[LOGO]
ANNUAL REPORT
October 31, 2000
Classes A, B, C, and M
INTERNATIONAL EQUITY FUNDS
Pilgrim Worldwide Growth
Pilgrim Global Corporate Leaders
Pilgrim International Value
Pilgrim International
Pilgrim International Core Growth
Pilgrim International SmallCap Growth
Pilgrim Emerging Markets Value
Pilgrim Emerging Countries
Pilgrim Worldwide Emerging Markets
Pilgrim Global Technology
Pilgrim Asia-Pacific Equity
Pilgrim SmallCap Asia Growth
Pilgrim Troika Dialog Russia
PRECIOUS METALS FUNDS
Pilgrim Gold
Pilgrim Silver
INTERNATIONAL INCOME FUND
Pilgrim Global Income
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Pilgrim
Funds
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TABLE OF CONTENTS
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Letter to Shareholders .......................................... 1
Portfolio Managers' Reports:
International Equity Funds ................................. 2
Precious Metals Funds ...................................... 28
International Income Fund .................................. 32
Index Descriptions .............................................. 34
Report of Independent Accountants ............................... 35
Statements of Assets and Liabilities ............................ 36
Statements of Operations ........................................ 42
Statements of Changes in Net Assets ............................. 47
Financial Highlights ............................................ 57
Notes to Financial Statements ................................... 73
Portfolios of Investments ....................................... 92
Shareholder Meetings ............................................ 135
Tax Information ................................................. 137
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Pilgrim
Funds
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LETTER TO SHAREHOLDERS
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Dear Shareholder:
We are pleased to present the October 31, 2000 Annual Report for the
International ING Pilgrim Funds.
On September 1, 2000 ING Groep N.V.(NYSE: ING) acquired Reliastar Financial
Corp., the indirect parent company of Pilgrim Investments, Inc. Adviser to the
Funds, Pilgrim Securities, Inc. Distributor to the Funds and Pilgrim Group, Inc,
Administrator to the Funds. In conjunction with the acquisition the Adviser,
Distributor and Administrator changed their names to ING Pilgrim Investments,
Inc., ING Pilgrim Securities, Inc. and ING Pilgrim Group, Inc. effective
September 8, 2000.
Our fund family now has many funds of varying types which provide core
investment choices for the serious investor. As our fund family has grown, we
have taken steps to rationalize the reporting for similar funds. We have
conformed all of our International Funds to an October 31 year end for financial
reporting purposes. There are thirteen International Equity Funds, one
International Income Fund and two Precious Metals Funds included in this Annual
Report.
At ING Pilgrim, we are dedicated to providing core investments for the serious
investor. We believe that the key to success is matching quality core
investments to the individual needs of investors. Core investments are the
foundation of every portfolio and the basis of other important investment
decisions. Pilgrim prides itself on providing a family of core investments
designed to help you reach your financial goals. Our goal is for every investor
to have a successful investment experience.SM
Sincerely,
ING Pilgrim Group, Inc.
December 28, 2000
1
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International
Equity Funds
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Portfolio
PILGRIM WORLDWIDE GROWTH FUND Managers' Report
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Portfolio Management Team: Mary Lisanti, Portfolio Manager; Philip A. Schwartz,
Portfolio Manager; Richard T. Saler, Portfolio Manager.
Goal: The Fund seeks to invest at least 65% of its assets in equity securities
of issuers located in at least three countries, one of which may be the U.S. The
Fund generally invests at least 75% of its assets in common and preferred
stocks, warrants and convertible securities. The fund may invest in countries
with emerging securities markets when portfolio managers believe they present
attractive opportunities.
US Market: The Fund seeks to invest in equity securities the portfolio managers
feel have above-average prospects for growth. The portfolio managers emphasize a
growth approach by searching for companies that they believe are managing change
advantageously and may be poised to exceed growth expectations. The portfolio
managers focus on both a "bottom-up" analysis that evaluates the financial
condition and competitiveness of individual companies and a "top-down" thematic
approach and sell discipline. The portfolio managers seek to identify themes
that reflect the major social, economic and technological trends that they
believe are likely to shape the future of business and commerce over the next
three to five years. They also seek to provide a framework for identifying the
industries and companies they believe may benefit most.
Foreign Markets: The portfolio managers primarily use "bottom-up" fundamental
analysis to identify stocks, which they believe offer good value relative to
their peers in the same industry, sector or region. They also use "top-down"
analysis to identify important themes or issues which may affect the investment
environment in regions or sectors, and to estimate market risks. The portfolio
managers focus on various factors, including valuation, catalysts to stock price
appreciation, quality of management and financial measures.
Market Overview:
US Market: In what is proving to be an extremely difficult year for equity
investors, US markets continued to struggle during the month of October.
Evidence that the US economy has slowed significantly appeared not just in
macroeconomic data, but also in the earnings performance and outlook for many of
the leading companies in the US and the world. While the Consumer Price Index
showed a higher than expected gain of 0.50% in September, economic growth and
manufacturing activity slowed significantly. Third quarter GDP reported economic
growth of 2.70%, well below the expected 3.50% growth, and the National
Association of Purchasing Management Index indicated a contraction in
manufacturing activity with a reading of 48.3. Meanwhile, the Euro sank to an
all-time low before a central bank intervention spurred a recovery late in
October. As retailers voiced concerns over weak Christmas sales and other third
quarter reports disappointed the markets, investors became very defensive during
the month. The slowdown in the rate of change in earnings growth for technology
stocks became apparent, and investors shunned the sector in favor of safer
sectors such as consumer staples, basic materials, and transportation.
The slowing economy and earnings growth in the technology sector weighed heavily
on the US stock market in October. All of the major US indices were dragged
lower during the month with the exception of the Dow Jones Industrial Average,
which was helped mainly by General Electric's acquisition of fellow
index-component Honeywell. The DJIA rose 3.00% in October but has now lost 4.58%
in 2000. The NASDAQ Composite slumped again, falling 8.26% during the month; the
technology-heavy benchmark has now lost 17.19% this year. Smaller stocks fared
no better, as the Russell 2000 Index dropped 4.46% in October and has a loss of
0.47% in 2000. The S&P Midcap still has a year to date gain of 18.07% despite
dropping 3.39% during the month.
Foreign Markets: Structural reform and technology themes were among the positive
factors driving foreign markets higher in the first six months of the fiscal
year ended October 31, 2000. In the fiscal second half, concerns over rising oil
prices, higher interest rates and a declining Euro caused a correction in
technology shares. Sentiment was further dampened by earnings disappointments in
a range of industries, along with concerns about the future strength of economic
growth. The MSCI World Index gained 1.40% in the period. European markets
declined as the European Central Bank raised interest rates in order to bolster
the Euro. Technology heavy markets, such as Sweden and Finland, were especially
weak later in the fiscal year after posting strong gains in the first half. The
MSCI Japan Index fell by 7.60% during the year, relating to concerns over the
sustainability of economic recovery. Many leading stocks in Japan also declined
in tandem with the global technology correction.
Performance: For the year ended October 31, 2000, the Pilgrim Worldwide Growth
Fund's class A shares, excluding sales charges, provided a total return of
14.94% versus a gain in the MSCI World Index of 1.39% for the same period.
However, The Fund fell 8.28% in October and has now lost 15.27% in the year
2000, trailing the benchmark MSCI World Index, which fell 1.66% in October and
is now down 8.79% for the year.
US Market: Domestically, during October, the Fund received a positive
contribution from financial stocks but was dragged lower by the energy and
telecommunications sectors. Among the individual stocks that contributed to
performance were Adobe Systems, Comverse Technology, Microsoft, and Fannie Mae.
Foreign Markets: With respect to overseas equities, lower exposure to European
markets and the Euro contributed positively throughout the period.
Market Outlook:
US Market: While October may have been a difficult month for US markets, there
are more things about the market that are clearly known. First, the economy has
clearly slowed. Second, earnings growth in the technology sector is slowing
while picking up in other sectors, and third, there is a shift where the users
of technology are gaining more benefit from the producers of technology. While
the market may be under pressure until the presidential race is resolved, we
feel that the market is in the process of forming a bottom, and interest rates
will probably decline from here. While the aggregate benchmarks may be
challenging, active portfolio managers will have an opportunity to significantly
outperform the major indices. There is a tremendous amount of secular change
occurring in today's global economy, as companies struggle to adapt to rapid
technological innovation. These secular changes are more powerful than the
cyclical changes, and identification of these changes will be the key to
navigating equity markets going forward.
Foreign Markets: In the year going forward, the developing global economic
slowdown is at risk of further adversely affecting earnings. In the medium and
longer-term, international markets remain attractive. The positive themes of
restructuring and the growing equity culture abroad are still very much in
place, and will continue to spur earnings growth.
2
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Portfolio
Managers' Report PILGRIM WORLDWIDE GROWTH FUND
--------------------------------------------------------------------------------
Portfolio Strategy:
US Market: In this environment, we believe that Fund is well positioned to
benefit going forward. Not all companies will be successful despite the
continued growth in the US economy (albeit at a slower rate), and therefore,
broad sector investments will not result in the returns of the recent past. This
"market of stocks" with a wide dispersion of returns within individual sectors
will create a very different market environment from the "stock market" of the
last few years. In this environment, the combination of a top-down thematic
approach and bottoms-up research with a focus on identifying inflection points
will provide a formula for identifying stocks within the broader market that
will flourish in the changing economy.
Foreign Markets: The fund will continue to emphasize securities of countries
that are expected to provide the best opportunities for meeting the Fund's
investment objective.
<TABLE>
<CAPTION>
4/19/93 10/93 10/94 10/95 10/96 10/97 10/98 10/99 10/31/00
------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pilgrim Worldwide Growth Fund
Class A With Sales Charge 9,427 10,732 11,689 12,471 14,296 17,421 19,728 32,483 37,336
Pilgrim Worldwide Growth Fund
Class A Without Sales Charge 10,000 11,384 12,400 13,229 15,165 18,480 20,927 34,458 39,606
MSCI World Index 10,000 10,932 11,824 13,010 15,200 17,822 20,618 25,840 26,200
</TABLE>
Average Annual Total Returns
for the periods ended October 31, 2000
------------------------------------------------------
Since Inception Since Inception
of Class A and C of Class B
1 Year 5 Year 4/19/93 5/31/95
------ ------ ------- -------
Including Sales Charge:
Class A (1) 8.32% 23.06% 19.09% --
Class B (2) 9.18% 23.61% -- 23.25%
Class C (3) 13.24% 23.76% 19.28% --
Excluding Sales Charge:
Class A 14.94% 24.52% 20.03% --
Class B 14.18% 23.78% -- 23.33%
Class C 14.24% 23.76% 19.28% --
MSCI World Index 1.39% 15.03% 13.70%(4) 14.63%(5)
Based on a $10,000 initial investment, the graph and table above illustrate the
total return of Pilgrim Worldwide Growth Fund against the MSCI World Index. The
Index has an inherent performance advantage over the Fund since it has no cash
in its portfolio, imposes no sales charges and incurs no operating expenses. An
investor cannot invest directly in an index. The Fund's performance is shown
both with and without the imposition of sales charges.
Total returns reflect the fact that the Investment Adviser has contractually
agreed to waive or defer its management fee and to pay other operating expenses
otherwise payable by the Fund, subject to possible later reimbursement during a
three-year period. Total returns would have been lower had there been no
deferral to the Fund.
Performance data represents past performance and is no assurance of future
results. Investment return and principal value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their original
cost.
This letter contains statements that may be "forward-looking" statements. Actual
results may differ materially from those projected in the "forward-looking"
statements.
The views expressed in this report reflect those of the portfolio manager, only
through the end of the period as stated on the cover. The portfolio manager's
views are subject to change at any time based on market and other conditions.
Portfolio holdings are subject to change daily.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5%, 2% and 2%,
respectively, for the 1 year, 5 year and since inception returns.
(3) Reflects deduction of the Class C deferred sales charge of 1.00% for the 1
year return.
(4) Since inception performance for the index is shown from 05/01/93.
(5) Since inception performance for the index is shown from 06/01/95.
Principal Risk Factor(s): Price volatility and other risks that accompany an
investment in growth-oriented foreign equities. Sensitive to currency exchange
rates, international political and economic conditions and other risks that
affect foreign securities. The Fund may also invest in small and medium sized
companies, which may be more susceptible to price availability than larger
companies. Risks of foreign investing are generally intensified for investments
in emerging markets.
See accompanying index descriptions on page 34.
3
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International
Equity Funds
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Portfolio
PILGRIM GLOBAL CORPORATE LEADERS Managers' Report
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Portfolio Management Team: Alan Wapnick, Portfolio Manager, Philip A. Schwartz,
Portfolio Manager; Richard T. Saler, Portfolio Manager.
Goal: The Fund seeks to invest at least 65% of its assets in a diversified
portfolio of blue chip securities that the portfolio managers believe represents
"corporate leaders" in their respective industries. The Fund may invest in
securities of companies and governments of the following regions: Asia
(including Japan), Europe, Latin America, Africa, North America (including U.S.
and Canada), and other areas and countries as the advisor decides from time to
time.
Market Overview: Structural reform and technology themes were among the positive
factors driving foreign markets higher in the first six months of the fiscal
year ended October 31, 2000. In the fiscal second half, concerns over rising oil
prices, higher interest rates and a declining Euro caused a correction in
technology shares. Sentiment was further dampened by earnings disappointments in
a range of industries, along with concerns about the future strength of economic
growth. The MSCI World Index gained 1.39% in the period. European markets
declined as the European Central Bank raised interest rates in order to bolster
the Euro. Technology heavy markets, such as Sweden and Finland, were especially
weak later in the fiscal year after posting strong gains in the first half. The
MSCI Japan Index fell by 7.60% during the year, relating to concerns over the
sustainability of economic recovery. Many leading stocks in Japan also declined
in tandem with the global technology correction.
Performance: For the year ended October 31, 2000, the Fund's Class A shares,
excluding sales charges, provided a total return of 3.74% versus a gain in the
MSCI World Index of 1.39% for the same period.
Portfolio Strategy: Contributing to the positive relative performance were a
number of factors. In the fiscal first half, the Fund participated in the strong
gains of the telecom, media and technology sectors. Stocks such as, Cisco, NEC
and Ericsson rose significantly, but also helped performance by outperforming
during the correction in the year's second half. The Fund also maintained
positions in out of favor consumer non-durables, such as Nestle, Novartis and
Diageo. These latter positions were especially helpful as money rotated out of
technology and back into "old economy" sectors. Exposure to energy stocks also
contributed positively to performance.
Market Outlook: In the year going forward, the developing global economic
slowdown is at risk of further adversely affecting earnings. The Fund will
continue to emphasize the well-established, large-capitalization companies that
offer a high degree of visibility. In the medium and longer-term international
markets remain attractive. The positive themes of restructuring and the growing
equity culture abroad are still very much in place, and will continue to spur
earnings growth.
4
<PAGE>
Portfolio
Managers' Report PILGRIM GLOBAL CORPORATE LEADERS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
10/31/90 10/91 10/92 10/93 10/94 10/95 10/96 10/97 10/98 10/99 10/31/00
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pilgrim Global Corporate Leaders
Class A With Sales Charge 9,422 10,634 10,035 13,080 14,718 14,533 17,169 19,092 20,845 26,636 27,632
Pilgrim Global Corporate Leaders
Class A Without Sales Charge 10,000 11,287 10,650 13,882 15,622 15,425 18,223 20,264 22,124 28,270 29,328
MSCI World Index 10,000 11,643 11,100 14,172 15,329 16,862 19,706 23,105 26,730 33,501 33,967
</TABLE>
Average Annual Total Returns
for the periods ended October 31, 2000
--------------------------------------
1 Year 5 Years 10 Years
------ ------- --------
Including Sales Charge:
Class A (1) -2.19% 12.38% 10.70%
Excluding Sales Charge:
Class A 3.74% 13.71% 11.36%
MSCI World Index 1.39% 15.03% 13.01%
Based upon a $10,000 initial investment, the graph and table above illustrate
the total return of Pilgrim Global Corporate Leaders Fund against the MSCI World
Index. The Index has an inherent performance advantage over the Fund since it
has no cash in its portfolio, imposes no sales charges and incurs no operating
expenses. An investor cannot invest directly in an index. The Fund's performance
is shown both with and without the imposition of the sales charges.
Performance data represents past performance and is no assurance of future
results. Investment return and principal value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their original
cost.
This letter contains statements that may be "forward-looking" statements. Actual
results may differ materially from those projected in the "forward-looking"
statements.
The views expressed in this report reflect those of the portfolio manager, only
through the end of the period as stated on the cover. The portfolio manager's
views are subject to change at any time based on market and other conditions.
Portfolio holdings are subject to change daily.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%.
Principal Risk Factor(s): Price volatility and other risks that accompany an
investment in foreign equities. Sensitive to currency exchange rates,
international political and economic conditions and other risks that affect
foreign securities. Risks of foreign investing are generally intensified for
investments in emerging markets.
See accompanying index descriptions on page 34.
5
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International
Equity Funds
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Portfolio
PILGRIM INTERNATIONAL VALUE FUND Managers' Report
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Portfolio Management Team: Charles Brandes, CFA, Managing Partner; Jeff Busby,
CFA, Managing Partner; Brandes Investment Partners, L.P.
Goal: The Fund seeks to maximize long-term capital appreciation by investing
primarily in non-U.S. companies with market capitalizations greater than $1
billion. The Fund may hold up to 25% of its assets in companies with smaller
market capitalizations. The portfolio managers apply a company-by-company search
for businesses that have determinable value and which, in their estimation, are
currently priced below their actual value. Undervalued businesses may translate
into undervalued stocks, providing what they believe to be an above-average
chance for profit.
Market Overview: For much of the first half of the period, solid returns among
technology stocks lifted international indices to record highs. Between November
1, 1999 and March 31, 2000, gains for technology-related stocks lifted the MSCI
EAFE Index 12.80%.
By mid-March, however, amid concerns over higher interest rates and escalating
valuation levels, investors began to shed what had been top-performing tech
stocks and purchased issues in long-overlooked value sectors. Aggressive
interest-rate hikes by the European Central Bank during the second quarter and
the slumping euro weighed on investor confidence. As international markets fell
during the summer, investors refocused on attractively priced issues.
Between March 31 and the end of the period, the MSCI EAFE Index fell 13.70%.
Amid these developments, emerging markets were especially vulnerable. Late in
the period, stock market weakness in emerging nations was exacerbated by steep
rises in oil prices. Emerging markets, many of which are net importers of oil,
tend to be more sensitive to rising prices than some developed nations.
Performance: For the year ended October 31, 2000, the Fund's Class A shares,
excluding sales charges, provided a total return of 18.56% compared to a decline
in the MSCI EAFE Index of 2.66% for the same period.
Portfolio Strategy: Stock selection across a wide range of countries and sectors
contributed to the Fund's significant outperformance versus the benchmark in the
period. Despite overall market weakness in Japan for much of the period, the
Fund's holdings in this country were among the strongest performers.
Top-performing Japanese holdings included Kyocera (industrial components) and
Nippon Mitsubishi (energy sources). Generally, holdings in these countries also
had a positive influence on returns: Canada; Brazil; Germany; and France.
With respect to sectors, stock selection in the insurance, electrical &
electronics, energy sources, industrial components, and telecommunications
industries tended to boost Fund returns. Among the best performing holdings in
the period were Sun Life Financial (Canada -- financial services) and Alcatel
(France -- electrical & electronics). Holdings in the United Kingdom and in the
metals industry generally were the weakest performers during the period and
detracted from overall results.
The continued application of our company-by-company research and analysis
changed the composition of the Fund slightly during the period. We reduced or
completely eliminated positions in the insurance and electrical & electronics
industries that reached price levels consistent with our estimation of the
underlying business values. We redeployed assets to undervalued companies in the
food & household products and beverages & tobacco industries, lifted Fund
weightings in these areas. With respect to countries, we reduced exposure in
France, Germany, and Japan and increased the Fund's weighting on a
stock-by-stock basis in the United Kingdom.
Market Outlook: The sharp declines that characterized certain segments of
international markets in the period have no effect on the execution of our
proven approach. We continue to find and hold what we believe are world-class
businesses selling at bargain prices. Over the long term, we remain confident
the strengths of these undervalued companies will be recognized.
6
<PAGE>
Portfolio
Managers' Report PILGRIM INTERNATIONAL VALUE FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
3/6/95 10/95 10/96 10/97 10/98 10/99 10/31/00
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Pilgrim International Value Fund
Class A With Sales Charge 9,427 9,993 11,216 14,000 15,381 20,388 24,171
Pilgrim International Value Fund
Class A Without Sales Charge 10,000 10,600 11,897 14,851 16,316 21,627 25,640
MSCI EAFE Index 10,000 10,870 12,044 12,636 13,894 17,141 16,684
</TABLE>
Average Annual Total Returns
for the periods ended October 31, 2000
-----------------------------------------------------
Since inception Since Inception
of Class A and C of Class B
1 Year 5 Year 03/6/95 04/18/97
------ ------ ------- --------
Including Sales Charge:
Class A (1) 11.74% 17.91% 16.87% --
Class B (2) 12.69% -- -- 18.14%
Class C (3) 16.76% 18.53% 17.33% --
Excluding Sales Charge:
Class A 18.56% 19.32% 18.10% --
Class B 17.69% -- -- 18.71%
Class C 17.76% 18.53% 17.33% --
MSCI EAFE Index -2.66% 8.95% 9.45%(4) 9.23%(5)
Based on a $10,000 initial investment, the graph and table above illustrate the
total return of Pilgrim International Value Fund against the MSCI EAFE Index.
The Index has an inherent performance advantage over the Fund since it has no
cash in its portfolio, imposes no sales charges and incurs no operating
expenses. An investor cannot invest directly in an index. The Fund's performance
is shown both with and without the imposition of sales charges.
Total returns reflect the fact that the Investment Adviser has contractually
agreed to waive or defer its management fees and to pay other operating expenses
otherwise payable by the Fund, subject to possible later reimbursement during a
three-year period. Total returns would have been lower has there been no
deferral to the Fund.
Performance data represents past performance and is no assurance of future
results. Investment return and principal value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their original
cost.
This letter contains statements that may be "forward-looking" statements. Actual
results may differ materially from those projected in the "forward-looking"
statements.
The views expressed in this report reflect those of the portfolio manager, only
through the end of the period as stated on the cover. The portfolio manager's
views are subject to change at any time based on market and other conditions.
Portfolio holdings are subject to change daily.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5% and 3%,
respectively, for the 1 year and since inception returns.
(3) Reflects deduction of the Class C deferred sales charge of 1% for the 1
year return.
(4) Since inception performance for the index is shown from 03/01/95.
(5) Since inception performance for the index is shown from 05/01/97.
Principal Risk Factor(s): In exchange for higher growth potential, investing in
stocks of smaller companies may entail greater price volatility than those of
larger companies. Price volatility and other risks that accompany an investment
in foreign equities. Sensitive to currency exchange rates, international
political and economic conditions and other risks that affect foreign
securities. The risks of foreign investing are generally intensified for
investing in emerging markets.
See accompanying index descriptions on page 34.
7
<PAGE>
-------------
International
Equity Funds
-------------
Portfolio
PILGRIM INTERNATIONAL FUND Managers' Report
--------------------------------------------------------------------------------
Portfolio Management Team: Philip A. Schwartz, Portfolio Manager; Richard T.
Saler, Portfolio Manager.
Goal: The Fund seeks to invest at least 65% of its assets in equity securities
of issuers located in countries outside the U.S. The Fund generally invests at
least 75% of its assets in common and preferred stocks, warrants and convertible
securities. The Fund may invest in companies located in countries with emerging
securities markets when the portfolio managers believe they present attractive
investment opportunities. The portfolio managers primarily use "bottom-up"
fundamental analysis to identify stocks which they believe offer good value
relative to their peers in the same industry, sector or region. They also use
"top-down" analysis to identify important themes or issues which may affect the
investment environment in regions or sectors, and to estimate regional market
risks. The portfolio managers focus on various factors, including valuation of
the companies, catalysts to stock price appreciation, quality of management and
financial measures.
Market Overview: Structural reform and technology themes were among the positive
factors driving foreign markets higher in the first six months of the fiscal
year ended October 31, 2000. In the fiscal second half, concerns over rising oil
prices, higher interest rates and a declining Euro caused a correction in
technology shares. Sentiment was further dampened by earnings disappointments in
a wide range of industries, and questions about the future strength of economic
growth. The MSCI EAFE Index declined 2.66% in the period, with a Dollar
translation effect accounting for much of the decline. European markets declined
as the European Central Bank raised interest rates in order to bolster the Euro.
Technology heavy markets, such as Sweden and Finland, were especially weak later
in the fiscal year after posting strong gains in the first half. The MSCI Japan
Index fell by 7.60% during the year, relating to concerns over the
sustainability of economic recovery. Many leading stocks in Japan also declined
in tandem with the global technology correction.
Performance: For the year ended October 31, 2000, the Fund's class A shares,
excluding sales charges, provided a total return of 10.53% versus a decline in
the MSCI EAFE Index of 2.66% for the same period.
Portfolio Strategy: Contributing to the positive relative performance were a
number of factors. In the fiscal first half, smaller and mid-sized technology
and telecom companies offered better value relative to more established names
and delivered strong gains. The fund also maintained positions in out of favor
consumer non-durables, such as Diageo, Novartis and Swedish Match. These latter
positions were especially helpful as money rotated out of technology and back
into "old economy" sectors. The Fund also benefited from a low weighting in
large telecom companies in the second half. Overall, the decline in technology
stocks not only ended the easy financing of questionable companies, but also
re-focused the market's attention to companies with higher earnings visibility.
Also helping performance was a higher weighting in energy stocks.
Market Outlook: In the year going forward, the developing global economic
slowdown is at risk of further adversely affecting earnings. The Fund will
emphasize companies with higher visibility, and seek to reduce holdings with
potential earnings disappointments. The managers will, however, carefully seek
opportunities in telecom and technology sectors as value begins to emerge. In
the medium and longer-term international markets remain attractive. The positive
themes of restructuring and the growing equity culture abroad are still very
much in place, and should continue to spur earnings growth.
8
<PAGE>
Portfolio
Managers' Report PILGRIM INTERNATIONAL FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1/3/94 10/94 10/95 10/96 10/97 10/98 10/99 10/31/00
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Pilgrim International Fund
Class A With Sales Charge 9,425 10,603 10,113 11,546 12,395 13,495 17,410 19,242
Pilgrim International Fund
Class A Without Sales Charge 10,000 11,250 10,730 12,251 13,151 14,318 18,471 20,416
MSCI EAFE Index 10,000 11,276 11,268 12,485 13,100 14,403 17,769 17,295
</TABLE>
Average Annual Total Returns
for the periods ended October 31, 2000
-----------------------------------------
Since Inception
1 Year 5 Year 01/03/94
------ ------ --------
Including Sales Charge:
Class A (1) 4.20% 12.39% 10.06%
Excluding Sales Charge:
Class A 10.53% 13.73% 11.02%
MSCI EAFE Index -2.66% 8.95% 8.35%(2)
Based on a $10,000 initial investment, the graph and table above illustrate the
total return of Pilgrim International Fund against the MSCI EAFE Index. The
Index has an inherent performance advantage over the Fund since it has no cash
in its portfolio, imposes no sales charges and incurs no operating expenses. An
investor cannot invest directly in an index. The Fund's performance is shown
both with and without the imposition of sales charges.
Total returns reflect the fact that the Investment Adviser has contractually
agreed to waive or defer its management fees and to pay other operating expenses
otherwise payable by the Fund, subject to possible later reimbursement during a
three-year period. Total returns would have been lower had there been no
deferral to the Fund.
Performance data represents past performance and is no assurance of future
results. Investment return and principal value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their original
cost.
This letter contains statements that may be "forward-looking" statements. Actual
results may differ materially from those projected in the "forward-looking"
statements.
The views expressed in this report reflect those of the portfolio manager, only
through the end of the period as stated on the cover. The portfolio manager's
views are subject to change at any time based on market and other conditions.
Portfolio holdings are subject to change daily.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%.
(2) Since inception performance for the index is shown from 01/01/94.
Principal Risk Factor(s): In exchange for higher growth potential, investing in
stocks of smaller companies may entail greater price volatility than those of
larger companies. Price volatility and other risks that accompany an investment
in growth-oriented foreign equities. Sensitive to currency exchange rates,
international political and economic conditions and other risks that affect
foreign securities. The risks of foreign investing are generally intensified for
investing in emerging markets.
See accompanying index descriptions on page 34.
9
<PAGE>
-------------
International
Equity Funds
-------------
PILGRIM INTERNATIONAL Portfolio
CORE GROWTH FUND Managers' Report
--------------------------------------------------------------------------------
Portfolio Management Team: Philip A. Schwartz, Portfolio Manager; Richard T.
Saler, Portfolio Manager.
Goal: The Fund seeks to invest at least 65% of its assets in equity securities
of issuers located in countries outside the U.S. The Fund generally invests at
least 75% of its assets in common and preferred stocks, warrants and convertible
securities. The Fund may invest in companies located in countries with emerging
securities markets when the portfolio managers believe they present attractive
investment opportunities. The portfolio managers primarily use a "bottom-up"
fundamental analysis to identify stocks which they believe offer good value
relative to their peers in the same industry sector or region. The portfolio
managers will invest at least 65% of the Fund's net assets in companies which,
based upon a fundamental analysis of a company's earnings prospects, they
believe will experience faster earnings per share growth than that of other
companies located in one or more of the same market, sector or industry. They
also use "top-down" analysis to identify important themes or issues which may
affect the investment environment in regions or sectors, and to estimate
regional market risks. The portfolio managers focus on various factors,
including valuation of the companies, catalysts to stock price appreciation,
quality of management and financial measures.
Market Overview: Structural reform and technology themes were among the positive
factors driving foreign markets higher in the first six months of the fiscal
year ended October 31, 2000. In the fiscal second half, concerns over rising oil
prices, higher interest rates and a declining Euro caused for a correction in
technology shares. Sentiment was further dampened by earnings disappointments in
a wide range of industries, and questions about the future strength of economic
growth. The MSCI EAFE Index declined 2.66% in the period, with a Dollar
translation effect accounting for much of the decline. European markets declined
as the European Central Bank raised interest rates in order to bolster the Euro.
Technology heavy markets, such as Sweden and Finland, were especially weak later
in the fiscal year after posting strong gains in the first half. The MSCI Japan
Index fell by 7.60% during the year, relating to concerns over the
sustainability of economic recovery. Many leading stocks in Japan also declined
in tandem with the global technology correction.
Performance: For the year ended October 31, 2000, the Fund's Class A shares,
excluding sales charges, provided a total return of 3.51% versus a decline in
the MSCI EAFE Index of 2.66% for the same period.
Portfolio Strategy: Contributing to positive relative performance was a strong
showing by several leading technology companies in the first half of the fiscal
year. Nokia, Ericcson and Nortel Networks were up enough early in the year to
soften the effects of the technology correction later in the year. The Fund
benefited from a relatively large weighting in energy shares as well, and an
underweight position in telecom services. Overall, the decline in technology
stocks not only ended the easy financing of questionable companies, but also
re-focused the market's attention to companies with higher earnings visibility.
Market Outlook: In the year going forward, the developing global economic
slowdown is at risk of further adversely affecting earnings. The Fund will
emphasize companies with higher visibility, and seek to reduce holdings with
potential earnings disappointments. The managers will, however, carefully seek
opportunities in telecom and technology sectors as value begins to emerge. In
the medium and longer-term international markets remain attractive. The positive
themes of restructuring and the growing equity culture abroad are still very
much in place, and should continue to spur earnings growth.
10
<PAGE>
Portfolio PILGRIM INTERNATIONAL
Managers' Report CORE GROWTH FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
2/28/97 10/97 10/98 10/99 10/31/00
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Pilgrim International Core Growth Fund
Class A With Sales Charge 9,427 11,139 12,060 16,598 17,181
Pilgrim International Core Growth Fund
Class A Without Sales Charge 10,000 11,816 12,793 17,607 18,225
MSCI EAFE Index 10,000 10,412 11,448 14,124 13,747
</TABLE>
Average Annual Total Returns
for the periods ended October 31, 2000
--------------------------------------
Since Inception
1 Year 02/28/97
------ --------
Including Sales Charge:
Class A (1) -2.45% 15.89%
Class B (2) -2.27% 16.50%
Class C (3) 1.67% 16.89%
Excluding Sales Charge
Class A 3.51% 17.77%
Class B 2.61% 17.04%
Class C 2.65% 16.89%
MSCI EAFE Index -2.66% 9.07%(4)
Based on a $10,000 initial investment, the graph and table above illustrate the
total return of Pilgrim International Core Growth Fund against the MSCI EAFE
Index. The Index has an inherent performance advantage over the Fund since it
has no cash in its portfolio, imposes no sales charges and incurs no operating
expenses. An investor cannot invest directly in an index. The Fund's performance
is shown both with and without the imposition of sales charges.
Total returns reflect the fact that the Investment Adviser has contractually
agreed to waive or defer its management fee and to pay other operating expenses
otherwise payable by the Fund, subject to possible later reimbursement during a
three-year period. Total returns would have been lower had there been no
deferral to the Fund.
Performance data represents past performance and is no assurance of future
results. Investment return and principal value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their original
cost.
This letter contains statements that may be "forward-looking" statements. Actual
results may differ materially from those projected in the "forward-looking"
statements.
The views expressed in this report reflect those of the portfolio manager, only
through the end of the period as stated on the cover. The portfolio manager's
views are subject to change at any time based on market and other conditions.
Portfolio holdings are subject to change daily.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5% and 3%,
respectively, for the 1 year and since inception returns.
(3) Reflects deduction of the Class C deferred sales charge of 1.00% for 1 year
return.
(4) Since inception performance for the index is shown from 03/01/97.
Principal Risk Factor(s): Price volatility and other risks that accompany an
investment in growth-oriented foreign equities. Sensitive to currency exchange
rates, international political and economic conditions and other risks that
affect foreign securities. Risks of foreign investing are generally intensified
for investments in emerging markets.
See accompanying index descriptions on page 34.
11
<PAGE>
-------------
International
Equity Funds
-------------
PILGRIM INTERNATIONAL Portfolio
SMALLCAP GROWTH FUND Managers' Report
--------------------------------------------------------------------------------
Portfolio Management Team: Catherine Somhegyi, Chief Investment Officer,Loretta
J. Morris, Partner, Portfolio Manager; Randall S. Kahn, CFA, Portfolio Manager;
Lawrence S. Speidell, CFA, Partner, Director of Global/Systematic Portfolio
Management and Research; Pedro V. Marcal, Partner, Portfolio Manager; Ernesto
Ramos, Ph.D., Portfolio Manager; Jason Campbell, Portfolio Manager; Jessica
Goncalves, Portfolio Manager; Melisa Grigolite, Portfolio Manager; Christopher
Angioletti, Portfolio Manager; Jon Borchardt, Investment Analyst; John
Casarietti, Investment Analyst; Rebecca Hagstrom, CFA, Investment Analyst;
Christopher Herrera, Investment Analyst; Theodora Jamison, Investment Analyst;
David Lopez, Investment Analyst; Eric Sagmeister, Investment Analyst; Andrew
Parmet, Investment Analyst; Jacob Pozharny, Investment Analyst; Rolf Schild,
Investment Analyst; Nicholas-Applegate, Capital Management.
Goal: The Fund seeks to maximize long-term capital appreciation through
investing primarily in companies located outside the United States corresponding
to the lower 25% market capitalization within each country.
Market Overview: International small-cap stocks registered declines for the four
months ended October 31, 2000. A variety of factors sent equity prices lower
including higher energy prices, rising interest rates in Europe, a slowing US
economy and continuing structural problems in Japan.
In Japan, positive developments, such as the continued rise in the country's
industrial production and increasing job offers, were overshadowed by worries
over the impact of a United States-led global economic slowdown of Asian
economies, which rely heavily on exports. Japan is one of Asia's top exporters.
The European Central Bank (ECB), which sets monetary policy for the 11-nation
euro zone, raised short-term interest rates by one-quarter point in early
October. The move was aimed at stifling inflationary pressures that are
exacerbated by a weak euro and high oil prices. Rising interest rates make it
more expensive for consumers and companies to borrow money, which tends to curb
spending and ease inflationary pressures. The Salomon EPAC EMI Index dropped
11.00% for the four month period ended October 31, 2000.
Performance: For the year ended October 31, 2000, the Fund's Class A shares,
excluding sales charge, provided a total return of 27.62% versus a decline of
2.17% for the Salomon EPAC EMI Index.
Portfolio Specifics: Stock selection in the technology, energy and healthcare
services sectors had a positive contribution to performance. On the country
level, stock selection and underweighting in Japan relative to the benchmark
helped returns, as did investments in Switzerland. Holdings in the United
Kingdom and Germany were negative contributors to performance.
The Fund also had a significant weighting in Canada, where the benchmark had no
exposure. We are finding particularly exciting opportunities on a
company-by-company basis among energy companies, such as Anderson Exploration
and Petro-Canada.
Market Outlook: We remain optimistic about the investment potential for
international small cap stocks due to many positive factors, including:
* Continued advances in technology and structural reforms that are reshaping
the world's business landscape and creating opportunities for smaller
companies.
* The emergence of stock markets such as Neuer Markt in Germany, Nouveau
Marche in France, Mothers Exchange in Japan, and Nasdaq Japan which provide
new avenues for investors to gain access to smaller, high-growth companies
outside the United States.
In this environment, we are confident that by adhering to our strict investment
philosophy we will seek to continue to identify international companies with
superior growth prospects.
12
<PAGE>
Portfolio PILGRIM INTERNATIONAL
Managers' Report SMALLCAP GROWTH FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
8/31/94 10/94 10/95 10/96 10/97 10/98 10/99 10/31/00
------ ----- ----- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Pilgrim International SmallCap Growth Fund
Class A With Sales Charge 9,427 9,374 9,064 10,556 12,882 14,898 26,255 33,506
Pilgrim International SmallCap Growth Fund
Class A Without Sales Charge 10,000 9,944 9,615 11,198 13,666 15,803 27,851 35,543
Salomon EPAC EMI Index 10,000 9,882 9,398 10,529 10,048 10,161 11,994 11,734
</TABLE>
Average Annual Total Returns
for the periods ended October 31, 2000
----------------------------------------------------
Since Inception Since Inception
of Class B of Class A & C
1 Year 5 Year 5/31/95 08/31/94
------ ------ ------- --------
Including Sales Charge:
Class A (1) 20.29% 28.36% -- 21.65%
Class B (2) 21.98% 28.98% 26.80% --
Class C (3) 25.92% 29.08% -- 21.93%
Excluding Sales Charge:
Class A 27.62% 29.88% -- 22.82%
Class B 26.98% 29.12% 26.87% --
Class C 26.92% 29.08% -- 21.93%
Salomon EPAC EMI Index -2.17% 4.54% 4.12%(4) 2.63%(5)
Based on a $10,000 initial investment, the graph and table above illustrate the
total return of Pilgrim International SmallCap Growth Fund against the Salomon
EPAC EMI Index. The Index has an inherent performance advantage over the Fund
since it has no cash in its portfolio, imposes no sales charges and incurs no
operating expenses. An investor cannot invest directly in an index. The Fund's
performance is shown both with and without the imposition of sales charges.
Total returns reflect the fact that the Investment Adviser has contractually
agreed to waive or defer its management fee and to pay other operating expenses
otherwise payable by the Fund, subject to possible later reimbursement during a
three-year period. Total returns would have been lower had there been no
deferral to the Fund.
Performance data represents past performance and is no assurance of future
results. Investment return and principal value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their original
cost.
This letter contains statements that may be "forward-looking" statements. Actual
results may differ materially from those projected in the "forward-looking"
statements.
The views expressed in this report reflect those of the portfolio manager, only
through the end of the period as stated on the cover. The portfolio manager's
views are subject to change at any time based on market and other conditions.
Portfolio holdings are subject to change daily.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5%, 2% and 2%,
respectively, for the 1 year, 5 year and since inception returns.
(3) Reflects deduction of the Class C deferred sales charge of 1.00% for the 1
year return.
(4) Since inception performance for the index is shown from 06/01/95.
(5) Since inception performance for the index is shown from 09/01/94.
Principal Risk Factor(s): In exchange for higher growth potential, investing in
stocks of smaller companies may entail greater price volatility than investing
in larger companies. Price volatility and other risks that accompany an
investment in growth-oriented foreign equities. Sensitive to currency exchange
rates, international political and economic conditions and other risks that
affect foreign securities. Risks of foreign investing are generally intensified
for investments in emerging markets.
See accompanying index descriptions on page 34.
13
<PAGE>
-------------
International
Equity Funds
-------------
Portfolio
PILGRIM EMERGING MARKETS VALUE FUND Managers' Report
--------------------------------------------------------------------------------
Portfolio Management Team: Charles Brandes, CFA, Managing Partner; Ian Sunder,
CFA, Portfolio Manager; Brandes Investment Partners, L.P.
Goal: The Fund seeks to maximize long-term capital appreciation by investing
primarily in companies located in countries with emerging markets, including
companies that may be smaller and lesser-known. The portfolio managers apply a
company-by-company search for businesses that have determinable value and which,
in their estimation, are currently priced below their actual value. Undervalued
businesses may translate into undervalued stocks, providing what they believe to
be an above-average chance for profit.
Market Overview: Similar to developed overseas markets, stocks in emerging
countries surged during the first few months of the period. During the five
months ended March 31, 2000, the MSCI EMF Index declined 27.50%. Growth stocks,
extending on gains from recent years, continued to hold investor favor. Value
stocks were largely overlooked.
During the second quarter, a variety of developments dragged emerging equity
markets lower including fears over higher interest rates, currency concerns,
political instability, and slumping technology stocks. Investors reevaluated the
growth prospects and valuations associated with many issues that contributed to
markets' solid advances. As a result, they shed high-multiple growth stocks,
especially in the technology sector, and refocused on more attractively priced
issues. While steep declines for tech stocks dragged the Index down, value
stocks showed their mettle.
Later in the period, soaring oil prices proved a significant detriment to stocks
in emerging markets. Many emerging countries, as net importers of oil, faced
heavy constraints on economic output due to higher fuel costs. In addition,
expectations that a similar drag on economies worldwide would crimp imports
drained investor optimism, as many emerging nations are export-dependent.
Later in the period, as worries over corporate profitability and economic
slowing surfaced, higher-multiple stocks continued to tumble. From April 1, 2000
to the end of the period, the MSCI EMF fell 27.50%.
Performance: For the year ended October 31, 2000, the Fund's Class A shares,
excluding sales charges, gained 0.60% compared to a decline in the MSCI EMF
Index of 8.81% for the same period. During the five months ended March 31, 2000,
the MSCI EMF Index declined 27.50%. Growth stocks, extending on gains from
recent years, continued to hold investor favor. Value stocks were largely
overlooked.
Portfolio Strategy: Stock selection, especially in Brazil, was the primary
reason the Fund outperformed the benchmark by such a significant margin during
the period. Among the best-performing holdings in Brazil were Companhia de
Bebidas das Americas (beverages & tobacco), Petroleo Brasileiro (energy
sources), and Telecomunicacoes de Sao Paulo (telecommunications). Generally,
holdings in the following countries also contributed to strong returns: Mexico,
Russia, Turkey, and Hungary.
Stock selection in the following sectors also had a positive influence on
returns in the period: energy sources, utilities, electrical & electronic, and
telecommunications. Among the better-performing holdings in these industries
were Telefonica de Argentina (Argentina -- telecommunications), Shandong Huaneng
Power (China -- utilities), and Solid Group (Philippines -- electrical &
electronic). Declines among holdings in Hong Kong, India, and South Africa, as
well as within the food & household products, multi-industry, and textile
industries negatively affected results.
The continued application of our bottom-up stock selection resulted in changes
in the Fund's composition during the period. We reduced exposure in a number of
industries and increased weighting in the following sectors on a stock-specific
basis: utilities; beverages & tobacco; and energy sources. With respect to
countries, we trimmed exposure in the Philippines and India and increased
weighting in Brazil and China.
Market Outlook: We believe the developments that contributed to declines in
emerging markets over the short term will have little long-term effect on the
fundamental strengths of portfolio holdings. We remain confident that the
portfolios' strengths will be recognized over the long term. In addition,
evidence of continued emphasis on enhancing shareholder equity, privatization,
and reduced barriers to trade among emerging markets create an environment
conducive to long-term capital appreciation.
14
<PAGE>
Portfolio
Managers' Report PILGRIM EMERGING MARKETS VALUE FUND
--------------------------------------------------------------------------------
1/1/98 10/98 10/99 10/31/00
------ ----- ------ ------
Pilgrim Emerging Markets Value Fund
Class A With Sales Charge 9,425 7,248 10,254 10,316
Pilgrim Emerging Markets Value Fund
Class A Without Sales Charge 10,000 7,690 10,880 10,945
MSCI EMF Index 10,000 6,994 10,115 9,224
Average Annual Returns
for the periods ended October 31, 2000
--------------------------------------
Since Inception
1 Year 01/01/98
------ --------
Including Sales Charge:
Class A(1) -5.17% 1.10%
Class B(2) -4.92% 1.49%
Class C(3) -1.09% 2.45%
Excluding Sales charge
Class A 0.60% 3.24%
Class B -0.12% 2.52%
Class C -0.09% 2.45%
MSCI EMF Index -8.81% -2.81%
Based on a $10,000 initial investment, the graph and table above illustrate the
total return of Pilgrim Emerging Markets Value Fund against the MSCI EMF Index.
The Index has an inherent performance advantage over the Fund since it has no
cash in its portfolio, imposes no sales charges and incurs no operating
expenses. An investor cannot invest directly in an index. The Fund's performance
is shown both with and without the imposition of sales charges.
Performance data represents past performance and is no assurance of future
results. Investment return and principal value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their original
cost.
This letter contains statements that may be "forward-looking" statements. Actual
results may differ materially from those projected in the "forward-looking"
statements.
The views expressed in this report reflect those of the portfolio manager, only
through the end of the period as stated on the cover. The portfolio manager's
views are subject to change at any time based on market and other conditions.
Portfolio holdings are subject to change daily.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5% and 4%,
respectively, for the 1 year and since inception returns.
(3) Reflects deduction of a deferred sales charge of 1% for the 1 year return.
Principal Risk Factor(s): Price volatility and other risks that accompany an
investment in equities from emerging countries. Sensitive to currency exchange
rates, international political and economic conditions and other risks that
affect foreign securities.
See accompanying index descriptions on page 34.
15
<PAGE>
-------------
International
Equity Funds
-------------
Portfolio
PILGRIM EMERGING COUNTRIES FUND Managers' Report
--------------------------------------------------------------------------------
Portfolio Management Team: Richard Saler, Portfolio Manager; Philip Schwartz,
Portfolio Manager
Goal: The Fund seeks to invest at least 65% of its assets in securities of
issues located in at least three countries with emerging securities markets. In
selecting stocks, the Advisor uses a "bottom-up" fundamental analysis to
indentify companies which it believes have good earnings growth prospects and
that can be bought at a price which seems reasonable.
Market Overview: It was a difficult year for emerging market equities. The MSCI
Emerging Market Free Index declined 8.81%. Among the worst performing markets
were Indonesia (-57%), Philippines (-49%), and Thailand (-43%). Latin America
fared much better than Asia as Brazil gained 39% and Mexico advanced 18%. Part
of the dismal returns in Asia can be attributed to weak currencies, political
unrest, and a slowing of economic reform. Latin America benefitted from a strong
US economy and progress on economic and political reform.
Performance: For the year ended October, 31, 2000, the Fund's Class A shares
excluding sales charges, declined 0.55% versus a decline of 8.81% for the MSCI
EMF Index.
Portfolio Specifics: Performance was aided by a relatively large weighing in
Latin America. However, poorly performing technology and telecommunication
shares pulled returns lower. Defensive stocks such as Israel's Teva
Pharmaceutical were among the highest returning stocks in the portfolio. Other
strong performers included Mexico's Grupo Televisa and Tubos de Acero de Mexico.
Market Outlook: After a long period of underperformance, emerging markets appear
to offer excellent long term value. Downside risk also appears limited due to
cheap currencies and a lack of speculative excess in most developing economies.
The major risk to emerging market stocks would be a further spike in oil prices
or a hard US economic landing. Long term investors may want to ignore this short
term noise and add to quality companies which are now selling at attractive
price levels. Asian markets such as Korea and Taiwan look particularly inviting
after the steep declines suffered by many leading global companies.
16
<PAGE>
Portfolio
Managers' Report PILGRIM EMERGING COUNTRIES FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
11/28/94 10/95 10/96 10/97 10/98 10/99 10/31/00
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Pilgrim Emerging Countries Fund
Class A With Sales Charge 9,427 9,617 11,641 13,267 9,825 13,637 13,562
Pilgrim Emerging Countries Fund
Class A Without Sales Charge 10,000 10,202 12,348 14,074 10,422 14,466 14,387
MSCI EMF Index 10,000 8,501 9,052 8,284 5,717 9,010 7,540
</TABLE>
Average Annual Total Returns
for the periods ended October 31, 2000
----------------------------------------------------
Since Inception Since Inception
of Class A and C of Class B
1 Year 5 Year 11/28/94 05/31/95
------ ------ -------- --------
Including Sales Charge:
Class A (1) -6.26% 5.85% 5.27% --
Class B (2) -6.14% 6.27% -- 6.23%
Class C (3) -2.18% 6.58% 5.42% --
Excluding Sales Charge:
Class A -0.55% 7.12% 6.33% --
Class B -1.20% 6.58% -- 6.37%
Class C -1.19% 6.58% 5.42% --
MSCI EMF Index -8.81% -2.37% -4.66%(4) -2.95%(5)
Based on a $10,000 initial investment, the graph and table above illustrate the
total return of Pilgrim Emerging Countries Fund against the MSCI EMF Index. The
Index has an inherent performance advantage over the Fund since it has no cash
in its portfolio, imposes no sales charges and incurs no operating expenses. An
investor cannot invest directly in an index. The Fund's performance is shown
both with and without the imposition of sales charges.
Total returns reflect the fact that the Investment Adviser has contractually
agreed to waive or defer its management fees and to pay other operating expenses
otherwise payable by the Fund, subject to possible later reimbursement during a
three-year period. Total returns would have been lower had there been no
deferral to the Fund.
Performance data represents past performance and is no assurance of future
results. Investment return and principal value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their original
cost.
This letter contains statements that may be "forward-looking" statements. Actual
results may differ materially from those projected in the "forward-looking"
statements.
The views expressed in this report reflect those of the portfolio manager, only
through the end of the period as stated on the cover. The portfolio manager's
views are subject to change at any time based on market and other conditions.
Portfolio holdings are subject to change daily.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5%, 2% and 2%,
respectively, for the 1 year, 5 year and since inception returns.
(3) Reflects deduction of the Class C deferred sales charge of 1.00% for the 1
year return.
(4) Since inception performance for the index is shown from 12/01/94.
(5) Since inception performance for the index is shown from 06/01/95.
Principal Risk Factor(s): Sensitive to currency exchange rates, international
political and economic conditions and other risks that affect foreign
securities. Risks of foreign investing are generally intensified for investments
in emerging markets.
See accompanying index descriptions on page 34.
17
<PAGE>
-------------
International
Equity Funds
-------------
PILGRIM WORLDWIDE Portfolio
EMERGING MARKETS FUND Managers' Report
--------------------------------------------------------------------------------
Portfolio Management Team: Richard Saler, Portfolio Manager; Philip Schwartz,
C.F.A., Portfolio Manager
Goal: The Fund seeks to invest at least 65% of its assets in securities of
issues located in at least three countries with emerging securities markets. In
selecting stocks, the Advisor uses a "bottom-up" fundamental analysis to
indentify companies which it believes have good earnings growth prospects and
that can be bought at a price which seems reasonable.
Market Overview: It was a difficult year for emerging market equities.The MSCI
EAFE Index declined 2.66%. Among the worst performing markets were Indonesia
(-57%), Philippines (-49%), and Thailand (-43%). Latin America fared much better
than Asia as Brazil gained 39% and Mexico advanced 18%. Part of the dismal
returns in Asia can be attributed to weak currencies, political unrest, and a
slowing of economic reform. Latin America benefitted from a strong US economy
and progress on economic and political reform.
Performance: For one year ended October, 31, 2000, the Fund's Class A shares,
exluding sales charges, declined 5.10% versus a decline of 2.66% for the MSCI
EAFE Index.
Portfolio Specifics: Performance was aided by a relatively large weightings in
Technoloy stocks which enjoyed sharp gains up until March of 2000. Much of the
large outperformance was lost as technology stocks suffered large declines over
the last six months. Especially hard hit in the second half were smaller
companies in South Korea and India which had previously enjoyed spectacular
gains.
Market Outlook: After a long period of underperformance emerging markets appear
to offer excellent long term value. Downside risk also appears limited due to
cheap currencies and a lack of speculative excess in most developing economies.
The major risk to emerging market stocks would be a further spike in oil prices
and or a hard US economic landing. Long term investors may want to ignore this
short term noise and add to quality companies which are now selling at
attractive price levels. Asian markets such as Korea and Taiwan look
particularly inviting after the steep declines suffered by many global leading
companies.
