SEMIANNUAL
REPORT
February 28, 1999
WARBURG PINCUS
U.S. CORE FIXED INCOME FUND
O
WARBURG PINCUS
HIGH YIELD FUND
O
WARBURG PINCUS
MUNICIPAL BOND FUND
O
WARBURG PINCUS
STRATEGIC GLOBAL FIXED INCOME 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.
[WARBURG PINCUS FUNDS LOGO]
<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 of 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 February 28, 1999; these
views and portfolio holdings may have changed subsequent to these dates. Nothing
in this document is a recommendation to purchase or sell securities.
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Portfolio Managers' Letter -- February 28, 1999
- --------------------------------------------------------------------------------
April 20, 1999
Dear Shareholders:
We are writing to report on the results of the Warburg Pincus U.S. Core Fixed
Income Fund (the "Fund") for the fiscal half-year ended February 28, 1999.
At February 28, 1999, the net asset value ("NAV") of the Fund's Institutional
shares was $15.43, compared to an NAV of $15.72 on August 31, 1998. As a result,
the Institutional shares' total return was 2.4% (assuming the reinvestment of
dividends and distributions totaling $0.67 per share). By comparison, the Lehman
Brothers Aggregate Bond Index (the "Index") returned 1.6% during the same
period.
At February 28, 1999, the NAV of the Fund's Common shares was $15.42,
compared to an NAV of $15.68 at their inception of investment operations on
October 30, 1998. The Common shares' total return between October 30, 1998 and
February 28, 1999 thus was 1.2% (assuming the reinvestment of dividends and
distributions totaling $0.45 per share). By comparison, the Index was down 0.2%
during the same period.
The Fund outperformed the Index benchmark during the fiscal half-year due to
our overweighting in "spread product" -- debt securities whose market valuation
is driven by the difference, known as the "spread," between their yields and
those of U.S. Treasury debt. This was in marked contrast to the previous six
months, when the same commitment to spread product resulted in relative
underperformance.
We maintained our spread product positions through the earlier period because
we believed that they represented attractive fundamental value and would
eventually recover. Our patience was rewarded in the fourth quarter of 1998, as
yield spreads contracted and spread-based sectors, therefore, generated healthy
gains.
o Mortgage-backed securities. Our decisions to slightly underweight
mortgage-backed securities early in the fourth quarter and then heavily
overweight them later, after prices fell, proved especially effective.
o Municipal bonds. For some time, we have maintained exposure to municipal
bonds, whose valuations relative to comparable Treasuries have been at
historically low levels. Valuations of our municipal holdings finally
recovered somewhat in late 1998 and early 1999.
1
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Portfolio Managers' Letter -- February 28, 1999 (cont'd)
- --------------------------------------------------------------------------------
o Corporate bonds. Two aspects of our approach to corporates enhanced the
Fund's return. We overweighted credit duration, for example, which helped as
investment-grade issues strengthened. Security selection was also a
positive, as our positions in Fuji Finance, Ltd., Worldcom, Inc. and Chase
Manhattan Bank Corp. all did especially well.
o Below investment-grade. We added to our position in domestic high yield
early in the fourth quarter, when global fixed income markets were at their
most volatile. The sector rebounded toward year-end along with global
financial markets more generally. Emerging market debt rebounded in October
and November, helped by easier U.S. monetary policy and positive news from
Brazil.
o Non-US$ holdings. Toward the end of 1998, we purchased a put option on
Japanese government bonds, based on our belief that deteriorating conditions
in Japan would cause bond prices to fall. The Fund benefited accordingly, as
yields on 10-year JGBs dramatically rose (and nearly tripled at one point).
As developments occur in the fixed income markets or here at Credit Suisse
Asset Management that we believe would be of interest to you, we will be sure to
keep you informed. Meanwhile, if you have questions, please feel free to call
upon us at any time.
Sincerely yours,
Credit Suisse Asset Management Fixed Income Management Team
Robert J. Moore, Managing Director
William P. Sterling, Managing Director
Gregg M. Diliberto, Managing Director
Robert W. Justich, Managing Director
Mark K. Silverstein, Managing Director
Ira Edelblum, Director
Jo Ann Corkran, Director
2
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Portfolio Managers' Letter -- February 28, 1999 (cont'd)
- --------------------------------------------------------------------------------
Comparison of Change in Value of $10,000 Investment in the
Warburg Pincus U.S. Core Fixed Income Institutional Shares and the
Lehman Brothers Aggregate Bond Index(1) from Inception (3/31/94) and at
each Quarter End. (Unaudited)
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
DATE WARBURG LEHMAN
- -------- ------- ------
04/01/94 10000 10000
05/31/94 9913 9999
08/31/94 10017 10188
11/30/94 9812 10007
02/28/95 10204 10520
05/31/95 10864 11148
08/31/95 11078 11342
11/30/95 11475 11775
02/29/96 11590 11809
05/31/96 11464 11638
08/31/96 11658 11806
11/30/96 12328 12488
02/28/97 12420 12442
05/31/97 12567 12607
08/31/97 13001 12991
11/30/97 13327 13437
02/28/98 13670 13735
05/31/98 13898 13985
08/31/98 14011 14364
11/30/98 14381 14706
02/28/99 14352 14594
Average Annual
Total Returns
for the periods ended
2/28/99
(Institutional Shares)
(Unaudited)
1 year
4.99%
3 years
7.38%
Since Inception
(3/31/94)
7.62%
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 Lehman Brothers Aggregate Bond Index is composed of the Lehman
Government/Corporate Index and the Mortgage-Backed Securities Index and
includes treasury issues, agency issues, corporate bond issues, and
mortgage-backed securities. Total return comprises price
appreciation/depreciation and income as a percentage of the original
investment. Indexes are rebalanced monthly by market capitalization.
3
<PAGE>
Warburg Pincus High Yield Fund
Portfolio Managers' Letter -- February 28, 1999
- --------------------------------------------------------------------------------
April 20, 1999
Dear Shareholders:
We are writing to report on the results of the Warburg Pincus High Yield Fund
(the "Fund") for the fiscal half-year ended February 28, 1999.
At February 28, 1999, the net asset value ("NAV") of the Fund's Institutional
shares was $15.74, compared to an NAV of $16.60 on August 31, 1998. As a result,
the Institutional shares' total return was down 0.8% (assuming the reinvestment
of dividends and distributions totaling $0.72 per share). By comparison, the
Credit Suisse First Boston High Yield Index (the "Index") returned 3.5% during
the same period.
At February 28, 1999, NAV of the Fund's Common shares was $15.81, compared to
an NAV of $16.62 on August 31, 1998. As a result, the Common shares' total
return was down 0.9% (assuming the reinvestment of dividends and distributions
totaling $0.66 per share). By comparison, the Index returned 3.5% during the
same period.
Sector allocations were most responsible for the Fund's underperformance of
the Index:
o Our substantial overweighting in telecommunications hurt returns, as it
left the portfolio more highly exposed than the benchmark to
deferred-interest instruments such as zero-coupon bonds. Zeros' returns
generally were lower than those of traditional cash-pay instruments,
reflecting investors' ongoing preference for higher-quality issues within
the overall high yield universe.
o We underweighted utilities, which performed well.
o Our holdings in the transportation sector were mostly shipping companies,
which were hurt by a combination of falling oil prices and declining Asian
demand for oil.
Bright spots included our overweights in cable/media and gaming, both of
which performed much better than the overall benchmark; and underweights in
finance and energy, which were among the worst-performing sectors in the entire
high yield market.
4
<PAGE>
Warburg Pincus High Yield Fund
Portfolio Managers' Letter -- February 28, 1999 (cont'd)
- --------------------------------------------------------------------------------
As developments occur that we believe would be of interest to you, we will be
sure to keep you informed. Meanwhile, if you have questions, please feel free to
call upon us at any time.
Sincerely yours,
Credit Suisse Asset Management High Yield Management Team
Richard J. Lindquist, CFA, Managing Director
Misia K. Dudley, Director
Marianne Rossi, CFA, Director
John M. Tobin, CFA, Director
Mary Ann Thomas, CFA, Director
High yield bonds are lower-quality bonds that are also known as "junk" bonds.
Such bonds entail greater risks than those found in higher-rated securities.
International investing entails special risk considerations, including currency
fluctuations, lower liquidity, economic and political risks and differences in
accounting methods.
5
<PAGE>
Warburg Pincus High Yield Fund
Portfolio Managers' Letter -- February 28, 1999 (cont'd)
- --------------------------------------------------------------------------------
Comparison of Change in Value of $10,000 Investment in the Warburg
Pincus High Yield Institutional Shares and the CS First Boston High Yield
Index(1) from Inception (3/1/93) and at each Quarter End. (Unaudited)
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
DATE WARBURG FIRST BOSTON
- -------- ------- ------------
03/01/93 10000 10000
05/31/93 10613 10419
08/31/93 11293 10809
11/30/93 11880 11209
02/28/94 12137 11570
05/31/94 11491 11143
08/31/94 11547 11201
11/30/94 11456 11123
02/28/95 10968 11638
05/31/95 12018 12370
08/31/95 12446 12680
11/30/95 12758 13029
02/29/96 13672 13516
05/31/96 13997 13662
08/31/96 13852 13965
11/30/96 14433 14547
02/28/97 15047 15219
05/31/97 15205 15488
08/31/97 15953 16119
11/30/97 16496 16553
02/28/98 17349 17120
05/31/98 17676 17387
08/31/98 16828 16354
11/30/98 16506 16840
02/28/99 16699 16924
Average Annual
Total Returns
for the periods ended
2/28/99
(Institutional Shares)
(Unaudited)
1 year
(3.74)%
3 years
6.90%
5 Years
6.59%
Since Inception
(3/1/93)
8.91%
Comparison of Change in Value of $10,000 Investment in the Warburg
Pincus High Yield Common Shares and the CS First Boston High Yield
Index(1) from Inception (11/1/96) and at each Quarter End. (Unaudited)
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
DATE WARBURG FIRST BOSTON
- -------- ------- ------------
11/01/96 10000 10000
11/30/96 10105 10156
02/28/97 10528 10625
05/31/97 10632 10813
08/31/97 11149 11253
11/30/97 11508 11556
02/28/98 12098 11952
05/31/98 12317 12138
08/31/98 11737 11417
11/30/98 11507 11756
02/28/99 11637 11815
Average Annual
Total Returns
for the periods ended
2/28/99
(Common Shares)
(Unaudited)
1 year
(3.82)%
Since Inception
(11/1/96)
6.73%
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 Credit Suisse First Boston High Yield Index is an unmanaged index (with
no defined investment objective) of high yield bonds and is compiled by
Credit Suisse First Boston, an affiliate of the fund's adviser.
6
<PAGE>
Warburg Pincus Municipal Bond Fund
Portfolio Managers' Letter -- February 28, 1999
- --------------------------------------------------------------------------------
April 20, 1999
Dear Shareholders:
We are writing to report on the results of the Warburg Pincus Municipal Bond
Fund (the "Fund") for the fiscal half-year ended February 28, 1999.
At February 28, 1999, the net asset value ("NAV") of the Fund's Institutional
shares was $14.92, compared to an NAV of $15.12 on August 31, 1998. As a result,
the Institutional shares' total return was 2.3% (assuming the reinvestment of
dividends and distributions totaling $0.48 per share). By comparison, the Lehman
Brothers Municipal Bond Index (the "Index") returned 2.6% during the same
period.
At February 28, 1999, NAV of the Fund's Common shares was $14.92, compared to
an NAV of $15.14 at their inception of investment operations on October 30,
1998. The Common shares' total return between October 30, 1998 and February 28,
1999 thus was 1.2% (assuming the reinvestment of dividends and distributions
totaling $0.40 per share). By comparison, the Index returned 1.4% during the
same period.
The Fund slightly underperformed the Index in the fiscal half-year due to its
modest exposure to taxable corporate bonds. Although corporates enjoyed a
healthy rebound after the broad fixed-income sell-off in the summer of 1998,
they did not do so to the same extent as the municipal market. The Fund's return
relative to the Index was affected accordingly.
Within the broad municipal market, performance benefited from our ongoing
emphasis on higher-quality paper, which remained especially popular among muni
buyers. This was reflected by our substantial positions in non-callable
securities.
7
<PAGE>
Warburg Pincus Municipal Bond Fund
Portfolio Managers' Letter -- February 28, 1999 (cont'd)
- --------------------------------------------------------------------------------
As developments occur in the fixed income markets or at Credit Suisse Asset
Management that we believe would be of interest to you, we will be sure to keep
you informed. Meanwhile, if you have questions, please feel free to call upon us
at any time.
Sincerely yours,
Credit Suisse Asset Management Fixed Income Management Team
Robert J. Moore, Managing Director
William P. Sterling, Managing Director
Gregg M. Diliberto, Managing Director
Robert W. Justich, Managing Director
Mark K. Silverstein, Managing Director
Ira Edelblum, Director
Jo Ann Corkran, Director
A portion of income may be subject to state and city taxes of federal
alternative minimum tax.
8
<PAGE>
Warburg Pincus Municipal Bond Fund
Portfolio Managers' Letter -- February 28, 1999 (cont'd)
- --------------------------------------------------------------------------------
Comparison of Change in Value of $10,000 Investment in the
Warburg Pincus Municipal Bond Institutional Shares and the Lehman
Brothers Municipal Bond Index(1) from Inception (6/20/94),
Period Ended (7/31/94) and at each Quarter End. (Unaudited)
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
DATE WARBURG LEHMAN
- -------- ------- ------
06/20/94 10000 10000
07/31/94 10040 10038
08/31/94 10040 10073
11/30/94 9647 9571
02/28/95 10350 10354
05/31/95 10846 10820
08/31/95 10886 10965
11/30/95 11193 11079
02/29/96 11216 11498
05/31/96 10937 11314
08/31/96 11134 11539
11/30/96 11643 12049
02/28/97 11731 12132
05/31/97 11835 12252
08/31/97 12218 12606
11/30/97 12508 12914
02/28/98 12812 13242
05/31/98 12971 13402
08/31/98 13149 13697
11/30/98 13370 13916
02/28/99 13446 14055
Average Annual
Total Returns
for the periods ended
2/28/99
(Institutional Shares)
(Unaudited)
1 year
4.95%
3 years
6.23%
Since Inception
(6/20/94)
6.49%
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 Lehman Brothers Municipal Bond 10 Year Index is computed twice a month
from prices on approximately 1,100 bonds. The index is composed of
approximately 60% revenue bonds and 40% state government obligations. The
issues in the index have a maturity of 8-12 years and the prices are
supplied by Kenny Information Systems, Inc.
9
<PAGE>
Warburg Pincus Strategic Global Fixed Income Fund
Portfolio Managers' Letter -- February 28, 1999
- --------------------------------------------------------------------------------
April 20, 1999
Dear Shareholders:
We are writing to report on the results of the Warburg Pincus Strategic
Global Fixed Income Fund (the "Fund") for the fiscal half-year ended February
28, 1999.
At February 28, 1999, the net asset value ("NAV") of the Fund's Institutional
shares was $15.26, compared to an NAV of $15.10 on August 31, 1998. As a result,
the Institutional shares' total return was 4.5% (assuming the reinvestment of
dividends and distributions totaling $0.53 per share). By comparison, the
unhedged J.P. Morgan Global Government Bond Index ("GBI") returned 3.9% during
the same period.
At February 28, 1999, the NAV of the Fund's Common shares was $15.25,
compared to an NAV of $16.10 at their inception of investment operations on
October 30, 1998. The Common shares' total return between October 30, 1998 and
February 28, 1999 thus was down 2.2% (assuming the reinvestment of dividends and
distributions totaling $0.52 per share). By comparison, the GBI was down 3.4%
during the same period.
We attribute the Fund's outperformance of the GBI benchmark during the fiscal
half-year to our positioning of the portfolio in two areas:
Spread product. Our allocations to "spread product" -- debt securities whose
market valuation is greatly driven by the difference, known as the "spread,"
between their yields and those of U.S. Treasury debt -- experienced strong gains
after hurting performance in the second and third quarters of 1998. This was
particularly true in U.S. and emerging market securities.
We maintained our U.S. spread product positions through the earlier periods
because we believed that they represented attractive fundamental value and would
eventually recover. Our patience was rewarded in the final months of 1998 and
early 1999, as yield spreads contracted and prices in spread-based sectors,
therefore, rose. Emerging market debt also revived. Although our allocation to
emerging markets remained modest, the sector's strength was sufficient for it to
meaningfully add to the Fund's return.
Japan. Our longstanding underweight in Japan relative to GBI paid off
especially well in December, as Japanese bond yields nearly tripled. We also
chose to remain essentially neutral in our yen currency holdings, which
prevented the Fund from losing ground relative to GBI when the yen strengthened.
10
<PAGE>
Warburg Pincus Strategic Global Fixed Income Fund
Portfolio Managers' Letter -- February 28, 1999 (con't)
- --------------------------------------------------------------------------------
As developments occur in the global fixed income markets or at Credit Suisse
Asset Management that we believe would be of interest to you, we will be sure to
keep you informed. Meanwhile, if you have questions, please feel free to call
upon us at any time.
Sincerely yours,
Credit Suisse Asset Management Fixed Income Management Team
Robert J. Moore, Managing Director
William P. Sterling, Managing Director
Gregg M. Diliberto, Managing Director
Robert W. Justich, Managing Director
Mark K. Silverstein, Managing Director
Ira Edelblum, Director
Jo Ann Corkran, Director
International investing entails special risk considerations, including currency
fluctuations, lower liquidity, economic and political risks, and differences in
accounting methods.
11
<PAGE>
Warburg Pincus Strategic Global Fixed Income Fund
Portfolio Managers' Letter -- February 28, 1999 (cont'd)
- --------------------------------------------------------------------------------
Comparison of Change in Value of $10,000 Investment in the Warburg
Pincus Strategic Global Fixed Income Institutional Shares and the JP
Morgan Global Government Bond Index (unhedged)(1) from Inception
(6/27/94), Period Ended (7/31/94), and at each Quarter End. (Unaudited)
[GRAPHIC]
In the printed version of the document, a line graph
appears which depicts the following plot points:
DATE WARBURG MORGAN
- ------ ------- ------
06/28/94 10000 10000
07/31/94 10027 10115
08/31/94 10001 10089
11/30/94 10045 10161
02/28/95 10274 10659
05/31/95 11156 11696
08/31/95 11072 11496
11/30/95 11574 12003
02/29/96 11668 11957
05/31/96 11831 11907
08/31/96 12140 12283
11/30/96 12815 12776
02/28/97 12531 12284
05/31/97 12673 12408
08/31/97 12684 12487
11/30/97 13006 12878
02/28/98 13170 13089
05/31/98 13232 13247
08/31/98 13215 13689
11/30/98 14090 14560
02/28/99 13804 14220
Average Annual
Total Returns
for the periods ended
2/28/99
(Institutional Shares)
(Unaudited)
1 year
4.80%
3 years
5.76%
Since Inception
(6/27/94)
7.13%
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 JP Morgan Global Government Bond Index Unhedged (including U.S. $) is
market-capitalization index consisting of the government bond markets of the
following countries: Australia, Belgium, Canada, Denmark, France, Germany,
Italy, Japan, Netherlands, Spain, Sweden, the U.K. and the U.S. All issues
have a remaining maturity of at least one year and the index is rebalanced
monthly.
12
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
CORPORATE BONDS (34.9%)
Aerospace/Defense (0.0%)
Boeing Co. Debentures
7.500% 08/15/42 $ 150 $ 161,438
------------
Automotive (0.1%)
Hayes Lemmerz International,
Inc. 144A Sr. Sub. Notes
8.250% 12/15/08 430 435,375
Hayes Wheels International, Inc.
Gtd. Notes
11.000% 07/15/06 75 83,625
------------
519,000
------------
Banking (6.5%)
Bangko Sentral Pilipinas,
Yankee Bonds
8.600% 06/15/27 1,300 1,124,500
BankBoston N.A. Notes
6.375% 04/15/08 610 593,225
Bay View Capital Corp.
Sub. Notes
9.125% 08/15/07 990 959,062
Chase Manhattan Bank Corp.
Sub. Notes
6.750% 09/15/06 630 639,450
6.375% 04/01/08 600 599,250
7.250% 06/01/07 490 513,275
Cie. Financiered Paribas
Sub. Notes
6.950% 07/22/13 680 671,500
Citicorp Sub. Notes, Series F
6.375% 11/15/08 2,140 2,121,275
Credit Lyonnais
Perpetual Sub. Variable Rate
Notes, Rule 144A
6.563%+/+++ 2,780 2,425,550
First Republic Bank
Sub. Notes
7.750% 09/15/12 2,070 1,974,262
ForeningsSparbanken AB
Perpetual Sr. Sub. FRN
5.976%+/+++ 980 958,538
See Accompanying Notes to Financial Statements.
13
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
CORPORATE BONDS (cont'd)
Banking (cont'd)
Fuji Finance (Cayman), Ltd.
Medium Term Notes
7.300%+/+++ $ 730 $ 416,100
Perpetual Sub. Notes
5.801%+/+++ 820 467,400
Fuji JGB Investment LLC,
Noncumulative Preferred
Securities, Series A
9.870% 06/30/99+ 2,350 1,835,820
Okobank Perpetual Medium Term FRN
5.739%+/+++ 1,970 1,891,200
Santander Financial Issuances
Perpetual Sub. FRN
6.213%+/+++ 750 682,537
Skandinaviska Enskilda Banken,
Sub. Notes
6.625%+/+++ 2,280 2,233,169
Perpetual Sub. FRN
7.500%+/+++ 1,905 1,802,759
144A Perpetual Sub. FRN
6.500% 12/29/49 2,200 2,083,400
Sovereign Bancorp Sr. Notes
6.750% 07/01/00 185 186,156
------------
24,178,428
------------
Broadcasting (1.1%)
Chancellor Media Corp.
