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December 31, 2012

Permanent Portfolio

OBJECTIVE & STRATEGY


Permanent Portfolio seeks to preserve and increase the purchasing power value of its shares over the long-term. The Portfolio does not attempt to anticipate short-term market activity or predict future economic events, but rather it tries to limit downside risk while providing for profit potential in any environment. The Portfolio seeks to achieve its objective by investing in a diversified mix of non-correlated asset classes, chosen for their long term potential to preserve purchasing power, pursue high profit potential, achieve low volatility and provide international diversification.

INVESTMENT CATEGORIES
Allocation by Asset Class 20% Gold

PORTFOLIO CHARACTERISTICS
Maximum Sales Charge 1 Inception Date 5% Silver 10% Swiss Franc Assets Net Assets (M) Symbol CUSIP Current NAV per Share 15% U.S. Foreign Real Estate and Natural Resource Stocks Duration - Swiss Franc Bonds Duration - U.S. Dollar Assets SEC Standardized 30-Day Yield:
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No Load December 1, 1982 16,825.77 PRPFX 714199106 $48.64 5.41 3.76

35% U.S. Treasury Securities and Other Dollar Assets

15% Aggressive Growth Stocks

Unsubsidized (before fee waiver) Subsidized (after fee waiver)

.29% .36% 8.87%

Investment Categories show the Target Percentages for Permanent Portfolio. The Portfolio buys and sells investments as needed to keep its actual holdings in line with the Target Percentages. Permanent Portfolio invests in foreign securities, which will involve greater volatility and political, economic and currency risks and differences in accounting methods. The Portfolio will be affected by changes in the prices of gold, silver, aggressive growth stocks and stocks of U.S. and foreign real estate and natural resource companies. Permanent Portfolios investment objectives, risks, charges and expenses must be considered carefully before investing. The Prospectus contains this and other important information. It may be obtained by calling (800) 531-5142 or visiting www.permanentportfoliofunds.com. Read it carefully before investing. While Permanent Portfolio is no load, there are management fees and operating expenses that do apply. Such fees and expenses are described in the Funds Prospectus.
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Portfolio Turnover 3 Expense Ratio: 3 Gross (before fee waiver) Net (after fee waiver) Alpha Beta 5 Standard Deviation 6 Minimum Initial Purchase Minimum Subsequent Purchase
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.76% .71% 6.72 .47 10.21 $1,000 $100

SEC standardized yield is based on a thirty-day (or one month) period and is computed by dividing the net investment income (i.e. dividends and interest earned during the period less expenses accrued for the period, net of reimbursements) per share earned during the period by the net asset value per share on the last day of the period, using the average number of shares outstanding during the period, deducting all fees and expenses except the $35 one-time account start-up fee and then annualizing the result. Net and Subsidized Yields reflect voluntary fee waivers. Portfolio Turnover, Gross Expense Ratio (before fee waiver) and Net Expense Ratio (after fee waiver) are for the year ended January 31, 2012, as stated in our most recent Prospectus, dated May 30, 2012. Net Expense Ratio reflects a contractual waiver of investment advisory fees in effect for the year then ended. The Portfolios investment adviser has agreed to continue the waiver at least through June 1, 2013.
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Alpha is the mean of the excess return of the manager over beta times benchmark. Alpha is a measure of risk (beta)-adjusted return.

Beta is a measure of systematic risk or the sensitivity of a manager to movements in the benchmark. A beta of 1 implies you can expect the movement of a managers return series to match that of the benchmark used to measure beta.
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Standard Deviation measures the average deviations of a return series from its mean and is often used as a measure of risk. A large deviation implies there have been large swings in the return series of the manager.
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Benchmark: Standard & Poors 500 Composite Stock Index, January 2003 through December 2012.

Pacific Heights Asset Management, LLC (Adviser) became the Portfolios investment adviser on May 1, 2003. Prior to that, an investment adviser unrelated to the Adviser managed Permanent Portfolio.

Not FDIC Insured

Not Bank-Guaranteed

Not Government-Guaranteed

May Lose Value

December 31, 2012

Permanent Portfolio

LIPPER RANKINGS (for the periods ended December 31, 2012)


Category: Lipper Flexible Portfolio Funds Annualized Total Returns 1 Year 3 Years 5 Years 10 Years Rank 132/193 28/112 5/87 2/39 Percentile 69% 25% 6% 5% Lipper Analytical Services, Inc. is an independent mutual fund research and rating service. Each Lipper average represents a universe of Funds with similar investment objectives. Rankings for the periods shown are based on Fund total returns with dividends and distributions reinvested and do not reflect sales charges. Lipper ratings are not intended to predict future results and Lipper does not guarantee the accuracy of this information. Lipper 2012. Reuters. All Rights Reserved. Past performance is no guarantee of future results.