18
<PAGE>
Portfolio PILGRIM WORLDWIDE
Managers' Report EMERGING MARKETS FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
10/31/90 10/91 10/92 10/93 10/94 10/95 10/96 10/97 10/98 10/99 10/31/00
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pilgrim Worldwide Emerging Markets Fund
Class A With Sales Charge 9,428 12,509 13,231 17,883 21,315 17,297 18,293 17,311 11,210 15,338 14,556
Pilgrim Worldwide Emerging Markets Fund
Class A Without Sales Charge 10,000 13,268 14,033 18,968 22,608 18,346 19,402 18,361 11,890 16,269 15,440
MSCI EAFE Index 10,000 10,732 9,347 12,887 14,225 14,216 15,751 16,526 18,171 22,417 21,820
</TABLE>
Average Annual Total Returns
for the periods ended October 31, 2000
--------------------------------------
1 Year 5 Years 10 Years
------ ------- --------
Including Sales Charge:
Class A (1) -10.53% -4.53% 3.83%
Excluding Sales Charge:
Class A -5.10% -3.39% 4.44%
MSCI EAFE Index -2.66% 8.95% 8.11%
Based on a $10,000 initial investment, the graph and table above illustrate the
total return of Pilgrim Worldwide Emerging Markets Fund against the MSCI EAFE
Index. The Index has an inherent performance advantage over the Fund since it
has no cash in its portfolio, imposes no sales charges and incurs no operating
expenses. An investor cannot invest directly in an index. The Fund's performance
is shown both with and without the imposition of sales charges.
Total returns reflect the fact that the Investment Adviser has contractually
agreed to waive or defer its management fee and to pay other operating expenses
otherwise payable by the Fund, subject to possible later reimbursement during a
three-year period. Total returns would have been lower had there been no
deferral to the Fund.
Performance data represents past performance and is no assurance of future
results. Investment return and principal value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their original
cost.
This letter contains statements that may be "forward-looking" statements. Actual
results may differ materially from those projected in the "forward-looking"
statements.
The views expressed in this report reflect those of the portfolio manager, only
through the end of the period as stated on the cover. The portfolio manager's
views are subject to change at any time based on market and other conditions.
Portfolio holdings are subject to change daily.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%.
Principal Risk Factor(s): Sensitive to currency exchange rates, international
political and economic conditions and other risks that affect foreign
securities. Risks of foreign investing are generally intensified for investments
in emerging markets.
See accompanying index descriptions on page 34.
19
<PAGE>
-------------
International
Equity Funds
-------------
Portfolio
Managers' Report
PILGRIM GLOBAL TECHNOLOGY FUND
--------------------------------------------------------------------------------
Portfolio Management Team: Richard Saler, Portfolio Manager; Philip Schwartz,
C.F.A., Portfolio Manager
Goal: The Fund seeks long term growth of capital by investing at least 80% of
its total assets in equity equivalents of technology or information
infrastructure related companies.
Market Overview: Technology stocks have taken investors for a roller coaster
ride over the last year. After enjoying spectacular gains in the calender fourth
quarter of 1999 and into the first quarter of 2000, technology stocks have since
declined sharply. Investors became overly optimistic on even the most
speculative business plans and as valuations soared to the sky a sharp fall
became inevitable.
Performance: The Fund has not been in existence for one year. Since inception
(12/27/99) through October 31, 2000, the Fund's Class A shares, excluding sales
charges declined 21.40%. The PSE Technology Index gained 4.72% for the period
ended October 31, 2000.
Portfolio Specifics: A heavy weighting in internet related companies along with
a high exposure to smaller companies in Japan, South Korea, and India
contributed the bulk of the negative returns. Larger more established companies
such as French telecom supplier Alcatel and Japan's Sony were strong performers.
Market Outlook: Given the sharp fall in technology equity prices the long term
outlook has improved greatly. Those companies which can execute and deliver
strong earnings growth are now priced to deliver attractive long term
returns.The risk remains high however due to a slowdown in global growth.
Emphasis must be placed on financially sound companies most likely to deliver
high growth in sales and profits. The internet, mobile telephone and broadband
applications will continue to offer exciting long term investment opportunities.
20
<PAGE>
Portfolio
Managers' Report PILGRIM GLOBAL TECHNOLOGY FUND
--------------------------------------------------------------------------------
12/27/99 10/31/00
------ ------
Pilgrim Global Technology Fund Class A With Sales Charge 9,425 7,408
Pilgrim Global Technology Fund Class A Without Sales Charge 10,000 7,860
PSE Technology Index 10,000 10,472
Total Returns
Since Inception
12/27/99
---------------
Including Sales Charge:
Class A (1) -25.92%
Excluding Sales Charge:
Class A -21.40%
PSE Technology Index 4.72%
Based on a $10,000 initial investment, the graph and table above illustrate the
total return of Pilgrim Global Technology Fund against the PSE Technology Index.
The Index has an inherent performance advantage over the Fund since it has no
cash in its portfolio, imposes no sales charges and incurs no operating
expenses. An investor cannot invest directly in an index. The Fund's performance
is shown both with and without the imposition of sales charges.
Total returns reflect the fact that the Investment Adviser has contractually
agreed to waive or defer its management fee and to pay other operating expenses
otherwise payable by the Fund, subject to possible later reimbursement during a
three-year period. Total returns would have been lower had there been no
deferral to the Fund.
Performance data represents past performance and is no assurance of future
results. Investment return and principal value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their original
cost.
This letter contains statements that may be "forward-looking" statements. Actual
results may differ materially from those projected in the "forward-looking"
statements.
The views expressed in this report reflect those of the portfolio manager, only
through the end of the period as stated on the cover. The portfolio manager's
views are subject to change at any time based on market and other conditions.
Portfolio holdings are subject to change daily.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%.
Principal Risk Factor(s): International investing involves special risks
considerations including currency fluctuations, lower liquidity, political and
economic uncertainties and differences in accounting standards. The Fund
concentrates its investments in information technology-related companies and
will tend to experience greater volatility than funds with more diversified
portfolios.
See accompanying index descriptions on page 34.
21
<PAGE>
-------------
International
Equity Funds
-------------
Portfolio
PILGRIM ASIA-PACIFIC EQUITY FUND Managers' Report
--------------------------------------------------------------------------------
Portfolio Management Team: David Stuart, Regional CIO, Asia Pacific; Marcus
Pakenham, Director; Sam Lau, Director; Richard Wong, Associate Director; Leilani
Lam, Associate Director; Simon Yap, Associate Director; Seng-Keong Wan, Senior
Investment Manager; Vernon Yu, Senior Investment Manager; Losa Mak, Investment
Manager; Krista Yue, Investment Manager; Tytus Michalski, Investment Manager;
Martha Wang, Executive; HSBC Asset Management (Americas), Inc., HSBC Asset
Management (Hong Kong) Limited and HSBC Asset Management (Europe) Limited.
Goal: The Fund seeks long-term capital appreciation by investing in equity
securities listed on stock exchanges in the Asia-Pacific region or issued by
companies based in this region.
Market Overview: For the period ended October 31, 2000, Asian markets were weak
with the exception of Hong Kong and Malaysia. Rallies in the US and NASDAQ
helped equities performances before 2000, but concerns on interest rate hikes
and high valuations of tech companies erased much of the gains subsequently.
Higher oil prices and profit warnings of tech companies in the US and Europe did
not help. Hong Kong (+12.36%) performed well due to its safe haven status in
addition to positive economic news, China's WTO entry, and hope of peaking
interest rates. Massive fund raising activities and bearish property market
outlook undermined the market. Malaysia edged up 1.28% on improving fundamentals
and MSCI's re-inclusion. Profit taking took place on market's outperformance and
amid uncertainties over bank mergers and slow corporate restructuring. The index
was held up by local funds. Singapore eased 2.69% as funds moved out of the
country on MSCI changes. Allowing foreign strategic investment in Singtel was
positive. Political uncertainties clouded Taiwan, Thailand, Indonesia and the
Philippines. Taiwan dropped 28.06% on rising margins position, cross strait
tension, and financial scandals. Softer than expected demand for PCs also
sidelined investors. Thailand weakened 31.28% due to disappointing debt
restructuring, banks' capital raising activities, and lower 2000 GDP forecasts.
Better-than-expected corporate earnings and steady economic recovery failed to
lift sentiment. Indonesia fell 31.74%, affected by MSCI-related asset
re-allocation, the removal of Indonesia from the FTSE Index and a weakening
currency. The Philippines declined 36.75% in the absence of any major reform
progress. Disappointing economic and fiscal data as well as negative corporate
interim results hurt market sentiment. Korea plunged 38.28% due to weakened
outlook on semiconductors and asset sale failure despite improved sentiment
after the historical meeting between the North and South Korea, government
measures for normalising liquidity flows and encouraging financial sector
reform.
Performance: For the year ended October 31, 2000, the Fund's Class A shares
excluding sales charges declined 28.30% compared to a decline of 21.38% for the
MSCI Far East Free ex-Japan Index, a performance measurement of Far East markets
excluding Japan.
Portfolio Specifics: Asset allocation was overall positive although being
overweight Korea and Taiwan was a slight drag. For stock selection, the main
drag came from Taiwan where premium of GDR collapsed and the Fund does not have
QFII status. Our current strategy is defensive increasing allocation to cash. We
are likely to become less defensive over the next few months and build up
positions in the preferred North Asian markets.
Market Outlook: The global backdrop for Asian equities remains difficult. There
are signs of slowing growth in the US, Europe and Asia. We expect global growth
of 3% in 2001 after 4% in 2000. Credit spreads have also widened for lower
quality credits and in emerging markets. The earnings downgrades of US
technology companies have also adversely affected Asian markets. In Asia, more
sustainable growth levels are expected after two years of fast recovery from the
Asian crisis. Our forecast growth rates for 2001 are reasonable, which should
allow interest rates to remain reasonably stable. Earnings growth will be lower
in 2001 but still robust. Share price declines have been heavy in some markets.
We believe many of these falls were overdone. We believe Asia offers moderate
economic growth in 2001, a reasonably stable interest rate environment and
attractive market valuations.
22
<PAGE>
Portfolio
Managers' Report PILGRIM ASIA-PACIFIC EQUITY FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
8/31/95 10/95 10/96 10/97 10/98 10/99 10/31/00
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Pilgrim Asia-Pacific Equity Fund
Class A With Sales Charge 9,425 9,312 9,597 6,142 4,713 6,587 4,723
Pilgrim Asia-Pacific Equity Fund
Class A Without Sales Charge 10,000 9,880 10,182 6,517 5,001 6,989 5,011
MSCI Far East Free ex-Japan Index 10,000 10,019 11,010 7,201 5,541 8,426 6,624
</TABLE>
Since Inception
1 Year 5 Year 09/01/95
------ ------ --------
Including Sales Charge:
Class A(1) -32.38% -13.72% -13.51%
Class B(2) -32.44% -13.76% -13.39%
Class M(3) -31.21% -13.84% -13.63%
Excluding Sales Charge:
Class A -28.30% -12.70% -12.51%
Class B -28.89% -13.41% -13.22%
Class M -28.68% -13.22% -13.04%
MSCI Far East Free ex-Japan Index -21.38% -7.94% -7.66%
Based on a $10,000 initial investment, the graph and table above illustrate the
total return of Pilgrim Asia-Pacific Equity Fund against the MSCI Far East Free
ex-Japan Index. The Index has an inherent performance advantage over the Fund
since it has no cash in its portfolio, imposes no sales charges and incurs no
operating expenses. An investor cannot invest directly in an index. The Fund's
performance is shown both with and without the imposition of sales charges.
Total returns reflect the fact that the Investment Adviser has contractually
agreed to waive or defer its management fee and to pay other operating expenses
otherwise payable by the Fund, subject to possible later reimbursement during a
three-year period. Total returns would have been lower had there been no
deferral to the Fund.
Performance data represents past performance and is no assurance of future
results. Investment return and principal value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their original
cost.
This letter contains statements that may be "forward-looking" statements. Actual
results may differ materially from those projected in the "forward-looking"
statements.
The views expressed in this report reflect those of the portfolio manager, only
through the end of the period as stated on the cover. The portfolio manager's
views are subject to change at any time based on market and other conditions.
Portfolio holdings are subject to change daily.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5%, 2% and 2%,
respectively, for the 1 year, 5 year and since inception returns.
(3) Reflects deduction of the Class M deferred sales charge of 3.50% for the 1
year return.
Principal Risk Factor(s): Price volatility and other risks that accompany an
investment in foreign equities and in securities of issuers in a single region.
Sensitive to currency exchange rates, international political and economic
conditions and other risks that affect foreign securities.
See accompanying index descriptions on page 34.
23
<PAGE>
-------------
International
Equity Funds
-------------
Portfolio
PILGRIM SMALLCAP ASIA GROWTH FUND Manager's Report
--------------------------------------------------------------------------------
Portfolio Manager: Christina Lam, Vice President of Insinger Asset Management
(U.S.) Inc. (Insinger)
Goal: The Fund seeks long-term capital appreciation primarily by investing in
equity securities and equity equivalents of companies in the Asia Region having
market capitalizations of less than $1 billion.
Market Overview: For the period ended October 31, 2000, the stockmarkets in the
region were adversely affected by the decline in the Euro and rising oil prices
that broke a 10-year record high of US $37/barrel. In addition, a string of
profit warnings from US technology companies further hurt investor sentiment in
this sector.
Performance: For the year ended October 31, 2000, the Fund's Class A shares,
excluding sales charges, declined 23.32% compared to a decline in the MSCI Far
East Free ex-Japan Index of 21.38% and a decline in the MSCI EAFE Index of 2.66%
for the same period.
Portfolio Specifics: The net asset value of the Fund decreased 23.32% during the
period under review, compared with a drop of 21.38% in the MSCI Far East Free
ex-Japan Index. At the end of the period under review, the Fund had overweight
positions in China, Hong Kong, Korea, Taiwan and Thailand.
Market Outlook: While investors remain cautious amidst continuing profit
warnings, the resolution of the outcome of the U.S. presidental elections and
expectations of lower U.S. interest rates have resulted in an improvement in
sentiment in the region. The year ahead is expected to be yet another
challenging one for Asia, since the region's growth will undoubtedly slow as the
result of a broader global slowdown. However, we believe that opportunities
exist and we remain optimistic.
Despite WTO challenges, we believe that China offers the most compelling
domestic demand recovery potential. Hong Kong will be positively impacted by the
prospects of lower U.S. interest rates. While commentators have complained about
the pace of restructuring in Korea, this continues to proceed. Valuations are
attractive and many of Korea's larger companies should see improving margins and
profitability in 2001.
Stock selection remains focused on reasonably-priced companies in Asia that are
well-managed, have adjusted to the new environment, are willing to restructure
their operations and are benefiting from the economic recovery in the region. In
terms of asset allocation, the Fund is expected to maintain overweight positions
in China, Hong Kong, Korea and Singapore.
24
<PAGE>
Portfolio
Manager's Report PILGRIM SMALLCAP ASIA GROWTH FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
7/3/95 10/95 10/96 10/97 10/98 10/99 10/31/00
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Pilgrim SmallCap Asia Growth Fund
Class A With Sales Charge 9,425 9,152 10,129 8,185 5,038 7,051 5,406
Pilgrim SmallCap Asia Growth Fund
Class A Without Sales Charge 10,000 9,710 10,747 8,684 5,345 7,481 5,736
MSCI Far East Free ex-Japan Index 10,000 9,693 10,652 6,969 5,361 8,151 6,409
MSCI EAFE Index 10,000 10,147 11,243 11,796 12,970 16,001 15,575
</TABLE>
Average Annual Total Returns
for the period ended October 31, 2000
-------------------------------------
Since Inception
1 Year 5 Years 07/03/95
------ ------- --------
Including Sales Charge:
Class A (1) -27.78% -11.05% -10.90%
Excluding Sales Charge:
Class A -23.32% -9.99% -9.90%
MSCI Far East Free ex-Japan Index -21.38% -7.94% -8.00%(2)
MSCI EAFE Index -2.66% 8.95% 8.66%(2)
Based on a $10,000 initial investment, the graph and table above illustrate the
total return of Pilgrim SmallCap Asia Growth Fund against the MSCI Far East Free
ex-Japan Index and MSCI EAFE Index. The Indices have an inherent performance
advantage over the Fund since they have no cash in their portfolios, impose no
sales charges and incur no operating expenses. An investor cannot invest
directly in an index. The Fund's performance is shown both with and without the
imposition of sales charges.
Total returns reflect the fact that the Investment Adviser has contractually
agreed to waive or defer its management fee and to pay other operating expenses
otherwise payable by the Fund, subject to possible later reimbursement during a
three-year period. Total returns would have been lower had there been no
deferral to the Fund.
Performance data represents past performance and is no assurance of future
results. Investment return and principal value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their original
cost.
This letter contains statements that may be "forward-looking" statements. Actual
results may differ materially from those projected in the "forward-looking"
statements.
The views expressed in this report reflect those of the portfolio manager, only
through the end of the period as stated on the cover. The portfolio manager's
views are subject to change at any time based on market and other conditions.
Portfolio holdings are subject to change daily.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%.
(2) Since inception performance for the index is shown from 07/01/95.
Principal Risk Factor(s): Price volatility and other risks that accompany an
investment in equity securities of issuers in a single region. Sensitive to
currency exchange rates, international political and economic conditions and
other risks that affect foreign securities.
See accompanying index descriptions on page 34.
25
<PAGE>
-------------
International
Equity Funds
-------------
Portfolio
PILGRIM TROIKA DIALOG RUSSIA FUND Managers' Report
--------------------------------------------------------------------------------
Portfolio Management Team: Timothy McCarthy, Chief Investment Officer and
Portfolio Manager, Oleg Larichev, Portfolio Manager, Ruben Vardanian, Chairman
of Troika Dialog Asset Management, Pavel Teplukhin, President of Troika Dialog
Asset Management.
Goal: The Fund seeks to maximize long-term capital appreciation through
investments in Russian securities.
Market Overview: High prices for oil and other natural resource commodities
exported by Russia, have had a very positive effect on Russia's macro-economic
fundamentals. The enormous trade surplus at approximately 25% of GDP has helped
to shore up Central Bank reserves, which have increased over 100% during the
last 12 months to more then $25 billion. The strong hard currency reserve
build-up has also caused a real appreciation in the ruble of more than 9%
year-to-date. The improved export numbers combined with the lingering effects of
a low ruble cost base for most Russian companies has yielded triple digit
earnings growth and increased tax collections for the budget, which has been
running a surplus for the last six months. All of this has occurred in an
environment of declining inflation, which is at approximately 18%.
Global factors external to Russia have had a negative effect on the global
emerging markets in general. Russia's strong underlying macro-economic factors,
however, have provided its equity markets with superior performance relative to
other emerging markets. For example, the MSCI Emerging Market Index declined by
25.02% year-to-date and the MSCI Emerging Eastern Europe Index declined by
14.57% year-to-date, while the RTS Index gained 7.83% year-to-date.
When looking for global factors most influential on the Russian market, it is
interesting to note that oil is not the most prevalent. It is the level of
global risk capital available for emerging markets, in general, that is most
important. The amount of global risk capital is clearly illustrated by the JP
Morgan Brandy Bond Index, which has a .45 correlation to the RTS Index, while
oil prices have only a .34 correlation.
We have seen a period of relative political calm in which various governmental
organs have acted cohesively and productively. Much of the hoped for reform
oriented legislation proposed by President Vladimir Putin's liberal economic
advisors, German Gref and Andrei Illiarnov, has been passed. This has included
an extremely forward looking tax code with a flat tax rate of 13%, a
consolidation of approximately 30 different social taxes into one social tax, a
lowering of the arduous 4% turnover tax to 1% and a simplification of customs
tariffs. We have seen the political power previously delegated to corrupt
regional administrations under the Yeltsin administration, taken back by the
Putin administration. With the creation of an executive branch oversight
committee to monitor regional administrations and legislation providing this
structure with the right to dismiss corrupt regional officials for violating
federal laws, Putin now has the legal, political and executive teeth necessary
to begin what is expected to be a difficult process of rooting corruption out of
government. The parliament also recently passed the 2001 budget, which will be
the first planned surplus budget ever.
Performance: For the year ended October 31, 2000, the Fund's Class A shares,
excluding sales charges, have appreciated by 82.86% compared to the RTS Index of
100 stocks return of 94.35%. The Moscow Times Index had a gain of 102.84% during
the same period. The RTX Index comprised of the eight most liquid shares
declined by 7.73% during the same period. During this period of global emerging
market risk adversity, the more liquid stocks as expressed by the RTX Index
under-performed the broader and less liquid market. The Fund's slight
underperformance relative to the broader RTS Index is therefore attributable to
the Fund's preference towards liquidity, as it is open for redemptions on a
daily basis.
Portfolio Specifics: Oil companies were an obvious beneficiary of high oil
prices, but since approximately 30% of Russian GDP is derived from oil and gas
production, virtually the entire economy is a play on oil. This is why we have
reduced our oil sector exposure down to approximately 42%, which is
approximately 20% less than the RTS Index weighting in the oil sector. Within
the oil sector we have reduced exposure to first tier stocks selling at a
premium to the sector average in favor of smaller companies selling at a
discount to the sector average. Wireless telecommunications and competitive
local exchange carriers are our favorites with the telecommunications sector,
which makes up about 23% of the portfolio. Metals producers, which have
benefited from a lower ruble denominated cost base and higher commodities
prices, have become extremely profitable. Unfortunately, the sector is not
widely held and corporate governance problems inhibit stock selection within the
sector. We continue to underweight electrical utilities due to uncertainties
over a planned restructuring of the primary holding company, Unified Energy
Systems, as well as political and social pressures to keep tariffs below the
costs of many electricity producers.
Market Outlook: We remain optimistic about continued political stability and the
reform process. We believe that the efforts of the Putin administration to
curtail corruption and to push through the necessary reforms will pay-off in
terms of increased amounts of foreign direct investment, portfolio investment
and improved corporate governance. We have seen the fixed income market
outperform the equity market over the last six months, implying lower sovereign
risk which has not yet been priced into equities. We expect a turn-around in
global capital flows favoring emerging markets to occur late in the fourth
quarter and we believe that this turnaround will trigger a re-rating in
equities, closing the gap with Russian fixed income securities.
26
<PAGE>
Portfolio
Managers' Report PILGRIM TROIKA DIALOG RUSSIA FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
7/3/96 10/96 10/97 10/98 10/99 10/31/00
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Pilgrim Troika Dialog Russia Fund
Class A With Sales Charge 9,425 8,227 16,951 2,434 3,860 7,059
Pilgrim Troika Dialog Russia Fund
Class A Without Sales Charge 10,000 8,729 17,986 2,583 4,096 7,490
Moscow Times Index 10,000 9,433 23,697 3,057 5,736 11,634
Russian Tradings Systems Index 10,000 8,719 20,685 2,921 4,893 9,509
</TABLE>
Average Annual Total Returns
for the period ended October 31, 2000
-------------------------------------
Since Inception
1 year 3 year 07/03/96
------ ------ --------
Including Sales Charge:
Class A (1) 72.29% -26.78% -7.73%
Excluding Sales Charge:
Class A 82.86% -25.32% -6.46%
Moscow Times Index 102.84% -22.44% 2.32%(2)
Russian Tradings Systems Index 94.35% -22.47% -1.76%(2)
Based on a $10,000 initial investment, the graph and table above illustrate the
total return of Pilgrim Troika Dialog Fund against the Moscow Times Index and
Russian Tradings Systems Index. The indices have an inherent performance
advantage over the Fund since they have no cash in their portfolio, impose no
sales charge and incur no operating expenses. An investor cannot invest directly
in an index. The Fund's performance is shown both with and without the
imposition of the maximum sales load.
Total returns reflect the fact that the Investment Adviser has contractually
agreed to waive or defer its management fee and to pay other operating expenses
otherwise payable by the Fund, subject to possible later reimbursement during a
three-year period. Total returns would have been lower had there been no
deferral to the Fund.
Performance data represents past performance and is no assurance of future
results. Investment return and principal value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their original
cost.
This letter contains statements that may be "forward-looking" statements. Actual
results may differ materially from those projected in the "foward-looking"
statements.
The views expressed in this report reflect those of the portfolio manager, only
through the end of the period as stated on the cover. The portfolio manager's
views are subject to change at any time based on market and other conditions.
Portfolio holdings are subject to change daily.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%.
(2) Since inception performances for the indices is shown from 06/28/96.
Principal Risk Factor(s): Price volatility and other risks that accompany an
investment in equity securities of issuers in a single region. Sensitive to
currency exchange rates, international political and economic conditions and
other risks that affect foreign securities.
See accompanying index descriptions on page 34.
27
<PAGE>
------------
Precious
Metals Funds
------------
Portfolio
PILGRIM GOLD FUND Manager's Report
--------------------------------------------------------------------------------
Portfolio Manager: James A. Vail, CFA
Goal: The Fund seeks long-term capital appreciation and hedges against the loss
of buying power of the US Dollar as may be obtained through investment in gold
bullion and securities of companies engaged in the mining or processing of gold
throughout the world. The Fund seeks to invest 65% of its assets in gold and the
equity securities of companies engaged in mining or processing of gold. The Fund
may also invest in other precious metals, including platinum, palladium and
silver. Less than half of the value of the Fund's assets will be invested in
gold bullion or other precious metals.
Market Overview: Since 1988, gold bullion has traded in a range of $250-$300 per
ounce. Two factors have contributed to gold's malaise. Central Banks globally
have sold or leased their reserves to producers and speculators who have put
pressure on the metal. Secondly, the strength of the US dollar has reduced the
demand for gold either as jewelry or as an investment. The latter issue provides
the foundation for higher metal prices in the future, Presently; the US Dollar
accounts for about 77% of world banks' reserves. The dollar can be compared to
an over priced, extended growth stock, priced for perfection. Should the dollar
weaken against other currencies, we expect gold prices to strengthen and coupled
with a large short position, result in substantially higher bullion prices.
Performance: For the year ended October 31, 2000, the Fund's Class A shares,
excluding sales charges, declined 32.01% compared to a decline of 9.22% for Gold
Bullion and a gain of 6.09% for the S&P 500 Index in the same period.
Portfolio Strategy: The Fund's generally better performance relative to the
Philadelphia Stock Exchange Gold and Silver Index can be traced to its holdings
of platinum and palladium shares both in South Africa and North America. South
African holdings, IMPALA Platinum and Anglo American Platinum, returned over 60%
in the 12 months ended October 31, 2000. In North America, Stillwater Mining
also produced above average returns.
Market Outlook: Looking ahead, the fundamental supply demand balance remains
positive for gold and the US dollar is not expected to sustain its strength
against other currencies. In addition, the low gold price environment has
resulted in many companies and mines operating at extremely narrow profit
margins leading to questions of their economic viability. This could lead to
greater corporate activity. Within this framework, the Fund will remain invested
in the world's leading gold producers. The Fund will limit its exposure to
heavily hedged producers in an attempt to capture as much of the upside
potential as possible in a rising gold price environment. The Fund will also
consider investing in smaller and intermediate gold producers in an effort to
enhance overall performance through greater sensitivity to gold prices and
potential corporate actions.
28
<PAGE>
Portfolio
Manager's Report PILGRIM GOLD FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
10/31/90 10/91 10/92 10/93 10/94 10/95 10/96 10/97 10/98 10/99 10/31/00
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pilgrim Gold Fund
Class A With Sales Charge 9,417 9,342 7,512 11,474 13,661 11,319 13,716 8,790 7,673 7,673 5,217
Pilgrim Gold Fund
Class A Without Sales Charge 10,000 9,920 7,977 12,184 14,507 12,019 14,565 9,334 8,148 8,148 5,540
S&P 500 Index 10,000 13,350 14,679 16,872 17,525 22,158 27,497 36,327 44,315 55,688 59,081
Gold Bullion 10,000 9,419 8,940 9,733 10,284 10,252 10,168 8,344 7,833 8,004 7,266
</TABLE>
Average Annual Total Returns
for the period ended October 31, 2000
-------------------------------------
1 Year 5 Years 10 Years
------ ------- --------
Including Sales Charge:
Class A (1) -35.86% -15.37% -6.30%
Excluding Sales Charge:
Class A -32.01% -14.35% -5.74%
S&P 500 Index 6.09% 21.67% 19.44%
Gold Bullion -9.22% -7.11% -3.35%
Based on a $10,000 initial investment, the graph and table above illustrate the
total return of Pilgrim Gold Fund against the S&P 500 Index and Gold Bullion.
The Indices have an inherent performance advantage over the Fund since they have
no cash in their portfolio, impose no sales charges and incur no operating
expenses. An investor cannot invest directly in an index. The Fund's performance
is shown both with and without the imposition of sales charges.
Total returns reflect the fact that the Investment Adviser has contractually
agreed to waive or defer its management fee and to pay other operating expenses
otherwise payable by the Fund, subject to possible later reimbursement during a
three-year period. Total returns would have been lower had there been no
deferral to the Fund.
Performance data represents past performance and is no assurance of future
results. Investment return and principal value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their original
cost.
This letter contains statements that may be "forward-looking" statements. Actual
results may differ materially from those projected in the "forward-looking"
statements.
The views expressed in this report reflect those of the portfolio manager, only
through the end of the period as stated on the cover. The portfolio manager's
views are subject to change at any time based on market and other conditions.
Portfolio holdings are subject to change daily.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%.
Principal Risk Factor(s): Price volatility due to non-diversification and
concentration in the gold/precious metals industry. The market for gold and
other precious metals is widely unregulated and is located in foreign countries
that have the potential for instability. Precious metals earn no income, have
higher transaction/storage costs and realize gain only with an increase in
market price.
See accompanying index descriptions on page 34.
29
<PAGE>
------------
Precious
Metals Funds
------------
Portfolio
PILGRIM SILVER FUND Manager's Report
--------------------------------------------------------------------------------
Portfolio Manager: James A. Vail, CFA
Goal: The Fund's investment objective is to maximize total return on its assets
from long term growth of capital and income principally through investment in a
portfolio of securities which are engaged in the exploration, mining,
processing, fabrication or distribution of silver and in silver bullion.
Investment Strategy: The Fund will invest in the securities of established
silver related companies domiciled in the United States, Canada, and Mexico as
well as other silver producing countries throughout the world. At least 80% of
the Fund's assets will be invested in established silver related companies,
which have been in business for more than three years. Additionally, the Fund
has the ability to significantly increase its exposure to silver by increasing
its holding of silver bullion.
Market Overview: Despite a favorable supply demand imbalance, silver prices
remain under pressure. Inventory reductions from overseas governments and
domestic investors have prevented prices from reflecting the positive
fundamentals. Inspite of its precious nature, silver is essentially an
industrial metal with major uses in photography and jewelry. As such silver's
demand will be influence by overall global economic trends. As we move forward,
the imbalance between supply and demand should lead to higher silver prices. In
addition, inventories at the London Metal Exchange and Comex are at historically
low levels, which would enhance the favorable outlook for higher silver prices.
Performance: For the year ended October 31, 2000, the Fund's Class A shares,
excluding sales charges, lost 26.52% compared to a decline of 8.76% for Silver
Bullion and a gain of 6.09% for the S&P 500 Index for the same period.
Portfolio Strategy: In this generally negative silver environment, the Fund's
conservative cash position contributed to its better relative performance
compared to the Philadelphia Gold and Silver Index.
Market Outlook: Looking ahead, the fundamental supply demand balance remains
positive for silver. In general, however, 80% of the world's silver is a
by-product of other metal production. As a result, the Fund's future performance
will depend on global industrial production and the production outlook for
copper, zinc and gold. The Fund remains invested in the world's largest silver
producers and looks for opportunities where silver production is a growing
aspect of other global mining entities.
30
<PAGE>
Portfolio
Manager's Report PILGRIM SILVER FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1/2/92 10/92 10/93 10/94 10/95 10/96 10/97 10/98 10/99 10/31/00
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pilgrim Silver Fund
Class A With Sales Charge 9,420 8,732 13,116 15,507 14,565 15,689 13,572 10,657 10,767 7,911
Pilgrim Silver Fund
Class A Without Sales Charge 10,000 9,269 13,923 16,462 15,462 16,654 14,407 11,312 11,429 8,398
S&P 500 Index 10,000 10,281 11,818 12,275 15,520 19,259 25,444 31,039 39,005 41,381
Silver Bullion 10,000 9,726 11,399 14,219 14,259 12,836 12,810 13,448 14,128 12,891
</TABLE>
Average Annual Total Returns
for the period ended October 31, 2000
-------------------------------------
Since Inception
1 Year 5 Year 01/02/92
------ ------ --------
Including Sales Charge:
Class A (1) -30.78% -12.55% -2.62%
Excluding Sales Charge:
Class A -26.52% -11.49% -1.96%
S&P 500 Index 6.09% 21.67% 17.44%(2)
Silver Bullion -8.76% -2.43% 2.35%(3)
Based on a $10,000 initial investment, the graph and table above illustrate the
total return of Pilgrim Silver Fund against the S&P 500 Index and Silver
Bullion. The Indices have an inherent performance advantage over the Fund since
they have no cash in their portfolio, impose no sales charges and incur no
operating expenses. An investor cannot invest directly in an index. The Fund's
performance is shown both with and without the imposition of sales charges.
Total returns reflect the fact that the Investment Adviser has contractually
agreed to waive or defer its management fee and to pay other operating expenses
otherwise payable by the Fund, subject to possible later reimbursement during a
three-year period. Total returns would have been lower had there been no
deferral to the Fund.
Performance data represents past performance and is no assurance of future
results. Investment return and principal value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their original
cost.
This letter contains statements that may be "forward-looking" statements. Actual
results may differ materially from those projected in the "forward-looking"
statements.
The views expressed in this report reflect those of the portfolio manager, only
through the end of the period as stated on the cover. The portfolio manager's
views are subject to change at any time based on market and other conditions.
Portfolio holdings are subject to change daily.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%.
(2) Since inception performance for the index is shown from 01/01/92.
(3) Since inception performance for the index is shown from 12/31/91.
Principal Risk Factor(s): Price volatility due to non-diversification and
concentration in stocks in the silver industry. The market for silver is limited
and widely unregulated and is located in foreign countries that have the
potential for instability. Precious metals earn no income, have higher
transaction/storage costs, and realize gain only with an increase in market
price.
See accompanying index descriptions on page 34.
31
<PAGE>
-------------
International
Income Funds
-------------
Portfolio
PILGRIM GLOBAL INCOME FUND Managers' Report
--------------------------------------------------------------------------------
Portfolio Management Team: Denis P. Jamison, C.F.A., Roseann G. McCarthy,
Co-Portfolio Managers
Goal: The Fund seeks to provide high current income. Capital appreciation is a
secondary objective. The Fund invests in a combination of foreign and domestic
fixed income securities. These securities can be investment grade, lower rated,
or non-rated. Also, the Fund owns both dollar-denominated and non-dollar debt
securities. A significant portion of the Fund's assets will be invested in
emerging market sovereign and corporate bonds. Management looks to balance the
risks between dollar and non-dollar debt as well as between developed market and
emerging market debt in order to mitigate the price volatility associated with
any one market sector.
Market Overview: Two factors have dominated the global bond market this year:
(1) the steep decline in the value of the Euro versus the U.S. Dollar, and (2)
the widening of yield spreads between government securities -- particularly U.S.
Treasury debt -- and lower rated bonds. For example, the Lehman U.S. Treasury
Bond Index returned 8.10% for the first nine months of this year. This compares
with a 6.50% decline in the non-U.S. Global Treasury Index and a -0.70% decline
in the return from U.S. high yield corporate debt. One sector of the high yield
bond market has shown considerable strength; the Lehman Emerging Market Debt
Index is up 12.30% this year. Strong economic growth and improved fiscal
policies in Brazil and Mexico as well as increased stability in Russia have
attracted investors to the dollar-denominated bonds of these borrowers. However,
in recent months, even these markets have fallen victim to increased investor
risk aversion; the yield spreads between these debt securities and U.S. Treasury
bonds widened and their price performance suffered.
The key element underlying the trends in the global bond market is strong U.S.
economic growth relative to that of other developed markets. This growth has
resulted in high returns on capital whether invested in the booming U.S.
communications and technology markets or in domestic debt whose yields have been
inflated by tight U.S. monetary policies. Recent economic reports suggest a
slowing in domestic business expansion. If so, we could see a reversal in the
market trends of the last year.
Performance: For the period ended October 31, 2000, the Fund's Class A shares,
excluding sales charges, declined 3.57% compared to a decline of 5.24% for the
Lehman Brothers Global Treasury Index. The Fund had a particularly difficult
October, declining 3.20% in value compared with a -1.00% reversal for the Index.
Portfolio Specifics: Losses on domestic high yield debt and the decline in the
value of the Euro were the primary causes of the Fund's negative returns this
year. Two domestic credits held by the Fund became distressed during the year --
Archibald Candy and Clark Materials. The latter declared bankruptcy and there
may be little assets available to bondholders. At the start of the year, about
42% of the Fund's assets were invested in Scandinavian, Greek, or Eastern
European debt. The 12% fall in the value of the Euro impacted the U.S. dollar
value of these bonds. Finally, in late September, the Fund's single largest
shareholder liquidated its investment; the Fund's assets fell from $30.7 million
to $16.5 million. This prompted significant sales of Fund assets and these
transactions impacted relative performance. The Fund's Class A shares fell in
value by 3.20% during the month compared with a 1.30% decline for the Lehman
Brothers Global Treasury Index.
Market Outlook: Indications are clear that the U.S. economy is slowing. For
example, third quarter GDP growth slowed to 2.70% compared with 5.60% in the
prior period. This opens the door to lower short-term interest rates in 2001 and
implies a lower rate of return on capital invested in the U.S. The Euro has been
significantly undervalued on a purchasing parity basis versus the U.S. Dollar
all year. It's capital flows, however, that determine exchange ratios. During
the first nine months of this year, investors were buying U.S. Dollars to fund
both acquisitions and security purchases. This activity is likely to mitigate as
the economy slows. Accordingly, we look for the Euro to strengthen and take with
it the Eastern European currencies. We anticipate maintaining a high non-dollar
exposure; currently, the Fund has a 62% exposure in foreign currencies.
32
<PAGE>
Portfolio
Managers' Report PILGRIM GLOBAL INCOME FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
10/31/90 10/91 10/92 10/93 10/94 10/95 10/96 10/97 10/98 10/99 10/31/00
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pilgrim Global Income Fund
Class A With Sales Charge 9,521 10,578 11,072 12,612 11,960 13,865 15,809 16,663 17,811 18,072 17,426
Pilgrim Global Income Fund
Class A Without Sales Charge 10,000 11,111 11,629 13,247 12,562 14,563 16,605 17,502 18,708 18,982 18,304
Lehman Brothers Global
Treasury Index 10,000 11,105 12,491 13,919 14,287 16,571 17,711 16,783 16,283 18,374 18,954
</TABLE>
1 Year 5 Year 10 Year
------ ------ -------
Including Sales Charge:
Class A(1) -8.16% 3.67% 5.71%
Excluding Sales Charge:
Class A -3.57% 4.68% 6.23%
Lehman Brothers Global Treasury Index -5.24% 2.72% 6.60%
Based on a $10,000 initial investment, the graph and table above illustrate the
total return of Pilgrim Global Income Fund against the Lehman Brothers Global
Treasury Index. The Index has an inherent performance advantage over the Fund
since it has no cash in its portfolio, impose no sales charges and incur no
operating expenses. An investor cannot invest directly in an index. The Fund's
performance is shown both with and without the imposition of sales charges.
Total returns reflect the fact that the Investment Adviser has contractually
agreed to waive or defer its management fee and to pay other operating expenses
otherwise payable by the Fund, subject to possible later reimbursement during a
three-year period. Total returns would have been lower had there been no
deferral to the Fund.
Performance data represents past performance and is no assurance of future
results. Investment return and principal value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their original
cost.
This letter contains statements that may be "forward-looking" statements. Actual
results may differ materially from those projected in the "forward-looking"
statements.
The views expressed in this report reflect those of the portfolio manager, only
through the end of the period as stated on the cover. The manager's views are
subject to change at any time based on market and other conditions.
Portfolio holdings are subject to change daily.
(1) Reflects deduction of the maximum Class A sales charge of 4.75%.
Principal Risk Factor(s): Through investment in bonds, the Fund may expose you
to certain risks which may cause you to lose money. Junk bonds have a higher
risk of default, tend to be less liquid, and may be more difficult to value. The
Fund could lose money because of foreign government actions, political
instability, or lack of adequate and accurate information. Currency and
investment risks tend to be higher in emerging markets.
See accompanying index descriptions on page 34.
33
<PAGE>
-------
Pilgrim
Funds
-------
INDEX DESCRIPTIONS
--------------------------------------------------------------------------------
The S&P 500 Index is a widely recognized index of 500 common stocks.
The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip
stocks that are generally the leaders of their industry.
The NASDAQ Composite Index is a broad-based capitalization-weighted index of all
NASDAQ National Market & SmallCap stocks.
The Russell 2000 Index consists of the smallest 2000 companies in the Russell
3000 Index.
The Philadelphia Stock Exchange Gold and Silver Index (XAU) is a
capitalization-weighted index which includes the leading companies involved in
the mining of gold and silver.
The FTSE 100 Index is a capitalization-weighted index of the 100 most highly
capitalized companies traded on the London Stock Exchange.
The MSCI EAFE Index consists of more than 1,400 securities in the U.S., Europe,
Canada, Australia, New Zealand, and the Far East. It is a generally accepted
index for major overseas markets.
The MSCI Emerging Markets Free (EMF) Index is comprised of companies
representative of the market structure of 22 emerging countries in Europe, Latin
America and the Pacific Rim Basin.
The MSCI World Index consists of more than 1,400 securities located in the U.S.,
Europe, Canada, Australia, New Zealand and the Far East.
The Salomon EPAC Extended Market Index measures the performance of securities of
smaller-capitalized companies in 22 countries excluding the U.S. and Canada.
The MSCI Far East Free ex-Japan Index measures performance of securities listed
on exchanges in the Far East markets excluding Japan.
The Moscow Times Index is an index that measures the performance of the 50 most
liquid and highly capitalized Russian stocks.
The Russian Trading Systems Index is a capitalization weighted index that is
comprised of 100 stocks traded on the Russian Trading Systems.
The RTX Russian Traded Index is a capitalization-index of 8 Russian blue chip
stocks.
The Lehman Brothers Global Treasury Index is an unmanaged index that is
comprised of 19 countries with an average maturity of 7.46 years.
The Gold Bullion is a commodity traded on the New York Mercantile Exchange.
The Silver Bullion is a commodity traded on the New York Mercantile Exchange.
The Pacific Stock Exchange (PSE) Technology Index is a price-weighted index of
the top 100 U.S. technology stocks.
All indices are unmanaged.
An investor cannot invest directly in an index
34
<PAGE>
-------
Pilgrim
Funds
-------
REPORT OF INDEPENDENT AUDITORS
--------------------------------------------------------------------------------
To the Shareholders and Trustees of the Pilgrim Mayflower Trust and the
Shareholders and Board of Directors of Pilgrim Mutual Funds, Pilgrim Advisory
Funds, Inc., Pilgrim Global Corporate Leaders Fund, Inc., Pilgrim International
Fund, Inc., Pilgrim Worldwide Emerging Markets Fund, Inc., Pilgrim Global
Technology Fund, Inc., Pilgrim SmallCap Asia Growth Fund, Inc. Pilgrim Troika
Dialog Russia Fund, Inc., Pilgrim Gold Fund, Inc., Pilgrim Silver Fund, Inc. and
Pilgrim Global Income Fund:
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Pilgrim International Core Growth
Fund, Pilgrim Worldwide Growth Fund, Pilgrim International SmallCap Growth Fund
and Pilgrim Emerging Countries Fund, four of the twelve funds comprising Pilgrim
Mutual Funds (collectively, "PMF"), Pilgrim International Value Fund and Pilgrim
Emerging Markets Value Fund, two of the six funds comprising Pilgrim Mayflower
Trust, (collectively, "PMT"), Pilgrim Asia-Pacific Equity Fund, one of the three
funds comprising Pilgrim Advisory Funds, Inc., (collectively, "PAF"), Pilgrim
Global Corporate Leaders Fund, Inc. (formerly Lexington Global Corporate Leaders
Fund, Inc.), Pilgrim International Fund, Inc. (formerly Lexington International
Fund, Inc.), Pilgrim Worldwide Emerging Markets Fund, Inc. (formerly Lexington
Worldwide Emerging Markets Fund, Inc.), Pilgrim Global Technology Fund, Inc.
(formerly Lexington Global Technology Fund, Inc.), Pilgrim SmallCap Asia Growth
Fund, Inc. (formerly Lexington SmallCap Asia Growth Fund, Inc.), Pilgrim Troika
Dialog Russia Fund, Inc. (formerly Lexington Troika Dialog Russia Fund, Inc.),
Pilgrim Gold Fund, Inc. (formerly Lexington Goldfund, Inc.), Pilgrim Silver
Fund, Inc. (formerly Lexington Silver Fund, Inc.), and Pilgrim Global Income
Fund (formerly Lexington Global Income Fund, Inc.), (each a "Fund" collectively,
the "Funds") at October 31, 2000, and the results of each of their operations
for the periods then ended, the changes in each of their net assets and
financial highlights for each of the periods presented except as described
below, in conformity with accounting principles generally accepted in the United
States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of PMF,
PMT, PAF and the Funds' management; our responsibility is to express an opinion
on these financial statements based on our audits. We conducted our audits of
these financial statements in accordance with auditing standards generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at October
31, 2000 by correspondence with the custodian and brokers, provide a reasonable
basis for our opinion.
For all periods ended prior to and including December 31, 1999 for Pilgrim
Global Corporate Leaders Fund, Inc., Pilgrim International Fund, Inc., Pilgrim
Worldwide Emerging Markets Fund, Inc., Pilgrim Global Technology Fund, Inc.,
Pilgrim SmallCap Asia Growth Fund, Inc., Pilgrim Troika Dialog Russia Fund,
Inc., Pilgrim Gold Fund, Inc., Pilgrim Silver Fund, Inc., and Pilgrim Global
Income Fund the statements of operations and of changes in net assets and
financial highlights were audited by other auditors whose reports dated February
17, 2000 expressed unqualified opinions on those financial statements and
financial highlights.
For all periods ended prior to and including June 30, 2000 for Pilgrim
International Core Growth Fund, Pilgrim Worldwide Growth Fund, Pilgrim
International SmallCap Growth Fund, Pilgrim Emerging Countries Fund and Pilgrim
Asia-Pacific Fund the statements of operations and of changes in net assets and
financial highlights were audited by other auditors whose report dated August 4,
2000 expressed unqualified opinions on those financial statements and financial
highlights.
PRICEWATERHOUSECOOPERS LLP
Denver, Colorado
December 29, 2000
35
<PAGE>
-------------
International
Equity Funds
-------------
STATEMENTS OF ASSETS AND LIABILITIES as of October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global
Worldwide Corporate International
Growth Leaders Value International
Fund Fund Fund Fund
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at
value* $ 572,643,199 $ 15,201,490 $1,912,520,584 $ 27,547,450
Short-term securities, at amortized
cost 50,195,499 987,930 -- 2,963,790
Repurchase agreements -- -- 125,011,000 --
Cash 46,206 543,465 10,249 672,619
Foreign currency, at value** 349 -- 1,366,994 331,082
Receivable for investments sold 12,435,780 4,962 -- --
Receivable for shares of beneficial
interest sold 21,978,147 257,795 18,891,380 243,463
Dividends and interest receivable 518,450 32,755 4,441,300 77,982
Unrealized appreciation of
forward currency contracts -- -- 158,553 --
Receivable due from affilitate -- -- -- --
Other receivable -- 26,597 -- 135
Prepaid expenses 190,020 1,768 99,629 27,497
-------------- -------------- -------------- --------------
Total Assets 658,007,650 17,056,762 2,062,499,689 31,864,018
-------------- -------------- -------------- --------------
LIABILITIES:
Payable for investments
purchased 4,818,844 -- 63,902,107 379,460
Payable for shares of beneficial
interest reacquired 20,182,180 434 4,935,786 499,445
Investment advisory fee payable 532,375 13,969 1,624,499 25,850
Distribution fee payable 274,306 3,492 1,089,059 5,913
Transfer agent fee payable 97,619 7,180 576,601 6,601
Administrative services fee
payable -- 1,397 162,450 2,585
Unrealized depreciation of
forward foreign currency
contracts -- -- 360,454 --
Accrued expenses 211,495 136,797 932,779 126,090
-------------- -------------- -------------- --------------
Total Liabilities 26,116,819 163,269 73,583,735 1,045,944
-------------- -------------- -------------- --------------
NET ASSETS $ 631,890,831 $ 16,893,493 $1,988,915,954 $ 30,818,074
============== ============== ============== ==============
NET ASSETS WERE
COMPRISED OF:
Paid-in-capital $ 573,190,225 $ 11,637,343 $1,676,493,307 $ 29,139,374
Undistributed (distribution in
excess of) net investment
income (587,286) -- 10,143,582 (44,363)
Accumulated net realized
gain/loss on investments,
foreign currency and futures
contracts 12,812,487 1,530,223 239,137,225 2,540,339
Net unrealized appreciation
(depreciation) of investments,
foreign currency and futures
contracts 46,475,405 3,725,927 63,141,840 (817,276)
-------------- -------------- -------------- --------------
Net Assets $ 631,890,831 $ 16,893,493 $1,988,915,954 $ 30,818,074
============== ============== ============== ==============
*Cost $ 526,165,276 $ 11,473,931 $1,849,228,137 $ 28,366,256
**Cost of foreign currency 347 -- 1,366,994 324,061
International International Emerging
Core SmallCap Markets
Growth Growth Value
Fund Fund Fund
-------------- -------------- --------------
ASSETS:
Investments in securities, at
value* $ 72,119,660 $ 646,634,200 $ 12,919,368
Short-term securities, at amortized
cost 3,000,000 -- --
Repurchase agreements -- 39,589,000 116,000
Cash 936,917 3,423,106 10,726
Foreign currency, at value** 4,044 7,413,742 1,745
Receivable for investments sold 954,615 13,474,241 --
Receivable for shares of beneficial
interest sold 5,157,680 24,671,502 3,204
Dividends and interest receivable 153,759 700,546 52,601
Unrealized appreciation of
forward currency contracts -- -- --
Receivable due from affilitate 20,391 3,357 --
Other receivable 167,736 154,046 55,700
Prepaid expenses 24,347 148,178 1,148
-------------- -------------- --------------
Total Assets 82,539,149 736,211,918 13,160,492
-------------- -------------- --------------
LIABILITIES:
Payable for investments
purchased -- 30,334,701 --
Payable for shares of beneficial
interest reacquired 152,673 2,593,933 1,161
Investment advisory fee payable 66,075 572,690 11,310
Distribution fee payable 30,015 226,605 8,313
Transfer agent fee payable 24,241 146,734 7,998
Administrative services fee
payable -- -- --
Unrealized depreciation of
forward foreign currency
contracts -- -- --
Accrued expenses 113,531 534,667 14,020
-------------- -------------- --------------
Total Liabilities 386,535 34,409,330 42,802
-------------- -------------- --------------
NET ASSETS $ 82,152,614 $ 701,802,588 $ 13,117,690
============== ============== ==============
NET ASSETS WERE
COMPRISED OF:
Paid-in-capital $ 75,262,552 $ 642,802,543 $ 10,675,826
Undistributed (distribution in
excess of) net investment
income 742,176 (3,454,110) 143,820
Accumulated net realized
gain/loss on investments,
foreign currency and futures
contracts 3,821,020 34,362,301 3,240,882
Net unrealized appreciation
(depreciation) of investments,
foreign currency and futures
contracts 2,326,866 28,091,854 (942,838)
-------------- -------------- --------------
Net Assets $ 82,152,614 $ 701,802,588 $ 13,117,690
============== ============== ==============
*Cost $ 69,778,215 $ 618,598,454 $ 13,862,207
**Cost of foreign currency 4,112 7,360,991 1,748
</TABLE>
See Accompanying Notes to Financial Statements
36
<PAGE>
<TABLE>
<CAPTION>
Global International International Emerging
Worldwide Corporate International Core SmallCap Markets
Growth Leaders Value International Growth Growth Value
Fund Fund Fund Fund Fund Fund Fund
------------ -------------- ------------ -------------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Class A:
Net assets $246,589,814 $ 16,893,493 $920,591,095 $ 30,652,690 $23,588,259 $273,392,970 $4,548,854
------------ -------------- ------------ -------------- ----------- ------------ ----------
Shares authorized unlimited 1,000,000,000 unlimited 1,000,000,000 unlimited unlimited unlimited
------------ -------------- ------------ -------------- ----------- ------------ ----------
Par value $ 0.00 $ 0.001 $ 0.01 $ 0.001 $ 0.00 $ 0.00 $ 0.01
------------ -------------- ------------ -------------- ----------- ------------ ----------
Shares outstanding 9,355,074 1,570,579 55,201,299 2,732,579 1,127,662 7,578,351 442,984
------------ -------------- ------------ -------------- ----------- ------------ ----------
Net asset value and
redemption value per
share (net assets/shares
outstanding) $ 26.36 $ 10.76 $ 16.68 $ 11.22 $ 20.92 $ 36.08 $ 10.27
============ ============== ============ ============== =========== ============ ==========
Maximum offering price per
share (net asset value
plus sales charge of
5.75% of offering price) $ 27.97 $ 11.29 $ 17.69 $ 11.90 $ 22.19 $ $37.28 $ 10.90
============ ============== ============ ============== =========== ============ ==========
Class B:
Net assets $126,756,201 n/a $437,764,707 $ 80,347 $19,116,474 $126,861,025 $4,100,600
------------ -------------- ------------ -------------- ----------- ------------ ----------
Shares authorized unlimited n/a unlimited 1,000,000,000 unlimited unlimited unlimited
------------ -------------- ------------ -------------- ----------- ------------ ----------
Par value $ 0.00 n/a $ 0.01 $ 0.001 $ 0.00 $ 0.00 $ 0.01
------------ -------------- ------------ -------------- ----------- ------------ ----------
Shares outstanding 4,293,287 n/a 26,643,010 7,180 915,669 3,334,092 402,969
------------ -------------- ------------ -------------- ----------- ------------ ----------
Net asset value and
offering price per
share (net assets/shares
outstanding)* $ 29.52 n/a $ 16.43 $ 11.19 $ 20.88 $ 38.05 $ 10.18
============ ============== ============ ============== =========== ============ ==========
Class C:
Net assets $213,842,768 n/a $605,678,290 $ 85,037 $25,501,161 $136,829,717 $4,468,236
------------ -------------- ------------ -------------- ----------- ------------ ----------
Shares authorized unlimited n/a unlimited 1,000,000,000 unlimited unlimited unlimited
------------ -------------- ------------ -------------- ----------- ------------ ----------
Par value $ 0.00 n/a $ 0.01 $ 0.001 $ 0.00 $ 0.00 $ 0.00
------------ -------------- ------------ -------------- ----------- ------------ ----------
Shares outstanding 8,144,711 n/a 36,915,901 7,588 1,216,504 3,917,302 440,910
------------ -------------- ------------ -------------- ----------- ------------ ----------
Net asset value and
offering price per
share (net assets/shares
outstanding)* $ 26.26 n/a $ 16.41 $ 11.21 $ 20.96 $ 34.93 $ 10.13
============ ============== ============ ============== =========== ============ ==========
Class Q:
Net assets $ 44,702,048 n/a $ 24,881,862 n/a $13,946,720 $164,718,876 n/a
------------ -------------- ------------ -------------- ----------- ------------ ----------
Shares authorized unlimited n/a unlimited n/a unlimited unlimited n/a
------------ -------------- ------------ -------------- ----------- ------------ ----------
Par value $ 0.00 n/a $ 0.00 n/a $ 0.00 $ 0.00 n/a
------------ -------------- ------------ -------------- ----------- ------------ ----------
Shares outstanding 1,471,824 n/a 1,491,611 n/a 640,881 4,313,811 n/a
------------ -------------- ------------ -------------- ----------- ------------ ----------
Net asset value, offering
and redemption price per
share (net assets/shares
outstanding) $ 30.37 n/a $ 16.68 $ n/a $ 21.76 $ 38.18 $ n/a
============ ============== ============ ============== =========== ============ ==========
</TABLE>
* Redemption price varies by length of time shares are held.
