[TURNER GROWTH LOGO OMITTED]
ANNUAL REPORT
SEPTEMBER 30, 2000
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Turner Midcap Growth Fund
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Turner Small Cap Growth Fund
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Turner Micro Cap Growth Fund
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Turner Top 20 Fund
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Turner Technology Fund
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Turner B2B E-Commerce Fund
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Turner Wireless & Communications Fund
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Turner Global Top 40 Fund
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Turner Select Growth Equity Fund
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Turner Short Duration Government Funds
- One Year Portfolio
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Turner Short Duration Government Funds
- Three Year Portfolio
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Turner Core High Quality Fixed Income Fund
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[LOGO OMITTED]
<PAGE>
CONTENTS
1 Total returns of Turner Funds
2 Letter to Shareholders
4 Investment review:
Turner Midcap Growth Fund
6 Investment review:
Turner Small Cap Growth Fund
8 Investment review:
Turner Micro Cap Growth Fund
10 Investment review:
Turner Top 20 Fund
12 Investment review:
Turner Technology Fund
14 Investment review:
Turner B2B E-Commerce Fund
16 Investment review:
Turner Wireless & Communications Fund
18 Investment review:
Turner Global Top 40 Fund
20 Investment review:
Turner Select Growth Equity Fund
22 Investment review:
Turner Short Duration Government
Funds-One Year Portfolio
24 Investment review:
Turner Short Duration Government
Funds-Three Year Portfolio
26 Investment review:
Turner Core High Quality Fixed
Income Fund
28 Financial Statements
66 Notes to Financial Statements
71 Report of Independent Auditors
72 Notice to Shareholders
TURNER FUNDS
The Turner Funds, Portfolios of the TIP Funds offer a series of twelve no-load
mutual funds to individual and institutional investors. The minimum initial
investment in a Turner Fund, with the exception of the Turner Select Growth
Equity Fund, for regular accounts is $2,500 and $2,000 for individual retirement
accounts. The minimum amount for subsequent investments is $50. The minimum
initial investment in the Turner Select Growth Equity Fund is $1 million and the
minimum subsequent investment is $10,000.
Turner Investment Partners, Inc., based in Berwyn, Pennsylvania, serves as the
investment adviser to the Turner Funds. The firm, founded in 1990, invests more
than $12 billion in equity, fixed-income, and balanced portfolios on behalf of
individuals and institutions.
SHAREHOLDER SERVICES
Turner Funds shareholders receive annual and
semiannual reports and monthly account statements. Shareholders who have
questions about their accounts may call a toll-free telephone number,
1-800-224-6312. Or they may write to Turner Funds, Box 219805, Kansas City,
Missouri 64121-9805.
<PAGE>
<TABLE>
<CAPTION>
PERFORMANCE
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TOTAL RETURNS OF TURNER FUNDS*
Through September 30, 2000
(Annualized) Total
Three Year One Three Five Since Assets
Month To Date Year Year Year inception ($mil)
EQUITY
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
TURNER MIDCAP GROWTH FUND 13.63% 27.63% 97.35% 54.35% n/a 51.64% $1,204
Russell Midcap Growth Index 2.52% 14.98% 60.37% 25.87% n/a 26.80%
INCEPTION DATE: 10/1/96
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TURNER SMALL CAP GROWTH FUND -2.78% 7.95% 56.07% 27.32% 29.69% 30.66% $529
Russell 2000 Growth Index -3.97% -2.80% 29.66% 8.93% 12.42% 12.61%
INCEPTION DATE: 2/7/94
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TURNER MICRO CAP GROWTH FUND 7.19% 42.39% 129.02% n/a n/a 83.61% $187
Russell 2000 Growth Index -3.97% -2.80% 29.66% n/a n/a 11.04%
INCEPTION DATE: 3/1/98
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TURNER TOP 20 FUND -5.75% 24.57% 98.58% n/a n/a 126.27% $247
S&P 500 Index -0.97% -1.39% 13.29% n/a n/a 4.93%
INCEPTION DATE: 6/30/99
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TURNER TECHNOLOGY FUND 0.49% 35.76% 149.35% n/a n/a 172.50% $169
Pacific Stock Exchange Technology 100 Index -5.67% 6.89% 65.57% n/a n/a 55.08%
INCEPTION DATE: 6/30/99
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TURNER B2B E-COMMERCE FUND 25.20% n/a n/a n/a n/a 25.20%** $14
Pacific Stock Exchange Technology 100 Index -5.67% n/a n/a n/a n/a -5.67%**
INCEPTION DATE: 6/30/00
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TURNER WIRELESS &
COMMUNICATIONS FUND 18.20% n/a n/a n/a n/a 18.20%** $24
Pacific Stock Exchange Technology 100 Index -5.67% n/a n/a n/a n/a -5.67%**
INCEPTION DATE: 6/30/00
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TURNER GLOBAL TOP 40 FUND -6.30% n/a n/a n/a n/a -6.30%** $12
MSCI World Index -5.26% n/a n/a n/a n/a -5.26%**
INCEPTION DATE: 6/30/00
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TURNER SELECT GROWTH EQUITY FUND -1.90% n/a n/a n/a n/a -1.90%** $5
Russell Top 200 Growth Index -6.96% n/a n/a n/a n/a -6.96%**
Inception Date: 6/14/00
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FIXED INCOME
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TURNER SHORT DURATION GOVERNMENT
FUNDS-ONE YEAR PORTFOLIO (CLASS I) 1.72% 5.01% 6.34% 5.96% 6.22% 6.12% $30
Merrill Lynch 3 Month US T-Bill Index 1.51% 4.48% 5.78% 5.28% 5.34% 5.31%
INCEPTION DATE: 3/1/94
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TURNER SHORT DURATION GOVERNMENT
Funds-Three Year Portfolio (Class I) 2.07% 5.43% 6.00% 5.63% 6.00% 6.01% $42
Lehman Brothers 1-3 Yr. US Gov. Bond Index 2.20% 5.26% 5.84% 5.64% 5.89% 5.77%
INCEPTION DATE: 3/1/94
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TURNER CORE HIGH QUALITY FIXED
INCOME FUND 2.69% 7.37% 6.97% n/a n/a 5.93% $14
Lehman Brothers Aggregate Bond Index 3.02% 7.12% 6.99% n/a n/a 6.12%
Inception Date: 6/30/99
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<FN>
**Past performance is no guarantee of future results.
** Returns are cumulative.
For the one year ended 9/30/00 Lipper Inc. ranked the Turner Short Duration Government Funds-Three Year Portfolio 16 out
of 91 Short-Intermediate U.S. Government Funds, the Turner Midcap Growth Fund 28 out of 414 Multi Cap Growth Funds and the
Turner Core High Quality Fixed Income Fund 32 out of 176 Corporate Debt Funds A Rated Funds.
SOURCE: LIPPER ANALYTICAL SERVICES.
SEI Investments Distribution Co., Oaks, PA acts as distributor of the Turner Funds. The performance data quoted represents past
performance and the principal value and investment return will fluctuate so that an investors' shares, when redeemed, may be
worth more or less than their original cost. Investing in technology and science stocks and small capitalization companies may
subject the Funds to specific inherent risks, including above-average price fluctuations, the risk of investing in a
concentrated portfolio, and a limited number of securities. The Funds may invest in Initial Public Offerings (IPOs). IPOs and
other investments may magnify the performance impact on a fund with a small asset base. The Fund may not experience similar
performance as the assets grow. There is no guarantee any of the Funds will have the same access to the type of IPOs that
contributed to it's performance last year, nor that any IPO will perform as well as last year's IPO. In addition to the normal
risks associated with equity investing, investments that are narrowly focused or that are in small companies typically exhibit
higher volatility due to severe competition and rapid obsolescence. International investments may involve risk of capital loss
from unfavorable fluctuations in currency values, from differences in generally accepted accounting principles or from economic
or political instability in other nations. Due to market volatility performance may be lower. This information must be preceded
or accompanied by a current prospectus for the Turner Funds. Investors should read the prospectus carefully before investing.
</FN>
</TABLE>
TURNER FUNDS 2000 ANNUAL REPORT | 1
<PAGE>
LETTER TO SHAREHOLDERS
TO OUR SHAREHOLDERS
Another fiscal year has passed, and as we try to tell the story of the Turner
Funds' performance, we draw both comfort and perspective from an observation by
Oliver Wendell Holmes, Sr. in 1891:
"What if one does say the same things -- of course in
a little different form each time -- over and over? If he has anything to say
worth saying, that is just what he ought to do."
For our part, we think we do have something worth saying: once again the Turner
Funds by and large generated strong investment performance for you, our
shareholders, in the 12-month period ending September 30, 2000. Specifically,
seven of our eight stock and bond funds that have been in existence for more
than one year outperformed their benchmarks (see table, page 1). And three of
our four new stock funds that were introduced in June of this year got off to
strong starts as well, outperforming their benchmarks since inception. In short,
ours is becoming a familiar story, but an exceedingly satisfying one to tell --
satisfying because we take pains to do our best for shareholders. And be assured
that we are not in the least tired of repeating it.
Our consistently good investment performance is reflected in the Lipper Inc.
rankings of our funds versus their peers. Six of the Turner Funds with track
records of at least one year ranked no lower than the top 18th percentile in the
Lipper ratings for the past 12 months (see table, page 1); the Lipper rankings
are based on total-return data. In fact, three of our funds -- the Turner Top 20
Fund in the Multi-Cap Core Funds category, the Turner Micro Cap Growth Fund in
the Small-Cap Growth Funds category, and the Turner Technology Fund in the
Science & Technology Funds category -- ranked in the first percentile, a
remarkable showing for any single fund family in a business as fiercely
competitive and crowded as ours. Turner Top 20 ranked second out of 372 peers,
Turner Micro Cap Growth was first among 242 competitors, and Turner Technology
placed second in a field of 135.
In general our stock funds benefited from a favorable market for growth stocks
and, in our estimation, on good stock selection and adroit trading. Except for
our four new funds, a large chunk of their gains came early in the period. In
the fourth quarter of 1999, the stock market rebounded like a golf ball off a
cart path. For instance, after an especially bleak stretch in early October, the
S&P 500 Index bounced back dramatically to finish the quarter with a 14.88%
gain. Growth stocks, as represented by the Russell 1000 Growth Index, benefited
handsomely from that year-end surge, soaring 25.14%. Altogether, over the entire
12 months, the Russell 1000 Growth Index rose 23.43%, while the Russell 1000
Value Index climbed just 8.91%. In comparison, the returns of our stock funds in
existence during that entire time ranged from 149.35% (the Turner Technology
Fund) to 56.07% (the Turner Small Cap Growth Fund).
Technology stocks (which represented the largest weightings in our stock funds)
contributed the most to our performance. Why were we so heavily weighted in tech
stocks? The reason is simple: tech stocks are becoming a bigger part of the
target indexes of our funds. For instance, the tech sector now accounts for more
than 30% of the market capitalization of the S&P 500 Index, up from 8% in 1989.
(A brief explanation: our holdings in each of the 10 market sectors are either
"sector neutral" or "sector diversified," meaning that their sector weightings
closely resemble those of the indexes. It's been our experience that such a
strategy makes sense because the performance advantage in the market can shift
swiftly from sector to sector: today's mutt of a sector can be tomorrow's
purebred.) Since we keep the sector weightings of our stock funds close to those
of the indexes, when a sector like technology grows, we follow suit.
In our judgment, our active trading practices -- trading in all of our funds
exceeded an annualized 200% rate over the past 12 months -- helped us to nail
down extra return in a market in which some stocks gained or lost half their
value in a matter of days. Market volatility was unprecedented. For instance, in
the past 12 months, the S&P 500 moved up or down at least 2% on more than 20% of
its trading days. In contrast, before the 1990s, the S&P 500 moved that sharply
just 3% of the time. To cope with such volatility, we found that it paid to be
able to build or eliminate a position quickly.
We think that, despite recent weakness, the tech sector is poised to once again
lead the market in coming months. In our analysis, many tech stocks' valuations
have become more reasonable and the fears that capital spending on technology
will decline next year are largely unwarranted. Our funds remain deeply invested
in tech stocks, so they are well-positioned to exploit any such rally, in our
estimation. We expect no letup in market volatility over the next 12 months. And
we look forward to potentially rewarding trading opportunities resulting from
that volatility and to a continuation of the bull market.
2 | TURNER FUNDS 2000 ANNUAL REPORT
<PAGE>
During the past 12 months, our bond funds enhanced their admirable long-term
record. A particularly worthy performer has been the Turner Short Duration
Government Funds-Three Year Portfolio, which in Lipper's Short-Intermediate U.S.
Government Funds classification ranked in the 17th percentile for the past one
year, or 16th out of 91 peers. Also, in August both that fund and the Turner
Short Duration Government Funds-One Year Portfolio were awarded AAAf
credit-quality and S1 volatility ratings by Standard & Poor's. The AAAf rating
reflects that both funds' holdings provide the highest protection against losses
from credit defaults, and the S1 rating recognizes that they have demonstrated
sensitivity to changing market conditions.
All of our bond funds profited from substantial holdings in Treasury and
mortgage-backed securities, which outperformed (the result of a reduced Treasury
supply and an investor flight to the safety of government and quasi-government
bonds); an underweighting in corporate securities, which underperformed (due to
a growing concern that a slowing economy will foster a deterioration in
corporate credit quality); and a high average credit quality (high quality did
better than low). Altogether, signs of moderating economic growth were a tonic
for the bond market and our bond funds. For the 12-month period, all three of
our bond funds returned 6% or more -- returns competitive with those of
large-cap value stocks.
Going forward, our bond funds continue to emphasize Treasuries,
inflation-indexed Treasuries, and mortgages, which have good return potential,
in our analysis. We are avoiding corporate securities, in the belief that
corporate credit quality will indeed worsen and lead to a depreciation in
corporate-bond prices. We are keeping the average credit quality of our funds
high; in our judgment, most lower-quality bonds don't offer enough extra yield
as compensation for their extra risk.
In closing, we thank you for keeping faith with us, and we thank the members of
our investment team whose individual and collective efforts have contributed so
much to our performance record. As always, we remain committed to our mission of
delivering superior investment returns and service to you. And as always, we
welcome your questions or comments.
/s/BOB TURNER
Bob Turner
CHAIRMAN AND CHIEF INVESTMENT OFFICER
TURNER INVESTMENT PARTNERS, INC.
[PHOTO OMITTED]
BOB TURNER
TURNER FUNDS 2000 ANNUAL REPORT | 3
<PAGE>
INVESTMENT REVIEW
TURNER MIDCAP GROWTH FUND
TOTAL RETURN
YEAR ENDING SEPTEMBER 30, 2000
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TURNER MIDCAP GROWTH FUND 97.35%
Lipper Multi-Cap Growth Funds Average 53.43
Russell Midcap Growth Index 60.37
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During the 12 months ended September 30, 2000, the Turner Midcap Growth Fund
continued to deliver outstanding performance, with a total return of 97.35%.
Once again, it significantly outpaced its benchmark, the Russell Midcap Growth
Index, which produced a total return of 60.37%.
At fiscal year end, the portfolio's price-earnings ratio remained at a
relatively conservative level of 79.1, indicating that this performance was not
achieved through excessive risk.
Technology, which represents the largest portion of the portfolio, continued to
account for much of the Fund's gains. Healthcare issues, particularly in the
emerging biotechnology sector, were also excellent performers. The energy
sector, where we owned a number of key service providers, benefited from rising
oil prices. The only weak member of the group was utilities and communications,
where increased competition and declining investor enthusiasm dampened results.
The Midcap Growth Fund continues to invest in well-capitalized companies that
enjoy dominant market positions and strong track records for innovation. Among
the best-performing issues in the portfolio during the past year were e-commerce
facilitator Commerce One; financial services leader Providian Financial;
biotechnology innovators Medimmune, Millennium Pharmaceuticals, and PE
Biosystems; and technology leaders Applied Micro Circuits, Ariba Incorporated,
Brocade Communications Systems, and Extreme Networks.
Looking ahead, we must again caution investors that the near-doubling of a
Fund's value cannot be expected on a perennial basis. However, we believe that
the Midcap Growth Fund remains in a "sweet spot" of the overall economy, where
strong, agile, and innovative companies are taking the steps required to become
even stronger.
GROWTH OF A $10,000 INVESTMENT IN THE TURNER MIDCAP GROWTH FUND:
OCTOBER 31, 1996-SEPTEMBER 30, 2000 *
[LINE CHART OMITTED]
PLOT POINTS FOLLOWS:
TURNER MID CAP GROWTH RUSSELL MID CAP GROWTH INDEX
10/31/96 10,000 10,000
sep 97 14,248 13,117
sep 98 14,425 11,887
sep 99 26,552 16,309
sep 00 52,401 26,155
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than their original cost. The inception date of the Turner Midcap Growth Fund is
October 1, 1996.
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ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2000
-----------------------------------------------------
PAST ONE YEAR PAST THREE YEARS SINCE INCEPTION
97.35% 54.35% 51.64%
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4 | TURNER FUNDS 2000 ANNUAL REPORT
<PAGE>
TURNER MIDCAP GROWTH FUND
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FUND OBJECTIVE
The Turner Midcap Growth Fund seeks capital appreciation. It invests primarily
in a diversified portfolio of common stocks with market capitalizations between
$1 billion and $10 billion at the time of purchase that Turner believes offer
strong earnings growth potential. The Fund's economic-sector weightings
approximate the sector weightings of the Russell Midcap Growth Index.
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FUND PROFILE
SEPTEMBER 30, 2000
[] Ticker symbol TMGFX
[] CUSIP #900297409
[] Top 10 holdings
(1) Palm
(2) Applied Micro Circuits
(3) Brocade Communications System
(4) Ariba
(5) Extreme Networks
(6) PE Biosystems Group
(7) Redback Networks
(8) Medimmune
(9) Vitesse Semiconductor
(10) Commerce One
[] % in 10 largest holdings 20.6%
[] Number of holdings 113
[] Price/earnings ratio 79.1
[] Weighted average market capitalization $10.8 billion
[] % of holdings with positive earnings surprises 74.1%
[] % of holdings with negative earnings surprises 5.3%
[] Net assets $1,204 billion
[FUND PROFILE BOX OMITTED]
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Sector weightings:
resemble Russell Midcap Growth Index
[BAR CHART OMITTED]
PLOT POINTS FOLLOWS:
3.0% Utilities/communication
2.0% Autos/transportation
5.5% Energy
0.7% Materials/processing
4.9% Producer durables
6.9% Financial services
1.6% Consumer staples
11.1% Consumer discretionary/services
17.7% Health care
43.0% Technology
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PORTFOLIO MANAGERS
[PHOTO OMITTED]
CHRISTOPHER K. MCHUGH has served as the lead product manager of the Midcap
Growth Fund since its inception in 1996. Chris joined Turner when it was founded
in 1990 and previously held a position as performance specialist at Provident
Capital Management. He earned a bachelor's degree at the Philadelphia College of
Textiles and Science and an MBA degree at St. Joseph's University.
[PHOTO OMITTED]
WILLIAM C. MCVAIL serves as a comanager of the Midcap Growth Fund. Before
joining Turner in 1998, Bill was a portfolio manager at PNC Equity Advisors. A
Chartered Financial Analyst, Bill received a bachelor's degree from Vassar
College.
[PHOTO OMITTED]
ROBERT E. TURNER, founder, chairman, and chief investment officer of Turner
Investment Partners, serves as a comanager of the Midcap Growth Fund. A
Chartered Financial Analyst, Bob previously was senior investment manager with
Meridian Investment Company. He earned bachelor's and MBA degrees at Bradley
University.
Turner funds 2000 annual Report | 5
<PAGE>
INVESTMENT REVIEW
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TURNER SMALL CAP GROWTH FUND
YEAR ENDING SEPTEMBER 30, 2000
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TURNER SMALL CAP GROWTH FUND 56.07%
Lipper Mid-Cap Growth Funds Average 63.89
Russell 2000 Growth Index 29.66
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During the year ended September 30, 2000, the Turner Small Cap Growth Fund once
again performed extremely well, delivering a total return of 56.07%. This
performance was nearly double that of the Fund's benchmark, the Russell 2000
Growth Index, which returned 29.66%.
The small cap sector remained an area of both promise and volatility during
fiscal 2000. For the first two quarters of the year, small cap stocks produced
spectacular results, riding the crest of Internet-related euphoria. During the
rest of the year, however, a strong dose of reality took hold, and investors
moved into sectors that offered greater certainty -- and real profits.
Prudent stock selection and broad diversification helped the Turner Small Cap
Growth Fund avoid the worst of the mid-year declines, and allowed the portfolio
to hold on to a large portion of its earlier gains.
Top performers in the portfolio for the year included financial services
providers Henry & Associates and Metris Companies; healthcare providers
AmeriSource, Caremark Rx, Techne Corporation, and Titan Pharmaceuticals; and
technology leaders Anaren Microwave, Manugistics, MMC Networks, Nuance
Communications, and Tollgrade Communications. The weakest sectors were consumer
discretionary, materials processing, producer durables, and utilities and
communications.
Looking ahead, we believe that the small-cap arena remains ripe with
opportunity, as emerging companies continue to develop exciting new products and
services at a rapid pace. And with the Internet "bubble" now a thing of the
past, the market appears to have returned to a climate of more rational
expectations.
We will continue to employ a rigorous, hands-on approach to identifying
companies that have disciplined business models, in the conviction that
innovative ideas are only half of the formula for small-cap success.
GROWTH OF A $10,000 INVESTMENT IN THE TURNER SMALL CAP GROWTH FUND:
FEBRUARY 28, 1994-SEPTEMBER 30, 2000 *
[LINE GRAPH OMITTED]
PLOT POINTS FOLLOWS:
<TABLE>
<CAPTION>
TURNER SMALL CAP GROWTH RUSSELL 2000 GROWTH INDEX
<S> <C> <C>
2/28/94 10,000 10,000
sep 94 10,303 9,618
sep 95 15,812 12,328
sep 96 24,103 13,881
sep 97 28,114 17,123
sep 98 23,362 12,872
sep 99 37,179 17,072
Sep 00 58,025 22,135
</TABLE>
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than their original cost. The inception date of the Turner Small Cap Growth Fund
is February 7, 1994. Returns are calculated from the first full month following
the fund's inception date.
-------------------------------------------------
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2000
-------------------------------------------------
PAST ONE PAST THREE PAST FIVE SINCE
YEAR YEARS YEARS INCEPTION
56.07% 27.32% 29.69% 30.66%
-------------------------------------------------
6 | Turner funds 2000 annual Report
<PAGE>
--------------------------------------------------------------------------------
Turner Small Cap Growth Fund
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FUND OBJECTIVE
The Turner Small Cap Growth Fund seeks capital appreciation. It invests
primarily in a diversified portfolio of common stocks with market
capitalizations at the time of purchase not exceeding $2 billion that Turner
believes offer strong earnings growth potential. The Fund's economic-sector
weightings approximate the sector weightings of the Russell 2000 Growth Index.
The Fund participates in the Initial Public Offering ("IPO") market, and a
significant portion of the Fund's returns are attributable to its investment in
IPOs, which have a magnified impact due to the Fund's relatively small asset
base. There is no guarantee that as the Fund's assets grow, it will continue to
experience substantially similar performance by investing in IPOs.
--------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2000
[] Ticker symbol TSCEX
[] CUSIP #900297300
[] Top 10 holdings
(1) Anaren Microwave
(2) Alpharma, Cl A
(3) NETIQ
(4) Metris
(5) Click Commerce
(6) Natural Microsystems
(7) Manugistics Group
(8) Laboratory Corporation of
America Holdings
(9) Avocent
(10) Tollgrade Communications
[] % in 10 largest holdings 12.7%
[] Number of holdings 153
[] Price/earnings ratio 41.1
[] Weighted average market capitalization $1.7 billion
[] % of holdings with positive earnings surprises 66.0%
[] % of holdings with negative earnings surprises 2.5%
[] Net assets $529 million
[FUND PROFILE BOX OMITTED]
--------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
resemble Russell 2000 Growth Index
[BAR CHART OMITTED]
PLOT POINTS FOLLOWS:
4.1% Utilities/communication
4.0% Materials/processing
6.2% Producer durables
7.2% Financial services
0.9% Autos/transportation
5.3% Energy
1.2% Consumer staples
15.6% Consumer discretionary/services
20.3% Health care
34.0% Technology
--------------------------------------------------------------------------------
PORTFOLIO MANAGERS
[PHOTO OMITTED]
William C. McVail serves as the lead product manager of the Small Cap Growth
Fund. Before joining Turner in 1998, Bill was a portfolio manager at PNC Equity
Advisors. A Chartered Financial Analyst, Bill received a bachelor's degree from
Vassar College.
[PHOTO OMITTED]
Frank L. Sustersic serves as a comanager of the Small Cap Growth Fund. A
Chartered Financial Analyst, Frank joined Turner in 1994. Previously he was an
investment officer and fund manager with First Fidelity Bank Corporation. He
holds a bachelor's degree from the University of Pennsylvania.
[PHOTO OMITTED]
Christopher K. McHugh serves as a comanager of the Small Cap Growth Fund. Chris
joined Turner when it was founded in 1990 and previously held a position as
performance specialist at Provident Capital Management. He earned a bachelor's
degree at the Philadelphia College of Textiles and Science and an MBA degree at
St. Joseph's University.
Turner funds 2000 annual Report | 7
<PAGE>
--------------------------------------------------------------------------------
INVESTMENT REVIEW
TURNER MICRO CAP GROWTH FUND
TOTAL RETURN
YEAR ENDING SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
TURNER MICRO CAP GROWTH FUND 129.02%
Lipper Small-Cap Growth Funds Average 56.56
Russell 2000 Growth Index 29.66
--------------------------------------------------------------------------------
If any investors could have viewed last year's returns of 113.46% as
disappointing, perhaps they will find the results of fiscal year 2000 to be more
palatable. For the 12-month period ended September 30, 2000, the Turner Micro
Cap Growth Fund produced a total return of 129.02% -- again trouncing the
Russell 2000 Growth Index, which reported an annual return of 29.66%.
The lion's share of the Fund's gains occurred during the first six months of the
fiscal year, when micro cap stocks benefited in part from the general lift of
technology/ internet mania. However, the Fund's ability to produce positive
results during an otherwise negative second half demonstrated the importance of
effective stock selection.
Positive results were achieved in all major sectors of the portfolio. Among the
Fund's best performers were fashion retailer Christopher & Banks Corp and drug
delivery specialist CIMA Labs -- both of which grew more than threefold over the
course of the year; contract pharmacy specialist Accredo Health Inc.; medical
laboratory operator Dianon Systems; hospital operator Province Healthcare;
industrial component manufacturer Shaw Group; electronics wholesaler Jaco
Electronics; instrument maker Measurement Specialties; electronics designer DDi
Corporation; and networking specialist Floware Wireless Systems.
