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 811-04010
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OCM Mutual Fund
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(Exact name of registrant as specified in charter)
1536 Holmes Street
Livermore, California 94550
(Address of principal executive offices) (Zip code)
Gregory M. Orrell
Orrell Capital Management, Inc
1536 Holmes Street
Livermore, California 94550
(Name and address of agent for service)
Registrant's telephone number, including area code: (925) 455-0802
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Date of fiscal year end: November 30
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Date of reporting period: November 30, 2008
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ITEM 1. REPORT TO STOCKHOLDERS.
[LOGO]
OCM GOLD FUND
ANNUAL REPORT
NOVEMBER 30, 2008
Dear Fellow Shareholder:
The upheaval in the global financial markets over the past year is a
generational event with a profound impact on the future price of gold, in our
opinion. While gold briefly rose above $1,000/oz in March at the time of the
Bear Stearns rescue, gold prices did not sustain levels that would appear to be
commensurate with the stress in the global financial system as deleveraging by
hedge funds and others led to a rush for liquidity to sell paper gold contracts
and gold shares. This is not to say there was not demand for gold, quite the
contrary. Robust investor demand for refined gold products of coins and bars has
led to a scarcity of product, high premiums, and refineries working over time to
meet demand. The discrepancy in high demand for physical metal and the failure
of gold prices to move higher versus the dollar may seem puzzling but the amount
of physical gold outstanding is a fraction of the amount of gold represented by
paper gold contracts traded on commodity exchanges and over the counter. It
would not seem inconceivable to us that at some point there will be a call on
the paper contracts as investors decide to own physical gold rather than a
derivative. The failure of gold and gold shares to move higher, while
disappointing, is similar to previous liquidity crunches, such as the 1930's,
where all asset classes declined before gold buying became a factor. In our
opinion, the rush to own short-term U.S. Treasuries is part of the process of
elimination that will ultimately lead gold to being the asset of choice as
investors take heed to the inherent risks of owning U.S. government liabilities.
The gold price traded in a range of $713/oz to $1,023/oz in 2008 (London),
closing the year at $865/oz, up 3.50% from the prior year-end London close.
While gold was one of the few asset classes to post a gain for the year, gold
shares suffered under the tsunami of asset liquidation with your Fund closing
the calendar year down 26.56% (-29.87% after max sales load) compared to a
27.75% decline in the Philadelphia Gold & Silver Share Index ("XAU"). For the
fiscal period covered in this report ending November 30, 2008, your Fund
declined 38.55% (-41.30% after max. sales load) versus a 39.97% drop in the XAU.
Although your Fund slightly outpaced the XAU, your Fund's performance was
adversely impacted by its holdings in small cap exploration and development
companies which suffered significantly larger declines than the major producers.
MARKET COMMENTARY
In our opinion, years of excess credit creation led to the financial market
turmoil in 2008. Aggressive investment and consumption patterns are now being
exposed on a global basis. The resulting credit unwinding process has thus far
claimed an impressive list of casualties, among them: AIG, the world's largest
insurance company; the collapse of the Big 3 auto makers; the loss of investment
banks: Bear Stearns, Lehman Brothers, and Merrill Lynch; the nationalization of
Freddie Mac and Fannie Mae; the bankruptcy of Iceland. The powerful deflationary
forces unleashed by global deleveraging have been met by a policy response of
massive money creation in the U.S. and abroad. The Federal Reserve's balance
sheet has expanded from $900 billion to $2.3 trillion since mid September. As of
this writing, the U.S. Treasury is into the second tranche of $700 billion of
TARP funds being used to stabilize banking institutions. The new Obama
Administration is finalizing plans for an $825 billion stimulus package to help
arrest the downward economic spiral. Projected U.S. Federal budget deficits of
$1 trillion are apparently of little concern.
Safe haven buying of short-term U.S. government securities has driven interest
rates on short dated Treasuries to zero, illustrating the extent investors are
willing to "hide out" in Treasuries in order to preserve capital. This could be
termed a "shoot first, ask questions later" investment approach. The knee jerk
reaction historically in liquidity crises has been to rush to U.S. Treasuries
because the U.S. has been the world's reserve currency. The irony is in order to
preserve capital investors have rushed to U.S. government securities at a time
when the creditworthiness of the U.S. is being compromised by its aggressive
fiscal and monetary policies.
- 2 -
Additionally, investors should take note of past writings of Federal Reserve
Chairman Bernanke's understanding of unconventional monetary policy to solve
deflationary death spirals like that experienced during the Great Depression.
While a Fed Governor, he famously remarked in 2002 on the subject of deflation,
"Like gold, U.S. dollars have value only to the extent that they are strictly
limited in supply. But the U.S. government has a technology, called a printing
press (or, today, its electronic equivalent), that allows it to produce as many
U.S. dollars as it wishes at essentially no cost. By increasing the number of
U.S. dollars in circulation, or even by credibly threatening to do so, the U.S.
government can also reduce the value of a dollar in terms of goods and services,
which is equivalent to raising the prices in dollars of those goods and
services. We conclude that, under a paper-money system, a determined government
can always generate higher spending and hence positive inflation." The expansion
of the Federal Reserve's balance sheet confirms Bernanke has resorted to the
printing press in order to combat deflationary forces and to devalue the dollar.
In order for Bernanke's monetary policy to succeed in arresting the downward
economic spiral, expectation of currency debasement by the financial markets
must become widespread, where a dollar today will be worth less tomorrow. This
thinking will release the fearful hoarding of dollars and increase the turnover
or velocity of the money supply. A rising gold price, in our opinion, will
signal the policy's success. If we look back at the Great Depression, it wasn't
until President Roosevelt devalued the dollar 75% in 1933 by marking gold up
from $20.67/oz to $35 that economic conditions stabilized. Our expectation is
for the dollar to experience a similar devaluation versus gold in the current
crisis.
U.S. MONEY SUPPLY M-1
[The following table was represented as a line chart in the printed material.]