37
<PAGE>
-------------
International
Equity Funds
-------------
STATEMENTS OF ASSETS AND LIABILITIES as of October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Worldwide SmallCap Troika
Emerging Emerging Global Asia-Pacific Asia Dialog
Countries Markets Technology Equity Growth Russia
Fund Fund Fund Fund Fund Fund
------------- ------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value* $ 178,469,338 $ 65,682,399 $ 8,081,484 $ 15,915,505 $ 3,604,993 $ 48,695,767
Short-term securities, at amortized cost 22,926,151 10,373,265 -- -- -- 1,975,860
Repurchase agreements -- -- -- 740,000 -- --
Cash 462,292 7,191,386 890,502 384,977 84,311 1,515,939
Foreign currency, at value** 978,708 10,214 -- 17,794 262,624 --
Receivable for investments sold 1,499,911 2,867,168 5,626 -- -- 2,917,207
Receivable for shares of beneficial
interest sold 2,229,516 133,873 3,338 4,079,282 718,805 84,843
Dividends and interest receivable 143,582 235,212 3,868 5,209 -- 134,179
Receivable due from affiliate 47,232 -- 47,814 21,810 66,511 --
Other receivable 40,470 10 -- -- 8,911 --
Prepaid expenses 55,627 7,951 1,677 19,183 17,219 23,013
------------- ------------- ------------ ------------ ------------ ------------
Total Assets 206,852,827 86,501,478 9,034,309 21,183,760 4,763,374 55,346,808
------------- ------------- ------------ ------------ ------------ ------------
LIABILITIES:
Payable for investments purchased 9,664,247 4,287,199 -- 552,202 -- 1,145,428
Payable for shares of beneficial
interest reacquired 1,349,243 131,226 3,338 1,638,106 2,885 250,464
Investment advisory fee payable 205,526 69,430 9,673 18,494 4,676 58,565
Distribution fee payable 41,090 80,458 1,935 8,027 935 2,749
Transfer agent fee payable 56,725 11,747 4,630 6,196 7,114 10,917
Administrative services fee payable 34,063 6,943 -- -- 1,085 4,685
Estimated tax liability on Indian
investments 1,597,233 88,692 -- -- -- --
Accrued expenses 306,974 329,430 126,536 100,645 116,951 237,448
------------- ------------- ------------ ------------ ------------ ------------
Total Liabilities 13,255,101 5,005,125 146,112 2,323,670 133,646 1,710,256
------------- ------------- ------------ ------------ ------------ ------------
NET ASSETS $ 193,597,726 $ 81,496,353 $ 8,888,197 $ 18,860,090 $ 4,629,728 $ 53,636,552
============= ============= ============ ============ ============ ============
NET ASSETS WERE COMPRISED OF:
Paid-in capital $ 237,061,309 $ 127,760,983 $ 13,147,443 $ 47,359,237 $ 15,455,160 $139,492,226
Undistributed (distribution in excess)
net investment income) (58,147) (92,507) -- 296,231 -- --
Accumulated net realized gain/loss on
investments, foreign currency and
future contracts (net of foreign tax
on the sale of indian investments of
$1,323,652, $0, $0, $0, $0 and $0,
respectively -- Note 2) (49,128,400) (11,424,744) (238,770) (23,797,507) (9,795,911) (68,683,576)
Net unrealized appreciation
(depreciation) of investments, and
other assets, liabilities and forward
contracts denominated in foreign
currencies (net of estimated tax
liability on Indian investments of
$273,581, $88,692, $0, $0, $0 and
$0, respectively -- see Note 2) 5,722,964 (34,747,379) (4,020,476) (4,997,871) (1,029,521) (17,172,098)
------------- ------------- ------------ ------------ ------------ ------------
Net Assets $ 193,597,726 $ 81,496,353 $ 8,888,197 $ 18,860,090 $ 4,629,728 $ 53,636,552
============= ============= ============ ============ ============ ============
*Cost 172,476,656 100,068,422 12,101,862 20,913,515 4,632,559 65,867,865
**Cost of foreign currency 978,697 4,253 -- 17,828 264,581 --
</TABLE>
See Accompanying Notes to Financial Statements
38
<PAGE>
<TABLE>
<CAPTION>
Worldwide SmallCap Troika
Emerging Emerging Global Asia-Pacific Asia Dialog
Countries Markets Technology Equity Growth Russia
Fund Fund Fund Fund Fund Fund
----------- ----------- -------------- ----------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Class A:
Net assets $59,541,217 $81,496,353 $ 8,888,197 $ 8,471,247 $ 4,629,728 $ 53,636,552
----------- ----------- -------------- ----------- -------------- --------------
Shares authorized unlimited unlimited 1,000,000,000 24,000,000 1,000,000,000 1,000,000,000
----------- ----------- -------------- ----------- -------------- --------------
Par value $ 0.00 $ 0.01 $ 0.001 $ 1.00 $ 0.001 $ 0.001
----------- ----------- -------------- ----------- -------------- --------------
Shares outstanding 3,646,780 9,314,219 1,130,652 1,697,869 809,868 7,497,260
----------- ----------- -------------- ----------- -------------- --------------
Net asset value and redemption per
share (net assets/shares outstanding) $ 16.33 $ 8.75 $ 7.86 $ 4.99 $ 5.72 $ 7.15
=========== =========== ============== =========== ============== ==============
Maximum offering price per share (net
asset value plus sales charge of
5.75% of offering price) $ 17.32 $ 9.28 $ 8.34 $ 5.29 $ 6.07 $ 7.59
=========== =========== ============== =========== ============== ==============
Class B:
Net assets $22,707,035 n/a n/a $ 7,678,394 n/a n/a
----------- ----------- -------------- ----------- -------------- --------------
Shares authorized unlimited n/a n/a 20,000,000 n/a n/a
----------- ----------- -------------- ----------- -------------- --------------
Par value $ 0.00 n/a n/a $ 1.00 n/a n/a
----------- ----------- -------------- ----------- -------------- --------------
Shares outstanding 1,383,679 n/a n/a 1,598,652 n/a n/a
----------- ----------- -------------- ----------- -------------- --------------
Net asset value offering and
redemption price per share (net
assets/shares outstanding)* $ 16.41 n/a n/a $ 4.80 n/a n/a
=========== =========== ============== =========== ============== ==============
Class C:
Net assets $22,455,463 n/a n/a n/a n/a n/a
----------- ----------- -------------- ----------- -------------- --------------
Shares authorized unlimited n/a n/a n/a n/a n/a
----------- ----------- -------------- ----------- -------------- --------------
Par value $ 0.00 n/a n/a n/a n/a n/a
----------- ----------- -------------- ----------- -------------- --------------
Shares outstanding 1,419,906 n/a n/a n/a n/a n/a
----------- ----------- -------------- ----------- -------------- --------------
Net asset value offering and
redemption price per share (net
assets/shares outstanding)* $ 15.81 n/a n/a n/a n/a n/a
=========== =========== ============== =========== ============== ==============
Class M:
Net assets n/a n/a n/a $ 2,710,449 n/a n/a
----------- ----------- -------------- ----------- -------------- --------------
Shares authorized n/a n/a n/a 12,000,000 n/a n/a
----------- ----------- -------------- ----------- -------------- --------------
Par value n/a n/a n/a $ 1.00 n/a n/a
----------- ----------- -------------- ----------- -------------- --------------
Shares outstanding n/a n/a n/a 558,552 n/a n/a
----------- ----------- -------------- ----------- -------------- --------------
Net asset value and redemption price
per share (net assets/shares
outstanding) n/a n/a n/a $ 4.85 n/a n/a
=========== =========== ============== =========== ============== ==============
Maximum offering price per share (net
asset value plus sales charge of
3.50% of offering price) n/a n/a n/a $ 5.03 n/a n/a
=========== =========== ============== =========== ============== ==============
Class Q:
Net assets $88,894,011 n/a n/a n/a n/a n/a
----------- ----------- -------------- ----------- -------------- --------------
Shares authorized unlimited n/a n/a n/a n/a n/a
----------- ----------- -------------- ----------- -------------- --------------
Par value $ 0.00 n/a n/a n/a n/a n/a
----------- ----------- -------------- ----------- -------------- --------------
Shares outstanding 5,288,407 n/a n/a n/a n/a n/a
----------- ----------- -------------- ----------- -------------- --------------
Net asset value offering and
redemption price per share (net
assets/shares outstanding) $ 16.81 n/a n/a n/a n/a n/a
=========== =========== ============== =========== ============== ==============
</TABLE>
* Redemption price varies by length of time shares held.
39
<PAGE>
-----------------------
International Income
& Precious Metals Funds
-----------------------
STATEMENTS OF ASSETS AND LIABILITIES as of October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global
Gold Silver Income
Fund Fund Fund
------------- ------------- -------------
<S> <C> <C> <C>
ASSETS:
Investments in securities, at value* $ 35,294,236 $ 10,514,367 $ 13,948,071
Short-term securities, at amortized cost 4,445,685 3,457,755 296,048
Cash 421,784 788,377 110,698
Foreign cash, at value -- -- 88,120
Receivable for investments sold 1,091,083 82,049 14,341
Receivable for shares of beneficial interest sold 4,500 29,508 24,946
Dividends and interest receivable 25,003 14,979 553,904
Other receivable 3,777 1,055 27,157
Prepaid expenses 2,533 5,505 365
------------- ------------- -------------
Total Assets 41,288,601 14,893,595 15,063,650
------------- ------------- -------------
LIABILITIES:
Payable for shares of beneficial interest reacquired 48,680 60,106 216
Payable to custodian 903,957 -- --
Investment advisory fee payable 36,282 13,308 13,506
Payable due to affiliate 3,560
Payable for future variation margin -- -- 2,347
Distribution fee payable 4,998 3,327 1,366
Transfer agent fee payable -- -- 1,877
Administrative services fee payable 3,628 1,331 1,351
Accrued expenses 161,082 121,084 135,944
------------- ------------- -------------
Total Liabilities 1,158,627 202,716 156,607
------------- ------------- -------------
NET ASSETS $ 40,129,974 $ 14,690,879 $ 14,907,043
============= ============= =============
NET ASSETS WERE COMPRISED OF:
Paid-in-capital $ 136,490,064 $ 36,157,609 $ 20,873,224
Undistributed net investment income 49,339 177,221 --
Accumulated net realized gain/loss on investments
foreign currency and future contracts (82,878,255) (14,137,606) (1,056,127)
Net unrealized appreciation (depreciation) of
investments foreign currency and future contracts (13,531,174) (7,506,345) (4,910,054)
------------- ------------- -------------
Net Assets $ 40,129,974 $ 14,690,879 $ 14,907,043
============= ============= =============
* Cost of securities $ 48,831,126 $ 18,020,694 $ 18,811,991
** Cost of foreign currency -- -- 87,933
</TABLE>
See Accompanying Notes to Financial Statements
40
<PAGE>
<TABLE>
<CAPTION>
Global
Gold Silver Income
Fund Fund Fund
-------------- -------------- --------------
<S> <C> <C> <C>
Class A:
Net assets $ 40,129,974 $ 14,690,879 $ 14,904,297
-------------- -------------- --------------
Shares authorized 1,000,000,000 1,000,000,000 1,000,000,000
-------------- -------------- --------------
Par value $ 0.001 $ 0.001 $ 0.001
-------------- -------------- --------------
Shares outstanding 17,712,791 6,874,136 1,695,605
-------------- -------------- --------------
Net asset value and redemption value per share
(net assets/shares outstanding) $ 2.27 $ 2.14 $ 8.79
============== ============== ==============
Maximum offering price per share (net asset
value plus sales charge of 5.75%, 5.75% and
4.75% of offering price for Gold Fund, Silver
Fund and Global Income Fund, respectively) $ 2.40 $ 2.27 $ 9.23
============== ============== ==============
Class C:
Net assets n/a n/a $ 2,746
-------------- -------------- --------------
Shares authorized n/a n/a unlimited
-------------- -------------- --------------
Par value $ n/a $ n/a $ 0.00
-------------- -------------- --------------
Shares outstanding n/a n/a 290
-------------- -------------- --------------
Net asset value and offering price per share
(net assets/shares outstanding)* $ n/a $ n/a $ 9.47
============== ============== ==============
</TABLE>
* Redemption price varies by length of time shares are held.
41
<PAGE>
-------------
International
Equity Funds
-------------
STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global
Worldwide Corporate
Growth Leaders
Fund Fund
------------------------------ ------------------------------
For the For the For the For the
period year period year
July 1, 2000 ended January 1, 2000 ended
to October 31, June 30, to October 31, December 31,
2000 2000 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes) $ 1,232,902 $ 2,256,981 $ 147,665 $ 206,149
Interest 772,158 1,470,882 41,640 23,187
Other income -- -- -- --
------------- ------------- ------------- -------------
Total investment income 2,005,060 3,727,863 189,305 229,336
------------- ------------- ------------- -------------
EXPENSES:
Investment advisory and
management fees 2,199,958 4,327,642 151,843 176,043
Distribution fees:
Class A 296,248 515,322 11,029 --
Class B 451,319 770,751 -- --
Class C 791,255 1,751,460 -- --
Class Q 42,066 94,045 -- --
Transfer agent fees and expenses 320,899 628,483 22,798 37,323
Administrative service fee -- 24,761(1) 4,411 --
Custodian and fund accounting
expenses 156,540 348,012 13,217 25,700
Printing and postage expenses 54,489 160,859 21,832 19,724
Registration fees 34,569 43,713 13,965 11,888
Professional fees 13,284 51,263 30,327 40,984
Trustee expenses 6,150 18,000 101,767 16,691
Miscellaneous expenses 25,996 133,553 15,670 16,199
------------- ------------- ------------- -------------
4,392,773 8,867,864 386,859 344,552
Less:
Waived and reimbursed
fees/(recoupment) (25,414) -- 26,595 --
------------- ------------- ------------- -------------
Total expenses 4,418,187 8,867,864 360,264 344,552
------------- ------------- ------------- -------------
Net investment income (loss) (2,413,127) (5,140,001) (170,959) (115,216)
------------- ------------- ------------- -------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY:
Net realized gain (loss) on
investments (1,077,591) 32,664,018 1,726,013 1,026,581
Net realized gain (loss) on foreign
currency (3,632,015) (1,744,754) (22,390) (40,254)
Net change in unrealized
appreciation (depreciation) of
investments and foreign currency (78,001,428) 91,792,764 (3,925,391) 5,088,015
------------- ------------- ------------- -------------
Net realized and unrealized
gain (loss) on investments
and foreign currency (82,711,034) 122,712,028 (2,221,768) 6,074,342
------------- ------------- ------------- -------------
Increase (decrease) in net assets
resulting from operations $ (85,124,161) $ 117,572,027 $ (2,392,727) $ 5,959,126
============= ============= ============= =============
International
Value International
Fund Fund
------------- ------------------------------
For the For the For the
year period year
ended January 1, 2000 ended
October 31, to October 31, December 31,
2000 2000 1999
------------- ------------- -------------
INVESTMENT INCOME:
Dividends (net of foreign taxes) $ 40,782,003 $ 339,999 $ 311,047
Interest 3,610,484 117,417 86,308
Other income -- -- --
------------- ------------- -------------
Total investment income 44,392,487 457,416 397,355
------------- ------------- -------------
EXPENSES:
Investment advisory and
management fees 15,936,553 228,277 224,416
Distribution fees:
Class A 2,119,691 24,640 17,424
Class B 3,859,074 38 --
Class C 4,868,323 56 --
Class Q 35,847 -- --
Transfer agent fees and expenses 1,593,655 21,910 32,485
Administrative service fee 1,755,565 21,803 --
Custodian and fund accounting
expenses 1,318,066 50,865 68,545
Printing and postage expenses 159,365 9,559 25,911
Registration fees 356,967 18,555 11,513
Professional fees 98,014 24,777 30,200
Trustee expenses 41,980 100,827 17,379
Miscellaneous expenses 33,498 8,432 16,382
------------- ------------- -------------
32,176,598 509,739 444,255
Less:
Waived and reimbursed
fees/(recoupment) -- -- --
------------- ------------- -------------
Total expenses 32,176,598 509,739 444,255
------------- ------------- -------------
Net investment income (loss) 12,215,889 (52,323) (46,900)
------------- ------------- -------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY:
Net realized gain (loss) on
investments 239,567,326 2,619,862 6,827,590
Net realized gain (loss) on foreign
currency (910,801) (53,626) (107,950)
Net change in unrealized
appreciation (depreciation) of
investments and foreign currency (41,147,980) (5,596,890) 2,440,717
------------- ------------- -------------
Net realized and unrealized
gain (loss) on investments
and foreign currency 197,508,545 (3,030,654) 9,160,357
------------- ------------- -------------
Increase (decrease) in net assets
resulting from operations $ 209,724,434 $ (3,082,977) $ 9,113,457
============= ============= =============
</TABLE>
----------
(1) Reflected as shareholder service fee in the June 30, 2000 financial
statements.
See Accompanying Notes to Financial Statements
42
<PAGE>
-------------
International
Equity Funds
-------------
STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International International Emerging
Core SmallCap Markets
Growth Growth Value
Fund Fund Fund
------------------------------ ------------------------------ -------------
For the For the For the For the For the
period year period year year
July 1, 2000 ended July 1, 2000 ended ended
to October 31, June 30, to October 31, June 30, October 31,
2000 2000 2000 2000 2000
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes) $ 297,428 $ 499,020 $ 798,529 $ 1,791,777 $ 595,814
Interest 68,680 205,365 1,298,101 2,145,159 15,402
------------- ------------- ------------- ------------- -------------
Total investment income 366,108 704,385 2,096,630 3,936,936 611,216
------------- ------------- ------------- ------------- -------------
EXPENSES:
Investment advisory and
management fees 288,517 698,942 2,362,535 4,285,711 181,790
Distribution fees:
Class A 26,372 65,630 330,792 559,207 23,410
Class B 70,469 173,309 453,253 796,853 44,830
Class C 89,573 194,645 486,408 798,961 58,928
Class Q 13,294 35,869 138,277 293,086 --
Transfer agent fees and expenses 58,126 168,428 319,534 561,375 18,179
Administrative service fee -- 9,609(1) -- 28,293(1) 21,960
Custodian and fund accounting
expenses 72,758 194,978 234,069 494,344 17,452
Printing and postage expenses 11,439 28,436 79,286 167,665 1,818
Registration fees 11,737 78,072 46,499 83,587 33,042
Professional fees 3,075 11,733 120,947 54,085 24,183
Trustee expenses 1,722 5,000 12,177 34,991 10,755
Miscellaneous expenses 2,105 55,204 29,142 43,176 2,959
------------- ------------- ------------- ------------- -------------
649,187 1,719,855 4,612,919 8,201,334 439,306
Less:
Waived and reimbursed
fees/(recoupment) 41,295 212,567 (15,793) -- --
------------- ------------- ------------- ------------- -------------
Total expenses 607,892 1,507,288 4,628,712 8,201,334 439,306
------------- ------------- ------------- ------------- -------------
Net investment income (loss) (241,784) (802,903) (2,532,082) (4,264,398) 171,910
------------- ------------- ------------- ------------- -------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY:
Net realized gain (loss) on investments
(net of foreign tax on the sale of
Indian investments of $0, $0,
$784,263, $0 and $0, respectively --
Note 2) 923,712 8,378,791 (4,911,433) 60,928,025 3,362,922
Net realized gain (loss) on foreign
currency (1,359,550) (485,310) (8,476,248) (2,124,426) (128,508)
Net change in unrealized appreciation
(depreciation) of investments and
foreign currency (net of change in
estimated tax liability on Indian
investments of $0, $0, $0, $0 and $0,
respectively -- Note 2) (10,007,118) 7,236,744 (73,243,053) 73,844,281 (2,689,917)
------------- ------------- ------------- ------------- -------------
Net realized and unrealized gain
(loss) on investments and foreign
currency (10,442,956) 15,130,225 (86,630,734) 132,647,880 544,497
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets
resulting from operations $ (10,684,740) $ 14,327,322 $ (89,162,816) $ 128,383,482 $ 716,407
============= ============= ============= ============= =============
</TABLE>
----------
(1) Reflected as shareholder service fee in the June 30, 2000 financial
statements.
See Accompanying Notes to Financial Statements
43
<PAGE>
-------------
International
Equity Funds
-------------
STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Worldwide
Emerging Emerging
Countries Markets
Fund Fund
---------------------------- ----------------------------
For the For the For the For the
period year period year
July 1, 2000 ended January 1, 2000 ended
to October 31, June 30, to October 31, December 31,
2000 2000 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes) $ 679,961 $ 1,758,417 $ 532,092 $ 892,812
Interest 175,362 283,787 396,671 160,425
------------ ------------ ------------ ------------
Total investment income 855,323 2,042,204 928,763 1,053,237
------------ ------------ ------------ ------------
EXPENSES:
Investment advisory and management fees 969,468 2,773,339 1,171,197 785,431
Distribution fees:
Class A 79,524 226,595 262,807 196,336
Class B 90,642 295,635 -- --
Class C 88,953 276,850 -- --
Class M -- -- -- --
Class Q 92,178 249,693 -- --
Transfer agent fees and expenses 131,281 517,621 83,991 107,824
Administrative service fee -- 14,946(1) 41,058 --
Custodian and fund accounting expenses 265,723 682,516 392,925 286,989
Printing and postage expenses 34,563 81,878 197,473 64,800
Registration fees 15,170 77,620 26,246 21,369
Professional fees 12,423 39,069 28,709 35,039
Trustee expenses 5,043 15,000 100,295 20,260
Miscellaneous expenses 195,725 89,734 201,745 54,868
------------ ------------ ------------ ------------
1,980,693 5,340,496 2,506,446 1,572,916
Less:
Waived and reimbursed fees 100,513 346,154 -- --
Redemption fee proceeds -- -- -- --
------------ ------------ ------------ ------------
Total expenses 1,880,180 4,994,342 2,506,446 1,572,916
------------ ------------ ------------ ------------
Net investment income (loss) (1,024,857) (2,952,138) (1,577,683) (519,679)
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on investments
(net of foreign tax on the sale of
Indian investments of $1,489,942, $4,489,899,
$0, $0, $0 and $0, respectively -- Note 2 ) (10,974,819) 39,798,714 30,477,562 8,199,636
Net realized gain (loss) on foreign currency (1,941,282) (303,058) (9,442,252) (177,571)
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency (net of change in estimated tax
liability on Indian investments of $273,581,
$860,486, $88,692, $0, $0 and $0, respectively
-- see note 2) (33,354,364) (3,851,223) (76,866,834) 60,956,572
------------ ------------ ------------ ------------
Net realized and unrealized gain (loss) on
investments and foreign currency (46,270,465) 35,644,433 (55,831,524) 68,978,637
------------ ------------ ------------ ------------
Increase (decrease) in net assets
resulting from operations $(47,295,322) $ 32,692,295 $(57,409,207) $ 68,458,958
============ ============ ============ ============
</TABLE>
Global
Technology
Fund
-----------------------------
For the For the
period period(2)
January 1, 2000 ended
to October 31, December 31,
2000 1999
----------- -----------
INVESTMENT INCOME:
Dividends (net of foreign taxes) $ 31,910 $ --
Interest 39,660 --
----------- -----------
Total investment income 71,570 --
----------- -----------
EXPENSES:
Investment advisory and management fees 102,819 --
Distribution fees:
Class A 6,343 --
Class B -- --
Class C -- --
Class M -- --
Class Q -- --
Transfer agent fees and expenses 23,674 --
Administrative service fee 2,537 --
Custodian and fund accounting expenses 32,145 --
Printing and postage expenses 25,452 --
Registration fees 27,916 --
Professional fees 23,085 1,500
Trustee expenses 100,782 --
Miscellaneous expenses 14,061 16,557
----------- -----------
358,814 18,057
Less:
Waived and reimbursed fees 133,778 --
Redemption fee proceeds 11,109 --
----------- -----------
Total expenses 213,927 18,057
----------- -----------
Net investment income (loss) (142,357) (18,057)
----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on investments
(net of foreign tax on the sale of Indian
investments of $1,489,942, $4,489,899,
$0, $0, $0 and $0, respectively -- Note 2 ) (133,293) --
Net realized gain (loss) on foreign currency (513) --
Net change in unrealized appreciation (depreciation)
of investments and foreign currency (net of
change in estimated tax liability on Indian
investments of $273,581, $860,486, $88,692,
$0, $0 and $0, respectively -- see note 2) (4,020,476) --
----------- -----------
Net realized and unrealized gain (loss) on
investments and foreign currency (4,154,282) --
----------- -----------
Increase (decrease) in net assets
resulting from operations $(4,296,639) $ (18,057)
=========== ===========
----------
(1) Reflected as shareholder service fee in the June 30, 2000 financial
statements.
(2) The Fund commenced operations on December 27, 1999.
See Accompanying Notes to Financial Statements
44
<PAGE>
-------------
International
Equity Funds
-------------
STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SmallCap Troika
Asia-Pacific Asia Dialog
Equity Growth Russia
Fund Fund Fund
------------------------- -------------------------- ---------------------------
For the For the For the For the For the For the
period year period year period year
July 1, 2000 ended January 1, 2000 ended January 1, 2000 ended
to October 31, June 30, to October 31, December 31, to October 31, December 31,
2000 2000 2000 1999 2000 1999
----------- ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes) $ 471,686 $ 429,859 $ 111,940 $ 170,012 $ 190,496 $ 132,013
Interest 15,419 74,595 19,085 23,628 492,305 2,226,744
----------- ----------- ----------- ----------- ----------- ------------
Total investment income 487,105 504,454 131,025 193,640 682,801 2,358,757
----------- ----------- ----------- ----------- ----------- ------------
EXPENSES:
Investment advisory and management fees 96,557 413,123 116,528 167,228 740,035 444,970
Distribution fees:
Class A 8,148 34,682 5,110 -- 170,532 61,804
Class B 25,647 138,885 -- -- --
Class C -- -- -- -- --
Class M 7,729 39,665 -- -- -- --
Class Q -- -- -- -- --
Transfer agent fees and expenses 23,241 119,865 28,792 46,915 64,107 82,677
Administrative service fee 8,549 6,210(1) 2,044 35,801
Custodian and fund accounting expenses 41,454 131,764 36,655 59,911 401,625 343,928
Printing and postage expenses 7,134 11,979 17,216 30,657 28,423 59,977
Registration fees 11,136 36,084 16,938 21,394 18,630 21,198
Professional fees 1,722 4,847 23,967 33,881 45,880 63,559
Trustee expenses 861 2,183 99,886 16,586 131,801 47,142
Miscellaneous expenses 7,938 36,536 30,400 25,473 46,076 57,900
----------- ----------- ----------- ----------- ----------- ------------
240,116 975,823 377,536 402,045 1,682,910 1,183,155
Less:
Waived and reimbursed fees 50,371 145,502 133,713 67,545 -- --
Redemption fee proceeds -- -- 465,732 387,770
----------- ----------- ----------- ----------- ----------- ------------
Total expenses 189,745 830,321 243,823 334,500 1,217,178 795,385
----------- ----------- ----------- ----------- ----------- ------------
Net investment income (loss) 297,360 (325,867) (112,798) (140,860) (534,377) 1,563,372
----------- ----------- ----------- ----------- ----------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on investments
(net of foreign tax on sale of Indian
investments of $0, $4,489,899, $0, $0,
$0 and $0, respectively -- Note 2) (13,832) 7,546,867 1,381,553 2,483,913 8,296,765 (27,725,310)
Net realized gain (loss) on
foreign currency (69,352) (47,823) (44,791) (131,303) (118,397) (7,739,434)
Net change in unrealized appreciation
(depreciation) of investments and
foreign currency (8,020,905) (5,113,014) (4,414,361) 2,576,380 (4,834,914) 66,709,158
----------- ----------- ----------- ----------- ----------- ------------
Net realized and unrealized gain (loss)
on investments and foreign currency (8,104,089) 2,386,030 (3,077,599) 4,928,990 3,343,454 31,244,414
----------- ----------- ----------- ----------- ----------- ------------
Increase (decrease) in net assets
resulting from operations $(7,806,729) $ 2,060,163 $(3,190,397) $ 4,788,130 $ 2,809,077 $ 32,807,786
=========== =========== =========== =========== =========== ============
</TABLE>
----------
(1) Reflected as shareholder service fee in the June 30, 2000 financial
statements.
See Accompanying Notes to Financial Statements
45
<PAGE>
-----------------------
International Income
& Precious Metals Funds
-----------------------
STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global
Gold Silver Income
Fund Fund Fund
---------------------------- -------------------------- --------------------------
For the For the For the For the For the For the
period year period year period year
January 1, 2000 ended January 1, 2000 ended January 1, 2000 ended
to October 31, December 31, to October 31, December 31, to October 31, December 31,
2000 1999 2000 1999 2000 1999
------------ ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes) $ 994,673 $ 977,174 $ 407,477 $ 466,796 $ -- $ --
Interest 113,277 193,852 183,811 210,793 2,664,406 4,475,808
------------ ------------ ----------- ----------- ----------- -----------
Total investment income 1,107,950 1,171,026 591,288 677,589 2,664,406 4,475,808
------------ ------------ ----------- ----------- ----------- -----------
EXPENSES:
Investment advisory and management fees 439,593 583,491 167,432 261,004 240,175 334,433
Distribution fees:
Class A 63,622 75,410 10,728 -- 30,197 40,884
Transfer agent fees and expenses 117,312 174,169 47,120 97,868 18,891 43,177
Administrative service fee 11,744 12,274 22,154
Custodian and fund accounting expenses 47,369 109,894 20,859 68,619 38,624 82,008
Printing and postage expenses 70,753 59,842 34,618 35,196 18,422 32,348
Registration fees 20,166 25,444 18,213 12,899 17,148 16,449
Professional fees 37,991 80,503 28,782 38,837 47,994 34,786
Trustee expenses 102,844 17,583 102,037 16,642 100,869 18,056
Miscellaneous expenses 71,082 59,824 23,429 18,986 47,986 19,589
------------ ------------ ----------- ----------- ----------- -----------
982,476 1,186,160 465,492 550,051 582,460 621,730
Less:
Waived and reimbursed fees -- -- 53,262 -- -- --
------------ ------------ ----------- ----------- ----------- -----------
Total expenses 982,476 1,186,160 412,230 550,051 582,460 621,730
------------ ------------ ----------- ----------- ----------- -----------
Net investment income (loss) 125,474 (15,134) 179,058 127,538 2,081,946 3,854,078
------------ ------------ ----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY:
Net realized loss on investments (8,421,625) (25,580,452) (4,714,924) (641,295) (746,692) (309,304)
Net realized loss on foreign currency (2,091,095) (8,439) (623,115) (293) (1,467,917) (1,437,952)
Net change in unrealized depreciation
of investments and foreign currency (10,053,228) 32,389,359 (1,018,732) 2,489,979 (1,034,374) (2,297,809)
------------ ------------ ----------- ----------- ----------- -----------
Net realized and unrealized loss on
investments and foreign currency (20,565,948) 6,800,468 (6,356,771) 1,848,391 (3,248,983) (4,045,065)
------------ ------------ ----------- ----------- ----------- -----------
Net decrease in net assets resulting
from operations $(20,440,474) $ 6,785,334 $(6,177,713) $ 1,975,929 $(1,167,037) $ (190,987)
============ ============ =========== =========== =========== ===========
</TABLE>
----------
(1) Reflected as shareholder service fee in the June 30, 2000 financial
statements.
See Accompanying Notes to Financial Statements
46
<PAGE>
-------------
International
Equity Funds
-------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Worldwide Growth Fund
-----------------------------------------------------------------
For the period For the year For the period For the year
July 1, 2000 ended April 1, 1999 ended
to October 31, June 30, to June 30, March 31,
2000 2000 1999 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
From Operations:
Net investment income (loss) $ (2,413,127) $ (5,140,001) $ (238,891) $ (1,461,258)
Net realized gain (loss) from
investments (1,077,591) 32,664,018 5,142,968 34,678,990
Net realized gain (loss) on
foreign currency (3,632,015) (1,744,754) (317,798) (229,650)
Net change in unrealized
appreciation (depreciation)
of investments and foreign
currency (78,001,428) 91,792,764 20,367,556 12,614,021
------------- ------------- ------------- -------------
Increase (decrease) in
net assets resulting from
operations (85,124,161) 117,572,027 24,953,835 45,602,103
Distributions to shareholders:
From net investment income:
Class A -- -- -- --
Class B -- -- -- --
Class C -- -- -- --
Class M -- -- -- --
Class Q -- -- -- --
Retail Classes -- -- -- (136,708)(1)
Advisory and Institutional
Classes -- -- -- (337,084)(1)
From realized gain from
investments -- (37,665,102) -- (21,269,643)(2)
------------- ------------- ------------- -------------
Total distributions -- (37,665,102) -- (21,743,435)
------------- ------------- ------------- -------------
From Capital Share Transactions:
Net proceeds from sales of shares 187,453,816 664,789,596 53,831,659 242,170,764
Net asset value of shares issued to
shareholders in reinvestment of
dividends -- 33,052,649 -- 5,494,245
------------- ------------- ------------- -------------
187,453,816 697,842,245 53,831,659 247,665,009
Cost of shares redeemed (130,618,094) (337,872,684) (106,485,390)(3) (168,874,579)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
derived from capital share
transactions 56,835,722 359,969,561 (52,653,731) 78,790,430
------------- ------------- ------------- -------------
Net increase (decrease) in net
assets (28,288,439) 439,876,486 (27,699,896) 102,649,098
Net Assets:
Beginning of period 660,179,270 220,302,784 248,002,680 145,353,582
------------- ------------- ------------- -------------
End of period $ 631,890,831 $ 660,179,270 $ 220,302,784 $ 248,002,680
============= ============= ============= =============
Undistributed (distribution in excess)
net investment income $ (587,286) $ -- $ -- $ (7,189,744)
============= ============= ============= =============
Global Corporate Leaders Fund
----------------------------------------------
For the period Year For the year
January 1, 2000 ended ended
to October 31, December 31, December 31,
2000 1999 1998
------------ ------------ ------------
From Operations:
Net investment income (loss) $ (170,959) $ (115,216) $ (14,935)
Net realized gain (loss) from
investments 1,726,013 1,026,581 5,303,730
Net realized gain (loss) on
foreign currency (22,390) (40,254) 121,618
Net change in unrealized
appreciation (depreciation)
of investments and foreign
currency (3,925,391) 5,088,015 231,415
------------ ------------ ------------
Increase (decrease) in
net assets resulting from
operations (2,392,727) 5,959,126 5,641,828
Distributions to shareholders:
From net investment income:
Class A -- (1,147,467) (1,176,896)
Class B -- -- --
Class C -- -- --
Class M -- -- --
Class Q -- -- --
Retail Classes -- -- --
Advisory and Institutional
Classes -- -- --
From realized gain from
investments -- (123,607) (3,427,660)
------------ ------------ ------------
Total distributions -- (1,271,074) (4,604,556)
------------ ------------ ------------
From Capital Share Transactions:
Net proceeds from sales of shares 4,872,027 2,893,261 4,884,051
Net asset value of shares issued to
shareholders in reinvestment of
dividends -- 917,731 4,402,616
------------ ------------ ------------
4,872,027 3,810,992 9,286,667
Cost of shares redeemed (5,203,040) (6,684,363) (27,606,682)
------------ ------------ ------------
Net increase (decrease) in net assets
derived from capital share
transactions (331,013) (2,873,371) (18,320,015)
------------ ------------ ------------
Net increase (decrease) in net
assets (2,723,740) 1,814,681 (17,282,743)
Net Assets:
Beginning of period 19,617,233 17,802,552 35,085,295
------------ ------------ ------------
End of period $ 16,893,493 $ 19,617,233 $ 17,802,552
============ ============ ============
Undistributed (distribution in excess)
net investment income $ -- $ (269) $ 334,184
============ ============ ============
</TABLE>
----------
(1) As reflected in the June 30, 2000 Annual Report.
(2) Includes distributions from realized gains from both retail classes along
with advisory and institutional classes.
(3) Includes Class I redemptions of $80,662,778.
See Accompanying Notes to Financial Statements
47
<PAGE>
-------------
International
Equity Funds
-------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International Value Fund International Fund
---------------------------------- --------------------------------------------
Year Year For the period For the year For the year
Ended Ended January 1, 2000 Ended Ended
October 31, October 31, to October 31, December 31, December 31,
2000 1999 2000 1999 1998
--------------- --------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
From Operations:
Net investment income (loss) $ 12,215,889 $ 3,580,736 $ (52,323) $ (46,900) $ 75,759
Net realized gain (loss) from investments 239,567,326 49,724,160 2,619,862 6,827,590 1,294,568
Net realized gain (loss) on foreign currency (910,801) 3,476,523 (53,626) (107,950) 80,197
Net change in unrealized appreciation
(depreciation) of investments and
foreign currency (41,147,980) 128,073,707 (5,596,890) 2,440,717 2,145,676
--------------- --------------- ------------ ------------ ------------
Increase (decrease) in net assets
resulting from operations 209,724,434 184,855,126 (3,082,977) 9,113,457 3,596,200
Distributions to Shareholders:
From net investment income:
Class A (3,809,622) (2,447,955) (1,681,140) (46,770) (116,960)
Class B (593,913) (638,225) -- -- --
Class C (828,109) (652,956) -- -- --
Class Q -- -- -- -- --
From realized gain from investments (53,012,739) (28,295,922) (159,635) (5,598,256) (695,462)
--------------- --------------- ------------ ------------ ------------
Total distributions (58,244,383) (32,035,058) (1,840,775) (5,645,026) (812,422)
--------------- --------------- ------------ ------------ ------------
From Capital Share Transactions:
Net proceeds from sales of shares 1,843,922,647 765,122,980 22,887,629 5,619,698 11,440,387
Net asset value of shares issued to
shareholders in reinvestment of dividends 44,206,140 25,417,235 1,011,365 4,382,040 669,485
--------------- --------------- ------------ ------------ ------------
1,888,128,787 790,540,215 23,898,994 10,001,738 12,109,872
Cost of shares redeemed (1,091,605,981) (397,092,669) (13,461,366) (12,165,686) (10,843,052)
--------------- --------------- ------------ ------------ ------------
Net increase (decrease) in net assets
derived from capital share transactions 796,522,806 393,447,546 10,437,628 (2,163,948) 1,266,820
--------------- --------------- ------------ ------------ ------------
Net increase in net assets 948,002,857 546,267,614 5,513,876 1,304,483 4,050,598
Net Assets:
Beginning of period 1,040,913,097 494,645,483 25,304,198 23,999,715 19,949,117
--------------- --------------- ------------ ------------ ------------
End of period $ 1,988,915,954 $ 1,040,913,097 $ 30,818,074 $ 25,304,198 $ 23,999,715
=============== =============== ============ ============ ============
Undistributed (distribution in excess of)
net investment income $ 10,143,582 $ 3,538,149 $ (44,363) $ 220,248 $ 154,188
=============== =============== ============ ============ ============
</TABLE>
See Accompanying Notes to Financial Statements
48
<PAGE>
-------------
International
Equity Funds
-------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International Core Growth Fund
-----------------------------------------------------------------
For the period Year For the period For the year
July 1, 2000 Ended April 1, 1999 Ended
to October 31, June 30, to June 30, March 31,
2000 2000 1999 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
From Operations:
Net investment income (loss) $ (241,784) $ (802,903) $ 69,633 $ (310,557)
Net realized gain from investments 923,712 8,378,791 4,193,951 793,552
Net realized loss on foreign currency (1,359,550) (485,310) (280,912) (1,322,452)
Net change in unrealized appreciation (depreciation)
of investments and foreign currency (10,007,118) 7,236,744 4,018,188 13,512,294
------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting
from operations (10,684,740) 14,327,322 8,000,860 12,672,837
Distributions to Shareholders:
From net investment income:
Class A -- -- -- --
Class B -- -- -- --
Class C -- -- -- --
Class Q -- -- -- --
Retail Classes -- -- -- (205,129)(1)
Advisory and Institutional Classes -- (1,678) -- (29,622)(1)
From realized gain from investments -- (2,936,042) -- (168,744)(2)
------------- ------------- ------------- -------------
Total distributions -- (2,937,720) -- (403,495)
------------- ------------- ------------- -------------
From Capital Share Transactions:
Net proceeds from sales of shares 66,836,057 192,088,330 35,644,077 173,884,589
Net asset value of shares issued to
shareholders in reinvestment of dividends -- 2,747,516 -- 228,203
------------- ------------- ------------- -------------
66,836,057 194,835,846 35,644,077 174,112,792
Cost of shares redeemed (61,845,481) (164,147,202) (160,094,007)(3) (82,311,581)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
derived from capital share transactions 4,990,576 30,688,644 (124,449,930) 91,801,211
------------- ------------- ------------- -------------
Net increase (decrease) in net assets (5,694,164) 42,078,246 (116,449,070) 104,070,553
Net Assets:
Beginning of period 87,846,778 45,768,532 162,217,602 58,147,049
------------- ------------- ------------- -------------
End of period $ 82,152,614 $ 87,846,778 $ 45,768,532 $ 162,217,602
============= ============= ============= =============
Undistributed (distribution in excess of)
net investment income $ 742,176 $ -- $ 69,633 $ (647,924)
============= ============= ============= =============
</TABLE>
----------
(1) As reflected in the June 30, 2000 Annual Report.
(2) Includes distributions from realized gains from both retail classes along
with advisory and institutional classes.
(3) Includes Class I redemptions of $112,851,333.
See Accompanying Notes to Financial Statements
49
<PAGE>
-------------
International
Equity Funds
-------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International Small Cap Growth Fund
-----------------------------------------------------------------------
For the period Year For the period For the year
July 1, 2000 Ended April 1, 1999 ended
to October 31, June 30, to June 30, March 31,
2000 2000 1999 1999
--------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
From Operations:
Net investment income (loss) $ (2,532,082) $ (4,264,398) $ (217,461) $ (725,193)
Net realized gain (loss) from investments (4,911,433) 60,928,025 5,411,890 8,536,211
Net realized gain (loss) on foreign currency (8,476,248) (2,124,426) (79,978) (310,687)
Net change in unrealized appreciation (depreciation)
of investments and foreign currency (73,243,053) 73,844,281 11,694,205 14,357,916
--------------- --------------- ------------- -------------
Increase (decrease) in net assets
resulting from operations (89,162,816) 128,383,482 16,808,656 21,858,247
From Dividends to Shareholders:
From net investment income:
Class A -- -- -- --
Class B -- -- -- --
Class C -- -- -- --
Class Q -- -- -- --
Retail Classes -- -- -- --
Advisory and Institutional Classes -- -- -- (76,552)(1)
From realized gain from investments -- (17,147,337) -- (4,000,132)(2)
--------------- --------------- ------------- -------------
Total distributions -- (17,147,337) -- (4,076,684)
--------------- --------------- ------------- -------------
From Capital Share Transactions:
Net proceeds from sales of shares 443,296,214 1,305,859,725 48,190,262 194,823,908
Net asset value of shares issued to
shareholders in reinvestment of dividends -- 15,848,417 -- 3,425,742
--------------- --------------- ------------- -------------
443,296,214 1,321,708,142 48,190,262 198,249,650
Cost of shares redeemed (370,749,870) (832,581,584) (103,559,352)(3) (142,304,879)
--------------- --------------- ------------- -------------
Net increase (decrease) in net assets
derived from capital share transactions 72,546,344 489,126,558 (55,369,090) 55,944,771
--------------- --------------- ------------- -------------
Net increase (decrease) in net assets (16,616,472) 600,362,703 (38,560,434) 73,726,334
Net Assets:
Beginning of period 718,419,060 118,056,357 156,616,791 82,890,457
--------------- --------------- ------------- -------------
End of period $ 701,802,588 $ 718,419,060 $ 118,056,357 $ 156,616,791
=============== =============== ============= =============
Accumulated net investment loss $ (3,454,110) $ -- $ -- $ (1,982,021)
=============== =============== ============= =============
</TABLE>
----------
(1) As reflected in the June 30, 2000 Annual Report.
(2) Includes distributions from realized gains from both retail classes along
with advisory and institutional classes.
(3) Includes Class I redemptions of $73,163,306.
See Accompanying Notes to Financial Statements
50
<PAGE>
-------------
International
Equity Funds
-------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
Emerging Markets Value Fund
------------------------------
For the period For the year
November 1, 1999 ended
to October 31, October 31,
2000 1999
------------ ------------
From Operations:
Net investment income (loss) $ 171,910 $ 142,115
Net realized gain (loss) from
investments 3,362,922 926,219
Net realized gain (loss) on
foreign currency (128,508) (9,987)
Net change in unrealized
appreciation (depreciation) of
investments and foreign currency (2,689,917) 3,931,451
------------ ------------
Increase (decrease) in net assets
resulting from operations 716,407 4,989,798
Distributions to Shareholders:
From net investment income:
Class A (98,414) (68,673)
Class B (13,808) (40,034)
Class C (33,528) (39,146)
Retail Classes -- --
Advisory and Institutional Classes -- --
From realized gain from investments (803,574) --
------------ ------------
Total distributions (949,324) (147,853)
------------ ------------
From Capital Share Transactions:
Net proceeds from sales of shares 3,593,599 10,710,032
Net asset value of shares issued to
shareholders in reinvestment of
dividends 775,209 101,215
------------ ------------
4,368,808 10,811,247
Cost of shares redeemed (10,796,459) (5,576,842)
------------ ------------
Net increase (decrease) in net assets
derived from capital share
transactions (6,427,651) 5,234,405
------------ ------------
Net increase (decrease) in net assets (6,660,568) 10,076,350
Net Assets:
Beginning of period 19,778,258 9,701,908
------------ ------------
End of period $ 13,117,690 $ 19,778,258
============ ============
Undistributed net investment income $ 143,820 $ 124,077
============ ============
<TABLE>
<CAPTION>
Emerging Countries Fund
-----------------------------------------------------------------
For the period For the year For the period For the year
July 1, 2000 ended April 1, 1999 ended
to October 31, June 30, to June 30, March 31,
2000 2000 1999 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
From Operations:
Net investment income (loss) $ (1,024,857) $ (2,952,138) $ (30,573) $ (444,466)
Net realized gain (loss) from
investments (10,974,819) 39,798,714 11,704,157 (82,042,109)
Net realized gain (loss) on
foreign currency (1,941,282) (303,058) (465,273) (1,781,198)
Net change in unrealized
appreciation (depreciation) of
investments and foreign currency (33,354,364) (3,851,223) 51,126,351 10,517,870
------------- ------------- ------------- -------------
Increase (decrease) in net assets
resulting from operations (47,295,322) 32,692,295 62,334,662 (73,749,903)
Distributions to Shareholders:
From net investment income:
Class A -- -- -- --
Class B -- -- -- --
Class C -- -- -- --
Retail Classes -- -- -- (105,494)(1)
Advisory and Institutional Classes -- -- -- (676,244)(1)
From realized gain from investments -- -- -- (1,117,064)(2)
------------- ------------- ------------- -------------
Total distributions -- -- -- (1,898,802)
------------- ------------- ------------- -------------
From Capital Share Transactions:
Net proceeds from sales of shares 66,531,341 250,385,738 38,136,033 234,887,012
Net asset value of shares issued to
shareholders in reinvestment of
dividends -- -- -- 1,499,434
------------- ------------- ------------- -------------
66,531,341 250,385,738 38,136,033 236,386,446
Cost of shares redeemed (80,132,252) (211,768,273) (199,492,674)(3) (160,102,083)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
derived from capital share
transactions (13,600,911) 38,617,465 (161,356,641) 76,284,363
------------- ------------- ------------- -------------
Net increase (decrease) in net assets (60,896,233) 71,309,760 (99,021,979) 635,658
Net Assets:
Beginning of period 254,493,959 183,184,199 282,206,178 281,570,520
------------- ------------- ------------- -------------
End of period $ 193,597,726 $ 254,493,959 $ 183,184,199 $ 282,206,178
============= ============= ============= =============
Undistributed net investment income $ (58,147) $ -- $ -- $ (2,164,624)
============= ============= ============= =============
</TABLE>
----------
(1) As reflected in the June 30, 2000 Annual Report.
(2) Includes distributions from realized gains from both retail classes along
with advisory and institutional classes.
(3) Includes Class I redemptions of $167,510,018.