Looking ahead, it is once again important to point out that triple-digit
performance is unlikely to continue. That said, we continue to find micro-cap
companies of exceptional promise in a wide range of sectors. And we believe that
our approach and process in identifying the best of these companies will
continue to offer outstanding opportunities to those investors with long-term
time horizons.
GROWTH OF A $10,000 INVESTMENT IN THE TURNER MICRO CAP GROWTH FUND:
FEBRUARY 28, 1998-SEPTEMBER 30, 2000 *
[LINE GRAPH OMITTED
PLOT POINTS FOLLOWS:
TURNER RUSSELL 2000
MICRO CAP GROWTH
GROWTH INDEX
2/98 10,000 10,000
9/98 9,882 7,625
9/99 21,093 10,113
9/00 48,308 13,113
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than their original cost. The inception date of the Turner Micro Cap Growth Fund
is March 1, 1998.
-------------------------------------------
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2000
-------------------------------------------
PAST ONE YEAR SINCE INCEPTION
129.02% 83.61%
-------------------------------------------
8 | Turner funds 2000 annual Report
<PAGE>
--------------------------------------------------------------------------------
TURNER MICRO CAP GROWTH FUND
--------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Micro Cap Growth Fund seeks capital appreciation. It invests
primarily in a diversified portfolio of common stocks that, in Turner's opinion,
have strong earnings growth potential and market capitalizations not exceeding
$500 million at the time of purchase. The Fund's economic-sector weightings stay
within a range that's not more than 50% above or below the sector weightings of
the Russell 2000 Growth Index.
The Fund participates in the Initial Public Offering ("IPO") market, and a
significant portion of the Fund's returns are attributable to its investment in
IPOs, which have a magnified impact due to the Fund's relatively small asset
base. There is no guarantee that as the Fund's assets grow, it will continue to
experience substantially similar performance by investing in IPOs.
--------------------------------------------------------------------------------
FUND PROFILE
September 30, 2000
[] Ticker symbol TMCGX
[] CUSIP #872524301
[] Top 10 holdings
(1) Advanced Paradigm
(2) Shaw Group
(3) Biosource International
(4) Christopher & Banks
(5) Accredo Health
(6) Ultimate Electronics
(7) InFocus
(8) Maverick Tube
(9) DDI
(10) Matrix Pharmaceuticals
[] % in 10 largest holdings 24.6%
[] Number of holdings 106
[] Price/earnings ratio 27.2
[] Weighted average market capitalization $570 million
[] % of holdings with positive earnings surprises 47.0%
[] % of holdings with negative earnings surprises 4.1%
[] Net assets $187 million
[FUND PROFILE BOX OMITTED]
--------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
resemble Russell 2000 Growth Index
[BAR CHART OMITTED]
PLOT POINTS FOLLOWS:
1.9% Utilities/communication
7.6% Materials/processing
8.9% Producer durables
2.2% Financial services
2.0% Autos/transportation
3.6% Energy
18.6% Consumer discretionary/services
29.2% Health care
21.2% Technology
--------------------------------------------------------------------------------
PORTFOLIO MANAGERS
[PHOTO OMITTED]
Frank L. Sustersic has served as the lead product manager of the Micro Cap
Growth Fund since its inception in 1998. A Chartered Financial Analyst, Frank
joined Turner in 1994. Previously he was an investment officer and fund manager
with First Fidelity Bank Corporation. He holds a bachelor's degree from the
University of Pennsylvania.
[PHOTO OMITTED]
William C. McVail serves as the comanager of the Micro Cap Growth Fund. Before
joining Turner in 1998, Bill was a portfolio manager at PNC Equity Advisors. A
Chartered Financial Analyst, Bill received a bachelor's degree from Vassar
College.
[PHOTO OMITTED]
Christopher J. Perry serves as the comanager of the Micro Cap Growth Fund. Chris
joined Turner in 1998 after serving as a research analyst at the Pennsylvania
Merchant Group. A Chartered Financial Analyst, he earned a bachelor's degree at
Villanova University and an MBA degree at Drexel University.
Turner funds 2000 annual Report | 9
<PAGE>
INVESTMENT REVIEW
--------------------------------------------------------------------------------
TURNER TOP 20 FUND
YEAR ENDING SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
TURNER TOP 20 FUND 98.58%
Lipper Multi-Cap Core Funds Average 21.58
S&P 500 Index 13.29
--------------------------------------------------------------------------------
The fiscal year ended September 30, 2000 was another outstanding one for the
Turner Top 20 Fund. For the period, the Fund recorded a total return of 98.58%,
more than quadrupling the performance of its benchmark, the S&P 500 Index, which
produced a return of 13.29%.
There is no way around it: this is a stock-picker's fund. And we are proud of
the choices that resulted in our performance during the year just past.
In particular, we benefited from strong returns from such key holdings as supply
chain management software creator i2 Technologies and storage management
specialist Veritas Software. In addition, our selections in the computer
networking sector delivered excellent gains, most notably Applied Micro
Circuits, Broadcom, Brocade Communications Systems, and Juniper Networks.
Looking ahead, we believe that a highly focused strategy remains very attractive
for those investors who seek the very best of the best in the technology area.
And while we recognize that this strategy also entails an above-average level of
risk, we seek to manage that risk through old-fashioned diligence in our
all-important stock selection process.
GROWTH OF A $10,000 INVESTMENT IN THE TURNER TOP 20 FUND:
JUNE 30, 1999-SEPTEMBER 30, 2000 *
[LINE CHART OMITTED]
PLOT POINTS FOLLOWS:
TURNER S&P 500
TOP 20 INDEX
6/30/99 10,000 10,000
9/99 13,990 9,375
9/00 27,728 10,620
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than their original cost. The inception date of the Turner Top 20 Fund is June
30, 1999.
--------------------------------------------
Annualized total returns
Periods ending September 30, 2000
--------------------------------------------
Past one year Since inception
98.58% 126.27%
--------------------------------------------
10 | Turner funds 2000 annual Report
<PAGE>
--------------------------------------------------------------------------------
TURNER TOP 20 FUND
--------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Top 20 Fund seeks capital appreciation. It invests in common stock
and other equity securities of companies, regardless of their market
capitalization, that Turner believes have strong earnings potential. The Fund
will contain a total of 15-25 stocks representing Turner's favorite investment
ideas.
--------------------------------------------------------------------------------
FUND PROFILE
September 30, 2000
[] Ticker symbol TTOPX
[] CUSIP #87252R862
[] Top 10 holdings
(1) Cisco Systems
(2) Nortel Networks
(3) Commerce One
(4) Juniper Networks
(5) Corning
(6) Applied Micro Circuits
(7) Sun Microsystems
(8) CIENA
(9) PMC-Sierra
(10) Brocade Communications System
[] % in 10 largest holdings 53.1%
[] Number of holdings 23
[] Price/earnings ratio 157.7
[] Weighted average market capitalization $88.5 billion
[] % of holdings with positive earnings surprises 88.2%
[] % of holdings with negative earnings surprises 3.2%
[] Net assets $247 million
[FUND PROFILE BOX OMITTED]
--------------------------------------------------------------------------------
Sector weightings:
[BAR CHART OMITTED]
PLOT POINTS FOLLOWS:
5.2% Consumer discretionary/services
3.1% Health care
90.1% Technology
--------------------------------------------------------------------------------
PORTFOLIO MANAGERS
[PHOTO OMITTED]
Robert E. Turner, founder, chairman, and chief investment officer of Turner
Investment Partners, has served as the lead product manager of the Top 20 Fund
since its inception in 1999. A Chartered Financial Analyst, Bob previously was
senior investment manager with Meridian Investment Company. He earned bachelor's
and MBA degrees at Bradley University
[PHOTO OMITTED]
Christopher K. McHugh serves as a comanager on the Top 20 Fund. Chris joined
Turner when it was founded in 1990 and previously held a position as performance
specialist at Provident Capital Management. He earned a bachelor's degree at the
Philadelphia College of Textiles and Science and an MBA degree at St. Joseph's
University
[PHOTO OMITTED]
William C. McVail
serves as a comanager of the Top 20 Fund. Before joining Turner in 1998, Bill
was a portfolio manager at PNC Equity Advisors. A Chartered Financial Analyst,
Bill received a bachelor's degree from Vassar College.
Turner funds 2000 annual Report | 11
<PAGE>
INVESTMENT REVIEW
--------------------------------------------------------------------------------
TURNER TECHNOLOGY FUND
TOTAL RETURN
YEAR ENDING SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
Turner Technology Fund 149.35%
Lipper Science & Technology Funds Average 69.60
Pacific Stock Exchange Technology 100 Index 65.57
--------------------------------------------------------------------------------
During the fiscal year ended September 30, 2000, the Turner Technology Fund
continued to set a blistering pace, with a total return of 149.35%. In doing so,
the Fund more than doubled the results of its benchmark, the Pacific Stock
Exchange Technology 100 Index, which produced a total return of 65.57%.
It is notable that this performance was achieved during a fiscal year that was
actually rather challenging to technology investors. In fact, some of
technologies best known stocks such as Intel, Microsoft, Lucent and Dell
delivered negative returns during the period.
Fortunately, these weaknesses were more than offset by strengths in other key
issues. These included software provider BEA Systems; e-commerce leader Siebel
Systems; Internet security specialist VeriSign; supply chain management software
creator i2 Technologies; and networking specialists Juniper Networks and
PMC-Sierra.
Looking ahead, we believe that technology will remain the engine of today's
global economy. The products and services of this sector are enabling companies
of all sizes and types to improve efficiency, quality, and productivity. As a
result, we foresee continued strong growth -- especially for the best-of-breed
in the technology category.
Our goal, therefore, is to identify the premier names among today's growth
companies in the computer, semiconductor, electronics, communications, health
care and biotechnology sectors. And while the past year's performance will be
difficult to duplicate, we believe our record indicates strong prospects for
achieving that goal over the long run.
GROWTH OF A $10,000 INVESTMENT IN THE TURNER TECHNOLOGY FUND:
JUNE 30, 1999-SEPTEMBER 30, 2000 *
[LINE GRAPH OMITTED]
PLOT POINTS FOLLOWS:
TURNER PACIFIC STOCK EXCHANGE
TECHNOLOGY TECHNOLOGY INDEX
6/30/99 10,000 10,000
9/99 14,060 10,467
9/00 35,059 17,345
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than their original cost. The inception date of the Turner Technology Fund is
June 30, 1999.
--------------------------------------------
ANNUALIZED TOTAL RETURNS
PERIODS ENDING SEPTEMBER 30, 2000
--------------------------------------------
PAST ONE YEAR SINCE INCEPTION
149.35% 172.50%
--------------------------------------------
12 | Turner funds 2000 annual Report
<PAGE>
--------------------------------------------------------------------------------
TURNER TECHNOLOGY FUND
--------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Technology Fund seeks capital appreciation. It invests in common
stock of companies that develop new technologies and that may experience
exceptional growth in sales and earnings driven technology related products and
services. Stock selection will not be based on company size, but rather on an
assessment of a company's fundamental prospects.
The Fund participates in the Initial Public Offering ("IPO") market, and a
significant portion of the Fund's returns are attributable to its investment in
IPOs, which have a magnified impact due to the fund's relatively small asset
base. There is no guarantee that as the fund's assets grow, it will continue to
experience substantially similar performance by investing in IPOs.
--------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2000
[] Ticker symbol TTECX
[] CUSIP #87252R870
[] Top 10 holdings
(1) Cicso Systems
(2) Nortel Networks
(3) I2 Technologies
(4) Corning
(5) Sycamore Networks
(6) Juniper Networks
(7) Medimmune
(8) Sun Microsystems
(9) PMC-Sierra
(10) Commerce One
[] % in 10 largest holdings 35.0%
[] Number of holdings 41
[] Price/earnings ratio 243
[] Weighted average market capitalization $64.5 billion
[] % of holdings with positive earnings surprises 81.2%
[] % of holdings with negative earnings surprises 7.0%
[] Net assets $169 million
FUND PROFILE BOX OMITTED]
--------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR CHART OMITTED]
PLOT POINTS FOLLOWS:
2.3% Producer durables
2.9% Consumer discretionary/services
5.6% Health care
88.4% Technology
--------------------------------------------------------------------------------
PORTFOLIO MANAGERS
[PHOTO OMITTED]
Robert E. Turner, founder, chairman, and chief investment officer of Turner
Investment Partners, has served as the lead product manager of the Technology
Fund since its inception in 1999. A Chartered Financial Analyst, Bob previously
was senior investment manager with Meridian Investment Company. He earned
bachelor's and MBA degrees at Bradley University.
[PHOTO OMITTED]
Christopher K. McHugh serves as a comanager of the Technology Fund. Chris joined
Turner when it was founded in 1990 and previously held a position as performance
specialist at Provident Capital Management. He earned a bachelor's degree at the
Philadelphia College of Textiles and Science and an MBA degree at St. Joseph's
University.
[PHOTO OMITTED]
Robb J. Parlanti serves
as a comanager of the Technology Fund. Robb joined Turner in 1993 as a senior
portfolio manager/ security analyst. A Chartered Financial Analyst, he received
a bachelor's degree at Wake Forest University. Robb formerly was an assistant
vice president/portfolio manager at PNC Bank.
Turner funds 2000 annual Report | 13
<PAGE>
INVESTMENT REVIEW
--------------------------------------------------------------------------------
TURNER B2B E-COMMERCE FUND
TOTAL RETURN
PERIOD ENDING SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
TURNER B2B E-COMMERCE FUND 25.20%
Lipper Science & Technology Funds Average (1.17)
Pacific Stock Exchange Technology 100 Index (5.67)
--------------------------------------------------------------------------------
From its inception on June 30, 2000 to September 30, 2000, the Turner B2B
E-Commerce Fund
produced a total return of 25.20%, compared with a return of -5.67% for its
benchmark, the Pacific Stock Exchange Technology 100 Index.
This new fund invests primarily in common stocks
of companies that develop new business-to-business electronic commerce
technologies that may experience exceptional growth in sales and earnings driven
by B2B e-commerce products and services.
The Fund's outstanding performance in a negative environment is attributable to
strong stock selection. Among the portfolio's best performers for the period
were Commerce One, a leader in e-commerce solutions; Agile Software Corporation,
a provider of data management software for e-commerce applications; BEA Systems
Inc., which helps companies use mainframe computers in e-commerce environments;
and Click Commerce, a provider of business-to-business software.
The Fund also recorded gains in EMC Corporation, the leader in data storage
devices; i2 Technologies Inc., a developer of supply chain management solutions;
McData Corporation, a network switching and software specialist; Mercury
Interactive, a provider of Web-related testing software; and Vastera, a provider
of global trading support services.
Looking ahead, we believe that the recent correction in the B2B e-commerce
market may be overdone, dragging down quality issues along with those of less
viable companies. Outstanding opportunities remain for the B2B market,
particularly for those who facilitate more efficient and effective management of
corporate supply chains. Therefore, we plan to continue seeking companies that
have sound business models and real long-term earnings potential.
GROWTH OF A $10,000 INVESTMENT IN THE TURNER B2B E-COMMERCE FUND:
JUNE 30, 2000-SEPTEMBER 30, 2000 *
[LINE CHART OMITTED]
PLOT POINTS FOLLOWS:
PACIFIC STOCK
TURNER B2B EXCHANGE TECHNOLOGY
E-COMMERCE 100 INDEX
6/30/00 10,000 10,000
9/00 12,520 9,433
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than their original cost. The inception date of the Turner B2B E-Commerce Fund
is June 30, 2000.
----------------------------------------
CUMULATIVE TOTAL RETURN
Period ending September 30, 2000
----------------------------------------
SINCE INCEPTION
25.20%
----------------------------------------
14 | Turner funds 2000 annual Report
<PAGE>
--------------------------------------------------------------------------------
TURNER B2B E-COMMERCE FUND
--------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner B2B E-Commerce Fund seeks long-term capital appreciation. It invests
in common stocks of companies that develop new business-to-business electronic
commerce technologies and that may experience exceptional growth in sales and
earnings driven by b2b e-commerce products and services. Stock selection will
not be based on company size, but rather on an assessment of a company's
fundamental prospects.
--------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2000
[] Ticker symbol TBTBX
[] CUSIP #87252R797
[] Top 10 holdings
(1) Commerce One
(2) Tibco Software
(3) Intuit
(4) Cicso Systems
(5) I2 Technologies
(6) Sun Microsystems
(7) America Online
(8) Mercury Interactive
(9) BEA Systems
(10) Jabil Circuit
[] % in 10 largest holdings 26.6%
[] Number of holdings 42
[] Price/earnings ratio 582.4
[] Weighted average market capitalization $41.4 billion
[] % of holdings with positive earnings surprises 72.4%
[] % of holdings with negative earnings surprises 2.2%
[] Net assets $14 million
[FUND PROFILE BOX OMITTED]
--------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR CHART OMITTED]
PLOT POINTS FOLLOWS:
1.4% Autos/transportation
10.6% Consumer discretionary/services
1.7% Financial Services
82.8% Technology
--------------------------------------------------------------------------------
PORTFOLIO MANAGERS
[PHOTO OMITTED]
Christopher K. McHugh serves as the lead manager on the B2B E-Commerce Fund.
Chris joined Turner when it was founded in 1990 and previously held a position
as performance specialist at Provident Capital Management. He earned a
bachelor's degree at the Philadelphia College of Textiles and Science and an MBA
degree at St. Joseph's University.
[PHOTO OMITTED]
Robert E. Turner, founder, chairman, and chief investment officer of Turner
Investment Partners, serves as a comanager on the B2B E-Commerce Fund. A
Chartered Financial Analyst, Bob previously was senior investment manager with
Meridian Investment Company. He earned bachelor's and MBA degrees at Bradley
University.
[PHOTO OMITTED]
John Hammerschmidt serves as a comanager on the B2B E-Commerce Fund. John joined
Turner in 1992. Previously he was vice president of government securities
trading with S.G. Warburg. He holds a bachelor's degree from Lehigh University
and an MBA degree from Duke University.
Turner funds 2000 annual Report | 15
<PAGE>
INVESTMENT REVIEW
--------------------------------------------------------------------------------
TURNER WIRELESS & COMMUNICATIONS FUND
TOTAL RETURN
PERIOD ENDING SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
TURNER WIRELESS &
COMMUNICATIONS FUND 18.20%
Lipper Telecommunications Funds Average (7.34)
Pacific Stock Exchange Technology 100 Index (5.67)
--------------------------------------------------------------------------------
From its inception on June 30, 2000 to September 30, 2000, the Turner Wireless &
Communications Fund produced a total return of 18.20%, compared with a -5.67%
return for its benchmark, the Pacific Stock Exchange Technology 100 Index.
This new Fund invests primarily in common stocks of communications companies.
These may include networking companies, land-based, satellite, and wireless
carriers, and communications equipment manufacturers.
The Fund's strong start during this period is attributable to gains in a number
of sectors and holdings. Among the best performers in the portfolio were Applied
Micro Circuits, a provider of specialized chips used in computer networking;
CoSine Communications; a maker of switches and related software; Extreme
Networks Incorporated, a creator of advanced switching solutions; Juniper
Networks, a manufacturer of routers and other networking systems; Micromuse
Inc., a developer of network monitoring systems; personal digital assistant
manufacturer Palm Inc., Phone.Com Incorporated, a developer of wireless
communications software; Software.Com Incorporated, a developer of advanced
e-mail and messaging solutions.
Looking ahead, we believe that the rapidly-expanding global communications
industry continues to offer outstanding opportunities, especially in such areas
as data networking, broad band communications, fiber optic networks and wireless
voice and data delivery. This is a dynamic and capital-intensive industry,
requiring constant attention to shifts in technology and market leadership.
Therefore, we will continue to monitor our stock selections closely with regard
to both internal business fundamentals and external market forces.
GROWTH OF A $10,000 INVESTMENT IN THE TURNER WIRELESS & COMMUNICATIONS FUND:
JUNE 30, 2000-SEPTEMBER 30, 2000 *
[LINE CHART OMITTED]
PLOT POINTS FOLLOWS:
PACIFIC
TURNER STOCK EXCHANGE
WIRELESS & TECHNOLOGY
COMMUNICATIONS 100 INDEX
6/30/00 10,000 10,000
9/00 11,821 9,433
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than their original cost. The inception date of the Turner Wireless &
Communications Fund is June 30, 2000.
-----------------------------------------
CUMULATIVE TOTAL RETURN
Period ending September 30, 2000
-----------------------------------------
SINCE INCEPTION
18.20%
-----------------------------------------
16 | Turner funds 2000 annual Report
<PAGE>
--------------------------------------------------------------------------------
TURNER WIRELESS & COMMUNICATIONS FUND
--------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Wireless & Communications Fund seeks long-term capital appreciation.
It invests primarily in common stocks of communications companies. Stock
selection will not be based on company size, but rather on an assessment of a
company's fundamental prospects. The Fund's holdings will be concentrated in the
communications sector, and will range from small companies developing new
communications technologies to large, established firms with a history of
developing and marketing such communications technologies.
--------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2000
[] Ticker symbol TIWCX
[] CUSIP #87252R789
[] Top 10 holdings
(1) Transwitch
(2) Palm
(3) Aether Systems
(4) Oni Systems
(5) Intersil Holding
(6) Comverse Technology
(7) Juniper Networks
(8) Vitesse Semiconductor
(9) CIENA
(10) Sycamore Networks
[] % in 10 largest holdings 33.2%
[] Number of holdings 40
[] Price/earnings ratio 203.4
[] Weighted average market capitalization $37.3 billion
[] % of holdings with positive earnings surprises 79.9%
[] % of holdings with negative earnings surprises 1.9%
[] Net assets $24 million
[FUND PROFILE BOX OMITTED]
--------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR CHART OMITTED]
PLOT POINTS FOLLOWS:
2.7% Producer durable
96.1% Technology
--------------------------------------------------------------------------------
PORTFOLIO MANAGERS
[PHOTO OMITTED]
Christopher K. McHugh serves as the lead manager on the Wireless &
Communications Fund. Chris joined Turner when it was founded in 1990 and
previously held a position as performance specialist at Provident Capital
Management. He earned a bachelor's degree at the Philadelphia College of
Textiles and Science and an MBA degree at St. Joseph's University.
[PHOTO OMITTED]
Robert E. Turner, founder, chairman, and chief investment officer
of Turner Investment Partners, serves as a
comanager on the Wireless & Communications Fund. A Chartered Financial Analyst,
Bob previously was senior investment manager with Meridian Investment Company.
He earned bachelor's and MBA degrees at Bradley University.
[PHOTO OMITTED]
Robb J. Parlanti serves as a comanager of the Wireless & Communications Fund.
Robb joined Turner in 1993 as a senior portfolio manager/security analyst. A
Chartered Financial Analyst, he received a bachelor's degree at Wake Forest
University. Robb formerly was an assistant vice president/portfolio manager at
PNC Bank.
TURNER FUNDS 2000 ANNUAL REPORT | 17
<PAGE>
INVESTMENT REVIEW
--------------------------------------------------------------------------------
TURNER GLOBAL TOP 40 FUND
TOTAL RETURN
PERIOD ENDING SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
TURNER GLOBAL TOP 40 FUND (6.30)%
Lipper Global Funds Average (3.11)
MSCI World Index (5.26)
--------------------------------------------------------------------------------
From its inception on June 30, 2000 to September 30, 2000, the Turner Global Top
40 Fund produced a total return of -6.30%, compared with a return of -5.26% for
its benchmark, the MSCI World Index.
This new fund invests primarily in common stocks of companies located in the
U.S. and developing foreign market. Its invests in a variety of industries and
business sectors that the Fund expects to experience rising earnings growth and
to benefit from global economic trends or promising technologies or products.
The portfolio will typically consist of 30 to 50 stocks representing the
adviser's best global investment ideas.
While the Fund slightly underperformed its index during its initial months of
existence, several portfolio holdings produced solid gains. Among them were
Commerce One, a U.S.-based e-commerce facilitator; Biovail Corporation, a
Canadian drug delivery specialist; Celestica Incorporated, a Canadian provider
of contract manufacturing services; Check Point Software Technology, a
Israel-based provider of security software; Veritas Software Corp., a U.S.-based
developer of storage management software; and Global Crossing, and a
Bermuda-based provider of telecommunications services.
Looking ahead, we believe that our strategy of focusing on a relatively small
number of high-potential stocks from around the world presents exciting
possibilities for the future. And while any global strategy entails special
risks, we feel confident that our approach and process in selecting stocks,
industries, and global markets will enable us to balance those risks with
equally uncommon reward potential over the long term.
GROWTH OF A $10,000 INVESTMENT IN THE TURNER GLOBAL TOP 40 FUND:
JUNE 30, 2000-SEPTEMBER 30, 2000 *
[LINE CHART OMITTED]
PLOT POINTS FOLLOWS:
TURNER GLOBAL MSCI WORLD
TOP 40 INDEX
6/30/00 10,000 10,000
9/00 9,370 9,497
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than their original cost. The inception date of the Turner Global Top 40 Fund is
June 30, 2000.
----------------------------------------
CUMULATIVE TOTAL RETURN
Period ending September 30, 2000
----------------------------------------
SINCE INCEPTION
-6.30%
----------------------------------------
18 | Turner funds 2000 annual Report
<PAGE>
--------------------------------------------------------------------------------
Turner Global Top 40 Fund
--------------------------------------------------------------------------------
Fund objective
The Turner Global Top 40 Fund seeks long-term capital appreciation. It invests
in ADRs and common stock of U.S. and foreign companies regardless of their
market capitalization that Turner believes have strong earnings growth
potential. The portfolio will typically consist of 30-50 stocks representing
Turner's best global investment ideas.
--------------------------------------------------------------------------------
Fund profile
September 30, 2000
[] Ticker symbol TGTFX
[] CUSIP #87252R813
[] Top 10 holdings
(1) Cisco Systems
(2) Nortel Networks
(3) Check Point Software Technologies
(4) Corning
(5) Flextronics International Ltd.
(6) Juniper Networks
(7) Celestica
(8) Commerce One
(9) Tycom Ltd.
(10) Brocade Communications System
[] % in 10 largest holdings 32.1%
[] Number of holdings 45
[] Price/earnings ratio 80.8
[] Weighted average market capitalization $83.4 billion
[] % of holdings with positive earnings surprises 58.8%
[] % of holdings with negative earnings surprises 5.6%
[] Net assets $12 million
[FUND PROFILE BOX OMITTED]
--------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR CHART OMITTED]
PLOT POINTS FOLLOWS:
57.0% Technology
14.9% Utilities/communication
5.6% Financial services
1.8% Autos/transportation
2.5% Energy
6.6% Consumer discretionary/services
7.9% Health care
--------------------------------------------------------------------------------
PORTFOLIO MANAGERS
[PHOTO OMITTED]
Mark Turner, founder and vice-chairman of Turner Investment Partners, serves as
the lead manager on the Global Top 40 Fund. Mark previously was vice president
and senior portfolio manager with First Maryland Asset Management. He earned a
bachelor's degree at Bradley University and an MBA at the University of
Illinois.
