The PBHG Funds, Inc.
- --------------------
PBHG
[LOGO OMITTED]
99
SEMI-ANNUAL REPORT
- ------------------
September 30, 1999
<PAGE>
THE PBHG FUNDS, INC.
PBHG GROWTH FUNDS
PBHG Growth Fund
PBHG Emerging Growth Fund
PBHG Large Cap Growth Fund
PBHG Select Equity Fund
PBHG Core Growth Fund
PBHG Limited Fund
PBHG Large Cap 20 Fund
PBHG New Opportunities Fund
PBHG VALUE FUNDS
PBHG Large Cap Value Fund
PBHG Mid-Cap Value Fund
PBHG Small Cap Value Fund
PBHG Focused Value Fund
PBHG SPECIALTY FUNDS
PBHG International Fund
PBHG Cash Reserves Fund
PBHG Technology & Communications Fund
PBHG Strategic Small Company Fund
1
<PAGE>
THE PBHG FUNDS, INC.
TABLE OF CONTENTS
- ---------------------------------------------------------------
Message to Shareholders 3
Portfolio Highlights and Statements of Net
Assets/Schedules of Investments
PBHG GROWTH FUNDS
- ---------------------------------------------------------------
PBHG Growth Fund 4
PBHG Emerging Growth Fund 8
PBHG Large Cap Growth Fund 12
PBHG Select Equity Fund 15
PBHG Core Growth Fund 17
PBHG Limited Fund 20
PBHG Large Cap 20 Fund 24
PBHG New Opportunities Fund 26
PBHG VALUE FUNDS
- ---------------------------------------------------------------
PBHG Large Cap Value Fund 29
PBHG Mid-Cap Value Fund 32
PBHG Small Cap Value Fund 36
PBHG Focused Value Fund 42
PBHG SPECIALTY FUNDS
- ---------------------------------------------------------------
PBHG International Fund 45
PBHG Cash Reserves Fund 48
PBHG Technology &
Communications Fund 50
PBHG Strategic Small
Company Fund 53
Statements of Assets and Liabilities 60
Statements of Operations 62
Statements of Changes in Net Assets 64
Financial Highlights 70
Notes to Financial Statements 73
2
<PAGE>
THE PBHG FUNDS, INC.
MESSAGE TO SHAREHOLDERS
DEAR FELLOW SHAREHOLDERS:
Encouraged by a steady stream of positive economic reports, all segments of the
domestic equity market produced good returns during the second quarter of 1999,
though small capitalization stocks soared above the rest. However, during the
third quarter of 1999, the stock market struggled to advance. Laboring under two
interest rate hikes, tight labor conditions, smoldering signs of inflation and
an expanding trade deficit, the market eventually lost its momentum. As a
result, for the six months ended September 30, 1999 the S&P 500 Index rose only
0.36% and the Russell 2000 Index rose 8.24%. From highs attained during the
third quarter, both of these indexes fell over 10%, the threshold amount for
labeling a market decline as a "correction".
Despite these difficult market conditions, we are extremely pleased to report
that most of our domestic equity mutual funds outperformed their respective
benchmarks for the six-month period. Our flagship PBHG Growth Fund rose 21.87%,
significantly outdistancing the 9.10% increase of the Russell 2000 Growth Index.
This recent performance is a powerful reminder, to ourselves and to our
shareholders, that when market sentiment shifts, it often happens dramatically
and without warning.
Our disciplined approach to growth investing clearly worked well across all
capitalizations, buoyed by our Funds' overweighted positions in the technology
sector. For the six months ended September 30, 1999, the PBHG Large Cap 20 Fund
increased 3.98%, comparing favorably to the 0.36% increase of the S&P 500 Index.
The PBHG Core Growth Fund rose 17.00%, well above the 4.89% return of the
Russell MidCap Growth Index. The PBHG New Opportunities Fund increased 67.09%,
dramatically above its benchmark, the Russell 2000 Growth Index. The micro-cap
PBHG Limited Fund's return of 28.20% also beat the Russell 2000 Growth Index by
a wide margin. We must also point out that though the PBHG Value Funds faced a
market that favored growth investors, the Funds turned in good performances
relative to their benchmarks over this six-month period. For example, the PBHG
Large Cap Value Fund rose 5.20% versus the S&P 500's return of 0.36% and the
PBHG Small Cap Value Fund rose 17.93% versus the Russell 2000 Index's return of
8.24%.
Often financial markets watch the Federal Reserve watching the financial
markets. As much as two years ago, some economists referred to the rising stock
market as a "speculative bubble." Last year, Federal Reserve Chairman Alan
Greenspan coined his now famous phrase - "irrational exuberance." But with
little more than passing consideration, the stock market continued to climb. And
the Federal Reserve continued to watch and worry. Last year, under the threat of
global recession, the Federal Reserve had little choice but to pump additional
liquidity into financial markets by lowering interest rates three times. This
year, with foreign economies strengthening and domestic corporate profits
soaring, the Federal Reserve had more room to move. With two rate increases,
Greenspan kept his promise that the Federal Reserve would "act promptly and
forcefully" at the first signs of an overheating economy and re-igniting
inflation. While the current inflation picture still looks relatively benign,
the Federal Reserve believes that strong domestic demand, a tight labor market
and rising core producer prices are possible threats to future price stability.
Financial markets are watching the Fed very closely now. Some economists are
beginning to replace the question about a speculative bubble with a
matter-of-fact reference to our "bubble economy."
Does the market's recent correction suggest that the bubble is about to burst?
Of course, we don't know. As easy as it might be to come to that conclusion now,
it was even easier to come to that conclusion this time last year, when we
experienced a temporary bear market. What we do know is that investors who were
fearful of a bursting speculative bubble two years ago or even last year missed
out on a significant part of this bull market.
Perhaps nothing lasts forever. Perhaps the United States economy's near-perfect
confluence of low inflation, low unemployment, rising corporate earnings,
relatively stable interest rates, strong consumer confidence and a rising stock
market can not last forever. Perhaps the Federal Reserve will raise interest
rates again, and the market will lose more momentum. Or perhaps the Federal
Reserve's two rate hikes were sufficient to stave off inflation and the market
will respond favorably again. Clearly, a successful long-term investor needs
equal amounts of discipline and patience.
We thank you for your continuing confidence in the PBHG Funds.
Sincerely,
[PHOTO OF HAROLD J. BAXTER OMITTED] [PHOTO OF GARY L. PILGRIM OMITTED]
/S/SIGNATURE /S/SIGNATURE
Harold J. Baxter Gary L. Pilgrim
CHAIRMAN PRESIDENT
THE PBHG FUNDS, INC. THE PBHG FUNDS, INC.
3
<PAGE>
THE PBHG FUNDS, INC.
PBHG GROWTH FUND (UNAUDITED)
PBHG GROWTH FUND
COMPARISON OF CHANGE IN THE VALUE OF A $10,000
INVESTMENT IN THE PBHG GROWTH FUND, PBHG CLASS,
VERSUS THE RUSSELL 2000 GROWTH INDEX
AND THE LIPPER MID-CAP GROWTH FUNDS AVERAGE
[LINE GRAPH OMITTED]
PBHG RUSSELL 2000 LIPPER MID-CAP
GROWTH FUND, GROWTH GROWTH FUNDS
PBHG CLASS INDEX5 AVERAGE6
12/31/85 $10000 $10000 $10000
1/31/86 10250 10228 10226
2/28/86 11080 10983 10985
3/31/86 11510 11482 11610
4/30/86 11640 11763 11839
5/31/86 12580 12194 12677
6/30/86 12680 12233 12944
7/31/86 11700 10918 11748
8/31/86 12380 11153 12271
9/30/86 11240 10245 11180
10/31/86 12193 10766 11915
11/30/86 12676 10718 12043
12/31/86 12394 10358 11758
1/31/87 14728 11691 13438
2/28/87 16509 12823 14735
3/31/87 16871 13175 14944
4/30/87 16911 12767 14783
5/31/87 17046 12677 14970
6/30/87 16508 12991 15077
7/31/87 16604 13302 15573
8/31/87 17548 13687 16261
9/30/87 17524 13413 15991
10/31/87 12898 8994 11597
11/30/87 11840 8399 10765
12/31/87 13832 9273 12212
1/31/88 13566 9454 12280
2/29/88 14814 10334 13242
3/31/88 14660 10888 13439
4/30/88 15011 11151 13674
5/31/88 14576 10783 13419
6/30/88 15684 11579 14400
7/31/88 14969 11363 13948
8/31/88 14099 10950 13405
9/30/88 14744 11260 13940
10/31/88 14449 11073 13725
11/30/88 14119 10642 13389
12/31/88 14780 11162 14002
1/31/89 15792 11638 14874
2/28/89 15553 11667 14794
3/31/89 15244 11991 15171
4/30/89 16467 12588 16180
5/31/89 18020 13191 17067
6/30/89 17004 12767 16569
7/31/89 18401 13365 17763
8/31/89 19177 13749 18378
9/30/89 19896 13907 18558
10/31/89 18852 13146 17760
11/30/89 18698 13263 18017
12/31/89 19109 13413 18223
1/31/90 17501 12029 16632
2/28/90 18537 12485 17149
3/31/90 19377 13057 17919
4/30/90 18948 12669 17493
5/31/90 21627 13799 19361
6/30/90 21823 13881 19516
7/31/90 20716 13250 18872
8/31/90 17984 11332 16583
9/30/90 15483 10259 15235
10/31/90 14787 9683 14826
11/30/90 16614 10574 16172
12/31/90 17266 11078 17013
1/31/91 19518 12118 18548
2/28/91 20782 13510 20067
3/31/91 22659 14462 21285
4/30/91 22284 14290 21019
5/31/91 23271 14980 22200
6/30/91 20664 13961 20820
7/31/91 22323 14593 22260
8/31/91 23449 15238 23209
9/30/91 23074 15467 23229
10/31/91 23745 16126 24038
11/30/91 22724 15285 23180
12/31/91 26179 16748 26362
1/31/92 27174 18064 26995
2/29/92 27447 18257 27367
3/31/92 25782 17207 25942
4/30/92 24862 16208 24847
5/31/92 24688 16171 24929
6/30/92 23544 15140 23822
7/31/92 23420 15615 24773
8/31/92 22649 15014 24123
9/30/92 23644 15433 24705
10/31/92 25061 16068 25733
11/30/92 28298 17568 27691
12/31/92 33612 18050 28555
1/31/93 33003 18274 29009
2/28/93 30891 17281 27625
3/31/93 34668 17726 28675
4/30/93 33868 17164 27792
5/31/93 37613 18193 29565
6/30/93 39822 18236 29920
7/31/93 40302 18418 30093
8/31/93 43375 19300 31748
9/30/93 47344 19938 32929
10/31/93 48145 20514 33318
11/30/93 46320 19684 32168
12/31/93 49312 20461 33564
1/31/94 51258 21006 34393
2/28/94 51777 20913 34249
3/31/94 47592 19629 32242
4/30/94 47884 19659 32190
5/31/94 45192 19218 31592
6/30/94 41591 18397 30097
7/31/94 42888 18659 30781
8/31/94 47657 20028 32981
9/30/94 49052 20112 33074
10/31/94 50577 20326 33901
11/30/94 49571 19504 32663
12/31/94 51654 19964 33317
1/31/95 49122 19557 33017
2/28/95 51849 20461 34489
3/31/95 54219 21058 35752
4/30/95 53667 21375 35916
5/31/95 54089 21655 36595
6/30/95 59998 23147 39456
7/31/95 67238 24951 42775
8/31/95 67141 25258 43425
9/30/95 70712 25779 44849
10/31/95 72660 24510 43957
11/30/95 75550 25591 45900
12/31/95 77660 26158 46171
1/31/96 74186 25942 46360
2/29/96 79673 27125 48520
3/31/96 82140 27662 49389
4/30/96 89056 29786 53429
5/31/96 93114 31314 55491
6/30/96 89348 29278 53072
7/31/96 80128 25704 47398
8/31/96 84218 27606 50427
9/30/96 91621 29027 54063
10/31/96 85192 27776 52322
11/30/96 87465 28548 53729
12/31/96 85290 29105 53343
1/31/97 85225 29832 55114
2/28/97 76102 28031 51630
3/31/97 68375 26052 48032
4/30/97 68667 25751 48061
5/31/97 77141 29621 53919
6/30/97 80420 30626 56221
7/31/97 85972 32195 60770
8/31/97 84153 33161 60594
9/30/97 90192 35808 65181
10/31/97 85160 33656 61719
11/30/97 82465 32855 60689
12/31/97 82433 32874 61174
1/31/98 80290 32436 60183
2/28/98 87757 35299 65546
3/31/98 91653 36780 68882
4/30/98 92010 37006 69502
5/31/98 83569 34317 65575
6/30/98 88212 34668 68703
7/31/98 80095 31773 64883
8/31/98 60388 24439 51556
9/30/98 65063 26917 55299
10/31/98 66524 28320 57810
11/30/98 72530 30517 62440
12/31/98 82920 33279 70189
1/31/99 84705 34776 73017
2/28/99 76167 31595 67819
3/31/99 79576 32720 72864
4/30/99 76069 35610 75750
5/31/99 78764 35666 75538
6/30/99 88764 37545 81618
7/31/99 87530 36384 80394
8/31/99 89803 35023 80378
9/30/99 96976 35695 82087
1 Performance is historical and not indicative of future results. The
investment return and principal value of an investment will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
2 The six month returns have not been annualized.
3 The PBHG Growth Fund-PBHG Class commenced operations on December 19, 1985.
4 The performance shown for the Advisor Class (formerly known as the Trust
Class) prior to its inception on August 16, 1996, is based on the
performance and expenses of the PBHG Class. Subsequent to August 16, 1996,
the performance is that of the Advisor Class and reflects the expenses
specific to the Advisor Class, which will cause its returns to be less than
those of the PBHG Class. The average annual total return of the PBHG
Advisor Class from its inception date to September 30, 1999 was 5.04%.
5 The Russell 2000 Growth Index is an unmanaged index comprised of those
securities in the Russell 2000 Index with a greater-than-average growth
orientation. The Index reflects the reinvestment of income dividends and
capital gains distributions, if any, but does not reflect fees, brokerage
commissions, or other expenses of investing. The Index is not intended to
imply the Fund's past or future performance.
6 The Lipper Mid-Cap Growth Funds Average represents the average performance
of all mutual funds classified by Lipper, Inc. in the Mid-Cap Growth
category. These performance figures are based on the changes in net asset
value of the funds in the category with all capital gains distributions and
income dividends reinvested. The index is not intended to imply the Fund's
past or future performance.
Average Annual Total Return1
As of September 30, 1999
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Annualized Annualized Annualized Annualized
6 One Year 3 Year 5 Year 10 Year Inception
Months2 Return Return Return Return to Date
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PBHG Growth Fund-
PBHG Class3 21.87% 49.05% 1.91% 14.60% 17.16% 17.91%
- ----------------------------------------------------------------------------------------
PBHG Growth Fund-
Advisor Class4 21.72% 48.65% 1.66% 14.43% 17.07% 17.85%
- ----------------------------------------------------------------------------------------
</TABLE>
Sector Weightings
at September 30, 1999
[PIE CHART OMITTED]
Consumer Cyclical (12%)
Consumer Non-Cyclical (1%)
Health Care (13%)
Industrial (8%)
Services (17%)
Technology (49%)
% of Total Portfolio Investments
4
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG GROWTH FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
COMMON STOCK -- 99.1%
CONSUMER CYCLICAL -- 11.8%
APPAREL MANUFACTURERS -- 0.0%
Tommy Hilfiger* 31,600 $ 891
-------------
891
- ----------------------------------------------------------------
AUDIO/VIDEO PRODUCTS -- 4.3%
Gemstar International* 1,099,200 85,875
Polycom* 743,000 35,409
-------------
121,284
- ----------------------------------------------------------------
BROADCAST SERVICE/PROGRAMMING -- 0.1%
TiVo* 45,000 1,347
-------------
1,347
- ----------------------------------------------------------------
MOTION PICTURES & SERVICES -- 0.8%
Macrovision* 211,400 9,381
Zomax* 497,600 12,875
-------------
22,256
- ----------------------------------------------------------------
PRINTING-COMMERCIAL -- 0.5%
Consolidated Graphics* 351,900 14,824
-------------
14,824
- ----------------------------------------------------------------
RADIO -- 0.5%
Hispanic Broadcasting* 170,900 13,010
-------------
13,010
- ----------------------------------------------------------------
RETAIL-APPAREL/SHOE -- 1.2%
American Eagle Outfitters* 630,700 30,550
Urban Outfitters* 186,100 4,117
-------------
34,667
- ----------------------------------------------------------------
RETAIL-AUTO PARTS -- 0.9%
O'Reilly Automotive* 531,700 25,339
-------------
25,339
- ----------------------------------------------------------------
RETAIL-BEDDING -- 1.2%
Linens `N Things* 992,900 33,510
-------------
33,510
- ----------------------------------------------------------------
RETAIL-DISCOUNT -- 1.2%
Dollar Tree Stores* 811,300 32,401
-------------
32,401
- ----------------------------------------------------------------
RETAIL-HOME FURNISHINGS -- 0.2%
Cost Plus* 131,200 6,363
-------------
6,363
- ----------------------------------------------------------------
RETAIL-VARIETY STORE -- 0.7%
99 Cents Only Stores* 520,900 18,818
-------------
18,818
- ----------------------------------------------------------------
TELEVISION -- 0.2%
Acme Communications* 192,000 5,952
-------------
5,952
-------------
TOTAL CONSUMER CYCLICAL (COST $195,674) 330,662
-------------
- ----------------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------------
CONSUMER NON-CYCLICAL -- 0.9%
FOOD-MISCELLANEOUS/DIVERSIFIED -- 0.9%
American Italian Pasta* 831,000 $ 23,787
-------------
23,787
-------------
TOTAL CONSUMER NON-CYCLICAL (COST $25,991) 23,787
- ----------------------------------------------------------------
HEALTH CARE -- 13.4%
DIALYSIS CENTERS -- 1.1%
Renal Care Group* 1,401,000 30,691
-------------
30,691
- ----------------------------------------------------------------
DRUG DELIVERY SYSTEMS -- 0.4%
Andrx* 168,400 9,857
-------------
9,857
- ----------------------------------------------------------------
HEALTH CARE COST CONTAINMENT -- 1.9%
Medical Manager* 214,687 10,681
Medquist 1,258,900 42,094
-------------
52,775
- ----------------------------------------------------------------
MEDICAL INFORMATION SYSTEMS -- 1.8%
Dendrite International* 941,700 44,495
Infocure* 374,200 7,063
-------------
51,558
- ----------------------------------------------------------------
MEDICAL PRODUCTS -- 2.5%
Minimed* 721,000 70,838
-------------
70,838
- ----------------------------------------------------------------
MEDICAL-DRUGS -- 1.1%
King Pharmaceuticals* 876,100 30,663
-------------
30,663
- ----------------------------------------------------------------
MEDICAL-OUTPATIENT/HOME MEDICAL -- 0.9%
Res-Care*+ 1,402,050 23,835
-------------
23,835
- ----------------------------------------------------------------
PHARMACY SERVICES -- 3.0%
Advance Paradigm* 218,000 11,936
Express Scripts, Cl A* 931,900 72,921
-------------
84,857
- ----------------------------------------------------------------
RESPIRATORY PRODUCTS -- 0.7%
Resmed* 582,200 19,249
-------------
19,249
-------------
TOTAL HEALTH CARE (COST $252,397) 374,323
- ----------------------------------------------------------------
INDUSTRIAL -- 8.1%
BUILDING & CONSTRUCTION PRODUCTS-MISCELLANEOUS -- 0.4%
Dycom Industries* 245,000 10,336
-------------
10,336
- ----------------------------------------------------------------
ELECTRONIC COMPONENTS-MISCELLANEOUS-- 4.0%
Flextronics International* 1,272,400 74,038
Gentex Corp 1,747,600 36,099
-------------
110,137
- ----------------------------------------------------------------
5
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG GROWTH FUND
Market
Description Shares Value (000)
- ---------------------------------------------------------------
INSTRUMENTS-CONTROLS -- 2.3%
Microchip Technology* 1,262,300 $ 64,850
-------------
64,850
- ---------------------------------------------------------------
INSTRUMENTS-SCIENTIFIC -- 1.4%
Waters* 663,102 40,159
-------------
40,159
-------------
TOTAL INDUSTRIAL (COST $113,094) 225,482
-------------
- ---------------------------------------------------------------
SERVICES -- 16.5%
ADVERTISING SALES -- 2.9%
Lamar Advertising* 1,611,400 79,764
-------------
79,764
- ---------------------------------------------------------------
COMMERCIAL SERVICES -- 1.8%
Lason* 684,100 30,464
Pre-Paid Legal* 530,300 20,880
-------------
51,344
- ---------------------------------------------------------------
COMMERCIAL SERVICES-FINANCE -- 3.1%
Century Business Services* 1,041,300 12,105
NCO Group* 591,800 27,815
Profit Recovery Group* 1,079,850 48,188
-------------
88,108
- ---------------------------------------------------------------
COMPUTER SERVICES -- 2.2%
Sapient* 185,200 17,455
Whittman-Hart* 1,129,000 43,784
-------------
61,239
- ---------------------------------------------------------------
CONSULTING SERVICES -- 3.8%
Navigant Consulting* 1,343,550 62,307
USWeb* 1,276,700 43,807
-------------
106,114
- ---------------------------------------------------------------
RENTAL AUTO/EQUIPMENT -- 1.3%
United Rentals* 1,639,800 35,666
-------------
35,666
- ---------------------------------------------------------------
SCHOOLS -- 1.4%
Devry* 1,464,100 29,282
Sylvan Learning Systems* 542,800 10,517
- ---------------------------------------------------------------
39,799
-------------
TOTAL SERVICES (COST $346,988) 462,034
-------------
- ---------------------------------------------------------------
TECHNOLOGY -- 48.4%
APPLICATIONS SOFTWARE -- 8.5%
BEA Systems* 713,000 25,178
Broadvision* 410,700 54,649
Citrix Systems* 870,200 53,898
Great Plains Software* 358,300 18,452
Quest Software* 247,000 11,485
Siebel Systems* 1,093,100 72,828
-------------
236,490
- ---------------------------------------------------------------
Market
Description Shares Value (000
- ---------------------------------------------------------------
CIRCUITS -- 1.5%
Micrel* 998,200 $ 43,297
-------------
43,297
- ---------------------------------------------------------------
COMMUNICATIONS SOFTWARE -- 0.4%
Research in Motion* 366,200 11,329
-------------
11,329
- ---------------------------------------------------------------
COMPUTER DATA SECURITY -- 2.8%
Check Point Software* 913,000 77,091
-------------
77,091
- ---------------------------------------------------------------
COMPUTER SOFTWARE -- 5.3%
Bindview Development* 566,600 11,155
Informatica* 137,500 6,978
Mercury Interactive* 441,500 28,504
Micromuse*+ 878,300 56,431
Microstrategy*+ 784,800 43,998
-------------
147,066
- ---------------------------------------------------------------
COMPUTERS-INTEGRATED SYSTEMS -- 0.3%
Henry (Jack) & Associates* 199,100 7,354
-------------
7,354
- ---------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 1.3%
Advanced Digital Information* 200,600 5,579
MTI Technology* 531,100 12,248
Sandisk* 288,500 18,807
-------------
36,634
- ---------------------------------------------------------------
DATA PROCESSING/MANAGEMENT -- 0.7%
Fundtech Limited* 377,400 8,421
TSI International Software Limited* 398,100 10,798
-------------
19,219
- ---------------------------------------------------------------
EDUCATIONAL SOFTWARE -- 1.7%
Advantage Learning Systems* 666,200 12,408
CBT Group PLC ADR* 1,473,400 36,282
-------------
48,690
- ---------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS-- 8.4%
Applied Micro Circuits* 1,392,000 79,344
Hi / fn* 153,900 16,967
MIPS Technologies* 440,100 14,001
QLogic* 684,100 47,759
SDL* 492,300 37,569
Transwitch* 704,600 40,162
-------------
235,802
- ---------------------------------------------------------------
FIBER OPTICS -- 2.7%
E-Tek Dynamics* 772,400 41,903
Harmonic* 259,300 33,920
-------------
75,823
- ---------------------------------------------------------------
INTERNET CONTENT -- 2.2%
Infospace.com* 602,900 24,794
Network Solutions* 396,700 36,447
-------------
61,241
- ---------------------------------------------------------------
6
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG GROWTH FUND
Shares/Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------------
INTERNET SOFTWARE -- 1.2%
Internap Network Service* 80,600 $ 3,597
Lycos* 234,000 11,729
Mindspring Enterprise* 221,200 6,124
Radware Limited* 45,000 1,238
Vignette* 123,100 11,141
------------
33,829
- ----------------------------------------------------------------
NETWORKING PRODUCTS -- 2.3%
Foundry Networks* 59,200 7,459
International Network Services* 496,900 27,019
Visual Networks* 716,500 30,407
------------
64,885
- ----------------------------------------------------------------
PRINTERS & RELATED PRODUCTS -- 1.2%
Electronics For Imaging* 674,800 34,689
------------
34,689
- ----------------------------------------------------------------
SATELLITE TELECOMMUNICATIONS -- 2.0%
Gilat Satellite* 1,023,400 54,880
------------
54,880
- ----------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT -- 2.2%
Audiocodes Limited* 114,300 4,301
Ditech Communications* 245,000 12,862
Excel Switching* 1,258,000 45,131
------------
62,294
- ----------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 0.9%
Copper Mountain Networks* 179,400 15,720
Inet Technologies* 270,000 10,775
------------
26,495
- ----------------------------------------------------------------
WIRELESS EQUIPMENT -- 2.8%
RF Micro Devices* 1,700,900 77,816
------------
77,816
------------
TOTAL TECHNOLOGY (COST $672,550) 1,354,924
------------
TOTAL COMMON STOCK (COST $1,606,694) 2,771,212
------------
- ----------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.0%
Morgan Treasury
5.00%, dated 09/30/99,
matures 10/01/99, repurchase price
$552,241 (collateralized by U.S.
Government Agency Instruments:
total market value $565,053) (A) $552 552
------------
TOTAL REPURCHASE AGREEMENT (COST $552) 552
------------
TOTAL INVESTMENTS-- 99.1% (COST $1,607,246) 2,771,764
------------
- ----------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- 0.9%
TOTAL OTHER ASSETS AND LIABILITIES, NET 24,188
------------
- ----------------------------------------------------------------
Market
Description Value (000)
- ----------------------------------------------------------------
NET ASSETS:
Fund Shares of Pbhg Class (authorized 400 million
shares -- $0.001 par value) based on 91,167,014
outstanding shares of common stock $1,430,639
Fund Shares of Advisor Class (authorized 200 million
shares -- $0.001 par value) based on 2,462,127
outstanding shares of common stock 57,861
Accumulated net investment loss (15,129)
Accumulated realized gain on investments 158,063
Net unrealized appreciation on investments 1,164,518
------------
TOTAL NET ASSETS-- 100.0% $2,795,952
------------
------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE-- PBHG CLASS $29.87
------------
------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE-- ADVISOR CLASS $29.63
------------
------------
* Non-income producing security
(A) -- Tri-party repurchase agreement
Cl -- Class
+ -- Considered an affiliated company as the Fund owns more than 5% of the
outstanding voting securities of such company. The total market value of
investments in affiliated companies as of September 30, 1999 was
$124,263,475.
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
THE PBHG FUNDS, INC.
PBHG EMERGING GROWTH FUND (UNAUDITED)
PBHG EMERGING GROWTH FUND
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE PBHG
EMERGING GROWTH FUND, VERSUS THE RUSSELL 2000 GROWTH INDEX
AND THE LIPPER SMALL-CAP GROWTH FUNDS AVERAGE
[LINE GRAPH OMITTED]
PBHG RUSSELL LIPPER SMALL-CAP
EMERGING 2000 GROWTH FUNDS
GROWTH FUND GROWTH INDEX4 AVERAGE5
6/30/93 $10000 $10000 $10000
7/31/93 10198 10100 10055
8/31/93 11304 10583 10597
9/30/93 12500 10933 11034
10/31/93 13063 11249 11191
11/30/93 12332 10794 10754
12/31/93 13100 11220 11259
1/31/94 13636 11519 11564
2/28/94 14075 11468 11577
3/31/94 13100 10764 10873
4/30/94 13261 10780 10844
5/31/94 12854 10539 10579
6/30/94 12008 10088 10036
7/31/94 12372 10232 10219
8/31/94 13689 10983 10929
9/30/94 14621 11029 11046
10/31/94 15628 11146 11293
11/30/94 15435 10695 10901
12/31/94 16216 10947 11167
1/31/95 15518 10724 10978
2/28/95 16130 11220 11448
3/31/95 17290 11548 11842
4/30/95 17666 11721 11939
5/31/95 17762 11875 12069
6/30/95 19384 12693 13006
7/31/95 21328 13682 14176
8/31/95 21575 13851 14370
9/30/95 22359 14136 14821
10/31/95 21682 13441 14350
11/30/95 22982 14033 14953
12/31/95 24072 14344 15228
1/31/96 23498 14226 15076
2/29/96 24838 14874 15905
3/31/96 25963 15169 16412
4/30/96 29722 16334 18001
5/31/96 31084 17171 18941
6/30/96 29159 16055 18020
7/31/96 25142 14095 16169
8/31/96 27122 15138 17342
9/30/96 29643 15918 18439
10/31/96 28068 15231 17765
11/30/96 28011 15655 18097
12/31/96 28184 15960 18299
1/31/97 28475 16359 18729
2/28/97 24311 15371 17469
3/31/97 22403 14286 16248
4/30/97 21345 14121 15983
5/31/97 25567 16243 18299
6/30/97 27033 16794 19371
7/31/97 27882 17655 20601
8/31/97 28184 18184 21013
9/30/97 30918 19636 22772
10/31/97 28347 18455 21574
11/30/97 27289 18016 21117
12/31/97 27149 18027 21191
1/31/98 26823 17787 20892
2/28/98 28766 19357 22653
3/31/98 30045 20169 23768
4/30/98 30255 20293 23958
5/31/98 27568 18818 22310
6/30/98 28417 19011 22852
7/31/98 26009 17423 21181
8/31/98 21147 13401 16500
9/30/98 23020 14760 17825
10/31/98 22740 15530 18629
11/30/98 24532 16735 20229
12/31/98 27964 18249 22402
1/31/99 28058 19070 22960
2/28/99 24800 17326 20896
3/31/99 24064 17943 21844
4/30/99 23481 19527 22838
5/31/99 24496 19558 23062
6/30/99 27252 20588 25154
7/31/99 26610 19952 25091
8/31/99 26353 19206 24732
9/30/99 28442 19524 24633
1 Performance is historical and not indicative of future results. The
investment return and principal value of an investment will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
2 The six month return has not been annualized.
3 The PBHG Emerging Growth Fund commenced operations on June 14, 1993.
4 The Russell 2000 Growth Index is an unmanaged index comprised of those
securities in the Russell 2000 Index with a greater-than-average growth
orientation. The Index reflects the reinvestment of income dividends and
capital gains distributions, if any, but does not reflect fees, brokerage
commissions, or other expenses of investing. The Index is not intended to
imply the Fund's past or future performance.
5 The Lipper Small-Cap Growth Funds Average represents the average
performance of all mutual funds classified by Lipper, Inc. in the Small-Cap
Growth category. These performance figures are based on the changes in net
asset value of the funds in the category with all capital gains
distributions and income dividends reinvested. The index is not intended to
imply the Fund's past or future performance.
Average Annual Total Return1
As of September 30, 1999
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
Annualized Annualized Annualized
6 One Year 3 Year 5 Year Inception
Months2 Return Return Return to Date3
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PBHG Emerging Growth Fund 18.20% 23.56% -1.37% 14.23% 18.28%
- -----------------------------------------------------------------------------------------
</TABLE>
Sector Weightings
at September 30, 1999
[PIE CHART OMITTED]
Consumer Cyclical (14%)
Consumer Non-Cyclical (2%)
Energy (1%)
Health Care (13%)
Industrial (5%)
Services (13%)
Technology (46%)
Cash (6%)
% of Total Portfolio Investments
8
<PAGE>
THE PBHG FUNDS, INC.
SCHEDULE OF INVESTMENTS
------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG EMERGING GROWTH FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
COMMON STOCK -- 87.3%
CONSUMER CYCLICAL -- 12.5%
ATHLETIC FOOTWEAR -- 0.2%
Saucony, Cl B* 76,600 $ 1,206
----------
1,206
- ----------------------------------------------------------------
AUDIO/VIDEO PRODUCTS -- 2.0%
Polycom* 307,700 14,664
----------
14,664
- ----------------------------------------------------------------
PRINTING-COMMERCIAL -- 2.0%
Consolidated Graphics* 352,300 14,841
----------
14,841
- ----------------------------------------------------------------
RADIO -- 0.9%
Citadel Communications* 190,900 6,514
----------
6,514
- ----------------------------------------------------------------
RETAIL-APPAREL/SHOE -- 3.6%
Ann Taylor Stores* 303,000 12,385
Bebe Stores* 62,500 1,508
Chicos* 55,300 1,507
Hot Topic* 155,000 4,224
Pacific Sunwear of California* 175,600 4,922
Urban Outfitters* 64,200 1,420
----------
25,966
- ----------------------------------------------------------------
RETAIL-COMPUTER EQUIPMENT -- 1.9%
Electronics Boutique Holdings* 526,100 13,547
----------
13,547
- ----------------------------------------------------------------
RETAIL-MAIL ORDER -- 0.2%
J. Jill Group* 351,250 1,646
----------
1,646
- ----------------------------------------------------------------
RETAIL-MISCELLANEOUS/DIVERSIFIED -- 1.2%
Cheap Tickets* 263,400 8,528
----------
8,528
- ----------------------------------------------------------------
RETAIL-RESTAURANTS -- 0.5%
PJ America* 23,900 499
Rubio's Restaurants* 34,500 298
Taco Cabana, Cl A* 295,500 2,863
----------
3,660
----------
TOTAL CONSUMER CYCLICAL (COST $79,802) 90,572
----------
- ----------------------------------------------------------------
CONSUMER NON-CYCLICAL -- 1.3%
CONSUMER PRODUCTS-MISCELLANEOUS -- 1.3%
Fossil* 351,600 9,515
----------
9,515
----------
TOTAL CONSUMER NON-CYCLICAL (COST $7,264) 9,515
- ----------------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------------
ENERGY -- 1.1%
OIL & GAS DRILLING -- 0.1%
Atwood Oceanic* 26,100 $ 798
----------
798
- ----------------------------------------------------------------
OIL FIELD MACHINERY & EQUIPMENT -- 0.5%
Varco International* 325,600 3,968
----------
3,968
- ----------------------------------------------------------------
OIL-FIELD SERVICES -- 0.5%
BJ Services* 108,600 3,455
- ----------------------------------------------------------------
3,455
----------
TOTAL ENERGY (COST $5,940) 8,221
----------
- ----------------------------------------------------------------
HEALTH CARE -- 12.1%
HEALTH CARE COST CONTAINMENT -- 1.2%
American Dental Partners*+ 425,200 5,156
Medquist* 115,500 3,861
----------
9,017
- ----------------------------------------------------------------
MEDICAL INFORMATION SYSTEMS -- 1.7%
Dendrite International* 234,600 11,085
Infocure* 50,000 944
----------
12,029
- ----------------------------------------------------------------
MEDICAL LABS & TESTING SERVICES -- 1.0%
Impath* 238,900 6,958
----------
6,958
- ----------------------------------------------------------------
MEDICAL LASER SYSTEMS -- 1.0%
Laser Vision Centers* 279,000 3,915
Summit Technology* 161,800 2,963
----------
6,878
- ----------------------------------------------------------------
MEDICAL PRODUCTS -- 2.4%
Minimed* 182,300 17,911
----------
17,911
- ----------------------------------------------------------------
MEDICAL-DRUGS -- 0.8%
Medicis Pharmaceutical, Cl A* 189,250 5,394
----------
5,394
- ----------------------------------------------------------------
PHARMACY SERVICES -- 2.3%
Advanced Paradigm* 303,700 16,627
----------
16,627
- ----------------------------------------------------------------
RESPIRATORY PRODUCTS -- 1.7%
Resmed* 380,000 12,564
- ----------------------------------------------------------------
12,564
----------
TOTAL HEALTH CARE (COST $60,497) 87,378
----------
- ----------------------------------------------------------------
INDUSTRIAL -- 4.9%
ELECTRONIC COMPONENTS-MISCELLANEOUS-- 1.7%
Sawtek* 348,500 12,198
----------
12,198
- ----------------------------------------------------------------
9
<PAGE>
THE PBHG FUNDS, INC.
