[GRAPHIC OMITTED]
WARBURG PINCUS FUNDS
[GRAPHIC OMITTED]
CREDIT SUISSE
ASSET MANAGEMENT
ANNUAL
REPORT
AUGUST 31, 2000
WARBURG PINCUS
EUROPEAN EQUITY FUND
(BULLET)
WARBURG PINCUS
GLOBAL TELECOMMUNICATIONS FUND
(BULLET)
WARBURG PINCUS
GLOBAL HEALTH SCIENCES FUND
(FORMERLY, WARBURG PINCUS HEALTH SCIENCES FUND)
More complete information about the Funds, including charges and expenses, is
provided in the PROSPECTUS, which must precede or accompany this document and
which should be read carefully before investing. You may obtain additional
copies by calling 800-WARBURG (800-927-2874) or by writing to Warburg Pincus
Funds, P.O. Box 9030, Boston, MA 02205-9030.
Credit Suisse Asset Management Securities, Inc., Distributor, is located at 466
Lexington Ave., New York, NY 10017-3147. Warburg Pincus Funds are advised by
Credit Suisse Asset Management, LLC.
<PAGE>
FROM TIME TO TIME, THE FUNDS' INVESTMENT ADVISER AND CO-ADMINISTRATORS MAY WAIVE
SOME FEES AND/OR REIMBURSE SOME EXPENSES, WITHOUT WHICH PERFORMANCE WOULD BE
LOWER. WAIVERS AND/OR REIMBURSEMENTS ARE SUBJECT TO CHANGE.
RETURNS ARE HISTORICAL AND INCLUDE CHANGE IN SHARE PRICE AND REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE CANNOT GUARANTEE FUTURE RESULTS.
RETURNS AND SHARE PRICE WILL FLUCTUATE, AND REDEMPTION VALUE MAY BE MORE OR LESS
THAN ORIGINAL COST.
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS,
INCLUDING CURRENCY FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS,
AND DIFFERENCES IN ACCOUNTING METHODS.
THE VIEWS OF THE FUNDS' MANAGEMENT ARE AS OF THE DATE OF THE LETTERS AND
PORTFOLIO HOLDINGS DESCRIBED IN THIS DOCUMENT ARE AS OF AUGUST 31, 2000; THESE
VIEWS AND PORTFOLIO HOLDINGS MAY HAVE CHANGED SUBSEQUENT TO THESE DATES. NOTHING
IN THIS DOCUMENT IS A RECOMMENDATION TO PURCHASE OR SELL SECURITIES.
FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF CREDIT SUISSE ASSET
MANAGEMENT, LLC ("CSAM") OR ANY AFFILIATE, ARE NOT FDICINSURED AND ARE NOT
GUARANTEED BY CSAM OR ANY AFFILIATE. FUND INVESTMENTS ARE SUBJECT TO INVESTMENT
RISKS, INCLUDING LOSS OF YOUR INVESTMENT.
<PAGE>
WARBURG PINCUS EUROPEAN EQUITY FUND
PORTFOLIO MANAGERS' LETTER -- AUGUST 31, 2000
--------------------------------------------------------------------------------
October 3, 2000
Dear Shareholder:
For the 12 months ended August 31, 2000, Warburg Pincus European Equity Fund
(the "Fund") had a gain of 22.69%, vs. a gain of 10.08% for the Morgan Stanley
Capital International Europe Index1 (the "Index").
Most European equity markets posted gains for the 12 months, though similar
to the U.S. market, the group was volatile. These stocks initially rallied, but
then struggled over the January-through-August span, hampered by growing
inflation and interest-rate uncertainties. Technology, media and
telecommunications stocks ("TMT"), which accounted for the bulk of the gains in
Europe for the period, were especially volatile.
Against this backdrop, the Fund had a good showing, both in absolute terms
and compared to the Index. Several factors aided the Fund's return. From a
sector standpoint, the Fund benefited from its significant overweighting in TMT
stocks early in the period, when the group surged. We then took a
less-aggressive stance, which also proved beneficial (although we note that, in
absolute terms, certain of the Fund's TMT stocks hampered its return for the
period). Other sector strategies that helped the Fund included its avoidance,
late in the period, of basic-materials producers (aside from oil companies),
which came under pressure from rising input costs.
In terms of country attribution, factors that contributed positively to the
Fund's return included its overweightings in France and the Netherlands, two of
the region's better-performing markets for the period. The Fund's German
holdings also supported its return (we focused on financial companies here, and
avoided the country's struggling auto and chemical names). In addition, the Fund
benefited from our well-timed exposure to Hungary and Turkey.
As the period unfolded and market uncertainties mounted, we shifted away from
areas we deemed to have increasing earnings risk and toward industries with
visible revenue growth and relatively stable earnings streams or towards stocks
with valuation support. As a result, we increased our exposure to "Euro-centric"
companies that generate the bulk if not all of their revenues within Europe.
These companies stand to benefit from projected good internal growth in the
region.
As noted, we lowered our weighting in TMT stocks over the course of the
period, most specifically by de-emphasizing telecommunications operators. This
reflected our concerns over growth in the fixed-line area, as well as our belief
that expensive licensing fees will weigh on earnings in the wireless-
1
<PAGE>
WARBURG PINCUS EUROPEAN EQUITY FUND
PORTFOLIO MANAGERS' LETTER -- AUGUST 31, 2000 (CONT'D)
--------------------------------------------------------------------------------
communications industry. We reduced exposure to selected technology
stocks, where the combination of high earnings expectations, high valuations and
slower global economic growth posed, in our view, earnings risk.
Sector weightings we increased included consumer staples and financial
services. Our focus in these and other more "defensive" sectors was on companies
we deemed to have good earnings-growth potential and compelling valuations.
Looking out over the next year and beyond, we have a favorable view on the
prospects for Europe's stock markets. Dramatic reforms are taking hold with
respect to pensions and taxes (for instance, a sweeping tax-reform package will
be implemented in Germany next year), with eventual labor reform a distinct
possibility. These reforms stand to support Europe's economy and foster the
growth of its equity culture. The privatization of government-controlled
companies and ongoing merger & acquisition activity should also be positive
factors. There are some near-term concerns, of course, such as the weak euro and
high oil prices. (We believe that oil prices will likely trend down in 2001, if
not before, with overall inflation staying under control. Combined with ongoing
reforms, this stands to spark a recovery in the currency.) However, given the
forces at work, we believe that Europe remains a compelling asset class for
investors willing to accept short-term risks in pursuit of long-term rewards. As
ever, we will continue to strive to identify companies and markets with the best
prospects.
Sincerely yours,
Credit Suisse Asset Management European Equities Management Team
Nancy Nierman, Director
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING CURRENCY
FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENCES IN
ACCOUNTING METHODS. SINCE THE FUND FOCUSES ITS INVESTMENTS ON COMPANIES IN
EUROPE, AN INVESTMENT IN THE FUND MAY INVOLVE A GREATER DEGREE OF RISK THAN AN
INVESTMENT IN A MORE GEOGRAPHICALLY DIVERSIFIED EQUITY FUND.
2
<PAGE>
WARBURG PINCUS EUROPEAN EQUITY FUND
PORTFOLIO MANAGERS' LETTER -- AUGUST 31, 2000 (CONT'D)
--------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
WARBURG PINCUS EUROPEAN EQUITY COMMON SHARES AND THE MSCI
EUROPEAN INDEX 1 FROM INCEPTION (1/28/99) AND AT EACH QUARTER END.
(UNAUDITED)
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATAPOINTS USED IN PRINTED GRAPHIC
Warburg Pincus|European Equity Fund MSCI EAFE Index 1
01/31/99 10000 10000
02/28/99 9560 9688
05/31/99 9110 9608
08/31/99 9790 9968
11/30/99 11040 10540
02/28/00 12935 11363
05/31/00 11981 11040
08/31/00 12001 10973
AVERAGE ANNUAL
TOTAL RETURNS
FOR PERIODS ENDED
8/31/00
1 year
22.69%
Since Inception
(1/28/99)
12.18%
Note:Past performance is not predictive of future performance. Investment return
and principle value of an investment will fluctuate so that an investor's shares
upon redemption may be worth more or less than their original cost.
1 The Morgan Stanley International Europe Index is a market
capitalization-weighted index of 15 European countries. The index is
calculated on a total return basis with net dividends reinvested.
3
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
PORTFOLIO MANAGERS' LETTER -- AUGUST 31, 2000
--------------------------------------------------------------------------------
September 25, 2000
Dear Shareholders:
We are pleased to report on the results of the Warburg Pincus Global
Telecommunications Fund (the "Fund") for the fiscal year ended August 31, 2000.
At August 31, 2000, the net asset value (NAV) of the Fund was $69.11,
compared to an NAV of $41.22 on August 31, 1999. As a result, the Fund's total
return was 71.0%, (assuming the reinvestment of distributions totaling $1.23 per
share). By comparison, the MSCI Telecommunications Index1 (the "Index") returned
-0.1% during the same period.
We attribute the Fund's decisive outperformance of the Index to our
allocation of assets among the various subcategories of the global
telecommunications equity universe. Stock selection was effective across all
geographies in which we invested. Our timing in making various sectoral and
regional shifts also proved beneficial.
In terms of subcategories, we enjoyed vigorous returns during the global
rally in telecom and technology stocks in the fourth quarter of 1999 and much of
the first quarter of 2000. We were most heavily invested in this period in the
shares of telecommunications equipment manufacturers and wireless companies,
which offered an attractive combination of superior growth prospects and
reasonable valuations. Our holdings among makers of optical components, wireless
infrastructure producers and wireless service providers did especially well.
As valuations became increasingly stretched in the first quarter, though, we
chose to take profits and restructure the portfolio to capitalize on areas of
greater opportunity. We thus reduced exposure to the wireless sector and the
largest incumbent wireline service providers, while adding to our positions in
producers of telecom equipment and software.
Viewed geographically, we opted to shift away from Europe at that point due
to several factors that made the climate for telecom investing there much less
favorable than previously. These included unsustainably high valuations; the
upcoming issuance of an avalanche of new Europe-related telecom equity; and
concerns about the high prices paid for so-called "third-generation" wireless
licenses in Germany and the U.K.
4
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
PORTFOLIO MANAGERS' LETTER -- AUGUST 31, 2000 (CONT'D)
--------------------------------------------------------------------------------
Instead, we raised exposure to the U.S. and Canada -- where valuations were
surprisingly attractive compared to those available elsewhere in the world --
and Japan, where stock prices already reflected considerable negative investor
sentiment.
In descending order of their contributions to the Fund's overall performance
during the fiscal year, returns were best in the U.S., Europe, Japan,
Asia/Pacific, Latin America and other emerging markets.
Among the few blemishes we suffered were our holdings in competitive
local-exchange carriers, which fared poorly on a global basis; and Italy and
India, in which we favored incumbent wireline carriers whose shares fell as
their outlooks grew more pessimistic.
Thank you for your support, and please feel free to call upon us at any time
if you have questions.