[PHOTO OMITTED]
Robert E. Turner, founder, chairman, and chief investment officer of Turner
Investment Partners, serves as a comanager on the Global Top 40 Fund. A
Chartered Financial Analyst, Bob previously was senior investment manager with
Meridian Investment Company. He earned bachelor's and MBA degrees at Bradley
University.
[PHOTO OMITTED]
Robb J. Parlanti serves as a comanager of the Global Top 40 Fund. Robb joined
Turner in 1993 as a senior portfolio manager/security analyst. A Chartered
Financial Analyst, he received a bachelor's degree at Wake Forest University.
Robb formerly was an assistant vice president/portfolio manager at PNC Bank.
[PHOTO OMITTED]
Christopher J. Perry serves as a comanager of the Global Top 40 Fund. Chris
joined Turner in 1998 after serving as a research analyst at the Pennsylvania
Merchant Group. A Chartered Financial Analyst, he earned a bachelor's degree at
Villanova University and an MBA degree at Drexel University.
Turner funds 2000 annual Report | 19
<PAGE>
INVESTMENT REVIEW
--------------------------------------------------------------------------------
TURNER SELECT GROWTH EQUITY FUND
TOTAL RETURN
PERIOD ENDING SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
TURNER SELECT GROWTH EQUITY FUND (1.90)%
Lipper Large-Cap Growth Funds Average (0.48)
Russell Top 200 Growth Index (6.96)
--------------------------------------------------------------------------------
From its inception on June 14, 2000 to September 30, 2000, the Turner Select
Growth Equity Fund produced a total return of -1.90%, compared with a return of
-6.96% for its benchmark, the Russell Top 200 Growth Index.
This new fund invests primarily in common stocks and other equity securities of
U.S. companies that the adviser believes have strong earnings growth potential.
While the focus is on companies with very large market capitalizations -- such
as those over $10 billion -- the Fund may also purchase securities of smaller
companies.
During its first six months of operations, the management style of the Turner
Select Growth Equity Fund helped the portfolio outperform its benchmark. In
particular, the Fund benefited from gains in Enron Corporation, an innovative
marketer of energy products and communications services; MedImmune, a
biotechnology leader; networking leaders Applied Micro Circuits, Juniper
Networks, and Ciena Corporation, i2 Technologies, a developer of supply chain
management solutions; Siebel Systems, an e-commerce leader; and Sun
Microsystems, a leading provider of computer hardware and software systems.
Looking ahead, the environment remains favorable for large-cap growth companies,
which have in recent years demonstrated by the agility to develop innovative
products and services as well as the financial strength to bring their best
ideas to market. We believe that by remaining attuned to shifting trends in
overall business trends, we can continue to identify those companies that offer
the best prospects for adding to their track records of success.
GROWTH OF A $1,000,000 INVESTMENT IN THE TURNER SELECT GROWTH EQUITY FUND:
JUNE 30, 2000-SEPTEMBER 30, 2000 *
[LINE CHART OMITTED]
PLOT POINTS FOLLOWS:
TURNER SELECT RUSSELL TOP 200 S&P 500
GROWTH EQUITY GROWTH EQUITY INDEX
6/30/00 1,000,000 1,000,000 1,000,000
9/00 965,544 930,443 990,327
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than their original cost. The inception date of the Turner Select Growth Equity
Fund is June 14, 2000.
----------------------------------------
CUMULATIVE TOTAL RETURN
Period ending September 30, 2000
----------------------------------------
SINCE INCEPTION
-1.90%
----------------------------------------
20 | Turner funds 2000 annual Report
<PAGE>
--------------------------------------------------------------------------------
TURNER SELECT GROWTH EQUITY FUND
--------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Select Growth Equity Fund seeks capital appreciation. It invests
primarily in common stocks and equity securities of U.S. companies with market
capitalization exceeding ten billion that Turner believes have strong earnings
growth potential.
--------------------------------------------------------------------------------
FUND PROFILE
September 30, 2000
[] Ticker symbol TSGEX
[] CUSIP #87252R839
[] Top 10 holdings
(1) Cisco Systems
(2) General Electric
(3) Pfizer
(4) EMC-Mass
(5) Sun Microsystems
(6) Oracle
(7) America Online
(8) Corning
(9) Amgen
(10) Time Warner
[] % in 10 largest holdings 47.6%
[] Number of holdings 50
[] Price/earnings ratio 81.2
[] Weighted average market capitalization $170.8 billion
[] % of holdings with positive earnings surprises 84.9%
[] % of holdings with negative earnings surprises 4.4%
[] Net assets $5 million
[FUND PROFILE BOX OMITTED]
--------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR CHART OMITTED]
PLOT POINTS FOLLOWS:
1.2% Producer durables
1.1% Financial services
2.4% Energy
16.1% Consumer discretionary/services
2.2% Consumer staples
15.8% Health care
60.1% Technology
--------------------------------------------------------------------------------
PORTFOLIO MANAGERS
[PHOTO OMITTED]
Robert E. Turner, founder, chairman, and chief investment officer of Turner
Investment Partners, serves as the lead manager on the Select Growth Equity
Fund. A Chartered Financial Analyst, Bob previously was senior investment
manager with Meridian Investment Company. He earned bachelor's and MBA degrees
at Bradley University.
[PHOTO OMITTED]
Mark Turner, founder and vice-chairman of Turner Investment Partners, serves as
a comanager on the Select Growth Equity Fund. Mark previously was vice president
and senior portfolio manager with First Maryland Asset Management. He earned a
bachelor's degree at Bradley University and an MBA at the University of
Illinois.
[PHOTO OMITTED]
John Hammerschmidt serves as a comanager on the Select Growth Equity Fund. John
joined Turner in 1992. Previously he was vice president of government securities
trading with S.G. Warburg. He holds a bachelor's degree from Lehigh University
and an MBA degree from Duke University.
Turner funds 2000 annual Report | 21
<PAGE>
INVESTMENT REVIEW
--------------------------------------------------------------------------------
TURNER SHORT DURATION GOVERNMENT FUNDS-
ONE YEAR PORTFOLIO
TOTAL RETURN
Year ending September 30, 2000
--------------------------------------------------------------------------------
TURNER SHORT DURATION GOVERNMENT FUNDS-
ONE YEAR PORTFOLIO (CLASS I) 6.34%
Lipper Ultra-Short Obligation Funds Average 6.02
Merrill Lynch 3 Month
U.S. Treasury Bill Index 5.78
--------------------------------------------------------------------------------
For the 12 months ended September 30, 2000, Class I and Class II shares of the
Turner Short Duration Government Funds-One Year Portfolio delivered strong total
returns of 6.34% and 6.00%, respectively. By contrast, the Merrill Lynch
Three-Month Treasury Bill Index reported a total return of 5.78%.
The Fund benefited from three rate hikes by the Federal Reserve Board over the
course of the fiscal year, each of which boosted short-term yields by 0.25%. In
addition, a mildly aggressive average duration and a strong position in
mortgage-backed securities provided the fund with increased octane during a
relatively calm period.
Investors in the fund can also feel gratified that during a good portion of the
year, yields on short-term instruments actually exceeded those of longer-term
securities. However, this so-called "inversion of the yield curve" is often
considered to be a sign of a coming economic slowdown.
Looking ahead, we believe that the Federal Reserve Board will hold rates
relatively steady for the near future as it waits for clearer signs of the
economy's direction. The picture at present is blurry, with strong overall
growth mixed with rising oil prices and pockets of weakness in certain
manufacturing sectors. Whatever the environment, we believe that the Fund
remains well positioned to provide conservative investors with a balance of
competitive yields and relative stability.
GROWTH OF A $10,000 INVESTMENT IN THE TURNER SHORT DURATION GOVERNMENT-FUNDS ONE
YEAR PORTFOLIO, CLASS I:
MARCH 31, 1994-SEPTEMBER 30, 2000 *
[LINE CHART OMITTED]
PLOT POINTS FOLLOWS:
TURNER SHORT DURATION, MERRILL LYNCH
1 YEAR PORTFOLIO 3 MONTH T.BILL INDEX
3/31/94 10,000 10,000
Sep.94 10,231 10,235
Sep 95 10,935 10,837
Sep 96 11,704 11,431
Sep 97 12,428 12,047
Sep 98 13,201 12,693
Sep 99 13,906 13,289
Sep 00 14,788 14,058
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than their original cost. The inception date of the Turner Short Duration
Government Funds-One Year Portfolio (Class I) is March 1, 1994.
----------------------------------------------------------------
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2000
----------------------------------------------------------------
PAST ONE PAST THREE PAST FIVE SINCE
YEAR YEARS YEARS INCEPTION
Class I Shares 6.34% 5.96% 6.22% 6.12%
Class II Shares 6.00% -- -- 5.51%
----------------------------------------------------------------
22 | Turner funds 2000 annual Report
<PAGE>
--------------------------------------------------------------------------------
TURNER SHORT DURATION GOVERNMENT FUNDS-
ONE YEAR PORTFOLIO
--------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Short Duration Government Funds-One
Year Portfolio seeks to produce maximum total return consistent with the
preservation of capital and investment prudence. It invests primarily in
high-grade securities issued or guaranteed by the U.S. government or its
agencies. The Fund seeks to limit fluctuations in principal and reduce
interest-rate risk by maintaining an average effective duration no greater than
that of a one-year Treasury note.
--------------------------------------------------------------------------------
FUND PROFILE
September 30, 2000
[] Ticker symbol TSDOX Class I Shares
[] CUSIP #872524103, Class I Shares
[] Top 10 holdings
(1) FHLMC, 6.770%, 05/24/01
(2) U.S. Treasury Note, 3.625%, 07/15/02
(3) FHLMC CMO/REMIC, 7.000%, 04/15/08
(4) FNMA MTN, 6.290%, 09/11/01
(5) FNMA CMO/REMIC, 7.000%, 01/18/21
(6) WFS Financial Owner Trust, 7.010%, 08/20/03
(7) Prudential Home Mortgage Securities, 7.000%, 02/25/24
(8) U.S. Treasury Note, 8.000%, 05/15/01
(9) GNMA ARM, 6.750%, 08/20/17
(10) FNMA CMO/REMIC, 6.000%, 05/18/12
[] % in 10 largest holdings 50.7%
[] Number of holdings 49
[] Average effective duration 0.6 years
[] Average maturity 0.8 years
[] Average yield to maturity 6.6%
[] Average credit quality Agency
[] Convexity (0.15)
[] Net assets $39 million
[FUND PROFILE BOX OMITTED]
--------------------------------------------------------------------------------
Sector weightings:
[BAR CHART OMITTED]
PLOT POINTS FOLLOWS:
6.7% Asset-backed securities
5.1% U.S. agency securities
22.1% Treasury securities
21.0% Other
45.1% Mortgage-backed securities
--------------------------------------------------------------------------------
PORTFOLIO MANAGERS
[PHOTO OMITTED]
James I. Midanek, fixed-income chief investment officer, has served as manager
of the Short Duration Funds-One Year Portfolio since inception. Jim joined
Turner in 1998, upon our acquisition of Solon Asset Management, which he
cofounded. Previously he was chief investment officer, fixed income with
Montgomery Asset Management. He holds a bachelor's degree from Queens College.
[PHOTO OMITTED]
John Pak joined the firm in 2000. He earned a bachelor of arts degree and a
master of arts degree, both in economics, at the University of San Francisco.
Previously he served as vice-president/ trade desk manager at Tuttle Decision
Systems and assistant vice president at C. E. Childs and Company.
Turner funds 2000 annual Report | 23
<PAGE>
INVESTMENT REVIEW
--------------------------------------------------------------------------------
TURNER SHORT DURATION GOVERNMENT FUNDS-
THREE YEAR PORTFOLIO
TOTAL RETURN
YEAR ENDING SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
TURNER SHORT DURATION GOVERNMENT FUNDS-
THREE YEAR PORTFOLIO (CLASS I) 6.00%
Lipper Short/Intermediate U.S. Government
Funds Average 5.38
Lehman Brothers 1-3 Year
U.S. Government Bond Index 5.84
--------------------------------------------------------------------------------
For the 12 months ended September 30, 2000, Class I and Class II shares of the
Turner Short Duration Government Funds-Three Year Portfolio delivered total
returns of 6.00% and 5.92%, respectively. By comparison, the Lehman Brothers 1-3
Year U.S. Government Bond Index returned 5.84%.
This outperformance is attributable to a strategy that emphasized
mortgage-backed securities, which offered a strong yield advantage during much
of the year. The Fund also maintained a relatively modest average duration and
maturity structure, which proved to be beneficial during the last two fiscal
quarters.
In the face of strong economic growth and a skyrocketing stock market, the
Federal Reserve Board implemented three quarter-point rate hikes during the
first half of the fiscal year. However, a combination of slower economic growth,
rising oil prices, declines in the equity markets, and an impending Presidential
election put the Fed on hold for the rest of the period. This allowed the fixed
income markets to stabilize, resulting in solid if unexciting results for the
full year.
Looking ahead, we believe that bond fund investors must face the reality that
the long-term decline in interest rates has essentially run its course, and that
any future action will be within a relatively narrow range. Therefore, any gains
will need to come primarily from coupon yields, rather than capital
appreciation, making sector strategies more important than ever.
Our approach to this market is to move toward those sectors where yields are
most attractive, while maintaining overall quality. At present, that means a
continued emphasis on mortgage-backed instruments.
GROWTH OF A $10,000 INVESTMENT IN THE TURNER SHORT DURATION GOVERNMENT
FUNDS-THREE YEAR PORTFOLIO, CLASS I:
MARCH 31, 1994-SEPTEMBER 30, 2000 *
[LINE CHART OMITTED]
PLOT POINTS FOLLOWS:
TURNER SHORT DURATION LEHMAN 1-3 YR
3 YEAR PORTFOLIO GOVERNMENT BOND INDEX
3/31/94 10,000 10,000
sep 94 10,089 10,049
sep 95 10,976 10,871
sep 96 11,637 11,488
sep 97 12,463 12,279
sep 98 13,469 13,253
sep 99 13,858 13,676
sep 00 14,690 14,475
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than their original cost. The inception date of the Turner Short Duration
Government Funds-Three Year Portfolio (Class I) is March 1, 1994.
-----------------------------------------------------------------
Annualized total returns
Periods ending September 30, 2000
-----------------------------------------------------------------
Past one Past three Past five Since
year years years inception
Class I Shares 6.00% 5.63% 6.00% 6.01%
Class II Shares 5.92% -- -- 8.21%
-----------------------------------------------------------------
24 | Turner funds 2000 annual Report
<PAGE>
--------------------------------------------------------------------------------
TURNER SHORT DURATION GOVERNMENT FUNDS-
THREE YEAR PORTFOLIO
--------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Short Duration Government Funds-Three Year Portfolio seeks to produce
maximum total return consistent with preservation of capital and investment
prudence. It invests primarily in high-grade securities issued or guaranteed by
the U.S. government or its agencies. The Fund seeks to limit fluctuations in
principal and reduce interest-rate risk by maintaining an average effective
duration no greater than that of a three-year Treasury bill.
--------------------------------------------------------------------------------
FUND PROFILE
September 30, 2000
[] Ticker symbol TSDGX, Class I Shares
[] CUSIP #872524202, Class I Shares
[] Top 10 holdings
(1) U.S. Treasury Note,
3.625%, 07/15/02
(2) U.S. Treasury Note, 8.000%, 05/15/01
(3) FNMA CMO/REMIC, 8.000%, 09/25/06
(4) U.S. Treasury Note, 6.000%, 08/15/09
(5) Securitized Assets Sales, 6.250%, 12/25/23
(6) FHLMC CMO/REMIC, 9.500%, 06/15/06
(7) Fleet Credit Card Master Trust, 6.661%, 07/15/03
(8) GNMA, 6.500%, 01/15/13
(9) GNMA, 7.375%, 03/20/16
(10) FNMA, 7.500%, 12/01/09
[] % in 10 largest holdings 46.2%
[] Number of holdings 60
[] Average effective duration 1.5 years
[] Average maturity 2.4 years
[] Average yield to maturity 6.6%
[] Average credit quality Agency
[] Convexity (0.28)
[] Net assets $49 million
[FUND PROFILE BOX OMITTED]
--------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
PLOT POINTS FOLLOWS:
65.1% Mortgage-backed securities
26.4% Treasury securities
5.0% Asset-backed securities
2.8% Other
0.7% U.S. agency securities
--------------------------------------------------------------------------------
PORTFOLIO MANAGERS
[PHOTO OMITTED]
James I. Midanek, fixed-income chief investment officer, has served as manager
of the Short Duration Funds-Three Year Portfolio since inception. Jim joined
Turner in 1998, upon our acquisition of Solon Asset Management, which he
cofounded. Previously he was chief investment officer, fixed income with
Montgomery Asset Management. He holds a bachelor's degree from Queens College.
[PHOTO OMITTED]
John Pak joined the firm in 2000. He earned a bachelor of arts degree and a
master of arts degree, both in economics, at the University of San Francisco.
Previously he served as vice-president/ trade desk manager at Tuttle Decision
Systems and assistant vice president at C. E. Childs and Company.
Turner funds 2000 annual Report | 25
<PAGE>
INVESTMENT REVIEW
--------------------------------------------------------------------------------
TURNER CORE HIGH QUALITY
FIXED INCOME FUND
TOTAL RETURN
YEAR ENDING SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
TURNER CORE HIGH QUALITY
FIXED INCOME FUND 6.97%
Lipper General Bond Funds Average 6.58
Lehman Brothers Aggregate
Bond Index 6.99
--------------------------------------------------------------------------------
For the 12 months ended September 30, 2000, the Turner Core High Quality Fixed
Income Fund delivered a total return of 6.97%. By comparison, the Lehman
Aggregate Bond Index returned 6.99%.
The Fund's strong performance was attributable to a strategy that emphasized
mortgage-backed securities and shorter maturities. While this strategy sometimes
hampered results during periods of declining rates, the net effect proved to be
advantageous for the full fiscal year.
For the government securities markets, the fiscal year was divided into two
distinct halves. In the first, the Federal Reserve Board continued its
aggressive inflation fighting, initiating three 0.25% hikes. In the second,
conflicting economic data and election year tradition kept the Fed on the
sidelines.
Looking ahead, we believe the Federal Reserve Board will remain relatively
passive as it waits for clearer data on the direction of the domestic economy.
In addition, the government securities markets may be subject to post-election
political activity, particularly any changes in plans for the projected budget
surpluses.
In light of this environment, we plan to retain our current focus on relatively
short maturities, and will seek incremental yields through sector-based
strategies.
GROWTH OF A $10,000 INVESTMENT IN THE TURNER CORE HIGH QUALITY FIXED INCOME
FUND:
JUNE 30, 1999-SEPTEMBER 30, 2000 *
[LINE CHART OMITTED]
PLOT POINTS FOLLOWS:
TURNER LEHMAN
CORE HIGH QUALITY AGGREGATE
FIXED INCOME BOND INDEX
6/30/99 10,000 10,000
9/99 10,047 10,068
9/00 10,748 10,772
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than their original cost. The inception date of the Turner Core High Quality
Fixed Income Fund is June 30, 1999.
--------------------------------------------
ANNUALIZED TOTAL RETURNS
PERIODS ENDING SEPTEMBER 30, 2000
--------------------------------------------
PAST ONE YEAR SINCE INCEPTION
6.97% 5.93%
--------------------------------------------
26 | Turner funds 2000 annual Report
<PAGE>
Turner Core High Quality Fixed Income Fund
--------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Core High Quality Fixed Income Fund seeks current income and capital
appreciation, an objective that emphasizes total return rather than just yield
alone. It invests in investment-grade fixed-income securities, including U.S.
government, corporate, mortgaged-backed and asset-backed securities.
--------------------------------------------------------------------------------
FUND PROFILE
September 30, 2000
[] Ticker symbol THQFX
[] CUSIP #87252R847
[] Top 10 holdings
(1) U.S. Treasury Bond, 8.125%, 05/15/21
(2) U.S. Treasury Note, 7.000%, 07/15/06
(3) FNMA, 6.000%, 06/01/14
(4) FNMA TBA, 6.500%, 10/01/30
(5) FNMA CMO/REMIC, 6.000%, 12/25/22
(6) U.S. Treasury Note, 3.625%, 01/15/08
(7) FNMA, 8.000%, 07/01/30
(8) FNMA CMO/REMIC, 6.500%, 06/25/23
(9) FNMA, 8.000%, 08/01/08
(10) FHLMA, 6.000%, 06/01/29
[] % in 10 largest holdings 57.2%
[] Number of holdings 39
[] Average effective duration 4.8 years
[] Average maturity 8.5 years
[] Average yield to maturity 6.8%
[] Average credit quality Agency
[] Convexity 0.06
[] Net assets $14 million
[FUND PROFILE BOX OMITTED]
--------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR CHART OMITTED]
PLOT POINTS FOLLOWS:
6.1% Asset-backed securities
1.7% Corporates
32.0% Treasury securities
61.5% Mortgage-backed securities
--------------------------------------------------------------------------------
PORTFOLIO MANAGERS
[PHOTO OMITTED]
James I. Midanek, fixed-income chief investment officer, has served as manager
of the Core High Quality Fixed Income Fund since its inception in 1999. Jim
joined Turner in 1998, upon our acquisition of Solon Asset Management, which he
cofounded. Previously he was chief investment officer, fixed income with
Montgomery Asset Management. He holds a bachelor's degree from Queens College.
[PHOTO OMITTED]
John Pak joined the firm in 2000. He earned a bachelor of arts degree and a
master of arts degree, both in economics, at the University of San Francisco.
Previously he served as vice-president/ trade desk manager at Tuttle Decision
Systems and assistant vice president at C. E. Childs and Company.