DATE VALUE
1984-02-15 180.455
1985-02-13 191.190
1986-02-12 206.707
1987-02-11 230.683
1988-02-10 246.664
1989-02-08 261.558
1990-02-07 273.232
1991-02-20 307.066
1992-02-19 331.441
1993-02-17 367.905
1994-02-16 409.372
1995-02-15 434.473
1996-02-14 451.081
1997-02-12 478.756
1998-02-11 509.090
1999-02-10 547.147
2000-02-09 600.054
2001-02-07 614.828
2002-02-20 679.327
2003-02-19 725.537
2004-02-18 759.612
2005-02-16 794.719
2006-02-15 826.558
2007-02-14 840.719
2008-02-13 850.213
2009-01-14 1773.924
Source: St. Louis Federal Reserve
- 3 -
Presently rapid money creation is being offset by asset depreciation and
write-offs. Further monetary and fiscal stimulus seems likely at historically
high rates and may even accelerate if economic conditions continue to
deteriorate. So far the Federal Reserve has created more new money over the past
three months than it has in the past 40 years combined. Therefore, we believe
the seeds for an inflation of historic proportions have been sown once economic
conditions stabilize.
Lessons from Germany in the 1920's may not be entirely analogous but it
underscores the fact that all paper currencies historically end up worthless.
The root of Germany's inflation problems began with the issuance of significant
money into the system, similar to what is currently taking place in the U.S. An
illustration of what happened to the price of gold in German Marks as the fiat
currency became worthless is below.
ONE OUNCE OF GOLD IN
GERMAN MARKETS
--------------------
January 1919 170
September 1919 499
January 1920 1,340
September 1920 1,201
January 1921 1,349
September 1921 2,175
January 1922 3,976
September 1922 30,381
January 1923 372,477
September 1923 269,439,000
Oct 2, 1923 6,631,749,000
Oct 9, 1923 24,868,950,000
Oct 16, 1923 84,969,072,000
Oct 23, 1923 1,160,552,882,000
Oct 30, 1923 1,347,070,000,000
Nov 5, 1923 8,700,000,000,000
Nov 30, 1923 87,000,000,000,000
Source: CIBC World Markets
-4 -
INVESTMENT STRATEGY
The liquidation of hedge fund positions in gold shares last year sent the gold
shares trading to their lowest relative value versus gold in over 25 years as
measured by the Gold/XAU ratio (see chart). Meanwhile, the fundamentals for the
gold miners improved dramatically over the past six months with the decline in
local currencies, fuel prices, and other consumables helping to set the stage
for increased operating margins similar to what Homestake Mining and other gold
miners experienced in the 30's (note: Homestake's share price increased from $70
in 1930 to over $500 in 1935). Companies needing financing, especially junior
gold produces and exploration and development companies, have seen their share
prices suffer disproportionally as the market steers clear of companies that
need to access the capital markets. This has led to an opportunity for mining
companies with cash to purchase assets at distressed prices in order to replace
reserves and grow production on a per share basis.
Your Fund's investment approach is to own major gold producers,
intermediate/mid-tier gold producers, junior gold producers, and exploration and
development companies. With historically low valuations for the gold producers
versus the gold price, we have concentrated on companies with strong reserve
bases and clean balance sheets in the current environment. Additionally, we have
refocused the allocation to exploration and development companies to those with
known gold resources and cash in the bank. For the most part, we are shying away
from grass roots exploration companies unless the situation is compelling.
GOLD / XAU RATIO
[The following table was represented as a line chart in the printed material.]
Dec-83 3.473884 388.03 111.7
Dec-84 4.208005 319.56 75.94
Dec-85 3.947606 321.61 81.47
Dec-86 5.066718 390.80 77.13
Dec-87 4.508502 486.74 107.96
Dec-88 4.781149 418.92 87.62
Dec-89 3.427554 409.25 119.4
Dec-90 3.923633 377.69 96.26
Dec-91 4.570024 361.08 79.01
Dec-92 4.78227 334.81 70.01
Dec-93 2.88615 383.63 132.92
Dec-94 3.506823 379.26 108.15
Dec-95 3.178635 387.35 121.86
Dec-96 3.157172 368.95 116.86
Dec-97 3.892508 288.59 74.14
Dec-98 4.51236 291.68 64.64
Dec-99 4.175666 283.07 67.79
Dec-00 5.286271 271.45 51.35
Dec-01 5.070718 275.85 54.4
Dec-02 4.357042 331.92 76.18
Dec-03 3.729875 406.11 108.88
Dec-04 4.51654 442.08 97.88
Dec-05 3.894764 510.10 130.97
Dec-06 4.401527 629.42 143
Dec-07 4.63315 803.20 173.36
Dec-08 8.514618 865.00 101.59
Source: Bloomberg
- 5 -
CONCLUSION
It is our belief a commitment to owning gold and gold shares as a vital
component of capital preservation is more important than ever. Gold's monetary
attributes are in the process of becoming more widely appreciated by a new
generation as owned assets (gold) are preferred over someone else's liabilities
(debt and fiat currencies). With policy makers taking lessons from the 30's, the
willingness of investors to own U.S. government securities as a safe haven in a
period of rapid money creation is limited, in our view. Timing when gold and
gold shares will reflect the ongoing currency debasement is obviously difficult;
however, we do believe the bulk of the panic hedge fund selling that affected
all market values has abated.
We appreciate your shareholding and confidence in the OCM Gold Fund and we look
forward to meeting the investment objective of preserving your purchasing power.
Should you have any questions regarding the Fund or gold, please contact your
financial adviser or you may contact us directly at 1-800-779-4681. For question
regarding your account, please contact Shareholder Service at 1-800-628-9403.