Sincerely yours,
Credit Suisse Asset Management Global Telecommunications
Management Team
Scott T. Lewis, Portfolio Manager
Vincent J. McBride, Portfolio Manager
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING CURRENCY
FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENCES IN
ACCOUNTING METHODS. SINCE THE FUND FOCUSES ITS INVESTMENTS ON COMPANIES INVOLVED
IN TELECOMMUNICATIONS, AN INVESTMENT IN THE FUND MAY INVOLVE A GREATER DEGREE OF
RISK THAN AN INVESTMENT IN OTHER MUTUAL FUNDS THAT SEEK CAPITAL APPRECIATION BY
INVESTING IN A BROADER MIX OF ISSUES. MORE INFORMATION ABOUT THE FUND, INCLUDING
CHARGES AND EXPENSES AND THE SPECIAL RISK CONSIDERATIONS ASSOCIATED WITH A
SINGLE-INDUSTRY FUNDS, IS PROVIDED IN THE PROSPECTUS.
5
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
PORTFOLIO MANAGERS' LETTER -- AUGUST 31, 2000 (CONT'D)
--------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND COMMON SHARES AND THE
MSCI TELECOMMUNICATIONS INDEX1 FROM INCEPTION (12/4/96)
AND AT EACH QUARTER END. (UNAUDITED)
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Warburg Pincus| Morgan Stanley|
Global Telecommunications Fund Composite Index
Telecommunications 1
12/04/96 10000 10000
02/28/97 10787 10508
05/31/97 11460 10994
08/31/97 11533 10996
11/30/97 12860 12408
02/28/98 15179 14210
05/31/98 16664 15396
08/31/98 14461 15455
11/30/98 19460 17686
02/28/99 24138 21361
05/31/99 28188 21569
08/31/99 31920 21112
11/30/99 45317 26016
02/29/00 65274 28849
05/31/00 50861 24356
08/31/00 54581 21099
AVERAGE ANNUAL
TOTAL RETURNS
FOR PERIODS ENDED
8/31/00
(COMMON SHARES)
1 year
70.99%
3 year
67.89%
Since Inception
(12/4/96)
57.32%
Note:Past performance is not predictive of future performance. Investment return
and principle value of an investment will fluctuate so that an investor's shares
upon redemption may be worth more or less than their original cost.
1 The MSCI Telecommunications Index is an unmanaged index (with no defined
investment objective) of telecommunications equities that includes
reinvestment of dividends and is compiled by Morgan Stanley & Co.,
Incorporated.
6
<PAGE>
WARBURG PINCUS GLOBAL HEALTH SCIENCES FUND
PORTFOLIO MANAGERS' LETTER -- AUGUST 31, 2000
--------------------------------------------------------------------------------
September 25, 2000
Dear Shareholder:
For the 12 months ended August 31, 2000, Warburg Pincus Global Health
Sciences Fund 1,2 had a gain of 54.02%, vs. gains of 45.15% and 16.32%,
respectively, for the Lipper Health/Biotechnology Funds Index3 and the S&P 500
Index.4
The period was a positive one for the stock market, buoyed by optimism over
the economy and corporate profits. Stocks were quite volatile, however,
especially over the March-through-May span, due to interest-rate worries and
concerns over valuations on technology and "new economy" companies. The
health-care group had good performance for the 12 months, outpacing the broader
stock market by a considerable margin. Factors that aided health-care stocks
included solid earnings reports from a number of leading health-care companies
and market frenzy over the near-completion of the human-genome map. Of course,
health-care stocks were themselves volatile, but they hardly moved in lockstep
with the overall market (many health-care stocks, especially large-cap drug
stocks, are perceived to be "defensive" investments, and hence the group has
sometimes performed relatively well during periods of uncertainty).
Against this backdrop, the Fund had a sizable gain, supported by the
favorable environment for the health-care group and good stock selection
generally. Many of the Fund's holdings had solid showings, including a number of
its large-cap pharmaceutical names as well as specific holdings within the
biotechnology and health-care "provider" areas.
We made no major changes during the period in terms of overall strategy,
remaining focused on innovative companies with viable products or services and
good longer-term earnings-growth potential. We continued to employ a relatively
diversified approach, both in terms of market cap and industry exposure. Our
core holdings included pharmaceutical stocks as well as biotechnology,
managed-care and certain specialty health-care companies. We believe that such
an approach can achieve good results over time, while potentially limiting
portfolio volatility.
With respect to regional allocation, we remained heavily biased in favor of
the U.S. (indeed, a large majority of the world's publicly traded health-care
companies reside in the U.S.). That aside, we continued to find compelling
buying opportunities among foreign stocks. Foreign names we purchased during the
period included a Swiss biotechnology company, a small-cap Canadian
pharmaceutical company and an Ireland-based provider of products and services
based on neurology research.
7
<PAGE>
WARBURG PINCUS GLOBAL HEALTH SCIENCES FUND
PORTFOLIO MANAGERS' LETTER -- AUGUST 31, 2000 (CONT'D)
--------------------------------------------------------------------------------
Looking ahead, our view on the long-term prospects for health care as an
asset class remains positive. We believe that these stocks stand to enjoy a
favorable demographic tailwind, with rapidly maturing populations in the U.S.,
Europe and Japan buoying demand for health care. We also feel that this
already-strong projected demand should be boosted by the launch of new
life-enhancing products and services, for example, treatments discovered thanks
to ongoing gene research. To be certain, health-care stocks will remain volatile
(though we will continue to attempt to take advantage of this volatility,
looking to add high-quality companies trading at compelling valuations). For
investors willing to assume short-term risk in pursuit of potential long-term
rewards, we believe the group remains well worthy of consideration, and we will
continue to focus on stocks we deem to have the brightest prospects.
Susan L. Black Peter T. Wen
Co-Portfolio Manager Co-Portfolio Manager
SINCE THE FUND FOCUSES ITS INVESTMENTS ON COMPANIES INVOLVED IN THE HEALTH
SCIENCES, AN INVESTMENT IN THE FUND MAY INVOLVE A GREATER DEGREE OF RISK THAN AN
INVESTMENT IN OTHER MUTUAL FUNDS THAT SEEK CAPITAL APPRECIATION BY INVESTING IN
A BROADER MIX OF ISSUERS. INTERNATIONAL INVESTING ENTAILS SPECIAL RISK
CONSIDERATIONS, INCLUDING CURRENCY FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND
POLITICAL RISKS, AND DIFFERENCES IN ACCOUNTING METHODS.
8
<PAGE>
WARBURG PINCUS GLOBAL HEALTH SCIENCES FUND
PORTFOLIO MANAGERS' LETTER -- AUGUST 31, 2000 (CONT'D)
--------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
WARBURG PINCUS GLOBAL HEALTH SCIENCES FUND 1,2 COMMON SHARES,
LIPPER HEALTH/BIOTECHNOLOGY FUNDS INDEX ("LHBFI"), 3 AND THE
S&P 500 INDEX ("S&P 500") 4 FRON INCEPTION (12/31/96) AND AT
EACH QUARTER END. (UNAUDITED)
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Warburg Pincus| Lipper Health/
Global Health Biotechnology Funds S&P 500
Sciences Fund 1,2 Index 3 Index 4
12/31/96 10000 10000 10000
01/01/97 10330 10511 10624.1
02/01/97 10220 10546 10707.4
03/01/97 9620 9748 10268.8
04/01/97 9820 9749 10880.9
05/01/97 10530 10728 11542.2
06/01/97 11330 11270 12058.6
07/01/97 11760 11637 13016.9
08/01/97 11260 11324 12288.8
09/01/97 12020 12233 12960.9
10/01/97 12220 11926 12529.3
11/01/97 12710 12014 13108.2
12/01/97 12735.4 12070 13333.6
01/01/98 13234.7 12321 13480.8
02/01/98 14232.6 13012 14451.7
03/01/98 14827.5 13502 15191.8
04/01/98 15230.8 13600.4 15344.6
05/01/98 14869.8 13204.3 15081.5
06/01/98 15539 13587.3 15694.1
07/01/98 15135 13435.1 15527.4
08/01/98 13064.5 11473.8 13282.8
09/01/98 14551.2 12881.1 14133.8
10/01/98 15305 13373 15283.3
11/01/98 16081 14064 16209.5
12/01/98 16962.2 15208.8 17143
01/01/99 16782.4 15458 17859.5
02/01/99 16367.9 15056.7 17304.6
03/01/99 16389.1 15443.3 17996.8
04/01/99 15274.7 14694 18693.7
05/01/99 15465.6 14615.4 18252.3
06/01/99 16187.9 15324.7 19265.3
07/01/99 15911 15343.1 18664.2
08/01/99 16517.2 15763.5 18570.3
09/01/99 15369.3 14625.3 18061.5
10/01/99 15847.3 15318.6 19204.8
11/01/99 16432 15964 19594.7
12/01/99 18047.3 16782.9 20746.8
01/01/00 19460.4 17981.2 19705.3
02/01/00 22700.6 20473.4 19332.9
03/01/00 19449.9 18364.6 21224.2
04/01/00 18471.5 18177.7 20585.8
05/01/00 17993.1 18507.2 20163.4
06/01/00 21859.8 21667.9 20660.6
07/01/00 22061 20998.4 20337.7
08/01/00 25438.5 22881.9 21600.3
AVERAGE ANNUAL
TOTAL RETURNS
FOR PERIODS ENDED
8/31/00
1 year
54.02%
3 year
31.21%
Since Inception
(12/4/96)
28.96%
Note: Past performance is not predictive of future performance. Investment
return and principle value of an investment will fluctuate so that an investor's
shares upon redemption may be worth more or less than their original cost.
1 Name changed from Warburg Pincus Health Sciences Fund effecctive May 1, 2000.
2 Fiscal year end changed from October 31st to August 31st.
3 The Lipper Health/Biotechnology Funds Index is an equal-weighted performance
index, adjusted for capital-gain distributions and income dividends, of the
largest qualifying funds in this investment objective, and is compiled by
Lipper Inc.
4 The S&P 500 Index is an unmanaged index (with no defined investment
objective) of common stocks, includes reinvestment of dividends, and is a
registered trademark of McGraw-Hill Co., Inc.
9
<PAGE>
WARBURG PINCUS EUROPEAN EQUITY FUND
SCHEDULE OF INVESTMENTS
August 31, 2000
--------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- ------
COMMON STOCKS (84.2%)
DENMARK (1.0%)
COMMERCIAL SERVICES & SUPPLIES (1.0%)
ISS A/S 4,605 $ 312,997
-----------
TOTAL DENMARK 312,997
-----------
FINLAND (4.4%)
CAPITAL GOODS (1.0%)
Metso Oyj 24,920 301,306
-----------
TECHNOLOGY HARDWARE & EQUIPMENT (1.1%)
Nokia Oyj 7,488 328,662
-----------
TELECOMMUNICATION SERVICES (2.3%)
Elisa Communications Oyj Cl. A 18,404 700,288
-----------
TOTAL FINLAND 1,330,256
-----------
FRANCE (16.3%)
BANKS (2.4%)
Banque Nationale de Paris 7,754 713,488
-----------
ENERGY (2.2%)
Coflexip S.A. ADR 4,075 242,080
Total Fina S.A. Cl. B 2,903 431,265
-----------
673,345
-----------
INSURANCE (2.5%)
AXA S.A. 5,260 749,618
-----------
MATERIALS (1.5%)
Pechiney S.A. Cl. A 9,950 455,566
-----------
MEDIA (2.6%)
Lagardere S.C.A. 11,151 795,572
-----------
SOFTWARE & SERVICES (1.3%)
Infogrames Entertainment S.A.** 5,000 145,802
Ubi Soft Entertainment S.A.** 4,444 231,127
376,929
-----------
TECHNOLOGY HARDWARE & EQUIPMENT (3.8%)
Alcatel ADR 6,500 538,688
STMicroelectronics N.V. 9,600 588,899
1,127,587
-----------
TOTAL FRANCE 4,892,105
-----------
See Accompanying Notes to Financial Statements.
