<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 30, 1996
File No. 333-00641
File No. 811-07527
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 /X/
POST-EFFECTIVE AMENDMENT NO. 2
------------------------------
and
REGISTRATION STATEMENT UNDER
INVESTMENT COMPANY ACT OF 1940 /X/
AMENDMENT NO. 3
---------------
TURNER FUNDS
(Exact Name of Registrant as Specified in Charter)
c/o The CT Corporation System
2 Oliver Street
Boston, Massachusetts 02109
(Address of Principal Executive Offices, Zip Code)
Registrant's Telephone Number, including Area Code (610) 251-0268
(Name and Address of Agent for Service)
STEPHEN KNEELEY
TURNER INVESTMENT PARTNERS, INC.
1235 WESTLAKES DR., SUITE 350
BERWYN, PENNSYLVANIA 19312-2414
Copies to:
JAMES W. JENNINGS, ESQUIRE JOHN H. GRADY, JR., ESQUIRE
MORGAN, LEWIS & BOCKIUS LLP MORGAN, LEWIS & BOCKIUS LLP
2000 ONE LOGAN SQUARE 1800 M STREET, NW
WASHINGTON, DC 20036 PHILADELPHIA, PENNSYLVANIA 19103
- --------------------------------------------------------------------------------
It is proposed that this filing will become effective (check appropriate box)
x immediately upon filing pursuant to paragraph (b)
-----
on [date] pursuant to paragraph (b)
-----
60 days after filing pursuant to paragraph (a)
-----
on [date] pursuant to paragraph (a)(1) of Rule 485
-----
75 days after filing pursuant to paragraph (a)(2)
-----
Pursuant to the provisions of Rule 24f-2 under the Investment Act of 1940, an
indefinite number of units of beneficial interest is being registered by this
Registration Statement.
- --------------------------------------------------------------------------------
The Prospectus and Statement of Additional Information for the Turner Growth
Equity Fund, Turner Fixed Income Fund and Turner Small Cap Fund included as part
of Pre-Effective Amendment No. 1 to the Registrant's Registration Statement on
Form N-1A (File No. 33-80514) filed with the Securities and Exchange Commission
on April 30, 1996 are hereby incorporated by reference as if set forth in full
herein.
<PAGE>
TURNER FUNDS
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
PART A -
Item 1. Cover Page Cover Page
Item 2. Synopsis Summary; Expense Summary
Item 3. Condensed Financial Information Financial Highlights
Item 4. General Description of Registrant The Trust and the Funds; Investment Objectives;
Investment Policies; Risk Factors; Investment Limita
tions; General Information - The Trust
Item 5. Management of the Fund General Information-Trustees of the Trust; The
Adviser; The Administrator; The Transfer Agent; The
Distributor; Portfolio Transactions; Expense Summary
Item 5A. Management's Discussion of Fund *
Performance
Item 6. Capital Stock and Other Securities General Information-Voting Rights; General Infor-
mation-Shareholder Inquiries; General Information-
Dividends and Distributions; Taxes
Item 7. Purchase of Securities Being Offered Purchase and Redemption of Shares
Item 8. Redemption or Repurchase Purchase and Redemption of Shares
Item 9. Pending Legal Proceedings *
PART B -
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History The Trust
Item 13. Investment Objectives and Policies Investment Objectives (Prospectus); Investment Poli-
cies (Prospectus); Investment Limitations
Item 14. Management of the Registrant General Information - Trustees of the Trust (Prospec-
tus); Trustees and Officers of the Trust; The Admin-
istrator
Item 15. Control Persons and Principal Trustees and Officers of the Trust;
Holders of Securities 5% Shareholders
Item 16. Investment Advisory and Other The Adviser (Prospectus and Statement of Additional
Services Information); The Administrator (Prospectus and
Statement of Additional Information); The
Distributor (Prospectus and Statement of Additional
Information); The Transfer Agent (Prospectus);
General Information - Counsel and Independent Public
Accountants (Prospectus); Experts; General
Information - Custodian (Prospectus)
Item 17. Brokerage Allocation Portfolio Transactions (Prospectus); Portfolio Trans-
actions
Item 18. Capital Stock and Other Securities Description of Shares
Item 19. Purchase, Redemption, and Pricing Purchase and Redemption of Shares
of Securities Being Offered (Prospectus); Purchase and Redemption of Shares;
Determination of Net Asset Value;
Item 20. Tax Status Taxes (Prospectus); Taxes
Item 21. Underwriters The Distributor
Item 22. Calculation of Computation of Yield and
Performance Data Total Return
Item 23. Financial Statements Financial Information
</TABLE>
<PAGE>
Part C -
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
* Not Applicable
ii
<PAGE>
THE TURNER FUNDS
Supplement Dated October 30, 1996
to the Prospectus Dated April 30, 1996.
This supplement provides new and additional information beyond that contained in
the Prospectus, and should be retained and read in conjunction with such
Prospectus.
The following information replaces the Expense Summary and Financial Highlights
on pages 5-8 of the Prospectus:
EXPENSE SUMMARY
SHAREHOLDER TRANSACTION EXPENSES
- --------------------------------
Sales Load Imposed on Purchases............................... None
Sales Load Imposed on Reinvested Dividends.................... None
Deferred Sales Load........................................... None
Redemption Fees/(1)/.......................................... None
Exchange Fees................................................. None
(1) A wire redemption charge, currently $10.00, is deducted from the amount of
a Federal Reserve wire redemption payment made at the request of a
shareholder.
<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
- ------------------------------------------------------------------------------
Growth Equity Small Cap Fixed Income
Fund Fund Fund
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Advisory Fees (after fee waivers,
if any)/(1)/ .75% .93% .05%
12b-1 Fees None None None
Other Expenses .25%/(2)/ .32%/(2)/ .70%/(3)/
- ------------------------------------------------------------------------------
Total Operating Expenses (after
fee waivers) 1.00%/(2)/ 1.25%/(2)/ .75%
- ------------------------------------------------------------------------------
</TABLE>
(1) The Adviser has agreed, on a voluntary basis, to waive its advisory fee
and/or reimburse expenses for the Growth Equity, Small Cap and Fixed Income
Funds to the extent necessary to keep the "Total Operating Expenses" of the
Funds during the current fiscal year from exceeding 1.00%, 1.25% and .75%,
respectively. The Adviser reserves the right to terminate its waivers
and/or reimbursements at any time in its sole discretion. Absent such
waivers, Advisory Fees for the Small Cap Fund and Fixed Income Fund would
be 1.00% and .50%, respectively, and Total Operating Expenses for the
Growth Equity, Small Cap and Fixed Income Funds would be 1.02%, 1.70% and
1.20%, respectively.
(2) "Other Expenses" do not reflect the Adviser's use of arrangements whereby
certain broker-dealers have agreed to pay certain expenses of the Growth
Equity and Small Cap Funds in return for the direction of a percentage of
the Funds' brokerage transactions. As a result of these arrangements, the
amount of "Other Expenses" and "Total Operating Expenses" deducted from the
Growth Equity Fund's assets are anticipated to be .18% and .93%,
respectively, and the amount of "Other Expenses" and "Total Operating
Expenses" deducted from the Small Cap Fund's assets are anticipated to be
.29% and 1.25%, respectively.
(3) "Other Expenses" for the Fixed Income Fund are estimated for the current
fiscal year.
<PAGE>
<TABLE>
<CAPTION>
EXAMPLE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
You would pay the following expenses on a 1 year 3 years 5 years 10 years
$1,000 investment in a Fund assuming (1) a ------ ------- ------- --------
5% annual return and (2) redemption at the
end of each time period.
Growth Equity Fund $10 $30 $52 $115
Small Cap Fund $13 $40 $69 $151
Fixed Income Fund $ 8 $24 -- --
-------------------------------------------------------------------------------
</TABLE>
The example is based upon total operating expenses of each Fund after waivers
and reimbursements as shown in the expense table. The example should not be
considered a representation of past or future expenses. Actual expenses may be
greater or less than those shown. The purpose of the expense table and example
is to assist the investor in understanding the various costs and expenses that
may be directly or indirectly borne by shareholders of the Funds. Additional
information may be found under "The Adviser" and "The Administrator."