See Accompanying Notes to Financial Statements
51
<PAGE>
-------------
International
Equity Funds
-------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Worldwide Emerging Markets Fund
-----------------------------------------------
For the period Year For the year
January 1, 2000 ended ended
to October 31, December 31, December 31,
2000 1999 1998
------------- ------------- -------------
<S> <C> <C> <C>
From Operations:
Net investment income (loss) $ (1,577,683) $ (519,679) $ 1,130,655
Net realized gain (loss) from investments 30,477,562 8,199,636 (36,473,430)
Net realized loss on foreign currency (9,442,252) (177,571) (100,717)
Net change in unrealized appreciation (depreciation)
of investments and foreign currency (76,866,834) 60,956,572 891,315
------------- ------------- -------------
Increase (decrease) in net assets resulting from operations (57,409,207) 68,458,958 (34,552,177)
Distributions to Shareholders:
From net investment income:
Class A -- (286,571) (870,294)
Class B -- -- --
Class C -- -- --
Retail Classes -- -- --
Advisory and Institutional Classes -- -- --
From realized gain from investments -- -- --
------------- ------------- -------------
Total distributions -- (286,571) (870,294)
------------- ------------- -------------
From Capital Share Transactions:
Net proceeds from sales of shares 217,321,414 99,235,547 55,113,742
Net asset value of shares issued to shareholders
in reinvestment of dividends -- 268,725 806,004
------------- ------------- -------------
217,321,414 99,504,272 55,919,746
Cost of shares redeemed (233,409,624) (78,005,927) (92,859,973)
------------- ------------- -------------
Net increase (decrease) in net assets derived
from capital share transactions (16,088,210) 21,498,345 (36,940,227)
------------- ------------- -------------
Net increase (decrease) in net assets (73,497,417) 89,670,732 (72,362,698)
Net Assets:
Beginning of period 154,993,770 65,323,038 137,685,736
------------- ------------- -------------
End of period $ 81,496,353 $ 154,993,770 $ 65,323,038
============= ============= =============
Distribution in excess of net investment income $ (92,507) $ (119,233) $ 281,164
============= ============= =============
</TABLE>
See Accompanying Notes to Financial Statements
52
<PAGE>
-------------
International
Equity Funds
-------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global Technology Fund Asia-Pacific Equity Fund
------------------------------ -----------------------------------------------
For the period For the period For the period For the year For the year
January 1, 2000 ended July 1, 2000 ended ended
to October 31, December 31, to October 31, June 30, June 30,
2000 1999(1) 2000 2000 1999
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
From Operations:
Net investment income (loss) $ (142,357) $ -- $ 297,360 $ (325,867) $ (83,355)
Net realized gain (loss) from
investments (133,293) -- (13,832) 7,546,867 (6,593,623)
Net realized gain on foreign
currency (513) -- (69,352) (47,823) (76,798)
Net change in unrealized
appreciation (depreciation) of
investments and foreign
currency (4,020,476) -- (8,020,905) (5,113,014) 20,223,587
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets
resulting from operations (4,296,639) -- (7,806,729) 2,060,163 13,469,811
From Capital Share Transactions:
Net proceeds from sales of shares 14,993,431 100,000 20,603,558 103,757,205 137,827,549
Cost of shares redeemed (1,908,595) -- (21,639,119) (110,675,525) (143,882,119)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets
derived from capital share
transactions 13,084,836 100,000 (1,035,561) (6,918,320) (6,054,570)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets 8,788,197 100,000 (8,842,290) (4,858,157) 7,415,241
Net Assets:
Beginning of period 100,000 -- 27,702,380 32,560,537 25,145,296
------------- ------------- ------------- ------------- -------------
End of period $ 8,888,197 $ 100,000 $ 18,860,090 $ 27,702,380 $ 32,560,537
============= ============= ============= ============= =============
Undistributed net investment
income $ -- $ -- $ 296,231 $ -- $ --
============= ============= ============= ============= =============
</TABLE>
----------
(1) The Fund commenced operations on December 27, 1999.
See Accompanying Notes to Financial Statements
53
<PAGE>
-------------
International
Equity Funds
-------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SmallCap Asia Growth Fund
--------------------------------------------
For the period For the year For the year
January 1, 2000 ended ended
to October 31, December 31, December 31,
2000 1999 1998
------------ ------------ ------------
<S> <C> <C> <C>
From Operations:
Net investment income (loss) $ (112,798) $ (140,860) $ (30,606)
Net realized gain (loss) from investments 1,381,553 2,483,913 (11,201,991)
Net realized gain (loss) on foreign currency (44,791) (131,303) 33,627
Net change in unrealized appreciation (depreciation)
of investments and foreign currency (4,414,361) 2,576,380 8,154,959
------------ ------------ ------------
Increase (decrease) in net assets resulting from operations (3,190,397) 4,788,130 (3,044,011)
From Capital Share Transactions:
Net proceeds from sales of shares 26,449,435 33,047,205 37,640,881
Net asset value of shares issued to shareholders in
reinvestment of dividends -- -- --
------------ ------------ ------------
26,449,435 33,047,205 37,640,881
Cost of shares redeemed (33,021,682) (41,720,654) (30,186,041)
------------ ------------ ------------
Net increase (decrease) in net assets derived from
capital share transactions (6,572,247) (8,673,449) 7,454,840
------------ ------------ ------------
Net increase (decrease) in net assets (9,762,644) (3,885,319) 4,410,829
Net Assets:
Beginning of period 14,392,372 18,277,691 13,866,862
------------ ------------ ------------
End of period $ 4,629,728 $ 14,392,372 $ 18,277,691
============ ============ ============
Distribution in excess of net investment income $ -- $ (15,182) $ (45,666)
============ ============ ============
</TABLE>
See Accompanying Notes to Financial Statements
54
<PAGE>
-------------
International
Equity Funds
-------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Troika Dialog Russia Fund
-----------------------------------------------
For the period For the year For the year
January 1, 2000 ended ended
to October 31, December 31, December
2000 1999 1998
------------- ------------- -------------
<S> <C> <C> <C>
From Operations:
Net investment income (loss) $ (534,377) $ 1,563,372 $ 1,067,794
Net realized gain (loss) from investments 8,296,765 (27,725,310) (48,990,439)
Net Realized Gain (Loss) on foreign currency (118,397) (7,739,434) 148,661
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency (4,834,914) 66,709,158 (55,947,144)
------------- ------------- -------------
Increase (decrease) in net assets resulting
from operations 2,809,077 32,807,786 (103,721,128)
Distributions to Shareholders:
From net investment income:
Class A -- (586,463) (472,886)
From realized gain from investments -- -- (1,834,702)
------------- ------------- -------------
Total distributions -- (586,463) (2,307,588)
------------- ------------- -------------
From Capital Share Transactions:
Net proceeds from sales of shares 54,557,755 43,183,175 46,991,263
Net asset value of shares issued to shareholders
in reinvestment of dividends -- 554,553 2,202,785
Redemption fee proceeds 390,342 167,637 367,463
Net assets received in connection with
reorganization -- -- --
------------- ------------- -------------
54,948,097 43,905,365 49,561,511
Cost of shares redeemed (63,131,621) (36,262,949) (62,258,817)
------------- ------------- -------------
Net increase in net assets derived from capital
share transactions (8,183,524) 7,642,416 (12,697,306)
------------- ------------- -------------
Net increase in net assets (5,374,447) 39,863,739 (118,726,022)
Net Assets:
Beginning of period 59,010,999 19,147,260 137,873,282
------------- ------------- -------------
End of period $ 53,636,552 $ 59,010,999 $ 19,147,260
============= ============= =============
Undistributed (distribution in excess of) net
investment income $ -- $ (70,843) $ (67,185)
============= ============= =============
Gold Fund
----------------------------------------------
For the period For the year For the year
January 1, 2000 ended ended
to October 31, December 31, December 31,
2000 1999 1998
------------ ------------ ------------
From Operations:
Net investment income (loss) $ 125,474 $ (15,134) $ 45,698
Net realized gain (loss) from investments (8,421,625) (25,580,452) (9,781,557)
Net Realized Gain (Loss) on foreign currency (2,091,095) (8,439) (16,099)
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency (10,053,228) 32,389,359 6,918,845
------------ ------------ ------------
Increase (decrease) in net assets resulting
from operations (20,440,474) 6,785,334 (2,833,113)
Distributions to Shareholders:
From net investment income:
Class A (15,287) -- (52,416)
From realized gain from investments -- -- --
------------ ------------ ------------
Total distributions (15,287) -- (52,416)
------------ ------------ ------------
From Capital Share Transactions:
Net proceeds from sales of shares 15,323,872 31,794,471 51,873,043
Net asset value of shares issued to shareholders
in reinvestment of dividends 13,994 -- 46,630
Redemption fee proceeds -- --
Net assets received in connection with
reorganization -- 17,841,616 --
------------ ------------ ------------
15,337,866 49,636,087 51,919,673
Cost of shares redeemed (27,268,213) (34,746,635) (51,899,941)
------------ ------------ ------------
Net increase in net assets derived from capital
share transactions (11,930,347) 14,889,452 19,732
------------ ------------ ------------
Net increase in net assets (32,386,108) 21,674,786 (2,865,797)
Net Assets:
Beginning of period 72,516,082 50,841,296 53,707,093
------------ ------------ ------------
End of period $ 40,129,974 $ 72,516,082 $ 50,841,296
============ ============ ============
Undistributed (distribution in excess of) net
investment income $ 49,339 $ 12,833 $ (83,069)
============ ============ ============
</TABLE>
See Accompanying Notes to Financial Statements
55
<PAGE>
--------------
Precious Metal
Funds and
International
Income Fund
--------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Silver Fund
--------------------------------------------
For the period Year For the year
January 1, 2000 ended ended
to October 31, December 31, December 31,
2000 1999 1998
------------ ------------ ------------
<S> <C> <C> <C>
From Operations:
Net investment income (loss) $ 179,058 $ 127,538 $ (91,766)
Net realized loss from investments (4,714,924) (641,295) (570,668)
Net realized loss on foreign currency (623,115) (293) (898)
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency (1,018,732) 2,489,979 (5,092,621)
------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations (6,177,713) 1,975,929 (5,755,953)
Distributions to Shareholders:
From net investment income:
Class A (63,919) (63,027) --
Return of Capital -- -- --
From realized gain from investments -- -- --
------------ ------------ ------------
Total distributions (63,919) (63,027) --
------------ ------------ ------------
From Capital Share Transactions:
Net proceeds from sales of shares 2,661,034 6,914,213 7,289,065
Net asset value of shares issued to shareholders
in reinvestment of dividends 59,054 58,564 --
Redemption fee proceeds -- --
------------ ------------ ------------
2,720,088 6,972,777 7,289,065
Cost of shares redeemed (7,200,933) (9,032,468) (10,893,893)
------------ ------------ ------------
Net increase (decrease) in net assets derived
from capital share transactions (4,480,845) (2,059,691) (3,604,828)
------------ ------------ ------------
Net increase (decrease) in net assets (10,722,477) (146,789) (9,360,781)
Net Assets:
Beginning of period 25,413,356 26,560,145 34,920,926
------------ ------------ ------------
End of period $ 14,690,879 $ 25,413,356 $ 25,560,145
============ ============ ============
Undistributed net investment income $ 177,221 $ 63,221 $ (997)
============ ============ ============
Global Income Fund
--------------------------------------------
For the period For the year For the year
January 1, 2000 ended ended
to October 20, December 31, December 31,
2000 1999 1998
------------ ------------ ------------
From Operations:
Net investment income (loss) $ 2,081,946 $ 3,854,078 3,618,708
Net realized loss from investments (746,692) (309,304) 690,546
Net realized loss on foreign currency (1,467,917) (1,437,952) (847,222)
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency (1,034,374) (2,297,809) (1,141,496)
------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations (1,167,037) (190,987) 2,320,536
Distributions to Shareholders:
From net investment income:
Class A (216,437) (2,726,456) (2,758,226)
Return of Capital (255,473) -- --
From realized gain from investments -- (163,274) (624,804)
------------ ------------ ------------
Total distributions (471,910) (2,889,730) (3,383,030)
------------ ------------ ------------
From Capital Share Transactions:
Net proceeds from sales of shares 5,884,880 9,855,762 24,156,657
Net asset value of shares issued to shareholders
in reinvestment of dividends 548,207 2,637,633 3,013,322
Redemption fee proceeds -- --
------------ ------------ ------------
6,433,087 12,493,395 27,169,979
Cost of shares redeemed (21,582,756) (14,123,581) (13,368,656)
------------ ------------ ------------
Net increase (decrease) in net assets derived
from capital share transactions (15,149,669) (1,630,186) 13,801,323
------------ ------------ ------------
Net increase (decrease) in net assets (16,788,616) (4,710,903) 12,738,829
Net Assets:
Beginning of period 31,695,659 36,406,562 23,667,733
------------ ------------ ------------
End of period $ 14,907,043 $ 31,695,659 $ 36,406,562
============ ============ ============
Undistributed net investment income $ -- $ (397,592) $ (134,882)
============ ============ ============
</TABLE>
See Accompanying Notes to Financial Statements
56
<PAGE>
FINANCIAL
HIGHLIGHTS PILGRIM WORLDWIDE GROWTH FUND
--------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period.
<TABLE>
<CAPTION>
Class A
-----------------------------------------------------------------------------
Four Three
months Year months
ended Ended ended Year ended March 31,
October 31, June 30, June 30, ---------------------------------------
2000(6)(7) 2000 1999(1) 1999 1998 1997 1996
-------- ------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 29.98 23.58 21.39 19.33 16.88 16.57 14.29
Income from investment operations:
Net investment income (loss) $ (0.07) (0.15) -- (0.02) 0.04 (0.16) (0.07)
Net realized and unrealized gain
(loss) on investments $ (3.55) 9.62 2.19 5.78 5.33 2.20 2.86
Total from investment operations $ (3.62) 9.47 2.19 5.76 5.37 2.04 2.79
Less distributions from:
Net investment income $ -- -- -- (0.06) -- -- (0.12)
Net realized gains on investments $ -- (3.07) -- (3.64) (2.92) (1.73) (0.39)
Total distributions $ -- (3.07) -- (3.70) (2.92) (1.73) (0.51)
Net asset value, end of period $ 26.36 29.98 23.58 21.39 19.33 16.88 16.57
Total Return(3): % (12.07) 42.43 10.24 33.56 34.55 12.51 19.79
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 246,590 235,341 66,245 49,134 38,647 24,022 23,481
Ratios to average net assets:
Net expenses after expense
reimbursement(recoupment)(4)(5) % 1.61 1.67 1.75 1.86 1.86 1.85 1.85
Gross expenses prior to expense
reimbursement(recoupment)(4) % 1.61 1.67 1.75 2.02 2.21 2.17 2.17
Net investment income (loss) after
expense reimbursement(recoupment)(4)(5) % (0.71) (0.79) (0.03) (0.62) (0.69) (0.93) (0.35)
Portfolio turnover % 71 169 57 247 202 182 132
Class B
---------------------------------------------------------------------------------
Four Three
months Year months May 31,
ended Ended ended Year ended March 31, 1995(2) to
October 31, June 30, June 30, ---------------------------- March 31,
2000(6)(7) 2000 1999(1) 1999 1998 1997 1996
-------- ------- ------ ------ ------ ------ ------
Per Share Operating Performance:
Net asset value, beginning of period 33.66 26.64 24.21 20.10 16.02 14.34 12.50
Income from investment operations:
Net investment income (loss) (0.15) (0.28) (0.03) (0.08) (0.17) (0.14) (0.05)
Net realized and unrealized gain
(loss) on investments (3.99) 10.76 2.46 6.25 5.44 1.82 1.89
Total from investment operations (4.14) 10.48 2.43 6.17 5.27 1.68 1.84
Less distributions from:
Net investment income -- -- -- (0.01) -- -- --
Net realized gains on investments -- (3.46) -- (2.05) (1.19) -- --
Total distributions -- (3.46) -- (2.06) (1.19) -- --
Net asset value, end of period 29.52 33.66 26.64 24.21 20.10 16.02 14.34
Total Return(3): (12.27) 41.54 10.04 32.74 34.03 11.72 14.72
Ratios/Supplemental Data:
Net assets, end of period (000's) 126,756 130,988 27,938 18,556 10,083 5,942 1,972
Ratios to average net assets:
Net expenses after expense
reimbursement(recoupment)(4)(5) 2.26 2.32 2.40 2.51 2.51 2.50 2.50
Gross expenses prior to expense
reimbursement(recoupment)(4) 2.26 2.32 2.40 2.67 2.70 4.81 9.50
Net investment income (loss) after
expense reimbursement(recoupment)(4)(5) (1.37) (1.44) (0.68) (1.31) (1.37) (1.62) (1.28)
Portfolio turnover 71 169 57 247 202 182 132
Class C
------------------------------------------------------------------------------
Four Three
months Year months
ended Ended ended Year ended March 31,
October 31, June 30, June 30, ---------------------------------------
2000(6)(7) 2000 1999(1) 1999 1998 1997 1996
-------- ------- ------ ------ ------ ------ ------
Per Share Operating Performance:
Net asset value, beginning of period $ 29.92 23.69 21.52 19.05 16.92 16.76 14.44
Income from investment operations:
Net investment loss $ (0.13) (0.33) (0.04) (0.20) (0.19) (0.28) (0.21)
Net realized and unrealized gain
(loss) on investments $ (3.53) 9.65 2.21 5.83 5.41 2.23 2.92
Total from investment operations $ (3.66) 9.32 2.17 5.63 5.22 1.95 2.71
Less distributions from:
Net investment income $ -- -- -- (0.01) -- -- (0.01)
Net realized gains on investments $ -- (3.09) -- (3.15) (3.09) (1.79) (0.38)
Total distributions $ -- (3.09) -- (3.16) (3.09) (1.79) (0.39)
Net asset value, end of period $ 26.26 29.92 23.69 21.52 19.05 16.92 16.76
Total Return(3): % (12.23) 41.48 10.08 32.73 33.72 11.81 18.95
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 213,843 239,432 111,250 98,470 84,292 70,345 71,155
Ratios to average net assets:
Net expenses after expense
reimbursement(recoupment)(4)(5) % 2.26 2.32 2.40 2.51 2.51 2.50 2.50
Gross expenses prior to expense
reimbursement(recoupment)(4) % 2.26 2.32 2.40 2.67 2.77 2.61 2.57
Net investment loss after
expense reimbursement
(recoupment)(4)(5) % (1.37) (1.44) (0.68) (1.28) (1.34) (1.57) (0.99)
Portfolio turnover % 71 169 57 247 202 182 132
</TABLE>
----------
(1) Effective May 24, 1999, Pilgrim Investments Inc., became the Investment
Manager of the Fund, concurrently Nicholas-Applegate Capital Management was
appointed as sub-advisor and the Fund changed its fiscal year-end to June
30.
(2) Commencement of offering of shares.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Manager has agreed to limit expenses excluding interest,
taxes, brokerage and extraordinary expenses, subject to possible
reimbursement to ING Pilgrim Investments, Inc. within three years.
(6) Effective October 1,2000, ING Pilgrim Investments, Inc., became the
Investment Manager of the Fund, replacing Nicholas-Applegate Capital
Management.
(7) The Fund changed its fiscal year-end from June 30 to October 31.
See Accompanying Notes to Financial Statements
57
<PAGE>
FINANCIAL
PILGRIM GLOBAL CORPORATE LEADERS FUND HIGHLIGHTS
--------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period.
<TABLE>
<CAPTION>
Class A
-----------------------------------------------------------------
Ten months ended Year ended December 31,
October 31, -----------------------------------------------
2000(3)(5) 1999 1998 1997 1996 1995
-------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 12.29 9.46 10.59 11.28 11.32 11.17
Income from investment operations:
Net investment income (loss) $ (0.11) (0.02) 0.99 0.03 0.01 0.09
Net realized and unrealized gain (loss) on investments $ (1.42) 3.67 1.02 0.73 1.84 1.10
Total from investment operations $ (1.53) 3.65 2.01 0.76 1.85 1.19
Less distributions from:
Net investment income $ -- (0.74) (0.80) (0.09) (0.16) (0.29)
In excess of net investment income $ -- -- -- -- -- (0.13)
Net realized gains on investments $ -- (0.08) (2.34) (1.36) (1.73) (0.62)
Total distributions $ -- (0.82) (3.14) (1.45) (1.89) (1.04)
Net asset value, end of period $ 10.76 12.29 9.46 10.59 11.28 11.32
Total Return(1): % (12.45) 39.06 19.06 6.90 16.43 10.69
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 16,893 19,617 17,803 35,085 37,223 53,614
Ratios to average net assets:
Net expenses after expense reimbursement(2)(4) % 1.98 1.96 2.12 1.75 1.90 1.67
Gross expenses prior to expense reimbursement(2) % 2.12 -- -- -- -- --
Net investment income (loss) after expense
reimbursement(2)(4) % (0.94) (0.65) (0.06) 0.23 0.11 0.48
Portfolio turnover % 3 13 137 177 128 166
</TABLE>
----------
(1) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(2) Annualized for periods less than one year.
(3) The Fund changed its fiscal year-end from December 31 to October 31.
(4) The Investment Manager has agreed to limit expenses excluding interest,
taxes, brokerage and extraordinary expenses.
(5) Effective July 26, 2000, Pilgrim Investments, Inc. became the Investment
Manager of the Fund.
See Accompanying Notes to Financial Statements
58
<PAGE>
FINANCIAL
HIGHLIGHTS PILGRIM INTERNATIONAL VALUE FUND
--------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period.
<TABLE>
<CAPTION>
Class A Class B
---------------------------------------------- -------------------------------------
Year ended October 31, Year ended October 31,
---------------------------------------------- -------------------------------------
2000 1999 1998 1997 1996 2000 1999 1998 1997(1)
-------- ------- ------- ------ ------ -------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 14.75 11.88 10.90 9.05 8.10 14.57 11.76 10.87 10.00
Income from investment operations:
Net investment income (loss) $ 0.15 0.08 0.11 (0.09) 0.14 0.07 0.01 0.07 (0.02)
Net realized and unrealized gains
on investments $ 2.58 3.58 0.96 2.30 0.85 2.51 3.51 0.91 0.89
Total from investment operations $ 2.73 3.66 1.07 2.21 0.99 2.58 3.52 0.98 0.87
Less distributions from:
Net investment income $ (0.11) (0.12) -- (0.14) (0.04) (0.03) (0.04) -- --
Net realized gains on investments $ (0.69) (0.67) (0.09) (0.22) -- (0.69) (0.67) (0.09) --
Total distributions $ (0.80) (0.79) (0.09) (0.36) (0.04) (0.72) (0.71) (0.09) --
Net asset value, end of period $ 16.68 14.75 11.88 10.90 9.05 16.43 14.57 11.76 10.87
Total Return(2): % 18.56 32.55 9.86 27.59 12.15 17.69 31.55 9.16 8.70
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 920,591 451,815 211,018 60,539 16,777 437,765 278,871 145,976 59,185
Ratios to average net assets:
Net expenses after expense reim-
bursement (3)(4) % 1.64 1.68 1.74 1.80 1.85 2.34 2.41 2.47 2.50
Gross expenses prior to expense
reimbursement(3) % 1.64 1.68 1.74 2.07 2.82 2.34 2.41 2.47 2.58
Net investment income (loss) after
expense reimbursement(3)(4) % 1.14 0.92 1.62 0.46 1.52 0.45 0.18 0.69 (0.71)
Portfolio turnover % 34 29 32 26 74 34 29 32 26
Class C
----------------------------------------------
Year ended October 31,
----------------------------------------------
2000 1999 1998 1997 1996
-------- ------- ------- ------ ------
Per Share Operating Performance:
Net asset value, beginning of the period $ 14.55 11.75 10.86 8.93 8.05
Income from investment operations:
Net investment income (loss) $ 0.07 -- 0.06 (0.06) 0.05
Net realized and unrealized gains on
investments $ 2.52 3.51 0.92 2.20 0.86
Total from investment operations $ 2.59 3.51 0.98 2.14 0.91
Less distributions from:
Net investment income $ (0.04) (0.04) -- (0.04) (0.03)
Net realized gains on investments $ (0.69) (0.67) (0.09) (0.17) --
Total distributions $ (0.73) (0.71) (0.09) (0.21) (0.03)
Net asset value, end of period $ 16.41 14.55 11.75 10.86 8.93
Total Return(2): % 17.76 31.50 9.07 25.92 11.39
Ratios and Supplemental Data:
Net assets, end of period (000's) $ 605,678 310,227 137,651 62,103 14,530
Ratios to average net assets:
Net expenses after expense
reimbursement (3)(4) % 2.34 2.41 2.47 2.50 2.50
Gross expenses prior to expense
reimbursement(3) % 2.34 2.41 2.47 2.74 3.71
Net investment income (loss) after
expense reimbursement(3)(4) % 0.46 0.19 0.68 (0.23) 0.62
Portfolio turnover % 34 29 32 26 74
</TABLE>
----------
(1) Classes A and C commenced operations on March 6, 1995, and Class B
commenced operations on April 17, 1997.
(2) Total return is calculated assuming reinvestment of all dividends and
capital gains distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(3) Annualized for periods less than one year.
(4) Expenses calculated net of advisor reimbursement
See Accompanying Notes to Financial Statements
59
<PAGE>
FINANCIAL
PILGRIM INTERNATIONAL FUND HIGHLIGHTS
--------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period.
<TABLE>
<CAPTION>
Class A Class B Class C
---------------------------------------------------- ---------- ------------
Ten months August 22, September 15,
ended Year ended December 31, 2000(1) to 2000(1) to
October 31, -------------------------------------- October 31, October 31,
2000(4)(6) 1999 1998 1997 1996 1995 2000(4) 2000(4)
---------- ---- ---- ---- ---- ---- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 13.45 11.61 10.10 10.86 10.60 10.37 12.28 11.67
Income from investment operations:
Net investment income (loss) $ 0.19 (0.01) 0.17 0.07 (0.02) (0.01) (0.05) (0.04)
Net realized and unrealized gain (loss) on
investments $ (1.48) 5.46 1.74 0.10 1.45 0.61 (1.04) (0.42)
Total from investment operations $ (1.29) 5.45 1.91 0.17 1.43 0.60 (1.09) (0.46)
Less distributions from:
Net investment income $ (0.86) (0.03) (0.06) (0.13) (0.20) -- -- --
In excess of net investment income $ -- -- -- -- -- (0.35) -- --
Net realized gains on investments $ (0.08) (3.58) (0.34) (0.80) (0.97) (0.02) -- --
Total distributions $ (0.94) (3.61) (0.40) (0.93) (1.17) (0.37) -- --
Net asset value, end of period $ 11.22 13.45 11.61 10.10 10.86 10.60 11.19 11.21
Total Return(2): % (10.22) 47.85 19.02 1.61 13.57 5.77 (8.88) (3.94)
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 30,653 25,304 24,000 19,949 18,891 17,855 80 85
Ratios to average net assets:
Net expenses after expense reimbursement(3)(5) % 2.23 1.98 1.75 1.75 2.45 2.45 2.76 2.96
Gross expenses prior to expense reimbursement(3) % 2.23 1.98 2.25 2.15 2.45 2.46 2.76 2.96
Net investment income (loss) after expense
reimbursement(3)(5) % (0.23) (0.21) 0.35 0.53 (0.39) (0.12) (7.02) (3.97)
Portfolio turnover % 113 144 144 123 114 138 113 113
</TABLE>
----------
(1) Commencement of offering of shares.
(2) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(3) Annualized for periods less than one year.
(4) The Fund changed its fiscal year-end from December 31 to October 31.
(5) The Investment Manager has agreed to limit expenses excluding interest,
taxes, brokerage and extraordinary expenses.
(6) Effective July 26, 2000 Pilgrim Investments, Inc. became the Investment
Manager of the Fund.
See Accompanying Notes to Financial Statements
60
<PAGE>
FINANCIAL
HIGHLIGHTS PILGRIM INTERNATIONAL CORE GROWTH FUND
--------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period.
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------------
Four Three
months Year months February 28,
ended Ended ended Year ended March 31, 1997(1) to
October 31, June 30, June 30, -------------------- March 31,
2000(6)(7) 2000 1999(2) 1999 1998 1997
---------- ---- ------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 23.84 18.92 17.71 17.01 12.73 12.50
Income from investment operations:
Net investment income (loss) $ (0.03) (0.17) 0.04 (0.01) (0.02) --
Net realized and unrealized gain
(loss) on investments $ (2.89) 6.25 1.17 1.02 4.56 0.23
Total from investment operations $ (2.92) 6.08 1.21 1.01 4.54 0.23
Less distributions from:
Net investment income $ -- -- -- (0.18) -- --
Net realized gains on investments $ -- (1.16) -- (0.13) (0.26) --
Total distributions $ -- (1.16) -- (0.31) (0.26) --
Net asset value, end of period $ 20.92 23.84 18.92 17.71 17.01 12.73
Total Return(3): % (12.25) 32.83 6.83 5.90 36.10 1.76
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 23,588 23,003 12,409 21,627 12,664 2
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 1.76 1.85 1.77 1.89 1.96 1.95
Gross expenses prior to expense
reimbursement(4) % 1.90 2.16 1.86 2.13 3.02 4,579.78
Net investment income (loss) after
expense reimbursement(4)(5) % (0.48) (0.83) 0.50 (0.51) (0.45) --
Portfolio turnover % 73 200 67 214 274 76
Class B
------------------------------------------------------------------
Four Three
months Year months February 28,
ended Ended ended Year ended March 31, 1997(1) to
October 31, June 30, June 30, -------------------- March 31,
2000(6)(7) 2000 1999(2) 1999 1998 1997
---------- ---- ------- ---- ---- ----
Per Share Operating Performance:
Net asset value, beginning of period 23.83 19.08 17.89 17.10 12.68 12.50
Income from investment operations:
Net investment income (loss) (0.09) (0.30) -- (0.16) (0.11) --
Net realized and unrealized gain
(loss) on investments (2.86) 6.21 1.19 1.05 4.66 0.18
Total from investment operations (2.95) 5.91 1.19 0.89 4.55 0.18
Less distributions from:
Net investment income -- -- -- (0.03) -- --
Net realized gains on investments -- (1.16) -- (0.07) (0.13) --
Total distributions -- (1.16) -- (0.10) (0.13) --
Net asset value, end of period 20.88 23.83 19.08 17.89 17.10 12.68
Total Return(3): (12.38) 31.62 6.65 5.24 35.31 1.44
Ratios/Supplemental Data:
Net assets, end of period (000's) 19,116 21,543 12,034 11,033 7,942 1
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) 2.41 2.50 2.36 2.53 2.61 2.59
Gross expenses prior to expense
reimbursement(4) 2.56 2.81 2.45 2.77 3.04 16,000.25
Net investment income (loss) after
expense reimbursement(4)(5) (1.16) (1.48) (0.09) (1.13) (1.32) --
Portfolio turnover 73 200 67 214 274 76
Class C
--------------------------------------------------------------------
Four Three
months Year months February 28,
ended Ended ended Year ended March 31, 1997(1) to
October 31, June 30, June 30, -------------------- March 31,
2000(6)(7) 2000 1999(2) 1999 1998 1997
---------- ---- ------- ---- ---- ----
Per Share Operating Performance:
Net asset value, beginning of period $ 23.93 19.14 17.94 17.16 12.68 12.50
Income from investment operations:
Net investment loss $ (0.08) (0.27) -- (0.05) (0.07) --
Net realized and unrealized gain
(loss) on investments $ (2.89) 6.22 1.20 0.94 4.55 0.18
Total from investment operations $ (2.97) 5.95 1.20 0.89 4.48 0.18
Less distributions from:
Net investment income $ -- -- -- (0.11) -- --
Net realized gains on investments $ -- (1.16) -- -- -- --
Total distributions $ -- (1.16) -- (0.11) -- --
Net asset value, end of period $ 20.96 23.93 19.14 17.94 17.16 12.68
Total Return(3): % (12.41) 31.73 6.69 5.22 35.25 1.44
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 25,501 26,734 11,936 10,400 3,517 43
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 2.41 2.50 2.36 2.55 2.61 2.41
Gross expenses prior to expense
reimbursement(4) % 2.56 2.81 2.45 2.79 5.10 25.55
Net investment income (loss) after
expense reimbursement(4)(5) % (1.16) (1.48) (0.09) (1.19) (1.27) (0.07)
Portfolio turnover % 73 200 67 214 274 76
</TABLE>
----------
(1) Commencement of operations.
(2) Effective May 24, 1999, Pilgrim Investments, Inc., became the Investment
Manager of the Fund, concurrently Nicholas-Applegate Capital Management was
appointed as sub-advisor and the Fund changed its fiscal year-end to June
30.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Manager has agreed to limit expenses, excluding, interest,
taxes, brokerage and extraordinary expenses, subject to possible
reimbursement to ING Pilgrim Investments, Inc. within three years.
(6) Effective October 1,2000, ING Pilgrim Investments, Inc., became the
Investment Manager of the Fund, replacing Nicholas-Applegate Capital
Management.
(7) The Fund changed its fiscal year-end from June 30 to October 31.
See Accompanying Notes to Financial Statements
61
<PAGE>
FINANCIAL
PILGRIM INTERNATIONAL SMALLCAP GROWTH FUND HIGHLIGHTS
--------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period.
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------------
Four Three
months Year months
ended Ended ended Year ended March 31,
October 31, June 30, June 30, -------------------------------
2000(1) 2000 1999(2) 1999 1998 1997 1996
------- ---- ------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 40.94 23.80 21.03 19.29 14.92 13.15 11.51
Income from investment operations:
Net investment income (loss) $ (0.10) (0.18) (0.03) 0.02 (0.15) 0.04 (0.02)
Net realized and unrealized gain (loss)
on investments $ (4.76) 19.38 2.80 3.21 5.36 1.88 1.79
Total from investment operations $ (4.86) 19.20 2.77 3.23 5.21 1.92 1.77
Less distributions from:
Net investment income $ -- -- -- -- -- (0.01) (0.13)
Net realized gains on investments $ -- (2.06) -- (1.49) (0.84) (0.14) --
Total distributions $ -- (2.06) -- (1.49) (0.84) (0.15) (0.13)
Net asset value, end of period $ 36.08 40.94 23.80 21.03 19.29 14.92 13.15
Total Return(4): % (11.90) 82.89 13.17 17.26 36.31 14.67 15.46
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 273,393 278,480 37,490 25,336 11,183 5,569 1,056
Ratios to average net assets:
Net expenses after expense
reimbursement (recoupment)(5)(6) % 1.67 1.67 1.84 1.94 1.96 1.95 1.95
Gross expenses prior to expense
reimbursement (recoupment)(5) % 1.67 1.67 1.86 2.08 2.75 3.76 10.06
Net investment income (loss) after
expense reimbursement (recoupment)(5)(6) % (0.80) (0.76) (0.69) (0.82) (1.56) (1.05) (0.27)
Portfolio turnover % 56 164 44 146 198 206 141
Class B
--------------------------------------------------------------------
Four Three
months Year months May 31,
ended Ended ended Year ended March 31, 1995(3) to
October 31, June 30, June 30, ---------------------- March 31,
2000(1) 2000 1999(2) 1999 1998 1997 1996
------- ---- ------- ---- ---- ---- ----
Per Share Operating Performance:
Net asset value, beginning of period 43.27 25.33 22.43 20.16 15.89 13.96 12.50
Income from investment operations:
Net investment income (loss) (0.20) (0.37) (0.07) (0.20) (0.15) (0.15) (0.02)
Net realized and unrealized gain (loss)
on investments (5.02) 20.50 2.97 3.46 5.56 2.09 1.48
Total from investment operations (5.22) 20.13 2.90 3.26 5.41 1.94 1.46
Less distributions from:
Net investment income -- -- -- -- -- (0.01) --
Net realized gains on investments -- (2.19) -- (0.99) (1.14) -- --
Total distributions -- (2.19) -- (0.99) (1.14) (0.01) --
Net asset value, end of period 38.05 43.27 25.33 22.43 20.16 15.89 13.96
Total Return(4): (12.05) 81.63 12.93 16.55 35.73 13.96 11.68
Ratios/Supplemental Data:
Net assets, end of period (000's) 126,861 132,028 19,331 16,158 12,033 5,080 1,487
Ratios to average net assets:
Net expenses after expense
reimbursement (recoupment)(5)(6) 2.32 2.32 2.49 2.59 2.61 2.60 2.60
Gross expenses prior to expense
reimbursement (recoupment)(5) 2.32 2.32 2.51 2.73 2.98 4.89 16.15
Net investment income (loss) after
expense reimbursement (recoupment)(5)(6) (1.46) (1.41) (1.34) (1.45) (2.20) (1.66) (0.64)
Portfolio turnover 56 164 44 146 198 206 141
Class C
-----------------------------------------------------------------
Four Three
months Year months
ended Ended ended Year ended March 31,
October 31, June 30, June 30, -------------------------------
2000(1) 2000 1999(2) 1999 1998 1997 1996
------- ---- ------- ---- ---- ---- ----
Per Share Operating Performance:
Net asset value, beginning of period 39.71 23.34 20.60 18.53 14.87 13.05 11.32
Income from investment operations:
Net investment income (loss) (0.18) (0.31) (0.06) (0.10) (0.11) (0.16) 0.01
Net realized and unrealized gain (loss)
on investments (4.60) 18.69 2.80 3.09 5.09 1.98 1.72
Total from investment operations (4.78) 18.38 2.74 2.99 4.98 1.82 1.73
Less distributions from:
Net investment income -- -- -- -- -- -- --
Net realized gains on investments -- (2.01) -- (0.92) (1.32) -- --
Total distributions -- (2.01) -- (0.92) (1.32) -- --
Net asset value, end of period 34.93 39.71 23.34 20.60 18.53 14.87 13.05
Total Return(4): (12.04) 80.89 13.31 16.55 35.63 13.98 15.30
Ratios/Supplemental Data:
Net assets, end of period (000's) 136,830 144,068 18,354 13,226 8,014 3,592 933
Ratios to average net assets:
Net expenses after expense
reimbursement (recoupment)(5)(6) 2.32 2.32 2.49 2.59 2.61 2.60 2.60
Gross expenses prior to expense
reimbursement (recoupment)(5) 2.32 2.32 2.51 2.73 3.38 3.95 16.15
Net investment income (loss) after
expense reimbursement
(recoupment)(5)(6) (1.46) (1.41) (1.34) (1.45) (2.18) (1.67) (1.02)
Portfolio turnover 56 164 44 146 198 206 141
</TABLE>
----------
(1) The Fund changed its fiscal year-end from June 30 to October 31.
(2) Effective May 24, 1999, Pilgrim Investments, Inc., became the Investment
Manager of the Fund, concurrently Nicholas-Applegate Capital Management was
appointed as sub-advisor and the Fund changed its fiscal year-end to June
30.
(3) Commencement of offering of shares.
(4) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(5) Annualized for periods less than one year.
(6) The Investment Manager has agreed to limit expenses excluding interest,
taxes, brokerage and extraordinary expenses, subject to possible
reimbursement to ING Pilgrim Investments, Inc. within three years.
See Accompanying Notes to Financial Statements
62
<PAGE>
FINANCIAL
HIGHLIGHTS PILGRIM EMERGING MARKETS VALUE FUND
--------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period.
<TABLE>
<CAPTION>
Class A Class B Class C
------------------------------ ---------------------- -----------------------
Year ended October 31, Year ended October 31, Year ended October 31,
------------------------------ ---------------------- -----------------------
2000 1999 1998(1) 2000 1999 1998(1) 2000 1999 1998(1)
---- ---- ------- ---- ---- ------- ---- ---- -------
<S> <C><C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 10.68 7.69 10.00 10.60 7.65 10.00 10.56 7.63 10.00
Income from investment operations:
Net investment income $ 0.22 0.12 0.12 0.07 0.08 0.09 0.07 0.04 0.09
Net realized and unrealized gain (loss) on
investments $ (0.08) 3.01 (2.43) (0.01) 2.97 (2.44) (0.01) 3.00 (2.46)
Total from investment operations $ 0.14 3.13 (2.31) 0.06 3.05 (2.35) 0.06 3.04 (2.37)
Less distribution from:
Net investment income $ (0.11) (0.14) -- (0.04) (0.10) -- (0.05) (0.11) --
Net realized gains on investments $ (0.44) -- -- (0.44) -- -- (0.44) -- --
Total distributions $ (0.55) (0.14) -- (0.48) (0.10) -- (0.49) (0.11) --
Net asset value, end of period $ 10.27 10.68 7.69 10.18 10.60 7.65 10.13 10.56 7.63
Total Return(2): % 0.60 41.48 (23.10) (0.12) 40.41 (23.50) (0.09) 40.49 (23.70)
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 4,549 9,281 3,815 4,101 3,823 3,583 4,468 6,674 2,304
Ratios to average net assets:
Net expenses after expense reimbursement(3)(4) % 1.98 2.06 1.80 2.75 2.70 2.50 2.71 2.71 2.50
Gross expenses prior to expense
reimbursement(3) % 1.98 2.21 3.88 2.75 2.93 4.74 2.71 2.91 4.87
Net investment income after expense
reimbursement(3)(4) % 1.37 1.36 3.38 0.61 0.67 2.55 0.62 0.62 2.60
Portfolio turnover % 32 38 7 32 38 7 32 38 7
</TABLE>
----------
(1) Class A, B and C commenced operations on January 1, 1998.
(2) Total return is calulated assuming reinvestments of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(3) Annualized for periods less than one year
(4) Expenses calculated net of advisor reimbursement.
See Accompanying Notes to Financial Statements
63
<PAGE>
FINANCIAL
PILGRIM EMERGING COUNTRIES FUND HIGHLIGHTS
--------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period.
<TABLE>
<CAPTION>
Class A
-------------------------------------------------------------------
Four Three
months Year months
ended Ended ended Year Ended March 31,
October 31, June 30, June 30, --------------------------------
2000(6)(7) 2000 1999(2) 1999 1998 1997 1996
---------- ---- ------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 20.17 16.74 13.43 17.39 17.20 14.03 11.00
Income from investment operations:
Net investment income (loss) $ (0.24) (0.20) (0.05) (0.06) 0.03 (0.06) (0.04)
Net realized and unrealized gain
(loss) on investments $ (3.60) 3.63 3.36 (3.81) 1.22 3.51 3.15
Total from investment operations $ (3.84) 3.43 3.31 (3.87) 1.25 3.45 3.11
Less distributions from:
Net investment income $ -- -- -- (0.02) -- -- (0.02)
Net realized gains on investments $ -- -- -- (0.07) (1.06) (0.28) (0.06)
Total distributions $ -- -- -- (0.09) (1.06) (0.28) (0.08)
Net asset value, end of period $ 16.33 20.17 16.74 13.43 17.39 17.20 14.03
Total Return(3): % (19.04) 20.49 24.65 (22.23) 8.06 24.79 28.43
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 59,541 75,311 53,483 47,180 71,014 38,688 4,718
Ratio to average net assets:
Net expenses after expense
reimbursement(4)(5) % 2.23 2.19 2.13 2.27 2.26 2.25 2.25
Gross expenses prior to expense
reimbursement(4) % 2.38 2.34 2.66 2.56 2.48 3.08 6.72
Net investment income (loss) after
expense reimbursement(4)(5) % (1.31) (1.15) (1.30) (0.25) 0.55 (1.14) (0.35)
Portfolio turnover % 94 211 67 213 243 176 118
Class B
--------------------------------------------------------------------
Four Three
months Year months May 31,
ended Ended ended Year Ended March 31, 1995(1) to
October 31, June 30, June 30, --------------------- March 31,
2000 2000 1999(2) 1999 1998 1997 1996
---------- ---- ------- ---- ---- ---- ----
Per Share Operating Performance:
Net asset value, beginning of period 20.30 16.98 13.64 17.64 17.29 14.02 12.50
Income from investment operations:
Net investment income (loss) (0.23) (0.35) (0.07) (0.22) (0.07) (0.11) (0.04)
Net realized and unrealized gain
(loss) on investments (3.66) 3.67 3.41 (3.70) 1.26 3.47 1.56
Total from investment operations (3.89) 3.32 3.34 (3.92) 1.19 3.36 1.52
Less distributions from:
Net investment income -- -- -- -- -- -- --
Net realized gains on investments -- -- -- (0.08) (0.84) (0.09) --
Total distributions -- -- -- (0.08) (0.84) (0.09) --
Net asset value, end of period 16.41 20.30 16.98 13.64 17.64 17.29 14.02
Total Return(3): (19.16) 19.55 24.49 (22.23) 7.47 24.00 12.16
Ratios/Supplemental Data:
Net assets, end of period (000's) 22,707 30,322 26,342 22,338 38,796 24,558 3,557
Ratio to average net assets:
Net expenses after expense
reimbursement(4)(5) 2.98 2.84 2.75 2.91 2.91 2.90 2.90
Gross expenses prior to expense
reimbursement(4) 3.12 2.99 3.28 3.20 3.06 3.66 7.58
Net investment income (loss) after
expense reimbursement(4)(5) (1.01) (1.80) (1.92) (0.80) (0.20) (1.77) (1.05)
Portfolio turnover 94 211 67 213 243 176 118
Class C
------------------------------------------------------------------
Four Three
months Year months
ended Ended ended Year Ended March 31,
October 31, June 30, June 30, -------------------------------
2000(6)(7) 2000 1999(2) 1999 1998 1997 1996
---------- ---- ------- ---- ---- ---- ----
Per Share Operating Performance:
Net asset value, beginning of period $ 19.56 16.35 13.14 16.98 16.81 13.71 10.79
Income from investment operations:
Net investment loss $ (0.22) (0.32) (0.07) (0.27) (0.12) (0.10) (0.05)
Net realized and unrealized gain
(loss) on investments $ (3.53) 3.53 3.28 (3.49) 1.26 3.37 2.97
Total from investment operations $ (3.75) 3.21 3.21 (3.76) 1.14 3.27 2.92
Less distributions from:
Net investment income $ -- -- -- -- -- -- --
Net realized gains on investments $ -- -- -- (0.08) (0.97) (0.17) --
Total distributions $ -- -- -- (0.08) (0.97) (0.17) --
Net asset value, end of period $ 15.81 19.56 16.35 13.14 16.98 16.81 13.71
Total Return(3): % (19.17) 19.63 24.43 (22.21) 7.47 23.94 27.30
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 22,456 29,610 24,230 19,246 36,986 29,376 4,345
Ratio to average net assets:
Net expenses after expense
reimbursement(4)(5) % 2.98 2.84 2.75 2.90 2.91 2.90 2.90
Gross expenses prior to expense
reimbursement(4) % 3.09 2.99 3.28 3.19 3.09 3.12 6.23
Net investment loss after
expense reimbursement(4)(5) % (0.95) (1.80) (1.92) (0.77) (0.26) (1.75) (1.06)
Portfolio turnover % 94 211 67 213 243 176 118
</TABLE>
----------
(1) Commencement of offering of shares.
(2) Effective May 24, 1999, Pilgrim Investments, Inc., became the Investment
Manager of the Fund, concurrently Nicholas-Applegate Capital Management was
appointed as sub-advisor and the Fund changed its fiscal year-end to June
30.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Manager has agreed to limit expenses excluding interest,
taxes, brokerage and extraordinary expenses, subject to possible
reimbursement to ING Pilgrim Investments, Inc. within three years.
(6) Effective October 1,2000, ING Pilgrim Investments, Inc., became the
Investment Manager of the Fund, replacing Nicholas-Applegate Capital
Management.
(7) The Fund changed its fiscal year-end from June 30 to October 31.
See Accompanying Notes to Financial Statements
64
<PAGE>
FINANCIAL
HIGHLIGHTS PILGRIM WORLDWIDE EMERGING MARKETS FUND
--------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period.
<TABLE>
<CAPTION>
Class A
-----------------------------------------------------------
Ten months
ended Year ended December 31,
October 31, ---------------------------------------------
2000(1)(4) 1999 1998 1997 1996 1995
---------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period 15.10 7.13 10.18 11.49 10.70 11.47
Income from investment operations:
Net investment income (loss) (0.17) (0.05) 0.12 0.01 -- 0.08
Net realized and unrealized gain (loss) on investments (6.18) 8.05 (3.08) (1.32) 0.79 (0.76)
Total from investment operations (6.35) 8.00 (2.96) (1.31) 0.79 (0.68)
Less distributions from:
Net investment income -- (0.03) (0.09) -- -- (0.08)
In excess of net investment income -- -- -- -- -- (0.01)
Total distributions -- (0.03) (0.09) -- -- (0.09)
Net asset value, end of period 8.75 15.10 7.13 10.18 11.49 10.70
Total Return(2): (42.05) 112.58 (29.06) (11.40) 7.38 (5.93)
Ratios/Supplemental Data:
Net assets, end of period (000's) 81,496 154,994 65,323 137,686 254,673 265,544
Ratios to average net assets:
Expenses(3) 2.15 2.00 1.85 1.82 1.76 1.88
Net investment income (loss) (3) (1.34) (0.66) 1.14 0.09 (0.01) 0.70
Portfolio turnover 241 184 107 112 86 93
</TABLE>
----------
(1) The Fund changed its fiscal year-end from December 31 to October 31.
(2) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(3) Annualized for periods less than one year.
(4) Effective July 26, 2000, Pilgrim Investments, Inc. became the Investment
Manager of the Fund
See Accompanying Notes to Financial Statements
65
<PAGE>
FINANCIAL
PILGRIM GLOBAL TECHNOLOGY FUND HIGHLIGHTS
--------------------------------------------------------------------------------
Class A
----------
Ten months
ended
October 31,
2000(3)(5)
----------
Per Share Operating Performance:
Net asset value, beginning of period $ 10.00
Income from investment operations:
Net investment loss $ (0.13)
Net realized and unrealized loss on investments $ (2.01)
Total from investment operations $ (2.14)
Net asset value, end of period $ 7.86
Total Return(1): % (21.40)
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 8,888
Ratios to average net assets:
Net expenses after redemption fee proceeds and expense
reimbursement (2)(4) % 2.60
Gross expenses prior to redemption fee proceeds and
expense reimbursement(2) % 4.23
Net investment loss after redemption fee proceeds and
expense reimbursement(2)(4) % (1.73)
Portfolio turnover % 162
----------
(1) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(2) Annualized for periods less than one year.
(3) The Fund changed its fiscal year-end from December 31 to October 31.
(4) The Investment Manager has agreed to limit expenses excluding interest,
taxes, brokerage and extraordinary expenses.
(5) Effective July 26, 2000, Pilgrim Investments, Inc. became the Investment
Manager of the Fund.
See Accompanying Notes to Financial Statements
66
<PAGE>
FINANCIAL
HIGHLIGHTS PILGRIM ASIA-PACIFIC EQUITY FUND
--------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period.
<TABLE>
<CAPTION>
Class A
---------------------------------------------------------
Four
months September 1,
ended Year Ended June 30, 1995(1) to
October 31, ------------------------------- June 30,
2000(5) 2000 1999 1998 1997 1996
------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 7.23 7.22 4.46 10.93 10.35 10.00
Income from investment operations:
Net investment income (loss) $ 0.08 (0.05) -- 0.03 0.02 0.03
Net realized and unrealized gain (loss) on
investments $ (2.32) 0.06 2.76 (6.50) 0.58 0.34
Total from investment operations $ (2.24) 0.01 2.76 (6.47) 0.60 0.37
Less distributions:
In excess of net investment income $ -- -- -- -- -- (0.02)
Tax return of capital $ -- -- -- -- (0.02) --
Total distributions $ -- -- -- -- (0.02) (0.02)
Net asset value, end of period $ 4.99 7.23 7.22 4.46 10.93 10.35
Total Return(2): % (30.98) 0.14 61.88 (59.29) 5.78 3.76
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 8,471 11,726 14,417 11,796 32,485 18,371
Ratios to average net assets:
Net expenses after expense reimbursement(3)(4) % 2.05 2.11 2.00 2.00 2.00 2.00
Gross expenses prior to expense
reimbursement(3) % 2.71 2.55 2.98 2.80 2.54 3.47
Net investment income (loss) after expense
reimbursement(3)(4) % 4.28 (0.56) 0.01 0.38 0.00 0.33
Portfolio turnover % 13 138 111 81 38 15
Class B
---------------------------------------------------------
Four
months September 1,
ended Year Ended June 30, 1995(1) to
October 31, ------------------------------- June 30,
2000(5) 2000 1999 1998 1997 1996
------- ---- ---- ---- ---- ----
Per Share Operating Performance:
Net asset value, beginning of period 6.97 7.02 4.37 10.83 10.31 10.00
Income from investment operations:
Net investment income (loss) 0.07 (0.11) (0.04) (0.03) (0.07) (0.01)
Net realized and unrealized gain (loss) on
investments (2.24) 0.06 2.69 (6.43) 0.59 0.32
Total from investment operations (2.17) (0.05) 2.65 (6.46) 0.52 0.31
Less distributions:
In excess of net investment income -- -- -- -- -- --
Tax return of capital -- -- -- -- -- --
Total distributions -- -- -- -- -- --
Net asset value, end of period 4.80 6.97 7.02 4.37 10.83 10.31
Total Return(2): (31.13) (0.71) 60.64 (59.65) 5.04 3.19
Ratios/Supplemental Data:
Net assets, end of period (000's) 7,678 12,228 12,959 9,084 30,169 17,789
Ratios to average net assets:
Net expenses after expense reimbursement(3)(4) 2.80 2.86 2.75 2.75 2.75 2.75
Gross expenses prior to expense
reimbursement(3) 3.45 3.30 3.73 3.55 3.29 4.10
Net investment income (loss) after expense
reimbursement(3)(4) 3.48 (1.31) (0.74) (0.39) (0.79) (0.38)
Portfolio turnover 13 138 111 81 38 15
Class M
--------------------------------------------------------
Four
months September 1,
ended Year Ended June 30, 1995(1) to
October 31, ------------------------------- June 30
2000(5) 2000 1999 1998 1997 1996
------- ---- ---- ---- ---- ----
Per Share Operating Performance:
Net asset value, beginning of period $ 7.04 7.07 4.40 10.86 10.32 10.00
Income from investment operations:
Net investment income (loss) $ 0.07 (0.11) (0.02) -- (0.05) --
Net realized and unrealized gain (loss)
on investments $ (2.26) 0.08 2.69 (6.46) 0.59 0.33
Total from investment operations $ (2.19) (0.03) 2.67 (6.46) 0.54 0.33
Less distributions:
In excess of net investment income $ -- -- -- -- -- (0.01)
Total distributions $ -- -- -- -- -- (0.01)
Net asset value, end of period $ 4.85 7.04 7.07 4.40 10.86 10.32
Total Return(2): % (31.11) (0.42) 60.68 (59.48) 5.26 3.32
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 2,711 3,749 5,184 4,265 11,155 6,476
Ratios to average net assets:
Net expenses after expense reimbursement(3)(4) % 2.53 2.61 2.50 2.50 2.50 2.50
Gross expenses prior to expense
reimbursement(3) % 3.18 3.05 3.48 3.30 3.04 3.88
Net investment income (loss) after expense
reimbursement(3)(4) % 3.72 (1.06) (0.49) (0.07) (0.55) (0.16)
Portfolio turnover % 13 138 111 81 38 15
</TABLE>
----------
(1) Commencement of operations.