10
<PAGE>
WARBURG PINCUS EUROPEAN EQUITY FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 2000
-------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- ------
COMMON STOCKS (CONT'D)
GERMANY (12.5%)
BANKS (2.8%)
Deutsche Bank AG 9,570 $ 837,197
-----------
INSURANCE (7.1%)
Ergo Versicherungs Gruppe AG 4,700 593,345
Hannover Rueckversicherungs AG 9,190 747,580
Marschollek, Lautenschlaeger und Partner AG 5,764 781,474
2,122,399
-----------
UTILITIES (2.6%)
E.On AG 16,700 800,251
-----------
Total Germany 3,759,847
-----------
HUNGARY (1.0%)
BANKS (1.0%)
OTP Bank Rt. GDR 144A 5,660 304,127
-----------
TOTAL HUNGARY 304,127
-----------
ITALY (3.4%)
INSURANCE (1.5%)
Riunione Adriatica di Sicurta S.p.A. 38,500 450,783
-----------
TRANSPORTATION (1.9%)
Concessioni e Costruzioni Autostrade S.p.A. 81,251 557,657
-----------
TOTAL ITALY 1,008,440
-----------
NETHERLANDS (11.2%)
BANKS (2.5%)
ABN AMRO Holding NV 30,100 749,282
-----------
CAPITAL GOODS (1.5%)
IHC Caland N.V. 8,450 439,474
-----------
ENERGY (2.0%)
Petroplus International N.V. 40,495 590,427
-----------
FOOD & DRUG RETAILING (2.1%)
Koninklijke Ahold N.V. 21,950 620,948
-----------
TECHNOLOGY HARDWARE & EQUIPMENT (3.1%)
Koninklijke (Royal) Philips Electronics N.V. 19,394 944,867
-----------
TOTAL NETHERLANDS 3,344,998
-----------
PORTUGAL (1.4%)
TELECOMMUNICATION SERVICES (1.4%)
Portugal Telecom S.A. 40,960 426,784
-----------
TOTAL PORTUGAL 426,784
-----------
See Accompanying Notes to Financial Statements.
11
<PAGE>
WARBURG PINCUS EUROPEAN EQUITY FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 2000
-------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- ------
COMMON STOCKS (CONT'D)
SPAIN (6.1%)
BANKS (2.8%)
Banco Bilbao Vizcaya S.A. 57,253 $ 850,542
-----------
FOOD & DRUG RETAILING (2.8%)
Centros Comerciales Continente S.A.** 24,150 422,321
Centros Comerciales Pryca S.A.** 31,500 418,671
-----------
840,992
-----------
MEDIA (0.5%)
Grupo Prisa SA 5,950 142,560
-----------
TOTAL SPAIN 1,834,094
-----------
SWEDEN (3.9%)
BANKS (2.0%)
Nordic Baltic Holding (NBH) AB 85,900 596,261
-----------
TECHNOLOGY HARDWARE & EQUIPMENT (1.9%)
Telefonaktiebolaget L.M. Ericsson Cl. B 28,066 566,601
-----------
TOTAL SWEDEN 1,162,862
-----------
UNITED KINGDOM (23.0%)
BANKS (1.0%)
LLoyds TSB Holdings Group plc 31,494 296,938
-----------
CAPITAL GOODS (3.4%)
BAE Systems plc 91,400 570,514
Enodis plc 137,900 430,382
-----------
1,000,896
-----------
ENERGY (1.4%)
BP Amoco plc 46,670 428,140
-----------
INSURANCE (2.6%)
Prudential Corporation plc 58,706 770,463
-----------
MEDIA (5.1%)
EMI Group plc 77,300 718,693
Granada Media plc** 40,000 378,300
Reed International plc 51,750 444,248
-----------
1,541,241
-----------
PHARMACEUTICALS & BIOTECHNOLOGY (3.5%)
AstraZeneca Group plc 15,931 727,840
SmithKline Beecham plc 24,350 317,978
-----------
1,045,818
-----------
See Accompanying Notes to Financial Statements.
12
<PAGE>
WARBURG PINCUS EUROPEAN EQUITY FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 2000
-------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- ------
COMMON STOCKS (CONT'D)
UNITED KINGDOM (CONT'D)
TECHNOLOGY HARDWARE & EQUIPMENT (1.4%)
FirstGroup plc 116,900 $ 429,051
-----------
TELECOMMUNICATION SERVICES (2.2%)
Vodafone Group plc 160,224 648,673
-----------
TRANSPORTATION (2.4%)
Railtrack Group plc 50,400 721,587
-----------
TOTAL UNITED KINGDOM 6,882,807
-----------
TOTAL COMMON STOCKS (Cost $22,911,779) 25,259,317
-----------
Par
(000)
--------
SHORT-TERM INVESTMENT (13.6%)
BBH Grand Cayman U.S. Dollar Time Deposit
5.710% 09/01/00 $4,090 4,090,000
-----------
(Cost $4,090,000)
TOTAL INVESTMENTS AT VALUE (97.9%) (COST $27,001,779*) 29,349,317
OTHER ASSETS IN EXCESS OF LIABILITIES (2.1%) 657,806
-----------
TOTAL NET ASSETS (100.0%) $30,007,123
===========
* The cost for Federal income tax purposes at August 31, 2000
is $27,222,511. The gross appreciation (depreciation) on a
tax basis is as follows:
Gross Appreciation $ 2,830,382
Gross Depreciation (703,576)
-----------
Net Appreciation $ 2,126,806
===========
** Non-income producing securities.
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipts
GDR = Global Depository Receipts
See Accompanying Notes to Financial Statements.
13
<PAGE>
WARBURG PINCUS GLOBAL COMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS
August 31, 2000
-------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- ------
COMMON STOCKS (98.4%)
AUSTRALIA (2.3%)
MEDIA (0.6%)
News Corp. Ltd. ADR 62,500 $ 2,765,625
-----------
SOFTWARE & SERVICES (1.7%)
Open Telecommunications, Ltd.** 6,043,461 7,822,153
-----------
TOTAL AUSTRALIA 10,587,778
-----------
BELGIUM (0.0%)
TELECOMMUNICATION SERVICES (0.0%)
Telinfo NV-Strip VVPR** 61 1
-----------
TOTAL BELGIUM 1
-----------
BERMUDA (2.6%)
CAPITAL GOODS (1.1%)
Tyco International Ltd. ADR 90,300 5,147,100
-----------
TECHNOLOGY HARDWARE & EQUIPMENT (1.2%)
TyCom, Ltd. ADR** 134,200 5,586,075
-----------
TELECOMMUNICATION SERVICES (0.3%)
Global Crossing, Ltd. ADR** 44,200 1,328,762
-----------
TOTAL BERMUDA 12,061,937
-----------
BRAZIL (3.1%)
TELECOMMUNICATION SERVICES (3.1%)
Celular crt Participacoes S.A. Pfd. A** 11,331,000 5,343,932
Embratel Participacoes S.A. ADR 118,300 2,587,812
Tele Centro Oeste Celular Participacoes S.A. ADR 214,000 2,728,500
Telecomunicacoes Brasileiras S.A. Pfd. Block ADR 42,600 3,908,550
-----------
14,568,794
-----------
TOTAL BRAZIL 14,568,794
-----------
CANADA (4.7%)
SOFTWARE & SERVICES (1.6%)
Descartes Systems Group, Inc. (The)** 90,100 4,188,382
Descartes Systems Group, Inc. (The)** 71,800 3,325,237
-----------
7,513,619
-----------
TECHNOLOGY HARDWARE & EQUIPMENT (1.8%)
C-MAC Industries, Inc.** 52,000 3,727,750
Nortel Networks Corp. 57,000 4,649,062
-----------
8,376,812
-----------
See Accompanying Notes to Financial Statements.
14
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 2000
-------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- ------
COMMON STOCKS (CONT'D)
CANADA (CONT'D)
TELECOMMUNICATION SERVICES (1.3%)
Axxent, Inc.** 580,000 $ 2,949,873
GT Group Telecom, Inc. Class B** 200,000 3,175,000
-----------
6,124,873
-----------
TOTAL CANADA 22,015,304
-----------
FINLAND (2.6%)
SOFTWARE & SERVICES (0.5%)
Comptel Oyj 128,200 2,160,962
-----------
TECHNOLOGY HARDWARE & EQUIPMENT (0.6%)
Nokia Oyj 37,000 1,623,999
Nokia Corp. ADR 30,700 1,379,581
-----------
3,003,580
-----------
TELECOMMUNICATION SERVICES (1.5%)
Elisa Communications Oyj Class A 183,773 6,992,723
-----------
TOTAL FINLAND 12,157,265
-----------
FRANCE (3.3%)
CAPITAL GOODS (0.9%)
Bouygues S.A. 71,540 4,499,831
-----------
TECHNOLOGY HARDWARE & EQUIPMENT (2.4%)
Alcatel 106,500 8,715,539
Alcatel ADR 30,000 2,486,250
-----------
11,201,789
-----------
TOTAL FRANCE 15,701,620
-----------
GREECE (0.7%)
TELECOMMUNICATION SERVICES (0.7%)
Hellenic Telecommunications Organization S.A. ADR 361,300 3,342,025
-----------
TOTAL GREECE 3,342,025
-----------
HONG KONG (1.1%)
TELECOMMUNICATION SERVICES (1.1%)
China Mobile (Hong Kong), Ltd.** 160,000 1,230,921
China Mobile (Hong Kong), Ltd. ADR** 108,000 4,164,750
-----------
5,395,671
-----------
TOTAL HONG KONG 5,395,671
-----------
See Accompanying Notes to Financial Statements.