Sincerely,
/s/ Gregory M. Orrell
Gregory M. Orrell
Portfolio Manager
January 23, 2009
- 6 -
OCM GOLD FUND
Schedule of Investments - November 30, 2008
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS 87.2%
MAJOR GOLD PRODUCERS 45.7%
175,000 AngloGold Ashanti Ltd. ADR ........................ $ 3,736,250
75,000 Barrick Gold Corp. ................................ 2,209,500
10,000 Freeport-McMoRan Copper & Gold, Inc. .............. 239,900
270,000 Gold Fields Ltd. ADR .............................. 2,219,400
585,050 Goldcorp, Inc. .................................... 15,778,799
100,000 Harmony Gold Mining Co., Ltd. ADR* ................ 864,000
430,680 Kinross Gold Corp. ................................ 6,352,530
32,200 Lihir Gold Ltd. ADR* .............................. 488,474
107,333 Lihir Gold Ltd.* .................................. 153,772
116,500 Newmont Mining Corp. .............................. 3,920,225
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35,962,850
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INTERMEDIATE/MID-TIER GOLD PRODUCERS 27.3%
161,860 Agnico-Eagle Mines Ltd. ........................... 6,095,648
650,000 Centerra Gold, Inc.* .............................. 1,319,691
430,000 Eldorado Gold Corp.* .............................. 2,451,000
504,800 IAMGOLD Corp. ..................................... 2,372,560
500,000 OZ Minerals Ltd. .................................. 179,083
140,000 Randgold Resources Ltd. ADR ....................... 5,352,200
634,750 Yamana Gold, Inc. ................................. 3,687,898
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21,458,080
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JUNIOR GOLD PRODUCERS 5.2%
250,000 Aurizon Mines Ltd.* ............................... 562,500
400,000 Capstone Mining Corp.* ............................ 325,491
291,200 Claude Resources, Inc.* ........................... 76,249
50,000 Jaguar Mining, Inc.* .............................. 128,908
300,000 Red Back Mining, Inc.* ............................ 1,508,218
665,500 San Gold Corp.* ................................... 568,345
283,333 Sino Gold Mining Ltd.* ............................ 667,925
200,000 Western Goldfields, Inc.* ......................... 272,000
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4,109,636
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EXPLORATION AND DEVELOPMENT COMPANIES 3.6%
375,000 Amazon Mining Holding PLC* ........................ 39,276
187,500 Anatolia Minerals Development Ltd.* ............... 158,617
58,200 Aquiline Resources, Inc.* ......................... 67,053
400,000 Argentex Mining Corp.* ............................ 68,000
218,000 B2Gold Corp.* ..................................... 72,011
700,000 Brazauro Resources Corp.* ......................... 90,235
126,707 DOT Resources Ltd.* ............................... 1,531
500,000 Evolving Gold Corp.* .............................. 92,652
215,600 Geologix Explorations, Inc.* ...................... 60,796
829,500 Grayd Resource Corp.* ............................. 233,907
250,000 Great Basin Gold Ltd* ............................. 215,000
100,000 Guyana Goldfields, Inc.* .......................... 80,567
300,000 MAG Silver Corp.* ................................. 1,428,456
120,000 Pediment Exploration Ltd.* ........................ 49,307
200,000 Radius Gold, Inc.* ................................ 9,668
300,000 Sabina Silver Corp.* .............................. 106,349
144,500 Sinchao Metals Corp.* ............................. 11,933
192,307 Volta Resources, Inc.* ............................ 10,845
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2,796,203
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OTHER 3.8%
206,812 Altius Minerals Corp.* ............................ 684,819
229,200 International Royalty Corp. ....................... 271,450
50,000 Royal Gold, Inc. .................................. 2,000,000
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2,956,269
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PRIMARY SILVER PRODUCERS 1.6%
225,000 Fortuna Silver Mines, Inc.* ....................... 114,204
48,075 Pan American Silver Corp.* ........................ 680,742
100,000 Silver Wheaton Corp.* ............................. 348,050
359,997 Silverstone Resources Corp.* ...................... 133,418
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1,276,414
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TOTAL COMMON STOCKS
(Cost $36,528,054) ................................ 68,559,452
------------
See notes to financial statements.
- 7 -
OCM GOLD FUND
Schedule of Investments - November 30, 2008 (Continued)
Shares Value
- --------------------------------------------------------------------------------
EXCHANGE TRADED FUNDS 7.8%
90,000 iShares Silver Trust* ............................. $ 920,700
65,000 SPDR Gold Trust* .................................. 5,212,350
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TOTAL EXCHANGE TRADED FUNDS
(Cost $3,931,360) ................................. 6,133,050
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WARRANTS 0.1%
187,500 Amazon Mining Holding PLC *+# ..................... --
Exercise Price 1.55 CAD, Exp. 11/16/2009
200,000 Argentex Mining Corp. *+# ......................... --
Exercise Price $1.60, Exp. 9/19/2009
200,000 Golden Predator Mines, Inc.*+# .................... --
Excercise Price 3.35 CAD, Exp. 8/14/2011
143,750 Majestic Gold Corp.*+# ............................ --
Exercise Price 0.60 CAD, Exp. 5/3/2009
35,000 Nevsun Resources *+# .............................. --
Exercise Price 10.00 CAD, Exp. 12/18/2008
60,000 Pediment Exploration Ltd.*+# ...................... --
Exercise Price 3.75 CAD, Exp. 11/16/2009
150,000 San Gold Corp.*+# ................................. --
Exercise Price 2.00 CAD, Exp. 05/28/2009
250,000 Silver Wheaton Corp.* ............................. 78,553
Exercise Price 4.00 CAD, Exp. 8/5/2009
100,000 Yukon-Nevada Gold Corp.* .......................... 5,237
Exercise Price 3.00 CAD, Exp. 6/20/2012 ------------
TOTAL WARRANTS
(Cost $37,563) .................................... 83,790
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SHORT-TERM INVESTMENT 2.7%
2,171,089 UMB Money Market Fiduciary, 0.49% ................. $ 2,171,089
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $2,171,089) ................................. 2,171,089
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TOTAL INVESTMENTS
(Cost $42,668,066) ........................ 97.8% 76,947,381
OTHER ASSETS LESS LIABILITIES .......................... 2.2% 1,705,069
------------
TOTAL NET ASSETS ....................................... 100.0% $ 78,652,450
============
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ADR - American Depository Receipts.
CAD - Canadian Dollars.
* Non-income producing security.
+ Illiquid security. Security is valued at fair value in accordance with
procedures established by the Fund's Board of Trustees.
# Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended, or otherwise restricted. These securities may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. The securities are valued at fair value in
accordance with procedures established by the Fund's Board of Trustees.
See notes to financial statements.
- 8 -
OCM GOLD FUND
Schedule of Investments - November 30, 2008 (Continued)
SUMMARY OF INVESTMENTS BY COUNTRY
PERCENT OF
COUNTRY MARKET VALUE INVESTMENT SECURITIES
- --------------------------------------------------------------------------------
Australia $ 847,008 1.1%
Canada 48,714,736 63.3
Jersey 5,352,200 6.9
New Guinea 642,246 0.8
South Africa 6,819,650 8.9
United Kingdom 39,277 0.1
United States (1) 14,532,264 18.9
- --------------------------------------------------------------------------------
TOTAL $76,947,381 100.0%
- --------------------------------------------------------------------------------
(1) Includes short-term securities.