Turner funds 2000 annual Report | 27
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER MIDCAP GROWTH FUND
September 30, 2000
Value
Shares (000)
--------------------------------------------------------------------------------
COMMON STOCKS--95.0%
--------------------------------------------------------------------------------
AUTOMOTIVE--1.5%
--------------------------------------------------------------------------------
Harley-Davidson 250,860 $ 12,010
Tidewater 122,980 5,596
----------
Total Automotive 17,606
----------
--------------------------------------------------------------------------------
BROADCASTING, NEWSPAPERS & ADVERTISING--3.7%
--------------------------------------------------------------------------------
Cablevision Systems, Cl A* 79,200 5,252
Getty Images* 227,220 6,916
Polycom* 268,930 18,010
TMP Worldwide* 181,850 14,639
----------
Total Broadcasting, newspapers &
advertising 44,817
----------
--------------------------------------------------------------------------------
BUILDING & CONSTRUCTION--0.7%
--------------------------------------------------------------------------------
Ecolab 220,540 7,953
----------
Total Building & construction 7,953
----------
--------------------------------------------------------------------------------
COMMERCIAL SERVICES--2.1%
--------------------------------------------------------------------------------
Concord EFS* 453,670 16,112
Quanta Services* 119,530 3,287
Wireless Facilities* 110,410 6,369
----------
Total Commercial services 25,768
----------
--------------------------------------------------------------------------------
COMPUTERS & SERVICES--6.9%
--------------------------------------------------------------------------------
Brocade Communications System* 117,120 27,640
McData, Cl B* 83,560 10,269
Nuance Communications* 62,840 7,647
Redback Networks* 125,620 20,602
Sandisk* 135,340 9,034
StorageNetworks* 74,580 7,621
----------
Total Computers & Services 82,813
----------
--------------------------------------------------------------------------------
DRUGS--6.3%
--------------------------------------------------------------------------------
Allergan 140,900 11,897
Biovail* 114,860 9,354
Celgene* 129,220 7,689
Forest Laboratories, Cl A* 66,940 7,677
King Pharmaceuticals* 259,205 8,667
Medimmune* 262,940 20,312
Watson Pharmaceutical* 151,930 9,857
----------
Total Drugs 75,453
----------
Value
Shares (000)
--------------------------------------------------------------------------------
ELECTRICAL SERVICES--1.7%
--------------------------------------------------------------------------------
Calpine* 92,120 $ 9,615
Cinergy 152,300 5,035
Entergy 162,320 6,046
----------
Total Electrical services 20,696
----------
--------------------------------------------------------------------------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT--2.7%
--------------------------------------------------------------------------------
Celestica* 107,680 7,457
Jabil Circuit* 155,990 8,852
Sanmina* 167,430 15,676
----------
Total Electronic & other
electrical equipment 31,985
----------
--------------------------------------------------------------------------------
FIBER OPTICS--3.1%
--------------------------------------------------------------------------------
Avanex* 94,980 10,228
Exfo Electro Optical Engineering* 89,100 3,881
Finisar* 194,930 9,430
Newport 89,400 14,238
----------
Total Fiber optics 37,777
----------
--------------------------------------------------------------------------------
FINANCIAL SERVICES--4.2%
--------------------------------------------------------------------------------
Capital One Financial 188,870 13,233
Homestore.com* 118,000 5,517
Portal Software* 179,100 7,164
Providian Financial 129,670 16,468
Sungard Data Systems* 200,850 8,599
----------
Total Financial services 50,981
----------
--------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO--0.9%
--------------------------------------------------------------------------------
Ralston Purina Group 143,080 3,389
Suiza Foods* 150,070 7,607
----------
Total Food, beverage & tobacco 10,996
----------
--------------------------------------------------------------------------------
HEALTHCARE--1.9%
--------------------------------------------------------------------------------
Tenet Healthcare* 378,290 13,760
UnitedHealth Group 91,020 8,988
----------
Total Healthcare 22,748
----------
--------------------------------------------------------------------------------
HOTELS & AMUSEMENT SERVICES--0.5%
--------------------------------------------------------------------------------
MGM Mirage 171,210 6,538
----------
Total Hotels & amusement services 6,538
----------
28 | TURNER FUNDS 2000 ANNUAL REPORt
STATEMENT OF NET ASSETS
TURNER MIDCAP GROWTH FUND
Value
Shares (000)
--------------------------------------------------------------------------------
INTERNET SERVICES--10.2%
--------------------------------------------------------------------------------
Agile Software* 118,200 $ 10,631
Ariba* 187,900 26,920
Art Technology Group* 83,260 7,889
Blue Martini Software* 114,430 3,876
Clarent* 205,080 8,075
Commerce One* 244,620 19,203
Infospace* 205,320 6,211
Lycos* 84,230 5,792
Phone.com* 79,190 8,998
Software.Com* 56,050 10,170
Tibco Software* 57,850 4,885
VerticalNet* 276,900 9,726
----------
Total Internet services 122,376
----------
--------------------------------------------------------------------------------
INVESTMENT MANAGEMENT SERVICES--0.5%
--------------------------------------------------------------------------------
Federated Investors, Cl B 223,250 5,525
----------
Total Investment
management services 5,525
----------
--------------------------------------------------------------------------------
MACHINERY--0.5%
--------------------------------------------------------------------------------
SPX Corp* 43,490 6,173
----------
Total Machinery 6,173
----------
--------------------------------------------------------------------------------
MEASURING DEVICES--4.1%
--------------------------------------------------------------------------------
PE Biosystems Group 212,660 24,775
PerkinElmer 86,310 9,009
Waters* 179,060 15,936
----------
Total Measuring devices 49,720
----------
--------------------------------------------------------------------------------
MEDICAL LABS & TESTING SERVICES--0.7%
--------------------------------------------------------------------------------
Quest Diagnostics* 69,820 8,012
----------
Total Medical labs & testing services 8,012
----------
--------------------------------------------------------------------------------
MEDICAL PRODUCTS & SERVICES--5.1%
--------------------------------------------------------------------------------
Express Scripts, Cl A* 78,840 5,696
Idec Pharmaceuticals* 78,950 13,845
Millennium Pharmaceuticals* 92,240 13,473
Minimed* 107,210 9,582
PE-Celera Genomics Group* 58,080 5,786
St. Jude Medical* 260,360 13,278
----------
Total Medical products & services 61,660
----------
Value
Shares (000)
--------------------------------------------------------------------------------
MEDICAL SUPPLIES & EQUIPMENT--0.7%
--------------------------------------------------------------------------------
Sybron International* 377,360 $ 9,057
---------
Total Medical supplies & equipment 9,057
---------
--------------------------------------------------------------------------------
MISCELLANEOUS BUSINESS SERVICES--1.6%
--------------------------------------------------------------------------------
Fiserv* 153,565 9,195
Robert Half International* 273,750 9,496
---------
Total Miscellaneous business services 18,691
---------
--------------------------------------------------------------------------------
NETWORKING PRODUCTS & SERVICES--5.4%
--------------------------------------------------------------------------------
Avici Systems* 89,360 8,500
Extreme Networks* 234,930 26,900
Inrange Technologies, Cl B* 141,190 7,483
Micromuse* 74,600 14,990
Turnstone Systems* 153,040 7,097
---------
Total Networking products & services 64,970
---------
--------------------------------------------------------------------------------
PETROLEUM/FUEL PRODUCTS & SERVICEs--3.3%
--------------------------------------------------------------------------------
BJ Services* 151,020 9,231
Cooper Cameron* 101,520 7,481
Kerr-McGee 76,790 5,087
Nabors Industries* 161,210 8,447
Weatherford International* 219,940 9,457
---------
Total Petroleum/fuel
products & services 39,703
---------
--------------------------------------------------------------------------------
PIPELINES--0.8%
--------------------------------------------------------------------------------
Dynegy, Cl A 169,110 9,639
---------
Total Pipelines 9,639
---------
--------------------------------------------------------------------------------
PRODUCER DURABLE--1.3%
--------------------------------------------------------------------------------
Power-One* 96,740 5,854
Tektronix 121,380 9,324
---------
Total Producer durable 15,178
---------
--------------------------------------------------------------------------------
RETAIL--4.1%
--------------------------------------------------------------------------------
American Eagle Outfitters* 176,970 5,575
Bed Bath & Beyond* 360,860 8,802
CDW Computer Centers* 95,750 6,607
Dollar Tree Stores* 270,150 10,958
RadioShack 167,120 10,800
Tiffany 177,410 6,841
---------
Total Retail 49,583
---------
TURNER FUNDS 2000 ANNUAL REPORT | 29
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER MIDCAP GROWTH FUND
Value
Shares (000)
--------------------------------------------------------------------------------
SEMICONDUCTORS/INSTRUMENTS--8.8%
--------------------------------------------------------------------------------
Applied Micro Circuits* 136,700 $ 28,305
Globespan* 127,970 15,612
Integrated Circuit Systems* 237,370 4,391
Intersil Holding* 177,670 8,861
Marvell Technology Group Ltd.* 68,980 5,320
MIPS Technologies, Cl A* 5,240 241
Novellus Systems* 137,180 6,387
Transwitch* 178,800 11,399
Triquint Semiconductor* 161,780 5,895
Vitesse Semiconductor* 222,380 19,778
---------
Total Semiconductors/instruments 106,189
---------
--------------------------------------------------------------------------------
SOFTWARE & PROGRAMMING--4.7%
--------------------------------------------------------------------------------
Intuit* 261,230 14,890
Mercury Interactive* 91,580 14,355
Quest Software* 103,290 6,415
Rational Software* 193,630 13,433
Research In Motion Ltd.* 72,010 7,098
---------
Total Software & programming 56,191
---------
--------------------------------------------------------------------------------
TELEPHONES & TELECOMMUNICATIONS--1.9%
--------------------------------------------------------------------------------
Cosine Communications* 81,430 4,525
Nextlink Communications, Cl A* 177,360 6,241
Sonus Networks* 35,700 4,512
Terayon* 221,300 7,510
---------
Total Telephones & telecommunications 22,788
---------
--------------------------------------------------------------------------------
WIRELESS EQUIPMENT--5.1%
--------------------------------------------------------------------------------
Aether Systems* 138,370 14,598
Nextel Partners, Cl A* 208,230 6,065
Palm* 618,100 32,721
Powerwave Technologies* 223,060 8,469
---------
Total Wireless equipment 61,853
---------
--------------------------------------------------------------------------------
Total Common stocks
(Cost $937,079) 1,143,439
--------------------------------------------------------------------------------
Face Amount Value
(000) (000)
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT--4.4%
--------------------------------------------------------------------------------
JP Morgan
6.650%-6.750%, dated 09/29/00,
matures 10/02/00, repurchase price
$53,659,448 (collateralized by
Giro Multi Funding DCP
and GNMA, total par value
$56,049,408, 6.500%, 11/15/28,
total maket value $54,722,391) $53,649 $53,649
--------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $53,649) 53,649
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL INVESTMENTS--99.4%
(COST $990,728) 1,197,088
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET--0.6% 6,668
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET ASSETS:
--------------------------------------------------------------------------------
Portfolio capital (unlimited authorization--
no par value) based on 25,874,096
outstanding shares of beneficial interest 929,608
Accumulated net investment loss (2)
Accumulated net realized gain on investments 67,790
Net unrealized appreciation on investments 206,360
--------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $1,203,756
--------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE $46.52
*Non-income producing security
Cl - Class
DCP - Discount commercial paper
GNMA - Government National Mortgage Association
Ltd. - Limited
The accompanying notes are an integral part of the financial statements.
30 | Turner funds 2000 annual Report
<PAGE>
SCHEDULE OF INVESTMENTS
TURNER SMALL CAP GROWTH FUND
SEPTEMBER 30, 2000
Value
Shares (000)
--------------------------------------------------------------------------------
COMMON STOCKS--98.6%
--------------------------------------------------------------------------------
BANKS--1.1%
--------------------------------------------------------------------------------
Silicon Valley Bancshares* 66,500 $ 3,873
Webster Financial 62,740 1,690
---------
Total Banks 5,563
---------
--------------------------------------------------------------------------------
BROADCASTING, NEWSPAPERS & ADVERTISING--2.8%
--------------------------------------------------------------------------------
Celeritek* 100,650 3,793
Getty Images* 166,450 5,066
Sirius Satellite Radio* 47,520 2,513
True North Communications 107,070 3,828
---------
Total Broadcasting, newspapers &
advertising 15,200
---------
--------------------------------------------------------------------------------
BUILDING & CONSTRUCTION--2.3%
--------------------------------------------------------------------------------
DR Horton 238,805 4,104
Dycom Industries* 103,345 4,302
Pulte 120,350 3,972
---------
Total Building & construction 12,378
---------
--------------------------------------------------------------------------------
CHEMICALS--1.7%
--------------------------------------------------------------------------------
Millennium Chemicals 194,330 2,878
Olin 177,930 2,880
OM Group 69,030 3,011
----------
Total Chemicals 8,769
---------
--------------------------------------------------------------------------------
COMMERCIAL SERVICES--1.7%
--------------------------------------------------------------------------------
ACNielsen* 169,160 4,028
Plexus* 70,280 4,955
---------
Total Commercial services 8,983
---------
--------------------------------------------------------------------------------
COMPUTERS & SERVICES--3.1%
--------------------------------------------------------------------------------
Jack Henry & Associates 105,720 4,586
M-Systems Flash Disk Pioneers* 90,660 3,462
Netegrity* 58,250 4,077
Nuance Communications* 33,480 4,074
---------
Total Computers & services 16,199
---------
--------------------------------------------------------------------------------
CONSULTING SERVICES--1.1%
--------------------------------------------------------------------------------
Diamond Technology Partners* 76,680 5,693
---------
Total Consulting services 5,693
---------
Value
Shares (000)
--------------------------------------------------------------------------------
DRUGS--2.9%
--------------------------------------------------------------------------------
Alpharma, Cl A 130,000 $ 7,946
Biovail* 20,370 1,659
Medicis Pharmaceutical, Cl A* 91,040 5,599
---------
Total Drugs 15,204
---------
--------------------------------------------------------------------------------
ELECTRICAL SERVICES--0.9%
--------------------------------------------------------------------------------
Conectiv 109,940 1,965
Western Resources 126,730 2,741
---------
Total Electrical services 4,706
---------
--------------------------------------------------------------------------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT--4.1%
--------------------------------------------------------------------------------
ACT Manufacturing* 49,630 2,618
APW Limited* 93,090 4,538
Benchmark Electronics* 75,600 3,931
DSP Group* 148,820 5,562
Kent Electronics* 93,460 2,231
Merix* 40,710 2,638
---------
Total Electronic & other
electrical equipment 21,518
---------
--------------------------------------------------------------------------------
ENERGY--0.6%
--------------------------------------------------------------------------------
Advanced Energy Industries* 16,810 555
Proton Energy Systems* 95,520 2,734
---------
Total Energy 3,289
---------
--------------------------------------------------------------------------------
ENGINEERING SERVICES--0.5%
--------------------------------------------------------------------------------
Tetra Tech* 93,220 2,663
---------
Total Engineering services 2,663
---------
--------------------------------------------------------------------------------
FIBER OPTICS--1.3%
--------------------------------------------------------------------------------
C-COR.net* 133,660 2,047
MRV Communications* 110,070 4,988
---------
Total Fiber optics 7,035
---------
--------------------------------------------------------------------------------
FINANCIAL SERVICES--4.0%
--------------------------------------------------------------------------------
Advent Software* 37,030 2,587
AmeriCredit* 131,730 3,795
Avis Group Holdings* 93,660 2,775
Bisys Group* 65,880 5,093
Metris 172,030 6,795
---------
Total Financial services 21,045
---------
Turner funds 2000 annual Report | 31
<PAGE>
FINANCIAL STATEMENTS
SCHEDULE OF INVESTMENTS
TURNER SMALL CAP GROWTH FUND
Value
Shares (000)
--------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO--1.2%
--------------------------------------------------------------------------------
Beringer Wine Estates
Holdings, Cl B* 54,590 $ 3,033
Whole Foods Market* 61,140 3,282
---------
Total Food, beverage & tobacco 6,315
---------
--------------------------------------------------------------------------------
HEALTHCARE--3.8%
--------------------------------------------------------------------------------
Amerisource Health, Cl A* 94,780 4,455
Caremark Rx* 477,380 5,371
First Health Group* 145,840 4,703
Triad Hospitals* 184,890 5,431
---------
Total Healthcare 19,960
---------
--------------------------------------------------------------------------------
HOTELS & AMUSEMENT SERVICES--0.6%
--------------------------------------------------------------------------------
Station Casinos* 218,700 3,116
---------
Total Hotels & amusement services 3,116
---------
--------------------------------------------------------------------------------
INSURANCE--0.5%
--------------------------------------------------------------------------------
Arthur J. Gallagher 47,060 2,782
---------
Total Insurance 2,782
---------
--------------------------------------------------------------------------------
INTERNET SERVICES--9.8%
--------------------------------------------------------------------------------
Avocent* 109,661 6,045
Centillium Communications* 44,810 4,302
Clarent* 99,210 3,906
Click Commerce* 157,630 6,739
Digitalthink* 39,320 1,656
Docent* 170,880 3,129
Interwoven* 45,440 5,138
LifeMinders* 117,940 2,705
Looksmart* 152,640 1,708
Matrixone* 85,090 3,404
Niku* 116,620 2,843
Saba Software* 104,750 2,933
Support.com* 134,420 4,117
Vastera* 152,800 3,362
---------
Total Internet services 51,987
---------
--------------------------------------------------------------------------------
INVESTMENT MANAGEMENT SERVICES--0.7%
--------------------------------------------------------------------------------
Affiliated Managers Group* 32,790 1,867
BlackRock/New York* 60,980 1,951
---------
Total Investment management services 3,818
---------
Value
Shares (000)
--------------------------------------------------------------------------------
MATERIAL & PROCESSING--0.8%
--------------------------------------------------------------------------------
American Superconductor* 86,980 $ 4,276
---------
Total Material & processing 4,276
---------
--------------------------------------------------------------------------------
MEASURING DEVICES--2.2%
--------------------------------------------------------------------------------
Mettler Toledo International* 105,640 4,648
Photon Dynamics* 56,920 2,149
Varian* 115,800 4,987
---------
Total Measuring devices 11,784
---------
--------------------------------------------------------------------------------
MEDICAL LABS & TESTING SERVICES--2.1%
--------------------------------------------------------------------------------
Aurora Biosciences* 71,120 4,836
Laboratory Corporation of
America Holdings* 50,500 6,047
---------
Total Medical labs & testing services 10,883
---------
--------------------------------------------------------------------------------
MEDICAL PRODUCTS & SERVICES--8.0%
--------------------------------------------------------------------------------
Aclara BioSciences* 52,870 1,606
Aviron* 24,810 1,447
Bruker Daltonics* 37,930 1,683
Cooper 18,920 669
Dendrite International* 147,100 3,944
Diversa* 45,890 1,239
Electro Scientific Industries* 61,250 2,151
Enzon* 84,940 5,606
Inamed* 77,400 2,177
Inhale Therapeutic Systems* 76,200 4,296
Invitrogen* 71,850 5,110
Maxim Pharmaceuticals* 50,770 3,084
Novoste* 92,040 3,912
Techne* 46,810 5,243
---------
Total Medical products & services 42,167
---------
--------------------------------------------------------------------------------
MEDICAL SUPPLIES & EQUIPMENT--2.1%
--------------------------------------------------------------------------------
Alkermes* 90,720 3,504
Idexx Laboratories* 134,770 3,605
Patterson Dental* 176,540 3,972
---------
Total Medical supplies & equipment 11,081
---------
--------------------------------------------------------------------------------
METAL & METAL INDUSTRIES--0.2%
--------------------------------------------------------------------------------
Shaw Group* 12,310 868
---------
Total Metal & metal industries 868
---------
32 | Turner funds 2000 annual Report
SCHEDULE OF INVESTMENTS
TURNER SMALL CAP GROWTH FUND
Value
Shares (000)
--------------------------------------------------------------------------------
MISCELLANEOUS BUSINESS SERVICES--0.3%
--------------------------------------------------------------------------------
Hall Kinion & Associates* 52,540 $ 1,494
---------
Total Miscellaneous business services 1,494
---------
--------------------------------------------------------------------------------
NETWORKING PRODUCTS & SERVICES--0.8%
--------------------------------------------------------------------------------
MMC Networks* 32,910 4,163
---------
Total Networking products & services 4,163
---------
--------------------------------------------------------------------------------
PAPER & RELATED PRODUCTS--0.9%
--------------------------------------------------------------------------------
Bemis 79,360 2,549
Boise Cascade 83,670 2,222
---------
Total Paper & related products 4,771
---------
--------------------------------------------------------------------------------
PETROLEUM/FUEL PRODUCTS & SERVICES--4.3%
--------------------------------------------------------------------------------
CAL Dive International* 59,910 3,426
Global Industries Ltd.* 155,680 1,946
Grant Prideco* 113,530 2,491
Grey Wolf* 567,310 3,262
Gulf Indonesia Resources Ltd.* 201,400 2,190
Hydril* 105,040 2,390
Key Energy Services* 258,740 2,539
Precision Drilling* 65,860 2,346
Stolt Offshore* 160,340 2,385
---------
Total Petroleum/fuel products & services 22,975
---------
--------------------------------------------------------------------------------
RETAIL--8.0%
--------------------------------------------------------------------------------
American Eagle Outfitters* 119,520 3,765
Childrens Place* 95,810 2,467
Insight Enterprises* 164,040 4,470
Jack in the Box* 131,590 2,821
Men's Wearhouse* 134,450 3,807
Michaels Stores* 102,910 4,116
MSC Industrial Direct, Cl A* 133,370 2,034
PC Connection* 64,070 3,652
PF Chang's China Bistro* 77,160 2,667
Too* 80,190 1,905
Tweeter Home Entertainment
Group* 130,770 4,749
Ultimate Electronics* 62,750 2,581
Zale* 101,590 3,295
---------
Total Retail 42,329
---------
Value
Shares (000)
--------------------------------------------------------------------------------
SEMICONDUCTORS/INSTRUMENTS--5.7%
--------------------------------------------------------------------------------
Actel* 69,470 $ 2,497
Elantec Semiconductor* 58,930 5,871
Emcore* 77,500 3,222
Exar* 44,300 5,360
Integrated Circuit Systems* 169,320 3,132
Integrated Silicon Solutions* 23,930 340
MIPS Technologies, Cl A* 4,760 219
O2Micro International Ltd.* 141,020 2,426
Omnivision Technologies* 101,490 3,673
Silicon Image* 141,970 3,523
---------
Total Semiconductors/instruments 30,263
---------
--------------------------------------------------------------------------------
SOFTWARE & PROGRAMMING--6.5%
--------------------------------------------------------------------------------
Actuate* 97,580 3,371
Aspen Technology* 61,470 2,774
Avantgo* 38,180 764
Descartes Systems Group* 81,630 4,041
Informatica* 49,790 4,643
Manugistics Group* 64,890 6,367
National Instruments* 67,370 2,973
NETIQ* 104,780 6,883
WebTrends* 70,440 2,633
---------
Total Software & programming 34,449
---------
--------------------------------------------------------------------------------
TELEPHONES & TELECOMMUNICATIONS--7.2%
--------------------------------------------------------------------------------
Alamosa PCS Holdings* 5,940 96
Anaren Microwave* 66,080 8,962
Digital Lightwave* 28,850 2,095
ITC Deltacom* 123,250 1,417
Leap Wireless International* 51,580 3,227
Mastec* 69,550 2,173
Natural Microsystems* 123,980 6,670
Price Communications* 147,960 2,894
Tollgrade Communications* 42,360 5,880
Tut Systems* 54,980 4,745
---------
Total Telephones & telecommunications 38,159
---------
--------------------------------------------------------------------------------
THERAPEUTICS--1.7%
--------------------------------------------------------------------------------
NPS Pharmaceuticals* 21,880 1,238
Titan Pharmaceuticals* 74,860 4,866
United Therapeutics* 34,170 2,986
---------
Total Therapeutics 9,090
---------
TURNER FUNDS 2000 ANNUAL REPORT | 33
<PAGE>
FINANCIAL STATEMENTS
SCHEDULE OF INVESTMENTS
TURNER SMALL CAP GROWTH FUND
Value
Shares (000)
--------------------------------------------------------------------------------
TRANSPORTATION SERVICES--0.9%
--------------------------------------------------------------------------------
Atlas Air* 59,100 $ 2,497
EGL* 67,160 2,032
---------
Total Transportation services 4,529
---------
--------------------------------------------------------------------------------
TECHNOLOGY--0.7%
--------------------------------------------------------------------------------
Artesyn Technologies* 127,840 3,723
---------
Total Technology 3,723
---------
--------------------------------------------------------------------------------
WIRELESS EQUIPMENt--1.5%
--------------------------------------------------------------------------------
Proxim* 78,490 3,493
SBA Communications* 67,100 2,814
Triton Network Systems* 146,330 1,921
---------
Total Wireless equipment 8,228
---------
--------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $460,988) 521,455
--------------------------------------------------------------------------------
Face Amount Value
(000) (000)
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT--3.5%
--------------------------------------------------------------------------------
JP Morgan
6.750%, dated 09/29/00, matures
10/02/00, repurchase price $18,568,149
(collateralized by Queens Health DCP
and Giro Funding DCP, total par value
$19,078,000, total maket value
$18,936,505) $18,565 $ 18,565
--------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $18,565) 18,565
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL INVESTMENTS--102.1%
(COST $479,553) 540,020
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET--(2.1%) (11,092)
--------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $528,928
* Non-income producing security
Cl - Class
DCP - Discount commercial paper
Ltd. - Limited
The accompanying notes are an integral part of the financial statements.