15
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 2000
-------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- ------
COMMON STOCKS (CONT'D)
INDIA (0.4%)
TELECOMMUNICATION SERVICES (0.4%)
Videsh Sanchar Nigam, Ltd. 144A GDR 162,700 $ 1,777,497
-----------
TOTAL INDIA 1,777,497
-----------
ITALY (1.4%)
TELECOMMUNICATION SERVICES (0.6%)
Olivetti S.p.A. 927,400 2,910,467
-----------
TRANSPORTATION (0.8%)
Concessioni e Costruzioni Autostrade S.p.A. 524,100 3,597,098
-----------
TOTAL ITALY 6,507,565
-----------
JAPAN (7.8%)
CAPITAL GOODS (2.2%)
Furukawa Electric Co., Ltd. 321,000 10,325,090
-----------
CONSUMER DURABLES & APPAREL (1.0%)
Sony Corp. 26,400 2,946,087
Sony Corp. ADR 14,400 1,645,200
-----------
4,591,287
-----------
SOFTWARE & SERVICES (0.8%)
Softbank Corp. 28,100 3,712,889
-----------
TECHNOLOGY, HARDWARE, & EQUIPMENT (2.1%)
Matsushita Communication Industrial Co., Ltd. 36,700 5,076,364
Tokyo Electron, Ltd. 34,700 4,874,566
-----------
9,950,930
-----------
Telecommunication Services (1.7%)
NTT DoCoMo, Inc. 314 8,303,734
-----------
TOTAL JAPAN 36,883,930
-----------
MEXICO (1.7%)
TELECOMMUNICATION SERVICES (1.7%)
Grupo Iusacell S.A. de C.V. ADR** 159,232 2,030,208
Telefonos de Mexico S.A. de C.V. Cl. L ADR 111,800 6,086,112
-----------
8,116,320
-----------
TOTAL MEXICO 8,116,320
-----------
See Accompanying Notes to Financial Statements.
16
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 2000
-------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- ------
COMMON STOCKS (CONT'D)
NETHERLANDS (0.8%)
TELECOMMUNICATION SERVICES (0.8%)
Completel Europe N.V.** 155,600 $ 1,359,828
United Pan-Europe Communications N.V.** 102,774 2,513,591
-----------
3,873,419
-----------
TOTAL NETHERLANDS 3,873,419
-----------
PORTUGAL (1.6%)
TELECOMMUNICATION SERVICES (1.6%)
Portugal Telecom S.A. 458,720 4,779,650
Telecel-Comunicacoes Pessoais S.A.** 195,800 2,579,774
-----------
7,359,424
-----------
TOTAL PORTUGAL 7,359,424
-----------
SINGAPORE (0.8%)
TECHNOLOGY HARDWARE & EQUIPMENT (0.8%)
Chartered Semiconductor Manufacturing Ltd. ADR** 43,100 3,658,112
-----------
TOTAL SINGAPORE 3,658,112
-----------
SOUTH KOREA (3.9%)
TECHNOLOGY HARDWARE & EQUIPMENT (1.4%)
Samsung Electronics Co. 27,200 6,709,768
-----------
TELECOMMUNICATION SERVICES (2.5%)
Hanaro Telecom, Inc.** 352,300 1,849,341
Hansol M.com Co., Ltd.** 132,100 1,697,849
Korea Telecom Corp. ADR 112,100 4,245,787
SK Telecom Co., Ltd. ADR 158,210 4,054,131
-----------
11,847,108
-----------
TOTAL SOUTH KOREA 18,556,876
-----------
SPAIN (0.8%)
TELECOMMUNICATION SERVICES (0.8%)
Telefonica S.A.** 93,300 1,791,663
Telefonica S.A. ADR** 36,551 2,094,829
-----------
3,886,492
-----------
TOTAL SPAIN 3,886,492
-----------
SWEDEN (1.9%)
TECHNOLOGY HARDWARE & EQUIPMENT (1.5%)
Telefonaktiebolaget L.M. Ericsson Cl. B 262,200 5,293,338
Telefonaktiebolaget L.M. Ericsson ADR 100,000 2,050,000
-----------
7,343,338
-----------
See Accompanying Notes to Financial Statements.
17
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 2000
-------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- ------
COMMON STOCKS (CONT'D)
SWEDEN (CONT'D)
TELECOMMUNICATION SERVICES (0.4%)
Tele1 Europe Holding AB** 150,300 $ 1,847,647
-----------
TOTAL SWEDEN 9,190,985
-----------
TAIWAN (2.4%)
TECHNOLOGY HARDWARE & EQUIPMENT (2.4%)
Realtek Semiconductor Corp.** 633,000 4,767,137
United Microelectronics Corp.** 2,500,000 6,637,920
-----------
11,405,057
-----------
TOTAL TAIWAN 11,405,057
-----------
THAILAND (0.6%)
TELECOMMUNICATION SERVICES (0.6%)
TelecomAsia Corp. Public Co., Ltd.** 3,478,700 2,808,587
TelecomAsia Corp. Public Co., Ltd.,
Rights Strike .3077 THB** 1,599,978 0
-----------
2,808,587
-----------
TOTAL THAILAND 2,808,587
-----------
UNITED KINGDOM (4.1%)
SOFTWARE & SERVICES (0.5%)
NDS Group plc ADR** 28,700 2,245,775
-----------
TELECOMMUNICATION SERVICES (3.6%)
British Telecommunications plc 287,500 3,660,234
British Telecommunications plc ADR 3,800 485,450
COLT Telecom Group plc ADR** 20,763 2,813,386
Vodafone Group plc 1,445,042 5,850,307
Vodafone Group plc ADR 102,100 4,179,719
-----------
16,989,096
-----------
TOTAL UNITED KINGDOM 19,234,871
-----------
UNITED STATES (49.8%)
MEDIA (8.3%)
AT&T Corp. - Liberty Media Group Class A** 219,000 4,681,125
Comcast Corp. - Special Class A** 200,000 7,450,000
Emmis Communications Corp.** 110,000 3,609,375
Fox Entertainment Group, Inc.** 100,600 2,911,112
Gemstar-TV Guide International, Inc.** 78,876 7,118,559
Infinity Broadcasting Corp.** 80,000 3,030,000
Time Warner, Inc. 63,597 5,437,543
Viacom, Inc. Class B** 70,335 4,734,425
-----------
38,972,139
-----------
See Accompanying Notes to Financial Statements.
18
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 2000
-------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- ------
COMMON STOCKS (CONT'D)
United States (cont'd)
SOFTWARE & SERVICES (3.8%)
America Online** 60,108 $ 3,523,831
Go2Net, Inc.** 57,300 3,953,700
Microsoft Corp.** 67,000 4,677,437
Rhythms NetConnections, Inc.** 167,000 1,503,000
VeriSign, Inc.** 12,900 2,565,487
Yahoo, Inc.** 13,732 1,668,438
-----------
17,891,893
-----------
TECHNOLOGY HARDWARE & EQUIPMENT (16.0%)
Advanced Micro Devices, Inc.** 67,000 2,520,875
Applied Materials, Inc.** 60,000 5,178,750
Broadcom Corp. Class A** 20,424 5,106,000
Cisco Systems** 81,788 5,612,702
Gateway, Inc.** 57,000 3,881,700
General Motors Corp. Class H** 80,000 2,650,000
Harris Corp. 194,000 5,832,125
Intel Corp. 39,600 2,965,050
Lucent Technologies 111,000 4,641,188
Motorola, Inc. 137,900 4,973,019
PMC-Sierra, Inc.** 27,100 6,395,600
QUALCOMM, Inc.** 40,200 2,406,975
Sanmina Corp.** 65,400 7,717,200
SBA Communications Corp.** 75,000 3,346,875
Sun Microsystems, Inc.** 59,000 7,489,313
Texas Instruments, Inc. 70,600 4,725,788
-----------
75,443,160
-----------
TELECOMMUNICATION SERVICES (21.7%)
Advanced Fibre Communications, Inc.** 125,000 6,607,422
Allegiance Telecom, Inc.** 48,500 2,415,906
AT&T Corp. 73,000 2,299,500
AT&T Wireless Group** 200,000 5,237,500
BellSouth Corp. 70,300 2,623,069
Broadwing, Inc.** 132,600 3,704,513
Covad Communications Group, Inc.** 132,000 2,153,250
Crown Castle International Corp.** 87,500 3,035,156
EchoStar Communications Corp.** 125,500 6,118,125
Intermedia Communications, Inc.** 244,100 5,065,075
Leap Wireless International, Inc.** 59,500 4,722,813
Level 3 Communications, Inc.** 29,000 2,529,797
McLeodUSA, Inc. Class A**/# 284,200 4,493,913
Nextel Communications, Inc. Class A** 69,000 3,825,188
See Accompanying Notes to Financial Statements.
19
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 2000
-------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- ------
COMMON STOCKS (CONT'D)
UNITED STATES (CONT'D)
NEXTLINK Communications, Inc.** 263,100 $ 9,224,944
Qwest Communications International, Inc.** 161,052 8,314,310
SBC Communications, Inc. 206,321 8,613,902
Time Warner Telecom, Inc. Class A** 86,800 5,636,575
Verizon Communications 111,532 4,865,584
Western Wireless Corp.** 52,200 2,668,725
WinStar Communications, Inc.** 80,000 2,150,000
WorldCom, Inc.** 169,292 6,179,158
-----------
102,484,425
-----------
TOTAL UNITED STATES 234,791,617
-----------
TOTAL COMMON STOCKS (Cost $434,767,294) 463,881,147
-----------
TOTAL INVESTMENTS AT VALUE (98.4%) (Cost $434,767,294*) 463,881,147
OTHER ASSETS IN EXCESS OF LIABILITIES (1.6%) 7,574,305
-----------
TOTAL NET ASSETS (100.0%) $471,455,452
===========
* Cost for Federal income tax purposes at August 31, 2000
is $436,087,029. The gross appreciation (depreciation)
on a tax basis is as follows:
Gross Appreciation $74,010,817
Gross Depreciation (46,216,699)
-----------
Net Appreciation $27,794,118
===========
** Non-income producing securities.
# Security or a portion thereof is out on loan.
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipts
GDR = Global Depository Receipts
THB = Thailand Baht
See Accompanying Notes to Financial Statements.
20
<PAGE>
WARBURG PINCUS GLOBAL HEALTH SCIENCES FUND
SCHEDULE OF INVESTMENTS
August 31, 2000
-------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- ------
COMMON STOCKS (91.2%)
ISRAEL (0.7%)
PHARMACEUTICALS (0.7%)
Teva Pharmaceutical Industries, Ltd. PLC ADR 10,700 $ 648,687
-----------
TOTAL ISRAEL 648,687
-----------
SWITZERLAND (1.8%)
PHARMACEUTICALS (1.8%)
Serono SA 1,400 1,642,266
-----------
TOTAL SWITZERLAND 1,642,266
-----------
UNITED STATES (88.7%)
COMMUNICATIONS & MEDIA (1.1%)
Healtheon WebMD Corp.** 56,000 987,000
-----------
FINANCIAL SERVICES (0.6%)
Aetna, Inc. 9,800 548,187
-----------
HEALTHCARE (19.0%)
Affymetrix, Inc.** 18,800 1,485,200
Allergan, Inc. 10,400 760,500
ALZA Corp.** 32,200 2,435,125
Baxter International, Inc. 16,000 1,332,000
Foundation Health Systems, Inc. Class A** 43,900 770,994
HCA-The Healthcare Co. 22,300 769,350
Health Management Associates, Inc. Class A** 150,000 2,446,875
Hooper Holmes, Inc. 161,800 1,891,037
Inhale Therapeutic Systems, Inc.** 12,600 636,300
LifePoint Hospitals, Inc.** 25,800 777,225
MiniMed, Inc.** 21,600 1,550,812
Tenet Healthcare Corp.** 21,500 666,500
UnitedHealth Group Inc. 9,500 897,750
Wellpoint Health Networks, Inc.** 9,200 794,075
-----------
17,213,743
-----------
INDUSTRIAL MFG. & PROCESSING (6.9%)
PE Corp - PE Biosystems Group 23,400 2,301,975
PE Corp. - Celera Genomics Group** 17,800 1,930,187
Waters Corp.** 25,400 2,020,887
-----------
6,253,049
-----------
PHARMACEUTICALS (61.2%)
Alkermes, Inc.** 19,200 888,000
Alpharma, Inc. Class A 19,000 1,075,875
American Home Products Corp. 14,000 758,625
Amgen, Inc.** 19,300 1,463,181
See Accompanying Notes to Financial Statements.
