Semi-Annual Report September 30, 2000
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THE PBHG FUNDS, INC.
Ticker Symbol
-----------------
PBHG GROWTH FUNDS
PBHG Growth Fund - PBHG Class PBHGX
PBHG Growth Fund - Advisor Class PBGWX
PBHG Emerging Growth Fund PBEGX
PBHG Large Cap Growth Fund PBHLX
PBHG Select Equity Fund PBHEX
PBHG Core Growth Fund PBCRX
PBHG Limited Fund PBLDX
PBHG Large Cap 20 Fund PLCPX
PBHG New Opportunities Fund PBNOX
PBHG VALUE FUNDS
PBHG Large Cap Value Fund PLCVX
PBHG Mid-Cap Value Fund PBMCX
PBHG Small Cap Value Fund PBSVX
PBHG Focused Value Fund PBFVX
PBHG SPECIALTY FUNDS
PBHG International Fund PBHIX
PBHG Cash Reserves Fund PBCXX
PBHG Technology &
Communications Fund PBTCX
PBHG Strategic Small Company Fund PSSCX
PBHG Global Technology &
Communications Fund PBGTX
[LOGO omitted] 1
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THE PBHG FUNDS, INC.
TABLE OF CONTENTS
---------------------------------------------------------------
Message to Shareholders 3
PBHG GROWTH FUNDS
---------------------------------------------------------------
PBHG Growth Fund 4
PBHG Emerging Growth Fund 8
PBHG Large Cap Growth Fund 12
PBHG Select Equity Fund 16
PBHG Core Growth Fund 19
PBHG Limited Fund 22
PBHG Large Cap 20 Fund 25
PBHG New Opportunities Fund 27
PBHG VALUE FUNDS
---------------------------------------------------------------
PBHG Large Cap Value Fund 30
PBHG Mid-Cap Value Fund 33
PBHG Small Cap Value Fund 38
PBHG Focused Value Fund 44
PBHG SPECIALTY FUNDS
---------------------------------------------------------------
PBHG International Fund 47
PBHG Cash Reserves Fund 50
PBHG Technology &
Communications Fund 52
PBHG Strategic Small
Company Fund 55
PBHG Global Technology &
Communications Fund 62
Statements of Assets and Liabilities 65
Statements of Operations 66
Statements of Changes in Net Assets 68
Financial Highlights 73
Notes to Financial Statements 76
[logo omitted] 2
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THE PBHG FUNDS, INC.
MESSAGE TO SHAREHOLDERS
DEAR FELLOW SHAREHOLDERS:
Investors continued to be rocked by severe turbulence in the U.S. equity
markets during the six-months ended September 30. Strong forces, both positive
and negative, kept the market vacillating throughout the period. During April
and May, we experienced a "correction". Although the market's decline helped to
wring out speculative excesses in the valuations of some companies, the outsized
market volatility that characterized the so-called "tech wreck" proved
treacherous for many individual investors. Economic data released in June
suggested that the Federal Reserve's program of six rate increases had
accomplished what was intended -- providing a soft landing for the economy in
which growth was slowed enough to keep inflation in check. As a result, most
growth equity indexes soared that month, regaining some of the altitude lost
during the previous two. Conversely, July's negative returns were impacted by
reports that second quarter economic growth had not, in fact, been as slow as
hoped. That information ignited fears that the Fed might raise rates again. Also
in July, a negative earnings warning from Nokia sent the tech sector into a
tailspin. Negative sentiment took a rest in August, and the market responded
with a relatively smooth ascent. But in September, market participants found
themselves back on the all-too-familiar, bumpy flight, influenced this time by
investor concerns over factors including high energy prices, the weak euro and
short-term earnings.
In short, volatility was at the helm for the last six months. Yet, somehow,
the results of the indexes fail to fully capture the seat-gripping experience
investors endured. The Nasdaq Composite Index fell 19.68% for the six-month
period ended September 30, 2000, finishing the period down 9.74% for the
year-to-date. The S&P 500 Index slid 3.60%, ending the period with a
year-to-date return of -1.39%. A wide disparity existed between growth and value
investing styles for the last six months, with the Russell 2000 Growth and Value
Indexes returning -11.05% and +9.43%, respectively.
We are happy to report that the majority of PBHG Funds beat the returns of
their benchmarks for the six-month period ended September 30, 2000. While heavy
weighting in technology subjected many of the growth funds to a high level of
volatility, that same overweighting and favorable stock selection within the
technology sector has benefited returns for the year-to-date and trailing
12-month periods. Our disciplined approach to growth investing met with success
across the market-cap spectrum during the period. PBHG Large Cap Growth and
Large Cap 20 returned +4.35% and -2.35%, respectively, versus -3.60% for their
benchmark, the S&P 500. PBHG Core Growth delivered a return of +4.83%, versus
-5.07% for the Russell MidCap Growth Index. PBHG Growth Fund, PBHG Class and
Emerging Growth Fund, although down 7.85% and 2.92%, respectively, for the
period still compared favorably to the -11.05% return of the Russell 2000 Growth
Index. Performance has also been favorable for our value mutual funds. PBHG
Small Cap Value returned +10.51%, versus -2.72% for the Russell 2000 Index. PBHG
Mid-Cap Value gained +9.41%, compared with a gain of 8.45% for the S&P Mid Cap
400 Index. PBHG Large Cap Value grew an impressive 11.03%, against a decline of
3.60% for its benchmark, the S&P 500 Index.
While we don't attempt to predict the direction of the economy or markets, we
continue to believe the backdrop of the U.S. economy and equity market remains
favorable. We are also confident that technological innovations will continue to
enhance productivity and foster economic growth over the long-term. We remain
focused on our bottom-up research and disciplined growth and value investment
processes, looking to invest in the most attractive companies that we find in
the investment universe for each of the funds. Regardless of the turbulence we
may experience along the way, we are confident in our approach. We continuously
strive to maintain steady hands in an environment of exaggerated volatility and
to deliver the long-term results our shareholders expect.
We thank you for your continuing confidence in the PBHG Funds.
Sincerely,
/s/ HAROLD J. BAXTER [PHOTO OMITTED] /s/ GARY L. PILGRIM [PHOTO OMITTED]
Harold J. Baxter Gary L. Pilgrim
CHAIRMAN PRESIDENT
THE PBHG FUNDS, INC. THE PBHG FUNDS, INC.
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THE PBHG FUNDS, INC.
PBHG GROWTH FUND (UNAUDITED)
PBHG GROWTH FUND PBHGX
INVESTMENT FOCUS
STYLE
Value Blend Growth
------------------------
Large
------------------------
Medium MARKET CAPITALIZATION
---------------------X--
Small
------------------------
AVERAGE ANNUAL TOTAL RETURN 1
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
One Annualized Annualized Annualized Annualized
6 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 Class 3 (7.85)% 87.96% 26.43% 20.85% 27.96% 21.68%
-----------------------------------------------------------------------------------------------
PBHG Growth Fund -
Advisor Class 4 (7.94)% 87.55% 26.12% 20.61% 27.84% 21.60%
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</TABLE>
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]
PLOT POINTS FOLLOWS:
PBHG Growth Fund, Russell 2000 Lipper Mid-Cap Growth
PBHG Class Growth Index 5 Funds Average 6
12/31/85 10,000 10,000 10,000
1/31/86 10,250 10,228 10,284
2/28/86 11,080 10,983 11,064
3/31/86 11,510 11,482 11,509
4/30/86 11,640 11,763 11,577
5/31/86 12,580 12,194 12,140
6/30/86 12,680 12,233 12,232
7/31/86 11,700 10,918 11,180
8/31/86 12,380 11,153 11,587
9/30/86 11,240 10,245 10,736
10/31/86 12,193 10,766 11,289
11/30/86 12,676 10,718 11,476
12/31/86 12,394 10,358 11,192
1/31/87 14,728 11,691 12,462
2/28/87 16,509 12,823 13,569
3/31/87 16,871 13,175 13,706
4/30/87 16,911 12,767 13,506
5/31/87 17,046 12,677 13,597
6/30/87 16,508 12,991 13,726
7/31/87 16,604 13,302 14,205
8/31/87 17,548 13,687 14,775
9/30/87 17,524 13,413 14,538
10/31/87 12,898 8,994 10,582
11/30/87 11,840 8,399 9,909
12/31/87 13,832 9,273 11,117
1/31/88 13,566 9,454 11,222
2/29/88 14,814 10,334 12,015
3/31/88 14,660 10,888 12,193
4/30/88 15,011 11,151 12,470
5/31/88 14,576 10,783 12,318
6/30/88 15,684 11,579 13,209
7/31/88 14,969 11,363 12,817
8/31/88 14,099 10,950 12,462
9/30/88 14,744 11,260 12,933
10/31/88 14,449 11,073 12,743
11/30/88 14,119 10,642 12,442
12/31/88 14,780 11,162 13,000
1/31/89 15,792 11,638 13,839
2/28/89 15,553 11,667 13,780
3/31/89 15,244 11,991 14,136
4/30/89 16,467 12,588 15,047
5/31/89 18,020 13,191 15,897
6/30/89 17,004 12,767 15,406
7/31/89 18,401 13,365 16,488
8/31/89 19,177 13,749 17,058
9/30/89 19,896 13,907 17,273
10/31/89 18,852 13,146 16,544
11/30/89 18,698 13,263 16,710
12/31/89 19,109 13,413 16,908
1/31/90 17,501 12,029 15,446
2/28/90 18,537 12,485 15,934
3/31/90 19,377 13,057 16,680
4/30/90 18,948 12,669 16,381
5/31/90 21,627 13,799 18,142
6/30/90 21,823 13,881 18,280
7/31/90 20,716 13,250 17,638
8/31/90 17,984 11,332 15,531
9/30/90 15,483 10,259 14,324
10/31/90 14,787 9,683 13,927
11/30/90 16,614 10,574 15,187
12/31/90 17,266 11,078 15,985
1/31/91 19,518 12,118 17,420
2/28/91 20,782 13,510 18,803
3/31/91 22,659 14,462 20,026
4/30/91 22,284 14,290 19,711
5/31/91 23,271 14,980 20,726
6/30/91 20,664 13,961 19,398
7/31/91 22,323 14,593 20,775
8/31/91 23,449 15,238 21,801
9/30/91 23,074 15,467 21,856
10/31/91 23,745 16,126 22,638
11/30/91 22,724 15,285 21,715
12/31/91 26,179 16,748 24,766
1/31/92 27,174 18,064 25,521
2/29/92 27,447 18,257 25,853
3/31/92 25,782 17,207 24,477
4/30/92 24,862 16,208 23,315
5/31/92 24,688 16,171 23,347
6/30/92 23,544 15,140 22,369
7/31/92 23,420 15,615 23,132
8/31/92 22,649 15,014 22,591
9/30/92 23,644 15,433 23,194
10/31/92 25,061 16,068 24,196
11/30/92 28,298 17,568 26,112
12/31/92 33,612 18,050 27,000
1/31/93 33,003 18,274 27,451
2/28/93 30,891 17,281 26,114
3/31/93 34,668 17,726 27,205
4/30/93 33,868 17,164 26,520
5/31/93 37,613 18,193 28,344
6/30/93 39,822 18,236 28,676
7/31/93 40,302 18,418 28,845
8/31/93 43,375 19,300 30,616
9/30/93 47,344 19,938 31,963
10/31/93 48,145 20,514 32,309
11/30/93 46,320 19,684 31,071
12/31/93 49,312 20,461 32,500
1/31/94 51,258 21,006 33,404
2/28/94 51,777 20,913 33,237
3/31/94 47,592 19,629 31,253
4/30/94 47,884 19,659 31,250
5/31/94 45,192 19,218 30,675
6/30/94 41,591 18,397 29,141
7/31/94 42,888 18,659 29,785
8/31/94 47,657 20,028 32,028
9/30/94 49,052 20,112 32,220
10/31/94 50,577 20,326 33,051
11/30/94 49,571 19,504 31,888
12/31/94 51,654 19,964 32,618
1/31/95 49,122 19,557 32,236
2/28/95 51,849 20,461 33,726
3/31/95 54,219 21,058 35,078
4/30/95 53,667 21,375 35,257
5/31/95 54,089 21,655 35,937
6/30/95 59,998 23,147 38,791
7/31/95 67,238 24,951 42,263
8/31/95 67,141 25,258 42,905
9/30/95 70,712 25,779 44,278
10/31/95 72,660 24,510 43,016
11/30/95 75,550 25,591 44,883
12/31/95 77,660 26,158 45,215
1/31/96 74,186 25,942 45,093
2/29/96 79,673 27,125 47,239
3/31/96 82,140 27,662 48,368
4/30/96 89,056 29,786 52,707
5/31/96 93,114 31,314 55,137
6/30/96 89,348 29,278 52,573
7/31/96 80,128 25,704 47,026
8/31/96 84,218 27,606 50,182
9/30/96 91,621 29,027 53,790
10/31/96 85,192 27,776 51,633
11/30/96 87,465 28,548 52,686
12/31/96 85,290 29,105 52,665
1/31/97 85,225 29,832 54,240
2/28/97 76,102 28,031 50,584
3/31/97 68,375 26,052 47,043
4/30/97 68,667 25,751 46,874
5/31/97 77,141 29,621 52,761
6/30/97 80,420 30,626 55,362
7/31/97 85,972 32,195 59,487
8/31/97 84,153 33,161 59,874
9/30/97 90,192 35,808 64,532
10/31/97 85,160 33,656 60,731
11/30/97 82,465 32,855 59,401
12/31/97 82,433 32,874 59,787
1/31/98 80,290 32,436 58,872
2/28/98 87,757 35,299 63,941
3/31/98 91,653 36,780 67,049
4/30/98 92,010 37,006 67,538
5/31/98 83,569 34,317 63,216
6/30/98 88,212 34,668 65,991
7/31/98 80,095 31,773 61,833
8/31/98 60,388 24,439 48,613
9/30/98 65,063 26,917 52,337
10/31/98 66,524 28,320 54,551
11/30/98 72,530 30,517 59,390
12/31/98 82,920 33,279 66,903
1/31/99 84,705 34,776 69,545
2/28/99 76,167 31,595 64,135
3/31/99 79,576 32,720 68,842
4/30/99 76,102 35,610 71,713
5/31/99 78,764 35,666 71,512
6/30/99 88,764 37,545 78,184
7/31/99 87,530 36,384 77,551
8/31/99 89,803 35,023 77,551
9/30/99 96,978 35,699 79,738
10/31/99 105,776 36,614 86,850
11/30/99 122,561 40,485 97,794
12/31/99 159,576 47,621 116,276
1/31/00 159,543 47,177 114,683
2/29/00 216,428 58,154 143,848
3/31/00 197,803 52,041 135,619
4/30/00 166,851 46,786 121,312
5/31/00 151,392 42,689 110,624
6/30/00 180,997 48,204 126,786
7/31/00 168,367 44,073 120,320
8/31/00 198,511 48,709 135,529
9/30/00 182,277 46,289 130,365
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 Advisor Class from its inception date
to September 30, 2000 was 23.95%.
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 Average is not intended to imply the Fund's past or
future performance.
SECTOR WEIGHTINGS - AT SEPTEMBER 30, 2000
[PIE CHART OMITTED]
PLOT POINTS FOLLOWS:
Consumer Cyclical 16%
Health Care 12%
Industrial 8%
Services 4%
Technology 49%
Cash 11%
% of Total Portfolio Investments
TOP TEN HOLDINGS - SEPTEMBER 30, 2000
Micromuse 3.3%
Polycom 3.2%
Gemstar-TV Guide International 3.1%
Flextronics International 2.8%
Micrel 2.6%
Minimed 2.6%
Transwitch 2.5%
King Pharmaceuticals 2.3%
Extreme Networks 2.3%
Art Technology 2.3%
------------------------------------------------------
% of Total Portfolio Investments 27.0%
[LOGO OMITTED] 4
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THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
As of September 30, 2000 (UNAUDITED)
PBHG GROWTH FUND PBHGX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMMON STOCK -- 94.2%
CONSUMER CYCLICAL -- 17.4%
AUDIO/VIDEO PRODUCTS -- 3.4%
Polycom* 2,986,400 $ 199,995
-----------
199,995
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DISTRIBUTION/WHOLESALE -- 0.8%
Fastenal 846,000 48,751
-----------
48,751
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E-COMMERCE -- 0.4%
Purchasepro.com* 240,000 21,090
-----------
21,090
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MOTION PICTURES & SERVICES -- 2.4%
Macrovision* 1,733,800 140,438
Zomax* 422,600 2,958
-----------
143,396
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MULTIMEDIA -- 3.3%
Gemstar-TV Guide International* 2,251,100 196,268
-----------
196,268
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RADIO -- 0.7%
Hispanic Broadcasting* 1,601,700 44,647
-----------
44,647
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RETAIL-BEDDING -- 0.2%
Bed Bath & Beyond* 574,500 14,012
-----------
14,012
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RETAIL-COMPUTER EQUIPMENT -- 2.3%
CDW Computer Centers* 1,955,800 134,950
-----------
134,950
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RETAIL-DISCOUNT -- 1.4%
Dollar Tree Stores* 2,067,450 83,861
-----------
83,861
--------------------------------------------------------------------------------
RETAIL-JEWELRY -- 1.5%
Tiffany & Company 2,354,800 90,807
-----------
90,807
--------------------------------------------------------------------------------
RETAIL-RESTAURANTS -- 1.0%
Starbucks* 1,564,600 62,682
-----------
62,682
-----------
OTAL CONSUMER CYCLICAL (COST $566,726) 1,040,459
-----------
--------------------------------------------------------------------------------
HEALTH CARE -- 12.6%
MEDICAL INFORMATION SYSTEMS -- 0.2%
Allscripts* 800,100 11,301
-----------
11,301
--------------------------------------------------------------------------------
MEDICAL INSTRUMENTS -- 1.7%
Techne* 913,300 102,290
-----------
102,290
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
MEDICAL PRODUCTS -- 2.8%
Minimed* 1,861,500 $ 166,372
-----------
166,372
--------------------------------------------------------------------------------
MEDICAL-BIOMEDICAL/GENETIC -- 2.2%
Incyte Pharmaceuticals* 1,669,800 68,670
Invitrogen* 874,500 62,199
-----------
130,869
--------------------------------------------------------------------------------
MEDICAL-DRUGS -- 4.3%
Celgene* 1,860,900 110,724
King Pharmaceuticals* 4,338,193 145,058
-----------
255,782
--------------------------------------------------------------------------------
PHARMACY SERVICES -- 1.4%
Express Scripts, Cl A*+ 1,196,500 86,447
-----------
86,447
-----------
TOTAL HEALTH CARE (COST $466,295) 753,061
-----------
--------------------------------------------------------------------------------
INDUSTRIAL -- 8.9%
BUILDING & CONSTRUCTION-MISCELLANEOUS -- 1.2%
Dycom Industries* 1,738,700 72,373
-----------
72,373
--------------------------------------------------------------------------------
CIRCUIT BOARDS -- 1.8%
Jabil Circuit* 1,896,300 107,615
-----------
107,615
--------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-MISCELLANEOUS -- 3.9%
Flextronics International* 2,128,700 174,819
Gentex* 2,361,900 59,048
-----------
233,867
--------------------------------------------------------------------------------
INDUSTRIAL AUTOMATION/ROBOTICS -- 0.6%
Cognex* 864,500 34,094
-----------
34,094
--------------------------------------------------------------------------------
INSTRUMENTS-SCIENTIFIC -- 0.9%
PerkinElmer 507,100 52,929
-----------
52,929
--------------------------------------------------------------------------------
LASERS-SYSTEMS/COMPONENTS -- 0.5%
Cymer* 942,600 28,926
-----------
28,926
-----------
TOTAL INDUSTRIAL (COST $332,948) 529,804
-----------
--------------------------------------------------------------------------------
SERVICES -- 3.9%
ADVERTISING SALES -- 1.1%
Lamar Advertising* 1,774,400 67,205
-----------
67,205
--------------------------------------------------------------------------------
ADVERTISING SERVICES -- 0.8%
Getty Images* 1,624,600 49,449
-----------
49,449
--------------------------------------------------------------------------------
[LOGO OMITTED] 5
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG GROWTH FUND PBHGX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMMERCIAL SERVICES -- 1.2%
Wireless Facilities* 1,274,100 $ 73,500
------------
73,500
--------------------------------------------------------------------------------
COMPUTER SERVICES -- 0.8%
MarchFIRST* 2,970,500 46,600
------------
46,600
-----------
TOTAL SERVICES (COST $249,600) 236,754
------------
--------------------------------------------------------------------------------
TECHNOLOGY -- 51.4%
APPLICATIONS SOFTWARE -- 3.5%
Peregrine Systems* 4,135,900 78,324
Quest Software* 1,320,800 82,034
VA Linux Systems* 995,500 46,042
------------
206,400
--------------------------------------------------------------------------------
CELLULAR TELECOMMUNICATION -- 0.4%
Triton PCS Holdings* 865,500 23,801
------------
23,801
--------------------------------------------------------------------------------
COMPUTER DATA SECURITY -- 0.2%
RSA Security* 221,200 9,539
------------
9,539
--------------------------------------------------------------------------------
COMPUTER GRAPHICS -- 1.8%
Nvidia* 1,317,900 107,903
------------
107,903
--------------------------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 0.5%
Silicon Storage Technology* 1,033,200 28,090
------------
28,090
--------------------------------------------------------------------------------
DECISION SUPPORT SOFTWARE -- 1.0%
Advent Software* 828,200 57,870
------------
57,870
--------------------------------------------------------------------------------
EDUCATIONAL SOFTWARE -- 2.0%
Smartforce ADR* 2,520,300 119,399
------------
119,399
--------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 12.0%
Actel* 874,500 31,427
Cree* 517,800 60,194
Dallas Semiconductor 1,229,200 40,410
Lattice Semiconductor* 1,035,200 55,642
Microchip Technology* 3,672,675 121,428
Qlogic* 1,189,200 104,650
Semtech* 2,214,400 95,496
Transwitch* 2,461,900 156,946
Virata* 816,800 54,011
------------
720,204
--------------------------------------------------------------------------------
ENTERPRISE SOFTWARE/SERVICES -- 2.0%
Informatica* 1,280,600 119,416
------------
119,416
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
INTERNET CONTENT -- 2.1%
Go2Net* 1,447,500 $ 78,549
Infospace* 1,490,600 45,091
------------
123,640
--------------------------------------------------------------------------------
INTERNET SOFTWARE -- 9.0%
Agile Software* 402,000 36,155
Art Technology* 1,497,600 141,898
E.Piphany* 499,500 38,493
Interwoven* 1,043,500 117,981
Real Network* 1,034,500 41,121
Software.com* 680,200 123,414
Vignette* 1,303,700 38,948
------------
538,010
--------------------------------------------------------------------------------
NETWORK SOFTWARE -- 3.4%
Micromuse* 1,026,000 206,162
------------
206,162
--------------------------------------------------------------------------------
NETWORKING PRODUCTS -- 4.1%
Cobalt Networks* 888,000 51,393
Extreme Networks* 1,257,400 143,972
JNI* 570,200 50,748
------------
246,113
--------------------------------------------------------------------------------
SATELLITE TELECOMMUNICATIONS -- 0.6%
Gilat Satellite* 494,400 38,007
------------
38,007
--------------------------------------------------------------------------------
SEMICONDUCTOR COMPONENTS-INTEGRATED CIRCUITS -- 3.9%
Cypress Semiconductor* 1,533,500 63,736
Micrel* 2,491,700 166,944
------------
230,680
--------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT -- 0.9%
Credence Systems* 791,579 23,748
Helix Technology 479,100 14,313
Varian Semiconductor Equipment* 467,500 17,502
------------
55,563
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT -- 3.3%
Advanced Fibre* 1,351,500 51,187
Audiocodes Limited*+ 976,500 83,125
Ditech Communications* 1,035,600 42,459
Terayon Communication* 695,100 23,590
------------
200,361
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT-FIBER OPTICS -- 0.2%
Newport 76,500 12,184
------------
12,184
--------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES -- 0.5%
Inet Technologies* 1,047,500 30,639
------------
30,639
--------------------------------------------------------------------------------
TOTAL TECHNOLOGY (COST $2,077,447) 3,073,981
------------
TOTAL COMMON STOCK (COST $3,693,016) 5,634,059
------------
--------------------------------------------------------------------------------
[LOGO OMITTED] 6
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-------------------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG GROWTH FUND PBHGX
Face Market
Description Amount (000) Value (000)
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 11.2%
Barclays
6.55%, dated 09/29/00, matures 10/02/00,
repurchase price $113,514,061 (collateralized
by U.S. Government Agency Instruments:
total market value $115,721,662)(A) $113,452 $ 113,452
Deutsche
6.55%, dated 09/29/00, matures 10/02/00,
repurchase price $154,582,924 (collateralized
by U.S. Government Agency Instruments:
total market value $157,588,980) (A) 154,499 154,499
Greenwich Capital
6.55%, dated 09/29/00, matures 10/02/00,
repurchase price $42,716,596 (collateralized
by U.S. Government Agency Instruments:
total market value $43,549,463) (A) 42,693 42,693
J.P. Morgan
6.55%, dated 09/29/00, matures 10/02/00,
repurchase price $133,117,606 (collateralized
by U.S. Government Agency Instruments:
total market value $135,706,118) (A) 133,045 133,045
J.P. Morgan
6.55%, dated 09/29/00, matures 10/02/00,
repurchase price $63,076,676 (collateralized
by U.S. Government Agency Instruments:
total market value $64,303,111) (A) 63,042 63,042
Morgan Stanley
6.55%, dated 09/29/00, matures 10/02/00,
repurchase price $82,678,749 (collateralized
by U.S. Government Agency Instruments:
total market value $85,212,715) (A) 82,634 82,634
Prudential
6.55%, dated 09/29/00, matures 10/02/00,
repurchase price $82,540,628 (collateralized
by U.S. Government Agency Instruments:
total market value $84,145,579) (A) 82,496 82,496
------------
TOTAL REPURCHASE AGREEMENTS (COST $671,861) 671,861
------------
TOTAL INVESTMENTS-- 105.4% (COST $4,364,877) 6,305,920
------------
--------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (5.4)%
Payable for Capital Shares Redeemed (395,368)
Other Assets and Liabilities, Net 69,305
------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (326,063)
------------
--------------------------------------------------------------------------------
Market
Description Value (000)
--------------------------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 400 million
shares -- $0.001 par value) based on 108,069,119
outstanding shares of common stock $2,987,961
Fund Shares of Advisor Class (authorized 200 million
shares -- $0.001 par value)
based on 2,446,819 outstanding shares of common stock 70,713
Accumulated net investment loss (19,449)
Accumulated net realized gain on investments 999,589
Net unrealized appreciation on investments 1,941,043
------------
TOTAL NET ASSETS -- 100.0% $5,979,857
------------
------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE-- PBHG CLASS $54.12
------------
------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE-- ADVISOR CLASS $53.57
------------
------------
* 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, 2000 was $169,571,688.
The accompanying notes are an integral part of the financial statements.
[LOGO OMITTED] 7
<PAGE>
THE PBHG FUNDS, INC.
PBHG EMERGING GROWTH FUND (UNAUDITED)
PBHG EMERGING GROWTH FUND PBEGX
INVESTMENT FOCUS
STYLE
Value Blend Growth
------------------------
Large
------------------------
Medium MARKET CAPITALIZATION
------------------------
X Small
------------------------
AVERAGE ANNUAL TOTAL RETURN 1
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
One Annualized Annualized Annualized
6 Year 3 Year 5 Year Inception
Months2 Return Return Return to Date 3
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PBHG Emerging Growth Fund (2.92)% 65.35% 15.01% 16.03% 23.82%
-------------------------------------------------------------------------------------------
</TABLE>
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]
PLOT POINTS FOLLOWS:
PBHG Emerging Russell 2000 Lipper Small-Cap Growth
Growth Fund Growth Index 4 Funds Average 5
6/30/93 10,000 10,000 10,000
7/31/93 10,198 10,100 10,055
8/31/93 11,304 10,583 10,596
9/30/93 12,500 10,933 11,053
10/31/93 13,063 11,249 11,194
11/30/93 12,332 10,794 10,784
12/31/93 13,100 11,220 11,293
1/31/94 13,636 11,519 11,614
2/28/94 14,075 11,468 11,619
3/31/94 13,100 10,764 10,948
4/30/94 13,261 10,780 10,924
5/31/94 12,854 10,539 10,647
6/30/94 12,008 10,088 10,106
7/31/94 12,372 10,232 10,283
8/31/94 13,689 10,983 11,023
9/30/94 14,621 11,029 11,158
10/31/94 15,628 11,146 11,419
11/30/94 15,435 10,695 11,031
12/31/94 16,216 10,947 11,261
1/31/95 15,518 10,724 11,085
2/28/95 16,130 11,220 11,570
3/31/95 17,290 11,548 11,960
4/30/95 17,666 11,721 12,070
5/31/95 17,762 11,875 12,217
6/30/95 19,384 12,693 13,124
7/31/95 21,328 13,682 14,267
8/31/95 21,575 13,851 14,451
9/30/95 22,359 14,136 14,880
10/31/95 21,682 13,441 14,450
11/30/95 22,982 14,033 15,061
12/31/95 24,072 14,344 15,332
1/31/96 23,498 14,226 15,160
2/29/96 24,838 14,874 15,999
3/31/96 25,963 15,169 16,469
4/30/96 29,722 16,334 18,106
5/31/96 31,084 17,171 19,078
6/30/96 29,159 16,055 18,121
7/31/96 25,142 14,095 16,234
8/31/96 27,122 15,138 17,368
9/30/96 29,643 15,918 18,434
10/31/96 28,068 15,231 17,809
11/30/96 28,011 15,655 18,140
12/31/96 28,184 15,960 18,356
1/31/97 28,475 16,359 18,804
2/28/97 24,311 15,371 17,612
3/31/97 22,403 14,286 16,400
4/30/97 21,345 14,121 16,148
5/31/97 25,567 16,243 18,445
6/30/97 27,033 16,794 19,524
7/31/97 27,882 17,655 20,815
8/31/97 28,184 18,184 21,252
9/30/97 30,918 19,636 22,978
10/31/97 28,347 18,455 21,838
11/30/97 27,289 18,016 21,395
12/31/97 27,149 18,027 21,461
1/31/98 26,823 17,787 21,167
2/28/98 28,766 19,357 22,985
3/31/98 30,045 20,169 24,144
4/30/98 30,255 20,293 24,392
5/31/98 27,568 18,818 22,751
6/30/98 28,417 19,011 23,244
7/31/98 26,009 17,423 21,627
8/31/98 21,147 13,401 16,953
9/30/98 23,020 14,760 18,272
10/31/98 22,740 15,530 19,135
11/30/98 24,532 16,735 20,774
12/31/98 27,964 18,249 22,964
1/31/99 28,058 19,070 23,455
2/28/99 24,800 17,326 21,333
3/31/99 24,064 17,943 22,239
4/30/99 23,481 19,527 23,189
5/31/99 24,496 19,558 23,453
6/30/99 27,252 20,588 25,536
7/31/99 26,610 19,952 25,521
8/31/99 26,353 19,206 25,184
9/30/99 28,443 19,576 25,889
10/31/99 30,335 20,078 27,282
11/30/99 33,604 22,201 30,853
12/31/99 41,484 26,114 36,619
1/31/00 39,861 25,870 36,213
2/29/00 53,014 31,889 45,422
3/31/00 48,448 28,537 42,874
4/30/00 42,392 25,656 38,063
5/31/00 37,244 23,409 34,877
6/30/00 46,958 26,433 40,838
7/31/00 42,731 24,168 38,192
8/31/00 49,756 26,710 42,691
9/30/00 47,031 25,383 41,000
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 Average is not intended to imply the Fund's
past or future performance.