<PAGE>
FINANCIAL HIGHLIGHTS
The following information concerning the Growth Equity Fund relates both to the
Fund's most recent five-month period, and to a period of time when the assets of
the Growth Equity Fund were maintained by the Turner Growth Equity Portfolio of
The Advisors' Inner Circle Fund. The information below and the financial
statements of the Turner Growth Equity Portfolio of The Advisors' Inner Circle
Fund for the fiscal years ending October 31, 1992 to October 31, 1995, were
audited by Arthur Andersen LLP, whose report dated December 5, 1995, is included
in the Statement of Additional Information. Unaudited financial information has
been provided for the Turner Growth Equity Portfolio of The Advisors' Inner
Circle Fund for the period from November 1, 1995 to April 30, 1996. The Growth
Equity Fund acquired all of the assets and liabilities of the Turner Growth
Equity Portfolio of The Advisors' Inner Circle Fund on April 30, 1996.
Unaudited financial information has been provided for the Turner Growth Equity
Fund for the period from May 1, 1996 to September 30, 1996. All references
herein to the Growth Equity Fund shall be deemed to include the Turner Growth
Equity Portfolio.
For a Share Outstanding Throughout the Period:
<TABLE>
<CAPTION>
Growth Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
5/1/96/(3)/ 11/1/95
to to 11/01/94 11/01/93 11/01/92 03/11/92/(1)/
9/30/96 4/30/96 to to to to
(unaudited) (unaudited) 10/31/95 10/31/94 10/31/93 10/31/92
- ------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period......... $15.82 $14.97 $12.46 $13.12 $10.40 $10.00
- ------------------------------------------------------------------------------------------------------------------------------
Income From Investment Operations:
Net Investment Income................... -- 0.02 0.10 0.10 0.09 0.03
Net Realized and Unrealized
Gain (Loss) on Investments.......... 1.21 1.69 2.52 (0.66) 2.72 0.40
- ------------------------------------------------------------------------------------------------------------------------------
Total From Investment Operations............. 1.21 1.71 2.62 (0.56) 2.81 0.43
- ------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends From Net Investment Income......... -- (0.02) (0.11) (0.10) (0.09) (0.03)
Distributions from Capital Gains............. -- (0.84)
- ------------------------------------------------------------------------------------------------------------------------------
Total Distributions............ -- (0.86) (0.11) (0.10) (0.09) (0.03)
- ------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period............... $17.03 $15.82 $14.97 $12.46 $13.12 $10.40
- ------------------------------------------------------------------------------------------------------------------------------
Total Return................................. 7.65% 12.04% 21.15% (4.28)% 27.08% 6.95%*
- ------------------------------------------------------------------------------------------------------------------------------
Ratios and Supplemental Data
Net Assets, End Of Period (000).............. $96,164 $93,309 $115,819 $112,959 $53,327 $7,781
Ratios Of Expenses To Average Net Assets..... 1.04%/(2)/* 1.08%/(2)/* 1.03% 0.95% 1.00% 1.44%*
Ratio Of Expenses To Average Net Assets
Excluding Fee Waivers.................... 1.04%/(2)/* 1.08%/(2)/* 1.03% 1.08% 1.52% 2.55%*
Ratio Of Net Investment Income Loss to
Average Net Assets....................... (0.17)%/(2)/* 0.17%/(2)/* 0.69% 0.86% 0.80% 0.73%*
Ratio Of Net Investment Income Loss to
Average Net Assets Excluding Fee Waivers. (0.17)%/(2)/* 0.17%/(2)/* 0.69% 0.73% 0.28% (0.38)%*
Portfolio Turnover Rate...................... 61.59% 85.78% 177.86% 164.81% 88.35% 205.00%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized
<PAGE>
(1) The Turner Growth Equity Portfolio commenced operations on March 11, 1992.
(2) The Ratios of Expenses to Average Net Assets (with and without waivers) and
Net Income to Average Net Assets (with and without waivers) do not reflect
the Advisor's use of arrangements whereby certain broker-dealers have
agreed to pay certain expenses of the Turner Growth Equity Fund in return
for the direction of a percentage of the Fund's brokerage transactions. As
a result of these arrangements, the Ratios of Expenses to Average Net
Assets (with and without waivers) and Net Income to Average Net Assets
(with and without waivers) were 0.97% and 0.28%, and 0.91% and (0.04)% for
the periods ended 4/30/96 and 9/30/96, respectively.
(3) On April 30, 1996 the Growth Equity Fund acquired all of the assets and
liabilities of the Turner Growth Equity Portfolio of The Advisors' Inner
Circle Fund.
<PAGE>
FINANCIAL HIGHLIGHTS
The following information concerning the Small Cap Fund relates both to the
Fund's most recent five-month period, and to a period of time when the assets of
the Small Cap Fund were maintained by the Turner Small Cap Portfolio of The
Advisors' Inner Circle Fund. The information below and the financial statements
of the Turner Small Cap Portfolio of The Advisors' Inner Circle Fund for the
fiscal periods ending October 31, 1994 and October 31, 1995, were audited by
Arthur Andersen LLP, whose report dated December 5, 1995, is included in the
Statement of Additional Information. Unaudited financial information has been
provided for the Turner Small Cap Portfolio of The Advisors' Inner Circle Fund
for the period from November 1, 1995 to April 30, 1996. The Small Cap Fund
acquired all of the assets and liabilities of the Turner Small Cap Portfolio on
April 30, 1996. Unaudited financial information has been provided for the Turner
Small Cap Fund for the period from May 1, 1996 to September 30, 1996. All
references herein to the Small Cap Fund shall be deemed to include the Turner
Small Cap Portfolio.
<TABLE>
<CAPTION>
For a Share Outstanding Throughout the Period:
Small Cap Fund
- -------------------------------------------------------------------------------------------------------
5/1/96/(2)/ 11/1/95
to to 11/01/94 02/07/94/(2)/
9/30/96 4/30/96 to to
(unaudited) (unaudited) 10/31/95 10/31/94
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period......... $21.90 $16.08 $10.90 $10.00
- -------------------------------------------------------------------------------------------------------
Income From Investment Operations:
Net Investment Income (Loss).............. (0.03) (0.05) (0.06) (0.02)
Net Realized and Unrealized
Gain (Loss) on Investments................ 1.26 6.91 5.24 0.92
- -------------------------------------------------------------------------------------------------------
Total From Investment Operations............. $ 1.23 $ 6.86 $5.18 .90
- -------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends From Net Investment Income......... -- -- -- --
Distributions from Capital Gains............. -- (1.04) -- --
- -------------------------------------------------------------------------------------------------------
Total Distributions..................... -- (1.04) -- --
- -------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period............... $23.13 $21.90 $16.08 $10.90
- -------------------------------------------------------------------------------------------------------
Total Return................................. 5.62% 44.77% 47.52% 12.35%*
- -------------------------------------------------------------------------------------------------------
Ratios and Supplemental Data
Net Assets, End Of Period (000).............. $67,425 $28,792 $13,072 $4,806
Ratios Of Expenses To Average Net Assets..... 1.25%* 1.25%* 1.25% 1.09%*
Ratio Of Expenses To Average Net Assets
Excluding Fee Waivers....................... 1.45%* 1.79%* 2.39% 4.32%*
Ratio Of Net Investment Loss To Average
Net Assets.................................. (0.88)%* (0.85)%* (0.68)% (0.27)%*
Ratio Of Net Investment Loss To
Average Net Assets Excluding Fee Waivers.... (1.08)%* (1.39)%* (1.82)% (3.50)%*
Portfolio Turnover Rate...................... 58.15% 112.10% 183.49% 173.92%
=======================================================================================================
</TABLE>
<PAGE>
* Annualized
(1) The Turner Small Cap Portfolio commenced operations on February 7, 1994.
(2) On April 30, 1996 the Small Cap Fund acquired all of the assets and
liabilities of the Turner Small Cap Portfolio of The Advisors' Inner
Circle Fund.
---------------------
The first sentence of the second paragraph under "Purchase and Redemption of
Shares" is replaced with the following disclosure:
The minimum initial investment in any Fund is $10,000, and subsequent
purchases must be at least $1,000.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
THE TURNER FUNDS
(the "Trust")
Supplement dated October 30, 1996 to the
Statement of Additional Information
This supplement provides new and additional information beyond that contained in
the Statement of Additional Information, and should be retained and read in
conjunction with such Statement of Additional Information.