SCHEDULE OF INVESTMENTS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG EMERGING GROWTH FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
ENVIRONMENTAL CONSULTING & ENGINEERING -- 0.2%
Tetra Tech* 86,987 $ 1,452
----------
1,452
- ----------------------------------------------------------------
INDUSTRIAL AUTOMATION/ROBOTICS -- 0.5%
PRI Automation* 104,200 3,764
----------
3,764
- ----------------------------------------------------------------
MACHINERY-GENERAL INDUSTRIAL -- 1.5%
Advanced Energy Industries* 350,300 10,815
----------
10,815
- ----------------------------------------------------------------
POWER CONSERVATION/SUPPLY EQUIPMENT-- 1.0%
Power-One* 287,800 7,339
----------
7,339
----------
TOTAL INDUSTRIAL (COST $26,044) 35,568
----------
- ----------------------------------------------------------------
SERVICES -- 12.4%
ADVERTISING SERVICES -- 1.6%
Getty Images* 492,000 11,870
----------
11,870
- ----------------------------------------------------------------
COMMERCIAL SERVICES -- 0.9%
Cunningham Graphics International* 139,000 1,720
Luminant Worldwide* 161,500 4,966
----------
6,686
- ----------------------------------------------------------------
COMPUTER SERVICES -- 5.7%
Factset Research Systems 224,750 12,783
Mecon* 88,000 561
Sapient* 60,300 5,683
Whittman-Hart* 570,000 22,105
----------
41,132
- ----------------------------------------------------------------
CONSULTING SERVICES -- 2.8%
Diamond Technology Partners* 339,300 15,226
USWeb* 144,300 4,951
----------
20,177
- ----------------------------------------------------------------
RENTAL AUTO/EQUIPMENT -- 1.4%
United Rentals* 451,000 9,809
----------
9,809
----------
TOTAL SERVICES (COST $61,487) 89,674
----------
- ----------------------------------------------------------------
TECHNOLOGY -- 43.0%
APPLICATIONS SOFTWARE -- 8.6%
Clarify* 366,300 18,430
Exchange Applications* 146,300 4,252
Great Plains Software* 62,200 3,203
Made2manage Systems* 12,100 98
Peregrine Systems* 505,700 20,607
Quest Software* 80,200 3,729
Rational Software* 396,800 11,619
----------
61,938
- ----------------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------------
CIRCUITS -- 1.5%
Micrel* 214,600 $ 9,308
Power Integrations* 26,000 1,801
----------
11,109
- ----------------------------------------------------------------
COMMUNICATIONS SOFTWARE -- 1.8%
AVT* 423,900 12,982
----------
12,982
- ----------------------------------------------------------------
COMPUTER GRAPHICS -- 0.4%
Nvidia* 155,000 2,984
----------
2,984
- ----------------------------------------------------------------
COMPUTER SOFTWARE -- 8.5%
Actuate* 199,500 6,758
Advent Software* 319,850 19,911
Business Objects ADR* 259,000 15,281
Macromedia* 210,600 8,608
Micromuse* 69,000 4,433
Netiq* 18,200 539
Verity* 89,500 6,159
----------
61,689
- ----------------------------------------------------------------
COMPUTERS-INTEGRATED SYSTEMS -- 0.3%
Mercury Computer Systems* 51,000 1,734
----------
1,734
- ----------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 0.2%
MTI Technology* 52,400 1,209
----------
1,209
- ----------------------------------------------------------------
COMPUTERS-PERIPHERAL EQUIPMENT -- 1.0%
In Focus Systems* 433,700 7,265
----------
7,265
- ----------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS-- 8.7%
ATMI* 315,200 11,761
Cree Research* 201,500 6,838
Electroglas* 367,800 8,597
ESS Technology* 374,400 4,961
Galileo Technology* 539,400 13,485
PLX Technology* 10,000 241
QLogic* 40,000 2,793
Transwitch* 158,250 9,020
Triquint Semiconductor* 96,550 5,522
----------
63,218
- ----------------------------------------------------------------
FIBER OPTICS -- 0.9%
Harmonic* 50,500 6,606
----------
6,606
- ----------------------------------------------------------------
INTERNET SOFTWARE -- 0.1%
Vignette* 10,500 950
----------
950
- ----------------------------------------------------------------
NETWORK SOFTWARE -- 1.8%
Legato Systems* 300,100 13,082
----------
13,082
- ----------------------------------------------------------------
10
<PAGE>
THE PBHG FUNDS, INC.
SCHEDULE OF INVESTMENTS
------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG EMERGING GROWTH FUND
Shares/Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------------
NETWORKING PRODUCTS -- 1.9%
Emulex* 109,800 $ 9,429
Visual Networks* 91,800 3,896
----------
13,325
- ----------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT -- 1.7%
Advanced Fibre Communication* 139,300 3,099
Audiocodes Limited* 27,000 1,016
Ditech Communications* 157,500 8,269
----------
12,384
- ----------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 2.8%
Inet Technologies* 23,000 918
Latitude Communications* 279,900 8,169
Lightbridge* 426,300 8,393
MRV Communications* 97,900 2,319
----------
19,799
- ----------------------------------------------------------------
WIRELESS EQUIPMENT -- 2.8%
Powerwave Technologies* 191,000 9,210
Proxim* 47,700 2,194
RF Micro Devices* 199,200 9,113
----------
20,517
----------
TOTAL TECHNOLOGY (COST $199,417) 310,791
----------
TOTAL COMMON STOCK (COST $440,451) 631,719
----------
- ----------------------------------------------------------------
REPURCHASE AGREEMENT -- 5.9%
J.P. Agency
5.35%, dated 09/30/99, matures 10/01/99,
repurchase price $19,266,078 (collateralized
by U.S. Treasury Obligations:
total market value $19,649,433) (A)$19,263 19,263
J.P. Morgan
5.35%, dated 09/30/99, matures 10/01/99,
repurchase price $23,607,023 (collateralized
by U.S. Government Obligations:
total market value $24,075,634) (A) 23,604 23,604
----------
TOTAL REPURCHASE AGREEMENT (COST $42,867) 42,867
----------
----------
TOTAL INVESTMENTS-- 93.2% (COST $483,318) $ 674,586
----------
----------
Percentages indicated are based on net assets of $723,760,641
* Non-Income Producing Security
(A) -- Tri-Party Repurchase Agreement
ADR -- American Depository Receipt
Cl -- Class
+ -- Considered an affiliated company as the Fund owns more than 5% of the
outstanding voting securities of such company. The total market value of
investments in affiliated companies as of September 30, 1999 was
$5,155,550.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
THE PBHG FUNDS, INC.
PBHG LARGE CAP GROWTH FUND (UNAUDITED)
PBHG LARGE CAP GROWTH FUND
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE
PBHG LARGE CAP GROWTH FUND, VERSUS THE S&P 500 INDEX
AND THE LIPPER MULTI-CAP GROWTH FUNDS AVERAGE
[LINE GRAPH OMITTED]
PBHG S&P LIPPER MULTI-CAP
LARGE CAP 500 GROWTH FUNDS
GROWTH FUND INDEX4 AVERAGE5
4/30/95 $10000 $10000 $10000
5/31/95 10070 10399 10253
6/30/95 10920 10640 10889
7/31/95 11740 10993 11623
8/31/95 12310 11020 11726
9/30/95 13160 11485 12067
10/31/95 13510 11444 11884
11/30/95 13720 11946 12294
12/31/95 13383 12176 12282
1/31/96 14146 12590 12433
2/29/96 14827 12707 12833
3/31/96 14992 12830 12963
4/30/96 15880 13019 13669
5/31/96 16509 13354 14131
6/30/96 16158 13405 13772
7/31/96 15023 12813 12680
8/31/96 15601 13083 13284
9/30/96 16870 13819 14245
10/31/96 16365 14200 14110
11/30/96 16994 15273 14824
12/31/96 16514 14970 14541
1/31/97 17247 15905 15323
2/28/97 16504 16030 14727
3/31/97 14727 15372 13879
4/30/97 15626 16289 14252
5/31/97 17330 17280 15496
6/30/97 18197 18054 16059
7/31/97 19860 19490 17570
8/31/97 18941 18399 17145
9/30/97 20139 19406 18221
10/31/97 19282 18759 17420
11/30/97 19365 19626 17491
12/31/97 20206 19963 17617
1/31/98 19893 20184 17675
2/28/98 22450 21639 19169
3/31/98 23681 22746 20108
4/30/98 23817 22974 20347
5/31/98 23160 22580 19531
6/30/98 24861 23496 20623
7/31/98 24621 23247 20070
8/31/98 19945 19890 16542
9/30/98 21458 21164 17870
10/31/98 21573 22886 18832
11/30/98 22993 24273 20257
12/31/98 26353 25672 22623
1/31/99 27213 26745 23956
2/28/99 25671 25914 22691
3/31/99 27447 26951 24075
4/30/99 27157 27995 24622
5/31/99 26029 27334 24159
6/30/99 27950 28851 25881
7/31/99 26933 27951 25312
8/31/99 27135 27811 25289
9/30/99 27594 27046 25228
1 Performance is historical and not indicative of future results. The
investment return and principal value of an investment will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
2 The six month return has not been annualized.
3 The PBHG Large Cap Growth Fund commenced operations on April 5, 1995.
4 The S&P 500 Index is a capitalization-weighted index of 500 stocks. The
index is designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing
all major industries. The Index is not intended to imply the Fund's past or
future performance.
5 The Lipper Multi-Cap Growth Funds Average represents the average
performance of all mutual funds classified by Lipper, Inc. in the Multi-Cap
Growth category. These performance figures are based on the changes in net
asset value of the funds in the category with all capital gains
distributions and income dividends reinvested. The index is not intended to
imply the Fund's past or future performance.
Average Annual Total Return1
As of September 30, 1999
- ------------------------------------------------------------------------------
Annualized Annualized
6 One Year 3 Year Inception
Months2 Return Return to Date3
- ------------------------------------------------------------------------------
PBHG Large Cap Growth Fund 0.53% 28.59% 17.82% 25.44%
- ------------------------------------------------------------------------------
Sector Weightings
at September 30, 1999
[PIE CHART OMITTED]
Consumer Cyclical (22%)
Financial (5%)
Health Care (9%)
Industrial (12%)
Services (2%)
Technology (42%)
Cash (8%)
% of Total Portfolio Investments
12
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG LARGE CAP GROWTH FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
COMMON STOCK -- 94.0%
CONSUMER CYCLICAL -- 22.0%
APPAREL MANUFACTURERS -- 1.8%
Jones Apparel Group* 40,600 $ 1,167
Tommy Hilfiger* 30,400 857
---------
2,024
- ----------------------------------------------------------------
AUDIO/VIDEO PRODUCTS -- 2.2%
Gemstar International Group* 32,800 2,563
---------
2,563
- ----------------------------------------------------------------
BROADCAST SERVICE/PROGRAMMING -- 2.6%
Clear Channel Communications* 37,000 2,955
---------
2,955
- ----------------------------------------------------------------
RETAIL-BEDDING -- 1.6%
Bed Bath & Beyond* 38,900 1,359
Linens `N Things* 14,600 493
---------
1,852
- ----------------------------------------------------------------
RETAIL-BUILDING PRODUCTS -- 2.1%
Home Depot 34,300 2,354
---------
2,354
- ----------------------------------------------------------------
RETAIL-CONSUMER ELECTRONICS -- 1.0%
Tandy 23,200 1,199
---------
1,199
- ----------------------------------------------------------------
RETAIL-DISCOUNT -- 5.8%
BJ's Wholesale Club* 22,900 677
Family Dollar Stores 78,000 1,648
TJX 52,400 1,470
Wal-Mart Stores 60,200 2,863
---------
6,658
- ----------------------------------------------------------------
RETAIL-JEWELRY -- 1.3%
Tiffany & Company 24,400 1,463
---------
1,463
- ----------------------------------------------------------------
RETAIL-MAJOR DEPARTMENT STORE -- 0.6%
Dayton Hudson 11,300 679
---------
679
- ----------------------------------------------------------------
RETAIL-REGIONAL DEPARTMENT STORES -- 1.1%
Kohl's* 19,500 1,289
---------
1,289
- ----------------------------------------------------------------
TELEVISION -- 1.9%
Univision Communications* 27,500 2,238
---------
2,238
---------
TOTAL CONSUMER CYCLICAL (COST $18,920) 25,274
---------
- ----------------------------------------------------------------
FINANCIAL -- 5.5%
DIVERSIFIED FINANCIAL SERVICES -- 2.6%
Associates First Capital 48,100 1,732
Citigroup 27,600 1,214
---------
2,946
- ----------------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------------
FINANCE-INVESTMENT BANKER/BROKER -- 0.5%
Goldman Sachs 10,500 $ 641
---------
641
- ----------------------------------------------------------------
FINANCE-MORTGAGE LOAN/BANKER -- 0.8%
Federal Home Loan Mortgage 17,900 931
---------
931
- ----------------------------------------------------------------
MULTI-LINE INSURANCE -- 1.6%
American International Group 21,100 1,834
---------
1,834
---------
TOTAL FINANCIAL (COST $5,692) 6,352
---------
- ----------------------------------------------------------------
HEALTH CARE -- 8.7%
MEDICAL INFORMATION SYSTEMS -- 1.4%
IMS Health 69,400 1,583
---------
1,583
- ----------------------------------------------------------------
MEDICAL PRODUCTS -- 2.7%
Johnson & Johnson 20,700 1,902
Minimed* 12,200 1,199
---------
3,101
- ----------------------------------------------------------------
MEDICAL-BIOMEDICAL/GENETIC -- 1.9%
Amgen* 16,800 1,369
Genentech* 5,700 834
---------
2,203
- ----------------------------------------------------------------
MEDICAL-DRUGS -- 2.7%
Bristol-Myers Squibb 13,200 891
Medimmune* 14,500 1,445
Schering Plough 17,700 772
---------
3,108
---------
TOTAL HEALTH CARE (COST $9,300) 9,995
---------
- ----------------------------------------------------------------
INDUSTRIAL -- 12.7%
AEROSPACE/DEFENSE -- 0.4%
Boeing 12,200 520
---------
520
- ----------------------------------------------------------------
DIVERSIFIED MANUFACTURING OPERATIONS-- 6.1%
Corning 23,400 1,604
General Electric 28,200 3,343
Tyco International Limited 19,900 2,055
---------
7,002
- ----------------------------------------------------------------
ELECTRONIC COMPONENTS-MISCELLANEOUS-- 2.3%
Gentex Semi-conductors* 25,000 516
Solectron* 29,100 2,090
---------
2,606
- ----------------------------------------------------------------
INSTRUMENTS-CONTROLS -- 1.1%
Microchip Technology* 23,700 1,218
---------
1,218
- ----------------------------------------------------------------
INSTRUMENTS-SCIENTIFIC -- 1.6%
PE Corp-PE Biosystems Group 26,000 1,879
---------
1,879
- ----------------------------------------------------------------
13
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG LARGE CAP GROWTH FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
MACHINERY-GENERAL INDUSTRIAL -- 1.2%
Applied Materials* 17,100 $ 1,328
---------
1,328
---------
TOTAL INDUSTRIAL (COST $11,098) 14,553
---------
- ----------------------------------------------------------------
SERVICES -- 2.4%
COMMERCIAL SERVICES-FINANCE -- 0.8%
Concord EFS* 47,100 971
---------
971
- ----------------------------------------------------------------
RENTAL AUTO/EQUIPMENT -- 1.0%
United Rentals* 52,800 1,148
---------
1,148
- ----------------------------------------------------------------
SCHOOLS -- 0.6%
Apollo Group, Cl A* 32,637 690
---------
690
---------
TOTAL SERVICES (COST $3,298) 2,809
---------
- ----------------------------------------------------------------
TECHNOLOGY -- 42.7%
APPLICATIONS SOFTWARE -- 2.7%
BEA Systems* 22,300 787
Citrix Systems* 9,200 570
Siebel Systems* 26,200 1,746
---------
3,103
- ----------------------------------------------------------------
CIRCUITS -- 1.1%
Linear Technology 22,300 1,311
---------
1,311
- ----------------------------------------------------------------
COMPUTER SOFTWARE -- 2.9%
Adobe Systems 7,600 863
BMC Software* 11,200 802
Microsoft* 18,300 1,657
---------
3,322
- ----------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 1.9%
EMC* 30,200 2,157
---------
2,157
- ----------------------------------------------------------------
COMPUTERS-MICRO -- 4.5%
Hewlett Packard 16,100 1,481
IBM 13,800 1,675
Sun Microsystems* 21,500 2,000
---------
5,156
- ----------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS-- 9.2%
Altera* 13,700 594
Broadcom* 8,500 927
Conexant Systems* 15,200 1,104
Intel 14,100 1,048
KLA-Tencor* 15,900 1,033
LSI Logic* 17,400 896
PMC-Sierra* 11,200 1,036
QLogic* 10,800 754
- ----------------------------------------------------------------
Shares/Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- CONTINUED
Texas Instruments 29,800 $ 2,451
Xilinx* 11,500 754
---------
10,597
- ----------------------------------------------------------------
FIBER OPTICS -- 2.8%
Ciena* 40,000 1,460
JDS Uniphase* 16,000 1,821
---------
3,281
- ----------------------------------------------------------------
INTERNET SOFTWARE -- 3.4%
America Online* 14,300 1,487
At Home* 30,100 1,247
Lycos* 23,800 1,193
---------
3,927
- ----------------------------------------------------------------
NETWORKING PRODUCTS -- 2.9%
Cisco Systems* 49,550 3,397
---------
3,397
- ----------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT -- 9.1%
Lucent Technologies 39,500 2,562
Nokia ADR 31,100 2,793
Nortel Networks 52,000 2,652
Qualcomm* 12,800 2,422
---------
10,429
- ----------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 1.2%
Comverse Technology Equipment* 14,300 1,349
---------
1,349
- ----------------------------------------------------------------
WIRELESS EQUIPMENT -- 1.0%
Motorola 12,500 1,100
---------
1,100
---------
TOTAL TECHNOLOGY (COST $39,089) 49,129
---------
TOTAL COMMON STOCK (COST $87,397) 108,112
---------
- ----------------------------------------------------------------
REPURCHASE AGREEMENT -- 8.2%
J.P. Mortgage
5.35%, dated 09/30/99, matures 10/01/99,
repurchase price $9,487,255 (collateralized
by U.S. Government Obligations: total
market value $9,675,582) (A) $9,486 9,486
---------
TOTAL REPURCHASE AGREEMENT (COST $9,486) 9,486
---------
TOTAL INVESTMENTS-- 102.2% (COST $96,883) 117,598
---------
- ----------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (2.2%)
TOTAL OTHER ASSETS AND LIABILITIES, NET (2,587)
---------
- ----------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 200 million
shares -- $0.001 par value)
based on 4,657,060 outstanding
shares of common stock 45,380
Accumulated net investment loss (564)
Accumulated net realized gain on investments 49,480
Net unrealized appreciation on investments 20,715
---------
TOTAL NET ASSETS-- 100.0% $115,011
---------
---------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $24.70
---------
---------
* Non-income producing security
(A) -- Tri-party repurchase agreement
ADR -- American Depository Receipt
Cl -- Class
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
THE PBHG FUNDS, INC.
PBHG SELECT EQUITY FUND (UNAUDITED)
PBHG SELECT EQUITY FUND
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN
THE PBHG SELECT EQUITY FUND, VERSUS THE S&P 500 INDEX
AND THE LIPPER MULTI-CAP GROWTH FUNDS AVERAGE
[LINE GRAPH OMITTED]
PBHG S&P LIPPER MULTI-CAP
SELECT 500 GROWTH FUNDS
EQUITY FUND INDEX4 FUNDS AVERAGE5
4/5/95 $10000 $10000 $10000
5/31/95 10402 10399 10253
6/30/95 11685 10640 10889
7/31/95 13399 10993 11623
8/31/95 13947 11020 11726
9/30/95 14545 11485 12067
10/31/95 14985 11444 11884
11/30/95 15367 11946 12294
12/31/95 15510 12176 12282
1/31/96 15851 12590 12433
2/29/96 17025 12707 12833
3/31/96 17326 12830 12963
4/30/96 18811 13019 13669
5/31/96 20376 13354 14131
6/30/96 19603 13405 13772
7/31/96 17687 12813 12680
8/31/96 18861 13083 13284
9/30/96 21118 13819 14245
10/31/96 19904 14200 14110
11/30/96 20366 15273 14824
12/31/96 19852 14970 14541
1/31/97 20338 15905 15323
2/28/97 17947 16030 14727
3/31/97 16123 15372 13879
4/30/97 16579 16289 14252
5/31/97 18808 17280 15496
6/30/97 19568 18054 16059
7/31/97 21402 19490 17570
8/31/97 20338 18399 17145
9/30/97 22335 19406 18221
10/31/97 20794 18759 17420
11/30/97 20176 19626 17491
12/31/97 21210 19963 17617
1/31/98 20784 20184 17675
2/28/98 22902 21639 19169
3/31/98 24473 22746 20108
4/30/98 24422 22974 20347
5/31/98 22993 22580 19531
6/30/98 25922 23496 20623
7/31/98 23824 23247 20070
8/31/98 19193 19890 16542
9/30/98 21048 21164 17870
10/31/98 19781 22886 18832
11/30/98 21261 24273 20257
12/31/98 25243 25672 22623
1/31/99 25577 26745 23956
2/28/99 23257 25914 22691
3/31/99 26277 26951 24075
4/30/99 25365 27995 24622
5/31/99 24280 27334 24159
6/30/99 26388 28851 25881
7/31/99 25821 27951 25312
8/31/99 27736 27811 25289
9/30/99 28557 27046 25228
1 Performance is historical and not indicative of future results. The
investment return and principal value of an investment will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
2 The six month return has not been annualized.
3 The PBHG Select Equity Fund commenced operations on April 5, 1995.
4 The S&P 500 Index is a capitalization-weighted index of 500 stocks. The
index is designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing
all major industries. The Index is not intended to imply the Fund's past or
future performance.
5 The Lipper Multi-Cap Growth Funds Average represents the average
performance of all mutual funds classified by Lipper, Inc. in the Multi-Cap
Growth category. These performance figures are based on the changes in net
asset value of the funds in the category with all capital gains
distributions and income dividends reinvested. The index is not intended to
imply the Fund's past or future performance.
Average Annual Total Return1
As of September 30, 1999
- ----------------------------------------------------------------------------
Annualized Annualized
6 One Year 3 Year Inception
Months2 Return Return to Date3
- ----------------------------------------------------------------------------
PBHG Select Equity Fund 8.68% 35.68% 10.58% 26.99%
- ----------------------------------------------------------------------------
Sector Weightings
at September 30, 1999
[PIE CHART OMITTED]
Consumer Cyclical (10%)
Health Care (1%)
Industrial (2%)
Technology (86%)
Cash (1%)
% of Total Portfolio Investments
15
<PAGE>
THE PBHG FUNDS, INC.
SCHEDULE OF INVESTMENTS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG SELECT EQUITY FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
COMMON STOCK -- 96.3%
CONSUMER CYCLICAL -- 10.1%
AUDIO/VIDEO PRODUCTS -- 4.9%
Gemstar International* 126,700 $ 9,899
---------
9,899
- ----------------------------------------------------------------
MOTION PICTURES & SERVICES -- 2.6%
Macrovision* 120,200 5,334
---------
5,334
- ----------------------------------------------------------------
RETAIL-APPAREL/SHOE -- 2.6%
American Eagle Outfitters* 106,700 5,168
---------
5,168
---------
TOTAL CONSUMER CYCLICAL (COST $16,503) 20,401
---------
- ----------------------------------------------------------------
HEALTH CARE -- 1.0%
MEDICAL-BIOMEDICAL/GENETIC -- 1.0%
Genentech* 13,300 1,946
---------
1,946
---------
TOTAL HEALTH CARE (COST $1,674) 1,946
---------
- ----------------------------------------------------------------
INDUSTRIAL -- 2.2%
BUILDING & CONSTRUCTION-MISCELLANEOUS -- 2.2%
Dycom Industries* 106,200 4,480
---------
4,480
---------
TOTAL INDUSTRIAL (COST $4,939) 4,480
---------
- ----------------------------------------------------------------
TECHNOLOGY -- 83.0%
APPLICATIONS SOFTWARE -- 13.0%
BEA Systems* 111,200 3,927
Broadvision* 75,800 10,086
Citrix Systems* 92,200 5,711
Siebel Systems* 97,400 6,489
---------
26,213
- ----------------------------------------------------------------
COMPUTER SOFTWARE -- 1.9%
Bindview Development* 193,000 3,800
---------
3,800
- ----------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 5.5%
MTI Technology* 286,300 6,603
Sandisk* 69,900 4,556
---------
11,159
- ----------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS-- 18.8%
Broadcom, Cl A* 59,700 6,507
Conexant Systems* 117,600 8,544
Hi / fn* 72,600 8,004
PMC-Sierra* 63,900 5,911
Xilinx* 139,700 9,155
---------
38,121
- ----------------------------------------------------------------
Shares/Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------------
FIBER OPTICS -- 5.8%
Harmonic* 32,500 $ 4,252
JDS Uniphase* 66,700 7,591
---------
11,843
- ----------------------------------------------------------------
INTERNET CONTENT -- 2.8%
InfoSpace.com* 136,500 5,613
---------
5,613
- ----------------------------------------------------------------
INTERNET SOFTWARE -- 10.3%
At Home, Series A* 164,700 6,825
Exodus Communications* 98,800 7,120
Lycos* 138,100 6,922
---------
20,867
- ----------------------------------------------------------------
NETWORK SOFTWARE -- 4.1%
Legato Systems* 190,200 8,291
---------
8,291
- ----------------------------------------------------------------
NETWORKING PRODUCTS -- 9.6%
Emulex* 78,200 6,716
International Network Services* 75,000 4,078
Juniper Networks* 47,200 8,593
---------
19,387
- ----------------------------------------------------------------
PRINTERS & RELATED PRODUCTS -- 2.8%
Electronics For Imaging* 110,300 5,670
---------
5,670
- ----------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT -- 4.1%
Audiocodes Limited* 139,800 5,260
Qualcomm* 16,400 3,103
---------
8,363
- ----------------------------------------------------------------
WIRELESS EQUIPMENT -- 4.3%
RF Micro Devices* 190,600 8,720
---------
8,720
---------
TOTAL TECHNOLOGY (COST $126,585) 168,047
---------
TOTAL COMMON STOCK (COST $149,701) 194,874
---------
- ----------------------------------------------------------------
REPURCHASE AGREEMENT -- 1.4%
J.P. Mortgage
5.35%, dated 09/30/99, matures 10/01/99,
repurchase price $2,856,061 (collateralized
by U.S. Government Obligations: total
market value $2,912,756) (A) $2,856 2,856
---------
TOTAL REPURCHASE AGREEMENT (COST $2,856) 2,856
---------
TOTAL INVESTMENTS-- 97.7% (COST $152,557) $ 197,730
---------
---------
Percentages indicated are based on net assets of $202,320,941
* Non-income producing security
(A) -- Tri-party repurchase agreement
Cl -- Class
16
<PAGE>
THE PBHG FUNDS, INC.
PBHG CORE GROWTH FUND (UNAUDITED)
PBHG CORE GROWTH FUND
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
IN THE PBHG CORE GROWTH FUND, VERSUS THE RUSSELL MID CAP
GROWTH INDEX AND THE LIPPER MULTI-CAP GROWTH FUNDS AVERAGE
[LINE GRAPH OMITTED]
PBHG RUSSELL LIPPER MULTI-CAP
CORE MID-CAP GROWTH FUNDS
GROWTH FUND GROWTH INDEX4 AVERAGE5
12/31/95 $10000 $10000 $10000
1/31/96 10590 10177 10123
2/29/96 11450 10562 10449
3/31/96 11820 10645 10554
4/30/96 13310 11159 11130
5/31/96 14230 11387 11506
6/30/96 13800 11043 11214
7/31/96 12040 10186 10324
8/31/96 13000 10736 10816
9/30/96 14200 11418 11599
10/31/96 13410 11284 11489
11/30/96 13740 11949 12070
12/31/96 13280 11748 11840
1/31/97 13300 12268 12476
2/28/97 11690 11997 11991
3/31/97 10340 11319 11300
4/30/97 10200 11597 11604
5/31/97 11680 12636 12618
6/30/97 12230 12986 13076
7/31/97 12990 14228 14306
8/31/97 12480 14090 13960
9/30/97 12890 14803 14836
10/31/97 12280 14061 14184
11/30/97 11910 14209 14242
12/31/97 11990 14395 14344
1/31/98 11470 14136 14392
2/28/98 12830 15465 15608
3/31/98 13530 16113 16372
4/30/98 13620 16332 16567
5/31/98 12540 15660 15903
6/30/98 13560 16103 16792
7/31/98 12540 15413 16342
8/31/98 9680 12471 13469
9/30/98 10790 13415 14551
10/31/98 10520 14402 15333
11/30/98 11260 15374 16494
12/31/98 12880 16966 18421
1/31/99 13420 17475 19506
2/28/99 12670 16620 18476
3/31/99 14060 17546 19603
4/30/99 14160 18346 20048
5/31/99 13890 18110 19671
6/30/99 15530 19374 21073
7/31/99 15560 18757 20610
8/31/99 16300 18562 20591
9/30/99 16453 18405 20633
1 Performance is historical and not indicative of future results. The
investment return and principal value of an investment will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
2 The six month return has not been annualized.
3 The PBHG Core Growth Fund commenced operations on December 29, 1995.
4 The Russell Mid Cap Growth Index is an unmanaged index comprised of those
securities in the Russell 1000 Index with a higher price to book ratio and
higher forecasted growth values. The Index reflects the reinvestment of
income dividends and capital gain distributions, if any, but does not
reflect fees, brokerage commissions, or other expenses of investing. The
Index is not intended to imply the Fund's past or future performance.
5 The Lipper Multi-Cap Growth Funds Average represents the average
performance of all mutual funds classified by Lipper, Inc. in the Multi-Cap
Growth category. These performance figures are based on the changes in net
asset value of the funds in the category with all capital gains
distributions and income dividends reinvested. The index is not intended to
imply the Fund's past or future performance.
Average Annual Total Return1
As of September 30, 1999
- --------------------------------------------------------------------------
Annualized Annualized
6 One Year 3 Year Inception
Months2 Return Return to Date3
- --------------------------------------------------------------------------
PBHG Core Growth Fund 17.00% 52.46% 5.02% 14.21%
- --------------------------------------------------------------------------
Sector Weightings
at September 30, 1999
[PIE CHART OMITTED]
Consumer Cyclical (11%)
Energy (9%)
Financial (1%)
Health Care (11%)
Industrial (11%)
Services (13%)
Technology (43%)
Cash (1%)
% of Total Portfolio Investments
17
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG CORE GROWTH FUND
Market
Description Shares Value (000)
- ---------------------------------------------------------------
COMMON STOCK -- 95.7%
CONSUMER CYCLICAL -- 10.7%
AUDIO/VIDEO PRODUCTS -- 2.0%
Gemstar International Group* 22,200 $ 1,734
-----------
1,734
- ---------------------------------------------------------------
MOTION PICTURES & SERVICES -- 1.0%
Cinar, Cl B* 29,200 883
-----------
883
- ---------------------------------------------------------------
RESORTS/THEME PARKS -- 1.5%
Premier Parks 45,500 1,320
-----------
1,320
- ---------------------------------------------------------------
RETAIL-APPAREL/SHOE -- 2.3%
American Eagle Outfitters* 41,600 2,015
-----------
2,015
- ---------------------------------------------------------------
RETAIL-CONSUMER ELECTRONICS -- 2.8%
Circuit City Stores 26,400 1,114
Tandy 24,900 1,287
-----------
2,401
- ---------------------------------------------------------------
RETAIL-JEWELRY -- 1.1%
Tiffany & Company 16,500 989
-----------
989
-----------
TOTAL CONSUMER CYCLICAL (COST $7,981) 9,342
-----------
- ---------------------------------------------------------------
ENERGY -- 8.5%
OIL COMPANIES-EXPLORATION & PRODUCTION-- 4.3%
Apache 26,200 1,132
Devon Energy 15,100 626
EOG Resources 93,900 1,995
-----------
3,753
- ---------------------------------------------------------------
OIL FIELD MACHINERY & EQUIPMENT -- 1.8%
Cooper Cameron* 41,100 1,551
-----------
1,551
- ---------------------------------------------------------------
OIL & GAS DRILLING -- 2.4%
Diamond Offshore Drilling 61,600 2,056
-----------
2,056
-----------
TOTAL ENERGY (COST $7,448) 7,360
-----------
- ---------------------------------------------------------------
FINANCIAL -- 1.0%
FINANCE-OTHER SERVICES -- 1.0%
Heller Financial 39,000 878
-----------
878
-----------
TOTAL FINANCIAL (COST $1,180) 878
-----------
- ---------------------------------------------------------------
HEALTH CARE -- 10.9%
MEDICAL LASER SYSTEMS -- 1.7%
Visx* 18,600 1,471
-----------
1,471
- ---------------------------------------------------------------
Market
Description Shares Value (000)
- ---------------------------------------------------------------
MEDICAL PRODUCTS -- 1.2%
Minimed* 10,500 $ 1,032
-----------
1,032
- ---------------------------------------------------------------
MEDICAL-BIOMEDICAL/GENETIC -- 3.9%
Amgen* 20,800 1,695
Genentech* 2,800 410
Genzyme-General Division* 28,700 1,293
-----------
3,398
- ---------------------------------------------------------------
MEDICAL-DRUGS -- 1.6%
Medimmune* 14,200 1,415
-----------
1,415
- ---------------------------------------------------------------
PHARMACY SERVICES -- 2.5%
Express Scripts, Cl A* 27,900 2,183
-----------
2,183
-----------
TOTAL HEALTH CARE (COST $8,495) 9,499
-----------
- ---------------------------------------------------------------
INDUSTRIAL -- 10.4%
CIRCUIT BOARDS -- 1.7%
Sanmina* 18,900 1,462
-----------
1,462
- ---------------------------------------------------------------
DIVERSIFIED MANUFACTURING OPERATIONS-- 0.7%
Corning 9,300 638
-----------
638
- ---------------------------------------------------------------
ELECTRONIC COMPONENTS-MISCELLANEOUS-- 2.2%
Flextronics International* 15,500 902
Optical Coating Laboratory 10,600 976
-----------
1,878
- ---------------------------------------------------------------
ELECTRONIC MEASURING INSTRUMENTS -- 2.1%
Teradyne* 24,000 846
Vishay Intertechnology* 42,600 1,012
-----------
1,858
- ---------------------------------------------------------------
ELECTRONICS-MILITARY -- 0.5%
L-3 Communications* 11,500 434
-----------
434
- ---------------------------------------------------------------
INSTRUMENTS-CONTROLS -- 2.2%
Mettler-Toledo International* 63,700 1,887
-----------
1,887
- ---------------------------------------------------------------
INSTRUMENTS-SCIENTIFIC -- 1.0%
PE Corp-PE Biosystems 12,600 910
-----------
910
-----------
TOTAL INDUSTRIAL (COST $8,598) 9,067
-----------
- ---------------------------------------------------------------
SERVICES -- 12.7%
ADVERTISING AGENCIES -- 2.5%
Omnicom 27,700 2,193
-----------
2,193
- ---------------------------------------------------------------
18
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG CORE GROWTH FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
ADVERTISING SALES -- 5.6%
Lamar Advertising* 50,900 $ 2,520
Outdoor Systems* 64,600 2,309
-----------
4,829
- ---------------------------------------------------------------
COMPUTER SERVICES -- 0.5%
Sapient* 4,700 443
-----------
443
- ---------------------------------------------------------------
CONSULTING SERVICES -- 3.4%
Navigant Consulting* 21,900 1,016
USWeb* 55,700 1,911
-----------
2,927
- ---------------------------------------------------------------
RENTAL AUTO/EQUIPMENT -- 0.7%
United Rentals* 29,300 637
-----------
637
-----------
TOTAL SERVICES (COST $9,460) 11,029
-----------
- ---------------------------------------------------------------
TECHNOLOGY -- 41.5%
CIRCUITS -- 1.5%
Integrated Device Technology* 37,800 699
Maxim Integrated Products* 9,800 618
-----------
1,317
- ---------------------------------------------------------------
COMPUTER DATA SECURITY -- 1.3%
Checkpoint Software* 13,000 1,098
-----------
1,098
- ---------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS-- 15.3%
Atmel* 42,100 1,424
Conexant Systems* 11,000 799
Fairchild Semicon International, Cl A* 83,100 1,953
LAM Research* 7,200 439
LSI Logic* 40,100 2,065
Micron Technology 17,500 1,165
National Semiconductor* 12,600 384
QLogic* 15,000 1,047
Triquint Semiconductor* 33,100 1,893
Xilinx* 33,300 2,182
-----------
13,351
- ---------------------------------------------------------------
FIBER OPTICS -- 2.8%
Ciena* 23,000 840
JDS Uniphase* 13,900 1,582
-----------
2,422
- ---------------------------------------------------------------
INTERNET CONTENT -- 4.4%
Infospace.com* 19,400 798
Inktomi* 17,500 2,100
Network Solutions* 9,900 910
-----------
3,808
- ---------------------------------------------------------------
Shares/Face Market
Description Amount (000) Value (000)
- ---------------------------------------------------------------
INTERNET SOFTWARE -- 3.9%
Lycos* 39,500 $ 1,980
PSINet* 17,500 629
Verio* 25,600 794
-----------
3,403
- ---------------------------------------------------------------
NETWORKING PRODUCTS -- 5.7%
Cabletron Systems* 7,500 118
Cisco Systems* 20,800 1,426
Emulex* 31,000 2,662
Extreme Networks* 11,500 728
-----------
4,934
- ---------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT -- 4.6%
Antec* 33,200 1,764
Commscope* 31,600 1,027
General Instrument* 25,600 1,232
-----------
4,023
- ---------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 0.9%
Amdocs Limited* 38,600 811
-----------
811
- ---------------------------------------------------------------
WIRELESS EQUIPMENT -- 1.1%
Powerwave Technologies* 19,000 916
-----------
916
-----------
TOTAL TECHNOLOGY (COST $27,374) 36,083
-----------
TOTAL COMMON STOCK (COST $70,536) 83,258
-----------
- ---------------------------------------------------------------
REPURCHASE AGREEMENT -- 1.1%
Morgan Stanley
5.35%, dated 09/30/99,
matures 10/01/99, repurchase price
$982,162 (collateralized by U.S.