SECTOR WEIGHTINGS - AT SEPTEMBER 30, 2000
[PIE CHART OMITTED]
PLOT POINT FOLLOWS:
Consumer Cyclical 7%
Health Care 9%
Industrial 6%
Services 8%
Technology 56%
Cash 14%
% of Total Portfolio Investments
TOP TEN HOLDINGS - SEPTEMBER 30, 2000
Micromuse 3.6%
Polycom 3.6%
Advent Software 2.9%
Transwitch 2.8%
MMC Networks 2.7%
Business Objects ADR 2.6%
Natural Microsystems 2.5%
Diamond Technology Partners, Cl A 2.2%
Actuate 2.2%
InFocus 2.1%
------------------------------------------------------
% of Total Portfolio Investments 27.2%
[LOGO OMITTED] 8
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG EMERGING GROWTH FUND PBEGX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMMON STOCK -- 93.3%
CONSUMER CYCLICAL -- 8.1%
AUDIO/VIDEO PRODUCTS -- 3.9%
Polycom* 713,000 $ 47,749
------------
47,749
--------------------------------------------------------------------------------
RETAIL-APPAREL/SHOE -- 0.7%
Charlotte Russe Holding* 304,800 4,039
Hot Topic* 145,300 4,359
------------
8,398
--------------------------------------------------------------------------------
RETAIL-COMPUTER EQUIPMENT -- 1.2%
Insight Enterprises* 528,450 14,400
------------
14,400
--------------------------------------------------------------------------------
RETAIL-CONSUMER ELECTRONICS -- 0.7%
Tweeter Home Entertainment Group* 230,200 8,359
------------
8,359
--------------------------------------------------------------------------------
RETAIL-RESTAURANTS -- 0.6%
California Pizza Kitchen* 263,700 7,384
------------
7,384
--------------------------------------------------------------------------------
RETAIL-VARIETY STORE -- 1.0%
99 Cents Only Stores* 247,700 12,431
------------
12,431
------------
TOTAL CONSUMER CYCLICAL (COST $46,141) 98,721
------------
--------------------------------------------------------------------------------
HEALTH CARE -- 9.7%
MEDICAL INFORMATION SYSTEMS -- 1.3%
Allscripts* 275,500 3,891
Dendrite International* 447,800 12,007
------------
15,898
--------------------------------------------------------------------------------
MEDICAL INSTRUMENTS -- 0.9%
Techne* 97,000 10,864
------------
10,864
--------------------------------------------------------------------------------
MEDICAL PRODUCTS -- 1.8%
Minimed* 243,200 21,736
------------
21,736
--------------------------------------------------------------------------------
MEDICAL-BIOMEDICAL/GENETIC -- 1.4%
Myriad Genetics* 192,000 16,584
------------
16,584
--------------------------------------------------------------------------------
MEDICAL-DRUGS -- 2.6%
Medicis Pharmaceutical, Cl A* 320,550 19,714
Priority Healthcare, Cl B* 150,000 11,437
------------
31,151
--------------------------------------------------------------------------------
PHARMACY SERVICES -- 0.8%
Accredo Health* 200,000 9,775
------------
9,775
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
RESPIRATORY PRODUCTS -- 0.9%
Resmed* 367,900 $ 11,497
------------
11,497
------------
TOTAL HEALTH CARE (COST $75,008) 117,505
------------
--------------------------------------------------------------------------------
INDUSTRIAL -- 6.4%
BUILDING & CONSTRUCTION-MISCELLANEOUS -- 1.0%
Dycom Industries* 296,000 12,321
------------
12,321
--------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING OPERATIONS -- 0.5%
GSI Lumonics* 352,100 5,810
------------
5,810
--------------------------------------------------------------------------------
ELECTRONIC CONNECTORS -- 0.6%
Merix* 103,300 6,695
------------
6,695
--------------------------------------------------------------------------------
ELECTRONIC MEASURING INSTRUMENTS -- 1.2%
Molecular Devices* 151,300 14,865
------------
14,865
--------------------------------------------------------------------------------
INSTRUMENTS-CONTROLS -- 0.3%
Photon Dynamics* 105,600 3,986
------------
3,986
--------------------------------------------------------------------------------
INSTRUMENTS-SCIENTIFIC -- 0.5%
Varian* 136,400 5,874
------------
5,874
--------------------------------------------------------------------------------
LASERS-SYSTEMS/COMPONENts -- 1.4%
Cymer* 122,500 3,759
Electro Scientific Industries* 391,100 13,737
------------
17,496
--------------------------------------------------------------------------------
POWER CONVERSION/SUPPLY EQUIPMENT -- 0.9%
Advanced Energy Industries* 326,900 10,788
------------
10,788
------------
TOTAL INDUSTRIAL (COST $77,130) 77,835
------------
--------------------------------------------------------------------------------
SERVICES -- 8.4%
ADVERTISING SERVICES -- 1.4%
Getty Images* 550,400 16,753
------------
16,753
--------------------------------------------------------------------------------
COMMERCIAL SERVICES -- 0.5%
Plexus* 94,200 6,641
------------
6,641
--------------------------------------------------------------------------------
COMPUTER SERVICES -- 1.4%
Factset Research Systems 438,900 16,503
------------
16,503
--------------------------------------------------------------------------------
[LOGO OMITTED] 9
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
--------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG EMERGING GROWTH FUND PBEGX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
CONSULTING SERVICES -- 3.8%
Diamond Technology Partners, Cl A* 393,650 $ 29,228
Forrester Research* 274,900 17,525
----------
46,753
--------------------------------------------------------------------------------
RESEARCH & DEVELOPMENT -- 1.3%
Albany Molecular Research* 278,200 15,631
----------
15,631
----------
TOTAL SERVICES (COST $53,706) 102,281
----------
--------------------------------------------------------------------------------
TECHNOLOGY -- 60.7%
APPLICATIONS SOFTWARE -- 6.8%
Actuate* 839,300 28,995
Genomica* 51,200 995
Peregrine Systems* 706,700 13,383
Quest Software* 405,300 25,173
Resonate* 163,100 6,443
Silverstream Software* 248,100 7,474
----------
82,463
--------------------------------------------------------------------------------
COMPUTER GRAPHICS -- 2.0%
Nvidia* 297,800 24,382
----------
24,382
--------------------------------------------------------------------------------
COMPUTERS-INTEGRATED SYSTEMS -- 0.1%
NetScout Systems* 75,800 1,800
----------
1,800
--------------------------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 0.5%
M-Systems Flash Disk Pioneers* 104,400 3,987
Simple Technology* 259,100 2,510
----------
6,497
--------------------------------------------------------------------------------
COMPUTERS-PERIPHERAL EQUIPMENT -- 2.3%
InFocus* 527,400 27,952
----------
27,952
--------------------------------------------------------------------------------
DATA PROCESSING/MANAGEMENT -- 0.8%
Documentum* 113,800 9,239
----------
9,239
--------------------------------------------------------------------------------
DECISION SUPPORT SOFTWARE -- 4.2%
Advent Software* 546,900 38,215
Netiq* 196,000 12,875
----------
51,090
--------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 7.1%
Actel* 235,000 8,445
Cree* 166,300 19,332
Integrated Silicon Solution* 444,000 6,299
Omnivision Technologies* 197,700 7,154
Silicon Image* 295,800 7,340
Transwitch* 573,450 36,558
----------
85,128
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
ENTERPRISE SOFTWARE SERVICE -- 5.3%
Avantgo* 111,400 $ 2,228
Business Objects ADR* 304,700 34,450
Informatica* 291,100 27,145
----------
63,823
--------------------------------------------------------------------------------
INTERNET CONTENT -- 0.9%
Digital Think* 67,000 2,822
Jupiter Media Metrix* 212,435 3,386
Mainspring* 102,500 762
Vastera* 197,500 4,345
----------
11,315
--------------------------------------------------------------------------------
INTERNET SOFTWARE -- 5.3%
Agile Software* 200,000 17,988
Art Technology* 143,200 13,568
Clarent* 109,500 4,312
Commerce One* 212,320 16,667
Integrated Information Systems* 265,700 1,262
Matrixone* 48,500 1,940
Niku* 227,700 5,550
Tumbleweed* 65,000 3,315
----------
64,602
--------------------------------------------------------------------------------
NETWORK SOFTWARE -- 3.9%
Micromuse* 238,500 47,924
----------
47,924
--------------------------------------------------------------------------------
NETWORKING PRODUCTS -- 2.9%
MMC Networks* 279,600 35,369
----------
35,369
--------------------------------------------------------------------------------
SATELLITE TELECOMMUNICATIONS -- 0.7%
Celeritek* 241,400 9,098
----------
9,098
--------------------------------------------------------------------------------
SEMICONDUCTOR COMPONENTS-INTEGRATED CIRCUITS -- 4.0%
Micrel* 312,100 20,911
O2Micro International* 259,100 4,458
Sipex* 292,500 12,303
Triquint Semiconductor* 300,000 10,931
----------
48,603
--------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT -- 2.4%
Credence Systems* 244,200 7,326
Dupont Photomasks* 41,700 2,450
LTX* 156,800 2,969
Rudolph Technologies* 28,500 953
Varian Semiconductor Equipment* 419,200 15,694
----------
29,392
--------------------------------------------------------------------------------
[LOGO OMITTED] 10
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG EMERGING GROWTH FUND PBEGX
Shares/Face Market
Description Amount (000) Value (000)
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT -- 9.2%
Anaren Microwave* 62,400 $ 8,463
Audiocodes Limited* 256,000 21,792
Digital Lightwave* 125,000 9,078
Ditech Communications* 171,300 7,023
MCK Communications* 515,700 11,668
Natural Microsystems* 607,200 32,665
Tut Systems* 227,600 19,645
----------
110,334
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT-FIBER OPTICS -- 0.7%
MRV Communications* 183,200 8,301
----------
8,301
--------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES -- 0.1%
Latitude Communications* 160,600 1,245
----------
1,245
--------------------------------------------------------------------------------
WIRELESS EQUIPMENT -- 1.5%
Netro* 131,900 7,815
Powerwave Technologies* 286,800 10,890
----------
18,705
----------
TOTAL TECHNOLOGY (COST $394,843) 737,262
----------
TOTAL COMMON STOCK (COST $646,828) 1,133,604
----------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 15.0%
J.P. Morgan
6.58%, dated 09/29/00, matures 10/02/00,
repurchase price $89,614,915 (collateralized
by U.S. Government Agency Instruments:
total market value $91,357,531) (A) $89,566 89,566
Morgan Stanley
6.58%, dated 09/29/00, matures 10/02/00,
repurchase price $37,041,919 (collateralized
by U.S. Government Agency Instruments:
total market value $37,786,089) (A) 37,022 37,022
Prudential
6.58%, dated 09/29/00, matures 10/02/00,
repurchase price $56,478,259 (collateralized
by U.S. Government Agency Instruments:
total market value $57,579,682) (A) 56,447 56,447
----------
TOTAL REPURCHASE AGREEMENTS (COST $183,035) 183,035
----------
TOTAL INVESTMENTS-- 108.3% (COST $829,863) 1,316,639
----------
--------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (8.3)%
Payable for Capital Shares Redeemed (120,106)
Other Assets and Liabilities, Net 19,048
----------
TOTAL OTHER ASSETS AND LIABILITIES, NET (101,058)
----------
--------------------------------------------------------------------------------
Market
Description Value (000)
--------------------------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 400 million
shares -- $0.001 par value)
based on 31,306,269
outstanding shares of common stock $ 710,213
Accumulated net investment loss (3,740)
Accumulated net realized gain on investments 22,332
Net unrealized appreciation on investments 486,776
----------
TOTAL NET ASSETS-- 100.0% $1,215,581
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $38.83
======
* 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.
[LOGO OMITTED] 11
<PAGE>
THE PBHG FUNDS, INC.
PBHG LARGE CAP GROWTH FUND (UNAUDITED)
PBHG LARGE CAP GROWTH FUND PBHLX
Value Blend Growth
------------------------
X Large
------------------------
Medium MARKET CAPITALIZATION
------------------------
Small
------------------------
AVERAGE ANNUAL TOTAL RETURN1
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
One Annualized Annualized Annualized
6 Year 3 Year 5 Year Inception
Months 2 Return Return Return to Date 3
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PBHG Large Cap
Growth Fund 4.35% 106.15% 41.35% 34.01% 37.35%
----------------------------------------------------------------------------------------
</TABLE>
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]
PLOT POINT FOLLOWS:
PBHG Large Cap Lipper Multi-Cap Growth
Growth Fund S&P 500 Index 4 Funds Average 5
4/30/95 10,000 10,000 10,000
5/31/95 10,070 10,399 10,211
6/30/95 10,920 10,640 10,872
7/31/95 11,740 10,993 11,619
8/31/95 12,310 11,020 11,743
9/30/95 13,160 11,485 12,079
10/31/95 13,510 11,444 11,878
11/30/95 13,720 11,946 12,307
12/31/95 13,383 12,176 12,354
1/31/96 14,146 12,590 12,492
2/29/96 14,827 12,707 12,921
3/31/96 14,992 12,830 13,096
4/30/96 15,880 13,019 13,814
5/31/96 16,509 13,354 14,282
6/30/96 16,158 13,405 13,875
7/31/96 15,023 12,813 12,769
8/31/96 15,601 13,083 13,401
9/30/96 16,870 13,819 14,332
10/31/96 16,365 14,200 14,174
11/30/96 16,994 15,273 14,851
12/31/96 16,514 14,970 14,643
1/31/97 17,247 15,905 15,333
2/28/97 16,504 16,030 14,703
3/31/97 14,727 15,372 13,834
4/30/97 15,626 16,289 14,122
5/31/97 17,330 17,280 15,465
6/30/97 18,197 18,054 16,035
7/31/97 19,860 19,490 17,456
8/31/97 18,941 18,399 17,135
9/30/97 20,139 19,406 18,240
10/31/97 19,282 18,759 17,399
11/30/97 19,365 19,626 17,427
12/31/97 20,206 19,963 17,591
1/31/98 19,893 20,184 17,524
2/28/98 22,450 21,639 18,989
3/31/98 23,681 22,746 19,916
4/30/98 23,817 22,974 20,123
5/31/98 23,160 22,580 19,254
6/30/98 24,861 23,496 20,197
7/31/98 24,621 23,247 19,502
8/31/98 19,945 19,890 16,013
9/30/98 21,458 21,164 17,229
10/31/98 21,573 22,886 18,154
11/30/98 22,993 24,273 19,501
12/31/98 26,353 25,672 21,718
1/31/99 27,213 26,745 22,889
2/28/99 25,671 25,914 21,591
3/31/99 27,447 26,951 23,007
4/30/99 27,157 27,995 23,686
5/31/99 26,029 27,334 23,324
6/30/99 27,950 28,851 25,026
7/31/99 26,933 27,951 24,551
8/31/99 27,135 27,811 24,620
9/30/99 27,593 27,048 24,696
10/31/99 30,363 28,760 26,597
11/30/99 34,284 29,345 29,119
12/31/99 44,025 31,073 34,049
1/31/00 44,792 29,512 33,344
2/29/00 56,129 28,953 39,102
3/31/00 54,509 31,786 38,969
4/30/00 48,628 30,829 35,622
5/31/00 44,409 30,197 33,182
6/30/00 52,833 30,941 36,663
7/31/00 52,876 30,458 35,570
8/31/00 59,709 32,349 39,511
9/30/00 56,882 30,642 37,646
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 unmanaged and 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 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 Average is not intended to imply the Fund's
past or future performance.
SECTOR WEIGHTINGS - AT SEPTEMBER 30, 2000
[PIE CHART OMITTED]
PLOT POINT FOLLOWS:
Consumer Cyclical 10%
Consumer Non-Cyclical 2%
Financial 9%
Health Care 10%
Industrial 11%
Services 2%
Technology 42%
Utilities 3%
Cash 11%
% of Total Portfolio Investments
TOP TEN HOLDINGS - SEPTEMBER 30, 2000
Citigroup 2.5%
Polycom 2.5%
Tyco International 2.4%
Siebel Systems 2.4%
Verisign 2.4%
Nortel Networks 2.3%
Pfizer 2.3%
General Electric 2.2%
Corning 2.2%
Network Appliance 2.2%
------------------------------------------------------
% of Total Portfolio Investments 23.4%
[LOGO OMITTED] 12
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG LARGE CAP GROWTH FUND PBHLX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMMON STOCK -- 89.3%
CONSUMER CYCLICAL -- 10.3%
AUDIO/VIDEO PRODUCTS -- 2.5%
Polycom* 185,300 $ 12,408
------------
12,408
--------------------------------------------------------------------------------
BROADCAST SERVICE/PROGRAMMING -- 0.6%
AT&T-- Liberty Media, Cl A* 176,200 3,172
------------
3,172
--------------------------------------------------------------------------------
MULTIMEDIA -- 2.4%
Entravision Communication* 71,700 1,246
Gemstar-TV Guide International* 122,600 10,689
------------
11,935
--------------------------------------------------------------------------------
RETAIL-BEDDING -- 1.3%
Bed Bath & Beyond* 267,100 6,515
------------
6,515
--------------------------------------------------------------------------------
RETAIL-BUILDING PRODUCTS -- 0.8%
Home Depot 78,650 4,173
------------
4,173
--------------------------------------------------------------------------------
RETAIL-CONSUMER ELECTRONICS -- 0.8%
Best Buy* 63,500 4,040
------------
4,040
--------------------------------------------------------------------------------
RETAIL-DISCOUNT -- 0.4%
Wal-Mart Stores 40,000 1,925
------------
1,925
--------------------------------------------------------------------------------
RETAIL-JEWELRY -- 0.3%
Tiffany & Company 39,400 1,519
------------
1,519
--------------------------------------------------------------------------------
RETAIL-REGIONAL DEPARTMENT STORE -- 0.6%
Kohl's* 51,200 2,954
------------
2,954
--------------------------------------------------------------------------------
TELEVISION -- 0.6%
Univision Communications* 83,000 3,102
------------
3,102
------------
TOTAL CONSUMER CYCLICAL (COST $41,951) 51,743
------------
--------------------------------------------------------------------------------
CONSUMER NON-CYCLICAL -- 1.7%
FOOD-RETAIL -- 1.7%
Safeway* 181,800 8,488
------------
8,488
------------
TOTAL CONSUMER NON-CYCLICAL (COST $9,260) 8,488
------------
--------------------------------------------------------------------------------
FINANCIAL -- 8.7%
COMMERCIAL BANKS-WESTERN US -- 0.9%
Zions 92,400 4,726
------------
4,726
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES -- 2.5%
Citigroup 231,866 $ 12,535
------------
12,535
--------------------------------------------------------------------------------
FINANCE-CONSUMER LOANS -- 1.6%
Household International 146,000 8,267
------------
8,267
--------------------------------------------------------------------------------
FINANCE-INVESTMENT BANKER/BROKER -- 1.0%
Goldman Sachs 45,000 5,127
------------
5,127
--------------------------------------------------------------------------------
INTERNET BROKER -- 1.5%
Schwab, Charles 216,200 7,675
------------
7,675
--------------------------------------------------------------------------------
SUPER-REGIONAL BANKS-US -- 1.2%
Wells Fargo 132,000 6,064
------------
6,064
------------
TOTAL FINANCIAL (COST $41,055) 44,394
------------
--------------------------------------------------------------------------------
HEALTH CARE -- 9.9%
DRUG DELIVERY SYSTEMS -- 1.1%
Alza* 62,600 5,415
------------
5,415
--------------------------------------------------------------------------------
MEDICAL PRODUCTS -- 0.9%
Serono Sa ADR* 155,900 4,716
------------
4,716
--------------------------------------------------------------------------------
MEDICAL-BIOMEDICAL/GENETIC -- 1.1%
Genentech* 31,100 5,775
------------
5,775
--------------------------------------------------------------------------------
MEDICAL-DRUGS -- 5.8%
Biovail* 48,900 3,982
Forest Labs* 58,800 6,744
Medimmune* 56,200 4,341
Pfizer 253,600 11,396
Shire Pharmaceuticals ADR* 49,397 2,550
------------
29,013
--------------------------------------------------------------------------------
THERAPEUTICS -- 1.0%
Gilead Sciences* 44,600 4,892
------------
4,892
------------
TOTAL HEALTH CARE (COST $37,025) 49,811
------------
--------------------------------------------------------------------------------
INDUSTRIAL -- 11.0%
CIRCUIT BOARDS -- 0.4%
Jabil Circuit* 46,300 2,627
------------
2,627
--------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING OPERATIONS -- 4.7%
General Electric 196,300 11,324
Tyco International 234,000 12,139
------------
23,463
--------------------------------------------------------------------------------
[LOGO OMITTED] 13
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
--------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG LARGE CAP GROWTH FUND PBHLX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-MISCELLANEOUS -- 2.2%
Celestica* 55,100 $ 3,816
Flextronics International* 85,971 7,060
----------
10,876
--------------------------------------------------------------------------------
ELECTRONIC MEASURING INSTRUMENTS -- 1.3%
Tektronix 82,500 6,337
----------
6,337
--------------------------------------------------------------------------------
INSTRUMENTS-SCIENTIFIC -- 1.9%
Pe Corp-Pe Biosystems Group 83,200 9,693
----------
9,693
--------------------------------------------------------------------------------
POWER CONVERSION/SUPPLY EQUIPMENT -- 0.5%
Capstone Turbine* 38,700 2,680
----------
2,680
----------
TOTAL INDUSTRIAL (COST $41,857) 55,676
----------
--------------------------------------------------------------------------------
SERVICES -- 2.0%
COMPUTER SERVICES -- 1.3%
DST Systems* 54,900 6,451
----------
6,451
--------------------------------------------------------------------------------
TELEPHONE-INTEGRATED -- 0.7%
Telefonos De Mexico ADR 67,000 3,564
----------
3,564
----------
TOTAL SERVICES (COST $8,098) 10,015
----------
--------------------------------------------------------------------------------
TECHNOLOGY -- 42.0%
APPLICATIONS SOFTWARE -- 2.9%
Rational Software* 36,400 2,525
Siebel Systems* 108,000 12,022
----------
14,547
--------------------------------------------------------------------------------
COMPUTERS -- 2.2%
Sun Microsystems 93,900 10,963
----------
10,963
--------------------------------------------------------------------------------
COMPUTERS-INTEGRATED SYSTEMS -- 0.8%
Brocade Communications Systems* 17,600 4,154
----------
4,154
--------------------------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 3.5%
EMC* 95,000 9,417
Veritas Software* 58,300 8,278
----------
17,695
--------------------------------------------------------------------------------
DATA PROCESSING/MANAGEMENT -- 2.6%
Automatic Data Processing 131,400 8,787
Fiserv* 75,100 4,497
----------
13,284
--------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTOR - 2.2%
Broadcom* 22,400 5,460
PMC-Sierra* 26,900 5,790
----------
11,250
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
ENTERPRISE SOFTWARE/SERVICES -- 2.5%
BEA Systems* 12,500 $ 973
I2 Technologies* 26,800 5,013
Oracle* 82,400 6,489
----------
12,475
--------------------------------------------------------------------------------
INTERNET CONTENT -- 1.0%
Infospace* 166,000 5,022
----------
5,022
--------------------------------------------------------------------------------
INTERNET SOFTWARE -- 4.6%
Alteon Websystems* 31,800 3,446
Ariba* 54,100 7,751
Verisign* 58,800 11,911
----------
23,108
--------------------------------------------------------------------------------
NETWORKING PRODUCTS -- 5.8%
Cisco Systems* 143,400 7,923
Juniper Networks* 46,200 10,114
Network Appliance* 86,200 10,980
----------
29,017
--------------------------------------------------------------------------------
SEMICONDUCTOR COMPONENTS-INTEGRATED CIRCUITS -- 2.5%
Globespan* 60,500 7,381
Integrated Circuit Systems* 126,600 2,342
Linear Technology 44,600 2,888
----------
12,611
--------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT -- 2.3%
Applied Materials* 106,900 6,341
KLA-Tencor* 125,600 5,173
----------
11,514
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT -- 2.3%
Nortel Networks^ 196,900 11,728
----------
11,728
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT-FIBER OPTICS -- 6.3%
Corning 37,100 11,018
JDS Uniphase* 62,580 5,926
SDL* 24,800 7,671
Sycamore Networks* 65,700 7,096
----------
31,711
--------------------------------------------------------------------------------
WIRELESS EQUIPMENT -- 0.5%
Nextel Partners, Cl A* 82,300 2,397
----------
2,397
----------
TOTAL TECHNOLOGY (COST $154,135) 211,476
----------
--------------------------------------------------------------------------------
UTILITIES -- 3.7%
ELECTRIC-GENERATION -- 1.1%
AES* 82,500 5,651
----------
5,651
--------------------------------------------------------------------------------
[LOGO OMITTED] 14
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG LARGE CAP GROWTH FUND PBHLX
Shares/Face Market
Description Amount (000) Value (000)
--------------------------------------------------------------------------------
INDEPENDENT POWER PRODUCER -- 2.6%
Calpine* 86,000 $ 8,976
Southern Energy* 124,800 3,916
----------
12,892
----------
TOTAL UTILITIES (COST $8,713) 18,543
----------
TOTAL COMMON STOCK (COST $342,094) 450,146
----------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 11.1%
J.P. Morgan
6.57%, dated 09/29/00, matures 10/02/00,
repurchase price $23,472,451 (collateralized
by U.S. Government Agency Instruments:
total market value $23,928,799) (A) $23,460 23,460
Prudential
6.57%, dated 09/29/00, matures 10/02/00,
repurchase price $32,532,310 (collateralized
by U.S. Government Agency Instruments:
total market value $33,165,602) (A) 32,515 32,515
----------
TOTAL REPURCHASE AGREEMENTS (COST $55,975) 55,975
----------
TOTAL INVESTMENTS-- 100.4% (COST $398,069) 506,121
----------
--------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (0.4)%
TOTAL OTHER ASSETS AND LIABILITIES, NET (2,258)
----------
--------------------------------------------------------------------------------
Market
Description Value (000)
--------------------------------------------------------------------------------
Net Assets:
Fund Shares of PBHG Class (authorized 200 million
shares -- $0.001 par value) based on 12,585,406
outstanding shares of common stock $ 371,498
Accumulated net investment loss (311)
Accumulated net realized gain on investments 24,624
Net unrealized appreciation on investments 108,052
----------
TOTAL NET ASSETS-- 100.0% $ 503,863
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $40.04
==========
* Non-Income Producing Security
(A) -- Tri-Party Repurchase Agreement
ADR -- American Depository Receipt
Cl -- Class
^The fund held Canadian securities as of September 30, 2000. The total market
value of investments is $11,727,856 and represented 2.3% of the fund.
The accompanying notes are an integral part of the financial statements.
[LOGO OMITTED] 15
<PAGE>
THE PBHG FUNDS, INC.
PBHG SELECT EQUITY FUND (UNAUDITED)
PBHG SELECT EQUITY FUND PBHEX
INVESTMENT FOCUS
STYLE
Value Blend Growth
------------------------
Large
------------------------
X Medium MARKET CAPITALIZATION
------------------------
Small
------------------------
AVERAGE ANNUAL TOTAL RETURN 1
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
One Annualized Annualized Annualized
6 Year 3 Year 5 Year Inception
Months 2 Return Return Return to Date 3
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PBHG Select Equity
Fund (2.40)% 206.07% 57.59% 43.14% 49.11%
------------------------------------------------------------------------------------
</TABLE>
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]
PLOT POINT FOLLOWS:
PBHG Select S&P 500 Lipper Multi-Cap Growth
Equity Fund Index 4 Funds Average 5
4/30/95 10,000 10,000 10,000
5/31/95 10,402 10,399 10,211
6/30/95 11,685 10,640 10,872
7/31/95 13,399 10,993 11,619
8/31/95 13,947 11,020 11,743
9/30/95 14,545 11,485 12,079
10/31/95 14,985 11,444 11,878
11/30/95 15,367 11,946 12,307
12/31/95 15,510 12,176 12,354
1/31/96 15,851 12,590 12,492
2/29/96 17,025 12,707 12,921
3/31/96 17,326 12,830 13,096
4/30/96 18,811 13,019 13,814
5/31/96 20,376 13,354 14,282
6/30/96 19,603 13,405 13,875
7/31/96 17,687 12,813 12,769
8/31/96 18,861 13,083 13,401
9/30/96 21,118 13,819 14,332
10/31/96 19,904 14,200 14,174
11/30/96 20,366 15,273 14,851
12/31/96 19,852 14,970 14,643
1/31/97 20,338 15,905 15,333
2/28/97 17,947 16,030 14,703
3/31/97 16,123 15,372 13,834
4/30/97 16,579 16,289 14,122
5/31/97 18,808 17,280 15,465
6/30/97 19,568 18,054 16,035
7/31/97 21,402 19,490 17,456
8/31/97 20,338 18,399 17,135
9/30/97 22,335 19,406 18,240
10/31/97 20,794 18,759 17,399
11/30/97 20,176 19,626 17,427
12/31/97 21,210 19,963 17,591
1/31/98 20,784 20,184 17,524
2/28/98 22,902 21,639 18,989
3/31/98 24,473 22,746 19,916
4/30/98 24,422 22,974 20,123
5/31/98 22,993 22,580 19,254
6/30/98 25,922 23,496 20,197
7/31/98 23,824 23,247 19,502
8/31/98 19,193 19,890 16,013
9/30/98 21,048 21,164 17,229
10/31/98 19,781 22,886 18,154
11/30/98 21,261 24,273 19,501
12/31/98 25,243 25,672 21,718
1/31/99 25,577 26,745 22,889
2/28/99 23,257 25,914 21,591
3/31/99 26,277 26,951 23,007
4/30/99 25,365 27,995 23,686
5/31/99 24,280 27,334 23,324
6/30/99 26,388 28,851 25,026
7/31/99 25,821 27,951 24,551
8/31/99 27,736 27,811 24,620
9/30/99 28,557 27,048 24,696
10/31/99 34,303 28,760 26,597
11/30/99 43,575 29,345 29,119
12/31/99 65,858 31,073 34,049
1/31/00 69,092 29,512 33,344
2/29/00 99,040 28,953 39,102
3/31/00 89,556 31,786 38,969
4/30/00 69,748 30,829 35,622
5/31/00 61,737 30,197 33,182
6/30/00 84,515 30,941 36,663
7/31/00 81,856 30,458 35,570
8/31/00 95,518 32,349 39,511
9/30/00 87,404 30,642 37,646
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 unmanaged and 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 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 Average is not intended to imply the Fund's
past or future performance.
SECTOR WEIGHTINGS - AT SEPTEMBER 30, 2000
[PIE CHART OMITTED]
PLOT POINT FOLLOWS:
Consumer Cyclical 6%
Health Care 2%
Industrial 3%
Technology 78%
Cash 11%
% of Total Portfolio Investments
TOP TEN HOLDINGS - SEPTEMBER 30, 2000
Juniper Networks 6.4%
Siebel Systems 5.8%
Brocade Communications Systems 4.4%
Gemstar-TV Guide International 4.2%
Art Technology 4.0%
JDS Uniphase 3.9%
Network Appliance 3.9%
Broadcom 3.7%
SDL 3.7%
Verisign 3.6%
------------------------------------------------------
% of Total Portfolio Investments 43.6%
[LOGO OMITTED] 16
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG SELECT EQUITY FUND PBHEX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMMON STOCK -- 91.0%
CONSUMER CYCLICAL -- 6.3%
MULTIMEDIA -- 4.4%
Gemstar-TV Guide International* 1,022,300 $ 89,132
------------
89,132
--------------------------------------------------------------------------------
TELEVISION -- 1.9%
Univision Communications* 1,059,200 39,587
------------
39,587
------------
TOTAL CONSUMER CYCLICAL (COST $120,877) 128,719
------------
--------------------------------------------------------------------------------
HEALTH CARE -- 2.1%
MEDICAL-BIOMEDICAL/GENETIC -- 2.1%
Immunex* 995,000 43,283
------------
43,283
------------
TOTAL HEALTH CARE (COST $48,534) 43,283
------------
--------------------------------------------------------------------------------
INDUSTRIAL -- 2.5%
CIRCUIT BOARDS -- 2.5%
Jabil Circuit* 922,000 52,324
------------
52,324
------------
TOTAL INDUSTRIAL (COST $42,790) 52,324
------------
--------------------------------------------------------------------------------
TECHNOLOGY -- 80.1%
APPLICATIONS SOFTWARE -- 8.2%
Quest Software* 753,700 46,812
Siebel Systems* 1,098,400 122,265
------------
169,077
--------------------------------------------------------------------------------
COMPUTERS -- 1.0%
Sun Microsystems* 175,900 20,536
------------
20,536
--------------------------------------------------------------------------------
COMPUTERS-INTEGRATED SYSTEMS -- 6.0%
Brocade Communications Systems* 391,700 92,441
Redback Networks* 189,400 31,062
------------
123,503
--------------------------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 2.9%
Veritas Software* 421,925 59,913
------------
59,913
--------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 6.8%
Broadcom* 321,700 78,415
PMC-Sierra* 285,400 61,432
------------
139,847
--------------------------------------------------------------------------------
ENTERPRISE SOFTWARE/SERVICES -- 6.4%
I2 Technologies* 392,500 73,422
Oracle* 738,000 58,118
------------
131,540
--------------------------------------------------------------------------------
INTERNET CONTENT -- 1.8%
Infospace* 1,215,400 36,766
------------
36,766
--------------------------------------------------------------------------------
Shares/Face Market
Description Amount (000) Value (000)
--------------------------------------------------------------------------------
INTERNET SOFTWARE -- 16.1%
Alteon Websystems* 445,400 $ 48,277
Ariba* 514,400 73,696
Art Technology* 883,300 83,692
E.Piphany* 358,100 27,596
Verisign* 375,775 76,118
Vignette* 664,100 19,840
------------
329,219
--------------------------------------------------------------------------------
NETWORKING PRODUCTS -- 13.1%
Foundry Networks* 785,600 52,586
Juniper Networks* 619,100 135,544
Network Appliance* 644,400 82,081
------------
270,211
--------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT -- 2.1%
KLA-Tencor* 1,049,700 43,235
------------
43,235
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT -- 4.8%
Audiocodes Limited* 325,200 27,683
Nortel Networks^ 1,197,500 71,326
------------
99,009
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT-FIBER OPTICS -- 10.9%
JDS Uniphase* 871,800 82,548
SDL* 252,800 78,194
Sycamore Networks* 579,200 62,554
------------
223,296
------------
TOTAL TECHNOLOGY (COST $1,183,439) 1,646,152
------------
TOTAL COMMON STOCK (COST $1,395,640) 1,870,478
------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 11.3%
Morgan Stanley
6.57%, dated 09/29/00, matures 10/02/00,
repurchase price $85,337,712
(collateralized by U.S. Government
Agency Instruments: total market value
$88,656,785) (A) $85,291 85,291
J.P. Morgan
6.57%, dated 09/29/00, matures 10/02/00,
repurchase price $60,751,617
(collateralized by U.S. Government
Agency Instruments: total market value
$61,933,549) (A) 60,718 60,718
Prudential
6.57%, dated 09/29/00, matures 10/02/00,
repurchase price $86,619,809
(collateralized by U.S. Government
Agency Instruments: total market value
$88,304,474) (A) 86,572 86,572
------------
TOTAL REPURCHASE AGREEMENTS (COST $232,581) 232,581
------------
TOTAL INVESTMENTS-- 102.3% (COST $1,628,221) 2,103,059
------------
--------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (2.3)%
TOTAL OTHER ASSETS AND LIABILITIES, NET (47,196)
------------
--------------------------------------------------------------------------------
[LOGO OMITTED] 17
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
--------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG SELECT EQUITY FUND PBHEX
Market
Description Value (000)
--------------------------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 200 million
shares -- $0.001 par value) based on 27,072,836
outstanding shares of common stock $1,748,844
Accumulated net investment loss (4,940)
Accumulated net realized loss on investments (162,879)
Net unrealized appreciation on investments 474,838
------------
TOTAL NET ASSETS-- 100.0% $2,055,863
============
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $75.94
======
* Non-Income Producing Security
(A) -- Tri-Party Repurchase Agreement
^ The fund held Canadian securities as of September 30, 2000. The total market
value of investments is $71,326,094 and represented 3.5% of the fund.
The accompanying notes are an integral part of the financial statements.
[LOGO OMITTED] 18
<PAGE>
THE PBHG FUNDS, INC.
PBHG CORE GROWTH FUND (UNAUDITED)
PBHG CORE GROWTH FUND PBCRX
INVESTMENT FOCUS
STYLE
Value Blend Growth
------------------------
Large
------------------------
X Medium MARKET CAPITALIZATION
------------------------
Small
------------------------
AVERAGE ANNUAL TOTAL RETURN 1
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
One Annualized Annualized
6 Year 3 Year Inception
Months 2 Return Return to Date 3
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PBHG Core Growth Fund 4.83% 92.77% 34.99% 27.53%
------------------------------------------------------------------------------------
</TABLE>
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 CHART OMITTED]
PLOT POINT FOLLOWS:
PBHG Core Russell Mid Cap Lipper Multi-Cap
Growth Fund Growth Index 4 Growth Funds Average 5
12/31/95 10,000 10,000 10,000
1/31/96 10,590 10,177 10,112
2/29/96 11,450 10,562 10,459
3/31/96 11,820 10,645 10,601
4/30/96 13,310 11,159 11,182
5/31/96 14,230 11,387 11,561
6/30/96 13,800 11,043 11,232
7/31/96 12,040 10,186 10,336
8/31/96 13,000 10,736 10,848
9/30/96 14,200 11,418 11,601
10/31/96 13,410 11,284 11,473
11/30/96 13,740 11,949 12,022
12/31/96 13,280 11,748 11,853
1/31/97 13,300 12,268 12,412
2/28/97 11,690 11,997 11,902
3/31/97 10,340 11,319 11,198
4/30/97 10,200 11,597 11,431
5/31/97 11,680 12,636 12,518
6/30/97 12,230 12,986 12,980
7/31/97 12,990 14,228 14,130
8/31/97 12,480 14,090 13,870
9/30/97 12,890 14,803 14,765
10/31/97 12,280 14,061 14,084
11/30/97 11,910 14,209 14,107
12/31/97 11,990 14,395 14,239
1/31/98 11,470 14,136 14,185
2/28/98 12,830 15,465 15,371
3/31/98 13,530 16,113 16,121
4/30/98 13,620 16,332 16,289
5/31/98 12,540 15,660 15,585
6/30/98 13,560 16,103 16,349
7/31/98 12,540 15,413 15,787
8/31/98 9,680 12,471 12,962
9/30/98 10,790 13,415 13,946
10/31/98 10,520 14,402 14,695
11/30/98 11,260 15,374 15,785
12/31/98 12,880 16,966 17,580
1/31/99 13,420 17,475 18,528
2/28/99 12,670 16,620 17,477
3/31/99 14,060 17,546 18,624
4/30/99 14,160 18,346 19,173
5/31/99 13,890 18,110 18,880
6/30/99 15,530 19,374 20,258
7/31/99 15,560 18,757 19,873
8/31/99 16,300 18,562 19,929
9/30/99 16,450 18,404 19,991
10/31/99 17,990 19,827 21,530
11/30/99 20,130 21,881 23,571
12/31/99 25,450 25,669 27,561
1/31/00 25,140 25,664 26,991
2/29/00 34,490 31,060 31,652
3/31/00 30,250 31,092 31,545
4/30/00 25,710 28,074 28,835
5/31/00 23,230 26,027 26,860
6/30/00 29,900 28,789 29,677
7/31/00 27,850 26,966 28,793
8/31/00 33,470 31,033 31,983
9/30/00 31,710 29,516 30,474
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 Average is not intended to imply the Fund's
past or future performance.
