CNI CHARTER MONEY MARKET FUND
- ------------------------------------------------------------------------------
To our Shareholders:
We are pleased to provide you with this report on the CNICharter Money Market
Fund (the "Fund") for its semi-annual reporting period ended April 30, 1999.
The Fund continued to provide competitive money market returns of 4.61%, on an
annualized basis, while preserving principal value and maintaining a high
degree of liquidity. Continued strong growth, low inflation, strong equity
markets and rising rates characterized the U.S. economy during this period.
Last fall, the Fed enacted a series of rate cuts to inject liquidity and
restore financial confidence here and abroad. Narrower risk premiums and strong
global equity market returns have proven these moves effective. A strong 4.5%
annual rate for the first quarter Gross Domestic Product (GDP) suggests the
real output of growth for 1999 should be near 4.0% (year over year) for the
third year in a row. With the unemployment rate at 4.3%, the possibility of
accelerating labor costs concerns some investors. With a few geographical
exceptions, however, those labor costs are benign. Rising oil prices should
reflect a temporary boost in the Producer Price Index (PPI) and Consumer Price
Index (CPI), but the core numbers will most likely remain in check for the near
term. The continued low unemployment rate and the strong economy indicate a
potential tightening bias by the Federal Reserve and long-term risk for higher
inflation.
Short-term rates remain relatively low, especially when compared with other
parts of the yield curve which have climbed 70 to 90 basis points since the
first of the year. Money market yields have steepened only slightly, and 90-day
"top tier" commercial paper is yielding 23 basis points less since year-end.
With some new evidence of current inflation on an upswing and an increasing
probability of a Fed rate hike looming, short-term rates are poised to follow
longer-term rates upward in the coming months. The market's higher interest
rates and steeper yield curve in issues with over a one-year maturity reflect
the economy's strength as well as potential monetary policy changes.
The Fund's portfolio continued to maintain a conservative weighted average
maturity of 50 days as of April 30, 1999. Because of the Fund's higher
concentration on short-term commercial paper holdings, this figure is shorter
than the average Prime Institutional Fund as reported by IBC. The Fund's
weighted average maturity will be maintained at shorter than current levels
unless prospective markets' yields warrant an extension strategy. The following
pages provide information on the Fund's recent performance and its portfolio
holdings at the end of the reporting period.
Thank you for choosing the CNI Charter Money Market Fund. We look forward to
meeting your investment needs.
Sincerely,
/s/Signature omitted /s/Signature omitted
Rodney J. Olea Vernon C. Kozlen
SENIOR VICE PRESIDENT EXECUTIVE VICE PRESIDENT
PORTFOLIO MANAGER CITY NATIONAL INVESTMENTS
<PAGE>
STATEMENT OF NET ASSETS
APRIL 30, 1999 (UNAUDITED)
CNI CHARTER MONEY MARKET FUND
Face
Amount Value
(000) (000)
- ------------------------------------------------------
COMMERCIAL PAPER (A) (73.8%)
COMMUNICATIONS EQUIPMENT (4.9%)
GTE Funding
4.859%, 05/04/99 $2,000 $ 1,999
4.835%, 05/24/99 3,000 2,991
Lucent Technologies
4.850%, 05/03/99 2,000 1,999
--------
6,989
--------
FINANCIAL SERVICES (35.4%)
Ascot Capital
4.852%, 05/17/99 4,000 3,991
4.872%, 07/12/99 1,000 990
Barton Capital
4.808%, 05/11/99 1,243 1,241
4.853%, 05/18/99 2,000 1,995