144A Sr. Sub. Notes
8.000% 11/01/08 225 238,500
Fox/Liberty Network LLC.,
Sr. Discount Notes
8.875% 08/15/07 1,360 1,419,500
Granite Broadcasting Corp.
144A Sr. Sub. Notes
8.875% 05/15/08 145 143,912
Turner Broadcasting Systems, Inc.
Sr. Notes
7.400% 02/01/04 2,120 2,231,300
------------
4,033,212
------------
Building Materials (0.1%)
Jackson Products, Inc. Notes
9.500% 04/15/05 345 344,137
------------
See Accompanying Notes to Financial Statements.
14
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
CORPORATE BONDS (cont'd)
Cable (0.8%)
Classic Cable
Sr. Sub. Notes
9.875% 08/01/08 $ 150 $ 157,875
CSC Holdings Inc.,
Sr. Notes
7.675% 12/15/07 1,405 1,485,787
7.250% 07/15/08 310 315,425
Diamond Cable
Communications plc
Yankee Sr. Discount Notes
10.750% 02/15/07++ 800 616,000
James Cable Partners L.P.,
Sr. Notes, Series B
10.750% 08/15/04 325 344,094
Videotron Holdings Plc
Yankee Sr. Discount Notes
11.000% 08/15/05 95 85,144
------------
3,004,325
------------
Energy (2.0%)
CMS Energy Corp.
Medium Term Notes
6.750% 01/15/04 230 224,250
Crown Central Petroleum
Sr. Notes
10.875% 02/01/05 150 136,687
Forcenergy, Inc.
Sr. Sub. Notes
8.500% 02/15/07 115 42,262
Korea Electric Power,
Yankee Notes
7.000% 10/01/02 1,700 1,634,125
Global Unsubordinated Notes
6.375% 12/01/03 50 46,375
Yankee Debentures
7.000% 02/01/27 1,575 1,458,844
LASMO (USA), Inc.
Gtd. Debentures
7.300% 11/15/27 25 22,187
Petroleum Geo-Services ASA
Yankee Sr. Notes
7.125% 03/30/28 805 719,469
See Accompanying Notes to Financial Statements.
15
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
CORPORATE BONDS (cont'd)
Energy (cont'd)
Sibneft, Loan Participation
Notes
9.000% 08/15/00+ $ 455 $ 118,300
Valero Energy Corp.
144A Putable Asset Trusts
6.750% 12/15/02 1,820 1,822,275
YPF S.A.
Sr. Notes
7.250% 03/15/03 175 166,469
Notes
8.000% 02/15/04 1,250 1,209,375
------------
7,600,618
------------
Entertainment (2.3%)
Regal Cinemas, Inc.
Sr. Sub. Notes
9.500% 06/01/08 300 300,000
TV Guide, Inc.
Sr. Sub. Notes
8.125% 03/01/09 400 397,500
Time Warner, Inc.
Debentures
8.050% 01/15/16 1,875 2,090,625
6.850% 01/15/26 3,970 4,173,462
Notes
9.125% 01/15/13 1,220 1,499,075
------------
8,460,662
------------
Financial Services (4.9%)
American General Institutional
Capital Trust Co.
144A Gtd. Notes, Series B
8.125%+++ 2,160 2,430,000
Associates Corp. of North
America Sr. Debentures
5.960% 05/15/37 195 195,487
AT&T Capital Corp.
Medium Term Note, Series 4
6.920% 04/29/99 815 815,731
6.410% 08/13/99 155 155,133
6.470% 12/03/99 950 951,459
6.480% 12/03/99 2,730 2,734,389
See Accompanying Notes to Financial Statements.
16
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
CORPORATE BONDS (cont'd)
Financial Services (cont'd)
BellSouth Capital Funding Corp.
Debentures
6.040% 11/15/26 $ 2,975 $ 3,027,062
Ford Motor Credit Corp.
5.800% 01/12/09 2,615 2,530,012
Industrial Credit & Investment Corp.
144A Yankee Medium Term Notes
7.550% 08/15/07 40 34,500
L'Auxiliare du Credit Foncier de France
Gtd. Notes
5.281% 03/25/99+ 2,200 2,143,570
5.000% 04/20/99+ 155 149,381
Long Island Savings Bank, Inc.
Notes
7.000% 06/13/02 1,040 1,055,600
Prudential Insurance Co. of America
144A Capital Notes
6.875% 04/15/03 1,600 1,632,000
144A Sr. Notes
6.375% 07/23/06 350 341,687
------------
18,196,011
------------
Food & Beverage (0.2%)
Archibald Candy Corp.
144A Gtd. Sr. Secured Notes
10.250% 07/01/04 400 408,000
Arisco Productos Alimenticios
S.A. Gtd. Notes
10.750% 05/22/05 340 197,200
Pantry, Inc.
Sr. Sub. Notes
10.250% 10/15/07 215 224,406
------------
829,606
------------
Health Care (2.3%)
Columbia/HCA Healthcare
Corp., Debentures
8.360% 04/15/24 1,485 1,372,882
Merck & Co., Inc.
Medium Term Notes Series B
5.760% 05/03/37 7,130 7,031,963
------------
8,404,845
------------
See Accompanying Notes to Financial Statements.
17
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
CORPORATE BONDS (cont'd)
Industrial Goods & Materials (1.3%)
Dresser Industries, Inc.
Debentures
7.600% 08/15/49 $ 1,785 $ 1,936,725
Motors & Gears, Inc.,
Sr. Notes, Series D
10.750% 11/15/06 270 277,088
PSINet, Inc.
Sr. Notes
11.500% 11/01/08 220 246,400
Seagate Technology, Inc.
Sr. Debentures
7.450% 03/01/37 2,230 2,079,475
Wheeling-Pittsburgh Corp.
144A Sr. Notes
9.250% 11/15/07 215 210,969
------------
4,750,657
------------
Packaging/Containers (0.0%)
Crown Packaging Enterprises Ltd.
Yankee Sr. Secured
Discount Notes
14.000% 08/01/06 550 6,188
------------
Paper & Forest Products (0.1%)
Fort James Corp. Notes
6.234% 03/15/01 330 326,700
P.T. Indah Kiat Pulp & Paper Corp.
Sr. Secured Notes
8.875% 11/01/00 280 201,250
Repap New Brunswick
Sr. Secured Debentures
10.625% 04/15/05 35 26,425
------------
554,375
------------
Publishing & Information Services (0.7%)
Belo (A.H.) Corp.
Sr. Notes
6.875% 06/15/02 2,635 2,690,994
------------
Real Estate (0.3%)
EOP Operating L.P.
Mandatory Par Put
Remarketed Securities
6.376% 02/15/02 1,295 1,265,863
------------
See Accompanying Notes to Financial Statements.
18
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
CORPORATE BONDS (cont'd)
Restaurants, Hotels & Casinos (0.2%)
Circus Circus Enterprise
Sr. Sub. Notes
9.250% 12/01/05 $ 210 $ 213,938
HMH Properties, Inc.
Sr. Notes
8.450% 12/01/08 250 248,125
Hyatt Equities LLC
144A Medium Term Notes
6.800% 05/15/00 230 232,013
------------
694,076
------------
Retail Trade (0.6%)
K Mart Corp.
Notes
7.950% 02/01/23 420 416,850
Pass Through Certificates,
Series 1995 Class K3
8.540% 01/02/15 1,626 1,573,355
Pathmark Stores
Sr. Sub Notes
9.625% 05/01/03 160 161,400
Phillips Van-Heusen Corp.
Sr. Sub. Notes
9.500% 05/01/08 145 146,269
------------
2,297,874
------------
Telecommunications (6.2%)
Adelphia Communications Corp.
144A Sr. Notes
8.375% 02/01/08 180 187,650
Sr. Notes, Series B
9.250% 10/01/02 310 329,375
BellSouth Telecommunications, Inc.
Debentures
5.850% 11/15/45 950 954,750
7.000% 12/01/45 255 264,881
CenCall Communications Corp.
Sr. Discount Notes
10.125% 01/15/04 425 431,375
CS Wireless Systems, Inc.
Sr. Discount Notes, Series B
11.375% 03/01/06++ 1,040 208,000
See Accompanying Notes to Financial Statements.
19
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
CORPORATE BONDS (cont'd)
Telecommunications (cont'd)
Echostar DBS Corp.
Sr. Notes
9.250% 02/01/06 $ 420 $ 424,200
Global Communicacoes e
Participacoes S.A.
144A Par Bonds
10.625% 12/05/08 670 371,850
GTE Corp. Debentures
6.840% 04/15/18 1,120 1,141,000
6.940% 04/15/28 1,160 1,193,350
GTE North, Inc.
Debentures, Series D
6.900% 11/01/08 395 418,206
Intermedia Communication Inc.
Sr. Notes, Series B
8.500% 01/15/08 220 206,800
ITC Deltacom, Inc.
144A Sr. Notes
11.000% 06/01/07 225 246,375
Level 3 Communications, Inc.,
144A Sr. Notes
9.125% 05/01/08 440 429,000
MCI Communications Corp.
Sr. Discount Notes
6.125% 04/15/10+ 1,615 1,619,038
McleodUSA, Inc.
144A Sr. Notes
8.125% 02/15/09 130 129,025
Metromedia Fiber Network
144A Sr. Notes
10.000% 11/15/08 190 199,500
Nextel Communications, Inc.
Sr. Redeemable Discount Notes
9.950% 02/15/08++ 785 502,400
10.650% 09/15/07++ 1,380 938,400
Sr. Discount Notes
9.750% 08/15/04++ 2,850 2,899,875
9.750% 10/31/07++ 225 146,813
See Accompanying Notes to Financial Statements.
20
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
CORPORATE BONDS (cont'd)
Telecommunications (cont'd)
NEXTLINK Communications, Inc.
Sr. Notes
9.625% 10/01/07 $ 220 $ 218,350
144A Sr. Notes
10.750% 11/15/08 310 321,625
Paging Network, Inc.,
Sr. Sub. Notes
8.875% 02/01/06 70 59,500
10.000% 10/15/08 570 495,900
Notes Callable
10.125% 08/01/07 800 696,000
Qwest Communications
144A Sr. Notes Callable
7.250% 11/01/08 310 321,625
TCI Communications Inc.
Notes
6.340% 02/01/02 1,585 1,602,831
Telefonica de Argentina
144A Medium Term Notes
9.125% 05/07/08 850 782,000
Teleport Communications Group, Inc.
Sr. Discount Notes
9.650% 03/31/27 1,445 1,721,356
Wireless One, Inc.
Sr. Discount Notes
13.500% 08/01/06++ 635 57,150
Worldcom, Inc.
Sr. Notes
8.875% 01/15/06 2,120 2,281,650
6.950% 08/15/28 1,225 1,254,094
------------
23,053,944
------------
Transportation (2.8%)
Continental Airlines, Inc.
Sr. Notes
9.500% 12/15/01 1,755 1,844,944
Delco Remy International, Inc.
Gtd. Sr. Sub Notes
10.625% 08/01/06 220 235,400
Grupo Transportacion Ferroviaria
Mexicana, S.A. de C.V.
Yankee Gtd. Sr. Notes
11.750% 06/15/09 2,465 1,318,775
See Accompanying Notes to Financial Statements.
21
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
CORPORATE BONDS (cont'd)
Transportation (cont'd)
Norfolk Southern Corp.
Notes
7.875% 02/15/04 $ 5 $ 5,350
7.050% 05/01/04 2,250 2,382,188
Northwest Airlines, Inc.,
Gtd. Notes
7.875% 03/15/08 290 260,638
7.625% 03/15/05 3,065 2,819,800
US Airways, Inc.,
Gtd. Sr. Notes
9.625% 02/01/01 1,710 1,752,647
------------
10,619,742
------------
Utilities (2.3%)
Beaver Valley Funding Corp.
Secured Lease Obligation Bonds
9.000% 06/01/17 2,370 2,577,375
Connecticut Light and Power Co.
First Mortgage Bonds, Series C
7.750% 06/01/02 1,060 1,090,475
First Mortgage Bonds, Series D
7.875% 10/01/24 720 747,900
Niagara Mohawk Power Corp.
First Mortgage Bonds
8.750% 04/01/22 1,110 1,155,788
North Atlantic Energy Corp.
Secured First Mortgage Notes,
Series A
9.050% 06/01/02 1,556 1,569,615
TU Electric Capital V,
Capital Securities
8.175% 01/30/37 1,410 1,484,025
------------
8,625,178
------------
Waste Management (0.1%)
Allied Waste North America,
Sr. Notes
7.875% 01/01/09 185 187,313
Allied Waste North America,
Gtd. Notes
7.375% 01/01/04 30 30,450
------------
217,763
------------
TOTAL CORPORATE BONDS (Cost $133,536,480) $130,508,936
------------
See Accompanying Notes to Financial Statements.
22
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
MUNICIPAL BONDS (2.1%)
Florida State Board of Education,
Capital Outlay GO, Series B
4.750% 06/01/23 $ 705 $ 675,919
Illinois State GO
4.750% 06/01/23 850 796,875
Massachusetts State Water
Resources Authority, General
Revenue Bonds, Series A
4.750% 08/01/27 960 900,000
Massachussetts Bay
Transportation Authority,
General Transportation
Systems Revenue Bonds,
Series A
4.750% 03/01/21 765 727,706
Metropolitan Transit Authority,
NY Dedicated Tax Fund,
Series A
4.750% 04/01/28 260 246,025
Nevada State General Obligation
(Municipal Bond Bank Project
Numbers 65 & R-6)
4.750% 05/15/26 1,000 940,000
New Jersey Economic
Development Authority, State
Pension Funding Revenue Bonds
0.000% 02/15/09 155 83,119
Series B
0.000% 02/15/01 320 286,000
0.000% 02/15/02 165 138,600
0.000% 02/15/03 1,085 858,506
New York City Municipal Water
Finance Authority, Water and
Sewer Systems Revenue Bond,
Series D
4.750% 06/15/25 395 375,250
4.750% 06/15/25 735 698,250
Ohio State Turnpike Commission,
Series B
4.750% 02/15/28 530 503,500
Tampa, FL Health Systems
Revenue Bond
4.750% 11/15/28 45 42,356
See Accompanying Notes to Financial Statements.
23
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
MUNICIPAL BONDS (cont'd)
Triborough Bridge & Tunnel
Authority NY, Series A
4.750% 01/01/24 $ 500 $ 476,875
------------
TOTAL MUNICIPAL BONDS (Cost $7,759,207) $ 7,748,981
------------
FOREIGN GOVERNMENT BONDS (4.3%)
Federal Republic of Brazil,
Discount Bond, Series Z - L
6.125% 04/15/24 $ 560 $ 312,200
Republic of Argentina, Sr. Notes
12.163% 04/10/05+ 2,180 1,940,200
Republic of Colombia,
Yankee Notes
10.986% 08/13/05 2,575 2,317,500
Republic of Philippines,
Global Bonds
9.875% 01/15/19 1,025 1,018,594
Republic of Poland,
Past Due Interest Bonds
5.000% 10/27/14++ 1,050 954,844
5.000% 10/27/14++ 8,420 7,656,938
United Mexican States Par Bonds,
Series W-A
6.250% 12/31/19 2,650 1,985,844
------------
TOTAL FOREIGN GOVERNMENT BONDS (Cost $16,034,861) $ 16,186,120
------------
AGENCY OBLIGATIONS (47.3%)
Federal Home Loan Mortgage Corporation (0.5%)
Various Pools:
6.500% 07/01/99 $ 51 $ 51,730
7.000% 12/01/09 667 681,138
Series MACR 1860 Principle Only
0.000% 02/15/24 1,505 1,055,744
------------
TOTAL FEDERAL HOME LOAN MORTGAGE CORPORATION $ 1,788,612
------------
Federal National Mortgage Association (40.9%)
Various Pools:
10.000% 02/01/05 $ 183 $ 194,053
10.000% 01/01/10 838 907,352
6.000% 10/01/28 12,572 12,195,253
6.000% 01/01/29 4,137 4,012,611
6.000% 01/01/29 11,200 10,864,001
REMIC - PAC 1991-165 Class M
8.250% 12/25/21 12 12,656
See Accompanying Notes to Financial Statements.
24
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
AGENCY OBLIGATIONS (cont'd)
Federal National Mortgage Association (cont'd)
Series 1996-5 Class PX PO
0.000% 11/25/23 $ 198 $ 139,399
Series 1997-16 Class M PO
0.000% 02/25/23 170 117,513
TBA
6.000% 01/15/11 14,980 14,834,881
6.500% 05/01/13 7,665 7,715,302
8.000% 03/15/25 34,330 35,713,928
6.000% 04/15/25 53,060 51,435,038
6.500% 09/01/27 14,960 14,866,500
------------
TOTAL FEDERAL NATIONAL MORTGAGE ASSOCIATION $153,008,487
------------
Government National Mortgage Association (5.0%)
Various Pools:
6.500% 09/15/03 $ 6 $ 6,008
8.250% 08/15/04 1 524
9.000% 11/15/04 1 876
9.000% 12/15/04 1 759
8.250% 04/15/06 1 1,243
13.500% 07/15/14 1 913
9.000% 12/15/16 25 26,316
8.000% 04/15/17 99 103,677
9.000% 08/15/21 394 421,237
TBA
6.500% 09/01/25 18,460 18,356,163
------------
TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION $ 18,917,716
------------
Miscellaneous (0.9%)
Government Trust Certificates
Collateral Trust Series 1C
(Aaa, AAA)
9.250% 11/15/01 $ 365 $ 375,177
National Archives Facility Trust
COP (Aaa, AAA)
8.500% 09/01/19 676 807,713
Tennessee Valley Authority
Debentures, Series B (Aaa, NR)
6.235% 07/15/45 60 61,650
Power Bonds Series A (NR, AAA)
5.880% 04/01/36 1,980 1,947,825
------------
3,192,365
------------
TOTAL AGENCY OBLIGATIONS (Cost $178,380,528) $176,907,180
------------
See Accompanying Notes to Financial Statements.
25
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
ASSET BACKED SECURITIES (1.3%)
Capital Equipment Receivables
Trust Series 1996-1, Class A3
6.110% 07/15/99 $ 192 $ 191,821
Goldome Credit Corp. Home
Equity Trust Series 1990-1,
Class A
10.000% 07/15/05 34 34,570
Green Tree Financial Corp.
Manufactured Housing Retail
Installment Sales Contracts,
Series 1995-6, Class A-3
6.650% 09/15/26 1,052 1,060,577
Series 1998-C, Class A-2
6.250% 09/15/26 35 34,717
Green Tree Recreational,
Equipment & Consumer Trust
Series 1997-C, Class A1
6.490% 02/15/18 566 565,045
Series 1998-B, Class A-3
6.050% 10/15/10 1,065 1,068,328
Green Tree Securitized Net
Interest Margin Trust, REMIC,
Series 1994-A, Class A
6.900% 02/15/04 582 583,424
Health & Retirement Properties
5.658% 04/09/99+ 100 99,125
Merrill Lynch Mortgage Investors, Inc.,
Manufactured Housing
Retail Installment Sales
Contracts Series 1991-C,
Class A
9.000% 07/15/11 38 37,952
National Westminster Bank
Debentures Guaranteed Cap
Notes
9.375% 11/15/03 670 743,700
New York City Tax Lien
144A Collateralized Bonds,
Series 1996-1, Class C
7.110% 05/25/05 46 45,767
See Accompanying Notes to Financial Statements.
26
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
ASSET BACKED SECURITIES (cont'd)
Vanderbilt Mortgage Finance,
Manufactured Housing Retail
Installment Sales Contracts,
Series 1995-B, Class A3
6.675% 05/07/06 $ 325 $ 327,152
------------
TOTAL ASSET BACKED SECURITIES (Cost $4,813,799) $ 4,792,178
------------
COLLATERALIZED MORTGAGED BACKED SECURITIES (3.9%)
AESOP Funding II Series 1997-1,
Class A1
6.220% 10/20/01 $ 720 $ 724,313
Asset Securitization Corp.
Series 1996-MD6, Class A6
7.484% 03/13/99 760 727,819
Carousel Center Finance Inc.
Series 1, Class C, Rule 144A
7.527% 11/15/07 340 344,554
Cityscape Home Equity Loan Trust,
Home Equity Loan Certificates
Series 1996-2, Class A2
7.200% 11/15/06 291 294,616
Collateralized Mortgage Obligation Trust, REMIC
Series 54, Class C
9.250% 11/01/13 1 1,168
Contimortgage Home Equity Loan Trust
Series 1996-4, Class A8
7.220% 01/15/28 820 824,378
Series 1998-1, Class A5
6.430% 04/15/16 1,980 1,987,413
G3 Mortgage Reinsurance Corp.
Class A
6.042% 03/25/99 950 886,469
General Motors Acceptance
Corp. Commercial Mortgage
Securities, Inc. Series 1997-C1,
Class A2
6.853% 09/15/06 530 554,181
See Accompanying Notes to Financial Statements.
27
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
COLLATERALIZED MORTGAGED BACKED SECURITIES (cont'd)
Kidder Peabody Acceptance Corp.
Series 1993-M1, Class A1
7.150% 04/25/25 $ 201 $ 200,105
Series 1994-C1, Class A
6.650% 02/01/06 390 392,342
Series 1994-C1, Class B
6.850% 02/01/06 1,305 1,332,527
New Century Home Equity Loan
Trust Series 1997-NC6,
Class A4
6.730% 07/25/22 675 673,192
PaineWebber Mortgage Acceptance
Corp. IV Multifamily Mortgage
Pass-Throughs Series 1995-M1,
Class A 144A
6.700% 01/15/07 1,430 1,451,450
Residential Reinsurance Ltd.