SECTOR WEIGHTINGS - AT SEPTEMBER 30, 2000
[PIE CHART OMITTED]
PLOT POINT FOLLOWS:
Consumer Cyclical 3%
Energy 8%
Financial 2%
Health Care 11%
Industrial 4%
Services 3%
Technology 61%
Cash 8%
% of Total Portfolio Investments
TOP TEN HOLDINGS - SEPTEMBER 30, 2000
Verisign 3.1%
Teva Pharmaceutical ADR 3.0%
Redback Networks 2.8%
Extreme Networks 2.8%
Globespan 2.7%
MMC Networks 2.5%
Newport 2.5%
Brocade Communications Systems 2.5%
BEA Systems 2.5%
Ariba 2.3%
------------------------------------------------------
% of Total Portfolio Investments 26.7%
[LOGO OMITTED] 19
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG CORE GROWTH FUND PBCRX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMMON STOCK -- 93.6%
CONSUMER CYCLICAL -- 3.2%
AUDIO/VIDEO PRODUCTS -- 1.3%
Polycom* 36,800 $ 2,464
-------------
2,464
--------------------------------------------------------------------------------
RETAIL-JEWELRY -- 1.9%
Tiffany & Company 42,100 1,624
Zale* 62,200 2,018
-------------
3,642
-------------
TOTAL CONSUMER CYCLICAL (COST $5,721) 6,106
-------------
--------------------------------------------------------------------------------
ENERGY -- 7.9%
OIL COMPANIES-EXPLORATION & PRODUCTION -- 1.1%
EOG Resources 55,800 2,169
-------------
2,169
--------------------------------------------------------------------------------
OIL FIELD MACHINERY & EQUIPMENT -- 1.2%
Cooper Cameron* 30,700 2,262
-------------
2,262
--------------------------------------------------------------------------------
OIL & GAS DRILLING -- 4.6%
Diamond Offshore Drilling 42,900 1,760
Ensco International 92,900 3,553
Global Marine* 36,400 1,124
Santa Fe International 52,000 2,343
-------------
8,780
--------------------------------------------------------------------------------
OIL-FIELD SERVICES -- 1.0%
BJ Services* 29,600 1,809
-------------
1,809
-------------
TOTAL ENERGY (COST $11,875) 15,020
-------------
--------------------------------------------------------------------------------
FINANCIAL -- 1.5%
INVESTMENT MANAGEMENT/ADVISOR SERVICES -- 1.5%
T. Rowe Price & Associates 61,700 2,896
-------------
2,896
-------------
TOTAL FINANCIAL (COST $2,913) 2,896
-------------
--------------------------------------------------------------------------------
HEALTH CARE -- 11.6%
DRUG DELIVERY SYSTEMS -- 1.8%
ANDRX* 36,400 3,399
-------------
3,399
--------------------------------------------------------------------------------
MEDICAL INSTRUMENTS -- 1.0%
Biomet 27,300 956
Techne* 8,300 930
-------------
1,886
--------------------------------------------------------------------------------
MEDICAL-BIOMEDICAL/GENETICS -- 1.0%
Incyte Pharmaceuticals* 20,500 843
Inhale Therapeutic Systems* 19,700 1,110
-------------
1,953
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
MEDICAL-DRUGS -- 7.8%
Celgene* 67,100 $ 3,993
Medicis Pharmaceuticals, Cl A* 42,900 2,638
Medimmune* 31,900 2,464
Teva Pharmaceutical ADR 80,000 5,855
-------------
14,950
-------------
TOTAL HEALTH CARE (COST $13,902) 22,188
-------------
--------------------------------------------------------------------------------
INDUSTRIAL -- 4.4%
CAPACITORS -- 0.8%
Kemet* 54,200 1,498
-------------
1,498
--------------------------------------------------------------------------------
ELECTRIC PRODUCTS-MISCELLANEOUS -- 1.0%
APW Limited 40,000 1,950
-------------
1,950
--------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-MISCELLANEOUS -- 0.7%
Celestica* 19,700 1,364
-------------
1,364
--------------------------------------------------------------------------------
INSTRUMENTS-CONTROLS -- 1.9%
Mettler-Toledo International* 84,300 3,709
-------------
3,709
-------------
TOTAL INDUSTRIAL (COST $7,115) 8,521
-------------
--------------------------------------------------------------------------------
SERVICES -- 2.6%
ADVERTISING SALES -- 0.3%
Lamar Advertising* 16,300 617
-------------
617
--------------------------------------------------------------------------------
ADVERTISING SERVICES -- 1.0%
Getty Images* 64,900 1,976
-------------
1,976
--------------------------------------------------------------------------------
HUMAN RESOURCES -- 1.3%
Robert Half International* 68,300 2,369
-------------
2,369
-------------
TOTAL SERVICES (COST $5,718) 4,962
-------------
--------------------------------------------------------------------------------
TECHNOLOGY -- 62.4%
APPLICATIONS SOFTWARE -- 0.8%
Quest Software* 23,900 1,484
-------------
1,484
--------------------------------------------------------------------------------
COMPUTER DATA SECURITY -- 1.6%
Checkpoint Software* 19,000 2,993
-------------
2,993
--------------------------------------------------------------------------------
COMPUTERS-INTEGRATED SYSTEMS -- 5.4%
Brocade Communications Systems* 20,600 4,861
Redback Networks* 33,400 5,478
-------------
10,339
--------------------------------------------------------------------------------
[LOGO OMITTED] 20
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG CORE GROWTH FUND PBCRX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 0.8%
Sandisk* 21,600 $ 1,442
-------------
1,442
--------------------------------------------------------------------------------
EDUCATIONAL SOFTWARE -- 0.7%
Smartforce ADR* 25,800 1,222
-------------
1,222
--------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 4.5%
Applied Micro Circuits* 19,000 3,934
Microchip Technology* 33,000 1,091
Virata* 53,900 3,564
-------------
8,589
--------------------------------------------------------------------------------
ENTERPRISE SOFTWARE/SERVICE -- 2.5%
BEA Systems* 61,800 4,813
-------------
4,813
--------------------------------------------------------------------------------
INTERNET CONTENT -- 1.4%
Infospace* 75,500 2,284
Rare Medium Group* 53,600 399
-------------
2,683
--------------------------------------------------------------------------------
INTERNET SOFTWARE -- 12.4%
Ariba* 31,100 4,455
Art Technology* 37,900 3,591
At Road* 89,600 644
Commerce One* 31,500 2,473
Niku* 81,600 1,989
Support.com* 5,500 168
Verisign* 29,625 6,001
Vitria Technology* 94,000 4,383
-------------
23,704
--------------------------------------------------------------------------------
NETWORK SOFTWARE -- 1.5%
Micromuse* 14,600 2,934
-------------
2,934
--------------------------------------------------------------------------------
NETWORKING PRODUCTS -- 8.4%
Extreme Networks* 47,500 5,440
Inrange Technologies* 3,000 159
Juniper Networks* 19,400 4,247
MMC Networks* 39,100 4,946
Turnstone Systems* 25,800 1,196
-------------
15,988
--------------------------------------------------------------------------------
SEMICONDUCTOR COMPONENTS-INTEGRATED CIRCUITS -- 4.9%
Analog Devices* 20,100 1,660
Globespan* 42,900 5,234
Triquint Semiconductor* 68,700 2,503
-------------
9,397
--------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT -- 1.1%
ATMI* 33,000 771
Credence Systems* 45,500 1,365
-------------
2,136
--------------------------------------------------------------------------------
Shares/Face Market
Description Amount (000) Value (000)
--------------------------------------------------------------------------------
SOFTWARE TOOLS -- 1.4%
Mercury Interactive* 17,100 $ 2,680
-------------
2,680
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT -- 3.8%
Advanced Fibre* 38,900 1,473
Audiocodes Limited* 18,100 1,541
Ditech Communications* 24,700 1,013
Natural Microsystems* 19,700 1,060
Sonus Networks* 10,800 1,365
Tekelec* 23,900 785
-------------
7,237
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT-FIBER OPTICS -- 10.2%
Avanex* 13,700 1,475
C-Cor.net 26,200 401
Finisar* 38,300 1,853
MRV Communications* 72,500 3,285
New Focus* 15,200 1,202
Newport 30,700 4,889
SDL* 13,300 4,114
Sycamore Networks* 21,200 2,290
-------------
19,509
--------------------------------------------------------------------------------
WIRELESS EQUIPMENT -- 1.0%
Ceragon Networks Limited* 2,600 70
Netro* 29,200 1,730
Triton Network Systems* 6,500 85
-------------
1,885
-------------
TOTAL TECHNOLOGY (COST $84,233) 119,035
-------------
TOTAL COMMON STOCK (COST $131,477) 178,728
-------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 8.5%
Morgan Stanley
6.60%, dated 09/29/00, matures 10/02/00,
repurchase price $16,332,011 (collateralized
by U.S. Government Agency Instruments:
total market value $16,649,494) (A) $16,323 16,323
-------------
TOTAL REPURCHASE AGREEMENT (COST $16,323) 16,323
-------------
TOTAL INVESTMENTS-- 102.1% (COST $147,800) 195,051
-------------
--------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (2.1)%
TOTAL OTHER ASSETS AND LIABILITIES, NET (4,071)
-------------
--------------------------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 200 million
shares -- $0.001 par value)
based on 6,022,243 outstanding shares of common
stock 133,392
Accumulated net investment loss (663)
Accumulated net realized gain on investments 11,000
Net unrealized appreciation on investments 47,251
-------------
TOTAL NET ASSETS-- 100.0% $ 190,980
=============
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $31.71
======
* 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.
[LOGO OMITTED] 21
<PAGE>
THE PBHG FUNDS, INC.
PBHG LIMITED FUND (UNAUDITED)
PBHG LIMITED FUND PBLDX
INVESTMENT FOCUS
STYLE
Value Blend Growth
------------------------
Large
------------------------
Medium MARKET CAPITALIZATION
------------------------
X Small
------------------------
AVERAGE ANNUAL TOTAL RETURN 1
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
One Annualized Annualized
6 Year 3 Year Inception
Months 2 Return Return to Date 3
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PBHG Limited Fund 0.82% 86.60% 31.67% 30.51%
------------------------------------------------------------------------------------
</TABLE>
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 OMITTED]
PLOT POINT FOLLOWS:
Russell 2000 Lipper Small-Cap Growth
PBHG Limited Fund Growth Index 4 Funds Average 5
6/30/96 10,000 10,000 10,000
7/31/96 9,950 8,779 8,959
8/31/96 10,320 9,429 9,584
9/30/96 11,010 9,914 10,173
10/31/96 10,570 9,487 9,828
11/30/96 10,560 9,751 10,011
12/31/96 11,082 9,941 10,130
1/31/97 11,273 10,189 10,377
2/28/97 10,048 9,574 9,719
3/31/97 9,085 8,898 9,050
4/30/97 8,984 8,795 8,911
5/31/97 10,741 10,117 10,179
6/30/97 11,454 10,460 10,775
7/31/97 12,016 10,996 11,487
8/31/97 12,257 11,326 11,728
9/30/97 13,622 12,230 12,680
10/31/97 13,070 11,495 12,051
11/30/97 12,809 11,221 11,807
12/31/97 12,864 11,228 11,843
1/31/98 12,708 11,078 11,681
2/28/98 13,756 12,056 12,685
3/31/98 14,606 12,562 13,324
4/30/98 14,720 12,639 13,461
5/31/98 13,621 11,721 12,555
6/30/98 14,057 11,841 12,828
7/31/98 13,154 10,852 11,935
8/31/98 10,509 8,347 9,356
9/30/98 11,691 9,193 10,084
10/31/98 11,681 9,673 10,559
11/30/98 12,770 10,423 11,464
12/31/98 14,542 11,366 12,673
1/31/99 15,053 11,878 12,944
2/28/99 13,422 10,791 11,773
3/31/99 12,998 11,176 12,273
4/30/99 12,965 12,163 12,797
5/31/99 13,966 12,182 12,943
6/30/99 15,989 12,823 14,092
7/31/99 15,380 12,427 14,084
8/31/99 15,358 11,962 13,898
9/30/99 16,663 12,193 14,287
10/31/99 18,077 12,505 15,056
11/30/99 20,524 13,828 17,026
12/31/99 24,968 16,265 20,209
1/31/00 24,821 16,113 19,984
2/29/00 32,988 19,862 25,066
3/31/00 30,840 17,774 23,660
4/30/00 26,583 15,980 21,005
5/31/00 23,407 14,581 19,247
6/30/00 29,946 16,464 22,537
7/31/00 27,677 15,053 21,076
8/31/00 30,787 16,636 23,559
9/30/00 31,093 15,810 22,626
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 Average is not intended to imply the Fund's
past or future performance.
SECTOR WEIGHTINGS - AT SEPTEMBER 30, 2000
[PIE CHART OMITTED]
PLOT POINT FOLLOWS:
Basic Materials 3%
Consumer Cyclical 12%
Health Care 8%
Industrial 4%
Services 14%
Technology 49%
Cash 10%
% of Total Portfolio Investments
TOP TEN HOLDINGS - SEPTEMBER 30, 2000
Actuate 4.1%
Micromuse 3.8%
Polycom 3.8%
Pericom Semiconductors 3.7%
InFocus 3.6%
Anaren Microwave 3.2%
Advent Software 3.1%
Informatica 3.0%
Forrester Research 3.0%
Transwitch 2.9%
------------------------------------------------------
% of Total Portfolio Investments 34.2%
[LOGO OMITTED] 22
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG LIMITED FUND PBLDX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMMON STOCK -- 88.7%
BASIC MATERIALS -- 2.5%
Advanced Materials/Products -- 2.5%
Surmodics* 67,300 $ 3,685
-------------
3,685
-------------
TOTAL BASIC MATERIALS (COST $1,081) 3,685
-------------
--------------------------------------------------------------------------------
CONSUMER CYCLICAL -- 11.7%
AUDIO/VIDEO PRODUCTS -- 3.7%
Polycom* 79,800 5,344
-------------
5,344
--------------------------------------------------------------------------------
FOOTWEAR & RELATED APPAREL -- 0.4%
Skechers Foot Wear* 38,600 584
-------------
584
--------------------------------------------------------------------------------
RETAIL-APPAREL/SHOE -- 1.0%
Charlotte Russe Holdings* 103,800 1,375
-------------
1,375
--------------------------------------------------------------------------------
RETAIL-CONSUMER ELECTRONICS -- 2.2%
Tweeter Home Entertainment Group* 24,700 897
Ultimate Electronics* 55,400 2,278
-------------
3,175
--------------------------------------------------------------------------------
RETAIL-RESTAURANTS -- 4.4%
Buca* 166,700 1,771
California Pizza Kitchen* 44,800 1,254
Rare Hospitality International* 166,950 3,402
-------------
6,427
-------------
TOTAL CONSUMER CYCLICAL (COST $9,475) 16,905
-------------
--------------------------------------------------------------------------------
HEALTH CARE -- 7.8%
MEDICAL-DRUGS -- 5.0%
Cima Labs* 73,000 3,800
Medicis Pharmaceutical, Cl A* 56,925 3,501
-------------
7,301
--------------------------------------------------------------------------------
MEDICAL INFORMATION SYSTEMS -- 0.3%
Allscripts* 31,000 438
-------------
438
--------------------------------------------------------------------------------
PHARMACY SERVICES -- 1.5%
Accredo Health* 45,050 2,202
-------------
2,202
--------------------------------------------------------------------------------
RESPIRATORY PRODUCTS -- 1.0%
Resmed* 44,500 1,391
-------------
1,391
-------------
TOTAL HEALTH CARE (COST $4,901) 11,332
-------------
--------------------------------------------------------------------------------
INDUSTRIAL -- 4.0%
ELECTRONIC CONNECTORS -- 2.3%
Merix* 50,900 3,299
-------------
3,299
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
ELECTRONIC MEASURING INSTRUMENTS -- 1.4%
Molecular Devices* 21,200 $ 2,083
-------------
2,083
--------------------------------------------------------------------------------
INSTRUMENTS-CONTROLS -- 0.3%
Photon Dynamics* 12,300 464
-------------
464
-------------
TOTAL INDUSTRIAL (COST $3,922) 5,846
-------------
--------------------------------------------------------------------------------
SERVICES -- 14.0%
COMPUTER SERVICES -- 5.4%
Factset Research Systems 76,200 2,865
Manhattan Associates* 29,100 1,782
Netegrity* 45,150 3,161
-------------
7,808
--------------------------------------------------------------------------------
CONSULTING SERVICES -- 5.7%
Diamond Technology Partners* 53,250 3,954
Forrester Research* 66,700 4,252
-------------
8,206
--------------------------------------------------------------------------------
HUMAN RESOURCES -- 2.3%
Hall Kinion & Associates* 116,600 3,316
-------------
3,316
--------------------------------------------------------------------------------
RESEARCH & DEVELOPMENT -- 0.6%
Albany Molecular Research* 15,000 843
-------------
843
-------------
TOTAL SERVICES (COST $7,801) 20,173
-------------
--------------------------------------------------------------------------------
TECHNOLOGY -- 48.7%
APPLICATIONS SOFTWARE -- 4.9%
Actuate* 167,000 5,769
Exchange Applications* 11,500 52
Genomica* 4,900 95
Great Plains Software* 13,900 391
Silverstream Software* 27,200 819
-------------
7,126
--------------------------------------------------------------------------------
COMMUNICATIONS SOFTWARE -- 1.0%
Witness Systems* 84,000 1,517
-------------
1,517
--------------------------------------------------------------------------------
COMPUTERS-INTEGRATED SYSTEMS -- 0.5%
NetScout Systems* 31,100 739
-------------
739
--------------------------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 0.6%
M-Systems Flash Disk Pioneers* 16,000 611
Simple Technology* 29,500 286
-------------
897
--------------------------------------------------------------------------------
COMPUTERS-PERIPHERAL EQUIPMENT -- 3.6%
InFocus* 97,500 5,168
-------------
5,168
--------------------------------------------------------------------------------
[LOGO OMITTED] 23
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG LIMITED FUND PBLDX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
DECISION SUPPORT SOFTWARE -- 4.0%
Advent Software* 63,300 $ 4,423
Interactive Intelligence* 1,700 67
Netiq* 20,200 1,327
-------------
5,817
--------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 3.3%
Integrated Silicon Solution* 48,100 682
Transwitch* 64,850 4,134
-------------
4,816
--------------------------------------------------------------------------------
ENTERPRISE SOFTWARE/SERVICE -- 5.7%
Avantgo* 12,500 250
Business Objects ADR* 33,300 3,765
Informatica* 46,100 4,299
-------------
8,314
--------------------------------------------------------------------------------
INTERNET CONTENT -- 0.4%
Jupiter Media Metrix* 24,810 395
Mainspring* 15,900 118
-------------
513
--------------------------------------------------------------------------------
INTERNET SOFTWARE -- 2.5%
C-Bridge Net Solutions* 29,200 547
Commerce One* 33,680 2,644
Integrated Information Systems 47,900 228
Intraware* 18,600 139
-------------
3,558
--------------------------------------------------------------------------------
NETWORK SOFTWARE -- 3.8%
Micromuse* 27,100 5,445
-------------
5,445
--------------------------------------------------------------------------------
SATELLITE TELECOMMUNICATIONS -- 0.8%
Celeritek* 29,500 1,112
-------------
1,112
--------------------------------------------------------------------------------
SEMICONDUCTOR COMPONENTS-INTEGRATED CIRCUITS -- 4.9%
O2Micro International* 26,400 454
Pericom Semiconductors* 140,200 5,266
Sipex* 32,900 1,384
-------------
7,104
--------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT -- 1.9%
August Technology* 24,800 329
LTX* 17,600 333
Rudolph Technologies* 3,100 104
Varian Semiconductor Equipment* 54,700 2,048
-------------
2,814
--------------------------------------------------------------------------------
SOFTWARE TOOLS -- 0.7%
Broadbase Software* 75,200 1,020
-------------
1,020
--------------------------------------------------------------------------------
Shares/Face Market
Description Amount (000) Value (000)
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT -- 9.4%
Anaren Microwave* 33,900 $ 4,598
Ditech Communications* 20,100 824
MCK Communications* 52,400 1,186
Natural Microsystems* 68,500 3,685
Tut Systems* 38,300 3,306
-------------
13,599
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT-FIBER OPTICS -- 0.7%
MRV Communications* 22,300 1,010
-------------
1,010
-------------
TOTAL TECHNOLOGY (COST $29,243) 70,569
-------------
TOTAL COMMON STOCK (COST $56,423) 128,510
-------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 9.6%
J.P. Morgan
6.60%, dated 09/29/00, matures 10/02/00,
repurchase price $1,663,582
(collateralized by U.S. Government
Agency Instruments: total market value
$1,696,241) (A) $1,663 1,663
J.P. Morgan
6.60%, dated 09/29/00, matures 10/02/00,
repurchase price $12,225,526
(collateralized by U.S. Government Agency
Instruments: total market value
$12,463,182) (A) 12,219 12,219
-------------
TOTAL REPURCHASE AGREEMENTS (COST $13,882) 13,882
-------------
TOTAL INVESTMENTS -- 98.3% (COST $70,305) 142,392
-------------
--------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- 1.7%
TOTAL OTHER ASSETS AND LIABILITIES, NET 2,512
-------------
--------------------------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 200 million
shares -- $0.001 par value) based on 6,219,043
outstanding shares of common stock 47,211
Accumulated net investment loss (368)
Accumulated net realized gain on investments 25,974
Net unrealized appreciation on investments 72,087
-------------
TOTAL NET ASSETS-- 100.0% $ 144,904
=============
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $23.30
======
* 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.
[LOGO OMITTED] 24
<PAGE>
THE PBHG FUNDS, INC.
PBHG LARGE CAP 20 FUND (UNAUDITED)
PBHG LARGE CAP 20 FUND PLCPX
INVESTMENT FOCUS
STYLE
Value Blend Growth
------------------------
X Large
------------------------
Medium MARKET CAPITALIZATION
------------------------
Small
------------------------
AVERAGE ANNUAL TOTAL RETURN 1
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
One Annualized Annualized
6 Year 3 Year Inception
Months 2 Return Return to Date 3
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PBHG Large Cap 20 Fund (2.35)% 104.62% 59.01% 53.59%
------------------------------------------------------------------------------------
</TABLE>
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 CHART OMITTED]
PLOT POINT FOLLOWS:
PBHG Large Cap Lipper Large-Cap Growth
20 Fund S&P 500 Index 4 Funds Average 5
11/30/96 10,000 10,000 10,000
12/31/96 9,841 9,802 9,748
1/31/97 10,462 10,414 10,367
2/28/97 10,001 10,496 10,161
3/31/97 9,260 10,065 9,632
4/30/97 9,881 10,666 10,136
5/31/97 10,912 11,315 10,834
6/30/97 11,523 11,821 11,288
7/31/97 12,854 12,761 12,367
8/31/97 12,234 12,047 11,789
9/30/97 12,914 12,706 12,423
10/31/97 12,424 12,283 11,978
11/30/97 12,494 12,851 12,222
12/31/97 13,084 13,071 12,333
1/31/98 13,355 13,216 12,520
2/28/98 15,097 14,168 13,532
3/31/98 15,998 14,893 14,177
4/30/98 16,278 15,043 14,401
5/31/98 15,848 14,785 14,028
6/30/98 17,589 15,385 14,915
7/31/98 17,609 15,221 14,809
8/31/98 14,516 13,023 12,354
9/30/98 16,708 13,858 13,280
10/31/98 17,069 14,985 14,121
11/30/98 18,320 15,893 15,121
12/31/98 21,960 16,809 16,801
1/31/99 23,995 17,512 17,958
2/28/99 22,294 16,968 17,195
3/31/99 24,400 17,647 18,247
4/30/99 23,337 18,330 18,289
5/31/99 22,527 17,897 17,684
6/30/99 24,178 18,891 18,975
7/31/99 23,540 18,301 18,419
8/31/99 24,512 18,210 18,465
9/30/99 25,372 17,711 18,325
10/31/99 28,136 18,831 19,631
11/30/99 33,614 19,214 20,789
12/31/99 44,567 20,346 23,423
1/31/00 43,320 19,324 22,482
2/29/00 51,964 18,958 24,233
3/31/00 53,163 20,813 25,433
4/30/00 47,264 20,186 23,818
5/31/00 41,293 19,772 22,362
6/30/00 49,926 20,259 24,129
7/31/00 49,542 19,943 23,627
8/31/00 56,665 21,181 25,796
9/30/00 51,916 20,063 24,021
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 unmanaged and 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 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 Average is not intended to imply the Fund's
past or future performance.
SECTOR WEIGHTINGS - AT SEPTEMBER 30, 2000
[PIE CHART OMITTED]
PLOT POINT FOLLOWS:
Consumer Cyclical 4%
Financial 6%
Industrial 10%
Technology 68%
Cash 12%
% of Total Portfolio Investments
TOP TEN HOLDINGS - SEPTEMBER 30, 2000
Juniper Networks 8.3%
EMC 7.3%
Nortel Networks 6.7%
Citigroup 6.3%
Flextronics International 5.7%
Siebel Systems 5.3%
Sun Microsystems 5.2%
Cisco Systems 4.8%
Broadcom 4.6%
Gemstar-TV Guide International 4.2%
------------------------------------------------------
% of Total Portfolio Investments 58.4%
[LOGO OMITTED] 25
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG LARGE CAP 20 FUND PLCPX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMMON STOCK -- 90.5%
CONSUMER CYCLICAL -- 4.3%
MULTIMEDIA -- 4.3%
Gemstar-TV Guide International* 571,700 $ 49,845
------------
49,845
------------
TOTAL CONSUMER CYCLICAL (COST $21,498) 49,845
------------
--------------------------------------------------------------------------------
FINANCIAL -- 6.5%
DIVERSIFIED FINANCIAL SERVICES -- 6.5%
Citigroup 1,390,500 75,174
------------
75,174
------------
TOTAL FINANCIAL (COST $65,729) 75,174
------------
--------------------------------------------------------------------------------
INDUSTRIAL -- 9.7%
ELECTRONIC COMPONENTS-MISCELLANEOUS -- 5.9%
Flextronics International* 827,900 67,991
------------
67,991
--------------------------------------------------------------------------------
INSTRUMENTS-SCIENTIFIC -- 3.8%
Pe Corp-Pe Biosystems Group 380,600 44,340
------------
44,340
------------
TOTAL INDUSTRIAL (COST $84,393) 112,331
------------
--------------------------------------------------------------------------------
TECHNOLOGY -- 70.0%
APPLICATIONS SOFTWARE -- 5.4%
Siebel Systems* 564,400 62,825
------------
62,825
--------------------------------------------------------------------------------
COMPUTERS -- 5.3%
Sun Microsystems* 526,900 61,516
------------
61,516
--------------------------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 11.6%
EMC* 881,400 87,369
Veritas Software* 325,600 46,235
------------
133,604
--------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 8.7%
Broadcom* 226,000 55,087
PMC-Sierra* 210,200 45,246
------------
100,333
--------------------------------------------------------------------------------
ENTERPRISE SOFTWARE/SERVICES -- 5.1%
I2 Technologies* 62,200 11,635
Oracle* 601,000 47,329
------------
58,964
--------------------------------------------------------------------------------
NETWORKING PRODUCTS -- 13.5%
Cisco Systems* 1,029,400 56,874
Juniper Networks* 449,800 98,478
------------
155,352
--------------------------------------------------------------------------------
Shares/Face Market
Description Amount (000) Value (000)
--------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT -- 2.7%
Applied Materials* 523,400 $ 31,044
------------
31,044
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT -- 7.1%
Cosine Communications* 47,500 2,640
Nortel Networks^ 1,338,180 79,705
------------
82,345
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT-FIBER-OPTICS -- 10.6%
Corning 155,200 46,094
JDS Uniphase* 475,000 44,977
SDL* 100,500 31,086
------------
122,157
------------
TOTAL TECHNOLOGY (COST $513,098) 808,140
------------
TOTAL COMMON STOCK (COST $684,718) 1,045,490
------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 12.6%
J.P. Morgan
6.58%, dated 09/29/00, matures 10/02/00,
repurchase price $62,631,094
(collateralized by U.S. Government
Agency Instruments: total market value
$63,849,657) (A) $62,597 62,597
Morgan Stanley
6.58%, dated 09/29/00, matures 10/02/00,
repurchase price $39,326,654
(collateralized by U.S. Government Agency
Instruments: total market value
$40,106,481) (A) 39,305 39,305
Prudential
6.58%, dated 09/29/00, matures 10/02/00,
repurchase price $43,689,949
(collateralized by U.S. Government Agency
Instruments: total market value
$44,540,109) (A) 43,666 43,666
------------
TOTAL REPURCHASE AGREEMENTS (COST $145,568) 145,568
------------
TOTAL INVESTMENTS -- 103.1% (COST $830,286) 1,191,058
------------
--------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (3.1)%
TOTAL OTHER ASSETS AND LIABILITIES, NET (35,494)
------------
--------------------------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 200
million shares -- $0.001 par value)
based on 26,690,094 outstanding shares
of common stock 671,346
Accumulated net investment loss (2,613)
Accumulated net realized gain on investments 126,059
Net unrealized appreciation on investments 360,772
------------
TOTAL NET ASSETS-- 100.0% $1,155,564
============
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $43.30
======
* Non-Income Producing Security
(A) -- Tri-Party Repurchase Agreement
^ The fund held Canadian securities as of September 30, 2000. The total market
value of investments is $79,705,346 and represented 6.9% of the fund.
The accompanying notes are an integral part of the financial statements.
[LOGO OMITTED] 26
<PAGE>
The PBHG FUNDS, INC.
PBHG NEW OPPORTUNITIES FUND (UNAUDITED)
PBHG NEW OPPORTUNITIES FUND PBNOX
INVESTMENT FOCUS
STYLE
Value Blend Growth
------------------------
Large
------------------------
Medium MARKET CAPITALIZATION
------------------------
X Small
------------------------
AVERAGE ANNUAL TOTAL RETURN1
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
One Annualized
6 Year Inception
Months 2 Return to Date 3
----------------------------------------------------------------------------------
<S> <C> <C> <C>
PBHG New Opportunities Fund (19.29)% 204.27% 205.49%
----------------------------------------------------------------------------------
</TABLE>
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 MULTI-CAP GROWTH FUNDS AVERAGE
[LINE CHART OMITTED]
PLOT POINT FOLLOWS:
PBHG Russell 2000 Lipper Multi-Cap Growth
New Opportunities Fund Growth Index 4 Funds Average 5
2/28/99 10,000 10,000 10,000
3/31/99 11,714 10,356 10,656
4/30/99 12,134 11,271 10,970
5/31/99 12,795 11,289 10,803
6/30/99 17,255 11,883 11,591
7/31/99 18,770 11,516 11,371
8/31/99 19,047 11,085 11,403
9/30/99 19,573 11,299 11,438
10/31/99 24,780 11,588 12,319
11/30/99 33,314 12,814 13,487
12/31/99 51,830 15,072 15,770
1/31/00 54,784 14,932 15,443
2/29/00 82,487 18,406 18,111
3/31/00 73,791 16,471 18,049
4/30/00 53,461 14,808 16,499
5/31/00 50,447 13,511 15,368
6/30/00 67,177 15,257 16,981
7/31/00 53,694 13,949 16,475
8/31/00 60,488 15,417 18,300
9/30/00 59,556 14,651 17,436
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 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. 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 Average is not intended to imply the Fund's
past or future performance.
SECTOR WEIGHTINGS - AT SEPTEMBER 30, 2000
[PIE CHART OMITTED]
PLOT POINT FOLLOWS:
Consumer Cyclical 7%
Health Care 19%
Industrial 4%
Services 8%
Technology 58%
Cash 4%
% of Total Portfolio Investments
TOP TEN HOLDINGS - SEPTEMBER 30, 2000
JNI 6.9%
Albany Molecular Research 6.7%
Pericom Semiconductors 5.1%
Noven Pharmaceuticals 4.9%
Anaren Microwave 4.7%
Serena Software 4.6%
Elantec Semiconductor 4.6%
MapInfo 4.3%
Priority Healthcare, Cl B 4.2%
Dendrite International 4.0%
------------------------------------------------------
% of Total Portfolio Investments 50.0%
[LOGO OMITTED] 27
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG NEW OPPORTUNITIES FUND PBNOX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMMON STOCK -- 92.8%
CONSUMER CYCLICAL -- 6.4%
RETAIL-COMPUTER EQUIPMENT -- 3.7%
PC Connection* 98,000 $ 5,586
-------------
5,586
--------------------------------------------------------------------------------
RETAIL-RESTAURANTS -- 2.7%
California Pizza Kitchen* 59,700 1,672
P.F Chang's China Bistro* 70,000 2,419
-------------
4,091
-------------
TOTAL CONSUMER CYCLICAL (COST $6,703) 9,677
-------------
--------------------------------------------------------------------------------
HEALTH CARE -- 18.3%
DIAGNOSTIC KITS -- 2.7%
Biosite Diagnostics* 103,000 4,107
-------------
4,107
--------------------------------------------------------------------------------
DRUG DELIVERY SYSTEMS -- 4.7%
Noven Pharmaceuticals* 166,000 7,097
-------------
7,097
--------------------------------------------------------------------------------
MEDICAL-DRUGS -- 4.1%
Priority Healthcare, Cl B* 80,500 6,138
-------------
6,138
--------------------------------------------------------------------------------
MEDICAL INFORMATION SYSTEMS -- 3.9%
Dendrite International* 217,000 5,818
-------------
5,818
--------------------------------------------------------------------------------
MEDICAL LABS & TESTING SERVICES -- 2.9%
Impath* 70,000 4,418
-------------
4,418
-------------
TOTAL HEALTH CARE (COST $19,048) 27,578
-------------
--------------------------------------------------------------------------------
INDUSTRIAL -- 3.8%
POWER CONVERSION/SUPPLY EQUIPMENT -- 3.8%
C & D Technologies 102,000 5,789
-------------
5,789
-------------
TOTAL INDUSTRIAL (COST $3,735) 5,789
-------------
--------------------------------------------------------------------------------
SERVICES -- 7.6%
CONSULTING SERVICES -- 1.2%
Corporate Executive Board* 44,000 1,771
-------------
1,771
--------------------------------------------------------------------------------
RESEARCH & DEVELOPMENT -- 6.4%
Albany Molecular Research* 172,000 9,664
-------------
9,664
-------------
TOTAL SERVICES (COST $5,854) 11,435
-------------
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
TECHNOLOGY -- 56.7%
APPLICATIONS SOFTWARE -- 14.1%
Exchange Applications* 38,900 $ 176
MapInfo* 201,000 6,294
Pinnacle Systems* 214,000 2,408
Serena Software* 146,000 6,725
WebTrends* 147,000 5,494
-------------
21,097
--------------------------------------------------------------------------------
COMPUTER DATA SECURITY -- 1.2%
Internet Security Systems* 24,000 1,803
-------------
1,803
--------------------------------------------------------------------------------
COMPUTERS-INTEGRATED SYSTEMS -- 3.4%
Henry (Jack) & Associates 117,500 5,097
-------------
5,097
--------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 2.6%
Actel* 110,400 3,968
-------------
3,968
--------------------------------------------------------------------------------
INTERNET CONTENT -- 0.8%
Jupiter Media Matrix* 77,469 1,234
-------------
1,234
--------------------------------------------------------------------------------
INTERNET SOFTWARE -- 1.6%
Intranet Solutions* 47,000 2,350
-------------
2,350
--------------------------------------------------------------------------------
NETWORKING PRODUCTS -- 6.7%
JNI* 112,500 10,012
-------------
10,012
--------------------------------------------------------------------------------
SEMICONDUCTOR COMPONENTS-INTEGRATED CIRCUITS -- 9.4%
Elantec Semiconductor* 67,000 6,675
Pericom Semiconductors* 199,000 7,475
-------------
14,150
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT -- 13.1%
Anaren Microwave* 50,000 6,781
Audiocodes Limited* 49,100 4,180
Aware* 111,000 4,274
Tut Systems* 52,000 4,488
-------------
19,723
--------------------------------------------------------------------------------
WIRELESS EQUIPMENT -- 3.8%
Proxim* 128,000 5,696
-------------
5,696
-------------
TOTAL TECHNOLOGY (COST $61,910) 85,130
-------------
TOTAL COMMON STOCK (COST $97,250) 139,609
-------------
--------------------------------------------------------------------------------
[LOGO OMITTED] 28
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG NEW OPPORTUNITIES FUND PBNOX
Face Market
Description Amount (000) Value (000)
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 3.7%
J.P. Morgan
6.60%, dated 09/29/00, matures 10/02/00,
repurchase price $5,637,016 (collateralized
by U.S. Government Agency Instruments:
total market value $5,746,596) (A) $5,634 $ 5,634
-------------
TOTAL REPURCHASE AGREEMENT (COST $5,634) 5,634
-------------
TOTAL INVESTMENTS-- 96.5% (COST $102,884) 145,243
-------------
--------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- 3.5%
TOTAL OTHER ASSETS AND LIABILITIES, NET 5,199
-------------
--------------------------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 200 million
shares -- $0.001 par value) based on 1,898,524
outstanding shares of common stock 62,231
Accumulated net investment loss (614)
Accumulated net realized gain on investments 46,466
Net unrealized appreciation on investments 42,359
----------
TOTAL NET ASSETS-- 100.0% $ 150,442
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $79.24
======
* Non-Income Producing Security
(A) -- Tri-Party Repurchase Agreement
Cl -- Class
The accompanying notes are an integral part of the financial statements.
[LOGO OMITTED] 29
<PAGE>
THE PBHG FUNDS, INC.
PBHG LARGE CAP VALUE FUND (UNAUDITED)
PBHG LARGE CAP VALUE FUND PLCVX
INVESTMENT FOCUS
STYLE
Value Blend Growth
------------------------
X Large
------------------------
Medium MARKET CAPITALIZATION
------------------------
Small
------------------------
AVERAGE ANNUAL TOTAL RETURN 1
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
One Annualized Annualized
6 Year 3 Year Inception
Months 2 Return Return to Date 3
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PBHG Large Cap Value Fund 11.03% 20.58% 20.00% 22.67%
------------------------------------------------------------------------------------
</TABLE>
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 LARGE-CAP VALUE FUNDS AVERAGE
[LINE CHART OMITTED]
PLOT FOLLOWS:
PBHG Large Cap Lipper Large-Cap Value
Value Fund S&P 500 Index 4 Funds Average 5
12/31/96 10,000 10,000 10,000
1/31/97 10,240 10,624 10,381
2/28/97 10,430 10,708 10,468
3/31/97 10,110 10,269 10,132
4/30/97 10,380 10,881 10,426
5/31/97 11,080 11,543 11,084
6/30/97 11,560 12,060 11,480
7/31/97 12,400 13,019 12,320
8/31/97 12,000 12,291 12,027
9/30/97 12,450 12,963 12,633
10/31/97 12,110 12,531 12,152
11/30/97 12,390 13,110 12,421
12/31/97 12,562 13,335 12,613
1/31/98 12,540 13,483 12,553
2/28/98 13,407 14,455 13,414
3/31/98 14,101 15,194 13,993
4/30/98 14,198 15,347 14,053
5/31/98 14,101 15,084 13,748
6/30/98 14,339 15,696 13,781
7/31/98 14,318 15,529 13,322
8/31/98 12,312 13,287 11,346
9/30/98 13,201 14,138 11,863
10/31/98 14,578 15,288 12,787
11/30/98 15,553 16,214 13,353
12/31/98 16,925 17,149 13,758
1/31/99 17,244 17,866 13,791
2/28/99 16,509 17,311 13,395
3/31/99 16,962 18,003 13,765
4/30/99 17,415 18,701 14,829
5/31/99 17,550 18,259 14,769
6/30/99 18,701 19,272 15,245
7/31/99 18,297 18,671 14,850
8/31/99 17,991 18,578 14,367
9/30/99 17,844 18,069 13,773
10/31/99 18,787 19,212 14,212
11/30/99 19,142 19,602 14,276
12/31/99 18,796 20,757 14,697
1/31/00 18,634 19,714 14,030
2/29/00 17,372 19,341 13,463
3/31/00 19,379 21,233 14,878
4/30/00 19,962 20,594 14,814
5/31/00 20,723 20,172 14,940
6/30/00 20,270 20,669 14,659
7/31/00 19,460 20,346 14,721
8/31/00 20,771 21,610 15,686
9/30/00 21,516 20,469 15,473
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 unmanaged and 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 Large-Cap Value Funds Average represents the average performance of
all mutual funds classified by Lipper, Inc. in the Large-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 Average is not intended to imply the Fund's past or
future performance.