See notes to financial statements.
- 9 -
OCM GOLD FUND
Statement of Assets and Liabilities - November 30, 2008
ASSETS:
Investments in unaffiliated issuers, at value (cost $42,668,066) ................... $ 76,947,381
Receivable for investments sold .................................................... 2,069,877
Interest and dividends receivable .................................................. 19,188
Receivable for fund shares sold .................................................... 23,224
Prepaid expenses and other assets .................................................. 16,437
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Total assets ..................................................................... 79,076,107
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LIABILITIES:
Payable for securities purchased ................................................... 67,178
Payable for fund shares redeemed ................................................... 46,379
Due to investment adviser .......................................................... 57,607
Accrued distribution fees .......................................................... 179,377
Accrued trustees' fees ............................................................. 2,000
Accrued expenses and other liabilities ............................................. 71,116
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Total liabilities ................................................................ 423,657
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Net Assets ....................................................................... $ 78,652,450
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NET ASSETS CONSIST OF:
Shares of beneficial interest, no par value; unlimited shares authorized ........... $ 44,364,820
Accumulated net investment loss .................................................... (30,164)
Undistributed net realized gain on investments and foreign currency transactions ... 38,971
Net unrealized appreciation on investments and foreign currency translations ....... 34,278,823
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Net Assets ....................................................................... $ 78,652,450
============
CALCULATION OF MAXIMUM OFFERING PRICE:
Net asset value and redemption price per share ..................................... $ 12.35
Maximum sales charge (4.50% of offering price) ..................................... 0.58
------------
Offering price to public ........................................................... $ 12.93
------------
Shares outstanding ................................................................. 6,370,666
============
See notes to financial statements.
- 10 -
OCM GOLD FUND
Statement of Operations - Year Ended November 30, 2008
INVESTMENT INCOME:
Interest ............................................................. $ 31,172
Dividends (net of foreign withholding taxes of $46,503) .............. 478,996
------------
Total investment income ............................................ 510,168
------------
EXPENSES:
Investment advisory fees ............................................. 1,058,325
Distribution fees .................................................... 1,057,144
Fund administration and accounting fees .............................. 149,244
Transfer agent fees and expenses ..................................... 68,027
Professional fees .................................................... 56,201
Custody fees ......................................................... 24,690
Federal and state registration fees .................................. 24,216
Reports to shareholders .............................................. 15,309
Chief Compliance Officer fees ........................................ 12,543
Trustees' fees ....................................................... 8,004
Other expenses ....................................................... 7,485
------------
Total expenses ..................................................... 2,481,188
------------
Net investment loss ................................................ (1,971,020)
------------
REALIZED AND UNREALIZED GAIN/LOSS ON INVESTMENTS:
Net realized gain on investments and foreign currency transactions ... 1,699,108
Net change in unrealized appreciation/depreciation on investments
and foreign currency translations .................................. (52,315,767)
------------
Net loss on investments ............................................ (50,616,659)
------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ................... $(52,587,679)
============
See notes to financial statements.
- 11 -
OCM GOLD FUND
Statements of Changes in Net Assets
YEAR ENDED YEAR ENDED
NOV. 30, NOV. 30,
2008 2007
------------- -------------
OPERATIONS:
Net investment loss .................................................. $ (1,971,020) $ (1,813,932)
Net realized gain on investments and foreign currency transactions ... 1,699,108 8,400,525
Net change in unrealized appreciation/depreciation on investments
and foreign currency translations .................................. (52,315,767) 11,847,045
------------- -------------
Net increase/(decrease) in net assets resulting from operations ...... (52,587,679) 18,433,638
------------- -------------
DISTRIBUTIONS PAID TO SHAREHOLDERS:
Distributions paid from net realized gains ........................... (8,998,120) (10,048,572)
------------- -------------
Total distributions .................................................. (8,998,120) (10,048,572)
------------- -------------
FUND SHARE TRANSACTIONS:
Net proceeds from shares sold ........................................ 18,015,280 14,220,807
Distributions reinvested. ............................................ 8,489,751 8,876,117
Payment for shares redeemed(1) ....................................... (22,507,872) (14,997,190)
------------- -------------
Net increase in net assets from fund share transactions .............. 3,997,159 8,099,734
------------- -------------
TOTAL INCREASE/(DECREASE) IN NET ASSETS ................................ (57,588,640) 16,484,800
NET ASSETS, BEGINNING OF YEAR .......................................... 136,241,090 119,756,290
------------- -------------
NET ASSETS, END OF YEAR ................................................ $ 78,652,450 $ 136,241,090
============= =============
UNDISTRIBUTED NET INVESTMENT LOSS ...................................... $ (4,130,255) $ (2,159,235)
============= =============
TRANSACTIONS IN SHARES:
Shares sold .......................................................... 1,004,491 727,987
Shares issued on reinvestment of distributions ....................... 415,350 510,122
Shares redeemed ...................................................... (1,387,479) (758,285)
------------- -------------
Net increase in shares outstanding ................................... 32,362 479,824
============= =============
- ----------
(1) Net of redemption fees of $16,193 and $2,617 for the year ended November
30, 2008, and year ended November 30, 2007, respectively.
See notes to financial statements.
- 12 -
OCM GOLD FUND
Notes to Financial Statements - November 30, 2008
NOTE 1. ORGANIZATION
OCM Mutual Fund (the "Trust") is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company. The Trust
was organized as a Massachusetts business trust on January 6, 1984 and consists
of the OCM Gold Fund (the "Fund"). The investment objective for the Fund is
long-term growth of capital through investing primarily in equity securities of
domestic and foreign companies engaged in activities related to gold and
precious metals.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements.
Security Valuation - Portfolio securities that are listed on national
securities exchanges are valued at the last sale price as of the close of
business of such securities exchanges, or, in the absence of recorded sales, at
the average of readily available closing bid and ask prices on such exchanges.