The Statement of Additional Information for the Trust is hereby amended and
supplemented by the following unaudited financial statements for the Growth
Equity Fund and the Small Cap Fund for the periods November 1, 1995 to April 30,
1996, and May 1, 1996 to September 30, 1996, along with the accompanying notes
to the financial statements.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
Statement of Net Assets Turner Funds
September 30, 1996
<TABLE>
<CAPTION>
Market
Value
GROWTH EQUITYFUND Shares (000)
- ---------------------------------------------------------
<S> <C> <C>
Common Stocks (100.4%)
Agriculture (1.3%)
Dole Food 29,980 $ 1,259
-------
Aircraft (1.2%)
Boeing 12,310 1,163
-------
Apparel/Textiles (1.4%)
Designer Holdings Limited* 30,000 784
Tommy Hilfiger* 8,790 521
-------
1,305
-------
Automotive (0.9%)
Harley-Davidson 21,100 907
-------
Banks (0.7%)
NationsBank 7,800 678
-------
Beauty Products (3.3%)
Alberto-Culver, Cl B 12,550 544
Colgate-Palmolive 11,050 960
Procter & Gamble 17,190 1,676
-------
3,180
-------
Broadcasting, Newspapers &
Advertising (0.8%)
Cox Communications* 42,350 778
-------
Chemicals (1.8%)
E.I. duPont de Nemours 10,740 948
Monsanto 20,520 749
-------
1,697
-------
Communications Equipment (5.2%)
ADC Telecommunications* 11,420 731
Andrew* 15,645 780
Ascend Communications* 10,580 700
Cascade Communications* 16,024 1,306
Pairgain Technologies* 7,770 607
Picturetel* 12,930 456
Ultratech Stepper* 24,390 460
-------
5,040
-------
Computers & Services (2.8%)
Compaq Computer* 12,300 789
HBO & Company 14,460 965
IBM 7,860 979
-------
2,733
-------
Drugs (9.5%)
American Home Products 26,200 1,670
Amgen* 21,330 1,346
Biogen* 6,490 493
Eli Lilly 22,950 1,480
Genetics Institute* 7,650 532
Merck 23,800 1,675
Pfizer 15,000 1,187
Sigma Aldrich 12,270 699
-------
9,082
-------
Electrical Services (0.8%)
AES 18,840 742
-------
Environmental Services (2.2%)
USA Waste Services* 23,430 738
WMX Technologies 41,900 1,377
-------
2,115
-------
Financial Services (1.4%)
Associates First Capital 20,620 845
Household International 5,550 456
-------
1,301
-------
Food, Beverage & Tobacco (5.1%)
Campbell Soup 10,440 814
Coca-Cola 30,460 1,550
CPC International 12,910 967
Robert Mondavi* 21,840 715
Starbucks 26,290 867
-------
4,913
-------
Gas/Natural Gas (0.9%)
Williams 17,570 896
-------
Hotels & Lodging (1.5%)
HFS* 11,600 776
Hilton Hotels 24,320 690
-------
1,466
-------
Household Products (2.7%)
Clorox 11,710 1,123
General Electric 16,130 1,468
-------
2,591
-------
</TABLE>
<PAGE>
Statement of Net Assets Turner Funds
September 30, 1996
<TABLE>
<CAPTION>
Market
GROWTH EQUITYFUND Value
(Continued) Shares (000)
- ------------------------------------------------------------------
<S> <C> <C>
Insurance (3.5%)
American International Group 8,535 $ 860
Pacificare Health Systems, Cl B* 13,990 1,210
SunAmerica 19,820 684
Total Renal Care Holdings* 16,200 644
-------
3,398
-------
Machinery (1.7%)
Caterpillar 9,430 711
Minnesota Mining &
Manufacturing 13,120 917
-------
1,628
-------
Medical Products & Services (5.5%)
Guidant 22,850 1,262
Health Management Associates,
Class A* 19,840 493
Healthsouth Rehabilitation* 33,140 1,272
Medtronic 10,710 687
Phycor* 22,750 866
Renal Treatment Centers* 20,570 684
-------
5,264
-------
Miscellaneous Business Services (13.0%)
Altera* 15,500 785
BMC Software* 12,750 1,014
Cisco Systems* 27,000 1,676
Computer Associates 13,650 816
CUC International* 19,000 758
Electronic Arts* 18,160 679
First Data 8,510 695
Fore Systems* 19,520 808
Microsoft 7,260 957
Oracle Systems 29,470 1,254
Parametric Technology* 16,120 796
Peoplesoft* 8,860 738
Sun Microsystems 14,340 891
Xylan 12,190 661
-------
12,528
-------
Miscellaneous Consumer Services (1.6%)
Accustaff 13,820 358
Service International 39,600 1,198
-------
1,556
-------
Miscellaneous Manufacturing (1.2%)
International Game Technology 21,200 435
Rmi Titanium* 27,200 687
-------
1,122
-------
Paper & Paper Products (0.8%)
Kimberly-Clark 8,670 764
-------
Petroleum & Fuel Products (1.7%)
Flores & Rucks* 11,900 460
Houston Exploration* 27,580 462
Louisiana Land & Exploration 13,480 709
-------
1,631
-------
Photographic Equipment &
Supplies (0.7%)
Xerox 12,340 662
-------
Printing & Publishing (0.7%)
Gannett 9,470 666
-------
Professional Services (1.9%)
Gartner Group* 26,330 895
Paychex 16,500 957
-------
1,852
-------
Retail (8.3%)
American Stores 19,650 786
Borders Group 14,650 546
Boston Market* 27,000 952
Corporate Express* 10,990 427
McDonald's 19,800 938
PepsiCo 30,280 855
PetSmart* 28,120 728
Saks Holdings* 22,300 780
Staples 24,060 534
Walgreen 26,140 967
Williams Sonoma* 15,480 439
-------
7,952
-------
Rubber & Plastic (1.1%)
Nike, Cl B 9,000 1,093
-------
</TABLE>
<PAGE>
Statement of Net Assets Turner Funds
September 30, 1996
<TABLE>
<CAPTION>
Shares/Face Market
GROWTH EQUITYFUND Amount Value
(Concluded) (000) (000)
- ------------------------------------------------------------------
<S> <C> <C>
Semi-Conductors/Instruments (3.6%)
Intel 11,100 $ 1,059
Microchip Technology* 12,250 458
National Semiconductor* 24,170 486
Texas Instruments 14,350 791
Xilinx 18,060 614
-------
3,408
-------
Steel & Steel Works (0.8%)
Engelhard 32,900 757
-------
Telephones & Telecommunication (4.9%)
Airtouch Communications 22,880 632
Cincinnati Bell 11,790 625
LCI International 25,570 805
Lucent Technologies 25,760 1,182
Teleport Communications Group* 27,350 646
WorldCom 37,650 805
-------
4,695
-------
Wholesale (5.9%)
Gillette 22,310 1,609
Johnson & Johnson 28,170 1,444
Philip Morris 13,360 1,199
Safeway 33,380 1,423
-------
5,675
-------
Total Common Stocks
(Cost $79,917) 96,497
-------
Repurchase Agreement (0.7%)
Lehman Brothers
5.33%, dated 09/30/96, matures
10/01/96, repurchase price
$694,523 (collateralized by
U.S. Treasury Note, par value
$716,859, 6%, matures 09/30/98:
market value $715,740) $694 694
-------
Total Repurchase Agreement
(Cost $694) 694
-------
Total Investments (101.1%)
(Cost $80,611) 97,191
-------
Other Assets and Liabilities, Net (-1.1%) (1,027)
-------
Net Assets:
Portfolio Shares (unlimited authorization
--no par value) based on 5,646,884
outstanding shares of beneficial
interest 57,709
Accumulated net realized gain
on investments 21,875
Net unrealized appreciation
on investments 16,580
-------
Total Net Assets (100.0%) $96,164
=======
Net Asset Value, Offering and Redemption
Price Per Share $17.03
=======
</TABLE>
* Non-income producing security
Cl-Class
The accompanying notes are an integral part of the financial statements.