SECTOR WEIGHTINGS - AT SEPTEMBER 30, 2000
[PIE CHART OMITTED]
PLOT POINT FOLLOWS:
Basic Materials 2%
Consumer Cyclical 3%
Consumer Non-Cyclical 16%
Energy 6%
Financial 20%
Health Care 11%
Industrial 6%
Services 6%
Technology 12%
Utilities 1%
Cash 17%
% of Total Portfolio Investments
TOP TEN HOLDINGS - SEPTEMBER 30, 2000
General Electric 4.1%
Burlington Resources 3.8%
Citigroup 3.5%
Heinz (H.J.) 3.5%
Pitney Bowes 3.4%
Sara Lee 3.0%
Microsoft 2.8%
Bank of America 2.8%
IMS Health 2.7%
Schering-Plough 2.6%
------------------------------------------------------
% of Total Portfolio Investments 32.2%
[LOGO OMITTED] 30
<PAGE>
THE PBHG FUNDS, INC.
SCHEDULE OF INVESTMENTS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG LARGE CAP VALUE FUND PLCVX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMMON STOCK -- 94.3%
BASIC MATERIALS -- 1.9%
CHEMICALS-DIVERSIFIED -- 1.9%
Dow Chemical 51,100 $ 1,274
-------------
1,274
-------------
TOTAL BASIC MATERIALS (COST $1,230) 1,274
-------------
--------------------------------------------------------------------------------
CONSUMER CYCLICAL -- 3.7%
CABLE TV -- 1.1%
Comcast Special, Cl A* 17,000 696
-------------
696
--------------------------------------------------------------------------------
MULTIMEDIA -- 1.8%
Gannett 21,800 1,155
-------------
1,155
--------------------------------------------------------------------------------
PUBLISHING-NEWSPAPERS -- 0.8%
Knight-Ridder 10,000 508
-------------
508
-------------
TOTAL CONSUMER CYCLICAL (COST $2,264) 2,359
-------------
--------------------------------------------------------------------------------
CONSUMER NON-CYCLICAL -- 18.5%
COSMETICS & TOILETRIES -- 1.2%
Avon Products 19,500 797
-------------
797
--------------------------------------------------------------------------------
FOOD-MISCELLANEOUS/DIVERSIFIED -- 13.5%
Campbell Soup 23,500 608
Conagra Foods 78,000 1,565
Heinz (H.J.) 69,300 2,569
Kellogg 77,700 1,879
Sara Lee 108,900 2,212
-------------
8,833
--------------------------------------------------------------------------------
FOOD-RETAIL -- 3.8%
Albertson's 39,000 819
Kroger* 72,900 1,645
-------------
2,464
-------------
TOTAL CONSUMER NON-CYCLICAL (COST $11,684) 12,094
-------------
--------------------------------------------------------------------------------
ENERGY -- 7.0%
OIL COMPANIES-EXPLORATION & PRODUCTION -- 4.3%
Burlington Resources 76,600 2,820
-------------
2,820
--------------------------------------------------------------------------------
OIL COMPANIES-INTEGRATED -- 2.7%
Exxon Mobil 12,000 1,069
USX-Marathon Group 24,300 690
-------------
1,759
-------------
TOTAL ENERGY (COST $4,367) 4,579
-------------
--------------------------------------------------------------------------------
FINANCIAL -- 23.0%
DIVERSIFIED FINANCIAL SERVICES -- 4.0%
Citigroup 48,333 2,613
-------------
2,613
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
FINANCE-CONSUMER LOANS -- 2.1%
USA Education 29,000 $ 1,397
-------------
1,397
--------------------------------------------------------------------------------
FINANCE-INVESTMENT BANKER/BROKER -- 2.4%
Morgan J.P. 9,700 1,585
-------------
1,585
--------------------------------------------------------------------------------
FINANCE-MORTGAGE LOAN/BANKER -- 5.6%
Countrywide Credit 35,700 1,347
Federal National Mortgage 21,300 1,152
Federal Home Loan Mortgage 16,000 1,144
-------------
3,643
--------------------------------------------------------------------------------
LIFE/HEALTH INSURANCE -- 2.3%
Aetna 25,500 1,481
-------------
1,481
--------------------------------------------------------------------------------
MONEY CENTER BANKS -- 3.2%
Bank of America 39,600 2,074
-------------
2,074
--------------------------------------------------------------------------------
MULTI-LINE INSURANCE -- 2.1%
Allstate 40,000 1,390
-------------
1,390
--------------------------------------------------------------------------------
S & L THRIFTS-WESTERN US -- 1.3%
Washington Mutual 21,700 864
-------------
864
-------------
TOTAL FINANCIAL (COST $14,270) 15,047
-------------
--------------------------------------------------------------------------------
HEALTH CARE -- 11.9%
MEDICAL-DRUGS -- 5.9%
Merck 25,100 1,869
Schering-Plough 42,200 1,962
-------------
3,831
--------------------------------------------------------------------------------
MEDICAL INFORMATION SYSTEMS -- 3.1%
IMS Health 98,000 2,033
-------------
2,033
--------------------------------------------------------------------------------
MEDICAL PRODUCTS -- 2.9%
Becton Dickinson 72,500 1,917
-------------
1,917
-------------
TOTAL HEALTH CARE (COST $7,108) 7,781
-------------
--------------------------------------------------------------------------------
INDUSTRIAL -- 7.0%
DIVERSIFIED MANUFACTURING OPERATIONS -- 4.6%
General Electric 52,400 3,023
-------------
3,023
--------------------------------------------------------------------------------
NON-HAZARDOUS WASTE DISPOSAL -- 2.4%
Waste Management 90,000 1,569
-------------
1,569
-------------
TOTAL INDUSTRIAL (COST $4,718) 4,592
-------------
--------------------------------------------------------------------------------
[LOGO OMITTED] 31
<PAGE>
THE PBHG FUNDS, INC.
SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG LARGE CAP VALUE FUND PLCVX
Shares/Face Market
Description Amount (000) Value (000)
--------------------------------------------------------------------------------
SERVICES -- 6.7%
COMPUTER SERVICES -- 1.9%
Electronic Data Systems 30,000 $ 1,245
-------------
1,245
--------------------------------------------------------------------------------
TELEPHONE-INTEGRATED -- 4.8%
AT&T 42,300 1,242
Sprint 23,800 698
Worldcom* 40,000 1,215
-------------
3,155
-------------
TOTAL SERVICES (COST $4,233) 4,400
-------------
--------------------------------------------------------------------------------
TECHNOLOGY -- 13.8%
APPLICATIONS SOFTWARE -- 3.2%
Microsoft* 35,000 2,111
-------------
2,111
--------------------------------------------------------------------------------
DATA PROCESSING/MANAGEMENT -- 2.8%
First Data 47,900 1,871
-------------
1,871
--------------------------------------------------------------------------------
OFFICE AUTOMATION & EQUIPMENT -- 3.9%
Pitney Bowes 64,900 2,560
-------------
2,560
--------------------------------------------------------------------------------
PRINTERS & RELATED PRODUCTS -- 2.0%
Lexmark International* 34,700 1,301
-------------
1,301
--------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES -- 1.9%
Verizon Communications 25,000 1,211
-------------
1,211
-------------
TOTAL TECHNOLOGY (COST $8,725) 9,054
-------------
--------------------------------------------------------------------------------
UTILITIES -- 0.8%
INDEPENDENT POWER PRODUCER -- 0.8%
Southern Energy* 15,900 499
-------------
499
-------------
TOTAL UTILITIES (COST $350) 499
-------------
TOTAL COMMON STOCK (COST $58,949) 61,679
-------------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 19.2%
J.P. Morgan
6.60%, dated 09/29/00, matures 10/02/00,
repurchase price $12,558,741
(collateralized by U.S. Government Agency
Instruments: total market value
$12,803,439) (A) $12,552 12,552
-------------
TOTAL REPURCHASE AGREEMENT (COST $12,552) 12,552
-------------
TOTAL INVESTMENTS-- 113.5% (COST $71,501) $74,231
=============
Percentages Are Based On Net Assets of $65,405,816
* Non-Income Producing Security
(A) -- Tri-Party Repurchase Agreement
Cl -- Class
The accompanying notes are an integral part of the financial statements.
[LOGO OMITTED] 32
<PAGE>
THE PBHG FUNDS, INC.
PBHG MID-CAP VALUE FUND (UNAUDITED)
PBHG MID-CAP VALUE FUND PBMCX
INVESTMENT FOCUS
STYLE
Value Blend Growth
------------------------
Large
------------------------
X Medium MARKET CAPITALIZATION
------------------------
Small
------------------------
AVERAGE ANNUAL TOTAL RETURN 1
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
One Annualized Annualized
6 Year 3 Year Inception
Months 2 Return Return to Date 3
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PBHG Mid-Cap Value Fund 9.41% 41.61% 23.83% 33.90%
-----------------------------------------------------------------------------------
</TABLE>
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,
S&P BARRA MID CAP VALUE INDEX AND THE LIPPER MID-CAP VALUE FUNDS AVERAGE
[LINE GRAPH OMITTED]
PLOT POINT FOLLOWS:
S&P Barra Lipper
PBHG Mid-Cap S&P Mid-Cap 400 Mid Cap Mid-Cap Value
Value Fund Index 4 Value Index 5 Funds Average 6
4/30/97 10,000 10,000 10,000 10,000
5/31/97 10,740 10,874 10,638 10,838
6/30/97 11,410 11,180 10,926 11,276
7/31/97 12,890 12,285 11,733 12,045
8/31/97 13,240 12,271 11,811 12,097
9/30/97 14,300 12,976 12,472 12,812
10/31/97 13,760 12,411 12,100 12,398
11/30/97 13,870 12,595 12,402 12,451
12/31/97 14,148 13,083 13,147 12,694
1/31/98 14,138 12,834 12,845 12,558
2/28/98 15,443 13,896 13,795 13,489
3/31/98 16,106 14,523 14,440 14,106
4/30/98 16,422 14,787 14,533 14,271
5/31/98 15,717 14,123 13,946 13,703
6/30/98 15,896 14,211 13,842 13,603
7/31/98 15,580 13,660 13,240 12,812
8/31/98 12,769 11,119 11,072 10,570
9/30/98 13,906 12,157 11,933 11,131
10/31/98 15,358 13,243 12,874 11,887
11/30/98 16,538 13,904 13,174 12,337
12/31/98 18,087 15,584 13,761 12,917
1/31/99 18,122 14,977 13,042 12,761
2/28/99 17,023 14,193 12,419 12,165
3/31/99 17,451 14,589 12,653 12,505
4/30/99 17,764 15,740 13,878 13,568
5/31/99 18,666 15,808 14,104 13,776
6/30/99 20,042 16,656 14,542 14,297
7/31/99 20,215 16,301 14,349 14,016
8/31/99 19,487 15,742 13,805 13,471
9/30/99 19,174 15,256 13,125 13,122
10/31/99 19,313 16,033 13,388 13,318
11/30/99 20,007 16,875 13,658 13,717
12/31/99 22,017 17,878 14,080 14,536
1/31/00 20,903 17,374 13,472 13,905
2/29/00 21,622 18,590 12,978 14,157
3/31/00 24,818 20,146 14,964 15,436
4/30/00 24,639 19,443 14,827 15,161
5/31/00 25,788 19,200 15,255 15,146
6/30/00 25,698 19,482 14,566 15,224
7/31/00 25,321 19,790 15,143 15,264
8/31/00 27,943 21,999 16,226 16,375
9/30/00 27,153 21,849 16,466 16,252
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 S&P Barra Mid Cap Value Index is an unmanaged capitalization weighted
index that consists of those securities in the S&P Mid Cap 400 Index with
lower price to book ratios. The index reflects the reinvestments 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 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 Average is not intended to imply the Fund's past or
future performance.
SECTOR WEIGHTINGS - AT SEPTEMBER 30, 2000
[PIE CHART OMITTED]
PLOT POINT FOLLOWS:
Basic Materials 3%
Consumer Cyclical 16%
Consumer Non-Cyclical 1%
Energy 16%
Financial 15%
Health Care 8%
Industrial 7%
Services 6%
Technology 13%
Utilities 6%
Cash 9%
TOP TEN HOLDINGS - SEPTEMBER 30, 2000
Adelphia Communications, Cl A 2.0%
Devon Energy 2.0%
Inco Limited 1.7%
DTE Energy 1.6%
Cablevision Systems, Cl A 1.6%
XL Capital Limited, Cl A 1.5%
Quantum - DLT & Storage 1.5%
Parametric 1.4%
TRW 1.4%
Harrah's Entertainment 1.4%
------------------------------------------------------
% of Total Portfolio Investments 16.1%
[LOGO OMITTED] 33
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG MID-CAP VALUE FUND PBMCX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMMON STOCK -- 91.7%
BASIC MATERIALS -- 2.9%
CHEMICALS-SPECIALTY -- 1.2%
Crompton 124,500 $ 980
Cytec Industries* 11,600 388
-----------
1,368
--------------------------------------------------------------------------------
METAL-DIVERSIFIED -- 1.7%
Inco Limited 124,500 2,008
-----------
2,008
-----------
TOTAL BASIC MATERIALS (COST $3,652) 3,376
-----------
--------------------------------------------------------------------------------
CONSUMER CYCLICAL -- 16.2%
APPLIANCES -- 0.9%
Maytag 35,100 1,090
-----------
1,090
--------------------------------------------------------------------------------
AUTO/TRUCK PARTS & EQUIPMENT-ORIGINAL -- 2.2%
Lear* 21,500 442
TRW 40,600 1,649
Visteon 34,100 516
-----------
2,607
--------------------------------------------------------------------------------
BROADCAST SERVICE/PROGRAMMING -- 1.0%
Clear Channel Communication* 14,300 808
Unitedglobalcom, Cl A* 13,700 411
-----------
1,219
--------------------------------------------------------------------------------
CABLE TV -- 3.7%
Adelphia Communications, Cl A* 86,800 2,393
Cablevision Systems, Cl A* 28,100 1,863
-----------
4,256
--------------------------------------------------------------------------------
CASINO HOTELS -- 1.4%
Harrah's Entertainment* 59,700 1,642
-----------
1,642
--------------------------------------------------------------------------------
HOTELS & MOTELS -- 0.8%
Starwood Hotels & Resorts Worldwide 29,300 916
-----------
916
--------------------------------------------------------------------------------
MULTIMEDIA -- 2.1%
Gannett 17,600 933
Scripps (E.W.), Cl A 25,600 1,382
-----------
2,315
--------------------------------------------------------------------------------
RETAIL-APPAREL/SHOE -- 0.4%
Intimate Brands 24,400 456
-----------
456
--------------------------------------------------------------------------------
RETAIL-DISCOUNT -- 0.7%
Family Dollar Stores 45,000 866
-----------
866
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
RETAIL-DRUG STORE -- 0.6%
Longs Drug Stores 39,300 $ 752
-----------
752
--------------------------------------------------------------------------------
RETAIL-RESTAURANTS -- 0.8%
Wendy's International 49,700 997
-----------
997
--------------------------------------------------------------------------------
TELEVISION -- 1.0%
Pegasus Communications* 25,500 1,232
-----------
1,232
--------------------------------------------------------------------------------
TRAVEL SERVICES -- 0.6%
Sabre Holdings, Cl A* 25,100 726
-----------
726
-----------
TOTAL CONSUMER CYCLICAL (COST $19,335) 19,074
-----------
--------------------------------------------------------------------------------
CONSUMER NON-CYCLICAL -- 1.2%
CONSUMER PRODUCTS-MISCELLANEOUS -- 1.2%
Fortune Brands 51,600 1,367
-----------
1,367
-----------
TOTAL CONSUMER NON-CYCLICAL (COST $1,261) 1,367
-----------
--------------------------------------------------------------------------------
ENERGY -- 16.3%
OIL COMPANIES-EXPLORATION & PRODUCTION -- 7.5%
Anadarko Petroleum 14,611 971
Devon Energy 39,292 2,364
EOG Resources 37,000 1,438
Forest Oil* 59,100 957
Louis Dreyfus Natural Gas* 27,000 1,070
Ocean Energy* 49,000 756
Triton Energy Limited, Cl A* 29,800 1,162
-----------
8,718
--------------------------------------------------------------------------------
OIL COMPANIES-INTEGRATED -- 0.7%
Unocal 24,800 879
-----------
879
--------------------------------------------------------------------------------
OIL FIELD MACHINERY & EQUIPMENT -- 1.1%
Cooper Cameron* 3,200 236
Grant Prideco* 46,100 1,011
-----------
1,247
--------------------------------------------------------------------------------
OIL-FIELD SERVICES -- 2.9%
BJ Services* 24,300 1,485
Hanover Compressor* 23,100 761
Tidewater 26,800 1,219
-----------
3,465
--------------------------------------------------------------------------------
OIL & GAS DRILLING -- 2.7%
Ensco International 20,100 769
Global Marine* 25,600 790
Nabors Industries* 21,300 1,116
Noble Drilling* 10,400 523
-----------
3,198
--------------------------------------------------------------------------------
[LOGO OMITTED] 34
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG MID-CAP VALUE FUND PBMCX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
PIPELINES -- 1.4%
Columbia Energy Group 7,200 $ 511
Kinder Morgan 28,800 1,179
-----------
1,690
-----------
TOTAL ENERGY (COST $15,349) 19,197
-----------
--------------------------------------------------------------------------------
FINANCIAL -- 14.8%
COMMERCIAL BANKS-EASTERN US -- 0.7%
Mercantile 23,100 838
-----------
838
--------------------------------------------------------------------------------
COMMERCIAL BANKS-SOUTHERN US -- 0.6%
Southtrust 23,600 742
-----------
742
--------------------------------------------------------------------------------
FINANCE-COMMERCIAL -- 0.6%
CIT Group 42,800 749
-----------
749
--------------------------------------------------------------------------------
FINANCE-CONSUMER LOANS -- 0.6%
Household International 11,900 674
-----------
674
--------------------------------------------------------------------------------
FINANCIAL GUARANTEE INSURANCE -- 0.6%
The PMI Group 11,200 759
-----------
759
--------------------------------------------------------------------------------
LIFE/HEALTH INSURANCE -- 3.5%
Jefferson Pilot 11,100 753
John Hancock Financial* 52,900 1,422
Torchmark 30,100 837
Unumprovident 37,600 1,025
-----------
4,037
--------------------------------------------------------------------------------
MULTI-LINE INSURANCE -- 0.7%
Allmerica Financial 12,500 799
-----------
799
--------------------------------------------------------------------------------
PROPERTY/CASUALTY INSURANCE -- 1.5%
XL Capital Limited, Cl A 24,500 1,801
-----------
1,801
--------------------------------------------------------------------------------
REITS-DIVERSIFIED -- 0.7%
Pinnacle Holdings* 31,600 841
-----------
841
--------------------------------------------------------------------------------
S & L/THRIFTS-CENTRAL US -- 1.2%
Charter One Financial 56,495 1,377
-----------
1,377
--------------------------------------------------------------------------------
S & L/THRIFTS-EASTERN US -- 0.5%
Dime Bancorp 25,100 541
-----------
541
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
S & L/THRIFTS-WESTERN US -- 2.3%
Golden State Bancorp* 57,000 $ 1,347
Golden West Financial 14,900 799
Washington Mutual 12,500 498
-----------
2,644
--------------------------------------------------------------------------------
SUPER-REGIONAL BANKS-US -- 1.3%
Comerica 27,000 1,578
-----------
1,578
-----------
TOTAL FINANCIAL (COST $15,810) 17,380
-----------
--------------------------------------------------------------------------------
HEALTH CARE -- 7.7%
DISPOSABLE MEDICAL PRODUCTS -- 0.3%
Bard (C.R.) 9,500 401
-----------
401
--------------------------------------------------------------------------------
HEALTH CARE COST CONTAINMENT -- 0.7%
McKesson HBOC 26,800 819
-----------
819
--------------------------------------------------------------------------------
MEDICAL-BIOMEDICAL/GENETIC -- 1.4%
Aclara Biosciences* 5,900 180
Incyte Genomics* 30,000 1,234
Inhale Therapeutic Systems* 4,900 276
-----------
1,690
--------------------------------------------------------------------------------
MEDICAL-DRUGS -- 0.2%
Cephalon* 4,300 209
-----------
209
--------------------------------------------------------------------------------
MEDICAL-GENERIC DRUGS -- 2.5%
Mylan Labs 49,700 1,339
Watson Pharmaceutical* 24,500 1,589
-----------
2,928
--------------------------------------------------------------------------------
MEDICAL-HMO -- 0.7%
Trigon Healthcare* 14,600 767
-----------
767
--------------------------------------------------------------------------------
MEDICAL INSTRUMENTS -- 0.4%
Boston Scientific* 27,200 447
-----------
447
--------------------------------------------------------------------------------
MEDICAL LASER SYSTEMS -- 0.5%
Visx* 20,800 560
-----------
560
--------------------------------------------------------------------------------
PHARMACY SERVICES -- 1.0%
Omnicare 74,600 1,203
-----------
1,203
-----------
TOTAL HEALTH CARE (COST $8,067) 9,024
-----------
--------------------------------------------------------------------------------
INDUSTRIAL -- 6.8%
AEROSPACE/DEFENSE -- 0.7%
Litton Industries* 17,900 800
-----------
800
--------------------------------------------------------------------------------
[LOGO OMITTED] 35
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
------------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG MID-CAP VALUE FUND PBMCX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
BUILDING PRODUCTS-CEMENT/AGGREGATE-- 0.8%
Martin Marietta Materials 24,800 $ 950
-----------
950
--------------------------------------------------------------------------------
CIRCUIT BOARDS -- 0.5%
Jabil Circuit* 11,000 624
-----------
624
--------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING OPERATIONS -- 2.7%
Eaton 14,700 906
ITT Industries 45,500 1,476
Textron 16,500 761
-----------
3,143
--------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-MISCELLANEOUS -- 0.6%
Vishay Intertechnology* 21,500 661
-----------
661
--------------------------------------------------------------------------------
ELECTRONIC MEASURING INSTRUMENTS -- 0.7%
Tektronix 11,200 860
------------
860
--------------------------------------------------------------------------------
IDENTIFICATION SYSTEM/DEVICES -- 0.8%
Symbol Technologies 27,000 970
-----------
970
-----------
TOTAL INDUSTRIAL (COST $8,098) 8,008
-----------
--------------------------------------------------------------------------------
SERVICES -- 5.7%
COMMERCIAL SERVICES -- 1.2%
Quintiles Transnational* 85,900 1,369
-----------
1,369
--------------------------------------------------------------------------------
COMMERCIAL SERVICES-FINANCE -- 3.0%
Block (H&R) 40,700 1,508
Concord EFS* 39,900 1,417
Equifax 21,400 577
-----------
3,502
--------------------------------------------------------------------------------
COMPUTER SERVICES -- 0.5%
Unisys* 54,800 617
-----------
617
--------------------------------------------------------------------------------
CONSULTING SERVICES -- 1.0%
Comdisco 64,000 1,220
-----------
1,220
-----------
TOTAL SERVICES (COST $6,422) 6,708
-----------
--------------------------------------------------------------------------------
TECHNOLOGY -- 13.8%
APPLICATIONS SOFTWARE -- 3.0%
Citrix Systems* 16,400 329
Intuit* 26,300 1,499
Parametric* 154,400 1,689
-----------
3,517
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMPUTERS -- 0.1%
Micron Electronics* 15,100 $ 136
-----------
136
--------------------------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 2.0%
Quantum-DLT & Storage* 118,800 1,789
Sandisk* 8,800 587
-----------
2,376
--------------------------------------------------------------------------------
DECISION SUPPORT SOFTWARE -- 1.2%
Wind River Systems* 30,300 1,453
-----------
1,453
--------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 1.0%
Advanced Micro Devices* 47,400 1,120
-----------
1,120
--------------------------------------------------------------------------------
NETWORK SOFTWARE -- 1.1%
Networks Associates* 54,900 1,242
-----------
1,242
--------------------------------------------------------------------------------
NETWORKING PRODUCTS -- 0.2%
Cabletron Systems* 9,900 291
-----------
291
--------------------------------------------------------------------------------
OFFICE AUTOMATION & EQUIPMENT -- 1.0%
Pitney Bowes 28,500 1,124
-----------
1,124
--------------------------------------------------------------------------------
SEMICONDUCTOR COMPONENTS-INTEGRATED CIRCUITS -- 1.3%
Atmel* 62,000 942
Cypress Semiconductor* 13,500 561
-----------
1,503
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT -- 1.1%
Harris 47,100 1,339
-----------
1,339
--------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES -- 1.4%
Broadwing 38,900 994
RCN* 29,600 614
-----------
1,608
--------------------------------------------------------------------------------
WIRELESS EQUIPMENT -- 0.4%
Western Multiplex* 29,800 479
-----------
479
-----------
TOTAL TECHNOLOGY (COST $16,040) 16,188
-----------
--------------------------------------------------------------------------------
TRANSPORTATION -- 0.3%
TRANSPORTATION-TRUCK -- 0.3%
Swift Transportation* 25,400 332
-----------
332
-----------
TOTAL TRANSPORTATION (COST $422) 332
-----------
--------------------------------------------------------------------------------
[LOGO OMITTED] 36
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG MID-CAP VALUE FUND PBMCX
Shares/Face Market
Description Amount (000) Value (000)
--------------------------------------------------------------------------------
UTILITIES -- 6.0%
ELECTRIC-INTEGRATED -- 5.4%
Allete 48,200 $ 1,067
CMS Energy 12,600 339
Conectiv 41,300 738
Constellation Energy Group 31,900 1,587
DQE 20,600 827
DTE Energy 49,300 1,886
-----------
6,444
--------------------------------------------------------------------------------
GAS-DISTRIBUTION -- 0.6%
UGI 27,600 669
-----------
669
--------------------------------------------------------------------------------
TOTAL UTILITIES (COST $5,911) 7,113
-----------
TOTAL COMMON STOCK (COST $100,367) 107,767
-----------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 8.8%
Morgan Stanley
6.58%, dated 09/29/00, matures 10/02/00,
repurchase price $10,405,708
(collateralized by U.S. Government
Agency Instruments: total market
value $10,663,748) (A) $10,400 10,400
-----------
TOTAL REPURCHASE AGREEMENT (COST $10,400) 10,400
-----------
TOTAL INVESTMENTS -- 100.5% (COST $110,767) 118,167
-----------
--------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (0.5)%
TOTAL OTHER ASSETS AND LIABILITIES, NET (600)
-----------
--------------------------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 200
million shares -- $0.001 par value)
based on 7,775,724 outstanding shares
of common stock 108,325
Undistributed net investment income 163
Accumulated net realized gain on investments 1,679
Net unrealized appreciation on investments 7,400
-----------
TOTAL NET ASSETS -- 100.0% $ 117,567
===========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $15.12
======
* Non-Income Producing Security
(A) -- Tri-Party Repurchase Agreement
Cl -- Class
The accompanying notes are an integral part of the financial statements.
[LOGO OMITTED] 37
<PAGE>
THE PBHG FUNDS, INC.
PBHG SMALL CAP VALUE FUND (UNAUDITED)
PBHG SMALL CAP VALUE FUND PBSVX
INVESTMENT FOCUS
STYLE
Value Blend Growth
------------------------
Large
------------------------
Medium MARKET CAPITALIZATION
------------------------
X Small
------------------------
AVERAGE ANNUAL TOTAL RETURN 1
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
One Annualized Annualized
6 Year 3 Year Inception
Months 2 Return Return to Date 3
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PBHG Small Cap Value Fund 10.51% 54.40% 17.10% 28.14%
-----------------------------------------------------------------------------------
</TABLE>
COMPARISON OF CHANGE IN THE VALUE OF A
$10,000 INVESTMENT IN THE PBHG SMALL CAP
VALUE FUND, VERSUS THE RUSSELL 2000 INDEX,
RUSSELL 2000 VALUE INDEX AND THE LIPPER SMALL-CAP VALUE FUNDS AVERAGE
[LINE GRAPH OMITTED]
PLOT POINT FOLLOWS:
Lipper Small-Cap
PBHG Small Cap Russell Russell 2000 Value Funds
Value Fund 2000 Index 4 Value Index 5 Average 6
4/30/97 10,000 10,000 10,000 10,000
5/31/97 10,880 11,113 10,796 10,929
6/30/97 11,800 11,589 11,342 11,521
7/31/97 13,070 12,128 11,819 12,175
8/31/97 13,370 12,405 12,006 12,477
9/30/97 14,550 13,313 12,805 13,322
10/31/97 14,210 12,729 12,456 12,943
11/30/97 14,200 12,646 12,593 12,857
12/31/97 14,539 12,868 13,020 12,992
1/31/98 14,518 12,665 12,785 12,777
2/28/98 15,615 13,601 13,558 13,615
3/31/98 16,227 14,162 14,107 14,215
4/30/98 16,438 14,240 14,177 14,363
5/31/98 15,520 13,473 13,675 13,784
6/30/98 15,098 13,501 13,598 13,521
7/31/98 14,402 12,409 12,533 12,573
8/31/98 11,490 9,999 10,570 10,378
9/30/98 11,838 10,782 11,167 10,728
10/31/98 12,872 11,221 11,499 11,153
11/30/98 13,811 11,809 11,810 11,652
12/31/98 14,703 12,540 12,180 12,051
1/31/99 14,410 12,707 11,904 11,837
2/28/99 13,237 11,678 11,091 11,032
3/31/99 12,831 11,860 11,000 10,871
4/30/99 13,429 12,923 12,004 11,861
5/31/99 14,004 13,111 12,373 12,273
6/30/99 14,962 13,704 12,821 12,844
7/31/99 15,255 13,328 12,516 12,721
8/31/99 15,131 12,835 12,059 12,214
9/30/99 15,131 12,838 11,818 11,946
10/31/99 14,771 12,890 11,581 11,716
11/30/99 15,605 13,659 11,641 12,115
12/31/99 17,443 15,205 11,999 12,676
1/31/00 17,217 14,961 11,685 12,265
2/29/00 19,845 17,432 12,399 12,697
3/31/00 21,141 16,283 12,458 13,343
4/30/00 20,149 15,303 12,531 13,270
5/31/00 20,431 14,411 12,340 13,101
6/30/00 22,348 15,667 12,701 13,523
7/31/00 21,649 15,163 13,124 13,604
8/31/00 23,734 16,320 13,711 14,532
9/30/00 23,362 15,840 13,633 14,405
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. The Index is not
intended to imply the Fund's past or future performance.
5 The Russell 2000 Value Index is an unmanaged index that measures the
performance of those securities in the Russell 2000 Index with lower price to
book ratios and lower 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.
6 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 Average is not intended to imply the Fund's past or
future performance.