Series 1998-A2
9.435% 03/01/99 600 607,200
Salomon Brothers Mortgage
Securities VII, Series 1997-NC4,
Class A
5.198% 03/25/99 44 44,387
Southern Pacific Secured Asset
Corp. Home Equity,
Series 1998-1, Class A2
6.270% 03/25/28 2,455 2,454,616
Structured Asset Securitization
Corp. Series 1996-CFL,
Class A1C
5.944% 02/25/28 362 362,020
UCFC Home Equity Loan
Series 1996-B1, Class A7
8.200% 09/15/27 745 765,703
------------
TOTAL COLLATERALIZED MORTGAGED BACKED SECURITIES
(Cost $14,747,980) $ 14,628,453
------------
See Accompanying Notes to Financial Statements.
28
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
COMMON STOCK (0.0%)
Packaging/Containers (0.0%)
Crown Packaging Enterprises, Ltd. 45,544 $ 455
------------
TOTAL COMMON STOCK (Cost $0) $ 455
------------
PREFERRED STOCKS (2.2%)
Banking (2.0%)
California Federal Capital Corp.
Series A 94,200 $ 2,490,413
Centaur Funding Corp. 1,360 1,501,100
Citigroup, Inc. 37,300 1,902,300
Lehman Brothers Holdings 10,800 461,700
NationsBank Captial Corp. 46,600 1,234,900
------------
7,590,413
------------
Real Estate (0.2%)
American Real Estate Corp.
8.50% Cumulative, Series A 29,600 771,450
------------
TOTAL PREFERRED STOCKS (Cost $8,446,853) $ 8,361,863
------------
Par
(000)
-----
U.S. TREASURY OBLIGATIONS (13.6%)
U.S. Treasury Bills (0.1%)
4.365% 04/08/99 $ 330 $ 327,732
4.280% 04/08/99 40 39,751
4.320% 04/08/99 100 99,380
------------
466,863
------------
U.S. Treasury Bonds (2.7%)
8.000% 11/15/21 8,015 10,176,145
------------
U.S. Treasury Inflation Protected Notes (1.9%)
3.625% 01/15/08 7,300 7,258,305
------------
U.S. Treasury Notes (7.6%)
8.500% 02/15/00 220 227,090
5.375% 02/15/01 12,550 12,606,378
6.625% 06/30/01 185 190,872
6.250% 06/30/02 6,265 6,453,804
7.500% 02/15/05 5 5,537
6.250% 02/15/07 8,280 8,719,394
------------
28,203,075
------------
See Accompanying Notes to Financial Statements.
29
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
U.S. TREASURY OBLIGATIONS (cont'd)
U.S. Treasury Strip Bonds (1.3%)
0.000% 11/15/16 $ 3,430 $ 1,197,932
0.000% 05/15/17 10,950 3,732,112
------------
4,930,044
------------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $51,383,909) $ 51,034,432
------------
Number
of
Shares
------
RIGHTS/WARRANTS (0.0%)
Capital Pacific Holdings
Group, Inc. 2,528 $ 1,390
Checkers Drive-In Restaurants 2,642 330
Mexican Value Recovery
Rights 1,000
Uniroyal Technology Corp. 10,800 69,525
------------
TOTAL RIGHTS/WARRANTS (Cost $14,178) $ 71,245
------------
See Accompanying Notes to Financial Statements.
30
<PAGE>
Warburg Pincus U.S. Core Fixed Income Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- -----
SHORT-TERM INVESTMENTS (27.9%)
BBH Grand Cayman U.S. Dollar
Time Deposit
4.250% 03/01/99 $46,426 $ 46,426,000
Federal Home Loan Bank
Discount Notes
4.900% 03/18/99 9,900 9,876,717
Federal Home Loan Mortgage
Corp. Discount Notes
4.930% 03/17/99 48,100 47,992,851
------------
TOTAL SHORT-TERM INVESTMENTS (Cost $104,297,700) $104,295,568
------------
TOTAL INVESTMENTS (137.5%) (Cost $519,415,495*) $514,535,411
LIABILITIES IN EXCESS OF OTHER ASSETS (37.5%) (140,315,168)
------------
TOTAL NET ASSETS (100.0%) $374,220,243
============
* Cost for Federal income tax purposes at February 28, 1999 is $519,436,781.
The gross appreciation (depreciation) on a tax basis is as follows:
Gross Appreciation $ 2,563,176
Gross Depreciation (7,464,546)
------------
Net Depreciation $(4,901,370)
============
+ Variable rate obligations -- The interest shown is the rate as of
February 28, 1999.
++ Step Bond -- The interest rate as of February 28, 1999 is 0% and will reset
to interest rate shown at a future date.
+++ Securities have no stated maturity date.
INVESTMENT ABBREVIATIONS
FRN = Floating Rate Note
MACR = Modified and Combinable Real Estate Investment Conduit
PAC = Planned Amortization Class
REMIC = RealEstate Mortgage Investment Conduit
TBA = To Be Announced
See Accompanying Notes to Financial Statements.
31
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (94.7%)
Aerospace/Defense (0.4%)
K&F Industries, Inc.
Sr. Sub. Notes
9.250% 10/15/07 $ 500 $ 512,500
------------
Automotive (3.7%)
Aetna Industries, Inc.
Sr. Notes
11.875% 10/01/06 500 518,125
Breed Technologies, Inc.
144A Sr. Sub. Notes
9.250% 04/15/08 650 325,000
Cambridge Industries, Inc.
Gtd. Sr. Sub. Notes, Series B
10.250% 07/15/07 400 334,000
Collins & Aikman Products Corp.
Gtd. Sr. Sub. Notes
11.500% 04/15/06 600 634,500
Consorcio G Grupo Dina S.A./MCII
Holdings (U.S.A.), Inc.
144A Sr. Secured Notes
12.000% 11/15/02 500 431,875
Delco Remy International, Inc.
Gtd. Sr. Sub Notes
10.625% 08/01/06 500 535,000
Hayes Lemmerz International, Inc.
144A Sr. Sub. Notes
8.250% 12/15/08 400 405,000
Hayes Wheels International, Inc.
Sr. Sub. Notes, Series B
9.125% 07/15/07 350 370,125
LDM Technologies, Inc.
144A Sr. Sub. Notes, Series B
10.750% 01/05/07 400 401,000
Oxford Automotive, Inc.
Gtd. Sr. Sub. Notes
10.125% 06/15/07 500 517,500
Oxford Automotive, Inc.
Sr. Sub. Notes
10.125% 06/15/07 300 310,500
Safelite Glass Corp.
Sr. Sub. Notes
9.875% 12/15/06 350 329,000
See Accompanying Notes to Financial Statements.
32
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Automotive (cont'd)
Titan Wheel International, Inc.
Sr. Sub. Notes
8.750% 04/01/07 $ 250 $ 234,375
------------
5,346,000
------------
Broadcasting (4.9%)
Allbritton Communications Company
Sr. Sub. Notes, Series B
8.875% 02/01/08 250 256,250
9.750% 11/30/07 250 268,750
American Radio Systems Corp.
Gtd. Sr. Sub. Notes
9.000% 02/01/06 250 272,500
Australis Holdings Pty. Ltd.
144A Yankee Sr. Secured
Discount Notes
15.000% 11/01/02 294 2,940
Australis Media Ltd.
Yankee Gtd. Sr. Sub.
Discount Notes
15.750% 05/15/03+ 8 60
15.750% 05/15/03 900 6,750
Big City Radio, Inc.,
144A Sr. Bonds
11.250% 03/15/05+ 750 528,750
Capstar Broadcasting, Inc.
Sr. Sub. Discount Notes
12.750% 02/01/09+ 500 423,125
Chancellor Media Corp.
Sr. Sub. Notes
9.375% 10/01/04 250 264,375
144A Sr. Notes
8.000% 11/01/08 350 371,000
Citadel Broadcasting Co.
144A Sr. Sub. Notes
9.250% 11/15/08 750 801,562
Emmis Communications Corp.,
144A Sr. Sub. Notes
8.125% 03/15/09 500 501,250
Granite Broadcasting Corp.
144A Sr. Sub Notes
8.875% 05/15/08 250 248,125
Sr. Sub. Notes
9.375% 12/01/05 450 460,125
See Accompanying Notes to Financial Statements.
33
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Broadcasting (cont'd)
Jacor Communications Co.
Sr. Sub. Notes
9.750% 12/15/06 $ 250 $ 278,125
Pegasus Communications Corp.
Sr. Notes, Series B
9.625% 10/15/05 250 258,750
Sinclair Broadcast Group
Sr. Sub. Notes
10.000% 09/30/05 400 423,000
Spanish Broadcasting System, Inc.
144A Sr. Notes
11.000% 03/15/04 300 322,875
TCI Satellite
144A Sr. Discount Notes
12.250% 02/15/07+ 200 106,500
144A Sr. Sub. Notes
10.875% 02/15/07 350 259,000
United International Holdings,
144A Sr. Discount Notes
10.750% 02/15/08+ 1,000 652,500
Young Broadcasting, Inc.
Gtd. Sr. Sub. Notes, Series B
9.000% 01/15/06 250 257,812
------------
6,964,124
------------
Business Services (0.9%)
Big Flower Press Holdings, Inc.
Sr. Sub. Notes $
8.625% 12/01/08 500 510,625
Iron Mountain, Inc.
144A Sr. Notes
8.750% 09/30/09 500 516,875
U.S. Office Products Co.
144A Sr. Sub. Notes
9.750% 06/15/08 400 287,500
------------
1,315,000
------------
Cable (11.1%)
Adelphia Communications Corp.
Sr. Notes, Series B
10.500% 07/15/04 400 446,000
Avalon Cable Holdings
Sr. Discount Notes
11.875% 12/01/08 500 310,000
See Accompanying Notes to Financial Statements.
34
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Cable (cont'd)
Avalon Cable of Michigan, Inc.
Sr. Sub. Notes
9.375% 12/01/08 $ 650 $ 687,375
Century Communications,
Sr. Discount Notes, Series B
0.000% 01/15/08 1,000 533,750
Charter Communications
Southeast, L.P.
Sr. Notes, Series B
11.250% 03/15/06 900 1,037,250
Classic Cable
Sr. Sub. Notes
9.875% 08/01/08 500 526,250
Coaxial Communications, Inc.
Phoenix Associates Co.
Gtd. Notes
10.000% 08/15/06 450 474,750
Coaxial L.L.C.
144A Co. Gtd.
12.875% 08/15/08+ 400 246,000
Comcast U.K. Cable Partners Ltd.,
Yankee Sr. Debentures
11.200% 11/15/07+ 750 661,875
CSC Holdings,
Sr. Debentures
9.875% 02/15/13 500 556,250
Diamond Cable Communications plc
Sr. Discount Notes
11.750% 12/15/05+ 500 435,000
DIVA Systems Corp.
12.625% 03/01/08 2,527 767,576
Echostar DBS Corp.
144A Sr. Notes
9.375% 02/01/09 500 503,750
Falcon Holding Group L.P./Falcon
Funding Corp.
144A Debentures
9.285% 04/15/10+ 500 351,250
8.375% 04/15/10 400 412,000
Frontiervision Holdings L.P.
Sr. Discount Notes
11.875% 09/15/07+ 500 435,000
Galaxy Telecom L.P.
Sr. Sub. Notes
12.375% 10/01/05 400 448,500
See Accompanying Notes to Financial Statements.
35
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Cable (cont'd)
Golden Sky Systems, Inc.
144A Sr. Discount Notes
13.500% 03/01/07+ $ 750 $ 405,000
Hellcon Group L.P.
Sr. Secured
Notes, Series B
11.000% 11/01/03 500 523,125
International CableTel, Inc.
Sr. Deferred Coupon Notes,
Series A
12.750% 04/15/05+ 750 712,500
James Cable Partners L.P./ James
Cable Finance Corp.
Sr. Notes, Series B
10.750% 08/15/04 650 688,187
Jones Intercable, Inc.
Sr. Notes
7.625% 04/15/08 500 536,250
Lenfest Communications, Inc.
Sr. Notes
8.375% 11/01/05 300 329,250
Marcus Cable L.P.
Sr. Discount Notes
14.250% 12/15/05+ 650 640,250
Mediacom L.L.C. Capital
144A Sr. Notes
7.875% 02/15/11 300 295,500
Metromedia Fiber Network
144A Sr. Notes
10.000% 11/15/08 500 525,000
Northland Cable Television,
144A Sr. Sub. Notes
10.250% 11/15/07 600 637,500
Rifkin Acquisition Partners L.P.
Sr. Sub. Notes
11.125% 01/15/06 500 569,375
Rogers Communications, Inc.
Yankee Sr. Notes
9.125% 01/15/06 550 576,125
Telewest Communications
Group plc
Yankee Sr. Discount Debentures
11.000% 10/01/07+ 700 610,750
------------
15,881,388
------------
See Accompanying Notes to Financial Statements.
36
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Cellular/Wireless Communications (2.0%)
Centennial Cellular Corp.
144A Sr. Sub. Notes
10.750% 12/15/08 $ 500 $ 537,500
Comcast Cellular Holding, Inc.
Sr. Notes, Series B
9.500% 05/01/07 500 570,625
Dobson Communications
144A Sr. Notes
11.750% 04/15/07 250 267,812
Microcell Telecommunications, Inc.
Yankee Sr. Discount Notes,
Series B
14.000% 06/01/06+ 500 398,125
Nextel Communications, Inc.
Sr. Discount Notes
9.750% 08/15/04 500 508,750
Sprint Spectrum L.P./Sprint
Spectrum Finance Corp.
Sr. Notes
11.000% 08/15/06 500 578,750
------------
2,861,562
------------
Chemicals (1.8%)
ClimaChem, Inc.
Notes, Series B
10.750% 12/01/07 500 508,125
Huntsman Corp.
144A Sr. Sub. Notes
9.500% 07/01/07 600 608,250
Philipp Brothers Chemicals, Inc.
Co. Gtd. Sr. Notes
9.875% 06/01/08 450 437,062
Pioneer Americas Acquistics Corp.
Gtd. Sr. Secured Notes, Series B
9.250% 06/15/07 250 173,437
Radnor Holdings Corp.
Sr. Notes, Series B
10.000% 12/01/03 500 515,625
Sterling Chemical Holdings, Inc.
Sr. Secured Discount Notes
13.500% 08/15/08+ 700 280,000
------------
2,522,499
------------
See Accompanying Notes to Financial Statements.
37
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Computers, Software & Services (0.4%)
Verio, Inc. 144A Units
13.500% 06/15/04 $ 350 $ 382,812
Sr. Notes
10.375% 04/01/05 200 206,750
------------
589,562
------------
Construction & Building Materials (2.0%)
Collins & Aikman
Floorcoverings, Inc.
Sr. Sub. Notes, Series B
10.000% 01/15/07 500 526,875
D.R. Horton, Inc.
Sr. Notes
8.000% 02/01/09 500 498,125
Koppers Industry, Inc.
Sr. Sub. Notes
9.875% 12/01/07 250 250,937
Omega Cabinets, Ltd.
Sr. Sub. Notes
10.500% 06/15/07 400 385,000
Southdown, Inc.
Sr. Sub. Notes, Series B
10.000% 03/01/06 500 551,250
Uniforet, Inc.
Yankee Gtd. Sr. Notes
11.125% 10/15/06 500 355,000
Waxman Industries, Inc.
Sr. Notes,
Series B
12.750% 06/01/04+ 600 312,000
------------
2,879,187
------------
Consumer Products & Services (3.1%)
Coinstar, Inc.
Sr. Discount Notes
13.000% 10/01/06+ 525 460,687
Drypers Corp.
Sr. Notes, Series B
10.250% 06/15/07 250 235,000
Group Maintenance America Corp.
144ASr. Sub. Notes
9.750% 01/15/09 500 513,750
Holmes Products Corp.
144A Sr. Sub. Notes
9.875% 11/15/07 500 481,875
See Accompanying Notes to Financial Statements.
38
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Consumer Products & Services (cont'd)
Hosiery Corp. of America, Inc.
Sr. Sub. Notes
13.750% 08/01/02 $ 400 $ 431,500
Packaged Ice, Inc.
144A Gtd. Sr. Notes
9.750% 02/01/05 500 511,875
Signature Brands USA, Inc.
Sr. Sub. Notes
13.000% 08/15/02 250 276,875
The Scotts Co.
144A Sr. Sub. Notes
8.625% 01/15/09 300 309,000
United Rentals, Inc.
144A Sr. Sub. Notes
9.250% 01/15/09 500 519,375
Werner Holdings Co., Inc.
Gtd. Sr. Sub. Notes, Series A
10.000% 11/15/07 500 503,750
Worldtex, Inc.
144A Sr. Notes
9.625% 12/15/07 250 216,875
------------
4,460,562
------------
Utilities (0.4%)
Integrated Electric Services, Inc.
144A Sr. Sub. Notes
9.375% 02/01/09 500 508,750
------------
Electronics (1.0%)
Ampex Corp.
144A Sr. Notes
12.000% 03/15/03 500 520,000
Elgar Holdings Inc.,
144A Gtd. Sr. Notes
9.875% 02/01/08 500 422,500
Unisys Corporation
Sr. Notes, Series B
12.000% 04/15/03 400 446,000
------------
1,388,500
------------
Energy (4.3%)
Abraxas Petroleum, Inc. and
Canadian Abraxas Petroleum Limited,
Gtd. Sr. Notes, Series D
11.500% 11/01/04 500 260,000
See Accompanying Notes to Financial Statements.
39
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Energy (cont'd)
AEI Resources, Inc.
144A Sr. Sub. Notes
11.500% 12/15/06 $ 400 $ 394,500
Bellwether Exploration Co.
Gtd. Sr. Sub. Notes
10.875% 04/01/07 250 242,812
Cliffs Drilling Company
Gtd. Sr. Notes, Series D
10.250% 05/15/03 350 356,562
CMS Energy Corp.
Medium Term Notes
6.750% 01/15/04 650 633,750
Sr. Notes
7.500% 01/15/09 500 500,000
Dailey International, Inc.
Gtd. Sr. Notes, Series B
9.500% 02/15/08 400 200,500
Eagle Geophysical, Inc. Co.
Gtd.
10.750% 07/15/08 500 289,375
Forcenergy, Inc.
Sr. Sub. Notes
9.500% 11/01/06 250 90,000
8.500% 02/15/07 250 91,875
HS Resources, Inc.
Sr. Sub. Notes
9.250% 11/15/06 400 379,500
Gtd. Sr. Sub. Notes
9.250% 11/15/06 100 94,875
KCS Energy Inc.
Gtd. Sr. Sub. Notes
8.875% 01/15/08 250 87,500
Kelley Oil & Gas Corp.
Gtd. Sr. Sub. Notes
10.375% 10/15/06 500 320,000
Key Energy Services, Inc.
144A Units
14.000% 01/15/09 750 751,875
Nuevo Energy Company
Gtd.Sr. Sub. Notes
9.500% 04/15/06 250 232,187
Plains Resources, Inc.
Gtd. Sr. Sub. Notes, Series B
10.250% 03/15/06 250 253,125
See Accompanying Notes to Financial Statements.
40
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Energy (cont'd)
Pogo Producing Co.
Sr. Sub. Notes, Cl.B
8.750% 05/15/07 $ 500 $ 451,250
Pride Petroleum Services, Inc.
Sr. Notes
9.375% 05/01/07 300 281,625
Southwest Royalties, Inc.
Gtd. Sr. Notes, Series B
10.500% 10/15/04 300 132,750
Wiser Oil Co.
Gtd. Sr. Sub. Notes
9.500% 05/15/07 250 150,000
------------
6,194,061
------------
Entertainment (3.6%)
Ackerley Group, Inc.
Sr. Sub. Notes
9.000% 01/15/09 500 520,000
AMC Entertainment, Inc.
Sr. Sub. Notes
9.500% 03/15/09 500 491,250
American Skiing Co.
Sr. Sub. Notes, Series B
12.000% 07/15/06 400 397,000
AMF Bowling Worldwide, Inc.
Gtd. Sr. Discount Notes
12.250% 03/15/06+ 350 282,625
Sr. Discount Notes, Series B
10.875% 03/15/06 459 263,925
Booth Creek Ski Holdings, Inc.
Gtd. Sr. Notes, Series B
12.500% 03/15/07 400 389,500
Imax Corp. Sr. Notes
7.875% 12/01/05 500 491,875
KSL Recreation Group, Inc.
Sr. Sub. Notes
10.250% 05/01/07 500 501,250
Premier Parks Inc.
Sr. Notes
9.250% 04/01/06 250 262,187
Premier Parks, Inc.
Gtd. Sr. Notes
9.750% 01/15/07 250 271,250
See Accompanying Notes to Financial Statements.
41
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Entertainment (cont'd)
Regal Cinemas, Inc.
144A Sr. Sub. Notes
8.875% 12/15/10 $ 750 $ 725,625
SFX Entertainment, Inc.
Sr. Sub. Notes
9.125% 12/01/08 500 506,250
------------
5,102,737
------------
Environmental Services (0.3%)
First Wave Marine
Sr. Notes
11.000% 02/01/08 500 471,250
------------
Financial Services (0.7%)
DVI, Inc.
Sr. Notes
9.875% 02/01/04 500 489,375
Oglebay Norton Co.
144A Sr. Sub. Notes
10.000% 02/01/09 500 486,875
------------
976,250
------------
Food & Beverage (4.1%)
Agrilink Foods, Inc.
Sr. Sub. Notes
11.875% 11/01/08 500 536,250
AmeriServ Food Distribution, Inc.
Gtd. Sr. Notes
8.875% 10/15/06 500 466,250
Archibald Candy Corp.
Gtd. Sr. Secured Notes
10.250% 07/01/04 300 306,000
10.250% 07/01/04 250 255,000
BGF Industries, Inc.