NASDAQ National Market(R) and SmallCap(R) securities are valued at the NASDAQ
Official Closing Price ("NOCP"). If a NOCP is not issued for a given day, these
securities are valued at the average of readily available closing bid and asked
prices. Unlisted securities are valued at the average of the quoted bid and ask
prices in the over-the-counter market. Short-term investments which mature in
less than 60 days are valued at amortized cost (unless the Board of Trustees
determines that this method does not represent fair value). Short-term
investments which mature after 60 days are valued at market. Securities and
other assets for which market quotations are not readily available are valued at
fair value as determined in good faith by the investment adviser under
procedures established by and under the general supervision and responsibility
of the Trust's Board of Trustees. For each investment that is fair valued, the
investment adviser considers, to the extent applicable, various factors
including, but not limited to, the type of security, the financial condition of
the company, comparable companies in the public market, the nature and duration
of the cause for a quotation not being readily available and other relevant
factors. In September 2006, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 157, "Fair Value Measurements"
("FAS 157") effective for fiscal years beginning after November 15, 2007. FAS
157 defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles (GAAP), and expands disclosures about
fair value measurements. The Fund adopted FAS 157 during fiscal 2008. Under FAS
157, various inputs are used in determining the value of the Fund's investments.
These inputs are summarized into three broad levels and described below:
o Level 1 - quoted prices in active markets for identical securities
o Level 2 - other significant observable inputs (including quoted
prices for similar securities, interest rates, and evaluated
quotation obtained from pricing services.)
o Level 3 - significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments.)
The inputs or methodology used for valuing securities are not an
indication of the risk associated with investing in those securities. The
following is a summary of the inputs used, as of November 30, 2008, in valuing
the Fund's assets:
VALUATION INPUTS INVESTMENT IN SECURITIES
- --------------------------------------------------------------------------------
Level 1 - Quoted Prices $76,947,381
Level 2 - Other Significant Observable Inputs --
Level 3 - Significant Unobservable Inputs --
Total $76,947,381
Foreign Currency - Investment securities and other assets and liabilities
denominated in foreign currencies are translated into U.S. dollar amounts at the
date of valuation. Purchases and sales of investment securities denominated in
foreign currencies are translated into U.S. dollar amounts on the respective
dates of such transactions. The Fund does not isolate that portion of the
results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations for the year ended November 30, 2008 are
included within the realized and unrealized gain/loss on investments section of
the Statement of Operations.
- 13 -
OCM GOLD FUND
Notes to Financial Statements - November 30, 2008 (Continued)
Reported net realized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
fair value of assets and liabilities, other than investments in securities at
fiscal year end, resulting from changes in exchange rates. Such fluctuations for
the year ended November 30, 2008 are included within the realized and unrealized
gain/loss on investments section of the Statement of Operations.
Federal Income Taxes - The Fund complies with the requirements of the
Internal Revenue Code necessary to qualify as a regulated investment company and
to make the requisite distributions of income to its shareholders which will be
sufficient to relieve it from all or substantially all federal income taxes.
In July 2006, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48").
FIN 48 addresses the accounting for uncertainty in income taxes and establishes
for all entities, including pass-through entities, a minimum threshold for
financial statement recognition of the benefit of positions taken in filing tax
returns (including whether an entity is taxable in a particular jurisdiction).
The Fund recognizes tax benefits only if it is more likely than not that a tax
position (including the Fund's assertion that its income is exempt from tax)
will be sustained upon examination. The Fund adopted FIN 48 in fiscal 2008. The
Fund had no material uncertain tax positions and has not recorded a liability
for unrecognized tax benefits as of November 30, 2008. Also, the Fund had
recognized no interest and penalties related to uncertain tax benefits in 2008.
At November 30, 2008, the fiscal years 2005 through 2008 remain open to
examination in the Fund's major tax jurisdictions.
Securities Transactions and Investment Income - Securities transactions
are accounted for on a trade date basis. Realized gains and losses on sales of
securities are calculated on the identified cost basis. Dividend income is
recorded on the ex-dividend date and interest income is recorded on an accrual
basis.
Distributions to Shareholders - Distributions to shareholders are recorded
on the ex-dividend date. The Fund declares and pays dividends of net investment
income, if any, annually and distributes net realized gains, if any, annually.
The character of distributions made during the year from net investment income
or net realized gains may differ from the characterization for federal income
tax purposes due to differences in the recognition of income, expense or gain
items for financial statement and tax purposes. To the extent that these
differences are attributable to permanent book and tax accounting differences,
the components of net assets have been adjusted.
Redemption Fee - A 1.50% redemption fee is retained by the Fund to offset
transaction costs and other expenses associated with short-term investing. The
fee is imposed on redemptions or exchanges of shares held less than three months
from their purchase date. The Fund records the fee as a reduction of shares
redeemed and as a credit to paid-in-capital. For the year ended November 30,
2008, the Fund received $16,193 in redemption fees.
Guarantees and Indemnifications - In the normal course of business, the
Fund enters into contracts with service providers that contain general
indemnification clauses. The Fund's maximum exposure under these arrangements is
unknown as this would involve future claims against the Fund that have not yet
occurred. Based on experience, the Fund expects the risk of loss to be remote.
Use of Estimates - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
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
increases and decreases in net assets from operations during the reporting
period. Actual results could differ from those estimates.
New Accounting Pronouncements - In March 2008, the FASB issued Statement
of Financial Accounting Standards No. 161, "Disclosures about Derivative
Instruments and Hedging Activities." The Statement is effective for fiscal years
and interim periods beginning after November 15, 2008 and may require enhanced
disclosures about the Fund's derivative and hedging activities. Management is
currently evaluating the impact the adoption of the Statement may have on the
Fund's financial statement disclosures.
- 14 -
OCM GOLD FUND
Notes to Financial Statements - November 30, 2008 (Continued)
NOTE 3. INVESTMENT ADVISORY AGREEMENT
The Fund has an investment advisory agreement with Orrell Capital
Management, Inc. ("OCM"). Under the agreement, the Fund pays OCM a fee computed
daily and payable monthly, at the following annual rates based upon average
daily net assets:
ASSETS FEE RATE
------------------------------------------------------------
$0 to $50 million ................................ 1.000%
$50 million to $75 million ....................... 0.875%
$75 million to $100 million ...................... 0.750%
$100 million to $150 million ..................... 0.625%
$150 million to $250 million ..................... 0.500%
Over $250 million ................................ 0.375%
NOTE 4. DISTRIBUTION AGREEMENT AND PLAN
The Trust has adopted a Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended. The Plan authorizes
the Fund to reimburse the distributor for marketing expenses incurred in
distributing shares of each Fund, including the cost of printing sales material
and making payments to dealers of the Fund's shares, in any fiscal year, subject
to a limit of 0.99% of average daily net assets. Fees incurred by the Fund under
the Plan during the year ended November 30, 2008 are reflected in the Statement
of Operations. At November 30, 2008, $179,377 of Distributions Fees were
available for eligible 12b-1 expenses.
