AMENDED N-CSR FOR PERIOD ENDING 06/30/07
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR/A
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-1800
U.S. GLOBAL INVESTORS FUNDS
7900 CALLAGHAN ROAD
SAN ANTONIO, TX 78229
(Address of principal executive offices) (Zip code)
SUSAN B. MCGEE, ESQ.
7900 CALLAGHAN ROAD
SAN ANTONIO, TX 78229
(Name and address of agent for service)
Registrant's telephone number, including area code: 210-308-1234
Date of fiscal year end: JUNE 30
Date of reporting period: JUNE 30, 2007
ITEM 1. REPORTS TO STOCKHOLDERS.
U.S. GLOBAL INVESTORS FUNDS
ANNUAL REPORT
JUNE 30, 2007
TABLE OF CONTENTS
LETTER TO SHAREHOLDERS 1
MANAGEMENT TEAMS' PERSPECTIVES 8
EXPENSE EXAMPLE 46
PORTFOLIOS OF INVESTMENTS 48
NOTES TO PORTFOLIOS OF INVESTMENTS 100
STATEMENTS OF ASSETS AND LIABILITIES 104
STATEMENTS OF OPERATIONS 108
STATEMENTS OF CHANGES IN NET ASSETS 112
NOTES TO FINANCIAL STATEMENTS 118
FINANCIAL HIGHLIGHTS 129
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM 138
TRUSTEES AND OFFICERS 139
ADDITIONAL INFORMATION 142
NASDAQ SYMBOLS
U.S. TREASURY SECURITIES CASH FUND USTXX
U.S. GOVERNMENT SECURITIES SAVINGS FUND UGSXX
NEAR-TERM TAX FREE FUND NEARX
TAX FREE FUND USUTX
ALL AMERICAN EQUITY FUND GBTFX
CHINA REGION OPPORTUNITY FUND USCOX
GLOBAL RESOURCES FUND PSPFX
WORLD PRECIOUS MINERALS FUND UNWPX
GOLD SHARES FUND USERX
[USGI Logo]
P.O. Box 781234
San Antonio, Texas 78278-1234
Tel 1.800.US.FUNDS
Fax 210.308.1217
www.usfunds.com
U.S. GLOBAL INVESTORS FUNDS
DEAR SHAREHOLDERS
The U.S. Global Investors Funds recently concluded
another year of strong performance as the secular [PHOTO]
bull market for commodities and emerging markets
continued as a dominant investment theme.
The enduring strength of these sectors make clear
to us and many other investors that a number of the
old ways of thinking about commodity cycles and global growth are
outdated. There have been fundamental changes to the demand drivers
as populous emerging nations like China, India and others build out
their infrastructure and modernize their economies.
As 2006 turned into 2007, many prominent analysts and pundits were
talking down these dynamic emerging markets. The conventional
thinking was that the bullish growth rates of recent years had run their
course and that slowdowns overseas would be a headwind for natural
resources as well. Investors following the herd got skittish and
adopted defensive stances.
We were not part of that herd, and early in the year we did a series
of webcasts to point out the many opportunities in resources and
emerging markets. And rather than flatten or decline, as many experts
predicted, GDP and industrial production growth rates in China and
India accelerated in the first half of calendar 2007. The enduring
strength of energy and commodity prices prompted Russia's government
to raise economic growth forecasts through 2010.
Closer to home, we also spoke about other important market factors.
One such factor overlooked by many was that we were entering the
third year of the four-year presidential election cycle.
Historically this is the best year of the cycle, and from January
through June the total return for the S&P 500 was about 6.9 percent.
In past years commodity prices have tended to head upward from July
to September before experiencing a downtrend from October to
December. This time around, however, our key sectors struggled in
the first three months of the fiscal year before regaining their
footing in the final months of 2006. Commodity markets also saw
little effect from the so-called "January Effect," an early-year
phenomenon that has often been a time of rising prices.
In 2006 we saw one of the most dramatic corrections in commodities
and emerging markets beginning in mid-May and continuing through
late June. But conditions were very different during that same time
period in 2007--our funds experienced some of their largest gains
during May and June, making the final quarter the strongest of the
fiscal year.
1
U.S. GLOBAL INVESTORS FUNDS
Past performance does not guarantee future results, but we believe
our investment models and processes provide us with a disciplined
way to understand and manage market risks.
Our team-based approach creates a free flow of ideas among our
investment professionals, who use both qualitative and quantitative
analysis to identify and pursue the most promising themes in an
ever-shifting marketplace. A disciplined approach is important
regardless of what the markets are doing. Research has shown that
strict investment processes help manage emotional biases, such as
fear and anxiety, and lead to more rational and consistent decisions
over the long term.
Let me talk a bit about each of the Investors funds. All time-period
rankings are provided by Lipper.
The China Region Opportunity Fund (USCOX) was our top-performing
fund for the year ended June 30, 2007, by posting a total return of
46.3 percent. The fund's consistent record has elevated its
five-year annualized total return to 25.2 percent. The China Region
Opportunity Fund ranked 49 of 52, 19 of 22, and 8 of 11 China region
funds in total return for the one-, five- and ten-year periods ended
June 30, 2007.
The dramatic economic expansion under way in China is showing no
sign of slowdown. Its GDP grew at a rate of 11 to 12 percent in the
first half of 2007, a pace that is expected to be maintained for the
rest of the year, and more double-digit growth is forecast for
2008. China's determination to build for the future - ports,
airports, power plants, highways and more - is the single biggest
driver for global demand growth in commodities.
The All American Equity Fund (GBTFX) experienced one of its
strongest annual performances in recent years. Taking advantage of
growth among the large-cap sector after a long period of lackluster
results, the fund earned a total return of 19.6 percent for the year
ended June 30, 2007. The All American Equity Fund ranked 367 of 806,
231 of 556, and 225 of 260 large-cap core funds in total return for
the one-, five-, and ten-year periods ended June 30, 2007.
2
U.S. GLOBAL INVESTORS FUNDS
[Growth of $10,000 from 7/01/2004 to 6/30/2007 Graph]
* The chart illustrates the performance of a hypothetical $10,000 investment
made in the fund during the depicted time frame. Figures include
reinvestment of capital gains and dividends, but the performance does not
include the effect of any fees described in the fund's prospectus (e.g.
short-term trading fees) which, if applicable, would lower your total returns.
TOTAL ANNUALIZED RETURNS AS OF 6/30/07
FUND/TICKER ONE-YEAR THREE-YEAR FIVE-YEAR TEN-YEAR GROSS CAPPED
EXPENSE EXPENSE
RATIO RATIO
China Region Opportunity Fund 46.34% 31.67% 25.20% 4.90% 2.51% n/a
(USCOX)
All American Equity Fund 19.59% 14.39% 9.72% 4.09% 2.31% 1.75%
(GBTFX)
S&P 500 Index 20.59% 11.69% 10.70% 7.13% na na
Gross expense ratio as stated in the most recent prospectus. The
Adviser for the All American Equity Fund has contractually limited
total fund operating expenses (as a percentage of net assets) to not
exceed 1.75% through November 1, 2007, or until such later date as the
Adviser determines. Performance data quoted above is historical. Past
performance is no guarantee of future results. Results reflect the
reinvestment of dividends and other earnings. Current performance may
be higher or lower than the performance data quoted. The principal
value and investment return of an investment will fluctuate so that
your shares, when redeemed, may be worth more or less than their
original cost. Performance does not include the effect of any fees
described in the fund's prospectus (e.g. short-term trading fees)
which, if applicable, would lower your total returns. Obtain
performance data current to the most recent month-end at
www.usfunds.com or 1-800-US-FUNDS, option 5. High double-digit returns
are attributable, in part, to unusually favorable market conditions
and may not be repeated or consistently achieved in the future.
The Global Resources Fund (PSPFX) continued its solid performance as
energy and metals prices remained strong. The fund posted a total
return of 20.9 percent for the year ended June 30, 2007. The fund's
consistent return over the five-year period ended December 31, 2006,
earned it the 2007 Lipper Fund Award for Best Natural Resource Fund
for the same period. The fund ranked first among 72 funds in its
category. It was the third straight year that the Global Resources
Fund has brought home a Lipper Fund Award. As of June 30, 2007, the
fund ranked 73 of 132, 1 of 75 and 14 of 38 in total return among
natural resources funds for the one-, five-, and ten-year periods
ended June 30, 2007.
3
U.S. GLOBAL INVESTORS FUNDS
The World Precious Minerals Fund (UNWPX) won its second consecutive
Lipper Fund Award in 2007 as the Best Gold-Oriented Fund for the
three years ended December 31, 2006. It ranked first among 49 funds in
consistent return during that period. The fund continued its run of
double-digit gains by posting a one-year total return of 11.5
percent for the period ended June 30, 2007. The World Precious
Minerals Fund ranked 20 of 53, 2 of 41 and 15 of 24 for the one-,
five- and ten-year periods ended June 30, 2007.
[Growth of $10,000 from 7/01/2004 to 6/30/2007 Graph]
* The chart illustrates the performance of a hypothetical $10,000 investment
made in the fund during the depicted time frame. Figures include
reinvestment of capital gains and dividends, but the performance does not
include the effect of any fees described in the fund's prospectus (e.g.
short-term trading fees) which, if applicable, would lower your total returns.
TOTAL ANNUALIZED RETURNS AS OF 6/30/07
FUND/TICKER ONE-YEAR THREE-YEAR FIVE-YEAR TEN-YEAR GROSS
EXPENSE
RATIO
Global Resources Fund (PSPFX) 20.94% 42.36% 38.44% 15.46% 1.03%
World Precious Minerals Fund (UNWPX) 11.48% 36.59% 30.93% 9.86% 1.23%
Gold Shares Fund (USERX) -3.17% 29.63% 23.69% 5.21% 1.66%
S&P 500 Index 20.59% 11.69% 10.70% 7.13% na
Gross expense ratio as stated in the most recent prospectus.
Performance data quoted above is historical. Past performance is no
guarantee of future results. Results reflect the reinvestment of
dividends and other earnings. Current performance may be higher or
lower than the performance data quoted. The principal value and
investment return of an investment will fluctuate so that your shares,
when redeemed, may be worth more or less than their original cost.
Performance does not include the effect of any fees described in the
fund's prospectus (e.g. short-term trading fees) which, if applicable,
would lower your total returns. Obtain performance data current to the
most recent month-end at www.usfunds.com or 1-800-US-FUNDS, option 5.
High double-digit returns are attributable, in part, to unusually
favorable market conditions and may not be repeated or consistently
achieved in the future.
The Gold Shares Fund (USERX) suffered from lagging performance by
senior gold producers, whose profits have been crimped by rising
production costs, to finish the fiscal year down 3.2 percent. The fund
has a stronger record over longer time periods - it has an annualized
total return of 23.7 percent for the five years ended June 30, 2007.
The Gold Shares
4
U.S. GLOBAL INVESTORS FUNDS
Fund ranks 51 of 53, 21 of 41 and 21 of 24 for the one-, five- and
ten-year periods ended June 30, 2007.
And finally, our municipal bond funds -- the Tax Free Fund (USUTX)
and Near-Term Tax Free Fund (NEARX) -- generally fared well against
their peers for the year. The federal funds rate was kept at 5.25
percent throughout the fiscal year, suggesting that the Federal
Reserve was content with the balance between inflation and economic
growth. In our money market funds, the U.S. Government Securities
Savings Fund (UGSXX) seeks to create current income with the highest
level of safety and liquidity, while the U.S. Treasury Securities
Cash Fund (USTXX) provides an excellent alternative to a checking
account.
TOTAL ANNUALIZED RETURNS AS OF 6/30/07
FUND/TICKER ONE-YEAR THREE-YEAR FIVE-YEAR TEN-YEAR GROSS CAPPED
EXPENSE EXPENSE
RATIO RATIO
Near-Term Tax Free Fund 3.51% 2.33% 2.61% 3.68% 1.61% 0.45%
(NEARX)
Tax Free Fund (USUTX) 4.15% 3.73% 3.44% 4.36% 1.77% 0.70%
U.S. Government Securities 4.86% 3.41% 2.38% 3.52% 0.65% 0.45%
Savings Fund - UGSXX
U.S. Treasury Securities Cash 4.36% 2.85% 1.83% 2.82% 1.08% 1.00%
Fund - USTXX
Gross expense ratio as stated in the most recent prospectus. The
Adviser for the Tax Free Fund has contractually limited total fund
operating expenses (as a percentage of net assets) to not exceed 0.70%
through November 1, 2007, or until such later date as the Adviser
determines. The Adviser for the Near-Term Tax Free Fund has
contractually limited total fund operating expenses to not exceed
0.45% through November 1, 2007, or until such later date as the
Adviser determines. The Adviser for the U.S. Government Securities
Savings Fund has contractually limited total fund operating expenses
(as a percentage of net assets) to not exceed 0.45% through November
1, 2007, or until such later date as the Adviser determines. The
Adviser has contractually limited total fund operating expenses of the
U.S. Treasury Securities Cash Fund to not exceed 1.00% on an
annualized basis from April 1, 2007 through November 1, 2007 and until
such later date as the Adviser determines. Performance data quoted
above is historical. Past performance is no guarantee of future
results. Results reflect the reinvestment of dividends and other
earnings. Current performance may be higher or lower than the
performance data quoted. The principal value and investment return of
an investment will fluctuate so that your shares, when redeemed, may
be worth more or less than their original cost. Performance does not
include the effect of any fees described in the fund's prospectus
(e.g. short-term trading fees) which, if applicable, would lower your
total returns. Obtain performance data current to the most recent
month-end at www.usfunds.com or 1-800-US-FUNDS, option 5.
We firmly believe that the secular bull market in emerging markets
and resources remains intact, though both of those sectors are
subject to bouts of short-term volatility. At U.S. Global, we
consistently advise investors to be mindful of the inherent
volatility of these markets as a way to manage their expectations
and make their best decisions.
And as always, we urge investors to not chase performance. We
frequently suggest that investors consider a portfolio allocation
model similar to the one recommended by Roger Gibson in his
best-selling book "Asset Allocation: Balancing Financial Risk."
Gibson's model calls for allocating 25 percent of assets in each of
four categories: domestic stocks, international stocks, fixed income
securities and hard assets. And when it comes to gold, we recommend
that investors limit their exposure to no more than 10 percent of
their portfolio.
5
U.S. GLOBAL INVESTORS FUNDS
We are passionate about managing your money and, as active money
managers, we strive to beat major indices. However, no system can
win in every quarter, and for us winning means beating a comparable
index by capturing opportunities and managing risks. We also work
hard to offer insights in our weekly Investor Alert regarding the
key factors affecting your funds. To do that, we analyze the
strengths and weaknesses for the past week and look ahead to
potential opportunities and threats in the coming week. We also
publish research papers and do topical webcasts that are available
at www.usfunds.com.
Thank you for your confidence in the fiscal year just past, and we
look forward to working with you in years to come.
Sincerely,
/s/ Frank Holmes
Frank E. Holmes
CEO and Chief Investment Officer
U.S. Global Investors, Inc.
Please consider carefully the fund's investment objectives, risks,
charges and expenses. For this and other important information,
obtain a fund prospectus by visiting www.usfunds.com or by calling
1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing.
Distributed by U.S. Global Brokerage, Inc.
An investment in a money market fund is neither insured nor
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the fund seeks to preserve the value of
your investment at $1.00 per share, it is possible to lose money by
investing in the fund.
All opinions expressed and data provided are subject to change
without notice. Some of these opinions may not be appropriate to
every investor.
Foreign and emerging market investing involves special risks such as
currency fluctuation and less public disclosure, as well as economic
and political risk. Gold funds may be susceptible to adverse
economic, political or regulatory developments due to concentrating
in a single theme. The price of gold is subject to substantial price
fluctuations over short periods of time and may be affected by
unpredicted international monetary and political policies. We
suggest investing no more than 5% to 10% of your portfolio in gold
or gold stocks. Tax-exempt income is federal income tax free. A
portion of this income may be subject to state and local income
taxes, and if applicable, may subject certain investors to the
Alternative Minimum Tax as well. Bond funds are subject to
interest-rate risk; their value declines as interest rates rise.
Diversification does not protect an investor from market risks and
does not assure a profit. The S&P 500
6
U.S. GLOBAL INVESTORS FUNDS
Index is a widely recognized capitalization-weighted index of 500
common stock prices in U.S. companies.
The Lipper Fund Award selection process began with Lipper
calculating a Consistent Return score for each fund for the
three-year time period as of December 31, 2006. Consistent Return is
a quantitative metric that incorporates two characteristics:
risk-adjusted return, and the strength of the fund's performance
trend. The top-scoring Consistent Return fund within each
classification received the awards. (Certificates are also awarded
to the top funds over the 5-year and 10-year periods). Although
Lipper makes reasonable efforts to ensure the accuracy and
reliability of the data contained herein, the accuracy is not
guaranteed by Lipper. Users acknowledge that they have not relied
upon any warranty, condition, guarantee, or representation made by
Lipper. Any use of the data for analyzing, managing, or trading
financial instruments is at the user's own risk. This is not an
offer to buy or sell securities.
7
MONEY MARKET FUNDS
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The U.S. Treasury Securities Cash Fund seeks to obtain a high level
of current income while maintaining the highest degree of safety of
principal and liquidity. The U.S. Government Securities Savings Fund
seeks to achieve a consistently high yield with safety of principal.
PERFORMANCE
U.S. TREASURY SECURITIES CASH FUND As of June 30, 2007
7-Day Yield 3.97%
---------------------------------------------------------------
7-Day Effective Yield 4.05%
---------------------------------------------------------------
Weighted Average Days to Maturity 34
U.S. GOVERNMENT SECURITIES SAVINGS FUND As of June 30, 2007
7-Day Yield 4.75%
---------------------------------------------------------------
7-Day Effective Yield 4.86%
---------------------------------------------------------------
Weighted Average Days to Maturity 25
An investment in either the U.S. Government Securities Savings Fund
or the U.S. Treasury Securities Cash Fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or by
any other government agency. Although the funds seek to preserve the
value of your investments at $1.00 per share, it is possible to lose
money by investing in the funds.
The Adviser has contractually limited total fund operating expenses
of the U.S. Treasury Securities Cash Fund to not exceed 1.00% (as a
percentage of net assets) on an annualized basis from April 1, 2007,
through November 1, 2007, or until such later date as the Adviser
determines. The Adviser has contractually limited total fund
operating expenses of the U.S. Government Securities Savings Fund to
not exceed 0.45% through November 1, 2007, or until such later date
as the Adviser determines.
PERFORMANCE COMMENTARY
The U.S. Government Securities Savings Fund outperformed the Lipper
government-only money market funds for the 12 months ending June 30,
2007, returning 4.86 percent versus 4.59 percent for the peer group.
The U.S. Treasury Securities Cash Fund underperformed the Lipper
treasury money market funds for the six months ending June 30, 2007,
returning 4.36 percent versus 4.46 percent for the peer group. The
U.S. Treasury Securities Cash Fund is recognized as an excellent
alternative to a bank checking account. It offers free unlimited
check writing, a check card
8
MONEY MARKET FUNDS
option and timely statements rivaling a full service commercial bank
checking account.
THE YEAR IN REVIEW - ECONOMIC AND POLITICAL ISSUES THAT AFFECTED THE
FUNDS
Economic growth was lackluster over the past year with the latest
year-over-year real GDP figures falling to just 1.9 percent. Judging
from the negative news that permeated the airwaves, one would have
thought the U.S. economy was in dire straits. High gasoline prices,
subprime mortgage troubles, falling house prices, the war on
terrorism and Iranian nuclear ambitions all seemed to put a pall on
the average investor's view of the world. The reality appeared to be
different, with robust worldwide economic growth, especially from
China, Russia and many other developing markets. This global trend
spurred growth in Europe, Japan and even the U.S. The U.S. economy
slowed over the past year but unemployment was relatively stable
(around 4.5 percent), corporate profitability remained strong and
the manufacturing sector showed renewed signs of life. Housing was a
drag on the economy and will likely continue to be so in the second
half of 2007, but this did not pull the economy into a recession and
it appears unlikely to do so. The inflation situation improved over
the past year, with the Consumer Price Index (CPI) falling from 4.3
percent to 2.7 percent, and the majority of inflation indicators
following a similar course. Over the past 12 months the Federal
Reserve remained on the sidelines, leaving the federal funds rate at
5.25 percent. The Fed finished its tightening cycle in June 2006 and
many market participants believed the next move would be down.
Short-term bond yields generally moved lower during the past year as
expectations for additional interest rate increases gave way to
prospects of a rate cut. Yields on the three-month T-bill fell 21
basis points to 4.72 percent, while yields on the six-month T-bills
dropped 31 basis points to 4.85 percent. One-year agency discount
note yields moved lower by 32 basis points to 5.24 percent.
INVESTMENT HIGHLIGHTS
For much of the period, the U.S. Government Securities Savings Fund
took a laddered approach by buying fixed-rate securities across the
money market spectrum. The fund averaged a weighted average maturity
of 38 days. The fund took advantage of higher yields by selectively
extending its ladder, but believed the markets expectations of Fed
rate cuts was too aggressive, which caused the fund to reduce its
average maturity during the fiscal year to 25 days at year-end. The
fund benefited from relatively high overnight and very short term
investments. The U.S. Treasury Securities Cash Fund followed a
similar approach, averaging a weighted average maturity of 33 days
over the period. The fund took advantage of relatively high repo
rates, which kept the weighted average maturity lower than the U.S.
Government Securities Savings Fund for most of the period.
9
MONEY MARKET FUNDS
CURRENT OUTLOOK
Over much of the past 15 years, the U.S. economy was the engine of
growth for the world economy, but over the past year the world
supported U.S. growth. This trend is likely to continue, with strong
global growth fueling a worldwide economic expansion in which the
U.S. would be a beneficiary. With reasonably good growth here and
abroad, inflation concerns cannot be dismissed. The inflation trend
was positive over the past year but rising commodity prices and a
falling dollar will likely force the Fed to err on the side on
caution and maintain the status quo during the second half of 2007.
10
TAX FREE FUNDS
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The U.S. Global Investors Tax Free and Near-Term Tax Free Funds seek
to provide a high level of current income exempt from federal income
taxation and to preserve capital. However, a portion of any
distribution may be subject to federal and/or state income taxes.
The Near-Term Tax Free Fund will maintain a weighted average
maturity of less than five years, while the Tax Free Fund will
generally maintain a longer weighted average maturity.
PERFORMANCE GRAPHS
NEAR-TERM TAX FREE FUND
[Near-Term Tax Free Fund Graph]
Lehman 3-Year
Near-Term Municipal
Date Tax Free Fund Bond Index
06/30/97 $ 10,000.00 $ 10,000.00
07/31/97 10,166.83 10,118.67
08/29/97 10,114.22 10,098.89
09/30/97 10,209.22 10,170.98
10/31/97 10,253.53 10,216.28
11/28/97 10,286.38 10,245.63
12/31/97 10,394.00 10,315.17
01/30/98 10,477.70 10,383.44
02/27/98 10,472.81 10,405.13
03/31/98 10,468.89 10,421.72
04/30/98 10,455.13 10,407.68
05/29/98 10,568.56 10,504.02
06/30/98 10,602.21 10,539.11
07/31/98 10,634.09 10,577.39
08/31/98 10,754.14 10,680.11
09/30/98 10,858.57 10,747.74
10/30/98 10,853.54 10,800.05
11/30/98 10,869.69 10,826.21
12/31/98 10,875.77 10,852.37
01/29/99 10,971.31 10,950.62
02/26/99 10,944.80 10,962.74
03/31/99 10,954.01 10,972.31
04/30/99 10,988.91 11,006.12
05/28/99 10,958.02 10,990.17
06/30/99 10,851.64 10,924.46
07/30/99 10,903.46 10,978.69
08/31/99 10,870.17 10,992.09
09/30/99 10,900.45 11,033.56
10/29/99 10,880.55 11,034.83
11/30/99 10,941.47 11,083.32
12/31/99 10,919.33 11,065.46
01/31/00 10,905.58 11,085.24
02/29/00 10,941.68 11,120.33
03/31/00 11,033.31 11,177.75
04/28/00 11,004.44 11,179.02
05/31/00 10,992.64 11,190.51
06/30/00 11,139.07 11,332.14
07/31/00 11,241.71 11,423.98
08/31/00 11,340.36 11,510.29
09/29/00 11,334.91 11,513.61
10/31/00 11,408.08 11,578.90
11/30/00 11,458.49 11,625.37
12/31/00 11,627.84 11,754.84
01/31/01 11,749.19 11,933.26
02/28/01 11,774.66 11,979.93
03/30/01 11,851.30 12,064.14
04/30/01 11,801.13 12,046.51
05/31/01 11,897.33 12,156.25
06/30/01 11,942.23 12,210.38
07/31/01 12,049.16 12,310.48
08/31/01 12,177.89 12,436.87
09/30/01 12,211.88 12,500.33
10/31/01 12,298.21 12,581.63
11/30/01 12,218.43 12,541.45
12/31/01 12,164.71 12,529.48
01/31/02 12,327.52 12,688.60
02/28/02 12,431.01 12,783.77
03/31/02 12,243.05 12,593.29
04/30/02 12,458.28 12,778.41
05/31/02 12,517.50 12,852.53
06/30/02 12,616.47 12,963.06
07/31/02 12,722.68 13,064.17
08/31/02 12,838.56 13,147.78
09/30/02 13,008.72 13,251.65
10/31/02 12,888.75 13,178.76
11/30/02 12,856.91 13,182.72
12/31/02 13,040.07 13,372.55
01/31/03 13,060.21 13,415.34
02/28/03 13,180.12 13,501.20
03/31/03 13,177.74 13,485.00
04/30/03 13,230.22 13,521.41
05/31/03 13,414.27 13,625.52
06/30/03 13,369.95 13,603.72
07/31/03 13,109.52 13,481.29
08/31/03 13,199.72 13,550.04
09/30/03 13,449.25 13,753.29
10/31/03 13,385.20 13,688.65
11/30/03 13,425.18 13,702.34
12/31/03 13,471.30 13,731.12
01/31/04 13,524.85 13,779.18
02/29/04 13,649.24 13,896.30
03/31/04 13,610.14 13,858.78
04/30/04 13,431.28 13,718.81
05/31/04 13,374.81 13,665.30
06/30/04 13,396.96 13,689.90
07/31/04 13,489.48 13,789.84
08/31/04 13,631.67 13,934.63
09/30/04 13,661.41 13,949.96
10/31/04 13,692.46 13,989.02
11/30/04 13,636.44 13,921.87
12/31/04 13,707.56 13,976.16
01/31/05 13,726.32 13,958.00
02/28/05 13,694.98 13,916.12
03/31/05 13,600.75 13,870.20
04/30/05 13,695.20 13,940.94
05/31/05 13,733.06 13,966.03
06/30/05 13,764.71 14,037.26
07/31/05 13,732.99 14,004.97
08/31/05 13,771.14 14,051.19
09/30/05 13,803.02 14,058.21
10/31/05 13,771.06 14,037.13
11/30/05 13,809.50 14,049.76
12/31/05 13,841.61 14,098.93
01/31/06 13,815.86 14,129.95
02/28/06 13,854.59 14,141.26
03/31/06 13,828.70 14,115.80
04/30/06 13,854.67 14,139.80
05/31/06 13,900.20 14,189.29
06/30/06 13,867.57 14,163.75
07/31/06 13,972.23 14,260.06
08/31/06 14,077.19 14,372.71
09/30/06 14,182.44 14,438.83
10/31/06 14,228.61 14,482.15
11/30/06 14,268.32 14,532.83
12/31/06 14,241.77 14,529.93
01/31/07 14,215.15 14,529.93
02/28/07 14,388.67 14,628.73
03/31/07 14,368.59 14,671.15
04/30/07 14,408.88 14,700.50
05/31/07 14,381.95 14,699.03
06/30/07 14,354.94 14,710.78
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2007
One Year Five Year Ten Year
Near-Term Tax Free Fund 3.51% 2.61% 3.68%
----------------------------------------------------------------------
Lehman 3-Year Municipal Bond Index 3.85% 2.56% 3.93%
Performance data quoted above is historical. Past performance is no
guarantee of future results. Current performance may be higher or
lower than the performance data quoted. Investment return and
principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original
cost.
The graph and table do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund
shares.
The Lehman Brothers 3-Year Municipal Bond Index is a total return
benchmark designed for municipal assets. The index includes bonds with
a minimum credit rating of BAA3, are issued as part of a deal of at
least 50 million, have an amount outstanding of at least 5 million and
have a maturity of two to four years. The returns for the index
reflects no deduction for fees, expenses or taxes.
The Adviser has agreed to limit the fund's total operating expenses to
0.45% through November 1, 2007, or until such later date as the
Adviser determines.
11
TAX FREE FUNDS
[Tax Free Fund Graph]
Lehman 10-Year
Municipal
Date Tax Free Fund Bond Index
06/30/97 $ 10,000.00 $ 10,000.00
07/31/97 10,248.12 10,280.93
08/29/97 10,161.15 10,181.25
09/30/97 10,272.17 10,310.33
10/31/97 10,320.70 10,364.95
11/28/97 10,381.33 10,412.95
12/31/97 10,539.06 10,577.30
01/30/98 10,631.20 10,694.62
02/27/98 10,617.39 10,693.89
03/31/98 10,606.99 10,686.54
04/30/98 10,562.57 10,627.76
05/29/98 10,733.96 10,808.51
06/30/98 10,770.81 10,848.19
07/31/98 10,805.22 10,865.58
08/31/98 10,975.40 11,054.42
09/30/98 11,105.40 11,218.77
10/30/98 11,067.85 11,223.67
11/30/98 11,118.97 11,257.23
12/31/98 11,130.69 11,292.25
01/29/99 11,261.11 11,465.17
02/26/99 11,186.59 11,362.30
03/31/99 11,205.71 11,356.42
04/30/99 11,236.87 11,386.79
05/28/99 11,137.63 11,306.95
06/30/99 10,920.05 11,096.80
07/30/99 10,942.24 11,171.26
08/31/99 10,801.96 11,130.11
09/30/99 10,798.24 11,167.58
10/29/99 10,624.06 11,088.71
11/30/99 10,753.78 11,209.95
12/31/99 10,637.67 11,151.66
01/31/00 10,530.14 11,106.10
02/29/00 10,678.25 11,193.30
03/31/00 10,962.25 11,411.04
04/28/00 10,876.52 11,353.73
05/31/00 10,786.60 11,286.37
06/30/00 11,091.47 11,593.02
07/31/00 11,250.33 11,753.85
08/31/00 11,423.50 11,935.62
09/29/00 11,338.04 11,880.98
10/31/00 11,483.94 12,002.53
11/30/00 11,577.00 12,067.21
12/31/00 11,887.03 12,351.58
01/31/01 11,995.73 12,511.03
02/28/01 12,015.78 12,532.02
03/30/01 12,121.26 12,638.87
04/30/01 11,963.96 12,482.29
05/31/01 12,087.43 12,618.16
06/30/01 12,179.88 12,693.20
07/31/01 12,355.18 12,868.12
08/31/01 12,562.80 13,086.22
09/30/01 12,507.36 13,069.08
10/31/01 12,656.64 13,230.39
11/30/01 12,501.66 13,059.14
12/31/01 12,339.93 12,922.22
01/31/02 12,562.05 13,166.45
02/28/02 12,725.36 13,354.73
03/31/02 12,444.13 13,079.62
04/30/02 12,722.88 13,383.07
05/31/02 12,787.76 13,445.97
06/30/02 12,932.73 13,612.70
07/31/02 13,086.70 13,793.75
08/31/02 13,222.04 13,973.07
09/30/02 13,489.26 14,307.03
10/31/02 13,267.30 14,046.64
11/30/02 13,188.75 13,931.46
12/31/02 13,451.01 14,236.56
01/31/03 13,407.69 14,161.10
02/28/03 13,579.08 14,406.09
03/31/03 13,564.95 14,413.29
04/30/03 13,654.37 14,519.95
05/31/03 13,974.68 14,935.22
06/30/03 13,901.24 14,863.53
07/31/03 13,358.38 14,239.26
08/31/03 13,471.91 14,361.72
09/30/03 13,842.13 14,845.71
10/31/03 13,759.02 14,732.88
11/30/03 13,859.04 14,892.00
12/31/03 13,947.05 15,049.85
01/31/04 14,029.75 15,113.06
02/29/04 14,231.46 15,379.05
03/31/04 14,161.82 15,291.39
04/30/04 13,827.21 14,869.35
05/31/04 13,785.41 14,878.27
06/30/04 13,727.64 14,927.37
07/31/04 13,852.64 15,131.87
08/31/04 14,049.72 15,463.26
09/30/04 14,107.98 15,545.22
10/31/04 14,204.17 15,669.58
11/30/04 14,085.90 15,492.51
12/31/04 14,244.84 15,675.33
01/31/05 14,344.19 15,808.57
02/28/05 14,272.36 15,708.97
03/31/05 14,182.86 15,570.73
04/30/05 14,376.48 15,872.80
05/31/05 14,460.70 15,979.15
06/30/05 14,520.56 16,071.83
07/31/05 14,467.57 15,935.22
08/31/05 14,597.48 16,129.63
09/30/05 14,512.17 15,984.46
10/31/05 14,440.86 15,862.98
11/30/05 14,508.83 15,961.33
12/31/05 14,640.62 16,106.58
01/31/06 14,677.88 16,158.12
02/28/06 14,792.46 16,253.45
03/31/06 14,701.67 16,086.04
04/30/06 14,704.10 16,057.09
05/31/06 14,756.53 16,166.28
06/30/06 14,710.03 16,093.53
07/31/06 14,874.57 16,307.57
08/31/06 15,074.21 16,586.43
09/30/06 15,159.53 16,707.51
10/31/06 15,238.93 16,807.76
11/30/06 15,338.53 16,940.54
12/31/06 15,301.06 16,860.92
01/31/07 15,257.20 16,785.05
02/28/07 15,442.10 17,021.71
03/31/07 15,410.56 16,987.67
04/30/07 15,447.28 17,042.03
05/31/07 15,386.30 16,953.41
06/30/07 15,320.01 16,861.86
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2007
One Year Five Year Ten Year
Tax Free Fund 4.15% 3.44% 4.36%
----------------------------------------------------------------------
Lehman 10-Year Municipal Bond Index 4.77% 4.37% 5.36%
Performance data quoted above is historical. Past performance is no
guarantee of future results. Current performance may be higher or
lower than the performance data quoted. Investment return and
principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original
cost.
The graph and table do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund
shares.
The Lehman Brothers 10-Year Municipal Bond Index is a total return
benchmark designed for long-term municipal assets. The index includes
bonds with a minimum credit rating of BAA3, are issued as part of a
deal of at least 50 million, have an amount outstanding of at least 5
million and have a maturity of 8 to 12 years. The returns for the
index reflects no deduction for fees, expenses or taxes.
The Adviser has agreed to limit the fund's total operating expenses to
0.70% through November 1, 2007, or until such later date as the
Adviser determines.
PERFORMANCE COMMENTARY
Over the past 12 months, Near-Term Tax Free Fund posted a 3.51
percent return, while the Tax Free Fund returned 4.15 percent.
Near-Term Tax Free underperformed its benchmark, the Lehman 3-year
municipal index, which returned 3.85 percent. The Tax Free Fund
underperformed its benchmark, the Lehman 10-year municipal index,
which returned 4.77 percent. While underperforming their benchmarks,
both funds outperformed their respective Lipper peer groups over the
past year. The underperformance for the Near-Term Tax Free Fund was
primarily driven by fund maturity preferences, as the fund
maintained a longer average maturity than the benchmark. This
strategy was beneficial during the first
12
TAX FREE FUNDS
six months, when longer-term securities generally outperformed, but
between January and June 2007 this strategy underperformed the
benchmark. The Tax Free Fund maintained a maturity profile that was
less risky from a maturity and credit standpoint than the benchmark,
but underperformed as a result.
THE YEAR IN REVIEW - ECONOMIC AND POLITICAL ISSUES THAT AFFECTED THE
FUNDS
Municipals rallied strongly during the second half of 2006 as the
Federal Reserve had just ended its tightening campaign and
expectations began to build for a rate cut. The first half of 2007 was
virtually the opposite, with rising yields and a reversal of Fed
expectations. The municipal yield curve, while somewhat volatile over
the past year, ended little changed from a year ago. Bond yields were
primarily driven by changes in the market's expectations for the
direction of interest rates. In the municipal market, the
best-performing sector was the industrial development sector, which is
leveraged to volatile tobacco-backed municipals, which significantly
outperformed. The hospital and transportation sectors also posted
strong relative performance during this time. The high-yield portion
of the municipal market, which is tied to airline-backed municipal
bonds, also posted very strong returns. The housing and electric
utility sectors were relative underperformers over the past year.
INVESTMENT HIGHLIGHTS
STRENGTHS
* The Near-Term Tax Free Fund maintained very little exposure to the
underperforming utility and housing sectors.
* The Tax Free Fund was significantly overweight in the
medical/hospital sector, which outperformed during the past year.
* Over the past year, the Tax Free Fund emphasized an
income-generation approach to total returns, which fared well in a
volatile environment.
WEAKNESSES
* Both funds were underweighted in California and Puerto Rico
municipals, which outperformed.
* The lack of exposure to risky airline- and tobacco-backed bonds
was detrimental to performance as these two sectors were strong
performers over the past year.
13
TAX FREE FUNDS
* The funds' conservative credit profile detracted from performance,
as lower-rated, non-investment-grade credits outperformed.
CURRENT OUTLOOK
OPPORTUNITIES
* Inflation has been trending lower and may open a window of
opportunity for the Fed to lower interest rates by late 2007.
* With the strong outperformance of high-yield-related securities,
odds favor a reversal, with higher-quality credits outperforming
over the next year.
THREATS
* Central banks are currently embarked on a global tightening
campaign to fight inflation. The Fed may be forced to join if
inflation begins to reaccelerate.
* A stronger-than-expected global economy could pose a threat,
especially to long-dated municipals.
14
TAX FREE FUNDS
NEAR-TERM TAX FREE FUND
MUNICIPAL BOND RATINGS
(BASED ON TOTAL MUNICIPAL BONDS) June 30, 2007
[Pie Chart]
BBB 1.78%
BB 1.04%
AAA 60.16%
AA 30.30%
A 6.72%
TAX FREE FUND
MUNICIPAL BOND RATINGS
(BASED ON TOTAL MUNICIPAL BONDS) June 30, 2007
[Pie Chart]
BBB 6.73%
AAA 56.93%
AA 19.93%
A 16.41%
15
ALL AMERICAN EQUITY FUND
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The principal objective of the All American Equity Fund is to seek
capital appreciation by investing primarily in a broadly diversified
portfolio of domestic common stocks. The fund invests in
large-capitalization stocks, while retaining the flexibility to seek
out promising individual stock opportunities. The fund seeks capital
appreciation and does not emphasize income.
PERFORMANCE GRAPH
ALL AMERICAN EQUITY FUND
[All American Equity Fund Graph]
All American S&P
Date Equity Fund 500 Index
06/30/97 $ 10,000.00 $ 10,000.00
07/31/97 10,612.64 10,795.68
08/29/97 10,067.01 10,190.88
09/30/97 10,526.80 10,749.00
10/31/97 10,203.64 10,390.02
11/28/97 10,606.79 10,871.00
12/31/97 10,774.77 11,057.69
01/30/98 10,986.17 11,180.00
02/27/98 11,672.40 11,986.36
03/31/98 12,212.93 12,600.16
04/30/98 12,398.76 12,726.93
05/29/98 12,219.45 12,508.18
06/30/98 12,730.98 13,016.25
07/31/98 12,691.61 12,877.64
08/31/98 11,028.05 11,015.83
09/30/98 11,729.24 11,721.51
10/30/98 12,469.31 12,674.96
11/30/98 13,248.84 13,443.16
12/31/98 13,882.27 14,217.83
01/29/99 14,376.38 14,812.36
02/26/99 13,943.19 14,352.01
03/31/99 14,301.58 14,926.21
04/30/99 14,654.54 15,504.24
05/28/99 14,413.58 15,138.13
06/30/99 15,211.81 15,978.25
07/30/99 14,698.86 15,479.33
08/31/99 14,508.63 15,402.75
09/30/99 14,065.66 14,980.50
10/29/99 14,912.86 15,928.48
11/30/99 15,130.62 16,252.28
12/31/99 15,910.46 17,209.48
01/31/00 15,115.97 16,344.83
02/29/00 14,791.27 16,035.43
03/31/00 16,090.77 17,604.16
04/28/00 15,693.17 17,074.52
05/31/00 15,243.70 16,724.20
06/30/00 15,626.09 17,136.51
07/31/00 15,207.60 16,868.59
08/31/00 16,217.52 17,916.37
09/29/00 15,010.46 16,970.51
10/31/00 14,463.99 16,898.76
11/30/00 12,843.89 15,566.47
12/31/00 12,918.01 15,642.66
01/31/01 13,028.42 16,197.65
02/28/01 11,442.93 14,720.72
03/30/01 10,631.19 13,788.15
04/30/01 11,612.94 14,859.64
05/31/01 11,546.61 14,959.19
06/30/01 11,256.95 14,595.11
07/31/01 11,000.30 14,451.43
08/31/01 10,172.85 13,546.75
09/30/01 9,721.95 12,452.81
10/31/01 9,837.05 12,690.28
11/30/01 10,430.29 13,663.70
12/31/01 10,456.85 13,783.40
01/31/02 10,102.68 13,582.26
02/28/02 9,854.76 13,320.32
03/31/02 10,306.33 13,821.29
04/30/02 9,792.78 12,983.33
05/31/02 10,478.99 12,887.68
06/30/02 9,385.49 11,969.69
07/31/02 8,145.89 11,036.60
08/31/02 8,296.42 11,109.06
09/30/02 7,565.94 9,901.74
10/31/02 7,942.25 10,773.25
11/30/02 7,973.24 11,407.36
12/31/02 7,676.62 10,737.20
01/31/03 7,574.80 10,455.92
02/28/03 7,450.84 10,299.04
03/31/03 7,561.52 10,399.03
04/30/03 8,132.61 11,255.61
05/31/03 8,495.64 11,848.63
06/30/03 8,477.93 11,999.79
07/31/03 8,686.00 12,211.36
08/31/03 8,982.62 12,449.51
09/30/03 8,858.66 12,317.30
10/31/03 9,522.73 13,014.08
11/30/03 9,863.62 13,128.59
12/31/03 10,080.54 13,817.12
01/31/04 10,111.53 14,070.73
02/29/04 10,244.35 14,266.30
03/31/04 10,169.09 14,051.08
04/30/04 9,597.99 13,830.50
05/31/04 9,717.52 14,020.29
06/30/04 9,974.29 14,292.92
07/31/04 9,407.62 13,819.87
08/31/04 9,385.49 13,875.77
09/30/04 9,677.68 14,026.05
10/31/04 9,823.77 14,240.33
11/30/04 10,417.01 14,816.51
12/31/04 10,589.66 15,320.70
01/31/05 10,337.32 14,947.26
02/28/05 10,713.62 15,261.81
03/31/05 10,536.54 14,991.55
04/30/05 10,173.51 14,707.22
05/31/05 10,585.24 15,175.19
06/30/05 10,833.15 15,196.73
07/31/05 11,253.73 15,761.88
08/31/05 11,227.17 15,618.06
09/30/05 11,705.30 15,744.56
10/31/05 11,351.13 15,482.08
11/30/05 11,833.68 16,067.65
12/31/05 11,846.88 16,073.25
01/31/06 12,955.55 16,498.83
02/28/06 12,444.20 16,543.60
03/31/06 13,073.20 16,749.52
04/30/06 13,353.76 16,974.43
05/31/06 12,548.28 16,485.89
06/30/06 12,484.93 16,508.23
07/31/06 12,322.02 16,610.07
08/31/06 12,398.95 17,005.27
09/30/06 12,263.20 17,443.50
10/31/06 12,711.19 18,011.91
11/30/06 13,371.86 18,354.42
12/31/06 13,139.06 18,611.89
01/31/07 13,332.36 18,893.37
02/28/07 13,311.46 18,523.84
03/31/07 13,562.23 18,731.03
04/30/07 14,121.22 19,560.72
05/31/07 14,748.14 20,243.29
06/30/07 14,930.99 19,906.99
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2007
One Year Five Year Ten Year
All American Equity Fund 19.59% 9.72% 4.09%
----------------------------------------------------------------------
S&P 500 Index 20.59% 10.70% 7.13%
Performance data quoted above is historical. Past performance is no
guarantee of future results. Current performance may be higher or
lower than the performance data quoted. Investment return and
principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original
cost.
