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
OCM Mutual Fund
(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
Date of fiscal year end: November 30
Date of reporting period: May 31, 2011
ITEM 1. REPORT TO STOCKHOLDERS.
--------------------
OCM GOLD FUND
====================
SEMI-ANNUAL REPORT
MAY 31, 2011
(UNAUDITED)
Dear Fellow Shareholder:
Through May 31, 2011, the first six months of the 2011 fiscal year, the OCM Gold
Fund Investor Class declined 1.51% (-5.95% after maximum sales load) and the
Advisor Class declined 1.26% compared to -1.18% for the Philadelphia Stock
Exchange Gold/Silver Index (XAU)(1) and 15.03% for the S&P 500(2). Your Fund's
investment strategy of owning a select portfolio of major, intermediate and
junior gold producers has enabled it to outperform the XAU over time, though
this strategy caused a slight underperformance to the XAU for the six months
ending May 31, 2011. Performance numbers for longer time periods and the periods
ending June 30, 2011 are presented in the table below.
MARKET COMMENTARY
In the face of market skepticism, gold prices advanced over $1,500 per ounce in
the first half of 2011 on the back of central bank gold purchases and safe haven
buying related to social unrest in the Middle East and North Africa. Investors
exhibited their apprehension by trimming a net 31 tons of gold bullion from the
SPDR Gold Trust exchange traded fund during the period. Mexico was the largest
confirmed central bank buyer with 93 tons purchased in February and March with
other purchases in the first half announced by Russia, Thailand and Bolivia. The
move by central banks to diversify dollar holdings into gold underscores, in our
opinion, the growing unease over the prospects of both the U.S. dollar and the
euro as a store of value. Chinese central bank monetary policy committee member,
Xia Bin, recently urged China to accelerate U.S. dollar diversification of its
$3.2 trillion in foreign exchange reserves in order to hedge against what he
sees as growing long-term U.S. dollar risk. Interestingly, it was Bin who in
December 2010 recommended China increase its gold holdings from its current
1,052 tons to 8,000 tons.
We believe the risk facing U.S. dollar holders is obvious with U.S. indebtedness
exploding exponentially as illustrated in the chart below. Some corners of the
market have come to the conclusion that further monetary debasement is the only
means available to the U.S. to meet its mounting liabilities. The Federal
Reserve has given no indication to think otherwise. Federal Reserve Chairman Ben
Bernanke confessed to Congress in early July the hurdle for a third round of
quantitative easing (QE = money printing) is quite low as the U.S. economy fails
to gain traction. "Deflationary risks might re-emerge, implying a need for
additional policy support," he said. With the ink barely dry from the end of
QE2, it is clear to us that the flood gates have opened to endless rounds of QE
to pay for government expenditures. At some point we believe the market will say
no more by raising U.S. borrowing costs to untenable levels and thereby forcing
a restructuring of the U.S. dollar. The political brinksmanship in Washington is
unlikely to lead to a credible fiscal plan as the issues have grown beyond the
ability of policymakers, in our opinion. Therefore, we believe the market will
ultimately supply the discipline the politicians lack.
1
FEDERAL GOVERNMENT: TOTAL PUBLIC DEBT
chart omitted
03/31/1966 320,999
03/31/1969 359,546
03/31/1972 427,344
03/31/1975 509,659
03/31/1978 737,951
03/31/1984 1,463,741
03/31/1987 2,246,724
03/31/1990 3,051,958
03/31/1993 4,230,580
03/31/1996 5,117,786
03/31/1999 5,651,615
03/31/2002 6,006,032
03/31/2005 7,776,939
03/31/2008 9,437,594
03/31/2011 14,270,114
SOURCE: FEDERAL RESERVE BANK OF SAINT LOUIS
On the other side of the Atlantic, the eurozone debt crisis has moved from the
periphery of Greece, Ireland and Portugal to engulf Europe's third and fourth
largest economies, Spain and Italy. Italy's finance minister is calling for
fiscal union where the debts of member countries become the liability of the
entire eurozone. With the German electorate already up in arms over subsidizing
the Greek bailout, it is unlikely Germany has the political capacity to be
persuaded to go along with such a plan. Moreover, allowing member nations to
borrow off the balance sheet of Germany would open the door for further
undisciplined borrowing. The options however appear limited. With the future of
the euro at stake, we believe the European Central Bank (ECB) is faced with no
choice but to enact multiple rounds of quantitative easing to purchase the debt
of its most indebted members. There may be no end in sight if the ECB goes down
this path, but what choice does it have? The European Union (EU) establishment
is unlikely to let European unity die easily and if monetary debasement is the
answer, so be it.
With both the dollar and the euro coming unglued at the same time, the lack of a
credible alternative is driving diversification into gold and punctuating gold's
most important monetary attribute - gold is not someone else's liability.