Treasury Notes: total market
value $1,004,810) (A) $982 982
-----------
TOTAL REPURCHASE AGREEMENT (COST $982) 982
-----------
TOTAL INVESTMENTS-- 96.8% (COST $71,518) 84,240
-----------
- ---------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- 3.2%
TOTAL OTHER ASSETS AND LIABILITIES, NET 2,778
-----------
- ---------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 200 million
shares -- $0.001 par value) based on 5,289,254
outstanding shares of common stock 87,399
Accumulated net investment loss (488)
Accumulated net realized loss on investments (12,615)
Net unrealized appreciation on investments 12,722
-----------
TOTAL NET ASSETS-- 100.0% $ 87,018
-----------
-----------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $16.45
-----------
-----------
* Non-income producing security
(A) -- Tri-party repurchase agreement
Cl -- Class
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
THE PBHG FUNDS, INC.
PBHG LIMITED FUND (UNAUDITED)
PBHG LIMITED FUND
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN
THE PBHG LIMITED FUND, VERSUS THE RUSSELL 2000 GROWTH INDEX
AND THE LIPPER SMALL-CAP GROWTH FUNDS AVERAGE
[LINE GRAPH OMTITED]
PBHG RUSSELL LIPPER SMALL-
LIMITED 2000 CAP GROWTH
FUND GROWTH INDEX4 FUNDS AVERAGE5
6/30/96 $10000 $10000 $10000
7/31/96 9950 8779 8973
8/31/96 10320 9429 9624
9/30/96 11010 9914 10233
10/31/96 10570 9487 9858
11/30/96 10560 9751 10043
12/31/96 11082 9941 10155
1/31/97 11273 10189 10394
2/28/97 10048 9574 9694
3/31/97 9085 8898 9017
4/30/97 8984 8795 8870
5/31/97 10741 10117 10155
6/30/97 11454 10460 10750
7/31/97 12016 10996 11432
8/31/97 12257 11326 11661
9/30/97 13622 12230 12637
10/31/97 13070 11495 11972
11/30/97 12809 11221 11719
12/31/97 12864 11228 11760
1/31/98 12708 11078 11594
2/28/98 13756 12056 12571
3/31/98 14606 12562 13190
4/30/98 14720 12639 13295
5/31/98 13621 11721 12380
6/30/98 14057 11841 12681
7/31/98 13154 10852 11754
8/31/98 10509 8347 9157
9/30/98 11691 9193 9892
10/31/98 11681 9673 10338
11/30/98 12770 10423 11226
12/31/98 14542 11366 12432
1/31/99 15053 11878 12741
2/28/99 13422 10791 11596
3/31/99 12998 11176 12122
4/30/99 12965 12163 12674
5/31/99 13966 12182 12798
6/30/99 15989 12823 13959
7/31/99 15380 12427 13924
8/31/99 15358 11962 13725
9/30/99 16663 12193 14194
1 Performance is historical and not indicative of future results. The
investment return and principal value of an investment will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
2 The six month return has not been annualized.
3 The PBHG Limited Fund commenced operations on June 28, 1996.
4 The Russell 2000 Growth Index is an unmanaged index comprised of those
securities in the Russell 2000 Index with a greater-than-average growth
orientation. The Index reflects the reinvestment of income dividends and
capital gains distributions, if any, but does not reflect fees, brokerage
commissions, or other expenses of investing. The Index is not intended to
imply the Fund's past or future performance.
5 The Lipper Small-Cap Growth Funds Average represents the average
performance of all mutual funds classified by Lipper, Inc. in the Small-Cap
Growth category. These performance figures are based on the changes in net
asset value of the funds in the category with all capital gains
distributions and income dividends reinvested. The index is not intended to
imply the Fund's past or future performance.
Average Annual Total Return1
As of September 30, 1999
- ----------------------------------------------------------------------
Annualized Annualized
6 One Year 3 Year Inception
Months2 Return Return to Date3
- ----------------------------------------------------------------------
PBHG Limited Fund 28.20% 42.53% 14.81% 16.97%
- ----------------------------------------------------------------------
Sector Weightings
at September 30, 1999
[PIE CHART OMITTED]
Consumer Cyclical (16%)
Consumer Non-Cyclical (3%)
Health Care (12%)
Industrial (6%)
Services (11%)
Technology (42%)
Cash (10%)
% of Total Portfolio Investments
20
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG LIMITED FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
COMMON STOCK -- 91.0%
CONSUMER CYCLICAL -- 16.3%
ATHLETIC FOOTWARE -- 0.8%
Saucony* 44,600 $ 703
-----------
703
- ----------------------------------------------------------------
AUDIO/VIDEO PRODUCTS -- 2.1%
Polycom* 40,100 1,911
-----------
1,911
- ----------------------------------------------------------------
ENTERTAINMENT SOFTWARE -- 2.5%
THQ* 52,800 2,277
-----------
2,277
- ----------------------------------------------------------------
FOOTWEAR & RELATED APPAREL -- 1.7%
Steven Madden Limited* 118,100 1,528
-----------
1,528
- ----------------------------------------------------------------
PRINTING-COMMERCIAL -- 0.7%
Workflow Management* 49,800 647
-----------
647
- ----------------------------------------------------------------
RADIO -- 0.8%
Citadel Communications* 21,300 727
-----------
727
- ----------------------------------------------------------------
RETAIL-APPAREL/SHOE -- 1.2%
Urban Outfitters* 47,600 1,053
-----------
1,053
- ----------------------------------------------------------------
RETAIL-COMPUTER EQUIPMENT -- 1.9%
Electronics Boutique Holdings* 65,900 1,697
-----------
1,697
- ----------------------------------------------------------------
RETAIL-MAIL ORDER -- 0.2%
J. Jill Group* 36,900 173
-----------
173
- ----------------------------------------------------------------
RETAIL-RESTAURANTS -- 4.4%
Buca* 79,300 1,031
PJ America* 41,900 875
Rare Hospitality International* 64,100 1,386
Taco Cabana, Cl A* 66,400 643
-----------
3,935
-----------
TOTAL CONSUMER CYCLICAL (COST $10,499) 14,651
-----------
- ----------------------------------------------------------------
CONSUMER NON-CYCLICAL -- 3.0%
CONSUMER PRODUCTS-MISCELLANEOUS -- 0.9%
Fossil* 30,650 829
-----------
829
- ----------------------------------------------------------------
FOOD-RETAIL -- 2.1%
Wild Oates Markets* 48,300 1,908
-----------
1,908
-----------
TOTAL CONSUMER NON-CYCLICAL (COST $1,708) 2,737
-----------
- ----------------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------------
HEALTH CARE -- 11.9%
HEALTH CARE COST CONTAINMENT -- 2.9%
American Dental Partners* 102,000 $ 1,237
Hooper Holmes 53,600 1,373
-----------
2,610
- ----------------------------------------------------------------
MEDICAL INFORMATION SYSTEMS -- 1.2%
Infocure* 20,800 392
Sunquest* 42,900 692
-----------
1,084
- ----------------------------------------------------------------
MEDICAL LABS & TESTING SERVICES -- 1.1%
Impath* 35,400 1,031
-----------
1,031
- ----------------------------------------------------------------
MEDICAL LASER SYSTEMS -- 1.9%
Laser Vision Centers* 53,100 745
Summit Technology* 52,800 967
-----------
1,712
- ----------------------------------------------------------------
MEDICAL PRODUCTS -- 0.4%
Polymedica* 15,700 365
-----------
365
- ----------------------------------------------------------------
MEDICAL-DRUGS -- 2.2%
Medco Research* 60,200 1,501
Medicis Pharmaceuticals, Cl A* 18,025 514
-----------
2,015
- ----------------------------------------------------------------
RESPIRATORY PRODUCTS -- 2.2%
Resmed* 58,900 1,948
-----------
1,948
-----------
TOTAL HEALTH CARE (COST $6,779) 10,765
-----------
- ----------------------------------------------------------------
INDUSTRIAL -- 6.2%
ELECTRONIC MEASURING INSTRUMENTS -- 1.1%
Anaren Microwave* 18,200 514
Molecular Devices* 16,100 443
-----------
957
- ----------------------------------------------------------------
MACHINERY-GENERAL INDUSTRIAL -- 2.5%
Applied Science & Technology* 63,700 1,314
Asyst Technologies* 28,200 931
-----------
2,245
- ----------------------------------------------------------------
MISCELLANEOUS MANUFACTURING -- 0.8%
Surmodics* 48,200 717
-----------
717
- ----------------------------------------------------------------
NON-HAZARDOUS WASTE DISPOSAL -- 1.3%
Waste Connections* 57,600 1,184
-----------
1,184
- ----------------------------------------------------------------
POWER CONSERVATION/SUPPLY EQUIPMENT-- 0.5%
Power-One* 18,900 482
-----------
482
-----------
TOTAL INDUSTRIAL (COST $4,859) 5,585
-----------
- ----------------------------------------------------------------
21
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG LIMITED FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
SERVICES -- 11.4%
COMMERCIAL SERVICES -- 0.7%
Cunningham Graphics International* 49,800 $ 616
-----------
616
- ----------------------------------------------------------------
COMPUTER SERVICES -- 7.4%
Factset Research Systems 33,150 1,885
Mecon* 114,200 728
Netegrity* 41,800 1,019
Tier Technologies* 103,600 712
Whittman-Hart* 58,700 2,277
-----------
6,621
- ----------------------------------------------------------------
CONSULTING SERVICES -- 2.7%
Diamond Technology* 32,700 1,467
Forrester Research* 25,300 987
-----------
2,454
- ----------------------------------------------------------------
HUMAN RESOURCES -- 0.6%
Hall Kinion & Associates* 47,400 557
-----------
557
-----------
TOTAL SERVICES (COST $7,385) 10,248
-----------
- ----------------------------------------------------------------
TECHNOLOGY -- 42.2%
APPLICATIONS SOFTWARE -- 6.5%
Ardent Software* 55,500 1,495
Clarify* 50,600 2,546
Exchange Applications* 30,700 892
Great Plains Software* 17,400 896
-----------
5,829
- ----------------------------------------------------------------
CIRCUITS -- 1.4%
Pericom Semiconductor* 16,600 247
Power Integration* 14,200 983
-----------
1,230
- ----------------------------------------------------------------
COMPUTER SOFTWARE -- 14.7%
Actuate* 47,600 1,612
Advent Software* 40,250 2,506
Bindview Development* 15,400 303
Business Objects ADR* 40,300 2,378
Informatica* 6,000 304
Micromuse* 39,900 2,564
Netiq* 18,700 554
Pervasive Software* 64,900 2,239
Verity* 11,200 771
-----------
13,231
- ----------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 0.9%
MTI Technology* 35,700 823
-----------
823
- ----------------------------------------------------------------
COMPUTERS-PERIPHERAL EQUIPMENT -- 1.7%
In Focus Systems* 92,300 1,546
-----------
1,546
- ----------------------------------------------------------------
Shares/Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------------
DATA PROCESSING/MANAGEMENT -- 2.0%
TSI International Software Limited* 66,700 $ 1,809
-----------
1,809
- ----------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS-- 3.2%
Artisan Components* 35,100 303
Electroglas* 38,600 902
Transwitch* 29,650 1,690
-----------
2,895
- ----------------------------------------------------------------
INTERNET SOFTWARE -- 2.5%
Appnet Systems* 14,000 383
F5 Networks* 20,800 1,415
Ramp Networks* 18,700 411
-----------
2,209
- ----------------------------------------------------------------
NETWORKING PRODUCTS -- 1.1%
MMC Networks* 32,300 1,007
-----------
1,007
- ----------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT -- 2.7%
Ditech Communications* 26,900 1,412
Natural Microsystems* 73,500 1,020
-----------
2,432
- ----------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 3.9%
Latitude Communication* 68,700 2,005
Lightbridge* 54,100 1,065
TTI Team Telecom* 44,300 452
-----------
3,522
- ----------------------------------------------------------------
WIRELESS EQUIPMENT -- 1.6%
Proxim* 31,900 1,468
-----------
1,468
-----------
TOTAL TECHNOLOGY (COST $20,031) 38,001
-----------
TOTAL COMMON STOCK (COST $51,261) 81,987
-----------
- ----------------------------------------------------------------
REPURCHASE AGREEMENT -- 9.4%
J.P. Mortgage
5.35%, dated 09/30/99,
matures 10/01/99, repurchase price
$8,497,023 (collateralized by U.S.
Government Obligations: total market
value $8,665,694) (A) $8,496 8,496
-----------
TOTAL REPURCHASE AGREEMENT (COST $8,496) 8,496
-----------
TOTAL INVESTMENTS-- 100.4% (COST $59,757) 90,483
-----------
- ----------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (0.4)%
TOTAL OTHER ASSETS AND LIABILITIES, NET (354)
-----------
- ----------------------------------------------------------------
22
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG LIMITED FUND
Market
Description Value (000)
- ----------------------------------------------------------------
NET ASSETS:
Fund Shares of Pbhg Class (authorized 200 million
shares -- $0.001 par value) based on 5,884,105
outstanding shares of common stock $ 33,488
Accumulated net investment loss (452)
Accumulated net realized gain on investments 26,367
Net unrealized appreciation on investments 30,726
-----------
TOTAL NET ASSETS-- 100.0% $ 90,129
-----------
-----------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $15.32
-----------
-----------
* Non-income producing security
(A) -- Tri-party repurchase agreement
ADR -- American Depository Receipt
Cl -- Class
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
THE PBHG FUNDS, INC.
PBHG LARGE CAP 20 FUND (UNAUDITED)
PBHG LARGE CAP 20 FUND
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN
THE PBHG LARGE CAP 20 FUND, VERSUS THE S&P 500 INDEX
AND THE LIPPER LARGE-CAP GROWTH FUNDS AVERAGE
[LINE GRAPH OMITTED]
PBHG S&P LIPPER LARGE-CAP
LARGE CAP 500 GROWTH FUNDS
20 FUND INDEX4 AVERAGE5
11/30/96 $10000 $10000 $10000
12/31/96 9841 9802 9748
1/31/97 10462 10414 10378
2/28/97 10001 10496 10202
3/31/97 9260 10065 9671
4/30/97 9881 10666 10253
5/31/97 10912 11315 10945
6/30/97 11523 11821 11408
7/31/97 12854 12761 12504
8/31/97 12234 12047 11872
9/30/97 12914 12706 12494
10/31/97 12424 12283 12041
11/30/97 12494 12851 12336
12/31/97 13084 13071 12480
1/31/98 13355 13216 12679
2/28/98 15097 14168 13687
3/31/98 15998 14893 14322
4/30/98 16278 15043 14566
5/31/98 15848 14785 14222
6/30/98 17589 15385 15125
7/31/98 17609 15221 15046
8/31/98 14516 13023 12573
9/30/98 16708 13858 13464
10/31/98 17069 14985 14353
11/30/98 18320 15893 15386
12/31/98 21960 16809 17059
1/31/99 23995 17512 18243
2/28/99 22294 16968 17500
3/31/99 24400 17647 18562
4/30/99 23337 18330 18588
5/31/99 22527 17897 17947
6/30/99 24178 18891 19243
7/31/99 23540 18301 18662
8/31/99 24512 18210 18716
9/30/99 24178 18891 19252
1 Performance is historical and not indicative of future results. The
investment return and principal value of an investment will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
2 The six month return has not been annualized.
3 The PBHG Large Cap 20 Fund commenced operations on November 29, 1996.
4 The S&P 500 Index is a capitalization-weighted index of 500 stocks. The
index is designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing
all major industries. The Index is not intended to imply the Fund's past or
future performance.
5 The Lipper Large-Cap Growth Funds Average represents the average
performance of all mutual funds classified by Lipper, Inc. in the Large-Cap
Growth category. These performance figures are based on the changes in net
asset value of the funds in the category with all capital gains
distributions and income dividends reinvested. The index is not intended to
imply the Fund's past or future performance.
Average Annual Total Return1
As of September 30, 1999
- ------------------------------------------------------------------------
Annualized
6 One Year Inception
Months2 Return to Date3
- ------------------------------------------------------------------------
PBHG Large Cap 20 Fund 3.98% 51.85% 38.87%
- ------------------------------------------------------------------------
Sector Weightings
at September 30, 1999
[PIE CHART OMITTED]
Consumer Cyclical (20%)
Health Care (3%)
Industrial (3%)
Technology (67%)
Cash (7%)
% of Total Portfolio Investments
24
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG LARGE CAP 20 FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
COMMON STOCK -- 93.1%
CONSUMER CYCLICAL -- 19.6%
AUDIO/VIDEO PRODUCTS -- 7.3%
Gemstar International* 426,100 $ 33,289
-----------
33,289
- ----------------------------------------------------------------
BROADCAST SERVICE/PROGRAMMING -- 5.7%
Clear Channel Communications 322,900 25,792
-----------
25,792
- ----------------------------------------------------------------
RETAIL-BUILDING PRODUCTS -- 4.3%
Home Depot 286,400 19,654
-----------
19,654
- ----------------------------------------------------------------
RETAIL-DISCOUNT -- 2.3%
Wal-Mart Stores 219,200 10,426
-----------
10,426
-----------
TOTAL CONSUMER CYCLICAL (COST $60,051) 89,161
-----------
- ----------------------------------------------------------------
HEALTH CARE -- 3.1%
MEDICAL-BIOMEDICAL/GENETIC -- 3.1%
Genentech* 97,500 14,265
-----------
14,265
-----------
TOTAL HEALTH CARE (COST $13,475) 14,265
-----------
- ----------------------------------------------------------------
INDUSTRIAL -- 3.2%
MACHINERY-GENERAL INDUSTRIAL -- 3.2%
Applied Materials* 185,900 14,442
-----------
14,442
-----------
TOTAL INDUSTRIAL (COST $11,894) 14,442
-----------
- ----------------------------------------------------------------
TECHNOLOGY -- 67.2%
Computer Software -- 4.8%
Microsoft* 238,800 21,626
-----------
21,626
- ----------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 4.7%
EMC* 298,200 21,303
-----------
21,303
- ----------------------------------------------------------------
COMPUTERS-MICRO -- 9.3%
Hewlett-Packard 112,800 10,378
Sun Microsystems* 340,800 31,694
-----------
42,072
- ----------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS-- 13.0%
Broadcom, Cl A* 196,300 21,397
Conexant Systems* 286,800 20,838
LSI Logic* 326,400 16,809
-----------
59,044
- ----------------------------------------------------------------
FIBER OPTICS -- 7.0%
JDS Uniphase* 281,000 31,981
-----------
31,981
- ----------------------------------------------------------------
Share/Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------------
INTERNET SOFTWARE -- 6.2%
America Online* 61,500 $ 6,396
At Home, Series A* 512,000 21,216
Internap Network Services* 11,400 509
-----------
28,121
- ----------------------------------------------------------------
NETWORKING PRODUCTS -- 7.2%
Cisco Systems* 481,050 32,982
-----------
32,982
- ----------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT -- 15.0%
Lucent Technologies 338,200 21,941
Nokia ADR 259,500 23,306
Qualcomm* 120,400 22,778
-----------
68,025
-----------
TOTAL TECHNOLOGY (COST $247,134) 305,154
-----------
TOTAL COMMON STOCK ($332,554) 423,022
-----------
- ----------------------------------------------------------------
REPURCHASE AGREEMENT -- 7.5%
J.P. Mortgage
5.35%, dated 09/30/99,
matures 10/01/99, repurchase price
$33,795,576 (collateralized by U.S.
Government Agency Instruments: total
market value $34,466,436) (A) $33,791 33,791
-----------
TOTAL REPURCHASE AGREEMENT (COST $33,791) 33,791
-----------
TOTAL INVESTMENTS-- 100.6% (COST $366,345) 456,813
-----------
- ----------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (0.6)%
TOTAL OTHER ASSETS AND LIABILITIES, NET (2,669)
-----------
- ----------------------------------------------------------------
NET ASSETS:
Fund Shares of Pbhg Class (authorized 200 million
shares -- $0.001 par value) based on 18,122,810
outstanding shares of common stock 214,487
Accumulated net investment loss (2,201)
Accumulated net realized gain on investments 151,390
Net unrealized appreciation on investments 90,468
-----------
TOTAL NET ASSETS-- 100.0% $ 454,144
-----------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $25.06
-----------
-----------
* Non-income producing security
(A) -- Tri-party repurchase agreement
ADR -- American Depository Receipt
Cl -- Class
25
<PAGE>
THE PBHG FUNDS, INC.
PBHG NEW OPPORTUNITIES FUND (UNAUDITED)
PBHG NEW OPPORTUNITIES FUND
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
IN THE PBHG NEW OPPORTUNITIES FUND, VERSUS THE RUSSELL
2000 GROWTH INDEX AND THE LIPPER SMALL-CAP GROWTH FUNDS AVERAGE
[LINE GRAPH]
PBHG NEW RUSSELL 2000 LIPPER SMALL-CAP
OPPORTUNITIES GROWTH GROWTH FUNDS
FUND INDEX4 AVERAGE5
2/28/99 $10000 $10000 $10000
3/99 11714 10356 10504
4/99 12133 11270 10924
5/99 12795 11288 11033
6/99 17254 11883 12041
7/99 18768 11516 12008
8/99 19046 11085 11839
9/99 19572 11299 12139
1 Performance is historical and not indicative of future results. The
investment return and principal value of an investment will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
2 The six month return has not been annualized.
3 Total return has not been annualized. The PBHG New Opportunities Fund
commenced operations on February 12, 1999.
4 The Russell 2000 Growth Index is an unmanaged index comprised of those
securities in the Russell 2000 Index with a greater-than-average growth
orientation. The Index reflects the reinvestment of income dividends and
capital gains distributions, if any, but does not reflect fees, brokerage
commissions, or other expenses of investing. TheIndex is not intended to
imply the Fund's past or future performance.
5 The Lipper Small-Cap Growth Funds Average represents the average performance
of all mutual funds classified by Lipper, Inc. in the Small-Cap Growth
category. These performance figures are based on the changes in net asset
value of the funds in the category with all capital gains distributions and
income dividends reinvested. The index is not intended to imply the Fund's
past or future performance.
Cumulative Total Returns1
As of September 30, 1999
- --------------------------------------------------------------------
6 Cumulative
Months2 Inception to Date3
- --------------------------------------------------------------------
PBHG New Opportunities Fund 67.09% 103.55%
- --------------------------------------------------------------------
Sector Weightings
at September 30, 1999
[PIE CHART OMITTED]
Consumer Cyclical (9%)
Health Care (2%)
Services (2%)
Technology (87%)
% of Total Portfolio Investments
26
<PAGE>
THE PBHG FUNDS, INC.
SCHEDULE OF INVESTMENTS
------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG NEW OPPORTUNITIES FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
COMMON STOCK -- 93.6%
CONSUMER CYCLICAL -- 8.4%
AUDIO/VIDEO PRODUCTS -- 3.3%
Gemstar International Group* 18,500 $ 1,445
-----------
1,445
- ----------------------------------------------------------------
RETAIL-INTERNET -- 5.1%
Amazon.com* 10,200 815
Chemdex* 25,000 770
Ebay* 4,200 593
-----------
2,178
-----------
TOTAL CONSUMER CYCLICAL (COST $2,965) 3,623
-----------
- ----------------------------------------------------------------
HEALTH CARE -- 1.3%
MEDICAL PRODUCTS -- 1.3%
Minimed* 6,000 590
-----------
590
-----------
TOTAL HEALTH CARE (COST $586) 590
-----------
- ----------------------------------------------------------------
SERVICES -- 2.2%
CONSULTING SERVICES -- 2.2%
USWeb* 27,300 937
-----------
937
-----------
TOTAL SERVICES (COST $813) 937
-----------
- ----------------------------------------------------------------
TECHNOLOGY -- 81.7%
APPLICATIONS SOFTWARE -- 6.1%
BEA Systems* 30,200 1,066
Quest Software* 15,600 725
Siebel Systems* 12,600 840
-----------
2,631
- ----------------------------------------------------------------
CIRCUITS -- 2.1%
Micrel* 20,400 885
-----------
885
- ----------------------------------------------------------------
COMMUNICATIONS SOFTWARE -- 1.9%
Research In Motion* 26,800 829
-----------
829
- ----------------------------------------------------------------
COMPUTER DATA SECURITY -- 2.5%
Check Point Software* 4,900 414
Verisign* 6,300 671
-----------
1,085
- ----------------------------------------------------------------
COMPUTER SOFTWARE -- 5.3%
E.Piphany* 8,100 395
Micromuse* 13,900 893
Microstrategy* 18,100 1,015
-----------
2,303
- ----------------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------------
COMPUTERS-INTEGRATED SYSTEMS -- 2.6%
Redback Networks* 10,300 $ 1,112
-----------
1,112
- ----------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 1.9%
Sandisk* 12,500 815
-----------
815
- ----------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 17.4%
Applied Micro Circuits* 14,700 838
Broadcom, Cl A* 12,000 1,308
Conexant Systems* 16,200 1,177
Globespan* 12,400 783
Hi / fn* 7,900 871
PMC Sierra* 14,400 1,331
QLogic* 5,400 377
SDL* 10,600 809
-----------
7,494
- ----------------------------------------------------------------
FIBER OPTICS -- 9.0%
Ciena* 24,200 883
E-Tek Dynamics* 14,700 798
Harmonic Lite* 5,800 759
JDS Uniphase* 11,400 1,297
Lumenon Innovative Lightwave* 16,500 157
-----------
3,894
- ----------------------------------------------------------------
INTERNET CONTENT -- 7.9%
Doubleclick* 7,200 858
Infospace.com* 21,500 884
Network Solutions* 8,700 799
Yahoo* 4,700 844
-----------
3,385
- ----------------------------------------------------------------
INTERNET SOFTWARE -- 13.1%
America Online* 8,300 863
At Home, Series A* 19,100 792
Commerce One* 7,900 772
Exodus Communications* 17,800 1,283
Lycos* 23,500 1,178
Vignette* 8,500 769
-----------
5,657
- ----------------------------------------------------------------
NETWORK SOFTWARE -- 0.7%
Ion Networks* 48,800 314
-----------
314
- ----------------------------------------------------------------
NETWORKING PRODUCTS -- 6.3%
Cisco Systems* 12,400 850
Emulex* 4,900 421
Juniper Networks* 7,800 1,420
-----------
2,691
- ----------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT -- 1.0%
Qualcomm* 2,200 416
-----------
416
- ----------------------------------------------------------------
27
<PAGE>
THE PBHG FUNDS, INC.
SCHEDULE OF INVESTMENTS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG NEW OPPORTUNITIES FUND
Shares/Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 2.0%
Copper Mountain Networks* 9,700 $ 850
-----------
850
- ----------------------------------------------------------------
WIRELESS EQUIPMENT -- 1.9%
RF Micro Devices* 18,000 823
-----------
823
-----------
TOTAL TECHNOLOGY (COST $31,275) 35,184
-----------
TOTAL COMMON STOCK (COST $35,639) 40,334
-----------
- ----------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.2%
Morgan Stanley
5.00%, dated 09/30/99,
matures 10/01/99, repurchase price
$85,876 (collateralized by U.S.
Treasury Obligations: total
market value $87,856) (A) $86 86
-----------
TOTAL REPURCHASE AGREEMENT (COST $86) 86
-----------
TOTAL INVESTMENTS-- 93.8% (COST $35,725) $40,420
-----------
-----------
Percentages indicated are based on net assets of $43,076,938
* Non-income producing security
(A) -- Tri-party repurchase agreement
Cl -- Class
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
THE PBHG FUNDS, INC.
PBHG LARGE CAP VALUE FUND (UNAUDITED)
PBHG LARGE CAP VALUE FUND
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
IN THE PBHG LARGE CAP VALUE FUND, VERSUS THE S&P 500 INDEX
AND THE LIPPER MULTI-CAP VALUE FUNDS AVERAGE
[LINE GRAPH OMITTED]
PBHG S&P LIPPER MULTI-CAP
LARGE CAP 500 VALUE FUNDS
VALUE FUND INDEX4 AVERAGE5
12/31/96 $10000 $10000 $10000
1/31/97 10240 10624 10387
2/28/97 10430 10708 10473
3/31/97 10110 10269 10132
4/30/97 10380 10881 10419
5/31/97 11080 11543 11096
6/30/97 11560 12060 11501
7/31/97 12400 13019 12344
8/31/97 12000 12291 12039
9/30/97 12450 12963 12652
10/31/97 12110 12531 12165
11/30/97 12390 13110 12424
12/31/97 12562 13335 12629
1/31/98 12540 13483 12563
2/28/98 13407 14455 13435
3/31/98 14101 15194 14010
4/30/98 14198 15347 14071
5/31/98 14101 15084 13756
6/30/98 14339 15696 13792
7/31/98 14318 15529 13315
8/31/98 12312 13287 11324
9/30/98 13201 14138 11851
10/31/98 14578 15288 12778
11/30/98 15553 16214 13358
12/31/98 16925 17149 13782
1/31/99 17244 17866 13822
2/28/99 16509 17311 13399
3/31/99 16962 18003 13751
4/30/99 17415 18701 14794
5/31/99 17550 18259 14736
6/30/99 18701 19272 15257
7/31/99 18297 18671 14807
8/31/99 17991 18578 14354
9/30/99 17844 18066 13800
1 Performance is historical and not indicative of future results. The
investment return and principal value of an investment will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
2 The six month return has not been annualized.
3 The PBHG Large Cap Value Fund commenced operations on December 31, 1996.
4 The S&P 500 Index is a capitalization weighted index of 500 stocks. The
index is designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing all
major industries. The Index is not intended to imply the Fund's past or
future performance.
5 The Lipper Multi-Cap Value Funds Average represents the average performance
of all mutual funds classified by Lipper, Inc. in the Multi-Cap Value
category. These performance figures are based on the changes in net asset
value of the funds in the category with all capital gains distributions and
income dividends reinvested. The index is not intended to imply the Fund's
past or future performance.
Average Annual Total Return1
As of September 30, 1999
- ---------------------------------------------------------------------------
Annualized
6 One Year Inception
Months2 Return to Date3
- ---------------------------------------------------------------------------
PBHG Large Cap Value Fund 5.20% 35.17% 23.46%
- ---------------------------------------------------------------------------
Sector Weightings
at September 30, 1999
[PIE CHART OMITTED]
Basic Materials (1%)
Consumer Cyclical (5%)
Consumer Non-Cyclical (5%)
Energy (4%)
Financial (21%)
Health Care (16%)
Industrial (3%)
Services (26%)
Technology (16%)
Utilities (2%)
Cash (1%)
% of Total Portfolio Investments
29
<PAGE>
THE PBHG FUNDS, INC.