NOTE 5. PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities (excluding short-term
securities and U.S. government obligations) for the year ended November 30, 2008
were $6,576,898 and $13,743,496, respectively. There were no purchases or sales
of U.S. government obligations.
NOTE 6. FEDERAL INCOME TAX INFORMATION
At November 30, 2008, gross unrealized appreciation and depreciation of
investments owned by the Fund, based on cost for federal income tax purposes
were as follows:
Cost of investments ......................... $42,662,114
===========
Unrealized appreciation ..................... $42,874,084
Unrealized depreciation ..................... (8,588,817)
-----------
Net unrealized appreciation on investments .. $34,285,267
===========
The difference between cost amounts for financial statement and federal
income tax purposes is due primarily to investments in passive foreign
investment companies ("PFICs").
The tax character of distributions paid during the fiscal years ended
November 30, 2008 and 2007 was as follows:
2008 2007
---------- -----------
Ordinary income .............. $ -- $ --
Net long-term capital gains .. 8,998,120 10,048,572
---------- -----------
Total distributions .......... $8,998,120 $10,048,572
========== ===========
- 15 -
OCM GOLD FUND
Notes to Financial Statements - November 30, 2008 (Continued)
As of November 30, 2008 the components of accumulated earnings on a tax basis
were as follows:
Undistributed ordinary income ................... $ --
Undistributed long-term gains ................... 2,363
------------
Tax accumulated earnings ........................ 2,363
Accumulated capital and other losses ............ --
Unrealized appreciation on investments .......... 34,285,267
------------
Total accumulated earnings ...................... $ 34,287,630
============
On the Statement of Assets and Liabilities, the following adjustments were
made for permanent tax adjustments:
Accumulated net investment loss ................. $ 4,100,091
Undistributed net realized gain on investments .. (316,486)
Shares of beneficial interest ................... (3,783,605)
These adjustments are due primarily to the net investment loss and the tax
treatment of PFICs and grantor trusts.
NOTE 7. CONCENTRATION OF RISK
Investing in foreign securities involves certain risks not necessarily
found in U.S. markets. These include risks associated with adverse changes in
economic, political, regulatory and other conditions, changes in currency
exchange rates, exchange control regulations, expropriation of assets or
nationalization, imposition of withholding taxes on dividend or interest
payments or capital gains, and possible difficulty in obtaining and enforcing
judgments against foreign entities. Further, issuers of foreign securities are
subject to different, and often less comprehensive, accounting, reporting, and
disclosure requirements than domestic issuers.
As the Fund concentrates its investments in the gold mining industry, a
development adversely affecting the industry (for example, changes in the mining
laws which increases production costs or a significant decrease in the market
price of gold) would have a greater adverse effect on the Fund than it would if
the Fund invested in a number of different industries.
- 16 -
OCM GOLD FUND
Financial Highlights
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
2008 2007 2006 2005 2004
-------- -------- -------- -------- --------
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout each year)
Net asset value, beginning of year .................... $ 21.49 $ 20.44 $ 12.85 $ 12.76 $ 14.46
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ................................... (0.31) (0.27) (0.29) (0.18) (0.18)
Net realized and unrealized gain /
(loss) on investments and foreign
currency transactions ............................... (7.41) 3.06 7.88 0.69 (1.30)
-------- -------- -------- -------- --------
Total from investment operations ...................... (7.72) 2.79 7.59 0.51 (1.48)
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Dividends from net investment income .................. -- -- -- (0.11) (0.01)
Distribution from net realized gains .................. (1.42) (1.74) -- (0.31) (0.21)
-------- -------- -------- -------- --------
Total distributions ................................... (1.42) (1.74) -- (0.42) (0.22)
-------- -------- -------- -------- --------
Net asset value, end of year .......................... $ 12.35 $ 21.49 $ 20.44 $ 12.85 $ 12.76
======== ======== ======== ======== ========
TOTAL RETURN* ......................................... (38.55)% 15.64% 59.07% 4.34% (10.31)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) .................... $ 78,652 $136,241 $119,756 $ 78,528 $ 80,202
Ratio of expenses to average net assets:
Net of waivers and reimbursements ................... 1.99% 1.93% 2.07% 2.24% 2.15%
Before waivers and reimbursements ................... 1.99% 1.93% 2.07% 2.24% 2.17%
Ratio of net investment loss to average net assets:
Net of waivers and reimbursements ................... (1.58)% (1.51)% (1.64)% (1.51)% (1.58)%
Before waivers and reimbursements ................... (1.58)% (1.51)% (1.64)% (1.51)% (1.60)%
Portfolio turnover rate ............................... 5% 11% 20% 5% 12%
- ----------
* Assumes no sales charge.
See notes to financial statements.
- 17 -
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees of OCM Gold Fund:
We have audited the accompanying statements of assets and liabilities of OCM
Gold Fund (the "Fund"), including the schedule of investments, as of November
30, 2008, and the related statement of operations, the statements of changes,
and the financial highlights for each of the periods indicated therein. These
financial statements are the responsibility of the Funds management. Our
responsibility is to express an opinion on these financial statements 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 are free of material misstatement. The Fund is not required to have,
nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. Our procedures included confirmation of securities owned as of
November 30, 2008, by correspondence with the custodian and brokers. 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 the
Fund as of November 30, 2008, the results of its operations, the changes in its
net assets, and the financial highlights for each of the indicated periods, in
conformity with accounting principles generally accepted in the United States of
America.
/s/ Deloitte & Touche LLP
January 27, 2009
Milwaukee, Wisconsin
- 18 -
OCM GOLD FUND
Expense Example - For the Period Ended November 30, 2008 (Unaudited)
As a shareholder of the OCM Gold Fund (the "Fund"), you incur two types of
costs: (1) transaction costs, including sales charges (loads) on purchase
payments and redemption fees on certain redemptions; and (2) ongoing costs,
including management fees; distribution (12b-1) fees; and other Fund expenses.