Furthermore, gold is the one monetary asset with enough market depth to handle
the flow of funds seeking a safe haven. The Canadian and Australian dollar
markets are too small and the same can be said of the Korean won and Swiss
franc. The Japanese yen is far from safe with its high debt levels to GDP and
need to rebuild after the earthquake. The emerging Asian currencies also offer
little refuge with their histories as arch-inflators. Therefore, gold's monetary
characteristics will become increasingly appreciated by a wider audience as the
dollar and euro become discredited with each round of quantitative easing, in
our opinion.
2
SHARES OF GOLD MINING COMPANIES
Despite gold bullion performing well over the first half of 2011, shares of gold
mining companies put in a disappointing performance overall. A number of factors
can be pointed to as reasons for the sell-off in shares of gold mining companies
that occurred between May 1, 2011 and June 30, 2011. The first would be the
anticipation of the end of QE2 on June 30, 2011 and the market believing gold
bullion would sell off after QE2 ended. Another factor was the $7 billion
acquisition of a copper company by the world's largest gold producer, Barrick
Gold Corp. The market began to question if Barrick's move signaled there was
little growth left in the gold mining industry with the result being gold mining
companies should trade at cash flow multiples closer to base metal producing
companies. Both factors acted as short-term catalysts for traders and resulted
in negative market momentum forcing share prices to historically low cash flow
multiples and price to net asset values. With the second half of the year
historically the strongest over the past ten years for gold shares, we believe
share prices of gold mining companies overall will reach new highs as the market
realizes gold bullion prices will sustain higher levels.
CONCLUSION
The U.S. dollar and more recently the euro have been the twin pillars of
international finance. However, economic history has shown that monetary systems
ultimately fall prey to the will of politicians' need to appease the electorate
in order to maintain power. In our opinion, the currencies of the western world
are in the process of being cast aside by the market as realization takes root
that monetary debasement is the order of the day. We believe through the process
of elimination, gold is emerging as the currency of choice. For those not
positioned in gold it is not too late, in our opinion.
We appreciate your shareholding and confidence in the OCM Gold Fund and we look
forward to assisting you in meeting your investment objectives. 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 questions regarding your
account, please contact Shareholder Services at 1-800-628-9403.
Sincerely,
/s/ GREGORY M. ORRELL
----------------------
Gregory M. Orrell
President and Portfolio Manager
JULY 21, 2011
INVESTING IN THE OCM GOLD FUND INVOLVES RISKS INCLUDING THE LOSS OF PRINCIPAL.
MANY OF THE COMPANIES IN WHICH THE FUND INVESTS ARE SMALLER CAPITALIZATION
COMPANIES WHICH MAY SUBJECT THE FUND TO GREATER RISK THAN SECURITIES OF LARGER,
MORE-ESTABLISHED COMPANIES, AS THEY OFTEN HAVE LIMITED PRODUCT LINES, MARKETS OR
FINANCIAL RESOURCES AND MAY BE SUBJECT TO MORE-ABRUPT MARKET MOVEMENTS. THE FUND
ALSO INVESTS IN SECURITIES OF GOLD AND PRECIOUS METALS WHICH MAY BE SUBJECT TO
GREATER PRICE FLUCTUATIONS OVER SHORT PERIODS OF TIME. THE FUND IS A
NON-DIVERSIFIED INVESTMENT COMPANY MEANING IT WILL INVEST IN FEWER SECURITIES
THAN DIVERSIFIED INVESTMENT COMPANIES AND ITS PERFORMANCE MAY BE MORE VOLATILE.
THE FUND CONTAINS INTERNATIONAL SECURITIES THAT MAY PROVIDE THE OPPORTUNITY FOR
GREATER RETURN BUT ALSO HAVE SPECIAL RISKS ASSOCIATED WITH FOREIGN INVESTING
INCLUDING FLUCTUATIONS IN CURRENCY, GOVERNMENT REGULATION, DIFFERENCES IN
ACCOUNTING STANDARDS AND LIQUIDITY.