SCHEDULE OF INVESTMENTS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG LARGE CAP VALUE FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
COMMON STOCK -- 98.8%
BASIC MATERIALS -- 0.5%
CHEMICALS-DIVERSIFIED -- 0.5%
Dupont E.I. De Nemours 3,000 $ 183
-----------
183
-----------
TOTAL BASIC MATERIALS (COST $214) 183
-----------
- ----------------------------------------------------------------
CONSUMER CYCLICAL -- 4.6%
AUTO-CARS/LIGHT TRUCKS -- 1.0%
Daimler Chrysler AG 5,100 354
-----------
354
- ----------------------------------------------------------------
MULTIMEDIA -- 2.4%
Gannett 3,100 214
McGraw Hill 8,200 397
Time Warner 3,500 213
-----------
824
- ----------------------------------------------------------------
RETAIL-BUILDING PRODUCTS -- 1.2%
Lowes Companies 9,000 439
-----------
439
-----------
TOTAL CONSUMER CYCLICAL (COST $1,589) 1,617
-----------
- ----------------------------------------------------------------
CONSUMER NON-CYCLICAL -- 5.0%
COSMETICS & TOILETRIES -- 1.8%
Kimberly-Clark 3,700 194
Procter & Gamble 4,500 422
-----------
616
- ----------------------------------------------------------------
FOOD-MISCELLANEOUS/DIVERSIFIED -- 3.2%
Bestfoods 8,900 432
Quaker Oats 11,200 693
-----------
1,125
-----------
TOTAL CONSUMER NON-CYCLICAL (COST $1,757) 1,741
-----------
- ----------------------------------------------------------------
ENERGY -- 4.4%
OIL COMPANIES-INTEGRATED -- 3.9%
Exxon 5,200 395
Mobil 6,000 604
Royal Dutch Petroleum 6,000 354
-----------
1,353
- ----------------------------------------------------------------
OIL-FIELD SERVICES -- 0.5%
Halliburton 4,500 185
-----------
185
-----------
TOTAL ENERGY (COST $1,575) 1,538
-----------
- ----------------------------------------------------------------
FINANCIAL -- 20.8%
COMMERCIAL BANKS-CENTRAL US -- 0.6%
Old Kent Financial 5,200 193
-----------
193
- ----------------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES -- 4.1%
Citigroup 18,700 $ 823
Morgan Stanley Dean Witter & Company 7,000 624
-----------
1,447
- ----------------------------------------------------------------
FINANCE-CREDIT CARD -- 0.7%
American Express 1,800 242
-----------
242
- ----------------------------------------------------------------
FINANCE-MORTGAGE LOAN/BANKER -- 2.8%
Federal National Mortgage 5,700 357
Federal Home Loan Mortgage 11,800 614
-----------
971
- ----------------------------------------------------------------
INSURANCE BROKERS -- 1.1%
Marsh & McLennan 5,700 391
-----------
391
- ----------------------------------------------------------------
LIFE/HEALTH INSURANCE -- 1.8%
AFLAC 14,800 620
-----------
620
- ----------------------------------------------------------------
MONEY CENTER BANKS -- 7.8%
Bank Of America 14,400 802
Chase Manhattan 10,500 791
Morgan (J.P.) & Company 9,900 1,131
-----------
2,724
- ----------------------------------------------------------------
MULTI-LINE INSURANCE -- 1.5%
American International Group 6,000 522
-----------
522
- ----------------------------------------------------------------
SUPER-REGIONAL BANKS-US -- 0.4%
Mellon Bank 4,000 135
-----------
135
-----------
TOTAL FINANCIAL (COST $7,622) 7,245
-----------
- ----------------------------------------------------------------
HEALTH CARE -- 16.3%
DISPOSABLE MEDICAL PRODUCTS -- 1.4%
Bard (C.R.) Bard 10,600 499
-----------
499
- ----------------------------------------------------------------
MEDICAL PRODUCTS -- 2.5%
Johnson & Johnson 9,400 864
-----------
864
- ----------------------------------------------------------------
MEDICAL-DRUGS -- 11.1%
American Home Products 20,200 838
Bristol-Myers Squibb 12,700 857
Merck 9,700 629
Schering Plough 35,100 1,531
-----------
3,855
- ----------------------------------------------------------------
MEDICAL-HMO -- 1.3%
Wellpoint Health Networks* 8,100 462
-----------
462
-----------
TOTAL HEALTH CARE (COST $5,753) 5,680
-----------
- ----------------------------------------------------------------
30
<PAGE>
THE PBHG FUNDS, INC.
SCHEDULE OF INVESTMENTS
------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG LARGE CAP VALUE FUND
Market
Description Shares Value (000)
- -----------------------------------------------------------------
INDUSTRIAL -- 3.2%
DIVERSIFIED MANUFACTURING OPERATIONS-- 1.2%
Tyco International Limited 4,200 $ 433
-----------
433
- -----------------------------------------------------------------
INDUSTRIAL AUTOMATION/ROBOTICS -- 0.6%
Rockwell International 4,000 210
-----------
210
- -----------------------------------------------------------------
MACHINERY-GENERAL INDUSTRIAL -- 1.4%
Applied Materials* 6,100 474
-----------
474
-----------
TOTAL INDUSTRIAL (COST $1,074) 1,117
-----------
- -----------------------------------------------------------------
SERVICES -- 26.3%
COMPUTER SERVICES -- 3.1%
Computer Sciences* 9,700 682
Sungard Data Systems* 15,300 403
-----------
1,085
- -----------------------------------------------------------------
TELEPHONE-INTEGRATED -- 13.6%
Ameritech 24,600 1,653
AT&T 27,300 1,187
GTE 8,600 661
SBC Communications 24,200 1,236
-----------
4,737
- -----------------------------------------------------------------
TELEPHONE-LOCAL -- 8.1%
Bell South 33,200 1,494
US West 23,100 1,318
-----------
2,812
- -----------------------------------------------------------------
TELEPHONE-LONG DISTANCE -- 1.5%
MCI Worldcom* 7,600 546
-----------
546
-----------
TOTAL SERVICES (COST $9,262) 9,180
-----------
- -----------------------------------------------------------------
TECHNOLOGY -- 15.6%
COMPUTER SOFTWARE -- 1.6%
Computer Associates International 9,300 570
-----------
570
- -----------------------------------------------------------------
COMPUTERS-MICRO -- 6.1%
Hewlett Packard 3,700 341
IBM 14,800 1,796
-----------
2,137
- -----------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS-- 2.7%
Intel 12,600 936
-----------
936
- -----------------------------------------------------------------
NETWORK SOFTWARE -- 1.1%
Novell* 17,800 368
-----------
368
- -----------------------------------------------------------------
Shares/Face Market
Description Amount (000) Value (000)
- -----------------------------------------------------------------
OFFICE AUTOMATION & EQUIPMENT -- 2.6%
Pitney Bowes 9,000 $ 548
Xerox 8,300 348
-----------
896
- -----------------------------------------------------------------
PRINTERS & RELATED PRODUCTS -- 1.5%
Lexmark International Group* 6,500 523
-----------
523
-----------
TOTAL TECHNOLOGY (COST $5,274) 5,430
-----------
- -----------------------------------------------------------------
UTILITIES -- 2.1%
ELECTRIC-INTEGRATED -- 2.1%
Consolidated Edison 8,600 357
Peco Energy 9,800 367
-----------
724
-----------
TOTAL UTILITIES (COST $712) 724
-----------
TOTAL COMMON STOCK (COST $34,832) 34,455
-----------
- -----------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.8%
Morgan Stanley
5.00%, dated 09/30/99, matures
10/01/99, repurchase price $278,045
(collateralized by U.S. Government
Obligations: total market
value $284,456) (A) $278 278
-----------
TOTAL REPURCHASE AGREEMENT (COST $278) 278
-----------
TOTAL INVESTMENTS-- 99.6% (COST $35,110) $ 34,733
-----------
-----------
Percentages indicated are based on net assets of $34,881,582
*Non-income producing security
(A) -- Tri-party repurchase agreement
The accompanying notes are an integral part of the financial statements.
31
<PAGE>
THE PBHG FUNDS, INC.
PBHG MID-CAP VALUE FUND (UNAUDITED)
PBHG MID-CAP VALUE FUND
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN
THE PBHG MID-CAP VALUE FUND, VERSUS THE S&P MID CAP 400
INDEX AND THE LIPPER MID-CAP VALUE FUNDS AVERAGE
[LINE GRAPH OMITTED]
PBHG S&P LIPPER MID-CAP
MID-CAP MID-CAP VALUE FUNDS
VALUE FUND 400 INDEX4 AVERAGE5
4/30/97 $10000 $10000 $10000
5/31/97 10740 10874 10837
6/30/97 11410 11180 11257
7/31/97 12890 12285 12015
8/31/97 13240 12271 12060
9/30/97 14300 12976 12736
10/31/97 13760 12411 12306
11/30/97 13870 12595 12376
12/31/97 14148 13083 12611
1/31/98 14138 12834 12449
2/28/98 15443 13896 13367
3/31/98 16106 14523 13959
4/30/98 16422 14787 14081
5/31/98 15717 14123 13509
6/30/98 15896 14211 13409
7/31/98 15580 13660 12604
8/31/98 12769 11119 10433
9/30/98 13906 12157 10945
10/31/98 15358 13243 11650
11/30/98 16538 13904 12102
12/31/98 18087 15584 12673
1/31/99 18122 14977 12385
2/28/99 17023 14193 11764
3/31/99 17451 14589 12011
4/30/99 17764 15740 13011
5/31/99 18666 15808 13226
6/30/99 20042 16656 13690
7/31/99 20215 16301 13382
8/31/99 19487 15742 12837
9/30/99 19173 15255 12527
1 Performance is historical and not indicative of future results. The
investment return and principal value of an investment will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
2 The six month return has not been annualized.
3 The PBHG Mid-Cap Value Fund commenced operations on April 30, 1997.
4 The S&P Mid Cap 400 Index is an unmanaged capitalization-weighted index that
measures the performance of the mid-range sector of the U.S. stock market.
The Index reflects the reinvestment of income dividends and capital gains
distributions, if any, but does not reflect fees, brokerage commissions, or
other expenses of investing. The Index is not intended to imply the Fund's
past or future performance.
5 The Lipper Mid-Cap Value Funds Average represents the average performance of
all mutual funds classified by Lipper, Inc. in the Mid-Cap Value category.
These performance figures are based on the changes in net asset value of the
funds in the category with all capital gains distributions and income
dividends reinvested. The index is not intended to imply the Fund's past or
future performance.
Average Annual Total Return1
As of September 30, 1999
- -------------------------------------------------------------------------
Annualized
6 One Year Inception
Months2 Return to Date3
- -------------------------------------------------------------------------
PBHG Mid-Cap Value Fund 9.87% 37.88% 30.88%
- -------------------------------------------------------------------------
Sector Weightings
at September 30, 1999
[PIE CHART OMITTED]
Basic Materials (1%)
Consumer Cyclical (16%)
Consumer Non-Cyclical (9%)
Energy (9%)
Financial (10%)
Health Care (14%)
Industrial (7%)
Services (8%)
Technology (16%)
Transportation (1%)
Utilities (4%)
Cash (5%)
% of Total Portfolio Investments
32
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG MID-CAP VALUE FUND
Market
Description Shares Value (000)
- -----------------------------------------------------------------
COMMON STOCK -- 97.9%
BASIC MATERIALS -- 1.4%
CHEMICALS-SPECIALTY -- 1.4%
Cytec Industries* 23,700 $ 569
-----------
569
-----------
TOTAL BASIC MATERIALS (COST $541) 569
-----------
- -----------------------------------------------------------------
CONSUMER CYCLICAL -- 16.1%
APPAREL MANUFACTURERS -- 1.4%
Tommy Hilfiger* 20,500 578
-----------
578
- -----------------------------------------------------------------
CASINO HOTELS -- 1.6%
Harrah's Entertainment* 23,400 649
-----------
649
- -----------------------------------------------------------------
MULTIMEDIA -- 2.7%
Scripps E.W., Cl A 22,200 1,090
-----------
1,090
- -----------------------------------------------------------------
RETAIL-APPAREL/SHOE -- 1.8%
AnnTaylor Stores* 17,500 715
-----------
715
- -----------------------------------------------------------------
RETAIL-CONSUMER ELECTRONICS -- 1.6%
Circuit City Stores 15,000 633
-----------
633
- -----------------------------------------------------------------
RETAIL-JEWELRY -- 0.9%
Zale* 9,700 372
-----------
372
- -----------------------------------------------------------------
RETAIL-RESTAURANTS -- 1.8%
Brinker International* 13,800 374
Starbucks* 14,800 367
-----------
741
- -----------------------------------------------------------------
TOYS -- 1.7%
Hasbro 32,700 701
-----------
701
- -----------------------------------------------------------------
TRAVEL SERVICES -- 2.6%
Galileo International 26,600 1,071
-----------
1,071
-----------
TOTAL CONSUMER CYCLICAL (COST $6,574) 6,550
-----------
- -----------------------------------------------------------------
CONSUMER NON-CYCLICAL -- 8.8%
BEVERAGES-WINE/SPIRITS -- 2.8%
Beringer Wine Estates* 4,800 197
Canandaigua Brands, Cl A* 16,000 956
-----------
1,153
- -----------------------------------------------------------------
FOOD-DAIRY PRODUCTS -- 0.4%
Suiza Foods* 4,100 154
-----------
154
- -----------------------------------------------------------------
Market
Description Shares Value (000)
- -----------------------------------------------------------------
FOOD-MISCELLANEOUS/DIVERSIFIED -- 2.9%
Aurora Foods* 57,700 $ 923
Nabisco Group Holdings 17,500 263
-----------
1,186
- -----------------------------------------------------------------
FOOD-RETAIL -- 2.7%
Safeway* 28,400 1,081
-----------
1,081
-----------
TOTAL CONSUMER NON-CYCLICAL (COST $3,774) 3,574
-----------
- -----------------------------------------------------------------
ENERGY -- 9.7%
COAL -- 0.5%
Alliance Resource Partners* 15,900 229
-----------
229
- -----------------------------------------------------------------
OIL COMPANIES-EXPLORATION & PRODUCTION-- 7.7%
Cabot Oil & Gas, Cl A 2,900 50
Devon Energy 20,400 845
EOG Resources 31,300 665
Forest Oil* 23,000 393
Louis Dreyfus Natural Gas* 14,900 319
Santa Fe Snyder* 69,000 621
Swift Energy* 9,800 124
Vintage Petroleum 9,400 127
-----------
3,144
- -----------------------------------------------------------------
OIL FIELD MACHINERY & EQUIPMENT -- 1.0%
Cooper Cameron* 10,400 392
-----------
392
- -----------------------------------------------------------------
PIPELINES -- 0.4%
KN Energy* 6,900 155
-----------
155
- -----------------------------------------------------------------
SEISMIC DATA COLLECTION -- 0.1%
Veritas DGC* 2,400 46
-----------
46
-----------
TOTAL ENERGY (COST $3,904) 3,966
-----------
- -----------------------------------------------------------------
FINANCIAL -- 10.5%
COMMERCIAL BANKS-CENTRAL US -- 0.4%
Cullen/Frost Bankers 6,900 173
-----------
173
- -----------------------------------------------------------------
COMMERCIAL BANKS-WESTERN US -- 2.8%
Zions Bancorporation 20,900 1,152
-----------
1,152
- -----------------------------------------------------------------
FINANCE-CREDIT CARD -- 1.2%
Providian Financial 6,100 483
-----------
483
- -----------------------------------------------------------------
FINANCE-INVESTMENT BANKER/BROKER -- 1.3%
Donaldson, Lufkin, & Jenrette 4,900 194
Paine Webber Group 9,100 330
-----------
524
- -----------------------------------------------------------------
33
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG MID-CAP VALUE FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
LIFE/HEALTH INSURANCE -- 3.8%
AFLAC 21,600 $ 904
Jefferson-Pilot 2,700 171
Protective Life 15,300 444
-----------
1,519
- ----------------------------------------------------------------
REITS-OFFICE PROPERTY -- 0.7%
Crescent Real Estate Equities 16,100 290
-----------
290
- ----------------------------------------------------------------
S & L/THRIFTS-EASTERN US -- 0.3%
Sovereign Bancorp 14,800 134
-----------
134
-----------
TOTAL FINANCIAL (COST $4,659) 4,275
- ----------------------------------------------------------------
HEALTH CARE -- 14.8%
DISPOSABLE MEDICAL -- 3.1%
Bard (C.R.) 27,300 1,285
-----------
1,285
- ----------------------------------------------------------------
DRUG DELIVERY SYSTEMS -- 1.3%
Elan ADR* 15,700 527
-----------
527
- ----------------------------------------------------------------
MEDICAL PRODUCTS -- 2.3%
Baxter International 6,900 416
PSS World Medical* 58,200 520
-----------
936
- ----------------------------------------------------------------
MEDICAL-DRUGS -- 4.3%
Barr Laboratories* 6,900 219
Dura Pharmaceuticals* 6,700 93
Forest Laboratories* 19,800 834
Medimmune* 5,900 588
Triangle Pharmaceuticals* 1,100 21
-----------
1,755
- ----------------------------------------------------------------
MEDICAL-WHOLESALE DRUG DISTRIBUTION-- 2.5%
Amerisource Health* 43,100 1,021
-----------
1,021
- ----------------------------------------------------------------
VETERINARY DIAGNOSTICS -- 1.3%
Veterinary Centers of America* 45,800 524
-----------
524
-----------
TOTAL HEALTH CARE (COST $6,341) 6,048
-----------
- ----------------------------------------------------------------
INDUSTRIAL -- 7.6%
AEROSPACE/DEFENSE-EQUIPMENT -- 2.4%
BE Aerospace* 10,400 124
General Dynamics 13,600 849
-----------
973
- ----------------------------------------------------------------
ELECTRIC PRODUCTS-MISCELLANEOUS -- 1.2%
C-Cube Microsystems* 10,800 470
-----------
470
- ----------------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------------
ELECTRONIC COMPONENTS-MISCELLANEOUS-- 1.8%
DII Group* 20,400 $ 718
-----------
718
- ----------------------------------------------------------------
ELECTRONIC MEASURING INSTRUMENTS -- 1.4%
Vishay Intertechnology* 24,900 591
-----------
591
- ----------------------------------------------------------------
NON-HAZARDOUS WASTE DISPOSAL -- 0.8%
Republic Services* 30,800 335
-----------
335
-----------
TOTAL INDUSTRIAL (COST $2,950) 3,087
-----------
- ----------------------------------------------------------------
SERVICES -- 7.8%
ADVERTISING AGENCIES -- 1.1%
Snyder Communications* 24,600 374
Ventiv Health* 8,200 81
-----------
455
- ----------------------------------------------------------------
COMMERCIAL SERVICES-FINANCE -- 2.9%
Block H&R 27,300 1,186
-----------
1,186
- ----------------------------------------------------------------
COMPUTER SERVICES -- 1.8%
DST Systems* 4,700 267
Safeguard Scientifics* 6,900 469
-----------
736
- ----------------------------------------------------------------
CONSULTING SERVICES -- 0.6%
Navigant Consulting* 4,900 227
-----------
227
- ----------------------------------------------------------------
TELEPHONE-INTEGRATED -- 0.7%
Centurytel 7,000 284
-----------
284
- ----------------------------------------------------------------
TELEPHONE-LOCAL -- 0.7%
Cincinnati Bell 14,800 288
-----------
288
-----------
TOTAL SERVICES (COST $3,137) 3,176
-----------
- ----------------------------------------------------------------
TECHNOLOGY -- 16.2%
APPLICATIONS SOFTWARE -- 0.8%
Siebel Systems* 4,900 326
-----------
326
- ----------------------------------------------------------------
CIRCUITS -- 2.1%
Analog Devices* 7,400 379
Linear Technology 7,900 464
-----------
843
- ----------------------------------------------------------------
COMPUTER SOFTWARE -- 0.8%
Symantec* 8,800 317
-----------
317
- ----------------------------------------------------------------
34
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG MID-CAP VALUE FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 2.0%
Seagate Technology* 6,900 $ 213
Smart Modular Technologies* 17,400 593
-----------
806
- ----------------------------------------------------------------
DATA PROCESSING/MANAGEMENT -- 0.4%
American Management Systems 6,500 167
-----------
167
- ----------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS-- 3.4%
Cypress Semiconductor* 6,900 149
Fairchild Semicon International, Cl A* 25,500 599
Micron Technology 6,900 459
National Semiconductor* 6,600 201
-----------
1,408
- ----------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT -- 3.7%
Antec* 10,500 558
Com21* 23,700 308
General Instrument* 6,900 332
Terayon Communication* 6,300 308
-----------
1,506
- ----------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 1.4%
RCN* 14,400 590
-----------
590
- ----------------------------------------------------------------
WIRELESS EQUIPMENT -- 1.6%
Pinnacle Holdings* 25,100 656
-----------
656
-----------
TOTAL TECHNOLOGY (COST $6,103) 6,619
-----------
- ----------------------------------------------------------------
TRANSPORTATION -- 1.1%
AIRLINES -- 1.1%
Alaska Airgroup* 10,700 435
-----------
435
-----------
TOTAL TRANSPORTATION (COST $479) 435
-----------
- ----------------------------------------------------------------
UTILITIES -- 3.9%
ELECTRIC-INTEGRATED -- 2.8%
Minnesota Power 65,900 1,157
-----------
1,157
- ----------------------------------------------------------------
GAS-DISTRIBUTION -- 1.1%
MCN Energy Group 6,400 110
UGI 14,100 328
-----------
438
-----------
TOTAL UTILITIES (COST $1,676) 1,595
-----------
TOTAL COMMON STOCK (COST $40,138) 39,894
-----------
- ----------------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------------
REPURCHASE AGREEMENT -- 5.6%
Morgan Agency
5.23%, dated 09/30/99, matures
10/01/99, repurchase price $2,291,245
(collateralized by U.S. Government
Agencies: total market
value $2,355,961) (A) $2,291 $ 2,291
-----------
TOTAL REPURCHASE AGREEMENT (COST $2,291) 2,291
-----------
TOTAL INVESTMENTS-- 103.5% (COST $42,429) 42,185
-----------
- ----------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (3.5)%
Payable for securities purchased (3,175)
Other assets and liabilities 1,733
-----------
TOTAL OTHER ASSETS AND LIABILITIES, NET (1,442)
-----------
- ----------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 200 million
shares -- $0.001 par value) based on
2,456,642 outstanding shares of common stock 22,008
Accumulated net investment loss (41)
Accumulated net realized gain on investments 19,020
Net unrealized depreciation on investments (244)
-----------
TOTAL NET ASSETS-- 100.0% $ 40,743
-----------
-----------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $16.58
-----------
-----------
* Non-income producing security
(A) -- Tri-party repurchase agreement
ADR -- American Depository Receipt
Cl -- Class
The accompanying notes are an integral part of the financial statements.
35
<PAGE>
THE PBHG FUNDS, INC.
PBHG SMALL CAP VALUE FUND (UNAUDITED)
PBHG SMALL CAP VALUE FUND
COMPARISON OF CHANGE IN THE VALUE OF A $10,000
INVESTMENT IN THE PBHG SMALL CAP VALUE FUND,
VERSUS THE RUSSELL 2000 INDEX AND THE
LIPPER SMALL-CAP VALUE FUNDS AVERAGE
[LINE GRAPH OMITTED]
PBHG RUSSELL LIPPER
SMALL CAP 2000 SMALL-CAP VALUE
VALUE FUND INDEX4 FUNDS AVERAGE5
4/30/97 $10000 $10000 $10000
5/31/97 10880 11113 10892
6/30/97 11800 11589 11475
7/31/97 13070 12128 12115
8/31/97 13370 12405 12411
9/30/97 14550 13313 13242
10/31/97 14210 12729 12865
11/30/97 14200 12646 12785
12/31/97 14539 12868 12913
1/31/98 14518 12665 12711
2/28/98 15615 13601 13548
3/31/98 16227 14162 14151
4/30/98 16438 14240 14312
5/31/98 15520 13473 13757
6/30/98 15098 13501 13509
7/31/98 14402 12409 12573
8/31/98 11490 9999 10386
9/30/98 11838 10782 10726
10/31/98 12872 11221 11154
11/30/98 13811 11809 11657
12/31/98 14703 12540 12065
1/31/99 14410 12707 11883
2/28/99 13237 11678 11080
3/31/99 12831 11860 10897
4/30/99 13429 12923 11857
5/31/99 14004 13111 12274
6/30/99 14962 13704 12844
7/31/99 15255 13328 12723
8/31/99 15131 12835 12245
9/30/99 15132 12839 11984
1 Performance is historical and not indicative of future results. The
investment return and principal value of an investment will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
2 The six month return has not been annualized.
3 The PBHG Small Cap Value Fund commenced operations on April 30, 1997.
4 The Russell 2000 Index is an unmanaged index comprised of the 2,000 smallest
securities in the Russell 3000 Index. The Index reflects the reinvestment of
income dividends and capital gains distributions, if any, but does not
reflect fees, brokerage commissions, or other expenses of investing.
5 The Lipper Small-Cap Value Funds Average represents the average performance
of all mutual funds classified by Lipper, Inc. in the Small-Cap Value
category. These performance figures are based on the changes in net asset
value of the funds in the category with all capital gains distributions and
income dividends reinvested. The index is not intended to imply the Fund's
past or future performance.
Average Annual Total Return1
As of September 30, 1999
- ---------------------------------------------------------------------------
Annualized
6 One Year Inception
Months2 Return to Date3
- ---------------------------------------------------------------------------
PBHG Small Cap Value Fund 17.93% 27.82% 18.67%
- ---------------------------------------------------------------------------
Sector Weightings
at September 30, 1999
[PIE CHART OMITTED]
Basic Materials (5%)
Consumer Cyclical (16%)
Consumer Non-Cyclical (10%)
Energy (11%)
Financial (12%)
Health Care (8%)
Industrial (9%)
Services (1%)
Technology (18%)
Transportation (3%)
Utilities (1%)
Cash (6%)
% of Total Portfolio Investments
36
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
------------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG SMALL CAP VALUE FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
COMMON STOCK -- 98.2%
BASIC MATERIALS -- 4.7%
CHEMICALS-PLASTICS -- 1.5%
Geon 33,800 $ 870
Hanna 14,200 161
--------------
1,031
- ----------------------------------------------------------------
CHEMICALS-SPECIALTY -- 2.0%
Cytec Industries* 39,000 936
Grace (W.R.) & Company* 23,900 384
--------------
1,320
- ----------------------------------------------------------------
METAL-ALUMINUM -- 1.2%
Commonwealth Industries 60,700 816
--------------
816
--------------
TOTAL BASIC MATERIALS (COST $3,819) 3,167
--------------
- ----------------------------------------------------------------
CONSUMER CYCLICAL -- 17.0%
APPAREL MANUFACTURERS -- 0.7%
Isaacs (I.C.) & Company* 106,000 146
Kellwood 16,100 354
--------------
500
- ----------------------------------------------------------------
AUTO/TRUCK PARTS & EQUIPMENT-ORIGINAL-- 1.9%
Delco Remy International* 109,000 981
Dura Automotive Systems* 11,000 265
--------------
1,246
- ----------------------------------------------------------------
BUILDING-RESIDENTIAL/COMMERCIAL -- 0.4%
Pulte 11,600 252
--------------
252
- ----------------------------------------------------------------
DISTRIBUTION/WHOLESALE -- 1.3%
Cellstar* 53,700 403
Owens & Minor 45,800 441
--------------
844
- ----------------------------------------------------------------
ENTERTAINMENT SOFTWARE -- 1.6%
Acclaim Entertainment* 144,700 1,099
--------------
1,099
- ----------------------------------------------------------------
FOOTWEAR & RELATED APPAREL -- 0.9%
Stride Rite 81,800 573
--------------
573
- ----------------------------------------------------------------
HOME FURNISHINGS -- 1.6%
Ethan Allen Interiors 5,400 172
Furniture Brands International* 47,100 927
--------------
1,099
- ----------------------------------------------------------------
PUBLISHING-BOOKS -- 0.8%
Scholastic* 10,200 510
--------------
510
- ----------------------------------------------------------------
RADIO -- 0.5%
Emmis Communications, Cl A* 5,200 343
--------------
343
- ----------------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------------
RETAIL-APPAREL/SHOE -- 0.1%
Baker (J.) & Company 9,400 $ 74
--------------
74
- ----------------------------------------------------------------
RETAIL-CONSUMER ELECTRONICS -- 2.6%
Tweeter Home Entertainment Group* 46,100 1,723
--------------
1,723
- ----------------------------------------------------------------
RETAIL-INTERNET -- 0.2%
Fatbrain.com* 9,700 145
--------------
145
- ----------------------------------------------------------------
RETAIL-JEWELRY -- 1.2%
Friedman's, Cl A 25,400 224
Zales* 15,000 574
--------------
798
- ----------------------------------------------------------------
RETAIL-MAIL ORDER -- 0.8%
Micro Warehouse* 33,900 409
Shop At Home* 11,500 103
--------------
512
- ----------------------------------------------------------------
RETAIL-PET FOOD & SUPPLIES -- 0.3%
Petco Animal Supplies* 18,000 214
--------------
214
- ----------------------------------------------------------------
RETAIL-RESTAURANTS -- 1.1%
Buffets* 32,500 378
Foodmaker* 12,700 316
Ruby Tuesday 2,300 45
--------------
739
- ----------------------------------------------------------------
RETAIL-SUNGLASSES -- 0.2%
Sunglass Hut* 10,100 107
--------------
107
- ----------------------------------------------------------------
TELEVISION -- 0.3%
Paxson Communications* 17,100 209
--------------
209
- ----------------------------------------------------------------
TEXTILE-HOME FURNISHINGS -- 0.1%
Shaw Industries 5,100 81
--------------
81
- ----------------------------------------------------------------
TEXTILE-PRODUCTS -- 0.4%
Dan River, Cl A* 46,600 303
--------------
303
--------------
TOTAL CONSUMER CYCLICAL (COST $13,134) 11,371
--------------
- ----------------------------------------------------------------
CONSUMER NON-CYCLICAL -- 10.7%
BEVERAGES-WINE/SPIRITS -- 1.0%
Beringer Wine Estates, Cl B* 16,200 665
--------------
665
- ----------------------------------------------------------------
BREWERY -- 1.4%
Coors Adolph, Cl B 17,500 947
--------------
947
- ----------------------------------------------------------------
37
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG SMALL CAP VALUE FUND
Market
Description Shares Value (000)
- -----------------------------------------------------------------
CONSUMER PRODUCTS-MISCELLANEOUS -- 0.3%
Playtex Products* 12,000 $ 177
--------------
177
- -----------------------------------------------------------------
COSMETICS & TOILETRIES -- 1.0%
Alberto Culver, Cl B 30,200 698
--------------
698
- -----------------------------------------------------------------
FOOD-BAKING -- 0.9%
Earthgrains 27,800 615
--------------
615
- -----------------------------------------------------------------
FOOD-CANNED -- 0.6%
Del Monte Foods* 27,300 386
--------------
386
- -----------------------------------------------------------------
FOOD-DAIRY PRODUCTS -- 0.4%
Suiza Foods* 8,100 304
--------------
304
- -----------------------------------------------------------------
FOOD-MISCELLANEOUS / DIVERSIFIED -- 5.1%
Aurora Foods* 81,700 1,307
Dean Foods 20,300 884
International Home Foods* 55,800 977
Universal Foods 10,400 239
--------------
3,407
--------------
TOTAL CONSUMER NON-CYCLICAL (COST $7,001) 7,199
--------------
- -----------------------------------------------------------------
ENERGY -- 11.8%
COAL -- 0.6%
Alliance Resource Partner* 26,400 379
--------------
379
- -----------------------------------------------------------------
MARINE SERVICES -- 0.1%
Horizon Offshore* 8,200 66
--------------
66
- -----------------------------------------------------------------
OIL & GAS DRILLING -- 0.4%
Key Energy Services* 50,500 249
--------------
249
- -----------------------------------------------------------------
OIL COMPANIES-EXPLORATION & PRODUCTION-- 8.1%
Cabot Oil & Gas, Cl A 4,700 81
Devon Energy 21,100 874
EOG Resources 50,300 1,069
Evergreen Resources* 6,500 156
Forest Oil* 36,700 626
Houston Exploration* 24,300 527
Louis Dreyfus Natural Gas* 23,600 506
Newfield Exploration* 7,100 234
Santa Fe Snyder* 112,400 1,012
Swift Energy* 10,300 130
Vintage Petroleum 15,100 204
--------------
5,419
- -----------------------------------------------------------------
Market
Description Shares Value (000)
- -----------------------------------------------------------------
OIL FIELD MACHINERY & EQUIPMENT -- 1.0%
Cooper Cameron* 17,500 $ 661
--------------
661
- -----------------------------------------------------------------
OIL-FIELD SERVICES -- 0.7%
Core Labs N.V.* 26,300 495
--------------
495
- -----------------------------------------------------------------
PIPELINES -- 0.8%
KN Energy 23,600 529
--------------
529
- -----------------------------------------------------------------
SEISMIC DATA COLLECTION -- 0.1%
Veritas DGC* 4,200 81
--------------
81
--------------
TOTAL ENERGY (COST $7,397) 7,879
--------------
- -----------------------------------------------------------------
FINANCIAL -- 12.5%
COMMERCIAL BANKS-EASTERN US -- 0.4%
Commercial Bank of NY 20,000 235
Woronoco Bancorp* 5,600 57
--------------
292
- -----------------------------------------------------------------
COMMERCIAL BANKS-SOUTHERN US -- 0.7%
Southwest Bancorp of Texas* 24,800 432
--------------
432
- -----------------------------------------------------------------
COMMERCIAL BANKS-WESTERN US -- 3.6%
Bancwest 31,500 1,280
City National 2,200 74
Pacific Bank 32,000 800
Westamerica Bancorp 7,800 236
--------------
2,390
- -----------------------------------------------------------------
FINANCIAL GUARANTEE INSURANCE -- 0.6%
Financial Security Assurance 8,000 414
--------------
414
- -----------------------------------------------------------------
INVESTMENT MANAGEMENT/ADVISOR SERVICE-- 2.4%
Affiliated Managers Group* 34,800 948
Federated Investors, Cl B 39,800 687
--------------
1,635
- -----------------------------------------------------------------
LIFE/HEALTH INSURANCE -- 0.2%
Money Group 5,500 159
--------------
159
- -----------------------------------------------------------------
REITS-APARTMENTS -- 0.7%
Pennsylvania Real Estate
Investment Trust 6,800 128
United Dominion Realty Trust 30,500 341
--------------
469
- -----------------------------------------------------------------
REITS-DIVERSIFIED -- 0.3%
Duke-Weeks Realty 8,400 164
--------------
164
- -----------------------------------------------------------------
38
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG SMALL CAP VALUE FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
REITS-HOTEL/RESTAURANT -- 0.2%
Hospitality Properties Trust 4,900 $ 108
--------------
108
- ----------------------------------------------------------------
REITS-OFFICE PROPERTY -- 0.4%
Mack Cali Realty 9,100 244
--------------
244
- ----------------------------------------------------------------
REITS-REGIONAL MALLS -- 0.1%
Taubman Centers 8,300 95
--------------
95
- ----------------------------------------------------------------
REITS-SHOPPING CENTERS -- 0.9%
Federal Realty Investment Trust 2,200 46
Glimcher Realty Trust 900 13
JP Realty 33,100 567
--------------
626
- ----------------------------------------------------------------
REITS-WAREHOUSE/INDUSTRIAL -- 0.3%
Prologis Trust 9,600 181
--------------
181
- ----------------------------------------------------------------
S&L/THRIFTS-EASTERN US -- 1.7%
Roslyn Bancorp 43,200 772
Staten Island Bancorp 5,000 94
Webster Financial 12,000 306
--------------
1,172
--------------
TOTAL FINANCIAL (COST $8,763) 8,381
--------------
- ----------------------------------------------------------------
HEALTH CARE -- 8.3%
HEALTH CARE COST CONTAINMENT -- 0.1%
United Payors & United Providers* 2,300 41
--------------
41
- ----------------------------------------------------------------
MEDICAL INFORMATION SYSTEMS -- 0.1%
Allscripts* 5,000 79
--------------
79
- ----------------------------------------------------------------
MEDICAL INSTRUMENTS -- 0.1%
Novoste* 4,300 77
--------------
77
- ----------------------------------------------------------------
MEDICAL PRODUCTS -- 1.2%
PSS World Medical* 90,200 806
--------------
806
- ----------------------------------------------------------------
MEDICAL-DRUGS -- 0.8%
Dura Pharmaceuticals* 36,200 504
Triangle Pharmaceuticals* 1,600 31
--------------
535
- ----------------------------------------------------------------
MEDICAL-OUTPATIENT/HOME MEDICAL -- 0.5%
Lincare Holding* 12,400 331
--------------
331
- ----------------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------------
MEDICAL-WHOLESALE DRUG DISTRIBUTION-- 2.9%
Amerisource Health, Cl A* 69,400 $ 1,644
Bindly Western Industries 7,333 105
Syncor* 4,900 184
--------------
1,933
- ----------------------------------------------------------------
OPTICAL SUPPLIES -- 0.1%
Wesley Jessen Visioncare* 1,700 53
--------------
53
- ----------------------------------------------------------------
THERAPEUTICS -- 1.2%
United Therapeutics* 28,300 817
--------------
817
- ----------------------------------------------------------------
VETERINARY DIAGNOSTICS -- 1.3%
Veterinary Centers Of America* 75,200 860
--------------
860
--------------
TOTAL HEALTH CARE (COST $5,593) 5,532
--------------
- ----------------------------------------------------------------
INDUSTRIAL -- 9.8%
AEROSPACE/DEFENSE-EQUIPMENT -- 0.3%
BE Aerospace* 18,400 219
--------------
219
- ----------------------------------------------------------------
BUILDING & CONSTRUCTION PRODUCTS-MISCELLANEOUS-- 1.6%
Dal-Tile International* 26,000 206
Johns Manville 49,500 656
USG 4,200 200
--------------
1,062
- ----------------------------------------------------------------
BUILDING PRODUCTS-AIR & HEATING -- 0.8%
York International 15,000 539
--------------
539
- ----------------------------------------------------------------
BUILDING PRODUCTS-CEMENT/AGGREGATE-- 0.8%
Lafarge 10,800 347
U.S. Aggregates* 12,900 180
--------------
527
- ----------------------------------------------------------------
ELECTRIC PRODUCTS-MISCELLANEOUS -- 1.7%
Ametek 17,100 339
C-Cube Microsystems* 18,000 783
--------------
1,122
- ----------------------------------------------------------------
ELECTRONIC COMPONENTS-MISCELLANEOUS-- 2.3%
Benchmark Electronics* 10,200 360
DII Group* 33,500 1,179
--------------
1,539
- ----------------------------------------------------------------
ELECTRONIC MEASURING INSTRUMENTS -- 0.9%
Veeco Instruments* 1,000 28
Vishay Intertechnology* 22,400 532
--------------
560
- ----------------------------------------------------------------
39
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG SMALL CAP VALUE FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
ELECTRONICS-MILITARY -- 0.1%
Aeroflex* 3,700 $ 45
--------------
45
- ----------------------------------------------------------------
HAZARDOUS WASTE DISPOSAL -- 0.2%
Stericycle* 10,400 153
--------------
153
- ----------------------------------------------------------------
INSTRUMENTS-CONTROLS -- 0.0%
Frequency Electronics 1,700 16
--------------
16
- ----------------------------------------------------------------
METAL PROCESSORS & FABRICATORS -- 0.1%
NN Ball And Roller 14,000 89
--------------
89
- ----------------------------------------------------------------
NON-HAZARDOUS WASTE DISPOSAL -- 0.8%
Republic Services* 50,300 547
--------------
547
- ----------------------------------------------------------------
TRANSPORTATION-EQUIPMENT & LEASING-- 0.2%
Willis Lease Finance* 10,000 132
--------------
132
--------------
TOTAL INDUSTRIAL (COST $6,418) 6,550
--------------
- ----------------------------------------------------------------
SERVICES -- 0.7%
COMMERCIAL SERVICES -- 0.1%
Central Parking 2,700 79
--------------
79
- ----------------------------------------------------------------
HUMAN RESOURCES -- 0.3%
Personnel Group of America* 37,700 235
--------------
235
- ----------------------------------------------------------------
RESEARCH & DEVELOPMENT -- 0.3%
Aurora Biosciences* 12,900 176
--------------
176
--------------
TOTAL SERVICES (COST $451) 490
--------------
- ----------------------------------------------------------------
TECHNOLOGY -- 19.0%
CIRCUITS -- 0.7%
Hadco* 10,900 471
--------------
471
- ----------------------------------------------------------------
COMMUNICATIONS SOFTWARE -- 1.1%
Inter-Tel 42,900 761
--------------
761
- ----------------------------------------------------------------
COMPUTER GRAPHICS -- 0.3%
Visio* 4,600 181
--------------
181
- ----------------------------------------------------------------
Shares/Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------------
COMPUTER SOFTWARE -- 1.1%
Actuate* 5,000 $ 170
Symantec* 15,300 550
--------------
720
- ----------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 1.4%
Smart Modular Technologies* 28,700 978
--------------
978
- ----------------------------------------------------------------
DATA PROCESSING/MANAGEMENT -- 0.9%
Best Software* 31,800 628
--------------
628
- ----------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS-- 2.9%
Cirrus Logic* 12,800 141
Cypress Semiconductor* 10,100 217
Electroglas* 6,000 140
National Semiconductor* 11,100 339
Zoran* 40,300 1,093
--------------
1,930
- ----------------------------------------------------------------
INTERNET CONTENT -- 0.6%
Network Solutions* 2,700 248
Onesource Information Service* 6,000 49
Sportsline USA* 2,600 77
--------------
374
- ----------------------------------------------------------------
INTERNET SOFTWARE -- 0.6%
Edify* 14,800 185
Intervu* 1,500 56
Onemain.com* 9,300 153
--------------
394
- ----------------------------------------------------------------
NETWORKING PRODUCTS -- 0.3%
Xircom* 5,100 218
--------------
218
- ----------------------------------------------------------------
PRINTERS & RELATED PRODUCTS -- 0.9%
Splash Technologies* 100,300 614
--------------
614
- ----------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT -- 4.3%
Antec* 17,500 930
Com21* 39,700 516
Tekelec* 64,000 884
Teltrend* 2,500 50
Terayon Communication Services 9,800 479
--------------
2,859
- ----------------------------------------------------------------
TELECOMMUNICATIONS SERVICES -- 0.5%
GST Telecommunications* 14,900 105
TTI Team Telecom International* 20,000 204
--------------
309
- ----------------------------------------------------------------
40
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
----------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG SMALL CAP VALUE FUND
Shares/Face Market
Description Amount (000) Value (000)
- -----------------------------------------------------------------
WIRELESS EQUIPMENT -- 3.4%
P-Com* 62,000 $ 434
Pinnacle Holdings* 55,800 1,458
Powerwave Technologies* 8,500 410
--------------
2,302
--------------
TOTAL TECHNOLOGY (COST $10,695) 12,739
--------------
- -----------------------------------------------------------------
TRANSPORTATION -- 2.6%
AIRLINES -- 2.5%
Mesaba Holdings* 66,600 782
Midway Airlines* 100,200 639
Skywest 12,000 263
--------------
1,684
- -----------------------------------------------------------------
TRANSPORTATION-TRUCK -- 0.1%
US Xpress Enterprises, Cl A* 10,800 63
--------------
63
--------------
TOTAL TRANSPORTATION (COST $3,045) 1,747
--------------
- -----------------------------------------------------------------
UTILITIES -- 1.1%
ELECTRIC-INTEGRATED -- 0.4%
Idacorp 3,000 90
Puget Sound Energy 9,200 207
--------------
297
- -----------------------------------------------------------------
GAS DISTRIBUTION -- 0.7%
MCN Energy Group 10,000 172
UGI 13,500 314
--------------
486
--------------
TOTAL UTILITIES (COST $800) 783
--------------
TOTAL COMMON STOCK (COST $67,116) 65,838
--------------
- -----------------------------------------------------------------
REPURCHASE AGREEMENT -- 6.2%
Morgan Agency
5.23%, dated 09/30/99, matures
10/01/99, repurchase price $4,117,940
(collateralized by U.S. Government
Agencies: total market
value $4,226,733) (A) $4,117 4,117
--------------
TOTAL REPURCHASE AGREEMENT (COST $4,117) 4,117
--------------
TOTAL INVESTMENTS-- 104.4% (COST $71,233) 69,955
--------------
- -----------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (4.4)%
Payable for securities purchased (5,478)
Other assets and liabilities 2,548
--------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (2,930)
--------------
- -----------------------------------------------------------------
Market
Description Value (000)
- -----------------------------------------------------------------
NET ASSETS:
Fund Shares of Pbhg Class (authorized 200 million
shares -- $0.001 par value) based on
4,993,934 outstanding shares of common stock $ 71,016
Accumulated net investment loss (166)
Accumulated net realized loss on investments (2,547)
Net unrealized depreciation on investments (1,278)
--------------
TOTAL NET ASSETS-- 100.0% $ 67,025
--------------
--------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $13.42
--------------
--------------
* Non-income producing security
(A) -- Tri-party repurchase agreement
Cl -- Class
The accompanying notes are an integral part of the financial statements.