4.863%, 06/07/99 3,000 2,985
CC USA
4.884%, 06/30/99 2,500 2,480
Check Point Charlie
4.955%, 05/07/99 1,500 1,499
Enterprise Funding
4.830%, 05/11/99 4,000 3,995
4.836%, 05/12/99 1,500 1,498
General Electric Capital
4.800%, 05/17/99 5,000 5,000
Market Street Funding
4.919%, 05/07/99 3,523 3,520
4.899%, 05/14/99 2,000 1,997
Merrill Lynch
4.805%, 05/05/99 2,000 1,999
Quincy Capital
4.819%, 06/08/99 2,000 1,990
Toronto Dominion Holdings
4.839%, 06/07/99 5,000 4,975
Trident Capital Finance
4.882%, 06/11/99 5,000 4,972
World Omni Vehicle
4.827%, 05/03/99 1,017 1,017
4.909%, 06/04/99 5,000 4,977
--------
51,121
--------
Face
Amount Value
(000) (000)
- ------------------------------------------------------
FOREIGN BANKS (0.7%)
Banq Gen Du Luxembourg
4.808%, 05/05/99 $1,000 $ 999
--------
INDUSTRIAL (17.6%)
Allied Signal
4.856%, 07/09/99 4,000 3,963
Arco British Limited
4.853%, 06/29/99 5,000 4,961
Daimler Chrysler Holdings
4.808%, 05/10/99 3,000 2,996
Duke Energy
4.902%, 05/03/99 3,000 2,999
Eaton
4.932%, 05/11/99 1,000 999
Kimberly Clark Worldwide
4.819%, 05/07/99 5,000 4,996
Unilever NV
4.856%, 07/15/99 4,535 4,490
--------
25,404
--------
INSURANCE (8.1%)
John Hancock Capital
4.828%, 05/07/99 5,462 5,458
Metlife Funding
4.849%, 05/06/99 2,500 2,498
4.861%, 05/07/99 3,758 3,755
--------
11,711
--------
LEASING & RENTING (3.0%)
McGraw Hill
4.856%, 07/02/99 4,400 4,364
-------
LEISURE PRODUCTS (4.1%)
K2 (USA) LLC
4.854%, 05/24/99 1,005 1,002
4.892%, 07/19/99 5,000 4,947
--------
5,949
--------
TOTAL COMMERCIAL PAPER
(Cost $106,537) $106,537
--------
2
<PAGE>
STATEMENT OF NET ASSETS
APRIL 30, 1999 (UNAUDITED)
CNI CHARTER MONEY MARKET FUND (concluded)
Face
Amount Value
(000) (000)
- ------------------------------------------------------
CORPORATE OBLIGATIONS (16.3%)
BANKS (1.4%)
First National Bank
6.500%, 01/14/00 $2,000 $ 2,020
--------
FINANCIAL SERVICES (7.5%)
CIT Group Holdings, MTN
6.250%, 10/25/99 820 825
IBM Credit, MTN
5.580%, 08/13/99 4,000 4,007
John Deere Capital
6.300%, 06/01/99 2,000 2,002
Merrill Lynch & Co, MTN
6.375%, 06/14/99 2,000 2,003
Merrill Lynch & Co, MTN,
Series B (B)
5.400%, 05/17/99 2,000 2,007
--------
10,844
--------
PERSONAL CREDIT INSTITUTIONS (6.1%)
American General Finance
6.875%, 07/01/99 1,000 1,003
Chrysler Finance, Series Q, MTN
6.440%, 06/23/99 1,000 1,002
Ford Motor Credit
7.250%, 05/15/99 5,000 5,004
International Lease Finance, MTN,
Series I
6.640%, 02/01/00 1,800 1,821
--------
8,830
--------
RETAIL (1.3%)
Bass America
6.750%, 08/01/99 1,850 1,857
--------
TOTAL CORPORATE OBLIGATIONS
(Cost $23,551) 23,551
--------
Face
Amount Value
(000) (000)
- ------------------------------------------------------
ASSET-BACKED SECURITIES (4.1%)
WFS Financial Owner Trust,
Series 1999-A, Class A1
5.008%, 02/20/00 $6,000 $ 6,000
--------
TOTAL ASSET-BACKED SECURITIES
(Cost $6,000) 6,000
--------
CASH EQUIVALENTS (5.7%)
Fidelity Colchester Domestic
Money Market Portfolio 1,954 1,954
SEI Daily Income Trust Prime
Obligation Portfolio 6,314 6,314
--------
TOTAL CASH EQUIVALENTS
(Cost $8,268) 8,268
--------
TOTAL INVESTMENTS (99.9%)
(Cost $144,356) 144,356
--------
OTHER ASSETS AND LIABILITIES, NET (0.1%) 89
--------
NET ASSETS:
Portfolio Shares-Institutional Class
(unlimited authorization -- $0.01 par
value) based on 144,444,962 issued and
outstanding shares of beneficial
interest 144,445
--------
TOTAL NET ASSETS (100.0%) $144,445
========
Net Asset Value, Offering and
Redemption Price Per Share 1.00
========
(A) DISCLOSURE PRESENTS ANNUALIZED YIELD AT DATE OF
PURCHASE FOR DISCOUNT SECURITIES AND COUPON RATE
FOR INTEREST-BEARING SECURITIES.