3
Investor Class Performance as of May 31, 2011
------------------------------------------------------------------------------------------
OCMGX OCMGX Philadelphia
(without load) (with load) Gold Index (XAU) S&P 500
------------------------------------------------------------------------------------------
Six Months (-1.51%) (-5.95%) (-1.18%) 15.03%
One Year 21.09% 15.65% 21.60% 25.95%
3 Year Annualized 13.51% 11.79% 5.81% 0.91%
5 Year Annualized 13.88% 12.84% 9.03% 3.32%
10 Year Annualized 23.96% 23.39% 15.20% 2.64%
------------------------------------------------------------------------------------------
Advisor Class Performance as of May 31, 2011
------------------------------------------------------------------------------------------
Philadelphia Gold
OCMAX Index (XAU) S&P 500
------------------------------------------------------------------------------------------
Six Months (-1.26%) (-1.18%) 15.03%
One Year 21.74% 21.60% 25.95%
Since Inception Annualized* 30.20% 23.70% 15.00%
------------------------------------------------------------------------------------------
Investor Class Performance as of June 30, 2011
------------------------------------------------------------------------------------------
OCMGX OCMGX Philadelphia Gold
(without load) (with load) Index (XAU) S&P 500
------------------------------------------------------------------------------------------
Six Months (-9.57%) (-13.63%) (-10.57%) 6.02%
One Year 12.37% 7.30% 14.74% 30.69%
3 Year Annualized 9.80% 8.13% 1.99% 3.34%
5 Year Annualized 13.15% 12.11% 8.05% 2.94%
10 Year Annualized 23.14% 22.58% 15.59% 2.72%
------------------------------------------------------------------------------------------
Advisor Class Performance as of June 30, 2011
------------------------------------------------------------------------------------------
Philadelphia Gold
OCMAX Index (XAU) S&P 500
------------------------------------------------------------------------------------------
Six Months (-9.36%) (-10.57%) 6.02%
One Year 12.92% 14.74% 30.69%
Since Inception Annualized* 22.66% 18.46% 12.43%
------------------------------------------------------------------------------------------
* INCEPTION: APRIL 1, 2010
THE PERFORMANCE DATA QUOTED ABOVE REPRESENTS PAST PERFORMANCE. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED ABOVE. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE FUND'S TOTAL
ANNUAL OPERATING EXPENSES FOR THE OCM GOLD FUND INVESTOR CLASS AND ADVISOR CLASS
ARE 1.93% AND 1.34% RESPECTIVELY. PLEASE REVIEW THE FUND'S PROSPECTUS FOR MORE
INFORMATION REGARDING THE FUND'S FEES AND EXPENSES. FOR PERFORMANCE INFORMATION
CURRENT TO THE MOST RECENT MONTH-END, PLEASE CALL TOLL-FREE 800-628-9403. THE
RETURNS SHOWN INCLUDE THE REINVESTMENT OF ALL DIVIDENDS BUT DO NOT REFLECT THE
DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE
REDEMPTION OF FUND SHARES.
--------
(1) The Philadelphia Gold and Silver Index (XAU) is an unmanaged
capitalization-weighted index composed of 16 companies 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.
(2) The S&P 500 Index, a registered trademark of McGraw-Hill Co., Inc. is a
market capitalization-weighted index of 500 held common stocks. You cannot
invest directly in an index.
4
OCM GOLD FUND
SCHEDULE OF INVESTMENTS - MAY 31, 2011
(UNAUDITED)
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS 94.3%
MAJOR GOLD PRODUCERS 32.3%
225,000 AngloGold Ashanti Ltd. ADR .................... $10,341,000
75,000 Barrick Gold Corp ............................. 3,582,000
270,000 Gold Fields Ltd. ADR .......................... 4,438,800
500,050 Goldcorp, Inc ................................. 25,037,503
700,000 Kinross Gold Corp ............................. 11,004,000
116,500 Newmont Mining Corp ........................... 6,590,405
-----------
60,993,708
-----------
INTERMEDIATE/MID-TIER GOLD PRODUCERS 31.2%
161,860 Agnico-Eagle Mines Ltd ........................ 10,472,342
500,000 Centerra Gold, Inc ............................ 9,186,148
550,000 Eldorado Gold Corp ............................ 8,739,500
504,800 IAMGOLD Corp .................................. 10,626,040
250,000 Northgate Minerals Corp.* ..................... 732,828
140,000 Randgold Resources Ltd. ADR ................... 11,474,400
600,000 Yamana Gold, Inc .............................. 7,710,000
-----------
58,941,258
-----------
JUNIOR GOLD PRODUCERS 9.7%
250,000 Alacer Gold Corp.* ............................ 2,407,493
227,000 Argonaut Gold Ltd.* ........................... 1,185,550
250,000 Aurizon Mines Ltd.* ........................... 1,447,500
291,200 Claude Resources, Inc.* ....................... 640,198
305,500 Dundee Precious Metals, Inc.* ................. 2,651,861
281,011 Kingsgate Consolidated Ltd .................... 2,352,385
200,000 New Gold, Inc.* ............................... 2,020,000
500,000 Petaquilla Minerals Ltd.* ..................... 356,092
184,000 Primero Mining Corp.* ......................... 820,437
610,000 San Gold Corp.* ............................... 1,958,095
200,000 SEMAFO, Inc.* ................................. 1,748,465