The graph and table do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund
shares.
The S&P 500 Index is a widely recognized capitalization-weighted index
of 500 common stock prices in U.S. companies. The returns for the
index reflects no deduction for fees, expenses or taxes.
The Adviser has agreed to limit the fund's total operating expenses to
1.75% through November 1, 2007, or until such later date as the
Adviser determines.
16
ALL AMERICAN EQUITY FUND
YEAR IN REVIEW - ECONOMIC AND POLITICAL ISSUES THAT AFFECTED THE
FUND
The federal funds rate remains 5.25 percent, unchanged since June
2006. Economic reports have not been clear whether the U.S. economy
is growing or on the verge of a recession.
On the question of decoupling, it has become apparent that the world
economies have grown stronger as the U.S. economy has slowed
slightly. The emerging markets, in particular, have shown an
acceleration in growth over the past 12 months.
Oil prices averaged $64 per barrel over the last 12 months but
finished the time period at $71. The price range for oil over the
last 12 months has been $50 to $77. Oil prices remain the biggest
threat to economic growth in the U.S.
The yield on the 10-year Treasury note actually fell from 5.16
percent at the start of the time period to 5.06 percent 12 months
later.
All sectors delivered a positive return during the 12 months, with
the cyclical sectors dominating. Materials, energy and technology
were all near the top of the list. The market mostly moved upward
during the time period, except for a slight correction at the end of
February brought about by a sharp sell-off in the Chinese stock
market.
INVESTMENT HIGHLIGHTS
OVERVIEW
The fund returned 19.59 percent for the 12-month time period,
compared to a 20.59 percent return for the benchmark S&P 500 Index.
The fund was overweight in the materials sector during the time
period. At first, most of this was in gold, and gold was the
worst-performing industry in the time period. A reallocation into
fertilizer stocks provided a positive return to the fund, as this
group was the third-best performer over the twelve months. The
overweight position in technology contributed to fund performance.
Most of this was in computer hardware, which was the sixth-best
performer.
The underperformance of the fund during the 12 months can be
attributed to the exposure to gold, with much of that
underperformance occurring in the first three months of the fiscal
year.
17
ALL AMERICAN EQUITY FUND
STRENGTHS
* Telecom, materials, energy and technology were the best-performing
sectors in the S&P 500. The fund was overweight in all of these
sectors during the course of the year, which helped the fund's
performance.
* The best-performing industry groups were tires and rubber,
diversified metals and mining, and fertilizer and agricultural
chemicals. The fund's primary focus among these groups was on
fertilizer stocks such as Terra Industries, Inc.(1)
* Stocks in the fund that were significant contributors to the
fund's performance included Terra Industries, Inc.,(1) Apple
Computer, Inc.,(2) WellCare Health Plans, Inc.(3) and Holly
Corp.(4)
WEAKNESSES
* The worst-performing sectors were financials and consumer staples.
Although the fund was underweight in these sectors, the stocks
held by the fund in those sectors underperformed, which negatively
impacted relative performance.
* The weakest performing industries were gold, agricultural products
and homebuilders. The fund had exposure to Goldcorp, Inc.(5)
warrants during most of the time period; this security was the
worst contributor to fund performance.
* In terms of sector bets, the fund was underweight the
best-performing telecom sector and overweight the industrials
sector, which was a relative underperformer.
18
ALL AMERICAN EQUITY FUND
SECTOR WEIGHTINGS--ALL AMERICAN EQUITY FUND AND S&P 500 INDEX
(AS OF JUNE 30, 2007 IN %)
ALL AMERICAN EQUITY S&P 500 OVER
FUND INDEX (UNDER)
% WEIGHTS % WEIGHTS % WEIGHT
SECTORS ------------------- --------- --------
Technology 19.09 15.45 3.64
Industrials 17.31 11.43 5.88
Consumer 16.08 19.49 (3.41)
Energy 12.58 10.79 1.79
Financials 9.09 20.78 (11.69)
Materials 9.13 3.12 6.01
Health Care 8.00 11.67 (3.67)
Telecom 1.82 3.75 (1.93)
Utilities 0.00 3.52 (3.52)
Cash Equivalent and
Other 6.90 0.0 6.90
------ ------ ------
TOTAL 100.00 100.00 0.00
====== ====== ======
Looking at the fund from a macro perspective, the fund generally made
the right sector bets by being overweight materials, energy and
technology. Because there appeared to be little evidence of a slowdown
in the emerging markets, the belief was these sectors would benefit
from continued global growth. What hurt the fund was that the primary
bet in the materials sector early on was in the gold group, and gold
was a significant underperformer during the time period. The fund was
underweight the financial sector, as these stocks were neither cheap
enough to buy nor was their EPS growth outlook compelling enough. The
consumer staples sector was just too expensive to own, given
single-digit EPS growth.
With growth around the world stronger than expected, the stock
markets are hitting new highs. The fund appears to be properly
positioned to benefit from this global growth.
FUND METRICS, FISCAL YEAR ENDED JUNE 30, 2007
- ----------------------------------------------------------------------------
P/E TO
RETURN ON GROWTH AVERAGE
REVENUE EARNINGS EQUITY - RATIO - MARKET
GROWTH GROWTH ROE PEG CAPITALIZATION
- ----------------------------------------------------------------------------
All American Equity $32.3
Fund 26% 32% 21.6% 1.2x Billion
- ----------------------------------------------------------------------------
$102.7
S&P 500 Index 11% 14% 18.7% 1.3x Billion
- ----------------------------------------------------------------------------
19
- ----------------------------------------------------------------------
ALL AMERICAN EQUITY FUND
- ----------------------------------------------------------------------
As of June 30, 2007, the average revenue growth in the last 12
months for the stocks in the fund was 26 percent, compared to 11
percent for the stocks in the S&P 500 Index. The high relative
growth also applies to earnings of the stocks in the fund, which on
average grew 32 percent year-over-year over the last 12 months, as
compared to 14 percent for the S&P 500 Index. The fund's holdings
also exhibit stronger return on equity, which demonstrates the
quality companies that we invest in. Despite these higher growth
rates, the price-to-projected-earnings-per-share growth rate (PEG
ratio) is lower than that of the S&P 500 Index.
The fund employed a new model that emphasized return on equity in
addition to consistent earnings and revenue growth. This should
result in a lower level of turnover compared to past years.
CURRENT OUTLOOK
OPPORTUNITIES
* The Presidential Election Cycle finds that historically the third
year of a president's term is best for stock markets, and 2007 has
stayed true to that long-term trend through June. This cycle could
be a positive for the remainder of 2007.
* The global infrastructure build-out taking place should continue
to be positive for commodities such as steel, copper, aluminum as
well as energy commodities.
THREATS
* Stocks are not cheap on a historical basis and with peak
profitability behind us, further multiple expansion may be hard to
achieve.
* Rising energy and food prices could crimp consumer spending and
slow economic growth in the U.S.
* Trade could become an issue due to record trade deficits and a
more confrontational Congress.
(1)This security comprised 2.71% of the total net assets of the fund
as of June 30, 2007.
(2)This security comprised 3.12% of the total net assets of the fund
as of June 30, 2007.
(3)This security comprised 0.77% of the total net assets of the fund
as of June 30, 2007.
(4)This security comprised 3.16% of the total net assets of the fund
as of June 30, 2007.
(5)The fund did not hold this security as of June 30, 2007. However,
options of this issuer comprised 0.83% of the total net assets of
the fund as of June 30, 2007.
20
ALL AMERICAN EQUITY FUND
TOP 10 EQUITY HOLDINGS BASED ON TOTAL INVESTMENTS June 30, 2007
HOLLY CORP. 3.14%
OIL & GAS REFINING & MARKETING
---------------------------------------------------------------
APPLE COMPUTER, INC. 3.10%
COMPUTERS
---------------------------------------------------------------
MASTERCARD, INC. 2.81%
FINANCIAL SERVICES
---------------------------------------------------------------
TERRA INDUSTRIES, INC. 2.69%
CHEMICALS & ALLIED PRODUCTS
---------------------------------------------------------------
MORGAN STANLEY 2.13%
FINANCIAL SERVICES
---------------------------------------------------------------
CATERPILLAR, INC. 1.99%
MACHINERY
---------------------------------------------------------------
GENERAL CABLE CORP. 1.92%
WIRE & CABLE PRODUCTS
---------------------------------------------------------------
CORRECTIONS CORPORATION OF AMERICA 1.87%
PRIVATE CORRECTIONS
---------------------------------------------------------------
CROCS, INC. 1.82%
APPAREL
---------------------------------------------------------------
CISCO SYSTEMS, INC. 1.77%
NETWORKING PRODUCTS
---------------------------------------------------------------
TOTAL TOP TEN HOLDINGS 23.24%
PORTFOLIO PROFILE June 30, 2007
Country Distribution* % of Investments
---------------------------------------------------------------
United States 89.05%
---------------------------------------------------------------
Canada 5.96%
---------------------------------------------------------------
Other Foreign 4.99%
---------------------------------------------------------------
* Country distribution shown is based on domicile and the
locale of company operations may be different.
21
CHINA REGION OPPORTUNITY FUND
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The China Region Opportunity Fund seeks capital appreciation by
focusing on the economic growth in the greater China region,
including China, Hong Kong, Singapore, Korea, Taiwan and other East
Asian countries. The fund emphasizes a long-term growth approach
over current income.
PERFORMANCE GRAPH
CHINA REGION OPPORTUNITY FUND
[China Region Opportunity Fund Graph]
Morgan Stanley
China Region Capital Far East
Opportunity Free ex
Date Fund Japan Index*
06/30/97 $ 10,000.00 $ 10,000.00
07/31/97 10,744.19 10,029.80
08/29/97 10,872.09 8,168.80
09/30/97 10,255.81 8,095.86
10/31/97 7,790.70 6,107.32
11/28/97 7,034.88 5,709.18
12/31/97 6,798.84 5,441.26
01/30/98 5,310.13 4,971.84
02/27/98 6,787.12 6,102.60
03/31/98 6,787.12 5,942.41
04/30/98 6,236.17 5,319.29
05/29/98 5,532.85 4,481.05
06/30/98 4,794.35 3,980.49
07/31/98 4,055.86 3,859.91
08/31/98 3,340.81 3,252.58
09/30/98 4,055.86 3,594.86
10/30/98 4,606.80 4,569.01
11/30/98 4,747.46 4,976.87
12/31/98 4,536.47 5,039.28
01/29/99 3,969.41 4,867.34
02/26/99 3,945.78 4,772.77
03/31/99 4,371.07 5,292.07
04/30/99 5,280.73 6,507.38
05/28/99 5,150.78 6,206.10
06/30/99 6,592.05 7,271.92
07/30/99 6,261.27 6,980.69
08/31/99 6,296.71 7,087.65
09/30/99 5,965.92 6,514.02
10/29/99 5,906.86 6,820.65
11/30/99 6,544.80 7,494.86
12/31/99 7,064.60 8,032.65
01/31/00 7,100.04 7,849.64
02/29/00 7,572.59 7,428.03
03/31/00 7,867.93 7,760.98
04/28/00 7,064.60 7,119.93
05/31/00 6,686.56 6,532.05
06/30/00 7,218.18 6,827.12
07/31/00 7,253.62 6,573.00
08/31/00 7,100.04 6,483.97
09/29/00 6,509.36 5,726.97
10/31/00 5,930.48 5,273.48
11/30/00 5,611.51 5,004.66
12/29/00 5,730.83 4,990.18
01/31/01 5,970.11 5,657.60
02/28/01 5,671.01 5,380.12
03/30/01 5,623.15 4,790.82
04/30/01 5,850.47 4,798.05
05/31/01 6,041.90 4,751.07
06/30/01 5,886.37 4,643.12
07/31/01 5,395.84 4,457.92
08/31/01 4,977.09 4,377.63
09/30/01 4,414.77 3,675.56
10/31/01 4,582.27 3,859.45
11/30/01 4,905.30 4,385.19
12/31/01 4,977.09 4,781.29
01/31/02 5,096.73 4,973.86
02/28/02 5,036.91 4,981.62
03/31/02 5,288.16 5,333.63
04/30/02 5,431.73 5,396.71
05/31/02 5,419.76 5,272.87
06/30/02 5,240.30 4,982.49
07/31/02 4,893.34 4,790.19
08/31/02 4,713.88 4,676.03
09/30/02 4,319.06 4,136.27
10/31/02 4,354.95 4,356.00
11/30/02 4,558.34 4,569.76
12/31/02 4,366.92 4,252.96
01/31/03 4,498.52 4,303.13
02/28/03 4,498.52 4,091.89
03/31/03 4,307.10 3,895.75
04/30/03 4,331.03 4,019.15
05/31/03 4,821.56 4,346.97
06/30/03 4,989.05 4,591.97
07/31/03 5,455.66 4,974.78
08/31/03 5,874.40 5,326.01
09/30/03 6,065.83 5,338.95
10/31/03 7,106.71 5,787.43
11/30/03 7,310.10 5,694.85
12/31/03 7,910.00 5,987.01
01/31/04 7,958.23 6,373.85
02/29/04 8,404.37 6,602.97
03/31/04 8,127.04 6,453.68
04/30/04 7,307.10 6,062.53
05/31/04 7,270.93 5,895.96
06/30/04 7,065.94 5,828.52
07/31/04 6,993.59 5,654.10
08/31/04 7,053.88 5,929.81
09/30/04 7,536.20 6,121.46
10/31/04 7,548.26 6,143.64
11/30/04 8,030.58 6,664.70
12/31/04 8,243.00 6,839.12
01/31/05 7,971.52 6,878.61
02/28/05 8,699.57 7,263.17
03/31/05 8,428.10 6,908.60
04/30/05 8,280.02 6,820.97
05/31/05 8,168.96 6,950.60
06/30/05 8,477.46 7,093.95
07/31/05 8,785.95 7,528.34
08/31/05 8,736.59 7,254.26
09/30/05 9,217.84 7,602.33
10/31/05 8,662.55 7,121.49
11/30/05 9,057.43 7,621.98
12/31/05 9,782.81 8,060.56
01/31/06 10,807.92 8,623.02
02/28/06 10,681.36 8,591.17
03/31/06 11,428.04 8,670.44
04/30/06 12,200.04 9,273.94
05/31/06 11,390.08 8,613.97
06/30/06 11,023.06 8,542.27
07/31/06 10,909.16 8,522.83
08/31/06 11,010.41 8,732.63
09/30/06 11,200.24 8,973.52
10/31/06 11,567.25 9,202.71
11/30/06 12,440.49 9,926.09
12/31/06 13,483.57 10,355.34
01/31/07 13,277.91 10,173.55
02/28/07 13,072.25 10,248.46
03/31/07 13,432.16 10,448.94
04/30/07 13,972.01 10,806.76
05/31/07 15,180.27 11,375.01
06/30/07 16,131.44 11,974.48
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2007
One Year Five Year Ten Year
China Region Opportunity Fund 46.34% 25.20% 4.90%
-----------------------------------------------------------------------
Hang Seng Composite Index 46.08% 23.33% n/a
-----------------------------------------------------------------------
Morgan Stanley Capital Far East Free ex
Japan Index* 40.18% 19.15% 1.82%
<FN>
* These are not total returns. These returns reflect simple
appreciation only and do not reflect dividend reinvestment.
</FN>
Performance data quoted above is historical. Past performance is no
guarantee of future results. Current performance may be higher or lower
than the performance data quoted. Investment return and principal value
of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
The graph and table do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund
shares.
The Hang Seng Composite Index is a market-capitalization weighted index
that comprises the top 200 companies listed on The Stock Exchange of
Hong Kong, based on average market capitalization for the twelve
months. The index commenced January 2000; it is not included in the
graph as it had less than ten years of data. The Morgan Stanley Capital
Far East Free ex Japan Index is an index in a series representing both
the developed and the emerging markets for a particular region. The
returns for the indexes reflect no deduction for fees, expenses or
taxes.
22
CHINA REGION OPPORTUNITY FUND
YEAR IN REVIEW - ECONOMIC AND POLITICAL ISSUES THAT AFFECTED THE
FUND
China's GDP growth accelerated to 11.1 percent in the first quarter
of 2007 from 10.7 percent for all of 2006, and in the second quarter
of 2007 that growth rate was nearly 12 percent. There are no signs
that the Chinese economy is on the verge of a slowdown.
Fixed Asset Investment averaged 27 percent growth, although that
rate slowed slightly as the government encouraged banks to lend less
money to certain industries. Fixed Asset Investment includes
infrastructure spending, which creates demand for commodities. The
fund has several stocks tied to commodities and construction.
Interest rates (as measured by the one-year lending rate) were
raised from 5.85 percent to 6.39 percent, and the deposit reserve
ratio was raised from 7.5 percent to 11.5 percent.
Despite these moves to reduce liquidity within the financial
markets, money supply as measured by M2(1) averaged 17 percent
growth during the time period, one percentage point above the
government target. Of bigger concern was the rise in M1(1) money
supply, which accelerated from 14 percent growth to 21 percent
growth. This meant that people were increasing their cash levels for
stock market investments at the expense of longer term savings that
would show up in M2 figures.
All sectors in the Hang Seng Composite Index (HSCI) delivered a
positive return during the 12 months, with materials, telecom and
energy at the top of the list. The market mostly moved upward during
the time period except for a slight correction at the end of
February brought about by a sharp sell-off in the Chinese stock
market.
INVESTMENT HIGHLIGHTS
OVERVIEW
The fund returned 46.34 percent for the 12-month period, compared to
a 46.08 percent return for the HSCI.
Country allocation impacted the fund in the first six months of the
time period. During that time, the fund had less exposure to China
stocks relative to its peer group. Our models indicated that the
Chinese stocks were overbought and thus we reduced our exposure to
these stocks. This prudent approach impacted fund performance, as
the Chinese stocks continued to run higher without enough of a
pullback to allow the fund to re-establish positions at attractive
levels. In the second six months, there
23
CHINA REGION OPPORTUNITY FUND
was some profit-taking in the China stocks and the bullish sentiment
spread to other markets in Asia. These markets included Korea,
Singapore and Malaysia. Over the last six months, the fund's relative
performance improved significantly as lagging markets started to
outperform the China stocks.
Given the valuation difference among markets in Asia, the fund has
benefited from the rotation into the Korea, Singapore and Malaysian
markets. In addition, the sell-off in some China stocks has allowed
the fund to increase its exposure to that market.
STRENGTHS
* The best-performing country was China (Red Chips and H Shares in
Hong Kong), followed by Malaysia and Singapore. The fund cannot
invest in China's A-share market and the B-share market is
illiquid, so the fund will be underweight in China in comparison
to the HSCI most of the time. Even so, the exposure the fund did
have to these markets contributed positively to performance.
* The oil and resources sector and the telecom sector were the best-
performing sectors in the Hang Seng Composite Index. China
National Building Material Co., Ltd.,(2) China Mobile Ltd.,(3)
China Petroleum & Chemical Corp.,(4) Silvercorp Metals, Inc.,(5)
PetroChina Co., Ltd.(6) and CNOOC Ltd.(7) are top ten holdings
that provided exposure to these sectors.
* Stocks in the fund that were significant contributors to the
fund's performance included China Life Insurance Co., Ltd.,(8)
China Mobile Ltd.,(3) China National Building Material Co.
Ltd.,(2) and Angang Steel Co., Ltd.(9)
WEAKNESSES
* The worst-performing countries were Thailand, South Korea and
Taiwan. The fund had no exposure to Thailand, but it had exposure
to South Korea and Taiwan.
* The worst-performing sectors in the HSCI were industrial goods,
conglomerates and financials. While financials as a sector did not
perform, China bank stocks as subset did outperform during the
period. Since the fund did not have exposure to China bank stocks,
the fund missed this opportunity.
* In terms of sector bets, the fund was underweight in the telecom
sector, the second-best performer, and overweight in other
countries in the region that underperformed relative to the China
stocks.
24
CHINA REGION OPPORTUNITY FUND
SECTOR WEIGHTINGS--CHINA REGION OPPORTUNITY FUND
AND HANG SENG COMPOSITE INDEX
(AS OF JUNE 30, 2007)
CHINA REGION HANG SENG
OPPORTUNITY COMPOSITE OVER
FUND INDEX (UNDER)
% WEIGHTS % WEIGHTS % WEIGHT
SECTORS ------------ --------- --------
Industrials 25.43 21.60 3.83
Oil & Resources 22.66 10.09 12.57
Consumer 18.93 8.70 10.23
Financial 17.49 45.43 (27.94)
Technology 3.33 2.69 0.64
Telecom 3.15 11.49 (8.34)
Cash Equivalent 9.01 0.00 9.01
------ ------ ------
TOTAL 100.00 100.00 0.00
====== ====== ======
PORTFOLIO PROFILE June 30, 2007
Country Distribution* % of Investments
---------------------------------------------------------------
People's Republic of China 33.37%
---------------------------------------------------------------
Hong Kong 26.63%
---------------------------------------------------------------
United States 9.50%
---------------------------------------------------------------
Korea, Republic Of 7.82%
---------------------------------------------------------------
Canada 6.24%
---------------------------------------------------------------
Taiwan 6.05%
---------------------------------------------------------------
Singapore 5.28%
---------------------------------------------------------------
Malaysia 2.99%
---------------------------------------------------------------
Other Foreign 2.12%
---------------------------------------------------------------
* Country distribution shown is based on domicile and not
intended to conform to the China region definition in the
prospectus.
25
CHINA REGION OPPORTUNITY FUND
From a macro perspective, the fund generally made the right sector
bets by being overweight materials, energy and technology. There
appeared to be little evidence of a slowdown in the emerging
markets, so these sectors would benefit from continued global
growth. Country allocation impacted performance, as the fund was
underweight the China stocks. The fund sold down these stocks as
they became extended and moved into less expensive countries that
had lagged.
Having re-established positions in the China stocks during down
periods and with the bull market spreading to other lagging
countries in the region, the fund appears to be well positioned for
continued growth in the China region.
The level of turnover in the fund is a function of the volatility in
the region's markets. A return-on-capital criteria has been
implemented that should help to reduce fund turnover going forward
as it is a more stable measure than earnings growth or revenue
growth.
CURRENT OUTLOOK
OPPORTUNITIES
* The economies in Asia seem to have successfully de-coupled from
the U.S. economy. A slowdown in the U.S. should not have a
negative impact on growth in the region.
* The global infrastructure build-out taking place should continue
to be positive for commodities such as steel, copper, aluminum and
energy commodities.
THREATS
* Policy action by the Chinese government could negatively impact
growth in the region. A significant hike in lending rates could
slow the economy as well as profit growth.
* Trade could become an issue with the U.S., given record trade
imbalances and a more confrontational Congress.
(1)M1 and M2 are measures of total money supplies. The M1 money
supply includes only checkable demand deposits. M2 includes
everything in M1 and also savings and other time deposits.
(2)This security comprised 3.28% of the total net assets of the fund
as of June 30, 2007.
(3)This security comprised 3.21% of the total net assets of the fund
as of June 30, 2007.
(4)This security comprised 2.36% of the total net assets of the fund
as of June 30, 2007.
26
CHINA REGION OPPORTUNITY FUND
(5)This security comprised 2.25% of the total net assets of the fund
as of June 30, 2007.
(6)This security comprised 1.98% of the total net assets of the fund
as of June 30, 2007.
(7)This security comprised 1.93% of the total net assets of the fund
as of June 30, 2007.
(8)This security comprised 3.06% of the total net assets of the fund
as of June 30, 2007.
(9) The fund did not hold this security as of June 30, 2007.
TOP 10 EQUITY HOLDINGS BASED ON TOTAL INVESTMENTS June 30, 2007
CHINA NATIONAL BUILDING MATERIAL CO., LTD. 3.22%
CONSTRUCTION
---------------------------------------------------------------
CHINA MOBILE LTD. 3.15%
CELLULAR TELECOMMUNICATIONS
---------------------------------------------------------------
CHINA LIFE INSURANCE CO., LTD. 3.01%
INSURANCE
---------------------------------------------------------------
SHANDONG WEIGAO GROUP MEDICAL POLYMER CO., LTD. 2.37%
MEDICAL - PRODUCTS
---------------------------------------------------------------
CHINA PETROLEUM & CHEMICAL CORP. 2.32%
OIL & GAS - INTEGRATED
---------------------------------------------------------------
CHINA MERCHANTS BANK CO., LTD. 2.23%
BANKS
---------------------------------------------------------------
SILVERCORP METALS, INC. 2.21%
SILVER MINING
---------------------------------------------------------------
CHINA COSCO HOLDINGS CO., LTD. 2.14%
TRANSPORTATION
---------------------------------------------------------------
PETROCHINA CO., LTD. 1.94%
OIL & GAS - INTEGRATED
---------------------------------------------------------------
CNOOC LTD. 1.90%
OIL & GAS EXPLORATION & PRODUCTION
---------------------------------------------------------------
TOTAL TOP TEN HOLDINGS 24.49%
27
GLOBAL RESOURCES FUND
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The Global Resources Fund is a diversified natural resources fund
with the principal objective of achieving long-term growth of
capital, while providing protection against inflation and monetary
instability. The fund invests in companies involved in the
exploration, production, transportation and processing of petroleum,
natural gas, industrial commodities, metals, minerals, paper and
forest products. It can invest in any part of the world.
The fund management team implements a dynamic and disciplined
process of analyzing global economic conditions, monitoring
commodity price trends and identifying undervalued equities for
investment in the portfolio. The fund investment strategy also
includes the purchase of equity derivatives, including listed and
non-listed warrants, options and long-term equity anticipation
securities (LEAPs).
PERFORMANCE GRAPH
GLOBAL RESOURCES FUND
[Global Resources Fund Graph]
Global S&P 500 S&P Energy &
Date Resources Fund Index Materials Index
06/30/97 $ 10,000.00 $ 10,000.00 $ 10,000.00
07/31/97 10,845.84 10,795.68 10,732.18
08/29/97 11,446.11 10,190.88 10,363.13
09/30/97 12,455.66 10,749.00 10,890.55
10/31/97 11,800.82 10,390.02 10,402.84
11/28/97 9,904.50 10,871.00 10,313.08
12/31/97 9,392.91 11,057.69 10,247.32
01/30/98 8,277.69 11,180.00 9,837.51
02/27/98 8,466.18 11,986.36 10,494.88
03/31/98 8,450.47 12,600.16 10,978.03
04/30/98 8,230.57 12,726.93 11,371.96
05/29/98 7,492.33 12,508.18 11,030.32
06/30/98 7,021.12 13,016.25 10,801.04
07/31/98 6,471.37 12,877.64 10,099.55
08/31/98 5,434.69 11,015.83 8,911.53
09/30/98 6,015.86 11,721.51 9,953.31
10/30/98 6,235.76 12,674.96 10,139.35
11/30/98 6,062.98 13,443.16 10,301.25
12/31/98 5,775.05 14,217.83 10,114.13
01/29/99 5,489.65 14,812.36 9,527.30
02/26/99 5,439.29 14,352.01 9,524.97
03/31/99 5,976.50 14,926.21 10,574.20
04/30/99 6,966.99 15,504.24 12,413.75
05/28/99 6,631.23 15,138.13 11,928.75
06/30/99 6,731.96 15,978.25 12,186.76
07/30/99 6,748.75 15,479.33 12,236.71
08/31/99 6,664.81 15,402.75 12,242.36
09/30/99 6,429.78 14,980.50 11,790.04
10/29/99 6,295.47 15,928.48 11,749.49
11/30/99 6,312.26 16,252.28 11,855.54
12/31/99 6,614.44 17,209.48 12,263.89
01/31/00 6,396.20 16,344.83 11,689.69
02/29/00 6,043.65 16,035.43 10,878.35
03/31/00 6,698.38 17,604.16 12,001.64
04/28/00 6,597.66 17,074.52 11,774.11
05/31/00 6,933.41 16,724.20 12,492.15
06/30/00 6,513.72 17,136.51 11,695.68
07/31/00 6,396.20 16,868.59 11,531.08
08/31/00 7,101.29 17,916.37 12,215.99
09/29/00 7,084.51 16,970.51 12,129.70
10/31/00 6,815.90 16,898.76 12,309.11
11/30/00 6,480.14 15,566.47 11,980.69
12/31/00 7,319.54 15,642.66 12,996.17
01/31/01 7,084.51 16,197.65 12,622.90
02/28/01 6,966.99 14,720.72 12,507.56
03/30/01 6,866.26 13,788.15 12,207.21
04/30/01 7,487.42 14,859.64 13,463.64
05/31/01 7,403.48 14,959.19 13,690.87
06/30/01 6,731.96 14,595.11 12,871.62
07/31/01 6,463.35 14,451.43 12,729.09
08/31/01 6,228.32 13,546.75 12,400.61
09/30/01 5,825.41 12,452.81 11,401.38
10/31/01 6,211.53 12,690.28 11,740.17
11/30/01 6,261.90 13,663.70 11,849.18
12/31/01 6,329.05 13,783.40 12,207.87
01/31/02 6,345.84 13,582.26 12,115.67
02/28/02 6,698.38 13,320.32 12,681.33
03/31/02 7,319.54 13,821.29 13,404.73
04/30/02 7,772.81 12,983.33 12,734.58
05/31/02 9,350.88 12,887.68 12,991.21
06/30/02 8,276.45 11,969.69 12,889.47
07/31/02 6,429.78 11,036.60 11,309.13
08/31/02 6,748.75 11,109.06 11,302.66
09/30/02 6,614.44 9,901.74 10,186.08
10/31/02 6,177.96 10,773.25 10,550.47
11/30/02 6,412.99 11,407.36 11,206.21
12/31/02 7,454.67 10,737.20 11,067.10
01/31/03 7,883.10 10,455.92 10,703.11
02/28/03 8,037.34 10,299.04 10,777.77
03/31/03 7,763.14 10,399.03 10,874.55
04/30/03 7,746.01 11,255.61 11,147.24
05/31/03 8,654.28 11,848.63 11,925.75
06/30/03 8,808.51 11,999.79 11,871.17
07/31/03 9,236.94 12,211.36 11,949.86
08/31/03 10,402.27 12,449.51 12,582.50
09/30/03 10,950.66 12,317.30 12,195.32
10/31/03 12,767.20 13,014.08 12,606.22
11/30/03 13,778.29 13,128.59 12,728.06
12/31/03 14,876.61 13,817.12 14,351.66
01/31/04 14,563.42 14,070.73 14,273.39
02/29/04 15,329.00 14,266.30 14,944.48
03/31/04 15,729.19 14,051.08 14,793.35
04/30/04 14,198.03 13,830.50 14,755.68
05/31/04 14,215.43 14,020.29 14,923.76
06/30/04 14,598.22 14,292.92 15,694.90
07/31/04 14,667.82 13,819.87 15,965.28
08/31/04 14,702.62 13,875.77 15,946.11
09/30/04 16,807.96 14,026.05 17,070.96
10/31/04 17,312.55 14,240.33 17,113.36
11/30/04 19,487.49 14,816.51 18,247.07
12/31/04 19,400.96 15,320.70 18,071.97
01/31/05 19,530.17 14,947.26 18,250.38
02/28/05 23,406.67 15,261.81 21,068.97
03/31/05 23,129.78 14,991.55 20,371.84
04/30/05 21,357.67 14,707.22 19,187.52
05/31/05 21,597.64 15,175.19 19,375.29
06/30/05 23,388.21 15,196.73 20,060.91
07/31/05 24,938.81 15,761.88 21,195.82
08/31/05 26,600.17 15,618.06 21,744.54
09/30/05 28,833.77 15,744.56 22,716.05
10/31/05 26,341.74 15,482.08 21,265.18
11/30/05 27,264.71 16,067.65 21,996.09
12/31/05 28,901.91 16,073.25 22,273.76
01/31/06 33,614.40 16,498.83 24,750.16
02/28/06 31,531.20 16,543.60 23,268.86
03/31/06 33,917.78 16,749.52 24,217.67
04/30/06 37,174.05 16,974.43 25,345.96
05/31/06 34,908.82 16,485.89 24,538.19
06/30/06 34,827.92 16,508.23 24,909.08
07/31/06 35,009.94 16,610.07 25,526.59
08/31/06 34,666.11 17,005.27 25,083.47
09/30/06 31,450.30 17,443.50 24,601.72
10/31/06 33,493.05 18,011.91 25,831.66
11/30/06 35,839.18 18,354.42 27,685.44
12/31/06 35,313.96 18,611.89 27,387.27
01/31/07 34,742.84 18,893.37 27,412.95
02/28/07 34,957.01 18,523.84 27,224.02
03/31/07 36,384.80 18,731.03 28,544.19
04/30/07 38,883.43 19,560.72 29,756.50
05/31/07 41,405.85 20,243.29 31,754.60
06/30/07 42,119.75 19,906.99 32,089.91
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2007
One Year Five Year Ten Year
Global Resources Fund 20.94% 38.44% 15.46%
-----------------------------------------------------------------------
S&P 500 Index 20.59% 10.70% 7.13%
-----------------------------------------------------------------------
S&P Energy and Materials Index 28.83% 20.00% 12.36%
Performance data quoted above is historical. Past performance is no
guarantee of future results. Current performance may be higher or lower
than the performance data quoted. Investment return and principal value
of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
The graph and table do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund
shares.
The S&P 500 Index is a widely recognized capitalization-weighted index
of 500 common stock prices in U.S. companies. The S&P Energy and
Materials Index is a combination of the S&P Energy Index and the S&P
500 Materials Index calculated on a 70% and 30% weighting,
respectively, with monthly rebalancing of weights. The returns for the
indexes reflect no deduction for fees, expenses or taxes.
28
GLOBAL RESOURCES FUND
PERFORMANCE COMMENTARY
For the fiscal year ending June 30, 2007, the Global Resources Fund
returned 20.94 percent. In comparison, the S&P 500 Energy Index(1)
and the S&P 500 Materials Index(2) returned 28.03 percent and 29.62
percent, respectively. The fund's benchmark is a weighted blend of
these two indices as described in the performance graph on the
previous page. The fund's underperformance was largely due to
suboptimal performance of gold equities over the past 12 months.
Gold equities underperformed gold bullion during the time period.
THE YEAR IN REVIEW - ECONOMIC AND POLITICAL ISSUES THAT AFFECTED THE
FUND
Critical drivers for the year included:
* Another year of strong economic growth, particularly from
developing economies such as China, pushed the demand for
commodities to record levels despite historically high prices. The
S&P GSSI(TM) Natural Resources Index(3) gained 20.5% over the last
year.
* Oil prices remained at elevated levels during the year. OPEC was
reluctant to put oil on the market despite the OPEC crude basket
climbing over $70 per barrel. Additionally, non-OPEC supply growth
expectations for 2007 were reduced as project delays deferred new
production.
* Pension funds and hedge funds increased their exposure to the
commodities market over the past twelve months, as investors
sought higher returns, portfolio diversification and a hedge
against the inflationary effects of a depreciating dollar.
* Resource nationalization and labor strife in the mining industry
threatened or delayed new projects, contributing to already tight
supplies.
Global economic growth over the past year was surprisingly strong.
In April, the International Monetary Fund (IMF) reported that 2006
global GDP growth came in at a very robust 5.4 percent. Emerging
market and developing countries continued to see strong growth due
to benign global financial conditions and high commodity prices.
The Global Resources Fund invested a significant portion of its
assets in the equities of companies domiciled in Canada. Canadian
economic growth slowed through 2006 from a pace of 3.6 percent in
the first calendar quarter of the year to 2.0 percent by January
2007. The Bank of Canada raised its overnight lending rate by a
quarter point four times in the first
29
GLOBAL RESOURCES FUND
five months of 2006 to 4.25 percent, and at the end of the fund's
fiscal year that rate stood at 4.5 percent. The S&P/TSX Composite
Index(4) returned 22.7 percent in the 12 months ending June 30, 2007,
largely due to strong gains in the basic materials sector.
INVESTMENT HIGHLIGHTS
OVERVIEW
The fund maintained its concentration in the energy sector, base
metals and precious metals companies. Through 2006 the fund
increased its weighting in uranium exploration and mining companies
on the expectation of rising uranium prices due to strong demand and
supply constraints. Additionally, the fund added exposure to
agricultural-related sectors, including fertilizers and aquaculture,
to benefit from the growing agribusiness investment theme
characterized by rising soft commodity prices that we believe will
be sustainable into the next decade.
Portfolio turnover declined to 122 percent over the past 12 months,
down from 157 percent in the prior fiscal year because asset flows
in the current year were not as volatile as in the prior year.
STRENGTHS
* Base metal prices gained 16 percent over the 12-month period in
response to strong demand from China and declining global
inventories. The fund is overweight in base metals relative to its
benchmark.
* The S&P/TSX Capped Diversified Metals & Mining Index(5) led all
natural resource sectors with a 63.2 percent gain due to strong
commodity pricing and robust merger and acquisition activity. The
fund is overweight in metals and mining companies relative to its
benchmark.
* Uranium equities contributed to fund performance as spot prices
for the metal gained nearly 200 percent to a record $136 per
pound.
* Oil prices averaged $64 per barrel during the 12 months, and
finished the period close to $71 a barrel, which drove strong
profits for energy companies. The fund's largest sector weighting
is in the energy sector.
* The fund benefited from a core weighting in refining stocks, which
outperformed the S&P 500 Energy Index by 13.5 percentage points.
WEAKNESSES
* The 12-month strip prices for oil and natural gas declined nearly
6 percent over the past year. As a result, independent exploration
and
30
GLOBAL RESOURCES FUND
production (E&P) stocks underperformed the S&P 500 Energy Index by 11
percentage points.
* Exposure to gold stocks negatively affected performance as the
Philadelphia Stock Exchange Gold & Silver Index (XAU)(6) declined
4 percent during the period.
* The fund's positive return during the period was reduced by a 4
percent decline in Canadian oil and gas royalty trusts following
the government's announcement that it will tax existing trusts as
regular corporations in 2011.
* Larger weightings in utilities and basic materials--both of which
returned 25 to 30 percent--would have enhanced performance during
the investment period.
CURRENT OUTLOOK
OPPORTUNITIES
* Global economic growth remains constructive for commodity demand.
The International Monetary Fund expects the global economy to grow
above trend at about 5 percent in 2007 and 2008.
* Despite crude oil prices above $70 a barrel, the International
Energy Agency increased its 2008 demand growth forecast to 2.5
percent, or 1.7 million barrels per day.
* According to the Ministry of Land and Resources, China will use a
portion of the country's $1 trillion foreign currency reserves to
increase the nation's purchases of commodities for strategic
stockpiling.
* The fundamentals for agricultural commodities remain attractive
given emerging market demand for protein, record low wheat
inventories and strong biofuel demand.
THREATS
* China increased interest rates four times in the past 12 months in
an effort to cool accelerating economic growth and restrain
inflation. More interest rate hikes or other monetary and fiscal
measures may be forthcoming as second-quarter GDP increased to
11.9 percent, up from 11.1 percent in the prior quarter.
* U.S. housing starts and building permits, a sign of future
construction and a leading indicator of economic growth, declined
to the lowest levels in five years.
* As commodity prices and profit margins remain at historically high
levels, resource companies may be at risk of punitive legislation
that
31
GLOBAL RESOURCES FUND
could take the form of windfall profit taxes, elimination of tax credits
or higher royalty payments.
* Escalating capital and raw material costs, as well as a shortage
of skilled labor and engineers, threaten to delay or postpone new
resource development projects.
(1)The S&P 500 Energy Index is a capitalization-weighted index that
tracks the companies in the energy sector as a subset of the S&P
500.
(2)The S&P 500 Materials Index is a capitalization-weighted index
that tracks the companies in the material sector as a subset of
the S&P 500.
(3)The S&P GSSIe Natural Resources Index was developed by Goldman
Sachs as an equity benchmark for U.S.-traded natural resource
stocks. It includes companies in the following categories:
extractive industries, energy companies, owners and operators of
timber tracts, forestry services, producers of pulp and paper,
and owners of plantations.
(4)The S&P/TSX Composite Index is a capitalization-weighted index
designed to measure market activity of stocks listed on the
Toronto Stock Exchange.
(5)The S&P/TSX Capped Diversified Metals & Mining Index is a
modified capitalization-weighted index, whose equity weights are
capped 25 percent and index constituents are derived from a
subset stock pool of S&P/TSX Composite Index stocks.
(6)The Philadelphia Stock Exchange Gold & Silver Index (XAU) is a
capitalization-weighted index that includes the leading companies
involved in the mining of gold and silver.
TOP 10 EQUITY HOLDINGS BASED ON TOTAL INVESTMENTS June 30, 2007
MCDERMOTT INTERNATIONAL, INC. 3.45%
OIL & GAS EQUIPMENT & SERVICES
---------------------------------------------------------------
SCHLUMBERGER LTD. 3.15%
OIL & GAS EQUIPMENT & SERVICES
---------------------------------------------------------------
NOBLE CORP. 3.05%
OIL & GAS DRILLING
---------------------------------------------------------------
MARATHON OIL CORP. 2.54%
OIL & GAS - INTEGRATED
---------------------------------------------------------------
WHITE NILE LTD. 2.18%
OIL & GAS EXPLORATION & PRODUCTION - JUNIOR
---------------------------------------------------------------
PETROCHINA CO., LTD. 2.14%
OIL & GAS - INTEGRATED
---------------------------------------------------------------
PETROLEO BRASILEIRO S.A. 2.07%
OIL & GAS - INTEGRATED
---------------------------------------------------------------
CONOCOPHILLIPS 2.06%
OIL & GAS - INTEGRATED
---------------------------------------------------------------
NOBLE ENERGY, INC. 2.02%
OIL & GAS EXPLORATION & PRODUCTION - SENIOR
---------------------------------------------------------------
OCCIDENTAL PETROLEUM CORP. 1.98%
OIL & GAS - INTEGRATED
---------------------------------------------------------------
TOTAL TOP TEN HOLDINGS 24.64%
32
GLOBAL RESOURCES FUND
PORTFOLIO PROFILE June 30, 2007
Country Distribution* % of Investments
---------------------------------------------------------------
United States 45.02%
---------------------------------------------------------------
Canada 34.42%
---------------------------------------------------------------
United Kingdom 4.74%
---------------------------------------------------------------
Australia 2.76%
---------------------------------------------------------------
Brazil 2.44%
---------------------------------------------------------------
People's Republic of China 2.14%
---------------------------------------------------------------
Hong Kong 2.01%
---------------------------------------------------------------
Greece 1.95%
---------------------------------------------------------------
Other Foreign 4.52%
---------------------------------------------------------------
* Country distribution shown is based on domicile and the
locale of company operations may be different.