144A Sr. Sub. Notes
10.250% 01/15/09 500 506,250
Delta Beverage Group, Inc.
Sr. Notes
9.750% 12/15/03 250 265,312
Eagle Family Foods, Inc.
Sr. Sub. Notes
8.750% 01/15/08 600 576,750
Fleming Companies, Inc.
Sr. Gtd. Sub. Notes, Series B
10.500% 12/01/04 150 142,312
See Accompanying Notes to Financial Statements.
42
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Food & Beverage (cont'd)
International Home Foods, Inc.
Gtd. Sr. Sub. Notes
10.375% 11/01/06 $ 250 $ 269,062
Luigino's, Inc.
144A Sr. Sub. Notes
10.000% 02/01/06 500 500,625
Mrs. Fields' Holding Co., Inc.
144A Units
14.000% 12/01/05+ 200 111,500
Mrs. Fields' Original Cookies Inc.
Gtd. Sr. Notes, Series B
10.125% 12/01/04 150 144,375
144A Gtd. Sr. Notes, Series A
10.125% 12/01/04 350 336,875
National Wine & Spirits
Holding Corp.
144A Sr. Notes
10.125% 01/15/09 500 513,750
New World Pasta Co.
144A Sr. Sub. Notes
9.250% 02/15/09 500 507,500
Premium Standard Farm, Inc.
Sr. Secured Notes
11.000% 09/17/03 450 461,250
------------
5,899,061
------------
Health Care (2.3%)
Beverly Enterprises, Inc.
Gtd. Sr. Notes
9.000% 02/15/06 400 403,500
Fountain View, Inc. Co.
Gtd.
11.250% 04/15/08 500 438,750
Genesis Health Ventures
144A Sr. Sub. Notes
9.875% 01/15/09 500 417,500
InSight Health Services, Inc. Co.
Gtd. Sr. Notes
9.625% 06/15/08 400 391,000
Integrated Health Services, Inc.
Sr. Sub. Notes, Series A
9.500% 09/15/07 250 190,000
Oxford Health Plans, Inc.
144A Sr. Notes
11.000% 05/15/05 400 407,000
See Accompanying Notes to Financial Statements.
43
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Health Care (cont'd)
Paracelsus Healthcare Corp.
Sr. Sub. Notes
10.000% 08/15/06 $ 250 $ 213,437
Quest Diagnostic, Inc.
Sr. Sub. Notes
10.750% 12/15/06 500 554,375
Tenet Healthcare Corp.
Sr. Sub. Notes
8.625% 01/15/07 250 256,250
------------
3,271,812
------------
Industrial Goods & Materials (3.0%)
Advanced Glass Fiber Yarns
144A Sr. Sub. Notes
9.875% 01/15/09 500 506,250
Anchor Lamina, Inc./Anchor
Lamina America, Inc.
144A Sr. Sub. Notes
9.875% 02/01/08 500 475,000
Golden Ocean Group Ltd.,
144A Gtd. Sr. Notes
10.000% 08/31/01 657 170,820
International Utility Structures, Inc.
144A Sr. Sub. Notes
13.000% 02/01/08 395 370,313
Jordan Industries, Inc.
Sr. Notes
10.375% 08/01/07 500 509,375
MMI Products, Inc.
144A Sr. Sub. Notes, Series B
11.250% 04/15/07 500 538,750
Morris Materials Handling, Inc.
144A Sr. Notes
9.500% 04/01/08 250 148,125
Motors & Gears, Inc.
Sr. Notes, Series D
10.750% 11/15/06 500 513,125
Russell Stanley Holdings, Inc.
Sr. Sub. Notes
10.875% 02/15/09 500 495,000
Thermadyne Holdings Corp.
Sr. Discount Debentures
12.500% 06/01/08+ 250 121,250
See Accompanying Notes to Financial Statements.
44
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Industrial Goods & Materials (cont'd)
World Color Press, Inc.
Sr. Sub. Notes
8.375% 11/15/08 $ 500 $ 511,875
------------
4,359,883
------------
Leisure & Entertainment (0.4%)
Hollywood Park, Inc.
144A Sr. Sub. Notes
9.250% 02/15/07 500 499,375
------------
Metals & Mining (2.4%)
Bayou Steel Corp. Co.
Gtd.
9.500% 05/15/08 500 483,750
Golden Northwest Aluminum
First Mortgage Notes
12.000% 12/15/06 400 407,500
Gulf States Steel, Inc.
First Mortgage Notes
13.500% 04/15/03 200 48,500
Haynes International, Inc.
Sr. Notes
11.625% 09/01/04 500 424,375
Ivaco, Inc. Yankee
Sr. Notes
11.500% 09/15/05 250 260,625
Kaiser Aluminum and
Chemical, Inc.
144A Sr. Notes
10.875% 10/15/06 250 254,375
Metallurg, Inc.
Sr. Notes
11.000% 12/01/07 500 457,500
NS Group, Inc.
Gtd. Sr. Secured Notes
13.500% 07/15/03 240 258,600
Weirton Steel Corporation
Sr. Notes
11.375% 07/01/04 350 329,000
WHX Corp.
Sr. Exchange Notes
10.500% 04/15/05 500 476,250
------------
3,400,475
------------
See Accompanying Notes to Financial Statements.
45
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Office Equipment & Supplies (0.2%)
Knoll, Inc.
Sr. Sub. Notes
10.875% 03/15/06 $ 325 $ 358,719
------------
Packaging & Containers (0.9%)
BPC Holding Corporation
Sr. Secured Notes, Series B
12.500% 06/15/06 500 527,500
Crown Packaging Enterprises Ltd.
Yankee Sr. Secured Discount Notes
14.000% 08/01/06+ 775 8,719
Four M Corp.
Gtd. Sr. Secured Notes,
Series B
12.000% 06/01/06 250 191,250
Plastic Containers, Inc.
Sr. Secured Notes, Series B
10.000% 12/15/06 250 262,813
Stone Container Finance Co.
Yankee Gtd. Sr. Notes
11.500% 08/15/06 250 251,875
------------
1,242,157
------------
Paper & Forest Products (2.7%)
Ainsworth Lumber Co. Ltd.
Yankee Sr. Secured PIK Notes
12.500% 07/15/07 400 399,000
Bear Island Paper Company, L.L.C./
Bear Island Finance Company II
Sr. Secured Notes, Series B
10.000% 12/01/07 400 398,500
Crown Paper Co.
Sr. Sub. Notes
11.000% 09/01/05 400 314,000
Gaylord Container Corp.
Sr. Notes
9.375% 06/15/07 600 559,500
MAXXAM Group Holdings, Inc.
144A Sr. Secured Notes,
Series B
12.000% 08/01/03 400 405,500
Printpack, Inc.
Sr. Sub. Notes, Series B
10.625% 08/15/06 450 433,125
See Accompanying Notes to Financial Statements.
46
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Paper & Forest Products (cont'd)
Repap New Brunswick
Sr. Yankee Notes
10.625% 04/15/05 $ 700 $ 528,500
S.D. Warren Co.
Sr. Sub. Notes
12.000% 12/15/04 500 543,125
Specialty Paperboard, Inc.
144A Sr. Notes
9.375% 10/15/06 250 255,000
------------
3,836,250
------------
Pharmaceuticals (0.3%)
ICN Pharmaceutical, Inc.
144A Sr. Notes
8.750% 11/15/08 500 502,500
------------
Publishing & Information Services (2.7%)
Gray Communications Systems
Gtd. Sr. Sub. Notes
10.625% 10/01/06 200 215,500
Hollinger International Publishing Inc.
Sr. Sub. Notes
9.250% 03/15/07 250 268,125
InterAct Systems, Inc.
144A Sr. Discount Notes
14.000% 08/01/03+ 700 280,000
Liberty Group Publishing, Inc.
Sr. Discount Debentures
11.625% 02/01/09+ 300 161,250
Mailwell Corp.
144A Sr. Sub. Notes
8.750% 12/15/08 400 410,000
Mentus Media Corp.
144A Sr. Secured Notes
12.000% 02/01/03 558 544,050
Nebraska Book Co.,
144A Sr. Sub. Notes
8.750% 02/15/08 500 479,375
Phoenix Color Corp.
144A Sr. Sub. Notes
10.375% 02/01/09 4500 506,250
Sun Media Corp.
Yankee Sr. Sub. Notes
9.500% 02/15/07 194 214,855
9.500% 05/15/07 65 71,988
See Accompanying Notes to Financial Statements.
47
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Publishing & Information Services (cont'd)
Tri-State Outdoor Media Group, Inc.
144A Sr. Notes
11.000% 05/15/08 $ 500 $ 514,375
TV Guide, Inc.
144A Sr. Sub. Notes
8.125% 03/01/09 275 273,281
------------
3,939,049
------------
Real Estate (0.8%)
HMH Properties, Inc.
Gtd. Sr. Notes
8.450% 12/01/08 300 297,750
Host Marriott Hotel Properties
Sr. Notes
7.875% 08/01/05 400 388,000
Intrawest Corp.
Yankee Sr. Notes
9.750% 08/15/08 500 509,375
------------
1,195,125
------------
Restaurants, Hotels & Gaming (8.9%)
AFC Enterprises
Sr. Sub. Notes
10.250% 05/15/07 400 423,000
American Restaurant Group, Inc.
144A Sr. Notes
11.500% 02/15/03 500 451,875
AmeriKing, Inc.
Gtd. Sr. Notes
10.750% 12/01/06 400 422,000
Ameristar Casinos, Inc.
Gtd. Sr. Sub. Notes, Series B
10.500% 08/01/04 500 473,750
Argosy Gaming Co.
Sub. Notes
12.000% 06/01/01 524 524,655
CapStar Hotel Co.,
144A Sr. Sub. Notes
8.750% 08/15/07 250 243,125
Carrols Corp.
144A Sr. Sub. Notes
9.500% 12/01/08 500 510,000
See Accompanying Notes to Financial Statements.
48
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Restaurants, Hotels & Gaming (cont'd)
Casino America, Inc.
Gtd. Sr. Notes
12.500% 08/01/03 $ 500 $ 561,875
Casino Magic of Louisiana Corp.
Gtd. First Mortgage Notes,
Series B
13.000% 08/15/03 600 674,250
Circus Circus Enterprise
Sr. Sub. Notes
9.250% 12/01/05 700 713,125
Coast Hotels and Casinos, Inc.
Gtd. First Mortgage Notes,
Series B
13.000% 12/15/02 350 411,688
Hard Rock Hotel, Inc.
144A Sr. Sub. Notes
9.250% 04/01/05 600 600,750
Harrahs Operating Co. Inc. Co.
Gtd.
7.875% 12/15/05 500 500,000
Harvey Casino Resorts
Sr. Sub. Notes
10.625% 06/01/06 500 530,000
Horseshoe Gaming L.L.C.
Gtd. Sr. Sub. Notes, Series B
9.375% 06/15/07 500 510,000
Louisiana Casino Cruises, Inc.
144A Secured Notes
11.000% 12/01/05 500 504,375
Mohegan Tribal Gaming Authority
Sr. Secured Notes, Series B
13.500% 11/15/02 400 480,000
144A Sr. Sub. Notes
8.750% 01/01/09 400 408,500
Park Place Entertainment
144A Sr. Sub. Notes
7.875% 12/15/05 250 245,625
Players International, Inc.
Sr. Notes
10.875% 04/15/05 250 268,750
Prime Hospitality Corp.
Secured First Mortgage Notes
9.250% 01/15/06 250 259,063
See Accompanying Notes to Financial Statements.
49
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Restaurants, Hotels & Gaming (cont'd)
Red Roof Inns, Inc.
Sr. Exchange Notes
9.625% 12/15/03 $ 250 $ 249,688
Rio Hotel & Casino, Inc.
Sr. Sub. Notes
10.625% 07/15/05 300 325,125
Showboat Marina Casino
Partnership/Showboat Marine
First Mortgage Notes, Series B
13.500% 03/15/03 450 521,438
Station Casinos, Inc.
Sr. Sub. Notes
10.125% 03/15/06 500 527,500
Sun International Hotels Ltd.
Yankee Gtd. Sr. Sub. Notes
9.000% 03/15/07 400 419,500
The Majestic Star Casino L.L.C.
Sr. Secured Notes
12.750% 05/15/03 500 535,000
Waterford Gaming L.L.C./
Waterford Gaming Finance Corp.
144A Sr. Notes
12.750% 11/15/03 473 532,125
------------
12,826,782
------------
Retail Trade (3.1%)
Advance Holding Corp
Sr. Discount
Debentures, Series B
12.875% 04/15/09+ 500 306,250
County Seat Stores, Inc.
144A Units
12.750% 11/01/04 500 255,000
Finlay Enterprises, Inc.
Sr. Secured
Debentures
9.000% 05/01/08 250 231,875
HMV Media Group plc,
Sr. Sub. Notes
10.250% 05/15/08 500 508,750
Jackson Products, Inc. Co.
Gtd. Notes
9.500% 04/15/05 500 498,750
See Accompanying Notes to Financial Statements.
50
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Retail Trade (cont'd)
Jitney-Jungle Stores of America, Inc.
Gtd. Sr. Notes
12.000% 03/01/06 $ 250 $ 277,500
K Mart Corp. Debentures
7.750% 10/01/12 600 596,250
Pantry, Inc.
Sr. Sub. Notes
10.250% 10/15/07 250 260,938
Pathmark Stores,
Sr. Sub Notes
9.625% 05/01/03 500 504,375
Pueblo Xtra International, Inc.
Sr. Notes
9.500% 08/01/03 400 382,500
Randall's Food Markets, Inc.
Sr. Sub. Notes, Series B
9.375% 07/01/07 600 649,500
------------
4,471,688
------------
Telecommunications (18.8%)
Bresnan Communications Co.
144A Sr. Discount Notes
9.250% 02/01/09+ 1,000 662,500
144A Sr. Notes
8.000% 02/01/09 250 253,125
Carrier1
144A Units
13.250% 02/15/09 500 500,000
Classic Communications Units
13.250% 08/01/09+ 1,000 660,000
Clearnet Communications, Inc.
Sr. Discount Notes
14.750% 12/15/05+ 1,000 891,250
Completel Europe NV Unit
14.000% 02/15/09+ 1,000 508,540
Dobson Sygnet Communications
Sr. Notes
12.250% 12/15/08 500 538,125
DTI Holdings, Inc.
144A Sr. Discount Notes
12.500% 03/01/08+ 600 148,500
E Spire Communications
Sr. Discount Notes
13.000% 11/01/05+ 700 527,625
See Accompanying Notes to Financial Statements.
51
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Telecommunications (cont'd)
Focal Communications Corp.,
144A Sr. Discount Notes
12.125% 02/15/08 $ 550 $ 275,000
Global Crossing Holdings, Ltd.
9.625% 05/15/08 150 157,500
Globalstar L.P./Globalstar Capital
Corp. 144A Sr. Notes
10.750% 11/01/04 100 64,250
Globix Corp. Sr Regulated Notes
13.000% 05/01/05 600 557,250
GST Equipment Funding
144A Sr. Secured Exchange Notes
13.250% 05/01/07 250 252,500
GST USA, Inc.
Gtd. Sr. Discount Exchange Notes
13.875% 12/15/05+ 500 356,875
Hyperion Telecommunications, Inc.
Sr. Discount Notes, Series B
13.000% 04/15/03+ 500 390,000
Hyperion Telecommunications, Inc.
Sr. Notes, Series B
12.250% 09/01/04 250 267,500
ICG Services, Inc.
144A Sr. Discount Notes
10.000% 02/15/08+ 500 268,750
Intelcom Group (U.S.A.), Inc.
Gtd. Sr. Exchangeable
Discount Notes
12.500% 05/01/06 800 609,000
Intermedia Communications, Inc.
Sr. Discount Notes
11.250% 07/15/07+ 1,000 696,250
International Cabletel, Inc.
Sr. Notes
11.500% 02/01/06+ 415 357,938
Iridium L.L.C. Capital Corp.
144A Sr. Notes
11.250% 07/15/05 350 266,875
ITC DeltaCom, Inc.
Sr. Notes
11.000% 06/01/07 163 178,485
IXC Communications, Inc.
Sr. Sub. Notes
9.000% 04/15/08 600 636,000
See Accompanying Notes to Financial Statements.
52
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Telecommunications (cont'd)
Jordan Telecommunications Products, Inc.
Sr. Discount Notes, Series B
11.750% 08/01/07+ $ 400 $ 324,000
Sr. Notes
9.875% 08/01/07 250 251,563
KMC Telecom Holdings, Inc.
Sr. Discount Notes
12.500% 02/15/08+ 500 267,500
Level 3 Communications, Inc.
Gtd. Sr. Sub. Notes
8.500% 05/15/08 250 260,938
8.000% 08/01/08 250 255,625
Sr. Discount Notes
10.500% 12/01/08+ 1,000 575,000
Logix Communications Enterprises
Sr. Notes
12.250% 06/15/08 400 365,000
McCaw International Ltd.
144A Units
13.000% 04/15/07+ 500 275,000
McleodUSA, Inc.
144A Sr. Notes
8.125% 02/15/09 500 496,250
Sr. Notes
9.250% 07/15/07 300 318,000
Sr. Discount Notes
10.500% 03/01/07+ 600 471,000
MDC Communications Corp.
Sr. Sub. Notes
10.500% 12/01/06 500 505,000
MetroNet Communications Corp.
Sr. Discount Notes
10.750% 11/01/07+ 400 288,000
Sr. Notes
12.000% 08/15/07 400 452,000
MJD Communications, Inc.
Sr. Sub. Notes
9.500% 05/01/08 250 253,438
Nextel Partners, Inc.
144A Sr. Discount Notes
14.000% 02/01/09+ 1,000 520,000
See Accompanying Notes to Financial Statements.
53
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Telecommunications (cont'd)
NEXTLINK Communications, Inc.
144A Sr. Notes
10.750% 11/15/08 $ 250 $ 259,375
Sr. Discount Notes
9.450% 04/15/08+ 500 296,250
NEXTLINK Communications,
L.L.C./NEXTLINK Capital, Inc.
Sr. Notes
12.500% 04/15/06 250 273,125
NTL, Inc.
144A Sr. Notes
10.000% 02/15/07 250 266,875
Optel, Inc.
Sr. Notes
11.500% 07/01/08 350 342,125
Orbital Imaging Corp.,
144A Units
11.625% 03/01/05 500 501,875
Orion Network Systems, Inc.
Gtd. Sr. Notes
11.250% 01/15/07 300 291,000
Pac-West Telecomm, Inc.
144A Sr. Notes
13.500% 02/01/09 250 250,625
Pagemart Nationwide, Inc.
Sr. Discount Notes
15.000% 02/01/05+ 750 636,563
Pegasus Communications, Inc.
Sr. Notes
9.750% 12/01/06 500 523,750
PLD Telekom, Inc.
144A Sub. Notes
9.000% 06/01/06 230 117,300
PLD Telekom, Inc.
Yankee Co. Gtd. Notes
14.000% 06/01/04 1,010 606,000
Price Comm Wireless, Inc.
144A Sr. Sub. Notes
11.750% 07/15/07 250 277,500
Price Communications Cellular
Holdings Sr. PIK Notes
11.250% 08/15/08 250 238,125
See Accompanying Notes to Financial Statements.
54
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Telecommunications (cont'd)
Primus Telecommunications Group, Inc.
144A Sr. Notes
11.250% 01/15/09 $ 800 $ 810,000
PSINET, Inc.
144A Sr. Notes
11.500% 11/01/08 500 560,000
Qwest Communications International, Inc.
Sr. Discount Notes
9.470% 10/15/07+ 750 599,063
Sr. Notes, Series B
10.875% 04/01/07 130 150,963
RCN Corp.
Sr. Notes, Series B
10.000% 10/15/07 400 385,000
Sr. Discount Notes, Series B
11.125% 10/15/07+ 250 146,875
9.800% 02/15/08+ 300 162,000
Rhythms Netconnections
Sr. Discount Notes
13.500% 05/15/08+ 850 425,000
Rsl Communications plc
10.500% 11/15/08 400 411,000
Salem Communications Corp.
144A Co. Gtd., Series B
9.500% 10/01/07 250 266,875
Startec Global Communications, Inc.
Sr. Notes
12.000% 05/15/08 400 350,000
Supercanal Holdings S.A.,
144A Bonds
11.500% 05/15/05 250 118,125
Telewest Communications plc
Debentures
9.625% 10/01/06 250 267,500
Teligent Inc.
Sr. Notes
11.500% 12/01/07 250 237,500
Time Warner Telecom L.L.C.
and Time Warner Telecom Inc.,
Sr. Notes
9.750% 07/15/08 500 540,000
Viatel, Inc.
Sr. Disc. Notes
12.500% 04/15/08+ 600 363,000
See Accompanying Notes to Financial Statements.
55
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Telecommunications (cont'd)
WinStar Communications, Inc.
Sr. Discount Notes
14.000% 10/15/05+ $ 500 $ 366,250
------------
26,941,791
------------
Textiles & Apparel (1.0%)
Maxim Group, Inc.
Gtd. Sr. Sub. Notes, Series B
9.250% 10/15/07 500 498,750
Phillips Van-Heusen Corp.
Sr. Sub. Notes
9.500% 05/01/08 500 504,375
William Carter Company
Sr. Sub. Notes, Series A
10.375% 12/01/06 450 484,875
------------
1,488,000
------------
Transportation (1.7%)
AirTran Airlines, Inc.
Secured Notes
10.500% 04/15/01 250 212,500
Atlantic Express Transportation Corp.
Gtd. Sr. Secured Notes
10.750% 02/01/04 250 256,875
Canadian Airlines Corp.