255,000 Wesdome Gold Mines Ltd ........................ 689,580
-----------
18,277,656
-----------
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
EXPLORATION AND DEVELOPMENT COMPANIES 11.7%
500,000 Amarillo Gold Corp.*+# ........................ $ 650,255
240,000 Andina Minerals, Inc.* ........................ 299,737
400,000 Argentex Mining Corp.* ........................ 476,000
2,190,000 Avala Resources Ltd.* ......................... 2,780,306
500,000 B2Gold Corp.* ................................. 1,604,996
331,725 Colt Resources, Inc.* ......................... 201,689
191,200 Edgewater Exploration Ltd.* ................... 175,639
500,000 Evolving Gold Corp.* .......................... 376,735
63,500 Goldstone Resources, Inc.* .................... 50,467
829,500 Grayd Resource Corp.* ......................... 1,558,229
250,000 Great Basin Gold Ltd.* ........................ 515,000
3,500,000 Indochine Mining Ltd.* ........................ 915,594
300,000 MAG Silver Corp.* ............................. 3,037,622
700,000 Millrock Resources, Inc.* ..................... 469,629
146,400 Nevsun Resources Ltd.* ........................ 945,744
295,000 Ocean Park Ventures Corp.* .................... 182,691
500,000 Peregrine Metals Ltd.* ........................ 516,076
250,000 Perseus Mining Ltd.* .......................... 732,828
550,000 PMI Gold Corp.* ............................... 340,610
40,000 Riverstone Resources, Inc.* ................... 26,010
300,000 Sabina Silver Corp.* .......................... 2,090,107
350,000 South American Silver Corp.* .................. 769,469
2,666,000 Sutter Gold Mining, Inc.* ..................... 495,309
100,000 Tahoe Resources, Inc.* ........................ 1,969,345
500,000 Torex Gold Resources, Inc.* ................... 872,168
-----------
22,052,255
-----------
PRIMARY SILVER PRODUCERS 5.7%
225,000 Fortuna Silver Mines, Inc.* ................... 1,223,874
48,075 Pan American Silver Corp ...................... 1,629,262
216,599 Silver Wheaton Corp ........................... 7,990,141
-----------
10,843,277
-----------
OTHER 3.7%
200,000 Altius Minerals Corp.*
14,800 Franco-Nevada Corp ............................ 570,094
65,000 Royal Gold, Inc ............................... 4,031,300
-----------
6,975,343
-----------
TOTAL COMMON STOCKS
(Cost $51,031,208) .................................... 178,083,497
-----------
See notes to financial statements.
5
OCM GOLD FUND
SCHEDULE OF INVESTMENTS - MAY 31, 2011 (CONTINUED)
(UNAUDITED)
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
EXCHANGE TRADED FUNDS 4.8%
60,000 SPDR Gold Trust* .............................. $ 8,978,400
-----------
TOTAL EXCHANGE TRADED FUNDS
(Cost $2,652,600) ..................................... 8,978,400
-----------
WARRANTS 0.1%
250,000 Amarillo Gold Corp.*+#
Exercise Price 2.00 CAD, Exp. 8/1/2011 ...... --
150,000 EMC Metals Corp.*+#
Exercise Price 3.35 CAD, Exp. 8/15/2011 ..... --
37,500 Golden Predator Royalty & Development Corp.*
Exercise Price 1.34 CAD, Exp. 8/15/2011 ..... 9,290
33,000 Kinross Gold Corp.*
Exercise Price $21.29, Exp. 9/17/2014 ....... 84,471
40,000 Primero Mining Corp.*
Exercise Price 8.00 CAD, Exp. 7/20/2015 ..... 40,873
100,000 Yukon-Nevada Gold Corp.*
Exercise Price 3.00 CAD, Exp. 6/20/2012 ..... 1,548
-----------
TOTAL WARRANTS
(Cost $157,410) ....................................... 136,182
-----------
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENT 1.3%
2,460,855 UMB Money Market Fiduciary, 0.01% ............. $ 2,460,855
-----------
TOTAL SHORT-TERM INVESTMENT
(Cost $2,460,855) ..................................... 2,460,855
-----------
TOTAL INVESTMENTS
(Cost $56,302,073) ..............................100.5% 189,658,934
LIABILITIES LESS OTHER ASSETS .....................(0.5)% (896,089)
-----------
TOTAL NET ASSETS ..................................100.0% $188,762,845
============
--------
ADR - American Depository Receipt.
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.
6
OCM GOLD FUND
Schedule of Investments - May 31, 2011 (Continued)
(Unaudited)
At May 31, 2011, restricted securities totaled $650,255 or 0.03% of net assets
and consisted of the following securities:
MAY 31, 2011
CARRYING VALUE
ISSUER PER UNIT COST ACQUISITION DATE
--------------------------------------------------------------------------------
Amarillo Gold Corp. 1.26 CAD 1.50 CAD 04/27/2011
Amarillo Gold Corp. Warrants
Exercise Price 2.00 CAD,
Exp. 8/1/2011 -- -- 04/27/2011
SUMMARY OF INVESTMENTS BY COUNTRY
PERCENT OF
COUNTRY MARKET VALUE INVESTMENT SECURITIES
--------------------------------------------------------------------------------
Australia $ 4,000,807 2.1%
Canada 136,866,967 72.2
Jersey 11,474,400 6.0
South Africa 14,779,800 7.8
United States(1) 22,536,960 11.9
--------------------------------------------------------------------------------
TOTAL $189,658,934 100.0%
--------------------------------------------------------------------------------
(1) Includes short-term investments.
See notes to financial statements.