(2) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(3) Annualized for periods less than one year.
(4) The Investment Manager has agreed to limit expenses excluding interest,
taxes, brokerage and extraordinary expenses, subject to possible
reimbursement to ING Pilgrim Investments, Inc. within three years.
(5) The Fund changed it fiscal year-end from June 30 to October 31.
See Accompanying Notes to Financial Statements
67
<PAGE>
FINANCIAL
PILGRIM SMALLCAP ASIA GROWTH FUND HIGHLIGHTS
--------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period.
<TABLE>
<CAPTION>
Class A
--------------------------------------------------------
Ten
months
ended Year ended December 31,
October 31, ------------------------------------------
2000(4)(6) 1999 1998 1997 1996 1995(1)
---------- ---- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 8.95 5.69 7.06 12.24 9.76 10.00
Income from investment operations:
Net investment income (loss) $ (0.15) (0.10) -- (0.05) (0.05) 0.02
Net realized and unrealized gain (loss) on investments $ (3.08) 3.36 (1.37) (5.13) 2.54 (0.24)
Total from investment operations $ (3.23) 3.26 (1.37) (5.18) 2.49 (0.22)
Less distributions from:
Net investment income $ -- -- -- -- -- (0.02)
In excess of net investment income $ -- -- -- -- (0.01) --
Total distributions $ -- -- -- -- (0.01) (0.02)
Net asset value, end of period $ 5.72 8.95 5.69 7.06 12.24 9.76
Total Return(2): % (36.09) 57.29 (19.41) (42.32) 25.50 4.39
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 4,630 14,392 18,278 13,867 23,796 8,936
Ratios to average net assets:
Net expenses after expense reimbursement(3)(5) % 2.63 2.50 2.50 2.30 2.42 1.75
Gross expenses prior to expense reimbursement(3) % 4.07 3.00 2.86 2.30 2.64 3.51
Net investment income (loss) after expense
reimbursement (3)(5) % (1.21) (1.05) (0.21) (0.32) (0.64) 0.52
Portfolio turnover % 108 173 193 187 176 40
</TABLE>
----------
(1) The Fund commenced operations on July 3, 1995.
(2) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(3) Annualized for periods less than one year.
(4) The Fund changed its fiscal year-end from December 31 to October 31
(5) The Investment Manager has agreed to limit expenses excluding interest,
taxes, brokerage and extraordinary expenses.
(6) Effective July 26, 2000 Pilgrim Investments, Inc. became the Investment
Manger of the Fund
See Accompanying Notes to Financial Statements
68
<PAGE>
FINANCIAL
HIGHLIGHTS PILGRIM TROIKA DIALOG RUSSIA FUND
--------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period.
<TABLE>
<CAPTION>
Class A
----------------------------------------------------------
Ten
months
ended Year ended December 31,
October 31, -------------------------------------------
2000(4)(6) 1999 1998 1997 1996(1)
---------- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 6.74 2.64 17.50 11.24 12.12
Income from investment operations:
Net investment income (loss) $ (0.07) 0.18 0.15 (0.01) (0.05)
Net realized and unrealized gain (loss) on investments $ 0.48 3.99 (14.70) 7.57 (0.51)
Total from investment operations $ 0.41 4.17 (14.55) 7.56 (0.56)
Less distributions from:
Net investment income $ -- (0.07) (0.07) -- --
Net realized gains on investments $ -- -- (0.24) (1.30) (0.32)
Total distributions $ -- (0.07) (0.31) (1.30) (0.32)
Net asset value, end of period $ 7.15 6.74 2.64 17.50 11.24
Total Return(2): % 6.08 159.76 (82.99) 67.50 (9.01)
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 53,637 59,011 19,147 137,873 13,846
Ratios to average net assets:
Net expenses after redemption fee proceeds and
expense reimbursement(3)(5) % 1.40 2.23 1.84 1.85 2.65
Gross expenses prior to redemption fee proceeds and
expense reimbursement(3) % 2.85 3.32 2.64 2.89 5.07
Net investment income (loss) after redemption fee
proceeds and expense reimbursement(3)(5) % (0.90) 4.39 1.36 (0.11) (1.27)
Portfolio turnover % 52 91 66 67 116
</TABLE>
----------
(1) The Fund's commencement of operations was June 3, 1996 with the investment
of its initial capital. The Fund's registration statement with the
Securities and Exchange Commission became effective on July 3, 1996.
Financial results prior to the effective date of the Fund's registration
statement are not presented in this Financial Highlights Table.
(2) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges.Total return for less than one year is not annualized.
(3) Annualized for periods less than one year.
(4) The Fund changed its fiscal year-end from December 31 to October 31.
(5) The Investment Manager has agreed to limit expenses excluding, interest,
taxes, brokerage and extraordinary expenses.
(6) Effective July 26, 2000 Pilgrim Investments, Inc. became the Investment
Manager of the fund.
See Accompanying Notes to Financial Statements
69
<PAGE>
FINANCIAL
PILGRIM GOLD FUND HIGHLIGHTS
--------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period.
<TABLE>
<CAPTION>
Class A
-------------------------------------------------------------------
Ten
months
ended Year ended December 31,
October 31, ----------------------------------------------------
2000(3)(4) 1999 1998 1997 1996 1995
---------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 3.29 3.03 3.24 5.97 6.24 6.37
Income from investment operations:
Net investment income (loss) $ 0.01 (0.01) -- -- 0.02 --
Net realized and unrealized gain
(loss) on investments $ (1.03) 0.27 (0.21) (2.52) 0.50 (0.12)
Total from investment operations $ (1.02) 0.26 (0.21) (2.52) 0.52 (0.12)
Less distributions from:
Net investment income $ -- -- -- (0.21) (0.79) (0.01)
Total distributions $ -- -- -- (0.21) (0.79) (0.01)
Net asset value, end of period $ 2.27 3.29 3.03 3.24 5.97 6.24
Total Return(1): % (30.98) 8.58 (6.39) (42.98) 7.84 (1.89)
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 40,130 72,516 50,841 53,707 109,287 135,779
Ratios to average net assets:
Expenses (2) % 2.18 1.94 1.74 1.65 1.60 1.70
Net investment income (loss) (2) % 0.28 (0.02) 0.08 0.17 (0.32) 0.07
Portfolio turnover % 27 79 29 38 31 40
</TABLE>
----------
(1) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(2) Annualized for periods less than one year.
(3) The Fund changed its fiscal year-end from December 31 to October 31.
(4) Effective July 26, 2000, Pilgrim Investments, Inc. became the Investment
Manager of the Fund.
See Accompanying Notes to Financial Statements
70
<PAGE>
FINANCIAL
HIGHLIGHTS PILGRIM SILVER FUND
--------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period.
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------------------------
Ten
months Six months
ended Year ended ended Year ended June 30,
October 31, December 31, December 31, ------------------------------------
2000(4)(6) 1999 1998(1) 1998 1997 1996 1995
---------- ---- ------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 2.96 2.73 3.26 3.95 4.46 4.00 3.92
Income from investment operations:
Net investment income (loss) $ 0.03 0.01 (0.01) (0.02) (0.04) (0.03) (0.03)
Net realized and unrealized gain
(loss) on investments $ (0.84) 0.23 (0.52) (0.66) (0.43) 0.51 0.11
Total from investment operations $ (0.81) 0.24 (0.53) (0.68) (0.47) 0.48 0.08
Less distributions from:
Net investment income $ (0.01) (0.01) -- (0.01) (0.04) -- --
In excess of net investment income $ -- -- -- -- -- (0.02) --
Total distributions $ (0.01) (0.01) -- (0.01) (0.04) (0.02) --
Net asset value, end of period $ 2.14 2.96 2.73 3.26 3.95 4.46 4.00
Total Return(2): % (27.45) 8.70 (16.26) (17.32) (10.76) 12.02 2.04
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 14,691 25,413 25,560 34,921 42,035 73,945 65,517
Ratios to average net assets:
Net expenses after expense
reimbursement(3)(5) % 2.46 2.11 2.37 1.90 1.96 1.73 1.82
Gross expenses prior to expense
reimbursement(3) % 2.78 -- -- -- -- -- --
Net investment income (loss)
after expense reimbursement(3)(5) % 1.07 0.49 (0.61) (0.54) (0.78) (0.72) (0.83)
Portfolio turnover % 9 29 6 29 19 44 44
</TABLE>
----------
(1) The Fund changed its fiscal year-end from June 30 to December 31.
(2) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(3) Annualized for periods less than one year.
(4) The Fund changed its fiscal year-end from December 31 to October 31.
(5) The Investment Manager has agreed to limit expenses excluding interest,
taxes, brokerage and extraordinary expenses.
(6) Effective July 26, 2000 Pilgrim Investments, Inc. became the Investment
Manager of the Fund.
See Accompanying Notes to Financial Statements
71
<PAGE>
FINANCIAL
PILGRIM GLOBAL INCOME FUND HIGHLIGHTS
--------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding throughout each
period.
<TABLE>
<CAPTION>
Class A Class C
----------------------------------------------------------------- -------------
Ten months September 26,
ended Year ended December 31, 2000(4) to
October 31, -------------------------------------------------- October 31,
2000(1)(6) 1999 1998 1997 1996 1995 2000
---------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 9.45 10.36 10.58 11.22 10.75 9.80 8.94
Income from investment operations:
Net investment income $ 1.15 1.16 0.90 1.04 1.01 0.96 --
Net realized and unrealized gain
(loss) on investments $ (1.50) (1.20) (0.07) (0.50) 0.36 0.95 0.73
Total from investment operations $ (0.35) (0.04) 0.83 0.54 1.37 1.91 0.73
Less distributions from:
Net investment income $ (0.21) (0.82) (0.87) (0.91) (0.86) (0.96) --
Return of capital $ (0.10) -- -- -- -- -- --
Net realized gains $ -- (0.05) (0.18) (0.27) (0.04) -- --
Total distributions $ (0.31) (0.87) (1.05) (1.18) (0.90) (0.96) --
Net asset value, end of period $ 8.79 9.45 10.36 10.58 11.22 10.75 9.47
Total Return(2): % (5.06) (0.31) 8.21 5.00 13.33 20.10 8.35
Ratios/Supplemental Data:
Net assets, end of period (000's) $ 14,904 31,696 36,407 23,668 29,110 12,255 3
Ratios to average net assets:
Net expenses after expense
reimbursement(3)(5) % 2.42 1.86 1.50 1.50 1.50 2.75 --
Gross expenses prior to expense
reimbursement(3) % 2.42 1.86 1.89 2.17 2.33 3.07 --
Net investment income (loss) after
expense reimbursement(3)(5) % 8.69 11.52 11.38 9.66 10.32 9.80 --
Portfolio turnover % 23 25 45 118 72 165 23
</TABLE>
----------
(1) The Fund changed its fiscal year-end from December 31 to October 31.
(2) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(3) Annualized for periods less than one year.
(4) Commencement of offering of shares
(5) The Investment Manager has agreed to limit expenses excluding interest,
taxes, brokerage and extraordinary expenses.
(6) Effective July 26, 2000 Pilgrim Investments, Inc became the Investment
Manager of the Fund.
See Accompanying Notes to Financial Statements
72
<PAGE>
-------
Pilgrim
Funds
-------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000
--------------------------------------------------------------------------------
NOTE 1 -- ORGANIZATION
Organization. The Pilgrim Funds are comprised of Pilgrim Mutual Funds ("PMF"),
Pilgrim Advisory Funds, Inc. ("PAF"), Pilgrim Mayflower Trust ("PMT"), Pilgrim
Global Corporate Leaders Fund ("Global Corporate Leaders") (formerly Lexington
Global Corporate Leaders Fund Inc.), Pilgrim International Fund
("International") (formerly Lexington International Fund Inc.), Pilgrim
Worldwide Emerging Markets Fund ("Worldwide Emerging Markets") (formerly
Lexington Worldwide Emerging Markets Fund Inc.), Pilgrim Global Technology Fund
("Global Technology") (formerly Lexington Global Technology Fund Inc.), Pilgrim
SmallCap Asia Growth Fund ("SmallCap Asia Growth") (formerly Lexington SmallCap
Asia Growth Fund Inc.), Pilgrim Troika Dialog Russia Fund ("Troika Dialog
Russia") (formerly Lexington Troika Dialog Russia Fund), Pilgrim Gold Fund
("Gold") (formerly Lexington Goldfund Inc.), Pilgrim Silver Fund ("Silver")
(formerly Lexington Silver Fund Inc.), and Pilgrim Global Income Fund ("Global
Income") (formerly Lexington Global Income Fund Inc.), which are each open-end
investment management companies registered under the Investment Company Act of
1940, as amended.
PMF is a Delaware business trust organized in 1992 with twelve separate series
(Portfolios). The "Funds" in this annual report are Pilgrim Worldwide Growth
Fund ("Worldwide Growth"), Pilgrim International Core Growth Fund
("International Core Growth"), Pilgrim International SmallCap Growth Fund
("International SmallCap Growth"), and Pilgrim Emerging Countries Fund
("Emerging Countries"). PAF is a Maryland Corporation organized in 1995 with
three separate series (Portfolios). The "Fund" in this annual report is Pilgrim
Asia-Pacific Equity Fund. PMT is a Massachusetts business trust organized in
1992 with six separate series (Portfolios). The "Funds" in this annual report
are Pilgrim International Value Fund and Pilgrim Emerging Markets Value Fund.
The investment objective of each Fund is described in each Fund's prospectus.
Each Fund offers one or more of the following classes of shares: Class A, Class
B, Class C, Class M and Class Q. The separate classes of shares differ
principally in the applicable sales charges (if any), distribution fees and
shareholder servicing fees. Shareholders of each class also bear certain
expenses that pertain to that particular class. All shareholders bear the common
expenses of the Fund and earn income from the portfolio pro rata based on the
average daily net assets of each class, without distinction between share
classes. Dividends are determined separately for each class based on income and
expenses allocable to each class. Realized gains are allocated to each class pro
rata based on the net assets of each class on the date of distribution. No class
has preferential dividend rights. Differences in per share dividend rates
generally result from the relative weighting of pro rata income and realized
gain allocations and from differences in separate class expenses, including
distribution, and shareholder servicing fees. Class B shares, along with their
pro rata reinvested dividend shares, automatically convert to Class A shares
approximately eight years after purchase.
Prior to April 30, 2000, Pilgrim Advisors, Inc. ("Pilgrim Advisors") served as
investment advisor to certain of the Funds. On April 30, 2000, Pilgrim Advisors
merged with Pilgrim Investments. Pilgrim Advisors and Pilgrim Investments, Inc.
were sister companies and shared certain resources and investment personnel.
Prior to July 26, 2000, Lexington Management Corporation ("Lexington") served
as investment advisor to certain of the former Lexington Funds. On July 26,
2000, ReliaStar Financial Corp. ("Reliastar") acquired Lexington Global Asset
Managers, Inc., the parent company of Lexington, and ING Pilgrim Investments,
Inc. was approved as Adviser to the Funds formerly advised by Lexington.
On September 1, 2000, ING Groep N.V. (NYSE: ING) acquired ReliaStar, the
indirect parent company of Pilgrim Investments, Inc., Adviser to the Funds,
Pilgrim Securities, Inc., Distributor to the Funds and Pilgrim Group, Inc.,
Administrator to the Funds. In conjunction with the acquisition the Adviser,
Distributor and Administrator changed their names to ING Pilgrim Investments,
Inc., ING Pilgrim Securities, Inc., and ING Pilgrim Group, Inc. ("PGI")
effective September 8, 2000.
Reorganizations. Before a shareholder approved reorganization effective July
24, 1998, the funds
73
<PAGE>
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Pilgrim
Funds
-------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
comprising PMF invested all of their assets in corresponding portfolios of
Nicholas-Applegate Investment Trust, an arrangement known as a "master/feeder"
structure. Upon the reorganization, the Institutional Portfolio series of the
Trust were renamed Funds and were authorized to issue multiple classes of
shares, and their outstanding shares were classified as Class I shares. At the
same time, the A, B, C and Advisory Portfolios of the Trust transferred their
assets to the corresponding Funds, and their shareholders received Class A, B, C
and Q shares of the Funds on a tax-free basis. Effective May 7, 1999 and
concurrent with the change in investment adviser from Nicholas Applegate Capital
Management to Pilgrim Investments, Inc., the Institutional Classes of PMF were
transferred in a tax free reorganization to new funds being managed by
Nicholas-Applegate Capital Management.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are consistently followed by the
Funds in the preparation of their financial statements, and such policies are in
conformity with generally accepted accounting principles for investment
companies.
A. Security Valuation. Investments in equity securities traded on a national
securities exchange or included on the NASDAQ National Market System are
valued at the last reported sale price. Securities traded on an exchange or
NASDAQ for which there has been no sale, securities traded in the
over-the-counter-market and gold and silver bullion are valued at the mean
between the last reported bid and ask prices. All investments quoted in
foreign currencies will be valued daily in U.S. dollars on the basis of the
foreign currency exchange rates prevailing at the time such valuation is
determined by each Fund's custodian. Securities for which market quotations
are not readily available are valued at their respective fair values as
determined in good faith and in accordance with policies set by the Board
of Directors. Investments in securities maturing in less than 60 days are
valued at cost, which, when combined with accrued interest, approximates
value.
B. Security Transactions and Revenue Recognition. Securities transactions are
accounted for on the trade date. Realized gains and losses are reported on
the basis of identified cost of securities delivered. Interest income is
recorded on an accrual basis. Dividend income is recorded on the
ex-dividend date, or for certain foreign securities, when the information
becomes available to the funds. Premium amortization and discount accretion
are determined by the effective yield method.
C. Foreign Currency Translation. The books and records of the Funds are
maintained in U.S. dollars. Any foreign currency amounts are translated
into U.S. dollars on the following basis:
(1) Market value of investment securities, other assets and liabilities --
at the exchange rates prevailing at the end of the day.
(2) Purchases and sales of investment securities, income and expenses --
at the rates of exchange prevailing on the respective dates of such
transactions.
Although the net assets and the market values are presented at the foreign
exchange rates at the end of the day, the Funds do not isolate the portion
of the results of operations resulting from changes in foreign exchange
rates on investments from the fluctuations arising from changes in market
prices of securities held. Such fluctuations are included with the net
realized and unrealized gains or losses from investments. For securities
which are subject to foreign withholding tax upon disposition, liabilities
are recorded on the statement of assets and liabilities for the estimated
tax withholding based on the securities current market value. Upon
disposition, realized gains or losses on such securities are recorded net
of foreign withholding tax.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized between the trade and settlement dates on
securities transactions, the difference between the amounts of dividends,
interest, and foreign withholding taxes recorded on the Fund's books, and
the U.S. dollar equivalent of the amounts
74
<PAGE>
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Pilgrim
Funds
-------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
actually received or paid. Net unrealized foreign exchange gains and losses
arise from changes in the value of assets and liabilities other than
investments in securities at fiscal year end, resulting from changes in the
exchange rate. Foreign security and currency transactions may involve
certain considerations and risks not typically associated with investing in
U.S. companies and the U.S. Government. These risks include but are not
limited to re-evaluation of currencies and future adverse political and
economic developments which could cause securities and their markets to be
less liquid and prices more volatile than those of comparable U.S.
companies and the U.S. Government.
D. Foreign Currency Transactions. Certain funds may enter into foreign
currency exchange transactions to convert to and from different foreign
currencies and to and from the U.S. dollar in connection with the planned
purchases or sales of securities. The Funds either enter into these
transactions on a spot basis at the spot rate prevailing in the foreign
currency exchange market or use forward foreign currency contracts to
purchase or sell foreign currencies. When the contract is fulfilled or
closed, gains or losses are realized. Until then, the gain or loss is
included in unrealized appreciation or depreciation. Risks may arise upon
entering into forward contracts from the potential inability of
counterparties to meet the terms of their forward contracts and from
unanticipated movements in the value of foreign currencies relative to the
U.S. dollar.
Each Fund may enter into futures contracts involving foreign currency,
interest rates, securities and securities indices, for hedging purposes
only. A futures contract obligates the seller of the contract to deliver
and the purchaser of the contract to take delivery of the type of foreign
currency, financial instrument or security called for in the contract at a
specified future time for a specified price. Upon entering into such a
contract, a Fund is required to deposit and maintain as collateral such
initial margin as required by the exchange on which the contract is traded.
Pursuant to the contract, a Fund agrees to receive from or pay to the
broker an amount equal to the daily fluctuations in the value of the
contract. Such receipts or payments are known as variation margins and are
recorded as unrealized gains or losses by the Fund. When the contract is
closed, the 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. There were no open futures contracts at October
31, 2000.
E. Distributions to Shareholders. The Funds record distributions to their
shareholders on ex-date. Each Fund pays dividends and capital gains, if any
annually. Pilgrim Global Income Fund pays dividends quarterly, if any.
The amount of distributions from net investment income and net realized
capital gains are determined in accordance with federal income tax
regulations, which may differ from generally accepted accounting
principles. These "book/tax" differences are either considered temporary or
permanent in nature. Key differences are the treatment of short-term
capital gains, foreign currency transactions, organization costs and other
temporary differences. To the extent that these differences are permanent
in nature, such amounts are reclassified within the capital accounts based
on their federal tax-basis treatment; temporary differences do not require
reclassifications. Distributions which exceed net investment income and net
realized capital gains for financial reporting purposes but not for tax
purposes, are reported as distributions in excess of net investment income
and/or net realized capital gains. To the extent they exceed net investment
income and/or net realized capital gains for tax purposes, they are
reported as distributions of paid-in capital. Accordingly, amounts as of
October 31, 2000 have been increased (decreased) through reclassification
as follows:
Accumlated
Undistributed net realized
(Distribution gains (losses)
is excess) on investments
Paid-in net investment and foreign
capital income currency transactions
------- ------ ---------------------
Worldwide Growth $(2,583,533) $1,823,273 $ 760,260
Global Corporate Leaders -- 171,228 (171,228)
75
<PAGE>
-------
Pilgrim
Funds
-------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Accumlated
Undistributed net realized
(Distribution gains (losses)
is excess) on investments
Paid-in net investment and foreign
capital income currency transactions
------- ------ ---------------------
International Value -- $ (378,812) $ 378,812
International -- 1,468,852 (1,468,852)
International Core $(2,726,638) 983,960 1,742,678
International SmallCap
Growth -- (922,028) 922,028
Emerging Markets Value -- (6,417) 6,417
Emerging Countries (3,127,882) 966,710 2,161,172
WorldwideEmerging
Markets (5,674,996) 1,604,409 4,070,587
Global Technology (37,393) 142,357 (104,964)
Asia-Pacific Equity (2,905) (1,129) 4,034
SmallCap Asia Growth (200,905) 127,980 72,925
Troika (723,617) 605,220 118,397
Gold 12,838,107 (73,681) (12,764,426)
Silver (954,860) (1,139) 955,999
Global Income (255,473) (1,212,444) 1,467,917
F. Federal Income Taxes. It is the policy of the Funds, to comply with the
requirements of the Internal Revenue Code that are applicable to regulated
investment companies and to distribute substantially all of their net
investment income and any net realized capital gains to their shareholders.
Therefore, a federal income tax provision is not required. In addition, by
distributing during each calendar year substantially all of its net
investment income and net realized capital gains, each Fund intends not to
be subject to any federal excise tax.
The Board of Directors/Trustees intends to offset any net capital gains
with any available capital loss carryforward until each carryforward has
been fully utilized or expires. In addition, no capital gain distribution
shall be made until the capital loss carryforward has been fully utilized
or expires.
Capital loss carryforwards were as follows at October 31, 2000:
Amount Expiration Dates
------ ----------------
Worldwide Growth $ 3,925,607 October 2008
International SmallCap Growth 10,815,771 October 2008
Emerging Countries 48,415,929 October 2006 to 2008
Worldwide Emerging Markets 11,424,744 October 2006
Asia-Pacific Equity 23,797,507 October 2007 to 2008
SmallCap Asia Growth 9,778,022 October 2007
Troika 62,419,331 October 2006 to 2007
Gold 81,765,466 October 2001 to 2008
Silver 14,137,606 October 2002 to 2008
Global Income 1,055,996 October 2007 to 2008
At October 31, 2000, Silver had $954,860 of capital loss carryforwards
expired.
G. Use of Estimates. Management of the Funds has made certain estimates and
assumptions relating to the reporting of assets, liabilities, income, and
expenses to prepare these financial statements in conformity with generally
accepted accounting principles. Actual results could differ from these
estimates.
H. Repurchase Agreements. Each Fund may invest in repurchase agreements only
with government securities dealers recognized by the Board of Governors of
the Federal Reserve System or with member banks of the Federal Reserve
System. Under such agreements, the seller of the security agrees to
repurchase it at a mutually agreed upon time and price. The resale price is
in excess of the purchase price and reflects an agreed upon interest rate
for the period of time the agreement is outstanding. The period of the
repurchase agreements is usually short, from overnight to one week, while
the underlying securities generally have longer maturities. Each Fund will
always receive as collateral securities acceptable to it whose market value
is equal to at least 100% of the amount being invested by the Fund. If the
seller defaults, a Fund might incur a loss or delay in the realization of
proceeds if the value of security collateralizing the repurchase agreement
declines, and it might incur disposition costs in liquidating the
collateral.
I. Deferred Organization Expenses. Expenses incurred in connection with the
organization and registration of Asia-Pacific Equity Fund under the
Investment Company Act of 1940 and the Securities Act of 1933
76
<PAGE>
-------
Pilgrim
Funds
-------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
are being amortized by the Fund over a period of five years from the date
of commencement of its operations.
J. Securities Lending. Each Fund had the option to temporarily loan 331|M/3%
of its total assets to brokers, dealers or other financial institutions in
exchange for a negotiated lender's fee. The borrower is required to fully
collateralize the loans with cash, letters of credit or U.S. Government
securities.
NOTE 3 -- INVESTMENT TRANSACTIONS
For the periods ended October 31, 2000, the cost of purchases and proceeds from
the sales of securities, excluding short-term securities, were as follows:
Purchases Sales
--------- -----
Worldwide Growth (1) $ 471,483,817 $455,557,275
Global Corporate Leaders (2) 539,129 1,277,449
International Value (3) 1,220,243,069 499,152,324
International (2) 35,009,602 25,746,787
International Core Growth (1) 61,346,868 58,790,704
International SmallCap Growth (1) 457,484,733 370,312,350
Emerging Markets Value (3) 5,536,260 12,214,229
Emerging Countries (1) 209,290,711 238,753,252
Worldwide Emerging Markets (2) 304,250,718 280,517,243
Global Technology (2) 26,841,728 14,739,867
Asia-Pacific Equity (1) 3,144,358 6,679,913
SmallCap Asia Growth (2) 10,869,988 16,828,594
Troika Dialog Russia (2) 32,851,783 25,655,070
Gold (2) 13,859,362 37,615,875
Silver (2) 1,513,709 19,626,641
Global Income (2) 3,820,155 12,387,642
----------
(1) For the period July 1, 2000 thru October 31, 2000 (2) For the period
January 1, thru October 31, 2000 (3) For the year ended October 31, 2000
NOTE 4 -- REDEMPTION FEE INCOME -- GLOBAL TECHNOLOGY AND TROIKA DIALOG RUSSIA
A fee is charged on the redemption of shares equal to 2% of the redemption price
of shares of the Fund held less than 365 days that are being redeemed.
Redemption fee proceeds will be applied to the Fund's aggregate expenses
allocable to providing custody and redemption services, including transfer agent
fees, postage, printing, telephone costs and employment costs relating to the
handling and processing of redemptions. Any excess fee proceeds will be added to
the Fund's capital. Total redemption fee proceeds for the ten months ended
October 31, 2000 were $11,109 and $856,074, respectively for Global Technology
and Troika. The amount available for offset against Fund expenses was $11,109
and $465,732, respectively for Global Technology and Troika and is set forth in
the statement of operations. Excess fee proceeds of $390,342 for Troika was
added to the Fund's capital.
NOTE 5 -- INVESTMENT MANAGEMENT AND ADMINISTRATIVE FEES
Each of the Funds has entered into an Investment Management Agreement with ING
Pilgrim Investments, Inc. ("the Manager"), a wholly-owned subsidiary of PGI. The
investment management agreements compensate the Manager with a fee, computed
daily and payable monthly, based on the average daily net assets of each Fund,
at the following annual rates:
As a percent of average net assets
----------------------------------
Worldwide Growth 1.00% on first $500 million; 0.90% on next
$500 million; and 0.85% in excess of $1 billion
Global Corporate Leaders 1.00%
International Value 1.00%
International 1.00%
International Core Growth 1.00% on first $500 million; 0.90%
on next $500 million; and 0.85% in excess of $1
billion
International SmallCap Growth 1.00% on first $500 million;
0.90% on next $500 million; and 0.85% in excess
of $1 billion
Emerging Markets Value 1.00%
Emerging Countries 1.25%
Worldwide Emerging Markets 1.00%
Global Technology 1.25%
Asia-Pacific Equity 1.25%
SmallCap Asia Growth 1.25%
Troika Dialog Russia 1.25%
Gold 1.00% on first $50 million; 0.75% thereafter
Silver 1.00% on first $30 million; 0.75% thereafter
Global Income 1.00%
For the period ended October 31, 2000 the Advisor earned $25,393,277 in
investment management fees.(A)
On July 31, 2000, Pilgrim Investments, Inc. notified Nicholas-Applegate Capital
Management ("NACM") of its intention to terminate NACM as sub-advisor to the
Worldwide Growth, International Core Growth and Emerging Countries effective
September 30, 2000. October 1, 2000, ING Pilgrim Investments, Inc. began
advising the Funds directly.
PGI (the "Administrator") serves as administrator to Global Corporate Leaders,
International Value,
77
<PAGE>
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Pilgrim
Funds
-------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
International, Worldwide Emerging Markets, Global Technology, SmallCap Asia
Growth, Troika Dialog Russia, Gold, Silver and Global Income Funds. The Funds
paid the Administrator a fee calculated at an annual rate of 0.10% of each
Fund's average daily net assets. International Value and Emerging Markets Value
also pay an annual shareholder account servicing fee of $5.00, payable
semi-annually, for each account of beneficial owners of shares. For the period
ended October 31, 2000 the Administrator earned $1,939,900 in administrative
and account servicing fees.(B)
----------
(A) Prior to July 26, 2000, the former Lexington Funds paid Lexington the same
fees for investment management.
(B) Prior to July 26, 2000, the former Lexington Funds did not pay an
administrative fee to Lexington.
NOTE 6 -- DISTRIBUTION FEES
Each share class of the Funds has adopted a Plan pursuant to Rule 12b-1 under
the 1940 Act (the "12b-1 Plans"), whereby ING Pilgrim Securities, Inc. (the
"Distributor") is reimbursed or compensated (depending on the class of shares)
by the Funds for expenses incurred in the distribution of each Funds' shares.
Pursuant to the 12b-1 Plans, the Distributor is entitled to payment each month
for actual expenses incurred in the distribution and promotion of each Fund's
shares, including the printing of prospectuses and reports used for sales
purposes, expenses of preparation and printing of sales literature and other
such distribution related expenses, including any distribution or service fees
paid to securities dealers who have executed a distribution agreement with the
Distributor. Under the 12b-1 Plans, each class of shares of the Fund pays the
Distributor the following annual fees:
Class A Class B Class C Class M Class Q
------- ------- ------- ------- -------
Worldwide Growth 0.35% 1.00% 1.00% N/A 0.25%
Global Corporate Leaders 0.25 N/A N/A N/A N/A
International Value 0.30 1.00 1.00 N/A 0.25
International 0.25 1.00 1.00 N/A 0.25
International Core Growth 0.35 1.00 1.00 N/A 0.25
International SmallCap Growth 0.35 1.00 1.00 N/A 0.25
Emerging Markets Value 0.30 1.00 1.00 N/A N/A
Emerging Countries 0.35 1.00 1.00 N/A 0.25
Worldwide Emerging Markets 0.25 N/A N/A N/A N/A
Global Technology 0.25 N/A N/A N/A N/A
Asia-Pacific Equity 0.25 1.00 N/A 0.75% N/A
SnallCap Asia Growth 0.25 1.00 N/A N/A 0.25
Troika Dialog Russia 0.25 N/A N/A N/A N/A
Gold 0.25 N/A N/A N/A N/A
Silver 0.25 N/A N/A N/A N/A
Global Income 0.25 1.00 1.00 N/A 0.25
Prior to July 26, 2000, the former Lexington Funds had a Distribution Plan ("the
Plan") which allowed payments to finance activities associated with the
distribution of the Fund's shares. The Plan provided that the Fund paid
distribution fees on a reimbursement basis, including payments to Lexington
Funds Distributor, Inc. ("LFD"), the Fund's distributor, in amounts not
exceeding 0.25% per annum of the Fund's average daily net assets.
Fees paid to the Distributor by class during the period ended October 31, 2000
are shown in the accompanying Statements of Operations. For the period ended
October 31, 2000, the Distributor earned $15,177,352 in Distributor fees.
The Distributor also receives the proceeds of the initial sales charge paid by
shareholders upon the purchase of Class A shares, and the contingent deferred
sales charge paid by shareholders upon certain redemptions for Class A, Class B,
and Class C shares. For the period ended October 31, 2000, the Distributor
earned the following amounts in sales charges:
Class A Class B Class C Class M
Shares Shares Shares Shares
------ ------ ------ ------
Initial Sales Charges $779,776 N/A N/A $132
Contingent deferred
sales charges $117,808 $ 0 $340,042 N/A
NOTE: International Value and Emerging Markets were for the year ended October
31, 2000. International Core Growth, International SmallCap Growth, Emerging
Countries, Asia-Pacific Equity, and Worldwide Growth were for the period from
July 1, 2000 to October 31, 2000. Worldwide Emerging Markets, Global Technology,
Global Corporate Leaders, SmallCap Asia Growth, Troika Dialog Russia, Global
Income, Gold, and Silver were for the period from August 1, 2000 to October 31,
2000.
NOTE 7 -- SHAREHOLDER SERVICING FEES
Each of the Funds has entered into a Service Agreement with PGI whereby PGI will
act as Shareholder Service Agent for each Fund. The agreement provides that PGI
will be compensated for incoming and outgoing shareholder telephone calls and
letters, and all reasonable out-of-pocket expenses incurred in connection with
the performance of such services. Fees accrued during the year ended October 31,
2000 are shown in the accompanying Statements of Operations.
78
<PAGE>
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Pilgrim
Funds
-------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
NOTE 8 -- EXPENSE WAIVERS
For the following Funds, the Investment Manager has voluntarily agreed to limit
expenses, excluding interest, taxes, brokerage and extraordinary expenses to the
levels listed below:
Maximum Operating Expense Limit
(as a percentage of average net assets)
-----------------------------------------------
Class A Class B Class C Class M Class Q
------- ------- ------- ------- -------
Worldwide Growth 1.85% 2.50% 2.50% N/A 1.60%
Global Corporate Leaders 2.75% N/A N/A N/A N/A
International Value N/A N/A N/A N/A N/A
International 2.75 3.50% 3.50% N/A 2.75%
International Core Growth 1.95 2.60 2.60 N/A 1.65
International SmallCap Growth 1.95 2.60 2.60 N/A 1.65
Emerging Markets Value N/A N/A N/A N/A N/A
Emerging Countries 2.25 2.90 2.90 N/A 1.90
Worldwide Emerging Markets 2.75 N/A N/A N/A N/A
Global Technology 2.75 N/A N/A N/A N/A
Asia-Pacific Equity 2.00 2.75 N/A 2.50% N/A
SmallCap Asia Growth 2.75 3.50 N/A N/A N/A
Troika Dialog Russia 3.35 4.10 N/A N/A N/A
Gold 2.75 N/A N/A N/A N/A
Silver 2.75 N/A N/A N/A N/A
Global Income 2.75 3.50 3.50 N/A 2.75
NOTE 9 -- CREDIT FACILITY
The Pilgrim Funds, Pilgrim Equity Trust and Pilgrim Mayflower Trust have entered
into an unsecured committed revolving line of credit agreement with State Street
Bank and Trust Company for an aggregate amount of $50,000,000. In addition,
Pilgrim Investment Funds, Inc., Pilgrim Advisory Funds, Inc., Pilgrim Bank &
Thrift Fund, Inc., Pilgrim Government Securities Income Fund, Inc. and Pilgrim
Mutual Funds have entered into an unsecured committed revolving line of credit
agreement ("the Credit Agreements") with State Street Bank and Trust Company for
an aggregate amount of $75,000,000. The proceeds may be used only to (1)
temporarily finance the purchase and sale of securities; (2) finance the
redemption of shares of an Investor in the Funds; and (3) enable the Funds to
meet other emergency expenses as defined in the Credit Agreements. Each Fund
pays its pro rata share of an annual commitment fee plus interest on its
specific borrowings. As of and for the periods ended October 31, 2000 there was
no balance outstanding under the credit facility.
NOTE 10 -- CAPITAL SHARES
Transactions in capital shares and dollars were as follows:
<TABLE>
<CAPTION>
Class A Shares
------------------------------------------------------------------
Four Months Year Three Months Year
Ended Ended Ended Ended
October 31, June 30, June 30, March 31,
2000 2000 1999 1999
------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Worldwide Growth
(Number of Shares)
Shares sold 4,005,399 14,001,807 1,172,285 5,575,910
Shares issued as
reinvestment of
dividends 422,437 86 96,384 --
Shares redeemed (2,499,778) (9,384,459) (660,100) (5,374,372)
------------- ------------- ------------ -------------
Net increase in shares
outstanding 1,505,621 5,039,785 512,271 297,922
============= ============= ============ =============
Worldwide Growth ($)
Shares sold $ 116,318,819 $ 404,667,268 $ 26,425,907 $ 110,310,826
Shares issued as
reinvestment of
dividends 10,797,545 -- 1,739,418 --
Shares redeemed (73,218,592) (273,872,546) (14,957,153) (107,031,318)
------------- ------------- ------------ -------------
Net increase in shares
outstanding $ 43,100,227 $ 141,592,267 $ 11,468,754 $ 5,018,926
============= ============= ============ =============
Class B Shares
--------------------------------------------------------------
Four Months Year Three Months Year
Ended Ended Ended Ended
October 31, June 30, June 30, March 31,
2000 2000 1999 1999
------------ ------------ ----------- ------------
Worldwide Growth
(Number of Shares)
Shares sold 631,926 2,987,911 353,077 544,757
Shares issued as
reinvestment of
dividends 192,099 -- 39,170
Shares redeemed (230,519) (336,704) (70,889) (319,228)
------------ ------------ ----------- ------------
Net increase in shares
outstanding 401,407 2,843,306 282,188 264,699
============ ============ =========== ============
Worldwide Growth ($)
Shares sold $ 20,649,472 $ 95,993,252 $ 9,019,106 $ 11,616,885
Shares issued as
reinvestment of
dividends 5,534,613 -- 799,305
Shares redeemed (7,450,350) (10,888,095) (1,811,055) (6,778,733)
------------ ------------ ----------- ------------
Net increase in shares
outstanding $ 13,199,122 $ 90,639,770 $ 7,208,051 $ 5,637,457
============ ============ =========== ============
</TABLE>
79
<PAGE>
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Pilgrim
Funds
-------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C Shares
---------------------------------------------------------------
Four Months Year Three Months Year
Ended Ended Ended Ended
October 31, June 30, June 30, March 31,
2000 2000 1999 1999
------------ ------------- ----------- ------------
<S> <C> <C> <C> <C>
Worldwide Growth
(Number of Shares)
Shares sold 1,218,370 3,546,660 316,937 1,258,419
Shares issued as
reinvestment of
dividends -- 554,745 -- 117,737
Shares redeemed (1,075,019) (797,116) (195,915) (1,224,596)
------------ ------------- ----------- ------------
Net increase (decrease) in
shares outstanding 143,351 3,304,289 121,022 151,560
============ ============= =========== ============
Worldwide Growth ($)
Shares sold $ 34,976,677 $ 103,794,801 $ 7,199,228 $ 23,846,842
Shares issued as
reinvestment of
dividends -- 14,207,022 -- 2,145,255
Shares redeemed (31,067,826) (22,853,219) (4,443,951) (22,854,997)
------------ ------------- ----------- ------------
Net increase (decrease) in
shares outstanding $ 3,908,851 $ 95,148,604 $ 2,755,277 $ 3,137,100
============ ============= =========== ============
Class Q Shares
--------------------------------------------------------------
Four Months Year Year Year
Ended Ended Ended Ended
October 31, June 30, June 30, March 31,
2000 1999 1999 1999
------------ ------------ ------------ -----------
Worldwide Growth
(Number of Shares)
Shares sold 458,143 1,816,105 430,631 350,299
Shares issued as
reinvestment of
dividends -- 85,463 -- 4,352
Shares redeemed (562,214) (873,920) (180,058) (89,828)
------------ ------------ ------------ -----------
Net increase (decrease) in
shares outstanding (104,071) 1,027,648 250,573 264,823
============ ============ ============ ===========
Worldwide Growth ($)
Shares sold $ 15,506,281 $ 60,334,275 $ 11,187,418 $ 7,773,616
Shares issued as
reinvestment of
dividends -- 2,513,469 -- 89,521
Shares redeemed (18,881,326) (30,258,824) (4,610,453) (1,884,358)
------------ ------------ ------------ -----------
Net increase (decrease) in
shares outstanding $ (3,375,045) $ 32,588,920 $ 6,576,965 $ 5,978,779
============ ============ ============ ===========
Class A Shares
--------------------------------------------
Ten Months Year Year
Ended Ended Ended
October 31, December 31, December 31,
2000 1999 1998
----------- ----------- ------------
Global Corporate Leaders (Number of Shares)
Shares sold 426,731 284,800 417,735
Shares issued as reinvestments of dividends -- 78,562 459,871
Shares redeemed (451,817) (648,697) (2,311,185)
----------- ----------- ------------
Net decrease in shares outstanding (25,086) (285,335) (1,433,579)
=========== =========== ============
Global Corporate Leaders ($)
Shares sold $ 4,872,027 $ 2,893,261 $ 4,884,051
Shares issued as reinvestments of dividends -- 917,731 4,402,616
Shares redeemed (5,203,040) (6,684,363) (27,606,682)
----------- ----------- ------------
Net decrease in shares outstanding $ (331,013) $(2,873,371) $(18,320,015)
=========== =========== ============
</TABLE>
80
<PAGE>
-------
Pilgrim
Funds
-------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Shares Class B Shares
--------------------------------- -------------------------------
Year Year
Ended Ended
October 31, October 31,
--------------------------------- -------------------------------
2000 1999 2000 1999
--------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
International Value
(Number of Shares)
Shares sold 83,175,007 37,389,180 9.796,492 8,274,008
Shares issued as reinvestments
of dividends 1,328,930 1,139,195 622,312 520,861
Shares redeemed (59,935,901) (25,654,229) (2,916,805) (2,066,590)
--------------- ------------- ------------- -------------
Net increase in shares
outstanding 24,568,036 12,874,146 7,501,999 6,728,279
=============== ============= ============= =============
International Value ($)
Shares sold $ 1,354,284,766 $ 491,487,619 $ 157,186,306 $ 111,215,626
Shares issued as reinvestments
of dividends 21,993,188 13,398,457 10,213,421 6,044,049
Shares redeemed (975,073,293) (331,576,463) (46,780,828) (26,329,963)
--------------- ------------- ------------- -------------
Net increase in shares
outstanding $ 401,204,661 $ 173,309,613 $ 120,618,899 $ 90,929,712
=============== ============= ============= =============
Class C Shares Class Q Shares
------------------------------- -----------------------------
Year Year
Ended Ended
October 31, October 31,
------------------------------- -----------------------------
2000 1999 2000 2000
------------- ------------- ------------ ------------
International Value
(Number of Shares)
Shares sold 19,178,129 12,104,834 1,548,084 913,289
Shares issued as reinvestments
of dividends 732,571 515,060 -- --
Shares redeemed (4,309,599) (3,018,495) (56,473) (1,321)
------------- ------------- ------------ ------------
Net increase in shares
outstanding 15,601,101 9,601,399 1,491,611 911,968
============= ============= ============ ============
International Value ($)
Shares sold $ 307,905,636 $ 162,419,735 $ 24,545,939 13,989,768
Shares issued as reinvestments
of dividends 11,999,531 5,974,729 -- --
Shares redeemed (68,808,206) (39,186,243) (943,654) (21,126)
------------- ------------- ------------ ------------
Net increase in shares
outstanding $ 251,096,961 $ 129,208,221 $ 23,602,285 $ 13,968,642
============= ============= ============ ============
Class A Shares Class B Shares Class C Shares
---------------------------------------------- ----------- --------------
Ten Months Year Year Ten Months Ten Months
Ended Ended Ended Ended Ended
October 31, December 31, December 31, October 31, October 31,
2000 1999 1998 2000 2000
------------ ------------ ------------ --------- -------
International
(Number of Shares)
Shares sold 1,779,250 416,856 1,005,127 17,961 7,588
Shares issued as reinvestment
of dividends 81,693 329,564 58,468 -- --
Shares redeemed (1,009,539) (933,028) (970,855) (10,781) --
------------ ------------ ------------ --------- -------
Net increase (decrease) in
shares outstanding 851,404 (186,608) 92,740 7,180 7,588
============ ============ ============ ========= =======
International ($)
Shares sold $ 22,592,548 $ 5,619,698 $ 11,440,387 $ 206,897 $88,184
Shares issued as reinvestment
of dividends 1,011,365 4,382,040 669,485 -- --
Shares redeemed (13,336,314) (12,165,686) (10,843,052) (125,052) --
------------ ------------ ------------ --------- -------
Net increase (decrease) in
shares outstanding $ 10,267,599 $ (2,163,948) $ 1,266,820 $ 81,845 $88,184
============ ============ ============ ========= =======
</TABLE>
81
<PAGE>
-------
Pilgrim
Funds
-------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Shares
----------------------------------------------------------------
Four Months Year Three Months Year
Ended Ended Ended Ended
October 31, June 30, June 30, March 31,
2000 2000 1999 1999
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
International Core Growth
(Number of Shares)
Shares sold 1,609,319 5,045,863 1,699,541 4,111,884
Shares issued as
reinvestment of
dividends 33,304 -- 5,819
Shares redeemed (1,446,511) (4,770,319) (2,264,636) (3,641,067)
------------ ------------- ------------ ------------
Net increase in
shares outstanding 162,808 308,848 (565,095) 476,636
============ ============= ============ ============
International Core
Growth ($)
Shares sold $ 35,660,867 $ 121,096,575 $ 30,866,314 $ 72,899,494
Shares issued as
reinvestment of
dividends 740,357 -- 109,877
Shares redeemed (32,390,856) (114,696,068) (41,080,307) (65,603,216)
------------ ------------- ------------ ------------
Net increase in
shares outstanding $ 3,270,011 $ 7,140,864 $(10,213,993) $ 7,406,155
============ ============= ============ ============
Class B Shares
----------------------------------------------------------
Four Months Year Three Months Year
Ended Ended Ended Ended
October 31, June 30, June 30, March 31,
2000 2000 1999 1999
----------- ------------ --------- -----------
<S> <C> <C> <C> <C>
International Core Growth
(Number of Shares)
Shares sold 177,101 458,137 47,812 317,938
Shares issued as
reinvestment of
dividends 30,801 -- 2,484
Shares redeemed (165,362) (215,896) (33,706) (168,120)
----------- ------------ --------- -----------
Net increase in
shares outstanding 11,739 273,042 14,106 152,302
=========== ============ ========= ===========
International Core
Growth ($)