<PAGE>
Statement of Net Assets Turner Funds
September 30, 1996
<TABLE>
<CAPTION>
Market
Value
SMALL CAP FUND Shares (000)
- ----------------------------------------------------------------------
<S> <C> <C>
Common Stocks (97.5%)
Air Transportation (0.6%)
Midwest Express* 14,602 $ 436
------
Apparel/Textiles (1.6%)
Nautica Enterprises* 19,186 619
Tommy Hilfiger* 7,835 464
------
1,083
------
Banks (2.3%)
Astoria Financial* 18,270 530
Bank United Corporation, Cl A* 24,600 612
Washington Federal 16,980 401
------
1,543
------
Beauty Products (0.9%)
Alberto-Culver, Cl B 14,375 624
------
Broadcasting, Newspapers &
Advertising (1.8%)
International Family
Entertainment* 17,591 288
Snyder Communications* 22,410 431
Young Broadcasting, Cl A 14,900 492
------
1,211
------
Chemicals (1.2%)
GTS Duratek 14,300 235
International Specialty Products 24,745 247
W.H. Brady 12,300 309
------
791
------
Communications Equipment (4.3%)
Omnipoint 16,503 481
Pairgain Technologies* 10,112 790
Picturetel* 13,554 478
Stanford Telecommunications 12,600 630
Ultratech Stepper* 28,769 543
------
2,922
------
Computers & Services (2.4%)
HCIA 9,250 555
National Techteam 16,170 439
Verifone 13,542 606
------
1,600
------
</TABLE>
<TABLE>
<CAPTION>
Market
Value
Shares (000)
- ----------------------------------------------------------------------
<S> <C> <C>
Concrete & Mineral Products (0.5%)
Ferro 11,800 $ 319
------
Drugs (2.0%)
Medicis Pharmaceutical, Cl A* 14,350 692
Parexel International 10,165 640
------
1,332
------
Energy & Power (0.7%)
Calenergy* 15,586 497
------
Entertainment (0.7%)
Regal Cinemas* 20,325 508
------
Financial Services (6.8%)
Aames Financial 14,050 708
Amresco 27,150 621
ContiFinancial* 15,167 432
Equitable of Iowa 3,690 153
First USA Paymentech* 16,900 687
Hambrecht and Quist* 14,595 283
Imperial Credit Industries* 18,962 694
National Surgery Centers 16,728 468
The Money Store 20,671 548
------
4,594
------
Food, Beverage & Tobacco (1.5%)
Einstein/Noah Bagel* 13,900 427
Robert Mondavi* 16,966 556
------
983
------
Insurance (5.8%)
American Travelers 2,500 83
CMAC Investment 10,458 664
Compdent* 11,499 434
Executive Risk 13,920 536
Hcc Insurance Holdings 20,370 588
Protective Life 14,100 532
Total Renal Care Holdings* 14,957 595
United Dental Care* 13,135 475
------
3,907
------
Lumber & Wood Products (0.8%)
Champion Enterprises 24,500 554
------
Machinery (0.5%)
Wyman-Gordan* 14,940 342
------
</TABLE>
<PAGE>
Statement of Net Assets Turner Funds
September 30, 1996
<TABLE>
<CAPTION>
Market
SMALL CAP FUND Value
(Continued) Shares (000)
- ----------------------------------------------------------------------
<S> <C> <C>
Manufacturing (0.7%)
West Marine* 14,200 $ 469
------
Measuring Devices (2.0%)
Uniphase 15,600 659
Waters 21,603 708
------
1,367
------
Medical Products & Services (0.9%)
Orthodontic Centers of America* 29,842 608
------
Metals & Mining (0.9%)
Titanium Metals 20,800 603
------
Miscellaneous Business Services (17.4%)
Apac Teleservices 11,022 565
Aspen Technology 8,496 576
Concord EFS* 24,469 630
Data Processing Resources 13,219 291
Forte Software 9,850 387
HNC Software 13,526 541
Lanvision Systems 17,250 216
Medic Computer Systems 13,940 507
National Data 12,944 565
National Processing* 29,980 585
Nova 18,830 621
PMT Services 32,172 651
Rational Software 20,500 700
Sapient 11,400 507
Security Dynamics Technology 8,913 640
Sitel 14,562 648
Sykes Enterprises 6,925 334
Transaction Systems Architects* 10,600 448
Transition Systems* 22,400 470
Vincam Group* 14,400 551
Wind River Systems* 15,430 683
Xylan 12,000 651
------
11,767
------
Miscellaneous Consumer Services (3.3%)
Accustaff 26,200 678
Career Horizons* 13,900 540
Romac International* 19,050 581
Sunrise Assisted Living* 15,100 423
------
2,222
------
</TABLE>
<TABLE>
<CAPTION>
Market
Value
Shares (000)
- ----------------------------------------------------------------------
<S> <C> <C>
Miscellaneous Manufacturing (1.9%)
Buckeye Cellulose 21,942 $ 570
Rmi Titanium* 27,600 697
------
1,267
------
Paper & Paper Products (1.6%)
Fort Howard 23,703 578
NUCO2* 24,404 506
------
1,084
------
Petroleum & Fuel Products (5.0%)
Falcon Drilling* 19,619 510
Flores & Rucks* 16,100 622
Global Industries 24,700 392
Houston Exploration* 36,820 617
Nabors Industries* 25,139 343
Oceaneering International* 24,840 422
Pride Petroleum Service* 32,250 456
------
3,362
------
Petroleum Refining (0.7%)
Polymer Group* 32,340 453
------
Professional Services (3.4%)
ABR Information Services* 8,568 617
Apollo Group, Cl A* 14,723 394
Equity International* 13,850 440
International Network Services* 10,570 381
RTW* 17,117 494
------
2,326
------
Railroads (2.1%)
Coach USA* 17,600 471
Genessee and Wyoming* 16,850 459
Wisconsin Central Transportation* 13,161 472
------
1,402
------
Retail (4.8%)
Abercrombie & Fitch, Cl A* 18,450 424
Borders Group 16,950 631
Gargoyles* 15,000 308
Hot Topic* 11,500 272
Just for Feet* 11,475 575
Vons* 12,850 551
Zale* 20,400 446
------
3,207
------
</TABLE>
<PAGE>
Statement of Net Assets Turner Funds
September 30, 1996
<TABLE>
<CAPTION>
Market
SMALL CAP FUND Value
(Concluded) Shares (000)
- ----------------------------------------------------------------------
<S> <C> <C>
Rubber & Plastic (0.8%)
Sealed Air* 14,593 $ 544
-------
Semi-Conductors/Instruments (3.6%)
BMC Industries* 20,130 576
Computer Products* 26,090 571
Microchip Technology* 14,700 549
Sanmina* 12,700 511
Trident International* 13,500 228
-------
2,435
-------
Specialty Machinery (1.1%)
U.S. Filter* 21,365 729
-------
Technology, General (0.9%)
Tel-Save Holdings* 20,500 589
-------
Telephones & Telecommunication (6.3%)
ACC Corporation 10,645 503
Boston Communications Group* 22,200 361
Brooks Fiber Properties* 16,950 487
Icg Communications* 28,450 597
Intermedia Communications
of Florida* 21,063 616
IXC Communications* 19,500 400
Lcc International* 16,000 298
Mcleod* 16,950 559
Telco Communications Group* 21,900 405
-------
4,226
-------
Testing Laboratories (0.9%)
Quintiles Transnational 8,658 634
-------
Wholesale (4.8%)
Applied Analytical Industries* 13,850 334
Citrix Systems* 14,116 704
Hughes Supply 17,010 629
North Face* 16,000 452
Physician Sales & Services 22,808 536
US Office Products 15,426 553
-------
3,208
-------
Total Common Stocks
(Cost $57,085) 65,748
-------
</TABLE>
<TABLE>
<CAPTION>
Face Market
Amount Value
(000) (000)
- ----------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement (6.4%)
Lehman Brothers
5.33%, dated 09/30/96, matures
10/01/96, repurchase price
$4,279,988 (collateralized by
U.S. Treasury Note, par value
$4,419,201, 6.00%, matures
09/30/98: market value $4,412,274) $ 4,279 $ 4,279
--------
Total Repurchase Agreement
(Cost $4,279) 4,279
--------
Total Investments (103.9%)
(Cost $61,364) 70,027
--------
Other Assets and Liabilities, Net (-3.9%) (2,602)
--------
Net Assets:
Portfolio Shares (unlimited authorization
-- no par value) based on 2,914,724
outstanding shares of beneficial
interest 57,074
Accumulated net realized gain
on investments 1,688
Net unrealized appreciation
on investments 8,663
--------
Total Net Assets (100.0%) $67,425
========
Net Asset Value, Offering and Redemption
Price Per Share $23.13
========
</TABLE>
* Non-income producing security
Cl-Class
The accompanying notes are an integral part of the financial statements.