SECTOR WEIGHTINGS - AT SEPTEMBER 30, 2000
[PIE CHART OMITTED]
PLOT POINT FOLLOWS:
Basic Materials 3%
Consumer Cyclical 13%
Energy 12%
Financial 14%
Health Care 14%
Industrial 10%
Services 3%
Technology 16%
Transportation 3%
Utilities 3%
Cash 9%
% of Total Portfolio Investments
TOP TEN HOLDINGS - SEPTEMBER 30, 2000
North American Scientific 2.0%
Harman International 2.0%
CTS 1.8%
S3 1.7%
Teledyne Technologies 1.6%
Fair Issac & Company 1.6%
Hooper Holmes 1.5%
Acneilson 1.5%
Telecom Semiconductor 1.5%
Excelon 1.4%
------------------------------------------------------
% of Total Portfolio Investments 16.6%
[LOGO OMITTED] 38
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG SMALL CAP VALUE FUND PBSVX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMMON STOCK -- 90.5%
BASIC MATERIALS -- 2.7%
CHEMICALS-DIVERSIFIED -- 0.4%
Solutia 65,300 $ 743
-----------
743
--------------------------------------------------------------------------------
CHEMICALS-PLASTICS -- 0.4%
Polyone* 102,800 752
-----------
752
--------------------------------------------------------------------------------
CHEMICALS-SPECIALTY -- 1.9%
Crompton 233,700 1,841
Cytec* 58,000 1,939
W.R. Grace* 43,100 296
-----------
4,076
--------------------------------------------------------------------------------
OTHER-NON-FERROUS -- 0.0%
USEC 10,200 43
-----------
43
-----------
TOTAL BASIC MATERIALS (COST $6,227) 5,614
-----------
--------------------------------------------------------------------------------
CONSUMER CYCLICAL -- 12.7%
AUDIO/VIDEO PRODUCTS -- 2.0%
Harman International 105,400 4,121
-----------
4,121
--------------------------------------------------------------------------------
AUTO/TRUCK PARTS & EQUIPMENT-ORIGINAL -- 0.9%
Delco Remy International* 117,500 896
Visteon 60,000 908
-----------
1,804
--------------------------------------------------------------------------------
BUILDING-RESIDENTIAL/COMMERCIAL -- 0.3%
Centex 19,500 626
-----------
626
--------------------------------------------------------------------------------
CABLE TV -- 0.5%
Insight Communications* 61,400 975
-----------
975
--------------------------------------------------------------------------------
CASINO HOTELS -- 0.9%
Harrah's Entertainment* 72,500 1,994
-----------
1,994
--------------------------------------------------------------------------------
CASINO SERVICES -- 0.3%
International Game Technology 18,400 619
-----------
619
--------------------------------------------------------------------------------
DISTRIBUTION/WHOLESALE -- 1.1%
Bell Microproducts* 71,900 2,247
-----------
2,247
--------------------------------------------------------------------------------
HOME FURNISHINGS -- 0.8%
Furniture Brands International* 104,000 1,729
-----------
1,729
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
PUBLISHING-NEWSPAPERS -- 0.9%
Journal Register* 27,200 $ 452
Pulitzer 34,900 1,499
-----------
1,951
--------------------------------------------------------------------------------
RETAIL-APPAREL/SHOE -- 0.9%
Ann Taylor Stores* 44,000 1,691
Children's Place Stores* 11,200 288
-----------
1,979
--------------------------------------------------------------------------------
RETAIL-COMPUTER EQUIPMENT -- 0.3%
Electronics Boutique Holdings* 25,500 548
-----------
548
--------------------------------------------------------------------------------
RETAIL-CONSUMER ELECTRONICS -- 1.5%
Tweeter Home Entertainment Group* 14,000 508
Ultimate Electronics* 66,700 2,743
-----------
3,251
--------------------------------------------------------------------------------
RETAIL-RESTAURANTS -- 1.6%
Papa John's International* 64,100 1,607
Wendy's International 88,300 1,772
-----------
3,379
--------------------------------------------------------------------------------
TELEVISION -- 0.7%
Pegasus Communications* 29,600 1,430
-----------
1,430
-----------
TOTAL CONSUMER CYCLICAL (COST $22,766) 26,653
-----------
--------------------------------------------------------------------------------
CONSUMER NON-CYCLICAL -- 0.3%
CONSUMER PRODUCTS-MISCELLANEOUS -- 0.3%
Playtex Products* 54,100 639
-----------
639
-----------
TOTAL CONSUMER NON-CYCLICAL (COST $618) 639
------------
--------------------------------------------------------------------------------
ENERGY -- 12.3%
OIL COMPANIES-EXPLORATION & PRODUCTION -- 6.7%
Barrett Resources* 34,600 1,308
Comstock Resources* 50,300 572
Devon Energy 10,548 634
EOG Resources 14,500 564
Forest Oil* 115,800 1,875
Louis Dreyfus Natural Gas* 62,300 2,469
Newfield Exploration* 15,500 724
Noble Affiliates 57,400 2,131
Ocean Energy* 88,900 1,372
Unit* 68,900 1,016
Vintage Petroleum 70,300 1,599
-----------
14,264
--------------------------------------------------------------------------------
OIL-FIELD SERVICES -- 1.4%
Friede Goldman Halter* 222,900 1,574
Hanover Compressor* 41,000 1,350
-----------
2,924
--------------------------------------------------------------------------------
[LOGO OMITTED] 39
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
--------------------------------------------------------------------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG SMALL CAP VALUE FUND PBSVX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
OIL REFINING & MARKETING -- 1.3%
Tesoro Petroleum* 145,600 $ 1,447
Valero Energy 34,800 1,225
-----------
2,672
--------------------------------------------------------------------------------
OIL & GAS DRILLING -- 2.1%
Atwood Oceanic* 35,400 1,476
Key Energy Services* 103,900 1,020
Patterson Energy* 16,200 557
Precision Drilling* 3,600 128
Pride International* 43,200 1,145
-----------
4,326
--------------------------------------------------------------------------------
PIPELINES -- 0.8%
Kinder Morgan 39,900 1,633
-----------
1,633
-----------
TOTAL ENERGY (COST $20,831) 25,819
-----------
--------------------------------------------------------------------------------
FINANCIAL -- 14.2%
COMMERCIAL BANKS-EASTERN US -- 0.7%
Banknorth Group 20,800 372
Commercial Bank of New York 8,400 113
Mercantile 25,700 933
-----------
1,418
--------------------------------------------------------------------------------
COMMERCIAL BANKS-WESTERN US -- 1.9%
Bancwest 132,400 2,574
City National 39,000 1,506
-----------
4,080
--------------------------------------------------------------------------------
FINANCE-INVESTMENT BANKER/BROKEr -- 0.3%
Morgan Keegan 36,100 632
-----------
632
--------------------------------------------------------------------------------
FINANCE-MORTGAGE LOAN/BANKER -- 0.2%
Doral Financial 28,600 463
-----------
463
--------------------------------------------------------------------------------
INTERNET BROKER -- 0.3%
WIT Soundview Group* 73,100 658
-----------
658
--------------------------------------------------------------------------------
INVESTMENT MANAGEMENT/ADVISORY SERVICES -- 1.5%
Affiliated Managers Group* 46,200 2,631
Waddell & Reed Financial, Cl A 21,000 651
-----------
3,282
--------------------------------------------------------------------------------
LIFE/HEALTH INSURANCE -- 1.8%
Liberty Financial 36,100 848
Mony Group 48,400 1,930
Torchmark 34,300 954
-----------
3,732
--------------------------------------------------------------------------------
PROPERTY/CASUALTY INSURANCE -- 1.4%
Fidelity National Financial 69,400 1,718
First American Financial 31,100 649
Trenwick Group 25,700 488
-----------
2,855
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT/SERVICES -- 0.3%
Trammell Crow* 43,500 $ 653
-----------
653
--------------------------------------------------------------------------------
REINSURANCE -- 0.6%
Annuity & Life 55,100 1,329
-----------
1,329
--------------------------------------------------------------------------------
REITS-OFFICE PROPERTY -- 0.4%
Mack Cali Realty 29,300 826
-----------
826
--------------------------------------------------------------------------------
REITS-SHOPPING CENTERS -- 0.5%
JP Realty 56,200 1,015
-----------
1,015
--------------------------------------------------------------------------------
S&L/THRIFTS-CENTRAL US -- 1.1%
Bank United, Cl A 20,800 1,054
Commercial Federal 34,900 667
First Federal Bancshares* 45,400 582
-----------
2,303
--------------------------------------------------------------------------------
S&L/THRIFTS-EASTERN US -- 2.0%
Berkshire Hills Bancorp* 120,300 1,729
Dime Bancorp 111,400 2,402
-----------
4,131
--------------------------------------------------------------------------------
S&L/THRIFTS-WESTERN US -- 1.2%
Golden State Bancorp* 93,400 2,206
Washington Federal 16,300 371
-----------
2,577
-----------
TOTAL FINANCIAL (COST $26,208) 29,954
-----------
--------------------------------------------------------------------------------
HEALTH CARE -- 13.8%
DISPOSABLE MEDICAL PRODUCTS -- 0.4%
Bard (C.R.) 18,900 799
-----------
799
--------------------------------------------------------------------------------
HEALTH CARE COST CONTAINMENT -- 1.4%
Hooper Holmes 341,800 3,251
-----------
3,251
--------------------------------------------------------------------------------
MEDICAL-BIOMEDICAL/GENETIC -- 1.0%
Aclara Biosciences* 10,700 325
Arena Pharmaceuticals* 12,300 529
Cell Genesys* 21,500 645
Inhale Therapeutic Systems* 9,400 530
-----------
2,029
--------------------------------------------------------------------------------
MEDICAL-DRUGS -- 2.5%
Cephalon* 19,400 941
Dura Pharmaceuticals* 60,700 2,147
Galen Holdings ADR* 11,688 532
Medicis Pharmaceuticals, Cl A* 10,800 664
Pain Therapeutics* 20,500 406
Pharmacopeia* 20,700 528
-----------
5,218
--------------------------------------------------------------------------------
[LOGO OMITTED] 40
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG SMALL CAP VALUE FUND PBSVX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
MEDICAL-GENERIC DRUGS -- 0.4%
Alpharma 13,200 $ 807
-----------
807
--------------------------------------------------------------------------------
MEDICAL-HMO -- 0.7%
Trigon Healthcare* 26,700 1,403
-----------
1,403
--------------------------------------------------------------------------------
MEDICAL-HOSPITALS -- 0.1%
Triad Hospitals* 9,500 279
-----------
279
--------------------------------------------------------------------------------
MEDICAL-NURSING HOMES -- 0.7%
Beverly Enterprises* 258,800 1,537
-----------
1,537
--------------------------------------------------------------------------------
MEDICAL-OUTPATIENT/HOME MEDICAL -- 0.3%
Lincare Holdings* 23,000 660
-----------
660
--------------------------------------------------------------------------------
MEDICAL LABS & TESTING SERVICES -- 0.2%
Covance* 41,900 343
-----------
343
--------------------------------------------------------------------------------
MEDICAL PRODUCTS -- 3.4%
Haemonetics* 103,500 2,639
North American Scientific* 132,200 4,197
Vital Signs 9,000 239
-----------
7,075
--------------------------------------------------------------------------------
OPTICAL SUPPLIES -- 0.4%
Staar Surgical* 52,000 900
-----------
900
--------------------------------------------------------------------------------
PHARMACY SERVICES -- 1.1%
Omnicare 144,300 2,327
-----------
2,327
--------------------------------------------------------------------------------
THERAPEUTICS -- 1.2%
Inspire Pharmaceuticals* 43,400 1,302
Tularik* 23,200 765
United Therapeutics* 4,200 367
-----------
2,434
-----------
TOTAL HEALTH CARE (COST $23,506) 29,062
-----------
--------------------------------------------------------------------------------
INDUSTRIAL -- 9.6%
AEROSPACE/DEFENSE -- 1.6%
Teledyne Technologies* 115,100 3,352
-----------
3,352
--------------------------------------------------------------------------------
BUILDING PRODUCTS-CEMENT/AGGREGATE -- 0.3%
Texas Industries 20,900 666
-----------
666
--------------------------------------------------------------------------------
CERAMIC PRODUCTS -- 0.9%
Coorstek* 52,200 1,997
-----------
1,997
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
CIRCUIT BOARDS -- 1.0%
Manufacturers Services* 151,200 $ 1,796
SMTC* 11,200 241
-----------
2,037
--------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING OPERATIONS -- 0.9%
ITT Industries 56,500 1,833
-----------
1,833
--------------------------------------------------------------------------------
ElECTRONIC COMPONENTS-MISCELLANEOUS -- 3.2%
Act Manufacturing* 9,100 480
CTS 76,100 3,853
Kent Electronics* 98,600 2,354
-----------
6,687
--------------------------------------------------------------------------------
ELECTRONIC MEASURING INSTRUMENTS -- 0.2%
Trimble Navigation Limited* 23,300 521
-----------
521
--------------------------------------------------------------------------------
HAZARDOUS WASTE DISPOSAL -- 0.3%
Stericycle* 22,000 539
-----------
539
--------------------------------------------------------------------------------
METAL PROCESSORS & FABRICATORS -- 0.3%
Wolverine Tube* 45,500 677
-----------
677
--------------------------------------------------------------------------------
MISCELLANEOUS MANUFACTURING -- 0.7%
Aptargroup* 58,200 1,393
-----------
1,393
--------------------------------------------------------------------------------
NON-HAZARDOUS WASTE DISPOSAL -- 0.1%
Waste Connections* 5,100 131
-----------
131
--------------------------------------------------------------------------------
POWER CONVERSION/SUPPLY EQUIPMENT -- 0.1%
Applied Science & Technology* 21,200 313
-----------
313
-----------
TOTAL INDUSTRIAL (COST $19,491) 20,146
-----------
--------------------------------------------------------------------------------
SERVICES-- 2.8%
COMMERCIAL SERVICES -- 1.5%
Acnielson* 134,700 3,207
-----------
3,207
--------------------------------------------------------------------------------
COMPUTER SERVICES -- 0.5%
Tanning Technology* 74,400 1,022
-----------
1,022
--------------------------------------------------------------------------------
CONSULTING SERVICES -- 0.4%
Comdisco 40,700 776
-----------
776
--------------------------------------------------------------------------------
RESEARCH & DEVELOPMENT -- 0.4%
Pharmaceutical Product Development* 35,200 935
-----------
935
-----------
TOTAL SERVICES (COST $6,523) 5,940
-----------
--------------------------------------------------------------------------------
[LOGO OMITTED] 41
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG SMALL CAP VALUE FUND PBSVX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
TECHNOLOGY -- 16.5%
APPLICATIONS SOFTWARE -- 0.6%
Parametric Technology* 76,800 $ 840
Sonic Foundry* 43,300 384
-----------
1,224
--------------------------------------------------------------------------------
CELLULAR TELECOMMUNICATIONS -- 0.1%
Alamosa PCS Holdings* 11,600 188
-----------
188
--------------------------------------------------------------------------------
COMMUNICATIONS SOFTWARE -- 0.3%
Avid Technology* 44,700 626
-----------
626
--------------------------------------------------------------------------------
COMPUTER DATA SECURITY -- 0.7%
Axent Technologies* 73,000 1,574
-----------
1,574
--------------------------------------------------------------------------------
COMPUTERS -- 0.1%
Micron Electronics* 30,200 272
-----------
272
--------------------------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 0.6%
Sandisk* 7,000 467
Simple Technology* 41,700 404
Storage Technology* 30,000 407
-----------
1,278
--------------------------------------------------------------------------------
COMPUTERS-PERIPHERAL EQUIPMENT -- 2.3%
Avocent* 15,136 834
Mobility Electronics* 39,800 363
S3* 348,400 3,593
-----------
4,790
--------------------------------------------------------------------------------
DATA PROCESSING/MANAGEMENT -- 3.2%
Acxiom* 14,300 454
Excelon* 239,100 2,959
Fair Isaac & Company 77,500 3,308
-----------
6,721
--------------------------------------------------------------------------------
DECISION SUPPORT SOFTWARE -- 0.1%
Accrue Software* 24,500 292
-----------
292
--------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 0.9%
Hi / Fn* 19,400 1,322
Zoran* 11,000 536
-----------
1,858
--------------------------------------------------------------------------------
ENTERPRISE SOFTWARE/SERVICES -- 0.4%
Hyperion Solutions* 32,400 838
-----------
838
--------------------------------------------------------------------------------
INTERNET SOFTWARE -- 0.2%
Ravisent Technologies* 117,700 331
-----------
331
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
NETWORKING PRODUCTS -- 0.9%
Adaptec* 43,500 $ 870
MMC Networks* 8,000 1,012
-----------
1,882
--------------------------------------------------------------------------------
SEMICONDUCTOR COMPONENTS-INTEGRATED CIRCUITS -- 1.5%
Telcom Semiconductor* 210,900 3,137
-----------
3,137
--------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT -- 0.5%
Genus* 59,900 228
Photronics* 37,400 816
-----------
1,044
--------------------------------------------------------------------------------
SOFTWARE TOOLS -- 0.5%
Cysive* 146,500 980
-----------
980
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT -- 0.8%
Commscope* 50,000 1,225
MCK Communications* 23,700 536
-----------
1,761
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT-FIBER OPTICS -- 0.1%
Exfo Electro-Optical Engineering* 6,800 296
-----------
296
--------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES -- 1.9%
Adelphia Business Solutions* 38,900 460
Latitude Communications* 75,700 587
RCN* 52,400 1,087
Savvis Communications* 208,400 1,876
-----------
4,010
--------------------------------------------------------------------------------
WIRELESS EQUIPMENT -- 0.8%
Carrier Access* 27,300 541
Glenayre Technologies* 29,400 320
Western Multiplex* 49,600 797
-----------
1,658
-----------
TOTAL TECHNOLOGY (COST $35,710) 34,760
-----------
--------------------------------------------------------------------------------
TRANSPORTATION -- 2.9%
AIRLINES -- 0.3%
Midway Airlines* 130,350 692
-----------
692
--------------------------------------------------------------------------------
TRANSPORTATION-AIR FREIGHT -- 0.6%
EGL* 43,100 1,304
-----------
1,304
--------------------------------------------------------------------------------
[LOGO OMITTED] 42
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG SMALL CAP VALUE FUND PBSVX
Shares/Face Market
Description Amount (000) Value (000)
--------------------------------------------------------------------------------
TRANSPORTATION-TRUCK -- 2.0%
American Freightways* 12,500 $ 198
Covenant Transportation* 80,100 746
Hunt (J.B.) Transportation Services 52,700 672
Landstar Systems* 17,600 785
Swift Transportation* 45,300 592
US Xpress Enterprises* 89,500 565
Usfreightways 26,100 592
-----------
4,150
-----------
TOTAL TRANSPORTATION (COST $7,416) 6,146
-----------
--------------------------------------------------------------------------------
UTILITIES -- 2.7%
ELECTRIC-INTEGRATED -- 1.7%
CMS Energy 27,400 738
Idacorp 18,700 865
Western Resources 90,700 1,961
-----------
3,564
--------------------------------------------------------------------------------
GAS-DISTRIBUTION -- 1.0%
Atmos Energy 29,900 617
Semco Energy 28,800 443
UGI 46,800 1,135
-----------
2,195
-----------
TOTAL UTILITIES (COST $5,079) 5,759
-----------
TOTAL COMMON STOCK ($174,375) 190,492
-----------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 9.6%
Morgan Stanley
6.58%, dated 09/29/00, matures 10/02/00,
repurchase price $20,105,278 (collateralized
by U.S. Government Agency Instruments:
total market value $20,610,050) (A) $20,094 20,094
-----------
TOTAL REPURCHASE AGREEMENT (COST $20,094) 20,094
-----------
TOTAL INVESTMENTS-- 100.1% (COST $194,469) 210,586
-----------
--------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (0.1)%
TOTAL OTHER ASSETS AND LIABILITIES, NET (126)
-----------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 200
million shares -- $0.001 par value)
based on 10,159,372 outstanding shares
of common stock $ 184,868
Accumulated net investment loss (98)
Accumulated net realized gain on investments 9,573
Net unrealized appreciation on investments 16,117
-----------
TOTAL NET ASSETS -- 100.0% $ 210,460
===========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $20.72
======
* 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.
[LOGO OMITTED] 43
<PAGE>
THE PBHG FUNDS, INC.
PBHG FOCUSED VALUE FUND (UNAUDITED)
PBHG FOCUSED VALUE FUND PBFVX
INVESTMENT FOCUS
STYLE
Value Blend Growth
------------------------
X Large
------------------------
Medium MARKET CAPITALIZATION
------------------------
Small
------------------------
AVERAGE ANNUAL TOTAL RETURN 1
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
One Annualized
6 Year Inception
Months 2 Return to Date 3
----------------------------------------------------------------------------------
<S> <C> <C> <C>
PBHG Focused Value Fund (2.59)% 60.48% 46.60%
----------------------------------------------------------------------------------
</TABLE>
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 CORE FUNDS AVERAGE
[LINE GRAPH OMITTED]
PLOT POINT FOLLOWS:
Lipper
PBHG Focused Multi-Cap Core
Value Fund S&P 500 Index4 Funds Average5
2/28/99 10,000 10,000 10,000
3/31/99 10,205 10,400 10,333
4/30/99 10,127 10,803 10,795
5/31/99 10,517 10,548 10,662
6/30/99 11,395 11,133 11,225
7/31/99 11,620 10,786 10,966
8/31/99 11,639 10,732 10,771
9/30/99 11,717 10,438 10,525
10/31/99 12,068 11,098 11,026
11/30/99 12,976 11,324 11,421
12/31/99 14,903 11,991 12,286
1/31/00 16,176 11,388 11,854
2/29/00 16,854 11,173 12,193
3/31/00 19,304 12,266 13,029
4/30/00 17,500 11,897 12,581
5/31/00 17,636 11,653 12,253
6/30/00 17,949 11,940 12,665
7/31/00 17,584 11,753 12,464
8/31/00 18,783 12,483 13,408
9/30/00 18,804 11,824 12,856
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 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 unmanaged and 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 Multi-Cap Core Funds Average represents the average performance of all
mutual funds classified by Lipper, Inc. in the Multi-Cap Core 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 Average is not intended to imply the Fund's past or future
performance.
SECTOR WEIGHTINGS - AT SEPTEMBER 30, 2000
[PIE CHART OMITTED]
PLOT POINT FOLLOWS:
Basic Materials 5%
Consumer Cyclical 13%
Consumer Non-Cyclical 3%
Energy 5%
Financial 19%
Health Care 11%
Services 8%
Technology 22%
Utilities 3%
Cash 11%
% of Total Portfolio Investments
TOP TEN HOLDINGS - SEPTEMBER 30, 2000
Comcast Special, Cl A 5.0%
Bristol-Myers Squibb 5.0%
Palm 5.0%
Federal Home Loan Mortgage 4.8%
Fleet Boston Financial 4.2%
Compaq Computers 3.8%
John Hancock Financial 3.7%
Microsoft 3.7%
Quintiles Transnational 3.5%
Comdisco 3.4%
------------------------------------------------------
% of Total Portfolio Investments 42.1%
[LOGO OMITTED] 44
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG FOCUSED VALUE FUND PBFVX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMMON STOCK -- 94.2%
BASIC MATERIALS -- 5.4%
CHEMICALS-DIVERSIFIED -- 3.4%
Dow Chemical 60,000 $ 1,496
-----------
1,496
--------------------------------------------------------------------------------
PAPER & RELATED PRODUCTS -- 2.0%
International Paper 30,000 861
-----------
861
-----------
TOTAL BASIC MATERIALS (COST $2,325) 2,357
-----------
--------------------------------------------------------------------------------
CONSUMER CYCLICAL -- 13.3%
APPLIANCES -- 1.9%
Maytag 26,100 811
-----------
811
--------------------------------------------------------------------------------
BROADCAST SERVICE/PROGRAM -- 2.6%
AT&T-Liberty Media, Cl A* 41,800 752
Unitedglobalcom, Cl A* 12,300 369
-----------
1,121
--------------------------------------------------------------------------------
CABLE TV -- 5.3%
Comcast Special, Cl A* 56,200 2,301
------------
2,301
--------------------------------------------------------------------------------
MULTIMEDIA -- 3.5%
Gannett 28,400 1,505
-----------
1,505
-----------
TOTAL CONSUMER CYCLICAL (COST $6,256) 5,738
-----------
--------------------------------------------------------------------------------
CONSUMER NON-CYCLICAL -- 3.2%
FOOD-RETAIL -- 3.2%
Kroger* 61,100 1,379
-----------
1,379
-----------
TOTAL CONSUMER NON-CYCLICAL (COST $1,252) 1,379
-----------
--------------------------------------------------------------------------------
ENERGY -- 5.6%
OIL COMPANY-EXPLORATION & PRODUCTION -- 1.7%
EOG Resources 19,300 750
-----------
750
--------------------------------------------------------------------------------
OIL FIELD MACHINERY & EQUIPMENT -- 0.9%
Grant Prideco* 18,700 410
-----------
410
--------------------------------------------------------------------------------
OIL & GAS DRILLING -- 3.0%
Global Marine* 41,800 1,291
-----------
1,291
-----------
TOTAL ENERGY (COST $1,932) 2,451
-----------
--------------------------------------------------------------------------------
FINANCIAL -- 20.2%
FINANCE-MORTGAGE LOAN/BANKER -- 5.1%
Federal Home Loan Mortgage 41,000 2,217
-----------
2,217
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
LIFE/HEALTH INSURANCE -- 3.8%
John Hancock Financial* 63,000 $ 1,693
-----------
1,693
--------------------------------------------------------------------------------
MONEY CENTER BANKS -- 1.6%
Chase Manhattan 15,000 693
-----------
693
--------------------------------------------------------------------------------
MULTI-LINE INSURANCE -- 1.8%
Allstate 22,000 764
-----------
764
--------------------------------------------------------------------------------
S&L/THRIFTS-WESTERN US -- 3.5%
Washington Mutual 38,000 1,513
-----------
1,513
--------------------------------------------------------------------------------
SUPER-REGIONAL BANKS-US -- 4.4%
Fleet Boston Financial 49,100 1,915
-----------
1,915
-----------
TOTAL FINANCIAL (COST $7,367) 8,795
-----------
--------------------------------------------------------------------------------
HEALTH CARE -- 11.9%
MEDICAL PRODUCTS -- 3.1%
North American Scientific* 42,500 1,349
-----------
1,349
--------------------------------------------------------------------------------
MEDICAL-DRUGS -- 8.8%
Abbott Labs 32,000 1,522
Bristol-Myers Squibb 40,000 2,285
-----------
3,807
-----------
TOTAL HEALTH CARE (COST $4,647) 5,156
-----------
--------------------------------------------------------------------------------
SERVICES -- 8.4%
COMMERCIAL SERVICE-FINANCE -- 1.2%
Block (H&R) 13,700 508
-----------
508
--------------------------------------------------------------------------------
COMMERCIAL SERVICES -- 3.6%
Quintiles Transnational* 100,300 1,599
-----------
1,599
--------------------------------------------------------------------------------
CONSULTING SERVICES -- 3.6%
Comdisco 81,700 1,557
-----------
1,557
-----------
TOTAL SERVICES (COST $3,968) 3,664
-----------
--------------------------------------------------------------------------------
TECHNOLOGY -- 22.8%
APPLICATIONS SOFTWARE -- 6.6%
Microsoft* 28,000 1,689
Parametric Technology* 110,400 1,207
-----------
2,896
--------------------------------------------------------------------------------
COMPUTERS -- 4.1%
Compaq Computers 63,800 1,760
-----------
1,760
--------------------------------------------------------------------------------
[LOGO OMITTED] 45
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG FOCUSED VALUE FUND PBFVX
Shares/Face Market
Description Amount (000) Value (000)
--------------------------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 0.2%
Simple Technology* 8,400 $ 81
-----------
81
--------------------------------------------------------------------------------
DATA PROCESSING/MANAGEMENT -- 0.6%
Excelon* 20,000 248
-----------
248
--------------------------------------------------------------------------------
INTERNET SOFTWARE -- 1.2%
Internap Network Services* 15,000 485
Ravisent Technologies* 20,000 56
-----------
541
--------------------------------------------------------------------------------
SATELLITE TELECOMMUNICATIONS -- 1.3%
General Motors, Cl H 15,000 558
-----------
558
--------------------------------------------------------------------------------
SEMICONDUCTOR COMPONENTS-INTEGRATED CIRCUITS -- 0.5%
Cypress Semiconductor* 5,200 216
-----------
216
--------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES -- 3.1%
McLeodUSA* 93,000 1,331
-----------
1,331
--------------------------------------------------------------------------------
WIRELESS EQUIPMENT -- 5.2%
Palm* 43,000 2,276
-----------
2,276
-----------
TOTAL TECHNOLOGY (COST $10,003) 9,907
-----------
--------------------------------------------------------------------------------
UTILITIES -- 3.4%
ELECTRIC-INTEGRATED -- 2.6%
Southern 35,000 1,135
-----------
1,135
--------------------------------------------------------------------------------
INDEPENDENT POWER PRODUCER -- 0.8%
Southern Energy* 11,000 345
-----------
345
-----------
TOTAL UTILITIES (COST $1,103) 1,480
-----------
TOTAL COMMON STOCK (COST $38,853) 40,927
-----------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 11.1%
J.P. Morgan
6.60%, dated 09/29/00, matures 10/02/00,
repurchase price $4,833,264
(collateralized by U.S. Government
Agency Instruments: total market value
$4,927,220) (A) $4,830 4,830
-----------
TOTAL REPURCHASE AGREEMENT (COST $4,830) 4,830
-----------
TOTAL INVESTMENTS-- 105.3% (COST $43,683) 45,757
-----------
--------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (5.3)%
Payable for Investment Securities Purchased (3,589)
Other Assets and Liabilities, Net 1,266
-----------
TOTAL OTHER ASSETS AND LIABILITIES, NET (2,323)
-----------
--------------------------------------------------------------------------------
Market
Description Value (000)
--------------------------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 200
million shares -- $0.001 par value)
based on 2,409,473 outstanding shares
of common stock $ 40,305
Undistributed net investment income 41
Accumulated net realized gain on investments 1,014
Net unrealized appreciation on investments 2,074
-----------
TOTAL NET ASSETS-- 100.0% $ 43,434
===========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $18.03
======
* Non-Income Producing Security
(A) -- Tri-Party Repurchase Agreement
Cl -- Class
The accompanying notes are an integral part of the financial statements.
[LOGO OMITTED] 46
<PAGE>
THE PBHG FUNDS, INC.
PBHG INTERNATIONAL FUND (UNAUDITED)
PBHG INTERNATIONAL FUND PBHIX
INVESTMENT FOCUS
STYLE
Value Blend Growth
------------------------
X Large
------------------------
Medium MARKET CAPITALIZATION
------------------------
Small
------------------------
AVERAGE ANNUAL TOTAL RETURN 1
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
One Annualized Annualized Annualized
6 Year 3 Year 5 Year Inception
Months 2 Return Return Return to Date 3
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PBHG International Fund (13.21)% 0.83% 3.16% 7.62% 5.42%
---------------------------------------------------------------------------------------------
</TABLE>
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]
PLOT POINT FOLLOWS:
PBHG International MSCI Lipper International
Fund EAFE Index 4 Funds Average 5
6/30/94 10,000 10,000 10,000
7/31/94 10,060 10,097 10,276
8/31/94 10,241 10,336 10,573
9/30/94 10,040 10,011 10,316
10/31/94 10,070 10,344 10,518
11/30/94 9,679 9,847 10,011
12/31/94 9,829 9,909 9,917
1/31/95 9,163 9,528 9,439
2/28/95 8,992 9,501 9,455
3/31/95 9,204 10,094 9,768
4/30/95 9,486 10,474 10,088
5/31/95 9,355 10,349 10,176
6/30/95 9,506 10,167 10,178
7/31/95 9,748 10,800 10,726
8/31/95 9,536 10,388 10,520
9/30/95 9,698 10,591 10,679
10/31/95 9,436 10,306 10,470
11/30/95 9,657 10,593 10,590
12/31/95 10,030 11,020 10,906
1/31/96 10,383 11,065 11,152
2/29/96 10,424 11,103 11,201
3/31/96 10,635 11,338 11,393
4/30/96 10,958 11,668 11,754
5/31/96 10,887 11,453 11,730
6/30/96 10,928 11,517 11,810
7/31/96 10,464 11,181 11,378
8/31/96 10,605 11,206 11,509
9/30/96 10,837 11,504 11,760
10/31/96 10,807 11,386 11,691
11/30/96 11,270 11,840 12,202
12/31/96 11,301 11,687 12,252
1/31/97 11,291 11,278 12,220
2/28/97 11,341 11,463 12,388
3/31/97 11,351 11,504 12,423
4/30/97 11,401 11,565 12,457
5/31/97 12,107 12,318 13,196
6/30/97 12,762 12,997 13,814
7/31/97 13,045 13,208 14,207
8/31/97 11,936 12,221 13,184
9/30/97 12,752 12,906 14,007
10/31/97 11,694 11,914 12,941
11/30/97 11,583 11,792 12,832
12/31/97 11,694 11,895 12,939
1/31/98 12,192 12,439 13,248
2/28/98 12,901 13,238 14,127
3/31/98 13,333 13,645 14,853
4/30/98 13,355 13,753 15,052
5/31/98 13,189 13,686 15,070
6/30/98 13,023 13,790 14,952
7/31/98 13,565 13,930 15,172
8/31/98 11,749 12,204 13,015
9/30/98 11,428 11,830 12,550
10/31/98 12,347 13,063 13,487
11/30/98 13,067 13,732 14,186
12/31/98 13,183 14,274 14,623
1/31/99 13,242 14,232 14,747
2/28/99 13,020 13,893 14,361
3/31/99 13,522 14,472 14,864
4/30/99 14,023 15,059 15,549
5/31/99 13,114 14,283 14,914
6/30/99 13,638 14,840 15,694
7/31/99 13,650 15,281 16,179
8/31/99 13,778 15,337 16,302
9/30/99 13,883 15,491 16,369
10/31/99 14,151 16,072 17,003
11/30/99 15,188 16,630 18,329
12/31/99 16,678 18,123 20,541
1/31/00 15,332 16,971 19,391
2/29/00 15,594 17,428 20,626
3/31/00 16,129 18,104 20,758
4/30/00 15,244 17,151 19,456
5/31/00 14,634 16,732 18,828
6/30/00 14,920 17,386 19,662
7/31/00 14,459 16,657 18,964
8/31/00 14,808 16,802 19,277
9/30/00 13,998 15,984 18,180
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 Average is not intended to imply the Fund's past or
future performance.
COUNTRY WEIGHTINGS - AT SEPTEMBER 30, 2000
[PIE CHART OMITTED]
PLOT POINTS FOLLOWS:
Argentina 2%
Australia 2%
Belgium 1%
Brazil 5%
Denmark 2%
Finland 2%
France 8%
Germany 8%
Hong Kong 2%
Hungary 1%
Ireland 2%
Italy 5%
Japan 26%
Mexico 1%
Netherlands 9%
Singapore 1%
Spain 4%
Sweden 3%
Switzerland 3%
United Kingdom 13%
TOP TEN HOLDINGS - SEPTEMBER 30, 2000
Telenorte Leste Part ADR 3.0%
Banco Frances ADR 2.2%
Copel Paranaese Energy ADR 2.2%
Telecom Italia 2.1%
Siemens 2.1%
Dresdner Bank AG 2.0%
Mitsui 2.0%
Kurita Water 1.9%
Unilever Cert 1.9%
Vivendi 1.9%
Marschollek Lauten 1.9%
------------------------------------------------------
% of Total Portfolio Investments 23.2%
[LOGO OMITTED] 47
<PAGE>
THE PBHG FUNDS, INC.
SCHEDULE OF INVESTMENTS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG INTERNATIONAL FUND PBHIX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMMON STOCK -- 90.0%
ARGENTINA -- 2.0%
Banco Frances ADR* 9,000 $ 187
-----------
187
--------------------------------------------------------------------------------
AUSTRALIA -- 0.7%
National Australia Bank* 5,000 69
-----------
69
--------------------------------------------------------------------------------
BELGIUM -- 1.2%
Fortis B* 3,521 108
-----------
108
--------------------------------------------------------------------------------
BRAZIL -- 4.7%
Copel Paranaese Energy ADR* 21,000 186
Telenorte Leste Part ADR* 11,170 255
-----------
441
--------------------------------------------------------------------------------
DENMARK -- 1.6%
Carlsberg* 2,044 85
Novo-Nordisk* 313 69
-----------
154
--------------------------------------------------------------------------------
FINLAND -- 2.2%
Nokia Oyj 3,590 145
Sonera 2,298 58
-----------
203
--------------------------------------------------------------------------------
FRANCE -- 6.9%
Alcatel 1,135 73
BNP Paribas 1,506 133
Cap Gemini* 729 137
Total Fina* 920 135
Vivendi* 2,204 164
-----------
642
--------------------------------------------------------------------------------
GERMANY -- 5.7%
Bayer* 2,979 110
Dresdner Bank AG* 3,927 171
Epcos AG* 901 73
Siemens* 1,379 177
-----------
531
--------------------------------------------------------------------------------
HONG KONG -- 1.9%
Cheung Kong* 7,000 85
Sun Hung Kai Properties* 10,000 94
-----------
179
--------------------------------------------------------------------------------
HUNGARY -- 0.8%
Matav* 3,000 71
-----------
71
--------------------------------------------------------------------------------
IRELAND -- 1.7%
Allied Irish Bank* 14,586 157
-----------
157
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
ITALY -- 4.6%
ENI* 18,786 $ 99
RAS* 10,821 142
Telecom Italia* 17,303 184
-----------
425
--------------------------------------------------------------------------------
JAPAN -- 24.0%
Fuji Machine Manufacturing* 3,000 107
Fuji Photo Film* 4,000 134
Kurita Water* 9,000 166
Matsushita Communications* 1,000 135
Minebea* 13,000 152
Mitsui* 27,000 169
Murata Manufacturing* 1,000 138
Nomura Securities 7,000 152
NTT Docomo* 5 143
Omron* 5,000 132
Rohm* 400 110
Secom* 2,000 161
Shin-Etsu Chemical* 3,000 126
Sumitomo Bank* 12,000 152
Uni Charm* 2,000 107
Yamanouchi Pharmaceutical* 3,000 144
-----------
2,228
--------------------------------------------------------------------------------
MEXICO -- 1.3%
Tubos Acero Mexico ADR* 7,000 117
-----------
117
--------------------------------------------------------------------------------
NETHERLANDS -- 7.4%
Aegon* 3,285 124
Elsevier* 12,937 145
Equant ADR* 1,369 50
Philips Electronics 2,689 116
Unilever Cert* 3,397 165
Vedior* 6,068 88
-----------
688
--------------------------------------------------------------------------------
NEW ZEALAND -- 0.7%
Telecom Corp of N.Z.* 25,100 62
-----------
62
--------------------------------------------------------------------------------
SINGAPORE -- 1.2%
Overseas Chinese Bank* 7,000 45
Singapore Press Holdings* 4,900 73
-----------
118
--------------------------------------------------------------------------------
SPAIN -- 3.8%
Gas Natural SDG* 5,255 88
Telefonica 7,701 153
Union Electrica Fenosa* 6,078 109
-----------
350
--------------------------------------------------------------------------------
SWEDEN -- 3.2%
Ericsson Ser B* 10,267 156
SKF Ser B* 10,701 139
-----------
295
--------------------------------------------------------------------------------
[LOGO OMITTED] 48
<PAGE>
THE PBHG FUNDS, INC.
SCHEDULE OF INVESTMENTS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG INTERNATIONAL FUND PBHIX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
SWITZERLAND -- 2.6%
Novartis* 33 $ 51
Roche* 9 79
Zurich Allied 237 110
-----------
240
--------------------------------------------------------------------------------
UNITED KINGDOM -- 11.8%
Abbey National* 4,100 55
Airtours 14,000 45
Autonomy* 800 45
Barclays 1,500 42
Bass* 6,500 64
Bp Amoco* 12,100 108
British Telecom 7,400 78
Granada Media* 6,000 40
Great Universal Stores* 7,300 46
Invensys 15,700 34
Laporte New B* 62,100 1
Man Group* 7,600 58
Peninsular & Oriental* 7,000 62
Rio Tinto* 4,300 62
Royal Bank of Scotland* 5,200 110
Smithkline Beecham* 4,700 64
Telwest Communications* 12,400 24
Vodafone Group* 41,900 156
-----------
1,094
-----------
TOTAL COMMON STOCK (COST $8,167) 8,359
-----------
--------------------------------------------------------------------------------
PREFERRED STOCK -- 2.5%
AUSTRALIA -- 0.8%
News Corporation* 6,000 72
-----------
72
--------------------------------------------------------------------------------
GERMANY -- 1.7%
Marschollek Lauten* 1,092 163
-----------
163
-----------
TOTAL PREFERRED STOCK (COST $98) 235
-----------
TOTAL INVESTMENTS-- 92.5% (COST $8,265) $ 8,594
===========
Percentages are based on net assets of $9,292,542.
* Non-Income Producing Security
ADR -- American Depository Receipt
Ser -- Series
The accompanying notes are an integral part of the financial statements.
[LOGO OMITTED] 49
<PAGE>
THE PBHG FUNDS, INC.
PBHG CASH RESERVES FUND (UNAUDITED)
PBHG CASH RESERVES FUND PBCXX
COMPARISON OF TOTAL RETURN, AS OF SEPTEMBER 30, 2000
FOR THE PBHG CASH RESERVES FUND,
VERSUS THE LIPPER MONEY MARKET FUNDS AVERAGE 1
[BAR GRAPH OMITTED]
PLOT POINTS FOLLOWS:
PBHG CASH RESERVES FUND LIPPER MONEY MARKET FUNDS AVERAGE 2
ONE YEAR ONE YEAR
5.63% 5.43%
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, 2000
[PIE CHART OMITTED]
PLOT POINT FOLLOWS:
Certificates of Deposit 7%
Commercial Paper 50%
Corporate Obligations 1%
Government Bond 2%
Cash 40%
% of Total Portfolio Investments
[LOGO OMITTED] 50
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG CASH RESERVES FUND PBCXX
Face Market
Description Amount (000) Value (000)
--------------------------------------------------------------------------------
BANK NOTES -- 0.4%
US Bank Note
5.92%, 10/02/00 $1,000 $ 1,000
-----------
TOTAL BANK NOTES (COST $1,000) 1,000
-----------
--------------------------------------------------------------------------------
CERTIFICATE OF DEPOSIT -- 6.4%
American Express
6.54%, 10/18/00 5,400 5,400
Barclays Bank N.Y.
6.68%, 2/20/01 1,500 1,500
Citibank New York
7.41%, 5/30/01 1,500 1,500
Deutsche Bank
6.55%, 1/22/01 1,500 1,500
Dresdner Bank
6.71%, 2/26/01 1,500 1,500
Hypovereinsbank
7.25%, 5/14/01 2,375 2,372
Svenska Handelsbanken N.Y.