21
<PAGE>
WARBURG PINCUS GLOBAL HEALTH SCIENCES FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 2000
-------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- ------
COMMON STOCKS (CONT'D)
UNITED STATES (CONT'D)
Angiotech Pharmaceuticals, Inc.** 30,700 $ 1,389,175
Antigenics, Inc.** 26,100 440,437
Biogen, Inc.** 12,400 857,150
Biomarin Pharmaceutical, Inc.** 64,000 1,080,000
Cardinal Health, Inc. 20,600 1,685,338
Celgene Corp.** 27,600 2,042,400
Dyax Corp.** 56,000 1,960,000
Forest Laboratories, Inc.** 21,800 2,133,675
Genaissance Pharmaceuticals, Inc.** 31,000 691,688
Genentech, Inc.** 16,000 3,048,000
Genzyme Corp.** 18,600 1,396,163
Gilead Sciences, Inc.** 15,700 1,695,600
IDEC Pharmaceuticals Corp.** 20,000 2,792,500
Immunex Corp.** 32,100 1,613,025
Inspire Pharmaceuticals, Inc.** 74,700 1,307,250
Ivax Corp. 42,200 1,461,175
Jones Pharma, Inc. 32,700 1,169,025
King Pharmaceuticals, Inc.** 36,900 1,185,413
Lilly (Eli) & Co. 16,700 1,219,100
Medarex, Inc.** 13,500 1,491,750
Medicines Co.** 96,600 2,415,000
Medimmune, Inc.** 25,300 2,128,363
Merck & Co., Inc. 9,000 628,875
Neorx Corp.** 42,100 799,900
Pfizer, Inc. 95,725 4,140,106
Pharmacia Corp. 43,197 2,529,724
Pharsight Corp.** 135,500 1,304,188
QLT PhotoTherapeutics, Inc.** 22,100 1,636,781
Ribozyme Pharmaceuticals, Inc.** 27,900 805,613
Schering-Plough Corp. 11,700 469,463
Sepracor, Inc.** 7,000 770,000
United Therapeutics Corp.** 11,700 1,010,405
Watson Pharmaceuticals, Inc.** 32,000 1,974,000
-----------
55,456,963
-----------
TOTAL UNITED STATES 80,458,942
-----------
TOTAL COMMON STOCKS (Cost $52,779,979) 82,749,895
-----------
See Accompanying Notes to Financial Statements.
22
<PAGE>
WARBURG PINCUS GLOBAL HEALTH SCIENCES FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 2000
-------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- ------
SHORT TERM INVESTMENTS (11.6%)
Institutional Money Market Trust 7,627,041 $ 7,627,042
RBB Money Market Portfolio 2,937,717 2,937,717
-----------
TOTAL SHORT TERM INVESTMENTS (Cost $10,564,759) 10,564,759
-----------
TOTAL INVESTMENTS AT VALUE (102.8%) (Cost $63,344,738*) 93,314,654
LIABILITIES IN EXCESS OF OTHER ASSETS (-2.8%) (2,514,014)
-----------
TOTAL NET ASSETS (100.0%) $90,800,640
===========
* Cost for Federal income tax purposes at August 31, 2000
is $63,417,871. The gross appreciation (depreciation) on
a tax basis is as follows:
Gross Appreciation $30,450,901
Gross Depreciation (554,118)
-----------
Net Appreciation $29,896,783
===========
** Non-income producing securities.
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipt
See Accompanying Notes to Financial Statements.
23
<PAGE>
WARBURG PINCUS FUNDS
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2000
-------------------------------------------------------------------------------
<TABLE>
GLOBAL GLOBAL
EUROPEAN TELECOMMUNICATIONS HEALTH SCIENCES
EQUITY FUND FUND FUND
------------ ------------- ------------
<S> <C> <C> <C>
ASSETS
Investments, at value (cost - $27,001,779, $434,767,294
and $63,344,738 respectively) $ 29,349,317 $ 463,881,147 $ 93,314,654
------------ ------------- ------------
Foreign currency (cost - $555,694) -- 555,578 --
Cash 81,283 -- --
Collateral received for securities loaned -- 8,594,600 --
Receivable for investments sold 1,222,285 11,904,130 --
Receivable for Fund shares sold 580,301 2,890,621 660,567
Receivable from investment adviser 26,249 -- --
Deferred organizational/offering costs -- -- 7,863
Dividends and interest receivable 87,191 205,081 41,352
Prepaid expenses and other assets 38,713 85,768 17,689
------------ ------------- ------------
Total Assets 31,385,339 488,116,925 94,042,125
------------ ------------- ------------
LIABILITIES
Payable upon return of securities loaned -- 8,594,600 --
Payable for investments purchased 1,247,125 2,943,797 3,078,494
Payable for Fund shares repurchased 45,703 1,751,342 38,520
Due to custodian -- 2,520,787 --
Advisory fee payable -- 303,941 29,392
Administration fee payable 1,257 19,672 6,586
Distribution fee payable 6,287 98,411 16,487
Accrued expenses payable 77,844 428,923 72,006
------------ ------------- ------------
Total Liabilities 1,378,216 16,661,473 3,241,485
------------ ------------- ------------
NET ASSETS
Capital stock, $0.001 par value 2,518 6,823 3,619
Paid-in capital 23,347,336 429,535,968 52,228,372
Accumulated net realized gain from investments
and foreign currency related transactions, if any 4,315,009 12,816,059 8,598,733
Net unrealized appreciation from investments
and foreign currency related items 2,342,260 29,096,602 29,969,916
------------ ------------- ------------
Net Assets $ 30,007,123 $ 471,455,452 $ 90,800,640
============ ============= ============
COMMON SHARES
Net assets $ 30,007,123 $ 471,455,452 $ 90,800,640
------------ ------------- ------------
Shares outstanding 2,508,959 6,821,488 3,791,995
------------ ------------- ------------
Net asset value, offering price and redemption price
per share $ 11.96 $ 69.11 $ 23.95
============ ============= ============
</TABLE>
See Accompanying Notes to Financial Statements.
24
<PAGE>
WARBURG PINCUS FUNDS
STATEMENT OF OPERATIONS
For the year of period ended August 31, 2000
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL GLOBAL
EUROPEAN TELECOMMUNICATIONS HEALTH SCIENCES
EQUITY FUND FUND FUND *
------------ ------------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 503,564 $ 1,371,530 $ 162,616
Interest 101,248 1,201,947 151,586
Securities lending 12,131 203,546 --
Foreign taxes withheld (74,468) (77,534) (672)
------------ ------------- ------------
Total Investment Income 542,475 2,699,489 313,530
------------ ------------- ------------
EXPENSES:
Investment advisory fees 309,531 3,596,187 479,215
Administration fees 69,148 803,240 96,502
Printing fees 150,218 106,833 24,374
Custodian fees 87,330 212,303 12,599
Distribution fees 77,089 899,136 119,804
Registration fees 74,602 163,236 33,522
Transfer agent fees 73,908 484,566 88,524
Interest expense 20,519 -- 422
Audit fees 15,828 13,869 15,150
Legal fees 12,002 33,125 15,573
Directors fees 9,325 8,042 9,458
Insurance expense 854 1,657 1,027
Offering/Organizational costs -- -- 4,941
Miscellaneous fees 9,356 30,003 6,007
------------ ------------- ------------
909,710 6,352,197 907,118
Less: fees waived, expenses reimbursed and
transfer agent offsets (459,850) (447,171) (145,165)
------------ ------------- ------------
Total Expenses 449,860 5,905,026 761,953
------------ ------------- ------------
Net Investment Income/(Loss) 92,615 (3,205,537) (448,423)
------------ ------------- ------------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY RELATED ITEMS
Net realized gain/(loss) from:
Security transactions 6,222,283 18,226,203 9,295,075
Foreign exchange transactions (259,418) (462,242) (3,322)
------------ ------------- ------------
5,962,865 17,763,961 9,291,753
------------ ------------- ------------
Net change in unrealized appreciation/(depreciation):
Investments 1,398,248 24,011,051 18,249,726
Translation of assets and liabilities in
foreign currencies (9,178) (17,422) --
------------ ------------- ------------
1,389,070 23,993,629 18,249,726
------------ ------------- ------------
Net gain on investments and foreign currency transactions 7,351,935 41,757,590 27,541,479
------------ ------------- ------------
Net increase in net assets resulting from operations $ 7,444,550 $ 38,552,053 $ 27,093,056
============ ============= ============
<FN>
* For the period November 1, 1999 to August 31, 2000.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
25
<PAGE>
WARBURG PINCUS FUNDS
STATEMENT OF CHANGES IN NET ASSETS
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EUROPEAN EQUITY FUND GLOBAL TELECOMMUNICATIONS FUND
----------------------------------- -----------------------------------
FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE YEAR
ENDED JANUARY 28, 1999* ENDED ENDED
AUGUST 31, 2000 TO AUGUST 31, 1999 AUGUST 31, 2000 AUGUST 31, 1999
--------------- ------------------ --------------- ------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income/(loss) $ 92,615 $ 213,741 $ (3,205,537) $ (67,321)
Net gain/(loss) on investments and
foreign currency transactions 7,351,935 (865,652) 41,757,590 7,197,021
------------ ------------ ------------- -----------
Net increase/(decrease) in net
assets resulting from operations 7,444,550 (651,911) 38,552,053 7,129,700
------------ ------------ ------------- -----------
FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Institutional shares (667) -- -- --
Common shares (134,704) -- -- --
Net realized capital gains:
Institutional shares -- -- -- --
Common shares -- -- (3,754,559) (179,290)
------------ ------------ ------------- -----------
Net decrease in net assets from
dividends and distributions (135,371) -- (3,754,559) (179,290)
------------ ------------ ------------- -----------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 125,018,796 40,739,940 737,422,782 68,055,242
Reinvestment of dividends and distributions 132,898 -- 3,567,097 167,194
Net asset value of shares redeemed (127,110,194) (15,431,585) (369,497,412) (10,725,448)
------------ ------------ ------------- -----------
Net increase/(decrease) in net assets
from capital share transactions (1,958,500) 25,308,355 371,492,467 57,496,988
------------ ------------ ------------- -----------
Total increase/(decrease) in net assets 5,350,679 24,656,444 406,289,961 64,447,398
NET ASSETS:
Beginning of period 24,656,444 -- 65,165,491 718,093
------------ ------------ ------------- -----------
End of period $ 30,007,123 $ 24,656,444 $ 471,455,452 $65,165,491
============ ============ ============= ===========
Undistributed net investment income $ -- $ 135,265 $ -- --
============ ============ ============= ===========
<FN>
* Inception Date
** Fiscal year end changed from October 31st to August 31.
</FN>
</TABLE>
<TABLE>
<CAPTION>
GLOBAL HEALTH SCIENCES FUND
----------------------------------------
FOR THE PERIOD FOR THE YEAR
NOVEMBER 1, 1999 ENDED
TO AUGUST 31, 2000** OCTOBER 31, 1999
-------------------- ------------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income/(loss) $ (448,423) $ (401,889)
Net gain/(loss) on investments and
foreign currency transactions 27,541,479 2,959,345
----------- -----------
Net increase/(decrease) in net
assets resulting from operations 27,093,056 2,557,456
----------- -----------
FROM DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Institutional shares -- --
Common shares -- --
Net realized capital gains:
Institutional shares -- --
Common shares -- --
----------- -----------
Net decrease in net assets from
dividends and distributions -- --
----------- -----------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 83,655,931 35,244,741
Reinvestment of dividends and distributions -- --
Net asset value of shares redeemed (67,522,268) (54,564,366)
----------- -----------
Net increase/(decrease) in net assets
from capital share transactions 16,133,663 (19,319,625)
----------- -----------
Total increase/(decrease) in net assets 43,226,719 (16,762,169)
NET ASSETS:
Beginning of period 47,573,921 64,336,090
----------- -----------
End of period $90,800,640 $47,573,921
=========== ===========
Undistributed net investment income $ -- $ --
=========== ===========
<FN>
* Inception Date
** Fiscal year end changed from October 31st to August 31.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
26-27
<PAGE>
WARBURG PINCUS EUROPEAN EQUITY FUNDS
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout each Period)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON INSTITUTIONAL
------------------------------------ --------------------------------------
FOR THE YEAR FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
ENDED JANUARY 28, 1999* ENDED JANUARY 28, 1999*
AUGUST 31, 2000 TO AUGUST 31, 1999 AUGUST 29, 2000** TO AUGUST 31, 1999
--------------- ------------------ ----------------- ------------------
<S> <C> <C> <C> <C>
PER SHARE DATA
Net asset value, beginning
of period $ 9.79 $ 10.00 $ 9.80 $ 10.00
---------- ---------- ---------- ----------
INVESTMENT ACTIVITIES:
Net investment income 0.03 0.08 0.07 0.09
Net gain/(loss) on investments
and foreign currency
transactions (both realized
and unrealized) 2.19 (0.29) 2.29 (0.29)
---------- ---------- ---------- ----------
Total from investment
operations 2.22 (0.21) 2.36 (0.20)
---------- ---------- ---------- ----------
Less Dividends and Distributions:
Dividends from net investment
income (0.05) -- (0.07) --
Distributions from net realized
capital gains -- -- -- --
---------- ---------- ---------- ----------
Total dividends and
distributions (0.05) -- (0.07) --
---------- ---------- ---------- ----------
Net asset value,
end of period $ 11.96 $ 9.79 $ 12.09 $ 9.80
========== ========== ========== ==========
Total return 22.69% (2.10)%3 24.07%3 (2.00)%3
Ratios/Supplemental Data:
Net assets, end of period
(000s omitted) $ 30,007 $ 24,588 $ -- $ 98
Ratio of expenses to average
net assets 1.46%1,2 1.46%1,4 1.16%1,2,4 1.16%1,4
Ratio of net investment income
to average net assets 0.30% 1.41%4 0.59%4 1.67%4
Portfolio turnover rate 186% 161%3 186%3 161%3
<FN>
1 Without the voluntary waiver of advisory fees and administration fees, the
ratios of expenses to average net assets for the Common Class would have been
2.93% for the year ended August 31, 2000 and 2.64% annualized for the period
ended August 31, 1999. Without the voluntary waiver of advisory fees and
administration fees, the ratios of expenses to average net assets for the
Institutional Class would have been 2.59% annualized for the period ended
August 29, 2000 and 2.29% annualized for the period ended August 31, 1999.
2 Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements resulted in a reductive to net
expense ratio by .01% for the year or period ended August 31, 2000. The
operating expense ratio after these arrangements was 1.45% for the Common
Class for the year ended August 31, 2000 and 1.15% annualized for the
Institutional Class for the period ended August 29, 2000.
3 Not Annualized.
4 Annualized.
* Inception Date.
** Last day of operations.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
28
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout each Period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON
---------------------------------------------------------
FOR THE PERIOD
FOR THE YEAR ENDED AUGUST 31, DECEMBER 4, 1996*
------------------------------------- TO AUGUST 31,
2000 1999 1998 1997
----------- ----------- ----------- -----------------
<S> <C> <C> <C> <C>
PER SHARE DATA
Net asset value, beginning of period $ 41.22 $ 20.54 $ 17.30 $ 15.00
-------- -------- -------- ----------
INVESTMENT ACTIVITIES:
Net investment income/(loss) (0.44) (0.04) (0.01) 0.02
Net gain on investments and foreign
currency transactions
(both realized and unrealized) 29.56 23.56 4.29 2.28
-------- -------- -------- ----------
Total from investment operations 29.12 23.52 4.28 2.30
-------- -------- -------- ----------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment
income -- -- -- --
Distributions from net realized
capital gains (1.23) (2.84) (1.04) --
-------- -------- -------- ----------
Total dividends and distributions (1.23) (2.84) (1.04) --
-------- -------- -------- ----------
NET ASSET VALUE, END OF PERIOD $ 69.11 $ 41.22 $ 20.54 $ 17.30
======== ======== ======== ==========
Total return 70.99% 120.73% 25.38% 15.33%3
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $471,455 $ 65,165 $ 718 $ 569
Ratio of expenses to average net assets 1.66%1,2 1.65%1 1.65%1 1.65%1,4
Ratio of net investment income/(loss) to
average net assets (0.89)% (0.35)% (0.03)% 0.16%4
Portfolio turnover rate 143% 203% 169% 43%3
<FN>
--------------------
1 Without the voluntary waiver of advisory fees and administration fees, the
ratios of expenses to average net assets for the Common Class would have been
1.77%, 2.52% and 6.86% for the years ended August 31, 2000, 1999 and 1998,
respectively, and 8.38% annualized for the period ended August 31, 1997.
2 Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements resulted in a reduction to the net
expense ratio by .02% for the year ended August 31, 2000. The operating
expense ratio after reflecting these arrangements was 1.64% for the year
ended August 31, 2000.
3 Not Annualized.
4 Annualized.
* Inception Date.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
29
<PAGE>
WARBURG PINCUS GLOBAL HEALTH SCIENCES FUND
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout each Period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON
-------------------------------------------------------------------
FOR THE PERIOD FOR THE PERIOD
NOVEMBER 1, 1999 FOR THE YEAR ENDED OCTOBER 31, DECEMBER 31, 1996*
TO AUGUST 31, ------------------------------- TO OCTOBER 31,
2000** 1999 1998 1997
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
PER SHARE DATA
Net asset value, beginning of period $ 14.92 $ 14.41 $ 12.22 $ 10.00
-------- -------- -------- --------
INVESTMENT ACTIVITIES:
Net investment loss (0.08) (0.13) (0.06) (0.02)
Net gains on investments and
foreign currency transactions
(both realized and unrealized) 9.11 0.64 2.97 2.24
-------- -------- -------- --------
Total from investment activities 9.03 0.51 2.91 2.22
-------- -------- -------- --------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income -- -- (0.04) --
Distributions from net realized
capital gains -- -- (0.68) --
-------- -------- -------- --------
Total dividends and distributions -- -- (0.72) --
-------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 23.95 $ 14.92 $ 14.41 $ 12.22
======== ======== ======== ========
Total return 60.52%1 3.54% 25.25% 22.20%1
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s omitted) $ 90,801 $ 47,574 $ 64,336 $ 18,246
Ratio of expenses to average
net assets(4) 1.61%2,3 1.59%3 1.59%3 1.59%2,3
Ratio of net investment income/
(loss) to average net assets (0.94)%2 0.62% (0.58)% (0.24)%2
Portfolio turnover rate 106%1 146% 63% 160%1
<FN>
------------------
1 Not Annualized.
2 Annualized.
3 Without the voluntary waiver of advisory fees and administration fees, the
ratios of expenses to average net assets for the Common Class would have been
1.89% annualized for the period November 1, 1999 to August 31, 2000, 1.88%
and 1.97% for the years ended October 31, 1999 and 1998, respectively, and
3.42% annualized for the period December 31, 1996 to October 31, 1997.
4 Interest earned on uninvested cash balances is used to offset positions of
the transfer agent expense. These arrangements resulted in a reduction to
the Common Shares net expense ratio by .02% annualized for the period
November 1, 1999 to August 31, 2000. These arrangements had no affect on the
fund's expense ratio for the previous periods. The Common Shares operating
expense ratio after reflecting these arrangements was 1.59% annualized for
the period November 1, 1999 to August 31, 2000.
* Inception Date.
** Effective May 1, 2000, Global Health Sciences changed its fiscal and tax year
ends from October 31st to August 31st.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
30
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS
August 31, 2000
--------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Warburg Pincus Funds covered in this report are comprised of Warburg,
Pincus European Equity Fund, Inc. ("European Equity"), Warburg, Pincus Global
Telecommunications Fund, Inc. ("Global Telecommunications") and Warburg, Pincus
Global Health Sciences Fund, Inc. (formerly, Warburg Pincus Health Sciences
Fund, Inc.) ("Global Health Sciences") (each, a "Fund" and collectively, the
"Funds"), which are registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as non-diversified (other than European Equity which
is diversified), open-end management investment companies. Each Fund is
authorized to offer three classes of shares: Common, Advisor and Institutional,
although only Common shares of each Fund are currently offered. The
Institutional shares for European Equity were exchanged for common shares of the
same Fund and ceased operations on August 29, 2000. Common shares for each Fund
bear expenses paid pursuant to a shareholder servicing and distribution
agreement at an annual rate not to exceed .25% of the average daily net asset
value of the Fund's outstanding Common shares. In addition, the Common shares
bear a co-administration fee.
Global Health Sciences changed its fiscal and tax year ends from October 31st
to August 31st, which was approved by the Fund's Board of Directors on May 1,
2000.
A) SECURITY VALUATION -- The net asset value of each Fund is
determined daily as of the close of regular trading on The New York Stock
Exchange Inc. Each Fund's securities for which market quotations are
readily available are valued at market value, which is currently determined
using the last reported sales price. If no sales are reported, as in the
case of some securities traded over-the-counter, the securities are valued
at the mean between the last reported bid and asked prices. All other
securities and assets are valued as determined in good faith by the Fund's
Board of Directors. Short-term obligations with maturities of 60 days or
less are valued at amortized cost, which approximates market value.