<PAGE>
Statement of Operations Turner Funds
For the year ended September 30, 1996
<TABLE>
<CAPTION>
Growth Equity Small Cap
Fund Fund
------------ ---------
11/01/95 11/01/95
to 9/30/96 to 9/30/96
(000) (000)
- --------------------------------------------------------------------------------
<S> <C> <C>
Investment Income:
Dividends........................................ 924 21
Interest......................................... 41 84
- --------------------------------------------------------------------------------
Total Investment Income........................ 965 105
- --------------------------------------------------------------------------------
Expenses:
Investment Advisory Fees......................... 667 280
Investment Advisory Fee Waiver................... -- (83)
Administrator Fees............................... 137 69
Custodian Fees................................... 10 21
Transfer Agent Fees.............................. 12 12
Professional Fees................................ 22 16
Trustee Fees..................................... 6 5
Registration Fees................................ 38 17
Pricing Fees..................................... 2 --
Printing Expense................................. 18 8
Amortization of Deferred Organizational Costs.... 3 3
Insurance and Other Fees......................... 27 2
- --------------------------------------------------------------------------------
Total Expenses................................. 942 350
Directed Brokerage............................. (106) --
- --------------------------------------------------------------------------------
Net Expenses................................. 836 350
- --------------------------------------------------------------------------------
Net Investment Income (Loss)............... 129 (245)
- --------------------------------------------------------------------------------
Net Realized Gain From Securities Sold........... 21,978 1,936
Excess of Market Value Over Book Value of
Securities Distributed Upon
Redemption of Shares........................... -- 1,924
- --------------------------------------------------------------------------------
Net Realized Gain on Investments................. 21,978 3,860
Net Unrealized Appreciation (Depreciation) of
Investment Securities........................... (3,868) 5,659
- --------------------------------------------------------------------------------
Net Realized and Unrealized Gain on Investments.. 18,110 9,519
- --------------------------------------------------------------------------------
Net Increase in Net Assets Resulting From
Operations...................................... 18,239 9,274
================================================================================
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
<PAGE>
Statement of Changes in Net Assets Turner Funds
For the year ended September 30, 1996.
<TABLE>
<CAPTION>
Growth Equity Small Cap
Fund Fund
---------------------- ----------------------
11/01/95 11/01/94 11/01/95 11/01/94
to to to to
9/30/96 10/31/95 9/30/96 10/31/95
(000) (000) (000) (000)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Activities:
Net Investment Income
(Loss)................... $ 129 $ 935 $ (245) $ (56)
Net Realized Gain on
Securities Sold.......... 21,978 11,270 1,936 1,005
Excess Market Value Over
Book Value of Securities
Distributed Upon
Redemption of Shares..... -- -- 1,924 --
Net Unrealized Appreciation
(Depreciation) of
Investment Securities..... (3,868) 11,773 5,659 2,573
- --------------------------------------------------------------------------------
Net Increase in Net
Assets Resulting
from Operations.......... 18,239 23,978 9,274 3,522
- --------------------------------------------------------------------------------
Distributions to
Shareholders:
Net Investment Income..... (132) (1,022) -- --
Realized Capital Gain..... (5,807) -- (925) --
- --------------------------------------------------------------------------------
Total Distributions...... (5,939) (1,022) (925) --
- --------------------------------------------------------------------------------
Capital Share Transactions:
Shares Issued............. 14,623 33,135 66,572 5,250
Shares Issued in Lieu of
Cash Distributions....... 5,650 909 904 --
Shares Redeemed........... (52,228) (54,140) (21,472) (506)
- --------------------------------------------------------------------------------
Increase (Decrease) in
Net Assets From
Capital Share
Transactions............ (31,955) (20,096) 46,004 4,744
- --------------------------------------------------------------------------------
Total Increase
(Decrease) in Net
Assets................. (19,655) 2,860 54,353 8,266
- --------------------------------------------------------------------------------
Net Assets:
Beginning of Period...... 115,819 112,959 13,072 4,806
- --------------------------------------------------------------------------------
End of Period............ $ 96,164 $ 115,819 $ 67,425 $ 13,072
- --------------------------------------------------------------------------------
Shares Issued and Redeemed:
Issued.................... 946 2,600 3,120 407
Issued in Lieu of Cash
Distributions............ 394 70 55 --
Redeemed.................. (3,428) (3,998) (1,073) (35)
- --------------------------------------------------------------------------------
Net Increase (Decrease)
in Share Transactions.... (2,088) (1,328) 2,102 372
- --------------------------------------------------------------------------------
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
<PAGE>
Financial Highlights Turner Foods
For the year ended September 30, 1996
For a Share Outstanding Throughout each Period
<TABLE>
<CAPTION>
Realized
Net and Net Net
Asset Net Unrealized Distributions Distributions Asset Assets
Value Investment Gains or from Net from Value End of
Beginning Income (Losses) on Investment Capital End of Total Period
of Period (Loss) Securities Income Gains Period Return(3) (000)
--------- -------- ---------- -------- ------- ------ --------- ------
- ------------------
Growth Equity Fund
- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1996 $14.97 0.02 2.91 (0.02) (0.85) $17.03 20.61% $ 96,164
1995 $12.46 0.10 2.52 (0.11) -- $14.97 21.15% $115,819
1994 $13.12 0.10 (0.66) (0.10) -- $12.46 (4.28)% $112,959
1993 $10.40 0.09 2.72 (0.09) -- $13.12 27.08% $ 53,327
1992(1) $10.00 0.03 0.40 (0.03) -- $10.40 6.95% $ 7,781
- --------------
Small Cap Fund
- --------------
1996 $16.08 (0.08) 8.17 -- (1.04) $23.13 52.90% $ 67,425
1995 $10.90 (0.06) 5.24 -- -- $16.08 47.52% $ 13,072
1994(2) $10.00 (0.02) 0.92 -- -- $10.90 12.35% $ 4,806
</TABLE>
<TABLE>
<CAPTION>
Ratio
Ratio of Net
Ratio of of Net Ratio of Income
Expenses Income Expenses (Loss) to
to (Loss) to Average Average
Average to Net Assets Net Assets Portfolio Average
Net Average (Excluding (Excluding Turnover Commission
Assets Net Assets Waivers) Waivers) Rate Rate(4)
------ --------- --------- -------- -------- ------
- ------------------
Growth Equity Fund
- ------------------
<S> <C> <C> <C> <C> <C> <C>
1996 1.06%+* 0.03%+* 1.06%+* 0.03%+* 147.59% $0.0600
1995 1.03%+ 0.69%+ 1.03%+ 0.69%+ 177.86% --
1994 0.95% 0.86% 1.08% 0.73% 164.81% --
1993 1.00% 0.80% 1.52% 0.28% 88.35% --
1992(1) 1.44%* 0.73%* 2.55%* (0.38)%* 205.00% --
- --------------
Small Cap Fund
- --------------
1996 1.25% (0.88)% 1.54% (1.17)% 149.21% $0.0600
1995 1.25% (0.68)% 2.39% (1.82)% 183.49% --
1994(2) 1.09%* (0.27)%* 4.32%* (3.50)%* 173.92% --
</TABLE>
* Annualized
(1) The Turner Growth Equity Fund commenced operations on March 11, 1992.
(2) The Turner Small Cap Fund commenced operations on February 7, 1994.
(3) Returns are for the period indicated and have not been annualized.
(4) Average commission rate paid per share for the security purchases and sales
made during the period.
+ The Ratios of Expenses to Average Net Assets and Net Income to Average Net
Assets do not reflect the Advisor's use of arrangements whereby certain
broker-dealers have agreed to pay certain expenses of the Turner Growth
Equity Fund in return for the direction of a percentage of the Fund's
brokerage transactions. As a result of these arrangements, the Ratio of
Expenses to Average Net Assets was 0.94% for both the year ended 10/31/95
and the year ended 9/30/96, and the Ratios of Net Income to Average Net
Assets were 0.78% and 0.15% for the same periods described.
The accompanying notes are an integral part of the financial statements.