41
<PAGE>
THE PBHG FUNDS, INC.
PBHG FOCUSED VALUE FUND (UNAUDITED)
PBHG FOCUSED VALUE FUND
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN
THE PBHG FOCUSED VALUE FUND, VERSUS THE S&P 500 INDEX
AND THE LIPPER MULTI-CAP VALUE FUNDS AVERAGE
[LINE GRAPH OMITTED]
PBHG S&P LIPPER
FOCUSED 500 MULTI-CAP
VALUE FUND INDEX4 FUNDS AVERAGE5
2/28/99 $10000 $10000 $10000
3/99 10205 10400 10327
4/99 10127 10802 11041
5/99 10517 10548 10998
6/99 11396 11133 11385
7/99 11620 10786 11049
8/99 11640 10732 10711
9/99 11718 10438 10294
1 Performance is historical and not indicative of future results. The
investment return and principal value of an investment will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
2 The six month return has not been annualized.
3 Total return has not been annualized. The PBHG Focused Value Fund commenced
operations on February 12, 1999.
4 The S&P 500 Index is a capitalization-weighted index of 500 stocks. The
index is designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing all
major industries. The Index is not intended to imply the Fund's past or
future performance.
5 The Lipper Multi-Cap Value Funds Average represents the average performance
of all mutual funds classified by Lipper, Inc. in the Multi-Cap Value
category. These performance figures are based on the changes in net asset
value of the funds in the category with all capital gains distributions and
income dividends reinvested. The index is not intended to imply the Fund's
past or future performance.
Cumulative Total Return1
As of September 30, 1999
- --------------------------------------------------------------------
6 Cumulative Return
Months2 Inception to Date3
- --------------------------------------------------------------------
PBHG Focused Value Fund 14.82% 16.38%
- --------------------------------------------------------------------
Sector Weightings
at September 30, 1999
[PIE CHART OMITTED]
Healthcare (22%)
Consumer Cyclical (7%)
Consumer Non-Cyclical (12%)
Energy (5%)
Financial (10%)
Industrial (7%)
Services (9%)
Technology (18%)
Utilities (4%)
Cash (6%)
% of Total Portfolio Investments
42
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG FOCUSED VALUE FUND
Market
Description Shares Value (000)
- -----------------------------------------------------------------
COMMON STOCK -- 98.7%
CONSUMER CYCLICAL -- 7.1%
RETAIL-APPAREL/SHOE -- 4.1%
Ann Taylor Stores* 4,000 $ 164
-------------
164
- -----------------------------------------------------------------
RETAIL-CONSUMER ELECTRONICS -- 3.0%
Circuit City Stores 2,800 118
-------------
118
-------------
TOTAL CONSUMER CYCLICAL (COST $262) 282
-------------
- -----------------------------------------------------------------
CONSUMER NON-CYCLICAL -- 12.4%
FOOD-CANNED -- 3.6%
Del Monte Foods* 10,000 141
-------------
141
- -----------------------------------------------------------------
FOOD-MISCELLANEOUS / DIVERSIFIED -- 5.0%
Nabisco Group Holdings 13,300 200
-------------
200
- -----------------------------------------------------------------
FOOD-RETAIL -- 3.8%
Safeway* 4,000 152
-------------
152
-------------
TOTAL CONSUMER NON-CYCLICAL (COST $612) 493
-------------
- -----------------------------------------------------------------
ENERGY -- 4.7%
OIL COMPANIES-EXPLORATION & PRODUCTION -- 4.7%
Santa Fe Snyder 21,000 189
-------------
189
-------------
TOTAL ENERGY (COST $192) 189
-------------
- -----------------------------------------------------------------
FINANCIAL -- 11.0%
COMMERCIAL BANKS-EASTERN US -- 4.3%
Woronoco Bancorp 17,000 172
-------------
172
- -----------------------------------------------------------------
COMMERCIAL BANKS-WESTERN US -- 6.7%
Zions Bancorporation 4,800 265
-------------
265
-------------
TOTAL FINANCIAL (COST $426) 437
-------------
- -----------------------------------------------------------------
HEALTH CARE -- 23.4%
DRUG DELIVERY SYSTEMS -- 4.6%
Elan Corporation ADR* 5,400 181
-------------
181
- -----------------------------------------------------------------
MEDICAL PRODUCTS -- 11.0%
Baxter International 3,000 181
PSS World Medical* 28,800 258
-------------
439
- -----------------------------------------------------------------
Market
Description Shares Value (000)
- -----------------------------------------------------------------
MEDICAL-DRUGS -- 6.6%
Forest Laboratories* 4,200 $ 177
Schering-Plough 2,000 87
-------------
264
- -----------------------------------------------------------------
THERAPEUTICS -- 1.2%
United Therapeutics* 1,700 49
-------------
49
-------------
TOTAL HEALTH CARE (COST $966) 933
- -----------------------------------------------------------------
INDUSTRIAL -- 7.8%
AEROSPACE/DEFENSE-EQUIPMENT -- 2.3%
General Dynamics 1,500 94
-------------
94
- -----------------------------------------------------------------
BUILDING PRODUCTS-CEMENT/AGGREGATE-- 3.5%
U.S. Aggregates* 10,000 139
-------------
139
- -----------------------------------------------------------------
ELECTRONIC COMPONENTS-MISCELLANEOUS-- 2.0%
Solectron* 1,100 79
-------------
79
-------------
TOTAL INDUSTRIAL (COST $311) 312
-------------
- -----------------------------------------------------------------
SERVICES -- 9.6%
TELEPHONE-LOCAL -- 9.6%
US West 6,700 382
-------------
382
-------------
TOTAL SERVICES (COST $373) 382
-------------
- -----------------------------------------------------------------
TECHNOLOGY -- 18.3%
ELECTRONIC COMPONENTS-SEMICONDUCTORS-- 5.9%
Texas Instruments 2,000 165
Zoran* 2,700 73
-------------
238
- -----------------------------------------------------------------
INTERNET CONTENT -- 0.7%
Looksmart Limited* 1,200 28
-------------
28
- -----------------------------------------------------------------
NETWORKING PRODUCTS -- 0.9%
Netplex Group* 15,000 36
-------------
36
- -----------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT -- 8.3%
Antec* 1,000 53
General Instrument* 700 34
Terayon Communication Systems* 5,000 244
-------------
331
- -----------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 2.5%
RCN* 2,400 98
-------------
98
-------------
TOTAL TECHNOLOGY (COST $608) 731
-------------
- -----------------------------------------------------------------
43
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG FOCUSED VALUE FUND
Shares/Face Market
Description Amount (000) Value (000)
- -----------------------------------------------------------------
UTILITIES -- 4.4%
ELECTRIC-INTEGRATED -- 4.4%
Minnesota Power 10,000 $ 176
-------------
176
-------------
TOTAL UTILITIES (COST $179) 176
-------------
TOTAL COMMON STOCK (COST $3,929) 3,935
-------------
- -----------------------------------------------------------------
REPURCHASE AGREEMENT -- 6.2%
Morgan Stanley
5.00%, dated 09/30/99, matures 10/01/99,
repurchase price $248,161 (collateralized
by U.S. Treasury Obligations:
total market value $253,884) (A) $248 248
-------------
TOTAL REPURCHASE AGREEMENT (COST $248) 248
-------------
TOTAL INVESTMENTS-- 104.9% (COST $4,177) 4,183
-------------
- -----------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (4.9)%
Payable for securities purchased (251)
Other assets and liabilities 56
-------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (195)
-------------
- -----------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 200
million shares -- $0.001 par value)
based on 332,047 outstanding shares
of common stock 3,417
Accumulated net investment loss (7)
Accumulated net realized gain on investments 611
Net unrealized depreciation on investments (33)
-------------
TOTAL NET ASSETS-- 100.0% $ 3,988
-------------
-------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $12.01
-------------
-------------
* Non-income producing security
(A) -- Tri-party repurchase agreement
ADR -- American Depository Receipt
The accompanying notes are an integral part of the financial statements.
44
<PAGE>
THE PBHG FUNDS, INC.
PBHG INTERNATIONAL FUND (UNAUDITED)
PBHG INTERNATIONAL FUND
COMPARISON OF CHANGE IN THE VALUE OF A $10,000
INVESTMENT IN THE PBHG INTERNATIONAL FUND, VERSUS THE MSCI EAFE
INDEX AND THE LIPPER INTERNATIONAL FUNDS AVERAGE
[LINE GRAPH OMITTED]
PBHG LIPPER MSCI
INTERNATIONAL INTERNATIONAL FUNDS EAFE
FUND AVERAGE5 INDEX4
6/30/94 $10000 $10000 $10000
7/31/94 10060 10097 10272
8/31/94 10241 10336 10570
9/30/94 10040 10011 10312
10/31/94 10070 10344 10511
11/30/94 9679 9847 9999
12/31/94 9829 9909 9906
1/31/95 9163 9528 9422
2/28/95 8992 9501 9438
3/31/95 9204 10094 9754
4/30/95 9486 10474 10065
5/31/95 9355 10349 10156
6/30/95 9506 10167 10161
7/31/95 9748 10800 10704
8/31/95 9536 10388 10503
9/30/95 9698 10591 10660
10/31/95 9436 10306 10451
11/30/95 9657 10593 10566
12/31/95 10030 11020 10876
1/31/96 10383 11065 11123
2/29/96 10424 11103 11172
3/31/96 10635 11338 11364
4/30/96 10958 11668 11724
5/31/96 10887 11453 11700
6/30/96 10928 11517 11778
7/31/96 10464 11181 11345
8/31/96 10605 11206 11478
9/30/96 10837 11504 11728
10/31/96 10807 11386 11655
11/30/96 11270 11840 12161
12/31/96 11301 11687 12205
1/31/97 11291 11278 12178
2/28/97 11341 11463 12346
3/31/97 11351 11504 12374
4/30/97 11401 11565 12409
5/31/97 12107 12318 13143
6/30/97 12762 12997 13757
7/31/97 13045 13208 14151
8/31/97 11936 12221 13130
9/30/97 12752 12906 13951
10/31/97 11694 11914 12888
11/30/97 11583 11792 12776
12/31/97 11694 11895 12882
1/31/98 12192 12439 13181
2/28/98 12901 13238 14056
3/31/98 13333 13645 14776
4/30/98 13355 13753 14977
5/31/98 13189 13686 14993
6/30/98 13023 13790 14876
7/31/98 13565 13930 15095
8/31/98 11749 12204 12942
9/30/98 11428 11830 12482
10/31/98 12347 13063 13408
11/30/98 13067 13732 14102
12/31/98 13183 14274 14535
1/31/99 13242 14232 14653
2/28/99 13020 13893 14269
3/31/99 13522 14472 14768
4/30/99 14023 15059 15448
5/31/99 13114 14283 14816
6/30/99 13638 14840 15589
7/31/99 13650 15281 15987
8/31/99 13778 15337 16129
9/30/99 13883 15491 16192
1 Performance is historical and not indicative of future results. The
investment return and principal value of an investment will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
2 The six month return has not been annualized.
3 The PBHG International Fund commenced operations on June 15, 1994.
4 The MSCI EAFE Index is the Morgan Stanley Capital International Index for
Europe, Australia and the Far East developed markets. It includes 60% of the
largest publicly traded companies in those regions by market capitalization
and is sector weighted. The index reflects the reinvestment of income
dividends and capital gain distributions, if any, but does not reflect fees,
brokerage commissions, or other expenses of investing. The Index is not
intended to imply the Fund's past or future performance.
5 The Lipper International Funds Average represents the average performance of
all mutual funds classified by Lipper, Inc. in the International category.
These performance figures are based on the changes in net asset value of the
funds in the category with all capital gains distributions and income
dividends reinvested. The index is not intended to imply the Fund's past or
future performance.
Average Annual Total Return1
As of September 30, 1999
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Annualized Annualized Annualized
6 One Year 3 Year 5 Year Inception
Months2 Return Return Return to Date3
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PBHG International Fund 2.67% 21.48% 8.61% 6.70% 6.31%
- -------------------------------------------------------------------------------------
</TABLE>
Country Weightings
at September 30, 1999
[PIE CHART OMITTED]
Brazil (3%)
France (15%)
Germany (10%)
Ireland (2%)
Italy (6%)
Japan (30%)
Netherlands (7%)
Singapore (2%)
Spain (1%)
Switzerland (2%)
United Kingdom (13%)
Other (9%)
% of Total Portfolio Investments
45
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG INTERNATIONAL FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
FOREIGN COMMON STOCK -- 97.0%
ARGENTINA -- 2.5%
Banco Frances Rio* 7,000 $ 139
Telecom Argentina* 4,500 120
----------
259
- ----------------------------------------------------------------
AUSTRALIA -- 2.0%
National Australia Bank* 7,000 102
WMC* 20,000 102
----------
204
- ----------------------------------------------------------------
BRAZIL -- 2.6%
Companhia Paranaese* 21,000 138
Telesp Part ADR* 8,500 134
----------
272
- ----------------------------------------------------------------
FRANCE -- 11.0%
Cie De St Gobain* 1,739 325
Suez Lyonnaise Des Eaux* 3,081 501
Vivendi* 4,272 301
----------
1,127
- ----------------------------------------------------------------
GERMANY -- 9.4%
Mannesmann* 3,399 545
Marschollek Lauten* 2,409 420
----------
965
- ----------------------------------------------------------------
HONG KONG -- 1.0%
Cheung Kong* 12,000 100
----------
100
- ----------------------------------------------------------------
IRELAND -- 1.7%
Allied Irish Bank* 7,909 96
Bank Of Ireland* 9,772 80
----------
176
- ----------------------------------------------------------------
ITALY -- 6.2%
Telecom Italia* 50,550 441
Telecom Italia Mobile* 31,994 200
----------
641
- ----------------------------------------------------------------
JAPAN -- 29.0%
Bridgestone* 6,000 168
Fuji Machine* 4,000 192
Kurita Water* 9,000 183
Matsushita Communications* 2,000 223
Nippon Comsys* 10,000 210
NTT* 10 198
Olympus Optical* 16,000 217
Rohm Company Limited* 1,000 209
Secom* 1,000 89
Secom* 1,000 91
Sharp* 12,000 193
Shinmaywa Industries* 62,000 180
Sumitomo Bank* 14,000 211
TDK* 2,000 232
Ushio* 14,000 200
Yamanouchi Pharmaceutical* 4,000 188
----------
2,984
- ----------------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------------
MEXICO -- 2.3%
Tubos Acero Mexico ADR* 19,000 $ 233
----------
233
- ----------------------------------------------------------------
NETHERLANDS -- 9.7%
Equant ADR* 4,163 339
ING Groep 7,340 400
Vnu Ver Ned Uitg Bezit* 7,498 261
----------
1,000
- ----------------------------------------------------------------
NEW ZEALAND -- 1.0%
Carter Holt Harvey 48,000 58
Telecom Corp of N.Z.* 12,500 49
----------
107
- ----------------------------------------------------------------
SINGAPORE -- 2.3%
City Developments* 30,000 153
Singapore Press Holdings* 5,500 87
----------
240
- ----------------------------------------------------------------
SPAIN -- 1.0%
Superdiplo SA* 5,074 105
----------
105
- ----------------------------------------------------------------
SWITZERLAND -- 2.3%
Zurich Allied 423 237
----------
237
- ----------------------------------------------------------------
UNITED KINGDOM -- 13.0%
Abbey National* 5,400 96
Barclays 4,500 132
BP Amoco* 5,800 106
British Aerospace* 8,200 54
British Telecom 4,600 70
FKI Ord* 10,000 31
GKN* 6,400 102
Imperial Chemical Industries 6,300 70
Lloyds TSB Group* 5,800 72
Norwich Union* 18,700 135
Pearson* 5,800 124
Shell Transportation & Trading* 10,400 78
Smithkline Beecham* 9,800 113
Vodafone* 3,000 71
Whitbread, Cl A* 6,300 79
----------
1,333
----------
TOTAL FOREIGN COMMON STOCK (COST $7,176) 9,983
----------
TOTAL INVESTMENTS-- 97.0% (COST $7,176) 9,983
----------
- ----------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- 3.0%
OTHER ASSETS AND LIABILITIES, NET 307
----------
- ----------------------------------------------------------------
46
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
------------------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG INTERNATIONAL FUND
Market
Description Value (000)
- ----------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 200
million shares -- $0.001 par value)
based on 864,146 outstanding shares
of common stock $ 5,961
Accumulated net investment loss (40)
Accumulated net realized gain on investments 1,561
Net unrealized appreciation on investments 2,808
----------
TOTAL NET ASSETS-- 100.0% $10,290
----------
----------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $11.91
----------
----------
* Non-income producing security
ADR -- American Depository Receipt
Cl -- Class
The accompanying notes are an integral part of the financial statements.
47
<PAGE>
THE PBHG FUNDS, INC.
PBHG CASH RESERVES FUND (UNAUDITED)
PBHG CASH RESERVES FUND
COMPARISON OF TOTAL RETURN, AS OF SEPTEMBER 30, 1999
FOR THE PBHG CASH RESERVES FUND, VERSUS
THE LIPPER MONEY MARKET FUNDS AVERAGE1
[BAR GRAPH OMITTED]
PBHG CASH RESERVES FUND LIPPER MONEY MARKET FUNDS AVERAGE2
ONE YEAR 4.54% 4.41%
1 Performance is historical and not indicative of future results.
2 The Lipper Money Market Funds Average represents the average performance of
all mutual funds classified by Lipper, Inc. in the Money Market category.
These performance figures are based on the changes in net asset value of the
funds in the category with all capital gains distributions and income
dividends reinvested. The index is not intended to imply the Funds past or
future performance.
Sector Weightings
at September 30, 1999
[PIE CHART OMITTED]
Certificates of Deposit (3%)
Bank Notes (1%)
Commercial Paper (35%)
Corporate Obligations (1%)
Cash (60%)
% of Total Portfolio Investments
48
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG CASH RESERVES FUND
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------------
BANK NOTES -- 1.2%
Harris Bankcorp
5.00%, 02/04/00 $2,000 $ 2,000
US Bank Note
5.92%, 10/02/00 1,000 999
----------
TOTAL BANK NOTES (COST $2,999) 2,999
----------
- ----------------------------------------------------------------
CERTIFICATES OF DEPOSIT -- 2.9%
Bank Scotland
5.73%, 07/03/00 2,000 2,000
First Tennessee
5.38%, 11/23/99 3,000 3,000
Royal Bank of Canada
5.70%, 07/03/00 2,000 1,999
----------
TOTAL CERTIFICATES OF DEPOSIT (COST $6,999) 6,999
----------
- ----------------------------------------------------------------
COMMERCIAL PAPER -- 34.7%
Aesop Funding
5.40%, 10/29/99 3,000 2,987
Alcoa
5.29%, 10/22/99 3,000 2,991
American Home Products
5.73%, 02/23/00 3,000 2,931
Apreco
5.38%, 11/15/99 2,800 2,781
Archer-Daniels Midland
5.30%, 11/23/99 3,000 2,977
Associates Corp of America
5.15%, 10/05/99 3,000 2,998
Becton Dickinson
5.35%, 11/12/99 3,000 2,981
Centric Capital
5.38%, 11/30/99 3,000 2,973
Clorox
5.29%, 10/07/99 3,000 2,997
Coca-Cola Company
5.12%, 10/15/99 3,000 2,994
Columbia University
5.33%, 12/10/99 2,550 2,524
Dean Foods
5.31%, 11/19/99 3,000 2,978
Falcon Asset Securitization
5.39%, 11/10/99 3,000 2,982
Fleet Funding
5.80%, 02/17/00 3,000 2,933
Fortune Brands
5.30%, 11/05/99 3,000 2,985
General Motors Acceptance Corporation
5.16%, 10/07/99 3,000 2,997
Goldman Sachs Group
5.30%, 11/22/99 3,000 2,977
GTE Funding
5.32%, 10/07/99 3,000 2,997
Harvard University
5.60%, 10/01/99 2,921 2,921
Merrill Lynch & Company
5.30%, 11/23/99 3,000 2,977
Metlife Funding
5.30%, 10/14/99 3,000 2,994
Mont Blanc Capital
5.37%, 11/18/99 3,000 2,978
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------------
Petrofina Delaware
5.30%, 10/12/99 $3,000 $ 2,995
PPG Industries
5.30%, 10/20/99 3,000 2,992
Preferred Receivables Funding Corporation
5.36%, 10/28/99 3,000 2,988
Procter & Gamble
5.31%, 12/17/99 3,000 2,966
Times Mirror
5.30%, 10/19/99 3,000 2,992
Unifunding
5.15%, 10/04/99 3,000 2,999
Washington Gas Light
5.30%, 10/22/99 3,000 2,991
----------
TOTAL COMMERCIAL PAPER (COST $85,776) 85,776
----------
- ----------------------------------------------------------------
CORPORATE OBLIGATIONS -- 1.2%
IBM
5.95%, 08/17/00 3,000 2,998
----------
TOTAL CORPORATE OBLIGATIONS (COST $2,998) 2,998
----------
- ----------------------------------------------------------------
REPURCHASE AGREEMENTS -- 60.3%
Bank of New York Repo
5.30%, dated 9/30/99, matures 10/01/99,
repurchase price $60,008,833 (collateralized by
U.S. Government Obligations: total market
value $64,852,845) 60,000 60,000
Chase Bank Repo
5.38%, dated 9/30/99, matures 10/01/99,
repurchase price $30,004,483 (collateralized by
U.S. Government Obligations: total market
value $30,597,459) 30,000 30,000
Lehman Brothers Repo
5.25%, dated 9/30/99, matures 10/01/99,
repurchase price $9,064,322 (collateralized by
U.S. Government Obligations: total market
value $9,325,580) (A) 9,063 9,063
Paribas Repo
5.29%, dated 9/30/99, matures 10/01/99,
repurchase price $50,007,347 (collateralized by
U.S. Government Obligations: total market
value $50,811,176) (A) 50,000 50,000
----------
TOTAL REPURCHASE AGREEMENTS (COST $149,063) 149,063
----------
TOTAL INVESTMENTS-- 100.3% (COST $247,835) 247,835
----------
- ----------------------------------------------------------------
OTHER ASSETS AND LIABILITIES
Other Assets And Liabilities, Net (622)
----------
TOTAL OTHER ASSETS AND LIABILITIES-- (0.3%) (622)
----------
- ----------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 1 billion,
800 million -- $0.001 par value) based on
247,214,514 outstanding shares of common stock 247,215
Undistributed net investment income 3
Accumulated net realized loss on investments (5)
----------
TOTAL NET ASSETS-- 100.0% $ 247,213
----------
----------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $1.00
----------
----------
(A) -- Tri-Party Repurchase Agreement
The accompanying notes are an integral part of the financial statements.
49
<PAGE>
THE PBHG FUNDS, INC.
PBHG TECHNOLOGY & COMMUNICATIONS FUND (UNAUDITED)
PBHG TECHNOLOGY & COMMUNICATIONS FUND
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
IN THE PBHG TECHNOLOGY & COMMUNICATIONS FUND, VERSUS
THE SOUNDVIEW TECHNOLOGY INDEX AND THE
LIPPER SCIENCE & TECHNOLOGY FUNDS AVERAGE
[LINE GRAPH OMITTED]
PBHG SOUNDVIEW LIPPER SCIENCE
TECHNOLOGY & TECHNOLOGY & TECHNOLOGY
COMMUNICATION FUND INDEX4 FUNDS AVERAGE5
9/30/95 $10000 $10000 $10000
3/96 12481 10833 9548
9/96 16641 13470 10776
3/97 14926 12990 10355
9/97 22414 18558 14544
3/98 20641 17429 14832
9/98 17995 15451 13640
3/99 29997 23796 22522
9/99 37913 30897 27461
1 Performance is historical and not indicative of future results. The
investment return and principal value of an investment will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
2 The six month return has not been annualized.
3 The PBHG Technology & Communications Fund commenced operations on September
29, 1995.
4 The Soundview Technology Index is an equal dollar weighted index designed to
measure the performance of the technology industry. It is comprised of 100
major technology companies chosen by Soundview Financial Group. The Index
reflects the reinvestment of income dividends and capital gain
distributions, if any, but does not reflect fees, brokerage commissions, or
other expenses of investing. The Index is not intended to imply the Fund's
past or future performance.
5 The Lipper Science & Technology Funds Average represents the average
performance of all mutual funds classified by Lipper, Inc. in the Science &
Technology category. These performance figures are based on the changes in
net asset value of the funds in the category with all capital gains
distributions and income dividends reinvested. The index is not intended to
imply the Fund's past or future performance.
Average Annual Total Return1
As of September 30, 1999
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Annualized Annualized
6 One Year 3 Year Inception
Months2 Return Return to Date3
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PBHG Technology & Communications Fund 26.39% 110.68% 31.58% 39.61%
- -------------------------------------------------------------------------------------
</TABLE>
Sector Weightings
at September 30, 1999
[PIE CHART OMITTED]
Consumer Cyclical (2%)
Industrial (6%)
Technology (90%)
Cash (2%)
% of Total Portfolio Investments
50
<PAGE>
THE PBHG FUNDS, INC.