33
GLOBAL RESOURCES FUND
PORTFOLIO ALLOCATION BY INDUSTRY SECTOR
BASED ON TOTAL INVESTMENTS June 30, 2007
[Pie Chart]
Cash Equivalent 4.5%
Oil & Gas - Integrated 17.9%
Oil & Gas Exploration & Production 16.1%
Oil & Gas Equipment & Services 10.5%
Oil & Gas Drilling 4.5%
Other Energy 2.3%
Metals & Mining 18.8%
Gold 11.7%
General Basic Materials 3.0%
Utilities 5.4%
Other Sectors 5.3%
Energy:
Oil & Gas - Integrated (includes 17.9%
Refining and Marketing)
Oil & Gas Exploration & Production 16.1%
Oil & Gas Equipment & Services 10.5%
Oil & Gas Drilling 4.5%
Other Energy 2.3%
Total Energy 51.3%
Basic Materials:
Metals & Mining (includes Copper, 18.8%
Platinum Group Metals, Zinc, Nickel
and Coal)
Gold (includes Gold Mining, Silver 11.7%
Mining and Gold & Copper Mining)
General Basic Materials 3.0%
Total Basic Materials 33.5%
Utilities 5.4%
Other Sectors 5.3%
Cash Equivalent 4.5%
-----
Total Investments 100.0%
=====
34
GOLD AND PRECIOUS MINERALS FUNDS
MANAGEMENT TEAM'S PERSPECTIVE
INTRODUCTION
The World Precious Minerals Fund and the Gold Shares Fund pursue an
objective of long-term capital growth through investments in gold
and precious-minerals companies. The Gold Shares Fund also pursues
current income as a secondary objective and focuses on the equity
securities of established gold producers. The World Precious
Minerals Fund focuses on the equity securities of companies
principally engaged in the exploration, mining and processing of
precious minerals such as gold, silver, platinum and diamonds.
Although the fund has greater latitude to invest its assets in
different precious minerals, it currently remains focused on the
gold sector.
PERFORMANCE GRAPHS
WORLD PRECIOUS MINERALS FUND
[World Precious Minerals Fund Graph]
World Precious S&P 500 AMEX Gold
Date Minerals Fund Index BUGS Index
06/30/97 $ 10,000.00 $ 10,000.00 $ 10,000.00
07/31/97 9,523.51 10,795.68 9,947.86
08/29/97 9,749.22 10,190.88 9,891.75
09/30/97 10,163.01 10,749.00 10,703.35
10/31/97 8,457.68 10,390.02 8,348.15
11/28/97 6,708.46 10,871.00 6,838.23
12/31/97 7,077.74 11,057.69 6,590.83
01/30/98 7,687.13 11,180.00 6,689.52
02/27/98 7,280.87 11,986.36 6,878.99
03/31/98 7,776.00 12,600.16 7,506.04
04/30/98 8,099.73 12,726.93 8,095.64
05/29/98 6,950.79 12,508.18 6,815.38
06/30/98 6,258.88 13,016.25 6,262.64
07/31/98 5,820.89 12,877.64 5,586.67
08/31/98 4,551.34 11,015.83 4,191.79
09/30/98 6,284.27 11,721.51 6,147.50
10/30/98 6,201.75 12,674.96 5,762.65
11/30/98 5,789.15 13,443.16 5,392.92
12/31/98 5,961.81 14,217.83 4,668.72
01/29/99 5,707.57 14,812.36 4,644.98
02/26/99 5,586.81 14,352.01 4,593.22
03/31/99 5,472.41 14,926.21 4,424.56
04/30/99 6,127.06 15,504.24 5,352.75
05/28/99 5,008.43 15,138.13 4,556.84
06/30/99 4,951.22 15,978.25 4,840.78
07/30/99 4,671.57 15,479.33 4,641.33
08/31/99 4,868.60 15,402.75 4,888.64
09/30/99 6,133.42 14,980.50 5,996.11
10/29/99 5,504.19 15,928.48 5,520.00
11/30/99 5,262.66 16,252.28 5,214.83
12/31/99 5,205.46 17,209.48 5,134.37
01/31/00 4,620.72 16,344.83 4,565.66
02/29/00 4,696.99 16,035.43 4,664.76
03/31/00 4,341.06 17,604.16 4,319.65
04/28/00 4,124.96 17,074.52 4,091.28
05/31/00 3,997.84 16,724.20 3,964.79
06/30/00 4,086.83 17,136.51 4,051.33
07/31/00 3,654.63 16,868.59 3,445.58
08/31/00 3,800.81 17,916.37 3,522.54
09/29/00 3,413.10 16,970.51 3,249.80
10/31/00 3,050.82 16,898.76 2,685.92
11/30/00 3,019.04 15,566.47 2,934.65
12/31/00 3,223.06 15,642.66 2,854.31
01/31/01 3,191.15 16,197.65 3,322.48
02/28/01 3,184.77 14,720.72 3,836.80
03/30/01 2,974.15 13,788.15 3,466.87
04/30/01 3,254.97 14,859.64 3,911.74
05/31/01 3,382.62 14,959.19 4,372.86
06/30/01 3,369.86 14,595.11 4,418.12
07/31/01 3,178.39 14,451.43 4,241.59
08/31/01 3,223.06 13,546.75 4,602.16
09/30/01 3,408.15 12,452.81 5,013.93
10/31/01 3,363.47 12,690.28 4,741.55
11/30/01 3,344.33 13,663.70 4,476.05
12/31/01 3,465.59 13,783.40 4,564.18
01/31/02 4,071.91 13,582.26 5,324.41
02/28/02 4,461.23 13,320.32 6,037.73
03/31/02 5,188.81 13,821.29 6,925.62
04/30/02 5,731.31 12,983.33 7,536.17
05/31/02 8,067.23 12,887.68 9,913.87
06/30/02 6,656.74 11,969.69 8,903.48
07/31/02 4,786.73 11,036.60 7,529.45
08/31/02 5,450.49 11,109.06 9,045.97
09/30/02 5,488.78 9,901.74 8,861.26
10/31/02 4,761.20 10,773.25 7,795.29
11/30/02 4,812.26 11,407.36 8,156.95
12/31/02 6,356.53 10,737.20 10,217.59
01/31/03 6,599.00 10,455.92 10,145.07
02/28/03 6,356.53 10,299.04 9,321.54
03/31/03 5,989.56 10,399.03 8,729.86
04/30/03 5,832.28 11,255.61 8,808.34
05/31/03 6,258.23 11,848.63 10,001.32
06/30/03 6,389.30 11,999.79 10,564.40
07/31/03 6,802.14 12,211.36 11,599.76
08/31/03 7,975.15 12,449.51 13,723.84
09/30/03 8,591.15 12,317.30 13,841.19
10/31/03 10,511.21 13,014.08 15,322.40
11/30/03 12,247.79 13,128.59 17,609.86
12/31/03 12,248.93 13,817.12 17,228.80
01/31/04 11,366.65 14,070.73 15,306.41
02/29/04 11,866.61 14,266.30 15,969.01
03/31/04 12,903.28 14,051.08 16,765.22
04/30/04 10,087.35 13,830.50 12,714.93
05/31/04 10,418.21 14,020.29 14,224.14
06/30/04 10,057.94 14,292.92 13,443.13
07/31/04 9,572.69 13,819.87 13,246.68
08/31/04 9,984.42 13,875.77 14,779.22
09/30/04 11,528.40 14,026.05 16,496.60
10/31/04 11,793.08 14,240.33 16,665.57
11/30/04 12,895.93 14,816.51 16,910.89
12/31/04 12,367.27 15,320.70 15,383.40
01/31/05 11,724.72 14,947.26 14,411.34
02/28/05 12,934.23 15,261.81 15,404.35
03/31/05 12,329.48 14,991.55 14,469.72
04/30/05 10,666.40 14,707.22 12,771.76
05/31/05 10,628.60 15,175.19 13,333.73
06/30/05 11,717.16 15,196.73 14,467.05
07/31/05 11,785.19 15,761.88 14,133.37
08/31/05 12,503.34 15,618.06 14,808.64
09/30/05 14,272.26 15,744.56 17,651.75
10/31/05 13,077.86 15,482.08 16,053.20
11/30/05 14,385.65 16,067.65 17,543.44
12/31/05 16,187.03 16,073.25 19,982.63
01/31/06 20,026.67 16,498.83 24,723.22
02/28/06 19,516.84 16,543.60 22,096.93
03/31/06 22,304.96 16,749.52 24,320.34
04/30/06 25,029.35 16,974.43 27,404.91
05/31/06 23,045.80 16,485.89 24,151.24
06/30/06 22,990.04 16,508.23 24,433.06
07/31/06 23,436.14 16,610.07 23,869.90
08/31/06 23,722.92 17,005.27 25,329.57
09/30/06 21,333.10 17,443.50 21,853.09
10/31/06 22,958.17 18,011.91 23,202.08
11/30/06 25,340.02 18,354.42 25,873.45
12/31/06 24,652.04 18,611.89 24,694.70
01/31/07 24,633.95 18,893.37 24,550.41
02/28/07 24,995.69 18,523.84 24,843.10
03/31/07 24,606.82 18,731.03 24,697.57
04/30/07 25,755.32 19,560.72 24,854.03
05/31/07 25,863.84 20,243.29 24,461.06
06/30/07 25,628.72 19,906.99 24,116.87
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2007
One Year Five Year Ten Year
World Precious Minerals Fund 11.48% 30.93% 9.86%
------------------------------------------------------------------------
S&P 500 Index 20.59% 10.70% 7.13%
------------------------------------------------------------------------
AMEX Gold BUGS Index (1.29)% 22.03% 9.20%
Performance data quoted above is historical. Past performance is no
guarantee of future results. Current performance may be higher or lower
than the performance data quoted. Investment return and principal value
of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
The graph and table do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund
shares.
The S&P 500 Index is a widely recognized capitalization-weighted index
of 500 common stock prices in U.S. companies. The AMEX Gold BUGS Index
is a modified equal-dollar weighted index of companies involved in major
gold mining. The returns for the indexes reflect no deduction for fees,
expenses or taxes.
35
GOLD AND PRECIOUS MINERALS FUNDS
GOLD SHARES FUND
[Gold Shares Fund Graph]
Gold Shares S&P 500 Philadelphia Stock Exchange
Date Fund Index Gold & Silver Index
06/30/97 $ 10,000.00 $ 10,000.00 $ 10,000.00
07/31/97 10,212.77 10,795.68 10,252.78
08/29/97 10,319.15 10,190.88 10,360.86
09/30/97 10,106.38 10,749.00 11,474.81
10/31/97 7,872.34 10,390.02 9,215.42
11/28/97 6,063.83 10,871.00 7,444.86
12/31/97 6,191.49 11,057.69 7,801.08
01/30/98 6,191.49 11,180.00 7,883.10
02/27/98 5,648.38 11,986.36 7,938.55
03/31/98 5,757.00 12,600.16 8,597.81
04/30/98 6,082.87 12,726.93 9,259.77
05/29/98 4,888.02 12,508.18 7,879.04
06/30/98 4,116.80 13,016.25 7,565.32
07/31/98 4,149.38 12,877.64 6,641.82
08/31/98 3,193.51 11,015.83 5,167.14
09/30/98 4,453.53 11,721.51 7,925.62
10/30/98 4,355.77 12,674.96 7,974.59
11/30/98 4,084.21 13,443.16 7,517.49
12/31/98 4,149.38 14,217.83 6,884.61
01/29/99 3,964.73 14,812.36 6,703.41
02/26/99 3,877.83 14,352.01 6,419.26
03/31/99 3,856.10 14,926.21 6,344.12
04/30/99 4,290.59 15,504.24 7,803.88
05/28/99 3,617.13 15,138.13 6,485.96
06/30/99 3,714.89 15,978.25 7,131.68
07/30/99 3,475.92 15,479.33 6,699.07
08/31/99 3,660.58 15,402.75 7,250.63
09/30/99 4,659.91 14,980.50 8,641.75
10/29/99 4,171.11 15,928.48 7,490.41
11/30/99 3,997.31 16,252.28 7,232.51
12/31/99 4,040.76 17,209.48 7,332.84
01/31/00 3,551.96 16,344.83 6,470.86
02/29/00 3,573.68 16,035.43 6,494.42
03/31/00 3,302.13 17,604.16 6,146.18
04/28/00 3,041.43 17,074.52 5,955.81
05/31/00 3,041.43 16,724.20 6,146.87
06/30/00 3,171.78 17,136.51 6,315.41
07/31/00 2,867.64 16,868.59 5,555.10
08/31/00 3,041.43 17,916.37 5,757.00
09/29/00 2,845.91 16,970.51 5,492.05
10/31/00 2,563.49 16,898.76 4,826.47
11/30/00 2,606.94 15,566.47 5,201.57
12/31/00 2,835.05 15,642.66 5,681.20
01/31/01 2,802.46 16,197.65 5,399.41
02/28/01 2,867.64 14,720.72 5,836.01
03/30/01 2,606.94 13,788.15 5,288.64
04/30/01 2,954.54 14,859.64 6,129.14
05/31/01 3,084.88 14,959.19 6,364.49
06/30/01 3,074.02 14,595.11 5,933.66
07/31/01 2,845.91 14,451.43 5,912.53
08/31/01 2,921.95 13,546.75 6,329.18
09/30/01 3,041.43 12,452.81 6,468.26
10/31/01 2,997.98 12,690.28 6,104.98
11/30/01 2,976.26 13,663.70 5,899.35
12/31/01 3,150.06 13,783.40 6,110.52
01/31/02 3,671.44 13,582.26 6,885.13
02/28/02 4,203.70 13,320.32 7,341.07
03/31/02 4,801.12 13,821.29 7,991.13
04/30/02 5,279.06 12,983.33 8,337.20
05/31/02 6,995.30 12,887.68 9,520.59
06/30/02 5,735.27 11,969.69 8,079.55
07/31/02 4,236.28 11,036.60 6,844.92
08/31/02 4,898.88 11,109.06 7,912.96
09/30/02 5,040.09 9,901.74 7,945.85
10/31/02 4,344.90 10,773.25 7,228.05
11/30/02 4,388.35 11,407.36 7,221.22
12/31/02 5,713.55 10,737.20 8,759.38
01/31/03 5,854.76 10,455.92 8,786.77
02/28/03 5,485.44 10,299.04 8,268.16
03/31/03 5,137.85 10,399.03 7,692.47
04/30/03 4,909.74 11,255.61 7,509.34
05/31/03 5,463.72 11,848.63 8,458.99
06/30/03 5,626.65 11,999.79 9,059.45
07/31/03 5,919.93 12,211.36 9,346.26
08/31/03 6,886.67 12,449.51 10,521.75
09/30/03 7,190.82 12,317.30 10,541.86
10/31/03 8,309.63 13,014.08 11,350.79
11/30/03 9,873.80 13,128.59 12,700.59
12/31/03 9,546.00 13,817.12 12,609.58
01/31/04 8,467.17 14,070.73 11,083.06
02/29/04 8,783.19 14,266.30 11,594.19
03/31/04 9,633.18 14,051.08 12,202.46
04/30/04 7,399.24 13,830.50 9,533.05
05/31/04 7,998.59 14,020.29 10,463.68
06/30/04 7,628.08 14,292.92 10,054.03
07/31/04 7,181.29 13,819.87 10,139.34
08/31/04 7,573.59 13,875.77 11,069.55
09/30/04 8,663.32 14,026.05 11,913.80
10/31/04 8,772.29 14,240.33 12,092.81
11/30/04 9,437.03 14,816.51 12,499.01
12/31/04 8,931.52 15,320.70 11,639.44
01/31/05 8,504.12 14,947.26 10,715.34
02/28/05 9,095.90 15,261.81 11,619.47
03/31/05 8,526.04 14,991.55 11,028.10
04/30/05 7,408.23 14,707.22 9,832.65
05/31/05 7,572.61 15,175.19 10,173.34
06/30/05 8,405.49 15,196.73 10,968.57
07/31/05 8,471.24 15,761.88 10,710.42
08/31/05 9,041.11 15,618.06 11,319.80
09/30/05 10,334.26 15,744.56 13,367.03
10/31/05 9,698.64 15,482.08 12,600.00
11/30/05 10,498.64 16,067.65 13,590.52
12/31/05 11,860.90 16,073.25 15,195.46
01/31/06 14,776.24 16,498.83 18,309.33
02/28/06 14,000.30 16,543.60 15,840.32
03/31/06 16,006.67 16,749.52 16,846.30
04/30/06 18,412.11 16,974.43 18,816.80
05/31/06 17,070.83 16,485.89 16,984.49
06/30/06 17,159.51 16,508.23 17,126.11
07/31/06 17,503.14 16,610.07 16,929.88
08/31/06 17,891.12 17,005.27 17,534.19
09/30/06 15,962.33 17,443.50 15,373.45
10/31/06 16,926.72 18,011.91 16,446.97
11/30/06 18,600.55 18,354.42 17,894.73
12/31/06 17,813.52 18,611.89 17,098.48
01/31/07 17,625.08 18,893.37 16,826.43
02/28/07 17,713.76 18,523.84 16,809.99
03/31/07 17,004.32 18,731.03 16,510.27
04/30/07 17,081.91 19,560.72 16,531.22
05/31/07 17,004.32 20,243.29 16,873.09
06/30/07 16,616.35 19,906.99 16,419.94
AVERAGE ANNUAL PERFORMANCE For the Years Ended
June 30, 2007
One Year Five Year Ten Year
Gold Shares Fund (3.17)% 23.69% 5.21%
-------------------------------------------------------------------------
S&P 500 Index 20.59% 10.70% 7.13%
-------------------------------------------------------------------------
Philadelphia Stock Exchange Gold &
Silver Index (4.12)% 15.22% 5.08%
Performance data quoted above is historical. Past performance is no
guarantee of future results. Current performance may be higher or lower
than the performance data quoted. Investment return and principal value
of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
The graph and table do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund
shares.
The S&P 500 Index is a widely recognized capitalization-weighted index of
500 common stock prices in U.S. companies. The Philadelphia Stock
Exchange Gold & Silver Index is a capitalization-weighted index which
includes the leading companies involved in the mining of gold and silver.
The returns for the indexes reflect no deduction for fees, expenses or
taxes.
PERFORMANCE COMMENTARY
For the 12 months ending June 30, 2007, the World Precious Minerals
Fund returned 11.48 percent, while its benchmark, the AMEX Gold BUGS
Index, returned -1.29 percent. The Gold Shares Fund returned - 3.17
percent during the fiscal year, while its benchmark, the
Philadelphia Stock Exchange Gold & Silver Index, returned -4.12
percent. Spot gold closed at $649.65, up $33.80 (5.49 percent) for
the same period. The S&P 500 Index posted a return of 20.59 percent
and the U.S. Trade Weighted Dollar Index(1) lost 3.80 percent over
the past 12 months. Over the same period, the yield on the 90-day
Treasury bill went from 4.98 percent to 4.81 percent.
36
GOLD AND PRECIOUS MINERALS FUNDS
Over the past year, one of the most disappointing issues was the
inability of gold producers to generate earnings growth via higher
gold prices and the inability of new mine startups to achieve
anticipated targets due to project delays or disappointments. For
the Gold Shares Fund, several holdings did not perform to
expectations on their production growth, but the fund was able to
slightly outperform its benchmark because it had more exposure to
mid-tier gold producers. The World Precious Minerals Fund was able
to strongly outperform its traditional benchmark of unhedged gold
producers as gold exploration companies achieved accretive price
gains from new discoveries of gold and positive momentum in moving
properties towards development. The chart below shows the potential
impact on mining companies' stock prices when project delays or
disappointments are encountered.
[Avoiding Delays & Disappointments:
Major Catalyst For Share Price Decline Chart]
Goldcorp, Inc.,(2) which was a significant holding in both Gold
Shares and World Precious Minerals Funds, was our most disappointing
investment over the past year. Their acquisition of Glamis Gold
Ltd.(3) for strategic long-term growth reasons negatively impacted
their valuation.
Our investment process is an active management style versus an
indexing approach. This has allowed us to create value for our
shareholders. The
37
GOLD AND PRECIOUS MINERALS FUNDS
critical factors that we believe generated our superior relative
performance include:
1. A focus on mid-cap unhedged gold producers.
2. We made concentrated investments in certain companies. The top 10
holdings in the Gold Shares and World Precious Minerals Funds
represented 50.35 percent and 38.10 percent, respectively, of
total investments. Thus our funds' returns reflect our ability to
identify attractive investment opportunities when compared to
unmanaged stock indexes.
3. We invested in companies reflecting the three critical growth
drivers:
(a) Increasing reserves
(b) Increasing production
(c) Increasing cash flow
4. We looked for undervalued junior gold companies with inexpensive
resource ounces in the ground.
5. We sought to own companies for which a rising gold price would
greatly increase their reserve base and net asset value.
6. We searched for companies that were undervalued on a relative
peer group basis for several fundamental metrics that included
ounces per share, production per share, net asset value per share
and cash flow multiples.
7. We used statistical models to manage the price risk of the
portfolios. We looked for significant moves where the probability
of a price reversal was high, and adjusted our cash position
accordingly. As a consequence of this approach, we may run
defensively positioned portfolios with high cash levels that can
be balanced with warrant or option positions in the fund. At the
close of the reporting period, warrants and cash equivalents
(repurchase agreements) represented 24.25 percent and 22.17
percent, respectively, of the net assets of Gold Shares Fund. For
the World Precious Minerals Fund, warrants and cash equivalents
represented 22.37 percent and 10.88 percent, respectively, of net
assets.
YEAR IN REVIEW - ECONOMIC AND POLITICAL ISSUES THAT AFFECTED THE
FUND
Critical drivers for the year included:
* Commodity markets lost a lot of momentum in the second half of
2006, not long after gold reached its highest price in a
quarter-century. News that two of the world's largest gold
companies had significantly reduced
38
GOLD AND PRECIOUS MINERALS FUNDS
their large hedge books left the market wondering who would be the
next natural buyers of gold.
* Another headwind was encountered when the Amaranth Advisors(3)
hedge fund reported a loss of $6 billion in less than two weeks.
As Amaranth liquidated its positions in natural gas, futures
tumbled 35 percent and oil finished the September quarter down
almost 15 percent. Amaranth's collapse led hedge funds and other
speculators to sell commodities. Sentiment in the gold sector
received significant collateral damage from Amaranth's massive
liquidation as it scrambled to raise cash by liquidating numerous
holdings in the gold and mining sectors.
* Lack of significant new gold discoveries, particularly in stable
political environments, was a hindrance to share-price
performance. Over the last 16 years, exploration spending waned as
gold prices reached multi-decade lows and fewer new large deposits
were discovered, as the chart below indicates. Only in the last
year did exploration spending pick up again. Also of note, of the
64 deposits covered in the CIBC study noted in the chart below,
only 22 have made it into production.
[+ 1$ Billion Discoveries Of Significance Becoming Scarce = 3 Million Oz. Chart]
* 2006 saw more than $24 billion in merger and acquisition activity
in the gold sector, up 50 percent from 2005. Perhaps contrary to
conventional thinking, this consolidation has not led to top-tier
companies gaining more market control in the gold market. Four
years ago, 21 companies controlled 50 percent of world gold
production. Currently that number is 24 companies.
* Global gold production is shifting away from the big four
producers: South Africa, the United States, Australia and Canada.
South Africa, the largest producer, once commanded roughly a fifth
of the world's
39
GOLD AND PRECIOUS MINERALS FUNDS
gold production. The figure is now down to 12 percent. In the last
decade, the country's production has fallen 46 percent. China is now
thought to be the third-largest producer of gold and is soon
expected to pass the U.S. to become No. 2. China plans to increase
production by 8.3 percent to 260 tonnes in 2007.
* Billionaire Warren Buffett announced intentions to acquire two
U.S. gold jewelry manufacturers. The combined companies control
about 6 percent of the world gold jewelry market.
INVESTMENT HIGHLIGHTS
STRENGTHS
* Spot gold closed at $649.65, up $33.80 or 5.49 percent over the
last 12-months. Higher gold prices helped the exploration
companies to outperform their peers, as illustrated by the strong
relative performance of the World Precious Minerals Fund to its
benchmark, the AMEX Gold BUGS Index, since this fund's focus
includes exploration companies.
* The World Gold Council's latest demand trends publication showed
that while investment demand for gold was off 26 percent,
increased jewelry purchases more than offset all that decline to
produce a net demand increase of 4 percent, which is supportive of
current gold equity valuations.
* India imported 211 tonnes of gold in the first quarter of 2007, a
50 percent jump over the same period last year. This suggests that
purchasers are comfortable with current price levels and should
provide support to the market. India is the world's largest gold
buyer and thus is a barometer of global gold demand.
WEAKNESSES
* Cost pressures continue to be an issue for the gold-mining
industry. Warnings by two of the largest North America-based gold
producers showed cost increase forecasts of approximately 20
percent in 2007. Higher costs tend to hurt profit margins for
gold-mining companies and this factor, along with several
disappointing new mine start ups, accounts for the poorer
performance shown by the Gold Shares Fund, compared to World
Precious Minerals Fund. However, the Gold Shares Fund did
outperform its benchmark, the Philadelphia Stock Exchange Gold &
Silver Index.
* Perhaps as a way to redeploy dollars, China has been engaging
commodity sellers in Africa at the point of extraction, thereby
bypassing international commodity markets. Such off-market
transactions, where long-term pricing structures are used, tend to
undermine spot-market
40
GOLD AND PRECIOUS MINERALS FUNDS
prices, which are generally used to value commodity-producing
companies.
* For 2006, preliminary figures compiled by BMO Capital Markets
showed basic shares outstanding for gold companies rose by 21
percent, reflecting merger activity. However, the number of ounces
produced per share outstanding was expected to decline by 14
percent, which points to the declining quality of company
valuations over the past year.
CURRENT OUTLOOK
OPPORTUNITIES
* A survey of the world's 99 largest alternative managers for pension
funds showed assets of just under $600 billion. Commodities,
however, comprised only about $12 billion of those assets. The
survey, conducted by Watson Wyatt, showed that pension funds around
the world are now more prepared to increase their exposure to
alternative asset classes to enhance returns and reduce risk.
* Bear Stearns, the biggest U.S. broker for hedge funds, is
expanding its commodity trading business. Investment banks are
hiring commodity traders as well. JP Morgan plans to increase its
commodity trading staff worldwide by more than 30 percent.
* In July, the Shanghai Gold Exchange will launch individual gold
bullion trading whereby individuals can take delivery of physical
gold. Investors will be able to acquire gold at cheaper prices
than that sold by jewelers or coin dealers, their traditional
sources of gold.
THREATS
* The launch of several new gold exchange-traded funds (ETFs) helped
total holdings of these vehicles reach 652.5 tonnes worth $13.3
billion at the end of last year. This would rank the investors in
these vehicles as the ninth-largest holder of gold in the world.
The streetTRACKS Gold Trust(4) said in March that its assets as of
mid-February totaled $10.2 billion, making it the seventh largest
ETF by assets in the U.S. The success of gold ETFs has largely
come at the expense of gold-mining shares.
* Despite gold prices averaging $650 during the first quarter of
2007, most gold producers underperformed bullion during that time
frame. According to a brokerage house report, profit margins are
not likely to expand despite higher commodity prices. Drilling
costs for miners are not likely to go down next year as one of the
major suppliers of drill rigs to the mining companies noted that
the market for rigs would be even tighter next year.
41
GOLD AND PRECIOUS MINERALS FUNDS
* Murenbeeld & Associates' gold price forecast noted there were two
bearish factors currently in the market that could push gold
lower. Murenbeeld noted that tighter monetary policy and the
potential for a recession could reduce the demand for commodities.
(1)The U.S. Trade Weighted Dollar Index provides a general
indication of the international value of the U.S. dollar.
(2)This security comprised 4.79% of the total net assets of the
World Precious Minerals Fund and 6.55% of the total net assets of
the Gold Shares Fund as of June 30, 2007.
(3)Neither World Precious Minerals Fund nor the Gold Shares Fund
held this security as of June 30, 2007.
(4)This security comprised 2.42% of the total net assets of the
World Precious Minerals Fund and 5.48% of the total net assets of
the Gold Shares Fund as of June 30, 2007.
WORLD PRECIOUS MINERALS FUND
TOP 10 EQUITY HOLDINGS BASED ON TOTAL INVESTMENTS June 30, 2007
NORTHERN ORION RESOURCES, INC. 7.13%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------
SILVER WHEATON CORP. 4.82%
METAL & MINERAL MINING & EXPLORATION
---------------------------------------------------------------
GOLDCORP, INC. 4.77%
SENIOR GOLD PRODUCERS
---------------------------------------------------------------
EASTERN PLATINUM LTD. 4.10%
PLATINUM GROUP METALS
---------------------------------------------------------------
RANDGOLD RESOURCES LTD. 3.74%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------
MERIDIAN GOLD, INC. 3.34%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------
YAMANA GOLD, INC. 2.92%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------
SILVERCORP METALS, INC. 2.48%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------
STREETTRACKS GOLD TRUST 2.41%
EXCHANGE-TRADED FUNDS
---------------------------------------------------------------
AGNICO-EAGLE MINES LTD. 2.39%
INTERMEDIATE & JUNIOR GOLD PRODUCERS
---------------------------------------------------------------
TOTAL TOP TEN HOLDINGS 38.10%
42
GOLD AND PRECIOUS MINERALS FUNDS
GOLD SHARES FUND
TOP 10 EQUITY HOLDINGS BASED ON TOTAL INVESTMENTS June 30, 2007
NORTHERN ORION RESOURCES, INC. 8.28%
GOLD MINING
---------------------------------------------------------------
GOLDCORP, INC. 6.53%
GOLD MINING
---------------------------------------------------------------
STREETTRACKS GOLD TRUST 5.46%
EXCHANGE-TRADED FUNDS
---------------------------------------------------------------
KINROSS GOLD CORP. 5.24%
GOLD MINING
---------------------------------------------------------------
GOLD FIELDS LTD. 4.70%
GOLD MINING
---------------------------------------------------------------
MERIDIAN GOLD, INC. 4.69%
GOLD MINING
---------------------------------------------------------------
AGNICO-EAGLE MINES LTD. 4.57%
GOLD MINING
---------------------------------------------------------------
RANDGOLD RESOURCES LTD. 4.48%
GOLD MINING
---------------------------------------------------------------
YAMANA GOLD, INC. 3.34%
GOLD MINING
---------------------------------------------------------------
ROYAL GOLD, INC. 3.06%
GOLD ROYALTY COMPANIES
---------------------------------------------------------------
TOTAL TOP TEN HOLDINGS 50.35%
43
GOLD AND PRECIOUS MINERALS FUNDS
WORLD PRECIOUS MINERALS FUND
PORTFOLIO PROFILE June 30, 2007
Country Distribution* % of Investments
---------------------------------------------------------------
Canada 62.84%
---------------------------------------------------------------
United States 23.80%
---------------------------------------------------------------
Jersey, Channel Islands 3.74%
---------------------------------------------------------------
Australia 2.93%
---------------------------------------------------------------
South Africa 2.72%
---------------------------------------------------------------
United Kingdom 2.65%
---------------------------------------------------------------
Other Foreign 1.32%
---------------------------------------------------------------
* Country distribution shown is based on domicile and the
locale of company operations may be different.
GOLD SHARES FUND
PORTFOLIO PROFILE June 30, 2007
Country Distribution* % of Investments
---------------------------------------------------------------
Canada 43.64%
---------------------------------------------------------------
United States 40.81%
---------------------------------------------------------------
South Africa 6.79%
---------------------------------------------------------------
Jersey, Channel Islands 4.49%
---------------------------------------------------------------
Other Foreign 4.27%
---------------------------------------------------------------
* Country distribution shown is based on domicile and the
locale of company operations may be different.
44
GOLD AND PRECIOUS MINERALS FUNDS
WORLD PRECIOUS MINERALS FUND
PORTFOLIO ALLOCATION BY INDUSTRY
BASED ON TOTAL INVESTMENTS June 30, 2007
[Pie Chart]
Intermediate & Junior Gold Producers 29.1%
Gold/Mineral Exploration & Development 22.0%
Senior Gold Producers 13.7%
Cash Equivalent 10.8%
Metal & Mineral Mining & Exploration 10.2%
Platinum Group Metals 6.2%
Exchange-Traded Funds 3.2%
Other 4.8%
GOLD SHARES FUND
PORTFOLIO ALLOCATION BY INDUSTRY
BASED ON TOTAL INVESTMENTS June 30, 2007
[Pie Chart]
Gold Mining 63.3%
Cash Equivalent 22.1%
Exchange-Traded Funds 5.7%
Metal & Mineral Mining 4.8%
Other 4.1%
45
EXPENSE EXAMPLE (UNAUDITED) June 30, 2007
As a shareholder of the funds, you incur two types of costs: (1)
transaction costs, including short-term trading fees and exchange
fees; and (2) ongoing costs, including management fees and other
fund expenses. This example is intended to help you understand your
ongoing costs (in dollars) of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the
beginning of the period and held for the entire period as indicated
below.
* ACTUAL EXPENSES. The first line of the following table for each
fund provides information about actual account values and actual
expenses. You may use the information in this line, together with
the amount you invested, to estimate the expenses you paid over
the period. Simply divide your account value by $1,000 (for
example, an $8,600 account value divided by $1,000 = 8.6), then
multiply the result by the number in the first line under the
heading "Expenses Paid During Period" to estimate the expenses you
paid on your account during this period.
* HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The second line of
the following table for each fund provides information about
hypothetical account values and hypothetical expenses based on the
fund's actual expense ratio and an assumed rate of return of 5
percent per year before expenses, which is not the fund's actual
return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you
paid for the period. You may use this information to compare the
ongoing costs of investing in these funds and other funds. To do
so, compare this 5 percent hypothetical example with the 5 percent
hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to
highlight your ongoing costs only and do not reflect any direct or
transactional costs, such as small account, exchange or short-term
trading fees. Therefore, the second line of the table is useful in
comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if
these direct or transactional costs were included, your costs would
have been higher.
46
EXPENSE EXAMPLE (UNAUDITED) June 30, 2007
- --------------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30, 2007
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING
JANUARY 1, 2007 JUNE 30, 2007 PERIOD*
- --------------------------------------------------------------------------------------
U.S. TREASURY SECURITIES CASH FUND
Based on Actual Fund Return $1,000.00 $1,021.30 $ 4.61
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,020.23 $ 4.61
- --------------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES SAVINGS
FUND
Based on Actual Fund Return $1,000.00 $1,024.00 $ 2.26
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,022.56 $ 2.26
- --------------------------------------------------------------------------------------
NEAR-TERM TAX FREE FUND
Based on Actual Fund Return $1,000.00 $1,007.90 $ 2.24
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,022.56 $ 2.26
- --------------------------------------------------------------------------------------
TAX FREE FUND
Based on Actual Fund Return $1,000.00 $1,001.20 $ 3.47
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,021.32 $ 3.51
- --------------------------------------------------------------------------------------
ALL AMERICAN EQUITY FUND
Based on Actual Fund Return $1,000.00 $1,136.40 $ 9.27
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,016.12 $ 8.75
- --------------------------------------------------------------------------------------
CHINA REGION OPPORTUNITY FUND
Based on Actual Fund Return $1,000.00 $1,196.40 $10.95
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,014.83 $10.04
- --------------------------------------------------------------------------------------
GLOBAL RESOURCES FUND
Based on Actual Fund Return $1,000.00 $1,192.70 $ 5.17
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,020.08 $ 4.76
- --------------------------------------------------------------------------------------
WORLD PRECIOUS MINERALS FUND
Based on Actual Fund Return $1,000.00 $1,039.60 $ 5.11
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,019.79 $ 5.06
- --------------------------------------------------------------------------------------
GOLD SHARES FUND
Based on Actual Fund Return $1,000.00 $ 932.80 $ 6.33
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,018.25 $ 6.61
- --------------------------------------------------------------------------------------
<FN>
*These calculations are based on expenses incurred in the most
recent fiscal half-year. The funds' annualized six-month expense
ratios (after reimbursements and offsets) for the six-month period
ended June 30, 2007, were 0.92%, 0.45%, 0.45%, 0.70%, 1.75%, 2.01%,
0.95%, 1.01% and 1.32%, respectively, for the U.S. Treasury
Securities Cash, U.S. Government Securities Savings, Near-Term Tax
Free, Tax Free, All American Equity, China Region Opportunity,
Global Resources, World Precious Minerals and Gold Shares Funds. The
dollar amounts shown as "Expenses Paid" are equal to the annualized
expense ratio multiplied by the average account value over the
period, multiplied by 181, the number of days in the most recent
fiscal half-year, then divided by 365 days in the current fiscal
year.
</FN>
47
U.S. TREASURY SECURITIES CASH FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
UNITED STATES
GOVERNMENT COUPON MATURITY PRINCIPAL
OBLIGATIONS 55.74% RATE DATE AMOUNT VALUE
UNITED STATES TREASURY BILLS 51.44%
- -------------------------------------------------------------------------------------
Yield 4.98% 07/05/07 $ 20,000,000 $ 19,989,139
Yield 4.48% 07/26/07 20,000,000 19,938,055
Yield 4.97% 10/04/07 20,000,000 19,743,764
------------
59,670,958
UNITED STATES TREASURY NOTE 4.30%
- -------------------------------------------------------------------------------------
4.63% 02/29/08 5,000,000 4,987,074
- -------------------------------------------------------------------------------------
TOTAL UNITED STATES GOVERNMENT OBLIGATIONS 64,658,032
- -------------------------------------------------------------------------------------
(cost $64,658,032)
REPURCHASE AGREEMENTS 43.93%
Joint Tri-Party Repurchase
Agreements, 07/02/07,
collateralized by U.S.
Treasury securities held in
joint tri-party repurchase
accounts:
4.10% Bear Stearns, repurchase
price $28,975,854 4.10% 07/02/07 28,965,957 28,965,957
4.20% UBS Financial Services,
Inc., repurchase price
$22,007,700 4.20% 07/02/07 22,000,000 22,000,000
- -------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS 50,965,957
- -------------------------------------------------------------------------------------
(cost $50,965,957)
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS 99.67% 115,623,989
- -------------------------------------------------------------------------------------
(cost $115,623,989)
Other assets and liabilities, net 0.33% 387,576
------------
NET ASSETS 100% $116,011,565
------------
See notes to portfolios of investments and notes to financial statements.
48
U.S. GOVERNMENT SECURITIES SAVINGS FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
UNITED STATES
GOVERNMENT AND AGENCY COUPON MATURITY PRINCIPAL
OBLIGATIONS 100.20% RATE DATE AMOUNT VALUE
FEDERAL FARM CREDIT BANK 32.96%
- ------------------------------------------------------------------------------------
Discount Notes:
Yield 4.80% 07/02/07 $ 50,000,000 $ 49,993,333
Yield 5.17% 07/05/07 15,000,000 14,991,478
Yield 5.18% 07/16/07 15,721,000 15,687,331
Yield 5.20% 07/23/07 5,000,000 4,984,478
Yield 5.19% 07/26/07 18,000,000 17,935,625
Fixed Rates:
4.63% 07/03/07 3,000,000 2,999,886
4.20% 07/30/07 3,000,000 2,997,802
5.30% 08/16/07 3,000,000 3,000,200
2.63% 09/17/07 4,903,000 4,876,136
2.63% 09/24/07 2,000,000 1,988,257
3.45% 09/24/07 2,000,000 1,991,908
3.90% 10/29/07 1,000,000 995,568
3.65% 12/03/07 2,500,000 2,483,429
4.00% 12/10/07 1,100,000 1,094,053
4.75% 12/28/07 1,385,000 1,381,558
3.55% 01/28/08 1,000,000 990,173
3.22% 03/03/08 1,000,000 986,792
3.75% 06/02/08 2,000,000 1,972,088
3.97% 06/17/08 3,300,000 3,260,654
Variable Rate:
5.17% 10/26/07 20,000,000 19,998,408
------------
154,609,157
FEDERAL HOME LOAN BANK 67.24%
- ------------------------------------------------------------------------------------
Discount Notes:
Yield 5.08% 07/02/07 30,000,000 29,995,778
Yield 5.09% 07/03/07 20,000,000 19,994,355
Yield 4.88% 07/05/07 42,588,000 42,564,926
Yield 5.17% 07/06/07 30,000,000 29,978,540
Yield 5.17% 07/11/07 30,000,000 29,957,083
Yield 5.17% 07/13/07 30,000,000 29,948,450
Yield 5.18% 07/20/07 62,516,000 62,345,827
Yield 5.15% 07/26/07 19,263,000 19,194,375
Yield 5.18% 07/27/07 20,000,000 19,925,539
Fixed Rates:
2.50% 07/09/07 1,000,000 999,422
4.30% 08/02/07 2,000,000 1,998,156
5.25% 08/03/07 1,000,000 999,774
3.00% 08/06/07 1,000,000 997,831
4.75% 08/17/07 1,200,000 1,199,121
3.40% 08/27/07 1,770,000 1,765,032
See notes to portfolios of investments and notes to financial statements.
49
U.S. GOVERNMENT SECURITIES SAVINGS FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
UNITED STATES
GOVERNMENT AND AGENCY COUPON MATURITY PRINCIPAL
OBLIGATIONS RATE DATE AMOUNT VALUE
FEDERAL HOME LOAN BANK (CONT'D)
- ------------------------------------------------------------------------------------
3.38% 09/07/07 $ 1,500,000 $ 1,494,835
4.35% 09/28/07 4,000,000 3,990,880
3.60% 10/19/07 1,000,000 994,982
3.25% 10/26/07 1,000,000 993,376
3.40% 11/09/07 1,000,000 993,361
3.70% 12/10/07 2,000,000 1,986,204
3.12% 01/29/08 1,885,000 1,862,194
3.35% 03/17/08 2,125,000 2,096,689
5.25% 04/04/08 5,000,000 4,998,713
3.50% 05/21/08 1,000,000 985,604
3.65% 05/23/08 1,200,000 1,182,510
Step Coupon:
3.50% 07/09/08 2,000,000 1,999,120
------------
315,442,677
- ------------------------------------------------------------------------------------
TOTAL INVESTMENTS 100.20% 470,051,834
- ------------------------------------------------------------------------------------
(cost $470,051,834)
Other assets and liabilities, net
(0.20)% (957,329)
------------
NET ASSETS 100% $469,094,505
------------
See notes to portfolios of investments and notes to financial statements.
50
NEAR-TERM TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS 96.96% RATE DATE AMOUNT VALUE
ALABAMA 5.64%
- ---------------------------------------------------------------------------------------
DCH Health Care Authority Facilities
Revenue 5.00% 06/01/09 $ 250,000 $ 254,027
Jefferson County, Alabama Limited
Obligation, Series A 5.00% 01/01/08 300,000 301,680
Mountain Brook City Board of Education
Capital Outlay 4.00% 02/15/15 200,000 198,568
-----------
754,275
ALASKA 2.21%
- ---------------------------------------------------------------------------------------
Alaska Municipal Bond Bank Authority,
Series A 4.00% 02/01/16 300,000 296,349
ARIZONA 2.21%
- ---------------------------------------------------------------------------------------
Pima County Unified School District, GO
Unlimited, Refunding 3.70% 07/01/12 300,000 295,554
CALIFORNIA 2.36%
- ---------------------------------------------------------------------------------------
Association of Bay Area Governments
(ABAG) Finance Authority, Series C 4.00% 03/01/08 100,000 99,735
San Diego, California Community College
District, GO Unlimited (ZCB) 4.34%(1) 05/01/15 300,000 215,901
-----------
315,636
CONNECTICUT 1.99%
- ---------------------------------------------------------------------------------------
Connecticut State, Series D, GO
Unlimited 5.375% 11/15/18 250,000 266,302
DELAWARE 1.52%
- ---------------------------------------------------------------------------------------
Delaware Transportation Authority
System Revenue 5.50% 07/01/08 200,000 203,308
DISTRICT OF COLUMBIA 1.15%
- ---------------------------------------------------------------------------------------
District of Columbia, Unrefunded,
Series B 5.50% 06/01/09 150,000 154,500
FLORIDA 3.43%
- ---------------------------------------------------------------------------------------
Florida State Board of Education
Capital Outlay, Series B, GO 5.25% 06/01/11 175,000 178,797
Jacksonville Transportation Authority,
GO 6.50% 07/01/07 280,000 280,000
-----------
458,797
ILLINOIS 9.30%
- ---------------------------------------------------------------------------------------
Chicago Water Revenue (ZCB) 5.05%(1) 11/01/08 275,000 261,376
See notes to portfolios of investments and notes to financial statements.