6.75%, 3/16/01 2,000 2,000
-----------
TOTAL CERTIFICATES OF DEPOSIT (COST $15,772) 15,772
-----------
--------------------------------------------------------------------------------
COMMERCIAL PAPER -- 50.6%
Alcoa
6.48%, 10/20/00 6,000 5,979
Associates Corporation of North America
6.48%, 10/27/00 6,000 5,972
Bear Stearns
6.50%, 10/27/00 6,500 6,469
Ciesco
6.50%, 10/18/00 6,000 5,982
Clipper Receivable
6.80%, 10/2/00 2,500 2,500
Corporate Asset Funding
6.51%, 10/6/00 6,000 5,994
Fleet Funding
6.51%, 10/13/00 6,000 5,987
Ford Motor Credit
6.51%, 10/5/00 2,500 2,498
General Motors Acceptance
6.50%, 10/20/00 6,000 5,979
Goldman Sachs Group
6.49%, 10/16/00 6,000 5,984
Greyhawk Funding
6.50%, 11/17/00 7,000 6,940
Illinois Tool Works
6.49%, 10/31/00 6,000 5,968
International Lease Finance
6.46%, 2/23/01 6,000 5,844
Merck & Company
6.47%, 10/25/00 6,000 5,974
Minnesota Mining & Manufacturing
6.50%, 10/13/00 4,000 3,991
Morgan Stanley Dean Witter
6.47%, 11/30/00 7,000 6,925
National Rural Utilities
6.44%, 4/12/01 5,000 4,827
Park Avenue Receivable
6.52%, 10/24/00 6,000 5,975
Face Market
Description Amount (000) Value (000)
--------------------------------------------------------------------------------
COMMERCIAL PAPER -- CONTINUED
Prudential Funding
6.50%, 10/19/00 $ 5,000 $ 4,984
Washington Post
6.47%, 10/20/00 6,000 5,980
Windmill Funding
6.50%, 10/4/00 5,500 5,497
Woolwich
6.49%, 11/22/00 6,000 5,944
Yale University
6.52%, 10/5/00 2,000 1,999
-----------
TOTAL COMMERCIAL PAPER (COST $124,192) 124,192
-----------
--------------------------------------------------------------------------------
CORPORATE OBLIGATIONS -- 0.8%
General Electric Capital
7.38%, 5/23/01 2,000 2,000
-----------
TOTAL CORPORATE OBLIGATIONS (COST $2,000) 2,000
-----------
--------------------------------------------------------------------------------
GOVERNMENT BOND -- 2.0%
Federal Home Loan Bank
6.52%, 3/28/01 5,000 4,999
-----------
TOTAL GOVERNMENT BOND (COST $4,999) 4,999
-----------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 40.2%
Lehman
6.63%, dated 09/29/00, matures 10/02/00,
repurchase price $38,020,995
(collateralized U.S. Government
Obligations: total market
value $38,757,467) (A) 38,000 38,000
Paribas
6.65%, dated 09/29/00, matures 10/02/00,
repurchase price $5,703,159
(collateralized U.S. Government
Obligations: total market
value $5,814,252) (A) 5,700 5,700
UBS Warburg, LLC
6.68%, dated 09/29/00, matures 10/02/00,
repurchase price $55,030,617
(collateralized U.S. Government
Obligations: total market
value $56,103,424) (A) 55,000 55,000
-----------
TOTAL REPURCHASE AGREEMENTS (COST $98,700) 98,700
-----------
TOTAL INVESTMENTS-- 100.4% (COST $246,663) 246,663
-----------
--------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (0.4)%
TOTAL OTHER ASSETS AND LIABILITIES, NET (1,070)
-----------
--------------------------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 200
million shares -- $0.001 par value)
based on 245,592,997 outstanding
shares of common stock 245,595
Undistributed net investment income 4
Accumulated net realized loss on investments (6)
-----------
TOTAL NET ASSETS-- 100.0% $ 245,593
===========
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.
[LOGO OMITTED] 51
<PAGE>
THE PBHG FUNDS, INC.
PBHG TECHNOLOGY & COMMUNICATIONS FUND (UNAUDITED)
PBHG TECHNOLOGY & COMMUNICATIONS FUND PBTCX
INVESTMENT FOCUS
STYLE
Value Blend Growth
------------------------
X Large
------------------------
Medium MARKET CAPITALIZATION
------------------------
Small
------------------------
AVERAGE ANNUAL TOTAL RETURN 1
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
One Annualized Annualized Annualized
6 Year 3 Year 5 Year Inception
Months 2 Return Return Return to Date 3
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PBHG Technology &
Communications Fund (8.09)% 142.87% 60.16% 55.90% 55.97%
----------------------------------------------------------------------------------------
</TABLE>
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]
PLOT POINT FOLLOWS:
Lipper Science &
PBHG Technology & Soundview Technology Funds
Communications Fund Technology Index 4 Average 5
9/30/95 10,000 10,000 10,000
10/31/95 10,800 10,368 9,834
11/30/95 11,720 11,079 9,952
12/31/95 11,602 10,533 9,571
1/31/96 11,462 10,446 9,553
2/29/96 12,562 11,128 10,024
3/31/96 12,482 10,831 9,745
4/30/96 14,132 12,557 10,820
5/31/96 15,303 13,442 11,240
6/30/96 14,973 12,235 10,498
7/31/96 13,712 11,006 9,496
8/31/96 14,963 12,002 10,120
9/30/96 16,643 13,468 11,270
10/31/96 16,793 13,286 11,125
11/30/96 17,663 14,813 12,065
12/31/96 17,916 13,842 11,800
1/31/97 18,539 15,118 12,557
2/28/97 16,580 13,942 11,502
3/31/97 14,927 12,988 10,653
4/30/97 15,437 13,353 10,970
5/31/97 18,100 15,145 12,466
6/30/97 18,641 15,181 12,614
7/31/97 20,865 17,578 14,249
8/31/97 20,773 18,116 14,252
9/30/97 22,416 18,555 14,969
10/31/97 19,732 16,406 13,659
11/30/97 19,151 16,227 13,536
12/31/97 18,511 15,133 13,185
1/31/98 17,697 15,504 13,522
2/28/98 19,850 17,507 15,071
3/31/98 20,643 17,427 15,501
4/30/98 21,061 18,623 16,116
5/31/98 19,047 16,872 14,961
6/30/98 20,332 17,789 16,121
7/31/98 19,186 17,415 15,862
8/31/98 16,004 13,427 12,693
9/30/98 17,997 15,450 14,393
10/31/98 18,072 16,976 15,424
11/30/98 20,322 18,826 17,509
12/31/98 23,324 21,537 20,360
1/31/99 28,435 24,899 23,599
2/28/99 25,325 21,781 21,551
3/31/99 30,000 23,314 23,995
4/30/99 31,653 23,997 24,755
5/31/99 30,120 24,762 24,411
6/30/99 34,622 27,911 27,345
7/31/99 34,067 27,977 27,025
8/31/99 36,916 29,675 28,477
9/30/99 37,916 30,310 29,471
10/31/99 45,517 33,603 32,677
11/30/99 54,107 39,615 38,386
12/31/99 80,210 49,489 48,320
1/31/00 82,496 48,149 47,276
2/29/00 117,027 62,909 60,192
3/31/00 100,197 63,040 57,393
4/30/00 81,848 58,385 50,075
5/31/00 68,637 51,722 43,771
6/30/00 93,468 58,092 51,374
7/31/00 85,195 53,928 48,759
8/31/00 99,596 63,182 56,385
9/30/00 92,089 55,657 50,780
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 Average is not intended to imply the
Fund's past or future performance.
SECTOR WEIGHTINGS - AT SEPTEMBER 30, 2000
[PIE CHART OMITTED]
PLOT POINT FOLLOWS:
Consumer Cyclical 1%
Technology 86%
Cash 13%
% of Total Portfolio Investments
Top Ten Holdings - September 30, 2000
Palm 5.1%
Verisign 4.9%
Infospace 4.8%
Redback Networks 4.6%
Ariba 4.6%
Globespan 4.0%
Extreme Networks 3.4%
Sycamore Networks 3.3%
I2 Technologies 3.2%
Applied Micro Circuits 3.1%
------------------------------------------------------
% of Total Portfolio Investments 41.0%
[LOGO OMITTED] 52
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG TECHNOLOGY & COMMUNICATIONS FUND PBTCX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMMON STOCK -- 97.3%
CONSUMER CYCLICAL -- 1.4%
AUDIO/VIDEO PRODUCTS -- 1.4%
Polycom* 719,200 $ 48,164
-----------
48,164
-----------
TOTAL CONSUMER CYCLICAL (COST $39,040) 48,164
-----------
--------------------------------------------------------------------------------
INDUSTRIAL -- 0.3%
ELECTRONIC COMPONENTS-MISCELLANEOUS -- 0.3%
Celestica* 140,100 9,702
-----------
9,702
-----------
TOTAL INDUSTRIAL (COST $8,070) 9,702
-----------
--------------------------------------------------------------------------------
SERVICES -- 0.3%
ADVERTISING SERVICES -- 0.3%
Getty Images* 365,100 11,113
-----------
11,113
-----------
TOTAL SERVICES (COST $15,935) 11,113
-----------
--------------------------------------------------------------------------------
TECHNOLOGY -- 95.3%
APPLICATIONS SOFTWARE -- 2.1%
Quest Software* 618,400 38,408
Siebel Systems* 293,900 32,715
-----------
71,123
--------------------------------------------------------------------------------
COMPUTERS -- 1.8%
Sun Microsystems* 509,000 59,426
-----------
59,426
--------------------------------------------------------------------------------
COMPUTERS-INTEGRATED SYSTEMS -- 7.5%
Brocade Communications Systems* 335,900 79,273
Redback Networks* 1,046,300 171,593
-----------
250,866
--------------------------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 2.6%
Sandisk* 599,500 40,017
Storage Networks* 131,800 13,468
Veritas Software* 247,200 35,102
-----------
88,587
--------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 9.8%
Applied Micro Circuits* 551,200 114,133
Broadcom* 255,600 62,302
Intersil Holding* 320,000 15,960
Micron Technology 1,413,700 65,030
Transwitch* 427,100 27,228
Virata* 687,500 45,461
-----------
330,114
--------------------------------------------------------------------------------
ENTERPRISE SOFTWARE/SERVICES -- 5.4%
Autonomy ADR* 556,400 30,602
BEA Systems* 417,800 32,537
I2 Technologies* 639,510 119,628
-----------
182,767
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
INTERNET CONTENT -- 5.8%
Infospace* 5,934,400 $ 179,515
Rare Medium Group* 1,863,100 13,857
-----------
193,372
--------------------------------------------------------------------------------
INTERNET SOFTWARE -- 20.9%
Agile Software* 357,600 32,162
Ariba* 1,194,900 171,188
Art Technology* 597,700 56,632
Commerce One* 1,404,500 110,253
Internap Network Services* 843,200 27,246
Interwoven* 214,900 24,297
Verisign* 895,032 181,300
Vitria Technology 2,107,200 98,248
-----------
701,326
--------------------------------------------------------------------------------
NETWORK SOFTWARE -- 1.8%
Micromuse 298,300 59,940
-----------
59,940
--------------------------------------------------------------------------------
NETWORKING PRODUCTS -- 5.9%
Extreme Networks* 1,101,000 126,065
Inrange Technologies* 53,700 2,846
Juniper Networks* 164,700 36,059
Network Appliance* 255,600 32,557
-----------
197,527
--------------------------------------------------------------------------------
SEMICONDUCTOR COMPONENTS-INTEGRATED CIRCUITS -- 5.4%
Globespan* 1,222,400 149,133
Triquint Semiconductor* 911,000 33,194
-----------
182,327
--------------------------------------------------------------------------------
SOFTWARE TOOLS -- 0.9%
Mercury Interactive* 184,000 28,842
------------
28,842
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT -- 5.2%
Advanced Fibre* 1,059,900 40,144
Cosine Communications* 314,200 17,458
Ditech Communications* 546,300 22,398
Next Level Communications* 448,400 29,650
Nortel Networks^ 854,600 50,902
Tekelec* 481,900 15,843
-----------
176,395
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT-FIBER OPTICS -- 14.5%
Avanex* 437,500 47,113
Ciena* 669,700 82,248
Corning 106,600 31,660
Metromedia Fiber Network* 769,100 18,699
MRV Communications* 2,064,400 93,543
SDL* 289,200 89,453
Sycamore Networks* 1,158,539 125,122
-----------
487,838
--------------------------------------------------------------------------------
[LOGO OMITTED] 53
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG TECHNOLOGY & COMMUNICATIONS FUND PBTCX
Shares/Face Market
Description Amount (000) Value (000)
--------------------------------------------------------------------------------
WIRELESS EQUIPMENT -- 5.7%
Palm* 3,590,300 $ 190,061
----------
190,061
----------
TOTAL TECHNOLOGY (COST $2,687,025) 3,200,511
----------
TOTAL COMMON STOCK (COST $2,750,070) 3,269,490
----------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 13.8%
Greenwich Capital
6.56%, dated 09/29/00, matures 10/02/00,
repurchase price $77,344,565
(collateralized by U.S. Government
Agency Instruments: total market
value $78,850,079) (A) $77,302 77,302
J.P. Morgan
6.56%, dated 09/29/00, matures 10/02/00,
repurchase price $69,292,554
(collateralized by U.S. Government
Agency Instruments: total market
value $70,639,789) (A) 69,255 69,255
J.P. Morgan
6.56%, dated 09/29/00, matures 10/02/00,
repurchase price $155,099,288
(collateralized by U.S. Government
Agency Instruments: total market
value $158,115,282) (A) 155,015 155,015
Morgan Stanley
6.56%, dated 09/29/00, matures 10/02/00,
repurchase price $164,426,362
(collateralized by U.S. Government
Agency Instruments: total market
value $168,269,031) (A) 164,336 164,336
----------
TOTAL REPURCHASE AGREEMENTS (COST $465,908) 465,908
----------
TOTAL INVESTMENTS-- 111.1% (COST $3,215,978) 3,735,398
----------
-------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (11.1)%
Payable for Investment Securities Purchased (231,760)
Payable for Capital Shares Redeemed (226,663)
OTHER ASSETS AND LIABILITIES, NET 84,215
----------
Total Other Assets and Liabilities, Net (374,208)
--------------------------------------------------------------------------------
Market
Description Value (000)
--------------------------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 200 million
shares -- $0.001 par value) based on 43,018,594
outstanding shares of common stock $2,781,435
Accumulated net investment loss (15,712)
Accumulated net realized gain on investments 76,047
Net unrealized appreciation on investments 519,420
----------
TOTAL NET ASSETS-- 100.0% $3,361,190
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $78.13
======
* Non-Income Producing Security
(A) -- Tri-Party Repurchase Agreement
ADR -- American Depository Receipt
^ The fund held Canadian Securities as of September 30, 2000. The total market
value of investments is $50,902,113 and represented 1.5% of the fund.
The accompanying notes are an integral part of the financial statements.
[LOGO OMITTED] 54
<PAGE>
THE PBHG FUNDS, INC.
PBHG STRATEGIC SMALL COMPANY FUND (UNAUDITED)
PBHG STRATEGIC SMALL COMPANY FUND PSSCX
INVESTMENT FOCUS
STYLE
Value Blend Growth
------------------------
Large
------------------------
Medium MARKET CAPITALIZATION
------------------------
X Small
------------------------
AVERAGE ANNUAL TOTAL RETURN 1
AS OF SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
One Annualized Annualized
6 Year 3 Year Inception
Months 2 Return Return to Date 3
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PBHG Strategic Small
Company Fund 9.82% 81.77% 24.62% 29.03%
------------------------------------------------------------------------------------
</TABLE>
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]
PLOT POINT FOLLOWS:
PBHG Strategic Lipper Small-Cap Growth
Small Company Fund Russell 2000 Index4 Funds Average5
12/31/96 10,000 10,000 10,000
1/31/97 10,120 10,200 10,244
2/28/97 9,350 9,952 9,595
3/31/97 8,860 9,483 8,934
4/30/97 8,750 9,509 8,797
5/31/97 10,270 10,567 10,049
6/30/97 11,130 11,020 10,636
7/31/97 12,170 11,533 11,340
8/31/97 12,410 11,797 11,578
9/30/97 13,440 12,660 12,518
10/31/97 12,820 12,104 11,897
11/30/97 12,520 12,026 11,655
12/31/97 12,567 12,236 11,692
1/31/98 12,502 12,043 11,531
2/28/98 13,439 12,933 12,522
3/31/98 13,870 13,467 13,153
4/30/98 13,999 13,541 13,288
5/31/98 12,922 12,812 12,394
6/30/98 13,073 12,839 12,663
7/31/98 12,244 11,800 11,782
8/31/98 9,466 9,508 9,236
9/30/98 10,004 10,252 9,954
10/31/98 10,381 10,671 10,424
11/30/98 11,501 11,230 11,317
12/31/98 12,835 11,924 12,510
1/31/99 13,105 12,083 12,778
2/28/99 11,957 11,104 11,622
3/31/99 11,856 11,278 12,116
4/30/99 12,092 12,288 12,633
5/31/99 12,576 12,468 12,777
6/30/99 13,937 13,032 13,911
7/31/99 13,960 12,674 13,903
8/31/99 14,083 12,205 13,720
9/30/99 14,308 12,208 14,104
10/31/99 14,815 12,257 14,863
11/30/99 16,209 12,989 16,808
12/31/99 19,482 14,459 19,949
1/31/00 19,188 14,227 19,728
2/29/00 24,796 16,576 24,745
3/31/00 23,682 15,484 23,357
4/30/00 21,514 14,552 20,736
5/31/00 20,559 13,704 19,000
6/30/00 24,625 14,898 22,248
7/31/00 22,898 14,419 20,806
8/31/00 26,265 15,519 23,257
9/30/00 26,008 15,063 22,336
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 Average is not intended to imply the Fund's
past or future performance.
SECTOR WEIGHTINGS - AT SEPTEMBER 30, 2000
[PIE CHART OMITTED]
PLOT POINT FOLLOWS:
Basic Materials 1%
Consumer Cyclical 13%
Energy 6%
Financial 8%
Health Care 12%
Industrial 10%
Services 5%
Technology 36%
Transportation 1%
Utilities 1%
Cash 7%
% of Total Portfolio Investments
TOP TEN HOLDINGS - SEPTEMBER 30, 2000
Extreme Networks 1.7%
Newport 1.5%
Elantec Semiconductor 1.4%
Avocent 1.4%
Manhattan Associates 1.3%
Transwitch 1.3%
Manugistics 1.1%
Power-One 1.1%
Anaren Microwave 1.1%
Impath 1.0%
------------------------------------------------------
% of Total Portfolio Investments 12.9%
[LOGO OMITTED] 55
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG STRATEGIC SMALL COMPANY FUND PSSCX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMMON STOCK -- 92.5%
BASIC MATERIALS -- 1.3%
CHEMICALS-DIVERSIFIED -- 0.1%
Solutia 13,800 $ 157
----------
157
--------------------------------------------------------------------------------
CHEMICALS-PLASTICS -- 0.1%
Polyone* 21,700 159
----------
159
--------------------------------------------------------------------------------
CHEMICALS-SPECIALTY -- 1.0%
Crompton 53,200 419
Cytec Industries* 13,800 461
W.R. Grace* 11,500 79
----------
959
--------------------------------------------------------------------------------
METAL-ALUMINUM -- 0.1%
Commonwealth Industries 9,500 53
----------
53
--------------------------------------------------------------------------------
OTHER-NON-FERROUS -- 0.0%
USEC 2,100 9
----------
9
----------
TOTAL BASIC MATERIALS (COST $1,550) 1,337
----------
--------------------------------------------------------------------------------
CONSUMER CYCLICAL -- 12.3%
ATHLETIC EQUIPMENT -- 0.8%
Direct Focus* 20,100 799
----------
799
--------------------------------------------------------------------------------
AUDIO/VIDEO PRODUCTS -- 1.8%
Harman International 22,400 875
Polycom* 15,000 1,005
----------
1,880
--------------------------------------------------------------------------------
AUTO/TRUCK PARTS & EQUIPMENT-ORIGINAL -- 0.4%
Delco Remy International* 27,500 210
Visteon 12,000 181
----------
391
--------------------------------------------------------------------------------
BUILDING-MOBILE HOME/MANUFACTURED HOUSING -- 0.1%
Coachmen Industries 11,000 115
----------
115
--------------------------------------------------------------------------------
BUILDING-RESIDENTIAL/COMMERCIAL -- 0.1%
Centex 4,000 129
----------
129
--------------------------------------------------------------------------------
CABLE TV -- 0.2%
Insight Communications* 13,200 210
----------
210
--------------------------------------------------------------------------------
CASINO HOTELS -- 0.4%
Harrah's Entertainment* 15,700 432
----------
432
--------------------------------------------------------------------------------
Description Shares Value (000)
--------------------------------------------------------------------------------
CASINO SERVICES -- 0.1%
International Game Technology 3,900 $ 131
----------
131
--------------------------------------------------------------------------------
DISTRIBUTION/WHOLESALE -- 0.4%
Bell Microproducts* 13,100 409
----------
409
--------------------------------------------------------------------------------
E-COMMERCE -- 1.0%
1-800 Contacts* 20,000 960
----------
960
--------------------------------------------------------------------------------
FOOTWEAR & RELATED APPAREL -- 0.4%
Skechers Foot Wear* 25,000 378
----------
378
--------------------------------------------------------------------------------
HOME FURNISHINGS -- 0.4%
Furniture Brands International* 22,700 377
----------
377
--------------------------------------------------------------------------------
PUBLISHING-NEWSPAPERS -- 0.4%
Journal Register* 6,300 105
Pulitzer 6,100 262
----------
367
--------------------------------------------------------------------------------
RETAIL-APPAREL/SHOE -- 1.0%
Ann Taylor Stores* 7,300 280
Children's Place Stores* 2,700 70
Christopher & Banks* 17,250 671
----------
1,021
--------------------------------------------------------------------------------
RETAIL-COMPUTER EQUIPMENT -- 1.4%
Insight Enterprises* 20,100 548
PC Connection* 15,300 872
----------
1,420
--------------------------------------------------------------------------------
RETAIL-CONSUMER ELECTRONICS -- 1.1%
Tweeter Home Entertainment Group* 14,300 519
Ultimate Electronics* 14,100 580
----------
1,099
--------------------------------------------------------------------------------
RETAIL-RESTAURANTS -- 1.6%
Krispy Kreme Doughnuts* 6,400 535
P.F Chang's China Bistro* 11,600 401
Papa John's International* 13,000 326
Wendy's International 19,000 381
----------
1,643
--------------------------------------------------------------------------------
TELEVISION -- 0.7%
Paxson Communications* 23,700 273
Pegasus Communications* 8,700 420
----------
693
----------
TOTAL CONSUMER CYCLICAL (COST $7,934) 12,454
--------------------------------------------------------------------------------
[LOGO OMITTED] 56
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG STRATEGIC SMALL COMPANY FUND PSSCX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
CONSUMER NON-CYCLICAL -- 0.2%
CONSUMER PRODUCTS-MISCELLANEOUS -- 0.2%
Playtex Products* 12,900 $ 152
----------
152
----------
TOTAL CONSUMER NON-CYCLICAL (COST $144) 152
----------
--------------------------------------------------------------------------------
ENERGY -- 5.5%
OIL COMPANIES-EXPLORATION & PRODUCTION -- 3.1%
Barrett Resources* 7,500 283
Comstock Resources* 12,100 138
Devon Energy 2,230 134
EOG Resources 3,000 117
Forest Oil* 24,900 403
Louis Dreyfus Natural Gas* 13,400 531
Newfield Exploration* 3,700 173
Noble Affiliates 12,000 446
Ocean Energy* 19,100 295
Unit* 14,800 218
Vintage Petroleum 14,700 334
----------
3,072
--------------------------------------------------------------------------------
OIL REFINING & MARKETING -- 0.6%
Tesoro Petroleum* 29,000 288
Valero Energy 7,000 246
----------
534
--------------------------------------------------------------------------------
OIL & GAS DRILLING -- 0.9%
Atwood Oceanic* 7,500 313
Key Energy Services* 22,400 220
Patterson Energy* 3,500 120
Precision Drilling* 700 25
Pride International* 10,000 265
----------
943
--------------------------------------------------------------------------------
OIL-FIELD SERVICES -- 0.6%
Friede Goldman Halter* 47,400 335
Hanover Compressor* 8,600 283
----------
618
--------------------------------------------------------------------------------
PIPELINES -- 0.3%
Kinder Morgan 8,200 336
----------
336
----------
TOTAL ENERGY (COST $4,060) 5,503
----------
--------------------------------------------------------------------------------
FINANCIAL -- 7.4%
COMMERCIAL BANKS-EASTERN US -- 0.5%
Banknorth Group 4,400 79
Commercial Bank of New York 6,600 89
Mercantile 6,000 218
----------
386
--------------------------------------------------------------------------------
COMMERCIAL BANKS-WESTERN US -- 0.9%
Bancwest 28,500 554
City National 9,474 366
----------
920
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
FINANCE-INVESTMENT BANKER/BROKER -- 0.1%
Morgan Keegan 7,900 $ 138
----------
138
--------------------------------------------------------------------------------
FINANCE-MORTGAGE LOAN/BANKER -- 0.1%
Doral Financial 5,900 96
----------
96
--------------------------------------------------------------------------------
INTERNET BROKER -- 0.2%
WIT Soundview Group* 17,600 158
----------
158
--------------------------------------------------------------------------------
INVESTMENT MANAGEMENT/ADVISORY SERVICES -- 0.7%
Affiliated Managers Group* 10,200 581
Waddell & Reed Financial, Cl A 5,250 163
----------
744
--------------------------------------------------------------------------------
LIFE/HEALTH INSURANCE -- 0.8%
Liberty Financial 8,400 197
Mony Group 11,200 447
Torchmark 7,400 206
----------
850
--------------------------------------------------------------------------------
PROPERTY/CASUALTY INSURANCE -- 0.6%
Fidelity National Financial 14,600 361
First American Financial 8,100 169
Trenwick Group Limited 5,700 108
----------
638
--------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT/SERVICES -- 0.1%
Trammell Crow* 9,200 138
----------
138
--------------------------------------------------------------------------------
REINSURANCE -- 0.3%
Annuity & Life 11,000 265
----------
265
--------------------------------------------------------------------------------
REITS-APARTMENTS -- 0.0%
Pennsylvania Real Estate
Investment Trust 2,400 42
----------
42
--------------------------------------------------------------------------------
REITS-OFFICE PROPERTY -- 0.2%
Mack Cali Realty 7,000 197
----------
197
--------------------------------------------------------------------------------
REITS-REGIONAL MALLS -- 0.1%
CBL & Associates Properties 4,900 123
----------
123
--------------------------------------------------------------------------------
REITS-SHOPPING CENTERS -- 0.3%
JP Realty 14,700 266
----------
266
--------------------------------------------------------------------------------
S&L/THRIFTS-CENTRAL US -- 0.5%
Bank United, Cl A 4,400 222
Charter One Financial 5,565 136
Commercial Federal 7,400 142
----------
500
--------------------------------------------------------------------------------
[LOGO OMITTED] 57
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG STRATEGIC SMALL COMPANY FUND PSSCX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
S&L/THRIFTS-EASTERN US -- 1.5%
Berkshire Hills Bancorp* 25,600 $ 368
Dime Bancorp 26,600 574
Roslyn Bancorp 20,300 454
Woronoco Bancorp 9,000 114
----------
1,510
--------------------------------------------------------------------------------
S&L/THRIFTS-WESTERN US -- 0.5%
Golden State Bancorp* 18,600 440
Washington Federal 3,800 86
----------
526
----------
TOTAL FINANCIAL (COST $6,236) 7,497
----------
--------------------------------------------------------------------------------
HEALTH CARE -- 11.9%
DIAGNOSTIC KITS -- 0.4%
Biosite Diagnostics* 10,000 399
----------
399
--------------------------------------------------------------------------------
DISPOSABLE MEDICAL PRODUCTS -- 0.2%
Bard (C.R.) 4,500 190
----------
190
--------------------------------------------------------------------------------
DRUG DELIVERY SYSTEMS -- 0.2%
Noven Pharmaceuticals* 5,200 222
----------
222
--------------------------------------------------------------------------------
HEALTH CARE COST CONTAINMENT -- 0.7%
Hooper Holmes 72,500 689
----------
689
--------------------------------------------------------------------------------
MEDICAL INSTRUMENTS -- 0.4%
Techne* 4,000 448
----------
448
--------------------------------------------------------------------------------
MEDICAL LABS & TESTING SERVICES -- 1.5%
Covance* 8,600 70
Dianon Systems* 10,000 399
Impath* 16,500 1,042
----------
1,511
--------------------------------------------------------------------------------
MEDICAL PRODUCTS -- 2.0%
Haemonetics* 28,700 732
North American Scientific* 27,800 883
Vital Signs 1,400 37
Zoll Medical Group* 8,100 395
----------
2,047
--------------------------------------------------------------------------------
MEDICAL-BIOMEDICAL/GENETIC -- 1.5%
Aclara Biosciences* 2,600 79
Arena Pharmaceuticals* 2,600 112
Cell Genesys* 4,600 138
Inhale Therapeutic Systems* 1,900 107
Myriad Genetics* 10,000 864
Sangamo Biosciences* 5,000 194
----------
1,494
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
MEDICAL-DRUGS -- 2.5%
Celgene* 9,600 $ 571
Cephalon* 1,700 83
Cima Labs* 17,500 911
Dura Pharmaceuticals* 13,000 460
Galen Holdings ADR* 3,000 137
Medicis Pharmaceuticals, Cl A* 2,200 135
Pain Therapeutics* 4,200 83
Pharmacopeia* 4,400 112
----------
2,492
--------------------------------------------------------------------------------
MEDICAL-GENERIC DRUGS -- 0.2%
Alpharma 2,800 171
----------
171
--------------------------------------------------------------------------------
MEDICAL-HMO -- 0.3%
Trigon Healthcare* 5,500 289
----------
289
--------------------------------------------------------------------------------
MEDICAL-HOSPITALS -- 0.4%
Province Healthcare* 7,500 300
Triad Hospitals* 2,000 58
----------
358
--------------------------------------------------------------------------------
MEDICAL-NURSING HOMES -- 0.3%
Beverly Enterprises* 53,400 317
----------
317
--------------------------------------------------------------------------------
MEDICAL-OUTPATIENT/HOME MEDICAL -- 0.1%
Lincare Holdings* 4,900 141
----------
141
--------------------------------------------------------------------------------
OPTICAL SUPPLIES -- 0.2%
Staar Surgical* 11,100 192
----------
192
--------------------------------------------------------------------------------
PHARMACY SERVICES -- 0.5%
Omnicare 30,400 490
----------
490
--------------------------------------------------------------------------------
THERAPEUTICS -- 0.5%
Inspire Pharmaceuticals* 10,200 306
Tularik* 5,400 178
United Therapeutics* 800 70
----------
554
----------
TOTAL HEALTH CARE (COST $8,188) 12,004
----------
--------------------------------------------------------------------------------
INDUSTRIAL -- 10.1%
AEROSPACE/DEFENSE -- 0.8%
Teledyne Technologies* 24,800 722
----------
722
--------------------------------------------------------------------------------
BUILDING PRODUCTS-CEMENT/AGGREGATE -- 0.2%
Texas Industries 4,900 156
----------
156
--------------------------------------------------------------------------------
[LOGO OMITTED] 58
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG STRATEGIC SMALL COMPANY FUND PSSCX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
BUILDING & CONSTRUCTION PRODUCTS-MISCELLANEOUS -- 0.1%
Dal-Tile International* 4,500 $ 56
----------
56
--------------------------------------------------------------------------------
CERAMIC PRODUCTS -- 0.4%
Coorstek* 11,600 444
----------
444
--------------------------------------------------------------------------------
CIRCUIT BOARDS -- 0.3%
Manufacturers Services Limited* 24,300 289
SMTC* 2,300 49
----------
338
--------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING OPERATIONS -- 0.3%
ITT Industries 10,200 331
----------
331
--------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-MISCELLANEOUS -- 1.8%
Act Manufacturing* 11,000 580
CTS 16,000 810
Kent Electronics* 17,700 423
----------
1,813
--------------------------------------------------------------------------------
ELECTRONIC CONNECTORS -- 0.7%
Merix* 11,250 729
----------
729
--------------------------------------------------------------------------------
ELECTRONIC MEASURING INSTRUMENTS -- 1.4%
Keithley Instruments 6,500 455
Measurement Specialties* 7,500 362
Molecular Devices* 5,000 491
Trimble Navigation Limited* 5,000 112
----------
1,420
--------------------------------------------------------------------------------
ELECTRONIC PARTS DISTRIBUTION -- 0.5%
Nu Horizons Electronics* 17,500 487
----------
487
--------------------------------------------------------------------------------
HAZARDOUS WASTE DISPOSAL -- 0.1%
Stericycle* 4,700 115
----------
115
--------------------------------------------------------------------------------
INSTRUMENTS-CONTROLS -- 0.6%
BEI Technologies 5,000 209
Photon Dynamics* 10,600 400
----------
609
--------------------------------------------------------------------------------
INSTRUMENTS-SCIENTIFIC -- 0.5%
FEI* 13,200 286
Varian* 5,300 229
----------
515
--------------------------------------------------------------------------------
LASERS-SYSTEMS/COMPONENTS -- 0.4%
Cyberoptics* 12,500 229
Excel Technology* 5,000 160
----------
389
--------------------------------------------------------------------------------
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
METAL PROCESSORS & FABRICATORS -- 0.1%
Wolverine Tube* 9,900 $ 147
----------
147
--------------------------------------------------------------------------------
MISCELLANEOUS MANUFACTURING -- 0.3%
Aptargroup 12,400 297
----------
297
--------------------------------------------------------------------------------
NON-HAZARDOUS WASTE DISPOSAL -- 0.0%
Waste Connections* 1,100 28
----------
28
--------------------------------------------------------------------------------
POWER CONVERSION/SUPPLY EQUIPMENT -- 1.6%
Applied Science & Technology* 4,700 69
C & D Technologies 7,500 426
Power-One* 18,100 1,095
----------
1,590
----------
TOTAL INDUSTRIAL (COST $8,099) 10,186
----------
--------------------------------------------------------------------------------
SERVICES -- 5.3%
COMMERCIAL SERVICES -- 0.7%
Acnielson* 26,400 629
----------
629
--------------------------------------------------------------------------------
COMPUTER SERVICES -- 1.5%
Manhattan Associates* 21,500 1,317
Tanning Technology* 16,100 221
----------
1,538
--------------------------------------------------------------------------------
CONSULTING SERVICES -- 1.9%
Comdisco 8,600 164
Corporate Executive Board* 17,000 684
Forrester Research* 9,100 580
Professional Detailing* 9,300 530
----------
1,958
--------------------------------------------------------------------------------
HUMAN RESOURCES -- 0.1%
Hall Kinion & Associates* 5,000 142
----------
142
--------------------------------------------------------------------------------
RESEARCH & DEVELOPMENT -- 1.1%
Albany Molecular Research* 16,200 911
Pharmaceutical Product Development* 7,200 191
----------
1,102
----------
TOTAL SERVICES (COST $3,403) 5,369
----------
--------------------------------------------------------------------------------
TECHNOLOGY -- 35.8%
APPLICATIONS SOFTWARE -- 3.1%
Actuate* 20,000 690
Caminus* 17,500 696
Genomica* 2,200 43
Parametric Technology* 17,800 195
Quest Software* 11,500 714
Serena Software* 10,000 461
Sonic Foundry* 10,000 89
WebTrends* 7,500 280
----------
3,168
--------------------------------------------------------------------------------
[LOGO OMITTED] 59
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG STRATEGIC SMALL COMPANY FUND PSSCX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
CELLULAR TELECOMMUNICATIONS -- 0.0%
Alamosa PCS Holdings* 1,400 $ 23
----------
23
--------------------------------------------------------------------------------
COMMUNICATIONS SOFTWARE -- 0.1%
Avid Technology* 9,600 134
----------
134
--------------------------------------------------------------------------------
COMPUTER AIDED DESIGN -- 0.6%
Aspen Technology* 12,900 582
----------
582
--------------------------------------------------------------------------------
COMPUTER DATA SECURITY -- 0.4%
Axent Technologies* 17,900 386
----------
386
--------------------------------------------------------------------------------
COMPUTERS -- 0.1%
Micron Electronics* 6,400 58
----------
58
--------------------------------------------------------------------------------
COMPUTERS-INTEGRATED SYSTEMS -- 0.4%
Catapult Communications* 20,000 373
----------
373
--------------------------------------------------------------------------------
COMPUTERS-MEMORY DEVICES -- 2.3%
M-Systems Flash Disk Pioneers* 15,000 572
Sandisk* 12,400 828
Silicon Storage Technology* 26,700 726
Simple Technology* 9,000 87
Storage Technology Group* 6,400 87
----------
2,300
--------------------------------------------------------------------------------
COMPUTERS-PERIPHERAL EQUIPMENT -- 2.3%
Avocent* 24,721 1,363
Mobility Electronics* 8,600 78
S3* 80,800 833
----------
2,274
--------------------------------------------------------------------------------
DATA PROCESSING/MANAGEMENT -- 1.6%
Acxiom* 3,200 102
Documentum* 2,500 203
Excelon* 50,600 626
Fair Isaac & Company 16,700 713
----------
1,644
--------------------------------------------------------------------------------
DECISION SUPPORT SOFTWARE -- 0.6%
Netiq* 8,500 558
----------
558
--------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 5.0%
Actel* 9,600 344
Alpha* 11,500 392
Cree* 3,800 442
Hi / Fn* 4,100 279
Integrated Silicon Solutions* 19,800 281
Microsemi* 12,500 477
Oak Technology* 20,000 548
Omnivision Technologies* 10,000 362
Silicon Image* 18,500 459
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- CONTINUED
Transwitch* 20,000 $ 1,275
Zoran* 3,000 146
----------
5,005
--------------------------------------------------------------------------------
ENTERPRISE SOFTWARE/SERVICES -- 2.5%
Business Objects ADR* 7,000 791
Hyperion Solutions* 6,900 179
Informatica* 5,000 466
Manugistics* 11,200 1,099
----------
2,535
--------------------------------------------------------------------------------
INTERNET SOFTWARE -- 0.8%
Clarent* 7,500 295
Fire Pond* 18,400 267
Proxicom* 8,900 174
Ravisent Technologies* 14,300 40
----------
776
--------------------------------------------------------------------------------
NETWORK SOFTWARE -- 0.3%
OTG Software* 7,500 307
----------
307
--------------------------------------------------------------------------------
NETWORKING PRODUCTS -- 2.7%
Adaptec* 6,300 126
Extreme Networks* 15,000 1,718
JNI* 10,000 890
----------
2,734
--------------------------------------------------------------------------------
SEMICONDUCTOR COMPONENTS-INTEGRATED CIRCUITS -- 3.9%
Elantec Semiconductor* 14,500 1,444
Exar* 7,100 859
Sipex* 10,900 458
Telcom Semiconductor* 38,900 579
Triquint Semiconductor* 17,500 638
----------
3,978
--------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT -- 0.2%
Genus* 13,800 52
Photronics* 8,100 177
----------
229
--------------------------------------------------------------------------------
SOFTWARE TOOLS -- 0.2%
Cysive* 28,800 193
----------
193
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT -- 5.0%
Anaren Microwave* 8,000 1,084
Audiocodes Limited* 3,200 272
Commscope* 7,700 189
Digital Lightwave* 8,300 603
MCK Communications* 5,000 113
Natural Microsystems* 16,000 861
Stanford Microdevices* 10,200 546
Tollgrade Communications* 5,000 694
Tut Systems* 8,100 699
----------
5,061
--------------------------------------------------------------------------------
[LOGO OMITTED] 60
<PAGE>
THE PBHG FUNDS, INC.