Shares sold $ 4,037,626 $ 11,335,788 $ 888,899 $ 5,553,372
Shares issued as
reinvestment of
dividends 689,313 -- 47,437
Shares redeemed (3,765,765) (5,138,991) (610,199) (2,893,130)
----------- ------------ --------- -----------
Net increase in
shares outstanding $ 271,861 $ 6,886,110 $ 278,700 $ 2,707,679
=========== ============ ========= ===========
Class C Shares
-------------------------------------------------------------
Four Months Year 3 Months Year
Ended Ended Ended Ended
October 31, June 30, June 30, March 31,
2000 2000 1999 1999
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
International Core Growth
(Number of Shares)
Shares sold 1,025,108 1,618,402 113,784 455,651
Shares issued as
reinvestment of
dividends 33,214 -- 1,471
Shares redeemed (925,675) (1,158,306) (69,740) (82,349)
------------ ------------ ----------- -----------
Net increase (decrease) in
shares outstanding 99,433 493,310 44,044 374,773
============ ============ =========== ===========
International Core
Growth ($)
Shares sold $ 23,241,494 $ 39,015,970 $ 2,117,597 $ 7,964,267
Shares issued as
reinvestment of
dividends 745,659 -- 28,148
Shares redeemed (21,161,483) (27,691,220) (1,298,517) (1,412,367)
------------ ------------ ----------- -----------
Net increase (decrease) in
shares outstanding $ 2,080,011 $ 12,070,409 $ 819,080 $ 6,580,048
============ ============ =========== ===========
Class Q Shares
-------------------------------------------------------------
Four Months Year Three Months Year
Ended Ended Ended Ended
October 31, June 30, June 30, March 31,
2000 2000 1999 1999
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
International Core Growth
(Number of Shares)
Shares sold 165,852 780,577 93,649 581,442
Shares issued as
reinvestment of
dividends -- 24,738 -- 1,463
Shares redeemed (193,498) (615,038) (228,977) (67,954)
----------- ------------ ----------- ------------
Net increase (decrease) in
shares outstanding (27,646) 190,277 (135,328) 514,951
=========== ============ =========== ============
International Core
Growth ($)
Shares sold $ 3,896,070 $ 20,639,997 $ 1,771,267 $ 10,297,873
Shares issued as
reinvestment of
dividends -- 572,187 -- 31,169
Shares redeemed (4,527,377) (16,620,923) (4,253,651) (1,185,061)
----------- ------------ ----------- ------------
Net increase (decrease) in
shares outstanding $ (631,307) $ 4,591,261 $(2,482,384) $ 9,143,981
=========== ============ =========== ============
</TABLE>
82
<PAGE>
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Pilgrim
Funds
-------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Shares
------------------------------------------------------------------
Ten Months Year Three Months Year
Ended Ended Ended Ended
October 31, June 30, June 30, March 31,
2000 2000 1999 1999
------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
International SmallCap Growth
(Number of Shares)
Shares sold 7,284,746 18,367,774 1,367,921 4,953,991
Shares issued as reinvestment
of dividends -- 169,910 -- 41,096
Shares redeemed (6,508,231) (13,311,135) (997,179) (4,370,199)
------------- ------------- ------------ -------------
Net increase in shares
outstanding 776,515 5,226,549 370,742 624,888
============= ============= ============ =============
International SmallCap Growth ($)
Shares sold $ 281,224,096 $ 753,445,372 $ 30,182,958 $ 101,529,799
Shares issued as reinvestment
of dividends -- 5,544,302 -- 811,876
Shares redeemed (252,360,434) (552,362,495) (22,024,759) (90,418,518)
------------- ------------- ------------ -------------
Net increase in shares
outstanding $ 28,863,662 $ 206,627,179 $ 8,158,199 $ 11,923,157
============= ============= ============ =============
Class B Shares
---------------------------------------------------------------
Ten Months Year Three Months Year
Ended Ended Ended Ended
October 31, June 30, June 30, March 31,
2000 2000 1999 1999
------------ ------------- ----------- ------------
<S> <C> <C> <C> <C>
International SmallCap Growth
(Number of Shares)
Shares sold 647,440 2,668,131 98,528 574,326
Shares issued as reinvestment
of dividends 85,395 -- 21,611
Shares redeemed (364,779) (465,407) (55,682) (472,298)
------------ ------------- ----------- ------------
Net increase in shares
outstanding 282,661 2,288,119 42,846 123,639
============ ============= =========== ============
International SmallCap Growth ($)
Shares sold $ 27,240,137 $ 110,600,703 $ 2,333,350 $ 12,177,504
Shares issued as reinvestment
of dividends 2,953,812 -- 452,596
Shares redeemed (15,204,196) (20,315,971) (1,302,925) (9,959,007)
------------ ------------- ----------- ------------
Net increase in shares
outstanding $ 12,035,941 $ 93,238,544 $ 1,030,425 $ 2,671,093
============ ============= =========== ============
Class C Shares
---------------------------------------------------------------
Ten Months Year Three Months Year
Ended Ended Ended Ended
October 31, June 30, June 30, March 31,
2000 2000 1999 1999
------------ ------------- ----------- ------------
<S> <C> <C> <C> <C>
International SmallCap Growth
(Number of Shares)
Shares sold 1,025,749 4,361,314 146,271 660,257
Shares issued as reinvestment
of dividends -- 80,888 -- 13,435
Shares redeemed (736,411) (1,600,661) (34,123) (464,252)
------------ ------------- ----------- ------------
Net increase in shares
outstanding 289,338 2,841,541 112,148 209,440
============ ============= =========== ============
International SmallCap Growth ($)
Shares sold $ 38,976,927 $ 174,228,168 $ 3,168,229 $ 12,933,840
Shares issued as reinvestment
of dividends -- 2,568,991 -- 258,146
Shares redeemed (28,136,442) (63,584,070) (740,072) (9,055,952)
------------ ------------- ----------- ------------
Net increase in shares
outstanding $ 10,840,485 $ 113,213,089 $ 2,428,157 $ 4,136,034
============ ============= =========== ============
Class Q Shares
----------------------------------------------------------------
Ten Months Year Three Months Year
Ended Ended Ended Ended
October 31, June 30, June 30, March 31,
2000 2000 1999 1999
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
International SmallCap Growth
(Number of Shares)
Shares sold 2,318,401 6,375,425 529,877 1,567,046
Shares issued as reinvestment
of dividends -- 154,058 -- 12,918
Shares redeemed (1,788,278) (4,450,408) (269,090) (563,058)
------------ ------------- ------------ ------------
Net increase in shares
outstanding 530,123 2,079,075 260,787 1,016,906
============ ============= ============ ============
International SmallCap Growth ($)
Shares sold $ 95,855,054 $ 267,585,482 $ 12,505,725 $ 32,536,160
Shares issued as reinvestment
of dividends -- 4,781,312 -- 249,737
Shares redeemed (75,048,798) (196,319,048) (6,328,290) (11,408,948)
------------ ------------- ------------ ------------
Net increase in shares
outstanding $ 20,806,256 $ 76,047,746 $ 6,177,435 $ 21,376,949
============ ============= ============ ============
Class A Shares Class B Shares Class C Shares
--------------------------- ----------------------------- -----------------------------
Year Year Year
Ended Ended Ended
October 31, October 31, October 31,
--------------------------- ----------------------------- -----------------------------
2000 1999 2000 1999 2000 1999
----------- ----------- ----------- ------------- ----------- -------------
Emerging Markets Value
(Number of Shares)
Shares sold 113,319 655,250 110,879 8,274,008 83,040 12,104,834
Shares issued as reinvestment
of dividends 30,132 4,477 11,603 520,861 23,727 515,060
Shares redeemed (569,672) (286,580) (80,104) (2,066,590) (297,693) (3,018,495)
----------- ----------- ----------- ------------- ----------- -------------
Net increase (decrease) in
shares outstanding (426,221) 373,147 42,378 6,728,279 (190,926) 9,601,399
=========== =========== =========== ============= =========== =============
Emerging Markets Value ($)
Shares sold $ 1,315,229 $ 5,675,647 $ 1,283,093 $ 111,215,626 $ 995,277 $ 162,419,735
Shares issued as reinvestment
of dividends 357,971 33,577 137,491 6,044,049 279,747 5,974,729
Shares redeemed (6,439,155) (2,642,410) (913,790) (26,329,963) (3,443,514) (39,186,243)
----------- ----------- ----------- ------------- ----------- -------------
Net increase (decrease) in
shares outstanding $(4,765,955) $ 3,066,814 $ 506,794 $ 90,929,712 $(2,168,490) $ 129,208,221
=========== =========== =========== ============= =========== =============
</TABLE>
83
<PAGE>
-------
Pilgrim
Funds
-------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Shares
----------------------------------------------------------------
Four Months Year Three Months Year
Ended Ended Ended Ended
October 31, June 30, June 30, March 31,
2000 2000 1999 1999
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
Emerging Countries
(Number of Shares)
Shares sold 2,018,292 7,123,710 1,064,600 3,262,352
Shares issued as reinvestment
of dividends -- -- -- 17,479
Shares redeemed (2,106,144) (6,583,130) (1,382,928) (3,852,081)
------------ ------------- ------------ ------------
Net increase (decrease) in
shares outstanding (87,852) 540,580 (318,328) (572,250)
============ ============= ============ ============
Emerging Countries ($)
Shares sold $ 37,136,028 $ 142,495,750 $ 16,015,629 $ 45,426,994
Shares issued as reinvestment
of dividends -- -- -- 277,913
Shares redeemed (39,399,667) (131,430,829) (20,693,691) (51,942,286)
------------ ------------- ------------ ------------
Net increase (decrease) in
shares outstanding $ (2,263,639) $ 11,064,921 $ (4,678,062) $ (6,237,379)
============ ============= ============ ============
Class B Shares
------------------------------------------------------------
Four Months Year Three Months Year
Ended Ended Ended Ended
October 31, June 30, June 30, March 31,
2000 2000 1999 1999
----------- ----------- ----------- ------------
Emerging Countries
(Number of Shares)
Shares sold 72,083 261,876 82,535 382,174
Shares issued as reinvestment
of dividends -- -- -- 7,286
Shares redeemed (181,835) (320,122) (168,473) (951,609)
----------- ----------- ----------- ------------
Net increase (decrease) in
shares outstanding (109,752) (58,246) (85,938) (562,149)
=========== =========== =========== ============
Emerging Countries ($)
Shares sold $ 1,296,696 $ 5,287,628 $ 1,322,669 $ 5,698,657
Shares issued as reinvestment
of dividends -- -- -- 118,138
Shares redeemed (3,310,448) (6,237,718) (2,572,889) (12,756,398)
----------- ----------- ----------- ------------
Net increase (decrease) in
shares outstanding $(2,013,752) $ (950,090) $(1,250,220) $ (6,939,603)
=========== =========== =========== ============
Class C Shares
------------------------------------------------------------
Four Months Year Three Months Year
Ended Ended Ended Ended
October 31, June 30, June 30, March 31,
2000 2000 1999 1999
----------- ----------- ----------- ------------
Emerging Countries
(Number of Shares)
Shares sold 80,835 395,139 116,572 521,678
Shares issued as reinvestment
of dividends -- -- -- 5,264
Shares redeemed (174,804) (363,300) (99,525) (1,239,995)
----------- ----------- ----------- ------------
Net increase (decrease) in
shares outstanding (93,969) 31,839 17,047 (713,053)
=========== =========== =========== ============
Emerging Countries ($)
Shares sold $ 1,412,550 $ 7,854,682 $ 1,744,612 $ 7,326,720
Shares issued as reinvestment
of dividends -- -- -- 82,205
Shares redeemed (3,092,478) (6,755,539) (1,481,896) (16,381,157)
----------- ----------- ----------- ------------
Net increase (decrease) in
shares outstanding $(1,679,928) $ 1,099,143 $ 262,716 $ (8,972,232)
=========== =========== =========== ============
Class Q Shares
---------------------------------------------------------------
Four Months Year Three Months Year
Ended Ended Ended Ended
October 31, June 30, June 30, March 31,
2000 2000 1999 1999
------------ ------------ ------------ ------------
Emerging Countries
(Number of Shares)
Shares sold 1,364,617 4,383,749 1,208,239 4,616,946
Shares issued as reinvestment
of dividends -- -- -- 36,438
Shares redeemed (1,825,785) (3,235,471) (459,541) (3,431,547)
------------ ------------ ------------ ------------
Net increase (decrease) in
shares outstanding (461,168) 1,148,278 748,698 1,221,837
============ ============ ============ ============
Emerging Countries ($)
Shares sold $ 26,686,067 $ 94,747,678 $ 19,053,123 $ 65,385,070
Shares issued as reinvestment
of dividends -- -- -- 593,577
Shares redeemed (34,329,659) (67,344,187) (7,234,180) (45,346,860)
------------ ------------ ------------ ------------
Net increase (decrease) in
shares outstanding $ (7,643,592) $ 27,403,491 (11,818,943) $ 20,631,787
============ ============ ============ ============
</TABLE>
Class A Shares
------------------------------
Ten Months Year
Ended Ended
October 31, December 31,
2000 1999
------------- ------------
Worldwide Emerging Markets
(Number of Shares)
Shares sold 14,046,296 9,845,634
Shares issued as reinvestment of dividends -- 29,543
Shares redeemed (15,189,999) (8,770,026)
------------- ------------
Net increase (decrease) in shares outstanding (1,143,703) 1,105,151
============= ============
Worldwide Emerging Markets ($)
Shares sold $ 217,321,414 $ 99,235,547
Shares issued as reinvestment of dividends -- 268,725
Shares redeemed (233,409,624) (78,005,927)
------------- ------------
Net increase (decrease) in shares outstanding $ (16,088,210) $ 21,498,345
============= ============
84
<PAGE>
-------
Pilgrim
Funds
-------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Class A Shares
------------
Ten Months
Ended
October 31,
2000
------------
Global Technology
(Number of Shares)
Shares sold 1,296,778
Shares issued as reinvestment of dividends --
Shares redeemed (176,126)
------------
Net increase in shares outstanding 1,120,652
============
Global Technology ($)
Shares sold $ 14,993,431
Shares issued as reinvestment of dividends --
Shares redeemed (1,908,595)
------------
Net increase in shares outstanding $ 13,084,836
============
Class A Shares
----------------------------------------------
Four Months Year Year
Ended Ended Ended
October 31, June 30, June 30,
2000 2000 1999
------------ ------------ -------------
Asia-Pacific Equity
(Number of Shares)
Shares sold 2,793,903 9,625,972 25,333,718
Shares issued as reinvestment
of dividends -- -- --
Shares redeemed (2,717,440) (10,000,540) (25,985,521)
------------ ------------ -------------
Net increase (decrease) in
shares outstanding 76,463 (374,568) (651,803)
============ ============ =============
Asia-Pacific Equity ($)
Shares sold $ 17,553,287 $ 71,934,635 $ 120,602,739
Shares issued as reinvestment
of dividends -- -- --
Shares redeemed (17,612,355) (75,845,503) (124,586,962)
------------ ------------ -------------
Net increase (decrease) in
shares outstanding $ (59,068) $ (3,910,868) $ (3,984,223)
============ ============ =============
<TABLE>
<CAPTION>
Class B Shares Class M Shares
--------------------------------------------- ---------------------------------------------
Four Months Year Year Four Months Year Year
Ended Ended Ended Ended Ended Ended
October 31, June 30, June 30, October 31, June 30, June 30,
2000 1999 1999 2000 1999 1999
----------- ------------ ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Asia-Pacific Equity
(Number of Shares)
Shares sold 286,379 2,243,981 2,652,841 263,666 2,025,542 692,204
Shares issued as reinvestment
of dividends -- -- -- -- -- --
Shares redeemed (441,432) (2,335,887) (2,886,015) (237,827) (2,226,145) (927,629)
----------- ------------ ------------ ----------- ------------ -----------
Net increase (decrease) in
shares outstanding (155,053) (91,906) (233,174) 25,839 (200,603) (235,425)
=========== ============ ============ =========== ============ ===========
Asia-Pacific Equity ($)
Shares sold $ 1,779,638 $ 16,295,675 $ 13,490,585 $ 1,270,633 $ 15,526,895 $ 3,734,225
Shares issued as reinvestment
of dividends -- -- -- -- -- --
Shares redeemed (2,748,440) (17,125,978) (14,427,377) (1,278,324) (17,704,044) (4,867,780)
----------- ------------ ------------ ----------- ------------ -----------
Net increase (decrease) in
shares outstanding $ (968,802) $ (830,303) $ (936,792) $ (7,691) $ (2,177,149) $(1,133,555)
=========== ============ ============ =========== ============ ===========
Class A Shares
----------------------------------------------
Ten Months Year Year
Ended Ended Ended
October 31, December 31, December 31,
2000 1999 1998
------------ ------------ ------------
SmallCap Asia Growth
(Number of Shares)
Shares sold 3,364,111 4,713,297 6,328,082
Shares issued as reinvestment of dividends -- -- --
Shares redeemed (4,161,853) (6,319,697) (5,043,321)
------------ ------------ ------------
Net decrease in shares outstanding (797,742) (1,606,400) 1,284,761
============ ============ ============
SmallCap Asia Growth ($)
Shares sold $ 26,449,435 $ 33,047,205 $ 37,640,881
Shares issued as reinvestment of dividends -- -- --
Shares redeemed (33,021,682) (41,720,654) (30,186,041)
------------ ------------ ------------
Net decrease in shares outstanding $ (6,572,247) $ (8,673,449) $ 7,454,840
============ ============ ============
</TABLE>
85
<PAGE>
-------
Pilgrim
Funds
-------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Shares
----------------------------------------------
Ten Months Year Year
Ended Ended Ended
October 31, December 31, December 31,
2000 1999 1998
------------ ------------ ------------
<S> <C> <C> <C>
Troika Dialog Russia
(Number of Shares)
Shares sold 6,948,006 9,870,288 6,682,804
Shares issued as reinvestment of dividends -- 146,380 893,025
Shares redeemed (8,205,646) (8,524,306) (8,192,746)
------------ ------------ ------------
Net increase (decrease) in shares outstanding (1,257,640) 1,492,362 (616,917)
============ ============ ============
Troika Dialog Russia ($)
Shares sold $ 54,557,755 $ 43,183,175 $ 46,991,263
Shares issued as reinvestment of dividends -- 554,533 2,202,785
Redemption fee proceeds 390,342 167,637 367,463
Shares redeemed (63,131,621) (36,262,949) (62,258,817)
------------ ------------ ------------
Net increase (decrease) in shares outstanding $ (8,183,524) $ 7,642,396 $(12,697,306)
============ ============ ============
Class A Shares
----------------------------------------------
Ten Months Year Year
Ended Ended Ended
October 31, December 31, December 31,
2000 1999 1998
------------ ------------ ------------
Gold
(Number of Shares)
Shares sold 5,296,727 10,050,258 15,653,921
Shares issued as reinvestment of dividends 5,467 6,190,600 15,753
Shares redeemed (9,603,010) (10,982,141) (15,516,610)
------------ ------------ ------------
Net increase (decrease) in shares outstanding (4,300,816) 5,258,717 153,064
============ ============ ============
Gold ($)
Shares sold $ 15,323,872 $ 31,794,471 $ 51,873,043
Shares issued as reinvestment of dividends 13,994 17,841,616 46,630
Shares redeemed (27,268,213) (34,746,635) (51,899,941)
------------ ------------ ------------
Net increase (decrease) in shares outstanding $(11,930,347) $ 14,889,452 $ 19,732
============ ============ ============
Class A Shares
--------------------------------------------
Ten Months Year Year
Ended Ended Ended
October 31, December 31, December 31,
2000 1999 1998
----------- ----------- ------------
Silver
(Number of Shares)
Shares sold 984,009 2,363,039 2,505,470
Shares issued as reinvestment of dividends 24,103 19,980 --
Shares redeemed (2,731,043) (3,155,876) (3,855,059)
----------- ----------- ------------
Net decrease in shares outstanding (1,722,931) (772,857) (1,349,589)
=========== =========== ============
Silver ($)
Shares sold $ 2,661,034 $ 6,914,213 $ 7,289,065
Shares issued as reinvestment of dividends 59,054 58,564 --
Shares redeemed (7,200,933) (9,032,468 (10,893,893)
----------- ----------- ------------
Net decrease in shares outstanding $(4,480,845) $(2,059,691) $ (3,604,828)
=========== =========== ============
</TABLE>
86
<PAGE>
-------
Pilgrim
Funds
-------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Shares Class C Shares
---------------------------------------------- --------------
Ten Months Year Year 10 months
Ended Ended Ended Ended
October 31, December 31, December 31, October 31
2000 1999 1998 2000
------------ ------------ ------------ ------
<S> <C> <C> <C> <C>
Global Income
(Number of Shares)
Shares sold 643,969 988,458 2,299,211 290
Shares issued as reinvestment of dividends 59,047 271,656 270,497 --
Shares redeemed (2,362,163) (1,417,988) (1,263,118) --
------------ ------------ ------------ ------
Net increase (decrease) in shares outstanding (1,659,147) (157,874) 1,306,590 290
============ ============ ============ ======
Global Income ($)
Shares sold $ 5,882,011 $ 9,855,762 $ 24,156,657 $2,869
Shares issued as reinvestment of dividends 548,207 2,637,633 3,013,322 --
Shares redeemed (21,582,756) (14,123,581) (13,368,656) --
------------ ------------ ------------ ------
Net increase (decrease) in shares outstanding $(15,152,538) $ (1,630,186) $ 13,801,323 $2,869
============ ============ ============ ======
</TABLE>
87
<PAGE>
-------
Pilgrim
Funds
--------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
NOTE 11 -- CHANGE IN FUND'S YEAR-END
Effective October 31, 2000 Worldwide Growth, International Core Growth,
International SmallCap Growth, Emerging Countries and Asia-Pacific Equity
changed their fiscal year-end from June 30 to October 31. Effective October 31,
2000, Global Corporate Leaders, International, Worldwide Emerging Markets,
Global Technology, SmallCap Asia Growth, Troika Dialog Russia, Gold, Silver and
Global Income changed their fiscal year-end from December 31 to October 31. This
change was done to facilitate the administration of the Funds.
NOTE 12 -- ILLIQUID SECURITIES
Pursuant to guidelines adopted by the Fund's Board of Directors, the following
securities have been deemed to be illiquid. The Funds currently limit investment
in illiquid securities to 15% of the Fund's net assets, at market value, at time
of purchase.
<TABLE>
<CAPTION>
Initial Percent
Acquisition of Net
Fund Security Shares Date Value Assets
---- -------- ------ ---- ----- ------
<S> <C> <C> <C> <C> <C>
SmallCap Asia Growth Asia World Online 124,700 12/15/99 $ 48,175 1.04%
Troika Dialog Russia Alfa Cement 38,000 3/25/97 573 0.00
Aviastar 65,000,000 6/25/97 42,193 0.08
Bashinformsvyaz 6,831,400 6/9/97 437,292 0.82
Chelyaben Pfd 450,000 2/26/97 3,150 0.01
Chelyabinskvyazinform 24,610 12/9/96 553,725 1.03
Moscow RegionElectrosvyaz 1,100 10/11/00 220,000 0.41
Gostinny Dvor 7,000 10/6/97 313 0.00
Irkutskelektrosviaz 270,000 2/17/97 143,100 0.27
Komienergo 5,500,000 8/5/97 21 0.00
Komitek Oil Co. 21 7/9/97 9 0.00
Krasnoyarskelectrosviaz 46,000 7/2/97 82,800 0.15
Lensvyaz 9,500 2/14/97 57,950 0.11
Megionneftegaz 96,982 2/14/97 242,455 0.45
Moscow City Telephone Network Pfd 189,500 8/16/97 255,825 0.48
Novosibirsk Telephone 20,383 7/17/97 224,213 0.42
Novosibirskelectrosvyaz 20,000 4/29/97 29,000 0.05
Permenergo Pfd 24,600 8/15/97 7,704 0.01
Purneftegaz 26,070 8/15/00 59,961 0.11
Rostov Region Electrosvyaz 238,125 1/27/00 228,600 0.43
Sakhalinmorneftegaz 180,300 8/16/00 766,275 1.43
Samarasvyazinform Pfd 9,300 11/20/96 88,350 0.16
Samarasvyazinform 28,000 8/1/96 1,008,000 1.88
Samson 23,800 7/9/97 168 0.00
Smolensksvyazinform Pfd 100,000 8/6/97 2,610 0.01
St Petersburg Telephone Pfd 110,000 10/3/97 20,900 0.04
St Petersburg Telephone 350,000 2/17/97 175,000 0.33
Sverdlovskenergo 1,335,000 6/18/96 54,735 0.10
Trade House Gum 235,000 2/16/00 340,750 0.64
Trade House Gum ADR 10,000 2/16/00 29,000 0.05
Transneft Pfd 1,800 7/27/97 185 0.00
Tyumentelecom 214,000 3/5/97 139,100 0.26
Tyumentelecom Ffd 279,099 2/6/97 27,910 0.05
Udmurtneft Pfd 4,000 1/20/97 80,000 0.15
Uralsvyazinform 10,000,000 8/8/97 113,000 0.21
Uralsvyazinform ADR 42,500 6/17/97 104,588 0.19
Uraltelecom 5,000 6/17/97 23,846 0.04
---------- -----
$5,563,301 10.37%
========== =====
</TABLE>
88
<PAGE>
-------
Pilgrim
Funds
--------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
NOTE 13 -- FORWARD FOREIGN CURRENCY CONTRACTS AS OF OCTOBER 31, 2000 FOR THE
PILGRIM INTERNATIONAL VALUE FUND.
Currency In Net
to Settlement Exchange Unrealized
Purchase Date For Value$ Depreciation
-------- ---- --- ------ ------------
British Pound USD
GBP 3,131,226 11/1/00 4,498,318 4,543,249 $ 44,931
GBP 1,709,917 11/2/00 2,453,560 2,481,002 27,442
GBP 3,633,747 11/2/00 5,214,064 5,272,382 58,318
Japanese Yen
JP4 2,940,951,000 11/10/00 27,313,219 26,952,765 (360,454)
Swiss Francs
CHF 4,694,527 11/1/00 2,598,688 2,611,554 12,864
CHF 6,711,447 11/2/00 3,718,562 3,733,560 14,998
----------
$ (201,901)
----------
NOTE 14 -- Foreign Taxes Withheld
For the period ended October 31, 2000, the Funds had foreign taxes withheld
which have been deducted from dividend income:
Worldwide Growth(1) $ 100,499
Global Corporate Leaders(2) 14,581
International Value(3) 5,170,145
International(2) 39,256
International Core Growth(1) --
International SmallCap Growth(1) 101,407
Emerging Markets Value(3) 49,432
Emerging Countries(1) 56,592
Worldwide Emerging Markets(2) 94,237
Global Technology(2) 4,325
Asia-Pacific Equity(1) 15,944
SmallCap Asia Growth(2) 11,503
Troika(2) 7,123
Gold(2) 31,502
Silver(2) 7,763
Global Income(2) --
----------
(1) For the period July 1, 2000 thru October 31, 2000
(2) For the period January 1, 2000 thru October 31, 2000
(3) For the year ended October 31, 2000
89
<PAGE>
-------
Pilgrim
Funds
-------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
NOTE 15 -- SUBSEQUENT EVENTS
Subsequent to October 31, 2000, the following Funds declared dividends of:
<TABLE>
<CAPTION>
Per Share
Fund Name Type Amount Payable Date Record Date
--------- ---- ------ ------------ -----------
<S> <C> <C> <C> <C>
Worldwide Growth
Class A STCG $ 0.8196 November 20, 2000 November 15, 2000
Class B STCG $ 0.9178 November 20, 2000 November 15, 2000
Class C STCG $ 0.8161 November 20, 2000 November 15, 2000
Class Q STCG $ 0.9444 November 20, 2000 November 15, 2000
Class A LTCG $ 0.2542 November 20, 2000 November 15, 2000
Class B LTCG $ 0.2846 November 20, 2000 November 15, 2000
Class C LTCG $ 0.2531 November 20, 2000 November 15, 2000
Class Q LTCG $ 0.2929 November 20, 2000 November 15, 2000
International Core Growth
Class A STCG $ 0.1544 November 20, 2000 November 15, 2000
Class B STCG $ 0.1540 November 20, 2000 November 15, 2000
Class C STCG $ 0.1546 November 20, 2000 November 15, 2000
Class Q STCG $ 0.1606 November 20, 2000 November 15, 2000
Class A LTCG $ 0.8903 November 20, 2000 November 15, 2000
Class B LTCG $ 0.8881 November 20, 2000 November 15, 2000
Class C LTCG $ 0.8915 November 20, 2000 November 15, 2000
Class Q LTCG $ 0.9529 November 20, 2000 November 15, 2000
Class A NII $ 0.4099 November 20, 2000 November 15, 2000
Class B NII $ 0.3146 November 20, 2000 November 15, 2000
Class C NII $ 0.3320 November 20, 2000 November 15, 2000
Class Q NII $ 0.4177 November 20, 2000 November 15, 2000
International SmallCap Growth
Class A STCG $ 0.9984 November 20, 2000 November 15, 2000
Class B STCG $ 1.0530 November 20, 2000 November 15, 2000
Class C STCG $ 0.9665 November 20, 2000 November 15, 2000
Class Q STCG $ 1.0572 November 20, 2000 November 15, 2000
Class A LTCG $ 1.4849 November 20, 2000 November 15, 2000
Class B LTCG $ 1.5661 November 20, 2000 November 15, 2000
Class C LTCG $ 1.4375 November 20, 2000 November 15, 2000
Class Q LTCG $ 1.5724 November 20, 2000 November 15, 2000
Class A NII $ 0.2335 November 20, 2000 November 15, 2000
Class B NII $ 0.0716 November 20, 2000 November 15, 2000
Class C NII $ 0.0916 November 20, 2000 November 15, 2000
Class Q NII $ 0.2461 November 20, 2000 November 15, 2000
Asia Pacific Equity
Class A NII $ 0.0932 November 20, 2000 November 15, 2000
Class B NII $ 0.0523 November 20, 2000 November 15, 2000
Class C NII $ 0.0854 November 20, 2000 November 15, 2000
</TABLE>
90
<PAGE>
-------
Pilgrim
Funds
-------
NOTES TO FINANCIAL STATEMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Per Share
Fund Name Type Amount Payable Date Record Date
--------- ---- ------ ------------ -----------
<S> <C> <C> <C> <C>
International Value
All Classes STCG $ 0.5311 November 20, 2000 November 15, 2000
All Classes LTCG $ 1.3496 November 20, 2000 November 15, 2000
Class A NII $ 0.1419 November 20, 2000 November 15, 2000
Class B NII $ 0.0278 November 20, 2000 November 15, 2000
Class C NII $ 0.0366 November 20, 2000 November 15, 2000
Class Q NII $ 0.1446 November 20, 2000 November 15, 2000
Emerging Markets Value
All Classes STCG $ 0.9118 November 20, 2000 November 15, 2000
All Classes LTCG $ 1.5850 November 20, 2000 November 15, 2000
Class A NII $ 0.1568 November 20, 2000 November 15, 2000
Class B NII $ 0.0935 November 20, 2000 November 15, 2000
Class C NII $ 0.0842 November 20, 2000 November 15, 2000
Global Corporate Leaders
All Classes STCG $ 0.0738 November 20, 2000 November 15, 2000
All Classes LTCG $ 0.9588 November 20, 2000 November 15, 2000
International
All Classes STCG $ 0.4583 November 20, 2000 November 15, 2000
All Classes LTCG $ 0.4764 November 20, 2000 November 15, 2000
Gold
All Classes NII $ 0.0034 November 20, 2000 November 15, 2000
Silver
All Classes NII $ 0.0262 November 20, 2000 November 15, 2000
</TABLE>
NII -- Net investment income
STCG -- Short-term capital gain
LTCG -- Long-term capital gain
On November 29, 2000, a proxy statement was filed with the Securities and
Exchange Commission ("SEC") for the reorganization of Global Corporate Leaders
into Worldwide Growth. On November 30, 2000, a proxy statement was filed with
the SEC for the reorganization of Silver into Gold. On December 1, 2000, a proxy
statement was filed with the SEC for the reorganization of Global Income into
Strategic Income. On December 4, 2000, a proxy statement was filed with the SEC
for the reorganization of Emerging Markets Value and Worldwide Emerging Markets
into Emerging Countries. On December 13, 2000 a proxy statement was filed with
the SEC for the reorganization of SmallCap Asia Growth into Asia-Pacific Equity.
On December 15, 2000 a proxy was filed with the SEC for the reorganization of
Global Technology into ING Global Information Technology Fund. Upon approval,
proxy statements will be mailed to the shareholders.
On November 3, 2000, ING Pilgrim Investments, Inc. notified HSBC Asset
Management (America) Inc. and HSBC Asset Management (Hong Kong) Limited
(collectively, HSBC) of its intention to terminate HSBC as sub-advisor to the
Asia-Pacific Equity fund effective January 1, 2001. Beginning January 2, 2001,
ING Pilgrim Investments, Inc. will advise the Fund directly.
On November 3, 2000, ING Pilgrim Investments, Inc. notified Troika Dialog Asset
Management ("Troika") of its intention to terminate Troika as sub-advisor to
the Troika Dialog Asset Management Fund effective January 1, 2001. Beginning
January 2, 2001, ING Pilgrim Investments, Inc. will advise the Fund directly.
On November 3, 2000, Insinger Asset Management (Asia), Inc. notified ING
Pilgrim Investments, Inc. of its intention to terminate its sub-advisor
relationship with SmallCap Asia Fund effective January 1, 2001. Beginning
January 2, 2001, ING Pilgrim Investment, Inc. will advise the Fund directly.
91
<PAGE>
Pilgrim
Worldwide
Growth Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS: 89.79%
BERMUDA: 0.54%
101,050 @ Tycom Ltd. ADR $3,385,175
----------
Total Bermuda 3,385,175
----------
BRAZIL: 0.48%
72,711 Tele Norte Leste Participacoes SA ADR 1,608,731
19,300 Telecomunicacoes Brasileiras SA ADR 1,413,725
----------
Total Brazil 3,022,456
----------
CANADA: 4.89%
117,450 Abitibi-Consolidated Inc. 1,027,687
67,000 Alberta Energy Co., Ltd. 2,467,267
138,800 @ Anderson Exploration Ltd. 2,544,288
18,400 @ Ballard Power Systems, Inc. 1,978,000
125,800 @ Biovail Corp. 5,291,463
145,500 Bombardier Inc. 2,281,326
28,500 @ C-Mac Industries Inc. 1,581,750
66,700 @ Celestica Inc. 4,750,874
13,500 Magna Int'l, Inc. 603,633
155,400 Nortel Networks Corp. 7,070,700
46,400 @ Precision Drilling Corp. 1,328,200
----------
Total Canada 30,925,188
----------
CHINA: 0.37%
10,700,000 PetroChina Co., Ltd. 2,250,032
5,000 PetroChina Co., Ltd. ADR 105,938
----------
Total China 2,355,970
----------
DENMARK: 0.55%
16,300 Novo-Nordisk A/S 3,457,210
----------
Total Denmark 3,457,210
----------
FINLAND: 0.40%
45,100 Elisa Communications OYJ 1,251,494
29,250 Nokia OYJ ADR 1,250,437
----------
Total Finland 2,501,931
----------
FRANCE: 5.35%
48,300 Accor SA 1,955,099
44,000 Alcatel SA 2,684,632
44,100 Aventis SA 3,180,978
8,900 Groupe Danone 1,244,659
30,700 France Telecom 3,209,610
98,300 Sanofi-Synthelabo SA 5,171,880
33,700 Schneider Electric SA 2,194,884
76,700 STMicroelectronics NV ADR 3,983,606
84,000 Societe Television Francaise 4,583,460
21,370 Total Fina Elf SA 3,057,492
67,800 @ Vivendi Environnement 2,531,545
----------
Total France 33,797,845
----------
GERMANY: 1.04%
71,500 Dresdner Bank AG 2,979,139
52,800 E.ON AG 2,682,989
21,500 Intershop Communications 930,490
----------
Total Germany 6,592,618
----------
GREECE: 0.44%
74,600 Alpha Bank SA 2,757,232
----------
Total Greece 2,757,232
----------
HONG KONG: 1.22%
330,000 Cheung Kong (Holdings) 3,649,506
325,800 @ Hutchison Whampoa 4,052,135
----------
Total Hong Kong 7,701,641
----------
IRELAND: 0.92%
237,500 Allied Irish Banks PLC 2,418,511
64,900 @ Elan Corp PLC ADR 3,370,744
----------
Total Ireland 5,789,255
----------
ISRAEL: 0.75%
80,500 Teva Pharmaceutical Industries ADR 4,759,563
----------
Total Israel 4,759,563
----------
ITALY: 1.69%
279,600 Alleanza Assicurazioni SpA 3,708,509
346,400 Edison SpA 3,262,902
284,600 Riunione Adriatica di Sicurta SpA 3,736,186
----------
Total Italy 10,707,597
----------
JAPAN: 6.37%
90,000 Daikin Industries 1,740,366
40,600 Fanuc 3,646,428
118,000 Fujitsu Ltd. 2,102,296
15,600 @ Itochu Techno Science 3,708,601
48,000 Konami Co. 4,047,106
185,000 Mitsui Fudosan 2,241,397
25,100 Murata Manufacturing Co., Ltd. 3,004,225
88,000 NEC Corp. 1,677,496
198,000 Nippon Sheet Glass 3,012,235
131 Nippon Telegraph & Telephone Corp. 1,192,164
119,000 Nomura Securities Co., Ltd. 2,524,722
89 NTT Docomo Inc. 2,194,107
104,000 Pioneer Corp. 3,221,555
398,000 Sanyo Electric Co., Ltd. 3,027,448
36,700 Sony Corp. 2,932,906
----------
Total Japan 40,273,052
----------
MEXICO: 0.14%
16,200 Telefonos de Mexico SA ADR 873,787
----------
Total Mexico 873,787
----------
NETHERLANDS: 3.10%
116,800 Koninklijke Ahold NV 3,392,758
45,200 Akzo Nobel NV 2,057,839
54,050 @ ASM Lithography Holding NV ADR 1,503,266
58,865 Konnklijke Phillips Electronics ADR 2,350,921
53,400 Numico NV 2,496,871
36,700 @ Qiagen NV 1,572,753
52,600 Royal Dutch Petroleum Co. 3,119,637
61,700 Unilever NV 3,094,396
----------
Total Netherlands 19,588,441
----------
PORTUGAL: 0.77%
548,800 Portugal Telecom 4,889,975
----------
Total Portugal 4,889,975
----------
SINGAPORE: 0.84%
97,000 Flextronics
International 3,686,000
162,000 Singapore Airlines Ltd. 1,623,413
----------
Total Singapore 5,309,413
----------
SOUTH KOREA: 0.23%
64,720 Korea Electric Power Corp. 1,445,176
----------
Total South Korea 1,445,176
----------
See Accompanying Notes to Financial Statements
92
<PAGE>
Pilgrim
Worldwide
Growth Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
SPAIN: 1.32%
183,000 Altadis SA $ 2,740,937
332,600 Banco Santander Central Hispano SA 3,223,232
145,700 Endesa SA 2,373,908
501 Telefonica SA ADR 29,027
-----------
Total Spain 8,367,104
-----------
SWEDEN: 1.34%
131,000 Telefonaktiebolaget LM Ericsson ADR 1,817,625
303,900 Nordic Baltic Holding AB 2,281,006
278,100 Svenska Handelsbanken 4,369,535
-----------
Total Sweden 8,468,166
-----------
SWITZERLAND: 1.37%
1,600 Nestle SA 3,315,531
17,200 UBS AG 2,382,510
6,100 Zurich Financial Services AG 2,952,270
-----------
Total Switzerland 8,650,311
-----------
UNITED KINGDOM: 8.66%
214,300 BAA PLC 1,781,677
421,042 BAE Systems PLC 2,391,715
66,900 Barclays PLC 1,914,191
687,800 BG Group PLC 2,754,378
643,600 Billiton PLC 2,455,975
171,300 Cable & Wireless PLC 2,423,339
949,400 Centrica PLC 3,264,749
185,000 CMG PLC 3,054,683
330,500 Diageo PLC 3,119,399
287,600 @ Energis PLC 2,459,942
268,000 HSBC Holdings 3,728,427
687,800 @ Lattice Group PLC 1,467,005
186,600 Logica PLC 5,520,534
22,800 Reuters Group PLC ADR 2,687,550
154,400 Rio Tinto PLC 2,497,896
208,100 Royal Bank of Scotland Group PLC 4,671,051
140,000 Sema Group PLC 1,767,256
398,400 Shell Transport & Trading Co. 3,205,333
13,200 @ Shire Pharmaceuticals PLC ADR 829,950
649,100 Vodafone Group PLC 2,700,644
-----------
Total United Kingdom 54,695,694
-----------
UNITED STATES: 47.01%
71,800 Adobe Systems, Inc. 5,461,288
158,000 AES Corp. 8,927,000
18,100 @ Amdocs Ltd. 1,173,106
123,300 America Online, Inc. 6,218,019
63,200 @ Applied Micro Circuits Corp. 4,826,900
74,800 @ Ariba Inc. 9,452,850
246,680 @ AT&T - Liberty Media Corp. 4,440,240
32,100 Baker Hughes, Inc. 1,105,765
55,200 Baxter Int'l, Inc. 4,536,750
57,192 @ BEA Systems Inc. 4,103,526
55,300 Bristol-Myers Squibb Co. 3,369,844
57,541 Chase Manhattan Corp. 2,618,116
107,500 @ CIENA Corp. 11,300,938
183,700 @ Cisco Systems, Inc. 9,896,838
250,066 Citigroup, Inc. 13,159,723
158,000 Comcast Corp. 6,438,500
59,400 @ Comverse Technology Inc. 6,637,950
109,899 Corning, Inc. 8,407,273
106,500 EMC Corp-Mass 9,485,156
168,000 Enron Corp. 13,786,500
62,800 @ Extreme Networks 5,208,475
68,200 @ Fannie Mae 5,251,400
160,703 Gap, Inc. 4,148,146
124,400 @ Genentech, Inc. 10,263,000
158,000 HCA -- The Healthcare Co. 6,310,125
33,600 @ Idec Pharmaceuticals Corp. 6,589,800
116,619 @ JDS Uniphase Corp. 9,489,871
45,200 Juniper Networks, Inc. 8,814,000
81,040 Merck & Co., Inc. 7,288,535
77,443 @ Microsoft Corp. 5,333,887
259,400 @ Oracle Corp. 8,560,200
129,172 Pfizer, Inc. 5,578,616
80,500 @ Qualcomm, Inc. 5,241,305
286,700 Santa Fe Int'l Corp. 10,464,550
55,456 Schering-Plough Corp. 2,866,382
78,100 Schlumberger Ltd. 5,945,362
139,200 @ Siebel Systems, Inc. 14,607,300
106,500 @ Sun Microsystems, Inc. 11,808,187
41,000 Transocean Sedco Forex, Inc. 2,173,000
76,287 UnitedHealth Group, Inc. 8,343,891
76,788 @ Veritas Software Corp. 10,828,307
180,800 @ Weatherford Int'l, Inc. 6,599,200
-----------
Total United States 297,059,821
-----------
Total Common Stocks
(Cost $519,946,830) 567,374,621
-----------
PREFERRED STOCKS: 0.84%
BRAZIL: 0.38%
382,810 Banco Bradesco SA $ 2,366,243
-----------
Total Brazil 2,366,243
-----------
GERMANY: 0.46%
14,400 SAP AG 2,902,335
-----------
Total Germany 2,902,335
-----------
Total Preferred Stocks
(Cost $6,218,446) 5,268,578
-----------
Total Long-Term
Investments (Cost
$526,165,276) 572,643,199
-----------
Principal
Amount Value
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 7.94%
COMMERCIAL PAPER: 7.94%
$25,200,000 Federal National Mortgage Association Notes,
6.430%, due 11/02/00 $ 25,195,499
25,000,000 Nestle Capital Corp. Years 1 & 2, 6.350%,
due 11/01/00 25,000,000
------------
Total Short-Term Investments
(Cost $50,195,499) 50,195,499
------------
Total Investments in Securities
(Cost $ 576,360,775)* 98.57% $622,838,698
Other Assets and Liabilities-Net 1.43% 9,052,133
------ ------------
Net Assets 100.00% $631,890,831
====== ============
----------
@ Non-income producing security
ADR -- American Depository Receipt
* Cost for federal income tax purposes is $578,375,834. Net unrealized
appreciation consists of:
Gross Unrealized Appreciation $ 72,403,674
Gross Unrealized Depreciation (27,940,810)
------------
Net Unrealized Appreciation $ 44,462,864
============
See Accompanying Notes to Financial Statements
93
<PAGE>
Pilgrim
Worldwide
Growth Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Percentage of
Industry Net Assets
-------- ----------
Aerospace/Defense 0.38%
Airlines 0.26%
Auto Parts & Equipment 0.10%
Banks 5.65%
Beverages 0.49%
Biotechnology 2.92%
Building Materials 0.75%
Chemicals 0.33%
Computers 7.88%
Diversified Financial Services 3.31%
Electric 2.53%
Electrical Components & Equipment 0.48%
Electronics 3.28%
Energy -- Alternate Sources 0.31%
Engineering & Construction 0.28%
Environmental Control 0.40%
Food 2.14%
Forest Products & Paper 0.16%
Gas 1.18%
Hand/Machine Tools 0.35%
Healthcare -- Products 0.72%
Healthcare -- Services 2.32%
Holding Companies -- Diversified 0.64%
Home Furnishings 0.97%
Insurance 1.65%
Internet 2.63%
Lodging 0.31%
Media 2.87%
Mining 0.78%
Miscellaneous Manufacturing 0.79%
Oil & Gas Producers 4.86%
Oil & Gas Services 2.16%
Pharmaceuticals 7.15%
Pipelines 2.18%
Real Estate 0.93%
Retail 0.66%
Semiconductors 1.39%
Software 7.12%
Telecommunications 16.88%
Tobacco 0.44%
Short-Term Investments 7.94%
Other Assets and Liabilities, Net 1.43%
------
NET ASSETS 100.00%
======
See Accompanying Notes to Financial Statements
94
<PAGE>
Pilgrim
Global Corporate
Leaders Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS: 89.98%
AUSTRALIA: 1.72%
27,800 @ News Corp. $ 290,796
----------
Total Australia 290,796
----------
CANADA: 1.82%
4,200 Four Seasons Hotels, Inc. 306,854
----------
Total Canada 306,854
----------
FRANCE: 4.94%
2,630 Axa 348,164
1,020 Cap Gemini 162,728
4,500 Vivendi 323,444
----------
Total France 834,336
----------
GERMANY: 5.29%
2,211 DaimlerChrysler AG 101,881
2,004 Deutsche Bank AG 164,073
1,500 @ SAP AG 302,326
6,500 Volkswagen AG 324,721
----------
Total Germany 893,001
----------
JAPAN: 11.13%
9,000 Canon, Inc. 357,146
6,000 Ito Yokado Co. 271,090
18,000 NEC Corp. 343,124
129,000 @ Nippon Steel Corp. 209,256
37 @ Nippon Telephone & Telegraph Corp. 336,718
1,600 Sony Corp. 127,865
3,000 Tokyo Electron 234,798
----------
Total Japan 1,879,997
----------
NETHERLANDS: 4.98%
4,000 @ Aegon NV 158,858
12,500 Kon Ahold NV 363,095
5,400 Royal Dutch Petroleum 320,267
----------
Total Netherlands 842,220
----------
SWEDEN: 1.58%
20,000 @ LM Ericsson 266,205
----------
Total Sweden 266,205
----------
SWITZERLAND: 7.89%
174 Nestle SA 360,564
264 @ Novartis AG 400,494
29 @ Roche Holdings AG 264,898
2,220 @ UBS AG 307,510
----------
Total Switzerland 1,333,466
----------
UNITED KINGDOM: 8.37%
41,000 @ BP Amoco 347,713
22,700 @ British Telecom 266,127
31,300 @ Diageo 295,423
19,800 @ Rio Tinto 320,326
44,500 @ Vodafone Group 185,147
----------
Total United Kingdom 1,414,736
----------
UNITED STATES: 42.26%
13,800 Alcoa Inc. 395,888
8,400 American Express Co. 504,000
5,300 American Home Products Corp. 336,550
5,437 American Int'l Group Inc. 532,826
1 @ Avaya, Inc. 9
9,800 @ Cisco Systems, Inc. 527,975
10,267 Citigroup, Inc. 540,283
5,100 Coca Cola Co. 307,912
10,700 Walt Disney Co. 383,194
4,100 Exxon Mobil Corp. 365,669
8,400 General Electric Co. 460,425
9,200 Intel Corp. 414,000
9,200 Interpublic Group Cos., Inc. 395,025
5,300 Lucent Technologies, Inc. 123,556
4,000 @ Microsoft Corp. 275,625
7,800 Morgan Stanley Dean Witter & Co. 626,438
3,700 Procter & Gamble Co. 264,319
2,100 Schlumberger, Ltd. 159,863
3,750 Unilever NV 190,547
7,400 Wal Mart Stores, Inc. 335,775
----------
Total United States 7,139,879
----------
Total Common Stocks
(Cost $11,473,931) 15,201,490
----------
Total Long Term Investments
(Cost $11,473,931) 15,201,490
----------
Principal
Amount Value
--------------------------------------------------------------------------------
SHORT TERM INVESTMENTS: 5.85%
U.S. TREASURY OBLIGATIONS: 5.85%
$1,000,000 U.S. Treasury Bills 6.120%,
due 1/11/2001 $ 987,930
-----------
Total Short-Term Investments
(Cost $987,930) 987,930
-----------
Total Investments in Securities
(Cost $ 12,461,861)* 95.83% $16,189,420
Other Assets and Liabilities-Net 4.17% 704,073
------ -----------
Net Assets 100.00% $16,893,493
====== ===========
----------
@ Non-income producing security
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
Gross Unrealized Appreciation $ 4,247,649
Gross Unrealized Depreciation (520,090)
-----------
Net Unrealized Appreciation $ 3,727,559
===========
See Accompanying Notes to Financial Statements
95
<PAGE>
Pilgrim
Global Corporate
Leaders Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Percentage of
Industry Net Assets
-------- ----------
Advertising 2.34%
Auto Manufacturers 2.53%
Banks 2.79%
Beverages 3.57%
Commercial Services 1.91%
Computers 0.96%
Cosmetics/Personal Care 1.56%
Diversified Financial Services 9.89%
Electronics 2.03%
Food 5.41%
Home Furnishings 0.76%
Insurance 6.16%
Iron/Steel 1.24%
Lodging 1.82%
Media 3.99%
Mining 4.24%
Miscellaneous Manufacturing 2.73%
Office/Business Equipment 2.11%
Oil & Gas Producers 6.12%
Oil & Gas Services 0.95%
Pharmaceuticals 5.93%
Retail 3.59%
Semiconductors 3.84%
Software 3.42%
Telecommunications 10.09%
Short-Term Investments 5.85%
Other Assets & Liabilities, Net 4.17%
------
NET ASSETS 100.00%
======
See Accompanying Notes to Financial Statements
96
<PAGE>
Pilgrim
International
Value Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
COMMON STOCK: 96.15%
BRAZIL: 8.00%
805,500 Banco Bradesco SA ADR $31,579,899
3,958,900 Centrais Eletricas Brasileiras SA ADR 35,161,762
1,224,200 Cia de Bebidas das Americas ADR 27,621,013
1,472,300 Petroleo Brasileiro SA ADR 39,044,660
532,786 Tele Norte Leste Participacoes SA ADR 11,787,890
191,000 Telecomunicacoes Brasileiras SA ADR 13,990,750
-----------
Total Brazil 159,185,974
-----------
CHINA: 1.17%
110,680,000 PetroChina Co., Ltd. 23,274,163
-----------
Total China 23,274,163
-----------
DENMARK: 2.05%
282,180 Den Danske Bank 40,865,340
-----------
Total Denmark 40,865,340
-----------
FRANCE: 5.49%
549,500 Alcatel SA 33,527,394
225,800 Eridania Beghin-Say 17,369,806
1,130,100 Michelin (C.G.D.E.) 32,702,011
179,492 Total Fina Elf SA 25,680,642
-----------
Total France 109,279,853
-----------
GERMANY: 6.93%
4,322,900 BASF AG 32,667,231
3,169,000 Bayerische Motoren Werke AG 38,016,964
1,092,300 Deutsche Telekom 41,016,483
515,200 E.ON AG 26,179,470
-----------
Total Germany 137,880,148
-----------
HONG KONG: 2.94%
17,970,586 First Pacific Co. 4,055,421
2,980,695 Jardine Matheson Holdings, Ltd. 16,542,857
6,146,000 Swire Pacific, Ltd. 37,905,193
-----------
Total Hong Kong 58,503,471
-----------
IRELAND: 2.92%
2,012,800 Allied Irish Banks PLC 20,496,754
1,133,300 Bank of Ireland 37,526,267
-----------
Total Ireland 58,023,021
-----------
ITALY: 3.80%
10,687,800 ENI-Ente Nazionale Idrocarburi SpA 57,864,501
1,529,200 Telecom Italia SpA 17,713,328
-----------
Total Italy 75,577,829
-----------
JAPAN: 15.30%
1,462,533 Bank of Tokyo-Mitsubishi, Ltd. 19,485,365
654,000 Daiichi Pharmaceutical Co., Ltd. 18,580,397
2,997,000 Daiwa House Industry Co., Ltd. 18,814,508
1,878,900 Hitachi, Ltd. 20,146,754
3,700 Japan Tobacco, Inc. 25,431,884
3,249,000 Komatsu, Ltd. 14,411,548
875,000 Matsushita Electric Industrial Co., Ltd. 25,420,428
10,636,000 Mitsubishi Heavy Industries, Ltd. 41,329,461
7,603,000 Nippon Mitsubishi Oil Corp. 40,901,444
3,099 Nippon Telegraph & Telephone Corp. 28,202,420
4,674,400 Tokio Marine & Fire Insurance Co. 51,664,084
-----------
Total Japan 304,388,293
-----------
MEXICO: 1.86%
684,060 Telefonos de Mexico SA ADR 36,896,486
-----------
Total Mexico 36,896,486
-----------
NETHERLANDS: 0.75%
328,000 Akzo Nobel N.V. 14,932,990
-----------
Total Netherlands 14,932,990
-----------
NEW ZEALAND: 0.75%
6,751,466 Telecom Corp. of New Zealand, Ltd. 14,941,184
-----------
Total New Zealand 14,941,184
-----------
PORTUGAL: 1.65%
3,684,816 Portugal Telecom SA 32,832,830
-----------
Total Portugal 32,832,830
-----------
SINGAPORE: 1.35%
2,285,191 DBS Group Holdings, Ltd. 26,933,584
-----------
Total Singapore 26,933,584
-----------
SOUTH AFRICA: 1.06%
765,000 De Beers Consolidated Mines, Ltd. 21,042,887
-----------
Total South Africa 21,042,887
-----------
SOUTH KOREA: 1.77%
1,055,000 @ Korea Electric Power Corp. ADR 12,857,813
120,000 @ Korea Telecom ADR 4,425,000
1,131,600 Pohang Iron & Steel Co. ADR 17,893,425
-----------
Total South Korea 35,176,238
-----------
SPAIN: 2.91%
2,002,000 Banco Bilbao Vizcaya Argentaria SA 12,492,480
2,096,000 Telefonica SA 39,966,633
294,000 Union Electrica Fenosa SA 5,436,355
-----------
Total Spain 57,895,468
-----------
SWITZERLAND: 5.26%
17,900 Nestle SA 37,092,512
165,700 Swisscom AG 42,079,467
52,476 Zurich Financial Services AG 25,397,379
-----------
Total Switzerland 104,569,358
-----------
UNITED KINGDOM: 29.46%
980,000 Allied Domecq PLC 5,065,626
6,809,000 BAE Systems PLC 38,678,294
1,265,000 BOC Group PLC 17,620,327
9,121,200 British American Tobacco PLC 63,922,142
3,645,100 British Telecommunications PLC 42,733,948
2,436,507 Cadbury Schweppes PLC 15,060,156
23,251,000 Corus Group PLC 20,916,332
6,159,012 Diageo PLC 58,131,370
2,945,600 HSBC Holdings PLC 40,979,305
3,478,800 Imperial Chemical Industries PLC 21,300,712
5,429,000 @ Innogy Holdings PLC 15,754,408
5,429,000 International Power PLC 21,898,625
19,303,898 Invensys PLC 46,074,765
14,994,750 Marks & Spencer PLC 41,772,713
1,633,500 Reckitt Benckiser PLC 21,473,338
1,330,000 Rolls-Royce PLC 3,454,274
2,824,809 Royal & Sun Alliance Insurance Group PLC 20,103,900
6,267,100 Safeway PLC 26,052,143
1,835,400 South African Breweries PLC 11,051,750
7,959,000 Unilever PLC 53,843,039
-----------
Total United Kingdom 585,887,167
-----------
See Accompanying Notes to Financial Statements
97
<PAGE>
Pilgrim
International
Value Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
VENEZUELA: 0.73%
759,700 Compania Anonima Nacional
Telefonos de Venezuela ADR $ 14,434,300
-------------
Total Venezuela 14,434,300
-------------
Total Common Stocks
(Cost $1,849,228,137) 1,912,520,584
-------------
Total Long Term Investments
(Cost $1,849,228,137) 1,912,520,584
-------------
Principal
Amount Value
--------------------------------------------------------------------------------
SHORT TERM INVESTMENTS: 6.29%
Repurchase Agreement: 6.29%
$125,011,000 State Street Bank & Trust Repurchase
Agreement, 6.450% due 11/01/00
(Collateralized by $19,415,000
U.S. Treasury Notes, 7.500%
Due 02/15/05, Value $19,807,851,
$52,798,000 U.S. Treasury Notes,
7.500% Due 02/15/05, Value
$53,854,950, $52,798,000 U.S.