(B) VARIABLE RATE SECURITY. THE RATE REPORTED ON THE STATEMENT
OF NET ASSETS IS THE RATE IN EFFECT ON APRIL 30,
1999. THE DATE SHOWN IS THE NEXT SCHEDULED RESET
DATE.
MTN -- MEDIUM TERM NOTE
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL
STATEMENTS.
3
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 1999
(UNAUDITED)
CNI CHARTER MONEY MARKET FUND (000)
- -----------------------------------------------------
INVESTMENT INCOME:
Interest $3,565
------
Total Investment Income 3,565
------
EXPENSES:
Investment Advisory Fees 173
Waiver of Investment Advisory Fees (93)
Shareholder Service Fees 173
Administrative Fees 70
Custodian Fees 11
Professional Fees 22
Transfer Agent Fees 9
Printing Fees 16
Trustee Fees 8
Registration and Filing Fees 21
Insurance and Other Fees 14
Organizational Fees 13
------
Net Expenses 437
------
Net Investment Income 3,128
======
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS: $3,128
======
The accompanying notes are an integral part of the financial statements
4
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 1999 (UNAUDITED) AND
THE PERIOD ENDED OCTOBER 31, 1998.
11/1/98 TO 3/23/98(1) TO
4/30/99 10/31/98
CNI CHARTER MONEY MARKET FUND (000) (000)
- -----------------------------------------------------------------
INVESTMENT ACTIVITIES:
Net Investment Income $ 3,128 $ 3,853
-------- --------
Increase in Net Assets
Resulting from Operations 3,128 3,853
-------- --------
DISTRIBUTION TO SHAREHOLDERS:
Net Investment Income (3,128) (3,853)
-------- --------
Total Distributions (3,128) (3,853)
-------- --------
SHARE TRANSACTIONS (AT $1.00 PER
SHARE):
Shares Issued 104,903 222,429
Shares Issued in Lieu of Cash
Distributions 2 142
Shares Redeemed (93,888) (89,243)
-------- --------
Net Share Transactions 11,017 133,328
-------- --------
Increase in Net Assets From Share
Transactions 11,017 133,328
-------- --------
Total Increase in Net Assets 11,017 133,328
NET ASSETS:
Beginning of Period 133,428 100
-------- --------
End of Period $144,445 $133,428
======== ========
(1) Commencement of operations
The accompanying notes are an integral part of
the financial statements
5
<PAGE>
FINANCIAL HIGHLIGHTS
FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 1999 (UNAUDITED) AND THE PERIOD ENDED
OCTOBER 31, 1998.
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
RATIO
NET NET NET RATIO OF EXPENSES
ASSET DISTRIBUTIONS ASSET ASSETS RATIO OF NET TO AVERAGE
VALUE NET FROM NET VALUE END OF EXPENSES INCOME NET ASSETS
BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING
OF PERIOD INCOME INCOME OF PERIOD RETURN (000) NET ASSETS NET ASSETS WAIVERS)
-------- --------- ----------- -------- ------ -------- ----------- ---------- ------------
CNI Charter
Money Market
Fund
- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1999 $1.00 0.02 (0.02) $1.00 2.26% $144,445 0.63%* 4.51%* 0.76%*
1998(1) $1.00 0.03 (0.03) $1.00 3.11% $133,428 0.63%* 4.99%* 0.78%*
</TABLE>
* Annualized
(1) CNI Charter Money Market Fund commenced operations on March 23, 1998.
The accompanying notes are an integral part of the financial statements
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1999 (UNAUDITED)
1. ORGANIZATION:
THE CNI CHARTER FUNDS, a Delaware business trust (the "Trust"), formerly named
the Berkeley Funds, is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end management investment company. The
financial statements included herein are those of the CNI Charter Money Market
Fund ("the Fund"), formerly the Berkeley Money Market Fund. The Fund's former
sponsor, North American Trust Company, was acquired on December 31, 1998 by the
Fund's current sponsor, City National Bank. Following the acquisition, the
Trust's name was changed to the CNI Charter Funds. The Fund seeks to provide
current income to investors through low-risk investments. The Fund is registered
to offer three classes of shares: Institutional Class, Class A, and Class S. As
of April 30, 1999 only the Institutional Class of shares had been issued.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of the significant accounting policies followed by
the Fund.