7
OCM GOLD FUND
STATEMENT OF ASSETS AND LIABILITIES - MAY 31, 2011
(UNAUDITED)
ASSETS:
Investments in unaffiliated issuers,
at value (cost $56,302,073) ...................... $189,658,934
Interest and dividends receivable ................. 58,700
Receivable from fund shares sold .................. 24,452
Prepaid expenses and other assets ................. 27,122
------------
Total assets ...................................... 189,769,208
------------
LIABILITIES:
Payable from investments purchased ................ 360,254
Payable from fund shares redeemed ................. 41,001
Due to investment adviser ......................... 102,515
Accrued distribution fees ......................... 419,524
Accrued Trustees' fees ............................ 2,383
Accrued Chief Compliance Officer fees ............. 3,092
Accrued expenses and other liabilities ............ 77,594
------------
Total liabilities ............................... 1,006,363
------------
Net Assets ...................................... $188,762,845
============
NET ASSETS CONSIST OF:
Shares of beneficial interest, no par value:
unlimited shares authorized ...................... $ 54,646,589
Undistributed net investment loss ................. (2,840,792)
Accumulated net realized gain on investments
and foreign currency transactions ................ 3,600,187
Net unrealized appreciation on investments
and foreign currency translations ................ 133,356,861
------------
Net Assets ...................................... $188,762,845
============
CALCULATION OF MAXIMUM OFFERING PRICE:
INVESTOR CLASS:
Net asset value and redemption price per share .... $ 27.59
Maximum sales charge (4.50% of offering price) .... 1.30
------------
Offering price to public .......................... $ 28.89
------------
Shares outstanding ................................ 6,123,128
============
ADVISOR CLASS:
Net asset value and redemption price per share .... $ 27.78
------------
Shares outstanding ................................ 712,732
============
Total shares outstanding .......................... 6,835,860
============
See notes to financial statements.
8
OCM GOLD FUND
STATEMENT OF OPERATIONS - SIX MONTHS ENDED MAY 31, 2011
(UNAUDITED)
INVESTMENT INCOME:
Interest ............................................. $ 92
Dividend (net of foreign withholding
taxes of $80,429) ................................... 614,890
------------
Total investment income ............................ 614,982
------------
EXPENSES:
Investment advisory fees ............................. 710,119
Distribution fees - Investor Class ................... 664,399
Distribution fees - Advisor Class .................... 24,552
Fund administration and accounting fees .............. 132,284
Transfer agent fees and expenses ..................... 50,663
Professional fees .................................... 36,509
Federal and state registration fees .................. 23,205
Custody fees ......................................... 16,291
Chief Compliance Officer fees ........................ 10,939
Reports to shareholders .............................. 10,256
Trustees' fees ....................................... 5,069
Other expenses ....................................... 4,697
------------
Total expenses ..................................... 1,688,983
------------
Net investment loss ................................ (1,074,001)
------------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized gain on investments and
foreign currency transactions ....................... 4,453,184
Net change in unrealized appreciation/
depreciation on investments and foreign
currency translations ............................... (6,205,823)
------------
Net loss on investments ............................ (1,752,639)
------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ... $ (2,826,640)
============
See notes to financial statements.
9
OCM GOLD FUND
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
MAY 31, 2011 NOV. 30,
(UNAUDITED) 2010
---------------- ------------
OPERATIONS:
Net investment loss ........................... $ (1,074,001) $ (2,494,867)
Net realized gain on investments and
foreign currency transactions ................ 4,453,184 16,484,021
Net change in unrealized appreciation/
depreciation on investments
and foreign currency translations ............ (6,205,823) 27,102,212
------------ ------------
Net increase/(decrease) in net assets
resulting from operations .................... (2,826,640) 41,091,366
------------ ------------
DISTRIBUTIONS PAID TO SHAREHOLDERS:
INVESTOR CLASS:
Distributions paid from net realized gains ... (14,401,514) (3,437,477)
------------ ------------
Total distributions .......................... (14,401,514) (3,437,477)
------------ ------------
ADVISOR CLASS:
Distributions paid from net realized gains ... (1,674,355) --
------------ ------------
Total distributions from Advisor Class ....... (1,674,355) --
------------ ------------
Total distributions .......................... (16,075,869) (3,437,477)
------------ ------------
FUND SHARE TRANSACTIONS:
INVESTOR CLASS:
Net proceeds from shares sold ................ 4,489,745 12,629,462
Distributions reinvested ..................... 13,629,588 3,215,985
Payment for shares redeemed(1) ............... (7,975,207) (33,353,842)
------------ ------------
Net increase/(decrease) in net assets
from Investor Class share transactions ....... 10,144,126 (17,508,395)
------------ ------------
ADVISOR CLASS(2):
Net proceeds from shares sold ................. 573,723 16,668,622
Distributions reinvested ...................... 1,471,590 --
Payment for shares redeemed(3) ................ (712,229) (459,104)
------------ ------------
Net increase in net assets from
Advisor Class share transactions ............. 1,333,084 16,209,518
------------ ------------
Net increase/(decrease) in net assets
from Fund share transactions ................. 11,477,210 (1,298,877)
------------ ------------
TOTAL INCREASE/(DECREASE) IN NET ASSETS ......... (7,425,299) 36,355,012
See notes to financial statements.