AVERAGE ANNUAL TOTAL RETURNS (for the periods ended December 31, 2012)
Year-To-Date Return Before Taxes Return After Taxes on Distributions Return After Taxes on Distributions and Sale of Portfolio Shares Citigroup 3-Month U.S. Treasury Bill Index Standard & Poors 500 Composite Stock Index 6.91% 6.70% 4.76% .07% 16.00% 1 Year 6.91% 6.70% 4.76% .07% 16.00% 3 Years 9.22% 9.00% 7.90% .09% 10.87% 5 Years 7.29% 7.05% 6.22% .45% 1.66% 10 Years 10.20% 9.93% 8.99% 1.69% 7.10% Since Inception December 1, 1982 6.80% 6.27% 5.89% 4.43% 10.84%

Performance data quoted represents past performance. Past performance (before and after taxes) is not a guarantee of how the Portfolio will perform in the future. Investment returns and principal values of an investment will fluctuate so that an investors shares, when redeemed, may be worth more or less than their original cost. Investment performance, current to the most recent month-end, may be lower or higher than the performance quoted. It may be obtained by calling (800) 531-5142 or visiting www.permanentportfoliofunds.com.

GROWTH OF $10,000 INVESTMENT (December 31, 2002 through December 31, 2012)
$30,000 Standard & Poors 500 Composite Stock Index $19,858 $20,000 Permanent Portfolio $26,419

$10,000 Citigroup 3-Month U.S. Treasury Bill Index $11,824 $0 02 03 04 05 06 07 08 09 10 11 12

The chart above illustrates the performance of $10,000 invested in Permanent Portfolio shares ten years ago compared to performance of Citigroup 3-Month U.S. Treasury Bill Index and Standard & Poors 500 Composite Stock Index over the same period and does not reflect the deduction of taxes an investor would pay on Portfolio distributions or on the redemption of Portfolio shares. Returns for Permanent Portfolio reflect reinvestment $40000.00 of all dividends and distributions and deduction of all fees and expenses, except the $35 one-time account start-up fee. If such start-up fee was reflected, returns would be less than shown. $30000.00 Permanent Portfolios returns reflect voluntary fee waivers in effect. In the absence of such fee waivers, total returns would be reduced. Citigroup 3-Month U.S. Treasury Bill Index tracks the performance of U.S. Treasury Bills with a remaining maturity of three months. Standard & Poors 500 Composite Stock Index is a market-capitalization weighted index of common stocks and represents an unmanaged portfolio of common stocks. Returns shown for these indices reflect reinvested interest and dividends as applicable, but do not reflect a deduction for fees, expenses or taxes. You cannot invest directly in an index. After-tax $20000.00 returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. In particular, after-tax returns are not relevant to investors who hold their shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. $10000.00

December 31, 2012

Permanent Portfolio

TOP 15 EQUITY HOLDINGS BY SECTOR


(as a % of net assets) Natural Resources BHP Billiton, Ltd. Rio Tinto p.l.c. Freeport-McMoRan Copper & Gold, Inc. Exxon Mobil Corporation Apache Corporation Real Estate Prologis AvalonBay Communities, Inc. Vornado Realty Trust Weyerhaeuser Company Boston Properties, Inc. Growth Stocks HollyFrontier Corporation Energy Services & Processing FedEx Corporation Transportation Wynn Resorts, Ltd. Entertainment & Leisure State Street Corporation Financial Services Williams-Sonoma, Inc. Retail .97% .82% .80% .70% .65% .76% .73% .71% .66% .63% 1.17% .97% .87% .77% .70%

TOP 10 HOLDINGS
Gold Coins Cash and Cash Equivalents Gold Bullion Swiss Franc Bank Account Silver Bullion BHP Billiton, Ltd. U.S. Treasury Notes 7.250% 5-15-16 U.S. Treasury Bonds 6.000% 2-15-26 U.S. Treasury Bonds 6.250% 8-15-23 U.S. Treasury Bonds 3.625% 8-15-19 13.83% 7.45% 7.58% 5.55% 4.87% 1.17% 1.09% 1.07% 1.07% 1.04%

FOR MORE INFORMATION


Financial Advisers Institutional Sales Office: (866) 792-6547 Individual Investors Shareholder Services Office: (800) 531-5142 Transfer Agent: (800) 341-8900

FUND
Permanent Portfolio Family of Funds, Inc. 600 Montgomery Street, Suite 4100 San Francisco, California 94111-2702 Telephone: (415) 398-8000 www.permanentportfoliofunds.com

INVESTMENT ADVISER
Pacific Heights Asset Management, LLC Michael J. Cuggino, President & Portfolio Manager 600 Montgomery Street, Suite 4100 San Francisco, California 94111-2702 Telephone: (415) 398-8000

The Portfolios holdings are subject to change at any time and are not recommendations to buy or sell any security.