Yankee Sr. Notes
12.250% 08/01/06 250 152,500
Hermes Europe Railtel
144A Sr. Notes
10.375% 01/15/09 500 528,750
Hermes Europe Railtel BV
Sr. Notes
11.500% 08/15/07 250 271,250
Kitty Hawk, Inc.
Sr. Notes
9.950% 11/15/04 250 250,313
Pegasus Shipping (Hellas) Ltd.
144A Gtd. First Preferred
Mortgage Notes, Series A
11.875% 11/15/04 500 411,875
Trans World Airlines
Sr. Notes
11.375% 03/01/06 500 299,375
------------
2,383,438
------------
See Accompanying Notes to Financial Statements.
56
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
CORPORATE BONDS (cont'd)
Waste Management (0.8%)
Allied Waste North America,
144A Gtd. Sr. Notes
7.875% 01/01/09 $ 700 $ 708,750
Waste Systems International, Inc.
144A Conv. Sub. Notes
7.000% 05/13/05 500 467,500
------------
1,176,250
------------
TOTAL CORPORATE BONDS (Cost $139,356,294)
$135,766,287
------------
ASSET BACKED SECURITY (0.4%)
Airplanes Pass Through Trust
Series 1, Class D
10.875% 03/15/19 $ 600 $ 607,503
(Cost $600,000) ------------
Number
of
Shares
-------
RIGHTS & WARRANTS (1.1%)
Broadcasting (0.0%)
Australis Holdings Pty. Ltd. 294 $ 3
------------
Cable (0.4%)
DIVA Systems Corp. 7,581 76
DIVA Systems Corp. 2,250 495,000
------------
495,076
------------
Chemicals (0.2%)
Uniroyal Technology Corp. 43,500 280,031
------------
Computers, Software & Services (0.1%)
Verio, Inc. 2,800 61,600
------------
Construction & Building Materials (0.0%)
Capital Pacific Holdings Group, Inc. 12,640 6,952
------------
Consumer Products & Services (0.0%)
Coinstar Inc. 3,671 57,818
Signature Brands USA, Inc. 250 --
------------
57,818
------------
Industrial Goods & Materials (0.0%)
Golden Ocean Group, Ltd. 438 876
------------
See Accompanying Notes to Financial Statements.
57
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Number
of
Shares Value
------- ------
RIGHTS & WARRANTS (cont'd)
Publishing & Information Services (0.0%)
InterAct Systems, Inc. 700
Mentus Media Corp. 144A 1,391 $ 14
Source Media Inc. 5,587 49,589
------------
49,603
------------
Telecommunications (0.4%)
Advanced Radio Telecommunications Corp. 7,500 48,000
Ampex Corp. 144A 17,000 51,000
Bell Technology 144A 600 12,658
DTI Holdings, Inc. 144A 3,000 150
E Spire Communications Inc. 144A 1,500 165,000
Globalstar, L.P. 200 10,900
KMC Telecom Holdings, Inc. 500 7,500
McCaw International Ltd. 500 1,250
MetroNet Communications Corp. 400 1,400
Microcell Telecommunications, Inc. 1,600 17,600
Orbital Imaging Corp. 500 20,000
Orion Network Systems, Inc. 300 3,300
PLD Telekom, Inc. 1,010 10
Price Communications Corp. 2,752 159,616
Rhythms Netconnections 3,000 60,000
Startec Global Communications 400 400
------------
558,784
------------
TOTAL RIGHTS & WARRANTS (Cost $542,432) $ 1,510,743
------------
COMMON STOCKS (0.0%)
Packaging/Containers (0.0%)
Crown Packaging Enterprises, Ltd. 100,847 $ 1,008
------------
Telecommunications (0.0%)
Intermedia Communications, Inc. 1,671 30,287
------------
TOTAL COMMON STOCKS (Cost $34,471) $ 31,295
------------
PREFERRED STOCKS (2.2%)
Aerospace/Defense (0.6%)
GPA Group plc Convertible
Cumulative Second
Preference Shares 1,750,000 $ 910,000
------------
Cable (0.1%)
DIVA Systems Corporation,
Series C 5,945 67,773
------------
See Accompanying Notes to Financial Statements.
58
<PAGE>
Warburg Pincus High Yield Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Number
of
Shares Value
------- ------
PREFERRED STOCKS (cont'd)
Cellular/Wireless Communications (0.2%)
Rural Cellular Corp.
144A PIK 2,710 $ 266,258
------------
Publishing & Information Services (0.2%)
Source Media Inc.
144A PIK 11,807 230,237
------------
Restaurants, Hotels & Gaming (0.1%)
AmeriKing, Inc.
13.00% Cum. Exchangeable 6,250 160,938
------------
Telecommunications (1.0%)
E Spire Communications Inc.
Jr. PIK 934 354,920
Hyperion Telecommunications, Inc.
12.875% Sr. Exch.
Redeemable, Series B 7 5,180
Intermedia Communications Inc.
144A 7.00% Jr. Convertible,
Series E 20,000 397,500
Nextel Communications, Inc.
13.00% Exchangeable,
Series D PIK 299 299,425
NEXTLINK Communications, Inc.
144A 14% Sr. Exchangeable
PIK 7,901 414,803
------------
1,471,828
------------
TOTAL PREFERRED STOCKS ($3,251,687) $ 3,107,034
------------
TOTAL INVESTMENTS (98.4%) (Cost $143,784,884*) $141,022,862
OTHER ASSETS IN EXCESS OF LIABILITIES (1.6%) 2,291,974
------------
TOTAL NET ASSETS (100.0%) $143,314,836
============
* Also cost for Federal income tax purposes at February 28, 1999. The gross
appreciation (depreciation) on a tax basis is as follows:
Gross Appreciation $ 6,232,110
Gross Depreciation (8,994,132)
------------
Net Depreciation $ (2,762,022)
============
+ Step Bond -- The interest rate as of February 28, 1999 is 0% and will reset
to interest rate shown at a future date.
INVESTMENT ABBREVIATIONS
PIK = Pay In Kind
See Accompanying Notes to Financial Statements.
59
<PAGE>
Warburg Pincus Municipal Bond Fund
Schedule of Investments
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
MUNICIPAL BONDS -- 76.6%
California (11.6%)
California State GO
6.300% 09/11/11 $ 670 $ 793,112
5.125% 10/01/17 825 836,344
Los Angeles CA, Department of
Water & Power Water RB
4.500% 05/15/23 705 650,362
San Diego CA Convention Center
Expansion Financing Authority,
Series A
4.750% 04/01/28 535 512,262
------------
2,792,080
------------
Colorado (2.8%)
Colorado Springs CO, Utility RB
5.875% 11/15/17 595 667,144
------------
Florida (5.9%)
Jacksonville FL, Electric Authority
RB, 2nd Installment
6.000% 07/01/12 610 677,862
Tallahassee FL, Electric RB, First Lien
6.100% 10/01/06 670 727,787
------------
1,405,649
------------
Illinois (5.8%)
Chicago Illinois GO, Series 1993
5.250% 01/01/18 705 707,644
Illinois State Sales Tax RB, Series Q
5.750% 06/15/14 650 684,125
------------
1,391,769
------------
Indiana (0.1%)
Indianapolis IN, Public
Improvement Board RB
6.000% 01/10/03 25 27,125
------------
Louisiana (3.1%)
New Orleans LA, Home Mortgage
Authority SOB
6.250% 01/15/11 635 731,837
------------
Maryland (4.2%)
Maryland State Transportation
Authority Project RB
6.800% 07/01/16 850 1,014,687
------------
See Accompanying Notes to Financial Statements.
60
<PAGE>
Warburg Pincus Municipal Bond Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
MUNICIPAL BONDS (cont'd)
Massachusetts (2.8%)
Massachusetts State Water
Resources Authority, General RB,
Series 92A
6.500% 07/15/19 $ 20 $ 23,550
Massachusetts State Water Resources
Authority RB, Series B
5.000% 12/01/25 660 642,675
------------
666,225
------------
New York (26.2%)
Metropolitan Transit Authority
Commuter Facilities RB, Series A
5.000% 07/01/23 600 593,250
New York, NY Municipal Water
Finance Authority Water &
Sewer System RB, Series D
4.875% 06/15/21 400 390,000
New York State Dormitory Authority
RB (Elizabeth Church Manor
Nursing Home)
5.400% 08/01/23 60 61,125
New York State Dormitory
Authority RB (Episcopal
Health Services)
7.550% 08/01/29 435 455,645
New York State Dormitory Authority
RB (Judicial Facilities Lease)
7.375% 07/01/16 40 50,000
New York State Dormitory
Authority RB (Park Ridge
Housing Inc. Project)
7.850% 02/01/29 530 547,776
New York State Local Government
Assistance Corp. RB, Series B
4.875% 04/01/20 580 566,950
New York State Power Authority
General Purpose RB, Series R
7.000% 01/01/10 360 432,000
New York State Throughway
Authority General RB, Series B
5.000% 01/01/20 30 29,775
New York, NY Prerefunded GO,
Series D
8.000% 08/01/01 605 676,844
6.000% 02/15/05 10 11,162
See Accompanying Notes to Financial Statements.
61
<PAGE>
Warburg Pincus Municipal Bond Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
MUNICIPAL BONDS (cont'd)
New York (cont'd)
New York, NY Unrefunded Balance
GO, Series D
8.000% 08/01/03 $ 45 $ 49,894
6.000% 02/15/25 5 5,362
New York, NY Prerefunded GO,
Series H
7.200% 02/01/02 530 588,962
New York, NY Unrefunded
Balance GO, Series H
7.200% 02/01/13 70 76,650
New York, NY Municipal Water
Finance Authority Water &
Sewer System RB, Series B
5.125% 06/15/30 295 295,369
New York, NY Transitional Finance
Authority RB (Future Tax Secured),
Series B
4.750% 11/15/14 35 34,781
Suffolk County NY Water Authority,
Waterworks RB, Series V
6.750% 06/01/12 580 676,425
Triborough Bridge and Tunnel
Authority, NY General Purpose
RB, Series A
5.200% 01/01/20 730 736,387
----------
6,278,357
----------
Puerto Rico (3.9%)
Commonwealth of Puerto Rico GO
5.400% 07/01/07 730 790,225
Puerto Rico Electric Power
Authority RB, Series N
7.125% 07/01/14 135 138,842
----------
929,067
----------
South Dakota (0.1%)
Heartland Consumers Power District,
SD Electric RB
6.375% 01/01/16 25 28,312
----------
Tennessee (0.1%)
Metropolitan Government of
Nashville and Davidson County,
TN Water and Sewer RB Series A
4.750% 01/01/22 30 28,538
----------
See Accompanying Notes to Financial Statements.
62
<PAGE>
Warburg Pincus Municipal Bond Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ------
MUNICIPAL BONDS (cont'd)
Virgin Islands (3.0%)
Virgin Islands Public Finance
Authority RB
7.700% 10/01/99 $ 690 $ 722,803
-----------
Virginia (3.3%)
Fairfax County, VA Redevelopment
& Housing Authority (Island Walk
Proj.), Mortgage RB
7.100% 04/01/19 630 789,075
-----------
Washington (3.7%)
King County, WA GO, Series A
6.200% 01/01/24 40 44,750
Seattle, WA Municipal Light &
Power RB
5.125% 07/01/22 100 100,375
Seattle, WA Water System RB
5.250% 12/01/23 735 735,919
-----------
881,044
-----------
TOTAL MUNICIPAL BONDS ($16,989,386) $18,353,712
-----------
CORPORATE BONDS (9.2%)
Banking (1.4%)
Bangko Sentral Pilipinas,
Yankee Bonds
8.600% 06/15/27 $ 75 $ 64,875
Export-Import Bank of Korea,
Global Bonds
6.500% 02/10/02 25 23,969
Export-Import Bank of Korea,
Yankee Notes
6.500% 05/15/00 50 49,063
First Republic Bank Corp.
Sub. Notes
7.750% 09/15/12 25 23,844
Fuji JGB Investment LLC,
Noncumulative Preferred
Securities, Series A
9.870% 06/30/99 145 113,274
Fuji Finance (Cayman) Ltd.
Perpetual Sub. Notes
5.801%+++ 100 57,000
-----------
332,025
-----------
See Accompanying Notes to Financial Statements.
63
<PAGE>
Warburg Pincus Municipal Bond Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
-------- --------
CORPORATE BONDS (cont'd)
Broadcasting (0.5%)
Fox/Liberty Networks L.L.C.,
Registered Sr. Discount Notes
8.875% 08/15/07 $ 105 $109,594
--------
Cable (0.6%)
CSC Holdings Inc., Sr. Notes
7.875% 12/15/07 80 84,600
7.250% 07/15/08 20 20,350
Diamond Cable Communications plc,
Yankee Sr. Discount Notes
10.750% 02/15/07 50 38,500
--------
143,450
--------
Energy (0.6%)
YPF S.A., Yankee Sr. Notes
7.250% 03/15/03 75 71,344
YPF S.A., Yankee Notes
8.000% 02/15/04 75 72,563
--------
143,907
--------
Financial Services (0.2%)
Bay View Capital Corp.,
Sub. Notes
9.125% 08/15/07 55 53,281
--------
Food & Beverage (0.1%)
Arisco Productos Alimenticios
S.A., Gtd. Notes
10.750% 05/22/05 20 11,600
--------
Health Care (0.3%)
Columbia/HCA Healthcare Corp.,
Debentures
8.360% 04/15/24 85 78,583
--------
Paper and Forest Products (0.0%)
P.T. Indah Kiat Pulp & Paper Corp.,
Sr. Secured Notes
8.875% 11/01/00 15 10,781
--------
Retail (0.4%)
K Mart Corp. Notes
7.950% 02/01/23 25 24,813
K Mart Corp., Pass-Through
Certificates, Series 1995 Class K3
8.540% 01/02/15 78 75,597
--------
100,410
--------
See Accompanying Notes to Financial Statements.
64
<PAGE>
Warburg Pincus Municipal Bond Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
-------- --------
CORPORATE BONDS (cont'd)
Telecommunications (1.4%)
Cencall Communications Corp.,
Sr. Discount Notes
10.125% 01/15/04 $ 25 $ 25,375
CS Wireless Systems, Inc.,
Sr. Discount Notes, Series B
11.375% 03/01/06 30 6,000
Global Communicacoes e
Participacoes S.A., Sr. Notes
10.625% 12/05/08 30 16,650
Nextel Communications, Inc.,
Sr. Discount Notes
9.950% 02/15/08 5 3,200
Nextel Communications, Inc.,
Sr. Serial Redeemable
Discount Notes
10.650% 09/15/07 90 61,200
Nextel Communications, Inc.,
Sr. Discount Notes
9.750% 08/15/04 145 147,538
Paging Network, Inc.,
Sr. Sub. Notes
8.875% 02/01/06 10 8,500
10.125% 08/01/07 35 30,450
10.000% 10/15/08 35 30,450
Wireless One, Inc.,
Sr. Discount Notes
13.500% 08/01/06 35 3,150
--------
332,513
--------
Transportation (1.7%)
Continental Airlines, Inc.,
Sr. Notes
9.500% 12/15/01 90 94,613
Grupo Transportacion Ferroviaria
Mexicana, S. A. de CV, Gtd
Sr. Discount Notes
11.750% 06/15/09 80 42,800
Northwest Airlines, Inc., Gtd. Notes
7.625% 03/15/05 200 184,000
US Airways, Inc., Gtd. Sr. Notes
9.625% 02/01/01 95 97,369
--------
418,782
--------
See Accompanying Notes to Financial Statements.
65
<PAGE>
Warburg Pincus Municipal Bond Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
--------- ----------
CORPORATE BONDS (cont'd)
Utilities (2.0%)
Beaver Valley Funding Corp.
Secured Lease Obligation Bonds
9.000% 06/01/17 $ 140 $ 152,250
Connecticut Light and Power Co.
First and Ref. Mortgage Bonds,
Series C
7.750% 06/01/02 85 87,444
Series D
7.875% 10/01/24 10 10,388
Korea Electric Power,
Yankee Notes
7.000% 10/01/02 35 33,644
Korea Electric Power,
Yankee Debentures
7.000% 02/01/27 115 106,519
North Atlantic Energy Corp.,
Secured First Mortgage Notes,
Series A
9.050% 06/01/02 93 93,814
----------
484,059
----------
TOTAL CORPORATE BONDS ($2,300,202) $2,218,985
----------
FOREIGN BONDS (3.7%)
Republic of Argentina,
Sr. Notes
12.163% 04/10/05 $ 130 $ 115,700
Republic of Colombia,
Yankee Notes
10.986% 05/13/99 140 126,000
Republic of Phillippines,
Global Bonds
9.875% 01/15/19 60 59,625
Republic of Poland, Past Due
Interest Bonds
5.000% 10/27/14 510 463,781
Republic of Venezuela,
Global Bonds
9.250% 09/15/27 105 59,850
United Mexican States,
Global Bonds
11.500% 05/15/26 50 52,250
----------
TOTAL FOREIGN BONDS ($877,998) $ 877,206
----------
See Accompanying Notes to Financial Statements
66
<PAGE>
Warburg Pincus Municipal Bond Fund
Schedule of Investments (cont'd)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Number
of
Shares Value
-------- ----------
PREFERRED STOCKS (5.2%)
California Federal
Capital Corp., Series A 5,450 $ 144,084
Blackrock Insured Municipal,
Series M7 20 500,000
Nuveen Insured Municipal
Opportunity, Series W Pfd. 8 200,000
Nuveen Insured Premium
Income 2, Series W Pfd. 8 200,000
Nuveen Maryland Premium
Income 2, Series W Pfd. 8 200,000
----------
TOTAL PREFERRED STOCKS (Cost $1,238,975)
$1,244,084
----------
Par
(000)
------
SHORT-TERM INVESTMENT (4.3%)
BBH Grand Cayman U.S.
Dollar Time Deposit
4.250% 03/01/99
(Cost $1,024,000) $1,024 $ 1,024,000
------------
TOTAL INVESTMENTS (99.0%) (Cost $22,430,561*) $ 23,717,987
OTHER ASSETS IN EXCESS OF LIABILITIES (1.0%) 249,566
------------
TOTAL NET ASSETS (100.0%) $ 23,967,553
------------
------------
* Cost for Federal income tax purposes at February 28, 1999 is $22,519,438.
The gross appreciation (depreciation) on a tax basis is as follows:
Gross Appreciation $1,397,035
Gross Depreciation (198,486)
-----------
Net Appreciation $1,198,549
-----------
-----------
+++ Securities have no stated maturity date.
The Moody's Investors Service, Inc. and Standard & Poor's Ratings Group
ratings indicated are the most recent rating available at Februrary 28,
1999 and are unaudited.
INVESTMENT ABBREVIATIONS
GO = General Obligations
RB = Revenue Bond
SOB = Special Obligations Bond
See Accompanying Notes to Financial Statements.
67
<PAGE>
Warburg Pincus Strategic Global Fixed Income Fund
Schedule of Investments
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
-------- --------
INTERNATIONAL BONDS (55.0%)
Argentina (1.1%)
Argentina Bocon, Series Pro1
2.687% 04/01/07+ $ 50 $ 35,950
Republic of Argentina
Discount Bond, Series L
6.063% 03/31/23+ 65 46,231
Euro Notes
11.750% 02/12/07 30 24,637
FRB Non-US Tranche
6.188% 03/31/05+ 52 42,491
Global Bonds
9.750% 09/19/27 20 16,125
Par Bonds
5.750% 03/31/23++ 70 46,944
Unsubordinated Series Bgl4
11.000% 10/09/06 20 18,200
Yankee Notes
12.163% 04/10/05+ 65 57,850
YPF S.A. Yankee Notes
8.000% 02/15/04 35 33,862
--------
322,290
--------
Brazil (0.7%)
Cia. Petroleo Ipiranga S.A
Sr. Notes
10.625% 02/25/02 65 50,375
Federal Republic of Brazil
Capitalization Bonds,
Series 20Yr
8.000% 04/15/99+ 101 57,790
EI Bonds, Series EI-L
6.125% 04/15/06+ 34 21,168
Discount, Series ZL
6.125% 04/15/24+ 61 34,007
EI FRB Debenture Euro
Registered, Series RG
6.125% 04/15/06+ 48 30,240
--------
193,580
--------
Bulgaria (0.2%)
Government of Bulgaria Discount
FRN, Series A
5.875% 07/28/24+ 40 28,125
National Republic of Bulgaria FRN
4.166% 07/28/12+ 50 30,125
--------
58,250
--------
See Accompanying Notes to Financial Statements
68
<PAGE>
Warburg Pincus Strategic Global Fixed Income Fund
Schedule of Investments (con't)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----------- ----------
INTERNATIONAL BONDS (cont'd)
Canada (1.2%)
Government of Canada Debenture
5.500% 02/01/00 CND $ 250 $ 166,026
7.000% 12/01/06 250 182,256
----------
348,282
----------
Columbia (0.4%)
Republic of Colombia
Yankee Notes
10.986% 08/13/05+ 110 99,000
Global Bonds
8.625% 04/01/08 10 8,537
----------
107,537
----------
Croatia (0.1%)
Government of Croatia
Series A Pro-Rata Redemption
Bonds
5.813% 07/31/10 20 15,800
Series B Pro-Rata Redemption
Bonds
5.813% 07/31/06+ 27 19,610
----------
35,410
----------
Finland (0.2%)
Okobank Perpetual Medium Term
FRN
5.739% 03/09/99+/+++ 60 57,600
----------
France (3.1%)
Ivory Coast Past Due Interest
Bonds
1.900% 03/29/18+ FRF 370 18,591
L'Auxiliare du Credit Foncier de
France Gtd. Notes
5.281% 09/25/02+ $ 125 121,794
Republic of France
Treasury Bonds
7.500% 04/25/05 EUR 549 727,925
----------
868,310
----------
Germany (23.0%)
Federal Republic of Germany
Eurobonds
6.000% 02/16/06 EUR 2,000 2,475,987
6.000% 07/04/07 3,206 4,005,126
----------
6,481,113
----------
See Accompanying Notes to Financial Statements
69
<PAGE>
Warburg Pincus Strategic Global Fixed Income Fund
Schedule of Investments (con't)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
--------- ---------
INTERNATIONAL BONDS (cont'd)
Japan (0.3%)
Fuji Finance (Cayman) Ltd.