10
OCM GOLD FUND
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
SIX MONTHS ENDED YEAR ENDED
MAY 31, 2011 NOV. 30,
(UNAUDITED) 2010
------------ ------------
NET ASSETS, BEGINNING OF PERIOD ........ $196,188,144 $159,833,132
------------ ------------
NET ASSETS, END OF PERIOD .............. $188,762,845 $196,188,144
============ ============
UNDISTRIBUTED NET INVESTMENT LOSS ...... $ (2,840,792) $ (1,766,791)
============ ============
TRANSACTIONS IN SHARES:
INVESTOR CLASS:
Shares sold ......................... 160,137 503,451
Shares issued on reinvestment
of distributions ................... 486,945 145,850
Shares redeemed ..................... (281,868) (1,368,512)
------------ ------------
Net increase/(decrease) in
Investor Class shares outstanding .. 365,214 (719,211)
============ ============
ADVISOR CLASS(2):
Shares sold ......................... 20,423 680,567
Shares issued on reinvestment
of distributions ................... 52,332 --
Shares redeemed ..................... (25,114) (15,476)
------------ ------------
Net increase in Advisor Class
shares outstanding. ................ 47,641 665,091
============ ============
Net increase/(decrease) in Fund
shares outstanding ................. 412,855 (54,120)
============ ============
-----------
(1) Net of redemption fees of $3,098 and $12,463, for the six months ended May
31, 2011 and year ended November 30, 2010, respectively.
(2) Inception date of the Advisor Class was April 1, 2010.
(3) Net of redemption fees of $366 and $289, for the six months ended May 31,
2011 and period ended November 30, 2010, respectively.
See notes to financial statements.
11
OCM GOLD FUND
NOTES TO FINANCIAL STATEMENTS - MAY 31, 2011
(UNAUDITED)
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.
Under FAIR VALUE MEASUREMENTS AND DISCLOSURES, various inputs are used in
determining the value of the Fund's investments. These inputs are summarized
into three broad levels as 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).
12
OCM GOLD FUND
NOTES TO FINANCIAL STATEMENTS - MAY 31, 2011 (CONTINUED)
(UNAUDITED)
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 May 31, 2011, in valuing the Fund's assets:
---------------------------------------------------------------------------------------------
SECTOR LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
---------------------------------------------------------------------------------------------
COMMON STOCKS
---------------------------------------------------------------------------------------------
Major Gold Producers ................... $ 60,993,708 $ -- $ -- $60,993,708
---------------------------------------------------------------------------------------------
Intermediate/Mid-Tier Gold Producers ... 58,941,258 -- -- 58,941,258
---------------------------------------------------------------------------------------------
Junior Gold Producers .................. 18,277,656 -- -- 18,277,656
---------------------------------------------------------------------------------------------
Exploration and Development Companies .. 21,402,000 650,255 -- 22,052,255
---------------------------------------------------------------------------------------------
Primary Silver Producers ............... 10,843,277 -- -- 10,843,277
---------------------------------------------------------------------------------------------
Other .................................. 6,975,343 -- -- 6,975,343
---------------------------------------------------------------------------------------------
EXCHANGE TRADED FUND ..................... 8,978,400 -- -- 8,978,400
---------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT .................... 2,460,855 -- -- 2,460,855
---------------------------------------------------------------------------------------------
WARRANTS
---------------------------------------------------------------------------------------------
Major Gold Producers ................... 84,471 -- -- 84,471
---------------------------------------------------------------------------------------------
Junior Gold Producers .................. 42,421 -- -- 42,421
---------------------------------------------------------------------------------------------
Exploration and Development Companies .. 9,290 -- -- 9,290
---------------------------------------------------------------------------------------------
TOTAL .................................... $189,008,679 $ 650,255 $ -- $189,658,934
---------------------------------------------------------------------------------------------
At May 31, 2011 Level 2 securities consisted of a security exempt from
registration under rule 144A of the Securities Act of 1933. Such securities are
categorized as Level 2 until the respective security's restriction period ends
and meets the necessary requirements to be categorized as Level 1. There were no
other significant transfers between each of the three levels.
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 and income and
expense items 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 six months ended May
31, 2011 are included within the realized and unrealized gain/loss on
investments section of the Statement of Operations.
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 period end, resulting from changes in exchange rates. Such fluctuations
for the six months ended May 31, 2011 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.
13
OCM GOLD FUND
NOTES TO FINANCIAL STATEMENTS - MAY 31, 2011 (CONTINUED)
(UNAUDITED)
The Income Tax Statement requires an evaluation of tax positions taken (or
expected to be taken) in the course of preparing a Fund's tax returns to
determine whether these positions meet a "more-likely-than-not" standard that,
based on the technical merits, have a more than fifty percent likelihood of
being sustained by a taxing authority upon examination. A tax position that
meets the "more-likely-than-not" recognition threshold is measured to determine
the amount of benefit to recognize in the financial statements. The Fund
recognizes interest and penalties, if any, related to unrecognized tax benefits
as income tax expense in the Statements of Operations.