SECURITY VALUATION -- Investment securities are stated at amortized
cost, which approximates market value. Under this valuation method,
purchase discounts and premiums are accreted and amortized ratably
to maturity and are included in interest income.
FEDERAL INCOME TAXES -- It is the 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). Interest income is recognized on the accrual basis. For
securities sold, realized gains or losses are determined on the
basis of the identified cost of the securities delivered.
NET ASSET VALUE PER SHARE -- The net asset value per share of the
Fund is calculated each business day by dividing the total value of
assets, less liabilities, by the number of shares outstanding.
DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment
income are declared daily and paid to shareholders monthly. Any net
realized capital gains are distributed to shareholders at least
annually. Distributions from net investment income and net
realized capital gains are determined in accordance with U.S.
Federal income tax regulations, which may differ from those amounts
determined under generally accepted accounting principles. These
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 gains, as
appropriate, in the period that the differences arise. The
reclassifications have no effect on net assets or net asset value.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 1999 (UNAUDITED)
ORGANIZATIONAL COSTS -- Organizational costs of the Fund have been
capitalized by the Trust and are being amortized over a period of
sixty months. In the event any of the initial shares of the Fund are
redeemed by any holder thereof during the period that the Fund is a
mortizing its organizational costs, the redemption proceeds payable
to the holder thereof by the Fund will be reduced by the unamortized
organizational costs in the same ratio as the number of initial
shares being redeemed bears to the number of initial shares
outstanding at the time of redemption.
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 amount of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during
the reporting period. Actual results could differ from those
estimates.
3. SERVICE AGREEMENTS:
Prior to April 1, 1999 Firstar Mutual Fund Services, LLC served as
Administrator, Shareholder Servicing Agent and Transfer Agent of the Fund.
Effective April 1, 1999 SEI Investments Mutual Funds Services assumed the role
of Administrator whereby they provide administrative services at an annual rate
of 0.15% of the average daily net assets of the Fund, subject to a minimum
annual fee of $90,000. As of the same date, SEI Investments Fund Management
assumed the role of Transfer Agent whereby they provide services to the Fund at
an annual rate of $15,000 per fund.
On April 1, 1999 First Union National Bank assumed the role of Custodian for
the Fund from Firstar Bank Milwaukee, N.A. Fees of the Custodian are being paid
on the basis of the net assets of the Fund. The Custodian plays no role in
determining the investment policies of the Fund or which securities are to be
purchased or sold by the Fund.
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 of the Trust.
4. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
Prior to April 1, 1999 Berkeley Capital Management ("BCM") served as the
Investment Adviser for the Fund whereby they received fees at an annual a rate
of 0.25% of the average
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
APRIL 30, 1999 (UNAUDITED)
daily net assets of the Fund. Following the acquisition of North American Trust
Company by City National Bank, City National Investments ("CNI"), a division of
City National Bank, assumed the role of investment adviser. Under the terms of
the agreement, CNI receives an annual fee equal to 0.25% of the average daily
net assets of the Fund. During the six-month period ended April 30, 1999, BCM
earned investment advisory fees of $72,162, net of waivers. The Fund incurred
investment advisory fees payable to CNI in the amount of $8,431.
In their roles as investment adviser, BCM had voluntarily agreed and CNI had
contractually agreed to limit their fees or reimburse the Fund for other
expenses to the extent necessary to keep the Fund's operating expenses at or
below 0.63% of the average daily net assets. Expenses waived and/or reimbursed
by BCM and CNI for the six-month period ended April 30, 1999 were $71,746 and
$21,023, respectively. CNI may remove this limit at any time after March 31,
2001, and under certain conditions may recoup the expenses it has reimbursed or
absorbed within three years after they occur if such repayments can be achieved
within the Fund's then current expense limit.
Effective April 1, 1999 the Trust has entered into a Shareholder Services
Agreement (the "Agreement") with City National Bank whereby City National Bank
receives shareholder service fees at an annual rate of 0.25% of the average
daily net assets of the Fund. Under the Agreement, the Fund incurred shareholder
service fees payable to City National Bank, an affiliate of the Adviser, in the
amount of $29,454.