Perpetual Sub. FRN
5.801%+/+++ $ 90 $ 51,300
Fuji Finance (Cayman)
Perpetual Gtd. Medium Term
Notes
7.300%+/+++ 50 28,500
---------
79,800
---------
Mexico (1.2%)
Grupo Transportacion Ferroviaria
Mexicana, S.A. de CV
144A Gtd. Sr. Discount Notes
11.750% 06/15/09++ 55 29,425
Mexican Cetes Zero Coupon
Bonds
0.000% 01/13/00 251 20,402
United Mexican States
Global Bonds
11.500% 05/15/26 80 83,600
Government National Discount
Bond, Series W-A
6.116% 12/31/19+(a) 260 209,625
---------
343,052
---------
Netherlands (4.3%)
Kingdom of Netherlands
Government Bonds
5.750% 01/15/04 EUR 1,021 1,227,797
---------
Panama (0.1%)
Republic of Panama Euro Bonds
8.875% 09/30/27 $ 20 17,900
---------
Peru (0.1%)
Government of Peru Front Loaded
Interest Reduction Bond
3.250% 03/07/17 20 10,737
Peru Past Due Interest FRB
Series 20 Year Bonds
4.000% 03/07/17+ 20 11,862
---------
22,599
---------
See Accompanying Notes to Financial Statements
70
<PAGE>
Warburg Pincus Strategic Global Fixed Income Fund
Schedule of Investments (con't)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
-------- --------
INTERNATIONAL BONDS (cont'd)
Philippines (0.4%)
Bangko Sentral Pilipinas
Yankee Bonds
8.600% 06/15/27 $ 40 $ 34,600
Republic of Philippines
Global Bonds
9.875% 01/15/19 75 74,531
--------
109,131
--------
Poland (1.5%)
Republic of Poland
Non-U.S. Global Past Due
Interest Bonds
5.000% 10/27/14++ 20 18,187
Par Bond
3.000% 10/27/24++ 35 22,794
Past Due Interest Bonds
5.000% 10/27/14++ 415 377,391
--------
418,372
--------
Russia (0.1%)
AO Sibneft
Loan Participation Notes
9.000% 08/15/00+ 50 13,000
Ministry Finance Russia Bonds
12.750% 06/24/28 60 16,800
--------
29,800
--------
South Africa (0.0%)
Republic of South Africa
Senior Notes
12.000% 02/28/05 ZAR 80 11,743
--------
South Korea (0.4%)
Korea Electric Power
Yankee Notes
7.000% 10/01/02 $ 45 43,256
Debentures
6.750% 08/01/27 10 9,400
Unsecured Unsubordinated
Global Notes
6.375% 12/01/03 20 18,550
Debentures
7.000% 02/01/27 55 50,944
--------
122,150
--------
See Accompanying Notes to Financial Statements
71
<PAGE>
Warburg Pincus Strategic Global Fixed Income Fund
Schedule of Investments (con't)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
(000) Value
--------- -----------
<S> <C> <C> <C>
INTERNATIONAL BONDS (cont'd)
Supranational (7.9%)
European Investment Bank
Eurobonds
5.000% 04/15/08 ITL 1,000,000 $ 597,390
International Bank for Reconstruction & Development
Japanese Yen Global Bonds
5.250% 03/20/02 JPY 170,000 1,635,166
-----------
2,232,556
-----------
Sweden (1.2%)
Skandinaviska Enskilda Banken
AB Perpetual Sub. FRN
7.500% 03/12/99+/+++ $ 50 331,215
-----------
Turkey (0.0%)
Republic of Turkey Treasury Bills
0.000% 08/18/99 TRL 5,569,100 10,740
-----------
United Kingdom (7.4%)
U.K. Treasury Gilt Bonds
7.500% 12/07/06 GBP 1,100 2,077,810
-----------
Venezuela (0.1%)
Republic of Venezuela
Global Bonds
9.250% 09/15/27 $ 40 22,800
-----------
TOTAL INTERNATIONAL BONDS (Cost $15,586,109) $15,529,837
-----------
DOMESTIC BONDS (49.8%)
CORPORATE BONDS (16.9%)
Automotive (0.2%)
Delco Remy International, Inc.
Gtd. Sr. Sub Notes
10.625% 08/01/06 $ 15 $ 16,050
Hayes Lemmerz International, Inc.
Sr. Sub Notes
8.250% 12/15/08 25 25,312
-----------
41,362
-----------
Banking (1.5%)
BankBoston N.A. Notes
6.375% 04/15/08 15 14,588
Bay View Capital Corp.
Sub. Notes
9.125% 08/15/07 45 43,594
</TABLE>
See Accompanying Notes to Financial Statements
72
<PAGE>
Warburg Pincus Strategic Global Fixed Income Fund
Schedule of Investments (con't)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
-------- --------
CORPORATE BONDS (cont'd)
Banking (cont'd)
Chase Manhattan Bank Corp.
Sub. Notes
6.750% 09/15/06 $ 20 $ 20,300
7.250% 06/01/07 10 10,475
6.375% 04/01/08 20 19,975
Citicorp Sub. Notes, Series F
6.375% 11/15/08 65 64,431
Credit Lyonnais Perpetual Sub.
Variable Rate Notes, Rule 144A
6.563% 09/19/49+/+++ 90 78,525
First Republic Bank Sub. Notes
7.750% 09/15/12 60 57,225
National Westminster Bank
Debentures Guaranteed Cap
Notes
9.375% 11/15/03 15 16,650
Sovereign Bancorp Sr. Notes
6.750% 07/01/00 115 115,719
--------
441,482
--------
Computer Software (0.1%)
PSINet, Inc. 144A Sr. Notes
11.500% 11/01/08 10 11,200
--------
Electric (1.6%)
Beaver Valley Funding Corp.
Secured Lease Obligation Bonds
9.000% 06/01/17 150 163,125
Connecticut Light and Power Co.
First Mortgage Bonds, Series C
7.750% 06/01/02 75 77,156
First Mortgage Bonds, Series D
7.875% 10/01/24 40 41,550
Crown Central Petroleum Sr. Notes
10.875% 02/01/05 10 9,113
Forcenergy, Inc. Sr. Sub. Notes
8.500% 02/15/07 10 3,675
Niagara Mohawk Power Corp.
First Mortgage Bonds
8.750% 04/01/22 30 31,238
North Atlantic Energy Corp.
Secured First Mortgage Notes,
Series A
9.050% 06/01/02 130 131,138
--------
456,995
--------
See Accompanying Notes to Financial Statements
73
<PAGE>
Warburg Pincus Strategic Global Fixed Income Fund
Schedule of Investments (con't)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
----- ---------
CORPORATE BONDS (cont'd)
Electronics (0.2%)
Seagate Technology, Inc.
Sr. Debentures
7.450% 03/01/37 $ 70 $ 65,275
---------
Energy (0.7%)
CMS Energy Corp.
Medium Term Notes
6.750% 01/15/04 15 14,625
Dresser Industries, Inc.
Debentures
7.600% 08/15/45 60 65,100
Petroleum Geo-Services
Yankee Sr. Notes
7.125% 03/30/28 25 22,344
Valero Energy Corp.
144A Putable Asset Trusts
6.750% 12/15/02 100 100,125
---------
202,194
---------
Entertainment (1.5%)
Circus Circus Enterprise
Sr. Sub. Notes
9.250% 12/01/05 15 15,281
Regal Cinemas, Inc.
Sr. Sub. Notes
9.500% 06/01/08 20 20,000
Time Warner, Inc
Debentures
9.125% 01/15/13 45 55,294
8.050% 01/15/16 140 156,100
6.850% 01/15/26 165 173,456
---------
420,131
---------
Financial Services (2.0%)
American General Institutional Capital Trust Co.
144A Gtd. Notes, Series B
8.125% 03/15/46 40 45,000
AT&T Capital Corp.
Medium Term Notes, Series 4
6.920% 04/29/99 135 135,121
Ford Motor Credit Corp.
5.800% 01/12/09 80 77,400
HRPT Properties Trust Notes
5.658% 04/09/99 310 307,288
---------
564,809
---------
See Accompanying Notes to Financial Statements
74
<PAGE>
Warburg Pincus Strategic Global Fixed Income Fund
Schedule of Investments (con't)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------ ---------
CORPORATE BONDS (cont'd)
Health Care (0.8%)
Columbia/HCA Healthcare Corp.
Debentures
8.360% 04/15/24 $ 55 $ 50,848
Merck & Company, Inc.
Medium Term Notes, Series B
5.760% 05/03/37 185 182,456
---------
233,304
---------
Industrial Goods & Materials (0.1%)
Motors & Gears Inc.,
Sr. Notes, Series D
10.750% 11/15/06 15 15,394
---------
Media Cable (1.0%)
Adelphia Communications Corp.
144A Sr. Notes
8.375% 02/01/08 10 10,425
Sr. Notes, Series B
9.250% 10/01/02 15 15,938
Classic Cable Sr. Sub. Notes
9.875% 08/01/08 10 10,525
CS Wireless Systems, Inc.
144A Sr. Discount Notes
11.375% 03/01/06++ 70 14,000
CSC Holdings, Inc. Sr. Notes
7.875% 12/15/07 90 95,175
7.250% 07/15/08 20 20,350
Diamond Cable Communications plc
144A Yankee Sr. Discount
Notes
10.750% 02/15/07++ 40 30,800
James Cable Partners L.P.
Sr. Notes, Series B
10.750% 08/15/04 20 21,175
TCI Communications Inc. Notes
6.340% 02/01/02 55 55,619
Wireless One, Inc.
Sr. Discount Notes
13.500% 08/01/06++ 45 4,050
---------
278,057
---------
Media Non Cable (0.4%)
Chancellor Media Corp.
144A Sr. Notes
8.000% 11/01/08 10 10,600
See Accompanying Notes to Financial Statements
75
<PAGE>
Warburg Pincus Strategic Global Fixed Income Fund
Schedule of Investments (con't)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
-------- --------
CORPORATE BONDS (cont'd)
Media Non Cable (cont'd)
Echostar DBS Corp.
144A Sr. Notes
9.250% 02/01/06 $ 20 $ 20,200
Fox/Liberty Networks L.L.C.,
Registered Sr. Notes
08/15/07++ 80 83,500
Granite Broadcasting Corp.
Sr. Sub. Notes
8.875% 05/15/08 10 9,925
--------
124,225
--------
Real Estate (0.1%)
HMH Properties, Inc. Sr. Notes
8.450% 12/01/08 15 14,888
--------
Retail (1.3%)
Archibald Candy Corp.
144A Gtd. Sr. Secured Notes
10.250% 07/01/04 20 20,400
Jackson Products, Inc. Notes
9.500% 04/15/05 20 19,950
K Mart Corp.
Medium Term Notes, Series C
7.820% 01/02/02 100 98,625
7.840% 01/02/02 100 98,625
Medium Term Notes, Series D
7.770% 07/02/02 100 98,250
Pantry, Inc. Sr. Sub. Notes
10.250% 10/15/07 15 15,656
Pathmark Stores, Sr. Sub Notes
9.625% 05/01/03 10 10,088
Phillips Van-Heusen Corp.,
Sr. Sub. Notes
9.500% 05/01/08 10 10,088
--------
371,682
--------
Steel (0.1%)
Wheeling-Pittsburgh Corp.
144A Sr. Notes
9.250% 11/15/07 15 14,719
--------
Telecommunications (3.6%)
BellSouth Capital Funding Corp.
Debentures
6.040% 11/15/26 165 167,888
See Accompanying Notes to Financial Statements
76
<PAGE>
Warburg Pincus Strategic Global Fixed Income Fund
Schedule of Investments (con't)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------ ---------
CORPORATE BONDS (cont'd)
Telecommunications (cont'd)
Cencall Communications Corp.
Sr. Discount Notes
10.125% 01/15/04 $ 15 $ 15,225
Global Communicacoes e
Participacoes S.A.
144A Par Bonds
10.625% 12/05/08 20 11,100
GTE Corp., Debentures
6.840% 04/15/18 215 219,031
GTE North, Inc.
Debentures, Series D
6.900% 11/01/08 10 10,588
ITC Deltacom, Inc.
144A Sr. Notes
11.000% 06/01/07 10 10,950
Level 3 Communications, Inc.
144A Sr. Notes
9.125% 05/01/08 25 24,375
MCI Communications Corp.
Sr. Discount Notes
6.125% 04/15/02+ 45 45,113
McleodUSA, Inc. 144A Sr. Notes
8.125% 02/15/09 10 9,925
Metromedia Fiber Network
144A Sr. Notes
10.000% 11/15/08 10 10,500
Nextel Communications, Inc.
144A Sr. Discount Notes
9.950% 02/15/08++ 10 6,400
144A Sr. Redeemable Discount
Notes
10.650% 09/15/07++ 180 122,400
Sr. Discount Notes
9.750% 08/15/04 150 152,625
NEXTLINK Communications, Inc.
144A Sr. Notes
10.750% 11/15/08 15 15,563
Sr. Notes
9.625% 10/01/07 10 9,925
Paging Network, Inc.,
Sr. Sub. Notes
8.875% 02/01/06 10 8,500
10.125% 08/01/07 20 17,400
10.000% 10/15/08 45 39,150
See Accompanying Notes to Financial Statements
77
<PAGE>
Warburg Pincus Strategic Global Fixed Income Fund
Schedule of Investments (con't)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------ ---------
CORPORATE BONDS (cont'd)
Qwest Communications
144A Sr. Notes
7.250% 11/01/08 $ 15 $ 15,563
Worldcom Inc., Sr. Notes
8.875% 01/15/06 65 69,956
6.950% 08/15/28 40 40,950
-----------
1,023,127
-----------
Telephone (0.0%)
Intermedia Communication
Sr. Notes, Series B
8.500% 01/15/08 10 9,400
-----------
Transportation (1.7%)
Continental Airlines, Inc.
Sr. Notes
9.500% 12/15/01 120 126,150
Norfolk Southern Corp. Notes
7.050% 05/01/37 60 63,525
Northwest Airlines, Inc.
Gtd. Notes
7.625% 03/15/05 230 211,600
US Airways, Inc. Gtd. Sr. Notes
9.625% 02/01/01 85 87,120
-----------
488,395
-----------
Waste Management (0.0%)
Allied Waste North America
Sr. Notes
7.875% 01/01/09 10 10,125
-----------
TOTAL CORPORATE BONDS (Cost $4,874,411) $ 4,786,764
-----------
MUNICIPAL BONDS (0.9%)
Florida State Board of Education,
Capital Outlay GO, Series B
4.750% 06/01/23 $ 20 $ 19,175
Illinois State GO
4.750% 06/01/23 15 14,063
Massachusetts State Water
Resources Authority General
Revenue Bond, Series A
4.750% 08/01/27 25 23,438
See Accompanying Notes to Financial Statements
78
<PAGE>
Warburg Pincus Strategic Global Fixed Income Fund
Schedule of Investments (con't)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------- ---------
MUNICIPAL BONDS (cont'd)
Massachussetts Bay
Transportation Authority,
General Transportation
System Revenue Bonds,
Series A
4.750% 03/01/21 $ 35 $ 33,294
New York City Municipal Water
Finance Authority Water and
Sewer Systems Revenue Bonds,
Series D
4.750% 06/15/25 10 9,500
North Texas Thruway Authority,
Dallas North Thruway System
Revenue Bonds
4.750% 01/01/29 125 116,875
Tennessee Valley Authority Bonds
5.880% 04/01/36 40 39,350
-----------
TOTAL MUNICIPAL BONDS (Cost $259,419) $ 255,695
-----------
AGENCY OBLIGATIONS (21.1%)
Federal Home Loan Mortgage Corporation (2.0%)
Various Pools:
7.000% 12/01/09 $ 334 $ 340,569
-----------
Federal National Mortgage Association (16.9%)
Various Pools:
6.500% 01/01/13+++ 255 256,673
6.000% 05/01/13+++ 490 485,253
6.000% 10/15/17+++ 1,760 1,706,100
6.500% 09/01/27+++ 490 486,937
8.000% 06/01/28+++ 1,120 1,165,150
6.000% 10/01/28 373 362,047
6.000% 01/01/29 125 120,862
6.000% 01/01/29 370 358,900
FNMA Series 1997-16 Class M
Principle Only
0.000% 02/25/23 80 55,300
-----------
4,997,222
-----------
Government National Mortgage Association (2.2%)
6.500% 12/01/28+++ 610 606,569
-----------
TOTAL AGENCY OBLIGATIONS (Cost $5,984,456) $ 5,944,360
-----------
See Accompanying Notes to Financial Statements
79
<PAGE>
Warburg Pincus Strategic Global Fixed Income Fund
Schedule of Investments (con't)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------ ---------
ASSET BACKED SECURITIES (1.4%)
Contimortgage Home Equity
Loan Trust,
Series 1996-4, Class A8
7.220% 01/15/28 $ 10 $ 10,053
Series 1998-1, Class A5
6.430% 04/15/16 70 70,262
Green Tree Recreational,
Equipment & Consumer Trust
Series 1998-B, Class A-3
6.050% 10/15/10 15 15,047
Series 1997-C, Class A1
6.490% 02/15/18 168 167,424
New Century Home Equity Loan
Trust Series 1997-NC6,
Class A4
6.730% 07/25/22 20 19,946
Southern Pacific Secured Asset
Corp. Home Equity
Series 1998-1, Class A2
6.270% 03/25/28 80 79,987
UCFC Home Equity Loan Trust,
Series 1996-B1, Class A7
8.200% 09/15/27 25 25,695
-----------
TOTAL ASSET BACKED SECURITIES (Cost $389,934) $ 388,414
-----------
COLLATERALIZED MORTGAGE BACKED SECURITIES (0.4%)
Donaldson Lufkin Jenrette
Commercial Mortgage Corp.,
Series 1998-CG1, Class A1-B
6.410% 05/10/08 $ 85 $ 85,993
GMAC Commercial Mortgage
Securities, Inc., Series 1997-C1
Class A2
6.853% 09/15/06 20 20,912
-----------
TOTAL COLLATERALIZED MORTGAGE BACKED SECURITIES
(Cost $106,467) $ 106,905
-----------
See Accompanying Notes to Financial Statements
80
<PAGE>
Warburg Pincus Strategic Global Fixed Income Fund
Schedule of Investments (con't)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
------ -----------
U.S. TREASURY OBLIGATIONS (9.1%)
U.S. Treasury Bills (0.1%)
4.365% 04/08/99 $ 20 $ 19,908
-----------
U.S. Treasury Bonds (6.3%)
8.000% 11/15/21 1,395 1,771,143
-----------
U.S. Treasury Inflation Protected Notes (0.8%)
3.625% 01/15/08 225 223,715
-----------
U.S. Treasury Notes (1.5%)
6.250% 06/30/02 245 252,383
6.250% 02/15/07 170 179,021
-----------
431,404
-----------
U.S. Treasury Stripped Bonds (0.4%)
0.000% 05/15/17 335 114,179
-----------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $2,613,317) $ 2,560,349
-----------
TOTAL DOMESTIC BONDS (Cost $14,228,004) $14,042,487
-----------
Number
of
Shares
--------
STOCKS, RIGHTS & WARRANTS (0.8%)
California Federal Capital Corp.,
Series A 5,050 $ 133,509
Centaur Funding Corp. 40 44,150
Citigroup, Inc. 1,100 56,100
-----------
TOTAL STOCKS, RIGHTS & WARRANTS (Cost $231,837) $ 233,759
-----------
See Accompanying Notes to Financial Statements
81
<PAGE>
Warburg Pincus Strategic Global Fixed Income Fund
Schedule of Investments (con't)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Par
(000) Value
-------- -----------
Short-Term Investment (13.1%)
BBH U.S. Grand Cayman Time
Deposit
4.250% 03/01/99
(Cost $3,685,000) $ 3,685 $ 3,685,000
-----------
TOTAL INVESTMENTS (118.7%) (Cost $33,730,950*) $33,491,083
LIABILITIES IN EXCESS OF OTHER ASSETS (18.7%) (5,265,739)
-----------
TOTAL NET ASSETS (100.0%) $28,225,344
-----------
-----------
* Cost for Federal income tax purposes at February 28, 1999 is $33,767,671.
The gross appreciation (depreciation) on a tax basis is as follows:
Gross Appreciation $ 482,736
Gross Depreciation (759,324)
---------
Net Depreciation $(276,588)
---------
---------
+ Variable rate obligations -- The interest shown is the rate as of February
28, 1999.
++ Step Bond -- The interest rate as of February 28, 1999 is 0% and will reset
to interest rate shown at a future date.
+++ Securities have no stated maturity date.
(a) With additional 399,000 rights attached, expiring 06/03/2006, with no
market value.
CURRENCY ABBREVIATIONS
CND = Canadian Dollars
EUR = European Economic Unit
FF = French Francs
GBP = United Kingdom Pounds
ITL = Italian Lira
JPY = Japanese Yen
TRL = Turkish Lira
ZAR = South African Rand
INVESTMENT ABBREVIATIONS
FRB = Floating Rate Bond
FRN = FloatingRateNote
GO = General Obligations
See Accompanying Notes to Financial Statements.