The Income Tax Statement requires management of the Fund to analyze all
open tax years, fiscal years 2007-2010 as defined by IRS statute of limitations
for all major jurisdictions, including federal tax authorities and certain state
tax authorities. As of and during the six months ended May 31, 2011, the Fund
did not have a liability for any unrecognized tax benefits. The Fund has no
examination in progress and is not aware of any tax positions for which it is
reasonably possible that the total amounts of unrecognized tax benefits will
significantly change in the next twelve months.
SHARE CLASSES - The Fund offers two classes of shares, Investor Class and
Advisor Class. The outstanding shares of the Fund on April 1, 2010 were renamed
"Investor Class shares." The Advisor Class shares commenced operations on April
1, 2010. The two classes represent interests in the same portfolio of
investments and have the same rights. Investor Class shares are subject to an
annual 12b-1 fee of up to 0.99% of the Fund's average daily net assets allocable
to Investor Class shares, whereas Advisor Class shares are subject to an annual
12b-1 fee of up to 0.25% of the Fund's average daily net assets allocable to
Advisor Class shares. Income, expenses (other than expenses attributable to a
specific class) and realized and unrealized gains and losses on investments are
allocated to each class of shares in proportion to their relative shares
outstanding.
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 - 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 six months ended May 31,
2011, the Investor Class and the Advisor Class received $3,098 and $366 in
redemption fees, respectively.
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.
DERIVATIVE INSTRUMENTS - Equity securities in the gold mining industry,
particularly the smaller companies, may occasionally issue warrants as part of
their capital structure. A warrant gives the holder the right to purchase the
underlying equity at the exercise price until the expiration date of the
warrant. The Fund may hold such warrants for exposure to smaller companies in
the portfolio or other reasons associated with the Fund's overall objective of
long-term growth, though warrants will typically not be a significant part of
the Fund's portfolio. The Fund's maximum risk in holding warrants is the loss of
the entire amount paid for the warrants. The Fund acquired 1 warrant during the
six months ended May 31, 2011, which was received as part of a purchase of the
same company's common stock. At May 31, 2011, the Fund held warrants as listed
on the Schedule of Investments.
SUBSEQUENT EVENTS - Management has evaluated subsequent events and
determined there were no subsequent events that require recognition or
disclosure in the financial statements.
14
OCM GOLD FUND
NOTES TO FINANCIAL STATEMENTS - MAY 31, 2011 (CONTINUED)
(UNAUDITed)
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 ratesbased 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 $200 million ................. 0.500%
Over $200 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 the Fund, including the cost of printing sales material
and making payments to dealers of the Fund's Investor Class and Advisor Class,
in any fiscal year, subject to limits of 0.99% and 0.25%, respectively, of the
average daily net assets of each respective class. For the six months ended May
31, 2011, the Investor Class and the Advisor Class accrued $664,399 and $24,552,
respectively, in expenses under the Plan.
NOTE 5. PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities (excluding short-term
securities and U.S. government obligations) for the six months ended May 31,
2011 were $5,103,200 and $12,098,811, respectively. There were no purchases or
sales of U.S. government obligations.
NOTE 6. FEDERAL INCOME TAX INFORMATION
At May 31, 2011, 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 ............................. $ 59,041,589
============
Unrealized appreciation ......................... $132,319,357
Unrealized depreciation ......................... (1,702,012)
------------
Net unrealized appreciation on investments ...... $130,617,345
============
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, 2010 and 2009 was as follows:
2010 2009
---------- --------
Ordinary income ..................... $ -- $ --
Net long-term capital gains ......... 3,437,477 205,832
---------- --------
Total distributions ................. $3,437,477 $205,832
========== =========
15
OCM GOLD FUND
NOTES TO FINANCIAL STATEMENTS - MAY 31, 2011 (CONTINUED)
(UNAUDITED)
As of November 30, 2010 the components of accumulated earnings on a tax
basis were as follows:
Undistributed ordinary income ................. $ --
Undistributed long-term gains ................. 15,529,514
------------
Tax accumulated earnings ...................... 15,529,514
Accumulated capital and other losses .......... --
Unrealized appreciation on investments ........ 137,489,251
------------
Total accumulated earnings .................... $153,018,765
============
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 INVESTOR CLASS
SIX MONTHS YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
MAY 31, 2011 NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
(UNAUDITED) 2010 2009 2008 2007 2006
--------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout each period)
Net asset value, beginning of period ..... $ 30.53 $ 24.68 $ 12.35 $ 21.49 $ 20.44 $ 12.85
-------- -------- -------- ------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ...................... (0.15) (0.43) (0.29) (0.31) (0.27) (0.29)
Net realized and unrealized gain/(loss)
on investments and foreign
currency transactions .................. (0.28) 6.81 12.65 (7.41) 3.06 7.88
-------- -------- -------- ------- -------- --------
Total from investment operations ......... (0.43) 6.38 12.36 (7.72) 2.79 7.59
-------- -------- -------- ------- -------- --------
LESS DISTRIBUTIONS:
Dividends from net investment income ..... -- -- -- -- -- --
Distribution from net realized gains ..... (2.51) (0.53) (0.03) (1.42) (1.74) --
-------- -------- -------- ------- -------- --------
Total distributions ...................... (2.51) (0.53) (0.03) (1.42) (1.74) --
-------- -------- -------- ------- -------- --------
Net asset value, end of period ........... $ 27.59 $ 30.53 $ 24.68 $ 12.35 $ 21.49 $ 20.44
======== ======== ======== ======= ======== ========
TOTAL RETURN* ............................ (1.51)%(1) 26.70% 100.14% (38.55)% 15.64% 59.07%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ..... $168,960 $175,802 $159,833 $78,652 $136,241 $119,756
Ratio of expenses to
average net assets ..................... 1.83%(2) 1.93% 1.94% 1.99% 1.93% 2.07%
Ratio of net investment loss to
average net assets ..................... (1.18)%(2) (1.57)% (1.59)% (1.58)% (1.51)% (1.64)%
Portfolio turnover rate .................. 3%(1) 12% 6% 5% 11% 20%
--------
* Assumes no sales charge.