B) FOREIGN CURRENCY TRANSACTIONS -- Transactions denominated in
foreign currencies are recorded in each Fund's records at the current
prevailing exchange rates. Asset and liability accounts that are
denominated in a foreign currency are adjusted daily to reflect current
exchange rates. Transaction gains or losses resulting from changes in
exchange rates during the reporting period or upon settlement of the
foreign currency transaction are reported in operations for the current
period. It is not practical to isolate that portion of both realized and
unrealized gains and losses on investments in the statement of
31
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 2000
--------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D)
operations that result from fluctuations in foreign currency exchange
rates. Each Fund reports certain foreign currency related transactions as
components of realized gains for financial reporting purposes, whereas such
components are treated as ordinary income (loss) for Federal income tax
purposes.
C) SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security
transactions are accounted for on the trade date. The cost of investments
sold is determined by use of the specific identification method for both
financial reporting and income tax purposes. Interest income is recorded on
the accrual basis. Dividends are recorded on the ex-dividend date. Certain
expenses are class specific expenses and vary by class. Expenses not
directly attributable to a specific Fund or class are allocated based on
relative net assets of each Fund and class, respectively.
D) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Each Fund
calculates its dividends from net investment income. Net investment income
includes interest accrued and dividends earned on the Fund's portfolio
securities for the applicable period less applicable expense. Each Fund
will distribute substantially all of its net realized capital gains and all
net investment income, if any, to its shareholders at least annually.
The character of distributions made during the year for net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes due to generally accepted
accounting principles (GAAP) and tax differences in the character of income
and expense recognition. These differences are primarily due to differing
treatments for net operating losses and forward foreign currency contracts.
To the extent these differences are permanent in nature, such amounts are
reclassified within capital accounts based on U.S. tax-basis treatment.
Temporary differences do not require reclassification.
At August 31, 2000, European Equity, Global Telecommunications and
Global Health Sciences reclassified $(92,509), $3,205,537 and $448,423,
respectively, from accumulated net realized gain/(loss) to undistributed
net investment income.
32
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 2000
--------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D)
E) FEDERAL INCOME TAXES -- No provision is made for Federal taxes
as it is each Fund's intention to qualify for and elect the tax treatment
applicable to regulated investment companies under the Internal Revenue
Code of 1986, as amended and make the requisite distributions to its
shareholders which will be sufficient to relieve it from Federal income and
excise taxes.
F) USE OF ESTIMATES -- The preparation of financial statements in
conformity with GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
G) REPURCHASE AGREEMENTS -- Money market instruments may be
purchased from banks and non-bank dealers subject to the seller's agreement
to repurchase them at an agreed upon date and price. Collateral for
repurchase agreements may have longer maturities than the maximum
permissible remaining maturity of portfolio investments. The seller will be
required on a daily basis to maintain the value of the securities subject
to the agreement at not less than the repurchase price. The agreements are
conditional upon the collateral being deposited under the Federal Reserve
book-entry system or held in a separate account by each Fund's custodian or
an authorized securities depository.
H) SECURITIES LENDING -- Loans of the securities are required at
all times to be secured by collateral at least equal to 102% of the market
value of domestic securities on loan including any accrued interest thereon
and 105% of the market value of foreign securities on loan including any
accrued interest thereon. Cash collateral received by the Fund in
connection with securities lending activity is invested in the Boston
Global Investment Trust. However, in the event of default or bankruptcy by
the other party to the agreement, realization and/or retention of the
collateral may be subject to legal proceedings. The market value of
securities on loan to brokers and the value of collateral held by each Fund
with respect to such loans (including right to draw on letter of credit) at
August 31, 2000 is as follows:
MARKET VALUE OF VALUE OF
FUND SECURITIES LOANED COLLATERAL RECORDED
---------------------------- ----------------- -------------------
Global Telecommunications $8,394,763 $8,594,60
33
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 2000
--------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D)
I) OTHER -- Securities denominated in currencies other than U.S.
dollars are subject to changes in value due to fluctuations in exchange
rates.
Some countries in which the Funds invest require governmental
approval for the repatriation of investment income, capital or the proceeds
of sales of securities by foreign investors. In addition, if there is a
deterioration in a country's balance of payments or for other reasons, a
country may impose temporary restrictions on foreign capital remittances
abroad.
The securities exchanges of certain foreign markets are
substantially smaller, less liquid and more volatile than the major
securities markets in the United States. Consequently, acquisition and
disposition of securities by each Fund may be inhibited. In addition, a
significant proportion of the aggregate market value of equity securities
listed on the major securities exchanges in emerging markets are held by a
smaller number of investors. This may limit the number of shares available
for acquisition or disposition by a Fund.
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Pursuant to Investment Advisory Agreements, Credit Suisse Asset Management,
LLC ("CSAM") an indirect, wholly-owned subsidiary of Credit Suisse Group, serves
as investment advisor for each of the three Funds described herein.
For its advisory services, CSAM is entitled to receive a fee, computed daily
and payable monthly at 1.00% of average daily net assets of each Fund.
CSAM may, at its discretion, voluntarily waive all or any portion of its
advisory fee for any of the Funds. For the year or period ended August 31, 2000
advisory fees and waivers for each of the three investment Funds were as
follows:
GROSS NET
FUND ADVISORY FEE WAIVER ADVISORY FEE
---------------------- ------------ ----------- ------------
European Equity $ 309,531 $(309,531) $ 0
Global Telecommunications 3,596,187 (208,789) 3,387,398
Global Health Sciences 479,215 (108,512) 370,703
34
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 2000
--------------------------------------------------------------------------------
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES -- (CONT'D)
CSAM reimbursed expenses of European Equity in the amount of $93,965 for the
year ended August 31, 2000.
For its sub-advisory services, CSAM pays Credit Suisse Asset Management
Limited ("CSAM Limited"), an indirect, wholly-owned subsidiary of Credit Suisse
Group, an annual fee equal to .50% of the net quarterly amount (after fee
waivers and reimbursements) received by CSAM for CSAM's services as European
Equity's adviser. For the year ended August 31, 2000, CSAM Limited was not
entitled to receive any fees from CSAM for sub-advisory services provided to
European Equity, all of which fees were waived.
State Street Bank and Trust Company ("State Street"), serves as each Fund's
transfer and dividend disbursement agent. State Street has delegated most of its
Fund service obligations to Boston Financial Data Services, Inc. (BFDS), a 50%
owned subsidiary of State Street.
The Funds have an arrangement with their transfer agent whereby interest
earned on uninvested cash balances was used to offset a portion of their
transfer agent expenses.
For the year or period ended August 31, 2000, the Funds received credits or
reimbursements under this arrangement as follows:
FUND AMOUNT
---------------------- --------
European Equity $ 2,623
Global Telecommunications 58,573
Global Health Sciences 11,236
Counsellors Fund Services, Inc. ("CFSI"), a wholly-owned subsidiary of Credit
Suisse Asset Management, LLC. served as co-administrator of each Fund (except
Global Health Sciences) until November 1, 1999. On November 1, 1999 Credit
Suisse Asset Management Securities, Inc. ("CSAMSI") replaced CFSI as
co-administrator to each Fund. PFPC Inc. ("PFPC"), an indirect, wholly-owned
subsidiary of PNC Financial Services Group, Inc., also serves as each Fund's
co-administrator. For administration services, each Fund, except Global
Telecommunications, pays CSAMSI a fee calculated at an annual rate of .10% of
the Fund's average daily net assets of the Common shares. For Global
Telecommunications, CSAMSI is entitled to receive a fee calculated at an annual
rate of .05% of the Fund's first $125 million in average daily nets assets of
the Common shares and .10% of average daily net assets of the Common shares over
$125 million. No compensation is payable by the Funds to CSAMSI for
co-administration services for the Institutional shares.
35
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 2000
--------------------------------------------------------------------------------
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES -- (CONT'D
CFSI, at its discretion, voluntarily waived a portion of its
co-administration fees for the Funds. For the period September 1, 1999 to
October 31, 1999, co-administration fees earned and waived by CFSI on the Common
shares were as follows:
GROSS NET
FUND CO-ADMINISTRATION FEE WAIVER CO-ADMINISTRATION FEE
--------------------- ---------------- ---------- ---------------
European Equity $ 3,988 $ (1,995) $ 1,993
Global Telecommunications 6,554 -- 6,554
CSAMSI may, at its discretion, voluntarily waive all or any portion of its
administrative fee for any of the Funds. For the period November 1, 1999 to
August 31, 2000, co-administrative service fees earned and waived CSAMSI on the
Common shares were as follows:
GROSS NET
FUND CO-ADMINISTRATION FEE WAIVER CO-ADMINISTRATION FEE
--------------------- ---------------- ---------- ---------------
European Equity $ 26,847 $(13,423) $ 13,424
Global Telecommunications 353,064 (179,809) 173,255
Global Health Sciences 47,921 -- 47,921
For administration services, PFPC received a fee for the period September 1,
1999 to July 31, 2000 calculated on each Fund's average daily net assets,
subject to a minimum annual fee and exclusive of out-of-pocket expenses, as
follows:
FUND ANNUAL RATE
---------------------- --------------------------
European Equity .12% for first $250 million
.10% for next $250 million
.08% for next $250 million
.05% for over $750 million
Global Telecommunications .125%
Global Health Sciences .10% for first $500 million
.075% for next $1 billion
.05% for over $1.5 billion
As of August 1, 2000, PFPC receives a fee for administration services
calculated at an annual rate of .11% of each Fund's first $500 million in
average daily net assets .09% of the next $1 billion in average daily net
assets, and .07% of average daily net assets over $1.5 billion, subject to a
minimum annual fee and exclusive of out of pocket expenses. PFPC may, at its
discretion, voluntarily waive all or any portion of it administration fee for
any of the Funds. For the year or period ended August 31, 2000, the
co-administration fees earned and waived by PFPC were as follows:
36
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 2000
--------------------------------------------------------------------------------
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES -- (CONT'D)
GROSS CO-ADMINISTRATIVE NET CO-ADMINISTRATIVE
FUND SERVICE FEE WAIVER SERVICE FEE
--------------------- ------------------ --------- -----------
European Equity $ 38,313 $ (38,313) $ 0
Global Telecommunications 443,622 -- 443,622
Global Health Sciences 48,581 (25,417) 23,164
In addition to serving as each Funds co-administrator, CSAMSI served as
distributor of each Fund's shares until January 1, 2000. On January 1, 2000,
Provident Distributors, Inc. ("PDI") replaced CSAMSI as distributor to each
fund. On August 1, 2000, CSAMSI replaced PDI as distributor to fund. No
compensation is payable by any of the Funds to PDI or CSAMSI for distribution
services, but CSAMSI receives compensation from each Fund's Common shares under
the co-administration agreement for shareholder servicing and distribution. For
the Shareholder Servicing and Distribution Plan on the Common shares, CSAMSI
receives a fee calculated at an annual rate of .25% of the average daily net
assets of the Common shares of each Fund. For the year or period ended August
31, 2000, shareholder services fees, earned by CSAMSI were as follows:
FUND DISTRIBUTION FEE
--------------------- ----------------
European Equity $ 77,089
Global Telecommunications 899,136
Global Health Sciences 119,804
NOTE 3. PURCHASES AND SALES OF SECURITIES
For the year or period ended August 31, 2000, purchases and sales of
investment securities (other than short-term investments) were as follows:
INVESTMENT SECURITIES
----------------------------
FUND PURCHASES SALES
--------------------- -------------- ------------
European Equity $ 51,855,094 $57,290,665
Global Telecommunications 834,443,375 473,207,962
Global Health Sciences 67,996,218 58,443,790
37
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 2000
--------------------------------------------------------------------------------
NOTE 4. CAPITAL SHARES
Transactions in capital shares for each period were as follows:
<TABLE>
<CAPTION>
EUROPEAN EQUITY FUND
-----------------------------------------------------------------------------------------------
COMMON INSTITUTIONAL
--------------------------------------------- ----------------------------------------------
FOR THE PERIOD FOR THE FOR THE PERIOD
FOR THE YEAR ENDED JANUARY 28, 1999* PERIOD ENDED JANUARY 28, 1999*
AUGUST 31, 2000 THROUGH AUGUST 31, 1999 AUGUST 29, 2000** THROUGH AUGUST 31, 1999
----------------------------- ------------------------ ------------------ -----------------------
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE
----------- ------------- --------- ----------- ------- --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Shares sold/
exchanged 10,330,170 $ 125,018,796 4,115,201 $40,639,910 -- $ -- 10,003 $ 100,030
Shares issued in
reinvestment
of dividends 11,320 132,331 -- -- 48 567 -- --
Shares repurchased (10,342,282 (126,988,697) (1,605,450) (15,431,585 (10,051) (121,497) -- --
----------- ------------- --------- ----------- ------- --------- ------- ---------
Net increase/
(decrease) (792) $ (1,837,570) 2,509,751 $25,208,325 (10,003) $(120,930) 10,003 $ 100,030
=========== ============= ========= =========== ======= ========= ======= =========
</TABLE>
GLOBAL TELECOMMUNICATIONS FUND
---------------------------------------------------
COMMON
---------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
AUGUST 31, 2000 AUGUST 31, 1999
-------------------- --------------------
SHARES VALUE SHARES VALUE
---------- ------------- --------- ------------
Shares sold 10,430,600 $ 737,422,782 1,820,386 $ 68,055,242
Shares issued in
reinvestment of
dividends 57,720 3,567,097 5,883 167,194
Shares repurchased (5,247,593) (369,497,412) (280,472) (10,725,448)
---------- ------------- --------- ------------
Net increase 5,240,727 $ 371,492,467 1,545,79 $ 57,496,988
========== ============= ========= ============
*Inception Date.