STATEMENT OF NET ASSETS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG STRATEGIC SMALL COMPANY FUND PSSCX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT-FIBER OPTICS -- 1.6%
Exfo Electro-Optical Engineering* 1,500 $ 65
Newport 9,500 1,513
----------
1,578
--------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES -- 0.8%
Adelphia Business Solutions* 8,400 99
Latitude Communications* 15,700 122
RCN* 11,100 230
Savvis Communications* 43,200 389
----------
840
--------------------------------------------------------------------------------
WEB HOSTING/PUBLISHING -- 0.6%
Verity* 17,500 625
----------
625
--------------------------------------------------------------------------------
WIRELESS EQUIPMENT -- 0.7%
Glenayre Technologies* 6,800 74
Proxim* 10,600 472
Western Multiplex* 11,200 180
----------
726
----------
TOTAL TECHNOLOGY (COST $24,553) 36,087
----------
--------------------------------------------------------------------------------
TRANSPORTATION -- 1.3%
AIRLINES -- 0.2%
Midway Airlines* 36,800 196
----------
196
--------------------------------------------------------------------------------
TRANSPORTATION-AIR FREIGHT -- 0.2%
EGL* 7,200 218
----------
218
--------------------------------------------------------------------------------
TRANSPORTATION-TRUCK -- 0.9%
American Freightways* 2,600 40
Covenant Transportation* 17,800 166
Hunt (J.B.) Transportation Services 11,100 142
Landstar Systems* 3,700 165
Swift Transportation* 9,600 125
Us Xpress Enterprises* 26,500 167
USfreightways* 5,800 132
----------
937
----------
TOTAL TRANSPORTATION (COST $1,745) 1,351
----------
--------------------------------------------------------------------------------
UTILITIES -- 1.4%
ELECTRIC-INTEGRATED -- 0.8%
CMS Energy 5,800 156
Idacorp 4,000 186
Madison Gas & Electric 500 11
Western Resources 19,700 426
----------
779
--------------------------------------------------------------------------------
Shares/Face Market
Description Amount (000) Value (000)
--------------------------------------------------------------------------------
GAS-DISTRIBUTION -- 0.5%
Atmos Energy 6,300 $ 130
Semco Energy 6,100 94
UGI 10,000 242
----------
466
--------------------------------------------------------------------------------
WATER -- 0.1%
Philadelphia Suburban 6,300 146
----------
146
----------
TOTAL UTILITIES (COST $1,200) 1,391
----------
TOTAL COMMON STOCK (COST $67,112) 93,331
----------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 6.4%
J.P. Morgan
6.60%, dated 09/29/00, matures 10/02/00,
repurchase price $6,497,005
(collateralized by U.S. Government
Agency Instruments: total market
value $6,624,107) (A) $6,493 6,493
----------
TOTAL REPURCHASE AGREEMENT (COST $6,493) 6,493
----------
TOTAL INVESTMENTS-- 98.9% (COST $73,605) 99,824
----------
--------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- 1.1%
TOTAL OTHER ASSETS AND LIABILITIES, NET 1,064
----------
--------------------------------------------------------------------------------
NET ASSETS:
Fund Shares of PBHG Class (authorized 200 million
shares -- $0.001 par value) based on 4,749,380
outstanding shares of common stock 62,755
Accumulated net investment loss (298)
Accumulated net realized gain on investments 12,212
Net unrealized appreciation on investments 26,219
----------
TOTAL NET ASSETS -- 100.0% $ 100,888
==========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $21.24
======
* 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.
[LOGO OMITTED] 61
<PAGE>
THE PBHG FUNDS, INC.
PBHG GLOBAL TECHNOLOGY & COMMUNICATIONS FUND (UNAUDITED)
PBHG GLOBAL TECHNOLOGY & COMMUNICATIONS FUND PBGTX
INVESTMENT FOCUS
STYLE
Value Blend Growth
------------------------
X Large
------------------------
Medium MARKET CAPITALIZATION
------------------------
Small
------------------------
AVERAGE ANNUAL TOTAL RETURN 1
AS OF SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
Cumulative
Inception to Date 2
--------------------------------------------------------------------------------
PBHG Global Technology &
Communications Fund 13.10%
--------------------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE OF A
$10,000 INVESTMENT IN THE PBHG GLOBAL
TECHNOLOGY & COMMUNICATIONS FUND, VERSUS THE
SOUNDVIEW TECHNOLOGY INDEX AND THE LIPPER SCIENCE & TECHNOLOGY FUNDS AVERAGE
PBHG
Global MSCI Soundview Lipper
Technology & World Free Technology Science & Technology
Communications Fund Index 3 Index 4 Funds Average 5
5/31/00 10,000 10,000 10,000 10,000
6/30/00 11,820 10,335 10,612 11,737
7/31/00 11,570 10,043 9,386 11,140
8/31/00 12,750 10,369 9,763 12,882
9/30/00 11,310 9,816 9,404 11,601
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 PBHG Global Technology & Communications Fund commenced operations on May
31, 2000.
3 The MSCI World Free Index is the Morgan Stanley Capital International Index
that reflects the performance of both the developed and the emerging equity
markets of the world. The Index excludes the performance impact of companies
that are restricted with respect to foreign investors. 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.
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 Average is not intended to imply the
Fund's past or future performance.
COUNTRY WEIGHTINGS - AT SEPTEMBER 30, 2000
Canada 6%
Finland 1%
France 3%
Germany 1%
Hong Kong 5%
Japan 7%
South Korea 1%
Spain 1%
United Kingdom 3%
United States 67%
Cash 5%
% of Total Portfolio Investments
TOP TEN HOLDINGS - SEPTEMBER 30, 2000
Palm 6.1%
Nortel Networks 4.8%
Furukawa Electric 4.3%
Ciena 3.5%
Sycamore Networks 3.5%
Network Appliance 3.4%
China Unicom ADR 3.4%
Sun Microsystems 3.1%
Infospace 3.0%
Corning 2.9%
------------------------------------------------------
% of Total Portfolio Investments 38.0%
[LOGO OMITTED] 62
<PAGE>
THE PBHG FUNDS, INC.
SCHEDULE OF INVESTMENTS
-----------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
PBHG GLOBAL TECHNOLOGY & COMMUNICATIONS FUND PBGTX
Market
Description Shares Value (000)
--------------------------------------------------------------------------------
COMMON STOCK -- 93.6%
CANADA -- 6.4%
Celestica* 17,900 $ 1,240
GT Group Telecommunications* 36,700 484
Nortel Networks* 83,300 4,962
----------
6,686
--------------------------------------------------------------------------------
FINLAND -- 1.2%
Nokia ADR* 31,600 1,258
----------
1,258
--------------------------------------------------------------------------------
FRANCE -- 2.6%
Alcatel Alsthom ADR* 44,400 2,792
----------
2,792
--------------------------------------------------------------------------------
GERMANY -- 1.5%
Infineon Technologies ADR* 32,300 1,534
----------
1,534
--------------------------------------------------------------------------------
HONG KONG -- 4.5%
China Mobile ADR* 39,300 1,275
China Unicom ADR* 160,300 3,496
----------
4,771
--------------------------------------------------------------------------------
IRELAND -- 0.4%
Trintech Group ADR* 18,900 380
----------
380
--------------------------------------------------------------------------------
JAPAN -- 6.8%
Crosswave Communications ADR* 160,000 1,640
Furukawa Electric* 160,000 4,420
NTT ADR* 3,900 559
Softbank* 5,700 533
----------
7,152
--------------------------------------------------------------------------------
SOUTH KOREA -- 0.5%
Korea Telecom ADR* 17,300 582
----------
582
--------------------------------------------------------------------------------
SPAIN -- 0.8%
Telefonica Sa* 14,400 856
----------
856
--------------------------------------------------------------------------------
UNITED KINGDOM -- 2.9%
Autonomy ADR* 19,000 1,045
Colt Telecom ADR* 3,000 331
Marconi ADR* 37,450 1,025
Vodafone Airtouch ADR* 16,600 614
----------
3,015
--------------------------------------------------------------------------------
UNITED STATES -- 66.0%
Adobe Systems* 14,100 2,189
Affymetrix* 12,000 599
America Online* 19,800 1,064
Applied Micro Circuits* 11,500 2,381
Ariba* 16,900 2,421
Art Technology* 26,200 2,483
Shares/Face Market
Description Amount (000) Value (000)
--------------------------------------------------------------------------------
UNITED STATES -- CONTINUED
Avanex* 4,600 $ 495
Ciena* 29,800 3,660
Comcast, Cl A* 31,200 1,277
Corning* 10,100 3,000
EMC* 21,600 2,141
Globespan* 21,100 2,574
Globix* 57,200 1,334
Informatica* 25,000 2,331
Infospace* 104,000 3,146
Intersil Holding* 50,000 2,494
JDS Uniphase* 18,640 1,765
Juniper Networks* 11,600 2,540
McLeodUSA* 95,100 1,361
MRV Communications* 15,400 698
Network Appliance* 27,900 3,554
Next Level Communications* 12,600 833
NTL* 17,500 810
Palm* 118,600 6,278
PMC-Sierra* 5,400 1,162
SDL* 6,300 1,949
Storage Networks* 11,400 1,165
Sun Microsystems* 27,500 3,211
Sycamore Networks* 33,500 3,618
Veritas Software* 15,600 2,215
Vitria Technology* 48,500 2,261
Yahoo* 10,000 910
----------
69,503
----------
TOTAL COMMON STOCK (COST $100,196) 98,529
----------
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 4.7%
UBS Warburg, LLC
6.60%, dated 09/29/00, matures 10/02/00,
repurchase price $4,912,041
(collateralized by U.S. Government
Agency Instruments: total market
value $5,009,659) (A) $4,909 4,909
----------
TOTAL REPURCHASE AGREEMENT (COST $4,909) 4,909
----------
TOTAL INVESTMENTS-- 98.3% (COST $105,105) $ 103,438
==========
Percentages are based on Net Assets of $105,271,520.
* 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.
[LOGO OMITTED] 63
<PAGE>
This page is left intentionally blank.
[LOGO OMITTED] 64
<PAGE>
<TABLE>
<CAPTION>
THE PBHG FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES (000)
------------------------------------------
SEPTEMBER 30, 2000 (UNAUDITED)
--------- ------------- -----------------
PBHG PBHG
LARGE CAP PBHG GLOBAL TECHNOLOGY
VALUE INTERNATIONAL & COMMUNICATIONS
FUND FUND FUND
--------- ------------- -----------------
ASSETS:
<S> <C> <C> <C>
Investment securities (Cost $58,949, $8,265, and $100,196,
respectively) at market value $61,679 $8,594 $ 98,529
Repurchase Agreements (Cost $12,552 and $4,909, respectively)
at market value 12,552 -- 4,909
Cash 315 478 3,626
Foreign currency (Cost $11) -- 11 --
Dividends and interest receivable 120 14 24
Receivable for capital shares sold 300 70 187
Receivable for investment securities sold 12,572 147 5,936
------- ------ --------
Total assets 87,538 9,314 113,211
------- ------ --------
LIABILITIES:
Payable for investment securities purchased 22,082 -- 7,738
Payable for capital shares redeemed -- -- 2
Accrued expenses 50 21 199
------- ------ --------
Total liabilities 22,132 21 7,939
------- ------ --------
NET ASSETS:
Fund shares of PBHG Class (authorized 200 million shares for
each of the PBHG Large Cap Value Fund, PBHG International
Fund, and PBHG Global Technology & Communications Fund -- $0.001
par value) based on 4,920,429, 827,706 and 9,309,224 outstanding
shares of common stock 59,040 7,393 107,249
Undistributed net investment income/accumulated net investment loss 295 (65) (413)
Accumulated net realized gain on investments 3,341 1,636 103
Net unrealized appreciation (depreciation) on investments 2,730 329 (1,667)
------- ------ --------
NET ASSETS $65,406 $9,293 $105,272
------- ------ --------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $13.29 $11.23 $11.31
======= ====== ========
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
[LOGO OMITTED] 65
<PAGE>
THE PBHG FUNDS, INC.
STATEMENTS OF OPERATIONS (000)
------------------------------
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
--------- --------- --------- --------- --------- ------- ----------
PBHG PBHG PBHG PBHG PBHG
PBHG EMERGING LARGE CAP SELECT CORE PBHG LARGE CAP
GROWTH GROWTH GROWTH EQUITY GROWTH LIMITED 20
FUND FUND FUND FUND FUND FUND FUND 2
--------- --------- --------- --------- --------- ------- ----------
INVESTMENT INCOME:
<S> <C> <C> <C> <C> <C> <C> <C>
Dividends $ 383 $ 29 $ 223 $ 21 $ 32 $ 6 $ 375
Interest 16,440 3,868 1,285 5,261 361 504 3,068
Less: Foreign Taxes Withheld -- -- -- (3) (2) -- (7)
----------- -------- ------- -------- ------ ------ --------
Total Investment Income 16,823 3,897 1,508 5,279 391 510 3,436
----------- -------- ------- -------- ------ ------ --------
EXPENSES:
Investment Advisory Fees 24,800 5,179 1,182 6,935 698 676 4,325
Administrative Fees 4,377 914 236 1,224 123 101 763
Transfer Agent Fees 5,480 1,266 276 1,370 178 68 752
Registration and Filing Fees 170 26 60 228 10 3 31
Printing Fees 725 139 38 229 19 14 101
Professional Fees 122 27 6 31 4 3 22
Custodian Fees 100 19 6 23 7 3 14
Directors' Fees 36 8 2 9 1 1 6
Miscellaneous Fees 191 30 8 40 (1) 3 12
Line of Credit 110 29 5 21 3 3 19
Interest Expense -- -- -- 109 18 -- --
Distribution Fees 1 161 -- -- -- -- -- --
----------- -------- ------- -------- ------ ------ --------
TOTAL EXPENSES 36,272 7,637 1,819 10,219 1,060 875 6,045
----------- -------- ------- -------- ------ ------ --------
Waiver of Investment Advisory Fees -- -- -- -- -- -- --
----------- -------- ------- -------- ------ ------ --------
Advisory Fee Recaptured -- -- -- -- -- -- --
----------- -------- ------- -------- ------ ------ --------
Net Expenses 36,272 7,637 1,819 10,219 1,060 875 6,045
----------- -------- ------- -------- ------ ------ --------
NET INVESTMENT INCOME (LOSS) (19,449) (3,740) (311) (4,940) (669) (365) (2,609)
----------- -------- ------- -------- ------ ------ --------
Net Realized Gain (Loss) from
Security Transactions 665,459 (6,414) 2,881 (202,744) 1,890 4,249 36,537
Net Realized Gain (Loss) on Foreign
Currency Transactions -- -- -- -- -- -- --
Net Change in Unrealized Appreciation
(Depreciation) on Investments (1,125,809) (24,673) 11,363 122,054 6,905 (3,625) (78,796
----------- -------- ------- -------- ------ ------ --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS (460,350) (31,087) 14,244 (80,690) 8,795 624 (42,259)
----------- -------- ------- -------- ------ ------ --------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($479,799) ($34,827) $13,933 ($85,630) $8,126 $259 ($44,868)
----------- -------- ------- -------- ------ ------ --------
----------- -------- ------- -------- ------ ------ --------
<FN>
1. All distribution fees are incurred in the Advisor Class. Currently, only the PBHG Growth Fund offers Advisor Class Shares.
2. The PBHG Global Technology & Communications Fund commenced operations on May 31, 2000.
</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.
<TABLE>
<CAPTION>
THE PBHG FUNDS, INC.
------------- ---------- ---------- --------- ---------- ------------- --------
PBHG PBHG PBHG PBHG PBHG PBHG
NEW LARGE CAP MID-CAP SMALL CAP FOCUSED PBHG CASH
OPPORTUNITIES VALUE VALUE VALUE VALUE INTERNATIONAL RESERVES
FUND FUND FUND FUND FUND FUND FUND
------------- ---------- ---------- --------- ---------- ------------- --------
INVESTMENT INCOME:
<S> <C> <C> <C> <C> <C> <C> <C>
Dividends $ 10 $ 412 $ 414 $ 322 $ 180 $ 114 --
Interest 619 185 261 551 100 -- $16,063
Less: Foreign Taxes Withheld -- -- -- -- -- (14) --
-------- ------ ------ ------- ---- ------ -------
Total Investment Income 629 597 675 873 280 100 16,063
-------- ------ ------ ------- ---- ------ -------
EXPENSES:
Investment Advisory Fees 973 172 331 644 154 51 751
Administrative Fees 146 40 59 97 27 8 374
Transfer Agent Fees 77 54 72 144 33 22 131
Registration and Filing Fees (22) 13 15 31 14 6 8
Printing Fees 19 5 7 13 4 1 53
Professional Fees 5 1 2 2 1 -- 10
Custodian Fees 10 7 8 12 4 13 17
Directors' Fees 1 -- -- 1 -- -- 3
Miscellaneous Fees 2 2 4 5 1 1 --
Line of Credit (2) 1 2 2 1 -- --
Interest Expense 33 3 13 -- -- -- --
Distribution Fees 1 -- -- -- -- -- -- --
-------- ------ ------ ------- ---- ------ -------
TOTAL EXPENSES 1,242 298 513 951 239 102 1,347
-------- ------ ------ ------- ---- ------ -------
Waiver of Investment Advisory
Fees -- -- -- -- -- -- --
-------- ------ ------ ------- ---- ------ -------
Advisory Fee Recaptured 1 -- -- 15 -- -- --
-------- ------ ------ ------- ---- ------ -------
Net Expenses 1,243 298 513 966 239 102 1,347
-------- ------ ------ ------- ---- ------ -------
NET INVESTMENT INCOME (LOSS) (614) 299 162 (93) 41 (2) 14,716
-------- ------ ------ ------- ---- ------ -------
Net Realized Gain (Loss) from
Security Transactions 6,090 3,406 2,364 8,085 (138) 469 --
Net Realized Gain (Loss) on
Foreign Currency Transactions -- -- -- -- -- (23) --
Net Change in Unrealized
Appreciation (Depreciation)
on Investments (87,238) 1,232 1,536 2,990 (347) (1,901) --
-------- ------ ------ ------- ---- ------ -------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS (81,148) 4,638 3,900 11,075 (485) (1,455) --
-------- ------ ------ ------- ---- ------ -------
INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS ($81,762) $4,937 $4,062 $10,982 ($444) ($1,457) $14,716
-------- ------ ------ ------- ---- ------ -------
-------- ------ ------ ------- ---- ------ -------
</TABLE>
<TABLE>
<CAPTION>
-------------- ------------ -----------------
PBHG PBHG PBHG
TECHNOLOGY & STRATEGIC GLOBAL TECHNOLOGY
COMMUNICATIONS SMALL & COMMUNICATIONS
FUND COMPANY FUND FUND 2
-------------- ------------ -----------------
INVESTMENT INCOME:
<S> <C> <C> <C>
Dividends $ 38 $ 123 $ 184
Interest 4,274 186 --
Less: Foreign Taxes Withheld (2) -- --
-------- ------ ------
Total Investment Income 4,310 309 184
-------- ------ ------
EXPENSES:
Investment Advisory Fees 13,867 405 436
Administrative Fees 2,447 61 44
Transfer Agent Fees 2,662 77 70
Registration and Filing Fees 125 15 12
Printing Fees 351 9 7
Professional Fees 70 2 1
Custodian Fees 47 11 25
Directors' Fees 20 1 --
Miscellaneous Fees 51 6 9
Line of Credit 52 2 1
Interest Expense 330 -- --
Distribution Fees 1 -- -- --
-------- ------ ------
TOTAL EXPENSES 20,022 589 605
-------- ------ ------
Waiver of Investment Advisory
Fees -- -- (8)
-------- ------ ------
Advisory Fee Recaptured -- 20 --
-------- ------ ------
Net Expenses 20,022 609 597
-------- ------ ------
NET INVESTMENT INCOME (LOSS) (15,712) (300) (413)
-------- ------ ------
Net Realized Gain (Loss) from
Security Transactions (109,074) 3,389 103
Net Realized Gain (Loss) on
Foreign Currency Transactions -- -- --
Net Change in Unrealized
Appreciation (Depreciation)
on Investments (188,188) 4,181 (1,667)
-------- ------ ------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS (297,262) 7,570 (1,564)
-------- ------ ------
INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS ($312,974) $7,270 ($1,977)
-------- ------ ------
-------- ------ ------
<FN>
1. All distribution fees are incurred in the Advisor Class. Currently, only the
PBHG Growth Fund offers Advisor Class Shares.
2. The PBHG Global Technology & Communications Fund commenced operations on May
31, 2000.
</FN>
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
[LOGO OMITTED] 66 & 67
<PAGE>
THE PBHG FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (000)
-----------------------------------------
FOR THE SIX MONTH PERIOD
ENDED SEPTEMBER 30, 2000 (UNAUDITED) AND
THE PERIOD ENDING MARCH 31, 2000
<TABLE>
<CAPTION>
------------------------- --------------------------- ---------------------------
PBHG PBHG PBHG
GROWTH EMERGING GROWTH LARGE CAP GROWTH
FUND FUND FUND
------------------------- --------------------------- ---------------------------
4/1/00 4/1/99 4/1/00 4/1/99 4/1/00 4/1/99
to to to to to to
9/30/00 3/31/00 9/30/00 3/31/00 9/30/00 3/31/00
---------- ---------- ----------- ----------- ---------- ----------
INVESTMENT ACTIVITIES:
<S> <C> <C> <C> <C> <C> <C>
Net Investment Loss $ (19,449) $ (35,010) $ (3,740) $ (6,447) $ (311) $ (1,212)
Net Realized Gain (Loss)
from Security Transactions 665,459 1,444,408 (6,414) 253,905 2,881 73,256
Net Realized Gain (Loss) on
Foreign Currency Transactions -- -- -- -- -- --
Net Change in Unrealized Appreciation
(Depreciation) on Investments and
Foreign Currency Transactions (1,125,809) 2,040,376 (24,673) 356,132 11,363 36,253
---------- ---------- ---------- ---------- ---------- --------
Net Increase (Decrease) in Net Assets
Resulting from Operations (479,799) 3,449,774 (34,827) 603,590 13,933 108,297
---------- ---------- ---------- ---------- ---------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income -- -- -- -- -- --
Net Realized Gains from Security
Transactions -- (146,848) -- (31,621) -- (38,911)
---------- ---------- ---------- ---------- ---------- --------
Total Distributions -- (146,848) -- (31,621) -- (38,911)
---------- ---------- ---------- ---------- ---------- --------
CAPITAL SHARE TRANSACTIONS:
PBHG Class
Shares Issued 10,803,349 8,396,419 2,822,167 4,764,340 376,993 161,752
Shares Issued upon Reinvestment of
Distributions -- 140,393 -- 30,659 -- 36,766
Shares Redeemed (10,950,497) (8,520,260) (2,908,697) (4,766,038) (144,028) (155,028)
---------- ---------- ---------- ---------- ---------- --------
Total PBHG Class Transactions (147,148) 16,552 (86,530) 28,961 232,965 43,490
---------- ---------- ---------- ---------- ---------- --------
Shares Issued 27,178 30,264 -- -- -- --
Shares Issued upon Reinvestment of
Distributions -- 3,951 -- -- -- --
---------- ---------- ---------- ---------- ---------- --------
Shares Redeemed (29,545) (39,497) -- -- -- --
---------- ---------- ---------- ---------- ---------- --------
Total Advisor Class Transactions (2,367) (5,282) -- -- -- --
---------- ---------- ---------- ---------- ---------- --------
Increase (Decrease) in Net Assets
Derived from Capital Share
Transactions (149,515) 11,270 (86,530) 28,961 232,965 43,490
---------- ---------- ---------- ---------- ---------- --------
Total Increase (Decrease) in
Net Assets (629,314) 3,314,196 (121,357) 600,930 246,898 112,876
---------- ---------- ---------- ---------- ---------- --------
NET ASSETS:
Beginning of Period 6,609,171 3,294,975 1,336,938 736,008 256,965 144,089
---------- ---------- ---------- ---------- ---------- --------
End of Period $5,979,857 $6,609,171 $1,215,581 $1,336,938 $ 503,863 $256,965
========== ========== ========== ========== ========== ========
SHARES ISSUED AND REDEEMED:
PBHG Class
Shares Issued 211,486 207,463 78,868 166,771 9,940 4,845
Shares Issued upon Reinvestment
of Distributions -- 3,293 -- 987 -- 1,370
Shares Redeemed (213,498) (232,422) (80,984) (170,053) (4,052) (5,381)
---------- ---------- ---------- ---------- --------- --------
Total PBHG Class Share Transactions (2,012) (21,666) (2,116) (2,295) 5,888 834
---------- ---------- ---------- ---------- --------- --------
Advisor Class
Shares Issued 535 693 -- -- -- --
Shares Issued upon Reinvestment of
Distributions -- 94 -- -- -- --
Shares Redeemed (562) (1,033) -- -- -- --
---------- ---------- ---------- ---------- --------- --------
Total Advisor Class Share Transactions (27) (246) -- -- -- --
---------- ---------- ---------- ---------- --------- --------
Net Increase (Decrease) in Shares
Outstanding (2,039) (21,912) (2,116) (2,295) 5,888 834
========== ========== ========== ========== ========== ========
Amounts designated as "--" are either $0 or have been rounded to $0.
</TABLE>
The accompanying notes are an integral part of the financial statements.
[LOGO OMITTED] 68
<PAGE>
<TABLE>
<CAPTION>
THE PBHG FUNDS, INC.
------------------------- --------------------------- ------------------------- ------------------------
PBHG PBHG PBHG PBHG
SELECT EQUITY CORE GROWTH LIMITED LARGE CAP 20
FUND FUND FUND FUND
------------------------- --------------------------- ------------------------- ------------------------
4/1/00 4/1/99 4/1/00 4/1/99 4/1/00 4/1/99 4/1/00 4/1/99
to to to to to to to to
9/30/00 3/31/00 9/30/00 3/31/00 9/30/00 3/31/00 9/30/00 3/31/00
--------- ----------- ---------- --------- -------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ (4,940) $ (3,460) $ (669) $ (1,127) $ (365) $ (869) $ (2,609) $ (5,093)
(202,744) 243,578 1,890 68,016 4,249 48,591 36,537 272,534
-- -- -- -- -- 51,160 -- --
122,054 255,606 6,905 16,011 (3,625) -- (78,796) 242,817
---------- ---------- ---------- -------- -------- -------- ---------- ----------
(85,630) 495,724 8,126 82,900 259 98,882 (44,868) 510,258
---------- ---------- ---------- -------- -------- -------- ---------- ----------
-- -- -- -- -- -- -- --
-- (56,886) -- -- -- (22,649) -- (104,393)
---------- ---------- ---------- -------- -------- -------- ---------- ----------
-- (56,886) -- -- -- (22,649) -- (104,393)
---------- ---------- ---------- -------- -------- -------- ---------- ----------
3,533,634 2,772,860 194,048 303,542 4,067 20,694 681,809 768,942
-- 55,117 -- -- -- 21,960 -- 100,719
(3,083,439) (1,811,421) (177,293) (306,828) (14,552) (71,768) (564,837) (795,143)
---------- ---------- ---------- -------- -------- -------- ---------- ----------
450,195 1,016,556 16,755 (3,286) (10,485) (29,114) 116,972 74,518
---------- ---------- ---------- -------- -------- -------- ---------- ----------
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
---------- ---------- ---------- -------- -------- -------- ---------- ----------
-- -- -- -- -- -- -- --
---------- ---------- ---------- -------- -------- -------- ---------- ----------
-- -- -- -- -- -- -- --
---------- ---------- ---------- -------- -------- -------- ---------- ----------
450,195 1,016,556 16,755 (3,286) (10,485) (29,114) 116,972 74,518
---------- ---------- ---------- -------- -------- -------- ---------- ----------
364,565 1,455,394 24,881 79,614 (10,226) 47,119 72,104 480,383
---------- ---------- ---------- -------- -------- -------- ---------- ----------
1,691,298 235,904 166,099 86,485 155,130 108,011 1,083,460 603,077
---------- ---------- ---------- -------- -------- -------- ---------- ----------
$2,055,863 $1,691,298 $ 190,980 $166,099 $144,904 $155,130 $1,155,564 $1,083,460
========== ========== ========== ======== ======== ======== ========== ==========
50,957 41,645 6,901 14,737 194 1,126 16,680 22,265
-- 1,153 -- -- -- 1,270 -- 3,214
(45,621) (30,157) (6,369) (15,398) (688) (4,722) (14,427) (26,069)
---------- ---------- ---------- -------- -------- -------- ---------- ----------
5,336 12,641 532 (661) (494) (2,326) 2,253 (590)
---------- ---------- ---------- -------- -------- -------- ---------- ----------
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
---------- ---------- ---------- -------- -------- -------- ---------- ----------
-- -- -- -- -- -- -- --
---------- ---------- ---------- -------- -------- -------- ---------- ----------
5,336 12,641 532 (661) (494) (2,326) 2,253 (590)
========== ========== ========== ======== ======== ======== ========== ==========
</TABLE>
[LOGO OMITTED] 69
<PAGE>
THE PBHG FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (000) -- C0NTINUED
------------------------------------------------------
<TABLE>
<CAPTION>
----------------------- ---------------------- ---------------------
PBHG PBHG PBHG
NEW OPPORTUNITIES LARGE CAP VALUE MID-CAP VALUE
FUND FUND FUND
----------------------- ---------------------- ---------------------
4/1/00 4/1/99 4/1/00 4/1/99 4/1/00 4/1/99
to to to to to to
9/30/00 3/31/00 9/30/00 3/31/00 9/30/00 3/31/00
-------- --------- --------- ------- --------- ---------
INVESTMENT ACTIVITIES:
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income (Loss) $ (614) $ (1,630) $ 299 $ 266 $ 162 $ (65)
Net Realized Gain (Loss) from Security
Transactions 6,090 124,962 3,406 5,419 2,364 10,140
Net Realized Gain (Loss) on Foreign Currency
Transactions -- -- -- -- -- --
Net Change in Unrealized Appreciation
(Depreciation) on Investments and Foreign
Currency Transactions (87,238) 126,277 1,232 (715) 1,536 4,710
-------- -------- -------- --------- -------- ---------
Net Increase (Decrease) in Net Assets
Resulting from Operations (81,762) 249,609 4,937 4,970 4,062 14,785
-------- -------- -------- --------- -------- ---------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income -- -- -- (192) -- (4)
Net Realized Gains from Security
Transactions -- (11,102) -- (8,414) -- (11,964)
-------- -------- -------- --------- -------- ---------
Total Distributions -- (11,102) -- (8,606) -- (11,968)
-------- -------- -------- --------- -------- ---------
CAPITAL SHARE TRANSACTIONS:
PBHG Class
Shares Issued 107,033 423,099 98,517 30,431 155,635 62,855
Shares Issued upon Reinvestment of
Distributions -- 10,730 -- 8,390 -- 11,660
Shares Redeemed (230,429) (333,478) (70,970) (47,185) (102,820) (73,623)
-------- -------- -------- --------- -------- ---------
Total PBHG Class Transactions (123,396) 100,351 27,547 (8,364) 52,815 892
-------- -------- -------- --------- -------- ---------
Increase (Decrease) in Net Assets Derived
from Capital Share Transactions (123,396) 100,351 27,547 (8,364) 52,815 892
-------- -------- -------- --------- -------- ---------
Total Increase (Decrease) in Net Assets (205,158) 338,858 32,484 (12,000) 56,877 3,709
-------- -------- -------- --------- -------- ---------
NET ASSETS:
Beginning of Period 355,600 16,742 32,922 44,922 60,690 56,981
-------- -------- -------- --------- -------- ---------
End of Period $150,442 $355,600 $ 65,406 $ 32,922 $117,567 $ 60,690
======== ======== ======== ========= ======== =========
SHARES ISSUED AND REDEEMED:
PBHG Class
Shares Issued 1,383 7,591 7,866 2,408 10,688 4,370
Shares Issued upon Reinvestment of
Distributions -- 192 -- 715 -- 1,026
Shares Redeemed (3,106) (5,178) (5,697) (3,616) (7,305) (4,780)
-------- -------- -------- --------- -------- ---------
Total PBHG Class Share Transactions (1,723) 2,605 2,169 (493) 3,383 616
-------- -------- -------- --------- -------- ---------
Net Increase (Decrease) in Shares Outstanding (1,723) 2,605 2,169 (493) 3,383 616
======== ======== ======== ========= ======== =========
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
[LOGO OMITTED] 70
<PAGE>
<TABLE>
<CAPTION>
THE PBHG FUNDS, INC.
---------------------- ---------------------- --------------------- ---------------------------
PBHG PBHG PBHG PBHG
SMALL CAP VALUE FOCUSED VALUE INTERNATIONAL CASH RESERVES
FUND FUND FUND FUND
---------------------- ---------------------- --------------------- ---------------------------
4/1/00 4/1/99 4/1/00 4/1/99 4/1/00 4/1/99 4/1/00 4/1/99
to to to to to to to to
9/30/00 3/31/00 9/30/00 3/31/00 9/30/00 3/31/00 9/30/00 3/31/00
--------- --------- -------- -------- -------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ (93) $ (390) $ 41 $ (5) $ (2) $ (72) $ 14,716 $ 9,315
8,085 13,720 (138) 2,109 469 3,924 -- (12)
-- -- -- -- (23) (38) -- --
2,990 20,816 (347) 2,437 (1,901) (1,438) -- --
-------- --------- ------- ------- ------- --------- ----------- -----------
10,982 34,146 (444) 4,541 (1,457) 2,376 14,716 9,303
-------- --------- ------- ------- ------- --------- ----------- ------------
-- -- -- -- -- -- (14,718) (9,312)
-- -- -- (305) -- (781) -- --
-------- --------- ------- ------- ------- --------- ----------- ------------
-- -- -- (305) -- (781) (14,718) (9,312)
-------- --------- ------- ------- ------- --------- ----------- ------------
187,600 105,635 53,947 20,548 6,386 38,500 17,564,490 12,080,349
-- -- -- 304 -- 749 10,293 6,503
(80,756) (116,934) (32,625) (6,190) (7,018) (41,682) (17,908,646) (11,651,624)
-------- --------- ------- ------- ------- --------- ----------- ------------
106,844 (11,299) 21,322 14,662 (632) (2,433) (333,863) 435,228
-------- --------- ------- ------- ------- --------- ----------- ------------
106,844 (11,299) 21,322 14,662 (632) (2,433) (333,863) 435,228
-------- --------- ------- ------- ------- --------- ----------- ------------
117,826 22,847 20,878 18,898 (2,089) (838) (333,865) 435,219
-------- --------- ------- ------- ------- --------- ----------- ------------
92,634 69,787 22,556 3,658 11,382 12,220 579,458 144,239
-------- --------- ------- ------- ------- --------- ----------- ------------
$210,460 $ 92,634 $43,434 $22,556 $ 9,293 $ 11,382 $ 245,593 $ 579,458
======== ========= ======= ======= ======= ========= =========== ============
9,502 7,348 3,077 1,289 540 3,260 17,564,490 12,080,349
-- -- -- 24 -- 59 10,293 6,503
(4,283) (8,540) (1,886) (445) (592) (3,493) (17,908,646) (11,651,624)
-------- --------- ------- ------- ------- --------- ----------- ------------
5,219 (1,192) 1,191 868 (52) (174) (333,863) 435,228
-------- --------- ------- ------- ------- --------- ----------- ------------
5,219 (1,192) 1,191 868 (52) (174) (333,863) 435,228
======== ========= ======= ======= ======= ========= =========== ============
</TABLE>
[LOGO OMITTED] 71
<PAGE>
THE PBHG FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (000) -- CONCLUDED
-------------------------------------------------------
<TABLE>
<CAPTION>
-------------------------- ------------------------ -------------------
PBHG TECHNOLOGY & PBHG STRATEGIC PBHG GLOBAL
COMMUNICATIONS SMALL COMPANY & TECHNOLOGY
FUND FUND COMMUNICATIONS FUND
-------------------------- ------------------------ -------------------
4/1/00 4/1/99 4/1/00 4/1/99 5/31/00 1
to to to to to
9/30/00 3/31/00 9/30/00 3/31/00 9/30/00
---------- ---------- --------- --------- ---------
INVESTMENT ACTIVITIES:
<S> <C> <C> <C> <C> <C>
Net Investment Loss $ (15,712) $ (13,642) $ (300) $ (497) $ (413)
Net Realized Gain (Loss) from Security
Transactions (109,074) 931,007 3,389 20,058 103
Net Change in Unrealized Appreciation
(Depreciation) on Investments and Foreign
Currency Transactions (188,188) 545,653 4,181 17,961 (1,667)
---------- ---------- -------- --------- --------
Net Increase (Decrease) in Net Assets
Resulting from Operations (312,974) 1,463,018 7,270 37,522 (1,977)
---------- ---------- -------- --------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net Investment Income -- -- -- -- --
Net Realized Gains from Security Transactions -- (117,239) -- (4,358) --
---------- ---------- -------- --------- --------
Total Distributions -- (117,239) -- (4,358) --
---------- ---------- -------- --------- --------
CAPITAL SHARE TRANSACTIONS:
PBHG Class
Shares Issued 7,081,301 7,338,547 61,875 65,830 151,463
Shares Issued upon Reinvestment of
Distributions -- 112,647 -- 4,220 --
Shares Redeemed (7,251,083) (5,489,432) (43,482) (76,018) (44,214)
---------- ---------- -------- --------- --------
Total PBHG Class Transactions (169,782) 1,961,762 18,393 (5,968) 107,249
---------- ---------- -------- --------- --------
Increase (Decrease) in Net Assets Derived
from Capital Share Transactions (169,782) 1,961,762 18,393 (5,968) 107,249
---------- ---------- -------- --------- --------
Total Increase (Decrease) in Net Assets (482,756) 3,307,541 25,663 27,196 105,272
---------- ---------- -------- --------- --------
NET ASSETS:
Beginning of Period 3,843,946 536,405 75,225 48,029 --
---------- ---------- -------- --------- --------
End of Period $3,361,190 $3,843,946 $100,888 $ 75,225 $105,272
========== ========== ======== ========= ========
SHARES ISSUED AND REDEEMED:
PBHG Class
Shares Issued 98,608 129,967 3,125 4,970 13,064
Shares Issued upon Reinvestment of
Distributions -- 1,941 -- 300 --
Shares Redeemed (100,800) (106,139) (2,266) (5,936) (3,755)
---------- ---------- -------- --------- --------
Total PBHG Class Share Transactions (2,192) 25,769 859 (666) 9,309
---------- ---------- -------- --------- --------
Net Increase (Decrease) in Shares Outstanding (2,192) 25,769 859 (666) 9,309
========== ========== ======== ========= ========
<FN>
1. The PBHG Global Technology & Communications Fund commenced operations on May 31, 2000.
</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.