SCHEDULE OF INVESTMENTS
-----------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG TECHNOLOGY & COMMUNICATIONS FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
COMMON STOCK -- 96.5%
CONSUMER CYCLICAL -- 1.7%
AUDIO/VIDEO PRODUCTS -- 1.7%
Gemstar International* 165,600 $ 12,938
-----------
12,938
-----------
TOTAL CONSUMER CYCLICAL (COST $11,089) 12,938
-----------
- ----------------------------------------------------------------
INDUSTRIAL -- 5.6%
DIVERSIFIED MANUFACTURING OPERATIONS-- 0.7%
Corning 78,400 5,375
-----------
5,375
- ----------------------------------------------------------------
ELECTRONIC COMPONENTS-MISCELLANEOUS-- 0.4%
DII Group* 77,200 2,717
-----------
2,717
- ----------------------------------------------------------------
ELECTRONIC MEASURING INSTRUMENTS -- 0.9%
Teradyne* 193,600 6,824
-----------
6,824
- ----------------------------------------------------------------
MACHINERY-GENERAL INDUSTRIAL -- 2.4%
Applied Materials* 243,100 18,886
-----------
18,886
- ----------------------------------------------------------------
POWER CONVERSION/SUPPLY EQUIPMENT -- 1.2%
Power-One* 355,600 9,068
-----------
9,068
-----------
TOTAL INDUSTRIAL (COST $39,872) 42,870
-----------
- ----------------------------------------------------------------
TECHNOLOGY -- 89.2%
APPLICATIONS SOFTWARE -- 1.7%
BEA Systems* 241,500 8,528
Quest Software* 96,600 4,492
-----------
13,020
- ----------------------------------------------------------------
CELLULAR TELECOMMUNICATIONS -- 0.9%
VoiceStream Wireless* 111,800 6,900
-----------
6,900
- ----------------------------------------------------------------
CIRCUITS -- 4.5%
Analog Devices* 214,400 10,988
Integrated Device Technology* 828,000 15,318
Maxim Integrated Products* 127,000 8,013
-----------
34,319
- ----------------------------------------------------------------
COMPUTER DATA SECURITY -- 2.1%
Check Point Software* 187,600 15,840
-----------
15,840
- ----------------------------------------------------------------
COMPUTER SOFTWARE -- 2.5%
Microsoft* 207,200 18,765
-----------
18,765
- ----------------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------------
COMPUTERS-INTEGRATED SYSTEMS -- 1.9%
ASM Lithography Holdings* 214,200 $ 14,365
-----------
14,365
- ----------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 3.5%
EMC* 185,900 13,280
Veritas Software* 176,200 13,380
-----------
26,660
- ----------------------------------------------------------------
COMPUTERS-MICRO -- 1.1%
Sun Microsystems* 92,700 8,621
-----------
8,621
- ----------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS-- 20.1%
Conexant Systems* 115,700 8,406
Cypress Semiconductor* 537,500 11,556
LSI Logic* 831,200 42,807
Micron Technology 57,500 3,827
QLogic* 138,800 9,690
Stmicroelectronics N.V.* 188,300 13,935
Transwitch* 120,000 6,840
Triquint Semiconductor* 299,500 17,128
Xilinx* 596,600 39,096
-----------
153,285
- ----------------------------------------------------------------
FIBER OPTICS -- 4.4%
Ciena* 248,900 9,085
JDS Uniphase* 216,700 24,663
-----------
33,748
- ----------------------------------------------------------------
INTERNET CONTENT -- 9.8%
Digital Insight* 10,000 150
Go2net* 217,300 14,070
Infospace.com* 224,600 9,236
Inktomi* 153,100 18,377
Network Solutions* 93,800 8,618
Yahoo* 134,300 24,107
-----------
74,558
- ----------------------------------------------------------------
INTERNET SOFTWARE -- 11.8%
Allaire* 59,000 3,304
America Online* 85,300 8,871
At Home, Series A* 175,300 7,264
Concentric Network* 91,400 1,856
Exodus Communications* 180,600 13,014
Internap Network Service* 232,700 10,384
Lycos* 509,400 25,534
Netzero* 145,300 3,778
PSINet * 200,500 7,212
Verio* 279,600 8,668
-----------
89,885
- ----------------------------------------------------------------
NETWORKING PRODUCTS -- 9.5%
Ancor Communications* 42,500 1,030
Cabletron Systems* 49,100 770
Cisco Systems* 425,900 29,201
Emulex* 349,900 30,048
Extreme Networks* 103,200 6,534
Juniper Networks* 25,100 4,570
-----------
72,153
- ----------------------------------------------------------------
51
<PAGE>
THE PBHG FUNDS, INC.
SCHEDULE OF INVESTMENTS
- ----------------------------------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG TECHNOLOGY & COMMUNICATIONS FUND
Shares/Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------------
PRINTERS & RELATED PRODUCTS -- 0.7%
Electronics for Imaging* 110,000 $ 5,655
---------
5,655
- ----------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT -- 10.7%
Antec* 323,400 17,181
General Instrument* 347,800 16,738
Nortel Networks 128,500 6,553
Qualcomm* 216,200 40,902
---------
81,374
- ----------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 3.5%
Amdocs Limited* 259,800 5,456
Level 3 Communications* 169,000 8,825
MRV Communications* 312,500 7,402
RCN* 121,400 4,978
---------
26,661
- ----------------------------------------------------------------
WIRELESS EQUIPMENT -- 0.5%
Motorola 41,800 3,678
---------
3,678
---------
TOTAL TECHNOLOGY (COST $533,516) 679,487
---------
TOTAL COMMON STOCK (COST $584,477) 735,295
---------
- ----------------------------------------------------------------
REPURCHASE AGREEMENT -- 2.3%
J.P. Mortgage
5.29%, dated 09/30/99, matures
10/01/99, repurchase price $6,657,634
(collateralized by U.S. Government
Obligations: total market
value $6,789,803) (A) $6,656 6,656
Morgan GNMA
5.29%, dated 09/30/99, matures
10/01/99, repurchase price $10,539,074
(collateralized by U.S. Government
Obligations: total market
value $10,763,088) (A) 10,538 10,538
---------
TOTAL REPURCHASE AGREEMENT (COST $17,194) 17,194
---------
TOTAL INVESTMENTS-- 98.8% (COST $601,671) $752,489
---------
---------
Percentages indicated are based on net assets of $761,613,593
* Non-Income Producing Security
(A) -- Tri-Party Repurchase Agreement
The accompanying notes are an integral part of the financial statements.
52
<PAGE>
THE PBHG FUNDS, INC.
PBHG STRATEGIC SMALL COMPANY FUND (UNAUDITED)
PBHG STRATEGIC SMALL COMPANY FUND
COMPARISON OF CHANGE IN THE VALUE OF A $10,000
INVESTMENT IN THE PBHG STRATEGIC SMALL COMPANY FUND,
VERSUS THE RUSSELL 2000 INDEX AND THE LIPPER SMALL-CAP GROWTH FUNDS AVERAGE
[LINE GRAPH OMITTED]
PBHG RUSSELL LIPPER
STRATEGIC 2000 SMALL-CAP GROWTH
COMPANY FUND INDEX4 FUNDS AVERAGE5
12/31/96 $10000 $10000 $10000
1/31/97 10120 10200 10235
2/28/97 9350 9952 9546
3/31/97 8860 9483 8879
4/30/97 8750 9509 8734
5/31/97 10270 10567 10000
6/30/97 11130 11020 10586
7/31/97 12170 11533 11258
8/31/97 12410 11797 11483
9/30/97 13440 12660 12444
10/31/97 12820 12104 11790
11/30/97 12520 12026 11540
12/31/97 12567 12236 11580
1/31/98 12502 12043 11417
2/28/98 13439 12933 12379
3/31/98 13870 13467 12988
4/30/98 13999 13541 13092
5/31/98 12922 12812 12192
6/30/98 13073 12839 12488
7/31/98 12244 11800 11575
8/31/98 9466 9508 9017
9/30/98 10004 10252 9741
10/31/98 10381 10671 10180
11/30/98 11501 11230 11055
12/31/98 12835 11924 12242
1/31/99 13105 12083 12547
2/28/99 11957 11104 11419
3/31/99 11856 11278 11937
4/30/99 12092 12288 12480
5/31/99 12576 12468 12603
6/30/99 13937 13032 13746
7/31/99 13960 12674 13711
8/31/99 14083 12205 13515
9/30/99 14306 12207 13954
1 Performance is historical and not indicative of future results. The
investment return and principal value of an investment will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
2 The six month return has not been annualized.
3 The PBHG Strategic Small Company Fund commenced operations on December 31,
1996.
4 The Russell 2000 Index is an unmanaged index comprised of the 2,000 smallest
securities in the Russell 3000 Index. The Index reflects the reinvestment of
income dividends and capital gains distributions, if any, but does not
reflect fees, brokerage commissions, or other expenses of investing. The
Index is not intended to imply the Fund's past or future performance.
5 The Lipper Small-Cap Growth Funds Average represents the average performance
of all mutual funds classified by Lipper, Inc. in the Small-Cap Growth
category. These performance figures are based on the changes in net asset
value of the funds in the category with all capital gains distributions and
income dividends reinvested. The index is not intended to imply the Fund's
past or future performance.
Average Annual Total Return1
As of September 30, 1999
- -----------------------------------------------------------------------------
Annualized
6 One Year Inception
Months2 Return to Date3
- -----------------------------------------------------------------------------
PBHG Strategic Small Company Fund 20.68% 43.03% 13.93%
- -----------------------------------------------------------------------------
Sector Weightings
at September 30, 1999
[PIE CHART OMITTED]
Basic Materials (3%)
Consumer Cyclical (16%)
Consumer Non-Cyclical (4%)
Energy (6%)
Financial (6%)
Health Care (9%)
Industrial (9%)
Services (4%)
Technology (34%)
Transportation (2%)
Utilities (1%)
Cash (6%)
% of Total Portfolio Investments
53
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG STRATEGIC SMALL COMPANY FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
COMMON STOCK -- 96.4%
BASIC MATERIALS -- 3.2%
CHEMICALS-PLASTICS -- 0.7%
Geon 12,100 $ 312
Hanna 3,200 36
---------
348
- ----------------------------------------------------------------
CHEMICALS-SPECIALTY -- 1.0%
Cytec Industries* 14,300 343
Grace (W.R.) & Company* 8,700 140
---------
483
- ----------------------------------------------------------------
METAL-ALUMINUM -- 1.5%
Commonwealth Industries 52,000 699
---------
699
---------
TOTAL BASIC MATERIALS (COST $1,900) 1,530
---------
- ----------------------------------------------------------------
CONSUMER CYCLICAL -- 16.8%
APPAREL MANUFACTURERS -- 0.3%
Isaacs (I.C.) & Company* 103,200 142
---------
142
- ----------------------------------------------------------------
ATHLETIC FOOTWEAR -- 0.1%
K-Swiss, Cl A 2,200 69
---------
69
- ----------------------------------------------------------------
AUDIO/VIDEO PRODUCTS -- 1.0%
Polycom* 10,000 477
---------
477
- ----------------------------------------------------------------
AUTO/TRUCK PARTS & EQUIPMENT-ORIGINAL-- 1.7%
Delco Remy International* 76,500 689
Dura Automotive Systems* 4,200 101
---------
790
- ----------------------------------------------------------------
BUILDING-RESIDENTIAL/COMMERCIAL -- 0.2%
Pulte 4,300 94
---------
94
- ----------------------------------------------------------------
DISTRIBUTION/WHOLESALE -- 0.7%
Owens And Minor 13,000 125
Scansource* 7,500 209
---------
334
- ----------------------------------------------------------------
ENTERTAINMENT SOFTWARE -- 0.8%
Acclaim Entertainment* 48,200 366
---------
366
- ----------------------------------------------------------------
FOOTWEAR & RELATED APPAREL -- 0.4%
Stride Rite 29,700 208
---------
208
- ----------------------------------------------------------------
HOME FURNISHINGS -- 0.9%
Ethan Allen Interiors 2,000 64
Furniture Brands International* 17,300 340
---------
404
- ----------------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------------
MOTION PICTURES & SERVICES -- 1.7%
Cinar, Cl B* 17,500 $ 529
Zomax* 10,000 259
---------
788
- ----------------------------------------------------------------
PUBLISHING-BOOKS -- 0.4%
Scholastic* 3,600 180
---------
180
- ----------------------------------------------------------------
RADIO -- 1.0%
Citadel Communications* 10,000 341
Emmis Communications* 1,900 126
---------
467
- ----------------------------------------------------------------
RETAIL-APPAREL/SHOE -- 1.1%
Bebe Stores* 3,300 80
Chicos Fas* 10,000 272
Urban Outfitters* 7,500 166
---------
518
- ----------------------------------------------------------------
RETAIL-COMPUTER EQUIPMENT -- 1.0%
Insight Enterprises* 15,000 487
---------
487
- ----------------------------------------------------------------
RETAIL-CONSUMER ELECTRONICS -- 1.3%
Tweeter Home Entertainment Group* 16,900 632
---------
632
- ----------------------------------------------------------------
RETAIL-DISCOUNT -- 0.6%
Factory 2-U Stores* 10,000 299
---------
299
- ----------------------------------------------------------------
RETAIL-INTERNET -- 0.1%
Fatbrain.com* 3,600 54
---------
54
- ----------------------------------------------------------------
RETAIL-JEWELRY -- 1.1%
Friedman's, Cl A 37,500 330
Zales* 5,400 207
---------
537
- ----------------------------------------------------------------
RETAIL-MAIL ORDER -- 0.4%
Micro Warehouse* 12,100 146
Shop At Home* 4,100 37
---------
183
- ----------------------------------------------------------------
RETAIL-PET FOOD & SUPPLIES -- 0.2%
Petco Animal Supplies* 7,000 83
---------
83
- ----------------------------------------------------------------
RETAIL-RESTAURANTS -- 0.3%
Foodmaker* 4,600 115
Ruby Tuesday 900 17
---------
132
- ----------------------------------------------------------------
RETAIL-SUNGLASSES -- 0.1%
Sunglass Hut* 3,700 39
---------
39
- ----------------------------------------------------------------
54
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG STRATEGIC SMALL COMPANY FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
STORAGE/WAREHOUSING -- 0.3%
Mobile Mini* 7,500 $ 164
----------
164
- ----------------------------------------------------------------
TELEVISION -- 0.2%
Paxson Communications* 6,300 77
----------
77
- ----------------------------------------------------------------
TEXTILE-HOME FURNISHINGS -- 0.1%
Mohawk Industries* 1,800 36
Shaw Industries 1,900 30
----------
66
- ----------------------------------------------------------------
TEXTILE-PRODUCTS -- 0.2%
Dan River* 13,800 90
----------
90
- ----------------------------------------------------------------
TOYS -- 0.6%
Jakks Pacific* 7,500 281
----------
281
----------
TOTAL CONSUMER CYCLICAL (COST $7,625) 7,961
----------
- ----------------------------------------------------------------
CONSUMER NON-CYCLICAL -- 4.4%
BEVERAGES-WINE/SPIRITS -- 0.6%
Beringer Wines Estates* 5,900 242
----------
242
- ----------------------------------------------------------------
BREWERY -- 0.8%
Coors Adolph, Cl B 7,000 379
----------
379
- ----------------------------------------------------------------
CONSUMER PRODUCTS-MISCELLANEOUS -- 0.1%
Playtex Products* 4,300 63
----------
63
- ----------------------------------------------------------------
FOOD-CANNED -- 0.3%
Del Monte Foods* 11,300 160
----------
160
- ----------------------------------------------------------------
FOOD-DAIRY PRODUCTS -- 0.3%
Suiza Foods* 3,000 113
----------
113
- ----------------------------------------------------------------
FOOD-MISCELLANEOUS /DIVERSIFIED -- 2.3%
Aurora Foods* 27,500 440
Dean Foods 7,400 322
International Home Foods* 19,400 340
----------
1,102
----------
TOTAL CONSUMER NON-CYCLICAL (COST $1,937) 2,059
----------
- ----------------------------------------------------------------
ENERGY -- 6.1%
COAL -- 0.3%
Alliance Resource Partners 9,600 138
----------
138
- ----------------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------------
MARINE SERVICES -- 0.1%
Horizin Offshore* 3,000 $ 24
----------
24
- ----------------------------------------------------------------
OIL & GAS DRILLING -- 0.2%
Key Energy Services* 18,600 92
----------
92
- ----------------------------------------------------------------
OIL COMPANIES-EXPLORATION & PRODUCTION-- 3.9%
Cabot Oil & Gas, Cl A 1,700 29
Devon Energy 7,700 319
EOG Resources 18,400 391
Evergreen Resource* 2,400 58
Forest Oil* 13,500 230
Louis Dreyfus Natural Gas* 8,500 182
Newfield Exploration* 3,800 125
Santa Fe Snyder* 41,400 373
Swift Energy* 3,900 49
Vintage Petroleum 5,500 74
----------
1,830
- ----------------------------------------------------------------
OIL FIELD MACHINERY & EQUIPMENT -- 0.5%
Cooper Cameron* 6,400 242
----------
242
- ----------------------------------------------------------------
OIL-FIELD SERVICES -- 0.3%
Core Laboratories N.V.* 9,200 173
----------
173
- ----------------------------------------------------------------
PIPELINES -- 0.7%
KN Energy 8,100 182
Midcoast Energy Resource 7,500 148
----------
330
- ----------------------------------------------------------------
SEISMIC DATA COLLECTION -- 0.1%
Veritas DGC* 1,500 29
----------
29
----------
TOTAL ENERGY (COST $2,699) 2,858
----------
- ----------------------------------------------------------------
FINANCIAL -- 6.3%
COMMERCIAL BANKS-EASTERN US -- 0.4%
Commercial Bank of New York 15,100 177
Woronoco Bancorp* 2,000 20
----------
197
- ----------------------------------------------------------------
COMMERCIAL BANKS-WESTERN US -- 1.3%
Bancwest 7,600 309
City National 800 27
Pacific Bank 11,400 285
----------
621
- ----------------------------------------------------------------
INVESTMENT MANAGEMENT/ADVISOR SERVICE-- 1.1%
Affiliated Managers Group* 12,700 346
Federated Investors 9,700 167
----------
513
- ----------------------------------------------------------------
55
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG STRATEGIC SMALL COMPANY FUND
Market
Description Shares Value (000)
- -----------------------------------------------------------------
LIFE/HEALTH INSURANCE -- 0.1%
Mony Group 2,000 $ 58
----------
58
- -----------------------------------------------------------------
REITS-APARTMENTS -- 0.4%
Pennsylvania Real Estate
Investment Trust 8,700 164
----------
164
- -----------------------------------------------------------------
REITS-HOTEL/RESTAURANT -- 0.2%
Hospitality Properties Trust 3,400 75
----------
75
- -----------------------------------------------------------------
REITS-OFFICE PROPERTY -- 0.3%
Mack-Cali Realty 5,800 156
----------
156
- -----------------------------------------------------------------
REITS-REGIONAL MALLS -- 0.4%
CBL & Associates Properties 7,200 176
----------
176
- -----------------------------------------------------------------
REITS-SHOPPING CENTERS -- 0.7%
Federal Realty Investment Trust 4,100 86
Glimcher Realty Trust 5,100 75
JP Realty 10,600 181
----------
342
- -----------------------------------------------------------------
S&L/THRIFTS-EASTERN US -- 1.4%
Roslyn Bancorp 30,800 551
Webster Financial 5,000 127
----------
678
----------
TOTAL FINANCIAL (COST $3,223) 2,980
----------
- -----------------------------------------------------------------
HEALTH CARE -- 8.9%
DRUG DELIVERY SYSTEMS -- 0.2%
Noven Pharmacuticals* 10,000 85
----------
85
- -----------------------------------------------------------------
HEALTH CARE COST CONTAINMENT -- 0.7%
Medquist* 10,000 335
United Payors & United Providers* 700 12
----------
347
- -----------------------------------------------------------------
MEDICAL INFORMATION SYSTEMS -- 1.7%
Allscripts* 1,800 29
Dendrite International* 11,500 543
Sunquest Information Systems* 15,000 242
----------
814
- -----------------------------------------------------------------
MEDICAL INSTRUMENTS -- 0.7%
Arthrocare* 5,700 311
Novoste* 1,500 27
----------
338
- -----------------------------------------------------------------
MEDICAL LASER SYSTEMS -- 0.2%
Eclipse Surgical Technologies* 5,000 82
----------
82
- -----------------------------------------------------------------
Market
Description Shares Value (000)
- -----------------------------------------------------------------
MEDICAL PRODUCTS -- 1.6%
Polymedica* 10,000 $ 232
PSS World Medical* 32,300 289
Zoll Medical* 7,500 227
----------
748
- -----------------------------------------------------------------
MEDICAL-DRUGS -- 0.8%
Dura Pharmaceuticals* 12,300 171
King Pharmaceuticals* 5,200 182
Triangle Pharmaceuticals* 600 12
----------
365
- -----------------------------------------------------------------
MEDICAL-OUTPATIENT/HOME MEDICAL -- 0.2%
Lincare Holdings* 4,400 117
----------
117
- -----------------------------------------------------------------
MEDICAL-WHOLESALE DRUG DISTRIBUTION-- 1.5%
Amerisource Health* 25,000 592
Bindly Western Industries 2,100 30
Syncor* 1,800 68
----------
690
- -----------------------------------------------------------------
OPTICAL SUPPLIES -- 0.0%
Wesley Jessen Visioncare* 600 19
----------
19
- -----------------------------------------------------------------
THERAPEUTICS -- 0.6%
United Therapeutics* 10,300 297
----------
297
- -----------------------------------------------------------------
VETERINARY DIAGNOSTICS -- 0.7%
Veterinary Centers Of America* 26,900 308
----------
308
----------
TOTAL HEALTH CARE (COST $3,419) 4,210
----------
- -----------------------------------------------------------------
INDUSTRIAL -- 9.1%
AEROSPACE/DEFENSE-EQUIPMENT -- 0.2%
BE Aerospace* 6,100 73
----------
73
- -----------------------------------------------------------------
BUILDING & CONSTRUCTION PRODUCTS-MISCELLANEOUS-- 0.6%
Dal-Tile International* 9,400 75
Johns Manville 10,200 135
USG 1,600 76
----------
286
- -----------------------------------------------------------------
BUILDING PRODUCTS-AIR & HEATING -- 0.4%
York International 5,600 201
----------
201
- -----------------------------------------------------------------
BUILDING PRODUCTS-CEMENT/AGGREGATE-- 0.4%
Lafarge 3,800 122
U.S. Aggregates* 4,700 66
----------
188
- -----------------------------------------------------------------
56
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG STRATEGIC SMALL COMPANY FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
ELECTRIC PRODUCTS-MISCELLANEOUS -- 1.1%
Ametek 12,000 $ 238
C-Cube Microsystems* 6,500 283
----------
521
- -----------------------------------------------------------------
ELECTRONIC COMPONENTS-MISCELLANEOUS-- 1.7%
Benchmark Electronics* 3,600 127
DII Group* 12,300 433
Optical Coating Laboratory 2,500 230
----------
790
- -----------------------------------------------------------------
ELECTRONIC MEASURING INSTRUMENTS -- 1.7%
Anaren Microwave 5,000 141
Credence Systems* 3,400 153
LTX* 10,000 137
Molecular Devices* 5,700 157
Vishay Intertechnology* 8,300 197
----------
785
- -----------------------------------------------------------------
ELECTRONICS-MILITARY -- 0.0%
Aeroflex* 1,300 16
----------
16
- -----------------------------------------------------------------
ENERGY CONVERSION & TECHNOLOGY PROCEDURE -- 0.2%
Catalytica* 7,500 112
----------
112
- -----------------------------------------------------------------
HAZARDOUS WASTE DISPOSAL -- 0.1%
Stericycle* 3,800 56
----------
56
- -----------------------------------------------------------------
INDUSTRIAL AUTOMATION/ROBOTICS -- 0.6%
Cognex* 9,400 284
----------
284
- -----------------------------------------------------------------
INSTRUMENTS-CONTROLS -- 0.4%
Frequency Electronics 600 6
Photon Dynamics* 7,500 157
----------
163
- -----------------------------------------------------------------
INSTRUMENTS-SCIENTIFIC -- 0.3%
Varian* 7,500 133
----------
133
- -----------------------------------------------------------------
MACHINERY-GENERAL INDUSTRIAL -- 0.4%
Applied Science & Technology* 10,000 206
----------
206
- -----------------------------------------------------------------
MACHINERY-PUMPS -- 0.5%
Helix Technology 7,500 249
----------
249
- -----------------------------------------------------------------
NON-HAZARDOUS WASTE DISPOSAL -- 0.4%
Republic Services* 18,200 198
----------
198
- -----------------------------------------------------------------
Market
Description Shares Value (000)
- -----------------------------------------------------------------
TRANSPORTATION-EQUIPMENT & LEASING-- 0.1%
Willis Lease Finance* 3,600 $ 47
----------
47
----------
TOTAL INDUSTRIAL (COST $4,079) 4,308
----------
- -----------------------------------------------------------------
SERVICES -- 4.6%
COMMERCIAL SERVICES -- 0.5%
Central Parking 1,000 29
Innotrac* 7,500 134
Source Information Management* 5,000 71
----------
234
- -----------------------------------------------------------------
COMMERCIAL SERVICES-FINANCE -- 0.5%
NCO Group* 5,100 240
----------
240
- -----------------------------------------------------------------
COMPUTER SERVICES -- 1.1%
Factset Research Systems 4,000 227
QRS* 4,500 289
----------
516
- -----------------------------------------------------------------
CONSULTING SERVICES -- 1.3%
Professional Detailing* 9,400 244
USWeb* 10,000 343
----------
587
- -----------------------------------------------------------------
HUMAN RESOURCES -- 0.7%
AHL Services* 10,200 266
Personnel Group Of America* 13,400 84
----------
350
- -----------------------------------------------------------------
RENTAL AUTO/EQUIPMENT -- 0.4%
United Rentals* 7,500 163
----------
163
- -----------------------------------------------------------------
RESEARCH & DEVELOPMENT -- 0.1%
Aurora Biosciences* 4,600 62
----------
62
----------
TOTAL SERVICES (COST $2,002) 2,152
----------
- -----------------------------------------------------------------
TECHNOLOGY -- 34.7%
AGRICULTURAL BIOTECH -- 0.2%
Strategic Diagnostics* 10,000 91
----------
91
- -----------------------------------------------------------------
APPLICATIONS SOFTWARE -- 3.4%
Broadvision* 5,000 665
Clarify* 6,700 337
Exchange Applications* 7,500 218
Great Plains Software* 7,500 386
----------
1,606
- -----------------------------------------------------------------
57
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG STRATEGIC SMALL COMPANY FUND
Market
Description Shares Value (000)
- ----------------------------------------------------------------
CIRCUITS -- 1.0%
Hadco* 3,900 $ 169
Power Integrations* 4,300 298
----------
467
- ----------------------------------------------------------------
COMMUNICATIONS SOFTWARE -- 0.6%
Inter-Tel 15,300 272
----------
272
- ----------------------------------------------------------------
COMPUTER GRAPHICS -- 0.3%
Nvidia* 3,300 63
Visio* 1,700 67
----------
130
- ----------------------------------------------------------------
COMPUTER SOFTWARE -- 3.6%
Actuate* 7,500 254
Business Objects ADR* 7,600 448
MacroMedia* 7,500 307
Symantec* 5,600 201
Verity* 7,500 516
----------
1,726
- ----------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 2.7%
Advanced Digital Information* 13,600 378
Gadzoox Networks* 2,000 108
MTI Technology* 6,100 141
Sandisk* 5,000 326
Smart Modular Technologies* 10,400 354
----------
1,307
- ----------------------------------------------------------------
COMPUTERS-PERIPHERAL EQUIPMENT -- 0.7%
Cybex* 10,000 334
----------
334
- ----------------------------------------------------------------
DATA PROCESSING/MANAGEMENT -- 0.6%
Best Software* 11,800 233
Softworks* 10,000 51
----------
284
- ----------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS-- 10.5%
Act Manufacturing* 6,400 160
Alliance Semiconductor* 15,000 159
Alpha Industries* 3,500 197
Applied Micro Circuits* 14,600 832
Cirrus Logic* 4,700 52
Cree Research* 7,500 255
Cypress Semiconductor* 10,000 215
Electroglas* 2,200 52
ESS Technology* 25,000 331
Galileo Technology* 10,000 250
Hi / fn* 2,500 276
National Semiconductor* 4,100 125
QLogic* 8,500 593
Transwitch* 11,500 656
Triquint Semiconductor* 7,500 429
Zoran* 14,900 404
----------
4,986
- ----------------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------------
FIBER OPTICS -- 1.6%
Harmonic* 2,500 $ 327
JDS Uniphase* 3,600 410
----------
737
- ----------------------------------------------------------------
INTERNET CONTENT -- 0.3%
Network Solutions* 1,000 92
Onesource Information Services* 2,100 17
Sportsline USA* 900 27
----------
136
- ----------------------------------------------------------------
INTERNET SOFTWARE -- 0.3%
Edify* 5,500 69
Intervu* 500 18
Onemain.com* 3,400 56
----------
143
- ----------------------------------------------------------------
NETWORK SOFTWARE -- 0.4%
Concord Communications* 4,600 183
----------
183
- ----------------------------------------------------------------
NETWORKING PRODUCTS -- 1.6%
Extreme Networks* 6,500 411
Network Appliance* 3,700 265
Xircom* 1,800 77
----------
753
- ----------------------------------------------------------------
PRINTERS & RELATED PRODUCTS -- 0.7%
Splash Technology Holdings* 52,000 319
----------
319
- ----------------------------------------------------------------
SATELLITE TELECOMMUNICATIONS -- 0.2%
Gilat Communications Limited* 7,500 108
----------
108
- ----------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT -- 2.3%
Antec* 6,500 345
Com21* 14,600 190
Tekelec* 22,000 304
Teltrend* 4,000 81
Terayon Communication Systems* 3,500 171
----------
1,091
- ----------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 0.1%
GST Telecommunications* 5,400 38
----------
38
- ----------------------------------------------------------------
WIRELESS EQUIPMENT -- 3.6%
P-Com* 22,000 154
Pinnacle Holdings* 20,000 523
Powerwave Technologies* 2,600 125
Proxim* 5,000 230
RF Micro Devices* 15,000 686
----------
1,718
----------
TOTAL TECHNOLOGY (COST $9,590) 16,429
----------
- ----------------------------------------------------------------
58
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
- ------------------------------------
As of September 30, 1999 (UNAUDITED)
PBHG STRATEGIC SMALL COMPANY FUND
Shares/Face Market
Description Amount (000) Value (000)
- -----------------------------------------------------------------
TRANSPORTATION -- 1.8%
AIRLINES -- 1.3%
Mesaba Holdings* 26,100 $ 306
Midway Airlines* 36,600 233
Skywest 4,000 88
----------
627
- -----------------------------------------------------------------
TRANSPORTATION-TRUCK -- 0.5%
US Xpress Enterprises* 3,900 23
Yellow* 12,800 212
----------
235
----------
TOTAL TRANSPORTATION (COST $1,312) 862
----------
- -----------------------------------------------------------------
UTILITIES -- 0.5%
ELECTRIC-INTEGRATED -- 0.1%
Puget Sound Energy 3,300 74
----------
74
- -----------------------------------------------------------------
GAS-DISTRIBUTION -- 0.4%
MCN Energy Group 3,700 63
UGI 4,800 112
----------
175
----------
TOTAL UTILITIES (COST $250) 249
----------
TOTAL COMMON STOCK (COST $38,036) 45,598
----------
- -----------------------------------------------------------------
REPURCHASE AGREEMENT -- 5.8%
J.P. Agency
5.35%, dated 09/30/99, matures 10/01/99,
repurchase price $2,736,540 (collateralized
by U.S. Treasury Obligations: total
market value $29,791,126) (A) $2,736 2,736
----------
TOTAL REPURCHASE AGREEMENT (COST $2,736) 2,736
----------
TOTAL INVESTMENTS-- 102.2% (COST $40,772) 48,334
----------
- -----------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (2.2)%
Payable for securities purchased (2,575)
Other assets and liabilities 1,556
----------
TOTAL OTHER ASSETS AND LIABILITIES, NET (1,019)
----------
- -----------------------------------------------------------------
Market
Description Value (000)
- -----------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 200
million shares -- $0.001 par value)
based on 3,719,576 outstanding shares
of common stock $ 32,369
Undistributed net investment loss (185)
Accumulated net realized gain on investments 7,569
Net unrealized appreciation on investments 7,562
----------
TOTAL NET ASSETS-- 100.0% $ 47,315
----------
----------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $ 12.72
----------
----------
* Non-Income Producing Security
(A) -- Tri-Party Repurchase Agreement
Adr -- American Depository Receipt
Cl -- Class
The accompanying notes are an integral part of the financial statements.
59
<PAGE>
THE PBHG FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES (000)
- ------------------------------------------
September 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
------------ ------------- ----------------
PBHG PBHG PBHG
EMERGING SELECT NEW
GROWTH EQUITY OPPORTUNITIES
FUND FUND FUND
------------ ------------- ----------------
<S> <C>
ASSETS:
Investment securities (Cost $483,318, $152,557, $35,725
$35,110, $601,671 respectively) at market value $674,586 $197,730 $40,420
Dividends and interest receivable 10 -- --
Receivable for capital shares sold 55,625 4,391 1,113
Receivable for investment securities sold 7,392 10,664 9,508
Other assets 3 -- --
-------- -------- -------
Total assets 737,616 212,785 51,041
-------- -------- -------
LIABILITIES:
Payable for investment securities purchased 11,753 10,031 7,884
Payable for capital shares redeemed 1,072 139 25
Accrued expenses 1,030 294 55
-------- -------- -------
Total liabilities 13,855 10,464 7,964
-------- -------- -------
NET ASSETS:
Portfolio shares (authorized 400 million shares of the PBHG Emerging Growth
and 200 million shares for each of the PBHG Select Equity, the PBHG New
Opportunities, the PBHG Large Cap Value, and the PBHG Technology and
Communications Funds -- $0.001 par value) based on 29,711,556, 7,179,058,
1,565,142, 2,394,234 and 21,839,366, outstanding shares of common stock 486,475 58,774 29,204
Accumulated net investment income (loss) (3,238) (993) (110)
Accumulated net realized gain on investments 49,256 99,367 10,563
Net unrealized appreciation (depreciation) on investments 191,268 45,173 3,420
-------- -------- -------
NET ASSETS $723,761 $202,321 $43,077
-------- -------- -------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE $24.36 $28.18 $27.52
-------- -------- -------
-------- -------- -------
</TABLE>
<TABLE>
<CAPTION>
------------ ----------------
PBHG PBHG
LARGE CAP TECHNOLOGY &
VALUE COMMUNICATIONS
FUND FUND
------------ ----------------
<S> <C> <C>
ASSETS:
Investment securities (Cost $483,318, $152,557, $35,725
$35,110, $601,671 respectively) at market value $34,733 $752,489
Dividends and interest receivable 50 16
Receivable for capital shares sold 8 39,225
Receivable for investment securities sold 3,688 20,300
Other assets -- 2
------- --------
Total assets 38,479 812,032
------- --------
LIABILITIES:
Payable for investment securities purchased 3,501 41,022
Payable for capital shares redeemed 52 8,575
Accrued expenses 45 821
------- --------
Total liabilities 3,598 50,418
------- --------
NET ASSETS:
Portfolio shares (authorized 400 million shares of the PBHG Emerging Growth
and 200 million shares for each of the PBHG Select Equity, the PBHG New
Opportunities, the PBHG Large Cap Value, and the PBHG Technology and
Communications Funds -- $0.001 par value) based on 29,711,556, 7,179,058,
1,565,142, 2,394,234 and 21,839,366, outstanding shares of common stock 22,333 364,803
Accumulated net investment income (loss) 191 (3,211)
Accumulated net realized gain on investments 12,734 249,204
Net unrealized appreciation (depreciation) on investments (377) 150,818
------- --------
NET ASSETS $34,881 $761,614
------- --------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE $14.57 $34.87
------- --------
------- --------
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
60 & 61
<PAGE>
THE PBHG FUNDS, INC.