34 | TURNER FUNDS 2000 ANNUAL REPORT
<PAGE>
STATEMENT OF NET ASSETS
TURNER MICRO CAP GROWTH FUND
SEPTEMBER 30, 2000
Value
Shares (000)
--------------------------------------------------------------------------------
COMMON STOCKS--94.1%
--------------------------------------------------------------------------------
APPAREL/TEXTILES--0.8%
--------------------------------------------------------------------------------
Skechers U.S.A., Cl A* 92,990 $ 1,406
---------
Total Apparel/textiles 1,406
---------
--------------------------------------------------------------------------------
AUTOMOTIVE--1.2%
--------------------------------------------------------------------------------
IMPCO Technologies* 38,470 1,106
Oshkosh Truck 27,655 1,072
---------
Total Automotive 2,178
---------
--------------------------------------------------------------------------------
BANKS--1.5%
--------------------------------------------------------------------------------
Dime Community Bancshares 16,670 413
Independent Bank-Mich 15,000 260
PFF Bancorp 53,930 1,173
Sterling Bancshares 60,500 923
---------
Total Banks 2,769
---------
--------------------------------------------------------------------------------
BUILDING & CONSTRUCTION--0.7%
--------------------------------------------------------------------------------
Del Webb* 49,000 1,360
---------
Total Building & construction 1,360
---------
--------------------------------------------------------------------------------
COMPUTERS & SERVICES--3.8%
--------------------------------------------------------------------------------
InFocus* 65,050 3,448
Mobility Electronics* 94,360 861
Netscout Systems* 10,000 237
Read-Rite* 223,000 2,509
---------
Total Computers & services 7,055
---------
--------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURINg--0.9%
--------------------------------------------------------------------------------
ESCO Technologies* 97,000 1,698
---------
Total Diversified manufacturing 1,698
---------
--------------------------------------------------------------------------------
DRUGS--5.3%
--------------------------------------------------------------------------------
Akorn* 133,460 1,476
Cima Labs* 57,200 2,978
Collagenex Pharmaceuticals* 70,970 577
Inkine Pharmaceutical* 168,520 1,812
Matrix Pharmaceuticals* 200,300 3,117
---------
Total Drugs 9,960
---------
Value
Shares (000)
--------------------------------------------------------------------------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT--8.2%
--------------------------------------------------------------------------------
DDI* 75,050 $ 3,321
Measurement Specialties* 50,600 2,441
Merix* 24,310 1,576
Nanometrics* 54,900 2,934
Park Electrochemical 41,000 2,281
SMTC* 55,820 1,200
Universal Electronics* 68,800 1,664
---------
Total Electronic & other electrical
equipment 15,417
---------
--------------------------------------------------------------------------------
HEALTHCARE--3.6%
--------------------------------------------------------------------------------
Molecular Devices* 14,100 1,385
Province Healthcare* 69,765 2,786
Stericycle* 102,730 2,517
---------
Total Healthcare 6,688
---------
--------------------------------------------------------------------------------
HOTELS & AMUSEMENT SERVICES--4.2%
--------------------------------------------------------------------------------
Argosy Gaming* 157,100 2,847
Isle of Capri Casinos* 103,760 1,608
Shuffle Master* 81,550 1,585
WMS Industries* 81,220 1,827
---------
Total Hotels & amusement services 7,867
---------
--------------------------------------------------------------------------------
INVESTMENT MANAGEMENT SERVICES--0.7%
--------------------------------------------------------------------------------
American Capital Strategies Ltd. 53,180 1,260
---------
Total Investment management services 1,260
---------
--------------------------------------------------------------------------------
MATERIAL & PROCESSING--0.7%
--------------------------------------------------------------------------------
Hexcel* 97,120 1,299
---------
Total Material & processing 1,299
---------
--------------------------------------------------------------------------------
MEASURING DEVICES--0.7%
--------------------------------------------------------------------------------
Photon Dynamics* 32,800 1,238
---------
Total Measuring devices 1,238
---------
--------------------------------------------------------------------------------
MEDICAL LABS & TESTING SERVICES--1.0%
--------------------------------------------------------------------------------
Dianon Systems* 48,650 1,940
---------
Total Medical labs & testing services 1,940
---------
TURNER FUNDS 2000 ANNUAL REPORT | 35
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER MICRO CAP GROWTH FUND
Value
Shares (000)
--------------------------------------------------------------------------------
MEDICAL PRODUCTS & SERVICEs--18.8%
--------------------------------------------------------------------------------
Accredo Health* 89,150 $ 4,357
Advance Paradigm* 170,620 7,198
American Medical Systems
Holdings* 60,550 946
Applied Molecular Evolution* 25,000 1,003
Biosource International* 205,270 6,363
Cooper 51,770 1,831
Cyberonics* 104,290 2,236
Cyberoptics* 32,120 588
Deltagen* 36,630 1,133
Endocare* 26,220 518
Exactech* 31,230 543
Genaissance Pharmaceuticals* 49,740 1,029
Lynx Therapeutics* 30,000 939
Microcide Pharmaceutical* 82,410 1,113
Oratec Interventions* 24,500 300
Orthofix International* 46,470 1,150
PolyMedica* 25,330 1,086
Transgenomic* 12,020 273
TriPath Imaging* 77,690 544
Vascular Solutions* 58,970 1,107
Zoll Medical* 19,660 958
---------
Total Medical products & services 35,215
---------
--------------------------------------------------------------------------------
MEDICAL SUPPLIES & EQUIPMENT--0.4%
--------------------------------------------------------------------------------
Biosite Diagnostics* 20,030 799
---------
Total Medical supplies & equipment 799
---------
--------------------------------------------------------------------------------
METAL & METAL INDUSTRIES--5.2%
--------------------------------------------------------------------------------
Maverick Tube* 125,550 3,382
Shaw Group* 91,300 6,437
---------
Total Metal & metal industries 9,819
---------
--------------------------------------------------------------------------------
METALS--0.6%
--------------------------------------------------------------------------------
Century Aluminum 89,500 1,119
---------
Total Metals 1,119
---------
--------------------------------------------------------------------------------
MISCELLANEOUS BUSINESS SERVICES--0.5%
--------------------------------------------------------------------------------
Hall Kinion & Associates* 33,700 958
---------
Total Miscellaneous business services 958
---------
Value
Shares (000)
--------------------------------------------------------------------------------
MISCELLANEOUS MANUFACTURING--1.0%
--------------------------------------------------------------------------------
Applied Films* 69,550 $ 1,887
---------
Total Miscellaneous manufacturing 1,887
---------
--------------------------------------------------------------------------------
PETROLEUM/FUEL PRODUCTS & SERVICEs--3.6%
--------------------------------------------------------------------------------
HS Resources* 49,900 1,678
Key Energy Services* 116,080 1,139
Mallon Resources* 125,000 781
NATCO Group, Cl A* 107,010 930
Patina Oil & Gas 107,280 2,146
---------
Total Petroleum/fuel products & services 6,674
---------
--------------------------------------------------------------------------------
PHOTOGRAPHIC EQUIPMENT--1.0%
--------------------------------------------------------------------------------
Concord Camera* 76,040 1,949
---------
Total Photographic equipment 1,949
---------
--------------------------------------------------------------------------------
RETAIL--10.8%
--------------------------------------------------------------------------------
Buca* 97,640 1,037
California Pizza Kitchen* 62,810 1,759
Chico's FAS* 56,050 1,906
Christopher & Banks* 124,785 4,851
HOT Topic* 61,120 1,834
Pacific Sunwear of California* 88,930 1,667
Tweeter Home Entertainment Group* 50,210 1,823
Ugly Duckling* 94,500 549
Ultimate Electronics* 87,270 3,589
Wilsons Leather Experts* 69,540 1,256
---------
Total Retail 20,271
---------
--------------------------------------------------------------------------------
SEMICONDUCTORS/INSTRUMENTS--7.1%
--------------------------------------------------------------------------------
AstroPower* 26,140 1,036
Cerprobe* 78,610 1,159
FSI International* 131,070 1,868
Icos Vision Systems* 51,150 1,550
Metalink Ltd.* 60,070 1,111
Pericom Semiconductor* 50,620 1,901
Richardson Electronics Ltd. 126,120 2,113
Ultratech Stepper* 8,680 139
Zoran* 48,090 2,344
---------
Total Semiconductors/instruments 13,221
---------
36 | TURNER FUNDS 2000 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER MICRO CAP GROWTH FUND
Value
Shares (000)
--------------------------------------------------------------------------------
SOFTWARE & PROGRAMMING--3.1%
--------------------------------------------------------------------------------
AremisSoft* 28,630 $ 1,074
Caminus* 66,200 2,631
DSET* 48,800 1,007
SignalSoft* 27,270 1,108
---------
Total Software & programming 5,820
---------
--------------------------------------------------------------------------------
STORAGE/WAREHOUSING--1.0%
--------------------------------------------------------------------------------
Mobile Mini* 98,630 1,899
---------
Total Storage/warehousing 1,899
---------
--------------------------------------------------------------------------------
TECHNOLOGY--0.8%
--------------------------------------------------------------------------------
Celeritek* 38,000 1,432
---------
Total Technology 1,432
---------
--------------------------------------------------------------------------------
TELEPHONES & TELECOMMUNICATIONS--1.9%
--------------------------------------------------------------------------------
Arguss Communications* 54,040 1,104
Lightbridge* 51,150 595
Symmetricom* 114,945 1,796
---------
Total Telephones & telecommunications 3,495
---------
--------------------------------------------------------------------------------
TRANSPORTATION SERVICES--1.3%
--------------------------------------------------------------------------------
Navigant International* 85,550 898
OMI* 183,360 1,536
---------
Total Transportation services 2,434
---------
--------------------------------------------------------------------------------
UTILITIES/COMMUNICATIONS--1.0%
--------------------------------------------------------------------------------
Artesian Resources, Cl A 9,500 222
NUI 52,020 1,570
---------
Total Utilities/communications 1,792
---------
--------------------------------------------------------------------------------
WHOLESALE--2.3%
--------------------------------------------------------------------------------
Advanced Marketing Services 58,450 1,030
Bell Microproducts* 44,330 1,385
Jaco Electronics* 126,800 1,902
---------
Total Wholesale 4,317
---------
--------------------------------------------------------------------------------
WIRELESS EQUIPMENT--0.4%
--------------------------------------------------------------------------------
Floware Wireless Systems Ltd.* 32,260 803
---------
Total Wireless equipment 803
---------
--------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $131,248) 176,039
--------------------------------------------------------------------------------
Face Amount Value
(000) (000)
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT--4.0%
--------------------------------------------------------------------------------
JP Morgan
6.650%, dated 09/29/00, matures
10/02/00, repurchase price $7,498,439
(collateralized by GNMA, total par
value $8,873,996, 6.500%, matures
12/15/28, total maket
value $7,646,996) $7,497 $ 7,497
--------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $7,497) 7,497
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL INVESTMENTS--98.1%
(COST $138,745) 183,536
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET--1.9% 3,571
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET ASSETS:
--------------------------------------------------------------------------------
Portfolio capital (unlimited authorization--
no par value) based on 4,075,001
outstanding shares of beneficial interest 124,012
Accumulated net realized gain on investments 18,304
Net unrealized appreciation on investments 44,791
--------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $187,107
--------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE $45.92
*Non-income producing security
Cl - Class
GNMA - Government National Mortgage Association
Ltd. - Limited
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2000 ANNUAL REPORT | 37
<PAGE>
FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER TOP 20 FUND
September 30, 2000
Value
Shares (000)
--------------------------------------------------------------------------------
COMMON STOCKS--98.1%
--------------------------------------------------------------------------------
COMPUTERS & SERVICES--13.8%
--------------------------------------------------------------------------------
Brocade Communications System* 49,140 $ 11,597
Sun Microsystems* 105,260 12,289
Veritas Software* 71,560 10,161
---------
Total Computers & services 34,047
---------
--------------------------------------------------------------------------------
DRUGS--3.1%
--------------------------------------------------------------------------------
Medimmune* 99,170 7,661
---------
Total Drugs 7,661
---------
--------------------------------------------------------------------------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT--4.4%
--------------------------------------------------------------------------------
Celestica* 156,040 10,806
---------
Total Electronic & other electrical
equipment 10,806
---------
--------------------------------------------------------------------------------
FIBER OPTICS--13.6%
--------------------------------------------------------------------------------
CIENA* 98,660 12,117
Corning 42,120 12,510
Sycamore Networks* 81,800 8,834
---------
Total Fiber optics 33,461
---------
--------------------------------------------------------------------------------
INTERNET SERVICES--12.2%
--------------------------------------------------------------------------------
Ariba* 65,580 9,395
Commerce One* 163,680 12,849
VeriSign* 39,130 7,926
---------
Total Internet services 30,170
---------
--------------------------------------------------------------------------------
NETWORKING PRODUCTS & SERVICES--14.9%
--------------------------------------------------------------------------------
Cisco Systems* 350,470 19,363
Juniper Networks* 58,070 12,714
Turnstone Systems* 101,300 4,698
---------
Total Networking products & services 36,775
---------
--------------------------------------------------------------------------------
SEMICONDUCTORS/INSTRUMENTS--18.8%
--------------------------------------------------------------------------------
Applied Micro Circuits* 60,280 12,482
Broadcom, Cl A* 45,740 11,149
PMC-Sierra* 55,680 11,985
Xilinx* 127,240 10,895
---------
Total Semiconductors/instruments 46,511
---------
Shares/face Value
amount (000) (000)
--------------------------------------------------------------------------------
SOFTWARE & PROGRAMMING--7.3%
--------------------------------------------------------------------------------
I2 Technologies* 54,130 $ 10,126
Siebel Systems* 70,860 7,888
---------
Total Software & programming 18,014
---------
--------------------------------------------------------------------------------
TELEPHONES & TELECOMMUNICATIONS--10.0%
--------------------------------------------------------------------------------
Nokia ADR 254,090 10,116
Nortel Networks 243,730 14,517
---------
Total Telephones & telecommunications 24,633
---------
--------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $240,258) 242,078
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT--2.9%
--------------------------------------------------------------------------------
JP Morgan
6.650%, dated 09/29/00, matures
10/02/00, repurchase price $7,099,066
(collateralized by GNMA, total par
value $8,363,432, 6.500%, matures
01/15/28-12/15/28, total
maket value $7,239,710) $7,098 7,098
--------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $7,098) 7,098
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL INVESTMENTS--101.0%
(COST $247,356) 249,176
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET--(1.0%) (2,555)
--------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $246,621
* Non-income producing security
ADR - American Depository Receipt
Cl - Class
GNMA - Government National Mortgage Association
The accompanying notes are an integral part of the financial statements.
38 | TURNER FUNDS 2000 ANNUAL REPORT
SCHEDULE OF INVESTMENTS
TURNER TECHNOLOGY FUND
September 30, 2000
Value
Shares (000)
--------------------------------------------------------------------------------
COMMON STOCKS--99.5%
--------------------------------------------------------------------------------
COMPUTERS & SERVICES--14.5%
--------------------------------------------------------------------------------
Brocade Communications System* 16,330 $ 3,854
EMC-Mass* 41,630 4,127
Redback Networks* 21,510 3,528
StorageNetworks* 40,080 4,096
Sun Microsystems* 43,170 5,040
Veritas Software* 27,450 3,898
---------
Total Computers & services 24,543
---------
--------------------------------------------------------------------------------
DRUGS--3.5%
--------------------------------------------------------------------------------
Medimmune* 66,120 5,108
Shire Pharmaceuticals ADR* 17,270 891
---------
Total Drugs 5,999
---------
--------------------------------------------------------------------------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT--6.4%
--------------------------------------------------------------------------------
Celestica* 56,290 3,898
Flextronics International Ltd.* 41,500 3,408
Jabil Circuit* 61,050 3,465
---------
Total Electronic & other electrical
equipment 10,771
---------
--------------------------------------------------------------------------------
FIBER OPTICS--10.9%
--------------------------------------------------------------------------------
CIENA* 39,170 4,810
Corning 19,330 5,741
Newport 15,350 2,445
Sycamore Networks* 50,260 5,428
---------
Total Fiber optics 18,424
---------
--------------------------------------------------------------------------------
INTERNET SERVICES--9.7%
--------------------------------------------------------------------------------
@Road* 29,170 210
Ariba* 23,550 3,374
Clarent* 105,220 4,143
Commerce One* 61,900 4,859
VeriSign* 18,820 3,812
---------
Total Internet services 16,398
---------
--------------------------------------------------------------------------------
MEDICAL PRODUCTS & SERVICES--2.1%
--------------------------------------------------------------------------------
Millennium Pharmaceuticals* 24,120 3,523
---------
Total Medical products & services 3,523
---------
--------------------------------------------------------------------------------
NETWORKING PRODUCTS & SERVICES--14.9%
--------------------------------------------------------------------------------
Cisco Systems* 153,160 8,462
Corvis* 45,160 2,757
Extreme Networks* 41,090 4,705
Value
Shares (000)
--------------------------------------------------------------------------------
Juniper Networks* 24,600 $ 5,386
Oni Systems* 46,340 4,000
---------
Total Networking products & services 25,310
---------
--------------------------------------------------------------------------------
SEMICONDUCTORS/INSTRUMENTS--15.4%
--------------------------------------------------------------------------------
Applied Micro Circuits* 19,130 3,961
Broadcom, Cl A* 15,660 3,817
Cree* 28,700 3,336
Globespan* 38,070 4,644
Marvell Technology Group Ltd.* 20,780 1,603
PMC-Sierra* 23,070 4,966
Xilinx* 44,790 3,835
---------
Total Semiconductors/instruments 26,162
---------
--------------------------------------------------------------------------------
SOFTWARE & PROGRAMMING--8.8%
--------------------------------------------------------------------------------
BEA Systems* 59,280 4,616
I2 Technologies* 35,960 6,727
Siebel Systems* 31,800 3,540
---------
Total Software & programming 14,883
---------
--------------------------------------------------------------------------------
TELEPHONES & TELECOMMUNICATIONS--10.7%
--------------------------------------------------------------------------------
Nokia ADR 97,800 3,894
Nortel Networks 120,820 7,196
Sonus Networks* 24,430 3,087
Terayon* 114,010 3,869
---------
Total Telephones & telecommunications 18,046
---------
--------------------------------------------------------------------------------
WIRELESS EQUIPMENT--2.6%
--------------------------------------------------------------------------------
Aether Systems* 41,640 4,393
---------
Total Wireless equipment 4,393
---------
--------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $165,461) 168,452
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL INVESTMENTS--99.5%
(COST $165,461) 168,452
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET--0.5% 901
--------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $169,353
--------------------------------------------------------------------------------
* Non-income producing security
ADR - American Depository Receipt
Cl - Class
Ltd. - Limited
The accompanying notes are an integral part of the financial statements.
Turner funds 2000 annual Report | 39
<PAGE>
FINANCIAL STATEMENTS
SCHEDULE OF INVESTMENTS
TURNER B2B E-COMMERCE FUND
September 30, 2000
Value
Shares (000)
--------------------------------------------------------------------------------
COMMON STOCKS--82.5%
--------------------------------------------------------------------------------
BROADCASTING, NEWSPAPERS & ADVERTISING--1.6%
--------------------------------------------------------------------------------
Getty Images* 7,340 $ 223
--------
Total Broadcasting, newspapers &
advertising 223
--------
--------------------------------------------------------------------------------
COMPUTERS & SERVICES--10.3%
--------------------------------------------------------------------------------
EMC-Mass* 2,360 234
McData, Cl B* 2,080 256
StorageNetworks* 2,840 290
Sun Microsystems* 2,960 346
Veritas Software* 2,080 295
--------
Total Computers & services 1,421
--------
--------------------------------------------------------------------------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT--7.6%
--------------------------------------------------------------------------------
Celestica* 4,020 278
Flextronics International Ltd.* 2,500 205
Jabil Circuit* 5,690 323
Sanmina* 2,570 241
--------
Total Electronic & other electrical
equipment 1,047
--------
--------------------------------------------------------------------------------
FINANCIAL SERVICES--1.5%
--------------------------------------------------------------------------------
American Express 3,280 199
--------
Total Financial services 199
--------
--------------------------------------------------------------------------------
INTERNET SERVICES--35.5%
--------------------------------------------------------------------------------
@Road* 20,000 144
Agile Software* 3,560 320
America Online* 6,360 342
Ariba* 2,090 299
Art Technology Group* 3,150 299
Click Commerce* 7,530 322
Commerce One* 6,100 479
Freemarkets* 3,630 207
Matrixone* 6,130 245
Niku* 12,890 314
PurchasePro.com* 3,300 290
Support.com* 7,650 234
Tibco Software* 4,630 391
Vastera* 13,670 301
VeriSign* 1,160 235
VerticalNet* 5,650 199
webMethods* 2,210 254
--------
Total Internet services 4,875
--------
Shares/face Value
amount (000) (000)
--------------------------------------------------------------------------------
NETWORKING PRODUCTS & SERVICES--5.6%
--------------------------------------------------------------------------------
Cisco Systems* 6,770 $ 374
Inrange Technologies, Cl B* 3,660 194
Network Appliance* 1,630 208
--------
Total Networking products & services 776
--------
--------------------------------------------------------------------------------
SOFTWARE & PROGRAMMING--19.2%
--------------------------------------------------------------------------------
BEA Systems* 4,190 326
Check Point Software Technologies* 1,560 246
Descartes Systems Group* 5,130 254
I2 Technologies* 1,850 346
Intuit* 6,780 387
Manugistics Group* 2,210 217
Mercury Interactive* 2,170 340
Rational Software* 4,560 316
Siebel Systems* 1,840 205
--------
Total Software & programming 2,637
--------
--------------------------------------------------------------------------------
TRANSPORTATION SERVICES--1.2%
--------------------------------------------------------------------------------
United Parcel Service, Cl B 2,910 164
--------
Total Transportation services 164
--------
--------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $9,453) 11,342
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT--3.1%
--------------------------------------------------------------------------------
JP Morgan
6.650%, dated 09/29/00, matures
10/02/00, repurchase price $422,323
(collateralized by GNMA, total par
value $500,889, 6.500%, matures
11/15/28, total maket value $430,690) $422 422
--------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $422) 422
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL INVESTMENTS--85.6%
(COST $9,875) 11,764
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET--14.4% 1,986
--------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $13,750
--------------------------------------------------------------------------------
*Non-income producing security
Cl - Class
GNMA - Government National Mortgage Association
Ltd. - Limited
The accompanying notes are an integral part of the financial statements.
40 | TURNER FUNDS 2000 ANNUAL REPORT
SCHEDULE OF INVESTMENTS
TURNER WIRELESS & COMMUNICATIONS FUND
September 30, 2000
Value
Shares (000)
--------------------------------------------------------------------------------
COMMON STOCKS--97.1%
--------------------------------------------------------------------------------
COMPUTERS & SERVICES--6.1%
--------------------------------------------------------------------------------
Brocade Communications System* 1,960 $ 463
Redback Networks* 3,400 558
StorageNetworks* 4,550 465
--------
Total Computers & services 1,486
--------
--------------------------------------------------------------------------------
FIBER OPTICS--10.8%
--------------------------------------------------------------------------------
CIENA* 5,920 727
Corning 2,300 683
Exfo Electro Optical Engineering* 11,460 499
Sycamore Networks* 6,490 701
--------
Total Fiber optics 2,610
--------
--------------------------------------------------------------------------------
INTERNET SERVICES--7.1%
--------------------------------------------------------------------------------
@Road* 40,000 288
Clarent* 10,790 425
Phone.com* 5,160 586
Software.Com* 2,360 428
--------
Total Internet services 1,727
--------
--------------------------------------------------------------------------------
NETWORKING PRODUCTS & SERVICES--17.9%
--------------------------------------------------------------------------------
Cisco Systems* 11,910 658
Corvis* 7,640 466
Extreme Networks* 5,570 638
Juniper Networks* 3,460 758
Micromuse* 3,280 659
Oni Systems* 9,030 779
Turnstone Systems* 8,400 390
--------
Total Networking products & services 4,348
--------
--------------------------------------------------------------------------------
SEMICONDUCTORS/INSTRUMENTS--27.9%
--------------------------------------------------------------------------------
Alpha Industries* 16,790 572
Applied Micro Circuits* 3,000 621
Broadcom, Cl A* 2,290 558
Cree* 5,370 624
Globespan* 3,860 471
Intersil Holding* 15,520 774
Marvell Technology Group Ltd.* 3,740 288
PMC-Sierra* 2,760 594
Transwitch* 15,290 975
Triquint Semiconductor* 15,600 568
Vitesse Semiconductor* 8,250 734
--------
Total Semiconductors/instruments 6,779
--------
Shares/face Value
amount (000) (000)
--------------------------------------------------------------------------------
SOFTWARE & PROGRAMMING--2.8%
--------------------------------------------------------------------------------
Research In Motion Ltd.* 6,870 $ 677
--------
Total Software & programming 677
--------
--------------------------------------------------------------------------------
TELEPHONES & TELECOMMUNICATIONS--14.2%
--------------------------------------------------------------------------------
Anaren Microwave* 4,810 652
Comverse Technology* 7,080 765
Cosine Communications* 5,070 282
Nokia ADR 14,930 594
Nortel Networks 11,710 698
Sonus Networks* 3,530 446
--------
Total Telephones & telecommunications 3,437
--------
--------------------------------------------------------------------------------
Wireless equipment--10.3%
--------------------------------------------------------------------------------
Aether Systems* 8,580 905
Palm* 17,860 946
Powerwave Technologies* 17,130 650
--------
Total Wireless equipment 2,501
--------
--------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $22,030) 23,565
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT--4.3%
--------------------------------------------------------------------------------
JP Morgan
6.650%, dated 09/29/00, matures
10/02/00, repurchase price
$1,051,752 (collateralized by
GNMA, total par value $1,247,413,
6.500%, matures 11/15/28, total
maket value $1,072,589) $1,051 1,051
--------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $1,051) 1,051
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL INVESTMENTS--101.4%
(COST $23,081) 24,616
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET--(1.4%) (344)
--------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $24,272
--------------------------------------------------------------------------------
* Non-income producing security
ADR - American Depository Receipt
Cl - Class
GNMA - Government National Mortgage Association
Ltd. - Limited
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2000 ANNUAL REPORT | 41
<PAGE>
FINANCIAL STATEMENTS
SCHEDULE OF INVESTMENTS
TURNER GLOBAL TOP 40 FUND
September 30, 2000
Value
Shares (000)
--------------------------------------------------------------------------------
COMMON STOCKS--99.2%
--------------------------------------------------------------------------------
BANKS--1.6%
--------------------------------------------------------------------------------
Bank of Tokyo-Mitsubishi Ltd. ADR 16,820 $ 197
--------
Total Banks 197
--------
--------------------------------------------------------------------------------
COMPUTERS & SERVICES--7.6%
--------------------------------------------------------------------------------
Brocade Communications System* 1,450 342
Sun Microsystems* 2,330 272
Veritas Software* 2,130 302
--------
Total Computers & services 916
--------
--------------------------------------------------------------------------------
DRUGS--4.5%
--------------------------------------------------------------------------------
Biovail* 2,240 182
Medimmune* 2,470 191
Teva Pharmaceutical Industries ADR 2,340 171
--------
Total Drugs 544
--------
--------------------------------------------------------------------------------
ELECTRICAL SERVICES--0.4%
--------------------------------------------------------------------------------
Independent Energy Holdings ADR* 20,530 51
--------
Total Electrical services 51
--------
--------------------------------------------------------------------------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT--5.9%
--------------------------------------------------------------------------------