51
NEAR-TERM TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
ILLINOIS (CONT'D)
- --------------------------------------------------------------------------------------
Cook County, Illinois Capital
Improvement, GO Unlimited,
Prerefunded, Series A 5.25% 11/15/14 $ 300,000 $ 312,120
Illinois Finance Authority Revenue,
Refunding 5.00% 07/01/16 390,000 411,801
Illinois State Sales Tax Revenue 6.00% 06/15/09 250,000 259,828
-----------
1,245,125
INDIANA 4.83%
- --------------------------------------------------------------------------------------
Indiana State Finance Authority
Revenue, Refunding 4.00% 05/01/12 350,000 349,377
Tippecanoe County, Indiana School
Improvements 4.00% 01/15/15 300,000 297,495
-----------
646,872
IOWA 3.81%
- --------------------------------------------------------------------------------------
Ames, Iowa Hospital Revenue, Refunding 5.00% 06/15/15 300,000 312,342
Johnston Community School District, GO
Unlimited 4.00% 06/01/16 200,000 197,780
-----------
510,122
KANSAS 3.36%
- --------------------------------------------------------------------------------------
Kansas State Development Finance
Authority Revenue 4.00% 10/01/15 200,000 199,018
Kansas State Development Finance
Authority Revenue, Scientific
Research 5.00% 10/01/07 250,000 250,680
-----------
449,698
MASSACHUSETTS 1.76%
- --------------------------------------------------------------------------------------
Massachusetts State Health &
Educational Facilities Authority
Revenue, Series D 5.00% 10/01/07 135,000 135,070
Massachusetts State, Series C, GO 4.625% 10/01/08 100,000 100,996
-----------
236,066
MICHIGAN 0.98%
- --------------------------------------------------------------------------------------
Detroit, Michigan Local Development
Financial Authority, Series A 5.20% 05/01/10 130,000 131,158
MISSOURI 1.70%
- --------------------------------------------------------------------------------------
Missouri State Health & Educational
Facilities Authority Revenue,
Series A 6.75% 05/15/13 200,000 228,134
NEVADA 1.47%
- --------------------------------------------------------------------------------------
North Las Vegas, GO Limited 4.00% 03/01/16 200,000 196,686
See notes to portfolios of investments and notes to financial statements.
52
NEAR-TERM TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
NEW JERSEY 3.79%
- --------------------------------------------------------------------------------------
New Jersey State 5.125% 05/01/10 $ 250,000 $ 257,758
New Jersey State Transportation Trust
Fund Authority, Series D 4.00% 06/15/14 250,000 249,395
-----------
507,153
NEW YORK 10.65%
- --------------------------------------------------------------------------------------
Hempstead Township, Series B, GO
Unlimited Tax 5.375% 11/15/10 120,000 121,910
New York City Transitional Financial
Authority Revenue, Series A 5.25% 11/01/08 225,000 229,390
New York State Throughway Authority
Service Contract Revenue,
Prerefunded, Local Highway & Bridge,
Series A2 5.375% 04/01/10 47,000 48,020
New York State Throughway Authority
Service Contract Revenue, Unrefunded,
Local Highway & Bridge, Series A2 5.375% 04/01/10 153,000 156,354
New York State, GO 5.00% 03/01/08 250,000 252,090
New York, New York, Series B 5.25% 08/01/09 200,000 205,238
New York, New York, Series C 3.50% 08/01/07 300,000 299,886
Schenectady Metroplex Development
Authority Revenue, Series A 5.00% 12/15/12 110,000 112,042
-----------
1,424,930
OHIO 1.50%
- --------------------------------------------------------------------------------------
Ohio State Higher Education, Series B,
GO 4.25% 11/01/07 200,000 200,300
OREGON 0.96%
- --------------------------------------------------------------------------------------
Oregon State Department Transportation
Highway 5.00% 11/15/09 125,000 128,209
SOUTH CAROLINA 7.09%
- --------------------------------------------------------------------------------------
Horry County Hospitality Fee Special
Obligation 5.00% 04/01/10 200,000 204,346
Jasper County School District, GO
Unlimited 4.00% 03/01/15 195,000 194,101
South Carolina State Public Service
Authority Revenue, Refunding,
Series B 5.00% 01/01/08 250,000 251,485
Spartanburg County School District 3.875% 04/01/12 300,000 298,638
-----------
948,570
TENNESSEE 2.33%
- --------------------------------------------------------------------------------------
Tennessee State, GO Unlimited,
Refunding, Series A 5.00% 05/01/11 300,000 311,166
See notes to portfolios of investments and notes to financial statements.
53
NEAR-TERM TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
TEXAS 14.77%
- ---------------------------------------------------------------------------------------
Arlington Refunding, Series A 5.00% 08/15/08 $ 200,000 $ 202,622
Gulf Coast Industrial Development
Authority Pollution Control Revenue 4.95% 07/01/07 385,000 385,000
Killeen, Texas Independent School
District, GO Unlimited, Prerefunded 5.00% 02/15/09 310,000 312,288
Killeen, Texas Independent School
District, GO Unlimited, Unrefunded 5.00% 02/15/09 90,000 90,632
Lewisville, Texas Independent School
District, GO Unlimited, Refunding
(ZCB) 4.04%(1) 08/15/15 400,000 280,804
San Antonio Water System Revenue 5.00% 05/15/13 100,000 103,287
San Antonio, Texas Water Revenue,
Refunding, Series A (VR) 3.72% 05/15/33 400,000 400,000
Texas Turnpike Authority Revenue 5.00% 06/01/08 200,000 202,128
-----------
1,976,761
UTAH 1.52%
- ---------------------------------------------------------------------------------------
Utah Transit Authority Sales Tax &
Transportation Revenue 4.90% 12/15/09 200,000 203,008
VIRGINIA 4.72%
- ---------------------------------------------------------------------------------------
Virgina State Public Building Authority
& Public Facilities Revenue,
Refunding, Series A 5.00% 08/01/12 300,000 313,641
Virginia College Building Authority,
Series A 5.00% 09/01/15 300,000 318,540
-----------
632,181
WASHINGTON 0.78%
- ---------------------------------------------------------------------------------------
Clark County, Washington School
District, GO Unlimited 5.125% 12/01/11 100,000 104,540
WISCONSIN 1.13%
- ---------------------------------------------------------------------------------------
Milwaukee, Wisconsin, Series L, GO 4.60% 12/15/13 150,000 151,710
- ---------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS 12,977,110
- ---------------------------------------------------------------------------------------
(cost $13,014,650)
See notes to portfolios of investments and notes to financial statements.
54
NEAR-TERM TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COUPON MATURITY PRINCIPAL
REPURCHASE AGREEMENT 0.64% RATE DATE AMOUNT VALUE
Joint Tri-Party Repurchase Agreement,
Bear Stearns, 06/29/07, 4.10%, due
07/02/07, repurchase price $85,164,
collateralized by U.S. Treasury
securities held in a joint tri-party
account (cost $85,135) 4.10% 07/02/07 $ 85,135 $ 85,135
- --------------------------------------------------------------------------------------
TOTAL INVESTMENTS 97.60% 13,062,245
- --------------------------------------------------------------------------------------
(cost $13,099,785)
Other assets and liabilities, net 2.40% 321,172
-----------
NET ASSETS 100% $13,383,417
-----------
<FN>
(1)Represents Yield
</FN>
See notes to portfolios of investments and notes to financial statements.
55
TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS 95.09% RATE DATE AMOUNT VALUE
ALABAMA 5.41%
- --------------------------------------------------------------------------------------
Alabama 21st Century Authority Tobacco
Settlement Revenue 5.75% 12/01/19 $ 275,000 $ 288,590
Alabama State, GO Unlimited, Series A 4.625% 09/01/22 375,000 380,152
Mountain Brook City Board of Education
Capital Outlay 4.00% 02/15/15 195,000 193,604
-----------
862,346
CALIFORNIA 6.53%
- --------------------------------------------------------------------------------------
Anaheim, California City School
District, Capital Appreciation,
Election 2002, GO Unlimited (ZCB) 4.60%(1) 08/01/28 580,000 211,723
California State, GO Unlimited 4.750% 03/01/34 205,000 204,067
Campbell, California Union High School
District, GO Unlimited 4.750% 08/01/34 300,000 300,882
San Diego, California Community College
District, GO Unlimited (ZCB) 4.34%(1) 05/01/15 450,000 323,851
-----------
1,040,523
COLORADO 0.96%
- --------------------------------------------------------------------------------------
Colorado Health Facility Authority
Revenue 5.00% 09/01/16 150,000 153,094
FLORIDA 4.90%
- --------------------------------------------------------------------------------------
Florida Board of Education, GO
Unlimited, Refunding, Series C 4.50% 06/01/28 300,000 289,731
St. Lucie County Florida Sales Tax
Revenue 5.25% 10/01/23 465,000 490,738
-----------
780,469
GEORGIA 5.83%
- --------------------------------------------------------------------------------------
Atlanta Development Authority Revenue 5.25% 07/01/22 500,000 514,565
Chatham County Hospital Authority
Revenue, Series A 5.50% 01/01/34 405,000 414,975
-----------
929,540
ILLINOIS 8.12%
- --------------------------------------------------------------------------------------
Du Page County, Refunding 5.60% 01/01/21 490,000 537,951
Illinois Development Financing
Authority Hospital Revenue, Adventist
Health Systems 5.65% 11/15/24 435,000 455,758
Illinois Regional Transportation
Authority Revenue, Series A 7.20% 11/01/20 250,000 300,678
-----------
1,294,387
See notes to portfolios of investments and notes to financial statements.
56
TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
KANSAS 8.66%
- -------------------------------------------------------------------------------------
Kansas State Development Finance
Authority Hospital Revenue, Series Z 5.00% 12/15/12 $ 500,000 $ 518,515
Kansas State Development Finance
Authority Revenue 4.00% 10/01/15 250,000 248,773
University of Kansas Hospital Authority
Health Facilities Revenue 5.625% 09/01/27 570,000 612,459
-----------
1,379,747
MARYLAND 1.97%
- -------------------------------------------------------------------------------------
Maryland State Health & Higher
Educational Facilities Authority
Revenue 5.75% 07/01/21 300,000 313,776
MICHIGAN 3.79%
- -------------------------------------------------------------------------------------
Detroit, Michigan Local Development
Financing Authority, Refunding,
Series A 5.375% 05/01/18 300,000 302,538
Macomb County Building Authority, GO
Limited 4.50% 11/01/23 300,000 300,828
-----------
603,366
MISSOURI 2.60%
- -------------------------------------------------------------------------------------
St. Louis Airport Development Program,
Prerefunded, Series A 5.00% 07/01/11 165,000 171,336
St. Louis Airport Development Program,
Unrefunded, Series A 5.00% 07/01/11 235,000 243,848
-----------
415,184
NEW JERSEY 4.92%
- -------------------------------------------------------------------------------------
New Jersey Health Care Facilities
Financing Authority Revenue 4.375% 07/01/10 460,000 461,596
New Jersey State Transportation
Authority, Series A 5.00% 06/15/13 315,000 321,895
-----------
783,491
NEW YORK 4.53%
- -------------------------------------------------------------------------------------
New York, GO Unlimited, Prerefunded,
Series H 5.25% 03/15/14 450,000 464,882
New York, GO Unlimited, Prerefunded,
Series J 5.00% 05/15/12 200,000 206,166
New York, GO Unlimited, Unrefunded
Balance, Series J 5.00% 05/15/12 50,000 51,369
-----------
722,417
See notes to portfolios of investments and notes to financial statements.
57
TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
OHIO 3.11%
- -------------------------------------------------------------------------------------
Ohio State Mental Health Facilities
Revenue 5.50% 06/01/15 $ 300,000 $ 316,665
South Euclid Special Assessment, GO
Limited Tax 6.70% 12/01/14 165,000 178,916
-----------
495,581
PENNSYLVANIA 1.58%
- -------------------------------------------------------------------------------------
Chester County Health & Educational
Facilities Authority Revenue 5.00% 05/15/08 250,000 252,443
PUERTO RICO 2.00%
- -------------------------------------------------------------------------------------
Puerto Rico Electric Power Authority
Revenue, Series II 5.125% 07/01/26 300,000 318,426
RHODE ISLAND 3.49%
- -------------------------------------------------------------------------------------
Rhode Island State Health & Educational
Building Corporation Revenue 6.50% 08/15/32 500,000 556,995
SOUTH CAROLINA 6.29%
- -------------------------------------------------------------------------------------
Piedmont Municipal Power Agency, South
Carolina Electric Revenue, Refunding,
Subseries B-3 (VR) 3.72% 01/01/34 750,000 750,000
South Carolina Jobs Economic
Development Authority Revenue 5.00% 11/01/23 250,000 253,395
-----------
1,003,395
TENNESSEE 1.34%
- -------------------------------------------------------------------------------------
Memphis, Tennessee Sanitary Sewage
System Revenue, Refunding 5.00% 05/01/20 200,000 213,474
TEXAS 15.63%
- -------------------------------------------------------------------------------------
Baytown, Texas GO Limited 4.50% 02/01/27 250,000 240,235
Duncanville, Texas Independent School
District, GO Unlimited, Prerefunded,
Series B 5.25% 02/15/32 495,000 520,374
Duncanville, Texas Independent School
District, GO Unlimited, Unrefunded,
Series B 5.25% 02/15/32 5,000 5,171
Goose Creek, Texas Independent School
District Schoolhouse, GO Unlimited,
Series A (WI) 5.25% 02/15/18 370,000 396,955
Greenville, Texas Independent School
District, GO Unlimited, Refunding 4.00% 08/15/17 120,000 115,554
Houston Community College System
Revenue, Refunding 4.00% 04/15/17 300,000 292,161
North Texas Municipal Water District
Regional Solid Waste Disposal System
Revenue 4.25% 09/01/17 385,000 384,038
Travis County, Texas, GO Limited 4.40% 03/01/26 250,000 237,160
See notes to portfolios of investments and notes to financial statements.
58
TAX FREE FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COUPON MATURITY PRINCIPAL
MUNICIPAL BONDS RATE DATE AMOUNT VALUE
TEXAS (CONT'D)
- -------------------------------------------------------------------------------------
White Settlement, Texas Independent
School District, GO Unlimited 4.125% 08/15/15 $ 300,000 $ 299,067
-----------
2,490,715
VERMONT 1.90%
- -------------------------------------------------------------------------------------
Vermont Educational & Health Buildings
Financing Agency Revenue, Vermont Law
School Project, Series A 5.375% 01/01/23 300,000 303,024
WASHINGTON 1.53%
- -------------------------------------------------------------------------------------
Spokane County, Washington School
District, GO Unlimited 5.05% 06/01/22 255,000 244,020
- -------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS 15,156,413
- -------------------------------------------------------------------------------------
(cost $14,845,135)
REPURCHASE AGREEMENT 6.35%
Joint Tri-Party Repurchase Agreement,
Bear Stearns, 06/29/07, 4.10%, due
07/02/07, repurchase price
$1,012,716, collateralized by U.S.
Treasury securities held in a joint
tri-party account (cost $1,012,370) 4.10% 07/02/07 1,012,370 1,012,370
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS 101.44% 16,168,783
- -------------------------------------------------------------------------------------
(cost $15,857,505)
Other assets and liabilities, net (1.44)% (228,791)
-----------
NET ASSETS 100% $15,939,992
-----------
<FN>
(1)Represents Yield
</FN>
See notes to portfolios of investments and notes to financial statements.
59
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS 92.82% SHARES VALUE
AEROSPACE/DEFENSE 2.96%
- ---------------------------------------------------------------------------------------
BE Aerospace, Inc. 7,500 $ 309,750*
The Boeing Co. 4,000 384,640
-----------
694,390
APPAREL 4.03%
- ---------------------------------------------------------------------------------------
Crocs, Inc. 10,000 430,300*
Guess, Inc. 4,500 216,180
Volcom, Inc. 6,000 300,780*
-----------
947,260
APPLICATIONS SOFTWARE 4.24%
- ---------------------------------------------------------------------------------------
Activision, Inc. 20,000 373,400*
Adobe Systems, Inc. 4,500 180,675*
Microsoft Corp. 10,000 294,700
Oracle Corp. 7,500 147,825*
-----------
996,600
AUTO MANUFACTURERS 1.11%
- ---------------------------------------------------------------------------------------
PACCAR, Inc. 3,000 261,120
CABLE TV 0.04%
- ---------------------------------------------------------------------------------------
Stream Communications Network, Inc. 50,000 8,500*
CELLULAR TELECOMMUNICATIONS 0.78%
- ---------------------------------------------------------------------------------------
Millicom International Cellular S.A. 2,000 183,280*
CHEMICALS - AGRICULTURAL 2.62%
- ---------------------------------------------------------------------------------------
Terra Nitrogen Co., L.P. 2,500 317,675
The Mosaic Company 7,625 297,528*
-----------
615,203
CHEMICALS & ALLIED PRODUCTS 2.71%
- ---------------------------------------------------------------------------------------
Terra Industries, Inc. 25,000 635,500*
COMPUTERS 3.12%
- ---------------------------------------------------------------------------------------
Apple Computer, Inc. 6,000 732,240*
DIVERSIFIED OPERATIONS 1.23%
- ---------------------------------------------------------------------------------------
Walter Industries, Inc. 10,000 289,600
See notes to portfolios of investments and notes to financial statements.
60
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
E-COMMERCE / SERVICES 1.02%
- ---------------------------------------------------------------------------------------
Priceline.com, Inc. 3,500 $ 240,590*
ELECTRONICS & COMPONENTS 3.09%
- ---------------------------------------------------------------------------------------
NVIDIA Corp. 5,000 206,550*
Research In Motion Ltd. 1,500 299,985*
Universal Electronics, Inc. 6,000 217,920*
-----------
724,455
ENTERTAINMENT 1.49%
- ---------------------------------------------------------------------------------------
Regal Entertaiment Group, Class A 16,000 350,880
FINANCIAL SERVICES 8.27%
- ---------------------------------------------------------------------------------------
Franklin Resources, Inc. 1,500 198,705
GFI Group, Inc. 1,500 108,720*
IntercontinentalExchange, Inc. 2,000 295,700*
MasterCard, Inc., Class A 4,000 663,480
Morgan Stanley 6,000 503,280
State Street Corp. 2,500 171,000
-----------
1,940,885
FOOD & BEVERAGES 0.42%
- ---------------------------------------------------------------------------------------
Kraft Foods, Inc., Class A 2,768 97,572
INSURANCE 0.88%
- ---------------------------------------------------------------------------------------
Assurant, Inc. 3,500 206,220
INTERNET 3.22%
- ---------------------------------------------------------------------------------------
Akamai Technologies, Inc. 8,000 389,120*
Google, Inc., Class A 400 209,352*
Stockgroup Information Systems, Inc. 131,125 158,661*
-----------
757,133
INTERNET SECURITY 0.48%
- ---------------------------------------------------------------------------------------
VASCO Data Security International, Inc. 5,000 113,800*
MACHINERY 4.08%
- ---------------------------------------------------------------------------------------
Caterpillar, Inc. 6,000 469,800
Joy Global, Inc. 3,500 204,155
Terex Corp. 3,500 284,550*
-----------
958,505
See notes to portfolios of investments and notes to financial statements.
61
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
MEDICAL - DRUGS 2.85%
- ---------------------------------------------------------------------------------------
Novo Nordisk AS, Sponsored ADR 3,000 $ 325,980
Wyeth 6,000 344,040
-----------
670,020
MEDICAL - HMO 2.08%
- ---------------------------------------------------------------------------------------
UnitedHealth Group, Inc. 6,000 306,840
WellCare Health Plans, Inc. 2,000 181,020*
-----------
487,860
MEDICAL - PRODUCTS 3.12%
- ---------------------------------------------------------------------------------------
DENTSPLY International, Inc. 5,000 191,300
Meridian Bioscience, Inc. 7,500 162,450
Stryker Corp. 6,000 378,540
-----------
732,290
METAL & MINERAL MINING 1.94%
- ---------------------------------------------------------------------------------------
Cleveland-Cliffs, Inc. 2,500 194,175
Fronteer Development Group, Inc. 7,500 89,250*
Lundin Mining Corp. 10,000 121,400*
Mines Management, Inc. 15,000 50,550*
-----------
455,375
MULTIMEDIA 0.91%
- ---------------------------------------------------------------------------------------
Dolby Laboratories, Inc., Class A 6,000 212,460*
NETWORKING PRODUCTS 1.78%
- ---------------------------------------------------------------------------------------
Cisco Systems, Inc. 15,000 417,750*
NON-FERROUS METALS 0.54%
- ---------------------------------------------------------------------------------------
Uranium One, Inc. 10,000 127,364*
NUTRITION 0.76%
- ---------------------------------------------------------------------------------------
Herbalife Ltd. 4,500 178,425
OIL & GAS - INTEGRATED 1.00%
- ---------------------------------------------------------------------------------------
ConocoPhillips 3,000 235,500
OIL & GAS DRILLING 3.22%
- ---------------------------------------------------------------------------------------
ENSCO International, Inc. 4,500 274,545
GlobalSantaFe Corp. 3,000 216,750
Nabors Industries, Ltd. 5,000 166,900*
See notes to portfolios of investments and notes to financial statements.
62
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
OIL & GAS DRILLING (CONT'D)
- ---------------------------------------------------------------------------------------
Noble Corp. 1,000 $ 97,520
-----------
755,715
OIL & GAS EQUIPMENT & SERVICES 2.78%
- ---------------------------------------------------------------------------------------
Grant Prideco, Inc. 4,000 215,320*
GulfMark Offshore, Inc. 3,000 153,660*
Tesco Corp. 9,000 283,950*
-----------
652,930
OIL & GAS EXPLORATION & PRODUCTION 1.16%
- ---------------------------------------------------------------------------------------
Canadian Oil Sands Trust 4,000 123,666
Noble Energy, Inc. 2,400 149,736
-----------
273,402
OIL & GAS REFINING & MARKETING 3.95%
- ---------------------------------------------------------------------------------------
Holly Corp. 10,000 741,900
Valero Energy Corp. 2,500 184,650
-----------
926,550
PIPELINES 1.06%
- ---------------------------------------------------------------------------------------
Mueller Water Products, Inc., Class B 16,524 247,860
PRIVATE CORRECTIONS 1.88%
- ---------------------------------------------------------------------------------------
Corrections Corporation of America 7,000 441,770*
RESTAURANTS 2.38%
- ---------------------------------------------------------------------------------------
Jack in the Box, Inc. 5,000 354,700*
McDonald's Corp. 4,000 203,040
-----------
557,740
RETAIL 2.39%
- ---------------------------------------------------------------------------------------
Gamestop Corp., Class A 10,000 391,000*
Pier 1 Imports, Inc. 20,000 169,800*
-----------
560,800
SEMICONDUCTORS 3.30%
- ---------------------------------------------------------------------------------------
KLA-Tencor Corp. 3,000 164,850
MEMC Electronic Materials, Inc. 6,000 366,720*
Tessera Technologies, Inc. 6,000 243,300*
-----------
774,870
See notes to portfolios of investments and notes to financial statements.
63
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
TELEPHONE - INTEGRATED 1.05%
- ---------------------------------------------------------------------------------------
AT&T, Inc. 5,962 $ 247,423
TELEVISION 0.83%
- ---------------------------------------------------------------------------------------
Central European Media Enterprises Ltd., Class A 2,000 195,160*
TOBACCO 1.89%
- ---------------------------------------------------------------------------------------
Altria Group, Inc. 4,000 280,560
Reynolds American, Inc. 2,500 163,000
-----------
443,560
TRANSPORTATION 4.22%
- ---------------------------------------------------------------------------------------
CSX Corp. 7,500 338,100
DryShips, Inc. 3,000 130,140
Eagle Bulk Shipping, Inc. 6,000 134,460
Genco Shipping & Trading Ltd. 3,000 123,780
Hub Group, Inc., Class A 7,500 263,700*
-----------
990,180
WIRE & CABLE PRODUCTS 1.94%
- ---------------------------------------------------------------------------------------
General Cable Corp. 6,000 454,500*
- ---------------------------------------------------------------------------------------
TOTAL COMMON STOCKS 21,793,237
- ---------------------------------------------------------------------------------------
(cost $18,198,970)
EXCHANGE-TRADED FUNDS 2.47%
DIAMONDS Trust, Series 1 2,500 335,500
Pharmaceutical HOLDRs Trust 3,000 244,920
- ---------------------------------------------------------------------------------------
TOTAL EXCHANGE-TRADED FUNDS 580,420
- ---------------------------------------------------------------------------------------
(cost $586,820)
WARRANTS 0.04%
METAL & MINERAL MINING 0.04%
- ---------------------------------------------------------------------------------------
Mines Management, Inc., Warrants (April 2012)
(cost $10,608) 7,500 7,875*
See notes to portfolios of investments and notes to financial statements.
64
ALL AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
PURCHASED OPTIONS 0.83% CONTRACTS VALUE
GOLD MINING 0.83%
- ---------------------------------------------------------------------------------------
Goldcorp, Inc., Strike Price 20, Call, Expiration Jan.
2008 (premium $12,687) 21 $ 10,710
Goldcorp, Inc., Strike Price 20, Call, Expiration Jan.
2009 (premium $133,069) 162 111,780
Goldcorp, Inc., Strike Price 25, Call, Expiration Jan.
2009 (premium $102,849) 162 72,900
- ---------------------------------------------------------------------------------------
TOTAL PURCHASED OPTIONS 195,390
- ---------------------------------------------------------------------------------------
(cost $248,605)
- ---------------------------------------------------------------------------------------
TOTAL SECURITIES 22,576,922
- ---------------------------------------------------------------------------------------
(cost $19,045,003)
PRINCIPAL
REPURCHASE AGREEMENT 4.48% AMOUNT
Joint Tri-Party Repurchase Agreement, Bear Stearns,
06/29/07, 4.10%, due 07/02/07, repurchase price
$1,052,501, collateralized by U.S. Treasury securities
held in a joint tri-party account (cost $1,052,142) $1,052,142 1,052,142
- ---------------------------------------------------------------------------------------
TOTAL INVESTMENTS 100.64% 23,629,064
- ---------------------------------------------------------------------------------------
(cost $20,097,145)
Other assets and liabilities, net (0.64)% (149,860)
-----------
NET ASSETS 100% $23,479,204
-----------
See notes to portfolios of investments and notes to financial statements.
65
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS 91.75% SHARES VALUE
ADVERTISING 1.08%
- ----------------------------------------------------------------------------------------
Focus Media Holding Ltd., ADR 20,000 $ 1,010,000*
AGRICULTURE 0.32%
- ----------------------------------------------------------------------------------------
IOI Corp., Berhad 200,000 301,231
AIRLINES 1.02%
- ----------------------------------------------------------------------------------------
China Eastern Airlines Corp., Ltd., H shares 2,000,000 954,062*@
AIRPORT OPERATIONS 0.45%
- ----------------------------------------------------------------------------------------
Beijing Capital International Airport Co., Ltd.,
H shares 300,000 422,038
APPAREL 2.41%
- ----------------------------------------------------------------------------------------
Li Ning Co., Ltd. 700,000 1,697,360
Ports Design Ltd. 200,000 562,717
-----------
2,260,077
AUTO MANUFACTURERS 0.77%
- ----------------------------------------------------------------------------------------
Great Wall Motor Co., H shares 500,000 726,417
AUTO PARTS & EQUIPMENT 0.38%
- ----------------------------------------------------------------------------------------
Xinyi Glass Holdings Co., Ltd. 400,000 357,070
BANKS 2.28%
- ----------------------------------------------------------------------------------------
China Merchants Bank Co., Ltd., H shares 700,000 2,135,129
BUILDING MATERIALS 0.62%
- ----------------------------------------------------------------------------------------
Taiwan Cement Corp. 500,000 581,857
CASINO HOTELS 0.59%
- ----------------------------------------------------------------------------------------
NagaCorp Ltd. 2,000,000 555,044
CELLULAR TELECOMMUNICATIONS 3.21%
- ----------------------------------------------------------------------------------------
China Mobile Ltd. 280,000 3,011,561
CHEMICAL & PLASTIC PRODUCTS 1.85%
- ----------------------------------------------------------------------------------------
Formosa Plastics Corp. 680,000 1,732,193
See notes to portfolios of investments and notes to financial statements.
66
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
CHEMICALS - AGRICULTURAL 2.12%
- ----------------------------------------------------------------------------------------
Sinofert Holdings Ltd. 2,500,000 $ 1,774,478
Spur Ventures, Inc. 375,000 218,218*
-----------
1,992,696
COAL 3.38%
- ----------------------------------------------------------------------------------------
China Coal Energy Co., H shares 1,000,000 1,498,875*
China Shenhua Energy Co., Ltd., H shares 400,000 1,383,773
Western Canadian Coal Corp. 110,000 284,950*
-----------
3,167,598
CONSTRUCTION 7.35%
- ----------------------------------------------------------------------------------------
China Communications Construction Co., Ltd., H shares 500,000 895,232
China National Building Material Co., Ltd., H shares 1,400,000 3,076,018
China State Construction International Holdings Ltd. 500,000 677,819
Daewoo Engineering & Construction Co., Ltd. 54,000 1,548,953
Gamuda Berhad 300,000 699,493
-----------
6,897,515
DISTRIBUTION / WHOLESALE 2.46%
- ----------------------------------------------------------------------------------------
Esprit Holdings Ltd. 125,000 1,585,840
Li & Fung Ltd. 200,000 722,580
-----------
2,308,420
DIVERSIFIED MINERALS 0.25%
- ----------------------------------------------------------------------------------------
Caledon Resources plc 135,800 98,174*
Erdene Gold, Inc. 100,000 140,786*
-----------
238,960
DIVERSIFIED OPERATIONS 3.69%
- ----------------------------------------------------------------------------------------
First Pacific Co., Ltd. 1,500,000 1,083,871
Keppel Corp., Ltd. 120,000 979,592
Luks Group Vietnam Holdings Co., Ltd. 400,000 597,504
Wharf Holdings Ltd. 200,000 799,315
-----------
3,460,282
E-COMMERCE / SERVICES 0.46%
- ----------------------------------------------------------------------------------------
NextMart, Inc. 33,445 10,870*
SINA Corp. 10,000 418,600*
-----------
429,470
See notes to portfolios of investments and notes to financial statements.
67
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
ELECTRONICS & COMPONENTS 1.85%
- ----------------------------------------------------------------------------------------
Hon Hai Precision Industry Co., Ltd. 200,000 $ 1,734,881
Yageo Corp., Sponsored GDR 1 2*
-----------
1,734,883
ENGINEERING SERVICES 0.75%
- ----------------------------------------------------------------------------------------
Singapore Technologies Engineering Ltd. 300,000 705,306
FINANCIAL SERVICES 6.01%
- ----------------------------------------------------------------------------------------
Bumiputra - Commerce Holdings Bhd 200,000 677,770
Cathay Financial Holding Co., Ltd. 414,915 994,833
Hong Kong Exchanges & Clearing Ltd. 120,000 1,697,360
Shenyin Wanguo HK Ltd. 600,000 541,743
Singapore Exchange Ltd. 270,000 1,728,000
-----------
5,639,706
FOOD & BEVERAGES 1.47%
- ----------------------------------------------------------------------------------------
China Mengniu Dairy Co., Ltd. 400,000 1,381,216
GOLD MINING 1.42%
- ----------------------------------------------------------------------------------------
Kingsgate Consolidated Ltd. 3,599 16,937
Lihir Gold Ltd. 200,000 508,770*
Olympus Pacific Minerals, Inc. 430,500 303,042*
Silk Road Resources Ltd. 210,000 264,114*
Sino Gold Ltd. 50,000 238,698*
-----------
1,331,561
HEALTH & PERSONAL CARE 0.77%
- ----------------------------------------------------------------------------------------
LG Household & Health Care Ltd. 5,000 725,226
INSURANCE 3.07%
- ----------------------------------------------------------------------------------------
China Life Insurance Co., Ltd., H shares 800,000 2,874,974
INTERNET 1.75%
- ----------------------------------------------------------------------------------------
Asia Broadband, Inc. 500,000 32,500*
Tencent Holdings Ltd. 400,000 1,608,860
-----------
1,641,360
MANUFACTURING 2.91%
- ----------------------------------------------------------------------------------------
China Infrastructure Machinery Holdings Ltd. 500,000 1,092,183
Peace Mark Holdings Ltd. 1,200,000 1,639,042
-----------
2,731,225
See notes to portfolios of investments and notes to financial statements.
68
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
MARINE SERVICES 1.05%
- ----------------------------------------------------------------------------------------
Xiamen International Port Co., Ltd., H shares 2,500,000 $ 981,558
MEDICAL - PRODUCTS 2.41%
- ----------------------------------------------------------------------------------------
Shandong Weigao Group Medical Polymer Co., Ltd.,
H shares 1,000,000 2,263,659
METAL - ALUMINUM 2.18%
- ----------------------------------------------------------------------------------------
Aluminum Corporation of China Ltd., H shares 1,000,000 1,688,152
Global Alumina Products Corp. 224,000 358,400*
-----------
2,046,552
METAL - COPPER 2.23%
- ----------------------------------------------------------------------------------------
Continental Minerals Corp. 243,080 363,761*
Jiangxi Copper Co., Ltd., H shares 900,000 1,512,431
Toledo Mining Corp. plc 26,400 214,446*
-----------
2,090,638
NON-FERROUS METALS 0.05%
- ----------------------------------------------------------------------------------------
Sterling Group Ventures, Inc. 510,000 46,410*
OIL & GAS - INTEGRATED 4.34%
- ----------------------------------------------------------------------------------------
China Petroleum & Chemical Corp., H shares 2,000,000 2,215,060
PetroChina Co., Ltd., ADR 12,500 1,858,500
-----------
4,073,560
OIL & GAS EXPLORATION & PRODUCTION 2.72%
- ----------------------------------------------------------------------------------------
Big Sky Energy Corp. 931,250 316,625*
Big Sky Energy Corp. (RS) 100,000 32,287*@
CNOOC Ltd. 1,600,000 1,812,973
Green Dragon Gas Ltd. 62,949 392,172*
-----------
2,554,057
PAPER PRODUCTS 1.83%
- ----------------------------------------------------------------------------------------
Lee & Man Paper Manufacturing Ltd. 200,000 553,765
Nine Dragons Paper Holdings Ltd. 500,000 1,165,081
-----------
1,718,846
PIPELINES 0.55%
- ----------------------------------------------------------------------------------------
China Gas Holdings Ltd. 1,200,000 514,119
See notes to portfolios of investments and notes to financial statements.
69
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
PRECIOUS METALS 0.40%
- ----------------------------------------------------------------------------------------
Golden China Resources Corp. 52,900 $ 31,776*
TVI Pacific, Inc. 2,265,714 340,245*
-----------
372,021
PUBLISHING 0.06%
- ----------------------------------------------------------------------------------------
Lingo Media, Inc. 431,000 58,656*
REAL ESTATE COMPANIES 4.72%
- ----------------------------------------------------------------------------------------
China Vanke Co., Ltd., B shares 375,000 776,454
City Developments Ltd. 80,000 903,837
Daying Modern Agricultural Co., Ltd., B shares 1 0*
IGB Corp., Berhad 1,500,000 1,177,408
Shimao Property Holdings Ltd. 700,000 1,568,447*
-----------
4,426,146
RETAIL 0.00%
- ----------------------------------------------------------------------------------------
China First Pencil Co., Ltd., B shares 1 2*
SCHOOLS 3.18%
- ----------------------------------------------------------------------------------------
Capital Alliance Group, Inc. 981,732 1,428,208*
MegaStudy Co., Ltd. 8,000 1,558,695
-----------
2,986,903
SEMICONDUCTORS 2.20%
- ----------------------------------------------------------------------------------------
Samsung Electronics Co., Ltd. 1,500 918,980
Samsung Techwin Co., Ltd. 7,500 395,356
Silicon Motion Technology Corp., ADR 30,000 744,900*
-----------
2,059,236
SHIPBUILDING 1.46%
- ----------------------------------------------------------------------------------------
Samsung Heavy Industries Co., Ltd. 28,000 1,369,919
SILVER MINING 2.25%
- ----------------------------------------------------------------------------------------
Silvercorp Metals, Inc. 124,500 2,109,179*
STEEL 1.02%
- ----------------------------------------------------------------------------------------
POSCO 2,000 960,113
TELECOMMUNICATIONS 1.44%
- ----------------------------------------------------------------------------------------
VTech Holdings Ltd. 160,000 1,350,522
See notes to portfolios of investments and notes to financial statements.
70
CHINA REGION OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
TRANSPORTATION 2.97%
- ----------------------------------------------------------------------------------------
China COSCO Holdings Co., Ltd., H shares 1,425,000 $ 2,048,419
Cosco Corp. (Singapore) Ltd. 300,000 732,735
-----------
2,781,154
- ----------------------------------------------------------------------------------------
TOTAL COMMON STOCKS 86,070,327
- ----------------------------------------------------------------------------------------
(cost $63,346,230)
EXCHANGE-TRADED FUNDS 1.02%
iShares FTSE/Xinhua A50 China Tracker 40,000 855,842
streetTRACKS Gold Trust 1,500 96,405*
- ----------------------------------------------------------------------------------------
TOTAL EXCHANGE-TRADED FUNDS 952,247
- ----------------------------------------------------------------------------------------
(cost $762,127)
WARRANTS 0.00%
METAL - COPPER 0.00%
- ----------------------------------------------------------------------------------------
Verona Development Corp., Warrants (April 2008)
(cost $0) 400,000 0*@
- ----------------------------------------------------------------------------------------
TOTAL SECURITIES 87,022,574
- ----------------------------------------------------------------------------------------
(cost $64,108,357)
PRINCIPAL
REPURCHASE AGREEMENT 9.19% AMOUNT
Joint Tri-Party Repurchase Agreement, Bear Stearns,
06/29/07, 4.10%, due 07/02/07, repurchase price
$8,619,497, collateralized by U.S. Treasury securities
held in a joint tri-party account (cost $8,616,553) $8,616,553 8,616,553
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS 101.96% 95,639,127
- ----------------------------------------------------------------------------------------
(cost $72,724,910)
Other assets and liabilities, net (1.96)% (1,834,409)
-----------
NET ASSETS 100% $93,804,718
-----------
See notes to portfolios of investments and notes to financial statements.
71
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS 86.04% SHARES VALUE
AGRICULTURE 0.13%
- ----------------------------------------------------------------------------------------------
IOI Corp., Berhad 1,150,000 $ 1,732,078
ALUMINUM 0.25%
- ----------------------------------------------------------------------------------------------
Global Alumina Products Corp. 2,200,000 3,520,000*
BUILDING MATERIALS 0.54%
- ----------------------------------------------------------------------------------------------
Polaris Minerals Corp. 604,100 7,444,585*
CHEMICALS & ALLIED PRODUCTS 0.77%
- ----------------------------------------------------------------------------------------------
OM Group, Inc. 200,000 10,584,000*
COAL 3.96%
- ----------------------------------------------------------------------------------------------
Arch Coal, Inc. 180,000 6,264,000
Bounty Industries Ltd. 22,000,000 1,660,286*+
Caledon Resources plc 3,016,600 2,180,803*
Coalcorp Mining, Inc. 1,495,660 6,288,945*
CONSOL Energy, Inc. 83,400 3,845,574
Fording Canadian Coal Trust 400,000 13,139,988
Macarthur Coal Ltd. 1,250,000 7,175,776
NEMI Northern Energy & Mining, Inc. 1,014,460 485,593*
Peabody Energy Corp. 185,000 8,950,300
Western Canadian Coal Corp. 1,855,000 4,805,294*
--------------
54,796,559
DATA PROCESSING & SOFTWARE 0.01%
- ----------------------------------------------------------------------------------------------
Stockgroup Information Systems, Inc. 154,000 186,340*
DIAMOND MINING & EXPLORATION 0.21%
- ----------------------------------------------------------------------------------------------
Diagem, Inc. 3,004,000 225,557*
Diamond Fields International Ltd. 112,000 14,191*
Diamond Fields International Ltd., 144A (RS) 9,000,000 1,083,345*@
Diamonds North Resources Ltd. 177,000 142,869*
Rockwell Diamonds, Inc., 144A 950,000 624,149*
Vaaldiam Resources Ltd. 994,001 811,658*
Verena Minerals Corp. 16,000 5,406*
--------------
2,907,175
ELECTRIC - INTEGRATED 3.73%
- ----------------------------------------------------------------------------------------------
Ameren Corp. 250,000 12,252,500
Consolidated Edison, Inc. 300,000 13,536,000
Progress Energy, Inc. 280,000 12,765,200
See notes to portfolios of investments and notes to financial statements.
72
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
ELECTRIC - INTEGRATED (CONT'D)
- ----------------------------------------------------------------------------------------------
Southern Co. 380,000 $ 13,030,200
--------------
51,583,900
FINANCIAL SERVICES 1.35%
- ----------------------------------------------------------------------------------------------
CI Financial Income Fund 318,000 8,088,413
GMP Capital Trust 438,000 9,804,590
Jovian Capital Corp. 1,038,100 769,721*
--------------
18,662,724
FISHERIES 0.34%
- ----------------------------------------------------------------------------------------------
Austevoll Seafood ASA 150,000 1,500,763*
Leroy Seafood Group ASA 100,000 2,094,285
Marine Harvest 1,000,000 1,088,689*
--------------
4,683,737
FOOD & BEVERAGES 0.17%
- ----------------------------------------------------------------------------------------------
CoolBrands International, Inc. 2,505,000 2,421,653*
FORESTRY 0.45%
- ----------------------------------------------------------------------------------------------
Sino-Forest Corp., Class A 433,900 6,230,860*
GENERAL METAL & MINERAL MINING 7.44%
- ----------------------------------------------------------------------------------------------
African Copper plc 1,530,000 2,673,048*
Altius Minerals Corp. 100,000 1,736,355*
Amerigo Resources Ltd. 1,500 3,914
Baja Mining Corp. 1,693,850 3,227,290*
Blue Pearl Mining Ltd. 260,000 3,892,252*
Calibre Mining Corp. 807,600 409,314*
Central African Mining & Exploration Co., plc 9,884,367 13,050,909*
Consolidated Minerals Ltd. 1,350,000 3,594,460
Consolidated Thompson Iron Mines Ltd. 1,442,000 8,350,594*
Crowflight Minerals, Inc. 1,129,000 996,067*
Dia Bras Exploration, Inc. 1,231,800 1,583,900*
European Nickel plc 685,782 657,591*
Farallon Resources Ltd. 3,097,700 2,238,706*
HudBay Minerals, Inc. 225,000 4,700,831*
International Minerals Corp. 584,300 3,076,562*
Investika Ltd. 706,500 4,292,140*+
JNR Resources, Inc. 1,245,300 2,805,125*
Lundin Mining Corp. 252,375 3,046,171*
MBMI Resources, Inc. 2,500 7,133*
Minefinders Corp., Ltd. 410,500 4,750,542*
Mines Management, Inc. 262,970 886,209*
See notes to portfolios of investments and notes to financial statements.