REASONS TO CONSIDER PERMANENT PORTFOLIO


Purchasing Power and Growth. Designed as a core portfolio holding, Permanent Portfolio seeks to preserve and increase the purchasing power of each shareholders account over the long term, regardless of current or future market conditions, through strategic investments in a broad array of different asset classes. Discipline. Since markets and economic circumstances are constantly changing, the percentage of Permanent Portfolios assets actually held in each investment category may drift from time to time from their respective Target Percentages. The Portfolios Adviser continually monitors the Portfolios investments for such conditions, adjusting whenever necessary to maintain the Portfolios Target Percentages. As a result of these strategic adjustments, the Portfolio may gain or lose from large, short-term fluctuations in investment prices taking profits on investments that have risen in price or losses on investments that have fallen in price and may add to its holdings of investments that have fallen in value. Such strategic portfolio adjustments are necessary to provide the Portfolio with the ability to meet its investment objectives. Tax Planning. Permanent Portfolio is managed to reduce the tax burden on you, the investor. The Portfolio thus structures its investments with the overall goal of reducing taxes on its interest, dividends and capital gains, as well as plans its investment purchases and sales, whenever practical, to minimize taxable gains. In addition, the Portfolio reinvests its profits to achieve further gains and makes only the minimum taxable distributions required for it to qualify for the favorable tax treatment available to investment companies. All income and profits that are not distributed to you are added to the redemption value of your shares. Due to its investment philosophy, asset composition and tax-planning strategies, the Portfolios Adviser believes the Portfolio is an appropriate choice for both taxable and tax-deferred investment accounts, such as those in IRA, pension or other self-directed retirement plans.

December 31, 2012

Permanent Portfolio

ANNUAL RETURNS SINCE INCEPTION


Return Before Taxes

Change in Net Asset Value Capital Gain Distributions (Long-Term) $0.00 $0.00 $0.00 $0.00 $0.00 $0.12 $0.02 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.09 $0.36 $0.64 $0.77 $0.52 $0.17 $0.26 $0.08 $0.39 $0.05 $0.25 $0.18 $0.02 $0.00 $0.03 $0.30 $0.36 Ordinary Income Dividends $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.48 $0.91 $0.29 $0.24 $0.22 $0.38 $0.42 $0.34 $0.20 $0.29 $0.16 $0.27 $0.19 $0.22 $0.15 $0.20 $0.06 $0.16 $0.27 $0.28 $0.29 $0.42 $0.27

June 30, 2012 Return After Taxes Return After Taxes on on Distributions Distributions and Sale of Portfolio Shares .54% 5.32% -13.10% 11.98% 13.42% 12.59% 1.06% 6.20% -4.86% 6.05% 1.86% 14.81% -3.45% 14.49% .58% 4.46% 2.29% -.38% 4.87% 2.99% 13.61% 19.99% 11.62% 7.35% 13.66% 12.20% -8.62% 18.81% 19.13% 1.86% 6.70% .27% 2.66% -10.48% 9.59% 10.73% 7.96% .79% 4.47% -2.89% 5.49% 1.70% 9.33% -1.78% 9.30% 1.02% 3.75% 2.71% 1.45% 4.08% 2.47% 9.04% 13.35% 8.18% 5.00% 9.20% 8.21% -5.40% 12.43% 12.67% 1.67% 4.76%

1-Dec-82 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

.54% 5.32% -13.09% 11.98% 13.42% 12.94% 1.10% 6.20% -4.01% 8.01% 2.46% 15.45% -2.93% 15.40% 1.60% 5.58% 3.39% 1.10% 5.83% 3.76% 14.31% 20.44% 12.04% 7.62% 13.82% 12.43% -8.36% 19.08% 19.31% 2.13% 6.91%

$0.06 $0.62 -$1.54 $1.26 $1.58 $1.61 $0.17 $0.95 -$1.10 $0.26 $0.09 $2.11 -$0.72 $2.18 -$0.20 $0.34 -$0.19 -$0.87 $0.35 $0.25 $2.18 $3.90 $2.41 $1.80 $3.66 $3.68 -$3.33 $5.96 $7.14 $0.28 $2.55

Performance data quoted represents past performance. Past performance (before and after taxes) is not a guarantee of how the Portfolio will perform in the future. Investment returns and principal values of an investment will fluctuate so that an investors shares, when redeemed, may be worth more or less than their original cost. Permanent Portfolios returns reflect voluntary fee waivers in effect. In the absence of such fee waivers, total returns would be reduced. After-tax returns are calculated using the historical highest individual federal margin income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investors tax situation and may differ from those shown. In particular, after-tax returns are not relevant to investors who hold their shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. Mutual fund investing involves risk; loss of principal is possible. The Fund is distributed by Quasar Distributors, LLC, a member of FINRA.

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