<PAGE>
Notes to Financial Statements Turner Funds
September 30, 1996
1. Organization:
The Turner Funds, Inc. (the "Trust") a Massachusetts' business trust (the
Turner Trust), is registered under the Investment Company Act of 1940, as
amended, as a diversified open-end management investment company with four
funds: the Turner Small Cap Fund ( the "Small Cap Fund"), the Turner Growth
Equity Fund (the "Growth Equity Fund"), the Turner Mid Cap Fund, and the Turner
Fixed Income Fund. These statements relate only to the Small Cap and Growth
Equity Funds. As of September 30, 1996, the Turner Mid Cap and Turner Fixed
Income Funds had not commenced operations. The assets of each fund are
segregated, and a shareholder's interest is limited to the fund in which shares
are held. The Funds' prospectus provides a description of each Fund's investment
objectives, policies and strategies.
On April 3, 1996, the shareholders of the Advisors' Inner Circle Turner Small
Cap Fund and the Advisors' Inner Circle Growth Equity Fund (the "Funds") voted
to approve a tax-free reorganization of the Funds through a transfer of all the
assets and liabilities of the Funds to the Turner Small Cap and Turner Growth
Equity Funds portfolios. In connection with the reorganization, the Funds have
changed their fiscal year end from October 31, 1996 to September 30, 1996.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies followed by
the Funds.
Security Valuation -- Investments in equity securities which are traded on a
national exchange (or reported on the NASDAQ national market system) are
stated at the last quoted sales price if readily available for such equity
securities on each business day; other equity securities traded in the over-
the-counter market and listed equity securities for which no sale was
reported on that date are stated at the last quoted bid price. Debt
obligations exceeding sixty days to maturity for which market quotations are
readily available are valued at the most recently quoted bid price. Debt
obligations with sixty days or less remaining until maturity may be valued
at their amortized cost, which approximates market value.
Federal Income Taxes -- It is each Fund's intention to qualify as a
regulated investment company by complying with the appropriate provisions of
the Internal Revenue Code of 1986, as amended. Accordingly, no provision for
Federal income taxes is required.
Security Transactions and Related Income -- Security transactions are
accounted for on the date the security is purchased or sold (trade date).
Dividend income is recognized on the ex-dividend date, and interest income
is recognized on the accrual basis. Costs used in determining realized gains
and losses on the sales of investment securities are those of the specific
securities sold during the respective holding period.
Net Asset Value Per Share -- The net asset value per share of each Fund is
calculated on each business day, by dividing the total value of the Fund's
assets, less liabilities, by the number of shares outstanding.
Repurchase Agreements -- Securities pledged as collateral for repurchase
agreements are held by the custodian bank until the respective agreements
mature. Provisions of the repurchase agreements ensure that the market value
of the collateral, including accrued interest thereon, is sufficient in the
event of default of the counterparty. If the counterparty defaults and the
value of the collateral declines or if the counterparty enters an insol-
vency proceeding, realization of the collateral by the Funds
<PAGE>
Notes to Financial Statements (continued) Turner Funds
September 30, 1996
may be delayed or limited.
Other -- Expenses that are directly related to one of the Funds are charged
to that Fund. Other operating expenses of the Trust are prorated to the
Funds on the basis of relative daily net assets.
Distributions from net investment income are declared and paid to
Shareholders on a quarterly basis. Any net realized capital gains on sales
of securities are distributed to Shareholders at least annually.
Effective 1994, generally accepted accounting principles require that
differences between undistributed net investment income or accumulated net
realized capital gains for financial reporting and tax purposes, if
permanent, be reclassified to/from paid in capital.
3. Transactions with Affiliates:
Certain officers and trustees of the Trust are also officers of SEI Fund
Resources (the "Administrator") and/or SEI Financial Services Company (the
"Distributor"). Such officers and trustees are paid no fees by the Trust for
serving as officers and trustees of the Trust.
4. Administration, Shareholder Servicing and Distribution Agreements:
Prior to April 30, 1996, the Trust and the Administrator were parties to an
Administration Agreement dated November 14, 1991, as amended and restated on May
17, 1994, under which the Administrator provided management, and administrative
services for an annual fee subject to certain minimums, of .20% of the average
daily net assets of each of the Funds up to $75 million and .15% of such assets
in excess of $75 million. There is a minimum annual fee of $75,000 per Fund.
As of May 1, 1996, the Trust and the administrator signed a new agreement under
which the Administrator provides management and administrative services for an
annual fee of .12% of the average daily net assets of each of the Funds up to
$75 million, .10% on the next $75 million, .09% on the next $150 million, .08%
on the next $300 million and .075% of such assets in excess on $600 million.
DST Systems, Inc., (the "Transfer Agent") serves as the transfer agent and
dividend disbursing agent for the Funds under a transfer agency agreement with
the Trust.
The Trust and the Distributor are parties to a Distribution Agreement dated
November 14, 1991, as amended and restated April 30, 1996. The Distributor
receives no fees for its distribution services under this agreement.
5. Investment Advisory and Custodian Agreements:
The Trust and Turner Investment Partners, Inc. (the "Adviser") are parties to an
Investment Advisory Agreement dated February 21, 1992, as amended and restated
April 30, 1996, under which the Adviser receives an annual fee equal to .75% of
the average daily net assets of the Growth Equity Fund and 1.00% of the average
daily net assets of the Small Cap Fund. The Adviser has voluntarily agreed for
an indefinite period of time, to waive all or a portion of its fees (and to
reimburse the Fund's expenses) in order to limit operating expenses to not more
than 1.25% of the average daily net assets of the Small Cap Portfolio. Fee
waivers and expense reimbursements are voluntary and may be terminated at any
time.
CoreStates Bank, N.A. acts as custodian (the "Custodian") for the Funds. Fees
of the Custodian are being paid on the basis of the net assets of the Funds. The
Custodian plays no role in determining the investment policies of the Funds or
which securities are to be purchased or sold in the Funds.
<PAGE>
Notes to Financial Statements Turner Funds
September 30, 1996
6. Investment Transactions:
The cost of security purchases and the proceeds from security sales, other than
short-term investments, for the year ended September 30, 1996 are as follows:
<TABLE>
<CAPTION>
Growth Equity Small Cap
Fund Fund
(000) (000)
------------ ---------
<S> <C> <C>
Purchases
Government....... $ 0 $ 0
Other............ 143,928 88,727
Sales
Government....... $ 0 $ 0
Other............ 180,788 45,663
</TABLE>
At September 30, 1996, the total cost of securities and the net realized gains
or losses on securities sold for Federal income tax purposes was not materially
different from amounts reported for financial reporting purposes. The aggregate
gross unrealized appreciation and depreciation for securities held by the Funds
at September 30, 1996, are as follows:
<TABLE>
<CAPTION>
Growth Equity Small Cap
Fund Fund
(000) (000)
------------- ---------
<S> <C> <C>
Aggregate gross unrealized
appreciation................... $ 18,009 $ 10,093
Aggregate gross unrealized.....
depreciation................... (1,429) (1,430)
------------ ----------
Net unrealized appreciation....... $ 16,580 $ 8,663
============ ==========
</TABLE>
For the year ended September 30, 1996, the Turner Small Cap Portfolio
transferred securities with a market value of $5,857,000 (cost basis $3,933,000)
to shareholders in order to meet Fund share redemptions. This security transfer
resulted in a non-taxable realized gain to the portfolio of $1,924,000 which is
included in paid in capital, a component of equity.
<PAGE>
Notice to Shareholders
of
Turner Funds
Unaudited
Shareholder's Voting Results
- ----------------------------
There was a special meeting of shareholders on April 15, 1996 for the
shareholders of the Turner Growth Equity Fund and the Turner Small Cap Fund to
approve an Agreement and Plan of Reorganization and Liquidation between The
Advisor's Inner Circle Fund, on behalf of Turner Growth Equity Portfolio and
Turner Small Cap Portfolio, and the Turner Funds, on behalf of the Growth
Equity Fund and the Small Cap Fund.
<TABLE>
<S> <C> <C>
Growth Equity Fund
Proposal Shares Voted
-------- ------------
For 3,617,282
Against 0
Abstain 86,565
Small Cap Fund
Proposal Shares Voted
-------- ------------
For 439,305
Against 0
Abstain 171
</TABLE>
<PAGE>
PART C: OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
(a) Financial Statements
Not applicable.
(b) Additional Exhibits
1 Agreement and Declaration of Trust of the Registrant, dated
January 26, 1996 (incorporated herein by reference to Initial
Registration Statement filed on February 1, 1996).
2 By-Laws of the Registrant (incorporated herein by reference to
Initial Registration Statement filed on February 1, 1996).