73
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
GENERAL METAL & MINERAL MINING (CONT'D)
- ----------------------------------------------------------------------------------------------
Mirabela Nickel Ltd. 36,200 $ 161,387*
MMX Mineracao e Metalicos SA 9,600 5,100,907*
North American Tungsten Corp., Ltd. 205,000 263,598*
Red Dragon Resources Corp. 3,895,000 3,253,601*+
Revett Minerals, Inc. 4,705,200 5,255,233*+
Savant Explorations Ltd. 54,191 14,241*
Selwyn Resources Ltd. 500,000 305,035*
Sterling Group Ventures, Inc. 524,700 47,748*
Stingray Resources, Inc. 2,125,000 1,755,127*
Terrane Metals Corp. 1,125,000 570,182*
Terrane Metals Corp., 144A 1,212,000 614,276*
Thompson Creek Metals Co., Inc. 74,000 1,107,795*
Titanium Resources Group Ltd. 1,000,000 1,425,786*
Toledo Mining Corp., plc 318,700 2,588,789*
Zimasco Consolidated Enterprises Ltd. (RS) 22,000 4,840*@
Zinifex Ltd. 905,000 14,442,368
--------------
102,890,026
GOLD & COPPER MINING 3.50%
- ----------------------------------------------------------------------------------------------
Continental Minerals Corp. 1,026,227 1,532,773*
European Minerals Corp. 1,503,250 2,215,123*
Fortress Minerals Corp. 703,100 752,296*
Global Copper Corp. 215,400 616,613*
Ivanhoe Mines Ltd. 531,000 7,525,553*
Los Andes Copper Ltd. 1,750,000 936,224*
Northern Dynasty Minerals Ltd. 1,250,000 14,665,165*^
Northern Dynasty Minerals Ltd., 144A 250,000 2,933,033*
Northern Orion Resources, Inc. 1,817,145 10,352,499*
Northern Peru Copper Corp. 431,100 4,535,765*
Northgate Minerals Corp. 1,150 3,303*
Taseko Mines Ltd. 620,000 2,298,559*
--------------
48,366,906
GOLD MINING 1.99%
- ----------------------------------------------------------------------------------------------
Canadian Gold Hunter Corp. 1,061,000 1,991,647*
Century Mining Corp. 292,661 238,974*
Chesapeake Gold Corp. 327,057 2,118,066*
Corona Gold Ltd. 50,000 424*@
Crystallex International Corp. 155,000 643,250*
GBS Gold International, Inc. 618,700 1,573,680*
Glencairn Gold Corp. 700,000 361,349*
Gold Fields Ltd. 265,000 4,101,958
Gold Fields Ltd., Sponsored ADR 60,000 942,000
Kinross Gold Corp. 875 10,175*
Medoro Resources Ltd. 830,514 779,496*
See notes to portfolios of investments and notes to financial statements.
74
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
GOLD MINING (CONT'D)
- ----------------------------------------------------------------------------------------------
Metallica Resources, Inc. 250,000 $ 1,154,442*
Olympus Pacific Minerals, Inc. 375,000 263,973*
Pacific Ridge Exploration Ltd. 125,000 34,023*
Peak Gold Ltd. 11,239,000 6,962,073*
Planet Exploration, Inc. 160,000 87,099*
QGX Ltd. 382,300 1,151,798*
Red Back Mining, Inc. 240,980 1,198,737*
Reunion Gold Corp. 245,000 275,940*
Rusoro Mining Ltd. 52,000 129,823*
Rusoro Mining Ltd., 144A 433,333 1,081,858*
Silk Road Resources Ltd. 240,000 301,844*
TVI Pacific, Inc. 5,867,428 881,120*
Virginia Gold Mines, Inc. 213,100 1,172,055*
X-Cal Resources Ltd. 412,500 120,020*
--------------
27,575,824
GOLD/MINERAL ROYALTY COMPANIES 0.58%
- ----------------------------------------------------------------------------------------------
Aberdeen International, Inc. 256,250 191,204*
International Royalty Corp. 1,211,350 7,810,760
--------------
8,001,964
INDEPENDENT POWER PRODUCERS 1.70%
- ----------------------------------------------------------------------------------------------
Mirant Corp. 245,000 10,449,250*
Reliant Energy, Inc. 485,000 13,070,750*
--------------
23,520,000
MINING MACHINERY 0.91%
- ----------------------------------------------------------------------------------------------
Joy Global, Inc. 215,000 12,540,950
OIL & GAS - INTEGRATED 12.28%
- ----------------------------------------------------------------------------------------------
ConocoPhillips 365,000 28,652,500
Marathon Oil Corp. 590,000 35,376,400
Occidental Petroleum Corp. 475,000 27,493,000
PetroChina Co., Ltd., ADR 200,000 29,736,000
Petroleo Brasileiro S.A., ADR 270,000 28,803,600
Suncor Energy, Inc. 220,000 19,782,400
--------------
169,843,900
OIL & GAS DRILLING 4.17%
- ----------------------------------------------------------------------------------------------
Diamond Offshore Drilling, Inc. 110,000 11,171,600
Noble Corp. 434,500 42,372,440
See notes to portfolios of investments and notes to financial statements.
75
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
OIL & GAS DRILLING (CONT'D)
- ----------------------------------------------------------------------------------------------
Xtreme Coil Drilling Corp. 400,000 $ 4,129,710*
--------------
57,673,750
OIL & GAS EQUIPMENT & SERVICES 10.58%
- ----------------------------------------------------------------------------------------------
BJ Services Co. 400,000 11,376,000
Blackwatch Energy Services Trust 285,000 468,112
Cameron International Corp. 220,000 15,723,400*
Grant Prideco, Inc. 260,000 13,995,800*
McDermott International, Inc. 577,500 48,001,800*
Petroleum Geo-Services ASA 450,000 11,236,646*
Petroleum Geo-Services ASA, ADR 40,000 986,800
Petrowest Energy Services Trust 125,000 867,005
Schlumberger Ltd. 515,000 43,744,100
--------------
146,399,663
OIL & GAS EXPLORATION & PRODUCTION - JUNIOR 6.22%
- ----------------------------------------------------------------------------------------------
Abraxas Petroleum Corp. 1,005,000 4,512,450*
Bankers Petroleum Ltd. 2,600,000 1,268,947*
Big Sky Energy Corp. 4,072,350 1,384,599*
Big Sky Energy Corp. (RS) 1,400,000 452,016*@
Coastal Energy Co. 3,100,000 2,153,080*
Coastal Energy Co., 144A 4,800,000 3,333,803*
Energy XXI Acquisition Corp. 419,000 2,534,950*
Exile Resources, Inc. 2,100,000 482,895*+
Foothills Resources, Inc. 12,000 13,320*
Foothills Resources, Inc. (RS) 1,266,667 1,237,534*@
Geopark Holdings Ltd., 144A 635,000 4,724,524*
Gran Tierra Energy, Inc. 3,883,675 5,514,818*
Green Dragon Gas Ltd. 828,831 5,163,617*
Ivory Energy, Inc. 4,753,166 3,078,216*+
Legacy Energy LLC, 144A (RS) 263,158 5,000,000*@
Pacific Stratus Energy Ltd. 493,450 6,664,551*
Pearl Exploration and Production Ltd. 876,900 4,172,775*
Royalite Petroleum Co., Inc. 13,000 16,900*+
Royalite Petroleum Co., Inc. (RS) 2,233,333 2,293,633*+@
Silverwing Energy, Inc. 1,149,400 237,334*
Sound Oil plc 13,655,500 1,302,559*
Tyner Resources Ltd. 890,000 162,889*
Verona Development Corp. 658,800 129,849*
White Nile Ltd. 13,229,000 30,249,466*
--------------
86,084,725
See notes to portfolios of investments and notes to financial statements.
76
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
OIL & GAS EXPLORATION & PRODUCTION - SENIOR 8.64%
- ----------------------------------------------------------------------------------------------
Addax Petroleum Corp. 200,000 $ 7,478,530
CNOOC Ltd., ADR 200,000 22,738,000
Goodrich Petroleum Corp. 364,600 12,626,098*
Noble Energy, Inc. 450,000 28,075,500
OPTI Canada, Inc. 769,100 16,400,537*
Petrobank Energy & Resources Ltd. 316,500 7,949,261*
Talisman Energy, Inc. 670,000 12,954,151
Western Oil Sands, Inc., Class A 340,000 11,328,547*
--------------
119,550,624
OIL & GAS REFINING & MARKETING 5.20%
- ----------------------------------------------------------------------------------------------
BA Energy, Inc. (RS) 421,100 3,754,705*@
Frontier Oil Corp. 326,250 14,279,962
Holly Corp. 212,000 15,728,280
Sunoco, Inc. 175,000 13,944,000
Tesoro Corp. 203,000 11,601,450
Valero Energy Corp. 170,000 12,556,200
--------------
71,864,597
OIL & GAS ROYALTY TRUSTS 2.16%
- ----------------------------------------------------------------------------------------------
Canadian Oil Sands Trust 500,000 15,458,257
Harvest Energy Trust 261,700 8,093,308
San Juan Basin Royalty Trust 200,000 6,362,000
--------------
29,913,565
PLATINUM GROUP METALS 2.37%
- ----------------------------------------------------------------------------------------------
Anglo Platinum Ltd. 53,000 8,728,922
Anooraq Resources Corp. 739,000 1,838,049*
Aquarius Platinum Ltd. 6,862 209,005
Beartooth Platinum Corp. 2,557,500 276,045*
Eastern Platinum Ltd. 6,712,200 15,056,697*
Lonmin plc 70,000 5,650,934
Osmium Holdings S.A. (RS) 104 10,400*@
Platinum Group Metals Ltd. 242,700 981,779*
--------------
32,751,831
POTASH & AGRICULTURAL FERTILIZERS 0.79%
- ----------------------------------------------------------------------------------------------
Agrium, Inc. 75,000 3,281,250
Potash Corporation of Saskatchewan, Inc. 70,000 5,457,900
Spur Ventures, Inc. 435,000 253,132*
Terra Industries, Inc. 75,000 1,906,500*
--------------
10,898,782
See notes to portfolios of investments and notes to financial statements.
77
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
POWER TECHNOLOGY 0.01%
- ----------------------------------------------------------------------------------------------
Dynex Power, Inc. 660,000 $ 103,759*
SILVER MINING 0.85%
- ----------------------------------------------------------------------------------------------
Silvercorp Metals, Inc. 694,060 11,758,208*
STEEL MANUFACTURING 0.52%
- ----------------------------------------------------------------------------------------------
POSCO, ADR 60,000 7,200,000
SUGAR/ETHANOL 0.25%
- ----------------------------------------------------------------------------------------------
Infinity Bio-Energy Ltd. 687,400 3,522,925*
TRANSPORTATION 2.05%
- ----------------------------------------------------------------------------------------------
Burlington Northern Santa Fe Corp. 15,000 1,277,100
DryShips, Inc. 625,000 27,112,500
--------------
28,389,600
URANIUM 1.92%
- ----------------------------------------------------------------------------------------------
Energy Metals Corp. 475,000 6,954,808*
Fronteer Development Group, Inc. 649,000 7,735,980*
Paladin Resources Ltd. 1,025,000 7,119,058*
UMC Energy plc 1,000,000 843,423*
Uranium North Resources Corp. 34,666 27,331*
Uranium One, Inc. 22,500 286,569*
Ur-Energy, Inc. 600,000 2,522,878*
Western Prospector Group Ltd. 188,100 1,023,962*
--------------
26,514,009
- ----------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS 1,190,119,219
- ----------------------------------------------------------------------------------------------
(cost $921,214,994)
PREFERRED STOCK 0.36%
OIL & GAS EXPLORATION & PRODUCTION - JUNIOR 0.36%
- ----------------------------------------------------------------------------------------------
Trident Resources Corp., Series B, Preferred Stock (RS)
(cost $5,000,000) 80,000 5,000,000*@
See notes to portfolios of investments and notes to financial statements.
78
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
WARRANTS 6.54% SHARES VALUE
COAL 0.15%
- ----------------------------------------------------------------------------------------------
Bounty Industries Ltd., Warrants (December 2011) 5,500,000 $ 0*@
Coalcorp Mining, Inc., Warrants (September 2007) 71,428 18,771*@
Coalcorp Mining, Inc., Warrants (February 2011) 1,147,070 1,614,909*
Coalcorp Mining, Inc., Warrants (August 2011) 886,928 474,493*
--------------
2,108,173
DIAMOND MINING & EXPLORATION 0.01%
- ----------------------------------------------------------------------------------------------
Rockwell Diamonds, Inc., Warrants (November 2008) 950,000 89,164*@
SouthernEra Diamonds, Inc., Warrants (November 2008) 100,000 6,570*
--------------
95,734
GENERAL METAL & MINERAL MINING 0.59%
- ----------------------------------------------------------------------------------------------
Baja Mining Corp., Warrants (April 2008) 1,055,500 772,716*@
Baja Mining Corp., Warrants (April 2009) 61,770 67,831*
Blue Pearl Mining Ltd., Warrants (October 2011) 130,000 1,135,952*
Breakwater Resources Ltd., Warrants (January 2009) 2,902,750 4,740,518*
Calibre Mining Corp., Warrants (January 2008) 187,500 0*@
Farallon Resources Ltd., Warrants (November 2008) 3,000,000 478,671*@
Mines Management, Inc., Warrants (April 2012) 140,000 147,000*
Red Dragon Resources Corp., Warrants (December 2007) 1,860,000 0*@
Selwyn Resources Ltd., Warrants (March 2008) 125,000 0*@
Stingray Resources, Inc., Warrants (April 2009) 1,000,000 183,021*
Terrane Metals Corp., Warrants (November 2008) 606,000 0*@
Terrane Metals Corp., Warrants (June 2012) 562,500 110,869*
Thompson Creek Metals Co., Inc., Warrants (October 2011) 53,500 467,488*
--------------
8,104,066
GOLD & COPPER MINING 0.62%
- ----------------------------------------------------------------------------------------------
Continental Minerals Corp., Warrants (February 2008) 356,060 0*@
European Minerals Corp., Warrants (December 2008) 219,125 106,946*
European Minerals Corp., Warrants (April 2010) 950,000 570,651*
European Minerals Corp., Warrants (March 2011) 665,000 318,316*
Los Andes Copper Ltd., Warrants (February 2008) 1,750,000 0*@
Northern Orion Resources, Inc., Warrants (May 2008) 1,689,920 6,629,936*
Northern Orion Resources, Inc., Warrants (February 2010) 593,993 1,031,383*
--------------
8,657,232
GOLD MINING 2.35%
- ----------------------------------------------------------------------------------------------
Agnico-Eagle Mines Ltd., Warrants (November 2007) 177,600 3,179,040*
Chesapeake Gold Corp., Warrants (February 2012) 96,178 380,487*
Glencairn Gold Corp., Warrants (November 2008) 336,700 34,762*
Goldcorp, Inc., Warrants (June 2011) 1,463,766 13,834,425*
IAMGOLD Corp., Warrants (August 2008) 353,540 298,640*
See notes to portfolios of investments and notes to financial statements.
79
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
WARRANTS SHARES VALUE
GOLD MINING (CONT'D)
- ----------------------------------------------------------------------------------------------
Kinross Gold Corp., Warrants (October 2007) 128,590 $ 446,556*
Kinross Gold Corp., Warrants (December 2007) 2,461,877 1,247,748*
Kinross Gold Corp., Warrants (September 2011) 109,400 200,225*
Metallica Resources, Inc., Warrants (December 2008) 259,000 435,131*
Peak Gold Ltd., Warrants (April 2012) 1,397,500 413,170*
Red Back Mining, Inc., Warrants (July 2007) 150,000 464,592*@
Rusoro Mining Ltd., Warrants (November 2011) 216,667 0*@
Yamana Gold, Inc., Warrants (November 2008) 2,484,850 11,637,713*
--------------
32,572,489
OIL & GAS EXPLORATION & PRODUCTION - JUNIOR 0.84%
- ----------------------------------------------------------------------------------------------
Bankers Petroleum Ltd., Warrants (November 2009) 3,033,600 512,505*
Coastal Energy Co., Warrants (July 2010) 1,000,000 0*@
Energy XXI Acquisition Corp., Warrants (October 2009) 790,000 1,244,250*
Exile Resources, Inc., Warrants (May 2008) 1,050,000 0*@
Foothills Resources, Inc., Warrants (September 2011) (RS) 633,334 0*@
Gran Tierra Energy, Inc., Warrants (June 2011) 1,550,000 573,500*@
Ivory Energy, Inc., Warrants (February 2008) 2,499,916 0*@
Ivory Energy, Inc., Warrants (December 2008) 650,000 0*@
Pacific Stratus Energy Ltd., Warrants (July 2007) 160,000 1,710,451*@
Pacific Stratus Energy Ltd., Warrants (July 2008) 748,000 7,294,308*@
Royalite Petroleum Co., Inc., Warrants (January 2008) (RS) 675,000 240,300*@
Royalite Petroleum Co., Inc., Warrants (February 2008) (RS) 441,667 0*@
Silverwing Energy, Inc., Warrants (February 2008) 1,075,000 60,538*
Trident Resources Corp., Warrants (March 2013) (RS) 80,000 0*@
--------------
11,635,852
PLATINUM GROUP METALS 0.08%
- ----------------------------------------------------------------------------------------------
Eastern Platinum Ltd., Warrants (April 2008) 348,700 258,551*
Eastern Platinum Ltd., Warrants (March 2009) 900,000 794,031*
--------------
1,052,582
SILVER MINING 1.75%
- ----------------------------------------------------------------------------------------------
Silver Wheaton Corp., Warrants (August 2009) 6,735,920 10,621,189*
Silver Wheaton Corp., Warrants (November 2009) 4,261,320 6,159,306*
Silver Wheaton Corp., Warrants (December 2010) 1,362,840 7,482,861*
--------------
24,263,356
URANIUM 0.15%
- ----------------------------------------------------------------------------------------------
Denison Mines Corp., Warrants (March 2011) 126,800 2,023,183*
- ----------------------------------------------------------------------------------------------
TOTAL WARRANTS 90,512,667
- ----------------------------------------------------------------------------------------------
(cost $59,910,434)
See notes to portfolios of investments and notes to financial statements.
80
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
SPECIAL WARRANTS 0.01%
SHARES VALUE
PLATINUM GROUP METALS 0.01%
- ----------------------------------------------------------------------------------------------
African Minerals, Special Warrants (RS)
(cost $75,000) 12,500 $ 94,009*@
UNITS 0.45%
COAL 0.32%
- ----------------------------------------------------------------------------------------------
Western Canadian Coal Corp., 144A, Units (RS) 1,700,000 4,403,773*@
GOLD MINING 0.08%
- ----------------------------------------------------------------------------------------------
Red Back Mining, Inc., Units (RS) 240,000 1,134,169*@
GOLD/MINERAL ROYALTY COMPANIES 0.05%
- ----------------------------------------------------------------------------------------------
Aberdeen International, Inc., Units (RS) 1,000,000 746,163*@
- ----------------------------------------------------------------------------------------------
TOTAL UNITS 6,284,105
- ----------------------------------------------------------------------------------------------
(cost $5,662,443)
PURCHASED OPTIONS 1.64% CONTRACTS
EXCHANGE-TRADED FUNDS 0.25%
- ----------------------------------------------------------------------------------------------
CurrencyShares Canadian Dollar Trust, Strike Price 95,
Put, Expiration Dec. 2007 (premium $1,228,812) 6,298 1,369,815
Energy Select SPDR, Strike Price 62, Put, Expiration
Sept. 2007 (premium $1,524,250) 7,500 525,000
Oil Service HOLDRs Trust, Strike Price 155, Put,
Expiration Oct. 2007 (premium $2,702,000) 4,000 1,520,000
--------------
3,414,815
GOLD MINING 0.40%
- ----------------------------------------------------------------------------------------------
Crystallex International Corp., Strike Price 2.50,
Call, Expiration Jan. 2008 (premium $416,503) 2,769 526,110
Crystallex International Corp., Strike Price 2.50,
Call,Expiration Jan. 2009 (premium $359,000) 2,031 477,285
Gold Fields Ltd., Strike Price 12.50, Call, Expiration
Jan. 2008 (premium $273,200) 400 152,000
Goldcorp, Inc., Strike Price 20, Call, Expiration Jan.
2008 (premium $135,679) 193 98,430
Goldcorp, Inc., Strike Price 20, Call, Expiration Jan.
2009 (premium $1,433,727) 1,732 1,195,080
Goldcorp, Inc., Strike Price 25, Call, Expiration Jan.
2008 (premium $35,464) 88 20,240
See notes to portfolios of investments and notes to financial statements.
81
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
PURCHASED OPTIONS CONTRACTS VALUE
GOLD MINING (CONT'D)
- ----------------------------------------------------------------------------------------------
Goldcorp, Inc., Strike Price 25, Call, Expiration Jan. 2009
(premium $1,090,071) 1,707 $ 768,150
Philadelphia Stock Exchange Gold & Silver Index, Strike
Price 140, Put, Expiration Sept. 2007 (premium
$2,532,500) 2,500 2,225,000
--------------
5,462,295
OIL & GAS - INTEGRATED 0.51%
- ----------------------------------------------------------------------------------------------
Suncor Energy, Inc., Strike Price 75, Call, Expiration
Jan. 2008 (premium $4,029,585) 2,435 4,796,950
Suncor Energy, Inc., Strike Price 80, Call, Expiration
Jan. 2008 (premium $2,176,285) 1,445 2,251,310
--------------
7,048,260
OIL & GAS DRILLING 0.38%
- ----------------------------------------------------------------------------------------------
Ensco International, Inc., Strike Price 55, Call, Jan. 2008
(premium $1,486,000) 2,000 2,050,000
GlobalSantaFe Corp., Strike Price 65, Call, Expiration
Jan. 2008 (premium $1,956,760) 3,000 3,270,000
--------------
5,320,000
OIL & GAS EXPLORATION & PRODUCTION - JUNIOR 0.10%
- ----------------------------------------------------------------------------------------------
Delta Petroleum Corp., Strike Price 25, Call,
Expiration Jan. 2009 (premium $2,340,521) 3,900 1,365,000
- ----------------------------------------------------------------------------------------------
TOTAL PURCHASED OPTIONS 22,610,370
- ----------------------------------------------------------------------------------------------
(cost $23,720,357)
PRINCIPAL
NOTE UNITS 0.97% AMOUNT
COAL 0.49%
- ----------------------------------------------------------------------------------------------
Coalcorp Mining, Inc., 12.00%, maturity 8/31/11 $ 2,999,000 3,163,945
Western Canadian Coal Corp., 7.50%, maturity 3/24/11 4,000,000 3,679,197
--------------
6,843,142
GOLD & COPPER MINING 0.48%
- ----------------------------------------------------------------------------------------------
New Gold, Inc., 10.00%, maturity 6/28/17 7,000 6,569,994@
- ----------------------------------------------------------------------------------------------
TOTAL NOTE UNITS 13,413,136
- ----------------------------------------------------------------------------------------------
(cost $12,612,014)
See notes to portfolios of investments and notes to financial statements.
82
GLOBAL RESOURCES FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
RIGHTS 0.02% SHARES VALUE
GOLD MINING 0.02%
- ----------------------------------------------------------------------------------------------
Chesapeake Gold Corp., Series 1, Class A, Rights (RS) 19,235 $ 214,655*@
OIL & GAS EQUIPMENT & SERVICES 0.00%
- ----------------------------------------------------------------------------------------------
Blackwatch Energy Services Trust 285,000 1,337*
- ----------------------------------------------------------------------------------------------
TOTAL RIGHTS 215,992
- ----------------------------------------------------------------------------------------------
(cost $303,552)
- ----------------------------------------------------------------------------------------------
TOTAL SECURITIES 1,328,249,498
- ----------------------------------------------------------------------------------------------
(cost $1,028,498,794)
PRINCIPAL
REPURCHASE AGREEMENT 4.51% AMOUNT
Joint Tri-Party Repurchase Agreement, Bear Stearns,
06/29/07, 4.10%, due 07/02/07, repurchase price
$62,425,683, collateralized by U.S. Treasury
securities held in a joint tri-party account
(cost $62,404,362) $62,404,362 62,404,362
- ----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS 100.54% 1,390,653,860
- ----------------------------------------------------------------------------------------------
(cost $1,090,903,156)
Other assets and liabilities, net (0.54)% (7,403,453)
--------------
NET ASSETS 100% $1,383,250,407
--------------
SHARES SUBJECT
CALL OPTIONS WRITTEN TO CALL VALUE
- ----------------------------------------------------------------------------------------------
Northern Dynasty Minerals Ltd., Strike Price 12.50,
Expiration Aug. 2007 (premiums received $43,349)
(Note 1 E) 50,000 $ 35,000
See notes to portfolios of investments and notes to financial statements.
83
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS 61.02% SHARES VALUE
DATA PROCESSING & SOFTWARE 0.13%
- ---------------------------------------------------------------------------------------------
Stockgroup Information Systems, Inc. 986,000 $ 1,166,043*
DIAMOND MINING & EXPLORATION 1.14%
- ---------------------------------------------------------------------------------------------
Aber Diamond Corp. 87,000 3,343,798
Diagem, Inc. 3,197,500 240,086*
Diamond Fields International Ltd. 1,812,000 229,593*
Diamonds North Resources Ltd. 2,851,400 2,301,566*+
Metalex Ventures Ltd. 121,000 47,698*
Rockwell Diamonds, Inc. 93,800 61,627*
Rockwell Diamonds, Inc., 144A 2,575,000 1,691,773*
Shore Gold, Inc. 360,000 1,655,638*
Tahera Diamond Corp. 160,000 99,113*
Vaaldiam Resources Ltd. 1,102,999 900,661*
------------
10,571,553
FINANCIAL SERVICES 1.14%
- ---------------------------------------------------------------------------------------------
CI Financial Income Fund 70,000 1,780,468
GMP Capital Trust 325,800 7,293,003
Jovian Capital Corp. 1,938,100 1,437,044*
------------
10,510,515
GOLD/MINERAL EXPLORATION & DEVELOPMENT 19.82%
- ---------------------------------------------------------------------------------------------
African Gold Group, Inc. 509,900 574,293*
Africo Resources Ltd. 25,227 52,090*
Alexis Minerals Corp. 80,000 70,581*
Amarc Resources Ltd. 641,545 379,345*
Amerix Precious Metals Corp. 615,275 179,019*
Andean Resources Ltd. 647,007 523,941*
Andina Minerals, Inc. 432,600 1,242,438*
Arizona Star Resources Corp. 679,100 7,415,954*
Atikwa Minerals Corp. 2,784,333 274,396*+
AuEx Ventures, Inc. 102,100 202,197*
Aurelian Resources, Inc. 102,050 2,476,900*
Bendigo Mining NL 1,500,000 413,376*
Brazauro Resources Corp. 352,000 237,871*
Canadian Gold Hunter Corp. 859,000 1,612,464*
Candente Resource Corp. 260,000 358,722*
Carnavale Resources Ltd. (RS) 1,142,857 1,355,944*@
Carnavale Resources Ltd. 1,058,000 1,426,438*
Carpathian Gold, Inc. 962,300 1,336,716*
Central African Gold plc 1,610,000 1,762,051*
Central African Mining & Exploration Co., plc 2,475,600 3,268,680*
Chesapeake Gold Corp. 1,027,749 6,655,843*+
See notes to portfolios of investments and notes to financial statements.
84
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
GOLD/MINERAL EXPLORATION & DEVELOPMENT (CONT'D)
- --------------------------------------------------------------------------------------------
Continental Minerals Corp. 743,946 $ 1,110,211*
Continental Precious Minerals, Inc. 170,000 406,101*
Coral Gold Resources Ltd. 67,000 172,932*
Corona Gold Ltd. 812,500 6,890*@
Corriente Resources, Inc., Class A 604,000 2,380,966*
Dumont Nickel, Inc. 2,126,500 269,443*
Eastmain Resources, Inc. 563,000 380,459*
ECU Silver Mining, Inc. 1,071,300 2,372,958*
Erdene Gold, Inc. 666,700 938,617*
European Minerals Corp. 2,532,300 3,731,485*
EXMIN Resources, Inc. 1,124,000 495,828*
EXMIN Resources, Inc., 144A 1,000,000 441,128*
Farallon Resources Ltd. 2,300,500 1,662,570*
First Point Minerals Corp. 1,904,000 312,732*
Fortress Minerals Corp. 507,300 542,796*
Frontier Pacific Mining Corp. 1,416,500 1,076,883*
Gabriel Resources Ltd. 1,223,800 5,478,930*
Gold Summit Corp. 333,000 42,194*
Golden China Resources Corp. 484,000 290,732*
Golden China Resources Corp., 144A 900,000 540,617*
Golden Odyssey Mining, Inc. 1,585,000 416,538*
Grandview Gold, Inc. 1,388,000 638,341*+
Great Basin Gold Ltd. 2,141,000 5,425,595*
Greystar Resources Ltd. 377,400 2,479,516*
Guyana Goldfields, Inc. 128,000 1,222,995*
Inca Pacific Resources, Inc. 210,700 253,129*
International Minerals Corp. 1,020,100 5,371,215*
Ivanhoe Mines Ltd. 1,448,500 20,528,744*
Kings Minerals NL 11,650,000 9,779,830*
Lake Shore Gold Corp. 614,000 1,020,020*
Latitude Resources plc 2,970,000 193,837*
Laurion Mineral Exploration, Inc. 179,000 16,800*
Leyshon Resources Ltd. 2,270,000 1,208,003*
Linear Gold Corp. 1,192,600 4,018,428*
Marengo Mining Ltd. 400,000 135,672*
Medoro Resources Ltd. 605,442 568,250*
Metallic Ventures Gold, Inc. 1,312,800 2,612,170*
Metallica Resources, Inc. 499,900 2,308,422*
Mindoro Resources Ltd 1,606,500 1,553,048*
Minefinders Corp., Ltd. 867,500 10,039,209*
Mirasol Resources Ltd. 120,000 109,250*
Moss Lake Gold Mines Ltd. 2,998,500 759,862*+
Moto Goldmines Ltd. 475,000 1,836,783*
Moydow Mines International, Inc. 340,000 63,823*
Northern Dynasty Minerals Ltd. 892,150 10,466,822*
Northern Dynasty Minerals Ltd., 144A 250,000 2,933,033*
See notes to portfolios of investments and notes to financial statements.
85
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
GOLD/MINERAL EXPLORATION & DEVELOPMENT (CONT'D)
- --------------------------------------------------------------------------------------------
OceanaGold Corp. 300,000 $ 985,499*
Odyssey Resources Ltd. 2,551,000 287,315*
Olympus Pacific Minerals, Inc. 1,477,000 1,039,702*
Oxus Gold plc 200,000 191,778*
Pacific North West Capital Corp. 1,646,466 1,081,727*
Pacific Rim Mining Corp. 5,122,600 5,481,182*
Paragon Minerals Corp. 34,649 19,512*
Perseverance Corp., Ltd. 528,887 136,783*
Planet Exploration, Inc. 856,000 465,981*
Platte River Gold U.S., Inc. (RS) 773,500 2,320,500*@
Premier Gold Mines Ltd. 386,500 841,597*
QGX Ltd. 972,200 2,929,055*
Radius Gold, Inc. 1,561,700 1,026,036*
Reunion Gold Corp. 1,977,300 2,227,003*
Romarco Minerals, Inc. 7,896,853 2,445,878*+
Rubicon Minerals Corp. 169,600 302,445*
Rusoro Mining Ltd. 144,000 359,510*
Rusoro Mining Ltd., 144A 1,120,000 2,796,189*
San Anton Resource Corp. 1,160,900 1,492,733*
Simberi Mining Corp. 100,000 7,039*
Solitario Resources Corp. 858,700 4,061,991*
Southwestern Resources Corp. 27,000 142,166*
St. Andrew Goldfields Ltd. 807,549 644,250*
Stratagold Corp. 2,569,400 1,471,054*
Strongbow Exploration, Inc. 770,000 476,982*
Sunridge Gold Corp. 100,000 189,591*
Terrane Metals Corp. 2,621,000 1,328,397*
Terrane Metals Corp., 144A 951,000 481,994*
US Gold Canadian Acquisition 1,378 7,553*
Vedron Gold, Inc. 5,325,010 1,799,244*+
Verena Minerals Corp. 1,688,000 570,350*
Victoria Resources Corp. 217,000 146,642*
Virginia Gold Mines, Inc. 490,800 2,699,412*
Wesdome Gold Mines Ltd. 389,000 492,890*
West Timmins Mining, Inc. 675,000 506,828*
X-Cal Resources Ltd. 4,224,500 1,229,147*
------------
183,119,021
GOLD/MINERAL ROYALTY COMPANIES 1.75%
- --------------------------------------------------------------------------------------------
Aberdeen International, Inc. 2,260,500 1,686,703*+
International Royalty Corp. 627,750 4,047,719
Royal Gold, Inc. 437,500 10,399,375^
------------
16,133,797
See notes to portfolios of investments and notes to financial statements.
86
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
INTERMEDIATE & JUNIOR GOLD PRODUCERS 20.39%
- ---------------------------------------------------------------------------------------------
Agnico-Eagle Mines Ltd. 30,000 $ 1,095,000
Aurizon Mines Ltd. 407,100 1,341,143*
Avnel Gold Mining Ltd. 4,900 3,081*
Century Mining Corp. 2,694,559 2,200,259*
Crystallex International Corp. 849,435 3,530,691*
DRDGOLD Ltd., Sponsored ADR 25,000 18,275*
Eldorado Gold Corp. 470,000 2,752,640*
Emperor Mines Ltd. 1,030,000 100,440*
GBS Gold International, Inc. 1,640,250 4,172,019*
Glencairn Gold Corp. 3,223,000 1,663,757*
High River Gold Mines Ltd. 2,416,900 6,578,450*
IAMGOLD Corp. 1 8
Jaguar Mining, Inc. 932,877 6,452,957*
Kingsgate Consolidated Ltd. 380,276 1,789,625
Meridian Gold, Inc. 1,122,780 30,946,412*^
Nevsun Resources Ltd. 100,000 249,660*
Northern Orion Resources, Inc. 6,399,360 36,457,943*
Northgate Minerals Corp. 107,139 309,245*
Peak Gold Ltd. 10,360,000 6,417,570*
Randgold Resources Ltd., ADR 1,564,634 34,719,228
Red Back Mining, Inc. 573,700 2,853,827*
Resolute Mining Ltd. 1,250,000 1,536,909*
Revett Minerals, Inc. 2,581,800 2,883,610*
Silvercorp Metals, Inc. 1,355,940 22,971,249*
Sino Gold Ltd. 1,000,000 4,773,958*
TVI Pacific, Inc. 11,915,856 1,789,419*
US Gold Corp. 1,422,406 7,863,317*
Yamana Gold, Inc. 264,000 2,931,268^
------------
188,401,960
METAL & MINERAL MINING & EXPLORATION 4.80%
- ---------------------------------------------------------------------------------------------
Amerigo Resources Ltd. 1,685,200 4,397,068
AMT International Mining Corp. 1,000,000 15,956*@
Baja Mining Corp. 886,300 1,688,666*
Blue Pearl Mining Ltd. 200,000 2,994,040*
Breakwater Resources Ltd. 450,000 1,161,481*
Caledon Resources plc 3,252,100 2,351,054*
Calibre Mining Corp. 2,343,200 1,187,600*
Coalcorp Mining, Inc. 58,071 244,177*
Dia Bras Exploration, Inc. 1,218,800 1,567,184*
European Nickel plc 347,927 333,624*
Herald Resources Ltd. 500,000 593,565*
HudBay Minerals, Inc. 47,000 981,951*
Impact Silver Corp. 17,000 25,210*
Investika Ltd. 250,400 1,542,529*
See notes to portfolios of investments and notes to financial statements.
87
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
METAL & MINERAL MINING & EXPLORATION (CONT'D)
- ---------------------------------------------------------------------------------------------
Jabiru Metals Ltd. 400,000 $ 486,723*
JNR Resources, Inc. 433,500 976,489*
Linear Metals Corp. 759,010 1,104,196*
Lundin Mining Corp. 532,625 6,428,793*
Mines Management, Inc. 854,930 2,879,922*
New Pacific Metals Corp. 544,400 1,190,532*
North American Tungsten Corp., Ltd. 1,170,000 1,504,435*
North Arrow Minerals, Inc. 154,000 50,589*
Paladin Resources Ltd. 50,000 350,203*
Red Hill Energy, Inc. 165,000 202,872*
Stingray Resources, Inc. 477,200 394,140*
Taseko Mines Ltd. 380,000 1,408,794*
Toledo Mining Corp., plc 296,400 2,407,647*
Uranium North Resources Corp. 482,201 380,167*
Wallbridge Mining Co., Ltd. 1,340,500 767,474*
Western Copper Corp. 32,000 49,557*
Western Prospector Group Ltd. 850,000 4,627,153*
Zimasco Consolidated Enterprises Ltd. (RS) 192,500 42,350*@
------------
44,336,141
OIL & GAS EXPLORATION & PRODUCTION - JUNIOR 0.11%
- ---------------------------------------------------------------------------------------------
Big Sky Energy Corp. 2,528,750 859,775*
Big Sky Energy Corp. (RS) 500,000 161,434*@
------------
1,021,209
OIL & GAS EXTRACTION 0.42%
- ---------------------------------------------------------------------------------------------
Pacific Stratus Energy Ltd. 285,600 3,857,322*
PLATINUM GROUP METALS 6.01%
- ---------------------------------------------------------------------------------------------
Anooraq Resources Corp. 3,349,400 8,331,249*
Aquarius Platinum Ltd. 110,045 3,351,790
Beartooth Platinum Corp. 4,160,000 449,012*
Eastern Platinum Ltd. 16,256,425 36,466,146*
Osmium Holdings S.A. (RS) 891 89,100*@
Platinum Group Metals Ltd. 479,400 1,939,288*
Ridge Mining plc 1,625,000 4,862,233*
------------
55,488,818
SENIOR GOLD PRODUCERS 5.31%
- ---------------------------------------------------------------------------------------------
Barrick Gold Corp. 94,574 2,749,266
Freeport-McMoRan Copper & Gold, Inc., Class B 125,000 10,352,500
Gold Fields Ltd. 240,000 3,714,981
Gold Fields Ltd., Sponsored ADR 1,071,980 16,830,086
See notes to portfolios of investments and notes to financial statements.
88
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
SENIOR GOLD PRODUCERS (CONT'D)
- ---------------------------------------------------------------------------------------------
Goldcorp, Inc. 2,475 $ 58,643
Harmony Gold Mining Co., Ltd., Sponsored ADR 129,900 1,853,673*^
Kinross Gold Corp. 76,250 886,703*
Lihir Gold Ltd. 1,133,000 2,882,182*
Lihir Gold Ltd., Sponsored ADR 32,000 821,760
Newmont Mining Corp. 100,000 3,906,000
Polyus Gold Co., ADR 120,162 5,049,808*
------------
49,105,602
- ---------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS 563,711,981
- ---------------------------------------------------------------------------------------------
(cost $399,383,939)
EXCHANGE-TRADED FUNDS 3.09%
iShares Silver Trust 42,000 5,187,000*
Market Vectors Gold Miners ETF 26,600 1,006,278
streetTRACKS Gold Trust 347,360 22,324,827*
- ---------------------------------------------------------------------------------------------
TOTAL EXCHANGE-TRADED FUNDS 28,518,105
- ---------------------------------------------------------------------------------------------
(cost $28,407,541)
WARRANTS 22.37%
DIAMOND MINING & EXPLORATION 0.03%
- ---------------------------------------------------------------------------------------------
Rockwell Diamonds, Inc., Warrants (November 2008) 2,575,000 241,682*@
SouthernEra Diamonds, Inc., Warrants (November 2008) 100,000 6,570*
------------
248,252
GOLD/MINERAL EXPLORATION & DEVELOPMENT 1.36%
- ---------------------------------------------------------------------------------------------
Chesapeake Gold Corp., Warrants (February 2012) 279,174 1,104,433*
European Minerals Corp., Warrants (December 2008) 2,461,700 1,201,449*
European Minerals Corp., Warrants (April 2010) 2,432,000 1,460,866*
European Minerals Corp., Warrants (March 2011) 3,548,000 1,698,325*
Golden China Resources Corp., 144A, Warrants (December
2007) 900,000 0*@
Grandview Gold, Inc., Warrants (July 2009) 350,000 0*@
Great Basin Gold Ltd., Warrants (April 2009) 450,500 232,554*
Metallic Ventures Gold, Inc., Warrants (March 2009) 689,500 161,786*
Metallica Resources, Inc., Warrants (December 2008) 2,012,800 3,381,588*
Mindoro Resources Ltd., Warrants (January 2009) 750,000 21,118*@
Moto Goldmines Ltd., Warrants (August 2007) 137,500 112,277*@
NovaGold Resources, Inc., Warrants (January 2008) 84,200 362,737*
NovaGold Resources, Inc., Warrants (October 2008) 215,300 1,889,394*
Platte River Gold U.S., Inc., Warrants (March 2009) (RS) 195,000 195,000*@
See notes to portfolios of investments and notes to financial statements.
89
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
WARRANTS SHARES VALUE
GOLD/MINERAL EXPLORATION & DEVELOPMENT (CONT'D)
- ---------------------------------------------------------------------------------------------
Romarco Minerals, Inc., Warrants (September 2007) 5,682,353 $ 639,995*@
Rusoro Mining Ltd., Warrants (November 2011) 600,000 0*@
San Anton Resource Corp., Warrants (December 2007) 520,000 82,970*@
Terrane Metals Corp., Warrants (July 2008) 200,000 0*@
Terrane Metals Corp., Warrants (November 2008) 475,500 0*@
Terrane Metals Corp., Warrants (June 2012) 150,000 29,565*
------------
12,574,057
GOLD/MINERAL ROYALTY COMPANIES 0.00%
- ---------------------------------------------------------------------------------------------
Aberdeen International, Inc., Warrants (December 2007) 1,000,000 0*@
INTERMEDIATE & JUNIOR GOLD PRODUCERS 8.72%
- ---------------------------------------------------------------------------------------------
Agnico-Eagle Mines Ltd., Warrants (November 2007) 1,162,920 20,816,179*
Avnel Gold Mining Ltd., Warrants (June 2010) 14,000 5,913*
Glencairn Gold Corp., Warrants (November 2008) 1,471,800 151,953*
IAMGOLD Corp., Warrants (August 2008) 3,529,765 2,981,640*
Nevsun Resources Ltd., Warrants (June 2008) 311,280 189,903*
Nevsun Resources Ltd., Warrants (October 2008) 39,600 23,044*
Northern Orion Resources, Inc., Warrants (May 2008) 6,111,390 23,976,358*
Northern Orion Resources, Inc., Warrants (February
2010) 3,289,213 5,711,243*
Peak Gold Ltd., Warrants (April 2012) 4,075,500 1,204,920*
Red Back Mining, Inc., Warrants (July 2007) 150,000 464,592*@
Rio Narcea Gold Mines Ltd., Warrants (September 2008) 750,000 837,674*
US Gold Corp., Warrants (February 2011) 2,000 3,379*
Yamana Gold, Inc., Warrants (November 2008) 5,164,120 24,185,986*
------------
80,552,784
METAL & MINERAL MINING & EXPLORATION 5.40%
- ---------------------------------------------------------------------------------------------
Baja Mining Corp., Warrants (April 2008) 527,750 386,358*@
Baja Mining Corp., Warrants (April 2009) 1,045,890 1,148,521*
Blue Pearl Mining Ltd., Warrants (October 2011) 100,000 873,809*
Breakwater Resources Ltd., Warrants (January 2009) 967,950 1,580,772*
Calibre Mining Corp., Warrants (January 2008) 200,000 0*@
Coalcorp Mining, Inc., Warrants (February 2011) 54,714 77,029*
Denison Mines Corp., Warrants (March 2011) 17,800 284,011*
Katanga Mining Ltd., Warrants (November 2011) 2,100 20,695*
Minco Silver Corp., Warrants (May 2008) 1,500 634*
Mines Management, Inc., Warrants (April 2012) 445,900 468,195*
Silver Wheaton Corp., Warrants (August 2009) 12,332,140 19,445,300*
Silver Wheaton Corp., Warrants (November 2009) 6,729,800 9,727,244*
Silver Wheaton Corp., Warrants (December 2010) 2,820,820 15,488,101*
Thompson Creek Metals Co., Inc., Warrants (October
2011) 45,600 398,457*
------------
49,899,126
See notes to portfolios of investments and notes to financial statements.