5. CONCENTRATION OF CREDIT RISK:
The Fund invests primarily in high quality money market instruments. The Fund
maintains a diversified portfolio that currently has a concentration of assets
in the financial services industry. The ability of the issuers of the
securities held by the Fund to meet their obligations may be affected by
economic developments in the financial services industry. The summary of credit
quality rating for securities held by the Fund at April 30, 1999 is as follows:
S & P Moody's
---------------- -------------
AA- 2.8% AA3 3.4%
A 13.7% A1 8.2%
A1 28.9% A2 4.8%
A1+ 48.3% P1 78.0%
A2 0.7% NR 5.6%
NR 5.6% --------
-------- 100.0%
100.0%
9
<PAGE>
NOTICE TO SHAREHOLDERS
APRIL 30, 1999 (UNAUDITED)
CHANGE OF AUDITORS
At a meeting of the Board of Trustees of the Fund held on April 8, 1999 the
Board ratified the appointment of KPMG LLP to serve as independent auditor for
the Fund for the year ended October 31, 1999 and the dismissal of
PriceWaterhouseCoopers LLP, the Fund's former independent auditor. KPMG LLP
serves as independent auditor for other investment funds that are managed by
City National Bank. PriceWaterhouseCoopers LLP issued an unqualified opinion on
the financial statements of the Fund for the period from March 23, 1998 (date
of inception) to October 31, 1998. In addition, there have been no
disagreements with respect to any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure which if not
resolved to the satisfaction of PriceWaterhouseCoopers LLP would have caused it
to make a reference to the subject matter of the disagreement in connection
with its opinion.
SHAREHOLDER VOTING RESULTS
At a special shareholder meeting held on March 31, 1999, the following
proposals were approved:
Approve a new Investment Advisory Agreement between the Fund and City National
Bank, pursuant to which City National Bank will serve as the new Investment
Adviser to the Fund. The results of the voting were as follows:
Shares % of Shares % of Shares
Voted Voted Outstanding
---------------------------------------------------------
For 86,993,932 99.71% 62.78%
Against 178,964 00.21% 00.13%
Abstain 70,009 00.08% 00.05%
Elect new Trustees of the Berkeley Funds. The results of the voting
were as follows:
Shares % of Shares % of Shares
IRWIN G. BARNET: Voted Voted Outstanding
-------------------------------------------------------
For 87,127,054 99.87% 62.88%
Against 0 00.00% 00.00%
Abstain 115,852 00.13% 00.08%
10
<PAGE>
NOTICE TO SHAREHOLDERS
APRIL 30, 1999 (UNAUDITED)
Shares % of Shares % of Shares
MARIA D. HUMMER: Voted Voted Outstanding
---------------------------------------------------
For 87,127,054 99.87% 62.88%
Against 0 00.00% 00.00%
Abstain 115,852 00.13% 00.08%
Shares % of Shares % of Shares
VICTOR MESCHURES: Voted Voted Outstanding
---------------------------------------------------
For 87,127,054 99.87% 62.88%
Against 0 00.00% 00.00%
Abstain 115,852 00.13% 00.08%
Shares % of Shares % of Shares
JAMES R. WOLFORD: Voted Voted Outstanding
---------------------------------------------------
For 87,123,054 99.86% 62.88%
Against 4,000 00.01% 00.00%
Abstain 115,852 00.13% 00.08%
Ratify the selection of KPMG LLP as the new independent auditors of the Trust
to audit the financial statements of the Trust. The results of the voting were
as follows:
Shares % of Shares % of Shares
Voted Voted Outstanding
----------------------------------------------------
For 86,572,285 99.23% 62.48%
Against 25,290 00.03% 00.02%
Abstain 645,330 00.74% 00.47%
11
<PAGE>
CHARTER
MONEY MARKET FUND
This report and the financial statements contained herein are provided for the
general information of the shareholders of the CNI Charter Money Market Fund.
This report is not authorized for distribution to prospective investors in the
CNI Charter Funds unless preceded or accompanied by an effective prospectus.
Please remember that money market yields fluctuate and past performance is no
guarantee of future results.
MUTUAL FUND SHARES:
[Bullet] ARE NOT FDIC INSURED
[Bullet] ARE NOT BANK GUARANTEED
[Bullet] MAY LOSE VALUE
For more information on CNI Charter Funds, including charges and expenses,
please call 1-888-889-0799 for a free prospectus. Read it carefully before you
invest or send money.
(Logo)
(GRAPHIC OMITTED)
CNI-F-008-01000
(Logo)
(GRAPHIC OMITTED)
MONEY MARKET FUND
SEMI-ANNUAL REPORT
APRIL 30, 1999
INVESTMENT MANAGER:
CITY NATIONAL INVESTMENTS
A division of City National Bank
<PAGE>