STATEMENTS OF OPERATIONS (000)
- -------------------------------------------------------
For the Six Months Ended September 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
-------- ----------- ------------ ------------- ----------- ---------- -----------
PBHG PBHG PBHG
PBHG EMERGING LARGE CAP PBHG PBHG PBHG LARGE CAP
GROWTH GROWTH GROWTH SELECT EQUITY CORE GROWTH LIMITED 20
FUND FUND FUND FUND FUND FUND FUND
-------- ----------- ------------ ------------- ----------- ---------- -----------
INVESTMENT INCOME:
<S> <C> <C> <C> <C> <C> <C> <C>
Dividends $ 166 $ 44 $ 116 $ 37 $ 38 $ 6 $ 189
Interest 4,386 1,267 132 324 83 235 938
Less: Foreign Taxes Withheld -- -- -- -- -- -- --
-------- -------- ---------- ------- ------- ------- -------
Total Investment Income 4,552 1,311 248 361 121 241 1,127
-------- -------- ---------- ------- ------- ------- -------
EXPENSES:
Investment Advisory Fees 12,749 2,959 481 876 369 501 2,096
Administrative Fees 2,250 522 96 154 65 75 370
Transfer Agent Fees 3,740 809 171 260 126 65 597
Registration and Filing Fees 18 11 8 3 7 5 55
Printing Fees 242 94 19 23 10 12 82
Professional Fees 205 54 14 11 6 8 52
Custodian Fees 34 16 4 3 4 7 10
Insurance and Other Fees 188 66 11 13 10 10 33
Directors' Fees 44 6 3 3 2 1 11
Amortization of Deferred
Organizational Costs -- -- 1 1 -- 3 3
Line of Credit Expenses 129 12 4 7 13 3 17
Distribution Fees 1 82 -- -- -- -- -- --
-------- -------- ---------- ------- ------- ------- -------
TOTAL EXPENSES 19,681 4,549 812 1,354 612 690 3,326
-------- -------- ---------- ------- ------- ------- -------
Waiver of Reimbursement
Advisory Fees -- -- -- -- -- -- --
-------- -------- ---------- ------- ------- ------- -------
Net Expenses 19,681 4,549 812 1,354 612 690 3,326
-------- -------- ---------- ------- ------- ------- -------
NET INVESTMENT INCOME (LOSS) (15,129) (3,238) (564) (993) (491) (449) (2,199)
-------- -------- ---------- ------- ------- ------- -------
Net Realized Gain (Loss) from
Security Transactions 453,524 86,068 40,904 68,261 26,316 18,409 121,313
Net Realized Gain on Foreign
Currency Transactions -- -- -- -- -- -- --
Net Change in Unrealized Appreciation
(Depreciation) on Investments 138,042 35,951 (39,721) (52,005) (11,613) 6,174 (106,283)
-------- -------- ---------- ------- ------- ------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS 591,566 122,019 1,183 16,256 14,703 24,583 15,030
-------- -------- ---------- ------- ------- ------- -------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $576,437 $118,781 $ 619 $15,263 $14,212 $24,134 $12,831
-------- -------- ---------- ------- ------- ------- -------
-------- -------- ---------- ------- ------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
------------- --------- -------- ---------- --------- --------------
PBHG PBHG PBHG PBHG PBHG
NEW LARGE CAP MID-CAP SMALL CAP FOCUSED PBHG
OPPORTUNITIES VALUE VALUE VALUE VALUE INTERNATIONAL
FUND FUND FUND FUND FUND FUND
------------- --------- -------- ---------- --------- --------------
INVESTMENT INCOME:
<S> <C> <C> <C> <C> <C> <C>
Dividends $ -- $ 328 $ 268 $ 288 $ 16 $ 111
Interest 96 39 67 51 6 13
Less: Foreign Taxes Withheld -- -- -- -- -- (6)
------- ------ ------ ------- ---- ----
Total Investment Income 96 367 335 339 22 118
------- ------ ------ ------- ---- ----
EXPENSES:
Investment Advisory Fees 141 141 217 363 17 61
Administrative Fees 21 32 38 55 3 9
Transfer Agent Fees 18 49 71 101 7 26
Registration and Filing Fees 5 8 8 14 4 2
Printing Fees 9 4 12 9 1 2
Professional Fees 3 2 5 6 1 1
Custodian Fees 13 8 14 10 7 16
Insurance and Other Fees 1 1 7 9 -- 8
Directors' Fees -- -- 1 2 -- --
Amortization of Deferred
Organizational Costs -- -- 2 3 -- --
Line of Credit Expenses 2 3 7 6 -- --
Distribution Fees 1 -- -- -- -- -- --
------- ------ ------ ------- ---- ----
TOTAL EXPENSES 213 248 382 578 40 125
------- ------ ------ ------- ---- ----
Waiver of Reimbursement Advisory Fees (7) -- -- (33) (11) --
------- ------ ------ ------- ---- ----
Net Expenses 206 248 382 545 29 125
------- ------ ------ ------- ---- ----
NET INVESTMENT INCOME (LOSS) (110) 119 (47) (206) (7) (7)
------- ------ ------ ------- ---- ----
Net Realized Gain (Loss) from
Security Transactions 10,074 4,811 7,198 6,016 524 1,535
Net Realized Gain on Foreign
Currency Transactions -- -- -- -- -- 4
Net Change in Unrealized Appreciation
(Depreciation) on Investments 1,359 (2,590) (1,398) 6,411 22 (860)
------- ------ ------ ------- ---- ----
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS 11,433 2,221 5,800 12,427 546 679
------- ------ ------ ------- ---- ----
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $11,323 $2,340 $5,753 $12,221 $539 $672
------- ------ ------ ------- ---- ----
------- ------ ------ ------- ---- ----
</TABLE>
<TABLE>
<CAPTION>
-------- -------------- -------------
PBHG PBHG PBHG
CASH TECHNOLOGY & STRATEGIC
RESERVES COMMUNICATIONS SMALL
FUND FUND COMPANY FUND
-------- -------------- -------------
INVESTMENT INCOME:
<S> <C> <C> <C>
Dividends $ -- $ 223 $ 110
Interest 4,153 692 45
Less: Foreign Taxes Withheld -- -- --
------ -------- ------
Total Investment Income 4,153 915 155
------ -------- ------
EXPENSES:
Investment Advisory Fees 245 2,760 239
Administrative Fees 123 487 36
Transfer Agent Fees 115 604 78
Registration and Filing Fees 12 4 12
Printing Fees 26 92 9
Professional Fees 17 38 6
Custodian Fees 13 7 14
Insurance and Other Fees 17 29 12
Directors' Fees 4 11 2
Amortization of Deferred
Organizational Costs -- 1 3
Line of Credit Expenses -- 93 2
Distribution Fees 1 -- -- --
------ -------- ------
TOTAL EXPENSES 572 4,126 413
------ -------- ------
Waiver of Reimbursement Advisory Fees -- -- (54)
------ -------- ------
Net Expenses 572 4,126 359
------ -------- ------
NET INVESTMENT INCOME (LOSS) 3,581 (3,211) (204)
------ -------- ------
Net Realized Gain (Loss) from
Security Transactions (12) 159,286 5,762
Net Realized Gain on Foreign
Currency Transactions -- -- --
Net Change in Unrealized Appreciation
(Depreciation) on Investments -- (11,137) 3,485
------ -------- ------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS (12) 148,149 9,247
------ -------- ------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $3,569 $144,938 $9,043
------ -------- ------
------ -------- ------
<FN>
1. All distribution fees are incurred in the Advisor Class.
Amounts designated as "-" are either $0 or have been rounded to $0.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
62 & 63
<PAGE>
THE PBHG FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (000)
- -----------------------------------------
For the six month period ended September 30, 1999 (unaudited) and the period
ending March 31, 1999
<TABLE>
<CAPTION>
------------------------- --------------------------- --------------------------
PBHG PBHG PBHG
GROWTH EMERGING GROWTH LARGE CAP GROWTH
FUND FUND FUND
------------------------- --------------------------- --------------------------
4/1/99 4/1/98 4/1/99 4/1/98 4/1/99 4/1/98
to to to to to to
9/30/99 3/31/99 9/30/99 3/31/99 9/30/99 3/31/99
---------- ----------- ----------- ----------- ----------- ----------
INVESTMENT ACTIVITIES:
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income (Loss) $ (15,129) $ (40,167) $ (3,238) $ (8,193) $ (564) $ (1,004)
Net Realized Gain (Loss) from Security
Transactions 453,524 (123,200) 86,068 (34,951) 40,904 11,109
Net Realized (Loss) on Foreign Currency
Transactions -- -- -- -- -- --
Net Change in Unrealized Appreciation
(Depreciation) on Investments and
Foreign Currency Transactions 138,042 (524,058) 35,951 (189,387) (39,721) 9,077
---------- ---------- ---------- -------- -------- --------
Net Increase (Decrease) in Net Assets
Resulting from Operations 576,437 (687,425) 118,781 (232,531) 619 19,182
---------- ---------- ---------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income -- -- -- -- -- --
Net Realized Gains from
Security Transactions -- -- -- (3,473) -- (9,078)
---------- ---------- ---------- -------- -------- --------
Total Distributions -- -- -- (3,473) -- (9,078)
---------- ---------- ---------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:
PBHG Class
Shares Issued 2,222,084 2,989,888 1,743,233 2,067,441 21,271 130,237
Shares Issued upon Reinvestment
of Distributions -- -- -- 3,287 -- 8,663
Shares Redeemed (3,291,474) (4,423,533) (1,874,261) (2,502,873) (50,968) (150,577)
---------- ---------- ---------- -------- -------- --------
Total PBHG Class Transactions (1,069,390) (1,433,645) (131,028) (432,145) (29,697) (11,677)
---------- ---------- ---------- -------- -------- --------
Advisor Class
Shares Issued 6,118 21,461 -- -- -- --
Shares Issued upon Reinvestment
of Distributions -- -- -- -- -- --
Shares Redeemed (12,188) (33,023) -- -- -- --
---------- ---------- ---------- -------- -------- --------
Total Advisor Class Transactions (6,070) (11,562) -- -- -- --
---------- ---------- ---------- -------- -------- --------
Increase (Decrease) in Net Assets Derived
from Capital Share Transactions (1,075,460) (1,445,207) (131,028) (432,145) (29,697) (11,677)
---------- ---------- ---------- -------- -------- --------
Total Increase (Decrease) in
Net Assets (499,023) (2,132,632) (12,247) (668,149) (29,078) (1,573)
---------- ---------- ---------- -------- -------- --------
NET ASSETS:
Beginning of Period 3,294,975 5,427,607 736,008 1,404,157 144,089 145,662
---------- ---------- ---------- -------- -------- --------
End of Period $2,795,952 $3,294,975 $ 723,761 $736,008 $115,011 $144,089
---------- ---------- ---------- -------- -------- --------
---------- ---------- ---------- -------- -------- --------
SHARES ISSUED AND REDEEMED:
PBHG Class
Shares Issued 84,264 126,179 78,652 93,873 868 5,693
Shares Issued upon Reinvestment
of Distributions -- -- -- 155 -- 409
Shares Redeemed (124,844) (183,539) (84,657) (112,679) (2,074) (6,659)
---------- ---------- ---------- -------- -------- --------
Total PBHG Class Share Transactions (40,580) (57,360) (6,005) (18,651) (1,206) (557)
---------- ---------- ---------- -------- -------- --------
Advisor Class
Shares Issued 234 902 -- -- -- --
Shares Issued upon Reinvestment
of Distributions -- -- -- -- -- --
Shares Redeemed (492) (1,354) -- -- -- --
---------- ---------- ---------- -------- -------- --------
Total Advisor Class Share Transactions (258) (452) -- -- -- --
---------- ---------- ---------- -------- -------- --------
Net Increase (Decrease) in
Shares Outstanding (40,838) (57,812) (6,005) (18,651) (1,206) (557)
---------- ---------- ---------- -------- -------- --------
---------- ---------- ---------- -------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
------------------------- --------------------------- -------------------------
PBHG PBHG PBHG
SELECT EQUITY CORE GROWTH LIMITED
FUND FUND FUND
------------------------- --------------------------- -------------------------
4/1/99 4/1/98 4/1/99 4/1/98 4/1/99 4/1/98
to to to to to to
9/30/99 3/31/99 9/30/99 3/31/99 9/30/99 3/31/99
---------- ---------- ----------- ---------- --------- ----------
INVESTMENT ACTIVITIES:
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income (Loss) $ (993) $ (2,540) $ (491) $ (1,331) $ (449) $ (1,131)
Net Realized Gain (Loss) from Security
Transactions 68,261 45,647 26,316 16,034 18,409 9,385
Net Realized (Loss) on Foreign Currency
Transactions -- -- -- -- -- --
Net Change in Unrealized Appreciation
(Depreciation) on Investments and Foreign
Currency Transactions (52,005) (31,961) (11,613) (15,463) 6,174 (27,057)
-------- -------- -------- -------- -------- --------
Net Increase (Decrease) in Net Assets
Resulting from Operations 15,263 11,146 14,212 (760) 24,134 (18,803)
-------- -------- -------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income -- -- -- -- -- --
Net Realized Gains from
Security Transactions -- -- -- -- -- (5,915)
-------- -------- -------- -------- -------- --------
Total Distributions -- -- -- -- -- (5,915)
-------- -------- -------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:
PBHG Class
Shares Issued 129,679 193,042 115,832 203,788 2,442 9,499
Shares Issued upon Reinvestment
of Distributions -- -- -- -- -- 5,730
Shares Redeemed (178,525) (304,360) (129,511) (282,053) (44,458) (60,668)
-------- -------- -------- -------- -------- --------
Total PBHG Class Transactions (48,846) (111,318) (13,679) (78,265) (42,016) (45,439)
-------- -------- -------- -------- -------- --------
Advisor Class
Shares Issued -- -- -- -- -- --
Shares Issued upon Reinvestment
of Distributions -- -- -- -- -- --
Shares Redeemed -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total Advisor Class Transactions -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Increase (Decrease) in Net Assets Derived
from Capital Share Transactions (48,846) (111,318) (13,679) (78,265) (42,016) (45,439)
-------- -------- -------- -------- -------- --------
Total Increase (Decrease) in
Net Assets (33,583) (100,172) 533 (79,025) (17,882) (70,157)
-------- -------- -------- -------- -------- --------
NET ASSETS:
Beginning of Period 235,904 336,076 86,485 165,510 108,011 178,168
-------- -------- -------- -------- -------- --------
End of Period $202,321 $235,904 $ 87,018 $ 86,485 $ 90,129 $108,011
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
SHARES ISSUED AND REDEEMED:
PBHG Class
Shares Issued 4,932 8,480 7,657 16,673 186 777
Shares Issued upon Reinvestment
of Distributions -- -- -- -- -- 484
Shares Redeemed (6,849) (13,299) (8,519) (22,754) (3,341) (4,876)
-------- -------- -------- -------- -------- --------
Total PBHG Class Share Transactions (1,917) (4,819) (862) (6,081) (3,155) (3,615)
-------- -------- -------- -------- -------- --------
Advisor Class
Shares Issued -- -- -- -- -- --
Shares Issued upon Reinvestment
of Distributions -- -- -- -- -- --
Shares Redeemed -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total Advisor Class Share Transactions -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net Increase (Decrease) in
Shares Outstanding (1,917) (4,819) (862) (6,081) (3,155) (3,615)
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
------------------------
PBHG
LARGE CAP 20
FUND
------------------------
4/1/99 4/1/98
to to
9/30/99 3/31/99
---------- -----------
INVESTMENT ACTIVITIES:
<S> <C> <C>
Net Investment Income (Loss) $ (2,199) $ (2,501)
Net Realized Gain (Loss) from Security
Transactions 121,313 32,587
Net Realized (Loss) on Foreign Currency
Transactions -- --
Net Change in Unrealized Appreciation
(Depreciation) on Investments and Foreign
Currency Transactions (106,283) 149,316
-------- --------
Net Increase (Decrease) in Net Assets
Resulting from Operations 12,831 179,402
-------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income -- --
Net Realized Gains from
Security Transactions -- (5,087)
-------- --------
Total Distributions -- (5,087)
-------- --------
CAPITAL SHARE TRANSACTIONS:
PBHG Class
Shares Issued 138,855 747,561
Shares Issued upon Reinvestment
of Distributions -- 4,843
Shares Redeemed (300,619) (516,273)
-------- --------
Total PBHG Class Transactions (161,764) 236,131
-------- --------
Advisor Class
Shares Issued -- --
Shares Issued upon Reinvestment
of Distributions -- --
Shares Redeemed -- --
-------- --------
Total Advisor Class Transactions -- --
-------- --------
Increase (Decrease) in Net Assets Derived
from Capital Share Transactions (161,764) 236,131
-------- --------
Total Increase (Decrease) in
Net Assets (148,933) 410,446
-------- --------
NET ASSETS:
Beginning of Period 603,077 192,631
-------- --------
End of Period $454,144 $603,077
-------- --------
-------- --------
SHARES ISSUED AND REDEEMED:
PBHG Class
Shares Issued 5,787 40,903
Shares Issued upon Reinvestment
of Distributions -- 254
Shares Redeemed (12,691) (28,184)
-------- --------
Total PBHG Class Share Transactions (6,904) 12,973
-------- --------
Advisor Class
Shares Issued -- --
Shares Issued upon Reinvestment
of Distributions -- --
Shares Redeemed -- --
-------- --------
Total Advisor Class Share Transactions -- --
-------- --------
Net Increase (Decrease) in
Shares Outstanding (6,904) 12,973
-------- --------
-------- --------
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
64 & 65
<PAGE>
THE PBHG FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (000) -- CONTINUED
- ------------------------------------------------------
<TABLE>
<CAPTION>
----------------------- --------------------- ----------------------
PBHG PBHG PBHG
NEW OPPORTUNITIES LARGE CAP VALUE MID-CAP VALUE
FUND FUND FUND
----------------------- --------------------- ----------------------
4/1/99 2/12/993 4/1/99 4/1/98 4/1/99 4/1/98
to to to to to to
9/30/99 3/31/99 9/30/99 3/31/99 9/30/99 3/31/99
--------- ---------- -------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net Investment Income (Loss) $ (110) $ (12) $ 119 $ 405 $ (47) $ 4
Net Realized Gain (Loss) from Security
Transactions 10,074 566 4,811 17,489 7,198 11,898
Net Realized Gain (Loss) on
Foreign Currency Transactions -- -- -- -- -- --
Net Change in Unrealized Appreciation
(Depreciation) on Investments and Foreign
Currency Transactions 1,359 2,061 (2,590) (2,893) (1,398) (2,155)
------- ------- ------- ------- ------- -------
Net Increase (Decrease) in
Net Assets Resulting
from Operations 11,323 2,615 2,340 15,001 5,753 9,747
------- ------- ------- ------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income -- -- -- (579) -- --
Distributions in excess of
net investment income -- -- -- -- -- --
Net Realized Gains from
Security Transactions -- -- -- (9,589) -- (3,487)
------- ------- ------- ------- ------- -------
Total Distributions -- -- -- (10,168) -- (3,487)
------- ------- ------- ------- ------- -------
CAPITAL SHARE TRANSACTIONS:
PBHG Class
Shares Issued 49,773 4,982 9,403 38,949 23,942 130,518
Shares Transfered 1 -- 9,767 -- -- -- --
Shares Issued upon
Reinvestment of Distributions -- -- -- 9,896 -- 3,287
Shares Redeemed 2 (34,761) (622) (21,784) (85,232) (45,933) (137,257)
------- ------- ------- ------- ------- -------
Total PBHG Class Transactions 15,012 14,127 (12,381) (36,387) (21,991) (3,452)
------- ------- ------- ------- ------- -------
Increase (Decrease) in
Net Assets Derived from
Capital Share Transactions 15,012 14,127 (12,381) (36,387) (21,991) (3,452)
------- ------- ------- ------- ------- -------
Total Increase (Decrease) in Net Assets 26,335 16,742 (10,041) (31,554) (16,238) 2,808
------- ------- ------- ------- ------- -------
NET ASSETS:
Beginning of Period 16,742 -- 44,922 76,476 56,981 54,173
------- ------- ------- ------- ------- -------
End of Period $43,077 $16,742 $34,881 $44,922 $40,743 $56,981
======= ======= ======= ======= ======= =======
SHARES ISSUED AND REDEEMED:
PBHG Class
Shares Issued 2,057 336 641 2,866 1,436 9,105
Shares Transfered 1 -- 723 -- -- -- --
Shares Issued upon
Reinvestment of Distributions -- -- -- 762 -- 286
Shares Redeemed 2 (1,509) (42) (1,491) (6,262) (2,756) (9,156)
------- ------- ------- ------- ------- -------
Total PBHG Class Share Transactions 548 1,017 (850) (2,634) (1,320) 235
------- ------- ------- ------- ------- -------
Net Increase (Decrease) in
Shares Outstanding 548 1,017 (850) (2,634) (1,320) 235
======= ======= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
------------------------ ------------------------ -----------------------
PBHG PBHG PBHG
SMALL CAP VALUE FOCUSED VALUE INTERNATIONAL
FUND FUND FUND
------------------------ ------------------------ -----------------------
4/1/99 4/1/98 4/1/99 2/12/993 4/1/99 4/1/98
to to to to to to
9/30/99 3/31/99 9/30/99 3/31/99 9/30/99 3/31/99
---------- --------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net Investment Income (Loss) $ (206) $ (727) $ (7) $ -- $ (7) $ 5
Net Realized Gain (Loss) from Security
Transactions 6,016 (8,356) 524 93 1,535 624
Net Realized Gain (Loss) on
Foreign Currency Transactions -- -- -- -- 4 (61)
Net Change in Unrealized Appreciation
(Depreciation) on Investments and
Foreign Currency Transactions 6,411 (14,071) 22 (55) (860) (15)
--------- --------- --------- --------- --------- ---------
Net Increase (Decrease) in
Net Assets Resulting
from Operations 12,221 (23,154) 539 38 672 553
--------- --------- --------- --------- --------- ---------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income -- -- -- -- -- (5)
Distributions in excess of
net investment income -- -- -- -- -- (201)
Net Realized Gains from
Security Transactions -- (6,608) -- -- -- (498)
--------- --------- --------- --------- --------- ---------
Total Distributions -- (6,608) -- -- -- (704)
--------- --------- --------- --------- --------- ---------
CAPITAL SHARE TRANSACTIONS:
PBHG Class
Shares Issued 52,671 122,004 1,911 3,079 31,151 54,185
Shares Transfered 1 -- -- -- 1,294 -- --
Shares Issued upon
Reinvestment of Distributions -- 5,980 -- -- -- 687
Shares Redeemed 2 (67,654) (154,269) (2,120) (753) (33,753) (63,406)
--------- --------- --------- --------- --------- ---------
Total PBHG Class Transactions (14,983) (26,285) (209) 3,620 (2,602) (8,534)
--------- --------- --------- --------- --------- ---------
Increase (Decrease) in
Net Assets Derived from
Capital Share Transactions (14,983) (26,285) (209) 3,620 (2,602) (8,534)
--------- --------- --------- --------- --------- ---------
Total Increase (Decrease) in Net Assets (2,762) (56,047) 330 3,658 (1,930) (8,685)
--------- --------- --------- --------- --------- ---------
NET ASSETS:
Beginning of Period 69,787 125,834 3,658 -- 12,220 20,905
--------- --------- --------- --------- --------- ---------
End of Period $ 67,025 $ 69,787 $ 3,988 $ 3,658 $ 10,290 $ 12,220
========= ========= ========= ========= ========= =========
SHARES ISSUED AND REDEEMED:
PBHG Class
Shares Issued 4,154 9,257 166 297 2,679 4,707
Shares Transfered 1 -- -- -- 126 -- --
Shares Issued upon
Reinvestment of Distributions -- 486 -- -- -- 61
Shares Redeemed 2 (5,292) (11,790) (184) (73) (2,869) (5,450)
--------- --------- --------- --------- --------- ---------
Total PBHG Class Share Transactions (1,138) (2,047) (18) 350 (190) (682)
--------- --------- --------- --------- --------- ---------
Net Increase (Decrease) in
Shares Outstanding (1,138) (2,047) (18) 350 (190) (682)
========= ========= ========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
----------------------------
PBHG
CASH RESERVES
FUND
----------------------------
4/1/99 4/1/98
to to
9/30/99 3/31/99
-------------- ----------
INVESTMENT ACTIVITIES:
<S> <C> <C>
Net Investment Income (Loss) $ 3,581 $ 6,191
Net Realized Gain (Loss) from Security
Transactions (11) 6
Net Realized Gain (Loss) on
Foreign Currency Transactions -- --
Net Change in Unrealized Appreciation
(Depreciation) on Investments and Foreign
Currency Transactions -- --
-------- --------
Net Increase (Decrease) in
Net Assets Resulting
from Operations 3,570 6,197
-------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income (3,581) (6,192)
Distributions in excess of
net investment income -- --
Net Realized Gains from
Security Transactions -- --
-------- --------
Total Distributions (3,581) (6,192)
-------- --------
CAPITAL SHARE TRANSACTIONS:
PBHG Class
Shares Issued 3,789,430 3,499,237
Shares Transfered 1 -- --
Shares Issued upon
Reinvestment of Distributions 2,553 4,628
Shares Redeemed 2 (3,688,998) (3,477,205)
-------- --------
Total PBHG Class Transactions 102,985 26,660
-------- --------
Increase (Decrease) in
Net Assets Derived from
Capital Share Transactions 102,985 26,660
-------- --------
Total Increase (Decrease) in Net Assets 102,974 26,665
-------- --------
NET ASSETS:
Beginning of Period 144,239 117,574
-------- --------
End of Period $247,213 $144,239
======== ========
SHARES ISSUED AND REDEEMED:
PBHG Class
Shares Issued 3,789,430 3,499,237
Shares Transfered 1 -- --
Shares Issued upon
Reinvestment of Distributions 2,553 4,628
Shares Redeemed 2 (3,688,998) (3,477,205)
-------- --------
Total PBHG Class Share Transactions 102,985 26,660
-------- --------
Net Increase (Decrease) in
Shares Outstanding 102,985 26,660
======== ========
<FN>
1. Net asset value of shares issued in connection with the transfer of the PBHG
Advisor Funds, Inc. Reference note 6 to Financial Statements.
2. Included in capital shares redeemed for the PBHG Large Cap Value Fund was an
in-kind redemption on January 4, 1999 of 3,232,902 shares and $44,452,402.
3. The PBHG New Opportunities and PBHG Focused Value Funds commenced operations
on February 12, 1999.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
66 & 67
<PAGE>
THE PBHG FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (000) -- CONCLUDED
- ------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------- ----------------------------
PBHG TECHNOLOGY & PBHG STRATEGIC
COMMUNICATIONS SMALL COMPANY
FUND FUND
----------------------------- ----------------------------
4/1/99 4/1/98 4/1/99 4/1/98
to to to to
9/30/99 3/31/99 9/30/99 3/31/99
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net Investment Income (Loss) $ (3,211) $ (3,886) $ (204) $ (705)
Net Realized Gain from Security Transactions 159,286 119,887 5,762 2,035
Net Realized (Loss) on Foreign Currency Transactions -- -- -- --
Net Change in Unrealized Appreciation (Depreciation) on
Investments and Foreign Currency Transactions (11,137) 34,248 3,485 (14,689)
----------- ----------- ----------- -----------
Net Increase (Decrease) in Net Assets Resulting
from Operations 144,938 150,249 9,043 (13,359)
----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income -- -- -- --
Net Realized Gains from Security Transactions -- (5,296) -- (2,717)
----------- ----------- ----------- -----------
Total Distributions -- (5,296) -- (2,717)
----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
PBHG Class
Shares Issued 1,704,428 1,546,866 38,049 43,247
Shares Issued upon Reinvestment of Distributions -- 4,857 -- 2,579
Shares Redeemed (1,624,157) (1,655,968) (47,806) (93,704)
----------- ----------- ----------- -----------
Total PBHG Class Transactions 80,271 (104,245) (9,757) (47,878)
----------- ----------- ----------- -----------
Increase (Decrease) in Net Assets Derived from
Capital Share Transactions 80,271 (104,245) (9,757) (47,878)
----------- ----------- ----------- -----------
Total Increase (Decrease) in Net Assets 225,209 40,708 (714) (63,954)
----------- ----------- ----------- -----------
NET ASSETS:
Beginning of Period 536,405 495,697 48,029 111,983
----------- ----------- ----------- -----------
End of Period $ 761,614 $ 536,405 $ 47,315 $ 48,029
=========== =========== =========== ===========
SHARES ISSUED AND REDEEMED:
PBHG Class
Shares Issued 54,081 75,144 3,286 3,991
Shares Issued upon Reinvestment of Distributions -- 249 -- 249
Shares Redeemed (51,684) (81,676) (4,122) (8,374)
----------- ----------- ----------- -----------
Total PBHG Class Share Transactions 2,397 (6,283) (836) (4,134)
----------- ----------- ----------- -----------
Net Increase (Decrease) in Shares Outstanding 2,397 (6,283) (836) (4,134)
=========== =========== =========== ===========
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
68
<PAGE>
THE PBHG FUNDS, INC.
[This page intentionally left blank]
69
<PAGE>
THE PBHG FUNDS, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
For a Share Outstanding Throughout Each Period
For the Period Ended September 30, 1999 (unaudited)
<TABLE>
<CAPTION>
Net Net Net
Asset Net Realized and Distributions Distributions Asset Assets
Value Investment Unrealized from Net from Value End
Beginning Income Gains or (Losses) Investment Capital End Total of Period
of Period (Loss) on Securities Income Gains of Period Return (000)
- --------------------------------------------------------------------------------------------------------------------------------
- ----------------
PBHG GROWTH FUND
- ----------------
PBHG CLASS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1999**(4) $24.51 $(0.13) $5.49 -- -- $29.87 21.87% $2,722,995
1999(4) 28.23 (0.24) (3.48) -- -- 24.51 (13.18)% 3,228,740
1998 21.06 (0.26) 7.43 -- -- 28.23 34.05 % 5,338,380
1997 25.30 (0.10) (4.14) -- -- 21.06 (16.76)% 4,634,138
1996 16.70 (0.06) 8.66 -- -- 25.30 51.50 % 3,298,666
1995(1) 14.67 (0.05) 2.09 -- $(0.01) 16.70 13.92 % 1,014,832
PBHG ADVISOR CLASS
1999**(4) $24.35 $(0.16) $5.44 -- -- $29.63 21.72% $ 72,957
1999(4) 28.12 (0.30) (3.47) -- -- 24.35 (13.41)% 66,235
1998 21.03 (0.15) 7.24 -- -- 28.12 33.71 % 89,227
1997(2) 25.42 (0.06) (4.33) -- -- 21.03 (17.27)% 12,991
- -------------------------
PBHG EMERGING GROWTH FUND
- -------------------------
PBHG CLASS
1999**(4) $20.61 $(0.10) $3.85 -- -- $24.36 18.20% $ 723,761
1999(4) 25.83 (0.18) (4.96) -- $(0.08) 20.61 (19.91)% 736,008
1998 19.26 (0.24) 6.81 -- -- 25.83 34.11 % 1,404,157
1997 23.07 (0.11) (2.87) -- (0.83) 19.26 (13.71)% 1,195,620
1996 16.10 (0.07) 8.03 -- (0.99) 23.07 50.16 % 689,705
1995(3,4) 14.59 (0.01) 1.56 -- (0.04) 16.10 10.64 % 411,866
- --------------------------
PBHG LARGE CAP GROWTH FUND
- --------------------------
PBHG CLASS
1999**(4) $24.57 $(0.11) $0.24 -- -- $24.70 0.53% $ 115,011
1999(4) 22.69 (0.16) 3.53 -- $(1.49) 24.57 15.90% 144,089
1998 14.26 (0.19) 8.82 -- (0.20) 22.69 60.80% 145,662
1997 14.53 (0.05) (0.21) -- (0.01) 14.26 (1.77)% 119,971
1996(6) 10.00 (0.03) 4.97 -- (0.41) 14.53 50.47%* 53,759
- -----------------------
PBHG SELECT EQUITY FUND
- -----------------------
PBHG CLASS
1999**(4) $25.93 $(0.13) $2.38 -- -- $28.18 8.68% $ 202,321
1999(4) 24.15 (0.21) 1.99 -- -- 25.93 7.37% 235,904
1998 15.91 (0.44) 8.68 -- -- 24.15 51.79 % 336,076
1997 17.27 (0.13) (1.03) -- $(0.20) 15.91 (6.94)% 372,486
1996(6) 10.00 (0.05) 7.68 -- (0.36) 17.27 77.75 %* 202,796
- ---------------------
PBHG CORE GROWTH FUND
- ---------------------
PBHG CLASS
1999**(4) $14.06 $(0.09) $2.48 -- -- $16.45 17.00% $ 87,018
1999(4) 13.53 (0.14) 0.67 -- -- 14.06 3.92% 86,485
1998 10.34 (0.33) 3.52 -- -- 13.53 30.85 % 165,510
1997 11.82 (0.09) (1.39) -- -- 10.34 (12.52)% 283,995
1996(5) 10.00 -- 1.82 -- -- 11.82 18.20 % 31,092
- -----------------
PBHG LIMITED FUND
- -----------------
PBHG CLASS
1999**(4) $11.95 $(0.06) $3.43 -- -- $15.32 28.20% $ 90,129
1999(4) 14.08 (0.10) (1.45) -- $(0.58) 11.95 (11.01)% 108,011
1998 9.05 (0.10) 5.53 -- (0.40) 14.08 60.78 % 178,168
1997(8) 10.00 0.02 (0.93) $(0.03) (0.01) 9.05 (9.15)% 137,520
</TABLE>
<TABLE>
<CAPTION>
Ratio
Ratio of Net
of Net Ratio Investment
Investment of Expenses Income (Loss)
Ratio Income to Average to Average
of Expenses (Loss) Net Assets Net Assets Portfolio
to Average to Average (Excluding (Excluding Turnover
Net Assets Net Assets Waivers) Waivers) Rate
- ------------------------------------------------------------------------------------------------------------
- ----------------
PBHG GROWTH FUND
- ----------------
PBHG CLASS
<S> <C> <C> <C> <C> <C>
1999**(4) 1.31%* (1.00)%* 1.31%* (1.00)%* 26.30%
1999(4) 1.32% (0.99)% 1.32% (0.99)% 80.51%
1998 1.26% (0.74)% 1.26% (0.74)% 94.21%
1997 1.25% (0.69)% 1.25% (0.69)% 64.89%
1996 1.48% (0.79)% 1.48% (0.79)% 44.64%
1995(1) 1.50% (0.69)% 1.50% (0.69)% 118.75%
PBHG ADVISOR CLASS
1999**(4) 1.56%* (1.25)%* 1.56%* (1.25)%* 26.30%
1999(4) 1.57% (1.24)% 1.57% (1.24)% 80.51%
1998 1.51% (1.02)% 1.51% (1.02)% 94.21%
1997(2) 1.53%* (1.11)%* 1.53%* (1.11)%* 64.89%
- -------------------------
PBHG EMERGING GROWTH FUND
- -------------------------
PBHG CLASS
1999**(4) 1.31%* (0.93)%* 1.31%* (0.93)%* 64.53%
1999(4) 1.34% (0.80)% 1.34% (0.80)% 101.53%
1998 1.27% (0.80)% 1.27% (0.80)% 95.21%
1997 1.28% (0.36)% 1.28% (0.36)% 47.75%
1996 1.47% (0.42)% 1.47% (0.42)% 97.05%
1995 1.50%* (0.08)%* 1.50%* (0.08)%* 27.50%
- --------------------------
PBHG LARGE CAP GROWTH FUND
- --------------------------
PBHG CLASS
1999**(4) 1.27%* (0.88)%* 1.27%* (0.88)%* 92.68%
1999(4) 1.25% (0.71)% 1.25% (0.71)% 46.16%
1998 1.22% (0.79)% 1.22% (0.79)% 46.56%
1997 1.23% (0.47)% 1.23% (0.47)% 51.70%
1996(6) 1.50%* (0.66)%* 2.07%* (1.23)%* 116.75%
- -----------------------
PBHG SELECT EQUITY FUND
- -----------------------
PBHG CLASS
1999**(4) 1.31%* (0.96)%* 1.31%* (0.96)%* 101.41%
1999(4) 1.34% (0.90)% 1.34% (0.90)% 56.59%
1998 1.35% (1.15)% 1.35% (1.15)% 72.16%
1997 1.26% (0.76)% 1.26% (0.76)% 71.70%
1996(6) 1.50%* (0.74)%* 1.73%* (0.97)%* 206.22%
- ---------------------
PBHG CORE GROWTH FUND
- ---------------------
PBHG CLASS
1999**(4) 1.41%* (1.13)%* 1.41%* (1.13)%* 168.48%
1999(4) 1.45% (1.16)% 1.45% (1.16)% 120.93%
1998 1.35% (1.07)% 1.35% (1.07)% 72.78%
1997 1.36% (0.77)% 1.36% (0.77)% 46.75%
1996(5) 1.50%* (0.18)%* 2.92%* (1.60)%* 17.00%
- -----------------
PBHG LIMITED FUND
- -----------------
PBHG CLASS
1999**(4) 1.38%* (0.90)%* 1.38%* (0.90)%* 47.41%
1999(4) 1.40% (0.81)% 1.40% (0.81)% 111.07%
1998 1.40% (0.72)% 1.40% (0.72)% 81.36%
1997(8) 1.42%* 0.33%* 1.42%* 0.33%* 75.46%
</TABLE>
70
<PAGE>
<TABLE>
<CAPTION>
THE PBHG FUNDS, INC.