90
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
WARRANTS SHARES VALUE
OIL & GAS EXPLORATION & PRODUCTION - JUNIOR 0.00%
- ---------------------------------------------------------------------------------------------
Bankers Petroleum Ltd., Warrants (November 2009) 35,500 $ 5,997*
OIL & GAS EXTRACTION 0.10%
- ---------------------------------------------------------------------------------------------
Pacific Stratus Energy Ltd., Warrants (July 2007) 85,000 908,677*@
PLATINUM GROUP METALS 0.17%
- ---------------------------------------------------------------------------------------------
Eastern Platinum Ltd., Warrants (April 2008) 1,372,500 1,017,668*
Eastern Platinum Ltd., Warrants (March 2009) 648,000 571,702*
------------
1,589,370
SENIOR GOLD PRODUCERS 6.59%
- ---------------------------------------------------------------------------------------------
Goldcorp, Inc., Warrants (June 2011) 4,295,468 40,587,377*
Kinross Gold Corp., Warrants (October 2007) 4,501,820 15,633,520*
Kinross Gold Corp., Warrants (December 2007) 4,578,300 2,320,411*
Kinross Gold Corp., Warrants (September 2011) 1,256,720 2,300,065*
------------
60,841,373
- ---------------------------------------------------------------------------------------------
TOTAL WARRANTS 206,619,636
- ---------------------------------------------------------------------------------------------
(cost $174,497,428)
SPECIAL WARRANTS 0.09%
GOLD/MINERAL EXPLORATION & DEVELOPMENT 0.09%
- ---------------------------------------------------------------------------------------------
African Minerals, Special Warrants (RS) 112,500 846,079*@
Western Exploration & Development Ltd., 144A, Special
Warrants (RS) 600,000 0*@
- ---------------------------------------------------------------------------------------------
TOTAL SPECIAL WARRANTS 846,079
- ---------------------------------------------------------------------------------------------
(cost $975,000)
UNITS 0.48%
GOLD/MINERAL EXPLORATION & DEVELOPMENT 0.48%
- ---------------------------------------------------------------------------------------------
Hainan Mining Corp., Units (RS) 2,018,700 2,893,575*@
Mindoro Resources Ltd., 144A, Units (RS) 1,500,000 985,499*@
Platte River Gold U.S., Inc., Units (RS) 175,000 525,000*@
- ---------------------------------------------------------------------------------------------
TOTAL UNITS 4,404,074
- ---------------------------------------------------------------------------------------------
(cost $3,216,999)
See notes to portfolios of investments and notes to financial statements.
91
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
PURCHASED OPTIONS 2.10% CONTRACTS VALUE
EXCHANGE-TRADED FUNDS 0.09%
- ---------------------------------------------------------------------------------------------
CurrencyShares Canadian Dollar Trust, Strike Price 95,
Put, Expiration Dec. 2007 (premium $774,743) 3,974 $ 864,345
INTERMEDIATE & JUNIOR GOLD PRODUCERS 0.15%
- ---------------------------------------------------------------------------------------------
Agnico-Eagle Mines Ltd., Strike Price 30, Put,
Expiration Jan. 2008 (premium $156,880) 640 86,400
Agnico-Eagle Mines Ltd., Strike Price 35, Put,
Expiration Jan. 2008 (premium $222,880) 560 173,600
Crystallex International Corp., Strike Price 2.50,
Call, Expiration Jan. 2008 (premium $449,378) 2,977 565,630
Crystallex International Corp., Strike Price 2.50,
Call, Expiration Jan. 2009 (premium $403,978) 2,264 532,040
Crystallex International Corp., Strike Price 5, Call,
Expiration Jan. 2008 (premium $20,859) 273 23,205
------------
1,380,875
SENIOR GOLD PRODUCERS 1.86%
- ---------------------------------------------------------------------------------------------
Barrick Gold Corp., Strike Price 20, Call, Expiration
Jan. 2008 (premium $1,621,752) 1,344 1,263,360
Barrick Gold Corp., Strike Price 20, Call, Expiration
Jan. 2009 (premium $1,452,716) 1,145 1,219,425
Barrick Gold Corp., Strike Price 25, Call, Expiration
Jan. 2008 (premium $896,226) 1,114 590,420
Barrick Gold Corp., Strike Price 25, Call, Expiration
Jan. 2009 (premium $1,072,594) 1,159 811,300
Gold Fields Ltd., Strike Price 12.50, Call, Expiration
Jan. 2008 (premium $1,333,931) 1,901 722,380
Goldcorp, Inc., Strike Price 20, Call, Expiration
Jan. 2008 (premium $421,440) 492 250,920
Goldcorp, Inc., Strike Price 20, Call, Expiration
Jan. 2009 (premium $2,142,175) 2,144 1,479,360
Goldcorp, Inc., Strike Price 25, Call, Expiration
Jan. 2008 (premium $641,185) 1,171 269,330
Goldcorp, Inc., Strike Price 25, Call, Expiration
Jan. 2009 (premium $1,604,966) 2,128 957,600
Goldcorp, Inc., Strike Price 30, Call, Expiration
Jan. 2009 (premium $1,632,533) 2,355 652,335
Harmony Gold Mining Co., Ltd., Strike Price 12.50,
Call, Expiration Jan. 2008 (premium $386,589) 995 271,138
Harmony Gold Mining Co., Ltd., Strike Price 17.50,
Call, Expiration Jan. 2008 (premium $191,287) 1,252 81,380
Newmont Mining Corp., Strike Price 40, Call,
Expiration Jan. 2008 (premium $530,314) 609 179,655
Newmont Mining Corp., Strike Price 50, Call,
Expiration Jan. 2008 (premium $2,001,203) 2,634 131,700
See notes to portfolios of investments and notes to financial statements.
92
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
PURCHASED OPTIONS CONTRACTS VALUE
SENIOR GOLD PRODUCERS (CONT'D)
- ---------------------------------------------------------------------------------------------
Newmont Mining Corp., Strike Price 60, Call,
Expiration Jan. 2008 (premium $1,273,394) 2,754 $ 22,032
Philadelphia Stock Exchange Gold & Silver Index,
Strike Price 120, Put, Expiration Sept. 2007
(premium $687,025) 1,365 252,525
Philadelphia Stock Exchange Gold & Silver Index,
Strike Price 125, Put, Expiration Sept. 2007
(premium $492,971) 1,110 321,900
Philadelphia Stock Exchange Gold & Silver Index,
Strike Price 130, Put, Expiration Sept. 2007
(premium $2,003,920) 3,035 1,396,100
Philadelphia Stock Exchange Gold & Silver Index,
Strike Price 132.50, Put, Expiration Sept. 2007
(premium $2,978,000) 4,000 2,320,000
Philadelphia Stock Exchange Gold & Silver Index,
Strike Price 135, Put, Expiration Aug. 2007
(premium $191,955) 335 164,150
Philadelphia Stock Exchange Gold & Silver Index,
Strike Price 135, Put, Expiration Sept. 2007
(premium $4,374,210) 5,770 3,837,050
------------
17,194,060
- ---------------------------------------------------------------------------------------------
TOTAL PURCHASED OPTIONS 19,439,280
- ---------------------------------------------------------------------------------------------
(cost $29,959,104)
PRINCIPAL
NOTE UNITS 0.30% AMOUNT
GOLD/MINERAL EXPLORATION & DEVELOPMENT 0.30%
- ---------------------------------------------------------------------------------------------
New Gold, Inc., 10.00%, maturity 6/28/17
(cost $2,802,690) $ 3,000 2,815,712@
RIGHTS 0.07% SHARES
GOLD/MINERAL EXPLORATION & DEVELOPMENT 0.07%
- ---------------------------------------------------------------------------------------------
Chesapeake Gold Corp., Series 1, Class A, Rights (RS)
(cost $821,856) 54,754 611,033*@
- ---------------------------------------------------------------------------------------------
TOTAL SECURITIES 826,965,900
- ---------------------------------------------------------------------------------------------
(cost $640,064,557)
See notes to portfolios of investments and notes to financial statements.
93
WORLD PRECIOUS MINERALS FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
PRINCIPAL
REPURCHASE AGREEMENT 10.88% AMOUNT VALUE
Joint Tri-Party Repurchase Agreement, Bear Stearns,
06/29/07, 4.10%, due 07/02/07, repurchase price
$100,545,912, collateralized by U.S. Treasury
securities held in a joint tri-party account
(cost $100,511,571) $100,511,571 $100,511,571
- ---------------------------------------------------------------------------------------------
TOTAL INVESTMENTS 100.40% 927,477,471
- ---------------------------------------------------------------------------------------------
(cost $740,576,128)
Other assets and liabilities, net (0.40)% (3,698,440)
------------
NET ASSETS 100% $923,779,031
------------
SHARES SUBJECT
CALL OPTIONS WRITTEN TO CALL VALUE
- ---------------------------------------------------------------------------------------------
Harmony Gold Mining Co., Ltd., Strike Price 15,
Expiration Aug. 2007 24,000 $ 12,000
Meridian Gold, Inc., Strike Price 22.50, Expiration
July 2007 140,000 714,000
Meridian Gold, Inc., Strike Price 30, Expiration
July 2007 55,000 16,500
Royal Gold, Inc., Strike Price 22.50, Expiration
July 2007 230,000 368,000
Yamana Gold, Inc., Strike Price 10, Expiration
July 2007 264,000 330,000
- ---------------------------------------------------------------------------------------------
TOTAL CALL OPTIONS WRITTEN $ 1,440,500
- ---------------------------------------------------------------------------------------------
(premiums received $2,066,859) (Note 1 E)
See notes to portfolios of investments and notes to financial statements.
94
GOLD SHARES FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS 44.60% SHARES VALUE
DIAMOND MINING & EXPLORATION 0.48%
- ----------------------------------------------------------------------------------------
Aber Diamond Corp. 22,000 $ 845,558
Diamond Fields International Ltd. 108,000 13,684*
------------
859,242
FINANCIAL SERVICES 0.62%
- ----------------------------------------------------------------------------------------
GMP Capital Trust 49,200 1,101,337
GOLD MINING 38.49%
- ----------------------------------------------------------------------------------------
Agnico-Eagle Mines Ltd. 50,000 1,825,000
Barrick Gold Corp. 27,429 797,361
Centerra Gold, Inc. 113,700 1,125,848*
Century Mining Corp. 509,512 416,045*
Crystallex International Corp. 70,565 294,665*
DRDGOLD Ltd., Sponsored ADR 100,000 73,100*
Eldorado Gold Corp. 224,100 1,312,482*
Freeport-McMoRan Copper & Gold, Inc., Class B 50,000 4,141,000
GBS Gold International, Inc. 127,600 324,554*
Glencairn Gold Corp. 177,000 91,370*
Gold Fields Ltd. 95,000 1,470,513
Gold Fields Ltd., Sponsored ADR 427,620 6,713,634
Goldcorp, Inc. 5,565 131,825
Harmony Gold Mining Co., Ltd., Sponsored ADR 217,600 3,105,152*^
High River Gold Mines Ltd. 1,163,900 3,167,967*
Ivanhoe Mines Ltd. 379,600 5,379,849*
Jaguar Mining, Inc. 171,759 1,188,103*
Kingsgate Consolidated Ltd. 216,125 1,017,111
Kinross Gold Corp. 7,875 91,578*
Lihir Gold Ltd. 667,000 1,696,748*
Lihir Gold Ltd., Sponsored ADR 11,000 282,480
Meridian Gold, Inc. 305,420 8,415,297*^
Newmont Mining Corp. 55,000 2,148,300
Northern Orion Resources, Inc. 1,525,895 8,693,212*
Northgate Minerals Corp. 21,900 63,510*
Peak Gold Ltd. 2,026,000 1,255,019*
Polyus Gold Co., ADR 57,500 2,416,438*
Randgold Resources Ltd., ADR 362,300 8,039,437
Red Back Mining, Inc. 28,500 141,771*
Sino Gold Ltd. 300,000 1,432,187*
Troy Resources NL 400,000 817,424
Yamana Gold, Inc. 66,000 732,817^
------------
68,801,797
See notes to portfolios of investments and notes to financial statements.
95
GOLD SHARES FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
COMMON STOCKS SHARES VALUE
GOLD ROYALTY COMPANIES 3.06%
- ----------------------------------------------------------------------------------------
Aberdeen International, Inc. 2,250 $ 1,679*
Royal Gold, Inc. 230,500 5,478,985^
------------
5,480,664
METAL & MINERAL MINING 1.95%
- ----------------------------------------------------------------------------------------
Eastern Platinum Ltd. 1,306,250 2,930,159*
Lundin Mining Corp. 46,290 558,721*
------------
3,488,880
- ----------------------------------------------------------------------------------------
TOTAL COMMON STOCKS 79,731,920
- ----------------------------------------------------------------------------------------
(cost $67,163,560)
EXCHANGE-TRADED FUNDS 5.59%
Market Vectors Gold Miners ETF 5,400 204,282
streetTRACKS Gold Trust 152,340 9,790,892*
- ----------------------------------------------------------------------------------------
TOTAL EXCHANGE-TRADED FUNDS 9,995,174
- ----------------------------------------------------------------------------------------
(cost $9,694,314)
WARRANTS 24.25%
GOLD MINING 21.39%
- ----------------------------------------------------------------------------------------
Agnico-Eagle Mines Ltd., Warrants (November 2007) 351,980 6,300,442*
Glencairn Gold Corp., Warrants (November 2008) 88,500 9,137*
Goldcorp, Inc., Warrants (June 2011) 1,069,734 10,110,490*
IAMGOLD Corp., Warrants (August 2008) 712,195 601,601*
Kinross Gold Corp., Warrants (October 2007) 2,102,890 7,302,729*
Kinross Gold Corp., Warrants (December 2007) 2,126,700 1,077,871*
Kinross Gold Corp., Warrants (September 2011) 500,980 916,900*
Nevsun Resources Ltd., Warrants (June 2008) 63,720 38,874*
Nevsun Resources Ltd., Warrants (October 2008) 4,600 2,677*
Northern Orion Resources, Inc., Warrants (May 2008) 1,371,260 5,379,761*
Northern Orion Resources, Inc., Warrants (February 2010) 449,481 780,459*
Peak Gold Ltd., Warrants (April 2012) 1,013,000 299,493*
Rio Narcea Gold Mines Ltd., Warrants (September 2008) 150,000 167,535*
Yamana Gold, Inc., Warrants (November 2008) 1,121,050 5,250,401*
------------
38,238,370
See notes to portfolios of investments and notes to financial statements.
96
GOLD SHARES FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
WARRANTS SHARES VALUE
METAL & MINERAL MINING 2.86%
- ----------------------------------------------------------------------------------------
Eastern Platinum Ltd., Warrants (April 2008) 22,000 $ 16,312*
Silver Wheaton Corp., Warrants (August 2009) 1,594,240 2,513,795*
Silver Wheaton Corp., Warrants (November 2009) 708,980 1,024,759*
Silver Wheaton Corp., Warrants (December 2010) 283,640 1,557,364*
------------
5,112,230
- ----------------------------------------------------------------------------------------
TOTAL WARRANTS 43,350,600
- ----------------------------------------------------------------------------------------
(cost $34,421,813)
UNITS 0.16%
GOLD MINING 0.16%
- ----------------------------------------------------------------------------------------
Red Back Mining, Inc., Units (RS)
(cost $292,789) 60,000 283,542*@
PURCHASED OPTIONS 3.52% CONTRACTS
EXCHANGE-TRADED FUNDS 0.08%
- ----------------------------------------------------------------------------------------
CurrencyShares Canadian Dollar Trust, Strike Price 95,
Put, Expiration Dec. 2007 (premium $129,089) 662 143,985
GOLD MINING 3.44%
- ----------------------------------------------------------------------------------------
Agnico-Eagle Mines Ltd., Strike Price 30, Put,
Expiration Jan. 2008 (premium $39,280) 160 21,600
Agnico-Eagle Mines Ltd., Strike Price 35, Put,
Expiration Jan. 2008 (premium $55,720) 140 43,400
Barrick Gold Corp., Strike Price 20, Call, Expiration
Jan. 2008 (premium $852,727) 721 677,740
Barrick Gold Corp., Strike Price 25, Call, Expiration
Jan. 2008 (premium $512,800) 661 350,330
Barrick Gold Corp., Strike Price 25, Call, Expiration
Jan. 2009 (premium $950,632) 1,056 739,200
Crystallex International Corp., Strike Price 2.50, Call,
Expiration Jan. 2008 (premium $96,464) 644 122,360
Crystallex International Corp., Strike Price 2.50, Call,
Expiration Jan. 2009 (premium $7,770) 45 10,575
Crystallex International Corp., Strike Price 5, Call,
Expiration Jan. 2008 (premium $1,691) 27 2,295
Gold Fields Ltd., Strike Price 12.50, Call, Expiration
Jan. 2008 (premium $393,707) 614 233,320
See notes to portfolios of investments and notes to financial statements.
97
GOLD SHARES FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
PURCHASED OPTIONS CONTRACTS VALUE
GOLD MINING (CONT'D)
- ----------------------------------------------------------------------------------------
Goldcorp, Inc., Strike Price 20, Call, Expiration
Jan. 2008 (premium $160,035) 170 $ 86,700
Goldcorp, Inc., Strike Price 20, Call, Expiration
Jan. 2009 (premium $1,058,498) 1,005 693,450
Goldcorp, Inc., Strike Price 25, Call, Expiration
Jan. 2008 (premium $260,549) 436 100,280
Goldcorp, Inc., Strike Price 25, Call, Expiration
Jan. 2009 (premium $703,360) 886 398,700
Goldcorp, Inc., Strike Price 30, Call, Expiration
Jan. 2009 (premium $494,620) 700 193,900
Harmony Gold Mining Co., Ltd., Strike Price 12.50, Call,
Expiration Jan. 2008 (premium $720,839) 1,616 440,360
Harmony Gold Mining Co., Ltd., Strike Price 17.50, Call,
Expiration Jan. 2008 (premium $501,822) 2,228 144,820
Newmont Mining Corp., Strike Price 40, Call, Expiration
Jan. 2008 (premium $795,115) 776 228,920
Newmont Mining Corp., Strike Price 50, Call, Expiration
Jan. 2008 (premium $781,393) 1,226 61,300
Newmont Mining Corp., Strike Price 60, Call, Expiration
Jan. 2008 (premium $460,624) 1,376 11,008
Philadelphia Stock Exchange Gold & Silver Index, Strike
Price 120, Put, Expiration Sept. 2007
(premium $155,190) 310 57,350
Philadelphia Stock Exchange Gold & Silver Index, Strike
Price 125, Put, Expiration Sept. 2007
(premium $97,144) 220 63,800
Philadelphia Stock Exchange Gold & Silver Index, Strike
Price 130, Put, Expiration Sept. 2007
(premium $409,220) 640 294,400
Philadelphia Stock Exchange Gold & Silver Index, Strike
Price 132.50, Put, Expiration Sept. 2007
(premium $595,600) 800 464,000
Philadelphia Stock Exchange Gold & Silver Index, Strike
Price 135, Put, Expiration Aug. 2007
(premium $34,380) 60 29,400
Philadelphia Stock Exchange Gold & Silver Index, Strike
Price 135, Put, Expiration Sept. 2007
(premium $781,190) 1,030 684,950
------------
6,154,158
- ----------------------------------------------------------------------------------------
TOTAL PURCHASED OPTIONS 6,298,143
- ----------------------------------------------------------------------------------------
(cost $11,049,459)
- ----------------------------------------------------------------------------------------
TOTAL SECURITIES 139,659,379
- ----------------------------------------------------------------------------------------
(cost $122,621,935)
See notes to portfolios of investments and notes to financial statements.
98
GOLD SHARES FUND
PORTFOLIO OF INVESTMENTS June 30, 2007
PRINCIPAL
REPURCHASE AGREEMENT 22.17% AMOUNT VALUE
Joint Tri-Party Repurchase Agreement, Bear Stearns,
06/29/07, 4.10%, due 07/02/07, repurchase price
$39,639,342, collateralized by U.S. Treasury
securities held in a joint tri-party account
(cost $39,625,803) $39,625,803 $39,625,803
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS 100.29% 179,285,182
- ----------------------------------------------------------------------------------------
(cost $162,247,738)
Other assets and liabilities, net (0.29)% (523,257)
------------
NET ASSETS 100% $178,761,925
------------
SHARES SUBJECT
CALL OPTIONS WRITTEN TO CALL VALUE
- ----------------------------------------------------------------------------------------
Harmony Gold Mining Co., Ltd., Strike Price 15,
Expiration Aug. 2007 16,000 $ 8,000
Meridian Gold, Inc., Strike Price 22.50, Expiration
July 2007 58,000 295,800
Meridian Gold, Inc., Strike Price 30, Expiration
July 2007 25,000 7,500
Royal Gold, Inc., Strike Price 22.50, Expiration
July 2007 120,000 192,000
Yamana Gold, Inc., Strike Price 10, Expiration
July 2007 66,000 82,500
- ----------------------------------------------------------------------------------------
TOTAL CALL OPTIONS WRITTEN $ 585,800
- ----------------------------------------------------------------------------------------
(premiums received $785,797) (Note 1 E)
See notes to portfolios of investments and notes to financial statements.
99
NOTES TO PORTFOLIOS OF INVESTMENTS June 30, 2007
LEGEND
* Non-income producing security GO General Obligation Bond
+ Affiliated company (see following) WI When Issued
ADR American Depositary Receipt RS Restricted Security (see following)
GDR Global Depositary Receipt ZCB Zero Coupon Bond
VR Variable Rate ^ Security or portion of security
segregated as collateral for written options
@ Security was fair valued at June 30, 2007, by the Adviser in accordance with
valuation procedures approved by the Board of Trustees. Fair valued securities,
which were primarily composed of restricted securities, as a percentage of net
assets at June 30, 2007, were 1.05% of China Region Opportunity, 3.16% of Global
Resources, 1.70% of World Precious Minerals and 0.16% of Gold Shares.
GENERAL
The yields reflect the effective yield from the date of purchase.
Variable Rate Notes have periodic reset features, which effectively
shorten the maturity dates and reset the interest rates as tied to
various interest-bearing instruments. Rates shown are current rates
at June 30, 2007.
Securities with a 144A designation are exempt from registration
under Rule 144A of the Securities Act of 1933.
JOINT TRI-PARTY REPURCHASE AGREEMENTS
The terms of the joint tri-party repurchase agreements and the
securities held as collateral at June 30, 2007, were:
Bear Stearns repurchase agreement, 06/29/07, 4.10%, due 07/02/07:
Total principal amount: $273,766,701; Total repurchase price:
$273,860,238
Collateral:
$153,029,000 U.S. Treasury Bond, 8.75%, 08/15/20
$49,805,000 U.S. Treasury Bond, 8.00%, 11/15/21
$3,890,000 U.S. Treasury Note, 2.625%, 05/15/08
$4,000,000 U.S. Treasury Note, 3.375%, 10/15/09
(total collateral market value, including accrued interest, of
$279,243,943)
UBS Financial Services, Inc. repurchase agreement, 06/29/07, 4.20%,
due 07/02/07:
Total principal amount: $22,000,000; Total repurchase price:
$22,007,700
Collateral:
$200,000 U.S. Treasury Note, 4.375%, 12/31/07
$150,000 U.S. Treasury Note, 4.625%, 11/15/09
$20,025,000 U.S. Treasury Note, 4.625%, 12/31/11
$2,000,000 U.S. Treasury Note, 4.25%, 08/15/15
(total collateral market value, including accrued interest, of
$22,443,845)
Other mutual funds managed by U.S. Global Investors, Inc.
participate in the joint tri-party repurchase agreements. Each owns
an undivided interest in the accounts.
100
NOTES TO PORTFOLIOS OF INVESTMENTS June 30, 2007
AFFILIATED COMPANIES - INDICATED IN PORTFOLIO OF INVESTMENTS AS "+"
The Investment Company Act of 1940 defines affiliates as companies
in which the Fund owns at least 5% of the outstanding voting
securities. The following is a summary of transactions with each
affiliated company during the year ended June 30, 2007.
SHARES OF AFFILIATED COMPANIES
JUNE 30, 2006 ADDITIONS REDUCTIONS JUNE 30, 2007
GLOBAL RESOURCES FUND
- -----------------------------------------------------------------------------------------------
Bounty Industries Ltd. 9,500,000 12,500,000 -- 22,000,000
Coastal Energy Co. (formerly
PetroWorld Corp.) 2,000,000 5,900,000 -- 7,900,000(a)
Consolidated Thompson Iron Mines
Ltd. (formerly Consolidated
Thompson-Lundmark Gold Mines Ltd.) 900,000 1,253,500 (711,500) 1,442,000(a)
Exile Resources, Inc. 2,178,675 51,325 (130,000) 2,100,000
Investika Ltd. -- 741,000 (34,500) 706,500
Ivory Energy, Inc. 1,666,500 3,086,666 -- 4,753,166
Pacific Stratus Energy Ltd. 747,000 138,300 (391,850) 493,450(a)
Red Dragon Resources Corp. 3,796,000 99,000 -- 3,895,000
Revett Minerals, Inc. 4,645,300 238,800 (178,900) 4,705,200
Royalite Petroleum Co., Inc. -- 2,266,333 (20,000) 2,246,333
UMC Energy plc 1,000,000 -- -- 1,000,000(a)
At June 30, 2007, the value of investments in affiliated companies
was $20,332,904 representing 1.47% of net assets, and the total cost
was $16,824,039. Net realized gains on transactions were $2,154,002,
and there was no income earned for the period.
SHARES OF AFFILIATED COMPANIES
JUNE 30, 2006 ADDITIONS REDUCTIONS JUNE 30, 2007
WORLD PRECIOUS MINERALS FUND
- ------------------------------------------------------------------------------------------------
Aberdeen International, Inc. 2,207,500 53,000 -- 2,260,500
Atikwa Minerals Corp. 2,288,333 496,000 -- 2,784,333
Caledon Resources plc 20,290,000 200,000 (17,237,900) 3,252,100(a)(b)
Chesapeake Gold Corp. (Formerly
American Gold Capital Corp.) 1,641,900 1,296,749 (1,910,900) 1,027,749
Diamonds North Resources Ltd. 2,650,400 285,500 (84,500) 2,851,400
Golden China Resources Corp. 1,793,000 4,743,000 (5,152,000) 1,384,000(a)(b)
Golden Odyssey Mining, Inc. 1,473,500 182,000 (70,500) 1,585,000(a)
Grandview Gold, Inc. 1,284,000 106,500 (2,500) 1,388,000
Linear Gold Corp. 1,033,600 190,000 (31,000) 1,192,600(a)
Moss Lake Gold Mines Ltd. 2,698,500 300,000 -- 2,998,500
Romarco Minerals, Inc. 7,980,853 36,000 (120,000) 7,896,853
Vedron Gold, Inc. 5,829,501 142,500 (646,991) 5,325,010
At June 30, 2007, the value of investments in affiliated companies
was $16,561,833 representing 1.79% of net assets, and the total cost
was $14,007,288. Net realized gains on transactions were $368,637,
and there was no income earned for the period.
(a) At June 30, 2007, the company is no longer defined as an
affiliate, although it was an affiliated company during the
period.
(b) During the period, security was subject to a 1-for-5 reverse
stock split.
101
NOTES TO PORTFOLIOS OF INVESTMENTS June 30, 2007
RESTRICTED SECURITIES - INDICATED IN PORTFOLIO OF INVESTMENTS AS "RS"
The following securities are subject to legal restrictions on their
resale. The issuer bears the cost of registration, if any, involved
in the disposition of these securities.
ACQUISITION COST PER
SECURITY DATE SHARE
CHINA REGION OPPORTUNITY FUND
- ----------------------------------------------------------------------------
Big Sky Energy Corp. 03/01/05 $0.50
At June 30, 2007, the total cost of restricted securities was
$50,000, and the total value was $32,287, representing 0.03% of net
assets.
ACQUISITION COST PER
DATE SHARE
GLOBAL RESOURCES FUND
- ------------------------------------------------------------------------------------------
Aberdeen International, Inc., Units 06/06/07 $0.76
African Minerals, Special Warrants 07/09/03 $6.00
BA Energy, Inc. 08/11/06 $8.48
Big Sky Energy Corp. 03/01/05-08/15/05 $0.64
Chesapeake Gold Corp., Series 1, Class A, Rights 02/26/07 $15.78
Diamond Fields International Ltd., 144A 05/11/07 $0.15
Foothills Resources, Inc. 09/07/06 $2.25
Foothills Resources, Inc., Warrants (September 2011) 09/07/06 $0.00
Legacy Energy LLC, 144A 02/27/06 $19.00
Osmium Holdings S.A. 10/22/96-01/29/98 $987.07
Red Back Mining, Inc., Units 05/03/07 $4.88
Royalite Petroleum Co., Inc. 8/10/06-09/28/06 $0.79
Royalite Petroleum Co., Inc., Warrants (January
2008) 08/10/06 $0.43
Royalite Petroleum Co., Inc., Warrants (February
2008) 09/28/06 $0.67
Trident Resources Corp., Series B, Preferred Stock 06/08/06 $62.50
Trident Resources Corp., Warrants (March 2013) 06/08/06 $0.00
Western Canadian Coal Corp., 144A, Units 06/26/07 $2.20
Zimasco Consolidated Enterprises Ltd. 06/15/95-09/30/99 $3.73
At June 30, 2007, the total cost of restricted securities was
$27,234,662 and the total value was $25,669,542, representing 1.86%
of net assets.
102
NOTES TO PORTFOLIOS OF INVESTMENTS June 30, 2007
ACQUISITION COST PER
SECURITY DATE SHARE
WORLD PRECIOUS MINERALS FUND
- ------------------------------------------------------------------------------------------
African Minerals, Special Warrants 07/09/03 $6.00
Big Sky Energy Corp. 03/01/05 $0.50
Carnavale Resources Ltd. 05/22/07 $0.29
Chesapeake Gold Corp., Series 1, Class A, Rights 02/26/07 $15.01
Hainan Mining Corp., Units 08/31/06-05/16/07 $0.85
Mindoro Resources Ltd., 144A, Units 05/25/07 $0.65
Osmium Holdings S.A. 10/22/96-01/29/98 $1,280.75
Platte River Gold U.S., Inc. 03/01/04-06/07/04 $1.15
Platte River Gold U.S., Inc., Warrants (March 2009) 03/01/04 $0.00
Platte River Gold U.S., Inc., Units 11/17/06 $3.00
Western Exploration & Development Ltd., 144A,
Special Warrants 08/14/97 $0.50
Zimasco Consolidated Enterprises Ltd. 06/15/95-09/30/99 $3.73
At June 30, 2007, the total cost of restricted securities was
$8,340,138, and the total value was $10,025,514, representing 1.09%
of net assets.
ACQUISITION COST PER
DATE SHARE
GOLD SHARES FUND
- ------------------------------------------------------------------------------------------
Red Back Mining, Inc., Units 05/03/07 $4.88
At June 30, 2007, the total cost of restricted securities was
$292,789, and the total value was $283,542, representing 0.16% of
net assets.
103
STATEMENTS OF ASSETS AND LIABILITIES
U.S. TREASURY
SECURITIES
CASH FUND
Investments, at identified cost $115,623,989
============
ASSETS
- ---------------------------------------------------------------------------
Investments, at value:
Securities $ 64,658,032
Repurchase Agreements 50,965,957
Cash --
Receivables:
Investments sold --
Interest 89,024
Capital shares sold 1,448,926
From adviser --
Other assets 10,662
- ---------------------------------------------------------------------------
TOTAL ASSETS 117,172,601
- ---------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------
Payables:
Investments purchased --
Capital shares redeemed 1,044,433
Adviser and affiliates 67,184
Dividends and distributions 3,369
Accounts payable and accrued expenses 46,050
- ---------------------------------------------------------------------------
TOTAL LIABILITIES 1,161,036
- ---------------------------------------------------------------------------
NET ASSETS $116,011,565
============
NET ASSETS CONSIST OF:
- ---------------------------------------------------------------------------
Paid-in capital $116,021,464
Accumulated undistributed net investment income 1,043
Accumulated net realized loss on investments and foreign
currencies (10,942)
Net unrealized appreciation (depreciation) of investments
and other assets and liabilities denominated in foreign
currencies --
------------
Net assets applicable to capital shares outstanding $116,011,565
============
Capital shares outstanding, an unlimited number of no
par shares authorized 116,083,790
============
NET ASSET VALUE, PUBLIC OFFERING PRICE, REDEMPTION PRICE,
PER SHARE $ 1.00
============
See accompanying notes to financial statements.
104
June 30, 2007
U.S. GOVERNMENT
SECURITIES NEAR-TERM TAX FREE
SAVINGS FUND TAX FREE FUND FUND
Investments, at identified cost $470,051,834 $13,099,785 $15,857,505
============ =========== ===========
ASSETS
- ---------------------------------------------------------------------------------------------------------------------
Investments, at value:
Securities $470,051,834 $12,977,110 $15,156,413
Repurchase Agreements -- 85,135 1,012,370
Cash 79,514 -- --
Receivables:
Investments sold -- 202,000 --
Interest 661,946 152,514 203,391
Capital shares sold 1,396,193 60 620
From adviser -- 9,873 6,021
Other assets 18,031 1,428 2,118
- ---------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 472,207,518 13,428,120 16,380,933
- ---------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------------------------
Payables:
Investments purchased -- -- 395,554
Capital shares redeemed 2,885,518 -- 462
Adviser and affiliates 119,805 -- --
Dividends and distributions 31,777 8,761 9,250
Accounts payable and accrued expenses 75,913 35,942 35,675
- ---------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 3,113,013 44,703 440,941
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS $469,094,505 $13,383,417 $15,939,992
============ =========== ===========
NET ASSETS CONSIST OF:
- ---------------------------------------------------------------------------------------------------------------------
Paid-in capital $468,697,178 $13,768,938 $16,345,266
Accumulated undistributed net investment income 406,948 17,323 32,174
Accumulated net realized loss on investments and foreign
currencies (9,621) (365,304) (748,726)
Net unrealized appreciation (depreciation) of investments
and other assets and liabilities denominated in foreign
currencies -- (37,540) 311,278
------------ ----------- -----------
Net assets applicable to capital shares outstanding $469,094,505 $13,383,417 $15,939,992
============ =========== ===========
Capital shares outstanding, an unlimited number of no
par shares authorized 469,326,179 6,300,524 1,330,643
============ =========== ===========
NET ASSET VALUE, PUBLIC OFFERING PRICE, REDEMPTION PRICE,
PER SHARE $ 1.00 $ 2.12 $ 11.98
============ =========== ===========
105
STATEMENTS OF ASSETS AND LIABILITIES
ALL AMERICAN CHINA REGION
EQUITY FUND OPPORTUNITY FUND
Investments, at identified cost $20,097,145 $72,724,910
=========== ===========
ASSETS
- ----------------------------------------------------------------------------------
Investments, at value:
Securities of unaffiliated issuers $22,576,922 $87,022,574
Securities of affiliated issuers -- --
Repurchase Agreements 1,052,142 8,616,553
Cash -- --
Foreign currencies (Cost $0, $480,144,
$16,536,495, $143,352 and $0) -- 480,494
Receivables:
Investments sold -- 69,578
Dividends 10,789 158,507
Interest 240 1,963
Capital shares sold 1,403 199,818
Unrealized appreciation on foreign
currency exchange contracts - Note 1 G -- 6
Other assets 7,921 12,027
- ----------------------------------------------------------------------------------
TOTAL ASSETS 23,649,417 96,561,520
- ----------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------
Payables:
Investments purchased -- 2,427,038
Capital shares redeemed 111,061 137,634
Adviser and affiliates 16,099 115,699
Accounts payable and accrued expenses 43,053 76,381
Due to custodian -- --
Written options at value -- --
Unrealized depreciation on foreign
currency exchange contracts - Note 1 G -- 50
- ----------------------------------------------------------------------------------
TOTAL LIABILITIES 170,213 2,756,802
- ----------------------------------------------------------------------------------
NET ASSETS $23,479,204 $93,804,718
=========== ===========
NET ASSETS CONSIST OF:
- ----------------------------------------------------------------------------------
Paid-in capital $18,195,220 $61,704,266
Accumulated undistributed net investment
income (distributions in excess of net
investment income) -- (2,258,850)
Accumulated net realized gain (loss) on
investments and foreign currencies 1,752,065 11,443,949
Net unrealized appreciation of investments
and other assets and liabilities
denominated in foreign currencies 3,531,919 22,915,353
----------- -----------
Net assets applicable to capital shares
outstanding $23,479,204 $93,804,718
=========== ===========
Capital shares outstanding, an
unlimited number of no par shares
authorized 821,424 7,474,333
=========== ===========
NET ASSET VALUE, PUBLIC OFFERING PRICE,
REDEMPTION PRICE, PER SHARE $ 28.58 $ 12.55
=========== ===========
See accompanying notes to financial statements.
106
June 30, 2007
GLOBAL RESOURCES WORLD PRECIOUS GOLD SHARES
FUND MINERALS FUND FUND
Investments, at identified cost $1,090,903,156 $740,576,128 $162,247,738
============== ============ ============
ASSETS
- --------------------------------------------------------------------------------------------------------------
Investments, at value:
Securities of unaffiliated issuers $1,307,916,594 $810,404,067 $139,659,379
Securities of affiliated issuers 20,332,904 16,561,833 --
Repurchase Agreements 62,404,362 100,511,571 39,625,803
Cash -- 20,281 571
Foreign currencies (Cost $0, $480,144,
$16,536,495, $143,352 and $0) 16,516,837 143,352 --
Receivables:
Investments sold 3,429,608 3,292,179 629,132
Dividends 1,142,517 93,159 21,753
Interest 276,887 25,190 9,026
Capital shares sold 3,386,177 1,915,874 491,361
Unrealized appreciation on foreign
currency exchange contracts - Note 1 G 87 29 --
Other assets 405,777 53,132 31,466
- --------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 1,415,811,750 933,020,667 180,468,491
- --------------------------------------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------------------------------------
Payables:
Investments purchased 21,510,878 5,323,325 320,207
Capital shares redeemed 1,164,606 1,515,099 179,712
Adviser and affiliates 900,238 649,329 138,240
Accounts payable and accrued expenses 345,557 313,383 125,549
Due to custodian 8,605,064 -- 357,058
Written options at value 35,000 1,440,500 585,800
Unrealized depreciation on foreign
currency exchange contracts - Note 1 G -- -- --
- --------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 32,561,343 9,241,636 1,706,566
- --------------------------------------------------------------------------------------------------------------
NET ASSETS $1,383,250,407 $923,779,031 $178,761,925
============== ============ ============
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------------------------------------
Paid-in capital $1,043,156,817 $698,643,255 $168,925,545
Accumulated undistributed net investment
income (distributions in excess of net
investment income) (12,989,617) (15,710,691) 926,160
Accumulated net realized gain (loss) on
investments and foreign currencies 53,386,649 53,317,534 (8,332,055)
Net unrealized appreciation of investments
and other assets and liabilities
denominated in foreign currencies 299,696,558 187,528,933 17,242,275
-------------- ------------ ------------
Net assets applicable to capital shares
outstanding $1,383,250,407 $923,779,031 $178,761,925
============== ============ ============
Capital shares outstanding, an
unlimited number of no par shares
authorized 78,149,618 32,592,020 11,928,386
============== ============ ============
NET ASSET VALUE, PUBLIC OFFERING PRICE,
REDEMPTION PRICE, PER SHARE $ 17.70 $ 28.34 $ 14.99
============== ============ ============
107
STATEMENTS OF OPERATIONS
U.S. TREASURY
SECURITIES
CASH FUND
NET INVESTMENT INCOME
INCOME:
- ---------------------------------------------------------------------------
Interest and other $6,148,498
EXPENSES:
- ---------------------------------------------------------------------------
Management fee 595,321
Transfer agent fees and expenses 234,371
Accounting service fees and expenses 25,807
Professional fees 52,582
Custodian fees 43,832
Shareholder reporting 47,615
Registration fees 35,515
Trustee fees and expenses 25,422
Miscellaneous 28,520
----------
Total expenses before reductions 1,088,985
Expenses offset - Note 1J (472)
Expenses reimbursed - Note 2 (24,507)
----------
NET EXPENSES 1,064,006
- ---------------------------------------------------------------------------
NET INVESTMENT INCOME 5,084,492
- ---------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Realized gain (loss) from securities --
Net change in unrealized appreciation (depreciation) of
investments --
- ---------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS --
- ---------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $5,084,492
==========
See accompanying notes to financial statements.
108
For the Year Ended June 30, 2007
U.S. GOVERNMENT
SECURITIES NEAR-TERM TAX FREE
SAVINGS FUND TAX FREE FUND FUND
NET INVESTMENT INCOME
INCOME:
- ---------------------------------------------------------------------------------------------------------------
Interest and other $23,124,957 $567,444 $724,933
EXPENSES:
- ---------------------------------------------------------------------------------------------------------------
Management fee 1,979,834 73,203 113,397
Transfer agent fees and expenses 398,563 17,162 19,965
Accounting service fees and expenses 75,823 36,535 34,015
Professional fees 82,206 50,444 48,812
Custodian fees 60,864 13,007 13,311
Shareholder reporting 64,104 2,479 3,149
Registration fees 41,065 14,245 14,653
Trustee fees and expenses 25,422 25,422 25,422
Miscellaneous 47,238 6,891 8,278
----------- -------- --------
Total expenses before reductions 2,775,119 239,388 281,002
Expenses offset - Note 1J -- (410) (75)
Expenses reimbursed - Note 2 (774,277) (173,100) (175,090)
----------- -------- --------
NET EXPENSES 2,000,842 65,878 105,837
- ---------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 21,124,115 501,566 619,096
- ---------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Realized gain (loss) from securities 2,458 (9,533) 15,231
Net change in unrealized appreciation (depreciation) of
investments -- 67,546 (41,981)
- ---------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 2,458 58,013 (26,750)
- ---------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $21,126,573 $559,579 $592,346
=========== ======== ========
109
STATEMENTS OF OPERATIONS
ALL AMERICAN CHINA REGION
EQUITY FUND OPPORTUNITY FUND
NET INVESTMENT INCOME
INCOME:
- ----------------------------------------------------------------------------------
Dividends from unaffiliated issuers $ 225,134 $ 1,323,792
Foreign taxes withheld on dividends (1,839) (20,343)
---------- -----------
Net dividends 223,295 1,303,449
Interest and other 100,738 322,891
---------- -----------
TOTAL INCOME 324,033 1,626,340
EXPENSES:
- ----------------------------------------------------------------------------------
Management fee 165,560 997,748
Transfer agent fees and expenses 89,222 211,900
Accounting service fees and expenses 29,259 84,721
Professional fees 53,474 60,301
Custodian fees 31,367 143,454
Shareholder reporting 16,468 40,697
Registration fees 14,937 18,832
Trustee fees and expenses 25,422 25,422
Miscellaneous 19,224 30,148
---------- -----------
Total expenses before reductions 444,933 1,613,223
Expenses offset - Note 1J (415) (1,201)
Expenses reimbursed - Note 2 (58,211) --
---------- -----------
NET EXPENSES 386,307 1,612,022
- ----------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (62,274) 14,318
- ----------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Realized gain (loss) from:
Securities from unaffiliated issuers 2,099,469 13,515,895
Securities from affiliated issuers -- --
Written options -- 36,674
Foreign currency transactions 2,924 (233,824)
---------- -----------
NET REALIZED GAIN 2,102,393 13,318,745
---------- -----------
Net change in unrealized appreciation
(depreciation) of:
Investments 1,985,429 17,979,471
Written options -- --
Other assets and liabilities
denominated in foreign currencies (3,403) 7,713
---------- -----------
NET UNREALIZED APPRECIATION
(DEPRECIATION) 1,982,026 17,987,184
- ----------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS 4,084,419 31,305,929
- ----------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $4,022,145 $31,320,247
========== ===========
See accompanying notes to financial statements.