5(a) Form of Investment Advisory Agreement between the Registrant and
Turner Investment Partners, Inc., (incorporated herein by
reference to Pre-Effective Amendment No. 1 to Registration
Statement filed April 19, 1996).
6(a) Form of Distribution Agreement between the Registrant and SEI
Financial Services Company, (incorporated herein by reference to
Pre-Effective Amendment No. 1 to Registration Statement filed
April 19, 1996).
8(a) Form of Custodian Agreement between the Registrant and
CoreStates Bank, N.A., (incorporated herein by reference to Pre-
Effective Amendment No. 1 to Registration Statement filed April
19, 1996).
9(a) Form of Administration Agreement between the Registrant and SEI
Financial Management Corporation, (incorporated herein by
reference to Pre-Effective Amendment No. 1 to Registration
Statement filed April 19, 1996).
9(b) Form of Agency Agreement between the Registrant and DST Systems,
Inc., (incorporated herein by reference to Pre-Effective
Amendment No. 1 to Registration Statement filed April 19, 1996).
10 Opinion and Consent of Counsel, (incorporated herein by
reference to Pre-Effective Amendment No. 1 to Registration
Statement filed April 19, 1996).
11(a) Consent of Arthur Andersen LLP
16 Performance Calculations, (incorporated herein by reference to
Pre-Effective Amendment No. 1 to Registration Statement filed
April 19, 1996).
17 Financial Data Schedules
24 Powers of Attorney for Joan Lamm-Tennant, David G. Lee, Alfred
C. Salvato, Mark Turner, Robert E. Turner and John T. Wholihan,
(incorporated herein by reference to Pre-Effective Amendment
No. 1 to Registration Statement filed April 19, 1996).
C-1
<PAGE>
Item 25. Persons Controlled by or under Common Control with Registrant:
See the Prospectus and the Statement of Additional Information regarding
the Registrant's control relationships. SEI Financial Management Corporation is
the owner of all beneficial interest in the Administrator and is a subsidiary of
SEI Corporation, which also controls the distributor of the Registrant, SEI
Financial Services Company, other corporations engaged in providing various
financial and record keeping services, primarily to bank trust departments,
pension plan sponsors, and investment managers.
Item 26. Number of Holders of Securities, as of October 15, 1996:
Turner Growth Equity Fund 130
---
Turner Small Cap Fund 168
---
Turner Fixed Income Fund 0
---
Turner Midcap Fund 27
---
Item 27. Indemnification:
Article VIII of the Agreement of Declaration of Trust filed as Exhibit 1 to
the Registration Statement is incorporated by reference. Insofar as
indemnification for liability arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the Declaration of Trust or otherwise, the Registrant is aware that
in the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the Act and, therefore, is
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by trustees, directors, officers or controlling persons of the Registrant
in connection with the successful defense of any act, suit or proceeding) is
asserted by such trustees, directors, officers or controlling persons in
connection with the shares being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issues.
Item 28. Business and Other Connections of Investment Adviser:
ADVISER
- -------
Turner Investment Partners, Inc. ("Turner") is the investment adviser for the
Trust. The principal address of Turner is 1235 Westlakes Drive, Suite 350,
Berwyn, PA 19312. Turner is an investment adviser registered under the Advisers
Act.
The list required by this Item 28 of officers and directors of Turner, together
with information as to any other business profession, vocation or employment of
substantial nature engaged in by such officers and directors during the past two
years is incorporated by reference to Schedules A and D of Form ADV filed by
Turner to the Advisers Act (SEC File No. 801-36220).
C-2
<PAGE>
Item 29. Principal Underwriters:
(a) Furnish the name of each investment company (other than the Registrant) for
which each principal underwriter currently distributing the securities of
the Registrant also acts as a principal underwriter, distributor or
investment adviser.
Registrant's distributor, SEI Financial Services Company ("SFS"), acts as
distributor for:
SEI Daily Income Trust July 15, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI International Trust August 30, 1988
Stepstone Funds January 30, 1991
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
CoreFunds, Inc. October 30, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
1784 Funds June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Marquis Funds/(R)/ August 17, 1993
Morgan Grenfell Investment Trust January 3, 1994
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
CrestFunds, Inc. March 1, 1995
STI Classic Variable Trust August 18, 1995
ARK Funds November 1, 1995
Monitor Funds January 11, 1996
FMB Funds, Inc. March 1, 1996
SEI Asset Allocation Trust April 1, 1996
SEI Institutional Investments Trust June 14, 1996
First American Strategy Funds, Inc. October 1, 1996
SFS provides numerous financial services to investment managers, pension
plan sponsors, and bank trust departments. These services include portfolio
evaluation, performance measurement and consulting services ("Funds
Evaluation") and automated execution, clearing and settlement of securities
transactions ("MarketLink").
(b) Furnish the Information required by the following table with respect to
each director, officer or partner of each principal underwriter named in
the answer to Item 21 of Part B. Unless
C-3
<PAGE>
otherwise noted, the business address of each director or officer is 680
East Swedesford Road, Wayne, PA 19087.
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ---------------- ---------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman & Chief --
Executive Officer
Henry H. Greer Director, President & Chief --
Operating Officer
Carmen V. Romeo Director, Executive Vice --
President & Treasurer
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President, President- --
Investment Services Division
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Jerome Hickey Senior Vice President --
Larry Hutchison Senior Vice President --
Steven Kramer Senior Vice President --
David G. Lee Senior Vice President President
William Madden Senior Vice President --
Jack May Senior Vice President --
A. Keith McDowell Senior Vice President --
Dennis J. McGonigle Senior Vice President --
Hartland J. McKeown Senior Vice President --
Barbara J. Moore Senior Vice President --
James V. Morris Senior Vice President --
Steven Onofrio Senior Vice President --
Kevin P. Robins Senior Vice President, Vice President
General Counsel & Secretary
Robert Wagner Senior Vice President --
Patrick K. Walsh Senior Vice President --
Kenneth Zimmer Senior Vice President --
Robert Aller Vice President --
Marc H. Cahn Vice President & Assistant Vice President
Secretary
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Vice President
Secretary
Robert Crudup Vice President & Managing --
Director
Ed Daly Vice President --
Jeff Drennen Vice President --
Mick Duncan Vice President and Team --
Leader
Vic Galef Vice President & Managing --
Director
</TABLE>
C-4
<PAGE>
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ---------------- ---------------
<S> <C> <C>
Kathy Heilig Vice President --
Michael Kantor Vice President --
Samuel King Vice President --
Kim Kirk Vice President & Managing Director --
Donald H. Korytowski Vice President --
John Krzeminski Vice President & Managing Director --
Robert S. Ludwig Vice President and Team Leader --
Vicki Malloy Vice President and Team Leader --
Carolyn McLaurin Vice President & Managing Director --
W. Kelso Morrill Vice President --
Barbara A. Nugent Vice President & Assistant Secretary Vice President
Sandra K. Orlow Vice President & Assistant Secretary Vice President
Donald Pepin Vice President & Managing Director --
Larry Pokora Vice President --
Kim Rainey Vice President --
Paul Sachs Vice President --
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & Assistant Secretary Vice President
Wayne M. Withrow Vice President & Managing Director --
William Zawaski Vice President --
James Dougherty Director of Brokerage Services --
</TABLE>
Item 30. Location of Accounts and Records:
Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, and the rules promulgated thereunder, are
maintained as follows:
(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3); (6);
(8); (12); and 31a-1(d), the required books and records will be maintained
at the offices of Registrant's Custodian:
CoreStates Bank, N.A.
Broad & Chestnut Streets
P.O. Box 7618
Philadelphia, Pennsylvania 19101
(b)/(c) With respect to Rules 31a-1(a); 31a-1(b)(1),(4); (2)(C) and (D);
(4); (5); (6); (8); (9); (10); (11); and 31a-1(f), the required books and
records are maintained at the offices of Registrant's Administrator:
C-5
<PAGE>
SEI Fund Resources
680 East Swedesford Road
Wayne, Pennsylvania 19087-1658
(c) With respect to Rules 31a-1(b)(5), (6), (9) and (10) and 31a-1(f), the
required books and records are maintained at the principal offices of the
Registrant's Adviser:
Turner Investment Partners, Inc.
1235 Westlakes Drive, Suite 350
Berwyn, Pennsylvania 19312
Item 31. Management Services: None.