[LOGO OMITTED] 72
<PAGE>
<TABLE>
<CAPTION>
THE PBHG FUNDS, INC.
FINANCIAL HIGHLIGHTS
-----------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED)
NET REALIZED AND NET
ASSET NET UNREALIZED DISTRIBUTIONS DISTRIBUTIONS ASSET
VALUE INVESTMENT GAINS OR FROM NET FROM VALUE
BEGINNING INCOME (LOSSES) INVESTMENT CAPITAL END TOTAL
OF PERIOD (LOSS) ON SECURITIES INCOME GAINS OF PERIOD RETURN
------------------------------------------------------------------------------------------------------------------------------------
----------------
PBHG GROWTH FUND
----------------
PBHG CLASS
<S> <C> <C> <C> <C> <C> <C> <C>
2000** 2 $58.73 $(0.17) $(4.44) -- -- $54.12 (7.85)%+
2000 2 24.51 (0.33) 36.14 -- $(1.59) 58.73 148.57%
1999 2 28.23 (0.24) (3.48) -- -- 24.51 (13.18)%
1998 21.06 (0.26) 7.43 -- -- 28.23 34.05 %
1997 25.30 (0.10) (4.14) -- -- 21.06 (16.76)%
1996 16.70 (0.06) 8.66 -- -- 25.30 51.50 %
PBHG ADVISOR CLASS
2000** 2 $58.19 $(0.23) $ (4.39) -- -- $53.57 (7.94)%+
2000 2 24.35 (0.42) 35.85 -- $(1.59) 58.19 147.98%
1999 2 28.12 (0.30) (3.47) -- -- 24.35 (13.41)%
1998 21.03 (0.15) 7.24 -- -- 28.12 33.71 %
1997 1 25.42 (0.06) (4.33) -- -- 21.03 (17.27)%+
-------------------------
PBHG EMERGING GROWTH FUND
-------------------------
PBHG Class
2000** 2 $40.00 $(0.11) $ (1.06) -- -- $38.83 (2.92)%+
2000 2 20.61 (0.21) 20.76 -- $(1.16) 40.00 101.33%
1999 2 25.83 (0.18) (4.96) -- (0.08) 20.61 (19.91)%
1998 19.26 (0.24) 6.81 -- -- 25.83 34.11 %
1997 23.07 (0.11) (2.87) -- (0.83) 19.26 (13.71)%
1996 16.10 (0.07) 8.03 -- (0.99) 23.07 50.16 %
--------------------------
PBHG LARGE CAP GROWTH FUND
--------------------------
PBHG Class
2000** 2 $38.37 $(0.04) $ 1.71 -- -- $40.04 4.35%+
2000 2 24.57 (0.23) 21.32 -- $(7.29) 38.37 98.60%
1999 2 22.69 (0.16) 3.53 -- (1.49) 24.57 15.90%
1998 14.26 (0.19) 8.82 -- (0.20) 22.69 60.80 %
1997 14.53 (0.05) (0.21) -- (0.01) 14.26 (1.77)%
1996 4 10.00 (0.03) 4.97 -- (0.41) 14.53 50.47 %+
-----------------------
PBHG SELECT EQUITY FUND
-----------------------
PBHG Class
2000** 2 $77.81 $(0.21) $ (1.66) -- -- $75.94 (2.40)%+
2000 2 25.93 (0.34) 58.71 -- $(6.49) 77.81 240.82%
1999 2 24.15 (0.21) 1.99 -- -- 25.93 7.37%
1998 15.91 (0.44) 8.68 -- -- 24.15 51.79 %
1997 17.27 (0.13) (1.03) -- (0.20) 15.91 (6.94)%
1996 4 10.00 (0.05) 7.68 -- (0.36) 17.27 77.75 %+
---------------------
PBHG CORE GROWTH FUND
---------------------
PBHG CLASS
2000** 2 $30.25 $(0.12) $ 1.58 -- -- $31.71 4.83%+
2000 2 14.06 (0.20) 16.39 -- -- 30.25 115.15%
1999 2 13.53 (0.14) 0.67 -- -- 14.06 3.92%
1998 10.34 (0.33) 3.52 -- -- 13.53 30.85 %
1997 11.82 (0.09) (1.39) -- -- 10.34 (12.52)%
1996 3 10.00 -- 1.82 -- -- 11.82 18.20 %+
</TABLE>
<TABLE>
<CAPTION>
RATIO
RATIO OF NET
OF NET RATIO INVESTMENT
NET INVESTMENT OF EXPENSES INCOME (LOSS)
ASSETS RATIO INCOME TO AVERAGE TO AVERAGE
END OF EXPENSES (LOSS) NET ASSETS NET ASSETS PORTFOLIO
OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
(000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
-----------------------------------------------------------------------------------------------------------------------------------
----------------
PBHG GROWTH FUND
----------------
PBHG CLASS
<S> <C> <C> <C> <C> <C> <C> <C>
2000** 2 $5,848,783 1.24%* (0.67)%* 1.24%* (0.67)%* 44.99%+
2000 2 6,465,234 1.23% (0.90)% 1.23% (0.90)% 107.73%
1999 2 3,228,740 1.32% (0.99)% 1.32% (0.99)% 80.51%
1998 5,338,380 1.26% (0.74)% 1.26% (0.74)% 94.21%
1997 4,634,138 1.25% (0.69)% 1.25% (0.69)% 64.89%
1996 3,298,666 1.48% (0.79)% 1.48% (0.79)% 44.64%
PBHG ADVISOR CLASS
2000** 2 $ 131,074 1.49%* (0.92)%* 1.49%* (0.92)%* 44.99%+
2000 2 143,937 1.48% (1.15)% 1.48% (1.15)% 107.73%
1999 2 66,235 1.57% (1.24)% 1.57% (1.24)% 80.51%
1998 89,227 1.51% (1.02)% 1.51% (1.02)% 94.21%
1997 1 12,991 1.53%* (1.11)%* 1.53%* (1.11)%* 64.89%+
-------------------------
PBHG EMERGING GROWTH FUND
-------------------------
PBHG Class
2000** 2 $1,215,581 1.25%* (0.61)%* 1.25%* (0.61)%* 28.95%+
2000 2 1,336,938 1.24% (0.76)% 1.24% (0.76)% 141.81%
1999 2 736,008 1.34% (0.80)% 1.34% (0.80)% 101.53%
1998 1,404,157 1.27% (0.80)% 1.27% (0.80)% 95.21%
1997 1,195,620 1.28% (0.36)% 1.28% (0.36)% 47.75%
1996 689,705 1.47% (0.42)% 1.47% (0.42)% 97.05%
--------------------------
PBHG LARGE CAP GROWTH FUND
--------------------------
PBHG Class
2000** 2 $ 503,863 1.15%* (0.20)%* 1.15%* (0.20)%* 49.95%+
2000 2 256,965 1.17% (0.79)% 1.17% (0.79)% 184.36%
1999 2 144,089 1.25% (0.71)% 1.25% (0.71)% 46.16%
1998 145,662 1.22% (0.79)% 1.22% (0.79)% 46.56%
1997 119,971 1.23% (0.47)% 1.23% (0.47)% 51.70%
1996 4 53,759 1.50%* (0.66)%* 2.07%* (1.23)%* 116.75%+
-----------------------
PBHG SELECT EQUITY FUND
-----------------------
PBHG Class
2000** 2 $2,055,863 1.25%* (0.61)%* 1.25%* (0.61)%* 53.48%+
2000 2 1,691,298 1.18% (0.68)% 1.18% (0.68)% 200.56%
1999 2 235,904 1.34% (0.90)% 1.34% (0.90)% 56.59%
1998 336,076 1.35% (1.15)% 1.35% (1.15)% 72.16%
1997 372,486 1.26% (0.76)% 1.26% (0.76)% 71.70%
1996 4 202,796 1.50%* (0.74)%* 1.73%* (0.97)%* 206.22%+
---------------------
PBHG CORE GROWTH FUND
---------------------
PBHG CLASS
2000** 2 $ 190,980 1.29%* (0.82)%* 1.29%* (0.82)%* 63.64%+
2000 2 166,099 1.33% (1.02)% 1.33% (1.02)% 312.32%
1999 2 86,485 1.45% (1.16)% 1.45% (1.16)% 120.93%
1998 165,510 1.35% (1.07)% 1.35% (1.07)% 72.78%
1997 283,995 1.36% (0.77)% 1.36% (0.77)% 46.75%
1996 3 31,092 1.50%* (0.18)%* 2.92%* (1.60)%* 17.00%+
</TABLE>
The accompanying notes are an integral part of the financial statements.
[LOGO OMITTED] 73
<PAGE>
THE PBHG FUNDS, INC.
FINANCIAL HIGHLIGHTS -- CONCLUDED
--------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
NET REALIZED AND NET
ASSET NET UNREALIZED DISTRIBUTIONS DISTRIBUTIONS ASSET
VALUE INVESTMENT GAINS OR FROM NET FROM VALUE
BEGINNING INCOME (LOSSES) INVESTMENT CAPITAL END
OF PERIOD (LOSS) ON SECURITIES INCOME GAINS OF PERIOD
------------------------------------------------------------------------------------------------------------------------------------
-----------------
PBHG LIMITED FUND
-----------------
<S> <C> <C> <C> <C> <C> <C>
PBHG CLASS
2000** 2 $23.11 $(0.06) $ 0.25 -- -- $23.30
2000 2 11.95 (0.12) 15.20 -- $(3.92) 23.11
1999 2 14.08 (0.10) (1.45) -- (0.58) 11.95
1998 9.05 (0.10) 5.53 -- (0.40) 14.08
1997 6 10.00 0.02 (0.93) $(0.03) (0.01) 9.05
----------------------
PBHG LARGE CAP 20 FUND
----------------------
PBHG CLASS
2000** 2 $44.34 $(0.11) $ (0.93) -- -- $43.30
2000 2 24.10 (0.25) 26.26 -- $(5.77) 44.34
1999 2 15.98 (0.12) 8.46 -- (0.22) 24.10
1998 9.25 (0.07) 6.80 -- -- 15.98
1997 7 10.00 (0.01) (0.73) $(0.01) -- 9.25
---------------------------
PBHG NEW OPPORTUNITIES FUND
---------------------------
PBHG CLASS
2000** 2 $98.19 $(0.24) $(18.71) -- -- $79.24
2000 2 16.47 (0.71) 85.60 -- $(3.17) 98.19
1999 10 13.52 (0.01) 2.96 -- -- 16.47
-------------------------
PBHG LARGE CAP VALUE FUND
-------------------------
PBHG CLASS
2000** 2 $11.97 $0.07 $ 1.25 -- -- $13.29
2000 13.85 0.12 1.78 $(0.08) $(3.70) 11.97
1999 13.01 0.08 2.45 (0.10) (1.59) 13.85
1998 10.11 0.02 3.84 (0.06) (0.90) 13.01
1997 8 10.00 0.02 0.09 -- -- 10.11
-----------------------
PBHG MID-CAP VALUE FUND
-----------------------
PBHG CLASS
2000** 2 $13.82 $ 0.03 $ 1.27 -- -- $15.12
2000 2 15.09 (0.02) 5.03 -- $(6.28) 13.82
1999 15.30 -- 0.92 -- (1.13) 15.09
1998 9 10.00 (0.01) 6.00 -- (0.69) 15.30
-------------------------
PBHG SMALL CAP VALUE FUND
-------------------------
PBHG CLASS
2000** 2 $18.75 $(0.01) $ 1.98 -- -- $20.72
2000 2 11.38 (0.08) 7.45 -- -- 18.75
1999 2 15.38 (0.09) (3.06) -- $(0.85) 11.38
1998 9 10.00 (0.03) 6.15 -- (0.74) 15.38
-----------------------
PBHG FOCUSED VALUE FUND
-----------------------
PBHG CLASS
2000** 2 $18.51 $ 0.02 $(0.50) -- -- $18.03
2000 2 10.46 (0.01) 8.93 -- $(0.87) 18.51
1999 10 10.32 -- 0.14 -- -- 10.46
</TABLE>
<TABLE>
<CAPTION>
RATIO
RATIO OF NET
OF NET RATIO INVESTMENT
NET INVESTMENT OF EXPENSES INCOME (LOSS)
ASSETS RATIO INCOME TO AVERAGE TO AVERAGE
END OF EXPENSES (LOSS) NET ASSETS NET ASSETS PORTFOLIO
TOTAL OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
RETURN (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
-----------------------------------------------------------------------------------------------------------------------------------
-----------------
PBHG LIMITED FUND
-----------------
PBHG CLASS
<S> <C> <C> <C> <C> <C> <C> <C>
2000** 2 0.82%+ $ 144,904 1.29%* (0.54)%* 1.29%* (0.54)%* 28.62%+
2000 2 137.27% 155,130 1.32% (0.76)% 1.32% (0.76)% 107.78%
1999 2 (11.01)% 108,011 1.40% (0.81)% 1.40% (0.81)% 111.07%
1998 60.78 % 178,168 1.40% (0.72)% 1.40% (0.72)% 81.36%
1997 6 (9.15)%+ 137,520 1.42%* 0.33%* 1.42%* 0.33%* 75.46%+
----------------------
PBHG LARGE CAP 20 FUND
----------------------
PBHG CLASS
2000** 2 (2.35)%+ $1,155,564 1.19%* (0.51)%* 1.19%* (0.51)%* 54.42%+
2000 2 117.88% 1,083,460 1.23% (0.82)% 1.23% (0.82)% 147.35%
1999 2 52.52% 603,077 1.27% (0.64)% 1.27% (0.64)% 76.41%
1998 72.76% 192,631 1.41% (0.79)% 1.41% (0.79)% 98.27%
1997 7 (7.40)%+ 69,819 1.50%* 0.17 %* 1.50%* 0.17 %* 43.98%+
---------------------------
PBHG NEW OPPORTUNITIES FUND
---------------------------
PBHG CLASS
2000** 2 (19.29)%+ $ 150,442 1.28%* (0.63)%* 1.28%* (0.63)%* 137.57%+
2000 2 529.94% 355,600 1.34% (1.15)% 1.34% (1.15)% 668.31%
1999 10 21.82%+ 16,742 1.50%* (0.80)%* 1.59%* (0.89)%* 109.43%+
-------------------------
PBHG LARGE CAP VALUE FUND
-------------------------
PBHG CLASS
2000** 2 11.03%+ $ 65,406 1.13%* 1.13%* 1.13%* 1.13%* 608.70%+
2000 14.25% 32,922 1.11% 0.71% 1.11% 0.71% 1018.03%
1999 20.29% 44,922 1.01% 0.59% 1.01% 0.59% 568.20%
1998 39.47% 76,476 1.17% 0.98% 1.17% 0.98% 403.59%
1997 8 1.10%+ 26,262 1.50%* 1.61%* 1.74%* 1.37%* 0.00%+
-----------------------
PBHG MID-CAP VALUE FUND
-----------------------
PBHG CLASS
2000** 2 9.41%+ $ 117,567 1.32%* 0.42%* 1.32%* 0.42%* 119.37%+
2000 2 42.21% 60,690 1.44% (0.15)% 1.44% (0.15)% 742.57%
1999 8.35% 56,981 1.33% 0.01% 1.33% 0.01% 732.73%
1998 9 61.06%+ 54,173 1.47%* (0.17)%* 1.47%* (0.17)%* 399.96%+
-------------------------
PBHG SMALL CAP VALUE FUND
-------------------------
PBHG CLASS
2000** 2 10.51%+ $ 210,460 1.50%* (0.14)%* 1.50%* (0.14)%* 110.71%+
2000 2 64.76% 92,634 1.50% (0.56)% 1.58% (0.64)% 352.85%
1999 2 (20.93)% 69,787 1.48% (0.71)% 1.48% (0.71)% 273.87%
1998 9 62.27%+ 125,834 1.49%* (0.52)%* 1.49%* (0.52)%* 263.04%+
-----------------------
PBHG FOCUSED VALUE FUND
-----------------------
PBHG CLASS
2000** 2 (2.59)%+ $ 43,434 1.32%* 0.23%* 1.32%* 0.23%* 172.51%+
2000 2 89.17% 22,556 1.50% (0.10)% 1.55% (0.15)% 853.36%
1999 10 1.36%+ 3,658 1.50%* 0.09%* 2.67%* (1.08)%* 173.09%+
</TABLE>
The accompanying notes are an integral part of the financial statements.
[LOGO OMITTED] 74
<PAGE>
THE PBHG FUNDS, INC.
<TABLE>
<CAPTION>
NET REALIZED AND NET
ASSET NET UNREALIZED DISTRIBUTIONS DISTRIBUTIONS ASSET
VALUE INVESTMENT GAINS OR FROM NET FROM VALUE
BEGINNING INCOME (LOSSES) INVESTMENT CAPITAL END
OF PERIOD (LOSS) ON SECURITIES INCOME GAINS OF PERIOD
------------------------------------------------------------------------------------------------------------------------------------
-----------------------
PBHG INTERNATIONAL FUND
-----------------------
PBHG CLASS
<S> <C> <C> <C> <C> <C> <C>
2000** 2 $12.94 -- $(1.71) -- -- $11.23
2000 2 11.60 $(0.08) 2.30 -- $(0.88) 12.94
1999 11 12.04 (0.14) 0.29 $(0.17) (0.42) 11.60
1998 11.26 (0.03) 1.83 -- (1.02) 12.04
1997 10.55 -- 0.71 -- -- 11.26
1996 9.13 (0.04) 1.46 -- -- 10.55
-----------------------
PBHG CASH RESERVES FUND
-----------------------
PBHG CLASS
2000** 2 $ 1.00 $0.03 -- $(0.03) -- $1.00
2000 1.00 0.05 -- (0.05) -- 1.00
1999 1.00 0.05 -- (0.05) -- 1.00
1998 1.00 0.05 -- (0.05) -- 1.00
1997 1.00 0.05 -- (0.05) -- 1.00
1996 4 1.00 0.05 -- (0.05) -- 1.00
-------------------------------------
PBHG TECHNOLOGY & COMMUNICATIONS FUND
-------------------------------------
PBHG CLASS
2000** 2 $85.02 $(0.35) $ (6.54) -- -- $78.13
2000 2 27.59 (0.54) 62.84 -- $(4.87) 85.02
1999 2 19.27 (0.19) 8.80 -- (0.29) 27.59
1998 14.63 (0.23) 5.72 -- (0.85) 19.27
1997 12.48 (0.05) 2.55 -- (0.35) 14.63
1996 5 10.00 (0.02) 2.50 -- -- 12.48
---------------------------------
PBHG STRATEGIC SMALL COMPANY FUND
---------------------------------
PBHG CLASS
2000** 2 $19.34 $(0.07) $ 1.97 -- -- $21.24
2000 2 10.54 (0.13) 10.18 -- $(1.25) 19.34
1999 2 12.89 (0.11) (1.78) -- (0.46) 10.54
1998 8.86 (0.11) 5.01 -- (0.87) 12.89
1997 8 10.00 -- (1.14) -- -- 8.86
--------------------------------------------
PBHG GLOBAL TECHNOLOGY & COMMUNICATIONS FUND
--------------------------------------------
PBHG CLASS
2000** 2, 12 $10.00 $(0.06) $ 1.37 -- -- $11.31
</TABLE>
<TABLE>
<CAPTION>
RATIO
RATIO OF NET
OF NET RATIO INVESTMENT
NET NET INVESTMENT OF EXPENSES INCOME (LOSS)
ASSETS RATIO INCOME TO AVERAGE TO AVERAGE
END OF EXPENSES (LOSS) NET ASSETS NET ASSETS PORTFOLIO
TOTAL OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
RETURN (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------
PBHG INTERNATIONAL FUND
-----------------------
PBHG CLASS
<S> <C> <C> <C> <C> <C> <C> <C>
2000** 2 (13.21)%+ $ 9,293 2.00%* (0.03)%* 2.00%* (0.03)%* 34.19%+
2000 2 19.29% 11,382 2.00% (0.62)% 2.00% (0.62)% 90.17%
1999 11 1.42% 12,220 1.97% (0.35)% 1.97% (0.35)% 59.74%
1998 17.46% 20,905 2.00% (0.13)% 2.00% (0.13)% 85.94%
1997 6.73% 21,265 2.22% (0.32)% 2.22% (0.32)% 74.82%
1996 15.55% 11,243 2.25% (0.22)% 3.03% (1.00)% 140.26%
-----------------------
PBHG CASH RESERVES FUND
-----------------------
PBHG CLASS
2000** 2 6.03%* $ 245,593 0.54%* 5.90%* 0.54%* 5.90%* N/A
2000 4.81% 579,458 0.69% 4.78% 0.69% 4.78% N/A
1999 4.84% 144,239 0.70% 4.72% 0.70% 4.72% N/A
1998 5.13% 117,574 0.68% 5.00% 0.68% 5.00% N/A
1997 4.89% 341,576 0.68% 4.79% 0.68% 4.79% N/A
1996 4 5.24%* 99,001 0.70%* 5.05%* 0.88%* 4.87%* N/A
-------------------------------------
PBHG TECHNOLOGY & COMMUNICATIONS FUND
-------------------------------------
PBHG CLASS
2000** 2 (8.09)%+ $3,361,190 1.23%* (0.96)%* 1.23%* (0.96)%* 119.09%+
2000 2 233.99% 3,843,946 1.19% (0.96)% 1.19% (0.96)% 362.38%
1999 2 45.33% 536,405 1.34% (0.96)% 1.34% (0.96)% 276.07%
1998 38.29% 495,697 1.30% (0.91)% 1.30% (0.91)% 259.89%
1997 19.59% 493,156 1.33% (0.59)% 1.33% (0.59)% 289.91%
1996 5 24.82%+ 61,772 1.50%* (0.50)%* 2.00%* (1.00)%* 125.99%+
---------------------------------
PBHG STRATEGIC SMALL COMPANY FUND
---------------------------------
PBHG CLASS
2000** 2 9.82%+ $ 100,888 1.50%* (0.74)%* 1.50%* (0.74)%* 83.70%+
2000 2 99.74% 75,225 1.50% (0.93)% 1.55% (0.98)% 240.55%
1999 2 (14.52)% 48,029 1.50% (0.97)% 1.54% (1.01)% 140.89%
1998 56.54 % 111,983 1.45% (0.92)% 1.45% (0.92)% 215.46%
1997 8 (11.40)%+ 61,382 1.50%* 0.18%* 1.50%* 0.18%* 88.88%+
--------------------------------------------
PBHG GLOBAL TECHNOLOGY & COMMUNICATIONS FUND
--------------------------------------------
PBHG CLASS
2000** 2, 12 13.10%+ $ 105,272 2.05%* (1.42)%* 2.08%* (1.45)%* 100.51%+
<FN>
* Annualized
** For the six month period ended September 30, 2000.
+ Total returns and portfolio turnover have not been annualized.
1 The PBHG Growth Fund Advisor Class commenced operations on August 16, 1996.
2 Per share calculations were performed using average shares for the period.
3 The PBHG Core Growth Fund commenced operations on December 29, 1995.
4 The PBHG Large Cap Growth Fund, the PBHG Select Equity Fund, and the PBHG Cash Reserves Fund commenced operations on
April 5, 1995.
5 The PBHG Technology & Communications Fund commenced operations on September 29, 1995.
6 The PBHG Limited Fund commenced operations on June 28, 1996.
7 The PBHG Large Cap 20 Fund commenced operations on November 29, 1996.
8 The PBHG Large Cap Value Fund and the PBHG Strategic Small Company Fund commenced operations on December 31, 1996.
9 The PBHG Mid-Cap Value and the PBHG Small Cap Value Funds commenced operations April 30, 1997.
10 The PBHG New Opportunities Fund and the PBHG Focused Value Fund commenced operations on February 12, 1999.
11 Distributions from net investment income include $0.1659 of distribution in excess of net investment income.
12 The PBHG Global Technology & Communications Fund commenced operations on May 31, 2000.
</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.
[LOGO OMITTED] 75
<PAGE>
THE PBHG FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
-----------------------------
AS OF SEPTEMBER 30, 2000 (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 seventeen 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"), the
PBHG Strategic Small Company Fund (the "Strategic Small Company Fund") and the
PBHG Global Technology & Communications Fund (the "Global Technology &
Communications 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, the Focused Value, the Technology & Communications, and the Global
Technology & Communications Funds which are classified as non-diversified
management investment companies. Each Portfolio's prospectus provides a
description of its 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
p.m. 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, 2000, attributable to certain
net operating losses which for tax purposes, are not available to offset future
income or have been used to offset net short-term capital gains, and the
utilization of earnings and profits distributed to shareholders on redemption of
shares as a part of the dividends paid deduction for income tax purposes, have
been reclassified to the following accounts:
ACCUMULATED NET UNDISTRIBUTED NET
PAID-IN-CAPITAL REALIZED GAIN INVESTMENT INCOME
(000) (000) (000)
--------------- --------------- -----------------
Growth Fund $632,959 $(667,969) $35,010
Emerging Growth Fund 150,279 (156,726) 6,447
Large Cap Growth Fund 19,966 (21,178) 1,212
Select Equity Fund 174,473 (177,933) 3,460
Core Growth Fund 18,845 (19,975) 1,130
Limited Fund 11,306 (12,175) 869
Large Cap 20 Fund 103,605 (108,696) 5,091
New Opportunities Fund 72,343 (73,973) 1,630
Large Cap Value Fund 5,143 (4,993) (150)
Mid-Cap Value Fund 10,619 (10,683) 64
Small Cap Value Fund 3,324 (3,669) 345
Focused Value Fund 734 (739) 5
International Fund 1,895 (1,960) 65
Cash Reserves Fund -- -- --
Technology &
Communications Fund 704,923 (718,565) 13,642
Strategic Small Company Fund 8,204 (8,684) 480
The Global Technology & Communications Fund had not yet commenced operations on
March 31, 2000.
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.
The Funds may be subject to taxes imposed by countries in which they invest with
respect to their investments in issuers existing or operating in such countries.
Such taxes are generally based on income earned. The Funds accrue such taxes
when the related income is earned.
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.
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THE PBHG FUNDS, INC.
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 the Fund's Board of Directors 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.
FOREIGN CURRENCY TRANSLATION -- The books and records of the International and
Global Technology & Communications Funds 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 and Global Technology & Communications Funds do 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 and Global Technology & Communications Funds report 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 and Global Technology & Communications Funds 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, 2000, there were no forward foreign currency contracts outstanding
for the International and Global Technology & Communications Funds.
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.
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 Pilgrim Baxter & Associates, Ltd. (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 &
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, 1.50% of the average daily net assets of the
Global Technology & Communications Fund, 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,
Strategic Small Company and Global Technology & Communications Funds, pursuant
to which the Adviser has agreed to waive or limit its fees and to assume other
expenses of these 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%, to not more than 2.25% of the average daily net assets of the
International Fund and to not more than 2.15% of the average daily net assets of
the Global Technology & Communications 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, 2.15% for the Global
Technology & Communications Fund 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, 2.25% for the International Fund and 2.15%
for the Global Technology and Communications Fund, and (iii) the payment of such
reimbursement was approved by the Board of Directors on a quarterly basis. At
September 30, 2000, the amount of advisory fee waiver and reimbursement of third
party expenses by the Adviser subject to possible reimbursement were as follows:
Small Cap Value Fund $42,611
Strategic Small Company Fund $32,160
Focused Value Fund $ 5,317
Global Technology & Communications Fund $ 8,328
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.
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THE PBHG FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- CONCLUDED
------------------------------------------
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
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 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 Funds
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 Adviser has entered into an agreement with SEI Investments to act
as an agent in placing repurchase agreements for the Portfolio. Listed below are
the amounts SEI Investments earned for its services from each Portfolio for the
period ended September 30, 2000, and are reflected as a reduction of interest
income.
Growth Fund $134,283
Emerging Growth Fund 30,916
Large Cap Growth Fund 10,409
Select Equity Fund 41,917
Core Growth Fund 3,716
Limited Fund 3,988
Large Cap 20 Fund 24,297
New Opportunities Fund 5,117
Large Cap Value Fund 1,414
Mid-Cap Value Fund 1,966
Small Cap Value Fund 4,316
Focused Value Fund 781
Technology & Communications Fund 32,865
Strategic Small Company Fund 1,457
Global Technology & Communications Fund 980
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 and the Global Technology & Communications Funds. The Northern
Trust Company serves as the custodian for the International and Global
Technology & Communications Funds.
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, 2000 WERE:
AMOUNT
----------
Growth Fund $816,617
Emerging Growth Fund 239,172
Large Cap Growth Fund 75,554
Select Equity Fund 297,616
Core Growth Fund 65,000
Limited Fund 33,798
Large Cap 20 Fund 212,024
New Opportunities Fund 32,862
Large Cap Value Fund 18,381
Mid-Cap Value Fund 20,243
Small Cap Value Fund 19,658
Focused Value Fund 10,604
International Fund 12,199
Cash Reserves Fund 78,386
Technology & Communications Fund 609,345
Strategic Small Company Fund 24,572
Global Technology &
Communications Fund 24,468
On April 4, 2000, the Board of Directors approved an agreement between the Fund
and PBHG Fund Services to provide shareholder related web development and
maintenance services. For its services, PBHG Fund Services will receive an
annual fee of $720,000, which will be allocated to each fund quarterly based on
average net assets. The fee is reviewed biannually by the Board of Directors.
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 period ended
September 30, 2000 were as follows:
PURCHASES SALES
(000) (000)
---------- ----------
Growth Fund $2,614,647 $2,439,829
Emerging Growth Fund 321,918 356,026
Large Cap Growth Fund 343,626 145,178
Select Equity Fund 1,001,872 826,916
Core Growth Fund 100,202 104,440
Limited Fund 35,150 51,273
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THE PBHG FUNDS, INC.
PURCHASES SALES
(000) (000)
----------- ------------
Large Cap 20 Fund $ 602,903 $ 511,642
New Opportunities Fund 268,139 447,889
Large Cap Value Fund 310,090 284,926
Mid-Cap Value Fund 132,662 86,871
Small Cap Value Fund 225 131,227
Focused Value Fund 77,009 56,343
International Fund 3,359 4,098
Technology & Communications Fund 3,848,110 3,927,347
Strategic Small Company Fund 78,617 64,987
Global Technology & Communications Fund 195,377 95,284
The aggregate gross unrealized appreciation and depreciation of securities held
by the Portfolios at September 30, 2000 are as follows:
NET
UNREALIZED
UNREALIZED UNREALIZED APPRECIATION/
APPRECIATION DEPRECIATION (DEPRECIATION)
(000) (000) (000)
------------ ------------ --------------
Growth Fund $2,302,048 $(361,005) $1,941,043
Emerging Growth Fund 547,192 (60,416) 486,776
Large Cap Growth Fund 124,114 (16,062) 108,052
Select Equity Fund 632,383 (157,545) 474,838
Core Growth Fund 60,742 (13,491) 47,251
Limited Fund 75,711 (3,624) 72,087
Large Cap 20 Fund 384,213 (23,441) 360,772
New Opportunities Fund 44,355 (1,996) 42,359
Large Cap Value Fund 3,358 (628) 2,730
Mid-Cap Value Fund 12,490 (5,090) 7,400
Small Cap Value Fund 27,828 (11,711) 16,117
Focused Value Fund 4,180 (2,106) 2,074
International Fund 1,264 (935) 329
Technology &
Communications Fund 895,166 (375,746) 519,420
Strategic Small
Company Fund 31,182 (4,963) 26,219
Global Technology &
Communications Fund 6,494 (8,161) (1,667)
The difference between book and tax cost basis at September 30, 2000 was
immaterial. The Cash Reserves Fund had a capital loss carryforward of $11,635
expiring in 2008 at March 31, 2000, that can be used to offset future capital
gains.
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 and Global Technology & Communications Funds invest 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.
Certain funds invest a high percentage of their assets in specific sectors of
the market, especially technology, in order to achieve a potentially greater
investment return. As a result, the economic, political and regulatory
developments in a particular sector of the market, positive or negative, have a
greater impact on the fund's net asset value and will cause its shares to
fluctuate more than if the fund did not concentrate its investments in a
particular section. In addition, the Technology & Communications and the Global
Technology & Communications Funds are concentrated which means they will invest
25% or more of their net assets in specific industries within the technology and
communication sectors of the market in order to achieve a potentially greater
investment return.
6. LINE OF CREDIT
Except for the PBHG Cash Reserves Fund, each Portfolio may borrow, an amount up
to its prospectus defined limitations, from a $500 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, 2000, there were no outstanding borrowings.
Listed below are the Funds which had outstanding balances during the period
ended September 30, 2000.
DAILY
WEIGHTED
MAXIMUM AVERAGE AVERAGE
AMOUNT OUTSTANDING INTEREST
BORROWED BALANCE RATE
---------- ----------- --------
Select Equity Fund 158,700,000 1,853,005 6.61%
Core Growth Fund 12,500,000 592,896 6.60%
New Opportunities Fund 53,100,000 1,154,645 6.65%
Large Cap Value Fund 3,100,000 92,896 6.49%
Mid Cap Value Fund 15,300,000 405,464 6.47%
Small Cap Value Fund 1,500,000 12,022 6.41%
Focused Value Fund 500,000 2,732 6.37%
Technology &
Communications Fund 119,500,000 8,321,858 6.73%
7. OTHER
On September 26, 2000, Old Mutual plc acquired United Asset Management
Corporation through a tender offer and merger. As a result, Old Mutual became
the ultimate parent company of Pilgrim Baxter & Associates, Ltd., Pilgrim Baxter
Value Investors, Inc. and Murray Johnstone. This change in control constituted
an assignment of the Advisory Agreements and Investment Sub-Advisory Agreements
and resulted in their termination for the purposes of the Investment Company Act
of 1940 ("1940 Act"). Investment advisory and sub-advisory services are
currently being provided pursuant to Interim Advisory and Interim Sub-Advisory
Agreements adopted in accordance with Rule 15a-4 under the 1940 Act. Fees
payable pursuant to these interim agreements are being escrowed in accordance
with that rule. In accordance with the 1940 Act, the Fund's Board of Directors
will be asked to approve new investment advisory and sub-advisor agreements with
Pilgrim Baxter & Associated, Ltd. and each current sub-advisor and to approve
submitting these agreements to shareholders for their approval. The new
agreements will be identical to the current agreements in all material respects
except for their effective and termination dates and the elimination of a state
expense limitation provision. The new agreements will have no effect on the
contractual advisory fee rates payable by the Portfolios. No changes are
currently planned which would affect services being provided to the Portfolios.
On October 11, 2000, Aberdeen Asset Management plc agreed to buy Murray
Johnstone's immediate parent company, Murray Johnstone Holdings Ltd., from Old
Mutual.
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The PBHG Funds, Inc.
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<PAGE>
[BANK PAGE]
<PAGE>
[PBHG FUNDS LOGO OMITTED]
P.O. Box 219534
Kansas City, MO 64121-9534
Investment Adviser:
Pilgrim Baxter & Associates, Ltd.
Distributor:
SEI Investments Distribution Co.
1-800-433- WWW.PBHGFUNDS.COM