This Example is intended to help you understand your ongoing costs (in dollars)
of investing in the Fund and to compare these costs with the ongoing costs 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 from June 1, 2008 to November 30,
2008 (the "period").
ACTUAL EXPENSES
The first line of the table below 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 equals 8.6), then multiply the result by the
number in the first line under the heading entitled "Expenses Paid During the
Period" to estimate the expenses you paid on your account during the period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below 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% 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 the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% 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 transactional costs, such as
sales charges (loads) and redemption fees. Therefore, the second line of the
table is useful in comparing the ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs could have been higher.
EXPENSES PAID DURING THE PERIOD
EXPENSES PAID
BEGINNING ENDING DURING THE
ACCOUNT VALUE ACCOUNT VALUE PERIOD ENDED
JUNE 1, 2008 NOVEMBER 30, 2008 NOVEMBER 30, 2008*
------------ ----------------- ------------------
Actual $1,000.00 $ 585.60 $8.20
Hypothetical (5% return
before expenses) 1,000.00 1,014.66 10.41
- ----------
* Expenses are equal to the Fund's annualized expense ratio of 2.07% for the
period, multiplied by the average account value over the period,
multiplied by 183/366 (to reflect the one-half year period).
- 19 -
OCM GOLD FUND
Investments by Sector - November 30, 2008 (Unaudited)
As a Percentage of Net Assets
[The following table was represented as a pie chart in the printed material.]
Major Gold Producers 45.7%
Intermediate/Mid-Tier Gold Producers 27.3%
Junior Gold Producers 5.2%
Exploration and Development Companies 3.6%
Other 3.8%
Exchange Traded Funds 7.8%
Primary Silver Producers 1.7%
Cash and Other Assets 4.9%
Net Assets 100.0%
A description of the Fund's proxy voting policies and procedures and a
record of the Fund's proxy votes for the year ended June 30, 2008 are available
without charge, upon request by calling toll free 1-800-779-4681 and on the
Securities and Exchange Commission's (SEC) website at http://www.sec.gov.
The Fund will file its complete schedule of investments with the SEC for
the first and third quarters of each fiscal year on Form N-Q. The Fund's Forms
N-Q will be available on the EDGAR database on the SEC's website at
http://www.sec.gov. These Forms may also be reviewed and copied at the SEC's
Public Reference Room in Washington, D.C. Information about the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330.
- 20 -
OCM GOLD FUND
Performance Results - Year Ended November 30, 2008 (Unaudited)
(All performance measurements reflect the maximum sales
load charges for each period shown.)
The graph below compares the change in value of a $10,000 investment in
OCM Gold Fund with the S&P 500 Index and the Philadelphia Gold and Silver Index
since 11/30/98.
OCM GOLD FUND
AVERAGE ANNUAL TOTAL RETURNS
----------------------------
1 year (41.30)%
5 year 0.21%
10 year 11.37%
VALUE ON 11/30/08
-----------------
OCM Gold Fund $29,359
S&P 500(R) Index $ 9,105
Philadelphia Gold
& Silver Index $16,585
[The following table was represented as a line chart in the printed material.]
Philadelphia
OCM Gold S&P 500 Gold & Silver
11/30/98 9,559 10,000 10,000
11/30/99 9,117 12,090 9,621
11/30/00 6,756 11,579 6,919
11/30/01 9,040 10,164 7,847
11/30/02 14,453 8,486 9,618
11/30/03 27,754 9,766 16,915
11/30/04 24,892 11,022 16,646
11/30/05 25,971 11,952 18,099
11/30/06 41,312 13,653 23,844
11/30/07 47,774 14,708 27,630
11/30/08 29,359 9,105 16,585
The returns shown include the reinvestment of all dividends and the
maximum sales load charge, but do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
Past performance is not indicative of future results.
The Philadelphia Gold and Silver Index (XAU) is an unmanaged
capitilization-weighted index composed of 16 companies listed on U.S. exchanges
involved in the gold and silver mining industry. The index is generally
considered as representative of the gold and silver share market.
The S&P 500(R) Index is a broad unmanaged index generally considered as
representative of the U.S. equity market.
- 21 -
OCM GOLD FUND
Annual Renewal of Investment Advisory Agreement (Unaudited)
On October 16, 2008, the Board of Trustees of OCM Mutual Fund approved the
continuation of the Fund's investment advisory agreement with Orrell Capital
Management, Inc. (the "Adviser"). Prior to approving the continuation of the
agreement, the Board considered:
o the nature, extent and quality of the services provided by the
Adviser
o the investment performance of the Fund
o the costs of the services to be provided and profits to be realized
by the Adviser from its relationship with the Fund
o the extent to which economies of scale would be realized as the Fund
grows and whether fee levels reflect those economies of scale
o the expense ratio of the Fund
In considering the nature, extent and quality of the services provided by
the Adviser, the Board considered an oral presentation by the Adviser describing
the portfolio management, shareholder communication, and regulatory compliance
services provided by the Adviser to the Fund. The Trustees concluded that the
Adviser was providing essential services to the Fund.
The Trustees compared the performance of the Fund to benchmark indices
over various periods of time and concluded that the performance of the Fund
warranted the continuation of the Investment Advisory Agreement. The Trustees
noted that the Fund adhered to its investment style.
In concluding that the advisory fees payable by the Fund were reasonable,
the Trustees reviewed the profits realized by the Adviser, from its relationship
with the Fund and concluded that such profits were reasonable and not excessive.
As part of its analysis, the Board considered the value the research the Adviser
received from broker-dealers executing securities transactions for the Fund. The
Trustees also reviewed reports comparing the expense ratio and advisory fees
paid by the Fund to those paid by other comparable mutual funds in the same
category and concluded that the advisory fees paid by the Fund and the expense
ratio of the Fund were in the range of comparable mutual funds.
The Trustees also considered whether the Investment Advisory Agreement fee
schedule should be adjusted for an increase in assets under management. They
concluded that the "breakpoints" embodied in the Investment Advisory Agreement
were appropriate.
LONG TERM CAPITAL GAINS DESIGNATION (UNAUDITED)
Pursuant to IRC 852(b)(3) of the Internal Revenue Code OCM Gold Fund
hereby designates $9,048,120 as long-term capital gains distributed during the
year ended November 30, 2008.