110
For the Year Ended June 30, 2007
GLOBAL RESOURCES WORLD PRECIOUS GOLD SHARES
FUND MINERALS FUND FUND
NET INVESTMENT INCOME
INCOME:
- ------------------------------------------------------------------------------------------------------------
Dividends from unaffiliated issuers $ 15,220,051 $ 2,986,061 $ 1,061,445
Foreign taxes withheld on dividends (1,533,922) (252,322) (54,049)
------------ ----------- -----------
Net dividends 13,686,129 2,733,739 1,007,396
Interest and other 6,875,771 7,437,012 2,541,601
------------ ----------- -----------
TOTAL INCOME 20,561,900 10,170,751 3,548,997
EXPENSES:
- ------------------------------------------------------------------------------------------------------------
Management fee 7,387,016 6,130,468 1,672,967
Transfer agent fees and expenses 2,268,892 1,607,756 481,212
Accounting service fees and expenses 566,034 491,998 160,405
Professional fees 177,188 149,832 69,655
Custodian fees 597,900 782,341 263,751
Shareholder reporting 412,159 289,009 95,180
Registration fees 54,019 54,003 38,436
Trustee fees and expenses 25,422 25,422 25,422
Miscellaneous 120,868 102,116 63,278
------------ ----------- -----------
Total expenses before reductions 11,609,498 9,632,945 2,870,306
Expenses offset - Note 1J (90,559) (27,112) (11,232)
Expenses reimbursed - Note 2 -- -- --
------------ ----------- -----------
NET EXPENSES 11,518,939 9,605,833 2,859,074
- ------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 9,042,961 564,918 689,923
- ------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Realized gain (loss) from:
Securities from unaffiliated issuers 92,567,194 102,974,276 26,210,591
Securities from affiliated issuers 2,154,002 368,637 --
Written options (1,683,276) 3,078,094 1,284,272
Foreign currency transactions (567,602) (417,740) (63,849)
------------ ----------- -----------
NET REALIZED GAIN 92,470,318 106,003,267 27,431,014
------------ ----------- -----------
Net change in unrealized appreciation
(depreciation) of:
Investments 110,035,150 (11,860,011) (36,974,095)
Written options 8,349 626,359 199,997
Other assets and liabilities
denominated in foreign currencies (79,281) (346,528) (101,369)
------------ ----------- -----------
NET UNREALIZED APPRECIATION
(DEPRECIATION) 109,964,218 (11,580,180) (36,875,467)
- ------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS 202,434,536 94,423,087 (9,444,453)
- ------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $211,477,497 $94,988,005 $(8,754,530)
============ =========== ===========
111
STATEMENTS OF CHANGES IN NET ASSETS
U.S. TREASURY SECURITIES
CASH FUND
---------------------------------
YEAR ENDED YEAR ENDED
JUNE 30, 2007 JUNE 30, 2006
INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS:
- ----------------------------------------------------------------------------------------
Net investment income $ 5,084,492 $ 3,519,387
Net realized gain (loss) -- --
Net unrealized appreciation (depreciation) -- --
------------ ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 5,084,492 3,519,387
DISTRIBUTIONS TO SHAREHOLDERS:
- ----------------------------------------------------------------------------------------
From net investment income (5,084,891) (3,519,445)
------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (5,084,891) (3,519,445)
FROM CAPITAL SHARE TRANSACTIONS:
- ----------------------------------------------------------------------------------------
Proceeds from shares sold 383,660,609 623,320,464
Distributions reinvested 4,907,563 3,408,560
------------ ------------
388,568,172 626,729,024
Cost of shares redeemed (391,584,524) (631,758,750)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS (3,016,352) (5,029,726)
- ----------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS (3,016,751) (5,029,784)
- ----------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 119,028,316 124,058,100
- ----------------------------------------------------------------------------------------
END OF YEAR $116,011,565 $119,028,316
- ----------------------------------------------------------------------------------------
Accumulated undistributed net investment income,
end of year $ 1,043 $ 1,442
============ ============
CAPITAL SHARE ACTIVITY
- ----------------------------------------------------------------------------------------
Shares sold 383,660,609 623,320,464
Shares reinvested 4,907,563 3,408,560
Shares redeemed (391,584,524) (631,758,750)
------------ ------------
NET SHARE ACTIVITY (3,016,352) (5,029,726)
============ ============
See accompanying notes to financial statements.
112
U.S. GOVERNMENT SECURITIES
SAVINGS FUND NEAR-TERM TAX FREE FUND
----------------------------------- -----------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2007 JUNE 30, 2006 JUNE 30, 2007 JUNE 30, 2006
INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS:
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 21,124,115 $ 14,968,530 $ 501,566 $ 516,897
Net realized gain (loss) 2,458 -- (9,533) (198,526)
Net unrealized appreciation (depreciation) -- -- 67,546 (189,289)
------------ ------------ ----------- -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 21,126,573 14,968,530 559,579 129,082
DISTRIBUTIONS TO SHAREHOLDERS:
- ------------------------------------------------------------------------------------------------------------------------------------
From net investment income (21,124,058) (14,951,407) (501,654) (511,420)
------------ ------------ ----------- -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (21,124,058) (14,951,407) (501,654) (511,420)
FROM CAPITAL SHARE TRANSACTIONS:
- ------------------------------------------------------------------------------------------------------------------------------------
Proceeds from shares sold 368,491,428 352,226,702 2,312,722 4,784,222
Distributions reinvested 20,689,962 14,689,650 384,910 418,555
------------ ------------ ----------- -----------
389,181,390 366,916,352 2,697,632 5,202,777
Cost of shares redeemed (355,506,639) (343,494,954) (5,202,546) (7,695,821)
------------ ------------ ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS 33,674,751 23,421,398 (2,504,914) (2,493,044)
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 33,677,266 23,438,521 (2,446,989) (2,875,382)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 435,417,239 411,978,718 15,830,406 18,705,788
- ------------------------------------------------------------------------------------------------------------------------------------
END OF YEAR $469,094,505 $435,417,239 $13,383,417 $15,830,406
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net investment income,
end of year $ 406,948 $ 406,891 $ 17,323 $ 17,411
============ ============ =========== ===========
CAPITAL SHARE ACTIVITY
- ------------------------------------------------------------------------------------------------------------------------------------
Shares sold 368,491,428 352,226,702 1,078,441 2,232,847
Shares reinvested 20,689,962 14,689,650 179,915 195,229
Shares redeemed (355,506,639) (343,494,954) (2,428,359) (3,585,124)
------------ ------------ ----------- -----------
NET SHARE ACTIVITY 33,674,751 23,421,398 (1,170,003) (1,157,048)
============ ============ =========== ===========
113
STATEMENTS OF CHANGES IN NET ASSETS
TAX FREE FUND
-----------------------------------
YEAR ENDED YEAR ENDED
JUNE 30, 2007 JUNE 30, 2006
INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS:
- ------------------------------------------------------------------------------------------
Net investment income (loss) $ 619,096 $ 748,447
Net realized gain 15,231 86,123
Net unrealized appreciation (depreciation) (41,981) (662,607)
----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 592,346 171,963
DISTRIBUTIONS TO SHAREHOLDERS:
- ------------------------------------------------------------------------------------------
From net investment income (615,389) (746,191)
From net capital gains -- --
----------- -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (615,389) (746,191)
FROM CAPITAL SHARE TRANSACTIONS:
- ------------------------------------------------------------------------------------------
Proceeds from shares sold 4,168,323 7,108,359
Distributions reinvested 509,442 667,681
Proceeds from short-term trading fees -- --
----------- -----------
4,677,765 7,776,040
Cost of shares redeemed (3,706,262) (14,643,249)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS 971,503 (6,867,209)
- ------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 948,460 (7,441,437)
- ------------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 14,991,532 22,432,969
- ------------------------------------------------------------------------------------------
END OF YEAR $15,939,992 $14,991,532
- ------------------------------------------------------------------------------------------
Accumulated undistributed net investment income
(distributions in excess of net investment income),
end of year $ 32,174 $ 28,467
=========== ===========
CAPITAL SHARE ACTIVITY
- ------------------------------------------------------------------------------------------
Shares sold 341,911 583,280
Shares reinvested 41,891 54,925
Shares redeemed (304,399) (1,205,634)
----------- -----------
NET SHARE ACTIVITY 79,403 (567,429)
=========== ===========
See accompanying notes to financial statements.
114
CHINA REGION
ALL AMERICAN EQUITY FUND OPPORTUNITY FUND
----------------------------------- -----------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2007 JUNE 30, 2006 JUNE 30, 2007 JUNE 30, 2006
INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS:
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ (62,274) $ (140,588) $ 14,318 $ (34,461)
Net realized gain 2,102,393 3,410,638 13,318,745 8,649,512
Net unrealized appreciation (depreciation) 1,982,026 (395,656) 17,987,184 (401,507)
----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 4,022,145 2,874,394 31,320,247 8,213,544
DISTRIBUTIONS TO SHAREHOLDERS:
- ------------------------------------------------------------------------------------------------------------------------------------
From net investment income -- -- (1,333,614) (909,532)
From net capital gains (2,948,106) (455,916) -- --
----------- ----------- ----------- -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (2,948,106) (455,916) (1,333,614) (909,532)
FROM CAPITAL SHARE TRANSACTIONS:
- ------------------------------------------------------------------------------------------------------------------------------------
Proceeds from shares sold 3,497,874 4,213,480 41,842,142 48,877,918
Distributions reinvested 2,897,452 446,686 1,288,571 876,930
Proceeds from short-term trading fees 603 1,015 153,356 99,066
----------- ----------- ----------- -----------
6,395,929 4,661,181 43,284,069 49,853,914
Cost of shares redeemed (5,538,258) (4,785,228) (47,227,127) (19,907,492)
----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS 857,671 (124,047) (3,943,058) 29,946,422
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 1,931,710 2,294,431 26,043,575 37,250,434
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 21,547,494 19,253,063 67,761,143 30,510,709
- ------------------------------------------------------------------------------------------------------------------------------------
END OF YEAR $23,479,204 $21,547,494 $93,804,718 $67,761,143
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net investment income
(distributions in excess of net investment
income), end of year $ -- $ -- $(2,258,850) $(1,317,209)
=========== =========== =========== ===========
CAPITAL SHARE ACTIVITY
- ------------------------------------------------------------------------------------------------------------------------------------
Shares sold 128,990 153,852 4,193,823 5,590,725
Shares reinvested 115,759 16,768 128,472 115,690
Shares redeemed (204,356) (176,376) (4,630,983) (2,366,044)
----------- ----------- ----------- -----------
NET SHARE ACTIVITY 40,393 (5,756) (308,688) 3,340,371
=========== =========== =========== ===========
115
STATEMENTS OF CHANGES IN NET ASSETS
GLOBAL RESOURCES FUND
-----------------------------------
YEAR ENDED YEAR ENDED
JUNE 30, 2007 JUNE 30, 2006
INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS:
- ---------------------------------------------------------------------------------------
Net investment income (loss) $ 9,042,961 $ 9,745,092
Net realized gain 92,470,318 153,257,351
Net unrealized appreciation (depreciation) 109,964,218 118,493,173
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 211,477,497 281,495,616
DISTRIBUTIONS TO SHAREHOLDERS:
- ---------------------------------------------------------------------------------------
From net investment income (61,878,978) (16,043,181)
From net capital gains (120,720,087) (53,477,271)
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (182,599,065) (69,520,452)
FROM CAPITAL SHARE TRANSACTIONS:
- ---------------------------------------------------------------------------------------
Proceeds from shares sold 645,950,934 1,156,093,363
Distributions reinvested 175,690,973 65,860,313
Proceeds from short-term trading fees 65,595 203,807
-------------- --------------
821,707,502 1,222,157,483
Cost of shares redeemed (749,000,008) (640,651,603)
-------------- --------------
NET INCREASE IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS 72,707,494 581,505,880
- ---------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 101,585,926 793,481,044
- ---------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 1,281,664,481 488,183,437
- ---------------------------------------------------------------------------------------
END OF YEAR $1,383,250,407 $1,281,664,481
- ---------------------------------------------------------------------------------------
Accumulated undistributed net investment income
(distributions in excess of net investment
income), end of year $ (12,989,617) $ 3,230,685
============== ==============
CAPITAL SHARE ACTIVITY
- ---------------------------------------------------------------------------------------
Shares sold 39,780,025 72,318,323
Shares reinvested 12,000,749 4,615,299
Shares redeemed (48,049,221) (41,039,967)
-------------- --------------
NET SHARE ACTIVITY 3,731,553 35,893,655
============== ==============
See accompanying notes to financial statements.
116
WORLD PRECIOUS
MINERALS FUND GOLD SHARES FUND
-------------------------------- ---------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
JUNE 30, 2007 JUNE 30, 2006 JUNE 30, 2007 JUNE 30, 2006
INCREASE (DECREASE)
IN NET ASSETS
FROM OPERATIONS:
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ 564,918 $ 228,153 $ 689,923 $ (69,394)
Net realized gain 106,003,267 89,141,365 27,431,014 26,497,509
Net unrealized appreciation (depreciation) (11,580,180) 163,435,815 (36,875,467) 42,899,678
------------ -------------- ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 94,988,005 252,805,333 (8,754,530) 69,327,793
DISTRIBUTIONS TO SHAREHOLDERS:
- ------------------------------------------------------------------------------------------------------------------------------------
From net investment income (51,570,418) (11,327,580) -- (1,018,347)
From net capital gains (69,178,178) (6,323,156) -- --
------------ -------------- ------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (120,748,596) (17,650,736) -- (1,018,347)
FROM CAPITAL SHARE TRANSACTIONS:
- ------------------------------------------------------------------------------------------------------------------------------------
Proceeds from shares sold 697,217,101 1,079,149,474 187,856,134 337,422,942
Distributions reinvested 114,711,593 16,536,899 -- 941,813
Proceeds from short-term trading fees 815,105 1,229,616 278,592 606,882
------------ -------------- ------------ ------------
812,743,799 1,096,915,989 188,134,726 338,971,637
Cost of shares redeemed (783,452,968) (680,134,237) (208,645,621) (263,069,829)
------------ -------------- ------------ ------------
NET INCREASE IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS 29,290,831 416,781,752 (20,510,895) 75,901,808
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 3,530,240 651,936,349 (29,265,425) 144,211,254
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of year 920,248,791 268,312,442 208,027,350 63,816,096
- ------------------------------------------------------------------------------------------------------------------------------------
END OF YEAR $923,779,031 $ 920,248,791 $178,761,925 $208,027,350
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated undistributed net investment income
(distributions in excess of net investment
income), end of year $(15,710,691) $ (5,176,414) $ 926,160 $ (183,285)
============ ============== ============ ============
CAPITAL SHARE ACTIVITY
- ------------------------------------------------------------------------------------------------------------------------------------
Shares sold 24,505,326 44,379,941 12,003,311 28,690,541
Shares reinvested 4,350,079 851,979 -- 91,795
Shares redeemed (28,153,172) (30,654,630) (13,510,813) (23,670,309)
------------ -------------- ------------ ------------
NET SHARE ACTIVITY 702,233 14,577,290 (1,507,502) 5,112,027
============ ============== ============ ============
117
NOTES TO FINANCIAL STATEMENTS June 30, 2007
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES
U.S. Global Investors Funds (Trust) is organized as a Massachusetts
business trust, consisting of nine separate funds (Funds), as
follows: U.S. Treasury Securities Cash, U.S. Government Securities
Savings, Near-Term Tax Free, Tax Free, All American Equity, China
Region Opportunity, Global Resources, World Precious Minerals and
Gold Shares. The Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended.
All funds are diversified with the exception of China Region
Opportunity, Global Resources, World Precious Minerals and Gold
Shares.
The following is a summary of significant accounting policies
consistently followed by the Funds in the preparation of their
financial statements. The policies are in conformity with U.S.
generally accepted accounting principles.
A. SECURITY VALUATIONS
The Funds value investments traded on national or international
securities exchanges or over-the-counter at the last sales price
reported by the security's primary exchange at the time of daily
valuation. Securities for which no sale was reported are valued at
the mean between the last reported bid and asked prices or using
quotes provided by principal market makers. Short-term investments
with effective maturities of sixty days or less at the date of
purchase and investments of U.S. Treasury Securities Cash and U.S.
Government Securities Savings Funds are valued at amortized cost,
which approximates market value. An independent pricing service
values municipal securities and long-term U.S. Government
obligations using a system based on such factors as credit rating,
maturity, coupon and type of security to determine fair value.
B. FAIR VALUED SECURITIES
Securities for which market quotations are not readily available or
which are subject to legal restrictions are valued at their fair
value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
The following factors are generally considered in determining fair
value: nature and duration of any trading restrictions, trading
volume, market values of unrestricted shares of the same or similar
class, investment management's judgment regarding the market
experience of the issuer, financial status and other operational
and market factors affecting the issuer, issuer's management,
quality of the underlying property based on review of independent
geological studies, the extent of a Fund's investment in the
trading securities of the issuer; and other relevant matters. The
fair values may differ from what would have been used had a broader
market for these securities existed.
For securities traded on international exchanges, if events which
may materially affect the value of a Fund's securities occur after
the close of the primary exchange
118
NOTES TO FINANCIAL STATEMENTS June 30, 2007
and before a Fund's net asset value is next determined, then those
securities will be valued at their fair value as determined in good
faith under the supervision of the Board of Trustees. The Funds may
use a systematic fair value model provided by an independent third
party to value international securities.
C. SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on trade date. Realized
gains and losses from security transactions are determined on an
identified-cost basis. Dividend income is recorded on the
ex-dividend date, except that certain dividends from foreign
securities where the ex-dividend date may have passed are recorded
as soon as a fund is informed of the ex-dividend data in the
exercise of reasonable diligence. Interest income, which may
include original issue discount, is recorded on an accrual basis.
Discounts and premiums on securities purchased are accreted and
amortized, respectively, on a yield-to-maturity basis as
adjustments to interest income.
The Funds may purchase securities on a when-issued or
delayed-delivery basis and segregate the liquid assets on their
books to collateralize the obligation until trade settlement. Such
investments are accounted for in the same manner as marketable
portfolio securities.
The equity funds may invest in private placements and initial
public offerings (IPOs), the volatility of which may significantly
affect performance. There is no guarantee that these high-risk
investments will affect a Fund's performance in the same way in the
future.
D. REPURCHASE AGREEMENTS
The Funds may enter into repurchase agreements with recognized
financial institutions or registered broker-dealers and, in all
instances, hold, as collateral, underlying securities with a value
exceeding the principal amount of the repurchase obligation. The
Funds use joint tri-party repurchase agreement accounts with other
funds under common management where uninvested cash is collectively
invested in repurchase agreements, and each participating fund owns
an undivided interest in the account.
E. OPTIONS
Some Funds may write or purchase options on securities to manage
their exposure to stock or commodity markets as well as
fluctuations in interest and currency conversion rates. Written
options include a risk of loss in excess of the option premium. The
use of options carries the risk of a change in value of the
underlying instruments, an illiquid secondary market, or failure of
the counterparty to perform its obligations. The option premium is
the basis for recognition of unrealized or realized gain or loss on
the option. The cost of securities acquired or the proceeds from
securities sold through the exercise of the option is adjusted by
the amount of the premium.
119
NOTES TO FINANCIAL STATEMENTS June 30, 2007
As of June 30, 2007, portfolio securities valued at $587,000,
$20,854,250, and $6,153,780 were held in escrow by the custodian as
cover for call options written for the Global Resources Fund, World
Precious Minerals Fund and Gold Shares Fund, respectively.
Transactions in written call options during the year ended June 30,
2007, were as follows:
CHINA REGION GLOBAL
OPPORTUNITY FUND RESOURCES FUND
----------------------------------------------
NUMBER OF PREMIUMS NUMBER OF PREMIUMS
CONTRACTS RECEIVED CONTRACTS RECEIVED
Options outstanding at June 30, 2006 -- $ -- -- $ --
Options written 150 36,674 15,247 4,021,056
Options closed -- -- (12,923) (3,572,277)
Options expired (150) (36,674) (410) (109,012)
Options exercised -- -- (1,414) (296,418)
----- ------- ------- -----------
Options outstanding at June 30, 2007 -- $ -- 500 $ 43,349
===== ======= ======= ===========
WORLD PRECIOUS
MINERALS FUND GOLD SHARES FUND
-------------------------------------------------
NUMBER OF PREMIUMS NUMBER OF PREMIUMS
CONTRACTS RECEIVED CONTRACTS RECEIVED
Options outstanding at June 30, 2006 -- $ -- -- $ --
Options written 27,147 7,748,039 9,951 2,995,414
Options closed (14,407) (3,678,210) (4,656) (1,332,087)
Options expired (970) (163,017) (335) (49,209)
Options exercised (4,640) (1,839,953) (2,110) (828,321)
-------- ----------- ------ -----------
Options outstanding at June 30, 2007 7,130 $ 2,066,859 2,850 $ 785,797
======== =========== ====== ===========
F. FOREIGN CURRENCY TRANSACTIONS
Some Funds may invest in securities of foreign issuers. The
accounting records of these funds are maintained in U.S. dollars.
At each net asset value determination date, the value of assets and
liabilities denominated in foreign currencies are translated into
U.S. dollars using the current prevailing exchange rate. Security
transactions, income and expenses are converted at the prevailing
rate of exchange on the respective dates of the transaction. The
effect of changes in foreign exchange rates on foreign denominated
securities is included with the net realized and unrealized gain or
loss on securities. Other unrealized foreign currency gains or
losses are reported separately.
G. FORWARD FOREIGN CURRENCY CONTRACTS
The Funds may enter into forward foreign currency contracts to lock
in the U.S. dollar cost of purchase and sale transactions or to
defend the portfolio against currency fluctuations. A forward
foreign currency contract is a commitment to purchase or sell a
foreign currency at a future date at a negotiated rate. These
contracts are valued daily, and the Fund's net equity therein,
representing unrealized gain or loss on the contracts as measured
by the difference between the forward foreign exchange rates at the
dates of entry into the contracts and the
120
NOTES TO FINANCIAL STATEMENTS June 30, 2007
forward rates at the reporting, is included in the statement of
assets and liabilities. Realized and unrealized gains and losses are
included in the statement of operations. Risks may arise upon
entering into these contracts from the potential inability of
counterparties to meet the terms of the contract and from
unanticipated movements in the value of foreign currencies relative
to the U.S. dollar.
Open forward foreign currency contracts at June 30, 2007, were:
FOREIGN IN EXCHANGE SETTLEMENT UNREALIZED UNREALIZED
FUND CONTRACT CURRENCY FOR USD DATE VALUE APPRECIATION (DEPRECIATION)
-------------------------------------------------------------------------------------------------------------------------
China Region Opportunity
SALES:
Canadian Dollar 2,680 $ 2,521 07/05/07 $ 2,515 $ 6 $ --
Canadian Dollar 14,660 13,714 07/13/07 13,764 -- (50)
---------- ---------- ------ -------
16,235 16,279 6 (50)
Global Resources
SALES:
Canadian Dollar 205,169 192,737 07/19/07 192,650 87 --
World Precious Minerals
SALES:
Canadian Dollar 14,110 13,274 07/05/07 13,245 29 --
H. FEDERAL INCOME TAXES
The Funds intend to continue to comply with the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of their
taxable income to shareholders. Accordingly, no provision for
federal income taxes is required.
I. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
The Funds record dividends and distributions to shareholders on the
ex-dividend date. Distributions are determined in accordance with
income tax regulations, which may differ from accounting principles
generally accepted in the United States. Accordingly, periodic
reclassifications are made within the Funds' capital accounts to
reflect income and gains available for distribution under income
tax regulations.
The Funds generally make distributions at least annually. The U.S.
Treasury Securities Cash and U.S. Government Securities Savings
Funds accrue dividends, on a daily basis with payment monthly. The
Tax Free and Near-Term Tax Free Funds pay monthly dividends.
Dividends and distributions payable at period end are processed for
reinvestment on the following business day.
J. EXPENSES
Each Fund bears expenses incurred specifically on its behalf plus
an allocation of its share of Trust level expenses. Expense offset
arrangements have been made with the Funds' custodian so the
custodian fees may be paid indirectly by credits earned on the
Funds' cash balances. Such deposit arrangements are an alternative
to overnight investments.
121
NOTES TO FINANCIAL STATEMENTS June 30, 2007
K. SHORT-TERM TRADING (REDEMPTION) FEES
Shares held in the All American Equity Fund 30 days or less are
subject to a short-term trading fee equal to 0.10% of the proceeds of
the redeemed shares. Shares held in the China Region Opportunity Fund
180 days or less are subject to a short-term trading fee equal to
1.00% of the proceeds of the redeemed shares. Shares held in the
Global Resources Fund held 30 days or less are subject to a
short-term trading fee equal to 0.25% of the proceeds of the redeemed
shares. Shares held in the World Precious Minerals and Gold Shares
Funds 30 days or less are subject to a short-term trading fee equal
to 0.50% of the proceeds of the redeemed shares. These fees, which
are retained by the Funds, are accounted for as an addition to
paid-in capital.
L. USE OF ESTIMATES IN FINANCIAL STATEMENT PREPARATION
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period.
Actual results could differ from those estimates.
M. NEW ACCOUNTING PRONOUNCEMENTS
In June 2006, the Financial Accounting Standards Board issued
Interpretation No. 48, Accounting for Uncertainty in Income Taxes -
an interpretation of FASB Statement No. 109 (FIN 48). FIN 48 sets
forth a recognition threshold and measurement method for the
financial statement recognition and measurement of a tax position
taken or expected to be taken on a tax return. FIN 48 is effective on
the last business day of the semi-annual reporting period for fiscal
years beginning after December 15, 2006, and will be applied to all
open tax years as of the effective date. Management is currently
evaluating the impact, if any, the adoption of FIN 48 will have on
the Funds' net assets, results of operations and financial statement
disclosures.
In addition, in September 2006, Statement of Financial Accounting
Standards No. 157, Fair Value Measurements (SFAS 157), was issued and
is effective for fiscal years beginning after November 15, 2007. SFAS
157 defines fair value, establishes a framework for measuring fair
value and expands disclosures about fair value measurements.
Management is currently evaluating the impact the adoption of SFAS
157 will have on the Funds' financial statement disclosures.
NOTE 2: RELATED PARTY TRANSACTIONS
U.S. Global Investors, Inc. (Adviser), under an investment advisory
agreement with the Trust in effect through February 28, 2008,
furnishes management and investment advisory services and, subject
to the supervision of the Trustees, directs the investments of each
Fund according to its investment objectives, policies and
122
NOTES TO FINANCIAL STATEMENTS June 30, 2007
limitations. The Adviser also furnishes all necessary office
facilities, business equipment and personnel for administering the
affairs of the Trust. Frank E. Holmes, a trustee of the Funds, is the
controlling owner of the Adviser.
For the services of the Adviser, each Fund pays a management fee
based upon its net assets. Fees are accrued daily and paid monthly.
The contractual management fee for each fund is:
ANNUAL PERCENTAGE OF
FUND AVERAGE DAILY NET ASSETS
------------------------------------------------------------------------
Gold Shares, All American .75% of the first $250,000,000 and
Equity and Tax Free .50% of the excess
U.S. Treasury Securities Cash and .50% of the first $250,000,000 and
U.S. Government Securities Savings .375% of the excess
World Precious Minerals and 1.00% of the first $250,000,000 and
Global Resources .50% of the excess
Near-Term Tax Free 0.50%
China Region Opportunity 1.25%
The Adviser has agreed to reimburse specific funds so that their
total operating expenses will not exceed certain annual percentages
of average net assets. The expenses for the year ended June 30,
2007, were limited as follows: U.S. Government Securities Savings
Fund at 0.45%, Near-Term Tax Free Fund at 0.45%, Tax Free Fund at
0.70% and All American Equity Fund at 1.75%. The Adviser has
contractually limited total fund operating expenses of the U.S.
Treasury Securities Cash Fund to not exceed 1.00% on an annualized
basis from April 1, 2007, through November 1, 2007. In addition,
the Adviser has contractually limited total fund operating expenses
to not exceed 0.45% for the U.S. Government Securities Savings
Fund, 0.45% for the Near-Term Tax Free Fund, 0.70% for the Tax Free
Fund and 1.75% for the All American Equity Fund on an annualized
basis through November 1, 2007, and until such later date as the
Adviser determines.
United Shareholder Services, Inc. (USSI), a wholly-owned subsidiary
of the Adviser, is the transfer agent for the Funds. Each Fund pays
an annual fee based on the number of shareholder accounts for
transfer agency services. Certain account fees are paid directly by
shareholders to the transfer agent, which, in turn, reduces its
charge to the Funds. Effective April 1, 2007, this agreement was
amended between the Adviser and USSI to lower the account fee and
incorporate transaction- and activity-based fees. Brown Brothers
Harriman & Co. serves as the custodian, fund accounting and
administration service agent with a fee structure based primarily
on average net assets of the Funds. Additionally, the Adviser was
reimbursed for in-house legal and internal administration services
pertaining
123
NOTES TO FINANCIAL STATEMENTS June 30, 2007
to the Funds during the year ended June 30, 2007, in the amounts of
$232,967 and $43,708, respectively.
During the year ended June 30, 2007, A & B Mailers, Inc., a
wholly-owned subsidiary of the Adviser, and USSI were paid $307,135
for mailing services provided to the Funds.
The independent Trustees receive compensation for serving on the
Board. The Chairman and members of special committees receive
additional compensation. Trustees are also reimbursed for
out-of-pocket expenses incurred while attending meetings. Frank E.
Holmes receives no compensation from the Funds for serving on the
Board.
NOTE 3: INVESTMENT ACTIVITY
Cost of purchases and proceeds from sales of long-term securities
for the year ended June 30, 2007, are summarized as follows:
FUND PURCHASES SALES
-----------------------------------------------------------------------
Near-Term Tax Free $ 2,897,544 $ 3,035,065
Tax Free 3,100,015 889,927
All American Equity 44,809,513 45,139,257
China Region Opportunity 153,054,540 160,552,130
Global Resources 1,401,106,351 1,474,652,163
World Precious Minerals 449,613,894 456,170,314
Gold Shares 123,922,713 124,651,779
U.S. Treasury Securities Cash and U.S. Government Securities
Savings held only short-term investments. The Funds neither
purchased nor sold long-term U.S. government securities during the
period.
Investments in foreign issuers as a percent of total investments at
June 30, 2007, were: 90.50% of China Region Opportunity, 54.98% of
Global Resources, 76.20% of World Precious Minerals and 59.19% of
Gold Shares.
124
NOTES TO FINANCIAL STATEMENTS June 30, 2007
NOTE 4: TAX INFORMATION
The following table presents the income tax basis of the securities
owned at June 30, 2007, and the tax basis components of net
unrealized appreciation or depreciation:
GROSS GROSS NET UNREALIZED
AGGREGATE UNREALIZED UNREALIZED APPRECIATION
FUND TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
---------------------------------------------------------------------------------------------------
U.S. Treasury Securities Cash $ 115,623,989 $ -- $ -- $ --
U.S. Government Securities Savings 470,051,834 -- -- --
Near-Term Tax Free 13,099,785 28,106 (65,646) (37,540)
Tax Free 15,857,505 381,031 (69,753) 311,278
All American Equity 20,111,222 3,792,528 (274,686) 3,517,842
China Region Opportunity 75,971,067 20,549,287 (881,227) 19,668,060
Global Resources 1,184,288,646 244,795,455 (38,430,241) 206,365,214
World Precious Minerals 829,303,152 152,374,643 (54,200,324) 98,174,319
Gold Shares 162,842,865 28,341,535 (11,899,218) 16,442,317
As of June 30, 2007, the components of distributable earnings on a
tax basis were as follows:
UNDISTRIBUTED UNDISTRIBUTED UNDISTRIBUTED NET UNREALIZED
TAX EXEMPT ORDINARY LONG-TERM APPRECIATION
FUND INCOME INCOME CAPITAL GAINS (DEPRECIATION)
----------------------------------------------------------------------------------------------------
U.S. Treasury Securities Cash $ -- $ 4,412 $ -- $ --
U.S. Government Securities Savings -- 438,725 -- --
Near-Term Tax Free -- 26,084 -- (37,540)
Tax Free 13,012 28,412 -- 311,278
All American Equity -- 1,526,913 239,229 3,517,842
China Region Opportunity -- 12,096,548 334,664 19,669,240
Global Resources -- 78,201,669 55,580,940 206,310,981
World Precious Minerals -- 92,424,515 33,909,381 98,801,880
Gold Shares -- 1,341,359 -- 16,647,148
The differences between book-basis and tax-basis unrealized
appreciation (depreciation) for the All American Equity, China
Region Opportunity, Global Resources, World Precious Minerals and
Gold Shares Funds are attributable primarily to the tax deferral of
losses on wash sales, investment in passive foreign investment
companies (PFIC), forwards marked to market, unreversed return of
capital in Canadian Trusts and tax straddle loss deferrals on
written options.
Reclassifications are made to the Funds' capital accounts to
reflect income and gains available for distribution (or available
capital loss carryovers) under income
125
NOTES TO FINANCIAL STATEMENTS June 30, 2007
tax regulations. For the year ended June 30, 2007, the Funds recorded
the following reclassifications to increase (decrease) the accounts
listed below:
ACCUMULATED NET ACCUMULATED NET PAID-IN
FUND INVESTMENT INCOME REALIZED GAIN CAPITAL
--------------------------------------------------------------------------------------
U.S. Treasury Securities Cash $ -- $ 7,529 $ (7,529)
All American Equity 62,274 (62,274) --
China Region Opportunity 377,655 (377,654) (1)
Global Resources 36,615,715 (36,615,714) (1)
World Precious Minerals 40,471,223 (40,471,221) (2)
Gold Shares 419,522 22,666,775 (23,086,297)
The tax character of distributions paid during the year ended June
30, 2007, were as follows:
TAX-EXEMPT ORDINARY LONG-TERM
FUND INCOME INCOME CAPITAL GAINS TOTAL
-----------------------------------------------------------------------------------------------
U.S. Treasury Securities Cash $ -- $ 5,084,891 $ -- $ 5,084,891
U.S. Government Securities Savings -- 21,124,058 -- 21,124,058
Near-Term Tax Free 439,674 61,980 -- 501,654
Tax Free 542,232 73,157 -- 615,389
All American Equity -- 2,601,988 346,118 2,948,106
China Region Opportunity -- 1,333,614 -- 1,333,614
Global Resources -- 146,150,003 36,449,062 182,599,065
World Precious Minerals -- 77,575,723 43,172,873 120,748,596
Gold Shares -- -- -- --
The tax character of distributions paid during the fiscal year
ended June 30, 2006, were as follows:
TAX-EXEMPT ORDINARY LONG-TERM
FUND INCOME INCOME CAPITAL GAINS TOTAL
---------------------------------------------------------------------------------------------
U.S. Treasury Securities Cash $ -- $ 3,519,445 $ -- $ 3,519,445
U.S. Government Securities Savings -- 14,951,407 -- 14,951,407
Near-Term Tax Free 458,132 53,288 -- 511,420
Tax Free 705,578 40,613 -- 746,191
All American Equity -- -- 455,916 455,916
China Region Opportunity -- 909,532 -- 909,532
Global Resources -- 59,079,652 10,440,800 69,520,452
World Precious Minerals -- 12,189,828 5,460,908 17,650,736
Gold Shares -- 1,018,347 -- 1,018,347
Net realized capital loss carryforwards, for federal income tax
purposes, may be used to offset current or future capital gains
until expiration. The Funds' tax-basis capital gains and losses are
determined only at the end of each fiscal year. The loss
126
NOTES TO FINANCIAL STATEMENTS June 30, 2007
carryforwards and related expiration dates for each fund, as of June
30, 2007, are as follows:
EXPIRATION DATE
FUND 2008 2009 2010 2011
------------------------------------------------------------------------------------
U.S. Treasury Securities Cash $ 10,657 $ -- $ -- $ 285
U.S. Government Securities Savings -- -- -- --
Near-Term Tax Free 17,590 59,454 -- --
Tax Free -- 236,924 -- --
All American Equity -- -- -- --
China Region Opportunity -- -- -- --
Global Resources -- -- -- --
World Precious Minerals -- -- -- --
Gold Shares 2,931,501 4,098,335 -- 1,122,291
EXPIRATION DATE
FUND 2012 2013 2014 2015 TOTAL
-----------------------------------------------------------------------------------------
U.S. Treasury Securities Cash $ -- $ -- $ -- $ -- $ 10,942
U.S. Government Securities Savings 9,621 -- -- -- 9,621
Near-Term Tax Free 46,218 33,686 2,760 202,719 362,427
Tax Free 90,567 421,236 -- -- 748,727
All American Equity -- -- -- -- --
China Region Opportunity -- -- -- -- --
Global Resources -- -- -- -- --
World Precious Minerals -- -- -- -- --
Gold Shares -- -- -- -- 8,152,127
POST OCTOBER 31, 2006 POST OCTOBER 31, 2006
FUND CAPITAL LOSS DEFERRAL CURRENCY LOSS DEFERRAL
--------------------------------------------------------------------------------
Near-Term Tax Free $ 2,877 $ --
The amounts above, in accordance with tax rules, are deemed to have
occurred on July 1, 2007.
NOTE 5: RISKS OF CONCENTRATIONS
The China Region Opportunity Fund may be exposed to risks not
typically associated with investments in the United States, due to
concentration of investments in foreign issuers in the region.
These investments present risks resulting from disruptive political
or economic conditions and the potential imposition of adverse
governmental laws or currency exchange restrictions affecting the
area.
The investment policies of the Gold Shares and World Precious
Minerals Funds present unique risks to their respective portfolios'
values. The prices of gold and other precious metals may be subject
to fluctuations caused by international monetary and political
developments including trade or currency restrictions, currency
devaluation and revaluation, and social and political conditions
within a country. Fluctuations in the prices of gold and other
precious metals will affect the market values of the securities
held by these funds.
127
NOTES TO FINANCIAL STATEMENTS June 30, 2007
NOTE 6: CREDIT ARRANGEMENTS
Each of the U.S. Global Investors Funds, along with other funds
under common management, has a revolving credit facility with Brown
Brothers Harriman & Co. (BBH). Borrowings of each Fund are
collateralized by any or all of the securities held by BBH as the
Funds' custodian. Interest on borrowings is charged at the current
overnight Federal Funds Rate plus 2%. Each fund has a maximum
borrowing limit of 10% of qualified assets. The aggregate
borrowings by all the funds under the agreement cannot exceed
$30,000,000 at any one time. There were no borrowings under the
revolving credit facility during the year ended June 30, 2007.
NOTE 7: SHARES OF BENEFICIAL INTEREST
At June 30, 2007, individual shareholders holding more than 5% of
outstanding shares comprised 13.76% of the Tax Free Fund. In
addition, the Adviser held 10.90% and 9.39% of the Near-Term Tax
Free Fund and the Tax Free Fund, respectively.
128
FINANCIAL HIGHLIGHTS
U.S. TREASURY SECURITIES CASH FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2007 2006 2005 2004 2003
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income .04 .03 .01 --(a) .01
Net realized and unrealized gain -- -- -- -- --
-------- -------- -------- -------- --------
Total from investment activities .04 .03 .01 --(a) .01
-------- -------- -------- -------- --------
Distributions from net investment income (.04) (.03) (.01) --(a) (.01)
- -------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (b) 4.36% 3.11% 1.12% .08% .57%
Ratios to Average Net Assets:
Net investment income 4.27% 3.06% 1.11% .07% .52%
Total expenses .91% .92% .97% 1.00% .97%
Expenses reimbursed (c) (.02)% -- -- (.04)% --
Net recouped fees (d) -- .03% -- -- --
Net expenses (e) .89% .95% .97% .96% .97%
NET ASSETS, END OF YEAR (IN THOUSANDS) $116,012 $119,028 $124,058 $112,575 $123,879
<FN>
(a) The per share amount does not round to a full penny.
(b) Assumes investment at the net asset value at the beginning
of the period, reinvestment of all distributions and a
complete redemption of the investment at the net asset value
at the end of the period.
(c) Expenses reimbursed reflect reductions to total expenses, as
discussed in the notes to the financial statements. These
amounts would decrease the net investment income ratio had
such reductions not occurred.
(d) During the year ended June 30, 2004, the Adviser waived fees
and/or reimbursed expenses as a result of a Minimum Yield
Agreement in the amount of $45,136. As allowed by the
recapture provision of this agreement, the U.S. Treasury
Securities Cash Fund reimbursed the Adviser the previously
waived amount of $45,136 during the year ended June 30,
2006.
(e) The net expense ratios shown above reflect expenses after
reimbursements but exclude the effect of reductions to total
expenses for any expenses offset. Expense offset
arrangements reduce total expenses, as discussed in the
notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions
not occurred. The effect of expenses offset are as follows:
</FN>
YEAR ENDED JUNE 30,
----------------------------------------------------------------
2007 2006 2005 2004 2003
U.S. Treasury Securities Fund
-----------------------------
Ratios to Average Net Assets:
Expenses offset (f) -- -- -- -- --
<FN>
(f) Effect on the expense ratio was not greater than 0.005%.
</FN>
See accompanying notes to financial statements.
129
FINANCIAL HIGHLIGHTS
U.S. GOVERNMENT SECURITIES SAVINGS FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2007 2006 2005 2004 2003
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income .05 .04 .02 .01 .01
Net realized and unrealized gain --(a) -- -- -- --
-------- -------- -------- -------- --------
Total from investment activities .05 .04 .02 .01 .01
-------- -------- -------- -------- --------
Distributions from net investment income (.05) (.04) (.02) (.01) (.01)
- -------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------
TOTAL RETURN (EXCLUDING ACCOUNT FEES) (b) 4.86% 3.69% 1.70% .63% 1.09%
Ratios to Average Net Assets:
Net investment income 4.75% 3.64% 1.67% .61% 1.08%
Total expenses .62% .64% .65% .65% .61%
Expenses reimbursed (c) (.17)% (.19)% (.20)% (.20)% (.16)%
Net expenses (d) .45% .45% .45% .45% .45%
NET ASSETS, END OF YEAR (IN THOUSANDS) $469,095 $435,417 $411,979 $441,722 $529,829
<FN>
(a) The per share amount does not round to a full penny.
(b) Assumes investment at the net asset value at the beginning
of the period, reinvestment of all distributions and a
complete redemption of the investment at the net asset value
at the end of the period.