82
<PAGE>
Warburg Pincus Fund
Statements of Assets and Liabilities
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Strategic
U.S. Core Fixed High Yield Municipal Global Fixed
Income Fund Fund Bond Fund Income Fund
--------------- ---------- --------- -----------
<S> <C> <C> <C> <C>
Assets
Investments, at value (cost - $519,415,495,
$143,784,884, $22,430,561 and
$33,730,950, respectively) $ 514,535,411 $ 141,022,862 $ 23,717,987 $ 33,491,083
Deposits with brokers and custodian bank for
securities sold short or futures contracts 1,017,923 -- -- --
Receivable for investments sold 17,558,846 2,517,975 -- 1,054,188
Receivable on open futures contracts 23,069 -- -- 719
Dividends and interest receivable 3,478,116 2,788,648 308,882 457,526
Prepaid expenses and other assets 601,633 133,885 412 253,990
------------- ------------- ------------- -------------
Total Assets 537,214,998 146,463,370 24,027,281 35,257,506
------------- ------------- ------------- -------------
Liabilities
Payable for investments purchased 162,615,438 675,000 37,077 5,793,979
Payable for Fund shares repurchased 214,000 276 -- --
Overdraft liability -- 2,269,364 -- 1,052,111
Payable on forward currency contracts -- -- -- 172,276
Advisory fee payable 68,305 134,419 7,919 --
Distrubution fee payable (Common shares) 5 21,304 5 --
Accrued expenses payable 97,007 48,171 14,727 13,796
------------- ------------- ------------- -------------
Total Liabilities 162,994,755 3,148,534 59,728 7,032,162
------------- ------------- ------------- -------------
Net Assets
Capital stock, $0.001 par value 24,274 9,095 1,606 1,849
Paid-in capital 374,640,918 160,955,621 22,543,641 28,563,599
Undistributed net investment income/(loss) 3,164,535 2,071,940 37,988 110,395
Accumulated net realized gain/(loss) from
investments, securities sold short, futures
and foreign currency related
transactions, if any 580,310 (16,959,798) 22,218 (44,438)
Net unrealized appreciation/(depreciation) on
investments and other, if any (4,189,794) (2,762,022) 1,362,100 (406,061)
------------- ------------- ------------- -------------
Net Assets $ 374,220,243 $ 143,314,836 $ 23,967,553 $ 28,225,344
============= ============= ============= =============
Institutional Shares
Net assets $ 374,204,317 $ 111,561,938 $ 23,961,540 $ 28,216,638
------------- ------------- ------------- -------------
Shares outstanding 24,258,730 7,085,929 1,606,026 1,848,975
------------- ------------- ------------- -------------
Net asset value, offering price and redemption
price per share $ 15.43 $ 15.74 $ 14.92 $ 15.26
============= ============= ============= =============
Common Shares
Net assets $ 15,926 $ 31,752,898 $ 6,013 $ 8,706
------------- ------------- ------------- -------------
Shares outstanding 1,033 2,008,991 403 571
------------- ------------- ------------- -------------
Net asset value, offering price and redemption
price per share $ 15.42 $ 15.81 $ 14.92 $ 15.25
============= ============= ============= =============
</TABLE>
See Accompanying Notes to Financial Statements.
83
<PAGE>
Warburg Pincus Fund
Statements of Operations
For the Six Months Ended February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Strategic
U.S. Core Fixed High Yield Municipal Global Fixed
Income Fund Fund Bond Fund Income Fund
--------------- ---------- --------- -----------
<S> <C> <C> <C> <C>
Investment Income
Dividends $ 235,905 $ 115,427 $ 2,716 $ 854
Interest 12,083,338 5,395,919 603,314 831,010
------------ ------------ ------------ ------------
Total Investment Income 12,319,243 5,511,346 606,030 831,864
------------ ------------ ------------ ------------
Expenses
Investment advisory fees 743,539 397,580 80,355 74,467
Administration fees 232,886 95,055 23,471 31,294
Custodian fees 81,258 14,555 15,372 31,675
Audit fees 10,704 4,745 1,168 2,256
Miscellaneous fees 6,742 15,372 6,853 5,951
Printing fees 45,932 26,274 4,878 2,876
Registration fees 14,269 4,378 7,687 --
Legal fees 37,950 6,415 13,465 1,488
Transfer agent fees 32,789 13,944 3,521 6,146
Insurance expense 4,177 1,285 284 390
Directors fees 8,400 6,447 6,447 6,447
Organization expense 1,694 -- (6,127) (4,574)
Distribution fees 5 22,042 5 3
------------ ------------ ------------ ------------
1,220,345 608,092 157,379 158,419
Less fees waived and reimbursed (354,825) (192,180) (43,745) (48,218)
------------ ------------ ------------ ------------
Total Expenses 865,520 415,912 113,634 110,201
------------ ------------ ------------ ------------
Net Investment Income 11,453,723 5,095,434 492,396 721,663
------------ ------------ ------------ ------------
Realized and Unrealized Gain/(Loss)
on Investments and Foreign Currency
Transactions
Net realized gain/(loss) from:
Security transactions 2,326,390 (1,583,289) 115,625 (138,155)
Futures tranactions (507,499) -- -- (90,365)
Foreign exchange transactions (84,284) -- -- 338,665
------------ ------------ ------------ ------------
1,734,607 (1,583,289) 115,625 110,145
------------ ------------ ------------ ------------
Net change in unrealized
appreciation/(depreciation):
Investments (4,396,297) (3,152,312) (91,859) 413,674
Futures 1,076,308 -- -- 60,328
Translation of assets and
liabilities in foreign currencies 55,769 -- -- (1,873)
------------ ------------ ------------ ------------
(3,264,220) (3,152,312) (91,859) 472,129
------------ ------------ ------------ ------------
Net Gain/(Loss) On Investments And
Foreign Currency Transactions (1,529,613) (4,735,601) 23,766 582,274
------------ ------------ ------------ ------------
Net Increase In Net Assets
Resulting From Operations $ 9,924,110 $ 359,833 $ 516,162 $ 1,303,937
============ ============ ============ ============
</TABLE>
See Accompanying Notes to Financial Statements.
84
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
85
<PAGE>
Warburg Pincus Fund
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. Core Fixed Income Fund High Yield Fund
--------------------------------------- -----------------------------------------
For the Six Months For the Year For the Six Months For the Year
Ended Ended Ended Ended
February 28, 1999 August 31, 1998 February 28, 1999 August 31, 1998
------------------ --------------- ----------------- ---------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Increase/(decrease) in net assets:
Operations:
Net investment income $ 11,453,723 $ 13,581,467 $ 5,095,434 $ 8,042,385
Net gain/(loss) on investments
and foreign currency
transactions (1,529,613) 1,267,128 (4,735,601) (3,054,518)
------------- ------------- -------------
Net increase in net assets resulting
from operations 9,924,110 14,848,595 359,833 4,987,867
------------- ------------- ------------- -------------
Dividends and Distributions to
shareholders:
Dividends to shareholders from
net investment income:
Institutional shares (12,608,321) (11,454,482) (4,311,038) (7,732,581)
Common shares (18) -- (607,982) (169,975)
Distributions to shareholders
from net realized capital gains:
Institutional shares (4,420,509) (2,782,277) -- --
Common shares (11) -- -- --
------------- ------------- ------------- -------------
Total distributions to shareholders (17,028,859) (14,236,759) (4,919,020) (7,902,556)
------------- ------------- ------------- -------------
Net capital share transactions (12,208,120) 215,702,694 53,260,311 4,811,859
------------- ------------- ------------- -------------
Total increase/(decrease)
in net assets 19,312,869 216,314,530 48,701,124 1,896,900
Net Assets:
Beginning of period 393,533,112 177,218,582 94,613,712 92,716,812
------------- ------------- ------------- -------------
End of period $ 374,220,243 $ 393,533,112 $ 143,314,836 $ 94,613,712
============= ============= ============= =============
</TABLE>
86
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Municipal Bond Fund Strategic Global Fixed Income Fund
--------------------------------------- -----------------------------------------
For the Six Months For the Year For the Six Months For the Year
Ended Ended Ended Ended
February 28, 1999 August 31, 1998 February 28, 1999 August 31, 1998
------------------ --------------- ----------------- ---------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Increase/(decrease) in net assets:
Operations:
Net investment income $ 492,396 $ 979,325 $ 721,663 $ 1,809,232
Net gain/(loss) on investments
and foreign currency
transactions 23,766 541,320 582,274 (247,851)
------------ ------------ ------------ ------------
Net increase in net assets resulting
from operations 516,162 1,520,645 1,303,937 1,561,381
------------ ------------ ------------ ------------
Dividends and Distributions to
shareholders:
Dividends to shareholders from
net investment income:
Institutional shares (502,165) (976,336) (463,245) (1,133,693)
Common shares (87) -- (15) --
Distributions to shareholders
from net realized capital gains:
Institutional shares (320,024) (154,615) (530,896) (1,162,260)
Common shares (14) -- (18) --
------------ ------------ ------------ ------------
Total distributions to shareholders (822,290) (1,130,951) (994,174) (2,295,953)
------------ ------------ ------------ ------------
Net capital share transactions 2,045,049 2,028,820 (567,803) (15,067,445)
------------ ------------ ------------ ------------
Total increase/(decrease)
in net assets 1,738,921 2,418,514 (258,040) (15,802,017)
Net Assets:
Beginning of period 22,228,632 19,810,118 28,483,384 44,285,401
------------ ------------ ------------ ------------
End of period $ 23,967,553 $ 22,228,632 $ 28,225,344 $ 28,483,384
============ ============ ============ ============
</TABLE>
See Accompanying Notes to Financial Statements.
87
<PAGE>
Warburg Pincus Funds
U.S. Core Fixed Income Fund Financial Highlights
(For a Share Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Institutional
------------------------------------------------------------------------------------------
For the
For the Six Period
Months Ended April 1,
February 28, For the Year Ended August 31, 1994*
1999 ---------------------------------------------------------- to August 31,
(Unaudited) 1998 1997 1996 1995 1994
------------ -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 15.72 $ 15.65 $ 15.06 $ 15.42 $ 14.77 $ 15.00
------------ -------- -------- -------- ------- -------
Income from investment
operations
Net investment income (loss) 0.46 0.84 0.92 0.95 0.88 0.42
Net gain (loss) on investments
and foreign currency
transactions (both realized
and unrealized) (0.08) 0.33 0.76 (0.16) 0.61 (0.40)
------------ -------- -------- -------- ------- -------
Total from investment
operations 0.38 1.17 1.68 0.79 1.49 0.02
------------ -------- -------- -------- ------- -------
Less Distributions
Dividends from net investment
income (0.50) (0.87) (0.97) (0.93) (0.25) (0.28)
Distributions from capital gains (0.17) (0.23) (0.12) (0.22) -- --
------------ -------- -------- -------- ------- -------
Total distributions (0.67) (1.10) (1.09) (1.15) (0.84) (0.25)
------------ -------- -------- -------- ------- -------
Net asset value, end of period $ 15.43 $ 15.72 $ 15.65 $ 15.06 $ 15.42 $ 14.77
============ ======== ======== ======== ======= =======
Total return 2.43%(c) 7.70% 11.53% 5.23% 10.60% 0.17%(c)
Ratios/Supplemental Data:
Net assets, end of period
(000s omitted) $374,204 $393,533 $177,219 $118,596 $99,250 $30,016
Ratio of expenses to
average net assets 0.44%(a)(b) 0.47%(a) 0.50%(a) 0.50%(a) 0.50%(a) 0.50%(a)(b)
Ratio of net investment
income (loss)
to average net assets 5.77%(b) 5.87% 5.31% 6.43% 6.47% 6.04%(b)
Fund turnover rate 276%(c) 372% 372% 201% 304% 186%(c)
<CAPTION>
Common
-----------
For the
Period
November 2,
1998* to
February 28,
1999
(Unaudited)
----------
<S> <C>
Net asset value, beginning of period $ 15.68
----------
Income from investment
operations
Net investment income (loss) 0.36
Net gain (loss) on investments
and foreign currency
transactions (both realized
and unrealized) (0.17)
----------
Total from investment
operations 0.19
----------
Less Distributions
Dividends from net investment
income (0.28)
Distributions from capital gains (0.17)
Total distributions (0.45)
Net asset value, end of period $15.42
==========
Total return 1.21%(c)
Ratios/Supplemental Data:
Net assets, end of period
(000s omitted) $16
Ratio of expenses to
average net assets 0.70%(a)(b)
Ratio of net investment
income (loss)
to average net assets 5.37%(b)
Fund turnover rate 276%(c)
</TABLE>
- --------------------------------------------------------------------------------
(a) 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 .62% annualized for the six months ended February 28, 1999 and
.74%, .78%, .78% and .84% for the years ended August 31, 1998, 1997, 1996
and 1995, respectively, and .99% annualized for the period ended August 31,
1994. 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 .90% annualized for the period ended February 28, 1999.
(b) Annualized.
(c) Not Annualized.
* Commencement of operations.
See Accompanying Notes to Financial Statements.
88
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
89
<PAGE>
<TABLE>
<CAPTION>
Warburg Pincus Funds
High Yield Fund Financial Highlights
(For a Share Outstanding Throughout each Period)
- -------------------------------------------------------------------------------------------------------------------------------
Institutional
----------------------------------------------------------------------------------------------------
For the Six
Months Ended For the Year Ended August 31,
February 28, 1999 -----------------------------------------------------------------------------
(Unaudited) 1998 1997 1996 1995 1994
----------------- ----------- ----------- ----------- ------------ ------------
Net asset value,
<S> <C> <C> <C> <C> <C> <C>
beginning of period $ 16.60 $ 17.08 $ 16.09 $ 15.72 $ 15.94 $ 16.94
------------ ----------- ----------- ----------- ------------ ------------
Income from investment
operations
Net investment
income (loss) 0.65 1.43 1.37 1.47 1.42 1.20
Net gain (loss) on
investments and
foreign currency
transactions (both
realized and
unrealized) (0.79) (0.49) 0.96 0.40 (0.30) (0.77)
------------ ----------- ----------- ----------- ------------ ------------
Total from investment
operations (0.14) 0.94 2.33 1.87 1.12 0.43
------------ ----------- ----------- ----------- ------------ ------------
Less Distributions
Dividends from net
investment income (0.72) (1.42) (1.34) (1.50) (1.34) (1.43)
Distributions from
capital gains -- -- -- -- -- --
------------ ----------- ----------- ----------- ------------ ------------
Total distributions (0.72) (1.42) (1.34) (1.50) (1.34) (1.43)
------------ ----------- ----------- ----------- ------------ ------------
Net asset value,
end of period $ 15.74 $ 16.60 $ 17.08 $ 16.09 $ 15.72 $ 15.94
============ =========== =========== =========== ============ ============
Total return (0.76)%(c) 5.48% 15.17% 12.42% 7.79%(d) 2.24%(d)
Ratios/Supplemental Data:
Net assets, end of period
(000s omitted) $ 111,562 $ 94,044 $ 92,630 $ 75,849 $ 153,621 $ 143,517
Ratio of expenses to
average net assets 0.69%(a)(b) 0.70%(a) 0.70%(a) 0.88%(a) 1.00%(a) 1.00%(a)
Ratio of net investment
income (loss) to
average net assets 9.02%(b) 8.12% 8.44% 8.92% 9.37% 7.73%
Fund turnover rate 12%(c) 60% 84% 143% 70% 121%
</TABLE>
(a) 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 1.02% annualized for the six months ended February 28, 1999 and
1.14%, 1.13%, 1.11%, 1.08% and 1.13% for the years ended August 31, 1998,
1997, 1996, 1995 and 1994, respectively. 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 1.32% annualized for the
six months ended February 28, 1999, 1.39% for the year ended August 31,
1998 and 1.47% annualized for the period ended August 31, 1997.
(b) Annualized.
(c) Not annualized.
(d) Redemption fees not reflected in total return.
* Commencement of operations.
90
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common
------------------------------------------------------
For the Six For the Year For the Period
Months Ended Ended November 1, 1996*
February 28, 1999 August 31, to August 31,
(Unaudited) 1998 1997
----------------- ------------ -----------------
Net asset value,
<S> <C> <C> <C>
beginning of period $ 16.62 $ 17.08 $ 16.21
------------- ---------- ---------
Income from investment
operations
Net investment
income (loss) 0.62 1.36 0.93
Net gain (loss) on
investments and
foreign currency
transactions (both
realized and
unrealized) (0.77) (0.45) 0.87
------------- ---------- ---------
Total from investment
operations (0.15) 0.91 1.80
------------- ---------- ---------
Less Distributions
Dividends from net
investment income (0.66) (1.37) (0.93)
Distributions from
capital gains -- -- --
------------- ---------- ---------
Total distributions (0.66) (1.37) (0.93)
------------- ---------- ---------
Net asset value,
end of period $ 15.81 $ 16.62 $ 17.08
============= ========== =========
Total return (0.85)%(c) 5.27% 11.49%(c)
Ratios/Supplemental Data:
Net assets, end of period
(000s omitted) $ 31,753 $ 570 $ 86
Ratio of expenses to
average net assets 0.95%(a) 0.95%(a) 0.96%(a)(b)
Ratio of net investment
income (loss) to
average net assets 8.73%(b) 7.96% 8.13%(b)
Fund turnover rate 12%(c) 60% 84%(c)
</TABLE>
See Accompanying Notes to Financial Statements.
91
<PAGE>
<TABLE>
<CAPTION>
Warburg Pincus Funds
Municipal Bond Fund Financial Highlights
(For a Share Outstanding Throughout Each Period)
- -------------------------------------------------------------------------------------------------------------------------------
Institutional Common
--------------------------------------------------------------------------- ------------
For the
For the Period
For the Six Period November 2,
Months Ended June 20, 1998* to
February 28, For the Year Ended August 31, 1994* February 28,
1999 ------------------------------------------- to August 31, 1999
(Unaudited) 1998 1997 1996 1995 1994 (Unaudited)
----------- ------- ------- ------- ------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 15.12 $ 14.84 $ 14.65 $ 15.46 $ 15.06 $ 15.00 $ 15.14
------- ------- ------- ------- ------- ------- ---------
Income from investment
operations
Net investment income (loss) 0.32 0.70 0.72 0.73 0.71 0.09 0.19
Net gain (loss) on investments
and foreign currency
transactions (both realized
and unrealized) 0.02 0.40 0.65 (0.37) 0.50 (0.03) --
------- ------- ------- ------- ------- ------- ---------
Total from investment
operations 0.34 1.10 1.37 0.36 1.21 0.06 0.19
------- ------- ------- ------- ------- ------- ---------
Less Distributions
Dividends from net investment
income (0.33) (0.71) (0.72) (0.74) (0.76) -- (0.20)
Distributions from capital gains (0.21) (0.11) (0.46) (0.43) (0.05) -- (0.21)
------- ------- ------- ------- ------- ------- ---------
Total distributions (0.54) (0.82) (1.18) (1.17) (0.81) -- (0.41)
------- ------- ------- ------- ------- ------- ---------
Net asset value, end of period $ 14.92 $ 15.12 $ 14.84 $ 14.65 $ 15.46 $ 15.06 $ 14.92
======= ======= ======= ======= ======= ======= =========
Total return 2.26%(c) 7.62% 9.74% 2.27% 8.42% 0.40%(c) 1.23%(c)
Ratios/Supplemental Data:
Net assets, end of period
(000s omitted) $23,962 $22,229 $19,810 $19,581 $48,978 $42,310 $ 6
Ratio of expenses to
average net assets 0.99%(a)(b) 1.00%(a) 1.00%(a) 1.00%(a) 1.00%(a) 1.00%(a)(b) 1.25%(a)(b)
Ratio of net investment
income (loss)
to average net assets 4.29%(b) 4.72% 4.88% 4.62% 4.76% 3.27%(b) 4.45%(b)
Fund turnover rate 17%(c) 57% 43% 34% 25% 9%(c) 17%(c)
</TABLE>
- -----------
(a) 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 1.37% annualized for the six months ended February 28, 1999 and
1.39%, 1.37%, 1.42% and 1.19% for the years ended August 31, 1998, 1997,
1996 and 1995, respectively and 1.34% annualized for the period ended
August 31, 1994. 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 1.43% annualized for the period ended February
28, 1999.
(b) Annualized.
(c) Not Annualized.
* Commencement of operations.
See Accompanying Notes to Financial Statements.
92
<PAGE>
<TABLE>
<CAPTION>
Warburg Pincus Funds
Strategic Global Fixed Financial Highlights
(For a Share Outstanding Throughout Each Period)
- -------------------------------------------------------------------------------------------------------------------------------
Institutional Common
---------------------------------------------------------------------------- -----------
For the
For the Period
For the Six Period November 2,
Months Ended June 28, 1998* to
February 28, For the Year Ended August 31, 1994* February 28,
1999 ------------------------------------------- to August 31, 1999
(Unaudited) 1998 1997 1996 1995 1994 (Unaudited)
------------ ------- ------- ------- ------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 15.10 $ 15.41 $ 15.75 $ 15.67 $ 15.00 $ 15.00 $16.10
--------- ------- ------- ------- ------- -------- ------
Income from investment
operations
Net investment income (loss) 0.38 0.87 0.85 0.87 1.06 0.15 0.32
Net gain (loss) on investments
and foreign currency
transactions (both realized
and unrealized) 0.31 (0.25) (0.16) 0.58 0.49 (0.15) (0.65)
--------- ------- ------- ------- ------- -------- ------
Total from investment
operations 0.69 0.62 0.69 1.45 1.55 0.00 (0.33)
--------- ------- ------- ------- ------- -------- ------
Less Distributions
Dividends from net investment
income (0.25) (0.45) (0.71) (1.22) (0.88) -- (0.24)
Distributions from capital gains (0.28) (0.48) (0.32) (0.15) -- -- (0.28)
--------- ------- ------- ------- ------- -------- ------
Total distributions (0.53) (0.93) (1.03) (1.37) (0.88) -- (0.52)
--------- ------- ------- ------- ------- -------- ------
Net asset value, end of period $ 15.26 $ 15.10 $ 15.41 $ 15.75 $ 15.67 $ 15.00 $15.25
========= ======= ======= ======= ======= ======== ======
Total return 4.46%(c) 4.19% 4.48% 9.65% 10.72% 0.00%(c) (2.15)%(c)
Ratios/Supplemental Data:
Net assets, end of period
(000s omitted) $ 28,217 $28,483 $44,285 $38,348 $19,565 $ 6,300 $ 9
Ratio of expenses to
average net assets 0.74%(a)(b) 0.75%(a) 0.75%(a) 0.75%(a) 0.75%(a) 0.75%(a)(b) 1.00%(a)(b)
Ratio of net investment
income (loss)
to average net assets 4.85%(b) 5.30% 5.31% 7.37% 7.26% 5.64%(b) 4.82%(b)
Fund turnover rate 134%(c) 283% 98% 87% 91% 0%(c) 134%(c)
</TABLE>
- -------------
(a) 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 1.06% annualized for the six months ended February 28, 1999 and
1.17%, 0.98%, 1.07% and 1.29% for the years ended August 31, 1998, 1997,
1996 and 1995, respectively and 1.92% annualized for the period ended
August 31, 1994. 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 1.26% annualized for the period ended February
28, 1999.