Item 32. Undertakings:
Registrant hereby undertakes that whenever shareholders meeting the
requirements of Section 16(c) of the Investment Company Act of 1940 inform the
Board of Directors of their desire to communicate with Shareholders of the
Corporation, the Directors will inform such Shareholders as to the approximate
number of Shareholders of record and the approximate costs of mailing or afford
said Shareholders access to a list of Shareholders.
Registrant hereby undertakes to call a meeting of Shareholders for the
purpose of voting upon the question of removal of a Director(s) when requested
in writing to do so by the holders of at least 10% of Registrant's outstanding
shares and in connection with such meetings to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940.
Registrant hereby undertakes to file a post-effective amendment, including
financial statements which need not be certified for the Midcap Fund, within 4-6
months from the effective date of the Registrant's Post-Effective Amendment
No. 1.
C-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment
No. 2 to Registration Statement No. 333-00641 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Wayne, Commonwealth of
Pennsylvania on the 28th day of October 1996.
TURNER FUNDS
By: /s/ David G. Lee
----------------------
David G. Lee
President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following person in the capacity on the
dates indicated.
* Trustee October 28, 1996
- ------------------------
Alfred C. Salvato
* Trustee October 28, 1996
- ------------------------
Joan Lamm-Tennant
* Trustee October 28, 1996
- ------------------------
Mark D. Turner
* Trustee October 28, 1996
- ------------------------
Robert E. Turner
* Trustee October 28, 1996
- ------------------------
John T. Wholihan
/s/ David G. Lee President and Chief October 28, 1996
- ------------------------ Executive Officer
David G. Lee
/s/ Stephen G. Meyer Controller and October 28, 1996
- ------------------------ Chief Financial
Stephen G. Meyer Officer
By: /s/ David G. Lee October 28, 1996
-------------------
David G. Lee
Attorney-in-Fact
C-7
<PAGE>
EXHIBIT INDEX
Name Exhibit Page
- --------------------------------------------------------------------
Agreement and Declaration of Trust of the Ex-99.B1
Registrant, dated January 26, 1996,
(incorporated herein by reference to Initial
Registration Statement filed on February
1, 1996).
By-Laws of the Registrant, (incorporated herein Ex-99.B2
by reference to Initial Registration Statement
filed on February 1, 1996).
Form of Investment Advisory Agreement between Ex-99.B5(a)
the Registrant and Turner Investment Partners, Inc.
(incorporated herein by reference to Pre-Effective
Amendment No. 1 to Registration Statement filed
April 19, 1996)
Form of Distribution Agreement between the Ex-99.B6(a)
Registrant and SEI Financial Services Company
(incorporated herein by reference to Pre-Effective
Amendment No. 1 to Registration Statement filed
April 19, 1996)
Form of Custodian Agreement between the Registrant Ex-99.B8(a)
and CoreStates Bank, N.A. (incorporated herein by
reference to Pre-Effective Amendment No. 1 to
Registration Statement filed April 19, 1996)
Form of Administration Agreement between the Ex-99.B9(a)
Registrant and SEI Financial Management Corporation
(incorporated herein by reference to Pre-Effective
Amendment No. 1 to Registration Statement filed
April 19, 1996)
Form of Agency Agreement between the Registrant and Ex-99.B9(b)
DST Systems, Inc. (incorporated herein by reference
to Pre-Effective Amendment No. 1 to Registration
Statement filed April 19, 1996)
Opinion and Consent of Counsel Ex-99.B10
(incorporated herein by reference to Pre-Effective
Amendment No. 1 to Registration Statement filed
April 19, 1996)
C-8
<PAGE>
Consent of Independent Public Accountants is Ex-99.B11(a)
filed herewith.
Performance Calculations Ex-99.B16
(incorporated herein by reference to Pre-Effective
Amendment No. 1 to Registration Statement filed
April 19, 1996)
Powers of Attorney for Dr. Joan Lamm-Tennant, Ex-99.B24
David G. Lee, Alfred C. Salvato, Mark
D. Turner, Robert E. Turner, and John T. Wholihan,
(incorporated herein by reference to Pre-Effective
Amendment No. 1 to Registration Statement filed
April 19, 1996)
Financial Data Schedules
Small Cap Fund Ex-99 B27.1
Growth Equity Fund Ex-99 B27.2
C-9
<PAGE>
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated December 5, 1995 of
the Turner Growth Equity and Turner Small Cap Fund's of The Advisors Inner
Circle Fund, and to all references to our Firm included in or made part of
Registration Statement File No. 333-00641. It should be noted that we have not
audited any financial statements of the Turner Funds subsequent to October 31,
1995 or performed any audit procedures subsequent to the date of our report.
/s/ Arthur Andersen LLP
Philadelphia, Pa.,
October 28, 1996
<PAGE>
[ARTICLE] 6
[CIK] 0001006783
[NAME] THE TURNER FUNDS
[SERIES]
[NUMBER] 020
[NAME] SMALL CAP FUND
[MULTIPLIER] 1,000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] SEP-30-1996
[PERIOD-START] NOV-01-1995
[PERIOD-END] SEP-30-1996
[INVESTMENTS-AT-COST] 61,364
[INVESTMENTS-AT-VALUE] 70,027
[RECEIVABLES] 1,817
[ASSETS-OTHER] 30
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 71,874
[PAYABLE-FOR-SECURITIES] 4,376
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 73
[TOTAL-LIABILITIES] 4,449
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 57,074
[SHARES-COMMON-STOCK] 2,915
[SHARES-COMMON-PRIOR] 813
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 1,688
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 8,663
[NET-ASSETS] 67,425
[DIVIDEND-INCOME] 21
[INTEREST-INCOME] 84
[OTHER-INCOME] 0
[EXPENSES-NET] 350
[NET-INVESTMENT-INCOME] (245)
[REALIZED-GAINS-CURRENT] 3,860
[APPREC-INCREASE-CURRENT] 5,659
[NET-CHANGE-FROM-OPS] 9,274
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] (925)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 3,120
[NUMBER-OF-SHARES-REDEEMED] (1,073)
[SHARES-REINVESTED] 55
[NET-CHANGE-IN-ASSETS] 54,353
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 922
[OVERDISTRIB-NII-PRIOR] (8)
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 363
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 433
[AVERAGE-NET-ASSETS] 30,623
[PER-SHARE-NAV-BEGIN] 16.08
[PER-SHARE-NII] (.08)
[PER-SHARE-GAIN-APPREC] 8.17
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] (1.04)
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 23.13
[EXPENSE-RATIO] 1.25
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
<PAGE>
[ARTICLE] 6
[CIK] 0001006783
[NAME] THE TURNER FUNDS
[SERIES]
[NUMBER] 010
[NAME] GROWTH EQUITY FUND
[MULTIPLIER] 1,000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] SEP-30-1996
[PERIOD-START] NOV-01-1995
[PERIOD-END] SEP-30-1996
[INVESTMENTS-AT-COST] 80,611
[INVESTMENTS-AT-VALUE] 97,191
[RECEIVABLES] 77
[ASSETS-OTHER] 31
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 97,299
[PAYABLE-FOR-SECURITIES] 1,091
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 44
[TOTAL-LIABILITIES] 1,135
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 57,709
[SHARES-COMMON-STOCK] 5,647
[SHARES-COMMON-PRIOR] 7,735
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 21,875
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 16,580
[NET-ASSETS] 96,164
[DIVIDEND-INCOME] 924
[INTEREST-INCOME] 41
[OTHER-INCOME] 0
[EXPENSES-NET] 836
[NET-INVESTMENT-INCOME] 129
[REALIZED-GAINS-CURRENT] 21,978
[APPREC-INCREASE-CURRENT] (3,868)
[NET-CHANGE-FROM-OPS] 18,239
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (132)
[DISTRIBUTIONS-OF-GAINS] (5,807)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 946
[NUMBER-OF-SHARES-REDEEMED] 3,428
[SHARES-REINVESTED] 394
[NET-CHANGE-IN-ASSETS] (19,655)
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 5,747
[OVERDISTRIB-NII-PRIOR] (40)
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 667
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 942
[AVERAGE-NET-ASSETS] 97,039
[PER-SHARE-NAV-BEGIN] 14.97
[PER-SHARE-NII] .02
[PER-SHARE-GAIN-APPREC] 2.91
[PER-SHARE-DIVIDEND] (.02)
[PER-SHARE-DISTRIBUTIONS] (.85)
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 17.03
[EXPENSE-RATIO] 1.06
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