Net Net Net
Asset Net Realized and Distributions Distributions Asset Assets
Value Investment Unrealized from Net from Value End
Beginning Income Gains or (Losses) Investment Capital End Total of Period
of Period (Loss) on Securities Income Gains of Period Return (000)
- ------------------------------------------------------------------------------------------------------------------------------------
- ----------------------
PBHG LARGE CAP 20 FUND
- ----------------------
PBHG CLASS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1999**(4) $24.10 $(0.11) $1.07 -- -- $25.06 3.98% $454,144
1999(4) 15.98 (0.12) 8.46 -- $(0.22) 24.10 52.52% 603,077
1998 9.25 (0.07) 6.80 -- -- 15.98 72.76% 192,631
1997(9) 10.00 (0.01) (0.73) $(0.01) -- 9.25 (7.40)% 69,819
- ---------------------------
PBHG NEW OPPORTUNITIES FUND
- ---------------------------
PBHG CLASS
1999**(4) $16.47 $(0.09) $11.14 -- -- $27.52 67.09% $43,077
1999(4,13) 13.52 (0.01) 2.96 -- -- 16.47 21.82% 16,742
- -------------------------
PBHG LARGE CAP VALUE FUND
- -------------------------
PBHG CLASS
1999** $13.85 $0.06 $0.66 -- -- $14.57 5.20% $34,881
1999 13.01 0.08 2.45 $(0.10) $(1.59) 13.85 20.29% 44,922
1998 10.11 0.02 3.84 (0.06) (0.90) 13.01 39.47% 76,476
1997(10) 10.00 0.02 0.09 -- -- 10.11 1.10% 26,262
- -----------------------
PBHG MID-CAP VALUE FUND
- -----------------------
PBHG CLASS
1999** $15.09 $(0.02) $1.51 -- -- $16.58 9.87% $40,743
1999 15.30 -- 0.92 -- $(1.13) 15.09 8.35% 56,981
1998(12) 10.00 (0.01) 6.00 -- (0.69) 15.30 61.06% 54,173
- -------------------------
PBHG SMALL CAP VALUE FUND
- -------------------------
PBHG CLASS
1999**(4) $11.38 $(0.04) $2.08 -- -- $13.42 17.93% $67,025
1999(4) 15.38 (0.09) (3.06) -- $(0.85) 11.38 (20.93)% 69,787
1998(12) 10.00 (0.03) 6.15 -- (0.74) 15.38 62.27% 125,834
- -----------------------
PBHG FOCUSED VALUE FUND
- -----------------------
PBHG CLASS
1999** $10.46 $(0.02) $1.57 -- -- $12.01 14.82% $3,988
1999(13) 10.32 -- 0.14 -- -- 10.46 1.36% 3,658
- -----------------------
PBHG INTERNATIONAL FUND
- -----------------------
PBHG CLASS
1999**(4) $11.60 -- $0.31 -- -- $11.91 2.67% $10,290
1999(14) 12.04 $(0.14) 0.29 $(0.17) $(0.42) 11.60 1.42% $12,220
1998 11.26 (0.03) 1.83 -- (1.02) 12.04 17.46% 20,905
1997 10.55 -- 0.71 -- -- 11.26 6.73% 21,265
1996 9.13 (0.04) 1.46 -- -- 10.55 15.55% 11,243
1995(11) 10.00 (0.03) (0.80) -- (0.04) 9.13 (8.33)% 15,236
- -----------------------
PBHG CASH RESERVES FUND
- -----------------------
PBHG CLASS
1999** $1.00 $0.02 -- $(0.02) -- $1.00 4.42%* $247,213
1999 1.00 0.05 -- (0.05) -- 1.00 4.84% 144,239
1998 1.00 0.05 -- (0.05) -- 1.00 5.13% 117,574
1997 1.00 0.05 -- (0.05) -- 1.00 4.89% 341,576
1996(6) 1.00 0.05 -- (0.05) -- 1.00 5.24%* 99,001
- -------------------------------------
PBHG TECHNOLOGY & COMMUNICATIONS FUND
- -------------------------------------
PBHG CLASS
1999**(4) $27.59 $(0.16) $7.44 -- -- $34.87 26.39% $761,614
1999(4) 19.27 (0.19) 8.80 -- $(0.29) 27.59 45.33% 536,405
1998 14.63 (0.23) 5.72 -- (0.85) 19.27 38.29% 495,697
1997 12.48 (0.05) 2.55 -- (0.35) 14.63 19.59% 493,156
1996(7) 10.00 (0.02) 2.50 -- -- 12.48 24.82% 61,772
- ---------------------------------
PBHG STRATEGIC SMALL COMPANY FUND
- ---------------------------------
PBHG CLASS
1999**(4) $10.54 $(0.05) $2.23 -- -- $12.72 20.68% $ 47,315
1999(4) 12.89 (0.11) (1.78) -- $(0.46) 10.54 (14.52)% 48,029
1998 8.86 (0.11) 5.01 -- (0.87) 12.89 56.54 % 111,983
1997(10) 10.00 -- (1.14) -- -- 8.86 (11.40)% 61,382
</TABLE>
<TABLE>
<CAPTION>
Ratio
Ratio of Net
of Net Ratio Investment
Investment of Expenses Income (Loss)
Ratio Income to Average to Average
of Expenses (Loss) Net Assets Net Assets Portfolio
to Average to Average (Excluding (Excluding Turnover
Net Assets Net Assets Waivers) Waivers) Rate
- -----------------------------------------------------------------------------------------------------------------
- ----------------------
PBHG LARGE CAP 20 FUND
- ----------------------
PBHG CLASS
<S> <C> <C> <C> <C> <C>
1999**(4) 1.35%* (0.89)%* 1.35%* (0.89)%* 72.49%
1999(4) 1.27% (0.64)% 1.27% (0.64)% 76.41%
1998 1.41% (0.79)% 1.41% (0.79)% 98.27%
1997(9) 1.50%* 0.17 %* 1.50%* 0.17 %* 43.98%
- ---------------------------
PBHG NEW OPPORTUNITIES FUND
- ---------------------------
PBHG CLASS
1999**(4) 1.47%* (0.78)%* 1.52%* (0.83)%* 630.96%
1999(4,13) 1.50%* (0.80)%* 1.59%* (0.89)%* 109.43%
- -------------------------
PBHG LARGE CAP VALUE FUND
- -------------------------
PBHG CLASS
1999** 1.15%* 0.55%* 1.15%* 0.55%* 531.65%
1999 1.01% 0.59% 1.01% 0.59% 568.20%
1998 1.17% 0.98% 1.17% 0.98% 403.59%
1997(10) 1.50%* 1.61%* 1.74%* 1.37%* 0.00%
- -----------------------
PBHG MID-CAP VALUE FUND
- -----------------------
PBHG CLASS
1999** 1.50%* (0.18)%* 1.50%* (0.18)%* 474.08%
1999 1.33% 0.01% 1.33% 0.01% 732.73%
1998(12) 1.47%* (0.17)%* 1.47%* (0.17)%* 399.96%
- -------------------------
PBHG SMALL CAP VALUE FUND
- -------------------------
PBHG CLASS
1999**(4) 1.50%* (0.57)%* 1.59%* (0.66)%* 175.27%
1999(4) 1.48% (0.71)% 1.48% (0.71)% 273.87%
1998(12) 1.49%* (0.52)%* 1.49%* (0.52)%* 263.04%
- -----------------------
PBHG FOCUSED VALUE FUND
- -----------------------
PBHG CLASS
1999** 1.50%* (0.37)%* 2.08%* (0.95)%* 768.62%
1999(13) 1.50%* 0.09%* 2.67%* (1.08)%* 173.09%
- -----------------------
PBHG INTERNATIONAL FUND
- -----------------------
PBHG CLASS
1999**(4) 2.05%* (0.12)%* 2.05%* (0.12)%* 24.55%
1999(14) 1.97% (0.35)% 1.97% (0.35)% 59.74%
1998 2.00% (0.13)% 2.00% (0.13)% 85.94%
1997 2.22% (0.32)% 2.22% (0.32)% 74.82%
1996 2.25% (0.22)% 3.03% (1.00)% 140.26%
1995(11) 2.25%* (0.43)%* 2.36%* (0.54)%* 81.72%
- -----------------------
PBHG CASH RESERVES FUND
- -----------------------
PBHG CLASS
1999** 0.70%* 4.38%* 0.70%* 4.38%* n/a
1999 0.70% 4.72% 0.70% 4.72% n/a
1998 0.68% 5.00% 0.68% 5.00% n/a
1997 0.68% 4.79% 0.68% 4.79% n/a
1996(6) 0.70%* 5.05%* 0.88%* 4.87%* n/a
</TABLE>
The accompanying notes are an integral part of the financial statements.
71
<PAGE>
THE PBHG FUNDS, INC.
FINANCIAL HIGHLIGHTS -- Continued
- --------------------------------------------------------------------------------
For a Share Outstanding Throughout Each Period
For the Period Ended September 30, 1999 (unaudited)
<TABLE>
<CAPTION>
- -------------------------------------
PBHG TECHNOLOGY & COMMUNICATIONS FUND
- -------------------------------------
PBHG CLASS
<S> <C> <C> <C> <C> <C> <C>
1999**(4) 1.27%* (0.99)%* 1.27%* (0.99)%* 161.56%
1999(4) 1.34% (0.96)% 1.34% (0.96)% 276.07%
1998 1.30% (0.91)% 1.30% (0.91)% 259.89%
1997 1.33% (0.59)% 1.33% (0.59)% 289.91%
1996(7) 1.50%* (0.50)%* 2.00%* (1.00)%* 125.99%
- ---------------------------------
PBHG STRATEGIC SMALL COMPANY FUND
- ---------------------------------
PBHG CLASS
1999**(4) 1.50%* (0.85)%* 1.73%* (1.08)%* 121.56%
1999(4) 1.50% (0.97)% 1.54% (1.01)% 140.89%
1998 1.45% (0.92)% 1.45% (0.92)% 215.46%
1997(10) 1.50%* 0.18%* 1.50%* 0.18%* 88.88%
<FN>
* Annualized
** For the six month period ended September 30, 1999.
+ Total returns have not been annualized.
1 The information set forth in this table for the period prior to June 2,
1994 is the financial data of the Pilgrim Baxter Growth Fund, a series of
the Advisor's Inner Circle II Fund. PBHG Growth Fund acquired the assets
and assumed the liabilities of the Pilgrim Baxter Growth Fund on June 2,
1994.
2 The PBHG Growth Fund Advisor Class commenced operations on August 16, 1996.
3 The information set forth in this table for the periods prior to June 2,
1994 is the financial data of the Pilgrim Baxter Emerging Growth Fund, a
series of the Advisor's Inner Circle Fund. PBHG Emerging Growth Fund
acquired the assets and assumed the liabilities of the Pilgrim Baxter
Emerging Growth Fund on June 2, 1994. The PBHG Emerging Growth Fund
retained the October 31 fiscal year end of its predecessor only for fiscal
year 1994. PBHG Emerging Growth changed its fiscal year end to March 31 in
1995 and reported financial information for the fiscal period from November
1, 1994 to March 31, 1995.
4 Per share calculations were performed using average shares for the period.
5 The PBHG Core Growth Fund commenced operations on December 29, 1995.
6 The PBHG Large Cap Growth Fund, the PBHG Select Equity Fund, and the PBHG
Cash Reserves Fund commenced operations on April 5, 1995.
7 The PBHG Technology & Communications Fund commenced operations on September
29, 1995.
8 The PBHG Limited Fund commenced operations on June 28, 1996.
9 The PBHG Large Cap 20 Fund commenced operations on November 29, 1996.
10 The PBHG Large Cap Value Fund and the PBHG Strategic Small Company Fund
commenced operations on December 31, 1996.
11 The PBHG International Fund commenced operations on June 15, 1994.
12 The PBHG Mid-Cap Value and the PBHG Small Cap Value Funds commenced
operations April 30, 1997.
13 The PBHG New Opportunities Fund and the PBHG Focused Value Fund commenced
operations on February 12, 1999.
14 Distributions from net investment income include $0.1659 of distribution in
excess of net investment income.
</FN>
</TABLE>
Amounts designated as "-" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
72
<PAGE>
THE PBHG FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
As of September 30, 1999 (UNAUDITED)
1. ORGANIZATION
The PBHG Funds, Inc. (the "Fund"), a Maryland corporation, is registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company with sixteen series: the PBHG Growth Fund (the "Growth
Fund"), the PBHG Emerging Growth Fund (the "Emerging Growth Fund"), the PBHG
Large Cap Growth Fund (the "Large Cap Growth Fund"), the PBHG Select Equity Fund
(the "Select Equity Fund"), the PBHG Core Growth Fund (the "Core Growth Fund"),
the PBHG Limited Fund (the "Limited Fund"), the PBHG Large Cap 20 Fund (the
"Large Cap 20 Fund"), the PBHG New Opportunities Fund (the "New Opportunities
Fund"), the PBHG Large Cap Value Fund (the "Large Cap Value Fund"), the PBHG
Mid-Cap Value Fund (the "Mid-Cap Value Fund"), the PBHG Small Cap Value Fund
(the "Small Cap Value Fund"), the PBHG Focused Value Fund (the "Focused Value
Fund"), the PBHG International Fund (the "International Fund"), the PBHG
Technology & Communications Fund (the "Technology & Communications Fund"), and
the PBHG Strategic Small Company Fund (the "Strategic Small Company Fund"),
(collectively referred to as the "Equity Portfolios"), and the PBHG Cash
Reserves Fund (the "Cash Reserves Fund") (each a "Portfolio" and, collectively,
the "Portfolios"). Each Portfolio is classified as a diversified management
investment company, with the exception of the Large Cap 20 and the Focused Value
Funds which are classified as non-diversified management investment companies.
Each Portfolio's prospectus provides a description of it's investment
objectives, policies and investment strategies. The Fund is registered to offer
two classes of shares, PBHG Class and Advisor Class, formerly known as the
"Trust Class." Currently, the Advisor Class of shares is only offered by the
Growth Fund. The assets of each Portfolio are segregated, and a shareholder's
interest is limited to the Portfolio in which shares are held.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed by
the Portfolios.
SECURITY VALUATION -- Investment securities of the Equity Portfolios that are
listed on a securities exchange and for which market quotations are available
are valued at the last quoted sales price on each business day (normally 4:00 pm
Eastern time). If there is no such reported sale, these securities and unlisted
securities for which market quotations are readily available, are valued at the
last bid price. However, debt securities (other than short-term obligations),
including listed issues, are valued on the basis of valuations furnished by a
pricing service which utilizes electronic data processing techniques to
determine valuations for normal institutional size trading units of debt
securities, without exclusive reliance upon exchange or over-the-counter prices.
Short-term investments may be valued at amortized cost which approximates market
value. Foreign securities are valued based upon quotations from the primary
market in which they are traded, and are translated from the local currency into
U.S. dollars using current exchange rates. In addition, if quotations are not
readily available, or if the values have been materially affected by events
occurring after the closing of a foreign market, assets may be valued by another
method that the Board of Directors believes accurately reflects fair value. The
values of investment securities held by the Cash Reserves Fund are stated at
amortized cost, which approximates market value. Under this valuation method,
acquisition discounts and premiums are accreted and amortized ratably to
maturity and are included in interest income.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the date the securities are purchased or sold (trade date).
Dividend income and distributions to shareholders are recognized on the
ex-dividend date; interest income is recognized on the accrual basis. Costs used
in determining realized capital gains and losses on the sale of investment
securities are those of the specific securities sold adjusted for the accretion
and amortization of acquisition discounts and premiums during the respective
holding periods.
DIVIDENDS -- Dividends from net investment income for the Equity Portfolios are
declared annually, if available. Dividends from net investment income for the
Cash Reserves Fund are declared daily and paid monthly. Distributions of net
realized capital gains, for each portfolio, are generally made to shareholders
annually, if available.
Dividends from net investment income and distributions from net realized capital
gains are determined in accordance with U.S. Federal income tax regulations,
which may differ from those amounts determined under generally accepted
accounting principles. These book/tax differences are either temporary or
permanent in nature. To the extent these differences are permanent, they are
charged or credited to paid-in-capital or accumulated net realized gain, as
appropriate, in the period that the differences arise. Accordingly, the
following permanent differences as of March 31, 1999, primarily attributable to
certain net operating losses and with respect to the Large Cap Value Fund gains
attributable to securities sold as a result of an in-kind redemption, which for
tax purposes, are not available to offset future income or have been used to
offset net short-term capital gains, have been reclassified to the following
accounts:
ACCUMULATED NET
PAID-IN-CAPITAL REALIZED GAIN
(000) (000)
-------------- --------------
Growth Fund $(40,167) $ --
Emerging Growth Fund (8,190) 4
Large Cap Growth Fund (227) (777)
Select Equity Fund 1 (2,541)
Core Growth Fund (2,624) --
Limited Fund (98) (1,032)
Large Cap 20 Fund -- (2,499)
New Opportunities Fund 65 (77)
Large Cap Value Fund 7,576 (7,550)
Mid-Cap Value Fund -- 11
Small Cap Value Fund (748) 5
Focused Value 6 (6)
International Fund -- (223)
Cash Reserves Fund -- (4)
Technology & Communications Fund -- (3,886)
Strategic Small Company Fund (714) 3
These reclassifications have no effect on net assets or net asset value per
share.
FEDERAL INCOME TAXES -- It is each Portfolio's intention to qualify or continue
to qualify as a regulated investment company for Federal income tax purposes and
to distribute all of its taxable income and net capital gains. Accordingly,
no provision has been made for Federal income taxes.
NET ASSET VALUE PER SHARE -- The net asset value per share is calculated each
business day by dividing the total value of each Portfolio's assets, less
liabilities, by the number of shares outstanding.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase
agreements are held by a third party custodian bank until the respective
agreements mature. Provisions of the repurchase agreements and procedures
adopted by Pilgrim Baxter & Associates, Ltd. (the "Adviser") require that the
market value of the collateral including accrued interest thereon, is sufficient
in the event of default by the counterparty. If the counterparty defaults and
the value of the collateral declines, or if the counterparty enters into
insolvency proceedings, realization of the collateral by a Portfolio may be
delayed or limited.
73
<PAGE>
THE PBHG FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
As of September 30, 1999 (UNAUDITED)
FOREIGN CURRENCY TRANSLATION -- The books and records of the International Fund
are maintained in U.S. dollars. Foreign currency amounts are translated into
U.S. dollars on the following basis:
(I) market value of investment securities, other assets and liabilities at
the current rate of exchange; and
(II) purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The International Fund does not isolate that portion of gains and losses on
investment securities that is due to changes in the foreign exchange rates from
that which is due to changes in market prices of such securities.
The International Fund reports gains and losses on foreign currency related
transactions as components of realized gains for financial reporting purposes,
whereas such components are treated as ordinary income or loss for Federal
income tax purposes.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- In connection with portfolio
purchases and sales of securities denominated in a foreign currency, the
International Fund may enter into forward foreign currency exchange contracts.
Foreign currency exchange contracts are recorded at market value. Certain risks
may arise upon entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts. Realized gains or losses
arising from such transactions are included in net realized gain (loss) from
foreign currency transactions. At September 30, 1999 the International Fund had
$258 in unrealized depreciation on such foreign currency contracts.
OTHER -- Expenses that are directly related to one of the Portfolios are charged
directly to that Portfolio. Other operating expenses are prorated to the
Portfolios on the basis of relative net assets. Class specific expenses, such as
12b-1 service fees, are borne by that class. Income, other expenses and realized
and unrealized gains and losses of a Portfolio are allocated to the respective
class on the basis of the relative net assets each day.
All organizational costs incurred with the start up of the Core Growth Fund, the
Select Equity Fund, the Large Cap Growth Fund, the Technology & Communications
Fund, the Limited Fund, the Large Cap 20 Fund, the Large Cap Value Fund, the
Mid-Cap Value Fund, the Small Cap Value Fund, the Strategic Small Company Fund
and the Cash Reserves Fund are being amortized on a straight line basis over a
period of sixty months. In the event that any of the initial shares of the
Portfolio are redeemed by any holder thereof during the period that the
Portfolio is amortizing its organizational costs, the redemption proceeds
payable to the holder thereof will be reduced by the unamortized organizational
costs in the same ratio as the number of initial shares being redeemed bears to
the number of initial shares outstanding at the time of redemption.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS -- The preparation
of financial statements, in conformity with generally accepted accounting
principles, requires management to make estimates and assumptions that affect
the reported amount of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Actual results
could differ from those estimates.
3. INVESTMENT ADVISORY FEES, ADMINISTRATIVE FEES AND OTHER TRANSACTIONS WITH
AFFILIATES
The Fund and the Adviser are parties to an Investment Advisory Agreement (the
"Advisory Agreement"). Under the terms of the Advisory Agreement, the Adviser is
paid a monthly fee at an annual rate of 0.85% of the average daily net assets of
the Growth, Emerging Growth, Select Equity, Core Growth, Large Cap 20, Mid-Cap
Value, Focused Value and Technology and Communications Funds, 0.75% of the
average daily net assets of the Large Cap Growth Fund, 0.65% of the Large Cap
Value Fund, 1.00% of the average daily net assets of the Limited, New
Opportunities, Small Cap Value, International and Strategic Small Company Funds,
and 0.30% of the average daily net assets of the Cash Reserves Fund.
In the interest of limiting expenses of the Portfolios, the Adviser has entered
into expense limitation agreements with the Fund ("Expense Limitation
Agreements"), with respect to the Core Growth, Limited, Large Cap 20, New
Opportunities, Large Cap Value, Mid-Cap Value, Small Cap Value, Focused Value
and Strategic Small Company Funds, pursuant to which the Adviser has agreed to
waive or limit its fees and to assume other expenses of the Portfolios to the
extent necessary to limit the total annual expenses (expressed as a percentage
of the Portfolios' average daily net assets) to 1.50% and to not more than 2.25%
of the average daily net assets of the International Fund. Reimbursement by the
Portfolios of the advisory fees waived or limited and other expenses paid by the
Adviser pursuant to the Expense Limitation Agreements during any of the previous
two fiscal years may be made at a later date when the Portfolios have reached a
sufficient asset size to permit reimbursement to be made without causing the
total annual expense rate of each Portfolio to exceed 1.50% for the Core Growth,
Limited, Large Cap 20, New Opportunities, Large Cap Value, Mid-Cap Value, Small
Cap Value, Focused Value and Strategic Small Company Funds and 2.25% for the
International Fund. Consequently, no reimbursement by a Portfolio will be made
unless: (i) the Portfolio's assets exceed $75 million; (ii) the Portfolio's
total annual expense ratio is less than 1.50% for the Core Growth, Limited,
Large Cap 20, New Opportunities, Large Cap Value, Mid-Cap Value, Small Cap
Value, Focused Value and Strategic Small Company Funds and 2.25% for the
International Fund, and (iii) the payment of such reimbursement was approved by
the Board of Directors on a quarterly basis. At September 30, 1999, the amount
of advisory fee waiver and reimbursement of third party expenses by the Adviser
subject to possible reimbursement were as follows:
SmallCap Value Fund $32,800
Strategic Small Company Fund $81,141
Focused Value Fund $15,311
New Opportunities Fund $8,282
Pilgrim Baxter Value Investors, Inc. (formerly Newbold's Asset Management,
Inc.), a wholly-owned subsidiary of the Adviser serves as the sub-adviser to the
Large Cap Value Fund, Mid-Cap Value Fund, Small Cap Value Fund, Focused Value
Fund and the Strategic Small Company Fund. For its services provided pursuant to
its Investment Sub-Advisory Agreement with the Adviser and the Fund, Pilgrim
Baxter Value Investors receives a fee from the Adviser at an annual rate of
0.40%, 0.50%, 0.65%, 0.40% and 0.30%, respectively, of the average daily net
assets of the Large Cap Value Fund, Mid-Cap Value Fund, Small Cap Value Fund,
Focused Value Fund and the Strategic Small Company Fund. Pilgrim Baxter Value
Investors receives no fees directly from the Large Cap Value Fund, Mid-Cap Value
Fund, Small Cap Value Fund, Focused Value Fund or the Strategic Small Company
Fund.
Murray Johnstone International, Ltd. ("Murray Johnstone") serves as the
sub-adviser to the International Fund. For its services provided pursuant to its
Investment Sub-Advisory Agreement with the Adviser and the Fund, Murray
Johnstone receives a fee from the Adviser at an annual rate of 0.50% of the
International Fund's average daily net assets. Murray Johnstone receives no fees
directly from the International Fund, and may periodically reduce its
sub-advisory fee.
Wellington Management Company, LLP ("WMC") serves as the sub-adviser to the Cash
Reserves Fund. For its services provided pursuant to the Investment Sub-Advisory
Agreement with the Adviser and the Fund, WMC is entitled to receive a fee from
the Adviser, computed daily and paid monthly, at an annual rate equal to 0.075%
of the Cash Reserves Fund's average daily net assets up to and including $500
million and 0.020% of the Cash Reserves
74
<PAGE>
THE PBHG FUNDS, INC.
Fund's average daily net assets over $500 million, but subject to a minimum
annual fee of $50,000. WMC may, from time to time, waive all or a portion of its
fee from the Adviser. WMC receives no fees directly from the Cash Reserves Fund.
PBHG Fund Services (the "Administrator"), a wholly-owned subsidiary of the
Adviser, provides the Fund with administrative services, including regulatory
reporting and all necessary office space, equipment, personnel and facilities.
For these administrative services, the Administrator receives a fee, which is
calculated daily and paid monthly, at an annual rate of 0.15% of the average
daily net assets of each Portfolio.
SEI Investments Management Corporation, a wholly-owned subsidiary of SEI
Investments Company, is the owner of all beneficial interest in SEI Mutual Fund
Services (the "Sub-Administrator"). The Sub-Administrator is an affiliate of the
Fund's distributor and assists the Administrator in providing administrative
services to the Fund. For acting in this capacity, the Administrator pays the
Sub-Administrator a fee at the annual rate of 0.04% of the average daily assets
of each portfolio with respect to the first $2.5 billion of the total average
daily net assets of (i) the Fund, and (ii) PBHG Insurance Series Fund, Inc.,
another fund family managed by the Adviser (collectively known as the "PBHG Fund
Family"), 0.025% of the next $7.5 billion of the average daily assets of each
portfolio in the PBHG Fund Family, and 0.02% of the average daily net assets of
each portfolio in the PBHG Fund Family in excess of $10 billion.
The Fund has entered into an agreement with SEI Investments to manage the
investments of repurchase agreements for the Funds. For its services the
Liquidity Desk received $85,999 for the period ended September 30, 1999.
The Fund and SEI Investments Distribution Co. (the "Distributor") are parties to
a Distribution Agreement. The Distributor receives no fees for its distribution
services. The Fund has adopted a Service Plan (the "Plan") on behalf of the
Advisor Class shares pursuant to Rule 12b-1 under the Investment Company Act of
1940. The Plan provides for the payment by the Fund of up to 0.25% of the
average daily net assets of the Advisor Class shares for certain distribution
and shareholder services. Currently only the Growth Fund has Advisor Class
shareholders.
DST Systems, Inc. serves as the transfer agent and dividend disbursing agent of
the Fund. From time to time, the Fund may pay amounts to third parties that
provide sub-transfer agency and other administrative services relating to the
Fund to persons who beneficially own interests in the Fund. First Union National
Bank, serves as the custodian for each of the Portfolios except the
International Fund. The Northern Trust Company serves as the custodian for the
International Fund.
The Fund has entered into a shareholder servicing agreement with PBHG Fund
Services to provide shareholder support and other shareholder account-related
services. PBHG Fund Services has, in turn, contracted with UAM Shareholder
Service Center, Inc. ("UAMSSC") to assist in the provision of those services.
UAMSSC receives no fees directly from the Portfolios.
SHAREHOLDER SERVICE FEES (INCLUDING OUT OF POCKET EXPENSES) PAID TO PBHG FUND
SERVICES FOR THE PERIOD ENDED SEPTEMBER 30, 1999 WERE:
AMOUNT
(000)
------
Growth Fund $710
Emerging Growth Fund 237
Large Cap Growth Fund 58
Select Equity Fund 86
Core Growth Fund 54
Limited Fund 33
Large Cap 20 Fund 155
New Opportunities Fund 7
Large Cap Value Fund 18
Mid-Cap Value Fund 20
Small Cap Value Fund 19
Focused Value Fund 3
International Fund 12
Cash Reserve Fund 45
Technology & Communications Fund 174
Strategic Small Company Fund 22
Officers and directors of the Fund who are or were officers of the Adviser,
Administrator, Sub-Administrator and the Distributor received no compensation
from the Fund.
4. INVESTMENT TRANSACTIONS
The cost of securities purchased and the proceeds from securities sold, other
than short-term investments, for the Equity Portfolios for the six months ended
September 30, 1999 were as follows:
PURCHASES SALES
(000) (000)
---------- ----------
Growth Fund $742,997 $1,829,294
Emerging Growth Fund 411,954 585,820
Large Cap Growth Fund 112,171 142,779
Select Equity Fund 195,766 230,798
Core Growth Fund 137,756 154,958
Limited Fund 42,725 80,667
Large Cap 20 Fund 330,337 498,088
New Opportunities Fund 181,185 168,852
Large Cap Value Fund 214,851 224,651
Mid-Cap Value Fund 225,274 243,460
Small Cap Value Fund 121,381 135,690
Focused Value Fund 28,703 28,898
International Fund 734 3,093
Technology & Communications Fund 1,075,118 983,226
Strategic Small Company Fund 55,252 66,007
75
<PAGE>
THE PBHG FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- CONCLUDED
- --------------------------------------------------------------------------------
As of September 30, 1999 (UNAUDITED)
The book aggregate gross unrealized appreciation and depreciation of securities
held by the Portfolios at September 30, 1999 are as follows:
NET
UNREALIZED
UNREALIZED UNREALIZED APPRECIATION/
APPRECIATION DEPRECIATION (DEPRECIATION)
(000) (000) (000)
---------- ---------- -------------
Growth Fund $1,262,333 $97,815 $1,164,518
Emerging Growth Fund 210,253 18,985 191,268
Large Cap Growth Fund 23,401 2,686 20,715
Select Equity Fund 49,169 3,996 45,173
Core Growth Fund 14,991 2,269 12,722
Limited Fund 32,480 1,754 30,726
Large Cap 20 Fund 99,881 9,413 90,468
New Opportunities Fund 5,839 1,143 4,696
Large Cap Value Fund 942 1,319 (377)
Mid-Cap Value Fund 2,464 2,710 (244)
Small Cap Value Fund 5,940 7,218 (1,278)
Focused Value Fund 241 235 6
International Fund 3,002 195 2,807
Technology &
Communications Fund 169,044 18,226 150,818
Strategic Small
Company Fund 11,282 3,720 7,562
The difference between book and tax cost basis at September 30, 1999 was
immaterial. The Portfolios listed below had the following capital loss
carryforwards at March 31, 1999, that can be used to offset future capital
gains.
Capital Loss Capital Loss Capital Loss
Carryovers Carryovers Carryovers
Expiring 2005 Expiring 2006 Expiring 2007
------------- ------------- -------------
Growth Fund 8,022,850 -- 271,063,916
Emerging Growth Fund -- -- 31,196,165
Core Growth Fund 10,246,114 28,445,344 --
Small Cap Value Fund -- -- 8,064,419
5. CONCENTRATIONS
The Cash Reserves Fund invests primarily in a portfolio of money market
instruments maturing in 397 days or less whose ratings are within one of the two
highest ratings categories assigned by a nationally recognized statistical
rating agency, or, if not rated, are believed to be of comparable quality. The
ability of the issuers of the securities held by the Portfolio to meet their
obligations may be affected by economic developments in a specific industry,
state or region.
The International Fund invests in securities of foreign issuers in various
countries. These investments may involve certain considerations and risks not
typically associated with investments in the United States, as a result of,
among other factors, the possibility of future political and economic
developments and the level of governmental supervision and regulation of
securities markets in the respective countries.
6. ACQUISITION
On February 12, 1999 the net assets of the PBHG Advisor Core Value Fund and the
PBHG Advisor New Opportunities Fund, both series of the PBHG Advisor Funds, Inc.
were acquired by the PBHG Focused Value Fund and the PBHG New Opportunities Fund
respectively, pursuant to an agreement and plan of reorganization dated February
12, 1999. The transaction was structured to qualify as a tax-free reorganization
under the Internal Revenue Code. Prior to reorganization the PBHG Advisor Core
Value and PBHG Advisor New Opportunities had net assets of $1,294,123 and
$9,766,893, respectively, shares outstanding of 125,435 and 722,618
respectively, and NAV's of $10.32 and $13.52, respectively. The PBHG Focused
Value and the PBHG New Opportunities Funds were deemed to be the accounting
survivors of the tax-free reorganizations, accordingly each Portfolio's
performance history for financial reporting and advertising purposes began on
February 12, 1999.
7. LINE OF CREDIT
Each Portfolio may borrow, an amount up to its prospectus defined limitations,
from a $250 million committed line of credit available to (i) the Funds and (ii)
PBHG Insurance Series Fund, Inc. Borrowings from the line of credit will bear
interest at the Federal Funds Rate plus 0.50%. As of September 30, 1999, the
Growth Fund had an outstanding borrowing of $6,900,000. Listed below are the
Funds which had outstanding balances during the six months ended September 30,
1999.
MAXIMUM AVERAGE DAILY WEIGHTED
AMOUNT OUTSTANDING AVERAGE
BORROWED BALANCE INTEREST RATE
-------- ------- -------------
Growth Fund $48,700,000 $ 429,508 5.34%
Emerging Growth Fund 18,000,000 124,044 5.55%
Large Cap Growth Fund 3,100,000 16,940 5.44%
Select Equity Fund 2,200,000 21,858 5.61%
Core Growth Fund 5,600,000 108,197 5.54%
Large Cap 20 Fund 4,200,000 22,951 5.28%
New Opportunities Fund 2,600,000 24,590 5.74%
Large Cap Value Fund 5,400,000 38,798 5.59%
Mid-Cap Value Fund 7,600,000 63,388 5.44%
Small Cap Value Fund 3,100,000 36,066 5.43%
Technology &
Communications Fund 34,900,000 1,436,066 5.46%
Strategic Small
Company Fund 1,000,000 14,754 5.27%
76
<PAGE>
The PBHG Funds, Inc.
- --------------------------------------------------------------------------------
[LOGO OMITTED]
P.O. Box 219534
Kansas City, MO 64121-9534
Investment Adviser:
Pilgrim Baxter & Associates, Ltd.
Distributor:
SEI Investments Distribution Co.
To open an account, receive account information,
or request literature please call 1-800-433-0051
PBHG-Semi-9/99