Celestica* 5,060 350
Flextronics International Ltd.* 4,400 361
--------
Total Electronic & other electrical
equipment 711
--------
--------------------------------------------------------------------------------
ENERGY--1.3%
--------------------------------------------------------------------------------
Ballard Power Systems* 1,440 157
--------
Total Energy 157
--------
--------------------------------------------------------------------------------
FIBER OPTICS--10.5%
--------------------------------------------------------------------------------
CIENA* 2,420 297
Corning 1,340 398
Sycamore Networks* 2,060 223
Tycom Ltd.* 8,970 344
--------
Total Fiber optics 1,262
--------
--------------------------------------------------------------------------------
HOTELS & AMUSEMENT SERVICES--2.1%
--------------------------------------------------------------------------------
Four Seasons Hotels 3,400 249
--------
Total Hotels & amusement services 249
--------
Value
Shares (000)
--------------------------------------------------------------------------------
INSURANCE--2.1%
--------------------------------------------------------------------------------
Manulife Financial 12,170 $ 253
--------
Total Insurance 253
--------
--------------------------------------------------------------------------------
INTERNET SERVICES--6.9%
--------------------------------------------------------------------------------
Ariba* 1,760 252
Commerce One* 4,410 346
VeriSign* 1,190 241
--------
Total Internet services 839
--------
--------------------------------------------------------------------------------
INVESTMENT MANAGEMENT SERVICES--2.1%
--------------------------------------------------------------------------------
Amvescap ADR 2,310 256
--------
Total Investment management services 256
--------
--------------------------------------------------------------------------------
MEDICAL PRODUCTS & SERVICES--1.6%
--------------------------------------------------------------------------------
Qiagen* 4,160 196
--------
Total Medical products & services 196
--------
--------------------------------------------------------------------------------
MULITMEDIA--1.9%
--------------------------------------------------------------------------------
Reuters Group ADR 2,080 234
--------
Total Mulitmedia 234
--------
--------------------------------------------------------------------------------
NETWORKING PRODUCTS & SERVICES--8.5%
--------------------------------------------------------------------------------
Cisco Systems* 9,320 515
Corvis* 570 35
Juniper Networks* 1,640 359
Turnstone Systems* 2,560 119
--------
Total Networking products & services 1,028
--------
--------------------------------------------------------------------------------
SEMICONDUCTORS/INSTRUMENTS--10.0%
--------------------------------------------------------------------------------
Applied Micro Circuits* 1,610 333
Broadcom, Cl A* 1,250 305
PMC-Sierra* 1,290 278
Xilinx* 3,380 289
--------
Total Semiconductors/instruments 1,205
--------
--------------------------------------------------------------------------------
SOFTWARE & PROGRAMMING--9.9%
--------------------------------------------------------------------------------
Check Point Software Technologies* 2,690 424
Descartes Systems Group* 4,900 243
I2 Technologies* 1,580 296
Siebel Systems* 2,050 228
--------
Total Software & programming 1,191
--------
42 | TURNER FUNDS 2000 ANNUAL REPORT
<PAGE>
SCHEDULE OF INVESTMENTS
TURNER GLOBAL TOP 40 FUND
Value
Shares (000)
--------------------------------------------------------------------------------
TELEPHONES & TELECOMMUNICATIONS--16.1%
--------------------------------------------------------------------------------
China Mobile (Hong Kong)
Ltd. ADR* 9,100 $ 295
Deutsche Telekom ADR* 7,340 251
Global Crossing Ltd.* 10,540 327
Microcell Telecommunications* 4,750 138
Nokia ADR 6,430 256
Nortel Networks 7,310 435
Telefonos de Mexico ADR 4,660 248
--------
Total Telephones & telecommunications 1,950
--------
--------------------------------------------------------------------------------
THERAPEUTICS--2.1%
--------------------------------------------------------------------------------
Celltech Group ADR* 6,470 253
--------
Total Therapeutics 253
--------
--------------------------------------------------------------------------------
TRANSPORTATION SERVICES--1.9%
--------------------------------------------------------------------------------
Canadian Pacific Ltd. 8,710 227
--------
Total Transportation services 227
--------
Value
Shares (000)
--------------------------------------------------------------------------------
UTILITIES/COMMUNICATIONS--2.2%
--------------------------------------------------------------------------------
Teekay Shipping 5,530 $ 260
--------
Total Utilities/communications 260
--------
--------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $11,612) 11,979
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL INVESTMENTS--99.2%
(COST $11,612) 11,979
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET--0.8% 101
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $12,080
--------------------------------------------------------------------------------
* Non-income producing security
ADR - American Depository Receipt
Cl - Class
Ltd. - Limited
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2000 ANNUAL REPORT | 43
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER SELECT GROWTH EQUITY FUND
September 30, 2000
Value
Shares (000)
--------------------------------------------------------------------------------
COMMON STOCKS--99.9%
--------------------------------------------------------------------------------
AEROSPACE/DEFENSE EQUIPMENT--1.2%
--------------------------------------------------------------------------------
United Technologies 820 $ 57
--------
Total Aerospace/defense equipment 57
--------
--------------------------------------------------------------------------------
COMPUTERS & SERVICES--12.8%
--------------------------------------------------------------------------------
Brocade Communications System* 300 71
EMC-Mass* 2,260 224
Redback Networks* 270 44
Sun Microsystems* 1,560 182
Veritas Software* 540 77
--------
Total Computers & services 598
--------
--------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING--9.1%
--------------------------------------------------------------------------------
General Electric 7,360 425
--------
Total Diversified manufacturing 425
--------
--------------------------------------------------------------------------------
DRUGS--10.4%
--------------------------------------------------------------------------------
Abbott Laboratories 970 46
American Home Products 1,620 92
Medimmune* 710 55
Pfizer 5,172 232
Pharmacia 1,010 61
--------
Total Drugs 486
--------
--------------------------------------------------------------------------------
ELECTRICAL SERVICES--1.0%
--------------------------------------------------------------------------------
AES* 690 47
--------
Total Electrical services 47
--------
--------------------------------------------------------------------------------
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT--2.4%
--------------------------------------------------------------------------------
Celestica* 900 62
Flextronics International Ltd.* 590 49
--------
Total Electronic & other electrical
equipment 111
--------
--------------------------------------------------------------------------------
FIBER OPTICS--10.4%
--------------------------------------------------------------------------------
CIENA* 780 96
Corning 470 140
JDS Uniphase* 960 91
SDL* 150 46
Sycamore Networks* 580 63
Tycom Ltd.* 1,250 48
--------
Total Fiber optics 484
--------
Value
Shares (000)
--------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO--2.2%
--------------------------------------------------------------------------------
Anheuser-Busch 1,150 $ 49
Pepsico 1,140 52
--------
Total Food, beverage & tobacco 101
--------
--------------------------------------------------------------------------------
INSURANCE--1.1%
--------------------------------------------------------------------------------
American International Group 540 52
--------
Total Insurance 52
--------
--------------------------------------------------------------------------------
INTERNET SERVICES--7.6%
--------------------------------------------------------------------------------
America Online* 3,310 178
Ariba* 440 63
Commerce One* 620 49
VeriSign* 310 63
--------
Total Internet services 353
--------
--------------------------------------------------------------------------------
MEDICAL PRODUCTS & SERVICES--5.4%
--------------------------------------------------------------------------------
Amgen* 1,650 115
Genentech* 410 76
Millennium Pharmaceuticals* 400 58
--------
Total Medical products & services 249
--------
--------------------------------------------------------------------------------
MULITMEDIA--2.1%
--------------------------------------------------------------------------------
Time Warner 1,250 98
--------
Total Mulitmedia 98
--------
--------------------------------------------------------------------------------
NETWORKING PRODUCTS & SERVICES--13.1%
--------------------------------------------------------------------------------
Cisco Systems* 8,130 449
Corvis* 330 20
Juniper Networks* 440 96
Network Appliance* 370 47
--------
Total Networking products & services 612
--------
--------------------------------------------------------------------------------
PIPELINEs--1.4%
--------------------------------------------------------------------------------
Enron 720 63
--------
Total Pipelines 63
--------
--------------------------------------------------------------------------------
SEMICONDUCTORS/INSTRUMENTS--5.4%
--------------------------------------------------------------------------------
Applied Micro Circuits* 300 62
Broadcom, Cl A* 300 73
PMC-Sierra* 290 62
Xilinx* 630 54
--------
Total Semiconductors/instruments 251
--------
44 | TURNER FUNDS 2000 ANNUAL REPORT
<PAGE>
STATEMENT OF NET ASSETS
TURNER SELECT GROWTH EQUITY FUND
Shares/face Value
amount (000) (000)
--------------------------------------------------------------------------------
SOFTWARE & PROGRAMMING--9.5%
--------------------------------------------------------------------------------
BEA Systems* 760 $ 59
Check Point Software Technologies* 310 49
I2 Technologies* 400 75
Oracle* 2,300 181
Siebel Systems* 690 77
--------
Total Software & programming 441
--------
--------------------------------------------------------------------------------
TELEPHONES & TELECOMMUNICATIONS--3.9%
--------------------------------------------------------------------------------
Nokia ADR 2,360 94
Nortel Networks 1,430 85
--------
Total Telephones & telecommunications 179
--------
--------------------------------------------------------------------------------
WIRELESS EQUIPMENT--0.9%
--------------------------------------------------------------------------------
Palm* 800 42
--------
Total Wireless equipment 42
--------
--------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(COST $4,597) 4,649
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT--0.5%
--------------------------------------------------------------------------------
Morgan Stanley Dean Witter
6.300%, dated 09/29/00, matures
10/02/00, repurchase price $25,420
(collateralized by U.S. Treasury Bond,
total par value $25,369, 9.875%,
matures 11/15/15, total maket
value $26,052) $25 25
--------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $25) 25
--------------------------------------------------------------------------------
VALUE
(000)
--------------------------------------------------------------------------------
TOTAL INVESTMENTS--100.4%
(COST $4,622) $4,674
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET--(0.4%)
--------------------------------------------------------------------------------
Investment securities purchased (246)
Other assets & liabilities, net 228
--------------------------------------------------------------------------------
TOTAL OTHER ASSETS & LIABILITIES, NET (18)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET ASSETS:
--------------------------------------------------------------------------------
Portfolio capital (unlimited authorization--
no par value) based on 474,403
outstanding shares of beneficial interest 4,997
Accumulated net realized loss on investments (393)
Net unrealized appreciation on investments 52
--------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $4,656
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE $9.81
--------------------------------------------------------------------------------
* Non-income producing security
ADR - American Depository Receipt
Cl-- Class
Ltd. - Limited
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2000 ANNUAL REPORT | 45
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER SHORT DURATION GOVERNMENT FUNDS-
ONE YEAR PORTFOLIO
September 30, 2000
Face amount Value
(000) (000)
--------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS--12.2%
--------------------------------------------------------------------------------
U.S. Treasury Note
8.000%, 05/15/01 $1,000 $ 1,010
U.S. Treasury Note (A)
3.625%, 07/15/02 3,788 3,785
--------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $4,729) 4,795
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS--14.8%
--------------------------------------------------------------------------------
FHLMC (C)
6.770%, 05/24/01 4,000 3,840
FNMA, MTN
6.290%, 09/11/01 2,000 1,993
--------------------------------------------------------------------------------
Total U.S. Government agency obligations
(Cost $5,808) 5,833
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT MORTGAGE-BACKED
SECURITIES--37.9%
--------------------------------------------------------------------------------
FHLMC
Pool #184967
7.750%, 08/01/08 278 281
FHLMC CMO/REMIC
Ser 1106, Cl E
7.500%, 07/15/06 88 88
Ser 1361, Cl D
6.000%, 11/15/05 68 68
Ser 1416, Cl PG
6.500%, 07/15/18 143 142
Ser 1430, Cl G
7.000%, 10/15/18 35 35
Ser 1434, Cl G
6.750%, 03/15/19 310 309
Ser 1457, Cl PH
7.000%, 06/15/06 74 74
Ser 1465, Cl E
6.500%, 09/15/06 588 586
Ser 1501, Cl G
6.400%, 05/15/18 802 798
Ser 161, Cl F
9.500%, 06/15/06 62 63
Ser 1880, Cl PA
7.000%, 04/15/08 3,039 3,034
--------------------------------------------------------------------------------
Face amount Value
(000) (000)
--------------------------------------------------------------------------------
FHLMC CMO/REMIC (B)
Ser 1862, Cl FD
7.735%, 12/15/22 $ 65 $ 65
Ser 1900, Cl FA
7.175%, 03/15/09 60 60
FNMA
Pool #77593
8.000%, 09/01/13 342 350
FNMA CMO/REMIC
Ser 1997-5, Cl A
7.000%, 01/18/21 1,852 1,846
Ser 1998-44, Cl TB
6.000%, 01/18/08 448 445
Ser 1998-45, Cl PB
6.000%, 05/18/12 821 815
FNMA CMO/REMIC (B)
Ser 1993-76, Cl F
7.156%, 06/25/08 558 561
GNMA
Pool #8108
7.375%, 03/20/16 259 261
GNMA ARM (B)
Pool #8111
7.375%, 03/20/16 731 737
Pool #8254
6.750%, 08/20/17 844 852
Pool #8266
6.750%, 09/20/17 472 476
Pool #8287
7.125%, 11/20/17 266 269
Pool #8297
7.125%, 12/20/17 266 268
Pool #8321
7.375%, 02/20/18 720 726
Pool #8333
7.375%, 03/20/18 246 249
Pool #8345
7.375%, 04/20/18 310 313
Pool #8366
7.375%, 06/20/18 387 390
Pool #8392
6.750%, 08/20/18 240 242
Pool #8404
6.750%, 09/20/18 30 30
46 | TURNER FUNDS 2000 ANNUAL REPORt
STATEMENT OF NET ASSETS
TURNER SHORT DURATION GOVERNMENT FUNDS-
ONE YEAR PORTFOLIO
Face amount Value
(000) (000)
--------------------------------------------------------------------------------
Pool #8405
6.750%, 09/20/18 $ 68 $ 68
Pool #8462
7.375%, 02/20/19 35 35
Pool #8489
7.375%, 04/20/19 344 347
--------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT MORTGAGE-
BACKED SECURITIES (COST $14,849) 14,883
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--13.7%
--------------------------------------------------------------------------------
CREDIT CARDS--1.1%
--------------------------------------------------------------------------------
Dayton Hudson Credit Card
Master Trust,
Ser 1, Cl A
6.250%, 08/25/05 390 387
Fleet Credit Card Master Trust,
Ser 1998-A, Cl A
6.661%, 07/15/03 40 40
--------
Total Credit cards 427
--------
--------------------------------------------------------------------------------
MORTGAGE RELATED--12.6%
--------------------------------------------------------------------------------
BA Mortgage Securities, CMO,
Ser 2, Cl 2A1
7.250%, 10/25/27 478 477
Countrywide Funding,
Ser 13, Cl A4
6.500%, 06/25/09 108 107
GE Capital Mortgage Services,
Ser 11, Cl A2
6.000%, 07/25/29 500 491
Hyundai Auto Receivables Trust,
Ser A, Cl A2
6.050%, 07/15/04 632 628
Morgan Stanley Capital I,
Ser C1, Cl A1A
6.850%, 02/15/20 5 5
PeopleFirst.Com Auto Receivables
Owner Trust,
Ser 1, Cl A1
6.415%, 05/15/02 45 45
Face amount Value
(000) (000)
--------------------------------------------------------------------------------
Prudential Home Mortgage
Securities, CMO,
Ser 5, Cl A3
7.000%, 02/25/24 $1,200 $ 1,194
Residential Funding Mortgage
Securitization I,
Ser S39, Cl A8
7.500%, 11/25/07 484 485
WFS Financial Owner Trust,
Ser 2000-C, Cl A2
7.010%, 08/20/03 1,525 1,527
--------
Total Mortgage related 4,959
--------
--------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(COST $5,377) 5,386
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT--21.3%
--------------------------------------------------------------------------------
JP Morgan
6.650%, dated 09/29/00, matures
10/02/00, repurchase price $8,374,409
(collateralized by GNMA, total par
value $8,898,860, 6.500%-8.000%,
matures 10/15/28-09/15/30,
total maket value $8,540,320) 8,373 8,373
--------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $8,373) 8,373
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL INVESTMENTS--99.9%
(COST $39,136) 39,270
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET--0.1% 29
--------------------------------------------------------------------------------
TURNER FUNDS 2000 ANNUAL REPORT | 47
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER SHORT DURATION GOVERNMENT FUNDS-
ONE YEAR PORTFOLIO
Value
(000)
--------------------------------------------------------------------------------
NET ASSETS:
--------------------------------------------------------------------------------
Portfolio capital of class I shares
(unlimited authorization--no par value)
based on 3,021,247 outstanding shares
of beneficial interest $ 30,283
Portfolio capital of class II shares
(unlimited authorization--no par value)
based on 885,163 outstanding shares
of beneficial interest 8,935
Distributions in excess of net investment
income (47)
Accumulated net realized loss on investments (6)
Net unrealized appreciation on investments 134
--------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $39,299
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE--CLASS I $10.05
--------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE--CLASS II $10.09
--------------------------------------------------------------------------------
(A) TIP - Treasury inflation protection note
(B) Floating Rate Security - The rate reflected on the statement of net assets
is the rate in effect on September 30, 2000.
(C) Discount Note - The rate reflected on the statement of net assets is the
discount rate of the security at time of purchase.
ARM - Adjustable Rate Mortgage
Cl - Class
CMO - Collateralized Mortgage Obligation
FHLMC - Federal Home Loan Mortgage Association F
NMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
MTN - Medium Term Note
REMIC - Real Estate Mortgage Investment Conduit
Ser - Series
The accompanying notes are an integral part of the financial statements.
48 | TURNER FUNDS 2000 ANNUAL REPORT
<PAGE>
STATEMENT OF NET ASSETS
TURNER SHORT DURATION GOVERNMENT FUNDS-
THREE YEAR PORTFOLIO
September 30, 2000
Face amount Value
(000) (000)
--------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS--25.9%
--------------------------------------------------------------------------------
U.S. Treasury Notes
8.000%, 05/15/01 $4,311 $ 4,354
6.000%, 08/15/09 1,696 1,705
U.S. Treasury Notes (A)
3.625%, 07/15/02 6,523 6,519
--------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $12,427) 12,578
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS--0.7%
--------------------------------------------------------------------------------
FNMA, MTN
6.710%, 03/13/02 360 359
--------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $361) 359
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT MORTGAGE-BACKED
SECURITIES--53.4%
--------------------------------------------------------------------------------
FHLMC
Pool #C34889
7.500%, 12/01/29 391 391
Pool #G10288
6.000%, 09/01/09 330 321
Pool #G10446
6.500%, 02/01/11 690 677
FHLMC CMO/REMIC
Ser 1093, Cl F
7.500%, 06/15/06 299 301
Ser 1361, Cl D
6.000%, 11/15/05 89 88
Ser 1380, Cl K
6.750%, 10/15/07 648 646
Ser 1411, Cl G
6.500%, 07/15/18 203 202
Ser 1430, Cl G
7.000%, 10/15/18 91 91
Ser 1434, Cl G
6.750%, 03/15/19 310 309
Ser 1457, Cl PH
7.000%, 06/15/06 465 465
Ser 1465, Cl E
6.500%, 09/15/06 245 244
Ser 1501, Cl G
6.400%, 05/15/18 283 282
Face amount Value
(000) (000)
--------------------------------------------------------------------------------
Ser 161, Cl F
9.500%, 06/15/06 $ 1,405 $ 1,439
Ser 2043, Cl CD
6.000%, 09/15/16 570 562
FHLMC CMO/REMIC (B)
Ser 1862, Cl FD
7.735%, 12/15/22 351 351
Ser 1900, Cl FA
7.175%, 03/15/09 547 548
FNMA
Pool #250477
6.000%, 01/01/11 249 240
Pool #252209
6.000%, 02/01/19 1,147 1,088
Pool #303096
7.500%, 12/01/09 1,086 1,098
Pool #547823
8.000%, 07/01/30 802 812
Pool #551394
8.000%, 09/01/30 850 861
Pool #6222
9.000%, 04/01/16 231 242
Pool #7239
8.000%, 08/01/08 765 782
Pool #8245
8.000%, 12/01/08 466 476
FNMA CMO/REMIC
Ser 1991-133, Cl Z
8.000%, 09/25/06 2,030 2,063
Ser 1991-72, Cl G
8.000%, 07/25/06 247 252
Ser 1993-106, Cl D
6.650%, 12/25/11 1,000 995
Ser 1993-194, Cl PH
6.000%, 11/25/05 386 384
Ser 1998-36, Cl PA
6.250%, 07/18/13 831 825
Ser 1998-44, Cl TB
6.000%, 01/18/08 448 445
Ser 1998-45, Cl PB
6.000%, 05/18/12 821 815
GNMA
Pool #2707
5.500%, 01/20/14 68 64
TURNER FUNDS 2000 ANNUAL REPORT | 49
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER SHORT DURATION GOVERNMENT FUNDS-
THREE YEAR PORTFOLIO
Face amount Value
(000) (000)
--------------------------------------------------------------------------------
Pool #2802
5.500%, 07/20/14 $ 64 $ 59
Pool #2843
5.500%, 11/20/14 848 794
Pool #351122
6.500%, 07/15/08 478 472
Pool #357343
6.500%, 10/15/08 191 188
Pool #462486
6.500%, 01/15/13 1,306 1,264
Pool #68224
8.000%, 06/15/12 906 926
Pool #8108
7.375%, 03/20/16 1,146 1,156
GNMA ARM (B)
Pool #8254
6.750%, 08/20/17 794 800
Pool #8264
6.750%, 09/20/17 563 568
Pool #8266
6.750%, 09/20/17 606 611
Pool #8320
7.375%, 02/20/18 561 566
Pool #8426
7.125%, 11/20/18 167 169
--------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT MORTGAGE-
BACKED SECURITIES (COST $25,857) 25,932
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--17.8%
--------------------------------------------------------------------------------
CREDIT CARDS--2.9%
--------------------------------------------------------------------------------
Fleet Credit Card Master Trust,
Ser 1998-A, Cl A
6.661%, 07/15/03 1,400 1,400
--------
Total Credit cards 1,400
--------
--------------------------------------------------------------------------------
MORTGAGE RELATEd--14.9%
--------------------------------------------------------------------------------
BA Mortgage Securities, CMO,
Ser 2, Cl 2A1
7.250%, 10/25/27 478 477
GE Capital Mortgage Services,
Ser 11, Cl A2
6.000%, 07/25/29 1,000 983
Face amount Value
(000) (000)
--------------------------------------------------------------------------------
Goldman Sachs Mortgage Securities,
Ser C1, Cl A1
6.060%, 10/18/30 $ 897 $ 868
Hyundai Auto Receivables Trust,
Ser A, Cl A2
6.050%, 07/15/04 694 690
PeopleFirst.Com Auto Receivables
Owner Trust,
Ser 1, Cl A1
6.415%, 05/15/02 314 314
Prudential Home Mortgage
Securities, CMO,
Ser 5, Cl A3
7.000%, 02/25/24 950 945
Residential Funding Mortgage
Securitization I,
Ser S23, Cl A7
6.500%, 06/25/08 69 68
Residential Funding Mortgage
Securitization I,
Ser S39, Cl A8
7.500%, 11/25/07 484 485
Securitized Asset Sales,
Ser 7, Cl TA2
6.250%, 12/25/23 1,461 1,448
Structured Asset Securities, CMO,
Ser 2, Cl 1A
7.183%, 10/30/07 981 979
--------
Total Mortgage related 7,257
--------
--------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(COST $8,666) 8,657
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT--1.0%
--------------------------------------------------------------------------------
Morgan Stanley Dean Witter
6.300%, dated 09/29/00, matures
10/02/00, repurchase price $457,494
(collateralized by U.S. Treasury Note,
total par value $456,576, 9.875%,
matures 11/15/15, total maket
value $468,871) 457 457
--------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $457) 457
--------------------------------------------------------------------------------
50 | TURNER FUNDS 2000 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER SHORT DURATION GOVERNMENT FUNDS-
THREE YEAR PORTFOLIO
Value
(000)
--------------------------------------------------------------------------------
TOTAL INVESTMENTS--98.8%
(COST $47,768) $47,983
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET--1.2% 588
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET ASSETS:
--------------------------------------------------------------------------------
Portfolio capital of class I shares
(unlimited authorization--no par value)
based on 4,286,271 outstanding shares
of beneficial interest 42,404
Portfolio capital of class II shares
(unlimited authorization--no par value)
based on 662,198 outstanding shares
of beneficial interest 6,422
Distributions in excess of net investment
income (62)
Accumulated net realized loss on investments (408)
Net unrealized appreciation on investments 215
--------------------------------------------------------------------------------
Total net assets--100% $48,571
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE--CLASS I $9.82
--------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE--CLASS II $9.78
--------------------------------------------------------------------------------
(A) TIP - Treasury inflation protection note
(B) Floating Rate Security - The rate reflected on the statement of net assets
is the rate in effect on September 30, 2000.
ARM - Adjustable Rate Mortgage
Cl - Class
CMO - Collateralized Mortgage Obligation
FHLMC - Federal Home Loan Mortgage Association
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
MTN - Medium Term Note
REMIC - Real
Estate Mortgage Investment Conduit
Ser - Series The accompanying notes are an
integral part of the financial statements.
TURNER FUNDS 2000 ANNUAL REPORT | 51
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER CORE HIGH QUALITY FIXED INCOME FUND
September 30, 2000
Face amount Value
(000) (000)
--------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS--31.5%
--------------------------------------------------------------------------------
U.S. Treasury Bonds (C)
8.125%, 05/15/21 $ 950 $ 1,171
8.125%, 08/15/19 420 513
7.500%, 11/15/16 345 393
5.250%, 11/15/28 140 125
U.S. Treasury Notes (C)
7.000%, 07/15/06 1,083 1,139
U.S. Treasury Notes (A)
3.625%, 01/15/08 764 746
3.375%, 01/15/07 327 316
--------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $4,348) 4,403
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
U.S. GOVERNMENT MORTGAGE-BACKED
SECURITIES--57.5%
--------------------------------------------------------------------------------
FHLMC
Pool #C00784
6.000%, 06/01/29 581 544
Pool #C16814
7.500%, 10/01/28 339 338
FHLMC CMO/REMIC
Ser 1380, Cl K
6.750%, 10/15/07 168 168
Ser 1465, Cl E
6.500%, 09/15/06 195 194
Ser 1538, Cl J
6.500%, 06/15/08 160 156
Ser 161, Cl F
9.500%, 06/15/06 261 268
Ser 2097, Cl PX
6.000%, 10/15/27 258 239
FNMA
Pool #250477
6.000%, 01/01/11 70 67
Pool #323715
6.000%, 05/01/29 573 535
Pool #489836
6.000%, 06/01/14 861 828
Pool #514768
7.000%, 12/01/29 98 96
Pool #540607
7.500%, 06/01/30 110 110
Face amount Value
(000) (000)
--------------------------------------------------------------------------------
Pool #547015
8.000%, 07/01/30 $ 699 $ 708
Pool #551394
8.000%, 09/01/30 90 91
Pool #7239
8.000%, 08/01/08 619 632
Ser 53069, Cl 69
7.000%, 09/01/30 110 108
FNMA CMO/REMIC
Ser 1993-198, Cl K
6.000%, 12/25/22 834 781
Ser 1994-27, Cl PJ
6.500%, 06/25/23 680 657
Ser 1998-63, Cl PG
6.000%, 03/25/27 100 93
FNMA TBA
6.500%, 10/01/30 822 788
GNMA
Pool #505830
7.500%, 09/15/29 50 50
Pool #521378
6.745%, 10/15/39 100 95
GNMA ARM (B)
Pool #8103
7.375%, 02/20/16 209 211
Pool #8266
6.750%, 09/20/17 176 178
GNMA CMO/REMIC
Ser 2000-18, Cl PB
7.500%, 06/20/29 100 101
--------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT MORTGAGE-
BACKED SECURITIES (COST $7,978) 8,036
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--9.9%
--------------------------------------------------------------------------------
CREDIT CARDS--3.2%
--------------------------------------------------------------------------------
Dayton Hudson Credit Card
Master Trust,
Ser 1, Cl A
6.250%, 08/25/05 450 446
--------
446
--------
52 | TURNER FUNDS 2000 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER CORE HIGH QUALITY FIXED INCOME FUND
Face amount Value
(000) (000)
--------------------------------------------------------------------------------
MORTGAGE RELATED--6.7%
--------------------------------------------------------------------------------
Goldman Sachs Mortgage Securities,
Ser C1, Cl A1
6.060%, 10/18/30 $ 38 $ 37
PeopleFirst.Com Auto Receivables
Owner Trust,
Ser 1, Cl A1
6.415%, 05/15/02 90 90
Prudential Home Mortgage
Securities, CMO,
Ser 5, Cl A3
7.000%, 02/25/24 500 497
WFS Financial Owner Trust,
Ser 2000-C, Cl A2
7.010%, 08/20/03 310 310
--------
Total Mortgage related 934
--------
--------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(COST $1,379) 1,380
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CORPORATE OBLIGATION--1.6%
--------------------------------------------------------------------------------
Sprint Capital
6.125%, 11/15/08 250 227
--------------------------------------------------------------------------------
TOTAL CORPORATE OBLIGATION
(COST $231) 227
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT--4.1%
--------------------------------------------------------------------------------
Morgan Stanley Dean Witter
6.300%, dated 09/29/00, matures
10/02/00, repurchase price $579,373
(collateralized by U.S. Treasury Note,
total par value $578,211, 9.875%,
matures 11/15/15, total market
value $593,781) 579 579
--------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $579) 579
--------------------------------------------------------------------------------
Value
(000)
--------------------------------------------------------------------------------
TOTAL INVESTMENTS--104.6%
(COST $14,515) $14,625
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET--(4.6%) (650)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET ASSETS:
--------------------------------------------------------------------------------
Portfolio capital (unlimited authorization--
no par value) based on 1,399,658
outstanding shares of beneficial interest 14,173
Accumulated net realized loss on investments (308)
Net unrealized appreciation on investments 110
--------------------------------------------------------------------------------
Total net assets--100% $13,975
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE $9.98
--------------------------------------------------------------------------------
(A) TIP - Treasury inflation protection note
(B) Floating Rate Security - The rate reflected on the statement of net assets
is the rate in effect on September 30, 2000.
(C) Securities, or portion thereof, are pledged as collateral for TBA
securities.