Treasury Notes, 7.500% Due
02/15/05, Value $53,854,950) $ 125,011,000
--------------
Total Short-Term Investments
(Cost $125,011,000) 125,011,000
--------------
Total Investments in Securities
(Cost $ 1,974,239,137)* 102.44% $2,037,531,584
Other Assets and Liabilities-Net -2.44% (48,615,630)
------- --------------
Net Assets 100.00% $1,988,915,954
======= ==============
----------
@ Non-income producing security
ADR -- American Depository Receipt
* Cost for federal income tax purposes is $1,974,255,211. Net unrealized
appreciation consists of:
Gross Unrealized Appreciation $ 232,136,496
Gross Unrealized Depreciation (168,860,123)
--------------
Net Unrealized Appreciation $ 63,276,373
==============
See Accompanying Notes to Financial Statements
98
<PAGE>
Pilgrim
International
Value Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Percentage of
Industry Net Assets
-------- ----------
Aerospace/Defense 2.12%
Agriculture 0.87%
Auto Manufacturers 1.91%
Auto Parts & Equipment 1.65%
Banks 11.58%
Beverages 5.12%
Chemicals 4.35%
Electric 4.58%
Electrical Components & Equipment 1.01%
Food 6.64%
Holding Companies-Diversified 2.94%
Home Builders 0.95%
Home Furnishings 1.28%
Household Products/Wares 1.08%
Insurance 4.89%
Iron/Steel 1.95%
Machinery-Construction & Mining 0.73%
Mining 1.06%
Miscellaneous Manufacturing 5.71%
Oil & Gas Producers 9.39%
Pharmaceuticals 0.93%
Retail 2.10%
Telecommunications 18.83%
Tobacco 4.49%
Short-Term Investments 6.28%
Other Assets and Liabilities, Net -2.44%
------
NET ASSETS 100.00%
======
See Accompanying Notes to Financial Statements
99
<PAGE>
Pilgrim
International
Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS: 87.95%
AUSTRALIA: 0.58%
78,900 Foster's Brewing Group Ltd. $ 178,723
---------
Total Australia 178,723
---------
BELGIUM: 1.66%
16,700 Fortis (B) 511,595
---------
Total Belgium 511,595
---------
CANADA: 2.49%
20,000 @ Industrial-Alliance Life Insurance Co. 441,899
33,400 Placer Dome Inc. 271,375
5,600 @ Mediagrif Interactive Technologies Inc. 54,075
---------
Total Canada 767,349
---------
DENMARK: 1.96%
1,530 Novo-Nordisk A/S 324,511
5,900 Tele Danmark A/S 279,206
---------
Total Denmark 603,717
---------
FRANCE: 10.03%
5,100 Alcatel SA 311,173
3,450 Aventis SA 245,924
500 Aventis SA 36,066
2,430 Axa 321,687
2,900 France Telecom 303,189
6,100 Infogrames Entertainment 127,600
3,500 Rexel SA 243,548
6,280 Societe Generale 356,524
8,044 Total Fina Elf SA ADR 576,152
7,930 Vivendi SA 569,980
---------
Total France 3,091,843
---------
GERMANY: 3.07%
1,910 Allianz AG 649,141
3,611 Deutsche Bank AG 297,237
---------
Total Germany 946,378
---------
HONG KONG: 3.50%
27,500 Hang Seng Bank 323,519
644,000 @ I-CABLE Communications Ltd. 235,338
226,000 Mandarin Oriental 144,640
546,000 South China Morning Post 374,548
---------
Total Hong Kong 1,078,045
---------
IRELAND: 0.75%
29,500 @ Ryanair Holdings PLC 231,562
---------
Total Ireland 231,562
---------
ISRAEL: 1.05%
5,500 Teva Pharmaceutical
Industries ADR 325,359
---------
Total Israel 325,359
---------
ITALY: 0.97%
10,000 Banca Fideuram SpA 153,766
10,000 Mediolanum SpA 146,553
---------
Total Italy 300,319
---------
JAPAN: 14.83%
106,000 Bunka Shutter 205,948
17,000 Daifuku Co. Ltd. 140,220
11,000 Fujitsu Limited 195,977
3,000 Hoya Corporation 247,995
33,000 Isetan Co. Ltd. 280,356
3,700 Jafco Co. Ltd. 393,346
11,000 Matsushita Electric Industrial Co. 319,571
57 Mizuho Holding Inc. 438,281
2,500 Murata Manufacturing Co. Ltd. 299,226
22 Nippon Telegraph & Telephone Corp. 200,211
25,000 Nomura Securities Co. Ltd. 530,404
3,700 Otsuka Kagu 301,792
4,400 Sony Corporation 351,629
59,000 Sumitomo Realty & Developmnt 338,487
43,000 Toto Ltd. 326,298
---------
Total Japan 4,569,741
---------
MEXICO: 0.69%
136,800 Banacci O 212,585
---------
Total Mexico 212,585
---------
NETHERLANDS: 8.40%
14,600 ABN Amro Holding NV 338,235
11,100 Koninklijke Ahold NV 322,428
10,515 Koninklijke Philips Electronics NV 413,225
5,000 Royal Dutch Petroleum Co. 296,543
13,500 Unilever NV 677,056
8,400 Unique Int'l NV 171,078
20,500 @ United Pan-Europe Communications NV ADR 369,000
---------
Total Netherlands 2,587,565
---------
NEW ZEALAND: 0.97%
417,000 Fletcher Challenge Building 297,688
---------
Total New Zealand 297,688
---------
NORWAY: 0.79%
17,700 Petroleum Geo-Services A/S 244,164
---------
Total Norway 244,164
---------
PORTUGAL: 2.39%
100,005 Portugal Telecom 465,118
212,222 Electricidade de Portugal SA 271,566
---------
Total Portugal 736,684
---------
SWEDEN: 3.39%
212,222 Swedish Match AB 728,482
23,800 Telefonaktiebolaget LM Ericsson 316,784
---------
Total Sweden 1,045,266
---------
SWITZERLAND: 9.71%
2,460 Charles Voegele Holding AG 462,550
179 Nestle SA 370,925
396 Novartis 600,741
64 Roche Holding AG 584,602
243 Swiss Re 479,214
1,430 UBS AG 198,081
610 Zurich Financial Services AG 295,227
---------
Total Switzerland 2,991,340
---------
TAIWAN: 0.77%
10,500 @ Taiwan Semiconductor Manufacturing Co. Ltd. ADR 238,219
---------
Total Taiwan 238,219
---------
See Accompanying Notes to Financial Statements
100
<PAGE>
Pilgrim
International
Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
UNITED KINGDOM: 18.53%
17,700 Barclays PLC $ 506,445
27,700 British Telecommunications PLC 324,747
46,100 Cadbury Schweppes PLC 284,946
20,400 Capita Group PLC 155,397
286,100 Corus Group PLC 257,372
56,500 Diageo PLC 533,271
26,200 Enterprise Oil PLC 207,181
96,300 FKI PLC 249,062
21,600 Glaxo Wellcome PLC 621,794
27,600 Pizzaexpress PLC 264,505
33,100 Provident Financial PLC 422,152
28,200 Reckitt Benckiser PLC 370,706
38,800 Reed Int'l PLC 358,611
15,560 Rio Tinto PLC 251,731
26,500 Scottish & Newcastle PLC 181,485
108,526 Vodafone Group PLC 451,533
36,500 Whitbread PLC 268,770
----------
Total United Kingdom 5,709,708
----------
UNITED STATES: 1.42%
1,400 @ Mercury Interactive Corp. 155,356
3,700 Schlumberger Ltd. 281,663
----------
Total United States 437,019
----------
Total Common Stocks (Cost $28,060,384) 27,104,869
----------
PREFERRED STOCKS: 1.44%
GERMANY: 1.44%
8,030 Rhoen Klinikum AG 442,581
----------
Total Germany 442,581
----------
Total Preferred Stock (Cost $305,872) 442,581
----------
Long Term Investments (Cost $28,366,256) 27,547,450
----------
Principal
Amount Value
--------------------------------------------------------------------------------
SHORT TERM INVESTMENTS: 9.61%
U.S. TREASURY OBLIGATIONS: 9.61%
$3,000,000 U.S. Treasury Bills 6.120%,
due 01/11/01 $ 2,963,790
-----------
Total Short-Term Investments
(Cost $2,963,790) 2,963,790
-----------
Total Investments in Securities
(Cost $31,330,046) 99.00% $30,511,240
Other Assets and Liabilities-Net 1.00% 306,834
------ -----------
Net Assets 100.00% $30,818,074
====== ===========
----------
@ Non-income producing security
ADR -- American Depository Receipt
* Cost for federal income tax purposes is $31,418,935. Net unrealized
depreciation consists of:
Gross Unrealized Appreciation $1,783,446
Gross Unrealized Depreciation (2,691,140)
----------
Net Unrealized Depreciation $ (907,694)
==========
See Accompanying Notes to Financial Statements
101
<PAGE>
Pilgrim
International
Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Percentage of
Industry Net Assets
-------- ----------
Airlines 0.75%
Banks 7.98%
Beverages 2.90%
Building Materials 1.63%
Commercial Services 2.91%
Computers 0.64%
Diversified Financial Services 5.94%
Electric 0.88%
Electronics 3.10%
Food 5.37%
Healthcare-Services 2.24%
Home Furnishings 2.18%
Household Products/Wares 1.20%
Housewares 1.06%
Insurance 7.57%
Internet 0.18%
Iron/Steel 0.84%
Lodging 0.47%
Machinery-Diversified 0.45%
Media 3.14%
Mining 1.70%
Miscellaneous Manufacturer 0.81%
Oil & Gas Producers 3.50%
Oil & Gas Services 1.71%
Pharmaceuticals 8.89%
Real Estate 1.10%
Retail 5.12%
Semiconductors 0.77%
Software 0.92%
Telecommunications 9.80%
Tobacco 2.36%
Venture Capital 1.28%
Short-Term Investments 9.61%
Other Assets and Liabilities, Net 1.00%
------
NET ASSETS 100.00%
======
See Accompanying Notes to Financial Statements
102
<PAGE>
Pilgrim
International
Core Growth
Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS: 86.13%
BRAZIL: 0.51%
18,868 Tele Norte Leste Participacoes SA ADR $ 417,455
----------
Total Brazil 417,455
----------
CANADA: 7.99%
60,100 Abitibi-Consolidated, Inc. 525,875
17,500 Alberta Energy Co., Ltd. 644,435
39,000 @ Anderson Exploration, Ltd. 714,894
5,000 @ Ballard Power Systems, Inc. 537,500
27,000 @ Biovail Corp. 1,135,687
37,500 Bombardier, Inc. 587,971
14,600 @ Celestica, Inc. 1,039,921
3,600 Magna Int'l, Inc. 160,969
19,300 Nortel Networks Corp. 878,150
11,900 @ Precision Drilling Corp. 340,638
----------
Total Canada 6,566,040
----------
CHINA: 0.71%
2,770,000 PetroChina Co., Ltd. 582,485
----------
Total China 582,485
----------
DENMARK: 1.06%
4,100 Novo-Nordisk A/S 869,605
----------
Total Denmark 869,605
----------
FINLAND: 1.16%
11,339 Elisa Communications OYJ 314,659
15,000 Nokia OYJ ADR 641,250
----------
Total Finland 955,909
----------
FRANCE: 10.20%
13,000 Accor SA 526,217
11,100 Alcatel SA 677,259
8,600 Aventis SA 620,327
7,900 France Telecom 825,926
2,400 Groupe Danone 335,638
24,800 Sanofi-Synthelabo SA 1,304,808
8,900 Schneider Electric SA 579,658
20,000 Societe Television Francaise 1,091,300
19,600 ST Microelectronics NV 1,017,975
5,374 Total Fina Elf SA 768,880
17,000 @ Vivendi Environnement 634,753
----------
Total France 8,382,741
----------
GERMANY: 2.03%
18,400 Dresdner Bank AG 766,660
13,000 E.ON AG 660,584
5,500 @ Intershop Communications AG 238,032
----------
Total Germany 1,665,276
----------
GREECE: 0.90%
20,100 Alpha Bank SA 742,900
----------
Total Greece 742,900
----------
HONG KONG: 2.77%
109,000 Cheung Kong (Holdings) 1,205,443
85,800 Hutchison Whampoa 1,067,137
----------
Total Hong Kong 2,272,580
----------
IRELAND: 1.80%
60,500 Allied Irish Banks PLC 616,084
16,600 @ Elan Corp PLC ADR 862,162
----------
Total Ireland 1,478,246
----------
ISRAEL: 1.43%
19,900 Teva Pharmaceutical Industries ADR 1,176,588
----------
Total Israel 1,176,588
----------
ITALY: 3.39%
75,000 Alleanza Assicurazioni SPA 994,772
88,100 Edison SPA 829,855
72,900 Riunione Adriatica di Sicurta SPA 957,020
----------
Total Italy 2,781,647
----------
JAPAN: 13.39%
29,000 Daikin Industries 560,784
10,700 Fanuc 961,004
32,000 Fujitsu, Ltd. 570,114
2,800 Hoya Corp. 231,462
4,000 Itochu Techno-Science Corp. 950,923
12,000 Konami Corp. 1,011,777
48,000 Mitsui Fudosan 581,552
6,000 Murata Manufacturing Co., Ltd. 718,141
34,000 NEC Corp. 648,123
51,000 Nippon Sheet Glass 775,879
34 Nippon Telegraph & Telephone Corp. 309,417
31,000 Nomura Securities Co., Ltd. 657,701
23 NTT Docomo, Inc. 567,016
28,000 Pioneer Corp. 867,342
82,000 Sanyo Electric Co., Ltd. 623,746
2,700 Sony Corp. ADR 224,100
9,300 Sony Corp. 743,216
----------
Total Japan 11,002,297
----------
MEXICO: 0.28%
4,200 Telefonos de Mexico SA ADR 226,538
----------
Total Mexico 226,538
----------
NETHERLANDS: 6.65%
11,800 Akzo Nobel NV 537,223
29,400 @ ASM Lithography Holding NV 817,688
29,700 Koninklijke Ahold NV 862,713
14,740 Koninklijke Philips Electronics NV 588,679
14,100 Numico NV 659,286
9,400 @ Qiagen NV 402,831
13,400 Royal Dutch Petroleum Co. 794,736
15,900 Unilever NV 797,421
----------
Total Netherlands 5,460,577
----------
PORTUGAL: 1.44%
132,700 Portugal Telecom 1,182,397
----------
Total Portugal 1,182,397
----------
SINGAPORE: 1.64%
24,400 @ Flextronics Int'l, Ltd. 927,200
42,000 Singapore Airlines, Ltd. 420,885
----------
Total Singapore 1,348,085
----------
SOUTH KOREA: 0.48%
17,720 Korea Electric Power Corp. 395,682
----------
Total South Korea 395,682
----------
SPAIN: 2.63%
46,900 Altadis SA 702,458
86,300 Banco Santander Central Hispano SA 836,335
38,300 Endesa SA 624,027
----------
Total Spain 2,162,820
----------
SWEDEN: 3.03%
83,700 Nordic Baltic Holding AB 628,234
58,300 Svenska Handelsbanken 916,015
68,100 Telefonaktiebolaget LM Ericsson ADR 944,888
----------
Total Sweden 2,489,137
----------
See Accompanying Notes to Financial Statements
103
<PAGE>
Pilgrim
International
Core Growth
Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
SWITZERLAND: 3.15%
400 Nestle SA $ 828,883
300 Swatch Group AG 397,196
4,400 UBS AG 609,479
1,560 Zurich Financial Services AG 755,007
----------
Total Switzerland 2,590,565
----------
UNITED KINGDOM: 16.81%
56,500 BAA PLC 469,738
107,798 BAE Systems PLC 612,343
18,200 Barclays PLC 520,751
147,200 BG Group PLC 589,480
163,900 Billiton PLC 625,442
34,200 Cable & Wireless PLC 483,819
270,800 Centrica PLC 931,213
48,600 CMG PLC 802,474
84,900 Diageo PLC 801,322
67,000 @ Energis PLC 573,074
70,800 HSBC Holdings PLC 984,972
147,200 @ Lattice Group PLC 313,962
47,900 Logica PLC 1,417,115
5,800 Reuters Group PLC ADR 683,675
39,300 Rio Tinto PLC 635,799
54,100 Royal Bank of Scotland Group PLC 1,214,339
35,000 Sema Group PLC 441,814
100,900 Shell Transport & Trading Co. 811,792
3,300 @ Shire Pharmaceuticals PLC ADR 207,488
166,200 Vodafone Group PLC 691,491
----------
Total United Kingdom 13,812,103
----------
UNITED STATES: 2.68%
9,300 @ Amdocs, Ltd. 602,756
4,700 @ Comverse Technology, Inc. 525,225
14,100 Santa Fe Int'l Corp. 514,650
10,500 Transocean Sedco Forex, Inc. 556,500
----------
Total United States 2,199,131
----------
Total Common Stocks (Cost $68,171,413) 70,760,804
----------
Shares Value
--------------------------------------------------------------------------------
PREFERRED STOCKS: 1.66%
BRAZIL: 0.75%
99,190 Banco Bradesco SA $ 613,117
-----------
Total Brazil 613,117
-----------
GERMANY: 0.91%
3,700 SAP AG 745,739
-----------
Total Germany 745,739
-----------
Total Preferred Stocks (Cost $1,606,802) 1,358,856
-----------
Total Long-Term Investments (Cost $69,778,215) 72,119,660
-----------
Principal Amount Value
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 3.65%
COMMERCIAL PAPER: 3.65%
$ 3,000,000 Nestle Capital Corp., 6.350% due 11/01/00 $ 3,000,000
-----------
Total Short-Term Investments (Cost $3,000,000) 3,000,000
-----------
Total Investments in Securities
(Cost $72,778,215) 91.44% $75,119,660
Other Assets and Liabilities-Net 8.56% 7,032,954
------ -----------
Net Assets 100.00% $82,152,614
====== ===========
@ Non-income producing security
ADR -- American Depository Receipt
Cost for federal income tax purposes is $73,497,023. Net unrealized appreciation
consists of:
Gross Unrealized Appreciation $ 6,203,935
Gross Unrealized Depreciation (4,581,298)
-----------
Net Unrealized Appreciation $ 1,622,637
============
See Accompanying Notes to Financial Statements
104
<PAGE>
Pilgrim
International
Core Growth
Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Percentage of
Industry Net Assets
-------- ----------
Financials 17.85%
Information Technology 15.66%
Industrials 9.37%
Health Care 8.29%
Telecommunication Services 7.88%
Consumer Discretionary 7.19%
Energy 6.97%
Consumer Staples 6.07%
Utilities 5.68%
Materials 2.83%
Short-Term Investments 3.65%
Other Assets and Liabilities, Net 8.56%
------
NET ASSETS 100.00%
======
See Accompanying Notes to Financial Statements
105
<PAGE>
Pilgrim
International
SmallCap Growth
Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS: 88.53%
AUSTRIA: 0.36%
90,800 Austria Technologie & Systemtecknik AG $ 2,535,041
-----------
Total Austria 2,535,041
-----------
CANADA: 8.28%
473,200 @ Anderson Exploration, Ltd. 8,674,043
110,000 @ ATS Automation Tooling Systems 1,951,555
152,100 @ Canadian Hunter Exploration, Ltd. 3,186,383
203,700 @ Certicom Corp. 6,734,435
46,700 @ C-Mac Industries, Inc. 2,591,850
256,800 @ Cognos, Inc. 10,657,200
77,500 @ Descartes Systems Group, Inc. 3,138,750
88,000 @ Descartes Systems Group, Inc. 3,566,088
409,700 Petro-Canada, Ltd. 8,582,913
82,200 @ Pivotal Corp. 4,950,835
95,100 @ RIO Alto Exploration, Ltd. 1,612,498
294,900 @ Tesco Corp. 2,442,216
-----------
Total Canada 58,088,766
-----------
DENMARK: 5.05%
441,500 GN Store Nord 8,558,641
96,100 ISS A/S 5,917,555
112,300 NEG Micon A/S 5,826,615
279,600 Vestas Wind Systems AS 15,144,535
-----------
Total Denmark 35,447,346
-----------
FINLAND: 1.23%
394,700 @ F-Secure OYJ 2,244,115
156,500 Sampo Insurance Co., Ltd. 6,374,686
-----------
Total Finland 8,618,801
-----------
FRANCE: 6.09%
265,500 Air France 4,731,371
44,100 Altran Technologies SA 9,015,267
57,000 @ Business Objects SA ADR 4,491,422
53,500 Coflexip Stena Offshore 6,197,116
32,427 Galeries Lafayette 5,231,089
128,800 Pechiney SA 4,809,188
30,800 Rexel SA 2,143,225
71,808 Rhodia SA 886,335
59,200 @ Wavecom SA ADR 5,150,400
-----------
Total France 42,655,413
-----------
GERMANY: 9.04%
80,100 @ ADVA AG Optical Networking $ 5,879,655
88,600 @ Aixtron 11,879,387
50,900 Altana AG 6,130,058
44,400 @ D Logistics AG 3,127,262
56,700 Depfa Deutsche Pfandbriefbank AG 4,185,580
76,800 @ Direkt Anlage Bank AG 3,388,970
59,700 Merck KGAA 2,269,633
70,000 @ Schneider Technologies AG 3,498,780
374,000 @ Senator Entertainment AG 6,077,761
88,200 SGL Carbon 5,389,700
32,300 Singulus Technologies 1,301,965
101,800 @ Suess Microtec 2,863,746
60,000 Tecis Holding AG 4,338,045
59,000 @ Telesens AG 3,104,180
-----------
Total Germany 63,434,722
-----------
HONG KONG: 1.93%
4,534,000 China Resources Enterprise 5,145,006
5,428,000 Cosco Pacific, Ltd. 4,001,923
3,719,000 New World Development 4,410,918
-----------
Total Hong Kong 13,557,847
-----------
IRELAND: 0.03%
65,500 @ Parthus Technologies 224,288
-----------
Total Ireland 224,288
-----------
ITALY: 4.84%
422,900 Arnoldo Mondadori Editore SPA 4,952,449
716,500 Autogrill SPA 7,910,368
515,500 Class Editori SPA 7,261,728
4,911,500 Parmalat Finanziaria SPA 7,085,431
1,302,700 Saipem SPA 6,787,596
-----------
Total Italy 33,997,572
-----------
JAPAN: 16.65%
1,158,000 @ All Nippon Airways $ 3,618,916
496,000 Alps Electric Co. 9,818,632
1,102,000 Citizen Watch Co., Ltd. 10,816,497
171,000 Credit Saison 3,620,126
328,000 Daiichi Pharmaceutical Co., Ltd. 9,318,609
937,000 Fujikura, Ltd. 8,260,954
496,000 Hitachi Cable, Ltd. 5,845,722
937,000 Komatsu, Ltd. 4,156,239
198,400 Meitec Corp. 8,327,655
827,000 NGK Insulators 10,951,886
386,000 Nippon Electric Glass Co., Ltd. 8,985,382
46,000 Nippon System Development 4,987,215
165,400 Nitto Denko Corp. 5,593,420
13,600 OBIC Business Consultants 1,358,567
1,158,000 OKI Electric Industry Co. 6,887,614
110,000 Ono Pharmaceutical Co., Ltd. 4,385,282
1,323,000 Sumitomo Osaka Cement Co. 5,638,042
243,000 Ushio, Inc. 4,231,316
-----------
Total Japan 116,802,074
-----------
LUXEMBOURG: 1.13%
51,200 @ Thiel Logistik AG 7,907,597
-----------
Total Luxembourg 7,907,597
-----------
MEXICO: 0.24%
370,922 @ Corporation Interamericana de Entretenimiento SA 1,675,695
-----------
Total Mexico 1,675,695
-----------
NETHERLANDS: 0.72%
85,500 Fugro NV 5,038,968
-----------
Total Netherlands 5,038,968
-----------
NORWAY: 4.90%
361,100 @ Frontline, Ltd. 5,954,122
320,400 Schibsted ASA 4,868,671
700,000 Storebrand 4,903,545
372,800 @ TGS Nopec Geophysical Co. ASA 4,740,856
346,700 Tomra Systems ASA 13,936,750
-----------
Total Norway 34,403,944
-----------
See Accompanying Notes to Financial Statements
106
<PAGE>
Pilgrim
International
SmallCap Growth
Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
SINGAPORE: 1.61%
772,000 Overseas Union Bank $ 3,736,264
780,000 Venture MFG (Singapore), Ltd. 7,549,963
-----------
Total Singapore 11,286,227
-----------
SOUTH KOREA: 1.10%
59,000 Hankuk Electric Glass 3,734,505
102,140 Samsung SDI Co., Ltd. 3,977,848
-----------
Total South Korea 7,712,353
-----------
SPAIN: 3.05%
158,700 Acciona SA 5,003,097
338,900 Centros Comerciales Carrefour SA 4,293,729
556,100 Grupo Dragados SA 5,403,331
323,200 Indra Sistemas SA 3,252,814
374,700 SOL Melia SA 3,427,723
-----------
Total Spain 21,380,694
-----------
SWEDEN: 2.99%
875,400 Enea Data AB 4,248,962
381,800 HIQ Int'l AB 3,094,963
147,500 JM AB 3,365,591
107,300 @ PerBio Science AB 1,089,934
162,100 @ Pyrosequencing AB 2,011,589
37,600 Svenska Cellulosa AB 774,190
1,081,900 Swedish Match AB 3,713,777
402,000 @ Telelogic AB 2,655,245
-----------
Total Sweden 20,954,251
-----------
SWITZERLAND: 9.42%
1,500 Ascom Holding AG 5,077,603
37,300 Gretag Imaging Group 6,702,214
5,690 @ Kudelski SA 7,660,102
24,280 @ Logitech Int'l SA 7,428,794
6,600 SEZ Holding AG 3,836,782
4,600 Straumann Holding AG 9,941,589
12,900 Swisslog Holding AG 7,104,473
11,020 Synthes-Stratec, Inc. 7,019,304
5,500 Tecan Group AG 5,905,096
22,700 Unaxis Holding AG 5,461,588
-----------
Total Switzerland 66,137,545
-----------
UNITED KINGDOM: 9.50%
75,600 @ Autonomy Corp. PLC $ 2,661,120
455,000 @ Baltimore Technologies PLC 3,502,265
275,300 @ Celltech Group PLC 5,472,414
1,073,800 Cookson Group PLC 2,921,305
935,900 @ Eidos PLC 3,798,847
1,216,900 Enterprise Oil PLC 9,622,847
271,000 @ Future Network PLC (The) 1,749,772
900,000 International Power PLC 3,630,275
44,582 Johnson Matthey PLC 696,265
581,100 Matalan PLC 5,480,453
495,400 @ Pharmagene PLC 1,890,445
90,940 Psion PLC 550,229
1,043,800 @ Regus PLC 4,743,416
2,132,400 Safeway PLC 8,864,322
1,193,600 Spirent PLC 11,066,540
-----------
Total United Kingdom 66,650,515
-----------
UNITED STATES: 0.40%
104,000 @ OpenTV Corp. 2,795,000
-----------
Total United States 2,795,000
-----------
Total Common Stocks (Cost $596,448,900) 621,304,659
-----------
PREFERRED STOCKS: 3.61%
GERMANY: 3.61%
137,100 Henkel KGAA 8,296,427
45,500 MLP AG 6,158,505
1,400 Porsche AG 4,716,520
195,600 Prosieben SAT.1
Media AG 6,158,089
-----------
Total Germany 25,329,541
-----------
Total Preferred
Stocks (Cost
$ 22,149,554) 25,329,541
-----------
Total Long-Term
Investments (Cost
$618,598,454) 646,634,200
-----------
Principal Amount Value
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 5.64%
Repurchase Agreements: 5.64%
$39,589,000 State Street Repurchase Agreement,
6.450% due 11/10/00 (collateralized
by $30,355,000 U.S. Treasury Notes,
8.75% due 05/15/17, value
$40,382,471) $ 39,589,000
------------
Total Short-Term Investments
(Cost $39,589,000) 39,589,000
------------
Total Investments in Securities
(Cost $658,187,454) 97.78% $686,223,200
Other Assets and Liabilities-Net 2.22% 15,579,388
------ ------------
Net Assets 100.00% $701,802,588
====== ============
@ Non-income producing security
ADR American Depository Receipt
* Cost for federal, Income tax purposes is $667,459,528. Net unrealized
appreciation consists of:
Gross Unrealized Appreciation $ 76,712,881
Gross Unrealized Depreciation (57,949,209)
------------
Net Unrealized Appreciation $ 18,763,672
============
See Accompanying Notes to Financial Statements
107
<PAGE>
Pilgrim
International
Small Cap
Growth Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Percentage of
Industry Net Assets
-------- ----------
Airlines 1.19%
Auto Manufacturers 0.67%
Banks 1.13%
Biotechnology 0.71%
Building Materials 0.80%
Chemicals 1.69%
Commercial Services 1.41%
Computers 5.61%
Diversified Financial Services 2.50%
Electric 0.52%
Electrical Components & Equipment 5.60%
Electronics 7.57%
Engineering & Construction 4.59%
Entertainment 0.24%
Environmental Control 1.99%
Food 2.27%
Forest Products & Paper 0.11%
Healthcare-Products 3.26%
Holding Companies-Diversified 0.73%
Home Furnishings 0.50%
Household Products/Wares 1.18%
Housewares 0.53%
Insurance 1.61%
Lodging 0.49%
Machinery-Construction & Mining 0.59%
Machinery-Diversified 1.48%
Media 4.43%
Metal Fabricate/Hardware 0.69%
Miscellaneous Manufacturing 1.37%
Oil & Gas Producers 4.51%
Oil & Gas Services 2.87%
Pharmaceuticals 3.93%
Real Estate 0.68%
Retail 4.81%
Semiconductors 2.91%
Software 7.99%
Telecommunications 7.16%
Tobacco 0.53%
Transportation 1.29%
Short-Term Investments 5.64%
Other Assets and Liabilities, Net 2.22%
------
NET ASSETS 100.00%
======
See Accompanying Notes to Financial Statements
108
<PAGE>
Pilgrim
Emerging
Markets Value
Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS: 98.49%
ARGENTINA: 6.63%
183,370 @ Grupo Financiero Galicia SA $ 273,279
40,500 Massalin Particulares 315,966
16,330 Telecom Argentina SA ADR 280,672
---------
Total Argentina 869,917
---------
BRAZIL: 22.85%
37,490 @ Centrail Geradoras Sul Do Brasil ADR 289,756
1,880 Brasil Telecom Participacoes SA ADR 101,872
17,790 Cemig ADR 270,148
6,500 Centrais Eletric DE STA CAT ADR 224,795
33,900 Centrais Eletricas Brasileiras SA ADR 301,090
16,600 CIA de Bebidas das Americas ADR 374,537
41,370 CIA Paranaense de Energia ADR 374,916
10,300 Copene-Petroquimica do Nordeste SA ADR 199,156
11,230 Petroleo Brasileiro SA ADR 297,814
3,239 Tele Norte Leste Participacoes SA ADR 71,663
12,110 Unibanco - Uniao de Bancos Brasileiros GDR 305,778
36,300 Usinas Sider de Minas Gerais-Old ADR 186,408
---------
Total Brazil 2,997,933
---------
CHILE: 6.03%
10,900 A.F.P. Provida SA ADR 231,625
13,400 Banco Santiago ADR 264,650
35,200 Quinenco SA ADR 294,800
---------
Total Chile 791,075
---------
CHINA: 10.28%
1,407,000 Beijing Datang Power Generation Co., Ltd. $ 335,558
25,630 Beijing Yanhua Petrochemical ADR 131,354
1,426,000 Beijing Yanhua Petrochemical 140,790
472,000 Guangdong Kelon Electric 88,360
368,100 Huaneng Power Int'l, Inc. 143,955
1,508,000 PetroChina Co., Ltd. 317,107
25,110 Shandong Huaneng Power ADR 190,836
---------
Total China 1,347,960
---------
COLOMBIA: 0.60%
34,700 Banco Ganadero ADR 78,075
---------
Total Colombia 78,075
---------
ESTONIA: 0.98%
8,400 @ Eesti Telekom GDR 128,520
---------
Total Estonia 128,520
---------
GREECE: 2.46%
14,100 Hellenic Telecommunications Organization SA ADR 123,375
11,400 Hellenic TLCM 199,135
---------
Total Greece 322,510
---------
HONG KONG: 5.07%
45,900 Dairy Farm Int'l Holdings ADR 94,095
108,900 @ Dairy Farm Int'l Holdings 44,649
400,680 First Pacific Co. 90,421
31,938 Jardine Matheson Holdings, Ltd. 177,256
262,000 Shangri-La Asia, Ltd. 258,674
---------
Total Hong Kong 665,095
---------
HUNGARY: 0.50%
4,300 Mol Magyar Olaj- es Gazipari Rt. GDR 65,145
---------
Total Hungary 65,145
---------
INDIA: 1.15%
20,500 Videsh Sanchar Nigam, Ltd. ADR 151,188
---------
Total India 151,188
---------
INDONESIA: 0.96%
18,000 Indosat (Persero) TBK ADR 127,125
---------
Total Indonesia 127,125
---------
ISRAEL: 5.43%
140,700 Bank Leumi Le $ 276,369
8,640 ECI Telecom, Ltd. 204,120
15,610 Koor Industries, Ltd. ADR 232,199
---------
Total Israel 712,688
---------
LUXEMBOURG: 1.94%
30,860 Quilmes Industrial SA ADR 254,595
---------
Total Luxembourg 254,595
---------
MEXICO: 8.13%
14,470 @ Grupo Financiero Inbursa SA ADR 269,889
24,050 Panamerican Beverages, Inc. 396,825
7,400 Telefonos de Mexico SA ADR 399,137
---------
Total Mexico 1,065,851
---------
PANAMA: 2.45%
12,800 Banco Latinoamericano de Exportaciones 320,800
---------
Total Panama 320,800
---------
PHILIPPINES: 1.71%
10,000 Philippine Long Distance Telephone ADR 155,000
3,993,595 RFM Corp. 69,488
---------
Total Philippines 224,488
---------
POLAND: 0.65%
22,000 Polski Koncern Naftowy Orlen 84,278
---------
Total Poland 84,278
---------
RUSSIA: 2.43%
2,900 Lukoil-Holding ADR 154,860
20,360 OAO Gazprom ADR 163,898
---------
Total Russia 318,758
---------
SINGAPORE: 2.51%
27,916 DBS Group Holdings, Ltd. 329,022
---------
Total Singapore 329,022
---------
SOUTH AFRICA: 6.03%
15,400 De Beers Consolidated Mines, Ltd. 423,609
96,800 Iscor, Ltd. 153,616
28,000 Sasol, Ltd. 214,396
---------
Total South Africa 791,621
---------
See Accompanying Notes to Financial Statements
109
<PAGE>
Pilgrim
Emerging
Markets Value
Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
SOUTH KOREA: 5.10%
29,530 Korea Electric Power Corp. ADR $ 359,897
8,400 Korea Telecom ADR 309,750
----------
Total South Korea 669,647
----------
UNITED KINGDOM: 2.91%
63,300 South African Breweries PLC 381,157
----------
Total United Kingdom 381,157
----------
VENEZUELA: 1.69%
11,680 Compania Anonima Nacional Telefonos
de Venezuela ADR 221,920
----------
Total Venezuela 221,920
----------
Total Common Stocks (Cost $13,862,207) 12,919,368
----------
Total Long Term Investments (Cost $13,862,207) 12,919,368
----------
Principal Amount Value
--------------------------------------------------------------------------------
SHORT TERM INVESTMENTS: 0.88%
REPURCHASE AGREEMENT: 0.88%
$ 116,000 State Street Bank & Trust
Repurchase Agreement, 6.45% due
11/01/00 (Collateralized by
$125,000 U.S. Treasury Notes,
4.750% Due 11/15/08, Market Value
$119,375) $ 116,000
-----------
Total Short-Term Investments
(Cost $116,000) 116,000
-----------
Total Investments in Securities
(Cost $13,978,207)* 99.37% $13,035,368
Other Assets and
Liabilities-Net 0.63% 82,322
------ -----------
Net Assets 100.00% $13,117,690
====== ===========
@ Non-income producing security
ADR -- American Depository Receipt
GDR -- Global Depository Receipt
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized depreciation consists of:
Gross Unrealized Appreciation $ 2,119,364
Gross Unrealized Depreciation (3,062,203)
-----------
Net Unrealized Depreciation $ (942,839)
===========
See Accompanying Notes to Financial Statements
110
<PAGE>
Pilgrim
Emerging
Markets Value
Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Percentage of
Industry Net Assets
-------- ----------
Banks 12.00%
Beverages 10.73%
Chemicals 3.59%
Diversified Finan Services 5.91%
Electric 18.99%
Food 1.59%
Gas 1.25%
Holding Companies-Diversified 4.29%
Home Furnishings 0.67%
Investment Companies 1.77%
Iron/Steel 2.59%
Lodging 1.97%
Mining 3.23%
Miscellaneous Manufacturing 0.64%
Oil & Gas Producers 8.00%
Telecommunications 18.86%
Tobacco 2.41%
Short-Term Investments 0.88%
Other Assets and Liabilities, Net 0.63%
------
NET ASSETS 100.00%
======
See Accompanying Notes to Financial Statements
111
<PAGE>
Pilgrim
Emerging
Countries Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS: 90.89%
ARGENTINA: 0.43%
57,500 @ Grupo Financiero Galicia SA ADR $ 837,344
----------
Total Argentina 837,344
----------
BELGIUM: 1.02%
64,700 Fortis (B) 1,982,050
----------
Total Belgium 1,982,050
----------
BRAZIL: 11.00%
28,000 Brasil Telecom Participacoes SA ADR 1,517,250
51,200 Companhia Brasileira de Distribuicao Grupo
Pao de Acucar ADR 1,824,000
49,000 Cia de Bebidas das Americas ADR 1,105,563
193,700 Cia Paranaense de Energia ADR 1,755,406
65,000 Centrais Eletricas Brasileiras SA 1,154,269
33,030 Empresa Bras de Aeronautica ADR 955,806
101,100 Embratel Participacoes SA ADR 1,636,556
139,510 @ Petroleo Brasileiro SA ADR 4,054,509
29,200 Tele Celular Sul Participacoes SA ADR 735,475
131,909 Tele Norte Leste Participacoes SA ADR 2,918,487
50,700 @ Telesp Celular Participacoes SA ADR 1,603,387
50,175 Unibanco -- Uniao de Bancos Brasileiros GDR 1,266,919
44,900 Votorantim Celulose e Papel SA ADR 774,525
----------
Total Brazil 21,302,152
----------
CHILE: 0.65%
82,200 Compania Telecomunicaciones de Chile SA ADR 1,253,550
----------
Total Chile 1,253,550
----------
CHINA: 2.47%
4,200,000 Beijing Capital Int'l Airport $ 963,970
13,220,000 @ China Petroleum & Chemical Corp 2,593,486
7,600,000 Zhejiang Expressway Co. 1,227,850
----------
Total China 4,785,306
----------
CZECH REPUBLIC: 0.71%
36,480 @ Ceske Radiokomunikace GDR 1,368,000
----------
Total Czech Republic 1,368,000
----------
EGYPT: 0.20%
20,000 @ Mobinil-Egyptian Mobile Netork 395,666
----------
Total Egypt 395,666
----------
FRANCE: 1.95%
30,500 Alcatel SA 1,860,938
13,300 Total Fina Elf SA 1,902,885
----------
Total France 3,763,823
----------
GERMANY: 2.08%
6,100 Allianz AG 2,068,256
24,000 Deutsche Bank AG 1,964,951
----------
Total Germany 4,033,207
----------
GREECE: 2.87%
75,900 Alpha Bank SA 2,805,280
40,000 National Bank Of Greece SA 1,520,392
70,000 Hellenic Telecommunications Organization SA 1,222,761
----------
Total Greece 5,548,433
----------
HONG KONG: 4.00%
749,900 @ China Mobile (Hong Kong) Ltd 4,807,668
73,000 @ China Unicom ADR 1,496,500
220,000 @ China Unicom 441,467
1,362,000 Cosco Pacific Ltd. 1,004,167
----------
Total Hong Kong 7,749,802
----------
HUNGARY: 1.80%
90,000 Matav Rt. ADR 2,115,000
30,000 OTP Bank Rt. GDR 1,378,500
----------
Total Hungary 3,493,500
----------
INDIA: 3.28%
170,000 Hindustan Lever Ltd. $ 645,053
12,400 @ Infosys Technologies Ltd. 1,897,760
330,000 Mahanagar Telephone Nigam 993,276
240,000 Reliance Industries Ltd. 1,553,122
23,900 @ Wipro Ltd. ADR 1,257,737
----------
Total India 6,346,948
----------
ISRAEL: 3.46%
32,600 @ AudioCodes Ltd 1,289,737
671,900 Bank Hapoalim Ltd. 1,699,636
19,650 @ Orbotech Ltd. 1,040,222
45,000 Teva Pharmaceutical Industries ADR 2,660,625
----------
Total Israel 6,690,220
----------
ITALY: 1.02%
134,800 Mediolanum SPA 1,975,538
----------
Total Italy 1,975,538
----------
JAPAN: 1.79%
87,000 Nomura Securities Co Ltd 1,845,805
20,300 Sony Corp. 1,622,288
----------
Total Japan 3,468,093
----------
MALAYSIA: 3.40%
500,000 MAA Holdings Bhd 1,000,000
612,000 Malayan Banking Berhad 2,448,000
125,000 Nestle (Malaysia) Berhad 661,184
500,000 Tenaga Nasional Berhad 1,618,421
600,000 United Engineers (Malaysia) 852,632
----------
Total Malaysia 6,580,237
----------
See Accompanying Notes to Financial Statements
112
<PAGE>
Pilgrim
Emerging
Countries Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
MEXICO: 13.80%
105,725 Cemex SA ADR $ 2,233,441
84,635 Coca-Cola Femsa SA ADR 1,623,934
234,430 @ Corp Interamericana de Entretenimiento SA 1,059,072
51,600 Fomento Economico Mexicano SA ADR 1,970,475
1,998,000 @ GPO Fin Banamex AC ADR 3,104,866
87,000 Grupo Elektra SA ADR 897,188
79,850 @ Grupo Iusacell S.A de C.V. ADR 1,038,050
36,435 @ Grupo Televisa SA ADR 1,972,044
148,201 Telefonos de Mexico SA ADR 7,993,591
44,100 Tubos de Acero de Mexico SA ADR 670,761
131,600 TV Azteca SA DE CV ADR 1,645,000
1,045,000 @ Walmart de Mexico/Mexico City 2,513,464
-----------
Total Mexico 26,721,886
-----------
NETHERLANDS: 1.05%
51,700 Koninklijke Philips Electronics NV 2,031,742
-----------
Total Netherlands 2,031,742
-----------
POLAND: 0.84%
15,000 @ Bank Pekao SA GDR 151,125
14,000 Prokom Software SA 551,383
185,000 Telekomunikacja Polska SA GDR 929,625
-----------
Total Poland 1,632,133
-----------
RUSSIA: 3.24%
52,000 @ Mobile Telesystems ADR 1,436,500
55,000 Lukoil-Holding ADR 2,923,250
150,000 Surgutneftegaz ADR 1,920,000
-----------
Total Russia 6,279,750
-----------
SOUTH AFRICA: 1.67%
75,500 Impala Platinum Holdings Ltd. 3,234,987
-----------
Total South Africa 3,234,987
-----------
SOUTH KOREA: 6.62%
40,000 H&CB $ 961,758
70,000 Korea Electric Power Corp. 1,563,077
200,000 LG Engineering & Construction Ltd. 728,791
22,000 Pohang Iron & Steel Co. 1,278,418
40,000 Samsung Electro-Mechanics 1,280,000
15,000 Samsung Electronics 1,879,121
42,000 Samsung Securities Co. Ltd. 760,615
45,000 Shinsegae Department Store 2,072,967
10,730 SK Telecom 2,287,495
-----------
Total South Korea 12,812,242
-----------
SWEDEN: 1.97%
613,000 Swedish Match AB 2,104,210
127,900 Telefonaktiebolaget LM Ericsson 1,702,381
-----------
Total Sweden 3,806,591
-----------
SWITZERLAND: 1.96%
929 Nestle SA 1,925,080
1,227 Novartis 1,861,387
-----------
Total Switzerland 3,786,467
-----------
TAIWAN: 2.12%
100,000 @ Taiwan Semiconductor Manufacturing Co. Ltd. ADR 2,268,750
140,000 @ United Microelectronics ADR 1,592,500
35,000 @ Via Technologies Inc/Taiwan 251,390
-----------
Total Taiwan 4,112,640
-----------
THAILAND: 0.70%
2,607,000 @ Thai Farmers Bank 1,347,631
-----------
Total Thailand 1,347,631
-----------
TURKEY: 5.01%
65,000,000 Aksigorta 1,285,743
20,000,000 @ Anadolu Efes Biracilik Ve Malt Sanayii AS 1,172,187
109,542,700 Hurriyet Gazeteci 1,316,146
30,000,000 KOC Holding AS 1,912,130
140,000,000 Turkiye Garanti Bankasi 1,435,929
25,000,000 @ Turkcell Iletisim Hizmet AS 1,098,925
170,000,000 Yapi VE Kredi Bankasi 1,469,629
-----------
Total Turkey 9,690,689
-----------
UNITED KINGDOM: 9.78%
69,200 Barclays PLC $ 1,980,000
167,700 British Telecommunications PLC 1,966,059
209,100 Diageo PLC 1,973,575
566,565 @ Dimension Data Holdings PLC 4,877,658
63,300 Glaxo Wellcome PLC 1,822,207
168,500 Provident Financial PLC 2,149,023
143,400 Reckitt Benckiser PLC 1,885,079
548,200 Vodafone Group PLC 2,280,839
-----------
Total United Kingdom 18,934,440
-----------
UNITED STATES: 0.00%
267 @ Winbond Electronics Corp. 2,596
-----------
Total United States 2,596
-----------
Total Common Stock (Cost $169,480,039) 175,967,663
-----------
PREFERRED STOCK: 1.29%
BRAZIL: 1.29%
18,767 Banco Itau SA 1,459,874
45,200 CVRD-Companhia Vale do Rio Doce 1,041,801
-----------
Total Brazil 2,501,675
-----------
Total Preferred Stock (Cost $2,996,617) 2,501,675
-----------
Total Long Term Investments
(Cost $172,476,656) 178,469,338
-----------
See Accompanying Notes to Financial Statements
113
<PAGE>
Pilgrim
Emerging
Countries Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Principal Amount Value
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 11.85%
U.S. GOVERNMENT SECURITIES: 7.20%
$ 8,000,000 Federal National Mortgage
Association, 6.430%, due 11/02/00 $ 7,998,571
6,000,000 U.S. Treasury Bill, 6.120%,
due 01/11/01 5,927,580
------------
13,926,151
------------
COMMERCIAL PAPER: 4.65%
9,000,000 Nestle Capital Corp.,
6.350%, due 11/01/00 9,000,000
------------
Total Short-Term Investments
(Cost $22,926,151) 22,926,151
------------
Total Investments in Securities
(Cost $195,402,807)* 104.03% $201,395,489
Other Assets and Liabilities-Net -4.03% (7,797,763)
------- ------------
Net Assets 100.00% $193,597,726
======= ============
@ Non-income producing security
ADR -- American Depository Receipt
GDR -- Global Depository Receipt
* Cost for federal income tax purposes is $196,173,515. Net unrealized
appreciation consists of:
Gross Unrealized Appreciation $ 14,421,993
Gross Unrealized Depreciation (9,200,019)
------------
Net Unrealized Appreciation $ 5,221,974
============
See Accompanying Notes to Financial Statements
114
<PAGE>
Pilgrim
Emerging
Countries Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Percentage of
Industry Net Assets
-------- ----------
Aerospace/Defense 0.50%
Banks 11.31%
Beverages 3.04%
Building Materials 1.16%
Chemicals 0.80%
Commercial Services 1.15%
Diversified Financial Services 3.91%
Electric 3.15%
Electrical Components & Equipment 0.97%
Electronics 2.25%
Engineering & Construction 1.32%
Entertainment 0.55%
Food 2.28%
Forest Products & Paper 0.40%
Holding Companies-Diversified 2.65%
Home Furnishings 0.84%
Household Products/Wares 1.31%
Insurance 3.26%
Iron/Steel 0.66%
Metal Fabricate/Hardware 0.35%
Mining 2.21%
Oil & Gas Producers 6.91%
Pharmaceuticals 3.27%
Retail 2.83%
Semiconductors 2.13%
Software 3.79%
Sovereign 4.13%
Telecommunications 23.96%
Tobacco 1.09%
Short-term Investments 11.85%
Other Assets and Liabilities, Net -4.03%
-------
Net Assets 100.00%
=======
See Accompanying Notes to Financial Statements
115
<PAGE>
Pilgrim
Worldwide Emerging
Markets Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS: 79.24%
ARGENTINA: 0.45%
25,225 @ Grupo Financiero Galicia SA $ 367,339
----------
Total Argentina 367,339
----------
BRAZIL: 10.54%
12,280 Brasil Telecom Participacoes SA ADR 665,422
28,515 Centrais Eletricas Brasileiras SA 506,369
21,500 Cia de Bebidas das Americas ADR 485,094
75,770 Cia Paranaense de Energia ADR 686,665
16,460 Companhia Brasileira de Distribuicao
Grupo Pao de Acucar ADR 586,387
44,350 Embratel Participacoes SA ADR 717,916
14,500 Empresa Bras de Aeronautica ADR 419,594
53,200 @ Petroleo Brasileiro SA ADR 1,546,125
12,810 Tele Celular Sul Participacoes SA ADR 322,652
50,870 Tele Norte Leste Participacoes SA ADR 1,125,499
22,240 Telesp Celular Participacoes SA ADR 703,340
22,000 Unibanco - Uniao de Bancos Brasileiros GDR 555,500
15,400 Votorantim Celulose e Papel SA Adr 265,650
----------
Total Brazil 8,586,213
----------
CHILE: 0.49%
26,300 Compania Telecomunicaciones de Chile SA ADR 401,075
----------
Total Chile 401,075
----------
CHINA: 5.91%
5,260,000 @ China Petroleum & Chemical Corp. $1,031,902
178,800 PetroChina Ltd. ADR 3,788,325
----------
Total China 4,820,227
----------
CZECH REBPUBLIC: 0.46%
10,000 @ Ceske Radiokomunikace GDR 376,250
----------
Total Czech Republic 376,250
----------
EGYPT: 0.61%
25,000 @ Mobinil-Egyptian Mobile Netork 494,582
----------
Total Egypt 494,582
----------
FRANCE: 0.98%
5,600 Total Fina Elf SA 801,215
----------
Total France 801,215
----------
GREECE: 3.16%
40,000 Alpha Bank SA 1,478,409
30,000 Hellenic Telecommunications Organization SA 524,040
15,000 National Bank Of Greece SA 570,147
----------
Total Greece 2,572,596
----------
HONG KONG: 1.49%
24,500,000 @ China Star Entertainment 669,124
3,590,000 Yuxing Infotech Holdings Ltd. 547,776
----------
Total Hong Kong 1,216,900
----------
HUNGARY: 1.29%
25,000 Matav Rt. ADR 587,500
10,000 OTP Bank Rt. GDR 459,500
----------
Total Hungary 1,047,000
----------
INDIA: 7.22%
216,600 @ Fujitsu ICIM Ltd. 551,383
46,850 HCL Technologies Ltd. 1,189,677
250,000 @ Satyam Computer Services 1,639,716
42,400 @ Television Eighteen India Ltd. 423,774
360,000 Videsh Sanchar Nigam Ltd. 1,621,518
8,800 @ Wipro Ltd. ADR 463,100
----------
Total India 5,889,168
----------
ISRAEL: 2.11%
170,000 Bank Hapoalim Ltd. $ 430,031
7,300 @ Nice Systems Ltd. ADR 341,275
16,000 Teva Pharmaceutical Industries ADR 946,000
----------
Total Israel 1,717,306
----------
ITALY: 1.02%
56,800 Mediolanum SPA 832,423
----------
Total Italy 832,423
----------
MEXICO: 10.47%
116,500 Cemex SA 489,757
27,150 Coca-Cola Femsa S.A. ADR 520,941
75,000 @ Corp Interamericana de Entretenimiento SA 338,824
16,550 Fomento Economico Mexicano SA ADR 632,003
27,930 Grupo Elektra SA GDR 288,028
639,000 @ Grupo Financiero Banamex Accival SA ADR 992,998
25,560 @ Grupo Iusacell S.A de C.V. ADR 332,280
11,700 Grupo Televisa SA GDR 633,262
47,435 Telefonos de Mexico SA ADR 2,558,525
13,780 Tubos de Acero de Mexico SA ADR 209,594
58,035 TV Azteca SA DE CV Adr 725,437
334,000 Walmart de Mexico/Mexico City 803,346
----------
Total Mexico 8,524,995
----------
POLAND: 0.52%
5,000 @ Bank Pekao SA GDR 50,375
75,000 Telekomunikacja Polska SA GDR 376,875
----------
Total Poland 427,250
----------
PORTUGAL: 1.83%
408,545 @ Pararede SGPS SA 1,494,240
----------
Total Portugal 1,494,240
----------
RUSSIA: 3.49%
17,000 Lukoil-Holding ADR 888,250
22,000 @ Mobile Telesystems ADR 607,750
106,000 Moscow Telephone 583,000
60,000 Surgutneftegaz ADR 768,000
----------
Total Russia 2,847,000
----------
See Accompanying Notes to Financial Statements
116
<PAGE>
Pilgrim
Worldwide Emerging
Markets Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
SINGAPORE: 1.87%
90,000 @ ST Assembly Test Services Ltd. ADR $1,524,375
----------
Total Singapore 1,524,375
----------
SOUTH AFRICA: 1.31%
671,900 @ Ixchange Technology Holdings 577,562
2,649,000 @ Metropolis Transactive Holdings Ltd. 87,579
5,100,000 @ Paradigm Capital Holdings Ltd. 249,547
2,085,100 @ Union Alliance Media Ltd. 151,660
----------
Total South Africa 1,066,348
----------
SOUTH KOREA: 9.49%
526,836 @ C&Tel Co Ltd. 351,996
74,000 Hyundai Electronics Industries 454,734
137,000 Korea Electric Power Corp. 3,059,165
55,000 Korea Telecom ADR 2,028,125
101,396 LG Electronics 1,412,853
264,300 Mirae Co. Ltd. 425,203
----------
Total South Korea 7,732,076
----------
SWEDEN: 1.09%
258,000 Swedish Match AB 885,622
----------
Total Sweden 885,622
----------
SWITZERLAND: 0.96%
516 Novartis 782,784
----------
Total Switzerland 782,784
----------
TAIWAN: 3.12%
269,982 @ Cosmo Electronics Corp. 316,790
2,855,000 @ RF-Link System Inc. 587,794
40,000 @ Taiwan Semiconductor Manufacturing Co. Ltd. ADR 907,500
754,000 @ Winbond Electronics Corp. 730,656
----------
Total Taiwan 2,542,740
----------
THAILAND: 0.46%
3,493,293 KR Precision Public Company Ltd. 373,062
----------
Total Thailand 373,062
----------
TURKEY: 4.70%
25,000,000 Aksigorta $ 494,516
7,500,000 @ Anadolu Efes Biracilik Ve Malt Sanayii AS 439,570
56,840,000 Dogan Sirketler Grubu Hldgs 978,586
10,000,000 KOC Holding AS 637,377