(1) Not annualized for periods less than one year.
(2) Annualized for periods less than one year.
See notes to financial statements.
17
OCM GOLD FUND
FINANCIAL HIGHLIGHTS ADVISOR CLASS
SIX MONTHS FOR THE PERIOD
ENDED APRIL 1, 2010#-
MAY 31, 2011 NOVEMBER 30,
(UNAUDITED) 2010
-----------------------------
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout each period)
Net asset value, beginning of period ............. $ 30.65 $ 22.24
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss .............................. (0.10) (0.13)
Net realized and unrealized gain/(loss)
on investments and foreign
currency transactions .......................... (0.26) 8.54
------- -------
Total from investment operations ................. (0.36) 8.41
------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ............. -- --
Distribution from net realized gains ............. (2.51) --
------- -------
Total distributions .............................. (2.51) --
------- -------
Net asset value, end of period ................... $ 27.78 $ 30.65
======= =======
TOTAL RETURN ..................................... (1.26)%(1) 37.81%(1)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ............. $19,803 $20,386
Ratio of expenses to average net assets .......... 1.30%(2) 1.34%(2)
Ratio of net investment loss to average net assets (0.65)%(2) (0.98)%(2)
Portfolio turnover rate .......................... 3%(1) 12%(1)
# Inception date of Advisor Class.
(1) Not annualized for periods less than one year.
(2) Annualized for periods less than one year.
See notes to financial statements.
18
OCM GOLD FUND
EXPENSE EXAMPLE - FOR THE PERIOD ENDED MAY 31, 2011
(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 December 1, 2010 to May 31,
2011 (the "period").
ACTUAL EXPENSES
The first lines of the tables below provide 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 periods.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the tables below provide information about hypothetical
account values and hypothetical expenses based on each class' actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
each class' 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 classes of the Fund and other funds. To do so, compare these 5%
hypothetical examples with the 5% hypothetical examples that appear in the
shareholder reports of other funds.
Please note that the expenses shown in the tables 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
tables are 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
DECEMBER 1, 2010 MAY 31, 2011 MAY 31, 2011*
---------------- ------------- --------------
INVESTOR CLASS
Actual $ 1,000.00 $ 984.90 $ 9.04
Hypothetical (5% return
before expenses) 1,000.00 1,015.89 9.18
ADVISOR CLASS
Actual 1,000.00 987.40 6.44
Hypothetical (5% return
before expenses) 1,000.00 1,018.52 6.54
---------
* Expenses are equal to the Investor Class' and Advisor Class' annualized
expense ratios of 1.83% and 1.30%, respectively, for the period, multiplied
by the average account value over the period, multiplied by 182/365 (to
reflect the one-half year period).
19
chart omitted
OCM GOLD FUND
INVESTMENTS BY SECTOR (UNAUDITED) - AS OF MAY 31, 2011
AS A PERCENTAGE OF NET ASSETS
Major Gold Producers 32.4%
Intermediate/Mid-Tier Gold Producers 31.2%
Exploration and Development Companies 11.7%
Junior Gold Producers 9.7%
Primary Silver Producers 5.7%
Exchange Traded Funds 4.8%
Other 3.7%
Cash and Other Assets 0.8%
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, 2010 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
Distributed by:
Northern Lights Distributors, LLC
4020 South 147th
Street Omaha, NE 68137 1601-NLD-7/26/2011
ITEM 2. CODE OF ETHICS.
Not applicable to semi-annual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to semi-annual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable to semi-annual reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable to semi-annual reports.
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.
(a) 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.
(b) Not applicable.
ITEM 12. EXHIBITS.
(a)(1) Code of Ethics - Not applicable.
(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: July 26, 2011
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: July 26, 2011
By: /s/ Jacklyn Orrell
-------------------
Jacklyn Orrell
Secretary and Treasurer
Date: July 26, 2011