**Ceased operations.
38
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 2000
--------------------------------------------------------------------------------
NOTE 4. CAPITAL SHARES -- (CONT'D)
GLOBAL HELATH SCIENCES FUND
---------------------------------------------------
COMMON
---------------------------------------------------
FOR THE PERIOD
NOVEMBER 1, 1999 FOR THE YEAR ENDED
TO AUGUST 31, 2000 AUGUST 31, 1999
-------------------- ---------------------
SHARES VALUE SHARES VALUE
---------- ------------- --------- ------------
Shares sold 4,232,530 $ 83,655,931 2,314,620 $ 35,244,741
Shares issued in
reinvestment of
dividends -- -- -- --
Shares repurchased (3,628,441) (67,522,268) (3,590,606) (54,564,366)
---------- ------------- --------- ------------
Net increase/(decrease) 604,089 $ 16,133,663 (1,275,986) $(19,319,625)
========== ============= ========= ============
***Effective May 1, 2000, GlobalHealth Sciences Fund changed its fiscal and tax
year ends from October 31st to August 31st, which was approved by the Fund's
Board of Directors on May 1, 2000.
On August 31, 2000, the number of shareholders that held 5% or more of the
outstanding shares are as follows:
NUMBER OF APPROXIMATE PERCENTAGE
SHAREHOLDERS OF OUTSTANDING SHARES
------------ ---------------------
European Equity Common Shares 2 78.75%
Global Telecommunications Common Shares 2 56.80
Global Health Sciences Common Shares 2 48.95
NOTE 5. FORWARD FOREIGN CURRENCY CONTRACTS
The Funds will generally enter into forward foreign currency exchange
contracts as a way of managing foreign exchange rate risk and enhance total
return. Each Fund may enter into these contracts to fix the U.S. dollar value of
a security that it has agreed to buy or sell for the period between the date the
trade was entered into and the date the security is delivered and paid for. Each
Fund may also use these contracts to hedge the U.S. dollar value of securities
denominated in foreign currencies that it already owns. The Fund may enter into
these contracts for the purchase or sale of a specific foreign currency at a
fixed price on a future date as a hedge or cross-hedge against either
transactions or portfolio positions.
Forward foreign currency contracts are valued at the forward rate, and are
marked-to-market daily. The change in market value is recorded by each Fund as
an unrealized gain or loss. When the contract is closed, each Fund records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed. Each Fund's
policy is to include this portion of realized and unrealized gains
39
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 2000
--------------------------------------------------------------------------------
NOTE 5. FORWARD FOREIGN CURRENCY CONTRACTS (CONT'D)
and losses on investments that result from foreign currency changes with other
foreign currency gains and losses on the Statement of Operations.
At August 31, 2000, there were no open foreign currency contracts.
NOTE 6. LINE OF CREDIT
The Funds, together with other funds advised by CSAM, have established a $350
million committed and a $75 million uncommitted, unsecured, line of credit
facility ("Credit Facility") with Deutche Bank, AG as administrative agent,
State Street Bank and Trust Company as operations agents, Bank of Nova Scotia as
syndication agent and certain other lenders, for temporary or emergency purposes
primarily relating to unanticipated Fund share redemption. Under the terms of
the Credit Facility, the Funds with access to the Credit Facility pay an
aggregate commitment fee at a rate of .075% per annum on the entire amount of
the Credit Facility, which is allocated among the participating Funds in such
manner as is determined by the governing Boards of the various funds. In
addition the participating funds will pay interest on borrowing at the Federal
funds rate plus .50%. During the year ending August 31, 2000, the following
funds had borrowings under the line of credit agreement.
AVERAGE DAILY AVERAGE MAXIMUM DAILY LOAN OUTSTANDING
PORTFOLIO LOAN BALANCE INTEREST RATE % LOAN OUTSTANDING AT 08/31/00
-------------- ------------- --------------- ---------------- ---------------
European Equity $223,685 6.09% $5,858,000 $0
40
<PAGE>
WARBURG PINCUS FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
Warburg, Pincus European Equity Fund, Inc.;
Warburg, Pincus Global Telecommunications Fund, Inc.;
Warburg, Pincus Global Health Sciences Fund, Inc.:
In our opinion, the accompanying statements of assets and liabilities
including the schedules of investments of Warburg, Pincus European Equity Fund,
Inc., Warburg, Pincus Global Telecommunications Fund, and Warburg, Pincus Health
Sciences Fund, Inc. (all funds collectively referred to as the "Funds") as of
August 31, 2000, and the related statements of operations and of changes in net
assets and the financial highlights present fairly, in all material respects the
financial position of the Funds at August 31, 2000, the results of each of their
operations for the year then ended, the changes in each of their net assets for
each of the two years (or periods) in the period then ended and their financial
highlights for each of the years (or periods) presented, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Funds' management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at August 31, 2000 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Two Commerce Square
2001 Market Street
Philadelphia, Pennsylvania
October 13, 2000
41
<PAGE>
WARBURG PINCUS FUNDS
TAX INFORMATION LETTER
--------------------------------------------------------------------------------
IMPORTANT TAX INFORMATION FOR SHAREHOLDERS OF WARBURG PINCUS EUROPEAN
EQUITY FUND (UNAUDITED)
During the fiscal year ended August 31, 2000, the European Equity
Fund - Common Class distributed $34,526 of foreign source income on which the
Fund paid foreign taxes of $20,893. This information is being furnished to you
pursuant to notice requirements of Section 853(a) and 855(d) of the Internal
Revenue Code 1986, as amended the "Code", and the Treasury Regulations
thereunder.
IMPORTANT TAX INFORMATION FOR SHAREHOLDERS (UNAUDITED)
During the year ended August 31, 2000, the Warburg Pincus Global
Telecommunications Fund declared the following Dividends from realized capital
gains:
Short-term Long-term
capital gain capital gain
per share per share
---------- ----------
$1.1663 $0.0611
<PAGE>
THE WARBURG PINCUS FUNDS
SPECIAL SHAREHOLDER MEETING RESULTS
August 31, 2000 (Unaudited)
-------------------------------------------------------------------------------
WARBURG PINCUS GLOBAL TELECOMMUNIATIONS FUND
WARBURG PINCUS GLOBAL HEALTH SCIENCES FUND
A special meeting of shareholders of each Fund was held on July 14, 2000.
Shareholders of each Fund voted on the following matter:
Proposal 1: To approve a Sub-Investment Advisory Agreement among each
Fund, Credit Suisse Asset Management LLC and Credit Suisse Asset
Management Limited.
In addition, shareholders of Warburg Pincus Global Health Sciences Fund voted
on the following matter:
Proposal 2: To approve change of sub-classification of the Global Health
Sciences Fund from a diversified to a non-diversified investment
company and elimination of the Fund's fundamental investment
restriction regarding diversification.
The voting results for each Fund were as follows:
Proposal 1:
-------------------------------------------------------------------------------
GLOBAL % of Shares to Total % of Shares to Total
TELECOMMUNICATIONS Shares Outstanding Shares Shares Voted
-------------------------------------------------------------------------------
For 3,641,776.780 50.5680% 97.7624%
-------------------------------------------------------------------------------
Against 33,018.056 0.4585% 0.8864%
-------------------------------------------------------------------------------
Abstain 50,334.113 0.6989% 1.3512%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
GLOBAL HEALTH % of Shares to Total % of Shares to Total
SCIENCES Shares Outstanding Shares Shares Voted
-------------------------------------------------------------------------------
For 1,498,623.828 50.5441% 93.8764%
-------------------------------------------------------------------------------
Against 63,688.473 2.1480% 3.9896%
-------------------------------------------------------------------------------
Abstain 34,066.675 1.1490% 2.1340%
-------------------------------------------------------------------------------
43
<PAGE>
WARBURG PINCUS FUNDS
SPECIAL SHAREHOLDER MEETING RESULTS (CONT'D)
August 31, 2000 (Unaudited)
-------------------------------------------------------------------------------
Proposal 2:
-------------------------------------------------------------------------------
GLOBAL HEALTH % of Shares to Total % of Shares to Total
SCIENCES Shares Outstanding Shares Shares Voted
-------------------------------------------------------------------------------
For 1,086,693.410 36.6509% 68.0724%
-------------------------------------------------------------------------------
Against 89,868.011 3.0310% 5.6295%
-------------------------------------------------------------------------------
Abstain 32,524.555 1.0970% 2.0374%
-------------------------------------------------------------------------------
Delivered Not Voted 387,293.000 13.0622% 24.2607%
-------------------------------------------------------------------------------
43
<PAGE>
<PAGE>
[GRAPHIC OMITTED]
WARBURG PINCUS FUNDS
P.O. BOX 9030, BOSTON, MA 02205-9030
800-WARBURG (800-927-2874) (TM) WWW.WARBURG.COM
CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR. WPEGG-2-0800