8,000,000 @ Turkcell Iletisim Hizmet AS 351,656
40,000,000 @ Turkiye Garanti Bankasi 410,265
60,000,000 Yapi VE Kredi Bankasi 518,693
----------
Total Turkey 3,830,663
----------
UNITED KINGDOM: 3.99%
29,100 Barclays PLC 832,630
70,500 British Telecommunications PLC 826,519
88,000 Diageo PLC 830,581
26,700 Glaxo Wellcome PLC 768,609
----------
Total United Kingdom 3,258,339
----------
UNITED STATES: 0.21%
85,000 @ Uproar Inc. 173,115
----------
Total United States 173,115
----------
Total Common Stocks (Cost $98,877,683) 64,584,903
----------
PREFERRED STOCKS: 1.35%
BRAZIL: 1.35%
8,233 Banco Itau SA 640,440
19,830 CVRD-Companhia Vale do Rio Doce 457,056
----------
Total Brazil 1,097,496
----------
Total Preferred Stocks (Cost $1,190,739) 1,097,496
----------
Total Long Term Investments (Cost $100,068,422) 65,682,399
----------
Principal Amount Value
--------------------------------------------------------------------------------
SHORT TERM INVESTMENTS: 12.73%
$10,500,000 U.S. Treasury Bills: 6.120%
due 01/11/01 $ 10,373,265
------------
Total Short-Term Investments
(Cost $10,373,265) 10,373,265
------------
Total Investments in Securities
(Cost $110,441,687)* 93.32% 76,055,664
Other Assets and Liabilities-Net 6.68% 5,440,689
------ ------------
Net Assets 100.00% $ 81,496,353
====== ============
@ Non-income producing security
ADR- American Depository Receipts
GDR- Global Depository Receipts
* Cost for federal income tax purposes is $110,534,194. Net unrealized
depreciation consists of:
Gross Unrealized Appreciation $ 3,849,163
Gross Unrealized Depreciation (38,327,693)
------------
Net Unrealized Depreciation $(34,478,530)
============
See Accompanying Notes to Financial Statements
117
<PAGE>
Pilgrim
Worldwide Emerging
Markets Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Percentage of
Industry Net Assets
-------- ----------
Aerospace/Defense 0.51%
Banks 7.29%
Beverages 2.79%
Building Materials 0.60%
Computers 1.81%
Diversified Financial Services 1.97%
Electric 5.22%
Electrical Components & Equipment 1.73%
Electronics 0.39%
Entertainment 1.24%
Food 0.72%
Forest Products & Paper 0.33%
Holding Companies-Diversified 3.51%
Home Furnishings 0.72%
Insurance 1.63%
Internet 1.03%
Media 2.19%
Metal Fabricate/Hardware 0.26%
Mining 0.56%
Oil & Gas Producers 10.81%
Pharmaceuticals 3.06%
Retail 1.77%
Semiconductors 4.96%
Software 5.31%
Telecommunications 19.09%
Tobacco 1.09%
Short-Term Investments 12.73%
Other Assets and Liabilities, Net 6.68%
------
NET ASSETS 100.00%
======
See Accompanying Notes to Financial Statements
118
<PAGE>
Pilgrim
Global Technology
Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS: 90.92%
BERMUDA: 3.38%
26,000 @ FLAG Telcom Holdings, Ltd. $ 300,625
---------
Total Bermuda 300,625
---------
FINLAND: 1.76%
7,100 Sonera OYJ 156,411
---------
Total Finland 156,411
---------
FRANCE: 4.49%
6,400 Alcatel SA 399,200
---------
Total France 399,200
---------
GERMANY: 3.42%
499 @ Adlink Internet Media AG 3,049
4,000 @ Elmos Semiconductor AG 132,382
4,000 @ Infineon Technologies AG 168,939
---------
Total Germany 304,370
---------
HONG KONG: 0.34%
200,000 Yuxing Infotech Holdings, Ltd. 30,517
---------
Total Hong Kong 30,517
---------
ISRAEL: 0.26%
2,500 @ Orckit Communications, Ltd. 12,344
2,500 @ Tioga Technologies, Ltd. 10,547
---------
Total Israel 22,891
---------
JAPAN: 23.42%
5,200 Capcom Co., Ltd. 201,109
1,400 Citizen Electronics Co. 102,002
12,000 Fujitsu, Ltd. 213,793
600 Hikari Tsushin Inc. 10,173
9,000 Matsushita Electric Industrial Co. 261,467
28,000 Mitsubishi Electric Corp. 201,182
13 NTT Data Corp. 101,269
13 NTT Docomo Inc. 320,488
600 Softbank Corp. 36,017
3,800 Sony Corp. 303,680
5,000 Square Co., Ltd. 174,128
2,000 Tokyo Electron, Ltd. 156,532
---------
Total Japan 2,081,840
---------
NETHERLANDS: 5.99%
6,305 Koninklijke Philips Electronics NV $ 247,778
8,000 @ United Pan-Europe Communications NV 140,189
12,000 @ World Online International NV 144,092
---------
Total Netherlands 532,059
---------
PORTUGAL: 2.56%
2,000 @ Impreza SGPS 15,869
58,002 @ Pararede SGPS S.A. 212,140
---------
Total Portugal 228,009
---------
SOUTH KOREA: 3.81%
5,000 Korea Telecom ADR 184,375
47,900 Mirae Co. Limited ADR 154,178
---------
Total South Korea 338,553
---------
SPAIN: 3.11%
14,500 @ Telefonica S.A. 276,487
---------
Total Spain 276,487
---------
SWEDEN: 2.22%
14,800 Telefonaktiebolaget
LM Ericsson 196,992
---------
Total Sweden 196,992
---------
SWITZERLAND: 2.56%
9,000 Swisscom AG ADR 227,250
---------
Total Switzerland 227,250
---------
TAIWAN: 1.31%
5,120 @ Taiwan Semiconductor Manufacturing Co. Limited 116,160
---------
Total Taiwan 116,160
---------
UNITED KINGDOM: 3.05%
65,200 Vodafone Group, PLC 271,271
---------
Total United Kingdom 271,271
---------
UNITED STATES: 29.24%
1,500 @ Agilent Technologies, Inc. $ 69,469
0 @ Avaya Inc. --
4,500 @ Caliper Technologies Corp., NMS 253,547
2,500 @ Conexant Systems, Inc. 65,859
8,000 @ Electronic Arts, Inc. 399,750
6,300 @ Entrust Technologies, Inc. 193,528
7,900 @ Intersil Holding Corp. 378,706
20,000 @ Litronic, Inc. 142,500
6,000 Lucent Technologies, Inc. 139,875
9,000 @ Motient Corp. 108,844
500 @ New Focus, Inc. 31,734
4,000 @ Phone.com, Inc. 370,375
25,000 @ Saflink Corp. 32,031
5,900 @ Vitesse Semiconductor Corp. 412,631
---------
Total United States 2,598,849
---------
Total Common Stocks (Cost $12,101,862) 8,081,484
---------
Total Long-Term Investments (Cost $12,101,862) 8,081,484
---------
Total Investments in Securities
(Cost $12,101,962)* 90.92% $8,081,484
------ ----------
Other Assets and Liabilities-Net 9.08% 806,714
Net Assets 100.00% $8,888,197
------ ----------
@ Non-income producing security
ADR American Depository Receipt
* Cost for federal income tax purposes is $12,340,632. Net unrealized
depreciation consists of:
Gross Unrealized Appreciation $ 216,328
Gross Unrealized Depreciation (4,475,476)
-----------
Depreciation Net Unrealized $(4,259,148)
===========
See Accompanying Notes to Financial Statements
119
<PAGE>
Pilgrim
Global Technology
Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Percentage of
Industry Net Assets
-------- ----------
Advertising Services 0.03%
Audio/Video Products 6.36%
Cellular Telecommunications 6.66%
Computer Services 1.95%
Computers-Integrated Systems 2.41%
Electric Products-Miscellaneous 2.26%
Electronic Components-Semiconductor 11.35%
Electronic Components-Miscellaneous 4.30%
Electronic Measurement Instruments 0.78%
Enterprise Software/Service 2.39%
Entertainment Software 8.71%
Internet Content-Entertainment 1.62%
Internet Incubators 0.41%
Internet Security 2.18%
Internet Telephony 4.17%
Multimedia 0.18%
Networking Products 1.57%
Semicon Components-Integrated Circuits 5.95%
Semiconductor Equipment 3.50%
Telecommunication Equipment 6.95%
Telecommunication Services 7.78%
Telecommunications Equiptment Fiber Optics 3.74%
Telephone-Integrated 5.67%
Other Assets and Liabilities, Net 9.08%
------
NET ASSETS 100.00%
======
See Accompanying Notes to Financial Statements
120
<PAGE>
Pilgrim
Asia-Pacific
Equity Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS: 83.62%
HONG KONG: 31.93%
150,000 Bank of East Asia $ 338,505
85,000 Cheung Kong Holdings 940,024
276,000 China Everbright Ltd. 245,955
304,000 China Merchants Holdings Int'l Co. Ltd. 210,488
131,500 @ China Mobile Hong Kong Ltd. 843,057
1,250,000 China National Aviation 189,127
110,000 @ China Unicom 220,733
48,000 Citic Pacific Ltd. 192,640
70,000 DAO Heung Bank Group Ltd. 353,635
80,700 Hutchison Whampoa 1,003,706
750,000 JCG Holdings Ltd. 399,040
555,972 @ Pacific Century CyberWorks Ltd. 427,699
40,000 Sun Hung Kai Properties Ltd. 328,247
60,000 Television Broadcasts Ltd. 328,504
----------
Total Hong Kong 6,021,360
----------
INDONESIA: 0.51%
90,000 Gudang Garam Tbk (Pt) 96,634
----------
Total Indonesia 96,634
----------
MALAYSIA: 3.98%
85,000 @ Malayan Banking Berhad 340,000
103,000 Resorts World Berhad 180,250
71,000 Tenaga Nasional Berhad 229,816
----------
Total Malaysia 750,066
----------
SINGAPORE: 15.40%
33,000 @ Chartered Semiconductor Manufacturing Ltd. $ 142,800
60,000 City Developments Ltd. 276,718
64,035 DBS Group Holdings Ltd 754,726
520,000 @ Pacific Century 399,704
60,000 Singapore Airlines Ltd. 601,264
20,000 Singapore Press Holdings 285,828
200,000 Singapore Telecommunications 331,378
68,000 @ ST Assembly Test Services Ltd 111,894
----------
Total Singapore 2,904,312
----------
SOUTH KOREA: 14.41%
25,000 H&CB 601,099
15,000 @ Hyundai Electronics Industries 92,176
25,000 Korea Electric Power Corp. 558,242
11,530 Korea Telecom ADR 425,168
5,860 Samsung Electronics 734,110
1,440 SK Telecom 306,989
----------
Total South Korea 2,717,784
----------
TAIWAN: 15.36%
7,510 ACER GDR 31,167
44,590 Asustek Computer Inc. GDR 244,128
21,843 China Steel Corp. 251,194
28,365 Far Eastern Textile Co. Ltd. GDR 229,757
32,123 HON HAI Precision Industry GDR 370,218
2,300 Siliconware Precision Inds 138,303
30,036 Ritek Corporation GDR 112,932
22,760 Siliconware Precision Industries Ltd. ADR 91,036
16,822 Synnex Technology Int'l Corp. GDR 140,043
32,678 @ Taiwan Semiconductor Manufacturing Co. Ltd. ADR 741,391
39,000 United Microelectronics ADR 443,625
10,550 @ Winbond Electronics Corp. GDR 102,599
----------
Total Taiwan 2,896,393
----------
THAILAND: 2.03%
27,500 @ Advanced Info Service Public Co Ltd. $ 226,198
7,500 @ Siam Cement 70,552
170,000 @ Thai Farmers Bank 87,878
----------
Total Thailand 384,628
----------
Total Common Stocks (Cost $20,659,007) 15,771,177
----------
PREFERRED STOCK: 0.66%
THAILAND: 0.66%
300,000 @ Siam Commercial Bank Ltd. 124,404
----------
Total Thailand 124,404
----------
Total Preferred Stock (Cost $254,508) 124,404
----------
WARRANTS: 0.11%
THAILAND: 0.11%
274,000 @ Siam Commercial Bank Ltd. 19,924
----------
Total Thailand 19,924
----------
Total Warrants (Cost $0) 19,924
----------
Total Long Term Investments (Cost $20,913,515) 15,915,505
----------
See Accompanying Notes to Financial Statements
121
<PAGE>
Pilgrim
Asia-Pacific
Equity Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Principal Amount Value
--------------------------------------------------------------------------------
SHORT TERM INVESTMENTS: 3.92%
REPURCHASE AGREEMENT: 3.92%
$ 740,000 State Street Bank & Trust Repurchase
Agreement, 6.450% due 11/01/2000
(Collateralized by $5,845,000
U.S. Treasury Notes, 7.875% Due
11/15/04, Market Value $6,246,844) $ 740,000
-----------
Total Short-Term Investments
(Cost $740,000) 740,000
-----------
Total Investments in Securities
(Cost $21,653,515) 88.31% $16,655,505
Other Assets and Liabilities-Net 11.69% 2,204,585
------ -----------
Net Assets 100.00% $18,860,090
====== ===========
@ Non-income producing security
ADR American Depository Receipt
GDR Global Depository Receipt
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized depreciation consists of:
Gross Unrealized Appreciation $ 417,765
Gross Unrealized Depreciation (5,415,775)
-----------
Net Unrealized Depreciation $(4,998,010)
===========
See Accompanying Notes to Financial Statements
122
<PAGE>
Pilgrim
Asia-Pacific
Equity Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Percentage of
Industry Net Assets
-------- ----------
Airlines 3.19%
Banks 13.89%
Building Materials 0.37%
Chemicals 1.12%
Computers 1.51%
Diversified Financial Services 3.42%
Electric 4.18%
Electrical Companies & Equipment 3.89%
Electronics 3.26%
Entertainment 0.96%
Holding Companies-Diversified 6.34%
Internet 2.12%
Iron/Steel 1.33%
Media 3.26%
Real Estate 12.68%
Semiconductors 9.88%
Telecommunications 12.48%
Tobacco 0.51%
Short-Term Investments 3.92%
Other Assets and Liabilities, Net 11.69%
------
NET ASSETS 100.00%
======
See Accompanying Notes to Financial Statements
123
<PAGE>
Pilgrim
SmallCap Asia
Growth Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Shares Country/Issuer Value
--------------------------------------------------------------------------------
COMMON STOCKS: 77.87%
CHINA: 3.09%
600,000 Beijing Datang Power Gen. Co. Ltd. $ 143,095
---------
Total China 143,095
---------
HONG KONG: 31.16%
376,000 @ APT Satellite Holdings Ltd. 206,103
124,700 @ Asiaworld Online 48,175
70,000 Bank of East Asia 157,969
13,000 Cheung Kong (Holdings) 143,768
22,000 @ China Mobile (Hong Kong) Ltd. 141,044
650,000 China National Aviation 98,346
70,000 @ China Unicom 140,467
30,000 Citic Pacific Ltd. 120,400
70,000 Hong Kong Exchanges and Clearing Ltd. 122,067
13,200 Hutchison Whampoa 164,175
130,000 Pacific Century CyberWorks Ltd. 100,013
---------
Total Hong Kong 1,442,527
---------
SINGAPORE: 10.18%
11,000 DBS Group Holdings Ltd. 129,648
127,000 @ Neptune Orient Lines 107,744
17,650 Oversea-Chinese Banking Corp. 112,555
8,500 Singapore Press Holdings 121,475
---------
Total Singapore 471,422
---------
SOUTH KOREA: 12.80%
5,000 Korea Electric Power Corp. 111,648
2,500 Korea Telecom 147,253
1,000 Samsung Electronics 125,275
0 Samsung Fire & Marine INS 3
10,000 Shinhan Bank 100,220
9,000 SK Corp. 108,396
---------
Total South Korea 592,795
---------
TAIWAN: 15.25%
100,000 Acer Inc. $ 82,972
82,845 @ Advanced Semiconductor Engineering Inc. 95,156
20,240 Asustek Computer Inc. 100,887
112,000 Far Eastern Textile Co. Ltd. 92,206
27,750 @ Ritek Corp. 53,266
120 @ Stark Technology Inc. 736
38,400 @ Taiwan Semiconductor Manufacturing Co. Ltd. 116,508
60,000 United Microelectronics 105,882
60,000 @ Winbond Electronics Corp. 58,142
---------
Total Taiwan 705,755
---------
THAILAND: 1.78%
33,600 PTT Exploration & Production Public Co. Ltd. 82,454
---------
Total Thailand 82,454
---------
UNITED KINGDOM: 3.61%
12,000 HSBC Holdings PLC $ 166,945
---------
Total United Kingdom 166,945
---------
Total Common Stocks (Cost $4,632,559) 3,604,993
---------
Total Long Term Investments (Cost $4,632,559) 3,604,993
---------
Total Investments in Securities
(Cost $4,632,559) 77.87% $ 3,604,993
Other Assets and Liabilities-Net 22.13% 1,024,735
------ -----------
Net Assets 100.00% $ 4,629,728
====== ===========
@ Non-income producing security
ADR -- American Depository Receipt
* Cost for federal income tax purposes is $4,650,448. Net unrealized
depreciation consists of:
Gross Unrealized Appreciation $ 345,967
Gross Unrealized Depreciation (1,391,422)
-----------
Net Unrealized Depreciation $(1,045,455)
===========
See Accompanying Notes to Financial Statements
124
<PAGE>
Pilgrim
SmallCap Asia
Growth Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Percentage of
Industry Net Assets
-------- ----------
Banks 14.41%
Computers 2.94%
Distribution/Wholesale 0.02%
Diversified Financial Services 2.64%
Electric 5.50%
Electrical Components & Equipment 2.71%
Electronics 2.18%
Holding Companies-Diversified 6.15%
Insurance 0.00%
Internet 3.21%
Media 2.62%
Oil&Gas Producers 4.12%
Real Estate 5.23%
Semiconductors 8.11%
Telecommunications 13.71%
Textiles 1.99%
Transportation 2.33%
Other Assets and Liabilities, Net 22.13%
------
NET ASSETS 100.00%
======
See Accompanying Notes to Financial Statements
125
<PAGE>
Pilgrim
Troika Dialog
Russia Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS: 63.29%
Aerospace/Defense: 0.08%
65,000,000 @ Aviastar $ 42,193
----------
Airlines: 1.09%
2,446,350 Aeroflot 583,454
----------
Brewery: 3.62%
47,800 @ Sun Interbrew, Ltd. 101,408
1,135,350 @ Sun Interbrew, Ltd. GDR 1,841,424
----------
1,942,832
----------
Building Materials: 0.01%
38,000 @ Alfa Cement 573
21,900 @ Materiel CIMT Lorraine** 435
----------
1,008
----------
Cellular Telecommunications: 4.37%
120,964 @ Vimpel Communications ADR 2,343,677
2 Vimpel Communications 52
----------
2,343,729
----------
Electricity: 5.39%
5,500,000 @ Komienergo 21
40,050,000 Mosenergo 1,273,590
50,000 Mosenergo Spons Adr 159,000
20,000 @ Novosibirskelectrosviaz 29,000
1,335,000 Sverdlovskenergo 54,735
10,900,000 Unified Energy Sys -rues 1,376,670
----------
2,893,016
----------
Food: 0.00%
23,800 @ Samson 168
----------
Gas Distribution: 0.51%
35,000 Gazprom ADR 274,750
----------
Medical Equipment: 0.02%
11,200,000 Zvezda 9,308
----------
Mining: 2.63%
183,000 Norilsk Nickel 1,409,100
----------
Oil Companies-Exploration & Production: 1.88%
96,982 Megionneftegaz 242,455
180,300 Sakhalinmorneftegaz 766,275
----------
1,008,730
----------
Oil Companies - Integrated: 27.17%
278,700 Ao Tatneft Sponsored ADR $2,856,674
21 @ Komitek Oil Co. 9
83,000 Lukoil Co. Spons ADR 4,411,450
38,000 Lukoil Holdings 505,400
26,070 @ Purneftegaz 59,961
279,000 @ Surgutneftegaz 71,480
213,000 Surgutneftegaz ADR 2,726,400
1,876,000 Tatneft 942,690
1,708,686 Yukos Holdings 2,998,743
----------
14,572,807
----------
Oil and Gas Drilling: 0.02%
5,384,500 Rosneftegazstroy ADR 10,769
----------
Retail: 0.69%
7,000 @ Gostinny Dvor 313
235,000 Trade House Gum 340,750
10,000 Trade House Gum ADR 29,000
----------
370,063
----------
Steel Pipe & Tube Manufacturing: 0.09%
1,002,000 @ Chelyabinsk Pipe Works 48,096
----------
Telecommunication Services: 8.76%
6,831,400 Bashinformsvyaz 437,292
129,600 @ Golden Telecom, Inc. 2,000,700
270,000 @ Irkutskelektrosviaz 143,100
85,300 Kubanelectrosvyaz 810,350
9,500 Lensviaz 57,950
656,000 Nizhnovsviyazinform 772,922
20,383 @ Novosibirsk Telephone 224,213
20,000 St. Petersburg MMT 9,519
10,000,000 Uralsvyazinform 113,000
42,500 Uralsvyazinform ADR 104,588
5,000 Uraltelecom 23,846
----------
4,697,480
----------
Telephone-Integrated: 3.66%
24,610 Chelyabinskvyazinform 553,725
20,000 Rostelecom Sponsored ADR 171,250
898,904 Rostelekom 1,240,488
----------
1,965,463
----------
Telephone-Local: 3.30%
1,100 @ Moscow Region Electrosvyaz $ 220,000
238,125 Rostov Region Electrosvyaz 228,600
28,000 Samarasvyazinform 1,008,000
350,000 St. Petersburg Telephone 175,000
214,000 Tyumentelecom 139,100
----------
1,770,700
----------
Total Common Stocks (Cost $49,019,765) 33,943,666
----------
PREFERRED STOCKS: 24.05%
Electricity: 3.17%
450,000 @ Chelyaben 3,150
46,000 Krasnoyarskenergo 82,800
24,600 Permenergo 7,704
32,861,738 Unified Energy System 1,606,939
----------
1,700,593
----------
Mining: 5.73%
433,000 Norilsk Nickel 3,074,300
----------
Oil Companies-Exploration & Production: 0.15%
4,000 @ Udmurtneft 80,000
----------
Oil Companies-Integrated: 13.97%
40,000 Lukoil-Holding Pfd. ADR 888,000
213,750 Lukoil-Holding 2,372,625
95,000 Surgutneftegaz ADR 1,254,000
22,570,000 Surgutneftegaz 2,979,240
----------
7,493,865
----------
Pipeline Oil Transportation: 0.00%
1,800 @ Transneft 185
----------
Telecommunication Services: 0.73%
189,500 Moscow City Telephone Network 255,825
427,000 @ Nizhnovsvyazinform 134,563
100,000 Smolensksvyazinform 2,610
----------
392,998
----------
Telephone-Integrated: 0.04%
50,000 Rostelecom 23,000
----------
Telephone-Local: 0.26%
9,300 Samarasvyazinform 88,350
110,000 St. Petersburg Telephone 20,900
279,099 Tyumentelecom 27,910
----------
137,160
----------
Total Preferred Stocks (Cost $15,047,855) 12,902,101
----------
See Accompanying Notes to Financial Statements
126
<PAGE>
Pilgrim
Troika Dialog
Russia Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
GOVERNMENT BONDS: 3.45%
Russian Federation Bond: 3.45%
5,000,000 Russian $1,850,000
----------
Federation Bond 2.500%, Due 3/31/2030
(Cost $1,800,245)
Total Government Bonds
(Cost $1,850,000) 1,800,245)
----------
Total Long Term Investments
(Cost $65,867,865) 48,695,767
----------
Principal Amount Value
--------------------------------------------------------------------------------
SHORT TERM INVESTMENTS: 3.68%
U.S. Treasury Obligations: 3.68%
$2,000,000 U.S. Treasury Bills 6.120%,
due 01/11/01 $ 1,975,860
------------
Total Short-Term Investments
(Cost $1,975,860) 1,975,860
------------
Total Investments in Securities
(Cost $67,843,725)* 94.47% $ 50,671,627
Other Assets and Liabilities-Net 5.53% 2,964,925
------ ------------
Net Assets 100.00% $ 53,636,552
====== ============
@ Non-income producing security
** Investment in France
ADR -- American Depository Receipt
GDR -- Global Depository Receipt
* Cost for federal income tax purposes is $74,107,970. Net unrealized
depreciation consists of:
Gross Unrealized Appreciation $ 2,101,176
Gross Unrealized Depreciation (25,537,519)
------------
Net Unrealized Depreciation $(23,436,343)
============
See Accompanying Notes to Financial Statements
127
<PAGE>
Pilgrim
Troika Dialog
Russia Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Percentage of
Industry Net Assets
-------- ----------
Aerospace/Defense 0.08%
Airlines 1.09%
Brewery 3.62%
Building Material 0.00%
Cellular Telecommunications 4.37%
Electric 8.56%
Food 0.00%
Gas Distribution 0.51%
Medical Equipment 0.02%
Mining 8.36%
Oil Companies-Exploration & Production 2.03%
Oil Comp-Integrated 41.14%
Oil & Gas Drilling 0.02%
Pipeline Oil Transportation 0.00%
Retail 0.69%
Russian Bond 3.45%
Steel Pipe and Tube Manufacturing 0.09%
Telecom Services 9.49%
Telephone-Integrated 3.71%
Telephone-Local 3.56%
Short-Term Investments 3.68%
Other Assets and Liabilities, Net 5.53%
------
NET ASSETS 100.00%
======
See Accompanying Notes to Financial Statements
128
<PAGE>
Pilgrim
Gold Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000
--------------------------------------------------------------------------------
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS: 81.66%
AUSTRALIA 4.99%
527,172 Newcrest Mining $1,038,387
2,002,539 Normandy Mining, Ltd. 965,355
----------
Total Australia 2,003,742
----------
CANADA 37.75%
443,000 Agnico Eagle Mines, Ltd. 2,353,438
130,000 Barrick Gold Corp. 1,738,750
700,000 @ Claude Resources, Inc. 210,802
136,500 Franco Nevada Mining, Ltd. 1,251,064
541,400 @ Goldcorp, Inc. 3,243,083
250,000 @ Great Basin Gold, Ltd. 270,049
523,600 @ Iamgold Corp. 925,512
470,000 @ Meridian Gold, Inc. 2,369,231
75,000 @ North Amern Palladium, Ltd. 466,448
285,500 Placer Dome, Inc. 2,319,688
----------
Total Canada 15,148,065
----------
SOUTH AFRICA 26.09%
71,749 Anglo American Platinum 2,799,100
33,749 Angloglold 959,577
477,900 Goldfields, Ltd. 1,422,002
200,000 Goldfields, Ltd. ADR 593,750
641,656 Harmony Gold Mining 2,448,097
52,460 Impala Platinum 2,247,780
----------
Total South Africa 10,470,306
----------
UNITED STATES 12.83%
177,600 @ Freeport McMoran Copper & Gold, Inc. 1,376,400
453,570 Homestake Mining Co. 1,870,976
140,170 Newmont Mining Corp. 1,901,056
----------
Total United States 5,148,432
----------
Total Common Stocks (Cost $45,190,181) 32,770,545
----------
WARRANTS: 0.00%
200,000 @ Claude Resources, Inc. (Expires 12/31/2010) --
----------
Total Warrants (Cost $0) --
----------
Shares/Ounces Value
--------------------------------------------------------------------------------
COMMODITIES: 6.29%
9,513 @ Gold Bullion 2,523,691
----------
Total Commodities (Cost $3,640,945) 2,523,691
----------
Total Long Term Investments (Cost $48,831,126) 35,294,236
----------
Principal Amount Value
--------------------------------------------------------------------------------
SHORT TERM INVESTMENTS: 11.08%
U.S. TREASURY BILLS: 11.08%
$4,500,000 United States Treasury Bills,
6.120%, Due 01/11/01
(Cost $4,445,685) $ 4,445,685
------------
Total Short-Term Investments
(Cost $4,445,685) 4,445,685
------------
Total Investments in Securities
(Cost $53,276,811)* 99.03% $ 39,739,921
Other Assets and Liabilities-Net 0.97% 390,053
------ ------------
Net Assets 100.00% $ 40,129,974
====== ============
@ Non-income producing security
ADR -- American Depository Receipt
* Cost for federal income tax purposes is $54,389,600. Net unrealized
depreciation consists of:
Gross Unrealized Appreciation $ 2,072,724
Gross Unrealized Depreciation (16,722,403)
------------
Net Unrealized Depreciation $(14,649,679)
============
See Accompanying Notes to Financial Statements
129
<PAGE>
Pilgrim
Gold Fund
PORTFOLIO OF INVESTMENTS as of October 31,2000 (Continued)
--------------------------------------------------------------------------------
Percentage of
Industry Net Assets
-------- ----------
Gold Bullion 6.29%
Gold Mining 64.49%
Metal-Diversified 3.43%
Platinum 13.74%
Short-Term Investments 11.08%
Other Assets and Liabilities, Net 0.97%
------
NET ASSETS 100.00%
======
See Accompanying Notes to Financial Statements
130
<PAGE>
Pilgrim
Silver Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000
--------------------------------------------------------------------------------
Shares Country/Issuer Value
--------------------------------------------------------------------------------
COMMON STOCKS: 63.19%
CANADA: 12.74%
213,000 @ Meridian Gold, Inc. $1,065,000
25,000 @ North American Palladium Ltd. 155,483
300,000 @ Silver Standard Resources, Inc. 324,059
50,000 @ Silver Standard Resources, Inc. 58,594
350,000 @ Tiomin Resources, Inc. 206,219
75,000 @ Western Copper Holdings Ltd. 63,830
----------
Total Canada 1,873,185
----------
IRELAND: 1.52%
375,000 @ Ivernia West 223,083
----------
Total Ireland 223,083
----------
MEXICO: 17.36%
645,000 @ Industrias Penoles SA 752,753
404,016 @ Nueva Grupo Mexico 1,343,551
290,056 @ Sanluis Corp. SA 454,990
----------
Total Mexico 2,551,294
----------
PERU: 6.94%
157,009 @ Buenaventura SA 1,019,017
----------
Total Peru 1,019,017
----------
POLAND: 3.73%
51,000 @ KGHM Polska Miedz SA GDR 548,250
----------
Total Poland 548,250
----------
UNITED KINGDOM: 3.99%
9,000 @ Rio Tinto Place ADR 586,125
----------
Total United Kingdom 586,125
----------
UNITED STATES: 16.91%
95,000 @ Apex Silver Mines Ltd. $ 866,874
250,600 @ Coeur D'alene Mines Corp. 250,600
99,000 @ Freeport-McMoran Copper & Gold, Inc. 773,438
143,500 @ Homestake Mining Co. 591,937
----------
Total United States 2,482,849
----------
Total Common Stocks (Cost $16,567,413) 9,283,803
----------
COMMODITIES: 8.38%
259,613 @ Silver Bullion 1,230,564
----------
Total Commodities (Cost $1,453,281) 1,230,564
----------
Total Long Term Investments (Cost $18,020,694) 10,514,367
----------
Principal Amount Value
--------------------------------------------------------------------------------
SHORT TERM INVESTMENTS: 23.54%
U.S. Treasury Bills: 23.54%
$3,500,000 U.S. Treasury Bills 6.120%,
due 01/11/01 (Cost $3,457,755) $ 3,457,755
------------
Total Short-Term Investments
(Cost $3,457,755) 3,457,755
------------
Total Investments in Securities
(Cost $21,478,449)* 95.11% $ 13,972,122
Other Assets and Liabilities-Net 4.89% 718,757
------ ------------
Net Assets 100.00% $ 14,690,879
====== ============
@ Non-income producing security
ADR -- American Depository Receipt
GDR -- Global Depository Receipt
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized depreciation consists of:
Gross Unrealized Appreciation $ 363,981
Gross Unrealized Depreciation (7,870,308)
------------
Net Unrealized Depreciation $ (7,506,327)
============
See Accompanying Notes to Financial Statements
131
<PAGE>
Pilgrim
Silver Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
Percentage of
Industry Net Assets
-------- ----------
Auto/Truck Parts & Equipment-Replacement 3.09%
Diversified Minerals 3.99%
Gold Mining 11.28%
Metal-Copper 0.43%
Metal-Diversified 5.14%
Other-Non-ferrous 21.05%
Platinum 1.06%
Precious Metals 1.71%
Silver Bullion 8.38%
Silver Mining 15.44%
Short-Term Investments 23.54%
Other Assets and Liabilities, Net 4.89%
------
NET ASSETS 100.00%
======
See Accompanying Notes to Financial Statements
132
<PAGE>
Pilgrim Global
Income Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000
--------------------------------------------------------------------------------
Principal Amount Value
--------------------------------------------------------------------------------
CORPORATE BONDS: 93.56%
DENMARK: 5.69%
3,365,000 Danskekredit, 6.000%, due 10/01/29 $ 360,310
4,573,000 Realkredit Danmark A/S, 6.000%, due 10/01/29 489,657
1,000 Unikredit Realkredit, 6.000%, due 10/01/29 107
----------
Total Denmark 850,074
----------
DOMINICAN REPUBLIC: 4.03%
200,000 Dominican Republic Bond, 5.750%, 08/30/24 132,000
500,000 Tricom SA, 11.375%, due 09/01/04 468,750
----------
Total Dominican 600,750
----------
GREECE: 9.26%
310,000,000 Hellenic Republic Government Bond, 12.000%,
due 02/12/03 803,935
200,000,000 Hellenic Republic Government Bond, 8.800%,
due 06/19/07 577,144
----------
Total Greece 1,381,079
----------
HUNGARY: 11.00%
300,000,000 Hungary Government Bond, 12.500%, due 09/24/02 990,867
200,000,000 Hungary Government Bond, 16.000, due 11/24/00 648,811
----------
Total Hungary 1,639,678
----------
PHILIPPINES: 6.36%
50,000,000 Philippine Government Bond, 18.000%, due 11/26/08 947,576
----------
Total Philippines
POLAND: 18.01%
4,500,000 Poland Government Bond, 12.000%, due 06/12/01 927,795
4,000,000 Poland Government Bond, 12.000%, due 02/12/03 768,751
5,000,000 Poland Treasury Bill 987,690
----------
Total Poland 2,684,236
----------
5,100,000 Eskom, Ltd., 11.000%, due 06/01/08 $ 580,053
2,000,000 South Africa Government Bond, 12.000%,
due 02/28/05 255,953
----------
Total South Africa 836,006
----------
UNITED STATES: 33.60%
548,064 ABN Amro Mortgage Corp., 6.708%, 04/25/28 302,928
300,000 Archibald Candy Corp., 10.250%, due 07/01/04 168,375
549,647 BA Mortgage Securities, Inc., 7.250%,
due 10/25/27 320,169
950,000 Clark Material Handling Corp., 10.750%, due
11/15/06 52,250
166,119 DLJ Mortgage Acceptance Corp., 7.250%, 09/25/11 120,229
906,646 Norwest Asset Securities Corp., 7.500%, 05/25/27 554,188
423,581 PNC Mortgage Securities Corp., 1999-1 Series 2b4
6.250%, due 02/25/14 320,863
141,193 PNC Mortgage Securities Corp., 1999-1 Series 2b5
6.250%, due 02/25/14 88,246
141,193 PNC Mortgage Securities Corp., 1999-1 Series 2b6
6.250%, due 02/25/14 28,415
1,260,119 PNC Mortgage Securities Corp., 1998-1 Series 1b6
6.500%, due 11/25/28 228,397
680,134 PNC Mortgage Securities Corp., 6.625%, due 03/25/28 340,067
256,548 PNC Mortgage Securities Corp., 1998-2 Series 4b6
6.750%, due 12/25/27 71,833
484,361 PNC Mortgage Securities Corp., 2000-4 Series Cb4
6.811%, due 06/25/30 350,556
605,451 PNC Mortgage Securities Corp., 2000-4 Series Cb5
6.811%, due 06/25/30 $328,457
605,451 PNC Mortgage Securities Corp., 2000-4 Series Cb6
6.811%, due 06/25/30 124,874
678,937 PNC Mortgage Securities Corp., 1997 Series Cmd
7.250%, due 09/25/12 388,691
272,093 Residential Asset Securitization Trust, 7.250%,
due 09/25/12 221,074
1,000,000 United States Treasury Note/Bond, 5.75%,
due 08/15/10 999,060
----------
Total United States 5,008,672
----------
Total Corporate Bonds (Cost $18,811,991) 13,948,071
----------
SHORT TERM INVESTMENTS: 1.99%
Government Obligations: 1.99%
$ 300,000 U.S. Treasury Bill, 6.080%, due 01/18/01 296,048
-----------
Total Short-Term Investments
(Cost $296,048) 296,048
-----------
Total Investments in Securities
(Cost $19,108,039)* 95.55% $14,244,119
Other Assets and Liabilities-Net 4.45% 662,924
------ -----------
Net Assets 100.00% $14,907,043
====== ===========
* Cost for federal income tax purposes is $19,108,170. Net unrealized
depreciation consists of:
Gross Unrealized Appreciation $ 622
Gross Unrealized Depreciation (4,864,673)
-----------
Net Unrealized Depreciation $(4,864,051)
===========
See Accompanying Notes to Financial Statements
133
<PAGE>
Pilgrim Global
Income Fund
PORTFOLIO OF INVESTMENTS as of October 31, 2000 (Continued)
--------------------------------------------------------------------------------
% Total
Industry Investments
-------- -----------
Foreign Governments & Agencies 51.11%
Financial Services 28.57%
Government & Agency 6.70%
Financial -- Miscellaneous 5.70%
Transportation 1.48%
Short-term Investments 1.99%
Other Assets and Liabilities, Net 4.45%
------
TOTAL BY INDUSTRY 100.00%
======
See Accompanying Notes to Financial Statements
134
<PAGE>
SHAREHOLDER MEETING (Unaudited)
--------------------------------------------------------------------------------
A special meeting of shareholders of the former Lexington Funds was held in
Saddle Brook, New Jersey on July 21, 2000. A brief description of each matter
voted upon as well as the results are outline below:
<TABLE>
<CAPTION>
Shares
Shares voted against Shares Broker
voted for or withheld abstained non-vote Total
--------- ------------- --------- -------- ----------
<S> <C> <C> <C> <C> <C>
1. To elect eleven (11) Directors or Trustees, as the case may be, to hold
office until the election and qualification of their successors: (a)
Al Burton 31,106,277 2,440,203 -- -- 33,546,480
Paul S. Doherty 31,133,530 2,412,950 -- -- 33,546,480
Robert B. Goode, Jr. 31,124,988 2,421,492 -- -- 33,546,480
Alan L. Gosule 31,152,538 2,393,942 -- -- 33,546,480
Walter H. May 31,151,129 2,395,351 -- -- 33,546,480
Jock Patton 31,149,524 2,396,956 -- -- 33,546,480
David W.C. Putnam 31,144,248 2,402,232 -- -- 33,546,480
John R. Smith 31,102,788 2,443,692 -- -- 33,546,480
Robert W. Stallings 31,160,104 2,386,376 -- -- 33,546,480
John G. Turner 31,156,146 2,390,334 -- -- 33,546,480
David W. Wallace 31,096,855 2,449,625 -- -- 33,546,480
2. To approve a new Investment Management Agreement between each Fund and
Pilgrim Investments, Inc. ("Pilgrim"), an indirect, wholly-owned subsidiary
of ReliaStar Financial Corp. ("ReliaStar"), to take effect upon the
completion of the proposed acquisition of Lexington Global Asset Managers,
Inc. by ReliaStar.
Lexington Global Corporate Leaders Fund, Inc. 1,219,941 25,630 35,074 -- 1,280,645
Lexington Global Technology Fund, Inc. (a) 1,125,427 6,521 981 -- 1,132,929
Lexington Goldfund, Inc. 9,536,260 863,506 711,559 -- 11,111,325
Lexington International Fund, Inc. 1,736,342 9,215 2,100 -- 1,747,657
Lexington Silver Fund, Inc. 4,146,057 174,069 266,322 -- 4,586,448
Lexington Small Cap Asia Growth Fund, Inc. 914,635 32,395 17,680 -- 964,710
Lexington Troika Dialog Russia Fund, Inc. 4,558,999 286,854 371,179 -- 5,217,032
Lexington Worldwide Emerging Markets Fund, Inc. 4,443,056 216,017 290,353 -- 4,949,426
Lexington Global Income Fund 2,494,958 32,717 28,729 -- 2,556,404
3. To approve a new Investment Management Agreement between each Fund and
Pilgrim to take effect upon the completion of the proposed acquisition of
ReliaStar by ING Groep N.V. ("ING").
Lexington Global Corporate Leaders Fund, Inc. 1,218,098 25,529 37,018 -- 1,280,645
Lexington Global Technology Fund, Inc. 1,125,427 6,521 981 -- 1,132,929
Lexington Goldfund, Inc. 9,502,997 881,062 727,266 -- 11,111,325
Lexington International Fund, Inc. 1,735,120 10,437 2,100 -- 1,747,657
Lexington Silver Fund, Inc. 3,997,000 319,938 269,510 -- 4,586,448
Lexington Small Cap Asia Growth Fund, Inc. 915,312 31,978 17,420 -- 964,710
Lexington Troika Dialog Russia Fund, Inc. 4,632,367 211,570 373,095 -- 5,217,032
Lexington Worldwide Emerging Markets Fund, Inc. 4,454,828 198,989 295,609 -- 4,949,426
Lexington Global Income Fund 2,494,750 32,717 28,937 -- 2,556,404
4.a. To approve a new Sub-Adviser Agreement between Pilgrim and Crosby Asset
Management (US) Inc., with no effective change in the fees from current
Sub-Adviser Agreement, to take effect upon the completion of the proposed
acquisition of Lexington Global Asset Managers, Inc. by ReliaStar:
Lexington Small Cap Asia Growth Fund, Inc. 915,051 32,240 17,419 -- 964,710
4.b. To approve a new Sub-Adviser Agreement between Pilgrim and Crosby Asset
Management (US) Inc., with no effective change in the fees from current
Sub-Adviser Agreement, to take effect upon the completion of the proposed
acquisition of ReliaStar by ING:
Lexington Small Cap Asia Growth Fund, Inc. 915,311 31,979 17,420 -- 964,710
5.a. To approve a new Sub-Adviser Agreement between Pilgrim and Insinger Asset
Management N.V., with no effective change in the fees from current
Sub-Adviser Agreement, to take effect upon the acquisition of certain
regulatory approvals and the completion of the proposed acquisition of
Lexington Global Asset Managers, Inc. by ReliaStar:
Lexington Small Cap Asia Growth Fund, Inc. 915,311 31,687 17,711 -- 964,709
</TABLE>
135
<PAGE>
SHAREHOLDER MEETING (Unaudited) Continued
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares
Shares voted against Shares Broker
voted for or withheld abstained non-vote Total
--------- ------------- --------- -------- ----------
<S> <C> <C> <C> <C> <C>
5.b. To approve a new Sub-Adviser Agreement between Pilgrim and Insinger Asset
Management N.V., with no effective change in the fees from current
Sub-Adviser Agreement, to take effect upon the acquisition of certain
regulatory approvals and the completion of the proposed acquisition of
ReliaStar by ING:
Lexington Small Cap Asia Growth Fund, Inc. 915,051 31,979 17,680 -- 964,710
6.a. To approve a new Sub-Adviser Agreement between Pilgrim and Troika Dialog
Asset Management (Cayman Islands) Ltc., with no effective change in the
fees from current Sub-Adviser Agreement, to take effect upon the completion
of the proposed acquisition of Lexington Global Asset Managers, Inc. by
ReliaStar:
Lexington Troika Dialog Russia Fund, Inc. 4,634,485 215,952 366,595 -- 5,217,032
6.b. To approve a new Sub-Adviser Agreement between Pilgrim and Troika Dialog
Asset Management (Cayman Islands) Ltc., with no effective change in the
fees from current Sub-Adviser Agreement, to take effect upon the completion
of the proposed acquisition of ReliaStar by ING:
Lexington Troika Dialog Russia Fund, Inc. 4,614,297 211,387 391,348 -- 5,217,032
7. To ratify the selection of KPMG LLP as each Fund's independent public
accountants for the fiscal year ending December 31, 2000:
Lexington Global Corporate Leaders Fund, Inc. 1,231,614 17,014 32,017 -- 1,280,645
Lexington Global Technology Fund, Inc. (a) 1,127,365 3,648 1,826 -- 1,132,839
Lexington Goldfund, Inc. 10,174,034 316,825 620,466 -- 11,111,325
Lexington International Fund, Inc. 1,737,672 9,041 944 -- 1,747,657
Lexington Silver Fund, Inc. 4,238,498 101,927 246,023 -- 4,586,448
Lexington Small Cap Asia Growth Fund, Inc. 925,312 21,979 17,419 -- 964,710
Lexington Troika Dialog Russia Fund, Inc. 4,753,485 107,280 356,267 -- 5,217,032
Lexington Worldwide Emerging Markets Fund, Inc. 4,586,591 113,578 249,257 -- 4,949,426
Lexington Global Income Fund 2,526,321 13,870 16,213 -- 2,556,404
8. To approve a new Service and Distribution Plan for each Fund which would
impose on each Fund a fee on an annualized basis of 0.25% of the average
daily net assets:
Lexington Global Corporate Leaders Fund, Inc. 1,162,690 27,430 36,034 54,491 1,280,645
Lexington Global Technology Fund, Inc. (a) 1,090,298 5,616 2,222 34,703 1,132,839
Lexington Goldfund, Inc. 7,834,170 851,202 771,516 1,654,437 11,111,325
Lexington International Fund, Inc. 1,690,303 11,644 2,100 43,610 1,747,657
Lexington Silver Fund, Inc. 3,079,659 229,820 280,764 996,205 4,586,448
Lexington Small Cap Asia Growth Fund, Inc. 754,360 33,151 17,419 159,780 964,710
Lexington Troika Dialog Russia Fund, Inc. (b) 3,569,893 355,195 402,983 897,242 5,225,313
Lexington Worldwide Emerging Markets Fund, Inc. 3,473,117 249,287 320,013 907,009 4,949,426
Lexington Global Income Fund 2,144,034 23,453 35,514 353,403 2,556,404
9. To approve Amended and Restated Articles of Incorporation for each of the
following Funds, each a Maryland corporation:
Lexington Global Corporate Leaders Fund, Inc. 1,167,060 23,681 35,413 54,491 1,280,645
Lexington Global Technology Fund, Inc. (a) 1,091,031 5,813 1,292 34,703 1,132,839
Lexington Goldfund, Inc. (c) 8,489,594 728,388 825,149 1,632,376 11,675,507
Lexington International Fund, Inc. 1,693,412 8,916 1,719 43,610 1,747,657
Lexington Silver Fund, Inc. (c) 3,247,675 202,781 284,698 979,932 4,715,086
Lexington Small Cap Asia Growth Fund, Inc. 763,483 24,027 17,420 159,780 964,710
Lexington Troika Dialog Russia Fund, Inc. (c) 3,695,817 296,281 391,927 874,197 5,258,222
Lexington Worldwide Emerging Markets Fund, Inc. (c) 3,749,363 215,444 359,735 869,508 5,194,050
10. To approve an Amended and Restated Declaration of Trust for Lexington
Global Income Fund, a Massachusetts business trust:
Lexington Global Income Fund 2,147,245 19,161 36,595 353,403 2,556,404
</TABLE>
----------
(a) The Special Meeting of Shareholders for Lexington Global Technology Fund,
Inc. was adjourned until July 31, 2000 to transact all business as set
forth in the Proxy Statement.
(b) The Special Meeting of Shareholders for Lexington Troika Dialog Russia
Fund, Inc. was adjourned until July 31, 2000 to permit the further
solicitation of shareholders for their proxies relating to this proposal.
(c) The Special Meeting of Shareholders for Lexington Goldfund, Inc., Lexington
Silver Fund, Inc., Lexington Troika Dialog Russia Fund, Inc. and Lexington
Worldwide Emerging Markets Fund, Inc. was adjourned until August 30, 2000
to permit the further solicitation of shareholders for their proxies
relating to this proposal.
136
<PAGE>
Pilgrim
Funds
--------------
TAX INFORMATION (Unaudited)
--------------------------------------------------------------------------------
Dividends paid during the period ended October 31, 2000 were as follows:
Fund Name Type Per Share Amount
--------- ---- ----------------
International Value Fund(1)
All Classes STCG $ 0.1570
All Classes LTCG $ 0.5303
--------
$ 0.6873
========
International Value Fund(1)
Class A NII $ 0.1134
Class B NII $ 0.0291
Class C NII $ 0.0358
Emerging Markets Value Fund(1)
All Classes STCG $ 0.2317
All Classes LTCG $ 0.2039
--------
$ 0.4356
========
Emerging Markets Value Fund(1)
Class A NII $ 0.1127
Class B NII $ 0.0390
Class C NII $ 0.0543
International Fund(2)
All Classes NII $ 0.8625
Gold Fund(2)
All Classes NII $ 0.0008
Silver Fund(2)
All Classes NII $ 0.0086
Global Income Fund(2)
Class A NII $ 0.1901
Class A ROC $ 0.1027
----------
(1) For the period ended October 31, 2000.
(2) For the period from January 1, 2000 to October 31, 2000.
NII -- Net investment income
STCG -- Short-term capital gain
LTCG -- Long-term capital gain
ROC -- Return of capital
The above figure may differ from those cited elsewhere in this report due to
differences in the calculation of income and gains for Securities and Exchange
Commissions (book) purposes and Internal Revenue Service (tax) purposes.
The foreign taxes paid or withheld per share, $14,581, $5,170,145, $39,256,
$49,532, $1,886,233, $94,237 and $11,503 in total and $0.01, $0.04, $0.01,
$0.04, $0.16, $0.01, and $0.01 per share for the Global Corporate Leaders,
International Value, International, Emerging Markets Value, Emerging Countries,
Worldwide Emerging Markets, and the SmallCap Asia Growth Funds, respectively,
represents taxes incurred by the funds from foreign sources. Foreign taxes paid
or withheld should be included in taxable income with an offsetting deduction
from gross income or as a credit for taxes paid to foreign governments. You
should consult your tax advisor regarding the appropriate treatment of foreign
taxes paid.
Shareholders are strongly advised to consult their own tax advisers with respect
to the tax consequences of their Investments in the Funds. In January 2001,
shareholders, excluding corporate shareholders, will receive an IRS Form 1099
DIV regarding the federal tax status of the dividends and distributions received
by them in calendar 2000.
137
<PAGE>
INVESTMENT MANAGER
ING Pilgrim Investments, Inc.
7337 E. Doubletree Ranch Road
Scottsdale, Arizona 85258
ADMINISTRATOR
ING Pilgrim Group, Inc.
7337 E. Doubletree Ranch Road
Scottsdale, Arizona 85258
TRANSFER AGENT
DST Systems, Inc.
P.O. Box 419368
Kansas City, Missouri 64141-6368
CUSTODIAN
Brown Brothers Harriman
40 Water Street
Boston, Massachusetts 02109-3661
LEGAL COUNSEL
Dechert
1775 Eye Street, N.W.
Washington, D.C. 20006
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1670 Broadway, Suite 1000
Denver, Colorado 80202
Prospectus containing more complete information regarding the Funds, including
charges and expenses, may be obtained by calling ING Pilgrim Securities, Inc.
Distributor at 1-800-334-3444. Please read the prospectus carefully before you
invest or send money.
INTLAN103100-122900
