Clark R. Mandigo, and Mr. Walter W. McAllister, III
are "independent" (as defined in Item 3 of Form N-CSR.)
An "audit committee financial expert" is not an "expert" for any purpose,
including for purposes of Section 11 of the Securities Act of 1933, as a result
of being designated as an "audit committee financial expert." Further, the
designation of a person as an "audit committee financial expert" does not mean
that the person has any greater duties, obligations, or liability than those
imposed on the person without the "audit committee financial expert"
designation. Similarly, the designation of a person as an "audit committee
financial expert" does not affect the duties, obligations, or liability of any
other member of the audit committee or Board of Trustees.
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 $171,000 and $163,000 for the fiscal years ended June 30, 2006, and 2005,
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 $-0- and $36,052 for the fiscal years ended June 30, 2006,
and 2005, 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
$28,000 and $26,700 for the fiscal years ended June 30, 2006, and 2005,
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, 2006, and 2005
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 $91,000 and
$80,799 for the fiscal years ended June 30, 2006, and 2005, 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. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 11. 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 quarter of the
period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant's internal control
over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of ethics is posted on registrant's Internet website at
www.usfunds.com.
(a)(2) Certifications of principal executive officer and principal financial
officer pursuant to Rule 30a-2(a) under the Investment Company Act of
1940(17CFR 270.30a-2(a)), and Section 302 of the Sarbanes-Oxley Act of
2002.
(b) Certifications of principal executive officer and principal financial
officer pursuant to Rule 30a-2(b) under the Investment Company Act of
1940 (17CFR 270.30a-2(b)) and Section 906 of the Sarbanes-Oxley Act of
2002.
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: August 29, 2006
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: August 29, 2006
By: /s/Catherine A. Rademacher
----------------------------------
Catherine A. Rademacher
Chief Financial Officer
Date: August 29, 2006