- 22 -
OCM GOLD FUND
TRUSTEE AND OFFICER INFORMATION (UNAUDITED)
INDEPENDENT TRUSTEES*
- ----------------------------------------------------------------------------------------------------------------------------------
OTHER
DIRECTORSHIPS
HELD BY
TERM OF OFFICE TRUSTEE OR
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATION(S) NOMINEE FOR
NAME, ADDRESS AND AGE HELD WITH FUND SERVICE DURING PAST 5 YEARS TRUSTEE
- ----------------------------------------------------------------------------------------------------------------------------------
JOHN L. CRARY Trustee Indefinite Since 1999 Mr. Crary has been the Scheid Vineyards, Inc.
1536 Holmes Street, (Chairman of Since 2004 managing member of Crary Enterprises,
Livermore, California 94550 the Board) LLC, a private investment company. Since
Age 55 1988 Mr. Crary has been an independent
corporate financial advisor and private
investor in various biotechnology,
software and other early stage business
ventures. Mr. Crary began his business
career as an investment banker with E.F.
Hutton & Company Inc.
DOUG WEBENBAUER Trustee Indefinite Chief Financial Officer of M.E. Fox & None
1536 Holmes Street, Since 2005 Company, Inc., a beer distributor, since
Livermore, California 94550 1999.
Age 48
INTERESTED TRUSTEES AND OFFICERS**
- ----------------------------------------------------------------------------------------------------------------------------------
OTHER
DIRECTORSHIPS
HELD BY
TERM OF OFFICE TRUSTEE OR
POSITION(S) AND LENGTH OF PRINCIPAL OCCUPATION(S) NOMINEE FOR
NAME, ADDRESS AND AGE HELD WITH FUND SERVICE DURING PAST 5 YEARS TRUSTEE
- ----------------------------------------------------------------------------------------------------------------------------------
GREGORY M. ORRELL Trustee, Indefinite President of Orrell Capital Management, None
1536 Holmes Street, President Since 2004 Inc. since 1991.
Livermore, California 94550
Age 47
JACKLYN A. ORRELL*** Secretary and One year term Secretary of Orrell Capital Management, N/A
1536 Holmes Street, Treasurer Since 2004 Inc. since 1999.
Livermore, California 94550
Age 74
N. LYNN BOWLEY Chief At discretion Compliance Officer of Northern Lights N/A
1536 Holmes Street, Compliance of the Board Compliance Services, LLC (01/07 -
Livermore, California 94550 Officer Since October present); Vice President of Investment
Age 50 2008 Support Services for Mutual of Omaha
Companies (2002 - 2006).
- ----------
* "Independent" trustees are trustees who are not deemed to be "interested
persons" of the Fund as defined in the Investment Company Act of 1940.
** An "interested" trustee is a trustee who is deemed to be an "interested
person" of the Fund, as defined in the Investment Company Act of 1940.
Gregory M. Orrell is an interested person of the Fund because of his
ownership in the Fund's investment adviser.
*** Ms. Orrell is the mother of Gregory M. Orrell, the President and a trustee
of the Trust.
- 23 -
OCM Gold Fund
Distributed by:
Syndicated Capital, Inc.
1299 Ocean Avenue, Suite 210
Santa Monica, CA 90401
ITEM 2. CODE OF ETHICS.
The registrant, as of the end of the period covered by this report, has adopted
a code of ethics that applies to the Registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions, regardless of whether these individuals
are employed by the Registrant or a third party. A copy of this code of ethics
is attached hereto as Exhibit (a)
There have been no amendments to the Registrant's Code of Ethics during the
reporting period for this Form N-CSR. There have also been no waivers granted by
the Registrant to individuals covered by the Registrant's Code of Ethics during
the reporting period for this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Registrant's board of trustees has determined that Mr. Doug Webenbauer is an
audit committee financial expert serving on its audit committee and that Mr.
Webenbauer is independent.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The aggregate fees billed for each of the last two fiscal years for professional
services rendered by the principal accountant for the audit of the Registrant's
annual financial statements or services that are normally provided by the
accountant in connection with statutory and regulatory filings or engagements
are listed below.
Fiscal year ended Fiscal year ended
November 30, 2008 November 30, 2007
d Fees $0 $0
Tax Fees
Audit-Related Fees $0 $0
Tax Fees $4,050 $3,860
All Other Fees $0 $0
The Registrant's audit committee has adopted an Audit Committee Charter that
requires that the Audit Committee review the scope and plan of the registered
public accounting firm's annual and interim examinations, approve the services
(other than the annual audit) to be performed for the Registrant by the
independent public accountants and approve the fees and other compensation
payable to the independent accountants. During the fiscal years ended November
30, 2008 and 2007, all of the audit and non-audit services provided by the
Registrant's principal accountant were pre-approved by the audit committee.
(f) None.
(g) None.
(h) Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
The schedules of investments in securities in unaffiliated issuers are included
as part of the reports to shareholders filed under Item 1.
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. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
As of the end of the period covered by this report, the registrant had not
adopted any procedures by which shareholders may recommend nominees to the
registrant's Board of Directors.
ITEM 11. CONTROLS AND PROCEDURES.
The registrant's certifying officers have concluded that the registrant's
disclosure controls and procedures (as defined in Rule 30a-2 under the
Investment Company Act of 1940 (the "Act")) are effective in design and
operation and are sufficient to form the basis of the certifications required by
Rule 30a-2 under the Act, based on their evaluation of these disclosure controls
and procedures within 90 days of the filing date of this report on Form N-CSR.
ITEM 12. EXHIBITS.
(a)(1) Code of Ethics - Filed as an attachment to this filing.
(a)(2) Certification for each principal executive and principal financial
officer of the registrant as required by Rule 30a-2 under the Act (17 CFR
270.30a-2(a)) - Filed as an attachment to this filing.
(b) Certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) - Filed as an attachment to this filing.
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.
OCM Mutual Fund
By: /s/ Gregory M. Orrell
---------------------
Gregory M. Orrell
President
Date: February 5, 2009
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/ Gregory M. Orrell
---------------------
Gregory M. Orrell
President
Date: February 5, 2009
By: /s/ Jacklyn Orrell
------------------
Jacklyn Orrell
Secretary and Treasurer
Date: February 5, 2009