(b) Annualized.
(c) Not Annualized.
* Commencement of operations.
See Accompanying Notes to Financial Statements.
93
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Note 1. Summary of Significant Accounting Policies
The Warburg Pincus Funds covered in this report are comprised of Warburg
Pincus U.S. Core Fixed Income Fund ("Core Fixed"), Warburg Pincus Strategic
Global Fixed Income Fund ("Global Fixed"), Warburg Pincus High Yield Fund ("High
Yield") and Warburg Pincus Municipal Bond Fund ("Municipal") (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, open-end
management investment companies. Each Fund is authorized to offer three classes
of shares: Common, Advisor and Institutional, although only Common shares and
Institutional shares of each Fund are currently offered. Common shares for each
Fund bear expenses paid pursuant to a shareholder servicing and distribution
plan at an annual rate of .25% of the average daily net asset value of the
Fund's outstanding Common shares.
On October 23, 1998, pursuant to an Agreement and Plan of Reorganization,
each Fund (other than European Equity) acquired all of the assets and
liabilities of a corresponding investment series of The RBB Fund, Inc.
(collectively, the "Acquired Funds"). The acquisitions were accomplished by a
tax-free exchange of the following shares of each Fund, in each case for the
same amount of shares of the corresponding class of the applicable Acquired
Fund. Shares were reissued to shareholders at the time of the reorganizations.
Fund Common Shares Institutional Shares
- ------ ------------- --------------------
Core Income -- 25,307,129
Global Fixed -- 1,875,514
High Yield 34,314 5,655,408
Municipal -- 1,483,582
94
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Note 1. Summary of Significant Accounting Policies -- (cont'd)
The net assets of each Fund directly after the reorganization were the same
as the corresponding Acquired Fund as described in the table below. Each Fund
assumed the prior operating history of the corresponding Acquired Fund.
Unrealized
Fund Net Assets Appreciation/(Depreciation)*
- ---- ------------ ----------------------------
Core Income $395,200,568 $(3,009,982)
Global Fixed 30,261,883 526,957
High Yield 87,873,344 (5,030,237)
Municipal 22,404,233 1,280,536
Certain of the Funds are permitted to engage in the investment strategies
described in the Notes to Financial Statements. The Funds are not obligated to
pursue any of the following strategies and do not represent that these
techniques are available now or will be available at any time in the future.
Please refer to each Fund's prospectuses and statement of additional information
for a description of its investment strategies.
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. 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
- --------------
*The amount of each Fund's net assets includes the amount of unrealized
appreciation/(depreciation) listed above.
95
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Note 1. Summary of Significant Accounting Policies -- (cont'd)
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 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
securites for the applicable period less applicable expenses. Each of the
High Yield, Global Fixed and Core Fixed Funds will distribute substantially
all of its net realized capital gains, if any, to its shareholders annually
and will distribute net investment income at least quarterly. The Municipal
Fund will distribute substantially all of its net realized capital gains,
if any, annually and all net investment income monthly. 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, mortgage-backed securities, passive foreign investment
companies, and forward foreign currency contracts.
96
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
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. None of the Funds had open repurchase
agreements at February 28, 1999.
H) FUTURES TRANSACTIONS -- A Fund invests in futures contracts for
the purpose of hedging its existing portfolio securities, or securities
that the Fund intends to purchase, against fluctuations in value caused by
changes in prevailing market interest rates or securities prices, or for
other purposes. Certain Funds' may enter into futures contracts subject to
certain limitations. Upon entering into a futures contract, each Fund is
required to deposit cash or pledge U.S. Government securities of an initial
margin. Subsequent payments, which are dependent on the daily fluctuations
in the value of the underlying instrument, are made or received by the Fund
each day (daily variations margin) and are recorded as unrealized gains or
losses until the contracts are closed. When the contracts are closed, the
Fund records a realized gain or loss equal to the difference between the
proceeds from (or cost of) the closing transaction and the Fund's basis in
the contracts. Risks of entering into futures contracts include the
possibility that there will be
97
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Note 1. Summary of Significant Accounting Policies -- (cont'd)
an imperfect price correlation between the futures contracts and the
underlying securities. Second, it is possible that a lack of liquidity for
futures contracts could exist in the secondary market, resulting in an
inability to close a futures position prior to its maturity date. Third,
the purchase of a futures contract involves the risk that a Fund could lose
more than the original margin deposit required to initiate a futures
transaction.
As of February 28, 1999, Core Fixed held the following futures contracts:
<TABLE>
<CAPTION>
Futures Expiration Contract Contract Unrealized
Contracts Date Amount Value Gain/Loss
- --------- ---------- ------------- ------------- -----------
<S> <C> <C> <C> <C>
Japan 10 Year Bond Futures 03/11/99 $(15,734,091) $(15,457,219) $ 276,872
U.S. Treasury Notes Futures 06/21/99 22,893,875 22,526,656 (367,219)
U.S. Treasury Notes Futures 06/21/99 (65,207,672) (63,680,543) 1,527,129
U.S. Treasury Bond Futures 06/21/99 23,975,726 23,346,969 (628,757)
</TABLE>
As of February 28, 1999, Global Fixed held the following futures contracts:
<TABLE>
<CAPTION>
Futures Expiration Contract Contract Unrealized
Contracts Date Amount Value Gain/Loss
- --------- ---------- ------------- ------------- -----------
<S> <C> <C> <C> <C>
U.S. Treasury Notes Futures 06/21/99 $ 676,930 $ 665,813 $ (11,117)
U.S. Treasury Notes Futures 06/21/99 843,000 836,812 (6,188)
U.S. Treasury Notes Futures 06/21/99 (3,172,984) (3,098,250) 74,734
U.S. Treasury Bond Futures 06/21/99 1,242,266 1,209,688 (32,578)
</TABLE>
I) TBA PURCHASE COMMITMENTS -- The Funds may enter into "TBA" (to
be announced) purchases commitments to purchase securities for a fixed
price at a future date, typically not exceeding 45 days. TBA purchase
commitments may be considered securities in themselves, and involve a risk
of loss if the value of the security to be purchased declines prior to
settlement date, which risk is in addition to the risk of decline in each
Fund's other assets. Unsettled TBA purchase commitments are valued at the
current market value of the underlying securities, according to the
procedures described under "Security Valuation" above.
J) 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
98
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Note 1. Summary of Significant Accounting Policies -- (cont'd)
loan including any accrued interest thereon. 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.
None of the Funds had any securities on loan to brokers at February 28,
1999.
K) SHORT SALES -- When a Fund's investment adviser believes that a
security is overvalued, it may sell the security short by borrowing the
same security from a broker or other institution and selling the security.
A Fund will incur a loss as a result of the short sale if the price of the
borrowed security increases between the date of the short sale and the date
on which the Fund replaces such security. A Fund will realize a gain if
there is a decline in price of the security between those dates, which
decline exceeds the cost of borrowing the security and other transaction
costs. There can be no assurance that a Fund will be able to close out a
short position at any particular time or at an acceptable price. Although a
Fund's gain is limited to the amount at which it sold a security short, its
potential loss is limited only by the maximum attainable price of the
security (which at least theoretically is unlimited) less the price at
which the security was sold. Until a Fund replaces a borrowed security, it
will maintain at all times cash, or liquid securities in an amount which,
when added to any amount deposited with a broker as collateral will at
least equal the current market value of the security sold short. Depending
on arrangements made with brokers, a Fund may not receive any payments
(including interest) on collateral deposited with them.
L) OTHER -- Securities denominated in currencies other than the
U.S. dollar are subject to changes in value due to fluctuations in exchange
rates.
99
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Note 1. Summary of Significant Accounting Policies -- (cont'd)
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.
Lower-rated debt securities (commonly known as "junk bonds")
possess speculative characteristics and are subject to greater market
fluctuations and risk of lost income and principal than higher-rated debt
securities for a variety of reasons. Also, during an economic downturn or
substantial period of rising interest rates, highly leveraged issuers may
experience financial stress which would adversely affect their ability to
service their principal and interest payment obligations, to meet projected
business goals and to obtain additional financing.
In addition, periods of economic uncertainty and changes can be
expected to result in increased volatility of market prices of lower-rated
debt securities and (to the extent a Fund invests in junk bonds) the Fund's
net asset value.
Note 2. Transactions with Affiliates and Related Parties
Pursuant to Investment Advisory Agreements, Credit Suisse Asset Management
("CSAM") an indirect, wholly-owned subsidiary of Credit Suisse Group, serves as
investment adviser for each of the four Funds described herein.
100
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Note 2. Transactions with Affiliates and Related Parties -- (cont'd)
For its advisory services, CSAM is entitled to receive the following fees,
computed daily and payable monthly on each Fund's average daily net assets:
Fund Annual Rate
---- ----------------------------------
Core Fixed 0.375% of average daily net assets
Global Fixed 0.50% of average daily net assets
High Yield 0.70% of average daily net assets
Municipal 0.70% of average daily net assets
CSAM may, at its discretion, voluntarily waive all or any portion of its
advisory fee for any of the Funds. For the six months ended February 28, 1999,
advisory fees and waivers for each of the twelve investment Funds were as
follows:
Gross Net
Fund Advisory Fee Waiver Advisory Fee
---- ------------ ---------- ------------
Core Fixed $743,539 $(273,963) $469,576
Global Fixed 74,467 (42,206) 32,261
High Yield 397,580 (156,312) 241,268
Municipal 80,355 (39,196) 41,159
For its sub-advisory services, Credit Suisse Asset Management Limited ("CSAM
Limited"), an indirect, wholly-owned subsidiary of Credit Suisse Group, is
entitled to receive from CSAM .30% of the average daily net assets of Global
Fixed. For the six-months ended February 28, 1999, CSAM Limited was entitled to
receive $22,340 from CSAM for sub-advisory services provided to Global Fixed,
all of which fees were waived.
State Street Bank and Trust Company ("State Street"), serves as each Fund's
transfer and dividend disbursing 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.
101
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Note 2. Transactions with Affiliates and Related Parties -- (cont'd)
Counsellors Funds Service, Inc. ("CFSI"), a wholly-owned subsidiary of
Warburg Pincus Asset Management, Inc., and PFPC Inc. ("PFPC"), an indirect,
wholly-owned subsidiary of PNC Bank Corp., serve as each Fund's
co-administrators. For administration services, each Fund pays CFSI a fee
calculated at an annual rate of .05% of the Fund's first $125 million in average
daily net 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
CFSI for co-administration services for the Institutional shares. CSFI may, at
its discretion, voluntarily waive all or any portion of its co-administration
fees for any of the Funds. For the period October 23, 1998 to February 28, 1999,
co-administration fees earned and waived by CFSI were as follows:
Gross Net
Fund Administration Fee Waiver Administration Fee
---- ------------------- ------- ------------------
Core Fixed $ 1 $ (1) $ --
Global Fixed -- -- --
High Yield 4,325 (3,251) 1,074
Municipal 1 (1) --
Prior to October 23, 1998, Provident Distributors, Inc. ("PDI") served as
administrative service agent. An administrative service fee was computed daily
and payable quarterly at an annual rate of .15% of the average daily net assets
of the corresponding portfolios of the RBB Fund.
The administrative service agent may at its discretion voluntarily waive all
or any portion of its administrative fee for any of the Funds. For the period
ended October 23, 1998, administrative service fees earned and waived by PDI
were as follows:
Gross Administrative Net Administrative
Fund Service Fee Waiver Service Fee
---- -------------------- --------- ------------------
Core Fixed $86,637 $(80,861) $5,776
Global Fixed 6,441 (6,012) 429
High Yield 19,734 (18,418) 1,316
Municipal 4,874 (4,548) 326
102
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Note 2. Transactions with Affiliates and Related Parties -- (cont'd)
For administration services, PFPC currently receives a fee calculated at
annual rate of .125% on each Fund's average daily net assets, 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 six months ended February 28, 1999, co-administration
fees earned and waived by PFPC were as follows:
Gross Administrative Net Administrative
Fund Fee Waiver Fee
------ -------------------- -------- ------------------
Core Fixed $146,248 $ -- 146,248
Global Fixed 24,853 -- 24,853
High Yield 70,996 (14,199) 56,797
Municipal 18,596 -- 18,596
Counsellors Securities Inc. ("CSI"), also a wholly-owned subsidiary of
Warburg Pincus Asset Management, Inc., serves as each Fund's distributor. No
compensation is payable by any Fund to CSI for its distribution services for
Institutional shares. For its distribution services for the Common shares, CSI
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 six months ended February 28,
1999, distribution fees earned by CSI were as follows:
Fund Distribution Fee
---- ----------------
Core Fixed $ 5
Global Fixed 3
High Yield 22,042
Municipal 5
Note 3. Purchases and Sales of Securities
For the six months ended February 28, 1999, purchases and sales of investment
securities (other than short-term investments) were as follows:
Investment Securities Short Securities
------------------------------- ----------------
Fund Purchases Sales Sales
---- ------------- -------------- ----------------
Core Fixed $1,160,469,02 $1,126,621,296 --
Global Fixed Income 60,275,775 40,023,956 --
High Yield 65,418,677 13,390,024 --
Municipal 5,539,964 3,592,132 --
103
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Note 4. Capital Shares
Transactions in capital shares for each period were as follows:
<TABLE>
<CAPTION>
U.S. Core Fixed Income Fund
----------------------------------------------------------------------------------------------------
Institutional Common
----------------------------------------------------------------------------------------------------
For the Six Months Ended For the Period November 2, 1998*
February 28, 1999 For the Year Ended Through February 28, 1999
(Unaudited) August 31, 1998 (Unaudited)
----------------------------------------------------------------------------------------------------
Shares Value Shares Value Shares Value
---------- ------------- ---------- ------------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 6,845,188 $ 107,157,220 15,080,236 $ 237,240,219 1,031 $16,022
Shares issued in
reinvestment of
dividends 1,079,605 16,758,880 906,263 14,074,352 2 29
Shares repurchased (8,705,640) (136,140,271) (2,268,321) (35,611,876) -- --
---------- ------------- ---------- ------------- -------- -------
Net increase/(decrease) (780,847) $ (12,224,171) 13,718,178 $ 215,702,695 1,033 $16,051
========== ============= ========== ============= ======== =======
</TABLE>
<TABLE>
<CAPTION>
Strategic Global Fixed Income Fund
----------------------------------------------------------------------------------------------------
Institutional Common
----------------------------------------------------------------------------------------------------
For the Six Months Ended For the Period November 2, 1998*
February 28, 1999 For the Year Ended Through February 28, 1999
(Unaudited) August 31, 1998 (Unaudited)
----------------------------------------------------------------------------------------------------
Shares Value Shares Value Shares Value
---------- ------------- ---------- ------------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 49,311 $ 784,925 227,215 $ 3,505,185 569 $ 9,022
Shares issued in
reinvestment of
dividends 62,754 990,884 147,509 2,200,318 2 32
Shares repurchased (149,513) (2,352,666) (1,361,892) (20,772,949) -- --
---------- ------------- ---------- ------------- -------- -------
Net increase/(decrease) (37,448) $ (576,857) (987,168) $(15,067,446) 571 $9,054
========== ============= ========== ============= ======== =======
</TABLE>
<TABLE>
<CAPTION>
High Yield Fund
-----------------------------------------------------------------------------------------------------
Institutional Common
-----------------------------------------------------------------------------------------------------
For the Six Months Ended For the Six Months Ended
February 28, 1999 For the Year Ended February 28, 1999 For the Year Ended
(Unaudited) August 31, 1998 (Unaudited) August 31, 1998
-----------------------------------------------------------------------------------------------------
Shares Value Shares Value Shares Value Shares Value
--------- ----------- ---------- ------------ -------- ----------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 2,004,825 $31,561,695 2,248,712 $ 38,970,312 2,098,268 $32,879,970 66,018 $ 4,697,209
Shares issued in
reinvestment of
dividends 238,675 3,749,600 416,842 7,175,130 33,436 523,091 9,315 162,504
Shares repurchased (822,621) (12,958,425) (2,423,467) (41,922,050) (156,985) (2,495,620) (246,118) (4,271,516)
--------- ----------- ---------- ------------ --------- ----------- -------- ------------
Net increase 1,420,879 $22,352,870 242,087 $ 4,223,392 1,974,719 $30,907,441 29,215 $ 588,197
========= =========== ========== ============ ========= =========== ======== ============
</TABLE>
- -----------
* Commencement of operations.
104
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Note 4. Capital Shares
<TABLE>
<CAPTION>
Municipal Bond Fund
----------------------------------------------------------------------------------------------------
Institutional Common
----------------------------------------------------------------------------------------------------
For the Six Months Ended For the Period November 2, 1998*
February 28, 1999 For the Year Ended Through February 28, 1999
(Unaudited) August 31, 1998 (Unaudited)
----------------------------------------------------------------------------------------------------
Shares Value Shares Value Shares Value
---------- ------------- ---------- ------------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 106,078 $ 1,594,893 217,663 $ 3,269,230 1,395 $ 21,022
Shares issued in
reinvestment of
dividends 52,580 789,139 70,888 1,064,203 3 46
Shares repurchased (22,857) (344,926) (153,265) (2,304,613) (995) (15,125)
---------- ------------- ---------- ------------- -------- --------
Net increase 135,801 $2,039,106 135,286 $2,028,820 403 $ 5,943
========== ============= ========== ============= ======== ========
</TABLE>
- -------------
*Commencement of operations.
On February 28, 1999, three shareholders held approximately 100% of the
outstanding shares of the Core Fixed Common shares, three shareholders held
approximately 100% of the outstanding shares of the Global Fixed Common shares,
three shareholders held approximately 90% of the outstanding shares of the High
Yield Common shares and two shareholders held approximately 100% of the
outstanding shares of the Municipal Common shares.
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 to 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.
105
<PAGE>
Warburg Pincus Funds
Notes to Financial Statements
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Note 6. Forward Foreign Currency Contracts -- (cont'd)
Each Fund's policy is to include this portion of realized and unrealized gains
and losses on investments that result from foreign currency changes with other
foreign currency gains and losses on the Statement of Operations.
The use of forward foreign currency contracts does not eliminate fluctuations
in the underlying prices of each Fund's portfolio securities, but it does
establish a rate of exchange that can be achieved in the future. Although
forward foreign currency contracts limit the risk of loss due to a decline in
the value of the hedged currency, they also limit any potential gain that might
result should the value of the currency increase. In addition, a Fund could be
exposed to risks if the counterparty to the contract is unable to meet the terms
of the contract. During the six months ended February 28, 1999, the Global Fixed
and the Core Fixed entered into forward foreign currency contracts. Core Fixed
had no open forward foreign contracts at February 28, 1999.
The Global Fixed had the following open Forward Foreign Currency Contracts at
February 28, 1999:
<TABLE>
<CAPTION>
Foreign Unrealized
Forward Currency Expiration Currency Contract Contract Foreign Exchange
Contract Date To Be Sold Amount Value Gain/(Loss)
- ------------------ ---------- ---------- -------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Australian Dollar 03/11/99 826,404 $ 519,064 $ 512,676 $ 6,388
Euro 03/11/99 716,894 835,038 789,140 45,898
French Frank 05/18/99 18,032 20,306 19,925 381
Great Britain Pound 03/11/99 193,910 319,583 311,094 8,489
Italian Lira 03/11/99 517,993 609,248 570,194 39,054
New Zealand Dollar 03/04/99 1,769,799 934,029 929,782 4,247
South African Rand 08/18/99 71,527 10,945 11,080 (135)
---------- ---------- ----------
$3,248,213 $3,143,891 $ 104,322
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Foreign Unrealized
Forward Currency Expiration Currency Contract Contract Foreign Exchange
Contract Date To Be Purchased Amount Value Gain/(Loss)
- -------------------- ---------- --------------- ------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Australian Dollars 03/11/99 826,404 $ 510,552 $ 512,676 $ 2,124
Canadian Dollars 03/11/99 1,077,389 699,376 713,947 14,571
German Deutschemarks 03/11/99 2,197,806 2,583,253 2,419,291 (163,962)
Great Britain Pounds 03/11/99 485,259 802,763 778,511 (24,252)
Japanese Yen 05/10/99 169,750,637 1,529,285 1,440,350 (88,935)
Swedish Krona 03/11/99 4,939,859 610,160 604,064 (6,096)
------------- ------------- -------------
$ 6,735,389 $ 6,468,839 $ (266,550)
============= ============= =============
</TABLE>
106
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[WARBURG PINCUS FUNDS LOGO]
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