ARM - Adjustable Rate Mortgage
Cl - Class
CMO - Collateralized Mortgage Obligation
FHLMC - Federal Home Loan Mortgage Association
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
REMIC - Real Estate Mortgage Investment
Conduit
Ser - Series
TBA - To Be Announced
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2000 ANNUAL REPORT | 53
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES (000)
<TABLE>
<CAPTION>
Turner Small Cap Turner
Growth Fund Top 20 Fund
-------------------------------------------
9/30/00 9/30/00
---------------------------------------------------------------------------------------------------------------------------
Assets:
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment securities at cost $ 479,553 $ 247,356
---------------------------------------------------------------------------------------------------------------------------
Investment securities at value 540,020 249,176
Receivable for investment securities sold 28,564 24,063
Receivable for capital shares sold 1,382 1,182
Dividend and interest receivable 80 28
Receivable due from adviser -- --
Other assets 31 12
---------------------------------------------------------------------------------------------------------------------------
Total assets 570,077 274,461
---------------------------------------------------------------------------------------------------------------------------
Liabilities:
Payable for investment securities purchased 40,487 27,381
Capital shares redeemed payable 171 68
Accrued expenses 52 134
Advisory fees payable 439 257
Cash overdraft -- --
---------------------------------------------------------------------------------------------------------------------------
Total liabilities 41,149 27,840
---------------------------------------------------------------------------------------------------------------------------
Net assets:
Portfolio capital 357,484 212,420
Accumulated net investment loss (4) --
Accumulated net realized gain (loss) on investments 110,981 32,381
Net unrealized appreciation on investments 60,467 1,820
---------------------------------------------------------------------------------------------------------------------------
Total net assets $ 528,928 $ 246,621
---------------------------------------------------------------------------------------------------------------------------
Outstanding shares of beneficial interest: 11,810,022 9,967,286
---------------------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per share $ 44.79 $ 24.74
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0
54 | TURNER FUNDS 2000 ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
Turner
Turner B2B Wireless & Turner
Turner E-Commerce Communications Global
Technology Fund Fund Fund Top 40 Fund
-----------------------------------------------------------------------------------------------------------------------------------
9/30/00 09/30/00 09/30/00 09/30/00
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 165,461 $ 9,875 $ 23,081 $ 11,612
-----------------------------------------------------------------------------------------------------------------------------------
168,452 11,764 24,616 11,979
39,553 382 1,492 2,579
2,473 1,986 428 39
27 -- 1 14
-- 4 -- --
13 13 13 3
-----------------------------------------------------------------------------------------------------------------------------------
210,518 14,149 26,550 14,614
-----------------------------------------------------------------------------------------------------------------------------------
36,759 390 2,259 1,606
2,799 -- -- 401
41 9 9 13
168 -- 10 1
1,398 -- -- 513
-----------------------------------------------------------------------------------------------------------------------------------
41,165 399 2,278 2,534
-----------------------------------------------------------------------------------------------------------------------------------
147,108 12,243 23,056 13,149
-- -- -- --
19,254 (382) (319) (1,436)
2,991 1,889 1,535 367
-----------------------------------------------------------------------------------------------------------------------------------
$ 169,353 $ 13,750 $ 24,272 $ 12,080
5,180,251 1,098,435 2,052,747 1,288,823
-----------------------------------------------------------------------------------------------------------------------------------
$ 32.69 $ 12.52 $ 11.82 $ 9.37
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2000 ANNUAL REPORT | 55
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
----------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (000)
Turner Turner Turner Turner
Midcap Small Cap Micro Cap Turner Technology
Growth Fund Growth Fund Growth Fund Top 20 Fund Fund
----------------------------------------------------------------------------------------------------------------------------------
year ended year ended year ended year ended year ended
9/30/00 9/30/00 9/30/00 9/30/00 9/30/00
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income:
Interest $ 1,560 $ 851 $ 436 $ 308 $ 175
Dividend 609 584 144 178 31
Foreign taxes withheld -- (9) -- (1) (2)
----------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 2,169 1,426 580 485 204
Expenses:
Investment advisory fees 4,660 4,470 1,252 1,714 1,037
Investment advisory fee waiver -- (13) (102) (135) (134)
Administrator fees 365 268 85 80 60
Administrator fee waiver -- -- -- -- --
Transfer agent fees 1,118 659 228 219 150
Registration fees 231 63 28 62 37
Professional fees 138 74 21 49 26
Printing fees 74 63 15 22 10
Custodian fees 53 34 50 19 21
Trustee fees 6 5 2 3 3
Amortization of deferred
organizational costs 5 4 3 -- --
Pricing fees 3 3 1 -- 1
Shareholder service fees -- -- -- -- --
Insurance and other fees 10 11 4 4 1
----------------------------------------------------------------------------------------------------------------------------------
Total expenses 6,663 5,641 1,587 2,037 1,212
Less: Reimbursement from adviser -- -- -- -- --
Directed brokerage (260) (56) (23) (345) (125)
----------------------------------------------------------------------------------------------------------------------------------
Net expenses 6,403 5,585 1,564 1,692 1,087
----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (4,234) (4,159) (984) (1,207) (883)
Net realized gain (loss) from
securities sold 73,899 117,610 19,298 36,086 20,737
Net unrealized appreciation on
investments 195,101 25,386 42,196 1,014 2,679
----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments 269,000 142,996 61,494 37,100 23,416
Net increase (decrease) in
net assets resulting
from operations $264,766 $138,837 $60,510 $35,893 $22,533
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Commenced operations on June 30, 2000.
(2) Commenced operations on June 14, 2000.
Amounts designated as "--" are either $0 or have been rounded to $0
The accompanying notes are an integral part of the financial statements.
56 | TURNER FUNDS 2000 ANNUAL REPORT
<TABLE>
<CAPTION>
Turner Turner Core
Turner B2B Wireless & Turner Turner High Quality
E-Commerce Communications Global Top 40 Select Growth One Year Three Year Fixed Income
Fund Fund Fund Equity Fund Portfolio Portfolio Fund
--------------------------------------------------------------------------------------------------------------------------
6/30/00 thru 6/30/00 thru 6/30/00 thru 6/14/00 thru year ended year ended year ended
9/30/00(1) 9/30/00(1) 9/30/00(1) 9/30/00(2) 9/30/00 9/30/00 9/30/00
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 9 $ 21 $ 11 $ 3 $1,322 $2,820 $ 764
1 -- 18 3 -- -- --
-- -- -- -- -- -- --
--------------------------------------------------------------------------------------------------------------------------
10 21 29 6 1,322 2,820 764
21 40 31 6 51 112 59
(21) (25) (19) (6) (51) (112) (59)
6 6 6 8 80 80 55
-- -- -- -- (15) (15) --
6 6 6 4 61 68 28
6 7 4 3 27 19 2
12 12 12 12 24 22 20
-- -- 1 -- 2 14 2
2 2 2 2 7 7 2
-- -- -- -- 2 2 2
-- -- -- -- -- -- --
-- -- -- -- 1 1 2
-- -- -- -- 19 12 --
-- 1 1 -- -- 2 --
--------------------------------------------------------------------------------------------------------------------------
32 49 44 29 208 212 113
(7) -- -- (21) (115) (40) (60)
-- -- -- -- -- -- --
--------------------------------------------------------------------------------------------------------------------------
25 49 44 8 93 172 53
--------------------------------------------------------------------------------------------------------------------------
(15) (28) (15) (2) 1,229 2,648 711
(382) (291) (1,436) (393) (5) (179) (202)
1,889 1,535 367 52 133 243 352
--------------------------------------------------------------------------------------------------------------------------
1,507 1,244 (1,069) (341) 128 64 150
$1,492 $1,216 $(1,084) $(343) $1,357 $2,712 $ 861
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
Turner funds 2000 annual Report | 57
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
-----------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (000)
Turner Midcap Turner Small Cap Turner Micro Cap
Growth Fund Growth Fund Growth Fund
-----------------------------------------------------------------------------------------------------------------------------------
year year year year year year
ended ended ended ended ended ended
9/30/00 9/30/99 9/30/00 9/30/99 9/30/00 9/30/99
-----------------------------------------------------------------------------------------------------------------------------------
Investment activities:
<S> <C> <C> <C> <C> <C> <C>
Net investment loss $ (4,234) $ (376) $ (4,159) $ (1,960) $ (984) $ (30)
Net realized gain (loss) from
securities sold 73,899 20,948 117,610 61,638 19,298 2,292
Net unrealized appreciation
on investments 195,101 10,401 25,386 30,895 42,196 2,652
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets resulting
from operations 264,766 30,973 138,837 90,573 60,510 4,914
-----------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
Net investment income -- -- -- -- -- --
Realized capital gains (20,897) -- (53,790) -- (2,225) --
-----------------------------------------------------------------------------------------------------------------------------------
Total distributions (20,897) -- (53,790) -- (2,225) --
-----------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:(5)
Proceeds from shares issued 1,109,065 127,616 295,246 87,818 334,443 6,101
Proceeds from shares issued in
lieu of cash distributions 19,905 -- 51,918 -- 1,957 --
Cost of shares redeemed (317,913) (34,341) (157,360) (71,848) (220,541) (895)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from
capital share transactions 811,057 93,275 189,804 15,970 115,859 5,206
Total increase in net assets 1,054,926 124,248 274,851 106,543 174,144 10,120
Net assets:
Beginning of year 148,830 24,582 254,077 147,534 12,963 2,843
-----------------------------------------------------------------------------------------------------------------------------------
End of year (4) $1,203,756 $148,830 $528,928 $254,077 $187,107 $12,963
-----------------------------------------------------------------------------------------------------------------------------------
(5) Shares issued and redeemed:
Issued 27,387 5,625 6,551 3,160 9,214 380
Issued in lieu of cash distributions 613 -- 1,386 -- 67 --
Redeemed (7,956) (1,567) (3,556) (2,596) (5,821) (53)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in capital shares 20,044 4,058 4,381 564 3,460 327
-----------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Commenced operations on June 30, 1999.
(2) Commenced operations on June 30, 2000.
(3) Commenced operations on June 14, 2000.
(4) Includes undistributed net investment income (loss) and/or distributions in excess of net investment income (000) of
$(2) and $(6) for the Midcap Growth Fund and $(4) and $(0) for the Small Cap Growth Fund as of September 30, 2000
and September 30, 1999, respectively.
</FN>
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0
The accompanying notes are an integral part of the financial statements.
58 | TURNER FUNDS 2000 ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
Turner
Turner B2B Wireless & Turner Turner
Turner Turner E-Commerce Communications Global Select Growth
Top 20 Fund Technology Fund Fund Fund Top 40 Fund Equity Fund
-----------------------------------------------------------------------------------------------------------------------------
year 6/30/99 year 6/30/99 6/30/00 6/30/00 6/30/00 6/14/00
ended thru ended thru thru thru thru thru
9/30/00 9/30/99 (1) 9/30/00 9/30/99 (1) 9/30/00 (2) 9/30/00 (2) 9/30/00 (2) 9/30/00 (3)
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ (1,207) $ (21) $ (883) $ (10) $ (15) $ (28) $ (15) $ (2)
36,086 2,562 20,737 1,278 (382) (291) (1,436) (393)
1,014 806 2,679 312 1,889 1,535 367 52
-----------------------------------------------------------------------------------------------------------------------------
35,893 3,347 22,533 1,580 1,492 1,216 (1,084) (343)
-----------------------------------------------------------------------------------------------------------------------------
-- -- -- -- -- -- -- --
(5,039) -- (1,868) -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------
(5,039) -- (1,868) -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------
286,659 13,557 260,904 7,914 15,745 26,061 17,221 5,144
4,896 -- 1,800 -- -- -- -- --
(91,900) (792) (122,312) (1,198) (3,487) (3,005) (4,057) (145)
-----------------------------------------------------------------------------------------------------------------------------
199,655 12,765 140,392 6,716 12,258 23,056 13,164 4,999
230,509 16,112 161,057 8,296 13,750 24,272 12,080 4,656
16,112 -- 8,296 -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------
$246,621 $16,112 $169,353 $8,296 $13,750 $24,272 $12,080 $4,656
-----------------------------------------------------------------------------------------------------------------------------
12,448 1,223 8,552 696 1,431 2,307 1,712 489
274 -- 84 -- -- -- -- --
(3,907) (71) (4,046) (106) (333) (254) (423) (15)
-----------------------------------------------------------------------------------------------------------------------------
8,815 1,152 4,590 590 1,098 2,053 1,289 474
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
TURNER FUNDS 2000 ANNUAL REPORT | 59
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN NET ASSETS (000)
Turner Short Duration Government Funds-
One Year Portfolio
-----------------------------------------------------------------------------------------------------------------------------------
year ended year ended
9/30/00 9/30/99
-----------------------------------------------------------------------------------------------------------------------------------
Investment activities:
<S> <C> <C>
Net investment income $ 1,229 $ 100
Net realized gain (loss) from securities sold (5) --
Net unrealized appreciation (depreciation) on investments 133 (1)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 1,357 99
Distributions to shareholders:
Net investment income
Class I(2) (822) (77)
Class II(3) (458) (25)
Realized capital gains
Class I(2) -- --
Class II(3) -- --
-----------------------------------------------------------------------------------------------------------------------------------
Total distributions (1,280) (102)
Capital share transactions: (5)
Class I(2)
Proceeds from shares issued 68,584 3,414
Proceeds from shares issued in lieu of cash distributions 771 76
Increase from in-kind transfers -- --
Cost of shares redeemed (42,274) (1,272)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from
Class I transactions 27,081 2,218
-----------------------------------------------------------------------------------------------------------------------------------
Class II(3)
Proceeds from shares issued 9,813 3,642
Proceeds from shares issued in lieu of cash distributions 417 23
Cost of shares redeemed (4,451) (509)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from Class II transactions 5,779 3,156
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from capital
share transactions 32,860 5,374
-----------------------------------------------------------------------------------------------------------------------------------
Total increase in net assets 32,937 5,371
-----------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of year 6,362 991
-----------------------------------------------------------------------------------------------------------------------------------
End of year (4) $39,299 $6,362
-----------------------------------------------------------------------------------------------------------------------------------
(5) Shares issued and redeemed: Class I(2)
Issued 6,838 340
Issued in lieu of cash distributions 77 8
Issued in connection with in-kind transfers -- --
Redeemed (4,213) (127) (954)
-----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from Class I transactions 2,702 221
Class II(3)
Issued 973 360
Issued in lieu of cash distributions 41 2
Redeemed (441) (50) (302)
-----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from Class II transactions 573 312
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in capital shares 3,275 533
-----------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Commenced operations on June 30, 1999.
(2) Formerly Institutional Class Shares.
(3) Formerly Adviser Class Shares.
(4) Includes undistributed net investment income (loss) and/or distributions in excess of net investment income (000) of
$(47) and $(0) for the One Year Portfolio and $(62) and $(34) for the Three Year Portfolio as of September 30,
2000, and September 30, 1999, respectively.
Amounts designated as "--" are either $0 or have been rounded to $0
The accompanying notes are an integral part of the financial statements.
</FN>
</TABLE>
60 | TURNER FUNDS 2000 ANNUAL REPORT
<PAGE>
<TABLE>
<CAPTION>
Turner Short Duration Government Funds- Turner Core High Quality
Three Year Portfolio Fixed Income Fund
----------------------------------------------------------------------------------------------------------------
year ended year ended year ended 6/30/99 thru
9/30/00 9/30/99 9/30/00 9/30/99 (1)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 2,648 $ 1,255 $ 711 $ 140
(179) (177) (202) (106)
243 (264) 352 18
----------------------------------------------------------------------------------------------------------------
2,712 814 861 52
(2,398) (1,258) (711) (140)
(290) (1) -- --
-- (156) -- --
-- -- -- --
----------------------------------------------------------------------------------------------------------------
(2,688) (1,415) (711) (140)
10,364 10,962 3,507 18
2,392 1,276 710 139
-- 18,947 -- 10,120
(9,318) (3,912) (401) (180)
----------------------------------------------------------------------------------------------------------------
3,438 27,273 3,816 10,097
----------------------------------------------------------------------------------------------------------------
9,004 192 -- --
265 1 -- --
(2,934) (106) -- --
----------------------------------------------------------------------------------------------------------------
6,335 87 -- --
----------------------------------------------------------------------------------------------------------------
9,773 27,360 3,816 10,097
----------------------------------------------------------------------------------------------------------------
9,797 26,759 3,966 10,009
----------------------------------------------------------------------------------------------------------------
38,774 12,015 10,009 --
----------------------------------------------------------------------------------------------------------------
$48,571 $ 38,774 $13,975 $10,009
----------------------------------------------------------------------------------------------------------------
1,062 1,100 358 2
245 128 72 14
-- 1,926 -- 1,012
(393) (40) (18)
----------------------------------------------------------------------------------------------------------------
353 2,761 390 1,010
928 20 -- --
27 -- -- --
(11) -- --
----------------------------------------------------------------------------------------------------------------
653 9 -- --
----------------------------------------------------------------------------------------------------------------
1,006 2,770 390 1,010
----------------------------------------------------------------------------------------------------------------
</TABLE>
TURNER FUNDS 2000 ANNUAL REPORT | 61
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
--------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Realized and
Net asset Net unrealized Distributions Distributions
value, investment gains from net from
beginning income (losses) on investment capital Return
of period (loss) investments income gains of capital
--------------------------------------------------------------------------------------------------------------------------------
-------------------------
Turner Midcap Growth Fund
-------------------------
<S> <C> <C> <C> <C> <C> <C>
2000 $25.53 (0.10) 23.79 -- (2.70) --
1999 $13.87 (0.06) 11.72 -- -- --
1998 $14.22 (0.07) 0.22 -- (0.50) --
1997 (1) $10.00 (0.03) 4.36 -- (0.11) --
----------------------------
Turner Small Cap Growth Fund
----------------------------
2000 $34.20 (0.12) 17.89 -- (7.18) --
1999 $21.49 (0.26) 12.97 -- -- --
1998 $26.35 (0.23) (4.19) -- (0.25) (0.19)
1997 $23.13 (0.07) 3.80 -- (0.51) --
1996 (2) $16.08 (0.08) 8.17 -- (1.04) --
1995 $10.90 (0.06) 5.24 -- -- --
----------------------------
Turner Micro Cap Growth Fund
----------------------------
2000 $21.09 (0.18) 26.52 -- (1.51) --
1999 (3) $ 9.88 (0.05) 11.26 -- -- --
1998 (4) $10.00 (0.04) (0.08) -- -- --
------------------
Turner Top 20 Fund
------------------
2000 $13.99 (0.11) 13.06 -- (2.20) --
1999 (5) $10.00 (0.02) 4.01 -- -- --
----------------------
Turner Technology Fund
----------------------
2000 $14.06 (0.16) 20.33 -- (1.54) --
1999 (5) $10.00 (0.02) 4.08 -- -- --
--------------------------
Turner B2B E-Commerce Fund
--------------------------
2000 (6) $10.00 (0.01) 2.53 -- -- --
-------------------------------------
Turner Wireless & Communications Fund
-------------------------------------
2000 (6) $10.00 (0.01) 1.83 -- -- --
-------------------------
Turner Global Top 40 Fund
-------------------------
2000 (6) $10.00 (0.01) (0.62) -- -- --
--------------------------------
Turner Select Growth Equity Fund
--------------------------------
2000 (7) $10.00 -- (0.19) -- -- --
<FN>
* Inclusive of directed brokerage arrangements, waivers and reimbursements.
+ Returns are for the period indicated and have not been annualized.
(1) Commenced operations on October 1, 1996. All ratios for the period have been annualized.
(2) On April 19, 1996, the Board of Trustees of the Adviser Inner Circle Funds voted to approve a tax-free reorganization of the
Turner Funds. In connection with the reorganization, the Funds changed their fiscal year end from October 31 to September
30, effective September 30, 1996. All ratios for the period have been annualized.
(3) On January 25, 1999 shareholders of the Alpha Select Turner Micro Cap Growth Fund (the "Fund") approved a tax-free
reorganization under which all assets and liabilities of the Fund were transferred to the TIP Turner Micro Cap Growth Fund.
</FN>
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
62 | Turner funds 2000 annual Report
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
Ratio of net
Ratio of Ratio of investment
net expenses expenses income (loss)
to average to average Ratio of net to average
Net Ratio of net assets net assets investment net assets
Net asset assets end net expenses (including (excluding income (loss) (excluding Portfolio
value, end Total of period to average waivers and waivers and to average waivers and turnover
of period return+ (000) net assets* reimbursements) reimbursements) net assets reimbursements) rate
------------------------------------------------------------------------------------------------------------------------------------
-------------------------
Turner Midcap Growth Fund
-------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2000 $46.52 97.35% $1,203,756 1.03% 1.07% 1.07% (0.72)% (0.72)% 306.97%
1999 $25.53 84.07% $ 148,830 1.03% 1.08% 1.08% (0.58)% (0.58)% 290.79%
1998 $13.87 1.24% $ 24,582 1.23% 1.34% 1.73% (0.79)% (1.18)% 304.29%
1997 (1) $14.22 43.77% $ 5,145 1.25% 1.25% 7.96% (0.62)% (7.33)% 348.29%
----------------------------
Turner Small Cap Growth Fund
----------------------------
2000 $44.79 56.07% $ 528,928 1.25% 1.26% 1.27% (0.94)% (0.95)% 203.01%
1999 $34.20 59.14% $ 254,077 1.25% 1.27% 1.31% (1.00)% (1.04)% 223.61%
1998 $21.49 (16.90)% $ 147,534 1.25% 1.28% 1.41% (0.99)% (1.12)% 167.73%
1997 $26.35 16.64% $ 153,462 1.24% 1.24% 1.33% (0.84)% (0.93)% 130.68%
1996 (2) $23.13 52.90% $ 67,425 1.25% 1.25% 1.54% (0.88)% (1.17)% 149.00%
1995 $16.08 47.52% $ 13,072 1.25% 1.25% 2.39% (0.68)% (1.82)% 183.49%
----------------------------
Turner Micro Cap Growth Fund
----------------------------
2000 $45.92 129.02% $ 187,107 1.25% 1.27% 1.35% (0.81)% (0.89)% 179.08%
1999 (3) $21.09 113.46% $ 12,963 0.90% 0.90% 2.86% (0.47)% (2.43)% 239.32%
1998 (4) $ 9.88 (1.20)% $ 2,843 1.25% 1.25% 8.18% (0.64)% (7.57)% 128.53%
------------------
Turner Top 20 Fund
------------------
2000 $24.74 98.58% $ 246,621 1.26% 1.52% 1.62% (1.16)% (1.26)% 1,590.94%
1999 (5) $13.99 39.90% $ 16,112 1.35% 1.35% 2.55% (0.87)% (2.07)% 369.11%
----------------------
Turner Technology Fund
----------------------
2000 $32.69 149.35% $ 169,353 1.35% 1.50% 1.67% (1.25)% (1.42)% 1,340.92%
1999 (5) $14.06 40.60% $ 8,296 1.35% 1.35% 3.89% (0.87)% (3.41)% 317.32%
--------------------------
Turner B2B E-Commerce Fund
--------------------------
2000 (6) $12.52 25.20% $ 13,750 1.35% 1.35% 2.87% (0.83)% (2.35)% 83.02%
-------------------------------------
Turner Wireless & Communications Fund
-------------------------------------
2000 (6) $11.82 18.20% $ 24,272 1.35% 1.35% 2.04% (0.76)% (1.45)% 89.66%
-------------------------
Turner Global Top 40 Fund
-------------------------
2000 (6) $ 9.37 (6.30)% $ 12,080 1.40% 1.40% 2.02% (0.48)% (1.10)% 285.98%
--------------------------------
Turner Select Growth Equity Fund
--------------------------------
2000 (7) $ 9.81 (1.90)% $ 4,656 0.75% 0.75% 3.35% (0.14)% (2.74)% 128.14%
<FN>
(4) Commenced operations on March 1, 1998. All ratios for the period have been annualized.
(5) Commenced operations on June 30, 1999. All ratios for the period have been annualized.
(6) Commenced operations on June 30, 2000. All ratios for the period have been annualized.
(7) Commenced operations on June 14, 2000. All ratios for the period have been annualized.
</FN>
</TABLE>
| Turner funds 2000 annual Report | 63
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
---------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Realized and
Net asset unrealized Distributions Distributions
value, Net gains from net from Net asset
beginning investment (losses) on investment capital value, end Total
of period income investments income gains of period return+
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------
Turner Short Duration Government Funds-One Year Portfolio--Class I(1)
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
2000 $10.05 0.61 0.01 (0.62) -- $10.05 6.34%
1999(3) $10.09 0.54 (0.02) (0.56) -- $10.05 5.34%
1998 (4) $10.08 0.35 -- (0.33) (0.01) $10.09 3.50%
1998 (5) $10.06 0.60 0.02 (0.60) -- $10.08 6.34%
1997 $10.03 0.60 0.03 (0.60) -- $10.06 6.32%
1996 $ 9.99 0.64 0.05 (0.65) -- $10.03 7.09%
---------------------------------------------------------------------
Turner Short Duration Government Funds-One Year Portfolio--Class II(2)
----------------------------------------------------------------------
2000 $10.10 0.57 0.02 (0.60) -- $10.09 6.00%
1999 (3) $10.11 0.47 0.02 (0.50) -- $10.10 5.00%
1998 (6) $10.08 0.30 0.03 (0.30) -- $10.11 3.26%
-----------------------------------------------------------------------
Turner Short Duration Government Funds-Three Year Portfolio--Class I(1)
-----------------------------------------------------------------------
2000 $ 9.84 0.58 (0.01) (0.59) -- $ 9.82 6.00%
1999 (7) $10.25 0.55 (0.27) (0.55) (0.14) $ 9.84 2.89%
1998 (4) $10.10 0.35 0.15 (0.34) (0.01) $10.25 5.09%
1998 (5) $10.00 0.59 0.10 (0.59) -- $10.10 7.07%
1997 $10.04 0.58 (0.01) (0.59) (0.02) $10.00 5.45%
1996 $ 9.80 0.60 0.23 (0.59) -- $10.04 8.73%
------------------------------------------------------------------------
Turner Short Duration Government Funds-Three Year Portfolio--Class II(2)
------------------------------------------------------------------------
2000 $ 9.80 0.58 (0.02) (0.58) -- $ 9.78 5.92%
1999 (8) $ 9.95 0.68 (0.13) (0.70) -- $ 9.80 5.64%
------------------------------------------
Turner Core High Quality Fixed Income Fund
------------------------------------------
2000 $ 9.91 0.59 0.07 (0.59) -- $ 9.98 6.97%
1999 (9) $10.00 0.14 (0.09) (0.14) -- $ 9.91 0.48%
<FN>
+ Returns are for the period indicated and have not been annualized.
(1) Formerly Institutional Class Shares.
(2) Formerly Adviser Class Shares.
(3) On May 24, 1999 shareholders of the Alpha Select Turner Short Duration Government Funds-One Year Portfolio (the "Fund")
approved a tax-free reorganization under which all assets and liabilities of the Fund were transferred to the TIP Turner
Short Duration Government Funds-One Year Portfolio.
(4) On November 10, 1997 the Board of Trustees of TIP Institutional Funds (formerly, The Solon Funds) approved a change in the
Turner Short Duration Government Funds Three Year and One Year Portfolios' year end from February 28 to September 30,
effective March 1, 1998. All ratios for the period have been annualized.
(5) On January 22, 1998, shareholders of both the Three Year and One Year Funds approved a change in the advisor from Solon
Asset Management, L.P. to Turner Investment Partners, Inc.
(6) Commenced operations on February 27, 1998. All ratios for the period have been annualized.
(7) On January 25, 1999 shareholders of the Alpha Select Turner Short Duration Government Funds-Three Year Portfolio (the
"Fund") approved a tax-free reorganization under which all assets and liabilities of the Fund were transferred to the
TIPTurner Short Duration Government Funds-Three Year Portfolio.
(8) Commenced operations on April 28, 1999. All ratios for the period have been annualized.
(9) Commenced operations on June 30, 1999. All ratios for the period have been annualized.
(10) Average based upon amounts outstanding at each month end. (11) There was no debt outstanding at the end of any period
presented.
</FN>
</TABLE>
Amounts designated as "--"are either $0 or have been rounded to $0.