(c) Expenses reimbursed reflect reductions to total expenses, as
discussed in the notes to the financial statements. These
amounts would decrease the net investment income ratio had
such reductions not occurred.
(d) The net expense ratios shown above reflect expenses after
reimbursements but exclude the effect of reductions to total
expenses for any expenses offset. Expense offset
arrangements reduce total expenses, as discussed in the
notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions
not occurred. The effect of expenses offset are as follows:
</FN>
YEAR ENDED JUNE 30,
----------------------------------------------------------------
2007 2006 2005 2004 2003
U.S. Government Securities Savings Fund
---------------------------------------
Ratios to Average Net Assets:
Expenses offset -- -- --(e) -- --
<FN>
(e) Effect on the expense ratio was not greater than 0.005%.
</FN>
See accompanying notes to financial statements.
130
FINANCIAL HIGHLIGHTS
NEAR-TERM TAX FREE FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2007 2006 2005* 2004* 2003*
NET ASSET VALUE, BEGINNING OF YEAR $2.12 $2.17 $2.17 $2.23 $2.16
- ---------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income .07 .07 .07 .06 .06
Net realized and unrealized gain (loss) --(a) (.05) (.01) (.06) .07
------- ------- ------- ------- -------
Total from investment activities .07 .02 .06 .00 .13
------- ------- ------- ------- -------
Distributions from net investment income (.07) (.07) (.06) (.06) (.06)
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $2.12 $2.12 $2.17 $2.17 $2.23
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (b) 3.51% .75% 2.75% .20% 5.97%
Ratios to Average Net Assets:
Net investment income 3.43% 3.08% 2.79% 2.73% 2.83%
Total expenses 1.63% 1.54% 1.49% 1.25% 1.44%
Expenses reimbursed (c) (1.18)% (1.09)% (1.04)% (.80)% (.94)%
Net expenses (d) .45% .45% .45% .45% .50%
Portfolio turnover rate 22% 33% 5% 21% 20%
NET ASSETS, END OF YEAR (IN THOUSANDS) $13,383 $15,830 $18,706 $18,673 $21,979
<FN>
* The values shown for Near-Term Tax Free Fund prior periods
have been adjusted to reflect the 5-for-1 stock split, which
was effective on January 3, 2005.
(a) The per share amount does not round to a full penny.
(b) Assumes investment at the net asset value at the beginning
of the period, reinvestment of all distributions and a
complete redemption of the investment at the net asset value
at the end of the period.
(c) Expenses reimbursed reflect reductions to total expenses, as
discussed in the notes to the financial statements. These
amounts would decrease the net investment income ratio had
such reductions not occurred.
(d) The net expense ratios shown above reflect expenses after
reimbursements but exclude the effect of reductions to total
expenses for any expenses offset. Expense offset
arrangements reduce total expenses, as discussed in the
notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions
not occurred. The effect of expenses offset are as follows:
</FN>
YEAR ENDED JUNE 30,
----------------------------------------------------------------
2007 2006 2005 2004 2003
Near-Term Tax Free Fund
-----------------------
Ratios to Average Net Assets:
Expenses offset (e) -- -- -- -- --
<FN>
(e) Effect on the expense ratio was not greater than 0.005%.
</FN>
See accompanying notes to financial statements.
131
FINANCIAL HIGHLIGHTS
TAX FREE FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2007 2006 2005 2004 2003
NET ASSET VALUE, BEGINNING OF YEAR $11.98 $12.33 $12.08 $12.65 $12.18
- --------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income .50 .52 .44 .43 .42
Net realized and unrealized gain (loss) --(a) (.36) .25 (.58) .48
------- ------- ------- ------- -------
Total from investment activities .50 .16 .69 (.15) .90
------- ------- ------- ------- -------
Distributions from net investment income (.50) (.51) (.44) (.42) (.43)
- --------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $11.98 $11.98 $12.33 $12.08 $12.65
- --------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (b) 4.15% 1.30% 5.78% (1.25)% 7.49%
Ratios to Average Net Assets:
Net investment income 4.09% 4.01% 3.50% 3.22% 3.34%
Total expenses 1.86% 1.69% 1.47% 1.09% 1.22%
Expenses reimbursed (c) (1.16)% (.99)% (.77)% (.39)% (.52)%
Net expenses (d) .70% .70% .70% .70% .70%
Portfolio turnover rate 6% 19% 40% 54% 26%
NET ASSETS, END OF YEAR (IN THOUSANDS) $15,940 $14,992 $22,433 $28,167 $55,283
<FN>
(a) The per share amount does not round to a full penny.
(b) Assumes investment at the net asset value at the beginning
of the period, reinvestment of all distributions and a
complete redemption of the investment at the net asset value
at the end of the period.
(c) Expenses reimbursed reflect reductions to total expenses, as
discussed in the notes to the financial statements. These
amounts would decrease the net investment income ratio had
such reductions not occurred.
(d) The net expense ratios shown above reflect expenses after
reimbursements but exclude the effect of reductions to total
expenses for any expenses offset. Expense offset
arrangements reduce total expenses, as discussed in the
notes to the financial statements. These amounts would
decrease the net investment income ratio had such reductions
not occurred. The effect of expenses offset are as follows:
</FN>
YEAR ENDED JUNE 30,
----------------------------------------------------------------
2007 2006 2005 2004 2003
Tax Free Fund
-------------
Ratios to Average Net Assets:
Expenses offset (e) -- -- -- -- --
<FN>
(e) Effect on the expense ratio was not greater than 0.005%.
</FN>
See accompanying notes to financial statements.
132
FINANCIAL HIGHLIGHTS
ALL AMERICAN EQUITY FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2007 2006 2005 2004 2003
NET ASSET VALUE, BEGINNING OF YEAR $27.59 $24.47 $22.53 $19.15 $21.20
- --------------------------------------------------------------------------------------------------------
Investment Activities
Net investment loss (.08) (.18) (.02) (.11) (.03)
Net realized and unrealized gain (loss) 4.94 3.89 1.96 3.49 (2.02)
------- ------- ------- ------- -------
Total from investment activities 4.86 3.71 1.94 3.38 (2.05)
------- ------- ------- ------- -------
Distributions from net realized gains (3.87) (.59) -- -- --
Short-Term Trading Fees * (a) -- -- -- -- --
- --------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $28.58 $27.59 $24.47 $22.53 $19.15
- --------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (b) 19.59% 15.25% 8.61% 17.65% (9.67)%
Ratios to Average Net Assets:
Net investment loss (.28)% (.67)% (.09)% (.49)% (.12)%
Total expenses 2.01% 2.20% 2.44% 2.31% 2.56%
Expenses reimbursed (c) (.26)% (.44)% (.69)% (.56)% (1.06)%
Net expenses (d) 1.75% 1.76% 1.75% 1.75% 1.50%
Portfolio turnover rate 223% 369% 262% 96% 119%
NET ASSETS, END OF YEAR (IN THOUSANDS) $23,479 $21,547 $19,253 $19,974 $18,334
<FN>
* Based on average monthly shares outstanding.
(a) The per share amount does not round to a full penny.
(b) Assumes investment at the net asset value at the beginning
of the period, reinvestment of all distributions and a
complete redemption of the investment at the net asset value
at the end of the period.
(c) Expenses reimbursed reflect reductions to total expenses, as
discussed in the notes to the financial statements. These
amounts would increase the net investment loss ratio had
such reductions not occurred.
(d) The net expense ratios shown above reflect expenses after
reimbursements but exclude the effect of reductions to total
expenses for any expenses offset. Expense offset
arrangements reduce total expenses, as discussed in the
notes to the financial statements. These amounts would
increase the net investment loss ratio had such reductions
not occurred. The effect of expenses offset are as follows:
</FN>
YEAR ENDED JUNE 30,
----------------------------------------------------------------
2007 2006 2005 2004 2003
All American Equity Fund
------------------------
Ratios to Average Net Assets:
Expenses offset --(e) (0.01)% --(e) --(e) --(e)
<FN>
(e) Effect on the expense ratio was not greater than 0.005%.
</FN>
See accompanying notes to financial statements.
133
FINANCIAL HIGHLIGHTS
CHINA REGION OPPORTUNITY FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2007 2006 2005 2004 2003
NET ASSET VALUE, BEGINNING OF YEAR $8.71 $6.87 $5.86 $4.17 $4.38
- --------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income (loss) --* (.01)* (.06) --* (.02)
Net realized and unrealized gain (loss) 3.98* 2.02 1.22 1.69 (.20)
------- ------- ------- ------- -------
Total from investment activities 3.98 2.01 1.16 1.69 (.22)
------- ------- ------- ------- -------
Distributions from net investment income (.16) (.19) (.16) (.05) --
Short-Term Trading Fees * .02 .02 .01 .05 .01
- --------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $12.55 $8.71 $6.87 $5.86 $4.17
- --------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding accounts fees) (a) 46.34% 30.03% 19.98% 41.63% (4.79)%
Ratios to Average Net Assets:
Net investment income (loss) .02% (.08)% (.54)% .05% (.60)%
Expenses (b) 2.02% 2.31% 2.56% 2.25% 3.91%
Portfolio turnover rate 208% 292% 136% 126% 44%
NET ASSETS, END OF YEAR (IN THOUSANDS) $93,805 $67,761 $30,511 $35,090 $12,815
<FN>
* Based on average monthly shares outstanding.
(a) Assumes investment at the net asset value at the beginning
of the period, reinvestment of all distributions and a
complete redemption of the investment at the net asset value
at the end of the period.
(b) The expense ratios shown above exclude the effect of
reductions to total expenses for any expenses offset.
Expense offset arrangements reduce total expenses, as
discussed in the notes to the financial statements. These
amounts would increase the net investment loss ratio, or
decrease the net investment income ratio, as applicable, had
such reductions not occurred. The effect of expenses offset
are as follows:
</FN>
YEAR ENDED JUNE 30,
----------------------------------------------------------------
2007 2006 2005 2004 2003
China Region Opportunity Fund
-----------------------------
Ratios to Average Net Assets:
Expenses offset --(c) (0.01)% --(c) --(c) --(c)
<FN>
(c) Effect on the expense ratio was not greater than 0.005%.
</FN>
See accompanying notes to financial statements.
134
FINANCIAL HIGHLIGHTS
GLOBAL RESOURCES FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2007 2006 2005 2004 2003
NET ASSET VALUE, BEGINNING OF YEAR $17.22 $12.67 $8.39 $5.14 $4.93
- --------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income (loss) .21 .29 .25 .12 (.05)
Net realized and unrealized gain 2.86 5.63 4.67 3.26 .35
---------- ---------- -------- -------- -------
Total from investment activities 3.07 5.92 4.92 3.38 .30
---------- ---------- -------- -------- -------
Distributions
From net investment income (.88) (.32) (.34) (.13) (.09)
From net realized gains (1.71) (1.05) (.30) -- --
---------- ---------- -------- -------- -------
Total distributions (2.59) (1.37) (.64) (.13) (.09)
---------- ---------- -------- -------- -------
Short-Term Trading Fees * (a) -- -- -- -- --
- --------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $17.70 $17.22 $12.67 $8.39 $5.14
- --------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (b) 20.94% 48.91% 60.21% 65.73% 6.43%
Ratios to Average Net Assets:
Net investment income (loss) .74% 1.07% .91% .74% (1.38)%
Expenses (c) .95% .96% 1.30% 1.54% 3.75%
Portfolio turnover rate 122% 157% 116% 140% 101%
NET ASSETS, END OF YEAR (IN THOUSANDS) $1,383,250 $1,281,664 $488,183 $135,574 $14,884
<FN>
* Based on average monthly shares outstanding.
(a) The per share amount does not round to a full penny.
(b) Assumes investment at the net asset value at the beginning
of the period, reinvestment of all distributions and a
complete redemption of the investment at the net asset value
at the end of the period.
(c) The expense ratios shown above exclude the effect of
reductions to total expenses for any expenses offset.
Expense offset arrangements reduce total expenses, as
discussed in the notes to the financial statements. These
amounts would increase the net investment loss ratio, or
decrease the net investment income ratio, as applicable, had
such reductions not occurred. The effect of expenses offset
are as follows:
</FN>
YEAR ENDED JUNE 30,
----------------------------------------------------------------
2007 2006 2005 2004 2003
Global Resources Fund
---------------------
Ratios to Average Net Assets:
Expenses offset (0.01)% (0.01)% --(d) --(d) --(d)
<FN>
(d) Effect on the expense ratio was not greater than 0.005%.
</FN>
See accompanying notes to financial statements.
135
FINANCIAL HIGHLIGHTS
WORLD PRECIOUS MINERALS FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2007 2006 2005 2004 2003
NET ASSET VALUE, BEGINNING OF YEAR $28.86 $15.50 $13.68 $9.75 $10.43
- --------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income (loss) --* .72 (.22) (.17)* (.05)
Net realized and unrealized gain (loss) 3.02 13.62 2.42 5.85 (.52)
-------- -------- -------- -------- --------
Total from investment activities 3.02 14.34 2.20 5.68 (.57)
-------- -------- -------- -------- --------
Distributions
From net investment income (1.52) (.67) (.46) (1.86) (.25)
From net realized gains (2.04) (.37) -- -- --
-------- -------- -------- -------- --------
Total distributions (3.56) (1.04) (.46) (1.86) (.25)
-------- -------- -------- -------- --------
Short-Term Trading Fees * .02 .06 .08 .11 .14
- --------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $28.34 $28.86 $15.50 $13.68 $9.75
- --------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (a) 11.48% 96.21% 16.50% 57.42% (4.02)%
Ratios to Average Net Assets:
Net investment income (loss) .06% .05% (1.01)% (1.15)% (1.36)%
Expenses (b) .99% 1.13% 1.48% 1.47% 1.92%
Portfolio turnover rate 54% 66% 55% 65% 141%
NET ASSETS, END OF YEAR (IN THOUSANDS) $923,779 $920,249 $268,312 $246,852 $107,212
<FN>
* Based on average monthly shares outstanding.
(a) Assumes investment at the net asset value at the beginning
of the period, reinvestment of all distributions and a
complete redemption of the investment at the net asset value
at the end of the period.
(b) The expense ratios shown above exclude the effect of
reductions to total expenses for any expenses offset.
Expense offset arrangements reduce total expenses, as
discussed in the notes to the financial statements. These
amounts would increase the net investment loss ratio, or
decrease the net investment income ratio, as applicable, had
such reductions not occurred. The effect of expenses offset
are as follows:
</FN>
YEAR ENDED JUNE 30,
----------------------------------------------------------------
2007 2006 2005 2004 2003
World Precious Minerals Fund
----------------------------
Ratios to Average Net Assets:
Expenses offset (c) -- -- -- -- --
<FN>
(c) Effect on the expense ratio was not greater than 0.005%.
</FN>
See accompanying notes to financial statements.
136
FINANCIAL HIGHLIGHTS
GOLD SHARES FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE YEAR ENDED JUNE 30,
2007 2006 2005 2004 2003
NET ASSET VALUE, BEGINNING OF YEAR $15.48 $7.67 $7.00 $5.18 $5.28
- ---------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income (loss) .05 (.01)* (.11) (.10) (.10)
Net realized and unrealized gain (loss) (.56) 7.88 .79 1.91 (.02)
-------- -------- ------- ------- -------
Total from investment activities (.51) 7.87 .68 1.81 (.12)
-------- -------- ------- ------- -------
Distributions from net investment income -- (.12) (.05) (.03) --
Short-Term Trading Fees * .02 .06 .04 .04 .02
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $14.99 $15.48 $7.67 $7.00 $5.18
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN (excluding account fees) (a) (3.17)% 104.15% 10.19% 35.57% (1.89)%
Ratios to Average Net Assets:
Net investment income (loss) .31% (.06)% (1.13)% (1.45)% (1.98)%
Expenses (b) 1.29% 1.47% 1.97% 1.93% 2.64%
Portfolio turnover rate 72% 78% 66% 85% 138%
NET ASSETS, END OF YEAR (IN THOUSANDS) $178,762 $208,027 $63,816 $66,732 $45,720
<FN>
* Based on average monthly shares outstanding.
(a) Assumes investment at the net asset value at the beginning
of the period, reinvestment of all distributions and a
complete redemption of the investment at the net asset value
at the end of the period.
(b) The expense ratios shown above exclude the effect of
reductions to total expenses for any expenses offset.
Expense offset arrangements reduce total expenses, as
discussed in the notes to the financial statements. These
amounts would increase the net investment loss ratio, or
decrease the net investment income ratio, as applicable, had
such reductions not occurred. The effect of expenses offset
are as follows:
</FN>
YEAR ENDED JUNE 30,
----------------------------------------------------------------
2007 2006 2005 2004 2003
Gold Shares Fund
----------------
Ratios to Average Net Assets:
Expenses offset (0.01)% --(c) --(c) --(c) --(c)
<FN>
(c) Effect on the expense ratio was not greater than 0.005%.
</FN>
See accompanying notes to financial statements.
137
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Trustees and Shareholders
of U.S. Global Investors Funds:
We have audited the accompanying statements of assets and
liabilities, including the schedules of investments, of the U.S.
Treasury Securities Cash Fund, U.S. Government Securities Savings
Fund, Near-Term Tax Free Fund, Tax Free Fund, All American Equity
Fund, China Region Opportunity Fund, Global Resources Fund, World
Precious Minerals Fund and Gold Shares Fund, each a portfolio of
U.S. Global Investors Funds (the "Trust") as of June 30, 2007, and
the related statements of operations for the year then ended, and
the statements of changes in net assets for the two-year period then
ended and financial highlights for each of the years in the
five-year period then ended. These financial statements and
financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of June 30, 2007, by
correspondence with the custodian and brokers or by other
appropriate auditing procedures where replies from brokers were not
received. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of each of the respective funds constituting U.S.
Global Investors Funds, as of June 30, 2007, and the results of
their operations, the changes in their net assets and financial
highlights for the periods described above, in conformity with U.S.
generally accepted accounting principles.
/s/ KPMG LLP
Boston, Massachusetts
August 20, 2007
138
TRUSTEES AND OFFICERS (UNAUDITED) June 30, 2007
The following table presents information about the Trustees as of
June 30, 2007, together with a brief description of their principal
occupations during the last five years. The Trustees do not serve a
specified term of office. Each Trustee will hold office until the
termination of the Trust or his earlier death, resignation,
retirement, incapacity or removal. The retirement age for Trustees
is 72 years of age. If you would like more information about the
Trustees, you may call 1-800-US-FUNDS (1-800-873-8637) to request a
free copy of the Statement of Additional Information.
NON-INTERESTED TRUSTEES
NAME (AGE)
ADDRESS
POSITIONS HELD WITH TRUST
LENGTH OF TIME SERVED
NUMBER OF PORTFOLIOS IN FUND PRINCIPAL OCCUPATION(S) AND PREVIOUS POSITIONS
COMPLEX OVERSEEN BY TRUSTEE DURING PAST 5 YEARS AND OTHER DIRECTORSHIPS HELD
- ---------------------------------------------------------------------------------
J. Michael Belz (54) PRINCIPAL OCCUPATION: President and Chief
7900 Callaghan Road Executive Officer of Catholic Life Insurance
San Antonio, TX 78229 since 1984.
Trustee OTHER DIRECTORSHIPS HELD: Director of Broadway
November 2005 to present National Bank from October 2003 to present.
Thirteen portfolios
- ---------------------------------------------------------------------------------
James F. Gaertner (64) PRINCIPAL OCCUPATION: President of Sam Houston
7900 Callaghan Road State University from August 2001 to present.
San Antonio, TX 78229 OTHER DIRECTORSHIPS HELD: Chairman of the Board
Trustee of Directors of Tandy Brands Accessories, Inc.
November 2002 to present from October 1997 to present.
Nine portfolios
- ---------------------------------------------------------------------------------
Clark R. Mandigo (64) PRINCIPAL OCCUPATION: Restaurant operator,
7900 Callaghan Road business consultant from 1991 to present.
San Antonio, TX 78229
Trustee
1998 to present
Thirteen portfolios
- ---------------------------------------------------------------------------------
Walter W. McAllister III (65) PRINCIPAL OCCUPATION: Retired.
7900 Callaghan Road OTHER DIRECTORSHIPS HELD: Director, Texas
San Antonio, TX 78229 Capital Banc Shares, Inc. from 1999 to present.
Trustee
1998 to present
Nine portfolios
- ---------------------------------------------------------------------------------
Willem C.J. van Rensburg (68) PRINCIPAL OCCUPATION: Retired. Professor of
7900 Callaghan Road Geological Science and Petroleum Engineering,
San Antonio, TX 78229 University of Texas at Austin from September
Trustee 1981 to May 2006.
1978 to present
Nine portfolios
- ---------------------------------------------------------------------------------
139
TRUSTEES AND OFFICERS (UNAUDITED) June 30, 2007
INTERESTED TRUSTEE
NAME (AGE)
ADDRESS
POSITIONS HELD WITH TRUST
LENGTH OF TIME SERVED
NUMBER OF PORTFOLIOS IN FUND PRINCIPAL OCCUPATION(S) AND PREVIOUS POSITIONS
COMPLEX OVERSEEN BY TRUSTEE DURING PAST 5 YEARS AND OTHER DIRECTORSHIPS HELD
- ---------------------------------------------------------------------------------
Frank Holmes * (52) PRINCIPAL OCCUPATION: Director, Chief Executive
7900 Callaghan Road Officer, and Chief Investment Officer of the
San Antonio, TX 78229 Adviser. Since October 1989, Mr. Holmes has
Trustee, Chief Executive served and continues to serve in various
Officer, Chief Investment positions with the Adviser, its subsidiaries,
Officer, President and the investment companies it sponsors.
1989 to present OTHER DIRECTORSHIPS HELD: Chairman of the Board
Thirteen portfolios of Directors of Endeavour Mining Capital from
November 2005 to present. Director of 71316
Ontario, Inc. from April 1987 to present and of
F. E. Holmes Organization, Inc. from July 1978
to present.
- ---------------------------------------------------------------------------------
<FN>
*Mr. Holmes is an "interested person" of the Trust by virtue of his
positions with U.S. Global Investors, Inc.
</FN>
140
TRUSTEES AND OFFICERS (UNAUDITED) June 30, 2007
The following table presents information about each Officer of the
Trust as of June 30, 2007, together with a brief description of
their principal occupations during the last five years. Each holds
office until his or her successor is duly elected and qualified.
OFFICERS
NAME (AGE)
ADDRESS
POSITIONS HELD WITH TRUST
LENGTH OF TIME SERVED PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- --------------------------------------------------------------------------------
Frank Holmes (52) Director, Chief Executive Officer, and Chief
7900 Callaghan Road Investment Officer of the Adviser. Since
San Antonio, TX 78229 October 1989, Mr. Holmes has served and
Trustee, Chief Executive continues to serve in various positions with
Officer, Chief Investment the Adviser, its subsidiaries, and the
Officer, President investment companies it sponsors.
1989 to present
- --------------------------------------------------------------------------------
Susan McGee (48) President and General Counsel of the Adviser.
7900 Callaghan Road Since September 1992, Ms. McGee has served and
San Antonio, TX 78229 continues to serve in various positions with
Executive Vice President, the Adviser, its subsidiaries, and the
Secretary, General Counsel investment companies it sponsors.
1997 to present
- --------------------------------------------------------------------------------
Catherine Rademacher (47) Treasurer of the Trust and Chief Financial
7900 Callaghan Road Officer of the Adviser. Since April 2004, Ms.
San Antonio, TX 78229 Rademacher has served in various positions with
Treasurer the Adviser, its subsidiaries, and the
July 2004 to present investment companies it sponsors. Associate
with Resources Connection from July 2003 to
February 2004. Recruiting Manager with Robert
Half International from November 2002 to June
2003. Controller of Luby's Inc. from June 2000
to October 2002.
- --------------------------------------------------------------------------------
Charles Lutter, Jr. (62) Private law practice since 2001.
7900 Callaghan Road
San Antonio, TX 78229
Chief Compliance Officer
July 2004 to present
- --------------------------------------------------------------------------------
Shannon F. Neill (44) Chief Operating Officer of the Adviser since
7900 Callaghan Road September 2004. Mr. Neill serves as President
San Antonio, TX 78229 of various subsidiaries of the Adviser. Manager
Vice President Shareholder with Accenture LLP from March 2003 to August
Services 2004. Chief Financial Officer of Cut Craft,
June 2006 to present Inc., from April 1995 to March 2003.
- --------------------------------------------------------------------------------
T. Kelly Niland (45) Director of Investment Operations of the
7900 Callaghan Road Adviser since January 2006. Fund Accounting
San Antonio, TX 78229 Manager with AIM Investments from June 1992 to
Assistant Treasurer January 2006.
June 2006 to present
- --------------------------------------------------------------------------------
141
ADDITIONAL INFORMATION (UNAUDITED)
ADDITIONAL FEDERAL TAX INFORMATION
The percentage of tax-exempt dividends paid by the Funds for the
year ended June 30, 2007, was:
Near-Term Tax Free 87.64%
Tax Free 88.11%
The percentage of ordinary income dividends paid by the Funds during
the year ended June 30, 2007, which qualify for the Dividends
Received Deduction available to corporate shareholders was:
All American 4.20%
Global Resources 1.29%
World Precious Minerals 0.46%
The Funds hereby designate the following approximate amounts as
capital gain dividends for the purpose of the dividends paid
deduction:
All American $ 346,118
Global Resources 36,449,062
World Precious Minerals 43,172,873
The amounts which represent foreign source income and foreign taxes
paid during the year ended June 30, 2007 are as follows:
FOREIGN
SOURCE FOREIGN TAX
INCOME CREDIT
------- -----------
China Region Opportunity $ 1,274,539 $ 20,097
Global Resources 13,341,500 1,502,748
World Precious Minerals 2,096,526 227,818
Gold Shares 501,161 47,886
In January 2008, the Funds will report on Form 1099-DIV the tax
status of all distributions made during the calendar year 2007. The
funds intend to distribute the maximum amount of qualified dividend
income allowable. The amount of qualified dividend income
distributed by each fund will be reported to shareholders on their
Form 1099-DIV. Shareholders should use the information on Form
1099-DIV for their income tax returns.
PROXY VOTING
A description of the policies and procedures that the Funds use to
determine how to vote proxies relating to portfolio securities is
available without charge, upon request, by calling 1-800-US-FUNDS
(1-800-873-8637). It also appears in the Funds' statement of
additional information (Form 485B), which can be found on the SEC's
website at www.sec.gov.
Information regarding how the Funds voted proxies relating to
portfolio securities during the most recent 12-month period ended
June 30 is available without charge, upon request, by calling
1-800-US-FUNDS (1-800-873-8637) or accessing the Funds' Form N-PX on
the SEC's website at www.sec.gov.
AVAILABILITY OF QUARTERLY PORTFOLIO SCHEDULES
The Funds provide complete lists of holdings four times in each
fiscal year, at the quarter-ends. For the second and fourth
quarters, the lists appear in the Funds' semi-annual and annual
reports to shareholders. For the first and third quarters, the Funds
file the lists with the SEC on Form N-Q.
142
ADDITIONAL INFORMATION (UNAUDITED)
Shareholders can look up the Funds' Forms N-Q on the SEC's website at
www.sec.gov. You may also visit or call the SEC's Public Room in
Washington, D.C. (1-202-942-8090) or send a request plus a duplicating
fee to the SEC, Public Reference Section, Washington, DC 20549-0102 or
by electronic request at the following e-mail address:
publicinfo@sec.gov.
APPROVAL OF THE ADVISORY AGREEMENT FOR EACH FUND
On February 12, 2007, the Board of Trustees, including all of the
Trustees who are not "interested persons" of the Trust (the
"Independent Trustees"), approved continuation of the advisory
agreement with the Adviser for each Fund for an additional one-year
term. In considering approval of the agreement, the Trustees
reviewed a variety of materials relating to each Fund and the
Adviser, including: (i) the nature, extent and quality of the
services provided by the Adviser, (ii) comparative performance, fee
and expense information versus a peer group of similar mutual funds
provided by Lipper Inc. (each, a "Peer Group") and performance
information versus a broader array of comparative mutual funds
provided by Lipper Inc. (each, a "Peer Universe"), (iii) the costs
of services provided and estimated profits realized by the Adviser
and its affiliates, (iv) the extent to which economies of scale are
realized as the Funds grow, (v) whether fee levels reflect any
possible economies of scale for the benefit of Fund shareholders,
(vi) comparisons of services rendered and amounts paid to other
registered investment companies managed by the Adviser and other
accounts managed by the Adviser, and (vii) benefits realized by the
Adviser (and its affiliates) from its relationship with the Funds.
The Independent Trustees began their process of reviewing
information and considering approval of the agreement in November
2006 and were represented by independent legal counsel throughout
the process. After a November 29, 2006 meeting, at the direction of
the Independent Trustees, independent counsel requested additional
information from the Adviser to be presented to the Independent
Trustees in advance of their February 12, 2007 meeting. As a result,
the independent Trustees received information from the Adviser
describing the foregoing information. In addition, the Independent
Trustees received materials from their independent legal counsel
discussing the legal standards applicable to their consideration of
the agreement. After their review of the information received, the
Independent Trustees presented their findings and recommendations to
the full Board.
In considering the nature, extent and quality of the services
provided by the Adviser, the board reviewed information relating to
the Adviser's operations and personnel. Among other things, the
Adviser provided biographical information on its professional staff
and descriptions of its organizational and management structure. In
the course of its deliberations the board evaluated, among other
things, information relating to the investment philosophy,
strategies and techniques used in managing each Fund, the
qualifications and experience of the Adviser's investment personnel,
the Adviser's brokerage practices, including the extent to which the
Adviser obtains research through "soft dollar" arrangements with the
Funds' brokerage, and the financial and non-financial resources
available to provide services required under the advisory agreement.
In considering the reasonableness of the fee payable to the Adviser
for managing each Fund, the board reviewed, among other things,
financial statements of the Adviser and an analysis of the
profitability to the Adviser and its affiliates of their
relationship with each Fund over various time periods, which
analysis identified revenues and other benefits received by the
Adviser and its affiliates from managing each Fund, the costs
associated with providing such services and the resulting
profitability to the Adviser and its affiliates from these
relationships on a Fund-by-Fund
143
ADDITIONAL INFORMATION (UNAUDITED)
basis and as a group of Funds. The board also compared each Fund's
management fee to the fees charged by the Adviser to other registered
investment companies and to other clients managed by the Adviser. The
board noted that, although certain clients may have investment
objectives and policies that are similar to some of the Funds, the
contractual fees payable to the Adviser for managing those client
assets are the same or higher than the management fees of the similar
Funds. The board considered the current and historic asset levels of
each Fund and the historical willingness of the Adviser to waive fees
and pay expenses of the Funds from time to time to limit the total
expenses of the Funds. The board also considered that the management
fee for all of the Funds except for the Near-Term Tax Free Fund and
the China Region Opportunity Fund include a breakpoint. The board also
noted that the Adviser did not believe, with respect to administration
and investment advisory services provided, that it was realizing
significant economies of scale and that the current fees represent an
appropriate sharing of economies of scale. The board concluded that
the profitability to the Adviser and its affiliates from their
relationship with the Funds is not excessive and that the Adviser is
not realizing material benefits from economies of scale that would
warrant adjustments to the fees for any Fund at this time. The board
concluded that, in light of the nature, extent and quality of the
services provided by the Adviser and the levels of profitability
associated with providing these services, the fees charged by the
Adviser under the Advisory Agreement to each Fund are reasonable.
In addition to the foregoing, the board considered the specific
factors and reached the related conclusions set forth below with
respect to each Fund:
U.S. Government Securities Savings Fund
- ---------------------------------------
The board noted that the U.S. Government Securities Saving Fund has
been among the top performing funds of its Peer Group and Peer
Universe for the one, two, three, four, five and ten-year periods
ending August 31, 2006. Accordingly, the board concluded that the
Fund's performance has been satisfactory. In determining that the
fees charged by the Adviser are reasonable, the board also noted
that, over various time periods, the Adviser has waived fees and
paid expenses of the Fund and has currently agreed to limit expenses
to not exceed .45% of average net assets through November 1, 2007,
and that the Fund's management fee and total expenses, net of
contractual waivers and expense reimbursements, are among the lowest
in its Peer Group.
U.S. Treasury Securities Cash Fund
- ----------------------------------
The board noted that the U.S. Treasury Securities Cash Fund has
underperformed its Peer Group and Peer Universe for the one, two,
three, four, five and ten-year periods ending August 31, 2006. The
independent trustees also requested and reviewed the Fund's gross
performance, which indicated that the Fund's performance was
competitive on a gross basis and that the Fund's net relative
underperformance is primarily attributable to the Fund's high
relative expenses. As a result, the board concluded that the Fund's
performance has been consistent with reasonable expectations in
light of the nature, quality and extent of the services provided to
shareholders. In this regard, the board noted that the Fund is
designed to be used by shareholders as a substitute for a
traditional checking account, that the Fund's high relative expenses
are explained, in part, by the unlimited free checkwriting and
related shareholder services offered by the Fund, and that the
Fund's relative underperformance is attributable primarily to high
expenses, including non-management expenses, incurred by the Fund in
making these services available to shareholders. The Board also
noted the Adviser's commitment to seek to reduce non-management
expenses. In
144
ADDITIONAL INFORMATION (UNAUDITED)
determining that the fees charged by the Adviser are reasonable, the
Board noted that the Fund's contractual management fee is competitive
with that of its Peer Group.
Tax Free Fund
- -------------
The board noted that while the Tax Free Fund has underperformed
relative to its Peer Group for the three, four, five and ten-year
periods ending August 31, 2006, the performance of the Fund has
improved over the one and two-year periods ending August 31, 2006. The
board noted the small size of the Fund and that the Fund's three,
four, five and ten-year period performance was adversely affected by
the Fund's conservative risk profile. In light of the above, the board
concluded that performance was satisfactory. In determining that the
fees charged by the Adviser are reasonable, the board noted that while
the Fund's contractual management fee is above the median for its Peer
Group, over various time periods, the Adviser has waived fees and
expenses of the Fund and has currently agreed to limit expenses to not
exceed .70% of average net assets through November 1, 2007, and the
Fund's management fee and total expenses, net of contractual waivers,
are below the median for its Peer Group.
Near-Term Tax Free Fund
- -----------------------
The board noted that the Near-Term Tax Free Fund has performed at or
above the median of its Peer Group and Peer Universe for the one,
two and three-year periods ending August 31, 2006. Accordingly, the
board concluded that the Fund's overall performance has been
satisfactory. In determining that the fees charged by the Adviser
are reasonable, the board noted that the Fund is among the smallest
funds in its Peer Group, that over various time periods the Adviser
has waived fees and paid expenses of the Fund and has currently
agreed to limit expenses to not exceed .45% of average net assets
through November 1, 2007, and that the Fund's management fee and
total expenses, net of contractual waivers and expense
reimbursements, are among the lowest of its Peer Group.
All American Equity Fund
- ------------------------
The board noted that the All American Equity Fund has performed well
relative to its Peer Group and Peer Universe for the one, two,
three, four and five-year periods ending August 31, 2006.
Accordingly, the Board concluded that the overall performance of the
Fund has been satisfactory. In determining that the fees charged by
the Adviser are reasonable, the board noted that, over various time
periods, the Adviser has waived fees and paid expenses of the Fund
and has currently agreed to limit expenses to not exceed 1.75% of
average net assets through November 1, 2007, and that the Fund's
management fee, net of contractual waivers, is the lowest of its
Peer Group. The board also noted that total expenses of the Fund are
high due to the high non-management related expenses relative to its
Peer Group. The board concluded that this is consistent with
reasonable expectations in light of the small size of the Fund and
the small average account size of the Fund relative to its Peer
Group.
China Region Opportunity Fund
- -----------------------------
The board noted that while the China Region Opportunity Fund has
underperformed its Peer Group and Peer Universe for the one-year
period ending August 31, 2006, the Fund outperformed its Peer Group
and Peer Universe for the two, three and four-year periods ending
August 31, 2006. Accordingly, the board concluded that the overall
performance of the Fund has been satisfactory. In determining that
the fees charged by the Adviser are reasonable, the board noted
that, although the Fund's management fee and total expenses are high
compared to its Peer Group, such fees
145
ADDITIONAL INFORMATION (UNAUDITED)
and expenses are consistent with reasonable expectations in light of
the size of the Fund and the nature, quality and extent of the
services provided by the Adviser.
Global Resources Fund
- ---------------------
The board noted that the Global Resources Fund has been among the top
performing funds in its Peer Group and Peer Universe for the one, two,
three, four and five-year periods ending August 31, 2006. Accordingly,
the board concluded that the Fund's performance has been satisfactory.
In determining that the fees charged by the Adviser are reasonable,
the board noted that the Fund's management fee is below the median for
its Peer Group and that the Fund's total expenses are below the median
for its Peer Group.
World Precious Minerals Fund
- ----------------------------
The board noted that the World Precious Minerals Fund has been among
the top performing funds in its Peer Group and Peer Universe for the
one, two, three, four and five-year periods ending August 31, 2006.
Accordingly, the board concluded that the Fund's performance has
been satisfactory. In determining that the fees charged by the
Adviser are reasonable, the board noted that the Fund's contractual
management fee and total expenses are below the median for its Peer
Group.
Gold Shares Fund
- ----------------
The board noted that the Gold Shares Fund has outperformed its Peer
Group and Peer Universe for the one, two, three, four and five-year
periods ending August 31, 2006. Accordingly, the board concluded
that the Fund's performance has been satisfactory. In determining
that the fees charged by the Adviser are reasonable, the board noted
that the Fund's management fee is below the median for its Peer
Group. The board also noted that the Fund's total expenses are
slightly above the median for its Peer Group, with a large portion
of expenses devoted to non-management expenses. The board concluded
that such expenses are consistent with reasonable expectations in
light of the small size of the Fund and the small average account
size of the Fund relative to its Peer Group.
* * * * * *
Based on all of the above-mentioned factors and related conclusions,
with no single factor or conclusion being determinative and with
each trustee not necessarily attributing the same weight to each
factor, the Board of Trustees, including the Independent Trustees,
concluded that approval of the advisory agreement would be in the
interests of each Fund. Accordingly, on February 12, 2007, the Board
of Trustees, including the Independent Trustees, voted to approve
continuation of the advisory agreement with respect to each Fund.
146
ITEM 2. CODE OF ETHICS.
(a) The registrant has adopted a code of ethics that applies to its
principal executive officer and principal financial officer.
(b) During the period covered by this report, no material amendments were
made to the provisions of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, no implicit or explicit
waivers to the provisions of the code of ethics adopted in 2(a) above
were granted.
(d) Not applicable.
(e) Not applicable.
(f) The registrant has posted such code of ethics on its Internet website
at www.usfunds.com.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Trustees has determined that the registrant has at
least three "audit committee financial experts" serving on its audit
committee: Dr. James F. Gaertner, Mr. Clark R. Mandigo, and Mr. Walter W.
McAllister, III are "independent" (as defined in Item 3 of Form N-CSR.)
An "audit committee financial expert" is not an "expert" for any purpose,
including for purposes of Section 11 of the Securities Act of 1933, as a
result of being designated as an "audit committee financial expert." Further,
the designation of a person as an "audit committee financial expert" does not
mean that the person has any greater duties, obligations, or liability than
those imposed on the person without the "audit committee financial expert"
designation. Similarly, the designation of a person as an "audit committee
financial expert" does not affect the duties, obligations, or liability of any
other member of the audit committee or Board of Trustees.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(A) AUDIT FEES
The aggregate fees billed to the registrant for professional services rendered
by the registrant's principal accountant for the audit of the registrant's
annual financial statements or for services that are normally provided by the
accountant in connection with statutory or regulatory filings or engagements
were $188,000 and $171,000 for the fiscal years ended June 30, 2007, and 2006,
respectively.
(B) AUDIT-RELATED FEES
There were no aggregate fees billed for assurance and related services by the
registrant's principal accountant that are reasonably related to the
performance of the audit of the registrant's financial statements and are not
reported under paragraph (a) of this Item for the fiscal years ended June 30,
2007, and 2006, respectively.
(C) TAX FEES
The aggregate fees billed for professional services rendered by the
registrant's principal accountant for tax compliance, tax advice and tax
planning were $30,800 and $28,000 for the fiscal years ended June 30, 2007,
and 2006, respectively. The nature of the services comprising the tax fees
included the review of the registrant's income and excise tax returns and
distribution requirements.
(D) ALL OTHER FEES
There were no other fees during the fiscal years ended June 30, 2007, and 2006
billed to the registrant.
(E)(1) The registrant's audit committee is directly responsible for approving
the services to be provided by the auditors, including approval in advance of
audit and non-audit services at regularly scheduled audit committee meetings.
If non-audit services are required between regularly scheduled audit committee
meetings, approval may be authorized by the chairman of the audit committee
with prompt notification of other audit committee members and ratification at
the next scheduled audit committee meeting, provided the fees for such
services amount to no more than 5 percent of the annual audit fees for the
registrant. Waiver of pre-approval for audit or non-audit services requiring
fees of a de minimis amount is not permitted.
(2) No services included in (b) - (d) above were approved pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(F) Less than 50 percent of the hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most recent
fiscal year were attributed to work performed by persons other than the
principal accountant's full-time, permanent employees.
(G) The aggregate fees billed by the registrant's principal accountant for
non-audit services rendered to the registrant, its investment adviser, and any
entity controlling, controlled by, or under common control with the investment
adviser that provides ongoing services to the registrant were $99,800 and
$91,000 for the fiscal years ended June 30, 2007, and 2006, respectively.
These fees related to audit and tax services rendered to another trust and the
issuance of a report on internal controls for an entity controlled by the
investment adviser.
(H) All non-audit services rendered in (g) above were considered by the
registrant's audit committee in maintaining the principal accountant's
independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable. The complete schedule of investments is included in Item 1 of
this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 11. CONTROLS AND PROCEDURES.
1. The registrant's president and treasurer have determined that the
registrant's disclosure controls and procedures are effective based
on their evaluation of the disclosure controls and procedures as of a
date within 90 days of the filing date of this report.
A significant deficiency was identified in the registrant's internal
control over financial reporting which existed during the reporting
period. Specifically, the auditors noted a deficiency in operation
with respect to the service provider's review of the processing of
foreign currency translation adjustments. An erroneous journal entry
was limited to a specific set of circumstances and did not impact the
net asset value per share of the funds involved. The registrant's
auditors discussed this matter with the registrant's audit committee
and fund management. The service provider has taken actions as it
deemed necessary to address this issue, including instituting
additional verification controls.
2. There was no change in the registrant's internal control over
financial reporting that occurred in the registrant's second fiscal
quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of ethics is posted on registrant's Internet website at
www.usfunds.com.
(a)(2) Certifications of principal executive officer and principal financial
officer pursuant to Rule 30a-2(a) under the Investment Company Act of
1940 (17CFR 270.30a-2(a)), and Section 302 of the Sarbanes-Oxley Act
of 2002.
(b) Certifications of principal executive officer and principal financial
officer pursuant to Rule 30a-2(b) under the Investment Company Act of
1940 (17CFR 270.30a-2(b)) and Section 906 of the Sarbanes-Oxley Act
of 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
U.S. GLOBAL INVESTORS FUNDS
By: /s/ Frank E. Holmes
----------------------------------
Frank E. Holmes
President, Chief Executive Officer
Date: January 31, 2008
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Frank E. Holmes
----------------------------------
Frank E. Holmes
President, Chief Executive Officer
Date: January 31, 2008
By: /s/ Catherine A. Rademacher
----------------------------------
Catherine A. Rademacher
Treasurer
Date: January 31, 2008