64 | TURNER FUNDS 2000 ANNUAL REPORT
<TABLE>
<CAPTION>
Ratio of net
Ratio of investment
expenses income (loss)
Ratio of net to average to average
Ratio of investment net assets net assets
Net assets net expenses income (loss) (excluding (excluding
end of to average to average waivers and waivers and
period (000) net assets net assets reimbursements) reimbursements)
------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------
Turner Short Duration Government Funds-One Year Portfolio--Class I(1)
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2000 $30,365 0.36% 6.15% 1.25% 5.26%
1999(3) $ 3,207 0.00% 5.50% 6.53% (1.03)%
1998 (4) $ 991 0.00% 5.88% 10.83% (4.95)%
1998 (5) $ 1,195 0.00% 5.97% 8.83% (2.86)%
1997 $ 864 0.00% 5.91% 10.25% (4.34)%
1996 $ 398 0.00% 6.46% 16.47% (10.01)%
---------------------------------------------------------------------
Turner Short Duration Government Funds-One Year Portfolio--Class II(2)
----------------------------------------------------------------------
2000 $ 8,934 0.61% 5.72% 1.48% 4.85%
1999 (3) $ 3,155 0.23% 5.13% 6.76% (1.40)%
1998 (6) -- 0.25% 5.63% 11.08% (5.20)%
-----------------------------------------------------------------------
Turner Short Duration Government Funds-Three Year Portfolio--Class I(1)
-----------------------------------------------------------------------
2000 $42,092 0.36% 5.94% 0.74% 5.56%
1999 (7) $38,687 0.24% 6.21% 1.31% 5.14%
1998 (4) $12,015 0.24% 5.84% 1.49% 4.59%
1998 (5) $15,544 0.24% 5.85% 1.21% 4.88%
1997 $17,809 0.24% 5.80% 1.21% 4.83%
1996 $11,027 0.24% 6.18% 1.45% 4.97%
------------------------------------------------------------------------
Turner Short Duration Government Funds-Three Year Portfolio--Class II(2)
------------------------------------------------------------------------
2000 $ 6,479 0.61% 5.90% 0.95% 5.56%
1999 (8) $ 87 0.48% 5.71% 0.95% 5.24%
------------------------------------------
Turner Core High Quality Fixed Income Fund
------------------------------------------
2000 $13,975 0.45% 6.07% 1.46% 5.06%
1999 (9) $10,009 0.45% 5.67% 1.99% 4.13%
</TABLE>
<TABLE>
<CAPTION>
Average Average Average
debt debt shares
per share outstanding outstanding Portfolio
Interest during during during turnover
expense the period (10) the period (10) (11) the period rate
--------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------
Turner Short Duration Government Funds-One Year Portfolio--Class I(1)
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2000 -- -- -- -- 294.54%
1999(3) -- -- -- -- 154.33%
1998 (4) -- -- -- -- 96.56%
1998 (5) -- -- -- -- 68.80%
1997 -- -- -- -- 81.82%
1996 -- -- -- -- --
---------------------------------------------------------------------
Turner Short Duration Government Funds-One Year Portfolio--Class II(2)
----------------------------------------------------------------------
2000 -- -- -- -- 294.54%
1999 (3) -- -- -- 154.33%
1998 (6) -- -- -- -- 96.56%
-----------------------------------------------------------------------
Turner Short Duration Government Funds-Three Year Portfolio--Class I(1)
-----------------------------------------------------------------------
2000 -- -- -- -- 223.73%
1999 (7) -- -- -- -- 257.98%
1998 (4) -- -- -- -- 121.63%
1998 (5) -- -- -- -- 197.03%
1997 0.02% $0.04 $ 56,238 1,320,830 279.00%
1996 0.12% $0.28 $256,115 901,238 251.00%
------------------------------------------------------------------------
Turner Short Duration Government Funds-Three Year Portfolio--Class II(2)
------------------------------------------------------------------------
2000 -- -- -- -- 223.73%
1999 (8) -- -- -- -- 257.98%
------------------------------------------
Turner Core High Quality Fixed Income Fund
------------------------------------------
2000 -- -- -- -- 183.50%
1999 (9) -- -- -- -- 39.70%
<FN>
(6) Commenced operations on February 27, 1998. All ratios for the period have been annualized.
(7) On January 25, 1999 shareholders of the Alpha Select Turner Short Duration Government Funds-Three Year Portfolio (the
"Fund") approved a tax-free reorganization under which all assets and liabilities of the Fund were transferred to the
TIPTurner Short Duration Government Funds-Three Year Portfolio.
(8) Commenced operations on April 28, 1999. All ratios for the period have been annualized.
(9) Commenced operations on June 30, 1999. All ratios for the period have been annualized.
(10) Average based upon amounts outstanding at each month end. (11) There was no debt outstanding at the end of any period
presented.
</FN>
</TABLE>
Amounts designated as "--"are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2000 ANNUAL REPORT | 65
<PAGE>
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
September 30, 2000
1. ORGANIZATION:
TIP Funds (the "Trust"), a Massachusetts business trust, is registered under the
Investment Company Act of 1940, as amended, as a diversified open-end management
investment company with 19 portfolios. The financial statements included herein
are those of the Turner Midcap Growth Fund (the "Midcap Growth Fund"), the
Turner Small Cap Growth Fund (the "Small Cap Growth Fund"), the Turner Micro Cap
Growth Fund (the "Micro Cap Growth Fund"), the Turner Top 20 Fund (the "Top 20
Fund"), the Turner Technology Fund (the "Technology Fund"), the Turner B2B
E-Commerce Fund (the "B2B E-Commerce Fund"), the Turner Wireless &
Communications Fund (the "Wireless & Communications Fund"), the Turner Global
Top 40 Fund (the "Global Top 40 Fund"), the Turner Select Growth Equity Fund
(the "Select Growth Equity Fund"), the Turner Short Duration Government
Funds-One Year Portfolio (the "One Year Portfolio"), the Turner Short Duration
Government Funds-Three Year Portfolio (the "Three Year Portfolio"), and the
Turner Core High Quality Fixed Income Fund (the "Core High Quality Fixed Income
Fund") (each a "fund" and collectively the "Funds"). The Turner Select Growth
Equity Fund and the Turner Short Duration Government Funds-One Year and Three
Year Portfolios are registered to offer two classes of shares, Class I Shares
and Class II Shares. As of September 30, 2000, Class II Shares of the Turner
Select Growth Equity Fund had not yet commenced operations. The financial
statements of the remaining portfolios are presented separately. 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.
As of September 30, 2000, the Turner International Opportunities Fund and the
Turner International Discovery Fund had not yet commenced operations.
The Turner Small Cap Growth Fund and the Turner Micro Cap Growth Fund were
closed to new investors as of August 30, 1997, and March 7, 2000, respectively.
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. Market value
for debt obligations is determined on the basis of last reported sales
price, or if no sales are reported, as is the case with most securities
traded over the counter, the mean between representative bid and asked
quotations. Short-term securities with maturities of 60 days or less may be
carried at amortized cost, which approximates market value. Fixed income
securities for which market quotations are not readily available may be
valued, pursuant to guidelines established by the Board of Trustees, with
reference to fixed income securities whose prices are more readily
obtainable and whose durations are comparable to the securities being
valued. Subject to the foregoing, other securities for which market
quotations are not readily available are valued at fair value as determined
in good faith by the Board of Trustees. At September 30, 2000, the Global
Top 40 Fund held Independent Energy ADR under this valuation method.
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.
Securities purchased on a when-issued or delayed delivery basis may be
settled a month or more after the trade date. Such securities are included
in the portfolio and are subject to market fluctuations during this period.
On the date of the commitment to purchase or sell, the Funds designate
specific assets with a current value at least equal to the amount of the
commitment to be used for settling the commitment.
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
66 | Turner funds 2000 annual Report
<PAGE>
--------------------------------------------------------------------------------
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 insolvency proceeding,
realization of the collateral by the Funds may be delayed or limited.
EXPENSES--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 TO SHAREHOLDERS--Distributions from net investment income are
declared and paid to shareholders at least annually for the Midcap Growth
Fund, the Small Cap Growth Fund, the Micro Cap Growth Fund, the Top 20
Fund, the Technology Fund, the B2B E-Commerce Fund, the Wireless &
Communications Fund, the Global Top 40 Fund, and the Select Growth Equity
Fund; and declared daily and paid monthly for the Three Year Portfolio, One
Year Portfolio and the Core High Quality Fixed Income Fund. Any net
realized capital gains on sales of securities for all Funds are distributed
to Shareholders at least annually.
Distributions from net investment income and distributions from net
realized capital gains are determined in accordance with U.S. Federal
income tax regulations. Certain book/tax differences are either temporary
or permanent in nature. To the extent these differences are permanent, they
are charged or credited to paid-in-capital or accumulated net realized
gain, as appropriate, in the period that the differences arise.
Accordingly, the following permanent differences, primarily attributable to
net operating losses and the classification of short-term capital gains and
ordinary income for tax purposes, have been reclassified to/from the
following accounts during the fiscal year ended September 30, 2000.
Undistributed Accumulated Portfolio
net investment realized gain capital
income (000) (000) (000)
---------------- -------------- ------------
Midcap Growth
Fund $4,238 $(4,238) $ --
Small Cap
Growth Fund 4,155 (4,155) --
Micro Cap
Growth Fund 984 (984) --
Top 20 Fund 1,207 (1,207) --
Technology Fund 883 (883) --
Undistributed Accumulated Portfolio
net investment realized gain capital
income (000) (000) (000)
---------------- -------------- ------------
B2B E-Commerce
Fund 15 -- (15)
Wireless &
Communications
Fund 28 (28) --
Global Top 40 Fund 15 -- (15)
Select Growth
Equity Fund 2 -- (2)
One Year Portfolio 4 (4) --
Three Year Portfolio 12 (12) --
These reclassifications have no effect on net assets or net asset values
per share.
CLASSES--Class specific expenses are borne by that class. Income, non-class
specific expenses and realized/unrealized gains and losses are allocated to
the respective classes on the basis of the relative daily net assets.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles 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 reported period. Actual results could differ from those
estimates.
3. ORGANIZATION COSTS AND TRANSACTIONS
WITH AFFILIATES:
Any capitalized organization costs for the Funds are being amortized over a
period of sixty months. In the event any of the initial shares of a fund are
redeemed by any holder thereof during the period that such fund is amortizing
its organizational costs, the redemption proceeds payable to the holder thereof
by a Fund will be reduced by the unamortized organizational costs in the same
ratio as the number of shares outstanding at the time of redemption.
Certain officers of the Trust are also officers of SEI Investments Mutual Funds
Services (the "Administrator") and/or SEI Investments Distribution Co. (the
"Distributor"). Such officers are paid no fees by the Trust for serving as
officers and trustees of the Trust.
4. ADMINISTRATION, SHAREHOLDER SERVICING, AND
DISTRIBUTION AGREEMENTS:
The Trust and the Administrator are parties to an agreement under which the
Administrator provides manage-
TURNER FUNDS 2000 ANNUAL REPORT x 67
<PAGE>
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
ment and administrative services for an annual fee. For these administrative
services, the Administrator is entitled to a fee from the Trust, which is
calculated daily and paid monthly, at an annual rate of .09% of the Trust's
average daily net assets up to $250 million, .07% on the next $250 million, .06%
on the next $250 million, .05% on the next $1.25 billion and .04% of such assets
in excess of $2 billion. Each Fund is subject to a minimum annual fee of $65,000
for the first class of shares and $15,000 for each additional class of shares,
which may be reduced at the sole discretion of the Administrator.
The Midcap Growth Fund, the Small Cap Growth Fund, the Micro Cap Growth Fund,
the Top 20 Fund, and the Technology Fund have directed certain portfolio trades
to brokers who paid a portion of its expenses. For the period ended September
30, 2000, the Funds' expenses were reduced by $259,806, $56,417, $23,361,
$344,704, and $125,327, respectively, under this arrangement.
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
April 28, 1996. The Distributor receives no fees for its distribution services
under this agreement.
The Select Growth Equity Fund and the One Year and Three Year Portfolios have
adopted a shareholder service plan and agreement for their Class II Shares.
Under the shareholder service plan and agreement both funds pay the Distributor
a shareholder servicing fee at an annual rate of 0.25% of the average daily net
assets of the Class II Shares of each fund.
5. INVESTMENT ADVISORY AGREEMENT:
The Trust and Turner Investment Partners, Inc. (the "Adviser") are parties to an
Investment Advisory Agreement dated April 28, 1996 under which the Adviser
receives an annual fee equal to .75% of the average daily net assets of the
Midcap Growth Equity Fund, 1.00% of the Small Cap Growth, Micro Cap Growth and
Global Top 40 Funds, 1.10% of the Top 20, Technology, B2B E-Commerce, and
Wireless & Communications Funds, .60% of the Select Growth Equity Fund, .25% of
the One Year and Three Year Portfolios and .50% of the Core High Quality Fixed
Income Fund. The adviser has voluntarily agreed to waive all or a portion of its
fees and to reimburse expenses in order to limit their total operating expenses
(as a percentage of daily net assets on an annualized basis) to not more than
1.25% of the Small Cap Growth, Midcap Growth Equity and Micro Cap Growth Funds,
1.35% of the Top 20, Technology, B2B E-Commerce, and Wireless & Communications
Funds, 1.40% of the Global Top 40 Fund, .75% and 1.00% of the Select Growth
Equity Fund, Class I shares and Class II shares, respectively, .36% and .61% of
the One Year and Three Year Portfolios, Class I shares and Class II shares,
respectively, and .45% of the Core High Quality Fixed Income Fund. Fee waivers
and expense reimbursements are voluntary and may exceed the amount necessary to
maintain the stated contractual caps. These waivers and reimbursements may be
terminated at any time. The Advisory Fee for the Top 20 Fund, Technology Fund,
B2B E-Commerce Fund, Wireless and Communications Fund, and the Global Top 40
Fund are subject to a performance adjustment based on each Fund's performance
relative to the performance of it's benchmark. These performance-based fees will
begin once a Fund has been in operations for at least one year. During the
period ended September 30, 2000, the Top 20 Fund and the Technology Fund
outperformed their respective benchmarks by more than 2.5%, therefore Turner's
advisory fees increased from 1.10% to 1.50% of the average daily net assets on
an annualized basis for these Funds. If, however, either Fund underperforms its
benchmark by 2.5%, Turner's advisory fees would be reduced from 1.10% to .70%
for such Fund.
6. INVESTMENT TRANSACTIONS:
The cost of security purchases and the proceeds from security sales, other than
short-term investments, for the period ended September 30, 2000, are as follows
(000):
PURCHASES SALES
(000) (000)
---------- ----------
Midcap Growth Fund $2,574,494 $1,842,289
Small Cap Growth Fund 998,681 866,873
Micro Cap Growth Fund 310,648 208,527
Top 20 Fund 2,275,446 2,086,175
Technology Fund 1,215,638 1,078,052
B2B E-Commerce Fund 17,140 7,304
Wireless &
Communications Fund 38,214 15,893
Global Top 40 Fund 50,198 37,150
Select Growth Equity Fund 9,781 4,790
68 | TURNER FUNDS 2000 ANNUAL REPORT
<PAGE>
Purchases (000) Sales (000)
Gov't Other Gov't Other
------ ------ ------ -----
One Year
Portfolio $31,684 $4,580 $21,499 $1,183
Three Year
Portfolio 78,080 4,329 68,431 6,029
Core High Quality
Fixed Income
Fund 21,630 1,368 17,461 1,660
At September 30, 2000, the total cost of securities for Federal income tax
purposes for the Funds was as follows:
Tax cost
(000)
-----------
Midcap Growth Fund $1,006,771
Small Cap Growth Fund 479,741
Micro Cap Growth Fund 139,428
Top 20 Fund 248,635
Technology Fund 166,864
B2B E-Commerce Fund 10,087
Wireless & Communications Fund 23,480
Global Top 40 Fund 11,862
Select Growth Equity Fund 4,665
One Year-Portfolio 39,150
Three Year Portfolio 47,797
Core High Quality Fixed Income 14,536
The aggregate gross unrealized appreciation and depreciation for securities held
by the Funds at September 30, 2000, are as follows (000):
Less:
Aggregate gross Net tax Tax
unrealized unrealized basis net
apprec. deprec. apprec. adjustment apprec.
--------- ------- ---------- ---------- --------
Midcap Growth $250,544 $(44,184) $206,360 $16,043 $190,317
Small Cap Growth 99,008 (38,541) 60,467 188 60,279
Micro Cap Growth 54,084 (9,293) 44,791 683 44,108
Top 20 11,690 (9,870) 1,820 1,279 541
Technology 13,023 (10,032) 2,991 1,403 1,588
B2B E-Commerce 2,180 (291) 1,889 212 1,677
Wireless &
Communications 3,118 (1,583) 1,535 399 1,136
Global Top 40 735 (368) 367 250 117
Select Growth Equity 296 (244) 52 33 19
One Year 141 (7) 134 14 120
Three Year 320 (105) 215 29 186
Core High Quality
Fixed Income 180 (70) 110 21 89
Subsequent to October 31, 1999, the following Funds had recognized net capital
losses that have been deferred to 2000 for tax purposes and can be used to
offset future capital gains at September 30, 2001. The Funds also had capital
loss carryforwards at September 30, 2000, that can be used to offset future
capital gains.
Post Capital loss
10/31/99 carryovers
capital expiring
loss deferral 2001-2008
------------ ------------
B2B E-Commerce Fund $ 170,406 $ --
Global Top 40 Fund 1,186,119 --
Select Growth Equity Fund 360,587 --
Three Year Portfolio 176,040 202,228
Core High Quality Fixed
Income Fund 182,337 104,565
7. IN-KIND TRANSFERS OF SECURITIES:
During the period ended September 30, 1999, the Three Year Portfolio issued
1,925,533 shares of beneficial interest in exchange for portfolio assets from
certain accounts managed by Turner Investment Partners, Inc., at their then
current value of $18,947,249.
During the period ended September 30, 1999, the Core High Quality Fixed Income
Fund issued 1,012,284 shares of beneficial interest in exchange for portfolio
assets from certain accounts managed by Turner Investment Partners, Inc., at
their then current value of $10,120,317 which includes $260,485 of net
unrealized loss.
8. LINE OF CREDIT:
Pursuant to a credit agreement dated May 21, 1997, First Union National Bank
provides an uncommitted line of credit to the Midcap Growth Fund, the Small Cap
Growth Fund, the Micro Cap Growth Fund, the Top 20 Fund, the Technology Fund,
the One Year Portfolio, the Three Year Portfolio and the Core High Quality Fixed
Income Fund, Portfolios of the TIP Funds, for short-term or emergency purposes,
such as funding shareholder redemptions. These loans are for the respective
benefit of and repayable from the respective assets of each Fund. The aggregate
principal amount of all borrowings may not exceed 10% of each Fund, net assets
and the maximum principal amount that the Bank will loan is $10,000,000.
Borrowings under the line of credit are charged interest based on the federal
funds rate determined at the date of borrowing and are secured by investment
securities of the borrowing portfolio. Each Fund is individually, and not
jointly, liable for its particular advances under the line. There is no
commitment fee on the unused portion of the line of credit. There were no
borrowings under the line of credit during the period ended September 30, 2000.
TURNER FUNDS 2000 ANNUAL REPORT | 69
<PAGE>
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
9. REORGANIZATIONS (UNAUDITED):
On May 22, 2000, the shareholders of the Turner Growth Equity Fund (the
"Portfolio") approved a tax-free reorganization under which all of the assets
and liabilities of the Portfolio were transferred to the Vanguard Growth Equity
Fund. The results of the voting were as follows:
TURNER GROWTH EQUITY FUND
FOR 8,421,045 98.43% of 53.50% of shares
shares voted outstanding
AGAINST 104,802 1.22% of 0.66% of shares
shares voted outstanding
ABSTAIN 29,298 0.34% of 0.18% of shares
shares voted outstanding
On June 9, 2000, the shareholders of the Turner Large Cap Growth Equity Fund
(the "Portfolio") approved the reorganization of the Portfolio into the Mercury
Select Growth Fund. The Reorganization includes the transfer of substantially
all of the assets and liabilities of the Portfolio to Mercury Select Growth Fund
in exchange for a number of Class I shares of Mercury Select Growth Fund equal
to the number of shares of the Portfolio issued and outstanding immediately
prior to the completion of the Reorganization. Because Mercury Select Growth
Fund invests all of its assets in another fund in a "master/feeder" structure,
the Reorganization also includes the transfer of those assets and certain
liabilities to the master fund to implement this structure. The results of the
voting were as follows:
TURNER LARGE CAP GROWTH EQUITY FUND
FOR 832,842 95.56% of 51.36% of shares
shares voted outstanding
AGAINST 34,684 3.97% of 2.13% of shares
shares voted outstanding
ABSTAIN 3,961 0.45% of 0.24% of shares
shares voted outstanding
70 | TURNER FUNDS 2000 ANNUAL REPORT
<PAGE>
REPORT OF INDEPENDENT AUDITORS
--------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF THE TIP FUNDS:
We have audited the accompanying statements of net assets of the Turner Midcap
Growth Fund, the Turner Micro Cap Growth Fund, the Turner Select Growth Equity
Fund, the Turner Short Duration Government Funds - One Year Portfolio, the
Turner Short Duration Government Funds - Three Year Portfolio and the Turner
Core High Quality Fixed Income Fund and the statements of assets and
liabilities, including the schedules of investments, of the Turner Small Cap
Growth Fund, the Turner Top 20 Fund, the Turner Technology Fund, the Turner B2B
E-Commerce Fund, the Turner Wireless & Communications Fund and the Turner Global
Top 40 Fund (collectively, the "TIP Funds") as of September 30, 2000, and the
related statements of operations and the statements of changes in net assets for
the periods presented therein, and the financial highlights for the periods
ended February 28, 1996 through September 30, 2000 presented therein. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for the year ended October 31, 1995 for the Turner Small Cap Growth
Fund were audited by other auditors whose report dated December 5, 1995
expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the 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 September 30, 2000, by correspondence with the custodian and
brokers. 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 the
TIP Funds at September 30, 2000, the results of their operations and the changes
in their net assets for each of the periods presented therein, and their
financial highlights for the periods ended February 28, 1996 through September
30, 2000 presented therein, in conformity with accounting principles generally
accepted in the United States.
/s/ERNST & YOUNG LLP
Philadelphia, Pennsylvania
November 10, 2000
TURNER FUNDS 2000 ANNUAL REPORT | 71
<PAGE>
--------------------------------------------------------------------------------
NOTICE TO SHAREHOLDERS
OF
TURNER FUNDS
(UNAUDITED)
For shareholders that do not have a September 30, 2000 tax year end, this notice
is for informational purposes only. For shareholders with a September 30, 2000,
please consult your tax advisor as to the pertinence of this notice. For the
fiscal year ended September 30, 2000, each portfolio is designating the
following items with regard to distributions paid during the year.
<TABLE>
<CAPTION>
LONG TERM
(20% RATE) ORDINARY
CAPITAL GAIN INCOME TAX EXEMPT TOTAL QUALIFYING
FUND DISTRIBUTIONS DISTRIBUTIONS INTEREST DISTRIBUTIONS DIVIDENDS (1)
------ ------------- ------------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Turner Midcap Growth Fund ...................... 3.04% 96.96% 0.00% 100.00% 1.01%
Turner Small Cap Growth Fund ................... 34.15% 65.85% 0.00% 100.00% 0.81%
Turner Micro Cap Growth Fund ................... 0.00% 100.00% 0.00% 100.00% 0.70%
Turner Top 20 Fund ............................. 0.00% 100.00% 0.00% 100.00% 0.18%
Turner Technology Fund ......................... 0.00% 100.00% 0.00% 100.00% 0.04%
Turner B2B E-Commerce Fund ..................... 0.00% 0.00% 0.00% 0.00% 0.00%
Turner Wireless & Communications Fund .......... 0.00% 0.00% 0.00% 0.00% 0.00%
Turner Global Top 40 Fund ...................... 0.00% 0.00% 0.00% 0.00% 0.00%
Turner Select Growth Equity Fund ............... 0.00% 0.00% 0.00% 0.00% 0.00%
Turner Short Duration Government
Funds-One Year Portfolio .................... 0.00% 100.00% 0.00% 100.00% 0.00%
Turner Short Duration Government
Funds-Three Year Portfolio .................. 0.00% 100.00% 0.00% 0.00% 0.00%
Turner Core High Quality
Fixed Income Fund ........................... 0.00% 100.00% 0.00% 100.00% 0.00%
<FN>
(1) Qualifying dividends represent dividends which qualify for the corporate dividends received
deduction and is reflected as a percentage of "Ordinary Income Distributions".
</FN>
</TABLE>
72 | TURNER FUNDS 2000 ANNUAL REPORT
<PAGE>
NOTES
--------------------------------------------------------------------------------
TURNER FUNDS 2000 ANNUAL REPORT | 73
<PAGE>
NOTES
--------------------------------------------------------------------------------
74 | TURNER FUNDS 2000 ANNUAL REPORT
<PAGE>
NOTES
--------------------------------------------------------------------------------
TURNER FUNDS 2000 ANNUAL REPORT | 75
<PAGE>
--------------------------------------------------------------------------------
Turner Funds, Portfolios of the TIP Funds
TIP FUNDS TRUSTEES
RICHARD A. HOCKER
Chief Investment Officer and Senior Vice President
Penn Capital Management Co., Inc.
MICHAEL E. JONES
Senior Vice President, Investment Adviser,
and Portfolio Manager
Clover Capital Management, Inc.
ALFRED C. SALVATO
Treasurer
Thomas Jefferson University Health Care Pension Fund
JANET F. SANSONE
Retired, Corporate Vice President, Human Resources
Frontier Corporation
ROBERT E. TURNER
Chairman and Chief Investment Officer
Turner Investment Partners, Inc.
DR. JOHN T. WHOLIHAN
Professor and Dean, College of Business
Loyola Marymount University
INVESTMENT ADVISER
TURNER INVESTMENT PARTNERS, INC.
Berwyn, Pennsylvania
DISTRIBUTOR
SEI INVESTMENTS DISTRIBUTION CO.
Oaks, Pennsylvania
ADMINISTRATOR
SEI INVESTMENTS MUTUAL FUNDS SERVICES
Oaks, Pennsylvania
LEGAL COUNSEL
MORGAN, LEWIS & BOCKIUS LLP
Philadelphia, Pennsylvania
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
THIS REPORT WAS PREPARED FOR SHAREHOLDERS OF THE TURNER FUNDS, PORTFOLIOS OF THE
TIP FUNDS. IT MAY BE DISTRIBUTED TO OTHERS ONLY IF PRECEDED OR ACCOMPANIED BY A
TURNER FUNDS' PROSPECTUS, WHICH CONTAINS DETAILED INFORMATION. ALL TURNER FUNDS
ARE OFFERED BY PROSPECTUS ONLY.
<PAGE>
[BLANK PAGE]
<PAGE>
[TURNER LOGO OMITTED]
------------------------------------
TURNER FUNDS
1235 Westlakes Drive
Berwyn, Pennsylvania 19312
Telephone: 1-800-224-6312
Email:#[email protected]
Web Site:www.turner-invest.com
TUR-F-026-05
